The housing market and mortgage industry is in an “untenable situation that needs to change,” says Red Deer-Lacombe MP Blaine Calkins.
Calkins and Calgary-Rocky Ridge MP Pat Kelly met with representatives from the mortgage, real estate and construction industries at the Red Deer & District Chamber of Commerce on Wednesday.
“Most people right now trying to buy a house in central Alberta, by the time they pay their CMHC fees, by the time they pay their lawyer fees, by the time they pay their transaction fees, are in a negative equity position,” said Calkins.
“We heard very clearly today from a wide variety of people, whether it’s real estate brokers, mortgage lenders, home builders, the policies that the government has … on financing houses and financing homes has been devastating.”
Calkins said the recession, as well as “the punitive policies we have against our energy sector, have created lots of upheaval in our economy, and one of the areas that’s manifested itself in is obviously the housing market and mortgage industry.
“It’s keeping people from moving up from a smaller home to a larger home. It’s putting another layer of a wet blanket over our economy here,” he said.
The government’s mortgage stress test is negatively impacting potential homebuyers, said Calkins, as are policies that have increased the amount the Canadian Mortgage and Housing Corp. is taking.
The stress test is designed to ensure borrowers can accommodate a sudden increase in interest rates, but it sometimes reduces the size of a home that can be mortgaged, and makes other people ineligible for a loan.
The CMHC paid a dividend of $5.65 billion to the federal government last year, Calkins added.
“That’s money that should be in first-time homebuyers’ pockets paying down principles on mortgages, not paying dividends through the back door to the government of Canada,” he said.
Brandi Pierik, a mortgage broker with Dominion Living Centres and one of the people attending the event, said she thinks “we’re in some challenging times, and I think those challenges bring some opportunity.”
She suggests there should be government programs focused on getting help to segments of the population, such as immigrant families or single women.
“We’re seeing single women enter the housing market in droves,” she said.
“It’s unprecedented that single women are purchasing real estate on their own – they’ve got money, they’ve got great credit. Whether it be divorce or that they’re choosing to delay family in pursuit of a profession, or whatever it is, they’re wanting to buy homes.
“So what if we had programs (to support) single women to buy homes?
“It’s time to start thinking about what we could do as opposed to what we no longer can do,” said Pierik.