Christopher Liew: Party platforms vow housing affordability fixes. But are they realistic?

A real estate sign showing homes for sale is seen in Montreal on Monday, March 24, 2025. THE CANADIAN PRESS/Christinne Muschi

Christopher Liew is a CFP®, CFA Charterholder and former financial advisor. He writes personal finance tips for thousands of daily Canadian readers at Blueprint Financial.

Are you tired of feeling like you’re overpaying for housing?

From high rental costs to home prices outpacing incomes, housing affordability is one of the defining issues of the 2025 federal election. In big cities such as Toronto and Vancouver, even modest homes are out of reach for many in the middle class, while renters across the country face record-high costs and shrinking vacancy rates.

Both the Liberal and Conservative parties have made promises to address the issue, but each has a different approach.

Below, I’ll provide a brief outline of each party’s approach and my opinion on the most realistic outcomes should one party or the other win the election.

Snapshot of the current housing crisis

For many, the dream of homeownership is slipping further out of reach. Earlier this March, the CREA reported that new home listings plunged by 12.7 per cent and that national home sales dropped by 9.8 per cent month-over-month, stating that recent economic uncertainty regarding tariffs could be a contributing factor.

Renting isn’t much easier, as rising home values continue to drive rental rates up. Recently, the national average rent for a one-bedroom apartment climbed to more than $1,900 a month.

In major cities such as Toronto and Vancouver, where the average home prices are more than $1 million, renters’ incomes must be well above the national average to qualify for a mortgage.

A key factor here is Canada’s population growth outpacing the housing supply. This rapid population expansion has largely been driven by high immigration levels. From 2016 to 2021, Canada’s population grew by 5.2%, with immigration accounting for nearly four-fifths of this increase, according to Statistics Canada.

New construction hasn’t been able to keep up, especially when it comes to the more affordable and rental sectors. As a result, vacancy rates are low, bidding wars are common, and young families are finding themselves stuck in the rental market as the wealth gap expands.

What the Liberals are promising

Prime Minister Mark Carney has placed housing at the centre of the Liberal campaign, pledging to tackle affordability for both renters and first-time homebuyers.

Carney’s plan includes a new GST rebate on newly built homes purchased by first-time buyers, up to a value of $1 million. This measure could save qualifying buyers tens of thousands of dollars on the purchase of a new home, especially in cities where most entry-level properties now exceed $500,000.

He’s also promised to double Canada’s non-profit community housing, including co-op housing, aiming to build four million new homes by 2035 by working with cities to cut red tape and reduce development fees. To support this goal, the Liberals would expand skilled trades training and invest in modular and prefab housing technologies.

Some other promises regarding housing affordability include:

• Investing in innovation and construction productivity to increase home building speed
• Reducing taxes related to building and new construction

What the Conservatives are promising

Conservative leader Pierre Poilievre has also made housing affordability an important matter in his campaign. His approach is heavily focused on removing “gatekeepers” in the government that he blames for driving up prices and slowing construction.

The Conservatives are proposing a full GST exemption on new homes up to approximately $1.3 million, applying to all buyers - not just first-time buyers like the Liberals have promised to do. The goal is to make homebuilding more attractive for developers and to lower costs for a wider range of buyers, especially in high-priced markets.

Poilievre also pledges to tie federal infrastructure funding to actual housing growth, penalizing those municipalities that don’t meet aggressive housing growth targets and rewarding those that do. He would fast-track approvals, loosen zoning restrictions around transit hubs, and encourage higher-density building.

Unlike the Liberals, the Conservatives’ plan offers less direct support for renters or low-income households. Instead, they’re adopting a more market-driven approach, assuming that boosting overall supply will bring down home prices and rents for everyone over time.

Final thoughts

Meaningful change will likely take years, no matter which party wins the next election.

In a nutshell, Carney and the Liberals are planning a co-ordinated, government-supported push to build millions of homes and expand non-profit housing, while Poilievre and the Conservatives aim to cut red tape and taxes to unleash the private sector to increase housing supply.

Each of these approaches has merit. The key here is follow-through. It’s easy for candidates to make bold claims for headlines to garner support. However, backing promises with a solid plan of action is the only way to truly make a difference in the coming years.

Even in a perfect system, homes still take time to build and infrastructure must also be built up to support new housing. So don’t expect drastic changes in the next year or even two years. We’ll most likely begin to see the cumulative effects of these strategies in the longer course of five to 10 years.