I'm a little bit stymied about politics at the moment. We are 25 days ahead of voting day, and the political parties are doing their best to shower us with gifts.
It's like being a child of divorce and Disney Parent A does all the fun stuff while Parent B makes sure the teeth get brushed and homework gets done. We're in the Disney Parent A phase. Stressed out, over-taxed Parent B will make an appearance once we've voted.
We have seen tremendous growth in Real Estate sale prices in the last 5 years especially, largely due to low low interest rates. The Office of the Superintendent of Financial Institutions (OSFI) implemented the stress test as a measure to tackle growing risks amid low interest rates and housing market imbalances (source). It was risky for all Canadians and the Canadian banks, to have property price increases continue unchecked.
So now we have ALL four most popular political parties offering us easier ways to buy into housing, increasing demand, thus increasing house prices. If prices increase and interest rates also increase, monthly mortgage payments increase. Cost of living will increase. People who are on the threshold of insolvency will be the first to sell off before the banks do it for them. If a lot of people can't pay their mortgages, more Real Estate supply hits the market. Less demand. House prices drop, equity is lost.
The shiny presents being bestowed upon us with respect to the Real Estate industry may not be good for us in the long run.
This October 21st, please vote. Review all platforms, from multiple sources, and pick who you think will keep Canada healthy, strong, free, and unencumbered by debt for years to come. The Parties' platforms on housing are noted below, along with a link to their websites.
Conservative Housing Promises:
- Proposed Green Home Renovation Tax Credit, a two-year program to encourage homeowners to renovate their homes in ways that lower their power bills and reduce greenhouse gas emissions. 20% of green improvements to homes would be eligible for a 20% refundable income tax credit, a savings of up to $3,800 per year on renovations. Reno's include, insulation, furnaces, doors & windows, HVAC, solar panels. In 2017, 12% of Canada's overall emissions came from buildings (source).
- "…fix the mortgage stress test (sic) to ensure that first-time homebuyers aren’t unnecessarily prevented from accessing mortgages and work with OSFI to remove the stress test from mortgage renewals to give homeowners more options."
- "Increase amortization periods on insured mortgages to 30 years for first-time homebuyers to lower monthly payments."
- "Launch an inquiry into money laundering in the real estate sector and work with our industry partners to root out corrupt practices that inflate housing prices."
Liberal Housing Promises:
- Give you "up to 10% off the purchase price with the First-Time Home Buyer Incentive, and if you live in the greater Toronto, Vancouver or Victoria regions, we’re going to give you more help because we know housing prices are up to 60% higher for you. So if the home you want to buy is $789K or less, you’ll still qualify for the Incentive." (source) Within the $55 billion plan they would also build 100,000 affordable homes over a decade and offer interest-free loans up to $40,000 to make homes resilient to extreme weather. (source)
- "We also know housing speculation by foreign owners is driving up costs across the country (sic), and that’s why we’re putting in place a consistent, national tax – to protect families who are being priced out of buying a first home." (Liberal Party website)
New Democrat Housing Promises:
- "Create 500,000 units of quality, affordable housing in the next ten years, with half of that done within five years"
- "Spur the construction of affordable homes by waiving the federal portion of the GST/HST on the construction of new affordable rental units"
- "Re-introduce 30-year terms to CMHC insured mortgages on entry-level homes for first time home buyers"
- Double "the Home Buyer’s Tax Credit to $1,500."
- "A Foreign Buyer’s tax on the sale of homes to individuals who aren’t Canadian citizens or permanent residents, and fight money laundering"
(source: pg 14-16 NDP commitment download)
Green Party of Canada Housing Promises:
- "Legislate housing as a legally protected fundamental human right for all Canadians and permanent residents. Appoint a Minister of Housing to strengthen the National Housing Strategy so that it meets the needs for affordable housing that are unique to each province..the target would be 25,000 new and 15,000 rehabilitated units annually for the next 10 years."
- "Increase the National Housing Co-investment Fund by $750 million for new builds, and the Canada Housing Bene t by $750 million for rent assistance for 125,000 households."
- "Create a Canada Co-op Housing Strategy that would update the mechanisms for nancing co-op housing, in partnership with CMHC, co-op societies, credit unions and other lenders."
- "Eliminate the first-time home buyer grant"
- "Re-focus the core mandate of Canada Mortgage and Housing Corporate (CMHC) on supporting the development of affordable, non-market and cooperative housing"
People's Party of Canada Housing Promises:
- "The party has not released specific policy on this issue — but Leader Maxime Bernier has blamed high housing costs in Toronto and Vancouver on zoning regulations and high immigration levels." (source) (People's Party website)
Bloc Québécois Housing Promises:
- "The Bloc proposes allowing natural disaster victims be able to take money out of their RRSP without penalty or tax to renovate their home post-disaster. They would have to prove damage was caused by a climate change related event. It also wants more money for Quebec social housing but hasn’t provided a detailed plan for spending it." (source) (Bloc Quebecois website)