Ryan Out Loud - This Week in Housing (May 3rd, 2022)

Sarnia, bluewater bridge, lake huron, real estate, housing market, homes sarnia

This Week In Housing is Sean Ryan's personal breakdown of current events relating to real estate in Sarnia-Lambton, Ontario and Canada.

Let's look at the foreign buyer tax that's going all throughout the province. Let's look at open versus closed bidding, and the vacant home tax, interest rate, short term rentals, foreign buyers and school closures. And then also some great new things that are happening here in Sarnia-Lambton.

Open Bidding vs Closed Bidding

The Ontario government says new regulations are going to take effect next year some time to increase transparency in the bidding process.

So do we think it will cause more transparency in bidding? Will it make prices go down or do you think prices are going to go up? There's a lot of stuff that has to go through on it first... There are a lot of details they will have to work out, like what information is disclosed and what's not. And then, you know, my feeling is if you look in other countries, where does it stop?

For example, if buyers see that a competing price is just $2,000 more, will they bid the $2,000? Will bids continue to battle back and forth rising the price in a manner equal or higher than blind bidding?

By next year, the housing market will likely have cooled a lot so we might not need this measure anyway. 

See the full article here:

https://www.cbc.ca/news/canada/toronto/ontario-real-estate-blind-bidding-1.6424158

20% Foreign Home Buyer's Tax

So, the other big story we're hearing about right now Ford government is boosting the foreign home buyer tax to 20%. In the Golden Horseshoe area, it has been only 15%, but now it's going province-wide.

So will that cool down the market? What's the percentage of foreign buyers in Ontario right now? In 2020, 3.4% of buyers were foreign, with the majority being in areas in the GTA, and the Golden Horseshoe. In areas like Sarnia-Lambton, we haven't seen much action in terms of international buyers.

We are seeing some international students come in and buy homes. But these buyers shouldn't be affected because they're actually going to be living here. But in Toronto potentially 3% of foreign buyers are buying up condos.

See the full article here:

https://www.cbc.ca/news/canada/toronto/ontario-foreign-buyers-tax-homes-1.6401674

Vacant Home Tax

And then also we're seeing out west right now they're having the vacant home tax. Is that something that could come to Ontario? A lot of the foreign buyers that purchase property in the Golden Horseshoe area are buying properties that then sit vacant and nothing's really ever happening with them.

Do you think the government will take action on vacant homes in Ontario?

Interest Rates

Rates are going up a little bit, but do you think the rate increases are going to cool off the market? Do you think it's going to be enough to calm the housing shortage that we do have here in Canada?

I still think it's very historic low rates. When you look at the grand scheme of things like I remember in 2006 when I got into the business, you were getting approved at 4%, 5%, or 6% and that was a good rate.

So, you know, in the States we're seeing rate increases go up a bit higher. But here in Canada, I'm not seeing a huge effect. I think it will take out some of those first time homebuyers maybe that were really on the edge of being approved in the first place and they might not get approved now. But again, I'd love to hear some feedback on it.

Interactive Virtual Tours

Sort of cool things, though, happening in Sarnia-Lambton. Let's just get a bit more local here on what's going on there. There is a new interactive virtual tours. It's going to be now offering the heritage walking tours and the trees of distinction bike tours here in Sarnia-Lambton, Put the link there for you can sign up.

It looks pretty cool. There's going to be a virtual interactive map that comes on and as well, that came from kind of the cove at times of everything being virtual. What just pretty cool.

Lambton Shores & Short Term Rentals

Lambton Shores, they're registering mandatory for short term rental orders and owners in Lambton Shores, kind of somewhere like what they've done something in Sarnia, you know, is that needed?

There's about 300 short term rentals in Lambton Shores. There are actually more short term rentals in Lambton shores than in the city of Sarnia. The city is trying to pass that bylaw right now and it is in the appeal process right now.

I think one thing that taught us over COVID-19 with all the quarantines we had to do, the Airbnbs in the short term rentals were actually very much needed.

My wife and I, we own Airbnbs, and when COVID started a lot of our people cancelled but we end up housing and isolating a lot of people. It has been almost an essential service for some people.

But Lambton Shores, it's a lot of the waterfront, a lot of the cottages that's where the debate's coming in there. We got a lot of people from the GTA coming in, buying those cottages as rentals.

Is it going to go through? I don't know. It is in the process. It's probably get appealed in a similar way the Sarnia one is, and just be dragged out while everyone figures it out. But it'll be interesting to see what happens there.

Reduction in School Enrollment

The school board are seeing enrollments down. It's declined quite a bit compared to last year and over the last few years.

So they're talking of closing more schools down. Is that a good idea? Should we be closing more schools down? If not, where will they get the money to keep them open? But also at the same time, we're seeing Camlachie, they just got $3.8 million in investment for the Ontario government.

So we're going to see a huge build out there, which is amazing because that area there is really under-serviced for school and that's going to affect housing prices as well in that Errol Village area have more schools, better schools available. More people are going to want to move that area.

Specific areas of Sarnia have been hit by school closures. The South End of Sarnia it's really affected that. We've had SCITS move out, and St Pats. I think that affects property value. I think it affects the walk score of the area.