I think that what would be most helpful in this situation is for Federal and Provincial governments to invest in non-market cooperative housing that would offer locals ability to pay reasonable rents. These programs exist in Western and Northern Europe where it is far less common for people to own property. Rather, large condo/townhouse complexes are owned by government or coops and mortgaged on long term 50-60 year mortgages. As a tenant, you pay a part of that mortgage. These things exist in Canada, but are a tiny fraction of all the housing types. Unfortunately, these programs were abandoned by the feds in favor of CHMC underwriting everything under the Sun which contributed to the current situation.
As for the assessment of the cause of the problem this article I think paints a correct picture:
http://www.vancouversun.com/business/tim...ibc+economist+weighs/11917445/story.html
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“I asked many questions and after a few bottles of wine I got some answers. And the picture that is emerging is the following — pure foreign investment is probably much smaller than perceived by many,” writes Tal.
What has emerged is what the economists calls a satellite family situation in which the money is coming from outside the country but family members — mostly wives, children or students reside in Canada. That scenario is is probably more common than perceived, he says.
“Flipping is not the main motivation here and their down payment is often significant,” says Tal.
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