Spring 2026 Housing Supply Report

Short‑term conditions relaxed but hide growing imbalances

Vancouver’s housing market looked more relaxed in 2025, but the eased conditions were shaped by timing rather than true balance. Weaker demand — linked to slower population growth and broader macroeconomic uncertainty — coincided with a large wave of supply entering the market. Completions reached a record high as several years of strong starts moved through the pipeline. This influx increased rental vacancies, slowed rent growth and contributed to weaker resale price increases.

At the same time, the resale market added to available stock. New listings increased as homeowners faced mortgage renewals at higher rates or adjusted their living arrangements. Meanwhile, resale activity fell to its lowest level in 2 decades. These factors combined to create softer near‑term conditions.

However, this short‑term surplus hides emerging imbalances. Current market conditions reflect past construction decisions, while the future pipeline continues to thin. Housing starts have declined for 2 years in a row. Recent project cancellations will reduce the number of units available several years from now, particularly in the condominium segment.

Because construction timelines span multiple years, this mismatch between the short- and long-term picture invites caution in interpreting today’s eased market signals as signs to slow down construction.

The viability of construction projects is increasingly under strain

Starts fell again in 2025, driven by weaker apartment activity. Rental starts declined in both absolute number and share of total construction, unlike trends in most major centres. Developers faced rising building costs, including higher labour, materials and regulatory expenses. At the same time, slower rent growth, higher vacancy rates and longer lease‑up periods reduced revenue expectations while raising viability thresholds for new rental projects.

Condominium apartment construction faced similar pressures. Presales remained subdued as investors and end‑users showed reduced interest in new units, which tend to be more expensive than existing ones. To preserve viability, many developers shifted farther from the downtown core in search of more affordable land.

Missing middle construction increased

Despite the broader decline in starts, missing middle construction strengthened. Ground‑oriented homes posted year‑over‑year gains, led by substantial growth in semi‑detached housing in Burnaby. Burnaby’s 2024 approval of laneway homes and secondary suites for semi‑detached dwellings contributed to this increase, helping diversify the region’s low‑rise housing stock.

Key trends in 2025:

• Rental construction drove new supply, pushing apartment construction to dominate overall housing activity across major markets. Rental starts hit record highs in Calgary, Edmonton, Ottawa, Halifax and Montréal, and reached their second‑highest level ever in Toronto.
• Ground-oriented construction weakened in several major markets, falling the most in Ottawa and Toronto.

These construction patterns point to where most progress was made in housing supply.

Housing system successes in rental and missing middle supply, completions and construction timelines

In 2025, rental construction drove overall new housing supply. The number of rental units under construction was almost twice the 10-year average. Increased rental supply resulted in meaningful increases in vacancy rates and generally slower rent growth. Our 2026 Housing Market Outlook forecasts further easing in the rental market over the next 3 years as these new units are completed and absorbed. 

Rental construction was strong across Canada. Most large CMAs recorded significant rental starts, reaching record highs in Calgary, Edmonton, Ottawa, Halifax and Montréal. Toronto also posted its second‑highest level of rental starts. Even in Vancouver, where rental starts declined slightly, activity remained high by historical standards. This surge in rental construction kept the number of apartments under construction elevated across most major centres.

At the same time, missing middle housing continues to expand its footprint in 2025. Missing middle housing is important because it adds quicker-to-build, lower‑cost homes in existing neighbourhoods. It also gives families more options when single‑detached houses are too expensive and units in high‑rise buildings are too small. This housing category is defined as accessory suites, multiplexes, row homes, stacked townhouses and low-rise apartments.

Total missing middle starts rose by about 10% across the 7 major CMAs in 2025, building on steady increases since 2018 in most large cities, except for Vancouver. This pattern points to a gradual shift towards more missing middle housing construction overall.

Calgary and Edmonton led this trend in 2025 with about 60% of all their new starts in this category, mostly rows and townhouses. Toronto followed, at roughly 40%. More than half of Toronto’s missing middle housing came from conversions. Conversions are an important source of faster, lower-cost additions to the housing supply by repurposing existing buildings. Lastly, duplex and triplex construction continues to anchor Montréal’s ground-oriented supply. 

Building times also improved in 2025. Despite the large volume of apartments underway, average building times edged down in several markets thanks to smaller project sizes, efficiency gains, slower cost growth and easing labour constraints. Calgary, Ottawa and Edmonton showed the strongest improvements. Calgary and Edmonton delivered the fastest apartment timelines in absolute terms.

These improvements were matched by strong completion levels, reflecting the high volume of starts in recent years. Vancouver reached a new record, led mainly by apartment completions. Calgary and Edmonton also posted record levels, supported by strong ground-oriented completions and stable apartment activity. Montréal saw a slight decline but overall completions stayed close to the long‑term average. Ottawa, Toronto and Halifax recorded modest softening in both ground-oriented and apartment completions, yet all remained historically strong.

New housing construction is vital to increase overall housing supply and ultimately, affordability. As new homes are completed, higher-income households tend to move into them, freeing up older homes for others. Our research shows this chain reaction over time, known as filtering, is a key way that new supply improves affordability across the entire housing system and all income groups over the long term.

Despite the gains seen this year, Canada’s housing system still faces pressures that threaten future supply and long‑term affordability.

Where Canada’s housing supply needs to improve

Condominium starts fell sharply across the country as presales collapsed, investors pulled back and costs stayed high. These conditions made it hard for developers to reach the presale thresholds needed for financing, putting future condominium supply at risk, especially in Toronto and Vancouver.

The slowdown coincides with double-digit increases of completed and unabsorbed inventory across CMAs, except Montréal. Vancouver recorded the highest unsold condominium inventory at completion, while Edmonton had the highest ground-oriented inventory. Toronto saw strong rises in unsold condominiums and row homes.

When completed units don’t sell, lenders restrict credit, and developers delay or cancel new projects because many rely on high presale thresholds to secure financing. This slows the pipeline of future housing supply. 

At the same time, construction is slowest where it’s most needed. Vancouver and Toronto continue to have the longest apartment construction timelines, reflecting project complexity and elevated costs.

Finally, family-sized ownership housing supply is vulnerable. Ground-oriented starts remained well below historical averages in Toronto, Montréal, Vancouver and Ottawa. In Toronto and Vancouver, many new starts are small apartments, including very small micro‑condos, which don’t meet the needs of larger families.

To understand these gaps, we need to examine underlying economic and demographic environment in 2025.

Housing supply adjustments to demand, demographics and costs

Housing starts, completions and listings in 2025 faced subdued demand, slower population growth and persistent cost pressures. Softer labour conditions, economic uncertainty and high price-to-income ratios kept many potential buyers cautious, increasing interest in more affordable unit types where available. Rising resale listings added competition for new homes, putting downward pressure on launch pricing and slowing absorption.

Moderating population growth reinforced these trends. Population growth slowed across major CMAs and turned negative in Toronto and Vancouver as immigration eased. This reduced some investor activity as softer rental markets and weaker expectations of near-term price gains made new condominium units less attractive. Developers will continue to respond by adjusting project timing, scale, and product mix to reflect more moderate population inflows.

Construction costs remained elevated but generally grew more slowly than in 2024. Montréal posted the fastest cost increases, with Ottawa also trending higher. Calgary and Edmonton saw cost growth ease but remain above inflation, while Toronto recorded the lowest growth. Elevated construction costs continue to dampen expansion of housing supply.

The path forward

Short-term imbalances emerged in some markets. Vancouver and Toronto saw more completed and unabsorbed condominiums, while Edmonton and Calgary faced some excess unabsorbed ground-oriented supply. These conditions aren’t unprecedented and often lead developers to adjust pricing, refine products, or temporarily hold or lease units until demand strengthens. The pipeline of future supply is threatened as some developers postpone or cancel projects.

At the same time, record levels of rental construction didn’t always occur in the regions with the lowest rental vacancy rates, highlighting how supply may not completely match local needs in the short term.

Looking ahead, national housing starts are expected to decline through 2026-2028 as developers face high costs, softer demand and elevated inventories. Some of this softer demand reflects suppressed households delaying forming new households because of affordability and housing suitability constraints. This group creates pent-up demand that will return as conditions improve. Supply imbalances seen in 2025 are expected to ease as the market absorbs new supply. As units age, they become relatively cheaper, supporting affordability over time.

2025 brought meaningful new housing supply, including increased rental construction, expansion of missing middle housing, and some moderation in construction cost growth that improved delivery timelines. However, structural challenges persist. Canada’s continued reliance on apartment development, combined with elevated construction costs, has limited the expansion of family-sized ownership housing. As a result, this segment continues to face structural supply shortages and ongoing affordability constraints, particularly in higher-cost centres.

Explore CMHC's Starts and Completions Survey methodology and datasets.

Record‑high starts driven by both rental and ownership construction

Housing starts climbed to a new record for the second consecutive year in 2025, driven by broad‑based multi‑unit development across the census metropolitan area (CMA). Apartment starts rose sharply in the South, Core, West and North sub‑markets as developers continued to view Edmonton as a market capable of absorbing future supply. Confidence in demand remained firm, supported by the region’s relative affordability and historically strong absorption rates.

A distinctive feature of Edmonton was that both the rental and ownership segments contributed to growth in starts. Rental starts rose with help from federal and municipal programs aimed at boosting supply. The municipal Affordable Housing Investment Program has supported both new construction and redevelopment, while targeted rezonings in “priority growth areas” allowed higher‑density housing along key corridors.

At the same time, condominium starts, which have fallen in Calgary, rose in 2025. Edmonton’s comparatively affordable ownership market sustained homebuyer demand, lowered viability thresholds and encouraged developers to move forward with new condominium projects.

Missing middle construction continued its upward trend

Medium‑density housing also expanded in 2025, accounting for 60% of all starts. This growth reflects Edmonton’s evolving supply mix. Historically shaped by single‑detached development, the region has increasingly shifted toward denser forms.

Favourable rezoning initiatives, downtown revitalization efforts and an ample supply of both greenfield and infill sites have supported the rise of missing middle formats. Both new medium‑density projects and conversions reached their highest levels, signalling strong developer alignment with the city’s long‑term land use direction.

Completions and new listings added significantly to available housing

Completions reached a record high in 2025 — the result of high start levels in recent years. With many units still progressing through the construction pipeline, completions are expected to remain strong in the near term. The resale market added further supply, as new listings increased considerably in 2025. Listings rose across most housing types, though impacts varied — condominium inventories moved above their historical averages, while single‑ and semi‑detached stocks remained below typical levels.

This unevenness means that, while overall supply expanded, some sub‑markets remained tighter than others. It also means that aggregated conditions may obscure shortages of suitable housing for certain households.

Housing starts hit another record high

Calgary recorded a fourth consecutive record high in housing starts in 2025. For the first time, Calgary surpassed Toronto, reflecting strong developer and investor expectations for long‑term demand. This was despite some softening in population growth.

Policy and financing incentives designed to accelerate multi‑unit construction continued to contribute significantly to this momentum. These incentives supported a surge in apartment development across the Calgary census metropolitan area (CMA). These increases were particularly notable in the Northwest, Southeast, Beltline and Downtown zones, where land availability, infrastructure and zoning frameworks remain favourable.

Rental and missing middle homes led construction

Rental housing was the dominant driver of new supply, supported by favourable financing conditions and policies aimed at expanding affordable housing options. Rental apartment starts were 75% higher than a year earlier and made up an increased share of total starts. This stood in contrast to condominium apartment starts, which fell by 11%, as they were less attractive to build.

Rental construction was strong across building types, promising a more varied mix of future supply compared to other centres, where new construction is more concentrated. This diversity will give more options to households, particularly those seeking larger and more affordable homes.

Calgary also continued to lead the country in missing middle housing. Two thirds of all housing starts fell into medium‑density formats. Developers prioritized these dwelling types, especially in the Southeast and Northwest, and were supported by favourable rezoning, conversion policies, sustained interprovincial migration and lots of developable land.

Capacity pressures are emerging

Although starts remained high, completions didn’t keep pace in 2025. The widening gap between the two resulted in a growing number of units under construction and signaled emerging capacity pressures. Developers increasingly reported constraints related to construction labour. With starts remaining high, these pressures are likely to intensify, lengthening construction timelines and adding risk to future project delivery.

Market shows short‑term surplus and long‑term supply risks

Toronto’s short- and long-term housing markets look different. In the short term, conditions appear more relaxed: higher vacancy rates, slowing rent growth and declining home prices. In this period, there has been increased supply and weakened demand. A high rate of home completions and record levels of resale market listings have increased supply. Economic uncertainty and slower population growth have constrained demand.

However, beneath these conditions, long‑term risks are building. Housing starts declined again in 2025 and are now at their lowest level since 2009 — below Calgary, Montréal and Vancouver for the first time. With projects taking years to move from inception to occupancy, the current downturn in starts signals future supply shortages once demand strengthens. Record condominium project cancellations will remove thousands of units that would otherwise have been delivered in coming years.

This combination — surpluses today, tighter markets in the future — is the difference underpinning Toronto’s housing supply between the short and long term.

Differences in market segments pose another challenge in reconciling the short- and long-term markets. There were greater surpluses in new and smaller condominium apartments than in family-sized homes. Larger and more expensive homes showed greater surpluses than more affordable ones.

Developers shifted toward rental and smaller projects

The starts data shows a shift in builder preferences toward rental and smaller projects. Financing challenges and a desire to reduce exposure to economic uncertainty encouraged developers to shift toward smaller projects. Small projects required lower financial commitment and were quicker to deliver, reducing vulnerabilities to changes in the economy. In 2025, developments with 3 to 5 units outnumbered those with more than 100 units for the first time on record.

Purpose-built rental starts were the second highest since 1990 and exceeded condominium apartment starts in the City of Toronto for the first time. Incentives for missing middle housing, combined with relatively favourable financing and long‑term rental demand, supported purpose-built rental construction.

Short‑term conditions look relaxed, but future supply is set to tighten

Ottawa’s 2025 market conditions appeared relaxed. Strong rental completions added new homes to the market, while resale listings climbed to their highest level since 2020. Completions reflected strong rental starts from earlier years, and new listings increased as some sellers chose to take advantage of recent house price gains. These factors expanded the available housing stock at a time when demand was softened by macroeconomic uncertainty. Rising vacancies and slower rent growth reflected this cooling environment.

However, there is an underlying shift. The high level of completions reflected construction decisions made several years ago — many under far more favourable financing conditions.

As these projects are realized, Ottawa’s future supply will be more influenced by recent starts, which are beginning to trend lower in response to rising costs, tighter viability thresholds and broader economic headwinds.

Over time, this decline in project initiations will translate into fewer completions, tightening supply just as demand strengthens with improving economic conditions.

Near‑record starts driven by rental construction

In 2025, total housing starts climbed above 10,000 units. This surge was driven by rental units, which accounted for most new construction.

Developers continued to move forward with projects planned when interest rates were lower, and many took advantage of government products designed to support purpose‑built rental housing.

Transit‑oriented development associated with the expansion of the O‑Train network also helped draw new projects forward — particularly higher‑density buildings along key transit corridors. Limited availability of land for single‑detached homes reinforced the shift toward multi‑unit rental formats.

Despite the high overall starts level, condominium apartment starts continued their multi‑year decline. Condominiums made up nearly a third of starts in 2023. This share then fell to around 10% by 2025. High inventories on the resale condominium market, combined with weaker demand, reduced the viability of new ownership projects, while favourable financing for rentals pulled activity toward the rental sector.

Medium‑density construction remained historically strong

The missing middle category stood out in Ottawa’s supply in 2025. Medium‑density starts grew to about 45% of all new housing construction. Both new projects and conversions reached their highest levels, continuing Ottawa’s long-standing role as a major producer of this type of housing.

Recent municipal measures to promote densification and expand the stock of affordable family‑oriented homes further boosted activity. While the city has traditionally delivered strong supply in these formats, policy direction and affordability pressures have pushed missing middle construction even higher.

Relaxed market conditions don’t show potential market imbalances

Market conditions in Montréal appear relaxed in the short term. Slower population growth and macroeconomic uncertainty have weakened demand, while high levels of home completions have increased supply. This has led to rising rental vacancy rates.

However, these conditions will not persist, and imbalances will potentially emerge. Most of the completions arriving on the market are the result of projects initiated several years ago, when housing demand expectations were higher. The expected slowdown in housing starts will lead to lower completions over the medium to long term. Yet, demand should increase as macroeconomic uncertainty recedes. Today’s conditions therefore overstate an abundance of supply.

Rentals increasingly dominate housing construction

Rental construction drove the increase in total housing starts in 2025, with rentals accounting for more than 80% of all starts. Growth was strongest in Laval and on the North Shore and South Shore. In these areas, lower land costs and greater land availability supported the viability of projects at a time of rising construction costs across the Montréal census metropolitan area (CMA).

Much of this increase reflected purpose‑built rental projects that had been in development for several years. These projects progressed to housing starts despite moderating rental demand. They also benefited from not requiring presales to secure financing and policy support aimed at expanding rental and affordable housing options.

In contrast, condominium apartment starts remained at historic lows. Weak investor activity, economic uncertainty and a substantial price gap between new and resale units reduced the feasibility of new condominium projects. These opposing rental and condominium apartment trends highlighted a widening tenure difference in Montréal’s construction landscape.

Missing middle takes various forms across the CMA

Missing middle housing accounted for one third of total housing starts and is evolving differently across the CMA. Low-rise apartments grew on the North and South shores, where gentle densification has been increasing due to supportive policy and available space. Conversions were concentrated on the Island of Montréal, where land scarcity and higher prices made redevelopments more attractive. 

Short‑term conditions appear relaxed, but capacity pressures signal future constraints

Market conditions in 2025 appeared eased. More listings and a high rate of completions increased supply, while demand softened. Some owners listed to capitalize on recent price gains, while older households downsized to rental or condominium options as part of their retirement planning.

However, these relaxed conditions mask future supply constraints. The number of homes under construction reached a record high, with many builders operating near full capacity. Market intelligence pointed to project delays and postponements linked to shortages of skilled labour and competition for specialized trades.

As economic uncertainty fades and demand improves, these capacity constraints will limit how many projects can move forward. Future supply will increasingly depend on what the industry can deliver, rather than what it would like to deliver.

Rental projects drive record‑high construction

Housing starts rose to a new peak in 2025, driven primarily by rental construction. More than three quarters of all starts were rental units. Developers made use of supportive financing programs aimed at increasing supply, following years of strong population growth and low vacancy rates.

Limited availability of land for single‑detached homes concentrated activity in higher‑density formats, reinforcing the shift toward rental projects with larger unit counts. This strong rental pipeline reflects both a favourable policy environment and the realities of land economics across the region.

Medium‑density construction remained historically strong

While rental construction dominated overall activity, medium‑density housing continued to play a significant role in shaping future supply. Missing middle starts dipped slightly from the previous year but still reached their second‑highest level on record. The decline in new builds was offset by an increase in conversions, supported by policies promoting gentle densification and infill development near urban areas. Beyond these zones, builders focused more on high‑density rental projects.