There are already early signs of rising mortgage delinquency rates. First-quarter data from Equifax shows 30+ day delinquencies already up 17% year-over-year. However, this is a lagging indicator as many households have taken on record levels of non-mortgage debt to float their skyrocketing expenses.
There are two central issues here. We are in an unanswered housing affordability crisis and there is a lack of housing supply, with the latter feeding the former. While demand for homeownership is forecast to remain strong with record levels of newcomers arriving, new housing starts are struggling to catch up from last year’s slowdown.
But what can government do for the short term to help Canadians afford a place to call home? Headline-grabbing policies like foreign buyer bans and vacancy taxes are widely perceived by experts as just that, retail politics that fail to respond to the real issues. However, there are some straightforward solutions.