Canada’s national housing agency says construction of sought-after homes jumped 44% in 2024, a rare bright spot in a strained market. The surge points to faster building in some cities, while others lag due to costs, zoning, and permit delays.
“The CMHC says construction in Canada of this sought-after housing rose 44% in 2024, but some cities doing a better job than others.”
The development upswing arrives as affordability remains under pressure. The Canada Mortgage and Housing Corporation (CMHC) has warned that the country needs millions more homes by 2030 to restore affordability. The latest increase suggests that policy changes and private investment may be starting to bite, though gains are uneven.
Why the National Jump Matters
Canada’s housing shortage has built up over years of underbuilding, rapid population growth, and rising construction costs. Rents and prices climbed as supply failed to keep pace. A 44% rise in building activity in 2024 signals that builders are moving forward despite high interest rates and labor shortages.
CMHC has previously estimated that Canada needs an additional multi-million home buildout by 2030 to meet demand. This year’s acceleration helps close the gap, but it is far from enough on its own. The uneven progress across cities suggests local rules and market forces are shaping where shovels hit the ground.
Cities Pull Ahead, Others Fall Behind
Local policy has become a key driver of construction. Cities that cut red tape, opened more land to housing, or scaled back fees have given builders clearer paths to break ground. Provinces have also stepped in with rules to allow more homes on residential lots and near transit.
Recent policy examples include:
- British Columbia’s move to allow small-scale multi-unit housing on most lots.
- Toronto’s shift to permit more units on single lots and around transit corridors.
- Calgary’s citywide rezoning to allow more gentle density on residential streets.
Where these changes are paired with quicker permitting and infrastructure plans, projects have advanced. In places where approvals remain slow or costs are high, building has lagged. That split explains why some metros are “doing a better job than others.”
What Is Being Built—and Why It’s Sought After
The agency described the new supply as “sought-after housing.” That typically points to homes in high demand, such as rental apartments, entry-level ownership units, and modest multi-unit homes that fit near jobs and transit.
Developers have leaned toward projects that are easier to finance and lease, even with high borrowing costs. Smaller apartments and mid-rise buildings can move faster than large towers or luxury projects. Policy that permits more units per lot has also spurred gentle density in established neighborhoods.
Implications for Affordability
More supply can slow rent growth and temper price pressure, but effects take time. New units must reach occupancy, and the mix of homes matters. If most new units target higher-income households, relief for middle- and lower-income renters will be limited.
Federal and provincial programs aimed at non-profit, co-op, or deeply affordable units remain important. These can complement private development and serve households not reached by market supply alone.
Signals to Watch Next
Construction costs and interest rates will shape the pace of building for the rest of the year. Permit volumes, time-to-approval, and availability of skilled labor are also critical. The durability of the 44% jump will depend on whether cities maintain pro-housing rules and whether financing conditions stabilize.
Key indicators include starts and completions, the share of rental versus ownership units, and whether new homes are opening near transit and job centers. Consistent gains across multiple cities would suggest the upswing is broadening.
Canada has a long way to go to close its housing gap. The latest surge is a step in the right direction. The next test is whether faster-building cities can sustain the pace and whether lagging regions can clear bottlenecks. If the momentum holds, renters and first-time buyers could see gradual relief in the years ahead.
