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Canada’s housing agency says the country made “meaningful” supply gains last year thanks to record rental construction and more “missing middle” type housing, however short-term imbalances remain for several markets.
Housing construction rose six per cent year-over-year in 2025 to 259,000 units, with activity exceeding the 10-year average across most major markets, according to Canada Mortgage and Housing Corp.’s spring housing supply report.
The report, released Wednesday, said Toronto was the lone exception, as housing starts fell below the historical average and reached the lowest per-capita level among Canada’s seven largest regions.
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Rentals drove overall new housing supply in Canada last year, with the number of rental units under construction nearly doubling the 10-year average. Rental starts hit record highs in Calgary, Edmonton, Ottawa, Halifax and Montreal, while reaching their second‑highest level ever in Toronto.
The trend led to increased vacancy rates and slower rent price rises compared with recent years.
The report also highlighted the growth of “missing middle” housing — a term referring to gentle-to-medium density types such as accessory suites, multiplexes, row homes, stacked townhouses and low-rise apartments, which have often been under-represented in new supply.
“Missing middle housing is important because it adds quicker-to-build, lower‑cost homes in existing neighbourhoods. It also gives families more options when single‑detached houses are too expensive and units in highrise buildings are too small,” the report said.
Total missing middle starts rose around 10 per cent across the seven major regions in 2025.
Calgary and Edmonton were at the forefront, with around 60 per cent of all their new starts in this category, followed by Toronto at roughly half.
The report said overall completions were also strong, reflecting the high volume of starts in recent years. Vancouver posted a new record, led by apartment completions, as did the two major cities in Alberta due to strong ground-oriented completions.
Montreal recorded a slight decline but overall completions stayed close to the long‑term average. Completions softened in Ottawa, Toronto and Halifax for both ground-oriented and apartment homes, however all remained historically strong, CMHC said.
Despite some encouraging trends, particularly for the rental market, housing construction for the home ownership market weakened overall.
The agency said new supply in Canada last year was met with subdued demand, slower population growth and persistent cost pressures facing potential buyers.
Canada’s housing system also still faces pressures that threaten future supply and long‑term affordability, as condominium presales collapsed and unsold inventory surged. The report said these conditions made it difficult for developers to reach the presale thresholds needed for financing, putting future condominium supply at risk, especially in Toronto and Vancouver.
Slower activity in the condo market came amid double-digit increases of completed and unabsorbed inventory across the major markets, with the exception of Montreal. Vancouver had the highest unsold condo inventory at completion, while Edmonton had the highest ground-oriented inventory. Toronto saw strong increases in unsold condos and row homes.
“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 CMHC deputy chief economist Tania Bourassa-Ochoa in a press release.
“However, home ownership 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.”
The report also cited family-sized ownership housing supply as “vulnerable.” Ground-oriented starts remained well below historical averages in Toronto, Montreal, Vancouver and Ottawa.
Last year, CMHC released updated projections which said up to 4.8 million new homes will need to be built over the next decade to restore affordability levels last seen in 2019 based on projected demand.
The estimate would mean between 430,000 and 480,000 new housing units are needed per year across the ownership and rental markets by 2035.
