Toronto needs significantly more housing in the years ahead, but the latest construction numbers are moving in the opposite direction.
New data from the Canada Mortgage and Housing Corporation shows housing starts across the Toronto area fell 10% year-over-year in July 2026, driven by a decline in multi-unit construction.
A total of 1,540 homes started construction in the Toronto CMA during July, compared with 1,720 during the same month last year.
The decline comes as CMHC warns that fewer new projects are beginning construction in several major Canadian markets, including Toronto, and that housing starts are likely to remain subdued over the coming months.
For a city already dealing with a dramatic slowdown in condominium development, the latest numbers raise another question about how much new housing Toronto will actually have available several years from now.
Toronto Housing Starts Fell 10% In July
According to CMHC’s August 18 housing-starts report, 1,540 homes broke ground across the Toronto Census Metropolitan Area in July 2026.
That was down from 1,720 starts in July 2025, representing a 10% annual decline.
But the decline wasn’t spread evenly across every type of housing.
Toronto recorded:
- 278 single-detached housing starts, up 7% from 259 last July
- 1,262 multi-unit starts, down 14% from 1,461
- 1,540 total starts, down 10% year-over-year
That means the overall decline was driven entirely by multi-unit housing, a category that includes apartments, condos, townhouses and other higher-density housing.
And because multi-unit projects account for the vast majority of new homes being built in the Toronto area, a slowdown in that category can have an outsized impact on future housing supply.
CMHC Says Fewer Toronto Projects Are Starting
The slowdown isn’t just visible in one monthly percentage.
CMHC Deputy Chief Economist Tania Bourassa-Ochoa said July’s data shows that new-home construction is continuing to moderate across Canada.
CMHC specifically identified Toronto, Vancouver and Calgary as markets where fewer new projects are being started.
The agency also said the recent slowdown suggests housing starts are likely to remain subdued in the coming months as developers continue facing challenges getting new projects to the construction stage.
That is particularly important in Toronto, where large apartment and condominium developments can take years to move from planning and presales to actual construction.
A slowdown today can therefore affect how many homes become available several years from now.
Ontario Housing Starts Fell Even More Sharply In July
The slowdown wasn’t limited to Toronto.
Across Ontario’s urban centres with populations of at least 10,000, 4,641 homes started construction in July, down 26% from 6,296 starts in July 2025.
Again, multi-unit construction was responsible for most of the decline.
Ontario recorded:
- 1,111 single-detached starts, up 20% annually
- 3,530 other housing starts, down 34%
- 4,641 total starts, down 26%
The data shows an interesting divide emerging in Ontario construction.
Single-detached construction was actually stronger than last year during July, while higher-density housing construction dropped sharply.
That matters because apartments and other multi-unit developments are increasingly relied upon to add large numbers of homes in expensive urban markets where land is limited.
Canada Just Saw A 19% Drop In Monthly Housing Starts
The weakness was also visible nationally.
Actual housing starts in Canadian centres with populations of 10,000 or more fell 19% year-over-year in July, with 18,834 homes starting construction compared with 23,155 one year earlier.
Meanwhile, Canada’s seasonally adjusted annual rate of housing starts fell 5% from June to July, dropping from 240,773 to 229,074 units.
CMHC’s six-month trend measure was more stable, declining just 0.5% to approximately 247,377 units.
Among Canada’s three largest metropolitan areas, the differences were significant.
Toronto starts fell 10%, Vancouver experienced a 42% decline, while Montréal recorded a 3% increase from July 2025.
But There Is An Important Catch In The Toronto Numbers
One month doesn’t tell the entire story.
Despite the 10% decline in July, Toronto housing starts for the first seven months of 2026 are actually slightly higher than they were during the same period last year.
Between January and July, Toronto recorded 14,765 housing starts, up 3% from 14,295 during the first seven months of 2025.
The composition of those starts changed considerably.
Single-detached starts fell 21% year-over-year, from 1,724 to 1,355 units.
All other housing types increased 7%, reaching 13,410 starts.
Ontario as a whole also recorded 35,941 starts between January and July, up 7% from the same period last year.
So the July decline does not mean overall 2026 construction has already fallen below last year’s level.
Instead, it may be an early indication of the slowdown CMHC has been warning could become more visible as fewer new projects move forward.
Toronto Was Already Building Below Historical Levels
Toronto’s construction challenges didn’t begin in July.
CMHC’s Spring 2026 Housing Supply Report found that Toronto was the notable exception among Canada’s major housing markets in 2025, with construction activity falling well below historical norms.
Toronto recorded 18,986 apartment housing starts in 2025, compared with a 10-year average of 26,856.
Ground-oriented construction was also considerably below normal.
Toronto recorded 7,101 ground-oriented starts in 2025 compared with a 10-year average of 11,760.
CMHC said Toronto had the lowest per-capita level of housing starts among Canada’s seven largest census metropolitan areas in 2025.
That makes the latest decline more significant than a single weak month might otherwise suggest.
Toronto’s Condo Slowdown Is A Major Part Of The Story
One of the biggest pressures on Toronto construction is the collapse in the pre-construction condominium market.
CMHC says condominium starts have fallen sharply as presales declined, investors pulled back and development costs remained high.
Developers often need to sell a significant portion of a condo project before lenders will provide construction financing.
When those presales don’t happen, projects can be delayed or cancelled before construction ever begins.
CMHC warned in its Spring 2026 report that weaker condominium presales and tighter financing conditions are threatening the future pipeline of ownership housing, particularly in Toronto and Vancouver.
The agency also noted that when completed condos remain unsold, lenders can become more cautious about financing additional projects, further slowing future construction.
Toronto Still Has More Than 92,000 Homes Under Construction
The immediate supply picture isn’t entirely negative.
Toronto still had 92,749 housing units under construction in July, roughly unchanged from June.
Another 17,878 units had approved building permits but had not yet begun construction, up 5.2% from the previous month.
That means Toronto still has a substantial pipeline of homes at various stages of development.
There were also 1,009 housing completions in July, although that was down 24.1% from June.
CMHC says the large number of homes already under construction should continue producing new completions and adding supply in the near term.
The bigger concern is what happens after today’s construction pipeline is completed if not enough new projects are starting behind it.
Why Falling Housing Starts Matter
Housing starts aren’t the same thing as homes available for sale tomorrow.
A housing start is recorded when construction actually begins, and large apartment buildings can take several years to complete.
That means today’s housing-start numbers are better understood as an indicator of future supply.
A decline in starts doesn’t immediately create a housing shortage.
But if construction remains weak for an extended period, fewer new homes eventually reach the market.
CMHC has repeatedly warned that today’s relatively high number of completed or under-construction units can hide weaknesses further down the development pipeline.
That distinction is especially important in Toronto.
The city may still be completing projects that were sold and financed years ago, even as far fewer projects are successfully reaching the construction stage today.
Toronto Needs More Homes, Not Fewer
The latest CMHC numbers present a complicated picture.
Toronto still has tens of thousands of homes under construction.
Year-to-date housing starts remain slightly above 2025 levels.
And rental construction has remained relatively strong compared with other segments of the market.
But the direction of new project activity is becoming increasingly concerning.
Toronto housing starts fell 10% year-over-year in July, multi-unit starts declined 14%, and CMHC is explicitly warning that fewer new projects are getting underway.
Combined with weak condo presales and a shrinking development pipeline, that could eventually leave Toronto with considerably fewer homes being completed several years from now.
For a region where housing affordability has been one of the defining issues of the past decade, building fewer homes isn’t exactly the direction policymakers have been hoping to see.
References
Canada Mortgage and Housing Corporation (CMHC), “Housing starts and construction data for July 2026,” August 18, 2026.
Includes July housing starts for Toronto, Ontario and Canada, housing under construction, completions and CMHC’s outlook for new project activity.
CMHC July 2026 Housing Starts and Construction Data
Canada Mortgage and Housing Corporation (CMHC), “Spring 2026 Housing Supply Report.”
Includes historical comparisons for Toronto construction, condo-development pressures and analysis of future housing-supply risks.
CMHC Spring 2026 Housing Supply Report
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