The benchmark of housing affordability has changed in Canada

The podcast discusses the Canada Mortgage and Housing Corporation's (CMHC) change in measuring housing affordability, shifting the benchmark year from 2004 to 2019. Rachelle Younglai explains that the previous benchmark is no longer realistic due to significant increases in home prices and rental rates. The CMHC suggests doubling the number of housing starts annually for the next decade to return to 2019 affordability levels, but this is deemed unrealistic due to a lack of resources, labor, and slow approval processes. If housing starts are not increased, home prices are predicted to rise significantly by 2035, particularly in Toronto and other parts of Ontario. The current housing market is slow due to economic uncertainty and high mortgage costs, with more demand for detached homes than condos. Increasing housing supply could shift the perception of housing from an investment asset to simply a place to live.