Canadian Housing Market showing some Groth

Canadian home sales gained for the first time in five months in August, led by Ontario and British Columbia, though economists warned the uptick is likely to prove a blip in a declining trend.
Sales of existing homes through the Multiple Listing System rose 4.1% from July, figures released Wednesday by the Canadian Real Estate Association showed. It was the first increase since March, it said. On a year-over-year basis, sales are down 22.5%.
Canada’s housing market, which helped drag the economy out of recession, has been cooling rapidly over the past few months. Consumers made purchases that would have been made in summer earlier in the year to beat rising interest rates and the introduction of the harmonized sales tax in Ontario and B.C.
“A large part of the August increase comes from Ontario and B.C. because there was a lot of confusion in July as to how the HST would affect home sales,” CREA chief economist Gregory Klump said. “This is a bit of a relief rally and one car does not make a parade.”
Klump still expects housing sales to cool throughout the rest of the year, though he says it’s a healthy slowdown from the feverish levels seen at the end of last year.
TD Bank Financial said in a note the August figures are likely to have been a blip.
The bank said high household debt, the weakening employment outlook and declining personal income would all weigh on the market. It expects sales to drop by 20% next year and prices to decline 7%.
The average price of homes sold in August was $324,928, which is on a par with the same period last year. Excluding Alberta and New Brunswick, where prices eased, gains in every other province exceeded the national increase, CREA said.
Seasonally adjusted sales activity was either flat or increased in half of all markets across the country, it said.
The Organization for Economic Co-operation and Development in a report on Canada earlier this week warned prices may still be too high and more intervention may be needed to cool the market.
CREA president Georges Pahud on Wednesday rebuffed those suggestions, saying any further tightening in mortgage regulations risk damaging the market.
“Rising interest rates and a projected slowdown in job growth mean that the Canadian housing market is expected to continue to cool,” Pahud said. “This is overlooked in recent commentary that suggests further changes to mortgage regulations may be needed.”

-Ottawa Sun Sept 15, 2010

HST Clarifications - What the gov forgot to mention.

After discussing the HST with many of my clients, and other buyers and sellers that I have been encountering, I realized that there are many false views of the HST and its impact on the purchase and sale of homes. So I'd like to take the time to clarify two major things.

1. HST does NOT impact the sale price of a RESALE home. HST only affects the price of new construction homes, or homes that have not had a final occupancy permit.(ie no one has lived in the home yet)

So Buyers don't be scared that the price you see will have an extra 13% tacked on after July 1st.
Do be aware that HST will be charged on other services such as realtor fees and legal fees.

2. The minimum downpayment required was NOT pushed up to 10%. There was talk that that was going to be the case, however the government decided not to impliment that so the downpayment required for home buyers is still only 5%.

They did however change the downpayment required for investment properties to a minimum of %20. Also, don't let that intimidate you too much, as I have some lenders that can look past this new rule and find ways around it.

If you or anyone you know are thinking of buying or selling, please don't hesitate to contact me immediately to get started. I am your one stop shop for real estate needs and I have all of the contacts you will need in your home purchase, lawyers, inspectors, contractors, mortgage specialists, and movers. You name it, I got it. I look forward to helping you find your dream home soon.

HOTTEST APRIL EVER!!!

Members of the Ottawa Real Estate Board sold 1,841 residential properties in April through the Board's Multiple Listing Service® system compared with 1,591 in April 2009, an increase of 15.7 per cent. Of those sales, 425 were in the condominium property class, while 1,416 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties. "Last month's sales blew away the record for April, which is always one of the busiest months of the year for our market," said Board President Pierre de Varennes. "The increased sales activity may be partially due to buyers trying to avoid the impending HST and the mortgage changes that came into effect on April 19, but also demonstrates that consumers feel confident about our local economy," he added.

The average sale price of residential properties, including condominiums, sold in April in the Ottawa area was $332,979, an increase of 11.6 per cent over April 2009. The average sale price for a condominium-class property was $254,220, an increase of 17.4 per cent over April 2009. The average sale price of a residential-class property was $356,617, an increase of 11.7 per cent over April 2009.

The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

"information provided by the Ottawa Real Estate Board."

Weather may be poor but the housing market is HOT!

Last October was the beginning of some tough times for most canadians, as well as most other parts of the world. This has been the first recession of the new millenium. Although most of the nation's housing market was strongly affected by the recession, here in the nations capital, things remained fairly stable. Luckily for us prices didn't see a huge decline and now that signs of the improving economy are in our sights, the market is heating up quite a bit.

We have low interest rates, the lowest they have been in years in fact. The government has decided to freeze the prime rate at 2.25% until the second quarter of 2010(June). This is great news if you were deciding to make a purchase in the next year.

The time to buy is now, while the rates are still at an all time low, and before the housing prices begin to rise again.

If you or anyone you know are thinking of buying or selling, please don't hesitate to contact me immediately to get started. I am your one stop shop for real estate needs and I have all of the contacts you will need in your home purchase, lawyers, inspectors, contractors, mortgage specialists, and movers. You name it, I got it. I look forward to helping you find your dream home soon.

Your Downpayment for your purchase

Most lenders require you to pay a portion of your own funds--the down payment--toward the purchase of a home. Saving for a down payment can be one of the most challenging steps in buying a home.

Your down payment plus your pre-approved loan amount will determine how much home you can afford. A down payment can come from many places: savings, investments such as stocks and bonds, gifts from relatives, company bonuses, equity in other assets, and life insurance policies, to name a few. Then again, there may be home mortgage alternatives that do not require a down payment.

If you currently own a home, then you may want the equity you have built in that house to serve as the down payment on your next home. But how much is your current home worth? I would be happy to provide you with a market valuation so that you will know its current value.
With some basic information about your home, I can establish a list of comparable properties in your area as reported by the Multiple Listing Service (MLS). If you would like a more precise and thorough market evaluation, I can stop by for a quick view of your home.

Please call or email me if you are interested in a free market evaluation of your home or if you have any questions.

Canadian Housing Market Bouncing Back

Amid the month-to-month torrent of real estate statistics, economists pegged particular significance on new numbers because they reveal widespread strength at strong prices and showed mounting momentum over a three-month span, carried by what had been the weakest region – the West.

It's a radically stark contrast with the United States, where prices – after three long years – are still falling, down a third from their bubble peak.

In Canada, buyers are back, sales are surging, and prices are edging up. “People thought the world was coming to an end,” said Mr. Stewart, a top-selling agent at his Century 21 office near
False Creek in downtown Vancouver. “Now, the fiscal stimulus and ultralow interest rates have supercharged real estate.”

Almost 150,000 sales of existing houses and condominiums were tallied in the April-May-June period, according to Canadian Real Estate Association data published Tuesday. It was the fourth-best quarter ever since CREA began recording the sales data in 1994, the industry marketing group said.

In frigid January, by comparison, barely 16,000 houses were sold. The “Phoenix-like rise” of real estate sales is the “most astonishing economic development of 2009,” economists at
BMO Nesbitt Burns declared. And even though there are asterisks – the job market remains weak – Canada appears to have skirted “the clutches of a lengthy, painful downturn.”

Nationally, for the April-June period, sales were up 1.4 per cent from a year ago. It was the first quarter that markeda year-over-year advance since late 2007, and the period strengthened as the spring warmed. In June, sales were up 22.8 per cent nationally – and prices climbed 4 per cent. In Toronto, the sales jump was 27.4 per cent, with prices up 2 per cent.

In fact, the average price of a home in Canada has never been higher. At $318,700, the figure is slightly higher than the record set a year ago, pushed up by the flurry of sales in expensive big-city markets.

Pre-approvals

Many buyers call their lender seeking information about financing. In the process, they become pre-qualified. That gives them a good idea of what they can afford, or more accurately, what loan amount they qualify for.

You should take it one step further, however, and ask to be pre-approved. When you become pre-approved, you actually apply for a loan. The lender checks credit, verifies employment, and often verifies that you have sufficient funds to close. Then once you find your dream home, just about the only thing left is the appraisal.

The reason savvy buyers obtain loan approval before shopping for a home is that it strengthens their negotiating position when they make an offer. All sellers want to sell their home to a pre-approved buyer.

Pre-approval can also cut days, even weeks, off the closing process.Pre-approval can really help you to determine your price range, which helps you narrow your choices of homes to buy. You will already know how much you can afford before you even start looking.

Call or email me if you would like the name of a lender to pre-approve you for a loan, or if you have any questions about preapproval. I am happy to help.

Renovation Tax Credit a Hit

A new poll suggests more than one in three Canadians plan to take advantage of the federal government's home-renovation tax credit.
More than eight in 10 questioned in the Harris-Decima/Canadian Press survey said they were aware of the program, under which eligible applicants can receive a tax rebate of as much as $1,350 if they invest up to $10,000 in renovations on their home.

1. What is the Home Renovation Tax Credit (HRTC)?
The proposed HRTC is a non-refundable tax credit for work performed or goods acquired in respect of an eligible dwelling.
2. What is meant by eligible dwelling?
An eligible dwelling is a housing unit that is eligible to be an individual's principal residence or that of one or more of their family members, at any time between January 27, 2009 and February 1, 2010.
3. What is the eligibility period?
The credit will be based on eligible expenditures for work performed or goods acquired after January 27, 2009, and before February 1, 2010. Expenditures incurred pursuant to an agreement that was entered into before January 28, 2009, will not be eligible for the credit.
4. Who will be eligible for the credit?
Eligibility for the HRTC will be family based. A family will generally be considered to consist of an individual or an individual and his or her spouse or common-law partner, including children who will be under 18 years of age, at the end of 2009. A family will be allowed a single credit that may be shared within the family.
5. How will the credit be calculated?
The credit will only be available for the 2009 tax year and applies to eligible expenditures of more than $1,000, but not more than $10,000, resulting in a maximum credit of $1,350 ($9,000 x 15%).
6. What are eligible expenditures?
To be eligible, expenditures incurred in relation to a renovation or alteration to an eligible dwelling (or the land that forms part of the eligible dwelling) must be of an enduring nature and integral to the dwelling, and includes the cost of labour and professional services, building materials, fixtures, rentals, and permits.
Eligible expenditures must be supported by acceptable documentation.
For more information please visit https://mail.kwottawa.ca/exchweb/bin/redir.asp?URL=http://newsletter.coconutapp.com/t/r/l/iiuyjd/jkukeui/r

RATE UPDATE

Prime rate is still holding steady at 2.25% with an apparent commitment by the Bank of Canada to keep it at this level until at least the end of Q2 2010. Variables are still looking attractive as a low cost mortgage option! Fixed rates have tweaked up slightly over the last month, but still represent good long term security.