In key Canadian cities, the housing inventory may reach a crisis stage, according to a recent analysis from RE/MAX Canada.

Low Supply in Canadian Housing

The analysis confirms that governments must take quick action to address the critically low supply of available homes. Analysts in the sector are increasingly referring to the housing situation in Canada as being in “crisis” because of the potential threat of a rise in demand for new houses.

This supply constraint is anticipated to become more problematic for a number of reasons. Between 2021 and 2023, Statistics Canada projects that Canada will receive 1.2 million immigrants, with the GTA expected to get the greater amount of them. The RE/MAX Canada research expresses worry that “there is insufficient supply to handle future expansion” due to population growth and shifting work habits driving purchasers back to the city.

A National Housing Price Decline

The largest bank in Canada is projecting that national house prices might decline by more than 12% early next year after residential property prices rose during the epidemic, with some of the most expensive districts reporting hikes of 50% or more, according to the Toronto Star.

The average price of a property in the area was $1,074,754 in July, which is already 33% higher than the $806,755 average from July 2019. This increase is mostly due to increased demand and a shortage of supply. Rising prices and higher borrowing costs also hastened the deterioration of affordability as was expected.

Foreign Ownership of Real Estate

According to immigration Canada, in efforts of alleviating the stresses caused by this change, the government of Canada will ban foreign nationals from purchasing properties beginning in January 2023, Canada, with important exceptions made for permanent residents and temporary residents, such as temporary employees and foreign students.

In an effort to calm the sweltering housing market, the federal government’s restriction on foreign ownership of real estate, according to Finance Minister Chrystia Freeland, is necessary to keep home prices from skyrocketing and driving young and working-class Canadians out of the housing market.

Freeland promised that “we will make the market fairer for Canadians.” “By acquiring properties, we’ll stop foreign speculators from stashing their cash in Canada. We’ll watch out that homes aren’t being utilized as speculative financial assets but rather as residences for Canadian families.

With little inventory of housing and the rise in property prices, it can make the already stressful process of purchasing a home that much more stressful. contact one of our real estate lawyers at Pace Law Firm today to help you navigate through these fast-changing times and to help you secure the home of your dreams in a stress-free, organized, and efficient manner.