Toronto and Vancouver Impact Housing Starts in First Half of the Year: CMHC
The latest report from the Canada Mortgage and Housing Corporation (CMHC) reveals a nuanced landscape for the country’s housing sector. Despite overall housing starts remaining flat compared to 2024, significant regional disparities are evident, particularly in major urban centers. Notably, cities like Calgary, Edmonton, Montréal, Ottawa, and Halifax demonstrate robust activity, attributed mainly to a surge in rental apartment construction. In contrast, Canada’s most expensive markets, Toronto and Vancouver, are grappling with significant declines that are influencing nationwide trends.
In Toronto, the decline in housing starts is particularly stark, marking the lowest per-capita construction levels since 1996, driven by a staggering 60% drop in condominium initiations. Weaker investor demand has rendered many condo projects financially unviable, leading to increased cancellations and delays. Similarly, Vancouver has witnessed a 13.4% decline in condo starts, with sluggish pre-construction sales prompting paused projects. CMHC identifies prohibitive development charges as a key barrier in both cities, emphasizing the necessity for reduced costs to improve project feasibility.
However, the report also highlights the positive momentum outside these metropolitan pressures. Cities like Calgary are experiencing a record in new home constructions, buoyed by favorable population growth, supportive zoning regulations, and enhanced financing programs. The updated municipal zoning in Calgary has allowed for greater density through laneway housing and secondary suites, facilitating the surge in rental construction.
CMHC’s deputy chief economist, Tania Bourassa-Ochoa, cautions that while the rise in rental units is a positive indicator, the ongoing slowdown in ownership markets poses risks for future housing supply and affordability. The protracted approval processes and elevated development charges remain systemic challenges, stifling confidence within the residential construction industry. Antibiotic systemic changes are asserted as essential to fostering a more cost-effective and predictable housing environment.
Looking ahead, with economic uncertainties and evolving immigration policies, CMHC forecasts a gradual recovery in housing starts in larger metropolitan areas, projecting only modest improvements by 2027. This outlook underscores the intricate interplay between market dynamics, regulatory environments, and investment sentiment in shaping Canada’s housing future. For construction professionals, the current trends signal a pivotal moment, where adapting to regional discrepancies and leveraging government incentives for rental development could be key to navigating the challenging landscape ahead.
📋 Article Summary
- Overall housing starts in Canada were flat in the first half of 2025 compared to 2024, with notable regional disparities in construction activity.
- Cities like Calgary, Edmonton, and Montréal experienced significant growth in housing starts, primarily due to increased rental apartment construction, while Toronto and Vancouver saw declines.
- The slowdown in the home ownership market poses risks to future housing supply and affordability, exacerbated by rising development charges and lengthy approval processes.
- Despite regional challenges, purpose-built rentals are on the rise outside major cities, supported by government incentives and updated zoning regulations.
🏗️ Impact for Construction Professionals
The recent report from Canada Mortgage and Housing Corp. highlights both challenges and opportunities for construction professionals. With rental construction surging in cities like Calgary and Edmonton, contractors should pivot towards building rental units, leveraging government incentives to bolster project financing and viability. This sector shows promise in meeting growing demand amid a slowdown in ownership markets.
However, owners and project managers must address challenges from increasing development charges and lengthy approval processes that can hinder project timelines. Streamlining internal operations to expedite approvals, reducing costs, and focusing on efficient project management will be crucial.
To capitalize on shifting dynamics, consider diversifying portfolios by investing in purpose-built rentals and adapting to the updated municipal zoning laws that support greater density in urban areas. Engage directly with local governments to advocate for regulatory changes, which could ease development barriers.
Ultimately, professionals need to be agile, responding to market demands while proactively addressing potential risks. Strategic planning should include assessing long-term regional growth trends, ensuring resilience in an evolving housing landscape.
#Toronto #Vancouver #weigh #housing #starts #year #CMHC
