The federal budget was announced on April 16th and there’s a lot in it that’s highly relevant to the real estate industry.

Help with the cost of living is the budget’s primary focus, but nobody should be surprised there. Housing prices across the country have skyrocketed over the past few years, not just in Vancouver, but in other major cities as well.

While I love seeing a robust list of actionable items, my question is, can it actually all be done? After all, the road to perdition is paved with good intentions.

If you weren’t up to speed on what’s being included in the federal budget, here is a quick breakdown of some of those key points that will impact the housing market included in the announcement:

• 30 Year Amortizations for first time home buyers purchasing newly built homes, starting August 1, 2024.
• Increase in Home Buyer’s Plan Limit by allowing first-time buyers to withdraw more from their RRSP’s for down payments. Individuals will now be able to withdraw $60,000 as an individual and $120,000 for couples.
• Canadians withdrawing from their HBP between January 1, 2022, and December 31, 2025, can take advantage of an extended repayment period of 5 years (an increase of 3 years).
• A plan to build more homes faster by making it easier to access and launch Canada Builds and inject $15 billion to the Apartment Loan Construction Program
• The launch of a $1.5 billion Canada Rental Protection Fund
• A new Homebuilding Technology and Innovation Fund and a new Housing Design Catalog.
• A commitment to unlock 3.87 million new homes by 2031.
• A Multigeneration Home Renovation Tax Credit, providing up to $7,500 for constructing a secondary suite for a senior or an adult with a disability.

What it all means for us.

The housing problems the federal government is trying to solve aren’t so much for existing homeowners but for future homeowners. At very least, the Liberals are seemingly providing a multi-pronged solution. Last week, a survey revealed that 76% of Canadians felt that homeownership was out of reach.

That report also stated that 80% of survey respondents felt they needed help from a trusted advisor. REW’s own data supports this – last month, we had nearly 1,500 property tour requests from Homeseekers who weren’t already working with a buyer’s agent.

The introduction of new construction incentives and support signifies a proactive approach by the federal government towards alleviating pressure on the resale market. By tethering these incentives to the 30-year new-home mortgage amortization specifically tailored for first-time home buyers (speak to an REW Mortgage Partner for more insight on that), it becomes evident that the government is not only addressing current market challenges but also adopting a forward-thinking stance.

This strategic move not only encourages the growth of new construction but also facilitates access to homeownership for first-time buyers. This ultimately tries to promote stability and sustainability in the real estate market. The alignment of these initiatives reflects a comprehensive understanding of market dynamics and a commitment to fostering long-term affordability and accessibility in the housing sector. Time will tell if these are effective strategies.

Speaking of proactivity, you can find quarterly updates on the National Housing Strategy here.

For many Homseekers, not knowing where they will live is stressful. A big part of what a good real estate partner does is diffuse their fear and show them what a path to success can look like. For Homeseekers, there’s a lot of new information that can easily feel overwhelming. As their trusted advisor, it’s more important than ever to pay attention to what’s coming down the pipe to best support their real estate adventure.

*Stats taken from REW’s Connect Program Enquiries, March 2024

Reference: REW | The Guide | Economy | Unpicking the 2024 Federal Budget