I hope that you and your families had a wonderful Easter weekend? We were able to have a family dinner with our parents, had an Easter brunch over at a friends’ house and did our annual Easter egg hunt at home. My five-year-old loved it of course but it amazes me that my 10 and 13 year old still do too!
It’s official – Spring must be on its way because we had our usual post-Easter snowfall in Calgary! I for one am looking forward to some warmer days and longer evenings.
Spring is also a traditional time for an uptick in real estate listings and sales but there may be some hesitation given a number of government announcements on housing both in a number of Provinces and Territories and in the recent Federal budget. This was obviously an important topic given the media coverage over the last few months and the Federal Government made it the first Chapter of their Budget document. https://budget.gc.ca/2022/report-rapport/toc-tdm-en.html
You are probably wondering how these potential changes (they have not been voted on yet) may affect real estate and if you are considering investing?
It is of course too early to say, however, on the whole, many of the initiatives are to help people tackle the challenges of homeownership after significant price increases over the last two years.
There have been concerns about people profiting from these increases and the Government has looked to curb some of this through the banning of foreign ownership for two years and the flipping property tax for those looking to quickly turn over a property.
But there are also some positive elements for those looking at real estate investing and I will definitely be exploring several of these over the next few months and how they may be able to work with my and my client’s projects;
- New Housing Accelerator Fund – helping municipalities fast track permits and the development of more housing.
- Using Infrastructure Funding – redirecting monies where it makes sense to increase home construction.
- Public Transit – addressing municipal transit shortfalls from the pandemic to help with more city housing construction.
- Rental Construction Financing Initiative (RCFI) – reworking this funding to encourage and reward more energy-efficient and affordable housing.
- Multi-Generational Home Renovation Tax Credit – providing construction and renovation tax refunds to help families with traditional multi-generations living together have more usable space.
- Rent to Own – supporting rent-to-own projects along with a number of first-time buyer incentives to help people get into homeownership.
There is a lot to absorb and many of these programs will not be happening overnight but spread over a number of years.
The bottom line though is that Canada is going to continue to be a net positive immigration country and over the next few years is increasing the number of new immigrants to make up for the drop in numbers during the pandemic. This means that the larger cities that usually attract the majority of new immigrants will continue to have strong demand for additional and new housing and that will mean a continued need for investment.
As for the recent increase in interest rates and more to be expected, there may be a slow down in the markets, but it’s too early to say. Based on research from the Real Estate Wealth Lab (a real estate intelligence boutique), the political uncertainty, the immigration and inflation that are expected to continue, will result in an increase in values overall over the next few years. We will share more on this in future articles.
If you would like to discuss how real estate investing can be part of your portfolio diversification please reach out to set up an initial conversation https://calendly.com/carleen-su-1