Ontario Construction News staff writer
Canada’s housing starts rose six per cent in 2025, driven by record rental apartment construction and growth in low-rise apartments, multiplexes, row homes, stacked townhouses, and accessory suites, according to the latest Housing Supply Report (HSR) from the Canada Mortgage and Housing Corporation (CMHC).
Despite the overall increase, construction of homes for ownership weakened, raising concerns about future supply and affordability.
“On the surface, housing starts last year were quite strong, outpacing annual starts in 2024 and led by historic levels of rental starts and completions,” said Tania Bourassa-Ochoa, CMHC’s deputy chief economist. “This new supply has contributed to the easing of rental market conditions in many of Canada’s major centres. However, homeownership supply, particularly in the condominium segment, continues to face significant challenges in the face of falling presales. Since construction timelines can span years, a slowdown in starts today sets the stage for future supply constraints.”
Condominium presales have collapsed, unsold inventories are rising, and softer buyer demand, along with tighter financing for homebuilders, is leading to project delays, cancellations, or conversions to rental units. These trends are particularly pronounced in Vancouver and Toronto.
Record-high rental construction was reported in Calgary, Edmonton, Ottawa, Halifax, and Montréal, while Toronto saw its second-highest rental construction level ever. Total “missing middle” housing — medium-density units such as duplexes and triplexes — also rose about 10 per cent across the seven largest Census Metropolitan Areas.
Toronto: For the first time this century, rental starts exceeded condo starts in the city, reflecting a shift away from large, riskier ownership projects toward smaller buildings of three to five units. Overall 2025 housing starts fell compared with recent years, but completions remained elevated, easing the market short-term but potentially creating a tighter market long-term.
Vancouver: Demand eased amid slower population growth and record completions. Land scarcity, high costs, and weak condo presales are weighing on new projects, though “missing middle” construction shows promise.
Montréal: Rental construction dominates, making up over 80 per cent of 2025 starts, while condo starts fell to a record low. Future declines in starts could exacerbate affordability pressures.
Calgary and Edmonton: Both cities saw record-high housing starts, driven by rental and missing middle construction, supported by zoning reforms and government incentives. However, labour shortages and building capacity pressures are lengthening timelines.
Ottawa and Halifax: Rental and medium-density construction led growth. While completions remain strong, builders face capacity limits, threatening future supply.
The HSR underscores a central challenge for Canada’s housing market: while rental supply is booming, the homeownership segment faces vulnerabilities that could limit availability and affordability for Canadians in the years ahead.
Read the complete Housing Supply Report (HSR).
