Canada Mortgage and Housing Corporation (CMHC) data for Q1 2026 confirms a persistent slowdown in residential construction in Quebec. With an annualized pace of 32,000 housing starts versus a need of 45,000, the annual deficit of 13,000 units creates structural upward pressure on existing property prices.
Current Situation: Q1 2026 Housing Starts
In the first quarter of 2026, the annualized pace of housing starts in Quebec stands at approximately 32,000 units. This figure is slightly up from the 2024 trough (approximately 28,000), but remains well below the CMHC target. The breakdown by type shows a predominance of multi-residential projects (condos and rentals), while single-family starts remain weak due to land and construction costs.
This construction deficit exists in a context of sustained demographic growth. Immigration and new household formation create demand that far outstrips supply. For a complete analysis of price forecasts, see our article on Quebec house price forecasts for 2026.
The Structural Deficit: 13,000 Missing Units Per Year
CMHC estimates that Quebec needs approximately 45,000 new housing units per year to meet demand. With only 32,000 starts on an annualized basis, the deficit reaches 13,000 units annually. This shortfall accumulates year after year, creating a growing gap between supply and demand.
Calculation: The Deficit in Dollar Terms
Construction Deficit and Economic Impact
- • Estimated annual need (CMHC): 45,000 units/year
- • Annualized pace Q1 2026: ~32,000 starts
- • Annual deficit: 13,000 units
- • Average construction cost per unit: ~$400,000
- • Missing supply in value: 13,000 × $400,000 = $5.2 billion/year
Impact on Existing Property Prices
- • The deficit creates structural price support
- • Estimated appreciation: 3-5% per year for existing properties
- • On a $500,000 property: $15,000 to $25,000 annual gain
- • Fewer new homes = more competition for existing inventory
Takeaway: The $5.2 billion annual supply gap means current homeowners benefit from structural support to their property values, while buyers face increased competition.
Factors Slowing Construction
Construction costs: Costs have risen by over 20% since 2022, making many projects unprofitable. Lumber, concrete, and specialized labour prices remain elevated. American tariffs on certain imported materials add additional pressure. To understand this impact, read our analysis of the impact of tariffs on Quebec real estate in 2026.
Labour shortage: The construction sector faces a chronic shortage of skilled workers. An aging workforce and training deficits limit production capacity.
Municipal delays: Obtaining building permits takes 6 to 18 months in many Quebec municipalities. Public consultation processes and complex zoning regulations slow project launches.
Financing: Even though the policy rate has dropped to 2.25%, banks remain cautious in financing construction projects. Pre-sale requirements for condo projects remain high (often 60-70% of units).
Regional Distribution of Housing Starts
The Montreal metropolitan area accounts for approximately 55% of provincial housing starts, followed by Quebec City (15%), Gatineau (8%), and peripheral regions (22%). Montreal shows a proportionally larger deficit, as demand is strongest there due to international immigration concentrated in the metropolis.
Outlook and Proposed Solutions
The Quebec government has announced several measures to accelerate construction: simplified permitting processes, subsidy programs for affordable housing, and tax incentives for builders. However, CMHC experts estimate it will take a minimum of 3 to 5 years to close the accumulated deficit, even in an optimistic scenario.
For current homeowners, this deficit represents structural support for their property values. For buyers, it means increased competition and the need to act quickly when opportunities arise. Knowing the current value of your property in this context of scarcity is essential for making informed decisions.
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