One of the clearest effects of slowing population growth has been in real estate on the rental market, said Shelly Kaushik, senior economist at BMO Capital Markets, in an interview.
Newcomers, such as temporary foreign workers and international students, show up in very specific areas of the economy, she explained, and this is one of them.
“One of the fastest effects we’ve seen is deceleration in rental prices across the country, but especially in places like Ontario and (British Columbia), where there is and was certainly a larger share of international students coming into the country,” she said.
…
A drop in demand for rental units has also begun trickling into the overall housing market.
Smaller properties, such as condos, are now seeing a glut of inventory of new builds, but there are hardly any buyers, because renting out the units is a riskier proposition than it was a few years ago.
…
There has also been a slowdown in investor activity in the housing market, which would be a drag on home building this year, he said.
“You’re getting this period of a real stagnation in the housing market through this year and into next year, in part driven by population,” Ercolao said.
Canada Mortgage and Housing Corp. last month reported the agency’s six-month moving average for annual starts declined 3.5 per cent for the fourth consecutive month.
But the effects of slowing population growth haven’t been the same across all housing types.
“Detached (housing) market isn’t seeing as much of an effect since a very small share of newcomers to Canada aren’t really engaged in that part of the market,” Ercolao said.
Shouldn’t the process be to have the houses built and then have people move into them? Not to have people create demand and only then play catch up and build a place for them to live?
Very boomer coded housing as a commodity mindset.
Eh. I don’t think we need to bring generational conflict into this. The federal and provincial governments had much more progressive housing policies from the 1950s to 1990s. Austerity gave housing to the private sector. We should definitely take that back.
But at a minimum, if we’re gonna be playing catch-up like this, CMHC, BCH, and provinces should be providing financing and making it happen.
Turns out the economists “free market” nonsense was really religion all along. A pragmatic government will step in and fill the gaps in a practical Canadian mixed market approach. Carney almost gets it, when it come to defense. I don’t see him as the man to bring back solid Canadian policies of the days of yore.
No, it’s a start, but you’re probably right, he won’t take it far enough to bring back the hybrid solutions that made this country a G7 nation, let alone advance it into the future. Still, managing the decoupling from the US is a strong start. We’d never get anywhere with them basically having veto power over our entire economy.
A pragmatic government will step in and fill the gaps in a practical Canadian mixed market approach. Carney almost gets it, when it come to defense. I don’t see him as the man to bring back solid Canadian policies of the days of yore.
Definitely not. He remembers the good ol’ days of the free trade tide raising all boats and wants to get back on that bandwagon.
Like you say, a mixed market approach seemed to work before, and it may work again. It’d be great to see more tax law improvements to cheapen construction for multi unit dwellings, and more tax write-offs/financing for non-market builds like coops. But that’s not Carney’s bag.
Tax isn’t the problem.
Private housing is failing because its not a free market. Zoning prevents density, permitting and approvals cause large costly delays, developer fees have risen thousands of percent, we have greenbelt now that prevents large swathes from being developed. What can public housing do against Nimbys and municipals that secretly dont want density because it might lower property values or add congestion?
The NDP and Liberals are clearly willing to label anyone a racist who goes against immigration, but they seem to also be fine with putting these same people 20 to a basement, which sounds more racist to me.
If we’re gonna leave home construction to the private sector, the federal and provincial governments at least need to manage it. This isn’t a surprise. Our governments should be offering low interest loans if they insist on outsourcing service provisioning to developers.
A better solution would be direct construction or financing, a la CMHC after WWII. Here’s hoping Build Canada Homes manages to get more than 4k houses built this year.
There has also been a slowdown in investor activity in the housing market, which would be a drag on home building this year, he said.
…
Canada Mortgage and Housing Corp. last month reported the agency’s six-month moving average for annual starts declined 3.5 per cent for the fourth consecutive month.
Housing growth that is led by investment strategy is always going to favour higher margin options, which means a focus on higher end homes. To have low cost, affordable housing, government supported public ownership is almost always necessary, then it is fine to let the high margin developers chase bucks not justice.
Housing is a right. It is a common responsibility, corporations are exempt from larger responsibilities like this, and whenever the barter zoning approach is used, like amenities for building rights, developers mostly fudge or shirk. They don’t care about that, they have one priority.
So yes, bring back the well-proven, successful economic stimulus and social stability of public housing, whether through a revitalized CMHC or more modern systems. Long history of mismanagement and successful management practices from around the world to draw from.
Here here!
