Alberta, Quebec, and the Atlantic provinces are experiencing an increase in construction, while Ontario and British Columbia are declining.

The Canadian housing market saw a modest increase in the number of new homes built in 2024, with the Canada Mortgage and Housing Corporation (CMHC) recording a total of 245,120 new building projects, compared to 240,267 in the previous year, representing a 2% increase from 2023.

Matthew Laberge, Chief Economist at CMHC, stated in a press release: “Urban centers in Canada witnessed an increase in new housing construction in 2024 compared to last year, making it the third highest recorded year.”

Insufficient increase to address the housing crisis

Despite this slight increase, Laberge emphasized that growth is still well below the level needed to address the challenges of housing affordability in Canada and meet future construction estimates.

He added that the growth is primarily driven by an increase in rental housing construction and growth in specific provinces, while other types of housing and regions are still lagging behind demand.

Regional variation in construction

In centers with populations exceeding 10,000, Alberta saw an increase of 32% and Quebec by 26%, while construction numbers in Ontario fell by 16% and British Columbia by 9%.

Six major urban areas also experienced an overall decline of 3% in 2024, as construction rates dropped in Vancouver, Toronto, and Ottawa, while they increased in Calgary, Edmonton, and Montreal.

The need for more housing units

Last spring, CMHC estimated that Canada needs to build up to 400,000 new housing units annually. Laberge clarified that “Canada still needs a significant increase in supply to restore affordability in urban centers.”

CMHC added that Canada needs an additional 3.5 million housing units by 2030, on top of the 2.3 million units already expected, to regain the affordability seen in 2004.

Economic challenges affecting construction

According to economist Katherine Judge from CIBC, declining interest rates may lead to increased construction, but it will remain limited due to weak pre-sale unit sales. Data showed that the annual urban construction rate in December dropped by 14% to 214,000 units, while multi-unit housing construction rates fell by 15%, and single-family homes decreased by 10%.