As the election draws near, federal party leaders are pitching housing policies that promise to help millennials find a way out of their parents’ basements — but some of those “well-intentioned” platforms risk leading those voters down the garden path, says the head of one real estate company.

Royal LePage CEO Phil Soper has watched millennial consumption trends for years. Unlike their parents, the generation aged 22 to 37 is less inclined to own depreciating assets like cars or electronics, he said. But one value they share is the desire to own a home.

“They have come to a conclusion that owning a property is one of the things a well-balanced, successful family does in life,” said Soper.

Policies that promise to make home ownership easier are, therefore, deeply appealing to the group that is partnering and having children.

But policies making it easier to buy risk, boosting the demand for housing, that is already in short supply in big cities like Toronto. It could potentially push up the price of a product that is already prohibitively expensive for many millennials, he said.

The federal Conservative Party has promised to ease the mortgage stress test that makes it harder for consumers to qualify for a loan. The Tories and NDP both pledge to lengthen amortization terms from 25 to 30 years, a move that would bring down monthly payments.

“It is important to realize that most people don’t buy homes based on the sticker price of the home. They acquire it based on their monthly payments,” said Soper.

Those lower monthly payments would boost demand, but that needs to be balanced on the supply side of the housing market, he said.

“Without corresponding policies to increase supply, you’re going to have prices shoot up and you could well find yourself erasing any of the benefits you saw from the lower monthly payments — the home price goes up, resulting in the same or higher monthly payments because you’ve artificially stoked demand,” said Soper.

The Liberals are also promising to help home buyers by extending the buying power of its First-time Homebuyers Incentive in some cities. But the interest-free loan program isn’t big enough to have a material impact on the market, he said.

“Its appeal appears to be quite limited and therefore it’s not going to be inflationary,” said Soper.

A Royal LePage report released Thursday forecasts that Canadian home prices will rise by 1.5 per cent in the fourth quarter. In the Toronto region, where third-quarter prices rose 3.7 per cent year-over-year, prices are expected to increase a further 0.1 per cent in the final quarter. That will bring the median home price — including all kinds of houses and condos — to $859,301 by year’s end, according to the report.

Loading... Loading... Loading... Loading... Loading... Loading...

Soper wants to know what politicians are planning to do to make sure that when people rush out there’s a home to buy. Affordable housing deserves more attention, although he said it should be built on incentivizing tax policies rather than public funds.

“I wish there was more attention paid to what it’s going to take to ensure our cities have enough places for our people to live — rent or own,” he said. “Thirty per cent of our nation are renters.”