No End in Sight for Canada's Housing Crisis

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High Prices and Rates Weigh on Buyers

Economists warn that Canada's severe lack of housing affordability and growing supply shortage will persist for years to come.

Despite forecasts for cooling home prices this spring, analysts don't foresee housing affordability returning to pre-pandemic levels even by the end of 2024. While weaker demand may curb price growth, it will also drag incomes. And even as mortgage rates decline from current highs, they likely won't match historical lows again.

"That primarily reflects a very unaffordable starting point," notes Desjardins Group. The bank adds that elevated inflation will also subdue homebuilding in 2023 amid labour shortages, weak builder sentiment, and still-high borrowing costs.

Policies to Boost Supply Moving Slowly

With policymakers increasingly focused on resolving housing shortages, meaningful progress remains years away. Desjardins points out that recently announced measures to spur construction will take time to impact actual building activity.

CIBC economists concur, arguing that inaccurate population forecasts have undermined policy efforts. "You cannot build an adequate supply of housing for population growth that you fail to forecast," the bank says. CIBC estimates that by 2030, Canada's housing construction gap could swell to 5 million units based on existing and projected population growth.?

Opportunities Amid the Crisis

The ongoing housing supply shortage highlights investment opportunities in rental housing as home ownership becomes less attainable.

I have partnered with a leading Canadian wealth management firm that provides access to alternative real estate investments not typically available to individual investors. These include multifamily rental properties that can produce stable cash flows uncorrelated to housing market cycles.

To discuss how investing in private multifamily rental property fits into your investment strategy, please email me at [email protected] or use my Calendly Link to book your private consultation with us.

This no-obligation consultation may help you understand how we strive to protect and grow our clients' wealth.

The source article, linked here, provides full details: Housing Shortages, Affordability Issues Entrenched: Reports

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#realestate #housing #affordability #Canadahousingcrisis #rentals

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