National housing starts
When the CMHC accounts for the difference in population – by looking at housing starts per 100,000 – the level of activity isn’t enough to reduce the existing supply gap.
Outside of purpose-built apartment rentals in Montreal and Alberta, apartment starts were down in the six CMAs this year. Combined apartment starts increased only marginally so far this year.
The 49,172 apartment starts in the first half of 2024 made up 72% of all new home construction in the six CMAs. Construction of rental housing, supported by many government incentives and policies, made up the highest share of apartment starts on record (47%) and over one third of total housing starts.
Developers have spent more time in the first half of the year completing projects rather than starting them. The average cross-market Building Construction Price Index (BCPI) for apartments, reported by Statistics Canada, rose by 4%, compared to 8% in the previous year. In Toronto, the index growth slowed the most, dropping from 15% to 5%.
Developers were better able to manage completions, particularly in markets where starts were delayed. Apartment completions increased in all CMAs, reaching record levels in Toronto, Ottawa, Calgary and Edmonton.
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Start Trading TodayCMA-specific highlights
Montréal saw a 106% increase in rental construction, with 7,192 new rental units being started, the most out of the six markets covered. That also led to a 58% rebound in overall housing starts, up from last year's 26-year low. Yet this is still below the ten-year average.
Calgary, Edmonton and Montréal saw big increases in total housing starts ranging from 40% to 70%. In contrast, Toronto, Vancouver and Ottawa saw declines ranging from 10% to 20%.
Toronto and Vancouver have a stronger investor presence, thanks to the secondary condo market. The fall in apartment, and in particular condo starts, can be attributed to pre-construction apartments seeming less appealing amid high financing costs and lower demand, mainly in these cities.
The CMHC’s data “suggests that projects that secured enough sales to proceed were, on average, smaller in size (fewer units and storeys) than those in the first half of 2023. They were also likely less costly,” the report reads.
At the same time, Calgary and Edmonton led the growth in housing starts due to record interprovincial migration in recent years, thanks to their lower cost for housing and favourable economic conditions. In contrast, housing starts decreased in Toronto, Vancouver and Ottawa.
When adjusting for population, Edmonton had the highest rate of purpose-built rental construction, with 20 rental apartments started per 10,000 population.
As well, in Calgary, the CMHC has seen “significant” office-to-residential conversions.
In the least affordable markets, Toronto and Vancouver, and the less expensive Ottawa market, single-detached, semi-detached and row starts have fallen further below historical averages.
Except for Calgary and Edmonton, condominium apartment starts fell in the first six months of 2024 – a trend the CMHC expects will continue as developers struggle to reach the minimum pre-construction sales needed to start construction.
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