But Canada will still have a shortfall of 658,000 units
Author of the article:
Bloomberg News
Randy Thanthong-Knight
Published Nov 15, 2024 •
A condo building under construction in Calgary. Canada needs to build 390,000 total units annually, on average, over the next five years to close a gaping housing shortfall by 2030. Last year, housing starts dipped to about 224,000 units. Photo by Todd Korol /Bloomberg
Prime Minister Justin Trudeau’s plan to restrict inflows of newcomers will narrow the country’s gap between housing supply and demand, according to a budget watchdog.
If Trudeau is successful in curbing immigration over the next three years, that would reduce the housing gap in 2030 by 534,000 units, or 45 per cent, said the Office of the Parliamentary Budget Officer, which provides independent analysis to help lawmakers scrutinize the government’s activities.
While the slowing population growth may help reduce the severity of shortages, Canada’s housing supply would still fall short of demand by 658,000 units in 2030, according to the office’s report published Friday. It highlights the ongoing challenge of under-construction in a country that’s home to some of the world’s hottest real estate markets.
Canada would require a total of 2.3 million housing completions by the end of this decade to close the housing gap, the watchdog estimates. That translates into 390,000 total units completed annually, on average, over the next five years. Last year, housing starts dipped to about 224,000 units.
Trudeau’s government last month reduced its annual permanent-resident target by more than 20 per cent and said it wants to halt population growth by shrinking the number of temporary residents — such as international students and foreign workers — through an exodus of more than a million people.
The office, however, noted there’s “significant risk” to the projection in the government’s plan, particularly the estimated outflows. “The plan assumes that 2.8 million temporary residents will leave the country over the next three years,” equivalent to 93 per cent of the group’s current population.
Immigration Minister Marc Miller said earlier this week that the government is focused on making sure “the people that don’t want to leave after due process actually do leave.” Miller cited record increases in the number of migrants removed from Canada this year as evidence that “enforcement is happening.”
The government has set a goal to more than double the pace of construction to add 3.9 million homes by 2031 as it tries to calm housing angst and reverse waning popularity. But pro-immigrant groups have warned that the migration curb could lead to shortages of skilled labor in sectors including construction.
—With assistance from Thomas Seal.
Bloomberg.com
Immigration cuts will help housing gap, PBO says, but less than government projects
November 16, 2024
The federal government is overestimating the impact its cuts to immigration will have on the country’s housing shortage, the Office of the Parliamentary Budget Officer said in a new report.
By Nick Murray
In the analysis published Friday, the PBO said its projections still indicate the country’s housing gap should fall by 45%, assuming the Liberal government’s own population projections in its immigration plan are accurate.
The PBO isn’t entirely convinced they are, saying “we judge that there is significant risk” to the demographic projections the government made in its 2025-27 immigration levels plan.
The PBO cautioned its model assumed some non-permanent residents, whose permits or visas would expire and not be renewed under the new plan, will actually leave the country.
“Both our estimated reduction in household formation and the housing gap under the (immigration levels plan) are uncertain and likely represent upper-bound estimates,” the PBO warned.
In October, the Liberal government announced it was cutting the number of permanent residents allowed into the country over the next three years.
The plan expects to see Canada’s population decline by 0.2% in 2025 and 2026, marking the first time Canada would see an annual decline in population, the PBO said.
The PBO now estimates Canada needs to build another 1.2 million homes by 2030 to close the housing gap.
In its report Friday morning, the PBO said the revised immigration plan will reduce that gap by 534,000 units — or 45% — by 2030.
The government’s projections, factoring in its new immigration targets, suggested the population estimates would reduce demand for housing by 670,000 units by 2027, well above the PBO’s estimates and three years earlier than the PBO’s timeline.
“This difference likely reflects several factors, such as the assumed age, region and household structure of the (non-permanent resident) outflows projected under the (immigration levels plan), as well as the time horizon and counterfactual population projection,” the PBO wrote.
In a statement, Immigration Minister Marc Miller’s office said the PBO report confirms the government’s immigration levels plan will reduce the housing supply gap, and that the report’s projections are in line with the department’s own expectations regarding the housing supply gap for this year.
“While an adjustment in immigration levels is helping to reduce the strain on our housing supply, it is also true that immigration and newcomers to Canada will continue to have an important role to play in helping us grow the housing supply,” Miller’s office said.
“Immigrants are not to blame for the housing crisis and they, like everyone who lives in Canada whether temporarily or permanently, deserve to be set up for success while they are.”
This report by The Canadian Press was first published Nov. 15, 2024.
November 16, 2024
The federal government is overestimating the impact its cuts to immigration will have on the country’s housing shortage, the Office of the Parliamentary Budget Officer said in a new report.
By Nick Murray
In the analysis published Friday, the PBO said its projections still indicate the country’s housing gap should fall by 45%, assuming the Liberal government’s own population projections in its immigration plan are accurate.
The PBO isn’t entirely convinced they are, saying “we judge that there is significant risk” to the demographic projections the government made in its 2025-27 immigration levels plan.
The PBO cautioned its model assumed some non-permanent residents, whose permits or visas would expire and not be renewed under the new plan, will actually leave the country.
“Both our estimated reduction in household formation and the housing gap under the (immigration levels plan) are uncertain and likely represent upper-bound estimates,” the PBO warned.
In October, the Liberal government announced it was cutting the number of permanent residents allowed into the country over the next three years.
The plan expects to see Canada’s population decline by 0.2% in 2025 and 2026, marking the first time Canada would see an annual decline in population, the PBO said.
The PBO now estimates Canada needs to build another 1.2 million homes by 2030 to close the housing gap.
In its report Friday morning, the PBO said the revised immigration plan will reduce that gap by 534,000 units — or 45% — by 2030.
The government’s projections, factoring in its new immigration targets, suggested the population estimates would reduce demand for housing by 670,000 units by 2027, well above the PBO’s estimates and three years earlier than the PBO’s timeline.
“This difference likely reflects several factors, such as the assumed age, region and household structure of the (non-permanent resident) outflows projected under the (immigration levels plan), as well as the time horizon and counterfactual population projection,” the PBO wrote.
In a statement, Immigration Minister Marc Miller’s office said the PBO report confirms the government’s immigration levels plan will reduce the housing supply gap, and that the report’s projections are in line with the department’s own expectations regarding the housing supply gap for this year.
“While an adjustment in immigration levels is helping to reduce the strain on our housing supply, it is also true that immigration and newcomers to Canada will continue to have an important role to play in helping us grow the housing supply,” Miller’s office said.
“Immigrants are not to blame for the housing crisis and they, like everyone who lives in Canada whether temporarily or permanently, deserve to be set up for success while they are.”
This report by The Canadian Press was first published Nov. 15, 2024.
No comments:
Post a Comment