Daily Market Update

Affordability issues on the horizon but ‘no threat yet’ says bank … consumer confidence drops in Ontario ahead of election … One province's tax system baffles developer

Bank Keeps An Eye on Affordability

We all like the value of our property to increase and on paper some of the rises we have seen, and continue to see, are very pleasing. The issue on the horizon though is always affordability. There’s little point trying to cash in on your house’s inflated market value if no one has the funds to buy. The Royal Bank of Canada, in publishing its affordability index for the first quarter of 2014, says that affording a home is becoming increasingly hard and is set to get worse. With interest rates certain to rise at some point (although perhaps still 18 months or so away) this will further squeeze household incomes and put the housing market under pressure. Of course there are exceptions to the rule; certain areas and property types buck the trend, especially where foreign investors are buying. The Bank says there’s no immediate threat but this has been the third quarter of the last four that the affordability index has risen. Read the full story.
Consumer Confidence Steady – Except in Ontario
House prices may be high but in Ontario consumer confidence is in decline. With the region’s manufacturing hit by the global recession of recent years, pushing unemployment above the national average, and with an election looming which could see austerity measures and higher taxes for the wealthy. The elections next month could therefore affect the housing market and will be watched closely by residents and investors alike. Read the full story.
Developer Baffled by Illogical New Brunswick Tax System
A developer in Saint John says the property tax assessment system has no logic after he challenged an inflated assessment. Doug Robinson was hit with a $30,000 hike in the assessment on two of his properties and also valued two identical properties with a $40,000 difference in rates. He appealed in the case of the 30K increase and the decision was reversed. Mr Robinson said that if he hadn’t appealed, Service New Brunswick would have “picked his pocket”. Staffing levels mean that SNB only visit properties once every ten years although assessments are set annually based on market value and other appraisal methods. Read the full story.