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Posts Tagged ‘Canada’

The Bank of Canada is adhering to its commitment to hold interest rates at the current rate of 0.25% after the latest rate announcement at the end of October. Professionals agree it is not the time to modify it.

The rate has been maintained at record lows for half a year now and the Bank wants to keep it static at least till June 2010. As any real estate agent would tell you, one of the key factors in the real estate market upturn and continued prosperity in that area are these low interest rates.

Sadly there is always a few that demand interest rate increases. Due to massive economic growth in certain areas many people are being very cautious. By boosting the rates of interest, many think this will stop the bubble from bursting. Regardless of rising prices and a faster pace in the real estate market, most of the experts say it is not the time to raise rates.

The most substantial reason is the actual growth of the GDP, which doesn’t seem to be following the BoC predictions of a 2% rise in the third quarter of 2009 (August growth was -0.1%). While there are still massive debts within the domestic industry, experts believe that enlarging interest rates will damage the recovery which is already tortuously slow.

The use of leverage, which is a means of using debt to increase investment, is still low and there are no signs of it increasing. There is more confidence around due to inflation running at about -1%. The other factor, is all this is the housing market, which doesn’t seemed to have crashed as predicted. Real Estate passing through realtors office’s remain stable and prices are growing. With the housing downturn last winter there was a backlog of properties which are now selling, as the demand is greater so the prices rise.

It’s more than feasible that the Bank of Canada will not break its promise and will hold down interest charges for at least eight more months. This means encouraging news to any potential home buyer.

Technorati Tags: Canada, interest rates

A current article in the Scotia Capital gave a very assured outlook at the Canadian property market. They are wondering: Why is the Canadian real estate market head and shoulders over other global real estate markets? Is the potential more for a bullish or a bearish flow?

Good conditions in the Canadian market are pointed out by various factors. Although there was a big increase in listings at the early part of the year, these went very quickly. Reductions in developers’ margins on houses supported the stock of newly built homes lower. Seizure is now lower than ever so there is little stock of these foreclosed houses. In the US market the foreclosed houses are the biggest issue.

The main reason for the overall good health of the Canadian real estate sector is open to discussion, but most of the experts believe it’s based on the stimulus efforts of the last year. The main distinction between the USA and Canada with scrutiny to the tax incentive packages are in the USA they are time restrained.

People in Canada have seen their RRSP withdrawal limit raised, home buyers’ and restoration tax credits as well. There are also tax encouragements and rebates for energy and upgrading your home and that doesn’t even cover the local incentives. The Canadian real estate market was in a fantastic situation in relation to the rest of the world, made even better by the assertive thinking attitude of the Bank of Canada.

The upward trend of the real estate market are what are displayed with these points. There are a few potential market ‘landmines’ to stay away from. Professionals with the Scotia Capital are concerned about the condo market in Canada. The catalogue of unabsorbed newly built condos is slowly building up (they account for about 13% of annualized real estate construction activity) and is not just caused by a seasonal trend in the construction industry. To stop the unabsorbed condominium levels climbing experts believe that there could be growing pressure for prices to drop after observing a report by the CMHC.

Real Estate investor portfolio’s should include buildings from Canada as it has fantastic potential. The condominium market is an area that investors need to look at diligently. Whether the real estate market continues in an upward flow or starts declining depends on the federal government. The results of all these real estate incentives are not going to go on unendingly. A large jump in listings at a impending date could be caused if the government try to direct demands into the here and now without spreading it out over time. Withdrawing the incentives in one fatal blow could have a disastrous effect.

Technorati Tags: Canada, housing market, Real Estate

Canadian Tire is not just power devices and patio equipment but also a life insurance provider. After tweaking their term life insurance policy the home hardware firm rolled out their new plan. This policy is underwritten by Canada Life and subject to a new marketing campaign. A term life policy could be considerably better than this type of policy. Let’s have a gander at the Canadian Tire Term Life Insurance Plan. Applying is not difficult, you can do it by phone, mail or on the web. You will be asked seven health questions and you will be expected to fill them all in. A nursing visit or more medical facts will be assured if you answer yes to any of the inquiries. You will have payment increases after the first five years for a $250,000 face value policy. Terminal illness payment is $50,000 but it is not the same as a critical illness policy provided by individual brokers. So that seems good, what’s the issue? Let’s consider this type of policy against Canada Life’s individual term life policy. Fees are a lot more on the Canadian Tire plan. These go up by $40 for a 40 year old male smoker. That is a massive difference in cost. The flexibility and customization of these types of schemes are not available on the Canadian Tire policies.With curbed benefits of $250,00 and the schemes running no more than 5 years, we are now starting to see the imperfections in this policy. Provincial Sales Tax is also imposed as an addition by the Canadian Tire Term policy. You can add riders to individual plans which give your more benefits. Also you can combine it with another policy if you want. As the Canadian Tire Term Life Insurance policy is a group policy, you don’t get the customized and personal advice of a broker to lead you to the best resolution for your situation. So in a nutshell: As a possible policy holder you’ll probably be much better off with an individual policy, rather than the Term Life policy from Canadian Tire. To find out more about the Canadian Term Life Insurance, please refer to our more detailed article.

Technorati Tags: Canada, life insurance, tire term

Since 2007, the vital public transport shakeup in the Ontario area has been greatly expected by the public. A 12 year plan comprising of 52 transit plans including increasing subways, trains, bus lines and selected highways is called the ‘MoveOntario 2020′ project. GTA is expected to be the greatest beneficiary. Real estate demand is expected to climb in the affected areas with a decisive effect on the environment being seen by those that live in Toronto.

Rising values on Real Estate

Convenience to a property is an important variable when measuring property prices by real estate agents. Various studies have deduced that nearby railway station significantly elevates the value of property. A comparison was made in Portland between houses within a 500m range of a light railway station and those positioned further away. The houses nearer the station sold for 10% more. Within a recorded half-milerange of new stations there will be a positive growth in property prices.

Improving air quality: A positive environmental impact.

Since exhaust gasses contain number of molecules harmful to individuals, being inhaled long term, they slowly pollute our bodies, causing number of serious diseases and often leading to premature death. The systems in our body most afflicted are the respiratory (lungs) and cardiovascular (heart & veins).

Fine molecules and pollutants enter our bodies as we breathe in through our nose or mouth. These molecules cause irritation and damage to the lungs. Air pollution can either cause or worsen asthma or bronchitis or other lasting respiratory ailments, it can cause blood clotting or heart attack and of course it can finally lead to early death. Research is continuing but at the moment, in Toronto, about 1.700 early deaths are associated with air pollution each year.

What about the motorist?

It is believed that this reorganization plan will reduce approximately 300 million car trips, which in turn will reduce the greenhouse emissions. Can it work? Is this the best idea to have cleaner air? Day to day drivers must not be neglected, but this proposal aims to pin point on the public transport system. This includes railways, bikers and pedestrians supporting people to use these modes of transportation. A Torontonian driver will spend on average 67 hours stuck in traffic jams every year. Notwithstanding different means of transport a congestion study shows that in 20 years cars will still form 70% of all journeys in Toronto. (Source: http://www.hastebc.org/haste-news/torontos-war-cars). For instance, I’m pretty sure that the majority of my colleagues working in real estate in Toronto will never give up their cars no matter the cost or availability of public transport system.

Ideas to improve air conditions must showplans to cut out congestion and bettering traffic flow in general as exhaust gas is higher when traffic is stop-and-go. Or maybe the way to go is to find incentives in the recent plans of Israel or Denmark. These countries decided to heavily promote electromobile vehicles by exemptions and by building a enormous structure of charging stations throughout the country. Expanding the public transport system should not be the only developments GTA makes. It has to answer the requirements of those who chose cars as their primary means for transportation.

Technorati Tags: Canada, MoveOntario, Real Estate, Toronto, transport, transportation

Vancouver BC housing market grew for almost seven consequent years, one of the longest and fastest growths ever registered in Canada. Average house prices between years 2001-2007 almost doubled, while inflation in the mentioned period was less than 14%. Indeed, affordability of homes in Vancouver, especially for first time buyers, was seriously lowered by this combination of factors.

After the US housing market got into problems, its Vancouver relative still worked well for some time and managed to grow until the beginning of 2008. But then our market began to get under the influence of the affordability demand pressure. Therefore, things slowed down and then in the following few months slowed down even more. Average price first stabilized and later dropped. With the outbreak of global economic crisis in the autumn 2008, Vancouver real estate sales fell to record-low numbers in January and February 2009 igniting the fear of painful and long real estate crisis, the same one we witnessed in the USA.

For the readers who agree with this, I would recommend to check out the detailed figures. In February 2009, the sales didn’t stagnate, but they already started to rise again! And from that moment on, all the crucial indicators concerning the Vancouver BC housing market are showing us that things are going fine. Sales in June 2009 were almost 6 times higher than in February and almost double compared to the last summer. Specifically, the sales in June 2009 were 75.6% higher than in the same month previous year. Average price drop came to a standstill in December 2008, remained flat till March, since then continues to grow steadily again. The price level of October 2008 was reached again in June 2009.

These fact shouldn’t seem so shocking, if we analyze the data in detail. Look at the new listings change graph. The rapid inflow of new properties on the market stopped many months ago in October 2008, after this month the overall inflow was falling.

It’s because one apparent advantage residential real estate can boast – people simply have to live somewhere. People do really need a dwelling, while they can quite well survive without cars, hairdressers or holidays. It is possible that the demand for homes drops, but it can hardly disappear completely, even if it was only for a limited time. Certain rules should be followed at the supply side. Your house often is the most expensive item of your general property. You can hold it and refuse selling during the period of falling prices, on the other hand such attitude stimulates new housing starts. Eventually, an agreement has to be reached at some point both for sellers and buyers, and the sooner the better.

So what are the underlying reasons behind Canadian market’s speedy recovery, regarding that the US market is still struggling with the crisis? The reason lays in the truth that in Canada, we had no wave of foreclosures, which was the most critical point. Compared to the financial health of institutions and individual house owners in the USA, the Canadian ones are doing much better. Canadians don’t necesssarily have to be wealthier, but apparently they are more ready to cope in case of any acute financial trouble. One of the sectors most damaged by the crisis in the US was the subprime mortgages, which is much less common in Canada. Of course our economic fundamentals could be in a better situation now, but they are still quite stable.

So what would be the most likely next situation on the real estate market in Vancouver BC? We can expect solid sales and average price growth in the next few months. Anyway, after the numbers achieve their pre-burst levels, the situation should stabilize, because of the overall economic slowdown. Next year will be awesome especially for first time buyers – with record-low interest rates and prices still below the recent peak, houses won’t be so affordable forever!

Technorati Tags: Canada, real estate market, Vancouver