Canada: Spiraling House Prices, Affordability Crisis- An 'Intergenerational Injustice,' Deputy PM

[appalachiablue]

- 'Spiraling housing prices are an ‘intergenerational injustice’, says Canada’s deputy PM,' The Guardian, April 12, '22. Ed.

- Freeland, who also serves as the finance minister, says the issue is her top domestic concern amid affordability crisis.

Canada’s finance minister has described the country’s out-of-control housing prices as an “intergenerational injustice”, as political leaders struggle to rein in a spiralling affordability crisis. Chrystia Freeland, who also serves as Canada’s deputy prime minister, said the issue is her top domestic concern.

“We had a better shot at buying a home and starting a family than young people today, and we cannot have a Canada where the rising generation is shut out of the dream of home ownership,” she told reporters Monday, calling the current situation a “shock”. Canada has the largest gap between incomes and house prices in the G7, according to the OECD, and two of its large cities, Vancouver and Toronto, often appear in rankings of global real estate bubbles.

In February, the country recorded its highest ever average selling price for a house, C$816,720 (US$647,340 or £497,101), with prices up 20% over the last year. The province of Nova Scotia had the largest increase of any region, with house prices leaping 35% since last year. The city of Kingston, Ontario, recorded the highest increase, with prices jumping 44%.

Politicians & economists have increasingly grown worried that such increases aren’t sustainable, but experts say there are no quick fixes to the crisis, which has been driven in part by low interest rates, market speculation & a shortage of new housing. The Liberal government budget announced last week implemented a 2-year ban on foreign house purchases in an effort to tame runaway prices. It also promised to invest C$10.14bn in housing & said it will accelerate the pace at which new houses are built, with Freeland blaming low housing stock as a prominent driver of price increases.

“We cannot have the fastest growing population in the G7 without also having the fastest growing housing stock,” she said... https://www.theguardian.com/world/2022/apr/12/canada-housing-prices-chrystia-freeland
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- CBC News, 'Vancouver, Toronto and Hamilton are the least affordable cities in North America: report, ' May 20, 2021. Hamilton is less affordable than Los Angeles and New York City according to new Oxford Economics research.
https://www.cbc.ca/news/canada/hamilton/affordability-canada-1.6034606

[Fiendish Thingy]

1. The Canadian government needs to get out of the mortgage insurance business

CHMC insures all of the high risk, low down payment, high debt to income ration mortgages (which is most mortgages for first time buyers, as well as folks trading up in expensive areas like Toronto and Vancouver).

Although the housing market in Canada is showing signs of correcting as the BOC hikes rates, prices won’t ever settle at normal levels until lenders are forced to take the risk of defaults.

Currently, “affordable housing” is defined as buyers being able to qualify for mortgages at whatever insane prices sellers are demanding, rather than being a reasonable percentage of buyers’ actual income.

[appalachiablue]

2. Helpful background, tx. Stop the corruption and fraud.