Toronto, Vancouver weigh on housing starts in first half of year: CMHC

Canada Mortgage and Housing Corp. says growth in overall housing starts was flat during the first half of the year compared with 2024, though there were significant regional differences.

The agency says cities like Calgary, Edmonton, Montréal, Ottawa and Halifax built homes at paces that were either at or near records or in line with historical averages in the first half of the year, led by the construction of rental apartments. 

However, slowdowns in Canada’s two most expensive real estate markets weighed on the overall number of starts. 

Vancouver saw a decline in housing starts during the first half of the year compared with 2024, while Toronto was on pace for the lowest total annual housing starts in 30 years.

“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing construction slowdown in the home ownership market poses risks to future housing supply, workforce retention, and affordability,” Tania Bourassa-Ochoa, CMHC’s deputy chief economist, said in a press release. 

CMHC says homebuilding activity in Toronto fell to its lowest point since 1996 on a per-capita basis, mainly due to a 60 per cent drop in condominium starts. The decline came amid weaker investor demand for condos during the first half of the year, leaving projects less feasible and more prone to cancellations or delays.

The agency said builders want to see construction costs and development charges lowered to “ease condominium prices and improve project viability.” 

In Vancouver, condo starts fell 13.4 per cent during the first half of the year, with weak pre-construction sales resulting in paused and cancelled projects. CMHC says development charges were a significant barrier to homebuilding in the city, but it noted new provincial regulations are set to take effect next year, allowing for the deferral of about two-thirds of development charges until occupancy.  

Outside of Canada’s two largest real estate markets, CMHC highlighted a surge in purpose-built rentals, fuelled by government support and incentives. The agency said purpose-built rental units account for a growing share of total apartment construction. 

New home construction in Calgary reached a record because builders feel good about the region’s growth trajectory, according to CMHC. 

Rental construction continued to surge in the city, driven by strong population growth, favourable zoning and financing programs. The agency said updated municipal zoning that supports construction of laneway housing, secondary suites and more, facilitated greater density in the city.

In Edmonton, CMHC said housing starts benefited from higher levels of construction for both apartments and single-detached units.

Despite some of the positives in certain regions, Bourassa-Ochoa noted the report overall still reflects that confidence in the residential construction industry is being impacted by development charges and a lengthy approval process. 

“Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply,” she said.  

Amid economic uncertainty, trade tensions and lowered immigration targets, the report said it expects housing starts across larger metropolitan areas to face a gradual recovery, with only modest improvements by 2027. 

This report by The Canadian Press was first published Sept. 9, 2025.