Housing Policy and the 2025 Election:

A Battle for Canada's Future

When it comes to Canada’s real estate market, it’s no secret that housing has evolved into more than just a basic necessity. Homes have become a store of wealth and the major factor in household retirement strategies. However, this evolution has also driven a staggering gap between those who own property and those left chasing the dream of homeownership. This divide could very well shape the outcome of the 2025 federal election.

For Canadians, housing affordability is no longer just another election issue. It should be the issue, given the sharp generational and economic consequences that we are currently seeing. Younger voters see sky-high prices and rising mortgage rates keeping homeownership out of reach, while older property owners have enjoyed years of rising values, enjoying immense tax free, in most cases, financial gains. This dynamic has turned housing into a heated political battleground, and the plans proposed by Canada’s main federal parties reflect starkly different visions for the future of the country’s housing system.

Here’s how the Conservatives, Liberals, and NDP aim to tackle this crisis and what their policies could mean for voters, homeowners, and investors.

Conservatives: Unlocking Capital for Economic Growth

The Conservatives' proposal, called the Canada First Reinvestment Tax Cut, aims to unlock the vast wealth currently trapped in Canada’s housing market. Essentially, the plan would allow individuals and businesses to defer paying capital gains taxes on the sale of certain assets, such as real estate, if the income is reinvested into active Canadian businesses.

The Mechanics of the Plan

Think of it as a broader version of America’s 1031 exchange program, where capital gains taxes are deferred if the proceeds are reinvested into new real estate. Only in Canada, under this plan, the proceeds could also go into sectors like clean energy, technology, or manufacturing. The capital gains tax would only be payable if the reinvested funds leave Canada or the new investment is sold.

The Potential Impact

For real estate investors, particularly older Canadians holding long-term properties, this could provide a tax-efficient way to sell while redirecting funds into productive industries. The Conservative plan leans on the belief that if Canadians are given incentives to reinvest their wealth domestically, they’ll create a ripple effect of new opportunities in other sectors. This approach has the potential to unlock a significant portion of the housing supply while reducing barriers for first time buyers.

Liberals: Doubling Down on Housing Supply

The Liberals have set their sights on tackling the supply shortage in Canada’s housing market with their Build Canada Homes (BCH) proposal. The bold ambition? Doubling the number of homes Canada builds annually to 500,000. This is a scale of production not seen since the post-World War II era when all those wartime homes you see locally were built.

Key Pillars of BCH

Public-Led Development: Developing housing on public lands.
Innovative Construction: Investing heavily in prefabricated housing technology to deliver homes faster and more affordably.
GST Relief: Eliminating GST on homes under $1 million for first-time buyers, which could save tens of thousands of dollars in high-cost regions like Toronto and Vancouver.
Zoning Reforms: Expedited development approvals to reduce red tape.

Who Benefits?

First-time buyers are set to reap the immediate rewards, with potentially cheaper construction, tax cuts, and more housing inventory making homeownership both accessible and appealing. For developers and investors, easing zoning laws and streamlining processes could unlock new opportunities. However, an oversupply of homes could also moderate price appreciation, reducing margins for speculative investors, which wouldn’t be a bad thing perhaps.

The challenge? Coordinating federal, provincial, and municipal policies while staying on budget and timeline. Although ambitious, BCH carries significant political and logistical risks.

NDP: Putting Affordability Front and Centre

The New Democratic Party’s housing platform diverges significantly, focusing on affordability and curbing speculation. Their standout policies include low-interest fixed-rate mortgages for first-time buyers and restrictions on corporate landlords acquiring affordable housing.

Tackling Mortgage Stress

With mortgage rates at their highest in decades, the NDP’s federally backed mortgage program could deliver much-needed relief. A 0.5% reduction alone might save buyers thousands of dollars over a five-year term.

Reining in Corporate Control

The NDP wants to steer away from profit-driven practices in the rental market. Their policies include banning large corporations from buying affordable housing, instead favouring non-profit organizations and co-ops. While this stance may protect affordability, it could deter private investments, potentially reshaping the rental market landscape.

A Bold Message

The NDP’s housing vision is unapologetically aimed at prioritizing people over profit. However, its potential impact on investors and landlords could lead to tighter regulations and limited acquisition opportunities, signaling a fundamental shift in how rental housing is managed.

If you thought the landlord tenant legislation in Ontario didn’t go far enough, then this is the party platform for you!

Why First-Time Buyers Hold the Key

Why has so much of housing policy across party lines been focused on first-time buyers? Because they’re essential to market movement. A strong influx of first-time buyers boosts demand, unlocking homeownership opportunities further up the real estate ladder for sellers. Data from the Bank of Canada shows that first-time buyers represent nearly half of all home purchases annually, making them the foundation upon which a healthy housing market is built.

Simply put, the housing system works better when first-time buyers are active participants. Without them, the chain reaction vital to market movement grinds to a halt.

A Nation Divided on Housing Solutions

While the Conservatives, Liberals, and NDP differ significantly in their approach to Canada’s housing crisis, their proposals all stem from an acknowledgment of one hard truth: the system is broken. Shared goals of increasing accessibility and incentivizing market stability are clear, but their execution reflects deeply contrasting political philosophies.

The Conservatives’ pro-market approach relies on unlocking private capital to fuel growth across multiple sectors. The Liberals envision government-led initiatives to reshape housing supply at a massive scale. The NDP frames housing as a public good, promising affordability through regulation and systemic change.

For homeowners, first-time buyers, and investors alike, these policies could redefine what it means to participate in Canada’s housing market. And for Canadians heading to the polls in 2025, housing policy could be the decisive factor in choosing the nation’s future direction.

In our opinion, while housing is a complex issue, it’s one we can solve with the right combination of policy, funding and desire to get the job done. It’s also an issue that we can solve internally and not necessarily be impacted by external forces. Filter out the noise of tariff threats and focus on what we can solve. Fixing the housing crisis goes a long way to also solving some of the external issues and pressures we’re feeling.

Enjoy the weekend.

PS: We’ve heard the feedback on the neighbourhood sales reports and have changed the output as best we can. We’ll continue to improve the look of the reports as our MLS® system continues to evolve. In the meantime, I can recommend our other website Sold in Guelph . You can search active listings and the past 2 years of sales. You’ll need to sign up for it. I promise, it’s worthwhile.

Paul

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