Realtors say more home sales, renovations would help fix economy
Ontario’s government should look close to home to help the economy recover from the ravages of COVID-19, realtors say.
More home sales, more home renovations and more homes built outside the urban core would promote consumer spending and create jobs, according to the Ontario Real Estate Association.
“The key instrument for economic recovery in Ontario is the sale of homes, which will result in an injection of more homes on the market and create spinoff jobs and consumer spending,” said association president and former Niagaraarea MPP Tim Hudak.
The Ontario group issued a report this week with 15 recommendations to help Ontario’s economy.
Among them: a sixmonth holiday on the land transfer tax levied on home sales; a permanent increase in the land transfer tax rebate for first-time buyers to $6,000 from the current $4,000; and introducing a home renovation tax credit to spur people to improve or expand their properties.
“Especially in Ontario, there is so much the government can do to spur on the economy,” said Terri Mccallum, president of Niagara Association of Realtors.
She cited studies showing “for every house that is sold, there is about $73,250 now in spinoff. All the paint people buy, renovations, appliances and furniture, there are lots of taxes that are collected. Just so much.”
Canada’s real estate market is already humming, according to the Canadian Real Estate Association.
It reports net home sales rose by 6.2 per cent in August over July, while listings rose 10.6 per cent. The national average sale price was 18.5 per cent higher in August than during the same month last year.
In Niagara, the number of new homes sold in August was 37 per cent higher than August 2019, and the benchmark sale price of $482,600 was 15 per cent higher than last year.
Meanwhile, Canada’s unemployment rate is slowly receding but was still 10.2 per cent in August. Niagara’s rate was 12.3 per cent.
“It would be a smart move to get more people in the housing market,” said Mccallum. “When you (do that) those people are moving up from rental units, so that frees up a lot of rental units.”
She pointed to the land transfer tax as an obstacle people face in buying a home.
The rate is a half percentage point on the first $55,000, one per cent on the rest up to $250,000 and another 1.5 per cent on the next $150,000.
“If you were to take that three or four or $5,000 and put it back into the economy — you know, buy furniture or things for the house — that would be a better place for it, we believe,” said Mccallum.
Expanding home renovation tax credits would have the same effect, she said.
“It just seems to make sense that you need to put money back into the economy, and the housing market plays such a big role.
“If you put money into people’s pockets … they are only going to spend it in other areas and that will help the rest of the economy.”
Mccallum said the Ontario association hasn’t heard back from the province on its recommendations.
Hudak stepped down in 2016 as MPP for Niagara West-glanbrook to join the real estate association.
In a release, he said a survey conducted by Altus Consulting Group showed three in 10 Ontarians said they would be likely or somewhat likely to buy a home sooner if they weren’t charged the land transfer tax on the first $600,000 of the sale price.
Also, 28 per cent said they would likely take advantage of a home renovation tax credit if it was offered.