Mark Allen, REALTOR®

Federal Budget Tabled - New Housing Measures Being Offered!

19 March 2019

Federal Budget Tabled - New housing measures being offered. First-time homebuyers may be able to take $35,000 each(up from $25,000) from their RRSP soon. CMHC could fund 5-10%(resale-new build, respectively) of some mortgages on homes with a cap at $480k to assist new buyers with household incomes of $120,000 or less providing around $1.25B over three years for the “Buyer Incentives”‬.

Rental supply assistance in regards to $10B in financial means over 9 years to build purpose-built rental properties.

Our Thoughts:

The measures above are a minuscule start, however, they don't seem to be well thought out. Boosting RRSP withdrawals is good and we think this cap should be expanded further to $50k or more. However, you still have to pay the amount back over time or face penalties, paying these loans back should be eliminated altogether. And the idea of CMHC funding/lending to a mortgage is terrifying, I would opt out of this if I was a first-time buyer(that's only me though). The 10% loan from CMHC for a new build will not produce more supply from developers and doesn't really help buyers in a larger city where mortgage amounts will easily breach the $480k cap. Obviously any assistance for purpose-built rentals is great! 2017's fair housing policy decimated the rental market for lessees. Prices have ballooned and regulations backfired, again, surprise, surprise.

On the topic of regulations, supply could be added with the easing of red tape for builders - in the office of permits and planning, permits can extend a project so long that the developer actually cancels even after selling out because they didn't get appropriate approvals. As for Mortgage regulations Interest rates are now being held and BoC is taking a dovish stance possibly moving through 2019, so, then OFSI should eliminate the Mortgage Stress test, which was introduced because of the assumption rates would rise and buyers need to be tested at higher TDS levels. There are many other changes the Government can make including, for example; extending amortization for insured Mortgages and increased relief on land transfer tax.

More on the Budget -

Budget 2019 link -

Shared from: National Post and Government of Canada sites.

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