If there's one thing that unites the majority of Canadians, it's that we agree there's a lack of affordability when it comes to the housing markets of Vancouver and Toronto.

The federal government recently announced new measures to try and cool these hot real estate markets by increasing the minimum insurable down payment required on homes over $500,000. The change took effect Monday.

Only time will tell how effective this measure will be. We reached out to economists and real estate experts to ask for their best ideas on slowing down Canada's big-city markets.

Tax foreign owners more heavily

John Andrew, director of the Queen's Real Estate Roundtable, says foreign investment in high-end properties is driving up prices, especially in Vancouver.

He suggests that B.C. should allow the city to raise property tax rates on foreign owners. "This could have a very significant effect on cooling housing markets, if the property tax rate for foreign owners was significantly higher."

However, he says the government would first have to do its due diligence when it comes to identifying foreign buyers who hide behind a Canadian friend or relative.

"Already we know that some of those houses are being bought by international buyers but they're being put in the name of a Canadian citizen … That's a regulatory issue that they could solve but there isn't the political will to do it."

$500K downpayment graphic

The CMHC now requires a 10-per-cent down payment on the portion of any mortgage it insures over $500,000. The five-per-cent rule remains for the portion up to $500,000. (CBC News)

Foreign owners of Canadian real estate pay virtually no income tax at the moment.

Andrey Pavlov, a real estate finance professor at Simon Fraser University, thinks the government should change the definition of residency "so that someone who owns a $4-million home in Vancouver pays taxes on their worldwide income, not just on their Canadian income, which is typically zero."

Capital gains by foreign real estate investors are also generally not taxed, which Andrew wants to see changed.

"Foreign owners should probably pay a marginal tax rate on 100 per cent of their capital gains. I think that would really, really slow things down."

Do something about our ultra-low interest rates

Pavlov says while Canada's current low interest rates may be good for the flagging economy, they can also artificially inflate real estate prices.

When interest rates are low, people are able to afford more expensive homes, driving housing prices through the roof.

"If the Bank of Canada is determined to keep interest rates low," says Pavlov, "then reserve requirements for mortgages can be increased so that mortgage rates return to normal levels."

Andrew says banks should be more diligent in stress-testing buyers when they take out a mortgage to ensure they can still afford it when rates inevitably rise. This would cut down on the amount of people buying the priciest homes they can afford, putting downward pressure on the market.

Deal with density

In highly congested markets like Vancouver and Toronto, Pavlov says investment in transportation infrastructure would go a long way toward expanding the boundaries of desirable housing.

"In most cities in North America, a reasonable commute of 30 minutes takes you 20-30 kilometres from your work," he says. "In Vancouver, for example, a 30-minute commute takes you five to eight kilometres, regardless of mode of transportation."

CMHC Housing Starts 20150811

In highly congested markets like Vancouver and Toronto, one expert says investment in transportation infrastructure would go a long way toward expanding the boundaries of desirable housing. (Graeme Roy/Canadian Press)

University of British Columbia economist Joshua Gottlieb says that single-family homes in hot urban housing markets are "just an incredibly inefficient use of land when there's so much demand to live there."

Gottlieb feels that increasing housing supply is key, whether it's through reducing construction regulations to allow for more highrises in residential neighbourhoods, or by penalizing real estate investors with extra taxes if they let their properties sit vacant.

Or don't raise taxes?

Unlike the other real estate experts we interviewed, Don Campbell, founding partner of the Real Estate Investment Network, doesn't think raising taxes is an effective solution for anyone.

He cites the second land-transfer tax added in Toronto to try to cool down the market.

"It slowed the market down for a very short period of time, so there was this new tax and everyone went 'Oh my god, this is going to kill the market.' Well, as we know, Toronto's not a dead market."

Campbell says when extra taxes are added in the real estate world, there's a slight dip in demand, and then the tax gets normalized and the market charges on.

What does he think would be effective?

"Maybe if they drove unemployment up to 15 per cent — that would slow the market down," he jokes. "But we don't want that!"