Canada’s Construction Surge: A Developer’s Outlook on What Comes Next

Canada is currently in the midst of a historic housing construction wave. In 2023, national housing starts surged to a record 270,000 units, propelled by urgent demand and intensified policy support from all levels of government. As developers, this is not just a statistical headline—it reflects the market’s growing alignment with housing needs across urban centres. But as RBC Economics cautions, the challenge will be sustaining this momentum. At inCAN, we believe the key lies in adaptation, innovation, and partnership.

The Momentum is Real

The numbers are staggering:

• 270,000 housing starts in 2023, the highest in modern Canadian history.

• Ontario and British Columbia alone accounted for over half of these new starts.

• Multi-unit projects dominate growth, accounting for over 70% of total starts, signaling a shift in how Canadians live.

This activity was driven by Canada’s ballooning population—over 1.2 million new residents in 2023—and bolstered by low interest rates and incentive programs. But this level of activity also tests the limits of industry capacity.

The Slowdown Ahead—and Why It’s Not All Bad

RBC forecasts a 25% drop in housing starts by 2025, with annual starts likely falling below 210,000 units. The main culprits:

• Labour shortages across trades and management.

• Rising interest rates and construction financing costs.

• Builder confidence softening, particularly in the face of approval bottlenecks and higher materials costs.

From a developer’s perspective, these are real pressures—but they are also catalysts for recalibration. The current slowdown is not a collapse. It’s a return to pre-pandemic norms after extraordinary acceleration.

Our Take: Reasons to Stay Optimistic

At inCAN Developments, we view this period as an opportunity—not a retreat. Here’s why:

1. Demand Remains Structurally Strong

Canada’s long-term immigration strategy is firmly in place. With 500,000 new permanent residents expected annually through 2026, the housing deficit will only widen unless development continues. Condominium living, rental supply, and infill projects will remain central to urban growth.

2. Government Policy is Catching Up

We’re seeing movement:

• Ontario’s "More Homes, Built Faster" Act is already reducing timelines.

• Federal housing accelerators are being deployed in major municipalities.

• Municipalities like Toronto and Markham are rethinking zoning to unlock mid-rise density.

These reforms will lower friction in the approvals process, offering a more developer-friendly environment in the medium term.

3. Innovation is Accelerating

Necessity is driving change. Developers are now:

• Embracing off-site construction and modular building.

• Leveraging digital permitting and BIM to compress project timelines.

• Partnering with institutional capital to advance purpose-built rental and co-living formats.

What This Means for the GTA

In the Greater Toronto Area, where inCAN is actively delivering mid-rise communities like The Unionville, we are already adapting to this new landscape:

• Product design is shifting—smaller, more efficient units cater to first-time buyers and downsizers.

• Customer preferences are evolving—amenities, sustainability, and community experience are paramount.

• Collaboration with local planners and agencies is increasingly key to project success.

Our confidence in the GTA market is unwavering. Yes, sales cycles are longer, but interest remains high. Quality, location, and developer credibility are distinguishing factors in today’s market.

Looking Forward

The next 12–24 months will require a measured, strategic approach from the development community. But make no mistake—Canada’s housing needs are not going away, and neither is demand. At inCAN Developments, we see this as a time to sharpen our focus, double down on innovation, and work more collaboratively with all stakeholders to keep building smart, inclusive communities.

Let’s build the future, together.

This article references insights from RBC Economics.