Your Questions About New Construction and Canada’s Roaring Market Answered

The real estate market in Canada right now is hot, and as new construction struggles to keep up with the demand for housing, many people are having a difficult time finding the perfect place to live. If the thought of where new construction for homes in the country is heading and what the real estate market will look like here in a few years has crossed your mind, here are a few key questions and answers that might help.

Do rent controls impact the availability of affordable housing?

Earlier this year, the Ontario government expanded controls to protect tenants from major rent increases. Although this is designed as a protection for renters, it dissuades new construction for rental units. For this reason, more and more builders want to invest in single-family homes and other buildings designed for ownership.

What will it take for the Canadian market to correct itself?

Many Canadians are concerned that as they’re taking on new construction mortgages, they won’t be able to handle it if interest rates rise. Although interest rates do impact housing prices in the area, many other factors impact the cost of living in Canada. While there’s no way to know in advance what will trigger a housing market correction, everything from large-scale unemployment to a foreign buyers’ tax, like the one recently implemented in Vancouver, can change things.

Are incentives to move into smaller markets the solution?

To lessen the demand for housing, new construction can increase heavily or buyers can be encouraged to move into smaller markets. Although these incentives sound like a good idea in theory, the reality is that people are attracted to bustling areas for their job opportunities. Plus, homeownership should be a long-term commitment, and incentives are only a short-term solution.