Vancouver’s housing boom is squeezing out some families as growth draws in new residents faster than dwellings can be built, according to Canada’s finance minister said.
“If you are in Vancouver today, it’s challenging for people to think about how they can get into the market and how their children can get into the market,” Bill Morneau said Wednesday in Toronto at a conference hosted by The Economist.
Morneau said his department is looking for evidence on foreign buyers to determine if restrictions are justified.
“As we get at the challenge of around whether there are foreign ownership issues, we need to consider the evidence,” the finance minister said. “We are going to remain focused on this, using real evidence to think about what are the measures that we can do in order to ensure that this market stays healthy for Canadians.”
Morneau tightened rules on mortgage down payments last year to curb excesses in Vancouver and Toronto, and over the last week Vancouver’s mayor and executives at some of Canada’s largest banks have signalled those moves aren’t enough. Vancouver’s main realtor group predicted June 2 that prices in the city will jump 25 per cent this year, and their latest figures for May showed the price of a single-family detached home up 37 per cent over the last year to $1.5 million.
Housing markets across Canada range from “very strong” in Vancouver, to “strong” in his hometown of Toronto, to not “doing very well” in Calgary after an oil slump, Morneau said. There is also a “significant part” of the market that is “pretty stable” including Montreal and Ottawa, he said.
“We are doing a deep dive on this, so we are looking very carefully at the dynamics under the market,” he said. “We have population-demographic issues, in Toronto and Vancouver there is higher population growth, we’ve got better labor markets in Vancouver and Toronto, much lower unemployment — we have supply issues.”
Morneau told reporters after his remarks at the conference there is no timetable for any future moves to curb housing gains.
On the wider economy, he said Canada’s government has a “good balance sheet” and a low level of debt relative to the size of the economy, a benefit at a time where growth has slowed. He also said monetary policy has “fewer places to go,” and he would leave decisions about the Bank of Canada’s 0.5 policy interest rate to the central bank.