27 May
Canada’s federal Liberal Administration unveiled their strategies and plans to tackle the country’s housing affordability crisis. Chrystia Freeland, Finance Minister, highlighted a document that contains a raft of policy proposals on housing, including the provision of more than $10 billion to expedite the pace of new home construction to around 400,000 units a year. Freeland posited that the housing measures proposed in the budget were a response to the market’s shortage of housing inventories.
“The central challenge in Canada when it comes to housing is a lack of supply, and this budget is about tackling that head on,” she revealed in a Budget Day press conference. However, tackling the housing crisis would come as a little surprise to anybody is working in the mortgage or housing industry of Canada, since housing shortages have existed since January. Moreover, CREA highlighted that there very few new property listings for sale in Canada in January than at any point in record.
A senior economist at CREA, Shaun Catchart, explained that the government needs to implement aggressive national measures in order to develop new homes and drastic measures are required to ease the market’s lopsided supply-demand situation. The Government has speculated that the development of about 3.5 million new homes within the period of next 10 years is one method to ensure that supply-demand of housing is fulfilled currently and, in the future. Through the collaboration with companies in both private and government sectors, the government aims to reach the aforementioned target.
According to a prominent real estate executive, the new funding proposed by the government in order to ease the supply crisis is welcome, however, the question lingers over how effective the new plan would be. “Outside of the money that’s being allocated, I think they really need to find a way to help developers actually build projects.”
Housing minister Ahmed Hussen, who is tasked with the implementation of government’s proposals, emphasized that the program has already been backed up by the Federation of Canadian Municipalities and highlighted that additional plans were being laid in order to address the labour shortages by investing in skills and training. However, there is still scepticism from various economists about the ability of the government to certify that the proposed plans are delivered without taking additional action in some other areas.
“Without a targeted immigration plan, or a concerted effort to convince young residents to consider taking up a hammer rather than a laptop, we’re going to continue to struggle to ramp up supply enough to allow more Canadians to own their next castle,” Shenfield argued.
