Record rental construction drives housing starts in Canada's largest cities

OTTAWA, ON, Sept. 26, 2024 /CNW/ – Total housing starts in the six largest census metropolitan areas (CMAs) rose by 4% in the first half of 2024 (68,639 units) compared to the same period in 2023 (65,905), driven by significant increases in Calgary, Edmonton, and Montréal. This according to the latest Housing Supply Report (HSR) by Canada Mortgage and Housing Corporation (CMHC), which examines new housing construction trends in Canada’s six largest CMA’s: Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montréal.

Developers continued to focus on multi-unit apartment buildings at historically high levels, as the 49,172 apartment starts in the first half of 2024 made up 72% of all new home construction in the six CMAs. Construction of rental housing, supported by many government incentives and policies, made up the highest share of apartment starts on record (47%) and over one third of total housing starts. For example, Montréal saw a 106% increase in rental construction, with 7,192 new rental units being started, the most out of the six markets covered.

Also in the first half of 2024, developers prioritized clearing backlogs of the record number of projects under construction. As a result, apartment completions increased across the six CMAs, setting new records in each one except Montréal and Vancouver.

Despite this progress, when adjusted for population growth, per-capita housing starts were flat compared to the same period last year and not enough to keep pace with the growth in demand.

You can download and read the entire Housing Supply Report (HSR) on the CMHC website.

Quote:

“The growth in actual starts observed in the first half of this year is encouraging, considering the tighter financing conditions and higher construction costs faced by homebuilders. With record low vacancy rates in Canada’s largest cities, the increased investment by the private sector, leading to a rise in rental construction was much welcomed. However, per-capita housing starts remain a concern, as supply did not rise enough to keep pace with demand and improve overall affordability,” said Aled ab Iorwerth, Deputy Chief Economist for the CMHC.

Quick facts:

Calgary and Edmonton led the growth in housing starts, which reached the highest and second-highest level on record, respectively, including uniquely strong growth in single-detached starts.
In Montréal, housing starts rebounded, up 58% from last year’s 26-year low, with most starts geared toward the rental market.
Housing starts decreased in Toronto, Vancouver, and Ottawa. Apartment starts, notably condominiums, fell as investors – especially those in Toronto and Vancouver – found pre-construction apartments less appealing amid high financing costs and lower demand.
Amid tighter financing conditions for new projects, homebuilders prioritized clearing backlogs of projects under construction, leading to increased apartment completions across all six CMAs.
Despite regional differences in new home construction, municipalities and provinces across the country are working actively to increase housing supply and variety.

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View the related podcast with report spokesperson CMHC Deputy Chief Economist, Aled ab Iorwerth on CMHC’s YouTube channel.

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CMHC plays a critical role as a national convenor to promote stability and sustainability in Canada’s housing finance system. Our mortgage insurance products support access to home ownership and the creation and maintenance of rental supply. Our research and data help inform housing policy. By facilitating cooperation between all levels of government, private and non-profit sectors, we contribute to advancing housing affordability, equity, and climate compatibility. And we actively support the Government of Canada in delivering on its commitment to make housing more affordable.