October 2025 brought a notable shift in Canada’s real estate landscape: housing starts fell by 17% compared to September, according to new data from the Canada Mortgage and Housing Corporation (CMHC).
This decline was steeper than expected and was especially evident in high-density provinces like Ontario and British Columbia, where housing supply challenges are already significant.

While home sales have shown mild recovery in recent months, the sharp drop in new construction is a reminder that the market still faces real pressure.

📉 Why Are Housing Starts Falling?

There are three main reasons behind the slowdown:

1. Higher construction costs

Rising material prices, labour costs, and overall project expenses are causing developers to move more cautiously.

2. Tighter financing conditions

Even with interest rates stabilizing, securing funding for large projects has become more complex, especially for developments without guaranteed demand.

3. Developers are waiting for clearer market signals

Many builders prefer to observe buyer activity before launching new projects, ensuring they are not over-committing in an unpredictable market.

🌲 Impact on British Columbia & Vancouver

In British Columbia — one of the most supply-constrained regions in Canada — the slowdown in new construction could lead to tighter market conditions in the coming years:

• Fewer new homes entering the pipeline

• Potential shortages in the pre-sale and new-construction segments

• Developers may price upcoming projects higher due to reduced supply

This trend aligns with BCREA’s forecast that home prices in B.C. may rise by around 4% in 2026, making future affordability even more challenging.

🏘️ What This Means for Buyers

If you’re a buyer, especially in the pre-sale market:

• Now is a good time to explore options before supply tightens further.

• Don’t rely on “waiting for prices to drop” — reduced construction typically pushes prices upward.

• Townhomes and condos may offer more accessible entry points as detached homes remain limited.

📦 What This Means for Sellers

For homeowners thinking about selling:

• Move-in-ready homes may attract stronger interest as new-build options shrink.

• If you're planning to sell within the next 6–12 months, preparing early can help you take advantage of stronger demand in 2026.

• Pricing strategy, presentation, and marketing will be critical in a more balanced market.

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