Canada Could Be On The Verge Of A Major Housing Crisis
Troubling new data suggests the worst is yet to come.
Canada is, for the most part, in a prime economic position.
With close associations to both the American and European markets, but distinct enough to maintain its own strength, the Canadian economy is able to benefit from its partners while remaining insulated from their downturns.
TL;DR The rate of housing construction is unable to keep up with that of population growth. Housing prices may skyrocket as a result.
That's why Canada fared better that the United States during and after the 2008 global financial crisis.
However, the next housing crisis may be entirely of Canada's own making.
Today, Statistics Canada released revised population estimates for the coming years. Results show that the country is far exceeding previous expectations and defying international trends.
According to the news release, "Canada's population increased by over half a million" in a single year and boasted the highest growth rate in nearly thirty years.
Moreover, "Canada's population growth is the highest among G7 countries."
While Canadians should be proud of this ongoing population spike, which is mostly due to immigration, it may also portend a housing disaster.
According to housing estimates from Statistics Canada, the national rate of construction will be unable to keep pace with such population growth.
As the population increases by about 500,000 individuals per year, optimistically, only about 200,000 housing are completed in the same period.
The luxury housing boom in major Canadian cities accounts for many of those units, placing them well outside the reach of most residents of Canada.
Already, Vancouver, Toronto, and even Montreal are experiencing skyrocketing housing prices thanks to both luxury development and a supply that is unable to meet demand.
Canada's rapid population growth will only exacerbate that problem.
If the federal and provincial governments are unable to incentivize more affordable housing development, Canada could be headed for a major housing crisis.
Canadians should brace for skyrocketing housing prices.