CMHC Reports 5.6% Increase in Housing Starts for 2025, Yet Still ‘Far from Target’
In a recent report by Canada’s national housing agency, the Canada Mortgage and Housing Corporation (CMHC), significant developments in the housing market for 2025 have surfaced. While total housing starts experienced a commendable uptick—from 245,367 in 2024 to 259,028 last year—the increase still falls short of the targets set to combat ongoing housing affordability issues in Canada. CMHC’s chief economist, Mathieu Laberge, remarked that this year-over-year growth, although positive, is “far from the target” to meet projected housing demands.
The six major urban markets in Canada contributed to a collective 3.9% increase in housing starts, buoyed by records in cities like Calgary and Edmonton. Montreal saw an impressive 58% rise, and Ottawa-Gatineau reported a 12% increase. Conversely, major urban centers such as Toronto and Vancouver faced declines; Toronto’s housing starts plummeted by 31%, while Vancouver’s decreased by 3%. This disparity highlights the varied regional challenges impacting housing supply.
CMHC’s projections indicate a daunting need for up to 4.8 million new homes over the next decade to restore pre-2019 affordability levels, translating to an annual requirement of 430,000 to 480,000 units. Laberge underscored the long-term nature of this challenge, stating, “It will take time” to create sufficient housing supply to adequately address market demands.
A noteworthy trend emerging in the industry is the shift towards “missing middle” housing—mid-density projects such as row-style homes and townhouses. Developers, driven by economic uncertainties, have opted for smaller, more agile projects over large condominium developments, affirming Laberge’s assertion that in a fluctuating market, “developers would rather go small and fast.”
Despite a month-on-month rise in December’s seasonally adjusted annual rate of housing starts, experts caution against optimism. TD economist Rishi Sondhi noted that while December’s activity was elevated compared to historical trends, it was concentrated in Ontario—where construction costs remain high—and comes amid weaker pre-sales activity. Looking ahead, moderating housing starts are anticipated as factors such as reduced population growth, rising vacancy rates, and climbing unsold inventory weigh on the market.
In conclusion, while the data indicates momentum in Canada’s housing development, the path to achieving meaningful affordability solutions remains long and fraught with challenges. Industry stakeholders must navigate these complexities to foster sustainable growth in the housing sector, aligning supply more closely with demand.
📋 Article Summary
- Housing starts in Canada increased to 259,028 in 2025, up 5% from 2024, but still fall short of the 4.8 million homes needed by 2035 to restore affordability.
- The six largest markets showed varied results, with Calgary and Edmonton experiencing record increases, while Toronto and Vancouver saw significant declines.
- Developers are shifting toward "missing middle" housing by focusing on smaller, more affordable projects due to economic uncertainties.
- Although December 2025 saw an 11% increase in starts, there are concerns about sustainability due to rising vacancy rates and weak pre-construction sales activity, particularly in Ontario.
🏗️ Impact for Construction Professionals
The recent announcement by CMHC highlights a modest increase in housing starts, signaling opportunities within Canada’s construction market. For construction company owners and professionals, this presents several practical implications.
Opportunities: With a focus on "missing middle" housing, consider pivoting toward more affordable, mid-density developments. This shift caters to current market demands and can mitigate risks associated with larger, uncertain projects.
Challenges: Despite the overall increase in starts, declines in major markets like Toronto highlight potential weaknesses. Prepare for market volatility by diversifying your project portfolio, focusing on regions with rising housing starts, such as Calgary and Edmonton.
Actionable Insights: Monitor trends in demand for rental housing—over half of current starts are rental units. Position your company to secure contracts that prioritize purpose-built rentals. Also, streamline your processes to adapt to fluctuating construction costs and labor availability.
Incorporating these strategies into your strategic planning will help navigate the changing landscape, ensuring you capitalize on emerging opportunities while mitigating risks in an unpredictable market.
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