CMHC: Toronto's Supply Gap Narrowed — But Ownership Starts Are Still Too Weak to Hold the Line

Canada Mortgage and Housing Corporation's Fall 2026 Housing Supply Report, released September 10 with a matching news release, puts a hard number under a soft market: near-term affordability gains can reverse if Canada underbuilds while demand is quiet.

Nationally, CMHC's business-as-usual path builds about 231,000 homes a year. Restoring pre-pandemic affordability by 2036 would take 417,000 to 469,000 annual starts — a supply gap of roughly 187,000 to 238,000 homes each year. That national gap is broadly unchanged from CMHC's 2025 assessment.

Deputy Chief Economist Aled ab Iorwerth's line is the one GTA agents should remember: slower population growth helped affordability, but new construction is slowing faster than demand. The risk is underbuilding into the downturn and arriving short when demand returns.

Toronto: narrower gap, thinner ownership pipeline

Relative to the July 2025 estimates, CMHC says the housing supply gap narrowed in Toronto and Calgary, stayed stable in Vancouver, and widened in Montreal and Ottawa. Edmonton remains the only large market with no supply gap.

Table 1 in the Fall 2026 report is the Toronto brief in one row:

• Toronto business-as-usual starts: about 42,000 a year
• Starts needed for 2019-level affordability by 2036: 62,000 to 68,000 a year
• Toronto supply gap: roughly 20,000 to 26,000 homes a year

CMHC attributes Toronto's narrower gap to lower home prices improving affordability. In the same breath, it warns that new construction has weakened sharply — especially condominiums — which is limiting ownership supply. The news release is blunt: rental housing is driving most new supply, the remaining gap is concentrated in the ownership market, and Toronto still needs to lift annual starts by at least 50% over the next decade to restore pre-pandemic affordability.

Starts intensity tells the same story. CMHC's starts-per-10,000-population chart for the first half of 2026 puts Toronto at about 19 — versus Calgary 61, Edmonton 51, Ottawa 37, Vancouver 41 and Montreal 30. Toronto's H1 2025 print was about 18. Soft prices closed some of the affordability gap; the crane count did not catch up.

Rents ease; ownership supply is the stress point

Across major markets outside Calgary and Edmonton, CMHC says new supply is increasingly rental-dominated while ownership-oriented starts weaken. Rental completions are helping rebalance tenant markets and slow rent growth. Ownership — especially condo — is where the future crunch forms: weak launches today mean fewer completed ownership units when buyers return.

Common themes CMHC lists for large-gap markets including Toronto, Vancouver, Montreal and Ottawa:

• Near-term supply growth leans on projects already under construction; new launches have weakened in many markets
• Purpose-built rental is moving rental conditions toward better balance
• Ownership supply challenges are growing as condominium construction softens

Ottawa's gap widened because affordability deteriorated and demand is expected to outpace supply despite strong overall construction — most of it rental, with weak condo. Montreal's larger gap reflects construction that stays high but is concentrated in rentals. Vancouver's gap is stable; purpose-built rental is about 60% of starts there versus under 20% a decade ago (Vancouver section figures — use for national context, not as Toronto starts).

What this means for GTA buyers, sellers and agents

For buyers: Softer prices helped shrink Toronto's measured supply gap. That is not the same as a fixed ownership pipeline. If condo starts stay weak through this cycle, competition for finished ownership stock can tighten again when rates, jobs or immigration firm up.

For sellers and listing agents: Do not sell "CMHC says the gap closed" as a green light for 2022 pricing. CMHC's Toronto story is narrower gap and exceptionally weak ownership construction. Present both.

For investors: Rental-heavy starts support the tenant-side rebalancing already showing up in other Tier-A rent prints. Ownership condo supply is the segment CMHC flags as the long-term risk — underwrite exit liquidity accordingly.

For career conversations: When a client asks whether Canada is "building enough," the Fall 2026 answer is still no at the national level (231k BAU vs 417k–469k needed), and Toronto still needs roughly twenty to twenty-six thousand extra starts a year on CMHC's table.

What we are not inventing

Figures above come from CMHC's Fall 2026 Housing Supply Report page and the September 10 news release. Do not mix this report with monthly CMHC starts releases or CREA sales without naming both sources. Next Tier-A windows: August CPI around September 14, CREA national sales around mid-month, then CMHC August starts and StatCan building permits around September 16.

Sources

• CMHC, Fall 2026 Housing Supply Report (Table 1 supply gaps; CMA narrative), published September 10, 2026.
• CMHC, Slowing home construction threatens recent affordability gains: CMHC, news release, September 10, 2026.