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Kelowna, BC (December 6, 2011) – Canadian residential real estate defied conventional logic and outperformed expectations in 2011, posting another solid year of housing activity virtually across the board. The trend is expected to carry forward into 2012 as Canadians continue to demonstrate their faith in homeownership, despite concerns over the European debt crisis and its impact on the global economy, according to a report released today by RE/MAX.
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National Overview: http://www.youtube.com/watch?v=l-WeYkq9HGk
Vancouver: http://www.youtube.com/watch?v=3Ns3UU1gj5M
Victoria: http://www.youtube.com/watch?v=sNPIlbfDSQw
Kelowna: http://www.youtube.com/watch?v=To7bVysu9fY&feature=player_embedded
Edmonton: http://www.youtube.com/watch?v=0eDco5McEcE
Calgary: http://www.youtube.com/watch?v=VYJIZ5M4x8g
Saskatoon: http://www.youtube.com/watch?v=cak8Px6gW80
Regina: http://www.youtube.com/watch?v=i2YRJx_xNFE
Winnipeg: http://www.youtube.com/watch?v=5sLfx1AZPIo
The real estate board in the Okanagan (OMREB) surveys buyers agents to find out where the buyers came from and what they purchased. Here is October 2011′s summary results.
Property Type:
21.9% of purchases were by Move-Up Buyers
19.5% by First Time Buyers
13.0% moving from Single Family Home to Strata Unit
12.4% buying Revenue/Investment Property
7.7% moving into Retirement Home/Seniors Community
6.5% Recreation Property Buyers
1.8% moving from Strata property to Single Family Home
Moving From:
46.0% from Within OMREB Board Area
15.3% from Other Areas in BC
14.2% from Alberta
13.6% from Lower Mainland/Vancouver Island
4.5% from Saskatchewan/Manitoba
3.4% from Eastern Canada/Maritimes
2.8% from Outside Canada
0.0% from NWT/Yukon (second month reported)
More details: http://www.omreb.com/matrix/documents/October%202011%20Buyers%20Survey%20Results.pdf
Christine Dobby Nov 15, 2011 – 10:58 AM ET | Last Updated: Nov 15, 2011 12:57 PM ET
With sales of existing homes in Canada rising in October to the highest level since January, the Canadian Real Estate Association boosted its forecast for resale activity for 2011.
The industry group released data on October sales activity as well as a revised forecast for the year on Tuesday.
National sales of existing homes increased 1.2% from the previous month, building on a gain of 2.5% in September. Price gains however cooled to 5.5%, the smallest gains since January.
A total of 397,561 resale units have traded hands so far this year, CREA said, up 1.8% from levels in the first 10 months of 2010.
Here’s what you need to know about the booming Canadian housing market:
Ontario leads the way
Third-quarter sales activity in the province was stronger than forecast, while the rest of the country came in broadly in line with expectations, the CREA said.
It was the strength of activity in Ontario that prompted the CREA to boost its annual forecast for 2011 to 1.4%, up from 0.9%.
The industry group now predicts national sales of 453,300 for the year, compared with 446,915 in 2010.
198,000 of 2011′s residential sales are expected to come from Ontario, with Quebec and British Columbia expected to have sales of 77,000 and 76,600, respectively.
Home prices are still up but showing signs of cooling down
CREA kept its national average home price forecast for the year little changed at $362,700. That’s an annual increase of 7.0% compared with $339,049 in 2010.
Prices are expected to remain flat next year, with the CREA forecasting $362,700 again for 2012.
The industry group pointed to moderating prices in Vancouver in the third quarter compared with the first half of the year, with sales of multi-million dollar properties in that city returning to “more normal levels.”
CREA said the national average price in October rose 5.5% from a year earlier to just under $362,899, the smallest increase since January.
The balance of supply and demand is tight but the market remains on solid footing
October’s monthly rise in sales resulted in a slightly tighter balance of supply and demand, but the national housing market remains “firmly rooted in balanced territory,” the CREA said.
The national sales-to-new listings ratio, a measure of market balance, stood at 53.4% in October, up from 52.8% in September.
Low interest rates continue to bolster the market
CREA also revised its forecast for 2012 upward slightly, predicting a smaller easing than previously expected of 0.5% to 451,200 units.
The uptick is largely due to expectations that Canada’s interest rates will stay low until well into 2012, CREA said.
But domestic and global economic headwinds could put pressure on the sector
“A number of factors will keep Canada’s housing market in check as interest rates remain low,” said Gregory Klump, CREA’s chief economist.
He pointed to tightened mortgage regulations, high household debt and slower economic and job growth as possible headwinds.
However, Mr. Klump noted that persistent news of global economic uncertainty has put only minor dents in consumer confidence to date.
“How confidence evolves depends on how global turmoil plays out over the coming months,” he said.
In its Fall 2011 Housing Market Outlook report, Canada Mortgage and Housing says that demand for new and existing homes in Kelowna is expected to strengthen in 2012. Favourable mortgage interest rates coupled with stronger employment growth will support modest growth in demand for housing next year.
Sales of existing homes are expected to increase 11 per cent in 2012. Home buyers will continue to benefit from an ample supply of listings available for sale. Expect existing home prices to edge up by three per cent as demand improves and the supply of listings is drawn down later next year.
Kelowna area housing starts are forecast to increase 18 per cent to 1,125 homes in 2012.
To view the complete report click here.
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The Appraisal Institute of Canada offers an online guide which helps homeowners calculate the average return on their investment in a renovation project.
Choose “bathroom renovation” and plug in an outlay of, for example, $30,000 into the calculator and RENOVA niftily tallies a 75- to 100-per-cent return, which translates to an added $22,500 to $30,000 on the resale value of your home. Kitchens also rank well up the list with a similar 75 to 100 per cent payback.
Swimming pools, home theatre rooms and interlocking brick driveways yield only 25 to 50 per cent. The payback for installing central air conditioning ranges widely, from 25 to 75 per cent. Putting in a skylight may turn out to be a waste of cash, with the estimated return varying from zilch to 25 per cent at the most.
Builder Doug Campbell of DC Construction Ltd. believes the hectic pace of the real estate market in the Toronto area this spring is also driving the reno business. He has been on a stream of visits with real estate agents and potential purchasers who ask him to look over houses before an offer even goes in. How much will it cost to replace that antiquated knob and tube wiring, they wonder, or add a family room with a master suite above?
“When there’s a lot of turnover and people are buying, they always want to do work.”
Mr. Campbell’s rule of thumb, when owners ask for his advice, is that about 75 per cent of the money spent on a substantial reno will boost the home’s value. The other 25 per cent is an investment in the intangible – warm floors underfoot, extra counter space or a view to the garden.
He asks new clients about their plans for the next five to 10 years, because that will determine where they should invest the most cash.
If clients plan to sell again within a few years, Mr. Campbell recommends that they hold costs down on five-star items such as satin-polished nickel faucets where a more economical choice will do.
“A set of taps for a bathroom can cost $500 or it can cost $2,000. Nobody would appreciate that extra $1,500.”
Homeowners have become much more energy-conscious in recent years, he finds, so people often call on him to bulk up the insulation. Eco-friendly features such as tankless water heaters are increasingly popular.
In Vancouver, ReMax broker David Campbell says the market for townhouses and condos has started to slow after a stretch of torrid sales. But a lack of inventory means that potential buyers are competing for single-family houses in the more popular neighbourhoods.
If people have a solid income, they will pay a rich price for the coveted single-family house that is move-in ready. “They’re paying a premium if it was done with city permits.”
Nineteen times out of 20, he says, it’s cheaper to tear down a tiny bungalow than to build an addition, raise the roof or finish the basement. But many older houses need updating.
Mr. Campbell counsels homeowners who are preparing a house for sale to look at each room in the context of the entire property. He recently evaluated one house where the owner had invested in lovely landscaping and fresh decor. He was startled to walk into an overwhelmingly blue bathroom that seemed to belong to another era.
“If you go and change one thing, you’re going to make other things look dated by doing that. You’ve got to look at the rest of the package.”
He urged the homeowner to update the bathroom because, in Mr. Campbell’s opinion, that reno is a fast and inexpensive way to make a house more appealing, whereas installing a kitchen for a quick turnover does not pay off.
“With the cost and time of putting one in, you’ll miss the spring market.”
Calgary-based interior designer Monica Stevens says the uncertainty surrounding the housing market in that city is bolstering the renovation business.
If you go and change one thing, you’re going to make other things look dated by doing that. You’ve got to look at the rest of the package. — Broker David Campbell
Some homeowners have watched the value of their properties fall from the lofty levels of recent years, so they have decided not to settle in for the long term and create a house they love. Others are taking advantage of a cooler market and buying a second house without even attempting to sell the first.
“Both groups are capitalizing,” said Ms. Stevens from San Francisco, where she was accompanying a client on a shopping excursion.
Ms. Stevens says kitchens and bathrooms are still the rooms most often chosen for renewal, but she is seeing a move away from one large, combined kitchen and family room back toward more delineated space.
Many people who tried cocooning with the whole family in a great room are now clamouring for some space of their own, which illustrates another caveat: It can be unwise to follow a reno trend just because all of the neighbours are doing it.
When the economic downturn hit Calgary, Ms. Stevens says, trades became more available, and homeowners have become immersed in new projects. Among her clientele, many are splurging on luxurious fixtures and finishes.
“Once they get going on a renovation they make a full commitment,” Ms. Stevens says. When the walls are torn open, the house is filled with drywall dust and the family is living in a rental apartment around the corner, clients want to be rewarded with a beautiful house at the finish.
“You’re only going to do it once.”
Source: http://www.theglobeandmail.com/globe-investor/personal-finance/home-renovation-how-much-to-spend-and-where/article1558903/page2/
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