We’ll find out in the spring budget whether the Harper government will double the Tax Free Savings Account limit. The odds are good.

Adam Mayers – Toronto Star

A TFSA promise kept? The TFSA was introduced in 2009. Anyone over 18 can open one and the unused room adds up. The lifetime limit in 2015 is $36,500. If the Conservatives keep their promise, it will be among the last of major goodies to be handed out before the election.

Prediction: The TFSA limit will double in the budget, but not be effective until 2016 as an incentive to re-elect the Tories.

ORPP pension puzzle: After a decade in which Ottawa and the provinces dithered over expanding the Canada Pension Plan (CPP), Ontario has decided to go it alone with the Ontario Retirement Pension Plan (ORPP).

Prediction: The province will get going, but things will firm up after the election outcome in November.

Inflation moves up: One of the great mysteries of the past five years is the inflation disappearing act. Central bankers have been printing money as fast as they can to ease a credit crunch. They’ve created trillions out of thin air in so-called quantitative easing experiments. Experiment is the key word.

We should be drowning in a sea of inflation. As the U.S. economy picks up steam, inflation there will start to creep up. Ours, at 2.4% is in the mid-range of the Bank of Canada’s target. The steep drop in oil and most metal prices may keep a lid on inflation in the short term.

Prediction: Modest rate hikes, modest inflation.

Housing anxiety: The housing boom shows no sign of letting up in the GTA this year.

In the GTA we’re looking at another year of price records. A shortage of listings pushed up detached home prices sending buyers into condos. The average price of a detached house in the 416 region was $935,122 in November and $672,825 in the 905. The average cost of a Toronto condo was $394,225.

Jason Mercer, director of market analysis for the Toronto Real Estate Board sees strong price growth well into 2015. And the man who should know, Bank of Canada governor Stephen Poloz keeps saying he’s in no rush to raise rates.

Comment: Poloz also said there is no bubble, that he does not see a crash coming and that home prices will not go down.

Those looking to invest in real estate will not see the price appreciations of years past. For those who plan to live and work in Canada’s largest and most desirable city, waiting probably won’t help, even if the market is overvalued by 30% as the Bank of Canada suggests.

Comment: Yes they will. Prices will continue to rise. And the BoC said the NATIONAL market MIGHT be overvalue by 10-30%. Which also means it MIGHT NOT be overvalued. The key is worth repeating, the BoC said there is no bubble, that there is no crash coming and that home prices will not go down.

Buying a first house is always too expensive. If they’re forming households or just tired of paying rent, they might as well pay themselves first.

Prediction: A small increase in interest rate sends a message that may slow the rise in house prices, but there’s no crash in sight.

Comment: A small rate hike might slow the market, but it is not likely.

Nobody can see the future, but as always it pays to keep an eye on the horizon where trends form and take shape. In the meantime, have a great holiday.

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Contact Laurin Jeffrey for more information – 416-388-1960

Laurin Jeffrey is a Toronto real estate agent with Century 21 Regal Realty.
He did not write these articles, he just reproduces them here for people who
are interested in Toronto real estate. He does not work for any builders.
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