Post-election Canada: REIN reveals top 3 most likely, and 5 more likely, policies to ‘change housing market as we know it

On January 24, 2020

Vancouver, BC: The Real Estate Investment Network (REIN) reveals the top three most likely, and five more likely, policies affecting real estate as a minority government emerges post-federal election. According to REIN’s Special Report on the federal election, Canada is likely to see:

  1. an increase in immigration and related changes to immigration policy,
  2. increase in income taxes for wealthier households and corporations, and
  3. recommendations for policies in support of increasing housing supply, such as possible rental building programs.

These findings are based on REIN’s analysis of political promises and campaign platforms related to real estate. REIN compared the platforms that specifically relate to investors from Liberals, Conservatives, and the New Democratic Party (NDP) to identify the most likely coalitions on various policies. These policies were analysed using symbolic logic, specifically, using visual Venn diagrams. Intersections of where commonalities in the major political parties’ campaign platforms show most or least likelihood of certain policies getting passed, amended and/or revised.

“While no one can predict or foresee the political future, by reviewing party positions and identifying where possible intersections or divergences occur, one can be more informed on potential alliances and legislation that could possibly affect real estate,” says Jennifer Hunt, Vice President Research for REIN.

“This analysis is by no means exhaustive but it does target those most likely to impact the real estate market according to REIN’s Long-Term Real Estate Success Formula including platform promises potentially affecting economic fundamentals, like GPD, jobs, and population, rental markets and property markets,” she adds.

“The results of this research are important for guiding what homebuyers and real estate investors should pay close attention to during this minority government. That said, the analysis is based on campaign promises, combined with politicking, posturing, and potential pitfalls, there’s a long and winding political road ahead before actual policies could be created and enacted into legislation,” says Don R. Campbell, Senior Real Estate Analyst for REIN.

According to the report, all three parties assessed converge on the same platform of increasing immigration. Thus, it is most likely that more people will migrate to Canada in the coming years. “An increase in the influx of migrants amounting to over one million people in three years is tantamount to increasing rental demand. This is good news for rental housing providers as migrants have higher tendencies to rent property rather than to purchase their own homes, especially within the first four years of settling in Canada,” says Hunt.

Liberal, Conservatives, and NDP parties have also been found to converge in increasing affordable housing supply in the coming years. It is, therefore, possible we will see recommendations for policies in support of increasing housing supply, such as rental building programs.

Findings also indicate a possible increase in income taxes for households belonging to higher tax brackets as well as corporations.

“These convergences reflect a higher likelihood of coming to fruition, which could change the housing market as we know it. For example, federal policies to increase jobs and higher immigration rates would put upward pressure on rental markets. This in turn increases demand, decreases vacancy rates and ultimately increases property values,” Hunt adds.

The report also reviews other key housing-related political topics asserting a higher likelihood of:

  1. Stress test to be maintained
  2. No changes in the current amortization program
  3. Some form of anti-money laundering unit/task force to be created
  4. Increased housing taxes for foreigners and non-Canadian residents
  5. CMHC First-time Home Buyer’s Incentive Program (FTHBI) continuing as it is.

Concerning the CMHC First-time Home Buyer’s Incentive Program (FTHBI) continuing as it is, the report also suggests watching for a potential increase of the FTHBI’s purchase price limit to nearly $800,000 in high-priced markets in line with the Liberal campaign platform.

About the Real Estate Investment Network

REIN was founded in 1992. It is Canada’s most trusted source of real estate investment education, analysis, research and strategic leadership. It offers a platform and environment where its clients have transacted more than 39,300 properties, representing more than $5.1 billion of real estate holdings.

REIN delivers balanced and impartial research and economic insights integrated with relevant analysis. It brings critical information, opinions of industry thought leaders, and proven strategies of success together in a way that homebuyers and investors can use to make the right decisions on where, when, and why to invest in real estate.

REIN sees a bright future for the Canadian real estate marketplace. Its clients, armed with current and insightful research, and provided with strategic guidance and help from an exceptional like-minded community, are set to continue to thrive and achieve their personal investment goals.