CMHC says Toronto and Ottawa are still tens of thousands of homes short each year

CMHC’s latest supply report delivers a split message for Ontario’s two largest housing markets: near-term conditions have softened, but neither Toronto nor Ottawa is building at the annual pace the agency estimates is needed to restore 2019 affordability by 2036.

In its Fall 2026 Housing Supply Report, Canada Mortgage and Housing Corporation estimates a business-as-usual pace of 42,000 annual starts in the Toronto census metropolitan area. It says Toronto would need 62,000 to 68,000 starts a year—an annual gap of roughly 20,000 to 26,000 homes.

Ottawa’s baseline is much lower at 11,000 annual starts. CMHC estimates the capital region would need 33,000 to 38,000 a year, leaving a gap of 22,000 to 27,000.

Toronto’s gap narrowed, but ownership construction weakened

CMHC says declining home prices and slower rent growth have improved Toronto affordability enough to narrow the estimated gap from last year. The agency cautions that the improvement reflects softer market conditions, not a lasting supply fix.

Population-adjusted starts in the first half of 2026 were the lowest since 1996, excluding 2025, and the inventory of permitted units waiting for construction was 50% below its 2023 peak. Ground-oriented starts remained at record lows while condominium launches largely stalled.

Purpose-built rental construction was the exception. Rental apartment starts rose 82% from the first half of 2025 and exceeded condominium starts for the first time since 1994. CMHC says that rental growth still does not fully offset the retreat in ownership supply.

Ottawa’s pipeline is strong—and heavily rental

Ottawa’s supply gap widened because affordability deteriorated as mortgage rates stayed higher and income growth slowed. CMHC reports that rental units made up 54% of Ottawa starts in 2026, compared with 12% for condominium apartments.

The region’s number of homes under construction was at an all-time high, and first-half completions were 22% higher than a year earlier. But the tenure mix matters: rental apartments represented 69% of units under construction, up from 53% a year earlier and 30% in 2023. Condominium starts fell 49% year over year.

What this means

For renters, a larger purpose-built pipeline can add choice as completed buildings reach the market. For prospective owners, CMHC’s warning is that weak condominium and freehold starts today could constrain future ownership supply even if rental construction remains elevated.

These are CMHC planning estimates, not daily sales figures or a forecast that prices must move in one direction. The key signal is the widening gap between what current construction trends may deliver and the pace CMHC calculates would be needed for a durable improvement in affordability.