How did the Canadian Real Estate Market Survive the Recession?

The Canadian real estate market certainly took a hit during the financial crisis of 2008-2009, but it was nothing like the crash experienced in the United States. So why did ours come out on top and has still managed to keep its head above water, while that of the States’ crumbled?

One reason can simply be attributed to population. The total Canadian population is 34.3 million residents. Compare that with the 307 million people living in the United States, and you can see the difference. This many more people means that much bigger of an impact when things crash, and that many more people are going to be affected by it. However, population was only one factor in the crash of the United States.

Another factor, and many say the biggest factor, in the housing market crash that occurred in the States was that the American banks handed out loans that people simply could not afford. When those homeowners then could not pay their mortgages the banks suffered, retail outlets suffered as people cut back because they couldn’t even pay their mortgages, and the U.S. economy suffered as a whole. While the housing market certainly wasn’t the only element that caused the recession, it was a big factor.

Even though most banks in the United States weren’t doing anything that was illegitimate or dishonest, they were still able to loan money to risky borrowers because they followed global banking standards. Canadian financial institutions however, have much stricter rules and regulations and therefore, there are fewer high-risk borrowers in the market. This results in only qualified buyers purchasing Canadian real estate, and the housing market remaining stable – not crashing because people can no longer afford to pay for their homes.


Canadians are certainly very thankful that Canadian real estate managed so much better than that of the U.S.’ during the recession, even if they don’t know how exactly that happened. The reasons for it though, are very simple. We have one of the best banking systems in the world, we have a federal government that is, and has been, keeping their finger on the pulse of the housing and mortgage market, and making changes along the way to make it even more difficult to get a mortgage. And while many think that Canadian real estate is currently in a bubble, it’s these measures that are going to make sure that the bubble doesn’t burst.