Market memo: Housing starts and stalls – September 2025

  • First National Financial LP
Housing starts in Canada have, on average, been flat for the first half of this year.  But averages can be deceiving.   

Big Markets Drag Down Numbers 
Many of the country’s major centers have homes going up at a record pace, while the two biggest and busiest markets have dropped anchor and come to a standstill. 

The Canada Mortgage and Housing Corporation’s latest Housing Supply Report shows housing starts in Calgary, Edmonton, Montreal, Ottawa, and Halifax at or near record levels.  However, Toronto and Vancouver are experiencing serious pullbacks.   

Condo Market Collapse 
In Toronto condominium starts plunged 60%, dragging homebuilding activity to its lowest level (per capita) in nearly 30 years.  Vancouver has seen housing starts drop by nearly one third compared to just two years ago. 

CMHC says investors fleeing the condo market have led to the decline in condominium apartment construction right across the country, but other forms of housing have helped stabilize the overall housing start numbers. 

“Purpose-built rental starts surged, bolstered by government support and a shift among developers toward the rental market,” according to the housing agency. 

“Ground-oriented construction – including single-detached, semi-detached and row homes – saw a modest growth, driven by lower mortgage rates unlocking demand in more affordable markets. In higher-cost centres, like Toronto and Vancouver, affordability remained strained and homebuyers cautious amid economic uncertainty.” 

The agency points to U.S.-triggered trade turmoil as the key cause of that uncertainty. 

Pessimism will Hinder Recovery 
CMHC expects housing starts for 2025 will fall short of 2024 numbers.  Because of continued pessimism within the building industry the agency does not expect improvements for another 24 to 36 months. 

“We expect only a slow and marginal rebound for the seven key markets combined over the next 2 years. This rebound will take shape mostly in 2027.  The timing and scale of recovery will vary widely across the key markets.”

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