Slowdown in Toronto, Vancouver leave national housing starts flat in first half of 2025

Ottawa, September 9, 2025

Growth in total housing starts across seven of Canada’s key Census Metropolitan Areas (CMAs) was flat in the first half of 2025 compared to 2024, with the six-month numbers showing sharp regional differences. This according to the latest Housing Supply Report (HSR) from Canada Mortgage and Housing Corporation (CMHC).

Calgary, Edmonton, Montréal, Ottawa and Halifax built new homes at record or near-record pace, or in line with historical averages in the first half of 2025, with a much different picture in Canada’s two most expensive housing markets. Vancouver is seeing a slowdown in housing construction compared to 2024 and Toronto is on pace for its lowest annual housing starts total in 30 years.

A surge in purpose-built rental starts across most of the CMAs covered in the HSR, bolstered by government support and incentives, was offset by the large drop in condominium apartment starts, particularly in Toronto, Vancouver and Montreal.

Read the complete Housing Supply Report (HSR).

Quote:

“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing construction slowdown in the homeownership market poses risks to future housing supply, workforce retention, and affordability,” said Tania Bourassa-Ochoa, Deputy Chief Economist for CMHC. “The Canadian Home Builders' Housing Market Index for Q2 2025 reflects industry confidence and shows developers are frequently burdened by high development charges and time-consuming approval processes. Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply.”

Census Metropolitan Areas (CMAs):

On a per capita basis, Toronto’s homebuilding activity fell to its lowest point since 1996, driven mainly by a 60% drop in condominium starts. A pullback in investor demand during the first half of 2025 reduced project feasibility, leading to cancellations, delays, and a sharp drop in construction. Many in the building community suggest construction costs and development charges must be reduced to ease condominium prices and improve project viability. Rental apartment starts fared better than condos but still fell 8% compared to 2024. In the long-term, the slowdown in construction of all housing types could put further pressure on affordability when economic conditions improve and demand ramps up again.
Condominium starts in Vancouver fell 13.4% in the first half of 2025. Weak pre-construction sales led to the cancellation and pausing of projects that failed to meet the necessary 70% threshold for financing. Rental apartments are making up a larger proportion of overall housing starts as developers take advantage of rental financing programs. Development charges are a major barrier to homebuilding in Vancouver. Beginning January 1, 2026, new provincial regulations will allow homebuilders to defer up to 75% of development charges until occupancy. There are an estimated 100,000 approved homes in the region currently stalled due to difficulties attributable to development charges.
In Montreal, housing starts increased in the first half of 2025 supported by robust rental apartment construction. This growth was tempered by a slowdown in the condominium market, with units under construction at the lowest level in 15 years. Newly built condo units are too expensive for many buyers, causing developers to move away from this housing type. As outlined in CMHC’s Housing shortages in Canada, homeownership affordability has deteriorated in Montreal since the pandemic and a significant increase in new units aligned with local incomes is needed to counter this trend.
New home construction is at record pace in Calgary for 2025 due to positive builder sentiment on the long-term growth of the region. Rental construction continues to surge, driven by strong population growth in Alberta, favourable zoning, and financing programs. Updated municipal zoning is also supporting laneway housing, secondary suites, and row housing, facilitating greater density. Calgary recently approved ten office-to-residential conversion projects, supported by municipal funding and the Housing Accelerator Fund, with the potential to add an additional 1,100 homes to the downtown.
Increases in both apartment and single-detached construction led to robust housing starts growth in Edmonton. New municipal policies supporting more housing supply and downtown growth appear to be working. Inventory in the resale market has remained flat despite the high level of recently completed units, especially in the most affordable price ranges, due to continued strong demand and the CMA’s overall affordability. However, the slowing pace of apartment completions could signal development is being restricted by a shortage of skilled labour needed to maintain strong growth in residential construction.
In Ottawa, housing starts nearly doubled in the first half of 2025, supported primarily by rental construction. This surge in new rental homes, combined with a slowdown in population growth means more supply for renters in the near and long term. Sales of new homes in Ottawa have been sluggish so far in 2025, particularly condominiums, with the number of new and active resale listings well above historical norms.
New home construction remained at historically high levels in Halifax, driven mainly by the rental market. As of June, more than 10,000 rental units were under construction in the region, significantly above the 10-year average. Despite this significant growth, rental construction still faces obstacles. Halifax developers highlighted cases where obtaining the initial approval permits for projects took longer than building the actual housing, which is a significant drag on housing supply.

Information on this news release:

CMHC plays a critical role as a national convenor to promote stability and sustainability in Canada’s housing finance system. CMHC’s mortgage insurance products support access to home ownership and the creation and maintenance of rental supply. CMHC research and data help inform housing policy. By facilitating co-operation between all levels of government, private and non-profit sectors, CMHC contributes to advancing housing affordability, equity, and climate compatibility. CMHC actively supports the Government of Canada in delivering on its commitment to make housing more affordable.

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