Canada is on pace to build fewer homes this year than last, a setback for federal housing targets that rely on doubling construction to ease the country’s affordability crisis, according to a new report from the Canada Mortgage and Housing Corporation.Blacklock's Reporter says in its Summer Update 2025 Housing Market Outlook, CMHC warned that new construction is slowing as developers face tight financing conditions and elevated building costs. Tariffs on steel, lumber and other materials continue to push up prices, leaving many builders hesitant to start projects.“We are now confident some level of tariffs will remain in the coming years,” wrote CMHC researchers. “The uncertainty and confusion around these policies has already weighed on business confidence and slowed spending.”.Housing starts totaled 245,367 units last year but are expected to decline to 237,833 this year — less than half of the 500,000 starts per year cabinet says are needed through 2030 to restore affordability.Meanwhile, rents continue to rise sharply. The average rent for a two-bedroom apartment is now $2,450 a month in Vancouver, $2,050 in Toronto, $1,960 in Ottawa, $1,918 in Calgary, $1,637 in Edmonton, and $1,255 in Montréal. Mortgage costs remain high despite modest policy rate cuts, offering little relief to would-be buyers.A 2024 briefing from the housing department said the typical Canadian household now spends 52% of income on shelter, up from 38% a decade ago. Middle-income families are increasingly stuck in rental housing, which worsens supply shortages and drives up rents further. Rental prices are rising by 8% a year on average — well above general inflation — while construction costs have surged 58% since 2020.“Middle income households across the country are finding it increasingly harder to buy homes,” the department wrote.
