The red hot market in Toronto and the vicinity continues to nourish the greedy mentality for profiteering; this really hurts those who are in need of owning a roof over their heads.
Almost all other provinces are already in a slowdown mode mainly for correctional adjustment.
Good news and bad news: The red hot market helped the rich become richer but hurt the first time home buyers by ousting them from the market altogether.
Factors leading to rising prices: The laundered foreign money kept on flooding into the Canadian real estate market, hence no inventory remains to be grabbed. In economics it’s a case of supply and demand.
Greed, by its nature, never ends; it makes you strive even harder for more.
No doubt, housing shortage is occurring due to the increase in population of the immigrants. The heavy influx of refugees made it worse.
Buying and maintaining a dwelling in Toronto and the vicinity is out of question for the mediocre and the poor. The qualification criterion has changed immensely. This means buying property in GTA is a dream never coming true for the unfortunate ones who are in majority. Affordability has diminished to a great extent while in a majority of the cases it’s just a memory.
According to estimates by some experts, Toronto home prices have shot up 113 percent since early 2009, while Canadian prices as a whole have jumped 65 percent.
Making Vancouver real estate market available to wealthy Chinese was a way too much as it created more ghost towns. Those houses are not occupied. That resulted in a lesser tax collection due to the said ongoing emptiness.
The property prices in Vancouver are already on ‘a downward-trend’, however, there are stable prices in some cases depending on the location. This happened after the province of British Columbia imposed a 15 percent tax on foreign buyers in that city last August, mostly targeting people from mainland China.
Ontario will soon impose a tax on Toronto properties too, but the premier believes the stable prices will protect the current owners from losing home-values. Nevertheless, Ontario Finance Minister Charles Sousa urged the federal Finance Minister Bill Morneau to consider raising capital gains taxes, among other measures, to rein in speculation.
Fact is Ottawa has repeatedly tightened mortgage lending rules including qualification of the potential mortgage applicant in the past to avoid a housing bubble, but the boiling Toronto market continues to go like crazy.
Now the national market has cooled off, therefore, the developers and other market observers expect the next move from the Ontario government, or perhaps the city of Toronto.
The unethical practices of the regulated professionals are really problematic: The real-estate agents/brokers (mafia) tend to post a listing for an asking price and then encourage a bidding war, this results in attracting a large number of bidders. This leads to an over asking price scenario at the end of the day - unfairly. This becomes an auction style activity which amounts to nothing but cheating.
The culture of multiple offers is against the set procedure, but the agents are involved. They should be held responsible for the activity. All involved will have to face the music when time comes. A ruling from the B.C. Supreme Court is a stark warning about the dangers of buying Canadian real estate from foreign owners. The landmark B.C. Supreme Court verdict has already sent shock waves to the Canadian real-estate market which is all due to foreign investment.
The court took notice of a flaw/loop hole in Canadian laws that often leads foreign owners of real estate in cities such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.
The landmark B.C. decision requires notary public Tony Liu to pay his client more than $600,000 because Liu failed to adequately determine whether the Vancouver house his client was buying for $5.5 million had been owned by a tax resident of Canada. Consequently, the CRA (Canada Revenue Agency) did not get paid, at the time of the sale, the twenty five per cent capital gains tax it charges the non-resident sellers of Canadian property on any profit they make on the sale.
The CRA later demanded the buyer pay the $600,000 in tax. The buyer, in turn, sued Liu, arguing Liu failed to discover the seller was not a tax resident of Canada. The CRA considers people who don’t live in the country at least six months a year and don’t pay income taxes here to be foreign property investors and speculators and thus subject to capital gains taxes. http://vancouversun.com/news/local-news/house-buyer-beware-landmark-b-c-court-ruling-will-shake-real-estate-industry
This ruling has definitely put brakes on the Vancouver market.
People who watch the Toronto market closely say that makes sense, arguing that foreign buyers are a limited factor in driving up local prices. They're pointing to a different, home-grown source of the surge in demand: investors who are buying houses not as a place to live, but as a place to grow their money.
The craze has thrust many would-be investors into a market with a limited housing supply, where they compete with people who want to buy a home to live in, bidding up prices. (Wynne 'looking at all options') CBC News asked the Ontario premier if she is ruling out a foreign-buyers tax for the GTA. She replied, "B.C. has put in place a particular mechanism, we are not going to use that mechanism." Wynne said the "heart of the problem," she wants to tackle is affordability for first-time homebuyers. So, can the provincial government do anything to dampen the effect of investors driving up house prices? Premier Kathleen Wynne says Ontario and Toronto are 'not going to go down the road that British Columbia has gone because it is a different market.' (Chris Young/Canadian Press) "That is a question I have asked," said Wynne. "I don't know whether there's anything that we can do. We're looking at all the options." Wynne says she wants to avoid making any moves that would significantly hurt the value of the homes that people already own.
As the qualifying for getting a mortgage loan has become harder, the government has to take some drastic measures to help all for an appropriate accommodation either through encouraging a rental mentality or providing a cheaper home to enhance buying ability. In other words, there must be a housing programme that builds good affordable accommodation to suit the needs of needy families.
• Additional Sources:
• http://vancouversun.com/news/local-news/house-buyer-beware-landmark-b-c-court-ruling-will-shake-real-estate-industry
• http://www.cbc.ca/news/canada/toronto/foreign-buyers-tax-toronto-real-estate-investors-1.3824467
http://www.cbc.ca/news/business/toronto-housing-bmo-td-1.4028032
http://globalnews.ca/news/3307975/generation-squeeze-bc-economy
