save brentwood park
What "Housing Crisis"?
A recent publication (August 2024) by the Real Estate Institute of Canada provides insight into Canada's condo market, citing unprecedented supply coupled with a drastic decline in demand, resulting in a sharp decline in condo sales and an abundance of unsold new condo inventory in markets such as Toronto and Vancouver.
he “Housing Crisis” in Canada is a complex, multi-faceted issue intertwined with various sectors of the economy. Key culprits include:
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an imbalance in demand and supply which was exacerbated by the Federal Government setting immigration records, with the vast majority of immigrants being non-permanent residents and foreign students
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low mortgage rates for many years enticed many to borrow and stretch resources to get into the real estate market as first-time buyers or as investors
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cities such as Vancouver and Toronto have always had the attention of foreign investors who find these markets to be safe havens for investment and land banking
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workers are aging out of the skilled trades and fewer people are entering the field resulting in a shortage of experience skilled labour which drives up labour costs in construction and causes delays
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inflation has had a significant impact on the cost of construction materials, and rapid increases in interest rates have dramatically impacted the cost of borrowing for developers
Pressure is already easing and significant amount of supply has been added to the market in recent years:
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The Feds have capped the number of international students which will alleviate rental pressure, and with the normalization of immigration targets, added relief will come.
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Recent high mortgage rates have deterred investment in the real estate market.
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Policies have been implemented to deter foreign investment and speculation in Vancouver and Toronto (the Empty Homes Tax, the Foreign Buyer's Ban, the Speculation and Vacancy Tax, the Flipping Tax).
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The introduction of taxes and new legislation at all levels of government such as Airbnb restrictions and the removal of strata rental restrictions have successfully unlocked housing inventory.
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According to the Chartered Professional Accounts of Canada, the Gen-X and Millennial generations are poised to benefit from a massive transfer of wealth (mostly through real estate) from their Baby Boomer parents to the tune of $1 trillion between now and 2026 - this will unlock significantly more housing options.
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According to an April 2024 report by Rennie Landscape, Metro Vancouver witnessed a surge in housing construction in 2023, setting a new record with over 33,000 homes started, rising 28% in 2023 compared to the prior year. With a significant influx of supply in recent years coupled with dampening effects of higher interest rates and measures to deter speculation, more homes are becoming available. Condo pre-sales have slowed, developers are holding on to unsold inventory of newly constructed units, and investor buyers who are not able to support higher mortgage payments are seeking to sell; this has resulted in an abundant stock of inventory available for sale or rent. There are currently thousands of unsold new condo units across Greater Vancouver, and as the myriad of new high-rise projects that are currently under construction complete over the next few years, thousands more condo units will be added to the inventory.
Simply check Craigslist/Facebook Marketplace/liv.rent for rental listings or MLS for sales listings and you will find thousands of available homes for sale or rent across the Lower Mainland and Fraser Valley. Many of these rental/sales listings are for newly built condos which are very expensive.
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​​​We don't have a "Housing Crisis", we have an "Affordability Crisis". Unless governments provide subsidies, building more supply when construction costs continue to escalate will not improve affordability. If values start to decline and developers are not able to make a profit amidst higher costs, they will shelve their projects until they can get the pricing they need to make a profit.
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The rudimentary economic concepts of supply and demand do not apply to the housing market as supply is not elastic and housing demand and pricing are influenced by extraneous factors.
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Check out the Saretsky Report on the housing market, a popular blogger.

