The following article is from Canadian Real Estate Wealth Magazine.

Hunting for the right handyman to help you with your next home improvement? The search is easier than you think A good handyman is an important player on any real estate investors’ team. Having someone you trust for renovations and can depend on in an emergency will really make a difference to your portfolio’s potential – not to mention your stress levels.

So who do you turn to when you’re looking to renovate or repair a property? Here’s a simple guide to finding the right (handy) man for the job.

1) Who’s who.
Before you start looking for home improvement help it’s a good idea to figure which type of professional is best suited to the job. “A handyman doesn’t have a trade license, he knows a little bit about everything,” says Jim Caruk, master contractor of The Caruk Group. “What you have to understand is a contractor doesn’t necessarily have to be a tradesman either. He contracts everything out and he makes sure that the people he brings in are licensed tradespeople – that’s his job.”

If you’re planning a large project that requires the expertise of a number of different professionals then you’re better off looking for a qualified general contracting company. Smaller jobs are usually best suited to a handyman who has a broad range of skills and extensive experience, but is not necessarily licensed.

2) Where to look.
There are several ways to find a good handyman or contractor, says David Foster, director of environmental affairs for the Canadian Home Builders’ Association. “There are some companies that specialize in this, and the time-tested method is asking friends, neighbours and family who they use and would recommend.”

He also suggests checking with HBA websites for “RenoMark” contractors. These contractors are members of the CHBA association and comply with the association’s code of ethics, as well as renovation-specific codes of conduct. In addition they provide warranties, meet regularly to keep up to date with current trends, materials and regulations. Caruk also suggests looking at contractors’ signs in the neighbourhood. “If you see a lot of their signs then obviously they’re on the up and up and you would think that they do good work if everyone keeps hiring them.”

3) What to ask the contractor.
When calling around, there are some key questions to ask that will help you narrow down your search.

· References – ask for at least three names

· Licensing – Licenses expire annually; so you’ll need to look at it to make sure the license is still valid. A license does not guarantee the contractor is a quality tradesperson. Foster adds, “Licensing and so forth varies from jurisdiction to jurisdiction – consumers should check with their municipal building department to determine if any local licensing is required.”

· Insurance – Business liability and WSIS insurance is a must, says Foster. If the contractor doesn’t have valid insurance coverage, you can request him or her to buy temporary insurance. Alternatively real estate expert Paul Hecht suggests having your lawyer draft a general release that stipulates the contractor fully understands that they are responsible for any accident and damage and cannot sue you. This will protect you should something break on your property or there is an injury.

4) What to ask referrers.
Whether you’re asking friends for references, or checking out the list of names provided by the handyman, there are several questions to ask that will help you determine if you’ve found the right person for the job.

· Have you personally used them?
· How many times have you worked with them?
· What did the job entail?
· Did the project start on time?
· Was the work completed on time?
· Was it on budget?
· Were there any problems?
· Would you use them again?
· Are you getting a referrer’s fee?

5) How to get the best estimate.
Price plays a major part in deciding whom to hire. Provide each home improvement professional with the same information. This may include: plans (with simple sketches or full construction drawings), and detailed descriptions of materials and products. According to Caruk they should all be within 10 per cent to 15 per cent of each other. “If you’ve got four or five and you’ve got one that’s really, really high and one that’s really, really low what you usually do is discard the highest and lowest one and work with the three guys in between. Then go with your gut feeling.” Caruk warns homeowners not to get too carried away getting estimates. “If you start getting 10, it just makes it more confusing.”

There is also a risk of alienating good professionals. Caruk usually asks how many others are bidding for the job and if there are more than five he won’t even provide a quote. According to the CHBA, a written offer becomes legally binding and becomes part of the contract between you and the handyman should you accept it. That said there are always unexpected challenges in any project. Make sure you set aside a contingency fund in your budget.

6) What to expect from the contract.
The Canadian Mortgage and Housing Corporation suggests a typical contract might include:

· Description of the work to be done – make this as detailed as possible. Include: prep work, items to be salvaged or reused, waste disposal, structural details, product information, size and location of things like doors, windows, closets and finishing work such as coats of paint and stain.

· Any permits needed and who is responsible for providing and paying for them
· Supplies and materials
· Sub contractors (if needed)
· Timing – when work is to commence and full completion date
· Terms of payment – fixed cost basis, cost plus or cost plus fixed fee
· Payment schedule – Never pay huge sums of money upfront. Some contractors will ask for a down payment as a show of good faith – on average this is about $2,500. Additional payments should be based on the work completed, not time put into the job
· Extras and how they will be calculated
· Washroom facilities and Utilities
· Standards of work (level of clean-up, hours permitted on site)
· Third-party liability insurance details
· Compliance with Workers’ Compensation and other laws
· Warranty
· Default by owner or contractor – indicates what happens if either owner or contractor defaults on terms of contract
· Dispute resolution – an agreed upon process to deal with potential conflicts

7) How to manage your handyman.
The contract forms the basis of your relationship with your contractor or handyman. According to Foster, “In all situations, effective management of a contractor requires clarity about what they are being hired to do, how and when they will do it, what their services will cost and when payment will be due, and what warranty do they provide on their work. It needs to be in writing. Every time. Period.” Once the job is underway, communication and mutual respect will play a vital role in keeping things rolling along smoothly. A good handyman or contractor should not make you feel uncomfortable for asking questions.

On the other side, try to be reasonable with your expectations. The CMHC advises homeowners, “Don’t overreact if something is wrong. Allow sufficient time for a response. As well, things the contractor can’t control, like bad weather and back-ordered components, can delay the job, so leave a little leeway in your schedule for them.” If things start to go pear-shaped, follow the dispute resolution method outlined in the contract. And if all else fails, you can cancel the contract. However, this will likely result in a cancellation fee. Be aware that there are several laws protecting consumers, which vary across the provinces and territories.

In addition to contacting your consumer protection authority, you can also get in touch with the Better Business Bureau. If legal action is necessary, you can take the contractor to small claims court. Small claims are less complicated than a formal court case and do not require the services of a lawyer. Decision in small claims courts are binding.

How to spot a handyman from hell

• Bad presentation – Late for your initial meeting? Reluctant to answer questions? Vague about the technical aspects of how they’d handle the job? These are all indications that they might not be capable or trustworthy
• Poor communication skills – Communication is absolutely vital to the success of any project. You need someone that is willing to listen to our ideas, concerns and suggestions and who in turn, is able to effectively discuss challenges with you as they come up
• Requests cash only payments – Don’t be tempted if they offer a discount to you if you pay in cash. You want to keep as much of a paper trail as possible and all payments should be cheques or certified cheques
• Doesn’t provide receipts – make sure you get a receipt for all your payments, signed and dated by the contractor
• Does not want signage – Many renovation companies ask to promote their services to your neighbours by displaying signs on the property. According to the Canadian Mortgage and Housing Corporation, if the company does not want to display a sign, it could be an indication it is trying to avoid scrutiny

From Canadian Real Estate Wealth Magazine, a monthly publication focused on building value through property investment, covering topics such as values and trends, mortgages, investment strategies, surveys of regional markets and general tips for buyers and sellers.

There are more than 20,000 homes for sale in the Lower Mainland, so making your home stand out for potential buyers is vital. It is especially true in today’s buyer’s market.

First, work with your Realtor to get the maximum exposure for the home. Then prep both yourself and your home for sale day.

Say to yourself, “This is not my home; it is a house—a product to be sold.” Make the mental decision to let go of your emotions and focus on the fact that soon this house will no longer be yours. Picture yourself handing over the keys and envelopes containing appliance warranties to the new owners.

Say goodbye to every room. Don’t look backwards—look toward the future. All sellers want their home to sell fast and bring top dollar. Well, it’s not luck that makes that happen. It’s careful planning and knowing how to professionally spruce up your home. Here is how to prep a house and turn it into an irresistible and marketable home.

Dawna Johnson, an Accredited Staging Professional Master (ASP) says the idea behind staging is to allow rooms to show themselves.Think clean and simple: when prepping a home for sale, get rid of clutter, clean and, if necessary, stage rooms with rented artwork, flowers.

“If your home is vacant, it’s soulless,” Dawna warns. “Without staging, it will probably remain on the market for many months.” She has this practical advice for making a home sparkle:

• Apply orange oil to cabinets that appear dry, which will renew their original lustre
• Put out large bowls of fruit such as polished apples, bright oranges, luscious grapes
• Arrange colourful and fun cookbooks on the kitchen counters

Dawna believes in bringing the outdoors inside through the use of greenery and plants, creating clean, crisp spaces and arranging furniture with plenty of room to walk around.

She says bathrooms are essential to dress well. “Bathrooms should look open, airy and delightful,” says Dawna. One of her favourite tricks is to add baskets filled with spa items such as small towels tied with ribbon, bottles of lotion and scented soaps.

The front and back yards often need staging, too. For patios and decks, Dawna brings in plants and potted flowers and makes sure decks are clean and clutter free. Your Realtor has been through many open houses and will be able to provide other tips on getting your home sale-day ready.

The Greater Vancouver housing market experienced below average home sale totals, typical home listing activity and modest declines in home prices in 2012.

The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2012 reached 25,032, a 22.7 per cent decline from the 32,387 sales recorded in 2011, and an 18.2 per cent decrease from the 30,595 residential sales in 2010. Last year’s home sale total was 25.7 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.

The number of residential properties listed for sale on the MLS® in Greater Vancouver declined 2 per cent in 2012 to 58,379 compared to the 59,539 properties listed in 2011. Looking back further, last year’s total represents a 0.6 per cent increase compared to the 58,009 residential properties listed in 2010. Last year’s listing total was 6.1 per cent above the ten-year average for annual MLS® property listings in the region.

"For much of 2012 we saw a collective hesitation on the part of buyers and sellers in the Greater Vancouver housing market. This behavior was reflected in lower than average home sale activity and modest fluctuations in home prices,” Eugen Klein, REBGV president said.

Residential property sales in Greater Vancouver totalled 1,142 in December 2012, a decrease of 31.1 per cent from the 1,658 sales recorded in December 2011 and a 32.3 per cent decline compared to November 2012 when 1,686 home sales occurred.

December sales were 38.4 per cent below the 10-year December sales average of 1,855.

Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 5.8 per cent to $590,800. This represents a 2.3 per cent decline when compared to this time last year.

“We saw home prices come down a bit during the latter half of the year. During the same period, we saw fewer home sales and listings,” Klein said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 1,380 in December 2012. This represents a 15.3 per cent decline compared to the 1,629 units listed in December 2011 and a 50 per cent decline compared to November 2012 when 2,758 properties were listed.

Sales of detached properties in December 2012 reached 425, a decrease of 32.5 per cent from the 630 detached sales recorded in December 2011, and a 44.7 per cent decrease from the 769 units sold in December 2010. The benchmark price for detached properties decreased 2.7 per cent from December 2011 to $904,200. Since reaching a peak in May, the benchmark price of a detached property has declined 6.5%.

Sales of apartment properties reached 504 in December 2012, a decline of 34.9 per cent compared to the 774 sales in December 2011, and a decrease of 37.9 per cent compared to the 811 sales in December 2010.The benchmark price of an apartment property decreased 1.9 per cent from December 2011 to $361,200. Since reaching a peak in May, the benchmark price of an apartment property has declined 12.8%.

Attached property sales in December 2012 totalled 213, a decline of 16.1 per cent compared to the 254 sales in December 2011, and a 33.2 per cent decrease from the 319 attached properties sold in December 2010. The benchmark price of an attached unit decreased 2.6 per cent between December 2011 and 2012 to $450,900. Since reaching a peak in April, the benchmark price of an attached property has declined 4.4%.

“Activity continues to vary depending on area so it’s important to work with your REALTOR® and other professionals to understand the trends in your area of interest,” Klein said.   

The Real Estate industry is a key economic driver in British Columbia. In 2008, 24,626 homes changed hands in the Board's area generating $1.03 billion in spin-offs. The Real Estate Board of Greater Vancouver is an association representing more than 9,400 REALTORS®. The Real Estate Board provides a variety of membership services, including the Multiple Listing Service®. For more information on real estate, statistics, and buying or selling a home, contact a local REALTOR® or visit www.rebgv.org.

For more information please contact: 
Craig Munn, Assistant Manager of Communications
Real Estate Board of Greater Vancouver
Phone: (604) 730-3146 
cmunn@rebgv.org

Over the past six months, the Greater Vancouver housing market has seen a reduction in the number of homes listed for sale, a gradual moderation in home prices and a decrease in property sales compared to historical averages.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,686 on the region’s Multiple Listing Service® (MLS®) in November, a 28.6 per cent decline compared to the 2,360 sales in November 2011 and a 12.7 per cent decline compared to the 1,931 home sales in October 2012.

November sales were 30.3 per cent below the 10-year November sales average of 2,420.

“Home sellers appear more inclined to remove their properties from the market today rather than lower prices to sell their properties. On the other hand, buyers appear to be expecting prices to moderate,” Eugen Klein, REBGV president said.
 
New listings for detached, attached and apartment properties in Greater Vancouver totalled 2,758 in November. This represents a 14.4 per cent decline compared to November 2011 when 3,222 properties were listed for sale on the MLS® and a 36.2 per cent decline compared to the 4,323 new listings in October 2012.

New listings were 12.9 per cent below the 10-year November average of 3,168.

At 15,689, the total number of residential property listings on the MLS® increased 13 per cent from this time last year and declined 9.7 per cent compared to October 2012. Total listings in the region have declined by nearly 3,000 properties since reaching a peak of 18,493 in June.

The region’s sales-to-active-listings ratio was unchanged from October at 11 per cent.

“Home prices in Greater Vancouver have generally declined between three and five and a half per cent, depending on property type, since reaching a peak six months ago,” Klein said. “Changes in home prices vary per municipality and neighbourhood. It’s good to check local market statistics with your REALTOR®.”

Since reaching a peak in May of $625,100, the MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver has declined 4.5 per cent to $596,900. This represents a 1.7 per cent decline when we compared to this time last year.

Sales of detached properties in Greater Vancouver reached 629 in November, a decrease of 31.3 per cent from the 916 detached sales recorded in November 2011, and a 40.1 per cent decrease from the 1,050 units sold in November 2010. Since reaching a peak in May, the benchmark price for a detached property in Greater Vancouver has declined 5.5 per cent to $914,500.

Sales of apartment properties reached 750 in November 2012, a 25 per cent decrease compared to the 1,000 sales in November 2011, and a decrease of 28.7 per cent compared to the 1,052 sales in November 2010. Since reaching a peak in May, the benchmark price for an apartment property in Greater Vancouver has declined 3.9 per cent to $364,900.

Attached property sales in November 2012 totalled 307, a 30.9 per cent decrease compared to the 444 sales in November 2011, and a 24.6 per cent decrease from the 407 attached properties sold in November 2010. Since reaching a peak in April, the benchmark price for an attached property in Greater Vancouver has declined 3.6 per cent to $454,300.

Feature Facts:

• Of the 15,689 homes currently for sale on the MLS® in Greater Vancouver, 49.6 per cent are listed for $600,000 or less. Of those, 1,321 are detached properties, 5,039 are condominiums and 1,419 are townhomes.
• Of the 1,686 homes that sold in Greater Vancouver in November, 273 (16%) sold for $1 million or more.

November 1, 2012
REW.ca

The Metro Vancouver real estate market has climbed since 2002, with one big dip during the recession of 2008–09 and a current flattening trend.  During that time interest rates have fallen until they've bottomed out for the last two years. 

It's been a fertile environment for flipping: buying properties, improving them (or not) and selling them again in a short time, hoping to make a profit.

Flippers, speculators or short-term investors — depending on what you like to call them — include everyone from  the couple who buy a house, fix it up and sell it, to the offshore investor who scoops up pre-sale condos and sells once the building is up, to the builder who knocks down a house and builds a spec triplex with a laneway house in back, all the way to the giant development company that buys up a block of houses and puts high-rise condos in their place.

We wanted to know, is flipping is as prevalent as it seems to be in the real estate markets of Vancouver and the Lower Mainland? And was it ever? We asked Landcor Data Corporation to do what they do best and sift through their stats for the answers.

They tracked eight years of data on houses, townhouses and condos that were bought and sold within short periods of time: under 6 months, 6 months to 1 year, 1 year to 18 months, and 18 months to 2 years. The findings were intriguing:

• Flipping activity peaked in 2005–07 and never returned to those levels after the 2008–09 recession
• Six-month flips practically disappeared this year
• Yields also peaked in 2005–07, despite large increases in home prices and low interest rates after the recession
• Except for the bottom of the recession, it's been profitable to flip in the Metro Vancouver market since at least 2004

How much flipping is going on?

The volume chart covers all three housing types (detached, townhouse, condo). It shows that Vancouver has consistently been the investor hot spot in the Lower Mainland. This stands out particularly in the 6-month term, where a property is bought, upgraded cosmetically and turned around fast. In the one-year-plus terms, where properties are being substantially renovated or replaced by new homes, Surrey experienced a surge of activity before the recession. Then, both Surrey and Vancouver saw activity fall off by a factor of two or three afterwards.

Why has activity dropped steeply since the 2008–09 recession? It's fallen off much more than the average housing price has come up.

We talked to a couple of local companies with many years in the building trade to see if the numbers match their observations.

Graham Collins of Kenorah Construction & Design in Delta remembers the pre-2008 market as "the wild west," when a lot of amateurs entered the market with dollar signs in their eyes.

"If you  look back to those  statistics, five to eight  years ago a lot of the companies that were doing this flipping work, they were purely cosmetic changes, and they were not performing all of the code- and bylaw-driven requirements we see now. It's very difficult to get away with that now unless they're going to avoid permiting and do it on the sly."

When it comes to making a quick profit these days by selling homes, he sees three big hurdles:

• The enormously escalated cost of buying a property
• The increased burden of code and bylaw compliance
• The reduced inventory of homes that meet the criteria for flipping

A lot of the good flip opportunities in detached houses have been exhausted, he says.

"You're looking for excellent bones and dated interiors, and therefore the flip is going to focus on that cosmetic upgrade, maybe with some modest reconfiguring. Those are few and far between these days.

"Now the inventory of homes tends to fall into two categories. They're either still in good shape, in which case the seller is trying to capture that value on resale, so there is no flip opportunity. Or this is no longer a $100,000 upgrade, this is  a $400,000 upgrade because there are structural, mechanical, performance issues in the home that require a far more invasive level of change.

"And those things are not as visible to the prospective homeowner. People who are going to buy a flipped house are looking for sexy finishing. A builder may have had to upgade mechanical systems, do fireproofing… legitimate costs, but not things that are going to gather the full return on investment."

Lloyd Kinney of MLK Properties  in Steveston points to what he calls "the HGTV effect," where   it looks a lot easier on TV than it is in real life. Small-time flippers are not going to be able to get an army of skilled workers descending on their property and wrapping it up in three weeks.

"There was a lot of large-scale multifamily activity over the last five years. It was very difficult to get trades when it was busy because the trades were focusing on working with the big developers. So to go and do a one-off here and there, it was very difficult to line up. And then if you did manage to get them there, you were going be charged at a premium, so that affects your return on investment."

He also sees the HST, introduced in July 2010, as a big factor.

"If you are someone who flips homes on the side, you're going to wait until HST runs out. If you're building a new home from scratch and you have to add another 12% on top of the already increased land values and inflated home prices, it makes it a lot tougher for homeowners to make that return. So on a million- or two-million-dollar home investment, you're saving yourself hundreds of thousands of dollars."

In other words, flipping has dropped off in the Lower Mainland because it's become less profitable. And the numbers bear that out.

Is there money to be made?

These charts show the percentage increase in value from bought date to sold date. We don't know how much was invested in improving the properties, so the charts can't tell us actual profits, just yields.

Except for the trough in 2008–09, yields have consistently been over 10 per cent — in many cases, spectacularly so. Compare that to a stagnant stock market and low bond rates, and flipping appears to be a great investment.

But it's not for the faint of heart. Lloyd Kinney says he's noticed that with the higher costs and current correction, there's a bit of fear in the air.

"People aren't able to flip something in 6 months anymore. They may want to, but they're not able to because things are staying on the market longer, especially in the million-dollar-plus area. So that's why you're seeing plateauing on the 1-year-to-2-years charts."

He says a businesslike attitude is essential.

"A business doesn't make a 25–30 per cent return on investment every year. You see a lot of flippers and even builders that are sitting on a lot of inventory, trying to keep the price up because they're worried that it'll lower their value of their sales in the future. But you can't think about that. You have to write it off on the books, or say maybe I'll take 5% instead of 15%, and when things get rosy again we'll be back up to our 20% again." 

With lower margins and less opportunity to do a quick-and-dirty flip, the amateurs have mostly been shaken out, says Kenorah's Graham Collins."Flipping is being performed by companies by the book, according to code, therefore it's more costly.

"The winner in all of those things is the homeowner."

Landcor Data Corporation is an independent research firm  with the largest, most comprehensive database on BC real estate, provided by the BC Government. Landcor draws on a wide range of other data, and on almost 25 years of deep analysis of the real estate market.

The Greater Vancouver housing market saw a slight increase in the number of home sales, a slight reduction in the number of listings, and a slight decrease in home prices in October compared to the summer months. With those changes, the sales-to-active-listings ratio increased to 11 per cent in October from 8 per cent in September.

The Real Estate Board of Greater Vancouver (REBGV) reported 1,931 residential property sales of detached, attached and apartment properties on the region’s Multiple Listing Service® (MLS®) in October, a 16.7 per cent decline compared to the 2,317 sales in October 2011 and a 27.4 per cent increase compared to the 1,516 home sales in September 2012.

October sales were 28.5 per cent below the 10-year October sales average of 2,700.

“Buyer demand increased slightly in October compared to the previous few months,” Sandra Wyant, REBGV president-elect said. “Overall conditions in today’s market remain in favour of buyers, with low interest rates, more choice, and less time pressure in terms of decision-making. This translates into a calmer atmosphere for those looking to buy a home and it places more onus on sellers to ensure their homes are priced to compete in today’s marketplace.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,323 in October. This represents a 1.2 per cent decline compared to October 2011 when 4,374 properties were listed for sale on the MLS® and an 18.8 per cent decline compared to the 5,321 new listings in September 2012.

At 17,370, the total number of residential property listings on the MLS® increased 12 per cent from this time last year and declined 5.3 per cent compared to September 2012.

Since reaching a peak of $625,100 in May, the MLS Home Price Index® (MLS HPI®) composite benchmark price for all residential properties in Greater Vancouver declined 3.4 per cent to $603,800 in October. This represents a 0.8 per cent decline compared to last year.

“There’ve been modest price changes since they peaked in the spring. The largest reductions have occurred in the areas and property types that experienced the biggest price increases over the last few years,” Wyant said.

Since hitting a record high in April, the benchmark price of a detached home on the Westside of Vancouver has declined 8.6 per cent while detached homes in Richmond and West Vancouver have seen declines of 6 per cent over the same time period.

Sales of detached properties in Greater Vancouver reached 790 in October, a decrease of 18.9 per cent from the 974 detached sales recorded in October 2011, and a 19.1 per cent decrease from the 976 units sold in October 2010. Since reaching a peak in May, the benchmark price for a detached property in Greater Vancouver has declined 4.1 per cent to $927,500.

Sales of apartment properties reached 803 in October 2012, a 16.2 per cent decrease compared to the 958 sales in October 2011, and a decrease of 18.4 per cent compared to the 984 sales in October 2010. Since reaching a peak in May, the benchmark price for an apartment property in Greater Vancouver has declined 2.9 per cent to $368,800.

Attached property sales in October 2012 totalled 338, an 11.5 per cent decrease compared to the 382 sales in October 2011, and a 10.3 per cent decrease from the 377 attached properties sold in October 2010. Since reaching a peak in April, the benchmark price for an attached property in Greater Vancouver has declined 2.9 per cent to $457,700.

The summer of 2012 drew to a close in September with home sale activity well below historical averages in the Greater Vancouver housing market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,516 in September, a 32.5 per cent decline compared to the 2,246 sales in September 2011 and an 8.1 per cent decline compared to the 1,649 sales in August 2012.

September sales were 41.6 per cent below the 10-year September sales average of 2,597.

“There’s been a clear reduction in buyer demand in the three months since the federal government eliminated the availability of a 30-year amortization on government-insured mortgages,” Eugen Klein, REBGV president said. “This makes homes less affordable for the people of the region.”

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,321 in September. This represents a 6.3 per cent decline compared to September 2011 when 5,680 properties were listed for sale on the MLS® and a 31.6 per cent increase compared to the 4,044 new listings in August 2012.

At 18,350, the total number of residential property listings on the MLS® increased 14.1 per cent from this time last year and increased 4.5 per cent compared to August 2012.

“Today, our sales-to-active-listings ratio sits at 8 per cent, which puts us in a buyer’s market. This ratio has been declining in our market since March when it was 19 per cent,” Klein said.

The MLS HPI® composite benchmark price for all residential properties in Greater Vancouver is $606,100. This represents a decline of 0.8 per cent compared to this time last year and a decline of 2.3 per cent over last three months.

“Prices in the region remain relatively stable overall, although we do see some reductions in the areas that have had some of the largest price increases over the last year or two,” Klein said.

Sales of detached properties on the MLS® in September 2012 reached 594, a decrease of 37.9 per cent from the 957 detached sales recorded in September 2011, and a 31.4 per cent decrease from the 866 units sold in September 2010. The benchmark price for detached properties decreased 0.5 per cent from September 2011 to $935,600.

Sales of apartment properties reached 676 in September 2012, a 26.7 per cent decrease compared to the 922 sales in September 2011, and a decrease of 30.4 per cent compared to the 971 sales in September 2010. The benchmark price of an apartment property decreased 0.7 per cent from September 2011 to $368,600.

Attached property sales in September 2012 totalled 246, a 33 per cent decrease compared to the 367 sales in September 2011, and a 35.8 per cent decrease from the 383 attached properties sold in September 2010. The benchmark price of an attached unit decreased 2.7 per cent between September 2011 and 2012 to $458,600.

copyright© real estate board of greater vancouver. all rights reserved.

Home sellers continue to outnumber buyers in Greater Vancouver’s summer housing market

Home sale activity remained below long-term averages in the Greater Vancouver housing market in August.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties reached 1,649 in August, a 30.7 per cent decline compared to the 2,378 sales in August 2011 and a 21.4 per cent decline compared to the 2,098 sales in July 2012.

August sales were the second lowest total for the month in the region since 1998 and 39.2 per cent below the 10-year August sales average of 2,711.

“Home sales this summer have been lower than we’ve seen for most of the past ten years, yet we continue to see relative stability when it comes to prices,” Eugen Klein, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,044 in August. This represents a 13.7 per cent decline compared to August 2011 when 4,685 properties were listed for sale on the MLS® and a 15.8 per cent decline compared to the 4,802 new listings in July 2012.

“For sellers it’s critical to work with your REALTOR® to understand today’s market and to develop the best strategy for selling your home,” Klein said. “On average it’s taking about two months for a home to sell on the MLS® in Greater Vancouver today.”

At 17,567, the total number of residential property listings on the MLS® increased 13.8 per cent from this time last year and declined 2.8 per cent compared to July 2012.

“Today, our sales-to-active-listings ratio sits at 9 per cent, which puts us in a buyer’s market. This ratio has been declining in our market since March when it was 19 per cent,” Klein said.

The MLSLink® Housing Price Index (HPI) composite benchmark price for all residential properties in Greater Vancouver is $609,500. This represents a decline of 0.5% compared to this time last year and a decline of 1.1% compared to last month.

Sales of detached properties on the MLS® in August 2012 reached 624, a decrease of 38.8 per cent from the 1,020 detached sales recorded in August 2011, and a 30.1 per cent decrease from the 893 units sold in August 2010. The benchmark price for detached properties increased 0.2 per cent from August 2011 to $942,100.

Sales of apartment properties reached 725 in August 2012, a 24.1 per cent decrease compared to the 955 sales in August 2011, and a decrease of 22.5 per cent compared to the 935 sales in August 2010. The benchmark price of an apartment property decreased 0.9 per cent from August 2011 to $370,100.

Attached property sales in August 2012 totalled 300, a 25.6 per cent decrease compared to the 403 sales in August 2011, and a 19.8 per cent decrease from the 374 attached properties sold in August 2010. The benchmark price of an attached unit decreased 1.9 per cent between August 2011 and 2012 to $462,300.

copyright© real estate board of greater vancouver. all rights reserved.

August 27, 2012
Jason Neumann, Realtor

Whether you are considering buying a new home or refinancing your existing mortgage, important personal information and documents will be required by lenders. This checklist gives an overview of the necessary documentation that most Canadian lenders require prior to approving and funding a mortgage. By providing these documents in a timely fashion, you will help to ensure a speedy approval/renewal process.

Buying a Home?

Information that describes the property you are purchasing:

• Contract of Purchase and Sale Agreement*
• MLS Detail Feature Sheet*
• Property Disclosure Statement (PDS)*
• Title search*
• Strata property information: Form B, Meeting Minutes, Strata Fees* **
• Name, address, telephone number of your solicitor/notary
• Confirmation of your down payment:
• Savings or investment statement from the last 90 days
• Sale of an existing property – a copy of the sale agreement
• Gift letter if down payment funds are from family, friend etc.
• Withdrawal from RRSP through the Home Buyer’s Plan

Employment verification:

• Copy of latest pay slip
• T4
• Letter of employment
• T1 General and Notice of Assessment (NOA) if self-employed

Refinancing Your Home?

Information that describes your existing property:

• Recent mortgage statement
• Current homeowner insurance policy
• Recent property tax statement
• Legal description of your property

Additional information that may be required…

As part of your application process, you may be asked questions relating to what you owe and own. Some projected expenses relating to your property such as taxes, heating costs and condo fees may be requested.

Once the Lender has Given Final Approval:

• A void cheque for the account that the mortgage funds are to be debited from.

This checklist is by no means exhaustive, as each lender has criteria that are important to them. Should you have any questions about applying for a mortgage or refinancing an existing property, speak with a mortgage professional. Your Realtor will be able to refer someone in your area.

*Your real estate agent will be able to provide these documents to your bank or mortgage broker.

**Typically required if purchasing strata-titled property.

Jason Neumann is a Realtor with CENTURY 21 Assurance Realty in Kelowna, BC. 

August 22, 2012
Matthew Chan, CA MBA AMP

If you're in a fixed-rate mortgage from last year or earlier, chances are you're at a fixed rate higher than the going rates today. We're still in the midst of all-time low interest rates. It's tempting to think you might be able to prune your expenses or cut the term of your mortgage by refinancing early.

But before you decide to refinance your mortgage, here are some tips on how to proceed so you won't be hit with any nasty surprises.

Step 1. Contact a mortgage professional

Choose your mortgage broker carefully. Here are some things to consider:

• How long has this mortgage broker been in the business?
• Does this mortgage broker specialize in refinancing?
• Is this person a full-time (vs a part-time) mortgage broker?
• Is this an independent mortgage broker or one employed by a lender?
• What type of professional designations or educational background does this mortgage broker have?

Step 2. Determine why you would like to refinance

Besides getting a better rate, you should consider other reasons for refinancing your mortgage. 

• Do you have some unsecured debt that you would like to consolidate? 
• Would you like to take out some money for investment purposes? 
• Are you very unhappy with your current lender? 

By determining your reasons for refinancing, you're in a better position to evaluate your options.

Step 3. Determine the short-term and long-term goals for your home

Before refinancing your mortgage, first evaluate what your goals are for your current home. If you're looking to sell and purchase a new home soon, consider holding off your refinance until you purchase your new home. You'd be saving yourself the time and trouble by applying for a new mortgage just once (when you buy your new home) instead of twice (the refinance and then buying your new home).

 Step 4. Determine what the penalty is to refinance

This is usually the biggest obstacle. In a fixed-rate mortgage, you are contractually obliged to keep your mortgage until it's up for renewal. As a result, if you refinance it before maturity, the lender charges a penalty. A penalty might be reduced or even eliminated if the refinance is done with the same lender (some lenders have options for an early renewal).

The payout penalty is usually the greater of two numbers:1)  3 months' interest, or 2) Interest Rate Differential (IRD).

 The IRD is probably one of the most misunderstood terms in the mortgage industry. It is explained by a major bank's website in this way: 

The IRD amount is equivalent to the difference between your
annual interest rate and the posted interest rate on a mortgage
that is closest to the remainder of the term less any rate discount
you received, multiplied by the amount being prepaid, and
multiplied by the time that is remaining on the term.

Huh?

A full explanation of the IRD process is beyond the scope of this article. However, the tactics that banks use to inflate penalties are very real. Here's a great article on the subject.

Note: Some "no frill" mortgages simply don't allow refinancing. If you have such a mortgage, check the terms and conditions.

Step 5. Calculate the real cost of refinancing your mortgage

Once you know the penalty amount and the rate you are eligible to get in the market today, you should be able to evaluate if it's worthwhile to refinance. At this stage, you should lean on your mortgage broker to evaluate the figures and provide some suggestions.

Even if the penalty for refinancing your mortgage is higher than your savings with the lower rate, it could still be worthwhile to consider a refinance for the following reasons:

• You are consolidating high-interest consumer debt (credit cards, personal loans, etc.) such that your overall cost of borrowing is lower after refinancing your mortgage.
• You are concerned about interest rates moving up, so by refinancing to a longer-term mortgage you expect to save money over the long term if rates move up in the future.

In some cases, a mortgage refinance can save thousands of dollars. At the current low interest rates, it's definitely worth checking with an independent mortgage broker to see if refinancing makes sense for you.

Matthew Chan has been a licensed mortgage broker since 2004 and has served on the Board of Directors for MBABC. Before becoming a mortgage professional, Matt earned a Chartered Accountant designation with a Big Four accounting firm and an MBA from the Rotman School of Management at the U of T. Canadian Mortgage Professional (CMP) magazine has included him in its 2012 Top 75 Brokers list.

Residential property sales in Greater Vancouver remained at a 10-year low in July, while the number of properties being listed for sale continued to edge down and prices remained relatively stable.

The Real Estate Board of Greater Vancouver (REBGV) reports that there were 2,098 residential property sales of detached, attached and apartment properties in July. That’s an 18.4 per cent decline compared to the 2,571 sales in July 2011 and an 11.2 per cent decline compared to the previous month’s 2,362 sales.

July sales were the lowest total for that month in the region since 2000. They were 31.2 per cent below the 10-year July sales average of 3,051.

“People appear to be cautious about making significant financial decisions right now. While our local economy appears to be quite robust, there may be some concern about the impact of international markets and the federal government’s tightening of mortgage regulations,” says Eugen Klein, REBGV president.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,802 in July, the lowest number of new listings for any month this year. This represents a 5.8 per cent decline compared to July 2011 when 5,097 properties were newly listed for sale on the Multiple Listing Service® (MLS®) and a 14.5 per cent decline compared to the 5,617 new listings reported in June 2012.

At 18,081, the total number of active residential property listings on the MLS® increased 18.8 per cent from this time last year and decreased 2.2 per cent compared to the previous month.

“With a sales-to-actives-listing ratio of 11.6 per cent, conditions have favoured buyers in our marketplace in recent months,” Klein said. “That means buyers have more selection to choose from and more time to make a decision. For sellers, it’s important to price properties competitively. For information on local market prices, contact your REALTOR®.”

The MLS® Home Price Index (MLS® HPI) composite benchmark price for all residential properties in Greater Vancouver over the last 12 months has increased 0.6% to $616,000 and declined 0.7% compared to last month.

Sales of detached properties on the MLS® in July 2012 reached 787, a decrease of 28.4 per cent from the 1,099 detached sales recorded in July 2011, and a 13.3 per cent decrease from the 908 units sold in July 2010. The benchmark price for detached properties increased 1.4 per cent from July 2011 to $950,200 and declined 1.2 per cent compared to last month.

Sales of apartment properties reached 927 in July 2012, a 10.9 per cent decrease compared to the 1,040 sales in July 2011, and a decrease of 5.3 per cent compared to the 979 sales in July 2010. The benchmark price of an apartment property remains unchanged compared to July 2011 at $374,300 and declined 0.5 per cent compared to last month.

Attached property sales in July 2012 totalled 384, an 11.1 per cent decrease compared to the 432 sales in July 2011, and a 4.3 per cent increase from the 368 attached properties sold in July 2010. The benchmark price of an attached unit decreased 0.5 per cent between July 2011 and 2012 to $468,700 and is relatively unchanged compared to last month.

copyright© real estate board of greater vancouver. all rights reserved.

Last year’s big house price increases in Vancouver was accompanied by discussion of the role Chinese purchasers were playing in the price run-up. Now, the pendulum has swung the other way and  Vancouver’s housing market is slowing. This shift coincides with recent hints that China’s economy is cooling.  In truth, the shadow from the east has long loomed over the Vancouver housing market and some believe that a slowing Chinese economy could signal a period of weakness ahead. But is that consistent with past trends?

As Canada’s “gateway to the Pacific”, Vancouver’s attraction to Chinese immigrants stretches back to the 19th century when the gold rush and railway construction  brought thousands of Chinese residents to British Columbia. More recently, the Chinese takeover of Hong Kong in 1997 spurred many of that colony’s residents to seek Canadian citizenship and migrate to the province. Data from the British Columbia Bureau of Statistics show that immigration from mainland China to Vancouver averaged just over 9,600 persons per year in the decade to 2010, the most recent figures available, peaking at nearly 13,000 persons in 2005. China is typically the largest source of immigrants to Vancouver, accounting for nearly a quarter of all arrivals in 2010.

These immigrants need a home and have supported housing demand growth in British Columbia for several years. Some come to BC with a significant amount of wealth and, thus, a strong appetite to invest in the housing market.  Catering to Chinese residential demand is big business out here; the Chinese Real Estate Professionals Association of BC lists over 200 members on its website.

There is a clear correlation between Chinese immigration and real estate activity in Vancouver. In fact, the Chinese immigration peak of 2005 was matched by a peak in existing home sales in that same year. The 42,000 resale transactions that year were nearly 50 per cent above the previous decade’s average and remain a record high for this market. By contrast, Vancouver existing home sales volume was fewer than 22,300 units in 1999 when less than 7,700 Chinese arrived.

But is there a similar correlation between economic growth in China and the Vancouver housing market? Offshore investors do not need to live in Canada to own a property in Vancouver and it is possible to arrange property management by a professional or a family member. This is in contrast with Australia, for instance, which requires temporary residents to sell their real estate before leaving the country.

Accordingly, Chinese wealth probably has a larger affect on the Vancouver housing market than immigration numbers alone suggest, since Chinese investors can buy homes here while remaining there. Faster Gross Domestic Product growth in China makes more of its citizens well-off and some of these are likely to invest money in Vancouver real estate.

Several measures of Vancouver housing market health have broadly followed the Chinese GDP performance. For instance, as shown in Chart 1, resale price advances hit double digits in 1992 and 1993, while China’s economy was hot, then subsided as Chinese output hikes eased.  Accelerating Chinese growth during the past decade was accompanied by surging Vancouver MLS price increases. The financial crisis of 2008 was hard on both Chinese growth and Vancouver house prices, but by 2010 both were once again in double-digits. 

The new construction market has reacted similarly to the Chinese economy. Chart 2 shows that total housing starts in Vancouver hit 21,300 units in 1992, but softened markedly thereafter. Slowing Chinese economic growth in 2008 preceded a big starts drop in 2009.

The bottom line is that expectations of slowing Chinese economic growth could be considered as big a drag on the Vancouver housing market going forward as anything else, including the city’s notoriously poor affordability.

Source: www.conferenceboard.ca

Author: Robin Wiebe