The Great Rethink: Why the idea that everyone deserves to own a home is fundamentally flawed
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For example, Moody’s Analytics has predicted a peak-to-trough decline of about seven per cent in house prices.
The Canadian housing market has made a habit of mocking the fundamentals
But, as Brian DePratto, a former Toronto-Dominion Bank economist, recently observed, the Canadian housing market has made a habit of “mocking” the fundamentals.
Natural forces that are supposed to keep a lid on price appreciation have failed to materialize. A long-anticipated rise in interest rates, for example, never happened.
Combine that with the perception that owning a house is more desirable than renting, and you have the makings of a societal fissure between those who can afford a home and those who can’t.
“I don’t know why I can’t get this through to people in the real estate industry, but the glorification of home ownership makes housing more expensive,” Siddall said.
“People say I’m anti-home ownership. That’s nonsense. I’m pro-home ownership. I want to see people have an ability to buy homes and have secure housing, but glorifying home ownership is not the path to it.”
Tsur Somerville, a senior fellow at the The Centre for Urban Economics and Real Estate, part of the University of British Columbia’s Sauder School of Business, said attitudes about renting versus owning affect “people’s expectations (and) it affects their choices.”
But there’s another reason a viable rental market — a natural safety value — is not available to relieve pressure on Canada’s housing market.
There’s a general shortage of supply, made even more acute when it comes to certain types of rentals, Somerville said. A family looking for three or four bedrooms would have a hard time renting in Toronto and Vancouver, Canada’s highest-density and most expensive markets.
