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Fraser Valley real estate sales record slowest annual start in ten years; January new listings lowest in over thirty years

Home sales decline below long-term averages and inventory remains low to start 2023

Inventory remains low in Metro Vancouver while home sales dipped well below monthly historical averages in January.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,022 in January 2023, a 55.3 per cent decrease from the 2,285 sales recorded in January 2022, and a 21.1 per cent decrease from the 1,295 homes sold in December 2022.

Last month’s sales were 42.9 per cent below the 10-year January sales average.

“Due to seasonality, market activity is quieter in January. With mortgage rates having risen so rapidly over the last year, we anticipated sales this month would be among the lowest in recent history,” said Andrew Lis, REBGV’s director, economics and data analytics. “Looking forward, however, the Bank of Canada has said that it will pause further rate increases as long as the incoming economic data continues to support this policy stance. This should provide more certainty for home buyers and sellers in the market.”

There were 3,297 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in January 2023. This represents a 20.9 per cent decrease compared to the 4,170 homes listed in January 2022 and a 173.4 per cent increase compared to December 2022 when 1,206 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 7,478, a 32.1 per cent increase compared to January 2022 (5,663) and a 1.3 per cent increase compared to December 2022 (7,384).

For all property types, the sales-to-active listings ratio for January 2023 is 13.7 per cent. By property type, the ratio is 10.2 per cent for detached homes, 13.4 per cent for townhomes, and 16.7 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

“We know the peak for prices in our market occurred last spring. Over the coming months, year-over-year data comparisons will show larger price declines than we’ve been reporting up to now,” said Lis. “It’s important to understand that year-over-year calculations are backward-looking. These price declines already happened, and what we are seeing today is that prices may have found a footing, even if it’s an awkward one sandwiched between low inventory and higher borrowing costs.”

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,111,400. This represents a 6.6 per cent decrease over January 2022 and a 0.3 per cent decrease compared to December 2022.

Sales of detached homes in January 2023 reached 295, a 52.6 per cent decrease from the 622 detached sales recorded in January 2022. The benchmark price for a detached home is $1,801,300. This represents a 9.1 per cent decrease from January 2022 and a 1.2 per cent decrease compared to December 2022.

Sales of apartment homes reached 571 in January 2023, a 56.6 per cent decrease compared to the 1,315 sales in January 2022. The benchmark price of an apartment home is $720,700. This represents a 1.1 per cent decrease from January 2022 and a one per cent increase compared to December 2022.

Attached home sales in January 2023 totalled 156, a 55.2 per cent decrease compared to the 348 sales in January 2022. The benchmark price of an attached home is $1,020,400. This represents a three per cent decrease from January 2022 and a 0.8 per cent increase compared to December 2022.

Download the January 2023 stats package.

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On Wednesday, December 21, the federal government released the supporting regulations on the Prohibition on the Purchase of Residential Property by Non-Canadians Act (Foreign Buyers Ban) which includes definitions, exceptions, and enforcement elements to help individuals understand and comply with the law.

The Canadian Real Estate Association (CREA) is extremely disappointed by the government’s decision to move forward with this legislation and the rollout of its regulations. Parliamentarians that supported the introduction of this measure need to recognize it will have a detrimental impact on Canada’s reputation, labour market, economy and severely hinder our ability to attract global talent. Our CEO Michael Bourque recently spoke at the Senate Committee on National Finance where he stated why CREA believes this piece of legislation does not address the core of Canada’s housing crisis.

How can REALTORS® reduce risk?

The regulations clarify that an order requiring the Residential Property be sold may be sought provided certain conditions are met, namely the Non-Canadian is the owner at the time the order is made and notice requirements have been met. The Act provides any person knowingly assisting or attempting to assist a Non-Canadian in the purchase of a prohibited property may be subject to a summary conviction offence under the Criminal Code and a fine of up to $10,000.

CREA recognizes the regulatory analysis states “the regulations do not impose information collection, processing or reporting requirements on Canadian professionals, nor do they impose requirements with respect to the completion of forms or other types of documentation.”

Despite record keeping not being a mandatory obligation, CREA recommends REALTORS® perform due diligence. To better assist REALTORS® with risk mitigation, CREA has developed a certificate entitled Certification and Consent of Purchaser.

With limited information available on how this law and its regulations will be interpreted and enforced, please be aware the certificate is a risk mitigation tool to try and help REALTORS® comply with the law.

The certificate should be completed before assisting or advising a potential purchaser, and it should be used in combination with other due diligence practices. Other due diligence practices may include reviewing and keeping a record of the purchaser’s valid and current identification (such as a passport) to determine the purchaser’s citizenship, residency, or exempt status.

As you are aware, REALTORS® already have an obligation to Know Your Client pursuant to the FINTRAC Regime. This includes ID’ing clients and recording certain information. The key difference is that under the FINTRAC Regime you may ID your client at the time of the transaction, whereas pursuant to this law, REALTORS® should ID clients before assisting or advising them on the purchase of a property.

As real estate is provincially regulated, REALTORS® should ensure they comply with any guidance provided by their provincial regulator, board, and association.

What is the Prohibition on the Purchase of Residential Property by Non-Canadians Act?

On June 23, 2022, Parliament passed the Prohibition on the Purchase of Residential Property by Non-Canadians Act. Coming into force Sunday, January 1, 2023, this Act:

• Does not apply to Canadian citizens or permanent residents.
• Applies to non-Canadians directly or indirectly purchasing residential property in Canada for a period of two years.
• Applies to residential property, including detached houses or similar buildings of one to three dwelling units, as well as parts of buildings such as semi-detached houses, condominium units, or other similar premises.
• Applies to direct or indirect purchases of residential property, including purchases made through corporations, trusts or other legal entities.
• Establishes penalties for non-compliance applicable to non-Canadians, as well as any person or entity knowingly assisting a non-Canadian in violating the prohibition.

What are some of the key elements covered in the regulations?

Purchase

The regulations broadly define the term purchase to include the direct or indirect acquisition of a right or interest in Residential Property. The regulations then specifically exclude, among other things, acquisitions of interests resulting from transitional or life events such as death, divorce, separation, or a gift.

Application of Prohibition to Non-Canadian corporations and other entities The term Non-Canadian, as it relates to corporations and other entities, has been defined as:

• an entity not formed pursuant to the laws of Canada or one of its provinces; and
• an entity formed under Canada’s laws that has direct or indirect ownership by a Non-Canadian of 3% or more of the value of the entity’s equity or voting rights.

Excluded residential properties

Properties located outside of a Census Agglomeration (CA) or Census Metropolitan Area (CMA) are excluded from this prohibition.

Exceptions

Exceptions to the prohibition are permitted for international students, temporary residents, foreign nationals, and refugee claimants, subject to varying conditions, such as tax filing and residency obligations. For further details, please consult the regulations and/or ensure the buyer who may fall into one of these exception groups seeks legal advice on their eligibility.

Additional guidance

Further to the information that has been provided in the regulations, Canada Mortgage and Housing Corporation (CMHC) has released additional information and FAQs with respect to the interpretation of the Act and regulations.

Government releases regulations around Jan 1 foreign buyer ban

The government released the regulations supporting the federal foreign buyer ban today, defining what the ban will look like.

These regulations outline:

• The definition of a residential property, foreign buyer, and purchase;
• Exceptions for temporary residents that meet specific obligations that include students or workers, refugees, and accredited members of foreign missions in Canada; and
• Penalties for non-compliance applicable to Non-Canadians, as well as any person or entity knowingly assisting a Non-Canadian in violating the prohibition

There’s still little information on how this law and its regulations will be interpreted and enforced.
 

Reducing risk for REALTORS®

The regulations don’t require any further record keeping for Realtors, however the Canadian Real Estate Association (CREA) recommends members perform due diligence to ensure they’re not facilitating a sale to a foreign buyer.

CREA developed the Certification and Consent of Purchaser as a way Realtors can help mitigate their risk – though members should be aware that this document may not be foolproof as there’s still little information on how the regulations will be enforced.

The certificate should be completed before assisting or advising a potential buyer and should be used in combination with other due diligence practices.

Reducing risk for REALTORS®

• The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from buying residential property in Canada for two years starting on January 1, 2023.
• Non-Canadians are defined as individuals who aren’t:
  • Canadian citizens
  • permanent residents of Canada
  • persons registered under the Indian Act.
  • corporations based in Canada that are privately held, not listed on a stock exchange in Canada, and controlled by someone who is a non-Canadian.
• The act defines residential property as buildings with three homes or less, as well as parts of buildings like a semi-detached house or a condominium unit. The law doesn’t prohibit the purchase of larger buildings with multiple units.
• The act has a $10,000 fine for any non-Canadian or anyone who knowingly assists a non-Canadian and is convicted of violating the act. If a court finds that a non-Canadian has done this, they may order the sale of the house.

More information

• Canada Mortgage and Housing Corporation’s foreign buyer ban FAQ

Contrary to Canada’s large urban centres, major cities in Alberta and Atlantic Canada are expected to see home price growth in 2023.

In its annual Market Survey Forecast, Royal LePage predicts that the aggregate price of a home in Canada will decrease 1.0% year-over-year to $765,171 in the fourth quarter of 2023, with five of the major regions surveyed expected to see aggregate price declines. The four regions where prices are forecast to increase – Calgary, Edmonton, Ottawa and Halifax – are among the more affordable cities in Canada, and have proven to be top destinations for Canadians seeking more affordable housing options.

Enabled by remote working opportunities during the COVID-19 pandemic and beyond, the number of buyers relocating out of the major urban centres has accelerated over the last two years. Now faced with higher borrowing costs and living expenses, it is expected that buyer hopefuls from Ontario and British Columbia will continue to seek out affordable housing options in cities like Calgary, Edmonton and Halifax. Price growth in Calgary, Ottawa and Halifax in the fourth quarter of 2023 is expected to be led by the more affordable condominium segment. Ottawa, with its healthy employment market, relatively affordable housing and continued positive net migration, is also expected to see positive price appreciation next year.

Calgary

“Unlike Canada’s major urban centres, which saw steep increases during the pandemic boom followed by rapid declines over the last six months, the Calgary market has experienced less drastic swings,” said Corinne Lyall, broker and owner, Royal LePage Benchmark. “I expect we will continue to see moderate price growth in the entry-level market, particularly in the condominium segment.”

Edmonton

“Many buyers from outside of Alberta and elsewhere in the province continue to enter the city’s housing market. Since the beginning of February, demand has been strong from Ontario and British Columbia buyers looking to relocate to Edmonton, due to its relative affordability and healthy job market,” said Tom Shearer, broker and owner, Royal LePage Noralta Real Estate.

Halifax

“While real estate activity in 2023 is unlikely to reach the exuberant levels recorded in the first half of this year, Halifax’s population continues to grow and attract buyers from across Canada and abroad. I anticipate that we will see a return to more normal seasonal trends next year,” said Matt Honsberger, broker and owner, Royal LePage Atlantic.

Ottawa

“Condominiums will likely see greater price appreciation than other property types, as higher borrowing costs will continue to limit buyers’ purchasing power and push them to the lower end of the market,” said John Rogan, broker of record, Royal LePage Performance Realty. “Local housing activity has been largely motivated by buyers and sellers who are forced to move, including those relocating for work.”

For additional information on all nine of Canada’s major markets, read more here.

If you’re working on a home improvement project – whether for you to enjoy, or in preparation to put your property on the market – you may be interested to know which renos will give you the most bang for your buck.

A kitchen renovation is the most worthwhile home improvement, and has the potential to increase the value of your property by 20%, according to a recent survey of Royal LePage experts.  

“A kitchen is perceived as the gathering place and the heart of the home,” said Mike Heddle, broker and team leader, Royal LePage State Realty. “When a potential buyer views a home for the first time, the one thing that will stand out – for better or worse – is what the kitchen looked and felt like. They may not remember the size of the bedrooms or the colour of the walls, but they will remember the kitchen.”

Highlights from the national release: 

• Royal LePage professionals say, on average, bathroom renovations can increase the value of a home by 16%
• Finished basements and basement apartments have the potential to increase a home’s value by 15%, according to survey results
• Outdoor entertaining space and landscaping have the potential to increase a property’s value by an average of 10%, according to respondents
• For Canadians looking for general guidance on where to invest in their home renovation projects, 87% of surveyed experts recommend interior renovations

For more insights, read the full press release and check out the data chart. 

While home prices in many real estate markets across Canada have recorded modest declines over the last few quarters, largely due to the rising cost of borrowing, the rate of decline has slowed. With the expectation that the Bank of Canada’s interest rate hike campaign is coming to a close, Royal LePage is forecasting that the national aggregate price of a home in the fourth quarter of 2023 will be $765,171, 1.0% below Q4 of 2022. Broken out by housing type, the median price of a single-family detached property and condominium are projected to decrease 2.0% and increase 1.0% to $781,256 and $568,933, respectively.

“After nearly two years of record price appreciation, fueled by a steep climb in household savings, very low borrowing costs and an overwhelming desire for more space during the COVID-19 pandemic, the frenzied housing market overshot and the inevitable downward slide or market correction began, intensified by rapidly rising borrowing rates,” said Phil Soper, president and CEO, Royal LePage. “In an era characterized by the unusual, this correction has not followed historical patterns. While the volume of homes trading hands has dropped steeply, home prices have held on, with relatively modest declines. We see this as a continuing trend.”

In the first quarter of 2023, the national aggregate home price is expected to decline on both a year-over-year and quarter-over-quarter basis, followed by near-flat quarterly price growth in Q2. In the second half of next year, the aggregate home price is expected to see modest quarterly gains, but will still remain lower than the same periods in 2022.

The recovery is not expected to be evenly distributed. Regional markets that saw more moderate price growth during the pandemic real estate boom are expected to experience more modest declines. Due to their relative affordability, cities like Calgary, Edmonton and Halifax are expected to record modest price gains in 2023, as they continue to attract out-of-province buyers, especially first-time homebuyers from southern Ontario and British Columbia looking for more affordable housing.

Read Royal LePage’s 2023 Market Survey Forecast for national and regional insights.

Highlights from the release:

• Condominium prices are expected to outdo single-family homes in all major markets across Canada, except Edmonton and Winnipeg
• The Greater Toronto Area and Greater Montreal are expected to see a Q4 2023 aggregate price decline of 2.0% year-over-year
• The Q4 2023 aggregate home price in Greater Vancouver is anticipated to decrease 1.0% year-over-year
• Despite declining affordability, heightened by rising interest rates, continued housing supply shortage acts as a floor on home price declines

In Budget 2022, the government proposed the introduction of the Tax-Free First Home Savings Account (FHSA). This new registered plan would give prospective first-time home buyers the ability to save $40,000 on a tax-free basis. Like a Registered Retirement Savings Plan (RRSP), contributions would be tax-deductible, and withdrawals to purchase a first home—including from investment income—would be non-taxable, like a Tax-Free Savings Account (TFSA).

Budget 2022 announced the key design features of the FHSA, including an $8,000 annual contribution limit in addition to a $40,000 lifetime contribution limit. Today, the Department of Finance is releasing for public comment draft legislative proposals that provide additional details on the design of the FHSA. This backgrounder offers a summary of these details.

The government expects that Canadians will be able to open and contribute to an FHSA at some point in 2023. No matter when this happens in 2023, Canadians would be allowed to contribute the full $8,000 annual limit in that year. 

Opening and Closing Accounts 

To open an FHSA, an individual must be a resident of Canada and at least 18 years of age. In addition, an individual must be a first-time home buyer, meaning that they have not owned a home in which they lived at any time during the part of the calendar year before the account is opened or at any time in the preceding four calendar years. For this purpose, ownership is defined broadly and includes beneficial ownership, but excludes a right to acquire less than 10% of a qualifying home.

An FHSA of an individual would cease to be an FHSA, and the individual would not be permitted to open an FHSA, after December 31 the year in which the earliest of these events occurs:

• The fifteenth anniversary of the individual first opening an FHSA; or
• The individual turns 71 years old.

Any savings not used to purchase a qualifying home could be transferred on a tax-free basis into an RRSP or Registered Retirement Income Fund (RRIF) or would otherwise have to be withdrawn on a taxable basis. Individuals that make a qualifying withdrawal could transfer any unwithdrawn savings on a tax-free basis to an RRSP or RRIF until December 31 of the year following the year of their first qualifying withdrawal.

Qualified Investments

An FHSA would be permitted to hold the same qualified investments that are currently allowed to be held in a TFSA. In particular, taxpayers would be able to hold a broad range of investments, including mutual funds, publicly traded securities, government and corporate bonds, and guaranteed investment certificates.

The prohibited investment rules and non-qualified investment rules applicable to other registered plans would apply, including the potential tax consequences described below. These rules are intended to disallow investments in entities with which the account holder does not deal at arm's length, as well as investments in certain assets such as land, shares of private corporations and general partnership units.

Contributions

The lifetime limit on contributions would be $40,000, with an annual contribution limit of $8,000. In other words, individuals would be subject to the lesser of their annual limit and remaining lifetime limit. The full annual limit would be available starting in 2023.

The annual contribution limit would apply to contributions made within a particular calendar year. Individuals would be able to claim an income tax deduction for contributions made in a particular taxation year. Unlike RRSPs, contributions made within the first 60 days of a given calendar year could not be attributed to the previous tax year.

An individual would be allowed to carry forward unused portions of their annual contribution limit up to a maximum of $8,000. This means that an individual contributing less than $8,000 in a given year could contribute the unused amount (i.e., $8,000 less their contribution in that year) in a subsequent year on top of their annual contribution limit of $8,000 (subject to their lifetime contribution limit). For example, an individual contributing $5,000 to an FHSA in 2023 would be allowed to contribute $11,000 in 2024 (i.e., $8,000 plus the remaining $3,000 from 2023). Carry-forward amounts would only start accumulating after an individual opens an FHSA for the first time.

An individual would be permitted to hold more than one FHSA, but the total amount that an individual contributes to all of their FHSAs could not exceed their annual and lifetime contribution limits. Taxpayers would generally be responsible for ensuring they do not exceed their limit in a given year. The Canada Revenue Agency (CRA) would provide basic FHSA information to support taxpayers in determining how much they can contribute in a given year. 

Contributions made to an FHSA following a qualifying withdrawal being made (i.e., when buying a first home) would not be deductible from net income.

Undeducted Contributions

An individual would not be required to claim a deduction for the tax year in which a contribution is made. Like RRSP deductions, such amounts could be carried forward indefinitely and deducted in a later tax year.

Qualifying Withdrawals

In order for an FHSA withdrawal to be a qualifying (i.e., non-taxable) withdrawal, certain conditions must be met.

First, a taxpayer must be a first-time home buyer at the time a withdrawal is made. Specifically, the taxpayer could not have owned a home in which they lived at any time during the part of the calendar year before the withdrawal is made or at any time in the preceding four calendar years. There is an exception to allow individuals to make qualifying withdrawals within 30 days of moving into their home. 

The taxpayer must also have a written agreement to buy or build a qualifying home before October 1 of the year following the year of withdrawal and intend to occupy the qualifying home as their principal place of residence within one year after buying or building it.

A qualifying home would be a housing unit located in Canada. A share in a co-operative housing corporation that entitles the taxpayer to possess, and have an equity interest in a housing unit located in Canada, would also qualify. However, a share that only provides a right to tenancy in the housing unit would not qualify.

Provided the taxpayer meets the qualifying withdrawal conditions, the entire amount of available FHSA funds may be withdrawn on a tax-free basis in a single withdrawal or a series of withdrawals.

Non-qualifying Withdrawals

Withdrawals that are not qualifying withdrawals would be included in the income of the individual making the withdrawal. Financial institutions would be required to collect and remit withholding tax on non-qualifying withdrawals, consistent with the treatment applicable to taxable RRSP withdrawals.

Non-qualifying withdrawals would not re-instate either the annual contribution limit or the lifetime contribution limit.

Transfers     

An individual could transfer funds from an FHSA to another FHSA, an RRSP or a RRIF on a tax-free basis.

Funds transferred to an RRSP or RRIF will be subject to the usual rules applicable to these accounts, including taxability upon withdrawal. These transfers would not reduce, or be limited by, an individual's available RRSP contribution room. These transfers would not reinstate an individual's FHSA lifetime contribution limit.

Individuals would also be allowed to transfer funds from an RRSP to an FHSA on a tax-free basis, subject to the FHSA annual and lifetime contribution limits and the qualified investment rules. Although such transfers would be subject to FHSA contribution limits, they would not be deductible and would also not reinstate an individual's RRSP contribution room.

Treatment of FHSA Income for Tax and Income-Tested Benefit Purposes   

Contributions to an FHSA would be deductible in computing income for tax purposes. In addition, income, losses and gains in respect of investments held within an FHSA, as well as qualifying withdrawals, would not be included (or deducted) in computing income for tax purposes or taken into account in determining eligibility for income-tested benefits or credits delivered through the income tax system (for example, the Canada Child Benefit and the Goods and Services Tax Credit).

Eligible Issuers    

Any financial institution that is able to issue RRSPs and TFSAs would be able to issue FHSAs. This includes Canadian trust companies, life insurance companies, banks and credit unions.

Interaction with the Home Buyers' Plan (HBP)

The HBP would continue to be available as under existing rules. However, an individual would not be permitted to make both an FHSA withdrawal and an HBP withdrawal in respect of the same qualifying home purchase.

Spousal Contributions and Attribution Rules

The FHSA holder would be the only taxpayer permitted to claim deductions for contributions made to their FHSA. Individuals would not be able to contribute to their spouse or common-law partner's FHSA and claim a deduction.

That said, an individual could contribute to their FHSA from funds provided to them by their spouse. Normally, if an individual transfers property to the individual's spouse or common-law partner, the income tax rules generally treat any income earned on that property as income of the individual. An exception to these "attribution rules" would allow individuals to take advantage of the FHSA contribution room available to them using funds provided by their spouse. Specifically, these attribution rules would not apply to income earned in an FHSA that is derived from such contributions.

Marital Breakdowns

On the breakdown of a marriage or a common-law partnership, it is proposed that an amount may be transferred directly from the FHSA of one party to the relationship to an FHSA, RRSP, or RRIF of the other. In such circumstances, transfers would not re-instate any contribution room of the transferor, and would not be counted against any contribution room of the transferee.

Over-contribution, Non-qualified Investment, Prohibited Investment, and Advantage Taxes

Like TFSAs, a 1% tax on over-contributions to an FHSA would apply for each month (or a part of a month) to the highest amount of such excess that exists in that month.

When a taxpayer's annual contribution limit is reset at the beginning of each calendar year, over-contributions from a previous year may cease to be an over-contribution. A taxpayer would be allowed to deduct an over-contributed amount for a given year in the tax year in which it ceases to be an over-contribution but not earlier. However, if a qualifying withdrawal is made before an over-contribution ceases to be an over-contribution, no deduction would be provided for the over-contributed amount.

Example:

Alyssa contributes $10,000 on November 15, 2023 and does not withdraw it. This contribution exceeds Alyssa's annual FHSA contribution limit by $2,000.

Alyssa would be subject to an over-contribution tax of $40 (1% × $2,000 × 2 months) when filing her 2023 tax return in 2024. The $2,000 amount would cease to be an over-contribution on January 1, 2024, as a new annual limit of $8,000 would be available.

Alyssa would be allowed to deduct $8,000 from her 2023 net income. Presuming Alyssa did not make a qualifying withdrawal between November 15, 2023 and January 1, 2024, she would be allowed to deduct the additional $2,000 from her 2024 net income.

The Income Tax Act imposes other taxes in certain circumstances involving non-qualified investments, prohibited investments, and unintended advantages in respect of other registered plans. These rules would also apply to the FHSA.

The Minister of National Revenue would have authority to cancel or waive all or part of these taxes in appropriate circumstances. Various factors would be taken into account including reasonable error, the extent to which the transactions that gave rise to the tax also gave rise to another tax, and the extent to which payments were made from the taxpayer's registered plan.

Treatment Upon Death

Like TFSAs, individuals would be permitted to designate their spouse or common-law partner as the successor account holder, in which case the account could maintain its tax-exempt status. If named as the successor holder, the surviving spouse would become the new holder of the FHSA immediately upon the death of the original holder provided the surviving spouse meets the eligibility criteria to open an FHSA (see the discussion above under "Opening and Closing Accounts"). Inheriting an FHSA in this way would not impact the surviving spouse's contribution limits. Inherited FHSAs would assume the surviving spouse's closure deadlines. If the surviving spouse is not eligible to open an FHSA, amounts in the FHSA could instead be transferred to an RRSP or RRIF of the surviving spouse, or withdrawn on a taxable basis.

If the beneficiary of an FHSA is not the deceased account holder's spouse or common-law partner, the funds would need to be withdrawn and paid to the beneficiary. Amounts paid to the beneficiary would be included in the income of the beneficiary for tax purposes. When such payments are made, the payment to the beneficiary would be subject to withholding tax.

Non-residents

Taxpayers would be allowed to contribute to their existing FHSAs after emigrating from Canada, but they would not be able to make a qualifying withdrawal as a non-resident. Specifically, a taxpayer withdrawing funds from an FHSA must be a resident of Canada at the time of withdrawal and up to the time a qualifying home is bought or built.

Withdrawals by non-residents would be subject to withholding tax.

Reporting Requirements

Opening an Account

In order to open an FHSA, a taxpayer would be required to confirm their eligibility to an eligible issuer.

Ongoing Reporting

Financial institutions would be required to send to the CRA annual information returns in respect of each FHSA that they administer. The CRA would use information provided by issuers to administer the FHSA and provide basic FHSA information to taxpayers.

Withdrawals

In order to make a qualifying withdrawal, an individual would be required to submit a request to their FHSA issuer confirming their eligibility. Issuers would not apply withholding taxes upon receiving a valid qualifying withdrawal request.

When any withdrawals are made (qualifying or non-qualifying), the FHSA issuer would be required to prepare an information slip with the amount of the withdrawal and, in the case of a non-qualifying withdrawal, any income tax withheld on that amount.

Account Closure

The CRA would issue a reminder to all taxpayers and their FHSA issuers of when an FHSA will no longer have tax-advantaged status.

Deposit Insurance Framework

The Canada Deposit Insurance Corporation insures eligible deposits up to $100,000 per member institution, per person, per category. It is proposed that the Canada Deposit Insurance Corporation Act be amended to create a new category of insured deposits for FHSAs, as is the case for RRSPs and TFSAs.

Interest Deductibility   

Like RRSPs and TFSAs, interest on money borrowed to invest in an FHSA would not be deductible in computing income for tax purposes.

Collateralization    

Taxpayers must include in income the full value of any assets held within an FHSA and pledged as collateral for a loan.

Bankruptcy

FHSAs would not be afforded creditor protection under the Bankruptcy and Insolvency Act.

Inflation, rising interest rates create caution across Metro Vancouver’s housing market

Home sale activity across the Metro Vancouver housing market continued to trend well below historical averages in October.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential home sales in the region totalled 1,903 in October 2022, a 45.5 per cent decrease from the 3,494 sales recorded in October 2021, and a 12.8 per cent increase from the 1,687 homes sold in September 2022.

Last month’s sales were 33.3 per cent below the 10-year October sales average.

“Inflation and rising interest rates continue to dominate headlines, leading many buyers and sellers to assess how these factors impact their housing options,” Andrew Lis, REBGV’s director, economics and data analytics said. “With sales remaining near historic lows, the number of active listings continues to inch upward, causing home prices to recede from the record highs set in the spring of 2022.”

There were 4,033 detached, attached and apartment properties newly listed for sale on the Multiple Listing Service® (MLS®) in Metro Vancouver in October 2022. This represents a 0.4 per cent decrease compared to the 4,049 homes listed in October 2021 and a 4.6 per cent decrease compared to September 2022 when 4,229 homes were listed.

The total number of homes currently listed for sale on the MLS® system in Metro Vancouver is 9,852, a 22.6 per cent increase compared to October 2021 (8,034) and a 1.2 per cent decrease compared to September 2022 (9,971).

“Recent years have been characterized by a frenetic pace of sales amplified by scarce listings on the market to choose from. Today’s market cycle is a marked departure, with a slower pace of sales and more selection to choose from,” Lis said. “This environment provides buyers and sellers more time to conduct home inspections, strata minute reviews, and other due diligence. With the possibly of yet another rate hike by the Bank of Canada this December, it has become even more important to secure financing as early in the process as possible.”

For all property types, the sales-to-active listings ratio for October 2022 is 19.3 per cent. By property type, the ratio is 14.3 per cent for detached homes, 21.6 per cent for townhomes, and 23.2 per cent for apartments.

Generally, analysts say downward pressure on home prices occurs when the ratio dips below 12 per cent for a sustained period, while home prices often experience upward pressure when it surpasses 20 per cent over several months.

The MLS® Home Price Index composite benchmark price for all residential properties in Metro Vancouver is currently $1,148,900. This represents a 2.1 per cent increase from October 2021, a 9.2 per cent decrease over the last six months, and a 0.6 per cent decrease compared to September 2022.

Sales of detached homes in October 2022 reached 575, a 47.2 per cent decrease from the 1,090 detached sales recorded in October 2021. The benchmark price for detached properties is $1,892,100. This represents a 1.6 per cent increase from October 2021 and a 0.7 per cent decrease compared to September 2022.

Sales of apartment homes reached 995 in October 2022, a 44.8 per cent decrease compared to the 1,801 sales in October 2021. The benchmark price of an apartment property is $727,100. This represents a 5.1 per cent increase from October 2021 and a 0.2 per cent decrease compared to September 2022.

Attached home sales in October 2022 totalled 333, a 44.8 per cent decrease compared to the 603 sales in October 2021. The benchmark price of an attached unit is $1,043,600. This represents a 7.1 per cent increase from October 2021 and a 0.5 per cent decrease compared to September 2022.

Download the October 2022 stats package.

Basements are often an afterthought. Sometimes they’re dismissed as simply storage space – where your furnace and water heater are located, along with bins of clothes you’ll never wear again. If this is your mindset, you’re missing out on some great opportunities to reimagine this space.

See your basement with a fresh perspective. Here are a few ways that you can optimize your basement for a better living experience:

Personal gym
Forget paying for a membership. By investing in a few pieces of quality gym equipment, you can bring your workout home. It’s not always easy to stay motivated, but having easy access to your treadmill at home could be one less excuse to skip your run, especially on those cold days. And with a home gym, you can make exercise time a part of your family’s routine.

Playroom
If you have children, you know how quickly their toys can take over a room. By making the basement (or part of it) a dedicated play area, you can keep the clutter out of sight downstairs while giving the kids plenty of room for imaginative games and activities. Add a fresh coat of paint, a few whimsical decals and the toys of course, and you’ll have a playroom that dreams are made of.

Home theatre
With so many movies available on streaming platforms, trips to the cinema have become rare. But, you can recreate the experience at home with a large screen, projector, and theatre-style armchairs. For those with smaller basements, a quality flatscreen TV and a comfortable couch with lots of pillows can be just as enjoyable for family movie nights or entertaining friends.

Library
For all the book lovers out there, imagine having a special place to read, with all the paperbacks you’ve collected over the years at your fingertips. Whether it’s a few bookshelves and some comfy seating, or custom built-ins that showcase your collection in a creative way – a library is a wonderful addition to any home. Coordinating rugs, throws, and cushions can give this space a luxe yet cozy feel. It’s the perfect place to get lost in a good book!

Home office
Maybe the kitchen table isn’t cutting it. For some, working from home is now part of the regular routine but many still don’t have a dedicated home office. A well-designed workspace with an ergonomic desk and chair can not only increase your productivity and help motivate you to check off your daily to-dos faster, it can reduce the physical stress that your body endures during long stretches of sedentary activity. And the best part is, you don’t have to clear away your work day each time you sit down for a meal.

Basements are a blank canvas; extra square footage to play with and room to try something new. So, however you decide to use this part of your home, choose something you love and make the space your own!

Fall is a beautiful time of year. As the leaves change colour, pumpkin patches open, and people enjoy spiced lattes and sweater weather, it’s only fitting to add a little fall flair to your home as well. And, seasonal décor doesn’t have to be difficult or break the bank. 

Just in time for the Thanksgiving long weekend, here are some simple tips to warm up your home and a touch of autumn to your style:  

Warm up your front entrance

Adorn the front of your home with fall-inspired welcome mats, wooden crates, and squash in various shapes and sizes. The beauty of fall is that there is no symmetry needed. Scatter different sized boxes, fall signs and a mix of small and large decorative pumpkins (real or fake). Hang a fall wreath made of twigs, and add a brown, orange or burgundy ribbon for a pop of colour. 

Decorate your dining space

Beautify your home indoors with orange and earthy tones. Add a table runner, some coloured napkins on the table, and coordinating candles in the scents of the season. You can elevate your seasonal look with small squashes and gourds as centerpieces. And, don’t be afraid to bring the outside in… Design your own table arrangement with twigs, leaves and pine cones you collect. 

Add a cookie and coffee station

Nothing says fall like warm beverages and treats while enjoying the crisp air! Impress your guests with a coffee and tea station. Set up cups, specialty teas displayed in a glass bottle, hot coffee and flavoured syrups in a section of your dining room or kitchen. Use risers or wooden trays to give the display some complexity. Add a cookie jar or cake stand with some fall goodies such as butter tarts, chocolate chip cookies, or brownies. You can also have a seasonal fruit basket with apples and pears. 

Make it cozy

Celebrate fall with comfort by adding aromatic autumn candles… Think cinnamon, vanilla, pumpkin spice scents. Light them in the evenings for ambiance. Add fall-themed throw cushions, and add an earthy-toned warm blanket on your couch (check out Pinterest for inspiration on how to arrange pillows and blankets).

These simple tricks can elevate your home decor and make it feel as warm as your pumpkin or apple pie this season!

Canadian home prices are projected to end the year modestly lower than where they were during the final months of 2021, undoing the price growth seen earlier this year. Royal LePage is forecasting that the aggregate price of a home in Canada will decrease 0.5% in the fourth quarter of 2022, compared to the same quarter last year, due to a continued softening of home prices in a majority of markets across the country in the third quarter (94% of regions in the report).

“September did not bring the typical seasonal lift in the number of homes trading hands in this country, a clear indication that our housing market continues to adjust to higher borrowing costs,” said Phil Soper, president and CEO of Royal LePage. “Home prices follow sales volume trends, which means we will see further softening in the final months of the year. Our revised outlook has national prices at just below where we ended 2021, erasing the gains made in the first quarter of 2022.” 

According to the Royal LePage House Price Survey, the aggregate price of a home in Canada increased 3.3% year-over-year to $774,900 in the third quarter of 2022. However, on a quarterly basis, that figure decreased 4.9%; the second consecutive quarterly decline recorded. When broken out by housing type, the national median price of a single-family detached home rose 2.0% year-over-year to $806,100, while the median price of a condominium increased 6.1% year-over-year to $566,100.

With so many would-be buyers waiting on the sidelines, sales activity has weakened across the country.

“While sales volumes are well off the pandemic-fueled peak, many buyers remain active in today’s market. Some are motivated to transact before their locked-in mortgage pre-approval rates expire. Others are encouraged by a rare drop in home prices, the lack of bidding wars and the ability to include conditions in purchase offers,” added Soper. “At the first indication that interest rates have ended their climb and home prices have stabilized, I would expect a sharp increase in those entering the market as the need for housing has not diminished one bit. And regrettably, Canada continues to suffer from a severe shortage of housing supply.”

Read Royal LePage’s third quarter release for national and regional insights. 

Third quarter press release highlights:

• National aggregate home price for the final quarter of the year forecast at -0.5% 
• National aggregate home price increased 3.3% year-over-year in third quarter of 2022; decreased 4.9% quarter-over-quarter
• Prices remain well above pre-pandemic levels; Canada’s national aggregate home price increased 25.4% in Q3 over the same quarter in 2020, and 21.5% over the same quarter in 2019 
• 58 of the report’s 62 regional markets posted quarterly aggregate home price declines in Q3
• Prices decline on a quarterly basis in Greater Montreal Area for the first time in more than five years as market activity drops, following trend set in greater regions of Toronto and Vancouver in Q2
• Major markets in Atlantic Canada and the Prairies show modest quarterly price declines in Q3; Calgary and Edmonton markets faring better than other major cities