Realestock Blog

The price of a new house in Canada rose slightly, prompting more and more people to worry that Canadian homes may be overvalued.  According to Statistics Canada, the housing price rose 0.2% in September, greater than the originally forecast increase of 0.1%.  Rapidly increasing prices over the past decade, including the 2009 recession had  increased speculation recently that Canadian housing could be caught in a bubble.

Montreal and Calgary lead the price increases, as developments in new areas brought slightly higher construction costs, which were passed onto the consumer.

In spite of bubble fears it's important to note that housing prices rose in only 10 of 21 Canadian cities, and housing starts fell 9.2% - the lowest rate in over a year, and the sixth straight month of declines.

In a move not typical for BC prices, Vancouver and Victoria actually contributed to keep the increase down, as both cities - typically known for their white-hot, and according to some skeptics, overvalued property prices - saw a 0.4% decline in housing prices between August and September. In Victoria, home of Realestock, prices have declined slightly both month over month, and year over year - a new home costs 0.6% less now than it did 1 year ago.

Overall though, the average price of a new house in Canada is still 2.7% higher than it was in September 2009, with the strongest year on year gains the cities of Toronto, Montreal, Oshawa and Vancouver.

Comment (0)

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.

Comment (0)

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.

Comment (0)

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.

Comment (0)

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.

Comment (2)

Comment (0)

Luxury real estate sales in Canada are soaring, breaking pre-recession sales records as buyers are capitalizing on low interest rates and increasing economic confidence.
RE/MAX released its first quarter Upper End 2010 Report on Monday, showing a marked increase in luxury home sales in markets across Canada. The report noted that, "Canada's sound banking system, political stability, and strong dollar are attracting foreign investment -- and that is spilling over into high-end residential real estate.”

According to Wayne Schrader, a RE/MAX Broker/Owner and specialist in luxury properties on Vancouver Island, consumer confidence is playing a big part in the rallying sales.
“Markets are picking up and turning the corner,” said Schrader. “People are realizing the big recession didn’t materialize in Canada, and at the same time, prices have come down and are much more attractive.”
The Conference board of Canada echoes Schrader’s sentiments - its economic forecasts predict the Canadian economy will grow at a healthy 3.2% in 2010. An upswing in the economy makes the current market conditions even more attractive, as buyers take advantage of the current low interest rates, noted Schrader.
But why have sales increases have been so sharp, in some cases bettering years that were fueled by the white-hot real estate markets of the time? According to Schrader, and the report, they key is balance.
High end property prices have softened from their previous peaks explained Schrader, which can make luxury real estate look like a better investment for some buyers.
“Ample opportunity and a good selection of product exists, and savvy purchasers are taking advantage of favourable conditions,” said the report.
According to the Elton Ash, Regional Executive Vice-President of RE/MAX in Western Canada. the luxury “segment of the market was hardest hit when the recession took hold, yet its comeback has been fast and furious.”
Comparative sales figures back up Ash’s statements. In the first quarter of 2009, high end property sales had slumped - only 411 properties classified as “upper end” were sold by RE/MAX across Canada. This year, the number has leapt to 1,111 - an increase of more than 170%.  Comparing that to 2008’s first quarter sales of 894 high end properties shows overall sales in Canada are still up almost 24% over pre-recession numbers.

Comment (0)

Bringing back our monthly feature on the most viewed listings on Realestock, here are the top ten most popular listings on Realestock.

1. Mountain Spirit Resort and Spa, Kimberley, BC

Mountain Spirit Resort & Spa in Kimberley, BC is your four season Rocky Mountain playground. Combining a four season skiing mountain residence with the luxuries of a world-class spa and spectacular slope-side restaurant; Mountain Spirit allows easy access to Trickle Creek’s championship golf courses, 1800 acre natural park with over 100km of trails to explore, fly fishing, mountain biking, horseback riding and much more. The nearby Canadian Rockies International Airport makes travel to and from Salt Lake City, Calgary and Vancouver convenient and accessible.

Price Range: $ 382,900-$648,900

2. Whistler Real Estate

The Luxury homes and condominiums in Whistler encompass the best of everything. From location and views, to the finest craftsmanship and attention to detail, you can expect the best. The location, skiing, outdoor recreation and scenery, plus world class fine dining, shopping and culture are just a few of the reasons why people choose to call Whistler home.

3. 1235 East Lake Drive, Fort Lauderdale, FL

This exquisite Fort Lauderdale estate features 20,753 square feet with 9 bedrooms, 9 full and 4 half bathrooms. A gated entry is monitored by a state-of-the-art security system with camera surveillance and infrared sensors to ensure you sleep well at night. Fabulous amenities include a state-of-the-art nightclub, putting green, gym, massage room and spa, wine cellar, infinity pool and 9-car garage. Limestone floors, a clay barrel title roof and Pecky Cypress balconies embellish the luxurious feel of this home.

Price: Previously listed at $ 14,999,000

4. Capella Residences Bahia Maroma, Riviera Maya, Mexico

Managed by Capella Hotels and Resorts, founded by legendary hotelier Horst Schulze, Capella Bahia Maroma will offer a new standard in heartfelt service, highly personalized lifestyle experiences and carefree living. Capella Bahia Maroma has the most exclusive golfing venue in all of Mexico; it is the only private golf course in the Yucatan. Each spa visit to the Capella Bahia Maroma’s Auriga Spa will be a personalized and sensory journey of aromas, textures and healing therapies. A perfect one-mile beach, within snorkeling distance of the Great Maya Reef, will beckon for long walks and splashing in the surf.

Price Range: $2.9 million

5. Cannery Lofts Condominium, Astoria, OR

Cannery Lofts Condominium has the best river view in Astoria! Walk along the beautiful river walk or watch the ships pass by while lounging on your deck; Astoria has been named the best town to retire to, with its scenic views, quaint shops, historic homes and amazing restaurants. The brand new unit offers: 10’ ceilings, loft design, granite counters, bamboo floors, gourmet kitchen, glass window wall and gas fireplace. The identical unit is currently under construction in Phase II.

Price: $ 295,900

6.Alysen Place, Penticton, BC

Rejuvenate your spirit and indulge in living well at Alysen Place - south Penticton’s new oasis for people with uncompromising taste. Close to beautiful Skaha Lake, away from the city’s bustle, and minutes to all the attractions you’ve come to love in the Okanagan, Alysen Place is a year-round paradise tucked into nature’s peace and splendour.

Picturesque vineyards, gentle mountains, fresh blue lakes, endless sunshine – Alysen Place is ideally located in peaceful south Penticton, so you can savour life any way you choose. Go swimming, picnicking, boating. Pick your own peaches or sample the fare at internationally acclaimed wineries and restaurants. Indulge at a spa, take in world-class entertainment. Virtually every shopping experience is within reach, and festivals are plentiful. The vibrant culture is yours to enjoy, whenever the mood strikes. Or curl up at home for a carefree escape. This is your oasis.

7. Dockside Green, Victoria, BC

Dockside Green is a name synonymous with environmental living and is a LEED® Platinum-targeted project.The development is an innovative community of one and two bedroom luxury condominiums, townhouses and penthouses all of which feature environmentally-friendly materials such as renewable bamboo floors, low-flow toilets and energy efficient appliances. The community features solar water heating, small-building wind turbines, a car share program, mini-transit system and a launch area for canoes and kayaks.

Price Range: $385,000-$ 1,233,900

8. Vista Lago at The Hammock, Kendall FL

An exquisite one bedroom condo with a swimming pool in a gated community contains fabulous amenities such as a state-of-the-art kitchen and air conditioning.

Price Range: $150,000

9.Highbury-Tower Residences at Fish Creek, Calgary, Alta.

Like all three towers, Highbury² gets its inspiration from classical modernism. Quality building materials blend with simple contemporary forms to convey a certain level of sophistication. Highbury² offers a wide range of one and two bedroom suites on its 12 floors, all with den/media room or home office. Highbury’s private amenities building features spa and fitness facilities, theatre with tiered seating, entertainment lounge, hobby and conference rooms, plus an in-building car wash.

Price: $ 400,000

10. 987 SE MacArthur Blvd.-Hutchinson Island, FL, Stuart, FL

Located on private Hutchinson Island, this fabulous, charming beach home boasts 75 feet directly on the ocean and 75 feet on the Indian River Intracoastal, with a boathouse and dock situated minutes from the Inlet! With three bedrooms, three bathrooms and 2,800 square feet, this home is private and sunrise to sunset; is the best of both worlds.

Price: Previously listed at $2,200,000

Comment (0)

The Canadian real estate market has continued to heat up, which has real estate agents, brokers and investments breathing a sigh of relief all across the country.

In February, new housing starts rose faster than expected and according to a new survey, 10% of Canadians expect to buy a home in the next two years.

Seasonally adjusted new housing starts landed at 196,700 in February, up from 185,400 in January and above analysts’ forecasts for a 190,000 gain; according to figures from the Canadian Mortgage Housing Corporation.

RBC’s 17^th annual home ownership study found that the number of Canadians who say they are very likely to buy a new home rose from 7% two years ago to 10%. The number of people who view their homes as a good investment rose to a 12-year high of 91%.

Some economists believe that the property market will cool in the second half as the Bank of Canada is expected to being raising interest rates and the demand and supply of available housing becomes more balanced.

According to statistics, urban multiple starts, or condos, increased by 19.1% to 89,900 units so far this year while single urban starts increased by 0.5% to 89,200 units.

Urban starts rose 28.6% in Ontario, 14.3% in Atlantic Canada, 10.8% in the Prairie region and 8% in British Columbia. In Quebec, however, urban starts dropped 14.1%.

Rural starts were estimated at a seasonally adjusted annual rate of 17,600 units in February.

According to the RBC poll, younger Canadians between the ages of 18 to 24 are most likely to lead the market. About 15% said they were likely to buy, almost double the number in 2009.

About 60% also believe housing prices will continue to rise this year, up from a mere 25% this time a year ago. They also expect mortgage rates to rise, with two-thirds expecting to have to pay more, the bank said.

That belief is being reflected in the choice of mortgage, with 16% opting for a variable rate loan compared with 20% last year.

Comment (0)

Canadian athletes aren’t the only ones earning medals during the 2010 Winter Olympics in Vancouver.

There are three ultra energy-efficient homes for locals and tourists alike to tour during the Games, Whistler’s first rammed-earth home and BC’s first net-zero energy home, made by a local builder and one, a certified ‘Passive House’ from Austria.

Austria House , as it’s called, is an ultralow-energy building designed to hear, cool and ventilate itself with small amounts of energy. Using a combination of super insulation, thick walls, triple-paned glazing, solar orientation and an advanced heat-recovery system, Austria House anticipates using one-tenth of the energy required by a building that is conventionally built and approximately the same size. This translates to less than half the energy consumption expected from a LEED-Platinum home -- one of Canada's highest standards for "green" buildings.

Austria House will be given to the Whistler community to use after the Games, envisioned as a rental shop for cross-country ski gear in the winter and bikes in the summer as well as a indoor public space and club space for the Whistler Off Road Cycling Association and the Whistler Nordics ski club.

Rammed earth, on the other hand, is a building system with one of the lowest environmental impacts commercially available today. Eighteen-inch-thick exterior walls are formed like conventional concrete, but use locally sourced sand and gravel, including a small percentage of Portland cement and naturally sourced colouring agents.

With a mixture of ancient knowledge and the latest in construction technology -- including double and triple glazing, non-VOC finishes and a hospital-quality air filtration system -- Whistler's first rammed-earth home is positioned as not only one of the healthiest in Canada, but as one of the most efficient. The home, built by RDC Fine Homes, uses 80 per cent less energy than any conventionally built home.

The home is also one of the first in Canada to include an extensive system for monitoring energy efficiency and indoor air quality and it’s currently available to tour in Whistler Cay Estates, just a short walk from Whistler Village.

Aside from the solar panels on its roof, B.C.'s first net-zero energy home looks fairly similar to all the other houses going up in the neighbourhood. When it comes to performance, however, it’s miles ahead of the competition.With a combination of energy-efficient design with high-tech construction and commercially available renewable energy systems, net-zero homes are considered as such thanks to their ability to achieve net-zero energy consumption (energy neutral) on an annual basis. Over the period of one year, the amount of energy the buildings use is equal to what they generate.

Every aspect of the building, another RDC Fine Homes' project, was designed to reduce energy use. Natural light reduces the need for artificial light during the day while overhangs shade the windows; when the sun is high in the summer months, eliminating the need for cooling systems. All windows are triple-paned, low-E gas filled, and both the foundation and walls use systems designed to create highly insulated interior spaces with minimal amounts of construction waste.

In addition to having a heat recovery system similar to that used in the rammed-earth house, an array of solar panels helps the building meet its energy demands. The builders anticipate that the house will at times create more energy than it needs; so it has been connected to another home in the neighbourhood where the surplus energy can be exported.

BC’s first net-zero energy home is open for public viewing from Feb. 17th-24th and March 19th-28th, from 1 pm to 5 pm.

When it comes to energy efficiency, Whistler has three homes that continue to push the envelope and break new ground in being ‘green’.

Comment (2)