Cities such as Vancouver and Toronto, with longer and less certain approval timelines, tended to see less growth in housing stock.
Affordability in Toronto has eroded to an all-time low, with prices jumping by more than 50 per cent in the past five years.
Regulatory red tape is resulting in fewer new homes than there otherwise would be with a growing pool of buyers, contributing to rising prices.
It’s impossible to achieve housing affordability unless the supply of new homes keeps up with demand.
Demand-side forces are still at play regardless of the new tax on foreign buyers.
This tax will add roughly $140,000 to a typical Greater Vancouver real estate transaction.
Restricting Greater Toronto’s housing supply has consequences beyond the initial impacts on housing affordability.
The Bank of Canada and other central banks around the world have artificially lowered interest rates, making investment and risk-taking much cheaper.