📝 Canada Home Supply May Have to Triple to Make It Affordable Again: BMO

The Canadian Mortgage and Housing Corporation (CMHC) recently updated its estimates of how much additional supply is ‘needed’ to bring home prices back down to early 2000s affordability levels. Its latest estimate is an additional 3.5 million units by 2030 on top of the normal flow of new supply, or roughly 500,000 extra units per year. Again, that’s above and beyond the recent pace of housing starts of roughly 250,000 annually —so they are essentially saying it will take a tripling of the pace of homebuilding to make housing affordable. To put it in perspective, the all-time record annual high for Canadian housing starts is 273,000 way back in 1976, and they nearly got back to that level in 2021. In other words, the bar is not going to be approached, let alone cleared. - BMO