Category Archives: economy

Liberals could help millennials buy homes

Real estate sales are good for the economy, but what happens when prices get too high for young family incomes and borrowing costs increase?

Perhaps it’s time for the Government to step in?

Finance Minister Bill Morneau said earlier this week Ottawa is exploring measures to make home ownership affordable for more millennials, a generation made up of people who are now in their mid-20s to late-30s.

Morneau didn’t elaborate on what options he’s considering, but Canadians could learn more in the coming weeks when he releases an election-year budget that will also lay out Liberal platform commitments.

Major political parties have already started positioning themselves on the complex area of housing affordability. It will likely emerge as an important campaign issue ahead of October’s federal election, and the challenges of millennials and first-time buyers could attract a lot of attention.

Some lenders have ideas for some helpful changes:

“There’s a lot of folks that just don’t qualify to purchase anymore at the bottom end of that ladder,” said Paul Taylor, president and CEO of Mortgage Professionals Canada.

Taylor said the stress tests have succeeded in taking some of the froth out of the market and he believes the time has come for Ottawa to loosen them. In recent meetings with federal officials, he said he has recommended the reintroduction of insurance on 30-year amortization mortgages as a targeted way to help people at the lower end.

The coming weeks would be a good time for some changes with the busy spring season is approaching, he said.

“If we have another cool spring market, that’s going to have serious knock-on effects to the economy,” said Taylor, who was encouraged by Morneau’s comments.

Read the full article here.

Vancouver Sales hit 18 Year low

If you were hoping 2019 would kick off with a booming real estate market… well, it’s not going so well.

“After three or four years of a very robust market and escalating prices, this certainly seemed to be a year of transition. We went from more of a sellers’ market, to a balanced market, and now — a buyers’ market.”

The drop in benchmark price for a detached home accompanied a drastic slump in sales, year-over-year.

The total number of homes sold across Metro Vancouver in 2018 dropped 31.6 percent from 2017, with 24,619 transactions.

That’s the lowest number recorded in the region since 2000, and 25 percent below its 10-year average.

Read the full article here.

Happy New Year! The Real Estate Market in 2019

It’s the beginning of a whole new year and that means it’s time for expert predictions about the Real Estate market in 2019:

From the Professor:

“My guess is 2019 will not be a banner year for sales in Greater Vancouver and I expect further price declines,” said Tom Davidoff, an associate professor at UBC’s Sauder School of Business.

From the Accountant:

Historically, the real estate industry has been a “laggard” when it comes to embracing technology, says Frank Magliocco, a partner at PwC Canada who specializes in the housing market.

“But I think what you’re going to see now is a fairly significant ramp up in embracing that technology once it becomes more mainstream,” he said.

“It’ll be increasingly important to remain and be competitive in the marketplace. Once you see these technologies prove out, you’ll see more and more adoption.”

On Quantative Tightening:

When it comes to reversing their crisis-era bond buying, central bankers are focused on the destination. Traders in risk assets care more about what could be a painful journey.

The tension may prove even more consequential in 2019 now that the European Central Bank is stopping — though not yet unwinding — asset purchases. Bank of America Corp. analysts say liquidity from the developed world’s four major central banks will contract by $200 billion next year, driving volatility in the riskier markets that thrived under quantitative easing.

From the Real Estate Salespeople:

Even though British Columbia is expected to lead the country’s year-over-year decline in home sales in 2019, the provincial average resale price will rise slightly, according to a national real estate forecast published December 17.

The average sale price of a B.C. home sold on the Multiple Listing Service next year will be $720,000 – a rise of 0.9 per cent over 2018’s figure, predicted the Canadian Real Estate Association (CREA).

Your predictions for 2019

Ever felt like telling the future?

What do you foresee happening to the local economy an housing market in 2019? Where will interest rates go?

The Bank of Canada seems to think we’re not in for hot growth and are keeping rates flat for the moment.

A couple of brokerages predict prices will stay flat or decline only slightly in 2019.

The general consensus and safe bet is to predict a status quo situation.  No major drops or increases in the market.  That sound about right?

CRA Freezing and Seizing Tax Cheat Assets

The CRA is now using ‘proceeds of crime’ provisions to freeze assets and seize property of tax cheats.

Tassé said the proceeds-of-crime provisions can also be used to seize property outside of Canada. For example, if the CRA believes that someone has engaged in offshore tax evasion and used the proceeds to buy a vacation home or a yacht, the CRA could freeze or seize those assets.

Using the proceeds-of-crime provisions also can block tactics used by some tax evaders, such as declaring corporate bankruptcy to avoid paying the taxes, said Tassé.

Read the full article here.