Canada housing supply hits deficit record in Q3 2023 – National Bank of Canada

The National Bank of Canada's Stéfane Marion is out with a report on Canada's record housing deficit which set an all-time low in the third quarter.

With Canadian housing costs soaring, supply constraints will only push mortgage lending costs and rents even higher, with Canadian home and shelter costs already seen dragging down economic growth for the foreseeable future.

Canada housing supply hits all-time deficit

The September employment report showed another outsized increase in the working-age population, resulting in a cumulative quarterly gain of 267,000 in Q3. This surge, the largest on record, followed a gain of 238,000 in the second quarter and 204,000 in the first quarter.

There is no precedent in modern Canadian history for setting three consecutive quarterly records for population growth.

... as a result, the housing supply deficit worsened to its worst level on record in Q3.

there is currently only one housing starts for every 4.2 people entering the working-age population (people 15+). This compares to a historical ratio of one housing starts for every 1.8 new entrants to the working-age population.

This massive imbalance is likely to persist for the foreseeable future until demographic growth slows significantly.