'Affordability crisis continues to crush the dream of home ownership': OREA

·3 min read
A real estate sign that reads
A real estate sign that reads "For Sale" and "Sold Above Asking" stands in front of housing in Vaughan, a suburb in Toronto, Canada (REUTERS/Mark Blinch)

Home prices have shot up in many parts of Canada during the pandemic, but Ontario is home to the country's hottest real estate markets and that's leading to a sense of hopelessness among young first-time buyers.

A new survey from the Ontario Real Estate Association (OREA) found respondents believe governments can do something about it.

The survey, conducted by Abacus Data for OREA, found 56 per cent of respondents in Ontario are pessimistic about buying a home in the community they want to live in.

It also points to young Ontarians who have been priced out, or those trying to avoid a condition known as house poor, thinking about leaving the province.

It found 46 per cent under the age of 45 have considered or are considering moving out of the province to afford a home. Of those under the age of 29, 33 per cent are definitely (11 per cent) buying outside Ontario or very likely (22 per cent) to do so.

"The lack of housing supply is leading many to look outside the province for their first homes and that will make it difficult to retain and attract talent in Ontario in the near future," said OREA CEO Tim Hudak, in a release.

"The Government of Ontario's More Homes, More Choice Act is an excellent first step but if we want to reverse this brain drain, municipalities also need to deliver by opening up more housing opportunities."

Also See: The latest real estate news for housing prices, mortgage rates, markets, luxury properties and more at Yahoo Finance Canada.

How governments can help make housing more affordable

But the survey found the majority of respondents (68 per cent) believe governments can do more and say housing affordability should be a very high (31 per cent) or a high (36 per cent) priority for the Ontario government.

The survey also found the most substantive measure would be stopping money laundering in Ontario's real estate market (91 per cent) with a public searchable ownership registry. Tax credits and incentives for homeowners to make home improvements and improving energy efficiency were other popular ideas (90 per cent), as were increasing first-time homebuyer tax rebates (89 per cent) and redeveloping surplus commercial properties into housing (87 per cent).

"The affordability crisis continues to crush the dream of home ownership for many Ontarians and this has been intensified by the economic impact of the pandemic," said Hudak. 

"Governments need to act if we want to create future generations of homeowners and that starts with pro-growth policies that could bring affordability closer to first-time homebuyers and address the supply shortage."

In another sign of how dependent the Canadian economy has become on real estate, almost half of the respondents say residential construction will be the key to post-pandemic economic growth and job creation. 

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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