New federal rules have come into play as a result of government concern over rising consumer debt levels. Three new changes to Canada's mortgage rules are an attempt by Finance Minister, Jim Flaherty to create some “moderating” impact on the Canadian housing market.
These new federal rules will reduce the maximum amortization period to 30 years from 35 years for government-backed insured mortgages with loan-to-value ratios of more than 80 per cent.
Secondly, Ottawa will lower the maximum amount Canadians can borrow in refinancing their mortgages to 85 per cent from 90 per cent of the value of their homes.
Thirdly, Ottawa will withdraw government insurance backing on lines of credit secured by homes.
Though longer amortization periods reduce monthly payments, they greatly increase the amount of interest paid over the life of the mortgage and make it harder to build up equity.
The average Canadian resale home sold for $344,551 in December. Assuming a five-year mortgage at 4 per cent interest, and the minimum 5 per cent down payment of $17,227, a 35-year mortgage would have monthly payments of $1,441. Shorten the amortization period to 30 years, and the monthly payment increases to $1,555.
Mr. Flaherty said his concern is not Canada's mortgage default rate - which is less than 1 per cent. Rather his concern is those who are borrowing as much as possible.
"We're seeing people borrow to the max, and borrowing to the max at low interest rates," he said. "Most Canadians are not doing that."
He said the changes will not take effect immediately because of a requirement to give the industry 60 days notice before making policy changes of this nature.
He said past experience suggests there is no need to fear a rush on 35-year mortgages before the new rules take effect.
In addition to cutting mortgage terms, Ottawa is taking action to reduce the rapid rise in home equity lines of credit, or HELOCs. The government will do this by clamping down on the insurance that Canada Mortgage and Housing Corp. offers to the lines of credit.
Home-equity lines of credit and loans have surged in Canada, rising at almost twice the pace of mortgages over the past decade to account now for 12 per cent of overall household debt.
The third measure that will reduce how much Canadians can draw on their home equity. Last February the Finance Department announced that it would lower the maximum amount Canadians could withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. It is now reducing that maximum to 85 per cent from 90 per cent.
Posted on December 10, 2010 by RE/MAX Select Properties
The Problem Cognoscente
If nothing else, Realtors® are skilled problem solvers. The one trait that glues together all of the successful agents across Canada, it is the ability to work through the myriad of roadblocks that confront what seems like a simple task, that of bringing buyers and sellers together on a transaction within a given time frame.
Keeping a real estate deal together, and navigating through the increasingly complex minefield of laws, and restrictions that surround the real estate industry is not a task that can be accomplished effectively without logical and creative problem solving skills, along with a strong emotional foundation.
I commented to one of our seasoned agents on how unflappable he seemed in the face of the activity that surrounds him. His response was a shrug of the shoulder and the comment, "If there is an obstacle, you just have to work around it, that's all." That sums up nicely one of the key skill sets to an effective long term real estate career.
It is so very true that although you can't control the circumstances around you, you can control their impact on you. There is nothing more valuable than clear headed thinking in the time of crisis. The ability to not throw up your hands in surrender, or run away when the bullets are flying around you can come only with experience, training, and mental attitude. The storybook and film maker image of the steady handed protagonist that guides the frightened hoards through a crisis is not entirely fictitious. The hero of the real estate deal is a real life agent who doesn’t allow emotional pressure to impact on their rational and logistical task of serving their client’s best interests through to the completion of the transaction.
Problem solving is a mental process. Considered the most complex of all intellectual functions, problem solving has been defined as a higher-order cognitive process. It is a process that has been studied by psychologists over the last hundred years, as well as by computer programmers trying to perfect the latest artificial intelligence algorhythms. In fact the key to internet giant googles success is in the top secret A.I. code that they have perfected to solve the problem of searching the internet for information that is not tainted by spammer tricks. Make no mistake, problem solving is an intelligence market of the highest order.
Early experimental work centered on simple tasks so that researchers could analyze and capture real-world problems by understanding the cognitive processes involved. In clinical psychology, researchers have focused on the role of emotions in problem solving.D'Zurilla, Goldfried and Nezu published findings in the early seventies and eighties demonstrating that poor emotional control can disrupt focus on a target task and impede problem solving.
Human problem solving consists of two related processes: problem orientation, (the motivational/attitudinal/affective approach to problematic situations) and problem-solving skills,( the actual cognitive-behavioral steps, which, if successfully implemented, lead to effective problem resolution). Researchers in neuropsychology have found that frontal lobe injuries will cause deficiencies in emotional control and reasoning. Those findings have concluded that one’s emotional state can impact on the ability to solve problems.
Researchers have also learned that the problem solving process differs across domains and levels of expertise and emotional wellness. There can be no universal answer to why one can resolve problems under a crisis management mode more efficiently than another. It is clear however, that experience in problem solving in a given discipline helps to calm the emotional impact of confronting problems.
Difficult problems have some typical characteristics such as; lack of clarity of the situation, multiple objectives, decisions hierarchy, communication breakdown, and dynamic unpredictability. In all of these characteristics the resolution of difficult problems requires a direct attack on each that is encountered.
"A solution, to be a solution, must share some of the problems characteristics." - Richard L Kempe.
Even more than the emotional steadiness and expertise that a skilled problem solver must have is the creative mental process of creating a solution to a problem. Creative problem solving is a special form of problem solving in which the solution is independently created rather than learned with assistance.
Creative problem solving always involves using the creative side of the brain. To qualify as creative problem solving the solution must either have value, clearly solve the stated problem, or be appreciated by someone for whom the situation improves. These are all traits that apply readily to the real estate trade. The situation prior to the solution might not even be recognized as a problem. Alternate labels for hidden problems include words like a “challenge, an opportunity, or room for improvement”.
A good REALTOR® knows from experience that one must be aware of the unintended consequences in any action or inaction. Sometimes a small detail can impact on many elements of a successful transaction with a ripple effect. This is pre-emptive problem solving that can only be done through experience or training.
The value of a real estate professional is much deeper than the average consumer sees on the surface of a problem free transaction. It could be stated that a good agent is a problem cognoscente in the best sense of the word.
RE/MAX is the number one Real Estate Franchise on the planet...that is an undisputed fact. However, the reason for the Franchise's greatness lies at the grassroots, in the quality of the REALTORS(r) its associate Brokerages have been able to attract. After watching these amazing professionals work their magic for several years, these are the traits that I have seen surface among the cream of the crop...
1. Create a positive attitude. Research shows that most failure in business stems from an attitude problem. A positive attitude looks for solutions to problems, and is not de-motivated by them.
2. Stay Motivated. The RE/MAX organization has seen this as a key element to building it's sales force around the world. The tools that are available to offer encouragement and motivation to our agents is unmatched. That is why year after year, the top agents in Canada are usually RE/MAX agents.
3. Have Integrity. Always tell the truth and maintain your ethical standards. Face up to mistakes right away and take immediate steps to correct them.
4. Be consistent. Know your strengths and weknesses and focus on tasks that you do well; delegate those tasks that you don't do well. Stay on track.
5. Expect Success. The top challenges in life are to manage your expectiations and to mange the unexpected...this will determine your results.
6.. Manage Relationships. Get to know people by taking a genuine interest in them. Allow your spontaneity to show others how to be positive and upbeat. The top agents are truly nice people!
7. Use Team Skills. A healthy team attitude begins with a solid commitment to help other team members win. You may see the agent, but you don't see the hundreds of support players behind him.
8. Have Vision. People are driven by visions of improvement...lead others to better solutions by offering a clearer vision. Have a clear vision and you will rise to the top. Focus turns light into a laser.
9. Follow up. Listen carefully to what people are asking. Repeat their needs back to them and explain how you will solve them.
10. Practice Self-Improvement. Always keep your temper in check, speak calmly and stay focused on learning. RE/MAX has a slogan that says, "The more you learn, the more you earn."
These are just brief lessons from the amazing agents at RE/MAX Select Properties. They are a guide book by example of how to be the best!
Posted on September 23, 2010 by RE/MAX Select Properties
Its seems that every few years someone comes along with a concept or a business model to improve on the tried and true compensation method that has worked best for the Real Estate Industry over the last hundred years. The means of compensation paid for the services of a Real Estate agent has been based on a ‘payment for results’ model. When the sales representative for a Brokerage is successful in putting together (and keeping together) a transaction, they receive a benefit for their efforts. If their efforts fall short, in that a completed sale does not occur, they do not receive any compensation for their time or expenses. Under the common business model in the industry, the degree of success speaks for the degree of financial reward a Brokerage receives annually.
Although this method has been ubiquitous for almost a hundred years in Canada, it has existed in some form or another since the advent of commerce in society. Some within the real estate industry have experimented with different models of compensation to less effective results.
In England during the Middle Ages King Alfred ordered every man to give his allegiance to a lord in exchange for mutual benefit. This benefit included the right to protection from raiding parties, and the right to occupy and cultivate a piece of land in the Serfdom. In turn the lord was allowed to collect taxes in some form and turned them over to his king. The King would then pay a commission based on the results of the lord’s efforts. This commission was a percentage of the taxes as well as gifts of land or other items of value in some cases. The idea of performance based pay grew from these types of models.
When society emerged from the Middle Ages and shook off some of the elements of the Feudal system, the lower class was elevated in that they had acquired rights to the land they farmed. As the market economy evolved and the middle class established itself, the need for a good negotiator acting as a middle man between various interests grew. When the Black Death and the Bubonic Plague thinned out the body of available workers, all wages increased. In spite of the efforts of the kings and lords, change continued and serfdom ended by the 1500's. The economics of the times continued to encourage the development of a middle class and land ownership beyond that of the lords and crown. Pulled along with this fundamental change the idea of commissioned wages continued to grow.
Historically commission wages based on results have brought the most creative and entrepreneurial to the top. When a Seller decides to dispose of land holdings, they look for a combination of the highest market price, the least risk on their end, and the most efficient process. Any other compensation model will not address these desired elements as effectively as a commission based model.
When a compensation model has a pay as you go component, it inadvertently creates a lack of urgency on the part of the agent. The longer a product is listed, the more compensation is earned. Any type of compensation model that offers a flat fee or ala carte type of formula removes some aspect of motivation or creative thinking on the part of the agent. It is not a question of the dollar value of the outcome, it is a motivational incentive that is of the greatest import.
If a Seller wants to feel totally comfortable that an agent is working to gain the highest possible price for their home, and not just make a sale, then a percentage based on the sale price offers the best protection. If a Seller wants to have the least up front risk, or out of pocket expense, then a results based model is the most desirable. When a payment can be made out of the proceeds of a successful transaction, the actual impact on the Seller’s cash flow is minimal.
If a real estate agent was paid on an hourly or service based model, the performance would not compare to the success achieved under a results based model. It is little wonder that the real estate industry has not moved from commission based compensation despite the other forms of business models that have come and gone over the years.
There is no doubt that commission based sales provide both the Client and the Agent the best solution for the complex territory that real estate industry covers.
CMHC Housing Outlook Session: Forecast for Vancouver Housing Market
August 18, 2010
Presenter: Robin Adamache Senior Market Analyst for Vancouver Region
August 18,2010, Vancouver - Senior Market Analyst, Robin Adamache began her session by talking about the overall economy in BC. Real GDP up 2.7% in BC although what happens in the USA affects us directly in GDP, so predictions must be done with an eye on how conditions are in the States.
Lower mainland is looking forward to 29 Billion in major projects in the next year…including the New Surrey Hospital and the Evergreen Line. Job growth is at 2% vs. a decline last yr of half a percent. Good solid full time jobs are being created, Ms Adamache quipped that these were not “McJobs”.
Migration growth continues at the same pace as last year’s 58 thousand new migrants into Vancouver area. There will be approx 18 thousand new households in need of housing each year over the next few years if not longer.
The CMHC expects that there will be a gradual increase in interest rates next year. Robin made a point of reminding everyone that interest rates have been at a historic low for a sustained period of time. Any increases will be gradual, but they are expected.
Canada remains about 20 times lower than the US in mortgage defaults. In short, Vancouver has a stable economic environment. There are lots of people moving here and buying here. The question was asked, “Who is buying?” 6% of existing Vancouverites plan to buy.One third of buyers will be first time home buyers, while sixty percent are move-up buyers, and 25% are downsizing.
Despite all of this seeming good news, the reason it is not a crazy hot market is partly due to the changes in lending policies, and the rise in interest rates. The market is in the “balanced” range of 40 to 60% of the sales to listings ratio. Prices will rise next year at about the rate of inflation. There is an ample supply of listings in the West Side. Peak prices were reached earlier this year, but have dropped slightly since. The activity in house sales has shifted to the higher price ranges. 57% of the activity on the MLS has been in the 1.25 to 2.25 million dollar range. Downtown condo prices have dropped by around 3%. Coal harbour average condo price per sq ft is 852; False Creek = 805; West End = 605.
Price growth in 2010 will close out in the average range of 9 -11% due to the price growth and activity earlier in the year. Speculative activity is not an issue and is down according to statistics. Research shows that the speculators left the market in 2006 and have not been a factor since. While average mortgage carrying costs remain higher than average rents, the vacancy rate is at 1.7% in Vancouver.
Summary
Economic conditions in the Vancouver CMA will be favourable for the housing market this year and next
Major projects worth approximately 28 Billion are proposed for the Lower Mainland area
As the economy gets traction, some of these proposed projects and some of the 4 Billion worth of project currently on hold will move forward
Vancouver’s job market is also expected to pick up as the economy improves over the next eighteen months
Population growth will add to housing demand, an estimated 40,000 people are expected to move to the Vancouver region each year, adding about 18,000new households in need of housing
It will be important to keep an eye on higher mortgage rates which may dampen homeownership demand, especially for those who are more sensitive to the impact of higher rates.
While none of us can truly predict the future, except that octopus in Germany that predicted the World Cup winners consistantly, there are certain indicators that we can look to in making forecasts for the real estate market.
Vancouver is in the unique position in Canada of having a limited supply of land available for development, while at the same time having an ever growing demand from international, and interprovincial immigration.
Post-Olympics Vancouver has seen an embarassment of riches in the tourism industry. June and July are showing that the high end hotels in Greater Vancouver are at phenominal occupancy rates. These types of high end hotels provide the city with high end tourists, many of which are willing and able to own secondary homes internationally. The exposure to all that the Vancouver life-style has to offer is a great advertising vehicle to this market. This same prospective buying group is also being enticed into the city via the new convention centre, which is bringing in industry groups from around the world for professional gatherings.
Household growth in Vancouver is predicted to be 32 thousand per year while housing starts lag behind at an estimated 14 - 16 thousand per year. This scarcity of demand will continue to drive the Vancouver market. There has been a market adjustment recently, but this only slows down the upward price pressure and doesn't remove it. Vancouver is not in a bubble. The price growth will still be a healthy 8 to 9 % year to year increase.
The cost of construction in Vancouver is higher than in other Canadian markets. This is due partly to the demands of the terrain in the Greater Vancouver area. Issues related to earthquake proofing the buildings, soil density, bedrock, and elevation all play a part in making construction in Vancouver a costly venture. Added to the mix is the hard cost of land in Vancouver. Between the physical limitations, there are also economic restrictions and political restrictions that limit the supply of usable land for development.
The city of Surrey is poised to become the largest city in the Greater Vancouver area within the decade. Richmond, and the Tri-Cities are also growing quickly as mass transportation in and out of Vancouver improves.
The biggest challenge, and one of the most important moving forward, is the supply of affordable rental units in Greater Vancouver. The influence of foreign investors is very important in the development of a sustainable rental property supply. It is estimated that 32% of Vancouver residents are renters, and that number will increase as the need to replace the Baby Boomer workers builds over the next decade.
What all of this means to the real estate market is that the Vancouver area has all of the fundamentals to continue to grow over the foreseeable future. Certainly there will be bumps in the trajectory, but the lack of supply, coupled with the growing demand will continue to push prices and development.
Posted on June 22, 2010 by RE/MAX Select Properties
For 23 years, REAL Trends has ranked the largest residential real estate brokerages in the United States in an annual survey published each May. Upon its release, the REAL Trends 500 provides not only a clear snapshot of who is the biggest, but some interesting nuggets on the industry that can be drawn from the data collected. This year, for the first time, a similar survey was published for the Canadian market. By comparing the REAL Trends Canadian 200 to the two hundred largest firms on the US list, we thought the following findings were pretty interesting:
Although the average Canadian office in our sample had fewer sales professionals (40 per office vs. 51 in the United States), it generated far more transaction sides per year (592 vs. 367) and nearly twice the sales volume ($179 million vs. $97 million.)
That meant that sales professionals in our Canadian sample were over twice as productive as their U.S. counterparts (14.9 annual transactions vs. 7.2 in the US).
Over half of the firms in the Canadian survey would have cracked the top 500 of the U.S. list. Not too shabby considering Canada is one-ninth the population of the United States.
The power of consumer confidence is often addressed in economic forecasts by the various charter banks and government agencies. For many the impact is not appreciated or realized...but make no mistake it is a powerful mass dynamic.
In their book, SWITCH, the Heath Brothers talk about the impact of "peer perspective" rather than "peer pressure". It seems that people will respond to any given dynamic based on what others around them are doing. In research it has been observed that an individual in a room with smoke coming through the vents will respond differently than one sitting with others in a room with smoke coming through the vents. The individual will immediately leave to look for assistance, while those sitting together will wait and see what the others do. That same response is often seen in an audience watching a film, or play. People will laugh or applaud based in part on what they see their peers doing.
Recently I succumbed to the power of peer perspective when a young paperboy came to my door. I didn't have any intention of signing up for paper delivery until he casually mentioned that "all of your neighbours are chosing the pre-payment plan via cheque". Before I realized what I was doing, I had my cheque book out.
Consumer confidence has the same power as peer perspective but on a larger scale. Mass media has used their influence in steering consumers. This was displayed recently in Canada when, despite the fact that we were not directly part of the American mortgage meltdown, the housing market dropped for a number of months. It was only after restoring the confidence of the consumer that the market came back in any signicant way.
The Bank of Canada recently signalled an upward move in the prime lending rate...and the Bank of Montreal responded by lowering their 5 yr mortgage rate. Both acting in different directions in an attempt to address the consumer in Canada. Like it or not, we work as a group...and part of our actions and responses are due to peer perspective. People see, people do...
Posted on May 26, 2010 by RE/MAX Select Properties
Vancouver rated fourth best city in the world for quality of life
AGENCE FRANCE-PRESSEMAY 26, 2010 7:03 AM
VIENNA - Vienna is the best city in the world to live while war-torn Baghdad is the worst, a survey said Wednesday, putting Europe at the top of the rankings with Asia and Africa trailing.
The Austrian capital "retains the top spot as the city with the world's best quality of living," British consultancy firm Mercer said in its 2010 Quality of Living Survey.
Swiss cities Zurich and Geneva followed in second and third places respectively, while Vancouver and Auckland in New Zealand were joint fourth.
For its annual survey, Mercer assessed the quality of living in 221 cities worldwide, measuring them against New York with an index score of 100 points as the base city.
Vienna, which also took the number one spot last year, scored a total 108.6 points, while Baghdad scored the lowest with just 14.7 points.
European cities continued to dominate the top 25 cities in the survey, Mercer said, while Canadian cities also had a strong showing.
Among cities in Britain, London ranked number 39, Birmingham 55 and Glasgow 57.
In the United States, the highest ranking entry was Honolulu in 31st place, followed by San Francisco in 32nd.
Singapore was the top-scoring Asian city in 28th place, followed by Tokyo in 40th.
Baghdad ranked 221st, remaining at the bottom of the list. It was followed by Bangui in the Central African Republic, N'Djamena in Chad, Khartoum in Sudan and Tbilisi in Georgia.
Mercer also awarded cities eco rankings based on water availability and drinkability, waste removal, quality of sewage systems, air pollution and traffic congestion.
Calgary in Canada came top of this list, followed by Honolulu in second place and Ottawa and Helsinki in joint third place.
Port-au-Prince in Haiti ranked at the bottom of this table, Mercer said.
I have come to the conclusion that people just like the words, Twitter, and Tweet. Even those who have no idea about the social media revolution taking place know about Twitter. The name recognition aside, this cute little bird is actually leading the pack in the power of third party endorsements as the new way to navigate through choices and options.
Let's face it, if you want to hire a plumber you can look through the yellow pages and pick out the one that has the best ad, or you can google to find the best website. The third option is to ask your social media network group about their experiences in finding a good plumber. Which has the most power? For most people the endorsment from a third party will carry the greatest weight in making a choice like finding a good plumber, or finding a great real estate agent in a given neighbourhood.
Some pundants are annoucing the death of the search engine and the corporate website in their enthusiasm to embrace the power of social media like facebook and twitter. While it is a bit like those who predicted the death of radio when TV came in, there is no disputing that the internet landscape has forever changed with the growing interactivity available via social media tools.
Within the real estate industry the changes are coming fast and furious. Today it is necessary for an agent to be well versed enough in social media to have a facebook page and a youtube account to keep in contact with their clients and contacts. Many are engaged in blogging, sharing photos, and posting tweets in an effort to remain visible and available for their clients, Our website allows links to the agents individual websites, as well as links to twitter, linkedin, and facebook.
Passive use of the internet is becoming passionate use of the internet. This trend will help the cream rise to the top as people search out advise, experience, and opinions from their third party network friends.
I recently watched an interesting visualization of the median house price index for Greater Vancouver over the last 40 years. The animation places the viewer in the seat of a roller coaster as it climbs and drops relative to the housing market. Apart from being very entertaining to watch, it also clearly demonstrates how quickly the environment can change in the Greater Vancouver housing market.
Following market trends is only accurate in the past tense. One cannot truly understand the direction the market will take until the change is in motion. Presently in Vancouver there seems to be a shift occurring. Reviewing the MLS statistics, and the RE/MAX numbers it appears that the listing inventory is rising faster than the housing demand. Listings are up, but sales seem to be slowing down. This is happening despite the fact that the charter banks have warned that they will be raising their interest rates by summer.
The fear that house prices have risen beyond what the market will bear may be slowing down the buying frenzy of the last few years. The price of a condo in Vancouver is reaching the unaffordability level for the average citizen. The price of properties in this wonderful city have reached a level more than ten times the average wage of a Vancouverite. Those who caught the roller coaster at the bottom of the climb have done very well over the last 7 years in this market.
Once the HST effect has flowed through the local economy, the question of affordability will come into a clearer focus. Vancouver has always been higher priced than its neigbouring provinces because of it's desirability as a location. The recent olympics have proven to be a magnet for some international tech companies as well as those well-heeled enough to own properties internationally.
The desire to own property on Canada's west coast might be slamming against the reality that those without a seat on the roller coaster could be in for a long wait to buy a ticket.
Posted on April 28, 2010 by RE/MAX Select Properties
RE/MAX Recognized as the Most
Trusted Real Estate Brand in Canada
(Kelowna, BC, April 28, 2010)
– RE/MAX has been awarded Most Trusted Residential REALTOR® as
voted on by readers of
Reader’s Digest magazine. The survey conducted for the annual awards revealedthat the majority of Canadians trust RE/MAX for all their residential real estate needs, ranking RE/MAX associates five-times more ‘trusted’ than the second most trusted brand.
“Our associates should be proud and honoured to receive the confidence of Canadian consumers as the Most Trusted Residential REALTOR®,” says Elton Ash, Regional Executive Vice President for
RE/MAX of Western Canada. “It’s an inspiring merit that the best trained and most experienced agents
have received for providing valuable assistance to so many families.”
Ash believes that this distinction awarded to Canadian RE/MAX associates is due in part to two notable
attributes. The first being “Premier Community Citizenship” - a quality that RE/MAX associates share
by being ever-mindful of the impact they make locally as they are involved with their communities
through volunteering, fund-raising and more.
The second is that RE/MAX associates carry more professional designations than any other REALTOR® in Canada. RE/MAX agents are invested in additional education in specialized areas such as Senior’s representation, commercial brokerage and luxury homes.
RE/MAX is Canada's leading real estate organization with over 17,500 sales associates situated
throughout its more than 680 independently-owned and operated offices across the country. The
RE/MAX franchise network, now in its 37th year, is a global real estate system operating in more than 70
countries. Over 6,500 independently-owned offices engage over 115,000 member sales associates who lead the industry in professional designations, experience and production while providing real estate services in residential, commercial, referral, and asset management.
Spring is the traditional busy season for real estate in Greater Vancouver, as in most of the Western World. This year is no exception. The signs are out in full force across the region. From Richmond to Coquitlam and through the West Side, the signs are popping up like the leaves are filling the trees.
There has been much speculation regarding what this "post-olympic" market will look like. For the most part it is turning into a typical Vancouver Spring Market. There are a few clouds in the horizon that need to be watched carefully...
The change in bank lending policies came into effect on April 19th. This may have an impact on Investors and first time home buyers, requiring them to have more "in-hand" cash before seeking financing. Although this may create some slowing of the market, it is not enough of a deterrent to impact heavily on demand.
The coming HST is of concern to many. It will impact on the amount of commission that a Seller will pay. Prior to the HST Sellers only had to pay the GST, as there was no provincial component in commissions earned. Now the sales tax becomes a blended entity with the service tax, it will create a 7 % increase in the amount due to the Brokerage on closing.The increase in listings thus far does not suggest that some are looking to beat the tax by selling prior to July. If the listings numbers continue to outpace seasonal norms into the late spring and early summer, then it could be argued that consumers are realizing the savings that will occur with a sale prior to July.
The rise of the Canadian dollar may help to slow down out-of-country speculative buyers, but it has been argued that these types of buyers are a small minority of the buying market.
Some concerns have been expressed regarding the potential increases in interest rates projected for the summer. The Bank of Canada may be looking to increase the rates, but with the relatively low inflation numbers being posted, the Bank may reconsider the increase. An increase in rates may do more harm than good for the Canadian economy, which seems to be moving along very well at this point.
The RE/MAX signs out in the yards across Greater Vancouver are a sign of the times. Inventory is outpacing Buying at this point...but demand doesn't seem to have wained at all.
A steady influx of new listings has helped create a balanced ‘typical spring’ housing market in the Greater Vancouver region.
The Real Estate Board of Greater Vancouver (REBGV) reports that new listings for detached, attached and apartment properties in Greater Vancouver totalled 7,004 in March 2010. This represents a 60 per cent increase compared to March 2009 when 4,385 new units were listed, and a 52.1 per cent increase compared to February 2010 when 4,606 properties were listed on the Multiple Listing Service® (MLS®).
At 13,538, the total number of property listings on the Multiple Listing Service (MLS®) increased 19 per cent in March compared to last month, but remains 7.6 per cent below this time last year.
“The total number of homes listed for sale on our MLS® is at its highest level in 10 months, which translates into more options and variety for those looking to buy during the traditionally busy spring period,” Jake Moldowan, REBGV president said.
Residential property sales in Greater Vancouver reached 3,137 in March 2010, a 38.5 per cent increase compared to March 2009, a 4.7 per cent increase over March 2008, and a 12.4 per cent decrease compared to March 2007. The current figure also represents a 26.8 per cent increase compared to the 2,473 sales recorded in February 2010.
“With a sales-to-listing ratio of 23 per cent, we see a healthy balance between buyer demand and seller supply in the marketplace,” Moldowan said.
Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 20.3 per cent to $584,435 from $485,845 in March 2009. This price is 2.8 per cent above the previous high point in the market in May 2008 when the residential benchmark price sat at $568,411.
Posted on April 16, 2010 by RE/MAX Select Properties
Four Trends That Will Impact Marketing
Touch: From the iPhone and Google Nexus One to the iPad, the coming plethora of touch-tablet computing validates that we are moving away from fixed computer work stations. Along with that, the constructs of using a keyboard and mouse will quickly go the way of the dodo bird. Some are saying that kids today will learn to type on glass, others think that kids will soon be learning to type on air, and that all manipulation and creation of media and information is going to be multi-touch in a simple and intuitive way…think of Tom Cruise in the film, Minority Report. Get ready for the humanization and personalization of hardware as we begin to touch way more than type.
Analytics: Walmart’s success is driven by its data. As the Internet creates multiple touch points where any individual can report and publish to everyone else, like we are already doing with Facebook, Twitter, or blogging… imagine what real-time analytics are going to do for business. Think about how we're going to be pushing well beyond static data into understanding the social side of information as well. What are we talking about? It's not just about knowing who is doing what on our websites, but it will be about knowing who those people are, who they are connected to, how much of an influencer they are and what that could mean to our businesses - all in real time. If you thought we were already drowning in data, prepare to be swamped with valuable insights on top of that.
One-line: You will no longer be "online" and then on your mobile device. It's just one-line. Many businesses still divide how they develop, strategize and execute on the Internet with what's happening in the mobile space. Yes, the iPad is one kind of link between a desktop or laptop and a mobile device, but the bridge is extended even further as all devices become untethered from wires and fixed locations. The "online experience" is just that - something you can experience in front of a big screen at your home or office, or in the palm of your hand. How we adjust our websites for this coming shift (and coupling it to trend #1) is where the rubber will meet the road.
Location-aware: The recent hype and excitement over Twitter and Foursquare is really more about mobile and location-aware online social networks than whether or not Jesse James is actually following one of Tiger Woods' mistresses on Twitter. The ability to not only publish information, but to receive and engage with content based on where you physically are changes everything. From the value of the content while you're "on the ground" to how search, information and referrals are displayed to you based on where you're presently situated. Whether or not Twitter and Foursquare become as irrelevant as Friendster and Second Life is secondary to what these platforms really offer the real estate world - the ability to connect and publish to those who are physically close to us and interested in what we have to sell.
Posted on April 9, 2010 by RE/MAX Select Properties
There has been a noticeable increase in real estate inventory in the Vancouver west side market area.
The rise in inventory however is offset by the actual number of sales. This creates a more balanced housing market moving into the traditionally active spring market. Sellers have an incentive to list their homes now before the HST comes into effect in July; while at the same time the small jump in interest rates is motivating Buyers to act before their pre-approved rates expire.
January thru March, 2010 has seen a rise in housing and condo inventory by 38% and actual sales increased by 52% with the condo market up by 45%
The first quarter of 2010 compared to 2009, shows an increase in the average sale price for houses on the west side of Vancouver by 47% and by 30% in condos.
Albert Einstein died in 1955, having seen his concepts create a new world of understanding during his life. His passing was at a time when the cold war between the Soviets and the Americans was at a point of escalating. Much of the worry of that year, and the decades that followed were with the growing number of nuclear weapons that both super powers were amassing. The creation of the weapon that could effectively wipe out much of life on our planet was due in part to the theories that Einstein had developed.
Albert Einstein was not only a radical thinker, but he also was an amazingly creative communicator. Although his ideas are beyond the understanding of most of us, he was able to demonstrate his ideas using common speak. His description of the speed of light was done by referencing a moving train, while his explanation of gravity and time was done by the mental picture of an elevator.
The context of communication is so very critical. When looking at something as simple as market trend data in Vancouver, the numbers can be skewed to reflect the researcher's bias, or to amplify opposing opinions. Our age is quickly moving forward in the means that we communicate ideas and opinions. Today Twitter is evolving weekly to address the quick fix communication needs of social media. To some the world view has transformed into a series of games...spurred on by a generation that has grown up with video games and virtual reality. Looking for a home in Kerrisdale becomes an extention of gaming and social media in method and mindset.
The language of the landscape is changing, and as Einstein once said, "We can't solve problems by using the same thinking we used when we created them". The notion of communicating value and service is becoming increasingly difficult in a culture and marketplace where information can be accessed quickly and effectively. The answer to meeting the communication demands in the real estate marketplace is not to continue to use the same thinking of even two years ago. REALTORS(r) must find new ways to communicate service and value to the new consumer.
The context of the information is important, and although information is freely and readily available, it must be interpreted properly and effectively in order to best serve the constituents. As Albert observed, "Sometimes one pays the most for the things one gets for nothing."
The hidden costs are often greater than the sticker price. This is why having effective communication is so critical. Understanding the information is more important than having access to the information,
Nothing reflects the need to communicate properly in the right context than Albert Einstein's last words. Before he passed away, he felt the need to share some final thoughts. The only person in the room was the attending nurse. She heard the final words of the greatest thinker in history. Unfortunately, he spoke them in German, a language the nurse did not understand.
For some inexplicable reason, the Competition Bureau has been on a witch hunt against the Canadian Real Estate Association for some time now. It may be that someone thought that this highly effective and progressive industry was an easy target. Certainly with the right spin, and with the media on side, it is easy to create an unsympathetic picture based on old charicatures of REALTORS(r).
It is unfortunate that they are attacking one of the truest free market sectors in the Canadian economy. The Real Estate Industry is one of the most competitive industries in North America. Each Brokerage competes aggressively with it's rivals because remuneration is based on performance. Even within an office, the agents compete against each other for Listings and Buyers. Despite this, the Competition Bureau is smearing CREA and it's almost 100,000 members. The media has been allowed to create untrue pictures of what the issues are surrounding the Competition Bureau's concerns.
Meanwhile, the Bureau does not acknowledge the important changes that CREA has made to address those concerns. Changes that the Bureau itself had recommended.
The Canadian Real estate Association (CREA) posted recent statistics showing the change between January and February of this year. A total of 42,799 homes were traded last month, down 1.5% from January, as a gains in Toronto were offset by a decline in units sold in Vancouver.
The Winter Olympics were cited as a possible factor in lower sales in the province last month. Unit sales were down 13.3 %. Compared to Ontario's growth of 3.3% during the same period.
Continuing low interest rates could further prompt home resales this spring ahead of new mortgage rules set to take effect in April. The introduction of the harmonized sales tax will also add to the buying mood of the consumer this spring, as buyers seek to purchase before the tax change takes effect.
The average Canadian house price in February rose by 18.2 % from last year.
Currently the most affordable Canadian city for housing is Thunder Bay, Ontario with a February average house price of $142,280, up 23.6 % from a year ago.
The most unaffordable Canadian city for housing continues to be Vancouver, BC with a February average house price of $658,984. That is also an increase in price from a year ago of 22.4%
Most experts agree that the Canadian housing market will be moving to a more balanced market in the fall, while the spring will continue to heat up to answer demand.
Posted on March 8, 2010 by RE/MAX Select Properties
FINTRAC fines brokerage $27,000
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has assessed its first fine against a real estate brokerage. HomeLife Effect Realty in Hamilton was fined $27,000 for violating the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
FINTRAC says the brokerage was fined for committing four violations: - Failure of a person or entity to appoint a person to be responsible for the implementation of a compliance program;
- Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer;
- Failure of a person or entity to assess and document risk; and
- Failure of a person or entity that has employees, agents or other persons authorized to act on their behalf to develop and maintain a written ongoing compliance training program for those employees, agents or persons.
FINTRAC has had the authority to issue administrative monetary penalties in response to non-compliance with the act and related regulations since December 30, 2008. It says penalties are used as a last recourse after other measures to ensure compliance with the law have been exhausted.
“FINTRAC remains committed to working with reporting entities in ensuring compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations,” says the agency in a news release. “The new penalties are a tool to encourage compliance.”
FINTRAC is an independent federal government agency with a mandate to assist in the detection, deterrence and prevention of money laundering and the financing of terrorist activities.
First-time buyers interest-free down payment program
The new BC Home Owner Mortgage and Equity (HOME) Partnership program helps eligible BC residents purchase a home.
The program offers first-time home buyers who have saved a down payment:
A down payment loan of up to 5% of a home’s purchase price to a maximum of $37,500, on a home with a maximum price of $750,000.
This loan matches the buyer’s down payment and is interest-free and payment-free for five years.
After five years, buyers can either repay their loan or enter into monthly payments at interest rates that are current five years from the date of the loan.
Loans through the program are due after 25 years – the same length as most mortgages.
To qualify for the program, home buyers with a registered interest on title must reside in the home and be a:
Canadian citizen or permanent resident for at least five years;
resident of BC for at least one year immediately preceding the date of application; and
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Real Estate Board of Greater Vancouver (REBGV), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the REBGV, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the REBGV, the FVREB or the CADREB.