With so much going on in the world and so many news platforms reporting world events, it is sometimes hard to keep up with the news, not to mention the difficulty of discerning which institutions can be trusted.
We have compiled some details and information of the significant and recent real estate news for Canadians to catch up on. Below are some of the headlines as we enter summer 2022.
Canadian Federal Budget Impacts
The federal budget always involves changes to the real estate industry, and this year is no different.
Recently, the federal government released “Budget 2022: A Plan to Grow Our Economy and Make Life More Affordable.”
Acknowledging the widespread problems with the Canadian housing market, the new budget will attempt to make housing more affordable and available for all the country’s residents. To accomplish this, the budget introduces several measures to address real estate issues across Canada. According to an analysis from Mondaq, those measures include:
- Home Buyer’s Bill of Rights: Working with the provinces and territories, the federal government will develop and implement a Home Buyers’ Bill of Rights that includes additional transparency on sale price history and an end to blind bidding in Canada, which has been widely requested amidst growing competition.
- Ban on Foreign Investments in Canadian Real Estate: The budget proposes a two-year prohibition on foreign commercial enterprises and non-Canadian citizens or permanent residents from acquiring non-recreational residential property in Canada.
- Tax on Property Flipping: The new budget also imposes new tax rules on property flipping. In short, any individual selling a property held for less than 12 months would be deemed to be “flipping” that property and would be subject to full taxation on any profits as business income.
20% of Canadian MPs hold rental, investment real estate
A recent story about the number of Canadian MPs with real estate investments highlights why Canadians feel so strongly about the need for the kinds of reforms detailed above.
At least 65 Canadian members of Parliament hold rental or investment real estate assets, according to their filings with the federal conflict of interest commissioner, The Globe and Mail reported.
However, the real number is likely higher because 91 MPs either have not completed their disclosure process or the conflict of interest commissioner’s office has not yet published the filings.
“Yet their disclosures come at a time of growing scrutiny and frustration about the role of real estate investors in fuelling the country’s housing unaffordability crunch,” the article said.
War In Ukraine Impacts Commercial Real Estate
Russia’s war on Ukraine continues to impact markets around the world — and Canada’s real estate market is no exception.
According to The Globe and Mail, the global commodity price surge that followed Russia’s invasion continues to impact Canada’s commercial real estate market.
Canadian inflation has risen to 6.7 per cent — a 31-year high, according to Statistics Canada, and the Bank of Canada raised the interest rate in April in an attempt to address inflated prices.
What does all this mean? The biggest takeaway is that building and borrowing both cost more, resulting in Canadian commercial real estate properties becoming more expensive.
“Much of the inflated costs of construction, particularly those that use natural gas, will be passed on to tenants,” the article said.
Check back soon for more briefs on the most pressing issues for the present and future of Canadian real estate.