Select Page

Three strategic opportunities for Canada’s real estate industry in 2024

Homeownership in Canada is in retreat. Historically, our nation had one of the highest homeownership rates in the Western world, peaking in 2011 at 69 per cent of Canadian households, as Statistics Canada reports. But, thanks to the housing affordability crisis, the number of owner-occupied homes in Canada is declining — and fast.

The result? Canada’s real estate industry is facing two major public policy challenges: the erosion of the national public policy consensus on homeownership and the regulatory targeting of real estate professionals by elected officials. Rather than shying away from these challenges, real estate leaders in Canada should tackle them head-on.

 

How bad is Canada’s housing affordability crisis?

 

According to a December 2023 report from RBC, it’s “at or near worst-ever affordability levels in many markets.” Middle-class families today must set aside 63 per cent of their household income to cover the costs of owning a home in Canada. This is over double what the Canada Mortgage and Housing Corporation (CMHC) recommends households spend on housing.

Sadly, Canada’s housing affordability crisis is not going anywhere in 2024. Higher-than-average interest rates and record levels of immigration mean housing costs will very likely stay stubbornly expensive for young Canadians. 

 

Public perception

 

The level of public frustration and anger on housing is high. Poll after poll ranks housing and affordability as the most important issues to Canadians right now, especially among millennials. That means elected officials will continue to be under immense pressure to not only solve the housing crisis but also to be seen to be solving the crisis. 

 

Renting becoming more common

 

With ownership rates in decline, cracks in the national public policy consensus that has historically favoured home ownership over renting have started to appear. Influential groups like Generation Squeeze are actively lobbying the federal government to roll back the Principal Residence Exemption through a surtax that homeowners would pay on the value of their property over $1 million. While some argue that a home equity tax would be political suicide, the calculus on the issue is changing as more and more Canadians turn to renting. 

 

More industry regulations

 

The affordability crisis has also forced many governments to turn their attention to piling new regulations on real estate professionals and transactions. During the 2022 federal election, the Liberal Party made commitments to introduce a Home Buyers’ Bill (HBB) of rights that, among other things, would ban blind bidding, establish a legal right to home inspections and mandate the public disclosure of home prices. Thankfully, the misguided and harmful HBB has not come to fruition thanks in large part to strong advocacy from the Canadian Real Estate Association, provincial associations and pushback from provincial governments.

Provincial governments are also getting in on the action in British Columbia, Ontario and Quebec. B.C. has ended practices like dual agency and introduced cooling-off periods for buyers of resale home properties. Ontario has introduced a system of open real estate offers and Quebec, just this year, significantly increased fines for real estate brokers not complying with rules in that province. 

Alongside a stubborn housing affordability crisis, the trend towards more regulation of the Canadian real estate industry will likely continue. Building new homes, especially at the scale we need to be building at, will take years. Regulating real estate provides elected officials with quick policy wins and talking points aimed at millennials who have grown frustrated navigating the housing market.

What new real estate policies will decision-makers target? Given the gravity of the crisis and the upcoming federal elections in 2025, it’s safe to say that nothing is off the table. 

 

How to turn these challenges into strategic opportunities

 

While these trends present major challenges, they are also strategic opportunities for associations and major brands to fight for the dream of homeownership and improve professional standards in real estate.  

 

Advocacy

 

To start, 2024 should be a year where every real estate association in Canada doubles down on advocacy as a core member service. There will likely never be another moment in history when housing will be higher on public and elected officials’ priority lists.

Public office holders need the advice of Canadian real estate leaders. Real estate associations should leverage this high-profile seat at the table to invest more in their advocacy programs, strengthen relationships with decision-makers and advance pro-homeownership policy solutions to Canada’s housing crisis.

 

Fight for higher licensing and practice standards

 

Second, the real estate industry should prioritize professionalism by fighting for higher licensing and practice standards. Buying or selling a home is the most important financial decision most Canadians will ever make. Yet, in many provinces, someone can get a real estate license with only a high school diploma, online self-guided courses and multiple-choice exams. Continuing education requirements to maintain a license are similarly lacking.

Rather than waiting for solutions to be pushed forward by misinformed public office holders, the real estate industry should become a vocal champion for strengthening real estate education and practice standards to advance reform as part of government’s approach to improving the consumer experience when buying or selling homes.  

 

Remind decision-makers of non-financial homeownership benefits

 

Finally, the real estate industry should step up and remind elected office holders and others of the importance of homeownership to people, communities and the country. Homeownership is far from just a financial decision that drives economic activity. Owning a home creates spinoff benefits in the form of higher educational achievements, lower rates of crime and higher levels of civic engagement.

While the economic benefits of homeownership are well understood, these secondary benefits are not. The real estate sector should prioritize research, thought leadership and public relations campaigns that tell this story. A strong pro-homeownership public relations effort will also reinforce to Canadians that real estate professionals are advocating for their hopes and dreams. 

 

This year will be a challenging one for Canada’s housing market and real estate industry. The housing affordability crisis will continue to put pressure on the national public policy consensus on homeownership and the business of real estate.

But, with significant challenges also come important strategic opportunities. This year, real estate leaders across Canada should meet these challenges head-on through making new investments in advocacy, fighting for higher professional standards and championing the dream of homeownership for all Canadians. 

 

Share