While pleased the federal government introduced measures in the federal budget to support housing affordability, the Ottawa Real Estate Board nevertheless believes its efforts fell short.
“Some first-time homebuyers will be assisted through the shared-equity mortgage program and the increase of RRSP withdrawals to $35,000,” said OREB President Dwight Delahunt. “However, we would’ve preferred a measure such as the one we proposed to government to increase the first-time homebuyers’ tax credit from $750 to $2500 as this would not have created another debt to be repaid.”
The real estate board believes increasing the RRSP withdrawal amount is a great idea, at least in theory.
“While the government has said these measures are to help millennials specifically, we question whether this cohort actually has this amount invested in RRSPs and whether they will be able to qualify for a shared-equity mortgage program,” continued Delahunt. “Many millennials are facing affordability issues related to their income levels and student debt.”
Despite those criticisms, OREB credits the government for amending the Homebuyer’s Plan to include leniency for turbulent life events.
“We certainly applaud the modernization of the Homebuyer’s Plan to include those going through difficult life-changing circumstances, such as the breakup of marriage and common-law relationships—we have been advocating for this for some time.”
British Columbia residents know the struggle with housing affordability all too well, and the British Columbia Real Estate Association lauds the federal government’s efforts in the budget, particularly with respect to RRSP access.
“British Columbians who aspire to home ownership need to be able to achieve this goal to assure a sustainable future for our province,” said Darlene Hyde, BCREA’s CEO. “Realtors have advocated for modernization of the HBP [Home Buyers’ Plan] for a long time and we’re pleased to see it addressed in Budget 2019.”
However, Delahunt suggests that supply constraints in Ottawa are problematic and could have been addressed in the budget, but wasn’t—nor was amending B-20, which he added exacerbates affordability woes.
“Our biggest disappointment was that government failed to make any adjustments to the B-20 stress test, which was an attempt to cool two major markets in the country. We hope the government will continue to monitor the effects of its mortgage policies and be open to adjusting them if necessary. They need to recognize that, while mortgage debt is on paper the largest component of household debt, it is the lines of credit and credit cards that can have a major impact due to the much higher carrying costs of these facilities.”