“The dream of home ownership may be fading for some,” Canada Mortgage & Housing Corporation president Evan Siddall said, as quoted by Bloomberg. “Housing affordability has become a serious problem in our major cities.”
The remarks came after Prime Minister Justin Trudeau introduced $40 billion of spending over the next decade to fix up public housing projects and offer new rent subsidies to poorer families. Prices in Vancouver and Toronto have surged and traditional single-family homes can often fetch more than $1 million, prompting buyers to move into distant suburbs and lawmakers to introduce special taxes on foreign owners.
Read more: Housing, economic risks remain heightened – BoC
Higher prices are likely behind a decline in Canadian home ownership rates, which have also fallen in other industrialized nations, Siddall said. Canada remains vulnerable to household debts that have reached 175% of disposable income, he said.
Toronto home prices have climbed 63% over the last five years, with about half of that gain coming in the last two years, according to the Teranet-National Bank Home Price Index. In Vancouver, prices have jumped 65% over five years.
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The head of the federal housing agency argued that more Canadians may have to rethink the idea of owning a home, especially in major cities where prices have surged.