CMHC Forecasts Fewer Homes Ahead: Why Supply Relief May Take Longer Than Expected
Image courtesy of The Globe and Mail
Canada’s housing supply challenge may not ease as quickly as many hoped. CMHC is forecasting that housing starts will fall over the next several years, even as the federal government has set ambitious goals to accelerate homebuilding.
According to the forecast, annual housing starts could decline to about 241,400 this year, then fall further to roughly 223,400 in 2027 and 211,900 in 2028. For buyers and renters, that points to a market where affordability improvements may be slower, uneven, and heavily dependent on the city and property type.
Why construction is slowing
Homebuilding depends on confidence as much as it depends on land and demand. When developers face higher construction costs, uncertainty around trade, slower population growth, hesitant buyers, and a buildup of unsold condos, many choose to delay projects rather than begin construction immediately.
The condo segment is especially important in large urban markets. Condos often provide a major share of new housing supply, including units that eventually become rentals. If projects do not launch or complete at the expected pace, fewer homes enter the market down the road.
What it could mean for prices
A slowdown in starts does not automatically mean prices will rise tomorrow. In some markets, especially where unsold condo inventory is elevated, buyers may still have negotiating room in the short term.
But housing is a long-term supply business. A project paused today can mean fewer available homes two or three years from now. If demand strengthens before construction recovers, limited new supply can put renewed pressure on prices and rents.
An applicable example
Imagine a couple planning to buy their first home in the GTA within the next 18 months. They may see more choice in certain condo buildings today because some developers and investors are carrying unsold units.
However, if they decide to wait several years solely because they expect a large wave of new supply, that plan could backfire. If starts continue falling while household formation and buyer demand recover, the number of new homes available in their budget range may be even tighter by the time they are ready.
The right strategy is not to rush into a purchase out of fear. It is to get pre-approved, understand your realistic monthly payment, monitor the neighbourhoods you can afford, and be ready when a property fits both your budget and long-term plans.
My market view
As a mortgage professional, I see this forecast as a reminder that affordability is not just a rate story. Mortgage rates matter, but supply, construction costs, population trends, and buyer confidence all shape the market Canadians are trying to enter.
The market may offer pockets of opportunity today, particularly for well-prepared buyers who can negotiate on properties that have been sitting longer. But a broad-based, quick affordability reset becomes harder to expect if new construction continues to slow.
What to consider now
Do not base your buying timeline only on forecasts of lower prices or more supply.
Focus on payment affordability, including property taxes, condo fees, insurance, and maintenance.
Compare resale and pre-construction opportunities carefully; they carry very different timing and risk considerations.
Maintain an emergency fund instead of using every dollar available for a down payment.
Get a clear mortgage plan before shopping, so you can act confidently when the right opportunity appears.
Whether you are planning to buy now, renew soon, or build a strategy for the next few years, let’s review your affordability, financing options, and next best move in today’s evolving market.
Kechanth Kannan | Mr. Mortgage
Phone: +1 (647) 554-2718
Instagram: @_mrmortgage
