Toronto's construction sector ended 2025 on a high note, posting a significant jump in new multi-unit building starts during the month of December, a performance that led all of Canada's largest urban centres. This surge contributed to a national increase in housing construction for the year, according to the latest data from the Canada Mortgage and Housing Corporation (CMHC).
December Surge Pushes Annual Gains
The spike in Toronto's multi-residential construction activity in the final month of the year was a key factor in the national annual tally. CMHC reported that housing starts across Canada totalled 259,028 units in 2025. This figure represents a 5.6 per cent increase from the 2024 total, signalling continued growth in the country's residential construction pipeline despite ongoing economic headwinds.
While the national data encompasses all housing types, including single-detached homes, the standout story in major metropolitan areas like Toronto has been the focus on higher-density living solutions. The December numbers underscore a sustained trend where developers are responding to market demand and policy pushes for more efficient land use in urban cores.
Focus on Density in Urban Cores
The emphasis on multi-unit buildings—which include condominiums, apartment complexes, and townhouses—reflects broader demographic and economic shifts. Cities are grappling with the dual challenges of population growth and housing affordability, making denser housing forms a practical necessity. Toronto's leadership in this category suggests a robust development pipeline aimed at adding supply to a tight market.
This construction data is a critical indicator for policymakers, economists, and prospective homeowners alike. It provides a measure of how quickly new supply is entering the market to meet demand. The growth in starts, particularly in the multi-unit segment, is often seen as a positive step toward easing long-term supply constraints, though the immediate impact on prices can be lagged.
Implications for the 2026 Market
The strong finish to 2025 sets a notable precedent for the new year. A healthy level of construction starts indicates confidence among builders and developers in the underlying demand for housing. For Toronto, maintaining this momentum will be crucial as it continues to attract new residents and strives to improve housing availability.
Analysts will be watching closely to see if this trend continues into the first quarter of 2026. Factors such as financing costs, municipal approval timelines, and labour availability will all play a role in determining whether the pace of multi-unit construction can be sustained. The December figures, however, offer a clear signal that for Canada's largest city, the push to build upwards remains a central theme in its urban development story.
