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Tuesday , 13 October 2015

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Real estate issues turning up as election promises

Aside from the obvious political taint, the government’s election promise to increase the Home Buyers’ Plan withdrawal amount from $25,000 to $35,000 could be helpful to many Canadians. (The fact that it is an election promise only shows that the government doesn’t really want to do it.) The plan has been around since 1992 and this would be only the second increase. From its inception until 2009, the withdrawal limit was $20,000. The way it works is that a first-time buyer can withdraw funds from his or her RRSP to  purchase a home. “First-time buyer” does not mean first-time buyer in the strict sense, i.e. a person who has never owned ... Read More »

Housing market resilient but uneven, bank rate to rise: RBC

The latest housing market forecast from RBC reveals the bank’s sanguine attitude right off the top. Canada’s housing market is poised to post one of its best years on record in 2015. Market momentum at present is uneven—strong in Ontario and British Columbia, weaker in Alberta and Saskatchewan—but the future holds a cooling of the market, not a crash. And the main coolant will be interest rates. So writes senior economist at RBC Robert Hogue. For the rest of this year, RBC is forecasting the resale market to rise by 5 per cent, to just over half a million units. This would be the second-highest level on record, and once ... Read More »

CMHC red-flags fast-rising home prices in Toronto

Vancouver and Toronto are the only two real estate markets in Canada where home prices are growing strongly. Yet Vancouver, famous for its high-priced housing market, where the average home now costs $866,772, is not considered an overvalued market. Toronto, where the average cost of a home reached $609,236 in June (Canadian Real Estate Association numbers), is. How can this be? Canada Mortgage and Housing Corporation (CMHC) explains the apparent paradox. High prices alone are not necessarily an indication of overvaluation. This is important because overvaluation is one of the signs CMHC uses to measure a housing market’s risk of a price correction. And overvaluation is somewhat complex. A market ... Read More »

Brush teeth without harming environment: Canada to ban microbeads

“It is my hope that Canada’s action on this issue will prompt US officials to follow suit and ban microbeads.” It is not often that the current Canadian government is considered a leader on an environmental issue, especially by an American lawmaker, but the recent announcement on the pending banning of microbeads has won the government praise. The Representative (Republican, no less) from Michigan, Candice Miller, said that protecting the Great Lakes was “imperative” and she hoped her government would work with the “northern neighbor” to do so. Canada’s government announced on August 1 that it would move to place microbeads, tiny synthetic polymer particles, on the country’s official list ... Read More »

Tax: no free lunch, or, you get what you pay for

Property taxes, especially in Toronto with its hated double-hit land transfer taxes, are a big source of revenue for governments and a big source of irritation to citizens. Throw in GST, HST, other value-added taxes, personal income taxes, corporate taxes, social insurance taxes (such as the surcharge for health care in Ontario), and you see that governments have quite an array of revenue tools at their disposal. But is it really so bad in Canada? How do we compare with other countries? In general, OECD (Organization for Economic Cooperation and Development) countries raise a lot more revenue from “consumption” taxes—value added taxes and the payroll tax for social insurance programs—than ... Read More »

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