Explore how Canmore’s Housing Action Plan affects tourist-zoned properties and local housing availability. Learn about the tourist zoning tax implications for full time residents, and the potential impact on the residential market in Canmore. 

Canmore Housing Action Plan: New Rules on Tourist-Zoned Homes – Who Really Benefits?

Starting in the 2025 tax year, Canmore’s Housing Action Plan will implement sweeping changes to tourist-zoned properties. All existing tourist homes will be taxed at the non-residential rate, with no option for personal use declarations. For those continuing short-term rentals, the tourist zoning will remain intact, requiring a valid business license in all advertisements.

Incentives That Lead to Unintended Consequences

To encourage long-term resident housing, the town is waiving fees for converting tourist homes to residential zoning for a two-year period. However, this conversion can decrease property values, pressuring full-time resident owners of tourist homes to either pay the higher tax rate or sell to investors focused on short-term rental income, ultimately reducing the local housing stock available for residents. These sellers will likely buy residential properties, further reducing homes for long-term residents, counteracting the plan’s intentions.

Impact on Local Housing Availability

Ironically, the policy may drive full-time residents into the residential market, reducing inventory and increasing competition rather than creating more livable space. The initiative is prompting questions about whether it is more a tax revenue move than a housing solution.

For more information on Canmore’s 3 step Housing Action Plan, visit Canmore Housing Action.

What the Bank of Canada’s Interest Rate Cut Means for Canmore’s Real Estate Market

Posted on October 28, 2024

October 23rd, 2024, the Bank of Canada made a significant move by cutting its key interest rate by 50 basis points, bringing it down to 3.75%. This marks the fourth consecutive rate reduction and is the largest cut since the pandemic. But what impact will this have on Canmore’s unique real estate market?

Why This Rate Cut Matters

The Bank of Canada has shifted focus from aggressively combating inflation to stabilizing economic growth. With inflation now within the target range of 1-3%, the central bank aims to alleviate the strain of high rates on economic activity. Governor Tiff Macklem emphasized that these cuts are intended to boost demand while keeping inflation stable.

However, while this rate cut provides some relief, Canadians still face high living costs, particularly in housing, rent, and essentials like groceries. It will take time for lower borrowing costs to translate into tangible financial relief for most Canadians.

What Does This Mean for Canmore’s Real Estate Market?

Canmore’s housing market has its own dynamics, heavily influenced by tourism, short-term rentals, and limited available land due to its proximity to protected parklands. The interest rate cut could influence this market by potentially bringing more buyers into the fold—both locals and those looking for vacation homes or rental investments.

With borrowing costs reduced, buyers may find it easier to qualify for larger mortgages or enjoy lower monthly payments, which could increase demand. But increased demand could lead to rising property prices, especially in Canmore’s constrained market where inventory is often tight. This rate cut might fuel a more competitive environment as we head into the new year.

Opportunities for Buyers and Sellers

For buyers, now may be a good time to act. Lower interest rates mean that borrowing is more affordable, making it an opportune moment for those who’ve been on the sidelines. However, waiting could come with risks, as more buyers entering the market could drive up home prices. If you’re considering buying in Canmore, acting sooner rather than later could help you lock in favorable terms before any further price increases.

For sellers, this is also a great opportunity. With demand expected to rise, listing your property now could attract a larger pool of potential buyers. The rate cut may increase activity, giving you a better chance to sell at a premium as more buyers compete for limited listings.

Timing Your Move

For buyers, timing is crucial. While economists predict another rate cut in December, possibly by 25 basis points, waiting too long could result in a market with higher prices. Securing a property at today’s rates might be more advantageous than trying to time further reductions.

Sellers, on the other hand, might benefit by listing soon to take advantage of the growing interest from buyers eager to lock in lower rates. Getting your home ready for the market now could help you attract offers before the competition heats up further.

Impact on Mortgages

For those with variable-rate mortgages, this rate cut is positive news. As the prime rate decreases, so will mortgage payments, allowing homeowners to pay down more principal. If you’re facing a mortgage renewal within the next year or two, this cut is a step in the right direction, though rates may still be higher than those secured several years ago. Fixed-rate mortgage holders may see less impact, as fixed rates are tied to government bond yields and fluctuate differently than variable rates.

What’s Next?

As the Bank of Canada continues to monitor economic indicators, more rate cuts are possible. In the meantime, buyers and sellers should stay informed and be prepared to act strategically in Canmore’s evolving market. Whether you’re looking to buy or sell, the next few months could bring exciting opportunities, and being ready to respond to these changes will be key.

If you’re considering a move in the Canmore market, reach out to discuss the best strategies to make the most of these favorable conditions. The coming months may be pivotal, and we’re here to help guide you through the current market landscape and make well-informed decisions.