Below is a summary of the 2019 Federal Budget that was released today and its high-level impact on housing and the Canadian real estate industry.
2019 Budget highlights that are expected to impact housing include;
- The introduction of a first-time home buyer incentive. Through the First-Time Home Buyer Incentive, Canada Mortgage and Housing Corporation (CMHC) would provide up to $1.25 billion over three years (starting in 2019–20) to eligible home buyers by sharing in the cost of a mortgage. As a means-tested program, the incentive would target Canadians that face legitimate challenges entering housing markets.
- A proposal to increase the Home Buyers’ Plan withdrawal limit to $35,000, from $25,000.
- A proposal to provide an additional $10 billion over nine years in financing through the Rental Construction Financing Initiative, extending the program until 2027–28.
- A proposal to provide $300 million to launch a new Housing Supply Challenge for municipalities. The Housing Supply Challenge will invite stakeholders to propose new ways to break down barriers that limit the creation of new housing and fund successful applicants.
- A proposal to support the Expert Panel on Housing Supply and Affordability with investments of $4 million over two years. Budget 2019 further proposes that Canada Mortgage and Housing Corporation invest $5 million over two years for state-of-the-art housing supply modelling and related data collection.
- The introduction of Reaching Home, a new $2.2 billion program designed to prevent and reduce homelessness, will launch on April 1, 2019.
- A proposal that starting in 2019–20, to create four new dedicated residential and commercial real estate audit teams in high-risk regions, notably in British Columbia and Ontario.
- To improve monitoring of real estate purchases and ensure that information is shared in a timely manner, Budget 2019 proposes to provide Statistics Canada with up to $1 million over two years starting in 2019–20 to conduct a comprehensive federal data needs assessment.
Key Takeaways
The key takeaway from OREA’s perspective is that the Federal Government has identified housing affordability, particularly for young Canadians, as an issue they need to address and are offering new, targeted support designed to help families find an affordable home. With the Federal Election set for October 2019 and with millennials increasingly making up a key block of voters for all parties, it is perhaps not surprising that measures such as the First-Time Home Buyer Incentive and increase to the Home Buyers’ Plan withdrawal limit are featured as centerpieces of Budget 2019. OREA has supported many of these issues from the provincial viewpoint so it is encouraging to see our perspective reflected in the 2019 Federal Budget. The Canadian Real Estate Association (CREA) should be commended for their advocacy efforts with respect to housing supply and affordability.