Canada's Condo Crisis: Stalled Pre-Construction Sales Forecast Supply Struggles

Canada faces an escalating home ownership crisis as pre-construction sales plummet, hindering necessary funding for new projects. Despite government efforts to alleviate the situation, high interest rates and declining investor interest dampen condo sales. Experts warn this imbalance may worsen, deepening the housing supply challenge.

Canada is bracing for an intensifying home ownership crisis as pre-construction condo sales hit historic lows, threatening the financial backing essential for new projects. This emerging trend signals a severe struggle in supply for years to come, according to economists and realtors interviewed by Reuters.

Amidst high interest rates and declining rental yields, investor interest in Canada's condo market has waned significantly. Prime Minister Justin Trudeau's measures aimed at reviving buyer demand have shown limited success, with new condo sales plunging over 50% in the first half of the year.

Experts predict that without sufficient pre-sales to initiate construction, the housing market won't balance its demand-supply gap soon. Critics argue that even recent legislative changes fail to incentivize new developments, perpetuating the crisis amid ongoing demands for housing in urban centers like Toronto.

(With inputs from agencies.)