Housing Construction Gains Momentum in September, CMHC Warns Canada Is Still Far Behind on Supply

Homebuilding activity across Canada showed renewed momentum in September, with housing starts increasing from the previous month, according to new data released by the Canada Mortgage and Housing Corp. (CMHC). Even so, the federal housing agency stressed that current construction levels remain insufficient to ease affordability pressures in urban markets.

CMHC said the seasonally adjusted annual rate of housing starts reached 223,808 units in September, representing a five per cent rise compared with August’s level of 213,012 units. The improvement was largely concentrated in cities, where urban housing starts climbed six per cent month over month to 210,002 units.

Measured on an actual, non-annualized basis, housing starts in urban centres have posted modest growth so far this year. From January through September, 168,897 new homes broke ground, a two per cent increase compared with 165,559 units over the same period in 2023.

Performance varied widely by region. Montreal recorded a strong rebound, with year-to-date housing starts up 15 per cent from last year. CMHC said this gain reflects a recovery following exceptionally weak construction activity in 2023.

Elsewhere, major markets have moved in the opposite direction. Vancouver’s housing starts are down 19 per cent so far in 2024 compared with last year, which had set a record pace. Toronto has seen an even sharper slowdown, with starts declining 20 per cent year to date, after an unusually strong construction year in 2023.

CMHC deputy chief economist Kevin Hughes said recent growth has been supported by both multi-unit and single-detached construction in Alberta, Quebec and the Atlantic provinces. However, he noted that Ontario and British Columbia continue to lag, with declines recorded across all housing types. Hughes added that, despite September’s increase, construction levels remain well below what is needed to meaningfully improve affordability in Canada’s largest cities.

By type of housing, the annual rate of urban multi-unit projects including apartments, condominiums and townhouses rose six per cent to 163,400 units in September. Starts for urban single-detached homes also advanced, increasing five per cent to 46,602 units.

In rural areas, CMHC estimated the annual pace of housing starts at 13,806 units for the month.

Looking beyond monthly fluctuations, the longer-term trend points to softening momentum. CMHC reported that the six-month moving average of the seasonally adjusted annual rate of housing starts edged lower to 243,759 units in September, down from 246,972 units in August, highlighting the ongoing challenge of scaling up housing supply nationwide.