This article originally appeared in the Financial Post. Below is an excerpt from the article.
By Jack Mintz, April 7, 2026
Is the housing crisis nearing its end? Since peaking in the summer of 2022, the new-housing price index has fallen 3.5 per cent. True, at the beginning of this year it was still almost a quarter higher than in January 2017, but after adjusting for inflation, real housing costs are the same today as they were then.
Why are prices falling? Lower demand resulting from a softer economy, flat real incomes and, the most powerful factor, immigration curbs. Investors are abandoning condos because at current interest rates they can’t charge enough to cover their operating and capital costs. Condo prices will have to fall more to attract them back. As for the supply side, a modest improvement in housing starts has also put some downward pressure on prices.
Housing affordability is still a problem, however. The Bank of Canada estimates that mortgage payments and utilities are still 43 per cent of disposable income, up sharply from 36 per cent in January 2017. On the other hand, they’re well down from their peak of 55 per cent in the third quarter of 2023. If interest rates track downward once the current oil shock is over, lower mortgage rates will increase affordability.
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Jack Mintz is the President’s Fellow at the University of Calgary’s school of public policy and a distinguished fellow at the Macdonald-Laurier Institute.
