ELECTION RESULTS INFLUENCE ON HOUSING MARKET

On many issues, the NDP and Liberals don’t see eye-to-eye. However, with Trudeau’s reduced seat count the NDP and the Liberals will likely come together on many issues to ensure left influenced legislation  goes through. One issue they seem to overlap on is housing. Both parties want to have a more active role in the housing market to make housing more affordable and to increase inventory. 

The Liberals have made promises to further develop the First-Time Home Buying Incentive. They have also discussed taxing foreign-owned vacant properties, in an effort to aid areas of Canada most affected by the affordable housing crisis. The NDP promised to impose a tax of 15 percent on foreign buyers and non permanent residents, create 500,000 more affordable housing units over the next decade, and provide subsidies for renters who contribute more than 30 percent  of their income towards housing. 

​BMO economists Douglas Porter and Robert Kavcic provided a report last month that came to the conclusion that the parallels from both parties housing platforms could initiate more change in the Canadian housing market. 

According to Porter and Kavcic, one area of their housing platforms  see eye-to-eye is the taxation of forerign buyers and non permanent residents. The Liberals likely wouldn’t agree on a tax as high as 15 percent but would be open to the possibility,  considering the inspiration they drew from the idea during their campaign. 

Porter and Kavcic did have some criticism for they parties approaches to the housing crisis. They claim that most of these policies focus too much on housing demand, and not focusing enough on housing supply, and the logistics of combating it. 

The two economists, Porter and Kavcic, said in their report “The NDP proposal to “create” a half million affordable units over a decade  would boost annual housing starts by about one quarter, so it’s a material pledge. But, the question is: how can that be accomplished, and would it involve subsidizing builders or buyers? If the latter, the boost to demand could neutralize the restraining effect on the prices of new supply.”

Are both parties taking the right approach? Are both parties platforms focused on the right things, and if they are, how big of an effect will it really have? 

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