NEWS KIDS BUYING THE BLOCK

'New kids' fuelling recovery
Average resale price set to rise to $470,000
Marty Hope, Calgary Herald
Published: Saturday, January 23, 2010

Pent-up demand for resale housing that bubbled to the surface midway through 2009 will continue to be a factor this year, says the new president of the Calgary Real Estate Board.

In her inaugural address to the city's real estate industry, Diane Scott said sales, prices and listings will continue to increase as the local economy and consumer confidence rebounds from the recession.

It's the "new kids on the block" -- the 25-to 34-year-olds who helped fuel the recovery in the latter half of last year -- that will continue to fuel the 2010 market, she said.

Scott, who is broker/owner of Royal LePage Solutions Inc., said the average price of detached homes within Calgary's city limits will likely move up slightly more than six per cent this year to $470,000.

At the same time, Scott predicted there will be 17,000 resale homes changing hands, an increase of 17 per cent -- while the number of new listings will likely rise to 25,0000, up from nearly 22,500 in 2009.

The average price of condos will also likely climb this year, going to $296,000 from a year-end average of $283,734 in 2009, said Scott.

Sales will likely grow by 10.6 per cent to 7,000, she said, predicting that listings will likely increase to 10,750 this year, up from 10,323 last year.

"Single-family resale prices will again outpace condos in 2010, as equity gains from pre-2006 will enable move-up buyers to afford more," said Scott, a 30-year veteran of Calgary's real estate industry. "Consequently, the price gap between single-family homes and condominiums will continue to widen for the short term."

For young buyers, low mortgage rates and relatively low prices provided the impetus to get into home ownership, said Scott, who opened her real estate business last February.

"Affordability has been the silver lining in last year's housing market, even in the face of slowing wage growth," she said.

For the previous two years, first-timers had been pretty much shunted to the sidelines until the market turnaround in 2009.

From having a maximum buying power of about $250,000, families found that with the mortgage rates slipping to 50-year lows, their buying power went as high as $375,000, said Scott.

"In two years, (the market) has gone from sizzle to fizzle to simmer -- and today, the market has entered a more balanced and stable condition," she said.

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RESALE HOUSING MARKET

2009 2010
Single-detached homes*
-Sales 14,440 17,000
-Listings 22,459 25,000
-Average price $442,327 $470,000
Condominiums*
-Sales 6,328 7,000
-Listings 10,323 10,750
-Average price $283,734 $296,000
Towns
-Sales 3,943 4,500
-Listings 8,502 8,000
-Average price $352,704 $364,000
- Metro

AFFORDABILITY INDEX

Calgary home ownership becoming more affordable
By Dan Healing
Calgary Herald
with files from Canwest News Service
January 26, 2010


Calgary housing became slightly more affordable in 2009, but it's still just the 23rd most affordable place to own a home from a list of 28 Canadian cities, according to the Winnipeg-based Frontier Centre for Public Policy.

In a study released Monday, the centre found Thunder Bay and Windsor, both in Ontario, were tied for most affordable Canadian cities and Vancouver was the least affordable.

In fact, Vancouver was also the least affordable among the 272 cities in the international study, which covered Canada, Australia, Ireland, New Zealand, the United Kingdom and the United States.

As Canada's resale housing market boomed and prices rose in 2009, affordability fell, sending the national average to a reading of 3.7 from 3.5 the year before. (A higher score indicates less affordability).

That would place Canada's overall housing market in the "moderately unaffordable" category -- from 3.1 to 4.0. The numbers are calculated by dividing the median residential house sale price for the third quarter by median annual gross household income.

In Vancouver, for example, a median home price of $540,900 was divided by median household income of $58,200 to create a multiple of 9.3, which the group describes as "severely unaffordable" -- any reading of 5.1 and over.

Calgary, with an affordability index of 4.6, is just slightly less affordable than Prairie rivals Saskatoon (4.4) and Edmonton (4.1). On the international list, Calgary is 188th and its nearest neighbours are Eugene-Springfield, Ore.; Palmerston North-Manawatu, New Zealand; and Dundee, U.K. It's just slightly more affordable than Dublin, Ireland.

Calgary and Edmonton became fractionally more affordable in 2009 after climbing two points over the previous four years. In 2008, Calgary's index was 4.8 and Edmonton's was 4.2.

Toronto moved from a reading of 4.8 to 5.2, moving it into the severely unaffordable category, while Montreal moved from a reading of 4.6 to 4.9.

"Montreal is approaching severely unaffordable for the first time. It appears Montreal has caught up to its urban growth limit and this has now become a real constraint on land supply," the group said.

Victoria was second only to Vancouver, with its reading rising from 7.4 to 7.9, while Ottawa' hot housing market remained within the realm of the moderately unaffordable, at least as measured as part of the Ottawa-Gatineau metropolitan area, with a reading of 3.8, up from 3.4 the year before.

BALANCE, STABILITY, RECOVERY

Real estate staging unhurried comeback
2009: A Year Of Housing Recovery; Buyers take comfort in stability
By Dan Healing

Calgary Herald

January 6, 2010

The Ross family's quest to get more house for their buck ran aground in 2008 as the depressed Calgary-area resale market produced the lowest number of house sales in 13 years.

But their next dive into the market this past summer resulted in a success story beyond what Dwight, Tanya and their two sons had anticipated.

"We moved from really expensive dirt to less expensive dirt and in the process we ended up with a lot more space, a newer home, and got a few other bonuses, including a view and separate bedrooms for the kids and a bigger garage," said Dwight, 46, an information officer for a Calgary engineering company.

"It was actually a financial downsize but a house upsize, and quite substantial, too," he added. "We went from about 2,700 square feet to over 4,000 square feet."

The downside is that their new home in Tuscany on the west end of Calgary requires a longer commute to work downtown -- Tanya is in human resources for an oil and gas company -- than from the more centrally located house in Collingwood they had owned for five years.

Year-end statistics published by the Calgary Real Estate Board on Tuesday show that 2009 was a recovery year after a dismal 2008, but still fell well short of the records set in 2007.

Board president Bonnie Wegerich said she doesn't expect to see a repeat of the climate of 2007 -- when the average single-family home price peaked at $505,920 in July and condo prices hit a record $332,237 in May -- but that's not necessarily a bad thing.

"I don't think we're going to see as hectic a market for a couple of years," she said. "I think what we'll see is a nice sustained recovery. Those days were really hectic and really insane."

"I think it's nicer for the buyers, too," Wegerich said, "if prices are stable and they know that what they're buying today is going to still be worth that in a year or maybe up a few per cent."

In 2008, single-family home sales were the lowest since 1996, at 13,455, down 27 per cent from 2007, while the average sale price fell 2.5 per cent to $460,327 and the median price dropped by 2.9 per cent to $409,000.

Statistics from 2009 show 14,440 single-family home sales in the city, up seven per cent from 2008, and an average sale price of $442,237, a four per cent decline.

The condominium market, which plunged by 31.3 per cent to 5,661 sales in 2008 compared with 2007, grew by 12 per cent to 6,328 in 2009.

The average condo sale price dropped six per cent to $283,734 from $302,408 in 2008 (which was down 4.4 per cent from 2007) and the median price, at $260,000, was off by seven per cent from 2008.

December illustrates the recovery part of the story, with 799 single-family homes sold in the city, a whopping 78 per cent increase over December 2008, when just 449 traded hands (a 47 per cent slide from 2007).

The average monthly price jumped to $451,349, up eight per cent from $417,398 in December 2008 (which was down 6.2 per cent from 2007) while the median price was $401,000, up five per cent from December 2008.

The number of condominium sales for December 2009 was 341, well ahead of the 205 in December 2008, while the average price of $288,640 showed a five per cent increase.

Inventory in December was down. New single-family listings in the city in December totalled 806, down four per cent from December 2008. New condo listings in the city in December were 444, up three per cent from December 2008.

Wegerich said interest rates are expected to rise this year and that prospect may encourage more buyers to get into the market.

Todd Hirsch, a senior economist with ATB Financial, said housing activity should be stable this year.

"I would expect that the year will be pretty flat, not a lot of excitement up or down," he said.

"We're still going to see good movement because mortgage rates are still favourable and I think people have a sense we want to get in on it now because rates will be going up."

Dwight Ross said he and his wife had been watching the market closely before deciding to move this year. The Collingwood home, sold by Justin Havre of CIR. Realty, attracted two competing bids and sold for a price that was higher than listed.

The house in Tuscany they had been keeping an eye on was still available and they made the successful transition in November, cutting their debt load by more than $100,000.

Wegerich said a buyers' market a year ago has transformed into a balanced market.

SOLD & OFF THE MARKET

Vince Vaughn marries Canadian real estate agent
Posted: January 05, 2010

Sorry ladies, Vince Vaughn is off the market (and is now half-Canadian!).

Full report via Reuters:

Hollywood actor Vince Vaughn wasn't a gatecrasher at a wedding last Saturday -- he was the groom.

Vaughn married his girlfriend of two years, Kyla Weber, in a small, private ceremony outside his hometown of Chicago on Saturday, according to People magazine.

A representative for the actor, who starred in the movie "Wedding Crashers" in 2005, told the magazine that Vaughn, 39, proposed to Weber, a 31-year-old Calgarian real estate agent, last Valentine's Day.

It is the first marriage for both Vaughn and Weber. Vaughn, whose film credits also include "Fred Klaus" and "Four Christmases," previously dated his co-star from "The Break-Up," actress Jennifer Aniston.

PLAYING ALONG WITH PREDICTIONS

Stronger year predicted for industry
By Marty Hope
Calgary Herald
January 16, 2010

With 2009's housing figures now tucked safely and thankfully into the vault, builders can look forward to a stronger 2010.

Yes, 2009 is gone, but it won't be soon forgotten. Many lessons were learned and relearned by builders and buyers.

Stepping up to the podium in November as part of Canada Mortgage and Housing Corp.'s annual Housing Outlook Conference, Richard Cho announced that after a lean 2009, the industry could look forward to better times.

With suggestions that he might have undershot the market, Cho, CMHC's senior Calgary market analyst, said at the time that construction starts in 2009 for detached housing would reach 4,200.

But on the strength of a resurgent second half, the year closed out with 4,775 being started -- nearly 400 more than were tallied in 2008.

"It was a pretty impressive year considering that by the end of the first quarter, year-over-year starts were down about 48 per cent," he says now.

In the first six months of last year, 1,549 detached homes were started -- but in the second six-month period, buyers returned to the market in droves and the pace of construction more than doubled to 3,226 homes.

The year was capped off by a December in which 559 detached starts were counted by CMHC -- the strongest since 2006.

"Builders have had more opportunities to increase production as supply levels were near their bottom," says Cho.

Low interest rates were a key to the dramatic turnaround. But so, too, were price reductions and incentives, a return of consumer confidence, and the fact that resale inventories declined as the year moved along.

As part of his November address, Cho also presented his predictions for 2010, calling for foundations holes to be dug for 4,900 single-detached homes.

But in his gut, the market analyst now feels more bullish than that estimate.

"I'm being conservative with that number, considering the strong end to 2009," he says, "I think we'll do a bit higher than 4,900 because rates will stay low despite some increases."

He hasn't finalized his calculations for this year, but will be ready to release his first call for 2010 in early February. "There will be an upward adjustment," he says.

Cho also had some good news for the multi-family housing sector, which closed out 2009 with a brutal December.

There were only construction starts for 98 units in that month, nearly half of which were duplexes.

But his initial forecast calls for 1,800 unit starts this year, up from 1,543 in 2009. The 2009 number, by the way, was off 78 per cent from 2008.

"I might move that number a little bit, but there is still a lot of supply in the system to get rid of," says Cho.

With the downturn in the economy, builders and developers cancelled or postponed plans for new projects in favour of completing what they already had underway.

"Heightened apartment inventories continue to impact new apartment projects from starting," says Cho.

While there is a noticeable decline in highrise construction, there are several smaller projects underway in various parts of the city.

In terms of total housing construction starts of all kinds, there were 6,318 in 2009 in Calgary, down nearly 45 per cent from the previous year.

Builders in Edmonton fared better last year, at least in terms of starts of single-detached homes -- 3,897, up from 2,613 in 2008.

The provincial capital's multi-family housing sector also didn't take the hit Calgary absorbed, registering a decline of less than 40 per cent.

Looking at the province as a whole, there were 12,256 detached starts in 2009 -- an increase of almost six per cent from 2008.

There was a 60-per-cent decline in multifamily housing construction and a 30-percent slide in total starts.

But during the conference, regional economist Lai Sing Louie of CMHC predicted that 2010 will be the start of five years of growth.

Consumers are not the only ones feeling better about themselves and the economy.

Canadian companies, too, are getting the itch to get moving again.

The Bank of Canada says that corporate confidence grew in the fourth quarter of last year as lending conditions eased to "pre-crisis" levels -- which, in turn, prompted some firms to show a willingness to move ahead with investment plans and hiring.

"The Bank of Canada's survey reinforces the point that credit conditions are gradually returning to normal," says Doug Porter, deputy chief economist at BMO Capital Markets.

RECOVERY IN CALGARY

Calgary's real estate prices recover in 2009: CREB
By Dan Healing
Calgary Herald
January 6, 2010

CALGARY - The Ross family’s quest to get more house for their buck ran aground in 2008 as the depressed Calgary area resale market produced the lowest number of house sales in 13 years.

But their next dive into the market this past summer resulted in a success story beyond what Dwight, Tanya and their two sons had anticipated.

“We moved from really expensive dirt to less expensive dirt and in the process we ended up with a lot more space, a newer home, and got a few other bonuses, including a view and separate bedrooms for the kids and a bigger garage,” said Dwight, 46, an information officer for a Calgary engineering company.

“It was actually a financial downsize but a house upsize, and quite substantial, too,” he added. “We went from about 2,700 square feet to over 4,000 square feet.”

The downside is that their new home in Tuscany on the west end of Calgary requires a longer commute to work downtown — Tanya is in human resources for an oil and gas company — than from the inner-city house in Collingwood they had owned for five years.

Year-end statistics published by the Calgary Real Estate Board Tuesday show that 2009 was a recovery year after a dismal 2008 but still fell well short of the records set in 2007.

CREB president Bonnie Wegerich said she doesn’t expect to see a repeat of the climate of 2007 — when the average single family home price peaked at $505,920 in July and condo prices hit a record $332,237 in May — but that’s not necessarily a bad thing.

“I don’t think we’re going to see as hectic a market for a couple of years,” she said. “I think what we’ll see is a nice sustained recovery. Those days we’re really hectic and really insane.

“I think it’s nicer for the buyers, too, if prices are stable and they know that what they’re buying today is going to still be worth that in a year or maybe up a few per cent.”

In 2008, single-family home sales were the lowest since 1996, at 13,455, down 27 per cent from 2007, while the average sale price fell 2.5 per cent to $460,327 and the median price dropped by 2.9 per cent to $409,000.

Statistics from this past year show 14,440 single family home sales in the city, up seven per cent over 2008, and an average sale price of $442,237, a four per cent decline. The median price also fell about four per cent to $392,000

The condominium market, which plunged by 31.3 per cent to 5,661 sales in 2008 compared with 2007, grew by 12 per cent to 6,328 in 2009.

The average condo sale price dropped six per cent to $283,734 from $302,408 in 2008 (which was down 4.4 per cent from 2007) and the median price, at $260,000, was off by seven per cent from 2008 (when it fell 5.3 per cent from 2007).

December illustrates the recovery part of the story, with 799 single-family homes sold in the city, a whopping 78 per cent increase over December 2008, when just 449 traded hands (a 47 per cent slide from 2007).

The average monthly price jumped to $451,349, up eight per cent from $417,398 in December 2008 (which was down 6.2 per cent from 2007) while the median price was $401,000, up five per cent from December 2008.

The number of condominium sales for December 2009 was 341, well ahead of the 205 in December 2008, while the average price of $288,640 showed a five per cent increase.

Inventory in December was down. New single family listings in the city in December totalled 806, down four per cent from December 2008. New condo listings in the city in December were 444, up three per cent from December 2008.

Wegerich said interest rates are expected to rise this year and that prospect may encourage more buyers to get into the market.

Todd Hirsch, a senior economist with ATB Financial, said housing activity should be stable this year.

“I would expect that the year will be pretty flat, not a lot of excitement up or down,” he said.

“We’re still going to see good movement because mortgage rates are still favourable and I think people have a sense we want to get in on it now because rates will be going up.”

Dwight Ross said he and his wife had been watching the market closely before deciding to move this year. The Collingwood home, sold by Justin Havre of CIR Realty, attracted two competing bids and actually sold for a price that was higher than listed.

The house in Tuscany they had been keeping an eye on was still available and they made the successful transition in November, cutting their debt load by more than $100,000.

Wegerich said a buyers’ market a year ago has transformed into a balanced market.

Photo By: ayuen

STEPPING ONTO THE PROPERTY LADDER

How government programs help “first-time” buyers onto the property ladder
Helen Morris, National Post
Published: Thursday, January 14, 2010

Purchasing a home for the first time can be pretty daunting, as well as financially challenging. There are a number of schemes at the municipal, provincial and national levels that may help ease some of that financial stress.

A first-time buyer may be eligible for a partial refund of the land transfer tax from the City of Toronto, to a maximum of $3,725, and from the Province of Ontario to a maximum of $2,000. The proposed Home Buyers' Tax Credit could net you $750 if it gains budgetary approval (it applies to certain buyers that close on a qualifying home after Jan. 27, 2009). The existing Home Buyers' Plan permits the withdrawal of up to $25,000 from an RRSP, but it comes with a 15-year payback period.

The first step, however, is to work out whether you are actually a first-time buyer - you may already have bought a home in the past, but with life's many changes, your status may also have changed in that regard. Here are some scenarios.

Buyer number one is someone who has never owned a home and is getting married next year. Her future husband owns a home, but he is going to sell it, and the couple will buy property together.

"[She] will qualify for the whole of the provincial Land Transfer Tax refund, provided ... she and her husband-to-be do not get married while he still owns the other property," says Cheryl Cruickshanks, barrister and solicitor with the law firm, Heydary Samuel Professional Corp.

(All scenarios outlined here have additional conditions, and all qualification details should be checked with a lawyer.)

"It will all depend on the timing of the marriage and the sale of the house," says Aurele Courcelles, director of tax and estate planning at Investors Group.

Ms. Cruickshanks adds that if the couple otherwise qualifies for the rebate but purchases the property before they are married, and they are not considered common-law spouses, only the woman will receive the land transfer tax refunds.

As well, if they are not common law and are not married before the purchase, this woman will qualify for the Home Buyers' Tax Credit. She will not qualify if the two are considered spouses before they buy the new property. She is disqualified on the basis of his previous homeownership, assuming he has been living in his property during the year of purchase or any of the four years immediately preceding the year of purchase.

But she can participate in the Home Buyers' Plan (wherein she withdraws up to $25,000 from her own RRSPs for the purchase, without incurring withholding tax) provided she is not considered the common-law partner of her fiancé or, if she is, provided she is not occupying his property as her principal place of residence up to 31 days before the withdrawal date, or within the four years preceding the year of withdrawal.

Buyer number two is going to divorce. The matrimonial home has always been in her soon-to-be ex-husband's name.

"This woman still will not qualify for the Land Transfer Tax refunds, even if [she makes a new] purchase after she is divorced..." says Ms. Cruickshanks, as any previous home ownership in any guise disqualifies her.

This buyer does qualify for the Home Buyers' Tax Credit if she buys her new home after the divorce goes through.

"It depends on the timing of the divorce," says Mr. Courcelles. "If she waits until after the divorce, then at the time of the [RRSP] withdrawal ... the first test is ‘Do you have a spouse?,' and the answer is ‘No'." So she is again considered a first-time buyer.

The third buyer is a new Canadian who has owned property overseas but never in Canada. He is ineligible for the land transfer tax refunds.

"You cannot have owned a house anywhere in the world previously" to qualify for the LTT, says Jim Murphy, president and CEO of the Canadian Association of Accredited Mortgage Professionals.

However, if that overseas home was not owner occupied, the buyer may be eligible for the Home Buyers' Tax Credit and the Home Buyers' Plan.

"This individual will qualify, provided he/she purchases a residential property within Canada, and provided he/she did not own and occupy the overseas property up to 31 days before the intended withdrawal date, or within the four years preceding the withdrawal," says Ms. Cruikshanks.


For further details on the various government home buying incentives:

Land Transfer Tax Refunds

rev.gov.on.ca/en/refund/newhome/index.html

toronto.ca/taxes/mltt.htm


Home Buyers' Tax Credit

cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html


Home Buyers' Plan

cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-09e.pdf


Registered Retirement Savings Plans

cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/menu-eng.html