KAMSACK – As Canadians navigate uncertain times and soaring inflation, pressures from the economic turmoil have become a heavy burden on the nation. Despite this, there are a few industries that seem to have dodged much of the national stress. With an array of personal reasons driving real estate sales, small-town Saskatchewan realtors in particular are reporting a substantial increase in business.
Jodie Kowalyshyn of Community Insurance in Canora has been a licensed realtor since 2006. She said that 2021 was the busiest season she has ever seen over the span of her 15 years in the industry.
“Normally, we have close to 40 properties on the market,” said Kowalyshyn. “Currently we’re down to just 15 – and the demand is showing no signs of slowing down. We’re expecting sales to take off even more once the weather changes and the snow melts.”
With a focus on Canora real estate, Kowalyshyn said the fastest selling homes are definitely those listed under $100,000.
“Just last week, we listed a smaller house in town. We posted a sign in the front yard, and by the next day – it was sold.”
Kowalyshyn said that while her clients are looking to Canora for a variety of reasons – the most popular are affordability and proximity to Yorkton.
“Many of our clients are first-time homebuyers who want to live in a small town, but still enjoy all of the city amenities within a short commute,” said Kowalyshyn. “We have a great little town with so many events and community development projects on the go that will serve residents – especially families with children. We are also well-known for our high rate of senior citizens, and we are seeing quite a few properties come up for sale – like estate sales or people who want to downsize to live with family or move into senior housing. Older people often tell us they have grown tired of the work involved with maintaining a house – like cutting grass or shoveling snow. There are also a number of farmers in the area who are looking to retire and either sell all of their land or subdivide and sell parts they don’t want to manage anymore. Unless a property is priced way too high, it won’t last long on our listings. It’s definitely a seller’s market right now.”
Another established local realtor, Gladys Secondiak of RE/MAX Bridge City Realty, said her properties are selling so fast, she can hardly keep up with the paperwork.
“I’ve been running steady. I work seven days a week. You’d think COVID-19 would have slowed things down, but actually, it has stirred buyers up. In all my years in this industry, 2021 was the busiest year yet.”
Secondiak said that a good portion of her buyers are out-of-province and it’s not uncommon for properties to be purchased sight unseen.
“I’ve seen a huge increase in impulse buyers,” said Secondiak. “A lot of people are telling me that they want to escape. They are watching the news and they are frightened. They are worried about economic depression and it has put them in survival mode. They want to be self-sustaining, so they are looking for ways they can live off the land. Acreages are the most in-demand. People are saying they want to plant their own vegetables and even look to buy full quarters of land so they can hunt and provide their own food.”
In a strange twist, Secondiak reported that small town Saskatchewan was also affected by the Ottawa “trucker freedom convoy.”
“Well, when people started talking about the idea of Trudeau freezing bank accounts, they really began scrambling to put their cash and assets into real estate. When they looked across the country, they discovered the best prices were right here in Saskatchewan. These days, land is typically gone the minute it comes up – but only if it is priced right.”
Secondiak added that although the demand for commercial real estate hasn’t been quite as dramatic, she has observed a new trend emerging with young professionals.
“I’ve spoken with a number of real motivated and really skilled professionals who are looking to live the life of their dreams by owning their own commercial business. It seems as though the pandemic gave many people the time to reflect on their personal goals and ambitions. People are discovering that small-town Saskatchewan has viable commercial venture opportunities that are otherwise completely unaffordable in larger cities. It’s so exciting for me to help support those folks that are no longer fulfilled by their employer or jobs and want to ‘be their own boss’.”
Secondiak added that Saskatchewan’s small-town real estate market has seen its share of booms and busts, and there is no telling how long this hot market will last.
“The way things are going right now – I think this is great for our small communities. I would say for anyone considering selling a small house under $100,000 or more so $50,000 – the time to list is now. Of course, there are always unknowns – like the potential for interest rates to go up. But I do not see things slowing down at all throughout the summer.”
Robert McLister: Tax shelters don’t make housing more affordable, but those with the cash would be foolish not to use them
Published Apr 19, 2024 • Last updated 55 minutes ago • 4 minute read
With housing unaffordability near its worst-ever level, our trusty leaders are on a quest to right their housing wrongs and get more young people into homes.
Part of Ottawa’s big strategy to “help” is promoting tax-sheltered savings accounts and pumping up their contribution limits. That, of course, stimulates real estate demand amidst Canada’s population and housing supply crises. But save that thought.
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First-time buyers now have three government piggy banks to stockpile cash for a down payment:
1. The 32-year-old RRSP Home Buyers’ Plan — which lets you deduct contributions from your income to defer taxes and then borrow from the account interest-free for your down payment (as long as you wait 90-plus days to withdraw any contributions);
2. The 15-year-old Tax-free Savings Account (TFSA) — which lets you save after-tax dollars, grow your money tax-free and withdraw it without the taxman taking a bite;
3. The one-year-old First Home Savings Account (FHSA) — which is a combination of an RRSP and TFSA. It lets you deduct contributions from income, compound it tax-free and never pay tax on withdrawals used to buy a home. You can even save the deduction for a year when you need it more — when you’re earning more money.
Assuming you have the funds and contribution room, these tax shelters can combine to help you amass a supersized down payment.
“Looking at the FHSA alone, with the max annual contribution room of $8,000 for 2023 and 2024, a potential first-time home buyer could have as much as $16,000 deposited in the account today for a down payment,” says Eric Larocque, chief mortgage operations officer at Questrade’s Community Trust Company.
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“If you also add in the cumulative contribution room of $95,000 for the TFSA, it amounts to $111,000 in potential funds available — and that’s before incorporating investment gains from either account.”
And it doesn’t stop there. RRSP, TFSA and FHSA savings limits keep increasing. If first-timers have enough contribution room, down payment savers in 2024 can sock away even more in these tax-sheltered troves.
“Factoring in the recent changes to the Home Buyers’ Plan, which now permits RRSP withdrawals of up to $60,000 — up from $35,000 — we land at a potential total of $171,000 in deposited funds that can be tapped for a first-time home buyer’s down payment,” Larocque adds.
That’s quite a wad — easily enough to cover the 20 per cent ($139,706) down payment required to avoid mandatory (and pricey) default insurance on the average home. Canada’s average abode is now worth $698,530 by the way, according to the Canadian Real Estate Association.
Here’s the rub: Canada’s living costs are sky-high, and real disposable income has trended downward. So, how’s an average first-time buyer household, raking in less than six figures, supposed to amass such a stash?
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Based on national averages, saving 10 per cent of one’s pre-tax income per year (who does that?) would take a young FTB couple over 15 years to sock away $140,000. History shows what would happen to home values if you waited 15 years — they’d jet off without you.
If you have no other resources and your bet is that historical appreciation rates continue — despite slower population growth, more building and potentially higher long-term rates — you’re better off saving less and buying sooner with a five per cent down insured mortgage.
So, does Big Brother really expect your typical first-time buyer to max out all these savings plans? Nope. But hey, throwing a buffet of options at you sure paints a pretty picture of government effort, doesn’t it?
Ottawa’s dirty little secret is that these nifty programs crank up demand, turning renters into buyers. So don’t bet on them making the home-owning dream any cheaper, for first-timers or anyone else.
Take advantage of them anyway.
The government sets limits on these tax shelters with well-off home buyers in mind. One lucky bunch who can make use of all three down payment savings plans is the first-timer with prosperous parents.
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Such buyers can make a withdrawal from their parental ATM (a living inheritance, some call it), deposit that cash in all three savings vehicles above and reap: hefty income tax savings or deferrals (thanks to the FHSA and RRSP deductions); tax-free/tax-deferred growth on the investments; and tax-free withdrawals if the money is used to buy a qualifying home (albeit, you’ll have to pay the RRSP HBP back over 15 years, starting five years after your withdrawal).
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The more opportunities it gives people to save for a down payment, the more Ottawa worsens the imbalance between purchase demand and supply. And that, of course, boosts real estate values skyward — which is dandy for existing owners but contradictory to the government’s affordability messaging.
But hey, these tax treats are ripe for the picking. Home shoppers with the means — especially those with deep-pocketed parents — might as well take advantage of all three accounts.
Robert McLister is a mortgage strategist, interest rate analyst and editor of MortgageLogic.news. You can follow him on X at @RobMcLister.
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Successful real estate investors have long followed the adage: When there is blood in the street, buy property.
Historically, this approach has yielded dividends, and it explains the mindset behind a new venture from Hines, a real estate giant with over $93 billion in assets under management. Hines recently announced a new platform called Hines Private Wealth Solutions that seeks to capitalize on the recent troubles in the real estate industry.
The management at Hines has been carefully watching the real estate industry for decades, and they believe that today’s market presents the perfect opportunity for investors to buy distressed assets and sell them at a profit in the future. When you consider that nearly $4 trillion in commercial real estate loans are set to mature between now and 2027, it’s easy to see the logic behind Hines Private Wealth Solutions.
The developers behind many of those projects took out loans assuming they would be able to refinance at pre-COVID interest rates. Considering that current interest rates are about double what they were before COVID-19, that assumption looks more like a losing bet every day. It also means there will be a lot of foreclosures that a well-positioned fund can snap up for pennies on the dollar.
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That’s where Hines Private Wealth Solutions seeks to step into the picture. It’s already contracted with investing heavyweight Paul Ferraro, former head of Carlyle Private Wealth Group, and raised $10 billion in funds for the new project. It will offer its clients a range of investment options, including:
In addition to these offerings, Hines will also give personal guidance to its investors on how to best manage their real estate assets. It is targeting investors who want to turn away from the traditional 60/40 investment model by channeling more money into real estate and away from other alternative investments. Hines is banking on the idea that high interest rates and high inflation will be around for a while.
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When that happens, it becomes more important for investors to hold inflation-resistant assets. That’s a big part of why Hines is betting that real estate is near the bottom after years of declining profits resulting from high interest rates and major losses in the commercial sector. Hines’s conclusion that now is the time to buy real estate is based on long-term company research showing that real estate typically declines after a 15- to 17-year-long growth period.
Its research shows that the decline normally lasts around two years, which is about the same length of time the real estate market has been suffering from high prices and high interest rates. Theoretically, that makes this the perfect time to make aggressive moves in the real estate market, and the Hines Private Wealth Fund was conceived to allow investors to take advantage of current market conditions.
Despite the deep troubles facing today’s real estate industry, it’s not hard to see the logic in Hines’s approach.
“This is a great vintage, it’s a great moment. This real estate correction began really over two years ago, right when the Fed started raising interest rates,” Hines global Chief Investment Officer David Steinbach told Fortune magazine. “So, we’re two years into a cycle, which means we’re near the end.”
If Hines is correct, real estate investors will have a lot of good bargains with high upside to choose from in the next 12 to 24 months. The good news is that even if you’re not wealthy enough to buy into the Hines Private Wealth Solution, there may still be plenty of opportunity for you to adopt their investment philosophy and start scouting for an undervalued, distressed asset to scoop up. Keep your eyes open and be ready.
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Jen Hubbell became a real estate agent in Greenville, S.C., because she believed a good life started with a good home, and now her phone buzzed regularly with calls from out-of-state clients who believed they could find both things in her city.
Many were staunch conservatives from deeply blue states like New York, Washington and California, fed up with the politics there. Could Ms. Hubbell, a conservative herself, help them find neighborhoods of like-minded people?
Her response was always emphatic: “You are going to love it here.”
Ms. Hubbell is the lead agent in South Carolina for Conservative Move, a Texas-based company that helps conservatives migrate to solidly red places. (“When your community no longer reflects morals and values, it might be time to move,” its website says.) And with South Carolina surpassing Florida last year as the fastest-growing state in the country, she is keeping very busy.
The in-migration has fueled a yearslong real estate boom across South Carolina, where Republicans have controlled the governor’s mansion and legislature for more than two decades. Real estate agents like Ms. Hubbell say many of their clients are religious conservatives whose reasons for moving include opposition to policies like abortion access, support for transgender rights and vaccine mandates during the pandemic.
Paul Chabot, the founder and president of Conservative Move, which works with about 500 agents across the country, said that when he started his company in 2017, there were not a lot of people asking to go to South Carolina.
In the last two years, however, it has joined Texas and Florida among the top three states that the company’s clients are buying homes in, Mr. Chabot said. About 5,000 people in its clientele database have expressed interest in moving to South Carolina soon.
Most of the company’s clients in South Carolina have chosen to buy a house in Greenville County, which is in a deeply conservative and Christian region known as the Upstate. The county had the second-largest population growth in the state from 2020-2022, behind Horry County, which encompasses Myrtle Beach and has more expensive houses.
Ms. Hubbell, along with half a dozen real estate agents who do not work with Conservative Move but whose experience has mirrored hers, described having had an easy time selling the appeal of Greenville. That was especially true with clients moving from large liberal cities and their outskirts who still want a hint of a cosmopolitan life.
Greenville is big enough for Broadway shows and rooftop bars, but people still often see their neighbors downtown, where a pedestrian bridge gives an overhead view of the Reedy River Falls. Agents also often point out the lack of homeless encampments in the city.
Perhaps most important, property taxes are low, and houses are generally less expensive than out West or in New England. The median price of a house is about $360,000. Real estate agents will also note that there are hundreds of churches near Greenville, mostly Christian. And Bob Jones University, a prominent evangelical school, is here.
“When I walked inside banks or stores or schools, there was always Christian music playing in the background,” said Lina Brock, a conservative who recently moved to Greenville from Temecula, Calif., where she was dismayed by the vocal support for access to abortions. “I felt good, I felt welcomed. I felt like I was in the United States.”
Some agents use a Goldilocks-like strategy when selling clients on the state: Texas is too hot, they say; Florida is too expensive; Tennessee has too many blue cities. But South Carolina?
“It’s perfect,” Ms. Hubbell recently told a buyer.
Last year, about 15,500 New Yorkers, 15,000 Californians and 36,000 North Carolinians moved to the state, which has a population of more than 5.3 million. There is no data that breaks down those demographics by political party, but few believe that the growth will do much to shift the state politically. The same cannot be said for Texas, Georgia and North Carolina, which are becoming somewhat more blue as young, liberal-leaning people flock to some of their cities, said Mark Owens, a political science professor at the Citadel in Charleston.
The flow of conservatives into South Carolina is underscoring what even many of those moving concede is an unfortunate reality in a polarized America, as people choose to part ways with neighbors they disagree with. Several newcomers to the Greenville area said it had been a difficult decision, but that they had grown tired of feeling lonely and even ostracized.
Yana Ghannam, a recent client of Ms. Hubbell, said that she had moved to Greenville from Livermore, Calif., because she wanted to make friends who wouldn’t criticize her for voting Republican or for being anti-union. “It was very much, ‘Oh you have to do this to fit in, you have to do that,’” Ms. Ghannam said of her life in Livermore.
Politics, of course, are not the only reason people are moving to South Carolina. The weather counts for something, and jobs have been a big draw, including in a growing electric vehicle industry.
Gov. Henry McMaster has touted the state’s economic growth in recent years and attacked the few unions in the state for posing a threat to it. The South Carolina Department of Commerce said that in 2023, the state had a capital investment of more than $9 billion, the second-largest amount in its history, which represented roughly 14,000 jobs.
Still, Pamela Harrison, another real estate agent in the Upstate, said the equation for most of her clients has been simple: “They like the climate, they like the politics and they’re trying to get out of their blue states.”
Brad Liles, an agent based in Spartanburg, about 30 miles east of Greenville, said that he and his colleagues have referred to the wave of Republican newcomers as “the great migration.”
Several of the agents said that many conservative-leaning buyers in Greenville have sought acres of land slightly off the grid, avoided homeowners associations and purchased homes with plenty of backyard space for vegetable gardens, chickens or other barn animals because they are interested in being independent and self-reliant.
“If you would have told me five years ago I would have chickens, I’d be like, ‘You are lying,’” said Lauren Gomes, a conservative who moved to Greenville County in 2022 with her husband and three children because she was angered by the liberal politics in Minnesota, where her family had lived for seven generations.
Ms. Gomes, who described herself as Christian and anti-abortion, said she felt compelled to leave because she was getting yelled at in grocery stores for not wearing a mask during the pandemic, and because abortion remains legal, with no restrictions, in Minnesota.
She said she was also worried about how, in her view, “transgenderism infiltrates all aspects of education, public life, when you’re out and about” in Minnesota.
Ms. Gomes and other conservatives who moved to South Carolina said that they liked the state’s ban on abortions after about six weeks of pregnancy. Other local policies in Greenville County have also appealed to them, such as when the board of trustees for the county’s libraries voted to relocate children’s materials depicting transgender minors from the children’s section to the parenting section.
Stephen Johnson Jr. recently helped Rick and Natalie Samuelson move from Gig Harbor, Wash., to Williamston, S.C., a town of roughly 4,000 about 20 miles outside Greenville, where their budget of $2 million meant they could afford almost anything in the area.
But on Friday, the Samuelsons, who are Republican, met with Mr. Johnson at the BrickTop’s restaurant in downtown and discussed possibly buying a new home in Greenville because they wanted to live closer to a hospital. They also discussed a transgender athlete that Mr. Johnson said he saw play in a girl’s basketball game he refereed.
“It’s clearly a young boy that is bigger than all of his friend’s teammates,” Mr. Johnson said as the waiter removed the leftover deviled eggs and sweetened “Millionaire’s Bacon.” “He identifies as female, so they allowed him to play.”
Ms. Samuelson shook her head.
Then the conversation switched to how wonderful Greenville was for them.
“A conservative bubble melting pot,” Mr. Johnson said.
“It’s Christianity,” Mr. Samuelson said. “No place is more unifying for Christianity to this degree.”
The recent growth and influx of wealthier residents has forced many poorer residents out, a problem hardly unique to Greenville or the South, but hard on its Black community in particular. A 2023 study from Furman University found that Greenville has seen a 22 percent decline in its Black population since 1990, while the city’s overall population has grown by about 21 percent.
“Wealthy white families are moving into historically Black neighborhoods that ring the City of Greenville,” the study found. “Their newfound interest in places they once avoided is increasing property values beyond what the existing Black population can afford.”
Downtown Greenville, one of the biggest selling points for real estate agents, is also driving up the values of nearby homes as it continues to grow and draw crowds. On a recent Saturday night, brassy notes from saxophonists oozed from sidewalks as couples danced below treetops drizzled with dangling lights.
Similar scenes have captivated many newcomers, including Curt and Liz Cutler and their 10-year-old daughter. Mr. Cutler was fired from his sanitation job in New York City in 2021, he said, after refusing to comply with the city’s coronavirus vaccine mandate for government employees. He served as a deacon in his Baptist church there, he said, but his request for a religious exemption was denied.
They had traveled 700 miles southward, spent $350,000 on a home outside Spartanburg, painted the interior walls a pumpkin-cream shade and built a den for their chickens. They had trusted their real estate agent’s promise of a Christian, conservative America, and on a recent Sunday, the family worshiped at a Baptist church, thanking God for their new home.
“Blessed shall be you by the city,” the pastor said. “And blessed shall be you by the country.”
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