Trudeau's power pact targets housing costs

Ottawa

CANADIAN Pime Minister Justin Trudeau's power-sharing deal with an opposition party promises to tackle the soaring cost of housing in Canada and may target real estate investment trusts that own homes.

The agreement between Trudeau's governing Liberals and the New Democratic Party says the government will act on the "financialisation of the housing market by the end of 2023."

No details were given, but in last year's election the Liberal platform pledged to review the tax treatment of large corporate owners of residential properties such as real estate investment trusts to "curb excessive profits".

Such a move, if implemented, has the potential to impact publicly-listed real estate firms including Canadian Apartment Properties Reit, Minto Apartment Reit, InterRent Reit and Boardwalk Reit.

The Liberal-NDP deal also promises to move ahead with a Homebuyer's Bill of Rights that bans blind bidding for homes, establishes a legal right to a home inspection and requires real estate agents to disclose if they're involved on both sides of a transaction.

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Other measures include a Housing Accelerator Fund to increase the housing supply and extending by an additional year a programme for new homes for vulnerable groups.

Canadians took out record mortgage debt during the pandemic, sending house prices surging 52 per cent in just two years. With interest rates now rising, some 73 per cent of Canadians are concerned about the impact on their living expenses, according to an Angus Reid survey this month for accounting firm Grant Thornton.

Established homeowners, however, have more breathing room. Higher property prices mean they are willing to spend a lot more on renovating their homes than in pre-pandemic times, said Tim Priddle, co-owner of the WoodSource, a lumber and millwork shop in Ottawa. But Priddle expects demand for large home renovations to cool later this year as spending priorities shift again. BLOOMBERG, REUTERS