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Toronto’s Longstanding Dominance

It has been reliably easy for years, maybe even decades, to call TorontoÌýthe hottest new housing market among all cities in Canada. TO’s usual dominance has been such that its unit-starts number annually has often been close to those of the second and third place performers added together.

TO’s numerical strength has originated in the multi-family market, particularly condominium tower work, more than in the single-family component, explaining why Toronto has consistently led all Canadian and U.S. cities in construction crane count statistics.

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2025: A Year of Surprises in Housing Starts

Presently, though, through 2025 to date, these supposed truisms no longer have validity. There are some new champions among Canadian cities, according to the housing starts numbers published by Canada Mortgage and Housing Corporation (CMHC).

Among Canada’s six biggest urban areas, and the only ones with populations of a million or more each, the leader for year-to-date (January-August 2025) total housing starts, in units, is Calgary, with 18,632. In second spot lies Vancouver, 18,405 units; in third, Montreal, 16,721 units. Sitting in a far-back position never visited before, at least not in recent memory, is Toronto with 16,451 units. Completing the Top 6 are Edmonton, 14,701 units, and Ottawa-Gatineau, 8,416 units.

On a year-to-date percentage-change basis, the frontrunner is Montreal (+47%), followed by Ottawa-Gatineau (+32%), Edmonton (+23%), and Calgary (+22%). Vancouver is essentially flat (-1%). Toronto (-47%), in shocking fashion, is posting a total-units starts number that is only about half what it was at this time last year.

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Multi-Unit Trends and Market Dynamics

Multis as a percentage of total unit starts in Toronto can often reach 90%. This year to date, they have dropped a little below that standard, to 87%. But the truly eye-catching figure is that on a year-to-date basis, they are -47%. The demand for new condominiums among potential buyers in TO has dried up dramatically.

The drop-off in multi-unit starts has been mainly confined to Toronto. Vancouver multi-unit starts have been lackluster versus the first eight months of last year, at no change (0%), but Calgary has seen an increase in multi-unit starts of +30%, Edmonton, +32%; Ottawa-Gatineau, +39%; and Montreal, +49%.

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National Perspective and Government Response

In a historical context, Canadian housing starts are not underachieving to the degree perhaps being conveyed by the media. The problem, though, is that the enormous population increases of the past several years have pointed to the need for a great many more groundbreakings annually than have been necessary in the past.

The federal government has launched a ‘Build Canada Homes’ initiative to make more public lands available for housing. The Mark Carney Liberals are also placing considerable reliance on incentives forÌýto help bump up the numbers on the supply side.

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Provincial and Municipal Reforms

Provinces and municipalities are taking steps to reduce regulations and provide tax breaks to homebuilders, through such measures as standardizing building codes and delaying development charges until occupancy, as set out in Ontario’s Bill 17, the Building Faster and Smarter Act.

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The Toronto Market Slowdown

Plus, there is the reality that demand in the short term, at least in the Toronto multi-unit marketplace, has become disturbingly and disappointingly sub-normal.

Super high prices have been a demand-blunting factor through knee-capping affordability. However, on a positive note, the Bank of Canada has been mildly aggressive in lowering interest rates to 2.5% for its key policy-setting overnight rate. The equivalentÌýÌýis expressed as a range, and it is notably higher at 4.00% to 4.25%.

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Economic Headwinds and Regional Impacts

A chief obstacle to new housing demand being cited at this time is the uncertainty created by the prohibitive and unstable tariff regime newly established in the trading relationship between the U.S. and Canada. Ontario, which is Canada’s industrial heartland, is experiencing anÌýinhibited by its neighbor’s sharp tariffs on steel and the auto sector. Many domestic workers well know that their jobs are in jeopardy, a factor not conducive to making a new home purchase.

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Alberta’s Advantage

ButÌýproducts are still being allowed to flow restriction-free south across the border, and that’s terrific news for Alberta’s economy and, as is apparent from the province’s +21% year-to-date gain in total unit starts, for its housing sector.

A note for U.S. readers:ÌýAmerica’s townhouse numbers are generally included among single-family statistics, unless several such units share one HVAC system. Then they are included among multis. In Canada, all townhouses are categorized as multi-unit residential statistics.

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