“My fellow Canadians, Canada has spoken…” you’ve heard the speech before. Okay, now that the party is over, what’s the hangover gonna look like? It’s hard to say for sure. Politicians are infamous for making promises they can’t keep.
One thing that we (I’m talking about anyone with a mortgage or invested in real estate) should be concerned with is what the Liberals plan to do with housing, mortgage rules, interest rates.
Here’s part of what they have promised.. Good and Bad.
BAD– A review of vacant govt lands to build affordable housing.. while that may sound great, it could also be disastrous for existing property owners. Affordable housing usually implies low-cost housing.. and unfortunately, these types of projects negatively affect surrounding neighborhood values. Let’s also hope this isn’t some National rent control platform either… Rent control is a failure in my opinion. The market will dictate rents..
GOOD- This same plan to provide affordable housing could be an opportunity for investors.
GOOD– Relax the RRSP Home buyer savings plan rules to allow for access even if you are NOT buying your first home… this just makes sense and I applaud this. It’s your money. You should be allowed to use it as you like.
BAD- Mortgage rates are expected to rise as the govt increases their spending which means more borrowing and a deficit. The more you borrow, the higher the cost is. I would think Fixed rates will start to climb very soon, BUT don’t expect any major hikes.
NEUTRAL- A review of the Toronto and Vancouver housing market to see how they can slow the price increases and allow for more affordable housing. (I agree that the house prices have increased to beyond the reach of the average person.. however, I don’t like govt controlled housing… and this concerns me.. let the market dictate the values.. it all works out in the end).
Stay tuned as we will continue to monitor and report any announcements and changes.. You can expect a few immediate announcements from Mr. Trudeau. All new Prime Ministers want to make a big splash. Let’s hope he doesn’t cause a tidal wave.
Your best interest is my only interest. I reply to all questions and I welcome your comments. Like this article? Share with a friend.
Steve Garganis 416 224 0114 firstname.lastname@example.org