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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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Posted at 09:49 AM in Buyers Info, Buyers Tips, Dartmouth Real Estate, Food and Drink, Halifax Events, Halifax Info, Halifax Real Estate, Local Events, Matt Welch, RE/MAX, Sellers Info, Sellers Tips, Terry Campbell, The Bagogloo Team, Thomas Bagogloo | Permalink | Comments (0) | TrackBack (0)
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Canadian residential real estate defied conventional logic and outperformed expectations in 2011, posting another solid year of housing activity virtually across the board. The trend is expected to carry forward into 2012 as Canadians continue to demonstrate their faith in homeownership, despite concerns over the European debt crisis and its impact on the global economy, according to a report released by RE/MAX.
The RE/MAX Housing Market Outlook 2012 examined trends and developments in 26 major markets across the country. Eighty-eight per cent (23/26) anticipated average price increases by year-end 2011—with percentage hikes ranging from one to 16 per cent. The forecast for 2012 shows the upward trend moderating, but still ahead of 2011 figures. Overall home sales are expected to remain on par or ahead of last year’s levels in 85 per cent (22/26) of markets in 2011—including Saskatoon with a year-over-year percentage increase of 13 per cent and an eight per cent uptick in Calgary, Winnipeg, Hamilton-Burlington and Sudbury. Almost half of Canadian markets will match the 2011 performance, while the remainder should post increases ranging from one to five per cent next year.
By year-end 2011, an estimated 460,000 homes are expected to change hands, up three per cent from the 447,010 units reported in 2010. Sales are expected to climb one per cent to 464,500 units in 2012. The value of a Canadian home is set to climb to $363,000 this year—an increase of seven per cent over the $339,030 posted one year ago. By year-end 2012, the average price in Canada is forecast to appreciate two per cent to $371,000.
The Canadian housing market has demonstrated tremendous resilience in recent years, but 2011 stands out. Instead of responding to economic concerns both here and abroad with a retreat in sales and prices, residential real estate markets actually experienced an upswing in the volatile third and final quarters. While clearly not impervious to the impact, Canadian consumers are intent on making their moves now, in advance of higher housing values and rising interest rates down the road.
Improvement in both provincial and local economies, especially during the second half of 2012, should serve to further stimulate home-buying activity. Calgary, Saskatoon, and Halifax-Dartmouth will likely lead the country in unit sales in 2012, each with a projected increase of five per cent. Regina, Greater Toronto, Saint John, Moncton, and St. John’s anticipate a three per cent increase in home sales next year.
The economic underpinnings support ongoing demand, particularly as job creation efforts continue and unemployment rates edge down further. Nationally, we remain on an upward track, and the confidence consumers have demonstrated in housing over the past decade will prove well founded once again next year. The rising belief in homeownership is key, especially among Generation X and Y—some of whom are making their moves sooner. Boomers and retirees are changing, too. They’re healthier and more active, with longer life expectancy. Overall, we’re seeing an extension of the homeownership cycle, and it’s great news for housing.
While tighter supply levels contributed to steady price appreciation in most major markets across Canada this year, an increase in inventory more in line with years previous should ease upward pressure on average price in the year ahead. The highest appreciation is expected in Regina, where values are forecast to increase eight per cent, followed by Greater Toronto, Halifax-Dartmouth, and St, John’s—each posting a five per cent gain. Overall, 81 per cent of the markets examined are forecast to set new records for average price next year. Noteworthy milestones include Greater Vancouver, which will break the $800,000 threshold, as well as Regina and Kitchener-Waterloo, which will reach the $300,000 mark.
While prices will remain on the upswing, buyers will benefit from greater selection moving forward. Stability or modest growth will characterize sales activity while GDP moves forward at a more muted pace in 2012. Whether markets will meet or potentially exceed projections will hinge largely on consumer confidence. An unexpected call for interest rate hikes could also serve to bolster sales.
Other highlights include:
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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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Posted at 10:34 AM in Buyers Info, Buyers Tips, Dartmouth Real Estate, Halifax Events, Halifax Info, Halifax Real Estate, Matt Welch, RE/MAX, RE/MAX Market Trends Report, Sellers Info, Sellers Tips, Terry Campbell, The Bagogloo Team, Thomas Bagogloo | Permalink | Comments (0) | TrackBack (0)
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Record investment dollars poured into Canadian housing stock over past decade
Billions spent in new construction, renovation, and infill over the past decade have contributed to a serious upswing in the calibre of Canada’s housing stock, propping up residential average price in the country’s major centres, according to a report released recently by RE/MAX.
Since 2000, the value of a Canadian home has doubled, rising from $163,951 to $339,030 in 2010. Nowhere has the upswing been better captured than in both the value of residential building permits issued nationally between 2000 and 2010—at $340 billion—and the estimated $450 billion spent in renovation. The impact of these two forces alone has fuelled the Canadian residential real estate market – as well as the construction industry—for more than 10 years.
As a result, investment in Canada’s housing stock is at an all-time high in the 16 Canadian residential real estate markets examined in the RE/MAX Housing Evolution Report. Higher quality housing translated into extraordinary price appreciation across the country—with 62 per cent (10 markets) experiencing increases in excess of 100 per cent since 2000.
“While a number of external variables were also behind the exceptional gains, revitalization—amid an aging housing stock—and newer construction are largely underestimated factors supporting Canadian housing values. The trend is expected to continue for years to come as investment in residential real estate through renovation, infill, and redevelopment ramps up across the country. City planners, builders, developers, and homeowners have only just begun.
The report found that the unprecedented sum funneled into housing has effectively changed the landscape of Canada’s major centres. New home construction has advanced suburban sprawl, giving rise to new sought-after pockets in virtually every centre across the board.
Infill continues to redefine neighbourhoods, particularly in areas where the value of existing structures have not kept pace with escalating land values. The trend was evident in all centres, but had the greatest impact in large metropolitan cities such as Toronto and Vancouver. Bungalows on large lots are prime targets, making way for custom builds that transform working-class subdivisions of yesteryear into up-and-coming upper-end pockets. Infill is also maximizing land potential, often replacing one, two or several tired structures with a block of townhomes or mixed-use residential, even high-rise apartments.
Renovation has also had a tremendous impact on housing throughout the decade, so much so that it’s emerged as, arguably, Canada’s next national past time. Residential renovation spending has been gaining momentum year-over-year since the early part of the decade and now exceeds $60 billion annually.
The trend has not been limited to single-family homes—although that activity has been nothing short of remarkable. Canada’s cities have also mounted ambitious renewal of their own, particularly in the heart of most major centres—the urban core. Strategic smart growth plans are altering cityscapes, challenging our concepts and perceptions—including our purchasing patterns—and creating partnerships that are working to escalate our markets to world-class status. Non-residential construction, including infrastructure spending has had a positive secondary impact, in turn boosting spending on the residential side.
The past decade has also marked the rise of the condominium—moreover, its undeniable acceptance as an attractive option as opposed to a secondary compromise. Toronto, for example, has become the largest condominium market in North America. Yet, it isn’t just gaining traction in large centres like Toronto, Ottawa and Vancouver, but also in smaller cities such as Kelowna, London and Halifax—to name a few. Running the gamut from entry-level units to upscale, luxury suites, condominiums have gained widespread appeal with aging boomers, looking for lifestyle and low maintenance; young professionals, attracted to trendy locales; and first-time buyers, looking to get their foot in the door to homeownership.
Condominiums have changed the urban landscape, driving residential neighbourhoods up, instead of out, and bringing to market a bevy of new options from mixed-use residential, live-work studios, lofts, townhomes, and condo bungalows. Townhomes, in particular, have experienced a serious rise in popularity, bridging the gap for empty-nesters and retirees not yet ready for apartment-style living.
With construction of rental product few and far between in many Canadian centres, it’s no surprise that investors have also been particularly active in the condominium market, especially in college/university towns or where vacancy rates remain tight.
Redevelopment holds the greatest potential for cities on the cusp of exciting rejuvenation. While former brownfields can present challenges, many have opened up and revitalized entire areas. The Barrel Yards Development in Kitchener-Waterloo, for example, is expected to change stagnant industrial land into a bustling residential, commercial and retail hub. Past successful transformations include Garrison Woods in Calgary, the Hamilton Beaches in Hamilton and Bishop’s Landing in Halifax, with countless projects planned nationwide in the years to come. Conversions also continue to breathe new life into existing structures with good bones, while supporting the move to higher-density and the introduction of affordable options.
Greater sustainability overall, keeping the urban lifestyle attainable, livable and attractive at all price points, depends on redevelopment.
Lastly, population growth has been a key factor making housing evolution possible. Since 2000, Canada’s population has experienced double-digit growth of 11 per cent. By 2031, over 42 million people are expected to call Canada home.
There’s no question that population growth will continue to support investment, propping revitalization and new construction in the years ahead, and by extension raising the bar and prices in real estate markets even further.
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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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Posted at 04:58 PM in Buyers Info, Buyers Tips, Dartmouth Real Estate, Halifax Info, Halifax Real Estate, Matt Welch, RE/MAX, RE/MAX Market Trends Report, Relocation Info, Sellers Info, Sellers Tips, Terry Campbell, The Bagogloo Team, Thomas Bagogloo | Permalink | Comments (0) | TrackBack (0)
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We’ve already felt the boost this November in real estate in the Halifax-Dartmouth area, and you certainly can’t miss the optimism in the air, ever since we learned that indeed the Ships WILL Start Here! But this week the TD Bank has announced even more promising news, predicting that Nova Scotia could well be the fourth-best-performing economy in Canada by 2013 with many “ripple-down” positive effects for the rest of the province, and more. John Demont with the Chronicle Herald has the report.
Halifax’s $25-billion naval shipyard contract will single-handedly transform Nova Scotia’s underperforming economy into one of the strongest in Canada by 2013, a TD Bank Group economist predicts.
Talk about a turnaround: this year, before the Halifax Shipyard contract begins to have an impact, Nova Scotia’s economy is slated to grow by a modest 1.4 per cent.
The bank had been expecting the economy to limp along during the next two years. But since the awarding of the shipyard contract, TD is far more optimistic about Nova Scotia’s prospects. So much so that its economics department has taken the unusual step of updating its prognosis for the provincial economy.
“This contract has the potential to offer a better standard of living and more long-term stability for the province,” TD economist Sonya Gulati said Monday.
She added that the contract could help slow the exodus out of Nova Scotia by “making people do a double take as to whether or not they have to leave.”
Gulati predicts the provincial economy will grow by 2.6 per cent in 2013, which is 0.5 per cent more than originally expected.
By the bank’s reckoning, that should leave Nova Scotia — previously dead last in terms of expected GDP growth in 2013 — tied with Newfoundland and Labrador as the fourth-best-performing economy in the land. (Alberta, Saskatchewan and Ontario are expected to lead the country.)
Halifax Regional Municipality, which is forecast to grow by 3.2 per cent in 2013, will do even better than the province.
The shipbuilding job bonanza is already slowly starting. The Irving family-owned Halifax Shipyard has received 2,000 applications since the contract was awarded on Oct. 19.
So far, the yard has hired 50 people, most of them electricians. But at peak, Irving spokeswoman Mary Keith says, 1,000 of the 2,700 people expected to be working at the shipyard should be in white-collar sectors like IT, engineering and finance.
Those numbers don’t surprise TD’s Gulati. She expects the impact of the shipyard contract to ripple through most sectors of the Nova Scotia economy. Under the federal government’s Industrial and Regional Benefits policy for procurement contracts, a substantial amount of the work must go to small- and medium-sized enterprises, which make up the lion’s share of the provincial economy.
She also thinks benefits will spread far beyond the boundaries of the Halifax region. The reason: some 70 per cent of Nova Scotia’s manufacturing companies are located outside Halifax. The same is true of roughly 40 per cent of the province’s research and development, engineering and technical consulting firms.
That’s music to the ears of Bert Lewis, business development manager of Mulgrave Machine Works Ltd. in Mulgrave.
“Our expectation is that there will be such a volume of work that one yard will not be able to handle it,” said Lewis, whose custom metal fabrication company hopes to design and fabricate pressure vessels and tanks for the shipyard contract.
“We are ready, willing and able to support that initiative and look forward to being part of it.”
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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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Posted at 03:33 PM in Buyers Info, Buyers Tips, Dartmouth Real Estate, Halifax Events, Halifax Info, Halifax Real Estate, Halifax Real Estate Channel, Local Events, Matt Welch, RE/MAX, RE/MAX Fit to Buy, RE/MAX Fit to Sell, RE/MAX Market Trends Report, Relocation Info, Sellers Info, Sellers Tips, Terry Campbell, The Bagogloo Team, Thomas Bagogloo | Permalink | Comments (0) | TrackBack (0)
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Mark Hurley, AMP - For anyone looking at a variable rate mortgage these days, you will notice the interest rate is not as attractive as it once was. Over the past few months, the banks have reduced their discount from prime rate minus .80% ( 2.20% ) to prime rate minus .10% ( 2.90% ). We may even see the variable rate go to prime plus, like we did during the credit crisis a few years ago.
So, does this mean we should all look at fixed rates now? Not necessarily. Everyone’s situation is different, but it should be a conversation you have with your Mortgage Broker or Banker. Will the variable rate discounts return like they did a few years ago after the financial crisis? No one can say for certain if they will, but in my opinion, if they do they will not be as deeply discounted as they once were.
Rob Carrick with the Globe and Mail explains why the variable rate discounts have all but disappeared:
Variable-rate mortgages are so over.
Go fixed rate if you’re arranging or renewing a mortgage, and think hard about the four-year term. If you take in all the recent developments in the mortgage market, this is the most logical strategy.
Variable-rate mortgages are being sold at the prime rate in many cases right now, which is 3 per cent. The traditional discount off prime? Snuffed out by the banks. They’ve decided they aren’t making enough money from discounted variable-rate mortgages, so goodbye discount for the most part. If you shop around, maybe you’ll get 0.2 of a point off prime.
Now for the fixed-rate alternative. Global economic uncertainty and sluggish growth mean you’ll pay in the area of 3 per cent for a four-year term. This explains why veteran mortgage broker Peter Majthenyi has pretty much given up on variable-rate mortgages.
“For 10 years, I’ve said don’t waste your money on a fixed-rate mortgage,” Mr. Majthenyi said. “Today, I just cannot in good conscience put a borrower into a 3-per-cent variable when for the same rate I can put them in a four-year fixed.”
Mr. Majthenyi calls this a “temporary break” from variable-rate mortgages. He’ll see what happens when today’s four-year terms expire. Meantime, he’s gone from writing about 98-per- cent variable-rate mortgages a year ago to virtually zero now.
Numbers from the Canadian Association of Accredited Mortgage Professionals (mortgage brokers, to put it in English) show that variable-rate mortgages had about one-third of the market as of this past spring, compared to 21 per cent four years ago. Interest in variable-rate mortgages was as strong as ever going into the summer as a result of an uncertain global economic outlook that was expected to keep interest rates low. Variable-rate mortgages could be had back then for 2.25 per cent, which represented a discount off prime of 0.75 of a point. Four- and five-year fixed-rate mortgages would have cost roughly 3 to 3.5 per cent, and that included a strong discount.
This was an ideal environment for variable-rate mortgages. The prime rate, used by lenders as a reference for many of their loans, was low and expected to stay that way for as long as it took for the global economic mess to resolve itself. The prognosis was for continued savings versus a fixed-rate mortgage.
Then came two developments that led to Mr. Majthenyi’s 180-degree turn against variable-rate mortgages. One, the cost of fixed-rate mortgages fell a little as a result of the stock market uproar in August and September. Here’s how that worked: Money flowed out of stocks and into bonds, which set the trend for mortgage rates. When a bond’s price rises, its yield falls. And so, as bond yields moved lower in the late summer, so did rates on fixed-term mortgages.
The second development was a decision by the big banks to clamp down on discounts given to customers going variable. “Bottom line, the banks have been stuck with too many variable-rate mortgages that are not profitable,” Mr. Majthenyi said. “How do they make them more profitable? They have to increase their profit on each mortgage.”
A few mortgage brokerage firms now advertise variable-rate mortgages at 2.8 per cent, or prime minus 0.2 of a point. But Mr. Majthenyi said many of the big lenders he deals with as a broker are now at prime. Looking ahead, he sees the market settling into prime plus or minus 0.2 for variable-rate mortgages.
You may still be able to save a token amount with a variable-rate mortgage over a fixed-rate mortgage with a term of four or five years. But it’s not hard to imagine the advantage of the variable rate disappearing in a year or so as the economy rallies. Then, you could be looking at a long period of rising rates.
So get over any ideas you have about variable-rate mortgages being cheap enough in the here and now to overlook the risk posed by future rate increases. In today’s market, variable-rate mortgages are yesterday’s news.
Finally, a quick word from Mr. Majthenyi for people who are in the middle of variable-rate mortgages with those juicy discounts of days gone by: Enjoy.
“You should hug and love those mortgages to the last possible moment because you’re probably not going to get them again.”
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Post courtesy of Mark Hurley,AMP, 902-877-1646 or by e-mail at mark.hurley@migroup.ca. If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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Posted at 02:38 PM in Buyers Info, Buyers Tips, Dartmouth Real Estate, Guest Post by Mark Hurley, Halifax Events, Halifax Info, Halifax Real Estate, Matt Welch, Preferred Partners, RE/MAX, RE/MAX Fit to Buy, RE/MAX Fit to Sell, RE/MAX Market Trends Report, Sellers Info, Sellers Tips, Terry Campbell, The Bagogloo Team, Thomas Bagogloo | Permalink | Comments (0) | TrackBack (0)
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There’s always a silver lining … the economic forecast at home and abroad continues to be less than enthusiastic, however this is good news for home owners or those considering becoming home owners, as it means the Bank of Canada plans on keeping interest rates low, possibly as long as March of 2013. Reuters explores recent announcements by TD Canada Trust in their article from September 13. This is an excellent time to purchase a home! Call The Bagogloo Team today if you are interested in learning about the properties available in the Greater Halifax Area!
TORONTO, Sept 13 (Reuters) - A worsening outlook for the global and Canadian economies will keep the Bank of Canada from raising interest rates until at least March 2013, Toronto-Dominion Bank (TD.TO) forecast on Tuesday.
TD, Canada's second biggest lender, became the first of the country's big banks to push out its forecast for a rate increase into 2013, citing intensifying downside risks in the United States and Europe.
A Reuters survey of Canadian primary dealers last week, which was conducted after the central bank shifted to a less bullish stance on the economy, found most dealers forecast the bank's next rate hike would be in the third quarter of 2012. [CA/POLL] "Although the Canadian economy has benefited from superior fundamentals and has led many other developed market economies in the recovery, the combination of strengthening international headwinds and domestic fatigue are expected to restrain economic growth over the balance of the year and into 2012," David Tulk, Canada macro strategist at TD Securities, said in a report to clients.
Overnight index swaps, which trade based on expectations for the Bank of Canada's policy rate, currently at 1.0 percent, have been pricing in a rate cut for some time. But the vast majority of economists and strategists still do not expect the Bank of Canada to reduce rates. TD expects rates to climb to 2.5 percent by the end of 2013, and to 3.5 percent by year-end 2014.
Tulk said the outlook could deteriorate further on continued market turmoil caused by the European debt crisis and the possibility of another U.S. recession. With the bank's low-for-longer rate stance, TD said bond yields across the curve will remain at very low levels for the rest of the year and through most of 2012.
The Canadian dollar - sitting around C$0.99 on Tuesday - is also expected to weaken, slipping below parity to C$1.01 to the U.S. dollar in the third quarter and C$1.04 by the end of this year. TD cut its targets for growth in gross domestic product to 2.2 percent in 2011 from the 2.8 percent it forecast in June, and to 1.9 percent in 2012 from 2.5 percent. Canada's economy grew by 3.2 percent in 2010. TD also cut its outlook for global growth to 3.2 percent for both 2011 and 2012, from the 3.6 percent and 3.7 percent it forecast in June.
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If you have questions, or want advice on Buying or Selling a home, get in touch with The Bagogloo Team of RE/MAX nova by email at info@halifaxmetrohomes.com or call 902-830-9006.
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