Group critical of downpayment change

by |
The government's newest down payment requirements are about to go into effect, and one advocacy group says the pending  rule change miss the mark.

Starting February 15, the minimum down payment for insured homes over $500,000 will increase.

“(Finance) Minister Morneau  made  it  clear  that  the  measure  was  principally  aimed  at  the ‘elevated’ housing prices in the Vancouver and Toronto areas. Yet,  the new  rules  may not  slow  the  price  escalation  in  the  two markets,” Wendell Cox, chair of housing and affordability for the right-leaning Frontier Centre for Public Policy, writes in a position piece entitled Canada’s New Federal Mortgage Rules: Right Diagnosis, Wrong Medicine?.

Cox says the new rules don’t address the underlying issues currently plaguing the Canadian housing market, arguing house prices in Vancouver and Toronto will continue to rise faster than household incomes.

He argues the government should be addressing skyrocketing land-use costs. That would address the issue at the builder level and not the individual buyer level.

He notes that building a house in Vancouver costs a mere 25% more than it does in Edmonton and yet homes costs 300% more on the west coast.

“The  difference  is  land  values,  which  have  been  pushed  up  in Vancouver by land use regulations that make building detached housing exceedingly expensive,” Cox writes. Much of the problem can be tied to provincial and  metropolitan  land  use  policies.

“Despite Ottawa’s rightful concerns  and good intentions, the solution is in Vancouver and Toronto, not Ottawa.”
  • James on 2016-02-04 10:06:10 AM

    Has any of the changes that was meant to curb the "hot" market made by these bureaucrats worked? Why is that?

    Because...chances are...they were made and/or thought of by people that had zero clue about the dynamics of the market.

    who got shafted? the little guys.

    Trudeau should just hire me to collect lost revenues from Real Estate transactions! /s

  • James on 2016-02-04 1:35:03 PM

    Anyone, and I mean anyone, who thinks that land use regulations are the reason why home prices in Vancouver have been skyrocketing as little to no understanding of the market.

    Land values are increasing in Vancouver because THERE IS NO MORE LAND. Look at a map. Where are you going to build new single detached homes in Vancouver? Shall we infill false creek? English bay?

    stupidity at it's finest.

Broker news forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions