With only a few months until the federal election, the Ontario Real Estate Association is calling on the four leading political parties to prioritize keeping the “home ownership dream alive.”
The average price of a new detached home in the Greater Toronto Area is still above $1 million, and the average price of a new condo is closing in on $800,000. For most buyers in the GTA, these prices put home ownership out of reach.
“With just under 100 days until the federal election in October, all four parties are missing a clear opportunity to offer a comprehensive plan to turn the declining home ownership trend around, keeping the dream alive for tens of thousands of young families,” says Tim Hudak, OREA CEO. “It’s an urgent issue that needs to be addressed – and whichever party does so, stands a good chance of winning, especially in the vote rich GTA and lower mainland of B.C.”
OREA is recommending three actions that should in theory improve housing affordability in Ontario:
30-year amortizations for insured mortgages
Make the mortgage stress test more flexible
Eliminate the stress test for “careful savers” who are renewing with a new lender
“These restrictions in particular are unfairly disadvantaging home buyers, especially millennials looking to enter the market for the first time or young families looking to move up,” says Hudak. “Ontario Realtors are continuing to fight for families who are having their dream of becoming home owners dashed by bureaucratic overreach in the mortgage market, outdated red tape and expensive regulations restricting housing supply and choice across the country.”
Earlier this year, Evan Siddall, president and CEO of Canada Mortgage and Housing Corporation defended the stress test
, saying that Canadians were taking on too much debt. When the stress test was introduced, price growth did moderate, and sales activity has seemingly returned to steady levels.
Basically, in the eyes of CMHC and the federal government, if you fail the stress test, it’s because you can’t afford the home you want. That means you either need to save for longer or adjust your expectations and search criteria.
OREA wants to make it easier for Canadians to take on more mortgage debt, which can be okay as long as the borrower is responsible financially, but CMHC says the stress test is working exactly as planned.
Is Hudak correct in saying that the political party with a comprehensive plan to support home ownership will have a good chance of winning? Housing is always a hot topic, so we’re interested to see how things shape up as we look ahead to October.