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CMHC hopes new study will better explain Canada’s housing crunch

In the middle of an acute shortage of housing, the Canada Mortgage and Housing Corporation is conducting an in-depth study to figure out how much more the country will need over the next eight years.

On Friday, the House of Commons’ Finance committee held its second meeting to study Canada’s high inflation rate, which rose to a 30-year high of 4.8 per cent in December.

There’s a “mismatch” between buyers and available homes, said Romy Bowers, the Canada Mortgage and Housing Corporation (CMHC)’s president and CEO, testifying to the committee on Friday.

The CMHC is therefore starting a study of the long-term causes of housing demand, such as population and income growth. Its report is expected by June.

“Canada’s housing system is complex, and there are a number of reasons for the steep, continued price escalation,” Bowers said.

“However, it’s CMHC’s position that the main problem is that supply isn’t keeping pace with demand. Canada has the fastest population growth of any G7 nation, and housing has not kept pace with this growth.”

CMHC’s chief economist, Bob Dugan, said Canada’ per-capita housing stock is below the G7 average.

“In some provinces — such as Ontario (and) Alberta — there’s an even greater lack of housing,” he said. “These studies are a starting point for our work.”

Housing prices in December increased by a record 26.6 per cent from the year before, according to the Canadian Real Estate Association. The average price of a Canadian home rose to $713,500, an increase of 17.7 per cent.

READ MORE: Committee begins inflation study as housing prices jump 26%

About 13 per cent of Canadians live in “unsuitable” housing, or spend more than 30 per cent of their income on rent or a mortgage, Bowers said.

On any given night, about 35,000 Canadians are homeless, she added.

On Friday, Ottawa announced funding for 10,000 more affordable-housing units, an increase of 2,500 from an earlier promise to build 7,500 units.

Bloc Québécois MP Gabriel Ste-Marie said the federal government’s response to housing has been part of the problem.

“The current government is re-investing (in subsidized housing), but very timidly,” he told the committee.

“We’ve seen terrible delays in the signing of agreements, and even more so in the transfer of money. The solution is for the government … to invest more in social housing, more quickly.”

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