HOUSING

Politicians will spar over how to tackle the housing crisis. Falling interest rates will draw young people into the real estate market. And a rude awakening is coming for homeowners renewing mortgages.

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1 Toronto's Condo Market Will Plummet

After a few years of stagnant pricing, the Toronto condo market is poised for a plunge.In the first half of 2024, sales of newly built condos fell by 57 per cent year over yearthe biggest slowdown since 1997-largely due to high interest rates. The number of condo listings is now much higher than recent averages, and sales remain low. TD says prices will keep declining, then recover modestly by year's end. Then we may face the opposite problem: since the downward trend has spooked condo investors, who account for 70 per cent of pre-construction sales, condo starts have also dropped dramatically.In the long run, that could mean a condo shortage, driving prices up again.

2 B.C. Will Tax House Flippers

Bad news for West Coast real estate investors: on January 1, British Columbia will implement a flipping tax aimed at curbing short-term investments and boosting the province's minuscule vacancy rates. The first of its kind in Canada, the tax will apply to those selling property they've owned for less than 730 days, with some exceptions for circumstances like job relocations, deaths and divorces. Sellers who've owned their homes for 365 days or less will be taxed at 20 per cent of income on the sale, with the rate gradually decreasing to zero by the two-year mark. The rule is in addition to the federal flipping tax, introduced in 2022, which makes the capital gains from the sale of a home taxable as business income.

3 Interest Rates Will Keep Dropping