Housing Affordability Poll Finds Canadians Have Little Faith Government Can Solve The Problem
The real estate industry is waiting with bated breath to see whether the federal budget landing Tuesday will offer any good news for first-time homebuyers struggling with historically bad housing affordability in Canada.
It seems a good bet the pre-election budget will include something to address Canadians' growing concerns about housing costs — but few actually believe it will make much difference.
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A new poll carried out for real estate portal Zoocasa found 82 per cent see affordability as "a major issue that has negatively impacted Canadians."
But only 21 per cent said they feel confident the government can improve affordability over the next five years. And 55 per cent agreed that government policies alone can't fix the problem.
A growing number of industry groups have been calling on the government to loosen rules surrounding homebuying that they say are holding buyers back from the market.
They have called for the government to increase the amortization limit on insured mortgages to 30 years, from the current 25 years.
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They are also calling on the government to reduce or eliminate the the mortgage stress test that came into effect last year, reducing the maximum amount a homebuyer can borrow by about 20 per cent.
Some experts have criticized both proposals as unlikely to help, arguing they would result in rising house prices rather than improved affordability.
Respondents in the Zoocasa poll didn't take to those options, with just one in 10 supporting the idea of allowing mortgages that take 30 years to pay off. A slightly larger share — 15 per cent — chose reducing the mortgage stress test as their preferred option.
The most popular option provided in the Zoocasa poll was to increase the First Time Home Buyers Credit, backed by 28 per cent of respondents.
The credit currently allows first-time homebuyers to claim up to $5,000 of their down payment, for a tax break of up to $750.
But an equally large share — 28 per cent — said they "don't know" which policy would be best.
The industry will be watching Tuesday's budget to see if it moves forward with a $10-billion, 10-year housing affordability plan the Liberals outlined last year. That plan would see some 100,000 new affordable housing units built over a decade.
The NDP have argued the plan is insufficient. They put forward a motion in Parliament calling on the government to build 500,000 affordable housing units over five years. The motion was voted down by the other parties earlier this year.
The federal Conservatives have focused on the supply side of the issue, saying they would reduce regulations to make it easier to build new homes in Canada.