Canada is a great place to live. It’s one of the most developed countries in the world, and its citizens enjoy a high standard of living. Additionally, Canada has a lot of natural beauty, and its cities are clean and safe.
Many people now live in apartments or condos, and the demand for these types of housing is high. However, some concerns come with building homes in Canada. Here, we’ll discuss some of these issues.
Shortage of Labor and Material
The Canadian government aimed to build 400,000 homes a year over the next decade. However, this target might not be achievable due to the current shortage of labor and material in the construction industry. Currently, around 286,000 new homes are being built each year, so the construction industry would need to increase its output by 40% to meet the government’s target.
This would be a daunting task, as the construction industry is already facing a shortage of workers. The lack of skilled labor is one of the main concerns with building homes in Canada.
High Cost of Living
Another concern with building homes in Canada is the high cost of living. The cost of buying a home in Canada has been rising for years, and it is now out of reach for many people. For example, the average price of a detached home in Toronto is over $1 million. In Vancouver, the average price is even higher, at $1.5 million.
The high cost of living is due to several factors, including the high demand for housing and the limited land supply. Some experts believe that building more homes is the only way to make housing more affordable. However, this is not an easy task, as discussed above.
Rising interest rates also make it more difficult for people to buy homes. The Bank of Canada has raised interest rates four times since July 2017, and more increases are expected in the coming years. This will make it even harder for people to afford a home, leading to more defaults and foreclosures.
The Cost of Construction
The cost of construction in Canada is also a concern, due to the high cost of materials, labor, and land. According to this chart from a Compare the Market Home Loans survey, approximately 34.2% of Canadians opt against buying or building a home due to the unaffordable prices. The rising construction costs could lead to a decrease in the number of homes being built. This would further exacerbate the housing shortage and make it even more difficult for people to find affordable homes.
The Length of the Construction Process
Home construction can be a long and drawn-out process. Canadian housing stats show that it can take months, or even years, to build a home. This is due to the lengthy approval process, which can involve different levels of government. In Ontario, for example, it can take up to six years to get all the necessary approvals. However, Doug Ford, the current premier of Ontario, has urged the municipality to streamline the process.
Is There a Possibility of a Housing Market Crash in Canada?
There is no easy answer to this question. While the concerns discussed above could lead to a decrease in home construction, it is difficult to predict whether this will happen. The demand for housing is high, and builders are still constructing new homes. However, if the concerns with building homes in Canada continue, the housing market could crash. This would be disastrous for the economy, as housing is a significant growth driver.
Canada is a great residential choice for many reasons, but some concerns come with it. Before you build a home in Canada, you need to be aware of these concerns and decide if they are something you are willing to deal with.