My Thoughts on Current Housing Affordability in Canada

This is my viewpoint on housing affordability in Canada. In my opinion, the primary reasons for the current housing situation are as follows:

    The Bank of Canada maintained the interest rate at very low levels for an extended period. This resulted in increased accessibility to housing for individuals with limited funds, thereby boosting demand.

    Concurrently, emerging technologies like Airbnb provide homeowners with a convenient tool to rent their properties, generating a reasonable income. This encourages property owners to retain their properties instead of selling when acquiring new ones.

    Increased immigration has also contributed to the unaffordability of housing, escalating demand from newcomers for both renting and owning properties.    Various levels of governments have not constructed sufficient rental units to accommodate the growing population.

In my perspective, these are the primary factors contributing to the issue. A potential solution, in my opinion, is to maintain the interest rate at its current high level for an extended period. This strategy could lead to increased housing affordability in the long run. While upholding the high interest rate, the government should consider reducing immigration, limiting the number of foreign students, and prioritizing the construction of new affordable rental units. A higher interest rate would deter unqualified individuals from purchasing houses they cannot afford to maintain. These individuals often participate in bidding wars on housing and later express discontent when interest rates rise.

Furthermore, a sustained high-interest rate would discourage investors from leveraging their current property equity to purchase additional houses.

However, this poses a challenge for the younger generation, as houses become less affordable. They represent the future leaders of our nation and should have the ability to purchase homes based on their income. This should be a significant concern for policymakers across various levels of the Canadian government.

I propose maintaining high-interest rates for at least another ten years. Simultaneously, there should be a concerted effort to construct an adequate number of rental units to accommodate the growing population. Encouraging an increase in domestic manufacturing could also positively impact the situation.