When Amy Lockwood and her husband decided to start a family, they began house-hunting in order to lay their roots down in a home they owned, and to stop paying rent.
After discovering the sky-high price tags, double land-transfer tax, closing costs, and required down payments, Lockwood concluded that it simply wasn’t going to work for them.
“We started looking into buying and quickly realized we could not in Toronto,” Lockwood said. “The closest we could afford would be Belleville.”
Lockwood's family is one of the many in the GTA who will be casting a ballot with the issue of housing affordability on their minds during this year’s federal election on Oct.21.
“What really matters to people is the ability to buy a first home when you’re a young person,” James Laird, co-founder of financial-technology company Ratehub Inc., told CTV News Toronto.
The Conservatives announced Monday plans to relax the stress test for new mortgages and plans to review of the test for mortgage renewal, an affordability threshold brought in by the Liberals to ensure homebuyers can still afford their homes should interest rates rise.
A Tory government would also also allow first-time buyers to take out a 30-year mortgage, which was briefly allowed under Stephen Harper's Conservatives. By stretching out the amortization period, buyers would pay more interest in the long run, but would have lower payments in the short term.
Amy Lockwood, who is playing with her son Roger, says her family is interested in what affordability incentives the federal parties are offering for first-time home buyers.
The NDP has also pledged a return to 30-year mortgages.
The Liberals, meanwhile, plan to expand the First Time Home Buyer Incentive program, in which the Canada Mortgage and Housing Corporation loans the buyer up to 10 per cent of the purchase price of the house so long as the borrower has the minimum down payment.
“The number one issue facing first-time home buyers is having enough income to qualify for a mortgage that allows them to buy a house,” Laird said. “So by them qualifying for about 10 per cent more, it’s going to help a few more people enter the market.”
The plan is currently available for first-time buyers earning less than $120,000 annually, but a Liberal government would raise that cap to $150,000. It would also raise the maximum eligible home price in hot housing markets, from about $505,000 currently to $789,000.
“When you look at who’s going to vote, the largest cohort that really drives housing is all about the millennials, whether they rent or whether they buy,” Pattie Lovett-Reid, CTV’s chief financial commentator, said.
However, Lovett Reid warns of the dangers of getting in too deep, especially if interest rates go up.
“I worry about the day of reckoning coming for Canadians. Some people may get into the housing market sooner than they should,” she said.
Lockwood said her family has fallen in love with their current east-end community, but worries their landlord could decide to sell their house at any time.
“We’ve kind of begged our landlord for an extended lease, just to have some sort of security, so we can stay in the neighbourhood,” she said. “Because at this point we just couldn’t buy.”
