Canada is one of the many countries of the world where affordability of housing is a huge problem. In fact, in the year 2004, it was estimated that over 1.5 million Canadians experience housing affordability problems. However, despite these figures, Canada is still seen as one of the few places in the world which has affordable housing. In the recent years, construction costs and housing prices in Canada have risen dramatically, and this has consequently led to high affordability rate of housing in the Country. Some of the big cities in Canada such as Vancouver is experiencing a lot of housing problems, and it is not surprising to see homeless people whenever you enter the city. Now the question we are all asking ourselves is what causes the issue of unaffordable housing in Canada? A few months ago, the Royal Bank argued that the housing affordability in the country had reached the worst level and drastic measures had to be taken immediately. Toronto region is one of the places where the Royal Bank explained that affordability had declined extremely to the lowest level. The Canadian government is determined to implement national housing policies which will assist a lot of Canadian people to find suitable and affordable housing (Affordable housing in Canada, 2017)
It is evident that the primary cause of unaffordable housing in Canada is financial problems. For the last three decades, for example, the family income of most Canadian homes has declined spontaneously hindering most families with low and medium-income levels from achieving affordable housing (Housing market and labour market, 2013). This means that individuals who receive low and moderate incomes tend to spend a larger share of their money paying rent. This problem is not going to stop anytime soon since right now the country is facing a lot political and economic challenges that have made housing and land too expensive. In Toronto for example, a good job market and low-interest rates have combined to keep the demand for housing so high. In fact, it is estimated that the affordability is growing so much that it is nearing hazardous levels. To determine the other components that have led to unaffordable housing, it is essential that evaluate the state of the economy, real, income, interest rates, and changes in the size of the demography. Some of the key factors that influence the housing market in Canada include unemployment, economic growth, consumer confidence, interest rates, supply, and mortgage availability. Economic growth of a country affects the housing market in that the demand for housing depends on the income an individual earns (Let's Talk Housing, 2016). People who tend to experience rising incomes and higher economic growth tend to spend more money on houses which in turn will push up prices and increase demand. In events where a recession occurs people will experience falling incomes, and there is a high probability that most of them would not afford to pay rent or buy houses. High unemployment rates in Canada is also another issue that has led to the growth of unaffordable housing. When unemployment is high, more people will not afford to pay rent. Interest rates also influence the cost of mortgage payments. When interest rates are high there will be an automatic increase in the cost of mortgage payments this means that few people will tend to buy houses due to high prices.
Many people in Vancouver nowadays are experiencing a lot of affordability issues, and nearly everyone in the city has been affected. People do not want to be told the same narratives about the rising housing prices instead they want a solution quickly. Following research on the Vancouvers housing mechanisms, it is evident that shadow flipping, lack of supply, and foreign investments are some of the factors that are driving the prices of houses upwards. In fact, a lot of people from Vancouver are unsure whether they can buy a house anymore in the region. The property prices are skyrocketing, and many people are consequently moving away because they cannot afford these prices.
For people who are interested in owning a home, the decision to acquire a house is one of the smart financial decisions one can make. One of the key advantages of homeownership is the price appreciation. It is essential to understand that price appreciation tends to develop home equity. Home equity in this context refers to the difference in the remaining mortgage payments and the market price of the house. Other intangible advantages of homeownership include pride of ownership, peace of mind, and security (Aurand, 2015). This, therefore, means that homeownership provides wealth accumulation and most significantly it is good for the economy. We also see that homeownership tend to offer social advantages beyond economic and financial benefits. In fact, it is estimated that there are lower drug usage and lower crimes among the kids of homeowners. This is because homeowners are likely to engage in local elections, civic engagements, and volunteer activities compared to renters. The important thing here is there is a need for sustainable homeownership in Canada.
S. (2017, November 23). Canada to boost affordable housing, but critics want more land freed up. Retrieved November 26, 2017, from http://www.sify.com/finance/canada-to-boost-affordable-housing-but-critics-want-more-land-freed-up-news-debt-rlxjepdchiafc.html
Affordable housing in Canada - Revolvy. (2017). Retrieved November 26, 2017, from https://www.bing.com/cr?IG=AB9077CB5A924FA98A01CD93B794AA64&CID=3DCB5CEE261764B907AE57A82711651D&rd=1&h=lSCMOrB740eYAlka8VdDFvtyC87VuV6djJKiLxZMgR8&v=1&r=https%3a%2f%2fwww.revolvy.com%2ftopic%2fAffordable%2520housing%2520in%2520Canada&p=DevEx,5417.1
Housing market and labour market: Canada. (2013). doi:10.1787/eco_outlook-v2013-1-graph72-en
Let's Talk Housing. (2016). Retrieved November 26, 2017, from https://www.letstalkhousing.ca/
Perugia, F. (2015). The Changing Image of Affordable Housing: Design, Gentrification and Community in Canada and Europe. Housing, Theory and Society, 33(2), 244-245. doi:10.1080/14036096.2015.1122971
Aurand, A. (2015). Contemporary University Housing Developments in Canada. (2015). University Housing in Canada, 41-113. doi:10.2307/j.ctt1w6tgkx.8
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