As home prices continue to climb in Canada’s biggest housing markets, many Millennials are beginning to worry that the goal of homeownership might be out of reach.
But, according to a recent speech by Finance Minister Bill Morneau, the Trudeau government may be considering new ways to make housing more affordable for the younger generation.
Speaking in Aurora on Tuesday, Morneau said that the federal government was focused on three housing issues: a lack of affordable housing, high home prices, and barriers to entry for Millennials.
Morneau noted that the new mortgage stress test, introduced last January, has helped to cool red hot housing markets like Toronto and Vancouver, but made it difficult for some first-time buyers to qualify for a mortgage.
It doesn’t help that interest rates are also continuing to rise — the Bank of Canada hiked the overnight rate to 1.75 per cent in October and is widely expected to do so again in the spring.
The comments come in the lead up to the October federal election, with the Trudeau government expected to outline campaign promises in the coming weeks. Industry watchers are beginning to speculate about what Ottawa may be willing to promise cash-strapped Millennial home buyers.
Last fall, the federal government announced a 10-year $40-billion national housing strategy, but its focus was largely on the construction of affordable social housing. They have yet to fulfill their 2015 campaign promise of enhancing the Home Buyers’ Plan. The current plan allows first-time buyers to borrow up to $25,000 from their RRSPs.
Meanwhile, NDP Leader Jagmeet Singh announced on Monday a proposal to build 500,000 affordable housing units in the next 10 years. He also suggested that the federal government should provide a subsidy to renters spending over 30 per cent of their income on housing.