Sunday Dock Read: Is it Still Worth it to Buy a Home in Today’s Market? (Spoiler, YES, it is)

When I was getting started in Real Estate, a wise relative of mine shared with me ‘God’s not making any more Land’. I suspect that was in 2005 when I first started in Commercial Real Estate and Land Development. That phrase whether your religious or not has been the slogan of land values for the 50+ years.

Is it still worth it to buy a home in today’s housing market?

Housing affordability is a pressing issue across Ontario, affecting communities of all sizes. High housing costs are impacting household buying power, hindering talent attraction and retention for businesses, and contributing to homelessness rates. To address this crisis, the Government of Ontario aims to build 1.5 million new homes by 2031, requiring collaboration between sectors and all levels of government.

In response the housing crisis in Ontario is drawing serious concerns from critics, especially regarding its potential impact on the environment. Some fear that Bill 23 may lead to more urban sprawl, adversely affecting local farms and efforts to reduce car emissions. Critics worry that the bill restricts the role of conservation authorities, like regional Rideau Valley Conservation Authorities, in the planning process, limiting their expertise in tackling long-term climate challenges.

The Ontario government’s approach to greenbelts has also raised alarm, as they allowed housing development on protected greenbelt lands, leading to concerns of biodiversity loss and habitat destruction. Moreover, at the neighborhood level, the bill’s allowance for three units on a single lot raises questions about preserving green spaces and trees, crucial for maintaining Ottawa’s tree canopy after various environmental challenges.

Overall, the impact of Bill 23 on the environment remains uncertain, and there are concerns that it may drastically alter the landscape of certain areas, potentially leading to irreversible changes.

One would certainly say that the reaction to the Bill has been mixed.

Really, it’s a function of maintaining Canada’s ever-increasing GDP. Population growth has a beneficial impact on the economy. With a larger population in Canada, there will be increased access to labor, resulting in higher productivity and greater production of goods. This surge in output, as measured by GDP, will contribute to overall economic growth in the country.

However, combine that with the fact that Canada has become a low-fertility country, with fertility rates declining steadily since 2009 and reaching a record low of 1.43 children per woman in 2021. This trend has been exacerbated by the COVID-19 pandemic, leading to the lowest number of births since 2007 and the greatest year-over-year decrease in births since 1997. Immigration, rather than fertility, has been the primary driver of Canada’s population growth.

Canada has a rich history of immigration. Canada welcomes around 300,000 new immigrants annually, making it one of the highest rates per population globally. As of 2021, over eight million immigrants with permanent residence reside in Canada, comprising approximately 21.5 percent of the total population.

We’ve supplemented the decrease in children per family with highly educated immigrants.

Over the past two decades, this country’s labor force growth rate has been steadily declining. Statistics Canada reveals that between 2016 and 2021, over 1.4 million Canadians entered the age group of 55 and older.

A recent report by Build Force Canada warns that the construction industry might face a shortage of up to 29,000 workers by 2027. To address this concern, a continuous focus on apprenticeship development in both compulsory and non-compulsory trades is crucial to ensure an adequate number of qualified tradespeople to sustain a skilled labor force overall.

According to the deputy chief economist of the Canada Mortgage and Housing Corporation (CMHC), home prices in Canada are unlikely to drop significantly further. The ongoing shortage of new homes in the country will continue to drive demand, making it challenging for first-time homebuyers to enter the market.

In the second quarter of 2023 compared to the previous year, prices remain above pre-pandemic levels. The rise in demand is expected to persist due to the limited supply of new housing construction in many parts of Canada.

My view taking in and digesting all the information above; I strongly believe the earlier you are a homeowner the better offer you long term financial goals will be. It will continue to rise for the foreseeable future and establishing that equity as fast as possible is worth the grind.

If you want to buy a home of your own and you want Mortgage Flexibility, call me to review hundreds of products. All tailored directly to your needs.