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First-time homebuyers throughout the country are facing some of the most challenging obstacles to home ownership in decades, due to the convergence of factors that have deepened Canada’s housing crisis, driven down home-ownership rates, and locked a growing number of would-be buyers into the rental market.
The latest RE/MAX Canada report examined how price appreciation, rapid population growth, and a limited supply of affordable housing stock have propelled rental markets in six major Canadian cities in recent years.
Key Challenges
The Supply Shortage: Housing supply shortages have also been responsible for rising prices. Builders and developers are eager to get shovels in the ground, but projects need to be financially viable to proceed.
Hefty Development Charges: Development costs and municipal charges also need to be addressed in major urban centres including Toronto, where they have risen to their highest level on record, to $189,325 per low-rise unit in 2022, up 21 per cent over 2020 levels, according to the Canada Home Builders Association Municipal Benchmarking Study, prepared by Altus Group in October of 2022.
Unprecedented Population Growth: Population growth has both underscored and exacerbated the undersupply of housing in Canada’s major cities. Looking forward, serious housing gaps exist in relation to projected population growth.
The Buy or Rent Debate: Those hoping to enter the housing market for the first time have been caught in the middle, unable to afford to buy, as they continue to rent at rates that are on par with mortgage carrying cost in many cities.
Problematic Policy: Canada was once more vested in home ownership.
Creating Opportunity for First-Time Homebuyers
All stakeholders need to come to the table to prioritize creative solutions for Canada’s housing market now—not years from now. “We need policies and incentives that support home ownership as a feasible reality for Canadians, not a distant or improbable dream,” explains Christopher Alexander, President of RE/MAX Canada.
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