Got a good paying job and still can’t afford to buy a home? Worried about a housing market crash? Federal Finance Minister Bill Morneau wants to help. In a speech given to a Toronto Economic Club of Canada audience this morning, Morneau promised to find solutions to Canada’s heated housing market. The first step is the creation of a working group, he says.
“This group will examine the broad range of policy levers and factors that affect supply and demand of housing, the issue of affordability, and the stability of the housing market,” said Morneau to the packed room.
The working group, comprised of federal, provincial and municipal representatives, will work over the summer months before bringing back insight and advice on this “complex topic,” explained Morneau. “At the federal level we do have some levers but we don’t have all; it’s a shared responsibility with both the provinces and the municipalities—levels of government who also have regulatory and taxation levers that impact this market.”
Part of the group’s mandate is to provide “evidence-based” recommendations on how the Department of Finance can meet it’s two primary goals, when it comes to Canada’s housing market. “We want to help the middle class to buy their first home and we want to make sure the housing market remains stable,” said Morneau. “This [latter goal] is a big area of focus for us.”
So big, in fact, Morneau almost admitted that it could actually overshadow any measure to make housing more affordable in currently overheated cities, like Toronto and Vancouver. When asked what the primary focus is for the working group Morneau danced around the answer before reiterating: “We want to make sure this sector of the economy is resilient and that it can absorb any possible future shock.”
This tri-level governmental working group, which will begin meeting over the next couple of weeks, will collect and analyze data on the current Canadian housing market while examining how proposed policies could impact current and future housing markets.
To date, home prices in Toronto have increased by 15% over the last year and in Vancouver by 17%; worse is that the demand for single family detached homes is not diminishing, while supply continues to dwindle. According to Morneau, there are 1.8 families for every single-family home in Toronto and 5.5 families for every single-family detached home in Vancouver.
“With this working group, we are doing a really deep dive into the data so that we can create evidence-based solutions and stay on top of this changing market.”