Canada’s Housing Starts Rise in 2025, But Homeownership Supply Shows Growing Weakness

Canada saw a 6% increase in housing starts in 2025, according to the latest Housing Supply Report (HSR) from the Canada Mortgage and Housing Corporation (CMHC). The growth was driven almost entirely by record-breaking rental construction and continued expansion of low-rise apartments, multiplexes, row homes, stacked townhouses, and accessory suites.

While this surge has helped ease rent pressures in many cities, CMHC warns that the homeownership supply, particularly condos, is becoming increasingly vulnerable, raising concerns about affordability and availability in the years ahead.

What’s Driving the Growth? Rental and “Missing Middle” Housing

According to CMHC, rental construction reached historic levels across much of the country in 2025, including:

• Toronto: Second-highest rental construction year on record
• Calgary & Edmonton: Record-high housing starts driven by rental and missing middle housing
• Ottawa, Halifax & Montréal: Strong rental and medium-density construction

Total “missing middle” housing, such as duplexes, triplexes, and small apartment buildings, rose by about 10% across Canada’s seven largest metropolitan areas. These housing types are increasingly favoured because they are lower-risk, smaller in scale, and better aligned with current market demand.

In a notable shift, Toronto saw rental starts exceed condominium starts for the first time this century, reflecting a move away from large ownership projects toward smaller buildings with three to five units.

Where the Market Is Struggling: Homeownership Supply

Despite higher overall housing starts, CMHC highlights growing challenges in the ownership market:

• Condo presales have collapsed, especially in Toronto and Vancouver
• Unsold inventories are rising
• Builder financing has tightened
• Projects are being delayed, cancelled, or converted to rental

CMHC Deputy Chief Economist Tania Bourassa‑Ochoa cautioned that today’s slowdown in ownership starts could create serious supply shortages in the future:

“Since construction timelines can span years, a slowdown in starts today sets the stage for future supply constraints.”

While current completions remain elevated and are easing the market temporarily, fewer ownership projects starting today means less supply available in the years ahead, particularly for first-time buyers.

City-by-City Snapshot

Toronto

• Rental starts surpassed condo starts for the first time in decades
• Overall starts fell compared to recent years
• Completions remain strong, but future supply may tighten

Vancouver

• Weaker demand due to slower population growth
• High land costs and poor condo presales limit new projects
• Missing middle construction remains a bright spot

Montréal

• Over 80% of starts were rental
• Condo starts fell to record lows
• Future affordability concerns remain

Calgary & Edmonton

• Record housing starts supported by zoning reforms and incentives
• Labour shortages and capacity constraints are lengthening timelines

Ottawa & Halifax

• Rental and medium-density projects led growth
• Builders face capacity limits that may restrict future supply

The Big Picture

The HSR highlights a key structural issue in Canada’s housing market:

• Rental supply is booming
• Homeownership supply is weakening

While increased rental construction is helping stabilize rents in the short term, the slowdown in ownership-oriented development could severely limit choices for Canadians hoping to buy, especially in high-cost urban markets.

How Does This Affect You?

Homeowners

• Fewer ownership starts today can mean higher prices and tighter supply tomorrow.
• Smaller-scale housing (multiplexes, secondary suites) is becoming more common and viable.

Builders & Developers

• Multiplexes, laneway suites, and low-rise rental or ownership projects are increasingly aligned with market realities.
• Large condo developments face higher risk due to presales and financing challenges.

Investors & Commercial Property Owners

• Rental-focused and medium-density projects may offer more predictable demand.
• Shifts in housing typologies influence neighbourhood density, retail demand, and mixed-use feasibility.

UTES Design & Build: Designing for Today’s Market and Tomorrow’s Supply

At UTES Design & Build, we work closely with homeowners, developers, and investors to respond to real market conditions. As Canada’s housing landscape shifts:

• We design missing middle housing that aligns with demand
• Support multiplex, laneway, and small apartment projects
• Optimize projects for cost efficiency and constructability
• Integrate architecture and structural engineering to reduce risk

Whether you’re planning a custom home, secondary suite, multiplex, or small-scale rental or ownership project, UTES helps position your build for long-term success.

Contact us today to discuss how current housing market trends should shape your next project.