As many of you know,the federal government introduced new regulations for mortgage lending in Canada. Consequently, consumer confidence was replaced by a feeling of uncertainty. It triggered a decline in new home sales, as purchasers sat waiting to see what would happen to the state of the market. The decline observed so far could be interpreted as a trend. The high-rise sector still holds a prominent share of the market with 1,914 sales in October 2012, which is the fifth highest October on record. Total new home sales point to the second lowest October we have recorded, and year-to-date sales slipped below the long-term average for the first time in 2012. If this trend continues, it will adversely affect job creation in the coming years and, subsequently, restrict the economic growth both locally and provincially.
If you look around you, it’s likely that a few of those strangers are employed by the building and development industry, whether they work as an engineer, a planner or on construction site. In fact, this industry is one of the largest employers in the region, creating more than 193,000 jobs in 2011, paying $10.1 billion in wages. That money is then pumped back into our economy through the purchase of groceries, clothing and transportation, making building and development a key contributor to economic growth.
It’s worth pointing out that the GTA is one of the fastest-growing regions in North America, with 100,000 new residents choosing to move here every year. Our industry has calculated that we must build approximately 40,000 new homes each year to accommodate this population growth.
With limited construction of new rental properties, new residents of the GTA also rely on the condominium market for quality, affordable rental housing options.
It is important to understand the stability and the resilience of the new homes industry, particularly the high-rise sector, which is still the fourth highest on record as of the end of October 2012. This is largely due to the shift toward high-density housing in the GTA, coupled with the fact that condominiums are situated in prime locations with easy access to transit and amenities. Most importantly, however, is that condos offer affordable means to home ownership.
If you are a first-time buyer looking to purchase a new home or condo, make sure that you look into some of the helpful government incentives that you may be eligible for with your first home purchase.
For example, first-time home buyers who acquire a qualifying home in Canada are eligible for a First-Time Home Buyers Tax Credit. The credit is based on $5,000 multiplied by the lowest federal income tax rate for the year which, based on 2011 figures, could amount to approximately $750.
Additionally, the Province of Ontario offers a rebate on Land Transfer Tax for first-time buyers, with the potential to get back up to $2,000. Visit the Ministry of Finance website to find out more.
Finally, purchasers in the City of Toronto will be happy to learn that first-time buyers are eligible for a rebate on the Municipal Land Transfer Tax as well. This rebate can total up to $3,725. More information is available on the city’s website.
It’s important to do your research and find out how much you can afford, but don’t let anyone scare you into thinking there isn’t a home out there that’s right for you.
Reference: Condo Life March 2013