For much of this election, the issues have been a lot of blah, blah, blah to most people. Who really cares about niqabs? Or when the navy gets its new ships and how many? If this pipeline or that pipeline are built? To most people, it’s just a lot of hot air that doesn’t have a direct impact on their lives.
But in the last three weeks of the campaign, the Conservatives brought out an issue that is fundamental to almost everyone – home ownership.
They say all politics are local, and there’s nothing more local than having a roof over your head.
Every time I see a headline talking about how home prices in Vancouver have gone up several per cent, again, year over year (while the national inflation rate and salaries barely budge), I wonder how first-time home buyers can ever dream of getting into the market. It used to be Lotto 6/49 was a dream to win. Now it’s a requirement to buy a modest Vancouver single detached dwelling. No wonder they had to amp up Lotto Max to $50 million jackpots. A million bucks these days won’t even pay off your mortgage in many markets.
Conservative leader Stephen Harper is talking about increasing home ownership rates from 69 to 72.5 per cent, an increase of 700,000 people. To accomplish this they would “expand the home buyers’ plan, establish a permanent home renovation tax credit and measures to address foreign ownership of Canadian residential real estate,” according to Global News.
That is hugely significant. But one wonders how any plan can deal with the reality of rising home prices.
My late sister Melanie got caught in this trap. She was okay with living in her rental apartment for several years after completing her degree and finding work as a nurse. But then in 2008 she got caught in a condo conversion, and had to move, now. The timing was awful, as this was in the middle of the dramatic doubling of the Saskatoon housing market. Going halfers with a cousin (who she eventually took over the mortgage from), Melanie paid roughly 2.7 times what a friend of ours paid for a similar, if not better, townhouse just seven years prior, in the same city.
She had not saved enough for a down payment. Not nearly enough. But by sheer fluke of timing, there was a narrow window when you could buy a house for no down payment and 30 years amortization. She could have got up to 40 years during this time, but chose not to. This was before the government came to its senses and realized that was sowing the seeds for a housing mortgage disaster similar to what the U.S. went through in 20082009. Those generous terms were soon scaled back.
Now Melanie wasn’t a waitress, but a full-time registered nurse at the top of her pay scale. In other words, her income was probably in the top five percentile of female workers in Canada, maybe higher, and she had no debt load. Her student loans were paid off through years of determination and hard work. Yet she found such burdensome mortgage payments weighing heavily on her.
If she, a well-paid R.N., struggled with buying a modest townhouse, then what sort of burdens do those with lesser incomes deal with now?
It was good that she could buy her own place under an expanded program. But any program the Conservatives offer, or anyone else for that matter, won’t change the fundamental fact housing in the last 10 years has become out of reach for most mere mortals in this country.
They used to say you shouldn’t buy a house worth more than twice your annual household income. If that’s the case, what do you have to do to buy, in Saskatoon, where the prices in April were for $365,750 for an average bungalow, $396,000 for a two-storey house, or $277,000 for a condo? The world isn’t full of that many doctors and lawyers. And starter homes aren’t exactly cheap, either, especially condos.
Some sort of correction in prices is going to have to take place – to the tune of maybe 30 per cent, before young people can make that bold move into home ownership. Otherwise we are going to evolve into a society of the landlords and the landless peasants, with little opportunity for upward mobility.
What’s more worrisome for me is what will happen with my kids, when they start to enter the housing market in about 1315 years? We might have to keep their bedrooms open.
