Canada’s finance minister has described the country’s out-of-control housing prices as an “intergenerational injustice”, as political leaders struggle to rein in a spiralling affordability crisis.
Chrystia Freeland, who also serves as Canada’s deputy prime minister, said the issue is her top domestic concern.
“We had a better shot at buying a home and starting a family than young people today, and we cannot have a Canada where the rising generation is shut out of the dream of home ownership,” she told reporters Monday, calling the current situation a “shock”.
Canada has the largest gap between incomes and house prices in the G7, according to the OECD, and two of its large cities, Vancouver and Toronto, often appear in rankings of global real estate bubbles.
In February, the country recorded its highest ever average selling price for a house, C$816,720 (US$647,340 or £497,101), with prices up 20% over the last year. The province of Nova Scotia had the largest increase of any region, with house prices leaping 35% since last year. The city of Kingston, Ontario, recorded the highest increase, with prices jumping 44%.
Politicians and economists have increasingly grown worried that such increases aren’t sustainable, but experts say there are no quick fixes to the crisis, which has been driven in part by low interest rates, market speculation and a shortage of new housing.
The Liberal government budget announced last week implemented a two-year ban on foreign house purchases in an effort to tame runaway prices. It also promised to invest C$10.14bn in housing and said it will accelerate the pace at which new houses are built, with Freeland blaming low housing stock as a prominent driver of price increases.
“We cannot have the fastest growing population in the G7 without also having the fastest growing housing stock,” she said.
Elected officials have increasingly made housing affordability the central focus of their re-election campaigns. Ontario premier Doug Ford, who faces voters in June, has blamed cities for slow zoning processes, arguing delays drive up costs.
“Believe it or not, folks, sometimes when [developers] apply for a permit, it can take four to six years,” he said late last year. “Where in North America does it take four to six years?”
Conservative leadership candidate Pierre Poilievre has also made housing affordability a top focus of his campaign. In viral video shot over the weekend in Vancouver the frontrunner blamed “big city gatekeepers”, alleging the system was meant to keep real estate investors wealthy.
On Tuesday, Statistics Canada released new data highlighting the “inequalities” in the country’s housing market.
Figures collected by the national agency found that “multiple-property owners possess nearly one-third of all residential properties” and that “the top 10% wealthiest owners account for around one-quarter of residential housing value”.
