Canada has a housing problem. And it is not going away anytime soon.
As The Hub has highlighted, a structural housing shortage, temporarily exacerbated by pandemic-related impacts linked to record-low mortgage rates and a shift in preferences for housing by type and geography, is driving a lot of this pain (although not entirely).
This new Scotiabank report details just how stark the situation is.
“Canada has the lowest number of housing units per 1,000 residents of any G7 country. The number of housing units per 1,000 Canadians has been falling since 2016 owing to the sharp rise in population growth. An extra 100,000 dwellings would have been required to keep the ratio of housing units to population stable since 2016 — leaving us still well below the G7 average.”
But that ratio doesn’t tell the full story, writes author Jean-François Perrault. Taking into account that G7 average shows how far behind we are in international comparisons.
The average number of housing units per 1,000 residents is 471 across G7 countries. In Canada it is 424 housing units per 1,000 residents. Putting that in perspective, Perrault notes that it would take an additional 1.8 million homes in Canada to achieve the G7 average. Canada has averaged a mere 188 thousand home completions in the last 10 years.
“Our conclusion is clear: housing construction has not kept up with demand and, when looking at international comparisons, the shortage of supply is even more sharply evident. This suggests that house prices are likely to trend upward for the foreseeable future given the years it would take to close the gap between supply and demand. Much more policy focus should be devoted to finding ways to increase the responsiveness of supply to demand.”