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Globe says housing costs affecting economy: CIBC's Tal

2022-10-03 07:48 ET - In the News

The Globe and Mail reports in its Saturday edition that sky-high housing costs are an obstacle when it comes to attracting immigrants, said Benjamin Tal, deputy chief economist at CIBC World Markets. The Globe's Erica Alini quotes Mr. Tal saying, "People have to understand that the affordability crisis means that the economy as a whole is operating on a subpar trajectory," and the situation is likely to get worse before it gets better. Canada Mortgage and Housing Corp. estimates the country would need to build 5.8 million homes by 2030 to make housing affordable. There are many obstacles: restrictive zoning laws and byzantine building permit processes, as well as the fact that Canada only recently started accelerating the pace at which it is adding purpose-built rentals. Politicians of all stripes and at all levels of government are starting to promise, or call for, more building. Mr. Tal sees an additional near-term obstacle to the now widely called-for building jack-up: Rising interest rates are pushing up construction financing costs. And that is in addition to supply chain snarls, which have been driving up the cost of materials, and labour shortages, which have been putting upward pressure on wages.

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