Wednesday, November 2, 2011

Sask Party and NDP Offer Misguided Housing Policies

  • The NDP and Saskatchewan Party are both promising financial incentives for
    first time home buyers, while the NDP is also promising a gst rebate for home
    builders on construction of houses under $280,000.

  • Incentives for home purchases inflate the housing market temporarily.
    Evidence from the US shows that home prices declined by $15,000 after their
    $8000 home buyers tax credit expired.

  • The tax rebates to home builders will do nothing to reduce home prices,
    since prices are set by supply and demand, not the cost of inputs. In a tight
    real estate market, the savings will not be passed on to consumers, and will
    amount to a subsidy for home builders.

  • Saskatchewan should follow the lead of US jurisdictions that have maintained
    housing affordability during economic booms. Cities such as Houston and Atlanta
    have experienced explosive growth while maintaining lower housing prices than
    Regina or Saskatoon by maintaining sensible housing regulations.

  • Read it all:

    Sask Party and NDP Offer Misguided Housing Policies: FCPP - Frontier Centre for Public Policy

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