The federal government has added 56 properties to a new public lands bank of locations that are suitable for long-term leases so developers can build housing, a move the Housing Minister says will help boost the supply of homes Canadians can afford.

Sean Fraser made the announcement Sunday in Halifax just ahead of a three-day cabinet retreat intended to prepare for the upcoming fall sitting of Parliament.

“Making public lands available for home construction is going to reduce the cost of construction and in turn reduce the cost of living,” Fraser said.

Former military bases, Canada Post sites and federal office buildings are among the properties currently included in the public lands bank, many of which were previously set aside for sale as they are no longer in use.

The new plan is to offer most of them for long-term lease rather than one-time sale to keep the lands in public hands and ensure housing built on them remains affordable.

The current list includes properties in 28 municipalities in seven provinces but will grow over time through an ongoing review of underused or vacant federal land and buildings.

Five properties — first identified in the April budget — are now moving into the development phase with the government asking developers for expressions of interest or requests for proposals.

Four of them are on former military bases in Calgary, Edmonton, Toronto and Ottawa, while the fifth is the site of a former National Film Board building in Montreal.

Conservative housing critic Scott Aitchison dismissed the latest plan as a repeat of something the Liberals have been promising to do since 2015. The Tories pointed out both the 2015 Liberal platform and the 2017 federal budget promised an inventory of public lands to make more properties available for affordable housing.

“It took nine years after he promised to build homes on federal land for Justin Trudeau to actually identify the few parcels of land he would build on,” Aitchison said.

In a video statement shared to social media, Prime Minister Justin Trudeau took a shot at Pierre Poillievre over the use of federal land, saying “the Conservative Party leader wants to sell it all off to make a quick buck. That does nothing for you.”

The Conservative housing plan involves the sale of 15 per cent of all federal buildings to be turned into homes.

Fraser said construction of housing on the first five properties could begin in the first half of 2025.

Housing will be a key issue at the cabinet retreat as Canadians continue to grapple with high costs and limited availability.

The annual end-of-summer cabinet session comes three weeks before Parliament returns for the fall sitting and is likely the last such event for this cabinet before the next election.

It may be the last real chance this government has to reset itself with voters before asking them for another mandate.

The next election has to be held by October 2025 but could happen any time before then. The cabinet will get an update on the status of Prime Minister Justin Trudeau’s supply and confidence agreement with NDP Leader Jagmeet Singh.

That deal has helped the Liberals survive all confidence votes since 2022 with the NDP’s help, in exchange for the Liberals implementing NDP priorities including dental care and the start of a national pharmacare program.

That deal is supposed to last until next spring but the NDP are under more pressure to walk away from it, particularly following the Liberal’s move last week to ask the Canada Industrial Relations Board to begin binding arbitration between the Teamsters union and the country’s two big national railway companies. Both Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) locked out workers on Thursday at midnight amid stalled contract negotiations with thousands of employees represented by Teamsters. All freight trains and some commuter traffic came to a standstill during the ensuing work stoppage.

Trains are supposed to be returning to more normal schedules Monday but it will take time to restore normal service. The Teamsters union has also vowed to fight the decision in court, and president Paul Boucher said Sunday he was en route to Halifax with other labour leaders to “protest this decision at the Liberal caucus retreat.”

The dispute is the latest in a string of supply-chain and labour issues the Liberals have or continue to face, including at ports, railways and airlines.

Post-Covid-19 supply chain disruptions contributed heavily to high inflation that has also led to an affordability crunch in Canada and many places around the world.

Canada’s housing crisis — driven by high interest rates and rapid immigration that exceeds housing supply growth — has added to the affordability crisis with average home prices and rents rising sharply in the last five years.

Last year’s cabinet retreat in Charlottetown had a heavy focus on housing, but the Liberals left that session without anything concrete to announce. Their poll numbers continued to suffer as they failed to convince Canadians they have the recipe to fix a problem that has become critical under their watch.

They announced the broad strokes of their new housing plan in April, including new protections for tenants, loans to build more apartments and a spate of programs to massively expand the number of affordable units available.

Former Liberal chief of staff Marci Surkes, now the chief strategy officer at government relations firm Compass Rose, said housing will be central to this retreat and the Liberal agenda going forward.

“Frankly the government has certainly made significant policy moves and investments since last year and some of them are beginning to bear fruit, but the reality is that the focus on supply needs to remain in place,” she said. “There is no real relief yet.”

The government intends to spur construction of 3.87 million new housing units in the next seven years.

It’s estimated between 3.1 million and 3.5 million new units are needed by 2031.

This retreat is also expected to see the government discuss immigration and temporary foreign workers, industrial strategies including for the electric vehicle market, child care and Canada-U.S. relations.

The meetings start on Sunday evening with a working dinner and a discussion about global issues with Jake Sullivan, national security advisor to the U.S. government.

Two full days of meetings will follow. Monday will see cabinet hear from experts and advisers on housing, immigration and middle class economics. They will include Kevin Lee, CEO of the Canadian Home Builders’ Association, Sen. Hassan Yussuff, the former president of the Canadian Labour Congress, and Maya Roy, the former CEO of the YWCA Canada.

Tuesday’s discussions will shift to Canada-U.S. relations, with the upcoming presidential election holding major significance for Canada which relies heavily on U.S. trade for its economic stability. Canada’s U.S. Ambassador Kirsten Hillman will address the cabinet Tuesday, as will former ambassadors Frank McKenna and David MacNaughton.

This report by The Canadian Press was first published Aug. 25, 2024.

Falling mortgage rates haven’t yet had a a significant impact on real estate activity, according to recent data.

National home sales in July were down 0.7% from the previous month, the Canadian Real Estate Association reported today. While activity remains 4.8% higher compared to a year ago, sales are still down roughly 9% below their pre-pandemic level.

Slow sales have led to a build in available inventory, with 183,450 properties listed for sale as of the end of July. CREA says that’s up 22.7% from a year ago, though still 10% below the historical average.

The sales-to-new-listings ratio continued to ease in the month to 52.7% from 53.5% in June, which put some downward pressure on average prices in certain markets. The non-seasonally adjusted average national home price of $667,317 is down 4% from June and mostly unchanged from a year ago.

The MLS Home Price Index (HPI), which adjusts for seasonality, edged up 0.2% month-over-month but remains 3.9% lower compared to last year.

“Stability describes the Canadian housing market as we push through the heat of summer,” noted BMO’s Robert Kavcic. “Sales volumes are holding steady at reasonable levels, listing flow is solid but not saturating the market (with an exception or two), and prices are steady across most markets.”

Regionally, Alberta’s housing market remains relatively tight, though there has been a notable softening. Sellers’ markets continue to thrive across the Prairies and Atlantic Canada, thanks to affordability and significant inward migration, Kavcic added.

Vancouver and Montreal are largely balanced and have posted strong price performance over the past year. Conversely, Ontario shows more signs of weakness, with various areas experiencing buyers’ markets.

“Vancouver and Montreal look mostly balanced, and are posting better-than-average price performance over the past year,” he wrote. “Ontario remains the soft spot, with buyers’ markets still scattered across various areas of the province.”

Stage set for higher home sales later this year

While sales remained subdued last month, activity is expected to pick up over the remainder of the year with interest rates expected to continue their downward trajectory.

“We view July’s result as a speed bump on the way to a stronger second half showing for sales and prices amid a resilient economy, robust population growth, and falling rates,” wrote TD’s Rishi Sondhi. “August’s data will be telling, given that rates have continued their decline into this month.”

CREA chair James Mabey added that the “stage is increasingly being set” for a return to a more active housing market.

“At this point, many markets have a healthier amount of choice for buyers than has been the case in recent years, but the days of the slower and more relaxed house hunting experience may be somewhat numbered,” he said.

BMO’s Kavcic notes that the ongoing subdued sales were “entirely expected” since the recent Bank of Canada rate cuts have so far only provided relief to a limited number of borrowers.

“Few Canadians were using variable [mortgages], so the early phase of rate cuts wasn’t going to provide much relief,” he explained.

As of the first quarter, 12.9% of new mortgage borrowers opted for a variable-rate mortgage, according to figures from the Bank of Canada.

“Now, with the bond market building in more aggressive near-term easing in both the U.S. and Canada, fixed mortgage rates could continue to drift down,” Kavcic continued, adding that if we head into the next spring housing market with mortgage rates at around the 4% level, “things could get more interesting.”

“For now, the market remains very stable,” he said.

Cross-country roundup of home prices

Here’s a look at select provincial and municipal average house prices as of July.

*Some of the movements in the table above may be somewhat misleading since average prices simply take the total dollar value of sales in a month and divide it by the total number of units sold. The MLS Home Price Index, on the other hand, accounts for differences in house type and size and adjusts for seasonality.

This article was written for Canadian Mortgage Trends by: