As you read this, you probably are wondering why housing is so expensive in Canada. Even if you don’t have a home, will investing in real estate or owning a condo will help you save money over the long run?
Well, it’s important to note that real estate doesn’t directly appreciate in value over time. Instead, prices increase when people want to downsize or invest in your property.
As your investment grows, the cost of maintenance increases. Plaster breaks eventually need to be replaced and/or concealed, floors need to be re-done and/or concealed, and other updates need to be done to the interior. all of this costs money!
Another issue is maintenance. When do you have maintenance done? When does it need to be done? These questions and answers can make or break whether or not property is worth investing in.
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Population density is high
Having a large population is also high in the Canadian context. With a population of 9.2 million people, Canada has a lot of people!
This is due to its large size and proximity to the U.S., making it a popular vacation spot. Because of this, there is a lot of demand for housing and property.
As more people want property and housing, the prices rise! This is why in some areas, you can buy a home with one vote from your government. It is very rare to see this in Canada as we have two levels of government!
When looking for housing or buying a property, you have to be very careful as there are no rules when it comes to construction and quality of life (CALF) properties.
Regulation affects housing prices
There are a number of factors that affect the cost of housing in Canada. One of them is government regulation. There are a number of issues that relate to property rights, and how they are administered.
These include things like restrictions on mortgage lending, restrictions on house buying, and restrictions on construction.
All of these issues have an effect on the cost of housing as they make it more difficult for interested parties to acquire a property and complete it.
Given the amount of capital required to buy a property these issues can have a significant impact on how expensive real estate can be. Another issue that relates to property rights is mortgage financing.
This includes things like proof of income, credit history, and identity verification requirements that banks must meet when lending money for homes.
Wealth affects housing prices
While not a factor in determining the cost of housing, wealth does have a bearing on how much money you need to buy or rent a home in Canada.
Property prices are higher in some Canadian cities than others. This is due to factors such as political and social awareness, demand, and more importantly, affordability.
Political awareness plays a role in property prices as well as any other investment you can make. People who are politically aware are more likely to buy property because of the perceived security it brings.
demand for housing is high due to the growing population and rising incomes in most countries. this means more people are needing housing and buying a property is an easy way to meet demand.
Climate affects housing prices
There are two main things that affect the cost of housing in Canada: temperature and construction.
As mentioned before, winter weather causes power outages and cooling bills. This increases electricity costs, which in turn increases construction costs.
Summer times also bring heat waves, which increase demand for cooling systems. These heat waves are a part of the regular climate cycle and will eventually go down as they become common experience.
When building a home, contractors use standardized methods for drying bricks, lining up windows and rooms, placing furnishings where they should be, and more. These methods make construction more stable and reliable.
Another factor that affects cost is roof condition. If the weather gets bad enough, you may need to replace your roof.
For example, Toronto vs. Calgary
When it comes to housing prices, both cities can be costly. In Calgary, it is rare to find a house for less than $400,000. This price range includes all sizes and styles of homes.
However, some houses in this price range are quite common and are already purchased together: You will find a lot of homes in the Greater Calgary Area that are between $400,000 and $600,000.
This makes it more cost prohibitive for someone to purchase a home and move in with no money spent at all. Since taxes are high in most regions, many people save money by purchasing a home nearby rather than building a custom home on their own.
Another factor that raises the cost of housing is location. The closer you live to work or school the higher the cost of housing will be.
Supply and demand dictates price
While global money-making trends like online shopping and online-only retailing are growing at a furious pace, they are only making a minor impact on prices.
As more and more people start spending their money on new things, buying habits evolve and old habits develop. People purchase things they previously wouldn’t have, like stuff for themselves or for gifts.
That is why it is so shocking how expensive housing is in Canada. While you could go out and find something decent if you wanted to, you would be spending a lot of your new-found cash on car payments, furniture costs, and other household items!
Just because we have easy access to low-cost goods does not mean people buy that much of them.
Home ownership is the goal in Canada
Nearly everyone in Canada has a pretty good idea why home ownership is expensive: because it is!
Home ownership is the ultimate mark of success in Canada. When you are able to purchase a home and put into practice what you believe in as a family, people will respect you for it.
This is one area where the United States excels versus Canada. We can always find someone to sell to in Canada, but its take time and energy!
Another reason why home ownership is expensive in Canada is because people are so spread out. There are so many small towns and less developed areas that don’t have much housing available.
Because of this, people who want to live somewhere but don’t have a lot of money left over to buy a home tend to move out-outdoors. It can be tough to stay covered when there isn’t housing available.
High-income households spend more on housing
While it is true that the average household income is high, there are some things that average people don’t need but highly-funded institutions and programs need to have funding for.
While it may be difficult to recognize, many of these funds and instititions work hard to recruit and fund top notch faculty members and innovative projects that tackle social issues.
When you look at large public & private sector funded projects, you will notice that almost all of them are concentrated in the housing sector. This is no accident – housing is a necessary item in every person’s belongings.
The reason for this is that when people move, they buy items to put in their new home including furniture, decorations, etc. These can be valuable long after they leave the current home.