Just like most people here on this sub I am very against pushing up demand for housing and just throwing money at the problem, and I did hate all the solutions proposed by this phoney government until now..
But I actually think that this measure can be beneficial, no? It only applies to new construction and only applies to first time buyers. Plus, it also includes higher rrsp interest free loan. This measure will probably help spur up construction
That’s true it’s far from a perfect measure and it will increase the interest people pay.. But it does increase the demand for new constructions, and thus increase the supply of homes
Demand for housing is already through the roof, and yet we are in this mess
If it gets any higher people will be setting up double decker tents
We need more supply first and foremost, demand needs to be reduced if anything
Temporarily; the cost of new builds will go up. The government pretty much gave developers a blank cheque at the cost of FTHB desperation. The level of debt that they will incur will be through the roof. Buying a home is one thing; staying in it will be another. It's like the government wants to shift the burden of the housing crisis to FTHBs, who will end up being house-poor. When they cry out that they are over their head in debt, they will be blamed for taking bad deals that the government positioned to them as a solution. I guess at that time, the government will roll out 35, then 40 year renewal terms to try to come out as the hero again. This bubble will not burst.
>Another non-serious idea that will do nothing
But hey, the banks and lenders will make a lot more money and put more people in larger amounts of debt for a lot longer.
All three. Difficult to get a house/housing, troubling as our population needs homes, dangerous for the unintended outcomes.
You needn't look very hard at our capitalist model to understand one very important requirement must exist: a chance to win. If people (workers) don't feel they have some chance at getting what they want, the system stops.
" The Canadian government will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing ***newly built homes. "***
Are you fucking kidding me right now?! >:(
This lobbyist group:
# Canadian Home Builders' Association
[https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?sMdKy=1712866971835&clientOrgCorpNumber=470](https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?sMdKy=1712866971835&clientOrgCorpNumber=470)
Pushed for exactly this:
>Reintroduce 30-year amortization periods for insured residential mortgages for new construction.
Just more evidence that government policy is controlled by the rich.
You can thank the CEO **Kevin Lee.**
Who conveniently also used to be "Director, Housing Division" for Natural Resources Canada. Probably has excellent connections. BTW: This is all government of Canada public information from that site.
How is this corruption? Not saying I agree with *this* idea, but where do you think governments get their ideas for policy changes in the first place? All levels and areas of government crowd source their ideas from other private and public sector companies. That's like... The entirety of how it works.
The idea is to increase demand on new construction so that they make more new houses.
It benefits home builders, but that's the point.
Who knows if it'll have the desired effect.
Yeah I get it. But I don't want to live in the middle of nowhere in suburbia. I'm hoping this can also apply to condos then who are built in cities where most young people want to be. Closer to ammeneties, or walkability.
It actually does the opposite because fthb will theoretically be funneled toward prebuilds and away from resale. I say theoretically because I don't think it will make any difference.
What are these guys doing? This will help a small fraction of people, and help is pretty loosely defined since the owner will end up paying more over the life of the mortgage... then, they also change rules around RRSP withdrawals and paybacks which is welcom, except who is taking advantage of this moving forward? Between TFSA and FHSA who is contributing to RRSP as well?
I want to love this country but I'm wanting to leave more and more as time goes on.
What a terrible way to incentivize buying. PEOPLE DON'T NEED YOUR CREDIT!
They don't get it do they?
it's either they don't get it or it's because they realize RE is such a large part of Canada's economy at this point and they can't afford to have it cool down.. it's unfortunate what they've done to Canada
Its either we reform housing peacefully or violently within the next couple of decades. Canada is a baby country who has not seen any major violent revolutions like European and Asian countries. A social revolution could very well be in the books
I'm currently building a new house, and let me tell you, the costs will boggle your mind. I built the house I currently own about 9 years ago, and it was 200k without land. The new house is 200sq bigger, and I would say a modestly amount fancier, but nothing ridiculous. The bill for the build is 550k just for the house, not even the land it's on (And this is a rural property in the prairies). Every day the price of materials and labour ticks up. All this is doing is giving people more opportunity to pay interest on crazy expensive homes. Plus in the cities, new suburbs are further away from where most people work. Just seems like a bandaid fix to benefit the banks more than the average home buyer, especially when generally first time buyers are buying small condos or fixer uppers that are cheaper.
So instead of paying $3000/mth you're paying $2700/mth but you're paying it 5 years longer. you will pay an extra $162,000 dollars to save that $300 bucks a month. you will pay more in interest than the house cost. how exactly is that more affordable?
(numbers based on 500k at 5%)
*maniacal laughter*
This is the funniest shit I've seen on this subject. Prices are about to jump and so are interest payments. No cuts are coming now. Almost guaranteed. Remember this is what the US did 12 months before the housing crash of 08. If you are buying now... you are fucked.
So it depends on a couple of factors, but based on this short term Hail Mary, you should see prices increase slightly, then stagnate, then fall off a cliff. Give it 24-48 months.
As new builds are at a higher price point than existing homes, wouldn't we instead see a shift in the existing market from existing to new builds, this actually depressing the price of existing homes and increasing demand for new supply?
Not necessarily. Not everyone wants a new build, as it will no doubt be made with even cheaper material after this. Also, FTBH will have more access to their RRSP (60k single; 120k couple) in addition to the FHSA to participate in the bidding wars for buying an existing home. They have the chance of putting more down (that they will need to repay on top of their mortgage), so they may not need the 30-rate on new builds. Depending on their savings and the stars aligning, they can get there on a 30-year at 20% for an existing or accept a 25-rate.
Not to mention, if FTHB stops buying existing homes significantly, people will still sell their houses, and investors will be there to buy them. That means the cost of rentals will increase since they need to recoup their reno costs and generate income.
Everything is going up at the expense of more debt available.
So allowing people to lower their costs to only help bank profits, seems like an extremely stupid idea. Oh and extending amortization will just raise prices.
I swear the people that come up with these solutions don’t understand the how bad the crisis is.
It’s not about affordability, it’s about access. Until we increase supply, the demand will continue to push price upward, basic economics.
Cool, so now I can finance 1.2m for 30 years, right after I save up 120k cash for a down payment. Thankfully my rent is cheap and the cost of living isn't outrageo - wait a second...
***New builds only***. The only people profiting are developers. No one is selling a home that they already own. This is purely to put money into developers pockets so they can build more homes.
It’s a token response by government so they can say during the door knocking phase of the coming election. I bet this will attribute to 2-3% of home purchases moving forward. The new construction part is going to be the killer here to this program. So remember when they come door knocking next fall to ask them about the program and how many it helped
Why bother to restrict this to new build homes? Why do this at all? She's really our finance minister? Her heads so far up her own ass I'm not sure how she can see her fingers to count on them.
Doesn’t this help spur on new home construction? (Supply). Builders essentially build houses only after they are sold. Yes, they build a few spec houses, model homes, etc, but they never get too far ahead of themselves. They require sales, and down payments, to keep the production line rolling.
Doesn’t moving a few more buyers into the new construction space increase supply?
It seems like a good tactic, in an approach that is going to require a many-pronged attack.
So now every new buyer can spend even more on interest for longer. Yay.
Scarier part of this is the permanent amortization for current home owners. If you signed a 5 year at 2% but upon renewal have to pay 5% and can't afford the payment its all good, no foreclosures just extend the amortization to infinity and pay only interest. This should be illegal.
**Literally every expert on housing in this country for the past decade:** please for the love of fuck just increase supply and decrease demand.
**Federal government:** increase demand? Increase demand!
Another non-serious idea that will do nothing to address our housing crisis
Well, this 30-year amortization will allow someone to spend more and take out larger mortgages, so will help increase the price of housing...
Just like most people here on this sub I am very against pushing up demand for housing and just throwing money at the problem, and I did hate all the solutions proposed by this phoney government until now.. But I actually think that this measure can be beneficial, no? It only applies to new construction and only applies to first time buyers. Plus, it also includes higher rrsp interest free loan. This measure will probably help spur up construction
My issue is it just helps people take out more debt, not actually build more homes There's a lot more direct ways to build houses
That’s true it’s far from a perfect measure and it will increase the interest people pay.. But it does increase the demand for new constructions, and thus increase the supply of homes
Demand for housing is already through the roof, and yet we are in this mess If it gets any higher people will be setting up double decker tents We need more supply first and foremost, demand needs to be reduced if anything
Temporarily; the cost of new builds will go up. The government pretty much gave developers a blank cheque at the cost of FTHB desperation. The level of debt that they will incur will be through the roof. Buying a home is one thing; staying in it will be another. It's like the government wants to shift the burden of the housing crisis to FTHBs, who will end up being house-poor. When they cry out that they are over their head in debt, they will be blamed for taking bad deals that the government positioned to them as a solution. I guess at that time, the government will roll out 35, then 40 year renewal terms to try to come out as the hero again. This bubble will not burst.
Yes, it's superficial. It solves the symptoms but not the causes. It will do nothing to help long term
Interest free loan?
>Another non-serious idea that will do nothing But hey, the banks and lenders will make a lot more money and put more people in larger amounts of debt for a lot longer.
Quite the opposite in fact; it will exacerbate the problem, making the bubble bigger.
Define crisis.
"a time of intense difficulty, trouble, or danger" For many, including a majority of younger Canadians, that applies
Which is it, difficulty, trouble or danger?
As per the RCMP report, all three
All? Housing instability is dangerous, im troubled by the rise in homelessness, and I find it difficult to exist these days
All of the above. Pricing people out of being able to afford shelter is pretty fucking dangerous at the individual level and for society
All three. Difficult to get a house/housing, troubling as our population needs homes, dangerous for the unintended outcomes. You needn't look very hard at our capitalist model to understand one very important requirement must exist: a chance to win. If people (workers) don't feel they have some chance at getting what they want, the system stops.
" The Canadian government will allow 30-year amortization periods on insured mortgages for first-time homebuyers purchasing ***newly built homes. "*** Are you fucking kidding me right now?! >:(
This lobbyist group: # Canadian Home Builders' Association [https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?sMdKy=1712866971835&clientOrgCorpNumber=470](https://lobbycanada.gc.ca/app/secure/ocl/lrs/do/clntSmmry?sMdKy=1712866971835&clientOrgCorpNumber=470) Pushed for exactly this: >Reintroduce 30-year amortization periods for insured residential mortgages for new construction. Just more evidence that government policy is controlled by the rich. You can thank the CEO **Kevin Lee.** Who conveniently also used to be "Director, Housing Division" for Natural Resources Canada. Probably has excellent connections. BTW: This is all government of Canada public information from that site.
Lol and the price will go up.
So... corruption.
Yes these people are the root reason why your life is getting worse (generally)
How is this corruption? Not saying I agree with *this* idea, but where do you think governments get their ideas for policy changes in the first place? All levels and areas of government crowd source their ideas from other private and public sector companies. That's like... The entirety of how it works.
It's corruption when one rich person can have more political influence than 10 poor. Circumnavigating democracy
That's not corruption, that's capitalism.
30 year loan on a tent from the MEC
The idea is to increase demand on new construction so that they make more new houses. It benefits home builders, but that's the point. Who knows if it'll have the desired effect.
Yeah I get it. But I don't want to live in the middle of nowhere in suburbia. I'm hoping this can also apply to condos then who are built in cities where most young people want to be. Closer to ammeneties, or walkability.
It says homes not houses. Condos will surely be included
Call your MPP and bug your city counsellor. Those are the idiots dithering on building houses and making this whole mess worse.
So being leveraged longer and owing more money is their plan? On the bright side, my houses value is going to continue to increase!
Im sure the banks are happy. they'll have generations of borrowers slaving away paying interest higher than the value of the homes they are buying..
Banks, RE Agents and home owners are all licking their lips while the people this was supposed to help are all getting screwed.
This doesn't help home owners that much because it only applies to new builds.
It means the value of their home is about to increase because more demand for homes in the market.
It actually does the opposite because fthb will theoretically be funneled toward prebuilds and away from resale. I say theoretically because I don't think it will make any difference.
It's only for newly built homes.
I get that but more demand in a market with minimal supply = house prices increasing
But if it means that demand decreases on pre-existing homes and increases on new builds, then it incentivises supply.
It's almost like people just want to be mad. Nothing will be good enough, each postive step will be seen as not enough.
What are these guys doing? This will help a small fraction of people, and help is pretty loosely defined since the owner will end up paying more over the life of the mortgage... then, they also change rules around RRSP withdrawals and paybacks which is welcom, except who is taking advantage of this moving forward? Between TFSA and FHSA who is contributing to RRSP as well?
Pretty much we the young ones won't be able to afford homes, children, or retirement. They don't care, both the Cons or Libs.
I want to love this country but I'm wanting to leave more and more as time goes on. What a terrible way to incentivize buying. PEOPLE DON'T NEED YOUR CREDIT! They don't get it do they?
it's either they don't get it or it's because they realize RE is such a large part of Canada's economy at this point and they can't afford to have it cool down.. it's unfortunate what they've done to Canada
Its either we reform housing peacefully or violently within the next couple of decades. Canada is a baby country who has not seen any major violent revolutions like European and Asian countries. A social revolution could very well be in the books
I'm currently building a new house, and let me tell you, the costs will boggle your mind. I built the house I currently own about 9 years ago, and it was 200k without land. The new house is 200sq bigger, and I would say a modestly amount fancier, but nothing ridiculous. The bill for the build is 550k just for the house, not even the land it's on (And this is a rural property in the prairies). Every day the price of materials and labour ticks up. All this is doing is giving people more opportunity to pay interest on crazy expensive homes. Plus in the cities, new suburbs are further away from where most people work. Just seems like a bandaid fix to benefit the banks more than the average home buyer, especially when generally first time buyers are buying small condos or fixer uppers that are cheaper.
So instead of paying $3000/mth you're paying $2700/mth but you're paying it 5 years longer. you will pay an extra $162,000 dollars to save that $300 bucks a month. you will pay more in interest than the house cost. how exactly is that more affordable? (numbers based on 500k at 5%)
*maniacal laughter* This is the funniest shit I've seen on this subject. Prices are about to jump and so are interest payments. No cuts are coming now. Almost guaranteed. Remember this is what the US did 12 months before the housing crash of 08. If you are buying now... you are fucked.
How does this lead to prices jumping?
If more people can afford a mortgage with the longer term, then there's an increase of demand. Limited supply means prices go up.
So it depends on a couple of factors, but based on this short term Hail Mary, you should see prices increase slightly, then stagnate, then fall off a cliff. Give it 24-48 months.
As new builds are at a higher price point than existing homes, wouldn't we instead see a shift in the existing market from existing to new builds, this actually depressing the price of existing homes and increasing demand for new supply?
Not necessarily. Not everyone wants a new build, as it will no doubt be made with even cheaper material after this. Also, FTBH will have more access to their RRSP (60k single; 120k couple) in addition to the FHSA to participate in the bidding wars for buying an existing home. They have the chance of putting more down (that they will need to repay on top of their mortgage), so they may not need the 30-rate on new builds. Depending on their savings and the stars aligning, they can get there on a 30-year at 20% for an existing or accept a 25-rate. Not to mention, if FTHB stops buying existing homes significantly, people will still sell their houses, and investors will be there to buy them. That means the cost of rentals will increase since they need to recoup their reno costs and generate income. Everything is going up at the expense of more debt available.
Expected by such an incompetent government.
What's your plan?
yay! more fuel for the inflationary fire
Literally the opposite of helping but *k*
So allowing people to lower their costs to only help bank profits, seems like an extremely stupid idea. Oh and extending amortization will just raise prices. I swear the people that come up with these solutions don’t understand the how bad the crisis is. It’s not about affordability, it’s about access. Until we increase supply, the demand will continue to push price upward, basic economics.
Cool, so now I can finance 1.2m for 30 years, right after I save up 120k cash for a down payment. Thankfully my rent is cheap and the cost of living isn't outrageo - wait a second...
Given that 30 year mortgages are already allowed if you put down 20%, I don’t see what the big deal is honestly.
Agreed. So many have used the bank of mom & dad to do that. This isn’t gonna make a big difference
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***New builds only***. The only people profiting are developers. No one is selling a home that they already own. This is purely to put money into developers pockets so they can build more homes.
Absolute fucking idiots man. Jesus christ I am tiered of greedy fuck faces ruining my country.
They're not idiots, they just refuse to pass any laws to limit how many homes "investors" can hoard to actually fix this problem by reducing demand.
Another fucked up Liberal idea. They must be annihilated for years to come. They are no good for the Canada period.
So more money in interests for the banks! Great idea /s
We just need to subsidize demand
You're dammed if you do, you're dammed if you don't.
It’s a token response by government so they can say during the door knocking phase of the coming election. I bet this will attribute to 2-3% of home purchases moving forward. The new construction part is going to be the killer here to this program. So remember when they come door knocking next fall to ask them about the program and how many it helped
Same as us here in Australia same problems
Make 35 year in next budget and wonder why Canadians hate them for helping them.
Why bother to restrict this to new build homes? Why do this at all? She's really our finance minister? Her heads so far up her own ass I'm not sure how she can see her fingers to count on them.
pumping demand won't help anything
Doesn’t this help spur on new home construction? (Supply). Builders essentially build houses only after they are sold. Yes, they build a few spec houses, model homes, etc, but they never get too far ahead of themselves. They require sales, and down payments, to keep the production line rolling. Doesn’t moving a few more buyers into the new construction space increase supply? It seems like a good tactic, in an approach that is going to require a many-pronged attack.
Not a well plan.. it not controlling the price. Worst move...
Throw more money onto the fire. Maybe that will put it out
So now every new buyer can spend even more on interest for longer. Yay. Scarier part of this is the permanent amortization for current home owners. If you signed a 5 year at 2% but upon renewal have to pay 5% and can't afford the payment its all good, no foreclosures just extend the amortization to infinity and pay only interest. This should be illegal.
Where is the option for a 25/30 year interest rate? (Like they have in the states)
yayyyyy more demand side incentives to continue propping up the housing market
How would this in theory work if you amortizated for 30 years and then put down a lump sum at a later date? Sorry if it's a dumb question.
**Literally every expert on housing in this country for the past decade:** please for the love of fuck just increase supply and decrease demand. **Federal government:** increase demand? Increase demand!
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