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Federal Government Changes to Mortgage Lending

For the fourth time in as many years, the Federal Government has announced action to restrict mortgage credit. The new measures include:

  • The maximum amortization on a prime mortgage will be reduced from 30 to 25 years.
  • Mortgage insurance will not be provided for properties valued over $1 million.
  • Refinancing has been lowered from a maximum of 85% loan-to-value to a maximum of 80% loan-to-value.
  • The maximum gross debt service (GDS) and total debt service (TDS) will be limited to a maximum of 39% and 44% respectively. Currently, GDS does not apply to qualified borrowers with credit scores over 680.

These measures will take effect July 9, 2012.

Here's a key question clients are already asking today:

Q. I have a written mortgage pre-approval from a lender, dated before July 9, 2012 with a 30-year amortization. Will I still be eligible for a 30-year amortization if I don't sign an agreement of purchase and sale until July 9, 2012 or later?

A. No, a mortgage pre-approval without an agreement of purchase and sale is not sufficient to qualify for a 30-year amortization. You may have a 30-year amortization only if your agreement of purchase and sale is dated before July 9, 2012 and you have made a mortgage insurance application before July 9, 2012. You may wish to discuss with your lender to revise your mortgage pre-approval using the new parameters announced today.

For more information, here's the government's Q and A document: www.fin.gc.ca/n12/data/12-070_2-eng.asp

 


New HST rules and the reality of it all

Mortgages & Marketing
Written by Jessi Johnson
Wednesday, 29 February 2012 10:29

I will review the new HST rules with you shortly but would like to point out the disturbing reality of this tax. My wife and I recently purchased a new townhouse and were shocked when I ran the "real" numbers. What I mean is, the realistic cost of income required to pay this tax on top of paying the tax in the first place. How much does that "new" home need to increase in value before you break even because of the tax's? The answer is about 23%.

Let's break this down in simplified fashion:
  • New purchase: $1,000,000 (a mediocre townhouse in Vancouver)
  • Down payment to avoid CMHC: $200,000
  • PTT (property transfer tax): $18,000
  • HST: $120,000

THE B.C. FIRST-TIME NEW HOME BUYERS' BONUS $10,000
http://www.bcbudget.gov.bc.ca/2012/homebuyers/2012_First_Time_Home_Buyers_Fact_Sheet.pdf





New Home Purchases

New Housing Transitional Rules

On Feburary 17th, 2012 the Government announced the transitional rules for returning to the PST. Below you will find information as well as the detailed tax information notice on these rules.

The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under HST and partly under the PST, they will all pay a consistent and equitable amount of tax. The transition rules provide certainty for new-home construction and sales, particularly during the transition period.

 

For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price. This ensures equitable treatment among purchasers and will help mitigate distortive market behaviour. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double-taxation on homebuyers.

  • Average amount of embedded sales tax in newly built homes under PST: two per cent.
  • Tax paid by purchasers on an $850,000-newly built home after HST rebate: two per cent.
  • Tax rate on a newly built home during transition: two per cent.

The B.C. new housing rebate threshold will be increased to $850,000, meaning more than 90 per cent of newly built homes will now be eligible for a provincial HST rebate of up to $42,500. It is important to note that the HST does not apply to resale housing.

To help support workers and communities in B.C. that depend on residential recreational development, purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.

  • B.C.'s portion of the HST will no longer apply to newly built homes where construction begins on or after April 1, 2013. Builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home's final price will again be embedded PST.
  • The temporary housing transition measures will be in place for two years, until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.
  • The temporary housing transition tax and the temporary housing transition rebates will be administered by the Canada Revenue Agency on behalf of B.C. The Province is administering the grant for new secondary vacation and recreational homes.

Tax Information Notice:
Enhanced New Housing Rebates and Transitional Rules for the Re-implementation of the British Columbia Provincial Sales Tax

More Information

If you have questions regarding eligibility requirements for the enhanced new housing rebates or new rental housing rebates or about the application of the B.C. transition tax or B.C. transition rebate, please call the Canada Revenue Agency at 1‐800‐959‐8287 (English) and 1‐800‐959‐8296 (French) or go to:

http://www.fin.gc.ca/n12/12-017-eng.asp (English)
http://www.fin.gc.ca/n12/12-017-fra.asp (French)

 

Mortgage Rates

The recent announcement from the US Federal Reserve to not raise rates until 2014 coupled with the general weakness in the global economy is keeping mortgage rates down for Canadians. With such low rates, there are concerns about households being increasingly leveraged. Accordingly, mortgage rules/rates are constantly changing to ensure that borrowing remains in check and the CDN real estate market avoids a material correction.  On a macro level this is very positive, however, the implications of the changes are constantly felt by borrowers when applying for credit to renew, refinance, or purchase. Specifically, there is more paperwork to go through and deals that would have worked in the past don't necessarily work now. This should come as no surprise, but it's becoming harder to borrow money and deals are more heavily scrutinized.

Despite the low rate environment, I'll see fluctuations on the variable and fixed side of the business. Currently, one of the best rates on the market (without restrictions) is the 4 yr fixed @ 2.99%; but, I've started to see some lenders raise this rate and expect that more will follow suit. Bottom line is if you have an existing mortgage with a high rate, are purchasing a place, are 120 days out from renewal, pulling equity out to invest in another property, etc., I would recommend getting in touch with your mortgage broker to hold your rates before some of the historical lows disappear.


Property values and Education

I think this can an interesting topic to discuss. Some may think: How does Education affects property value?

Well I was reading the report on the best high school in Vancouver. I see many of the number 1 rates schools are located in expensive locations. Then I went Dim Sum with one of my Chinese wealthy clients on South Granville and found that many of the millionaires were having Dim sum at this popular restaurant. All their talking was which school their kids go to and universities they attend.

One thing for sure is that the Chinese is very much concern of their children getting the best education. Many new immigrants already learn about great schools in Vancouver and want to live there as soon as they land. Good school will thus attract wealthy immigrants and it would then make the area property value go up.

If the government wants to improve their economy, one of the ways is to do a better job with education. This will attract people who care very much about their children to come even the property value is higher.

 


Turkey Earthquake

http://www.cnn.com/2011/WORLD/europe/10/25/iyw.howtohelp.turkey.quake

The world has been facing natural disaster from earthquakes, fire, floods, Tornados and Tsunami. We have seen earthquakes everywhere, even in Vancouver Island. This may be a chain reaction from climate changes and other reasons. For whatever reasons, they are here. Many people die from the earthquake, tornados and Tsunami. People die not because of the natural disasters; they die because they lived in unsafe places that were built with wood and concrete or bricks. I am not saying Wood, concrete or bricks are not safe. The world is using them for building standards. However, depending on how the buildings are built, and where they are built can make it an unsafe place to live. Most people die during earthquakes are killed by falling objects, stuck at places where they cannot breathe.

Why are we not looking into new way of buildings that can save lives and they are low cost and easy to build. VBNF works with Murchtech to provide a great solution for safe housing.
See articles below to learn more:

Here are the links:

Contact us for more details.

 


OTTAWA - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent.

The global economic expansion is proceeding broadly as projected in the Bank's April Monetary Policy Report (MPR), with modest growth in major advanced economies and robust expansions in emerging economies. The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment.

While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon. The Japanese economy has begun to recover from the disasters that struck in March, although the level of economic activity in that country will remain below previous expectations. In contrast, growth in emerging-market economies, particularly China, remains very strong. As a consequence, commodity prices are expected to remain at elevated levels, following recent declines. These high prices, combined with persistent excess demand in major emerging-market economies, are contributing to broader global inflationary pressures. Widespread concerns over sovereign debt have increased risk aversion and volatility in financial markets.

In Canada, the economic expansion is proceeding largely as projected, although the expected rotation of demand is somewhat slower than had been anticipated. Household spending remains solid and business investment robust. Net exports remain weak, reflecting modest U.S demand and ongoing competitiveness challenges, particularly the persistent strength of the Canadian dollar. Despite increased global risk aversion, financial conditions in Canada remain very stimulative and private credit growth is strong.

Following an anticipated slowdown in growth during the second quarter due to temporary supply chain disruptions and the impact of higher energy prices on consumption, the Bank expects growth in Canada to re-accelerate in the second half of 2011. Over the projection horizon, business investment is expected to remain strong, household spending to grow more in line with disposable income, and net exports to become more supportive of growth. Relative to the April projection, growth in household spending is now projected to be slightly firmer, reflecting higher household income, and net exports to be slightly weaker, reflecting more subdued U.S. activity.

Overall, the Bank projects the economy will expand by 2.8 per cent in 2011, 2.6 per cent in 2012, and 2.1 per cent in 2013, returning to capacity in the middle of 2012. Total CPI inflation is expected to remain above 3 per cent in the near term, largely reflecting temporary factors such as significantly higher food and energy prices. Core inflation is slightly firmer than anticipated, owing to temporary factors and to more persistent strength in the prices of some services. Core inflation is now expected to remain around 2 per cent over the projection horizon. Total CPI inflation is expected to return to the 2 per cent target by the middle of 2012 as temporary factors unwind, excess supply in the economy is gradually absorbed, labour compensation growth stays modest, productivity recovers, and inflation expectations remain well-anchored.

The Bank's projection assumes that authorities are able to contain the ongoing European sovereign debt crisis, although there are clear risks around this outcome. Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn, consistent with achieving the 2 per cent inflation target. Such reduction would need to be carefully considered.

Information note:
A full update of the Bank's outlook for the economy and inflation, including risks to the projection, will be published in the MPR on 20 July 2011. The next scheduled date for announcing the overnight rate target is 7 September 2011.



 

Bank of Canada maintains overnight rate target at 1 per cent

OTTAWA - The Bank of Canada today announced that it is maintaining its target for the overnight rate at 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The global economic recovery is proceeding broadly in line with the Bank's projection in its January Monetary Policy Report (MPR), although risks remain elevated. U.S. activity is solidifying and remains supported by stimulative fiscal and monetary policies. Ongoing challenges associated with sovereign and bank balance sheets will limit the pace of the European recovery and are a significant source of uncertainty to the global outlook. Robust demand from emerging-market economies is driving the underlying strength in commodity prices, which could be further reinforced temporarily by supply shocks arising from recent geopolitical events.

The recovery in Canada is proceeding slightly faster than expected, and there is more evidence of the anticipated rebalancing of demand. While consumption growth remains strong, there are signs that household spending is moving more in line with the growth in household incomes. Business investment continues to expand rapidly as companies take advantage of stimulative financial conditions and respond to competitive imperatives. There is early evidence of a recovery in net exports, supported by stronger U.S. activity and global demand for commodities.

However, the export sector continues to face considerable challenges from the cumulative effects of the persistent strength in the Canadian dollar and Canada's poor relative productivity performance.

While global inflationary pressures are rising, inflation in Canada has been consistent with the Bank's expectations. Underlying pressures affecting prices remain subdued, reflecting the considerable slack in the economy.

Reflecting all of these factors, the Bank has decided to maintain the target for the overnight rate at 1 per cent. This leaves considerable monetary stimulus in place, consistent with achieving the 2 per cent inflation target in an environment of significant excess supply in Canada. Any further reduction in monetary policy stimulus would need to be carefully considered.

Information note: The next scheduled date for announcing the overnight rate target is 12 April 2011.

Average B.C. house price to hit record

The Province March 3, 2011

The median price of homes in B.C. will rise by three per cent this year, one per cent in 2012 and four per cent in 2013, Central 1 Credit Union says.

Driven by higher prices in the Lower Mainland and the north, B.C.'s median housing price will hit a record $402,000 this year, Central 1 said in a forecast released Wednesday.

Sales in 2011 will be stronger in the first few months of the year as buyers act to beat tougher mortgage insurance rules that take effect March 18, Central 1 said.

Regional markets relying on recreational and retiree buyer demand will be the soft spots in the provincial housing market this year, it said.

The Okanagan, Kootenays and part of Vancouver Island are expected to experience weak demand in 2011 as mortgage rates rise, buyers hesitate, and the strong loonie draws demand to low-priced homes in the U.S., Central 1 said However, sales in these areas are expected to rise sharply in 2012.

After falling six per cent in the Thompson-Okanagan in 2011, the median price there is expected to rise five per cent in 2013.

The median home price in the Lower Mainland is expected to increase four per cent this year to $465,000, stay unchanged next year and grow six per cent in 2013 to $492,900.

The Cariboo's median price should rise three per cent to $196,000 this year, Central 1 said.

The Real Estate Board of Greater Vancouver reported that its yearover-year benchmark price for detached houses rose six per cent in February to $848,645.

© Copyright (c) The Province

Read more

Condo buyers beware

Warning about discount Olympic condos... Watch Video

 


Vancouver Housing is White Hot?

See the video for yourself. VBNF have Buyers from China to buy your properties. Let us help you get the buyers.
http://www.cbc.ca/video/#/News/Money/1239849460/ID=1758092890

Mortgage Rules
http://www.bnn.ca/News/2011/1/17/Flaherty-details-new-mortgage-rules.aspx

Flaherty details new mortgage rules
Bill Curry and Grant Robertson, The Globe and Mail
7:20 AM, E.T. | January 17, 2011
Canadian, Economy, Real Estate

Concern over rising consumer debt levels is prompting Ottawa to make three new changes to Canada's mortgage rules.
Maximum Mortgage amortization periods have been reduced to 30 years from 35 years.
The maximum amount Canadians can borrow to refinance their mortgages will be lowered to 85 per cent from the current 90 per cent.
The government will withdraw its insurance backing on lines of credit secured on homes, such as home equity lines of credit.
These changes are going to mainly affect first time home buyers in the large urban centers like Vancouver, Toronto and Calgary.
More

2011 Real Estate Preview by Don Campbell
[01-05-11 5:40 PM] by BNN

2010 was a good year for Canadian residential real estate, with double digit gains early in the year, then tapering to more modest gains in recent months. So what's in store for 2011?

BNN speaks to Don Campbell, president, Real Estate Investment Network.
http://watch.bnn.ca/squeezeplay/january-2011/squeezeplay-january-5-2011/#clip397203


Want to know how your property may worth according to the BC assessment.
The 2010 BC Assessment is out. You may view or compare property values follow the link below. This is only the guide line from the current sales price in compare with what is listed according to the BC assessment data. If your address is not shown, you may have to wait till you get the assessment in the mail.
http://evaluebc.bcassessment.ca/Default.aspx


Real Estate Market Stable at Year-End
The Greater Vancouver residential housing market entered three distinctive phases in 2010. Continued buoyancy from the post-recession recovery began the year, followed by a summer lull and, throughout the fall, a sustained period of stability.


The Real Estate Board of Greater Vancouver (REBGV) reports that total sales of detached, attached and apartment properties in 2010 reached 30,595, a 14.2 per cent decrease from the 35,669 sales recorded in 2009, but a 24.2 per cent increase from the 24,626 residential sales in 2008. Last year's number of housing sales was 10.3 per cent below the ten-year average for annual Multiple Listing Service® (MLS®) sales in the region.


The number of residential properties listed for sale on the MLS® in Greater Vancouver increased 9.7 per cent in 2010 to 58,009 compared to the 52,869 properties listed in 2009. Compared to 2008, last year's total represents a 7.3 per cent decline compared to the 62,561 residential properties listed in 2008. The number of properties added to the MLS® peaked in April and generally declined for the remainder of the year.


"The last two years have been a bit of a rollercoaster for the real estate market. However, sales over the past six months have definitely shown a trend toward stability. We think that's good news for home buyers and sellers," Jake Moldowan, REBGV president said. "The Greater Vancouver housing market experienced a modest increase in home prices in 2010, and a continual decrease in the number of properties being listed for sale."


Residential property sales in Greater Vancouver totaled 1,899 in December 2010, a decrease of 24.5 per cent from the 2,515 sales recorded in December 2009—an all time record for the month - and a 24.3 per cent decline compared to November 2010 when 2,509 home sales occurred.


More broadly, last month's residential sales represent a 105.5 per cent increase over the 924 residential sales in December 2008, a 0.1 per cent increase compared to December 2007's 1,897 sales, and a 12.6 per cent increase compared to the 1,686 sales in December 2006.


The residential benchmark price, as calculated by the MLSLink Housing Price Index®, for Greater Vancouver increased 2.7 per cent to $577,808 between Decembers 2009 and 2010. However, prices have decreased 2.6 per cent since hitting a peak of $593,419 in April 2010.


"Although we saw some pressure on home prices throughout the year, home values in 2010 remained relatively steady in the region compared to the last few years when we witnessed much more fluctuation," Moldowan said.


New listings for detached, attached and apartment properties in Greater Vancouver totaled 1,699 in December 2010. This represents a 21.1 per cent decline compared to the 2,153 units listed in December 2009 and a 43.9 per cent decline compared to November 2010 when 3,030 properties were listed.


Sales of detached properties in December 2010 reached 769, a decrease of 14.8 per cent from the 902 detached sales recorded in December 2009, and a 121.1 per cent increase from the 348 units sold in December 2008. The benchmark price for detached properties increased 4.0 per cent from December 2009 to $797,868.
Sales of apartment properties reached 811 in December 2010, a decline of 29.7 per cent compared to the 1,154 sales in December 2009, and an increase of 94.5 per cent compared to the 417 sales in December 2008.The benchmark price of an apartment property increased 1.2 per cent from December 2009 to $387,115.


Attached property sales in December 2010 totaled 319, a decline of 30.5 per cent compared to the 459 sales in December 2009, and a 100.6 per cent increase from the 159 attached properties sold in December 2008. The benchmark price of an attached unit increased 2.7 per cent between December 2009 and 2010 to $490,869.


Realty Project for sale

Waterfront Property

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300' Waterfront Property, 8.6 Acres, Brunswick Bay, West Vancouver, BC

Two waterfront lots with a total of 8.6 Acres.
Please download 300' Waterfront Property, 8.6 Acres, Brunswick Bay, West Vancouver, BCPDF brochure for more information, and contact us if you have any questions.


Realty - Market Watch: Rates to stay low

Forecasts suggest that rates will stay low for some time making the variable attractive to mortgage holders. Over the next year and a half variable rate holders have an opportunity to pay down a sizable amount of their mortgage balances with rates at such low levels. It's important to look internationally when making bets about the direction and timing of interest rate changes. The US Fed is almost positive that rates will remain unchanged until mid-2012 and the Bank of Canada will not take economic chances by raising rates significantly. The interest rate spread can only be so much between the two countries to not derail the CDN economy and not adversely affect our relatively unscathed recovery. Full article here.

Don Campbell Talks on Maple Ridge Real Estate

Don Campbell Talks on Maple Ridge Real Estate

VBNF attended a FREE Session on Real Estate about Maple Ridge, the number 5 city in Canada for investment according to Don Campbell.

For those who do not know Don, he is the president of the Real Estate Investment Network that has over 3,000 members who has purchased over $3 billions in Real Estates. Many millionaires were made by following his instruction on investment in Canadian Real Estate.

He is also the author of many books about investing in Real Estate in Canada. He has a research team who would analyze Canadian cities with hard data to support their recommendation.

Indeed this is one of the best seminars I have attended and it is also FREE, which is unusual for Don's seminars.

Thanks to Sandy Blue for the invitation. Over 300 people attended the event. According to the Mayor of Maple Ridge, Mr. Ernie Daykin, the council of Maple Ridge will provide great incentive for business owners to invest and in Maple Ridge. There will be many tax benefits to have their businesses in Maple Ridge. We have taken pictures of the slideshow to show you why Maple Ridge is the place to invest.

Click here to see photos

Download the latest Maple Ridge Investment Update Click Here Download the latest Maple Ridge Investment Update


British Columbia's Top Investment Towns Named For 2010 - 2015

National Independent Real Estate Research Company Releases Updated Findings of BC Economic Analysis

 "The City of Surrey remains the number one place to invest in BC"

June 15th - The Real Estate Investment Network's (REIN™) release of Top British Columbia Investment Towns analyzes the current and future prospects for real estate investment opportunities in BC. The 120 page report states that recent market correction provides buying opportunities for home owners and investors; however, only in select regions of the province. It identifies which areas will outperform in the coming decade and finds that City of Surrey is the top area in British Columbia in which to invest in real estate. 

REIN™ is Canada's leading real estate research, education, and consulting organization for the last 18 years and its latest report is an analysis of key economic fundamentals for investors and home owners across North America. The in-depth research is based on the latest statistics, economic and social trends, and on-the-ground reports from REIN™'s research staff, members and industry professionals.
Today's Market Turmoil means Opportunity for Investors & First Time Home-Buyers
During the recent economic downturn, this diversity was brought to light even more evidently, with properties in regions that were already suffering being hit the hardest while the Lower Mainland proved to be a Canadian leader in the market recovery.

BC is still poised to be one of the economic leaders in 2011 and 2012 as the economy finds its post recession footing and begins to create jobs across many regions of the province. For investors, the time to ensure they are focusing on positive cash-flow properties is here. This is not a time to buy hoping for values to skyrocket; it is a time for yield, return on investment and diligence.

The Top BC Investment Towns report list:

1) Surrey
2) Maple Ridge & Pitt Meadows
3) Abbotsford
4) Kamloops
5) Kelowna
6a) Dawson Creek
6b) Fort St. John
7) Comox Valley
8) Penticton
9) Vancouver
10) Prince George
11) Vernon

More...


Market Conditions Beginning to Improve by The British Columbia Real Estate Association (BCREA)

Vancouver, BC - October 13, 2010. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province declined 36 per cent to 5,511 units in September compared to the same month last year. On a seasonally adjusted basis, MLS® residential unit sales in the province increased 2 per cent in September from August 2010. The average MLS® residential price climbed 4 per cent to $493,846 in September compared to the same month last year.


"BC home sales increased for the second consecutive month in September," said Cameron Muir, BCREA Chief Economist. "However, consumer demand is still noticeably lower than last fall's frenetic pace."

Download: Market Conditions Beginning to Improve News Release, October 13, 2010 Market Conditions Beginning to Improve
Luxury home market booming in Metro Vancouver

The realty firm Re/Max is looking to British Columbia's high-end home sales as one bellwether for its prediction that provincial real estate markets are settling into a period of stability, according to a forecast released Tuesday.

Re/Max, in its fall 2010 Market Trends report, estimated that while B.C. home sales have slowed, home values will remain stable in the coming months.

Metro Vancouver has seen home prices edge off of peaks attained earlier this year, but Re/Max expects they will hold on to most of the gains they saw during the 2009 market rebound.

"The interesting thing we're seeing is that the luxury-home market is staying fairly strong," Elton Ash, Re/Max's executive vice-president, said in an interview.

In Metro Vancouver, for instance, Re/Max counted 1,356 sales of homes worth more than $1.5 million during the first eight months of 2010, 44 per cent more than the same period of 2009.

Ash characterized it as higher-income groups expressing confidence in economic recovery and able to "see opportunity where others don't."

At price-points below the luxury level, however, Ash said a lot of the pent up demand that built up in the market during the recession has been satisfied and buyers are running up against prices that have again exceeded pre-recession highs.

"I might be happy with my job, but now [the question is] can we afford the mortgage payments,'" Ash said. "It's back to that scenario, which gives rise to a slowing in the market."

In its report, Re/Max noted that as of Aug. 31, the average Metro Vancouver home price hit $667,227, up 16.2 per cent from 2009. In Victoria, the average home-price hit $495,993 by the end of August, up 8.4 per cent from 2009. In Kelowna, the average was $418,598, up 6.7 per cent from a year ago.

Re/Max's report is the latest forecast released as consumers attempt to assess what will come next in the post-rebound fall off of sales.

And while Ash said B.C.'s sales and inventory levels hint at balanced market conditions now, other forecasts see more short-term softness.

CIBC economics, earlier this year estimated that B.C. home-prices overshot what it considers to be a "fair value."

"Despite the recent decline in prices, we estimate B.C. is now over-valued by roughly 17 per cent," Benjamin Tal, a CIBC economist said in an interview.

Tal said that doesn't mean B.C. prices will decline by that amount, just that "there is probably more room for B.C. prices to fall over, say, the next six to 12 months. Probably in the next six months."

Tal said CIBC calculates its fair value by looking at housing rent levels, income levels and demographics and comparing those to current home prices.

"It's not unreasonable to assume prices in B.C. to fall, say, 10 per cent over the next six to 12 months," he added.

Beyond that, however, B.C.'s demographic trend, with steady immigration, should see the province's real estate markets outperform central Canada over the next five to 10 years, Tal said.

Source: The Vancouver Sun


Why invest in Calgary?

According to Don Campbell, Calgary is the number one area to invest in Real Estate.

Investment report ranks Calgary #1
in Canadian real estate markets –
Calgary Herald Article

June 4, 2010
By MARIO TONEGUZZI, Calgary Herald
Click here for full article


CALGARY – Calgary is the best place in Canada to invest in the residential real estate market, according to a new report released today.
The Real Estate Investment Network's report said that Calgary experienced one of its best economic and real estate periods in Canadian history a couple of years ago but then entered a strong and needed correction.

"During the economic downturn, Calgary's market is making a predictable correction resulting in slightly more affordable housing compared to recent years passed," said the report. "It was economically impossible for the market to continue at the pace at which it was heading and now finds itself adjusting to market realities.
"This adjustment period, as the market searches for its new foundation from which to build, should continue in 2010 as the provincial economy is poised for another growth spurt."

The REIN report said the in-migration pace in the city continuing to lead the country combined with the "renewed affordability" will help propel the local market over the coming years.

"We, fortunately, should not see the massive over-boom situation we previously witnessed as the market remains more in line with the fundamentals," said the report.
Following Calgary as the top Canadian real estate investment cities are Kitchener-Waterloo-Cambridge, Edmonton, Surrey, Maple Ridge, Hamilton, St. Albert, Simcoe Shores (Barrie-Orillia), Red Deer, Winnipeg and Saskatoon.

"Successful real estate investing is all about identifying a town or neighbourhood that has a future, not a past," said the report. "Sadly, many investors like to invest based on past performance; thus, they are constantly chasing the market. This is called speculating – not investing."

See Quick facts about Calgary

Province: Alberta
Population: 1,251,600

Welcome to the booming town—and economy—of Calgary, Canada's fastest growing region. Best known for its flourishing oil and gas industry, Calgary has parlayed this success into a thriving business environment for many other sectors, including spin-off manufacturing companies, high tech start-ups and groundbreaking R&D centers. Calgary's endless advantages include the fastest growing economy in Canada, a position in the top five cities in the world to live in, the highest personal income in Canada, the lowest tax rates in the country and one of the highest purchasing powers and lowest costs of living in North America.

Key Advantages

  • Strong labor force with the highest growth in 2008 and the lowest level of unemployment of all major Canadian cities over the past 10 years
  • GDP growth rate of 1.3%, the 2nd highest growth rate of a Canadian city in 2008
  • Center of the international oil and gas industry with the majority of Canadian oil and gas production companies, pipeline operators, oilfield service, drilling companies and energy related engineering and consulting firms located there
  • Many of the world's largest international oil and gas companies have established a significant presence, driving more than $75 billion energy related projects in the province
  • Job demand is expected to grow to over 90,000 new jobs in the next five years, the highest in Canada
  • Highest percentage of post-secondary educated citizens in Canada
  • Largest concentration of entrepreneurs and the largest number of technology start-ups per capita in Canada
  • Home to the two largest urban parks in Canada
  • Calgary International Airport is the third busiest airport in Canada, after Toronto and Vancouver
  • Entire city has access to broadband internet connectivity—the city boasts the highest Internet use in Canada at 85%
  • Recognized amongst the most successful transit systems in the world

Sector Strengths

  • Energy (oil & gas, electricity, coal, alternatives)
  • Technology
  • Manufacturing
  • Financial & Business Services
  • Transportation & Logistics
  • Film & Creative Industries
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