Canada Needs 4.69 Million Homes By 2036 to Improve Affordability

Canada housing affordability and housing supply needs through 2036

Housing affordability in Canada has shown some signs of improvement, but according to the latest report from Canada Mortgage and Housing Corporation (CMHC), those gains may be difficult to sustain if housing supply does not keep pace with future demand.

In its Housing Supply Report released on September 10, 2026, CMHC estimates that Canada needs approximately 417,000 to 469,000 new homes per year over the next decade to restore housing affordability to pre-pandemic levels by 2036.

That translates to roughly 4.17 million to 4.69 million additional homes over ten years.

Canada Still Faces a Significant Housing Supply Gap

Based on CMHC’s current projections, Canada is expected to fall short by approximately 187,000 to 238,000 homes per year compared with the level of construction required to meet its affordability target.

One of the key concerns is that housing construction could slow faster than demand. In the near term, population growth is moderating and many buyers remain cautious, reducing pressure on the housing market compared with the years immediately following the pandemic. Over the longer term, however, demand could strengthen again as household formation increases, incomes improve and buying conditions become more favourable.

If construction falls too sharply during today’s softer market, Canada could face renewed supply constraints when demand returns.

Canada Needs More Homes but the Type of Supply Also Matters

Another important point in the CMHC report is the difference between rental housing and ownership-oriented housing. In many major markets, rental construction remains relatively strong and is helping to improve conditions in the rental market.

By comparison, construction of condominiums and other ownership-oriented housing, including ground-oriented homes, has weakened significantly. This means that even if total housing starts remain relatively elevated, buyers looking to own a home may still face limited supply in the segments they are actually targeting.

Housing affordability therefore depends not only on how many homes are built, but also on what type of housing is being added to the market.

Calgary Is Showing a More Positive Supply Trend

Housing conditions are not the same across every Canadian city. According to CMHC, Calgary has made meaningful progress in improving housing supply. Strong construction activity has helped narrow the city’s estimated housing supply gap compared with previous projections.

Ownership-oriented housing supply in Calgary has also continued to expand in response to demand. However, affordability remains a challenge for many prospective buyers, particularly first-time homebuyers and lower-income households.

This shows that even in a market with strong construction activity, housing supply and affordability still need to be considered together.

What Does This Mean for Homebuyers and Investors?

Housing affordability is influenced by more than interest rates. Housing supply, income, property prices, financing costs and future demand all play a role in determining whether a purchase makes sense at a particular point in time.

For homebuyers planning to enter the market over the next few years, understanding supply conditions in the specific market they are considering can provide more context than simply watching mortgage rates.

For real estate investors, property type also matters. Rental housing and ownership-oriented housing are currently experiencing different supply dynamics, and those differences can affect pricing, rental demand, cash flow and long-term strategy.

Financial Preparation Is Still the Part You Can Control

No buyer can control how quickly new homes are built or exactly when market conditions will change. What buyers can control is how well they prepare financially.

Borrowing capacity, cash flow, down payment, property type and mortgage flexibility should all be reviewed before the home search begins.

For more complex borrower profiles including self-employed clients, investors and professionals with variable income - early planning becomes even more important because lenders can assess income and risk very differently.

At The P Capital, our focus is on structuring the mortgage application around the client’s actual financial position and long-term objectives, rather than waiting until a property has already been selected.

Rooted. Refined.

Sources

Canada Mortgage and Housing Corporation (CMHC), Fall 2026 Housing Supply Report, September 10, 2026.

CMHC, Slowing Home Construction Threatens Recent Affordability Gains, September 10, 2026.

The P Capital is a boutique mortgage advisory practice operating under Mortgage Connection and within the Dominion Lending Centres network.