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[Visual: Mireille Thériault and Aled ab Iorwerth sit in armchairs in a recording studio. Mireille has very long, straight brown hair. She wears a blue blazer with black slacks. Aled wears glasses and has short white hair with a moustache. He wears a white button-down shirt, a dark tie and black slacks. Microphones on stands and side tables with open laptops frame their chairs.]

00:00:00:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

What’s happening in Canada’s rental market, why does rental construction matter so much and what stood out most in this year’s survey?

00:00:07:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Although there is a short-term concern, there is that long-term demand going out into the future.

00:00:15:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

If demand is strong, what’s making it difficult to move projects forward?

00:00:19:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

There’s the traditional problem of regulation, the process of getting approval, and it’s still a very lengthy one.

00:00:27:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

We hear a lot about innovation in housing. What is the sector actually doing differently?

00:00:32:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

We hear a lot about modern methods of construction. People talk about it a lot. But I think this survey was the first time I saw real evidence that people are actually starting to adjust.

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00:00:45:00

[Speaker: Joelle Hamilton, Communications & Marketing — CMHC]

You’re listening to In-House, Canada’s Housing Podcast, where we share the latest on Canada’s housing market.

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00:01:01:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

Purpose-built rental construction is historically high, but what are industry professionals saying about today’s market? Why are some projects still struggling to move forward? CMHC’s latest Rental Housing Development Survey reveals a sector caught between long-term optimism and short-term challenges. Developers remain optimistic about long-term demand, but they’re also navigating approval delays, adverse market conditions and rising costs. Today, we’re digging into what those findings mean for the future of rental housing in Canada. Welcome back to In-House. I’m your host, Mireille Thériault. Joining me is Aled ab Iorwerth, Deputy Chief Economist at CMHC. Welcome, Aled.

00:01:45:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Thank you.

00:01:46:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

What’s happening in Canada’s rental market, why does rental construction matter so much and what stood out most in this year’s survey?

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00:01:54:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Well, those are the key questions. Obviously, at CMHC, we’re very concerned about rental housing. It’s one of the key cornerstones for establishing affordability for many Canadians, particularly in some of our very high-priced cities. So, we’re always concerned and always advocating for increased rental construction. Now, as probably most of the viewers will know, we are in a period of uncertainty at the moment. Clearly, there’s some uncertainty related to oversupply of the condominiums in Toronto, but there’s a broader macroeconomic uncertainty as well related to international conditions. But what’s reassuring from this report is that a lot of developers still see the long-term potential for rental housing. In our survey, more than half of the respondents saw strong demand for or perceived that there would be strong demand for rental housing over the next five years and beyond. So, I think this is the key point, the key emphasis to draw from the survey, is that although there is short-term concern, there is that long-term demand going out into the future, and so it’s important to bear in mind the long-term horizon for this very important part of Canadians’ housing system.

00:03:12:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

If demand is strong, what’s making it difficult to move projects forward?

00:03:16:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Well, there are a host of reasons.

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First of all, there’s the traditional problem of regulation, the process of getting approval, and it’s still a very lengthy one. Governments are acting to try and improve in that direction, but there is still some work to do. Secondly, and linking back to the macroeconomic situation that I referred to previously, the economic viability on new structures can sometimes be challenging. Vacancy rates are edging up a little bit. Rental growth is perhaps not quite as strong. But I think, more fundamentally, Canadians are just less willing to take a step of moving into perhaps better, but more expensive rental housing right now because of the macroeconomic risks. So, there’s a hesitancy on the demand side. And then on the construction side, costs have been going up. There are still quite a lot of government fees involved. And so, there’s uncertainty over the demand. On the supply side, costs are important. So, there are these challenges. I think another part that we’re getting out of the survey is that most firms are able to get access to financing. Many, if not—well, not even many, the vast majority of companies are able to get access to CMHC financing, and that’s an important part of moving the structures along. I think only around 10% of the challenge is in getting financing. So overall, CMHC is there with the programs, but the overall macroeconomic situation still remains uncertain.

00:05:05:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

So, how are industry professionals adapting to these rental market conditions?

00:05:09:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

I think they’re starting to change some of their own strategies. So, for example, on the financing side, they’re moving to longer-term amortizations, going more to, say, 30-year amortizations from 25. The other part that was really picked up in the survey is that they’re, rather than building, developing and then selling their structures, they’re holding on to the structures for the longer term. But that, you know, to a certain extent, that means that it can’t redeploy capital, but it also means that they have confidence to hold on to those structures in the long term.

00:05:45:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

We hear a lot about innovation in housing. What is the sector actually doing differently?

00:05:50:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Right, and this was another key point that we realized in the survey. We hear a lot about modern methods of construction. People talk about it a lot. But I think this survey was the first time I saw real evidence that people are actually starting to adjust. So, last year, roughly a fifth of respondents said that they were using some sort of techniques or modern methods of construction, prefab or whatever. In this survey, it was closer to a half, 45% or something, saying that they are exploring, they are doing something using modern methods of construction. Now, it may be some of the more basic parts of modern methods having some greater prefab components in their structures. But I’m starting to detect some sort of sea change in the industry that they need to be exploring new technologies, new innovation in order to build even more houses given the demand is so enormous.

00:06:49:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

Well, purpose-built rental construction is at an all-time high in Canada, but in your opinion, would you say we’re building enough?

00:06:56:00

[Speaker: Aled ab Iorwerth, Deputy Chief Economist — CMHC]

Well, one of the key issues, and that’s what I’ve been emphasizing at the beginning, was the time horizon. When we look at how much housing supply is needed in Canada, we have to take a very long-term horizon, given the time it takes to build housing. So, on a 10-year horizon, as we saw in our recent Housing Supply Report, I don’t think we are building enough rental housing. Now, there are short-term uncertainties, short-term challenges because of the macro situation. But if we look out, as I said, to that decade-long period, I think we need to continue to build rental housing that’s affordable to Canadians, particularly in our most expensive cities like Toronto and Vancouver.

00:07:39:00

[Speaker: Mireille Thériault, Specialist, Communications — CMHC]

Aled, thanks for helping us unpack this. At the beginning of the episode, I asked, what do industry professionals have to say about rental construction in Canada? The sector remains confident about long-term need for rental housing in Canada, but challenges such as government regulations, development fees, approval timelines and adverse market conditions continue to shape what gets built and when.

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To learn more, check out the full results of CMHC’s 2026 Rental Housing Development Survey in the episode description.

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Thank you for joining us In-House. See you next time.

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00:08:14:00

[Speaker: Joelle Hamilton, Communications & Marketing — CMHC]

Did you know we’re not just on YouTube? You can now find us on Spotify, Apple Podcasts and Amazon Music.

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Don’t miss our next episodes for more real, data-driven discussions. If you’re learning from and/or enjoying this podcast, please share this episode, follow us or subscribe. Reach out and let us know what you think.

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Thanks for listening, and see you next time.

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