Crickets for Condo Sales

No surprise—Canada’s housing market is struggling, with economic uncertainty, low productivity, and stagnant housing starts painting a bleak picture.

Yes, construction costs are up, so the federal government is cutting GST for first-time buyers: it’s eliminated on new homes up to $1M and reduced for homes between $1M and $1.5M.

These conditions have created fertile ground for the most vulnerable housing market in Canada—Toronto, aka the 6ix. In a landscape of uninspired high-rises that stretch on for eternity, it may come as a shock that most of them now sit vacant.

They’re owned not by residents, but by shell companies in foreign lands and anonymous investors. When housing shifts from a place to live into a financial instrument, you get a series of unfortunate ironies. The biggest—and perhaps saddest—is the ratio of first-time home buyers priced out of the market versus the available supply.

There’s clearly demand from people who want a home not as an appreciating asset, but for the self-respect, dignity, and potential for family formation that homeownership can offer. But that demand isn’t strong enough to overcome the current market conditions. Turns out, there isn’t a lineup of people eager to drop $1M on a 500 sq ft condo in the GTA.

The result, investors foot the bill while potential buyers continue to rent. Reality is stranger than fiction.