Housing has become a front-burner topic in the federal election campaigns, and rightfully so. From 2010 onwards, the gap between the average house price in the Greater Toronto Area (GTA) has widened significantly. As per TRREB and Statistics Canada data, the average house price in Toronto is now almost 10 times the average household’s annual income. Despite helpful government programs, like the First Home Savings Account and private initiatives, like the Tonsto down payment assistance program, homeownership still remains out of reach for many.

The federal parties have pitched several proposals to fix this deepening housing crisis. Here’s what the Liberals, Conservatives, and NDP - the three major parties in Canada’s elections - have proposed so far.

Who’s Proposing What to Fix the Housing Affordability Crisis

Liberal Party of Canada

The Liberals are continuing many of the incumbent government’s existing policies. The federal party, now led by Mark Carney, have also introduced new strategies to tackle the housing crisis effectively.

• No GST for First-Time Buyers:

Eliminate the Goods and Services Tax (GST) for first-time buyers purchasing homes below $1 million.

• Doubling the Pace of Construction

Complete the construction of 500,000 new homes annually over the next decade to fix the housing shortage.

• $4 Billion Housing Accelerator Fund

The fund’s primary goal is to streamline development approvals and promote higher-density housing developments.

• Investment in Modular Housing

Putting $25 billion towards the construction of prefabricated and modular homes. This policy aims to reduce costs and construction time while creating high-paying jobs in the housing sector.

Conservative Party of Canada

The Conservative Party's policies aim to increase the housing supply and reform mortgage policies.

• No GST on Any New Home

Unlike the Liberals, the Conservatives have proposed eliminating the GST on all new home purchases. Without the GST, homebuyers can save up to $65,000 upfront, depending on the property’s price.

• Sell Federal Properties to Boost Housing Supply

Sell off 15% of federal buildings and free up thousands of acres of federal land to increase available land for housing development.

• Incentives for Municipalities

Municipalities must increase the construction of new housing units by 15% annually. The municipalities which go beyond the target would receive bonus incentives.

• Penalising NIMBYism

Fining municipalities that say “NIMBY (Not In My Backyard)” to new developments.

New Democratic Party (NDP)

The NDP’s housing strategy focuses on the people who need the most help - renters, low-income families, and Indigenous communities.

• 100,000 Rent-Controlled Homes by 2035

The NDP plans to build 100,000 rent-controlled homes by 2035 using federal Crown land.

• Easier Mortgages for First-Time Buyers

Expanding the mandate of CMHC so it can offer long-term, low-interest mortgages to first-time buyers.

• Cracking Down on Corporate Landlords

Bar lenders from seeking assistance from low-interest loans, tax incentives, and mortgage insurance. This restriction will be for lenders accused of price gouging or unfair rent increases.

How Long Before These Policies Move the Needle on Affordability

Let’s assume for a moment that the federal parties aren’t making these bold promises to win votes, and that whichever party comes into power actually follows through on their proposed changes. Even then, we could see positive shifts in the housing market after years. After all, the housing affordability crisis is a deep-rooted issue and can’t be solved overnight. According to the CMHC, the new housing supply could take up to 30 years to impact affordability. In short, the recovery path to the housing affordability crisis is a long road ahead.

However, it’s not all doom and gloom. If the new government implements the proposed policies on time and introduces more measures to boost housing construction, the road to recovery could be much quicker.

What Should Homebuyers Do in the Meantime - Wait or Make a Move Now?

As a home buyer, you can choose to wait that long for houses to become more affordable. Or you can work towards achieving your homeownership dream sooner rather than waiting around. Yes, despite the challenges, securing your dream home is possible. Here are some strategies that Canadians are using to reach their homeownership goals, and you can too -

1. Use Down Payment Assistance Programs

Down payment assistance programs can give you the financial boost you need to get into your first home. Government programs like the Home Buyer’s Plan allow you to borrow up to $60,000 from your RRSP to use towards your first home. The First Home Savings Account is another government program that lets you save tax-free for a down payment. There are also private down payment assistance programs like the Tonsto. Using this program, you can get up to 2% of the home's purchase price without repayment or shared equity obligations.

2. Ask for Support from Family

More and more Canadians are asking family members for help when buying their first home. Family members can help by -

• Offering a financial gift
• Co-signing a mortgage
• Giving you a loan with more flexible terms

If you have family members who can give you a helping hand while buying a home, don’t hesitate to ask for support.

3. Find Ways to Boost Your Income

Increasing your income, even temporarily, can significantly speed up your savings timeline. You can start a side hustle or consider negotiating a raise at work. Even an extra few hundred dollars a month can go a long way toward your down payment or help with closing costs.

4. Reset Your Expectations and Be Flexible

In today’s tight economic climate, homebuyers are adjusting their wishlist to afford a home. According to a survey by Sagen, 34% of first-time buyers bought a house in a more affordable area than they originally intended. Meanwhile, 32% purchased a smaller home than they had hoped for. If you also can, you must trim your home-buying wishlist and be flexible with your expectations.

So, it’s apparent that plenty of strategies exist to help you become a homeowner amidst the challenging housing crisis. Trying even one of these strategies can make home-buying much easier on your wallet. The real question is if you’re ready to get your finances in solid shape and tap into all the innovative paths to homeownership. Or do you want to wait on the sidelines and watch if the housing crisis improves or takes a turn for the worse? The decision is yours to make!