Is Trudeau finally getting something right on the housing file?

There’s been a flurry of Fluffy announcements of late about our housing crisis. The last one I heard was $15 billions to subsidize the mortgages of 30,000 rental apartment units over the next ten years. In 2015, Canadian author Hilliard MacBeth published a book called “When the Bubble Bursts; Surviving the Canadian Real Estate Crash.” A few months later Justin Trudeau became PM. The real estate market follows the laws of supply and demand. When more people want housing, there is upward pressure on price, whether you’re renting or buying. As Hilliard argues in his book, supply and demand were out of sync well before 2015. When PM Fluffy came in, he opened the floodgates for foreign students and foreign workers. In 2015, the average house price in Canada was about $400k. Today it’s over $700k. In 2015, the population of Canada was 35 million and change. We just passed 41 million. Along the way, the building industry has been plodding away at roughly 200,000 starts per year. Do the math. When you build 1.8 million units while increasing the population by 6 million, you’re completely destroying the demand/supply equation. That’s why the crash MacBeth predicted nine years ago has not happened yet. In conclusion, the Liberal’s goosing the supply side with incentives, while also restricting demand by reining in student and temp worker numbers, is clearly a step in the right direction. But we have a long, long way to go.