Canada Mortgage and Housing Corporation (CMHC) has quietly moved the goalposts on one of the most urgent public policy issues of our time.
WATCH NOW: Canada Has Given Up on Making Housing Affordable
In its latest report, the agency no longer aims to restore housing affordability to the levels Canadians enjoyed in the early 2000s. Instead, CMHC’s new benchmark is far more modest: bringing affordability back to 2019 levels.
This isn’t progress - it’s a retreat. And it reflects a deeper failure: CMHC has spent years advancing a housing strategy focused almost entirely on increasing supply, while ignoring the forces driving demand.
Over the past decade, Canada’s population growth has surged, peaking at over 1.2 million people per year in 2024. But as this record growth put intense pressure on housing, CMHC didn’t raise the alarm. It didn’t warn that homebuilding would fall far short of what’s needed causing homeownership to be permanently pushed out of reach for many Canadians. Instead, it clung to a single, increasingly implausible solution: that if we could just build faster - tripling completions, almost overnight - we could solve the affordability crisis.
That belief has now collapsed under the weight of its own hubris.
CMHC’s revised affordability targets speak volumes. In Toronto, their own data show that by 2019, the average cost of homeownership had already reached 59% of gross household income - nearly double the conventional 30% affordability threshold. Yet that is now CMHC’s new standard: a deeply unaffordable baseline, reframed as success.
Why the shift? CMHC points to challenges around labour shortages and development timelines. But the real problem is structural. By refusing to acknowledge the impact of demand - driven not just by immigration but also by a surge in non-permanent residents, speculative investment, and the growing financialization of housing - CMHC has painted itself into a corner.
Canada’s homeownership rate has been falling for over 15 years, as more of our housing stock is bought by investors - including elected officials. Has CMHC raised this as a concern? Have they advocated for policies to prioritize homes for households rather than speculators?
They haven’t. In fact, when Statistics Canada reported that more than 100,000 homes had been converted to short-term rentals, CMHC’s response was to downplay the issue, stating that short-term rentals “are not a pivotal factor on the long-term rental market.” A hundred thousand lost homes might not matter in their model - but it certainly matters to the families trying to find one.
This is the logical outcome of an ideology that treats homes as investment vehicles first and shelter second. CMHC’s modelling is designed to maintain market stability - not restore access to housing for the next generation.
And that’s the real danger here. By clinging to a supply-only framework - and refusing to confront the outsized role that demand plays in today’s housing market - CMHC has effectively normalized a future where high prices and falling homeownership are the new baseline.
We didn’t get here because we failed to build fast enough. We got here because we refused to deal with the full picture. And unless we shift our approach, the next generation of Canadians will remain locked out - not despite CMHC’s advice, but because of it.
John Pasalis is President of Realosophy Realty. A specialist in real estate data analysis, John’s research focuses on unlocking micro trends in the Greater Toronto Area real estate market. His research has been utilized by the Bank of Canada, the Canadian Mortgage and Housing Corporation (CMHC) and the International Monetary Fund (IMF).
Have questions about your own moves in the Toronto area as a buyer, seller, investor or renter? Book a no-obligation consult with John and his team at a Realosophy here: https://www.movesmartly.com/meetjohn
June 25, 2025
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