Current construction rates insufficient to meet the demands of a booming population
Closing the housing gap would require the construction of 436,000 units per year on average and 1.3 million new units overall by 2030, according to a new report by the Parliamentary Budget Officer (PBO).
Yves Giroux's office said that failure to do so will further erode affordability and perpetuate a damaging housing shortage.
“Housing completions are the ultimate source of additions to the housing stock, with demolitions more than offsetting the contribution from conversions,” the PBO wrote in the report.
Vacancy rate dipped to a record low of 5.1% in 2023, which is significantly below the 2000-2019 average of 6.9%. If current trends continue without significant intervention, the vacancy rate is projected to fall further to 3.9% by 2025 and stabilize around 4.0% by 2030.
To realign Canada's vacancy rate to historical averages and accommodate suppressed household formation, the PBO estimates that 181,000 additional units need to be completed annually on average.
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In response to the growing crisis, the Liberal government has announced several measures ahead of the federal budget, primarily aimed at boosting housing supply. These initiatives include billions of dollars in low-cost loans to encourage more rental construction and infrastructure funding for provinces and municipalities.
However, critics argue that these government measures fall short of the ambitious targets outlined in the PBO report. With the 2023 federal election approaching, the pressure is on for the government to demonstrate a more comprehensive plan to tackle Canada's deepening housing crisis.
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