Canada’s housing conversation usually circles home prices, bidding wars, and monthly sales reports, but the real story behind affordability lies in housing supply. Every new foundation poured represents a future home for families, newcomers, and renters. The pace of housing starts offers a window into where the market is heading. From multi-unit rental high rises that are reshaping skylines to single-detached homes that continue to define many communities, housing starts measure whether enough supply is being built to meet the country’s record population growth. 

The national construction numbers currently remain at historically strong levels. Still, cracks are showing, particularly in Ontario, where building and land costs, municipal development charges and approvals, and demand shifts are slowing new projects. Understanding these trends is crucial, not only for policymakers and builders but also for anyone planning to buy, renew or refinance a mortgage in the years ahead. Meanwhile, Canada Mortgage and Housing Corporation (CMHC) continues to stress that Canada needs 3.5 million additional homes by 2030 to restore affordability. Even with record completions, the current pace of construction is not enough to close this gap, which is why the trajectory of housing starts today has direct consequences for the housing market Canadians will face tomorrow.

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Key Highlights

• Canada’s housing starts remain historically strong, with multi-unit rental housing driving most of the new supply.
• Regional performance is uneven, with Ontario lagging while Alberta, Quebec, and Atlantic Canada continue to post robust growth.
• Even with record completions and a construction pipeline, Canada’s long-term affordability challenge persists without faster growth in housing starts.

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What is a Housing Start

Housing starts mark the official beginning of construction. According to CMHC, “A housing start is defined as the beginning of construction work on a building, usually when concrete has been poured for the entire footing around the structure, or an equivalent stage where a basement will not be part of the structure.”

Monthly data is usually presented as SAAR (seasonally adjusted annual rate), which smooths out month-to-month swings by showing the pace of starts if that month’s activity continued for an entire year.

Housing Starts Versus Housing Supply

Housing starts measure the flow of new projects breaking ground, while housing supply reflects completed homes ready for occupancy. Canada recorded record completions in 2024, a trend supported by a still-strong pipeline of units under construction. 

According to the CMHC 2025 Housing Market Outlook, “Housing starts [compared to 2024] will slow down from 2025 to 2027 mainly due to fewer condominium apartments being built but total starts will remain above their 10-year average.” Still, momentum will slow over the next few years as fewer condominium apartments come to market. Rental apartment construction will remain elevated through 2025 and 2026, though CMHC projects some moderation in 2027 as demand eases. 

Attached housing, such as row homes, may recover slightly, offering more affordable options for families. The risk is most pronounced in Ontario, where weaker investor demand for pre-construction condos could lead to fewer project launches. This dynamic results in reduced completions in 2026 and beyond, exacerbating longer-term affordability challenges even as near-term supply remains historically strong.

How Many Homes Do We Need

Back in its September 2023 report, CMHC stated, “We maintain our projection that Canada needs about 3.5 million additional housing units by 2030 to restore affordability.” That means Canada’s projected housing stock of 18.2 million in 2030 will fall far short of the 22 million homes required to return affordability to early 2000s levels.

Ontario and British Columbia account for about 60% of this shortage, reflecting decades of underbuilding in the least affordable markets. Quebec and Alberta also face growing gaps as population and economic growth drive stronger demand. CMHC highlights that Quebec, once considered relatively affordable, now requires significantly more housing.

According to CMHC Deputy Chief Economist, Aled ab Iorwerth, “This report again highlights the crucial role of increasing housing supply if the goal is to make housing affordable for everyone in Canada. It also demonstrates the importance of examining both economic and demographic variable, given the recent changes that have been experienced in both.”

CMHC’s alternative scenarios show the scale of the challenge. If immigration remains high, the gap could grow to 4 million units by 2030. If economic growth slows, the gap narrows slightly to 3.1 million, but affordability pressures persist. Across all cases, the message is clear: Canada must accelerate housing starts to close the affordability gap.

What The Latest Data Says

According to CMHC, Canadian housing starts came in at a solid pace in July, with the total monthly SAAR rising 4% to 294,085 units compared to June’s 283,523. The 6-month moving average also increased 3.7% to 263,088 units, highlighting a healthy underlying trend. In urban centres with populations over 10,000, actual starts reached 23,464 in July, up 4% from 22,610 in the same month last year. Year-to-date totals stood at 137,875 units, also 4% higher than the same period in 2024.

Regional dynamics were notable. Vancouver saw a 24% increase in housing starts, primarily from multi-unit projects, while Montreal posted a striking 212% year-over-year gain. In contrast, Toronto experienced a 69% decline as both multi-unit and single-detached starts dropped compared to July 2024. 

CMHC Deputy Chief Economist Tania Bourassa-Ochoa noted, “Through the first seven months of the year, actual housing starts have remained above 2024 levels, primarily driven by increased multi-unit starts in the Prairie Provinces and Québec. These persistently elevated national results are reflective of investment decisions made months or even years ago, highlighting the influence of previous market conditions and builder sentiment on current construction trends.”

Current Trend

According to TD Economics, housing starts in Canada rose to their highest level since September 2022, with July posting 294,100 annualized units, a 4% increase from June’s already elevated 283,500. The 6-month moving average reached a healthy 263,000 units, well above pre-pandemic norms. This sustained pace reflects the underlying resilience of the construction pipeline, supported by strong population growth and government financing programs that have kept many projects moving forward. While building permits indicate near-term stability, economists anticipate some cooling in 2026 as population growth slows and demand in the homeownership market remains under pressure.

Housing Starts by Province, SAAR (Urban Centres 10K+)

	Single-Detached			All Others			Total
	June 2025	July 2025	%	June 2025	July 2025	%	June 2025	July 2025	%
NL	617	804	30	478	435	-9	1,095	1,239	13
PEI	359	390	9	180	2,040	##	539	2,430	351
NS	1,992	1,671	-16	6,033	15,033	149	8,025	16,704	108
NB	833	1,006	21	6,300	7,236	15	7,133	8,242	16
QC	4,745	5,099	7	46,014	51,242	11	50,759	56,341	11
ON	11,704	10,492	-10	46,652	63,856	37	58,356	74,348	27
MB	2,124	2,355	11	2,964	2,676	-10	5,088	5,031	-1
SK	1,689	1,525	-10	2,844	3,288	16	4,533	4,813	6
AB	14,282	15,181	6	47,059	34,942	-26	61,341	50,123	-18
BC	3,929	3,953	1	60,373	50,394	-17	64,302	54,347	-15

CA (10K +)	42,274	42,476	0	218,897	231,142	6	261,171	273,618	5
CA (All Areas)	56,110	55,740	-1	227,412	238,342	5	283,523	294,085	4
Source: CMHC Starts and Completion Survey, Market Absorption Survey

The Regional Picture

Canada’s July housing starts revealed a story of sharp regional contrasts, underscoring how multi-family construction is driving growth nationwide. Ontario continues to stand out as the weak link, with RBC Assistant Chief Economist Robert Hogue noting that “Ontario’s 6-month average for housing starts has fallen to the lowest level in a decade.” Projects in the GTA remain especially vulnerable, constrained by slower condo pre-sales, higher development charges, and elevated inventories.

In contrast, Alberta, Quebec, and Atlantic Canada showed notable strength. Alberta’s numbers are close to record highs, Quebec posted a meaningful upswing, and the Atlantic provinces surged to 29,000 units annualized, an exceptionally elevated level. British Columbia pulled back by 10,000 units but still outperformed Ontario in relative terms.

Nationally, July’s performance was almost entirely powered by multi-family housing, where starts rose by 12,000 to reach 231,000 units annualized. Single-detached activity was flat at 42,000 units, reflecting the ongoing challenges in Canada’s homeownership market. 

Regional breakdowns highlight these divides: Ontario added 16,000 units, Quebec 6,000, and the Atlantic provinces 12,000, while the Prairies slipped by 11,000, weighed down by Alberta, and BC also recorded a significant decline. The result is a market where rental construction continues to carry the momentum, while single-detached and ownership-focused projects remain subdued due to mortgage affordability challenges.

Why Housing Starts Matter for Affordability

Housing starts are the foundation of future affordability. Every project that breaks ground today determines how many completions will add to Canada’s housing stock in the next 1 to 3 years. Without a steady flow of new starts, the pipeline shrinks and the supply gap widens, leaving buyers and renters competing for fewer homes.

According to RBC Wealth Management, “Canadian homebuilders finished roughly 260,000 units in 2024, the highest on record and above the previous 1974 peak.” Canada entered 2025 with record momentum. CMHC data shows that about 345,000 units were still under construction in metropolitan areas at the start of 2025, a strong pipeline that should support elevated completions in the near term. This flow of completions is helping temper pressures in resale and rental markets, but it is not enough to erase Canada’s structural housing affordability gap.

Whether this pipeline translates into future supply depends heavily on the economics of building. Homeownership-oriented projects, especially in Toronto, have slowed as pre-construction condo sales weaken, making it harder for developers to secure financing. Rental projects, by contrast, continue to benefit from targeted government programs and steady demand, keeping apartment activity more resilient. Similarly, RBC highlights that development charges and high construction costs in Ontario are significant barriers to development. While municipal approvals have improved, they have not offset these financial headwinds.

Looking ahead, completions should remain elevated into 2026 as the existing pipeline works its way to market. Housing starts are likely to hold near current levels in the short run but could ease as population growth slows and pre-sales remain soft. Without improvements in productivity, cost management, and building approvals, the housing affordability gap will persist, continuing to put pressure on households, even as near-term supply growth is expected to continue.

How Housing Starts Shape Mortgage Decisions

Canada’s construction trends influence not just future housing supply but also how borrowers should plan their mortgage strategies. With record completions adding homes now but slower starts in key markets like Ontario signalling tighter supply ahead, borrowers face unique considerations. The pace of future Bank of Canada rate cuts will determine how much of this new supply translates into real affordability relief for homebuyers or homeowners considering a renewal or refinance.

For Homebuyers

Rental construction remains the backbone of new supply, which should help ease rent growth in the coming years. Still, Ontario’s weakness raises the risk of tighter homeownership markets in places like the GTA. With BoC policy rate cuts progressing slowly and fixed mortgage rates tracking the volatility in the Government of Canada bond yields, keeping a mortgage pre-approval up to date is essential. Comparing fixed and variable options ensures flexibility in a market where affordability depends on both future supply and financing conditions.

For Renewers

The surge in completions is supporting stable listings, yet home affordability pressures remain as ultra-low-rate mortgages come due. If your mortgage renewal is within the next year, prepare for potential renewal payment shock. Strategies such as blending your current rate or opting for a shorter mortgage term can help manage costs until interest rates decline. The supply pipeline may ease long-term pressure, but short-term affordability challenges remain.

For Refinancers

Accessing your home equity depends on where you own. In Ontario, where weaker pre-sales and slower project launches could weigh on condo values, appraisals may vary more widely. In other regions with stronger housing starts, valuations may hold up better. Comparing a mortgage refinance with alternatives such as a second mortgage or a HELOC helps balance flexibility, cost, and long-term planning.

Frequently Asked Questions (FAQ) About Housing Starts and Housing Supply in Canada

Final Thoughts

Canada continues to build at a strong pace, especially in the rental sector, which is adding critical housing supply. Yet Ontario’s slowdown shows how weaker pre-construction sales and higher costs can stall projects, leading to fewer completions in the years ahead. This is the primary reason why Canada’s housing affordability gap continues to persist even as housing starts look strong.

The national picture is one of rebalancing. Rental construction is carrying momentum, while ownership projects face headwinds. Alberta, Quebec, and Atlantic Canada remain resilient, but Ontario’s weakness underscores how uneven progress is. CMHC’s projection that Canada needs 3.5 million additional homes by 2030 highlights this challenge, especially as inflation, US tariffs, development charges and construction costs keep affordability under pressure.

For Canadians planning their next move, home prices and trends matter as much as where housing supply is growing. Homebuyers should monitor mortgage rate forecasts when deciding between fixed and variable options. Renewers need to prepare for payment shock as lower interest rate mortgages roll over, while those looking to refinance should consider how local supply shifts could affect property values. Factoring these dynamics into your strategy is key to protecting long-term financial stability.

Contact nesto mortgage experts today to explore a mortgage strategy tailored to your homebuying, renewal, or refinancing needs.

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