Canada’s housing starts have faced a significant slowdown in the first half of 2025, largely attributed to declines in the country’s two most expensive real estate markets, Toronto and Vancouver. According to Canada Mortgage and Housing Corporation (CMHC), Western cities such as Calgary are experiencing unprecedented levels of home construction. The larger national picture tells a story of big headwinds that threaten our housing supply and affordability in communities across the country.
It was particularly grim in Vancouver, where condominium starts fell by 13.4% from years prior. Softness in pre-construction sales has resulted in many projects being paused or canceled, adding to the market’s malaise. This move is emblematic of a broader anti-urban trend in Toronto. Without action, the city is on track for its lowest total annual housing starts in three decades.
Calgary has become a star of big-time development, with homebuilders increasingly bullish about the city’s long-term prospects. The city reached historic highs for new homebuilding levels, largely due to a surge in the number of rental apartment developments. Meanwhile, Edmonton, Montréal, Ottawa, and Halifax all drastically maintained their significantly higher-than-average construction rates. This stability is especially impressive in light of the issues plaguing much larger markets.
Tania Bourassa-Ochoa, CMHC’s deputy chief economist, recently commented on these alarming figures, calling for _systemic change_.
“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing construction slowdown in the home ownership market poses risks to future housing supply, workforce retention, and affordability,” – Tania Bourassa-Ochoa
In hot markets like Calgary and Edmonton rental apartments are running away with the market. At the same time, through provincial policy changes or municipal advocacy, purpose-built rental is booming big-time outside of Toronto and Vancouver. Much of this development has been overwhelmingly driven by recent federal government incentives to help address the affordable housing crisis.
Canada is dealing with very different circumstances in its housing markets. Policy experts stress the importance of match policy with new demands.
Bourassa-Ochoa further stated,
“Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply,” – Tania Bourassa-Ochoa
