October 7, 2015
Do You Have “Recalled” Products in Your Home?
You’ve no doubt noticed the occasional news report about a product being
recalled for safety reasons. For example, a car model with a brake problem,
or a children’s toy that, under some circumstances, may cause injury.
You may not know that these news reports are merely the tip of the iceberg.
For each product recall you hear about in the media, there are dozens that
get little, if any, publicity.
That means there may be products in your home that have been recalled —
and you don’t even know about it. It’s a scary thought.
How do you find out about recalled products that may affect you? Here are
1. Always complete the registration that comes with many products.
This is typically done by mailing in a registration card or filling out an
online form. When you register, you’ll be alerted by the manufacturer
if the product is recalled for any reason.
2. Both Canada and the United States have agencies that list recalled
products on their websites. In Canada it’s the Healthy Canadians
website at www.healthycanadians.gc.ca. In the United States it’s the
Consumer Product Safety Commission at www.CPSP.gov. It’s a
good habit to check these sites every season.
If you discover that a product in your home has been recalled, contact the
manufacturer immediately. Never assume that the reason for the recall
won’t apply to you.
October 6, 2015
What Buyers Don’t Want to See in Your Backyard
When you put your home up for sale, you want it to look its best to potential
buyers. That’s why you clean, tidy and de-clutter every room.
Some sellers, however, miss the backyard. You need to pay just as much
attention to that space as you do to the interior of your home. The backyard
is as important a living space as the family room. To some buyers, even
Buyers want to see an attractive backyard space, with the grass cut and the
hedges trimmed. The more neat and tidy you can make it, the better. Be
sure to sweep walkways and wipe down patio furniture.
Also, watch out for the following things that buyers do not want to see:
• Bags of garage and other waste.
• Doggie do-do. (Be sure to stoop and scoop!)
• Rakes and other tools piled in the corner.
• Cluttered and disorganized storage sheds, pool huts and other
• Weeds in the flower beds.
• Items stored underneath the deck.
• Hoses not stowed neatly.
• Electrical outlets and water faucets that don’t work.
These are not difficult issues to fix. Doing so will positively impact the
impression the buyer gets of your backyard.
Do you have a backyard that shows particularly well in the summer? Here’s
a tip: Take pictures. Those photos will help buyers be able to appreciate
how it looks should you list your home in the winter.
Want more tips on making your home show well so that it sells fast? Call
September 26, 2015
How to Deal with a Low-Ball Offer
“You will never find time for anything. If you want time you must make it.” Charles Buxton
“Ask yourself your secret of success. Listen to your answer, and practice it.” Richard Bach
“Things turn out best for the people who make the best of the way things turn out.” John Wooden
Not intended to cause or induce the breach of, cancellation of, assignment of, or to interfere in any way with the existing agency agreement of another REALTOR®.
If you take care to price your home correctly —
that is, at a price that is in line with what similar
properties in the area have sold for recently —
then you have a good chance of selling it at or
near your asking price.
That doesn’t mean you won’t get a low-ball offer.
You might. So what do you do when that happens?
First, understand that the buyer may not
necessarily be trying to steal away your home at a
bargain-basement price. He might simply be
mistaken about its true market value. Of course,
he might also be coming in at a low price in the
hopes he’ll get lucky.
You will never actually know the buyer’s motives.
So it would be a mistake to get angry or dismiss
the offer out-of-hand. That low-ball offer might
end up being the beginning of a negotiation that
results in you selling your home at a good price.
Your first step is to work with your REALTOR® to
• How serious the buyer is.
• How qualified the buyer is. (For example, does
he have a pre-approved mortgage?)
• How amenable the buyer is to a counter-offer
that reflects the true market value of
• What that counter-offer should be.
This isn’t an easy process. It takes knowledge
and experience to get it right. That’s why working
with a good REALTOR® is essential.
Looking for a REALTOR® who is an expert at this
stuff? Call today.
If you see a haze of condensation on
your window, should you be
concerned? Maybe. Maybe not. It
depends on a number of factors.
First of all, an occasional build-up
of condensation is normal and
often the result of fluctuating
humidity in the home. Usually, it’s
nothing to worry about. If you’re
using a humidifier, try adjusting the
levels. If the humidity is being
generated naturally, try placing a
dehumidifier nearby. Also, remove
any plants and firewood from the
area, as they can release a
surprising volume of moisture into
Do you see moisture in between the
panes of glass that make up the
window? If so, that means the seal
has failed and moisture has crept in.
Double and triple pane windows
often contain a gas (argon, for
example) that boosts the insulating
qualities of the window. When the
seal fails, the gas disappears, making
the glass colder and often allowing
condensation to creep in. Eventually,
you’ll want to get it replaced.
If you see moisture build-up
anywhere on the frame of the
window, particularly at the joints,
that could be a sign of water leaking
through. That’s an issue you should
get checked out immediately by a
Concerned about Condensation on Windows?
Think, Act... Live!
August 15, 2015
Elevated Home Sales Point to Strong Consumer Confidence
Vancouver, BC – August 13, 2015. TheBritish Columbia Real Estate Association (BCREA) reports that a total of 10,247 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in July, up 20.7 per cent from the same month last year. Total sales dollar volume was $6.2 billion, a 33.9 per cent increase in comparison to the previous year. The average MLS® residential price in the province rose to $608,294, an 11 per cent increase since last July.
“Consumer confidence is brimming in the fastest growing economy in the country,” said Cameron Muir, BCREA Chief Economist. “Broad-based consumer demand continues to push BC home sales higher in every region except the more resource dependent northern markets.”
“Tighter market conditions are driving home prices higher as supply struggles to keep up with demand,” added Muir. The Fraser Valley experienced the strongest average price growth, climbing 13.5 per cent year-over-year to $571,700 on the strength of strong demand in the single-detached market.
The year-to-date, BC residential sales dollar volume increased 36.4 per cent to $38.8 billion, when compared with the same period in 2014. Residential unit sales climbed by 22.7 per cent to 61,806 units, while the average MLS® residential price rose 11.1 per cent to $628,025.
July 14, 2015
BC Home Sales Post Second Strongest June on Record
Vancouver, BC – July 14, 2015. TheBritish Columbia Real Estate Association (BCREA) reports that a total of 11,294 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in June, up 25.6 per cent from the same month last year. Total sales dollar volume was $7.1 billion, a 42.6 per cent increase in comparison to the previous year. The average MLS® residential price in the province rose to $631,962, a 13.5 per cent increase since last June.
“BC home sales posted the second strongest June on record,” said Brendon Ogmundson, BCREA Economist. “A growing provincial economy and record low borrowing rates continue to push demand higher, particularly in the lower mainland.”
“While consumer demand is surging, the supply of homes for sale has not kept pace. The resulting imbalance of supply and demand has put upward pressure on prices in many areas of the province, most notably with respect to single-detached homes,” added Ogmundson.
Year-to-date, BC residential sales dollar volume increased 36.8 per cent to $32.6 billion, when compared with the same period in 2014. Residential unit sales climbed by 23.1 per cent to 51,559 units, while the average MLS® residential price rose 11.2 per cent to $631,946.
April 16, 2015
BC Home Sales Post Strongest March in Eight Years
BC Home Sales Post Strongest March in Eight Years
Vancouver, BC – April 16, 2015. The British Columbia Real Estate Association (BCREA) reports that a total of 9,101 residential unit sales were recorded by the Multiple Listing Service® (MLS®) in March, up 37.6 per cent from the same month last year. Total sales dollar volume was $5.8 billion, an increase of 57.1 per cent compared to a year ago. The average MLS® residential price in the province rose to $641,799, up 14.1 per cent from the same month last year.
"BC home sales climbed significantly in March," said Cameron Muir, BCREA Chief Economist. "More homes traded hands last month than any March since 2007. On a seasonally adjusted basis, March posted the most home sales of any month since December of 2009."
"Rock bottom interest rates and rising consumer confidence have strengthened housing markets in most regions of the province, added Muir. "Many board areas are now exhibiting sellers' market conditions with home prices advancing well above the overall rate of inflation."
During the first quarter, BC residential sales dollar volume was up 33.2 per cent to $12.7 billion, compared to the same period last year. Residential unit sales were up 22.5 per cent to 20,139 units, while the average MLS® residential price was up 8.7 per cent at $630,435.
May 13, 2014
Record Low Mortgage Rates Push Home Sales Higher
Vancouver, BC – May 13, 2014. The British Columbia Real Estate Association (BCREA) reports that a total of 7,730 residential sales were recorded by the Multiple Listing Service® (MLS®) in April, up 12 per cent from April 2013. Total sales dollar volume was $4.3 billion, an increase of 19 per cent compared to a year ago. The average MLS® residential price in the province rose to $561,613, up 6.3 per cent from the same month last year.
"BC home sales trended higher in April as the typically robust spring market unfolds,” said Cameron Muir, BCREA Chief Economist. “Rising consumer demand coupled with fewer homes for sale has most BC housing markets now exhibiting balanced conditions, where neither buyers nor sellers have any particular advantage."
"Housing affordability improved last month as intensifying completion for new business by financial institutions pushed the posted five-year fixed mortgage rate to a record low of 4.79 per cent” added Muir.
During the first four months of the year, BC residential sales dollar volume was nearly 28 per cent to $13.9 billion, compared to the same period last year. Residential unit sales were up 18 per cent to 24,165 units, while the average MLS® residential price was up 8.3 per cent at $573,965.
March 14, 2014
February Home Sales Edge Lower
Vancouver, BC – March 14, 2014. The British Columbia Real Estate Association (BCREA) reports that a total of 5,578 residential sales were recorded by the Multiple Listing Service® (MLS®) in February, up 24.9 per cent from February 2013. Total sales dollar volume was $3.4 billion, an increase of 43.1 per cent compared to a year ago. The average MLS® residential price in the province rose to $611,688, up 15.4 per cent from the same period last year.
"Consumer demand was much stronger in February compared to a year ago, but edged lower compared to January,” said Cameron Muir, BCREA Chief Economist. “Weak employment growth in 2013 has limited home sales so far this year to long-term average levels."
"Record low mortgage interest rates and population growth continue to underpin the housing market and most regions of the province are at or near balanced market conditions,” added Muir.
Year-to-date, BC residential sales dollar volume was up 10.1 per cent to $36.7 billion, compared to the same period last year. Residential unit sales were up 6 per cent to 68,510 units, while the average MLS® residential price was up 3.8 per cent at $535,411
February 14, 2014
Strongest January Residential Sales Since 2010
Muted Impact Expected From Cancelled Investor Immigrant Program
Vancouver, BC – February 14, 2014. The British Columbia Real Estate Association (BCREA) reports that a total of 4,244 residential sales were recorded by the Multiple Listing Service® (MLS®) in January, up 24.5 per cent from January 2013. Total sales dollar volume was $2.4 billion, an increase of 36.8 per cent compared to a year ago. The average MLS® residential price in the province rose to $565,036, up 9.9 per cent from the same period last year.
"Residential sales activity in the province posted the strongest January since 2010,” said Cameron Muir, BCREA Chief Economist. “Consumer demand has recovered from last year’s lower levels and is now trending at the long-term average.” The ten-year average for January is 4,276 unit sales.
"Stronger economic conditions are expected to underpin a modest uptick in home sales later this year,” added Muir.
The demise of the federal Immigrant Investor Program is expected to have little impact on the Metro Vancouver housing market. “The only impact we foresee is less pressure on the inventory of detached homes in Vancouver’s West Side, Richmond and West Vancouver,” said Muir.
The number of investor immigrant landings peaked at 5,876 in 2008 before declining to just 2,644 in 2012, with a similar number expected for 2013. These numbers include spouses and dependents. The total number of added households is estimated to be between 900 and 1,000 per year since 2011
January 21, 2014
3 Bed room and den condo in Steveston Village, Richmond B.C.
The Village in Steveston, 3 Bedoom + Den
208 - 4211 Bayview St, Richmond, BC V7E 6T6
Bright, clean, spacious 3 bedroom and den in the heart of Steveston. Room for the family/grandkids here. Open floor plan with lots of windows, high end kitchen finished with granite counter tops and stainless steel appliances with gas range. The large covered deck overlooks the courtyard and the unit has a East and North exposure. Close to transit, both levels of schools and just steps to the waterfront boardwalk and the village shops. 2 pets are allowed and rentals are also allowed.
Asking Price: $620000
Sq. Feet: 1373
Subdivision: The Village
Year Built: 2006
For pictures click below
Dir (604) 727-5385
Team 3000 Realty
October 27, 2013
BC Home Sales on Upward Trajectory
Vancouver, BC – October 15, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 6,498 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during September, up 43.2 per cent from September 2012. Total sales dollar volume was 55.7 per cent higher than a year ago at $3.49 billion. The average MLS® residential price in the province was $537,458, up 8.8 per cent from September 2012.
"Consumer demand for housing in September was the strongest in four years,” said Cameron Muir, BCREA Chief Economist. “After declining for most of 2012, BC home sales have increased now for seven consecutive months."
"While a return to a more normal level of demand is good news for buyers and sellers, relatively weak economic conditions and muted provincial job growth will likely limit continued acceleration of home sales over the next few quarters,” added Muir.
Year-to-date, BC residential sales dollar volume was up 5.7 per cent to $30 billion, compared to the same period last year. Residential unit sales were up 3.1 per cent to 56,347 units, while the average MLS® residential price was up 2.6 per cent at $532,745.
August 14, 2013
July Home Sales Highest Since 2007
Vancouver, BC – August 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 7,650 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC for July, up 18 per cent from July of 2012. Total sales dollar volume was 32.8 per cent higher than a year ago at $4.09 billion. The average MLS® residential price in the province was $534,360, up 12.5 per cent from July 2012.
"Home sales in the province posted their strongest July since 2007,” said Cameron Muir, BCREA Chief Economist. “After six consecutive months of rising consumer demand, it’s now clear that BC housing markets are recovering from tighter lending regulations introduced last year,” added Muir.
"Rising home sales are unlikely to put any significant upward pressure on home prices,” cautioned Muir, “as the inventory of homes for sale is expected to keep pace with demand.” Many potential home sellers that have been holding off for improved market conditions are expected to put their homes on the market to meet the swelling ranks of home buyers.
Year-to-date, BC residential sales dollar volume was down 2.8 per cent to $22.9 billion, compared to the same period last year. Residential unit sales were down 4 per cent to 42,986 units, while the average MLS® residential price was up 1.3 per cent at $531,928.
May 15, 2013
Housing Market Conditions Improve on the South Coast
Vancouver, BC – May 15, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 6,904 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during April, up 1.9 per cent from March on a seasonally adjusted basis, but down 2.2 per cent compared to April 2012. Total sales dollar volume declined 3 per cent to $3.65 billion. The average MLS® residential price in the province was $528,507, down 0.8 per cent from a year ago.
"BC home sales trended higher again in April, with seasonally adjusted unit sales now 8 per cent higher since the beginning of the year," said Cameron Muir, BCREA Chief Economist. "Market conditions were at or near balanced conditions in Victoria, Vancouver, the Fraser Valley and the North last month, leading to a firming up of home prices." The MLS® Home Price Index edged up 0.7 per cent over the past month in the Lower Mainland, and 1.5 per cent over the past three months.
Year-to-date, BC residential sales dollar volume was down 16.6 per cent to $10.8 billion, compared to the same period last year. Residential unit sales dipped 13.9 per cent to 20,476 units, while the average MLS® residential price was down 3.1 per cent at $529,785.
For more information, please contact:
||Director of Communications and Public Affairs
BCREA represents 11 member real estate boards and their approximately 18,000 REALTORS® on all provincial issues, providing an extensive communications network, standard forms, economic research and analysis, government relations, applied practice courses and continuing professional education (cpe).
To demonstrate the profession's commitment to improving Quality of Life in BC communities, BCREA supports policies that help ensure economic vitality, provide housing opportunities, preserve the environment, protect property owners and build better communities with good schools and safe neighbourhoods.
For detailed statistical information, contact your local real estate board. MLS® is a cooperative marketing system used only by Canada's real estate boards to ensure maximum exposure of properties listed for sale.
To subscribe to receive BCREA publications such as this one, or to update your email address or current subscriptions, click here.
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April 23, 2013
Get ready condo flippers, Canada Revenue Agency is hunting you
You just sold your condo, you made a hefty profit and know you have to pay your taxes.
The bill might be more than you think.
If it’s your principal residence, there’s no tax, as long as you have the paperwork to prove it. The Canada Revenue Agency is taking a closer look at the condominium sector in what some in the industry have dubbed the “Condo Project.”
You might want to think very carefully about how you record that housing sale you made in 2012
Let’s say your gain is $100,000 and your tax bracket is 46%. Capital gains are taxed at 50% so you would only owe $23,000 on that profit.
Not so fast! If the CRA says you are in the business of flipping condominiums, get ready to pay based on the gain being counted as income for a tax bill of twice the amount at $46,000. And, it gets worse. You could also face a fine of up to 50% of the tax owed for making a false disclosure.
With the deadline for filing taxes coming up April 30, you might want to think very carefully about how you record that housing sale you made in 2012.
Sam Papadopoulous, senior public affairs advisor-manager with CRA’s Ontario region, acknowledges that the strength of the condo sector has attracted the attention of the taxman.
“We do from time to time target some sectors more closely than others,” he said. “We look at the real estate market in general. Of course, [there is more focus], it’s a hot market.”
People in the industry have a different view.
Some suggest it fits in with the recent budget when Jim Flaherty, the finance minister, announced his government was taking a closer look at loopholes and tax cheats — hoping to shrink its deficit in the process.
One of the issues attracting the attention of the CRA is assignment clauses, where one person agrees to purchase a condo before it is built but ultimately sells his or her right to buy that condo before the building is even registered.
Builders usually collect a fee for that privilege but ultimately when title is registered at the land registry office the original purchaser’s name is nowhere to be found.
While most builders are unlikely to voluntarily supply a list of properties in their building that were assigned, they could be forced to cough it up if they are audited by the CRA.
Those people who have assigned their units to another buyer are going to be hard pressed to prove they planned to use the unit as an investment property rather just flipping — meaning the CRA is highly unlikely to allow them to count money made at the lower capital gains rate.
“If you keep [assigning property] then it is not capital gains, that’s trade and that’s income,” said Mr. Papadopoulous, adding you do it a “couple of times” and it’s income. “Of course, that’s part of [what they are investigating].”
The warning to people flipping property and thinking they can get away without reporting the gain is pretty clear.
“We live in the information technology age,” said Mr. Papadopoulous, who wouldn’t get into how CRA is tracking down the tax evaders. “We are putting our resources to work and following the trail where we can.”
The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold
Robert Kepes, a Toronto tax lawyer at Morris Kepes Winters, said he’s seen the CRA go after people who have been living in a property and still question it as a principal residence.
CRA starts with a letter to a taxpayer asking them for details about when and why they sold their property and people often fill out the questionnaire without legal advice.
The issue goes all the way back to 1971 when there was no tax at all on capital gains so everybody tried to avoid counting gains as income.
Mr. Kepes says the distinction between income and capital is as simple as the difference between a tree and the fruit that it bears.
The tree is capital and it produces a fruit and the income is the profit that is derived when that fruit is sold,” he says.
If your condo is that tree and your rental income is the fruit and you make a profit from that rental income, that’s taxed as full income. You eventually sell the tree for more money and that’s just a capital gain, taxed at the 50% rate.
If your entire businesses is just trading trees and not producing fruit, that’s business income.
“The Income Tax Act asks what was your intention when you bought that condo,” said Mr. Kepes. “These principles are easy to describe but harder to prove in fact.”
If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence
The law is like a civil case, a judge doesn’t have to believe you beyond a reasonable doubt, but a judge does have to conclude you are more believable than the CRA.
“We have to bring all kinds of intrinsic evidence,” says Mr. Kepes, noting some clients will produce something as simple as a change in address on their driver’s licence to show they were using their condo as a principal residence.
If you never actually moved into the condo, it’s going to be tough to prove that it was principal residence.
You may never have produced income from the profit but that’s not to say you didn’t plan to, so perhaps you could get the capital gains exemption.
“The question can be ‘how did they come to sell the property,’” said Mr. Kepes, adding the CRA might look at whether you were advertising the property for sale.
Brian Johnston, chief operating officer of Mattamy Corp., says the CRA has ways to get information on sales.
“They audit real estate companies, look at the name on the contract and look at the final deed and see a difference,” said Mr. Johnston. “They see Bill Smith bought it and Joe Blow is on the deed. They want to know how this happened and follow the paper trail.”
He has some sympathy for consumers confused about the whole process.
“I think the government should make it a little simpler in terms of filing for principle residence exemption,” said Mr. Johnston. “It’s a real gray area of the law. The government has not done a good job for Canadians trying to specifically identify all the rules around [selling homes and paying taxes]. People might have inadvertently made mistakes.”
Condominium developer Brad Lamb, who has been audited several times, said ultimately it’s better to be more conservative when you’re filing — meaning just count the gain as income if you are in doubt.
“If you are prolific buyer or seller of properties, whether it’s condos or not, you have to govern yourself accordingly. If you don’t, you’ll get caught and be fined,” said Mr. Lamb. “I decided many years ago when I started buying condominiums, after talking with my accountant, you can pay [lower tax] or you can fight 50 years with Revenue Canada.”
March 14, 2013
Home Sales Continue at Modest Pace: Pent-Up Demand Growing
Vancouver, BC – March 14, 2013. The British Columbia Real Estate Association (BCREA) reports that a total of 4,501 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during February, down 23.6 per cent compared to February 2012. Total sales dollar volume was down 29.9 per cent to $2.39 million. The average MLS® residential price in the province was $514,134, up 3.1 per cent from January, but down 8.1 per cent from a year ago.
"BC home sales continued at a modest pace in February,” said Cameron Muir, BCREA Chief Economist. “Despite improved affordability, many potential buyers and sellers remain in a holding pattern. With pent up demand now becoming latent in the market, it’s not a matter of if, but when home sales rise above their current pace."
“An unusual spike in the average MLS® residential price in February 2012 is largely responsible for the year-over-year percentage change,” added Muir. “Most BC markets have experienced relatively stable price levels during the first two months of the year.”
Year-to-date, BC residential sales dollar volume declined 24.6 per cent to $4.1 billion, compared to the same period last year. Residential unit sales dipped 19.6 per cent to 7,911 units, while the average MLS® residential price was down 6.2 per cent at $523,117
March 7, 2013
Canadian Building Permits - March 7, 2013Copyright British Columbia Real Estate Association. Reprinted with permission
Canadian building permits rose 1.7 per cent in January, following an 11 per cent decline in December. Higher building permits in the residential sector offset a decline in non-residential permits.
BC posted a 10.9 per cent increase in construction intentions compared with December 2012, and a 4.5 per cent increase over January 2012. Residential permits rose nearly 16 per cent over December while non-residential permits dipped 2 per cent lower.
Permit activity in BC's four major metropolitan areas was varied in January. Construction intentions in the Kelowna CMA fell by nearly half from a relatively high level in December but were up 63 per cent over January 2012. Permit values were 14 per cent lower month-over-month in the Abbotsford CMA but rose nearly 25 per cent in the Vancouver CMA and 44 per cent in the Victoria CMA
Copyright British Columbia Real Estate Association. Reprinted with permission
March 4, 2013
Foreclosed Properties By CMHC
It’s Now An Optional Disclosure By Quebec Realtors
Financial Post revealed that CMHC had been asking Quebec Realtors to keep quiet about whether the home being sold is a foreclosure, disclosure normally considered mandatory. Quebec Federation of Real Estate Boards which oversees 12 real estate boards in the province, eventually agreed the Crown corporation reached a compromise with the Quebec Realtors to leaves it up to the real estate professional to decide whether to put that fact on the MLS system for buyers, including investors, to see.
Why the new ruling?
The CMHC stance has industry experts divided, with some wondering whether the corporation is hoping to dodge low-ball offers by avoiding disclosure, or preparing for a housing market collapse.
For investors and buyers, not knowing a deal is a foreclosure can make the difference between offering market price or going in with a low offer many buyer for a distressed property. When CMHC takes over the responsibility of recovering money loaned to a home owner who defaulted on his or her loan is determined by the financial institution that issued the loan and CMHC.
How most banks deal with their foreclosed properties now?
When a bank takes over a loan in default through a power of sale or foreclosure, the process is very formal and a process is in place how the property is disposed. First, three appraisals or evaluations are done to establish the value of the property. The property is listed on the mls system indicating the bank as the owner of the property. When an offer is submitted which falls within 5% of that value, a date is booked to deal with the sale through the court. If no offer is forth coming after a period of time the bank might drop the list price by 5% and then wait for an offer within 5% of the new list price.
Any low ball offers below the 5% listing price will not trigger an acceptance by the bank. This process safeguards the sale and disposal of the foreclosed property below the price expectation of the bank. An investor or home buyer can submit a low ball offer, but they will be just wasting their time and energy.
Loaming danger faced by CMHC
In today’s market when home prices are down by 10% or more, CMHC has on it’s book many properties that are worth less than their loan values. CMHC is in danger of holding thousands of properties and tens of millions in potential losses if home owners default on their loans. CMHC’s concern is on too many foreclosed properties undermining the value of all the other properties which they are guaranteeing under their insurance program.
February 28, 2013
BC Proposes Community Safety Act in Legislature
On February 21, Minister of Justice and Attorney General Shirley Bond tabled the Community Safety Act in the legislature. If passed, it will enable people to submit confidential complaints to a new provincial unit charged with investigating, mediating and working with property owners to curb various threatening and dangerous activities. The bill targets the sites of specific criminal and nuisance activities, including drug production and trafficking, prostitution, unlawful liquor sales, child abuse, possession of unlawful weapons or explosives, and activities conducted by or on behalf of gangs and organized crime.
February 8, 2013
Home sales slow to near historic levels in Fraser Valley as buyers watch and wait from the sidelines
A total of 617 sales were processed through the Fraser Valley Real Estate Board’s Multiple Listing Service (MLS®) in January, a decrease of 23 per cent compared to 799 sales during the same month last year. January 2013 ranks as the second slowest for that month in the last thirteen years, second only to January 2009 during the global recession.
Scott Olson, president of the board, says there is a distinction between what REALTORS® saw four years ago compared to today. “People want to buy. We’re already seeing early signs of a typical spring market with more foot traffic at open houses and an increase in calls.
“Buyers have been holding off in hopes that prices will drop more, however it’s become clear that sellers are only willing to go so far. Prices for typical homes in the Fraser Valley have decreased by only two to three per cent in the last six months and in January we’re starting to see a reversal of that – in half of our communities prices have crept back up.”
Olson suspects the market stalemate may be coming to an end. “The number one reason people buy a home is a lifestyle decision – you need a bigger home, a smaller one, closer to work or school – so when the right home comes along you can only wait so long.
“With interest rates as low as they are, our local economy as strong as it is and prices so tenacious I think we’ll see the effects of this pent-up demand and a return to more balance in the market.”
In the last six months, prices for all three residential property types combined have decreased by 2.5 per cent while year over year they’re on par, showing an increase of 0.7 per cent. Of the three property types, prices of single family detached homes have been the most resilient, increasing 1.5 per cent in the last year going from $532,700 in January 2012 to $540,500 last month.
For townhouses, the benchmark price in January was $293,700, a decrease of 2.0 per cent compared to $299,800 during the same month last year. The benchmark price of apartments in Fraser Valley in January was $200,400, an increase of 1.2 per cent compared to $198,000 in January 2012.
REALTORS® added 2,643 new listings in January, 4 per cent fewer than the same month last year. This decreased the number of properties available in the Fraser Valley to 8,031, a decrease of 3.5 percent compared to January 2012. By historical comparison, January 2013 ranks as the third highest in terms of active listings in the last decade
February 7, 2013
Crucial bit of missing information may be driving Canadian home prices
TAVIA GRANT, The Globe and Mail
Canada’s housing market is a bubble about to burst in some cities, or in the midst of a soft landing. Either way, a crucial piece of information on just what’s driving the market is missing in action
Unlike in other countries such as the United States and Australia, neither the Canadian federal government nor industry keeps track of the numbers of foreign buyers or where they come from. Anecdotal evidence about foreign buyers abounds, yet hard evidence is lacking.
It’s a crucial bit of missing information. Understanding what’s sparking demand in real estate can offer insights into the health of the market and what’s driving prices, and to better predict cycles – by knowing, for example, how a slowdown in China’s economy might affect local markets.
It can also help politicians make wiser decisions about the sector, such as whether restrictions may be needed if speculation becomes too high.
“It’s very hard to have a policy debate about what we should do when we don’t really know what’s going on,” said Tsur Somerville, director of the University of British Columbia’s centre for urban economics and real estate.
On a quiet leafy street north of Toronto, Mr. Zhang – who asked that his full name not be used – taps the walls and inspects the furnace of a $2.68-million home.
He’s got five days in the city to make his decision. This five-bedroom house, with Jatoba cherry wood floors and a home theatre, is a little over his $2-million budget, but he’ll see half a dozen others this week before making a selection.
He’s looking to buy because his 15-year-old daughter will be attending private school in Canada later this year. The owner of a steel business in Beijing has applied to immigrate to Canada, and figures he may as well purchase a home now.
“Canada is a beautiful country. It is good for living, for higher education and it is not that populated,” said Mr. Zhang, who ultimately bought a $2.2-million home in Oakville, Ont.
Rumours are rife about foreign buyers. In Toronto, Russian and Iranian buyers, flush with cash, are snapping up condos. In Vancouver, Chinese investors are buying luxury apartments. In the Maritimes, wealthy Americans and Europeans are acquiring coastal vacation property.
Estimates of the level of foreign buying are all over the map. In the Toronto and Vancouver markets, they can range from 3 per cent to – in some pockets of the condo market – upward of 60 per cent.
Debate percolated last year about whether Canada should place restrictions or slap fees on non-residents who buy property in the country. But “we definitely had policy recommendations in advance of knowledge,” Mr. Somerville said.
Published stats would help analyze ebbs and flows of demand, occupied units versus vacant ones, and the dynamics of over-supply – how foreigners factor in to the equation of household formation to new construction.
Shifts in the housing market can have huge spillover effects on the broader economy, on everything from retail sales to employment and the building of new shopping malls.
And yet, “we’re missing quite a meaningful part of housing activity in this country,” said Sherry Cooper, chief economist at Bank of Montreal.
Canada’s housing market has boomed since the recession, until lately. Without knowledge of the source of buying, Ms. Cooper said, “we have difficulty assessing just how sticky this money is, how vulnerable we might be to international capital flow changes, or what are the fundamentals that determine what has been extraordinary building and buying in our major cities.”
Canadians, meanwhile, are flocking to the U.S. market, snapping up holiday homes in the sun. They are now, by far, the biggest bunch of foreign buyers of American real estate.
Just how do we know this? Each year, the National Association of Realtors publishes a study on international buying activity in the U.S. It shows who the biggest buyers are, the fastest-growing nationalities of buyers (Canada, China), where they’re buying (Florida, California), why (bargain vacation homes!) and how levels of foreign buying change from year to year.
The industry has collected this info for more than five years, gleaned from questionnaires and followup emails to 50,000 real-estate agents. It’s valuable information for the public, government officials – and the industry itself, helping realtors better understand their markets, says Jed Smith, the association’s Washington-based economist.
Australia, for its part, tightened its rules in 2010 to ensure that investment in its market by foreign non-residents “doesn’t place pressure on housing availability for Australians.”
In London, U.K. property broker Savills asks its clients about their nationality and why they’re buying. Its latest report shows foreigners now comprise a third of buyers of prime residential properties, up from a quarter in 2007. It also found the biggest buyers are Western Europeans It’s a contrast to Canada. CMHC does not monitor or compile data on foreign investors. Its mortgage loan insurance isn’t available for foreign buyers, meaning someone outside the country would need a down payment of at least 20 per cent, and have to get conventional financing . The Canadian Bankers Association doesn’t keep data on this. Nor does the Canadian Real Estate Association. The Bank of Canada doesn’t track it, though Governor Mark Carney has noted that heavy investor demand – much of it foreign – “reinforces the possibility of an overshoot in the condo market in some major cities.”
He has implied that the bank could compile data if it chose to. “We have, through partners, access to all mortgage insurance transactions and all real estate, effectively all real estate transactions, the residency of those transactions, and we can do deeper drills in various areas, if we wish, to establish that.”
As for the federal government, Finance Minister Jim Flaherty told The Globe and Mail last April that it doesn’t have a good handle on the amount of foreign money in the country’s housing market. “It’s mainly anecdotal, so I don’t have a statistical grasp of it, no,” he said, adding that he hears about lots of people in emerging economies paying cash for condos in Toronto and Vancouver .
Monitoring foreign buying in Canada poses challenges. Some buyers purchase homes through local family or a lawyer’s office, so on paper they appear to be living in the country. Plus there may be privacy concerns around asking buyers where they come from or why they’re buying.
Still, Lawrence Kobescak, mortgage agent at Ontario Mortgage Superstore.com, is among many who’d like more clarity on the trends. “Without a clear picture of foreign ownership in the residential market in Canada, we cannot predict the impact shifting foreign investor sentiment may have on the Canadian housing market,” he said.
For example, it’s tough to gauge whether Canada’s hot market since 2008 partly stemmed from a flight to security by foreign investors. Conversely, a global recovery could spur interest rate hikes, put the squeeze among foreign investors’ returns and cause them to retrench. “Without accurate statistics of foreign ownership of residential properties in 2008 and in 2012, we would only be guessing.”
International interest in Canadian property is unlikely to abate any time soon. Volatile stock markets and Canada’s reputation for economic stability are luring investors. So are housing prices that are still lower than other major global centres. And, unlike many countries such as Australia and Switzerland, foreigners face no restrictions on home buying.
Interest in Canadian residential real estate among foreign buyers has been steady in recent years, with particular interest from Asia, says Luis Lopez, head of business development, credit, international private banking for RBC Wealth Management. “The investment dollars are coming here and we are seeing them stay here, it is not for the short term,” he said. adding that “much remains to be seen” on how China’s slowdown will affect real-estate markets in Vancouver and Toronto .
There’s also more wealth sloshing around, looking for a safe place to park. Globally, 175,000 people crossed the millionaire threshold last year, led by growth in emerging markets like China and India, according to Boston Consulting. In China alone, the number of millionaires hit 1.4-million in 2011 from 1.2-million the year before, and that number will keep growing “strongly” in the coming years, it said. Investors from mainland China tend to see Canada as one of the top destinations for real-estate investment, according to real estate services provider Colliers International.
“Most Mainland Chinese investors buy properties in Canada because their children study there,” said Derek Lai, director of international properties, last year. “Now we also witness an emerging trend of younger buyers, such as Chinese students, purchasing bigger apartments or luxury properties.”
Foreign appetite for Canadian homes will persist, says Michael Adelson, Toronto-based sales rep for ReMax Realtron, who recently represented a seller that sold their bungalow for $421,800 over asking to a foreign buyer.
He has worked in the industry for 25 years, and seen interest from Hong Kong, Korea and Iran flourish. As someone in the industry, he’s happy to see such strong demand. As a citizen, he’s worried some local people might be getting priced out of the market.
“People have recognized this is a relatively cheap country to buy,” he says. “I think it will continue unless they put some controls in place.”
Tony Ma agrees. The agent in Markham, Ont., has hosted several groups of visiting Chinese buyers in recent months alone. They typically buy a house for $1-million or $2-million, either to live or as an offshore investment. Canada’s multicultural communities, affordability and democratic system will continue to lure buyers, he says. “I don’t see this market cooling any time soon.”