Calgary needs 45 per cent more housing annually: CMHC
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The finding is part of a broader examination of the real estate landscape in Canada, which also concludes the country will need to double its housing starts to bring its levels of affordability down to those of 2019. That means an addition of between 430,000 to 480,000 homes.
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House prices, an important indicator of affordability, have steadily increased in the past few years. In Calgary, the average annual growth in prices between 2004 and 2019 was 4.3 per cent. The average rate between 2019 and 2024 grew to 7.3 per cent, making it harder for average Calgarians to afford a home in the city.
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The organization deems a housing unit affordable when its owner or renter is paying 30 per cent or less of their gross income towards shelter costs. Homeowners in Calgary, on average, paid 38 per cent of their gross income to housing expenses between 2019 and 2024, a sharp rise from 27 per cent 15 years before.
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Rent prices, meanwhile, have more than doubled in those time periods, rising from 3.4 per cent between 2004 and 2019 to 7.9 per cent in the last five years.
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Comparing CMHC's data on home prices and rent is complicated by the fact the organization calculates rent growth based on rates at most purpose-built rental units and not just those available for new tenants at the current market price.
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Although CMHC says it has started to report on rents when units are turned over to new tenants, reflecting market transactions, 'these are insufficient for modelling.'
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'The loss of affordability over the past (two) decades has been large and is becoming larger,' the report stated.
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Aled ab Iorwerth, deputy chief economist for CMHC, ascribes this problem to the pandemic, when people in cities, mainly Toronto and Vancouver, grew tired of housing costs and long commutes, and eventually moved to other cities. This was made possible by the option to work remotely.
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As a result, demand rose in other parts of the country, as did prices. However, living costs didn't get any cheaper in Toronto and Vancouver, where demand for housing continued to rise with a higher population.
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'You're still seeing population growth and income growth in those cities, so it's just that they still have positive population and income growth, albeit slower than in Alberta,' he added.
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