The Federal Budget for 2017 proposes big investment in affordable housing, but “nothing to cool red-hot markets”.
$11.2 billion over 11 years has been earmarked for affordable housing; but is it not enough? Associate Professor at Carleton University, Ian Lee believes that the investment is largely symbolic.
A new National Housing Fund with about $5 billion over 11 years is intended to expand lending to new rental housing construction and fund temporary social housing providers. This money is planned to ramp up slowly from $141 million in 2018-2019 to $707 Million in 2024-2025.
David Macdonald, senior economist at the Canadian Centre for Policy Alternatives doesn’t think this is fast enough. “There is a huge backlog in affordable housing. The wait lists in any big city are going to be massive.”
There are no policies in this Budget aimed at cooling the hot housing markets of Vancouver and Toronto. Lee states, “My sense is they feel that they have done enough to address the problem.” Ottawa tightened its rules around mortgages and home ownership in October of last year. “There is not much more to do, short of stopping lending completely.” – Global News
Regardless of measures taken, economists don’t see the housing market cooling down anytime soon. Diana Petramala an economist with TD Bank stated, “In light of mortgage rates remaining low and mortgage regulation changes having negligible impact on home demand, there appears to be no visible break that would stop this train in this year.” – Globe and Mail.
London Pacific’s Dean Andag concurs stating, “Demand for multi-family housing in Metro Vancouver remains high and is a reflection of the lack of supply.”