Hon. Sean Fraser sat down with our team to discuss canada’s housing crisis, outlining government initiatives that can ease the first-time home buying process.
How does the government plan to collaborate with real estate stakeholders and developers to encourage the creation of affordable housing options tailored to the needs of first-time buyers?
The housing crisis is impacting Canadians in every region of the country, and has a unique impact on those seeking to buy a home for the first time. The rising cost of buying a home has created a generational wealth gap between those who got into the market years ago, and benefitted from the extraordinary growth in their home’s value, and those who are not able to save for a downpayment, not just because they are unemployed or because they come from a low-income household, but because the price of a new home in markets across Canada is out of reach for many middle class families who don’t have significant financial support from their parents.
We can overcome this phenomenon, and my engagement with the sector tells me that we, as a society, know how.
Canada faces a shortage in housing supply. We need to build homes, and we need to build them by the millions. In order to remedy the supply gap, we must implement measures to reduce the cost of home building, including tax measures and low-cost financing programs that incentivize home construction.
Second, we must help change the way cities build homes by incentivizing faster municipal permitting processes, and encouraging more density where infrastructure, services, and opportunities already exist.
Third, we need to embrace a new way of building homes by encouraging workforce development in home building and manufacturing more homes in factories.
Fourth, we must directly fund the construction of more affordable housing for low-income Canadians who cannot afford a place to live in the market.
Fifth, we should embrace opportunities to help first time home buyers save for their first home through measures that make it easier to save for that downpayment.
Finally, we need to target challenges in the sector that have caused investors and at times, bad actors, to buy up properties that are not being used to provide homes for families, including short term rentals, mortgage fraud, and other challenges that have artificially restricted supply that exists but is not available in the market.
Though not all of these measures explicitly target first-time buyers, we know that growing the supply for buyers, renters, and low-income families, will help ease pricing pressures in the market, and supporting a new generation of home-buyers through targeted incentives will ensure those who missed out on home ownership because of the generation they were born into have a fair shot at owning a home if they choose.
Could you elaborate on any upcoming policy changes or incentives that would make it easier for young Canadians to save for a down payment and navigate the complexities of the homebuying process?
One of the initiatives we have brought in is the First Home Savings Account. Canadians can use an FHSA to save $8,000 annually – up to $40,000 – tax free for their first home. More than 500,000 people have already opened an account.
We have also made information and guides available for Canadians who are navigating the homebuying process, trying to assess their ability to qualify for a mortgage, and trying to understand the options they have once they have a mortgage.
This is done through both the Financial Consumer Agency of Canada (Buying a home, Housing costs on your mind?) as well as CMHC (Buying a home).
We also recently announced the Canadian Mortgage Charter as part of the 2023 Fall Economic Statement to ensure that those with mortgages know their rights with financial institutions if they’re having trouble making payments.
In the coming months, we will announce additional measures to accelerate housing construction across the country, as well as policies that make it easier to rent and buy a home.
What role do you see technology playing in providing information and resources to prospective buyers, and how is the government planning to leverage digital tools to enhance the overall homebuying experience for first-timers?
We know that integrating technology into various aspects of the homebuying process can enhance accessibility, efficiency, and overall support for first-time homebuyers.
We’re doing this by developing:
- User-friendly websites and mobile apps that present comprehensive information on the homebuying process, mortgage options, and government assistance programs.
- Online educational resources – including resources on the Financial Consumer Agency of Canada’s website – to provide guidance on the complexities of homeownership as well as a reliable source of information.
