New analysis from Canada Mortgage and Housing Corporation (CMHC) finds that housing starts in Canada could have been nearly 30% higher from 2006 to 2024, and home prices close to 10% lower, if regulatory conditions, along with economic and demographic structural factors, allowed housing supply to respond more quickly to increases in demand.
In an article, CMHC’s Chief Economist, Mathieu Laberge compares the responsiveness of the Canadian and U.S. housing industries over this period.
Mathieu Laberge
One factor in determining the pace of housing construction is land use regulation. In the United States, there are fewer zoning and land use constraints in many metropolitan areas. In contrast, tighter land use rules in Canada, particularly in major urban centres, have made it more difficult to add new housing supply in a timely manner, said the CMHC.
Other economic and demographic structural factors also played a role in the poorer performance of the Canadian residential construction industry relative to the US industry. For example, housing demand in Canada is concentrated in a smaller number of large urban centres, giving households fewer comparable and affordable alternatives if they choose to move. This reduces incentives for the industry to react quickly to changes in housing demand. In contrast, the U.S. benefits from a larger network of major cities with similar job opportunities, which can help distribute demand more evenly and support a more responsive housing supply, added the federal agency.
Read the full article on CMHC’s website.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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