With Canada’s spring housing market set to begin, soaring home prices don’t appear to be slowing.
As Western University expert Diana Mok contends, Canadian cities still lag behind other major cities of the world in terms of housing prices but she says that doesn’t mean these high prices don’t still open up the possibility of risk for buyers.
“The issue of affordability has always been around, but has become a bigger issue in recent years,” says Mok, professor in the DAN Department of Management & Organizational Studies at Western.
“Even in mid-sized cities like London and Hamilton, the annual growth rate of house prices is eye popping and jaw dropping, but at the same time if we look at average personal income, real income has hardly increased at all when taking inflation into account, and in some cases real income has declined.”
Mok says that means many younger people are being priced out of the market or are getting into riskier and costlier sources of loans.
“For those who can afford, but are not qualified, for the mortgage from the traditional lenders, they have to go to ‘B lenders’ or ‘C lenders’ which are far less regulated.”
As an associate professor, Mok teaches courses in corporate finance and real estate finance at Western. Among her research interests are urban economic geography and real estate economics. She has published in Papers in Regional Science, Environment and Planning A, Housing Studies, and Urban Studies among others.
Commentary reflects the perspective and scholarly interest of Western faculty members and is not an articulation of official university policy on issues being addressed.
MEDIA CONTACT: Justin Zadorsky, Media Relations Officer, Western University, 226.377.1673 (mobile), jzadorsk@uwo.ca.
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