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<\/a>Photo: James Bombales<\/em><\/p>\nWhen it comes to addressing Canada\u2019s rapidly overheating housing market, getting more homes built, especially affordable rentals, is the first recommendation RBC Senior Economist Robert Hogue has for policymakers.<\/p>\n
The economist\u2019s recommendation, published this week in a Q&A on the RBC Economics site, comes as there is a growing sense of urgency around acknowledging and addressing the country\u2019s boiling hot market.<\/p>\n\n
Hogue says in the Q&A that Canadians are accustomed to hearing about affordability issues and overheating in Toronto and Vancouver.<\/p>\n
\u201cNow, it\u2019s a national concern. In fact, prices are rising fastest in smaller markets like Mission BC, Tillsonburg ON, Sainte-Ad\u00e8le QC and Moncton NB,\u201d he says.<\/p>\n
Policymakers at all levels of government should be paying attention and acting quickly as the current pace of home price gains threatens to destabilize the economy in the future. A home price correction is possible and, according to Hogue, the current situation resembles the overheated market of the 1980s.<\/p>\n
First on the economist\u2019s list of policy recommendations? Get more homes built.<\/p>\n
Housing supply issues existed before the pandemic swept across the country, so policymakers should look here first to make the changes necessary to increase supply.<\/p>\n
Speeding up the new housing approvals process, adjusting municipal zoning to allow for more medium-density housing in urban areas, and increasing the country\u2019s stock of affordable housing are all impactful initiatives that would boost supply, says Hogue.<\/p>\n
Removing disincentives to building new rental apartments, or even \u201ctipping the scale in their favour,\u201d would also be desirable.<\/p>\n
\u201cThe need for more affordable rental options for ordinary Canadians is greater than ever. Most of the supply-side measures we\u2019ve outlined here fall into local authorities\u2019 lap, although higher levels of government have a role to play. However, they aren\u2019t quick fixes,\u201d Hogue says.<\/p>\n