Housing market continues to cool down - thestar.com
Housing prices climbed steeply in urban Canada at a time of moderate wage increases and job losses. This could not have been sustained over the long run. At the end of the day, mortgage rates would climb and the affordable mortgages would suddenly become unaffordable. Speculation can help with housing prices, but only for a short time.
Many economic forecasters and observers have started to call the current slowdown in the United States a double-dip recession. The stimulus funds are running out and suddenly the economy seems to be applying breaks in the United States. this again is not good for the Canadian economy that send 70% of its exports to the United States. With the exports falling in Canada, the job markets would falter shortly afterward and then the resale housing market will experience a decline.
Also reported in the Globe and Mail is the concern that housing starts in Canada re slowing down. This should have a lot to do with Ontario. The new HST adds an additional 8% to the purchase price of new homes over a certain threshold. The tax was introduced in July 2010. This sudden increase in price was expected to drive consumers away from the largest housing market in Canada, i.e., Toronto. Builders should have known this and they adjusted their supply chains accordingly.
Hi, my name is Grahame with the Ontario Ministry of Revenue. I read your post and wanted to add the following comments.
ReplyDeleteThe number one thing that can be done to ensure that people can afford a home is to ensure that people have a job. The HST is estimated to increase investment by $47 million and almost $600,000 jobs.
The HST will not apply to homes under $400,000 and will not apply to resale homes regardless of the price.
The HST is part of this comprehensive tax package that will see 93 per cent of Ontarians receive personal income tax cut. With these cuts Ontario now has the lowest provincial tax rate in Canada on the first $37,106 of taxable income. In fact, 90,000 low-income Ontarians will no longer have to pay Personal Income Tax.
To help families we have introduced a permanent $260 Sales Tax Credit for low- and middle-income adults, children and seniors. In total $4.2 billion in transition payments will be delivered to help Ontarians adjust to the Harmonized Sales Tax. It is important to remember that every $100 in tax relief is equivalent to the 8% tax on $1250 in newly taxed items.
Find more information at: www.ontario.ca/taxchange