Here is a snapshot of the real estate market, supported by key data and forward-looking trends.
TORONTO, December 12, 2023
- Sales in November 2023 fell year-over-year.
- Housing sales in November slumped to lows last seen in 2008.
- Housing supply expanded year-over-year.
- Selling prices remained flat year-over-year, giving buyers more choice and leverage.
- Higher borrowing costs & inflationary pressures continue to impact affordability.
- Expected rate cuts in H1 of 2024 to ease borrowing pressures.
Housing Affordability Crisis
- Housing affordability in Canada has reached a breaking point according to the Urban Land Institute (ULI) and PwC Canada’s annual Emerging Trends in Real Estate 2024 report.
- The crisis has been a long time coming with governments being criticized for slow action to address the problem.
Projected Housing Gap
- The Canada Mortgage and Housing Corp. (CMHC) projects a significant gap between supply and demand going forward, with only 18.2 million units available by 2030 against demand for 22 million units needed to restore affordability.
- Efforts to provide affordable homes for low-income Canadians need to be differentiated from efforts to provide attainable housing for a broader spectrum of buyers and renters.
Migration to Affordable Places
- The housing crisis has resulted in the forced migration of buyers to more affordable communities, prompting them to leave expensive cities, such as Toronto, Montreal, and Vancouver in favour of neighbouring communities or other provinces, such as Alberta.
- The Kitchener-Waterloo-Cambridge area in Ontario stands out as having benefitted from this trend.
Urgent Areas for Action
- Government housing policies at the municipal, provincial, and federal levels need to be better aligned.
- Efforts to solve the labour shortage, debt capital for rental projects, and innovative approaches to increase supply are crucial to addressing the housing crisis.
