Addressing the affordability and supply crisis should be a top priority for governments across Canada — a sentiment shared by 66% of those surveyed — while 41% believe that removing zoning and development red tape is a “key measure” to alleviating the issue.

Sixty-six percent of respondents indicated that protecting the environment would factor into their future real estate transactions. Real Estate Canada noted that the Government of Ontario’s plans to develop the Greenbelt has been a “particularly contentious topic.”

Locally, the Greater Toronto Area is expected to see residential sale and rental prices rise, due in part to increased immigration and the rising cost of living, unless more inventory hits the market. A similar trend will play out in Vancouver, compounded by move-over buyers, and in Edmonton, as Canadians head for the dwindling faction of affordable cities across the country.

“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.”

On an industry level, the changing market could result in some “major shifts” in how realtors run their business and cautioned that the economic slowdown may result in some consolidation of brokerages.

Beyond buyers, sellers, and realtors, the effects of affordability and supply challenges are felt on a much grander scale — according to Statistics Canada, the Real Estate and Rental and Leasing (RERL) sector contributes more than $266B annually to Canada’s gross domestic product (GDP).
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But some experts say there’s also room for optimism. In their most recent market outlook report, the Toronto Regional Real Estate Board (TRREB) called 2023 “a year of two halves.” The 2023 Market Outlook & 2022 Year in Review Report suggests an uptick in GTA real estate activity in the second half of the year when we’ll see an increase in sales activity, heightened competition among buyers, and renewed upward pressure on home prices.

“We start the year more or less where we were through the fall and winter of 2022, but I anticipate that, as we move into the second half of the year — and that can include part of the spring market — that we’ll start to see a greater number of would-be homebuyers moving off the sidelines,” TRREB’s chief market analyst Jason Mercer tells STOREYS. “If you think of previous interest rate cycles and even the onset of the OSFI stress test a few years ago, it takes about a year or a year and a half for a change in the interest rate environment to have its full impact on the market. People have to pull back and think about how they’ll mitigate the impact of higher borrowing costs. They may look at a different priced house or in a different part of the GTA, but — after a year — people have made that decision.”

So, Mercer says they’ll move back into the marketplace — albeit with a potential re-evaluation of expectations. “All of the other preconditions for housing demand are in place,” highlights Mercer. “We have an extremely tight market and we’re seeing the population grow at a record pace — people require a place to live.”

With that said, there’s no denying that this spring’s real estate market will look different than it has in recent years, especially in the wake of the GTA’s red-hot and record-smashing run that began not long after the term “social distancing” became a common one in our collective vocabularies.
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