Greater Victoria real estate on a big rebound

By Darron Kloster, Times ColonistNovember 13, 2009

Greater Victoria real estate is seeing a boom of sorts.

Photograph by: Files, Times Colonist

Victoria, B.C. - Greater Victoria real estate is on a big rebound with residential sales expected to increase by 21 per cent this year and another five per cent in 2010.

A forecast Friday by the B.C. Real Estate Association said Greater Victoria sales will hit 7,450 by the end of the year and 7,800 in 2010 — increases driven by overall confidence in the economy, pent-up demand and low borrowing costs. The forecast added average price on the Multiple Listing Service will dip two per cent to $475,000 this year, but increase by six per cent in 2010.

“I don’t think many of us thought last January, as the financial crisis was unfolding, we’d be looking at near-record activity in the market come fall,” Cameron Muir, the association’s chief economist, said in an interview. “The demand for real estate just welled up and the fact that interest rates have stayed very low has helped to build a strong demand. Victoria and Vancouver, in particular, are posting near record unit sales this fall.”

Muir said despite the rollercoaster economy, British Columbia still has 92 per cent of its labour force working. “People feel secure and see home ownership as viable,” he said, noting bidding wars on well-priced, good-location properties are common again.

The Vancouver Island Real Estate Board, covering all areas north of the Malahat, will also see increases in sales — six per cent this year to 7,200 and a 10 per cent leap in 2010 to 7,900 transactions — exceeding Greater Victoria’s total. Prices will slip by four cent this year to $330,556 and, in 2010, the average will tick up one per cent to $320,500.

Muir says a 20-per-cent sales surge across British Columbia will mean 82,900 homes will be sold this year, up from just 68,923 units sold the year before. Sales are expected to climb to 89,600 units next year.

The average annual MLS residential price in the province is expected to post a new record this year, rising two per cent to $463,200 and is forecast to climb an additional four per cent to $482,800 in 2010.

“Recovery in the B.C. economy will unfold gradually next year,” Muir said. “With sales prices in some markets flirting with record highs, affordability constraints will limit home price inflation over the next year.”

Greater Victoria real estate sales show steady rise

Highest number of properties sold in September since 1992

By Carla Wilson, Times Colonist October 2, 2009

Chris Markham says upward pressure on prices is returning.

Photograph by: Debra Brash, Times Colonist

Greater Victoria's real estate market flexed its muscles last month by ending with the highest number of September sales in 17 years.

"The last seven months have shown a steady improvement in sales and price stability," Chris Markham, president of the Victoria Real Estate Board said yesterday.

The capital region is not alone. It reflects growing signs of stability in global real estate markets and signals increasing confidence in the economic recovery, said a Scotia Economics report also released yesterday.

At the same time, new home construction in Canada, particularly in the four western provinces, is on an upward trend as well, the report said. "Builders are responding to tight resale market conditions, which tend to spur relative demand for new homes," said Adrienne Warren, senior economist with Scotia Economics.

In Greater Victoria, a spurt in sales over the $1- million mark pushed the average price for a single family house in the capital region to $619,936 in September, up four per cent from $596,498 in August. Last month saw 24 sales of $1 million plus.

"These included five sales of over $2 million, three in Saanich East, one in Victoria, and one on the Gulf Islands, which had a significant impact on the overall average price," Markham said.

This is the first time since January 2008 that the average price for single-family homes topped $600,000. In December 2007, the average was higher at $624,450.

Last month's median -- or midway -- price for single-family houses was $550,000, an increase of $10,000 from August, board figures show. The six-month average price was $581,498.

The average price for condominiums rose as well, moving to $325,106 last month from $317,312 in August. The median in September was $295,000.

Townhomes saw their average price slide to $441,966 in September, from $455,430 in August. The median in September was $415,000.

A total of 776 homes and other properties sold in September through the board's Multiple Listing Services. That's up from 764 in August, and from 512 in September of last year, when the global economic crisis was in full force.

The highest number of September sales, since data was collected in 1990, took place in 1992 when 903 properties changed hands.

May 1991 recorded the highest number of sales for any month, at 1,083, since 1990, the board said.

The value of all property sales in September was $382.4 million. Sales included 437 single-family homes, 197 condominiums, and 79 townhomes.

September's inventory of properties on the market was 3,419, down from 4,754 from the same month a year ago.

"We are now seeing some renewed upward pressure on prices as a result of the declining inventory," Markham said.

August 19, 2009

Inflation: Lowest in 56 Years at –0.9%

That’s the headline inflation number from today’s CPI report. Headline inflation is a YOY figure that includes volatile food and energy prices.

On the other hand, core inflation (the Bank of Canada’s key metric), is fairly buoyant at 1.8%. That’s just shy of the BoC’s 2% target.

Bond yields fell on the news. The 5-year GOC yield is down to 2.49% at last look--a four week low. For trader-types, key support is around 2.40%.

Yields have slowly drifted lower for the last week and a half. That may push some non-bank lenders closer to 4% again on 5-year fixed mortgages.

Victoria's July housing sales highest in almost two decades

By Carla Wilson, Times ColonistAugust 4, 2009

Greater Victoria's housing sales jumped in July

Photograph by: Staff , Times Colonist

Greater Victoria’s housing market remained strong in July, hitting the highest number of sales for that month since 1990.

A total of 933 homes and other properties sold through the Victoria Real Estate Board’s multiple listing service last month, up 51 per cent compared with July 2008 when 616 properties changed hands.

At the peak of the market in 2007, a total of 922 properties were sold. The board’s monthly sales tables date to 1990.

Greater Victoria’s real estate market slowed dramatically late last year and early this year. It picked up in the past few months as the market became more balanced and interest rates remained low.

July’s sales totals came in slightly below June, when 946 sales took place, the board said today.

The average price for a single-family home moved down slightly to $565,469 in July, from $588,186 in June. The median price was $520,000.

Saanich East led the way among single-family home sales, with 92 changing hands in July, followed by Langford at 59, Saanich West at 50, and Sooke at 49.

A total of 516 single-family homes sold through the board in July and of those, 471 were within Greater Victoria.

Last month’s average price for a Greater Victoria condominium climbed to $328,441, an increase from $298,200 in June. The median was $290,000. Victoria saw the highest number of condo sales at 103 (plus a further 15 in Vic West), followed by Saanich East at 41.

Townhomes earned an average price of $443,109 last month, up from $413,218 in June. The median was $421,000.

Chris Markham, board president, said sales point to rising consumer confidence.

“There are indications that the recession is nearing an end and people are feeling more confident in the economy and consequently more confident about making a move up or down in the housing market, depending on their needs.”

Overall sales so far in 2009 are about two per cent higher than the same months last year, he said.

“The year began very slowly but the rebound in the past four months has been significant.”

The total inventory declined in July to 3,632, reflecting a decrease of 20 per cent from 4,557 in July 2008.

“The decline in the number of properties available for sale means we can expect some upward pressure on prices, though it is important to note there will always be month-to-month fluctuations in prices depending on the properties sold,” Markham said.

Victoria real estate market hot again; sales numbers near record levels

By Carla Wilson, Times ColonistJuly 2, 2009

Victoria's real estate market is heating up again, proving the appeal of the region.

Photograph by: File, Times Colonist

Victoria’s real estate market is officially hot again now that June sales numbers hit their third highest monthly level in recent years and single-family prices continue climbing.

The total of number of sales in June was 946, trailing only 2007 when May had 963 sales and June had 949. The previous high was set in May 1991, with 1,083 sales, the Victoria Real Estate Board said Thursday.

Of the 946 properties, the vast majority were residential but numbers also include 12 commercial properties, all sold through the board’s Multiple Listing Service.

Last month’s sales reflect a whopping 31 per cent increase from 723 in June 2008, and were up by seven per cent from May 2009 when 879 properties changed hands.

“For the past couple of months, we have seen growing strength in the market as many people who were waiting to see which direction the market would move in have decided now is the time to buy,” Chris Markham, Victoria Real Estate Board president, said Thursday.

This rebound is stronger than anticipated, he said.

June sales included 539 single-family houses, 242 condos, and 104 townhomes. The total value of all sales was $447.6 million, the board said.

The average price of a single-family house sold through the board’s Multiple Listing Service increased to $588,186 last month, up from $573,442 in May. The median in June was $529,900.

Saanich East led the region in the number of total single-family sales, at 94, followed by Langford at 60, and Victoria at 42.

There was a slight decrease in the average price for condominiums, at $298,200 in June. May’s average was $306,971. The median in June was $275,000.

Victoria had the highest number of condo sales, at 99, followed by Langford at 40.

Townhomes saw an average price increase, rising to $413,218 in June, up from $400,788 in May. The median remained the same month-over-month at $375,000.

After a dramatic drop in sales when the economic downturn kicked in last year, the market began recovering this year, starting with the housing in lower end of pricing. The real estate sector has seen sales increase along the pricing ladder as the market regains its strength.

Last month brought 26 sales of more than $1 million, including one Uplands home at more than $5 million, the board said.

Inventory has tightened up since June of last year, helping drive demand. Last month, there were 3,794 properties for sale, a decrease of 16 per cent from the 4,513 on the market in June 2008.

“The drop in available inventory is also reflected in the price increases for single family homes and townhomes that we saw last month,” Markham said.

cjwilson@tc.canwest.com

June 8, 2009

Bond Yields Jump Again

The 5-year government bond rocketed to 2.71% today. Various lenders have already issued fresh new fixed rate increases. More may follow tomorrow if yields don’t retrace.

Two-year bond yields also broke to the upside. That may lead to upcoming rate increases on shorter-term mortgages, which have been insulated from rate hikes for several months.

If you’re shopping for a fixed mortgage, be safe and get your application in soon.

Victoria real estate turns around

Board boss says despite recession, our region has weathered the storm

By Andrew A. Duffy, Times ColonistJune 2, 2009

Prices are recovering from the lows.

Photograph by: Files, Times Colonist

The Victoria real estate market is starting to look a little more like itself, according to the Victoria Real Estate Board.

A number of homes are receiving multiple offers, the inventory around the region is starting to sell and activity is picking up.

"It's quite a turnaround," said Chris Markham, president of the board, noting that despite talk of recession, Victoria appears to have weathered the storm. "It seems as fast as we went down, we've come right back out again."

The numbers appear to back that up, as last month looked an awful lot like May 2008.

A total of 879 homes and other properties sold in May through VREB's multiple listing service, a 17 per cent increase over April and up 14 per cent compared with the 770 sales in May 2008.

The average price for single-family homes sold last month was $573,442, up from $550,736 in April. That is down slightly from May 2008, when the average price was $601,897. The median price of homes sold last month was $525,000.

The average price for condominiums was $306,971 last month, up from $292,252 in April, but down from last May when it hit $336,157. The median price for condominiums in May was $279,500.

The average price of all townhomes sold last month was $400,788, virtually unchanged from $400,695 in April, but again down from last May's average price of $435,058. The median price dropped to $375,000.

There were 3,789 properties available for sale at the end of May, down 13 per cent from the 4,332 properties available in the same month a year ago.

"I think this shows you Victoria is insulated and always has been," Markham said. "We have watched higher highs and lower lows in other places."

Markham says Victoria is rebounding to normal as the market activity picks up heading into the summer months.

"I think our market was artificially soft, and right now people who were waiting for lower prices and lower interest rates -- buyers who delayed -- are back," he said, noting he showed houses during the weekend to a couple who faced a number of homes with multiple offers already on them. "We're seeing a lot of people out and a lot of activity."

Jessica and Justin Bell have been part of that activity.

Spurred on by low interest rates and a sense the market was about to rebound, the couple were waiting yesterday to hear if their offer on a Langford home had been accepted.

"We've been renting for a long time and it's hard to pay our rent cheques every month when we know we're paying someone else's mortgage," said Jessica Bell. "And we've been watching the housing market and have seen a number of houses coming down in price, and since our interest rate was fabulous we just felt it was time."

The problem is that there are others who feel the same.

Jessica said there were multiple offers on the house they want, and they have been on tenterhooks for days.

"It's been very exciting but also very stressful," she said.

"You really have to go with the flow, as a lot of places we went to look at had been snapped up -- especially the ones with suites. You really have to be on top of it."

While there's heavy competition for single-family homes priced between $400,000 and $600,000, that's not the case at the higher end of the market, Markham said.

"If I was marketing your $2-million property, I couldn't say that," he said. "Bigger money is slower to move. I know there are some investors who were out there thinking things might come down hard and they were looking for some blood, but that hasn't happened.

"There are some good deals, but there's no bloodbath."

North of the Malahat, prices remained flat despite a slight increase in sales.

"We are seeing the number of sales transactions consistent with last year's levels, with three out of the six [Vancouver Island Real Estate Board] areas actually having significant increases compared to last year," VIREB president Ray Francis said.

aduffy@tc.canwest.com

GREATER VICTORIA

- Average sale price, single-family house: May $573,442, April $550,736, May 2008 $601,897

- Median sale price, single-family house: May $525,000, April $515,000, May 2008 $545,000

- Average sale price, condominiums: May $306,971, April $292,252, May 2008 $336,157

- Median sale price, condominiums: May $279,500, April $273,950, May 2008 $295,500

- Average sale price, townhouses: May $401,854, April $403,367, May 2008 $434,770

- Median sale price, townhouses: May $375,000, April $395,000, May 2008 $394,900

Source: Victoria Real Estate Board

NORTH OF MALAHAT

Average price for May 2009, compared with May 2008

- Campbell River: $280,261, -17%

- Comox Valley: $327,844, -14%

- Nanaimo: $341,462, -6%

- Parksville/Qualicum: $346,113, -14%

- Port Alberni $227,830, -3%

- Cowichan Valley: $343,856, -9%

Source: Vancouver Island Real Estate Board

First-time buyers trigger sales surge

Low interest rates and lower prices ushering in a market recovery

By Carla Wilson, Times Colonist; With files from Canwest News ServiceMay 27, 2009 6:29 AM

• Story
• Photos ( 1 )

Victoria's housing market is picking up after slump in prices.

Photograph by: Debra Brash, Times Coionist

First-time home buyers lured by lower prices and low interest rates are triggering a chain reaction of sales throughout Canada's housing market, says a leading real estate firm.

"When first-time buyers stepped out of the market in the fourth quarter of 2008, at the height of the global recession, their absence was profoundly felt," said Phil Soper, president of Royal LePage Real Estate Services.

Newcomers are "back in force this spring, and with them the beginnings of a market recovery," he said.

In British Columbia, 92 per cent of potential first-time buyers are motivated by low interest rates, and 96 per cent said dropping home prices will likely encourage them to make a purchase, said a Royal LePage report released yesterday.

Research shows how closely the housing market is linked to broader economic trends and consumer confidence, Soper said. Across the country, survey respondents said low interest rates, the first-time home buyers' tax credit and their own job security are critical factors in whether they decide to buy.

Pollara Research carried out an online survey for Royal LePage in April and May of 474 Canadians likely to buy their first home within three years.

With a 100 per cent response rate, it would have an estimated margin of error of plus or minus 4.5 per cent, 19 times out of 20. Data was weighted to reflect Canada's population according to census data.

In B.C., 40 per cent of newcomers to the housing market are planning to buy a "fixer-upper," the report said.

Among first-time buyers, 60 per cent are women, the report said. That figure makes sense because women are increasingly participating in all levels of the workforce and increasing their income, said Cameron Muir, B.C. Real Estate Association chief economist.

Wayne Schrader, CEO of Re/Max Camosun in Saanich, agrees that low interest rates are attracting first-time buyers as they shop in what can be a competitive market, particularly for single-family houses priced at $500,000 or less, an entry level price in the capital region.

"We are starting to see multiple offers out there," Schrader said. And some homes are selling for above the listing price.

After dismal sales in winter months, numbers have picked up again, although not to the high levels seen in 2007 when the market was red hot.

In the past two months, interest has increased for homes in the $600,000 to $900,000 range, he said.

Dianne Usher, a Royal LePage vice-president focused on the Toronto market, said first-time buyers are a crucial element to the overall housing market because of their "domino effect."

"When the first-time buyer is out there and active in the marketplace, it creates a first-time seller, a second-time buyer, a third-time buyer, and on up the food chain," she said.

First-time home buyers occupy between 30 and 35 per cent of the overall market, Usher said.

Mortgage rates to remain stable: CMHC

Tuesday, 19 May 2009

Mortgage rates are expected to remain within 25 to 75 basis points of their current level for the remainder of 2009, according to CMHC's second quarter Housing Market Outlook, keeping them "very low in a historical context."

"Movements in mortgage rates are difficult to predict due to volatile economic conditions," the report stated. "Nevertheless, rates are expected to remain steady this year and edge higher in 2010."

Along with mortgage rates, CMHC listed employment, net migration and low birth rate as having key effects on residential construction, and forecast housing starts to decline to 141,900 in 2009 (most notably in Alberta and Saskatchewan) before rebounding to 150,300 in 2010.

"The decline in housing starts in 2009 can be attributed to several factors, including the current economic climate, increased competition from the existing home market, and the impact of strong house price growth between 2002 and 2007," said CMHC chief economist Bob Dugan. "Housing market activity will begin to strengthen in 2010 as the Canadian economy recovers, bringing housing starts more in line with demographic fundamentals over the forecast period.

May 11, 2009

A Turning Point?

Keep an eye on the bond market. Five-year government bond yields rose to a 70-day high on May 7th.

They were up again to 2.14%, after breaking a 4-month high on Friday. Yields have been steadily climbing for five weeks.

A Turning Point?

As savvy readers are aware, bond yields influence fixed mortgage rates. One capital markets expert told us that rates have reached an “important threshold.” Based on current 5-year yields, “lenders should be thinking of moving rates up,” he said.

We also saw the following from a mid-size lender: “Keep an eye on lenders’ rates--especially quick close offers”…the “increase in bond yield (and the decrease in spread--down 10 today) is something to watch…If the bond yield continues to go up, this could be a trigger for interest rates to rise.” Some lenders are pulling their quick close specials.

Mortgage shoppers (and variable-rate holders thinking of locking in) should take note. Bond yields are pushing up lenders’ funding costs. On a 5-year fixed, many lenders are paying a base cost of roughly 55 to 100 BP’s over 5-year Canada bond yields to raise capital. This is capital they lend out as 5-year fixed mortgages. That equals a base funding cost of roughly 2.69% to 3.14%. If the “average” lender wants to offer a discounted 5-year fixed rate of 3.85%, that leaves a gross spread of 0.71% to 1.06%. That’s near or below the minimum that some lenders need to operate, given all their other operational costs.

If we see bond yields continue up, lenders may have little choice but to adjust rates higher. The rise in yields is being fueled further by the stock market rally and recent better-than-expected economic activity. Today’s employment reports are case in point. Coupled with the technical and supply/demand forces now affecting bonds, all of this is bearish for bond prices and bullish for bond yields.

When Will Fixed Rates Increase?

We can only guess. Different lenders have different cost structures. Some lenders will be able to hold out longer than others. Scotiabank, for example, might have a 25 bacost advantage (or more) over a small mortgage-only lender.

That, the spring market, and vicious rate competition, will likely keep rates lower than at other historical turning points. We’re in the biggest volume quarter of the year, which is prime time for lenders to build market share. No one will want to be the first to hike rates.

Regarding non-bank lenders, they will probably try to avoid exceeding 3.95% for the time being. 3.95% is a benchmark rate because it’s the discounted 5-year fixed rate advertised by the big banks.

What About Variable Rates?

(BA)Banker acceptance yields, which drive variable rates, have been holding around 0.30%-0.40%. If the Bank of Canada keeps true to its conditional pledge, they may stay there until June 2010.

On the other hand, with one ounce of inflation above 2%, that pledge could be an afterthought. The BoC will not hesitate to raise rates if an economic recovery comes knocking sooner than anticipated.

On the funding side, big banks are currently flush with cash. Most large deposit-taking institutions have a material advantage in variable-rate funding costs over the typical mortgage-only lender ( First National / MCAP / Merix). (Interestingly, however, they’re not exercising this advantage…yet). The capital markets consultant we spoke with pegged that advantage at 40-60 basis points. That’s primarily because small mortgage lenders have to rely on government-backed liquidity sources (like the Canada Mortgage Bond) to generate capital for variable-rate mortgages.

As a result, unless variable-rate spreads improve (i.e., the difference between prime rate and 30-day Bankers Acceptance yields increases), then most future near-term variable-rate deals might be through larger deposit-taking lenders. Moreover, with the BA spread at 1.85%, and liquidity premiums (the extra that lenders need to pay to raise variable-rate capital) at 0.50% to 1.20%, the base cost of funding a variable-rate mortgage is roughly:

• 0.90%-1.00% for a huge bank, to…
• 1.60% for a small lender who relies on an aggregator (middleman) to resell its mortgages into the Canadian Mortgage Bond market.

What This All Means to Homeowners

If you want a fixed rate, there is no reason to wait. If bond yields keep rising, time could be an enemy.

If you want a variable rate, it doesn’t look like they’re going up anytime soon.

_____________________________________________________

The disclaimer: Virtually no one can accurately and consistently predict interest rates long-term. This is not a prediction or recommendation. Market conditions can change at any time. All funding cost estimates are just that, estimates. They can change drastically from lender to lender

Spring Real Estate Sales Soar
May 01

Sales of homes and other properties throughout Greater Victoria soared in April while prices remained stable with some modest fluctuations up and down, depending on the property type. A total of 747 homes and other properties sold in April through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), up 24 per cent from the 602 sales in March. There were 768 sales in April of last year. Prices for single family homes showed some increase while condo and townhome prices were mixed.

Victoria Real Estate Board President, Chris Markham, says the substantial increase in sales last month is very encouraging, “While sales so far this year are still running 28 per cent lower than for the first four months of last year, we have seen a dramatic upswing in market activity in the past couple of months with sales last month quite close to those of April of last year. We feel this demonstrates renewed confidence in the market.”

Markham added sales have been particularly strong in the mid-range of prices with one third of all single family homes last month selling for under $450,000. Markham noted that prices remained strong and stable in April. The average price for single family homes sold in Greater Victoria last month was $550,736, up from $534,689 in March. The median price also rose to
$515,000. The six-month average was $540,179. The overall average price for condominiums was $292,252 last month, virtually unchanged from $294,393 in March. The average for the last six months was $285,848.

The median price for condominiums rose in April to $273,950. The average price of all townhomes sold last month was $400,695 down slightly from $405,003 in March. The median price rose, however, to $390,000. The six month average was $399,826.
There were 3,861 properties available for sale at the end of April, virtually unchanged from the 3,859 properties available in the same month a year ago. There were also 3,859 properties available for sale at the end of March of this year.

MLS® sales last month included 421 single family homes, 204 condominiums, 74 townhomes and 11 manufactured homes.

The Affordability of Home Ownership: Buying -vs- Renting

This table compares the cost of buying a condo to renting a similar home in Victoria, BC.

Renting a 2 bedroom apartment $1,300 - $1,500/month

Buying a 2 bedroom condo*
$250,000 Purchase price

$ 12,500 5% down payment (required)

$ 5,000 Est. closing costs

$ 1,072 Mortgage principal & interest

$ 210 Est. monthly strata fee

$ 154 Est. monthly property taxes

$ 1,436 Est. Total Monthly payment

*Requires a combined gross income of $52,000/year and a good credit history

Renting a 3 or 4 bedroom apartment/house $1,600 - $2,000/month


Buying a 3 or 4 bedroom condo/townhouse**

$400,000 Purchase price

$ 20,000 5% down payment (required)

$ 8,000 Est. closing costs

$ 1,716 Mortgage principal & interest

$ 250 Est. monthly strata fee

$ 210 Est. monthly property taxes

$ 2,176 Est. Total Monthly payment

**Requires a combined gross income of $80,000/year and a good credit history.

From Ian Baker, Beyer Mortgage Services

Ken Stratford and Norm Gidney

Last Friday I attended a talk given by Ken Stratford of the Greater Victoria Economic Development Commission. Please check out his blog -
http://thecapitaloptimist.blogspot.com. It has alot of good local business news and good news on the economy. Also speaking was Norm Gidney, editor of "Douglas Magazine".
A few highlights:
EDS Advanced Solutions - hiring 120 new employees
Victoria February hotel stays were almost the same as Feb 2008.
Victoria has almost full employment.
A book Ken recommended is "Crowdsourcing: Why the Power of the Crowd Is Driving the Future of Business" by Jeff Howe.

Have you heard the news?
The local real estate "crash" seems to be over. The power of the media over the last few months certainly affected the market. But Victoria seems to hold it's own, even in times of global recession and financial crisis. That's one of the beauties of investing in property here. Residential properties are currently selling at a higher than expected volume. Just looking through the listings in our office - there aren't really that many compared to a month or two ago. Yes, they've sold. "Lower interest rates and resulting increased affordability have energized the entry-level housing market", says Victoria Real Estate Board President Chris Markham. It's a great time to buy or sell. There are lots of buyers looking, which is good for sellers, and there are some great deals to be found, which is great for buyers. With the first sunshine we've had for a while, that puts everyone in a positive, optimistic frame of mind also!

Victoria Real Estate Board Green Task Force update

The work of the Green Task Force has been completed. I would like to thank Tony Joe, Past President of the Victoria Real Estate Board, for his leadership in bringing "Green Real Estate" to the forefront. Victoria was the first Real Estate Board in Canada to offer the National Association of Green Realtors and Brokers courses to it's membership. Close to 50 Victoria realtors have taken advantage of this online training. This increases knowledge and awareness of energy efficiency of homes which the realtor is able to pass along to their clients. As the construction and building industry moves ahead with both LEED and BUILTGREEN, we as realtors need to stay current with terminology, practices and products.

The Green Task Force also began the process of providing information packages for realtors full of locally relevant resources that they can give to their clients. An example of what is in the package are the government rebate programs available to home owners. These will be available to realtors in the next month or so.

The Green Task Force also decided to support the Ministry of Education's Greening of Schools program. Through the Community Relations Committee, funding will be made available to schools to help them with their projects.

I would like to thank the chair of the Green Task Force, Dennis Fimrite, for inviting me to join the Community Relations Committee as the Green Task Force representative, to enable easy transition of information.

Real estate warming up for spring

First-time owners drive market as housing affordability improves

By Carla Wilson, Times Colonist; With files from Canwest News Service
March 12, 2009

More people are starting to show up for open houses.

Photograph by: Darren Stone, Times Colonist, Times Colonist; With files from Canwest News Service

First-time home owners are driving home-buying as affordability improves across the country, says real estate company RE/MAX.

Canadian real estate markets are "reawakening" as the weather warms up, said Elton Ash, regional executive vice-president for RE/MAX of Western Canada. "First-time buyers seem more acclimatized to economic factors, even though the barrage of bad news continues to flow.

"Those who are secure in their jobs, have accumulated good down payments and have acceptable credit ratings continue to venture forward, undeterred by tighter lending criteria."

In Victoria, the market's upswing is reflected in the number of people showing up for open houses, Wayne Schrader of RE/MAX Camosun said yesterday.

That's grown from a few couples in January and the months prior to 30 to 50 people since mid-February, he said.

Residential sales in the capital region rose to 403 in February from 247 in January.

The market is continuing to build and 59 per cent of sales are for properties

that changed hands for less than $450,000, Schrader said.

"Many first-time buyers are looking to downtown Victoria and Esquimalt to realize their dream of homeownership," the report said.

The starting price for a single-family home in Greater Victoria has dropped to $310,000 this year from $350,000 last year, RE/MAX's report said. Schrader noted, however, that in the capital region, few single-family homes are available in that range, or even at $350,000 to $380,000.

The report also put the starting price for a 1,000-square-foot condominium at $190,000 this year, down from $200,000 last year. Many condos are priced at more than $250,000, Schrader said.

Low interest rates and government incentives to home buyers and for home improvements are helping to fuel the market, he said.

Stephen Gagnon, a mortgage broker with Mortgage Architects, who works with RE/MAX, is seeing an increase in the number of first-time buyers this year. Minimum credit requirements have tightened in today's market.

First-time buyers will often put a five per cent down payment onto a purchase, with many choosing condominiums or townhouses, or single-family homes with rental suites to help offset mortgage payments, he said.

Mortgage rates can change daily and a variety of options are available. If a buyer put five per cent down on a $225,000 condo and signed up for a five-year fixed rate of 4.15 per cent on a 35-year amortization, monthly payments would be just over $990, he said.

RE/MAX said people are being lured out of the residential-rental market by lower mortgage rates and home prices.

"Increased inventory and longer days on the market coupled with the lowest lending rates ever are presenting opportunities that have not been seen in almost a decade," the company said.

Of the 32 local markets

it tracks in Canada, RE/MAX said 22 of them, including Victoria, are "firmly in buyer's-market territory."

It said single-family homes can be found in 40 per cent of these locations for less than $200,000 and condominiums for even less in more than 70 per cent of the markets.

Millan Mulraine, economics strategist with TD Securities, agreed that conditions are ideal for first-time buyers to enter the housing market, or existing homeowners to upgrade, if their respective financial situations are secure.

While it's hoped improved affordability might plant the seeds for future recovery in the housing market, Mulraine said many economic impediments remain.

"The economy as a whole is not in great shape," Mulraine said. "The Canadian labour market itself seems to be turning belly up. For a number of people, it clearly isn't a time to be purchasing or getting into a big investment like buying a home when you're not sure about your employment situation."

The Canadian economy lost a record 129,000 jobs in January, according to Statistics Canada, and a loss of about 50,000 jobs for February is expected to be reported tomorrow.

Real estate market prime for first-time buyers

Many incentives for new homeowners

Marty Hope

Calgary Herald

CREDIT: Justin Sullivan, Getty Images While zero-per-cent down payments and 40-year mortgages have gone the way of the penny match, mortgage rates and housing prices are trending down--at least for the time bein

They're back--but if they're not, they should be. A few years ago, before diminishing affordability sent them scurrying to the sidelines to continue to share accommodation or hang out at their parents' homes, first-time buyers were a force to be reckoned with.

If they had full-time jobs and could muster together five per cent of the value of a home for a down payment, they were in.

They were the starting point that set the whole chain reaction in motion.

They would buy a resale home and the sellers would move to something else, and those sellers --well, you get the idea.

I recall a housing seminar that strongly suggested first-time buyers were accountable for something like 35 per cent of all homes sold in Calgary.

Then, prices started to jump. Homes were selling in a matter of hours at above asking prices.

Multiple offers forced many potential purchasers to bail because their budgets just weren't high enough to compete.

Sellers, meanwhile, were reaping the benefit of being behind the steering wheel.

Well, things have turned. Firsttime buyers are back in the game, if they want to be.

Sellers are having to bring their asking prices back to more realistic levels to attract an anxious, but cautious, pool of buyers who know they now have more say over what happens in the marketplace.

At the same time, though, jobs are being lost in some sectors, salaries are likely being frozen, and consumer confidence has taken a hit. While there is some pent-up demand for homes, the buyer pool has gotten shallower. Sellers have to realize this.

On the other side of the coin, while zero-per-cent down payments and 40-year mortgages have gone the way of the penny match, mortgage rates and housing prices are trending down--at least for the time being.

That should be good news for those looking at home ownership for the first time.

Add to this the fact builders are focusing on giving home shoppers more for their money. in many homes, prices have been cut by many builders, and they are open to negotiation.

There also seems to be a new emphasis on quality now that the market has somewhat calmed.

Bill Bobyk, general manager of the Sterling Group of Companies, says there are two basic reasons people should be buying: "very good" prices and attractive mortgage rates.

Another factor to consider is that "because this is not the market to be flipping homes, people should be buying with the intention of living in them for a few years," he says. "Buy them because they can be homes, not a short-term investment."

Another thing to remember are the tax breaks for buyers and home renovators in February's federal budget, presented by finance minister Jim Flaherty.

"The federal government's recent budget has added more reasons for Canadians who aren't yet homeowners to consider entering the real estate market this year," says Gary Siegle, Calgary-based regional manager for mortgage brokerage Invis. "For those who are feeling secure about their income and want to take advantage of low rates and a more affordable market, the budget provisions could make an enormous difference in terms of the properties they can afford."

Homebuyers can now withdraw up to $25,000-- up from $20,000 --from their RRSPs as a down payment under the Home Buyers Plan.

Secondly, they can qualify for a $750 tax credit to help them pay for closing costs, such as appraisal or legal fees.

"We are now seeing more first-time buyers seriously considering making the jump this spring into ownership," says Siegle. - Get documentation, such as proof of income and down payment, in place. A mortgage expert can also check credit history to ensure lender's requirements are met. - Apre-approved mortgage can save time, so establish a price range. Mortgage rates are also guaranteed by many lenders for up to three months. - In this type of market, there is room to negotiate with sellers on prices as well as any other terms set out in the listing, such as possession date, appliances being added, and home inspections.

There are plenty of homes to choose from, so don't rush things. - A mortgage is a big debt--probably the largest debt anyone can incur. As a result, it's wise to try to get it paid off as soon as possible.

There are several payment acceleration options out there, so find out what they are and save money in the long run. - Find a mortgage and a home that suits your lifestyle. The mort-gage should reflect your current financial status, but also fit with long-term goals. Don't just buy for the sake of buying in a buyer's market. Find yourself a home that fits your lifestyle as well as your future needs.

mhope@theherald.canwest.com

© The Calgary Herald 2009

Homeowners get answers

Be sure you understand the details from the start

By Pedro Arrais, Times Colonist February 25, 2009

The Home Renovation Tax Credit plan is part of the federal government's aim to inject $3-billion to stimulate the economy. It has met with a lot of enthusiasm -- but also with a lot of questions.

The plan seems simple enough at first glance: Spend up to $10,000 on renovations and construction on the family home, and you get a tax credit of 15 per cent back, up to a maximum of $1,350. It's a credit, so it reduces the amount of federal tax you have to pay; it doesn't mean you get a cheque for $1,350. The plan will be administered by the Canada Revenue Agency.

The plan encourages homeowners to open their wallets with the promise of a reduction on personal income taxes paid next year.

"It's money in the pocket," says Ian B. Lawson, a certified general accountant who operates a practice that bears his name. "It's a win-win situation for homeowners and legitimate, tax-paying businesses."

He notes that the incentive is also a boon to the Canada Revenue Agency, as homeowners will be keen to use legitimate contractors who can supply invoices for work performed. Operators of unlicensed, non-tax-paying companies or people who ask for payment under the table will likely see their business suffer.

"It will definitely affect the underground economy," Lawson says. "It's not good news for those in the building trades that who don't declare income."

For more information, visit www.cra.gc.ca or call 1-800-959-8281

- How do I apply?

There are no application forms. There will be a line in the 2009 personal tax return.

- Do I need to be pre-approved before work can start?

No.

- What is the eligibility period?

The credit is based on work done and materials acquired after Jan. 27, 2009, and up to Feb. 1, 2010.

- When will I get the tax credit?

The tax credit will be applied when homeowners file their 2009 tax return next year.

- I don't pay very much tax. If the tax credit is more than my personal income tax paid for 2009, will I get a tax refund?

No, it is a non-refundable tax credit.

- Can the credit be carried forward?

No, it can only be applied for the 2009 tax year.

- Who is eligible?

The plan is family-based. In the eyes of the CRA that means an individual or an individual and his/her spouse or common-law partner, including children under 18 at the end of 2009.

- What if two or more members of a family co-own a property?

Each family member will be eligible to file for their own separate credit.

- What is the definition of a family for the purposes of this credit?

A family is generally considered to consist of an individual and spouse or common-law partner if applicable.

- Is it just houses that are eligible?

No, the credit also includes work on condominiums and cottages owned for personal use.

- Does it include rental units, such as basements or apartments?

No, just property owned for personal use.

- Do I have to spend $10,000 to qualify?

No, homeowners can spend a lesser amount and receive a proportionate amount in tax credit.

- What if the work is over $10,000?

Homeowners are free to spend more than $10,000 on their renovations but they will not get a credit on any work over the limit.

- How is it calculated?

The 15 per cent credit is based on expenditures of more than $1,000 of work, but not more than $10,000. The maximum credit of $1,350 is based on 15 per cent of $9,000.

- Can I do the work myself?

Yes. In such cases, the tax credit will apply to the materials, fixtures, rentals and permits purchased. Keep those receipts as well as delivery receipts to show the goods came to your principal residence.

- Can I hire somebody in my family to do the work?

It depends. Usually the work should be done by an individual dealing at arm's-length. But if the person doing the work is registered for the GST/HST under the Excise Tax Act, the expenditure will be eligible.

- What are eligible expenses?

The cost of labour and professional services, building materials, fixtures, rentals and permits.

- Does the work have to be done by a business, not an individual?

No, an individual can perform the work. But that individual has to be able to produce receipts and invoices for homeowners to apply for the credit.

- Is it just on renovations?

No, the credit can be claimed for new construction, such as alterations and additions to a property.

- Are roofs covered?

Yes. According to the CRA, the credit applies to any renovation or alterations of an enduring nature and integral to the dwelling.

- I want to build a wheelchair ramp. Can I also claim the Medical Expense Tax Credit?

Yes, a homeowner can claim both credits.

- Can we piggyback on other grants currently being offered by other federal programs?

Yes. Homeowners are eligible for both.

- What documents do I need to submit?

Homeowners need to retain all agreements, invoices and receipts for the work performed available in case the CRA requests them. The documentation must identify the goods purchased and services provided, and must identify the contractor or vendor. The invoices must be dated. They must also provide proof of payment.

Ont. to have green regime: Energy minister.

By Lee Greenberg, Canwest News ServiceFebruary 23, 2009 9:01 PM

Photograph by: Peter Redman, National Post

TORONTO — The province is prepared to impose a green regime that will direct how homeowners sell their property, set prices on alternative energy and cut municipalities out of deciding where wind and solar energy projects can be located.

The sweeping legislative package known as the Green Energy Act will amend 15 statutes and the government says it will create 50,000 new jobs.

For homeowners already facing one of the worst markets in decades, the new law will mean that they will be forced to pay for an energy audit before putting their house on the market.

Energy Minister George Smitherman said he wants a home's energy efficiency to play as much of a factor in a sale as fuel efficiency does in a car purchase.

"If you go to a car showroom today, what's the big sticker on the window? It's the (sticker) that tells you about the energy use of the vehicle," he told reporters Monday. "And the very same principle will apply in this case."

It is unclear when the first mandatory home energy audits will occur. Smitherman said he wants to ensure there are enough auditors working before the plan goes ahead. The audits cost about $300 and are required for a rebate program for energy retrofits offered by the provincial and federal governments.

The act is designed to encourage massive investment in renewable energy production and conservation.

Those measures include streamlining lengthy approval processes and offering a generous, fixed price (which has yet to be set) for all wind, solar, hydro, biomass, biogas and landfill gas projects. Smitherman said that provision, known as a feed-in-tariff, would put Ontario on the level of "global green power leaders like Denmark, Germany and Spain."

New large energy projects will also be required to contain a certain, as yet undetermined, percentage of local content.

For smaller producers, including homeowners, the government will offer zero or low-interest loans to build a small-scale renewable project — like rooftop solar panels or micro wind turbines.

The government will also amend building codes for new construction, mandate more efficient appliances and set the stage for electric cars.

Note:

In Victoria, the Real Estate Board is in discussion with the Municipality of Oak Bay to be the first pilot project for mandatory energy audits for home sales in Greater Victoria.

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Minister of Natural Resources speaks to VREB

Yesterday I was invited, as part of the Green Task Force, to attend the talk given by Federal Minister of Natural Resources, Lisa Raitt at the Victoria Real Estate Board. She is a charming, intelligent woman, originally from Cape Breton Island, with a law degree from Osgood Hall, and a young family. The main focus of her talk was to communicate specific items from the budget that relate to Vancouver Island (wood for example). She mentioned that 200,000 home owners are expected to participate in the federal home energy efficiency upgrade grants, and the economic benefit this will have.

See this article from the Times Colonist:

Renovation tax credit may be a 'good incentive'

Homeowners and builders welcome incentive

By Andrew A. Duffy, Times Colonist, January 31, 2009

Natural Resources Minister Lisa Raitt helps drill a hole in the concrete basement wall of Paul Mondor's home yesterday.

Photograph by: Debra Brash, Times Colonist

A tax credit of up to $1,350 is unlikely to convince homeowners to plan a renovation, but according to one busy local contractor, if a new roof or extension was already top of mind, that new tax credit might just nudge the project forward despite an economic downturn.

"Whether this is enough to push people forward, who knows?" said Doug Downs, owner of Eagleye Restoration and Construction, standing in the basement of a Maplewood home reno he is overseeing. "Obviously, if you are not planning a renovation you are not going to run out and do it for $1,350, but if you were planning one, then you can actually use that money."

Included as part of federal Finance Minister Jim Flaherty's $40-billion stimulus package introduced earlier this week, the Home Renovation Tax Credit gives homeowners a credit of 15 per cent on renovations between $1,000 and $10,000, to a maximum of $1,350.

Projects undertaken by Feb. 1, 2010, can be claimed on a 2009 tax return. The federal government estimates the program will cost $3 billion over two years, and 4.6 million families will take advantage of it.

Downs said he expects Canadians won't simply pocket the tax credit, but will inject that little bit extra into the system.

"I think most people will spend a bit more, use it or upgrade something -- it's a good incentive," he said. "You'll see people using the money for what it's intended. There are people who want to do things green but that costs more, so maybe they will use the money for that."

Homeowner Paul Mondor said every little bit helps.

He has hired Eagleye to do a $60,000 to $70,000 renovation on his existing home near Cedar Hill Cross and Reynolds roads while the company builds a new home at the rear of the property.

"I think it's fantastic -- a lot of people were looking forward to this," he said, noting he will certainly take advantage of it as he is likely eligible to claim the maximum amount. "More is always better, but it's a heck of a lot better than nothing and it gives some encouragement to do something."

That was likely music to the ears of Natural Resources Minister Lisa Raitt, who toured Mondor's renovation site yesterday.

Raitt had been in the city to speak with the Victoria Real Estate Board and Greater Victoria Chamber of Commerce to promote awareness of the tax credit and the government's $300-million infusion of cash into home energy retrofits.

"They are the two key parts of this economic action plan because it helps people save money long-term [by reducing] the costs of operating their houses, and it puts the economy in the hands of smaller contractors, making sure we have people working and have the economy moving," she said, having tried her own hand at drilling into Mondor's basement wall.

Raitt said the government is also working on reducing the red tape that has held up some "shovel-ready" projects.

"We will see quick turnaround on these projects," she said. "It doesn't do anyone any good if we announce a project and it doesn't get going. The time is now for the economy to move, not 18 months from now."