Key Takeaways
- Canada Mortgage and Housing Corp. (CMHC) CEO Coleen Volk says the national housing‑supply crisis is not resolved; overall we still need more homes.
- An oversupply exists in certain segments—Toronto and Vancouver condos and high‑priced luxury rentals—but affordable middle‑class housing remains scarce.
- Pent‑up demand persists among middle‑class Canadians, new immigrants, and young adults living with their parents.
- The federal National Housing Strategy, backed by $82 billion since 2017, has boosted affordable and community housing but is nearing the end of its initial decade.
- CMHC is exploring new ways to support developers who build market‑priced homes, while continuing to collaborate with the Build Canada Homes agency on social‑housing projects.
- Volk warns that demand‑side incentives (e.g., HST rebates) can raise prices unless paired with genuine supply increases.
- CMHC’s mortgage‑insurance work now emphasizes social benefits such as accessibility, climate efficiency, and livability to create desirable communities.
- Building larger units in costly cities like Toronto and Vancouver is difficult due to land values, though successful models exist (e.g., a Winnipeg First Nations‑led project).
- A balanced approach that targets both supply and demand, with targeted incentives for builders, is essential to ease the housing imbalance.
Overview of the Housing Supply Situation
Coleen Volk, chief executive officer of Canada Mortgage and Housing Corp., told The Globe and Mail’s Editorial Board that the housing‑supply crisis is far from over. While some observers claim a “soft landing” has eliminated shortages, Volk insists that a market imbalance persists: overall housing stock remains insufficient, even though certain segments show signs of excess. She stressed that policymakers must continue to focus on expanding supply rather than declaring victory too soon.
Oversupply in Condos and Luxury Rentals
Volk highlighted a noticeable oversupply of condominium units in Toronto and Vancouver, as well as of high‑priced luxury rental apartments. These segments have experienced a sharp drop in new‑build sales, leading to vacancy pressures that contrast with tighter conditions in the broader rental market. Nevertheless, she pointed out that apartment vacancy rates remain historically tight, indicating that the oversupply is confined to specific, higher‑end niches rather than the market as a whole.
Pent‑Up Demand Among Middle‑Class Canadians
Despite the condo glut, there is still substantial pent‑up demand from middle‑class Canadians eager to purchase homes. This group includes new immigrants and young adults who continue to live with their parents because homeownership remains out of reach. Volk argued that this unmet demand underscores the need for more affordable, middle‑class housing options that match the financial realities of a large segment of the population.
National Housing Strategy Progress and Funding
Since 2017, CMHC has administered the federal government’s National Housing Strategy, to which $82 billion has been committed. The strategy has targeted affordable housing initiatives such as community housing, rental apartment developments, projects on federal land, and rapid‑shelter housing for those in greatest need. As the strategy approaches the end of its initial 10‑year horizon, Volk noted that its achievements are being evaluated while new delivery mechanisms are considered.
Exploring New Support for Market‑Price Developers
With the recent launch of the Build Canada Homes agency—which is mandated to construct non‑market (social) housing—CMHC is examining how it can better assist developers who build homes at market prices. Volk explained that the Crown corporation could offer financing tools, risk‑mitigation products, or other incentives to help builders move forward with new projects, particularly those that face the common hurdle of needing to sell units before financing the next phase.
Collaboration with Build Canada Homes Agency
CMHC is already lending expertise to the $13‑billion Build Canada Homes agency, set up under Prime Minister Mark Carney to de‑risk affordable housing projects and attract private investment. Volk emphasized the collaborative relationship between the two organizations, stating that they are working to avoid friction and to align efforts. She noted that CMHC’s role includes helping to shape homes that are socially desirable, not merely financially viable.
Supply‑Side Versus Demand‑Side Measures
Volk cautioned against relying solely on demand‑side incentives—such as Ontario’s recent HST rebate on new‑construction homes—without accompanying supply increases. She warned that measures that boost buyer demand can drive up prices if the underlying stock does not expand. Consequently, her focus is on designing policies that create genuine incentives for builders to add more units, ensuring that any demand‑stimulating actions are matched by parallel supply growth.
CMHC’s Role in Creating Desirable, Livable Homes
Beyond financing, CMHC sees itself as a steward of housing quality. Volk highlighted that the corporation’s mortgage‑insurance assessments now consider factors such as unit size, accessibility, climate efficiency, and overall livability. By integrating these social benefits into its underwriting criteria, CMHC aims to encourage developments that contribute positively to community well‑being and long‑term sustainability.
Challenges of Building Larger Units in High‑Cost Cities
When asked about incentivizing developers to construct condos with more bedrooms to accommodate families, Volk acknowledged that larger units are more expensive to build in cities where land values are high, such as Toronto and Vancouver. She cited a First Nations‑led project in Winnipeg’s historic Hudson’s Bay Company building—which will feature multiple‑bedroom units—as a successful example that demonstrates feasibility when land costs are lower. Volk maintained that similar outcomes are possible elsewhere, but they require careful trade‑offs among cost, design, and policy tools.
Outlook: The Need for a Balanced, Continued Effort
Volk concluded that resolving Canada’s housing imbalance demands a sustained, balanced approach: expanding supply across affordability spectrums while avoiding demand‑side policies that merely inflate prices. She expressed confidence that ongoing consultations with Housing, Infrastructure and Communities Canada, alongside innovative financing ideas from CMHC, will yield effective solutions. Ultimately, the goal remains to create sufficient, desirable housing that meets the needs of middle‑class Canadians, newcomers, and families nationwide.