The Canadian Parvasi - Issue 05

The International News Weekly July 28, 2017 | Toronto 16
Will house prices rise or fall
as Canadian dollar rises?
Lachman Balani
MISSISSAUGA: One gets
frequently asked how the
rising loonie (Canadian
dollar) that rose to 80 cents
vis-a-vis the US dollar will
affect the real estate market
in Toronto.
Well, the 10 percent rise
in the loonie since May
technically means that
the economy is robust and
that some of that positivity
should rub off on real estate
and send prices rising
if one was only looking at
locals buying for personal
use.
But, on the other hand,
property sales and prices
in the Toronto region have
fallen since April. But this
is mainly due to the 16-
point plan implemented by
the Ontario government
to cool sales and prices by
clamping down on international
buyers and local
speculators.
The rise of the loonie,
even if it reaches 83.33
cents USD in the short
term as predicted by the
topnotch Paris-based firm
Day by Day SAS , will have
a limited uplifting effect
on the real estate market
in Toronto.
Already prices in Toronto
have toppled by 15
percent and more from
their highs in April of this
year. This has not escaped
the foreign buyers’ attentions
who have to pay a 15
percent tax if they wish to
buy property in the Greater
Golden Horseshoe(GGH)
area- this means Toronto
and the surrounding
southern Ontario region.
However, most of these
buyers usually have their
money in USD accounts,
so they will enter the market
only when prices drop
another 10 percent so as to
bring the Toronto prices in
line with what they were
in April in USD terms. As
this happens negative sentiment
will lead the downward
spiral to overshoot
and prices might fall even
further than expected.
Also the Bank of Canada
recently raised the
prime rate prompting
higher variable mortgage
rates. Besides this, the
Canada 5-year bond yield
has gone from 0.91 per cent
to 1.58 percent, representing
a meteoric 74 per cent
rise since May!
The 5-year fixed mortgages,
which are dependent
on this 5-year rate
have shot up quite substantially
as well to the 3% region
or higher from 2.5%.
This also will affect the
property prices and should
send them reeling as new
buyers grapple with the
notion of higher monthly
payments.
So this potent combination
of the 16-point plan
of April, higher interest
rates and yields has in the
short term tamed the Toronto
real estate market
that had seen a runaway
increase which by March
of this year had reached
over 37% from last year.
Though prices have fallen
since, the year on year rise
is still in the double digits.
The rise of the loonie
is overshadowed by the
aforementioned developments.
For the time being, the
sellers’ market in Toronto
has turned into a buyers’
market with homes selling
at more or less the listing
prices without any bidding
wars, which is a good
sign for local buyers, but
they need more respite.
Prices need to go down a
bit more.
But will this last?
The long-term outlook – 9
months or more- is that the
loonie will ease which will
jack up prices as foreign
buyers and local speculators
jump in. However
should interest rates rise,
which seems to be the scenario
currently, the lower
loonie will have to vie with
higher interest rates which
will act as a headwind and
stabilize prices followed
by single- digit increases
rather than the double
digit ones of the past two
years.
In short, for the time
being, the rising (or declining))
loonie cannot contend
with government regulation
nor interest rates and
yields. It’s power to decide
the direction of the real estate
market is very limited
at this point.
Punjab needs law on the lines of Canadian
model to curb fraud immigration agents
Ravinder Pal
Singh Walia
The current Emigration
Act (EA) 1983 is
aimed at regulating the
emigration of citizens of
India, but in practice it
has failed to control illegal
practices. Frankly,
there is an urgent need for
a new central law to stop
this menace.
Till the time the Indian
Parliament enacts some
progressive law, Punjab
has enacted an law to control
illegal immigration
and human smuggling.
Called the Punjab Prevention
of Human Smuggling
Act, 2012 - along with
relevant rules introduced
in 2013, it provides for
compulsory registration
of travel agents to check
their fraudulent activities
and malpractices and stop
organized human smuggling
from Punjab. There
are said be over 20,000 immigration
consultants in
Punjab
The Punjab Government
later changed the
name of the Act from
the Punjab Prevention
of Smuggling Act to the
Punjab Travel Professionals
Regulation Act, along
with other amendments,
in September 2014.
The new Punjab Act
has introduced important
features which are not
part of the existing Central
Emigration Act.
These features are summarized
here:
• The Punjab Act defines
human smuggling and
travel agents, which
were not defined earlier.
A "travel agent"
is now defined as a
person in a profession
that involves arranging,
managing or conducting
affairs to send
people abroad.
• The Act treats human
smuggling as an offence
and creates a
process for its regulatory
enforcement and
imposition of punishment
upon its violation.
• The Act provides for
compulsory licensing
for travel agents and
debars anyone from
operating without a licence.
• The Act gives the power
of search, seizure,
and arrest to magistrates
and police officers.
It prescribes that
investigation by DSP
to be completed within
two months.
• Under the Act, punishment
for illegal activity
is imprisonment
up to seven years with
fine.
But because of many
shortcomings, this Act
almost remains a piece of
legislation on paper.
The first shortcoming
of this Act is that deputy
commissioners have been
designated as the licensing
authority for travel
agents and immigration
consultants. But they are
not the appropriate professional
authority for
this purpose.
We need a regulatory
body on the lines of IC-
CRC here in Canada for
immigration consultants.
Second, people who
provide advice on immigration
must have proper
training. A degree or
diploma must be made
mandatory for becoming
a registered immigration
consultant on the pattern
of diploma requirements
in Canada and the US.
Third, the law for regulating
immigration consultancy
should be civil,
not criminal because immigration
consultancy is
basically a civil trade in
general with certain exceptions.
We cannot make
all people suffer because
of some unscrupulous
agents. Any consultant
found indulging in illegal
act can always be charged
under IPC.
Fourth, under the present
Punjab Act, unlimited
power has been vested in
DSPs or executive magistrates
to raid/search or
confiscate records of travel
agents without a warrant.
Searches should be
conducted only upon the
issue of search warrants
by courts.
Fifth, education is
needed to raise public
awareness about malpractices
in immigration.
Incorporating all these
points in the Punjab Act
and remodeling it on the
pattern of the Canadian
system is the only way to
stop malpractices in immigration.
(A former PCS offi cer, Walia
is an expert on NRI affairs.
An advocate in Punjab & Haryana
High Court at Chandigarh,
he is the author of `Legal Guide
for NRIs’. He divides his time
between Punjab and Canada
and can be contacted at walia.
rps@gmail.com)