Strong equity gains over the past 30 years are dimming the dream for future generations of as home-ownership rates decline nationally and in major markets, according to a new report from RE/MAX Canada.

In its analysis of data and market conditions, the RE/MAX Housing Market Drivers report found that, although each generation has faced significant economic challenges, the current cohort of property purchasers is facing among the most formidable headwinds yet.

Kingsley Ma, a RE/MAX vice-president told Connect that younger buyers are particularly affected by high interest rates and construction costs. One of the biggest reasons: Supply has not kept pace with demand boosted by immigration, interprovincial migration and population growth, he said.

“There’s a significant growth and we’re not building fast enough,” said Ma in an interview. “That’s the main driver. However, there are other things involved, like the cost of living and the one to really be aware of is the salary part. What people earn today is not growing as fast as the real estate market itself percentage-wise, proportionally.”

RE/MAX examined nine major Canadian urban centres over a 30-year period and found population growth, coupled with policy levers and market events, have long underpinned the housing market. The Halifax Regional Municipality saw the greatest increase in price growth, rising 460% between 1994 and 2024 for a compounded annual growth rate (CAGR) of 5.91%. The Greater Toronto Area followed at 436.2% with a CAGR of 5.76%, while Saskatoon reported a 377% increase and a compounded annual rate of return of 5.35%.

Young buyers are being squeezed by accelerating prices, wages that fail to keep pace, and a shortage of lower-cost listings.Many are also struggling to pass mortgage stress tests, cover downpayments and cope with higher monthly expenses. Delays or cancellations in new-home development and competition from older downsizing households are expected to intensify these challenges in the years ahead.

“The one that I think doesn’t get talked about enough is the government policies that are involved with building stratas,” he added. “Permits take a lot of time [hampering affordability.] Permits do take a lot of cost, too. And then there are taxes that are part of the [younger generations’ home-ownership rate] destruction, too.

Few members of older generations regret the leap to homeownership, says the report. Older generations are less affected by price rises than younger ones, said Ma.

To date, each generation has bounced back and fared well, as history has shown that major Canadian centres rebound sharply once economic stability returns to the market, says the report. Although the journey remains complex and affordability is a significant barrier, the report points to the real estate cycle and practical solutions that could ease the path to ownership, provided governments and the private sector act together.

He and his company called for policy changes to improve affordability.

Affordability, stagnant incomes, supply issues and demographic shifts continue to constrain young buyers. RE/MAX brokers reported balanced or moderating conditions in most markets, but affordability remains an issue despite rising inventory. Average price escalation is outpacing wage growth, while many first-time buyers are challenged by Canada Mortgage and Housing Corporation mortgage stress tests, debt, down payment requirements and carrying costs. Chronic shortages at lower price points, cancellations of new construction projects and increased competition from aging empty-nesters seeking smaller homes are adding pressure.

REMAX noted that a May 2021 Scotiabank global economic housing note identified a chronic insufficiency in Canada’s housing supply, resulting in the lowest number of housing units per 1,000 residents among G7 countries. Canada led the G7 in population growth during the pandemic years, rising 2.7% and surpassing 40 million residents in June 2023.

Immigration and in-migration have been significant housing drivers over the 30-year period, influencing markets such as Calgary and Edmonton, where population increased by almost 121% and just under 87%, respectively. The province’s Alberta is Calling advertising campaign highlighted low housing values and financial incentives for skilled workers, helping draw greater investment and job opportunities.

RE/MAX views reduced Canada Mortgage and Housing Corporation credit stress tests and faster, streamlined permitting processes and decisions as potential solutions to improve affordability.

Ma forecast varying market conditions, based on local factors and demand, for regions like Vancouver, Alberta and Halifax towards the end of 2025 and into 2026.

If interest rates continue to fall, he predicted, sales activity will rise but prices will remain where they, are now or decline slightly, because of the demand-supply imbalance.

“By New Year’s, I think that’s when the market will really pick up [in terms of] activities and prices,” said Ma.

The large availability inventory offers prospective buyers plenty of options to choose and negotiate, particularly in the condominium market, he added.

“There is no crystal ball in terms of when the market bottoms,” said Ma. “But if you look at these indicators, it is a good time for buyers to really look into buying in the next couple months,” said Ma.