Ahhh, election promises. Those snappy little sound bites that grab your attention and get you talking. The latest is Stephen Harper’s pledge to create 700,000 new homeowners in Canada by 2020.
Based on the latest available numbers – which are from 2011 – that would push the Canadian home ownership rate from 69% to 72.5%; a record high.
It sounds exciting: job creation, financial stability, strong communities. But how? The Harper announcement was light on details and it turns out the 700,000 figure is based on projections already in place from CMHC and the Canadian Home Builders Association. They are calling for 140,000 new homeowners per year over the next six years.
It also turns out the Harper pledge is somewhat aspirational. The Conservatives “hope” to see this kind of home ownership growth. The plan to get there includes existing programs like the increased, $10,000 contribution limit for TFSAs along with previous election promises like expanding the Home Buyer’s Plan, a permanent home renovation tax credit and (yet to be defined) measures to control foreign ownership.
But economists and market watchers agree, the two biggest factors in driving home ownership will be real wage growth and continued low interest rates.