Canada’s rental housing shortage could quadruple to 120,000 units by 2026 unless there is a serious boost, the Royal Bank estimated in a new report on Wednesday.
Over the next three years, Canada will need to add just over 110,000 units per year (for a total of 332,000) to reach the optimal vacancy rate of 3%. Nearly 70,000 were built last year.
Canada’s rental housing stock increased by 2.4% in 2022. This increase was 7.4% in Calgary, 5.5% in Ottawa-Gatineau, and 2.1% and 1.4% in Toronto and Montreal, respectively. According to the Royal Bank, slow growth in Canada’s two most populous cities is being overtaken by rapidly growing demand partly due to high levels of immigration.
The vacancy rate in Canada fell in 2022 to its lowest level in 21 years, at 1.9%.
Competition for housing also led to the largest annual increase in rent growth on record, at 5.6% for a two-bedroom unit.
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