00:00:00:00

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[Visual: In a studio, Mireille Thériault sits in an armchair next to a microphone on a stand. She has very long, straight brown hair and wears a red dress.]

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Can you walk us through what you saw in the first half of 2025?

00:00:04:00

[Visual: In the studio, Tania Bourassa-Ochoa sits in an armchair next to a microphone on a stand. She has long, straight blonde hair and wears a light blue suit.]

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

So we're actually seeing this shift from condominium construction to purpose-built rentals.

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[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

How does our outlook vary from region to region?

00:00:14:00

[Visual: Mireille and Tania sit in the armchairs facing each other. The perspective shifts between close-ups of Mireille and Tania individually and a side view of the 2 of them.]

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

In Halifax, Toronto and Vancouver, we've recorded a decline in housing starts. Actually, when we're looking at housing starts per capita in Toronto, we're reaching levels that we hadn't seen since 1996.

00:00:29:00

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[Speaker: Joelle Hamilton, Communications & Marketing, CMHC]

You're listening to In-House, Canada's housing podcast, where we share the latest on Canada's housing market.

00:00:39:00

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00:00:47:00

[Visual: Mireille sits in the studio. A box that reads, "Mireille Thériault, Specialist, Communications, CMHC" appears briefly.]

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Hi everyone, and welcome back to In-House. I'm your guest host, Mireille Thériault. Today we're talking about housing supply in Canada's 7 key markets: Vancouver, Edmonton, Calgary, Toronto, Ottawa, Montréal and Halifax. When we look at the total housing starts across those cities for the first half of 2025, they're just a few units below 2024 levels and near all-time highs. But what do we uncover when we dig a little deeper? To help answer that question, I'm joined by Tania Bourassa-Ochoa, one of CMHC's Deputy Chief Economists.

00:01:21:00

[Visual: Tania sits across from Mireille in the studio.]

Welcome, Tania. Thanks for joining us for another episode.

00:01:28:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

Thanks, Mireille.

00:01:29:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

How about you start us off by walking us through the key findings from the 2025 Housing Supply Report?

00:01:35

[Visual: A text box that reads "Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC" appears briefly.]

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

Yes, sure. So, first of all, when we look at housing starts for the first half of 2025 and for the 7 key CMAs, we're seeing overall stable levels… a little bit lower than 2024, but that does mean that we're still near all-time highs. But that overall stability is a little bit misleading, because once you start digging into the regional data, we're seeing very important differences. In some regions, we're seeing a very significant slowdown in construction. And that is not just a short-term issue, it does pose a real long-term risk for housing supply down the road, for affordability down the road, but also for maintaining or retaining skilled workers in the construction industry. On the other side of supply, which is the existing supply, so active listings, new listings, we're also seeing a mixed trend. In some regions, like Edmonton and Montréal, we're seeing that, you know, active listings are pretty much stable. But in other regions like Toronto, Vancouver, Calgary, Halifax or Ottawa, we're seeing active listings increase. Inventory is piling up a bit, not at the same levels in those regions, but yet a little bit more supply. So combined with, you know, housing starts on the rise for some of these markets, it has contributed to more supply in these markets after all. But we're not out of the woods yet, you know, with the trade tensions that are currently undergoing, with all of the uncertainty in terms of the economic context, but also in terms of the slowdown in demographics, it is pushing down our outlook for the next few years.

00:03:39:00

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So we are expecting to see housing start progress slightly as of next year and in 2027, but that growth will be relatively modest.

00:03:48:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Like you mentioned, the Housing Supply Report shows there are major differences between some of the key markets. Can you dive a bit deeper into that for us?

00:03:55:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

So there are 4 CMAs that ranked in the top 4. That would be Montréal, Ottawa, Calgary, and Edmonton. So for the first half of the year, we're already recording an increase in housing starts. And that activity is really driven by purpose-built rentals. In the Prairies, however, so in Calgary and Edmonton, we are also seeing an increase in ground-oriented homes, so single-family homes, semi-detached and row houses. And so, basically, because of the lower homeownership costs there and because they are more affordable in comparison, it is helping to support the construction activity of these types of homes. So, it's important to adjust housing starts for population, especially when you want to compare regions, or you even want to look at a region over time. And when we do that, Calgary is definitely standing out and is really ranking, by far, number one for housing starts per 10,000 inhabitants. Montréal as well, it has been recording some improvement. It's not necessarily in the top rankers when you're looking at housing starts per capita, but it's — Montréal is still improving.

00:05:20:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

What about some of the higher-cost cities, like Vancouver and Toronto, where affordability still remains strained and some homebuyers are cautious?

00:05:29:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

Yes, so in Halifax, Toronto and Vancouver, we've recorded a decline in housing starts for the first half of the year. In Halifax, actually, recent numbers have tilted the housing starts increase upwards. So we're seeing Halifax with higher construction activity in 2025. But Toronto and Vancouver are still very much recording a housing starts decline. Toronto, by far, amongst the 7 key CMAs, is recording a strong decline, mainly in the multi-unit segment, mainly in the condo segment. So both end users and investor demand has come down significantly and is impacting the activity that we're seeing right now. Actually, when we're looking at housing starts per capita in Toronto, we're reaching levels that we hadn't seen since 1996.

00:06:30:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Ground-oriented construction, which includes single-family, semi-detached and row homes, did see a modest rebound in the first half of 2025. What can you tell us about that?

00:06:41:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

Yes. So, it was a modest increase, approximately 5%. That said, it is a positive sign, we believe. So, you know, in the context of this economic uncertainty. For some of the most affordable markets, the fact that mortgage rates were a little bit lower has helped to unlock some of that demand for this type of housing. Of course, mortgage rates are not at the levels of 2020, 2021 (the pandemic times). So, in these more affordable markets like Montréal, Calgary and Edmonton, we did see an increase in activity. For regions like Ottawa and Vancouver, we saw steady levels of construction for ground-oriented homes, but in Halifax and in Toronto, we're seeing a decline in that type of construction.

00:07:35:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

So in those markets where we're seeing a decline, what else can you tell us about the dip?

00:07:39:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

In Toronto, for example, one of the reasons why we're seeing such an important decline is weak move-up activity. What I mean by that is that some sellers of existing homes, condos or smaller single-family homes, are having difficulty selling their property because there aren’t a lot of first-time homebuyers, for example, that are able to afford some of these homes. For some of the first-time homebuyers that would be in a position to purchase a home, a lot of them are being a little bit more cautious because of all of this economic uncertainty, because of the high levels of homeownership. So there's a lot of different factors that are kind of keeping buyers on the sidelines, and it's really limiting that potential of some existing homebuyers to move up. So Halifax is facing its own specific set of challenges. So when you're looking at ground-oriented home construction, there has been a lot of delays and a lot of additional costs that are rendering a lot of these projects unviable. So it is a risk. It's really a risk for housing, new housing, in the long term in these regions. And then there's the case of Montréal, where we did see a slight increase, yes, but that is not to say that Montréal isn’t facing some structural issues. And so there is a potential for a stronger rebound that we're not necessarily seeing. And that is because of the limited infrastructure in Montréal, but also some permitting delays that have been extended, and so that is definitely not unlocking that full potential of construction in Montréal.

00:09:34:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Let's talk about condos. So condo starts saw a decline this year, whereas purpose-built rental starts surged. Can you walk us through what you saw in the first half of 2025?

00:09:45:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

So in terms of the condo market, in terms of new construction, we're definitely seeing a decline across the country, but really significantly driven by markets like Toronto and Vancouver. Toronto is seeing the most important decline. One of the main reasons for that is very rapidly shifting demand for new condos. In Toronto, specifically, the new condo segment is very heavily dominated by investors, and profitability has been decreasing quite significantly in the last few years. Higher interest rates, higher operating costs, and just profitability — potential profitability — is really not what it used to be. On the end-user side as well, the fact that interest rates have been a little bit higher, the fact that these units are still relatively pricey, and the economic uncertainty as well are impacting the demand for condos. And so that is definitely putting a lot of pressure for developers that are seeing their condos, their pre-sales decline quite rapidly, inventories piling up. And so a lot of developers are just pausing some of the projects or converting them into purpose-built rentals. So we're actually seeing this shift from condominium construction to purpose-built rentals. And one of the reasons for that as well is actually government support. So there have been a lot of you know, programs, financing programs and different types of support from various levels of government that have helped support and kick-start some purpose-built rental projects.

00:11:49:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

With starts remaining stable, what's next for Canada's key markets?

00:11:53:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

So when we're looking at the first half of 2025, we're seeing relatively stable levels. We are expecting, by the end of the year, to see a little bit of a slowdown in terms of housing starts. It's important to remember that housing starts, you know, they're recorded when the foundation is fully poured. And so housing starts today are not necessarily the reflection of business decisions today or developer sentiment today. And so in the context of this economic uncertainty, it's definitely pushing a little bit of that activity to slower levels to finish up the year. Developers are still facing a lot of different challenges when it comes to high construction costs, when it comes to development charges that are increasing in some cases as well, when it comes to trade barriers and that potential impact on construction materials as well. So there are a lot of challenges that developers are still facing. And so we are going to be seeing a little bit of a slowdown in 2025. We're expecting to see a little bit of a pickup in 2026 and into 2027, but it's going to be a slow and modest one.

00:13:13:00

[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

We've talked a lot about how housing supply varies from region to region. How does our outlook vary from region to region?

00:13:20:00

[Speaker: Tania Bourassa-Ochoa, Deputy Chief Economist, CMHC]

So Toronto is definitely hit the hardest. As of mid-2025, it's already on track to record the lowest levels of housing construction in over 30 years, so definitely quite significant. We're expecting to see a little bit of a regain as of 2026 and 2027, but we're still, you know, in those very, very low levels of construction. In Vancouver, we're also seeing that decline, we're expecting to see that decline, you know, into the end of the year. We're expecting to see a little bit of a recovery. It's not the level of Toronto, so that recovery will be bringing us somewhere closer around the 10-year average. When we're looking at Montréal, it’s definitely over-performing for the first half of the year, so we're expecting to see that momentum continue throughout the year and the next one.

00:14:22:00

[Visual: A box with text that reads, "SUBSCRIBE" next to a bell symbol appears briefly.]

Calgary and Edmonton have definitely been our most resilient markets. So very strong increases in housing start activity. We're expecting to see that continue throughout the year. However, you know, in the years to come, we're going to see a little bit of a slowdown, but still in those elevated levels of construction. And then, well, Halifax, we've also seen very recently a little bit of an uptick, so we're expecting to continue seeing that kind of level of construction.

00:14:54:00

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[Speaker: Mireille Thériault, Specialist, Communications, CMHC]

Thanks so much, Tania, for breaking down these insights. To our listeners, you can read the full results from the Housing Supply Report. Just check the episode description below. And to our listeners, thank you for joining us In-House. See you next time.

00:15:10:00

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[Speaker: Joelle Hamilton, Communications & Marketing, CMHC]

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00:15:12:00

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You can now find us on Spotify, Apple Podcasts, and Amazon Music.

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00:15:29:00

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Reach out, let us know what you think. Thanks for listening and see you next time.

00:15:37:00

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