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Canada should temporarily ban foreign home buyers, rezone cities – housing minister

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Municipalities should rezone broadly to allow more density and Canada should temporarily ban foreign buyers to help alleviate the housing affordability crunch faced by residents, the country’s housing minister said on Tuesday.

Ahmed Hussen told Reuters in an interview that housing should be for Canadians to live in, not passive foreign investment, and that he backs Canadian cities implementing density measures like those recently rolled out in New Zealand, which allow up to three homes to be built on most single-family lots.

“I support that,” he said. “That’s one of the ways to easily increase housing supply by using the same land for single-family dwelling and creating more units.”

“Any measure that increases the housing supply, that intensifies the use of land, that builds more housing and that frees up more housing on the same amount of land, is a good thing,” he added.

Canada is grappling with a national housing crisis, as surging demand tied to the COVID-19 pandemic has sprawled beyond big cities and into smaller centers, which are unable to keep up with supply.

A typical home in Canada now costs C$780,400 ($603,791), up 25.3% this year and by 81.4% since November 2015, when Prime Minister Justin Trudeau’s Liberals took power. Home price gains in smaller centers have outpaced those in large cities during the pandemic.

Trudeau, who won his third term in September, has promised new measures to improve housing affordability, including a temporary ban on foreign buyers and 1.4 million new or refurbished homes over four years.

Hussen said he supports the foreign buyer ban, but did not provide any details on how and when it would be implemented, deferring to Finance Minister Chrystia Freeland.

Hussen noted a 1% tax on foreign-owned vacant or underused real estate would take effect on Jan. 1 and said the Liberal government is working hard to get other taxes, like an anti-flipping tax, in place as soon as possible.

“This will enable us to reduce the speculative demand in the marketplace. It’ll help cool excessive price growth,” he said.

Canada has limited statistics on foreign ownership of housing. In 2019, 4.3% of homes in Vancouver were owned by non-residents of Canada, jumping to 13.6% for newer condos, official data shows. In Toronto, 7.7% of newer condos are owned by non-residents.

RENT-TO-OWN

Hussen said consultation work has already begun on designing a rent-to-own program, which will help renters buy their first home. The Liberals also promised a tax-free down-payment savings program for first-time buyers.

Those two measures alone will cost taxpayers C$4.2 billion over four years, according to Trudeau’s election platform. They have not been officially budgeted as yet.

But critics worry first-time buyer supports will drive up home prices, unless coupled with measures to tamp down demand. Hussen will study measures like larger down payments for investor owners, but gave no timeline for completing that work.

“This has been dealt with by other countries,” he said. “And it’ll be interesting to see what are some of these measures that they implemented and what results have they had.”

New Zealand tightened mortgage lending requirements for investors this year in an attempt to slow rapid price escalation. In October, the country moved to rezone broadly to allow more housing density.

($1 = 1.2925 Canadian dollars)

 

(Reporting by Julie Gordon in Ottawa; Editing by Peter Cooney)

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New analytics tool helps companies take the guesswork out of their real estate needs – Business in Vancouver

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New analytics tool helps companies take the guesswork out of their real estate needs – Real Estate | Business in Vancouver


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Impaired Aging Parents Managing Real Estate – Forbes

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Who’s Minding the Store?

We’re seeing it more and more now at AgingParents.com: elders as landlords who can’t do the management job any longer. Sometimes it’s the adult children who bring the issue to our attention. They see Dad failing maintain those rental houses he has had for decades. If tenants complain, he does not do anything. They see Mom fail to collect rents from her commercial enterprise, a small shopping center. They realize that rentable spaces are vacant and have been for some time. No effort to lease them is underway. The kids are alarmed. It may be a single rental home, a commercial building, a vast portfolio or anything the elder owns. Cognitive decline was not anticipated. No one was paying attention and things go wrong.

Financially successful people often invest in real estate, but for those who manage the properties themselves, we see a lack of planning about how to ease out of the management role. The same problem can occur when a property owner has a long time management company which is not held accountable for its work due to the cognitive impairment of the owner. Again, no one is watching management. It is a perfect opportunity for theft from the owner.

Real Life Examples

In one case a wealthy man owned a rental apartment next to his house. The long time tenant took ruthless advantage of the 85 year old owner and simply stopped paying rent. He lived for free and manipulated the owner into thinking the tenant was giving him help in exchange for use of the apartment when no such exchange actually took place.

In another case the 87 year old owner of an office building with long-term tenants in it did not take steps to terminate a very problematic tenant who had been there for 20 years. The landlord hated her but failed to exercise his rights to simply not renew her lease. Instead he waited for her to give notice that she was going to vacate. He had another person interested in the space, willing to lease it but he seemed confused about what to do to secure that new lease. He managed the property by himself.

Both of those elders who were landlords had adult children who could have stepped up. In the first matter, the rental apartment, the elder resisted the son’s attempts to intervene. The elder did have dementia but functioned rather well in other things. He angrily fought his son’s attempts to take over his financial affairs. He had previously appointed his son to do this very thing. The freeloading tenant manipulated the elder into signing an agreement to give the tenant free rent for five years.

In the office building matter, the daughter of the 87 year old was clearly not close to her father and was not paying attention to his confusion. She may have been stopped from getting involved by her father, who was stubborn and unwilling to admit that he was having trouble with managing the investment. In both cases, the only way to prevent abuse and manipulation was for someone appointed earlier to step in and assume responsibility for property management. That works smoothly when the elder is cooperative. It creates a legal mess when the elder resists.

Cognitive Decline and Money Management

Research tells us that even in the earliest stages of dementia or other cognitive impairment, financial judgment is impaired. It is, in a way, the first ability to decline and it is hard to see at first. The older person with impairment for financial judgment can carry on a normal conversation, sound and look okay. But if you asked them about the bookkeeping or accounting, they likely can’t keep it straight. Decline is subtle at the beginning and gets worse over time. Something is amiss before any family member may notice it. Sometimes this leads to loss of value in the property as well as lost income.

What family members can do is to be aware that as a person ages, their sharpness for financial management of property (and other matters too) can slide downhill. If you are aware of aging parents’ real estate investments, it is helpful to educate yourself about them, and to offer to help “in case of any emergency”. Ask your aging parent to teach you about them, even if you know plenty already. This approach can appeal to one’s ego: asking for advice. Do this before you see any sign of a problem and you are likely to be successful in preventing loss of income and value of any real estate they own.

If you simply assume that if Mom or Dad has been managing the family real estate investments for decades and it’s all just fine, you are taking too much chance that it will stay fine. Aging takes its toll. Most of us need some sort of help as we age, especially as we reach 85. By that time, one in three people will have Alzheimer’s disease. If you don’t like those odds, make your best effort to get involved in the real estate they have before the investment loses its value for lack of attention. Fraud is all too common. Predatory real estate brokers, crooked management companies and dishonest tenants can take ruthless advantage of vulnerable elders. Don’t let it happen in your family. If you see your aging parent declining in ability to manage real estate and they fight you on stepping in, it is time to seek legal advice so you can learn what options you have.

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Montreal real estate: Sellers market remains as prices increase by record levels | CTV News – CTV News Montreal

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MONTREAL —
Jacques Leclerc moved to Montreal from Detroit in 2019 with a simple plan.

He and his fiance Emily Ciccia planned to rent for a year and then buy a place with a 20 per cent down payment in Montreal.

It’s 2022, and the couple is still renting in Pierrefonds, frustrated, and starting to think a house purchase is not going to happen.

“Honestly, I never think we’ll be able to afford anything on the island, not at this rate,” said Leclerc.

ISLAND OF MONTREAL OUT OF REACH

The couple recently put in a bid over asking price on a house in St. Lazare, but they were outbid. It was a result they had already experienced a number of times on the island and were now having to deal with in the suburbs.

Leclerc is one among many potential home buyers seeing record increases in house prices influence where they can afford to purchase, if they can at all.

Royal LePage’s recent House Price Survey for the Greater Montreal Area showed almost a 20 per cent increase in the aggregate house price, which is now $532,600.

The median price for a single-family detached home also increased by 20 per cent and is $595,500, while a condo’s median price is $428,900 (up 18.2 per cent).

The company expects prices to continue to increase in 2022 due to a shortage of housing and continuing demand.

Royal LePage general manager Georges Gaucher said Montreal is seeing what Vancouver and Toronto have been witnessing for decades.

Montreal is about 40 per cent of Vancouver’s prices and 44 per cent of Toronto.

“We were historically behind,” said Gaucher.

Gaucher said with Quebec’s improved economy and job opportunities, investors entered the market ready to buy. The pandemic has added to the price increase causing buyers to go farther afield to find a place, a new trend.

“What we were not used to is going out really far away into the suburbs or cottage country to get a first house,” said Gaucher. “That is something that is unknown in Montreal.”

In addition, areas once considered less attractive – Hochelaga-Maisonneuve, East Montreal, Rosemont, North Montreal – are being looked at.

The situation is exactly what happened to Leclerc and Ciccia. The couple wanted to purchase on island, but are resigned to the fact that it might not be possible.

The house in St. Lazare the couple was outbid on needed a new roof, water heater and other repairs and they still could not meet the price someone else offered.

“What I want to know is who’s buying these houses way over asking price?” said Leclerc.

At the rate the market is going, the couple, who both have decent paying jobs with no children or other major financial obligations, feels they are in a race in which they can’t keep pace.

“Either like I need to be able to just borrow money I’ll never be able to pay back to buy this house or like I need a government subsidy to purchase this,” said Leclerc. “The cost of everything now, it’s like I’ll never be able to catch up at this rate.”

PANDEMIC EFFECT

Gaucher said the conditions in 2022 are the same as in 2021.

“Where we have this explosion of buyers,” he said. “Jobs, interest rates, which brings consumer confidence, and then the flexibility of working from home. These were three major elements that created the market last year.”

In addition, Gaucher said the trend of empty nesters selling their houses and moving to a condo or seniors’ residence did not continue during the pandemic.

“People were scared of doing that, so that didn’t happen,” said Gaucher.

Even with the expected interest rate hike in 2022, real estate agents feel the market will remain a sellers’ market.

“There’s a lot of pent-up demand out there,” said Gaucher. “The problem we have is inventory, and we’ve known that for years and years.” 

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