Canada Tightens Real Estate Tax Loophole For Foreign Investors

Federal Finance Minister Bill Morneau has announced new measures designed to help stabilize Canada's housing market, particularly in overheated areas such as Vancouver and Toronto.

Among them will be the closure of a loophole some foreign residents are using to avoid paying capital gains tax on investment homes.

Going forward, only people who used their home as a principal residence will be eligible for the government's exemption, Morneau said.

"We want that exemption to be appropriately interpreted," he told reporters.

"We need to have the beneficial owner of the home being here in Canada, we have to have that owner living in the home as their principal residence."

Real Estate Risk In Toronto, Saskatoon And Regina Flagged by CMHC

CMHC flags housing market risks in Toronto, Saskatoon, Regina. The federal housing agency says there is a risk of correction in Canadian housing markets in several cities, especially Toronto, Saskatoon and Regina,  because of overvaluation and overbuilding of real estate.

Canada Mortgage and Housing Corporation looks at housing markets in 15 Canadian cities every quarter, in an effort to detect housing bubbles.

Down Payment For Mortgage Increases to 10% On Homes Over $500K

The federal government is increasing the minimum down payment required to buy a home for more than $500,000 in an effort to cool the red-hot housing markets in Toronto and Vancouver, but some economists say the impact on housing activity will be minimal.

Finance Minister Bill Morneau made the announcement in Ottawa on Friday. "We are looking at ways to ensure our market is stable and we want to make sure people are making the appropriate decision as they buy a new home," Morneau said during a news conference.

Starting in February, CMHC will require a 10 per cent down payment on the portion of any mortgage it insures over $500,000.

Average Canadian sold houses climbs 9% to $439,144 in March

CBC reports that the average price of a Canadian home sold in March increased by nine per cent compared with the same month a year earlier, rising to almost $440,000. The average house price was $439,144, and actual home sales activity rose 9.5 per cent above March 2014 levels.

While the spring home buying season is off to a hot start, the two big markets of Toronto and Vancouver continue to skew the numbers higher, the Canadian Real Estate Association said Wednesday. If sales in those two markets are stripped out, the average price for Canadian resale homes drops to $332,711, with an annual increase of just 2.4 per cent.

Canadian Housing Market Ready To Bust - IMF warns

Andrea Janus, CTV
Canada’s housing market could be headed for “a hard landing,” the International Monetary Fund says, warning that an “overheated housing market” and record-high household debt remain drags on the domestic economy.

In a commentary posted to the agency’s website, Hamid Faruqee and Andrea Pescatori hail how the Canadian economy weathered the 2008 financial crisis, but note that “certain financial risks” remain at play, namely: “its overheated housing markets and high household debt.”

While household debt has recently stabilized, it has “increased to historical highs over the past decade,” and now rests at 150 per cent of disposable income. That is “one of the highest” among OECD member countries, the commentary noted.

Not Surprising! Vancouver ranked No. 2 globally for unaffordable homes

Alexandra Posadzki, The Canadian Press 
Vancouver is the second most unaffordable housing market in the world after Hong Kong, according to a new study of major property markets.

That could spell trouble for homeowners if mortgage rates rise, economists say.

"Given how high house prices are relative to household incomes, you'd only have to see a moderate increase in mortgage rates to have a really huge hit to affordability," said David Madani, Canada economist at Capital Economics.

The annual Demographia International Housing Affordability Survey ranks real estate markets in Canada, the United States, Australia, China, Ireland, Japan, New Zealand, Singapore and the United Kingdom.

Photos: Former Canadian PM Brian Mulroney’s $5.8m Montreal mansion

Former Canadian Prime Minister Brian Mulroney and his wife, Mila Mulroney, have listed their Montreal mansion for $5.8 million, saving prospective buyers $2 million on the original asking price.

Located in the city’s swanky Westmount neighbourhood, the seven-bedroom, seven-bathroom home has been on the market since September 2013 when it was initially listed at $7.95 million. See more 
pics after cut

World decline in oil price to impact Canada real estate in 2015

The Canadian Press - A for sale sign sits outside a home in Vancouver on April 8, 2010. Royal LePage says the price of a Canadian home is expected to rise by a relatively modest 2.9 per cent on average in 2015

By Alexandra Posadzki, The Canadian Press

Royal LePage says the price of a Canadian home is expected to rise by a relatively modest 2.9 per cent on average in 2015 as price appreciation slows across the country.

Toronto is expected to lead the pack when it comes to price increases this year, with the realtor saying the average home price in Canada's largest city is forecast to rise by 4.5 per cent, although that would be well behind last year's pace.

Vancouver is expected to see the second-biggest average jump in prices, up 2.8 per cent, followed by a 2.4 per cent gain in Calgary, 0.6 per cent in Montreal and 0.5 per cent in Halifax among several of the major centres surveyed across the country.

'Canada Is In Serious Trouble' As Debt, House Prices Climb,

Daniel Tencer | Huff

It was little more than a year ago that Deutsche Bank declared Canada’s housing market to be the most overvalued in the world, and on Thursday the German-based bank doubled down on its bearish assessment of Canada.

Residential real estate in Canada is overvalued by 63 per cent, according to research from Deutsche Bank chief international economist Torsten Slok.

Foreign Owned Condo Rentals A Small Part Of Canada Housing Market

Rob Atkins /Getty Images

Canada Mortgage and Housing Corp. says only a small minority of the condos for rent in most major urban areas have foreign owners, although some neighbourhoods in Vancouver, Toronto and Montreal are higher.

The CMHC says its first survey of foreign ownership of condos for rent found a wide range within the 11 major markets that were tracked, from a high of 2.4 per cent in Toronto and 2.3 per cent in Vancouver to a low of only one-tenth of a percentage point in several cities.

The survey suggests, however, that certain areas of Montreal had Canada's highest concentration of rental condos under foreign ownership — at 6.9 per cent.

Parts of Vancouver had about 5.8 per cent of rental condos under foreign ownership while in Toronto's centre core the rate was about 4.3 per cent.

Canada real estate market could fall like oil

A pump jack and a house northwest of Calgary. Experts in the oil industry seemed not to see the fall in prices coming. Could the same thing be happening again with house prices? (The Canadian Press)

Don Pittis, CBC News
Recent reassuring comments about the Canadian housing market remind me of similar blandishments when oil prices began to fall.

I wouldn't want to overemphasize the parallels between houses and petroleum. Indeed, there are many differences in the two markets, which I will expand upon in a moment.

But first the similarity. It is that, just as with oil, so many of the people we expect to know what is happening refuse to admit that house prices can go through big declines as well as big increases.

Read full story on CBC

Calgary Holds The Turf As Canada Most Attractive Real Estate

File photo of Calgary's skyline. | Lynn Koenig via Getty Images

Zi-Ann Lum | Huff
A recent slip in oil prices hasn’t bucked Alberta’s housing market from being one of the country’s most affordable, according to a report released by RBC Economic Research on Wednesday.

Considered part of Canada’s current trio of “hot” markets, Calgary sets itself apart from Vancouver and Toronto because of its “attractive” affordability.

Economists attribute the province’s housing market buoyancy to factors including a strong energy-backed economy, rising incomes, and a population boom. And the results speak for themselves: home resales in Alberta increased by 0.9 per cent from last quarter, setting a new record high.

“A strong economy and rapid population growth continue to trump any possible worries that Alberta’s energy boom might bust in the near future,” RBC’s chief economist Craig Wright explained in a statement.

Pop Star Justin Bieber’s childhood home for sale in Stratford

The modest home at 288 Willow St. in Stratford, Ontario. Torstar News Service 

Torstar News Service Justin Bieber’s childhood homes is on the market, with the singing sensation’s Toronto Maple Leafs-themed bedroom still intact.

The three-bedroom, two-bathroom bungalow at 288 Willow St. in Stratford can be yours for only $279,000, says Re/Max Canada realtor Maria Walsh.

She says the house was placed on the market by Bieber’s grandparents nearly two weeks ago but has yet to attract any buyers.

“I think we priced it right so I would expect an offer in not too much longer,” she said.

And she promises the deep blue walls and Maple Leafs wallpaper in Bieber’s former bedroom will remain.

“I am not too sure about the curtains, but usually they stay with the house. Justin visited his grandparents there and stayed there, and there is a room decorated for him, but it was only his grandparents’ home.”

Bieber’s grandparents Bruce and Diane Dale, reportedly moved three years ago into a larger place purchased for them by their grandson.