Report

Household Formation and the Housing Stock: Estimating the Housing Gap in 2035

Aug 26, 2025

This report provides projections of household formation and the housing stock in Canada over the next ten years. The report also provides an estimate of the housing gap in 2035 at the national level based on the total vacancy rate.

Highlights

After reaching a historical high of 482,000 net new households in 2024, the Parliamentary Budget Officer (PBO) projects that household formation will decline sharply in 2025 and 2026 and will remain below its historical average of 176,000 until 2030, reflecting policy changes made in 2024 by the Government to reduce immigration.
PBO projects that net housing completions will remain elevated over the next 3 years but will then converge toward historical average levels as lower immigration dampens demographic demand. Under its baseline outlook, PBO projects that 2.5 million units will be added to Canada’s housing stock by 2035, which is equivalent to 227,000 net new units completed annually over 2025 to 2035.
PBO estimates that 690,000 additional units—65,000 annually, on average, over 2025 to 2035—would need to be completed by 2035 to eliminate the housing gap in Canada, beyond the 2.5 million net completions projected in the baseline outlook over the same period.
Closing the housing gap in Canada would require a total of 3.2 million net new housing units by 2035, which translates into 290,000 total units completed annually, on average, over 2025 to 2035. This pace of housing construction would be equivalent to outperforming the record high of 276,000 units completed in 2024 for 11 consecutive years.