The economics department at Royal Bank of Canada warns that Canada's housing affordability crisis will worsen without policy reforms to boost supply. The report suggests that an additional 200,000 housing units need to be built annually until 2030 to meet the growing demand. However, current construction rates are declining, indicating a potential shortage in the coming years. The report proposes various solutions to mitigate the housing shortage, including expediting project approvals and promoting skilled trades.
Canada ’s housing affordability crisis will hit even more alarming levels in the coming years without a bold set of policy reforms to boost supply, the economics department at Royal Bank of Canada said Monday in a report.units annually from now until 2030, simply to meet the new demand that will arise over that period, according to RBC estimates. This would amount to an increase of nearly 50 per cent from recent completion levels – and it would require a record pace of construction.
However, the RBC report says more action is needed and soon, especially when it comes to bulking up the stock of affordable units through rentals and social housing. The rental market is also stressed. Vacancy rates have fallen to record lows, and with so much demand for units, rents have risen sharply in most places.
Despite those plans, the RBC report said the construction industry is bumping up against capacity pressures and that prices for building materials have soared over the past few years, which could hinder the affordability push. For example, one-fifth of construction workers have reached retirement age or will hit that point in the next decade.
While recent growth was “not sustainable” and will moderate in the years ahead, Mr. Hogue said demand for housing will continue to climb. He projects there will be an additional 1.9 million households formed by 2030.
Canada Housing Affordability Policy Reforms Supply Demand Construction Shortage RBC Economics Department Project Approvals Skilled Trades
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