Real Estate Information Archive

I was fortunate to be able to attend this years Housing Outlook Conference here in Victoria. CMHC does a very good job of giving us information on where our market is going next year as well as reports on future trends.  This is the 3rd of 4 reports.

Costs and Performance of Sustainable Housing - Lance Jakubec, Senior Consultant, Research and Information Transfer gives some insight as to costs and the long term benifts of Green Housing.  Build it and they will come, but at what price?

Page 4 of the file below shows the cost of a Honda Civic Sedan Vs a Civic Hybrod and their respective gas milages.  The Hybrid cost 55% more and gets 41% better milage.  This gives us an idea the cost of being in a green car.  What about housing? Perhaps not as easy to measure. We to get the answer by looking at Equilibrium Demonstrations Projects. Open the PDF below and judge for yourself.

What I did find intersting was page 14 that shows the cost to make a home net zero energy efficient cost $109,000 but for $18,000 you could reach 85%.  The cost of producing the energy to take a well built home for 85% self suficiant to 100% is huge.  I think with our cheap energy sources it will be a while before we are building all net zero homes.

See "Costs & Performances of Sustainable Housing" photos of green projects as well as informative graphs and charts.

I was fortunate to be able to attend this years Housing Outlook Conference here in Victoria. CMHC does a very good job of giving us information on where our market is going next year as well as reports on future trends.  This is the 2nd of 4 reports.

The Victoria Outlook - Travis Archibald, Senior market analyst Victoria forecast strong sales and an increase in new housing for 2010.

1. Housing Demand - Migration to the Capital Regional District will be or largest growth factor leading to approximately 2000 new households every year for the next 10 years. Victoria's employment Index is higher than the rest of B.C. and Canada. These factors combined with the current low mortgage rates will keep housing demand strong through 2010 and beyond.
2. Resale Market - The drop in sales volume in late 2008 and early 2009 has come back as quickly as it began. Sales volumes in 2010 will be higher than 2009 but no as high as record setting 2007. With more listings expected in spring Victoria will move towards a balanced market by the end of 2010. This will keep prices a little higher than 2009 returning to the peaks of 2008.
3. Condo Market & Rental Market - Rental apartment starts have been low or zero since 2004 with the majority of new rental units coming from the condo market. Over 33% of all condos in Victoria are rented which combined with Secondary suites, forms half of the rental pool.
4. New Home Market - Housing startes in 2009 were drastically down from 2008 as builders reacted quickly to market conditions. 2010 will see more than a 50% increase in housing starts compared to 2009, but this will still be half of the starts in 2006 & 2007.

See "The Victoria Outlook" for many interesting graphs and charts from Travis's presentation.

I was fortunate to be able to attend this years Housing Outlook Conference here in Victoria. CMHC does a very good job of giving us information on where our market is going next year as well as reports on future trends.  This is the 1st of 4 reports.

The Provincial Outlook - Carol Frketch, CMHC's B.C. Regional Economist gave a positive presentation of our provinces outlook for next year.  Highlights include:

1. Housing Market Update - After a brief visit to a Buyer's market, B.C. is back in a Seller's market and is likely to remain there for the rest of 2010. Listing numbers are down which will keep prices up with small rises expected in 2010. Low mortgage rates will continue to attract first time buyers who will help sales volumes to rise but not to the heights reached in 2006 & 2007.
2. Mortgage Rate Outlook - Traditionally 5 year conventional mortgage rates move with the Government of Canada 5 year bond yield.  The gap between the two had widened over the last few years and raising mortgage rates would only make the gap bigger. The effort to stop the gap from widening will result in mortgage rates remaining low at lease until the 3rd quarter of 2010 when they may start to rise slowly.
3. BC in a Global Context - As the global economy recovers B.C.'s resource based economy will grow faster than the rest of Canada. The 2010 Olympics will bring B.C. to the world spotlight and have positive spin off in tourism, investment and immigration.
4. The Next Buyers - The biggest buying group will be people moving to B.C. with the vast majority international migration. The majority will come from China, India, the Philippines and South Korea. Within 6 months of arriving 17% of new immigrants are homeowner and by 4 years more than 50% are homeowners.

See "The Provincial Outlook" for many interesting graphs and charts from Carol's presentation.

If you were thinking of sprucing up the house for a spring sale, you still have time to get in on the Home Renovation Tax Credit. Some or all of the work may be eligible for the tax credit which could be up to $1,350.00.  You have until February 1, 2010.  See details at http://www.cra-arc.gc.ca/hrtc/

Many prospective homebuyers are wondering what has happened to mortgage rates in 2009, and where they may go from here. RBC Economics Research recently updated its’ outlook, and here is what the group has to report.

Since hitting a low in January of 2009, longer-term interest rates have trended higher with the move accelerating in July. The prospect that the worst is over for the global economy is giving investors the confidence to venture out of low-return fixed income securities and seek higher risk investments.  While we expect many bumps on the road to recovery we still see potential for a very modest decrease in long-term rates in the final quarter of this year.

Outlook for the future

Momentum in the global economy appears to be changing. Leading indicators currently point to the end of economic contraction for the industrialized world in the third quarter of 2009. Stimulus from central banks, combined with government fiscal stimulus packages, is expected to support a fledgling recovery that is forecast to build momentum in 2010.

Until this recovery is well underway, no changes to policy rates are likely. The Bank of Canada is expected to maintain the status quo until mid-2010. Once the recovery is well established, central banks will normalize their policy rates, and interest rates are likely to increase.

Fixed vs. variable rate mortgages

One of the biggest decisions homebuyers face is choosing between a fixed or variable rate mortgage. This is not a simple decision, which is why many people are looking for advice to help them decide which mortgage interest type is best for them, based on their personal circumstances. I can help homebuyers and homeowners decide which option best fits their situation and risk tolerance.

Mortgage rates continue to trend at historic lows, despite the fact that fixed rates have edged up recently. In this environment, people who are comfortable without a guaranteed rate are opting for a variable rate mortgage. Such a strategy could result in considerable interest savings.

What homebuyers choose should depend on how they feel about rate fluctuations and their cash flow. For example, a first time homebuyer may want assurance that the rate, payment and repayment schedule will not change, and may be wise to opt for a fixed term. A homebuyer who is not concerned about rate fluctuations may want to take advantage of today’s low variable rates in a bid to save more on mortgage interest over the long term.

Today’s flexible mortgage products let you bridge the gap between these strategies. For example, the RBC Homeline Plan lets homebuyers split their mortgages and enjoy the advantages of both variable and fixed rates within a credit limit of up to 80% of the value of the home. The variable portion offers potential long-term savings, while the fixed rate portion offers rate protection. The dividing line is entirely up to the homeowner.

I have just posted a great lake front home at Seabright, Nova Scotia near St Margarets Bay. Very private yet only 25 minutes to Halifax.

"Changing Times for the Victoria Housing Market" says the fall outlook from the Canadian Mortgage & Housing Corporation! The Capital Region will experience increases in existing home sales, and significant residential construction in 2010. Employment grow, continued migration, and low mortgage rates will contribute to the stabilization of Greater Victoria Housing demand.

After a slow start 2008 and first quarter of 2009, lower home prices and low mortgage interest rates contributed to a significant rebound in sales in mid-2009. Expect both resales and average home prices to experience small increases in 2010!

Housing starts will bounce up in 2010, following two years of reduced levels of residential construction activity.  The mid-2009 surge in resale activity combined with less supply (fewer homes under construction, and fewer existing and new homes for sale) will boost the number of new homes breaking ground in Greater Victoria next year.

That sounds like great news to me.  See more information, graphs & charts at Housing Market Outlook - Victoria CMA

Phil