Owning a Calgary house more expensive: But still among most affordable in Canada
This is good news for those looking to buy. Prices are stable and affordable.
Owning a home in Calgary became more expensive in the second quarter of this year but housing in the city is one of the most affordable among major cities in Canada, says a report released Monday.
“The long hoped for rebound in the Calgary-area market that appeared to be on track earlier this year lost some momentum in the second quarter,” says the RBC Housing Trends and Affordability report.
“After posting two successive increases, home resales edged down during the April-June period, providing little impetus to prices, which continued to move sideways for the most part.
“With such absence of price pressure, the loss of housing affordability was minimal in the quarter. The RBC measures for the Calgary area rose between 0.4 and 1.1 percentage points, representing a smaller deterioration among major Canadian cities. Owning a home in the area, therefore, continues to be close to the most affordable that it has been in almost six years.”
The RBC Housing Affordability Measure, which has been compiled since 1985, shows the proportion of median pre-tax household income that would be required to service the cost of mortgage payments (principal and interest), property taxes and utilities. The higher the measure, the more difficult it is to afford a house. For example, an affordability measure of 50 per cent means that home ownership costs take up 50 per cent of a typical household’s pre-tax income.
In the second quarter, Calgary’s measures were 37.1 per cent for a detached bungalow, 38.5 per cent for a standard two-storey, and 23.0 per cent for a standard condominium. The measures increased by 0.6 per cent (bungalow), 1.1. per cent (two-storey) and 0.4 per cent (condo).
However, they are lower than a year ago by 3.1 per cent for a bungalow, 2.9 per cent for a two-storey and 1.6 per cent for a condo.
“Notwithstanding the latest bout of uncertainty, we believe that the strong economic fundamentals of Alberta and Calgary will find their way into the housing market and will support homebuyer demand in the period ahead,” says the report.
RBC says the average bungalow price in Calgary declined by two per cent year-over-year in the second quarter to $411,700 while a two-storey dropped by 1.6 per cent to $415,200 and a condo fell by 1.1 per cent to $249,000.
Sano Stante, president of the Calgary Real Estate Board, said prevailing negative economic conditions will restrain any increases in interest rates for awhile.
“Those are increases that we fully expected prior to these events and they’ve now been abated,” said Stante. “That was our biggest risk of deteriorating affordability.
“With an assurance that interest rates are going to stay low for the next 12 months anyway — and there’s somewhat of an assurance — then it really looks like we’re going to lead the nation in affordability especially when we start to get increased employment and in-migration towards the end of this year. That should really lend to a more robust real estate market.”
Robert Hogue, senior economist with RBC, said he too expects Calgary’s affordability to remain about the same.
“Previous to a few weeks ago we expected higher interest rates would start really putting more and more pressure across the board in Canada including in Calgary on the monthly costs of home ownership,” he said. “Now we’ve pushed everything out to the middle of next year.
“For the next few months or quarters I think chances are that affordability is probably will go sideways, the same as the housing market.”
© Copyright (c) The Calgary Herald
Alberta renovation spending to lead country
This is great news for Calgary. It shows two things.
1. Due to the home price drops from the peak in 2007 many are choosing to renovate rather than move out of their “upside down” mortgages.
2. The Perfect Home Program allows you to include the cost of renovations in the mortgage when it is purchased. Call to discuss how this program work. It means that you can buy a home in the location YOU want and then make it YOUR Perfect Home with your own kitchen, floors, basement and all the rest.
Alberta renovation spending to lead country
1.7% growth in 2011, 4.9% in 2012.
Renovation spending in Alberta is forecast to lead the country in year-over-year growth this year and in 2012, according to a report by the Altus Group, an economic consulting firm.
The report said spending in Alberta on renovations hit $5.7 billion in 2010, which accounted for 9.5 per cent of all spending in the country. Total spending in the province was up 7.2 per cent from the previous year which was behind many other provinces for annual growth.
Canada saw 9.2 per cent growth in 2010 to $60.1 billion.
Altus Group forecasts spending to increase in Alberta by 1.7 per cent this year and by 4.9 per cent next year — both growth rates leading the nation.
For Canada, the report forecasts a 0.1 per cent decline this year followed by a 3.6 per cent hike in 2012.
“Canada’s general economic recovery continues, but at a modest pace,” said the report. “Job growth has been stronger through the recovery than after the last recession, but still suffers from weakness, particularly in terms of youth and full-time jobs. The cautiously optimistic forecast for economic growth translates into equal caution over the forecast for renovation demand.
“The good news for renovators is that weaker than expected economic growth has extended the period of very low interest rates, perhaps into 2012. Low interest rates are important for this sector both in terms of affordability for those who need to borrow to finance their renovations, as well as in keeping mortgage payments in check, thereby freeing up income for discretionary renovation spending.”
© Copyright (c) The Calgary Herald
Is Calgary’s boom back? Consumer confidence seen climbing ‘with a vengeance’
CALGARY – From BMWs to Bentleys to a good bottle of wine, Calgary consumers are opening their wallets in what’s being described as more than just a recovering economy – with some even willing to say the word “boom” again.
Retailer Wayne Henuset is in the thick of it, discovering his own barometer to measure what is quickly turning into a healthier marketplace.
The owner of Willow Park Wines and Spirits says consumer confidence has been rising “with a vengeance” since fall.
“We know this because when things are bad, people just buy wine, on sale, and bring it home.
“But when times are good, the restaurants are buying more wine from us, because people are going out more. And that’s what’s happening.”
It’s one of myriad examples that suggest Calgary is reclaiming its economic swagger, as sectors across the board enjoy a surge in consumer and investment confidence, including high-end retail, real estate, construction and, most importantly, oil and gas.
Henuset adds that during the 2008-09 recession, reduced prices and spot sales were what brought customers in.
“Now they’re not really paying attention to that as much, they’re just buying whenever,” Henuset said, adding that the pricier, highend bottles are also getting bought up more.
According to the BMO Blue Book report released this week, Alberta is expected to lead the country in real GDP growth by next year as the province’s economy starts humming again.
Real GDP is expected to expand 3.6 per cent this year before moderating to 3.4 per cent by 2012, according to BMO Capital Markets.
In Calgary, recent reports have suggested record leasing activity in the downtown office market last year, with experts saying job growth isn’t far behind.
Meanwhile, job growth has already started in the construction industry with construction giant Ledcor launching a massive recruitment campaign, with plans to hire up to 9,000 people this year in Alberta and other parts of Western Canada.
In the energy sector, industry activity is way up, says oil and gas analyst Peter Linder, with drilling activity significantly on the rise, record land sales and job prospects improving.
Alberta Energy reported this week it had sold oil and gas leases or licences on 271,000 hectares of land worth $842 million, including a whopping $107 million for a 7,900-hectare licence near Red Deer.
“All of that means more activity in the energy industry, and that means much more jobs,” said Linder.
“In fact, I think we’re on the cusp of another significant labour shortage, another boom.”
Even the lower natural gas prices that have been a hurdle in recent years will start to recover, Linder predicts.
“The second half of this year will be far, far better than the last three years.”
Ben Brunnen, chief economist with the Calgary Chamber of Commerce, explains that as oil prices recover, Calgary’s oil and gas sector is enjoying increased activity and investment confidence.
As of March 2011, 59 oilsands projects valued at nearly $100 billion were either planned or already underway in Alberta.
“And when investment is good, incomes increase here. That’s a unique perspective for Calgary because we are the head office of oil and gas,” Brunnen said.
Businesses seem to already be reaping the rewards of more disposable income.
Justin Havre, a realtor with CIR Realty, says Calgary’s real estate market is bouncing back, particularly in the luxury home market with 44 homes sold for over $1 million in Calgary alone last month.
“The luxury market is becoming really active, and it’s usually a good indicator that there’s some confidence in our economy and in Calgary investment.”
Tony Dilawri, who runs several car dealerships including Calgary BMW and the Distinctive Collection, which sells Bentleys and Aston Martins, says the luxury car market has also improved from last year.
“We’re finding consumer confidence is definitely up as people become a little more willing to spend money on their vehicles.”
BMW sales are up 20 per cent from last year, Dilawri said, adding that some 20 new and pre-owned Bentleys and Aston Martins were delivered to customers last month. Dilawri says the Calgary kind of wealth is on its way back, a swagger that’s proud, but not too boastful. Calgary is not like Montreal and Toronto, he said, filled with old money that isn’t always affected by economic shifts.
“We’re young in Alberta, and we work hard for our wealth,” he said.
“So when we get it back, we want to have some fun. We don’t want to boast, but we want to reward ourselves.”
Brunnen agreed Calgary’s economy is bouncing back, but consumers are still cautious.
“The investment is there, and the consumer confidence will come with it.”
While optimism is growing in Calgary, however, the economic mood elsewhere is guarded. Reuters reported last week the global economy is still in flux, with investors wary that the real stresses still lie ahead. European debt uncertainties and the arrest of the head of the International Monetary Fund mixed with Arab revolt and Japan’s recovery from natural disaster are all contributors.
“It is clear that some investors have decided that they need to take some risk off the table, but they do not want to take too much off,” said Andrew Milligan, head of global strategy at Standard Life Investments.
eferguson@calgaryherald.com
Mark Herman in the press on high-end properties selling quickly
High-flying stock market sends business to brokers Lingering caution at the big banks and wealthy clients increasingly bullish on the stock market are helping brokers claim their biggest share of high-end deals in years – with a Re/Max study helping explain the phenomenon.
By Vernon Clement Jones
Mortgagebrokernews.ca
Lingering caution at the big banks and wealthy clients increasingly bullish on the stock market are helping brokers claim their biggest share of high-end deals in years – with a Re/Max study helping explain the phenomenon.
“In the last week, we’ve just had two of the biggest deals of my career,” Mark Herman, an agent and team leader for Mortgage Alliance Mortgages Are Marvelous Inc. in Calgary, told MortgageBrokerNews.ca. “One was a new purchase for $1.525 million, with 5% down, and the other one was for a $750,000 line of credit on a $1.5 million purchase. High-end mortgage business for brokers in Calgary has picked up like we’ve never seen.”
Calgary brokers may not be alone.
Re/Max examined 12 major centres from coast-to-coast and found that luxury sales surged in two-thirds of them during the first four months of 2011, compared to the same period last year.
While Vancouver led in terms of percentage increases – 118% year over year – Dartmouth, at 27%, Winnipeg, 24%, Hamilton-Burlington, 13%, and Greater Toronto, 9%, also saw spikes.
Herman’s market of Calgary was also on that list, at 51%, although that scorching hot performance fell short of setting a new record, unlike the other top jurisdictions on the list. With the exception of Vancouver, their sales growth can be chalked up to domestic buyers.
Michael Polzler, executive vice president for Re/Max in Ontario-Atlantic Canada, pointed to three key factors for the rise in high-end business: equity gains, stock market recovery, and improved economic performance.
Brokers like Herman are pointing to the some of the same factors to explain why they’re getting more high-net-worth clients stepping across their thresholds.
“These guys weren’t buying as much during the recession, but with prices still below recent highs, high-end buyers are now out bargain shopping,” said the mortgage agent, also an MBA.
“But what they’re doing is they’re looking to keep their money in the stock market and other high-yield investments and want to buy homes with as little money down as possible – it’s all about limiting opportunity costs. Also they’re coming to brokers this time because they’re finding the banks have been slower to ease credit and aren’t giving them the discounted rates they expect.”
Less than five months into 2011, another broker, Sharnjit Gill, has already surpassed last year’s total for high-value deals.
“We’re also seeing more activity there because those clients are more educated about what we as brokers can do for them beyond rate,” he told MortgageBrokerNews.ca.
Still the trend is less obvious at other mortgage brokerages, even in those markets highlighted by the Re/Max report.
While her Ottawa brokerage has seen an uptick in volume, said Kim McKenney, senior VP at Dominion Lending Centres The Mortgage Source.
“The average dollar amount has risen by only a couple of thousands of dollars,” she told MortgageBrokerNews.ca.
Mortgagebrokernews.ca is a division of KMI Media.
New-to-Canada mortgages for immigrants have been around for years!
Do you want to read some total BS-PR-spin that the banks put out? Below is a press release from a bank patting themselves on the bank for lending to new immigrants. Funny thing is that this program that they have “developed” has been around for more than 7 years. All they did was sign up for the CMHC New to Canada program that every other lender that we use has had since I started doing this in 2004! Good job ING. Way to do what every one else is doing. Many years late.
Getting a mortgage in this country may have just gotten slightly easier.
ING Direct Bank, recognizing the overwhelming desire for most Canadians, particularly with newcomers to the country, to realize the dream of home ownership is modifying its’ lending criteria.
In a release, ING Direct Bank said, “ING DIRECT, the country’s 6th largest mortgage lender, announced today it is offering its popular unmortgage to permanent and non-permanent residents with limited or no credit history. Permanent and non-permanent residents include those who have been residing in Canada for no longer than 60 months. “
ING Direct recognizes the sheer numbers and the tremendous influence that immigration plays- not just in the makeup of the Canadian population, but in the marketplace as well. As such, they are developing product to meet that need.
“At ING DIRECT, our goal has always been to give the power of saving to all Canadians, so offering our unmortgage to new residents allows us to stay true to that promise,” said Peter Aceto, President and CEO of ING DIRECT Canada. “We want to give newcomers access to the same products and savings opportunities we have been providing to Canadians for the last 14 years”
Motivated by the desire to establish a banking relationship right from day one with newcomers to this country, ING Direct jumped into action to provide a solution for people trying to establish their credit history.
Aceto says, “We have always been committed to making the mortgage experience better for our clients. For newcomers to Canada, our product is simple and easy to understand. We always provide the best rates upfront and guarantee those rates for up to 120 days after applying, and our flexible pre-payment options allow our clients to own their homes sooner by paying as little interest as possible over the life of the mortgage.”
Canada is known globally for its’ stringent lending policies- which are partly to thank for escaping the recent recession relatively unscathed.
While qualifying for a mortgage may have loosened slightly, it is likely not a sign that credit criteria is less stringent generally. Qualifying for a mortgage , while taking credit history into account, generally has some different criteria, because it is as much about the asset that is securing the debt, and the amount of cash available to pay for ongoing expenses.
Five steps to scoring a mortgage
This is a great general article on how to get ready to qualify for a mortgage. There are also great reports on the economy and why buying now is a good idea
by: Amy Fontinelle Investopedia.com
A variety of factors can keep you from qualifying for a mortgage. The big ones include a low credit score, insufficient income for the size of the loan you want, insufficient down payment and excessive debt. All of these factors are within your control, however. Let’s take a look at your options for overcoming any liabilities you may have as a borrower
1. Repair Your Credit and Increase Your Score
To lenders, your credit score represents the likelihood that you will make your mortgage payments in full and on time every month. Therefore, with most loans, the lower your credit score, the higher your interest rate will be to compensate for the increased risk of lending you money. If your credit score is below 620, you will be considered subprime and will have difficulty getting a loan at all, let alone one with favourable terms. On the other hand, if you have a credit score above 800, you’ll easily be able to get the best interest rate available (also known as the par rate). (Find out how your borrowing activities affect your credit rating in The Importance Of Your Credit Rating.)
Measures you can take to improve your credit score relatively quickly include paying down revolving consumer debts, such as credit cards or auto loans, using your debit card instead of your credit cards for future purchases, paying your bills on time every month and correcting any errors on your credit report. However, some flaws, like seriously late payments, collections, charge-offs, bankruptcy and foreclosure, will only be healed with time. (Read How To Dispute Errors On Your Credit Report to find out how to address reporting mistakes.)
In addition to managing your existing credit responsibly, don’t open any new credit accounts. Applying for new credit temporarily lowers your credit score, and having too much available credit is also considered a warning sign. Lenders may be afraid that if you have a lot of available credit, you’ll take advantage of it one day and adversely affect your ability to make your mortgage payments. (For more tips and techniques to help you rebuild your ruined credit rating, read Five Keys To Unlocking A Better Credit Score.)
2. Get a Higher-Paying Job
If lenders say your income isn’t high enough, ask them (or your mortgage broker) how much more you need to earn to qualify for the loan amount you want. Then try to find a new job in your existing line of work where you’ll be able to earn that much money.
Because lenders like to see a steady employment history, you’ll have to stay in the same line of work for this strategy to be successful. This can be disappointing news for borrowers, as switching professions entirely might offer the best chances for a salary increase. However, switching companies can also be a good way to get a significant boost in income. Significant raises from existing employers aren’t that common, but a new employer knows he’ll have to offer something special to get you to make the switch. (Read Negotiating For Employment Perks for tips on reaching an agreement with your boss.)
If switching companies right now won’t be enough to get the raise you need, think about things you can do relatively quickly to make yourself more valuable to employers. Is there a continuing education program that you could complete? If you’re a legal secretary, could you become a paralegal? If you’re a receptionist, could you become a secretary? A career counselor or headhunter might be able to give you some guidance specific to your situation about how to improve your marketability and how to reach your income goals. (Read Six Steps To Successfully Switching Financial Careers to learn how to make adjustments without starting over.)
Unfortunately, getting a part-time job on top of your full-time job may not provide what lenders consider qualifying income. The part-time job may be viewed as temporary, and since it will probably take you at least 15 years to pay off your mortgage, lenders are looking for you to have long-term income stability. (Increase Your Disposable Income gives you ideas on how to make more money now, which can make a big difference down the line.)
3. Save Like Crazy
The larger your down payment, the smaller the loan you’ll need. In addition, the lower your loan-to-value ratio (LTV ratio), the less risky lenders will consider you. Both of these factors will make you more likely to qualify for a loan. Be aware that you may have to reach a certain down payment threshold, like 10 per cent or 20 per cent (with 20 per cent being the most conventional), before a larger down payment will help you qualify for a loan. (Learn more in Mortgages: How Much Can You Afford?)
4. Don’t Pay More Than the Bank’s Appraised Value
The bank will not want to lend more than the house is worth because they could be on the losing end of the deal, should you foreclose and owe more than the bank could get for it. A 20 per cent down payment also becomes much less valuable if the house is worth 20 per cent less than the purchase price. Collateral value is important to lenders, so it should be kept in mind when making an offer to purchase a property. (Read 10 Tips For Getting A Fair Price On A Home and learn how to make sure your house is worth the price you pay.)
5. Reduce Your Debt
To a lender, what constitutes excessive debt is not a set number – it’s a total monthly debt payment that is too high for you to be able to afford the monthly mortgage payment you’re asking for. When deciding how much loan you qualify for, lenders will look at what’s called the front-end ratio, or the percentage of your gross monthly income that will be taken up by your house payment (principal, interest, property tax and homeowners insurance), and the back-end ratio, or the percentage of your gross monthly income that will be taken up by the house payment plus your other monthly obligations, such as student loans, credit cards and car payments.
The more debt you’re required to pay off each month, whether it’s “good debt” like a student loan or “bad debt” like a high-interest credit card, the lower the monthly housing payment lenders will decide you can afford, and the lower the purchase price you’ll be able to afford. Decreasing your debt is one of the fastest and most effective ways to increase the size of loan you’re eligible for. (Learn what to watch for before you find yourself drowning in debt in Five Signs That You’re Living Beyond Your Means.)
Playing to Win
Qualifying for a mortgage isn’t always easy. Lenders require all applicants to meet certain financial tests and guidelines and allow a limited amount of flexibility within those rules. If you want to score a mortgage, you’ll have to learn how to play the game, and you’re likely to win if you take the steps outlined here http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/five-steps-to-scoring-a-mortgage/article1925218/page2/
Why I paid $10,000 to break my mortgage
Below is a great article about why paying the payout penalty can be worth it for you. We always do the math for you to ensure that it is a better deal AND we also include any other costs in that math – like an appraisal and legal costs – lots of other brokers do not. Ensure ALL the costs are included in the math before making the change.
Want to ensure it is worth it – give us a call for a free 5-minute mortgage checkup at 403-681-4376.
Tara Walton/Toronto Star By Bryan Borzykowski |
Last September, my wife and I started scouring the city for a new house. We were living in a cozy bungalow, but with a growing kid and another on the way, we decided it was time to move.
Buying a new house is, of course, expensive, so I wanted to do whatever it took to reduce my costs. Most of the fees couldn’t be avoided, but there was one costly payment I desperately wanted to steer clear from: The mortgage penalty charge.
I had just over 12 months left on my five-year mortgage term, which meant that I either had to break my mortgage or stay with my current lender by transferring my mortgage to my new house. The latter option would have allowed me to avoid the fee. However, my lender couldn’t give me the best interest rate.
The new lender, a bank, was offering a variable rate of 2.25 per cent, a much lower rate than my old lender was willing to offer. I calculated that over the term I’d be better off paying the fee and taking the lower rate.
It was going to cost me $10,000 to break my contract. It felt like an unnecessary cost — I paid my lender so much in interest over the four years, why would I have to cough up so much cash?
I asked my broker to see if the lender would waive the fee, even though I was using a new lender for my next house, but they didn’t. Peter Veselinovich, vice-president of banking and mortgage operations at Investors Group, isn’t surprised. “The charge isn’t negotiable,” he says.
While the penalty may seem like an arbitrary sum, it’s not a cash-grab, he says.
The lender takes mortgage funds from money invested in GICs and other products and then it pays investors interest on those investments.
The idea is to match a five-year mortgage with a five-year GIC, so investors can get paid back at the same time as the mortgage comes due.
If a mortgage is broken, the lender needs to come up with money to fill the gap between the investment coming due and the mortgage ending. Hence the fee. The lender then takes that lump sum and invests it, so it can pay investors back when its GIC comes due.
The penalty is calculated two ways: you either pay 90 days of interest or what’s called an interest-rate differential, which is a penalty based on your old rate and a new rate based on a shorter term.
For example, let’s say you wanted to exit your 5 per cent five-year term with three years left to go. The lender would look at the current three-year term rate, which, say, is 3 per cent, and then charge you interest on the difference, 2 per cent, for 36 months. The sum also depends on how much money you still owe the bank.
However it’s calculated, the payment can be huge.
Darick Battaglia, a mortgage broker and owner of Dominion Lending Centres’ Barrie location, says that while it may seem as though people have to empty their bank account to pay the penalty, ultimately, by paying the lower rate, they’re getting that money back in mortgage savings.
Whether you’re moving houses, or just want to break a mortgage to take advantage of a lower interest rate, people often pay the penalty so they can free up more disposable income.
“It can help people get into a better financial position, because they have more disposable income,” says Battaglia. “They may find that it’s better to invest that money in an RRSP.”
If you’re moving, there are strategies to help reduce the penalty or even not pay it at all.
Almost all mortgages allow people to put a certain percentage of money down on a house every year; I was allowed to pay 20 per cent of my balance every 12 months.
In some cases, lenders will allow you to designate the first 20 per cent — it could be less or more depending on your lender — of the proceeds of a sale of a house towards the prepayment in order to pay down the outstanding balance and so reduce the mortgage penalty.
Battaglia has dealt with many lenders who refuse to honor this type of arrangement. They want two checks: one for the prepayment and one to pay off the mortgage.
My own lender refused to let me make one payment; I had to borrow money from my broker, who paid my prepayment three days before closing. I had to pay him back with some of the proceeds of the sale. It was a major hassle. But I did save about $1,500.
Porting a mortgage to a new house is another way to avoid the fee.
Let’s say you have $100,000 left on a mortgage with a 4 per cent rate, but you need $200,000 more for the new house. The bank will give you the additional money at the new rate, which could be 3 per cent. You’d keep the same term or extend it and now you’d pay a blended rate, in this case 3.5 per cent on $300,000.
“There are no penalty costs, because you’re still honouring the original contract,” says Veselinovich.
Most people will have to open their wallet when they break a mortgage.
While I did get my penalty reduced by making a prepayment before closing, I still had to write a cheque for about $8,000. It was painful at the time, but now that I’m in my new house, paying a new mortgage at a much lower rate, I don’t think about the penalty anymore.
Bank “mortgage specialist” tells lies about mortgage brokers
Below is the short version of a mortgage broker insider tsunami. A RBC mortgage specialist wrote and handed out a sheet of complete lies about how mortgage brokers work and what we do. She, and RBC, are in a very tight spot as we all knew that non-brokers spread lies as their only way to compete.
The best way to sum up what we really think is this reply taken from the internal comment board of the Canadian Mortgage Broker website:
ExRBC Mortgage Specialist on 19 Apr 2011 11:41 PM
Most so called RBC mortgage specialists have little in the way of any credit training, if any. They usually come from the ranks of side counter staff who are well known for their lack of knowledge. RBC Mortgage specialists have no ongoing training requirements unlike the AMP’s, and they certainly have no Ethical training.
There is an old saying in sales:”Only show what you know”. In this case (she) shows that she knows next to nothing about credit, her market or her competition.
She might as well have said: “If you want the best rate , go to a broker.”
I see this a great platform for mortgage professionals to have excellent conversations with clients and referral sources about the difference between us and the bank! There is no doubt about the advantages of using a broker, and I welcome this opportunity to talk about it!
RBC to brokers: We apologize
By Vernon Clement Jones | 19/04/2011 9:36:00 AM | 31 comments
With multiple statements, RBC moved to distance itself from the controversial flyer of one of its mobile mortgage specialists – apologizing for its unflattering and inaccurate depiction of brokers.
Occupied downtown Calgary office space at 2008 level
This is great news for the housing market as all those workers are moving into Calgary and will need places to live. There are details of the increasing need for housing in my free reports and most of these people will need a Calgary mortgage broker.
Large blocks of space short in supply
CALGARY — Occupied office space in downtown Calgary has surpassed the level reached during the height of the real estate market in the second quarter of 2008.
A report by Colliers International says that occupied space has reached 33.7 million square feet in the first quarter of this year.
The overall vacancy rate declined one percentage point to 10.92 per cent which equated to about 393,000 square feet of positive absorption in the first three months of 2011.
“Much like in the latter half of 2010, oilsands companies continued to grow, with numerous new projects on the horizon creating additional office space requirements,” said the report. “Most of the activity can be attributed to the strong oil prices and resultant higher levels of activity in the sector.”
The recently-completed Eighth Avenue Place office tower absorbed 50,000 square feet last quarter. It is currently 88 per cent leased.
Development of the 49-storey, 1.1 million-square-foot EAP began totally on speculation with no leasing deals in place.
“With oil trading above $100 a barrel, leasing activity in the Calgary downtown office market is expected to remain strong throughout 2011,” said Colliers. “As more companies take on additional projects, the highly active oil sector will continue to recapture most of the jobs lost during the recessionary period.
“As employment increases, vacancy numbers will continue to decline. Good quality space is leasing quickly in the current market, as shown by the strong absorption numbers for the upper classes of office buildings … Large contiguous blocks of vacancy in all classes of buildings have become short in supply.”
Meanwhile, the Calgary Board of Education has officially put the downtown Education Centre building up for sale. The building at 515 Macleod Trail S.E. has been put for sale by public tender with a minimum bid price of $40 million.
The five-storey building is close to 91,000 square feet on 1.08 hectares of land.
“The final bid and sale price will ultimately be determined by prevailing market conditions,” said the CBE.
The board said the Armengol sculptures, commonly known as the Family of Man statues, are not within the scope of the sale. The future of the sculptures will be determined by the City of Calgary, the sculpture’s owners.
The offer for sale by tender will expire May 4.
The CBE said the building will be vacant by June this year as staff moves into the new Education Centre at 1221 8th St. S.W.
© Copyright (c) The Calgary Herald
The ‘thrill’ of buying a house
You walk into the open house, take one look and say to yourself: This is it. It’s the house I have to live in. Where do I pay? A bidding war? I’m in.
Over my years of buying houses, I never bought one that did not have that frisson moment, that thrill of finding a place so suited to my wants. Indeed, I have in the past decided that I wanted to buy a house in what seems, in retrospect, to be nanoseconds. (By contrast, I’ve taken weeks to decide on the right pair of shoes.)
It is no way to make an “investment,” to be sure. But, as I’ve previously discussed in this space, buying a house is perhaps the most uninvestment-like of investments.
Just about anyone who’s purchased a property or thought about purchasing knows that it is much about gut-feel, in which the senses can conspire to trump sense.
Now, as the major real estate selling season gets under way, along comes a survey commissioned by BMO Bank of Montreal to give statistical weight to the notion that intuition carries a particularly heavy weight in the house-buying process.
The survey by Leger Marketing found that more than two-thirds of Canadians cited a “good feeling” toward the property as a reason to buy. Meantime, though, good sense is not thrown out of that gorgeous bay window and into those manicured flower beds. More than 90% of house-hunters value affordability and location over resale value.
So, the axiom that there are three important things in real estate – location, location and location – might reasonably be replaced by the Three Ps: Price, place and personality.
Nevertheless, that resale value is not a big concern to these surveyed house-hunters – people between 25 and 45 who plan to buy a home within two years – is a telling sign of the real estate times.
With some dips here and there, Canadian house prices have been rising strongly for more than a decade. Indeed, even the recession created just a downward blip in the chart of ever-growing values, with the average national price rising 8.9% last month from the previous March (but just 4.3% excluding Vancouver).
As a result, most of the house-hunters surveyed might never have been aware of a housing market that was not rising. I suspect many in this 25-to-45 demographic believe house prices basically keep going up forever, that though they downplay resale value in the survey, the expectation for solid gains is, well, a given. (Any significant drop in prices would surely shake that belief.)
In recent times, investors have been asked if they are stocks or bonds. If you’re a stock, you are prepared to take on more investment risk. If you’re a bond, you are not.
Perhaps, though, many people are probably houses when it comes to investing. A home is both partly a stock and a bond – and somehow neither.
It is a bond because over the long term it will likely produce modest returns through the enforced savings required by paying down the mortgage. It is a stock because the gains could be outsized if the investor were to buy and sell at propitious entry and exit points for market-timing gains.
And it is neither because it is an “investment” with many moving parts and frictional costs. You don’t live in a stock or a bond, but when the house leaks, it costs money and cuts into the investment. Meantime, the costs associated with buying and selling a property are becoming more daunting in many jurisdictions, with some observers reckoning that a house is often a mediocre investment at best.
But most young first-time buyers and mover-uppers are not fazed by such commentary. Home ownership is a cornerstone of our culture, with 70% of the population owning properties and many of the other 30% looking to join the majority.
And the real estate industry has become far more adept at marketing and selling than in the days decades ago when I was in the market. Today, houses are often professionally “staged” to produce that frisson moment. Prices are sometimes set artificially low to produce that exciting bidding war and that extra frisson of “winning.”
A house, it is said, is not a home. And a home is not strictly an investment. But does a stock have granite counters? Does a bond have stainless steel appliances?
Financial Post