The chronic housing shortage is an issue that affects millions of Canadians, and it has dominated conversations along the campaign trail. More than 8 in 10 Canadians say they are concerned that an increasing number of people will never be homeowners in this country, according to a recent Royal LePage survey. 

57% of Canadians aged 18-34 say that a candidate’s position on tackling the current housing affordability crisis will influence their vote in the upcoming Federal election. We’ve broken down what each of the three major parties are promising to do to solve the problem. We also discuss some policy ideas we think the next government should consider if it’s serious about addressing the issue. 

Let’s be clear: Real estate investors are not the problem. Blind bidding is not the problem. Foreign buyers are not the problem. The primary cause of the housing affordability crisis is that supply simply isn’t keeping up with demand. The fact is that successive governments have not enabled Canadians to build enough housing to keep up with our growing population. 

Supply has lagged behind demand for decades but governments have responded with new taxes and other measures to curb demand, while supply issues have received little attention. We feel the Conservatives have the best plan to address the housing issue, but getting politicians to implement their campaign promises is often a different story. 

We like the Conservatives’ plan to build 1 million new homes over the next three years. The Liberals are saying they will build or repair 1.4 million homes in the next four years but they haven’t explained what that actually means. Converting empty office space into residential housing is another good idea, as is the plan to release 15% of federally owned buildings to help with supply. 

The Conservative platform proposes to defer the capital gains tax on the sale of a rental property if the proceeds are reinvested in rental housing. We believe this is also a long-overdue step in the right direction since it will help increase much needed rental supply.

The NDP is proposing a 20% foreign buyers tax, while the Liberals and Conservatives are both proposing a temporary 2-year ban on foreign buyers. However, this will have little to no effect on our local real estate market. Foreign buyers represent only 2% of buyers in Montreal and are primarily purchasing pre-sale condos downtown, and not single-family homes in the suburbs. It’s important to differentiate between immigrants with permanent residency, who we see buying homes here in the West Island, and foreign buyers who do not have a permanent Canadian address. 

Easing the stress test for self-employed and non-salaried contractors is another Conservative policy that makes sense, as does the Liberals’ plan to double the First-Time Buyers tax credit from $5,000 to $10,000. We also like the Liberals’ proposed tax-free First Home Savings Account to be used for a first time downpayment, as it would help make homeownership more attainable for the younger generation. 

To solve the supply problem, local municipalities will need to step up and take a hard look at allowing higher density housing. This includes sub-dividing big lots, facilitating rezoning of vacant and under-used commercial space and allowing more responsible and environmentally friendly construction. 

We also think it would be a good idea for local governments to take a look at allowing homeowners to add a legal apartment in their basement, which is commonplace in many other cities across Canada. This is a great way to allow people to get into the market by having rental income offset their mortgage expense. Why haven’t we looked at this as a viable option? 

We believe the Federal government should be looking at policies that make it a bit harder for investors and a bit easier for families and young Canadians to get into the market. It makes sense that the underwriting for investors should be tighter, while eventually easing the lending restrictions on first time borrowers. That being said, increasing supply before growing demand is essential for stabilizing housing markets in Canada. 

If you would like any advice or recommendations regarding your situation all you have to do is call 514-700-2604 or send an email to info@broadywindsor.com. You should also consider joining the Homeowners Advisory Club. It’s the first real estate concierge service designed to help you protect and maximize the value of your home over time.