Canada must double new-home construction to regain pre-pandemic affordability, CMHC says

The Canada Mortgage and Housing Corporation’s latest supply analysis indicates that Canada must roughly double its annual home-building rate to achieve the housing affordability seen in 2019. While the nation is on track to complete about 231,000 new homes each year until 2036, the agency estimates a need for between 417,000 and 469,000 units to close the persistent supply gap. Persistent high construction costs, difficult presale financing and a sluggish condominium market are dampening developer confidence, although policy tools like government financing, reduced development charges and zoning reforms are improving the outlook for purpose-built rentals, which now represent two-thirds of apartment starts.

Regional disparities are pronounced: Toronto’s gap is shrinking thanks to price moderation, Calgary’s gap is narrowing as construction picks up, Vancouver’s gap remains largely unchanged, and Ottawa and Montreal are projected to see widening gaps as demand outpaces supply. Edmonton remains the most affordable major market, with construction keeping pace with population growth. The report stresses that restoring affordability will require not only more units but also the right mix of housing types to meet future needs.