The Globe and Mail just published this article about Canada's real estate markets. It's behind a paywall, but if you're able to access it, you'll find 10 housing charts. The first is called "Winners and losers," and what it shows is the percentage change in CREA's home price index since February 2022 — which, in hindsight, was the top of the market. (I don't know what the end date is for this data, though.)
The first thing you'll see is that, very broadly, there's Southern Ontario and Greater Vancouver, and then the rest of Canada. Prices have fallen materially in Canada's most expensive markets, whereas in cities like Calgary, Saskatoon, and Moncton, nominal home prices are up by double-digit percentages. There isn't just one Canadian market.
The other thing I found interesting is the title "Winners and losers," because it reminded me of the great paradox of modern housing policy. And by this I mean: which cities are winning and which are losing? If you already own a home, then winning is positive price appreciation. But if you don't already own a home and you'd like to in the future, well then, falling home prices is winning — they've just become more affordable.
Not surprisingly, it's hard solving for two opposing kinds of winning.
In the second quarter of this year, Canada saw its population grow by about 0.1% compared to the first quarter. This is not zero, but it's close to it — the slowest second-quarter growth since 1946 (excluding the pandemic in 2020).
Since World War II, Canada has generally been pro-immigration. It started as being explicitly Eurocentric, but later we adopted a point system which granted admission based on skills, education, and language ability rather than race or nationality. In other words, it became a meritocracy, and multiculturalism became policy.
This approach served the country well, fueling economic prosperity and creating Canada's only truly global city: Toronto. Immigrants are good for the economy, and Toronto is majority foreign born. They are more likely to start a business, more likely to obtain a patent, and their children tend to outperform native-born children academically.
It is also not lost on me that I wouldn't have been born in Toronto, and I wouldn't have the life that I have today if it weren't for these immigration policies.
Of course, in recent years, public opinion on immigration shifted dramatically. There was, and is, a real sense that it was too much of a good thing. Canada wasn't keeping up when it came to housing, healthcare, and overall public infrastructure. So the federal government responded, and now the expectation is that population growth in Canada should stay at or near zero until around 2028.
Because remember, Canada has one of the lowest fertility rates in the world. In 2024, it dropped to 1.25 children per woman, placing us firmly in the "ultra-low fertility" category, alongside Switzerland, Italy, Japan, Singapore, South Korea, Spain, and others. Without immigration, we shrink. And we all know what that has meant for countries like Japan, which has had periods of prolonged economic stagnation.
So sooner or later, Canada will need to get back into the business of competing for talent and welcoming the smartest and most ambitious people from around the world to our cities. This is where we want the world to be starting their new businesses. In the meantime, it also wouldn't hurt if we started having more sex and making more babies.
Looking ahead, if 2028 does end up being the year when immigration ramps back up, it will actually align with what I am predicting to be the start of a severe housing shortage — at least in cities like Toronto and Vancouver. That means we need to act now to start delivering more affordable urban housing at scale.
All through history, the success of global cities has hinged on their ability to take in a large number of immigrants and make them economically productive. It's what made cities like Toronto and New York what they are today. But in order for this to happen, people need a place to live.
Cover photo by Ankush Nath Sehgal on Unsplash
The state of Utah is trying to build 35,000 starter homes over the next five years. Last year, $300 million was allocated to something known as the Utah Homes Investment Program (UHIP). The initial idea was that these funds would be provided as low-cost deposits to financial institutions so that they could, in turn, offer low-interest loans to homebuilders who committed to building single-family starter homes.
But this didn’t go as planned. Apparently, the low-cost deposits weren’t low enough to compensate for the perceived lending risk. So Governor Cox asked if the funds could instead be directed to the Utah Housing Corporation. Enter the Condominium Construction Loan Program. The way this newly created program works is that UHC can now provide low-cost loans — up to 100% LTC — directly to developers.
However, there are some stipulations:
Warrantable projects: The projects must be warrantable to the Federal Home Loan Mortgage Corporation, meaning the property and the individual condominium units need to be eligible for conventional mortgage financing.
Owner-occupancy requirement: The individual condominium units must be sold to an owner-occupant, with a recorded deed restriction in place for a period of not less than five years. This is obviously to stop investors from buying and reselling.
Equity sharing: The equity appreciation on the condominium unit is shared between UHC and the first owner-occupant. The homeowner earns 75% of the equity appreciation (15% per full year of occupancy, through five years), with the balance going to UHC upon sale of the unit.
So it’s a trade-off: buyers get access to new homes at below-market pricing (because the developer’s cost structure is reduced), and in exchange, they give up some of the potential upside. Will it work and help Utah achieve its starter home goal by 2030? I don’t know. But it’s clear recognition that if you want to deliver below-market housing, you need to provide subsidies.