CMHC forecasts national housing starts falling 6.8 percent to 241,400 units in 2026, from a historically high 259,028 in 2025, with the decline concentrated in Ontario's condominium apartment sector as preconstruction sales in the Toronto region have stalled. Rental apartment starts are holding up better, supported by government financing programs, though CMHC expects rental construction to also slow in the second half of 2026. For developers, a slowdown paired with development charge relief programs is historically the cheapest window to acquire land and complete entitlements ahead of the next cycle.
The 2026 construction slowdown is now in the data. CMHC's outlook has national housing starts falling 6.8 percent to 241,400 units from 2025's historically high 259,028, and the decline is not evenly spread: Ontario, and specifically the Toronto region's condominium sector, is the epicentre. Preconstruction condo sales have fallen sharply while thousands of units complete into a soft resale market, and builders are responding by pulling back on new launches.
| Indicator | Reading | Direction |
|---|---|---|
| National housing starts, 2025 | 259,028 units | Historically high |
| National forecast, 2026 | 241,400 units | Down 6.8 percent |
| Ontario condo apartment starts | Sharpest declines | Weak investor and presale demand |
| Rental apartment starts | Stabilizing at strong levels | Slowing in the second half of 2026 |
Two structural notes sit under the headline. First, the condo weakness is a demand-side story: the investor-driven presale model that financed a decade of Toronto high-rise construction has stalled, and projects cannot hit the presale thresholds construction lenders require. Second, the rental side is being held up deliberately, by CMHC financing programs and the federal-municipal deals that are converting stalled condo pipelines into rental starts.
Whatever the cycle is doing, entitlement work is what you control. PreBuildIQ maps any Ontario address to its approval path and required studies in 60 seconds.
Check my site →Housing starts are a lagging expression of decisions made two to four years earlier. The developers who launched into the strong 2021 market were the ones who did approvals through the quiet 2019 to 2020 window. The same logic applies now, with three additions that make this slowdown unusually favourable for pre-development work:
The one segment still starting at scale is purpose-built rental, and the policy support is explicit: the August 2026 federal-Toronto package alone committed up to $2.7 billion toward more than 5,600 rental homes, on top of Apartment Construction Loan Program financing that remains open across Ontario. CMHC does expect rental starts to slow in the second half of 2026 as vacancy rises and rent growth cools, but the program support gives rental projects a financing path that condo projects currently lack. For sites entitled for residential, the near-term question is usually not whether to build, but whether the pro forma works as rental under the incentive stack.
RBC and industry groups warn that today's falling starts become tomorrow's supply shortage, with completions dropping just as rate cuts and population growth restore demand. Developers holding entitled land at that inflection captured the best economics of the last two cycles. The entitlement work being done in 2026 is what determines who is holding it.
CMHC forecasts national housing starts falling 6.8 percent to 241,400 units in 2026, from 259,028 in 2025, which was a historically high year. The decline is concentrated in Ontario and British Columbia's condominium sectors, while the Prairies and Quebec are cooling from recent highs.
The investor-driven preconstruction sales model has stalled. Presale demand in the Toronto region has fallen sharply while thousands of completed units arrive into a soft resale market, so new projects cannot reach the presale thresholds construction lenders require. High development charges and construction costs compound the problem, which is what the 2026 DC relief programs target.
Less so. Rental apartment starts are stabilizing at strong levels, supported by CMHC's Apartment Construction Loan Program and packages like the August 2026 federal-Toronto deal funding more than 5,600 rental homes. CMHC does expect rental construction to slow in the second half of 2026 as vacancy rises and rent growth cools, but rental retains a financing path condos currently lack.
It is historically the best time to do the pre-development work. Approvals take one to three years, so entitlements completed during a slowdown position a project to start construction into the recovery. In 2026 the case is stronger than usual: development charge relief programs have defined end dates, agency queues are shorter, and entitled land commands a widening premium over raw land.
Forecasters including RBC warn that falling starts in 2025 and 2026 translate into a completions trough later in the decade, arriving as lower rates and population growth restore demand. That combination points to a renewed supply shortage, which is why developers and analysts describe current entitlement work as positioning for the next cycle.
PreBuildIQ maps any Ontario address to every approval body, required study, and cost driver in 60 seconds, so your site is entitled and ready when the cycle turns.
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