Housing Starts and Supply Gap Analysis: CMHC Data and What It Means for Canada
Updated
Canada has a housing supply problem that no amount of demand management — stress tests, foreign buyer bans, or tax changes — can solve on its own. We need to build more homes. The question is: how many, what type, where, and how fast? CMHC data gives us detailed answers.
Canada’s housing supply gap
The CMHC supply gap estimate
In 2022, CMHC published a landmark analysis estimating Canada’s housing supply gap. Updated through 2025:
CMHC has acknowledged that the 2030 target is aspirational rather than realistic. The practical question is how much of the gap can be closed.
Housing starts data
Annual housing starts (national)
Year
Total Starts
Single-Detached
Multi-Unit
Multi as % of Total
2000
152,000
82,000
70,000
46%
2005
225,000
108,000
117,000
52%
2007
228,000
104,000
124,000
54%
2009
149,000
54,000
95,000
64%
2010
190,000
72,000
118,000
62%
2015
196,000
68,000
128,000
65%
2017
220,000
72,000
148,000
67%
2019
209,000
61,000
148,000
71%
2020
217,000
62,000
155,000
71%
2021
271,000
71,000
200,000
74%
2022
262,000
60,000
202,000
77%
2023
240,000
52,000
188,000
78%
2024
230,000
48,000
182,000
79%
2025 (est.)
235,000
50,000
185,000
79%
2026 (est.)
240,000–260,000
50,000–55,000
190,000–205,000
79%
Source: CMHC Housing Starts data.
The shift to multi-unit housing
Decade
Single-Detached Share
Multi-Unit Share
Dominant Type
1990s
55%
45%
Detached houses
2000s
48%
52%
Shifting to multi-unit
2010s
35%
65%
Apartments dominant
2020s
22%
78%
Overwhelmingly apartments
Single-family home construction has collapsed as a share of new supply. This is driven by:
Factor
Explanation
Land costs
Urban and suburban land is too expensive for detached homes in many markets
Zoning
Many municipalities are increasing density requirements
Developer economics
Multi-unit projects generate more revenue per acre
Buyer affordability
Condos and townhouses are cheaper entry points
Government policy
Density bonuses, transit-oriented development requirements
Provincial housing starts
Annual starts by province (2025 estimates)
Province
Housing Starts
Share of National
Population Share
Building Enough?
Ontario
85,000
36%
39%
No — under-building relative to population
Quebec
40,000
17%
23%
No — under-building
British Columbia
45,000
19%
14%
Closer — but still insufficient
Alberta
38,000
16%
12%
Over-building relative to population (good)
Manitoba
7,000
3%
4%
Slightly under
Saskatchewan
5,000
2%
3%
Under
Nova Scotia
7,000
3%
3%
Roughly matched
New Brunswick
4,500
2%
2%
Roughly matched
Newfoundland
1,500
1%
1%
Matched (low growth)
PEI
1,500
1%
<1%
Over-building (relatively)
Where the gap is worst
Metro Area
Annual Starts (2025)
Starts Needed (CMHC est.)
Gap
Gap as %
Toronto CMA
42,000
75,000–85,000
−33,000 to −43,000
44–51% short
Vancouver CMA
28,000
40,000–50,000
−12,000 to −22,000
30–44% short
Montreal CMA
20,000
30,000–35,000
−10,000 to −15,000
33–43% short
Ottawa-Gatineau
10,000
14,000–16,000
−4,000 to −6,000
29–38% short
Calgary CMA
22,000
18,000–22,000
0 to +4,000
Meeting or exceeding need
Edmonton CMA
16,000
14,000–16,000
0 to +2,000
Meeting need
Alberta’s cities are the only major metros building enough housing relative to population growth. Ontario’s cities have the largest absolute and relative gaps.
Why we can’t build faster
The bottleneck analysis
Bottleneck
Impact
Fixable?
Timeline to Fix
Zoning / land use
Prevents multi-family in 70%+ of urban residential land
Yes — policy change needed
2–5 years (municipal level)
Approval timelines
2–10 years from application to construction start
Partially — process reform possible
3–5 years
Labour shortage
Not enough skilled trades workers
Partially — immigration, training
5–10 years
Construction cost inflation
Materials and labour up 30–40% since 2019
Partially — some stabilization
Ongoing
Development charges
Municipal fees add $50K–$150K per unit in some cities
Yes — policy change
Immediate (if governments act)
NIMBY opposition
Local residents block new housing proposals
Slowly improving
Generational shift
Infrastructure constraints
Water, sewer, transit capacity limits new development
Yes — requires investment
5–15 years
Financing conditions
Higher rates make project economics challenging
Cyclical — improves with rate cuts
1–3 years
Developer concentration
A few large developers control project pipelines
Structural — hard to change
Long-term
The zoning problem
Fact
Data
Share of Toronto residential land zoned for single-detached only
~70%
Share of Vancouver residential land zoned for single-detached only
~65% (before recent changes)
Share of Ottawa residential land zoned for single-detached only
~75%
Impact
Prevents townhouses, duplexes, triplexes, and apartments on most residential land
Recent policy changes (Ontario’s Bill 23, BC’s small-scale multi-unit legislation) are beginning to address this, but the effects will take years to materialize.
The approval timeline problem
Stage
Typical Duration
Bottleneck
Pre-application consultation
3–12 months
Municipal staff capacity
Zoning amendment (if needed)
6–24 months
Public hearings, council votes, appeals
Site plan approval
6–18 months
Technical review, revisions
Building permit
3–12 months
Review backlog
Total: application to construction
2–5 years (routine) to 7–10 years (complex)
Construction itself
2–4 years (multi-unit)
Labour, materials, weather
Total: concept to occupancy
4–14 years
A housing project conceived today won’t add supply for 4–7 years at minimum. This is why the supply gap can’t be fixed quickly.
The labour shortage
Trade
Vacancy Rate
Retirement Risk (workers age 55+)
Median Age
Carpenters
5–7%
22%
41
Electricians
4–6%
20%
40
Plumbers
5–8%
24%
42
Crane operators
6–10%
28%
45
Concrete workers
4–7%
20%
39
All construction trades
5–7% average
22% average
41
Source: BuildForce Canada, Statistics Canada.
An estimated 300,000 construction workers will retire over the next decade, while the industry needs to grow its workforce to meet housing targets.
The construction cost problem
Component
Cost Increase (2019–2025)
Impact on Per-Unit Cost
Lumber
+40–60% (volatile, settled from 2021 peak)
+$10,000–$20,000 per unit
Steel/concrete
+20–30%
+$5,000–$15,000
Labour
+25–35%
+$20,000–$40,000
Development charges
+30–60% (Ontario especially)
+$20,000–$60,000
Land
+20–50% (varies by city)
+$30,000–$100,000
Total cost increase per unit
+$85,000–$235,000
In many markets, it’s now difficult to build new housing that’s affordable to median-income buyers. The cost of construction sets a floor price that is already above what many Canadians can pay.
Government supply-side initiatives
Federal programs
Program
How It Works
Annual Funding
Estimated Impact
Housing Accelerator Fund
Municipalities receive funding for zoning/process reform
$4 billion total
Target: 100,000+ additional units enabled
Apartment Construction Loan Program
Low-cost loans for purpose-built rental construction
$40 billion in loans
Supports thousands of units
Canada Housing Infrastructure Fund
Infrastructure funding tied to housing-enabling zoning
$6 billion
Enables development in underserved areas
Public Lands for Homes
Federal surplus lands made available for housing
Varies
Limited — relatively few suitable sites
GST removal on rental construction
Eliminates 5% GST on new purpose-built rental
Tax expenditure
Improves rental project economics
Provincial initiatives
Province
Key Initiative
Target
Ontario
Bill 23 (More Homes Built Faster Act)
Reduce barriers, speed approvals, allow density
BC
Small-Scale Multi-Unit Housing legislation
Allow 3–6 units on most residential lots
Alberta
Additional funding for affordable housing
Increase social and affordable supply
Quebec
Renovation tax credits, rental construction incentives
Support rental construction
Nova Scotia
Housing Task Force recommendations
Speed approvals, increase density permissions
Will these programs close the gap?
Assessment
Details
Optimistic scenario
Programs add 30,000–50,000 units/year above baseline → gap still exists but shrinks
Most policy changes won’t show results for 3–5 years (approval → construction → completion)
Remaining gap
Even with all programs working, Canada will fall well short of CMHC’s 3.5M target by 2030
What the supply gap means for you
Impact on home prices
Scenario
Supply Outcome
Price Impact
Gap persists (most likely)
Starts stay at 230,000–260,000/year
Prices supported — 2–4%/year appreciation
Moderate improvement
Starts increase to 300,000/year
Slower price growth — 1–2%/year
Gap closes (unlikely by 2030)
Starts reach 400,000+/year sustained
Price pressure eases — flat to modest growth
Gap widens (recession)
Starts fall below 200,000
Price support strengthens (less supply)
Impact on rents
Current Rental Vacancy Rate
Impact
Below 2% (most major cities)
Rents continue to rise 3–6%/year
2–3% (balanced)
Rents grow in line with inflation
Above 3% (some condo-heavy markets)
Rents stabilize or decline modestly
The supply gap affects renters as much as buyers. Without adequate new rental supply, rents will continue rising faster than inflation in most urban markets.
What it means for different buyers
Buyer Type
Implication
First-time buyer
Supply gap supports prices — entry remains expensive; consider condo or suburban markets
Move-up buyer
Your existing home retains value; trade-up gap is the main challenge
Investor
Supply constraints support rents and prices — but development charges and construction costs hurt new builds
Downsizer
Strong demand for your existing home; good time to sell, downsize, and capture equity
Types of supply that would help most
The “missing middle”
Housing Type
Current Share of Starts
Optimal Share
Why It’s Missing
Detached houses
21%
15–20%
Land costs too high for most urban locations
Semi-detached
4%
8–10%
Zoning restrictions on many lots
Row houses / townhouses
14%
20–25%
Zoning, developer preference for higher-density
Missing middle (duplex, triplex, fourplex)
3–5%
15–20%
Zoned out of most residential neighbourhoods
Low-rise apartments (4–6 stories)
12%
15–18%
Height restrictions, NIMBY opposition
High-rise apartments
45%
25–30%
Over-represented due to being only density allowed
The “missing middle” — duplexes, triplexes, fourplexes, and low-rise apartments — is the housing type that could most efficiently add supply to existing neighbourhoods. But zoning has effectively banned it from most residential land for decades.
The bottom line
Canada needs 3.5 million additional homes by 2030 — an effectively unachievable target at current building rates
We’re building ~235,000 homes/year but need 500,000+ — the gap is roughly 260,000–360,000 homes annually
The biggest bottlenecks are zoning, approvals, and labour — not capital or land availability
Toronto, Vancouver, and Montreal have the largest gaps — Alberta is the only region building enough
Policy changes are underway but won’t show results for years — a project started today takes 4–7+ years to reach occupancy
The supply gap supports prices and rents — constrained supply means prices are unlikely to fall significantly without a recession