Canada needs to build about twice as many homes annually over the next decade to restore housing affordability, the Canada Mortgage and Housing Corporation reported Thursday.

CMHC estimates that housing starts must rise to 430,000 to 480,000 per year until 2035 to meet projected demand.

“This will require action by everyone to change how we build homes,” said CMHC.

The required annual average equates to a total of about 4.8 million homes.

“Doubling the pace of housing construction in Canada is achievable, but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs,” said Aled ab Iowerth, a CMHC deputy chief economist. “It will also require significant innovation in construction technology and growth in labour productivity.

“By estimating housing-supply gaps across Canada, our goal is to ensure policymakers from all orders of government, as well as the private sector, understand the scale of the challenge. Systemic changes are essential if we are to double the pace of homebuilding in Canada.”

Montreal faces the largest housing-supply gap among the largest markets, while the Ottawa region, including Gatineau, Que., ranks second.

CMHC estimates that Toronto will require a 70% increase in homebuilding over the next decade.

“Despite increased rental construction in recent years, the region is lacking home-ownership options that match local incomes,” states the report.

Vancouver requires an estimated 7,200 new homes annually, while Calgary needs 45% more per year.

But Edmonton does not require additional supply beyond current projections, “as sufficient market housing is expected to be built in the region to maintain affordability by 2035,” said CMHC.

Provincially, Ontario, Nova Scotia and B.C. have the most significant supply gaps after seeing the fastest-rising housing costs since the pandemic.

In May, actual Canadian housing starts among large markets rose 9% year-over-year to 23,745 units. But housing starts declined 0.2% on a seasonally-adjusted basis.

CMHC attributed the increase to increases in single-detached home and purpose-built rental construction.

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