RESCON says budget measures don’t do enough to help first-time homebuyers

/EIN News/ -- Vaughan, Ont., April 16, 2024 (GLOBE NEWSWIRE) -- Housing measures announced earlier and reiterated in today’s federal budget are sound initiatives for the most part that will have positive outcomes but there continues to be a lack of support for the first-time homebuyer who has been effectively shut out of the market, says the Residential Construction Council of Ontario (RESCON).

“We commend the federal government for seriously trying. There are positive measures here to assist purpose-built rental housing supply. That much is encouraging,” says RESCON president Richard Lyall. “But there is no relief for first-time buyers who have been pushed out of the market. They are being taxed on new housing at rates which would have crushed their parents and grandparents. Why are we doing that to them? Housing is a vital need and we are taxing it like alcohol and cigarettes. The cost of housing used to be three times the average household income but now it’s 10 times.”

Presently, 31 per cent of the cost of buying a new home is attributable to taxes, fees and levies, according to a study done by the Canadian Centre for Economic Analysis. Seventy-six per cent of people seeking to buy a home can’t afford to buy and live in what is being built.  The average Canadian home costs $741,000 and the minimum income required to qualify for a mortgage is $195,000. Disturbingly, incomes have not kept pace with the increased cost of buying a home.

For people seeking affordable housing, and especially those looking to buy their first home, the picture does not look bright. Housing starts are expected to decline and prices are expected to rise. This will make it even more difficult for first-time buyers. Many young people are leaving our cities and seeking accommodation elsewhere because they can’t afford a home.

While we are encouraged to see changes in the budget, including an increase to the capital cost allowance rate for apartments from four to 10 per cent, and commitments regarding activating crown land for housing as well as impactful measures with respect to immigration that will encourage newcomers with skilled trades, there continues to be a lack of support for the first-time homebuyer.

“The government’s failure to take solid steps to help first-time homebuyers is short-sighted and self-defeating in terms of meeting the challenge of the housing affordability and supply crisis,” says Lyall. “To ensure the health of our economy, we must do more to help these homebuyers get a foothold in the market. The budget missed the mark on that front. We must help young Canadians who want to buy their first home. They are the future of this country.”

RESCON is the province’s leading association of residential builders committed to providing leadership and fostering innovation in the industry.

Grant Cameron
                    RESCON
                    905-638-1706
                    media@rescon.com