Toronto & Vancouver Housing Supply Outpaced Population Growth… Until Now

Canada’s two largest markets somehow managed to keep up with record population growth—until now. The Statistics Canada (Stat Can) Canadian Housing Statistics Program (CHSP) latest update shows new homes lagged population growth in 2022. The group had previously released a study showing Canada’s housing stock had outpaced population growth up to 2021. It appears Canada took that as a challenge, ramping up population growth significantly faster than the country’s capacity to build housing. 

Canada’s National Statistics Agency Previously Revealed Housing Stock Had Outpaced Population Until 2021

Earlier this year, the CHSP released a study showing between 2019 and 2021, new homes generally outpaced population growth. This was especially surprising in cities like Toronto and Vancouver, where it’s widely believed there’s a shortage. Toronto CMA saw its housing supply (+3.5%) nearly double its population (+1.3%) over the period. Vancouver CMA displayed a similar, but not as extreme, trend with its housing supply (+3.6%) and population (+2.1%). It appears Canada considered that a challenge. 

Toronto & Vancouver Population Growth Outpaced Housing In 2022

Greater Toronto and Vancouver both saw the population outpace housing growth last year. Toronto CMA saw growth of its housing supply (+1.6%) lag its population (+2.1%) by a considerable amount. In Vancouver CMA, the gap between housing (+2.1%) and population (+2.8%) was closer, but still significant. Is the new record population growth enough to put these major markets behind? Let’s run over the numbers. 

Canadian Housing Is Still Ahead But May Not Be For Long

Using 2019 as the base year for the CHSP calculation, the population is getting close to outpacing shelter. Toronto CMA still saw growth in the number of homes (+4.9%) outpace its population (+3.4%) over the period. Vancouver CMA saw new homes (+5.7%) outpace its population (+4.9%) by a smaller margin, but still outpaced it. 

Last year, BMO Capital Markets argued the housing shortage narrative was just that—a narrative. Running the numbers, they found Canada added homes at a much faster rate than new households formed for nearly two decades, as of 2021. Separately, the bank has argued that Canada doesn’t have a housing supply shortage but it’s actively pursuing one.

Canada’s aggressive population growth seems like it won’t stop, almost ensuring it will outpace supply. However, it’s worth noting the pursuit of population growth was for an economic boost. At the current record pace, the economic boost has become inflationary, turning into a drag while applying additional upward pressure on interest rates. The result is the attractiveness of the region is fading to potential talent, as reflected in slowing permanent residency application growth.