Mortgage Broker

CMB MAGAZINE cmba-achc.ca winter 2017 | 27 housingnecessity T he CMBA recently made representations to the Parliamentary Standing Committee, which is currently studying: n issues surrounding the Canadian residential real estate market; n the impact of the housing market on the Canadian Financial System; and n the challenges surrounding access to residential home ownership. is is what we told the MPs who comprise the committee. Housing as a Necessity and Affordable Housing as a Priority It goes without saying that people have to live somewhere, and if they are not able to purchase housing, they must rent. In doing the latter, they aren't paying down a mortgage on their appreciating asset, but paying their landlord. However, most federal government policies – such as the latest crop of federal mortgage rules, which are intended to promote economic stability by curbing consumer debt – have a singular focus on the economy. ese policies fail to consider that housing- affordability problems impact lower- and middle-income households, renters, first-time buyers, and even established homeowners. People without the ability to purchase a home must rent when vacancy rates are at an all-time low and rents are, accordingly, at an all-time high. In a November 2016 Canada- wide rental-market report from CMHC, it was found that: n Saskatoon (10.3 per cent), St. John's (7.9 per cent), Edmonton (7.1 per cent), Calgary and Saguenay (both seven per cent) are the major Canadian centres with the highest purpose- built rental-housing vacancy rates; n Victoria and Abbotsford-Mission (0.5 per cent), Kelowna (0.6 per cent) and Vancouver (0.7 per cent) are the major Canadian centres with the lowest purpose- built rental-housing vacancy rates; n on average, across Canada's 34 larger centres, rental rates for a two-bedroom apartment rose by two per cent compared to last year; and n the average rent for a two-bedroom apartment is $995 per month. In many communities, home ownership provides a more permanent and cost effective alternative to rental housing. Government policies that intend to curb Canadians from incurring mortgage debt fail to recognize that renters incur a significant financial burden without the benefit of owning an appreciating asset. Government policies and programs specifically intended to support housing needs have predominantly focused on providing social housing, but few government initiatives support the majority of Canadians who wish to access market housing. Federal regulatory changes to mortgages in recent years (most notably, those implemented in October 2016) have made it more and more challenging for Canadian consumers to secure mortgage financing and enter the middle class. To offset these changes as well as delayed market entry, the provinces (British Columbia, New Brunswick, Newfoundland and Ontario) are developing programs to assist first-time buyers entering the markets. For example, British Columbia introduced a program in December 2016 to fund second mortgages for first-time homebuyers who qualify for CMHC-insured mortgages for homes under $750,000. Clearly, government policies, such as new CMHC stress-testing rules on portfolio-insured mortgages, need to be balanced with policies and government action that make market housing accessible to Canadians. Factors Contributing to Housing Costs and Affordability Challenges Housing affordability and home ownership are linked by the need for accessible mortgage funds. Affordability is also linked to upward pressures on housing costs. Many factors serve to increase the cost of housing, which is ultimately borne by consumers, either through increased mortgage principal amounts or increased monthly rents. Experts Given an opportunity to speak in Ottawa, the CMBA put forward recommendations on how to alleviate Canada's most urgent housing issues BY SAMANTHA GALE, CMBA EXECUTIVE DIRECTOR Advice from the

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