Residential construction industry has record year, but will it be enough to meet housing demand?
OTTAWA, ON – JUNE 8, 2020 – The Canadian Home Builders’ Association (CHBA) released today its annual report on the performance of Canada’s residential construction industry, which details a record-setting year for the industry in its contribution to Canadian jobs, wages, and economic investment across the country. And though higher interest rates are currently cooling the housing market slightly, demand for new homes and renovations is still high from years of underbuilding as well as the changes to living dynamics brought about by the pandemic – even though unfortunately many buyers remain priced out of the market. With Canada’s population continuing to grow, immigration resuming, and ongoing skilled labour shortages, the strong year – and the predicted strong year to come – is a start but will not be a quick fix to Canada’s housing shortage. Ongoing increased housing starts will be required for years to come to make-up the supply deficit to properly house Canadians and to help reign in house price growth from supply/demand imbalances.
The report, Residential Construction in Canada – Economic Performance Review 2021 with 2022 Insights, features an overview of the 2021-22 residential construction market for both new construction and home renovation. It points to another strong year ahead for the industry, showing a rising trend in building permits in every province, as well as strong builder sentiment coming out of CHBA’s Q1 Housing Market Index.
Last year the industry created 1.44 million jobs (up 15%), $95.6 billion in wages (up 22%), and $182.7B in investment value – up an astounding 41% in the last two years.
It will take more than a couple strong years to correct the many years of under-building in Canada, however. The federal government’s recent budget points to the need for 3.5 million additional housing units over the next decade and a doubling in housing starts to do that; it also included much needed measures to start to address market-rate housing shortages by incenting municipalities in the creation of more supply.
In addition to changes at the municipal level, addressing the skilled labour shortage will be critical to getting more supply online.. The level of building and renovation activity in 2021 resulted in some 50,000 more people working in the industry this year according to BuildForce Canada—a good start. But if the industry is to double its output moving forward, still more labour will be required to replace the 22% of workers retiring in the coming decade.
“The residential construction sector continues to respond to the housing needs of Canadians while working through ongoing challenges of building material supply shortages and substantial prices increases, as well as labour shortages,” says CHBA CEO Kevin Lee. “The pent-up demand for housing resulted in a record year for the industry this past year, but with a huge remaining housing supply shortage, it’s also meant higher home prices. To get greater price stability in housing, more housing supply is the answer, and that means years of sustained increased housing starts.”
The report is accompanied by Economic Impact Fact Sheets that show the significant economic impacts of the industry at the national, provincial, and community levels.
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MEDIA INQUIRIES
Journalists wishing to interview Kevin Lee, Chief Executive Officer of the Canadian Home Builders’ Association are encouraged to submit their request by email to media@chba.ca.
ABOUT THE CANADIAN HOME BUILDERS' ASSOCIATION
Since 1943, the Canadian Home Builders' Association (CHBA) has been "the voice of Canada's residential construction industry." Representing one of the largest industry sectors in Canada, our membership is made up of some 9,000 companies – including home builders, renovators, land developers, trade contractors, product and material manufacturers, building product suppliers, lending institutions, insurance providers, and service professionals.