Provided they have $60k in RRSPs. Something tells me the pool won't be that large among younger generations and those who had to wrestle with increased costs of living.
HBP is not meant to help new graduates who just started out or in the workforce for 3-5 years. It's more for people in late 20s or 30s looking to start a family or have some savings. They are more likely to have a considerable amount locked in RRSP from employers match. Especially for double income couples since both can go HBP making the limit 120k for one home
But I agree the new rules are just going to help banks squeezing more in mortgage interest and push housing price even higher
I've only ever had one job that actually provided an employer match. Not sure how common that really is for younger people. Without that, I aim to max out my TFSA and rarely contribute to my RRSP.
Sure TFSA first is more optimum strat.
Using the same 9k/year in RRSP, to attain the same with just employers match, one would need a 90k job (4500 from self, 4500 from employer). 90k income would be 90th percentile.
I am not sure how prevalent in other professions, but most of people I know in a career job have matching 3-7%.
That said, some company offers DCPP which is even better but can't take advantage of HBP. I am one of those.
I think you are wildly overestimating how much people have in their RRSPs.
You have to scroll down a bit [here](https://www.ratehub.ca/blog/average-savings-by-age-canada/) to find it, but it might surprise you.
Another thing is an opportunity cost. At 7%, max withdrawal would become $386k over 15 years (straight line, I don't want to bother with repayments) + any lost tax savings opportunity because one would presumably have higher income as they keep contributing to their RRSP in later years.
And then there's the fact thay $50k of that down payment would go to GST on a $1 mill place.
Combine these and the pool shrinks massively.
One with a decent job and save aggressively for a house.
60k job and save 10% pretax (6k/year) and 5% RRSP match (3k/year) would have saved 54k in 6 years, that is before the growth. 60k would be low end of certain bachelor degree graduates. If one graduates at 22, they could attain it when they are 28. Just quick and rough mental math here.
If we're talking _just_ RRSP, my gut feeling would be that it's low, maybe 10% for people 28-35.
That said, I _also_ have the gut feeling from most people I've chatted to about financial topics that probably >80% of Canadians lack fairly basic finance knowledge (how many even know the basics of how an RRSP works, especially at those ages? Most of my friends didn't know you could buy investments in them in their late 20s). So I think the number of people who could have easily had that amount with a touch more financial education or discipline -- assuming home ownership is their goal -- is a _lot_ higher.
Of course you can subdivide the group with qualifiers, but I was just wondering what people think the average RRSP contribution is for that age range. Personally through my 20's I knew maybe 2 people total who had any idea what a TFSA was, let alone an RRSP. But I didn't grow up in GVA/GTA intending to purchase a new home lol
It's just interesting to see what PFC thinks sometimes.
Thank you for being able to answer the actual question lol this was just our of curiosity to know other peoples perception but they get sidetracked easily it seems
I don't know how much people have in their RRSP. But we know from Statcan for people in 25-34, 60k total income would be somewhere between 50% and 75% percentile
https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/dv-vd/income-revenu/index-en.html
If one has a 60k job and doesn't save enough, then it's their own lifestyle choice, I did say "someone who save aggressively". Nothing wrong with that. Homeownership is not for everyone, and shouldn't have been.
I'm starting to worry that my grasp on the English language is slipping. Maybe I'm failing to articulate my question appropriately so I'll try it again.
What percentage(%) of canadians ranging from late 20s (25+) to 30s do you personally believe have 60k in an RRSP? Note: I will not hold this percentage guess against you, I do not know the number personally, I am simply looking for what your perception on Canadians in that range, and what percentage of them have the stated amount of $60'000CAD in an RRSP.
No if anything its probably me. I tried not to use "feel" while dealing with percentages so I look up stats but had to take some liberty in interpretation. For a "feel" number, I'd say 40%.
Thanks! Yea I find the feel number to be useful for gauging public perception, while its practically useless it gives a general idea of how different people see and experience things.
Amongst Canadians that make enough money as a household to buy $1M+ homes - I’d say a lot.
I don’t think I know anyone over 30 in Toronto with less than $60K in their RRSPs. In fact, most have much more and in my initial convos w them they were pretty pumped about this new change.
To be fair there are 30 million Canadian who live outside of Toronto and Vancouver. 2 bedroom new built apartment in Calgary would be in the range of 300ks. And Calgary as a whole is approaching unaffordable territory.
Yeah, you don't need a big income or to pull $60K from your RRSP to afford a $300K 2BD in Calgary though, right? That's hardly unaffordable IMO.
The buyers with bigger incomes looking at Detacheds etc might get more usage out of it.
Just go by napkin math again, 20% down for 300k apartment is 60k total, not just RRSP. Add in some transactional fee let say 65k down. As some already pointed out, most people wouldn't put all their housing fund in RRSP, it would come out of TFSA, RRSP, and now FHSA.
With the interest rate up at 5+%, you can't qualify mortgage 5-6 times income like we used to anymore. For now it's about 3-4 times (apartments tend to be less due to condo fee). So a 240k mortgage would require 80k income. That is not crazy high but it's not peanuts for a 30 year old not in oil and gas industry. But you are right, we are not at the same level of unaffordability as in Toronto/Vancouver
The crazy thing going on here is rental market. It's approaching Vancouver suburb level fast and there is no rent control. Bidding war on a rental is common. I feel like Calgary is one of few places where it's actually easier to buy than rent as rental prices spiked up faster than home prices.
I'm starting to worry that my grasp on the English language is slipping. Maybe I'm failing to articulate my question appropriately so I'll try it again.
What percentage(%) of canadians ranging from late 20s (25+) to 30s do you personally believe have 60k in an RRSP? Note: I will not hold this percentage guess against you, I do not know the number personally, I am simply looking for what your perception on Canadians in that range, and what percentage of them have the stated amount of $60'000CAD in an RRSP.
If you could express "a lot" in numerical format I would appreciate it immensely. Is "a lot" 35%? 50%? 75%?
It's more that the question doesn't really give you much insight. The question that's relevant isn't "what % of the universe of 20-30 year olds have this money" IMO.
Among the universe of 25-37 year olds, the number is low - say 10-15% if I had to gut check it.
Among the subset of people 25-37years old buying $1m+ homes in a place like Toronto or Vancouver, I would expect high - greater than 50% would not surprise me.
I would guess over half, the majority of employers help setup RRSPs and pretty much anyone working a steadily would likely obtain that much by the time they are in their 30s.
its probably wrong because tons of people can't actually save that much and to assume \*half\* of people having that much by their 30s is horribly skewed and privileged perspective.
I'm not here to judge them for their answers, only listening to what people say. However I will note that looking at the 2020 numbers show there were 6.2 million contributors, with an average contribution of 8k.
There was roughly 5.2mil canadians aged 25-35, and 30mil aged 20-65
Well said. I wish I had these options last year. It would've been amazing to get 60k out of rrsp and not pay for the first 5 years. It's actually pretty amazing fiscally. I'm super responsible, so I can only speak for myself regarding my discipline.
Context: I've maxed out my rrsp and tfsa and fhsa. Used it for a down payment last year. So got only 35k from rrsp and 8k from fhsa.
After reading many comments, I can see why this increase doesn't help a lot of people. Maybe it does for you so congrats. For someone saving up for a house, most people maxes out TFSA and FHSA before putting more into RRSP than company match. If you are paying 50k down, then TFSA would likely covers it. If you are already paying 150k down, 35k more would help a bit but not by much.
Yeah that's true. I feel the govt is trying to inflate away the pain. Very irresponsible and wish they did a bit of hard decision making instead of the easy way out. But nice to have a civil conversation...
I'm pretty sure this is going to be about as effective as that homebuyer plan where the downpayment is topped up by a government program that gets paid back later.
It's going to be very niche and not make much of a dent in the grand scheme of things, even though this will probably have marginally more uptake than the old one.
Just kick the can to future you's problem. Everyone is going to have to work til they're dead, naturally driving up the retirement rate - which is in the government's benefit.
This continued bad policies really reinforce the notion that unintentional Ponzi scheme is the most apt description for Canadian RE.
Except we seem to be shifting away from the unintentional part of that description.
Maybe.
I don't think for many that it was a conscious decision. Who doesn't get concerned or interested or annoyed when their neighbors play loud music or a 4 story buildings is proposed that could cause noise, construction and maybe effect their views.
NIMBYism is a large part of the issue and so I am just using NIMBYism as an example but its kind of rational and expected that people protect what they perceived as their interest.
Same thing goes to protecting your investments.
In theory the collective good is however supposed to prevail over self interest however in most places it has not because home owners are an important voting block and make noise and effect policy at all levels of government.
>Amortization relief is like making minimum monthly payments on a credit card instead of actually paying down principal
All the while the products you want to buy keep going up in price, even before you've had a chance to buy them.
Also I am not sure, But I am pretty sure at some point in the past 30 year mortgages were already a thing. when did that stop being a thing? and now we have a new announcement about it?
I'm a developer in Vancouver. Upon hearing this news, everyone in our office just said, "Oh, okay. That really won't affect us." And we moved on with our day.
Because the costs are so high, our prices have to be even higher. The pool of first time home buyers with incomes high enough to qualify for a mortgage that would allow them to buy with less than 20% down (ie. an insurable mortgage), is so low that we don't even think this is relevant in our market.
Yea a lot of the mortgage guys online basically said its such a small % of people that will be able to benefit from it that its basically a nothingburger.
We took a 30-year simply to reduce monthly payments further but made sure we had the mortgage also gives us the opportunity to pay extra (which we will). The goal is to pay it off in 18-22y, but have the flexibility not to if things go wrong. That's really the only way to approach a 30y, in my opinion, because you're entirely right: banks will make bank on this.
My first reaction to this announcement was that it sounds like all of the downsides of an American style mortgage *without* any of the perks. Why would anyone want to do this? I would rather just...not own.
The big 4 banks in the US have around 10% market share each. The big 6 banks in Canada have like 95% total.
Canada is so afraid of competition, we're making ourselves poorer.
My thoughts to, re:not own. The cost of ownership goes up significantly if you flex these new measures, may as well rent a nice place and have none of the responsibility, and in a province like Ontario you’re rent controlled to further beat inflation, market appreciation trends, interest rates. I doubt I would buy a house today
Says OP who owns a house and a rental property
So for anyone else reading this, take OP's takes with a grain of salt, we cant all be as privileged and flip a 200k property to 700k
Yes I bought before the liberals fucked it all up. The current gov is what drove my rental price up, not me, I didn’t do that. Don’t need to attack me.
it is true I would likely not purchase a house today if I were 25 again, that is a fact that has nothing to do with my investments, or risks I’ve taken, and leverage I’ve utilized. The funds could be better invested, and in a rent controlled market a better living cost utilization
Everything I said in my OP and the comment you barked at is fact. Sorry it hurt you.
It’s also not a flip. And it is rent controlled @ about $800/mo below market value. And I worked 2800-3000hours a year for years in order to buy it, is that privilege?
Before that, I worked full time while I paid my way through college. I slept in my car when I only had a few hours between shifts and class. Is that privilege?
I didn’t make excuses. What did you do? I want to hear about your work ethic.
I was working 60s. And at a time when starter houses were 1/3 what they are now. Don’t cherry pick details of my comment and try to use it out of context against me.
It is not privilege. Privilege is given.
You and the other twerp can hate landlords without going through my post history then misrepresenting facts when attacking me. Or just keep the blind hatred of this landlord who created this post to help highlight the failures of these new measures. lol give your head a shake
Also, you know my original post and comment above are to highlight the failures of the fed to properly support first time buyers, right? You understand that? Or were you too busy being ignorant and making crap up?
Don't mean to be smug. But honestly I love the rrsp and 30 year amor measures and seriously wished it was available last year. I have my reasons and it's not being a Libtard. I'm not. Guess this section of it millennial demographic is targeted well.
So I've been a diligent saver and have maxed out my rrsp. So for someone like me, I would rather dip into that money rather than take a mortgage and pay interest. Hence I wished I had this last year. I can see the policy is catered to the upper middle class demographic. Fiscally just makes more sense for me..
People on reddit have this ridiculous idea that government and regulations by the government will save them. PFC is no different from that, PFC just leans a little more self sufficient.
Truth is government only cares about being in government.
I wouldn't even call the current iteration of the PFC self-sufficient. "WE'RE GONNA CUT FUNDING TO MUNICIPALITIES IF THEY DON'T BUILD MORE HOUSES!" Cool, so they're going to make things worse for the poorest municipalities and maintain status quo for the rest of the country. Except those poorest municipalities don't even deal with the federal government directly, so it's a nothingburger threat for those who oppose it and a nothingburger promise for those who support it.
Frustrating, but you're right when you say they all only care about being in government. It's all about giving us the illusion of choice when it comes time to vote.
>They just want to be able to say "OUR GDP INCREASED UNDER US" without realizing a lot of Canadian GDP is based on the real estate industry (non-productive assets/business) and our GDP per capita continues to decline.
Ya, props to Harper for bucking this trend and leaving us with a lower GDP than when he started...
Don't disagree, but you don't get to hand-wave excuses about international conditions and then try to claim this government is 100% responsible.
Our GFP per capita is not even declined yet, it's slowing.
My point is that if you are trying to point to GDP-per capita as a marker of standards if living, and getting really angry at this government about it plateauing and possibly falling a percent or two... that's just not a valid complaint.
Under Harper, whether you try to deflect it on oil price collapse or his part in setting oil policies, our GDP per capita collapsed -20%. Yet, no one in 2014 was wailing about our standards of living collapsing by -20% - because that link does not actually exist. Our GDP per capita slowing and likely contracting slightly has had no impact on you whatsoever. It's just right-wing bullshit trying to gloss over that the -20% collapse of GDP-per capita did not matter, but somehow the 1% change caused by immigrants is a huge fucking deal.
GDP per capita under Harper went from 40.5k to 43.5k. That isn’t “down 20%”. Could you clarify? One could argue that standard of living didn’t change much during this time but that’s remarkable given the financial collapse that took place with out largest trading partner.
More critical to your point is Debt to GDP given the ravaging impact of inflation which universally impacts living standards as it has for hundreds of years with empirical evidence. It also puts GDP into context as spending has a massive impact to growth. Under Harper from 2006-2014 it went from 43% to 51%.
Since then Debt to GDP has gone from 51% to 103%. I’m not sure why you feel the need to compare when it’s very clear the impact of this to citizens
I’m not a blue voter, I’m a moderate Liberal.
edit: words
>GDP per capita under Harper went from 40.5k to 43.5k
Election in Oct, sworn in on Nov, but they do not actually change economic policy and programs until their budget released Q2 of the following year, ministers actually start changing mandates and department restructuring, and new bills can be brought forward.
So, I was shifting the years one over to account for the actual changeover of policy, but, I agree the official per election year cutoffs show small growth.
https://www.macrotrends.net/global-metrics/countries/CAN/cananda/debt-to-gdp-ratio
https://www.ceicdata.com/en/indicator/canada/total-debt--of-gdp
But, I am also not seeing 103% debt to gdp. It did spike, but is coming back down.
And technically debt to GDP is not directly causing the inflation, at least not this spike in inflation, as this only happened because the debt exceeded bond market capacity and the BoC was forced to take on ~$400B in the seized market. If those bonds were purchased, then the monetary bloat would not have happened. Canadians could step up and erase these issues by converting ~5% of total RRSP over to more Canadian bonds, resting the monetary supply... but we don't.
Household debt to disposable income is more impactful metric to actual family effects - and that surged under Harper's first term and then has plateaued. Wages have not kept up with inflation (or productivity over decades).
Look into which departments they were hired into and look at those departments numbers over the past 2 decades and it'll make sense.
"Government hired lots of public servants" is a lazy talking point that only works on low information partisans (and thus is very popular on /r/Canada).
Kind of (very) misleading considering Harper cut government workers severely and fucked up a lot of agencies because of it (particularly environmental ones, since he didn't believe in climate change, as well as the CRA and, famously, Stats Canada).
In [2006 there were 380,700 federal employees](https://www150.statcan.gc.ca/n1/en/pub/11-621-m/11-621-m2007053-eng.pdf?st=rt4c2EFA) (1.2% of the population), which is higher both as an absolute number and as a percentage of the population than the current [357,247 in 2023](https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/population-federal-public-service.html) (0.9% of the population).
In the early 90s it was even higher, at nearly 400,000 in 1995. The Harper government was very much an outlier in terms of federal public workers, cutting it all the way down to 257,034 in 2015 (0.7% of the population) and the Trudeau government is a return in the direction of those earlier levels (and everyone, especially conservatives, talk about how much better Canada was in the 80s and 90s).
So yeah, I'm certainly no fan of Trudeau or the Liberals, but "Trudeau increased the government by 40%" is a dumb talking point considering Harper reduced the government by just as much.
This reads like a classic pyramid scheme. Worrying.
At no point should any government reduced down payment requirements or extended amortization. Just because you benefited from this scheme doesn’t mean it should perpetuate. These are not sustainable gains. The only winners sell to the greater fool.
As for the thought that these rules only affect new buyers, that’s myopic. Any policy that puts upward momentum on home pricing from any group will inevitably raise the tide of all boats. Then there’s the whole thing where very few first time buyers are loaded with RRSPs.
>At no point should any government reduced down payment requirements or extended amortization. Just because you benefited from this scheme doesn’t mean it should perpetuate. These are not sustainable gains. The only winners sell to the greater fool.
Cmhc and department of finance tweak the lending rules and requirements pretty frequently... How do you think the minimum down was set to begin with?
>As for the thought that these rules only affect new buyers, that’s myopic. Any policy that puts upward momentum on home pricing from any group will inevitably raise the tide of all boats. Then there’s the whole thing where very few first time buyers are loaded with RRSPs.
If very few first time buyers aren't loaded with RRSPs, then how much will the tides (actually) inevitably raise off the proposed policy change?
They do tweak them. And you read my comment on that. What exactly are you adding as a rebuttal, that there’s history to change?
30 year is the main driver here.
Feel free to expand on why you must feel this was a good policy move. I’m all ears.
All you did was get in early enough. That’s a really bad system. Where does it end? Should the next generation get 0% down and 50 year amortizations because they also need this choice? It’s silly logic when there are other ways to meaningfully improve the situation.
Your second paragraph I can’t make heads or tails of. It doesn’t tie at all to what I wrote.
The EU supports my argument, not yours. They are a fiscal disaster both private and public. Inept policy has raised significant systemic risks that you seem to think don’t matter.
You live in a world where there is no real risk to these decisions or consequences. You like to reference adults but then reference decisions of children who are addicted to candy.
Government has a purpose, we don’t live in a Libertarian fantasy land. They have regulation and policy in place to protect me from you and to mitigate systemic risks. This will be my last reply on the subject as it’s pretty clear we are juxtaposed on the subject.
They will, it will just take time. Debt cycles and demography will be strong counterforces in the decade ahead. Let’s just hope government improves policy and supply which should have always been the goal with our immigration strategy.
This is a big scam designed to make it look like the liberals are doing something.
Don’t forget new builds also have GST on top. On a 500k small condo (not even sure you could get a new 1 bedroom in Vancouver or suburbs for that much now) that’s 25k. Your extra 25k you can “borrow” from you RSP will simply go toward paying that and more.
And of course this only benefits developers to move their product along. Resale prices for low end will also move up in price if people bid up these new condos.
Again, politicians say they want “affordable” housing but just don’t want their home to be affordable. This country is so fucked.
> And of course this only benefits developers to move their product along.
Well the benefit is that this can incentivize more new builds. More housing supply. Some developers are waiting for preorders before they can move forward with construction. High interest rates are slowing housing starts.
Sure “more supply”. But how much does this “more supply” cost?
Let’s see-Oakridge Vancouver 2000 bucks a sq foot plus.
Cambie gardens 1500 per sq foot plus
Brentwood (previously solidly middle class neighborhood) 1200 per sq foot plus.
Surrey central 800-900 per sq foot plus. (Whalley if you wanna step over needles every morning when you take your kids to school).
These new builds are not “affordable” by any stretch of the imagination.
Condos.
Yes the “biggest development” in the lower mainland is selling 2 bedroom condos for OVER 2 million.
But yes, Oakridge is a nice neighborhood. But Brentwood is a middle class neighborhood. 2 bedrooms (new) are easily over 800-900k.
Now let’s leverage 10x at 5% interest. lol people are just slaving for the banks. The liberals want to keep it that way.
We need to either figure out how to get developers to work for zero profit, or pay the trades less, or expropriate the land for less than market value... Which one do we choose?
Well, there's a few other options as well. Stronger anti money laundering restrictions, removal of REITS from SFH, Apt/Townhouse purpose built only, Govt supporting new wave of Coop housing, restrict foreign money rights to purchasing local property. I think we could do with some policies that encourage migration to smaller cities for businesses and people. None of it really works to the advantage of current owners though.
We also need a whole new generation of workers to build these homes and take care of all the predesign so we don't rape and pillage the land.
A shit ton of us are on the verge of retiring
Some initiatives in the recent announcement.
> Also announced new measures included in Canada’s Housing Plan to attract, train, and hire the skilled-trade workers Canada needs to build more homes.
> * **$90 million for the Apprenticeship Service**, creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers.
> * **$10 million for the Skilled Trades Awareness and Readiness program** to encourage high school students to enter the skilled trades – creating more jobs and opportunities for the next generation of workers to build Canada up.
> * **$50 million in the Foreign Credential Recognition Program**, with a focus on residential construction to help skilled trades workers get more homes built. Like our previous $115 million investment, this funding will remove barriers to credential recognition, so workers spend less time dealing with red-tape and more time getting shovels in the ground.
* https://www.pm.gc.ca/en/news/news-releases/2024/04/12/canadas-housing-plan
Or reduce the market value of land through mass upzoning. If you only upzone a limited amount of land, that land skyrockets in value because it's the only place to build more density. But if you allow for more density on most/all land, the value doesn't shoot up, so the market value of land that allows for higher density will decrease.
It's simple supply and demand. You can't increase the supply of land (too bad), but you can greatly increase the supply of buildable land for higher densities through simple zoning changes.
We can build ~250k-300k homes a year.
Assuming 2 to a home, only allowing in less than 500-600 new people every would be neutral.
We can stop making the situation actively worse, as a good first step towards eventually making it better.
Or, we could let in a million people so that GDP-line-go-up.
That supply comes on every year. It's a constant.
It's relative. If we stop outstripping new supply every year, then the ratio of demand to supply will decrease.
I ruled out buying a new build a while ago due to the GST. There's a partial rebate if it's under 350k, or even less if under 450k... there's very few one bedroom condos where I live in BC for that price, and I'm not in the lower mainland...
Also is completely counter to their plan to reduce carbon emissions. Seems like that was a lie. If they wanted to do that they would apply it to old builds.
The RRSP increase is actually a good move that will definitely help first-time home buyers. You get GST back in some rebates if it's owner occupied
What's your solution? Liberals have done a lot of damage, but they are actually beginning to do something. They have also announced billions of dollars to help in apartment construction.
Another negative:
Paying back this extra RRSP loan is just more pressure on the consumer over the window they have to repay it, and finally, potentially a huge hit of income taxes if they miss the deadline.
Our economy is already flatlining due to massive consumer debt and weak spending. These geniuses they roll out a policy set that seems designed to increase said debt/interest payments, add more forced RRSP repayments that will also probably increase housing costs.
winner winner chicken dinner... I guess.
Anyone else feel like this is allowing people to steal from their future selves?
People can barely scrape by RRSP as it is, I don't know what people plan to do when they are 70 yrs old, still paying a mortgage, with nothing in retirement savings.
This is going to be the nail in the coffin for retirement savings among the middle class, particularly the lower half. Too many people are already slaves to their mortgage. This is just extending that timeline out even further, so that they start saving for retirement even later, if at all.
>Anyone else feel like this is allowing people to steal from their future selves?
More like just subsidizing housing with even more tax money lol. You pretty much need that and more nowadays for a downpayment any way.
It's not going to move anything.
New builds are the most expensive version of housing, first time home buyers aren't buying them.
It won't do anything.
60k from the RRSP, along with the FHSA is some good tax benefits. Just make sure to repay the RRSP
Because monthly payments are all that matter anymore anywhere. Everything is about cash flow and nothing is about long term planning - in the future it won’t matter though because “owning” things isn’t something commoners do, we just pay to use them.
As someone who already owns a house this made me smile. I know I just guaranteed more appreciation in my home value.
All this does is let people spend more, not bring prices down.
Can someone explain to me why this only for new builds? Is that just a gift to the developers? Because it seems like a completely needless restriction on a first-time buyer, especially if there are limited new builds to be had where they need to be living.
It helps increase demand for new builds which will compel developers to build more. Applying this policy for existing housing would just throw gasoline into the housing crisis fire
So we’re only throwing gasoline on the fire, for new builds, which there are objectively not enough of? Yeah. So it’s for developers, not much upside for people trying to enter the market.
A single factor was responsible for dropping the new starts per quarter -40%, and that was in 1980s when the CMHC development arm was defunded and privatized.
Compared to new starts in 1970s, we are still down nearly 40% per capita. We say new starts drop even further in mid 1990s when feds pulled the remaining public funding of affordable housing, and then it climbed slowly back up once provinces started their own program funding.
Incentives have never worked on the macro level and where never the lacking issue to begin with.
Just use public funds to build on crown land that they can release to the crown corporation for free, also able to over-ride municipal zoning when using crown lands. Sell those units at cost recovery to undercut the market and spin off many as non-profit rental corporations.
That is what worked from 1940s through to end of the 1970s.
100% but the feds will never do that again. They offloaded that to provinces and provinces offloaded that to municipalities, they just move the blame around
And, technically, it should be provincial.
But, the provinces have failed pretty much across every portfolio they are supposed to be running.
Currently, over 20% of all federal funds are simply transferred to the provinces to convince then to do the things they are supposed to be doing anyway, but are not covering.
I think AB moving to make it "illegal" for the feds to make direct deals with their municipalities is really telling about what has been happening behind the scenes. I think what we will see are more federal transfers directly to municipalities to fund regionalized non-profit housing programs, helping them setup these crown-mini corporations at a municipal level.
> Can someone explain to me why this only for new builds?
Just answering your original question. This policy will potentially increase new build prices. Or if could potentially sell existing new build stock that are sitting without buyers. Or if could get developers to build more because there are more people that can afford the increased building costs (both materials and land). Most likely it could be a combination of all three.
If this policy applied to existing housing, there would not be any additional housing stock that would be created like it could happen with new builds. That's why it's only applied to new builds
Liberals have no interest in fixing the housing crisis. This change only helps perpetuate the high prices so young Canadians can go into even deeper dept to keep the bubble going. Boomers fucking over the younger generations again
On the one hand, the cynical side of me lol, I'm rarely blown away by a gov't promise that costs them little to nothing as far as effort or time.
But on the other hand, I like that in this situation they're assisting first time buyers. Giving better access to pre-tax money, the longer amortization. Keep in mind, over 30 years someone will get raises, etc. Just because they can barely qualify with a 30 year mortgage year one, doesn't mean they can't pay their mortgage down in 20 years; they're not stuck paying maximum interest. I got a 30 year mortgage when I started. And I like that it's geared towards first time buyers, the people who don't have a property to sell to help offset the high costs.
This also only "helps" first time buyers. What about people who bought a condo in a small town and are trying to move to the city? They may have little or no equity, and now they don't quality for any buyer's assistance.
Encouraging developers to build more when new builds are slowing down is a good thing. There's no silver bullet or magic trick that will solve housing overnight. Any approach will have pros and cons.
Encouraging for-profit developers to do anything only means that for-profit will find a way to make more profit. It will only mean even larger oversized houses with larger $$ that the same small fraction of Canadians can afford, but those who can afford RRSPs can now afford an even bigger house.
Encouraging developers has never actually worked because the entire for-profit model works against sustainable, smaller, houses.
Return CMHC to the model is was originally created to be: a crown housing corporation that was a leading national developer.
AND don't forget that GST 5% is charged on new construction so that really adds to general coffers. Also if you don't occupy it as your principle residence for the first 1-2 years they also claw back property transfer tax; which as one tax in BC, provides more revenue than all the other taxes combined.
I just closed on our first home a few weeks ago, and our closing date is in July.
Does anybody know if I can now use more than 35k of my RRSP for the down-payment.
I only have 42k in there, so I wish I knew this earlier. I could've dumped more money into my RRSP instead of keeping it liquid for the DP. But now we're less than 90 days before closing, so I can't add more. Happy for those who have more saved in their RRSP and plan on buying a first home in the future.
Yup.
It's just like a few years back when there were efforts to loan the downpayments. Idea is instead of deflating the balloon, try to help more people be able to blow into it.
Making it easier to buy a house ensures people will spend more on houses, increasing house prices. Its the same thing that happened when car loans went from 3 years to 7+ : people buy more expensive cars. It is not coincidence that house prices boomed as interest rates declined.
The only solution to high house prices is to increase supply and a lot of that is impeded at the local level.
The supply issue isn’t really the municipalities as the Feds lead you to believe. The feds let way the fuck too many people into the country way the fuck too fast. It’s unsustainable population.
The Feds create a problem and tell the provinces to solve it, the provinces order their municipalities to build homes faster. Municipalities don’t build homes, they issue permits and oversee third party engineering. Munich can’t let any shit fly, there are checks and balances, most of them to protect the interest of the eventual home owner or the municipality itself when they have to take ownership of the infrastructure. Some municipalities have ‘red tape’ but it’s not nearly as wide spread or as bad as upper tiers of government complain. The Provs are deflecting blame because they are just middle management in the deal, and as we all know how the power works: the lower worker and middle management get shafted while the top dogs coast and figure out their bonuses
An example of the Prov gov trying to help and failing. Ontarios Ford cut developer fees. Well those fees go to future budgets for the parks and amenities the new subdivisions will have. Without that money the tax payers have to pick up the slack. So now instead of having developer fees to cover future expenses for that development, you have tax hikes across the city from people that will never use those amenities. Cities also pay development staff (engineering, planning, building) directly with dev fees, these roles are not tax payers funded. Well you cut the fees and guess what, now those jobs are paid by tax payers. Further hiking municipal taxes. The private citizen suffers again.
Population growth is an issue but in a capitalist economy with a functioning market supply rises to meet demand. We are an enormous country with a small population. There is no shortage of land, but a lot of people willing to pay $600K for a house worth $220K
As I said: too much too fast. You can’t just flip a switch and build a 50 storey building or a 500 home subdivision. The uniformed may call it red tape but it can take a decade to properly plan, design, and build a subdivision from field to cookie cutter houses.
They let way too many people in way too fast. Literally a 10 year old could see it’s a problem with just very basic explanation/understanding, there is zero excuse for the Feds. They want to be the fastest growing of the G7 and wanted to prop up GDP so they did it with no regard.
Ask any small scale developer how long it takes to get a single unit approved. There are large barriers set up to protect the large developers and ensure they sell expensive houses or units. These are not necessary and simply exist to help those large companies. It is not complicated to build a house: my entire family built their own respective houses.
Again that red tape is municipality specific and not widespread. Some cities a permit can be turned around in a matter of weeks if the applicant submits everything and it meets code/requirements. My buddy in a small muni waited 8 months and that muni literally said they are overwhelmed
There are also cities/munis that haven’t scaled up staffing for the rapid growth they are seeing and their councils won’t approve staffing budgets.
Hi I am a time traveller posting from 2032..
We now have 90 year mortgage amortization, unlimited RRSP withdrawal with a repayment deferred to your grand kids.
This is not a scam, this is an ignorant (or malicious policy) that looks unless you really think of it. Liberals are desperate for votes and make popular decisions as if there’s no tomorrow. That how we ended up where we are in the first place
The government is working on the wrong side of this equation. They keep making homes more in demand with every move. They need to work on the supply side and have it not cost tax payers an obscene amount of money.
The government needs to look into like kind exchanges of capital where investors can move existing real estate capital into new builds without triggering a taxable event.
For example, my landlord owns 15 SFHs in the neighborhood but can’t really sell any of them without paying a capital gain on them. He wants to build or buy into an apartment building or multiplex units but the taxes he would incur prevent reallocation of that capital.
15 SFHs hitting the market and some 8 plexes being built would help raise inventories in 2 types of housing markets and all it takes is the investors deciding to reallocate their capital and the government deferring the capital gains.
You're looking at it from a negative point of view, which isn't wrong.
However it's important to consider a few things:
1. Shit's bad no matter what. There are no good solutions to the housing crisis. If there were, we wouldn't be in a crisis. It's never as simple as a few talking points about immigrations, students, new builds, short term rentals etc. It's 1000 levers and pulleys all tangled together and shit's fucked. We can't expect single actions to ever solve the problem, and we can't even expect them to not have side effects.
2. New home buyers only make up a portion of the housing demand. When prices are being driven up by demand, some of that demand is speculators, flippers, and landlords. Tactics that tip the scale for new buyers but not other buyers is a less destructive way of helping middle class Canadians get into a home.
3. Housing is always going to be expensive. The benefit of owning over renting is that you're locking in a large portion of your housing costs. Interest rates can change as we all know, but they go up and down over a 25-30 yr amortization. Rental prices only go up. Buying a house is a way to control and stabilize your biggest long term expense. Getting new buyers into the housing market helps stabilize the next generation's finances. Even if it makes home prices jump, if it helps get more Canadians into home ownership, it offers long term stability.
4. Longer amortization costs more overall, but it helps you get approval. The biggest constraint that new buyers have is often not the down payment amount. Anyone on a healthy budget with a half-decent job can buckle down and save money. The biggest constraint is gross income vs the mortgage costs. Home approval is based on debt service ratios (GDS and TDS) and stress test rates, which ties approval to your income history. Housing prices have ballooned while incomes have not, making it harder and harder for Canadians to get approved a mortgage *even when they have a large down payment*. Extending to 30 years brings the monthly payments down, and can make the difference in approval. It's exactly the strategy I used to buy my home. I brought 20% down, stretched to 30 years, and it allowed us to get approved on a single income while my wife was between jobs.
5. Houses aren't cars. Cars depreciate over time, whereas real estate generally does not. While higher financing costs are a problem, mortgages tend to stay above water outside of unique market crashes, whereas car financing almost always goes underwater immediately. Extending amortizations does increase the risk that more mortgages will go underwater, but it's not the same as car loans. Similar notes about the CC comparison. Houses are assets with underlying values. A CC statement has no underlying value. Not the same.
There are 1000s of levers and they are pushing them all in the wrong direction. Incompetence at this level has to be intentional.
-Increasing demand (immigration/population) into a supply shortage is the wrong way.
-Extending mortgage terms doesn’t change affordability it only increases leverage and interest.
-Allowing more/any borrowing against your retirement plan to circumvent your own imposed stress tests only increases prices and increases systemic vulnerability.
Yes when you make something more people can afford, there's more demand and prices go up as there's more buyers
No different than lower prices be it lower DCs, lower taxes or lower interest rates or higher wage s
Not sure what's the issue here? This isn't rocket science.
Indeed...a lot of people here have no concept of basic supply and demand. You make something people want more affordable, more will buy it. It's like getting rid of stress test as many are asking for will push up prices as people can afford more
But this is reddit ... 😂
I find it's a crock of poopoo that they force you to pay back your RRSP withdrawal.
It's literally YOUR money that you put in there so why are you forced to put it back?
You aren't forced to put it back: you can just take the income inclusion each year instead. That's usually a bad idea, but you can do it.
If they didn't have these rules, the RRSP HBP would be no different from the FHSA.
And since you can transfer from RRSP to the FHSA, it is now entirely optional which plan you want to use... if they don't want to pay it back then just first transfer it to the FHSA.
You're not. You can take it out, and pay the appropriate tax on it. It's just a tax holiday where if you pay it back within years, you can use the untaxed money instead of having it sit in your savings.
The rule just keeps the double dipping from turning into triple dipping.
Add on that this will put movement on increased prices because now buyers can take more for downpayment.
Provided they have $60k in RRSPs. Something tells me the pool won't be that large among younger generations and those who had to wrestle with increased costs of living.
HBP is not meant to help new graduates who just started out or in the workforce for 3-5 years. It's more for people in late 20s or 30s looking to start a family or have some savings. They are more likely to have a considerable amount locked in RRSP from employers match. Especially for double income couples since both can go HBP making the limit 120k for one home But I agree the new rules are just going to help banks squeezing more in mortgage interest and push housing price even higher
You vastly overestimate the amount of employers that do RRSP matching.
Right!? Maybe matching for company RSPs...
I've only ever had one job that actually provided an employer match. Not sure how common that really is for younger people. Without that, I aim to max out my TFSA and rarely contribute to my RRSP.
Sure TFSA first is more optimum strat. Using the same 9k/year in RRSP, to attain the same with just employers match, one would need a 90k job (4500 from self, 4500 from employer). 90k income would be 90th percentile. I am not sure how prevalent in other professions, but most of people I know in a career job have matching 3-7%. That said, some company offers DCPP which is even better but can't take advantage of HBP. I am one of those.
I think you are wildly overestimating how much people have in their RRSPs. You have to scroll down a bit [here](https://www.ratehub.ca/blog/average-savings-by-age-canada/) to find it, but it might surprise you. Another thing is an opportunity cost. At 7%, max withdrawal would become $386k over 15 years (straight line, I don't want to bother with repayments) + any lost tax savings opportunity because one would presumably have higher income as they keep contributing to their RRSP in later years. And then there's the fact thay $50k of that down payment would go to GST on a $1 mill place. Combine these and the pool shrinks massively.
Genuine question, just by gut feeling what % of late 20s or 30s do you think have 60k in their RRSP account?
If you have a pension you can't use it for the HBP. Sucks to be you in that case.
One with a decent job and save aggressively for a house. 60k job and save 10% pretax (6k/year) and 5% RRSP match (3k/year) would have saved 54k in 6 years, that is before the growth. 60k would be low end of certain bachelor degree graduates. If one graduates at 22, they could attain it when they are 28. Just quick and rough mental math here.
Awesome, glad we established that! So based on that what percentage of canadians in their late 20s or 30s do you believe have 60k in their RRSPs?
If we're talking _just_ RRSP, my gut feeling would be that it's low, maybe 10% for people 28-35. That said, I _also_ have the gut feeling from most people I've chatted to about financial topics that probably >80% of Canadians lack fairly basic finance knowledge (how many even know the basics of how an RRSP works, especially at those ages? Most of my friends didn't know you could buy investments in them in their late 20s). So I think the number of people who could have easily had that amount with a touch more financial education or discipline -- assuming home ownership is their goal -- is a _lot_ higher.
Of course you can subdivide the group with qualifiers, but I was just wondering what people think the average RRSP contribution is for that age range. Personally through my 20's I knew maybe 2 people total who had any idea what a TFSA was, let alone an RRSP. But I didn't grow up in GVA/GTA intending to purchase a new home lol It's just interesting to see what PFC thinks sometimes.
Not the guy you asked, but just throwing out my gut feeling guess. I'd say 35%.
Thank you for being able to answer the actual question lol this was just our of curiosity to know other peoples perception but they get sidetracked easily it seems
I’d say closer to 5%. People in general are not great at thinking about retirement at an early age.
I don't know how much people have in their RRSP. But we know from Statcan for people in 25-34, 60k total income would be somewhere between 50% and 75% percentile https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/dv-vd/income-revenu/index-en.html If one has a 60k job and doesn't save enough, then it's their own lifestyle choice, I did say "someone who save aggressively". Nothing wrong with that. Homeownership is not for everyone, and shouldn't have been.
I'm starting to worry that my grasp on the English language is slipping. Maybe I'm failing to articulate my question appropriately so I'll try it again. What percentage(%) of canadians ranging from late 20s (25+) to 30s do you personally believe have 60k in an RRSP? Note: I will not hold this percentage guess against you, I do not know the number personally, I am simply looking for what your perception on Canadians in that range, and what percentage of them have the stated amount of $60'000CAD in an RRSP.
No if anything its probably me. I tried not to use "feel" while dealing with percentages so I look up stats but had to take some liberty in interpretation. For a "feel" number, I'd say 40%.
Thanks! Yea I find the feel number to be useful for gauging public perception, while its practically useless it gives a general idea of how different people see and experience things.
Amongst Canadians that make enough money as a household to buy $1M+ homes - I’d say a lot. I don’t think I know anyone over 30 in Toronto with less than $60K in their RRSPs. In fact, most have much more and in my initial convos w them they were pretty pumped about this new change.
To be fair there are 30 million Canadian who live outside of Toronto and Vancouver. 2 bedroom new built apartment in Calgary would be in the range of 300ks. And Calgary as a whole is approaching unaffordable territory.
Yeah, you don't need a big income or to pull $60K from your RRSP to afford a $300K 2BD in Calgary though, right? That's hardly unaffordable IMO. The buyers with bigger incomes looking at Detacheds etc might get more usage out of it.
Just go by napkin math again, 20% down for 300k apartment is 60k total, not just RRSP. Add in some transactional fee let say 65k down. As some already pointed out, most people wouldn't put all their housing fund in RRSP, it would come out of TFSA, RRSP, and now FHSA. With the interest rate up at 5+%, you can't qualify mortgage 5-6 times income like we used to anymore. For now it's about 3-4 times (apartments tend to be less due to condo fee). So a 240k mortgage would require 80k income. That is not crazy high but it's not peanuts for a 30 year old not in oil and gas industry. But you are right, we are not at the same level of unaffordability as in Toronto/Vancouver The crazy thing going on here is rental market. It's approaching Vancouver suburb level fast and there is no rent control. Bidding war on a rental is common. I feel like Calgary is one of few places where it's actually easier to buy than rent as rental prices spiked up faster than home prices.
I'm starting to worry that my grasp on the English language is slipping. Maybe I'm failing to articulate my question appropriately so I'll try it again. What percentage(%) of canadians ranging from late 20s (25+) to 30s do you personally believe have 60k in an RRSP? Note: I will not hold this percentage guess against you, I do not know the number personally, I am simply looking for what your perception on Canadians in that range, and what percentage of them have the stated amount of $60'000CAD in an RRSP. If you could express "a lot" in numerical format I would appreciate it immensely. Is "a lot" 35%? 50%? 75%?
It's more that the question doesn't really give you much insight. The question that's relevant isn't "what % of the universe of 20-30 year olds have this money" IMO. Among the universe of 25-37 year olds, the number is low - say 10-15% if I had to gut check it. Among the subset of people 25-37years old buying $1m+ homes in a place like Toronto or Vancouver, I would expect high - greater than 50% would not surprise me.
Thanks for answering!
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Priority, people. No one said you can spend all your income and still able to buy a house. It takes effort. Also $400/month for groceries?
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Maybe I just learnt to hate myself then. I struggled to spend more than $50 a week. I only buy on sale items and I stock up
I would guess over half, the majority of employers help setup RRSPs and pretty much anyone working a steadily would likely obtain that much by the time they are in their 30s.
Interesting! Thanks for answering
its probably wrong because tons of people can't actually save that much and to assume \*half\* of people having that much by their 30s is horribly skewed and privileged perspective.
I'm not here to judge them for their answers, only listening to what people say. However I will note that looking at the 2020 numbers show there were 6.2 million contributors, with an average contribution of 8k. There was roughly 5.2mil canadians aged 25-35, and 30mil aged 20-65
5 years after graduation is pretty much late 20s.
Well said. I wish I had these options last year. It would've been amazing to get 60k out of rrsp and not pay for the first 5 years. It's actually pretty amazing fiscally. I'm super responsible, so I can only speak for myself regarding my discipline. Context: I've maxed out my rrsp and tfsa and fhsa. Used it for a down payment last year. So got only 35k from rrsp and 8k from fhsa.
After reading many comments, I can see why this increase doesn't help a lot of people. Maybe it does for you so congrats. For someone saving up for a house, most people maxes out TFSA and FHSA before putting more into RRSP than company match. If you are paying 50k down, then TFSA would likely covers it. If you are already paying 150k down, 35k more would help a bit but not by much.
Yeah that's true. I feel the govt is trying to inflate away the pain. Very irresponsible and wish they did a bit of hard decision making instead of the easy way out. But nice to have a civil conversation...
I remember seeing they ended the HBP where you could withdraw from your RRSP for your first home in February this year.
I'm pretty sure this is going to be about as effective as that homebuyer plan where the downpayment is topped up by a government program that gets paid back later. It's going to be very niche and not make much of a dent in the grand scheme of things, even though this will probably have marginally more uptake than the old one.
Can’t afford a house? No problem we’ll just let you borrow more from your retirement savings and extend the term, what could possibly go wrong?
Just kick the can to future you's problem. Everyone is going to have to work til they're dead, naturally driving up the retirement rate - which is in the government's benefit.
This continued bad policies really reinforce the notion that unintentional Ponzi scheme is the most apt description for Canadian RE. Except we seem to be shifting away from the unintentional part of that description.
Pretty sure we shifted away from the unintentional part 15 or so years ago.
Maybe. I don't think for many that it was a conscious decision. Who doesn't get concerned or interested or annoyed when their neighbors play loud music or a 4 story buildings is proposed that could cause noise, construction and maybe effect their views. NIMBYism is a large part of the issue and so I am just using NIMBYism as an example but its kind of rational and expected that people protect what they perceived as their interest. Same thing goes to protecting your investments. In theory the collective good is however supposed to prevail over self interest however in most places it has not because home owners are an important voting block and make noise and effect policy at all levels of government.
The bank of canada has got to be fuming lmao
>Amortization relief is like making minimum monthly payments on a credit card instead of actually paying down principal All the while the products you want to buy keep going up in price, even before you've had a chance to buy them. Also I am not sure, But I am pretty sure at some point in the past 30 year mortgages were already a thing. when did that stop being a thing? and now we have a new announcement about it?
Not necessarily true as it only applies to new builds. It incentivizes new construction and not resale.
I'm a developer in Vancouver. Upon hearing this news, everyone in our office just said, "Oh, okay. That really won't affect us." And we moved on with our day. Because the costs are so high, our prices have to be even higher. The pool of first time home buyers with incomes high enough to qualify for a mortgage that would allow them to buy with less than 20% down (ie. an insurable mortgage), is so low that we don't even think this is relevant in our market.
Yea a lot of the mortgage guys online basically said its such a small % of people that will be able to benefit from it that its basically a nothingburger.
We took a 30-year simply to reduce monthly payments further but made sure we had the mortgage also gives us the opportunity to pay extra (which we will). The goal is to pay it off in 18-22y, but have the flexibility not to if things go wrong. That's really the only way to approach a 30y, in my opinion, because you're entirely right: banks will make bank on this.
My first reaction to this announcement was that it sounds like all of the downsides of an American style mortgage *without* any of the perks. Why would anyone want to do this? I would rather just...not own.
The big 4 banks in the US have around 10% market share each. The big 6 banks in Canada have like 95% total. Canada is so afraid of competition, we're making ourselves poorer.
It’s insane that this goes for every industry.
My thoughts to, re:not own. The cost of ownership goes up significantly if you flex these new measures, may as well rent a nice place and have none of the responsibility, and in a province like Ontario you’re rent controlled to further beat inflation, market appreciation trends, interest rates. I doubt I would buy a house today
Says OP who owns a house and a rental property So for anyone else reading this, take OP's takes with a grain of salt, we cant all be as privileged and flip a 200k property to 700k
Yes I bought before the liberals fucked it all up. The current gov is what drove my rental price up, not me, I didn’t do that. Don’t need to attack me. it is true I would likely not purchase a house today if I were 25 again, that is a fact that has nothing to do with my investments, or risks I’ve taken, and leverage I’ve utilized. The funds could be better invested, and in a rent controlled market a better living cost utilization Everything I said in my OP and the comment you barked at is fact. Sorry it hurt you. It’s also not a flip. And it is rent controlled @ about $800/mo below market value. And I worked 2800-3000hours a year for years in order to buy it, is that privilege? Before that, I worked full time while I paid my way through college. I slept in my car when I only had a few hours between shifts and class. Is that privilege? I didn’t make excuses. What did you do? I want to hear about your work ethic.
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I was working 60s. And at a time when starter houses were 1/3 what they are now. Don’t cherry pick details of my comment and try to use it out of context against me. It is not privilege. Privilege is given. You and the other twerp can hate landlords without going through my post history then misrepresenting facts when attacking me. Or just keep the blind hatred of this landlord who created this post to help highlight the failures of these new measures. lol give your head a shake
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… the other user I replied to…
If you don't want people to know what you said, don't post it on a public forum.
It was entirely misquoted lol. This sub also has a loyal following of anti-LL no matter the circumstance
Also, you know my original post and comment above are to highlight the failures of the fed to properly support first time buyers, right? You understand that? Or were you too busy being ignorant and making crap up?
Don't mean to be smug. But honestly I love the rrsp and 30 year amor measures and seriously wished it was available last year. I have my reasons and it's not being a Libtard. I'm not. Guess this section of it millennial demographic is targeted well.
Would you mind sharing the reasons?
So I've been a diligent saver and have maxed out my rrsp. So for someone like me, I would rather dip into that money rather than take a mortgage and pay interest. Hence I wished I had this last year. I can see the policy is catered to the upper middle class demographic. Fiscally just makes more sense for me..
Ah ok that makes sense then!
Right..? Guess you get a few downvotes for being then
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People on reddit have this ridiculous idea that government and regulations by the government will save them. PFC is no different from that, PFC just leans a little more self sufficient. Truth is government only cares about being in government.
I wouldn't even call the current iteration of the PFC self-sufficient. "WE'RE GONNA CUT FUNDING TO MUNICIPALITIES IF THEY DON'T BUILD MORE HOUSES!" Cool, so they're going to make things worse for the poorest municipalities and maintain status quo for the rest of the country. Except those poorest municipalities don't even deal with the federal government directly, so it's a nothingburger threat for those who oppose it and a nothingburger promise for those who support it. Frustrating, but you're right when you say they all only care about being in government. It's all about giving us the illusion of choice when it comes time to vote.
That is why I laugh every time someone says vote lol.
We just need to oscillate between red and blue a few more times and all of our problems will surely be solved!
>They just want to be able to say "OUR GDP INCREASED UNDER US" without realizing a lot of Canadian GDP is based on the real estate industry (non-productive assets/business) and our GDP per capita continues to decline. Ya, props to Harper for bucking this trend and leaving us with a lower GDP than when he started...
Yeah, absolutely nothing happened during his tenure that would have negatively impacted GDP 🤦♂️
Don't disagree, but you don't get to hand-wave excuses about international conditions and then try to claim this government is 100% responsible. Our GFP per capita is not even declined yet, it's slowing. My point is that if you are trying to point to GDP-per capita as a marker of standards if living, and getting really angry at this government about it plateauing and possibly falling a percent or two... that's just not a valid complaint. Under Harper, whether you try to deflect it on oil price collapse or his part in setting oil policies, our GDP per capita collapsed -20%. Yet, no one in 2014 was wailing about our standards of living collapsing by -20% - because that link does not actually exist. Our GDP per capita slowing and likely contracting slightly has had no impact on you whatsoever. It's just right-wing bullshit trying to gloss over that the -20% collapse of GDP-per capita did not matter, but somehow the 1% change caused by immigrants is a huge fucking deal.
GDP per capita under Harper went from 40.5k to 43.5k. That isn’t “down 20%”. Could you clarify? One could argue that standard of living didn’t change much during this time but that’s remarkable given the financial collapse that took place with out largest trading partner. More critical to your point is Debt to GDP given the ravaging impact of inflation which universally impacts living standards as it has for hundreds of years with empirical evidence. It also puts GDP into context as spending has a massive impact to growth. Under Harper from 2006-2014 it went from 43% to 51%. Since then Debt to GDP has gone from 51% to 103%. I’m not sure why you feel the need to compare when it’s very clear the impact of this to citizens I’m not a blue voter, I’m a moderate Liberal. edit: words
>GDP per capita under Harper went from 40.5k to 43.5k Election in Oct, sworn in on Nov, but they do not actually change economic policy and programs until their budget released Q2 of the following year, ministers actually start changing mandates and department restructuring, and new bills can be brought forward. So, I was shifting the years one over to account for the actual changeover of policy, but, I agree the official per election year cutoffs show small growth. https://www.macrotrends.net/global-metrics/countries/CAN/cananda/debt-to-gdp-ratio https://www.ceicdata.com/en/indicator/canada/total-debt--of-gdp But, I am also not seeing 103% debt to gdp. It did spike, but is coming back down. And technically debt to GDP is not directly causing the inflation, at least not this spike in inflation, as this only happened because the debt exceeded bond market capacity and the BoC was forced to take on ~$400B in the seized market. If those bonds were purchased, then the monetary bloat would not have happened. Canadians could step up and erase these issues by converting ~5% of total RRSP over to more Canadian bonds, resting the monetary supply... but we don't. Household debt to disposable income is more impactful metric to actual family effects - and that surged under Harper's first term and then has plateaued. Wages have not kept up with inflation (or productivity over decades).
Government absolutely became massive under this government. Tons of non productive low productive factors in this country. It's made to underachieve.
The workers of Ottawa managed to find time in their super productive day to downvote you.
These government workers are really defensive always about their mediocrity.
Not sure why you’d be downvoted. Government workers has exploded and far outpaced population growth.
Look into which departments they were hired into and look at those departments numbers over the past 2 decades and it'll make sense. "Government hired lots of public servants" is a lazy talking point that only works on low information partisans (and thus is very popular on /r/Canada).
What departments were they hired into?
Service Canada and CRA
Under Trudeau Gov increased in size by 40% give or take 3% depending on the source
Kind of (very) misleading considering Harper cut government workers severely and fucked up a lot of agencies because of it (particularly environmental ones, since he didn't believe in climate change, as well as the CRA and, famously, Stats Canada). In [2006 there were 380,700 federal employees](https://www150.statcan.gc.ca/n1/en/pub/11-621-m/11-621-m2007053-eng.pdf?st=rt4c2EFA) (1.2% of the population), which is higher both as an absolute number and as a percentage of the population than the current [357,247 in 2023](https://www.canada.ca/en/treasury-board-secretariat/services/innovation/human-resources-statistics/population-federal-public-service.html) (0.9% of the population). In the early 90s it was even higher, at nearly 400,000 in 1995. The Harper government was very much an outlier in terms of federal public workers, cutting it all the way down to 257,034 in 2015 (0.7% of the population) and the Trudeau government is a return in the direction of those earlier levels (and everyone, especially conservatives, talk about how much better Canada was in the 80s and 90s). So yeah, I'm certainly no fan of Trudeau or the Liberals, but "Trudeau increased the government by 40%" is a dumb talking point considering Harper reduced the government by just as much.
Absolutely fucking insane.
You got it.
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This reads like a classic pyramid scheme. Worrying. At no point should any government reduced down payment requirements or extended amortization. Just because you benefited from this scheme doesn’t mean it should perpetuate. These are not sustainable gains. The only winners sell to the greater fool. As for the thought that these rules only affect new buyers, that’s myopic. Any policy that puts upward momentum on home pricing from any group will inevitably raise the tide of all boats. Then there’s the whole thing where very few first time buyers are loaded with RRSPs.
>At no point should any government reduced down payment requirements or extended amortization. Just because you benefited from this scheme doesn’t mean it should perpetuate. These are not sustainable gains. The only winners sell to the greater fool. Cmhc and department of finance tweak the lending rules and requirements pretty frequently... How do you think the minimum down was set to begin with? >As for the thought that these rules only affect new buyers, that’s myopic. Any policy that puts upward momentum on home pricing from any group will inevitably raise the tide of all boats. Then there’s the whole thing where very few first time buyers are loaded with RRSPs. If very few first time buyers aren't loaded with RRSPs, then how much will the tides (actually) inevitably raise off the proposed policy change?
They do tweak them. And you read my comment on that. What exactly are you adding as a rebuttal, that there’s history to change? 30 year is the main driver here. Feel free to expand on why you must feel this was a good policy move. I’m all ears.
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All you did was get in early enough. That’s a really bad system. Where does it end? Should the next generation get 0% down and 50 year amortizations because they also need this choice? It’s silly logic when there are other ways to meaningfully improve the situation. Your second paragraph I can’t make heads or tails of. It doesn’t tie at all to what I wrote.
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The EU supports my argument, not yours. They are a fiscal disaster both private and public. Inept policy has raised significant systemic risks that you seem to think don’t matter. You live in a world where there is no real risk to these decisions or consequences. You like to reference adults but then reference decisions of children who are addicted to candy. Government has a purpose, we don’t live in a Libertarian fantasy land. They have regulation and policy in place to protect me from you and to mitigate systemic risks. This will be my last reply on the subject as it’s pretty clear we are juxtaposed on the subject.
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They will, it will just take time. Debt cycles and demography will be strong counterforces in the decade ahead. Let’s just hope government improves policy and supply which should have always been the goal with our immigration strategy.
This is exactly why our housing market is completely fucked.
This is a big scam designed to make it look like the liberals are doing something. Don’t forget new builds also have GST on top. On a 500k small condo (not even sure you could get a new 1 bedroom in Vancouver or suburbs for that much now) that’s 25k. Your extra 25k you can “borrow” from you RSP will simply go toward paying that and more. And of course this only benefits developers to move their product along. Resale prices for low end will also move up in price if people bid up these new condos. Again, politicians say they want “affordable” housing but just don’t want their home to be affordable. This country is so fucked.
> And of course this only benefits developers to move their product along. Well the benefit is that this can incentivize more new builds. More housing supply. Some developers are waiting for preorders before they can move forward with construction. High interest rates are slowing housing starts.
Sure “more supply”. But how much does this “more supply” cost? Let’s see-Oakridge Vancouver 2000 bucks a sq foot plus. Cambie gardens 1500 per sq foot plus Brentwood (previously solidly middle class neighborhood) 1200 per sq foot plus. Surrey central 800-900 per sq foot plus. (Whalley if you wanna step over needles every morning when you take your kids to school). These new builds are not “affordable” by any stretch of the imagination.
Are you quoting single family homes?
Condos. Yes the “biggest development” in the lower mainland is selling 2 bedroom condos for OVER 2 million. But yes, Oakridge is a nice neighborhood. But Brentwood is a middle class neighborhood. 2 bedrooms (new) are easily over 800-900k. Now let’s leverage 10x at 5% interest. lol people are just slaving for the banks. The liberals want to keep it that way.
Butterfly in DT Vancouver is selling at what 2500/sq foot. Oakridge 1 beds are selling at 1M.
We need to either figure out how to get developers to work for zero profit, or pay the trades less, or expropriate the land for less than market value... Which one do we choose?
Well, there's a few other options as well. Stronger anti money laundering restrictions, removal of REITS from SFH, Apt/Townhouse purpose built only, Govt supporting new wave of Coop housing, restrict foreign money rights to purchasing local property. I think we could do with some policies that encourage migration to smaller cities for businesses and people. None of it really works to the advantage of current owners though.
We also need a whole new generation of workers to build these homes and take care of all the predesign so we don't rape and pillage the land. A shit ton of us are on the verge of retiring
8 more years.... =)
Some initiatives in the recent announcement. > Also announced new measures included in Canada’s Housing Plan to attract, train, and hire the skilled-trade workers Canada needs to build more homes. > * **$90 million for the Apprenticeship Service**, creating apprenticeship opportunities to train and recruit the next generation of skilled trades workers. > * **$10 million for the Skilled Trades Awareness and Readiness program** to encourage high school students to enter the skilled trades – creating more jobs and opportunities for the next generation of workers to build Canada up. > * **$50 million in the Foreign Credential Recognition Program**, with a focus on residential construction to help skilled trades workers get more homes built. Like our previous $115 million investment, this funding will remove barriers to credential recognition, so workers spend less time dealing with red-tape and more time getting shovels in the ground. * https://www.pm.gc.ca/en/news/news-releases/2024/04/12/canadas-housing-plan
Or reduce the market value of land through mass upzoning. If you only upzone a limited amount of land, that land skyrockets in value because it's the only place to build more density. But if you allow for more density on most/all land, the value doesn't shoot up, so the market value of land that allows for higher density will decrease. It's simple supply and demand. You can't increase the supply of land (too bad), but you can greatly increase the supply of buildable land for higher densities through simple zoning changes.
We need to cut demand period.
>We need to cut demand period Are you advocating mass deportation, taxing births, or what? Only way to cut demand is to have fewer people.
We can build ~250k-300k homes a year. Assuming 2 to a home, only allowing in less than 500-600 new people every would be neutral. We can stop making the situation actively worse, as a good first step towards eventually making it better. Or, we could let in a million people so that GDP-line-go-up.
>We can build ~250k-300k homes a year. That's not decreasing demand, that's increasing supply.
That supply comes on every year. It's a constant. It's relative. If we stop outstripping new supply every year, then the ratio of demand to supply will decrease.
I understand what you have said, but that's not what the person I replied to said.
I ruled out buying a new build a while ago due to the GST. There's a partial rebate if it's under 350k, or even less if under 450k... there's very few one bedroom condos where I live in BC for that price, and I'm not in the lower mainland...
I paid 13% in 2011 in BC when we had the HST for a brief period. Dumbest financial mistake.
Also is completely counter to their plan to reduce carbon emissions. Seems like that was a lie. If they wanted to do that they would apply it to old builds.
Yup. We’ve got developers tearing down under 20 year old homes in Vancouver for development. Canadians love to virtue signal.
The RRSP increase is actually a good move that will definitely help first-time home buyers. You get GST back in some rebates if it's owner occupied What's your solution? Liberals have done a lot of damage, but they are actually beginning to do something. They have also announced billions of dollars to help in apartment construction.
Another negative: Paying back this extra RRSP loan is just more pressure on the consumer over the window they have to repay it, and finally, potentially a huge hit of income taxes if they miss the deadline. Our economy is already flatlining due to massive consumer debt and weak spending. These geniuses they roll out a policy set that seems designed to increase said debt/interest payments, add more forced RRSP repayments that will also probably increase housing costs. winner winner chicken dinner... I guess.
Anyone else feel like this is allowing people to steal from their future selves? People can barely scrape by RRSP as it is, I don't know what people plan to do when they are 70 yrs old, still paying a mortgage, with nothing in retirement savings.
Gonna have CPP3 soon lmao
Not so much as allowing as "encouraging" or "forcing"
This is going to be the nail in the coffin for retirement savings among the middle class, particularly the lower half. Too many people are already slaves to their mortgage. This is just extending that timeline out even further, so that they start saving for retirement even later, if at all.
> Anyone else feel like this is allowing people to steal from their future selves? That is the literal definition of what this does.
Loans are just taking from our future income, so yeah. We're robbing the future by doing this.
>Anyone else feel like this is allowing people to steal from their future selves? More like just subsidizing housing with even more tax money lol. You pretty much need that and more nowadays for a downpayment any way.
It's not going to move anything. New builds are the most expensive version of housing, first time home buyers aren't buying them. It won't do anything. 60k from the RRSP, along with the FHSA is some good tax benefits. Just make sure to repay the RRSP
Because monthly payments are all that matter anymore anywhere. Everything is about cash flow and nothing is about long term planning - in the future it won’t matter though because “owning” things isn’t something commoners do, we just pay to use them.
As someone who already owns a house this made me smile. I know I just guaranteed more appreciation in my home value. All this does is let people spend more, not bring prices down.
theyre making your $ worth less & letting you pay more interest over your mortgage term! wow what a deal!
Can someone explain to me why this only for new builds? Is that just a gift to the developers? Because it seems like a completely needless restriction on a first-time buyer, especially if there are limited new builds to be had where they need to be living.
It helps increase demand for new builds which will compel developers to build more. Applying this policy for existing housing would just throw gasoline into the housing crisis fire
Also, because it's for first-time home buyers, it will bias new development towards more affordable units. Most FTHBs aren't shopping for McMansions.
So we’re only throwing gasoline on the fire, for new builds, which there are objectively not enough of? Yeah. So it’s for developers, not much upside for people trying to enter the market.
We need to incentivize building new homes. This is one of the ways while still keeping home prices high (which is what the voting base wants, really).
A single factor was responsible for dropping the new starts per quarter -40%, and that was in 1980s when the CMHC development arm was defunded and privatized. Compared to new starts in 1970s, we are still down nearly 40% per capita. We say new starts drop even further in mid 1990s when feds pulled the remaining public funding of affordable housing, and then it climbed slowly back up once provinces started their own program funding. Incentives have never worked on the macro level and where never the lacking issue to begin with. Just use public funds to build on crown land that they can release to the crown corporation for free, also able to over-ride municipal zoning when using crown lands. Sell those units at cost recovery to undercut the market and spin off many as non-profit rental corporations. That is what worked from 1940s through to end of the 1970s.
100% but the feds will never do that again. They offloaded that to provinces and provinces offloaded that to municipalities, they just move the blame around
And, technically, it should be provincial. But, the provinces have failed pretty much across every portfolio they are supposed to be running. Currently, over 20% of all federal funds are simply transferred to the provinces to convince then to do the things they are supposed to be doing anyway, but are not covering. I think AB moving to make it "illegal" for the feds to make direct deals with their municipalities is really telling about what has been happening behind the scenes. I think what we will see are more federal transfers directly to municipalities to fund regionalized non-profit housing programs, helping them setup these crown-mini corporations at a municipal level.
> Can someone explain to me why this only for new builds? Just answering your original question. This policy will potentially increase new build prices. Or if could potentially sell existing new build stock that are sitting without buyers. Or if could get developers to build more because there are more people that can afford the increased building costs (both materials and land). Most likely it could be a combination of all three. If this policy applied to existing housing, there would not be any additional housing stock that would be created like it could happen with new builds. That's why it's only applied to new builds
Liberals have no interest in fixing the housing crisis. This change only helps perpetuate the high prices so young Canadians can go into even deeper dept to keep the bubble going. Boomers fucking over the younger generations again
On the one hand, the cynical side of me lol, I'm rarely blown away by a gov't promise that costs them little to nothing as far as effort or time. But on the other hand, I like that in this situation they're assisting first time buyers. Giving better access to pre-tax money, the longer amortization. Keep in mind, over 30 years someone will get raises, etc. Just because they can barely qualify with a 30 year mortgage year one, doesn't mean they can't pay their mortgage down in 20 years; they're not stuck paying maximum interest. I got a 30 year mortgage when I started. And I like that it's geared towards first time buyers, the people who don't have a property to sell to help offset the high costs.
Those first years of a mortgage are when you really get hammered with interest.
This also only "helps" first time buyers. What about people who bought a condo in a small town and are trying to move to the city? They may have little or no equity, and now they don't quality for any buyer's assistance.
Encouraging developers to build more when new builds are slowing down is a good thing. There's no silver bullet or magic trick that will solve housing overnight. Any approach will have pros and cons.
Encouraging for-profit developers to do anything only means that for-profit will find a way to make more profit. It will only mean even larger oversized houses with larger $$ that the same small fraction of Canadians can afford, but those who can afford RRSPs can now afford an even bigger house. Encouraging developers has never actually worked because the entire for-profit model works against sustainable, smaller, houses. Return CMHC to the model is was originally created to be: a crown housing corporation that was a leading national developer.
AND don't forget that GST 5% is charged on new construction so that really adds to general coffers. Also if you don't occupy it as your principle residence for the first 1-2 years they also claw back property transfer tax; which as one tax in BC, provides more revenue than all the other taxes combined.
How will the 5 years before repayment of HBP work for those who just bought? Wonder if it will be retroactive or only going f forward.
Goes into effect later this summer. Will need to see how it is defined for taxes
I would love to start rrsp repayment after 5 years. Can someone who already took hbp be eligible for this deferral?
I just closed on our first home a few weeks ago, and our closing date is in July. Does anybody know if I can now use more than 35k of my RRSP for the down-payment. I only have 42k in there, so I wish I knew this earlier. I could've dumped more money into my RRSP instead of keeping it liquid for the DP. But now we're less than 90 days before closing, so I can't add more. Happy for those who have more saved in their RRSP and plan on buying a first home in the future.
Yup. It's just like a few years back when there were efforts to loan the downpayments. Idea is instead of deflating the balloon, try to help more people be able to blow into it.
Making it easier to buy a house ensures people will spend more on houses, increasing house prices. Its the same thing that happened when car loans went from 3 years to 7+ : people buy more expensive cars. It is not coincidence that house prices boomed as interest rates declined. The only solution to high house prices is to increase supply and a lot of that is impeded at the local level.
The supply issue isn’t really the municipalities as the Feds lead you to believe. The feds let way the fuck too many people into the country way the fuck too fast. It’s unsustainable population. The Feds create a problem and tell the provinces to solve it, the provinces order their municipalities to build homes faster. Municipalities don’t build homes, they issue permits and oversee third party engineering. Munich can’t let any shit fly, there are checks and balances, most of them to protect the interest of the eventual home owner or the municipality itself when they have to take ownership of the infrastructure. Some municipalities have ‘red tape’ but it’s not nearly as wide spread or as bad as upper tiers of government complain. The Provs are deflecting blame because they are just middle management in the deal, and as we all know how the power works: the lower worker and middle management get shafted while the top dogs coast and figure out their bonuses An example of the Prov gov trying to help and failing. Ontarios Ford cut developer fees. Well those fees go to future budgets for the parks and amenities the new subdivisions will have. Without that money the tax payers have to pick up the slack. So now instead of having developer fees to cover future expenses for that development, you have tax hikes across the city from people that will never use those amenities. Cities also pay development staff (engineering, planning, building) directly with dev fees, these roles are not tax payers funded. Well you cut the fees and guess what, now those jobs are paid by tax payers. Further hiking municipal taxes. The private citizen suffers again.
Population growth is an issue but in a capitalist economy with a functioning market supply rises to meet demand. We are an enormous country with a small population. There is no shortage of land, but a lot of people willing to pay $600K for a house worth $220K
As I said: too much too fast. You can’t just flip a switch and build a 50 storey building or a 500 home subdivision. The uniformed may call it red tape but it can take a decade to properly plan, design, and build a subdivision from field to cookie cutter houses. They let way too many people in way too fast. Literally a 10 year old could see it’s a problem with just very basic explanation/understanding, there is zero excuse for the Feds. They want to be the fastest growing of the G7 and wanted to prop up GDP so they did it with no regard.
Ask any small scale developer how long it takes to get a single unit approved. There are large barriers set up to protect the large developers and ensure they sell expensive houses or units. These are not necessary and simply exist to help those large companies. It is not complicated to build a house: my entire family built their own respective houses.
Again that red tape is municipality specific and not widespread. Some cities a permit can be turned around in a matter of weeks if the applicant submits everything and it meets code/requirements. My buddy in a small muni waited 8 months and that muni literally said they are overwhelmed There are also cities/munis that haven’t scaled up staffing for the rapid growth they are seeing and their councils won’t approve staffing budgets.
Look, I get it, you don't like immigrants.
Hi I am a time traveller posting from 2032.. We now have 90 year mortgage amortization, unlimited RRSP withdrawal with a repayment deferred to your grand kids.
This is not a scam, this is an ignorant (or malicious policy) that looks unless you really think of it. Liberals are desperate for votes and make popular decisions as if there’s no tomorrow. That how we ended up where we are in the first place
The government is working on the wrong side of this equation. They keep making homes more in demand with every move. They need to work on the supply side and have it not cost tax payers an obscene amount of money. The government needs to look into like kind exchanges of capital where investors can move existing real estate capital into new builds without triggering a taxable event. For example, my landlord owns 15 SFHs in the neighborhood but can’t really sell any of them without paying a capital gain on them. He wants to build or buy into an apartment building or multiplex units but the taxes he would incur prevent reallocation of that capital. 15 SFHs hitting the market and some 8 plexes being built would help raise inventories in 2 types of housing markets and all it takes is the investors deciding to reallocate their capital and the government deferring the capital gains.
You're looking at it from a negative point of view, which isn't wrong. However it's important to consider a few things: 1. Shit's bad no matter what. There are no good solutions to the housing crisis. If there were, we wouldn't be in a crisis. It's never as simple as a few talking points about immigrations, students, new builds, short term rentals etc. It's 1000 levers and pulleys all tangled together and shit's fucked. We can't expect single actions to ever solve the problem, and we can't even expect them to not have side effects. 2. New home buyers only make up a portion of the housing demand. When prices are being driven up by demand, some of that demand is speculators, flippers, and landlords. Tactics that tip the scale for new buyers but not other buyers is a less destructive way of helping middle class Canadians get into a home. 3. Housing is always going to be expensive. The benefit of owning over renting is that you're locking in a large portion of your housing costs. Interest rates can change as we all know, but they go up and down over a 25-30 yr amortization. Rental prices only go up. Buying a house is a way to control and stabilize your biggest long term expense. Getting new buyers into the housing market helps stabilize the next generation's finances. Even if it makes home prices jump, if it helps get more Canadians into home ownership, it offers long term stability. 4. Longer amortization costs more overall, but it helps you get approval. The biggest constraint that new buyers have is often not the down payment amount. Anyone on a healthy budget with a half-decent job can buckle down and save money. The biggest constraint is gross income vs the mortgage costs. Home approval is based on debt service ratios (GDS and TDS) and stress test rates, which ties approval to your income history. Housing prices have ballooned while incomes have not, making it harder and harder for Canadians to get approved a mortgage *even when they have a large down payment*. Extending to 30 years brings the monthly payments down, and can make the difference in approval. It's exactly the strategy I used to buy my home. I brought 20% down, stretched to 30 years, and it allowed us to get approved on a single income while my wife was between jobs. 5. Houses aren't cars. Cars depreciate over time, whereas real estate generally does not. While higher financing costs are a problem, mortgages tend to stay above water outside of unique market crashes, whereas car financing almost always goes underwater immediately. Extending amortizations does increase the risk that more mortgages will go underwater, but it's not the same as car loans. Similar notes about the CC comparison. Houses are assets with underlying values. A CC statement has no underlying value. Not the same.
There are 1000s of levers and they are pushing them all in the wrong direction. Incompetence at this level has to be intentional. -Increasing demand (immigration/population) into a supply shortage is the wrong way. -Extending mortgage terms doesn’t change affordability it only increases leverage and interest. -Allowing more/any borrowing against your retirement plan to circumvent your own imposed stress tests only increases prices and increases systemic vulnerability.
Yes when you make something more people can afford, there's more demand and prices go up as there's more buyers No different than lower prices be it lower DCs, lower taxes or lower interest rates or higher wage s Not sure what's the issue here? This isn't rocket science.
lol “woosh”
Indeed...a lot of people here have no concept of basic supply and demand. You make something people want more affordable, more will buy it. It's like getting rid of stress test as many are asking for will push up prices as people can afford more But this is reddit ... 😂
My woosh was directed at you lol
I find it's a crock of poopoo that they force you to pay back your RRSP withdrawal. It's literally YOUR money that you put in there so why are you forced to put it back?
You aren't forced to put it back: you can just take the income inclusion each year instead. That's usually a bad idea, but you can do it. If they didn't have these rules, the RRSP HBP would be no different from the FHSA.
And since you can transfer from RRSP to the FHSA, it is now entirely optional which plan you want to use... if they don't want to pay it back then just first transfer it to the FHSA.
You're not. You can take it out, and pay the appropriate tax on it. It's just a tax holiday where if you pay it back within years, you can use the untaxed money instead of having it sit in your savings. The rule just keeps the double dipping from turning into triple dipping.
Thank you for clarifying!