Edmonton's New Home Market Braces for Slower Growth in 2026
The record-breaking pace of new home construction in Edmonton is expected to moderate this year, as population growth subsides and demand pressures ease, according to a recent report from Canada Mortgage and Housing Corp. (CMHC). The report, released last month, predicts a slowdown in activity through 2028, with rising inventory levels on both the new homes and resale sides of the market.
Moderation in Housing Starts
Taylor Pardy, lead economist for the Prairies at CMHC, notes that the city will see a moderation in the pace of housing starts. "We'll start to see a bit of moderation in the pace of starts," Pardy says. This is particularly evident in purpose-built rental multi-family units, one of the most active sectors, and ground-oriented housing like single-family detached, semi-detached, and townhomes, where inventories are increasing due to supply outpacing demand.
Edmonton experienced two years of record-breaking housing starts, with 21,337 starts in 2025 surpassing the previous record of 18,384 set in 2024. This surge was largely driven by high population growth post-pandemic, but migration has since returned to levels similar to the late 2010s, when the economy was sluggish.
Forecasted Trends and Statistics
CMHC's report outlines a range of possibilities for this year's housing starts. The low forecast is 16,500 starts, which remains high by historical standards, while the high forecast is 24,500 starts, which would set another annual record. However, statistics from January 2026 indicate a more likely low-starts scenario, with starts down approximately 19% from January 2025.
Additionally, units under construction, two-thirds of which are apartment-style, have fallen below levels seen over the past three months. Pardy explains that most current development involves purpose-built rentals, while the apartment condo side is just beginning to recover after a decade of elevated supply, making Edmonton less vulnerable to over-supply risks.
Shifts in Development Strategies
In response to growing market uncertainty, developers and builders are increasingly bringing smaller projects to market. Jasmine Young, vice-president of advisory at Zonda, a consultancy tracking Canada's multi-family sector, notes that these smaller projects are easier to sell out. "These are easier to sell out," Young says, highlighting a strategic shift amid economic unpredictability.
CMHC data from January shows that about 43% of starts were rental units, with only 10% being condominiums, including townhomes. The outlook from February also points to rising vacancy rates, which are forecasted to climb from 3.8% last fall to 4.5% this year and 5% in 2027, potentially giving developers pause.
Conclusion
Overall, Edmonton's new homes market is entering a period of adjustment, with slower growth anticipated as developers adapt to changing economic conditions and inventory levels. The shift towards smaller, more manageable projects reflects a cautious approach in an evolving real estate landscape.
