With an unprecedented rise in real estate prices, Toronto, Canada’s largest city, is facing a worsening housing crisis that has cast heavy repercussions on the lives of its residents, and its effects have extended to the nearby urban centers.

This crisis has multiple facets, the most prominent being a historic rise in home prices and rental values, alongside a severe shortage of affordable housing, a situation that intensifies the real estate crisis the country is experiencing in general.

This situation threatens the image of the "Canadian Dream," with data from the non-profit Angus Reid Institute indicating that 3 out of every 10 Canadians are considering leaving their provinces due to the inability to afford housing.

Soaring Increase
A report published on the real estate website Zoocasa outlined figures indicating a tremendous jump in house prices in Toronto over the past five years - relying on data from the Canadian Real Estate Association - where the increase reached 42.8%, as the price of a standard home jumped from CAD 746,500 (about USD 543,000) in 2019 to CAD 1,065,800 (about USD 776,000) in 2024.

The rental market has not fared better, as a national rental report issued in mid-2023 by two major real estate firms in Canada stated that as average rents across the country rose by about 20% between 2021 and 2023, Toronto experienced a rise of 41%, the second-highest rate in the country at that time.

This increase is described by some reports as "stunning," as the average rent for a one-bedroom apartment was CAD 1,600 in 2013, and soared to CAD 2,503 in 2022.

The Newcomers' Dilemma
Some specialized reports indicate that housing prices remained relatively affordable from 1970 until the mid-2000s, but the affordability of housing has deteriorated significantly since then.

This sharp development is driven by a complex set of factors, primarily the continuous increase in Toronto's population along with rising waves of newcomers to the country, with Canadian immigration data confirming that most individuals in this demographic tend to settle in urban areas.

In this context, the Greater Toronto Area alone has welcomed up to 35% of newcomers, with its population increasing by about 880,000 from 2013 to 2022 to reach 7.2 million, and it is expected to exceed 8.3 million by 2031.

COVID-19 Hits the Real Estate Market
Another paradox associated with the growing influx of newcomers to Toronto is what experts describe as a severe labor shortage in the construction sector, negatively impacting efforts to expand housing availability to help alleviate the current crisis in the real estate market.

Workers are retiring faster than they can be replaced, and this challenge has been exacerbated by the COVID-19 pandemic, as some construction workers have switched career paths or retired early, while Canada needs over 500,000 additional construction workers to build all necessary housing by 2030.

A study by the Toronto Regional Real Estate Board, which included over 7 million residents of the Greater Toronto Area, indicates that comparing those living in affordable housing with others reveals that 29% of the population and 23% of residents spend between 30% to over 50% of their income on housing costs, which significantly impacts their well-being and places them under the influences of financial insecurity, stress, and an inability to afford basic needs.

Meanwhile, some observers warn that the rise in housing costs may drive many to leave the city, resulting in a loss of workers in vital sectors that are desperately needed, such as the healthcare field.