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Housing MarketCMHC: Canada Still Needs Up to 4.69 Million New Homes by 2036
CMHC's latest Housing Supply Report says recent affordability gains are at risk, because new construction is slowing faster than demand — and Ontario's two largest markets are heading in opposite directions.
The short version
- CMHC's latest Housing Supply Report says Canada needs 417,000 to 469,000 new homes built every year for the next decade to restore pre-pandemic affordability by 2036.
- At the current construction pace, Canada is on track for roughly 231,000 units a year — about half of what's needed.
- Toronto's supply gap has narrowed as prices have softened, but new construction there has weakened sharply, especially for condos.
- Ottawa's gap has grown, with new supply concentrated in rental housing while ownership construction stays low.
What CMHC's Housing Supply Report actually says
Recent gains in housing affordability are real, according to CMHC's latest Housing Supply Report — and they're also fragile, because construction is slowing faster than demand is.
CMHC's estimate: Canada's housing starts need to rise to between 417,000 and 469,000 annually over the next decade to restore affordability to pre-pandemic levels by 2036. Across that decade, the agency says, that adds up to needing up to nearly 4.7 million new homes across the ownership and rental markets combined.
That's down slightly from CMHC's July 2025 estimate of 430,000 to 480,000 units a year, and the agency says the national supply gap is broadly unchanged from a year ago. What's changed is the risk sitting underneath that number: a total of 131,851 housing starts were recorded through July of this year, down 4% from the same seven-month stretch in 2025. At the current pace, Canada is on track for around 231,000 units annually over the next decade — roughly half the pace CMHC says is needed.
Why construction is slowing while demand keeps building
“Although slower population growth has brought some improvements in affordability, new construction is slowing faster than demand,” CMHC Deputy Chief Economist Aled ab Iorwerth said in the agency's release. “The key risk now is Canada underbuilds during this softer market and finds itself further short of housing when demand strengthens again.”
CMHC points to high construction costs, difficult presale financing for developers, and weak condominium market conditions as the pressures keeping new projects from launching. And the agency expects the slowdown to hit ownership-oriented supply hardest: across most major markets, new housing is increasingly dominated by rental construction, while the homes people can actually buy are the ones not getting built.
None of this shows up as an immediate shortage, because population growth has also cooled. CMHC's own framing is about what happens next: some household formation has been delayed by affordability pressure already, and as conditions ease further, that suppressed demand doesn't disappear — it re-emerges, against a supply pipeline that's been quietly shrinking.
Toronto and Ottawa, moving in opposite directions
The national number hides real variation between markets, and Ontario's two largest CMAs illustrate it well. In Toronto, CMHC says the supply gap has narrowed as lower home prices have improved affordability — but new construction activity has weakened sharply there too, particularly in the condo market, which limits how much ownership supply actually reaches the market going forward. With rental housing now driving most of the region's new supply, CMHC says Toronto still needs to increase annual housing starts by at least 50% over the next decade just to restore pre-pandemic affordability.
Ottawa is heading the other way: CMHC reports the capital's supply gap has grown larger over the past year. Construction there remains concentrated in rental housing while homeownership supply stays low, and the agency expects housing demand to keep outpacing new supply despite otherwise strong construction activity in the region.
The pattern nationally: Calgary has narrowed its gap by almost half on record construction, and Edmonton remains the only large Canadian market with no supply gap at all, because building has kept pace with population growth there. Montreal's gap, like Ottawa's, has widened, with ownership starts near multi-year lows even as rental construction stays strong.
What a national supply gap means for a household buying in Ontario
A supply-gap report doesn't tell you what a single home is worth, and it isn't a signal to time a purchase around. What it does explain is the structural backdrop behind why homeownership options in Ontario's larger centres have stayed tight even as prices have cooled from their peaks: the shortage was never just about pricing, it was about how few ownership-oriented homes were being built relative to how many households wanted one.
For anyone actually shopping right now, that backdrop is a reason to widen the search rather than wait for it to resolve on its own. Waterloo Region, London, and the rest of southwestern Ontario carry a different construction and pricing profile than Toronto or Ottawa, and a plan built around your own numbers — not a headline about the national market — is what actually gets someone into a home.
Nearly thirty years in Canadian financial services, based in Waterloo Region and working across Ontario. Most people are handed a product — you deserve a plan.
Figures cited are drawn from CMHC's published Housing Supply Report and news release and describe national and metro-area aggregates, not any individual property or market. Everything here is general information only, illustrative, and subject to full qualification, lender approval and final terms.
Sources: CMHC — Slowing Home Construction Threatens Recent Affordability Gains (news release) · Canadian Mortgage Trends — Canada Needs Up to 4.69 Million New Homes by 2036, But Construction Could Slow: CMHC