I’ve tried to voice my thoughts on this issue before, but I’ll repeat that we do NOT have a house SUPPLY issue.
Sadly, Doug Ford won the recent Ontario election promising exactly this, being completely void of understanding of the underpinnings affecting our markets. In fact, Dougie’s recent promise to address issues related to affordable housing reek of a repeat of ‘buck a beer’, but this time with shelter involved.
Regardless, when the media posts articles that reference massive drops in house sales, but continued increases, there’s still something very clearly wrong with the housing market and the level of manipulation that’s happening.
The good news is that we’re on the right track. The restrictions – mainly limits on foreign ownership – introduced by the federal government this spring seem to have taken hold and have had their desired effect on ‘cooling’ the market.
Price increases will soon become much more moderate.
Next, we need to start to truly understand the influence that international organizations like AirBnB and VRBO along with foreign investment companies (eg. Blackrock and Vangaurd) have had on our housing market and why their pressure has been fundamental to the increases experienced in recent years.
What we truly need is a hefty tax or even annual surcharge on transactions involving Canadian real estate and foreign investors in order to generate much-needed cash-flow to fund Covid responses across Canada.
There are other measures that should be required in Canada in order to create a more transparent and fair market for real estate. Historical prices should be listed and available without having to hire an agent; bidders should be registered and a full auction list of bids should be available to potential buyers so that they’re not over-bidding on houses or other real estate.
Furthermore, we need to better understand the impact that constant growth with universities and international students looking for rental units is having on affordable housing in Canada, particularly in small towns that are dependent on the post-secondary industry. A simple fix would be to require universities to build on a one-for-one basis, ie. for every foreign student they put into housing they ensure that a low-income family is also housed. Even better: cities and towns are required to NOT allow new structures for students of universities. Universities need to take a more equitable lead with respect the impact that they are exerting on local markets.