Starting in June, residents of the Central sub-region (i.e. Salmo, Nelson, Kaslo, and Electoral Areas D, E, F, and G) will be making the shift to Blue Bag recycling. The Blue Bag program will be a dramatic improvement on the previous system. Residents in this sub-region will no longer need to sort their recyclable materials at their respective recycling depot. Instead of a series of bins and igloos, each area’s recycling depot will receive one large bin for Blue Bags, one large bin for large or excessive cardboard, and an igloo for glass. Residents of Nelson will receive residential Blue Bag curbside pick-up in the same manner as garbage is serviced.
Participating in the Blue Bag program is easy. Simply collect recyclable materials together in any clear, blue-tinted, plastic bag (max. size 30”x 36” for residents outside of Nelson, and 26”x 38” for residents located within Nelson). Items that are accepted include mixed paper, food and beverage cans, cardboard (small volumes, flattened, and max. size 24” x 36”), newspaper, and rigid food-grade plastics displaying the numbers 1, 2, 4, 5, or 7. In order to protect workers, glass cannot be included in Blue Bags. This material must be taken separately to an appropriate end-point facility (if a deposit applies) or to an RDCK recycling depot.
“Moving to a Blue Bag system makes sense”, stated Josh Smienk, RDCK Director for Electoral Area E and the Chair of the Central Sub-region, the governing body that directs resource recovery efforts in the specific area. “The improvements we’ve made to the program will mean increased convenience and better service for local residents. It also means that more materials will be kept out of local landfills and a smaller carbon footprint”.
As part of the new program, the recycling depot located at the end of Baker St. in Nelson will be closed permanently. However, the transfer station located at 70 Lakeside Dr. will remain open.
Residents will be expected to provide their own Blue Bags. Blue Bags must be clear, tinted blue, and made of plastic with a max. size 30”x 36” for residents outside of Nelson, and 26”x 38” for residents located within Nelson. If Blue Bags exceed these dimensions or contain garbage, they will not be accepted. Acceptable Blue Bags are available for purchase at a number of local merchants. Any brand name will be accepted.
Residents of the City of Nelson can expect to see Blue Bag recycling in place for June 16th. Residents living outside of Nelson in the Central Sub-region can expect to see Blue Bag recycling in place for late June.
RDCK Website
Monday, June 9, 2008
Markets expect another rate cut Tuesday
The Bank of Canada is widely expected to deliver another interest rate cut Tuesday morning amid signs that the economy is cooling.
Most analysts say the central bank will drop its key overnight lending rate by a quarter of a percentage point to 2.75 per cent and then put its recent rate-slashing campaign on hold.
A survey of 12 primary dealers by Reuters shows all are calling for a quarter-point rate cut, followed by a pause.
"We expect the bank to send a signal that they believe they are likely done cutting rates (but not completely slamming on the door on possible further action)," said BMO Capital Markets economist Doug Porter.
TD economics strategist Jacqui Douglas also sees the central bank moving to the sidelines following a quarter-point cut on Tuesday. But she sees the bank trimming rates again later this year.
"With extremely weak demand from our biggest trading partner, we think that shrinking exports will keep the Canadian economy at a below-potential growth rate for some time, and that before the end of the year, the Bank of Canada will see that the recovery it had hoped for is not occurring," she said.
Others think the central bank won't resume its rate-cutting until next year. "We expect a quarter-point cut from the Bank of Canada on June 10th, followed by a pause … as the [bank] waits to evaluate the post-rebate U.S. economy, and then a return to easing with a further half-point cut in Q1 2009," said Scotiabank economist Derek Holt.
Mixed signals
Observers noted that the Bank of Canada has some mixed signals to wrestle with as it ponders its interest rate decision.
On the one hand, there are definite signs that the economy is slowing down. The country's GDP unexpectedly contracted by 0.3 per cent annualized in the first quarter. Housing is cooling, last month's job-creation figures were the lowest this year and a couple of recent surveys show consumer confidence in Canada has fallen to a six-year low.
On the other hand, inflation pressures are building, with oil topping at a record $139 US a barrel last week. Food prices also took a big jump in April.
The Bank of Canada has already slashed its key lending rate by 1.5 percentage points since early December. At its last policy meeting in April, the central bank cut its overnight rate by half a percentage point.
The C.D. Howe's monetary policy council recommended the Bank of Canada make no change in its overnight rate. But the 11 members were sharply divided. Three of the 11 called for a cut of a quarter of a percentage point, five recommended no change, and three called for rate increases.
CBC June 9, 2008
Most analysts say the central bank will drop its key overnight lending rate by a quarter of a percentage point to 2.75 per cent and then put its recent rate-slashing campaign on hold.
A survey of 12 primary dealers by Reuters shows all are calling for a quarter-point rate cut, followed by a pause.
"We expect the bank to send a signal that they believe they are likely done cutting rates (but not completely slamming on the door on possible further action)," said BMO Capital Markets economist Doug Porter.
TD economics strategist Jacqui Douglas also sees the central bank moving to the sidelines following a quarter-point cut on Tuesday. But she sees the bank trimming rates again later this year.
"With extremely weak demand from our biggest trading partner, we think that shrinking exports will keep the Canadian economy at a below-potential growth rate for some time, and that before the end of the year, the Bank of Canada will see that the recovery it had hoped for is not occurring," she said.
Others think the central bank won't resume its rate-cutting until next year. "We expect a quarter-point cut from the Bank of Canada on June 10th, followed by a pause … as the [bank] waits to evaluate the post-rebate U.S. economy, and then a return to easing with a further half-point cut in Q1 2009," said Scotiabank economist Derek Holt.
Mixed signals
Observers noted that the Bank of Canada has some mixed signals to wrestle with as it ponders its interest rate decision.
On the one hand, there are definite signs that the economy is slowing down. The country's GDP unexpectedly contracted by 0.3 per cent annualized in the first quarter. Housing is cooling, last month's job-creation figures were the lowest this year and a couple of recent surveys show consumer confidence in Canada has fallen to a six-year low.
On the other hand, inflation pressures are building, with oil topping at a record $139 US a barrel last week. Food prices also took a big jump in April.
The Bank of Canada has already slashed its key lending rate by 1.5 percentage points since early December. At its last policy meeting in April, the central bank cut its overnight rate by half a percentage point.
The C.D. Howe's monetary policy council recommended the Bank of Canada make no change in its overnight rate. But the 11 members were sharply divided. Three of the 11 called for a cut of a quarter of a percentage point, five recommended no change, and three called for rate increases.
CBC June 9, 2008
City of Nelson Zoning Map
Here is something new for those of you with an interest in zoning. On The City of Nelson website you can now view a city zonning map. Click the link below to view.
http://www.city.nelson.bc.ca/pdf/Planning/Nelson_ZoneMap_Mar18.pdf
http://www.city.nelson.bc.ca/pdf/Planning/Nelson_ZoneMap_Mar18.pdf
Housing Starts Move Higher in May
The seasonally adjusted annual rate1 of housing starts was 221,300 units in May, up from 213,900 units in April, according to Canada Mortgage and Housing Corporation (CMHC).
“Housing starts in May moved up from the strong level posted in April. Most of the increase reflected a rise in single starts, which in April had reached their lowest level since May 2001,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre.
In May the seasonally adjusted annual rate of urban starts edged up by 4.0 per cent to 192,800 units compared to April. Urban multiples rose 1.9 per cent to 116,100 in May, while singles increased 7.3 per cent to 76,700 units.
The seasonally adjusted annual rate of urban starts went up in all regions of Canada, except Ontario, which saw a decrease of 7.4 per cent to 67,600 in May. Urban starts increased to 8,900 units in Atlantic Canada, 44,100 units in Quebec, 36,800 units in the Prairies, and 35,400 units in British Columbia. In terms of single urban starts, all regions were up in May.
Rural starts were estimated at a seasonally adjusted annual rate of 28,500 units in May2.
For the first five months of 2008, actual starts in rural and urban areas combined were up an estimated 0.7 per cent compared to the same period last year. Year-to-date actual starts in urban areas have increased by an estimated 5.6 per cent over the same period in 2007. Actual urban single starts for the five months of this year were 14.8 per cent lower than they were a year earlier, while multiple starts increased by 22.7 per cent over the same period.
CMHC Ottawa June 9, 2008
“Housing starts in May moved up from the strong level posted in April. Most of the increase reflected a rise in single starts, which in April had reached their lowest level since May 2001,” said Bob Dugan, Chief Economist at CMHC’s Market Analysis Centre.
In May the seasonally adjusted annual rate of urban starts edged up by 4.0 per cent to 192,800 units compared to April. Urban multiples rose 1.9 per cent to 116,100 in May, while singles increased 7.3 per cent to 76,700 units.
The seasonally adjusted annual rate of urban starts went up in all regions of Canada, except Ontario, which saw a decrease of 7.4 per cent to 67,600 in May. Urban starts increased to 8,900 units in Atlantic Canada, 44,100 units in Quebec, 36,800 units in the Prairies, and 35,400 units in British Columbia. In terms of single urban starts, all regions were up in May.
Rural starts were estimated at a seasonally adjusted annual rate of 28,500 units in May2.
For the first five months of 2008, actual starts in rural and urban areas combined were up an estimated 0.7 per cent compared to the same period last year. Year-to-date actual starts in urban areas have increased by an estimated 5.6 per cent over the same period in 2007. Actual urban single starts for the five months of this year were 14.8 per cent lower than they were a year earlier, while multiple starts increased by 22.7 per cent over the same period.
CMHC Ottawa June 9, 2008
National Rental Vacancy Rate Edges Lower
The average rental apartment vacancy rate in Canada's 35 major centres decreased slightly to 2.6 per cent in April 2008, from 2.8 per cent in April 2007, according to the spring Rental Market Survey released today by Canada Mortgage and Housing Corporation (CMHC).
“The Canadian economy remains very supportive of strong demand for both ownership and rental housing thanks to solid job creation and healthy income gains,” said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. “High levels of immigration and the increasing gap between the cost of home ownership and renting continue to drive rental demand in 2008. These factors have put downward pressure on vacancy rates over the past year.”
The results of CMHC’s spring survey reveal that the major centres with the lowest vacancy rates in April 2008 were Victoria (0.3 per cent), Kelowna (0.3 per cent), Greater Sudbury (0.7 per cent), Vancouver (0.9 per cent), and Saskatoon (0.9 per cent). A unit is considered vacant if, at the time of the survey, it is physically unoccupied and ready for immediate rental. In other words, a new tenant can sign a lease for a vacant unit and move in immediately. All major centres in British Columbia except for Abbotsford, posted a vacancy rate below one per cent due to rising migration to British Columbia and relatively high home ownership costs that have resulted in increased rental demand. Provincially, vacancy rates were lowest among the western provinces, especially Manitoba (1.0 per cent), Saskatchewan (1.2 per cent), and British Columbia (1.1 per cent). This is largely due to the migration of workers from Central and Atlantic Canada, who settle in rental housing upon their arrival in the western provinces. As for Alberta, both Edmonton and Calgary have seen increases in the vacancy rate, mainly due to reduced migration into the province and increased supply of non-traditional forms of rental accommodations such as rented condominiums and basement apartments.
At the other end of the spectrum, the major urban centres with the highest vacancy rates were Windsor (13.2 per cent), Moncton (5.5 per cent), and Hamilton (4.7 per cent).
The highest average monthly rents for two-bedroom apartments in Canada’s major centres were in Calgary ($1,096), Toronto ($1,075), Vancouver ($1,071), and Edmonton ($1,000). Of all the major centres, these four were the only ones with average rents at or above $1,000. The lowest average monthly rents for two-bedroom apartments were in Saguenay ($497), and Trois-Rivières ($501).
Year-over-year comparison of rents can be slightly misleading because rents in newly-built structures tend to be higher than in existing buildings. Therefore, CMHC provides an analysis of rents that excludes new structures, resulting in a better indication of actual rent increases paid by tenants. Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased by 3.6 per cent between April 2007 and April 2008. While the average rent for two-bedroom apartments in existing structures increased in all major centres, rent increases were particularly strong in Saskatoon (21.3 per cent), Edmonton (13.7 per cent), Regina (10.4 per cent), and Abbotsford (9.1 per cent). When these four centres are excluded, the average rent increase in existing structures in the remaining 30 centres was only 2.3 per cent.
CMHC’s spring Rental Market Survey found that the average rental apartment availability rate in Canada’s 35 major centres was 4.9 per cent in April 2008 down from 5.4 per cent in April 2007. A rental unit is considered available if the unit is vacant (physically unoccupied and ready for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. Availability rates were highest in Windsor (15.6 per cent), Hamilton (8.1 per cent) and Moncton (6.4 per cent), while the lowest rates were in Kelowna (1.3 per cent), Vancouver (1.3 per cent) and Winnipeg (1.5 per cent).
“The Canadian economy remains very supportive of strong demand for both ownership and rental housing thanks to solid job creation and healthy income gains,” said Bob Dugan, Chief Economist at CMHC's Market Analysis Centre. “High levels of immigration and the increasing gap between the cost of home ownership and renting continue to drive rental demand in 2008. These factors have put downward pressure on vacancy rates over the past year.”
The results of CMHC’s spring survey reveal that the major centres with the lowest vacancy rates in April 2008 were Victoria (0.3 per cent), Kelowna (0.3 per cent), Greater Sudbury (0.7 per cent), Vancouver (0.9 per cent), and Saskatoon (0.9 per cent). A unit is considered vacant if, at the time of the survey, it is physically unoccupied and ready for immediate rental. In other words, a new tenant can sign a lease for a vacant unit and move in immediately. All major centres in British Columbia except for Abbotsford, posted a vacancy rate below one per cent due to rising migration to British Columbia and relatively high home ownership costs that have resulted in increased rental demand. Provincially, vacancy rates were lowest among the western provinces, especially Manitoba (1.0 per cent), Saskatchewan (1.2 per cent), and British Columbia (1.1 per cent). This is largely due to the migration of workers from Central and Atlantic Canada, who settle in rental housing upon their arrival in the western provinces. As for Alberta, both Edmonton and Calgary have seen increases in the vacancy rate, mainly due to reduced migration into the province and increased supply of non-traditional forms of rental accommodations such as rented condominiums and basement apartments.
At the other end of the spectrum, the major urban centres with the highest vacancy rates were Windsor (13.2 per cent), Moncton (5.5 per cent), and Hamilton (4.7 per cent).
The highest average monthly rents for two-bedroom apartments in Canada’s major centres were in Calgary ($1,096), Toronto ($1,075), Vancouver ($1,071), and Edmonton ($1,000). Of all the major centres, these four were the only ones with average rents at or above $1,000. The lowest average monthly rents for two-bedroom apartments were in Saguenay ($497), and Trois-Rivières ($501).
Year-over-year comparison of rents can be slightly misleading because rents in newly-built structures tend to be higher than in existing buildings. Therefore, CMHC provides an analysis of rents that excludes new structures, resulting in a better indication of actual rent increases paid by tenants. Overall, the average rent for two-bedroom apartments in existing structures across Canada’s 35 major centres increased by 3.6 per cent between April 2007 and April 2008. While the average rent for two-bedroom apartments in existing structures increased in all major centres, rent increases were particularly strong in Saskatoon (21.3 per cent), Edmonton (13.7 per cent), Regina (10.4 per cent), and Abbotsford (9.1 per cent). When these four centres are excluded, the average rent increase in existing structures in the remaining 30 centres was only 2.3 per cent.
CMHC’s spring Rental Market Survey found that the average rental apartment availability rate in Canada’s 35 major centres was 4.9 per cent in April 2008 down from 5.4 per cent in April 2007. A rental unit is considered available if the unit is vacant (physically unoccupied and ready for immediate rental), or if the existing tenant has given or received notice to move and a new tenant has not signed a lease. Availability rates were highest in Windsor (15.6 per cent), Hamilton (8.1 per cent) and Moncton (6.4 per cent), while the lowest rates were in Kelowna (1.3 per cent), Vancouver (1.3 per cent) and Winnipeg (1.5 per cent).
Wednesday, May 28, 2008
More Homes for Sale—Welcome News for Homebuyers
Vancover, BC – May 14, 2008. British Columbia Real Estate Association (BCREA) reports residential sales dollar volume on the Multiple Listing Service® (MLS®) in BC dipped 1.4 per cent to $4.1 billion in April, compared to April 2007. Residential unit sales declined 11 per cent to 8,623 units during the same period. The average MLS® residential price in the province reached $478,044, up 11 per cent from April 2007.
"Rising inventories are providing more choice for consumers and exerting less upward pressure on home prices," said Cameron Muir, BCREA Chief Economist. Active MLS® residential listings in the province were up 37 per cent to 47,923 units in April. "The combination of a slower pace of home sales and some profit taking by investors is contributing to a balance between housing demand and the supply of homes for sale."
"While homebuyers now face less competition for the homes available for sale," added Muir, "competition among home sellers means curb appeal, interior condition and prudent pricing are necessary for faster sale."
In the first four months of the year, MLS® residential sales volume in the province fell 1.8 per cent to $13.2 billion compared to the same period in 2007. Residential unit sales declined 13 per cent to 27,730 units, while the average MLS® residential price increased 13 per cent to $474,993.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
"Rising inventories are providing more choice for consumers and exerting less upward pressure on home prices," said Cameron Muir, BCREA Chief Economist. Active MLS® residential listings in the province were up 37 per cent to 47,923 units in April. "The combination of a slower pace of home sales and some profit taking by investors is contributing to a balance between housing demand and the supply of homes for sale."
"While homebuyers now face less competition for the homes available for sale," added Muir, "competition among home sellers means curb appeal, interior condition and prudent pricing are necessary for faster sale."
In the first four months of the year, MLS® residential sales volume in the province fell 1.8 per cent to $13.2 billion compared to the same period in 2007. Residential unit sales declined 13 per cent to 27,730 units, while the average MLS® residential price increased 13 per cent to $474,993.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Renovation Paybacks
Buying a home is only the tip of the iceberg when it comes to real estate investing. Once you've settled in and optimized your living space, you may realize it's time for a change.
Renovations around the house are a great way to expand and increase its value. However, not all renovations are beneficial in the long run. For instance, a new in-ground pool may sound like a good idea, but it may not attract buyers who are looking for a low-maintenance house when it's time to sell.
The return on your investment depends on several factors, including the current state of the real estate market, the scope of your renovation and how attractive the change is to potential buyers.
The following is a rundown of the smartest home renovations and their potential payback. In every case, remember to get more than one estimate for the work you want done and always keep your receipts for tax deduction purposes.
All costs and estimated payback figures are in Canadian dollars and can vary greatly depending on your house and budget.
Top “10” renovation paybacks:
1. Paint & decor, interior-100%
2. Heating system replace-100%
3. Kitchen renovation-94%
4. Family room addition-86%
5. Bathroom renovation-75%
6. Painting, exterior-65%
7. Flooring upgrades-62%
8. Fireplace addition-62%
9. Window/door replace-57%
10. Basement renovation-49%
Top “10” renovation trends:
1. Main floor laundry room
2. Home theatre room
3. Hardwood floor upgrade in kitchen
4. Ground floor home office
5. Whirlpool bath separate from shower
6. Built-in kitchen appliances
7. Addition of kitchen cooking island
8. Non-neutral interior paint colours
9. “Smart” house wiring
10. Skylights
Add a new bathroom
Though dealing with the new plumbing installation can be a pain, adding a second or third bathroom to your home is always a wise investment. It'll add convenience for as long as you live in the house and then pay off when you decide to sell. A new bathroom is a big project: it entails adding new plumbing, walls, tiles, counters, a toilet, and a shower. It is wise to put in a shower stall or bathtub (if your hot water tank can handle it) because this gives your a house another complete washroom.
Cost: $4,500 to $13,000Estimated Payback: 92%
Remodel your bathroom
If there is no space for a new bathroom, consider remodelling a current one instead. Simple things like cleaning up the floor tiles or adding a fresh coat of paint can go a long way. Of course, more drastic measures like installing a Jacuzzi, putting in new cabinets and mirrors or giving the bathroom a fresh new layout will also catch the eye of potential buyers.
Cost: $250 to $10,000Estimated Payback: 75%
Remodel your kitchen
As with bathrooms, kitchen renovations are also worthwhile. Both current and future owners reap the benefit of a more eye-catching and practical cooking space. Improvements can be minor (adding new linoleum, installing marble countertops) or major (adding an outdoor patio/eating area, changing the layout). In particular, installing built-in kitchen appliances, like a dishwasher, and an island benefit homeowners in the long run.
Minor Work Cost: $175 to $5,000Estimated Payback: 94% to 102%
Major Work Cost: $5,000 to $28,500Estimated Payback: 90%
Add a new family room
Many homeowners may be surprised to hear that the addition of a new family, living or sitting room is a rising trend. Older houses often have rooms that act as both a place to watch TV and entertain guests; this leaves no room to just sit and relax. To remedy this, renovators have hollowed out garages, extended the rears of houses and rearranged rooms in order to create a comfortable family room.
Depending on your home, the work involved can get quite serious. In some instances, you will need to knock down walls, extend the exterior walls of your house (laws permitting) or sacrifice current space, like storage rooms. The costs will be very high, but the payback can be quite rewarding.
Cost: $20,500 and upEstimated Payback: 86%
Remodel your home office
Dissatisfied with your small work area at home? Think about the possibilities of creating a dream home office. With proper planning, you can find enough space for a big oak desk, office electronics and all the trimmings. The result is a sanctuary for you and an added bonus for a potential home buyer in the future.
Those who have previously expanded their home offices have torn down adjoining walk-in closets and storage rooms. Since this room is more of an added luxury than a necessity to most however, don't sacrifice that all-important second bathroom for it. Instead, improve upon your current space with new flooring, light fixtures and maybe even a liquor cabinet.
Cost: $900 to $9,000Estimated Payback: 69%
Add a garage
The best thing about adding a garage to your home is that it can serve several purposes. Not only does it keep your car away from being battered by bad weather, it can also become a place to have a pantry or store tools. Unfortunately, not all homes are suited to have garages -- the driveway setup has to be just right.
Most homeowners who attempt this addition already have an open carport and need only close it off with a garage door and create direct access to the interior of the house.
Others have a second entrance to their house at the head of a sloping driveway and thus can afford to change this entrance from a living space to a garage. Either way, it's one of the hardest and longest renovations to do, but for convenience's sake, many find it necessary. Those not lucky enough to have part of the work done for them, as mentioned above, can find prefabricated garages that literally sit on top of the driveway.
Cost: $125 per square foot and upEstimated Payback: 65%
Finish your basement
Nothing is as frustrating for a homeowner as having a basement and not putting it to good use. Covering the cement floors, redoing the walls and converting your dank underground into livable space reaps loads of possibilities.
You can turn the basement into a TV room, use it as storage space or add a kitchenette and bedroom, and then rent it out. Therefore, the work can go from minimal (i.e. installing some carpeting) to extensive (creating a self-supporting apartment). Basements with a lot of natural light and direct outdoor access generally bring in more return than ones that simply have a few dark rooms.
Cost: $175 to several thousand dollarsEstimated Payback: 15% to 25%
Add a pool
Surprisingly, the addition of a pool is not a great investment. In-ground pools and the surrounding walkway and deck usually bring current homeowners lots of pleasure but do not markedly increase the value of the home. The trade-off is "fun now, no return later" and many are satisfied with this. The one saving grace is that a well-constructed deck with ample seating room will often mature in value. So, hire the pool crew if you must, but don't fool yourself about a generous return on investment.
Cost: $2,300 to over $13,500Estimated Payback: 5% to 15%
Improve the landscaping
Just like dating, buying a home is all about first impressions. If you put in the effort and money to groom your lawn into perfect shape, potential buyers will notice.
Good curbside appearance is important and can be achieved with the help of a local grass and pesticide company or the addition of a rock garden, stone path, rose bushes, and anything else your creative mind can think of. In fact, a few small touches can increase your payback more than the installation of a pool can.
Cost: $250 to $17,000Estimated Payback: 30% to 60%
Add a new heating or air conditioning system
The changes you make to your house do not always have to be aesthetic. Functional upgrades, like installing a dual electronic/oil heating system or central air conditioning, can do wonders for the value of your home. If done only a few years before moving out, you can expect to see almost a full "refund" when the house is sold. Usually, furnaces and central air components last for decades, requiring only minor annual checkups.
Cost: $2,300 to $9,000Estimated Payback: 100% for heating system, 75% for air conditioning
money can grow
The beauty of proper home renovation is that you benefit twofold: first, from the initial improvements to a room or property; second, your home increases in value when placed on the market. Of course, not all renovations are profitable -- that's why we've clued you in on the ones that pay off.ying a home is only the tip of the iceberg when it comes to real estate investing. Once you've settled in and optimized your living space, you may realize it's time for a change
Steps for Successful Home Renovation
DETERMINE WHAT YOU WANT- Magazines and books are a great source for fresh and new house renovation ideas. Once the work has started, any renovation changes that you make may cost more that if you include them in the original agreement.
DEVELOP A BUDGET - Most people tend to leave this step to the contractor. It's a good idea to talk with your financial institution about a relative range for your home improvement project. This step can also help you get pre-qualified for your home improvement loan.
GET ESTIMATES - A good rule of thumb is to obtain at least three different bids. Make sure that you provide all the renovators with the same detailed information.
ASK FOR REFERENCES - Good references are your best guarantee that your renovator can and will perform as expected. Ask for references from the last three projects they worked on. (Contractors can "cherry pick" their good references). Don't hesitate to let the renovator know that you will check out the references provided.
ACCEPT OR REJECT THE RENOVATOR'S CONTRACT PROPOSAL - The contract the renovations provide you are not etched in stone. Take the time to review it line by line. If necessary seek the advise of an attorney. Don't accept the contract unless the whole document is agreeable to you. If portions are not acceptable, discuss alternatives with the renovator and ask for a revised version of the contract that you both can mutually agree on. Remember that if a contract is grossly lower or higher than others, it should be avoided unless the renovator can explain his deviations from your other contracts.
UNDERSTAND YOUR OBLIGATIONS - Often it is assumed that the only obligation expected is timely payments. However, you may need to make alternative living arrangements as the work, or portions thereof, are in progress. Careful planning can greatly minimize inconvenience of living during the construction phase.
MAINTAIN A GOOD WORKING RELATIONSHIP WITH YOUR RENOVATOR - Have the renovator update you on a regular basis or at specific interval during the performance of the contract. Be available to make decisions when they are needed so work is not held up.
M1 Design 2733 Masefielld Rd. North Vancouver, BC
Renovations around the house are a great way to expand and increase its value. However, not all renovations are beneficial in the long run. For instance, a new in-ground pool may sound like a good idea, but it may not attract buyers who are looking for a low-maintenance house when it's time to sell.
The return on your investment depends on several factors, including the current state of the real estate market, the scope of your renovation and how attractive the change is to potential buyers.
The following is a rundown of the smartest home renovations and their potential payback. In every case, remember to get more than one estimate for the work you want done and always keep your receipts for tax deduction purposes.
All costs and estimated payback figures are in Canadian dollars and can vary greatly depending on your house and budget.
Top “10” renovation paybacks:
1. Paint & decor, interior-100%
2. Heating system replace-100%
3. Kitchen renovation-94%
4. Family room addition-86%
5. Bathroom renovation-75%
6. Painting, exterior-65%
7. Flooring upgrades-62%
8. Fireplace addition-62%
9. Window/door replace-57%
10. Basement renovation-49%
Top “10” renovation trends:
1. Main floor laundry room
2. Home theatre room
3. Hardwood floor upgrade in kitchen
4. Ground floor home office
5. Whirlpool bath separate from shower
6. Built-in kitchen appliances
7. Addition of kitchen cooking island
8. Non-neutral interior paint colours
9. “Smart” house wiring
10. Skylights
Add a new bathroom
Though dealing with the new plumbing installation can be a pain, adding a second or third bathroom to your home is always a wise investment. It'll add convenience for as long as you live in the house and then pay off when you decide to sell. A new bathroom is a big project: it entails adding new plumbing, walls, tiles, counters, a toilet, and a shower. It is wise to put in a shower stall or bathtub (if your hot water tank can handle it) because this gives your a house another complete washroom.
Cost: $4,500 to $13,000Estimated Payback: 92%
Remodel your bathroom
If there is no space for a new bathroom, consider remodelling a current one instead. Simple things like cleaning up the floor tiles or adding a fresh coat of paint can go a long way. Of course, more drastic measures like installing a Jacuzzi, putting in new cabinets and mirrors or giving the bathroom a fresh new layout will also catch the eye of potential buyers.
Cost: $250 to $10,000Estimated Payback: 75%
Remodel your kitchen
As with bathrooms, kitchen renovations are also worthwhile. Both current and future owners reap the benefit of a more eye-catching and practical cooking space. Improvements can be minor (adding new linoleum, installing marble countertops) or major (adding an outdoor patio/eating area, changing the layout). In particular, installing built-in kitchen appliances, like a dishwasher, and an island benefit homeowners in the long run.
Minor Work Cost: $175 to $5,000Estimated Payback: 94% to 102%
Major Work Cost: $5,000 to $28,500Estimated Payback: 90%
Add a new family room
Many homeowners may be surprised to hear that the addition of a new family, living or sitting room is a rising trend. Older houses often have rooms that act as both a place to watch TV and entertain guests; this leaves no room to just sit and relax. To remedy this, renovators have hollowed out garages, extended the rears of houses and rearranged rooms in order to create a comfortable family room.
Depending on your home, the work involved can get quite serious. In some instances, you will need to knock down walls, extend the exterior walls of your house (laws permitting) or sacrifice current space, like storage rooms. The costs will be very high, but the payback can be quite rewarding.
Cost: $20,500 and upEstimated Payback: 86%
Remodel your home office
Dissatisfied with your small work area at home? Think about the possibilities of creating a dream home office. With proper planning, you can find enough space for a big oak desk, office electronics and all the trimmings. The result is a sanctuary for you and an added bonus for a potential home buyer in the future.
Those who have previously expanded their home offices have torn down adjoining walk-in closets and storage rooms. Since this room is more of an added luxury than a necessity to most however, don't sacrifice that all-important second bathroom for it. Instead, improve upon your current space with new flooring, light fixtures and maybe even a liquor cabinet.
Cost: $900 to $9,000Estimated Payback: 69%
Add a garage
The best thing about adding a garage to your home is that it can serve several purposes. Not only does it keep your car away from being battered by bad weather, it can also become a place to have a pantry or store tools. Unfortunately, not all homes are suited to have garages -- the driveway setup has to be just right.
Most homeowners who attempt this addition already have an open carport and need only close it off with a garage door and create direct access to the interior of the house.
Others have a second entrance to their house at the head of a sloping driveway and thus can afford to change this entrance from a living space to a garage. Either way, it's one of the hardest and longest renovations to do, but for convenience's sake, many find it necessary. Those not lucky enough to have part of the work done for them, as mentioned above, can find prefabricated garages that literally sit on top of the driveway.
Cost: $125 per square foot and upEstimated Payback: 65%
Finish your basement
Nothing is as frustrating for a homeowner as having a basement and not putting it to good use. Covering the cement floors, redoing the walls and converting your dank underground into livable space reaps loads of possibilities.
You can turn the basement into a TV room, use it as storage space or add a kitchenette and bedroom, and then rent it out. Therefore, the work can go from minimal (i.e. installing some carpeting) to extensive (creating a self-supporting apartment). Basements with a lot of natural light and direct outdoor access generally bring in more return than ones that simply have a few dark rooms.
Cost: $175 to several thousand dollarsEstimated Payback: 15% to 25%
Add a pool
Surprisingly, the addition of a pool is not a great investment. In-ground pools and the surrounding walkway and deck usually bring current homeowners lots of pleasure but do not markedly increase the value of the home. The trade-off is "fun now, no return later" and many are satisfied with this. The one saving grace is that a well-constructed deck with ample seating room will often mature in value. So, hire the pool crew if you must, but don't fool yourself about a generous return on investment.
Cost: $2,300 to over $13,500Estimated Payback: 5% to 15%
Improve the landscaping
Just like dating, buying a home is all about first impressions. If you put in the effort and money to groom your lawn into perfect shape, potential buyers will notice.
Good curbside appearance is important and can be achieved with the help of a local grass and pesticide company or the addition of a rock garden, stone path, rose bushes, and anything else your creative mind can think of. In fact, a few small touches can increase your payback more than the installation of a pool can.
Cost: $250 to $17,000Estimated Payback: 30% to 60%
Add a new heating or air conditioning system
The changes you make to your house do not always have to be aesthetic. Functional upgrades, like installing a dual electronic/oil heating system or central air conditioning, can do wonders for the value of your home. If done only a few years before moving out, you can expect to see almost a full "refund" when the house is sold. Usually, furnaces and central air components last for decades, requiring only minor annual checkups.
Cost: $2,300 to $9,000Estimated Payback: 100% for heating system, 75% for air conditioning
money can grow
The beauty of proper home renovation is that you benefit twofold: first, from the initial improvements to a room or property; second, your home increases in value when placed on the market. Of course, not all renovations are profitable -- that's why we've clued you in on the ones that pay off.ying a home is only the tip of the iceberg when it comes to real estate investing. Once you've settled in and optimized your living space, you may realize it's time for a change
Steps for Successful Home Renovation
DETERMINE WHAT YOU WANT- Magazines and books are a great source for fresh and new house renovation ideas. Once the work has started, any renovation changes that you make may cost more that if you include them in the original agreement.
DEVELOP A BUDGET - Most people tend to leave this step to the contractor. It's a good idea to talk with your financial institution about a relative range for your home improvement project. This step can also help you get pre-qualified for your home improvement loan.
GET ESTIMATES - A good rule of thumb is to obtain at least three different bids. Make sure that you provide all the renovators with the same detailed information.
ASK FOR REFERENCES - Good references are your best guarantee that your renovator can and will perform as expected. Ask for references from the last three projects they worked on. (Contractors can "cherry pick" their good references). Don't hesitate to let the renovator know that you will check out the references provided.
ACCEPT OR REJECT THE RENOVATOR'S CONTRACT PROPOSAL - The contract the renovations provide you are not etched in stone. Take the time to review it line by line. If necessary seek the advise of an attorney. Don't accept the contract unless the whole document is agreeable to you. If portions are not acceptable, discuss alternatives with the renovator and ask for a revised version of the contract that you both can mutually agree on. Remember that if a contract is grossly lower or higher than others, it should be avoided unless the renovator can explain his deviations from your other contracts.
UNDERSTAND YOUR OBLIGATIONS - Often it is assumed that the only obligation expected is timely payments. However, you may need to make alternative living arrangements as the work, or portions thereof, are in progress. Careful planning can greatly minimize inconvenience of living during the construction phase.
MAINTAIN A GOOD WORKING RELATIONSHIP WITH YOUR RENOVATOR - Have the renovator update you on a regular basis or at specific interval during the performance of the contract. Be available to make decisions when they are needed so work is not held up.
M1 Design 2733 Masefielld Rd. North Vancouver, BC
Renovation Spending Across 10 Major Centres Up by $2 Billion in 2007
An estimated 1.5 million households in 10 major Canadian centres surveyed indicated they completed renovations last year that cost an average of more than $12,800, according to the Renovation and Home Purchase Survey released today by Canada Mortgage and Housing Corporation (CMHC).
“Close to $19.7 billion was spent on renovations in 2007 across the 10 major centres surveyed, an increase of more than $2 billion compared to 2006,” said Bob Dugan, Chief Economist at CMHC. “As well, when Canadian homeowners in these 10 centres surveyed were asked about their plans for this year, 40 per cent indicated that they intend to spend $1,000 or more on renovations by the end of 2008.”
The Renovation and Home Purchase Survey reports on actual renovation expenditures made in the previous year, as well as intentions to buy or renovate a home in 2008 in the following 10 major centres: St. John's, Halifax, Québec, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver1. The survey enables all market participants to benefit from timely information on renovation market trends.
Close to half — 46 per cent — of households reported that the cost of renovations was in line with what they had budgeted, while 37 per cent went over their planned budget for the renovation. More than a quarter — 26 per cent — of households that undertook a renovation project hired a contractor for a portion of the work, up slightly from 24 per cent that undertook renovations in 2006. ‘Do-it-yourselfers' accounted for 31 per cent of renovators in 2007, down slightly from 34 per cent in 2006. However, many households — 41 per cent — chose to contract out the entire renovation project.
The main reason given by households for renovating in 2007 was to update, add value or to prepare to sell — 59 per cent. Some 27 per cent of respondents stated that the main reason for renovating was that their home needed repairs. The top three renovations completed last year were: remodelling rooms — 31 per cent, — painting or wallpapering — 27 per cent, — and hard surface flooring and wall-to-wall carpeting — 26 per cent.
Of the 10 major centres surveyed, the percentage of households that spent $1,000 or more on renovations in 2007 was highest in Winnipeg at 36 per cent, followed by St. John's and Halifax at 35 per cent, while the centre with the least proportion of households that undertook renovations was in Québec at 28 per cent.
Similarly, renovation intentions for 2008 across the 10 major centres are strongest in Winnipeg and St. John's, where 50 and 48 per cent of consumers, respectively, indicated they plan to undertake renovations costing $1,000 or more. The proportion of potential renovators is lowest in Québec where 35 per cent of households indicated they intend to renovate in 2008.
On the home purchasing front, six per cent of households across the 10 major centres surveyed intend to purchase a home that will be used as a primary residence in 2008. This is down from eight per cent in 2007. Forty-two per cent of households that stated they intend to purchase a home in 2008 are first-time buyers. This percentage is identical to the share of actual first-time home buyers in 2007. The majority of first-time buyers are between the ages of 25 and 34, with a household income between $40,000 and $60,000 annually.
Home buying intentions are strongest in Calgary where 8 per cent of households reported that they are considering buying a home this year, down from 14 per cent in 2007. Purchase intentions are the lowest in Québec at four per cent.
CMHC OTTAWA, May 22, 2008
“Close to $19.7 billion was spent on renovations in 2007 across the 10 major centres surveyed, an increase of more than $2 billion compared to 2006,” said Bob Dugan, Chief Economist at CMHC. “As well, when Canadian homeowners in these 10 centres surveyed were asked about their plans for this year, 40 per cent indicated that they intend to spend $1,000 or more on renovations by the end of 2008.”
The Renovation and Home Purchase Survey reports on actual renovation expenditures made in the previous year, as well as intentions to buy or renovate a home in 2008 in the following 10 major centres: St. John's, Halifax, Québec, Montréal, Ottawa, Toronto, Winnipeg, Calgary, Edmonton, and Vancouver1. The survey enables all market participants to benefit from timely information on renovation market trends.
Close to half — 46 per cent — of households reported that the cost of renovations was in line with what they had budgeted, while 37 per cent went over their planned budget for the renovation. More than a quarter — 26 per cent — of households that undertook a renovation project hired a contractor for a portion of the work, up slightly from 24 per cent that undertook renovations in 2006. ‘Do-it-yourselfers' accounted for 31 per cent of renovators in 2007, down slightly from 34 per cent in 2006. However, many households — 41 per cent — chose to contract out the entire renovation project.
The main reason given by households for renovating in 2007 was to update, add value or to prepare to sell — 59 per cent. Some 27 per cent of respondents stated that the main reason for renovating was that their home needed repairs. The top three renovations completed last year were: remodelling rooms — 31 per cent, — painting or wallpapering — 27 per cent, — and hard surface flooring and wall-to-wall carpeting — 26 per cent.
Of the 10 major centres surveyed, the percentage of households that spent $1,000 or more on renovations in 2007 was highest in Winnipeg at 36 per cent, followed by St. John's and Halifax at 35 per cent, while the centre with the least proportion of households that undertook renovations was in Québec at 28 per cent.
Similarly, renovation intentions for 2008 across the 10 major centres are strongest in Winnipeg and St. John's, where 50 and 48 per cent of consumers, respectively, indicated they plan to undertake renovations costing $1,000 or more. The proportion of potential renovators is lowest in Québec where 35 per cent of households indicated they intend to renovate in 2008.
On the home purchasing front, six per cent of households across the 10 major centres surveyed intend to purchase a home that will be used as a primary residence in 2008. This is down from eight per cent in 2007. Forty-two per cent of households that stated they intend to purchase a home in 2008 are first-time buyers. This percentage is identical to the share of actual first-time home buyers in 2007. The majority of first-time buyers are between the ages of 25 and 34, with a household income between $40,000 and $60,000 annually.
Home buying intentions are strongest in Calgary where 8 per cent of households reported that they are considering buying a home this year, down from 14 per cent in 2007. Purchase intentions are the lowest in Québec at four per cent.
CMHC OTTAWA, May 22, 2008
Monday, May 12, 2008
MORTGAGE RATE FORECAST
At the end of April, the borrowing cost for a five-year fixed rate mortgage was 6.99 per cent, 55 basis points (bps) below year-end 2007. BCREA expects rates to remain stable over the second and third quarters of 2008 before rising modestly in Q4 2008 and into 2009.
US Weakness Impacts Canada
Lower interest rates are being driven by the faltering economy south of the border. The US is in the middle of a housing market-led economic downturn; housing starts are at the lowest levels since the early 1990s. Meanwhile, aggregate US resale home prices have dropped and unemployment rates have risen, contributing to lower consumer confidence, spending and greater economic uncertainty.
In response, the US Federal Reserve slashed its policy interest rate by 200 bps thus far in 2008, pushing it down to 2.25 per cent. Despite these efforts, US growth looks to remain weak for much of 2008 and into 2009.
A potential US recession will weigh on Canadian economic growth through various channels. Canada’s export sector, already reeling from the rapid ascent of the Canadian dollar in 2007, will be further challenged by reduced product demand. Undoubtedly, US weakness will flow through Canada’s economy, given that more than 78 per cent of Canadian goods exports are sent to the US.
Canada’s economy grew by only 0.8 per cent in Q4 2007, the lowest growth since Q2 of 2003. While domestic demand remained robust, export activity fell by 2.2 per cent over the previous quarter. Declines were mostly confined to the manufacturing, other goods and transport sectors, which depend more on cross-border trade.
Interest Rates to Fall
The Bank of Canada’s (BoC) mandate is to maintain price stability, rather than to explicitly target economic growth. That said, current and expected economic activity play critical roles in future inflation pressures and monetary policy. Core inflation was 1.3 per cent in March, marking the lowest growth since March 2004. The increased value of the Canadian dollar vis-à-vis the US has lowered import prices, and consumers have further benefited from the recent GST cut. Low inflation and a weak US economy point to further cuts in the BoC’s policy rate at future meetings this year.
Mortgage Rates
Cuts in the overnight rate directly impact variable mortgage rates, which are tied to prime rates. Prime rates adjust when the BoC adjusts its target for the overnight rate. In the fixed-rate mortgage market, rates are highly correlated to bond yields of similar maturity. While short-term rates partially filter into longer-term rates, future expectations for the economy, inflation and interest rates play larger roles. With the economy likely to remain weaker for much of 2008, inflation is likely to stay well anchored. As a result, the expectation of lower interest rates moving forward should dampen bond yields and lead to downward pressure on administered one and five year mortgage rates. However, continued volatility in financial markets has also translated into higher costs of credit for banks used for lending purposes. This should offset some of the downward pressure on mortgage rates.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
US Weakness Impacts Canada
Lower interest rates are being driven by the faltering economy south of the border. The US is in the middle of a housing market-led economic downturn; housing starts are at the lowest levels since the early 1990s. Meanwhile, aggregate US resale home prices have dropped and unemployment rates have risen, contributing to lower consumer confidence, spending and greater economic uncertainty.
In response, the US Federal Reserve slashed its policy interest rate by 200 bps thus far in 2008, pushing it down to 2.25 per cent. Despite these efforts, US growth looks to remain weak for much of 2008 and into 2009.
A potential US recession will weigh on Canadian economic growth through various channels. Canada’s export sector, already reeling from the rapid ascent of the Canadian dollar in 2007, will be further challenged by reduced product demand. Undoubtedly, US weakness will flow through Canada’s economy, given that more than 78 per cent of Canadian goods exports are sent to the US.
Canada’s economy grew by only 0.8 per cent in Q4 2007, the lowest growth since Q2 of 2003. While domestic demand remained robust, export activity fell by 2.2 per cent over the previous quarter. Declines were mostly confined to the manufacturing, other goods and transport sectors, which depend more on cross-border trade.
Interest Rates to Fall
The Bank of Canada’s (BoC) mandate is to maintain price stability, rather than to explicitly target economic growth. That said, current and expected economic activity play critical roles in future inflation pressures and monetary policy. Core inflation was 1.3 per cent in March, marking the lowest growth since March 2004. The increased value of the Canadian dollar vis-à-vis the US has lowered import prices, and consumers have further benefited from the recent GST cut. Low inflation and a weak US economy point to further cuts in the BoC’s policy rate at future meetings this year.
Mortgage Rates
Cuts in the overnight rate directly impact variable mortgage rates, which are tied to prime rates. Prime rates adjust when the BoC adjusts its target for the overnight rate. In the fixed-rate mortgage market, rates are highly correlated to bond yields of similar maturity. While short-term rates partially filter into longer-term rates, future expectations for the economy, inflation and interest rates play larger roles. With the economy likely to remain weaker for much of 2008, inflation is likely to stay well anchored. As a result, the expectation of lower interest rates moving forward should dampen bond yields and lead to downward pressure on administered one and five year mortgage rates. However, continued volatility in financial markets has also translated into higher costs of credit for banks used for lending purposes. This should offset some of the downward pressure on mortgage rates.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
BC Housing Starts 2008
Housing starts in the province climbed 8 per cent to 39,195 units last year. High-density housing gained a larger proportion of total housing starts as a result of land supply and affordability constraints and consumer preferences Multiple housing starts comprised 63 per cent of total housing starts in the province last year.
Housing starts in BC climbed 15 per cent in the first quarter of 2008 compared to the same period in 2007, but housing starts are not expected to reach last year’s total by year end. Capacity constraints in the province’s large urban centers will limit new construction activity this year. The tightening of credit will also negatively impact the availability of financing and the cost of borrowing. In addition, a marked increase in resale listings and fewer investors are slowing presales of new homes and causing developers to re-evaluate their market exposure.
While housing starts may be higher in the first half of 2008, they are expected to decline during the second half, resulting in a 3 per cent decline in total starts to 37,900 units by year end. Higher new home inventories and moderating demand is expected to pull housing starts back an additional 6 per cent to 35,500 units in 2009. Multiple housing starts are forecast to increase 1 per cent this year on the strength of projects currently planned or underway. However, rising inventories are expected to reduce multiple starts by 10 per cent to 22,500 units in 2009.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
Housing starts in BC climbed 15 per cent in the first quarter of 2008 compared to the same period in 2007, but housing starts are not expected to reach last year’s total by year end. Capacity constraints in the province’s large urban centers will limit new construction activity this year. The tightening of credit will also negatively impact the availability of financing and the cost of borrowing. In addition, a marked increase in resale listings and fewer investors are slowing presales of new homes and causing developers to re-evaluate their market exposure.
While housing starts may be higher in the first half of 2008, they are expected to decline during the second half, resulting in a 3 per cent decline in total starts to 37,900 units by year end. Higher new home inventories and moderating demand is expected to pull housing starts back an additional 6 per cent to 35,500 units in 2009. Multiple housing starts are forecast to increase 1 per cent this year on the strength of projects currently planned or underway. However, rising inventories are expected to reduce multiple starts by 10 per cent to 22,500 units in 2009.
“Copyright British Columbia Real Estate Association. Reprinted with permission.”
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