Housing Starts in Canada Likely to Decline Further Into 2027: CMHC Report

Construction is seen on a 78-unit, four-storey building with affordable homes, in Toronto's Kensington Market, on Oct. 9, 2025. The Canadian Press/Chris Young

New housing construction is projected to remain subdued through the end of the year and into 2027, according to a new report by the Canada Mortgage and Housing Corporation (CMHC).

“Housing starts will continue to fall throughout the forecast period due to weak demand, high costs and elevated inventories,” the CMHC said in a July 22 report first covered by Blacklock’s Reporter.

The CMHC said housing prices are adjusting to weak housing demand and muted sales, which are weighing on new construction. It said housing starts will decline further through 2026 as “builders continue to respond to unsold inventories and high construction costs.”

The report said low construction levels will be more visible in Ontario and British Columbia, particularly when it comes to condominiums, while starts will also decline in the prairies and in Quebec.

Housing starts rose to 241,171 in 2025 from 227,697 in 2024, and the CMHC projects 241,000 starts in 2026, 223,400 in 2027, and 211,900 in 2028.

During the 2025 election campaign, the Liberals pledged to double Canada’s residential construction rate, targeting nearly  500,000 new homes per year over the next decade.

Since winning the election, the government has introduced several measures meant to spur new housing construction, such as launching Build Canada Homes, with $13 billion in federal funding over five years. The new agency has advanced six projects and partnerships aiming to deliver more affordable homes, with initial sites slated to provide up to 4,000 housing units.

A Parliamentary Budget Officer report released in December 2025 estimated that Build Canada Homes would create 26,000 housing units over five years. The report noted that 13,000 of the new housing units would be for low-income households.

Prime Minister Mark Carney said on July 20 that the passage of the Build Canada Homes Act was a “key milestone in the government’s plan to increase housing supply and make housing more affordable for Canadians.”

Conservative Leader Pierre Poilievre reacted to the CMHC’s latest projections on social media, saying it indicates the government’s housing policies aren’t working.

“Mark Carney had promised to double housing starts. Today, his own housing agency announces that this figure could drop by as much as 21% by 2028. It was all just an illusion,” he said on July 23.