Record rental building buoys supply while major cities bank fewer future owners
Canada’s housing starts ticked higher in 2025, but the composition of that new supply left a growing question for lenders, brokers and developers: who would actually own the next wave of homes.
National starts rose 6% year over year to about 259,000 units, powered by record rental construction and more “missing middle” housing, according to Canada Mortgage and Housing Corporation’s Spring 2026 Housing Supply Report.
CMHC said activity exceeded the 10‑year average in most major centres, even as ownership‑oriented building weakened.
“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. This new supply has contributed to the easing of rental market conditions in many of Canada’s major centres,” said Tania Bourassa‑Ochoa, deputy chief economist at CMHC.
“However, homeownership supply, particularly in the condominium segment, continues to face significant challenges in the face of falling presales. This threatens both the availability and affordability of ownership options for Canadians in the medium‑term. Since construction timelines can span years, a slowdown in starts today sets the stage for future supply constraints,” she said.
Toronto, Vancouver and Montreal leaned away from condos
In Toronto, CMHC reported that 2025 housing starts fell well below the historical average and hit the lowest per‑capita level among the seven largest census metropolitan areas.
For the first time this century, rental starts exceeded condo starts in the City of Toronto, while builders shifted toward projects with three to five units rather than 100‑plus‑unit towers.
CMHC said that combination relaxed near‑term conditions but risked “a sharper supply gap and a tighter market in the long term.”
GTA condos face a prolonged correction, with February sales dropping and average prices falling sharply. Mike Kazarian notes the sector will eventually recover, but inventory shortages and affordability pressures suggest the turnaround will be slow.https://t.co/SDMAsn7Jeo
— Canadian Mortgage Professional Magazine (@CMPmagazine) March 6, 2026
Vancouver’s market also appeared looser on the surface. CMHC pointed to record completions and slower demand, but warned that “the viability of new projects was increasingly under strain,” with land scarcity, high costs and weak pre‑construction sales slowing both rental and condo projects even as missing middle construction strengthened.
In Montreal, CMHC said rental projects accounted for more than 80% of starts in 2025, while condo starts fell to record lows. The agency flagged that today’s apparent surplus would likely give way to renewed affordability pressure as starts drop and demand recovers.
Prairie and Atlantic markets leaned into rentals and missing middle
Calgary reached another record high for housing starts and, for the first time, surpassed both Toronto and Vancouver. CMHC said rental and missing middle homes led that growth, even as labour and capacity constraints lengthened build times.
Edmonton also posted record starts, with strong gains in both rental and ownership, including condos. About 60% of all starts fell into missing middle formats as rezonings and infill opportunities supported denser supply.
Ottawa’s near‑record starts were dominated by rental units tied to transit‑oriented development and earlier financing conditions, while Halifax saw record numbers of homes under construction, heavy rental activity and rising delays as builders operated near full capacity.
CMHC described family‑sized ownership housing as “vulnerable” across several big markets and reiterated that, to restore affordability to 2019 levels, Canada would need hundreds of thousands more units per year than it currently delivered.
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