Housing Supply and Affordability in Canada
Published:
with Nathaniel Baum-Snow and Aled ab Iowerth
Accepted, Canadian Journal of Economics
Abstract:
Since 2000, housing markets across Canada have experienced growth rates in prices that far exceed corresponding rates of household income growth. However, rents have grown at similar rates to household incomes. In the 2015-2024 period, immigration has been a central booster of housing demand and population growth, compensat- ing for declining birth rates. Annual per-capita housing unit new construction rates have grown slightly to about 0.0075 across all types of markets for 1991-2024, even as Canada’s population boomed in 2023-2024, with the composition shifting markedly from single-family homes to multi-family structures. Purpose-built rental construction has recently risen from very low levels. To understand these patterns, we consider local regulatory environments and infrastructure provision, rental housing supports, sources of housing demand growth, and Canada’s macroprudential regulatory institutions and environment.