Don’t look now, but Toronto is leading Canada in new housing starts

Since 2022, the story of Toronto’s real estate market has been that condos are in the dumps and that attainable single-family homes are an endangered species. Pre-sales for condos have been in free fall, and both investors and developers have been sitting on their hands. But, despite all the real estate doom and gloom, it turns out that housing starts are rising modestly, with December of 2025 seeing a spike in growth, year-over-year, across Canada’s three biggest cities.

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The Canada Mortgage and Housing Corporation (CMHC) reports that for the last month of 2025, Montreal logged a 123 per cent spike, Vancouver a 17 per cent bump and Toronto took the prize for biggest increase in new construction with 151 per cent. But the gains weren’t found in tiny apartments or jumbo mansions, instead surfacing almost entirely in multi-unit buildings, with more than half of all urban housing starts being purpose-built rentals.

“The uptick is a mix of delayed projects finally breaking ground and a more meaningful recalibration of the market,” says Jake Cohen, president of the Daniels Corporation. “Some developers are taking a longer-term view, focusing on quality, execution and patience—so there’s fruition and renewed confidence in Toronto housing.”

Developers want the market to rebound, but the CMHC’s new data suggests that they’re not banking on condos thriving again any time soon. Instead, many are turning their attention to missing middle: gentle density such as multiplexes, walk-ups and low-rise apartment buildings.

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“Our company is treating the missing middle as a city-building challenge—not just a product category,” says Cohen. He adds that Daniels is also working closely with various municipalities to build larger units designed for multi-generational living, roommates and people who want to age in place.

Torontonians nevertheless have a long climb ahead. And while the short-term news is good, the city’s housing starts in 2025 actually fell by about one-third compared with 2024.

Building a durable missing middle is unglamorous work that requires a boatload of political will. We may not reap the rewards for a few years, but the CMHC’s study seems to suggest that closing the gap between single-family homes and shoebox flats is viable.