The Canada Mortgage and Housing Corporation (CMHC) says it is maintaining its 2022 projection that the country needs about 3.5 million additional housing units by 2030 to restore affordability.
“Most of Canada’s housing supply gaps are in Ontario and British Columbia,” the CMHC stated in a report released today. “Quebec and Alberta are also projected to need more supply because of economic growth.”
The current shortfall in housing construction is seen as the main reason for this decline.
Although CMHC maintains last year’s “housing supply gap” projection, it says that its size has changed across provinces.
In some, like Ontario, lower projected growth in income per household will lower demand for housing. In others, like Quebec and Alberta, it projects growth in incomes will rise proportionately more. As a result, more housing will be needed.
Although immigration to Canada is currently at higher levels than forecasted, the CMHC projects that the number of households in the country won’t be significantly higher in 2030 than last year’s projection and expects population growth to fall back after the current policy ends in 2025.
In this year’s updated report, CMHC explored two additional scenarios.
The high-population-growth scenario examines what will happen to the housing supply gap if current immigration trends continue to 2030. It finds that the gap would increase from 3.5 million to 4 million housing units. This is because the higher population, and larger pool of income it brings, increase demand for housing.
The low-economic-growth scenario looks at what will happen if economic growth is weaker than in the baseline scenario and current immigration policies end in 2025. In this case, the housing supply gap will fall to 3.1 million units, the CMHC says.
“This report again highlights the crucial role of increasing housing supply if the goal is to make housing affordable for everyone in Canada,” Deputy Chief Economist Aled ab Iorwerth said in statement. “It also demonstrates the importance of examining both economic and demographic variables given the recent changes that have been experienced in both”.
