When buying a house, realtors will tell you it is either the seller’s market or the buyer’s market. What they mean by this is that either one is in control, and right now, the seller has the power. Even though Covid-19 plunged the world into a recession, the housing market boomed. Due to supply, and demand homeowners have been bumping up prices on their properties, which is why the average listing cost is at an all-time high right now. Many also believe this has, and definitely will have, a negative effect on the homeless population.
How high are housing prices here in Canada?
Well, typically, the housing market activity peaks in the spring, declines in the summer and fall, and slows further in the winter before rebounding again. But 2021 has completely knocked that trend off its track, as the rate at which people are buying homes keeps rising. Even in the winter, when housing activity usually drops, the trends are the same as the ones set in spring. Additionally, in an article written by CBC News on December 15th, it states that more than 630,634 homes have been sold on CREA’s MLS system this year, which is even more than the record set in 2020, with 552,423 houses being sold. As we can see the demand for the houses are super high at the moment, and it makes sense as to why the prices are also going up. The average house price in Canada is a shocking $719,102, with the highest being in British Columbia at $987,352.
How come the prices are so high?
Like mentioned before, the reason prices are so high are because of supply and demand. In Canada, there is a higher demand for homes than there is a supply of houses. An article by New Canadian Life explains this idea further, and it says that there are multiple factors to this housing crisis. First of all, Canada relies heavily on real estate, as it makes up about 12% of its gross domestic product. Even when there is plenty of construction for new real estate, people see a tight supply of living spaces within their desired city, and it turns into a struggle for homes that aren’t worth nearly as much as they are being purchased for. Low-interest rates can also have an impact on the price of houses. With low-interest rates more people can get approved for lower mortgage rates. This draws in more potential buyers and leads to high bidding wars between parties. Immigration is also a part of it, as Canada is an immigrant country. Numerous people come to Canada or the United States to start a new life, and many have to do this in order to escape war or natural disasters. Real estate responds to demands created by people, specifically households, so when the population increases, the housing market does as well.
What does this have to do with the rising numbers of homeless people?
The Government of Canada has not said much about homelessness in relation to the global pandemic, but many have argued that Covid will “absolutely exacerbate homelessness in Canada”. With the pandemic housing prices may also go up, so it is understandable that less people can afford to purchase a home. Additionally, an article by United Way Centraide Canada says that approximately 235,000 Canadians experience homelessness each year, and these figures may increase due to economic instability during the Coronavirus pandemic. An article by National Public Radio outlines the same issue that is happening in Canada. 580,000 individuals were homeless in the United States in 2020, which is a 2% increase from the year before. Also, more than 106,000 children were homeless during this year, and while the majority of homeless children were in shelters or transitional housing, almost 11,000 were living outside.
What can you do to help?
While there isn’t much you can do about the housing crisis, you can support the homeless by volunteering at shelters, fundraising, bringing awareness, donating clothing or food, and so on.