Is Canada In Trouble?

😬 Is Canada In Trouble?

Source: BMO Economics

The 411: After record population growth in 2023–24, Canada has swung to virtually zero population growth. Economists say the shift is cooling housing and inflation, but it will also weigh on long-term economic growth.

• Growth in potential consumers dropped from more than 3% to roughly 0% in just two years.

• Labour force growth has slowed from nearly 4% in late 2023 to almost flat today.

• Canada's youth unemployment rate climbed to 14.5%, the highest non-pandemic level since 2010.

• The ratio of unemployed workers to job vacancies has jumped from roughly 1:1 in 2022 to more than 3:1 today.

• Net non-permanent resident outflows exceeded 460,000 over the past year as Ottawa reduced temporary resident targets.

• Canada has more than 180,000 purpose-built rental units under construction, the first time rental projects outnumber ownership housing.

• Average asking rents have already fallen, with market rents down 4.7% year over year in May.

• Rent inflation in the CPI has slowed to 3.5%, down from a peak of 9.0% in 2024.

Why This Matters: Slower population growth is easing pressure on rents and housing demand, but it is also weakening the labour market and economic growth. Rising youth unemployment and fewer job openings suggest the slowdown is spreading beyond housing. Canada may be getting more affordable, but at the cost of weaker momentum.

👀 Foreign Buyer Ban Has A Loophole

Source: South China Morning Post

The 411: Canada's foreign buyer ban doesn't apply to permanent residents, and new estimates suggest Chinese immigrants remain a significant force in the housing market.

• Canada has banned most foreign homebuyers until 2027, but permanent residents are exempt.

• China was Canada's 4th-largest source of new permanent residents in 2025, with 21,115 arrivals.

• It’s estimated Chinese permanent residents may have purchased up to C$5.7B worth of homes in 2025.

• The estimate assumes 40% of new Chinese permanent residents bought a home.

• Canada's average home price was approximately $677,000 in 2025.

• Residential real estate supported 1.2 million jobs and generated $152 billion in GDP last year.

Why This Matters: The foreign buyer ban doesn't apply to permanent residents, meaning immigration continues to influence housing demand even with the ban in place. It also highlights how difficult it is to separate immigration policy from housing policy.

🔥 Broker Burned Rival's Office

Source: The Walrus

The 411: A former Quebec real estate executive orchestrated a years-long arson campaign against a rival brokerage after a business dispute.

• Christophe Folla co-founded Sutton Québec, one of the province's largest real estate brokerages.

• After a top broker left for a competing firm in 2017, Folla admitted he became consumed by revenge.

• Prosecutors say he paid $120,000 to co-conspirators over a seven-year campaign.

• The attacks caused roughly $6 million in property damage.

• One of the targets was a RE/MAX office in Saint-Sauveur that was destroyed in a 2021 fire.

• Folla later told a Quebec parole board he developed an "unfathomable desire for vengeance" after his rival tried to recruit his agents.

Why This Matters: Toronto is still attracting newcomers from around the world, but it's increasingly losing existing residents to other parts of Canada. The data highlights how housing costs and affordability continue to shape where Canadians choose to live.

🛒 Ottawa Goes Condo Shopping

Source: The Star

The 411: Governments are buying unsold condos and converting them into affordable rentals, but experts say it could also help stabilize struggling condo markets.

• B.C. will spend $1.45B to acquire 2,200 unsold condos for affordable housing.

• Ontario backed a $1.3B fund to purchase blocks of unsold GTA condos for long-term rentals.

• The GTA had a record 4,295 newly completed unsold condos in Q1 2026, more than double a year earlier.

• Buying completed condos is often cheaper and faster than building new affordable housing from scratch.

• Some owners worry affordable rental conversions could affect property values, while others argue filling empty buildings benefits everyone.

Why This Matters: Temporary rent hikes can quietly become permanent if no one challenges them. This ruling reinforces that tenants have the right to question whether their rent is being calculated correctly.

🤔 WTF of the Week:

The condo market isn't just slowing... it's delayed. Sales collapsed first, and condo starts followed about 18 months later.

That's why supply keeps showing up even after demand disappears.

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