Hamilton’s housing market ‘stunningly out of reach’: Trudeau

When Julia Freeman bought her first home on the central Mountain for $375,000 in 2019, she was scared of the price tag.

Today, with its value more than double what she paid for, the 27-year-old is just happy to have beaten the rush.

It's crazy to see how much it increased in such a short amount of time," Freeman said of her abode on East 11th Street, now worth roughly $800,000. I wouldn't be able to afford it now even on dual income."

It is neighbourhoods like Freeman's where Prime Minister Justin Trudeau is trying to stifle hyperinflated markets that have squeezed out thousands of first-time homebuyers in Canada.

A centrepiece to his government's budget, announced Thursday, includes an unprecedented investment of $10 billion into housing - the bulk of which is geared toward building more homes and tax breaks for new buyers.

The planned spending comes at a desperate time for Hamilton, where the average price of a residential property has eclipsed $1 million for three consecutive months.

Hamilton is a great example of a place that used to be known for a level of affordability that is now stunningly out of reach," Trudeau said Friday standing in the backyard of a home on Thayer Avenue. Talk about a neighbourhood like this one where housing prices are $1 million. It just doesn't make sense."

Standing alongside Finance Minister Chrystia Freeland and Hamilton Mountain MP Lisa Hepfner, Trudeau touted the Liberals budget as a path forward to make life - and particularly housing - more affordable for Canadians.

That includes:

• creating a tax-free first home savings account that allows first-time buyers to save up to $40,000;

• bumping the current tax credit for first-time buyers to $10,000;

• curbing speculation by banning foreign property buyers for two years;

• and doubling housing construction in the next decade.

Housing supply just has not kept pace, so we need to build more homes for a growing country and we need to do it quickly," said Freeland, who noted making more federal lands available for municipalities and developers is a simple option to create housing and bolster affordability.

While the banning of foreign investors was welcomed by housing experts, some critics believe more should've been done to target Canadian real estate investment trusts (REITs). The trusts often treat residential properties as hardline investments, hiking rents and pushing tenants out.

In response to a question from The Spectator, Freeland said the feds will review the tax treatment of REITs to suppress the financialization of the housing market.

We are committed to acting; we're also committed to doing it carefully," she said, noting that properties should be homes for families, not a speculative financial asset. But make no mistake: We are going to act because this is a problem for Canadians."

Forty per cent of the housing budget - or $4 billion - will be used for a new housing accelerator fund" intended to slash red tape for municipalities to accelerate developments. Trudeau expects the program will create some 100,000 units by 2027.

There's a ton of money there for municipalities, and that's something as councillors we always complained about - that is, we need more money from the feds and the province," said Chad Collins, former Ward 5 councillor and current Hamilton East-Stoney Creek MP.

Collins said the influx of fresh funding could see municipalities get new electronic filing systems to speed up application processes and construction on projects. Critically, it will help shrink Hamilton's record high" affordable housing wait list of about 6,000 households, a list Collins added has been trending in the wrong direction for some time."

It is perhaps no surprise the Liberals picked Hamilton as their first post-budget announcement visit, a city home to one of the most volatile housing markets in the country, west Mountain councillor John-Paul Danko said standing on Thayer Avenue.

Unless you have parents that are able to help you out, it's pretty much impossible" to break into the market, said the Ward 8 councillor. There's no question that the affordability of housing in Hamilton is top of mind for so many families."

Danko said he's encouraged by the huge" federal budget and the government's commitment to affordability. But talk is talk, he said - it's action that's needed.

I think it depends on how they target the funding. The funding is available, but it's still unclear what that's going to be used for exactly."

Sebastian Bron is a reporter at The Spectator. sbron@thespec.com