(Ottawa) New home construction increased slightly in several major Canadian cities in the first half of 2023 as the pace of housing starts helped offset declines in other housing types, the Canada Mortgage and Housing Corporation said Thursday.
However, the agency says it will be difficult to maintain the high pace of housing construction as developers face challenges such as rising construction costs and rising interest rates.
Of the six cities studied, CMHC found that Vancouver and Toronto were the only ones where housing starts increased compared to the same period last year. They recorded increases of 49% and 32%, respectively, exceeding the values observed in the last five years.
Montreal saw a 58% decline in housing starts compared to the first half of 2022, while Edmonton and Ottawa saw declines of 29% and 18%, respectively. Housing starts remained stable in Calgary.
The agency forecasts strong demand for rental housing in the second half of the year, reflecting greater barriers to home ownership due to high prices and interest rates.
She added that the overall level of new construction activity remains too low to solve Canada’s affordability and supply crisis in the long term and that it is “essential to significantly increase the productivity of the construction sector.”
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