The Delayed Spring Housing Market, and Housing Construction Continues to Drop

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.

A Buyer-Friendly Spring Has Sprung

The economy might be off kilter, but Canada is currently enjoying “the most balanced market conditions” it’s seen since before the pandemic. That’s according to the latest report from the Canadian Real Estate Association (CREA), which found national home sales dropped by 1.7% in April. Home prices, meanwhile, remained stable month-over-month, even dropping 0.9% since last April, once seasonally adjusted. At the same time, the number of newly listed properties increased by 2.8%, leading CREA’s board chair to declare “the spring market is now officially underway,” despite high mortgage costs — albeit a quieter, more leisurely spring market for buyers.

Housing Starts Continue to Slow  

For a country that desperately needs more homes, Canada is pretty bad at building them. According to new data from the Canadian Mortgage and Housing Corporation (CMHC), housing starts declined another 1% in April compared to March, which saw a 7% drop compared to February. While housing starts shot up 41% in Montreal, other Canadian urban centres continue to see a slowdown in construction, with home starts down 17% in Vancouver and 12% in Toronto. According to CMHC Chief Economist Bob Dugan, the downward trend is “unsurprising” given last year’s challenging borrowing conditions, which has significantly slowed condo construction in major cities.

Rents Going Up in Places Once Considered Affordable  

There was a time when price-conscious Canadians could abandon the big cities to enjoy more affordable accommodations elsewhere, but those days may soon be over. According to a new Rentals.ca report rents remained near record highs nationally, increasing 9.3% in the last year and 0.3% in the last month, averaging $2,188. The only province that didn’t see a rent hike was Ontario, where prices dropped 0.3%. Rents in Vancouver also experienced a 5.1% decrease, adding to a recent pattern of national price flattening that’s seen rents come down in the most expensive regions and rise everywhere else.   

Ontarians Sour on the Suburbs  

For a moment, suburban life was all the rage in Ontario, as first-time homebuyers moved away from the workplaces they believed they would never have to commute to again. Now that trend appears to be reversing, as more employers demand their staff return to the office — at least a few days a week. According to a recent survey of new home buyers in Ontario, 49% want to live in the burbs, down from 57% last year. Most Ontarians still prefer the city life, though small town living is also seeing an increase in appeal.  

Out With Foreign Buyers, In With Local Investors  

With the foreign buyer ban in full effect Canada’s investment property market is now “dominated” by private investors, who accounted for 73% of transactions in the first quarter of the year, according to a recent study by Avison Young. Another 8% of investment properties were scooped up by institutional investors, and 12% by end users, with the remaining 7% split between developers, government, and foreign buyers. According to the Bank of Canada, investors accounted for about 30% of new home sales in Q1 of last year. Statistics Canada also reports more than half of new condos in Toronto are investor-owned.

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