Mark Carney’s New Housing Minister Says Prices Don’t Need to Fall – Is This True?

Do prices need to fall to curtail Canada’s housing affordability crisis? Not quite, says the federal government’s new housing minister.

Speaking to reporters ahead of Prime Minister Mark Carney’s cabinet meeting on May 14, new Housing Minister Gregor Robertson says the objective is to bolster supply rather than lower home prices.

“I think that we need to deliver more supply, make sure the market is stable,” the former Vancouver mayor said to the media. “It’s a huge part of our economy, but we need to be able to deliver more affordable housing.”

Robertson also defended his mayoral record from 2008 to 2018. During his tenure, the average price for single-family and semi-detached homes surged nearly 200 percent across the Metro Vancouver area.

But, according to Robertson, this has been common across the Canadian real estate market.

“I wasn’t getting the help I needed from the federal government when I was mayor, or the provincial government, of all stripes,” he said. “We need, as a government in Ottawa, to be delivering and partnering with cities and provinces.”

After his comments created a buzz on social media, Robertson doubled down on his assertion. “The question I answered was about reducing the price of a family’s current home, which, for most Canadians, is their most valuable asset,” he later said on the social media platform X.

Scott Aitchison, the Conservative shadow minister for housing, disagreed. “Minister Robertson says home prices don’t need to come down – he couldn’t be more wrong,” Aitchison responded on X.

The prime minister, who was in Rome for Pope Leo XIV’s inaugural mass, was pressed by reporters on housing prices. Carney ostensibly shrugged off Robertson’s comments, telling the press that it is not a “yes or no” question of whether home prices need to come down or not. Instead, he reiterated his Liberal government’s plan to cut the GST tax and accelerate the pace of home construction.

“We are talking about time horizons,” Carney said.

“Once we increase the rate of home building as a country, then that is going to make home prices much lower than they otherwise would be, but that’s a medium-term effect.”

Ultimately, according to Carney and other officials, the country needs “more affordable” homes.

One expert thinks that home prices need to decline in order to help middle-income homebuyers in Canada.

Can Canada Afford Lower Home Prices?

According to the Canada Real Estate Association (CREA), the national average home price was around $680,000 in April, up approximately 38 percent from April 2019. As home prices remain elevated or inch higher, data indicate that homeownership is immensely tied to the country’s economy and household wealth.

First, in recent years, housing has accounted for a larger share of Canada’s GDP. While it has fluctuated, the peak occurred in the first quarter of 2023, when it was nearly half of economic growth.

Second, Statistics Canada reported this past spring that real estate equity accounted for 42 percent of households’ total wealth in 2023. For younger households, the number is about half.

“As housing affordability deteriorated, the barriers to homeownership have become increasingly prohibitive, particularly for those without familial support,” the report stated.

“In 2019, 3 in 10 homeowners reported receiving an inheritance at a median value of $67,000, while 2 in 10 renters received a median value of $33,000. As home values appreciated strongly throughout the COVID-19 pandemic period, so too did inheritances for homeowners. By 2023, the median inheritance Canadian homeowners received had risen to $85,100.”

Suffice it to say, the Canadian economy hinges on the Canadian real estate market.

Still, if the new government aims to restore housing affordability, a price correction is necessary, says Mike Moffatt, founding director of the Missing Middle Institute.

“I think most reasonable Canadians understand that homes will be forever out of reach for most young people, in much of Canada, at today’s prices,” Moffat said in a Substack post. “I believe the issue is deeper and more structural. It is due to the Liberal government never articulating a vision, even to itself, of the future of middle-class housing.”

Carney has vowed to make housing one of his government’s top economic priorities. To date, he has proposed expanding homebuilding, providing financing to prefabricated home builders, and capping immigration levels. But will these efforts succeed in the primary goal of delivering housing to middle-class families?

“The government’s goals do not address whether the middle class should be able to afford to own a home (rather than rent), where these homes would be located, or whether they are large enough to raise a family,” Moffatt added. “This leads to government objectives like building 500,000 homes without consideration of their size, location, or price point and a grab bag of disconnected policies like removing the GST for first-time homebuyers.”

Economists at Scotiabank have assessed Canada’s housing situation over the last several years. They concluded that poor productivity, lacklustre inventories, price inflation (costs for labour and materials, for example), and high immigration levels contributed to today’s elevated home prices.

In fact, the bank’s experts noted that if supplies were not tight and population growth hovered near its long-term average, home prices would be below $616,000.

“The key takeaway from our work is that supply constraints remain a considerable obstacle to affordability. It is simply impossible for home prices, and affordability, to return to pre-pandemic levels without a substantial increase in productivity,” the Scotiabank economists wrote in a March 2025 research note.

Will Home Prices Keep Rising?

Scotiabank expects housing costs will rise by 0.4 percent this year and 7 percent in 2026.