A new Leger survey, commissioned as part of RE/MAX Canada’s 2023 Industry Trends Report, found homebuyers are primarily concerned about the rising cost of living and inflation, followed by the lack of affordable housing options and the rising cost of rent, which impacts the ability to save for a home.
The report also found that one in five homebuyers and sellers endorse new building developments that address the missing middle gap and 32 per cent are optimistic the housing market will regain balance.
Beyond the transactional impacts, the challenges felt in the Canadian housing market could touch other industries as well. According to RE/MAX Canada, this includes impacting employers’ and companies’ ability to attract new workers who may find it difficult to secure housing; local communities’ ability to attract and retain new businesses to support economic growth due to rising office rental prices, lack of availability, and more.
Christopher Alexander, RE/MAX Canada President, advises how wide-spread impacts could be mitigated. “I encourage visionary thinking and solutions that may include reforming municipal zoning laws to allow for a greater diversity of housing; expanding capacity for laneway developments; and using available land to drive housing supply in a manner that doesn’t compromise climate adaption and mitigation efforts,” says Alexander. “For that to happen, some tough decisions need to be made.”
The survey underscores that most Canadians strongly believe governments should prioritize the affordability and supply crisis, while 41 per cent feel that removing zoning and development red tape is a key measure to improve housing supply. A majority of 66 per cent believe that protecting the environment (i.e. Greenbelt in Ontario) is essential for quality of life in the long-term
“Our severe lack of supply in every town, community, and city across the country, seeps into almost every facet of the lives of Canadians,” Elton Ash, executive vice president of RE/MAX Canada, said in a statement. “Not only are their housing options being impacted, but a tighter housing market may compromise job prospects, among other things, placing even greater urgency on governments and housing industry experts to address Canada’s affordability crisis.”
Regional industry trends
The top trends anticipated to impact Greater Vancouver Area’s housing market in 2023 include higher interest rates, the mortgage stress test and low inventory, which is compounded by looming demand from move-over buyers and the influx of new immigrants to the city.
The Greater Toronto Area is also likely to feel the impact of the rising cost of living, increased demand from a growing population, unemployment status, the mortgage stress test and housing diversification as it relates to “the missing middle.” With the higher cost of living hobbling first-time homebuyers’ capacity to buy, rental prices are also hitting new highs. The added demand of immigration is expected to drive up both residential sale and rental prices unless more housing inventory is added to the market.
In Edmonton, the rising cost of living is a primary concern, however, unique to the region is the growing demand from inter-provincial migration, as Canadians continue to search for pockets of affordability across the country. According to local RE/MAX broker, John Carter, this is likely to put further strain on an already-limited housing supply.
Winnipeg’s market is likely to experience many of the same factors that are expected to impact other regions surveyed, yet higher taxes are also likely to be top of mind in 2023.
In Halifax, red tape impeding development and “missing middle” housing is a prominent consideration in 2023. Together, these factors have contributed to stifling accessible and affordable housing options in a market that is already facing limited supply.
Photo by Ketut Subiyanto
