Cannabis legalization in Canada has led to an increase in housing prices and home shortages in some regions, according to an October 15 RE/MAX report. The report points to Smiths Falls, Ontario, home of Canopy Growth, a cannabis firm that employs 1,300 people, as an example of how the cannabis industry is affecting home prices and inventory.
In the Rideau-St. Lawrence region — which encompasses Smiths Falls — house prices are up 10.5 percent and home sales rose by 27.1 percent year-over-year, the report says. In Atlantic Canada, home of Breathing Green Solutions and Zenabis Global, “months of inventory” dropped from 45 in 2018 to just nine this year.
In Windsor-Essex, home of Leamington, Ontario’s Aphria — which employs 1,000 people — average prices rose 9.10 percent and increased 7.82 percent year-over-year.
In Western Canada, Calgary and Vancouver have more than 75 retail cannabis dispensaries, due to the provincial government rules that allow private businesses to open shops rather than just government-run shops, which have helped drive business’ real estate prices. Toronto, by comparison, has just six cannabis storefronts.
The report notes that provinces with more cannabusinesses didn’t experience a negative impact on home values despite a survey by the company last year that found 65 percent of Canadians “would not like to live near retail cannabis stores.”
Christopher Alexander, RE/MAX executive vice-president of the Ontario and Atlantic region told CTV News that the “real story is that the cannabis industry is creating jobs and demand in the market.”
“Whenever there’s job creation … it creates more demand in the marketplace and more often than not, (home) prices will start to rise.” — Alexander, to CTV News
In Vancouver, the report says, the 11 commercial stores are in mostly commercial areas and “not on the radar for most homebuyers.” In Winnipeg, “Baby Boomers and Gen X are most likely to ask about cannabis retail when choosing a neighborhood to buy a home.” In London, homebuyers are asking whether more commercial shops will open.
Most surveyed by RE/MAX, 72 percent, said living near a cannabis store was not a deciding factor in their move, while 44 percent said they would like to live near a legal dispensary. Two in 10 Canadians live near a retail dispensary, 25 percent said they would move if a retailer opened up in their neighborhood and 31 percent said a retail dispensary would deter them