Doubling pace of construction over next decade would restore housing affordability to 2019 levels

Ottawa, Ontario, June 19, 2025

Today, Canada Mortgage and Housing Corporation (CMHC) released new estimates on Canada’s housing supply gaps showing that a return to housing affordability levels last seen in 2019 will require between 430k and 480k new housing units be built annually over the next decade. This is an approximate doubling of the current pace of home construction in Canada.

New this year, the report provides specific housing supply gaps for the country’s largest Census Metropolitan Areas (CMAs), outlining how many housing starts are needed above what is projected to be built in a ‘’business-as-usual’’ scenario in both the homeownership and rental markets. These estimates follow previous CMHC research on productivity showing the homebuilding industry in Canada currently has the potential capacity to build more than 400k new homes per year.

Supply gaps in largest CMAs:

It is estimated Montréal faces the largest housing supply gap of the large CMAs. Current trends show housing affordability challenges will become much more acute if housing supply is not significantly increased. Since the pandemic, and when compared to local incomes, homeownership costs in Montréal have risen faster than any of the large CMAs. Strong rental construction in recent years must be expanded and matched by a significant increase in new units intended for the homeownership market.
In Toronto, it’s estimated a 70% increase in homebuilding over the next decade would help to improve affordability issues. Despite increased rental construction in recent years, the region is lacking homeownership options that match local incomes.
In Vancouver, it is estimated 7.2k additional homes are needed annually above the “business-as-usual” scenario, an increase of 29%. In 2023, more than 33k housing starts were recorded in this CMA. This continued level of construction would help the region’s longstanding affordability issues for both homeowners and renters.
Calgary, which has seen record levels of home construction for three consecutive years, is estimated to need 45% more new homes annually above the “business-as-usual” scenario. This would help counter post-pandemic affordability challenges, for both the homeownership and rental markets.
Ottawa-Gatineau is estimated to have the second largest housing supply gap of Canada’s large CMAs. The region saw increased homebuilding from 2021 through 2023, but since the pandemic, new supply has not kept pace with increased housing demand.
In Edmonton, no additional supply is required beyond what is currently projected, as sufficient market housing is expected to be built in the region to maintain affordability by 2035. As the focus of the report is on average affordability for market housing, this result does not reflect continuing challenges in Edmonton, such as homelessness.
By province, the most significant housing supply gaps are in Ontario and Nova Scotia, which saw some of the fastest rising housing costs due to the pandemic, and British Columbia.

“Doubling the pace of housing construction in Canada is achievable, but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs. It will also require significant innovation in construction technology and growth in labour productivity,” said Aled ab Iorwerth, Deputy Chief Economist for CMHC. “By estimating housing supply gaps across Canada, our goal is to ensure policymakers from all orders of government, as well as the private sector, understand the scale of the challenge. Systemic changes are essential if we are to double the pace of homebuilding in Canada.”

Read the full Supply Gaps Estimate on the CMHC website.

Watch CMHC’s podcast on the report here.

Affordability

In these estimates, the focus is on restoring affordability to levels last seen in 2019. The post-pandemic surge in housing costs changed Canada’s affordability landscape, and restoring affordability levels last seen two decades ago is no longer realistic. Housing affordability challenges in Toronto and Vancouver, which have been ongoing for decades, will take more time to address.

These new estimates provide distinct supply gap numbers for the homeownership and rental markets. Two thirds of Canadian households own their homes and the loss of affordability in Canada has been greater in the homeownership market. More affordable options for owners can also allow more renters to choose homeownership, easing pressure on local rental markets.

This report is focused primarily on affordability for average-income Canadian households living in market housing rather than housing that meets the needs of all low-income households, vulnerable populations, or people facing homelessness.

Ten-year horizon

Given the lengthy, multi-year process to build new housing, solving the housing crisis will be a marathon, not a sprint. To reflect this reality, CMHC’s supply gaps estimates will be presented on a rolling ten-year horizon. For this year’s report, the estimate is for how new housing is needed by 2035. This allows for easier comparison to the current pace of housing construction. The new estimates outline how many housing starts are needed above what is projected to be built in a ‘’business-as-usual’’ scenario.