Canada’s Housing Starts Are Slipping, and the Supply Gap Is the Real Story
Every development cycle has a moment where the market tests whether a country built enough runway for the next decade of growth. Canada is in that moment right now, and the latest numbers from the Canada Mortgage and Housing Corporation suggest we are not passing the test.
Actual urban housing starts fell 11 percent year-over-year last month, dropping to 19,984 units from 22,375 a year earlier. Year-to-date starts across the country are down 4 percent. The six-month moving average, the figure that smooths out the noise and shows us where the pipeline is actually heading, crept up just 0.6 percent to 250,411 units. That is not momentum. That is a market treading water while demand keeps moving.
What strikes me most as someone who spends his days thinking about land, timing, and long-term city growth is the warning from CMHC’s deputy chief economist, Aled ab Iorwerth: the real risk right now is not building enough during this period of softening demand. That is the mistake cities and developers have made before. When markets cool, the instinct is to pull back. But supply decisions made today determine whether a region has enough housing stock five and ten years from now, long after this particular softening has passed.
Look at the regional breakdown and you can see how uneven this correction is. Of the four most populous provinces, only Quebec has posted gains in starts this year. All seven major centres tracked in CMHC’s Housing Supply Report are running behind 2025’s pace. Montreal is down 8 percent over six months on weaker multi-unit activity. Vancouver bucked the trend with a 6 percent increase, driven by multi-unit starts. Toronto sits flat, with single-detached and multi-unit trends effectively cancelling each other out. That is not a national story so much as it is dozens of local stories about land cost, financing conditions, and municipal approval timelines all colliding at once.
A key risk for Canada now is not building enough during this period of softening housing markets across the country.
This also lands right after Royal LePage’s third-quarter report showed national median prices easing, with detached homes down 0.5 percent year-over-year to $856,500 and condos down 1.5 percent to $571,900. Softer prices paired with fewer starts might look like relief for buyers in the short term, but it is a poor substitute for structural supply. Affordability built on a shrinking construction pipeline is borrowed time, not progress.
For anyone involved in land strategy, this is the window to think ahead rather than react. Municipalities and developers who keep approvals moving and keep multi-unit projects in motion through this softer stretch will be the ones positioned when demand snaps back, and it always does. The cities that pause now are the ones that will be scrambling to catch up later, with the same affordability pressures they are trying to avoid today.
Source: Toronto Sun, “Housing starts stall as CMHC warns affordability gains at risk”
