The 2025 Federal Budget puts housing front and center with new initiatives aimed at tackling affordability and boosting supply across Canada.
How Could U.S. Tariffs Impact the GTA Housing Market?
With the impending U.S. tariffs on Canadian exports, many are wondering what this could mean for the real estate market, particularly in the Greater Toronto Area. While it may seem like an issue confined to international trade, these tariffs could have a direct impact on housing costs, construction, and market trends.
Higher costs for key building materials such as steel, aluminum, and lumber could push up construction expenses, leading to increased home prices and potential delays in new developments. If suppliers redirect their products to the Canadian market to offset the effects of tariffs, this won’t necessarily drive prices down. Instead, material costs may rise due to continued demand and potential supply shortages.
Another factor to consider is the Canadian dollar. If tariffs weaken Canada’s export sector, the loonie could decline against the U.S. dollar, making imported materials and construction equipment more expensive. Higher costs, combined with potential supply chain disruptions, could further drive up the price of new homes.
Beyond materials and currency fluctuations, there’s also the broader economic impact. If key industries like manufacturing and forestry face setbacks due to trade restrictions, job losses and economic uncertainty could slow housing demand. At the same time, inflationary pressures may prompt the Bank of Canada to raise interest rates, making mortgages and construction loans more costly. Developers may delay or cancel projects in response, further constraining housing supply.
For buyers and sellers, this creates a complex landscape. If supply tightens and costs continue to rise, affordability could become an even greater challenge. However, economic uncertainty might also lead to a temporary slowdown in demand, which could present opportunities for those ready to make a move.
The real estate market is always evolving, and staying informed is key. If you’re considering buying, selling, or investing, now is the time to have a strategic conversation about your next steps. Reach out to discuss how these changes could impact your real estate goals.
2024 Budget: Changes to the Non-Resident Speculation Tax (NRST)
With the recent release of the 2024 Ontario budget, the province is making some changes to the Non-Resident Speculation Tax (NRST). The NRST is the tax on the purchase or acquisition of an interest in residential property located anywhere in Ontario by individuals who are not Canadian citizens or permanent residents of Canada or by foreign corporations or taxable trustees.
Effective March 27, 2024, the following changes include:
The rebate application deadline for foreign nationals who become permanent residents of Canada has been extended from 90 to 180 days.
The NRST will now apply to the standalone purchase of a parking space or storage unit. Previously this only applied if the spaces were coupled with the purchase of a residential unit.
Changes were made to the qualifying rules for rebates and exemptions under the NRST:
A purchaser must intend to occupy the home as their principal residence within 60 days of their purchase date.
A purchaser must occupy the home as their principal residence until a rebate application is filed to remain eligible for a rebate.
Enrolment or Employment for the international student/worker rebates must begin within 30 days of home purchase. (The rebates have been eliminated but transitional provisions allow applications until March 31, 2025).
Spousal status must be obtained on or before the date of home purchase to be eligible for the exemption or rebate.
Exemptions and rebates are not available if a foreign entity who is not on title acquires a beneficial interest in the home.
View the Ministry of Finance Letter on Changes to the NRST for more details. For further information on the Non-Resident Speculation Tax, click here.
The Devil is in the Details
Toronto Star Headlines - Thursday August 17th.
You’ll need six figures to buy almost any GTA home, $200,000 a year for the average detached Toronto house, report says. As the cost of Toronto-area housing rises, so do the financing challenges for young adults. Read More
This article is based upon data in "The Report" that assumes that all housing is purchased with 20% down. Most of the homes we sell are well over 1 million dollars. Most, if not all, of our purchasers carry with them equity from their last house so their down payment typically is nowhere near 20%. On average it is considerably more. So don't be frightened by statistics that are somewhat deceiving! The sky is not falling in.
Remember that if you have one foot in a bucket of boiling water and the other foot in a bucket of ice cubes then someone can write a Report indicating that statistically you are a perfectly normal temperature. We are also looking forward to a brisk "normal" Fall Real Estate market, statistically speaking!