Canadians have made their apprehension concerning the housing market known ahead of next week’s federal budget.
A Zoocasa poll found 82% of respondents agree that housing affordability is a major concern and that it is adversely affecting Canadians. Moreover, 55% believe government policy alone won’t solve the problem.
However, 21% of respondents are confident that the government will improve the housing market over the next five years.
On the issue of B-20, only 57% of respondents are even aware of it, while half of all respondents feel it hurts affordability. Fifteen percent of respondents who are aware of the stress test believe it should be reduced below 200 basis points, and that surprises Daniel Johanis.
“The 15% who believe the stress test should be reduced is a surprisingly low number,” said the Rock Capital Investments mortgage broker. “I field quite a few calls from clients who have circled back after a couple of years contemplating a purchase and they’re surprised that they’re in a worse predicament, as far as affordability goes. B-20 dampened the market.”
Ten percent of respondents believe that amortizations should be extended—an idea that has gathered steam recently after NDP leader Jagmeet Singh called for the return of 30-year amortizations.
“Some Canadians want an increase in the amortization—I know that definitely would be welcome for a lot of buyers,” said Johanis. “It would be a great thing to implement.
Another interesting finding from the Zoocasa poll is that 28% of respondents believe that increasing the first-time homebuyer’s tax credit would help affordability woes. It might still be early in the spring market, but Johanis says that there is no shortage of first-time buyers taking full advantage of the tax credit.
“I’m seeing it more for insured purchases, where they’re maxing out the tax credit and using it for a minimum down payment,” he said. “Generally with those who have already stretched their down payment, they’re in the 5-10% down payment range under $500,000 and they’re going outside of Toronto. If they had a higher cap on that tax credit, we’d see them making more purchases north of $500,000. If it can be increased so that they can get into the housing market and use more of their RRSP, that’s not unreasonable, either.”