Are housing prices and the tight local real estate market an election issue for you?
The Vancouver Island Real Estate Board thinks it should be.
“Often when candidates at the federal and provincial level talk about affordable housing, they talk about rental housing, not home ownership, but both should be part of the discussion,” says Kaye Broens, 2019 Vancouver Island Real Estate Board President.
While recent government measures have cooled some of the larger housing markets like Victoria, other Island communities remain a concern. “It’s not helping people buy houses,” Broens says, pointing to a US study that emphasized that often, real estate – owning their own home – is how people build wealth.
In fact, September numbers showed housing sales were down 16 per cent from August and prices had climbed four per cent.
Here’s a look at 5 steps that would help:
1. Increased Housing Supply – The Island’s housing stock remains low, which keeps prices high and out of reach of many first-time buyers. Adding more homes will help keep prices more manageable, Broens says. “Make it easier for developers to build houses.”
2. Reform the Mortgage Stress Test – Have you been sidelined by Guideline B-20, the government’s mortgage stress test? You’re not alone. Canadians in many markets – including Vancouver Island – are forced to save more, over a longer period of time, or buy a less-expensive home. At the same time, markets continue to struggle and are not adjusting to the policy change, says VIREB president-elect Kevin Reid.
3. Reform First-time Buyers’ Tax Credit – Originally designed to help first-time buyers cover some of those “hidden costs” of buying a home, like lawyers fees and home inspections, the program hasn’t been updated since it was introduced in 2009, while costs associated with buying a home have continued to rise. VIREB would like to see the that tax credit increase to $2,500 from the current $750, and see the definition of first-time buyer expanded.
4. Reintroduce 30-year amortization – The reintroduction of the 30-year mortgage amortization would also help buyers get into the market. “It stretches your mortgage over a longer time frame but you have lower monthly payments, which helps younger people,” Broens explains.
5. Modernize lending practices – It’s important to recognize that not everyone has a 9 to 5 government job any more. Whether it’s accommodating home-based business income, seasonal employment or any non-traditional revenue, lenders need to have more flexibility, Broens says.
Recognizing that a strong, stable housing market is important for Canada’s economy, for example, how can the federal government continue to support Canadian homeownership, especially for first time buyers? And how will parties ensure a healthy housing mix that includes the entire spectrum from community housing, rental and homeownership?