Federal housing minister says prices don't need to come lower – others disagree
Housing experts are challenging a federal minister’s claim that lowering home prices is not necessary to improve housing affordability in Canada, reigniting debate over how to address one of the country’s most pressing policy issues.
Gregor Robertson, the newly appointed federal housing minister and former mayor of Vancouver, said after his swearing-in that boosting supply – not lowering prices – is key to affordability. “We need to deliver more supply, make sure the market is stable. It’s a huge part of our economy,” he told reporters.
However, economists and housing advocates are warning that stability alone will not resolve the issue for middle-income Canadians, a report from The Canadian Press highlighted. Mike Moffatt, founding director of the Missing Middle Institute, argued that a price correction is necessary. “The short answer is no. It’s simply not possible to restore broad-based affordability to the middle class without prices going down,” he said.
Increasing costs and the government’s role
Moffatt’s analysis found that if housing prices remain unchanged and wages grow by 3% annually, it would take 18 years for affordability to return to 2005 levels nationwide – and roughly 25 years in Ontario and British Columbia. He added that the price-to-income gap in these provinces has grown so wide that wage growth alone cannot bridge it.
Prime minister Mark Carney offered a more cautious response, avoiding a direct answer but emphasizing the need for “more affordable” homes. He pointed to Liberal proposals to eliminate the GST on new housing and reduce development charges as part of efforts to double the pace of homebuilding.
Carney said increasing the housing supply with prefabricated materials and modern techniques could reduce future home prices. Moffatt agreed that reducing construction costs is vital. If the cost of building doesn’t go down and prices stagnate or decline, housing starts will dry up, Moffatt said.
Economist Moshe Lander of Concordia University echoed Moffatt’s concerns, noting that real affordability cannot be achieved without falling prices. But he questioned the federal government’s role, noting that many regulatory barriers fall under provincial and municipal control.
Lander also highlighted political resistance. “Homeowners will not accept it,” he said, pointing to the risks of alienating voters who rely on home equity for long-term savings. He added that politicians are more likely to court homeowners, who remain in their districts, than renters, who tend to move more often.
Lander said Canada must confront the long-held cultural bias that places homeownership above renting. “I don’t think that we’re being clear with society that this is what that might look like,” he said.
Do you think lowering home prices is the only way to make housing affordable? Share your insights below.
