Canadian Housing Construction Soars Amid Record-Breaking Years for Calgary, Edmonton, and More

Last year was a big one for Canadian housing starts, but despite booms in some urban areas, the pace of construction is far shy of federal targets.

By Josh Sherman | 5 minute read

Jan 26 2026

The Canada Mortgage and Housing Corporation uses housing starts, which are “defined as the beginning of construction work on a building,” to measure homebuilding activity.

Trades broke ground for nearly 260,000 new homes on Canadian soil last year, an increase of approximately 6% from 2024 and the fifth-highest annual total for national housing starts on record, according to a new report from the Canada Mortgage and Housing Corporation.

All-time highs in homebuilding in Calgary and Edmonton — as well as a staggering 58% year-over-year increase in Montreal and a 12% surge in Ottawa — contributed to the national increase.

Last year was also a record year for purpose-built rental construction overall, surpassing the previous high watermark in 2024. CMHC notes that rental units in urban areas accounted for a slight majority of all housing starts last year.

While year-end housing starts were elevated, CMHC’s chief economist and senior vice president of housing insights, Mathieu Laberge, notes that construction waned in the second half of the year. “[M]ost of the momentum in housing construction occurred in the Spring and Summer. Since September, the trend in housing starts has consistently decreased,” he says in the data release.

As of December, the six-month projection for housing starts was trending a tick below what was observed over the same period during the previous year. “In 2025, economic uncertainty and the diminished viability of large residential towers encouraged a shift towards smaller-scale projects,” Laberge continues.

Though 2025 was one of the most productive years on record for Canadian homebuilding, housing starts remain well below what the federal government says is needed to make a dent in the housing-affordability crisis.

Last year, CMHC stated that homebuilders needed to start work on anywhere from 430,000 to 480,000 new units per year to fill in the supply gap and return housing affordability to 2019 levels.

Though affordability challenges persist in many major markets, Calgary’s building boom has helped push the previously red-hot market into more balanced territory. In January, Calgary home prices were up just 2% compared to a year ago, according to the RPS-Wahi House Price Index. At the beginning of last year, the rate of growth was in the double digits.

“In 2025, the market transitioned from one that favoured the seller to more balanced conditions, as improving supply in the new home, rental and resale markets occurred just as demand returned to more typical levels,” writes Ann-Marie Lurie, chief economist of the Calgary Real Estate Board. “This took much of the pressure off home prices last year, especially in the apartment and row segments,” she continues in the news release for CREB’s 2026 Forecast Calgary and Region Yearly Outlook Report.

Lurie doesn’t anticipate that 2026 will be another record-breaking year for new home construction in Calgary. “[S]tarts are expected to ease this year,” she says.

Rishi Sondhi, an economist with TD Economics, agrees that the pace of homebuilding appears poised to cool down this year, citing factors such as immigration policy and Toronto’s recessionary condo segment. “Moving forward, we think that Canadian housing starts will moderate this year due to sharply slower population growth, rising vacancy rates across several regions, climbing unsold inventories, and weak pre-construction sales activity in the GTA market,” he writes in a response to the CMHC numbers.

If there is a bright spot on the horizon, it could be the federal government’s recently established Build Canada Homes program, Sondhi suggests. The initiative seeks to rapidly build affordable homes on federal lands using modular-construction techniques, which experts say are more efficient than traditional approaches to homebuilding.

Research from the University of Toronto’s School of Cities estimates modular construction can shave up to 25% off of homebuilding costs.