Many homeowners locked in low-interest rates on their current homes that make it financially attractive to stay in their homes rather than sell and move to a new one. There are several factors contributing to the current low inventory in the housing market. The housing shortage is driving prices up and making it difficult for potential buyers to find their dream homes. The current low number of homes for sale in Canada is a major headache for the industry. Factors Influencing Low Housing Inventory Levels These factors, combined with others, have contributed to the housing shortage in Canada, making it a challenging market for both buyers and sellers. Moreover, the current high mortgage rates are discouraging homeowners from selling their homes due to the fear of losing their favourable low-interest rates.įinally, investors account for 20% of all home purchases in Canada, reducing considerably the available housing market inventory for individuals looking for their main residence. The impact of the COVID-19 pandemic has caused supply chain disruptions and labour shortages in the construction industry.įewer houses on the market meant that it was more common to have bidding wars, which have driven up home prices and made it challenging for first-time buyers on a strict budget to afford a home. High construction costs, lack of available land, and complicated zoning regulations are some of the reasons for the slowdown in new housing construction. One major factor is the lack of new housing construction to keep up with the increasing demand for housing. According to the Canadian Real Estate Association (CREA), there were 3.9 months of inventory on a national basis at the end of March 2023, down from 4.1 months at the end of February and the lowest level since last October. The housing shortage in Canada is a complex issue with several factors contributing to the problem. Unlock Rates Why is there a Housing Shortage in Canada?
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