Falling home prices could mean trouble for Canada's GDP and the Home of the Week: Canadian real estate news for the week of June 13

Globe and Mail

17 hours ago

This week, a Toronto real estate developer is getting back in the prefabricated home business. Plus, why Canada can't lean on the housing industry for economic growth, and one property worth a look.
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With tariffs, low oil prices and an existential threat to Canada's auto sector, the economy could use a quick fix to stimulate some growth. But, as Tim Kiladze writes, there's a problem: the sector that Canadian policy makers often turn to for a sugar high, housing, has only the faintest heartbeat. Despite falling interest rates, home sales are still stagnating, and Canada is coming to terms with how interconnected the economy has become with a growing housing market. The trouble isn't simply that fewer people are buying homes, subduing growth. A weak housing market could actually make Canada's GDP shrink — although Kiladze says not relying on housing to juice up growth could lead the country to actually come to grips with some deeper structural problems.
In the late 1990s, real estate developer Peter Gilgan attempted to start a prefabricated homes business, only to shutter the venture about a decade later. But now, as Prime Minister Mark Carney announced his plans to harness prefab homes in an effort to speed up home building, Mr. Gilgan says the climate appears to be more conducive to giving it another try. As Sean Silcoff and Rachelle Younglai write, Mr. Gilgan's new venture, Stelumar, will focus on making modular parts and components for six-storey condo buildings with one- to three-bedroom units.
Younglai told me that many politicians likely believe prefab homes can alleviate Canada's housing problem because accelerating the pace of home building sounds like an easy fix, but it might not address the whole picture.
'It is true that it can take years to build homes,' she said. 'But a significant portion of that time is not in the construction but in getting the proper zoning, government approvals, local buy-in, new infrastructure and building permits.'
But she said that Canada's harsh weather does tend to slow down or stop construction, so homebuilding could speed up if parts of it are moved to an indoor factory.
The government is proposing to cut its 5-per-cent GST entirely for first-time buyers who are purchasing a new or substantially renovated home valued at $1-million or less, and to partially cut the GST for new homes valued between $1-million and $1.5-million. As Salmaan Farooqui writes, the subsidy of about $27,000 could be provided to more than 71,000 prospective homebuyers.
Farooqui told me that experts believe there will be some positive impact on sales, but it'll be a pretty limited one. 'That could be a good thing: too much stimulus would just bring prices up and negate any benefit of the tax cut,' he said.
Rates shown are the lowest available for each term/type and category (insured versus uninsured) as of market close on Thursday, June 12.
As the housing market slows down across the country, sellers have had to get in an effort to make a sale. This 70-year-old bungalow near the MacKenzie Ravine and North Saskatchewan River in Edmonton was priced under $700,000 to draw a crowd. More than 30 buyers booked individual tours with others attending an open house event. In the end, it sold for $30,000 over the asking price — in no small part due to its unique design. The home has a mix of original and modern features, including mid-century modern details such as a low sloped roofline and exposed wood.
17 Collins St., Yarmouth, N.S. – Full gallery here
This four-bedroom heritage home is one of only two mansions built in Nova Scotia in the Queen Anne Revival style. The house has a storied history — first built for one of Yarmouth's most prominent doctors, then used by the federal government as a barracks for the Canadian Women's Army Corps, then converted in a public library, and finally turned into rentals and a bed and breakfast. The owners said it took three years to restore the house to its former glory. The property welcomes visitors through a veranda that overlooks the historic district of Yarmouth. It wraps around the front of the house and connects to the entrance of the conservatory. Inside, a French glass door opens to a conservatory that has floor-to-ceiling stained-glass windows and a skylit roof.