Thank you, Mr. Chair.
As you mentioned, I am accompanied by Shaun Cathcart, Senior Economist with the Canadian Real Estate Association.
We're pleased to be here on behalf of over 127,000 realtor members who live and work in every riding and community from coast to coast. Together, we advocate on behalf of property owners, buyers and sellers. Our objective is to present socially and fiscally responsible proposals to the government that will help Canadians.
Today, I want to focus on those who share the dream of home ownership. Unfortunately, there are many Canadians—millennials, newcomers and working families—who feel they may never have a place to call their own. This should raise alarm bells for this committee, because housing plays a critical role in the economy and provides long-term social and financial benefits to homeowners and communities.
Owning a home allows Canadians to accumulate equity for retirement and provides positive social, economic, family and civic outcomes. With the purchase of a home come pride of ownership and the sense of belonging to a community, which in turn foster participation and civic engagement.
Real estate also plays a critical role in the Canadian economy, accounting for a fifth of all GDP growth. When Canadians purchase a new house, they typically acquire new appliances or furnishings, and undertake renovations to meet family needs. In 2018, each home sale in Canada is expected to generate almost $64,000 in spinoff spending. MLS home sales and purchases in 2018 will add an estimated $29 billion in economic activity.
Given the importance of home ownership, we are recommending that budget 2019 include measures to ensure that the Canadian housing market continues to contribute to the economy and support Canadians who are trying to achieve their dream.
Home ownership remains an aim for Canadians, including millennials, who are the next generation of homebuyers. However, affordability is often out of reach, as many struggle to accumulate enough capital for a down payment. Without the financial support of family, many first-time homebuyers are unable to enter the housing market.
One support that is currently in place is the first-time homebuyers' tax credit. This program provides financial support by compensating for some of the costs associated with a home purchase. At present, the program provides $750 of financial support. We are recommending an increase to the existing tax credit to more accurately reflect the current costs facing homebuyers and provide meaningful assistance to middle-class families and millennials. This tax credit enhancement would benefit every single new homebuyer, not just a select few.
We acknowledge that there is no one simple strategy to make home ownership more accessible in some of Canada's most active markets. However, recent federal government policies and regulations have made access to housing in Canada increasingly difficult for middle-class families, and in particular millennials.
The B-20 stress test is designed to ensure that Canadians don't take on more debt than they can afford, and to safeguard the financial system as a whole. These are commendable goals, but blunt regulations are having an impact, albeit unintended, on the housing market. In superheated markets, they have had their intended effect, but in stable, balanced markets such as Calgary, Saskatoon and St. John's, the stress test has driven middle-class families further away from reaching their goal of owning a home.
A report by Mortgage Professionals Canada in July 2018 estimates that about 100,000 Canadians, 18% of buyers, have been prevented from buying their preferred home since late 2016 because of new federal mortgage rules. It is increasingly difficult for first-time homebuyers to find a home that is affordable in some parts of Canada.
We believe these regulations should be more dynamic and applied only in markets the government has identified as requiring an intervention. Going forward, the federal government must take regional differences into consideration when implementing new measures that affect homebuyers.
Thank you very much, Mr. Chair.