Election results means more tax for foreign buyers, little change on mortgages

Economist says first-time buyer program could provide short-term relief but lead to higher prices

Aerial view of houses in Oshawa, Ont., seen from a Canadian forces Hercules on Saturday, Nov. 11, 2017. The federal election results mean potential new barriers for foreign real estate investors as well as some help for first time buyer, but not the more significant changes that opposition parties had promised. (THE CANADIAN PRESS/Lars Hagberg)

The re-election of Justin Trudeau’s Liberals on Monday will likely result in potential new barriers for foreign real estate investors as well as some help for first time buyer, but not the more significant changes that opposition parties had promised.

Liberal promises on housing included some expansion of its first-time buyers assistance program, and a one per cent tax on vacant homes owned by non-Canadians.

John Pasalis, president of the Toronto-based firm Realosophy Realty Inc., says the Liberal minority victory means there won’t be the more aggressive stimulus promised by the Conservatives to relax mortgage rules that would have led to higher home prices.

Brian DePratto, senior economist at TD Bank, says the Liberal platform provides little relief for housing affordability, though he notes the limited tools to address supply at the federal level.

He says the higher price cap in major cities for the Liberal’s first-time buyer program, which gives a loan for 10 per cent of the property’s value, could provide short-term relief to buyers but lead to higher prices.

Phil Soper, president of Royal LePage, says the government will need to concentrate more on increasing supply, including by reduced regulatory cost and faster approvals.

The Canadian Press

READ MORE: ELECTION 2019 — How would the major parties address Canada’s housing crisis?

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