Canada needs about 3.5 million additional housing units by 2030 to restore affordability. according to a report by the Canada Mortgage and Housing Corporation
The report said most of Canada’s housing supply gaps are in Ontario and British Columbia. Quebec and Alberta are also projected to need more supply because of economic growth.
“This report again highlights the crucial role of increasing housing supply if the goal is to make housing affordable for everyone in Canada,” said Aled ab Iorwerth, Deputy Chief Economist CMHC
The CMHC said the report also highlights how important it is to study both economic and demographic variables given the recent changes that have been experienced in both.
Changes in economic and demographic projections have impacted our housing demand projections since last year, it said.
Economic projections have been affected by the ongoing economic slowdown and less optimism around economic growth following the pandemic.
Demographic projections have been shaped by population movement, including interprovincial migration, during the pandemic, as well as increased immigration.
“As a result, there is a decrease in projected housing demand in some areas, such as Ontario, compared to last year. However, we expect housing demand to increase in other provinces, especially Alberta and Quebec because of economic growth,” it said.
“Evolving economic and demographic trends have also led to a shift in the supply gaps between provinces. These gaps represent the difference between anticipated housing supply and the demand for housing if prices were affordable.
“Ontario and British Columbia continue to have the largest portion of the 3.5 million housing supply gap — around 60% in our latest projection. These provinces have the least affordable housing markets because housing supply hasn’t kept up with demand over the past 20 years in some of the major urban centres.
“Higher projected economic growth in Alberta and Quebec means that the supply gaps in these provinces are higher compared to last year’s estimates. Quebec, once considered affordable, has become less affordable, indicating the need for more housing supply. While other provinces still have housing that’s affordable for households with an average disposable income, low-income households still face significant challenges in accessing affordable housing throughout Canada.”
Projected supply in 2030
Ontario
6.03
6.71
6.61
-0.10
-2
Quebec
4.12
4.57
4.45
-0.12
-3
British Columbia
2.26
2.64
2.58
-0.06
-2
Alberta
1.81
2.17
2.09
-0.08
-4
Manitoba
0.58
0.65
0.65
0.00
-1
Saskatchewan
0.52
0.56
0.55
-0.01
-1
Nova Scotia
0.48
0.52
0.51
-0.01
-2
New Brunswick
0.37
0.40
0.39
0.00
-1
Newfoundland & Labrador
0.27
0.28
0.27
0.00
-1
PEI
0.08
0.09
0.08
0.00
-4
Canada
16.53
18.58
18.19
-0.39
-2
Source: CMHC calculations
The CMHC said it has updated its projections for how much housing supply will be built in Canada by 2030 and the numbers have shifted.
“Last year we estimated that 18.6 million housing units would be available by 2030. Our updated projection is slightly lower at 18.2 million units. The main reason for this decline is the current shortfall in housing construction,” it said.
“This means there is a significant gap between the projected supply and the estimated demand. To achieve housing affordability for everyone in Canada, approximately 22 million housing units would be needed by 2030. This includes the 18.6 million that will be available anyway, plus the additional 3.5 million units needed.”
Factors contributing to our lower supply estimate include rising labour and material costs and challenges in securing credit because of rising interest rates and tightened borrowing conditions, it said.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Podcast. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list)
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