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The Canadian government, led by Prime Minister Justin Trudeau, aims to make housing more affordable in a country known for its expensive real estate. However, the new Housing Minister, Sean Fraser, emphasizes that the goal is not to decrease the value of homeowners' properties but rather to build more affordable housing units for those currently underserved. This dual objective highlights the government's challenge of addressing the rising cost of living while also safeguarding the wealth tied to existing homes.
With the benchmark home price in Canada reaching $749,100 in June and doubling over the past decade, cities like Toronto and Vancouver face high real estate bubble risks, with typical home costs exceeding $1.15 million. Fraser's strategy involves swiftly distributing federal funds as incentives to local governments to boost housing supply, particularly in high-demand areas like Toronto and Vancouver. Despite this approach, experts note the difficulty of achieving the ideal balance between affordability and property values, as market forces driven by population growth continue to push prices higher.
Fraser acknowledges the role of immigration in housing shortages and emphasizes the need to tie immigration levels to housing supply targets, thereby aligning population growth with the capacity of communities to absorb new residents. Temporary immigration policies, especially for foreign students and low-wage workers, are under examination due to their impact on housing needs. In the coming months, Fraser plans to collaborate with various stakeholders to set targets and draft policies addressing housing issues, with a focus on incentivizing developers and communities to expedite home construction. The government is expected to announce further steps in the fall to facilitate housing construction and potentially reconsider existing spending strategies.
Read the full article on: BNN Bloomberg
