The Evolving Canadian Housing Market: Perspectives for Investors

The Canadian housing market has seen uninterrupted growth in the last 30 years, making many Canadians view residential property as a safe and profitable investment. However, the younger generation has not experienced a housing crisis, which happened in the 1990s, with property values dropping by 25% between 1989 and 1995. In 2023, the housing market has slowed down with sales at a 14-year low, and the average Canadian home price dropping by 18% Year over Year to CAD 612,000. One of the reasons for the slowing market is the rapid increase in interest rates since March 2022. Rising rates have substantially increased the cost of borrowing, making it difficult for prospective homebuyers to qualify for a mortgage. The central banks are expected to keep interest rates elevated to control persistent inflation, which will continue to put downward pressure on the housing market. In addition, new regulations have been implemented to limit speculation, increase supply, and reduce demand, which is expected to further decrease housing prices. However, there is still a housing supply issue, especially in affordable housing, and the demand for housing is expected to exceed supply, supporting prices as Canada’s population grows due to immigration. The evolving housing market has changed how Canadians think about retirement planning, and investors must be cautious about considering a house as a guaranteed investment, as it is not a liquid asset and has hidden costs, such as maintenance, property taxes, and insurance.

For a more detailed view of the evolving Canadian housing market and its impact on investors, click on the link below. It is important for investors to stay informed and seek professional advice when making decisions about their financial future.

The Canadian Housing Market [English Version]
The Canadian Housing Market [French Version]