Housing demand stronger than suggested due to data gaps: CIBC
The demand for housing in Canada may be stronger than official data suggests, according to CIBC Capital Markets Deputy Chief Economist Benjamin Tal.
Tal told BNN Bloomberg housing demand may be underestimated because post-secondary students are being undercounted in relation to how many households are being formed.
“We need to know whether or not we are building too much or too few houses. It’s not clear, quite frankly, if you look at the overall situation,” Tal said in an interview Tuesday, arguing data that’s collected by Statistics Canada and the Canada Mortgage Housing Corporation is incomplete.
“Regardless of who measures it, we are undercounting, because we don’t take into account students – and that’s very important.”
Tal said incorrectly counting the number of students who live outside of their parents’ home for the majority of the year is problematic because it doesn’t provide a true sense of supply and demand in the country’s housing market.
He stressed it’s “extremely important” to get the data right in order to ensure the country builds an appropriate amount of homes.
“When you look at supply, you also need demand,” Tal said. “If demand is measured inaccurately, that’s a major issue because then supply will be inaccurate. So we have to be careful here – you don’t want to build too much, you don’t want to build too little – you want to make sure that we are just right.”