The pace of multifamily housing construction starts in Canada’s two largest cities trended in opposite directions according to the latest Canada Mortgage and Housing Corp. data for July.
In Canada’s largest housing market, Toronto-area multifamily residential construction starts dropped massively in July year over year, while in Montreal, Canada’s second-largest city, rental multifamily construction starts increased dramatically during the same time.
In Toronto, the metropolitan area witnessed a 71% drop in the start of all housing projects outside of the single-detached category for the month, as totals collapsed from 5,021 in July of last year to a mere 1,461 for the month this year.
The decline comes at a time when the Toronto area needs 30,000 new homes and 20,000 apartment units to keep up with the rising population, according to a recent calculation by the Missing Middle Initiative. The Toronto metropolitan area added a net increase of almost 270,000 people in 2024, according to a study by Toronto Metropolitan University.
In contrast, Montreal registered a 237% increase in multifamily housing units in July from the same period a year ago, even as fewer people were added to the metropolitan area.
The new housing construction starts represent the highest increase of any large Canadian city. Unlike Toronto, where the pace of population growth has been torrid, Montreal's population has grown less quickly. The provincial government's Quebec Statistics Institute projects that the province will actually see a decrease of 80,000 residents over the next five years.
Vancouver, Canada’s third-largest city, saw a modest increase in multifamily housing starts, rising 5% in the month of July, compared to the same month in 2024.
Calgary and Edmonton combined to see almost 30,000 new housing construction projects launched in July, with Calgary’s total of 13,640 representing a 29% increase from the previous July and Edmonton’s 13,059 housing units newly under construction constituting a 40% jump.
Multifamily housing starts for the Ottawa-Gatineau area increased 49% for the month, year over year.
Other outliers include Fredericton in New Brunswick, where multifamily housing starts rose 412%, while Sudbury, Ontario, saw a rise of 200%. Abbotsford, British Columbia, along with Belleville and Brantford Ontario, all posted construction increases of between 150% to 178% during the month.
The biggest declines in multifamily housing starts in July were seen in Naimao, British Columbia, and Oshawa and Guelph, Ontario, towns that recorded declines of 83%, 73% and 72%, respectively.
Overall, the pace of construction in the multiunit category across Canada represents the highest monthly pace since September 2022, but it may be too early to celebrate, according to Kari Norman, an economist with financial services group Desjardins.
"There is a significant backlog of completed and unabsorbed multiunit residential still on the books. Investors in some large markets, seeing declining asking rents, may continue to wait on the sidelines, delaying developers’ abilities to break ground. The federal government’s tighter immigration targets risk flat or even negative population growth, cutting off much of the pipeline of new renters, and impacting the demand for purpose-built rental construction," Norman wrote in a post on LinkedIn.
Newfoundland and Labrador led provinces in multifamily housing starts in July with a rise of 60%, followed by Saskatchewan with 54% and Quebec with 41% and Alberta with 33%.