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Tim Hudak, former leader of the Ontario Progressive Conservatives and current Ontario Real Estate Association CEO, says 2018 will be a jarring year if the government doesn’t change tack.
“My main wish—and I hope it is an accurate forecast for 2018—is that government will start looking out for the middle-class for a change,” Hudak told REP. “For most of 2017, they were working against the middle-class. A recent OREA survey showed the vast majority of people define ‘middle-class’ as being able to own a home, but, almost universally, people agree homeownership is becoming more difficult with all the government rules, regulations, restrictions and taxes.”
The government’s most recent intervention was in the form of Guideline B-20, which was updated to stringently stress test mortgages. Hudak believes it was an unnecessary piece of regulation that will ultimately put home purchasers at risk.
“I suspect a number of people will go into the grey market to borrow to pay for a home, so more people will be in higher-risk, higher-cost mortgages in the unregulated sector, but I think there’s no doubt the piling on impact of new taxes, higher interest rates and tougher mortgage rules will put homeownership out of reach for even more millennials,” he said. “Secondly, it will cause young families not to upgrade their home when kids come along. There’s no doubt that in 2017 governments were working against the middle-class dream of homeownership.
“I do hope, now that we’re heading towards a provincial election this year, a municipal election this year, and a federal election in 2019, that they’ll get in the corner of Ontario’s middle-class instead of fighting them.”
In spite of criticizing the provincial government, Hudak gave it credit for the Fair Housing Plan—at least parts of it. He’s satisfied that Kathleen Wynne’s Liberal government has doubled the land transfer tax credit and committed to tackling the painstakingly slow approvals process.
“The single most damaging thing with the Fair Housing Plan was the strict rent control regime that looks more like the 1970s than 2017,” he said. “I think fewer mom and pop landlords will get into the business at all. Corporations will likely shift their investments to other states and provinces. You can’t move apartment buildings, but you can certainly move investment dollars by building new. The long-term impact will be a reduction in rental supply and deterioration of existing stock.”
Hudak called 2017 the year promises were made, and 2018 the year rubber needs to hit the road.
Article by Neil Sharma of Real Estate Professional magazine