The agenda

Well, this is news.

House sales in Montreal (the second-largest market in Canada) dropped 15% last month. Single-family home deals were off 17%. Detached house sales crumbled 22%. And prices fell 3%.

So what? Doesn’t this just mirror what happened in January in Vancouver, Victoria, Calgary, the GTA and the southern Ontario market?

Yes, exactly. And that’s the point. Montreal has been the outlier in Canada’s real estate rot over the past year – with continually strong sales and price appreciation. In fact, the place is an absolute relative bargain, where you can buy decent digs for the price of a garage in Kits – about six hundred thousand.

So, yes, it’s officially in every major urban centre now. The pandemic has arrived. The meme spreads. So many people have convinced themselves that it’s a bad time to buy that, in fact, it becomes a bad time. Real estate rolls on confidence, and these days we have a deficit of it. A nation wussified.

As detailed here yesterday, the GTA is turning into the poster child for realtor misery. Sales of 2,912 – in a sea of almost seven million people – were the worst resale numbers since the 2008 credit crisis. At the same time over 10,000 new listings hit MLS – so supply is overwhelming demand, which explains a sustained erosion in prices (SFHs down 26% since the ’22 peak).

New properties on the market doubled in a few weeks. TYhe average time taken to sell has now been pushed to almost three months. (A house down the street from me in this corner of the region has been on MLS for over 600 days.) Prices in the urban area are back to 2021 levels.

By the way, Americans face the same situation. The average age of first-time buyers in both countries is astonishingly close to middle age, knee replacement surgeries and thirsty underwear. That’s 40 years old in America and Toronto and a geriatric 46 in Vancouver.

Here’s the dilemma. Politicians really, really, really don’t want house prices to crash. How could they? About two-thirds of people in both countries have real estate, and this block of “homevoters” basically rules the political landscape. Crash their equity, and you crush their vote. Nobody’s gonna do that, kiddos. Face it.

Did you hear what Trump said about lowering the price of housing?

“I don’t want to drive housing prices down,” he stated during a public cabinet meeting. “I want to drive housing prices up for people that own their homes.”

And how about our guy? Poor Gregor Robertson, the housing minister, is arguing for exactly the thing priced-out homebuyers don’t want: stability.

When asked if real estate prices need to fall, he said, “No”. Instead, he insists Canada needs more supply (echoing what American politicians are saying). Appearing before a committee of MPs recently, Roberston said average prices may drop as cheaper homes are built, but that does not mean individual real estate values will decline. Seriously. He did that.

In theory, it’s reasonable. Throwing up fields and fields of prefab boxes on abandoned federal lands might lower overall property values – a tiny amount. But so far that’s not happening.

Construction is moribund. Builders are going paws-up. Projects cancelled. Starts have crashed. Housing goals have vanished just months after they were set. New home prices have barely budged despite a two-year supply of unsold inventory. There has been no magic drop in the cost of constructing homes, and it will take years (and billions) for the feds to churn out the latest version of the ‘Victory Homes’ that Ottawa produced post-WW2.

Meanwhile, voters don’t want a real estate black hole. Economists don’t relish it, either – with real estate representing a big chunk of the country’s GDP. A massive amount of middle class net worth sits in residential properties, with the Big Banks holding more than $2 trillion in mortgages – which is three-quarters of all the debt consumers have.

Nobody can afford a property plunge. And nobody should be naïve enough to want one. Or expect it.

In the US Trump has proposed a goofy 50-year mortgage, instructed lenders to be more flexible in handing out debt, lobbied for a national building code and is pushing the central bank to seriously drop interest rates.

In Canada we let people dip into tax shelters to buy real estate, give buyers special tax credits, have vastly lower mortgage rates and are throwing billions into subsidizing construction. In some places (like NS) downpayments have been pushed all the way to 2% – so people can get even more into debt.

But nowhere are there policies in place, or contemplated, to smash prices. In contrast, every government is helping people buy, to stimulate demand. Stability, baby.

It’s all you need to know.

About the picture: “Thank you for your daily support,: writes Dan. “The world is becoming crazier by the day. Here is Zorro deciding that that knight on the corner of the board looks better on the table.”

To be in touch or send a pucture of your beast, email to ‘garth@garth.ca’.

Source: https://www.greaterfool.ca/2026/02/05/the-agenda-4/