Fall 2024 Housing Supply Report

Explore the latest insights into new housing supply in Canada’s largest metropolitan areas with our Housing Supply Report. Drawing on data from CMHC’s Starts and Completions Survey, this report offers a comprehensive look at the current state of housing supply.


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National

Highlights

  • Total housing starts in the 6 largest census metropolitan areas (CMAs) rose by 4% in the first half of 2024 compared to the same period in 2023. The level of new construction (68,639 units) was the second strongest since 1990. However, when adjusted for population size, combined housing starts were close to the historical average and weren’t enough to meet growing demographic demand.
  • Calgary and Edmonton led the growth in housing starts due to record interprovincial migration in recent years, driven by their lower cost for housing and favourable economic conditions. In contrast, housing starts decreased in Toronto, Vancouver and Ottawa.
  • Apartment starts in the 6 CMAs increased slightly, driven by rental construction. Nearly half of the apartments started in the first half of 2024 were purpose-built rentals – the highest share on record. This trend aligns with demographic changes and declining homeownership affordability.
  • Except for Calgary and Edmonton, condominium apartment starts fell in the first 6 months of 2024 – a trend we expect will continue as developers struggle to reach the minimum pre-construction sales needed to start construction. Both investors and end users have significantly reduced their purchases of new condominiums because of the impact of higher interest rates.
  • Developers prioritized clearing backlogs of projects under construction. As a result, apartment completions increased across the 6 CMAs, setting new records in each one except Montréal and Vancouver.
  • Municipalities and provinces are working actively to increase housing supply and variety, with policies aimed at better meeting the needs of a broad range of buyers and renters.

While combined housing starts increased in the 6 largest CMAs, significant regional differences were clear

In the first half of 2024, combined new home starts in Canada’s 6 largest CMAs reached 68,639 units. This is a 4% increase from the same period in 2023 and the second highest first-half-year activity since the 1990s.

However, when we account for increases in population (by looking at housing starts per 10,000 population), we see that activity was around the historical average (figure 1). Given the long history of supply not keeping up with demographic demand, this level of activity isn’t enough to reduce the existing supply gap and improve affordability for Canadians.

Figure 1: New home construction in the first half of 2024 neared record high — but not when adjusted for population size

Total housing starts and starts per 10,000 population in Canada's 6 largest CMAs*, January to June

*Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montréal.

Sources: CMHC, Conference Board of Canada; CMHC calculations.

Text Version (Figure 1: National)

Total housing starts and starts per 10,000 population in Canada's 6 largest CMAs*, January to June
Year (January to June) Housing starts Housing starts per 10,000 population
2005 56,111 39.3
2006 58,464 40.3
2007 53,185 36.1
2008 58,065 38.8
2009 29,820 19.6
2010 44,666 28.9
2011 48,793 31.1
2012 59,645 37.4
2013 47,742 29.5
2014 52,015 31.7
2015 54,180 32.7
2016 53,155 31.7
2017 55,317 32.5
2018 59,336 34.2
2019 56,876 32.3
2020 52,140 29.3
2021 68,979 38.7
2022 65,020 35.7
2023 65,905 34.7
2024 68,639 34.9

New home construction trends varied significantly across markets, showing greater differences than previously reported in our Housing Supply Report. Calgary, Edmonton and Montréal saw big increases in total housing starts ranging from 40% to 70%. In contrast, Toronto, Vancouver and Ottawa saw declines ranging from 10% to 20%.

We use a housing starts measure adjusted for population size (starts per 10,000 population) to compare the rates of new construction across markets (figure 2).

Figure 2: CMAs in western provinces lead in starts per 10,000 population

Housing starts per 10,000 population, January to June, select CMAs 

*Single-detached, semi-detached and rows.

Sources: CMHC, Conference Board of Canada; CMHC calculations.

Text Version (Figure 2: National)

Housing starts per 10,000 population, January to June, select CMAs
Census Metropolitan Area Ground-oriented*
2023
Apartment
2023
Ground-oriented*
2024
Apartment
2024
Vancouver 10.4 47.6 7.5 38.0
Calgary 26.9 20.5 32.8 29.3
Edmonton 21.8 10.3 29.4 21.6
Toronto 6.6 30.9 5.7 26.0
Ottawa 11.2 17.3 11.0 10.9
Montréal 1.6 11.5 1.9 18.2

In recent history, this measure in Montréal has been significantly below that of other large CMAs. Toronto fell further below the cross-CMA average. Vancouver, which led for most of the decade, is now outpaced by Calgary and Edmonton. The 2 Alberta CMAs have taken advantage of stronger economic growth and made better use of construction labour.

Differences in housing starts trends across the country reflect different levels of affordability and economic conditions

Homebuyers in more affordable markets like Calgary and Edmonton have been more resilient to housing cost increases. Affordability indicators show that homeownership costs relative to incomes in these CMAs have remained about half those in Toronto and Vancouver.

Alberta has also seen stronger economic growth, with real gross domestic product (GDP) per capita outpacing Quebec, Ontario and British Columbia by about 30% in recent years. This, along with growing remote work opportunities and a more affordable housing system, has led to significantly higher migration to Alberta from other provinces since 2022.

The influx has created demand for new home construction, with housing starts reaching record highs in Calgary and the second-highest level in Edmonton during the first half of 2024. The construction industry has been able to quickly meet demand in these CMAs partly due to a lower regulatory burden. Along with strong economic conditions, this has significantly slowed the decline in homeownership affordability compared to other large CMAs.

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In Montréal, housing starts of all dwelling types increased, but remained below the 10-year average, with most starts geared toward the rental market. Meeting strong rental demand in the region remained a challenge in an environment of high financing and construction costs.

In the least affordable markets, Toronto and Vancouver, and the less expensive Ottawa market, ground-oriented (single-detached, semi-detached and row) starts have fallen further below historical averages. Lower prices in the resale market made it more difficult for developers to compete for homebuyers, as the high cost of land limited their ability to reduce their prices.

The Toronto and Vancouver markets have a stronger investor presence than others because of the importance of the secondary rental market (condominium rental apartments). For these investors, pre-construction apartments have become less appealing because of high interest rates, declining asking rents and softening resale markets.

Therefore, although apartment starts in these CMAs have declined only modestly and remain historically strong, we expect activity to slow further. With limited investor support, developers will likely struggle to meet sales thresholds for financing, resulting in slower supply growth in the future.

Apartment starts were down outside of Alberta CMAs, except for increased purpose-built rental construction in Montréal

Combined apartment starts in the 6 CMAs increased only marginally so far this year. A decline in condominium apartment starts in these centres was offset by a rise in purpose-built rental apartment construction, which reached 47% of all apartment units started (figure 3).

Figure 3: Close to half of the apartments started in the first half of 2024 were rentals — near a 30-year high

Purpose-built rentals share of overall apartment starts, January to June, select CMAs

Source: CMHC.

Text Version (Figure 3: National)

Purpose-built rentals share of overall apartment starts, January to June, select CMAs
Period (January to June) Vancouver Calgary  Edmonton  Toronto Ottawa Montréal 6 CMA Aggregate
10 year average (2015 – 2024) 31.4% 34.4% 58.1% 17.9% 43.7% 63.1% 35.8%
2023 35.5% 66.7% 96.8% 30.1% 56.7% 67.2% 41.9%
2024 41.9% 49.6% 91.7% 20.8% 68.1% 84.6% 46.6%

There were varying patterns in apartment construction across different tenures and urban areas in Canada.

  • After reaching record levels in 2023, purpose-built rental apartment construction slowed in Toronto and Ottawa and slightly declined in Vancouver. In contrast, it continued to grow in Edmonton. The combined level of rental construction for the 6 CMAs in the first half of 2024 was the highest since the 1990s (figure 4):

Figure 4: Highest rental apartment construction on record

Purpose-built rental and condominium apartment starts in Canada's 6 largest CMAs*, January to June

*Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montréal.

Source: CMHC.

Text Version (Figure 4: National)

Purpose-built rental and condominium apartment starts in Canada's 6 largest CMAs*, January to June
Year (January to June) Purpose-built rental apartments Condominium apartments
2005 4,125 16,301
2006 2,984 20,046
2007 2,685 16,307
2008 3,862 27,944
2009 2,060 11,448
2010 3,149 13,166
2011 3,907 19,937
2012 4,191 29,028
2013 3,706 20,275
2014 3,827 23,535
2015 6,406 24,541
2016 8,351 22,532
2017 8,604 22,387
2018 11,258 26,485
2019 13,289 25,827
2020 13,516 19,498
2021 17,716 28,155
2022 17,708 23,976
2023 20,117 27,818
2024 22,891 26,226
  • When adjusting for population, Edmonton had the highest rate of purpose-built rental construction, with 20 rental apartments started per 10,000 population (figure 5). In Edmonton, rental supply is catching up with demand as developers respond to rapid rent increases driven by favourable economic and demographic conditions.
  • While Calgary and Edmonton saw increases in condominium apartment starts, other large markets experienced declines during the first 6 months of 2024.

Figure 5: Edmonton led population-adjusted rental apartment starts in the first half of 2024

Purpose-built rental apartment starts per 10,000 population, January to June, select CMAs

Sources: CMHC, Conference Board of Canada; CMHC calculations.

Text Version (Figure 5: National)

Purpose-built rental apartment starts per 10,000 population, January to June, select CMAs
Census Metropolitan Area 2023 2024
Vancouver 16.9 15.9
Calgary 13.7 14.5
Edmonton 10.0 19.8
Toronto 9.3 5.4
Ottawa 9.8 7.4
Montréal 7.7 15.4

Apartment developers face challenges in some markets

Despite tight rental market conditions, some developers in Toronto and Ottawa had to reassess their plans because certain projects became financially unviable.

Purpose-built rentals in Toronto face increased competition from condominium apartments. Condominium completions and rental listings have risen, with investors choosing to rent out their units because of a soft resale market. In recent months, industry sources have reported a decline in asking rents for condominium units, with newly built purpose-built apartments tending to be priced similarly. Slower rent growth could make more purpose-built developments financially unfeasible.

In the condominium segment of most CMAs (except for Calgary and Edmonton), developers have struggled to meet minimum sales thresholds for financing, especially for large projects. This led to delays and cancellations of new project launches. Our data suggests that projects that secured enough sales to proceed were, on average, smaller in size (fewer units and storeys) than those in the first half of 2023. They were also likely less costly.

Concern over the cost of housing in a slowing economy has shifted demand for new condominiums to lower price points in markets where prices were already high (Toronto) or have risen quickly (Calgary). In these markets, developers have been starting projects in less expensive areas (for instance, outside city centres) to address affordability needs and manage expenses. Factors like land prices, approval times, municipal policies and labour availability have become key considerations.

Industry sources indicate that developers have been hesitant to lower prices for unsold units in existing projects, instead offering substantial incentives like free parking, waived maintenance fees and upgrades. To maintain acceptable profit margins, developers may face longer pre-sales phases, extended development times and potential project cancellations, leading to lower starts numbers in the future.

Developers completing construction of apartment buildings rather than starting new projects

Condominium apartments have faced growing backlogs and longer construction times since the pandemic because of a tight labour market, rising construction costs and supply shortages. By the end of 2023, many large CMAs reached record highs in the number of apartment units under construction; they’d been started, but not completed.

In the first half of 2024, some limitations eased. The average cross-market Building Construction Price Index (BCPI) for apartments, reported by Statistics Canada, rose by 4%, compared to 8% in the previous year. In Toronto, the index growth slowed the most, dropping from 15% to 5%.

Developers were better able to manage completions, particularly in markets where starts were delayed. Apartment completions increased in all CMAs, reaching record levels in Toronto, Ottawa, Calgary and Edmonton.

Provincial and municipal policies addressing housing supply and variety

Up to this point, we’ve highlighted differences in housing starts across Canada’s largest urban centres. Despite these differences, there’s been alignment across regions on the need to increase housing supply and variety. Below are some examples of measures recently pursued by provinces and municipalities for this reason:

  • "As-of-right" development, Bill 23, Ontario (2022): allows up to 3 units per lot in many residential areas without requiring rezoning.
  • Bill 44, British Columbia (2023): mandates municipalities to permit 3 to 4 housing units per single-family lot and up to 6 units on larger lots near public transit.
  • Bill 31, Quebec (2024): allows municipalities to bypass local bylaws, such as height restrictions or property lines.
  • Official Plan amendment, City of Toronto (2023): allows the development of multiplexes – low-rise buildings with 2 to 4 units – in all neighbourhoods across Toronto.
  • Blanket rezoning, Calgary (2024): allows single-family homeowners to redevelop their properties into duplexes, fourplexes and row houses without requiring a land-use redesignation.
  • The Downtown Calgary Incentive Program (2021): supports office space conversions to residential units, co-living developments, hotels, schools and performing arts centres.

The impact of the above initiatives will be felt in time and, in some cases, has already started to appear in our data. For instance, in the City of Calgary, we’ve seen considerable office-to-residential conversions activity.

A desire to increase density may also, in part, explain the increased provision of secondary suites in the Edmonton and Calgary CMAs. For further insights on policy developments at the regional level, please see the CMA sections of this report.

We’ll continue to monitor housing policy outcomes closely using our starts and completions data, as well as our data on residential conversions and demolitions, given an increased emphasis on densifying existing neighbourhoods.

Our Chief Economist and Deputy Chief Economists

Our Chief Economist and Deputy Chief Economists lead a cross-country team of housing economists, analysts and researchers who strive to improve understanding of trends in the economy, housing markets, and how they impact affordability.


  • Bob Dugan
    Chief Economist


  • Aled ab Iorwerth
    Deputy Chief Economist


  • Kevin Hughes
    Deputy Chief Economist


  • Tania Bourassa-Ochoa
    Deputy Chief Economist

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Date Published: September 26, 2024