The Tax-Free First Home Savings Account (“FHSA”) explained

[Invis - May 5, 2022] If you or someone you know is saving for a downpayment on their first home, the Federal government announced a new program aimed at first-time buyers in their recent budget. The First Home Savings Account combines the features of an RRSP and TFSA to give prospective homeowners some tax relief and a boost toward their homeownership goals.   Here are the highlights: Account holders can contribute up to $8,000 annually, up to a lifetime maximum of $40,000. [...]

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New tax-free home savings account, foreign buyer ban top budget plan to tackle housing affordability

[CBC - April 7, 2022] Government pledges to double pace of new home construction to 400,000 annually to target supply issues The federal government outlined its plans to tackle sky-high housing costs in Thursday's budget — including a temporary ban on foreign buyers, a crackdown on speculators, a pledge to double the pace of new home construction and a new tax-sheltered way for Canadians to save up to buy a home. The government is moving ahead with something it floated on the [...]

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Bank of Canada hikes rates for first time since 2018

[BNN - March 2, 2022] OTTAWA -  The Bank of Canada raised its overnight lending rate by 25 basis points to 0.50 per cent on Wednesday, marking the first time the central bank has tightened monetary policy since 2018, while highlighting how Russia's attack on Ukraine could weigh on global growth and lift commodity prices further. The central bank cited strong recent economic growth in Canada, resilient household spending despite the surge of the Omicron COVID-19 variant and inflation figures that are "well above" the [...]

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Broken Supply Chains by Steve Saretsky

Steve Satetsky Group - January 17, 2021     As of this week, unvaccinated US truckers will not be able to cross the Canadian border. This decision by the Trudeau government is going to have significant economic impacts. COVID politics aside, let's discuss the economic ramifications moving forward and how this could ultimately come full circle for the housing market.   More than 70% of cross-border trade moves by truck. Canada imports $21B worth of food from the US each year. Suffice to say, [...]

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Canada’s bank regulator keeps mortgage stress test unchanged despite spiking home prices, rising household debt

[Globe and Mail - December 17, 2021] Canada’s bank regulator said it is not changing the mortgage stress test, calling the borrowing rules “adequate,” even as home prices continue to accelerate and household debt rapidly increases. The Office of the Superintendent of Financial Institutions, or OSFI, said the mortgage stress test for uninsured mortgages will continue to require borrowers to qualify at a rate of 5.25 per cent. The Finance Department also said the rate would remain the same for borrowers [...]

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Sales have calmed from earlier in 2021 but tight supply conditions are expected to continue to drive prices higher

[Crea - September 15, 2021] Ottawa, ON September 15, 2021 – The Canadian Real Estate Association (CREA) has updated its forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate boards and associations. Over the past several years, record levels of international immigration (not including 2020), low interest rates, and an increasingly middle-aged Millennial cohort have come together to fuel very strong household formation and housing demand in Canada. Recall that prior to COVID-19, the [...]

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How to choose between selling your home and taking out a reverse mortgage

[Financial Post - September 23, 2021] Homeowners who need funds should weigh their options before tapping a home for income Just because you’re house-rich doesn’t mean you can’t go broke. Many homeowners who lack sufficient retirement income can find themselves faced with a difficult choice: sell a beloved home or turn it into an emergency income source. One option is to take out a reverse mortgage, which can let them maintain their lifestyles while staying put. But it’s a big decision. While a conventional [...]

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Interest Outlook: Rate Hike Coming in Q4 2022

[The Motley Fool - October 6, 2021] The forecasts for the interest rate hike are varied, but the consensus is Q4 2022. Investors looking for buying opportunities before it happens should consider National Bank of Canada stock or Real Matters stock for income or growth. Most economists and market analysts predict that the Bank of Canada will increase its interest rate by Q4 2022. Well Fargo’s outlook is more hawkish than the consensus forecast. The American bank says the initial rate [...]

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Bank of Canada researchers argue in favour of inflation overshoots following recessions

[Globe and Mail - July 28, 2021] Central bankers should let inflation run temporarily above target when the economy is coming out of a severe recession, according to new Bank of Canada research that provides a window into how the central bank is thinking about inflation as the pandemic wanes. The paper, published last week by three senior bank economists, argues that monetary policy should allow inflation to rise above the bank’s 2-per-cent target following major recessions where interest rates hit [...]

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Banking on mom and dad

[Toronto Sun - July 24, 2021] As housing prices hit an all-time high and continue to rise across the country, homeownership is out of reach for about three-quarters of Canadians, leaving many new homebuyers counting on the Bank of Mom and Dad. “With the housing market pricing many Canadians out of the market, younger generations are forced to turn to their parents to close the gap,” says Manulife Bank president and CEO Rick Lunny. If you’re thinking of helping your child purchase [...]

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