Tuesday, November 24, 2015
Monday, November 16, 2015
One month ago today Canadians gave Justin Trudeau and the Liberal Party of Canada a majority. Some people were unsure as to how this would affect Canada's economy and the housing market. I am optimistic that this will be a good thing for realtors, mortgage brokers and the general home buying public.
It was a very clear verdict that Canadians were seeking real change,” said Pramod Udiaver, CEO of online advisor service, Invisor. “The Liberals campaigned and won with a focus on the middle-class,” says Udiaver, “with many of their promises attempting to make a meaningful difference for middle-income families.”
While most Canadians still struggle with paying too much in taxes, trying to maximize savings while making sound financial decisions, the new Liberal majority government will have real impact on the nation’s real estate market.
First-time buyers might get incentives
One way the Liberals propose to deal with housing affordability is to analyze all factors that help or hinder housing affordability in Toronto and Vancouver and in other parts of Canada.
The Liberals have also made vague promises about helping the first-time homebuyer, explained Robert McLister, independent mortgage broker and founder of Ratespy.com. “This might mean looser policies, such as longer amortization limits for first-time buyers, but so far few details have been released.” First time home buyers might qualify for a 30 year mortgage term, which would lower their monthly payments
Changes to the Home Buyers’ PlanHomeowners may, yet, come out ahead with the Liberals, explained McLister. “They’ve promised to open up access to the Home Buyers’Plan (HBP), which will give more people access to money for a down payment on a house.” The HBP has a limit of $25,000 and the Liberals don’t plan to increase that but they will loosen the existing qualification rules for the HBP to allow more Canadians affected by sudden and significant life changes—such as divorce, death of a spouse or an employment move—to access their RRSP savings for a down payment.
This will be a great help to many Canadians. I don't know how many times I have had couples who are splitting up call me saying that they want to refinance their house to allow one spouse to buy out the other one. Unfortunately, many times there isn't enough equity in the home for this to happen and dad ended up moving to the basement. Think of the stress on the children and the family as a whole.
Now , if there's a shortfall, we can access RRSP money to make up for any shortages. Now Dad can get his condo and Mom and the kids avoid the conflicts that arise by being stuck under one roof.
This plan can also be used in the case of the death of a spouse. Let's say, Dad dies. Mom is alone in her home and trying to sell it. You want her to move in with your family but due to her age and infirmities she needs to live in a house with lift to access the bath tub and you need to to widen the doorways and build a wheelchair ramp. Accessing RRSP money to pay for these renovations will now be possible.
Finally, if you lose your job and find one in Ontario. The only problem is that by the time you pay realtor and legal fees to sell your home you have nothing left to pay for the move. Now you can pay for your moving expenses to move to the new job using the Home Buyers Plan.
In conclusion, the changes we can expect will help to keep home sales up during this very challenging time in Western Canada. We look forward to seeing these changes enacted as soon as possible.