Housing supply in Canada’s cities has steadily declined over the past decade and could reach “crisis point,” a new report says.
The report, released Monday by Re/Max Canada, looked at active listings for the month of July from 2012 to 2022 in eight major metropolitan areas across Canada. It found that seven out of eight urban centers had fewer active listings in July 2022 than the 10-year average for the month.
Re/ said: “Population growth and household formation have played an important role in depleting inventory levels from coast to coast, causing chronic housing shortages in major urban centers, leading to cycles of ‘boom’ and ‘bankruptcy’.’ Max President, Christopher Alexander in a press release. During the current lull, this same scenario is likely to continue over and over again.”
The Halifax-Dartmouth area had the biggest drop in list. Compared to the 10-year average, the region had 65.5% fewer listings in July 2022, although the report notes that home buying activity has slowed due to higher interest rates and migration from other regions. Other regions of Canada slowed down.
The Ottawa-Gatineau area saw a 41.9% drop in listings from the 10-year average, while listings in the Montreal area fell 40.16%. Re/Max warned that thanks to increased migration from Ontario to Quebec, as well as interest from US buyers, “current inventory levels will not support future growth” in Montreal.
The number of listings in Calgary is 26.1% lower than the 10-year average, while in Winnipeg it is 23% lower. Re/Max noted that due to an exodus from Ontarians and British Columbians in search of cheaper housing, Calgary’s housing stock “has fallen to its lowest level in a decade.”
Greater Vancouver saw the number of listings drop 16.1% from the 10-year average. The region averaged 12,792 listings in July from 2013 to 2022, still far below the July average of 14,352 for the 10 years from 2003 to 2012.
It is a similar story in the Greater Toronto Area. List prices in July 2022 are 6.8% lower than the 10-year average of 16,458 units. This is also far below the 10-year average from 2003 to 2021, with 21,243 listings. Re/Max also notes that the population in the GTA has grown by 21% between 2006 and 2021.
“We’ve been here before,” the report said. “The actions we take now will determine our future. Currently, the supply is insufficient to accommodate future growth.” .
The Hamilton-Burlington region in Ontario was the only market to report gains above the 10-year average. In July 2022, the area saw 3.2% more listings than the 10-year average, as buyers from Toronto, as well as new immigrants, continued to push promote population growth.
Back in June, a report from the Canadian Home and Mortgage Corporation said Canada’s housing supply needs 3.5 million more homes than what was projected to be built in 2030. But Alexander believes Canada “will likely need more than the CMHC estimates to generate the desired level of affordability.”
“In this time of lower demand, construction efforts should be ramped up, not reduced,” he said. The offset effect is straining the rental market and contributing to rising levels of rental housing, he said. homeless people across the country”.
The Re/Max report says policymakers need to take actions that promote residential construction, such as cutting development fees, easing planning restrictions and approval processes, and even leverage partnerships between governments and developers.
“The problem is that housing development is a slow process, and experience tells us the only thing slower that could be government processes,” says Alexander. “Removing the barriers and cutting the red tape is necessary. A crisis is looming, but the results are not rock. There is a short runway to reverse course before the effects become very real. economy for homebuyers and renters in Canada.”