Saturday 22 April 2017

Is the Wynne housing proposal a win-win situation?

Legislation announced at Queen's Park to create a tax for non-residents buying real estate in Toronto area  

Finance minister Charles Sousa explained how they plan 16 changes to current Ontario guidelines  

By Mark Schadenberg
The province on Ontario is varied in its residential congestion as it ranges from extremely crowded in Toronto to nothing but lakes and trees between Red Lake and Pickle Lake in the north,
When Premier Kathleen Wynne announced new proposed guidelines to control residential real estate in Ontario I’m glad she concentrated on the geographical area of the Golden Horseshoe. We all know that the population concentration of Canada places about 90% of the inhabitants within a 90-minute drive of the U.S., but if you place push pins on a map from Oshawa and around Lake Ontario to Hamilton you will likely count about 6 million residents. Ontario’s population graph is like a thick milk shake around Toronto and a vapor near the salt-water port of Moosonee on James Bay.
Real estate purchasing has become almost unattainable in the GTA, so those folks have moved to Guelph, Kitchener-Waterloo and Cambridge. People who would prefer to live in or near one of those communities are now flocking to Woodstock, Brantford and London.
This trend will slow down as price increases in Toronto slow down. Everything is relative, but the average increase of a home in Toronto at 33% over the past 12 months, is almost the same percentage increase in Woodstock. Basically, a home worth $300,000 in the fall of 2015 in Woodstock would now sell (18 months later) for close to 400,000. I can show you the comparables to prove this math.


Provincial finance minister Charles Sousa introduced legislation which is wide ranging as it covers the creation of a tax for non-residents purchasing in Ontario, and includes new guidelines on rent increases. I find it hard to believe that apartment structures built since 1991 were exempt from some of the rental increase rules as that date should have been modified to about 2010. I can understand that you may pay a premium to reside in a newer building, but a building which was created in 1992 is not new.
Could you imagine receiving notice from your landlord that your rent would be increased exponentially just because the landlord was permitted to do so.
The 15% non-resident tax is interesting because it will be in effect retroactively to April 21 when the legislation is passed at Queen’s Park, which means it essentially is in place right now.
A vacant homes tax is important as many speculators will purchase a home and leave it empty and use it simply as an investment as prices skyrocket.
The addition of a housing advisory group seems necessary as a source to collect and analyse data, but any municipality which is calculating its need for low-income housing and preparing reports for the folks at city hall and Queen’s Park can tell you the real concrete story months before an advisory group pens an opinion.

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Toronto Star columnist write:
The province has acknowledged that these steps alone won't solve the crisis of affordable housing in Toronto and throughout the region.
A good next step would be to deliver on two longstanding promises in next week's provincial budget. First, the government should finally make good on its three-year-old vow to invest nearly $900 million to address the crushing repair backlog at Toronto Community Housing. Some 181,000 people are on waitlists for affordable housing while the city is forced to close hundreds of units it can't afford to fix. That makes no sense.
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As the ad above notes, you can still buy a new detached home in the Toronto area, but the cost is quite high. 
Historically low interest rates are still the main reason why there are more buyers than sellers in real estate.
The best part of the news this past week, is that the provincial government has created a new and improved program to encourage the building of apartment rental buildings versus more 700-square foot condo units in a high rise. Don’t get me wrong, buying real estate is obviously a very solid long-term investment and Woodstock (in my opinion) lacks condo apartments for an aging sector hoping to maintain a foothold in the equity real estate world. However, in the GTA people can not afford a down payment on a tiny condo apartment.
The same proposal to developers from the provincial government includes convincing builders to create larger dwelling units to accommodate larger families, such as 3-bedroom rentals.
It’s interesting to remind you that the CEO of the Ontario Real Estate Association (OREA) is former Progressive Conservative party provincial leader Tim Hudak. This is what he had to say about the Ontario Fair Housing Program.
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OREA CEO Tim Hudak:
“Our goal as Realtors is to keep the dream of home ownership within reach for millennials, first-time home buyers and young families. We had over a dozen meetings with Premier Wynne, Finance Minister Sousa, the Honourable Tracy MacCharles, Housing Minister Chris Ballard and other senior staff to bring our ideas on home affordability forward. We’re pleased to see that the government has listened. For one, increasing the supply of homes is the best way to give buyers a better shot at home ownership and the government has committed to working with municipalities to remove the barriers to getting more new homes and listings on the market faster. 
Secondly, since I became CEO of the Ontario Real Estate Association, I’ve worked with my board and Ontario Realtors to call for an overhaul of REBBA, the legislation that sets the rules for Realtors, to raise the bar on professional standards. Since the Act was first implemented in 2002, the real estate world has changed tremendously, therefore the legislation must be updated to catch up with the times. We look forward to working with the government to modernize the rules governing the profession, to help strengthen the sector and make Ontario a leader in real estate transactions and standards. 
Education standards for Realtors must also be improved to ensure that Ontarians are working with highly skilled professionals when buying and selling their home, the biggest financial move most people will make in their lives.”
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All entries on this blog site are compiled and written by:
Mark Schadenberg, sales rep
Royal LePage Triland Realty



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