00:00:00:00

[Audio: Upbeat rhythmic music plays.]

[Visual: In a recording studio, Joelle Hamilton and Tania Bourassa-Ochoa sit in arm chairs, facing each other. Joelle has medium-length dark brown hair, and she wears a gray blouse, black slacks and boots, Tania has long blonde hair and wears a beige jacket with a black top, slacks and high-heeled shoes. Microphones on stands and tables with open laptops frame their chairs.]

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

Can you walk us through what shaped housing supply decision making in 2025?

00:00:05:00

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

On one hand, we’ve seen strong population slowdown across Canada, softer labour market conditions, a lot of geopolitical uncertainty.

00:00:15:00

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

Can you explain what’s happening in the condo market and why it matters?

00:00:19:00

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

We saw presales, condo presales that have dropped to dramatic lows.

00:00:25:00

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

We forecasted that national housing starts were going to decline through 2026 to 2028. Why and what does that actually mean for Canadians?

00:00:34:00

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

We are seeing these short-term imbalances. That being said, there is a risk in the long term.

00:00:41:00

[Audio: Theme music plays.]

[Visual: On a dynamic red-blue background, translucent black shapes form a row of houses oriented in all directions. A translucent white box with a magnifying glass symbol on the right appears at the centre. White text inside the box reads, “canada’s housing market.”]

00:00:43:00

[Speaker: Joelle Hamilton, Communications & Marketing – CMHC (voiceover)]

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

[Visual: The text box disappears and the single row of houses multiplies into three rows. The houses deconstruct, reconstruct and reorient themselves. At the centre, white text reads, “In-House - Canada’s Housing Podcast.”]

[Audio: Theme music stops.]

[Visual: Joelle and Tania sit in the studio. A box with text that reads, “Joelle Hamilton, Communications & Marketing - CMHC” appears briefly.]

00:00:58:00

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

Hello everyone, and welcome back to In-House. I’m your host, Joelle Hamilton. Today we’re talking about CMHC’s latest Housing Supply Report. On the surface, 2025 brought meaningful progress, but structural challenges continue to weigh on the future pipeline.

Today, we’re looking at both sides of this story, where Canada’s housing system is gaining momentum, and where risks are quietly building beneath the surface.

Joining me to explore this question today is Tania Bourassa-Ochoa, one of CMHC’s Deputy Chief Economists. Welcome back to the studio, Tania.

00:01:32:00

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

Thank you, Joelle.

00:01:33:00

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

So let’s just dive right in like we normally do. So housing starts last year rose about 6%, which equates to roughly 259,000 new units, and that was above the 10-year average in most major markets. What drove that increase?

00:01:51:00

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

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

So in 2025, Canada did do some real supply gains, and that was mainly driven by rental construction. So when we look across different regions in Canada, a lot of these regions recorded record levels of rental housing starts.

But on another note, when you look at the scale of projects that are underway, so basically all of the apartments that are under construction, we see that there’s a very significant level. It’s actually twice the amount of our 10-year average, so a really huge number of apartments that are currently under construction in Canada. Another factor is “missing middle.”

So missing middle housing, we continue to see growth in that space. If we look at Calgary and Edmonton, for example, 6 out of 10 housing starts were actually missing-middle. When you look at Toronto as well, an important, significant amount, which is almost 50%, is also due to missing middle. In this case, mostly conversions, but still a very important share of this type of housing.

And another important factor to note is building timelines that have actually improved across Canada, so faster delivery in many, many cities have really just made these project ideas into actual lived homes in 2025.

So basically 2025, a year of real supply gains in the end.

00:03:41:00

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

And can you define what missing middle housing means?

00:03:43:00

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

Yes, sure. So there’s no standard definition for missing middle, but when we talk about it, we refer to gentle-to-medium density. So you could think of accessory suites, you could think of a low-rise apartment, so 4 storeys or less, row homes, stacked townhouses, for example, multiplexes. So those are the type of homes that we call “missing middle.”

00:04:11:00

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

So getting back to your point about 2025, 2025 delivered some real supply gains, but at the same time, ownership-oriented construction weakened. Can you explain what’s happening in the condo market and why it matters?

00:04:28:00

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

Yeah, absolutely. So this is really where the story, I think, shifts. So we talked about record levels of rental construction. And on the other side, when you look at ownership construction, which is not basically, but a lot of it being condominium, we saw that move in a very different direction.

So, first of all, we saw presales, condo presales that have dropped to dramatic lows. We saw as well that these presale condos but also existing condo inventories have been piling up in the market to quite significant levels. And so we really saw this shift in demand, a lot of it being investor-driven demand that has really slowed down quite significantly in 2025.

And so with all of this inventory piling up, and a lot of the developers have either delayed some of the projects, in some cases were able to convert to purpose-built rentals, to rental construction. This can only happen in early stages of planning, but we did see some of them actually convert.

But in many cases, a lot of these projects were actually cancelled. And so what we’re seeing in 2025, in Toronto, we’re seeing the lowest levels that were recorded since 2009. In Montréal, we’re seeing historical lows of condo construction. In Vancouver, we’re seeing 2 consecutive years of declines in condominium housing starts. So really this shift between rental construction, well, yeah, so to rental construction but, you know, lower condominium construction, and this is going to be quite significantly – it’s going to define quite significantly affordability and also tenure choices down the road.

00:06:32:00

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

So in many cities across the country, market conditions look like they’re more relaxed right now. Vacancies are rising, rent growth is slowing, and some prices are easing. Why does the report caution against interpreting this as a “problem solved”?

00:06:52:00

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

Because today’s housing construction activity is basically yesterday’s housing decisions. So what we’re seeing in terms of housing starts in 2025, in terms of completions in 2025, is really the result of housing decisions that were taken a year or two prior when population growth was quite strong, when demand was quite strong, when financing conditions were also different than what they are today.

And so fast forward to 2025, where the economic situation has shifted with a lot of uncertainty, where population has slowed down quite significantly, even decreased in some regions in Canada, and where financing conditions are not the same that what they used to be, that will and is impacting decisions on supply coming down the road.

And so we already saw, when you look at the latter part of 2025, housing starts that have started to slow down. Since the beginning of the year, we’re also seeing this slowdown in housing activity. And so less housing starts just means less housing supply down the road. And that’s where the real risk is where you are potentially facing housing supply shortages in the future.

And so even if yes, currently right now in some regions there are some short-term imbalances for sure, we believe that this imbalance will be eased out and this supply will get absorbed.

But that being said, if housing starts do slow, continue to slow down significantly, and there is a housing shortage down the road, then, all of a sudden, we might be facing tightening conditions, and that will be putting a lot of pressure on housing prices all over again. And so that is actually not very good when we’re thinking about solving for affordability in Canada.

00:09:12:00

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

You mentioned something about the region, so I want to get a little bit more granular. We’re not going to touch on all 7 of the CMAs that are mentioned or included in the Housing Supply Report, but I do want to start with Toronto.

[Visual: A box with text that reads “SUBSCRIBE” next to a ringing bell symbol appears briefly.]

In the short term, the market looks relaxed, but starts hit their lowest level since 2009. What’s happening in Toronto?

00:09:36:00

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

So Toronto is a textbook example of that timing mismatch that we just talked about. So what we’re seeing right now is high levels of inventories of condominiums. There’s also resale listings that have been piling up in the market as well, slow population growth, and so we’re seeing these market conditions that are easing.

That being said, beneath the surface, the supply pipeline is weakening. Housing starts have dropped and are expected to drop, to continue to drop, basically, down the road, and so this risk of housing supply shortage down the road is very evident in Toronto right now.

And so one of the things that is interesting in the Toronto story is that developers have shifted to rental projects when possible, have shifted to smaller projects as well. And so, actually, in the City of Toronto, rental starts exceeded condo starts. I think it’s the first time that we’re seeing this in a very, very long time.

And even when you’re looking at these smaller projects, 3 to 5 units, it actually surpassed the very large 100-plus units projects that we would typically see in Toronto. So, really a shift in the type of housing that is currently being built.

And at the same time, you know, this slowdown in condominium construction, like we mentioned, is really removing a lot of these condos that could potentially, you know, be in the pipeline. So like we mentioned, a real risk for housing affordability down the road.

00:11:38:00

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

So now I want to shift focus and I want to head to Montréal. Rentals accounted for more than 80% of starts in 2025. What does that tell us about the supply landscape in Montréal?

00:11:50:00

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

So what it tells us is that housing construction has been evolving and changing quite a bit in the last few years, actually. So we’re really seeing right now this record level of rental construction in Montréal, and, at the same time, we’re seeing record low levels of condominium construction in Montréal, so, really, this shift that has been evolving for some years now but is now very evident in Montréal.

Missing middle housing as well has played an important role in Montréal construction. It looks a little bit different when we look at the Island of Montréal. A lot of that missing middle construction is actually conversions that are happening and that is due to the high costs, basically, that we’re encountering in the Island of Montréal.

When you look outside of the Island, so like North Shore or the South Shore, we’re seeing this missing middle construction, but it looks a lot more like these multiplexes or these lower-density, these 4, 5-storey rental units.

00:13:03:00

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

Now we’re going to head out west. We’re going to go to Calgary and Edmonton. They recorded, or they posted record starts, which even surpassed Toronto’s, in Calgary’s case. What’s driving that strength?

00:13:16:00

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

Strong demand expectations definitely played a big role. Add to that zoning changes, but also targeted incentives that really supported the construction of both rental but also missing middle housing.

In Edmonton, what’s interesting is we saw a growth in both rental construction and condominium construction at the same time, which is very different from what we’re seeing in the rest of the country. And there is, however, when we’re looking at the cities, a constraint that is emerging. So for the first time we’re seeing more housing starts than completions, and a very large number of units that are under construction right now, and so that is putting a lot of pressure on labour availability.

So there’s a lot of constraints on labour shortages, basically, and capacity. And so that could be and starts to become a little bit of a bottleneck when we’re thinking about these regions. So there’s definitely momentum, for sure, but there are these challenges that are lying ahead.

00:14:34:00

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

Last but not least on my list of regions to look at is Vancouver. It looks like the market is a little softer in the short term, but what’s happening beneath the surface?

00:14:46:00

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

First of all, Vancouver recorded in 2025 record levels of completions, so that did help kind of to ease up some of these pressures that were very evident in Vancouver.

When we’re looking at the resale market, we hit a 20-year low in Vancouver, so a lot of new listings that have been finding their way online. Part of the reasons for that is mortgage renewals, so we know that households in high-priced markets are more highly indebted and so when they face mortgage renewals, it might be a little bit more difficult for many households, and so a lot of new listings that have been added to the already high levels of supply, and also changing household needs as well. So that’s kind of what’s explaining all of these listings.

At the same time, housing construction has weakened quite a bit in Vancouver, both rental and condo activity. But on the bright side, there is missing middle housing, which increased thanks to recent densification policies that we saw in Vancouver. But overall, I think short-term supply is really masking a thinning of housing starts in the pipeline of new housing down the road.

00:16:19:00

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

We know that developer decisions are influenced by many factors, but recent shifts have been driven by softer demand, demographic changes, and rising costs, all of which you have mentioned.

[Visual: A box with text that reads “SUBSCRIBE” next to a ringing bell symbol appears briefly.]

Can you walk us through what shaped housing supply decision making in 2025?

00:16:38:00

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

Yes, of course. First of all, it’s important to note, however, that there’s a wide array of factors that go into decision making when thinking about a development project, so for a “go-no-go” decision or what type of project to develop.

That being said, there’s a few factors that have played a larger role in decision making in supply in 2025, one of them being slower demand. So on one hand we’ve seen strong population slowdown across Canada. In some regions, like Toronto and Vancouver, we’re actually seeing population decreases. Softer labour market conditions, so it has been more difficult on the job market in 2025. A lot of geopolitical uncertainty, tariff uncertainty, that has influenced a lot of people who have actually lost their jobs or are in a more uncertain economic situation, and so that has definitely played a role in households’ decisions to enter the market or to move.

And then there’s another important factor which we like to call “suppressed household formation.” So what that means is we’re actually estimating that there’s a lot less households that are being created, like more young people that are staying longer with their parents, we could think of roommates that are not moving out into their own household. We could also think of, you know, young people that are, you know, married or staying with their partner in the parents’ house, for example, so a lot of these households that are not being formed.

So it’s not to say that this demand is inexistent, but it’s just that this demand is patiently waiting, if you will, for better economic conditions to actually form a new household. So that’s another factor. And then there’s, obviously, high construction costs, high continued construction costs. This has been the case for a few years now, but it is still very costly for a project to move forward.

00:19:09:00

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

So we’ve talked about what happened in 2025. There were strong completions, rental, record rental construction, and then that weakening ownership supply.

So in CMHC’s latest Housing Market Outlook report, we forecasted that national housing starts were going to decline through 2026 to 2028. Why, and what does that actually mean for Canadians?

00:19:34:00

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

So it’s basically what we’ve discussed since the beginning, this mismatch between timing. So it takes a lot longer for supply to actually respond to demand changes. And so the homes that were completed in 2025 were launched 1 year to 2 years ago. And so in the short term, what that means is that fewer starts that we’re anticipating down the road may actually help absorb the wave of supply that has just come online. So like we talked about in certain markets, we are seeing these short-term imbalances.

That being said, there is a risk in the long term. Some demand hasn’t disappeared. We talked about it. It’s just waiting for these better economic conditions to return. And so we could expect demand to bounce back in the years to come. That being said, because it takes so long to actually build new housing, there is a real risk that the decisions today could become tomorrow’s shortage in the pipeline for a new housing supply.

00:20:46:00

[Audio: Theme music plays.]

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

Tania, once again, thank you so much for sitting down with us and walking us through kind of the key points of our latest Housing Supply Report.

And thank you to all of you for joining us In-House.

[Visual: On a dynamic red-blue background, three rows of translucent black houses deconstruct, reconstruct and reorient themselves in all directions. In the foreground, white text reads, “In-House - Canada’s Housing Podcast.”]

00:20:58:00

[Speaker: Joelle Hamilton, Communications & Marketing – CMHC (voiceover)]

Did you know we’re not just on YouTube?

[Visual: The white text slides up and disappears, replaced by white logos for Spotify, Apple Podcasts and Amazon Music.]

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

[Visual: The logos slide up and disappear, replaced by white text that reads, “Don’t miss our next episodes!” Three translucent white rectangles reading “Share, Follow” and “Subscribe” appear below the text. Then, the rectangles become solid sequentially and the letters turn transparent.]

Don’t miss our next episodes for more real, data-driven discussions. If you’re learning from and or enjoying this podcast, please share this episode, follow us, or subscribe.

[Visual: The text and boxes disappear, replaced by white text that reads, “See you next time!”]

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

[Visual: The CMHC logo and Canada wordmark appear on a white background.]