Well it’s been a year since the BC government brought in a ‘foreign buyer tax‘ in the Vancouver metro area. How’s that affected the market?
“The public perception is that it hasn’t brought down prices and has had no effect,” said Simon Fraser University professor Josh Gordon, a political scientist in the university’s school of public policy. “But the slowdown in price increases is a positive.”
Even before the tax was implemented, Mr. Gordon said it was unlikely to have a huge impact since it was not targeting all foreign money, much of which comes in with new immigrants who are not affected by the tax.
He and others have always said that the province – or country – would need to add many more measures: more investigation into the sources of money coming into the country; more rigorous pursuit of people avoiding capital-gains tax on their real-estate transactions; a more comprehensive tax that targets people not paying income-tax in Canada.
Mr. Gordon believes that, if the lack of dramatic impact from the tax proves anything, it’s that people in Vancouver have a profound belief that the market will continue to rise.
Read the full article over at the Globe and Mail.
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.
New government, new housing mandate.
In your role as Minister of Municipal Affairs and Housing I expect that you will make substantive progress on the following priorities:
- Partner with local governments and First Nations to develop a community capital infrastructure fund to upgrade and build sports facilities, playgrounds, local community centres, and arts and culture spaces.
- Through partnerships with local governments, the federal govenrment, and the private and not-for- profit sectors, begin to build 114,000 units of affordable market rental, non-profit,
co-op, supported social housing and owner-purchase housing.
- Create new student housing by removing unnecessary rules that prevent universities and colleges from building affordable student housing.
- Amend the Residential Tenancy Act to provide stronger protections for renters, and provide additional resources to the Residential Tenancy Branch.
- With the Minister of Finance, deliver an annual renter’s rebate of $400 dollars per rental household to improve rental affordability.
- Work in partnership to develop a homelessness action plan to reduce the homeless population through permanent housing and services. As part of the plan, conduct a province-wide homelessness count.
- Work with the Minister of Finance to address speculation, tax fraud and money laundering in the housing market.
- As the Minister responsible for TransLink, support the Mayors’ Council 10-Year Vision for Metro Vancouver Transportation by funding 40%of the capital costs of every phase of the plan, in partnership with all levels of government.
We suspect many people reading here are disappointed that Eby isn’t the housing minister and are curious to see how that second to last point turns out. You can read the full letter here.
An article over at the province says that real estate sales in Vancouver and Toronto have slowed, but don’t expect prices to follow:
“We’ll still have very lofty prices in Toronto and Vancouver. If we’re expecting the market to become instantly affordable that’s not going to happen. Given the low interest rates and rapid population inflow, they will still be expensive markets but we’re moving away, thankfully, from the days where there was incredible pressure for buyers to get in before prices grew another 40 per cent,” Bank of Montreal senior economist Douglas Porter said.
read the full article here.
In Canada ‘middle class’ currently seems to mean ‘deep in debt’ and rate hikes are a looming threat on the middle class :
For one view of Canada’s rate hike, consider the case of David and Neera. He can’t get a raise, is worried about retirement and they borrowed money a couple years ago to fix the roof. Interest costs will jump now, with vacations and kids’ clothes already out of reach.
Justin Trudeau’s entire economic agenda is aimed at David and Neera — we know, because he invented them. Their story anchored the Liberal government’s debut budget, tying together the impact of all the prime minister’s measures. Now they’re a cautionary tale.
“Canadian families are also taking on more debt to make ends meet,” the 2016 budget said. “For David and Neera, this debt is a constant source of worry.”
Read the full article over that the Financial Post.