Dear Editor:
Re: This is one subject nobody wants to debate, The Record, Aug. 29.
Your Aug. 29 opinion piece discusses the soaring cost of Canadian real estate. While the concern is real, I do disagree with your supposition that it is solely foreign buyers who may be responsible for driving our real estate prices through the roof.
The housing issue should properly be framed as one of increasing unaffordability to the average Canadian family. It was just a few years ago that the Canadian Real Estate Association (CREA) acknowledged Canadian housing prices to be an estimated 25 per cent higher than could be justified.
A study of the ratio between personal income and housing prices since 1961 (sources: Statistics Canada and CREA) suggests that estimate is now approaching 40 per cent and, if one discounts the relatively flat condo market, may in fact be closer to 50 per cent for single-family homes.
Not only has this distortion deprived vast numbers of families from the prospect of home ownership, for many of those who have somehow managed to qualify any "correction" (i.e.: a drop in value) is going to have catastrophic consequences.
That there is something seriously wrong with the Canadian real estate market there can be no doubt. But what exactly? Your editorial suggests substantial foreign ownership as the cause. Well, perhaps that may very well be a factor - there is certainly plenty of anecdotal evidence - but only CREA and the federal government know for sure to what degree.
In any event, it would only be one of several elements. What about speculators? With record low interest rates and a generous capital gains tax regime, widespread speculation is certainly a factor.
Then, too, there is pressure on real estate in general, due to increasing population. There are probably additional factors as well. Taken together, a collection of government policies might well be found to be the foremost driver behind these escalating prices.
Your editorial suggests that political parties are reluctant to look into the cause(s) affecting the sky-high cost of real estate.
However, if increasing numbers of Canadians can no longer afford to buy a home, it should really be a matter of concern to politicians of all political stripes.
Home ownership and the ability to afford a home is about as fundamentally Canadian as it gets. For political leaders to ignore what is a genuine crisis is simply irresponsible.
B. H. Pybus, New Westminster
Editor's note: The editorial did not intend to imply that foreign real estate investment was the only reason housing prices have risen - merely that it is a factor that seems to be too contentious to discuss in political circles.
