Archive for December, 2012

Mixed signals for Kelowna Real Estate in 2013

Friday, December 28th, 2012


Positive Signals

1. Alberta Oil Prices -while down slightly still providing solid employment and buyers for Kelowna Real Estate

2. Positive cash flow is made easier by low interest rates which will continue for the foreseeable future.

3. USA new home starts up 15% from 2011 provides employment for BC forestry workers.

4. Many Canadian have bought homes or condos in the US Sunbelt at low foreclosure prices. Those low prices mean that they have money left to buy in Kelowna.They can earn money in Alberta, winter in Phoenix, and summer in Kelowna.

5. Alberta real estate sales and prices are strong creating a good pool of buyers for Kelowna.

Negative Signals

1. Canadian consumer debt is at record highs, this means many people will stop consuming to pay of debts.

2. USA Fiscal Cliff brings economic uncertainty.

3. Inflation in Canada at the lowest rate in 3 years

4. Real estate prices in Vancouver are softening. 15-20% of Kelowna buyers come from Vancouver so this will affect our market to some degree.

How will this all play out?

Governments will print money and try to bring about a gradual recovery with inflation in the 2-3% target level. Interest rates will remain low for the near future. This will be good for government deficit reduction and real estate prices.

Real Estate is the only investment that someone else buys for you.

Pick a house or condo on the lakeshore or on a golf course and let your tenant pay for it. Nice folks, those tenants!

2-Bedroom Condo Prices: Biggest Bang for Buck

Thursday, December 20th, 2012

A new Landcor Data Corp. study


Condos are the entry point into the real estate market, and across the Lower Mainland we see more and more of them. Canada Mortgage and Housing estimates that from 2009 through 2012, over 34,500 new condos were built or started throughout the Metro Vancouver region.

For first-time home buyers, condos are the most affordable option, offering the chance to live where they want, but that often at a sacrifice of living space. Condo prices tend to reflect the desirability of the neighbourhood rather than the finished floor space of the apartment.

Overwhelmingly, younger buyers say their major desire is for a vibrant, walkable community. Urban planners, too. It’s the new ideal for how cities, municipalities and neighbourhoods should work.

All over the Lower Mainland municipalities are paying heed. Where cars used to reign, new, dense, walkable neighbourhoods are going in. And in neglected city quarters, new condos are adding people to the mix, encouraging new stores and cafes to pop up.

We asked Landcor Data Corporation to find out where in the Lower Mainland you get a 2-bedroom condo with the most living space for the least money and where buyers will pay more money for less room.

Landcor based its findings on all 2-bedroom condo sales—new and MLS® resale— in the Lower Mainland from January 1 to October 23 of 2012 (that’s 11,213 if you’re counting).

Unit Size

For overall size, the leader is West Vancouver, where the average 2-bedroom condo is 1,329 square feet, with 68 per cent in the 1000 to 2000 sq ft range and 20 per cent over 1600 sq ft. West Van condos are built with the wealthy in mind, often older couples downsizing from large West Van houses. The age of the buildings also accounts for the roomy condos: 72 per cent of all the West Van sales in this study were built before 2000.

Suburban and agricultural municipalities, originally made up of big houses on big lots, have the next-roomiest condos. Delta, South Surrey, Chilliwack/Langley/Mission and Maple Ridge/Pitt Meadows offer inexpensive land to build on. So 2-bedroom condos in these areas are big, and ideal for local seniors who want to stay in the community, and for young couples and families looking for a bit of elbow room at an affordable price.

Vancouver City holds some surprises. Downtown Vancouver condos are surprisingly large —larger than those in Vancouver West or Vancouver East, where there would seem to be more room to build. But Downtown Vancouver is almost all condos, and there’s a huge range of sizes to cater to a variety of buyers. Only 2.5 per cent of the sales were under 700 sq ft. The bulk of 2-bedroom condos that were sold—70 per cent—were from 800 to 1,200 sq ft. There are also some enormous condos downtown: 7 per cent of the sales were over 1600 square feet.

Vancouver East condos are the smallest in the Lower Mainland on average, with 79 per cent of them in the 700 to 900-sq ft range.  Vancouver East doesn’t have the spacious, high-end product found in the more expensive parts of the city. In fact, only 8 per cent of the sales in this study were condos from 1200 to 1600 square feet, and only 1 per cent were over 1600.

Price per Square Foot

But let’s look at the Average Price per Square Foot chart: East Van is definitely the place to stretch your condo-buying dollar in Vancouver. And big translates into affordable in the Fraser Valley.

It’s no wonder that Chilliwack is currently the leading real estate market in the Lower Mainland. With an average price of $199,000, a big 2-bedroom condo in Chilliwack, Langley or Mission costs just $191 per finished square foot.

In Downtown Vancouver you’ll find a similar average size—1080 sq ft compared to Chilliwack’s 1040—but it’ll cost you $743 per sq ft, 74 per cent more than that Chilliwack place. The average 2-bedroom condo in Downtown Vancouver sold for $803,000 in the first 10 months of 2012.

If city life is the lure, Burnaby and Richmond offer middle-of-the-road prices per square foot, in the low $400s. They’ve been increasing density around transit and commercial hubs and creating the kinds of vibrant, walkable neighbourhoods that attract young buyers.

Tri-Cities—Coquitlam, Port Coquitlam and Port Moody—are already building and densifying in anticipation of the Evergreen Line, and at $323 per sq ft they offer huge value, plus the bonus of being smack in the centre of the Lower Mainland.

New Westminster is already a walkable city, and with prices of $324 per finished sq ft for a roomy 2-bedroom, it’s being discovered by a new generation.

North Vancouver and Vancouver East are comparably priced at $465 and $500 per sq ft. Both places have great neighbourhoods and a nice small-city feeling, as well as being the closest you can get to Downtown Vancouver while still spending an average of under $460,000 for a 2-bedroom condo. In Vancouver  West you’re looking at $658,000 and downtown it’ll cost an average of $803,000.

Average Unit Price

See this chart for average 2-bedroom condo prices (x 1000) for condos sold in the Lower Mainland between January and October, 2012.

BCREA November Stats: Chilliwack Leads BC

Thursday, December 20th, 2012


The BC Real Estate Association (BCREA) reports that Chilliwack posted a province-leading 28.6 per cent increase in November sales compared to last November. BC as a whole saw a 17 per cent month-over-month decline. Chilliwack also reported the highest residential dollar volume increase in the province, with a 36.7 per cent spike from November 2011.

Chilliwack and District Real Estate Board president Cynthia Admiraal says the strong market is all about price. In Chilliwack, which is about 90 minutes east of Vancouver in the Fraser Valley, a typical home sells for around $350,000, less than half that of Greater Vancouver.

“Investors are attracted to markets that are stable and not prone to wild price fluctuations. Combined with the commuter factor, where home ownership is far more affordable than the metro areas, it paves the way for continued sales growth in the New Year,” Admiraal said.

Only three other BC communities posted higher November housing sales: unit sales in the Okanagan Mainline, anchored by Kelowna, increased by 4.1 per cent; Vancouver Island, north of Victoria, saw sales climb 3.8 per cent; and the Kootenays experienced a 19.4 per cent increase over November 2011.

The Greater Vancouver Real Estate Board posted the worst month-over-month sales record, followed by Victoria, down 24.8 per cent, and the Fraser Valley, down 19.2 per cent. Powell River’s 47 per cent decline reflects a very small market where a few sales can cause a large swing.

BC Real Estate Overall

According to the BC Real Estate Association, the dollar volume of homes sold through the MLS® in BC declined 24.6 per cent to $2.3 billion in November compared to the same month last year. A total of 4,680 MLS® residential unit sales were recorded over the same period, down 17 per cent from November 2011. The average MLS® residential price was $480,861, down 9.1 per cent from a year ago.

“A slower pace of consumer demand in Vancouver and the Fraser Valley contributed to fewer home sales province-wide in November,” said Cameron Muir, BCREA Chief Economist.

“While more stringent mortgage credit regulations for low equity borrowers have squeezed some buyers out of the market, the broader slowdown may be a pre-cursor to more elevated activity in 2013, resulting from pent-up demand.”

Year-to-date, BC residential sales dollar volume declined 18.7 per cent to $33.3 billion, compared to the same period last year. Residential unit sales declined 11 per cent to 64,626 units, while the average MLS® residential price was 8.6 per cent lower at $515,611.

Photo Sharing Platform For realtors – Abodograph connects real estate agents with customers

Tuesday, December 18th, 2012


There are countless photo-sharing apps out there for everything from food to dogs. Now, a former Microsoft and Google engineer is trying to do the same for real estate.

It’s called Abodograph, and the idea is to provide an easy way for realtors to post photos of their everyday activities and receive real-time notifications from interested customers.

Derek Cheng founded the Issaquah-based company after he and his wife noticed that realtors liked collecting feedback from prospective buyers who had viewed a home. Initially, he wanted to start a company that allowed realtors to share tips about homes, but that didn’t pan out.

Cheng, who spent nearly eight years working on Windows Update at Microsoft, finally arrived at Abodograph after examining the power of photos.

Abodograph helps real estate agents market themselves by sharing moments of their professional life through photos — like when they’re showing a home or holding an open house,” says Cheng. “Photos are a great medium because they’re quick to create and consumers love looking at them.”

There are certainly other startups in the real estate space, including Zillow, Trulia and While those sites host mountains of data on homes, Cheng says that they focus on the “nitty gritty” and Abodograph instead gives agents a free and more authentic way to market themselves.

“The photos appeal to a broader set of customers who just want to look at photos without neccessarily digging into the hard data,” Cheng explains. “So while we all compete for the attention of agents and customers, I think Abdograph offers something different on both sides.”

Another appeal of Abodograph is that realtors can have their own “resume” of photos and receive real-time push notifications on their cell phone. Cheng notes some data that shows how the odds of contacting a sales lead within five minutes is 100 times greater than if the contact happens after 30 minutes.

In terms of how he plans on making money, Cheng says that the revenue plan is “TBD.” Some ideas include charging agents for premium features, offering brokerage-level products and/or advertising.

Trulia & Zillow competing for the US Real Estate market data

Tuesday, December 18th, 2012

Trulia vs. Zillow: How they stack up after Q3 earnings


The rivalry between Trulia and Zillow is one of the more entertaining matchups we get to cover. And it has taken on added significance in recent weeks now that both are trying to woo Wall Street.

Not only are both online real estate companies now publicly traded, but Zillow has fired a couple of heavy shots across the bow of Trulia. In September, Zillow sued Trulia for patent infringement over its automated home valuation tool. That was followed this week when Zillow purchased the company that powers Trulia’s online mortgage center.


In a conference call Wednesday, Trulia CEO Pete Flint noted that the acquisition would not have a material impact on the business and that they had intended from the beginning to work with multiple partners.

This is one serious rivalry.

In their third quarter earnings calls this week, both Trulia and Zillow execs laid out the case as to why they believe they’ll come out on top in the real estate biz. Investors, at least this week, preferred the Trulia story. Zillow lost more than a quarter of its value after investors expressed concerns that display advertising revenues slowed.

Wall Street valuations don’t always tell the full story. So, who is doing better? Here’s a look at some of the key metrics for both companies from their respective third quarter reports.


Zillow remains the bigger of the two companies in terms of revenue, but Trulia is growing faster. Trulia’s revenues came in at $18.5 million, a 76 percent growth rate compared to the third quarter of last year. That compares to revenues of $31.9 million, a 67 percent growth rate, for Zillow.


Cash is king as they say, and in this category Zillow maintains a lead. Its cash and cash equivalents came in at $188 million at the end of the third quarter, compared to Trulia’s $101 million. Zillow has been using its war chest to gobble up other players in the real estate industry, making five acquisitions in the past two years. “The nice thing about this category is that it has essentially been bereft of an acquirer for the last 10 to 15 years,” Zillow CEO Spencer Rascoff told GeekWire this week. “Zillow benefits from a pretty greenfield opportunity here in terms of M&A.”

Profits and losses

Pretty simple story here. Zillow showed net income of $2.3 million for the quarter, compared to a net loss of $1.7 million for Trulia.


Zillow retains the edge on traffic. Average monthly unique users on mobile and Web grew to 36.1 million in the third quarter. Trulia’s count for the period came in at just under 25 million. Both companies are growing traffic at about 50 percent year-over-year.

HST to PST: Transition Rules for Real Property

Tuesday, December 18th, 2012


On August 26, 2011, the provincial government announced that it will eliminate the Harmonized Sales Tax (HST) by March 31, 2013. Commencing April 1, 2013, in BC the HST will be replaced by the federal Goods and Services Tax (GST) and the BC Provincial Sales Tax (PST). On February 17, 2012, the BC Ministry of Finance and the federal Ministry of Finance announced general transition rules for real property.

The following questions and answers are intended to provide clarity regarding sales of new housing at a high level. For advice about specific transactions and situations, BCREA suggests individuals seek legal and/or accounting advice, as appropriate.

For more information, see:

Frequently Asked Questions – PST Transition Rules

1.     Why are transition rules necessary?

2.     When does HST apply, and when does GST apply?

3.     Generally, when does the tax become payable?

4.     Generally, when does the tax become payable when the transaction involves a strata unit?

5.     Who will be responsible for paying the GST?

6.     Will the PST apply to real property?

7.     How will the temporary transition tax work?

8.     Who pays the temporary transition tax?

9.     How will the temporary transition tax work when the transaction involves a strata unit?

10.                        Are there any rebates for sellers related to the temporary transition tax?

11.                        How will the transition affect the way I prepare or counter a standard form Contract of Purchase and Sale?

12.                        If a Contract of Purchase and Sale for a new home was signed on or after February 17, 2012 and before December 1, 2012, and included an addendum containing required information, is any further action needed?

13.                        What methods can be used to provide the buyer with the addendum?

14.                        Is there a penalty for builders who don’t make the required disclosures during the transition period?

15.                        Will the PST apply to real estate commissions?

16.                        When does commission become payable?

17.                        Are there any special rules for commercial property?


New Housing Transitional Rules

Tuesday, December 18th, 2012


The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under HST and partly under the PST, they will generally all pay a consistent and equitable amount of tax. The transition rules provide certainty for new-home construction and sales, particularly during the transition period.

  • B.C.’s portion of the HST will no longer apply to newly built homes where ownership and possession transfer on or after April 1, 2013.
  • While PST will not apply to the purchase of new homes, builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home’s purchase price will again be embedded PST.
  • The temporary housing transition measures will be in place for two years, until March 31, 2015.
  • A new temporary housing transition tax of two per cent will generally apply to purchasers of new homes where at least 10 per cent of construction has begun before April 1, 2013, and ownership and possession transfer on or after that date.

The temporary housing transition tax and the temporary housing transition rebate for builders will be administered by the Canada Revenue Agency on behalf of B.C.

For newly built homes where construction begins before April 1, 2013, but ownership and possession transfer after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a transitional provincial tax of two per cent on the full house price. This ensures equitable treatment among purchasers during the transition between HST and PST and will help mitigate distortive market behaviour. Eligible builders who have paid PST on at least some of the construction materials incorporated into the new housing will receive a transition rebate that helps to offset the PST and helps prevent double-taxation on homebuyers.

The act covering the temporary housing transition tax and the temporary housing transition rebate comes into effect on December 1, 2012.

Under a newly passed regulation, builders are required to provide specific tax-related information to purchasers to ensure a shared understanding of the taxes and rebates that are included in the contracted purchase price and that apply under the transition rules. Builders who fail to disclose the required information may incur a penalty.

  • Average amount of embedded sales tax in newly built homes under PST: two per cent.
  • Provincial portion of the HST paid by purchasers on an $850,000-newly built home after HST rebate: two per cent.
  • Temporary provincial transition tax rate on a newly built home during transition: two per cent.

The B.C. new housing rebate threshold has been increased to $850,000, meaning more than 90 per cent of newly built homes may now be eligible for a provincial HST rebate of up to $42,500.

It is important to note that the HST does not apply to resale housing.

Raising the B.C. HST rebate threshold to $850,000 is expected to save purchasers about $60 million in 2012-13.

The maximum value rises to $42,500 from $26,250, a 60 per cent increase.

To help support workers and communities in B.C. that depend on residential recreational development, purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 are now eligible to claim a provincial grant of up to $42,500 effective April 1, 2012. The Province is administering the grant for new secondary vacation and recreational homes.

On February 17th, 2012 the Government announced the new housing transitional rules for returning to the PST. Below you will find information, and links to the Canada Revenue Agency’s notice with the Q&As on these rules.

New online resources to help members understand the New Housing Transition Tax and Rebate Act and Regulations

Thursday, December 13th, 2012


On December 1, 2012, the New Housing Transition Tax and Rebate Act and Regulations came into force. To help you, BCREA has updated its online HST/PST resources, including the “HST to PST: Transition Rules for Real Property” available at

The most important revision in the frequently asked questions (FAQ) is to the question:

Q. “How will the transition affect the way I prepare or counter a standard form Contract of Purchase and Sale?”

A. The New Housing Transition Tax and Rebate Act and Regulations require somewhat different disclosures, depending on whether or not the seller is a “foreign supplier” (basically, whether they’re a resident of Canada). Four new addendums to the Contract of Purchase and Sale are available on WEBForms® as of December 1, together with an education piece to help guide REALTORS®.

The following new FAQs have also been added:

Q. If a Contract of Purchase and Sale for a new home was signed on or after February 17, 2012 and before December 1, 2012, and included an addendum containing required information, is any further action needed?

A. Yes. Where the CPS was signed on or after February 17, 2012 and before December 1, 2012, and neither ownership nor possession transfer on or before December 31, 2012, then a new addendum (now available on WEBForms®) must be provided to the buyer by January 2, 2013. While the addendum must be signed by the seller, it doesn’t have to be signed by the buyer.

If a sale is subject to transition tax (that is, tax becomes payable after March 31, 2013 and before April 1, 2015, and substantial renovation or construction is at least 10% complete before April 1, 2013), the seller must ensure that the statement of adjustments (or other document issued at the time tax is payable) contains the information in the addendum, plus disclose the completion percentage as at immediately before April 1, 2013, and as at the date tax is payable.

Q. What methods can be used to provide the buyer with the addendum?

A. Four acceptable delivery methods include:

  • in person;

  • courier or registered mail;

  • fax; or

  • any other means, including email, if written confirmation of receipt by the buyer or the buyer’s agent is obtained.

Q. Is there a penalty for builders who don’t make the required disclosures during the transition period?

A. Yes. A penalty of up to $10,000 per home (or one per cent of the purchase price) can be imposed on a builder who fails to fully and accurately disclose the required information. In the case of a builder who knowingly makes a false statement, a penalty of up to four per cent of the purchase price may be imposed, to a maximum of $40,000 per home.

HST/PST Calculator for BC: The calculator has been revised to address the tax situation before the PST is reinstated and after. BCREA’s HST/PST resources are intended as a general overview, not a definitive resource.

If you have suggestions for additional content, contact Harriet Permut at [email protected].

BCREA plans to continue to enhance its online HST/PST website at: government-relations/pst-transition-rules and welcomes members’ feedback.

Buy it, Fix it, Flip it

Thursday, December 13th, 2012

Could be smart strategy


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Walk Through – can address minor, major misteps

Thursday, December 13th, 2012


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