Housing starts stall as CMHC warns affordability gains at risk

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OTTAWA — Slowdowns in new home construction are stalling recent positive movement in the affordability of housing, warns Canada’s national housing agency.

Numbers released on Friday by the Canada Mortgage and Housing Corporation (CMHC) peg the six-month moving average of Canadian housing starts rose just 0.6% last month, which translates to 250,411 units.

But actual monthly urban housing starts fell 11% year-over-year last month, falling to just 19,984 units compared to 22,375 recorded the at same time last year, with year-to-date actual starts decreasing by 4% across Canada.

Canada still facing long-term housing gaps

This report comes just days after Royal LePage’s third-quarter 2026 Home Price Update and Market Forecast painted a grim picture of housing prices, putting national median prices of single-family detached homes decreasing 0.5% year over year to $856,500, while median condo prices likewise fell 1.5% to $571,900.

Aled ab Iorwerth, the corporation’s deputy chief economist, warned that slowdowns during the current market softening threaten Canada’s long-term housing supply.

“A key risk for Canada now is not building enough during this period of softening housing markets across the country,” he said.

“Of Canada’s four most populous provinces, only Quebec has seen modest gains in housing starts for 2026 and each of the seven major centres covered in the HSR (Housing Supply Report) are behind 2025’s pace for new home construction.”

Canada, he says, still faces long-term housing supply gaps, and that maintaining housing affordability trends won’t be sustainable.

The monthly seasonally adjusted annual rate (SAAR) of housing starts across Canada increased 3% month-over-month to 248,896 units in September, trending upwards from 242,223 the month prior.

Broken down by Canada’s three largest urban areas, Montreal recorded an 8% month-to-month decrease over the past six months, which the CMHC says was driven largely by lower multi-unit starts.

Vancouver saw a 6% increase due to higher multi-unit starts, while Toronto remained flat as trends for single-detached and multi-unit starts cancelled each other out. 

bpassifiume@postmedia.com
X: @bryanpassifiume

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