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The head of the federal housing agency says more Canadians may have to rethink the idea of owning a home, especially in major cities where prices have surged.

“The dream of home ownership may be fading for some,” Evan Siddall, president of Canada Mortgage & Housing Corp., said Wednesday in the text of a speech to a conference in Australia. “Housing affordability has become a serious problem in our major cities.”

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The remarks come the week after Prime Minister Justin Trudeau introduced $40 billion of spending over the next decade to fix up public housing projects and offer new rent subsidies to poorer families. Prices in Vancouver and Toronto have surged and traditional single-family homes can often fetch more than C$1 million, prompting buyers to move into distant suburbs and lawmakers to introduce special taxes on foreign owners.

Higher prices are likely behind a decline in Canadian home ownership rates, which have also fallen in other industrialized nations, Siddall said. Canada remains vulnerable to household debts that have reached 175 per cent of disposable income, he said.

Toronto home prices have climbed 63 per cent over the last five years, with about half of that gain coming in the last two years, according to the Teranet-National Bank Home Price Index. In Vancouver prices have jumped 65 per cent over five years.

Bloomberg.com