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The Canadian Housing Conundrum: High Demand, Low Supply, and the Path Forward

Many countries have mastered creating affordable housing yet at the same time many countries across the world struggle with developing affordable housing, one of them is surprisingly Canada?


The second largest country on Earth has a housing issue. In recent years house prices have gotten out of control in Canada. So much so in fact that in certain areas Canadians have started living in tents because they cannot rent a home. Housing in Canada is expensive for a variety of reasons, the largest being high demand and low supply. One contributor to this is the increase in buyers in Canada, housing is also expensive as the process to build is long and tedious and in some cases too expensive. Other nations do a lot better when it comes to creating affordable housing and Canada can learn from them to correct its path to create a sustainable future.

Canada is lacking when it comes to affordable housing as demand is very high and supply is low. According to Halpret, M. & FitzGerald, J. (2023) ‘Immigration fuels Canada's largest population growth of over 1 million’, BBC News. Just last year alone Canada received a population increase of over a million people. Yet in that same time, there were only 200,000 thousand homes built: Gilmore, R. (2022) ‘’, Global News. The nation now wants to build 400,000 homes a year however there will still be a shortage. This is a simple issue of supply and demand. Demand for homes is only growing however, supply has not increased by much. In Downtown Vancouver a two-bed two two-bath apartment costs $815,000 USD while an apartment in London costs $861,180 USD.


The problem becomes that not many people want to live in an apartment or the city. Many would rather live in the suburbs and houses instead. If we compare the prices of the suburbs and houses they are much higher. Demand is ever increasing in the suburbs but supply is not. Canada is a relatively small country and it has grown very quickly. However, the nation has not been able to adapt to this population spike and still uses the old system when it comes to developing homes. A recent article from CTV News, a popular Canadian media outlet, stated that the nation would need to build 5.8 million homes within the next 7 years: Mallees, N.(2023) ‘Long way home: Blamed for affordability crisis, liberals look to pivot on housing’ CTV News. Last year the nation was only able to produce 200,000 homes, although it has been ramped up to a little over 300,000 this year there is a long way to go. Generally, an economy will do better when there is more productivity. The roaring twenties are the perfect example the assembly line made goods easier to produce increasing productivity levels and increasing the economy. Canada can learn from this. The main problem with housing development is the red taping. There is too much gatekeeping. Companies need to apply for hundreds of permits, conduct a lot of studies and then they must present their plan to the city. However, the process is not quite finished yet. Then there is a grace period during which any citizen can file a complaint which many do. Only after each complaint has been addressed by the council and builders does the developer get approved to build. Thus it takes a long time to build. Often to develop empty land it can take up to 5 years. That's longer than the Prime Minister's mandate. If there was less red tape and builders were able to build buildings faster not only would there be more jobs, more homes, and a stronger economy but it would also mean that immigrants who go to Canada could find an affordable home and be able to call Canada home if they so please. However, there is another problem, not only is there a lot of red tape but there are also a lot of investors in the real estate market.


To ensure a future where every Canadian can afford a place to call home, it is imperative that Canada streamlines its housing development process and addresses the imbalance between supply and demand.


Bibliography: 

Gilmore, R. (2022, April 12). Canada wants to build 400,000 homes a year. who’s going to build them? - national. Global News. https://globalnews.ca/news/8752010/housing-canada-labour-shortage-cost-homes/ 

Halpert , M., & FitzGerald, J. (2023, March 23). Immigration fuels canada’s largest population growth of over 1 million. BBC. Retrieved August 16, 2023, from https://www.bbc.co.uk/news/world-us-canada-65047436#. 

Paglinawan , D. (2023, February 9). Investors own a big chunk of Canada’s housing market . Financial Post . https://financialpost.com/real-estate/housing-market-investors-own-big-chunk 


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