What Carney can do

In his speech to uni students last night, the PM talked about housing. The budget coming November 4th will spill out billions and billions more for residential construction. It will be the successor of the ‘Building Accelerator Fund’ under which the Trudeau government spent $8 billion and accelerated dismay.

Will it be different this time?

Carney says the volume of homebuilding will double, to 500,000 units a year. But that may take a decade. He wants building times halved and costs dropped a fifth by going modular. But we don’t have that manufacturing capacity yet.

Like every other politician in Canada, at every level, the feds have only one card to play, which is increasing supply. That might work for rental units, keeping lease rates reasonable. But for middle-class housing, it’s a big fail. The kids in the lecture hall last night don’t want glorified trailer parks. They want urbanity and the burbs. Garages and paved driveways. Soft-close kitchen cabinets. Curb presence. Or a nice condo n a building with EV chargers and a concierge.

The mistake this prime minister makes (like the last guy) is pretending Ottawa can fix real estate. It can’t. It’s not even in the feds’ lane. And yet we’re about to throw another $30 billion into mythical ‘solutions’ because the Zees, Alphas and Mills have been told houses cost too much and, ‘it’s the government’s fault’.

Time for more reality, kiddos. Nobody’s coming to save you.

Vancouver now has more than 2,500 empty, unsold, ready-to-go condo units. The situation is so messed up that some developers are calling for a BC government bail-out while pleading with the feds to lift the ban on foreign buyers – hoping somebody, anybody, will show up with an offer.

In the GTA, as we’ve detailed with nauseating repetition, it’s a disaster. Over 21,000 housing units are on the market. Sales are not horrible – they’re almost non-existent. Plus another 30,000 resale units, with the autumn market falling like so many deceased leaves.

But that’s just the surface troubles. Underneath lies the real danger. More than 2,200 projects in the GTA alone are approved but stalled, cancelled or being abandoned by the industry. That constitutes 1.2 million housing units. Seriously – 1,218,626 homes. Unbuilt. Not because government support is wanting, but because there is no market. No buyers.

So how does adding 500,000 more units a year change that, if we already have a surplus monumental and unyielding enough that the builders themselves are throwing in the towel?

Houses in big cities and suburbs cost so much to build – land, labour and materials – that folks cannot afford them.

There’s more. According to a report from Civic Action, new rental buildings are at 50% occupancy. And while rental rents have been on the decline, leases are still unaffordable for most of those who need rented premises. Investors who bought condos for tenants to occupy are bailing because costs far exceed income. More than 70% of landlords who entered the market in the last few years are in negative cash flow.

They want out. Dropping the rent will just increases their losses. Condo values have dipped, thus the owners are losing equity at the same time. Many want to sell, but there are no buyers. And a massive glut of condos means the odds of finding one are, well, nil.

There’s no evidence, anywhere, that throwing more units into this vortex will affect real estate valuations or make it cheaper for the kids in Carney’s audience to get their hands on a bungalow in Etobicoke or a Vancouver special. Poor Gregor, the housing czar, said as much the other day. He told MPs that Ottawa’s blitz may bring down the average of house prices – but it won’t make the average house cost less. He’s right, of course.

Only Mr. Market can do that. The factors there are employment, interest rates and how we tax houses. If Canada wants cheaper homes, all three have to increase. And we know that ain’t happening.

The best thing our new PM can do for real estate is to stop talking about it.

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Source: https://www.greaterfool.ca/2025/10/23/what-carney-can-do/