The Latest on Housing Affordability, and the Canadian Condo Market

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.

Restoring Affordability is Likely to be Either Really Slow or Way Too Fast  

It took Canada decades to get into its current housing affordability quagmire, and it may take a few more for the country to squirm its way out — that is unless there’s a major market crash. That’s according to a recent RBC report, which revealed that the bank’s housing affordability measures for Vancouver, Toronto, Victoria, Ottawa, Montreal, Halifax and Canada are at or near all-time lows. The report adds that with high interest rates depleting any relief brought by lower prices, progress on restoring housing affordability is likely to be slow, “short of a housing crash that would destroy property values.”  

Higher Rates Take a Bite Out of GTA Sales 

If the Bank of Canada’s intention was to slow down Toronto’s housing market through rate hikes, then mission accomplished. According to a new report from the Toronto Regional Real Estate Board GTA home sales were way down in September, declining 12% since August and 7% compared to last September. The Board says the slump is squarely a reaction to high borrowing costs and the fear of further hikes. Despite a significant slowdown in sales, and a 32.2% jump in new listings, prices somehow still increased by 3.4% compared to August and 3% compared to 2022, because of course they did. 

The Canadian Condo Market is Tanking; Nobody Told Alberta

Alberta’s housing market must be up to date on its vaccinations because it seems immune to the condo sales slump afflicting the rest of the country. According to a recent RE/MAX Canada report condo sales dropped double-digit percentages in the Greater Vancouver and Toronto Areas, Ottawa, and the Fraser Valley, and 3.6% in Halifax, compared to this time last year. The only markets where condo sales are up were Edmonton, which saw a 3.1% increase, and Calgary, which saw a massive 22% jump as part of a 29% increase in overall home sales, according to the Calgary Real Estate Board. 

Ontario and B.C. Homeowners Be Warned: 2024 is Going to Be Rough 

Ontario and British Columbia mortgage holders are being advised to watch their wallets, as economists forecast more challenges in the new year. According to a recent BMO report  the two are “most exposed to any further real estate downturn and potential mortgage-market driven economic weakness,” as both feature above average household debt and real estate market exposure. B.C.’s income to debt ratio is the country’s highest at 220%, with Ontario following behind at 206%, compared with a national median of 165%. With the economy expected to stay frosty through 2024, economists warn that those two provinces’ homeowners will feel the heat. 

New Housing Investment Hits “Dire” Levels 

If Canada intends to build its way out of the housing crisis, it’s doing a terrible job. According to a recent report by the Canadian Centre for Policy Alternatives, the higher cost of building and borrowing has dropped new home construction to levels below that time when the world shut down. That’s right, Canada is building fewer homes today than in April of 2020, when the economy (and planet) grinded to a halt, and by a lot. Investment in single family home construction is down 21% compared to April of 2020, and 36% since rates started increasing in February 2022.

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