Canada Housing Market

Toronto’s condo construction slowdown has reached a dramatic new level, with just 156 condominium units started in the City of Toronto during the first half of 2026.

According to the Canada Mortgage and Housing Corporation’s latest Housing Supply Report, that is a massive drop compared with the previous decade, when the city averaged roughly 7,000 new condo starts per year.

CMHC says weak presales, reduced investor demand and a large supply of condos already available on the resale market have contributed to the collapse in new condominium construction.

The slowdown comes as Toronto is already facing concerns about how many homes will be available several years from now.

Only 156 Toronto Condo Units Were Started In Six Months

The scale of the slowdown becomes clearer when compared with Toronto’s recent history.

CMHC says the City of Toronto saw only 156 condominium units begin construction during the first half of 2026.

Over the previous 10 years, the city averaged approximately 7,000 condo starts annually.

While those figures cover different time periods, even doubling the 2026 first-half total would leave construction nowhere close to the pace seen over the previous decade.

CMHC described new condominium apartment construction as having “collapsed,” pointing to weak presales, poor investor demand and elevated resale supply.

Toronto’s condo market has traditionally relied heavily on investors purchasing units before construction begins.

When presales slow, it can become much harder for developers to secure financing and move projects into construction.

Toronto Housing Starts Are Near Historic Lows

The slowdown is not limited to condos.

CMHC says Toronto’s population-adjusted housing starts during the first half of 2026 were at their lowest level since 1996, excluding 2025.

The number of permitted housing units waiting to begin construction has also fallen sharply.

CMHC says that pipeline is now 50% below its 2023 peak.

Condo project launches have largely stalled, while construction of ground-oriented freehold homes has fallen to record lows following more than two decades of decline.

That means both of Toronto’s major forms of new ownership housing are experiencing significant weakness.

Toronto Is Building More Rentals Instead

There is one area of Toronto construction that is moving in the opposite direction.

Purpose-built rental apartment starts increased 82% in the first half of 2026 compared with 2025.

It was the only major housing category where starts increased.

In fact, rental apartment starts surpassed condominium apartment starts for the first time since 1994.

CMHC says government financing programs, municipal incentives and the conversion of some proposed condo developments into rental projects have helped fuel the increase.

The shift represents a major change for a housing market that has relied heavily on investor-owned condos to provide both ownership housing and rental units.

Toronto Still Needs To Build At Least 50% More Homes

Despite weaker home prices improving affordability somewhat, CMHC says Toronto still is not building nearly enough housing for long-term affordability.

The agency estimates Toronto needs to increase its current annual pace of housing starts by at least 50% over the next decade to restore affordability to 2019 levels.

That means the region needs approximately 21,000 to 26,000 additional housing starts every year.

CMHC cautions that Toronto’s recent affordability improvements have largely come from softer housing market conditions, including falling prices and slower rent growth.

Without significantly more housing construction, those improvements may not last.

Fewer Condos Today Could Mean Less Housing In The Future

The condo construction slowdown may not have an immediate effect on Toronto’s resale market because there are still projects currently being completed and relatively high levels of resale inventory.

The bigger concern is what happens several years from now.

Large condo buildings can take years to move from presales to construction and eventually completion.

That means an extremely low number of projects beginning construction today could result in significantly fewer new units becoming available later this decade.

Condos also play an important role in Toronto’s rental market.

Many condo units are purchased by investors and rented to tenants, creating what is known as the secondary rental market.

CMHC warns that fewer condo completions in the coming years could reduce that source of rental supply and potentially put renewed pressure on rents and vacancy rates.

Toronto’s Condo Market Has Changed Dramatically

Toronto’s housing market looks very different from the environment seen just a few years ago.

Higher borrowing costs, weaker investor demand, declining resale condo prices and a larger number of units available for sale have made buying pre-construction condos less attractive for many investors.

That has made it increasingly difficult for developers to reach the presale levels required to begin construction.

For buyers today, greater resale supply and softer prices may provide more options.

But for Toronto’s housing supply several years from now, the collapse in new condo construction presents a much different problem.

With only 156 condo units started in the City of Toronto during the first six months of 2026, the pipeline of future ownership housing is becoming significantly smaller at a time when CMHC says the region ultimately needs to build much more.

References

Canada Mortgage and Housing Corporation, Fall 2026 Housing Supply Report, published September 10, 2026

Canada Mortgage and Housing Corporation, Slowing Home Construction Threatens Recent Affordability Gains, published September 10, 2026