Billions spent in infill and renovation over the pandemic years raised the overall value of residential housing stock and continues to support higher pricing on single-family homes despite downward market pressure in the countrys most expensive markets - Toronto and Vancouver , according to RE/MAX Canada .
The 2024 RE/MAX Canada Changing Landscapes Report examined the evolution of housing stock and trends impacting values in Canadas two largest real estate markets in recent years. RE/MAX found on-going renewal and revitalization efforts have had a substantial impact on housing supply and affordability, particularly in urban core areas. In fact, between 2019 and 2023, the national increase in renovation spending, including additions, alterations, upgrades and equipment, approached an estimated 300 billion , an eight-per-cent increase over the previous five-year period, with improvements in Toronto and Vancouver leading the way, according to Total Residential Renovation Expenditures data compiled by IBISWorld-Canada and based on Statistics Canada data.
During the same period, however, the value of residential building permits issued for single-family dwellings in the Toronto and Vancouver Census Metropolitan Areas CMAs between January 1, 2019 and December 31, 2023 sat at just over 27 billion , according to Statistics Canada. This is down almost 24 per cent from the previous five-year period, when more than 33.7 billion worth of residential building permits were issued in the single-family category. This trajectory is expected to continue in the coming years. In contrast, the value of residential building permits in the multi-family housing category climbed 60 per cent over the 2014-2018 period.
With all available tracts of land in the city committed to high-density construction, the single-detached home is quickly becoming a unicorn, says RE/MAX Canada President Christopher Alexander . Existing homeowners who cant find what they want in the market, will buy an older home in an area of their choice and renovate or build their vision. We expect this trend will strengthen in the years to come and serve to drive price growth in single-detached housing even further. There are a variety of variables at play, but renovation and revitalization is having significant implications for housing supply and affordability.
Revitalization remains one of the most underestimated factors behind escalating housing values. The landscape is changing as a staggering amount of money is funneled into renovation while infill is redefining neighbourhoods, particularly in areas where the value of existing structures has not kept pace with increasing land values. Case in point are wartime bungalows and smaller two-storey homes that continue to be primary targets, making way for custom builds that transform working-class neighbourhoods into up-and-coming hot pockets.
