This week’s news: Sousa promises measures to cool Ontario’s overheated housing market

Cool down market
Finance Minister Charles Sousa says he will be dousing the real estate market with some much-needed help in the spring budget to make properties more affordable.

Our weekly round-up of real estate news in Toronto, across Canada and the world for the week ending March 31, 2017.

Toronto

Sousa promises measures to cool Ontario’s overheated housing market (The Toronto Star)

Attention hard-pressed homebuyers: Finance Minister Charles Sousa is promising help in his spring budget to make houses and condos more affordable.

Disappointed that last week’s federal fiscal blueprint didn’t take immediate steps to cool the GTA’s overheated market, Sousa said Monday that Ontario will go it alone in the fight against crazy bidding wars, fast-rising prices and rents.

Supply of newly built GTA homes hits historic low (The Toronto Star)

Never mind affording a house, just finding one is a growing problem: there were only 324 new construction detached homes for sale in the Toronto area at the end of last month. Ten years ago, there were 12,064 newly built detached houses available.

The numbers come from a monthly report by the Building and Land Development Association (BILD), which says they are the latest indicators of a growing housing crisis in the Toronto area. BILD represents new-home builders and has been issuing similar warnings for months.

Real estate lawyers say new regulator will better protect buyers (CBC News)

The Ontario government announced this week it is setting up a new regulatory body responsible for monitoring the province’s home builders because it says the current one has too many conflicting roles.

Tarion Warranty Corporation, which was created by the provincial government in 1976, provides warranties, creates rules, regulates builders and even mediates problems between buyers and developers.

Canada

‘Unprecedented uncertainty’ in high-end real estate: Sotheby’s Canada (CTV News)

TORONTO — Recent government regulations have created “unprecedented levels of uncertainty” for the high-end home market heading into the key spring buying season, Sotheby’s International Realty Canada said in a report released Wednesday.

Data compiled by the realtor in Canada’s four largest real estate markets predicts little deviation from ongoing trends.

A B.C. Supreme Court ruling will send shock waves through the arm of the Canadian real-estate market that is powered by foreign capital, say immigration lawyers.

The ruling targets a weakness in Canadian laws that often leads foreign owners of real estate in cities such as Metro Vancouver and Toronto to claim they are “residents of Canada for tax purposes” when they are not.

Sask. property owners to pay $67M more education tax this year (CBC News)

Thanks to measures contained in the provincial budget, many people who pay education property taxes could see a “substantial” increase, the Saskatchewan School Boards Association says.

The Saskatchewan government has set mill rates that will result in $67 million more in property tax revenue — a 10 per cent increase.

USA

Detroit was once known as a city where a working-class family could afford to own a home. Now it’s a city of renters.

Just 49 percent of Motor City households were homeowners in 2015, down from 55 percent in 2009 and the lowest percentage in more than 50 years. Detroit isn’t alone, of course: The rate of U.S. home ownership fell steadily for a decade as the foreclosure crisis turned millions of owners into renters and tight housing markets made it hard for renters to buy homes. Demographic shifts — millennials (finally) moving out of their parents basements, for instance, or a rising Hispanic population — further fed the renter pool.

Low Homeownership Rates May Have Cost The U.S. Economy $300B Last Year (Bisnow)

Homeownership rates are nearing a 50-year low, and a recent study said these low rates are in part to blame for the country’s slow economic growth.

If construction levels had reached the long-term average last year, U.S. gross domestic product would have been 1.8% higher during 2016, according to Rosen Consulting Group’s research. That equals an influx of more than $300B, the Wall Street Journal reports. A growing number of Americans shifting in favor of renting is exacerbating the demand for housing construction, with recent reports showing even the wealthiest Americans increasingly prefer renting apartments and single-family homes to owning.

New home sales hit seven-month high; jobless claims rise (Reuters)

New U.S. single-family home sales jumped to a seven-month high in February, suggesting the housing market recovery was gaining momentum despite higher prices and rising mortgage rates.

Other data on Thursday showed an unexpected increase in the number of Americans filing for unemployment benefits last week. Still, the labor market continues to tighten, which together with the strength in housing, should underpin economic growth.

International

London Landlords Put $2.5B Worth Of Property On The Market Within The Past Month (Bisnow)

In the past month London office landlords put properties worth roughly $2.5B on the market as Asian investors continued to pay record prices for properties despite the concerns fueled by Brexit.

A Hong Kong developer recently agreed to pay $1.44B for the Cheesegrater building, also known as the Leadenhall Building, in addition to several other owners looking to sell large stakes in London office buildings, Bloomberg reports. Despite Prime Minister Theresa May’s plans to pull the trigger on Brexit come March 29, experts said the market is robust for top assets. Though it is worth noting that experts believe the focus of these deals is largely on income instead of pushing new developments.

Egyptian real estate market: a future between skyrocketing prices and fear of recession (Daily News Egypt)

Egypt has suffered for over half a decade from turbulences and uncertainty. Since the 25 January Revolution, the economy encountered numerous challenges, from political unrest and declining tourism to foreign currency and fuel shortages.

Consequently, to adopt an economic reform programme aiming to improve Egypt’s public finances, the authorities decided to introduce the value-added tax (VAT) law; raise the price of subsidised fuel; free-float the Egyptian pound; and obtain loans from the International Monetary Fund (IMF), the World Bank, China, and others to finance its ambitious programme in the period between September and November 2016.

Asian Investors Spent Over $5.5B For These Seven Assets In 2016 (Bisnow)

Despite some volatility in the foreign investment market in 2016, Asian investors continued to pump billions into the U.S. economy in the form of office building acquisitions. Yardi Matrix sales data determined the highest value office transactions made by Asian investors in 2016, and the price tag for the top seven rings in at more than $5.5B.

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