Housing start data remained strong in 2025 and early 2026, even as condo sales hit record lows and project cancellations surged, raising questions about how accurately the metric reflects current conditions.
The Canada Mortgage and Housing Corporation (CMHC) reported a 5.6% increase in housing starts in 2025, totalling about 260,000 units. Housing starts also increased 4.5% in February this year after slipping 15% in January.
Last year, however, also marked the worst year for the GTHA’s new condo market since 1991, with sales plunging 95% from their 2021 peak and prompting the cancellation of 7,243 new condo units.
“There’s nothing wrong with the [housing starts] metric itself, but it gets used — particularly by the CMHC — as a leading indicator of the health of the housing construction market, but the way we measure housing starts in Canada is unusual,” says Mike Moffatt, the founding director of the University of Ottawa’s Missing Middle Initiative.
Moffatt explains that CMHC includes units as a new housing start once the foundation has been laid, which is inconsistent with other developed countries like the United States, United Kingdom and Australia, who count a housing start when excavation begins.
The discrepancy also creates a lag among larger buildings, as excavation can take months or years, thus pushing back the project’s inclusion in the housing starts metric.
“Over the last 20 years, we’ve moved to doing more high rises, and particularly high rises with underground parking garages,” Moffatt says. “CMHC doesn’t count something as a housing start until often 18 months or more after the shovel goes into the ground, and it could be two years from when the developer or investor made the go- or no-go decision, so it doesn’t really work well as a leading indicator of activity.”
Moffatt argues that last year’s strong housing starts data is more indicative of financing conditions in 2022 and 2023 than the current reality.
Though he doesn’t believe CMHC should abandon the housing starts metric, as the existing database of housing starts provides a strong historical comparison, Moffatt would like to see CMHC add other indicators that might offer a more up-to-date or holistic view.
“The obvious place to start is basically when the shovels go into the ground, which gives you a better, real-time indicator of how things are going,” he says. “Another thing I would love to see that CMHC doesn’t do is housing starts by number of bedrooms.”
Reading beyond the headlines
Canadian market watchers were presented with similarly deceptive data at the end of last year, when Statistics Canada reported stronger than expected employment figures. Those who looked beyond the headlines, however, saw an economy shedding full-time jobs and replacing them with part-time work, thus keeping total employment high despite weakening labour market conditions. Now some are seeing the same pattern in housing starts data.
“A housing start is a housing start, whether it’s a rental or ownership home, just like a job is a job, be it part-time or full-time,” explains Bruno Valko, the vice-president of national sales for RMG Mortgages. “Now, instead of talking about full-time jobs and part-time jobs, we’re talking about rental construction and homeownership construction.”
Valko explains that if you similarly dig into the housing starts data, you’ll see a market that is shedding condos and single-family homes and replacing them with more purpose-built rentals. “Alberta seems to be balanced, but [construction in] Montreal, Toronto, even Ottawa seems to be dominated by rental units.”
Valko believes that a more important indicator of future housing supply is the construction of multi-bedroom ownership properties, often labelled the “Missing Middle,” in reference to their undersupply in Canada. “That missing middle home ownership housing, in my opinion, is what we need to focus more on, because homeownership builds family wealth,” he says.
That mismatch between strong housing starts data and weak market conditions could send the wrong message about the future supply of family homes available for purchase, Valko says. “We want that affordability to be there, and if our supply today for homeownership is weakening, that doesn’t bode well for future supply and affordability down the road.”
Why CMHC counts housing starts this way
CMHC counts housing starts from the moment the foundation is laid because that is the earliest point at which there is a very high probability that the project will reach completion, according to its deputy chief economist Kevin Hughes.
“When you see the foundation being completed, that means that the company has already engaged labour, and there will be even more [construction work] to come,” he says. “Even for a small company, when we record that the foundation has been laid, it’s like we know that this now will go to completion.”
Hughes concedes that from a certain vantage point the housing starts number could be a lagging indicator, but emphasizes that the data is looked at from many angles.
“It could be a lagging indicator of financial conditions currently, as opposed to when the decision to go ahead with the project was made,” he says. “If you were in another industry, and you’re looking at labour market conditions going forward, then this is not a question for you, so it depends on the user.”
Depending on your perspective, housing starts could tell a story of the past, present, or future, Hughes explains. While it benchmarks development project financing decisions made years ago it also communicates immediate construction labour demands and future housing supply.
“The users of such a survey — just like the users of the Labour Force Survey from Statistics Canada — are numerous, and they come from all sorts of backgrounds,” he says. “This survey, when the results are updated, are used by municipalities, by researchers, by people in business, to put in their spreadsheets and into their modelling to get an update on what’s going on in terms of different variables.”
What it means for the market
When CMHC publishes its housing starts data, it also provides a range of additional metrics, breaking down the data between cities, provinces, metros and rural areas, as well as by housing type.
The monthly report also provides actual totals alongside six-month rolling averages, annual forecasts and seasonally adjusted annual rates.
“We recently introduced ‘pending building permits,’ which is a measure of units for which there is a building permit, but the start hasn’t yet occurred,” Hughes says. “If someone asked us, ‘would you like to have a central registry of board decisions where everybody let CMHC know that they’re ready to move on a project?’ We would love to have that information, but it’s not available, so we go with the first thing that is available, which is building permits.”
Hughes emphasizes that CMHC shares as much data it can to provide a wide range of stakeholders a wide range of insights related to new home construction. Often, the answer they’re looking for is available within the dataset; they just need to look beyond the headline.
“What we will stand by is that the starts information — even with its definition and what it may or may not capture in the instant — is definitely an important piece of data,” he says. “It’s used by Statistics Canada to calculate the national economic accounts; there’s confidentiality around it for market moving reasons — it’s a very protected number — so it is undoubtedly an important part of macroeconomic conditions. The important thing to know is exactly what we mean by it.”
Visited 1 times, 1 visit(s) today
Bruno Valko CMHC cmhc housing starts economic data homebuilding housing data housing starts housing supply Kevin Hughes Mike Moffatt Missing Middle Initiative statistics canada
Last modified: April 1, 2026
