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.
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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.
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.
I’m going to guess you are a young person? Those years encompass policies that were absolutely abysmal for Canadian housing. Political embroilments with the USA’s foreign policies in the 70s cut back on housing initiatives, severe economic belt-tightening in the 80s, backlash against immigration in the late 50s and well into the 60s. The CMHC itself was founded on ignoring the Curtis report in 1941 and giving most control of housing provision to the private sector instead of focussing on low- to middle- income housing.
If you’re going to be interested in housing history in Canada, you should look at the complete picture. Free market pressure created this situation, policy only followed it.
I’d love to read more about it, can you point me at a link? Most of what I’ve read has been from Wikipedia, which suggests that federal and provincial governments made an effort to build housing, and, at various times, reduce the cost of housing, and promote home ownership.
From the wikipedia article on the cmhc:
We’ve been fighting this struggle on private vs public housing for a long time, and it is simply because we kept in step with the way our southern neighbours do things.
Now, I want to be clear that I support socially irresponsible, state-sponsored housing, and I do think we’ve been lucky in Canada to benefit from a pretty good system overall. I am a to believer that Finland is going things correctly by addressing housing head-on.
I just commented because I don’t want ppl to think that “the good old days” in Canada were perfect.
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.
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.