Realtors cashing in on Canada’s housing affordability crisis, reports show
Realtors are earning record profits from surging house prices contributing to the nation’s housing affordability crisis reaching “dangerous” levels, two recently released reports show.
Operating revenue for the real estate agents and brokers industry group grew 10.8% from 2013 to $10.8 billion in 2014, raising the operating profit margin from 24.4% to 25.7% fuelled by the housing boom in Toronto and Vancouver regions, Statistics Canada reported today.
The same two regions experienced a marked erosion in housing affordability, where rapid price increases further exacerbated already poor affordability conditions which are now reaching “dangerous” levels, the RBC Housing Trends and Affordability report released last month shows.
The publication shows that it has never been so unaffordable to own a single-detached home in the Vancouver region.
The realtors themselves are artificially inflating the house prices through questionable practices such as “shadow flipping,” where realtors flip a property multiple times before a sale complete, a Globe and Mail probe by by investigative reporter Kathy Tomlinson revealed.
Even the United Nations has warned of a persistent housing crisis in Canada, with the Committee on Economic, Social and Cultural Rights expressing alarm at “absence of a national housing strategy; insufficient funding for housing; inadequate housing subsidy within the social assistance benefit; shortage of social housing units; and increased evictions related to rental arrears.”
“A committee of international human rights experts was able to see what the Canadian government and their political representatives refuse to see – that we are failing to protect a large and vulnerable portion of our population from violations of their fundamental right to housing,” Legal Director at the Advocacy Centre for Tenants Ontario, Kenneth Hale, who was part of the NGO delegation that met with the Committee in Geneva last month, commented.
“Canada’s international reputation has taken an embarrassing nosedive over the past decade,” Helen Luu of the Advocacy Centre for Tenants Ontario and Right to Housing Coalition. “All eyes are on Canada now to see if the new Liberal government will show that it is indeed serious about real change by complying with its international human rights obligations.”