Housing costs are finally cooling down in Canada, with small drops in interest rates and home prices. The average home price in July 2024 (per the Canadian Real Estate Association and WOWA Leads) was $667,000, which was actually down 0.2% year over year.
While national home prices have leveled out this year, Canadians still face obstacles to accessing affordable housing and homeownership. According to the Canadian Mortgage and Housing Corporation (CMHC), Canada is expected to face a housing shortage of 3.5 million units by 2030.
While housing shortages are a national concern, the severity and impact of limited housing supply will vary depending on where you live. Rising populations and economic growth can increase demand (and competition) for affordable housing, and housing supplies often aren’t keeping up.
5 Canadian Cities Facing Major Housing Shortfalls
We analyzed the 20 most populous Canadian cities (according to census data) to determine which ones are currently facing the most acute housing shortages. To do so, we analyzed and ranked all 20 cities based on:
- Population growth from the 2016 to 2021 census counts
- Sales to new listings ratio
- Home price changes from July 2023 to July 2024
By comparing the cities on the above data, we were able to identify the 5 major cities currently facing the worst housing shortages in Canada.
Here’s a closer look at the top 5 cities facing a shortage in affordable housing.
Sherbrooke stands out as having the highest increase in home prices from 2023 to 2024, growing 20.8% to the current average of $476,000. This jump in housing prices is a sign of a housing shortage. The high 71% rate of sales compared to new listings also shows that demand for housing is high compared to supply, which is a sign that the Sherbrook housing market currently favors sellers.
Sherbrooke could still be a decent option for residents seeking affordable housing; its $476,000 average home price was the fifth-lowest among the cities ranked. Its population increase was also pretty average among the ranked cities, which can make it easier to stay ahead of housing demand.
Halifax has experienced historic population growth in recent years. On top of the 9.1% population growth from 2016 to 2021, Halifax’s population grew another 4% in 2023 alone to its current estimated 492,000 residents, thanks in part to high international migration.
This historic growth has kept the housing market hot, with the 88% SNLR the highest of the cities we surveyed. High sales relative to new listings show that homes are selling quickly, and Halifax’s housing market is expected to remain a seller’s market through the end of 2024, per RE/MAX. Housing prices are leveling out. However, the average home price increased just 0.5% year-over-year to $572,000 in July 2024.
With a boom in economic growth, Alberta’s population is also on the rise — including in Edmonton. Not only did this city’s population grow 7.3% from 2016 to 2021, more than 100,000 people moved to Edmonton from 2021 to 2023, another population increase of around 10%. Many residents moved to Edmonton, attracted by the city’s relatively affordable housing in the higher-paying job market. Edmonton is projected to see another 100,000 new residents by 2027.
The city’s housing prices are rising quickly, too, up 7.4% from 2023 to $440,000 average home price in July 2024. Edmonton’s 79% SNLR also indicates a housing market that favors sellers.
Like Edmonton, Saskatoon’s living costs are among some of the most affordable in the nation; the $402,000 average home price in July 2024 is the second-lowest among the cities we surveyed.
But housing may not stay affordable in Saskatoon for long. Just check the 10% increase in home prices in 2024 compared to July 2023, the third-highest of the cities surveyed.
Calgary’s home prices are up 12.5% in the past year to the July 2024 average of $607,000, the second-highest pricing increase among cities surveyed. It also has a seller’s housing market, with a 66% sales-to-new-listings ratio.
Additionally, Calgary’s population grew an impressive 10% in just 5 years (from 2016 to 2021) and continues growing — meaning the city’s already-limited housing inventory is likely to continue lagging behind housing demand in 2024 and beyond.
Top 5 Cities Where Housing Inventory Is Easing
In the face of a housing affordability crisis, Ontario set a goal to build 1.5 million homes by 2031, and is providing extra funding to cities that meet annual targets to work toward this goal. The province reached 99% of its 2023 target, adding 109,011 new homes compared to a goal of building 110,000 new homes.Even with these efforts by Ontario, Toronto’s housing market is still facing challenges. The easing of housing shortages is due in large part to slowing demand, particularly for condos. This can be seen in the 33% sales-to-new-listings ratio, the lowest of all cities surveyed. This slowing demand is due to tightening economic factors, such as rising inflation and interest rates.
That’s a sign that the increase of supply and slowing of prices isn’t a result of housing supply meeting the local need for housing, but rather a lack of access to affordable housing. While the average home price fell 5% in the past year, it’s still above six figures, at $1,097,000.
Just 60 miles southwest of Toronto, Hamilton’s housing market faces similar challenges. Local prices fell 7.2% from August 2023 to August 2024, the largest price decrease among the cities surveyed. Homes are more affordable in this city than in Toronto, too, with the average home price at $786,000.
Home prices also fell in Hamilton from the $976,000 high in 2022. With home prices down, more homeowners are staying put in hopes of hitting those highs again before selling their homes. As a result, home sales have fallen to a sales-to-new-listing rate of 40%, which is a sign of a balanced market.
Another Ontario city, Windsor’s 40% SNLR signals a balanced, leaning in favor of buyers, housing market. Home sales have slowed down, as Windsor is coming off of a home sale boom during the peak of the COVID-19 pandemic.
While prices are stabilizing, fewer buyers and more inventory is a sign that Winsdsor market is more balanced. The average home price in the Windsor-Essex area is $595,000, down 2.2% from July 2023 to July 2024 per CREA.
Located on the Pacific coast, Vancouver has the highest average home price of any city we surveyed — at $1,281,000 as of July 2024. That’s nearly twice the national average of $667,000 in Canada.
This is an increase of just 1% from July 2023, and home prices are expected to stay steady through the end of the year. Home listings rose over the summer, too, while sales stayed steady, creating a balanced market that somewhat favors buyers per Vancouver’s 42% SNLR. But considering Vancouver’s population grew 7.3% from 2016 to 2021, slowing home sales could be a sign of limited affordability due to high housing costs and interest rates.
Also, on the Pacific Coast, the Victoria housing market is balanced and prices are fairly stable. They dropped 1.1% from July 2023 to the July 2024 average home price of $883,000.
Victoria is another city that saw a housing boom in 2021 and 2022, before high interest rates slowed sales in 2023 to now. Sales have slowed as the housing market stabilizes after 5 years of disruption, per Victoria Now. While housing demand is currently easing, Victoria’s population growth is likely to keep housing demand high, and there is a continued need to construct new housing to keep prices affordable.
Full Rankings and Methodology
We ranked the top 20 most populous Canadian metropolitan areas on key indicators of housing shortages and limited supply relative to demand. We rated each city and gave it a weighted score based on these factors:
- 40 points – Population growth from the 2016 to 2021 census counts. Cities with higher rates of population growth will have more demand for housing, often outpacing new or current housing availability.
- 30 points – Sales to new listings ratio, for July 2024 from WAWO. A high number of sales-to-new-listings ratio (SNLR) indicates a market with high demand, relative to supply. A SNLR below 40% indicates a buyers’ market, 40-60% indicates a balanced market, and 60% or higher is a sign of a seller’s market. For cities without a local SLNR reported, the province’s SNLR was substituted.
- 30 points – Home price changes WAWO and CREA July 2023 to July 2024. Rapid rises in home prices indicate an increase of demand for housing and limited supply.
