(Ottawa) The Canadian Home Builders Association (CHBA) wants Ottawa to offer a 30-year amortization period for insured mortgages on new homes.
CHBA says extending the period for another five years would help with affordability and further stimulate construction.
The move would attract more first-time home buyers to the market, in turn encouraging developers to build more homes, the association’s president and CEO, Kevin Lee, said at a conference Thursday. press.
“Canadians would love to buy a house. The problem is that they cannot afford to buy a house and do not have access to mortgages that would allow them to buy a house, Mr. Lee argued. And if we don’t have people who can buy, then the builders won’t be able to build these houses. »
The proposal is one of several recommendations the association made in a new report that outlines ways policymakers could help the industry build more housing.
Housing expert Mike Moffatt said he liked some of the recommendations made by the group, including establishing an investment tax credit to support productivity growth in the sector.
However, offering a longer mortgage risks boosting demand without addressing the fundamental problems causing the shortage, he said.
“I don’t think it’s particularly harmful. But I also don’t think it’s particularly useful,” Mr. Moffatt said in an interview.
The Canada Mortgage and Housing Corporation (CMHC) estimates that the country will need to build 5.8 million homes by 2030 to restore housing affordability.
Canada’s housing shortage has worsened amid strong population growth, putting increased pressure on governments to address the affordability crisis.
The Liberal government is under scrutiny over eroding housing affordability, with Conservative Leader Pierre Poilievre placing the blame squarely on Prime Minister Justin Trudeau.
Housing Minister Sean Fraser has acknowledged that Canada will not be able to significantly accelerate housing construction without innovation.
The federal government hopes to increase productivity and speed up construction through the construction of modular homes, that is, housing built in a factory and assembled on the ground.
Last fall, Mr. Fraser said the federal government would launch a catalog of pre-approved home designs that would speed up the permitting process and encourage more factory-built homes.
About a quarter of homebuilders use some form of factory construction, but there is still plenty of room to develop the technology, Mr Lee said.
The association wants a refundable tax credit equal to 30% of investments in machinery and equipment, similar to the investment tax credit created for clean technologies.
A strategy similar to that implemented by the government to stimulate the development of the green economy makes sense, Mr Moffatt said.
“This could be hugely helpful because we won’t be able to expand housebuilding simply by doing more of the same. »
The federal government is currently working on a housing plan which Mr Fraser said would be released in the coming months.
This plan is expected to build on housing policies already announced by the Liberals, including the elimination of GST fees on new developments.