The BC Government's announcement to ban the practice of limited dual agency means that consumers can no longer choose the REALTORS® they want.

“Every day, REALTORS® help their clients understand real estate transactions, so they can make informed decisions,” said BC Real Estate Association (BCREA) President Jim Stewart. “Over my nearly 25-year career as a REALTOR®, many long-standing clients have developed trust with me, and now my clients have no choice but to start from the beginning and build new relationships. Trust is a crucial part of what is often the largest financial transaction in people’s lives.”

Limited dual agency occurs when a real estate trading services licensee acts in a limited capacity for both the buyer and the seller. The practice is especially common and important in small BC communities, in which few licensees practice, and so BCREA is pleased to see a proposed exemption for those situations. However, limited dual agency is also used in cases where REALTORS® have established relationships with buyers and sellers, in commercial transactions and in situations where REALTORS® specialize in particular property types.

“Rather than working with licensees they don’t know, we’re concerned people may decide to complete real estate transactions without representation,” said BCREA CEO Robert Laing. “That goes against the consumer protection mandate of the Superintendent of Real Estate and the Real Estate Council of BC.”

At the end of June 2016, the Independent Advisory Group (IAG) made 28 recommendations aimed at improving the real estate licensing system and the protection of consumers. For more than a year, BCREA has urged the BC Government, Superintendent of Real Estate and Real Estate Council of BC to carefully examine the IAG recommendation to eliminate limited dual agency. The vast majority of BC’s more than 22,000 licensees are diligent, ethical and trustworthy, and so BCREA has recommended that limited dual agency should be allowed through the express consent of consumers.

“We know consumers value the right to choose their own representatives,” said Mr. Laing. “Over the next few days, BCREA will examine the draft rule changes carefully and consult with the 11 real estate boards to determine our next steps.”

Quick facts:
• In response to a July 2017 survey:
• 67% of BC real estate consumers said it’s very important or somewhat important that they be able to work with the REALTOR® of their choice,
• More than four-in-five BC homeowners (84%) used the services of a REALTOR® for their last property transaction.
• 88% of BC homeowners who worked with a REALTOR® say they are very or somewhat satisfied with their services.

BCREA is the professional association for about 22,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.

The BCREA Commercial Leading Indicator (CLI) posted its largest increase since 2009, rising by 3.7 index points in the second quarter of 2017 to 133.1. That increase represents a 2.8 per cent rise over the first quarter and a 6.6 per cent increase from one year ago.

The sustained rise in the CLI reflects strong growth in economic sectors beneficial to commercial real estate activity. An uptick in economic activity last quarter further reinforces the already strong trend in the CLI. That signals a continued economic environment that is very supportive of growth in investment, leasing and other commercial real estate activity over the next two to four quarters.

The BC economy accelerated in the second quarter of 2017, led by a surge in retail and wholesale trade as well as a significant uptick in the manufacturing sector. Vigorous employment growth helped push retail sales a remarkable ten per cent higher year over-year in the second quarter compared while manufacturing sales were up almost 11 per cent.

Employment in the provincial economy is tracking nearly 4 per cent higher through the first half of 2017, and the second quarter saw significant expansion of payrolls in key commercial real estate sectors. The CLI’s measure of office employment rose by close to 12,000 jobs in the second quarter while manufacturing employment posted its first increase since early 2016, rising by 5,500 jobs.

A modest sell-off of Canadian REITs combined  with a slight rise in short-term credit spreads  tipped the CLI’s financial component into negative territory for the third time in the past four quarters. Rising interest rates due to a somewhat sudden change in sentiment from the Bank of Canada in recent months means tighter financial conditions going forward. 

Quarterly Trends by CLI Components

Q2 Highlights:

• Economic Activity: Both wholesale and retail sales posted blockbuster growth in the second quarter of 2017. Provincial retail sales were up 10 per cent year-over-year including 12.4 per cent growth in June. Similarly, wholesale trade was up 9.6 per cent compared to this time last year. Moreover, the manufacturing sector posted double digit sales growth in the 12 months to May and June and nearly 9 per cent growth in sales through the first six months of 2017.

• Employment: The benchmark index for Canadian REITs finished the second quarter down about 1.5 per cent as a rising interest rate environment prompted a shift in investor sentiment. The second quarter also saw a modest expansion of short-term credit spreads. Overall, despite higher interest rates, financial conditions remain accommodative.

• Financial: The CLI measure of office employment rose by close almost 12,000 jobs in the second quarter of 2017, largely due to a surge of new jobs in the Finance, Insurance, and Real Estate sectors. Additionally, after several months of strong manufacturing output, hiring picked up in that sector as well with average manufacturing employment rising by 5,500 jobs in the second quarter. Total employment in manufacturing also reached an 18-month high of 179,000 in June.

The British Columbia Real Estate Association (BCREA) is the professional association for about 22,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the province’s 11 real estate boards, BCREA provides continuing professional education, advocacy, economic research and standard forms to help REALTORS® provide value for their clients.  

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Competition for condominiums and townhomes pushed Metro Vancouver* home sales above typical levels in August.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in the region totalled 3,043 in August 2017, a 22.3 per cent increase from the 2,489 sales recorded in August 2016, and a 2.8 per cent increase compared to July 2017 when 2,960 homes sold.

Last month’s sales were 19.6 per cent above the 10-year August sales average.

“First-time home buyers have led a surge this summer in demand in our condominium and townhome markets,” Jill Oudil, REBGV president said. “Homes priced between $350,000 and $750,000 have been subject to intense competition and multiple offers across the region.” There were 4,245 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in August 2017. This represents a 1.1 per cent decrease compared to the 4,293 homes listed in August 2016 and a 19.2 per cent decrease compared to July 2017 when 5,256 homes were listed.

The total number of properties currently listed for sale on the MLS® system in Metro Vancouver is 8,807, a 3.5 per cent increase compared to August 2016 (8,506) and a 4.2 per cent decrease compared to July 2017 (9,194).

For all property types, the sales-to-active listings ratio for August 2017 is 34.6 per cent. By property type, the ratio is 16.3 per cent for detached homes, 44.8 per cent for townhomes, and 76.3 per cent for condominiums.

Generally, analysts say that downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“Conditions in our detached home market are distinct today from the dynamic in our condominium and townhome markets," Oudil said. "Detached homes have entered a balanced market. This means there's less upward pressure on prices and that buyers have more selection to choose from and more time to make their decisions."

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,029,700. This represents a 9.4 per cent increase over August 2016 and a one per cent increase compared to July 2017.

Sales of detached properties in August 2017 reached 901, a 26 per cent increase from the 715 detached sales recorded in August 2016. The benchmark price for detached properties is $1,615,100. This represents a 2.2 per cent increase from August 2016 and a 0.2 per cent increase compared to July 2017.

Sales of apartment properties reached 1,613 in August 2017, a 20.1 per cent increase compared to the 1,343 sales in August 2016. The benchmark price of an apartment property is $626,800.

This represents a 19.4 per cent increase from August 2016 and a 1.7 per cent increase compared to July 2017.

Attached property sales in August 2017 totalled 529, a 22.7 per cent increase compared to the 431 sales in August 2016. The benchmark price of an attached unit is $778,300. This represents a 12.8 per cent increase from August 2016 and a 1.9 per cent increase compared to July 2017.

*Editor’s Note: Areas covered by the Real Estate Board of Greater Vancouver include: Whistler, Sunshine Coast, Squamish, West Vancouver, North Vancouver, Vancouver, Burnaby, New Westminster, Richmond, Port Moody, Port Coquitlam, Coquitlam, Pitt Meadows, Maple Ridge, and South Delta.

The real estate industry is a key economic driver in British Columbia. In 2016, 39,943 homes changed ownership in the Board’s area, generating $2.5 billion in economic spin-off activity and an estimated 17,600 jobs. The total dollar value of residential sales transacted through the MLS® system in Greater Vancouver totalled $40 billion in 2016.

The Real Estate Board of Greater Vancouver is an association representing more than 13,500 REALTORS® and their companies. The Board provides a variety of member services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit
www.rebgv.org.

The British Columbia Real Estate Association (BCREA) released its 2017 Third Quarter Housing Forecast update today.

Multiple Listing Service® (MLS®) residential sales in the province are forecast to decline 10 per cent to 100,900 units this year, after reaching a record 112,209 units in 2016. Strong economic fundamentals are underpinning consumer demand and are expected to keep home sales at elevated levels through 2018. The ten-year average for MLS® residential sales in the province is 84,700 units.

“British Columbia’s postion as the best performing economy in the country is bolstering consumer confidence and housing demand,” said Cameron Muir, BCREA Chief Economist. “Strong employment growth, a marked increase in migrants from other provinces, and the ageing of the millennial generation is supporting a heightened level of housing transactions. However, a limited supply of homes for sale is causing home prices to rise significantly in many regions, particularly in the Lower Mainland condominium market”.

The average MLS® residential price in the province is forecast to increase 3.5 per cent to $715,000 this year, and a further 4.1 per cent to nearly $745,000 in 2018. However, the provincial average price is being skewed lower as the result of a change in the mix and share of homes selling. Fewer detached home sales relative to attached and apartment properties and a larger proportion of home sales occurring outside the Metro Vancouver region are operating to hold back the provincial averge price. Home prices in ten of the 11 real estate board areas are forecast to rise at a higer rate than the provincial average.

About BCREA
The British Columbia Real Estate Association (BCREA) is the professional association for about  22,000 REALTORS® in BC, focusing on provincial issues that impact real estate. Working with the  province’s 11 real estate boards, BCREA provides continuing professional education, advocacy,  economic research and standard forms to help REALTORS® provide value for their clients.

To demonstrate the profession’s commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods. For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada’s real estate boards to ensure maximum exposure 

of properties listed for sale.

First off, there is the timing. In government, Fridays are usually reserved for bad-news announcements that will, hopefully, fade away over the weekend. Really bad news is relegated to late Friday afternoon, when, again hopefully, coverage will be minimal.

So Premier John Horgan and the BC NDP announcing on Friday that the tolls on the Port Mann and Golden Ears bridges will be eliminated as of Sept. 1 is a curious thing.

It is, after all, great news for those who have to travel over either bridge on a daily basis. The government estimates it will save daily car commuters $1,500 a year and commercial drivers up to $4,500 a year. That's real money back in the pockets of hard-working British Columbians. I lost track of the number of times Mr. Horgan said eliminating the tolls will "make life more affordable for B.C. families" during the announcement. He said it a lot. But for people who live south of the Fraser – the only people in the province expected to pay tolls – it's a good day.

Read more: B.C.'s New Democrats eliminate tolls on Vancouver-region bridges

It's also a good day to take the focus off the fact that a party that railed against "cash for access" fundraisers continues to line its pockets with corporate and union donations, most recently on Thursday with a $500-a-head golf tournament – literally, pay to play. Yes, it has been a long-standing event, and yes, it was scheduled some time ago. And don't worry, getting rid of that filthy corporate and union money will be the first order of business when the Legislature is reconvened. Until then, the NDP, as the Premier has said so many times, is "playing by the rules."

All of that aside, getting rid of the tolls on the Port Mann Bridge alone will transfer more than $4-billion in debt from the bridge to taxpayer-supported debt. Green Party Leader Andrew Weaver immediately criticized the decision as "high cost and low impact," and said the money would be better spent on "high return on investment decisions," for instance, child care, student housing and education. "It is disappointing that the first major measure that this government has taken to make life more affordable for British Columbians will add billions of dollars to taxpayer-supported debt," he said in a statement.

More than that, though, Mr. Weaver said that tolls are an excellent policy tool to manage transportation demand, which is true when they're fairly applied and when alternatives to driving are readily accessible and reliable. "Transport-demand management reduces pollution and emissions, alleviates congestion and helps pay for costly infrastructure. That's why, at the negotiating table when preparing our Confidence and Supply Agreement, we ensured that a commitment was included to work with the Mayors' Council consultation process to find a more fair and equitable way of funding transit in the long term," he said.

That work is, we're told, going on right now with the Metro Vancouver Mobility Pricing Independent Commission, which was created earlier this year. It has been tasked with, according to its terms of reference, "evaluating the viability and acceptability of potential regional-road use charging alternatives for motor vehicles." In the end it is to come up with recommendations on how to implement a co-ordinated regional-road usage charge. In short, you'll pay for every kilometre you drive.

Putting such a system in place will, no doubt, be one of the largest and most complex undertakings in the history of Metro Vancouver transportation. Think about it – transponders in every car, monitors and cameras at key points on bridges and roads throughout the region, a billing system with charges that are fair and equitable, and perhaps the biggest hurdle – convincing the public to accept it.

Other cities have similar systems in place but here we'd be starting from scratch. I would guess that we're at least a decade away from any such thing becoming a reality.

In the meantime, where are we? We have two bridges – both built and financed with the understanding that they would be paid for by tolls, now declared toll-free. We have a 10-year, $7.5-billion Metro Vancouver transportation plan with no sustainable way of financing it in the long term. We have billions of dollars in debt that now belongs to all B.C. taxpayers. And we have taken a step backward on reducing greenhouse-gas emissions.

I don't know, maybe Premier Horgan was right in saving this announcement for a Friday.

While it is certainly welcome news to those who will no longer have to pay the tolls, there's not much in it for the rest of us.

Provided by: Stephen Quinn is the host of On the Coast on CBC Radio One, 690 AM and 88.1 FM in Vancouver.

Photo provided by: Klaus Johansson Photography

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Commercial real estate activity in the LowerMainland declined from the record highs of one year ago and returned to more historically typical levels in the second quarter (Q2) of 2017.

There were 595 commercial real estate sales in the Lower Mainland in Q2 2017, a 32 per cent decrease from the record 875 sales in Q2 2016, according to data from Commercial Edge, a commercial real estate system operated by the Real Estate Board of Greater Vancouver (REBGV).

The total dollar value of commercial real estate sales in the Lower Mainland was $2.886 billion in Q2 2017, a 37.5 per cent decrease from $4.615 billion in Q2 2016.

“Land and industrial sales experienced the largest year-over-year declines last quarter, with salesin both categories down more than one-third compared to 2016,” said Jill Oudil, REBGV president. “Looking back over several years, however, we see that last quarter’s sale and dollar value activity follow more historically normal trend lines.”

Q2 2017 activity by category

Land: There were 227 commercial land sales in Q2 2017, which is a 39.3 per cent decrease fromthe 374 land sales in Q2 2016. The dollar value of land sales was $1.510 billion in Q2 2017, a 28.6 per cent decrease from $2.116 billion in Q2 2016.

Office and Retail: There were 218 office and retail sales in the Lower Mainland in Q2 2017,which is down 23.2 per cent from the 284 sales in Q2 2016. The dollar value of office and retailsales was $0.775 billion in Q2 2017, a 57.7 per cent decrease from $1.835 billion in Q2 2016.

Industrial: There were 114 industrial land sales in the Lower Mainland in Q2 2017, which is down 34.9 per cent over the 175 sales in Q2 2016. The dollar value of industrial sales was $0.243 billion in Q2 2017, a 13.3 per cent decrease from $0.280 billion in Q2 2016.

Multi-Family: There were 36 multi-family land sales in the Lower Mainland in Q2 2017, which is down 14.3 per cent over the 42 sales in Q2 2016. The dollar value of multi-family sales was $0.358 billion in Q2 2017, a 6.8 per cent decrease from $0.384 billion in Q2 2016.

Owned and operated by the Real Estate Board of Greater Vancouver (REBGV), the Commercial EDGE system includes all commercial real estate transactions in the Lower Mainland region of BC, with the exception of Pitt Meadows and Chilliwack, that have been registered with the Land Title and Survey Authority of British Columbia. Commercial EDGE is updated monthlybased on data originating from the BC Assessment Authority. Commercial EDGE does not include share sale transactions as they are not registered with the Land Title and Survey Authority of British Columbia. Please note that historical data may be subjectto revision as transaction records are received from the Land Title and Survey Authority of British Columbia.

The REBGV is an association representing over 13,500 residential and commercial REALTORS® and their companies. It provides a variety of member services, including the Multiple Listing Service® and the Commercial Edge service. For more information on real estate, statistics,  and buying or selling a property, contact a local REALTOR® or visit www.rebgv.org.

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According to statistics released today by The Canadian Real Estate Association (CREA), national home sales declined further in July 2017.

Highlights:

• National home sales fell 2.1% from June to July.
• Actual (not seasonally adjusted) activity in July stood 11.9% below last July’s level.
• The number of newly listed homes edged back by 1.8% from June to July.
• The MLS® Home Price Index (HPI) was up 12.9% year-over-year (y-o-y) in July 2017.
• The national average sale price edged down by 0.3% y-o-y in July.

The number of homes sold via Canadian MLS® Systems fell 2.1% in July 2017, the fourth consecutive monthly decline. While the monthly decline was about one-third the magnitude of those in May and June, it leaves sales activity 15.3% below the record set in March.

Sales were down from the previous month in close to two-thirds of all local markets, led by the Greater Toronto Area (GTA), Calgary, Halifax-Dartmouth and Ottawa.

Actual (not seasonally adjusted) activity was down 11.9% on a year-over-year (y-o-y) basis in July 2017. Sales were down from year-ago levels in about 60% of all local markets, led by the GTA and nearby markets. National sales net of activity in the Greater Golden Horseshoe region was little changed from one year ago.

“July’s interest rate hike may have motivated some homebuyers with pre-approved mortgages to make an offer,” said CREA President Andrew Peck. “Even so, sales activity continued to soften in the Greater Golden Horseshoe region. Meanwhile, sales and prices in Montreal continue to strengthen. All real estate is local, and REALTORS® remain your best source for information about sales and listings where you live or might like to.”

“July marked the smallest monthly decline in Greater Golden Horseshoe home sales since Ontario’s Fair Housing Plan was announced in April,” said Gregory Klump, CREA’s Chief Economist. “This suggests sales may be starting to bottom out amid stabilizing housing market sentiment. Time will tell whether that’s indeed the case once the transitory boost by buyers with pre-approved mortgages fades.”

The number of newly listed homes slipped further by 1.8%, led by the GTA. Many other markets in the Greater Golden Horseshoe region have also seen new supply pull back recently after having jumped immediately following the Ontario government’s announcement of its Fair Housing Plan in late April. New listings were also down in Calgary, Edmonton, Montreal and northern British Columbia, with the lattermost region having been hit by wildfires.

With sales down by about the same amount as new listings in July, the national sales-to-new listings ratio was little changed at a well-balanced 53.5%. By contrast, the ratio was in the high-60% range in the first quarter of 2017.

A national sales-to-new listings ratio of between 40 and 60 percent is generally consistent with balanced national housing market, with readings below and above this range indicating buyers’ and sellers’ markets respectively.

Considering the degree and duration to which current market balance is above or below its long-term average is a more sophisticated way of gauging whether local conditions favour buyers or sellers. (Market balance measures that are within one standard deviation of the long-term average are generally consistent with balanced market conditions).

Based on a comparison of the sales-to-new listings ratio with its long-term average, more than 60% of all local markets are in balanced market territory. In the Greater Golden Horseshoe region, housing markets that recently favoured sellers have become more balanced, with some beginning to tilt toward buyers’ market territory.

The number of months of inventory is another important measure of the balance between housing supply and demand. It represents how long it would take to completely liquidate current inventories at the current rate of sales activity.

There were 5.2 months of inventory on a national basis at the end of July 2017, the highest level since January 2016. This was up from five months in June and up by more than a full month from where it stood in March.

The number of months of inventory in the Greater Golden Horseshoe region is up sharply from where it stood prior to the Ontario government housing policy changes announced in April 2017. For the region as a whole, there were 2.6 months of inventory in July 2017. While this remains below the long-term average of just over 3 months, it is more than triple the all-time low of 0.8 months reached in February and March.

The Aggregate Composite MLS® HPI rose by 12.9% y-o-y in July 2017, representing a further deceleration in y-o-y gains since April. The deceleration in growth from June to July was the result of softening prices in the Greater Golden Horseshoe housing markets tracked by the index.

Price gains diminished in all benchmark categories, led by single family homes. Apartment units posted the largest y-o-y gains in July (+20%), followed by townhouse/row units (+15.9%), two-storey single family homes (+10.7%), and one-storey single family homes (+9.7%).

While benchmark home prices were up from year-ago levels in 12 of 13 housing markets tracked by the MLS® HPI, price trends continued to vary widely by region.

After having dipped in the second half of last year, benchmark home prices in the Lower Mainland of British Columbia have recovered and are now at new highs (Greater Vancouver: +8.7% y-o-y; Fraser Valley: +14.8% y-o-y).

Meanwhile, y-o-y benchmark home price increases were running a little below 20% in Victoria and just above 20% elsewhere on Vancouver Island.

Benchmark price gains slowed again on a y-o-y basis in Greater Toronto, Oakville-Milton and Guelph but remain well above year-ago levels (Greater Toronto: +18.1% y-o-y; Oakville-Milton: +12.7% y-o-y; Guelph: +23% y-o-y).

Calgary benchmark prices further edged into positive territory on a y-o-y basis in July (+1.1%). While Regina home prices popped back above year-ago levels (+3.6% y-o-y), Saskatoon home prices remained down (-2.2% y-o-y).

Benchmark home price growth accelerated in Ottawa (+5.8% overall, led by a 6.8% increase in two-storey single family home prices) and Greater Montreal (+4.9% overall, led by a 7% increase in prices for townhouse/row units). Prices were up 5.4% overall in Greater Moncton, led by one-storey single family home prices which set a new record (+8.9%).

The MLS® Home Price Index (MLS® HPI) provides the best way of gauging price trends because average price trends are prone to being strongly distorted by changes in the mix of sales activity from one month to the next.

The actual (not seasonally adjusted) national average price for homes sold in July 2017 was $478,696, down 0.3% from where it stood one year earlier. This was the first y-o-y decline in the measure since February 2013, reflecting fewer sales in the GTA and Greater Vancouver on a y-o-y basis.

Because these 2 markets nonetheless remain highly active and expensive, Greater Vancouver and Greater Toronto upwardly skew the national average price. Excluding these two markets from calculations trims almost $100,000 from the national average price ($381,297).

PLEASE NOTE: The information contained in this news release combines both major market and national sales information from MLS® Systems from the previous month. 

CREA cautions that average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods or account for price differential between geographic areas. Statistical information contained in this report includes all housing types. 

MLS® Systems are co-operative marketing systems used only by Canada’s real estate Boards to ensure maximum exposure of properties listed for sale. 

The Canadian Real Estate Association (CREA) is one of Canada’s largest single-industry trade associations, representing more than 120,000 REALTORS® working through some 90 real estate Boards and Associations.

Further information can be found at http://crea.ca/statistics.

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It’s probably time for Prime Minister Justin Trudeau to tell his young followers that the “Canadian dream” no longer comes with a lawn.

Last week, Statistics Canada reported a big drop in the issuance of building permits for single-family homes in cities with populations greater than 10,000. Municipalities in June granted permissions for such structures at a seasonally adjusted rate that would yield 65,100 units in a year, the slowest pace since April 2009 and one of the weakest on records that date to 1960.

© Used with permission of / © Rogers Media Inc. 2017. CHART-ONE-Aug14 

The decline is noteworthy because you’d think the stars were aligned for a boom in the construction of dream homes: the economy has been churning out jobs steadily for a year, real-estate prices are high, and interest rates are low. There should be lots of incentive for everyone involved to build, borrow, and buy. Yet that’s not what’s happening. Those high prices have become too much for normal people, especially in Vancouver and Toronto. Tighter lending standards are also forcing dreamers out of the market. And perhaps more importantly, city officials remain stingy with land and permits in the places where most people want to live. “Toronto is a gateway for new immigrants,” Quentin D’Souza, who runs a couple dozen rental buildings in the Greater Toronto Area, told me earlier this summer. “We don’t produce enough new housing for all of those people.”

Since housing is mostly a local matter, you might be wondering why we need to drag the Prime Minister into this.

The answer depends on whether you think the federal government can play a catalytic role in forcing local authorities to confront national issues. Most (not all) agree that income inequality is one such issue. Trudeau certainly does. There is little that he or his cabinet ministers do that isn’t justified by supporting the “middle class and those seeking to join it.” More generous childcare benefits, middle-income tax cuts, multi-billion-dollar infrastructure programs, and new free-trade deals all are necessary to keep Canada from becoming an unequal society, the federal government suggests.

All that is fine. Yet the main thing that is turning Canada into a more rigidly class-based society is the real-estate boom. For whatever reason, most Canadians see a mortgage as preferable to paying rent and maxing out their RRSP deductions and TFSA limits. But in most cities, a decent house is now something only rich people can afford. Vancouver is the world’s third-most unaffordable city, after Hong Kong and Sydney, respectively; and Toronto is now the 13th most unaffordable, behind a group of usual suspects such as Auckland (fourth), San Francisco (ninth), and London (12th), according to the latest Demographia International Housing Affordability Survey. This is not the company that a country that believes in spreading the wealth ought to be keeping. If you don’t think the housing boom is causing angst, then you missed the excellent reporting of Joe Castaldo and Catherine McIntyre in Maclean’s earlier this year. As one half of a young couple that had been priced out of Vancouver told them, “You definitely feel like you’ve been left behind.”

Demographia, a St. Louis-based consultancy that opposes top-down urban planning, keeps its analysis of international housing affordability elegantly simple. It creates a “median multiple” by dividing the median house price in a given market by the median household income. Historically, Demographia says a multiple of three or less suggests normal people can afford a home. That’s the base of its affordability scale. The maximum is five or higher, which is the point at which the survey describes housing as “severely unaffordable.”

Vancouver’s multiple is 11.8 and Toronto’s is 7.7; both scores are a point higher than 2015, suggesting median homes prices in each city increased by the equivalent of a full year’s income in the span of 12 months. In fact, none of Canada’s major cities is affordable: Montreal, Calgary, and Edmonton all are “seriously unaffordable,” with multiples higher than four. Demographia says Ottawa is “moderately unaffordable,” with a multiple of 3.9. This represents a “sea change,” according to the report; until recently, affordability outside of Vancouver had been fairly stable since the 1970s. “The health of the housing market has been deteriorating rapidly in Canada,” the report states.

Trudeau and his ministers know the urban middle- and upper-middle-class Canadians that form the core of their political constituency are sensitive about housing. At a semi-private speech in Montreal this spring, Finance Minister Bill Morneau said that as a member of Parliament and a Cabinet minister, he felt Canadians were “counting on you to ensure their home keeps its value.” Recall “David,” the everyman who appeared on the first page of Morneau’s first budget in 2016: “Though he loved the community he lived in as a child, when it came time to buy his own family home, [David] had to look elsewhere. His old neighbourhood simply wasn’t affordable.” Among the highlights of this year’s budget was a promise to spend $11.2 billion on affordable housing.

Still, it’s fair to ask whether Trudeau has any desire to bring real-estate prices back down to Earth.

Doing so would please the men and women Castaldo and McIntyre wrote about, and surely would be welcomed by those “seeking” the trappings of the middle class. At the same time, any attempt to depress prices would anger anyone who already owns a home, a massive voting block, considering ownership rates now approach 70 per cent. That could be why Morneau talks of “protecting” home values, rather than making housing more affordable. The federal government’s housing strategy will help some people, but it will do nothing to alter price dynamics, especially as the money will be spent over a decade. Morneau initiated regulatory changes that make it more difficult to get home loans, but he so far has stayed away from sacred housing sops, such as the capital-gains exemption on primary residences and the ability of first-time buyers to use their tax-protected savings to purchase homes.

Demographia says Singapore and New Zealand are the only two countries that appear to be taking the issue of housing affordability seriously. (The organization’s analysis is based on assessments of those two countries, along with Australia, Canada, Hong Kong, Ireland, Japan, the United Kingdom, and the U.S.) New Zealand is the more instructive example; its politicians appear to have accepted that home prices are off the charts for lack of supply. Space is dear on a tiny island, but New Zealand authorities have constrained it even more by constraining development. Canada is as guilty of this as any jurisdiction, whether it be restrictive zoning requirements in Vancouver or Ontario’s safeguarding of green space in and around the Greater Toronto Area. The response of governments in Ottawa, Victoria, Vancouver and Toronto to the threat of a housing bubble has been almost entirely focused on gently squeezing demand rather than encouraging more supply.

By no means do I mean to give Demographia the final word on the subject. The outfit submits that sprawling Dallas-Fort Worth is a more livable city than Toronto because Dallas’s inhabitants tend to have shorter commutes to work. That car-loving conclusion gives away Demographia’s ideological bias. No doubt, an interesting argument could be had about whether a future of self-driving, electrically propelled automobiles could be as clean and efficient as better public transit. But only the purest free-market disciples would condemn attempts to make cities denser.

Canada’s bigger municipalities are headed this way. In recent years, they have been encouraging developers to build up, rather than to spread out. Cities issued permits for multi-family dwellings at a seasonally adjusted annual rate of 169,600 in June, the fastest since October 2016. If we assume those permits turn into holes in the ground, Canada is putting up apartment complexes at the fastest rate since the early 1970s.

That’s probably a good thing. It will increase the odds that urban Canadians will at least be able to find a suitable place to live. But will it make people happier? Ideology aside, Demographia has a point when it argues that Dallas beats Toronto also because more people in the Texas city can afford to buy a home. Canadians might prefer urban planning that put “people” ahead of “place.” Take another look at the historical pattern for building permits in that chart above. There was a time when Canada built more single-family homes than multi-family units. The relationship has reversed, and the gap between apartment living and the prospect of backyard barbecues has never been wider in Canada’s cities.

Does any of this really matter? Robert Shiller, a Nobel laureate in economics, thinks it does. The Yale University professor says societies could rue allowing people to be priced out of their communities. “With people of various income levels increasingly divided by geography, income inequality can worsen and the risk of social polarization—and even serious conflict—can grow,” Shiller said recently in an op-ed for Project Syndicate. Inequality of income begets inequality of opportunity, which begets societal tension and political volatility. See: Donald Trump’s America.

A generation of Canadians that took space for granted is now discovering that their future will be measured in 900 square feet or less. That needn’t be a big deal, except as Castaldo and McIntyre showed earlier this year, it is a big deal for a lot of people. Will those people adapt and make the most of their lawn-less futures? Or will they grow to resent the lucky ones who owned homes at the beginning of the boom and the politicians who failed to keep prices under control?

At the moment, it appears Trudeau, Morneau and their counterparts in the provinces and on municipal councils are most concerned with helping the lucky ones. That’s good news for the existing middle class. But if you are seeking to join it, you have reason to be disappointed.

Provided by: Kevin Carmichael with MaClean's