The Canadian Press
ST. JOHN’S, N.L. — Delegates from Canada’s 101 local real estate boards Sunday ratified a deal worked out by the federal Competition Bureau and the real-estate industry.
It would allow consumers to choose what services they want from their agent when selling their homes, and to pay for only those services.
The deal was reached after months of negotiations between the competition watchdog and the Canadian Real Estate Association that represents some 100,000 realtors.
The bureau chief was quick to praise the ratification.
“I am pleased that CREA members have voted in favour of this agreement,” said commissioner Melanie Aitken. “For Canadian homeowners, it ensures that they will have the freedom to choose which services they want from a real-estate agent and to pay for only those services.”
Association president Georges Pahud also welcomed the vote.
“We are pleased that after careful consideration and reflection, real-estate boards and associations from across Canada have endorsed the agreement,” Pahud said.
Under the deal, the Canadian Real Estate Association has agreed that its rules as well as those of its members should not deny or discriminate against realtors wishing to offer mere posting services.
The Competition Bureau has been pressuring the association to change rules it calls “anti-competitive” on behalf of realtors and consumers who want more flexible services.
“This 10-year agreement brings a close to a long process of negotiation with the Competition Bureau and will allow CREA and realtors to do what they do best — help people with the biggest financial decision of their lives, buying and selling a home in these challenging economic times,” said Pahud.
But experts say the doors to lower-cost services won’t be thrust open overnight because the industry is dominated by traditional agents who are reluctant to change their business models.
Realtors currently operate on the principle that selling agents will split the standard five per cent commission with the buyer’s agent.
Canadian Real Estate Association members voted on amendments to the organization’s rules in March that were expected to appease the Competition Bureau, but the watchdog took issue with a clause in the amendments that said the changes are subject to the rules of local boards.
The watchdog said it would settle for nothing less than a legally binding agreement so that the association couldn’t change its rules back on a whim.
With Sunday’s ratification, the deal will be legally binding as of today and will remain in effect for 10 years, with hefty penalties for any violation.
Helping you is what I do!
Monday, October 25, 2010
Wednesday, October 20, 2010
Housing boom blamed on subsidies
Garry Marr, Financial Post ·
The federal finance committee got an earful Tuesday from one group not too thrilled with the housing boom — Canadian landlords.
John Dickie, president of the Canadian Federation of Apartment Associations, said at least part of the housing boom over the past decade can be attributed to the government favouring housing over rental accommodation by providing a much larger subsidy.
“There are a number of rules in the current tax system that amount to massive favoritism towards homeowners as opposed to renters,” said Mr. Dickie Tuesday, adding it’s true for all three levels of government.
In Ontario, the group estimates, municipal, provincial and federal governments provide a subsidy of $2,629 per owner-occupied house, compared to $395 per renter.
“There is a perception among politicians that homeowners vote more frequently than tenants,” said Mr. Dickie. “There is perception in society that homeownership is good and should be encouraged.”
Homeownership rates in Canada have climbed steadily over the past decade and are now closing in on about 70% of households, something Mr. Dickie said “pushes it further than it should.”
Federal subsidies include such things as a rebate on the goods and services tax on new homes and the home-renovation tax credit. Capital gains on the sale of a principal residence are also exempt from federal and provincial taxes.
Though it varies by city, homeowners generally pay less property taxes than landlords. In Ottawa, Mr. Dickie said, landlords pay property tax of 1.7% of the value of the home, compared to 1% of the value for homeowners. Condominium owners, who rent out their space, get the residential rate in most municipalities.
He said renters should be concerned about the disparity. “They don’t know they are getting ripped because it’s the owners that cut the cheques.”
Craig Alexander, chief economist with TD Bank Financial Group, said homeownership has long been a goal of Western society.
“There is no question the policy environment provides incentives and support to homeowners,” he said.
But there is a risk subsidizing the sector, he said. “In the case of the United States, one could make the argument that part of what fuelled the housing bubble was oversubsidization of the housing market or maybe just excessive public-policy support for homeownership.
The federal finance committee got an earful Tuesday from one group not too thrilled with the housing boom — Canadian landlords.
John Dickie, president of the Canadian Federation of Apartment Associations, said at least part of the housing boom over the past decade can be attributed to the government favouring housing over rental accommodation by providing a much larger subsidy.
“There are a number of rules in the current tax system that amount to massive favoritism towards homeowners as opposed to renters,” said Mr. Dickie Tuesday, adding it’s true for all three levels of government.
In Ontario, the group estimates, municipal, provincial and federal governments provide a subsidy of $2,629 per owner-occupied house, compared to $395 per renter.
“There is a perception among politicians that homeowners vote more frequently than tenants,” said Mr. Dickie. “There is perception in society that homeownership is good and should be encouraged.”
Homeownership rates in Canada have climbed steadily over the past decade and are now closing in on about 70% of households, something Mr. Dickie said “pushes it further than it should.”
Federal subsidies include such things as a rebate on the goods and services tax on new homes and the home-renovation tax credit. Capital gains on the sale of a principal residence are also exempt from federal and provincial taxes.
Though it varies by city, homeowners generally pay less property taxes than landlords. In Ottawa, Mr. Dickie said, landlords pay property tax of 1.7% of the value of the home, compared to 1% of the value for homeowners. Condominium owners, who rent out their space, get the residential rate in most municipalities.
He said renters should be concerned about the disparity. “They don’t know they are getting ripped because it’s the owners that cut the cheques.”
Craig Alexander, chief economist with TD Bank Financial Group, said homeownership has long been a goal of Western society.
“There is no question the policy environment provides incentives and support to homeowners,” he said.
But there is a risk subsidizing the sector, he said. “In the case of the United States, one could make the argument that part of what fuelled the housing bubble was oversubsidization of the housing market or maybe just excessive public-policy support for homeownership.
Monday, October 18, 2010
September home sales off 20% year-over year
By Tony Wong
The weather is turning cooler – and so are sales in the Canadian housing market.
Canadian home sales were up a seasonally adjusted 3 per cent in September over August, according to the Canadian Real Estate Association in figures released Friday.
However, actual year over year activity in September fell by 19.8 per cent compared with 2009.
And unlike the strong increases in past months, prices are flat lining and back to where they were a year ago. Average prices are now at $331,089, down 0.4 per cent from September 2009.
“Supply and demand are rebalancing, and that’s keeping prices steady in many markets,” said CREA president Georges Pahud.
One thing that’s keeping pricing from dropping further is that new listings remain 15 per cent below the peak reached in April, as some vendors have decided to take their homes off the market.
The seasonally adjusted number of months of inventory, representing the time it would take to sell current stock, is at 6.6 months at the end of September, down from 6.9 months in August.
In the Toronto market, sales are down by 22 per cent in August compared with last year.
One moderating factor is that some banks have eased off on mortgage lending rates, said CREA economist Gregory Klump.
“Interest rates are going nowhere fast, so home ownership will remain within reach for many homebuyers.”
Still, CREA does not expect the latest round of low rates to ignite market demand.
“The continuation of low and stable interest rates is unlikely to cause housing demand to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time.”
The weather is turning cooler – and so are sales in the Canadian housing market.
Canadian home sales were up a seasonally adjusted 3 per cent in September over August, according to the Canadian Real Estate Association in figures released Friday.
However, actual year over year activity in September fell by 19.8 per cent compared with 2009.
And unlike the strong increases in past months, prices are flat lining and back to where they were a year ago. Average prices are now at $331,089, down 0.4 per cent from September 2009.
“Supply and demand are rebalancing, and that’s keeping prices steady in many markets,” said CREA president Georges Pahud.
One thing that’s keeping pricing from dropping further is that new listings remain 15 per cent below the peak reached in April, as some vendors have decided to take their homes off the market.
The seasonally adjusted number of months of inventory, representing the time it would take to sell current stock, is at 6.6 months at the end of September, down from 6.9 months in August.
In the Toronto market, sales are down by 22 per cent in August compared with last year.
One moderating factor is that some banks have eased off on mortgage lending rates, said CREA economist Gregory Klump.
“Interest rates are going nowhere fast, so home ownership will remain within reach for many homebuyers.”
Still, CREA does not expect the latest round of low rates to ignite market demand.
“The continuation of low and stable interest rates is unlikely to cause housing demand to take off, especially since the hangover from accelerated home purchases earlier this year is expected to persist for some time.”
Wednesday, October 13, 2010
GTA resale home prices up in September
John Spears, Business Reporter
The number of existing homes sold in September in Greater Toronto dipped 23 per cent in September, compared with September a year ago, says the Toronto Real Estate Board.
Board members recorded 6,310 sales in September, down from 8,196 a year ago.
But prices rose despite the softer sales, with the median price of a home rising to $360,325 from $347,000 a year ago. The median price marks the point where half the homes sold for more, half for less.
The average price also climbed, to $427,329 from $406,877 a year ago.
Softer sales volume isn’t surprising after the record sales chalked up by the market in the second half of 2009 and early 2010, said Bill Johnston, president of the real estate board.
Meanwhile in a national survey, Re/Max says the outlook for Canada's home resale market looks healthy going into the final three months of 2010, after a summer "pause."
The national real-estate sales organization says it anticipates fewer sales than in the surprisingly strong fourth quarter of 2009 but prices are expected to hold up.
Re/Max says there hasn't been a big influx of listings, while demand has normalized after a very hot period in late 2009 and early this year.
It also says there was a good sign from the number of higher-end properties sold this summer in both smaller and larger centres.
The number of existing homes sold in September in Greater Toronto dipped 23 per cent in September, compared with September a year ago, says the Toronto Real Estate Board.
Board members recorded 6,310 sales in September, down from 8,196 a year ago.
But prices rose despite the softer sales, with the median price of a home rising to $360,325 from $347,000 a year ago. The median price marks the point where half the homes sold for more, half for less.
The average price also climbed, to $427,329 from $406,877 a year ago.
Softer sales volume isn’t surprising after the record sales chalked up by the market in the second half of 2009 and early 2010, said Bill Johnston, president of the real estate board.
Meanwhile in a national survey, Re/Max says the outlook for Canada's home resale market looks healthy going into the final three months of 2010, after a summer "pause."
The national real-estate sales organization says it anticipates fewer sales than in the surprisingly strong fourth quarter of 2009 but prices are expected to hold up.
Re/Max says there hasn't been a big influx of listings, while demand has normalized after a very hot period in late 2009 and early this year.
It also says there was a good sign from the number of higher-end properties sold this summer in both smaller and larger centres.
Tuesday, October 12, 2010
Real estate group reaches tentative agreement on MLS listings
JOHN IBBITSON AND STEVE LADURANTAYE - Globe and Mail
It will become easier and cheaper for Canadians to sell their homes after peace was declared on Thursday in the war between the Competition Bureau and the organization representing Canada’s real estate agents.
The bureau and the Canadian Real Estate Association (CREA) reached a tentative agreement that will allow sellers to hire an agent to post their property on the all-important Multiple Listing Service and then conduct the rest of the sale on their own, if they choose.
39% 189 votes - Yes
61% 296 votes - No
“It’s better to negotiate something than go to court,” Don Lawby, chief executive officer of Century 21, said in reaction to the agreement. “Bad press is bad press, and whatever the fee structure, people will always think it’s unfair.”
News of the agreement caught industry leaders flat-footed. The heads of several of the country’s largest brokerage firms were unaware of it until contacted by The Globe and Mail.
If ratified by CREA’s membership at the end of October, the agreement will end a challenge from the bureau in which the two sides are scheduled to appear before the Competition Tribunal in April. Once ratified, the new rules will take effect immediately and be in effect for 10 years.
Traditionally, sellers hire an agent in an all-or-nothing agreement, in which the agent lists their homes on the Multiple Listing Service – on which about 90 per cent of residential properties are bought and sold – negotiates the sale with the buyer and handles much of the paperwork. In return, the agent receives a commission that is typically a percentage of the sale price.
Energized by a new commissioner, Melanie Aitken, and an expanded mandate, the Competition Bureau went to the Competition Tribunal in February demanding that CREA allow consumers more choice on what services to use.
The association, which represents nearly 100,000 real estate agents across Canada, loosened some of its rules in the spring. Nonetheless, the bureau decided the measures were insufficient.
But while both sides appeared intransigent in public, negotiations quietly paved the way to Thursday’s agreement after association representatives approached the bureau earlier this month.
The agreement is a major victory for the Competition Bureau, which was determined to force the real estate industry to become more competitive.
“The agreement is welcome news for Canadians,” Ms. Aitken said in an interview. “Consumers are going to have the ability to choose what services they want from a real estate agent, and pay only for those services, and at the same time, it gives much-needed flexibility for the agents to offer the variety of services and prices that meet the needs of consumers.”
CREA president Georges Pahud said in a statement that that the agreement “would avoid unnecessary and expensive litigation proceedings.”
The long-term impact on the country’s real-estate market is far from certain. The cost of buying or selling a home could come down as competitors seek to offer different packages and undercut each others’ prices.
But agents have warned that changes could lead to shoddy service or fraud. The agreement seeks to strike a balance, increasing consumer choice while leaving agents as the only portal to the MLS.
It will become easier and cheaper for Canadians to sell their homes after peace was declared on Thursday in the war between the Competition Bureau and the organization representing Canada’s real estate agents.
The bureau and the Canadian Real Estate Association (CREA) reached a tentative agreement that will allow sellers to hire an agent to post their property on the all-important Multiple Listing Service and then conduct the rest of the sale on their own, if they choose.
39% 189 votes - Yes
61% 296 votes - No
“It’s better to negotiate something than go to court,” Don Lawby, chief executive officer of Century 21, said in reaction to the agreement. “Bad press is bad press, and whatever the fee structure, people will always think it’s unfair.”
News of the agreement caught industry leaders flat-footed. The heads of several of the country’s largest brokerage firms were unaware of it until contacted by The Globe and Mail.
If ratified by CREA’s membership at the end of October, the agreement will end a challenge from the bureau in which the two sides are scheduled to appear before the Competition Tribunal in April. Once ratified, the new rules will take effect immediately and be in effect for 10 years.
Traditionally, sellers hire an agent in an all-or-nothing agreement, in which the agent lists their homes on the Multiple Listing Service – on which about 90 per cent of residential properties are bought and sold – negotiates the sale with the buyer and handles much of the paperwork. In return, the agent receives a commission that is typically a percentage of the sale price.
Energized by a new commissioner, Melanie Aitken, and an expanded mandate, the Competition Bureau went to the Competition Tribunal in February demanding that CREA allow consumers more choice on what services to use.
The association, which represents nearly 100,000 real estate agents across Canada, loosened some of its rules in the spring. Nonetheless, the bureau decided the measures were insufficient.
But while both sides appeared intransigent in public, negotiations quietly paved the way to Thursday’s agreement after association representatives approached the bureau earlier this month.
The agreement is a major victory for the Competition Bureau, which was determined to force the real estate industry to become more competitive.
“The agreement is welcome news for Canadians,” Ms. Aitken said in an interview. “Consumers are going to have the ability to choose what services they want from a real estate agent, and pay only for those services, and at the same time, it gives much-needed flexibility for the agents to offer the variety of services and prices that meet the needs of consumers.”
CREA president Georges Pahud said in a statement that that the agreement “would avoid unnecessary and expensive litigation proceedings.”
The long-term impact on the country’s real-estate market is far from certain. The cost of buying or selling a home could come down as competitors seek to offer different packages and undercut each others’ prices.
But agents have warned that changes could lead to shoddy service or fraud. The agreement seeks to strike a balance, increasing consumer choice while leaving agents as the only portal to the MLS.
Thursday, October 7, 2010
Things you think add value to your home - but really don't
Jean Folger, Investopedia.com
Every homeowner must pay for routine home maintenance, such as replacing worn-out plumbing components or staining the deck, but some choose to make improvements with the intention of increasing the home's value.
Certain projects, such as adding a well thought-out family room - or other functional space - can be a wise investment, as they do add to the value of the home. Other projects, however, allow little opportunity to recover the costs when it's time to sell.
Even though the current homeowner may greatly appreciate the improvement, a buyer could be unimpressed and unwilling to factor the upgrade into the purchase price. Homeowners, therefore, need to be careful with how they choose to spend their money if they are expecting the investment to pay off. Here are six things you think add value to your home, but really don't.
Swimming Pools - Swimming pools are one of those things that may be nice to enjoy at your friend's or neighbour's house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen. Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer's offer may be contingent on the home seller dismantling an above-ground pool or filling in an in-ground pool. An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That's a significant amount of money that might never be recouped if and when the house is sold.
Overbuilding for the Neighbourhood - Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small, one-storey homes. In general, homebuyers do not want to pay $250,000 for a house that sits in a neighbourhood with an average sales price of $150,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $250,000 in a $250,000 neighbourhood. The house might be beautiful, but any money spent on overbuilding might be difficult to recover unless the other homes in the neighborhood follow suit.
Extensive Landscaping - Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home's value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.
High-End Upgrades - Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the '60s. Upgrades should be consistent to maintain a similar style and quality throughout the home. A home that has a beautifully remodeled and modern kitchen can be viewed as a work in project if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home. In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.
Wall-to-Wall Carpeting - While real estate listings may still boast "new carpeting throughout" as a selling point, potential homebuyers today may cringe at the idea of having wall-to-wall carpeting. Carpeting is expensive to purchase and install. In addition, there is growing concern over the healthfulness of carpeting due to the amount of chemicals used in its processing and the potential for allergens (a serious concern for families with children). Add to that the probability that the carpet style and colour that you thought was absolutely perfect might not be what someone else had in mind. Because of these hurdles, wall-to-wall carpet is something on which it's difficult to recoup the costs. Removing carpeting and restoring wood floors is usually a more profitable investment.
Invisible Improvements - Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice - or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
The Bottom Line - It is difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home's value when it comes time to sell. There is no simple equation for determining which projects will garner the highest return, or the most bang for your buck. Some of this depends on the local market and even the age and style of the house. Homeowners frequently must choose between an improvement that they would really love to have (the in-ground swimming pool) and one that would prove to be a better investment. A bit of research, or the advice of a qualified real estate professional, can help homeowners avoid costly projects that don't really add value to a home.
Every homeowner must pay for routine home maintenance, such as replacing worn-out plumbing components or staining the deck, but some choose to make improvements with the intention of increasing the home's value.
Certain projects, such as adding a well thought-out family room - or other functional space - can be a wise investment, as they do add to the value of the home. Other projects, however, allow little opportunity to recover the costs when it's time to sell.
Even though the current homeowner may greatly appreciate the improvement, a buyer could be unimpressed and unwilling to factor the upgrade into the purchase price. Homeowners, therefore, need to be careful with how they choose to spend their money if they are expecting the investment to pay off. Here are six things you think add value to your home, but really don't.
Swimming Pools - Swimming pools are one of those things that may be nice to enjoy at your friend's or neighbour's house, but that can be a hassle to have at your own home. Many potential homebuyers view swimming pools as dangerous, expensive to maintain and a lawsuit waiting to happen. Families with young children in particular may turn down an otherwise perfect house because of the pool (and the fear of a child going in the pool unsupervised). In fact, a would-be buyer's offer may be contingent on the home seller dismantling an above-ground pool or filling in an in-ground pool. An in-ground pool costs anywhere from $10,000 to more than $100,000, and additional yearly maintenance expenses need to be considered. That's a significant amount of money that might never be recouped if and when the house is sold.
Overbuilding for the Neighbourhood - Homeowners may, in an attempt to increase the value of a home, make improvements to the property that unintentionally make the home fall outside of the norm for the neighbourhood. While a large, expensive remodel, such as adding a second story with two bedrooms and a full bath, might make the home more appealing, it will not add significantly to the resale value if the house is in the midst of a neighbourhood of small, one-storey homes. In general, homebuyers do not want to pay $250,000 for a house that sits in a neighbourhood with an average sales price of $150,000; the house will seem overpriced even if it is more desirable than the surrounding properties. The buyer will instead look to spend the $250,000 in a $250,000 neighbourhood. The house might be beautiful, but any money spent on overbuilding might be difficult to recover unless the other homes in the neighborhood follow suit.
Extensive Landscaping - Homebuyers may appreciate well-maintained or mature landscaping, but don't expect the home's value to increase because of it. A beautiful yard may encourage potential buyers to take a closer look at the property, but will probably not add to the selling price. If a buyer is unable or unwilling to put in the effort to maintain a garden, it will quickly become an eyesore, or the new homeowner might need to pay a qualified gardener to take charge. Either way, many buyers view elaborate landscaping as a burden (even though it might be attractive) and, as a result, are not likely to consider it when placing value on the home.
High-End Upgrades - Putting stainless steel appliances in your kitchen or imported tiles in your entryway may do little to increase the value of your home if the bathrooms are still vinyl-floored and the shag carpeting in the bedrooms is leftover from the '60s. Upgrades should be consistent to maintain a similar style and quality throughout the home. A home that has a beautifully remodeled and modern kitchen can be viewed as a work in project if the bathrooms remain functionally obsolete. The remodel, therefore, might not fetch as high a return as if the rest of the home were brought up to the same level. High-quality upgrades generally increase the value of high-end homes, but not necessarily mid-range houses where the upgrade may be inconsistent with the rest of the home. In addition, specific high-end features such as media rooms with specialized audio, visual or gaming equipment may be appealing to a few prospective buyers, but many potential homebuyers would not consider paying more for the home simply because of this additional feature. Chances are that the room would be re-tasked to a more generic living space.
Wall-to-Wall Carpeting - While real estate listings may still boast "new carpeting throughout" as a selling point, potential homebuyers today may cringe at the idea of having wall-to-wall carpeting. Carpeting is expensive to purchase and install. In addition, there is growing concern over the healthfulness of carpeting due to the amount of chemicals used in its processing and the potential for allergens (a serious concern for families with children). Add to that the probability that the carpet style and colour that you thought was absolutely perfect might not be what someone else had in mind. Because of these hurdles, wall-to-wall carpet is something on which it's difficult to recoup the costs. Removing carpeting and restoring wood floors is usually a more profitable investment.
Invisible Improvements - Invisible improvements are those costly projects that you know make your house a better place to live in, but that nobody else would notice - or likely care about. A new plumbing system or HVAC unit (heating, venting and air conditioning) might be necessary, but don't expect it to recover these costs when it comes time to sell. Many homebuyers simply expect these systems to be in good working order and will not pay extra just because you recently installed a new heater. It may be better to think of these improvements in terms of regular maintenance, and not an investment in your home's value.
The Bottom Line - It is difficult to imagine spending thousands of dollars on a home-improvement project that will not be reflected in the home's value when it comes time to sell. There is no simple equation for determining which projects will garner the highest return, or the most bang for your buck. Some of this depends on the local market and even the age and style of the house. Homeowners frequently must choose between an improvement that they would really love to have (the in-ground swimming pool) and one that would prove to be a better investment. A bit of research, or the advice of a qualified real estate professional, can help homeowners avoid costly projects that don't really add value to a home.
Tuesday, October 5, 2010
Housing market makes strides
STEVE LADURANTAYE
The Canadian housing market “vastly improved” over the last three months, ReMax Canada said Tuesday, but sales are expected to remain sluggish for the rest of the year.
The real estate brokerage firm said in its “Market Trends Report” that sales should return to average levels this fall after a slow summer, but that the pace set in 2009 was unsustainable.
“With the diminished risk of a W recession occurring, rebounding commodity and equity markets, and more positive economic data emerging daily, the outlook for the residential housing market has vastly improved over the past three months,” the brokerage stated.
Not everyone would agree with the cheery assessment – sales slowed markedly across the country over the summer, with Vancouver and Toronto seeing drops of more than 30 per cent. Monday, the Real Estate Board of Greater Vancouver said sales were 37.6 per cent lower in September than a year ago, and were only 0.8 per cent higher than August's figures.
Meanwhile, Finance Minister Jim Flaherty warned Monday that the economy was struggling, singling out the housing market as a source of concern. Housing's portion of the economy has grown steadily for the past 10 years, but Bank of Canada Governor Mark Carney warned Thursday that declining affordability and subdued income growth will dampen further growth.
Prices have been moving lower across the country since the spring, but ReMax said the 19 markets it tracks are still seeing higher prices when compared to a year ago.
The brokerage said “by far the most interesting statistic reported” from its agents was an increase in the number of upper-end sales between January and August. ReMax's definition of a luxury home varies by market, from $350,000 in St. John's to $1.5-million in Greater Vancouver. It is difficult to make comparisons to the last market update, released in April, however, because luxury comes cheaper in Tuesday's report – the bar was lowered by $500,000 in Vancouver and Toronto, for example.
“As overall economic performance improves, so too will housing activity,” says Sylvain Dansereau, executive vice-president of ReMax Quebec. “History will show sound market fundamentals supported another healthy year of residential real estate activity in 2010.”
From the report: * “All markets reported a surge of 20 per cent or more in upper end home sales. Sixty-eight per cent of markets saw upscale home sales climb in excess of 40 per cent, while 21 per cent boasted triple-digit gains.
Sudbury led the country in sales appreciation, rising a significant 17 per cent year-to-date (1,876 units in 2010 vs. 1,599 in 2009).
*While virtually all markets reported softened activity over the summer months, Winnipeg, saw 32 per cent of all homes sell in multiple offers in August.
* Montreal was the sole market still experiencing seller's market conditions, while Greater Toronto and Winnipeg were balanced, slightly favouring the seller.
*First-time buyers led the charge in 58 per cent of markets, while move-up purchasers dominated in 21 per cent of markets. The remainder reported all segments working in tandem.
*Buyers were decidedly taking more time to make their decisions in recent months, with many delaying their home-buying intentions. It is expected that many purchasers sitting on the fence will make their way back into the market on the heels of more positive economic news.”
The Canadian housing market “vastly improved” over the last three months, ReMax Canada said Tuesday, but sales are expected to remain sluggish for the rest of the year.
The real estate brokerage firm said in its “Market Trends Report” that sales should return to average levels this fall after a slow summer, but that the pace set in 2009 was unsustainable.
“With the diminished risk of a W recession occurring, rebounding commodity and equity markets, and more positive economic data emerging daily, the outlook for the residential housing market has vastly improved over the past three months,” the brokerage stated.
Not everyone would agree with the cheery assessment – sales slowed markedly across the country over the summer, with Vancouver and Toronto seeing drops of more than 30 per cent. Monday, the Real Estate Board of Greater Vancouver said sales were 37.6 per cent lower in September than a year ago, and were only 0.8 per cent higher than August's figures.
Meanwhile, Finance Minister Jim Flaherty warned Monday that the economy was struggling, singling out the housing market as a source of concern. Housing's portion of the economy has grown steadily for the past 10 years, but Bank of Canada Governor Mark Carney warned Thursday that declining affordability and subdued income growth will dampen further growth.
Prices have been moving lower across the country since the spring, but ReMax said the 19 markets it tracks are still seeing higher prices when compared to a year ago.
The brokerage said “by far the most interesting statistic reported” from its agents was an increase in the number of upper-end sales between January and August. ReMax's definition of a luxury home varies by market, from $350,000 in St. John's to $1.5-million in Greater Vancouver. It is difficult to make comparisons to the last market update, released in April, however, because luxury comes cheaper in Tuesday's report – the bar was lowered by $500,000 in Vancouver and Toronto, for example.
“As overall economic performance improves, so too will housing activity,” says Sylvain Dansereau, executive vice-president of ReMax Quebec. “History will show sound market fundamentals supported another healthy year of residential real estate activity in 2010.”
From the report: * “All markets reported a surge of 20 per cent or more in upper end home sales. Sixty-eight per cent of markets saw upscale home sales climb in excess of 40 per cent, while 21 per cent boasted triple-digit gains.
Sudbury led the country in sales appreciation, rising a significant 17 per cent year-to-date (1,876 units in 2010 vs. 1,599 in 2009).
*While virtually all markets reported softened activity over the summer months, Winnipeg, saw 32 per cent of all homes sell in multiple offers in August.
* Montreal was the sole market still experiencing seller's market conditions, while Greater Toronto and Winnipeg were balanced, slightly favouring the seller.
*First-time buyers led the charge in 58 per cent of markets, while move-up purchasers dominated in 21 per cent of markets. The remainder reported all segments working in tandem.
*Buyers were decidedly taking more time to make their decisions in recent months, with many delaying their home-buying intentions. It is expected that many purchasers sitting on the fence will make their way back into the market on the heels of more positive economic news.”
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