Why Hoping for a Major Housing Price Crash in Canada Isn’t Realistic and What It Means for Calgary Buyers and Sellers

A recent article by Kenneth Chan in Daily Hive (posted 3 days ago) highlighted some big news from the Canada Mortgage and Housing Corporation (CMHC): Canadians hoping for a sudden, dramatic housing price drop may need to temper their expectations. According to CMHC, prices aren’t likely to plummet — and in fact, the road to greater affordability depends on a massive increase in home construction rather than a price crash.

As a REALTOR® with over 15 years of experience working with homebuyers and sellers in Calgary, I know that national headlines can often cause anxiety or unrealistic hopes. Let’s break down what this report actually means, especially here in Calgary, and why I believe there are encouraging takeaways for both buyers and sellers.

The Big Picture: Canada Needs More Homes — Lots More

The CMHC report states that Canada needs to build between 430,000 and 480,000 new housing units every year until 2035 to improve affordability to levels last seen in 2019 before the pandemic-fueled boom. To put that in perspective, we’re currently building only about 250,000 homes per year.

Why the sudden urgency? After the pandemic, we saw a perfect storm: supply chain issues, skyrocketing demand, low interest rates (at the time), and a surge in immigration. These factors drove up prices rapidly, especially in big markets like Toronto and Vancouver. The new CMHC model no longer targets 2030 as a benchmark for fixing affordability; instead, it uses a rolling 10-year horizon, recognizing that approvals and actual construction take time.

Affordability Metrics Are Changing

CMHC introduced a new metric: the adjusted house price-to-income ratio. In Metro Vancouver, that ratio jumped from 71% in 2019 to a staggering 99% in 2024. In Greater Toronto, it increased from 59% to 74%. Other regions that used to be relatively affordable, like Nova Scotia and New Brunswick, also saw sharp jumps due to increased migration and limited new supply.

Even with aggressive new construction, CMHC suggests that it’s simply not realistic to expect affordability levels to return to early-2000s conditions, especially in our largest cities.

Calgary: A Different Story

While Toronto and Vancouver dominate headlines, CMHC’s data shows that Alberta, and Calgary in particular, is in a different position.

For example, by 2035, average home prices in Calgary are projected to reach about $809,000, up from approximately $614,000 in 2024. Compare that to the projected $1.9 million in Metro Vancouver and Greater Toronto. Yes, this is an increase but it’s far more moderate.

Rental prices in Calgary are also expected to see smaller changes. While rents in Toronto and Montreal may decline slightly (by 6.1%), Calgary is expected to experience about a 6% drop in rents as more supply comes online.

Why Prices Aren’t Expected to Crash

Some people hope for a market “correction” or even a crash to bring homes back into easier reach. But CMHC outlines several reasons why that’s unlikely:

1️⃣ Supply Constraints: There isn’t enough housing supply, and approvals take years. Even if demand softens slightly, the supply backlog will keep prices from crashing.

2️⃣ Strong Demand: High immigration targets mean more people need homes. Canada’s population is projected to grow to nearly 45 million by 2035, up from over 41 million today.

3️⃣ Cost Pressures: Rising construction and financing costs make it harder for developers to build new homes affordably. Builders also face challenges in finding enough skilled labour.

4️⃣ Private Sector Realities: Most new supply comes from private developers. High costs and lower pre-sales make many projects financially unfeasible without strong price support.

What Does This Mean for Calgary Homebuyers?

The big takeaway for Calgary buyers is this: while prices are expected to rise, our market remains more accessible than other major Canadian cities.

Here’s what that means for you:

✔️ Relative Affordability: Compared to Toronto and Vancouver, Calgary offers significantly more home for your money. Even with projected price increases, Calgary homes remain within reach for more buyers.

✔️ A Stable Market: Instead of fearing a sudden crash or dramatic price spike, Calgary’s market is projected to grow steadily. This makes it easier for buyers to plan long term, build equity, and make confident decisions.

✔️ Better Rental Prospects: For those investing in rental properties, Calgary remains an attractive option. With moderate rent decreases and strong demand, rental properties can continue to generate solid income.

✔️ Immigration and Growth: Calgary continues to attract newcomers thanks to its vibrant economy, quality of life, and relatively affordable housing. This ongoing growth supports home values and keeps our market dynamic.

What Does This Mean for Calgary Home Sellers?

For sellers, the report offers encouraging news:

✔️ Sustained Value Growth: Home prices in Calgary are expected to rise steadily. While we may not see the dramatic spikes seen in the last few years, moderate, sustainable growth is a healthy indicator for long-term value.

✔️ Attractive to Buyers Nationwide: As affordability declines in Toronto and Vancouver, more Canadians are looking to Calgary as a place to relocate. This increases your potential buyer pool, whether you’re selling a family home, a downtown condo, or an investment property.

✔️ Confidence in Timing: Sellers often worry about “missing the peak.” But with steady growth projected, there’s less need to time the market perfectly. Selling when it fits your life stage and goals may be more important than trying to guess short-term movements.

The Importance of New Construction and Innovation

A critical part of CMHC’s message is that to restore any level of affordability, Canada needs far more new housing. The report mentions the need for:

• A larger workforce: More skilled tradespeople and construction professionals.
• Greater private investment: Incentives and partnerships to make projects feasible.
• Innovation: Embracing prefabricated and modular building methods to cut costs and speed up construction timelines.

In Calgary, we’ve already seen steps in this direction. New communities are springing up on the outskirts, and infill developments are transforming older inner-city neighborhoods. Embracing innovative construction methods could help us continue to meet demand without sacrificing quality or affordability.

A Word of Encouragement

For buyers, the dream of homeownership is still alive and well in Calgary. Our city’s balance of affordability, quality of life, and future growth prospects makes it one of the most attractive markets in Canada today.

For sellers, your investment in Calgary real estate remains strong. Moderate, sustainable price growth is better for long-term health than volatile peaks and troughs. You can continue to build equity confidently, knowing that our market fundamentals are strong.

Whether you’re considering making a move, investing in a rental, or simply staying informed, the key takeaway is this: Calgary is poised for a bright future. While national headlines often paint a gloomy picture, our local market tells a different story, one of stability, opportunity, and community growth.

My Commitment

As a REALTOR® who has helped hundreds of families and investors navigate the Calgary market for over 15 years, I’m here to be your guide. Whether you’re buying your first home, moving up, downsizing, or investing, I can help you make a plan that fits your goals and protects your long-term interests.

Feel free to reach out if you’d like to discuss what these trends mean for your unique situation. Together, we can turn these market insights into your advantage.

Source: Kenneth Chan, Daily Hive, posted 5 days ago.
“Report says hoping for Canadian housing prices to plummet is not realistic”