Welcome back to another episode of Make Money Count. The Canadian housing market is at a critical juncture, with interest rates, affordability, and construction trends all playing pivotal roles in shaping its future. In this episode, we explore the latest data and expert opinions to see where the market is going and what it means for both homebuyers and investors.

Episode Highlights

The Dual Impact of Bank of Canada’s Rate Changes

The Bank of Canada may soon lower interest rates, which could help ease the financial burden on borrowers. However, the bigger question is whether these rate cuts will be enough to make housing affordable again. Even with lower rates, history shows that it might not be enough to bring housing prices back to affordable levels, especially in cities like Toronto.

The Condo Market: A Sector Under Siege

The condo market is in serious trouble. Resale condo prices have dropped a lot, and pre-construction units aren’t selling well. New condo sales have dropped to levels not seen since the 1990s, making it difficult for developers to secure the funds they need to continue building. This could make the housing shortage even worse. As a result, prices aren’t adjusting quickly, and the market is slow to react to changes in demand.

The Future of Housing Supply: A Looming Crisis?

Canada’s per capita housing supply is already the lowest among G7 nations, and with new construction slowing down, this gap could get even bigger. This slowdown in building poses a serious risk to the market’s ability to keep up with future demand, especially as immigration boosts the population. If these trends continue, the housing shortage could become even worse, leading to higher prices and more problems with affordability.

The Canadian housing market is facing unknown challenges ahead. While the Bank of Canada can try to influence the market, it’s unclear how effective their efforts will be. During these uncertain times, staying informed and understanding the key trends will be crucial for making smart decisions, whether you’re borrowing or investing. Stay tuned for more updates and insights as we follow these developments. For more information, check out our latest “Make Money Count” episode and visit our website.