143,929 Homes Have Permits and No Shovels: Financing Is the Holdup
In September, CMHC counted 143,929 homes across Canada with building permits in hand and no construction under way, 1.1% more than in August. Over the same stretch, actual starts in centres of 10,000 or more fell to 19,984 units, down 11% from 22,375 a year earlier.
Those two numbers moving in opposite directions tell you where the hold-up sits. For a large share of projects, approval is finished. What decides whether the site gets dug this year is financing: whether a lender will fund the build at today's borrowing costs, against today's sale prices. That matters if you build, if you write housing policy, or if you forecast supply, because speeding up approvals only adds to the pile unless the project's numbers also work.
A permit grants permission, and the loan sets the start date
A construction lender looks at a project the way an investor would. It wants to see presales or expected rents, an appraised value for the finished building, a firm cost budget and enough margin that a cost overrun doesn't sink the loan. Many of the approved projects on CMHC's list were planned when money was cheaper.
Here is illustrative arithmetic. Take a $20 million construction loan. At 5%, a year of interest on the full amount is $1 million. At 7%, it's $1.4 million. Over a two-year build, if the loan were fully drawn the whole time, that's roughly $800,000 of extra cost before a single unit sells. Real loans draw down gradually, so the true figure is lower, but the direction holds. That money comes straight out of the developer's margin, and lenders will not fund a project whose margin has gone thin.
Flat prices squeeze the same margin from the other side
Higher costs could be absorbed if sale prices were climbing. They aren't, much. CREA reported a national average sale price of $668,219 in August 2026, up just 0.6% from a year earlier. Labour is still expensive, and builders in Edmonton report trouble finding trades even with a permit ready to go. Costs rise, revenue holds still, and a project that penciled out two years ago now falls short of what the bank needs to see.
For anyone reading the market, the useful figure is the gap between building costs and achievable prices. Permit counts tell you what is allowed. That gap tells you what will actually start.
Policy works when it changes the numbers
Edmonton has done real work streamlining permits, and that work isn't wasted. A faster approval cuts the months a developer carries land before building. But once a project is approved, more approvals don't move it forward. Alberta's Housing Infrastructure Grant Program points in a more direct direction: helping municipalities pay for the servicing that stalled projects need lowers the cash a developer has to raise up front. A useful test for any housing measure is simple. Does it lower the cost of building, lower the cost of borrowing, or make the finished homes easier to sell or rent? If it does none of those, it won't produce a start.
What the backlog means for the next few years
Canada recorded 259,028 starts in 2025, and CMHC estimates the country needs 3.5 million additional homes by 2030. Today's slower starts become fewer move-in-ready homes roughly two years out, which points to a tighter rental and resale market around 2028. Some of the approved units will never be built, because plans change and some developers won't make it through. Still, a large pool of shovel-ready projects means that if rates ease or costs settle, starts could pick up quickly and in volume, because the paperwork is already done.
So before asking how fast a project can be approved, ask what its lender needs to see to fund it. Wherever that answer is within reach, the next start will come from there.
In September, CMHC counted 143,929 homes across Canada with building permits in hand and no construction under way, 1.1% more than in August. Over the same stretch, actual starts in centres of 10,000 or more fell to 19,984 units, down 11% from 22,375 a year earlier.
Those two numbers moving in opposite directions tell you where the hold-up sits. For a large share of projects, approval is finished. What decides whether the site gets dug this year is financing: whether a lender will fund the build at today's borrowing costs, against today's sale prices. That matters if you build, if you write housing policy, or if you forecast supply, because speeding up approvals only adds to the pile unless the project's numbers also work.
A permit grants permission, and the loan sets the start date
A construction lender looks at a project the way an investor would. It wants to see presales or expected rents, an appraised value for the finished building, a firm cost budget and enough margin that a cost overrun doesn't sink the loan. Many of the approved projects on CMHC's list were planned when money was cheaper.
Here is illustrative arithmetic. Take a $20 million construction loan. At 5%, a year of interest on the full amount is $1 million. At 7%, it's $1.4 million. Over a two-year build, if the loan were fully drawn the whole time, that's roughly $800,000 of extra cost before a single unit sells. Real loans draw down gradually, so the true figure is lower, but the direction holds. That money comes straight out of the developer's margin, and lenders will not fund a project whose margin has gone thin.
Flat prices squeeze the same margin from the other side
Higher costs could be absorbed if sale prices were climbing. They aren't, much. CREA reported a national average sale price of $668,219 in August 2026, up just 0.6% from a year earlier. Labour is still expensive, and builders in Edmonton report trouble finding trades even with a permit ready to go. Costs rise, revenue holds still, and a project that penciled out two years ago now falls short of what the bank needs to see.
For anyone reading the market, the useful figure is the gap between building costs and achievable prices. Permit counts tell you what is allowed. That gap tells you what will actually start.
Policy works when it changes the numbers
Edmonton has done real work streamlining permits, and that work isn't wasted. A faster approval cuts the months a developer carries land before building. But once a project is approved, more approvals don't move it forward. Alberta's Housing Infrastructure Grant Program points in a more direct direction: helping municipalities pay for the servicing that stalled projects need lowers the cash a developer has to raise up front. A useful test for any housing measure is simple. Does it lower the cost of building, lower the cost of borrowing, or make the finished homes easier to sell or rent? If it does none of those, it won't produce a start.
What the backlog means for the next few years
Canada recorded 259,028 starts in 2025, and CMHC estimates the country needs 3.5 million additional homes by 2030. Today's slower starts become fewer move-in-ready homes roughly two years out, which points to a tighter rental and resale market around 2028. Some of the approved units will never be built, because plans change and some developers won't make it through. Still, a large pool of shovel-ready projects means that if rates ease or costs settle, starts could pick up quickly and in volume, because the paperwork is already done.
So before asking how fast a project can be approved, ask what its lender needs to see to fund it. Wherever that answer is within reach, the next start will come from there.
Read Next
Five Money Checks Canadian Snowbirds Should Finish Before Heading South
Canadian Bank Security Assumes a Human Is Logging In. AI Agents Break That
Before Storm Winds Arrive, Turn 5 Yard Hazards Into Protective Buffers
A 25 Basis Point Hike Doesn't Erase Variable's Long-Run Edge Over Fixed