The housing crisis is causing imbalances in the construction of new homes, the consequences of which will undoubtedly be felt in the long term in the greater Montreal area.
Data released by the Canada Mortgage and Housing Corporation (CMHC) on Wednesday shows that a record number of rental units were built there in 2025, while condominium construction remained at a historic low.
The CMHC Spring 2026 Housing Supply Report tells us that rental housing accounted for 80 per cent of units started last year in the Montreal Census Metropolitan Area (CMA), which is a record in itself.
Missing link housing
One-third of the housing units built fell into the category that CMHC calls “missing link housing.” This category refers to housing units with private entrances and includes, for example, multiplexes, townhouses, stacked townhouses, and apartments located in low-rise buildings.
The term “missing link” housing stems from the fact that this type of housing—often better suited to families than other types of dwellings—has long been underrepresented in the supply of new housing, hence the name “missing link.” However, across Canada, after growing at a rate of 5 per cent per year from 2018 to 2023, they experienced a surge of 44 per cent from 2023 to 2024.
CMHC also notes that in the Montreal CMA, “the construction of low-rise apartment buildings has expanded on the North and South Shores. In these areas, we are seeing neighbourhoods becoming slightly denser thanks to favourable policies and available space.”
Potential shortage of condos
In its documentation, CMHC notes that “market conditions in Montreal appear relaxed in the short term” due to slowing population growth and macroeconomic uncertainty, which have weakened demand. However, it predicts that “these conditions will not be sustained, so imbalances could emerge. (…) Demand is expected to increase as macroeconomic uncertainty diminishes. Thus, current conditions overestimate the abundance of supply.”
This overestimation will eventually have consequences for owner-occupied housing, such as condominiums. The current situation shows that there are many unsold condominium units, partly because the supply is too abundant and partly because these are mostly expensive, high-end properties, while existing condominiums, which are much more affordable and just as plentiful, are more attractive.
“Consequently,” the report states, “residential building projects (for owner-occupiers) are being delayed, cancelled, or converted into rental units, which threatens the future supply of owner-occupied housing. This supply could be insufficient when the economic situation improves and the market recovers.” It is safe to assume that if supply does indeed become insufficient during a potential market recovery, prices will once again come under upward pressure.
–This report by La Presse Canadienne was translated by CityNews
