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canrealestateIf 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.


How To: Decorate for Fall

Posted by: admin in how toDecorating on

a99889_05_pumpkincenterpiec_lIt’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.

 

branches-in-a-vase-284x3003. 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


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.


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


The Best Online Design Resources

Posted by: admin in tipsDecorating on

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!


bubbleWill 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.
The CCPA made a big splash in the headlines today when they released a report that suggested property values in some markets could drop up to 38% in less than three years. The cities hardest hit from a massive housing correction would be Edmonton and Montreal, but Vancouverites would stand to lose the most – nearly $200,000 on the average home if the CCPA’s worst case scenario predictions are true.
"The bursting of housing bubbles is a rare event in Canada, but the steep rise in house prices in so many cities displays all the hallmarks of an accident waiting to happen," according to David Macdonald, author of the report. The report went on to speculate that at best, Canadian markets were long overdue for a correction, and at worst a full US style market collapse.
Meanwhile, the CMHC’s chief economist Bob Dugan forecast that resales of existing homes would stay practically flat during 2011. The Corporation is predicting between 450,000 and 785,700 resales in 2010 and an average of 456,000 resales in 2011. The CMHC also slightly revised its housing starts estimate – 184,900 units for 2010, very slightly up from the previous estimate of 182,000 units. On the price front, the CHMC is betting more restrictive lending rules and increasing interest rates will deflate any housing bubbles and keeping prices stead in 2010 with minor increases in 2011.
However, even bank economists feel that some markets may be overheated. In a Toronto Sun article, Benjamin Tal, a senior economist and real estate expert at CIBC World Markets expressed concern that markets were “overshooting”. While he was unwilling to use the word bubble, he did say that prices are headed for a drop.
According the CCPA report, the average house price has far exceeded median family incomes, and that spells trouble. Prices for an average family home range anywhere from 4.7 to 11.3 times a family’s annual income – whereas only 10 years ago, they averaged between 3 and 4 times the price. While sales are down (as much as 40% in some markets) prices continue to remain steady, even as interest rates creep up.  The CCPA has warned that even a modest interest rate increase of 1.25 % would push many over-burdened mortgage holders over the edge and trigger a US style housing crash.
Whatever the case is, with even banks feeling cautious and the HST causing uncertainty in two of Canada’s largest housing markets, any potential homeowners should carefully consider their options before taking the plunge.
Sources:

Picture:
Reini68, Flickr

So you've painted, repaired, cleaned and gardened to within an inch of your life – yet buyers are still underwhelmed with your castle. What do you have to do to get your home a little love? You might want to try staging your home.  A study by Coldwell Banker Realty found that homes that had been staged sold in just under half the time, and for over 5% more than homes that hadn't been.
Home staging can be expensive, but it doesn’t have to be. You can pay a professional, or you can follow this guide we've put together by consulting with professional home stagers. Start by assuming your house is cleaner than it’s ever been, and there are no minor repairs that need to be done.
What you’ll need:
  • A critical friend who hates clutter
  • Containers and boxes for storing extra possessions in
  • A strong will
  • Lots of Patience
  • People to help you move furniture
Step 1:  Review
Invite your critical friend over and tell them they don’t get a snack until you walk them though the house. Ask them to point out everything that they think is cluttering up your rooms and take notes. Observe where their eyes are drawn when they enter a room, what features they like best, and what puts them off. If they notice dirt, grime or little things that need to be fixed, make note to go back and take care of those spots.
Step 2: Purge and Pack
Now that you know that your bookcases look overstuffed and your personal collection of vintage staplers is weird, you can start taking things out of your space. Don’t think of it as a chore either – think of it as pre-packing for your big move. Ditch family photos and personal brick-a-brack. Take your groaning stack of old magazines to be recycled and pack away all those extra shampoo bottles lining your bathtub.  Consider donating extra stuff you know you don’t really need (books you’ll never read again, unwanted Christmas gifts) and renting a storage locker for the things you do (out of season clothes, extra bedding, personal pictures, family heirlooms etc).  Getting rid of little things like fridge magnets, countertop appliances, figurines, and floor mats can make a room look much bigger and making your home impersonal works wonders because it helps buyers imagine they could live there.
Step 3: Clean Out Your Closets
Buyers are just like you. They have a mountain of stuff they’ll need to stash away once they’re in their new home. Take half the things out of your closets and neatly sort the rest. Invest in some storage boxes to hold little things and colour coordinate the rest. This way when buyers look in your linen closet (and you know they will), they’ll see a neat pile of linens, and not a mess of multicoloured beach towels jammed into every available inch of space.
Step 4: Clear the Way
Consider getting rid of some furniture. Yes, having an extra couch is great because of the kids and the dogs, but if getting rid of it makes the living room look much more airy and open – not to mention easier to get around, it should be a no brainer! If your basement is filled with shabby old furniture, it might make the whole room look shabby, even if it’s in good repair. Ditch the old stuff and put in more contemporary furniture. You can rent furniture, borrow from friends and family, or even move your furniture around within the house. Don’t forget pictures and artwork for the walls either – the house should look like someone lives there, but they don’t have a lot of stuff.
Step 5: Maximize and Minimize
Rearrange your rooms to take advantage of your home’s best features. Move the sofa away from the bay window to let it give more impact – conversely move a bookcase in front of faded wallpaper. While these layouts might not be how you’re used to having your furniture, they’ll be the best for showing off your home’s assets and minimizing flaws.
Step 6: Freshen Up
Now that your house is de-personalized, de-cluttered and sparkling clean bring in some life. Fresh flowers can bring a big impact to a room and make it smell great. Open all the windows for at least 10 minutes the day of your open house to clear out the air. If your house still has some lingering personal odours, try baking a batch of chocolate chip cookies right before the showing! Buyers will smell the cookies and not your dog.

Step 7: Set the mood
Turn on all the lights, open all the blinds and clean any last minute messes up.  Voila – your home is ready to knock people’s socks off.

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.

 

Service

Previous Tax

BC Tax + HST

Ont Tax + HST

Notes

House Cleaning Services

5%

12%

13%

 

Electricity and Heating

5%

N/A

13%

Only subject to HST in Ontario

Home Service Calls – ie, plumbers, carpenters, electricians, etc.

5%

12%

13%

Applies to repairs for both appliances and property

Landscaping/Snow Removal

5%

12%

13%

In BC Fruit trees and food plants are also now subject to HST, but not ornamental plants

Home Renovations

5%

12%

13%

 

Ontario – new homes/condos over $400,000

5%

-

13%

Property under $400,000 is exempt

BC – new homes/condos over $525,000

5%

12%

-

Property under $525,000 is exempt

Real Estate Commissions

5%

12%

13%

 

Windows, insulation, weather stripping, caulking

5%

12%

N/A

 

Movers

5%

12%

13%

 

Interior Design Services

5%

12%

N/A

 

Accounting Services

5%

12%

N/A

 

 

 

 

Want more information? The Ontario and BC Governments have more detailed charts and explanations on their respective websites.


tuscan slopeIs 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.
A year ago, Canadians marveled at the strength of the property market here. Prices and sales were up, while we noted quite smugly, that Americans were seeing record declines and price erosion in their real estate listings.
What a difference a year makes.
In 2009, Canadian home prices jumped  19% over prices from 2008 – compare that to 2010, when prices have risen a comparatively modest 5%, but sales are way, way down – as much as 40% in some markets. Meanwhile, the Canada Housing and Mortgage Corporation announced that housing starts are down again – falling for a third straight month, more than 10% from their peak in April.
Clearly demand is down, but prices aren’t set to follow suit.  Statistics Canada is anticipating that housing prices will rise by an almost imperceptible 0.3% in June – making that the 13th straight month that housing has gotten more expensive in Canada.  The Canadian Real Estate Association (CREA) is predicting a 7.3% decline in sales for 2011, but still expects housing prices to rise.
So, what’s going on in a formerly red hot market? A slowing economy, rising interest rates, and according to many realtors, the HST in BC and Ontario (two of Canada’s biggest housing markets) have all combined to make people re-asses their decision to buy real estate.
Unfortunately, as these factors aren’t poised to go away any time soon, which means that Canadians might need to get used to a… stable property market.
Over the last ten years, a booming economy and then unprecedentedly low interest rates pushed many people to buy homes and investment properties – statistics from CREA show that the average price of a house more than doubled in the last decade – climbing an incredible 110%.   However, going forward, the housing market might be much closer to the 1990s than the 2000s, if you ask Don Lawby, the Chief Executive of Century 21.
According to Lawby, the 1990s had a steady real estate market:  prices rose every year, due to real factors like inflation and natural market demand, but not factors like impending taxes, mortgage rule adjustments and speculators trying to get huge returns on their investments.
Is a stable property market bad? No – it’s probably better. People selling real estate will need to adjust to the fact that property may not be the get rich quick scheme it once was, but more buyers may be lured out of the woodwork, enticed by the safety of a stable market which promises no big gains, but no threat of huge equity destroying corrections either.  For years, everyone wanted to buy real estate to see how big they could win – those with a lust for gambling might just have to go back to the stock market.
Image: Canadians might just have to get to a market that rises slowly and steadily.
Credit: Robert Crum, Flickr


sell your homeSelling 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.
Step 1 - Decide what your home is worth:
This might seem like a no brainer, but many people don’t do this. They forget to factor the costs of improvements or pre-sale repairs into their home’s value. Getting the property appraised, then comparing it to other, similar homes can be very helpful. If you’re not prepared to accept what similar properties have fetched, you might need to wait. Only you can decide how much you’re prepared to gain or lose if you sell your house.  Set your minimum price and stick to it, unless you really need to get out of your current situation, it will help you decide what offers you’re willing to entertain.
Step 2 - Really get to know your Realtor:
Realtors can be incredible assets, but they don’t work for free. Ask them about their commission fees – what can you expect when you sell your home. Realtors can also help you figure out all the other taxes, fees and paperwork that will go with selling your home. Knowing what to expect ahead of time will make the process go much faster when it starts.
Step 3 - Scope out the competition:
Visit other open houses in your neighbourhood and see what your direct competition is doing. Ask your realtor what the best features of your house are, and how you can really use them to entice buyers.
Step 4 - Take care of repairs:
Sometimes it’s little things that can put off buyers – doing small repairs and freshening up paint doesn’t cost much, but it can make your house look far more appealing to buyers who aren’t interested in getting a property that looks shabby and comes with a to-do list a mile long. You might also consider having a professional inspector look at your home.  If there are serious problems with your home, you can have them fixed before putting them on the market and letting buyers discover them.  If there are not problems, you can show buyers that your home has been professionally inspected and they can have confidence in it.
Step 5 - Make it look great, inside and out:
Removing extra knick-knacks, clutter and personal items can also make a big difference. For better or worse, buyers will be looking for a blank slate that they can imagine themselves living in. You may love your bright pink sofa and shag rug, but some people won’t be able to look past it. If you’re bad at this kind of thing, consider hiring a professional stager.  The Canadian Mortgage and Housing Corporation (CMHC) has an excellent and thorough checklist you can work through.
And there you have it. If you start work ahead of time, you’ll have a property that looks great inside and out, has no major issues and has killer features that make it shine above the competition. Better yet, you’ll know how much money to expect from your sale, and will have already planned for the fees. Selling real estate isn’t without complications and hitches, but you can make it run as smoothly as possible.

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