Can the federal government restore housing affordability without a big drop in home values?
Federal housing minister Gregor Robertson’s remarks this week on housing affordability and where prices need to go once again revived a debate on how buying a home can become a realistic goal for younger Canadians.
Speaking before the House of Commons finance committee yesterday, Robertson stopped short of calling for a drop in individual home values – but suggested average housing costs needs to move lower.
“We need to see average prices of housing for Canadians come down. We have to build a lot more non-market housing to bring down that average cost,” he said, responding to a question from Conservative MP about whether he believes prices need to slide.
In May, Robertson indicated he didn’t think a drop in prices was needed to improve the homebuying outlook and focused on boosting affordable housing as a solution.
But while Prime Minister Carney’s government has rolled out a series of new measures aimed at accelerating homebuilding and increasing supply, Robertson’s comments on the matter haven’t been well received within the mortgage industry.
Butler Mortgage founder Ron Butler said in a Tuesday LinkedIn post that Robertson was attempting to appeal to both homeowners who’ve seen their property values soar in recent decades and young Canadians priced out of the housing market, “with a ridiculous lie.”
Asked about Robertson’s comments on housing affordability in May, Carney said there was no “yes or no” answer to the question of whether home prices in Canada need to fall.
That approach has sparked criticisms that the government is out of touch with younger Canadians and their struggles in the housing market.
“Go talk to a first-time homebuyer or anybody under the age of 35 and ask them where home prices need to go,” mortgage agent Ryan Sims told Canadian Mortgage Professional in May. “They need to come down.”
Canadian home sales fell 1.7% in September, ending a five-month streak of gains, according to CREA. Senior economist Shaun Cathcart said sales remain high for the month and forecast continued momentum into 2026.https://t.co/vume1B7eG9
— Canadian Mortgage Professional Magazine (@CMPmagazine) October 17, 2025
Did the feds get immigration policy wrong?
Robertson said on Monday that housing market price growth isn’t exactly a new phenomenon, saying it “has increased over many decades” but declining to answer whether he viewed federal immigration policies as a factor behind that trend.
In a keynote address to the Mortgage Professionals Canada (MPC) national conference in Ottawa on Monday, Canadian Imperial Bank of Commerce (CIBC) deputy chief economist Benjamin Tal said the government got it wrong by planning to ramp up immigration at the beginning of this decade.
“In 2023, we screwed up,” Tal said. “We basically accepted 1.5 million people into this country over the course of breakfast. Canada needs immigration like oxygen, but not so fast. One-point-five million in one year is too much. We simply couldn’t handle it. The rental market saw the pain.”
Some federal government measures on the housing and mortgage markets have found more favour among brokers – namely, the expansion of 30-year amortizations to first-time buyers and an increase in the maximum mortgage insurability amount from $1 million to $1.5 million.
“On one hand, it’s not a good thing because it pushes people to take on more debt,” Montreal-based broker Jason Zuckerman told CMP of the longer amortizations. “But on the flip side, it’s a good thing in the sense that it helps increase their borrowing capacity.”
Finding the balance for homeowners and hopeful buyers – no easy task
For now, Carney’s government appears focused on striking a difficult balance between keeping homeowners happy about their property value while also solving the generational affordability crisis facing younger Canadians.
That could prove easier said than done. Affordability improved in 11 major Canadian cities last month, according to Ratehub.ca – but eight of the country’s biggest markets require income over $100,000 to afford an average property.
For Tal, additional steps to change that grim picture could include removing GST on all home purchases, not just for first-time buyers paying a certain amount as currently planned by the federal government.
That could remove some of the hefty additional costs associated with property purchases, he suggested, offering relief across the board.
"Their plan is to remove GST, HST on first-time homebuyers up to $1 million and then $1.5 million at a slower rate," he said. "And I say that's not enough. First-time homebuyers account for about 15% of activity, as you know. You want to make a difference in terms of affordability? Do it [for] everybody. They say, ‘Listen, it’s very expensive.’ I say how expensive it would be not to do it – the price of inaction.”
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