Are urban housing divides feeding populism?

In the last year, the Greater Toronto Area saw the average residential sale price rise by 29% — up from $675,492 in Q1 2016 to $873,631 in the same period of 2017, reveals a RE/MAX report.

The significant price increase, along with high demand, has spurred a growing number of buyers, known as move-over buyers, to leave the downtown core in search of greater affordability.

And that’s a problem with political repercussions, says Richard Florida of the University of Toronto’s Rotman School of Management, in a Globe and Mail article. For example, Canadians shouldn’t rest easy and assume rising populism is confined to the U.K. or to disaffected parts of the U.S.

Read: Here’s what global experts are worried about

“Remember that Toronto was one of the first places in the world to experience the populist backlash that propelled Rob Ford into the mayor’s office,” Florida writes in the Globe.

Canada’s cities are the country’s engines of wealth, innovation and progress, and “it is imperative that Canada and its major cities aggressively address [the housing] crisis,” he says, to deal with deepening geographic and income divides that are feeding populist political movements.

While Ontario recently announced a series of 16 measures to address housing risks, the effect is yet to be felt.

A report on Canadian housing risks by RBC says the probability of “a steep and widespread downturn” in Canada’s housing market in the next year remains low, though it’s elevated because of overheating in Ontario.

Improving oil prices are positive for housing risk in oil-producing provinces, says RBC, and, across the country, labour market-related risks have eased. Further, the odds of a spike in interest rates are low in the short term.

Read the full Globe and Mail article and the RE/MAX report.

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