Housing starts fell across Canada for a second straight month in August, but in Calgary and Vancouver, two of the markets where home sales and prices have fallen furthest this year, builders broke ground on more homes, not fewer, according to Canada Mortgage and Housing Corporation data released Sept. 16.
CMHC’s August figures put the seasonally adjusted annual rate of housing starts nationally at 229,046 units, essentially flat from July’s 229,360 but part of a slide that has pulled year-to-date starts in centres of 10,000 people or more down to 149,542 units for January through August, a 4 per cent drop from 155,658 over the same period in 2025. “Housing starts continued to trend slightly down in August, as modest gains in Quebec and Alberta only partially offset the decline in other provinces, most notably, Ontario,” said Kevin Hughes, CMHC’s deputy chief economist.
That national number hides sharp regional swings. CMHC’s six-month moving average of starts was up 7 per cent in Calgary and 6 per cent in both Vancouver and Montreal, even as Toronto held flat and Ottawa-Gatineau starts fell 2 per cent.
Calgary and Vancouver are also two of the cities where local real estate boards are reporting some of the steepest sales and price declines in the country. The Calgary Real Estate Board recorded 1,660 sales in August, down 16 per cent from a year earlier, with the benchmark price down 1 per cent to $569,800. New listings fell nearly 10 per cent, but the market still carries close to four months of supply overall and nearly six months for apartment-style homes, CREB data show. “Favourable rental conditions are slowing the transition to ownership” at the lower end of the market, said CREB chief economist Ann-Marie Lurie, even as buyers with “longer-term confidence in our market” pushed sales higher for homes over $1 million.
In Metro Vancouver, Greater Vancouver Realtors reported 1,869 residential sales in August, down 4.6 per cent year over year and 20.7 per cent below the region’s 10-year seasonal average for the month. The composite benchmark price fell 5.6 per cent to $1,081,900, with detached homes down 7.2 per cent to $1,799,400. Active listings climbed to 15,798, up 26.2 per cent from the 10-year average, pushing the sales-to-active-listings ratio down to 12.3 per cent, a level realtors generally consider a buyer’s market. “The soft August sales data suggest the modest downward revisions we recently made to our 2026 forecast were a timely and prudent decision,” said GVR chief economist Andrew Lis.
Nationally, the picture is only somewhat less lopsided. The Canadian Real Estate Association reported Sept. 15 that home sales fell 6.9 per cent year over year in August to their weakest level for the month since 2012, even as the national average price of $668,219 was still up 0.6 per cent from a year earlier, a gain CREA senior economist Shaun Cathcart tied to a shift in the mix of homes selling rather than genuine price growth. The MLS Home Price Index, which adjusts for that mix, was down 3 per cent year over year. The sales-to-new-listings ratio slipped to 49.1 per cent from 51.1 per cent in July, with 4.8 months of inventory on the market, unchanged for a fourth straight month. CREA chair Garry Bhaura called the August rise in new listings “broad based across all the largest markets,” as sellers looked “to get an early start to the fall market.”
None of this is being offset by cheaper borrowing. The Bank of Canada held its overnight rate at 2.25 per cent on Sept. 2 for a seventh consecutive decision, citing high energy prices tied to the conflict in the Middle East and fresh uncertainty from the breakdown of Canada-U.S. trade talks and the tariffs that followed. TD economist Marc Ercolao said stronger-than-expected second-quarter growth and contained underlying inflation supported holding the rate, even as trade tensions argued for caution. The next rate decision is Oct. 28, and in the meantime, borrowing costs for the buyers CREB and GVR are both waiting on are not getting any lighter.
That leaves builders in Calgary and Vancouver adding supply into markets their own boards already describe as favouring buyers, a bet that could pay off if demand recovers by the time those units are finished, or widen the gap between construction and sales further if it does not.
