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Ontario better get building if it wants to have the same number of homes per capita as the other provinces, Scotiabank wrote in a report this week, with more than 650,000 houses needed to match up to it interprovincial peers.
If it wanted to break even with its G7 peers, it would need to build a substantial 1.8 million homes.
“As we look to the future, we remain of the view that the chronic shortage of housing relative to the population’s needs will put upward pressure on prices and reduce affordability,” Scotiabank wrote. “This is not to say prices will increase every month. There are likely to be months or short periods where prices do not rise and perhaps fall. Our view is that prices will generally be on the rise until a better balance between needs and availability is found.
There are encouraging signs, however. Housing starts are running well above pre-pandemic levels, though that pace of construction, if sustained, is unlikely to meaningfully close the gap between supply and demand anytime soon given the size of the gap to be closed, and an expectation of strong immigration growth in coming years. The available completion and population data for 2021, for instance, suggest some improvement in dwellings to population ratios across the country. There is, nevertheless, a big hole to fill.”
What it takes to meet housing demand
The country as a whole would need 1.8 million new homes to match its population adjusted housing stock with the rest of the G7.
“Many provinces and municipalities do appear to be taking the supply issue more seriously. The Canada-British Columbia Expert Panel on the Future of Housing Supply and Affordability is a great example of serious thinking on these issues. Ontario’s recently announced Housing Affordability Task Force is another sign that governments are more focused on finding ways to boost supply.”
“While these efforts are all welcome, what will matter most at the end of the day is actual progress in increasing supply in a responsible manner,” the report states. “History suggests that we have not been very good as a country in achieving this. Let’s hope current initiatives mark a solid break from past performance.”