Archive for February, 2011

Home Sales to Climb Eight Per Cent in 2011

BCREA Housing Forecast Update – First Quarter 2011

Vancouver, BC – February 23, 2011. The British Columbia Real Estate Association (BCREA) released its Housing Forecast for the first quarter of 2011 today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 8 per cent from 74,640 units in 2010 to 80,900 units this year, and increase another 4 per cent to 83,950 units in 2012.

“British Columbia housing markets are returning to normalcy after two years of volatility,” said Cameron Muir, BCREA Chief Economist. “Employment and population growth will fuel consumer demand over the next two years. However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the ten-year average of 87,600 units.”

“Total active residential listings in the province declined 14 per cent since last spring. However, the inventory of homes for sale is expected to edge higher as the number of new listings to the market advances during the first two quarters of 2011,” added Muir. “Regional market differences continue in the province, with Vancouver trending into a seller’s market, while the Okanagan, Kootenay and Kamloops markets trend from a buyer’s market toward balanced conditions.”

The average MLS® residential price is forecast to increase 2 per cent to $517,000 this year and remain relatively unchanged in 2012, albeit declining by 0.4 per cent to $515,400.

Click here for the full BCREA Housing Forecast Update.

Housing Market Continues Normalization Trend

Vancouver, BC – February 14, 2011. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 7 per cent in January from December 2010, on a seasonally adjusted basis. Compared to January of last year, MLS® residential unit sales were down 10 per cent to 4,137 units. The average MLS® residential price rose 11.5 per cent to $548,183 in January compared to the same month last year.

“Consumer demand continues to normalize alongside overall economic conditions,” said Cameron Muir, BCREA Chief Economist. “However, the pace of growth in home sales experienced since last summer is likely to moderate in the coming months as tighter credit conditions and upward pressure on mortgage interest rates impacts affordability and purchasing power.”

The inventory of homes for sale remained below 47,000 units for the third consecutive month in January, down 14 per cent from the spring of last year. “While demand and supply conditions province-wide exhibited balance last month, regional differences are pronounced,” added Muir. “Housing markets in the Lower Mainland/ South Coast exhibited stronger conditions than in the Kootenays and Okanagan, which remained in buyer’s market territory in January.”

For the complete news release, including detailed statistics, click here.

Housing Market Update, January 2011

Olympic village condo prices to be slashed by an average of one-third

By Tracy Sherlock and Jeff Lee, Vancouver Sun; With Files From Andrea Woo February 11, 2011

VANCOUVER – Condo prices at the troubled Olympic village project will be reduced by an average of 30 per cent from May 2010 levels, according to Ernst & Young, the project’s receiver.

Specific prices won’t be released until sales begin on Feb. 17, but discounts will vary by unit location, features and views, according to a 112-page report the receiver filed in B.C. Supreme Court on Thursday.

“The pricing of the 2011 marketing launch is not intended to represent a ‘fire sale’ or drastic discount from actual market value in order to accelerate sales,” the document says. “The pricing will reflect realistic current market values.”

The plan calls for 230 condos to go on sale Feb. 17, while another 244 suites -some of them the more expensive waterfront units -will be withheld from the market, according to the receiver’s documents.

Of these 244 suites, 127 will be offered for rent at market rates, which marketer Bob Rennie estimated to be roughly $2.30 per square foot per month.

Suites valued at more than $1 million will not be rented out, but rather sold at a later date.

“The timing of release for sale of the remaining units will be determined by the results of the receiver’s marketing campaign and an ongoing assessment of market conditions,” the document states.

Renting out a home can reduce its market value, but previously rented homes are generally not subject to the 12-per-cent harmonized sales tax that new home purchasers must pay.

Vancouver Coun. Suzanne Anton said slashing prices is one of the few options left for the troubled project.

“The mayor put this under a black cloud and I’m hoping this new plan will blow that black cloud away,” Anton said.

“It was clear something had to happen because they were not moving at all.”

She said there is “no question” the cuts will mean a major financial loss to Vancouver taxpayers.

“The only question is how big the city’s loss will be,” she said.

Mayor Gregor Robertson and his Vision Vancouver council placed the troubled project into receivership with Ernst & Young in November 2010, with the city taking over the project from the Maleks of Millennium Southeast False Creek Properties in an effort to recoup $742.6 million in taxpayer funds.

Anton called that move a key problem, saying the mayor should have been a “chief promoter” of the project.

Occupancy at the site was only 32 per cent at the time of receivership in November 2010. The new plan, if successful, would increase that to 70 per cent by this summer. The report says the receivers expect that as occupancy increases and commercial tenants move in, prices will rise.

The plan includes changing the name of the development to The Village on False Creek, while the commercial centre will be called The Shops at the Village. The development was previously called Millennium Water.

Robertson said the receiver’s report lays out a systematic way of disposing of the units with the least financial risk to the city. But it’s still anyone’s guess whether taxpayers will earn back all of their investment.

“What I hope is we break even on the village over time but what I predict is that the timelines will be longer with rental and the market rebound being the driving factors in a break-even scenario,” Robertson said.

“It is going to take years. There is no happy, surprise twist right now.”

Robertson said the city rejected the idea of selling all the units to a developer who would buy them in bulk. He said it might have been politically expedient to do so, but at great expense to taxpayers.

“It’s a lousy business decision for the city and it is an immediate hit for the taxpayers,” he said. “It keeps the pressure on us to maintain and endure the ups and downs ahead. But you know, my business background says be patient and experts from the industry say that. A fire sale would not be good for taxpayers. So I think we have to take a long view here.”

TD Canada Trust and Legacy Liquor Store are the only tenants at The Shops at the Village, but the documents state the receiver is in negotiations with London Drugs and Urban Fare, whose occupancy is pending.

The report also details plans to decrease strata costs: The receiver will pay off the lease on energy monitoring units in each suite, and pay off the mortgage at the recreation facility, which has been renamed the Gold Medal Club.

The documents filed in court indicate that the company’s name was changed in December 2010 to SEFC Properties Ltd, formerly Millennium False Creek Southeast Properties. The 230 suites to be offered for sale represent a market value of about $200 million, the Ernst & Young documents state.

Making your Mortgage Tax-Deductible

By Alim Dhanji, Assante Financial Management

There is a way of deducting the interest on your home mortgage from your income tax, LEGALLY.  The average Canadian family could take 7-10 years off their 25 year mortgage and increase their net worth by approximately $200,000.

Most people separate their mortgage and their investments by ‘Serial Financing’.  Serial because one is Before the other.  This is the traditional approach of having a mortgage held at a bank and consistently making the monthly payments.  Any extra money goes towards paying down the mortgage.  They would not consider investing until the mortgage is nearly paid off. This method delays investing for 10-15 years.  We all understand that home equity is essential in wealth creation and many feel that they would rather put their money towards reducing debt instead of investing.  However, with this loss of investment time, their money will lose its ability to ‘compound’ or make money on itself – compounding is the most powerful way to create wealth.  The end result would be that you have a house that is paid off and a small portfolio.  Most Canadians are house rich, but cash poor.

The Drawbacks of serial financing include:

  • Lost compounding opportunities and a smaller portfolio.
  • Lost capital gains and reduced diversification.
  • A higher risk of not meeting your investment goals.
  • Carrying a heavy tax burden.

Consider a ‘Parallel Financing’ strategy – doing both at the same time.  For every dollar you pay your mortgage down by, the bank will re-lend this amount to you as an investment loan.  The investment loan then would be used to invest in your portfolio.  The interest on the investment loan is tax deductible.  Soon the entire mortgage will be paid down and your investment portfolio will be clear and growing at a rate of return that is based on your risk profile.  You will have a loan with deductible interest!

The Benefits of parallel financing include:

  • Starting a portfolio now and grabbing the huge benefits of compounding.
  • Creating a tax deduction now which reduces your tax burden.
  • Building equity simultaneously in two diversified large asset classes; your house and your investment portfolio.
  • Getting further savings and returns by paying down your mortgage faster using tax refunds from the interest deduction.
  • Still maintaining the principle residence exemption for capital gains when you sell your house.
  • If the investment portfolio is invested conservatively, you will have limited risk since the portfolio should be worth at least as much as the investment loan.

Using our method, we will work together with your bank to set-up the proper structure and will ensure that you use it properly for interest deductibility.  Your portfolio will be based on your risk profile and investment policy statement.  Talk to both a Certified Financial Planner and a Chartered Accountant before implementing.  Of course, make sure that the program fits into your overall Individual Financial Plan and Life-goals.

If you would like to speak to a Certified Financial Planner and licensed Insurance Broker, please contact Alim Dhanji at (604) 688-1919 ex.17.

Alim Dhanji has been helping people achieve their life goals including buying homes through written financial planning for over 10 years. Alim has been featured on CKNW, The Province, The National Post, Money Sense, The Metro, Investment Executive, Morningstar, and The Insurance Journal.

Stability and regional ‘hot spots’ characterize January housing market

Vancouver, BC – February 2, 2011. The Greater Vancouver housing market remained in balanced market conditions in January, although higher levels of buyer demand were seen in some of the region’s largest communities.

The number of properties listed for sale and those sold on the Multiple Listing Service® (MLS®) last month outpaced the 10-year average in both categories for January.

“There was a healthy balance between the number of home buyers and sellers in our market in January, but there’s always variation in activity from region to region,” said Jake Moldowan, president of the Real Estate Board of Greater Vancouver (REBGV). “We’re seeing strong sellers’ market conditions in areas like Richmond and the west side of Vancouver.”

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price of detached homes increased 22.6 per cent in Richmond and 12.2 per cent in Vancouver West. In comparison, detached home prices across the region increased 2.7 per cent over the same period.

“When you’re looking to buy or sell a home, it’s important to familiarize yourself with the wider trends in the market. It’s equally important to seek out knowledge of your local area so you understand current market conditions in your neighbourhood,” Moldowan said

Looking across the region, the REBGV reports that residential property sales in Greater Vancouver reached 1,819 on the MLS® in January 2011. This represents a 4.2 per cent decline compared to the 1,899 sales recorded in December 2010, a decrease of 5.4 per cent compared to the 1,923 sales in January 2010 and a 138.7 per cent increase from the 762 home sales in January 2009.

From a historical perspective, January’s 1,819 homes sales slightly surpassed the 1,790 home sale average recorded in the region over the last ten years.

New listings for detached, attached and apartment properties in Greater Vancouver totalled 4,801 in January 2011. This represents a 6.7 per cent decrease compared to January 2010 when 5,147 properties were listed, and a 182 per cent increase compared to December 2010 when 1,699 homes were added to the MLS® in Greater Vancouver.

At 10,438, the total number of residential property listings on the MLS® increased 5.8 per cent in January compared to last month and increased 2.2 per cent from this time last year.

Sales of detached properties on the MLS® in January 2011 reached 793, an increase of 12.5 per cent from the 705 detached sales recorded in January 2010, and a 171.6 per cent increase from the 292 units sold in January 2009. The benchmark price for detached properties increased 2.7 per cent from January 2010 to $810,045.

Sales of apartment properties reached 713 in January 2011, a decline of 20.8 per cent compared to the 891 sales in January 2010, and an increase of 97.5 per cent compared to the 361 sales in January 2009.The benchmark price of an apartment property increased 1.4 per cent from January 2010 to $390,935.

Attached property sales in January 2011 totalled 313, a decline of 4.3 per cent compared to the 327 sales in January 2010, and a 187.2 per cent increase from the 109 attached properties sold in January 2009. The benchmark price of an attached unit increased 2.6 per cent between January 2010 and 2011 to $495,140.

Download the complete stats package by clicking here.

Super, Natural British Columbia

http://www.youtube.com/watch?v=xwSCHRQCIBY&feature=player_embedded# Cheap Vancouver car rental