Unlocking more supply is the only viable long-term solution
Boosting urban and suburban density can help moderate some of the outsized activity that has become increasingly apparent in Canada’s largest housing markets, according to the head of the Canadian Imperial Bank of Commerce.
“There’s not enough supply and in the end, you can regulate, regulate, regulate or you can look at opening up the market to more housing supply and I think that is the real long-term solution,” CIBC chief executive Victor Dodig told BNN Bloomberg.
The comments came in the wake of new data from regional real estate boards, which indicated that average home sales prices last month reached roughly $1.098 million in Toronto and $1.123 million in Vancouver.
Along with improving density, Dodig said that policy makers should focus on upgrading transit infrastructure and freeing up non-environmentally protected lands in newer communities.
Such steps could contribute to a less inflamed market, despite a likely post-pandemic population boom that could further impel demand.
“I don’t see a collapse in the housing market. Prices are high and unfortunately, they will remain high even after COVID,” CIBC deputy chief economist Benjamin Tal said recently. “That’s the reality of the situation in the Canadian housing market until we fix the supply issue that is really impacting valuation in big cities.”