Canada’s real estate community has rallied to urge all levels of government to make home ownership more accessible for people across the country. This September, The REALTORS Association of Edmonton (RAE) joined the Quebec Professional Association of Real Estate Brokers (QPAREB), the Nova Scotia Association of REALTORS® (NSAR) and Toronto, Calgary and Vancouver real estate boards to urge the federal political parties to “commit to policies that will help remove barriers and reduce the cost of home ownership” in advance of the federal election in October.
“Home ownership is a key component of the national economic fabric and its role in creating economic diversity cannot be overlooked,” said Michael Brodrick, Chair of RAE. “To help Canadians, the real estate market must have liquidity, but the federal government’s anti-homeownership policies have made it difficult for Millennials to purchase their first home, difficult for families to upsize or downsize as their needs change and difficult for seniors to exit the market.”
For example, he continued, the mortgage stress test has had a significant downward impact on the price point at which buyers can qualify and purchase. “This has lowered prices and stolen equity from homeowners. Home equity is a substantial asset for many Canadians, and this equity will not be easily or quickly rebuilt.”
To correct course, the group has put forward several housing affordability recommendations, including:
- Revise the Office of the Superintendent of Financial Institutions’ (OSFI) mortgage stress test to take into account its impact on different real estate markets across the country. The federal government should view the stress test as a flexible policy and adjust it based on changing economic trends and interest rates.
- Replace the $750 First-Time Home Buyers Tax Credit with a $2,500 non-refundable tax credit for first-time home buyers.
- Reintroduce 30-year mortgage amortizations.
- Consider regional differences when implementing nation-wide measures that affect home buyers.
“No two real estate markets are the same. The one-size-fits-all housing policies, like the mortgage stress test, are simply not solutions that will work across our diverse country,” explained Matt Honsberger, president of NRAB, adding, “In Nova Scotia, transactions through the NSAR MLS® System generated an estimated $513 million in spin-off spending last year. This economic impact is recognized by all levels of government, who we encourage to continue working with real estate brokers to ensure that policies encourage growth in our market and make home ownership more affordable and accessible.”
Alan Tennant, Chief Executive Officer with the Calgary Real Estate Board (CREB), also expressed the need for greater unity on housing initiatives, noting, “The time has come for Canada to have a clearly articulated housing strategy that brings all government agencies onto the same page. We are supportive of initiatives that facilitate Canadians in achieving their dream of home ownership. Leadership in government is needed to bring an end to ad-hoc policy changes that make tough economic conditions harder in some markets or introduce measures too late.”
The combined real estate associations and boards represent over 92,000 real estate brokers throughout Canada, who account for 70% of the industry and an estimated $31B in transactions annually.