Among the main items in this week’s federal budget is a focus on wide-ranging changes aimed at making home buying more attainable, according to research by The Canadian Press.
Finance Minister Bill Morneau has previously vowed that a particular area of concern that the budget will tackle is housing affordability for Canadians, especially for the millennial/young adult purchasing cohort.
A government source, who declined to be named due to lack of prior authorization to speak about the budget ahead of its release, admitted that the plan is tailored towards addressing housing supply, demand, and regulation. No further specifics were provided.
Recently, UBC associate professor and Generation Squeeze founder Paul Kershaw argued that the federal administration should not ratchet down the stress test nor extend amortization, as such decisions will only embolden more consumers to borrow greater amounts.
Read more: Commentary: Affordability will not improve just because of supply
Kershaw also pressed for changes to “outdated” policies that have severely crippled supply. Said policies include taxes that exempt principal residences from taxation.
“We’ve tolerated – not only that, we’ve celebrated – home prices rising a lot over the last decade,” Kershaw stated. “And we need a government that says, ‘Nope, henceforth we want housing to be for homes first, investments second.’”
Multiple real estate, mortgage, and development market players and observers have long petitioned for the easing or even full removal of the stress tests introduced by B-20 early last year. The tighter mortgage qualification rules have been cited by multiple studies as a leading factor in the malaise of cooling demand currently affecting major markets like Toronto and Vancouver.