Toronto is on pace for its lowest annual housing starts in 30 years, according to the latest Housing Supply Report from the Canada Mortgage and Housing Corporation (CMHC.)

Homebuilding activity in the city fell to its weakest level since 1996, led by a steep decline in condominium construction. Reduced investor demand prompted project cancellations and delays, while high construction costs and development charges continue to weigh on feasibility. Rental- apartment construction performed better but still slipped from a year earlier.

Among other key details on Toronto, CMHC found that:

• Condominium starts dropped 60% year-over-year in the first half of 2025;
• Rental-apartment starts fell 8% year-over-year

Vancouver also saw a slowdown as many projects were cancelled or paused after failing to meet the pre-sale thresholds required for financing. Development charges remain a major barrier, though new provincial rules starting in 2026 will allow builders to defer up to 75% of these costs until occupancy.

Vancouver condominium starts declined 13.4% in the first half of 2025, while more than 100,000 approved home projects remain stalled due to development charges.

Across Canada’s seven largest metropolitan areas, housing starts were flat in the first six months of the year as growth in cities such as Calgary, Edmonton, Montreal, Ottawa and Halifax was offset by steep declines in Toronto and Vancouver. A surge in purpose-built rental construction helped stabilize national figures, though it was not enough to counter the drop in condominium development.

“While the increase in rental construction in the first half of 2025 was encouraging, the ongoing construction slowdown in the homeownership market poses risks to future housing supply, workforce retention, and affordability,” said Tania Bourassa-Ochoa, CIBC deputy chief economist.

“The Canadian Home Builders’ Housing Market Index for Q2 2025 reflects industry confidence and shows developers are frequently burdened by high development charges and time-consuming approval processes. Systemic changes to Canada’s housing system are necessary to create an environment with more cost and time certainty to increase supply.”

Photo: Shutterstock