High gas prices hurting? That’s exactly what Trudeau wants
The Trudeau Liberals must be patting themselves on the back every time they pass a gas station, after all, these unaffordable pump prices are precisely what they want.
Inflation hasn’t been this high since the Pierre Elliott Trudeau government back in the early ’80s. Canadians are struggling to afford groceries and other basics. But that hasn’t stopped the current Trudeau government from divulging its plan for a second carbon tax.
Feigned concern about high pump prices has been dropped in Ottawa. This is deliberate.
Prime Minister Justin Trudeau’s second carbon tax is part of new fuel regulations that require producers to reduce the carbon content of their fuels. When companies can’t meet those requirements, they’ll be charged the second carbon tax, which is then passed to the consumer.
Trudeau knows who will bear the most pain. His government’s own analysis spells it out.
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The Trudeau Liberals must be patting themselves on the back every time they pass a gas station, after all, these unaffordable pump prices are precisely what they want.
Inflation hasn’t been this high since the Pierre Elliott Trudeau government back in the early ’80s. Canadians are struggling to afford groceries and other basics. But that hasn’t stopped the current Trudeau government from divulging its plan for a second carbon tax.
Feigned concern about high pump prices has been dropped in Ottawa. This is deliberate.
Prime Minister Justin Trudeau’s second carbon tax is part of new fuel regulations that require producers to reduce the carbon content of their fuels. When companies can’t meet those requirements, they’ll be charged the second carbon tax, which is then passed to the consumer.
Trudeau knows who will bear the most pain. His government’s own analysis spells it out.
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“Increases in transportation fuel expenses will disproportionately impact lower and middle-income households, as well as households currently experiencing energy poverty or those likely to experience energy poverty in the future,” reads the government’s analysis.
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Reverse mortgage market has plenty of room to grow, but risks abound
Lenders should be wary of unique risks such as longevity risk and appraisal risk, DBRS Morningstar report finds
In a July 11 report, analysts at the ratings agency noted that the penetration of the Canadian reverse mortgage market is lagging behind other developed economies (most notably the United Kingdom and Australia) with less than 0.5 per cent of more than six million senior households holding a reverse mortgage.
However, a rapidly aging population could bring significant growth to the segment and more risks with it.
Reverse mortgages are loans secured by a borrower’s home that give the owner access to its equity. Unlike a traditional mortgage, there is no defined time period or amortization schedule and no monthly principal or interest payments. The loan does not need to be paid back until the borrower moves out of the home, sells the property or passes away.
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Lenders should be wary of unique risks such as longevity risk and appraisal risk, DBRS Morningstar report finds
In a July 11 report, analysts at the ratings agency noted that the penetration of the Canadian reverse mortgage market is lagging behind other developed economies (most notably the United Kingdom and Australia) with less than 0.5 per cent of more than six million senior households holding a reverse mortgage.
However, a rapidly aging population could bring significant growth to the segment and more risks with it.
Reverse mortgages are loans secured by a borrower’s home that give the owner access to its equity. Unlike a traditional mortgage, there is no defined time period or amortization schedule and no monthly principal or interest payments. The loan does not need to be paid back until the borrower moves out of the home, sells the property or passes away.
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That structure brings longevity risk, in which it takes longer than expected to recover the money loaned, into play. The report said longevity risk was greatly influenced by the borrower’s age.
Shokhrukh Temurov, vice-president of North American financial institutions at DBRS Morningstar, said that overheated housing markets, which have predominated in recent years, can also lead to more of the risk being shouldered by lenders rather than borrowers.
That’s because newer vintages are more exposed to a correction, though older ones become more secured by the higher home values.
“As long as the market corrects itself (as we’re starting to see now), the property values move in a more reasonable range, the risks should be managed by the banks,” Temurov said.
The potential for prices to swing dramatically makes the valuation process important, said Temurov, noting “appraisal is really critical for this product.
DBRS Morningstar estimates the reverse mortgage market at less than $6 billion as of the first quarter of this year, with two lenders shouldering most of the load: HomeEquity Bank and Equitable Bank Inc. HomeEquity Bank holds the largest reverse mortgage loan book with approximately $5.4 billion as of the first quarter in 2022 and accounts for more than 90 per cent of the estimated reverse mortgage loans in the country. Last September, the Ontario Teachers’ Pension Plan acquired the company’s parent from Birch Hill Equity Partners Management Inc. Equitable Bank, while a smaller player in the market, saw its loan book grow to $304 million at the end of this year’s first quarter.
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Shokhrukh Temurov, vice-president of North American financial institutions at DBRS Morningstar, said that overheated housing markets, which have predominated in recent years, can also lead to more of the risk being shouldered by lenders rather than borrowers.
That’s because newer vintages are more exposed to a correction, though older ones become more secured by the higher home values.
“As long as the market corrects itself (as we’re starting to see now), the property values move in a more reasonable range, the risks should be managed by the banks,” Temurov said.
The potential for prices to swing dramatically makes the valuation process important, said Temurov, noting “appraisal is really critical for this product.
DBRS Morningstar estimates the reverse mortgage market at less than $6 billion as of the first quarter of this year, with two lenders shouldering most of the load: HomeEquity Bank and Equitable Bank Inc. HomeEquity Bank holds the largest reverse mortgage loan book with approximately $5.4 billion as of the first quarter in 2022 and accounts for more than 90 per cent of the estimated reverse mortgage loans in the country. Last September, the Ontario Teachers’ Pension Plan acquired the company’s parent from Birch Hill Equity Partners Management Inc. Equitable Bank, while a smaller player in the market, saw its loan book grow to $304 million at the end of this year’s first quarter.
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For Sale
Richmond Hill Ontario
Att/Row/Townhouse
For Sale Listed for: $998,000
3 Bedrooms
3 Bathrooms
2 Garages
Property Type: Att/Row/Townhouse, 3-Storey
Size: 1,500 - 2,000 feet²
Lot Size: 19.00 × 80.00 feet
Annual Property Taxes: $3,473.96/2022
Parking: Built-In 2 Garages
Basement: None
Description:
Only 1-Year-Old 3-Storey Townhouse Located in the Heart of Richmond Hill Surrounded by Parks! Luxurious 3Bdrs Plus Great Room (Can be used as 4th Bdr). 1831 Sf with 2 Car Attached Garage. Individual Front Entrance Stairs! Featuring 9' Main Floor, Smooth Ceilings & Laminate Floors Thru-Out; Upgraded Kitchen with Quartz Countertop, Centre Island, S/S Appliances; Oak Stairs; Master Bdr W/5 Pc-Ensuite. Minutes to Everything! Walk to Viva/YRT Bus Stops, Yonge St, Restaurants & Supermarket, & Banks. Top-Ranked Public/Catholic/Private Schools.
For Booking please call:
Hojjatollah Izady
Realtor
HomeLife/Cimerman Real Estate Ltd., Brokerage
647-772-9502
hoizady@yahoo.com
.
Richmond Hill Ontario
Att/Row/Townhouse
For Sale Listed for: $998,000
3 Bedrooms
3 Bathrooms
2 Garages
Property Type: Att/Row/Townhouse, 3-Storey
Size: 1,500 - 2,000 feet²
Lot Size: 19.00 × 80.00 feet
Annual Property Taxes: $3,473.96/2022
Parking: Built-In 2 Garages
Basement: None
Description:
Only 1-Year-Old 3-Storey Townhouse Located in the Heart of Richmond Hill Surrounded by Parks! Luxurious 3Bdrs Plus Great Room (Can be used as 4th Bdr). 1831 Sf with 2 Car Attached Garage. Individual Front Entrance Stairs! Featuring 9' Main Floor, Smooth Ceilings & Laminate Floors Thru-Out; Upgraded Kitchen with Quartz Countertop, Centre Island, S/S Appliances; Oak Stairs; Master Bdr W/5 Pc-Ensuite. Minutes to Everything! Walk to Viva/YRT Bus Stops, Yonge St, Restaurants & Supermarket, & Banks. Top-Ranked Public/Catholic/Private Schools.
For Booking please call:
Hojjatollah Izady
Realtor
HomeLife/Cimerman Real Estate Ltd., Brokerage
647-772-9502
hoizady@yahoo.com
.
Canadian Home Prices Down Year-Over-Year for First Time Since Start of Pandemic
National real estate activity continued to slow in June in the face of rising interest rates, leading to a 23.9% annual plunge in sales from last year’s record, and the first year-over-year price decline seen since the early months of the pandemic.
The Canadian Real Estate Association reports a total of 40,107 homes sold last month, marking a 5.6% dip from May, at an average seasonally-adjusted price of $665,850 — down 1.8% annually, and by -4.3% month over month. That reflects a significant turnaround from price trends over the last two years, when searing year-over-year price growth became the norm; the last time home values dipped annually was in May of 2020, by 2.3%.
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National real estate activity continued to slow in June in the face of rising interest rates, leading to a 23.9% annual plunge in sales from last year’s record, and the first year-over-year price decline seen since the early months of the pandemic.
The Canadian Real Estate Association reports a total of 40,107 homes sold last month, marking a 5.6% dip from May, at an average seasonally-adjusted price of $665,850 — down 1.8% annually, and by -4.3% month over month. That reflects a significant turnaround from price trends over the last two years, when searing year-over-year price growth became the norm; the last time home values dipped annually was in May of 2020, by 2.3%.
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Compared to the price peak recorded in February of this year, Canadian home prices have fallen 18.4%, a dollar amount of $150,870. The MLS® Home Price Index (HPI) edged down 1.9% month-over-month but was still up 14.9% year-over-year. However, that’s less than half of the 30% increases seen in January and February.
Sales were down in three-quarters of all local markets, especially in the nation’s largest cities including the Greater Toronto Area, Greater Vancouver, Calgary, Edmonton, Ottawa, and Hamilton-Burlington. That resulted in softer prices in those locales, CREA reports, especially in Ontario and parts of British Columbia (though Greater Vancouver remained largely stable). Prices remained flat across the prairies, and dipped slightly in Quebec, and “appear to have stalled” in Halifax-Dartmouth while rising in the rest of the Maritimes.
The number of newly listed properties continued to rise, up 4.1% from May and 10% from the same time in 2021, at 77,518.
“Sales activity continues to slow in the face of rising interest rates and uncertainty,” said Jill Oudil, Chair of CREA. “The cost of borrowing has overtaken supply as the dominant factor affecting housing markets at the moment, but the supply issue has not gone away. While some people may choose to wait on the sidelines as the dust settles in the wake of recent rate hikes, others will still engage in the market in these challenging times.”
Market balance continued to improve as the pace of new inventory grew more than sales, helping ease the sales-to-new-listings ratio to 51.7%, its lowest level since January 2015, and below the long-term average of 55.1%. This ratio, which gauges the level of buyer competition in the market, reflects a balanced market between a range of 40 – 60%, with above and below that threshold indicating sellers’ and buyers’ markets, respectively. According to CREA, three-quarters of all local markets could have been considered balanced in June.
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Sales were down in three-quarters of all local markets, especially in the nation’s largest cities including the Greater Toronto Area, Greater Vancouver, Calgary, Edmonton, Ottawa, and Hamilton-Burlington. That resulted in softer prices in those locales, CREA reports, especially in Ontario and parts of British Columbia (though Greater Vancouver remained largely stable). Prices remained flat across the prairies, and dipped slightly in Quebec, and “appear to have stalled” in Halifax-Dartmouth while rising in the rest of the Maritimes.
The number of newly listed properties continued to rise, up 4.1% from May and 10% from the same time in 2021, at 77,518.
“Sales activity continues to slow in the face of rising interest rates and uncertainty,” said Jill Oudil, Chair of CREA. “The cost of borrowing has overtaken supply as the dominant factor affecting housing markets at the moment, but the supply issue has not gone away. While some people may choose to wait on the sidelines as the dust settles in the wake of recent rate hikes, others will still engage in the market in these challenging times.”
Market balance continued to improve as the pace of new inventory grew more than sales, helping ease the sales-to-new-listings ratio to 51.7%, its lowest level since January 2015, and below the long-term average of 55.1%. This ratio, which gauges the level of buyer competition in the market, reflects a balanced market between a range of 40 – 60%, with above and below that threshold indicating sellers’ and buyers’ markets, respectively. According to CREA, three-quarters of all local markets could have been considered balanced in June.
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Proposal to Hike Toronto Development Charges By 50% Raises Supply Concerns
Given the shortage of housing in the Greater Toronto Area, a new proposal to increase development charges (DCs) — the levies developers must pay to support surrounding infrastructure when embarking on a new build — by nearly 50% have housing supply advocates scratching their heads.
The hike, which is set to be formally approved by Toronto’s City Council this month, is slated to take effect in May when the existing bylaw expires. These charges are assessed on a five-year basis by a third party consultant, who determines the required new rate based on the City’s existing and planned infrastructure projects.
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Given the shortage of housing in the Greater Toronto Area, a new proposal to increase development charges (DCs) — the levies developers must pay to support surrounding infrastructure when embarking on a new build — by nearly 50% have housing supply advocates scratching their heads.
The hike, which is set to be formally approved by Toronto’s City Council this month, is slated to take effect in May when the existing bylaw expires. These charges are assessed on a five-year basis by a third party consultant, who determines the required new rate based on the City’s existing and planned infrastructure projects.
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DCs are an important source of funding for municipalities: in Toronto, they help foot the bill for everything from sewer maintenance to the construction of the Eglinton Crosstown LRT.
However, the building industry has been sounding the alarm over the most recent increase proposal, saying it will further delay the creation of gentle density housing and drive prices even higher for the end user.
A “Multiplex Housing Financial Feasibility Exercise” prepared for the City by the Urban Land Institute (ULI) Toronto on the financial feasibility of multiplex projects in the Yellowbelt found that the added costs of DCs would “likely prevent many multiplex projects from proceeding.”
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However, the building industry has been sounding the alarm over the most recent increase proposal, saying it will further delay the creation of gentle density housing and drive prices even higher for the end user.
A “Multiplex Housing Financial Feasibility Exercise” prepared for the City by the Urban Land Institute (ULI) Toronto on the financial feasibility of multiplex projects in the Yellowbelt found that the added costs of DCs would “likely prevent many multiplex projects from proceeding.”
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