No "doom and gloom" in store for Canadian real estate – Royal LePage’s Soper

by Ephraim Vecina29 Jul 2020


Sustained market strength, subject to supply constraints, will be the predominant dynamic in the Canadian housing sector for the rest of the year, according to Royal LePage CEO Phil Soper and Sotheby’s Canada CEO Don Kottick.


In a joint interview with The Financial Post, the two executives highlighted the major role that housing inventory will play in the period immediately after the COVID-19 pandemic eases.

Soper said that home prices largely rely on the balance between supply and buyer activity.

“There are a lot of people who are looking to put roofs over their heads,” Soper said. “We just don’t see the number of homes for sale, the supply side of this, climbing to the point where home prices will collapse.”

Royal LePage’s latest predictions have placed annual growth by year-end at 2.5%.


https://www.canadianrealestatemagazine.ca/news/no-doom-and-gloom-in-store-for-canadian-real-estate--royal-lepages-soper-331927.aspx

MORTGAGE RATE FORECAST......BCREA


As the year ends, it's worth reflecting on how significantly the Canadian interest rate environment has changed in just twelve months. One year ago, the Canadian yield curve was its usual upward sloping shape, with markets expecting gradual rate increases by the Bank of Canada. Based partly on those expectations, Canadian mortgage rates were climbing. However, within 8 months the yield curve in Canada had inverted, bond yields tumbled, and Canadian mortgage rates were once again heading lower.


https://www.bcrea.bc.ca/economics/mortgage-rate-forecast/


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BC budget includes new real estate taxes and spending commitments

Housing was the dominant issue in today’s provincial budget.

 

The government released a 30-point housing strategy aimed at reducing housing demand, curbing tax fraud, building affordable housing, and increasing security for renters. 

 

Please see the complete Budget 2018 by clicking on the link below:

 

http://bcbudget.gov.bc.ca/2018/newsrelease/2018_News_Release.pdf

 

 

Affordable housing

  • The province is investing $6 billion in affordable housing to create 114,000 homes over the next 10 years.
  • The province will enhance local government capacity to build and retain affordable housing.
  • The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases.
  • The province intends to track beneficial ownership information.
  • The province will collect additional information to increase transparency and strengthen enforcement in real estate.

Tax measures

Speculation tax

  • The province will implement a new speculation tax on residential properties, targeting foreign and domestic homeowners who don’t pay income tax in BC. This includes those who leave homes vacant.
  • The tax will apply to the Metro Vancouver, Fraser Valley, Capital, and Nanaimo Regional districts and in the municipalities of Kelowna and West Kelowna.
  • In 2018, the tax rate will be $5 per $1,000 of assessed value. In 2019, the tax rate will rise to $20 per $1,000 of assessed value.
  • The province will administer the tax and will collect data to enforce it including, social insurance numbers, household information, and world-wide income information.

Foreign buyer tax

  • Effective Feb. 21, 2018, the foreign buyer tax will increase to 20 per cent from 15 per cent and will be extended to the Fraser Valley, Capital, Nanaimo, and Central Okanagan Regional Districts.
  • If the property is located in the Capital Regional District, Fraser Valley Regional District, Regional District of Central Okanagan, or Nanaimo Regional District, and the property transfer is registered on or after February 21, 2018, there are transitional rules available here.

Property Transfer Tax

Effective Feb. 21, 2018, the Property Transfer Tax on residential properties above $3 million will increase to five per cent from three per cent.

Provincial School Tax

Beginning in 2019, the provincial school tax will increase on most residential properties in excess of $3 million.

 

 

Database on pre-sale condo assignments

The province will require developers to collect and report comprehensive information about the assignment of pre-sale condo purchases. The information will be reported to a designated government office and shared with federal and provincial tax authorities to ensure taxes are paid.

Online accommodation PST and MRDT

Online accommodation platforms are enabled to collect and remit the Provincial Sales Tax and Municipal and Regional District Tax (Hotel Room Tax).

Property tax treatment for ALR land

As part of the Agricultural Land Reserve (ALR) review, the province is examining residential land in the ALR to ensure land is used for farming.

 

Clarity of property ownership

Compelling access to MLS®

The province plans to enable tax administrators to compel access to information relevant to property transfers, such as information held in a MLS® database. 

Beneficial land ownership registry

The province will require additional information about beneficial ownership on the PTT form.

Administered by the LTSA, the information will be publicly available and shared with federal and provincial tax and law enforcement authorities. Legislation will be introduced to require BC corporations to hold accurate and up to date information on beneficial owners in their own record offices available to law enforcement, tax and other authorities.

Task force on money laundering and tax evasion

The province will work with the federal government to formalize a multi-agency working group on tax evasion, money laundering and housing.

Residential Tenancy Branch

Increased funding to the Residential Tenancy Branch to reduce wait time, improve service and deal with disputes more quickly, as well as strengthening the Residential Tenancy Act and the penalties for those who repeatedly break the law.

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New taxes unlikely to stabilize housing market Victoria, BC – February 20, 2018.

The British Columbia Real Estate Association calls on government to introduce transitional rules for all transactions impacted by the new tax measures introduced in Budget 2018. The new tax measures come into effect on February 21, 2018. The Property Transfer Tax (PTT) increase to 5% for properties over $3 million, as well as the increase to 20% and expansion of the Foreign Buyer’s Tax to other parts of the province will have an immediate impact on transactions underway.

http://www.bcrea.bc.ca/docs/News-2018/2018-02-20BCBudget.pdf?sfvrsn=8 

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