Slower homebuilding risks wiping out Canada’s affordability gains, economists warn
“It takes, give or take, six to eight years to deliver a big housing unit, whether it’s condo or rental, in any of the larger centres across Canada. Demand can shift on a dime,” Laberge cautioned.
“Young adults living with parents, people sharing homes longer than they plan, newcomers settling permanently, and families delaying their next move can all come back into the market when confidence returns. And that will return at some point. This is not a one-year story. This is a pent-up demand story that will play out over the next three, four, five years.”
For now, there seems little prospect of homebuilding accelerating to meet the required annual level – particularly with more than a million extra workers in the construction industry needed, according to Marion, to satisfy demand.
Laberge said it makes no sense to ease off on construction even in a quieter market because it will ultimately have a negative effect on the affordability outlook. “We should not close a fire station because it’s raining,” he said. “We should welcome the rain but not sell the truck.”
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