On September 13th, 2023 A Canadian Mortgage and Housing Corporation (CMHC) report was released stating Canada will have a shortage of 4 Million homes by 2030 and that it will have a lasting impact on the Canadian Real Estate Market!
The CMHC released a new report this week stating the Housing shortage is getting worse in Canada.
They changed their new homes built target from 3.5 million to 4 million by 2030. That means that each year almost 650,000 homes will need to be built in Canada. This is more than double what is currently being built.
As a result in Ontario they expect price growth of over 869 by the end of the decade. This is largely caused by the immigration targets and the lack of supply. Today in Canada we are building less homes than we did in 1970s with a population that is growing at an all time high.
The two reasons why pre construction pricing is on the rise is the increase in materials and hard costs, the second is the government. The harsh reality is that the government is the largest beneficiary from the process of pre-construction they account for over 31% of the total cost to develop. In Toronto this is around $300,000 per unit. New construction homes are subject to twice the tax burden as the rest of the economy.
Justin Trudeau announced the federal government would remove the GST from the construction of new rental apartments to spur new development. Now the reality is that this will not be something that the end users will see but it will incentivize builders to build more developments and help with the increasing shortage.
CMHC predicts 4m housing shortage and a 86% Ontario price growth by 2030