The latest inside scoop on the housing market issues of affordability; stress-test (Bill 20), amortization period and building approval delays.
In a recent interview recorded on BNNBloomberg, Mattamy Homes CEO Peter Gilgan discussed 2 important factors which would go a long way to helping young people to own homes.
Majority of Canadians, prefer to own their homes rather than rent, but the affordability factor has taken them out of the picture.
In many instances, although buyers are in a position to purchase homes, the stress test negates this effort and they fall out of the affordability range.
Inventory directly impacts demand and eventually drives up the home prices. Peter stated that municipalities and cities need to become more efficient in approving building permits.
Red tape bureaucracy and a lack of support at the approval stage for developers has kept land undeveloped for 10, 15 to 20 years. This has directly resulted in low inventory and rising house prices.
TREB president Garry Bahura, has also been pressuring to lower or better yet eliminate the stress test, additionally bring back the 30-year amortizations.
- Eliminate or lower the Stress Test.
- Accelerate building permits and approvals.
- Bring back 30 yr amortizations.
It's going to be very interesting to see how all this plays out in 2019 and onwards.
Additionally, this being election year and the waning popularity of the Liberal government, they may just use this opportunity to help their agenda and assist the housing economy.
Let's wait and watch. I am still bullish on the Canadian real estate market.
Do you feel these changes will help make homes affordable?