Peter Politis, CEO, Discusses Canada’s Real Estate Outlook on The Your Life! Your Terms! Show

With interest rates elevated, higher costs, and policy hurdles mounting, Greybrook CEO Peter Politis joined The Your Life! Your Terms! Show on the “How Billion Dollar Developers See Canadian Real Estate In 5 Years” episode to discuss what these shifts mean for the future of Canadian housing.

A Market at a Crossroads

Peter described the Canadian housing market as being at a critical transition point. After a decade of growth fuelled by low interest rates and robust demand, today’s environment is defined by:

• Interest rates that have risen and remained higher than in the past, reshaping affordability and valuations.
• Higher construction costs and labour shortages, making projects more complex and could lead to longer timelines.
• Policy and regulatory shifts that increase uncertainty and add to the cost of delivering new housing.

Despite these headwinds, Peter underscored that Canada’s structural housing shortage has not gone away. With record levels of immigration, strong urbanization, and limited supply growth, demand will continue to exceed what can realistically be delivered.

The Coming Supply Cliff After 2027

One of Peter’s most important points was that the industry will face a severe drop in new housing completions after 2027.

Many of the projects currently under construction were financed and approved under a very different set of market conditions — lower interest rates, more accessible construction financing, and stronger pre-sale activity. Those projects are moving forward now, but far fewer new projects are being launched today because the economics no longer work.

That means that when the current pipeline finishes, there will be a gap in new supply hitting the market.

Peter warned that this will have significant implications for both affordability and pricing:

• Rent pressure will intensify as population growth collides with a slowdown in completions.
• Ownership opportunities will shrink, keeping more Canadians in the rental market longer.
• Investors with well-located, income-producing assets may benefit from this imbalance, but the affordability challenge for end-users will grow.

Greybrook’s Approach

Greybrook is leaning into this reality with discipline and focus:

• Underwriting more conservatively and stress-testing assumptions against rising costs and longer timelines.
• Selecting projects with enduring fundamentals — constrained supply, strong demographics, and transit connectivity.
• Leveraging our scale and partnerships to access opportunities that smaller players cannot and to manage risk through execution certainty.

__________________________________________________________________

Key Takeaways for Investors

Supply crunch after 2027: The current construction pipeline was financed under very different conditions, but few new projects are launching today. Once these wrap up, completions will fall sharply, creating a significant supply gap.

Persistent affordability challenge: Higher rates, higher construction costs, and regulatory burdens make it increasingly difficult to deliver homes at accessible price points.

Policy headwinds must be factored in: Municipal approvals, inclusionary zoning, and added development charges increase costs and timelines, requiring larger contingencies.

__________________________________________________________________

We encourage you to listen to the full episode of The Your Life! Your Terms! Show for a deeper dive into Peter’s views on the market, the looming supply gap, and Greybrook’s approach for navigating this environment.