OTTAWA — The Canada Mortgage and Housing Corp. says construction of new homes increased slightly across several of Canada’s major cities in the first half of 2023, as the pace of apartment starts helped offset declines in other dwelling types.
But the agency says it will be difficult to maintain the heightened pace of apartment construction due to challenges facing developers, such as increased building costs and rising interest rates.
Of the six cities examined, CMHC says Vancouver and Toronto were the only ones that saw housing starts increase over the same period last year, recording 49 per cent and 32 per cent gains, respectively, and surpassing levels seen over the past five years.
In Montreal, there were 58 per cent fewer housing starts compared with the first half of 2022, while Edmonton and Ottawa saw 29 per cent and 18 per cent decreases, respectively, as Calgary’s housing starts were flat.
The agency is forecasting strong rental demand in the second half of the year, reflecting higher barriers to home ownership caused by high prices and interest rates.
It says the overall level of new construction activity remains too low to address Canada’s affordability and housing supply crisis over the longer term, and “significant increases” in the construction industry’s productivity will be needed.
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