-
CMHC economist says the Alberta capital may need to build even more to account for people moving
Canada’s two most expensive cities for housing are not building enough new homes, and that is driving people to Edmonton, according to the deputy chief economist of Canada Mortgage and Housing Corp.
Aled ab Iorwerth said data already shows an influx of people moving from Vancouver and Toronto to the Alberta capital, and it’s only going to get worse if more supply isn’t created in the two cities that regularly clock in as Canada’s priciest.
“It’s already happening,” said ab Iorwerth, in an interview with the Financial Post following a presentation at the Veritas Great Canadian Real Estate Conference this week.
CMHC said the Toronto region had a housing stock of approximately 2.5 million homes in the third quarter of 2024, but would need just over three million homes by the fourth quarter of 2035 to maintain current affordability levels. Vancouver’s stock of 1.1 million homes would need to rise by 24 per cent during that period just to keep pace with the current population, without even attacking affordability.
“Edmonton and Calgary are relatively more affordable, and if Vancouver doesn’t increase its housing supply, people will move,” said Iorwerth.
The average sale prices in the Toronto region fell about four per cent in September from a year ago but still checked in at $1,077,602 last month, according to the local real estate board. Vancouver is still the country’s most expensive city with a benchmark price of $1,142,100 in September, down 3.2 per cent from a year ago.
In Alberta’s capital, the average sale price was up 2.8 per cent from a year ago but still only $452,849.
Even in more affordable cities such as Montreal, where the median price for an existing home was up seven per cent in September from a year ago but still only $632,500, the economist predicts that the lack of new construction will drive people out.
“You have a challenge even with Quebec that if Montreal doesn’t increase its housing supply, people will move to places like Trois-Rivières and Quebec City,” said ab Iorwerth. “It’s concerning because my view is people should be moving to where there are the job opportunities and where there are better careers. They should not be basing decisions where they live on housing costs.”
In Vancouver and Toronto, the economist noted that the regulatory burden, including issues such as approval delays and land use reviews, is high enough to create challenges for construction.
“On top of that, development fees are quite high,” the economist said.
A study from CMHC found Toronto led the country in development charges, while Vancouver was second.
Government charges can account for more than 20 per cent of the construction costs of a dwelling unit in some major Canadian cities. In the country’s largest city, the Crown Corp. has said prices could be up to 24 per cent lower without the fees.
The economist noted that affordability challenges exist across the country and can be alleviated with more supply across Canada.
“If we want to reset the affordability in Toronto and Vancouver, we need dramatically more housing supply,” he said during his presentation. “People are starting to move because of house prices. Edmonton does not need to build more housing than it plans to build, but if Vancouver and Toronto don’t get their act together, Edmonton will have to build a lot more housing because people will leave Toronto and Vancouver.”
ab Iorwerth also said the job market could become a pressing issue for Canadians with housing debt, and stressed that CMHC is closely watching the two million mortgages being refinanced in the next two years
“This is because everybody was taking five-year mortgages in 2020 and 2021, and they are now coming up for renewal, and they will obviously be at higher rates,” he said. “There is one silver lining, that the interest rates are lower than a year ago.”
17-10-2025 -
A new report going before Metro Vancouver's mayors committee Friday offers a very mixed outlook on how the region is faring in terms of meeting its housing objectives
A new Metro Vancouver report offers a mixed outlook — from hopeful to bleak — on how the region is faring in its housing objectives.
While construction of purpose-built rentals is at an “historic high,” most units are being rented out at market or premium rates, “leaving affordability gaps.”
While all levels of government have taken meaningful steps to increase housing supply, the condo market has cooled and some segments of the market have slowed substantially, resulting in stalled projects. High construction costs and “permitting volatility” are some of the reasons cited.
“Senior governments have introduced major measures to influence housing demand and supply, which have had implications for municipal decision-making and financial capacity,” the report states. “These changes have created both opportunities and challenges across the region, including shifting development patterns, increased financial pressures and complex implementation requirements.”
Here’s what the report found:
A surge in rental developments
There has been a shift to building dedicated rental units, which are supported by provincial incentives, density bonuses and federal financing programs.
“While this has added thousands of new units, most are at market or premium rents, leaving affordability gaps,” the report states, adding that rents are on a “slow but steady downward trend” as supply starts to increase.
Earlier this week, the federal government announced a $763 million low-interest loan to help developer Grosvenor finance construction of about 1,300 rental units in two rental towers in Burnaby’s Brentwood area.
To qualify for this loan, at least 20 per cent of these 1,300 units must have rents at or below 30 per cent of the median total income of all families in the area for 10 years.
If you divide the size of the federal loan by the number of units, it yields a back-of-the-envelope estimate for the cost of building each unit at about $587,000. But if you factor in land and other fees, the cost is likely much higher and closer to $700,000, says Rick Illich, chair of the Urban Development Institute, which represents developers and builders, and founder of Vancouver-based developer Townline.
“It’s a very big commitment by the developer,” said Illich, referring also to the time it will take to recoup costs through collecting rental payments.
“The whole issue around affordability is pretty simple to articulate and pretty difficult to solve. Incomes have not kept up with the cost of housing. When you look at what you can do to either increase incomes … or to reduce the cost of producing housing, the only way to do that is through policy change.”
He said as various levels of government layer more requirements for developers, such as new building codes for energy efficiency and reducing carbon footprints, there are higher costs and the result is mostly market or luxury rental.
He argues there needs to be consideration by governments to prioritize building more modest rental units.
Highrise condo market slowdown
The staff report describes Metro Vancouver’s condo market as “experiencing a pronounced slowdown.”
Unsold inventory is projected to rise by 60 per cent by the end of 2025, reaching its highest level in years, due to sluggish presales, higher borrowing costs and reduced foreign investment following the federal ban on non-resident purchases, which has been extended to 2027.
“Some developers are converting condo projects to rental to maintain viability,” the report states. “Interest rates are coming down, which may have some positive effects on project viability.”
Challenging market conditions
The cost of building residential housing and infrastructure continues to be high due to labour shortages, volatility in prices and changing regulatory requirements.
Construction costs, which make up between 48 per cent to 73 per cent of total costs, have increased 58 per cent from the second quarter of 2018 to the same period in 2025.
Land costs are the second biggest driver of overall costs that are impacting the viability of projects.
The volume of building and permitting is in line with overall trends, but there has been a lot of volatility in the number of housing starts in the last three years. Numbers have fluctuated significantly as developers face financing challenges because of high interest rates, rising costs and reduced demand, the report states. Some are delaying and cancelling projects as it has become harder to meet thresholds for the number of units that have to be pre-sold in order to qualify for construction loans.
Community amenities taking a setback
Many municipalities, the report notes, are on track to meet or exceed housing targets.
However, a weakening condo market will also impact the ability of municipalities to capture public benefits through so-called amenity cost charges — contributions from developers to pay for things like daycares and libraries.
A weakening market “means municipalities face pressure to relax or eliminate amenity contributions, bonus contributions, inclusionary housing requirements or other policies to support project viability, particularly for highrise developments where margins are tightening,” the report states.
And as municipalities enact legislative changes to mandate minimum densities, that could lead to “new and previously unanticipated growth patterns, with implications for infrastructure and growth.”
[email protected]
© 2025 Vancouver Sun
17-10-2025 -
CREA said the monthly decline was the result of lower sales activity in Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal
The number of homes sold nationally dropped by 1.7 per cent in September compared to August, the first month-over-month decline since March, according to the Canadian Real Estate Association (CREA)’s monthly data released on Oct. 16.
CREA said the monthly decline was the result of lower sales activity in Greater Vancouver, Calgary, Edmonton, Ottawa and Montreal, which more than offset gains in the Greater Toronto Area and Winnipeg.
In an interview, CREA’s senior economist, Shaun Cathcart, said that September’s home sales were still “relatively unchanged” and “sort of similar” to August’s numbers.
“It’s not a trend yet, maybe a bit of a bump in the road,” he said.
Cathcart said there may be a lag in the impact of September’s mid-month interest rate cut on homebuyers, which could instead cause more activity in October.
He added that this was the case last year, when October was the surprise month for homebuying activity and the market sprang to life.
Similarly, Desjardins economist Kari Norman said the Bank of Canada lowering its policy rate by 25 basis points to 2.50 per cent in September had limited impact on home sales given the mid-month timing.
In a note following the release of the CREA report, Norman said she doesn’t anticipate a wave of forced home sales from mortgage renewals at higher rates, though this could vary by region.
Looking ahead, Norman expects another 25-basis-point rate cut later this month, followed by one more to support economic activity.
CREA noted that while the trend of rising sales that began earlier this year took a breather in September, the number of sales were the highest recorded for that month since 2021.
“This recovery that we’ve been waiting so long for, that we thought was going to happen this spring but got sideswiped by tariffs, really does seem to be underway now,” said Cathcart.
September’s overall supply was up 7.5 per cent from a year earlier, with 199,772 properties listed for sale at the end of the month. Cathcart said this is one of the smallest year-over-year increases in a long time.
The number of newly listed properties edged down 0.8 per cent in September compared to the previous month.
With the slightly larger decline in sales activity, the sales-to-new-listings ratio eased slightly to 50.7 per cent compared to 51.2 per cent in August.
“While there are more buyers in the market now than at almost any other point in the last four years, sales activity is still below average and well below where the long-term trend suggests it should be,” CREA chair, Valérie Paquin, said in a press release. “As such, we expect things will continue to steadily pick up going forward.”
CREA also released on Thursday an update to its resale housing forecasts for 2025 and 2026.
“It’s a situation where if sales continue to rise and supply continues to fall on a month over month basis, we could be back reporting some pretty tight market conditions by early next year,” said Cathcart.
With tariff chaos and economic uncertainty in early 2025, many home buyers returned to the sidelines, largely slowing activity in British Columbia and Ontario, while putting additional downward pressure on prices.
Although home sales activity has been on a steady upward climb since March, the long-anticipated return of buyers to the market was likely delayed and dampened, but not derailed, CREA said.
CREA’s forecast for the rest of 2025 is now lower than what was expected a year ago.
Cathcart said they had to lower the 2025 forecast a couple times given how hard markets were hit by the initial tariff shock in the first half of the year.
“The bottom line for the forecast for 2026 is that we started the year much lower than we’re going to end it, which means that the handoff into 2026 is that much stronger,” he said.
With solid upward momentum heading into next year, the 2025 forecast from a year ago is now what’s expected for 2026.
CREA projects national home sales will rebound by 7.7 per cent to 509,479 in 2026, the highest level of activity since 2021 but still well below that peak and slightly under the 10-year average.
“With three years of pent-up demand still out there and more normal interest rates finally here, the forecast continues to be for further upward momentum in home sales over the final quarter of the year and into 2026,” said Cathcart.
CREA said that while all forecasts are still subject to higher than normal levels of uncertainty, there is perhaps less need for caution now than in the first half of 2025.
Desjardins’ Norman said a greater supply of homes listed for sale combined with lower borrowing costs, more affordable home prices and rising wages and household wealth could draw sidelined buyers back, though labour market softness and trade uncertainty remain risks.
16-10-2025 -
Vancouver's sweeping rezoning of more than 4,200 properties aims to shorten the development process by a year or more. 'Less site-by-site, customized rezoning. And more standardization and predictability,' said the city's chief planner, Josh White
Vancouver city council approved sweeping zoning changes Tuesday aimed at speeding up the development of thousands of parcels of land in the Broadway and Cambie corridors.
The decision will not increase the size or number of buildings allowed in these neighbourhoods, both of which went through extensive planning processes in recent years to boost density along rapid transit lines. Instead, these reforms aim to simplify development by eliminating the need for property owners to apply for rezoning on a project-by-project basis in many cases, instead allowing them to proceed directly to a development permit application.
This could shorten the development process by a year or more, council heard Tuesday.
The changes will apply to 4,292 parcels of land along the Broadway subway line, currently under construction and expected to start running in 2027, and the Cambie corridor, where the Canada Line opened in 2009.
The size of this city-initiated rezoning is “significant” on its own, Vancouver chief planner Josh White told council Tuesday. “But I think, more importantly, it is emblematic of a sea change in how our planning system works. Less site-by-site, customized rezoning. And more standardization and predictability.
“For the applicant, the fastest rezoning is one that’s not needed at all.”
This proposal faced some fierce opposition. More than 70 people signed up to speak to council about the changes at a public hearing last month, and while some were in support, many were vehemently opposed. Council received hundreds of written submissions about the changes, with more than three-quarters opposed — including some from former senior Vancouver planning staff. A recent Vancouver Sun column by lawyer Mike Mangan argued against removing the opportunity for local residents to address council at public hearings about individual buildings proposed for their neighbourhoods.
But, in the end, the final decision didn’t prove particularly controversial at Tuesday’s council meeting, and the changes were unanimously approved. (COPE Coun. Sean Orr abstained, which counts as a vote in support.)
Within minutes of council’s decision, the local political party TEAM for a Livable Vancouver issued a news release saying its members were “appalled” that the ABC-majority council, with support of Green and OneCity councillors, “doubled down on a failed model” that they predicted would make Vancouver less livable and more expensive.
TEAM’s statement pledged that if the party forms a majority on council after next October’s municipal election, it will “rescind this sweeping proposal to reshape the city.”
In cases where a site-specific rezoning application is necessary, there would be a simplified rezoning process, the report recommends.
Construction of a tower at Broadway and Granville along the Broadway corridor on April 3, 2024. Photo by Arlen Redekop /PNG
The proposed changes include adding three zoning categories, for lowrise, midrise and highrise buildings in different locations. Lowrise is defined as apartment buildings of up to six or eight storeys of social housing; midrise would be towers up to 12 storeys; and highrises would be up to 22 storeys. Builders looking to build to the maximum heights would be required to include a non-market housing component.
Speaking after Tuesday’s meeting, ABC Vancouver Mayor Ken Sim said the decision was part of his party’s efforts to “speed up permitting processes and make it easier for homebuilders to build homes in the right areas.”
“What we do in that chamber is we look at what makes sense for the city over the next 30 years, and if it makes sense, we’re going to do it,” Sim said. “It just makes sense that there’s going to be housing built along the subway line that’s being built along Broadway … So we’re making sure that we’re not the bottleneck, that we support these homebuilders so they can get on and have an easier time building homes for the people that want to live and work in the city of Vancouver.”
With files from Joanne Lee-Young
© 2025 Vancouver Sun
07-10-2025
