Apartment construction surged last year but demand still outpacing supply, says CMHC

A surge in new apartment construction drove housing start increases in several major Canadian cities last year, but demand continues to outweigh supply, according to a report released Wednesday by the federal housing agency.A construction site is shown in Toronto. A surge in new apartment construction drove housing start increases in several major Canadian cities last year, but demand continues to outweigh supply, according to a report released Wednesday by the federal housing agency.

That number was offset by declines in the number of new single-detached homes, which fell 20 per cent year over year, due to weaker demand for higher-priced homes in an elevated mortgage rate environment.Montreal, meanwhile, saw a 35 per cent decline in apartment starts due to higher financing and construction costs — its lowest level in eight years, according to CMHC. It was the only market with a significant decrease in new homes being built across all housing types.

Purpose-built rental construction accounted for 42 per cent of all apartment construction in 2023 — reaching a record 41,460 units — which contributed heavily to the total starts.

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