The Canadian Mortgage and Housing Corporation keeps on giving the national real estate market it’s worst possible rating. You can probably guess which cities get singled out as the most at risk:
CMHC’s valuation is part of its quarterly Housing Market Assessment, something the Crown corporation calls an early warning system, alerting Canadians to areas of concern developing in housing markets so that they may take action in a way that promotes market stability.
In terms of the 15 individual markets studied, CMHC said it saw strong evidence of overall problematic conditions in Victoria, Vancouver, Saskatoon, Hamilton and Toronto – the same five markets singled out a quarter ago.
CMHC defines problematic conditions as imbalances in the housing market that occur when overbuilding, overvaluation, overheating and price acceleration, or combinations of those issues exceed historical norms.
Read the full article here.
With interest rates going up there’s good news and bad news for housing. It can make it tough for people who are stretched thin financially, but might be good news for people waiting to buy:
The people who will benefit are those who have a nest egg and have been waiting for the right time to buy a home, he said.
“The real winner here is somebody sitting on a $800,000 down payment who says I’m going to wait for prices to fall.”
Overall, interest rates will continue to rise, added Brander. He predicts mortgage-lending rates could increase by several percentage points in the coming years. But as long as those increases are incremental, like Wednesday’s announcement, the economy will be able to absorb it, he said.
Seems like it’s always a good time to be sitting on an $800k down payment, but maybe we’re just optimists. Read the full article here.
Looking to cheat on your real estate transaction taxes? Bad news, the CRA has decided it doesn’t want you to and is coming after real estate tax cheats.
From April 2015 to March 2017, the CRA audits of real estate transactions resulted in more than $329.4 million in assessed income that had not been reported. During this time, the CRA applied over $17 million in penalties, primarily associated with Canada’s two major real estate markets in Toronto and Vancouver.
Canadians work hard for their money and the Government of Canada recognizes that many families count their principal residence as both their home and most valued asset. The CRA will continue to strengthen relationships with key partners such as provinces, territories, and municipalities to further expand, obtain, and exchange information on real estate transactions, thereby enhancing the CRA’s ability to combat tax evasion and avoidance.
17 million in penalties? That’s almost enough to buy a fixer-upper on the north shore!
Canada’s economy is booming, expanding at a 3.7% annual rate in the first quarter. And yet…
Meanwhile, in a year when stocks are rising everywhere, Canada’s benchmark index is the second-worst-performer in the developed world after Israel, according to Bloomberg data. It’s a similar story in currency and bond markets.
The performance underscores how, even with the improving economic performance, caution prevails. Investors remain concerned about geopolitical risks such as U.S. trade protectionism, the outlook for oil prices and a housing market that some analysts say may be on the verge of a correction.
“It is a tad curious to say the least that the Canadian economy arguably has been one of the bigger pleasant surprises in 2017 and meanwhile the equity market has done a belly flop,” said Doug Porter, chief economist at Bank of Montreal, who highlighted the disconnect between Canadian growth and market performance in a May 26 note.
Energy shares are down 10 percent year-to-date, while fears about contagion from a run on deposits at troubled mortgage lender Home Capital Group Inc. have weighed on financial shares, which are down 1.2 percent.
Read the full article over at Bloomberg.
Some people love the foreign buyer tax, some people hate it, but at least one person thinks it was a conflict of interest for the finance minister to enact it only in Metro Vancouver when he owns investment properties just outside that boundary:
The one home and six investment properties that belong to Mike de Jong in Abbotsford are worth almost $1 million – a significant investment that rose in value relative to similar properties inside Metro Vancouver, records suggest.
That puts de Jong in a conflict of interest when handling the province’s controversial real estate file, says Duff Conacher of Democracy Watch.
“Given that the finance minister has significant real estate investments, I don’t think he should have been taking part in this,” Conacher said.
“He would have to recuse himself or sell his properties. It has to be one or the other. He can’t have a private interest and take part in decisions about his properties.”
But de Jong tells CTV News he had nothing on his mind except doing his job when he moved and voted for the tax in the B.C. Legislature.
“The decision was based exclusively on the analysis of the data,” he said outside a Liberal caucus meeting.
Read the full article over at CTV news.