Canada’s housing market faces a paradox that should concern GTA residents: while current prices are softening due to weak demand, economists warn that today’s construction slowdown could trigger a severe affordability crisis within five to eight years.
At the recent Mortgage Professionals Canada conference, Mathieu Laberge, chief economist at Canada Mortgage and Housing Corporation (CMHC), delivered a stark warning: construction is slowing faster than the underlying need for housing. His concern? Pent-up demand from young adults living with parents, home-sharers, newcomers, and families delaying moves will eventually re-enter the market—potentially all at once.
The core problem extends beyond supply volume. Canada is building the wrong types of homes. Toronto and Vancouver have been dominated by condominium construction, creating a surplus of smaller, unaffordable units while family-sized homes remain scarce. “What’s small is unaffordable and what’s large is unavailable,” Laberge noted.
With only six major residential builders operating in Canada and the construction industry facing a shortage of more than one million workers, reversing this trend will take years—time the market may not have once confidence returns.
For GTA readers: This analysis has direct implications for your market, where condo oversupply and family home scarcity already define the landscape. Understanding this cycle helps buyers and investors anticipate long-term affordability trends.
Read the full article on MPA Magazine
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