Here's Why Canada's Housing Market Is So Hot & What's Probably Going To Happen Next

The Canadian housing market has been on a major upward trend over the last few years. Buying a house in Canada is requiring more and more money. But why?

To understand what is going on, Narcity sat down with real estate expert and realtor Trish MacKenzie to understand what exactly is making the Canadian housing market so high.

The first thing MacKenzie broke down were the two things that she says are fueling the current costs of the housing market. What she calls "soft" and "hard" factors.

"Hard factors are the hard numbers that you cannot control," explained MacKenzie.

These include things like the Bank of Canada interest rates, the cost of materials, supply chain issues and basically anything that affects the value of a buyer's dollar that's not in their hands.

On the other hand, "soft factors are the perceptions and emotions that those trying to play in the market need to understand."

These are the more malleable things, such as desperation or exhaustion in the market, things that drive the prices up and down respectively.

So, what we have now is a marriage of these two factors that is making housing affordability in so many Canadian cities so low.

But that is not all doom and gloom. When the market is "hot"' like it is now, it provides buyers with a shift that could be helpful in getting them in a better position for home ownership.

For example, that aforementioned buyer's exhaustion is slowing folks down and resulting in a more educated buyer in a lot of cases.

"This exhaustion and education is resulting in less buyers, less offers, more time on the market and steady (but levelling) sold prices," said MacKenzie.

And, that's not the only thing that could level out the price of housing.

"As prices go up, sellers follow suit by trying to cash in on the up," explained the real estate expert, "increasing inventory and creating an ease on supply."

But, like anything, there's no surefire estimate.

MacKenzie is quick to point out that while this is true, "the equity growth that homeowners have seen, even in the past two to five years, gives people the ability to tap into more funds to support the price growth."

But that's not the only thing that could "right" the expensive ship that is housing in Canada. There are a lot of government plans and initiatives that have a specific focus on upping the supply of housing, which is expected to lower the price.

These programs, such as the proposed Housing Accelerator Fund and the Rapid Housing Initiative, could also mean lower prices and more options for future homebuyers.

If homeownership still looks far off, MacKenzie recommends a rethink of your attitude to buying a home.

"While what you can afford right now may not be the dream house, it is a step towards the final goal."