How many homes does Canada need to build?

CMHC estimates Canada needs to build 3.5 million additional homes by 2030 (beyond normal replacement) to restore affordability to 2003–2004 levels. That would require roughly 500,000–600,000 housing starts per year — compared to the current pace of approximately 220,000–240,000. Even the most optimistic construction scenarios fall well short of this target, suggesting the supply gap will persist for years.

How many housing starts are there in Canada per year?

Canada averaged approximately 220,000–250,000 housing starts per year from 2020 to 2025. This includes all types of residential construction: detached houses, semi-detached, row houses, and apartments. The all-time high was roughly 270,000 in 2021. Current levels are near historical averages but far below what is needed to address the supply gap.

Why can't Canada build enough housing?

The key bottlenecks are: (1) Municipal zoning and land use restrictions that limit where and what type of housing can be built; (2) Lengthy approval processes that can take 2–10 years from application to construction; (3) Labour shortages in skilled trades; (4) Rising construction costs (materials, labour, development charges); (5) NIMBY opposition to density; and (6) Infrastructure constraints (water, sewer, transit) in many municipalities.

What types of housing are being built in Canada?

The mix has shifted significantly. Apartments (condos and rental) now account for roughly 55–65% of all housing starts, up from 30–40% twenty years ago. Single-detached homes have declined from 50%+ of starts to about 20–25%. Row houses and semi-detached make up the remaining 15–20%. This shift reflects land costs and density policies in major cities.

Housing Starts and Supply Gap Analysis: CMHC Data and What It Means for Canada

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:

Metric	Number	Context
Current housing stock	~17 million units	All residential dwellings
Housing needed by 2030 (CMHC estimate)	20.5 million units	To restore affordability to 2003–2004 levels
Supply gap	~3.5 million homes	Cumulative, by 2030
Annual starts needed (to close gap)	500,000–600,000/year	Through 2030
Current annual starts pace	220,000–240,000	2024–2025 average
Annual shortfall	260,000–360,000 homes/year	Gap between what we’re building and what we need

Source: CMHC “Canada’s Housing Supply Gaps” report (2022, updated 2024).

What does 3.5 million homes look like

Comparison	Number
3.5 million homes	More than the entire housing stock of BC (~2.1M)
Equivalent to building	A new city of Calgary every year for 7 years
At current completion rate	Would take 15+ years to build (at ~230K/year)
Time available (CMHC target)	4–5 years remaining (target is 2030)
Reality check	Target is essentially unachievable by 2030

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
Realistic scenario	Programs add 10,000–25,000 units/year → marginal improvement
Time horizon	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