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Promises, promises: Are they flaky pastry or filling?

Lindsay Smith

By Lindsay Smith/Real Estate Columnist

It is less than two weeks out from our Federal election and one of the issues facing Canadians is real estate. I took a dive into all three parties and looked at what they are promising to fix the problems. Once you strip out the promises that are more about attracting votes and less about creating change, we will find that much of what is being talked about is more flaky pastry than filling. Here is a brief overview.

I have captured the views of the leading parties placing them into bullet points to see if what being offered will help deal with the issues, we have here with real estate in Durham Region. Here is what is being offered as solutions:

  • Building one million homes in the next three years, “create” 100,000 homes by 2025 and 500,000 affordable homes by 2031.
  • $1 billion to a “rent-to-own” program.
  • Create a tax-free savings program up to $40,000.
  • Waive HST/GST on costs to build affordable rental units.
  • Ban foreign investment for two years.
  • Reduce mortgage insurance costs and extend amortizations of mortgages.
  • Adjust the “stress test” making it easier for self employed/gig workers to qualify for mortgage.

Let’s start off with the main issue in the real estate market. Real Estate is relatively simple to understand – supply and demand. When you have high demand and low supply, values increase, and people bid to secure the home they want to purchase. We have a supply issue. Once that is solved, our market will return to balance. (Interesting, most of the solutions offered are directed at buyers, not dealing with the supply.)

The cause for low inventory can be as complex as we want to make it, or it can be broken into a few simple causes. One issue rests on the demand side. Durham Region is attracting people from outside of the GTA, and other provinces. We are seen as a “destination.” Another factor affecting demand is immigration. Currently Canada is on track to have over 400,000 people move to our country, and about half of that group of new-Canadians settle in the GTA. We simply do not have enough homes to meet the needs of the Buyers. In fact, our inventory is the lowest in all of the G7 countries. So low, in fact, that we require 1.8 million homes to meet the demand. A visual would be pouring four gallons of water into your daughter’s two-gallon fish tank. At some point, the water starts overflowing with nowhere to go. This is where we are in Durham Region with homes for buyers and rentals for tenants.

To give a sense of what is possible when it comes to adding new homes to meet this demand, in 2019 (pre-pandemic), there were 208,000 new home starts in all of Canada. Unless something changes, we are in this crisis long term.

When I see campaign promises between 500,000 to one million homes to be built, what I see, as a realtor working daily in real estate, is they are talking points that are not based on reality.

What ideas could possibly make differences, allowing more homes to be built and ease the problems that we, as a country are facing? Here are a few thoughts – not meant as “election promises” but viable solutions.

First, “Red-Tape.” Let me quickly share a personal experience of getting a home built. I had a small builder purchase a lot to build a home on. The lot needed to be severed from an existing lot. This process took around 18 months to complete. The bureaucracy is part of the problem.

  • Reducing the “red-tape” would allow shovels to get in the ground faster to build more homes.

There is only so much the Federal government can do with regards to supply, most of the bureaucracy is at the municipal and regional levels. However, if some form of incentive was made to developers to build affordable homes, ensuring that monies given would in turn help people buy more affordable homes, this would help families looking to enter the market. Municipalities have increased the costs for homes to be built to a point that a large portion of a purchase price of a new home is directed, not to the developer as one might think, but to the government. Regional and municipal governments have incredible control with zoning on property allowing not only the types of buildings suitable for the property, but in allowing anything to be built on the land.

Another issue is land. I have seen people protesting property being developed to build homes on. I wish I could say it is property being developed on “environmentally sensitive land,” however, I have witnessed outrage when a developer attempts to create new housing, across many areas and communities, even when it makes sense to use the property for housing.

I may take some heat on suggesting supporting developers, however, one path forward might be to encourage builders to build affordable homes in areas that people want to live. I am certain that if the flow of incentives was rigorously accounted for, the money would flow to buyers in the form of lower prices for homes.

I have a dear friend from beautiful sunny Arizona. When we have visited, I have seen many homes being built to service a huge need – owners in their 60’s and 70’s looking to downsize to bungalows with smaller lots. Locally, I have many clients who have been in their homes for decades and remain only because there are no viable options. Alone, if there were homes for these folks with grandkids to downsize to, it would free up hundreds if not thousands of much needed homes for buyers.

There are solutions to the housing crisis, however, I feel what is being offered by the Federal parties will keep us in crisis with little help.

If you have any thoughts or ideas on how to deal with our current real estate crisis, I can be reached at or or you can send them directly to Erin, Justin or Jagmeet.