Analyzing Canada’s Housing Market: A Mixed Bag of Trends in 2025
The real estate landscape in Canada during the first half of 2025 has emphasized a story of dualities—steady growth and pronounced regional disparities. According to the Canada Mortgage and Housing Corporation (CMHC), overall housing starts saw little change compared to the same period in 2024, yet certain urban centers surged while others languished under various pressures.
Flat National Growth Amidst Troubling Trends
CMHC’s latest report highlights that Canada’s overall housing starts were stagnant, a situation deeply influenced by contrasting performances in major cities. Notably, the agency has drawn attention to the notable regional differences that could shape the future of Canada’s housing landscape. While the national figures paint a muddy picture, tracking specific metropolitan areas unveils a narrative rich in complexity.
Regional Leaders: Strong Performance in Major Cities
Cities like Calgary, Edmonton, Montréal, Ottawa, and Halifax led the charge with robust home construction, either reaching record levels or aligning closely with historical averages. A significant portion of this growth was attributed to the construction of rental apartments, underscoring a growing acknowledgment of the need for affordable rental housing amid rising homeownership costs. Calgary, in particular, has emerged as a model for growth, as builders express confidence in the city’s economic trajectory.
Edmonton also experienced a boost in housing starts, benefiting from higher construction levels in both apartments and single-detached units. The recent uptick in population growth, alongside favorable zoning and financing programs, has bolstered these regions, leading to a more vibrant housing market.
The Weight of Major Markets: Vancouver and Toronto Struggling
Conversely, the slower pace of construction in Canada’s two priciest real estate markets—Toronto and Vancouver—has considerably affected the overall housing starts metrics. In Toronto, housing starts have reached their lowest levels in three decades, largely driven by a staggering 60% drop in condominium developments. This downturn is linked to a reduction in investor demand for condos, making future projects less feasible and leaving them susceptible to delays or cancellations.
Vancouver mirrored these troubling trends, recording a 13.4% dip in condo starts during the same timeframe. Weak pre-construction sales in the city have led to several paused or canceled projects, raising alarms about future housing availability in one of Canada’s most desirable locations. Development charges have been cited as a significant barrier, though changes to provincial regulations set for next year may ease some of this financial burden for builders.
Encouraging Signs in Rental Construction
Despite challenges in homeownership, the report sheds light on a burgeoning demand for rental properties across Canada. The rise in purpose-built rental units indicates a shift in construction priorities supported by government incentives and policy adjustments. CMHC noted that purpose-built rentals now comprise a more significant share of total apartment construction, highlighting a response to the ongoing housing affordability crisis.
The Road Ahead: Systemic Challenges and Optimism
While certain regions are seeing growth, CMHC Deputy Chief Economist Tania Bourassa-Ochoa emphasized that systemic changes are essential to streamline the residential construction process. The ongoing issues surrounding development charges and lengthy approval timelines continue to undermine confidence within the sector. She advocates for a clearer framework that could enhance cost and time certainty for developers, ultimately supporting a broader increase in housing supply.
The report acknowledges a backdrop of economic uncertainty, trade tensions, and lower immigration targets, creating a cautious outlook for future housing starts in major metropolitan areas. CMHC anticipates a gradual recovery with only modest improvements expected by 2027, leaving industry stakeholders and potential homeowners alike holding their breath for more favorable conditions.
Conclusion: A Complex Landscape
The Canadian housing market in 2025 paints a complex portrait characterized by regional strengths and weaknesses. While cities like Calgary and Edmonton enjoy robust construction activity, Toronto and Vancouver grapple with significant hurdles affecting homeownership projects. The increasing focus on rental construction offers a glimmer of optimism, suggesting a potential shift that could address the pressing concerns around housing affordability. However, meaningful systemic changes will be crucial to foster a consistent and reliable housing supply in the years to come.
