fbpx

HOMEPORTAL

Menu

Blogs

What You Should Know About the Toronto Vacant Home Tax

Blogs / / / , , , , , , ,

What You Should Know About the Toronto Vacant Home Tax The Toronto Housing Affordability Task Force has proposed a new 1% vacant home tax that could go into effect as soon as the beginning of 2022. The Toronto City Council voted in favor (24-1) in December to implement the tax levy on vacant homes in order to increase the housing supply, thereby opening the housing and rental markets and to generate post-pandemic tax revenue for Toronto in order to fund necessary affordable housing projects throughout the city. After the law is enacted, homeowners will have to declare annually by the due date whether or not their home is vacant, and the city may conduct an audit to confirm the status of the property. Now, city officials propose wrapping up public consultations so that the tax can go into effect on January 1, 2022, with the first annual property declarations in regard to the 2022 taxation due in 2023. A staff report published this week describes the vacant home tax as a policy tool that “encourages the conversion of units that are being held vacant into ones that are occupied” by addressing “housing market disparities between the lack of rental housing on the one hand and readily available empty homes on the other.” As stated in the report, the primary goal of the tax is to decrease the number of vacant homes that could be used to meet the growing demand for affordable housing. A secondary benefit of this tax is the revenue it generates for the city from people who choose not to live in their own homes, which could be used to subsidize the construction of more low-cost rental units. The goal of the tax is to encourage homeowners to keep their homes occupied or, if they choose to let them sit empty, to alter their habitation patterns. The proposed starting tax rate is 1% of the property’s assessed value, as proposed by the staff. If the assessed value of a vacant home is $1,000,000 in 2022, for instance, the owner would be required to pay $10,000 in annual tax. Staff wrote in the report, “It can be reasonably assumed that some owners of vacant properties may seek out tenants in 2021 to avoid paying the tax.” The effective taxation date of the tax is January 1, 2022. Workers believe the COVID-19 pandemic may have contributed to the reasons why so many Toronto homes have been abandoned. The City claims that until the tax declaration and audit process is fully implemented and carried out in early 2023, it will not be possible to determine the exact number of vacant homes in Toronto. Suppose 1% of Toronto’s housing stock is vacant and subject to the tax, at a 1% tax rate on average Toronto’s current value assessment. In that case, the vacant home tax could yield $55 to $66 million in (gross) tax revenue per year, based on data from a similar tax in Vancouver as a proxy for Toronto. How will the vacant home tax work? Each year, homeowners will have to verify for themselves whether or not their property is zoned for residential use. This will determine whether or not the vacant home tax applies to the property. Household property owners have no further obligations. Vacant property owners must pay a tax equal to one per cent of their property’s current market value (CVA). If a home was unoccupied in 2022, the owner will have to start paying the tax the following year in 2023. How to declare? The tax declaration form for homeowners can be filed electronically. One can also opt for the traditional paper version. According to Toronto, tax notices will be mailed out in March and April, with May 1 as the deadline for making payments. Exemptions The tax does not apply to some houses that are vacant. Examples of such cases are: A fatality in the home Occupancy is prohibited due to a court order because the primary resident is a patient in a hospital or resident in a nursing home. Owner currently resides outside of the Greater Toronto Area but will need to use the property for at least six months of the year due to work-related relocation. Adjustments and refurbishments Authorized change of legal ownership Ratehub.ca’s director of content, Penelope Graham, advised those who have received tax exemptions or who might otherwise fall through the cracks to maintain regular contact with local government. She stressed the importance of keeping in touch with the local government and staying one step ahead of any potential problems. Possible Fines Penelope Graham, advised homeowners to submit on time to avoid hefty fines ranging from $250 for late submission to $10,000 for submitting a false declaration. In a phone interview with BNNBloomberg.ca on Monday, she warned homeowners that the city is “quite stringent” in terms of fines if they don’t comply. Those who fail to file a declaration may also be subject to the full Vacant Property Tax. Overdue tax payments will accrue interest at a rate of 1.25 percent per month for as long as the payments are late. In the event of nonpayment, Toronto has stated that they will assess a penalty against the property owner. The City of New York should implement a tax on empty homes as a means of easing the housing shortage. Joe Cressy, a member of Toronto’s city council, said that the tool has been used effectively in other cities. More than fifth fewer empty homes were found in Vancouver after the city instituted a vacancy tax. Cressy argued that lowering Toronto’s vacancy rate would increase the number of rental units available to those who make their living in the city rather than just flipping them for a profit. Based on tax data from Vancouver, the new law has the potential to bring in $55 to $66 million annually, although it is currently unknown how many homes in Toronto are vacant. In addition, the federal government has declared its

What You Should Know About the Toronto Vacant Home Tax Read More »

Canadian real estate prices rise for the first time in almost a year

Blogs / / / , , , ,

The fundamentals of the underutilised housing tax The real estate market in Canada has been experiencing a precipitous decline; could this trend soon reverse? According to the latest figures from the Canadian Real Estate Association (CREA), the average price of a home across the country rose in February. Since the beginning of the rate increases almost a year ago, the benchmark price of the national composite has not increased. While a single price hike cannot be considered indicative of a rising trend, it may indicate that buyers believe monetary policy will no longer affect prices. A $7,000 increase in the price of Canadian real estate Last month, real estate prices in Canada reversed their downward trend and rose for the first time in nearly a year. In February, the overall average increased by 1.0%, or $7,100, to $715,400. Despite the increase, prices are still 15.8 percent (-$133,900) lower than they were during the same month in 2017. It’s hard to miss the absence of price increases for homes over the past 11 months. A record 12-month decline in annual growth was recorded in 2018 Those who only looked at the annual growth rate probably didn’t notice the shift because of the base effect skew. The 12-month movement of the benchmark dropped by 3 points in February compared to the previous month. A month of price increases wasn’t enough to match the enormous increase seen the year before. Even accounting for inflation, this resulted in the steepest decline in annual growth rate in history. Rising House Prices in Canada As of this February, the average price drop for a home that was on the market in March of 2022 has been 16.9 percent, or -$145,600. The record decline came to an end in February thanks to a rise of $7,100. Keep in mind that one month’s data does not constitute a trend, and neither do price changes. Nevertheless, buyers who have been on the fence might want to take note of a reversal in the trend. This development is being driven by a shift in buyer attitudes, not by changes in supply. Perhaps there is a dearth of stock? Well, not exactly; restrictions were eased the previous month. The prefered measure of inventory absorption in the industry, the Sales to New Listings Ratio (SNLR), dropped to 56.7% in February, down from 57.2% in January and down 20.2% from February of last year. This quotient is priced reasonably given the level of demand, and thus falls within the “balanced” range of the market. The pressure was eased because sales dropped much more rapidly than inventory. Is it shortage of supplies? If not, what else could be driving up prices? A shift in opinion is cited as the reason for the recent success in Toronto. The “pause” in interest rates announced by the Bank of Canada (BoC) in January was interpreted as the market’s recognition of the interest rate’s peak. The Governor’s explanation, in which high levels of consumer debt played a role, carried more weight because debt levels don’t drop like a rock. When they admitted they were struggling, the market took that as a sign of weakness. This view is likely to harden in the wake of the current bank run crisis in the United States. While there is still the possibility that low rates will stimulate demand and, in turn, inflation. Even though no one expected double-digit inflation in the early 1980s, it was sparked in part by an early relaxation of policy. Related posts 18 March 2023 Canadian real estate prices rise for the first time in almost a year The fundamentals of the underutilised housing tax The real estate market in Canada has been experiencing… 18 March 2023 The fundamentals of the underutilised housing tax The fundamentals of the underutilised housing tax There has been some confusion over who will be required… 07 March 2023 Is the Buggy Light Justified? Is the Buggy Light Justified? Everyone knows that bugs that fly are drawn to light. We can’t stand… 07 March 2023 Three common components tips for new homeowners Three common components tips for new homeowners The convenience of having a low-maintenance lifestyle… 01 March 2023 Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor If you want… 28 February 2023 Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s… 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency…

Canadian real estate prices rise for the first time in almost a year Read More »

The fundamentals of the underutilised housing tax

Blogs / / / , , , , ,

The fundamentals of the underutilised housing tax There has been some confusion over who will be required to pay the new underutilised housing tax (UHT) since the federal government announced it as part of the 2021 federal budget. In a nutshell, the UHT is a tax of one percent on the value of vacant or underutilised residential real estate owned by non-residents who are not Canadian citizens or permanent residents. Bruce Ball, FCPA, vice-president of taxation for CPA Canada, warns that while the tax is generally aimed at non-residents of Canada, many may not know that there are situations where the rules could apply to Canadian citizens or Canadian residents (referred to as Canadians henceforth). He explains that while most people won’t have actually to pay the tax, they will still have to file a tax return and claim an exemption. UHT: What is it? As Ball puts it, this is “basically a housing tax” levied by the federal government on non-residents in cases where a property is not being used as intended. For more information on the UHT and its requirements and exemptions, check out this post from the tax blog of CPA Canada. UHT regulations mandate annual reporting and impose a tax equal to 1% of the market value of a home. There are three types of homeowners in regards to their UHT reporting and tax obligations: those who have no responsibility, those who are required to file a UHT return and pay tax, and those who are required to file a UHT return but have no tax payable due to an exemption. In cases where a return or payment is due, April 30 is the date by which it must be submitted (although the deadline for 2022 returns will be May 1 since April 30 falls on a Sunday) To whom does this rule apply? Under the UHT, a non-resident may be required to pay tax on any residential property they own that is unoccupied or underutilised. Despite the government’s best intentions, Ball warns that Canadians may be affected by the UHT if it is imposed on non-residents. “Don’t think that because you’re not a resident that the UHT doesn’t affect you. A person may be required to file if they own a home in a name other than theirs, or face a fine of $2,500 to $5,000. Ball gives the example of a mentally ill person living in a house owned by Ball’s brother, who is acting as trustee. “Even if the individual was living there permanently and the brother is Canadian, a UHT return would still have to be filed because the property was held in trust by the brother,” he says. Even though an exemption may apply, the brother is still required to submit a tax return. For Canadians, other areas of concern include trusts used as will substitutes, farm properties, and vacation properties held in trust. While tax may not be due in any of these cases due to underlying Canadian ownership, failing to file a return that includes a claim for exemption will result in a penalty. Ball notes that the issue of shared ownership of single-family homes is raising some eyebrows. In other words, do they own the property jointly or form a legal partnership to do so? While this may not be a major consideration when calculating your personal income tax, it could be a deciding factor when determining if you are required to file the UHT. As such, it is essential to ascertain whether or not a partnership exists, and the reasons for either conclusion should be recorded. Who has to file it? There will be some groups that don’t have to file at all, and there will be some groups that have to file but not pay tax, so the UHT rules are confusing, according to Ball. “Excluded owners” are “individual Canadians who own property directly,” he explains. Publicly traded Canadian corporations, certain trusts (such as a mutual fund trust, real estate investment trust, specified investment flow-through trust, or estate controlled by the executor), registered charities, cooperating housing corporations, municipal organisations and other public institutions and government bodies, Indigenous governing bodies or corporations, and “prescribed persons” not yet defined by r are all excluded owners. Where are the exceptions? For other ownership structures, where they are not excluded owners, the situation becomes more convoluted. As was previously mentioned, a return is needed and an exemption for a specified Canadian corporation, specified Canadian trust, or specified Canadian partnership is generally available in situations where indirect ownership involves a corporation, trust, or partnership where the underlying ownership is Canadian (in Part 6 of the UHT form). For the most part, non-resident owners are obligated to file the UHT return and are either exempt from or subject to the tax. To help out non-locals, the tax is waived for those who use the home as their primary residence, for their partner, or a dependent student attending a local university. In addition to the aforementioned exemptions, there are exemptions based on the residential property’s accessibility, location, or intended use. How can the accountant help Certified Public Accountants (CPAs) can assist their clients in determining whether or not their ownership situation falls under the UHT rules, and in making sure they fully understand the potential filing and/or tax implications of such a determination.”Many Canadian property owners don’t understand the UHT, or in some cases, even know it exists,” says Ball. He suggests that homeowners investigate the possibility that they own a piece of property that will be regulated. If you want to avoid paying fines that aren’t necessary, “it’s essential that you get up to speed on the UHT,” says Ball. To get started, I recommend consulting with your tax preparer. Related posts 18 March 2023 The fundamentals of the underutilised housing tax 07 March 2023 Is the Buggy Light Justified? Is the Buggy Light Justified? Everyone knows that bugs that fly are drawn to light. We can’t stand… 07 March 2023 Three

The fundamentals of the underutilised housing tax Read More »

Is the Buggy Light Justified?

Blogs / / / , , , , , , ,

Is the Buggy Light Justified? Everyone knows that bugs that fly are drawn to light. We can’t stand it when they buzz around and hit our light fixtures over and over again. They leave after the lights go out, which is good. What if they don’t, though? What if they decide to live in your light fixtures for good? In their first year as homeowners, a couple, Dave and Donna, had to deal with this problem. Small bugs were able to get into the light fixture and stay there even after their own lights went out. Dave and Donna thought that a problem with their light fixture caused this ugly problem and that their new home warranty would cover it. When their builder said no, the couple decided to put it on their warranty form at the end of the year and seek help. How to fix the problem of bugs The exact procedure for resolving an issue with a light fixture will vary according to the nature of the malfunction. Turn off the power to the light fixture: Ensure the light fixture’s power is turned off at the circuit breaker or fuse box before doing any maintenance. Inspect the fixture: Examine the light fixture to see if there are any obvious issues, including a cracked lens or frayed wires. Look around for spider webs or other detritus that could indicate an insect problem. Clean the fixture: Remove dust and insects from the light fixture with a soft brush or vacuum. Replace any damaged parts: If you detect broken pieces, such as a cracked lens or frayed cables, you should replace them. Hardware stores are a good place to look for spare components. Check the wiring: Inspect the connections of the wiring within the light fixture to ensure everything is wired correctly. It is your responsibility to reconnect any cables you find loose or otherwise unattached. Test the fixture: Turn the power back on and test the fixture to verify it is working properly after any repairs. If the issue persists or you lack experience working with electrical components, you should seek the assistance of a professional electrician. Related posts 07 March 2023 Is the Buggy Light Justified? 07 March 2023 Three common components tips for new homeowners Three common components tips for new homeowners The convenience of having a low-maintenance lifestyle… 01 March 2023 Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor If you want… 28 February 2023 Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s… 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency… 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession,… 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a…

Is the Buggy Light Justified? Read More »

Condominium homeowners

Three common components tips for new homeowners

Blogs / / / , , , , , ,

Three common components tips for new homeowners The convenience of having a low-maintenance lifestyle is a major selling point for a condominium for homeowners. Not to bother about yard work, gardening, or pressure cleaning the driveway. Yet, this does not give you the licence to disregard the shared spaces in your building completely. Discover the common elements Homeowners of a condominium share ownership of the common features, which include the building’s infrastructure, grounds, and amenities. This includes anything outside of your apartment: Laundry rooms Fitness rooms and pools Garages Roofs Gardens Lobbies Utility systems (e.g., heating, cooling, electrical, security) Hallways Walkways and steps to building entrances Elevators There are also “exclusive-use common elements,” which are used in a way that is different from their more common counterparts. Patios, balconies, and parking spots all fall within this category. Since these features are shared amongst multiple units, only the owners of the units directly adjacent to them can use them. Go to your Disclosure Statement or recorded Declaration and Description if you are unsure of the location of your unit’s borders in relation to common areas. Condominium fee information Each unit of homeowners in your building must contribute to the overall expense of upkeep and repair of the building’s common areas. Condominium dues are typically calculated monthly based on the size of your living space. Other monthly housing expenses must be taken into account besides the mortgage and property taxes. Common area upkeep is included in your monthly condo fee and includes things like landscaping, waste collection, recycling, outside window cleaning, snow removal, carpet cleaning, and energy payments. Condominium dues can include funding for the maintenance and upkeep of shared areas. Your condo association dues include money set aside in case of emergency repairs or replacements. In rare instances, however, additional funds from property owners may be required.home Learn your warranty’s terms and conditions Condominiums may qualify for warranty protection under Ontario’s New Home Warranties Plan Act, which might apply to individual units and the building’s shared infrastructure. Tarion will hear warranty claims from both individual unit owners and the condo association itself in regard to the unit’s individual components and the common areas. The period of interim occupancy, which can run anywhere from a few weeks to a few months, begins when you move into your unit and ends when you become the registered owner. When you move in temporarily, the warranty protections for your unit will kick in. It’s possible that the rest of the building won’t be done during your temporary occupation time before registration. During this time, your builder will finish the communal areas and any remaining units. Until the condominium project is registered, the warranty period for the common areas will not begin. Thus, your coverage will be inadequate during this time. Your home is still warranted even though the warranty has expired. Hence, if you see something in the common areas that you think needs fixing, let the property management know so that they can get in touch with the developer. The Common Element Building Performance Standards might help you figure out if the builder’s warranty covers your problem. Suppose your builder isn’t addressing your complaints. In that case, you can create an ad hoc committee of three to five unit owners who will communicate with Tarion’s common components warranty team on your behalf if the builder doesn’t. If you’re new to condo living, the shared areas can be especially challenging to figure out. Related posts 07 March 2023 Is the Buggy Light Justified? Is the Buggy Light Justified? Everyone knows that bugs that fly are drawn to light. We can’t stand… 07 March 2023 Three common components tips for new homeowners Three common components tips for new homeowners The convenience of having a low-maintenance lifestyle… 01 March 2023 Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor If you want… 28 February 2023 Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s… 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency… 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession,… 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a…

Three common components tips for new homeowners Read More »

Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor

Blogs / / / , , , , , , , ,

Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor If you want your custom-built new home in Ontario to be covered by the province’s new home warranty programme, you must hire a contractor or builder registered with the province as a new home builder and seller. Do you plan to construct your ideal home in 2023? If so, you could have already begun seeking a contractor to help you realise your vision. It is important to protect yourself from things like construction flaws, scams, and more. Therefore, it’s crucial to familiarise yourself with the standards governing new house construction before you get too deep into the design phase. Included here is everything that your custom home builder must do. Beginning from the time they break ground to the time you move in. When interviewing potential builders for your project, it is important to take the time. Ensure to go over these points to ensure you are speaking with the correct person Get a registered builder and supplier of new houses The Home Construction Regulatory Authority is responsible for issuing licences to home builders and real estate agents in Ontario (HCRA). Your builder needs a licence before he can sign a contract with you. Checking a builder’s licencing status and warranty history is easy with the help of the Ontario Builder Directory. Tarion registration is a must All new homes in Ontario must, with rare exceptions, be registered with the Tarion warranty programme before construction can begin. Enrolling your home in a warranty programme gives you access to benefits. This include financial reimbursement for losses if your builder fails to deliver as promised before the home is finished. You can verify your home’s enrollment with Tarion through the HCRA’s Ontario Builder Directory as well. Have a legally binding contract drawn up, including any applicable warranties Your new home purchase agreement should contain a Warranty Information Sheet that summarises the coverage provided by the builder and any additional warranties you may purchase. Before signing any real estate transaction, it is wise to have it evaluated by an attorney Have a last walkthrough before the scheduled delivery date Pre-delivery inspections (or PDIs) are conducted before a home is officially handed over to the buyer. This is done to document any issues with the home’s condition prior to delivery, such as items that are missing, incomplete, damaged, or not functioning as they should. You can also get answers to your inquiries concerning the care and maintenance of household goods at this time. At this point, you should also receive a copy of your warranty certificate from your builder. Provide a warranty on the new construction After you accept ownership, you have seven years to make a claim on the builder’s workmanship and materials warranty. Coverage for items like code violations and major structural flaws is included. Your builder must promptly investigate and resolve any issues you bring to their attention that are covered by the warranty. The time, effort, and resources required to construct a bespoke home are substantial. Your chances of having a successful building project increase significantly if you are familiar with the regulations in advance and check to see that your builder is adhering to them. Related posts 07 March 2023 Three common components tips for new homeowners Three common components tips for new homeowners   The convenience of having a low-maintenance lifestyle… 01 March 2023 Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor If you want… 28 February 2023 Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s… 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency… 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession,… 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and…

Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Read More »

Canada’s population growth driven by underutilized immigrants without shelter: RBC

Blogs / / / , , , , , ,

Canada’s population growth driven by underutilized immigrants without shelter: RBC Canada’s immigration success is wasted. RBC found that immigration drives most growth. They email investors that immigrants are younger and better educated than Canada’s domestic workers. They were more likely to be overqualified for their employment and have poorer housing. If Canada doesn’t change course, its problems will worsen Canada Needs Immigration Talent Lottery Wins Canada’s aggressive immigration agenda works. From 2010 to 2019, 7 immigrants per 1,000 individuals arrived. It tops the G7, surpassing Canada. It’s demographic time bomb makes it good. Canada hopes immigrants will solve its demographic cliff. Immigration drove 90% of population growth in 2021. Statistics Canada predicts 100% immigration-driven growth by 2050. Deaths would outnumber births without immigration. As they retire, the ageing population leaves a skill deficit. Canada wants 1.5 million immigrants in three years. It hopes half are skilled economic migrants. That should reduce near-record job openings and wage-related inflation. Immigrants bring demand and dependents, making it harder. “Indeed, new immigrants can fill unfilled positions, but they also stimulate demand for housing and consumer goods which in turn enhances labour demand,” argues Nathan Janzen, assistant chief economist at RBC, Canada’s largest bank. Furthermore, “higher levels of immigration alone won’t ‘fix’ longer-run structural labour supply issues—but they’ll help. Immigrant skill sets could benefit even more if well utilised.” Canada’s Immigrants Are Smarter Than Locals Canada is the immigration lottery winner—young and educated. Around a third of the bank’s customers hold advanced degrees. Only 20% of domestic workers have advanced degrees. Immigrants tend to study innovative fields. Janzen writes that immigrants with higher education are more likely to major in STEM subjects (science, technology, engineering, and math) than non-immigrants. Canada Wins, but Immigrants Lose Canada, like many lottery winners, wasted its wealth. Immigrants are often underutilised or overqualified. Underutilized immigrants outnumber non-immigrants 29.8% to 4.5%. Janzen added, “By our count, immigrants with a degree in those subjects are six times more likely to work in positions that do not require comparable expertise. “Proper integration of their abilities might address workforce shortages, add to a more productive labour force, and counter rising pressure on inflation and housing Immigrants in Canada are more likely to live in substandard housing Immigrants are more likely to suffer from Canada’s housing problem. The immigrants (16%) are more than twice as likely as non-immigrants (7%) to live in substandard housing. Immigrants were also more likely to spend over 30% of their income on shelter (21% vs. 13%). Underutilization may also contribute to this issue. Immigrants in Canada Have Poorer Dwelling The bank advises authorities use labour utilisation to capitalise on immigration. Policies encourage skilled migrants. Yet, domestic employers don’t value those skills. If they’re doing manual labour, attracting an accountant is pointless. “Proper integration of their abilities might help alleviate worker shortages, add to a more productive labour force and counter rising pressure on inflation and housing,” adds Janzen. Related posts 01 March 2023 Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor 28 February 2023 Canada’s population growth driven by underutilized immigrants without shelter: RBC Want to Build on Your Own Land? Here Are Five Things You Can Count On From Your Contractor Canada’s… 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency… 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession,… 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and… 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t…

Canada’s population growth driven by underutilized immigrants without shelter: RBC Read More »

Canadian real estate price

Fitch Expects World’s Biggest Real Estate Price Correction in Canada

Blogs / / / , , , , , ,

Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency predicts deteriorating conditions for the Canadian housing market. The most recent client risk assessment from Fitch Ratings for the mortgage bond market has been withdrawn. According to the agency’s report, soaring global real estate prices are likely to correct, with Canada braced for the largest boom and crash in history. The delinquency rate is expected to rise due to rising mortgage rates and worsening economic conditions. However, not to levels observed before 2020. Canada’s real estate market had one of the largest booms and subsequent busts The Canadian housing market had one of the world’s most dramatic price increases. There was a sharp increase of 41% in home prices from 2020 and 2022, when they peaked. Only the United States (+43%) showed a more rapid increase; thus, this increase was still impressive. This rapid increase has led to inflated prices, which the agency believes will eventually correct. The firm predicts a 15% drop in Canadian home values from peak to trough. Australia (-16%) is predicted to take a larger hit, but this is still the agency’s second largest prediction correction. According to the agency’s calculations, Canadian home prices will have been 29% overvalued by the year 2022. They anticipate a rapid reduction in the overvaluation in the next months. This would be as a result of rising salaries, falling home prices, and stable interest rates. Yet, they are not optimistic that the overvaluation will disappear entirely. This is particularly in Toronto and Vancouver. They can still absorb significant damage Delinquencies will increase when mortgage payments increase As a result, some households are feeling some financial strain as a result of rising mortgage payments. The organisation discovered that the typical monthly payment for a borrower with a fixed-rate mortgage had increased by $300. Those with adjustable rate mortgages were hurt harder, with a $700 monthly hike. However, certain indicators suggest that media portrayals of the potential economic effects are exaggerated. Variable rate mortgage borrowers are safer, and many households have seen their savings grow. Just about a third of families have mortgages, and Fitch estimates that seventy percent of them are on fixed rate periods of five years or longer. Only a tiny percentage of the market is vulnerable to an increase in the overnight rate. Moreover, there are ways to cushion the blow, such as extending loan amortisations. Yet when the economy is in a downward spiral, it’s inevitable that defaults will increase. The agency projects that by 2024, the mortgage areas rate will have increased by 64 percentage points. Thus, reaching 0.23 percentage points. This is a substantial increase from recent years, yet it is still below than levels seen before 2020. If sales have been slow for a long time and then suddenly pick up, the increased pace may give the impression of a major shift. Since 2020, the system has been warped by low-cost lending and default-prevention aid. Once that credit is used up and defaults normalise to non-stimulus conditions, it is expected that defaults and sales will revert to their levels prior to 2020. The only variable they didn’t account for in their forecast was price. In the opinion of experts, the drop in home prices hasn’t yet corrected the overvaluation. These forecasts, the agency said, assume the United States will see a moderate economic slowdown. Due to the tight nature of the trade relationship, the severity of a downturn in the United States is a consideration. They warn that Canada‘s strength could be put to the test if the situation in the United States worsens Related posts 28 February 2023 Fitch Expects World’s Biggest Real Estate Price Correction in Canada Fitch Expects World’s Biggest Real Estate Price Correction in Canada A major credit rating agency… 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession,… 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and… 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t… 28 January 2023 How To File A Warranty Claim And What You Can Anticipate How To File A Warranty Claim And What You Can Anticipate There has been a recent surge in the population… 28 January 2023 Three Improved Ways to Understand Your Warranty Three Improved Ways to Understand Your Warranty Purchasing a home in the pre-construction phase can be…

Fitch Expects World’s Biggest Real Estate Price Correction in Canada Read More »

Despite the slowdown, Canadian mortgage debt continues to rise

Blogs / / / , , , , , ,

Despite the slowdown, Canadian mortgage debt continues to rise Despite the housing market recession, Canadians still have a serious addiction to mortgage debt. According to Stat Can, the sum of outstanding mortgage loans reached a new high in December of 2022. Even while the rate of increase in mortgage credit has fallen to its lowest point in years, it is still significantly higher than it was before 2020. With a GDP as large as Canada’s and expanding at a much quicker rate, it continues to be a cause for concern. Total Canadian mortgage debt exceeds $2 trillion The mortgage debt in Canada continued to grow by billions towards the end of last year. In December, the total amount due reached $2.08 trillion, an increase of 0.1%, or $3.0 billion. Compared to last year, this is a $137.8 billion (7.1%) rise. The fact that one-third of a very small population is responsible for so much debt is cause for alarm in and of itself. But the rate of expansion is slowing down. When interest rates rise, mortgage borrowing in Canada slows dramatically Mortgage credit is being slowed by slowing real estate sales and rising rates. In February of 2022, a month before the initial increase to the overnight rate, annual growth peaked. Every month since then has seen slowing, culminating in December’s reported rate of 7.1%. Since October of 2020, it has been declining at an ever-faster clip. Mortgage Debt Continues to Outpace Productivity Despite Slower Growth Please keep in mind that slowing down is not the same thing as being slow. The amount of mortgage credit that is currently outstanding continues to grow at an abnormally rapid clip. The rate in December was still 1.4 percentage points above the average for the five years preceding to 2020. Even though its size is comparable to GDP, its growth rate is substantially higher. Increase in Mortgage Debt in Canada Slowly but surely, rising interest rates are putting an end to Canada’s mortgage binge. But if mortgage lending expands faster than GDP, consumer spending would inevitably fall. In a nutshell, the unproductive financial economy is stifling the productive economy, which is terrible for long-term expansion Related posts 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise. 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and… 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t… 28 January 2023 How To File A Warranty Claim And What You Can Anticipate How To File A Warranty Claim And What You Can Anticipate There has been a recent surge in the population… 28 January 2023 Three Improved Ways to Understand Your Warranty Three Improved Ways to Understand Your Warranty Purchasing a home in the pre-construction phase can be… 28 January 2023 Can I Have A New Home Warranty Even If It’s Not New? Can I Have A New Home Warranty Even If It’s Not New? Did you buy a previously owned house recently?…

Despite the slowdown, Canadian mortgage debt continues to rise Read More »

Canadian real estate

StatCan: Nearly Half of Canadians Worry About Shelter Costs

Blogs / / / , , , , , , ,

StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a few dollars away from financial disaster. Canadian Social Survey Quality of Life and Cost of Living for Q3 2022 findings were recently released by Statistics Canada (Stat Can). Nearly a third of households struggle to make ends meet because of the cost of the living problem, with young adults bearing the brunt of the uncertainty. Particularly difficult have been the skyrocketing costs of both buying and renting a home, with nearly half of Canadians concerned about their housing affordability. Canadian inflation is reaching a generational high The rate of inflation in Canada is among the highest it has ever been. The increase in the CPI of 10.9% in 2022 was the highest since 1982. Following a 2021 increase of 6.8%, which was more than three times the targeted pace, we now see this. Transport (+10.6%), food (+8.9%), and housing (+6.9%) all showed the highest price increases, according to Stat Can. It has put a lot of people in Canada in a tight spot, especially young individuals. One of the hardest-hit demographics in Canada is the country’s youth The cost of living increase has affected all households, especially young adults. A recent survey found that 35% of American families struggled financially in the previous 12 months. Individuals between the ages of 45 and 54 accounted for the second largest percentage, after those between the ages of 35 and 44 (46%). Those over the age of 65 had the lowest rate of reporting financial hardship at 25%. Nevertheless, one-quarter of Americans citing financial hardship is a sizable proportion. One-quarter of Canadians would have trouble paying a $500 emergency bill One in four (26% of all households) can no longer afford to pay for a $500 emergency due to the rising cost of living. That skews towards younger households, with the biggest share (35%) among those between the ages of 35 and 44. Those between the ages of 45 and 54 were the next most likely to report being unable to cover a modest unexpected expense (31%), while those 65 and older were the least likely (19%). Almost Half of Canadians Worry About Housing Costs Housing was the primary concern because Canada has one of the world’s most overheated real estate markets. Nearly half of the households (44%). Reported worrying about meeting their housing costs. Those between the ages of 15 and 24 had the highest rate (58%), followed closely by those between the ages of 25 and 34 (56%). Of all age groups, those 65 and up had the lowest percentage of worry about housing expenses (27%), but that’s still 1 in 4 people. Young folks are already feeling the effects of the housing affordability crisis. According to Stat Can, housing expenses affected 44% of adults aged 25 to 34. These families either had to uproot because of a change in circumstances or because of the high cost of maintaining their living arrangements. Less than 15% of households headed by someone 45 or older selected this option. Nearly half of Canada’s population under the age of 45 now faces difficulties meeting their basic housing needs. Because of the crushing financial burden of home ownership, even fewer young persons are likely to consider making the investment. Related posts 18 February 2023 Despite the slowdown, Canadian mortgage debt continues to rise. 15 February 2023 StatCan: Nearly Half of Canadians Worry About Shelter Costs StatCan: Nearly Half of Canadians Worry About Shelter Costs Many Canadians worry that they are only a… 30 January 2023 How can homeowners safeguard against title fraud? How can homeowners safeguard against title fraud? There are new reports of title fraud every week, and… 30 January 2023 Bank of Canada will increase rates, and leave room for more: BMO Bank of Canada will increase rates, and leave room for more: BMO One possible reason why we won’t… 28 January 2023 How To File A Warranty Claim And What You Can Anticipate How To File A Warranty Claim And What You Can Anticipate There has been a recent surge in the population… 28 January 2023 Three Improved Ways to Understand Your Warranty Three Improved Ways to Understand Your Warranty Purchasing a home in the pre-construction phase can be… 28 January 2023 Can I Have A New Home Warranty Even If It’s Not New? Can I Have A New Home Warranty Even If It’s Not New? Did you buy a previously owned house recently?…

StatCan: Nearly Half of Canadians Worry About Shelter Costs Read More »