Politics and housing, today’s blog is going to be very informative.
You may not be interested in politics at all, me either.
But it is necessary that we know what’s happening out there because it affects us directly, especially when it comes to housing.
Did you know that something big just happened last week?
Don’t worry, I’m going to make it simple and interesting for you.
In 2022, Justin Trudeau’s Liberal government found itself in a minority position.
It needs support to push through key legislation and stay in power.
That’s when the NDP, led by Jagmeet Singh, saw an opportunity.
Singh and his party had long been advocating for more aggressive action on Canada’s housing crisis.
So the two parties struck a deal.
The NDP would provide crucial support for the Liberals in Parliament, so it is straightforward for the Liberals to get any legislation passed.
In return, the Liberals would prioritize NDP’s key concern - housing affordability.
The NDP wanted to see real actions on surging home prices and rents.
The deal promised steps to build more affordable housing units, provide greater support for renters, and create long-term solutions for making housing more accessible to working families.
Now that we are in 2024, are you happy with Trudeau’s Liberal government?
The NDP is certainly more than unhappy.
They think that there’s no concrete action on housing.
On September 4, NDP leader Singh released a video saying that he has ripped up the supply-and-confidence agreement with Trudeau.
So the NDP-Liberal deal officially ended and there are 3 important implications on Canada’s housing market.
#1 Delays in Affordable Housing Initiatives
During the NDP-Liberal partnership, the NDP was really pushing the Liberals to prioritize things like building more affordable housing units and protecting renters from rising costs.
Now that the deal has collapsed, those initiatives may lose momentum.
We will likely see some serious delays in getting affordable housing built and rent relief programs off the ground.
This slowdown could mean home prices and rents continue to climb.
#2 Political Uncertainty Impacting Housing Policy
With the NDP-Liberal deal falling apart, Canada’s political landscape has suddenly become a lot more uncertain, and that’s likely to have a ripple effect on housing policy.
Without the steady support of the NDP, Trudeau’s government is now in a trickier position.
They’ll have to navigate a divided Parliament, where getting anything passed, especially major housing reforms, will be much harder.
It is no longer a straightforward process.
They’ll need to negotiate with different parties, and that could mean housing plans get delayed or watered down.
On top of that, there’s the looming threat of a snap election, which means an early election may be called before the scheduled time in October 2025.
So the Liberals may start shifting their focus from policy to survival.
Instead of pushing hard on housing reforms, they might end up preparing for a potential election, which could put crucial housing initiatives on hold.
All the energy that was supposed to go into fixing the housing crisis may now be redirected to navigating the political storm.
And it is not just the government that’s affected, this uncertainty trickles down to investors and developers too.
When the political future is up in the air, investors tend to hold back.
Developers might pause or reconsider big housing projects, especially affordable housing, since they often rely on government incentives and stable policies to move forward.
If they are not sure what the government’s next move will be, they will probably decide to just wait, which could mean fewer housing projects breaking ground.
This will in turn impact housing supply down the road.
#3 Potential Shift in Housing Priorities
What happens next really depends on how the Liberals choose to play their cards in Parliament and housing priorities could shift in unexpected ways.
Let’s say the Liberals decide to seek support from the Conservative Party or other right-leaning groups.
In that case, we might see housing policies take a more market-driven approach.
Instead of focusing on government-funded housing projects or renter protections, the emphasis could shift towards encouraging private developers to build more homes by offering tax incentives or loosening regulations.
The idea would be to let the market increase supply and, in theory, bring prices down.
But for people looking for more direct government support, this approach might not deliver the relief they are hoping for.
On the other hand, if the Liberals look to smaller, left-leaning parties for support, we could see even more government intervention in housing.
This might mean doubling down on affordable housing projects, strengthening renter protections, or introducing stricter measures to cool down the housing market.
It could also mean more government programs aimed at helping first-time buyers.
Which way do you think the Liberals are going to take?
Or does it still matter?
The latest polling data shows that the Conservative Party holds a significant lead over the Liberals.
The Conservatives have approximately 44% support nationally, while the Liberals are trailing at around 22%.
The NDP is polling lower, in the range of 10 to 19%.
If the Conservative Party wins the election, we could see very different real estate dynamics because of their policy priorities.
Next week, we are going to talk about the implications on the housing market if we see a Conservative victory at the election.
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