Soaring housing prices in Canadian cities are limiting the ability of residents to move for job opportunities, according to the Canada Mortgage and Housing Corporation (CMHC). The federal housing agency’s analysis indicates that a 1% increase in housing prices in a destination city leads to a 1% decrease in the number of people relocating there.
Since 1990, the percentage of Canadians moving annually has dropped significantly, from 17.8% to just 10.1% in 2020. While factors like population aging and technological changes play a role, high housing costs are also a significant barrier, said CMHC deputy chief economist Aled ab Iorwerth.
The inability to afford housing in major cities is impacting both current workers and newcomers, limiting skill development and economic growth. In response, employers in cities with high housing costs are forced to offer higher salaries, which raises business expenses and hampers productivity.
CMHC’s analysis highlighted that increasing housing supply in cities like Toronto could help accommodate population growth and keep prices more manageable. Cities such as Calgary and Edmonton have remained more affordable due to better housing supply relative to their population growth, offering valuable lessons for other urban centers.
