You’re out

The average property in the Big Smoke sold for $315,231 twenty years ago. When the pandemic started, fifteen years later, it was $819,153. Twenty-four months after that the same property commanded $1.33 million. And these days it’s back down to $1.1 million.

Do the math. House prices accelerated during two years of Covid by just over half a million dollars – equalling the growth over the previous decade and a half. That was a 60% pandemic pop when immigration levels plunged, but a health emergency and 2% mortgages fuelled FOMO. More proof humans are weird.

All this is relevant since the federal government has just radically changed its goals for house prices.

Until now CMHC told the country its aim was to restore 2004 pricing to real estate, pushing down prices until it would take – on average – just 30% of income to afford a roof. Well, that was last week. No longer. The new target is 2019. And it, too, will fall by the wayside.

If this agency is any indication, the new Housing Czar, poor Gregor Robertson, has already lost his way. CMHC’s media briefing yesterday was a farce. These guys told us 4.8 million new homes will need to be built over the next decade if the kiddos have any chance of owning one. That equates to about 450,000 units a year. Seriously. So far in 2025 we’ve seen 90,000 starts, and it’s June. So maybe we’ll hit 200,000 – or less than half the fed’s makebelieve target.

So, strike one.

Then there’s this, from CMHC’s chief economist: “As we increase housing over time, house price growth will come down.” Note he did not say prices would be falling – just the rate of growth in prices. In other words, returning to 2019 levels – a drop of 27% from current levels (atop the 15.7% decline since 2022) is unserious.

Strike two.

Finally, chew on this logic from Gregor’s troops:

“Housing supply will be increasing. This will start to slow the growth in house prices. Canadians will then be a little bit less keen to bid aggressively on housing … and they’ll diversify their savings into other money markets or the stock exchange or whatever. And so the pressure will be taken out of house prices.”

So there you have it. The price of real estate won’t actually fade until demand declines. So if a house becomes less attractive as a financial asset, no longer yielding consistent capital gains, Canadians will shun property in favour of  ‘money markets or the stock exchange or whatever.’

But that’s already the case. There are no capital gains in real estate currently,nor have there been for a couple of years. Prices are down, especially for condos, but affordability hasn’t improved given mortgage rates and the increasing costs for taxes, insurance, fees, utilities and maintenance. Property buyers are vanished, yet there’s no evidence billions in savings and borrowings is being diverted into ‘stocks or whatever’.

Strike three. The agency is rogue.

Now this is interesting. What does ‘affordable’ mean when the politicians throw that word around?

As stated, most people think a home is within reach if it costs about 30% of gross household income.  CMHC is telling people that is an achievable goal.

That ratio in 2019 was 40.3% of income. Now let’s review where we sit today. This is the latest real estate affordability reporting from RBC:

The insist that by building more houses, convincing people to divert their money into financial assets instead of a home, that affordability can be vastly improved. In fact, “doubling projected housing starts over the next decade would bring the figure down to 41.1 per cent of income being allocated for homebuying nationally.”

So, in 2035 more plentiful houses will be as easy to buy for the average family as they were in 2019, which is when we already had a ‘housing crisis’ which was exacerbated by lower mortgages and a global death watch? But we can’t actually build them? Sure.

The only thing more fantastic is that we’re supposed to believe it.

Carney’s doing great with Trump. But Gregor’s gotta go.

About the picture: “As requested, more dog pictures!” writes STephen. “This is Bingo, our hurricane rescue Frenchie, helping clean up after dinner. His sister Dixie, also a rescue, is a little less enthusiastic but helpful nonetheless. Together these two keep us entertained and distract us from that crazy world out there! They love all you do, Garth!”

To be in touch or send a picture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2025/06/20/youre-out/