New data reveals most construction isn't meeting the needs of Canadian households
Canada hit nearly 260,000 housing starts in 2025, a figure that initially appears to signal progress on the country's persistent housing shortage. But beneath that headline number lies a troubling disconnect between what's being built and what families actually need.
The reality is stark. More than 170,000 of those units were apartments and condos, predominantly studios and one-bedrooms.
"Our housing data is lying to us, or we're mishearing it," said Mike Moffatt, a housing policy expert who analyzed the figures alongside journalist Sabrina Maddeaux.
The mismatch extends beyond unit types. The way Canada measures housing starts creates a significant lag between market conditions and reported data.
Unlike most countries, which count a start when excavation begins, Canada waits until foundations reach ground level, a process that can take 18 to 24 months for high-rises with parking structures.
Canada Mortgage and Housing Corporation (CMHC) reported that the seasonally adjusted annual rate of housing starts rose 4.5% month over month to 250,900 units in February. That's up from a revised 240,148 in January.https://t.co/YnmNkNGVzf
— Canadian Mortgage Professional Magazine (@CMPmagazine) March 16, 2026
When the numbers mislead policymakers
This timing gap means 2025's housing starts largely reflect investment decisions made in summer 2023, when market conditions looked entirely different.
"There is this really big disconnect between the data, which is supposed to be measuring current conditions, but is really reflecting investment decisions made two or two-and-a-half years ago," Moffatt said.
Meanwhile, pre-construction sales paint a grimmer picture of the industry's current health. Sales dropped 16% in Edmonton, 39% in Calgary, 45% in the Greater Toronto Area, 52% across the Greater Golden Horseshoe, and 56% in Vancouver during 2025 compared to the prior year.
The CMHC's February 2026 Housing Market Outlook confirmed these concerns, forecasting housing starts will decline each of the next three years, with over 40,000 fewer starts in 2028 than 2025.
The statistical illusion of bigger homes
Canadians often hear homes are getting larger, but that's another statistical mirage. While the average detached home has grown, overall housing has actually shrunk. Ontario's typical median home was a three-bedroom house before 2016; since then, it's been a two-bedroom apartment.
"I'd say living in smaller homes and in different types of homes - condos, apartment buildings, basement units, very small, often with poor layouts," said Maddeaux when asked about her generation's housing compared to previous ones.
The shift occurred because Canada stopped building 1,200-square-foot starter homes and replaced them with 500 to 600-square-foot tower units.
Detached homes appear larger on average only because smaller ones vanished from the market, creating what statisticians call a composition effect.
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