Condo Prices Dip and Ontarians Move to Alberta in Search of Affordable Housing

This week’s top real estate stories.

By  Jared Lindzon | 2 minute read

Every Friday, Wahi brings you the most important real estate stories from the past week.

Housing Crisis Not Justin Trudeau’s Fault, Says Justin Trudeau   

If you’re looking for the source of Canada’s housing woes, look anywhere but the current administration, according to its current leader. Justin Trudeau got himself into a bit of hot water this week after telling reporters that the housing crisis is the fault of the provinces, municipalities, Harper government, Pierre Poillievre, and interest rates — but not the current federal government. While the feds don’t technically have jurisdiction over local zoning, density and land use, their $82 billion National Housing Strategy,  $62 million rental housing project in Hamilton, and ambitious immigration plans demonstrate some of the ways they make an impact.    

Canada’s Housing Supply Crisis is About to Get Worse

Economics 101 teaches the basic principle of balancing supply and demand, and economists warn Canada is barrelling towards an even less balanced housing market. According to a report by TD Economics Canada’s population is growing much faster than its housing supply. According to the study, the country’s population increased by 1.2 million in the last year. That boom, coupled with the slow pace of new home construction and a planned immigration surge, could increase the imbalance by half a million units in the next two years. That is what economics call “excess demand,” and it typically results in higher prices.      

GTA Condo Sales, And Prices, Are Down for the First Time in a Decade   

In a market where prices only go up, research suggests the impossible has happened. New condo sales in the Greater Toronto Area dropped to their lowest level since 2009, according to a new report by Urbanation, declining 59% in the first half of the year compared to the same period in 2022. In fact, the number of new condo sales over the last year is the lowest over any 12-month period since 2009. Prices also dipped 1.3% between the first and second quarters, and 2.2% year over year, representing the first decline in GTA new condo prices in a decade.

Are the Rate Hikes Over Yet?  

The Bank of Canada has raised interest rates 10 times since last March, recently bringing the key rate to 5% in July, but new data is giving economists hope that the hikes are over. A “disappointing” report by Statistics Canada found that GDP only increased by 0.3% in May, after a 0.1% bump in April, with a drop of 0.2% expected for June. If that happens, GDP will only increase by an annualized 1% in the second quarter, not the anticipated 1.2%. Experts believe such a slowdown will likely inspire the bank to rethink future rate hikes. 

Ontario’s Hottest Real Estate Market is Alberta   

The dream of homeownership may be on its deathbed in Ontario, but it’s alive and well in the West. According to a new report from Royal LePage, Edmonton and Calgary are the most searched real estate markets in Canada, outpacing the cities of southern Ontario, which typically take top spots. In fact, the report notes that a large proportion of Alberta’s newest homeowners are former Ontario residents, and it’s hard to blame them. According to the brokerage’s Home Price Index the median aggregate home price in Edmonton is $434,400, and $643,200 in Calgary, compared to $1.18 Million in the GTA.