Canada Mortgage and Housing Corp. reported on Jan. 16, 2026, that housing starts rose 5.6% in 2025 to 259,028, the fifth-highest annual total on record, driven by a second straight year of record rental construction. CMHC’s chief economist said the increase was welcome but still “far from the target” for restoring affordability.
A strong year, by recent standards
Starts climbed from 245,367 in 2024, CMHC said. In centres of 10,000 people or more, actual starts rose 6% to 241,171. Purpose-built rental construction set a record for the second consecutive year and accounted for just over half of all starts in urban centres — a shift experts have long urged in a market dominated by condominiums and single-detached homes.
The year finished strongly. December’s seasonally adjusted annual rate of starts jumped 11% from November to 282,439 units, and actual December starts in larger centres hit 20,716, up 25% from a year earlier and the most ever recorded for the month, led by Ontario’s highest monthly total of 2025. The six-month trend measure, however, was essentially flat at 264,428.
A country building at two speeds
Canada’s six largest metropolitan areas together posted a 3.9% increase, but the gains were concentrated. Calgary and Edmonton set record annual starts, Montreal jumped 58% and Ottawa-Gatineau rose 12%. Those results outweighed steep declines in the two most expensive markets: Toronto starts fell 31% and Vancouver’s fell 3%.
Mathieu Laberge, CMHC’s chief economist and senior vice-president of housing economics and insights, said building momentum peaked in the spring and early summer of 2025 before dipping later in the year. “It will take time. This is a long-term process to get to the point where we can see that,” he said. “It’s a milestone in getting to the right point, but we’re not there yet.”
The gap the headline hides
The reason for CMHC’s caution is its own math. In June 2025, the agency projected that up to 4.8 million new homes need to be built over the next decade to restore affordability to 2019 levels — between 430,000 and 480,000 homes a year through 2035, across rental and ownership markets.
Measured against that requirement, 259,028 starts is barely more than half the annual pace needed. Even the fifth-best construction year on record, powered by record rental building and a surge in the Prairies and Montreal, leaves Canada adding homes at roughly 55% of the rate its own housing agency says affordability demands — and its two largest, priciest cities moved backwards.
Why it matters for 2026
The regional split is the story to watch. Alberta’s record building and Montreal’s surge show what faster approvals and rental economics can deliver, while Toronto’s 31% drop reflects a collapsed condominium market that was previously the country’s biggest source of new supply. CMHC has signalled starts could soften in 2026 as purpose-built rental projects in the pipeline are completed. If the national total falls while the affordability target stays fixed, the annual shortfall — already roughly 180,000 homes — grows wider, and the decade-long climb back to 2019 affordability gets steeper.
