06:24 AM EDT, 10/17/2025 (MT Newswires) -- Canadian housing starts rose to 279,000 in September, an impressive show of strength despite soft resale conditions, said Bank of Montreal (BMO).

Few things to note: resale conditions aren't soft everywhere. The bear market in Ontario is a tough one, but most resale markets across Canada are in fine shape, noted the bank.

Indeed, while Canadian housing starts have turned higher over the past 12 months, they are at decade lows in Ontario.

Rental construction is still driving the increase in starts, stated BMO. In fact, rental starts are now outrunning starts for homeownership and condos combined.

That reflects past market conditions -- in other words, when population growth and rents were both surging -- as well as "juicy" Canada Mortgage and Housing Corporation (CMHC) incentives, added the bank.

However, that's a massive pipeline of rental supply right as population growth is stalling, according to BMO. As well, there is a shadow inventory of rental supply through the investor-dominated condo market.