30 per cent of house buyers are investors.

The Globe and Mail reported on Sept. 8, 2023, that "Investors were responsible for 30 per cent of home purchases in the first three months of [that] year, according to data released by the Bank of Canada. That is up from 28 per cent in the first quarter of [2022], and 22 per cent in the same period in 2020."

An investor, according to this report, is a buyer who took out a mortgage to buy a house while maintaining a mortgage on another.

"The presence of investors in real estate markets can amplify house price cycles," the Bank of Canada said in a note accompanying the data.

"During housing booms, greater demand from investors can add to bidding pressures and intensify price increases," said the note. "Similarly, when prices are stable or declining, a lower influx of investors can add downward pressure on housing demand and prices."

The article goes on to report that, "So far, the federal government has not addressed individual domestic real estate investors as it tries to come up with policies to deal with the lack of affordable housing. Instead, Ottawa has targeted foreign real estate buyers with a ban on purchases until the end of 2024."

Fast forward to April 11, 2024, when CBC News reported a number of administrative changes Ottawa had announced – allowing first-time house buyers to put more of the dollars in their RRSPs toward a down payment, granting more time to pay it back, and a number of liberalizations of the Mortgage Charter – to enable first-time house buyers to pay today's ridiculously inflated house prices.

These changes amount to a set of pass-through subsidies to holders wishing to sell properties at the rarefied height of today's house market because not only will these subsidies not reduce house prices, but by pumping cash into first-time buyers' hands, they will obviously support the unsustainably high house prices that have resulted from financializing housing in Canada.

When so few buyers can afford to buy a house and so many investors are distorting prices, a better plan than putting more money in first-time house buyers' hands is to prohibit every category of investor – from hedge funds to REITs to small, independent housing market predators – from buying houses and condos and thus stem the tide of houses and condos being sold periodically or rented at exorbitant rates.

Prices would therefore come down. Why? Because the supply of potential buyers sufficiently flush to pay the going rate for a house or condo not meeting the demand by sellers looking to make a killing on the properties they hold will force those sellers to take a haircut.

Ottawa needs to understand that its function when it comes to housing is not to maximize the economic rents property holders get to extract from Canada's wealth-creating sectors but to house Canadians at prices in line with the productivity of Canada's real economy.