I’m surprised we’ve seen basically nothing from provincial or federal governments to improve housing/rental affordability. With riding interest rates, I was expecting at least a slump, but that hasn’t happened. Instead, we’ve seen amortizations grow rapidly.
The Office of the Superintendent of Financial Institutions has recommended
Removing the ability to extend amortization periods could exert downward pressure on some house prices, as it reduces the options available to help some borrowers meet their financial obligation
But (AFAIU) Parliament has ignored the recommendation. It’s a really shitty situation, that I don’t see a way out of.
Why would you be surprised?
More than 65% of Canadian homes are owned by the family that live in them. Given the propensity for owners to be older than average, and that the older you are the more likely you are to vote, that means the majority of voters have a vested interest in the price of their property.
The thing people fail to realize is that if we want affordable homes, current house values have to drop (by quite a bit) You can’t simply build new cheap houses, but have all other houses stay expensive. It’s not possible.
What’s more concerning is that the goverment fails to realize that expensive housing is killing the economy.
Forget about the fact a huge chunk of money is going into an unproductive asset. Young people and immigrants who can’t afford housing are gonna start looking elsewhere (US for example).
Who’s gonna pay taxes to sustain the older folks in their empty million dollars SFH??
I think of the two concerns, the unproductive asset is more serious. With all our investment dollars tied up, we will struggle to compete globally.
The young people looking elsewhere is less concerning. I know lots of young people talk about moving to the USA, but that is not so easy these days. Immigration to the USA from kinda is not trivial, and with unemployment in the USA slowly increasing, it is only going to get worse.
I’d bet on US having a much more robust and faster recovery than Canada. Their unemployment while slowly increasing, historically is still very low, and I’d guess if you’re in a specialized field immigration to US as a Canadian would be easy. I’m personally contemplating it.
And with bommers retiring I think the labour shortages will be with us for a while.