Another election has come and gone for Canada and with it, a precarious outcome. A Liberal minority, though considered strong by most experts, will need the support of other parties in order to enact its agenda.
Experts point to the Liberal/NDP combined majority as the likely avenue going forward considering the parties align on many issues. With some provincial and municipal policies at play in certain provinces and cities, there are a number of things home-buyers can expect from government policy decisions. Recent policy changes on the provincial and municipal levels across the country have seen a number of issues addressed and seen the housing bubbles of Toronto and Vancouver cool. There are other issues however which need to be addressed, such as, foreign-owned homes left empty for long periods, affordable rental housing availability and first-time home buyers struggling to take the leap. Possible outcomes from the minority government are varied. The Liberals have the most seats, so one of the first orders of business on housing will probably be their promise to increase the qualifying purchase price for the recently launched First-Time Home Buyer Incentive to almost $800,000 in cities like Vancouver and Toronto. In order to get votes on this, the NDP may try to push for their policy of reintroducing 30-year amortization periods on insured mortgages for first-time buyers. They have another bargaining chip however in their promise to double the Home Buyers' Tax Credit to $1,500. The NDP also promised more purpose-built affordable rental housing, which will include their pledge of an additional $5 billion fund to build 500,000 affordable units over 10 years. Above that, the parties seem to align on a foreign home-owners tax of a form to be later determined. In addition to policies directly affecting home-buying, the Liberal’s and NDP aim to improve finances for students. With one aiming to eliminate interest on loans and another promising a larger portion in grants and extending time to repay, it’s possible a combination could start making life a lot more affordable for young people. With a number of ideas from all parties on how to tackle this important issue, only time will tell how Canada’s housing situation will fare.
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In one of the country’s hottest housing markets, Toronto is seeing increases in sales but also in prices as of September 2019 according to a recent report. In the TREB report, the GTA’s strong economy, cultural diversity and ranking of 16 in the Mercer Quality of Living Survey are attracting newcomers to the area each year.
Increasingly attractive to millenials, the city has unfortunately not kept up to the housing demands of a growing population of younger and increasingly diverse citizens.. Following Toronto’s market boom, luxury properties have increased in number and housing in general has increased in price, risking a bubble. In the current state it is especially difficult for younger people to enter the ownership market. Despite the increase in millennial population requiring affordable housing, there have still been increases in sales revenue and the average home price. In lieu of a cooler market, many young people are looking at buying options outside the core, utilising the GO Train system which services the entire GTA. Other options are downsizing or living in a lower valued neighbourhood. With the increase in tech ventures in the city, the people working for them will be looking for affordable options in the city’s core. Affordability is a key driver in homelessness in Toronto as a result of average income increases of 30% while housing costs have increased by 131%. More and more people are relying on rental options but the rental market is getting so hot that most young people are forced to reevaluate their needs and consider sacrifices that can be made in terms of location, or making due with smaller units. While affordable rental properties are needed, renting is perhaps still the best way to give people an opportunity to save for a home purchase. So the question being, how to buy a house in Toronto? With a growing demographic of millennials finding it difficult to enter home ownership traditionally, it doesn’t seem possible in a bubbling market. But don’t lose hope because the market is beginning to adapt and with the right push Toronto can see an influx of purposeful housing availability able to meet the unique needs of today’s home buyer. |
Cecil Darren Frank - Toronto Real Estate AgentArchives
October 2019
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