High housing prices across the country have some wondering if government intervention is needed to make owning a house a realistic goal for the average Canadian family.
A BMO Capital Markets report, released Tuesday, suggests that while a real estate market correction is imminent, low interest rates, and levels of immigration and foreign investment have buoyed home prices to historic heights when compared to family incomes.
"At 5.1-times median family income, housing is by no means cheap, costing an extra two years of gross income compared with 2001, when the boom began and valuations were closer to historic norms," noted the report.
In Vancouver, Canada's most expensive city, the average-priced home is now an astounding 11.2 times family income, more than double the decade earlier ratio and the current national figure.
"Riding a wave of wealthy immigrants, Vancouver's house prices have nearly tripled in the past decade, spiralling beyond the reach of most first time buyers or non-lottery winners," the report stated.
"Demographia's survey ranked Vancouver the third least affordable among 325 world markets, just behind Hong Kong and Sydney, two other cities influenced by mainland Chinese demand."
During last week's Federation of Canadian Municipalities meeting in Halifax, Canada's mayors urged the federal government to provide more money for affordable housing and transit to alleviate some of the market pressures.
A former Vancouver City Councillor believes the Government needs a more interventionist approach.
Peter Ladner believes Canada needs to introduce foreign ownership restriction and higher property transfer taxes for those that don't live and work in Canada.
"If our prices are being driven up by people who are simply investing in our community and not living here, there are a whole lot of problems that result," he told CBC Radio.
"(The high prices) erode the economy, it erodes the community when people come here and buy homes they don't live in and it makes the neighbourhoods unsafe and — and less vibrant, it splits up families."
Ladner cites Australia as an example of a country which uses regulatory tools to try and slow ballooning housing costs.
In Australia, foreigners living overseas are prevented from buying existing homes and only allowed to buy or build new ones. Moreover, temporary residents are forced to sell property once they leave Australia, and foreigners are required to build on vacant land within two years of purchase to avoid land banking.
"If we want to look at the options, okay, if it's not restricting foreign ownership what are the options?" said Ladner.
"You can increase supply and — and we're trying to do that, but that's — that's a big problem, too. So let's look at this thing and let's have a discussion about it."