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Canada may be getting prepared or “massaged” for a much larger housing crash. 2020

883 views · Published 14 December 2016 · 8:04 · Indexed 10 November 2026

Channel: Mike Martins · 2016 · News & Politics

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YouTubers, Mike Martins here with another update on the Canadian housing crisis. Today I’m looking at two articles published on December 13, 2016, and this time we’re starting to see actual forecasts about what Canada’s housing market could do to the wider economy over the next several years.

According to the Financial Post article discussed in this video, Canada’s Parliamentary Budget Officer is forecasting that residential investment could stop contributing to economic growth and actually become a drag on GDP beginning around 2018. The forecast discussed here projects residential investment subtracting approximately 0.2 percentage points from GDP growth in 2018, 0.4 points in 2019, and 0.1 points in 2020.

That is important because housing has been one of the major forces supporting the Canadian economy.

At the same time, Vancouver and Toronto appear to be moving in completely different directions. Vancouver sales are reported to have fallen sharply following British Columbia’s 15% foreign-buyer tax, while Toronto prices were reportedly still surging, with prices around Toronto up approximately 23% year-over-year in November.

The second issue is housing supply. If prices are rising dramatically because demand is supposedly overwhelming supply, why isn’t construction responding faster? The article discusses zoning restrictions, opposition to development, and difficulties increasing density in cities such as Vancouver and Toronto.

Then there is population growth and immigration. Canada is bringing in hundreds of thousands of newcomers, meaning housing, employment, transportation and infrastructure all have to expand alongside the population.

The big question I’m asking in December 2016 is: What happens if housing stops driving the Canadian economy?

Could Vancouver's slowdown spread? Could Toronto eventually follow? And are the official forecasts underestimating how much damage a housing correction could cause?

Comment below and let me know what you think.

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