Ottawa, (Business News Report)|| The Canadian real estate sector is facing a major crisis due to a shortage of labor, which has pushed the prices of homes and real estate to a significant rise.
Canadian Housing Minister Ahmed Hussein faces an arduous task, amid his government’s attempts to rein in the successive rises in real estate prices.
The housing minister has a plan to double the pace of home construction in the country within 10 years, but the country’s lack of workers undermines government efforts to increase supply in the real estate sector.
Hussain, who took office after last year’s election, says Canada has no choice in the face of rising property prices if it wants to continue to boost its economy and attract skilled immigrants.
“The issue of housing supply is critical to our future success as a country,” Hussen said in an interview with Bloomberg.
House prices in Canada were already high before the outbreak of the Coronavirus pandemic, and before they rose more than 50% in the past two years, so the rise in housing prices has become one of the most important political issues in the country.
With it becoming increasingly difficult for younger families to own a home in most large cities, affordability has become a major problem for Prime Minister Justin Trudeau’s liberal government.
The government says average new housing units have averaged about 200,000 units a year in recent years, but has pledged to double the current pace of new construction over the next decade.
But Avery Shenfield, chief economist at research firm CIBC World Markets, questioned the feasibility of the government’s plan to increase home numbers given the labor restrictions.
“Without a targeted immigration plan, or a coordinated effort to persuade young residents to consider using a hammer instead of a laptop, Canadians will continue to struggle to own their own home,” Shenfield said.
In turn, the housing minister says he knows these uncertainties exist, but argues that his government has already shown its ability to deliver ambitious programmes.
Boosting home supply has been the focus of the housing plan in the Trudeau government’s spring budget.
The C$4 billion ($3.2 billion) Housing Accelerator Fund is the largest new budget housing measure that municipal governments can tap into in exchange for measures to boost home supply.
According to official data, the monthly increase in house prices reached record levels in February. The standard price of the house was 869,000 Canadian dollars.