29 August 2018
The poll shows that home prices were up significantly in both cities during the recent years.
Tsur Somerville, senior fellow at the University of British Columbia, was quite surprised by how many homeowners believe a price decline would be a good thing.
“The main idea here is the importance of solving this issue”, – Somerville said.
According to the survey, 56% of homeowners in Toronto say today’s housing prices are affecting the GTA negatively, with 13% willing to see prices falling by at least 30%, and 22% – by 10% or more.
In case of Vancouver, the numbers were even higher: almost three quarters of owners said the cost of a home was “unreasonably high”, 20% would like prices to go down by at least 30%, and 29% – by 10% or more.
Renters in both markets were much more likely to say home prices were too high. Younger residents and those with a low income level were also in this list.
The main three reasons for such a situation, according to respondents, were the same in both cities, although in a different order.
Vancouver residents named foreign buyers as the main factor, followed by wealthy investors and the city’s attractive location. Meanwhile, location was the top reason in Toronto, followed by low interest rates and foreign investors.
Lauster says almost a quarter of homeowners in Metro Vancouver also have a second property, and people often perceive immigrants and visible minorities as foreigners.
While the lack of housing supply and the importance to build more units didn’t get to the top-3 list, Lauster and many economists believe those are the key factors pushing prices higher.
The poll shows that people in Vancouver and Toronto would like to see more government intervention to reduce prices growth, even despite the skepticism that nothing will help anymore.
As you know, since 2015, provincial and municipal governments in both cities have introduced several measures, including taxes for foreign homebuyers. As a result, in Metro Vancouver, home prices stabilized and even went down in case of single-family houses.
Among measures the respondents support or would like to see implemented a speculation tax and limiting the number of units, foreign buyers can purchase, were named.
“Now, people are ready for bold action,” – noted Joshua Gordon, assistant professor at Simon Fraser University.
“Reasonable policy can and will improve housing affordability, so we can’t let pessimism be an excuse for inaction,” – he said.
It’s interesting that the personal influence of high home prices for respondents was significantly less than how they think it affects their region.
For instance, 35% of respondents in Toronto said current housing prices have a negative impact on them, while Vancouver reported 44%.
“No surprise. People make their choices based on the options they have,” – economist Somerville said. “It’s natural predilection to be more positive about our own situations than about more global issues”.
According to Gordon, some people have coped with the crisis quite well, but he knows what issues others are facing.
At the same time, Lauster offers another explanation. The sociologist says although there is real pain people feel as they can’t afford to rent or live in Vancouver, it’s not the case for most of them
“In my opinion, many Vancouver residents don’t consider themselves wealthy while they actually are”, – he said.
“We forget that a lot of people in Vancouver are really fine.”