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Liberal Housing Platform includes Foreign Home Buyers Freeze and Blind Bidding Ban Liberals also plan support for affordable housing construction and repairs. Photo by Jennifer Gauthier/Reuters Files
Article content: The Liberal Party proposes to freeze foreign home purchases and to ban blind bidding in an election housing platform that aims to improve affordability in Canada's major cities.
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The platform was unveiled Tuesday by Justin Trudeau, the leader of the Party, in Hamilton, Ont. This video is not loading. We are sorry.
Tap here to view other videos by our team. Refresh your browser to see the Liberal Housing Platform. It includes a foreign home buying freeze and a blind bidding ban. Back to video. The ban on foreign homebuying would last for two years. It would serve as a deterrent to speculation by foreign real estate investors. This mirrors the promise made last week by the Conservative Party when they launched their platform. Rob McLister: Nothing is more shortsighted than telling the rest of the world that Canada is closed and doesn't accept off-shore investment. The Liberals plan to support affordable housing construction and repairs. They will invest in 1.4million homes over four years. This includes spending on Indigenous housing, the conversion of office space into housing, and the introduction of a tax credit for renovations to secondary homes. This plan targets speculation by imposing a temporary ban against house flipping. It also aims to promote price transparency through the introduction of a Homebuyers Bill of Rights that prohibits blind bidding. Blind bidding refers to a process where multiple potential homebuyers are competing for the same property, without knowing what other bids have been.
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Article content: The real estate market needs transparency Rob McLister Other measures include establishing a tax free First Home Savings account for Canadians aged under 40, which allows them to save up to $40,000 and pay no interest. The First-Time Home Buyers Credit is doubled from $5,000 to $10,000. Also, the Canada Mortgage Housing Corporation (CMHC), insured mortgage cost is cut by 25%. Tax penalties are also being applied to vacant homes. Benjamin Tal, deputy chief economic economist at CIBC Capital Markets, stated to the Financial Post that it was a good idea to invest in housing supply solutions for major cities in high-cost areas.
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Article content (These measures represent) a step in the right direction, as some of them are aimed at supply. Tal stated in an email that more money for municipalities is essential and constructive because this is where there are significant supply bottleneck problems. Tal said that while the ban on house flipping, and any barriers to foreign investment in housing, could have minor impacts, he doesn't expect them to make a significant impact on price pressures. Tal stated that the tax-free account for young homebuyers and lower rates on insured mortgages, which Tal pointed out are already quite low, will have minimal impact on affordability. Tal expressed concern that some households may be more vulnerable to higher interest rates in the future, noting their high sensitivity to rate changes.
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Article content The package is substantial and should result in an improvement in affordability over time. Although no package can reverse the situation completely, the array of measures should still be considered a positive step as it acknowledges the importance of supply issues. I'd like to see more support for purpose-built rental construction to make it affordable. Tal said that he believes some of the policies, such as a Home Buyers Bill of Rights or taxing foreign-owned vacant land in large cities, are sensible. Read More on this Topic: How the Conservatives plan for Canada's housing crisis to be tamed. How federal parties plan fix Canada's housing crisis after years and years of failing policies. Canadians are piling into mortgages at the fastest rate since 2007.
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McLister, in an email, stated that article content (The Home Buyers Bill of Rights), is long overdue. Transparency is essential in the real estate market. This is how price discovery works efficiently. McLister said that there is no economic reason for foreign land banking to continue in Canada for many years. McLister was left scratching his heads by policies such as the creation of a tax-free First Home Savings Account; down payment loans under the First-Time Home Buyer Incentive adjustment and banning foreign ownership.
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McLister stated that telling the world Canada is closed to off-shore investment is the most shortsighted thing you can do. This solution of a drop-in the bucket was created by voters obsessed politicians. The non-resident owner of housing is only a tiny fraction. Canadians should be open to any foreigner who is wealthy enough to own a small percentage of housing. The Conservatives promised to build one million homes in three years, impose a ban on foreign speculation for two years, and make changes to the mortgage stress testing. NDP pledged to build 500,000 affordable houses in a 10-year period, reintroduce 30-year CMHC mortgages for entry-level homes, impose a 20% foreign buyer tax, increase homebuyers credit to $1,500, and eliminate the federal portion GST/HST construction costs for new rental units. Email: shughes@postmedia.com | Twitter: StephHughes95
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