Bureaucracy and bad policy, not demand, are driving up housing prices
Imagine putting down a hefty deposit on a $1 million pre-construction condo only to find out at closing that your unit is now worth $800,000.
That’s a $200,000 shortfall. Since banks lend based on appraised value, you’re left with two choices: cough up the extra cash or walk away and kiss your deposit goodbye.
Canada’s housing affordability crisis isn’t just about rising prices—it’s about a broken system that can’t keep up with what people actually need.
This isn’t an isolated nightmare. In major cities across Canada, appraisals are landing 10 to 30 per cent below contract prices. And it’s exposing a deeper dysfunction in our housing market.
Toronto alone has more than 24,000 unsold new condos. Units that once attracted investors and young professionals now sit empty while developers keep building more of the same—small, overpriced boxes nobody’s clamouring for. Meanwhile, buyers are hunting for larger, livable spaces they either can’t afford or can’t find.
Yet despite the demand for larger, livable spaces, the system keeps producing what no one really wants.
How did we get here? It’s not just about supply and demand. It’s about municipal red tape and sluggish approval systems that choke off the market’s ability to respond to changing needs.
If we’re serious about affordability, we have to fix this bottleneck. That starts with slashing approval timelines so homes can actually be built where and how people want them.
These delays don’t just frustrate builders: they limit housing supply, inflate prices and leave Canadians competing for homes that don’t fit their lives or budgets.
Across the country, getting from concept to construction can take years. The planning grind—permits, consultations, rezoning, environmental assessments—drags on and racks up indirect costs of as much as $5,576 per unit per month.
In Toronto, approvals average 25 months. That delay alone can tack on more than $100,000 to the final price of a condo. In Hamilton, it’s 31 months.
And those delays don’t just raise costs—they throw off timing. By the time a project finally breaks ground, the market has often moved on, leaving developers stuck delivering yesterday’s housing to today’s buyers.
Even those who can afford larger units hesitate to commit. Who wants to wait years just to move in, especially when the price is climbing the entire time? Unsurprisingly, larger units are often the last to sell—too costly for most, too delayed for the rest.
The result? A steady stream of undersized condos that few actually want, offered at prices most can barely justify.
Yes, regulation has a place. But among the 35 member countries of the Organisation for Economic Co-operation and Development (OECD), Canada ranks 34th in approval speed, with an average of 249 days. That’s not oversight—that’s paralysis. Countries with similarly strong environmental and safety standards manage to approve projects in half the time. So what’s our excuse?
It doesn’t have to be this way. Some cities are proving that faster approvals don’t mean cutting corners—they just mean cutting red tape.
Between 2022 and 2024, Halifax slashed its approval timelines from 20.8 months to 9.8. Edmonton went from 10.5 months to just 3.4, without compromising safety or public input.
Other cities could follow suit by adopting tools like automated same-day permits, consolidating overlapping policies, creating fast-track review lanes for compliant developers and publishing timelines to inject predictability and accountability into the process.
Let’s be clear: this isn’t about giving developers a free ride. It’s about giving Canadians more choice, better options and a fighting chance at ownership.
Unlike interest rates or material costs, these delays are entirely within government control. If policymakers actually want a responsive housing market, they need to stop jamming the gears.
They aren’t stuck with these timelines. They’re choosing them. And those choices are making housing more expensive while preventing the market from delivering what Canadians need, when they need it.
Conrad Eder is a policy analyst at the Frontier Centre for Public Policy.
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