What should happen in the Real Estate Market with the HST?
Author and investor Peter Kinch one of the foremost Canadian experts in financing real estate portfolios, offers his glimpse of real estate’s future with the HST (Harmonized Sales Tax)
Prices should settle over the course of the winter, only to rebound in the spring of 2011, once Canadians adjust to the new reality of the HST. Fear and confusion will be replaced with knowledge and acceptance. They will see that rates have not risen as much as they feared and that even a full percentage higher is still very cheap money. And so, consumer confidence will rebound as it should and the spring of 2011 should recapture the losses of the fall and summer and the market will continue as it always has. That is what should happen.
Possessing some of the strongest economic fundamentals in the world, Canada is the envy of the global banking community. Our real estate is very strong. We acknowledge that rates will have to rise, but we’re aware that they won’t inflate too high or too fast. We know that HST is now here to stay, and will undoubtedly have an impact on the cost of housing. But our collective confidence and resilient nature mean that its impact will not be as formidable as some would have us believe.