Housing Starts in Canada: Insights from July 2025

At the national level, Canada’s housing market displayed promising upward momentum in July 2025, according to the latest data released by the Canada Mortgage and Housing Corporation (CMHC). The agency reported a notable rise in the total monthly seasonally adjusted annual rate (SAAR) of housing starts, which increased by 4%, climbing from 283,523 units in June to 294,085 units in July. This boost marks a significant multi-year high, reigniting discussions on both economic trends and the housing landscape across various provinces.

Year-to-Date Performance and Regional Breakdown

Notably, Tania Bourassa-Ochoa, CMHC’s Deputy Chief Economist, emphasized that the first seven months of 2025 have shown stronger performance compared to the same period in 2024. This growth has been largely driven by increased multi-unit starts in the Prairie Provinces and Québec. However, she noted that this current growth trajectory was initiated through decisions made long before, underlining the long-term nature of real estate investments.

For instance, the year-over-year housing starts in July reflected a 4% increase, rising from 22,610 units in July 2024 to 23,464 units this past month. The year-to-date figures mirror this advancement, with starts totaling 137,875 units thus far, also up 4% from last year. Analyzing the six-month trend, there has been a increase of 3.7%, averaging 263,088 units in SAAR of total starts throughout July.

The Influence of Regional Dynamics

The performance of housing starts greatly varies across Canada’s largest cities: Toronto, Vancouver, and Montreal.

Montreal: A Standout Performer

Montreal has showcased exceptional growth, with an astounding 212% increase in actual housing starts, primarily propelled by significantly higher multi-unit starts. This robust performance indicates a thriving rental market eager to meet demand.

Alberta’s Resilience

Alberta also reported marked gains, with Edmonton experiencing a 36% uptick in housing starts year-over-year. Calgary recorded a 22% increase in starts year-to-date, despite a 24% drop from last July’s figures. Nicole Lechter, a senior real estate analyst with RSM Canada, attributes Alberta’s strong performance partly to the absence of rent control, making it an attractive target for investors amid rising residency numbers projected at 49,000 new residents in 2025.

Challenges in Vancouver and Toronto

In contrast, Vancouver’s housing market is starting to show strains despite a 24% increase in starts over the past year. Lechter warns that rising vacancy rates—currently at 12.2%—may deter future development, although Indigenous-led initiatives are noted as potential catalysts for alleviating some housing challenges.

Toronto’s market story, however, paints a bleaker picture. The city faced a significant 69% decline in starts compared to last year, attributed to both multi-unit and single-detached drops. Lechter stresses the need for policy reform to address high development costs that are constraining new rental supply, emphasizing that without changes, these trends are likely to continue downward.

Economic Influences and Future Outlook

Economically, while current housing starts appear robust, Rishi Sondhi, a TD economist, points out underlying difficulties. He attributes the sustained growth in homebuilding to a resilient rental market, buoyed by past population growth and government financing initiatives. Nevertheless, ongoing economic uncertainty and a noticeable slowdown in immigration are cited as potential impediments, leading to expectations of a cooling housing market in 2026 as population growth moderates.

Sondhi also highlights that building permit levels suggest stable starts in the near term, but cautions that foundation pouring may soon taper off. Such insights reinforce the complexity of the housing market that is influenced by both past decisions and future projections.

Conclusion

July’s housing start data illustrates a complex but encouraging national landscape, characterized by regional disparities and evolving economic conditions. The data highlights significant growth in specific regions alongside persistent challenges in major urban centers. As the year unfolds, stakeholders in the housing market—policymakers, builders, and investors—will need to navigate these dynamics carefully to ensure future growth and stability.