Report: Canada needs to build 1.3M new homes by 2030

Key Takeaways:

• The parliamentary budget officer says 1.3 million new homes must be constructed by 2030 to bridge the nation’s housing deficit.
• The achieve this, Canada must build 181,000 more homes annually compared to current construction rates.
• The total vacancy rate in Canada (the number of vacant units, for sale or rent, relative to the housing stock) reached a record low of 5.1 per cent in 2023

The Whole Story:

The latest analysis from the parliamentary budget officer (PBO) underscores the pressing need for additional housing in Canada.

According to the report, an estimated 1.3 million new homes must be constructed by 2030 to bridge the nation’s housing deficit. Officials say this figure is crucial for restoring Canada’s vacancy rate to its historical average.

Based on PBO estimates, the total vacancy rate in Canada (the number of vacant units, for sale or rent, relative to the housing stock) reached a record low of 5.1 per cent in 2023—1.8 percentage points below its 2000-2019 average of 6.9 per cent.

Under the PBO’s status quo baseline outlook, over 2024 to 2030, household formation outpaces net completions (272,000 households versus 255,000 units annually, on average). This imbalance pushes the total vacancy rate lower to 3.9 per cent in 2025, before stabilizing at around 4.0 per cent by 2030.

Yves Giroux’s office considered various factors, including the projected increase in households if adequate housing options were available. Consequently, the PBO suggests that Canada should aim to build 181,000 more homes annually compared to current construction rates.

Despite recent federal initiatives to boost housing supply and the implementation of Ottawa’s temporary resident cap, these efforts were not factored into the report’s calculations.

The Canadian Mortgage and Housing Corp. echoed the urgency in their data as well, advocating for the construction of 3.5 million homes by 2030 to restore affordability levels to those of the early 2000s.

Giroux’s estimate diverges from CMHC’s, as he primarily focused on closing the gap between housing demand and supply. Meanwhile, the Liberal government has announced a series of housing measures ahead of the federal budget. These proposals primarily aim to increase rental construction by providing substantial low-cost loans and offering infrastructure funding to provinces and municipalities.