Home building slumps as construction costs soar up to 30%, says CMHC

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Rising costs threaten to make housing affordability even worse

The Canada Mortgage and Housing Corporation’s semi-annual Housing Supply Report attributed the decline in large part to a nine per cent decrease in apartment starts , which have accounted for almost two thirds of all housing starts in census metropolitan areas since January 2022.Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc.

“This lack of predictability or control over costs can reduce the number of housing starts or the speed with which new housing units come onto the market,” the CMHC noted. “There is rent control for existing tenants in British Columbia but if that tenant was to move to a new construction, they are facing quite a change in their housing expenditures because they are, of course, going to pay market rent,” Bond said in an interview.

“We’re seeing the rising cost to build is also likely pushing the asking rents for new projects higher and that’s also kind of eroding affordability,” CMHC economist Dana Senagama said.

 

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