One Liberal MP argues that a housing correction may not be the silver bullet solution needed to fix Canada’s mounting housing affordability crisis.
“When people tell you they want to cut housing prices by 10 per cent… there is no magic switch in the Finance Department or the Bank of Canada where you just go to it and reset everybody’s home equity rates and housing prices across the country,” Spadina-Fort York MP Adam Vaughan, whose portfolio covers housing issues as parliamentary secretary for the Liberal government, said in an interview.
“Nor can you compel people to sell for less than the house is worth.”
Vaughan added that a home price correction would also have adverse impact on many of the recent homebuyers.
“You’ve got to look at it from the perspective of the homeowner: people who own a single home to live in with their household, their families… you can’t just go around sort of targeting their equity as the solution,” Vaughan said.
“It’s not fair to those individuals who just bought a house to suddenly find themselves below water with a mortgage…”
The goal for the Liberal government is to bring housing affordability within reach for Canadians, Vaughan explained.
“If you own 10 condominiums, I’m not here to guarantee your investment any more than I can guarantee your stock investment, nor should I. Nor should the government,” Vaughan said. He added the government’s aim is to pull speculation out of home price inflation.
“A single-family home is being purchased, not as an investment primarily, but as a place to live. We have to be careful about how we move in the space and how we deal with people’s equity,” he said.
Vaughan said he hopes to see measures that would curtail foreign and institutional speculation when Ottawa tables the fiscal budget next week.
“If we have to curtail or limit or regulate that more closely, you’ll find my voice being front of the line saying that’s what we should be looking at,” Vaughan said.