Today, Tuesday, November 22, is National Housing Day in Canada. Recognized each year by all levels of government, it's intended to highlight the work of housing providers who are improving access to safe and affordable housing for Canadians.
But as Canadians all across the country struggle with the state of the housing market, namely its lack of affordability, this year's National Housing Day serves as a reminder of the bleak reality many — from homeowners to investors to developers — are facing.
To commemorate the day, let's take a look at the current state of the housing market with some of our latest articles.
The Rental Market Is Shifting
- Across the country, rent prices may still be growing, but that growth has started to slow.
- In Toronto, one of the country's priciest rental markets, landlords are "losing leverage," according to local agents, as more inventory comes on the market. Some landlords are even having to reduce prices or accept offers under asking.
- Despite the slowdown, shocking rental arrangements are still making their way onto the market, like shared rooms with just a mattress on the ground asking $850 per month.
Sales Are Slowing, And So Are Prices
- Home prices are lagging in the majority of markets across Canada as sales continue to fall, largely due to affordability issues and prohibitively high interest rates.
- In the Greater Toronto Area, home sales flatlined as the benchmark price slid month over month.
- Meanwhile in Vancouver, home sales were down as inventory levels saw a welcomed increase.
- Ontario's popular cottage country is still seeing activity that's in sellers' favour, however, many sellers are trying to shed "very high-end" listings. When affordability issues hit, it's usually vacation properties that are first on the chopping block.
The Pre-Construction Market Is Hurting Too
- Slower home sales are hitting the pre-construction market just as hard, and developers are now having to invest more heavily in marketing their new builds to potential buyers.
- Home builders have become "pessimistic" about selling conditions as new home prices continue to decline.
- But there is still some success to be had for homes that are priced well in the right market. A new development in Pickering, Ontario sold out 95% in its first week by pricing just below market value.
Developers Are Facing Serious Financial Trouble
- As pre-construction sales slow and the market remains uncertain, many developers are holding off on, and sometimes even cancelling, new projects as they struggle to make new housing developments make financial sense. One study found that in the Greater Toronto Area, 40 condo projects that were expected to launch this year have been shelved.
- A number of large developments have been placed under receivership due to financial issues, including five projects from Vandyk Properties and Sam Mizrahi's The One, which is $1.6B in debt. Elevate Condos, a four-tower project in Kitchener, also recently went into receivership after defaulting on $64M in loans.
- Rumours are swirling that major developer Westbank is facing insolvency as eight of their projects have had liens issued against them. Westbank has denied these rumours.
Affordability Struggles Abound
- As home prices slid, Canadians saw marginal improvement in affordability in October.
- But that improvement comes as Canadians are spending a record share of their income on mortgage payments, forcing some to seek out a second job or contemplate moving.
- Some experts are warning of a wave of forced home sales as Canadians struggle to keep up with their bills.
- In Toronto, encampments are back as shelters overflow from demand.
- The biggest dampener to affordability has been the series of Bank of Canada rate hikes. Here's how each one has affected the market.
The Government Is Taking Action
- Just this week, the federal government announced billions in housing construction funding to help build more rentals and affordable housing.
- After restrictions implemented at the city and provincial level in many areas, the federal government is now targetting short-term rentals like Airbnb, trying to disincentive their operations so that those units can be sold or returned to the long-term rental market.
- The Government of Canada removed GST from new purpose-built rental developments to make the housing type more attractive to builders. The Ontario government followed suit, removing their portion of the HST for new rental builds.
- The new Housing Accelerator Fund has doled out hundreds of millions of dollars to cities all across the country from Calgary to Hamilton to Halifax, providing these cities with funding for thousands of new homes over the next decade.
Exploring Alternative Housing Solutions
- As many offices continue to sit vacant, the idea of repurposing those spaces for residential use is gaining steam. Calgary is leading the charge on this with a number of projects underway, including the nearly finished Cornerstone building.
- Demand appears to be increasing for student-senior housing arrangements, with an app called SharedSpaces launching to facilitate those types of agreements.