Real Estate Market This Fall (2012)
There are some fiscal policies that make sense and some that far from making sense seem to have a negative impact on the regular hard working Canadian who is always roughing it out and with dedication saves for a down payment to buy a home for the first time. Tired of paying rent (which by the way is just paying some one elses mortgage) consumers want to start building equity. They want to invest so that tomorrow theycan have a better life.
The last changes to our mortgage regulations make it very difficult for that person wanting to buy a home to qualify for a mortgage. The government justifies these changes such as a maximum amortization period of 25 years instead of 30 because they are trying to control the degree of indebtedness of Canadians. With the low mortgage interest rates and a decent income Canadians deserve to own their home.
I think it is important to control the level of personal debt (especially credit card debt). I also firmly believe the way to stimulate the economy is to
provide incentive for private investment so that new jobs can be created with better salaries. I strongly believe foreign investment must be attracted
through various incentives given that we offer one of the most solid economies in the world with a highly skilled and well educated work force.
I do not believe that making it more difficult for buyers to purchase a home is the solution to the problem the Finance Minister is trying to avoid.
On the other hand, the so called solution is actually backfiring as fewer properties are being listed. The number of buyers has decreased and the number of transactions has decreased, but because there are fewer listings, the demand is higher and prices continue to go up
The combination of stricter lending guidelines, rising home prices and the added upfront cost associated with the land transfer tax in the City ofToronto resulted in a slower pace of sales during the summer of 2012 compared to a year ago.
However, the average selling price for sales during the first two weeks of September was $496,786 – representing an annual rate of increase of more the 9.5 per cent. Average selling prices were up for both low-rise and high-rise home types, including condominium apartments sold in the ‘416’ area code.
How is this helping the average Canadian? I believe this is helping rental property dvelpers and investors instead. They of course will rspond to a higher demand in reantal properties by investing in the sector and rental prices will be then driven by the econmic principles of offer and demand.
This policy in my opinion is not solving problems. It is creating problems instead as the average Canadian is impoverished by higher rent costs, a diminished ability to grow the networth, higher cost of living, low income levels, student loans and credit card and other debt..