![]() “And the notion that something is out of order with the rental market and that some genius technical solution can fix the problem is, at best, deceptive. For these property owners, maximizing profit is the ultimate goal. ![]() Corporations own 20 per cent of them, and financial landlords own eight per cent of them. In his new book The Tenant Class, he says 22 per cent of rental units are owned by wealthy families. Look more closely at landlords in Canada, says Ricardo Tranjan, senior researcher at the Canadian Centre for Policy Alternatives. But the units built aren’t affordable to those who need them the most, and increasingly they are being used as investments to increase wealth among homeowners, corporate and financialized landlords through real estate investment trusts and other investment funds. Last year BMO reported that we were building housing at rates that meet the number of households formed every year from 2002-2016, when we saw a surge in immigration. In response, the federal government and proponents of private developer-based solutions have been advocating for a massive increase in housing supply.īut this framing of the issue misses the underlying struggle that renters, particularly low-income renters, have faced for decades: policies and programs do not adequately address a housing market that is heavily biased toward capital accumulation for wealthy individuals and corporations. "The currency will take it on the chin too."Ĭlick the video at the top of this article for the full interview and more coverage.In the past couple of years, we have heard the housing crisis framed as something new – as if for generations the housing market has always worked well but now suddenly has ceased to function. "A very deep deleveraging cycle, a quite pronounced recession," Colmar says. Interest rates in Canada are currently at the highest levels since 2001, after a year of hikes aimed at combating inflation, and Colmar warns the pressures faced by homeowners with mortgages is "just a taste of what's to come."Īlthough Colmar doesn't think that a housing crash is imminent, he does warn that when "you're dealing with these kind of excesses… hopefully interest rates don't rise."Ĭolmar says some of the key factors to watch for are further interest rate hikes and employment levels – warning that if rising unemployment levels combine with spiking mortgage rates Canada could face a situation similar to the 2008 crisis in the U.S. "Affordability is bad right now," Colmar says, "but debt servicing of those mortgages is pretty excessive." Top business headlines, all in one place.Unlike the U.S., where buyers can qualify for a 30-year mortgage, Canadian borrowers must renew their mortgages every five years - at the prevailing interest rates.Ĭolmar argues that's one of the reasons mortgage burdens can become astronomical. "Canada kind of is really off the charts on that front." ![]() was" before the 2008 housing market crash. The Offer newsletter: Sign up for curated coverage of Canadian real estateīut how leveraged are Canadian homeowners? Colmar says it's significantly "north of where the U.S.He warns that decades of low interest rates in Canada "seduced a lot of home buyers" and has led to "excessive leverage backing up the whole system." 5 Things to Know newsletter: Sign up to start your day with the biggest storiesīut what's put Canada's housing market at such high risk of unravelling? Colmar explained the brewing crisis "underneath the surface" and offered his key takeaways to Todd van der Heyden in a one-on-one interview on Tuesday.Ĭolmar argues that those looking for a "big headline about a housing bubble" should be keeping an eye on the disparity between house prices and incomes."I wouldn't necessarily say it's imminent," Phillip Colmar, partner at Global Strategist at MRB Partners, told CTV News Channel. ![]() An analyst who describes Canada as sitting on one of " the largest housing bubbles of all time" warns that if it bursts, the country could be thrown into a deeper recession than forecasted.
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