Latest news with #AledabIorwerth
Cision Canada
6 days ago
- Business
- Cision Canada
CMHC publishes new research and analysis on Canada's rental markets Français
OTTAWA, ON, Aug. 13, 2025 /CNW/ - Today, Canada Mortgage and Housing Corporation (CMHC) published research analysing three important factors in Canada's rental housing market; rent control, Real Estate Investment Trusts (REITs), and evictions. The high cost of home ownership in some Canadian cities has made renting the only viable option for many. Recent years have seen low vacancy rates and tenants facing sharp rent increases when they move to different rental units. This shows a substantial and sustained increase in supply over the long term is needed to stabilize the rental market and improve affordability. Private sector investment in rental construction is critical as governments cannot address this supply shortage on their own. However, private-sector involvement in Canada's rental market has caused many to express concerns of private landlords charging higher rents or taking advantage of tenants. This research aims to clarify the important balance between effective tenant protections and private-sector investment in rental supply. A comprehensive analysis of this research is available in the latest article by CMHC's Deputy Chief Economist, Aled ab Iorwerth, entitled Accelerating Rental Supply: Encouraging Development while Safeguarding Tenants. CMHC Housing Observer. Quote: "To increase supply and restore affordability in the rental market, private investment is critical," said CMHC Deputy Chief Economist, Aled ab Iorwerth. "Although there are legitimate concerns about inappropriate practices by some landlords, they are better addressed by strengthening tenant protections rather than discouraging private investment in rental housing. Our analysis shows cities and countries with plentiful rental supply incentivize landlords to compete to attract and better serve tenants." Research Findings: CMHC examined international evidence on the impacts of rent control and found while it can stabilize rents for current tenants, it can also have undesirable trade-offs. In some jurisdictions rent control has led to lower rental supply and tenant mobility, along with accelerated rent growth for new and vacant units. CMHC research studied the role of Real Estate Investment Trusts (REITs) in the rental markets of Montreal, Toronto, and Vancouver. Rental market share for REITs is estimated to be 6% - 12% in these cities and their properties tend to be in more expensive areas than average neighbourhoods. Rents charged in REIT properties compared to similar non-REIT properties in the same neighbourhoods; shows owner type has no significant impact on rent price. Using Canadian Housing Survey (CHS) data for 2021, 2022, and 2023, CMHC estimates that 1% of renters were evicted in the preceding 12 months of each year. This amounts to approximately 49,000 households each year. The CHS data provides a unique and useful starting point and will contribute to growing public dialogue, and further CMHC research on this subject. Follow us on X, YouTube, LinkedIn, Facebook and Instagram.
Yahoo
27-06-2025
- Business
- Yahoo
Homebuilding must nearly double over next decade to restore affordability, says CMHC
Canada Mortgage and Housing Corp. (CMHC) says the number of new homes built each year in the country needs to nearly double over the next decade to restore housing affordability. The agency in a new report estimates that between 430,000 and 480,000 new housing units a year are needed to close a supply gap that has led to higher home prices. The report flagged Montreal as the major city with the largest supply gap, where both rental construction and new units for home purchases need to be increased, followed by Ottawa-Gatineau. 'Since the pandemic, and when compared to local incomes, home ownership costs in Montreal have risen faster than any of the large CMAs (census metropolitan areas),' the agency said. By province, the most significant housing supply gaps are in Ontario and Nova Scotia, the latter of which had some of the fastest-rising housing costs due to the pandemic. 'Current trends show housing affordability challenges will become much more acute if housing supply is not significantly increased,' CMHC said. It said the focus is on restoring affordability to levels last seen in 2019, just before a surge in the cost of housing during the global COVID-19 pandemic, because restoring affordability levels seen two decades ago is 'no longer realistic.' Meanwhile, decades of housing affordability challenges in Toronto and Vancouver will take more time to address. CMHC's defines affordability as housing costs that are no more than 30 per cent of before-tax household income. However, officials at the housing agency said it is not realistic to apply this metric to Toronto or Vancouver, where lack of affordable housing under this definition has been an issue since long before the pandemic. 'Doubling the pace of housing construction in Canada is achievable, but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs,' Aled ab Iorwerth, deputy chief economist for CMHC, said. 'It will also require significant innovation in construction technology and growth in labour productivity.' Toronto, Canada's largest city, also has a sizable supply gap, according to CMHC, which estimates that a 70 per cent increase in homebuilding over the next decade would be necessary to help ease affordability issues. 'Despite increased rental construction in recent years, the region is lacking homeownership options that match local incomes,' the report said. The supply gap is less severe in Vancouver, which was among Canada's most expensive markets for several years. The city needs an additional 7,200 homes built annually — 29 per cent more than planned in a 'business as usual' scenario — to close the supply gap. In 2023, more than 33,000 housing starts were recorded in Vancouver's census metropolitan area, according to CMHC. The agency said Calgary has had record levels of home construction for three consecutive years, but it is estimated to need 45 per cent more new homes each year — and that's above the 'business-as-usual' scenario of homebuilding. 'This would help counter post-pandemic affordability challenges for both the homeownership and rental markets,' CMHC said. Edmonton is a rare Canadian market where CMHC said no additional supply is required beyond what is currently projected. 'Sufficient market housing is expected to be built in the region to maintain affordability by 2035,' the report said, adding that the city nevertheless continues to face challenges with homelessness. Who is the typical first-time homebuyer in Canada and how much money do they need? CMHC forecasts slowdown in housing starts through 2027 The latest CMHC report on supply updates figures from a 2023 report and comes less than two months after Mark Carney was elected prime minister on a platform that promised a package of new measures, including tax incentives, that the Liberals said would nearly double the rate of housing construction over the next decade, with a goal of 500,000 new homes a year. Carney also campaigned on a promise to put the Canadian government back into the business of building houses to make homes more affordable. Build Canada Homes would act as a developer to build affordable housing at scale, including on public lands. The proposal is to provide more than $25 billion in financing to builders of prefabricated homes and $10 billion in low-cost financing and capital to builders of affordable homes. • Email: bshecter@
Global News
20-06-2025
- Business
- Global News
Canada must double home construction over 10 years for affordability: CMHC
Canada's housing agency says home construction in the country will need to double within the next 10 years if affordability levels are to reach what was last seen in 2019. The Canada Mortgage and Housing Corp. (CMHC) said up to 4.8 million new homes will need to be built by 2035, with its latest supply gaps estimate report showing between 430,000 and 480,000 housing units are needed annually — far more than projections by the CMHC of 245,000 starts each year. 'Tackling this housing affordability challenge is enormous, it's absolutely critical to increase housing supply,' said Aled ab Iorwerth, CMHC deputy chief economist. Ab Iorwerth said, during a podcast published by the agency, that doubling the pace of construction was achievable but it would require a 'significantly larger and modernized workforce,' as well as more investment from the private sector, fewer delays and less regulation. Story continues below advertisement Earlier this week, the CMHC said housing starts in May edged down 0.2 per cent compared to April, with 279,510 units. The report, released Thursday, stated that restoring affordability levels that were last seen in 2004 was 'no longer realistic.' That goal was laid out in 2023, when the agency estimated Canada would need to build an added 3.5 million housing units by 2030, in addition to the 2.3 million projected to be built by that year. 1:05 'No wrong places to build housing': Robertson responds to AG report's criticism But the post-COVID-19 surge in housing costs 'changed Canada's affordability landscape,' and challenges being seen in places like Toronto and Vancouver — already ongoing for decades — would take more time to tackle. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy The report includes reassurances that increasing the housing supply is unlikely to cause financial instability as 'these forces take time to produce reactions.' Ab Iowerth added the projections in the report were calculated on a 10-year timeline for that reason. Story continues below advertisement But Ab Iowerth noted if supply is not added, prices will only get worse. 'We have predictions that, without increasing supply, house prices will continue to become more and more affordable,' he said. 'There's that challenge, but there's equally a challenge in the rental system. Rents will continue to rise because of the absence of supply, so if we don't tackle this problem, it will become a bigger and bigger problem that starts to pile up and become worse.' Housing construction was a key issue during the federal election campaign earlier this year, with the Liberals promising to double the rate of residential construction over the next decade to reach 500,000 homes per year. The plan emphasized scaling up prefabricated housing construction. It said a new entity called Build Canada Homes would provide $25 billion in debt financing and $1 billion in equity financing to prefabricated homebuilders to reduce construction times by up to 50 per cent. The CMHC report shows a return to 2019 affordability levels in the next decade would lead to house prices being roughly one-quarter lower than they would be in 2035 as it currently stands, with average rents down by an average of five per cent. Without changes, however, Ab Iowerth warns the issues facing Canadians is unlikely to shift. Story continues below advertisement 'The average person looking to rent or buy a house right now is facing a big challenge: not only is it costly, but even finding a place is hard,' he said. 'We need more housing supply so that people can move to Vancouver and find the work they want or move to Toronto and get the job they want and, in the process, help the Canadian economy.' —with files from The Canadian Press
Calgary Herald
19-06-2025
- Business
- Calgary Herald
Calgary needs 45 per cent more housing annually: CMHC
Despite a surge in housing construction in the past few years, Calgary needs to increase its annual production by more than 45 per cent to reverse the city's affordability woes ushered in by COVID-19, according to a new report by the Canada Mortgage and Housing Corporation. Article content 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. Article content Article content Article content 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. Article content Article content 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. Article content 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. Article content 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. Article content Article content 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.' Article content Article content 'The loss of affordability over the past (two) decades has been large and is becoming larger,' the report stated. Article content 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. Article content 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. Article content '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.
Hamilton Spectator
19-06-2025
- Business
- Hamilton Spectator
Home construction must double over next decade to restore 2019 affordability: CMHC
Canada Mortgage and Housing Corp. says up to 4.8 million new homes will need to be built over the next decade to restore affordability levels last seen in 2019 based on projected demand. The national housing agency released its latest supply gaps estimate report on Thursday, which said between 430,000 and 480,000 new housing units are needed per year across the ownership and rental markets by 2035. That would represent around double the current pace of home construction in Canada. A total of 90,760 housing starts have been recorded so far this year through May, and CMHC projects an average of 245,000 starts annually over the next 10 years under current conditions. CMHC deputy chief economist Aled ab Iorwerth said doubling the pace of housing construction in Canada is achievable, 'but not without a significantly larger and modernized workforce, more private investment, less regulation, fewer delays, and lower development costs.' He also called for more innovation in construction technology and growth in labour productivity. 'As we increase housing over time, house price growth will come down,' ab Iorwerth said on a call with media prior to the report's release. The report reassured that increasing housing supply is 'unlikely to cause financial instability because these forces take time to produce reactions.' Ab Iorwerth added the projections were calculated on a 10-year timeline for that reason. 'We're hoping that this will be a gradual transition,' he said. 'Housing supply will be increasing. This will start to slow the growth in house prices. Canadians will then be a little bit less keen to bid aggressively on housing ... and they'll diversify their savings into other money markets or the stock exchange or whatever. And so the pressure will be taken out of house prices.' In 2023, the agency estimated Canada would need to build an additional 3.5 million housing units by 2030, on top of 2.3 million that were already projected to be built by that year, to reach affordability levels seen in 2004. In its latest report, CMHC said that timeline 'is no longer realistic,' especially after the post-pandemic price surge seen across the housing market. Ab Iorwerth said Canada has faced a 'shock' to housing affordability since 2019. 'When we were looking at the data, we saw that there's been a lot of loss of affordability since 2019,' he said. 'We've seen these very fundamental changes in the housing system since 2019. It's what the pandemic led to, these structural changes that we're seeing in the housing system ... and that's why we've decided to look at 2019 as this aspiration to really try and address this challenge that most Canadians are now feeling.' The agency defines affordability as the amount of income that goes toward housing. In general, it aims to return to levels of affordability at which adjusted house prices are no higher than 30 per cent of average gross household income. But that ratio is projected to reach 52.7 per cent by 2035 in a 'business-as-usual' scenario, up from 40.3 per cent in 2019. Doubling projected housing starts over the next decade would bring the figure down to 41.1 per cent of income being allocated for homebuying nationally, according to the agency. During the federal election campaign, the Liberals promised to double the rate of residential construction over the next decade to reach 500,000 homes per year. The plan emphasized scaling up prefabricated housing construction. It said a new entity called Build Canada Homes would provide $25 billion in debt financing and $1 billion in equity financing to prefabricated homebuilders to reduce construction times by up to 50 per cent. Returning to 2019 affordability levels in the next decade would lead to house prices being roughly one-quarter lower than where they would otherwise be in 2035, the CMHC's report added. Average rents would also be about five per cent lower. The report included regional breakdowns, which show Ontario, Nova Scotia and B.C. have the most significant housing supply gaps by province. Montreal faces the largest gap of any major city, where home ownership costs have also risen faster than other regions in recent years, followed by Ottawa, where CMHC said new supply has not kept pace with increased housing demand. In Toronto, despite increased rental construction in recent years, the region is lacking home ownership options that match local incomes, and CMHC estimated a 70 per cent increase in homebuilding over the next decade would help to improve affordability issues. For Vancouver, it said an estimated 7,200 additional homes are needed annually above the 'business-as-usual' scenario, an increase of 29 per cent. It estimated Calgary, which has seen record levels of home construction for three straight years, will need 45 per cent more new homes annually. Meanwhile, no additional supply is required beyond what is currently projected in Edmonton, as sufficient market housing is expected to be built in the region to maintain affordability by 2035. This report by The Canadian Press was first published June 19, 2025.
