Apartment construction sustains housing starts in Canada's Largest cities

A surge in apartment construction, particularly in Toronto, ON; Vancouver, BC; and Calgary, AB; more than offset declines in single-detached and semi-detached construction, causing the overall level of new home construction in Canada's six largest cities for 2023 to remain virtually unchanged from 2022, says the Housing Supply Report (HSR), released today by Canada Mortgage and Housing Corporation (CMHC), which examines new housing construction trends in Canada's six largest census metropolitan areas (CMAs).

Apartment construction, which includes both purpose-built rental and condominium apartments, reached record levels in Toronto, Vancouver, Calgary. Ottawa, ON, and Montreal, QC, however, hit an eight-year low.

"There were a large number of housing starts in 2023, particularly in the rental segment, which is good progress, but not enough to improve affordability,” says Aled ab Iorwerth, deputy chief economist for the CMHC. “The concern now shifts to whether construction of apartments will hold at these high levels in 2024. Clearly the demand for housing exists, particularly in rental, but financing costs could become too heavy for homebuilders to begin construction on large multi-family projects at the same pace seen in 2023."