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.
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