Multiple demographic trends gobbled up housing supply
Housing inventories in major Canadian markets have been on a downward trend over the past decade despite softer overall activity levels, according to RE/MAX Canada.
Inventory levels ended up being lower than the 10-year average in multiple major markets in 2022, with double-digit declines observed in Halifax-Dartmouth (65.5% below its 10-year average), Ottawa (down by 42%), Montreal (down by 40%), Calgary (down by 26%), Winnipeg (down by 23%), and Greater Vancouver (down by 16%).
“The housing inventory shortage was less-pronounced in the Greater Toronto Area, where it was down almost 7% from the 10-year average,” RE/MAX said in its latest report. “Hamilton-Burlington was the only market to buck the trend, reporting a nominal 3.2% increase over the 10-year average.”
“Supply was far more robust in the early 2000s in centres such as Greater Vancouver, the Greater Toronto Area and Hamilton-Burlington,” said Christopher Alexander, president of RE/MAX Canada. “That stability lent itself to healthy sales and price appreciation year-over-year and provided an anchor for the Canadian housing market during the Great Recession.”
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Alexander pointed to multiple demographic trends that ate up this housing supply in the interim – in particular, the double-digit increases in population between 2006 and 2021.
“Population growth and household formation have played a significant role in depleting inventory levels from coast to coast over the most recent decade, triggering chronic housing shortages in large urban centres that resulted in mini ‘boom’ and ‘bust’ cycles,” Alexander said.
“If we don’t move now to build more housing in the current lull, it’s expected that this same scenario will continue to resurface over and over again.”
