Election promises on affordable housing won't ease supply crunch
Royal LePage is urging homebuyers not to buy into any quick-fix housing promises made by Canada’s political leaders in the run-up to the Oct. 21 federal election.
“The introduction of the federal stress test turned the tap off on demand immediately. That’s the kind of results politicians are looking for: Really quick results. Quick wins,” Royal LePage chief executive officer Phil Soper told BNN Bloomberg in an interview on Thursday.
“Housing is not a quick win. It doesn’t take a day to build a house, and it takes a long time to build multis – condos, towers – which will house a lot of our new homebuyers.”
Canada’s political leaders have offered a different array of housing plans ahead of the Oct. 21 federal election.
The Liberal Party is proposing a hike to RRSP withdrawals for first-time homebuyers, while the Conservatives have vowed to change or possibly even scrap the B-20 mortgage stress tests instituted by the Trudeau government at the beginning of 2018. The Green Party wants to scrap the Liberals’ first-time homebuyer incentive, but the NDP wants to double the first-time homebuyers’ tax credit to $1,500.
Soper also cautioned party leaders attempting to sway millennial votes with housing promises.
“It is our biggest demographic in Canadian history, those 35-and-under, call it 25-to-35 as the peak ages,” he said. “They represent a big pool of voters, but they also represent a big risk for the housing market because when they come in, if there isn’t enough housing for them they will put upward pressure on the prices.”
Canadian home prices rose 0.8 per cent in August, according to the Canadian Real Esatate Association, marking the biggest one-month benchmark jump since April 2017. Meanwhile, Canada Mortgage and Housing Corp. reported that housing starts slowed to 221,202 units in September, beating analyst expectations but falling more than 5,000 units short of August’s totals.
The survey predicted 1.5-per-cent year-over-year rise in aggregate Canadian home prices during the fourth quarter. The predicted $632,226 fourth quarter average home cost is ‘dependent on consistent economic conditions and no new housing policies,’ the survey states.