Canada’s Housing Starts in 2024: Fall Update
In the first half of 2024, housing construction in Canada’s six largest census metropolitan areas (CMAs) saw a notable increase of 4% compared to the same period in 2023. This growth was primarily driven by significant expansions in housing starts within Calgary, Edmonton, and Montréal.
According to the latest Housing Supply Report (HSR) from the Canada Mortgage and Housing Corporation (CMHC), there were 68,639 new units constructed this year, up from 65,905 last year. While this marks the second-highest level of housing starts since 1990, when adjusted for population growth, the number of starts per 10,000 population across major CMAs remained close to historical averages. This indicates that despite increased construction activity, supply may still fall short of meeting rising demographic demands.
Record Year for Rental Construction
A key factor contributing to this rise is a surge in rental construction which has reached its highest share on record. Out of 49,172 apartment starts across these six CMAs during this period, an impressive 47% were purpose-built rentals. This shift reflects changing priorities as rental demand escalates due to declining homeownership affordability and tighter mortgage conditions.
Source: CHMC
Population-Adjusted Housing Starts
When evaluating housing construction metrics such as starts per 10,000 population, it becomes evident that overall housing activity across these six CMAs remained flat compared to 2023. This stagnation raises concerns about whether new constructions can keep pace with demographic demands—especially critical given long-standing supply gaps in cities like Toronto and Vancouver where affordability issues persist.
Regional Variations
Edmonton and Calgary Lead Housing Starts
Calgary and Edmonton have emerged as leaders in housing construction for 2024 due to robust economic conditions and affordable markets attracting interprovincial migration. Calgary achieved its highest recorded level of housing starts while Edmonton experienced its second-highest levels ever recorded:
- In Calgary: From 13.7 per 10K population in 2023 to 14.5
- In Edmonton: From 10.0 per 10K population rising dramatically to 19.8, marking it as the highest among all CMAs.
The CMHA attributes these trends largely to Alberta’s economic growth; real GDP per capita has outpaced Ontario’s by approximately 30%. Furthermore, relative affordability remains a significant draw compared with cities like Toronto or Vancouver where costs are nearly double relative incomes.
Montréal Recovers
Montréal experienced a resurgence with a remarkable recovery from a 26-year low seen last year—a staggering 58% increase was noted with 7,192 new rental units, predominantly purpose-built rentals reflecting strong market demand despite remaining below its ten-year average.
Declines Observed in Toronto, Vancouver & Ottawa
Conversely, Toronto saw declines ranging between 10%-20% alongside similar trends observed within Vancouver and Ottawa:
- In Toronto: Apartment starts fell sharply from 30.9 down to 26
- In Vancouver: A decrease from 47.6 downwards towards 38
These declines stemmed partly from investors reassessing their strategies amid rising interest rates coupled with softer resale market conditions leading them away from pre-construction commitments—making investments less appealing under current financial climates.
