A recent report by Canada Mortgage and Housing (CMHC) reveals that even if Canada doubles its pace of home construction, housing affordability will only return to pre-pandemic levels – not beyond. The findings highlight the scale of the challenge facing policymakers and homeowners alike. 
The Affordability Strain Continues
In 2023, the cost of owning a typical home – including mortgage payments – took up about 54% of the average Canadian household’s income. That’s significantly above the affordability threshold. Without major changes in housing supply, CMHC says this ratio will barely improve in the coming decade. Even with double the current pace of homebuilding, the ratio would only fall to 41% by 2035.
Barriers to Faster Homebuilding
While political leaders, including former Bank of Canada governor Mark Carney, have proposed aggressive housing targets – up to 500,000 new homes annually – CMHC cautions that reaching those numbers isn’t easy. Delays from rezoning, permitting, and rising interest rates have created roadblocks to rapid construction.
Economists surveyed by Bloomberg, predict housing starts will average 230,000 units between 2025 and 2027. That’s well below what’s needed to close the affordability gap.
A Long-Term Challenge
High housing costs aren’t new to cities like Toronto and Vancouver, but post-pandemic population growth and low interest rates in 2020-2021, accelerated the issue. CMHC acknowledges that many low-and middle-income Canadians now struggle to find housing they can afford, with rising rents and home prices affecting generations.
What Can Homebuyers Do Today?
While long-term housing solutions evolve, we at Client First Mortgage Solutions, is here to help you find the right mortgage option. Whether you’re buying, refinancing, or renewing, we offer expert guidance to navigate today’s complex housing market. Contact us if you need to discuss your mortgage options.
Original Article: www.financialpost.com
