The Bank of Canada held interest rates at 0.5 per cent Wednesday with an assessment of the economy which has some positives tempered with risks.
Governor Stephen Poloz said that while the economy is adjusting to lower oil prices and inflation is broadly in line with expectation, it expects growth in the second quarter to moderate from the first.
The bank is still closely watching high levels of household debt and rising house prices but noted that consumer spending and debt levels are robust and that is spreading broadly across regions.
Macroprudential and other policy measures, while contributing to more sustainable debt profiles, have yet to have a substantial cooling effect on housing markets, the bank said.
In its assessment of the BoC’s announcement, the Conference Board of Canada highlighted the ongoing risk of protectionism and the imbalances in real estate values and rising household debt.
“The subdued pace of inflation and uncertainties stemming from global and domestic risks has the Bank of Canada in wait-and-see mode. The next move in interest rates is likely upwards, but this may not come until early next year.
By then, there will be a greater understanding of how the risks may play out,” said Craig Alexander, Senior Vice-President and Chief Economist, The Conference Board of Canada.
Source: http://www.canadianrealestatemagazine.ca/market-update/interest-rates-held-as-boc-weighs-risks-225937.aspx
Thursday, May 25, 2017
Thursday, May 18, 2017
GMREB cautions against hasty imposition of foreign buyers’ tax
In a statement earlier this week, the Greater Montreal Real Estate Board (GMREB) urged provincial officials to take due diligence before imposing a foreign buyer’s tax similar to that of B.C. and Ontario.
This is because the Montreal market is nowhere near being overheated, and because “the proportion of foreign buyers is quite different in Montréal compared to Toronto and Vancouver.”
“Looking at the dwelling vacancy rate, the pace of price growth, the number of months of inventory, as well as the available data on the percentage of foreign buyers, there is nothing to suggest that there is a situation in Montréal that requires a quick response,” GMREB board of directors chairperson Mathieu Cousineau said.
Fresh data from the Canada Mortgage and Housing Corporation estimated that the share of foreign buyers in the entire Montreal metropolitan area across all property types is only 1.5 per cent, a far cry from the 9.7 per cent proportion in Vancouver and the 4.9 per cent in Toronto.
“Overall, foreign buyers still have little impact on property prices in Greater Montréal. According to our brokers in the field, foreign buyers are present primarily in more well-off markets such as Ville Mont-Royal and Westmount,” according to the GMREB statement.
Cousineau added, however, that “we do believe that there is an urgent need to put in place the means to effectively identify property purchases by foreign nationals. This will enable us to monitor the evolving situation and make informed decisions.”
“It is important not to lump all foreign buyers together. A distinction must be made between foreign investors who buy properties for speculation and foreign buyers who establish their principal residence here,” the GMREB concluded.
Source: http://www.canadianrealestatemagazine.ca/news/gmreb-cautions-against-hasty-imposition-of-foreign-buyers-tax-225643.aspx
This is because the Montreal market is nowhere near being overheated, and because “the proportion of foreign buyers is quite different in Montréal compared to Toronto and Vancouver.”
“Looking at the dwelling vacancy rate, the pace of price growth, the number of months of inventory, as well as the available data on the percentage of foreign buyers, there is nothing to suggest that there is a situation in Montréal that requires a quick response,” GMREB board of directors chairperson Mathieu Cousineau said.
Fresh data from the Canada Mortgage and Housing Corporation estimated that the share of foreign buyers in the entire Montreal metropolitan area across all property types is only 1.5 per cent, a far cry from the 9.7 per cent proportion in Vancouver and the 4.9 per cent in Toronto.
“Overall, foreign buyers still have little impact on property prices in Greater Montréal. According to our brokers in the field, foreign buyers are present primarily in more well-off markets such as Ville Mont-Royal and Westmount,” according to the GMREB statement.
Cousineau added, however, that “we do believe that there is an urgent need to put in place the means to effectively identify property purchases by foreign nationals. This will enable us to monitor the evolving situation and make informed decisions.”
“It is important not to lump all foreign buyers together. A distinction must be made between foreign investors who buy properties for speculation and foreign buyers who establish their principal residence here,” the GMREB concluded.
Source: http://www.canadianrealestatemagazine.ca/news/gmreb-cautions-against-hasty-imposition-of-foreign-buyers-tax-225643.aspx
Monday, May 8, 2017
Mixed-use transit hub project to arise in Waterloo Region
The Region of Waterloo has taken its initial steps in the development of the King Victoria Transit Hub in Kitchener, having launched the first phase of bidding for private developers.
“This high profile project is predicted to change the way people think about Waterloo Region,” the Region stated in its announcement of the large-scale development.
The mixed-use transit hub will incorporate “seamless access to multiple modes of transportation and integrated residential, office and retail space. More importantly, the hub will connect our community to the Toronto-Waterloo Innovation corridor, promoting growth and generating substantial economic development.”
“By creating a landmark stop with space to live, work and shop, the transit hub will offer Waterloo Region much more than a better commuting system,” Regional Chair Ken Seiling added.
The request for qualifications (RFQ) phase is meant to draft a short list of applicants for the final request for proposal. RFQ closes on June 30, and the short list is scheduled to be announced on September 2017.
The Region stated that it will sell the property to the winning bidder, who will be responsible for the construction of the transit hall and related structures.
“Once complete, the transit hub will connect Grand River Transit (local buses), ION (light rail), GO trains, VIA rail, inter-city buses, taxis, pedestrians and cyclists. The onsite buildings will include residences, offices and stores. The site will also incorporate public spaces and transit support areas like pick-up and drop-off areas, bus bays and links to trails/paths.”
Source: http://www.canadianrealestatemagazine.ca/news/mixeduse-transit-hub-project-to-arise-in-waterloo-region-225236.aspx
“This high profile project is predicted to change the way people think about Waterloo Region,” the Region stated in its announcement of the large-scale development.
The mixed-use transit hub will incorporate “seamless access to multiple modes of transportation and integrated residential, office and retail space. More importantly, the hub will connect our community to the Toronto-Waterloo Innovation corridor, promoting growth and generating substantial economic development.”
“By creating a landmark stop with space to live, work and shop, the transit hub will offer Waterloo Region much more than a better commuting system,” Regional Chair Ken Seiling added.
The request for qualifications (RFQ) phase is meant to draft a short list of applicants for the final request for proposal. RFQ closes on June 30, and the short list is scheduled to be announced on September 2017.
The Region stated that it will sell the property to the winning bidder, who will be responsible for the construction of the transit hall and related structures.
“Once complete, the transit hub will connect Grand River Transit (local buses), ION (light rail), GO trains, VIA rail, inter-city buses, taxis, pedestrians and cyclists. The onsite buildings will include residences, offices and stores. The site will also incorporate public spaces and transit support areas like pick-up and drop-off areas, bus bays and links to trails/paths.”
Source: http://www.canadianrealestatemagazine.ca/news/mixeduse-transit-hub-project-to-arise-in-waterloo-region-225236.aspx
Thursday, April 27, 2017
Canadians now more optimistic about home prices - poll
The latest edition of the Bloomberg Nanos Canada Confidence Index saw optimism about home prices reaching an unprecedented high in Canada.
The survey, which is considered statistically accurate within 3.1 percentage points (19 times out of 20), found that 48.5 per cent of the polled consumers see home prices rising in the next 6 months, the highest ratio since mid-2008. The overall confidence index reached 59.1, the highest since March and surpassing the 12-month average of 57.4.
“Bullish sentiment on real estate in Canada continues to drive consumer confidence,” Nanos Research Group Chairman Nik Nanos said.
Ontario tied with British Columbia for the highest confidence on a per region basis, both at 62.9.
The heightened hopefulness came amid new measures enacted by the Ontario government to moderate red-hot price growth in the Toronto housing market. Last week, Ontario Premier Kathleen Wynne and Finance Minister Charles Sousa introduced a 15 per cent foreign buyers’ tax covering the Greater Toronto Area, and permitted Mayor John Tory to charge a levy on vacant properties.
However, the increased confidence stood in stark contrast to the survey’s results on opinions surrounding personal finances. 28.3 per cent of the respondents stated that they were worse off compared to a year ago, while only 18 per cent saw improvements in their pocketbooks.
Source: http://www.canadianrealestatemagazine.ca/news/canadians-now-more-optimistic-about-home-prices--poll-224621.aspx
The survey, which is considered statistically accurate within 3.1 percentage points (19 times out of 20), found that 48.5 per cent of the polled consumers see home prices rising in the next 6 months, the highest ratio since mid-2008. The overall confidence index reached 59.1, the highest since March and surpassing the 12-month average of 57.4.
“Bullish sentiment on real estate in Canada continues to drive consumer confidence,” Nanos Research Group Chairman Nik Nanos said.
Ontario tied with British Columbia for the highest confidence on a per region basis, both at 62.9.
The heightened hopefulness came amid new measures enacted by the Ontario government to moderate red-hot price growth in the Toronto housing market. Last week, Ontario Premier Kathleen Wynne and Finance Minister Charles Sousa introduced a 15 per cent foreign buyers’ tax covering the Greater Toronto Area, and permitted Mayor John Tory to charge a levy on vacant properties.
However, the increased confidence stood in stark contrast to the survey’s results on opinions surrounding personal finances. 28.3 per cent of the respondents stated that they were worse off compared to a year ago, while only 18 per cent saw improvements in their pocketbooks.
Source: http://www.canadianrealestatemagazine.ca/news/canadians-now-more-optimistic-about-home-prices--poll-224621.aspx
Monday, April 24, 2017
Ontario wants to tax foreign buyers, vacant homes
The Ontario government has launched its response to the red-hot Toronto housing market which has spread to other parts of the province.
The Fair Housing Plan aims to tackle supply and affordability issues with 16 key proposals including expanded rent controls and greater collection of data.
The province is proposing a 15 per cent tax on residential properties in the Greater Golden-Horseshoe by by individuals who are not citizens or permanent residents of Canada or by foreign corporations.
The legislation, if passed, would apply from today (April 21, 2017) to transfers of land that contain at least one and not more than six single family residences.
Refugees and nominees under the Ontario Immigrant Nominee Program would be exempt and rebates would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students.
There could also be a tax on vacant homes in Toronto. The proposal is for legislation which would give the City the power to implement the taxation of homes left empty. Other municipalities may also be given the power.
Supply will also be tackled by allowing affordable housing to be built on some of the province’s surplus land; and
other incentives to get developers building affordable and rental units.
Some organizations have been quick to react to the Fair Housing Plan.
"As an insurer of first-time homebuyers, we have seen a growing divergence between what first-time buyers can afford and average market prices,” said Stuart Levings, President and CEO of Genworth Canada. “These measures will help responsible families and individuals achieve their dreams of homeownership while protecting the equity that existing GGH homeowners have invested in their properties.”
Meanwhile, the Conference Board of Canada said that it was time for Ontario to act.
Source: http://www.canadianrealestatemagazine.ca/market-update/ontario-wants-to-tax-foreign-buyers-vacant-homes-224429.aspx
The Fair Housing Plan aims to tackle supply and affordability issues with 16 key proposals including expanded rent controls and greater collection of data.
The province is proposing a 15 per cent tax on residential properties in the Greater Golden-Horseshoe by by individuals who are not citizens or permanent residents of Canada or by foreign corporations.
The legislation, if passed, would apply from today (April 21, 2017) to transfers of land that contain at least one and not more than six single family residences.
Refugees and nominees under the Ontario Immigrant Nominee Program would be exempt and rebates would be available for those who subsequently attain citizenship or permanent resident status as a well as foreign nationals working in Ontario and international students.
There could also be a tax on vacant homes in Toronto. The proposal is for legislation which would give the City the power to implement the taxation of homes left empty. Other municipalities may also be given the power.
Supply will also be tackled by allowing affordable housing to be built on some of the province’s surplus land; and
other incentives to get developers building affordable and rental units.
Some organizations have been quick to react to the Fair Housing Plan.
"As an insurer of first-time homebuyers, we have seen a growing divergence between what first-time buyers can afford and average market prices,” said Stuart Levings, President and CEO of Genworth Canada. “These measures will help responsible families and individuals achieve their dreams of homeownership while protecting the equity that existing GGH homeowners have invested in their properties.”
Meanwhile, the Conference Board of Canada said that it was time for Ontario to act.
Source: http://www.canadianrealestatemagazine.ca/market-update/ontario-wants-to-tax-foreign-buyers-vacant-homes-224429.aspx
Wednesday, April 19, 2017
Higher prices unlikely, even in the very near future - local agents
Canadians who are looking to cash in on the country’s overheated housing market should act now before the market shifts or the government implements more drastic policies, according to real estate agents working in the most in-demand cities.
Sarah Blakely of Toronto recounted the recent sale of her renovated three-bedroom home for more than $1 million, after she and her husband managed to purchase a four-bedroom home in Ottawa. Seven years earlier, the couple spent a little over $300,000 on the sold property.
“My husband and I saw an opportunity to take advantage of the recent gains in real estate and to move to a less expensive city to live mortgage-free, support our savings for retirement and also to be closer to family,” Blakely told CBC News.
Josie Stern, the couple’s agent, stated that the transaction came at just the right time, as it would be unlikely that the home will be able to sell for that much, even in the near future.
“A little bit of air has been let out of the bubble,” Stern said, noting that price growth seems to be cooling a bit—a situation that Vancouver real estate agent Melissa Wu is intimately familiar with.
Wu said that while her recent deals included a $2-million sale for a hundred-year-old home in east Vancouver, the transaction took three weeks to materialize—far longer than it would have last year.
Wu encouraged Toronto homeowners to sell as soon as they can, explaining that their market is in an enviable position at the moment.
“There’s always a shift coming in,” she said. “Sell before it corrects.”
In Royal LePage’s just-released Q1 housing report, recent data suggested that Toronto and Vancouver’s real estate trends have finally diverged after years of mirroring each other.
“For the first time in several years, real estate markets in Vancouver and Toronto are headed in opposite directions,” Royal LePage president and CEO Phil Soper said.
“The Vancouver market stalled, as confused consumers took to the sidelines after a series of uncoordinated moves by all three levels of government. With the housing shortage becoming more acute, Toronto easily stepped forward to assume the title of Canada’s most overheated real estate market.”
Source: http://www.canadianrealestatemagazine.ca/news/higher-prices-unlikely-even-in-the-very-near-future--local-agents-224305.aspx
Sarah Blakely of Toronto recounted the recent sale of her renovated three-bedroom home for more than $1 million, after she and her husband managed to purchase a four-bedroom home in Ottawa. Seven years earlier, the couple spent a little over $300,000 on the sold property.
“My husband and I saw an opportunity to take advantage of the recent gains in real estate and to move to a less expensive city to live mortgage-free, support our savings for retirement and also to be closer to family,” Blakely told CBC News.
Josie Stern, the couple’s agent, stated that the transaction came at just the right time, as it would be unlikely that the home will be able to sell for that much, even in the near future.
“A little bit of air has been let out of the bubble,” Stern said, noting that price growth seems to be cooling a bit—a situation that Vancouver real estate agent Melissa Wu is intimately familiar with.
Wu said that while her recent deals included a $2-million sale for a hundred-year-old home in east Vancouver, the transaction took three weeks to materialize—far longer than it would have last year.
Wu encouraged Toronto homeowners to sell as soon as they can, explaining that their market is in an enviable position at the moment.
“There’s always a shift coming in,” she said. “Sell before it corrects.”
In Royal LePage’s just-released Q1 housing report, recent data suggested that Toronto and Vancouver’s real estate trends have finally diverged after years of mirroring each other.
“For the first time in several years, real estate markets in Vancouver and Toronto are headed in opposite directions,” Royal LePage president and CEO Phil Soper said.
“The Vancouver market stalled, as confused consumers took to the sidelines after a series of uncoordinated moves by all three levels of government. With the housing shortage becoming more acute, Toronto easily stepped forward to assume the title of Canada’s most overheated real estate market.”
Source: http://www.canadianrealestatemagazine.ca/news/higher-prices-unlikely-even-in-the-very-near-future--local-agents-224305.aspx
Monday, April 10, 2017
Surging home prices, lower earnings burden young Ontarians, study says
Next to British Columbia, Ontario is the second worst economy in Canada for younger generations, according to research from youth advocacy group Generation Squeeze.
"No province reports a decline in full-time earnings [for the typical 25-34 year old] since 2003 except Ontario. That wouldn't be so bad if Ontarians' primary cost of living — housing — was also not going up in price," said the lobby group's founder and University of British Columbia professor Paul Kershaw.
According to the report, the standard of living has deteriorated more dramatically for younger people in Ontario in recent years than anywhere else in the country other than British Columbia.
Apart from the decline in full-time earnings, the report cited other indicators:
More difficult home-ownership – It currently takes 15 years on average to save a 20 per cent down-payment on an average-priced Ontario home
Hard work “pays off less” – Typical younger Ontarians have lost seven years of hard work when measured by the amount of labour required to save for a down payment on an average-priced home
Higher debt – Ontario has the third highest per capita provincial debt level ($22,500) in the country
Early childhood vulnerability – Data show that 35,000 children enter the formal school system in Ontario each year vulnerable in ways that mean they are more likely to fail, go to jail and wind up sick as adults.
Kerhsaw also made 10 recommendations to address these concerns, including the revision of tax policy to slow down the rise of home prices. “Surtaxes on foreign buyers are one option now being trialed by the B.C. government in the Metro Vancouver region. A version of this tax could be extended to Ontario and other parts of Canada.”
“Federal and provincial governments should also consider taxing the capital gains that result from the sale of homes purchased within 24 months. This sort of “speculation tax” could be administered with tax rates that decline over time,” he added.
http://www.canadianrealestatemagazine.ca/news/surging-home-prices-lower-earnings-burden-young-ontarians-study-says-223944.aspx
"No province reports a decline in full-time earnings [for the typical 25-34 year old] since 2003 except Ontario. That wouldn't be so bad if Ontarians' primary cost of living — housing — was also not going up in price," said the lobby group's founder and University of British Columbia professor Paul Kershaw.
According to the report, the standard of living has deteriorated more dramatically for younger people in Ontario in recent years than anywhere else in the country other than British Columbia.
Apart from the decline in full-time earnings, the report cited other indicators:
More difficult home-ownership – It currently takes 15 years on average to save a 20 per cent down-payment on an average-priced Ontario home
Hard work “pays off less” – Typical younger Ontarians have lost seven years of hard work when measured by the amount of labour required to save for a down payment on an average-priced home
Higher debt – Ontario has the third highest per capita provincial debt level ($22,500) in the country
Early childhood vulnerability – Data show that 35,000 children enter the formal school system in Ontario each year vulnerable in ways that mean they are more likely to fail, go to jail and wind up sick as adults.
Kerhsaw also made 10 recommendations to address these concerns, including the revision of tax policy to slow down the rise of home prices. “Surtaxes on foreign buyers are one option now being trialed by the B.C. government in the Metro Vancouver region. A version of this tax could be extended to Ontario and other parts of Canada.”
“Federal and provincial governments should also consider taxing the capital gains that result from the sale of homes purchased within 24 months. This sort of “speculation tax” could be administered with tax rates that decline over time,” he added.
http://www.canadianrealestatemagazine.ca/news/surging-home-prices-lower-earnings-burden-young-ontarians-study-says-223944.aspx
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