Canada needs 3.5 million more homes than planned to restore affordability, says CMHC
“This is one of the key questions that we hope will be addressed coming out of our report: It’s not a question of how much housing, but how do we actually do it?” One of his suggestions is to convert underused retail or office space into residential units, something that would require cooperation amongst the various levels of government and the private sector. Hogue said the Bank of Canada’s “forceful” campaign of interest-rate hikes will further inflate ownership costs in the near term, putting RBC’s national affordability measure “on a path to worst-ever levels.” A looming price correction will, however, eventually bring “some relief to buyers,” he said, noting that property values are already slipping and are likely to fall more than 10 per cent in the coming year. Douglas Porter, chief economist at BMO Financial Group, said he wonders if the CMHC’s estimated housing supply shortfall will be as large a year from now, given increasing interest rates and expectations that the housing market will have “cooled even more substantially.” What’s more, he said, some skepticism should be attached to estimates of the supply shortfall, given that other tracking suggests there are scores of vacant homes in Canada.
