A 鈥渟upply response that was weaker than expected, given the upsurge in demand鈥� is the primary cause of escalating home prices in Metro 麻豆传媒映画since 2010, according to a released February 7 by the Canada Mortgage and Housing Corporation (CMHC).
The study, Examining Escalating Housing Prices in Large Canadian Metropolitan Cities, looked at both demand and supply sides of the housing equation in Vancouver, Calgary, Edmonton, Montreal and Toronto between 2010 and 2016.
On the demand side, the CMHC said it 鈥渦ndertook statistical analyses to determine the extent to which rising home prices are consistent with the economic forces that are conventionally associated with upward price movements 鈥� including higher disposable incomes, positive population growth and low mortgage rates.鈥�
The federal housing agency said that the combination of these economic factors played the largest role in rising demand over the study period. 鈥淲hile house prices increased by 48 per cent in 麻豆传媒映画over the 2010-16 period, those conventional economic factors played a part in nearly 75 per cent of this increase, according to our estimates.鈥�
The CMHC added that investor and speculative activity 鈥渁lso contributed to house price increases since 2010, but to a lesser extent than traditional economic factors.鈥�
The agency reported that domestic investors also played a role, in addition to overseas investors. The 226-page report said, 鈥淲e worked with Statistics Canada to develop detailed data on rental income from properties held by individual investors. These data highlighted to us the significant extent to which Canadians purchase properties to enhance their incomes. It also suggested to us that these investors may have played a critical role in increasing the supply of new housing in Canada. Although further analysis is needed, we therefore caution that actions curtailing investors鈥� interest in financing new housing construction could impact long-term housing supply adversely.鈥�
The CMHC鈥檚 study was released the day after the agency examining the growth of non-permanent residents in Canada and their increasing impact on the housing market, in 麻豆传媒映画and across the country.
