The Canada Mortgage and Housing Corporation released data on Wednesday showing that the construction of purpose-built rentals and condominiums reached “record levels” in 2023.
The CMHC’s Spring 2024 Housing Supply Report revealed that purpose-built rental construction in six major markets hit record highs in 2023. Additionally, rentals made up a historically large portion of new construction starts.
The report stated that in 2023, purpose-built rentals made up 42 per cent of apartments breaking ground. Edmonton had the highest share of rentals among new constructions at 80 per cent.
The rental share in Toronto increased to over a quarter, even though condominium apartments still dominate.
In the six markets – Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montreal – condo construction starts also reached historic highs in 2023, with 57,121 units. The report attributed this to condo developers being able to sell pre-construction condos in 2021 and 2022.
The report mentioned that during that time, pre-construction investors were particularly motivated by rapidly increasing rents, price appreciation, and record-low interest rates in the market.
However, the CMHC anticipates a slowdown in condo construction starts in 2024 due to reduced pre-construction sales in 2023 and higher borrowing costs.
The report suggested that Canadians may reside in denser accommodations in the future as fewer single-detached homes are being constructed.
According to the report, apartment starts witnessed a seven per cent overall surge, reaching a record high of 98,774 units in 2023. It also noted that this increase was counteracted by a decrease in the construction of ground-oriented homes, with single-detached starts dropping by 20 per cent – the most significant decline among all housing types.
This occurred after the federal government encouraged municipalities to implement zoning changes last year as part of the Housing Accelerator Fund. zoning changes last year, as part of the Housing Accelerator Fund.
Prime Minister Justin Trudeau stated last October that “densification” was crucial to solving Canada’s housing crisis. In September, he also announced the removal of GST on purpose-built rentals, a pledge that the Liberals had initially made in 2015 but had not come to fruition until now.In six markets, Vancouver, Calgary, Edmonton, Toronto, Ottawa, and Montreal, condo construction starts reached historic highs in 2023, with 57,121 units.” was key to solving Canada’s housing crisis. In September, he also announced the removal of GST on purpose-built rentals. The idea was first put forward as a 2015 campaign pledge by the Liberals, but it had never come into fruition until now.
