Several reports cite lack of supply as a significant cause of unaffordable housing in Vancouver, and In Canada
Unaffordable housing has been a problem plaguing Vancouver, Canada for quite some years now. With its major cause rooted in a severe housing shortage, unplanned spikes in housing prices are now hitting people in almost every part of the country. Several houses over the years have also sprung up to back this devastating reality up.
To begin with, a recent CMHC report deduced low housing supply as a chief factor behind housing unaffordability in Canada. According to research conducted in the report, Canada’s housing supply shortage continues to be a significant factor contributing to housing unaffordability
The Housing Supply Report dishes out insights and analysis on new housing supply in Canada’s six largest Census Metropolitan Areas (CMAs). This report's findings will help better understand why some markets are less expensive than others, for this study utilized data from the Starts and Completions Survey. This survey tracks the monthly progress of residential construction projects.
On a specific note, it also provides:
- Increase in the number of houses available per person
- How many units per structure and how high a structure is
- Diverse new housing stock concerning both types of home and target market
- Further housing supply distribution by region
Other highlights provided by the survey include:
- New metrics, such as the number of units per structure and the height of the building.
- A look at the various methods used across the country to deliver new housing supply.
To further express the negative impact of lack of housing on its affordability, here are highlights from the Housing Supply Report:
- In some CMAs, particularly Toronto, housing statistics have lagged behind population growth, making it difficult to find affordable housing.
- In major cities like Montreal, Toronto, and Vancouver, an apartment building is the most common type of construction. The various limitations (land, bylaws, etc.) may be more critical in these CMAs. Meanwhile, new home construction (including single-family, semi-detached, and row) is vital in Calgary, Edmonton, and Ottawa.
- Several CMAs, including Montréal and Vancouver, saw an increase in new rental housing starts. But new rental housing construction in Toronto continues to be scarce.
- Several high-rise apartment complexes with several units are being built in Toronto (including units for rent or ownership). In many CMAs, the urban landscape is dominated by a large number of buildings with a smaller number of units and floors.
- Depending on the building type, construction time and cost can vary. The market's affordability may therefore be affected by the ability of some CMAs to deliver new units faster and at a lower price.
Below are some essential highlights of one of the large urban centres - Vancouver
- In 2021, more than 85% of new construction in Metro Vancouver was multi-family. In light of this, many constructions happening near public transportation sprung up.
- To better use the region's scarce and costly land resources, the Vancouver area constantly experimented with new housing models.
- Due to Vancouver's current and projected supply gaps, new technologies and densification strategies are urgently required.
- Diversifying the supply of rental housing in Canadian cities is possible by using Vancouver-style housing forms such as secondary suites and laneway homes.
- Using Vancouver as a case study, these highlights express a lot of changes among homeowners and buyers. Promising homebuyers now keep their expectations in check.
While some of these people go for lower choices, others move out of their communities entirely to settle down in a less expensive and more affordable part of the country, which in turn causes a price increase and puts the same cycle in motion.
The Housing Supply Report is the first series of publications released in recent years addressing housing supply. There are upcoming reports that will also provide analysis on supply gaps.
Existing reports like this show that housing has a significant impact on the health of children and youths. One-third of households in Canada live in substandard conditions or housing needs.
Other Causes Of Unaffordable Housing in Canada
Apart from the lack of supply as a primary reason for unaffordable housing in Canada, there are other contributing factors to this crisis. Below are a few reasons people can't afford houses in Canada.
- Rigid Government Regulations
Canada housing laws are quite rigid, even more than some places in the United States. As a result of these added regulations, fewer houses are being built each year. In addition to delaying construction, laws can also increase the building costs. All of these factors make housing unaffordable for prospective home buyers and owners
An instance of one of these regulations is the National Building Code that centers around structures that get occupied in winter m and how they will require a minimum level of energy efficiency.
Cities and suburbs around Canada's largest cities are where most of the country's homes are built. In addition to following federal and state building codes, contractors must also follow local regulations. Local and national rules dictate where, how, and when a new home can be constructed in urban Toronto. Construction is slowed, and costs go up because of this overlapping jurisdiction.
- Foreign Investment
Hot markets like housing or other forms are a magnet for investors. There's a flexible policy in Canada with foreign investment. And as much as that is a good business strategy, lately, it has quite the toll on housing.
The rise in outside investors coming into Canada and purchasing real estate with the sole intentions to repurpose or redevelop it, majorly for profit, arrives at increased prices.
And we all know what that ends at. Lack of supply sets in and causes unaffordability for several people.
- Immigration Increase
Studies have shown that Canada possesses the eighth highest number of immigrants globally. One in five Canadians is foreign-born, which makes it one of the highest rates in the modern world.
But despite its relatively low population, Canada has a long history of being very open to immigrants. But this open-door policy also brings about increased housing costs.