Canada’s Ownership Housing Pipeline Is Running Dry, and the Cost Will Land on the Next Cycle

Canada’s Ownership Housing Pipeline Is Running Dry, and the Cost Will Land on the Next Cycle

Every development cycle has a moment where the numbers stop being abstract and start describing a real shortfall. Canada Mortgage and Housing Corp.’s Fall 2026 Housing Supply Report is that moment. CMHC now estimates the country needs between 417,000 and 469,000 housing starts a year for the next decade to bring affordability back to pre-pandemic levels by 2036. Current projections sit near 231,000. That gap, roughly 187,000 to 238,000 homes annually, is not a rounding error. It is a structural failure of pipeline planning, and it is happening in plain sight.

What makes this report significant for anyone thinking about land and long term city growth is not just the size of the gap, it is where it is concentrated. Purpose-built rental construction is doing its job. Two thirds of apartment starts across the major markets CMHC tracked are now rental, and rental market balance is genuinely improving as that supply lands. But condominium and ground-oriented ownership construction has essentially stalled in Toronto, Vancouver, Ottawa and Montreal. Those product types have historically fed two markets at once, direct ownership and secondary rental supply through investor-owned units. When that construction disappears, both channels dry up eventually.

Toronto is the starkest illustration. The report shows just 156 condominium units started construction in the city during the first half of 2026, against a ten-year annual average near 7,000. Population-adjusted starts are at their lowest since 1996, aside from last year, and the inventory of permitted units waiting to break ground has fallen by half since its 2023 peak. CMHC puts Toronto’s required annual increase in starts at 50 per cent just to restore 2019-level affordability, an additional 21,000 to 26,000 starts a year. Meanwhile rental apartment starts in the region rose 82 per cent year over year and outpaced condo starts for the first time since 1994.

This is where feasibility strategy matters more than sentiment. Rental has been rational for developers to chase given financing incentives, municipal support programs and softer presale conditions for condos. But CMHC’s own framing is the important part here.

The regional variation reinforces that this is a land strategy and policy problem, not a uniform national trend. Montreal carries the largest estimated gap of the major markets, 42,000 to 56,000 starts annually. Ottawa needs 22,000 to 27,000 more, Vancouver 5,000 to 7,000, Calgary 4,000 to 5,000. Edmonton stands alone with no measurable gap, because its construction has actually tracked population growth. That is not luck, it is a signal about how land release, approvals timelines and municipal capacity interact with demand.

Population growth is soft right now, which is exactly why this window matters. Building through a slow demand period is how cities avoid a supply crisis when growth and incomes recover, as CMHC expects they will in most major markets. Developers, planners and municipal partners who use this period to re-approve ownership product, not just rental, will be the ones positioned when the cycle turns. Those who don’t will be explaining another affordability crisis a decade from now, one that this report shows arriving with plenty of warning.

Source: Real Estate Magazine, “Canada’s housing construction shifts to rentals as ownership supply weakens: CMHC”