Are We Making Things Worse?

One narrative that we are seeing is that the supply of homes is improving as buyer demand sits on the sidelines, which could make homes less expensive in the long run.  Benjamin Tal mused that housing could even become more expensive because of the cost of construction.  

“The significant and rapid increase in interest rates, along with surging construction costs and a lack of available labour make projects that only yesterday looked promising, totally uneconomical. In fact, we might be in the process of making the situation worse,” Tal wrote.

Instead of greater affordability, the opposite could be happening.  

As building becomes more expensive, more builders are pulling out of projects or putting plans on the backburner.  This will add more stress to the real estate market when buyers inevitably return.  With more people coming to Canada every year, the cost of buying a home in Toronto will increase and the current scenario might be adding gas to the fire.