You can probably handle paying an extra $49 bucks, but George Affleck points out that over the past 10 years the city budget has grown 30% while population has grown 9%.
The $1.32-billion draft 2017 budget was released late Wednesday afternoon. It includes a 3.4 per cent property tax increase and other increases for utility, recreation and permit fees.
The city says the increases will go towards greater costs for existing services that are in line with inflation and new expenditures in other areas like social housing, security and the arts.
According to the city, the property and utility fee increases will amount to an extra $49 in costs for a median homeowner in Vancouver.
Read the full article over at the CBC.
The BC government has announced that they will fund $500 million of affordable housing projects in the province using money brought in via property transfer taxes and the new foreign buyer tax.
Real estate related taxes are now the single largest revenue generator for the BC government, surpassing the 1.2 billion from gambling and all individual resource industry taxes. In fact, when you combine all resource industry taxes the cumulative figure only exceeds real estate tax income by a few decimal points.
The BC real estate economy is possibly the finest example of a perpetual motion machine in existence. Taxes raised via real estate goes into buying and building more real estate. Win-win!
Good news for your monday morning!
If Canada saw a ‘US-style housing crisis‘ the big 6 banks could generate enough capital in a few quarters to cover losses.
If Canada were to experience a U.S.-style housing crisis, with house prices falling by up to 35 per cent, mortgage lenders including the country’s big six banks could lose nearly $12 billion, according to a new report from Moody’s Investors Service.
CMHC would also take a hit of about $6 billion if they challenge and reject claims, but if they decided not to they would take about half the loss as it would be more evenly split between the banks and CMHC.
You probably don’t have to worry about a US-style nationwide housing crash, because we have a different mortgage market that is explicitly backed by the government. The main concern would be rate increases and job losses as Canadian debt loads continue to increase:
There was almost $1.6 trillion in mortgage debt outstanding at the end of March, including home equity lines of credit, more than double the amount outstanding 10 years ago.
Read the full article over at the Financial Post.
There’s a new budget in BC and it includes some changes aimed at the real estate market.
For the first time the government has decided to start collecting data on foreign buyers and are offering a break on property transfer taxes for new construction under $750k.
The changes will see buyers save up to $13,000 from B.C.’s property transfer tax if they purchase a newly built home, condo or townhouse valued under $750,000, as long as they are Canadian residents who live in the home for at least a year. The tax break starts today.
It’s designed to boost the supply of new home construction and give people a helping hand to enter the market, said Finance Minister Mike de Jong. But it won’t cool the market enough for those who say they can’t afford to live in the Lower Mainland.
“If by cool you mean actually reduce the value of people’s major asset, their home, clearly we were not interested in taking that step,” said de Jong.
The tax break will be offset by a one-per-cent increase to the property transfer tax, to three per cent, on luxury homes that sell for more than $2 million.
Critics say the budget amounts to half-measures from a government that’s stuck between not wanting to intervene directly in the housing market and needing to look responsive to public frustration.
Read the full article over at the Vancouver Sun.
Bull! Bull! Bull! pointed out this article in the Vancouver Sun.
The ratesupermarket.ca survey of 1,700 Canadians found 52.8 per cent of Canadians overall cannot afford to start or expand their families, with 46.4 per cent of millennials sayings their existing debt was making it impossible, even before considering a mortgage.
Benjamin Tal, deputy chief economist with Canadian Imperial Bank of Commerce, thinks there’s no question household formation is being impacted by prices. “Common sense tells you it makes sense. We have an affordability crisis in large parts of the country. In these types of cases, people either stay in the basement (of their parents) but they definitely don’t buy a house. We know in the United States for sure this happened.”
Infrastructure in cities has not kept pace with density, as evidenced by some Toronto condominium developments posting signs warnings parents that their children might not be able to get into local schools because of overcrowding.
As Bull! Bull! Bull! points out, that’s not really a big deal because Vancouver isn’t a family town anyways:
that’s ok. young ppl can live in condos, ride bikes, instagram their breakfast, experiment with facial hair, smoke lots of pot and generally act like they never moved out of residence. (showers are optional). they’ll be happier anyways.
Read the full article here.