TORONTO, March 28, 2017 /CNW/ - Members of Mortgage Professionals Canada were pleased to meet with dozens of Members of Provincial Parliament and senior government officials today. Topics discussed included housing affordability, availability and accessibility and potential policy solutions to the growing imbalance within the Greater Toronto Area market.
"Housing affordability in the GTA and the surrounding area is becoming increasingly challenging for more and more Ontarians and we were pleased to lend our voice on ways we think the government can restore balance in the market," said Paul Taylor, President and CEO, Mortgage Professionals Canada. "Today's advocacy efforts have gone a long way in educating MPPs on the positive role that mortgage brokers play in the Ontario housing market through lower rates and increased competition."
It is clear that many regions in the province continue to cope with challenges around affordability and lack of supply. In the GTA, lack of supply is impacting affordability for many of the middle-class. Imposing a foreign buyers' tax does nothing to solve a lack of supply and could create adverse effects on the national, provincial and regional economies. We encourage the government of Ontario to continue to work with municipalities to remove barriers to development and find ways to encourage supply in the GTA, as well as help with affordability and encourage new home sales overall. Increasing supply through decreased red tape, increased investments in critical infrastructure and increased incentives for single family home construction would help alleviate some of the affordability challenges in the region.
Backgrounder
Who We Are
Mortgage Professionals Canada is an industry association whose members include mortgage brokers, mortgage lenders, mortgage insurers and industry service providers. We have over 11,500 individual members nationally with over 6,000 members in Ontario and over 1,000 businesses across Canada.
The mortgage broker channel originates 34% of all mortgages in Ontario (33% in all of Canada) and approximately 50% of mortgages for first time home buyers. This represents around $80 billion dollars in economic activity across the country.
Characteristics of the Ontario housing market
Concerns/Considerations
We applaud the government on its announcement to increase the land transfer tax rebate for first-time homebuyers and we encourage more such policies targeted at those looking to enter the housing market.
Our industry is helping the government achieve its goal of balancing the budget in 2017-18. According to recent data from the Ministry of Finance, the land transfer tax is $514 million above the 2016 Budget projection, reflecting the ongoing gains in Ontario housing resales and prices. The imposition of a foreign buyers' tax could potentially decrease government revenues, if housing activity is stalled, which will negatively impact the province's ability to balance its budget in 2017-18.
It is clear that many regions of the Ontario housing market continue to cope with challenges around affordability and lack of supply. In the Greater Toronto Area, the lack of supply in housing is impacting affordability for many middle class Canadians. Imposing a foreign buyers tax does nothing to solve a lack of supply in the GTA and could create adverse effects on the national, provincial and regional economies. According to TREB most foreign buyers purchase a home for their family, personal use or to provide a rental market with much needed supply, all this helps grow the economy and should be encouraged rather than suppressed.
In fact, looking at Vancouver's experience, a foreign buyers' tax has not improved affordability and has instead simply reduced housing activity. According to the Vancouver Real Estate Board, February 2017 had the lowest number of new listings since February of 2003, but the benchmark price for a detached property remains unaffordable for many at $1,474,200 in Vancouver. It is un-Canadian to blame foreigners for affordability concerns caused by lack of supply in the market.
What We Are Asking the Government to Consider
SOURCE Mortgage Professionals Canada
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