Toronto is on track to record its lowest number of annual housing starts in three decades, according to a new report from the Canada Mortgage and Housing Corporation (CMHC). The federal agency said housing construction activity in the city fell sharply in the first half of 2025, marking the lowest level since 1996 when measured on a per-capita basis. The downturn is largely driven by a steep decline in condominium construction, which dropped by nearly 60 percent compared to the same period last year.
CMHC data shows that weak investor demand has led to delays or cancellations of multiple planned developments, significantly impacting Toronto’s multi-unit housing pipeline. The slowdown in Toronto contrasts with generally flat national housing starts during the first half of 2025. Although cities such as Calgary, Edmonton, Montréal, Ottawa, and Halifax reported stable or improving construction activity, Canada’s two largest urban centers, Toronto and Vancouver, showed marked declines in new housing supply.
In Toronto, pre-construction sales volumes have fallen sharply, leading developers to scale back new project launches and defer land purchases. CMHC’s fall Housing Supply Report noted that Toronto’s housing starts are now running well below levels needed to meet population growth and demand. While purpose-built rental housing construction has shown relative strength, the agency highlighted that overall housing completions are being severely affected by reduced activity in the ownership segment.
Condominium developments, which typically account for a significant share of urban housing starts, have seen a sharp pullback due to rising financing and construction costs. The agency cited a combination of high development charges, labor shortages, supply chain constraints, and elevated interest rates as key factors limiting the feasibility of new projects. Developers have also faced challenges accessing financing, particularly for high-density developments, further suppressing new construction activity across the Greater Toronto Area.
Toronto condo construction drops nearly 60 percent
According to recent figures from Urbanation, unsold condominium inventory across the region reached over 24,000 units in the second quarter of 2025, the highest on record. Sales dropped 69 percent year-over-year during the same period. Only three projects launched pre-sales in Q2, while four were officially canceled. Since the beginning of 2024, a total of 25 projects comprising more than 4,400 units have been withdrawn from the market.
The decline in housing starts is expected to impact employment in the construction sector, which plays a critical role in the regional economy. While rental housing projects have partially offset the slowdown in condominium construction, the total volume of new housing supply remains below the levels required to address Toronto’s housing needs. CMHC emphasized that regional disparities are becoming more pronounced.
Toronto trails as Calgary, Edmonton show strength
In cities like Calgary and Edmonton, construction activity remains close to historical averages, bolstered by stronger fundamentals in rental demand and greater affordability. Meanwhile, in both Toronto and Vancouver, the contraction in homeownership-oriented construction is weighing heavily on national totals. The report did not provide projections for the remainder of the year but confirmed that, if current trends persist, Toronto’s 2025 housing starts will be the lowest in 30 years.
The data reflects ongoing structural challenges in the city’s housing market, including high project costs and lagging development timelines, which continue to constrain supply even amid sustained population growth. CMHC continues to monitor market conditions and will release further updates as year-end data becomes available. – By Content Syndication Services.