Canada Mortgage and Housing Corporation (CMHC) lays out a plan to make the housing market affordable for all Canadians with a target date of 2030!
Recently the CMHC made some exciting announcements, and today we're putting a particular emphasis and focus on the new changes and upcoming plans to assist buyers emerging into the housing market and to provide an affordable home for all Canadians by 2030.
The first thing to bear in mind is that these are not set nor solid plans, there could be changes, and there are factors including help from the government as well as the economy that will eventually see out whether this is a highly ambitious goal and it's ability to be achieved.
Evan Siddal the president of the CMHC corporation was recently quoted as as saying
“We believe that everyone in Canada deserves a home that they can afford and that meets their needs. We also believe that we are in the best position to make that happen,” - “We are single-minded in striving toward this goal and it will guide our work in the coming years.”
Recent estimates have stated that there is around 1.6 million households in Canada that are in "core housing need" which means that those 1.6 million and living in homes that aren't overly suitable or are too expensive.
Pundits of the program have been vocal, with questions as to how these goals will be achieved and budgeted for, the models for affordable housing have not been laid out and are still being revised, pundits in particular are putting a focus on the middle income households being included in this plan, with Tim Richter, president of the Canadian Alliance to End Homelessness showing concern that the program will be stretched too thin, not having enough resources, and having a focus that's too broad
“I honestly don’t see how targeting affordable housing for middle-income Canadians makes any sense. I understand affordability challenges for middle income Canadians … but from an affordable-housing perspective, they really have to prioritize their investment to those in the greatest need first if they want to achieve the goals that they have set out.”
What this means exactly for the Calgary Real Estate market in particular will be tough to predict, with CMHC leading the way and delivering a majority of the money for the federal governments ten year plan which lands as a $40 billion dollar strategy for housing, its primary aim is to create over 100,000 new affordable housing dwellings by 2028 for households that are considered low and middle income.
The CMHC also announced that it will be launching a new program where they will kick in funds towards a home (giving them an equity stake in your property) which would in turn bring down the size of the home owners mortgage, but does come with a catch, while exact details are still expected to come down the pipeline, an example of this given by the government, outlined that if it's a newly constructed home, they could kick in up to $40,000 towards the purchase price (in exchange for a 10% stake in the property, on a $400,000 home that would bring your mortgage down from $380,000 ($400,000 minus your down payment) to $340,000 which would in turn result in a monthly payment drop of over $200 which in turn would then result in a savings of $2,700 per year. The catch however, is that home owners will be required to pay that back upon the sale of their home.
For now the details are still being rolled out, and the impact on the Calgary Real Estate market could potentially see emerging home buyers find a new revived relief on the financial stresses and barriers to home ownership, with the Vancouver and Toronto markets simmering, home buyers (especially first time buyers) across Canada are still feeling the effects and changes put in effect to cool the Vancouver and Toronto markets, these slow changes will hopefully alleviate some of these stresses and provide more clear paths for home owners to achieve their goals, this new plan and program will not be rolled out until fall of this year, leaving potential for new home buyers to hold off for these changes in hopes of taking advantage of this new federally backed program.