October 6, 2023
Housing starts across Canada’s largest cities saw just a 1% growth in the first six months of 2023, compared to the first half of 2022. This according to the latest edition of Canada Mortgage and Housing Corporation’s (CMHC) Housing Supply Report (HSR), which examines new housing construction trends in Canada’s six largest Census Metropolitan Areas (CMAs).
Tighter borrowing conditions, elevated construction and labour costs, and high interest rates created challenging conditions for homebuilders across all six major markets. Additionally, construction timelines saw a slight increase from the first half of 2022, up 0.9 months.
Toronto and Vancouver accounted for nearly two-thirds of the housing starts across the 6 markets, with apartment starts making up nearly three-quarters of all housing construction. The strong apartment growth observed in Toronto and Vancouver was offset by declines in Canada’s other largest centres.
- On September 26, 2023, the Department of Finance announced that the annual limit for Canada Mortgage Bonds is being increased from $40 billion to up to $60 billion. This will signal to builders that they can rely on additional low-cost financing and allow more rental supply projects to move forward.
- On September 21, 2023, the Government of Canada introduced legislation that would remove the federal component of the Goods and Services Tax (GST) on new purpose-built rental housing projects. This adds to other recent policies that will help counteract the challenges identified in this report and will help enhance the viability of much needed rental supply projects.
- On September 13, 2023, the Prime Minister of Canada announced a funding agreement for the City of London, Ontario, as the first successful Housing Accelerator Fund (HAF) application. The HAF is a $4 billion application-based initiative designed to help cities, towns, and Indigenous governments unlock new housing supply.
- CMHC’s housing starts data for July and August, 2023, shows a continuation of the overall trend observed in this report as new home construction remained relatively flat at the national level.
- CMHC recently updated its Supply Gaps Estimate (SGE) Report from June 2022. The update shows the overall national supply gap remains at approximately 3.5 million more housing units by 2030, over and above what is already projected to be built by that time.