Joannah Connolly
Other

Vancouver Census Metropolitan Area (CMA) housing starts were trending at 20,271 units in August, up 11 per cent compared with July, according to data released September 9 by Canada Mortgage and Housing Corporation (CMHC).

The August trend, which is a measure of a six-month moving average of seasonally adjusted annual rates, compares with a drop in starts in June to 18,423 from May’s 19,000, followed by a further slight drop in July to 18,345 units.

“Multiple-family housing starts accounted for much of the uptick in August,” said Robyn Adamache, CMHC’s senior market analyst. “Larger condominium apartment projects in Richmond and Burnaby were the most significant contributors to the August numbers.”

Across British Columbia, starts were trending at 27,511 units in August, an increase of eight per cent compared with July after remaining relatively flat compared with June.

CMHC said it uses six-month moving averages to account for considerable swings in monthly estimates and obtain a more complete picture of the state of the housing market. In some situations, said the CMHC, analyzing only the monthly seasonally adjusted data can be misleading in some markets, as they can be variable from one month to the next.

The news comes on the heels of a September 8 building permits report by Statistics Canada, which said that a rise in Vancouver and BC permits in July was driven by multi-family condo construction.

© 2014 Real Estate Weekly

Barry Magee
Other

With land at such a premium in the Lower Mainland, a lot of first-time buyers are spending their time shopping online for condominiums these days. Lifestyle is of the utmost importance to the younger generation, so walking to work, having easy access to restaurants and bars and being able to live without a car will often be more important than square footage. The older generation is often attracted to condos, too, because of the lack of maintenance and the convenience of having so many amenities nearby.

But the following question is being asked when viewing potential condos: just how small is too small? And if you’re selling your small condo, how do you make buyers feel like they are purchasing a home bigger than it really is?

Getting people to buy into a smaller unit can seem pretty daunting, so you need to put on your creative cap because there are lots of different ways to maximize the amount of space you have to offer.

Entertaining is often not much of a concern, with (hopefully) so many great options being available nearby, but it’s still important to show buyers they will be able to create a comfortable environment that they will be able to relax in with their down time.

Let’s look at some simple renovations you can do to make your small condo unit stand out from the crowd.

Use Neutral, Light Colours

If you were to conduct an experiment and take two rooms that were exactly the same size, paint one a dark shade of brown and paint the other one a softer shade of beige, which do you think visitors would think is larger? A lot of studies have looked at this subject, and more often than not people pick the lighter room. Anytime you enter a room with a softer shade on the walls it gives the impression of being brighter, more inviting and bigger. Even keeping the colour a simple white will provide the illusion that the space is larger. Make sure to keep use the same colour throughout your unit, as using contrasting colours can fool the brain giving it the impression that there are divisions in the room, even if there aren’t any.

What To Do In The Kitchen

Now let’s switch focus over to the most important room in your condo – the kitchen. Again, follow the rule of having a uniform look to everything, from the backsplash to the countertops, as well as keeping everything looking bright. If going all white just doesn’t tickle you the right way, feel free to switch some of the colours up but remember to keep everything in neutral tones. Why not give a hushed marble of white and grey over the countertops? Or many some unique drawer and cabinet handles will provide the creative look you are looking for? Whatever you do, don’t ever consider painting the ceiling a darker shade than you use on the walls. Again this tricks the mind, giving the impression that the ceiling is lower than it actually is.

Less is Always Best

Keep the clutter to a minimum in your unit, including the furniture. This might be a little challenging in the short term, but if it helps you find the right buyer for your unit, the short-term pain will turn into long-term gain. When you clutter your condo with lots of furniture, it might make for a comfortable evening in front of the TV, but it makes every room seem smaller than it actually is. A great idea is to have coffee and end tables that are able to store items out of view. Getting rid of that L-shaped sectional by putting it in storage is always helpful – it’s going to cost you more money than it’s worth. Using a staging company is definitely a good idea, as they can provide you with some furniture that will be the perfect size for your unit and give a positive impression.

Artwork Is Personal – Keep It That Way

Photos and artwork on the walls need to be put into storage. It takes away from the space of a room, again making it feel more cramped than it actually is. Keep some tasteful art and a few pictures, but overall most people will want to look at trimming this down to a minimum. Think about it this way, when you go to a museum or art gallery have you ever noticed how much white space there is separating each piece? Two great pieces of art sitting side by side is just too much for our brains to handle. Avoid this potential clash of styles and the ensuing chaos that it can bring to a buyer’s mind.

© 2014 Real Estate Weekly

Tara Perkins
Other

Home prices in Canada’s major cities are running at a rate many economists just don’t think is sustainable.

We won’t get a complete picture of sales and prices in August for a couple of weeks, but preliminary figures from local real estate boards suggest there’s plenty of momentum. And that has some economists wondering about how long this will last.

“Existing-home sales remained strong in a number of major cities in August and prices continued to outrun income,” Bank of Montreal economist Sal Guatieri wrote in a research note. “How long prices can continue to outpace family income in these major cities is unknown, but it can’t go on forever. The longer it does, the greater the risk of a correction when interest rates rise.”

Falling mortgage rates helped make homes more affordable heading into the summer, according to Royal Bank of Canada. And a recent survey by real estate consulting and research firm Altus Group found home buying intentions everywhere except B.C. were up this summer compared with a year ago. “While first-time buyer intentions are down slightly, homeowners with mortgages are showing more interest,” Altus Group said.

Policy-makers probably won’t do anything to cool prices now, since many smaller housing markets aren’t running as hot as Toronto, Calgary and Vancouver.

Here’s a look at how some markets across the country performed in August, according to data released this week by their local real estate boards.

TORONTO

– 7,600 homes sold on the MLS, up 2.8 per cent from a year earlier, and well above the 10-year average sales level of 7,059 for August.

– the average selling price of all types of homes in Greater Toronto was $546,303, up 8.9 per cent from a year earlier.

– the average price of detached homes in the downtown area covered by the 416 area code was $902,428, up 14.7 per cent; for condos it was $370,899, up 4.1 per cent; for townhouses it was $463,798, up 11.7 per cent.

CALGARY

– 2,267 homes sold on the MLS, up 3.4 per cent from a year earlier; condo sales were up 14 per cent and townhouse sales up 20 per cent, sales of single-family homes fell 2.4 per cent.

– the average price of a single-family home was $545,238, up 5.42 per cent, and the benchmark price of a single-family home was $512,300, up 10.24 per cent; the average price of a condo apartment was $332,006, up 11.48 per cent, and the benchmark price of a condo apartment was $298,200, up 10.2 per cent.

– the average number of days a home spent on the market before selling dropped to 39, from 45 a year earlier.

VANCOUVER

– 2,771 homes sold on the Multiple Listing Service, up 10.2 per cent from a year earlier and 4.3 per cent above the 10-year average for August.

– the benchmark price of all types of homes in Metro Vancouver rose 5 per cent to $631,600 (the benchmark seeks to create a more apples-to-apples comparison than the average price, which can be distorted by changes in the size or location of homes that are selling.)

– the benchmark price of detached properties rose 6.6 per cent to $984,300; the benchmark price of apartment properties rose 3.6 per cent to $379,200; the benchmark price of attached properties rose 3.9 per cent to $474,900.

OTTAWA

– 1,203 homes sold on the MLS, down 1.1 per cent from a year earlier, but a tiny bit above the five-year average of 1,199.

– the average sale price for all types of homes was $360,214, up 3.4 per cent.

– the average price for a condo was $263,996, up 2.7 per cent, while the average price of other types of homes was $381,628, up 1.9 per cent.

EDMONTON

– 1,552 homes sold over the MLS, down 6 per cent from a year earlier.

– the average selling price of all types of homes was up 5 per cent to $368,597, the median selling price was up 5.7 per cent to $348,900.

– the median price of a single-family home rose 5.8 per cent to $402,750, while the median price of a condo fell by 0.6 per cent to $228,500.

REGINA

– 348 homes sold over the MLS in the Regina area, down 8 per cent from a year ago. That was below the five-year average of 365 but above the ten-year average of 336.

– inventory levels are the highest they’ve been in more than 20 years. The number of properties for sale at the end of August was 223 per cent higher than two years earlier.

– the benchmark price was $299,600, down 2.4 per cent from $307,000 a year earlier and homes sat on the market for an average of 48 days before selling, compared with 32 days a year earlier.

© Copyright 2014 The Globe and Mail Inc.

Glenn Duxbury
Other

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LOUISE DICKSON
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VICTORIA – B.C.’s Archaeology Branch can no longer force homeowners to pay for archeological research on their properties.

The province has abandoned its appeal of a 2013 B.C. Supreme Court ruling that found the Archaeology Branch acted improperly in forcing Wendi Mackay of Oak Bay to pay for archaeological research on her property.

In her judgment, Justice Laura Gerow ruled that the Archaeology Branch’s treatment of Mackay, who lives at 2072 Esplanade on Willows Beach, constituted a nuisance.

“This is significant,” said Brian Wallace, Mackay’s lawyer. “I think Justice Gerow’s decision, and the government’s acceptance of it by abandoning its appeal, is important for any property owner in B.C.”

A statement from the Ministry of Forests, Lands and Natural Resource Operations said that although the province initially filed a notice of intent to appeal, a review determined that it would not be in the public interest to pursue it. Both sides agreed to drop appeals and pursued a negotiated settlement instead, said the statement.

The case began in 2006 when Mackay and her late husband bought property from her parents and planned to build a new house. The province told her she had to conduct an archeological investigation because the property was a heritage site, although it did not have an official designation.

Mackay found out later that archeological digs had taken place on the property in 1971. About 850 artifacts were removed and a report was filed with the Archaeology Branch.

Despite this earlier work, an architect hired by the Mackays was told by the branch that a site-alteration permit would be required. To obtain the permit, the Mackays had to hire an archeologist for a heritage inspection and file a report for the branch.

The inspection cost Mackay close to $6,000. It indicated an excavation would be required. Mackay hired an archeologist to obtain the permits and to do the necessary work for $51,000.

“There were very significant delays in her construction project as a result. So she was left with a piece of property that couldn’t be used for anything for a year until almost all the hurdles had been met,” Wallace said. “And this was at a time when construction costs were going up very quickly. Her construction costs were considerably more than they would have been. And she had to find somewhere else to live.”

In all, Mackay estimated the archeological work, construction delays, loss of property value and legal fees have cost her $750,000.

Her claim against the province for compensation was rejected at various levels, but in May 2013, Gerow ruled in Mackay’s favour, saying the province had no authority to make her pay for an archeological survey of her own property.

Wallace said he wasn’t authorized to say how much the government paid Mackay in the final settlement, but it was less than her costs.

No one is contesting that it’s important to preserve important First Nations sites, Wallace said.

“The question is, if it’s important to society, shouldn’t society pay for it, not the person who finds themselves in this position without any knowledge of it whatsoever?”

The Gerow decision is now the law in B.C., Mackay said. “The court’s decision should assist any homeowners who are faced with permitting requirements under the Heritage Conservation Act. In essence, the court has said that private property owners should not be required to pay the costs of archeological research undertaken in the public interest, particularly when the government has not registered its interest in private land on title,” Mackay said.

“My hope is that other homeowners do not have to pay similar costs or face similar delays and that the Archaeology Branch will take a more reasoned and balanced approach in setting and administering its permitting conditions.”

© Copyright (c) The Victoria Times Colonist

Lior Zehtser
Other

If you think you’re paying too much tax, here are some ideas that may help.  Get started on these ideas now and you may be able to save some money at tax time.

If you are just getting started, meet with an accounting professional right before you start your real estate career so that you know what to look out for. Should you keep receipts? For how long? Most of your questions can be answered in a one-hour consultation.

Stay organized and create a system – whether it’s a monthly/quarterly exercise to separate your various expenses into different categories (envelopes, folders) or inputting the data into a spreadsheet or an online tool (Wave Accounting, Freshbooks, Xero – ask me how!).  The more you do upfront, the easier it will be at year-end and the CRA agent may be impressed with how quickly you were able to supply the requested documents, which may play into your favour.

Don’t forget about the GST/HST you collected – this doesn’t belong to you!  It would be prudent to tuck away all of the GST/HST you collect on each commission cheque to ensure you have enough funds to remit to the CRA at tax time.

Set up a separate business bank account that acts as the main account for your commission income and expenses.  This helps to differentiate between business and personal expenses, but more importantly, it does not open the door for the CRA to review all of your personal activities if you are chosen for an audit.

Tax deductions and write-offs: In addition to all of the standard expenses (advertising and promotions, meals, monthly brokerage fees, board/association dues), here are some deductions that I get questioned about the most:

Commission rebates – If you give a client a commission rebate, it’s 100-per-cent deductible. Real estate agents must remember to keep the GST/HST they collected on the full commission and only provide the rebate, net of GST/HST.

If the property purchased/sold is a principal residence, the benefactor has nothing to worry about.  If the property purchased/sold is an investment property, this rebate has tax implications and is beyond the scope of this article – but to make a long story short, it will increase the capital gain (if any) on the property.

Tuition courses:  Our firm takes the position that expenses incurred on courses taken to obtain your real estate license and earn commission income should be fully deductible on your Statement of Business Activities.  We have seen some accountants in the past include tuition expenses as a tuition credit on a separate schedule, thereby reducing the deductions that an agent can claim.  Although a case can possibly be made both ways, because an expense is incurred to earn income in this situation, the deduction should stand as an expense.

GST/HST on vehicle purchase:  Tracking the GST/HST you incur on your real estate activities and expenses can add up to significant tax savings and the rules are somewhat black and white.  Unfortunately, the GST/HST rules aren’t as straightforward when the purchase in question relates to an item that isn’t wholly used for business.  And since the GST/HST you spend on vehicle purchases is usually significant, it is important that you get it right.

The CRA will allow you to include all of the GST/HST you incur on a vehicle purchase on your GST/HST filing if the vehicle is used 90 per cent or more for business. It will disallow any GST/HST on filing if the vehicle is used 10 per cent or less for business.  If your usage is in between, there is a formula that must be used to arrive at the GST/HST amount you are allowed to claim.

More things to consider:

–  If in any year you owed $3,000 or more in GST/HST, you are required to pay quarterly GST/HST instalments in the subsequent year (equivalent to your GST/HST payable amount in the prior year divided by four).

–  You can stop calculating GST/HST incurred on expenses by opting to remit GST/HST using the Quick Method.  All that is required of you is to calculate the GST/HST you owe by using a simple formula provided by the CRA.

Copyright © REM 2014

Brent Jang
Other

Greater Vancouver and Fraser Valley home buyers have pushed up prices for single-family detached houses to record highs.

The benchmark home price index hit $984,300 last month for detached properties sold in Greater Vancouver, up 6.6 per cent from August, 2013. In the Fraser Valley, which includes the sprawling and less-expensive Vancouver suburb of Surrey, the detached price index climbed 3.4 per cent to $569,800 over the past year.

The record-high prices for detached houses will prompt more consumers, especially first-time home buyers, to shop for townhouses and condos, said Shaadi Faris, vice-president at Vancouver-based Intergulf Development Group.

Some baby boomers are selling their large detached homes and moving into condos while helping their children with down payments, fuelling the rally in housing prices in Greater Vancouver, Mr. Faris said in an interview Wednesday. “Locals have built up equity and are downsizing,” he said.

A variety of factors have led to property prices reaching new highs, including low interest rates, a stable economy and an influx of residents from other provinces and countries, real estate experts say.

Intergulf has been getting interest on its various projects primarily from prospective buyers who will live in their units. While there are many inquiries from long-time Vancouverites and people with recent ties to China, there are a small number of outright foreign investors, Mr. Faris added.

Intergulf began construction in early 2014 on its Empire at QE Park condo and townhouse project near Queen Elizabeth Park on Vancouver’s west side.

The index price for existing detached homes on Vancouver’s west side rose 9.7 per cent over the past year to $2,282,400, while increasing 10.3 per cent to $936,500 on the east side.

By contrast, the index price for condos on the west side reached $495,900 in August, up 5.7 per cent from the same month last year. Condo prices on the east side posted a 3.1-per-cent increase year-over-year to $313,400.

The Real Estate Board of Greater Vancouver said the region’s housing sales rose to 2,771 in August, up 10.2 per cent from a year earlier and 4.3 per cent higher than the 10-year average for the month.

“Activity this summer has been strong but not unusual for our region,” Greater Vancouver board president Ray Harris said in a statement.

In the Fraser Valley, townhouse prices nudged up 0.1 per cent to $298,500 over the past year, but condo prices fell 3.5 per cent to $196,700.

Fraser Valley board president Ray Werger said many first-time buyers in the suburbs are able to afford townhouses or smaller detached homes, including new developments in Cloverdale and Langley.

© Copyright 2014 The Globe and Mail Inc