News: Upcoming Elections & Federal Political Positions on Housing

Industry News Week of 30 Aug 2021.

How federal parties plan to fix housing crisis after years of failed policies | Financial Post One of the most pressing issues for Canadians as the election campaign heats up is the soaring cost of housing. The Conservatives and NDP wasted no time in releasing platforms with promises to address the problem, using solutions largely targeting new home construction and favourable tax measures. The Liberals haven’t been as quick to the draw in releasing a full-fledged party platform on housing. But after years of policies that real estate analysts and financial watchdogs say have failed to meaningfully move the needle, Prime Minister Justin Trudeau has plenty of work to do to convince priced-out younger Canadians that he can rein in runaway home prices. (Full plan here) The Conservatives’ housing platform released this week includes pledges to build one million homes over the next three years, place a two-year ban on foreign real estate investors, and adjust the mortgage stress test in a way that benefits contractors, small-business owners and non-permanent employees. (Full plan here) The NDP, meanwhile, committed to creating 500,000 affordable housing units within 10 years, re-introducing 30-year CMHC-insured mortgages on entry-level homes, imposing a 20-per-cent tax on homes purchased by buyers who are not Canadian citizens or permanent residents, doubling the homebuyer’s tax credit to $1,500 and waiving the federal portion of GST/HST costs on constructing new affordable rental units. Full article here.

How the Conservatives plan to tame Canada's housing dragon | Financial Post We 'have a housing crisis,' where buying, renting slipping out of reach of median income families, Conservative platform states. Housing affordability might not be the most significant issue concerning Canadians today, but it is undoubtedly top of mind for voters as they evaluate the major parties’ competing platforms. Housing affordability surfaced as a significant concern during the last federal election campaign. Back then, however, it only worried voters in a handful of the more populous cities. The pandemic, though, has changed all that. As a result, housing affordability now concerns Canadians from coast to coast. What distinguishes the Conservative platform is its recognition that the primary cause of worsening housing affordability is that supply “simply isn’t keeping up” with demand. “Governments have not let Canadians build enough housing to keep up with our growing population.” The Conservatives believe we need to build enough housing “not just to keep up with but to get ahead of population growth.” Canada’s housing supply has lagged demand for decades. That’s at least partly because supply skeptics have influenced Canadian policymaking by convincing governments that housing demand is the real culprit. Hence, governments have responded with new taxes and other measures to curb demand, while supply received scant attention. Full article available here.

Trudeau promises new incentives worth billions and a tax on 'flipping' to help Canadians buy a home | CBC Liberal Leader Justin Trudeau today promised a suite of new measures to help Canadians buy a home at a time when a red-hot housing market has made owning property seem like a distant dream for many young people. Speaking to reporters in Hamilton, Trudeau said the real estate market is afflicted by "instability" and "uncertainty" and a COVID-fuelled spike has led to soaring prices, bidding wars, rampant speculation and too many vacant properties. He said the situation demands government intervention to help more people acquire their own homes. The aggressive plan — billions of dollars in new funding, measures to curb the practice of "flipping" homes, efforts to block foreign nationals from buying homes for two years and new regulatory measures to police exploitative real estate agents — comes at a time when Canadians are telling pollsters that housing is one of the issues they care about most. The three-point program includes commitments to "unlock home ownership" through new government funding, a plan to build more homes to address supply constraints and measures to establish and protect new rights for buyers. Full article available here.

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Shael Soberano, CFA Konfidis Inc. Chief Investment Officer

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