According to new data released January 16, 2026 by Canada Mortgage and Housing Corporation (CMHC), housing starts increased 5.6% year-over-year in 2025, reaching 259,028 units — the fifth-highest level on record.
On the surface, this sounds like good news.
Under the hood, it explains why affordability remains broken, why ownership supply is shrinking, and why private lending is becoming more important in 2026.
Housing Starts Are Up — But Ownership Housing Is Not
Yes, housing starts increased nationally. But what’s being built matters more than how much.
In 2025:
Over half of all new urban housing starts were rental units
Canada saw a second consecutive year of record rental construction
Smaller-scale projects replaced large condo towers
Ownership supply continued to lag household formation
This isn’t a boom for buyers — it’s a structural shift toward rentals.
The Regional Split Tells the Real Story
🔺 Growth Markets
Housing starts surged in:
Calgary & Edmonton (record annual starts)
Montréal (+58% year-over-year)
Ottawa–Gatineau (+12%)
These markets are benefiting from:
Population inflows
Lower land costs
More feasible mid-rise development
🔻 Canada’s Biggest Markets Are Pulling Back
At the same time:
Toronto housing starts fell 31%
Vancouver declined 3%
This matters because Toronto and Vancouver are:
Canada’s largest ownership markets
Heavily dependent on condo development
Most sensitive to financing, rates, and pre-sale risk
Large towers are no longer viable under today’s costs.
December Data: A Spike That Hides a Slowdown
December 2025 showed a 25% year-over-year jump in actual housing starts — the strongest December on record.
But CMHC’s six-month trend was flat, and economists are clear:
Most of the construction momentum happened in spring and summer.
Since September, housing starts have been trending lower.
In other words:
2026 is starting from a weaker construction position than the headline suggests.
Why Developers Are Shifting to Smaller Projects
CMHC points to several forces reshaping housing construction:
Higher interest rates
Tighter construction financing
Reduced viability of large residential towers
Economic and geopolitical uncertainty
The result?
Fewer mega-projects
More mid-rise, rental-focused builds
Slower delivery of ownership housing
This keeps pressure on resale prices, refinancing risk, and equity demand.
What This Means for Homeowners in 2026
When ownership supply lags:
Home prices stay sticky
Refinance risk increases
Equity becomes more valuable
Homeowners are increasingly using:
Private mortgages
Second mortgages
Equity-based refinances
Not because they want to — but because the traditional system isn’t keeping up with reality.
What This Means for Investors
For investors, the data reinforces a key trend:
Capital is flowing toward rental housing
Construction risk is rising
Private debt is playing a larger role in funding gaps
This is why mortgage notes and MIC investments remain attractive in a constrained supply environment.
The Big Takeaway: More Starts Doesn’t Mean More Relief
Canada didn’t solve its housing problem in 2025.
It changed its shape.
More rentals
Fewer ownership units
Slower large-scale development
Higher reliance on private capital
As CMHC prepares to release its updated Housing Market Outlook in February, one thing is already clear:
Housing supply is not catching up fast enough — and financing is becoming more fragmented.
Final Thought: Equity Still Wins in a Tight Supply Market
In a market where:
Ownership supply is limited
Construction is slowing
Banks are tightening
Equity becomes leverage.
For homeowners, investors, and developers alike, understanding where supply is going — and where financing is tightening — is critical in 2026.
Your equity deserves more™