With the upcoming Federal Election on October 21, the burning question on many Canadians minds is: how will it impact the ever-evolving real estate market.
National housing policy is a critical issue this election, so it is only natural that one would expect the industry, and the economy as a whole to be impacted.
As the demand for homes in the GTA continues to grow, year on year, Canada’s largest housing market has been poised to lead Canadian top-tier real estate performance this fall. However, in the current climate, with the election drawing closer, there is an air of uncertainty, which could affect the real estate market in a few ways.
One of the trends we see around election time, is potential buyers taking a ‘wait and see’ approach. This can be true of sellers as well, as they may prefer to see which party comes into power and how they deliver on their policies before making any big moves.
Leading up to the election, both the Liberals and Conservatives have promised to make home ownership more accessible for Canadians by offering certain incentives to help them break in to the market.
For first time home buyers this means, if the Liberals are re-elected, they can avail the First Time Home Buyer Incentive, giving them up to ten percent off the purchase of their first home.
If the Liberals remain in power, they have also promised to address the impact of foreign speculation driving up housing costs, by implementing a national speculation and vacancy tax for non-resident, non-Canadians.
The Conservative party, on the other hand, plans to loosen the existing stress test requirements to help first time home buyers with access to mortgages and give existing homeowners more mortgage renewal options.
They have also promised to extend the maximum length of a mortgage, which will lower monthly payments and help put home ownership in the reach of young families.
Depending on which party ultimately comes in to power; we may see an increase in purchasing power allowing more people to own homes. In the GTA, this could take shape as more bidding wars as demand outpaces supply. Conversely, with economic concerns such as a looming recession, and high levels of household debt across Canada, it is possible that buyers and sellers take a more conservative approach, putting a drag on demand.
If you are in the market to buy or sell a home, it is a prudent to keep an eye on the elections. However, the truth is that elections do not typically have a long-term effect on the housing market.
The most reliable way to get advice on market trends and the best time to act is to consult with a professional real estate agent. Reach out to us today. We would be happy to guide you through the process.