The Canada Mortgage and Housing Corporation’s (CMHC) latest Housing Supply Report shows Canada is still falling well short of the construction pace needed to restore housing affordability. The report shows that even as some cities make progress, others fall further behind. During the COVID-19 pandemic, low interest rates sent demand for housing soaring. Immigration also boosted demand. This sent home prices higher, raising concerns about affordability and the supply of housing.

In its Fall 2026 Housing Supply Report, CMHC says Canada needs 417,000 to 469,000 new housing units per year over the next decade to return to 2019-level affordability. At the current pace, the country is on track to add only about 231,000 units annually, roughly half of what's required.

CMHC’s chief economist noted Canada is facing a significant risk if it underbuilds during this softer market, which could have Canada facing a shortage of housing when demand picks up again. The CMHC also noted new construction is slowing faster than demand.

Among the countries largest real estate markets, Toronto's supply gap has narrowed as lower prices improve affordability, but condo construction has weakened sharply. Vancouver's gap has held steady, supported by a shift toward purpose-built rental projects.

Structural headwinds remain persist. High construction costs, difficult presale financing soft condo market conditions continue to discourage new ownership-housing projects, even as population growth and rising incomes are expected to keep long-term demand strong.

For homebuyers and renters, the report underscores that affordability gains seen in some cities may prove temporary if construction doesn't keep pace once demand picks back up. With building costs already elevated and further pressured by ongoing trade tensions with the US, CMHC's message is that today's softer housing market is a window to build, not a signal to slow down.

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