Weekly Real Estate News
Summary
CMHC reported a 248896 annualized pace for Canadian housing starts in September 2026, but actual starts in larger population centers fell 11 percent from a year earlier.
Canada’s homebuilders started more housing at an annualized pace in September, but the headline gain masked an 11% decline in actual starts from a year earlier. The contrast underscores the challenge of reading a volatile monthly construction series as a sign of a sustained recovery.
Canada Mortgage and Housing Corporation said Friday, October 16, that the seasonally adjusted annual rate of housing starts increased about 3% to 248,896 units from a revised 242,223 in August. Its six-month trend measure edged up 0.6% to 250,411 units, effectively flat. The figures are contained in CMHC’s October 16 release.
Actual starts in population centers of at least 10,000 were 19,984 during September, compared with 22,375 a year earlier. For January through September, starts totaled 170,964, down 4% from the same period in 2025. The year-over-year comparison points to an underlying slowdown despite the latest monthly annualized gain.
Construction pipeline is large, but deliveries are slowing
CMHC reported 371,617 units under construction in centers of at least 50,000 people, little changed from August. Completions fell 0.9% month over month to 17,398 units. Meanwhile, the number of permitted units not yet started rose 1.1% to 143,929.
These figures describe different stages of the development pipeline. A permit is not a construction start, and a construction start is not a completed home available for occupancy. Developers can hold permits while they seek financing, contractors or sufficient buyer and tenant demand. A large construction backlog also does not guarantee a steady stream of finished homes if projects are delayed.
CMHC said Quebec was the only one of Canada’s four most populous provinces showing modest year-to-date gains in housing starts. In the six-month trend among the three largest metropolitan areas, Montreal fell 8% in September, Vancouver rose 6% and Toronto was broadly flat. These are trend measures and should not be confused with each city’s raw monthly count.
Supply gap remains a long-term risk
CMHC has warned that slowing construction could undermine recent affordability gains. In its September Housing Supply Report, the federal housing agency estimated that Canada needs between 417,000 and 469,000 housing starts annually to restore affordability to pre-pandemic levels by 2036.
That is substantially above September’s 248,896 annualized pace. The comparison is useful as an indication of scale, but it is not a direct forecast of the final number of homes completed in 2026. The long-term target assumes a multiyear response to population, household formation and affordability pressures.
Construction finance adds another complication. Higher borrowing costs can simultaneously reduce buyer demand and make it harder for developers to finance projects. A softer resale market may therefore offer short-term negotiating room while contributing to a future shortage of new homes if developers curtail starts too sharply.
The latest numbers also arrive on the same day the Canadian Real Estate Association reported a 2.3% decline in September resale transactions. Those are separate series, but together they illustrate how higher financing costs are weighing on both sides of the housing market.
CMHC’s next monthly housing-starts release is scheduled for November 17. For builders, lenders and investors, the most revealing measures in the coming months will be sustained changes in the six-month trend, completions and the stock of permitted-but-unstarted projects, rather than one monthly annualized reading.
