Housing starts momentum to slow as economic uncertainty weighs on demand

Ottawa, February 10, 2026

Canada’s homebuilders will continue to face headwinds from higher costs, weaker demand and more unsold homes, particularly in the condominium market, as new home construction is set to decline through 2028. Geopolitical and trade uncertainty and slow population growth will continue to weigh on housing demand, but with pronounced regional differences across the country. This according to the latest Housing Market Outlook (HMO) released by Canada Mortgage and Housing Corporation (CMHC).

At the national level, housing demand is expected to remain low, with sales staying below historical averages and prices showing modest gains after falling in 2025. Elevated rental construction will continue to drive new supply but will moderate over the forecast period. However, regional housing markets vary significantly. Construction and home sales in Ontario and British Columbia will be weaker than their 10-year averages, while remaining above historical averages in the Prairies and Quebec.

CMHC’s annual HMO provides overviews and forecasts for Canada overall, and 18 major housing markets.

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“We expect Canada’s economy to grow slowly in 2026, as many households and businesses remain cautious because of geopolitical and trade uncertainty. This caution is leading many households to delay buying homes and making builders more hesitant to start new projects,” said Kevin Hughes, CMHC Deputy Chief Economist. “These pressures will affect housing markets differently across the country. Stronger local conditions may help support housing market activity in Montreal and Calgary for example, while weaker conditions could further slow housing demand and construction in Toronto and Vancouver.”

Large Census Metropolitan Areas (CMAs):

Toronto: New housing starts are projected to remain low in 2026 as condominium starts continue to slow. The decline will be partly offset by strong rental starts. However, higher vacancy rates and lower rent growth will pose a challenge for future rental supply. Sales activity is expected to increase in 2026 but will remain below historical averages.

Vancouver: Housing starts are expected to continue trending down as high construction costs and weakening demand weigh on new project activity, especially for condominiums. As rental units started over the past four years are completed and enter the market, the vacancy rate in Vancouver will remain elevated, putting downward pressure on rent growth and future rental construction.

Montreal: Following record growth in 2025, the number of housing starts should remain high in 2026. Rental housing will continue to drive residential construction and a strong increase in the supply of new units will push the rental vacancy rate up.

Calgary: New home construction in Calgary is predicted to moderate after a period of rapid expansion, with housing starts expected to decline from record highs in recent years. As more new rental units enter the market, vacancy rates are expected to rise, slowing rent growth.

Edmonton: Housing starts in Edmonton will decline moderately as inventories remain high, population growth slows, and markets return to more balanced conditions. As new rental supply enters the market, the city will see vacancy rates pushed higher, moderating rent growth.

Ottawa: The pace of housing starts will slow in 2026, after reaching a historically high level in 2025. The rental market will continue to soften, with a decrease in demand as fewer international students and workers move to the region.

Halifax: Housing starts are expected to trend down from recent historic highs as the Halifax market shifts from rapid, population‑driven growth to more moderate conditions amid slower migration and easing construction activity. Despite easing demographic demand pressures, CMHC forecasts the strong labour market in Halifax to support modest increases in home sales and prices.

CMHC’s 2026 Housing Market Outlook (HMO) also provides an updated forecast for the following CMAs: Victoria, Regina, Saskatoon, Winnipeg, Hamilton, Kitchener – Cambridge – Waterloo, Windsor, St. Catherines – Niagara, London, Gatineau, and Québec.

Read the full report on the CMHC website.

Watch CMHC's podcast discussing the latest HMO.