Canada’s Love Affair with Real Estate and New Realities

Canada’s Love Affair with Real Estate and New Realities

 Bill’s Blog | November 3, 2026

Let’s face it, many Canadians have become millionaires on paper who purchased homes 15 to 30 years ago or longer. In fact, if you didn’t purchase a home, you most likely would be deemed foolish by family and peers. However, there have always been pros and cons to homeownership

(I will discuss this later). Today, I share how the housing market has changed dramatically, especially over the last 15 years. Making assumptions regarding real estate will most likely have an undesired outcome. I strongly encourage you to do thorough research of your market, understand economic realities and have a long enough perspective before making major real estate decisions. As an example, the false belief, “housing prices always go up, and only have with only minor corrections.” If you are only viewing from 2010 to 2022, you would be correct, but 12 years is too short a timeframe to view real estate or any asset class. So, I hope to provide a proper perspective on real estate in Canada (whether you own or rent), and provide insights to help you make an informed decision as we close out 2026 and for the foreseeable future.

• There have been huge shifts in real estate markets in Canada the last few years: Remember 2% mortgages…gone! Remember the Central Bankers promising rates would not go up, which fueled the housing market frenzy…gone! Bidding wars, gone! Remember the rapid rise in interest rates, the fastest in Canada’s history in terms of increase in a short timeframe (2022 to 2023, from .25% to peaking at 5%). Remember the endless forecasts of the last four years by realtors, mortgage brokers, bankers, politicians, etc., “the pent-up demand argument”, sorry, it never happened! How about the endless blah, blah, blah of affordable housing by the majority of politicians and deliver the complete opposite! You cannot keep adding new unrealistic policies, regulations and permits which add to building costs, raise taxes and fees year after year and make housing more affordable. How about driving up inflation (making everything more expensive by devaluing our dollar) with massive deficits (Federal and Provincial) and expecting affordable housing? Sadly, many Canadians blindly believe this crap and reward politicians who promise the world and deliver the opposite. I recently had a chat with a friend of mine who was elected to a local city council (he is a good person with great experience). But, he said to me, “Property taxes have only risen by 24% in the last 3 years: 16% by inflation and 8% by the city council”. I shook my head figuratively, thinking, wow, what an achievement, only a 24% property tax increase. I wonder if every homeowner in the city had a 24% increase in household income? Sorry, I am being sarcastic, and we all know the answer…NO! I am only scratching the surface of this serious, multi-faceted housing crisis, and what is one to do? We will look for solutions later in the blog.
• I have painted a realistic picture of the Canadian housing markets based on extremely poor political decisions for the last 20-plus years. Housing in most markets (rent and ownership) is still very overvalued and unaffordable. Yes, there are a few pockets in Canada where an average person/family can afford a home. But, as long as the median detached house price in Canada in October 2026 is $651,400 to $657,500 (MLS national benchmark), millions of Canadians will be on the sidelines, not purchasing a home as affordability is out of reach. Thankfully, homes have come down from the peak of 2022, when the average home price was $837,499 based on the MLS benchmark. Just 11 years ago (October 2015), the median price in major Canadian metropolitan areas was $445,000. Smaller communities and cities paid significantly less for housing.
• Purchasing a home is a basic math exercise. Historically, a home should be about 30% of the household income, whether you own or rent. The official guideline by the Canada Mortgage and Housing Corporation (CMHC) was formalized decades ago; spending more than 30% of gross household income on shelter is considered unaffordable housing (the 30% should include utilities). This was set as the standard for affordable housing in any city or community in Canada. Once housing costs rise to about the 30% standard, this creates a tipping point of financial stress. If you have been feeling the financial stress for the last number of years, you are not crazy! So, what changed? Canadians in October 2026 typically spend 53% of their pre-tax household income on household ownership costs (Mortgage, property taxes, utilities), while renters frequently pay over 30% of their gross income on rent in major urban centers.
• So, what are things we can practically do to get things back on track? A great example is the recent BC election and the ousting of Premier Ebby. The last decade of NDP rule has been an utter disaster for the BC real estate markets and our economy. We are a resource-based economy, and we need resource-friendly policies to create good-paying jobs and attract capital (we had neither).
• Tens of thousands of BC families (70,000 since 2024) and individuals have left the province as the basic cost of living has become unaffordable. The NDP ran the province with anti-business policies, causing 1000’s of companies to either shut down or leave the province for more business-friendly jurisdictions. A sound economy is based on businesses being productive, profitable and providing millions of jobs to hard-working Canadians. So, thankfully, enough BC folks woke up and voted out a reckless government that was driven by horrible agendas and did not understand economics 101 or care for the citizens who put them in power. We have lost thousands of young people and professionals, and business owners who saw no future in our province, and this is both tragic and very sad. They voted with a moving truck! Hopefully we have learned an important lesson: that good leadership matters, being competent, ethical, compassionate and having leaders with real-world experience to produce good outcomes for our province’s citizens’ well-being.
• Tens of thousands of Canadian families have co-purchased a home together (a growing trend for the last decade, and I see it continuing). Young people cannot afford to get into the housing markets, and many parents or grand-parents where also being financially stressed. This has become a reality for tens of thousands of Canadians, and if you have a healthy family dynamic with everyone contributing and being respectful, this can be a good solution.
• Another solution is to actually permanently leave Canada for more affordable regions with better weather and lifestyle. According to Statistics Canada, a record 120,640 Canadian citizens and permanent residents left the country in 2025 – the highest annual record since 1952! In the first half of 2026, an additional 51,040 people permanently departed. There are several countries that have tax treaties with Canada. You will pay far less tax, the cost of living is significantly less, they offer better medical care and quality of life. This is a big decision, so make sure you do your research on all the implications of such a move.
• So if you do not want to co-own, leave the Province or country, then what do you do if you own a home? This is a very important decision and requires basic math and sound guidance. There are so many factors. If you are mortgage-free, you have options, but depending on your home, location and the local economy, you can most likely sell if desired. Depending on the real estate market and the condition of your home, it may sell fairly quickly or in some markets it will take months or longer. Many BC markets have dramatically slowed as sales and prices are declining. You will need to be realistic and flexible if you really want to sell. You will not be getting 2022 prices or even close in almost all cases. If you do decide to sell, where will you move to? Will you downsize or decide to rent? Both can be good decisions, as long as you do your homework and understand the real costs and what the change will mean to your life and finances. If you have not sold in a long time, you may be shocked at all the costs involved: realtor fees, legal fees, moving costs (expect 3% to 6% of the final sale price).
• Many Canadians are house rich and cash poor. If you fall into that category, you have options. Sell, consider a reverse mortgage or a LOC. Again, make sure you fully understand the pros and cons of each option.
• Should I purchase a home as a first-time buyer? Remember the 30% rule. It is almost impossible in BC to purchase a home currently and achieve the 30% rule unless you have very generous parents or grandparents who give you $250,000 to $500,000 as a gift for a deposit (as a note, very few families can do this). So, what is the real cost of ownership? Many people do not take into consideration the full costs of ownership. The mortgage is only one of the many real costs of ownership. There are real estate fees, land title transfer fees, legal fees, CMHC fees if you are under 20% down payment, and having to purchase all kinds of tools, lawnmowers, paint, etc. There are property taxes (ranging from 0.5% to 2.5% annual cost depending on your municipality.
• Here is a real example of cost of ownership. In Chilliwack, BC, the property tax is .0478750% or $4.78750 per $1000. So, on average, single detached homes range from $742,897 to $935,892. So let’s say your mortgage is $600,000 at 4% = $24,000 annual interest over a 25-year amortization = approximately $3168 per month. The purchase price of $850,000, so now add $4069.375 property tax. Average annual cost of repairs and upkeep on an $850,000 home = from $8500 to $25,500 per year (depending on the size of the lot and age of the home). How about home insurance? Typical home insurance in Chilliwack BC, ranges from $1400 to $2800 or $115 to $235 per month. So let’s add this up. Mortgage $3168/month + Property Tax $339.114/month + Home Insurance $160/month + Home upkeep and repairs $1200/month. So, to purchase a detached home (with the numbers above) in Chilliwack, you are looking at approximately $4867.11 /month. If you apply the 30% house rule, you would need a gross monthly income of $16,223.70 or a family income of $194,684.40. If you purchase a townhouse or condo, you must also add in the monthly strata fees. Also, one has to calculate the true interest costs over the amortization period, which in most cases = the original purchase price or more. So, if you can afford all of these costs monthly without significant financial stress, then you may want to consider purchasing. The risk for many families today is being income-strapped with all of the real cost of homeownership. You will have very little discretionary money for holidays, education, purchasing needed items, financial setbacks or savings.
• Option two, Rent: So, what are the total costs? Your monthly rent payment, utilities and tenant insurance. In addition, your rent cost will slightly rise most years. That’s it! Again, use the 30% rule to find a home that you can afford. If rent is unaffordable in your city or community, you may need to consider moving to a more affordable location. Yes, there is also the risk of the landlord selling the place. So make sure you ask the owner if he/she intends to sell anytime soon, before you move in. Lastly, make sure you understand your rights as a tenant.
• Do you still need to refinance your home? Variable or fixed, and what term? Make sure you ask lots of questions before you sign on the dotted line. Ask what the pros and cons of my options are. Are there any fine print issues that are really important, and generally there are several. Ask what they are. Find a trusted mortgage broker or someone at your bank whom you feel comfortable asking questions. Refinancing is a big decision with real consequences, especially with so much uncertainty in the world and Canada these days. It is often best to talk with 2 or 3 different lenders, and do it early (3 to 6 months before you have to renew) so you have time to make an informed decision.
• Here is another interesting solution being proposed by the Canadian Mortgage Brokers Association (CMBA): Brokers plead for the Federal government to bail them out! Shocking, and proposing that mortgage borrowers borrow more! Great plan for mortgage brokers, realtors and banks. Here is the summary: 1). Longer Amortization from 30 years to 40 years for first-time borrowers (sarcasm, why not go for 50, 70, 100 years?) 2). High Ratio Refinancing: Enabling government-guaranteed refinancing up to 90% of a home’s value. This is so people who have major credit card debts/car loans, LOC’s to refinance and add it to their mortgage. Yes, let’s solve a debt problem with more debt! 3). Down Payment Assistance: Creating a national program to provide government-supported loans to first-time buyers. Brilliant, now the government that created the housing crisis now has to help young people buy a home. This sounds very familiar, like what happened in the GFC of 2008. Let’s bail out over-indebted, poorly managed companies, banks, etc., and place the burden on the taxpayer. Remember, the government has no money, only taxes and the ability to borrow endlessly from the central bank. Who is on the hook for these proposed programs? You and me, the taxpayers.
• Let’s wrap this up, and I will conclude with a few other important factors relating to Canadian real estate. 1). Interest rates: The Bank of Canada raised the rates by .25% yesterday. The current policy rates are still considered accommodative, meaning low by historical terms and well below real inflation. The biggest risk to homeowners with mortgages is the continued rising of interest rates. I have mentioned this several times in my blogs: the trend for the next few years will be the risk of rising rates. Central banks around the world are raising short-term rates due to persistent inflation, and this impacts floating-rate debt like variable-rate mortgages, LOCs, etc. But the greater danger is the long-term rates set by the bond market vigilantes (big financial firms, who assess risk and set rates). The 5-year or longer terms are set by the markets. The 30-year mortgage in the USA is 7.24% to 7.32% in October 2026. The trend has been rising rates due to excessive government debt and geopolitical risks (BC was downgraded 3 times in the last few years, and we, the taxpayers, fund these higher debt costs of 6.4B and growing…thank you, Mr. Eddy!). Geopolitical risks are on the rise. Look at the crisis in the EU, and six countries have rioting, violence and the destruction of public buildings and property. Very sad! I do not foresee the Middle East war ending anytime soon. The IRGC keeps sinking oil tankers, blowing up oil, gas and byproduct refineries in the Arab States. The Houthis in Yemen are attacking the Saudi’s and destroying critical infrastructure, strategic airports, military bases and maritime routes. Once the Israeli election is settled and the US midterms are over, I see a high risk of war acceleration. We also still have the US and Canada tariff crisis that Mr. Carney promised would be resolved in July 2025. Without this critical issue being resolved, our economy will continue to face serious problems, as we are already seeing companies laying off 10,000s of workers (estimated 87,000 to 90,000 jobs are at risk). Mr. Carney, please do your job, as every other major trade partner with the USA resolved the tariff fiasco with Mr. Trump last year! Yes, we all know Mr. Trump is a very difficult dance partner, but he does like doing deals!
• One final question: With over 8 million baby boomers in Canada, the majority of them are homeowners. Who is going to purchase all of these homes when very few young people can afford them? I keep pondering this question. So, the Love Affair Canadians have with Real Estate is facing some very difficult challenges.

I hope you found this helpful in the decision process regarding homeownership, renting, moving or downsizing. The great thing is that many people have options, and the key is to choose wisely! If you need someone to discuss your current situation, please reach out.

Bill Westmacott, Owner, Estate Planning, Life Insurance and Wealth Solutions.