The parliamentary budget officer estimates that Canada needs to build 3.2 million new homes in the next decade to close the housing gap, but is currently not on the way to do so.
The last PBO report estimates that the number of new houses constructions will be greater in the next three years before gradually returning to historical averages.
Project an average of 227,000 new houses will be completed every year during the next decade, but says that additional 65,000 per year should be built to close the housing gap.
“[We need to] Keep in mind the fact that there will be needs and there have been needs that have not been met in recent years, what we call suppressed demand, “Yves Giroux told CBC News.
At the same time, he expects a strong decrease in the number of new homes that are formed after Canada reduced its immigration goals.
“Reduce future intakes or intakes that begin The past fall will contribute to reducing pressure [on housing demand]But it will not make this pressure disappear completely, because we have welcomed hundreds of thousands of new immigrants in recent years, “Giroux said.
Giroux said that the demand has also been “suppressed” in recent years, caused by some segments of the population that feel at prices outside the market. The vacancy rate reached 3.3 percent in 2024, well below the historical average of 6.4 percent reached between 2000 and 2019.
“When vacancies are low, they do not have enough options and could mean higher rentals or housing prices that their means allow them to pay. And it forces them to stay where they are, even if it is not enough or not what they want or what they need,” Giroux said.
The increase in construction and decrease in demand should be combined to correct the historically low vacancies rate that contributed to housing prices in recent years.
The PBO says that around 2.5 million homes are built during the next decade, which is less than the 3.2 million it says is necessary to close the housing gap.
Tuesday’s report does not take into account the recent federal policy commitments. During the spring election campaign, the liberals promised to double the construction of homes.
Giroux said the housing gap could be closed depending on how successful Ottawa, and other levels of government, in the implementation of housing plans.
“Since we have not seen how these projects or ads will materialize and translate … it is too early to know if these will be effective to reduce the housing gaps,” he said.
