Boom in property prices? In Canada it has come to an end!
The economy is almost always unpredictable. There are multiple factors that can determine the success of one strategy and the failure of others. Basically, when the period is flourishing, although certain prices may be high, the demand curve does not change, but meets perfectly with the supply curve.
If therefore it is easy to understand when a nation is going through an excellent phase, on the other hand it is impossible to predict how long this parenthesis will last. This was the phenomenon that affected one of the most unique and envied states in the world in several respects: Canada!
After a constant and sudden increase in property prices, in recent years, up to the all-time high recorded in 2018, this country is experiencing a sharp slowdown, followed by a parallel decline, also accompanied by increasingly growing interest rates and a slow economy. In addition to the fall in demand, there is also a strong weakening of the construction sector, which has always been a leader in the Canadian nation.
Sales contracts fell by 20% compared to the last quarter of 2018. But we are entering this sector crisis even more, with an even more detailed analysis.
According to the Canadian Real Estate Association (CREA):
• Apartment prices recorded annual revenues of 4.85% - but last year they increased by 19.69%
• Terraced houses increased by 3.06% - but last year they increased by 12.07%
• The average price of a single-storey single-family house fell by 0.27%, while two-storey houses increased by 0.4%.
• Victoria house prices highlight the largest increase of 5.95% compared to 2018, followed by Ottawa (5.8%), Hamilton (4.48%), Montreal (4.27%), Toronto (3, 62%) and Vancouver (1.41%)).
• Calgary deflated house prices (-2.64%), Edmonton (-1.87%), Winnipeg (-0.49%), Quebec (-0.14%) and Halifax (-0.04% ).
One of the problems that has generated this stalemate, is given, as we have previously mentioned, by extremely high taxes. the gross rent is subject to a fixed tax of 25 percentage points.
Yet non-residents can choose to pay, pursuant to art. 216 of the income tax law, taxes on their net income at progressive federal rates. Even non-residents who choose section 216 are subject to a 48% surcharge.
We also remind you that only 50% of the capital gains are subject to tax. Capital gains are calculated by deducting the costs incurred for the sale and purchase of the property, capital expenditures and such costs as additions and improvements to the property.
It is important to note that there is no inheritance or inheritance tax in Canada!
It seems strange, but in all this, there is still a plus point that allows the Canadian real estate market to stay afloat. We are talking about transaction costs: very low!
What to say, we hope that we can activate policies aimed at resolving these problems, so that this country can return to its maximum splendor!
If therefore it is easy to understand when a nation is going through an excellent phase, on the other hand it is impossible to predict how long this parenthesis will last. This was the phenomenon that affected one of the most unique and envied states in the world in several respects: Canada!
After a constant and sudden increase in property prices, in recent years, up to the all-time high recorded in 2018, this country is experiencing a sharp slowdown, followed by a parallel decline, also accompanied by increasingly growing interest rates and a slow economy. In addition to the fall in demand, there is also a strong weakening of the construction sector, which has always been a leader in the Canadian nation.
Sales contracts fell by 20% compared to the last quarter of 2018. But we are entering this sector crisis even more, with an even more detailed analysis.
According to the Canadian Real Estate Association (CREA):
• Apartment prices recorded annual revenues of 4.85% - but last year they increased by 19.69%
• Terraced houses increased by 3.06% - but last year they increased by 12.07%
• The average price of a single-storey single-family house fell by 0.27%, while two-storey houses increased by 0.4%.
• Victoria house prices highlight the largest increase of 5.95% compared to 2018, followed by Ottawa (5.8%), Hamilton (4.48%), Montreal (4.27%), Toronto (3, 62%) and Vancouver (1.41%)).
• Calgary deflated house prices (-2.64%), Edmonton (-1.87%), Winnipeg (-0.49%), Quebec (-0.14%) and Halifax (-0.04% ).
One of the problems that has generated this stalemate, is given, as we have previously mentioned, by extremely high taxes. the gross rent is subject to a fixed tax of 25 percentage points.
Yet non-residents can choose to pay, pursuant to art. 216 of the income tax law, taxes on their net income at progressive federal rates. Even non-residents who choose section 216 are subject to a 48% surcharge.
We also remind you that only 50% of the capital gains are subject to tax. Capital gains are calculated by deducting the costs incurred for the sale and purchase of the property, capital expenditures and such costs as additions and improvements to the property.
It is important to note that there is no inheritance or inheritance tax in Canada!
It seems strange, but in all this, there is still a plus point that allows the Canadian real estate market to stay afloat. We are talking about transaction costs: very low!
What to say, we hope that we can activate policies aimed at resolving these problems, so that this country can return to its maximum splendor!
