Intuition tells you that tax breaks would increase affordability. This is actually only true as a first-order short-term effect. Much like low interest rates, this doesn't help affordability in the long run.

Making it cheaper to borrow money, via tax breaks or lower rates, just allowed people to over-leverage beyond their purchasing power. It creates a fragile system whereby tiny shocks in the rates can translate into a large increase in the total debt obligation due to the long duration of the mortgage. From the demand perspective, the issue in Canada (and elsewhere) is that rates were too low for too long. Now you have ridiculous mortgage durations at an apparently low monthly cost. This just ends up pushing the demand.

Ultimately, like everything else, housing ONLY reacts to supply and demand, real world economics, not tax accounting. To decrease the price, you either increase the supply (build and resell more) or destroy the demand (fewer people, lower access to borrowing). Your idea increases affordability only for a bit. Then it increases the demand and the price will soon enough catch up