Canada's Housing Crisis

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Canada’s Hidden Housing Crisis: How Domestic Speculation & Pension Funds Are Pricing Out First-Time Buyers
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Canada’s Hidden Housing Crisis: How Domestic Speculation & Pension Funds Are Pricing Out First-Time Buyers

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Have you ever wondered why owning your first home in Canada feels so out of reach? In this episode, we dig deep into the hidden side of the housing crisis that barely gets mentioned, domestic investor speculation. Shockingly, nearly one in three homes sold in 2025 went to investors, not folks looking for a place to actually live. And it's not just your well-off neighbor; our very own pension funds, like the CPPIB and OTPP, are controlling a whopping share of real estate deals worldwide, treating homes more like stock portfolios than spaces for families. If you thought foreign buyers were the villains, think again: the data shows homegrown speculation is quietly squeezing out first-time buyers in a big way (and over 20% of Canadians now own more than one property!).

Let’s talk about the programs that are supposed to help us out. Tools like the First Home Savings Account and the Home Buyers' Plan sound great on paper, but in practice, they’re adding fuel to the fire. When everybody gets more money to spend on a limited number of homes, prices simply go up even more. Worse still, some government initiatives have already been shut down due to poor uptake or unintended effects, and those still standing might be inflating demand and making it even harder for real families to get ahead. The combined buying power of pension funds and investor households, backed by large capital and tax advantages, means that everyday buyers face impossible odds in bidding wars.

But here’s the good news: we actually have policy solutions that work! Measures like targeted speculation taxes, limiting the share of residential real estate in pension fund portfolios, and redirecting tax revenue into affordable housing construction have already proven effective elsewhere, like in BC’s Speculation and Vacancy Tax. These actions could level the playing field, prioritize homes for people, and fight runaway mortgage debt. The catch? It’s going to take real political pressure and a unified voice from all of us. If we can put consistent pressure on our representatives, there's hope for a future where affordable housing isn’t just a headline, it’s reality.


Takeaway List (12 Key Points)
  • Domestic investors account for 30% of Canadian home purchases (2024 data).
  • First-time buyer market share fell from 48% to 43% (2020–2023).
  • Pension funds like CPPIB and OTPP hold a global disproportionate share of real estate.
  • Over 20% of Canadians own property beyond their primary residence.
  • Some government housing programs have been discontinued or are under review due to limited impact.
  • New buyer programs (FHSA, HBP) increase demand without expanding supply.
  • Targeted taxation, like BC’s Speculation and Vacancy Tax, has shown real results.
  • Capital gains from real estate are often taxed at only half the regular income rate for investors.
  • Mortgage interest deduction unfairly benefits investors.
  • Proposed policies include: 35% down payments for investment properties, taxing gains as income, ending mortgage interest deductibility.
  • Pension fund regulations could limit their exposure to residential property.
  • Policy reforms should redirect tax revenues to new affordable housing supply.

Chapters

02:30 – The ‘hidden’ side of investor-driven housing crisis
06:12 – Real estate investors now buy 30% of homes
09:50 – How over 20% of Canadians became multi-property owners
14:35 – Shrinking first-time buyer share & rising investor profits
18:15 – Pension funds: surprise giants of real estate speculation
22:00 – Real losses for pension funds, unreal consequences for buyers
25:45 – Why first-time buyer programs may inflate prices
30:18 – Failed government interventions and market inefficiencies
34:22 – Policy solutions: taxes, restrictions & revenue recycling
39:40 – International lessons & winning the public policy game
44:50 – Call to action: demand better housing policies


Curious about how we can really fix Canada’s housing crisis?

• Visit canadashousingcrisis.transistor.fm for more episodes
• Share your questions and ideas by emailing hello@micme.com
• Join the newsletter at canadashousingcrisis.transistor.fm/subscribe


Fact Checks / Corrections
  • Global pension fund real estate losses are cited at $1.24 trillion but this is a global figure, not just Canadian funds.
  • The impact of government buyer programs is still being studied; some claims about their negative impact are speculative.
  • BC’s Speculation and Vacancy Tax specifically targets both foreign and domestic investors and has contributed to reduced vacancy rates and new affordable housing revenue.

Sources

https://www.cmhc-schl.gc.ca/observer/2025/summer-update-2025-housing-market-outlook
https://www.rbc.com/en/thought-leadership/economics/canadianhousing/special-housing-reports/canadas-housing-market-forecast-update/
https://wowa.ca/reports/canada-housing-market
https://www.cmhc-schl.gc.ca/en/observer/2025/is-toronto-condo-market-downturn-repeat-of-1990s
https://www.crea.ca/housing-market-stats/canadian-housing-market-stats/quarterly-forecasts/
https://stories.td.com/ca/en/article/canada-housing-forecast-2025
https://www.canadianmortgagetrends.com/2025/09/oxford-says-canadian-economy-to-remain-sluggish-as-housing-struggles-to-find-bottom/
https://www.truenorthmortgage.ca/blog/housing-market-forecast
https://blog.remax.ca/canadian-housing-market-outlook/
https://www.pwc.com/ca/en/industries/real-estate/emerging-trends-in-real-estate.html