{"id":8219,"date":"2018-02-15T11:11:43","date_gmt":"2018-02-15T19:11:43","guid":{"rendered":"http:\/\/www.roryc.ca\/blog\/?p=8219"},"modified":"2018-02-13T08:41:42","modified_gmt":"2018-02-13T16:41:42","slug":"cmhc-to-boost-home-supply","status":"publish","type":"post","link":"https:\/\/www.roryc.ca\/blog\/2018\/02\/cmhc-to-boost-home-supply\/","title":{"rendered":"CMHC to Boost Home Supply"},"content":{"rendered":"<p style=\"text-align: justify;\">A 225-page report that involved 18 academics and a full-press push from Canada Mortgage and Housing Corp. (CMHC) staff has come up lame in suggestions on how to tamper high house prices in major Canadian cities.<\/p>\n<p style=\"text-align: justify;\">When asked what findings surprised him in what CMHC is billing as the \u201cthe most thorough examination of house price patterns ever completed in Canada,\u201d report author and CMHC deputy chief economist Aled ab Iorwerth said it was the clear correlation between rising incomes and higher home prices.<\/p>\n<p style=\"text-align: justify;\">Examining Escalating House Prices in Large Canadian Metropolitan Centres, released February 7, showed disposable income in Vancouver increased 36.2% from 2010 to 2016 while it increased 19.2% in Toronto, the highest in Canada. Average housing prices increased 48% and 40%, respectively, in the two cities, also the highest in Canada.<\/p>\n<p style=\"text-align: justify;\">\u201cLocal wealth proved an important factor in the home price increases,\u201d ab Iorweth said.<\/p>\n<p style=\"text-align: justify;\">He added that the wealthier cities also tend to attract more immigrants, which places higher demand on the housing supply.<\/p>\n<p style=\"text-align: justify;\">BC welcomed 203,365 permanent residents in the six-year period of the study, while Ontario took in 546,620. These are the highest immigration flows of any provinces and account for 60% of Canada\u2019s total immigration during the period.<\/p>\n<p style=\"text-align: justify;\">On the foreign-home buyer issue, ab Iorweth said it was not the number of foreign buyers, which he said make up less than 5% of sales in the cities studied, but the \u201cperception that there were a lot of foreign buyers\u201d that helped drive housing prices higher.<\/p>\n<p style=\"text-align: justify;\">The study also pointed to a \u201clow supply response\u201d for increased house prices, especially in Vancouver.<\/p>\n<p style=\"text-align: justify;\">\u201cWhile it is true that the supply response in Toronto and Vancouver has been significantly weaker than in other Canadian metropolitan areas, we do not fully know why this is the case,\u201d said Evan Siddell, president and CEO of CMHC.<\/p>\n<p style=\"text-align: justify;\">\u201cThere continue to be data gaps, and we need to work more closely with jurisdictions at all levels to fully understand what is happening.\u201d<\/p>\n<p style=\"text-align: justify;\">CMHC\u2019s report, however, suggests some measures to boost housing supply, either of which would likely be a hard sell.<\/p>\n<p style=\"text-align: justify;\">One idea floated is \u201csunset clause\u201d penalties based on length of time an investor held land before it was released for new homes.<\/p>\n<p style=\"text-align: justify;\">In an email exchange with BIV following the report\u2019s release, CMHC spokesman Charles Sauriol said, \u201c Effectively applied taxes could include taxes based on whether or not a developer completed a proposed project \u2013 in effect encouraging more rapid development of land. Holding land vacant generates negative consequences for cities and citizens by delaying the tax revenue associated with land improved with structures and additions to housing supply.\u201d<\/p>\n<p style=\"text-align: justify;\">Another new concept is potential incentives to municipalities who move quicker to facilitate the construction of higher-density housing.<\/p>\n<p style=\"text-align: justify;\">\u201cThis is put forward as a useful area to explore to counter NIMBY [not in my backyard] sentiments with financial benefits, rather than a fully designed scheme at this point,\u201d Sauriol explained. \u201cThose benefits might be some form of grants from provincial or federal treasuries to municipalities to reward more intensive land usage and containment of sprawl.\u201d<\/p>\n<p style=\"text-align: justify;\">As ab Iorweth confirmed, CMHC may have to \u201ddig deeper\u201d to find the real causes \u2013 and any potential cure \u2013 for escalating house prices in big-city Canada.<\/p>\n<p><a href=\"https:\/\/biv.com\/article\/2018\/02\/cmhc-eyes-sticks-and-carrots-boost-home-supply\" target=\"_blank\" rel=\"noopener\">CMHC Eyes Sticks &amp; Carrots to Boost Home Supply<\/a> by Frank O&#8217;Brien | Business in Vancouver<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A 225-page report that involved 18 academics and a full-press push from Canada Mortgage and Housing Corp. (CMHC) staff has come up lame in suggestions on how to tamper high &hellip; [<a href=\"https:\/\/www.roryc.ca\/blog\/2018\/02\/cmhc-to-boost-home-supply\/\">read more<\/a>]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[],"class_list":["post-8219","post","type-post","status-publish","format-standard","hentry","category-market-updates"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.7 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>CMHC to Boost Home Supply &#8226; Rory C Real Estate | Oakwyn Realty<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.roryc.ca\/blog\/2018\/02\/cmhc-to-boost-home-supply\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"CMHC to Boost Home Supply &#8226; Rory C Real Estate | Oakwyn Realty\" \/>\n<meta name=\"twitter:description\" content=\"A 225-page report that involved 18 academics and a full-press push from Canada Mortgage and Housing Corp. 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