Housing market is active but will slow in summer as it ALWAYS does..

Much has been written about the Canadian housing market.  Even more about greater Toronto and Vancouver.  The pessimists are waiting for a collapse.  The optimists are hoping the prices keep going up.  Then there’s the realists.  They would like to see the market slow and maybe even for prices to go down, so that we don’t have a housing bubble. Which one are you?

When it comes to the housing market, I’m a realist.

Every Spring, for the last 10+ years, the real estate market in Canada heats up.  Prices increase, they sell faster, and supply can’t keep up with demand. It’s become the norm.  In June, July and August, the market gets very quiet and prices go down.  That’s right, they actually go down.

This year was no different except for 2 things..  Supply was very low in January, February and March, causing selling prices to jump as much as 20% over last year in some markets.   Now, let’s look more closely.. Read the rest of this entry »

Toronto 15% Foreign tax, new Rent controls… it changes nothing!

15% Foreign home buyers tax, not a big deal

Last year, Vancouver introduced a 15% foreign homebuyers tax.  I predicted it would come to Toronto after 6 months.

Today, Ontario’s govt has copied Vancouver by introducing a 15% foreign homebuyers tax.   The hope is this will discourage foreign investors from buying and speculating on the Toronto housing market (by the way, there is no data to prove that foreign investors are a factor or contributing to the red hot housing market).

Vancouver tried this last year. But what happened?  The amount of sales slowed, but just temporarily. And house prices didn’t really drop.  This year, Vancouver house values are up over 3% and climbing.   Read the rest of this entry »

Housing bubble is coming… again?

You’ve seen them before.. but they went silent for a few years.  I’m talking about the housing bears.  The pessimists that say house prices are too high and will crash.  A housing bubble.

Are they right?  Maybe.  But here’s the thing.  We’ve been hearing that house prices are too high for over a decade.  One of the more vocal pessimists is David Madani, Economist for Capital Economics.

HOUSING BUBBLE?

Madani was on BNN this past week saying we are in a ‘Full blown housing bubble’.   Hmmm, that sounds familiar.  Let me think… when did I hear that before?  Oh, that’s right, 2011.   He said, we could see house prices drop by 25% in 2011.  And he was completely wrong. (hope you didn’t listen to him). Read the rest of this entry »

Panic buying? When will the housing market slow down?

 

hot-housing-marketHouses selling over asking price is becoming the norm, these days.  Kinda crazy.  Sometimes a house is just listed under market value to attract a frenzy of buyers. An old tactic that has worked well in larger urban markets.  Today, that tactic is being used in smaller communities, too.

What’s unclear is if this selling tactic is contributing to houses selling for more than they’re worth.  And what is a home worth, anyway?   I always thought a house was worth what someone was willing to pay in the open market.  That’s still true in most cases, today.

When I see reports of houses selling for $100k, $200k and $300k over asking, it makes me wonder.  How long will this market last?  Will it crash?  And if so, when?   It’s hard to make forecasts and I can’t see into the future, but let’s examine this a little.

WHEN WILL THE HOUSING MARKET CRASH? Read the rest of this entry »

Finally, a tax break on Lander transfer tax.

ontario-govt

Did you get a larger Land Transfer Tax rebate?

If you bought a home this year, and you’re a first time home buyer, then you’ll pay less tax..   The Ontario provincial govt has doubled the rebate from $2,000 to $4,000.   The rebate is for qualified first time home buyers only.

They also eliminated Land Transfer tax on the first $368,000 of the purchase price for first time home buyers.    Hey, this is good news.  And I applaud the govt for giving for giving first time buyers a break.

They also increased the Land Transfer Tax for homes over $2million.  Here’s the old and new tax tables.

“Old” Ontario Land Transfer Tax Rates
Home Purchase Price             Tax Rate
Up to $55,000                                 0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                 1.5%
Above $400,000                             2.0%

And here’s the new formula…

“New” Ontario Land Transfer Tax Rates
Home Purchase Price             Tax Rate
Up to $55,000                                 0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                 1.5%
$400,000 to $2-million                2.0%
$2-million and over                       2.5%

Enjoy the savings..

Kinda strange..  Remember when the Kathleen Wynne govt was considering allowing other municipalities, other than Toronto, to introduce a new land transfer tax?   NO?  Well, I do.. and you shouldn’t forget it either.. click here to remember..  Keep this in the back of your mind .. Let’s hope this isn’t some sort of strategy to catch us with our guard down..

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 steve@mortgagenow.ca

Mortgage brief.. CMHC ‘red warning’.. what’s it mean?

red-warningMuch has been made about CMHC’s Economists ‘Red Warning’ that was put out for the 4th quarter of 2016.  Let’s take a look at what the report actually says.

CMHC’s economists have 3 categories of measurement that are of concern.  Overheating, Price acceleration and Overvaluation.

VANCOUVER AND TORONTO

The Vancouver market had already been identified by CMHC as having moderate Overheating and Price Acceleration and Strong Overvaluation.    Toronto now has the same issues with the same Overall Assessment of Strong evidence of problematic conditions.

Put another way, CMHC believes the Toronto and Vancouver housing markets are vulnerable.   While this is cause for concern, there was also some other info in the report that we should be probably not overlook… Read the rest of this entry »

Mortgage Brief…BC’s 15% Foreign property tax coming to Toronto?

BC waterfrontAnd it begins in Vancouver… the long-awaited, little debated foreign property tax is about to begin.

Foreigners wanting to buy in Vancouver will need to add 15% to the purchase price..  Put another way, this adds $150,000 to the purchase price of a $1,000,000 property.

The new tax begins August 2nd.   The provincial BC govt says they want to ensure that home ownership remains within the reach of the middle class.  And if it doesn’t then, they say, it has created a new revenue stream.

MY THOUGHTS… Read the rest of this entry »

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