(Toronto) Canada’s federal housing agency fears affordability will deteriorate unless the country soon addresses supply issues and puts in place other measures for the sector.
The Canada Mortgage and Housing Corporation (CMHC) sounded the alarm last summer when it estimated that the country needed to build 3.5 million more homes than expected by 2030, to achieve minimal affordability.
While 271,000 homes were built two years ago and about 260,000 last year, chief economist Bob Dugan now predicts between 210,000 and 220,000 will be built this year.
Mr. Dugan sees in these figures a sign that the country is heading in the wrong direction and he is not optimistic that it will double the rate of housing starts.
Construction efforts have been limited by labor shortages, higher interest rates and rising material costs, as well as zoning issues and the phenomenon of “not in my backyard” campaigns.
Dugan admits his outlook isn’t rosy, but believes there’s a bright side to it: times of crisis can spur innovation, which could positively alter current housing forecasts.