Canada needs another 1.3M homes by 2030 to solve supply and demand gap: PBO
Canada will need to build roughly 1.3 million more new homes than are currently projected to eliminate the gap between housing supply and demand, according to a new report by the Parliamentary Budget Officer (PBO).
The figure translates into about 181,000 additional units completed on average each year until 2030, to result in a total of 3.1 million net housing units.
The report by parliamentary budget officer Yves Giroux, released Thursday, evaluates the imbalance in the housing market by comparing the total home vacancy rate in Canada to its long-term historical average.
It defines the housing gap as “the projected number of additional housing units required to balance housing demand and supply based on the total vacancy rate” by 2030.
Canada has been averaging 188,000 new housing units annually since 2015, the report notes. Looking forward, the budget watchdog expects that will grow to about 255,000 annually to a total of 1.8 million housing completions in Canada by 2030.
But it’s not enough.
The report says closing the housing gap would require a total of 3.1 million units to be completed by 2030, or an average of 426,000 units a year.
“This pace of housing completion would represent an increase of 80 per cent above the record level of net completions in 2023, sustained for 7 years,” the report explains.
The report defines a household as “a person or a group of persons (other than foreign residents) who occupy a private dwelling and do not have a usual place of residence elsewhere in Canada.”
The number of household formations surged past pre-pandemic levels last year, the report suggested, to an average of 460,000.
The report predicts that household formation will continue to outpace home completions from now until
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