Canada’s Homebuilding Slows Even as Buyers Return to the Market
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Canada’s pace of new home construction weakened in July even as national home sales continued their gradual recovery, highlighting a gap between improving buyer activity and the pace at which new housing supply is reaching the market. Canada Mortgage and Housing Corporation CMHC reported that the seasonally adjusted annual rate of housing starts fell 5% to 229,074 units, from 240,773 in June.
The decline was sharper on a year-over-year basis. Actual housing starts in centres with populations of at least 10,000 fell 19%, with 18,834 units started in July 2026 compared with 23,155 in July 2025. Year-to-date starts were also 4% lower than during the same period last year.
Among Canada’s largest housing markets, Vancouver recorded a 42% year-over-year decline in starts, driven by fewer multi-unit and single-detached projects, while Toronto fell 10%, mainly because of weaker multi-unit construction. Montreal, by contrast, recorded a 3% increase.
There was some positive news for homes reaching completion. Construction was completed on 19,773 units in July, up 8.1% from June, in centres with populations of 50,000 or more. The number of permitted units that had not yet begun construction also rose 3% to 141,480.
The construction slowdown comes as Canada’s resale market continues to improve. The Canadian Real Estate Association CREA reported that national home sales increased 0.5% month-over-month in July, marking a fourth consecutive monthly increase, while the MLS Home Price Index edged up just 0.1%.
CMHC said fewer new projects are being launched in several major markets, particularly Vancouver, Calgary and Toronto, and expects housing starts to remain subdued over the coming months. However, the large number of homes already under construction should continue to support completions and add new supply.
