Affordability Improves in Some Major Markets, and the Slowest Year for Condo Sales

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. 

The Case for More Vancouvers and Torontos

To solve the housing affordability crisis, Canada doesn’t need bigger cities; it needs more big cities. That’s according to a new study by the CD Howe Institute, which suggests the country’s current makeup — with a handful of “superstar cities” and a whole lot of secondary locations — keeps housing unaffordable. It argues building more homes in places like Toronto and Vancouver only brings in more residents from smaller cities, keeping their home prices the same or higher. To improve affordability, the paper suggests Canada should focus on turning secondary locations — like Quebec City, Ottawa, Hamilton and Halifax — into primary hubs.

Housing is Getting More Affordable. No, really. 

It might not feel like it, but Canada’s housing market is getting more affordable. According to a new report by Ratehub.ca, higher interest rates pushed down prices in 2022 and 2023, and last year’s rate cuts did the same for borrowing costs. As a result, affordability improved in nine out of Canada’s 13 major housing markets in 2024, with just Winnipeg, Edmonton, St. John’s and Fredericton getting more expensive. The rest of Canada’s cities saw a drop in the income required to afford the average home, with the biggest declines — roughly $12,000 in annual salary — seen in Toronto, Vancouver and Hamilton.

Deflation, for Now  

The price of stuff in Canada decreased in December, increasing the odds of another rate cut next week, but what happens from there is anyone’s guess. On Tuesday, Statistics Canada announced the consumer price index rose 1.8% annualized in December, a slight improvement from November’s 1.9%, which is credited to the sales tax holiday. The announcement all but assures another Bank of Canada rate cut on Wednesday — likely 25 bps — but then things get messy. Economists are split on whether we’ll see more cuts this month, or even this year, due to the unpredictable new American administration and its ongoing tariff threats.     

Recessions Shmescession  

Canadians are concerned about the economy, but it won’t stop them from participating in the housing market. According to a new survey by the Bank of Canada, half of respondents expect a recession in 2025, and about 60% are worried about the economy. At the same time, more than 22% said they’re more than 50% likely to buy a home this year, a slight increase from last quarter. Renters were also feeling more optimistic, with 20% considering a purchase in 2025, up from 17% last quarter, while 13.5% of owners say they plan to sell, up from 11.4% in Q3.   

The Worst Condo Market in a Generation  

Toronto’s new condo market hasn’t been this slow since the early days of the Chrétien administration. According to a new report by Urbanation, new condo sales in the city plummeted 64% from 2023, making it the slowest year for new condo sales in the GTHA since 1996. Last year, just 4,590 new units changed hands, 78% below the 10-year average of 20,835. Of the six new building projects that were bold enough to launch presales in last year’s fourth quarter, only 10% of units sold. Meanwhile, unsold inventory hit a new record high of 24,277 to end the year.  

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