Canadian PBO Estimates 3.2 Million New Homes Needed to Close Housing Gap

Canada’s Parliamentary Budget Officer (PBO) reported that the country will need 3.2 million new homes over the next decade to close the housing gap but is not on track to meet that target, The Canadian Press reported.

The PBO projects about 2.5 million homes will be built over the next 10 years, falling short of what is required. The report anticipates construction will be stronger over the next three years before tapering back toward historical averages. On average, 227,000 new homes are expected to be completed annually.

At the same time, the PBO forecasts a sharp decline in household formation following Canada’s decision to lower immigration targets.

Increased construction and reduced demand should help correct historically low vacancy rates that have driven home prices higher in recent years, the PBO said.