The rich only get richer, pushing out other Canadians from the housing market
Much of the nation’s purchasing power is in the hands of its top 1%, if Statistics Canada wealth data covering 2017 is any indication.
The incomes of this cohort have increased much faster than those of everybody else during that year, posting 8.5% annual growth to an average of $477,700.
The rises were even more pronounced among the richest Canadians. Those in the top 0.1%, taking home at least $740,300 in 2017, saw 17.2% more income than in 2016.
And those in the top 0.01%, who made $2.7 million or more, had 27.2% more earnings. Indeed, this was the fourth largest annual increase in 35 years.
In contrast, the average total income of all tax-filing Canadians grew by 2.5% to $48,400. The bottom half of the population saw their incomes rise by 2.4% to $17,200.
The one percenters’ marked impact on the housing market is readily apparent, as any new supply that gets built tend to be high-end offerings which cater solely to wealthy domestic and foreign investors.
Andy Yan, the director of the City Program at Vancouver’s Simon Fraser University, warned that housing in Canada’s largest cities no longer exists for Canadians, but rather for the highest bidder.
“It’s not about supply or demand anymore,” he lamented. “It’s ‘who are we building for?’”
The situation is especially dire in Toronto, where 39.7% of condos are either vacant, rented out, or used as second properties by their owners.
Realosophy Realty president John Pasalis argued earlier this year that the growing prevalence of investment-use condos is a major factor in sky-high housing prices, further adding fire to the market’s long-running home affordability crisis.
“Five years down the road, do we really need 50,000 micro-condominiums that are renting for $2,000 a month?” Pasalis stated at the time, as quoted by The Guardian. “I think this is the risk when your entire new housing supply is driven by what investors want, rather than what end users want.”