LAKE LOUISE, AB, March 8, 2013 /CNW/ - The federal government should
refrain from further intervention in the housing markets by adjusting
mortgage lending rules, the Canadian Home Builders' Association (CHBA)
In his inaugural address to the 70th National Annual CHBA Conference here, Incoming President Deep Shergill
of Calgary said that such intervention represents "a hammer" that
impacts all housing markets, both those that are healthy and those yet
to fully recover from the recession.
He called on the government to be prepared to take remedial action if
housing activity falls below demographic demand or if price stability
"It seems less than forthright to constrain consumers' ability to buy a
new home - a real asset, while allowing usurious credit card interest
rates to bury many consumers in non-asset backed debt," Mr. Shergill
He said working to maintain a stable financing environment would be one
of seven priorities in his plan of action for the coming year. The
others are regulation, government-imposed costs, a skilled and
productive workforce, land availability, market intelligence and
investment in research and development.
Mr. Shergill said Canada Mortgage and Housing Corporation (CMHC) has
played a central role in maintaining stability in mortgage markets
since the financial meltdown of 2008. "We are extremely pleased that
the federal government recognizes the Corporation's continued
The industry's success in improving energy efficiency illustrates the
benefits of collaboration with government in research and development.
A CHBA analysis of the energy performance of an Ottawa home built in
1975 compared with one built today shows a 66 per cent improvement.
Comparing similar models of family cars over the same period showed a
maximum improvement in energy efficiency of 16 per cent.
"When it comes to energy efficiency, new home builders have outperformed
the auto industry by a factor of four," Mr. Shergill said.
Mr. Shergill said it's time to roll back the chronic over-regulation of
the new home building industry. He cited personal experience to
illustrate one aspect of bad regulation.
He said he was able to launch his own business 22 years ago with
$18,000. "Today, in some jurisdictions, I'd need closer to $1 million
to do the same thing - 55 times as much capital. Simply put, today an
ambitious young builder cannot enter the industry easily, if at all."
Government-imposed costs are pushing house prices ever higher and must
be rolled back and reduced, Mr. Shergill said. "So long as governments
persist in confusing the effect of low interest rates with real housing
affordability they will fail to recognize the steady erosion of housing
The same pressures that add to the cost of a new home also inflate the
value of existing homes, with no value-added. As a result there is a
multiplier effect through the resale housing market every time a new
charge, fee or levy is applied to new development.
In some urban centres the relationship between house prices and
household incomes has reached a crisis point.
The growing underground economy is also a result of the rising tax
burden on housing.
In consultations on the federal government's plan for long-term
infrastructure, Mr. Shergill said the CHBA has pointed out that calls
for new development to pay its own way deflect from the failure of
politicians to invest in basic infrastructure over many decades.
"What some call an infrastructure deficit should more correctly be
recognized as a legacy of failed leadership. Requiring new development
to pay for bad decisions in the past is unacceptable."
The CHBA hopes the next federal budget will outline a national plan for
infrastructure investment that will give priority to housing
affordability and choice.
Mr. Shergill, a member of CHBA since 1998, is President of Prominent
Homes Ltd. of Calgary.
The Canadian Home Builders' Association (CHBA) is the national voice of
the residential construction industry, representing more than 8,000
member firms across the country. Membership comprises new home
builders, renovators, developers, trade contractors, building material
manufacturers and suppliers, lenders and other professionals in the
SOURCE: Canadian Home Builders' Association
For further information:
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After March 9: 613.230.3060