With the global financial plunge and tighter credit restrictions on lending dealt out by many financial institutions, potential home owners are being forced to settle to rented apartments than fulfilling their deepest dream of owning their own homes. The obvious increase in rented apartments in 2009 will reflect an increase in rental prices amidst the present financial crisis. The situation is even worsened with the increase in unemployment as many home seekers will have to put off their many years of planning and possible savings for more prosperous times in the real estate sector.

 The situation takes an ironic twist as most condo prices remain steady despite the fall in demand by many buyers. It would be thought that such a situation would have generated a contrary effect but luckily for most developers they are able to reduce offers and in doing so reduce costs attached towards constructing new units. With the reduction of cost they have economized heavily in funds giving them the advantage of  focus in developing fewer amounts of units. The end result of this for most consumers is that while their may be fewer units prices remain just the same if not higher, a clear disadvantage given the present financial turmoil.

What then is being done to stimulate the real estate sector?

In order to stimulate spending and boost the economy the Federal Government has increased the withdrawal limit from the RRSP to an amount of about $5000 per individual who uses the Homebuyer's plan. This applies specifically to first-time home owners who were originally granted an amount of $20000, can now withdraw $25000 from the Homebuyer's plan. This advantage of this not only stems from an increase in amount but also due to the fact that a payment period of 15 years has been applied. First-time home owners will only be concerned in repaying 2 years after the withdrawal.

In addition to this, a tax credit of 15% up to maximum of $5000 has been given in order to cushion the costs associated with acquiring a new home. These costs range from land transfer taxes, and legal fees. This additional stimulus given by the Federal Government will encourage first-time home owners on making an attempt to acquire their dream house instead of settling for rented apartments that never guarantee ownership.

The benefits of the financial boost has not extended itself to just first-time home owners but also to existing home owners who wish to renovate their homes. A 15 percent credit has been proposed for amount between $1000 to $10000 in legitimate renovations. This includes any private home ownership such as houses, condominiums and cottages.

As time progresses, what could be classified as a year of lost dreams and financial instability, will only be a recorded event of the past. History would then have been marked with yet another record, but with budget plans from the Federal Government the Canadian Real Estate sector will once again vibrate with life as it has done during the past few years.