Quote:
Originally Posted by bizaro86
In your first paragraph you're looking at immigration to the country, yet in your second to last you note that houses even an hour outside a city don't help. Housing affordability is not generally a Canada wide problem, it's a "few big cities" problem. And those big cities have had more than 100% of the external immigration, because they get most of it plus they attract significant internal migrants. And the land available for housing starts is generally limited in most of them as you note. When you combine that with agriculture reserve and green belt policies outside of Vancouver and Toronto, the supply and demand imbalance is significant. Then you add speculators and momentum followers drawn to an asset with good supply-demand fundamentals and the potential for high leverage.
You can try and restrict speculation if you want, but that's like cutting off the top of a dandelion - it will just grow back. If you want to actually fix housing affordability in Canada you need to fix the root of the problem, which is a supply/demand imbalance in the largest cities. And that problem needs to be fixed municipally (upzoning) and provincially (land use at urban fringe policies).
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I would mostly agree, but housing in many smaller cities has become a major problem. As people leave place like Vancouver and Toronto looking for greener pastures, they move to small cities and quickly overwhelm them. It doesn't take much to overwhelm a city of 50k-100k people. It's happened in all of the cities that are around Toronto and Vancouver, and is now spreading to places like the prairies.
The massive income rate hikes could curtail things a bit. However, if housing supply does not increase, all interest rate hikes will do is keep those without lots of cash to start with out of the market. We'll see the trend of Boomers gifting hundreds of thousands to their spawn continue, and the majority of people who weren't lucky enough to be born into a family with property and money will be SOL.
And to add to your point on speculation, the only reason speculation is occurring is because there is a shortage in the first place. The best way to kill speculation is to turn the market towards the buyers, IE increase supply.