Your MPC Board of Directors and I are closely monitoring the news media, are continuously discussing the various market dynamics with our members across the country, and are in continuing discussions with our industry association counterparts such as the Canadian Real Estate Association (CREA) and the Canadian Home Builders Associations (CHBA). 

History of Advocacy Action – Housing Policies

For four years, MPC’s asks of government have been consistently focused on improving home ownership accessibility for would-be first time buyers and owner occupiers; we recently completed our Hill Week with over 60 parliamentarians, and we still are speaking with many of them now as the discussions on house prices get louder. The implementation of the stress tests and recent reductions in debt service ratios for insurance qualification have impacted first time buyers disproportionately, and it can be demonstrated that they are not contributing to the escalating prices. Even as prices retreated in 2018 in response to updated Guideline B-20 requirements, homes were no more accessible to first time buyers since they now mathematically didn’t qualify to purchase the newly lower priced properties. 

With this in mind, the MPC board does not support increased stress tests or reduced debt service ratio maximums. Our priority focus in policy discussions remains the aspiring middle class and would-be owner occupier purchasers. 

Supporting First-Time Buyers – Protecting Market Access

As we see it, the real estate price increases over the past 10 months have been driven mostly by individuals and families needing to improve their living space following a forced reassessment of their pandemic lockdown needs. We acknowledge, however, that current price escalations have spurred the reintroduction of speculative purchases in the market, once again creating unhealthy competition. 

As such, MPC is more receptive to policy recommendations aimed at reducing speculative activity that doesn’t inadvertently reduce market access for first time buyers or owner occupiers. We are considering a number of alternatives. Reduced maximum LTV caps/increased down payments for non-primary residence purchases would reduce the potential leverage of investors, permitting some easing of competition in the market for owner occupiers. We are also weighing the merits of various speculative tax structures meant solely to dissuade short term ownership or “flippers”, but suggest an exemption is required for new construction homes; we are very mindful of the need for investor capital in construction projects across Canada, and want to encourage new supply, in all its forms, any way we can. Supply shortages are, after all, the primary reason for these price escalations. 

We are currently conducting member focus groups, and with input from these discussions, the MPC board will provide formal recommendations to policy makers. We will keep you informed of the final recommendations and their reasoning, and invite you to submit your thoughts to advocacy@mympc.ca.

In the meantime, I’d like to thank you for your continued membership. As always, we welcome your comments.

Thank you.

 

Paul Taylor

President & CEO