Canada’s rapid population growth is slowing, which could significantly impact the country’s housing market. According to the latest data, the population grew by 0.7% in the second quarter of 2024, down from the 1.2% growth seen earlier in the year. Much of the growth was driven by immigration, but rising costs of living and a slowing economy are making Canada a less attractive destination for newcomers. Experts believe that this slowdown in population growth could ease some of the pressure on the housing market, especially in cities like Toronto, where affordability has been a major concern.
In Toronto, the demand for new homes is plummeting. Recent reports show that sales for new homes in the Greater Toronto Area have dropped sharply in the past year, as high interest rates and inflationary pressures are forcing many potential buyers to wait. The significant drop in demand is not only affecting homebuilders, but also the city’s overall housing market, which has been booming for years. Builders are responding by cutting back on new projects, which could lead to a prolonged slowdown in the sector.
This combination of slower population growth and falling demand for new homes raises concerns about the future of Canada’s housing market. With fewer immigrants arriving and fewer buyers in the market, the once-red-hot real estate sector is starting to cool off. Some industry insiders warn that this trend could lead to an oversupply of homes, particularly in Toronto, where developers have been building aggressively in anticipation of continued demand.
While some may see this as a welcome break from skyrocketing home prices, others worry about the long-term effects on the economy. Housing has been a major driver of Canada’s growth in recent years, and a slowdown could ripple through other sectors. For now, all eyes are on how the market responds to these changing dynamics, as both buyers and sellers navigate an uncertain future.
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