As housing starts expected to slow, major developer says Canada must continue building

As housing starts expected to slow, major developer says Canada must continue building

CEO of Skyline expects immigration and housing demand to pick up again in the future

As some housing developers hold back on new construction projects, one of Canada's largest real estate companies says it intends to keep building — and it’s important the country continues to do so.

Different parts of Canada have seen record levels of housing construction in recent years. But the Canada Mortgage and Housing Corporation projects housing starts will decline over the next few years “as builders continue to respond to unsold inventories and high construction costs.”

Despite recent federal cuts to immigration, the co-founder and CEO of the Skyline Group of Companies expects demand to rebound.

“We have to have immigration in Canada,” Jason Castellan said in an interview. “We’re not growing organically enough.

“So when that immigration policy comes back online, the demand is going to continue to go up and the pressure on housing is going to be there.”

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According to Castellan, the development of large-scale apartment buildings can take three to four years to complete.

“You can’t flip a switch overnight with this business,” he said.

Halifax-based real estate consultant Neil Lovitt agrees with that sentiment. He says Ottawa’s immigration cuts are creating a one-time, short-term drop in demand for housing, but warns there’s a “real risk” of mistaking that as “mission accomplished” for addressing affordability.

Lovitt views the current period — where rent increases have slowed and asking rents have dropped from their peak in some areas — as a time to catch up on building the housing supply that’s needed.

Non-market and deeply affordable housing “are where we see the largest gaps between what really is needed and what has been supplied,” Lovitt said.

Some experts have pointed to Canada’s decades-old deficit in building non-market housing as one reason for the country's housing affordability problems.

Smaller cities seeing stronger rent growth: Skyline

Skyline maintains a “strategic focus” on smaller rental markets and says it’s seen an increasing trend of people moving from major urban centres.

In 2025, “rents in primary markets such as Toronto and Vancouver softened, while smaller and more affordable cities experienced comparatively stronger growth,” according to the latest annual report from Skyline's apartment subsidiary.

Given the company’s presence in those smaller markets, Skyline says its portfolio of apartments is well positioned to benefit from the shift.

Why Canada is on the cusp of a housing construction crisis

When asked whether it’s a good thing when companies like Skyline shift attention to more affordable areas, Castellan said he sees this as filling an underserved housing need.

He cited as an example the area of Walkerton, Ont., where he grew up.

“The apartment stock has not grown with the population there,” Castellan said, adding that Skyline does not aim “to make big gains or put lots of pressure on the market.”

Lovitt says smaller housing markets “follow in the footsteps” of larger ones.

“As affordability pressures get higher in the larger markets … it kind of gets pushed out into those secondary markets, like Halifax,” he said.

Castellan described the Maritimes as a “really good market” for Skyline. The company owns 701 rental units in Nova Scotia and 678 in New Brunswick.

“We’ve been feeling more … pressure on our housing there [in the Maritimes], which is a good thing for our business and I think for housing in general to maintain and hold up the values,” he said.

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Andrew Lam (they/she) is a Chinese-Canadian and trans reporter for CBC Nova Scotia. They are interested in 2SLGBTQIA+, housing and data-driven stories. Andrew also has a professional background in data analytics and visualization.