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MIREILLE THÉRIAULT: What are the biggest takeaways from the 2026 Housing Supply Report?

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ALED AB IORWERTH: So, what we’re finding is that the gap is largely unchanged. We still need a lot of housing to be built. Our new estimate of the gap is something like 187,000 to 238,000.

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MIREILLE THÉRIAULT: What factors are driving the supply gap?

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ALED AB IORWERTH: Well, what we’re observing is that the rental sector — rental construction — is really holding out. The other aspect, which is a little bit mixed across the country, is that the condominium supply is really on the way down.

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MIREILLE THÉRIAULT: And what lies ahead for Canada’s housing market?

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ALED AB IORWERTH: We clearly need more housing to be built. This is key to improving affordability for everybody in Canada.

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[Joelle Hamilton, Communications and Marketing, CMHC.]

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MIREILLE THÉRIAULT: The economy is gaining momentum. Rental markets are easing, and housing completions are rising in many cities. But are we taking advantage of this moment to build enough housing? Welcome back to In-House. I’m your guest host, Mireille Thériault. To help answer these questions, Aled Ab Iorwerth, one of CMHC’s Deputy Chief Economists, will walk us through our latest housing supply report. Welcome, Aled. Thank you. Thanks so much for joining us for another episode.

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ALED AB IORWERTH: Thank you.

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MIREILLE THÉRIAULT: What are the biggest takeaways from the 2026 Housing Supply Report?

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ALED AB IORWERTH: Well, what we’ve done in this report is expand the report. So, I think that’s the first thing to know. It’s quite a bit bigger than we’ve done in the past. So again, we’re surveying how housing supply is operating across Canada and across the leading cities in Canada. But we’re also digging more into and replicating the previous analysis that we’ve done on how much housing supply is needed in Canada and in our cities. And again, this is all aimed at trying to restore affordability for Canadians. So, what we’re finding is that the gap is largely unchanged. We still need a lot of housing to be built. Our new estimate of the gap is something like 187,000 to 238,000. So, there’s a lot of housing that’s required.

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ALED AB IORWERTH: And that means, you know, over the next decade, we need to increase housing starts to the order of 420,000 to 470,000 units. So, the challenge is still there. The gap has not increased, but there’s a very mixed picture across the country where some cities have increased their housing supply, but other places have challenges.

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MIREILLE THÉRIAULT: So nationally, the housing supply gap has changed little, but the story varies widely across cities. Which cities are seeing progress, and where are we seeing a widening housing gap?

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ALED AB IORWERTH: To answer your first part first, it’s the cities in Alberta that are really closing their supply gaps. Edmonton has never really had a supply gap. Edmonton is a relatively affordable city, and they build a lot of housing. And what we’re seeing is that Calgary is moving in the same direction. Their housing starts have increased a lot, and their supply gap is decreasing. The cities where affordability is presenting challenges are now Ottawa and Montréal, where the supply gap has been increasing. It’s a little bit the same picture in the two cities where you’re seeing a loss of affordability and not quite enough housing supply. And so, the supply gap in those two cities has increased. It’s a little bit more of a mixed picture in Toronto and Vancouver, I would say. On the one hand, affordability has improved because house prices have dropped in those two cities. But then, and I think we’re going to dig into this, we have concerns about the state of housing supply. The housing supply in those two cities has not increased. So, there are offsetting effects in those two cities.

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MIREILLE THÉRIAULT: While every city’s story is different, there are emerging trends across Canada’s largest housing markets. What factors are driving the supply gap?

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ALED AB IORWERTH: Well, what we’re observing is that the rental sector — rental construction — is really holding up. We’re seeing a lot of rental supply across the country in all cities. It’s always been like that in places like Montréal and Edmonton. But we are seeing a lot of rental activity, purpose-built rental in Toronto and Vancouver. And these are the large buildings that are really dedicated to being rented. The other aspect, which is a little bit mixed across the country, is that the condominium supply is really on the way down. And this is particularly the case in Toronto, but it’s a little bit evident everywhere. And so, it’s this decline in condominium construction that is really an important factor in understanding the supply gap.

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MIREILLE THÉRIAULT: Developers make decisions based on today’s housing market. What impact does that have, or what does that mean for affordability over the next decade?

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ALED AB IORWERTH: Yeah, exactly. Developers obviously need to have their buildings occupied. And so, they need to have Canadians willing and able to move into their new units. And generally, because of construction costs, these units tend to be very expensive. Developers are really concentrating on making sure their units are filled, and that is conditional on the state of the economy. Obviously, as we know, there’s a lot of uncertainty in the economy at the moment, and that’s making people reluctant to either move into better rental units or to buy that first housing unit. And I think this is making developers very reluctant to commit a lot of capital to new construction. This is why we’re quite concerned about housing supply declining in the short term. Even though there’s a clear need for housing supply over the long term, over the next decade, developers have to obviously make a profit on their current developments, and the macroeconomic situation at the moment is creating some doubt in their minds and making them reluctant to commit capital.

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MIREILLE THÉRIAULT: Interesting. Purpose-built housing, rental housing, now accounts for two-thirds of all apartment starts in key markets. Are we building the right kind of homes?

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ALED AB IORWERTH: I think we need to maintain rental construction. This report is really concentrating on what we need for the next decade. And if you look out for the next decade, at some point, economic growth will reignite. Population growth may continue. And so, we really need to look out to the future. And that’s why through this period of economic uncertainty, we need to continue to increase housing supply. As I mentioned in the previous question, rental construction is being maintained, but what we’re really observing across the country is that homeownership supply has been declining. That’s the case in Toronto, Montréal, everywhere, and when it comes to “are we building the right type of supply?” I think we have to be a little bit cautious that not enough homeownership supply is being developed.

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MIREILLE THÉRIAULT: And what lies ahead for Canada’s housing market?

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ALED AB IORWERTH: I think over the long term, again, my hope is that the economic uncertainty is resolved in some way and that developers are able to recommit to building more housing because we clearly need more housing to be built. This is key to improving affordability for everybody in Canada. And that includes both rental construction and homeownership construction.

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MIREILLE THÉRIAULT: At the beginning of the episode, I asked whether we’re building enough housing. The answer is clear. Canada needs roughly twice as much housing construction as currently projected if affordability is to improve.

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MIREILLE THÉRIAULT: Aled, thanks for walking us through the Housing Supply Report. And thanks to our listeners for joining us. You can read the full results from the Housing Supply Report. Just check the episode description below. Thank you for joining us in-house. See you next time.

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[Joëlle Hamilton, Communications and Marketing, CMHC.]

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