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Construction workers develop a new housing site in Ottawa in June.Sean Kilpatrick/The Canadian Press
The federal housing agency says Canada narrowly chipped away at its supply gap over the past year, but the country still needs up to nearly 4.7 million new homes over the next decade to restore pre-pandemic affordability by 2036.
Canada Mortgage and Housing Corp. released its latest supply gap estimate report, which said between 417,000 and 469,000 new housing units are needed per year across the ownership and rental markets over the next decade to reach affordability targets.
That’s down slightly from its last estimate in July, 2025, when CMHC said the pace of home construction would need to roughly double to between 430,000 and 480,000 new units annually over the coming decade.
But the agency says recent affordability gains are at risk as new home construction is instead expected to slow, especially in the home ownership market.
CMHC deputy chief economist Aled ab Iorwerth says housing costs have come down overall, citing slower population growth, but the “key risk now is Canada underbuilds during this softer market and finds itself further short of housing when demand strengthens again.”
Since the agency’s previous estimates, it says the housing supply gap has narrowed in Toronto, remained stable in Vancouver, and grown larger in Montreal and Ottawa. Meanwhile, record housing construction in Calgary has narrowed its housing supply gap “significantly,” while Edmonton remains the only large market in Canada without a housing supply gap.