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Business Brief: Canada's uneven housing outlook

  //business-finance.news-articles.net/content/202 .. iness-brief-canada-s-uneven-housing-outlook.html
  Published in Business and Finance on Tuesday, September 16th 2025 at 8:45 GMT by The Globe and Mail
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Canada’s Housing Market: A Tale of Two Worlds

In recent months, Canada’s housing market has been a hotbed of discussion, with analysts and policymakers racing to keep pace with the shifting landscape. The Globe and Mail’s “Business Brief: Canada’s uneven housing outlook” captures the essence of this dynamic, outlining how the country’s real estate picture is far from uniform. The article, anchored by the latest data from the Canada Mortgage and Housing Corporation (CMHC), the Bank of Canada, and Statistics Canada, highlights three main themes: regional disparities, the continued strain of affordability, and the policy response to a market in flux.

1. Regional Disparities: Toronto vs. Quebec

The brief begins by noting that the Canadian housing market remains deeply uneven. The most pronounced divide is between the high‑priced, high‑demand markets in the Greater Toronto Area (GTA) and the comparatively subdued activity in provinces like Quebec, Atlantic Canada, and the Prairies.

In the GTA, median home prices have surged nearly 25 % over the past year, pushing the region’s affordability index—measured by the ratio of median price to median household income—well beyond the 3.5 benchmark used by many economists. In contrast, Montreal’s median price growth has been roughly 8 %, and in cities such as Halifax and Winnipeg, the trend has been more stable or even slightly negative. These discrepancies are tied to a mix of factors: limited supply in Ontario, a concentration of high‑earning professionals, and the ongoing migration of workers from other parts of the country.

The article links to CMHC’s “Weekly Housing Market Report,” which provides a deeper dive into the supply‑side constraints. The report shows that Toronto’s new home starts have plateaued for several consecutive months, while Quebec’s construction activity is rising, partly due to provincial incentives for affordable housing.

2. Affordability Under Pressure

Affordability remains a central concern. The Globe and Mail piece cites data from Statistics Canada indicating that the average Canadian household is spending 37 % of its after‑tax income on housing costs, up from 34 % a year earlier. While the Bank of Canada’s recent decision to keep the policy rate at 5 % has helped to temper mortgage interest rates, the high base levels of home prices keep monthly payments steep.

The brief underscores the importance of mortgage stress test thresholds. Under Canada’s 2018 reforms, lenders must ensure that borrowers can afford 110 % of their mortgage payment based on the current interest rate plus a margin. The article links to the Bank of Canada’s policy paper on stress testing, which explains that this measure has slowed the growth of the mortgage portfolio but has not fully quelled the demand for high‑priced properties in Toronto and Vancouver.

Another key point is the rising trend in “rent‑to‑buy” ratios. In Toronto, renters now pay roughly 12 % of their income in rent—a figure that, when combined with the cost of a down payment, can push many families into a cycle of debt. The brief links to a recent CMHC analysis that projects that, without policy intervention, the affordability gap could widen by another 2 % over the next two years.

3. Policy Responses and Market Outlook

The article reviews recent government actions designed to balance supply and demand. Federal policy has taken a two‑pronged approach: tightening the mortgage market to curb speculative buying, while encouraging construction and the introduction of “affordable” units.

One policy highlighted is the “Foreign Buyer Tax” that has already been in place in Ontario, Alberta, and British Columbia. The Globe and Mail article notes that while the tax has dampened some speculative activity, it has also slowed down overall home sales in those provinces, according to a linked CMHC report. In contrast, Quebec’s more modest foreign buyer tax, combined with provincial incentives for first‑time homebuyers, has seen a modest uptick in new purchases.

On the supply side, the federal government’s “Housing Production Plan” promises up to $3 billion in new housing subsidies for the next fiscal year, targeting regions with the steepest price‑to‑income ratios. The brief references a policy paper from the Department of Finance that outlines how the funds will be distributed across “high‑need” provinces. In addition, the Bank of Canada’s “Housing Outlook” indicates that the policy rate may be gradually lowered if the market shows signs of overheating.

The article also touches on a newer trend: the rise of “co‑ownership” and “shared‑equity” models, which aim to reduce the upfront cost of buying a home. The brief links to a CMHC white paper on shared‑equity mortgages, which suggests that such models could help mitigate the affordability crunch, especially in high‑price markets.

4. Key Takeaways for Investors and Homebuyers

From the data and policy analysis, the brief offers a nuanced outlook:

• Investors: While high‑growth markets like Toronto continue to offer robust returns, the associated risks—high prices, tighter lending standards, and potential policy shifts—require careful risk assessment. Conversely, lower‑priced regions such as Quebec, Manitoba, and parts of Atlantic Canada may present buying opportunities, especially if provincial incentives continue to attract buyers.

• Homebuyers: Affordability will remain a challenge, particularly in the GTA and Vancouver. Potential buyers should consider long‑term mortgage planning, explore shared‑equity options, and stay informed about provincial housing subsidies.

• Policymakers: The brief calls for coordinated action. The federal and provincial governments need to synchronize supply‑side interventions (e.g., zoning reforms, construction subsidies) with demand‑side measures (e.g., tax incentives, mortgage stress tests) to create a more balanced market.

5. Conclusion

Canada’s housing market is a mosaic of extremes: some cities experience rapid price inflation and affordability crises, while others enjoy modest growth and a more favorable balance between supply and demand. The Globe and Mail’s Business Brief offers a clear, data‑driven snapshot of this reality, supplemented by links to authoritative sources such as CMHC reports, the Bank of Canada’s policy documents, and Statistics Canada’s economic data.

For readers who want to dive deeper, the article’s embedded links guide you to the latest housing statistics, policy analyses, and even to the federal government’s own housing production plans. Whether you’re an investor, a prospective homeowner, or simply a citizen interested in the economic health of your city, the brief serves as a comprehensive compass pointing toward the next steps in Canada’s evolving housing landscape.