Housing summit warns of persistent supply gap despite market improvements

Industry leaders and economists say Canada is still far from solving its housing crisis despite signs the market is moving in the right direction.

That was the message from speakers at Housing Summit 6.0, hosted by the Residential Construction Council of Ontario on Sept. 23.

“We’re going in the right direction, but we’ve got to do more,” said Ian Lee, an associate professor at Carleton University’s Sprott School of Business.

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Lee offered a “qualified yes and a qualified no” to the question of whether housing reform in Canada is working, telling attendees “good stuff has happened” and “it is sort of working.”

However, he noted housing construction continues to lag well behind demand, with Canada building roughly 250,000 homes annually while the Canada Mortgage and Housing Corporation estimates between 400,000 and 470,000 new homes are needed each year.

“The numbers clearly show that we are not building enough,” Lee said. “It is crystal clear that we are still falling behind.”

Jason Mercer, chief market analyst at the Toronto Regional Real Estate Board, said affordability conditions have improved substantially over the past two years.

He said the income required to purchase a $1-million home in the Greater Toronto Area has fallen from well above $200,000 annually during the peak of the interest-rate tightening cycle to roughly $140,000 to $150,000 today.

“Affordability is no longer the major obstacle it was during the peak of the interest-rate tightening cycle,” Mercer said.

He noted sales levels remain in the 60,000 to 70,000 range annually, well below what demographic trends would typically support, suggesting pent-up demand could be unleashed once consumer confidence improves.

Daniel Foch of Valery Real Estate Inc. highlighted growing differences between housing markets in Ontario and British Columbia and those in other regions.

“The markets that continue to grow and continue to attract new residents are the ones that remain affordable,” Foch said.

He pointed to cities such as Calgary and Halifax that continue to attract younger Canadians seeking home ownership opportunities increasingly out of reach in Toronto and Vancouver.

Ontario Minister of Municipal Affairs and Housing Rob Flack outlined several steps the provincial government has taken to improve housing conditions.

“Government has to create the conditions so builders can do what they do best, and that’s build homes,” Flack said.

He pointed to the province’s partnership with the federal government to temporarily eliminate the HST on qualifying new homes, a measure long sought by the residential construction industry.

According to data presented at the summit, new single-family home sales in the GTA tripled in July and August compared with a year earlier, and province-wide new home sales increased approximately 130% year-over-year during the second quarter of 2026.

David Coletto, founder and CEO of Abacus Data, presented survey results showing that 79% of Canadians believe the country’s housing system is not functioning properly and nearly three-quarters say insufficient housing is being built to meet demand.

Only about one in five Canadians expressed satisfaction with the performance of federal, provincial or municipal governments on housing issues.

Coletto said the findings suggest housing will remain a dominant political issue as municipalities and provinces head into election cycles over the coming years.

With files from Storeys