There has been a high momentum in the real estate in Canada over the past few years due to the rising demand for homes and property. However, many factors affect this market. It is therefore difficult to characterize this market. Demand, government restrictions, interest rates on mortgages, and availability are some of the factors that affect the real estate market. Let us have a look at each of them in details.
Land transfer tax
This is one of the hottest subjects that affect many buyers. This market is considered to be punitive and arbitrary b some of the investors. Tenants are expected to pay maintenances, utilities, and property tax. This amount is estimated to be about two percent of the overall cost of a home. Land transfer taxes, commissions, and taxes are some of the extra charges incurred when purchasing a property in Canada. Alberta is the only province in Canada that does not have land transfer taxes.
Individuals living in Ontario are supposed to pay a tax of up to $ 15,745 for a property having a net value of more than $ 1,000,000. In addition to this, they still have to pay an extra $ 15,725 to the City Hall. This is quite absurd. This is something that needs to be appealed and reduced. Instead of doing this, politicians have been restructuring or re-naming these taxes. If these taxes are lowered, more and more investors will try to flip condos and houses. Anyway, this is a topic that has greatly affected the real estate market in Toronto and other major cities in Canada.
Value of the Canadian dollar
When it comes to this market, the weakening of the Canadian dollar can either have a positive or negative effect. There are some people who argue that Canadians can save a lot of money by minimizing their travelling expenses to purchase a property. That is for Canadians. It is important to remember that the non-residents own most of the real estates in this country. Most of them are favoured by the downward trend of the local currency. The prices of houses are extremely high when the Canadian dollar is strong.
This is another serious issue that should not be underestimated. These rates are always going up. This has lead to the high prices of houses over the past few decades. In fact, most of the mortgage brokers and economist are telling investors to get prepared for high interest rates in the coming years. These rates are mainly determined by the U. S interest’s policy and their Federal Reserve, all of which are closely tied to the Canadian ones.