Realestock Blog

If the constant griping by renters wishing they could get into the home ownership game hadn’t tipped you off – in many parts of the country, people think that Canadian real estate is just too expensive. But are they right? Well, the complainers have won this round - venerated magazine The Economist has decided to agree with them. 

According to a survey of global real estate markets, housing prices in Canada climbed 4.5% over prices in 2009, making the average Canadian house cost a whopping 23.9% more than it’s worth – at least according to the Economist.  The magazine determined the “fair value” of a home by comparing the ratio of current house prices to current rents with the long term price to rent ratio – ie, the purchase price is divided by the rent it could earn per year.  If it is significantly more expensive to purchase a home rather than rent one, housing may be over-valued, a situation the Economist kept finding in Canada.

Think that’s not scary enough? The Economist also indicated housing prices in Canada had increased 70% between 1997 and 2010. Clearly The Economist isn’t the only source finding housing overvalued in Canada – one of the graphics above shows the Google instant result when searching for Canadian real estate news – the only other suggestion? “Canadian Real Estate Bubble.” 

While Canadian real estate prices were dramatically over valued, they weren’t the worst offenders. The dubious honor of most overvalued housing in the world went to Australia. According the magazine, anyone who buys in Australia is paying 63.2% more than it is actually worth. Countries like Hong Kong, Sweden and France also led – traditionally places that have high real estate prices. 

Read the full article by The Economist here.

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It’s fall! While most people profess that their favorite season is summer, Fall has a lot of fans. Fall is my favourite season by a big margin (more sunshine than spring, less humidity than summer), and that means I always want to get into the Fall spirit by decorating my house. 

That said… I prefer a more minimalist approach to décor. All my furniture is white. Lines are clean. Clutter is forbidden. I might love fall, but I’m not going to start making Martha Stewart style pinecone bouquets and sticking them around my home, or suddenly feeling the pull of big wooly plaid blankets draped over all my furniture. First of all, who has the time for that? Secondly… just no.

So, if you’re like me, how can you feel like you’ve got a bit of fall in the home, without going full Little House on the Prairie?

Here are some fun, LOW HASSLE ideas, from my own mind and the internet:

1. White Pumpkins

They used to be rare, but nowadays they’re popping up in local grocery stores – white pumpkins, sometimes called ghost pumpkins are a neat way to get the shape of the season, but in a new way. You can:

• Line up white mini pumpkins on a mantelpiece
• Turn white mini pumpkins into votive candle holders
• Cut off the top and remove the seeds from a full sized white pumpkin. Don’t carve it though! Put a flower vase into the pumpkin and display some seasonal blooms - (note, these won’t last more than a few days inside – best done for a special occasion!)

2. Pinecones

Yes, I realized I just disparaged pinecone crafts, but this is as easy as it gets. Take a contemporary, low silver bowl or tray and then fill it with the nicest pinecones you can find. Looks seasonal, not kitchy.

3. Branches and sticks

Trees and wood grain have been big design trends for a while now, so don’t pay for artfully arranged, carefully chosen dead branches from a florist, go pick your own out. They’re plentiful this time of year, and FREE. Besides, what says fall more than a branch without leaves? The easiest way to bring the outside in. Best yet? These displays don’t need water.

Photos: Pumpkin Vase, Martha Stewart.com; Branches, Vastu Design Clique

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The Royal Bank of Canada has raised serious concerns that for most people housing is simply too expensive in Vancouver.  

On Monday, RBC released its quarterly report on housing and affordability. According to the report, on average, the typical Canadian homeowner spends 48.9 percent of their household income on servicing the mortgage on a median two-storey home – an increase of 2.1 percent overall due to rising mortgage rates.  

However, in Vancouver it’s a very different story – the proportion of income required to service the mortgage on a median two-story home or a detached bungalow (a smaller starter home anywhere else in the country) has risen to an astonishing 70 percent.  The situation is not much better for owners of apartments or condominiums – servicing the mortgage on a condo consumes 43 percent of household income.

The report singled out Vancouver’s white hot housing market, but it wasn’t to pass around congratulations: "RBC housing affordability measures are very close to their all-time high, which points to significant underlying stress and raises a red flag," said RBC Economist Robert Hogue. “Generally we have dismissed the case of housing market bubbles in Canada, but the situation in Vancouver is probably the closest to one in the country.”

This means the market could take a big hit unless the pressures ease - "very poor affordability is likely to restrain demand in the period ahead," said Hogue. According to the report, BC and Ontario saw the worst deterioration in housing affordability as prices neared the record highs seen in 2008.

Photo: Even condos in Vancouver may be out of reach for most homeowners. Credit: Beaster725, Flickr

Sources: Bank Raises Red Flag Over Housing Affordability, The Vancouver Sun; House Costs Near Record High in BC, The Province; Housing Becomes Less Affordable, The Globe and Mail.

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The Chinese real estate sector could be in for a big shakeup soon. Many pundits are predicting that the government is getting ready to introduce a property tax. 

While most people in the world regard property taxes as a way of life, in officially Communist China there’s no government taxes on the books for private property ownership because originally there was no private property ownership at all. However, things have changed dramatically in recent years - market demand and rampant speculation have fueled a huge real estate industry, and have helped push the Chinese economy into overdrive – annual growth is over 8% a year (as opposed to the 2 or 3 percent that more established economies grow at during boom year).  

So why introduce a property tax then when it could weaken one of China’s strongest economic sectors? According the Financial Time’s Geoff Dyer, there are a lot of good reasons to get the Chinese middle class acquainted with tax:

A property tax is the favored policy tool of many a reform-minded economist. It would help reduce the rampant speculation in the real estate sector by introducing a cost for holding empty property. And it would help develop a reliable source of income for cash-strapped local governments - one of the key long-term policy challenges for Beijing.

While any property tax rolled out would likely be very minimal at first, “a small annual levy on second or third homes in the luxury sector”, there are still fears that is could prompt a massive sell off and scare away speculators – one of the key factors in the ever increasing property prices.  

In April, Beijing rolled out a series of much needed measures to cool overheated home prices, and since then, speculation that a real tax is coming has intensified. "There are several plans on the table. While we don't know which one will be chosen, it is more likely to be implemented by New Year's Day," a market source said in an interview with the Hong Kong Standard. "Such a move does not require National People's Congress approval, only the State Council's, so the time frame is shorter."

Meanwhile, commercial real estate in China remains strong, even with high vacancy rates.  The Wall street journal has reported that China’s insurance regulator has just amended the rules that govern how insurance corporations invest their assets. Chinese insurance companies are now allowed to invest up to 10% of their assets into commercial real estate – a move which could introduce as much as 460 billion yuan ($68.5 billion USD) of potential demand into the commercial real estate market.

Sources: 

Does Beijing's Clampdown on Property Still have Force? - Geoff Dyer, The Financial Times

Property Tax Revisions Loom as Prices Continue to Spiral - Beth Ye, The Hong Kong Standard

Insurers are Likely to Boost China Property Demand - Aaron Back, The Wall Street Journal 

Picture:

Lensfodder, Flickr

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Maybe you live in a dreary rental that you can’t do much with. Maybe you’re dying to change something about home, but you don’t have much of a budget. Maybe you’ve got the time to embark on a weekend home improvement project, but you’re lacking inspiration. Or maybe you just like to dream?

No matter what the reason, going online can be a huge source of ideas, inspiration, daydreams and super practical advice for anyone with the decorating bug. I certainly have one... so here are a few my favourite places to find inspiration when I’m online! 

Apartment Therapy: One of the most popular online design sites, and a personal favourite of mine. Apartment Therapy works hard to be a fantastic resource - it’s constantly updating during the day with a great mix of DIY projects, design showcases from around the world, interviews with artisans and designers and even photographic tours of Apartment Therapy reader’s homes from around the world. If you like homes and design, it should be in your bookmarks folder.

Freshome: Skewing much higher in the budget range than Apartment Therapy. With plenty of pictures and information about some of the most stunning and inventive architecture in residential homes today, reading Freshome is a fantastic way to fuel your daydreams if you’re a fan of architecture. If that’s not entirely your speed, don’t be deterred - there are still plenty of great articles and inspiring ideas on the site.

Design*Sponge: This site is almost the polar opposite of Freshome. Where is the former is about offering up high end inspiration, Design*Sponge is all hands on, affordable and ever so slightly twee. There is a great focus on putting up fun, practical DIY projects - so if you read Design*Sponge, you’ll never be bored and wishing you had something to do on a dark, wet winter afternoon! Also not to miss: the period under $100 product round ups.

Ikea Hacker: Sometimes it’s good, sometimes it’s amazing, occasionally you’ll want to do it yourself, but a lot of the time, you wonder why anyone would ever do that to perfectly good furniture... It’s Ikea Hacker - the blog where readers from all over the world showcase their (occasionally misguided) efforts to improve on the products from the world’s most popular design store. Whatever the outcome, the owners of the furniture in question are happy, and usually it’s structurally sound...

And there you have it - a round up of some of my favourite websites for design inspiration. Got suggestions of your own? Share them in the comments!

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Will the bubble burst or won’t it? The Canadian Centre for Policy Alternatives is suggesting Canada’s housing markets could be poised for a big crash akin to the US housing meltdown, but the Canada Mortgage and Housing Corporation is painting a rosy picture and predicting more starts and modest price increases in 2011.

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To say the HST has upset realtors and real estate professionals would be a bit of an understatement. They’re mad. According to a recent survey conducted by Royal Lepage, 43.9% of realtors felt that the HST was playing a big part in the cooling housing market.

Who could blame them? Both Vancouver and Toronto, the biggest markets in the provinces where HST has gone into affect have seen big downturns. In Toronto, sales fell 34% in July, to sit at their lowest point since 2002. The drop was even sharper in Vancouver, with a 45% drop in home sales.

However, the question remains for many people – how does the HST affect me? Both the BC and Ontario provincial governments are quick to point out that previously owned homes are exempt from the HST – it only applies to new construction over a certain price point. However, the story isn’t so simple. The HST affects people looking to buy and sell their home in a lot of different ways – from realtor’s commissions to the materials used to do repairs.

So – how does the HST really affect real estate – from top to bottom? We made you a chart of all the changes because of the HST. If the price stayed the same, it’s not on the chart – we’ve only listed products and services that will be more expensive now.

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Is it the HST? Creeping interest rates? High prices? Something is killing the Canadian real estate market - Canadian real estate sales have dipped sharply – and expectations should be following suit.

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Selling real estate can be a big headache. Finding a realtor, showing the house, entertaining offers… then worrying about taxes, fees and other administrative details can make the process seem far more complicated than it needs to be.  So, if you want to sell your home, doing your homework before you get onto the real estate listings can save you a lot of hard work and sleepless nights.

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