Canada Must Build 1.3 Million Homes by 2030 to Bridge Housing Gap
Canada is grappling with a significant housing shortage, and according to a recent report from the Parliamentary Budget Officer (PBO), the country will need to build an additional 1.3 million homes by 2030 to bridge the gap between the housing supply and demand. This translates to completing an average of 181,000 additional housing units annually to meet the goal of 3.1 million by the end of the decade.
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The PBO report highlights a critical imbalance in Canadaβs housing market. Since 2015, the country has averaged 188,000 new housing units per year. However, the pace of housing demand continues to outstrip the rate of new home completions with an average of 485,000 annually. This disparity has led to a significant shortage of available homes, magnifying the supply-demand gap.
The report outlines that to close this gap, Canada would need to increase its housing completion to about 426,000 units annually, an 80% increase above the record level of net completion in 2023. The current average of 255,00 new units per year is not enough to meet the growing demand.
In response to this housing crisis, the federal government has launched several initiatives aimed at boosting the housing supply. Prime Minister Justin Trudeau recently announced a $600 million plan to enhance prefabricated housing, alongside a $6 billion housing infrastructure fund designed to facilitate the construction of multi-unit buildings. Housing Minister Sean Fraser emphasized the governmentβs commitment to these initiatives, stating that the funding would be accompanied by regulatory changes to make it easier and faster to build homes across the country.
Despite these measures, the pBO report suggests that the road to resolving Canadaβs housing crisis remains challenging. The total home vacancy rate, which reached a record low of 5.1% in 2023, is projected to drop further to 3.9% by 2025 before stabilizing around 4% by 2030. This indicates that the supply of available homes will continue to lag behind demand, putting additional pressure on housing affordability. The housing crisis in Canada requires a multifaceted approach, combining increased funding, streamlined regulations, and innovative building practices to meet the urgent need for new homes. As the country strives to close the supply-demand gap, these efforts will be crucial in ensuring that all Canadians have access to affordable housing.
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