While efforts to create more affordable housing options in Canada continue, the problem is at extremely high proportions. British Columbia and Ontario seem to have the biggest problems. There is either not enough housing or the housing available isn’t affordable. Even with government subsidies, households can’t afford to secure anything that is considered a safe and viable place for them to reside.
As of July 2023, there is an estimated shortage of 3.5 million housing units throughout Canada. Many are surprised by this due to the volume of jobs in Canada and the growing economy. Yet it is a drawback because immigrants would love to live and work in Canada, but they are worried about not finding a place to live when they get there. While there are resources in place, this housing shortage is causing many of them to hold back rather than dive in and relocate.
Buying a Home
The cost of buying a home in Canada tends to be more than many households can afford. Yet they struggle to find something to rent too. Economists share that the cost of homes in Canada has dropped from what they were in 2021. They were extremely high at that time due to the COVID-19 pandemic.
While the purchase price of a home in Canada has become more affordable, interest rates have increased. This hits hard for consumers due to the monthly payment increasing. When you consider the average home loan is 30 years, that additional interest adds up to thousands for the overall cost of the home. A household doesn’t want to struggle every month to make their house payment and cover other bills either.
There is speculation that the Bank of Canada will have at least one more rate increase before the year is over. This puts consumers in a dilemma – do they buy now at the current rates, hope the increase isn’t substantial, or hold out until next year and hope it all improves? There are so many variables and unknowns that could affect those important housing decisions!
What is being Done?
Many ask what is being done to help with the affordable housing crisis. Government subsidies are helping people make up the difference between what they can afford and the cost of housing. This isn’t a permanent solution though, driving down costs is a moment in place. Repairing and upgrading homes so they can be livable again is happening.
Owners of these properties can get help to pay for those necessary repairs and upgrades. However, they must agree to then rent the units for no more than a set price for a given length of time. This provides additional affordable housing units that would otherwise not be safe to inhabit. Hotels no longer in business are being converted into condos and apartments to add additional units.
New construction is happening all over Canada to offer more affordable housing. Often, these condos and apartments are sold before the construction is finished. The purchasers have an estimated move in date. With the shortage of skilled construction workers, such projects aren’t completed quickly. It takes time for them to be designed, approved, and erected.
The government of Canada is aware of the affordable housing crisis, and they are doing all they can to move it in the right direction. They have several efforts and plans in place to get people into safe housing they can afford. At the same time, they continue to implement resources and ideas to create more housing units. They know the shortage is extremely high and they want to see those numbers dropping!