Breaking Ground: AI-Driven Analysis of How Policy Reform Can Unleash Canadian Housing Supply
Canada’s housing crisis is a generational issue in the country. Equiton partnered with the John Molson School of Business at Concordia University to uncover a data-driven policy path forward through innovative research into the barriers to housing supply and measuring the resultant effects of both supply and demand pressures on housing prices.
Included in this research:
- First-of-its-kind analyses of the impacts of governmental regulations and rising construction input prices on housing supply.
- Policy levers to increase housing supply and moderate accelerating housing prices in major Canadian cities.
- AI-projected population growth and housing completions impacting home prices.
Canada’s housing crisis is a generational issue in the country. Equiton partnered with the John Molson School of Business at Concordia University to uncover a data-driven policy path forward through innovative research into the barriers to housing supply and measuring the resultant effects of both supply and demand pressures on housing prices.
Included in this research:
- First-of-its-kind analyses of the impacts of governmental regulations and rising construction input prices on housing supply.
- Policy levers to increase housing supply and moderate accelerating housing prices in major Canadian cities.
- AI-projected population growth and housing completions impacting home prices.
Highlights:
Highlights:
- Across Canada, a 10% reduction in building restrictions (zoning rules, community consultation requirements, density limits, and environmental assessments) can raise annual home completions by almost 10% of total supply. A 10% reduction in approval delays adds another 3%.
- A 10% increase in input costs — primarily materials, but also attributable to taxes, fees, and labour—reduces average annual housing completions by 25% to 35%, with the greatest impact on apartment-style housing.
- Under current trends, Toronto median home prices are projected to rise to $1.8M in 2032 (in today’s dollars) from $1.4M in 2024 . Doubling completions could moderate this growth to $1.6M, validating de-regulation as a viable approach to stabilizing housing affordability in this high-demand metro.
- Without supply acceleration, Vancouver home prices may exceed $2.8M by 2032. Only the most aggressive supply increases may stabilize prices around $2.5M.
- In other markets, such as Montréal, prices continue to rise regardless of supply scenarios, while Calgary price growth is more sensitive to population shifts and completions.
- Streamlining regulatory frameworks and approval processes can offer a boost to housing outcomes in major markets. At the same time, collaboration between all levels of government, developers, and the public is essential to creating a policy environment that reduces costs and supports development that meaningfully contributes to long-term affordability.
Author:
Dr. Erkan Yönder, Associate Professor of Real Estate and Finance, John Molson School of Business at Concordia University
Dr. Erkan Yönder is an Associate Professor of Real Estate Finance and serves as the Director of the Jonathan Wener Centre for Real Estate at the John Molson School of Business, Concordia University. With a primary focus on real estate finance, Erkan’s expertise lies in commercial real estate and sustainable real estate. Erkan’s research has found its way into esteemed academic journals and has secured multiple grants from renowned institutions such as the National Pension Hub (NPH) and the European Public Real Estate Association (EPRA). Notably, his research earned him the Nick Tyrrell Real Estate Research Prize in the UK and the distinguished Best Published Article Award from Principles for Responsible Investment (PRI), a United Nations-supported initiative. Erkan has had the privilege of presenting his scholarly work at some of the world’s leading universities, including MIT, Yale University, the University of California, Los Angeles (UCLA), and Cornell University. Erkan received his PhD degree in Finance and Real Estate at Maastricht University.
- The ‘North Effect’: Higher temperatures have had a moderating effect on cooler Canadian regions, potentially making them more attractive for climate migrants and investors alike.
- Climate immigration: A 1% increase in the climate exposure of an immigrant’s home country increases immigration to Canada by around 0.5% across all immigration categories, playing a role in sustaining housing demand and supporting property values.
- Physical risk: As many Canadians have experienced, Canada is not immune to the effects of climate change. However, the number of Canadian postal codes affected by wildfires since 2019 is growing at a significantly slower pace compared to rising threats in U.S. locales.
- Regional insights: Data maps of temperature trends and abnormal heat days provide actionable insights into geographic diversification and mitigating climate risks for long-term investors.
- Guidance: To preserve its climate advantage globally, Canada can direct policy and investment toward disaster-resistant infrastructure and long-term climate resilience initiatives.
Dr. Erkan Yönder, Associate Professor of Real Estate and Finance, John Molson School of Business at Concordia University
Dr. Erkan Yönder is an Associate Professor of Real Estate Finance and serves as the Chair of the Finance Department at John Molson School of Business, Concordia University. With a primary focus on real estate finance, Erkan’s expertise lies in commercial real estate and sustainable real estate. Erkan’s research has found its way into esteemed academic journals and have secured multiple grants from renowned institutions such as the National Pension Hub (NPH) and the European Public Real Estate Association (EPRA). Notably, his research earned him the Nick Tyrrell Real Estate Research Prize in the UK and the distinguished Best Published Article Award from Principles for Responsible Investment (PRI), a United Nations-supported initiative. Erkan has had the privilege of presenting his scholarly work at some of the world’s leading universities, including MIT, Yale University, the University of California, Los Angeles (UCLA), and Cornell University. Erkan received his PhD degree in Finance and Real Estate at Maastricht University.
This project was commissioned by the Equiton Research Fund in Real Estate at the John Molson School of Business. Equiton values and upholds the principle of academic independence in all its research partnerships.
This project was commissioned by the Equiton Research Fund in Real Estate at the John Molson School of Business. Equiton values and upholds the principle of academic independence in all its research partnerships.
