Chrystia Freeland, who also serves as the finance minister, says the issue is her top domestic concern amid affordability crisis

Canada’s finance minister has described the country’s out-of-control housing prices as an “intergenerational injustice”, as political leaders struggle to rein in a spiraling affordability crisis.

Chrystia Freeland, who also serves as Canada’s deputy prime minister, said the issue is her top domestic concern.

“We had a better shot at buying a home and starting a family than young people today, and we cannot have a Canada where the rising generation is shut out of the dream of home ownership,” she told reporters Monday, calling the current situation a “shock”.

Canada has the largest gap between incomes and house prices in the G7, according to the OECD, and two of its large cities, Vancouver and Toronto, often appear in rankings of global real estate bubbles.

In February, the country recorded its highest ever average selling price for a house, C$816,720 (US$647,340 or £497,101), with prices up 20% over the last year. The province of Nova Scotia had the largest increase of any region, with house prices leaping 35% since last year. The city of Kingston, Ontario, recorded the highest increase, with prices jumping 44%.

Politicians and economists have increasingly grown worried that such increases aren’t sustainable, but experts say there are no quick fixes to the crisis, which has been driven in part by low interest rates, market speculation and a shortage of new housing.

The Liberal government budget announced last week implemented a two-year ban on foreign house purchases in an effort to tame runaway prices. It also promised to invest C$10.14bn in housing and said it will accelerate the pace at which new houses are built, with Freeland blaming low housing stock as a prominent driver of price increases.

“We cannot have the fastest growing population in the G7 without also having the fastest growing housing stock,” she said.

Elected officials have increasingly made housing affordability the central focus of their re-election campaigns. Ontario premier Doug Ford, who faces voters in June, has blamed cities for slow zoning processes, arguing delays drive up costs.

“Believe it or not, folks, sometimes when [developers] apply for a permit, it can take four to six years,” he said late last year. “Where in North America does it take four to six years?”

Conservative leadership candidate Pierre Poilievre has also made housing affordability a top focus of his campaign. In viral video shot over the weekend in Vancouver the frontrunner blamed “big city gatekeepers”, alleging the system was meant to keep real estate investors wealthy.

On Tuesday, Statistics Canada released new data highlighting the “inequalities” in the country’s housing market.

Figures collected by the national agency found that “multiple-property owners possess nearly one-third of all residential properties” and that “the top 10% wealthiest owners account for around one-quarter of residential housing value”.

To get the most from your home in a soon-to-be ‘buyers’ market, call Joel Korn 604.722.4588, with a proven track record with multiple accolades. Joel will get you the offer you're looking for. 

Joel Korn 604.722.4588 Sutton Group West-Coast Realty 

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What is property tax?

Property tax is paid by landowners and funds municipalities’ public services, such as emergency services (fire, police, and paramedic), public schools, parks and trails, as well as road and sewer maintenance. The property tax is set based on the percentage of the market value of a given property, whether it be residential, commercial, industrial, or farm, and is paid to your municipality or regional municipality.

Can I be exempt from property tax?

Some properties and owners may be exempt from paying this tax, including religious buildings, low-income households, and any federal or provincial property. Municipalities set these rules, so it’s best to consult your local municipality for more details on exemptions and eligibility.

How is property tax calculated?

Property tax is determined by multiplying the value of a property by the base municipal and education taxation rate. These rates are set according to the type and use of a property by elected officials based on the city’s budget. They’re also determined by how much revenue comes from services, fines, and provincial transfers. Property values are determined with regular property tax assessments. 

For instance, if you owned a property valued at $300,000 and the combined municipal and education tax rate is 1.13%, your annual balance would be: $3,390. 

Your municipality will make the information in your tax statements as clear as possible so you know exactly what makes up your property tax. Some charges like waste removal or rural stormwater drainage (ditches) may show up as a flat fee, depending on your municipality or property location.

Your municipality will also give a detailed breakdown of how your tax dollars are being distributed between things such as emergency services, library services, roads and traffic, etc. Understandably, rates differ broadly across Canadian municipalities based on the types of properties, and density. 

What is a property assessment?

Property assessments are required to determine the value of your property, which then factors into how much your property tax will be. Keep in mind, property assessments are different from a home inspection or appraisal. A property assessment is the process of determining the value of a property based on the open market sale averages of other properties in the surrounding area. In the case of residential properties, the location (neighbourhood), size of the lot, building type, size, age, and the building materials used, plus any updates or additions, are taken into account to determine value.

Why are property assessments necessary?

Since all properties are different, assessments are necessary to ensure everyone pays a fair share based on the value of their property and how said property is being used. First, property values change over time, either appreciating or depreciating in value, depending on real estate market trends in those areas. Secondly, population sizes change when urban and suburban centres expand with new construction. Property assessments also play a part in determining taxation rates. If property values increase more in comparison to the municipality’s budgetary needs, a tax rate reduction may result.

Who assesses properties, and how often?

Assessments are handled differently in each province and territory and are conducted by either the municipalities, a specific branch of the provincial government, or by independent organizations commissioned by provinces and/or municipalities. Assessment intervals also differ from province to province. 

For instance, in British ColumbiaBC Assessment was formed to assess all properties annually in the province. Ontario has a similar organization, MPAC (Municipal Property Assessment Corporation), a non-profit corporation whose members are made up of Ontario municipalities, and who conduct assessments every four years. 

To dig a little deeper into assessments for your specific province, check out the links below.


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If you’re on the hunt for a first home, or even settling in, you’re likely bracing for the inevitability of paying property taxes. You probably saw the annual property taxes displayed on REALTOR.ca property listings, and might be wondering who sets these rates, what purpose property taxes serve, and how tax rates are determined.

Fortunately, you’re in the right place! Let’s put the magnifier on property tax assessments across Canada.

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NEW CREA Pilot Program Will Let Homebuyers See All Offers in Real Time


“Multiple offer scenarios have become increasingly commonplace in today’s real estate environment”


The Canadian Real Estate Association (CREA) is proud to announce a pilot project that will display real-time tracking of offers on REALTOR.ca listings, a first for Canada. Openn Offers, a ground-breaking offer management software provided by property technology company Openn Negotiation, has been selected to be integrated with REALTOR.ca, Canada’s No. 1 real estate 


Openn Negotiation, an Australian property technology company, has been in negotiation with Canadian Real Estate partners.  With CREA saying that it will kick off sometime this summer in select markets across the country. 

“Multiple offer scenarios have become increasingly commonplace in today’s real estate environment,” said CREA’s Chief Executive Officer Michael Bourque. “Canadian property buyers and sellers seek greater confidence in the process, while Canadian realtors seek tools to enable and more easily manage these situations. We’re very excited about the potential of this pilot to address both.”

The announcement came just one day before the federal government announced its intention to ban blind bidding Canada-wide in the 2022 Federal Budget. This followed a 2021 campaign promise made by Prime Minister Justin Trudeau to create a Home Buyers’ Bill of Rights, which would include the banning of blind bidding.

As rising home prices and fierce bidding wars rage-on, Canada is looking to follow the lead of other countries like Australia which use an open bidding system as a means to cool Canada’s housing market. Duncan Anderson, executive director of Openn and president of Openn North America, says that since launching, their software has offered Australian homebuyers much needed transparency.

“Through six-plus years of development, execution, and innovation in the Foreign market, we have proven that both the real estate professional and consumer benefit greatly from enhanced transparency,” Anderson said. “We are thrilled by the opportunity to partner with CREA to introduce Openn Offers to the Canadian marketplace.”

“ It’s important to note, however, that all of Australia’s home sales, as well as a large portion of New Zealand’s, are carried out via a live auction. And in Sweden, bids placed on a home are not legally binding. Both are significant departures from Canada’s typical home buying process”

Some have questioned federal government’s decision to implement open bidding, with one report from policy think tank Smart Prosperity Institute stating that not only is there no evidence to support the government’s claim that blind bidding causes prices to soar, but that actual evidence from countries like Sweden, New Zealand, and Australia suggests open bidding will lead to higher prices. It’s important to note, however, that all of Australia’s home sales, as well as a large portion of New Zealand’s, are carried out via a live auction. And in Sweden, bids placed on a home are not legally binding. Both are significant departures from Canada’s typical home buying process.

 “In Ontario, for example, the Real Estate Brokers Act prohibits realtors from revealing the dollar amount of competing bids, but requires they reveal how many other offers there are. In British Columbia, on the other hand, buyers must rely on a selling agent’s willingness to reveal how many other offers they’ve received”

The federal government has not yet provided any details on what exactly the blind bidding ban would entail or how it would be implemented. Currently, each province or territory have their own varied rules and regulations when it comes to open bidding. In Ontario, for example, the Real Estate Brokers Act prohibits realtors from revealing the dollar amount of competing bids, but requires they reveal how many other offers there are. In British Columbia, on the other hand, buyers must rely on a selling agent’s willingness to reveal how many other offers they’ve received.

Despite the current rules, the Real Estate Board of Greater Vancouver is on board with the CREA pilot.

“This opportunity is well-timed and well-suited for our market,” said Jeff King, CEO of the Real Estate Board of Greater Vancouver. “We are excited to participate in a by realtors for realtors solution that provides equality of access to information and facilitates increased transparency for the consumer.”


 
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Ways to Profit from Real Estate Investments

There are many ways to profit in Vancouver’s hot housing market and now is the time to buy. In Vancouver’s rapidly appreciating market, many are sitting on built up home Equity, which they are eligible to borrow from. I will go more into detail about home equity in my next article; however today I will be going over a few ways to invest in Real Estate with Mario Felicella.  Joel’s over 25 years industry experience, his market knowledge and relationships have elevated him to the top of Vancouver’s Realtors List. Here are a few ways Joel recommends as great opportunities. 

1. Rental Properties

Owning rental properties can be a great opportunity for individuals who have DIY renovation skills and the patience to manage tenants in order to fully maximize your profit from your investment. This strategy however requires a substantial capital to finance upfront maintenance costs and to cover vacant months; due to tenants.

Pros

  • Provides a regular income stream and properties can appreciate.

  • Maximizing Capital through leverage.

  • Many tax-deductible associated expenses.

Cons

  • Difficulty managing tenants, potential damage. 

  • Reduced income from potential vacancies. 

2. House Flipping

This is an option better suited for an experienced investor with significant experience in real estate valuation, marketing and renovation. Requires capital and the ability to do, or manage repairs as needed. Typically Flippers often look to profitably sell the undervalued  property in less than 6 months. 

 Pros

  • 1. Ties up capital for a shorter time period

  • 2. Can offer quick returns.

 Cons

  • 1. Requires a deeper market knowledge, and understanding of market value and timing.

  • 2. Fluctuating markets, cooling unexpectedly

3. Real Estate Investment Groups


REIGs are ideal for people who want to own rental Real Estate without the hassles of management. Requires a significant capital cushion and access to financing. 

Pros

  • 1. Income and Investment Property Appreciation.

  • 2. More hands-off approach than owning/managing rental properties on your own.

Cons

  • 1. Vacancy risks; finding the right tenants.

  • 2. Fees more similar to those associated with mutual funds. 

  • 3. Susceptible to unscrupulous managers

4. Real Estate Investment Trusts

REITs are suitable for investors in need of portfolio exposure in Real Estate without your traditional Real Estate Transaction. Corporation uses investors’ money to purchase and operate income properties. Purchased and sold on major stock exchanges like any other stock.

Pros

  • 1. Essential dividend-paying stocks

  • 2. Core holdings tend to be long-term, cash-producing leases.

Cons

  • 1. Leverage associated with traditional rental real estate does not apply. 

5. Online Real Estate Platforms

Real Estate investing platforms are for those who want to join others in investing in a bigger commercial or residential deal. The investment is made via online real estate platforms which are also known as ‘real estate crowdfunding’. Still requires significant investing capital, although less than what’s required to purchase the properties outright. 


Pros

  • 1. Can invest in single projects or portfolio of projects.

  • 2. Geographic diversification.

Cons
  • 1. Tend to be illiquid with lockup periods.

  • 2. High management fees.


Key Takeaways

Aspiring real estate owners can buy a property by using leverage, paying a portion of its total cost upfront, and paying off the balance over time. One of the primary ways in which 

investors can make money in real estate is to become the landlord of a rental property. People who are House Flippers, buying up undervalued or distressed  real estate, fixing it up, and selling it, can also earn significant income, by maximizing their profits. Real estate investment groups (REIGs) are a more hands-off approach to make money in real estate. Real estate investment trusts (REITs) are basically dividend-paying stocks. 

Joel Korn -  Sutton Group West-Coast Realty, does not personally endorse any of these methods specifically, and his expertise is in methods 1. Rental Properties  and 2. House Flipping.


For more information please call Joel at 604.722.4588. Sutton Group West-Coast Realty.


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