As the post election dust begins to settle, now is an interesting time to look to how government polices will shape the housing market.
Since the Liberals form a minority government, they will need to form collaborative partnerships with other parties in order to pass legislation.
Although it remains to be seen how exactly things play out, it is likely that the liberals will turn to NDP for support, as their values align quite closely.
When it comes to housing in particular, both the Liberals and NDP recognize the importance of making rental housing more affordable. Rental pricing has been a major pain point in the past, especially in the GTA where prices have been increasing year on year.
There are a couple of ways they may be able to come through on this promise:
- Liberals had vowed to build 15,000 affordable housing units a year over the course of the next decade. The NDP promised 500,000. In forming a partnership, it is likely they will meet somewhere in the middle, resulting in an increase of affordable rental options.
- Part of NDPs housing platform was to abolish the federal portion of GST and HST on the construction of new affordable housing units. Removing this tax is intended to encourage developers to build more affordable units.
- Both liberal and NDP housing plans included a rent subsidy – again it is likely they work on a mutual agreement on the exact numbers to put this forward
Aside from strategies to make rental housing more affordable, there are few ways in which homebuyers may benefit too:
- The new First Time Home Buyer Incentive where the Canada Mortgage and Housing Corporation (CMHC) will offer 5% toward and existing home or 10% for a new build, to lower the cost of a mortgage.
- Liberals have also promised to increase the qualifying price for the First Time Home Buyers Incentive – in areas like Toronto, it may now be close to $800,000.
- Implementing both the Liberal plan of a national, annual property tax on vacant properties owned by Canadians residing abroad along with the NDP plan for a one time tax on home purchases by a non resident foreign national.
Based on the promises that have been made, it is a fair assumption at this point that things will be looking up for both renters and potential home owners, first time buyers in particular. How it all pans out remains to be seen, as the strong immigration inflows and low unemployment numbers continue to strengthen the housing market.