Thursday, June 27, 2013

4047 Hwy 3A

Sitting on 1.38 acres just 14 km (9 miles) north of Nelson, this home is in superb condition. A strict maintenance schedule has been consistently adhered to and has created a wonderful opportunity for those looking for a quality home with land close to town. The roof has been replaced and the septic has recently been pumped.  A paved driveway leads you to the home that is positioned well to the back of the property and has lots of privacy.  A two storey garage / workshop is connected to the main house by a breezeway. There is the potential to incorporate this space into the main home or it could be developed into an additional living space.  For those looking for more land, the two adjacent properties are also for sale (see MLS# 2213900 and 2213901) and would bring the total property size to 2.93 acres. This is a great family home with productive gardens and room to run.  

Friday, June 21, 2013

Canadian Retail Sales and Consumer Price Inflation

Canadian retail sales rose 0.1 per cent in April following flat sales in March. In volume terms, sales rose 0.5 per cent due to lower retail prices. Higher sales were reported in 6 of the 11 retail sub-sectors.

Retail sales in BC  have  fell 0.7 per cent month over month and 0.3 per cent year-over-year. Restrained consumer spending in the province has kept retail sales basically flat over the past 12 months.
Canadian inflation continued to trend lower in May, rising just 0.7 per cent over the past 12 months. Inflation has now fallen below the Bank of Canada's 1 per cent lower bound on its inflation control range for the past two months. The Bank of Canada's core inflation index, which excludes eight of the CPI's most volatile components such as food and energy, rose 1.1 per cent in May, matching the increase in April.  

Copyright BCREA - reprinted with permission

Thursday, June 20, 2013

Selling Your Home – For Sale By Owner? Think Again.

by Ken Davidson

I personally believe that there are professionals out there to do most jobs. I think that if you really want to become a professional real estate agent, then considering selling your home For Sale By Owner is a good idea. If you are just dabbling and considering doing a For Sale By Owner situation, then you’re forgetting who you are in your profession.

You've got to understand why you’re doing it.

The reason I hear of people wanting to do For Sale By Owner is because it’s “cheaper”. Doing your own tax returns is cheaper too but I don’t recommend it. Pulling your own tooth out is also cheaper than going to a dentist but I certainly wouldn't recommend it!

Value The Work of a Professional

In a hot market, you've got a better chance of being a successful For Sale By Owner than in a slow market but most of the time the money saved is not worth the time and effort expended.

A professional real estate agent with a strong network is able to find additional potential purchasers for your property that you wouldn't be able to market to. I also believe that if you follow a professional Realtors® advice, you’re going to be able to sell your home faster.

You need to ask yourself: do you want to dabble or do you want to be a professional?

My advice is to be a professional in what you are already a professional in. Whether that’s being a plumber, electrician, doctor or a lawyer. It doesn't matter, focus on your profession and let a real estate professional sell your home.

Not Everyone Is Meant For The Job

Now this leads to another obvious and important question…aren't there Realtors® out there who aren't necessarily great at their job?

Of course.

Just like there are good and bad accountants, doctors and lawyers, there are also bad Realtors® that won’t get the job done to your satisfaction.

This is why it’s important for you to choose your Realtor® the same way you would choose any other professional service.  Do your homework.  Ask other professionals you know, including your accountant and your lawyer, for referrals of who they would recommend.

Remember that selling your home is both a financial and emotional decision.  To ensure that you hire the right person that is a good fit for you and your family, it is critical that you take the time to interview several Realtors®. You are hiring a professional to work for you, so why would you just pick up the phone and contact the first person that answers on the other end?

Remember What Is Really Important To You

Take some time upfront to review what is important to you in a Realtor®.  Do your research and make sure you’re getting the right Realtor® to work for you. Each Realtor® has their own approach and that approach to selling real estate has to meet with your expectations.

If you hire a Realtor® that likes to have auctions and you don’t want to auction your house, that’s probably not the best Realtor® for you.

If you want a  Realtor®  that’s going to do everything that you ask them to do (including set the price), you’re not letting the professional do what they are qualified to do. When you want to make all the decisions, you’ll have to expect the possibility that you might run into a situation where your Realtor® will say, “That’s great to list it at that price but it will never sell.”

What’s the point of hiring a professional if you’re not going to let them do their job?

You need to spend the time to find the right person, interview them and make sure that they are whom you want to be working with.

Don’t take it lightly and make sure you take in all of the information possible. Personally, I suggest staying away from For Sale By Owner. It’s not your business. Unless you've got a pile of time or a bunch of dumb luck, don’t bother and leave it to the professionals. You’ll be glad you did.

About the Author
Ken Davidson is a Chartered Accountant with BDO Canada LLP, with their Kelowna accounting firm. Ken specializes in helping Kelowna businesses that are in start-up mode, companies in Kelowna that are in their growth phase and are ready to take their revenues to the next level, and professionals to secure their financial future with solid investment advice. Ken is best known for his strategic planning advice that positions him as a trusted advisor above and beyond being a Kelowna accountant that gives typical tax planning advice. To contact Ken for a Strategic Business Review to learn how he may be able to help your Kelowna business, email him at

US Federal Reserve Announcement

Following the US Federal Reserve Open Market Committee's two day meeting, Fed Chair Ben Bernanke surprised markets by suggesting that bond purchases under the Fed's quantitative easing program could be tapered as early as this fall and perhaps eliminated midway through 2014. The market reaction was immediate and dramatic with equity prices tumbling. More importantly for the housing market, an end to Fed bond purchases means less pressure on long-term bond yields and the implications were swiftly incorporated into the yield curve. Medium and long-term rates, in both the US and Canada, spiked on the news with Government of Canada 5-year yields rising almost 20 basis points to 1.7 per cent over the past 2 days.
While it is possible that markets have overreacted to Chairman Bernanke’s remarks, which were phrased as conditional on the economic outlook, if this increase is sustained or if rates continue to rise, posted rates on fixed-rate mortgages will very likely increase as well.  Our most recent mortgage rate forecast assumed that a steeping of the yield curve would result from an improved economic outlook, which the Fed tapering is a reaction to, and that mortgage rates would gradually increase towards the end of the year.  The recent movements in bond yields could move that forecast up by a one to two quarters. Short-term interest rates have seen far less movement over the past month given expectations for the Bank of Canada to remain sidelined through next year. However, a slight increase in 1-year bonds yields may cause banks to reprice 1-year fixed rate mortgages as well.

Copyright BCREA - reprinted with permission

Monday, June 17, 2013

BCREA Housing Market Update (June 2013)

BC Real Estate Association (BCREA) Chief Economist Cameron Muir discusses the May 2013 statistics.
Copyright BCREA - rebroadcast with permission

Canadian Manufacturing Sales

Canadian manufacturing sales tumbled 2.4 per cent in April, the fourth decline in the past five months. Sales fell in over half of manufacturing subsectors, with declines driven by falling output in the petroleum, coal and chemical industries for the second consecutive month. 

In BC, manufacturing sales dipped 0.5 per cent on a monthly basis but were 3.6 per cent higher than April 2012. BC wood product manufacturing continued its remarkable rebound in April, rising 8.4 per cent on a monthly basis and 59 per cent year-over-year. Year-to-date, wood product sales are up 42 per cent. The recovery in the wood products sector should provide a substantial boost to employment and income growth in regions of the province with significant forestry operations. 

Copyright BCREA - reprinted with permission

BC Housing Market Recovering From 2012 Slowdown

The British Columbia Real Estate Association (BCREA) reports that a total of 7,664 residential sales were recorded by the Multiple Listing Service® (MLS®) in BC during May, down 0.7 per cent from May of 2012. Total sales dollar volume was 2 per cent higher at $4.1 billion. The average MLS® residential price in the province was $534,013, up 2.7 per cent from a year ago.

"BC home sales continued to trend higher in May,” said Cameron Muir, BCREA Chief Economist. “In contrast to slowing demand and moderating prices in 2012, the BC housing market is turning around.” Rising consumer demand combined with inventory levels that remain in check has moved the province’s largest markets into balanced territory. “Home prices have edged higher over the past three months in BC’s large Lower Mainland market,” added Muir. The MLS® Home Price Composite Index for the Lower Mainland was up 0.2 per cent over the past month, and 1.4 per cent over the past three months.

Year-to-date, BC residential sales dollar volume was down 12.2 per cent to $14.9 billion, compared to the same period last year. Residential unit sales were down 10.7 per cent to 28,140 units, while the average MLS® residential price was down 1.7 per cent at $530,936.

Copyright BCREA - reprinted with permission

Tuesday, June 11, 2013

Mortgage Rate Forecast

The June issue of Mortgage Rate Forecast is now available.
  • Long-term interest rates spike from historic lows
  • Canadian economy off to a better than expected start
  • Bank of Canada – New boss, same policy
Mortgage Rate Outlook

The Canadian five-year posted mortgage rate once again fell back to its historical low of 5.14 per cent in the second quarter, its lowest level since early 2012. The decline in fixed mortgage rates followed an equally historic dive in five-year Canadian bond yields, which reached an all-time low of 1.15 per cent in May. Indeed, rates across the long-end of the Canadian yield curve swooned in the second quarter but have since spiked sharply back to where they were to start the year.

Historically low funding costs for Canadian banks translated to deep discounting of mortgage rates for home buyers with most lenders offering five-year fixed mortgages equal to the prime rate of just 3 per cent. In fact, and in spite of attempts by some policymakers at discouraging lower rates, some lenders continue to advertise fixed-rate mortgages at well below prime. However, depending on the sustainability of the recent rise in interest rates, those discounts may become scarce. It is difficult to cite a definite cause for the recent rise in interest rates, and much of the rise in Canadian interest rates may have more to do with what is going on in the United States than in the domestic economy. 

Generally, rising medium and long-term interest rates result from one of three scenarios. Markets may be concerned about government debt burdens and therefore demand higher interest rates. In addition, comments by central bankers may drive the market to perceive a more hawkish stance for monetary policy, which would push long rates higher. Finally, markets may be pricing in a more positive global economic outlook and therefore a return to a more normal shaped yield curve. Each of these scenarios implies a mix of different behaviours in asset markets.

There are other factors at work, but given recent trends in equity, bond and currency markets in the United States, the recent rise in interest rates is likely being driven by expectations of a stronger US economic recovery. 

Regardless of the root cause of higher rates, given where yields currently stand, we anticipate a modest increase in the five-year fixed-rate back to 5.24 per cent with the possibility of a further move up to 5.44 per cent if five-year yields continue to rise. As for one-year fixed rates, we expect very little, if any, movement over the next year and a half. 

Economic Outlook

Canadian economic growth was stronger than anticipated during the first quarter of 2013, expanding by 2.5 per cent. While growth surprised to the high side in the first quarter, we expect the remainder of the year to be modest, with the Canadian economy ultimately growing just 1.7 per cent this year. Going forward, we anticipate that a cooling of residential construction, lower household spending and restrained government budgets will challenge the economy. It is therefore imperative that the economy pivots towards export and business investment driven growth. On the export side, growth is highly contingent on a resurgent US economy where an economic recovery seems to be finding its footing in spite of recent forays into austerity. A lift in Canadian exports resulting from a stronger US economy should also improve business confidence and push investment higher.

Our forecast is currently in-line with that of the Bank of Canada, which means that the economy will return to full capacity some time in 2015. As economic growth accelerates, inflation should shift from its current low trend back onto a path to the Bank’s 2 per cent target.

Interest Rate Outlook 

The Bank of Canada welcomes a new Governor this month but remains in the status quo, caught between the rock of a somewhat muddling economy and the hard place of mounting household debt. In spite of inflation falling near the bottom of the Bank’s 1 to 3 per cent target range, its most recent interest rate announcement reaffirmed the Bank’s bias for higher interest rates, once again noting that current monetary stimulus would be appropriate for an ambiguous “period of time.” 

Our forecast for the Canadian output gap, like that of the Bank, implies that the economy will return to full capacity sometime in 2015, with inflation gradually returning to its 2 per cent target. As inflation returns to its target path, the Bank will begin to withdraw some of its current monetary stimulus. Our modelling suggests interest rates rising 25 basis points sometime in early 2015, if not late 2014.

Copyright BCREA - Reprinted with permission

Dominion Lending Centres Best Rate Mortgages 6/11/13

TermsBank RatesOur Rates
6 Month4.00%3.95%
1 YEAR3.00%2.69%
2 YEARS3.04%2.69%
3 YEARS3.55%2.75%
4 YEARS4.54%2.89%
5 YEARS5.14%2.94%
7 YEARS6.35%3.59%
10 YEARS6.75%3.69%
Rates are subject to change without notice.

Prime Rate is 3.00%
Variable rate mortgages from as low as Prime minus .40%

Monday, June 10, 2013

Canadian Housing Starts

Canadian housing starts jumped 13 per cent to just over 200,000 new units at a seasonally adjusted annual rate (SAAR) in May.  That leaves the trend in Canadian new home construction relatively unchanged at183,000 units over the past six months.  On a year-over-year basis, housing starts were down 9 per cent. 

New home construction in BC urban centres fell 7 per cent month-over-month in May to a seasonally adjusted annual rate of 21,300 units. On a year-over-year basis, total starts were 17 per cent lower than May 2012. Single-detached starts were 5 per cent lower over last year, while multiples declined 22 per cent.

Looking at census metropolitan areas (CMA) in BC, total starts in the Vancouver CMA declined 26 per cent compared to last year with multiple starts falling 35 per cent while single-detached starts were up 13 per cent.  New home construction in the Abbotsford CMA was more than twice the level of May 2012 due to increased activity in multiple starts.  Housing starts in the Victoria CMA were down 20 per cent compared with May 2012 and starts in the Kelowna CMA were 30 per cent lower year-over-year. 

Copyright BCREA - reprinted with permission

Friday, June 7, 2013

Canadian and US Employment

Canadian job growth made up for a lackluster March and April, adding an outstanding 95,000 jobs in May, the second largest monthly gain on record. The surge in employment pushed the Canadian unemployment rate 0.1 points lower to 7.1 per cent.  While May's job number was certainly remarkable, employment numbers have been volatile of late and so for direction on the economy its best to look at average job growth over the past six months. That measure shows an economy creating a healthy 15,000 to 20,000 jobs per month. 

The BC labour market was shut out of the May job bonanza, staying essentially flat as a gain in part-time employment offset a loss of nearly 16,000 full-time jobs. The provincial unemployment rate rose 0.4 points to 6.8 per cent and the level of employment stand at 0.2 per cent lower than in May 2012.

In the US, employment growth outperformed expectations with payrolls expanding by 175,000 jobs in May while the US unemployment rate ticked 0.1 points higher to 7.6 per cent. 

Copyright BCREA - reprinted with permission

Thursday, June 6, 2013

Canadian Building Permits

Canadian building permits rose 10.5 per cent in April to $7 billion, the fourth consecutive monthly advance. The increase was a result of higher construction intentions for multi-family dwellings in Ontario, BC and Quebec.

Following a modest rise in March, BC building permits posted the largest increase among Canadian provinces in April.  Total building permits rose 40.4 per cent on a monthly basis to $978.3 billion, including a 45.5 per cent increase in residential permits and a 28.6 per cent increase in non-residential permits.

BC's four major census metropolitan areas (CMA) all posted substantial increases in April. Permits rose 63 per cent in the Kelowna CMA from March, and were 78 per cent higher year-over-year. In the Abbotsford-Mission CMA, permits more than doubled on a monthly and year-over-year basis. In the Vancouver CMA, permits increased 51 per cent on a monthly basis and were 14 per cent higher year-over-year. Finally, in the Victoria CMA, permits rose 74 per cent compared to March and were 79 per cent higher than April 2012.

Copyright BCREA - reprinted with permission

Change in the Canadian Mortgage Market

The Canadian Association of Accredited Mortgage Professionals recently released their spring consumer mortgage update.  Here is the introduction to the report followed by a link to it in its entirety.  

Until now, housing has played a major role in the recovery from the recession of 2008/09: housing construction, resale market activity, and mortgage lending have contributed directly to job creation. Even more importantly, rising housing values have supported consumer confidence and consumer spending, and thereby led to job creation.
The health of the residential mortgage market depends on trends in the housing market, as well as the broader Canadian economy.
Concerns about growing levels of residential mortgage debt in Canada have led the federal government to make changes that have reduced federally-backed lending in Canada. The Canadian Association of Accredited Mortgage Professionals (“CAAMP”) has argued previously (most notably in the Fall 2012 “Annual State of the Residential Mortgage Market in Canada”) that most of the changes to mortgage insurance criteria have had relatively minor impacts, but that the change that took effect in July 2012 has had a more significant impact on housing activity.

Read on...