August represented one of the weaker months this year for housing starts, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC). At the national level, the total monthly seasonally adjusted annual rate (SAAR) of starts fell 16% last month, compared to a 4% increase in July.
This marks the largest SAAR decline so far this year and puts the metric well below the six-month trend in housing starts, which increased 1.6% to 267,259 units in August. CMHC’s Deputy Chief Economist, Kevin Hughes, says this gap is notable. “If sustained, this adjustment in the level of housing starts would be consistent with both our forecast and current market intelligence indicating a slowdown in the pace of housing construction.”
Meanwhile, actual housing starts were up 10% year-over-year in centres with a population of 10,000 or greater at 18,408 units, compared to 16,775 units in August 2024, and year-to-date housing starts hit 156,283 units, up 4% from January-August 2024. But Hughes points out that much of the gains being made are the fruits of more ideal market conditions than what we are currently experiencing. “It is worth noting that current housing starts levels are generally reflective of decisions made when interest rates were receding and investor confidence was higher than it is today,” he says.
CMHC
According to CMHC’s Fall 2025 Housing Supply Report, combined housing starts for Canada’s seven key markets — Calgary, Edmonton, Montréal, Ottawa, Toronto, Vancouver, and Halifax — are expected to fall below 2024 levels in 2025 and a “slow and marginal rebound” is expected for these markets over the next two years.
The pace and scope of recovery will vary depending on region, however, with construction activity expected to remain well below historical levels in Toronto into 2026 and 2027. According to the Fall Report, Toronto is headed for its lowest level of housing starts in 30 years. Vancouver is in a similar, though less leaky boat, with starts expected to return to their ten-year average by 2027.
In Ontario and British Columbia, where builders have the lowest confidence, according to the Canadian Home Builders’ Housing Market Index, persistent barriers to increasing the housing supply include rising construction costs, high development charges, tariff-related disruptions, and limited municipal infrastructure, according to the report.
On the other end of the spectrum, Montreal’s recovery is already underway, with sustained momentum expected to continue, while Edmonton and Calgary should see record-high starts in 2025 with only some moderation expected in 2026.
In August, actual housing starts rose 46% year over year in Vancouver, Montreal saw a 32% increase, and Calgary saw a 21% increase. On the lower end last month, Edmonton housing starts fell 12%, Ottawa dropped 29%, and Toronto remained flat after falling 69% year-over-year in July.