Canada's housing supply issues might be stronger than originally suggested, CIBC Capital Markets Deputy Chief Economist Benjamin Tal says.

According to a new economics report, Tal indicates that Canadian housing demand figures reported by the Canada Mortgage Housing Corporation (CMHC) don't take into account post-secondary students.

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The CMHC uses census data to calculate housing demand across the country. The census, however, inaccurately counts students who move out during the school year as living with their parents, because of this, the housing students need during the school year is unaccounted for.

"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 told BNN Bloomberg. "Regardless of who measures it, we are undercounting, because we don’t take into account students — and that’s very important."

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Tal added that since international students are also unaccounted for, rental supply must increase.

While it's difficult to know the exact shortage of homes in Canada, Tal's report places it around 300,000 households.

The figure, which Tal admits is a rough estimate, is based on a combination of assumptions regarding foreign students and American student data.

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"The bottom line: this is a rough estimate, and we will not take it to the bank," Tal wrote. "But, to get a better sense of the real supply and demand conditions in the Canadian housing market, there is a need to adjust the headship rate used to calculate household formation in a way that correctly counts the number of misclassified post-secondary students."

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