Canada's Economy
Canada's Housing Affordability Crisis
Why home prices in Toronto and Vancouver soared, how zoning, population growth and low interest rates contributed, and the policies Canada tried.
Canada has faced a severe housing affordability crisis.
Prices
- Home prices in Toronto and Vancouver rose to many times median incomes.
- Canada’s house prices relative to incomes were among the highest in rich countries.
Causes
- Supply: restrictive zoning limited new housing, especially apartments.
- Population growth: record immigration and temporary residents in 2022-23.
- Low interest rates for years.
- Investors and speculation.
Policies
- Foreign buyer taxes in Vancouver (2016) and Toronto.
- A national foreign buyer ban from 2023.
- Housing Accelerator Fund encouraging zoning reform.
- Immigration targets cut from 2025.
Rents
Rents rose sharply, hurting young people and newcomers, including students.
Lesson
Housing supply must keep up with population growth.
The basement suite
A young couple in Toronto rents a basement apartment for a large share of their income, unable to afford a house despite good jobs.
Thinking foreign buyers alone caused high prices
Supply limits and population growth were major factors.
Key takeaways
- Canadian home prices soared relative to incomes.
- Zoning limits, population growth and low rates contributed.
- Canada taxed and banned some foreign buyers.
- Immigration targets were cut from 2025.
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