Latest news with #MikeMoffatt
Globe and Mail
29-06-2025
- Business
- Globe and Mail
The bitter truth is that cheaper housing means a retirement crisis for homeowners
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian. Economists choose their words judiciously. That is why National Bank of Canada's June Economic Monitor report is notable. The authors say Canada's largest real estate market, Ontario, is in 'disarray.' In British Columbia, the market is 'struggling.' Nationally, it 'continues to slow.' Canada's housing problems are worsening. Federal Housing Minister Gregor Robertson, when asked by a reporter in May if home prices should drop, was clear: 'No, I think we need to deliver more supply, make sure the market is stable. It's a huge part of our economy.' His words left many scratching their heads, including Mike Moffatt, an economist and the founding director of the Missing Middle Initiative, a project based at the University of Ottawa's Institute of the Environment. 'It's simply not possible to restore broad-based affordability to the middle class without prices going down,' he told The Canadian Press. For homeowners, borrowing money is easy. But how do renters borrow money? So why the Housing Minister's emphasis on price stability? Ottawa does not want to trade one crisis, housing affordability, for another, a middle-class retirement disaster. Cheaper homes are the obvious solution to Canada's housing crisis at first blush, a point made in these pages by The Globe and Mail's editorial board. Increase supply to meet demand, and prices fall. Over the last 20 years, home prices to income ratios have risen over 70 per cent, as supply stalled while demand intensified. Ontario's Building Industry and Land Development Association's recent data paints a picture of what 'disarray' looks like. New home sales in the Greater Toronto Area are '87 per cent below the 10-year average.' Based on that average, GTA new home sales should have been about 2,750 in May. Instead, new home sales came in at 345. Dr. Moffatt has helped define what should be affordable for Canada's middle class using the country's National Housing Strategy Act: 'Any young middle-class family should be able to afford a 3-bedroom home in any community.' Such homes are almost always ground-orientated, single-detached, semi-detached or townhouses. What sets these homes apart, according to Dr. Moffatt, is that 'only the growth of ownership-based homes with three or more bedrooms is strongly correlated with the population growth of children under the age of five.' Two decades ago, a young middle-class family in B.C. or Ontario typically spent 40 to 45 per cent of disposable income on such homes. Today, the number is roughly 60 per cent, according to Canada Mortgage and Housing Corporation. Prime Minister Mark Carney's housing plan, promising billions in financing and building 500,000 new homes a year by 2035, leaves to the imagination exactly what types of units will be constructed. If Mr. Robertson is to be believed, the vast majority will not be ownership-based, three-bedroom or more, ground-orientated houses that can accommodate middle-class families with children under five. They would undercut the pricing on similar existing homes. The real reason housing got expensive, and why it will get cheaper For young and older homeowners, equity from the future sale of their houses is the critical piece solving their retirement puzzle. Only 38 per cent of the current workforce has the benefit of an employer-registered pension plan, with most being dependent on their own resources. Yet, less than 40 per cent of Canadian tax filers contribute to a registered retirement savings plan or tax-free savings account. Canada Pension Plan and Old Age Security payments won't suffice. The average CPP monthly payment is about $900 at age 65, while OAS is essentially meant to assist the poorest seniors. Today, and for much of the last decade and more, many middle-class Canadians have been saving for retirement through their mortgage payments. The expected payout comes when they sell their homes and use all or a portion of the equity to generate passive income for retirement. In B.C., where the average house price is about $1-million, and Ontario, where it is roughly $860,000, a dramatic decrease in prices of 40 to 50 per cent is needed to restore affordability, given the median after-tax household income in Canada is $70,500. But this would cut retirement income by thousands annually for homeowners depending on their home equity to finance their later years. To maintain price stability, Ottawa is counting on a strong future economy to boost incomes and close the affordability gap. Dr. Moffatt's research suggests that could take roughly two decades or more to produce results. Canada's Housing Minister has to make a Sophie's choice on housing, as he faces two evils. The first is an affordability crisis keeping young families out of the market. The second is a future retirement crisis for homeowners vulnerable to price shocks because they have all their financial eggs in a real estate basket. Mr. Robertson's emphasis on market stability suggests he has chosen to save many existing homeowners from a future in which retirement marks a quick descent into poverty.
Yahoo
26-06-2025
- Business
- Yahoo
Is Canada setting itself up for a big home price spike in 2030?
Prime Minister Mark Carney has said he wants housing to be more affordable for Canadians. It won't be easy: Housing prices across Canada fell two per cent year-over-year, as of May, but there would need to be much larger drops to make housing affordable for many people. On this episode, we talk to Mike Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa, and co-host of the podcast on housing, the Missing Middle. The name, Missing Middle references many things — the decline in the young urban middle class, the polarization of our politics, and also the missing middle in housing — we have giant condo towers, mid-rise towers and houses, but not enough of the multiunit housing complexes that lie in the middle. Moffatt explains his theory of why housing prices have soared, how the politics of the past few decades have brought us to where we are today, and his view on what needs to happen to bring housing prices back down to earth. If you have any questions about the show, or if there are topics you want us to tackle, email us: downtobusiness@ • Email: gfriedman@ | Twitter: GabeFriedz Canada's auto industry at 'hinge moment' between survival and slow death Canada gets wakeup call that world 'unstable and dangerous place Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Calgary Herald
26-06-2025
- Business
- Calgary Herald
Is Canada setting itself up for a big home price spike in 2030?
Article content It won't be easy: Housing prices across Canada fell two per cent year-over-year, as of May, but there would need to be much larger drops to make housing affordable for many people. Article content On this episode, we talk to Mike Moffatt, founding director of the Missing Middle Initiative at the University of Ottawa, and co-host of the podcast on housing, the Missing Middle. Article content Article content The name, Missing Middle references many things — the decline in the young urban middle class, the polarization of our politics, and also the missing middle in housing — we have giant condo towers, mid-rise towers and houses, but not enough of the multiunit housing complexes that lie in the middle. Article content
Yahoo
26-06-2025
- Business
- Yahoo
Montreal asking rents up nearly 71% since 2019, says StatsCan
The average asking price of rent in Montreal has shot up nearly 71 per cent since 2019, according to a rent report released by Statistics Canada on Wednesday. Between 2019 and the first quarter of 2025, asking rent for a two-bedroom apartment in the country's second-largest city has grown from $1,130 to $1,930, the data agency said in its first-ever quarterly rent statistics report. Elsewhere in Quebec, the cities of Drummondville and Sherbrooke — which had the lowest average asking rents at the start of this year — saw the biggest uptick in average asking rents for two-bedroom apartments since the first quarter of 2019. The report draws from asking rents to illustrate the latest market trends, because "prospective renters typically face higher rents compared with long-term tenants" whose rents reflect past leases, the report said. Some Canadian cities with large renter populations, including Montreal, "have experienced very, very high rent growth" in just a few years, said Mike Moffatt, an assistant professor of business, economics and public policy at Western University's Ivey Business School. Some of those rates are now coming down year-over-year: in Montreal, for example, asking rent for a two-bedroom declined slightly between the first quarter of 2024 and the first quarter of 2025. That drop is more pronounced in places like Ontario's Kitchener-Waterloo region or Kelowna, B.C. While "it's nice to have a decline of three or four per cent, that doesn't necessarily make up for the big changes that we've seen since 2019," said Moffatt. In the rest of Canada, the average asking rent for a two-bedroom apartment was highest in Vancouver, where the figure stood at $3,170 in the first quarter of 2025. It was followed by Toronto ($2,690), Victoria ($2,680) and Ottawa ($2,490). Montreal ranks 17th on that list, according to Statistics Canada. Advocates for affordable housing recently told Radio-Canada that they're on high alert in the lead-up to Quebec's July 1 moving day, with the province's housing tribunal having authorized the largest rent increase in at least three decades earlier this year. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CTV News
11-06-2025
- Business
- CTV News
Calls for tax breaks for seniors looking to downsize their home
For some seniors across Canada, downsizing doesn't make a lot of financial sense. Adrian Ghobrial on the seniors choosing to stay in their homes. For some seniors across Canada, downsizing doesn't make a lot of financial sense. Adrian Ghobrial on the seniors choosing to stay in their homes. CTV National News: Why so many seniors are staying in their homes Governments must give seniors a tax break to make it more financially viable for them to downsize from their family homes, according to a report by the Missing Middle Initiative released this month. The Ottawa-based organization suggests doing so would also open more housing supply for young families and first-time home buyers. 'If a senior wants to downsize and move into a new condo, in Ontario for example, they're assessed GST and they're assessed PST,' says economist and Missing Middle Initiative Director, Mike Moffatt. In Toronto, some pay both a provincial and municipal land transfer tax. In March, the Carney Government announced the elimination of the GST for first-time homebuyers on properties under $1 million. Moffatt and others are calling on the federal government to extend the GST rebate to all who are purchasing 'owner-occupied homes' and for provincial governments to match that rebate with incentives of their own. 'If that happened, it would shave up to 13 per cent off the cost of new homes' shares Moffatt. In an email, CTV News asked the federal government if they would consider the extension. 'This GST rebate is intended to help first-time home buyers enter the housing market, rather than people who already own a home,' an official for the Department of Finance replied. Effie Panagiotopoulos' parents, who are in their mid 80's, live in a two-storey, four-bedroom home in Toronto's east end, which they built in 1988. Panagiotopoulos, a real estate agent who specializes in helping seniors downsize, says it would be a financially questionable decision should her parents move into a bungalow that would be better suited to their needs. 'It doesn't add up -- pay all those expenses to move from a two story to a bungalow. I mean, the (price difference) is not that big. So where do they go? Do they leave the city? Leave family and friends?' Panagiotopoulos tells CTV News. Like many aging Canadian couples, Panagiotopoulos' parents have also had to navigate unexpected expenses due to her mother's deteriorating health. Anna Panagiotopoulos, 85, was diagnosed with dementia five years ago. The couple have had to retrofit their family home with a lift for the staircase, among other items they've had to purchase to help caregivers move her mother around her home. Her daughter admits that for her parents to make the move and downsize, it must be their own choice. Though whether it's a real estate client, or her parents, the younger Panagiotopoulos shares that she sees it everyday. 'They (seniors) want to make a move, many times they need to make a move, but they're looking at all the costs involved, and it simply isn't worth it for them. They've paid taxes their whole life, they need a break so they can downsize and still live comfortably,' she said. The Canadian Centre for Economic Analysis estimates that there are 4.4 million empty rooms in Ontario alone, in part because of seniors and empty nestors who won't, or in some cases, can't afford to downsize. Moffatt believes that 'one way to help first time home buyers, is to help seniors downsize with incentives, because the senior who downsizes from their suburban home, frees up that home for the next generation of families,' while creating more supply for the housing market as a whole.
