Real estate in Canada: Budget ‘good news’ and bad
Real estate observers say the new mortgage code of conduct promised in the federal budget will be convenient for Canadians facing financial hardships, but the economic plan needs housing affordability measures I feel that there is a lack of
A code of conduct announced Tuesday will give federally regulated financial institutions fair and equitable access to mortgage relief for those struggling to stay home because of rising interest rates. It is intended to ensure that
Protect these people from unnecessary fines, internal bank charges, or interest, extend amortization beyond 25 years, adjust payment schedules, and allow them to make lump sum payments.
Sherry Cooper, chief economist at Dominion Lending Centers, said the code of conduct is “good news” for people with variable-rate mortgages who are facing financial strain.
“If banks could extend the remaining write-offs when borrowers renew, the pressure on their wallets would be significantly less,” she wrote in a note to investors.
However, Cooper felt the overall budget was “not much for affordable housing” and largely addressed the “bundle of measures” taken earlier by the federal government.
Create a tax-exempt savings account for first-time homebuyers next month, a two-year ban on non-resident purchases of residential real estate, and at least a $4 billion housing acceleration fund from last year’s budget It is mentioned that they are planning to 100,000 purely new homes.
Cailey Heaps, a real estate broker in Toronto, said the mortgage code would give mortgage lenders more room to come up with solutions that would “enable more Canadians to retain their home ownership and investment.” I hope it helps.”
“In today’s market, if Canadians lose their homes, it could be another generation returning to housing, and that would be devastating,” she said in an email.
But Heaps has had problems with the lack of budget support for housing and the way it deals with corporate investors.
“There is a widespread perception that corporate investors are damaging affordable housing, but the federal government is not making meaningful investments in rentals, so someone has to fix the problem.
Instead, she believes corporate investors are looking to “take risks” so that they can profit from their work.
“If corporate investors can help by building more housing, we need to enable corporate investors to solve problems that the government cannot solve,” she said.
“If they are making a profit, it also makes sense to ask them to contribute by further densifying the lost midsection.”
Missing middle is a term used to describe medium-density housing such as duplexes and apartments, which are more affordable for middle-class families and first-time buyers.
The budget acknowledged that large corporate investors own a “substantial” share of Canadian rental units at a time when housing costs are rising.
According to a recent study by Rentals.ca, asking rents in Canada rose 9.7% annually, averaging $1,984 in February.
In the same month, the Canadian Real Estate Association announced that the national average home price was $662,437, almost 19% lower than the previous year. , up $1.7 from January.
“The government is committed to ensuring that investor activity, especially among those who own a significant number of investment properties, supports rather than undermines the affordability of Canadian housing. , will consider whether the government needs to rebalance the housing market in favor of Canadians looking for homes to live in,” the budget said.
This report by The Canadian Press was first published on March 29, 2023.