Article Categories

Canada’s Housing Market 2023

Canada’s Real Estate Market is Bouncing Back

Have you wondered about the housing market north of the US border? Is it investible and a positive environment for landlords and tenants?

Let’s take a closer and objective look at America’s closest neighbor.

Canada, with about the same population as California, saw home prices decline from the Spring 2022 record highs. Price trends for homes and rentals in the last two months suggest prices are headed back to record levels.

In Canada’s 3 major metros home price and rent prices are rocketing. With insufficient supply, a looming crisis for buyers and renters is just ahead.

Financial support payments were made to Canadians during the Covid crisis and although small businesses perished during the pandemic, homeowners and renters got through relatively unscathed. Landlords had it good with few rent defaults and steady rent paid. However, the rent controls in many cities of 1% to 3% may become too much to bear in 2023/24.  Such extreme rises in rent may encourage further restrictions on landlords.

Foreign Investment Needed

Vancouver, BC, Canada.

Vancouver, BC, Canada. Photo courtesy of Lucas Kloeppel.

There is tremendous opportunity for rental developers, builders, investors and landlords in Canada, yet the Federal Government passed a bill that prohibits foreign investors from buying real estate priced below $500,000 in Canada.

Anyone hoping to buy in Canada may find the path unaffordable and littered with fees and tax hurdles.

In the major Canadian cities, few homes are priced under $500,000, so Americans and Asians would indeed have to buy property at higher prices. Ontario and BC have extra taxes in the range of 20% to 25% on all foreign real estate transactions. This translates to more than $100,000 on a typical home. It may effectively end bids by Asians and Americans in buying apartment blocks and rental house portfolios.

Record Immigration in 2022

Record immigration into Canada actually coincides with the record jump in rent prices. Homes across Canada are well beyond Canadian’s reach and wages are not California-like. The 2022/2023 1.7 million immigration growth jump will fuel rent prices for many years, given even landed immigrants can’t buy or even afford to.

While Americans believe their country is being most inundated by immigrants, the Canadian Liberal Party has launched a controversial record, almost out-of-control draw of foreigners into the country.

Last year, the country saw a record 1.2 million people arriving, with 500,000 more expected this year. That is a 4% growth rate during a time when the housing market is already in crisis. For context, a similar immigration rate in the US would draw in 12 million per year. Surprisingly, there is little public outcry about this crisis.

At a time of strong inflation and interest rate hike reactions, the new influx is actually generating significant inflation itself as you’ll see in price charts below.

Royal Bank of Canada reported that 332,000 new rental units are needed over the next three years just to reach a vacancy rate of 3%. Only 70,000 units were built in 2022. A strong commitment to building new homes and apartments is urgently needed.

Vacancy Rates for Selected Canadian Cities

Stats above courtesy of StatsCan.


The progression of lower vacancy shows vacancies are lower than pre-pandemic levels heading into much lower rates for 2024.

An infusion of foreign investment into rental housing would help developers and builders ramp up production and encourage short term immigration of skilled construction laborers. The continuing construction shortage may reveal the government isn’t providing the types of workers which are actually needed in Canada.

In February, building permits issued across the country rose 8.6% yet capital investment increased only 1%.

Immigration with a Plan?

Kids Celebrate Canada Day.

Kids Celebrate Canada Day. Image credit: Kalleung.

The Canadian Liberal Government believes Canada needs more people however the explanations are sketchy, since many of those arriving lack necessary technical and language skills to be effective in the new digital economy.

However, the new arrivals do increase demand for multifamily and single family housing and will grow the economy.  Yet a radical change at a sensitive time along with radical tax and investment restrictions may create additional pain for landlords and renters in the years ahead.  The number of renters per household is very high, thus raising landlord’s maintenance and repair costs. And property taxes too are added to the cost side of balance sheets.

Politics at the Root of It

In Canada, housing availability is suffering the same political pressures as Australia who suffered record rises in their rent prices in April, due to students and other migrating visitors.

NIMYBism, restricted land development, high material costs, sales fees, taxes, rising mortgage rates, and now skilled labor shortages are slowing necessary single family and multifamily construction. Occupancy rates are ultrahigh, and as home prices rise quickly, more Millennials and Gen Z’s will be pushed into the rental market and likely delaying family formation.

Currently, the Bank of Canada is entirely focused on homeowner vacancy rates and home price growth. The rental market has been overlooked even as severe crisis looms.

Home Price Growth Doubling Expectations

Expectations were that sales and prices in Vancouver, Calgary, Edmonton, Toronto, Ottawa and Montreal would drop. It’s not the case this spring. What’s behind the steep rises in rents in the past few years? It’s likely immigration and migratory changes within Canada.

Canada’s top CMA’s had a record 572,000 new residents from July 2021 to July 2022 according to a StatsCan report. Most of those migrating people went to Toronto and Vancouver. Metro Vancouver and Toronto suffer a lack of developable land, which is why home prices have rocketed in the past 10 years. Of course speculators could easily see the writing on the wall that Canadian home prices will rocket further.

An inpouring of cash from China and Hong Kong investors was blamed for high property prices in Vancouver, but even after blocking Asian buyers, prices kept rising.

Sales Heating Up with Bidding Wars Too

Canadians picked up the pace in home buying in April, with Toronto leading the way. As mortgage rates have calmed, more buyers are finding the resources to buy a home. And Realtors are reporting multiple bids on homes for sale.


My colleague and I listed a house a couple of weeks ago in the Parkwood area and we were shocked we had 92 showings. We had 25 offers at offer time and this was for a house that was a fixer upper. It was not even move-in ready, so the demand out there for homes is huge.” — Davelle Morrison, a Toronto broker with Bosley Real Estate Ltd in a Global News Report.


Job growth and wage growth +(5.2%) are further supporting demand for homes and higher bids for rents. Many provinces and cities however, have rent control laws, which incentivizes landlords to sell their properties.  That takes rentals off the market adding to homelessness. Landlords gain on capital appreciation, while many are actually losing money on renting their properties. We might expect more renovictions and other actions that will make life tough for Canadian renters this year and next. See the Motley Fool for tips on investing in Canadian real estate.

As the Bank of Canada raised interest rates to control inflation after the pandemic spending, Canadians faced escalating credit debts and high cost of living. Many more live precariously on low wage jobs that simply can’t meet their everyday bills.

Calgary, Alberta. Photo by Jude Joshua.

Canadian Market: Too Much Demand to Fail

Yet most experts believe the Canadian housing market has too much demand to fail. High mortgage rates hold back the torrent of purchases that could happen. This might mean Canadian rental properties may be an excellent investment for strong capital appreciation and high rents. However, we’re not advocating buying Canadian rental property.

Nationally, home sales rose 1.4% month-over-month in March while the number of newly listed properties fell a further 5.8% month-over-month. And the national average home price was $686,371 in March 2023, 13.7% lower than the boom months of March 2022 yet are up $75,000 from January 2023.

The data is somewhat skewed by excessive demand in Toronto and Vancouver Metro areas where a good portion of Canadians live.

Toronto home sales jumped by 27% in April from March. Smaller centers across the country have seen less extreme growth.

The national turnover rate also declined, to 13.6 per cent in 2022 from 15.5 per cent in 2021 (CMHC) and the vacancy rate slipped to 109% in 2022 from 3.1% in 2021.

1 Bedroom2 Bedroom
Ranking>CityPriceMonthly Growth>Yearly GrowthPriceM/M%Y/Y%
1Vancouver, BC$2,6002.0%18.7%$3,6000.0%20.4%
2Toronto, ON$2,3700.9%23.4%$3,0000.0%22.4%
4Victoria, BC$2,000-2.9%13.0%$2,540-2.3%11.9%
5Kelowna, BC$1,900-0.5%11.1%$2,3302.6%3.1%
5Kitchener, ON$1,9000.5%22.6%$2,230-0.9%25.3%
8Hamilton, ON$1,7805.3%21.1%$2,1001.4%13.5%
9Halifax, NS$1,7601.1%23.1%$2,2500.9%20.3%
10Ottawa, ON$1,7300.6%12.3%$2,0903.0%14.8%
11London, ON$1,690-1.2%25.2%$2,100-1.4%26.5%
12Kingston, ON$1,6800.6%18.3%$2,0000.0%13.0%
14Calgary, AB$1,6500.6%38.7%$1,9201.1%38.1%
15Montreal, QC$1,5600.6%15.6%$2,0404.1%10.3%
17Abbotsford, BC$1,430-0.7%5.9%$1,6800.6%-12.5%
19Winnipeg, MB$1,1806.3%11.3%$1,4902.8%10.4%
20Quebec City, QC$1,1100.9%22.0%$1,410-2.1%13.7%
21Saskatoon, SK$1,0803.8%8.0%$1,260-0.8%10.5%
22Regina, SK$1,0700.9%15.1%$1,2904.0%17.3%
23Edmonton, AB$1,0301.0%9.6%$1,3005.7%5.7%
Canadian Rental Statistics courtesy of Zumper.

Toronto Housing Market Sees Sudden Growth in the Spring

The Toronto Regional Real Estate Board reported 7,531 sales in April 2023 (– 5.2% year over year), while new listings plunged by 38.3%. Toronto home prices fell 12.1% year over to an average $1,153,269 in April 2023 ( – 7.8% year over year when is way $1,250,704 in April 2022).

Home prices in some central Toronto neighborhoods hit nearly $4 million in years past. They districts are down within $2M to $3M on average in April. Detached and semi-detached houses typically sell for $300,000 more in the city in comparison with suburban areas (905 area code).

Zumper’s rent report for Toronto shows a median rent price of C$ 2,400 per month, which is up 20% from one year ago. 2 bedroom units have reached $3090. Only 1822 apartments are listed for rent, many of which are price out of reach for the majority of renters.

And as this graphic shows Toronto rent prices are back to pre-pandemic levels and heading higher.

Vancouver Housing Market has Strong Spring Growth

Rent prices in Vancouver average $C 2700 and are up 19% from one year ago. 2 bedroom units have reached C$3070 per month. There are only 600 apartments available meaning the occupancy rate is very high.

REBGV reports that home prices have risen 5% already this year so far, while the forecast was for 1% to 2% for all of 2023. Houses reached an average price of C$1,715,800. There were 3300 houses sold in April and there are only 3310 listings metro wide. Townhouses average C$1078400 and apartments average $C 752,300 in April.

Calgary Housing Market: Rocketing Rent Prices

In Calgary, Canada’s oil city, average rents have reach C$1770 per month and that’s a whopping 36% increase from 12 months ago. The city of 1.5 million has only 396 apartments for rent. Calgary has no rent price controls. The oil industry is expected to bounce back in the next few years, which might send rent prices very high.

According to CREB, the home benchmark price reached $550,800, up 2% higher than March and was a new monthly record high for the city.

Detached houses hit 661,900, while apartment prices hits $299,000 (+10.2% year over year). Home sales reached 2,690 homes. The most significant sales declines were in homes priced below $700,000. The city’s sales-to-new-listings ratio of 86%, inventories fell 34% compared to last year and are over 45% lower than historic averages for April.

While it seems that rental property investment in Toronto, Calgary and Vancouver might be a dream come true, rent controls, high interest rates, and random fees and restrictions can make life rough for landlord investors. However, many landlords may be under pressure to unload their poorly performing units, as inflation and taxes bite hard this year.

Call us now to discuss how easy it is to upgrade to modern Property Management Software at 415 800 1245.


Who is NAA? | Association Management | Rental Vacancy Rates | Real Estate Market |  Apartment Rentals | Property Management Accounting Software | Real Estate Accounting Software | Improve Property Accounting | Accounting Automation | Best Cities to Buy RentalsMultifamily Property Investment | Rental Housing Market Forecast

Get all the latest articles and information via email:

    Thanks for your subscription!

    You have been added to the ManageCasa mailing list.

    Sign Up FREE