Canada Needs 4.69 Million New Homes by 2036
CMHC estimates annual construction must reach 417,000 units to close the housing gap, but current starts are down four percent.
Canada requires up to 4.69 million new housing units by 2036 to restore affordability. The Canada Mortgage and Housing Corp. states this target represents the minimum annual output needed over the next decade. Current construction levels fall significantly short of this requirement.
Housing starts through July 2025 totaled 131,851 units. This figure is down four percent compared to the same period in 2024. CMHC warns that construction is slowing faster than demand, creating a persistent supply deficit.
Construction pace lags demand
The agency projects an average of 231,000 units per year over the next decade. This pace is roughly half the 417,000 to 469,000 units needed annually. CMHC notes this estimate is slightly lower than the 430,000 to 480,000 range cited in July 2025.
High construction costs and difficult presale financing conditions pressure developers. Weak condominium market conditions have made builders cautious about launching new projects. CMHC deputy chief economist Aled ab Iorwerth identifies underbuilding during this soft market as the key risk.
Regional supply gaps vary
The housing supply gap has narrowed in Toronto due to lower home prices. However, new construction activity has weakened sharply in the city’s condo market. Vancouver’s gap remains stable, with improved affordability offset by slower future supply growth.
Calgary has narrowed its supply gap by almost half following record construction levels. Edmonton remains the only large Canadian market without a housing supply gap. Montreal and Ottawa have seen their gaps grow larger over the past year.
Affordability targets define need
CMHC defines affordability as housing costs not exceeding 30 percent of average gross household income. The goal is to return to 2019 levels of adjusted house prices by 2036. Population growth is expected to recover across most major cities, supporting future demand.
Some households delayed forming due to affordability challenges. This suppressed demand is expected to re-emerge as conditions improve. GN auto markets/housing data indicates that meeting this demand relies entirely on the pace of new construction.
