Thus answered Finance Minister Bill Morneau to a BNN
interview question on April 8, in an affirmation of his earlier statements pointing to the federal government’s intent to intervene in Canada’s red-hot markets and improve the prospects of affordability in these cities.
If present trends are any indication, though, there is almost nothing that Ottawa can do to cool down the housing sector, according to an industry executive.
“On the one hand it's good news that [the government] is aware and they're not sort of ignoring it. The other side is, are we too far down the road?” First Avenue Advisory, Raymond James Ltd. senior vice president Kash Pashootan asked.
“[However], if we look at how much average incomes have increased over the last decade, and how much average home prices have increased, there's a real disconnect between the growth in wages and income, and housing prices,” he stated.
Despite Ottawa’s launch of its strategy focused on affordable housing and rental units, and regardless of the new down payment requirement of 10 per cent for any Canadian home valued above $500,000, Pashootan said that the number of buyers who are keen to get a piece of the action in Vancouver and Toronto is simply unmanageable
Complicating matters is the influx of foreign capital, as the role this money plays in the country’s housing markets—and the extent of such a role, if any—remains uncertain.
Last March alone, Vancouver saw a sharp 27.4 per cent growth in residential real estate prices on a month-over-month basis, bringing the average cost of a detached home in the city to $1.34 million. Meanwhile, Toronto property values experienced a 12 per cent increase in the same period, with the average price of a detached home now sitting at $1.17 million.
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“Our main issue is to make sure we protect what's the biggest investment for most Canadians, which is their home.”