CMHC: The Country Needs To Build More So Houses Become Affordable

The Canada Mortgage and Housing Corp published a new report with an analysis of the country’s housing stock challenges. Apparently, Canada will face a gap of 3.5 million units in 7 years, if it keeps the current pace of home building.

The agency projects that there will be additional 2.1 million housing units between 2021 and 2030, 19 million homes nationally.

However, that still won’t be enough to make housing affordable for all Canadians, says the CMHC. According to them, Canada should have over 22 million units by that time to achieve the goal of affordable housing. That also means that construction should more than double the pace of building.

“Canada’s approach to housing supply needs to be rethought,” the report states. “The evidence has been mounting for many years that the housing supply system is broken in many parts of Canada.”

BC And Ontario Need Biggest Changes

Shocking, eh?

According to the report, two-thirds of the housing gap will be felt in these two provinces, and Quebec has also been mentioned as a place that needs to increase the construction.

However, if Ontario can build the additional 1.85 million homes over the next 7.5 years, the average home price would drop to $499,900 from $871,00 in 2021.

The average home price in B.C. could drop to $679,100 in 2030 from $929,900 if an extra 570,000 units are built.

CMHC points out, however, that the report does not account for government policies that affect demand or the longevity of the work-from-home trend post-pandemic.

CMHC Target Not Achievable, Experts Say

Aiming to build an additional 3.5 million homes in Canada by 2030 is a “massive undertaking,” says Mike Moffatt, senior policy director at the Smart Prosperity Institute to Global News.

He also pointed out that besides rising material prices, the construction industry is facing a labour crunch caused by a wave of retirements among metal sheet workers, bricklayers, and electricians.

“We’re having trouble keeping up with those waves of retirements, let alone expanding the sector. So there’s all kinds of bottlenecks here that’s going to make this difficult,” he said.