Housing affordability in Canada’s most expensive market — Vancouver — is at “crisis levels,” according to a new study, which says the re-acceleration of home prices, along with higher interest rates, are “slamming” ownership costs again.
Benjamin Tal, deputy chief economist at CIBC Capital Markets said that while measures from regulators and the government such as higher interest rates will slow down the economy in the short term and stabilize prices, it will not fix the long term problem.
“The main issue facing Vancouver and Toronto is supply. There is simply not enough supply, while demand is rising due to demographics,” Tal said.
He added that there are many other things that can be done, such as creating a rental solution for the housing market in order to relieve some of the pressure on prices.
“We have to allow for a rental market,” he said. “At this point, in terms of rental control, we don’t have much of a supply, because there is no purpose-built. Not just condos, but purpose-built apartments — so we need to change the way that we think about the rental solution.”
Purpose-built apartments are buildings solely designed for renters as opposed to condominiums, which could be owned or rented out.
CBC News · Posted: Jul 03, 2018 1:28 PM ET