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1.3 million more housing units will be required to close Canada’s housing gap by 2030, according to the PBO

Ottawa (Ontario), April 11, 2024

The Parliamentary Budget Officer (PBO) has released a new report on household formation and the housing stock in Canada. The report also provides an estimate of the housing gap at the national level based on the total vacancy rate. The report does not incorporate recently announced measures from the upcoming Budget 2024.

PBO demographic demand-based estimates suggest that a record 460,000 (net) new households were formed in 2023—well in excess of record net housing completions of 242,000 units. Based on PBO estimates, the unmatched increase in household formation pushed the total vacancy rate in Canada to a record low of 5.1 per cent in 2023, putting further upward pressure on house prices and rents.

PBO estimates that suppressed household formation in Canada amounted to 631,000 households in 2021. That is, the number of households in 2021 in Canada would have been 631,000 (4.1 per cent) higher if attainable housing options had existed.

The report also estimates the housing gap in Canada—the additional units that would be required to return the vacancy rate to its long-term historical average—accounting for suppressed household formation. PBO estimates that in addition to its baseline outlook, 1.3 million housing units would need to be completed by 2030 to eliminate the housing gap in Canada.

“Combined with our baseline outlook for completions, closing Canada’s housing gap would result in 3.1 million net housing units completed by 2030, which translates into 436,000 units completed annually, on average, over 2024 to 2030. This pace of housing completion would represent an increase of 80 per cent above the record level of completions in 2023, sustained for 7 years,” says Yves Giroux, PBO.

However, this would not likely be sufficient to fully address affordability concerns across all provinces and territories. Other factors, such as household income, interest rates and regional disparities would also need to be considered.

Canada Mortgage and Housing Corporation (CMHC) estimated a housing supply gap of 3.5 million units on top of 1.7 million baseline net completions. Combining baseline projections and housing gap estimates, CMHC analysis indicates that 5.1 million units will be needed over 2023 to 2030—well above PBO’s estimate of estimate of 3.1 million units over 2024 to 2030.

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On y trouve aussi une estimation de l\u2019\u00e9cart de l\u2019offre de logements \u00e0 l\u2019\u00e9chelle nationale en fonction du taux d\u2019inoccupation total.","highlights":[{"content":{"en":"PBO estimates suggest that household formation surged above pre-pandemic levels, reaching 460,000 (net) new households in 2023\u2014well in excess of record net housing completions of 242,000 units.","fr":"Les estimations du DPB indiquent que la formation de m\u00e9nage a d\u00e9pass\u00e9 ses niveaux d\u2019avant la pand\u00e9mie pour s\u2019\u00e9tablir \u00e0 460\u2009000 (net) nouveaux m\u00e9nages en 2023, beaucoup plus que le nombre net d\u2019habitations achev\u00e9es record de 242\u2009000 unit\u00e9s."}},{"content":{"en":"PBO estimates that suppressed household formation in Canada amounted to 631,000 households in 2021. That is, the number of households in 2021 in Canada would have been 631,000 (4.1 per cent) higher if attainable housing options had existed.","fr":"Le DPB estime que la non-formation de m\u00e9nages au Canada s\u2019\u00e9tablissait \u00e0 631\u2009000 m\u00e9nages en 2021. Autrement dit, le nombre de m\u00e9nages en 2021 au Canada aurait compt\u00e9 631\u2009000 m\u00e9nages (4,1 %) de plus si des options de logement accessibles avaient exist\u00e9."}},{"content":{"en":"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\u20141.8 percentage points below its 2000-2019 average of 6.9 per cent.","fr":"Selon les estimations du DPB, le taux d\u2019inoccupation total au Canada (le nombre de logements vacants, \u00e0 vendre ou \u00e0 louer par rapport au stock total de logements) a atteint un creux record de 5,1 % en 2023, soit 1,8 point de pourcentage de moins que sa moyenne de 6,9 % de 2000 \u00e0 2019."}},{"content":{"en":"Under PBO\u2019s 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.","fr":"Selon les perspectives de r\u00e9f\u00e9rence du statu quo du DPB, de 2024 \u00e0 2030, la formation de m\u00e9nages prend une avance consid\u00e9rable sur le nombre net d\u2019habitations achev\u00e9es (272\u2009000 m\u00e9nages contre 255\u2009000 logements annuellement en moyenne). Ce d\u00e9s\u00e9quilibre donne lieu \u00e0 une baisse du taux d\u2019inoccupation total, qui s\u2019\u00e9tablira \u00e0 3,9 % en 2025 avant de se stabiliser \u00e0 4,0 % environ d\u2019ici 2030."}},{"content":{"en":"Relative to PBO\u2019s baseline outlook, 1.3 million additional units\u2014181,000 annually, on average\u2014would need to be completed by 2030 to eliminate Canada\u2019s housing gap, accounting for suppressed household formation.","fr":"Par rapport aux perspectives de r\u00e9f\u00e9rence du DPB, il faudrait construire 1,3 million de logements additionnels, soit 181\u2009000 par ann\u00e9e en moyenne, d\u2019ici 2030 afin d\u2019\u00e9liminer l\u2019\u00e9cart de l\u2019offre de logement du Canada, en tenant compte de la non-formation de m\u00e9nages."}},{"content":{"en":"Combined with the baseline outlook for completions, closing the housing gap in Canada would result in 3.1 million net housing units completed by 2030, which translates into 436,000 units completed 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author={Nicol, Caroline and Vrhovsek, Zachary},\n title={Household Formation and the Housing Stock},\n institution={The Office of the Parliamentary Budget Officer},\n year=2024,\n \n address = \u0022Ottawa, ON\u0022\n}","fr":"@techreport{DPB-RP2425001S,\n author={Nicol, Caroline and Vrhovsek, Zachary},\n title={La formation de m\\\u0027{e}nages et le stock de logements},\n institution={Bureau du directeur parlementaire du budget},\n year=2024,\n \n address = \u0022Ottawa, ON\u0022\n}"}}