[Devlin] looks at how population growth is impacting the housing market and says it is something “the Bank of Canada can’t really control” despite it having an effect on inflation numbers.

He says what will happen with the housing market once rates come down is a major risk to the outlook, given how many Canadians are waiting on the sidelines to buy a home.

“If housing prices move up, if shelter costs move up, that’s inflationary,” he said.

The plateau in housing prices seems like it’s caused by the rate hikes. And we expect the BoC to lower rates soon.

Meanwhile, all of the government measures for building housing will take years to have an effect. And, aside from slowing immigration, that’s all the governments have done.

He adds that if Canadians continue to disproportionally allocate most of their income to residential housing, it could be a bit of a drag on Canadian productivity.

Just a wee touch! Our decades of falling productivity and increasing shelter costs can’t be related, can they? /s

Addressing housing costs by changing how we tax housing could have an immediate effect. I’m not sure what exactly could be done, but it seems like governments should be looking into that, since rate drops are coming.