Rising home prices are making Canada’s largest cities less attractive places to live and work, according to a new report from the Canada Mortgage and Housing Corporation (CMHC).
Blacklock's Reporter says the federal housing agency warned that expensive real estate is discouraging migration, curbing investment, and undermining long-term urban prosperity.
“We find that a 1% increase in house prices in the destination city will make it less attractive and will lead to a decline in the number of people moving there,” said CMHC Deputy Chief Economist in the commentary High Housing Costs Making It Harder To Move For Jobs Many Are Seeking.
“Cities need to understand the impacts of house prices across the country when planning for their own growth.”
From 1991 to 2020, the proportion of Canadian households that moved to a different municipality fell from 20% to 10%. CMHC said this trend is particularly concerning for younger workers trying to enter the job market.
“Narrowing the pool of people available to work lowers a city’s attractiveness for investment and curtails growth,” the report stated.
“Cities are not just for those able to pay high prices for homes. To prosper they require an extensive ecosystem of support services from transportation to retail, nurses to teachers. Cities should be building homes that support everyone.”
Home prices in major cities highlight the challenge.
According to the Canadian Real Estate Association, the average home costs as much as $1.2 million in Vancouver, $1 million in Toronto, and $869,400 in Victoria. Prices in other urban centers include Ottawa ($645,800), Calgary ($572,400), Montréal ($542,900), Halifax ($533,500), and Edmonton ($397,400). Regina has the lowest average at $313,400.
CMHC stressed that affordability directly impacts workforce mobility and economic productivity.
“High housing costs discourage Canadians from relocating to cities with better job opportunities,” said the report. “This hampers the country’s overall productivity growth.”
The agency noted that Canadians weigh multiple factors when choosing where to live, including commute times, neighborhood amenities, and housing quality.
“Households judge its location on amenities in the house’s neighbourhood including how close it is to their place of work and where they spend their leisure hours,” the report stated.
“Housing costs make these tradeoffs more difficult.”