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

In a bid to save Canadians from themselves, Ottawa has tightened some lending rules for CMHC-insured mortgages.

Finance Minister Jim Flaherty has been expressing concern about Canadians' record household debt levels for about a year, especially in light of a persistent housing boom in most large cities.

One thing hasn't changed: it's still possible to buy a home with a small downpayment. If you have 5 to 20 per cent to put down, you need to qualify for mortgage insurance to get a prime mortgage, and that generally means CMHC (Canada Mortgage and Housing Corporation).

As of July 9, the following changes will affect you, but only if you need a CMHC-insured mortgage. They don't apply to conventional mortgages.

• The maximum amortization period is 25 years, down from 30 years. (Note that current pre-approved mortgages with 30-year amortization are not grandfathered. Unless a purchase is made before July 9, the amortization on the pre-approved, CMHC-insured mortgage will be reduced to 25 years.)
• Homes over $1 million are no longer eligible for CMHC-insured mortgages.
• The maximum amount you can borrow to refinance your mortgage is 80 per cent of the value of your home, down from 85 per cent.
• You can only qualify for CMHC insurance if your maximum gross debt service (GDS) is 39 per cent and your maximum total debt service (TDS) is 44 per cent (down from 45 per cent). These numbers refer to the percentage of your income needed for all housing costs (GDS) and the percentage required for GDS plus other debts (TDS). Some lenders may have lower guidelines.

The Finance Minister says these measures are aimed at slowing down a housing market that looks overexcited, and preventing Canadians from stretching themselves too far to buy a home in a hot market. "What we anticipate is less than five per cent of new home purchasers will be affected by these measures.... Some people will buy less into the market.... I consider that desirable."

Check with your Realtor or mortgage broker for more information. Meanwhile, here is an FAQ on the changes.

At the same time, new regulations aimed at conventional mortgages came down from OSFI, the federal organization that oversees the finance industry. These should have little effect on CMHC-backed mortgages. Mostly they direct financial institutions to check and verify borrowers' identity and ability to pay -- things we hope the lenders are already doing.

The biggest change affecting consumers is in home equity lines of credit (HELOCs). The maximum loan-to-value ratio for these will now be 65 per cent, down from 80 per cent.

This change addresses widespread concern that Canadians are borrowing too much against the equity in their homes. The government wants home ownership to be a vehicle for saving, not spending.

Source: REW.ca

How much is your home worth?

The only real value is what a buyer and a seller shake hands on. But if you're selling or buying a home -- or paying taxes on one -- you need a realistic dollar figure to work from.

And that is going to depend on whom you ask. Your home has different value to different people and institutions, and many percentage points can separate the assessed value from the price your home actually fetches on the market. (Isn't that why you immediately suspect something's very wrong with a house that's being offered at below assessed value?)

Here's a top-to-bottom look at who determines house prices and what they're thinking.

$$$$

Realtor: A Realtor's job is to get top dollar for a home, so you're likely to hear the highest valuation from this real estate professional. Realtors have access to MLS® statistics that aren't available to the public: they know how long homes are taking to sell in your neighbourhood and how sold prices compare to asking prices. They're also out there all the time, looking at properties, meeting the people at open houses and talking to other Realtors. With all that information, they'll arrive at the highest price they think they'll be able to get, considering comparable properties in your area and current market conditions.

$$$

You: You love this place. You've got it fixed up the way you like it, and every inch of it has a memory attached. You've been doing your homework, reading Real Estate Weekly and checking out the listings on REW.ca and you have a price in mind that reflects not only what you think you can get, but also what you want to get in order to move to your next home.

$$

The Bank: Lenders do not want an exaggerated value attached to a home because they might end up wearing it. They want a conservative valuation so if the people who buy your home fail to pay their mortgage, the lenders will be able to get their money back. When an offer is accepted, in most cases the lenders send out an appraiser to look at the home and determine if it's worth what the buyer and seller have agreed on. If the appraiser thinks it's worth considerably less, the buyer has to look for other supporting financing, or the financing can fall through altogether. It can be hugely inconvenient if you're the seller, and devastating if you're the buyer.

$

BC Assessment: Here's the starting point. The most conservative valuation of your home comes from this self-supporting Crown Corporation. BC Assessment is in charge of attaching a dollar value to all of the 2 million properties in private hands throughout BC. It does this so that each municipality and taxing authority can collect property taxes based on a provincewide assessment standard.

This doesn't mean that someone from BC Assessment will visit your home every year. While it has appraisers, it doesn't have nearly enough for that. BC Assessment has a vast data bank which includes information from municipalities, the provincial government, the real estate boards and others.

Your property assessment is set on July 1 of the previous year and based on dozens of factors including:

• finished area
• age
• lot size
• number of bedrooms and bathrooms
• condition and quality
• layout
• sundecks and patios
• outbuildings like sheds and garages
• views
• traffic and noise
• schools
• neighbourhood amenities

BC Assessment analyzes home sales in bulk to establish market value for properties with similar attributes in similar neighbourhoods. Basically, it looks at the same things you do when you're house hunting: "Well this one's nice inside but it's too close to all that traffic on Main Boulevard. The other one's a bit smaller, but it's on a quieter street and it's got a finished basement."

Most assessments go up because of changes in the overall real estate market. If your neighbourhood suddenly became hot last year and homes were selling for far more than they did the year before, you'll see it in your assessment this year.

When there are extreme market changes, the government has even stepped in to cap the assessment. It did so in 2009 when prices in some places fell by over $100,000 from 2008 highs.

Your assessment could also go up because of something you did, e.g., took out a building permit for an addition or substantial updating. By changing the size or the effective age of your house, you've made it more valuable.

So What Is My Home Worth?

You can see how your assessment compares to that of other similar homes using BC Assessment's e-valueBC tool. Keep in mind, though that the values shown are for July of last year.

You can talk to a Realtor, or several. They know the local market inside out. Realtors often have their own methods for determining the market value of a home, and you could get several answers, all within the same ballpark. What the home actually lists for could be different again, depending on the Realtor's selling strategy. For instance, in a seller's market the list price could be lower than those of comparable homes, in hopes of inciting a bidding war.

If you want a detailed, current valuation, you can access the same data that lenders and real estate professionals use. Landcor Data Corporation's Property Valuator report costs $29.95, and along with a current market value, you get a history of the property, assessment data, neighbourhood market trends and much more. Landcor uses the BC Assessment database and other sources and analyzes the mountain of data using its own proprietary methods. 

Ask your neighbours, friends and relatives. What the heck? This is the Lower Mainland real estate market. Apart from the weather, house prices are practically all we talk about, right? Can't hurt to see which way the wind is blowing.

Source: Rew.ca

REW.ca

The simple act of cleaning and decluttering before putting your home on the market can add thousands to your selling price, according to the HomeGain 2012 National Home Improvement Survey. Besides showing your home as a more spacious, blank canvas for the next homeowners, a big purge means that when it's time to move, it'll be easier and cost you less.

When faced with rooms full of amassed bric-a-brac and basements and storage lockers bulging at the seams, it's easy to feel overwhelmed. Where do you start? And how will you get rid of it all? We turned to two local professional organizers for advice.

Start the decluttering process at least a month in advance — longer if you have a large home or have been living there for a long time, recommends professional organizer and image consultant Rowena List, owner of Getting It Together. "Give yourself enough time. Most people underestimate how long it will take to declutter a home."

Limor Friedman, professional organizer and owner of Vancouver In The Box, advises spending at least a couple of hours per day in the month leading up to the open house sorting and getting rid of stuff — starting with the easiest jobs first.

"Before digging into the crawl space where you store old memories and photos, start with the present — with the stuff that you see every day and are less attached to," says Friedman, pointing to items like chipped dish sets, old clothing, and children's  toys. "After the first 'sort and purge,' you will feel so much better. Then you will be ready to tackle the past — the old items you have left in the basement or the attic."

Once you've decided where you'll start, it's time to get ruthless. List suggests that you arm yourself with plenty of heavy-duty black garbage bags, then designate sorting areas: donate, sell or consignment, and toss.

Things like broken and rusty appliances or torn or stained clothing headed for the trash pile are the easiest to determine. Deciding what to keep versus what to donate, sell, or even recycle can be tougher.  

Evaluate each item and ask yourself what purpose it serves. Is it irreplaceable? When was the last time you used it?

"What are the chances that your next new printer will come without a cable?" says Friedman. "Recycle the old cables you held on to for years."

Remember the end goal.

"Only keep what you need, use, and love," says List, noting that people tend to use only 20% of their things 80% of the time. "Most people live in fear of 'what if I need it?'" I support my clients in living with a faith-based mentality: believing that what they have is what they need... once we do the sorting."

Once you’ve determined what to lose, start offloading your cast-offs before you lose momentum. Here are some resources to help you along your clutter-busting journey:

Toss/Recycle/Donate It

Things like expired medication, batteries, antifreeze, or broken appliances have to be disposed at the appropriate depots. Find out what goes where here:

Metro Vancouver Recycles: Select a material type and enter your postal code for a list of depots, charitable locations, and consignment stores near you. Or download their free mobile app.

GVRD’s “101 Things to Do With All Your Old Stuff” : Read this PDF for tips on selling, recycling, and donating.

Freecycle.org: Join people around the world getting rid of stuff on this grassroots community page.

There's no shortage of charities to which you can donate clothing, household goods, and small appliances. Some of them, such as Big Brothers and the Canadian Diabetes Association offer free home pickup. 

Here are some local links too:

Fraser Valley

• FVRD Garbage and Recycling Facilities and Services
• Fraser Valley Metal Exchange: Recycle various metal materials — and get paid for them — here.
• Encorp Return-It: Recycle electronics, beverage containers, and milk cartons at these Fraser Valley depots.
• ShredMasters ValleyRecycling
• Big Brothers/Big Sisters of the Fraser Valley

Abbotsford

• Abbotsford/Mission Recycling Depot
• Abbotsford Community Services Recycling Program
• City of Chilliwack: Find out about everything from curbside collection schedules to where to dispose of hazardous waste. Also see where to recycle tricky items such as x-rays and fluorescent light bulbs here. 
• Village of Harrison Hot Springs: Download waste removal info sheets and recycling guidelines here.
• District of Hope Garbage and Recycling Information

Langley

• Township of Langley: Learn all about garbage, green can, and recycling in Langley here.

North Shore

• North Shore Recycling Program: North Shore recycling and composting programs plus a North Shore-specific recycling directory

Sea-to-Sky

• Whistler Recycling: Find recycling depots in Whistler, including hazardous materials disposal, here.
• Encorp Whistler Re-Use It Centre
• Squamish Climate Action Network
• Squamish Garbage and Recyling

Surrey

• Surrey Reuses Recyclopedia: Find out where to recycle everything from asphalt to yard trimmings.
• City of Surrey recycling guidelines
• Product Care: Search for a depot near you that recycles hazardous materials. 

Vancouver

• Vancouver Reuses Recyclopedia: Find out where to recycle everything from art supplies to yard trimmings.

Sell or Swap It

It doesn’t cost anything to create listings on classified sites like Craigslist and Kijiji. And as long as you take a good photo and price your item in line with similar items, you can offload large pieces of furniture in less than a week. Free items can go really fast. Bonus: you won't have to haul it away. Also check out:  

Secondhand Savvy: Search freelance writer and mindful-consumption advocate Jo-Anne Lauzer's blog for local rummage/thrift sales, auctions, flea markets and antique shows.

Outsource It

Fed up with pre-sale decluttering and junk removal? Enlist the help of a pro here:

• Professional Organizers in Canada
• Junk-Removal.ca
• BC Dumpster Rentals
• Fraser Valley junk removal services
• Sea-to-Sky Junk Services

Resist the temptation to do your sorting and purging on the other end. “Do it all before you move,” says List. “You will feel less stress and have more energy, time, and money.”

National residential property prices in the United States increased slightly in the three months to the end of April but analysts expect them to increase further by 1.2% over the rest of 2012.

The latest figures from Clear Capital shows that all regions except the Midwest saw mild quarterly price gains. The West, South and Northeast saw both quarterly and yearly price gains and the only area with price declines was the Midwest, but that area's declines were less severe when compared to April's report.

‘Markets have continued to show signs of bottoming out. The projections we made at the beginning of the year are playing out and we expect to see the nation gain just over 1% through the year's end,’ said Alex Villacorta, director of research and analytics at Clear Capital.

‘Home prices continue to show relative strength in April with virtually no change over the short term and tapering losses over the longer term. There has been quite a bit of buzz in the housing industry surrounding turning REOs into rentals. Our data suggests early activity from these programmes could be starting to take effect, with national REO only home price gains on a price per square foot basis vastly outpacing fair market prices on a national level,’ he explained.

‘Should investor interest continue to drive the expansion of REO to rental programmes over the next several months, there could be a significant impact on the market overall in terms of providing a rising floor to home values,’ he added.

Quarter on quarter results were notable only in how little change was seen this month, with numbers very similar with the price changes reported last month.

The nation lost a little ground with quarterly losses of 0.2%, showing continuing price stability over previous months' reports.

For the past five months, price movement at the regional level has settled in under 1% on a quarterly basis except in the Midwest, which the firm said is a level of stability not seen for a decade.

As the West, Northeast, and South are all in positive territory, significant losses in the Midwest are pulling down national numbers. The Midwest lost 2.7% of its value over the quarter, which is the fifth month of declines for this beleaguered region. Despite mild winter weather and an early spring, it wasn’t enough to kick off a home buying season in this region.

Looking at yearly results, prices are down 1% compared to last year, which is an improvement over the -1.4% loss posted in April’s Market Report.

The Northeast, a market that has held up well throughout the housing crisis, posted a light 0.7% increase in prices year on year, while the rest of the regions are still trying to climb back into positive territory.

The West and South, while still negative for the year, also saw improvements over last month’s report, shrinking their annual losses by 1.4% and 0.3% respectively.

Midwest year on year performance paints a very different picture, a loss of 4%, which is deeper than last month’s yearly loss of 3.8%.

The Phoenix market, hard hit in the housing meltdown, is starting to sizzle with quarterly values increasing 3.8% more than the next highest MSA. Phoenix also tops the Highest Performing 15 list for the second month and has been either leading or in second spot on this list since February. However, with peak to current values at -58.2%, there is still a long way to go for Phoenix to see the values it once had.

The Milwaukee MSA is the hardest hit market in April with a dramatic quarterly loss of 12.5%. This loss is 5% more than the second hardest hit MSA, Columbus, Ohio, which posted a loss of 7.5%.

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

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Professionally renovated homes open to public

The Greater Vancouver Home Builders’ Association (GVHBA) invites the public to tour eight professionally renovated homes in Burnaby, North Vancouver, Surrey and Vancouver on Sunday, June 10 from 10 a.m. to 4 p.m.

The 19th annual Parade of Renovated Homes, produced by the GVHBA Renovation Council and sponsored by FortisBC, showcases leading-edge design, advanced construction techniques and products, and energy-saving features.

"FortisBC is extremely excited to again be the presenting sponsor of this popular consumer event. We look forward to combining the strengths of GVHBA and FortisBC to help the renovation industry in Metro Vancouver achieve innovative and successful results when it comes to their projects and energy requirements," said Dan Noel, FortisBC regional energy solutions manager.

Renovations on display include the revitalization of a 1950s bungalow, restoration of a 1920s Vancouver heritage home, eco-chic kitchen, bathroom makeover, conversion of a Westside basement suite, an extensive interior and exterior renovation, and a contemporary whole-house transformation.
 
GVHBA President and CEO Peter Simpson said Metro Vancouver homeowners will spend $3.8 billion sprucing up their homes this year, and this popular one-day event offers exceptional sample renovations.

“Professional RenoMark renovators, many of them award winners, will be on site to offer expert advice and discuss their craftsmanship.  Project values range from $135,000 to more than $800,000, offering homeowners an abundance of ideas they can incorporate into their own renovations,” said Simpson.

Admission is by passport, available at each home for $10 per person. Children 17 and under are free. Passports can be purchased at any home, and then used for entry to the remaining homes. Part proceeds from passport sales will help fund the purchase of tools, building materials and safety gear for a carpentry training program offered by Guildford Park and Frank Hurt secondary schools in Surrey.

The event is limited to six hours, so visit www.gvhba.org to review the full list of participating homes, including project descriptions and before-and-after photos, then plan your route to ensure you have sufficient time to visit specific homes that capture your interest. 

Home locations and renovator contact, listed by municipality (Note: as these are private residences, please respect their privacy.  Homes are only open on Sunday, June 10) :

BURNABY

4778 HARKEN DRIVE
The original poorly laid out kitchen had the sink window staring at the neighbour's roof, and a sunken TV room was under-utilized. The RJR design team creatively reconfigured the entire area so it is now both well designed and functional. The sunken floor was raised and the kitchen was relocated to capture the private backyard view. Walls enclosing a formal dining room were removed, opening up the space. Beautiful shaker-style cabinetry and spectacular granite incorporate two extremely different types and styles, yet complement each other in a unique way. New skylights bring in warm natural light.
RJR Construction Management Ltd., (604) 254-1760, www.rjrrenovator.com

4382 SOUTHWOOD STREET
This kitchen-dining room renovation is the second phase of a three-phase renovation plan of the contractor’s own home. Contemporary styling elevates this typical 1959 bungalow, while the period’s design characteristics were retained and restored.  Floor-to-ceiling windows, large doors and a spacious open plan capture the spectacular south-slope view.  This phased renovation also features a huge deck, tasteful landscaping and a grade-level patio with a serene water feature, perfect for outdoor entertaining. Visual preview of the third phase of the renovation will be on display.
TQ Construction Ltd., (604) 430-9900, www.tqconstruction.ca

NORTH VANCOUVER

4366 CANTERBURY CRESCENT
This 1954 rancher needed to be modernized to accommodate the client’s lifestyle and design sensibilities.  The homeowners’ love of mid-century modern architecture and style was the compass. The interior was opened up to create contemporary social spaces for family and friends. Initially, the plan was to only renovate the interior, but the homeowners decided to landscape the property as well, including an outdoor living room with gas firepit. Front retaining walls replaced aging stone walls.  A kidney-shaped pool was filled in to create three separate outdoor living spaces. The kitchen/BBQ area is sheltered by a cedar pergola with a smoked glass roof.
CCI Renovations, (604) 980-8384, www.ccirenos.com

SURREY

12166 - 57 AVENUE
This stately home has been restored to its former grandeur with an extensive interior and exterior renovation.  At the heart of this home is a kitchen that would delight any gourmet chef with professional appliances and wine buffet.  The dining room opens onto an enclosed lanai which, in turn, opens onto an expansive outdoor area for informal entertaining.  The home features a luxuriously appointed master suite with marble steam shower, free-standing tub and crystal chandeliers.  Exquisite detailing abounds in the coffered ceilings and four uniquely finished fireplaces.
My House Design / Build Team Ltd., (604) 694-6873, www.myhousedesignbuild.com

VANCOUVER

2148 GRAVELY STREET
This 1908 family home makes a stunning entrance into the 21st century with an eco-chic dream kitchen and bathroom renovation. Naturally crafted white-shaker custom kitchen cabinets, pantry and island are framed with complementary mouldings.  Corner-drawer cabinets and recycling centre complete the details.  Bath cabinets extend the length of the room providing ample storage space.  Cabinetry is made from eco-friendly maple plywood and solid alder with low-VOC paint and durable lacquer finish for easy cleaning. There are also Douglas fir floors and a Tuscan dining table built from wood reclaimed from a Penticton high school.
Eco Country Tables Inc., (604) 809-4125, www.ecocountrytables.com

4785 WEST 2 AVENUE
Designed by a prestigious Vancouver-based architectural firm, the house was originally built in 1932. Having never undergone any upgrades, the home’s plumbing, electrical and mechanical systems had to be upgraded, the roof replaced and the extensive water damage fixed.  The owners’ vision and appreciation of the home’s heritage was incorporated into this whole-home renovation, as much of the original house as possible was rescued.  As a result, the renovation created an updated open living space for a modern family, while respecting this beautiful home’s heritage. 
G. Wilson Construction Co. Ltd., (604) 873-8013, www.gwilsonconstruction.com

2982 WEST 27 AVENUE
These clients wanted to convert their typical Westside basement (damp with a low ceiling) into a well-appointed rental suite for investment purposes. The foundation was lowered by two feet then the space was completely modernized with up-to-date engineering and insulation. The totally transformed suite is now beautifully appointed with granite countertops, hardwood floors, stainless-steel appliances and tile finishes. To add extra comfort to the basement suite, in-floor and ceiling radiant heating were added.  Nearing completion is a backyard laneway home that is open for viewing.
Kemp Construction Management Ltd., (604) 948-1124, www.kempconstruction.ca

4930 WALDEN STREET
This home was completely transformed to allow for an open-concept main floor. The home was updated in a funky contemporary style, including a larger kitchen that offers seating for six at the island. The dining room and living room were opened up to the kitchen, which provides a great ambiance for entertaining. A floating glass partition offers privacy to the powder room.  The upper floor consists of a reconfigured master ensuite complete with a large walk-in shower, floating vanity with an eight-inch-deep countertop and a makeup counter. The kids’ bathroom was redone with vivid accents to create a more playful feel. My House Design / Build Team Ltd., (604) 694-6873, www.myhousedesignbuild.com

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Source: Globe and Mail

One thing I often say to clients and readers of my website is that the next decade for real estate prices in Canada will look nothing like the past. There are three main reasons for this:

1) The capacity for house prices to outpace income growth by two to three times in most Canadian cities, as they have over the past decade, simply will not be possible as interest rates will eventually begin to rise.

2) The past decade saw a loosening in credit requirements, but in 2009 things began to change. The availability and cost of mortgage credit has been a fundamental driver of the current housing boom, and recent trends toward stricter mortgage underwriting strongly suggest that credit conditions will tighten in the coming years.

3) Demographics. This one’s potentially a big one, and is what I want to discuss today.

In August, 2010, The Bank for International Settlements (BIS) wrote a great report on the impact of an aging population on asset prices. It noted the following:

The paper identifies the impact of aging through the analysis of house prices. It finds that demographic factors contributed positively to real house prices in many countries in recent decades. For instance, the United States is estimated to have enjoyed around 80 basis points per annum demographic tailwinds in the past forty years compared to neutral demographics.

The author calculated that demographic factors have led to a real house price increase of roughly 20 per cent over the past 40 years in Canada. That is, there has been a 0.5 per cent per annum tailwind driving real (inflation-adjusted) house prices. This paper notes the following:

Looking ahead, forecasts … uniformly point towards substantial demographic headwinds.

…The young save for old age by buying assets, while the old sell assets to finance retirement. This asset transfer can happen directly or through institutions such as pension funds. In this setting, the change in the relative size of asset buyers (the young) and sellers (the old), have consequences for asset prices. In particular, the asset purchases of a large working age generation, such as the baby boomers...drives asset prices up. Conversely, if the economy is aging, i.e. the subsequent younger generation is relatively smaller, then asset prices decline.

Now for the bad news: The author calculates that demographics alone will have a 1 per cent annual drag on house prices in Canada into the foreseeable future.

To understand this imbalance, it’s important to understand when age groups become net buyers and net sellers of real estate. This topic was explored in an interesting paper in the Journal of the American Planning Association. It concluded that groups of people become net sellers of real estate after the age of 65, while net buying of real estate is most pronounced between the ages of 25 and 35. If those findings apply to Canadians, we can easily see the problem by simply looking at the age distribution of the Canadian population:

Granted this does not consider the offsetting influence of net immigration, but it’s easy to see how that paper came to the following conclusion:

What have not been recognized to date are the grave impacts of the growing age imbalance in the housing market. If the elderly are more often home sellers, and are more numerous than the young who are buyers, a market shift could come on quickly after 2010, causing housing prices to fall. Even if prices remain flat, without the investment incentive young households will likely slow their entry into homeownership, worsening the imbalance between sellers and buyers.

This poses a particular problem for the Canadian housing market when we consider how many near-retirees are planning on using home equity to at least partially fund their retirement. A 2011 RBC survey estimated that number at 56 per cent. What this does not tell us is what percentage plan on accessing that equity through a reverse mortgage or HELOC and how many plan on accessing it by selling and downsizing or possibly renting. That remains up for speculation. Nevertheless, we can certainly assume that downsizing is in the plans of a significant portion of these households.

This leads me to a few conclusions:

1) It certainly seems reasonable to assume that downsizing will put pressure on the higher end of the market as empty nesters sell their larger homes to downsize into smaller, more age-friendly homes. Current demographic trends suggest that the demand for these large homes is unlikely to persist at current levels. In 1975, the average single family home in Canada was 1050 square feet. In 2010, the average new home being built was nearly 2000 square feet. Yet over that same time, the average household size has fallen by a third. This is a trend that simply will not persist indefinitely and I suspect these larger homes will fall out of favour over the coming years, unfortunately just as many try to capture their equity gains and downsize.

2) The flip side of the first conclusion is that smaller, age-friendly homes (including condos in areas where new construction is not rampant) will see a relative floor put under them. The end result is price compression in the market whereby the larger, more expensive homes fall in price to a greater degree (or as a best case scenario, appreciate more slowly) than smaller, age friendly homes .

The implications are clear: If you are counting on current home equity to at least partially fund your retirement and are hanging on for that last bit of capital gain before selling, you are playing a dangerous game.

Analyst and strategist Mr. Rabidoux covers Canadian macro economic trends with a focus on housing and consumer credit. He also has a website, TheEconomicAnalyst.com.

Source: Globe and Mail

REW.ca, May 16, 2012

Okay, it looks like the big crazy boom in Vancouver house prices is over for now. A flat market or a drop in prices could well be on the way, to the relief of everyone except west siders who haven't cashed out yet. 

So what happens now? It's funny how different stats can tell different stories.

A May 15 article in the Globe and Mail is a good snapshot of the Vancouver real estate market as it teeters on the brink of... something. Great headline too: "Vancouver's Real Estate Swoon Deepens."

But the graph accompanying the Globe and Mail article totally loses us when it compares the percentage change in average Toronto and Vancouver home prices over the last year. 

Greater Vancouver includes several of the most desired and expensive neighbourhoods in Canada. The sheer volume of luxury home sales skews the average price unrealistically.

RE/MAX just released its report on luxury home sales across Canada. After 2011's unprecedented luxury-home feeding frenzy in Greater Vancouver, first-quarter sales this year dropped by 31 per cent (but they're still twice as high as they were in 2010).

Knock out 180 sales ranging from $2 million to $20 million and you're going to see the effect in the average price. That's why this Globe and Mail graph takes such a dive.

First reaction: Yikes. Run for your lives!

Compare that to the graph below that shows the percentage change in MLS® benchmark prices. These are changes in sold price for homes that are typical of their type for the area.

Benchmark prices don't reflect sales of ultra-expensive homes -- except in neighbourhoods where those are the norm -- so they give a better idea of the trajectory of house prices throughout a region.

Like the Globe and Mail graph, this one shows the change over the last year in Vancouver, Toronto and all of Canada.

That much calmer look at the real estate market still illustrates the huge gap between stratospheric Vancouver house prices and those of the runner- up for the title of Most Expensive City in Canada. Nobody's denying that our prices are ridiculous. But comparing the two charts also shows how the same facts can send confusing messages.

If you're buying or selling, talk to a Realtor who knows your area well. Someone with experience in your neighbourhood will be watching the changing situation daily, and will know mood of your particular market. What's selling and what's not? How long are properties staying on the market? What are potential buyers after? How close are sales prices to asking?

Those hyperlocal stats are more important to your goals than general averages and benchmarks.

Source: REW.ca

The following article is from Canadian Real Estate Wealth Magazine.

Ask any landlord, contractor, builder or small real estate investor the one tool they have in their DIY renovation arsenal, and the answer is invariably the spreadsheet. Most property owners with some years of experience behind them have crafted a list of must-do projects as they inspect their latest investments. The spreadsheet, making up years of gained knowledge on a variety of projects, is the key to that successful renovation.

Peel back the spreadsheet onion and investors reveal the projects that are essential in making the most amount of profit for, what they hope is, the least amount of cost. Especially in a volatile economic climate with the fear of a double-dip recession, property investors and landlords are taking it upon themselves and "DIYing" their projects to ensure they are attracting the best tenants and/or buyers for their properties.

DIYing and the economy
Owners and landlords are enhancing the value of their properties on their own more than ever before. Cost is always the number one factor and certainly the economy has heightened the need to cut expenses as much as possible.

Even though uncertainty in the economy can create buying opportunities for investors, would-be investors need to be aware of the pitfalls those investments might bring. “Economic times have increased the availability of some projects,” says Andrew Brennan, a professional real estate investor with Brennan Property Investments. “A lot of people who are behind on mortgage payments may not have the money to maintain their more distressed issues,” he adds.

There is a flipside to the economic story other than the availability of potential projects. Landlords, because of uncertainty, are looking to save money.

Stuart Henderson is a property owner and a senior member of the Ontario Landlords Association. The association has more than 3,000 members, most of whom own properties of 10 units or less. He says members are looking for assistance on DIY renovations more than they have in the recent past.

“The economy has not been strong since 2008, so more and more landlords who would have normally paid a contractor are now forced to do their own repairs and renovations,” he says. “Doing your own repairs and renovations is really a key point of landlords these days; the days of slumlords are over if you want to get good, qualified tenants.”

Plan and budget
Getting the appropriate high-quality tenants is really what is behind the renovations in the first place. Essentially, it should be the first part of any DIY renovation plan. “The first thing you need to do is know the expectations of the tenants you are marketing to. You can’t go into a low-income area in parts of Toronto and renovate that to the same standards that would be required for a $1,500 one-bedroom apartment downtown. You need to know what your tenants want,” says Andrew Gulaty, a full-time firefighter and owner of properties in Toronto and Mississauga. He notes that new landlords must realize the goal of a renovation on a rental is not the same goal one might have on their personal residence.

“When you are renovating a rental, your goal is to maximize return on investment and to attract quality tenants. Your personal tastes are not as important; the goals are different,” he stresses. He adds that most new landlords’ biggest mistake is overrenovating. “Granite and stainless steel in a poor-quality neighbourhood is not going to attract top-quality tenants.”

Most investors agree that fixing problem areas first and then getting into the cosmetics is the way to go on DIY projects and makes good planning sense. Scott McGillivray, a property investor and the host of Income Property on HGTV Canada, prepares a relatively systematic way of looking at projects.

“When I see a property that has opportunity, the checklist would be to fix everything that’s a deficiency on the home, i.e. roof, wiring, plumbing,” Mr. McGillivray says.

And with most renovations, either for personal or income purposes, the kitchens and bathrooms appear to be first on everyone’s list.

“The kitchen is of No. 1 importance,” adds Mr. McGillivray. “I have a sublist of how much work needs to be done in the kitchen.

The bathrooms are the next on the list and, again, a checklist is created. Then I look at all the hardware in the house, which I know is really easy. And then I look at how significant the flooring is in terms of needed work.”

Seasoned pros like Mr. McGillivray and Mr. Gulaty often determine their budgets before they even buy a property. Says Mr. Gulaty, “I already have a rough idea as to how much it will cost me to upgrade the unit and how much extra rent I can get through the upgrade.”

Mr. Brennan says his renovations move much more efficiently with a master list of potential items. “I’ve created a master list of 95 per cent of the things you may need as far as supplies for a renovation, from screws to flooring to faucets. It’s much easier if I have a process, if I already have a very good indication of all the items I may need and

I have a good understanding of what the prices are.”

And for the more junior or novice investors, Mr. Brennan says it’s easy enough to walk into any hardware store and familiarize oneself with costs.

Similarly, there is an abundance of resources online by searching "contractors’ costs," which will garner a wealth of information on costs per square footage or per item on a variety of home renovation projects.

Where to start?
Whether you are a landlord who rents or are looking to flip a house, you will likely start your renovations in the kitchens and bathrooms. However, the methodology behind the renovations may be as varied as the projects themselves.

For example, Mr. Henderson has a philosophy by which properties should be renovated to attract the best tenants. He suggests three things to enhance the property, in whatever part of the house/unit it may be. His philosophy looks at the ideas of "space,:" "personalizing the property" and "cleanliness."

Space, he says, can come in the form of an open kitchen and living room, as is the trend among homebuyers these days. “The open concept can be done, but you don’t have to be highly skilled to do it,” notes Mr. Henderson. “In my experience the cost of putting in an open concept kitchen in order to attract a good tenant is worth it.”

In order to personalize, he says items like a new tub or toilet allow tenants to feel the property is theirs and not a property that has been rented out hundreds of times for the past number of years. “We could totally redo the bathroom but these cost-effective tips are the way to go if you are on a budget,” adds Mr. Henderson. In terms of cleanliness, Mr. Henderson says changing old carpets between tenants diminishes the potential for allergies, health problems, and shows sensitivity to people’s health concerns.

Mr. Gulaty agrees that kitchens and bathrooms are the place to start and says tenants often do not have much by way of imagination.

“Even if they see a kitchen and bathroom, if the rest of the place is not in good repair it’s still going to be a hard sell,” he says. “What I often do is if I am working on a unit and it doesn’t show well I will take [the tenants] up to a completed unit to show them this is what it will look like when it’s finished.”

There are also differences between the work done on a single-family home versus a multi-family unit, Mr. Brennan notes. For example, appliances for a single family unit might be purchased new for top rent. But, adds Mr. Brennan, a multi-family residence might get used appliances. Also, a nicer faucet would be added to a single-family.

Part of that planning, according to Mr. Brennan, is knowing well in advance what you may need for repairs or renovations. To a small investor every penny counts, and he says knowing projects ahead of time will allow investors to seek out sales and promotions on the products they need ahead of the renovation stage.

Another piece of advice for investors includes knowing your limits and ensuring you don’t pick the most difficult project around, says Mr. McGillivray. “I could give you every checklist and every piece of information about being a real estate investor. But you’ll never actually understand something until you try it. Don’t jump into something that is overwhelming.” He adds that picking projects within one’s comfort zone will allow them to do many renovations themselves and save costs.

“Even if you’re not that skilled at physically doing things, act as the project manager so you at least learn from hiring out the trades,” he says.

Challenges

Nothing in the DIY world should be taken for granted and even though costs can be saved and value can be added to projects, novice investors may find themselves trapped by some of the pitfalls of renovation.

1. Be realistic about timelines
Mr. McGillivray says investors should make sure they can afford to carry the property for 25 per cent longer than originally anticipated as timelines always become an issue. Mr. Brennan agrees and says, “It’s guaranteed that something will come up you didn’t plan for both dollar-wise and time-wise.” He adds that investors should try not to add anything during the project, should not procrastinate, and should try to do the challenging projects first and compromise later if needed.

2. Walk before you run
Again, Mr. McGillivray says novices should tackle projects they can deal with. For example, if an investor already owns a home, try putting an income suite in the house first to get a feel for the challenges of being a landlord.

3. Understand local rules, regulations and legislation
Mr. Gulaty says for Ontario landlords, issues such as not being able to collect security deposits, the inability to evict bad tenants in a timely manner and the fact that tenants can qualify if their income matches the rent (even though other expenses are not accounted for) all play havoc with the landlord experience. Mr. McGillivray also adds that checking with the city you are operating in and understanding the local bylaws on building apartments within houses or subdividing properties should be first and foremost in investors’ minds.

4. Play safe
“If you’re under pressure and you’re stressed and your time frame is quickly slipping away from you, sometimes you rush and you may get hurt,” notes Mr. Brennan. And besides your own safety on the job, the safety of the investment and your tenants should be ensured as well. Says Mr. McGillivray: “Above everything than just the cosmetics is the safety of the house. Typically you need a proper inspector or home inspection done to determine if the roof needs to be replaced, if anything needs to be rewired, if there is a plumbing issue or structural issue. Those things take precedence over any cosmetic renovations.”

5. Know when to ask for help
“I’ve learned a lot, even if it’s from a guy at the hardware store,” quips Mr. Brennan.

He says don’t be embarrassed to say “I don’t know.” Take money out of the budget, if necessary, and ensure the project is done right.

Reflecting the clientele
With all the planning, budgeting, avoided pitfalls and lists of materials, the investor interested in “DIYing” their projects must not forget the most important part of the equation – the tenant. “It’s all about imagining what the good tenant wants and doing it in a cost effective manner,” stresses Mr. Henderson. All the work in the world will not attract the right tenants and provide the income being sought if the renovations lack purpose. “Your renovations have to reflect your clientele. And then you can give slightly more to give you an advantage [over your competition],” says Mr. Gulaty. With that information in hand, DIY landlords can plan their projects with direction in order to save money, enhance value and participate in the renovation game in a meaningful and profitable way.

From Canadian Real Estate Wealth Magazine – the only monthly newsstand publication dedicated to individuals and businesses 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 alike.

Home sale and listing activity has maintained a consistent pace on the Multiple Listing Service® (MLS®) in Greater Vancouver in recent months, which has helped create balanced conditions for the region’s housing market.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,799 on the Multiple Listing Service® (MLS®) in April 2012. This represents a 13.2 per cent decline compared to the 3,225 sales recorded in April 2011 and a decline of 2.6 per cent compared to the 2,874 sales in March 2012.

April sales were the lowest total for the month in the region since 2001 and 16.9 per cent below the 10-year April sales average of 3,369.

“Although April sales were below what’s typical for the month, we continue to see, with a sales-to-active listing ratio of nearly 17 per cent, a balanced relationship between buyer demand and seller supply in our marketplace,” Eugen Klein, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 6,056 in April 2012. This represents a 3.6 per cent increase compared to both March 2012 when 5,843 homes were listed and April 2011 when 5,847 homes were listed for sale on the region’s MLS®.

Last month’s new listing total was 6.7 per cent above the 10-year average for listings in Greater Vancouver for April.

At 16,538, the total number of homes listed for sale on the region’s MLS® increased 8.5 per cent in April compared to last month and increased 16 per cent from this time last year.

“Recent activity has had a stabilizing effect on home prices at the regional level, although pricing can vary depending on area and property type,” Klein said “To best understand conditions within your area of interest, it’s important to do your homework and consult a local REALTOR®.”

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $683,800, up 3.7 per cent compared to April 2011 and an increase of 2.8 per cent over the last three months. The benchmark price for all residential properties in the Lower Mainland is $612,000, which is a 3.4 per cent increase compared to April 2011 and a 2.6 per cent increase compared to three months ago.

Sales of detached properties on the MLS® in April 2012 reached 1,126, a decline of 19.7 per cent from the 1,402 detached sales recorded in April 2011, and a 17.8 per cent decrease from the 1,370 units sold in April 2010. The benchmark price for detached properties increased 6.3 per cent from April 2011 to $1,064,800.

Sales of apartment properties reached 1,190 in April 2012, a decline of 0.9 per cent compared to the 1,201 sales in April 2011, and a decrease of 22 per cent compared to the 1,526 sales in April 2010.The benchmark price of an apartment property increased 1.1 per cent from April 2011 to $375,900.

Townhome property sales in April 2012 totalled 483, a decline of 22.3 per cent compared to the 622 sales in April 2011, and a 21.6 per cent decrease from the 616 townhome properties sold in April 2010. The benchmark price of a townhome unit increased 1.7 per cent between April 2011 and 2012 to $487,300.

Source: Real Estate Board of Greater Vancouver

copyricopyright© real estate board of greater vancouver. all rights reserved.ght© real estate board of greater vancouver. all rights reserved.

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

Mortgage Features: More than the Best Mortgage Rate

By Matthew Chan, CA MBA AMP

Getting the best mortgage rate doesn't necessarily mean you're getting the best mortgage. A no-frills mortgage with a rock-bottom mortgage rate may have the lowest interest rate, but it could cost you in the end.

And lenders like to upsell you to a mortgage with more features, but they've always been very cagey about telling you what those mortgage features mean in terms of dollars and cents. As of November 5, 2012, federally regulated financial institutions in Canada are going to have to be absolutely clear in explaining what it will cost to get a mortgage you can pay off faster.

Meanwhile, let's take a look at mortgage features that might -- or might not -- match your needs.

Every lender creates different packages and uses different names for these mortgage features. An independent mortgage broker will thoroughly analyze your needs and help you find the best mortgage, not just the best mortgage rate.

Matthew Chan has been a licensed mortgage broker since 2004 and served on the Board of Directors for MBABC during 2006 and 2007. Before becoming a mortgage professional, Matt earned a Chartered Accountant designation with a Big Four accounting firm and earned an MBA from the Rotman School of Management at the University of Toronto.

Source: REW.ca

April 27, 2012, REW.ca

In the Greater Vancouver real estate market, the condo is the first step on the equity ladder for most buyers. The current benchmark price is $375,100,  just over one-third of the price of a detached house. And depending on size and location, there are plenty at lower prices.

But that's still a lot of money, so buyers want to be blown away. For developers, the design and feature options they offer can be the difference between instant sellout and the dreaded "unsold inventory." 

These are the hot button features for condos that sold in the last half of 2011. They either sold much faster than average or fetched a higher-than-average asking price according to the Condominium Market Opportunities Report (CMOP), prepared by industry consultants Strategics and MPC Intelligence. Clean and sleek was definitely the preferred look.

High-rise condo buyers salivated over these features:

• Laminate hardwood kitchen flooring
• Viking and Liebherr kitchen appliances
• Quartz kitchen countertops
• Vinyl bathroom flooring
• Glass door bathroom cabinets
• Quartz bathroom countertops.

Low-rise buyers went for these features in a big way:

• Engineered hardwood kitchen flooring
• Stainless steel kitchen appliances
• Bosch , Samsung or Fisher Paykel kitchen appliances
• Glass door kitchen cabinets
• Quartz bathroom countertops
• Glass door bathroom cabinets

Meanwhile, the 2012 TD Canada Trust Condo Poll interviewed people who have recently bought or intend to buy a condo. Vancouver respondents were almost unanimous about the major elements that help them decide to buy a condo they'd looked at:

• Low condo fees (97%)
• Good building security (96%)
• Attractive interior design (95%)
• Energy-efficient building features (93%)
• A balcony (92%)

The TD study found differences between men's and women's condo-shopping preferences. More men than women want a newly constructed condo. Women are more likely than men to look for environmentally friendly features and a balcony.

Single women a force in the condo market

An earlier TD study estimated that single women make up 30 per cent of first-time home buyers, and they overwhelmingly choose condominiums.

According to Mark Belling, of Surrey-based Fifth Avenue Marketing, "Single women are now a power in the local condominium market. They easily outnumber single men." He adds, "Young women seem to become financially mature earlier, with the ability to save for a down payment."

Witness the new HGTV show, Buy Herself, with Realtor Sandra Rinomato guiding single women to a home purchase. Rinomato says that making a smart investment is the primary driver. Women say to her, "Well, you know it's time for me to buy a condo as an investment that I can make money off of, that I can also live in, that I can nest in… I can paint it and decorate it to my taste…  Why not do it?"

Safety, a balcony and entertaining space are important to women, she says. Condos offer greater security, which is a top concern among women living alone. A balcony gives them safe, private outdoor space for chilling out. And a party room or rooftop deck lets them entertain more people if they have a matchbox-sized living space.

Developers are listening. An example is the Meccanica project in False Creek South. Hani Lammam, VP of development for Cressey, talked about it with Business in Vancouver's Strategic Marketing columnist, Judy Bishop.

'Meccanica incorporated feedback from women about design, floor plan and exteriors,' said Lammam. 'We've placed major emphasis on qualities women value.'

The result was functional layouts and stylish design features including polished floors, high-gloss cabinets, closet space, spa bathrooms and high ceilings. And overwhelming response from women.

Location still rules

Location is paramount. A year ago, it was the usual to see lineups of prospective buyers when new projects went on sale. Now, that only happens when the condos are smack up against a transit line and a neighbourhood loaded with amenities. 

An estimated 7,800 new condo units in high rises are expected to become available this year. Prices of both new and MLS® condos are not expected to return to their mid-2011 anytime soon. In a stagnant market, condos with the right mix of design and features, price and location will  find owners.

Source: Rew.ca

Source REW.ca

REW.ca, April 9, 2012

Just relax. Vancouver real estate bubble fears are overblown, and the numbers don't bear them out.

Two top economists told REW.ca the same thing about where the Lower Mainland and Vancouver real estate market is going, and neither of them foresees the kind of sudden, extreme correction many people are worried about (or hoping for).

Cameron Muir (left) is the Chief Economist of the BC Real Estate Association, and the familiar face delivering BCREA's video outlook every month. Warren Jestin (right) is Chief Economist at Scotiabank, where he studies Canadian and global economic issues. Both will be speaking at the Vancouver Real Estate Forum on Wednesday, April 11 at the Vancouver Convention Centre West.

 Muir describes the real estate market as "a constellation of factors that interplay with one another," but he says the age-old demand and supply ratio is the most telling. In real estate that's sales-to-listings, and he says that ratio is currently in balanced territory: in between 15 and 20 per cent. With unit sales below the 10-year average across the region, expect "moderate-average typical demand scenario."

Demand -- distinct market segments

When it comes to demand, Warren Jestin says there are two distinct market segments. The high end, driven by wealthy families, produces eye-popping numbers like the benchmark price of $2,250,100 for single detached houses in Vancouver West.

As Cameron Muir points out, luxury home sales appreciate much faster during good times. Those extremes put upward pressure on average prices by skewing the whole regional price picture, as we saw last year.

(The new MLS® Home Price Index and benchmark prices give a truer picture of typical home prices and trends for each market area, as they're less affected by a few ultra-high-end sales. For instance, the average March price for a detached house in Greater Vancouver was $1,155,521, while the benchmark price was $1,056,400 -- almost a full $100,000 apart.)

The other market segment -- let's call it The Rest of Us -- will buy homes when there's optimism about job security and continued income. That's a much larger market segment.

Strong economic fundamentals for BC

BC is doing well on the job front, says Jestin. Our province has outperformed the national average fairly consistently, and he believes that over the next year BC will outperform Central Canada and the Maritimes and see  employment growth.

In Asia, 20 million new homes are being built, fueling a 2.25 - 2.5 per cent growth in demand for construction-grade lumber. And Asia has a net demand for other resources, including natural gas and oil. BC's position as a gateway to those developing markets will require new infrastructure, creating jobs and economic activity. 

These strong economic fundamentals result in confidence that will drive consumer spending on the biggest item on the household balance sheet: the home.

Interest rates -- low and stable

But how affordable is that home? Greater Vancouver has the highest benchmark prices in Canada and the Fraser Valley is in third place behind Toronto. We've seen numerous affordability studies warning about the high ratio of home price to income.

Muir says those studies leave out one factor in the calculation: interest rates. We're at lifetime lows -- the bottom of a 25-year decline in interest rates -- which means you can borrow more for the same payments.

Neither economist sees interest rates rising sharply. It's true they have nowhere to go but up, but it would take a worldwide economic shock to drive rates steeply upwards, so low interest rates should continue to buoy the market for at least a year.

Jestin sees three- and five-year mortgage rates going up about 0.5 per cent over this year, and a year from now the beginning of a rise in short-term interest rates, which will affect variable mortgages.

He says, "In the purchase decision, that reality has to be there. Now is the time to temper enthusiasm, but not panic.

Multifamily construction takes over

Even with low mortgage rates, single-family detached houses are out of reach for most first-time buyers, particularly in Metro Vancouver. Muir expects to see detached-house prices continue to increase for two reasons: there's no place to build more of them because of our geography, and they're becoming a smaller and smaller proportion of our housing stock. Most of the new ones being built are replacing houses that were torn down.

Construction is moving to condos and away from single-family detached. In fact, condo construction is outpacing household formation in Greater Vancouver, and the growth of condo prices has flattened, with a possible drop in prices predicted.

Now, condos are fulfilling a new role, says Jestin. First-time buyers are starting in condos/townhouses as "the starter house" becomes too expensive to contemplate.

Condos are also becoming the source of rental properties. Investors see them as a good opportunity for cashflow because the rental market is so tight.

No bubble

"Prices are nuts!" "Nobody can afford to get into the market!" "It's all gotta collapse sometime... "

We Lower Mainland locals talk about our real estate market obsessively, and try to make sense of it from anecdotal evidence and a tsunami of unrelated statistics. 

So it's educational to hear from two professionals whose job it is to make sense of statistics and put them in context.

Our market is definitely changing, with multifamily housing growing fast. Our prices are definitely out there, but because of strong demand in particular areas, not rampant speculation. Activity is definitely slower, but in the last couple of years we've seen "a profound run-up."

Warren Jestin admits there's a risk for slower growth and higher interest rates, but doesn't believe there's a bubble about to burst because he doesn't forsee job destruction (as happened in the US housing crisis).

Cameron Muir says, "Prices are very sticky on the way down. If there are no big macro-economic shocks, we're not going to see dramatic changes." 

The state of the local real estate market is the subject of the Vancouver Real Estate Forum on Wednesday, April 11 at the Vancouver Convention Centre West. Warren Jestin will be giving the keynote address and Cameron Muir will be on the panel for "Residential Market: Is this Market Sustainable?"

Source: REW.ca

Tuesday, April 3, 2012

VANCOUVER, BC - Home sales in March trended below the 10-year average in Greater Vancouver while home listing activity outpaced what’s typical for the month.

The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver reached 2,874 on the Multiple Listing Service® (MLS®) in March 2012. This represents a 12.9 per cent increase compared to the 2,545 sales recorded in February 2012, a decline of 29.6 per cent compared to the 4,080 sales in March 2011 and an 8.4 per cent decline compared to the 3,137 home sales in March 2010.

March sales in Greater Vancouver were the second lowest total for the month in the region since 2002 and were 16.8 per cent below the 10-year sales average for the month.

“Home sellers have been more active than buyers the first few months of the year, but we continue to see a relative balance in the total supply of homes for sale and current demand in the marketplace,” Eugen Klein, REBGV president said.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 5,843 in March 2012. This represents a 5.2 per cent increase compared to February when 5,552 homes were listed and a 14 per cent decline compared to March 2011 when 6,797 homes were listed for sale on the region’s MLS®.

Last month’s new listing total was 4.5 per cent above the 10-year average for listings in Greater Vancouver for March.
At 15,236, the total number of residential property listings on the MLS® increased 8.4 per cent in March compared to last month and increased 16 per cent from this time last year.

“The total number of properties for sale in Greater Vancouver has increased each month since December, which means there’s more selection to choose from as we enter what’s traditionally the busiest season of the year in our market,” Klein said.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $679,000, up 5.3 per cent compared to March 2011 and an increase of 1.1 per cent compared to February 2012. The benchmark price for all residential properties in the Lower Mainland is $607,700, an increase of 4.8 per cent compared to March 2011.

Sales of detached properties on the MLS® in March 2012 reached 1,183, a decline of 34.1 per cent from the 1,795 detached sales recorded in March 2011, and an 11.5 per cent decrease from the 1,336 units sold in March 2010. The benchmark price for detached properties increased 9.2 per cent from March 2011 to $1,056,400.

Sales of apartment properties reached 1,191 in March 2012, a decline of 26.6 per cent compared to the 1,622 sales in March 2011, and a decrease of 4.9 per cent compared to the 1,252 sales in March 2010.The benchmark price of an apartment property increased 2.2 per cent from March 2011 to $375,100.

Townhome property sales in March 2012 totalled 500, a decline of 24.6 per cent compared to the 663 sales in March 2011, and an 8.9 per cent decrease from the 549 townhome properties sold in March 2010. The benchmark price of a townhome unit increased 0.9 per cent between March 2011 and 2012 to $480,900.

The Real Estate Board of Greater Vancouver is an association representing more than 11,000 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 contact:
Craig Munn
Assistant Manager, Communication
Real Estate Board of Greater Vancouver
604.730.3146
cmunn@rebgv.org