The Canada Mortgage and Housing Corporation (CMHC) reports that new housing construction in Canada’s six largest cities increased 4% from a year earlier in the first half of 2024, but Construction starts were still not sufficient to meet growing demand.
The agency notes that the growth in housing starts was fueled by significant gains in Calgary, Edmonton and Montreal.
A total of 68,639 units began construction, the second highest figure since 1990, but the per capita housing starts rate showed activity around the historical average and insufficient “to narrow the current gap between supply and demand and improve housing affordability in Canada.
The report said new housing construction trends varied significantly across the markets studied, with Toronto, Vancouver and Ottawa seeing declines ranging from 10 to 20 per cent compared to the same period last year.
Apartment starts in all six census metropolitan areas increased slightly, boosted by the construction of new rental units. Nearly half of the apartments started in the first half of 2024 were intended for rental – unheard of in almost 30 years, according to CMHC.
But condo starts fell in the first six months of the year in most cities, a trend the agency expects will continue amid weak demand as developers struggle to achieve the required minimum sales before construction.
Increase of 58% in the Montreal region
After a “steep descent” in 2022 and 2023, housing starts in the greater Montreal region have “firmed up” in recent months, indicates CMHC.
All the same, the level is lower than the historical average in proportion to the population, with 20 units per 10,000 inhabitants which were started in the first half of the year.
“With the sharp increase in population over the past two years, the pace of construction is struggling to keep up with the growth in housing needs,” says the report.
From January to June 2024, housing starts increased by 58% compared to the same period last year, with renewed activity seen in large rental apartment buildings in West Island. Montreal.
Overall, the rental market remains the driving force behind residential construction in the metropolis. In the first half of the year, three out of four units started were apartments intended for rental.