If the Conservatives Win, What Happens to Canada's Housing Market?

As of March 2024, a change of federal government would not move Canada's housing market in the short term. Prices and sales follow interest rates and supply and demand, not election night. The Conservative plan to raise city construction by 15% a year, and a slower immigration pace, are the two levers that would matter, and both work slowly.

This is written in early March 2024, with Canada's 2025 federal election set at the time for October 20. I am Moe Asgarian, a Broker in Toronto, and clients ask me this constantly: if the Liberals lose and the Conservative party takes power, what happens to housing here? Nobody can forecast the future precisely, but we can look at the numbers and at the plans themselves.

A change of government does not move the market in the short term

It is not the case that a new party takes power and a few months later we suddenly see sales or prices move up or down. The housing market depends on a set of factors that have little to do with who holds the seats. As of March 2024, that is the first thing I want you to take away: do not expect the market to shift seriously the day after the election. Change in this market comes mostly from monetary and fiscal conditions. In early March 2024 the race between Justin Trudeau of the Liberal party and Pierre Poilievre of the Conservative party is continuing, and there is a real chance the Conservatives win and Trudeau stops being Prime Minister after eight years.

Interest rates decide who buys, in Toronto and everywhere else

The truly important factor is the bank interest rate. The rate is what makes a person buy a home or hold back. And in the end, price is set by that same supply and demand. In March 2024, that is the lens I use with clients in Toronto who ask whether they should wait for a political outcome. Ask instead what borrowing will cost you, and how many competing buyers there are for the house you want.

The Conservative pitch: build homes, cut red tape

The main criticism of the Justin Trudeau government, as of March 2024, is that it has not managed to implement policies that increase the number of homes in Canada's most populous cities, for ordinary residents, for first-time buyers, and for families who want to move up to something larger. The Conservative slogan is to build homes and cut red tape. Their argument is that the Liberal government made life hard for builders, that the rules do not make it easy to build, and that cutting administrative steps would get more homes built in Canada. They believe this plan can solve the housing problem. The plan itself, as described in March 2024, is to raise the volume of construction in cities by 15% a year.

The catch builders raise: nothing gets built unless it pencils

When that plan was introduced, some analysts made a point worth repeating: if a builder has no incentive to build a new home, the reason is that the interest rate is high. You can clear away a lot of obstacles and still not get the homes, because a home gets built when it makes economic sense for the builder. What I find interesting is that both the Liberals and the Conservatives plan to raise the number of homes, and both want to do it by giving budgets to cities. So if the Conservatives take office, what changes, as of March 2024, is how that money reaches the cities. What actually has to be fixed is the cost of construction coming down and an economy healthy enough to build into.

Immigration is the indirect lever on demand

The third effect is indirect. It is predicted that Canada's immigration intake comes down, and that Canada stops taking newcomers at the pace it has kept over the past few years. Honestly, that is the decisive piece. In broad terms, as of March 2024, if the Conservatives win we should expect the heavy demand of recent years to ease somewhat, the rental market to get calmer, and the resale market to get calmer with it. For Toronto, where so much of that demand lands, that is the change I would watch for, not anything announced on election night.

If you want to talk through what all of this means for your own plans to buy or sell in Toronto and the GTA, fill out the form at the bottom of this page or book a free consultation. Stay well and take care.