Housing affordability continues to be a hot topic
LAST week we introduced the topic of housing affordability as a part of the annual housing forum hosted by the Manitoba Home Builders’ Association. This topic has certainly gained traction in recent weeks. The urban council of the Canadian Home Builders’ Association has identified affordability as the primary point of concern. The board of directors of the MHBA has echoed that sentiment and declared that this would be the focus of the association in the coming year. Although considerably more detail will have to be brought to the forefront, general awareness is key to any such effort. We can’t work together on a solution if we don’t acknowledge that there’s a problem. A study in Ottawa was referenced. Over the past 25 years, median family incomes have increased from $49,445 to $97,010. During the same time period, a new home in Ottawa has increased from $155,000 to $440,912. The percentage increase in Winnipeg is likely to be at least that much, if not more. It was revealed at the forum that 27.64 per cent of the price of a new home goes to the various levels of government. That means that on a $444,675 new home (land and house), $122,890 is directly attributed to charges by a government agency. These charges include provincial sales tax, GST, land transfer tax, building and development permit fees, property taxes, costs of public amenities, infrastructure costs and charges and other related fees. It is these fees that have grown at a much faster rate than costs of building materials or labour. Are we at a breaking point? No, I wouldn’t say that. However, we are at a warning point. We can’t continue to price our children out of a place to live. Otherwise, they’re never going to leave our homes. Boomers bought in times of high interest rates and are at the point of considering downsizing. Many own their homes outright after many years of hard work and disciplined payments. Interest rates continue to be extremely favourable but, if the Boomer can’t afford to move because they would take on new debt and the Millenial can’t afford to buy because the market is out of reach, we have a stalemate. Too often, the alternative is to look elsewhere and we can’t allow that to happen.
Mike Moore is president of the Manitoba Home Builders’ Association.