Mr. Ahmed Hussen Needs to Apologize to All Canadians for His Comments on Canada Housing

Mr. Ahmed Hussen Needs to Apologize to All Canadians for His Comments on Canada Housing

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Logistic Progression started this petition to Federal Minister Ahmed Hussen (Federal Government of Canada)

 

Canada’s housing market is on fire again. And this time, it is not only limited to big metropolitan centers, but also small towns and cities such as Hamilton and Moncton. Many are expressing concerns of unsustainable price growth and speculation, and have warned about potential risks. [1][2][3][4][5][6][7]

However, in an interview with CBC about the housing market, Federal Minister of Families, Children and Social Development and the Minister responsible for Canada Mortgage and Housing Corporation (CMHC) - Mr. Ahmed Hussen says he believes home ownership is "still within reach for many Canadians and in the majority parts of the country." And "It is also fine to live in a rental unit and that's OK as well. There's nothing wrong with that.

Such comments are astonishingly tone deaf to say the least. A recent research from a UBC Professor shows that the number of years of full-time work for young Canadians to save up for a down payment has jumped from 12.7 to 14.3 in just one year form 2019 to 2020 [8]. And young families often find themselves trapped in bidding wars, with their first home more and more out of reach, even in small towns and cities [9] [10]. However, Mr. Ahmed Hussen seems to be totally unaware of this situation, and only willing to talk about the Liberal’s National Housing Strategy and First-Time Home Buyer Incentive. The first started back in 2017 and seems to have no effect on the astronomical housing price growth since then. And the second is believed by many to only create more demand and further drive up prices [11]. This could deliver a signal that the political elites in Ottawa are now completely out of touch from the people they’re supposed to represent. And it would potentially create a negative impact on the credibility and people’s confidence of the current government.

Renting is fine if and only if renting versus owning is just a lifestyle choice. However, that is far from the truth. In Canada, the capital gain from people’s primary residence is tax free, and that has made primary residence the most important investment an everyday Canadian can have in their lifetime. The COVID shock and government’s Quantitative Easing program have led to a steep appreciation in asset value. Based on a report from BNNBloomberg, during the pandemic economic downturn that has caused 3 million Canadians to lose their jobs, Canada’s national household net worth has surprisingly jumped by more than $600 billion, and the main contributor is the value of land and residential structures held by households [12]. This has created an enormous widening wealth gap between people who own housing and people who don’t. As the Federal Minister of Families, Children and Social Development, rather than trying to address the inequality issue, Mr. Ahmed Hussen’s comments seem to be trying to legitimize the existing wealth gap and encourage people at a disadvantage to simply accept the status quo.

As the Minister responsible for CMHC, Mr. Ahmed Hussen’s comments would clearly be well received by market participants and possibly be further interpreted. This may be seen as a form of “government endorsement” or even “government encouragement” to the current price growth, which has been viewed as “exuberant” and “unsustainable” by many sources [13][14][15]. It could pose as a potential risk to further fuel market sentiment and lead to unexpected outcomes.

Therefore, we demand Mr. Ahmed Hussen to come forward and present a detailed explanation of why he said what he said, and publicly apologize to all Canadians for his imprudent comments.

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We are a group of everyday Canadians who are concerned with the current housing market and where it may lead Canada’s future to. We welcome anyone interested to come and join our discussion on Reddit (/r/canadahousing) and the Discord channel (https://discord.gg/TkUJVAEf

 


Link to the original CBC Report:

https://www.cbc.ca/radio/thecurrent/the-current-for-march-30-2021-living-conditions-1.5969479/as-house-prices-soar-is-home-ownership-in-canada-becoming-something-only-the-rich-can-afford-1.5970042

 

References:

[1] “Canadian Housing Boom Raises Concern, With Homes Selling Far Above Ask Prices” WallStreet Journal - https://www.wsj.com/articles/canadian-housing-boom-raises-concern-with-homes-selling-far-above-ask-prices-11616590877

[2] “Speculators Distorting Canada Housing Boom, Economists Warn” Bloomberg - https://www.bloomberg.com/news/articles/2021-03-05/speculators-distorting-canadian-housing-market-economists-warn

[3] “Real estate frenzy hits small cities in Ontario” The Globe and Mail - https://www.theglobeandmail.com/business/article-real-estate-frenzy-takes-hold-in-small-town-ontario/

[4] “House prices are going bonkers again. Where is the outrage?”

https://www.theglobeandmail.com/opinion/article-house-prices-are-going-bonkers-again-where-is-the-outrage/

[5] “Hamilton, Moncton becoming highly vulnerable to housing bubble, CMHC says” BNNBloomberg - https://www.bnnbloomberg.ca/hamilton-moncton-becoming-highly-vulnerable-to-housing-bubble-cmhc-says-1.1537565

[6]“Canadian housing market is 'overheating,' RBC warns” FinancialPost -  https://financialpost.com/real-estate/canadas-biggest-bank-says-the-housing-market-is-overheating

[7] “BMO report calls on policymakers to ‘douse the fire’ on rapidly rising real estate prices” The Globe and Mail - https://www.theglobeandmail.com/business/article-bmo-report-calls-on-policymakers-to-douse-the-fire-on-rapidly-rising/

[8] “Canada’s Housing Bubble Is Getting Way Worse, And Young People Are Screwed” VICE - https://www.vice.com/en/article/epdeww/toronto-canadas-housing-bubble-is-getting-way-worse-and-young-people-are-screwed

[9] “First-time home buyers squeezed out of London market” CBC - https://www.cbc.ca/news/canada/london/first-time-home-buyers-squeezed-out-of-london-market-1.5908225

[10] “Halifax's rising house prices present increasing risk: CMHC” CBC - https://www.cbc.ca/news/canada/nova-scotia/halifax-s-rising-house-prices-present-increasing-risk-cmhc-1.5847724

[11] “Will the new First-Time Home Buyer Incentive drive up home prices?” The Globe and Mail - https://globalnews.ca/news/7505956/first-time-home-buyer-incentive-vancouver-victoria-toronto/

[12] “Property boom drives pandemic surge in Canada household wealth” BNNBloomberg - https://www.bnnbloomberg.ca/property-boom-drives-pandemic-surge-in-canada-household-wealth-1.1535171

[13] “Bank of Canada warns buyers of 'early signs' of overheating in housing market” CBC - https://www.cbc.ca/news/business/bank-canada-overheating-housing-market-1.5925073

[14] “Housing bubble worse than lead-up to subprime crisis: Rosenberg'” BNNBloomberg - https://www.bnnbloomberg.ca/canadian-housing-bubble-worse-than-lead-up-to-u-s-subprime-crisis-rosenberg-1.1579481

[15] “Feds watching housing markets 'very closely' as CMHC warns of vulnerabilities” FinancialPost - https://financialpost.com/real-estate/canadas-housing-market-in-overheating-territory-warns-cmhc

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