Canada is now in a technical recession. While many in the provinces felt the effects of a tightening economy across the board since the pandemic, hearing the words uttered across national media outlets, finally makes real what many Canadians and residents hoped to avoid.
When the world shut down in March of 2020, there was much uncertainty about where we would end up in the then near future. We experienced economic contradictions that baffled economists, wall street and global leaders. The stock market dropped 60%, but an immediate V-shaped recovery then led to market high after market high, shattering records amidst government bailouts and business subsidies. The price of lumber tripled. Food prices soared. Gas sold for as low as $0.69 per litre. Layoffs were minimal. Rent collection was halted. Who could make sense of such a time?
One just as shocking with far-reaching consequences was the price of homes. A home I tracked in Pickering, Ontario, listed for $550,000 in early 2020, saw neighbouring homes sell for double in 2022. Markham went from average home prices of around $800,000, to about $1,200,000. As the rising tides lift all boats, such egregious hikes were seen all throughout the GTA and across the provinces, led by Toronto and Vancouver markets.
There was a mass exodus to place like Edmonton and Calgary, Alberta, where city-dwellers sought refuge in more affordable markets, pocketing larger profit from home sales in the two more expensive markets, while pricing out locals. Speaking of pricing out locals, foreign direct investment was at an all-time high, with out of country buyers making cash offers for sight-unseen, no inspection required buying opportunities. It felt like a never-ending pool of riches for the real estate investor, that took no experience, no smarts, no coaching to be profitable.
Fast forward to June 2026, and we are seeing a totally different market. It seems like all the expected norms that should have been seen during a world-wide shut down, are all hitting us at once. Each month, there are more and more layoffs from once strong sectors of the economy. Industries such as Tech; where Toronto become a hub for popular giants; Banking and Finance as well as Construction and Developers, have massively cut down on manpower, in effort to salvage coins left in their once bountiful purses. If the leaders of innovation, money security and nationwide development slowed down so abruptly, just ahead of an announced technical recession, then it may mean that Canada is in for much worse before the eventual turn around.
We’ll discuss the hope of homeowners in our next post. Get in touch with a MECA team member to discuss your capital needs in a restrictive environment. We give your request the ‘banker’s evaluation’ to ensure it is presentable the first time. Don’t leave it up to chance.
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