The decline comes as population growth that once exploded Calgary's housing market has slowed due to a drop in international migration, after Ottawa tightened its immigration rules

The number of housing starts in Calgary is 20 per cent lower than last year, barely meeting the threshold needed to restore pre-pandemic affordability levels by 2036, according to the Canada Mortgage and Housing Corp.

Still, the city is the best-performing major city in Canada after Edmonton.

Calgary has almost halved its supply gap in the past year as investors from across Canada rushed into Calgary to cash in on an influx of migrants, pushing housing starts — most of which were driven by the purpose-built rental market — to 27,684, a record 13.6 per cent increase from 24,369 the previous year.

Taylor Pardy, chief economist at CMHC, told Postmedia that the number of homes entering construction has fallen by 20 per cent and is projected to reach 23,000 this year. Purpose-built rental homes account for 30 per cent of the drop, albeit comprising 60 per cent of all housing starts.

The decline comes as population growth that once exploded Calgary’s housing market has slowed due to a drop in international migration, after Ottawa tightened its immigration rules, which in 2023 were responsible for increasing the number of temporary residents to 805,000 residents in Canada in 2023.

The city estimates population growth in Calgary nearly halved in 2025 to 3.2 per cent from 6.2 per cent the year before.

The continuing decline pinched apartment sales by 26 per cent in August, according to a new report by the Calgary Real Estate Board. Semi-detached homes came in second with an 18 per cent drop, followed by row houses and detached units with reductions of 16 per cent and 12 per cent, respectively.

Inventory also declined among some types. Apartments saw a four per cent drop, while semi-detached homes were the only housing type whose supply rose by five per cent.

The trend is also being reflected in building and development permits.

Although approved building permits in Calgary in the second quarter of this year rose by 32 per cent from the previous quarter (declining by five per cent year over year), the city signed off on 23 per cent fewer development permits than the previous quarter and 42 per cent fewer than the same period last year.

A drop in development permits is an early warning sign of further shrinking of the housing market in the coming years, as it indicates developers are pulling back on new projects.

A surge of rental units — which by 2023 jumped to more than 23 times the average number of housing starts between 2000 and 2010 — combined with a lower population forecast has also discouraged ownership of such units and, as a result, has slowed sales.

New listings have also dried up, preventing a further rise in supply, but “not enough to help the market shift away from buyer-market conditions,” the report stated.

Despite the drop in housing starts, they are expected to be 4,000 higher than the city’s 10-year historical average of 19,000 units.

“On the whole, Calgary is doing quite well in this respect,” Pardy said. Overall housing competition, according to CMHC, increased by nine per cent from the same period last year, with the number of apartments rising by 32 per cent.

Jamil Thobani, a local realtor in Calgary, said since renting has become more attractive, he’s increasingly seeing more clients who are families or individuals looking to live in Calgary instead of speculative investors.

“Last week or the week before, I was out showing a property to two sets of clients from Ontario, and they were pondering, ‘Can I live in Calgary and bring down my costs?’ Thobani said. “As opposed to, ‘I want to invest in Calgary and try and get the upswing because you know we see that homes are undervalued compared to where we’re coming from.'”

The previous gains in supply, however, haven’t alleviated affordability-related woes for many low-income Calgarians.

The number of working poor in Calgary has doubled in 2026 as housing costs continue to balloon amid stagnant wages that have trailed inflation, according to a recent report by Vibrant Communities, a non-profit tracking affordability in the city.

Its report found that median rents have risen by 44 per cent since 2021, pushing Calgary Housing’s affordable housing wait list to 7,739 households by June.

Demand at the Calgary Food Bank has also soared over the past year, reaching 200,000 emergency hampers between September 2024 and August 2025, up from 173,300 the year before.

If supply falls, their problems might get worse. However, Pardy said recent job growth in Calgary — which rose by five per cent year over year — will lead more people to Calgary and continue to find the city an attractive location for housing construction.

“Population growth is going to normalize and increase again over the next year or so, just given some normalization in things like immigration policy, for example,” he added.

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