The Statistical Illusion Inside CMHC’s Housing Data
A closer look at the data shows Canada isn’t building the homes families need and future construction may already be falling.
In this episode, Sabrina Maddeaux and Mike Moffatt break down why Canada’s housing data may be misleading policymakers and the public, how statistical quirks can distort what we think is happening in the market, and why the homes being built today may not match what Canadian families actually need.
Canada’s housing numbers look encouraging at first glance. In 2025, the country recorded nearly 260,000 housing starts, well above historical averages and higher than the year before. On the surface, that suggests Canada is finally making progress on its housing shortage. But a closer look at the data reveals a more complicated and concerning reality.
Most of those new units are small apartments and condos, not the family-sized homes many Canadians are looking for. At the same time, the way Canada measures housing starts means the data often reflects investment decisions made two or even three years earlier. For large high-rise projects in Canada, the “housing start” is recorded once the foundation reaches ground level, long after the project was first approved and financed. That makes housing starts a poor indicator of what’s actually happening in the housing market today.
If you enjoy the show and would like to support our work, please consider subscribing to our YouTube channel. The pod is also available on various audio-only platforms, including:
Below is an AI-generated transcript of the Missing Middle podcast, lightly edited.
Mike Moffatt: Our housing data is lying to us, or we’re mishearing it.
In 2025, Canada recorded nearly 260,000 housing starts, well above our average and 14,000 more than the year before. That sounds like good news, but it’s misleading in two big ways. First, more than 170,000 of those units were apartment rentals and condos. [More than] double 2014 levels. And most of those were studios or one-bedrooms, not exactly family homes. Second, housing starts reflect decisions made years ago and don’t reflect current conditions.
Pre-construction sales tell a different story. An industry facing its toughest conditions since the 1990s.
Sabrina Maddeaux: Now, we’ve had a few comments lately about how negative Mike has been, and given that intro, I can only imagine we’ll get a few more at the top here. You made three specific claims, and I’d like to go over them one at a time. You mentioned that housing starts don’t accurately reflect current housing conditions. Why is that?
Mike Moffatt: Yeah, I think when most people think of a housing start, they literally think when the crew shows up on the site for the first time and starts digging the hole. But that’s not how Canada and the CMHC define a housing start. In fact, it’s when they’ve dug the hole and started the foundation work and completed so much of the foundation work that it’s actually reached grade or ground level.
For a single detached home, there’s really not that much of a difference from when you start digging the hole to when the foundation is done. It might be a month or two at the most, so it’s really not that much different. But when you’re building a high-rise, particularly a high-rise with a parking garage, that can actually take 18 to 24 months from the start of digging the hole to which you’ve built the entire parking structure.
If we are looking at the data for high rises, housing starts today might have actually started in the digging-the-hole sense in February of 2024. And the investment decision - whether or not to go ahead with that building- was probably made in the summer of 2023. So there is this really big disconnect between the data, which is supposed to be measuring current conditions, but is really reflecting investment decisions made two or two-and-a-half years ago.
Sabrina Maddeaux: Obviously not ideal.
You released a piece recently that showed that Canada is unusual in how we measure housing starts, which we’ll link to in the show notes. So how do they do it in other countries?
So it’s really closer to the beginning of the process. So you have it in some countries where it’s literally you start digging the hole and, bang, that’s counted as a housing start. Others are basically when you’ve reached the bottom of the hole, which is considered a housing start. So it’s more of a real-time indicator of the housing market.
Now, there is always some concern here that it is possible for one of those holes or one of those foundations not to turn into an actual building. I think that’s the reason why the CMHC defines it so late in the process. But what the piece argues is that we lose a lot in that definition - that it doesn’t really work as a real-time indicator of current housing conditions or housing market conditions. But that’s how the government, the media, and even policy wonks like me use the data. But it’s not really appropriate for that purpose.
Sabrina Maddeaux: Okay, so if the data is misleading us, how do we fix it?
Mike Moffatt: Well, one thing we could do is adopt an international definition. We could blow up the definition of housing starts. We say, No, we don’t have to go that far. Because if we did that, we would lose the ability to do comparisons over time. If we change the definition in 2026, then we lose access to all of that past data. Or at least we couldn’t do year-to-year comparisons.
So what we suggest is that we could keep housing starts as they are, but we need other indicators. Maybe we need an indicator that is when that hole starts to form. We could look at things like excavation permits and so on. So this is really a call for the CMHC to have additional indicators, because what we have isn’t that bad, it’s just the wrong tool for the job. We’re not using that data correctly. We’re misleading ourselves with how we use that data.
But even if we fix that, though, it wouldn’t address the issue that we count all housing starts as being the same. That a shoebox condo is one housing start, a three or four-bedroom home is one housing start, a McMansion is one housing start. And those are very different things that serve very different purposes, because you’re not going to want to raise a couple of kids in a shoe box condo.
And one thing that I hear all the time is that homes keep getting bigger and bigger. So I have to ask you: do you feel that your generation is living in larger homes as my generation did when I was your age?
Sabrina Maddeaux: Absolutely not. I’d say living in smaller homes and in different types of homes - condos, apartment buildings, basement units, very small, often with poor layouts and not ideal areas. And [my generation is often] in these homes for much longer without any hope of moving up the property ladder. So even if homes are larger overall, and this is a theme I keep returning to in Canada, when we look at overall averages or trends, unless you break that down by age, you’re not going to see the very different lived experiences.
I think seniors are probably living in much larger homes than they ever have in Canadian history, and even families that got into the market 15, 20 years ago. But young people are living in smaller homes than they ever have before.
So I’m curious what the data says here, though. Does it tell us that homes are continuing to get larger?
Mike Moffatt: That’s a great question. And today, we’re going to introduce: Reality versus Data! How the data isn’t saying what we think it’s saying. And I hope this is going to become a recurring segment on this podcast.
It’s true, for a long time, median home sizes were getting bigger and bigger and bigger. The 60s, 70s, 80s, 90s, going into the 2000s and up until about 15 years ago, the square footage of homes kept going up and up and up. But that’s really not the case anymore. Over the last decade, while the average detached home has gotten bigger, the average home overall has actually gotten smaller.
Let me explain: In much of the country, we stopped building 1200-square-foot single-detached starter homes like the one I bought in 2004, but we didn’t replace those with giant McMansions. Instead, we replaced them with small high rise apartment units, rentals, and condos. We swapped 1200 square feet on a small lot for 5 or 600 square feet in a tower. Detached homes look bigger on average because the smaller ones basically disappeared. And that’s what statisticians call a composition effect.
Before 2016, Ontario’s typical median home was a three-bedroom house. Since then, it’s been a two-bedroom apartment. So detached homes got bigger, but new homes overall got smaller.
Sabrina Maddeaux: Interesting to note that you talk about the smaller homes being in towers. So you’re not taking into account things like backyard space and outdoor space that a lot of young people don’t have access to now, either.
The final thing you mentioned in your intro was pre-construction sales. I know there’s a lot of media discussion on how the collapse in pre-construction sales is isolated just to condos in downtown Vancouver and Toronto, but I think you have some numbers that suggest differently.
Mike Moffatt: Absolutely. So I took a look at 2025 pre-construction sales numbers that come from Altus Group, which cover not just apartment condos, but townhomes and other forms of housing relative to 2024. And we see that pre-construction sales are down. They’re down 16% in Edmonton, 39% in Calgary, 45% in the GTA, 52% in the Greater Golden Horseshoe around the GTA, and 56% in Vancouver.
Now we have to keep in mind that those are pre-construction sales, so they don’t consider the purpose-built rental market. But it’s a clear indication that it’s more than just a Toronto and Vancouver condo problem. And, if you don’t have pre-construction sales this year, you’re not going to have housing starts in 2027, 2028 and so on.
Sabrina Maddeaux: On that last point, the CMHC would back you up. A few weeks ago, they released their 2026 Housing Market Outlook, which we’ll link to in the show notes.
It forecasts that housing starts will fall each of the next three years, and that there will be over 40,000 fewer starts in 2028 than there were in 2025 because of the lack of new supply. They show that home prices are going to start creeping up again, which is, of course, the last thing we want to see. So these are important stats to pay attention to.
Thank you so much for watching and listening. And to our producer, Meredith Martin and our editor, Sean Foreman.
Mike Moffatt: And if you have any thoughts or questions about statistical concepts such as composition effects, please send us an email to: [email protected]
Sabrina Maddeaux: And we’ll see you next time.
Additional Reading/Listening that Helped Inform the Episode:
Funded by the Neptis Foundation
Brought to you by the Missing Middle Initiative
 | A guest post by
|