CMHC's Coleen Volk: Canada Has Too Many Condos and Too Few Homes
Toronto real estate listings climbed 43% year-over-year in the first quarter of 2026, with most of the surge coming from investor-owned condos. Vancouver saw similar numbers. Plenty of units, then. Except Coleen Volk, CEO of the Canada Mortgage and Housing Corporation, still insists the country needs 3.5 million more homes by decade's end.
The contradiction is only surface-level.
What "Oversupply" Actually Means
The condo towers going up in Toronto's core weren't built for families. They were built for investors buying pre-construction units with the assumption that rents would cover mortgages and prices would appreciate. That worked when rates were at 1.8% and immigration was adding 400,000 people a year who needed somewhere to live immediately. It stopped working when the Bank of Canada pushed rates above 5% in 2023 and held them there through mid-2024.
Investors are now selling. The units flooding the market are mostly one-bedrooms and studios under 600 square feet, priced at $650,000 to $850,000. A family with two kids and a combined household income of $120,000 cannot use that unit. The mortgage payment alone, at current rates, would eat half their take-home. The space doesn't fit their lives even if the money did.
This is the "oversupply" Volk is describing: not a surplus of housing, but a mismatch between the product available and the product people need. The market built what penciled out for developers and investors. What penciled out was small, expensive, and urban. What the population requires is larger, cheaper, and distributed across a wider geography.
The Construction Model Broke
Seventy percent of new high-rise projects in Toronto and Vancouver required 70-80% pre-sales to secure financing and break ground. The buyers providing those pre-sales were overwhelmingly investors, not end users. When that group exited in 2024 and 2025, the pipeline stalled. Developers couldn't hit presale thresholds. Lenders wouldn't finance projects. Starts collapsed.
CMHC recorded a 22% drop in housing starts nationally in 2024 compared to 2023. The numbers ticked up slightly in early 2026 as the Bank of Canada began cutting rates, but the gap between what's being built and what's needed remains enormous. The agency's 3.5 million unit target wasn't an aspiration. It was the math required to return Canada to a 2-3% vacancy rate, which is the range where rents and prices stabilize instead of climbing 8-12% annually.
Zoning Isn't the Bottleneck Anymore
The federal Housing Accelerator Fund pushed municipalities to relax zoning rules, and many did. Fourplexes are now legal on single-family lots in dozens of cities. Mid-rise buildings are permitted near transit. The rules changed.
The economics didn't. Land prices in Toronto, Vancouver, and Montreal are still so high that building anything other than a luxury tower doesn't generate enough margin to justify the risk. Construction wages rose 18% between 2020 and 2023 and haven't come back down. Materials cost more. A developer looking at a mid-rise, mid-market rental project in Etobicoke today faces a pro forma that doesn't close unless rents are $2,400 for a one-bedroom. The city's median renter can't pay that.
The federal government responded by removing GST on new purpose-built rental projects in 2024, which helped shift some capital toward rentals and away from condos. That's the right direction. But the scale is still wrong. Canada added roughly 240,000 units in 2025. The target is closer to 500,000 per year for the next four years.
What Volk Isn't Saying
The condo "oversupply" might actually make the long-term problem worse. Developers watching a market saturated with unsold units don't start new projects. Investors who lost money on the last cycle don't fund the next one. The current glut creates a future shortage because it kills the supply response exactly when it's needed most.
That's the structural issue Volk is trying to flag without spooking the market further. Yes, there are too many condos listed right now in two cities. No, that doesn't mean Canada has solved its housing problem. It means the market built the wrong thing in the wrong place for the wrong buyer, and now the correction is going to make the underlying shortage worse before it gets better.
Toronto real estate listings climbed 43% year-over-year in the first quarter of 2026, with most of the surge coming from investor-owned condos. Vancouver saw similar numbers. Plenty of units, then. Except Coleen Volk, CEO of the Canada Mortgage and Housing Corporation, still insists the country needs 3.5 million more homes by decade's end.
The contradiction is only surface-level.
What "Oversupply" Actually Means
The condo towers going up in Toronto's core weren't built for families. They were built for investors buying pre-construction units with the assumption that rents would cover mortgages and prices would appreciate. That worked when rates were at 1.8% and immigration was adding 400,000 people a year who needed somewhere to live immediately. It stopped working when the Bank of Canada pushed rates above 5% in 2023 and held them there through mid-2024.
Investors are now selling. The units flooding the market are mostly one-bedrooms and studios under 600 square feet, priced at $650,000 to $850,000. A family with two kids and a combined household income of $120,000 cannot use that unit. The mortgage payment alone, at current rates, would eat half their take-home. The space doesn't fit their lives even if the money did.
This is the "oversupply" Volk is describing: not a surplus of housing, but a mismatch between the product available and the product people need. The market built what penciled out for developers and investors. What penciled out was small, expensive, and urban. What the population requires is larger, cheaper, and distributed across a wider geography.
The Construction Model Broke
Seventy percent of new high-rise projects in Toronto and Vancouver required 70-80% pre-sales to secure financing and break ground. The buyers providing those pre-sales were overwhelmingly investors, not end users. When that group exited in 2024 and 2025, the pipeline stalled. Developers couldn't hit presale thresholds. Lenders wouldn't finance projects. Starts collapsed.
CMHC recorded a 22% drop in housing starts nationally in 2024 compared to 2023. The numbers ticked up slightly in early 2026 as the Bank of Canada began cutting rates, but the gap between what's being built and what's needed remains enormous. The agency's 3.5 million unit target wasn't an aspiration. It was the math required to return Canada to a 2-3% vacancy rate, which is the range where rents and prices stabilize instead of climbing 8-12% annually.
Zoning Isn't the Bottleneck Anymore
The federal Housing Accelerator Fund pushed municipalities to relax zoning rules, and many did. Fourplexes are now legal on single-family lots in dozens of cities. Mid-rise buildings are permitted near transit. The rules changed.
The economics didn't. Land prices in Toronto, Vancouver, and Montreal are still so high that building anything other than a luxury tower doesn't generate enough margin to justify the risk. Construction wages rose 18% between 2020 and 2023 and haven't come back down. Materials cost more. A developer looking at a mid-rise, mid-market rental project in Etobicoke today faces a pro forma that doesn't close unless rents are $2,400 for a one-bedroom. The city's median renter can't pay that.
The federal government responded by removing GST on new purpose-built rental projects in 2024, which helped shift some capital toward rentals and away from condos. That's the right direction. But the scale is still wrong. Canada added roughly 240,000 units in 2025. The target is closer to 500,000 per year for the next four years.
What Volk Isn't Saying
The condo "oversupply" might actually make the long-term problem worse. Developers watching a market saturated with unsold units don't start new projects. Investors who lost money on the last cycle don't fund the next one. The current glut creates a future shortage because it kills the supply response exactly when it's needed most.
That's the structural issue Volk is trying to flag without spooking the market further. Yes, there are too many condos listed right now in two cities. No, that doesn't mean Canada has solved its housing problem. It means the market built the wrong thing in the wrong place for the wrong buyer, and now the correction is going to make the underlying shortage worse before it gets better.
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