Photo: James Bombales
In just five months, Ontario will hold its next provincial election. One of the main subjects on voters minds? Housing affordability.
According to a new poll from Nanos Research, commissioned by the Ontario Real Estate Association (OREA), 60 per cent of Ontario homeowners say they would be more likely to vote for a candidate who promised to make housing more affordable for young people.
“It’s no secret that many young Ontarians and first-time buyers are feeling squeezed by the rising cost of home ownership,” writes OREA CEO Tim Hudak, in a statement. “This year, governments have focused on chasing buyers out of the market with policies like making mortgages tougher to get and new taxes. If the government wants to make meaningful change for Ontario home buyers, they need to instead focus on more effective policies, like tax relief and increased housing supply.”
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The poll found that 71 per cent of respondents would support tax breaks for homeowners to improve their properties’ energy efficiency, while 63 per cent support providing lower taxes and fees for first-time buyers.
“Tax breaks to support green retrofits in the housing sector and give relief to first-time home buyers are both good public policies that all political parties can, and should, commit to,” writes Hudak.
Hudak, who ran as the provincial Progressive Conservative candidate in the 2014 election, is particularly concerned with how incoming mortgage rules could affect the purchasing power of first time buyers. Starting January 1, a new stress test will require all uninsured mortgage borrowers to qualify against the Bank of Canada’s five-year benchmark rate, or at their contract rate plus an additional 2 per cent.
Other industry players have echoed his concerns. A recent report from Royal LePage predicted that a large number of existing homeowners would fail the stress test when refinancing their properties, while first time buyers could be shut out of the market entirely.
While the report predicted that the new policy would slow the market in the beginning of the year, it suggested that market conditions in markets like Toronto and Vancouver were too tight to keep prices down for long.
“Attempting to use public policy to steer property prices in huge, rapidly growing cities like Toronto and Vancouver is like a tugboat trying to turn an ocean liner,” writes Royal LePage CEO Phil Soper, in a statement. “Consistent, measured policy can have a positive impact. Just don’t try to turn the market on a dime or you risk sinking the ship.”
Meanwhile, according to CIBC Senior Economist Benjamin Tal, Toronto is facing a significant and worsening lack of serviceable land for homebuilding, while demand in the area grows stronger by the day.
“If you look at the long term trajectory, and where prices will be say 10 years from now, I think they will be increasingly more and more unaffordable to the average Canadian,” Tal told BuzzBuzzNews.