Finance committee  With respect to short-term rental, of course, those are units that are not available for long-term residential uses. The counter side to that, though, is that these are maybe units that wouldn't be built if the availability of short-term rental wasn't there in the first place. The higher returns to putting out a unit for short-term rental probably incentivized a lot of purchases of units that then maybe wouldn't have been built had that demand not been there for those units.

Finance committee  We don't have any analysis that I'm aware of. It's not done in the area that I'm responsible for.

Finance committee  I have not compared them to Canada Savings Bonds rates. I can say that they tend to trade at a slightly higher yield than Government of Canada bonds. I could probably get a better answer from Nicolas, if he wants to chime in.

Finance committee  Thank you, Mr. Chair. This is Bob Dugan at CMHC. I'll start, and then I'll turn it over to my colleague Aled, who is the author of that report. With regard to our approach to estimating the supply gaps, you raise an important point about population growth, which is a key assumption.

Finance committee  Thanks, Mr. Chair. That is a great question. In our opinion, based on the analysis we've done, a lot of it has to do with the fact that supply has not kept up with demand for housing in recent years. We estimate that back in 2004.... That's the baseline for a lot of our study on supply gaps.

Finance committee  Yes.

Finance committee  That is the key message we're putting out there. We need a lot more construction in order to alleviate this supply gap and restore affordability for Canadians.

Finance committee  Hopefully, what that does is stop the erosion of affordability and lead to an improvement, and not just in home prices. I like to emphasize that we care about rental markets as well. We often talk about home prices as a big driver of the erosion of affordability, but what concerns me more is the rental market.

Finance committee  Thank you, Mr. Chair. Thank you for the invitation to speak to this committee once again on behalf of Canada Mortgage and Housing Corporation. CMHC is pleased to offer the committee its trusted expertise, experience and knowledge on the housing market. As this committee certainly knows, Canadians are struggling to pay their mortgages or rents.

Human Resources committee  Absolutely. Thanks for the opportunity, Mr. Chair. The “financialization” of housing is a word we hear a lot. The reality in Canada is that about 95% of the rental market is provided by the private sector, so financialization is something that exists by design in our rental market.

Finance committee  We've tried to take a look at this question using our rental market survey data and looking at the average rents by ownership type. We haven't been able to identify any significant difference between REITs, corporate ownership versus individual investors, or other investors in the rental market.

Finance committee  That's a good question. We don't collect that in the rental market survey, because it's not a starts and completion survey. What we have is the rental market universe and we survey from that. I could see if there's a way for us to answer that, but I don't have it at the tip of my fingers.

Finance committee  Thank you for your question. Of course, supply and demand has a lot to do with it. All markets are connected in one way or another. When housing prices go up, some people can't afford to buy a property so they stay in the rental market. That results in greater demand for apartments, which puts downward pressure on vacancy rates and can put upward pressure on rents.

Finance committee  That's a very good question. Canada Mortgage and Housing Corporation has not done any studies on other OECD nations. So my answer can only cover Canada. In Canada, a number of factors have caused demand to go up: low interest rates, population growth and income growth. On the one hand, all these factors have resulted in strong growth in demand for housing in Canada.

Finance committee  Of course, it's going to depend on how much interest rates go up. In my opinion, the interest rates we're expecting right now will likely not be high enough to bring on a correction in housing prices. Some markets in Canada are overvalued right now. House prices are high compared to fundamentals, so rising interest rates will surely hurt demand.