Calgary apartment-construction projects will drive the market’s housing starts to a new high in 2024, says the Canada Mortgage and Housing Corporation.

Purpose-built rental apartments and condominium developments will lead the way, says the federal housing agency in its 2024 Housing Market Outlook.

The outlook comes after a record 9,304 apartments were started in 2023.

“Developers are projected to initiate further construction on multi-unit homes due to low vacancy rates and increasing demand for these types of dwellings,” stated CMHC in its 2024 Housing Market Outlook.

CMHC expects purpose-built rentals again to account for more than half of all apartments started. Calgary’s residential market has benefited from the city’s strong population growth through international and inter-provincial migration; larger populations of young adults and core working-age populations; and, rising employment, local wage and household income increases.

But CMHC warned that its outlook could change if inflation persists, interest-rate cuts occur later than expected and actual oil and gas prices significantly contradict estimates.

Despite forecasting more apartment starts, CMHC expects rental supply to tighten as population growth continues and fewer tenants move into home ownership.