One immediate benefit will come from tax breaks for landlords building new rentals and funding for renovating older ones, according to Tim Mangat, an investor in Calgary.
“When the new government implements this program, savvy landlords will quickly register and renovate their properties,” he told CREW
. “Upon completion, the property will have an increased value and can be rented at a higher rate at minimal cost to the landlords.”
As for Liberal plans to eliminate GST for building new rentals, Mangat says it’s not enough of an incentive.
For Andrew Mitchell, a chartered real estate broker with Vistacor Realty Group in Montreal, it’s Trudeau’s promise to modernize the Home Buyers’ Plan that could be a real game changer.
“The plan to allow not just first-time buyers but those going through divorce, the death of a spouse or other life-changing events easier access to their RRSPs for down payments, will open up home ownership to those who otherwise would not have the down payment to qualify for a mortgage,” he told CREW
While some have speculated that the new government’s plans to invest billions in infrastructure may cause interest rates to climb, Paul D’Abruzzo, an investor and real estate agent in Toronto doesn’t see it happening anytime soon.
“We are betting on low interest rates for two years or longer meaning the real estate market will continue to appreciate,” he told CREW
. “With cheap money available, buyers will be looking for a place to invest their money in hard assets and good properties will be in high demand.
Investor Kathy Berner, owner of Regency Management & Real Estate in Regina, takes a contrarian view.
“Due to the higher spending, we should expect higher bond yields and less need to cut the prime lending rate to stimulate spending,” she told CREW
. “These two factors will lead to higher fixed interest rates on mortgage lending. I wouldn’t expect a huge increase but an increase nonetheless.”
She also points out that the Liberals’ policy of increasing immigration and the aforementioned support for rental housing construction, along with their increased spending habits should, “at least in the short term, keep rental demand steady on the residential side.”
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As Justin Trudeau prepares to take up residence at 24 Sussex Drive, investors continue to debate what the Liberal majority government means for the housing market and what benefits or challenges will fall upon landlords.