With the federal election over and the status quo reaffirmed for the nation, it’s time to have a serious talk about our national housing market.
The best time to talk about this would have been before the election, but no party wants to tell the truth on this matter – there is no way out of the situation that will not wind up hurting someone.
Right now, more and more young people are priced out of the market. Housing prices have been rising faster than wages for almost a generation in major Canadian cities. The choice is to move to the hinterland – if you can find a job there – or live at home, borrow from parents, or simply resign yourself to a rental or a tiny condo forever.
The only thing that will actually solve this is a massive drop in the price of housing.
And that would also be a catastrophe. Thousands of families would find themselves deeply underwater on their loans. Seniors hoping to finance comfortable retirements from the sale of their homes would suddenly find themselves taking a big financial hit. The construction industry would doubtless reel, shedding good-paying jobs and sending people to the unemployment lines.
But without that, we just get deeper and deeper into a housing bubble that moves the dream of home ownership farther and farther away for an ever-greater segment of the population. No party wants to set off a housing crash via policy, but none of them have a plan for what to do if one emerges organically.
Funding the creation of more high-quality rental housing, co-op housing, and affordable seniors housing, will help those who need it the most. Variations on that were in most parties’ platforms and should begin post haste.
But the elephant in the room is that someone is going to take it on the chin – either current homeowners, or those who aspire to buy someday.