Most Canadians want more government intervention in housing market, poll suggests

Two-thirds of Canadians included in a recent poll said the government should get more involved in the housing market to ensure the system is fair.

That's one of the main conclusions of a report released Friday by the Angus Reid Institute, based on the opinions of a representative randomized sample of 5,867 Canadians who were polled online in the first two weeks of February.

Across the country, two-thirds of those polled thought the government needed to intervene more in the housing market. The remaining third thought that government should stay out and leave it to the industry to manage.

It's not clear, however, what form of intervention that should be. The questions didn't specify a particular level of government or method of intervening.

Ottawa has already recently moved to cool a particular segment of the market, requiring down payments of at least 10 per cent for properties valued at more than $500,000.

That takes aim at two markets in particular — the Greater Toronto and Vancouver areas — where starter homes are for the most part priced above that threshold. The CMHC rules could have the effect at cooling the lower end of those hot markets without harming other markets where speculation isn't seen to be as much of a concern.

More than seven per cent of poll respondents said the new rule changes made them less likely to buy a home now. Extrapolating the sample size across the Canadian population, that could work out to as many as 2 million people across Canada, Angus Reid says.

But that isn't the only area where government intervention has been debated in recent weeks.

Earlier this month, a practice known as "shadow flipping" has come under fire. Essentially, by taking advantage of a clause in standard real estate contracts known as an "assignment clause," some realtors been generating huge commissions by flipping properties between a number of buyers until the ultimate sale is booked.

Critics say that abuses a system that was originally designed to protect sellers in the event of a buyer backing out by merely adding to the speculation by driving up prices multiple times during a single sales transaction.

Respondents to the Angus Reid poll were solidly against the practice, with 65 per cent of them saying shadow flipping is "unacceptable." That was especially true among respondents from B.C., where shadow flipping has become prevalent according to recent media reports. And older Canadians were also more likely to be against the practice than younger Canadians were.

House prices 'unreasonable'

All in all, the poll found that more than half of respondents — 56 per cent — of Canadians who live in cities say housing prices in their area fall outside of what could be considered "reasonable."

People who live in the hot markets of Toronto and Vancouver have complained about housing prices in previous reports. But Angus Reid's findings are different in that even if those two cities are stripped out, a majority of people still say prices are too high where they live.

"No fewer than 45 per cent in Edmonton, Calgary, Winnipeg, Montreal or Halifax view prices as either high or unreasonably high," Angus Reid said in a release accompanying the poll.

Even in Calgary, where the ongoing economic downturn has slowed new construction and left analysts warning a market correction may be underway — nearly half of respondents said prices remain too high.

"Residents in the other cities canvassed are also feeling squeezed by the cost of real estate — even if their actual costs pale in comparison to the big two markets."

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