Quote:
Originally Posted by opendoor
Sure, but housing prices didn't just start going up since immigration ramped up. From 2000 to 2020, Canada's population went up 23.7%, or about 1.1% a year. In that same time period, we added about 1.3% a year to the housing stock. Despite that, real property prices (i.e. accounting for inflation) went up by 200% in those 20 years.
In the US by comparison, their population grew by 0.9% a year over the time period and their housing stock increased by that same 0.9% a year. Yet their real residential property prices increased by only about 35%.
Now to be fair, Canada's residential prices were at the end of a long stagnant period in 2000 while US prices had already seen some appreciation in the late '90s. But even accounting for that, Canada's prices have increased significantly faster than the US's despite Canada adding much more housing stock relative to population growth than the US.
And a place like Australia shows a similar pattern to Canada. They've had relatively fast population growth (about 1.5% a year over the last 20 years), but their housing stock has increased even faster, at almost 2% a year. Yet prices have followed the same trajectory as Canada, basically tripling from 2000 to 2020 after accounting for inflation.
I don't know, can you name any countries that solved persistent high house prices with a bunch of construction? South Korea has had a pretty stagnant population and has added over 2% to its housing stock per year (#1 in the OECD), yet their house prices have skyrocketed over the last 20 years as well.
|
The CMHC has stated that Canada needs to build 5.8 million house by 2030:
https://www.cbc.ca/news/canada/toron...2030-1.6498898
The problem is you're just pulling stats in isolation. Yes we have X amount of housing stats, and Australia has X amount of housing starts, and the USA has X amount of housing starts.
However, the main issue is actual shortage. The USA has a shortage too. However, Canada has it far worse than the USA. The USA needs about 6.5 million homes, but obviously their population is much higher, so per capita that far fewer homes:
https://www.cnn.com/2023/03/08/homes...age/index.html
I don't dispute that other issues are a factor. Cheap loans and inflation are certainly an issue. South Korea is actually a great example. Because they don't have shortage issues as bad as ours, their market didn't get as inflated and their market also responded much better to increased interest rates.
As far as inflation goes, that's a huge factor in terms of real pricing. The Canadian dollar is realistically already worth 20-30% of what it was pre-pandemic. So knock off that amount in real value, which actually doesn't put us very far ahead of where we were 7-8 years ago. Obviously, that doesn't actually help affordability until salaries also increase.
So basically, the point is South Korea may be okay regulated the housing market via fiscal policy. But Canada needs to both regulate fiscal policy and vastly increase housing supply.