Both sectors face inflationary pressures but are being dealt with very differently
As anyone who has ever spent time in the kitchen knows, when a pot is boiling over, you do not put a lid on it. You lower the heat. Adding a cover does nothing to reduce the cause of all the excess bubbles and steam. In fact, increasing the pressure within the vessel generates an…
Governments must begin to address their own roles in keeping housing prices high
The recent rise in interest rates has dampened demand for home sales in Canada. The hike, inevitable given how historically low rates have been, has taken some of the froth off housing prices. However, given how high home prices still are in Canada, a useful question to ask is what governments can do to reverse…
Government land-use regulations a principal source of this inequality
Canada’s housing affordability crisis is a matter of considerable concern, especially for young people trying to buy a house. The worst problems are in the Vancouver and Toronto markets with their excessive land-use regulation. Extensive international research associates stronger land-use regulation with diminished housing affordability. Vancouver and Toronto are experiencing substantial net migration of people…
It’s unclear if the feds are doing higher-risk, lower-income mortgage debtors any real favours
Just a few months ago, a regular national discussion was about house prices and a lack of affordability. No longer. With house, townhouse and condominium prices cresting, imminent data may likely confirm serious price declines. Mortgage carrying costs are rising as interest rates and debt servicing costs climb. The mortgage qualifying threshold is receding rapidly…
May be a solution for most of the homeless people in Canada
As most of us remembered on Canada Day, this is a pretty good country to live in. It’s hard to think of a better one. But it’s not perfect. We do have some serious problems that need fixing, like homelessness. In a country as rich as Canada, no one should have to go hungry, and…
The Liberals should stop acting like they're considering taxing the sale of your home
By Franco Terrazzano and Kris Sims Politicians think we should trust them just because they pinky promise not to impose a home equity tax, but Canadians pay members of Parliament to do more than talk a good game. MPs need to prove they won’t bring in a home equity tax by scrapping the requirement to…
Young people aren't able to afford the homes they grew up in
A poll by highly respected IPSOS, released by BILD-GTA, shows a strong awareness of the Greater Toronto Area’s severely unaffordable housing. In the 15 years from 2004 to the last pre-pandemic year of 2019, the median detached house price rose more than 160 per cent (inflation-adjusted), about 5.5 times the rise in the consumer price index.…
Liberal claims of “making life more affordable” since 2015 is hogwash
By Franco Terrazzano and Kris Sims There was a clash between reality and the federal Liberal Twitter account last week. The self-congratulatory tweet claimed Liberals have been “making life more affordable” since 2015. When Canadians look at gas prices, grocery store receipts and mortgage payments, that claim might raise eyebrows. Does life feel more affordable…
Buying only what we really need eases our budgets, simplifies our lives and cools the economy
Inflation is a relatively new concept to younger people, who have never experienced the onslaught of rising prices. It’s chilling to those who have lived through or learned of times when hard-earned and well-saved money depreciated in value. Monetary policy in Canada aims to keep inflation at or under two per cent. The latest rate…
Urban containment regulations on the urban fringe must be relaxed
For 18 years, I have been monitoring international housing affordability as author or co-author of the Demographia Housing Affordability series. The latest edition rates 92 major markets in eight nations using the “median multiple”: the median house price in a place divided by the median pre-tax household income. In the early 1990s, median multiples in…