Five weeks of promises and pledges are now behind us – with Canadians having just elected our 44th session of Parliament, we are once again left with a minority government in charge of determining the country’s direction for the next few years. The Liberals managed to eek out the largest proportionate number of seats once more, with the Conservatives firmly in opposition and the balance of parties retaining strong showings in their traditional areas of dominance (the Bloc Quebecois in their suburban and rural Quebec strongholds, and the NDP in working class regions in Ontario and British Columbia). All told, the results barely differ from where things left off when the election was called in mid-August.
Last month, I put together a quick summary of where each party stood on housing policy, and what each leader pledged to implement if they were elected to serve as Prime Minister of this country. With the Liberals once again tasked with leading us forward, let’s recap their plan to make home ownership a more realistic goal for the average Canadian family:
“The single largest fundamental change to the way residential properties change hands in Canada today has been proposed by the Liberals – an end to the age-old practice of private blind bidding on homes. The Liberals also propose to guarantee the right of each buyer to conduct a home inspection before a transaction is finalized in law – regardless of what other conditions and clauses (or lack thereof) are in the offer already. The party has also pledged to restrict foreign non-residents from purchasing residential real estate in Canada for a minimum of two years, unless they can demonstrate that the purchase will be personally used for future employment or immigration within the next two years. Finally, the Liberals have expressed a commitment to constructing additional housing, with an emphasis on affordable urban projects.”
I’ve alluded to the idea earlier that any of these proposed changes will be difficult to implement in practice, not to mention what kind of impact (if any) they would have on keeping housing prices within the realm of affordability for Canadians. Of all the proposals tabled by the Liberals leading into the September 20th vote, by far the most easily implementable will be a renewed focus on building more affordable housing in the nation’s urban centres. Given the government’s advocacy for making the dream of immigration to Canada more accessible, it’s a respectable goal, and one which makes sense to ensure that this next generation of Canadians can integrate successfully into our society and begin to contribute to our storied history as a uniquely multicultural country. Yet even this will require close cooperation at all levels of government – federal, provincial and municipal – in a political climate that is far from harmonious.
As far as implementing the rest of their proposals, it remains to be seen how much of the Liberal platform was intended as serious policy, and how much was simply fodder for voters frustrated by the increasing cost of housing. I continue to stand by my belief – as I’ve stated here many times before – that the only way costs are likely to come back to earth is through one of two ways: either by mortgage rates making a dramatic increase, or by a sudden influx of new inventory coming into the resale market. Neither of these things appear to be imminent in my opinion, and I fully expect prices to remain high for the foreseeable future. The government can attempt to legislate their way around these problems, but any impact of these possible efforts will be minimal here in Kitchener-Waterloo.
One might think that a government move to outlaw speculative foreign purchases for two years might have a good impact on prices in Waterloo specifically, given the large number of foreign students the city hosts each year. But the key exception contained within this proposal is exactly why it won’t have as much of an impact here as some would otherwise believe. Foreign purchasers would be required to either be living in the property themselves or have an immediate family member do so, or, alternatively, be able to demonstrate their intention to move to Canada within the next two years. While foreign ownership is relatively high in Waterloo, the overwhelming majority of properties purchased with overseas money are occupied by the children of the purchasers while they attend university – and are therefore exempt from the proposed Liberal ban.
It’s too bad that I can’t offer more encouraging news to frustrated homebuyers, but that’s the reality of the situation from what I see day-to-day on the ground as a Realtor in this community. That being said, there are still plenty of opportunities to make sensible purchases out there, so long as you know where to look!
