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The Canadian federal government proposed a series of new housing policies in the 2022 budget to make housing affordable for Canadians. SciDev.Net recently interviewed Husen, the Federal Minister of Housing, to respond to some of the concerns of netizens in response to these new housing policies. Husen said the effectiveness of the new deal, which includes a package of plans to increase supply, crack down on speculation and help first-time buyers, also needs to be considered together. As for the impact of the central bank’s interest rate hike on the housing market, Husen said Canada’s financial system is very sound, far less than the subprime crisis in the United States in 2008.
Here are the details:
1. First of all, some netizens and people in the industry pointed out that the policy of banning foreigners from buying investment houses will not effectively suppress housing prices, because the number of foreign buyers is very limited. By contrast, Canadian real estate investors own multiple homes, accounting for 30% and 40% of the housing stock. Will the government introduce corresponding policies for domestic multi-suite investors?
The new housing policy is a package that needs to be examined together. Banning foreign buyers is one of them, and there are many other policies, including a significant increase in housing supply, all of which are designed to meet housing challenges and make Canadians affordable.
‘The population growth rate of our country is the fastest among the G7 countries, but our housing supply does not reflect this,’he said. So we need to build more houses, and the government’s plan is to double the construction of new houses in the next decade. Second, the government will help first-time buyers. We have launched a tax-free savings account for the first suite with a maximum amount of 40,000 yuan. Make it easier for first-time buyers, especially young people, to buy houses. The government also doubled the tax credit for first-time home buyers to 10,000 yuan to help them pay for home-related expenses, and extended the incentive scheme for first-time home buyers.
In addition, the government will also put an end to unhealthy practices in the real estate industry, such as banning blind bidding. The government is also studying further measures to solve real estate speculation and other behaviors.
two。. Canada now absorbs 400000 new immigrants a year, equivalent to about 200000 families. How can we provide them with so much housing? New immigrants gather in big cities, how to attract them to small communities and remote areas, and provide jobs so that they can stay, thereby reducing the pressure on the demand for housing in big cities?
Husen said the government has made great efforts in this regard, including the Atlantic Migration Program, which aims to attract and retain immigrants in the Atlantic provinces. The government has also launched a rural migration plan, a provincial nomination scheme and so on. These are all for immigrants to settle in rural areas. Many rural areas need a lot of technical personnel and labor, which is exactly what the government is doing.
3. The new policy introduced by the government does not target different regions and markets. For example, some cities need to ban foreign buyers, but others need to encourage foreign buyers. Will this one-size-fits-all approach be effective?
Husen reiterated the need for all policies to be put together, all of which are useful for housing supply, demand, property speculation, helping first-time buyers, and providing affordable housing, as part of the 2020 budget, housing policy is to address all these issues.
4. The Bank of Canada begins the cycle of raising interest rates, and interest rates will continue to rise. In this context, does the government have data on how many houses will default? How much will the Canadian mortgage insurer CMHC bear? What measures will the government take to avoid a market crash similar to the one in the United States in 2008?
Mr Husen said the Bank of Canada was independent in interest rate decisions. Any professional in real estate or even finance in Canada would say that our system is much more stable than it was in the US in 2008. We have a thoughtful, very cautious policy to manage mortgage, home ownership, and bank lending responsibilities. We have stress tests, homeowners have to pass the tests to get mortgage approval, and banks are well regulated, so Canada does not have the subprime mortgage problem of the United States that year.
5. Disputes between landlords and tenants have become increasingly prominent, with many reports of tenant abuse of the system, with extreme examples showing that about 50 landlords in Ontario have been made homeless by tenants. What can the government do to balance rights and responsibilities on this issue?