What is Canada's real estate market like?
Answer
Highly valued with rising prices in major cities, often a major investment for Canadian families.
Explanation
The Canadian real estate market is highly valued by international standards, with average home prices among the most expensive in the world relative to household income. The Canadian Real Estate Association reported an average national resale home price of about $696,000 in early 2024, with significant regional variation: Greater Toronto and Greater Vancouver averages exceed $1 million, while prices in Atlantic Canada and the prairie cities remain considerably lower.
Real estate has become a major source of household wealth and a focus of federal policy. About 67 per cent of Canadian households own their homes. Mortgage debt is regulated through the federal Bank Act, the Office of the Superintendent of Financial Institutions Guideline B-20 stress-test requirements (introduced 2018), and the Canada Mortgage and Housing Corporation (CMHC, founded 1946) which insures high-ratio mortgages and operates the federal housing system.
Recent federal policy targeted housing affordability. The Prohibition on the Purchase of Residential Property by Non-Canadians Act took effect on January 1, 2023 and was extended to 2027, banning most foreign buyers from acquiring Canadian residential property. The Underused Housing Tax, a 1 per cent annual federal tax on vacant or underused housing owned by non-residents, took effect January 1, 2022. The Housing Accelerator Fund of $4 billion (2023) incentivises municipalities to allow more density. The federal Housing Plan of April 2024 commits to 3.87 million new homes by 2031.
Canada's housing supply has not kept pace with population growth. The CMHC estimates Canada needs about 3.5 million additional housing units by 2030 to restore affordability. Provincial governments control most land-use planning, and Ontario's Greenbelt protections, British Columbia's Agricultural Land Reserve, and zoning rules in major cities all shape supply. The federal Housing Action Plan, the GST elimination on rental construction (2023), and the Apartment Construction Loan Program ($55 billion, 2024) all target purpose-built rental supply.
Why this matters for your test
Housing affordability is a defining political issue and shapes where new Canadians can settle. Recognising the 2023 foreign-buyer ban and the federal target of 3. 87 million new homes by 2031 anchors the answer.
Source: Discover Canada: The Rights and Responsibilities of Citizenship
