(Bloomberg) -- Canada’s plan to boost construction goes in the right direction, but it will be “exceedingly difficult” for the country to build the millions of new houses needed to restore affordability by 2030, according to economists at Desjardins Group.
Government efforts may boost housing starts to more than 300,000 by 2028, up from an estimated 256,000 this year, economists Marc Desormeaux, Kari Norman and Randall Bartlett said in a report Tuesday. But hurdles such as onerous building regulations, a lack of skilled labor and soaring costs for materials will leave the market far short of what Canada’s housing agency says is needed — 5.8 million new homes in eight years.
“Simply because Canada is highly unlikely to meet that lofty goal doesn’t mean it should throw in the towel,” the Desjardins economists said. They suggested the government should focus on improving regulations, addressing financing costs and recruiting more workers to build as many homes as possible.
The lack of skilled labor is the main constraint on homebuilding, they wrote. The Canadian Home Builders’ Association has said that the country must nearly double the number of workers in the industry to tackle the housing shortage.
The benchmark price of a home in August was C$718,700 ($528,500).
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