Ownership supply under pressure as rentals dominate new construction

Ottawa, March 11, 2026

Canada’s housing starts made meaningful annual gains in 2025 (+6%), driven by record rental apartment construction and increased missing middle housing, such as low-rise apartments, multiplexes, row homes, stacked townhouses, and accessory suites. Despite this positive headline number, major vulnerabilities lie underneath this progress. This according to the latest Housing Supply Report (HSR) released by Canada Mortgage and Housing Corporation (CMHC).

Despite a year-over-year increase in housing starts in 2025, the construction of housing for the homeownership market weakened overall. Condominium presales have collapsed and rising unsold inventories suggest today’s supply may not align well with the needs of prospective homebuyers. Meanwhile, softer buyer demand and tighter financial conditions for homebuilders are leading to project delays, cancellations, or conversion to rentals, threatening the future pipeline of homeownership options, when economic conditions improve and the market picks up again. This is particularly true for Vancouver and Toronto.

Overall, the resiliency of Canada’s homebuilding industry in 2025 was driven by record high rental construction in Calgary, Edmonton, Ottawa, Halifax and Montréal, as well as the second highest ever level of rental construction in Toronto. Also, total missing middle starts rose by about ten percent in 2025 across the seven major Census Metropolitan Areas (CMAs) covered in the HSR.

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“On the surface, housing starts last year were quite strong, outpacing annual starts in2024 and led by historic levels of rental starts and completions. This new supply has contributed to the easing of rental market conditions in many of Canada’s major centres,” said Tania Bourassa-Ochoa, Deputy Chief Economist for the Canada Mortgage and Housing Corporation. “However, homeownership supply, particularly in the condominium segment, continues to face significant challenges in the face of falling presales. This threatens both the availability and affordability of ownership options for Canadians in the medium-term. Since construction timelines can span years, a slowdown in starts today sets the stage for future supply constraints.”

Census Metropolitan Areas (CMAs):

Toronto: For the first time this century, rental starts exceeded condo starts in City of Toronto, reflecting a trend across the Toronto CMA. As the region’s homebuilders shifted away from larger, riskier ownership-based projects, the construction of buildings with three to five units was more prevalent than projects with more than 100 units. Overall, 2025 housing starts fell significantly compared to recent years, but completions remained elevated. This has relaxed market conditions in the near term but could lead to a sharper supply gap and a tighter market in the long term.

Vancouver: Vancouver’s housing market eased in 2025 as weakened demand from slower population growth coincided with record completions after years of strong housing starts. However, the viability of new projects was increasingly under strain in 2025, with land scarcity and high costs slowing rental construction and weak pre-construction sales weighing on the condominium market. A bright spot is the growing and newfound strength of missing middle construction, which is benefitting from densification policies.

Montreal: Rental construction continues to dominate housing construction in Montréal, reaching record levels and accounting for over 80% of 2025 starts, while condo starts have fallen to a record low. Current conditions reflect an abundance of supply amid weaker demand, but with housing starts expected to decline in the coming years, lower completions and demand recovering down the road will put further pressures on affordability across the market.

Calgary: New home construction reached another record high in 2025, with Calgary surpassing both Toronto and Vancouver in actual housing starts. Rental and missing middle construction led growth, supported by favourable financing and zoning reforms, but labour and building capacity pressures are becoming more persistent. These constraints are lengthening construction timelines and creating risk for future supply.

Edmonton: Housing starts hit another record high, supported by government incentives, rezoning, and relative affordability. As a result, Edmonton saw strong growth in both rental and ownership starts, including condominium starts, unlike many other large markets. Missing middle housing continued to expand with a shift towards more housing density, while historically high completions and an increase in resale listings increased overall market inventory.

Ottawa: Rental units dominated construction and raised total housing starts to near-record levels, supported by incentives for transit‑oriented development. Medium-density and missing middle housing, including conversions, also supported stronger starts, reaching new highs in 2025. However, these results reflect investment decisions made several years ago under more favourable financing conditions, with recent starts trending lower. As a result, we expect supply to tighten over time as demand also recovers with improving economic conditions.

Halifax: Strong completions and higher resale listings combined with softer demand made housing market conditions more balanced in 2025. Construction is focused on rentals, with missing middle and developments around urban transit hubs remaining high. However, with many builders operating near full capacity, market intelligence points to more project delays and postponements due to shortages of skilled labour, threatening the momentum for future supply.

Read the complete Housing Supply Report (HSR).

Watch CMHC's podcast discussing the latest HSR.

Information on this news release:

CMHC Media Relations
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