Real Estate in Canada Eh?

On the eve of Canada’s 158^th birthday, let’s look at some real estate related facts that make Canada unique:

MORTGAGES

• one of the only countries in the world that requires a stress test for mortgage qualification; this is designed to protect both the borrower and the financial system from risks associated with interest rate fluctuations, changes in financial circumstances and economic instability
• often require a higher downpayment (5-20%)
• mortgage renewal is required once term is over (terms range from 6 months to 10 years); in the US, mortgages are amortized over 15-30 years, without any need to renew
• Canada’s mortgage industry is more tightly regulated at the federal level; it also has strict underwriting standards; in the US, regulation is more fragmented (either Federal, State or both) and as a result, there is a greater diversity in mortgage products being offered
• Debt Service Ratios are key to mortgage qualification, attempting to limit the amount of debt taken on by Canadians

CONSTRUCTION

• Due to our environment and climate, it would is no surprise that Canadian homes are more robust in their insulation and weatherproofing, including more advanced moisture barriers
• It is also common or typical of Canadian homes to have basements; not only are these needed to install utilities below the frost line, but offer additional living/storage space
• We see higher building costs in Canada due to increased labour costs (minimum wage laws, high unionization rates), regulatory fees and material prices
• Residential freehold construction in North America favours wood-frame construction – this is the most economical and sustainable choice for Canadians due to our supply of lumber/timber; brick and concrete are more prevalent in other parts of the world
• In Canada, we have a more fragmented construction industry with many small builders, where the US has larger, more consolidated building companies
• All new homes (and also those that have undergone significant re-construction) are enrolled in a mandatory New Home Warranty in Canada; while specific builders in different countries may offer something similar, our nation-wide coverage is unique globally

BUYING/SELLING PROCESS

• Mortgage application process is faster in Canada; an approval typically can be done in a week and a full closing of a purchase can be done within 2-3 weeks; in the US, their mortgage application process is more complex and time consuming, and can take 45-60+ days in order to get an approval
• US real estate agents play a larger role in closing a real estate transaction, but for the most part, title companies or escrow agents handing the closing; here in Canada, the buyer and seller are each represented by their own lawyer and the lawyers work together to close the sale transaction
• Canadian sellers pay the real estate commissions which are split between the listing and buyer brokerages; in other markets, buyers are responsible for paying the commissions to the buyer brokerage
• Buyers pay Land Transfer Tax which vary greatly worldwide:  0% Russia, New Zealand to over 11% Belgium; on average, Canadian buyers pay 1.8% which is amongst the lowest of developed countries
• In North America, it is common (but not mandatory) to use the services of a licensed realtor to facilitate the purchase/sale of residential properties, but in other parts of the world, notaries, legal professionals and government agencies are more involved in buying/selling homes

OTHER

• Canada’s home ownership rate is amongst the highest in the developed world (approx. 67-69%)
• Most sought-after features of a home for Canadians from a 2025 survey are:

1. a backyard (81% of survey respondents)
2. single-family (detached, semi or townhouse) style was preferred by 61%
3. renovated kitchen and bathrooms (59% of single-family, 68% of condo)
4. finished basements (42% of single-family respondents, for potential rental income or additional living space)
5. parking

For a myriad of reasons, people from around the world have chosen to make Canada their home. Whether arriving generations ago or only yesterday, we have come to live together as neighbours and fellow citizens. We may all differ in how we live and where we live, but WE are what makes Canada what it is – and I continue to be grateful to be Canadian! Happy Canada Day!