Housing Supply Gains Amid Weak Demand
Canada’s housing supply made “meaningful” gains in 2025, thanks to record rental construction and a push for “missing middle” housing reported. Despite these advances, short-term imbalances persist, particularly in high-demand urban centers indicated. The presale condo market is described as “collapsing,” suggesting new supply may not be tailored to actual buyer needs claimed.
Rental construction drove Canada's housing starts up 6% in 2025, with record activity in Calgary, Edmonton, Ottawa, Halifax, and Montreal. Toronto saw its second-highest level of rental construction ever. For the first time this century, rental starts exceeded condo starts in the City of Toronto. The "missing middle" housing segment, including low-rise apartments and townhouses, also saw a boost, rising about 10% across major cities. Calgary and Edmonton led in this category, with roughly 60% of new starts being missing middle housing. Toronto followed, with approximately half of its new starts in this category, many being conversions of existing buildings. However, the condo presale market is struggling, particularly in Toronto and Vancouver, leading to project delays and cancellations. In the GTA, 28 projects (7,200 units) were cancelled in 2025. This is due to tighter financing conditions for developers and weaker buyer demand. This shift has resulted in developers pivoting to rental projects, which could lead to fewer ownership options in the future. In Montreal, rental construction accounted for over 80% of 2025 starts, while condo starts hit a record low. Overall, the average price of a condo in the GTA in 2025 dropped by 5.1 per cent to $691,308.
