Why is real estate in Canada so expensive?

There are actually a few reasons for this but it all can be summarized as high demand intersecting with low supply. There is exceptionally strong demand in cities like Toronto and Vancouver for reasons that include population growth, immigration, and strong local economies. Whether you are for or against foreign investment in the Canadian real estate market, the facts show foreign investors are driving up housing prices. Foreign investors view Canada as a strong investment choice with relatively little risk. The government of Canada arguably makes is easy for foreign investors to purchase real estate in the country. People are able to purchase a property and rent it out for more than the mortgage costs. The past low interest rate environment also was a driver of demand.
If we consider supply constraints, there is relatively little new housing coming onto the market when you contrast it with the demand. There is just not enough space, but more importantly, construction is not dense enough.
Works Cited:
https://www.springfinancial.ca/blog/homeowner-finances/why-are-houses-so-expensive-in-canada