Mortgage experts weigh in on why immigration isn’t the main culprit in Canada’s housing woes

• Canada's housing market faces challenges due to limited supply, zoning regulations, and rising construction costs, not primarily foreign buyers
• Experts call for government intervention to re-zone land and build infrastructure to best address the housing crisis effectively

Decoding the market: While our neighbors to the south fiercely battle with a different flavor of immigration, our issues in Canada are no less impactful. The effects of immigration on the Canadian housing market are often misunderstood, under-understood, and scapegoated. But when trying to decode exactly what's wrong with our supply, everything is fair game and worth discussing.

"While Canada tops the list of countries with the most international buyers at 13%, the actual impact on real estate prices is minimal," says Ringo So, Managing Partner and mortgage broker at 360Lending. 360 is Canada's first digitally-native mortgage brokerage, offering a suite of instant tools to better track and improve financial wellness. So sites CMHC data that shows only a small percentage of real estate purchases were made by non-Canadians, and are they more than twice as likely to be renting versus buying.

Supply and demand: Canada’s housing supply issues are driven by an inability to keep up with demand, melded with limited inventory, zoning & development regulations, and rising construction costs.

"This issue is only going to get further magnified over the next 3 to 5 years," says Marshall Tully, owner and managing broker of Ontario's Tully Mortgages. Tully believes there's enough inventory hitting the market in the near-term from existing projects hitting completion, investors selling money-losing rental properties and AirBnB's, and homeowners that are financially stretched thin and will be forced to sell. "But when all the projects that have been put on hold for the last 12 months, and probably for another 12 months were scheduled to hit the market, we are going to see a significant shortage of supply."

A partial picture: "I would argue that foreign buyers are far from the sole problem affecting the Canadian housing market at this time," Tully says. While they may drive prices up in certain market segments - such as buying property to park money in Canada as an investment, the data has shown that this has been a very small percentage.

So agrees, shifting blame on less-than-stellar government action. "Our current housing supply crisis is caused by our government's policy ineffectiveness. The current stress test and foreign buyers ban are policies intended to curb demand but do nothing to spur supply."

The solve: Both So and Tully agree that a strained infrastructure is both the issue and potential solution. "There needs to be significant government intervention to re-zone land, incentivize builders, and build infrastructure to encourage population growth away from the crowded city centers," So says. But the situation today seems to be worsening and hitting Canadians from every angle. The issue transcends any single explanation (immigration or otherwise), and highlights a full-scale breakdown of the services required for society to function. Tully agrees, saying, "You don't have to look any further than the services we all rely on daily - from medical to transportation, are bursting at the seams."