Today, those neighbourhoods are increasingly occupied by aging empty-nesters, often single seniors living alone in giant homes. Even in rapidly-growing cities like Toronto, suburban neighbourhoods are actually shrinking in population.
All this points to the need for better land use, especially if — as is the plan — Canada’s population continues to grow rapidly through immigration.
Housing affordability eroded to its worst level in nearly three decades in Canada in the first half of this year. Market theory tells us the best way to reduce home prices is to increase supply. With the increasingly limited space we have, smaller housing units are a practical solution.
Poloz’s rate hike doesn’t help buyers much, but if it does nudge buyers away from the McMansion lifestyle, we may all be better off in the long run.