Squamish Real Estate

Here are the 3 option available when considering a lot purchase & construction build:

1)     Purchaser of the lot obtains an unconditional mortgage approval �
This encompasses the financing of a lot purchase and the cost to construct
all under the umbrella of 1 mortgage

Benefits
-A construction mortgage rate of interest is cheaper to finance than a
lot-loan (and can be applied for the lot purchase as long as there is a
construction contract in place)

-Avoids a situation where a purchaser may have the means to finance the lot
but not the construction of their house

-Purchasers can finance the lot purchase and construction (therefore a
builder doesn’t have to finance the purchase until completion date; instead
the builder simply gets paid in construction draws as the construction
proceeds). This typically how a construction mortgage works when you hire a
contractor to build for you

-Purchaser can finance as much as 95% of the construction cost via CMHC

-Much more cost friendly for the buyer

Drawbacks
-In the event a purchaser requires their down payment from the sale of the
existing home they need to be organized and have their home sold prior to
making an offer on a lot (unless they have the means to finance a lot and
construction while keeping their existing home)

2)     Purchaser buys the lot with cash or takes on a lot-loan, prior to construction

Benefits�
-purchaser can own the lot indefinitely without having to build (Subject to
municipal guidelines)

Drawbacks
-purchaser has the additional legal cost of purchasing the lot now and the
legal cost of registering a mortgage at a later date

-lot loans are much more difficult to approve for financing based on a
purchaser conditioning their construction contract on the sale of their home
(unless they can afford to carry the lot loan and an existing mortgage). The
interest rate on a lot loan is higher than on a construction mortgage.

3)     Purchaser refinances an existing property to purchase the lot

Benefits
-No pressure to sell existing home right away
-Money can be borrowed at regular mortgage rates
-Lot is owned F&C (purchaser could make a subject free offer; no condition
to financing)

Drawbacks
-Potential tax concerns

paul.hudson@rbc.com   Paul Hudson | Mortgage Specialist | RBC Royal
Bank Squamish & Whistler | 38100 Second Avenue, Squamish, BC V0N 3G0 |

Decision to increase rebate called a victory for affordable housing

News
Real Estate News: Looming HST heats up B.C. home sales

Looming HST heats up B.C. home sales

Wendy Stueck

Vancouver — From Wednesday’s Globe and Mail Published on Tuesday, Oct. 20, 2009 10:24PM EDT Last updated on Thursday, Oct. 22, 2009 2:31AM EDT

When the British Columbia government unveiled plans in July for a harmonized sales tax to kick in on July 1, 2010, consumers fumed over the timing – the new tax was announced a few months after Premier Gordon Campbell secured a third term – and potential price hikes for everything from haircuts to hamburgers. Then they started thinking about how they could beat it – by, for instance, buying or building homes to sell before the new levy kicks in. Result: As outlined in a new housing forecast from Central 1 Credit Union, a hot housing market driven in part by the pending HST. Higher interests rates could cloud the rosy outlook.

Sales surge

Following a 25-per-cent sales plunge in 2008, B.C. housing sales are expected to climb by 10 per cent in 2009 and by 30 per cent in 2010. Builders are expected to scramble to get houses on the market before the HST takes effect. Under the new regime, new homes worth more than $400,000 will be eligible for a $20,000 rebate. But about 40 per cent of all real-estate transactions in B.C. involve sales priced at more than $400,000, according to the B.C. Real Estate Association, which is calling for the HST rebate threshold to be bumped up to at least $500,000. Critics say the HST could boost new-home prices by as much as 7 per cent. The province says home buyers will benefit because the “embedded” provincial sales tax on new homes will be eliminated, as builders will be able to recover the tax paid on materials.

Prices follow

The median sales price for a residential property of less than two acres in B.C. is forecast to increase to $369,000 in 2009 from $360,000 in $2008. A 6-per-cent gain in each of the next two years is expected to push the median sales price to a record high of $415,000 in 2011. The average sales price is expected to rise by about 7 per cent a year in each of 2010 and 2011. There is a tendency to underestimate price increases, so this forecast could prove low, according to Central 1. The last few months have seen some previously shelved real-estate projects – including Jameson House, an office-condo tower in downtown Vancouver – get back on track. That trend will show up in housing starts, predicted to rebound by nearly 50 per cent in 2010. The pending introduction of the HST is expected to result in a spike in housing starts around mid-2010, followed by a drop-off and a resumed trend upward.

Big city, big prices

The sales upturn is expected to be much stronger in metropolitan markets such as Vancouver and Victoria than in more resource-dependent areas such as the Northeast or the Kootenays. For 2009, Multiple Listing Service residential sales are forecast to jump by 45 per cent in Vancouver and 25 per cent in Victoria, but shrink in southeastern and northern parts of the province. Small gains are forecast in the Okanagan and Kamloops markets. Next year, sales momentum is expected to pick up in markets that have been lukewarm in 2009, while tapering off in cities. Gains between 30 per cent and 50 per cent are likely in the Okanagan, northeastern and Vancouver Island markets outside of Victoria. Markets in northeastern B.C. are expected to perk up in 2011 as a result of energy-sector activity.

Strong demand has led to a steady rise in Greater Vancouver home prices compared to last year.

Over the last 12 months, the MLSLink® Housing Price Index (HPI) benchmark price for all residential properties in Greater Vancouver increased 6.8 per cent to $553,702 from $518,668 in October 2008.

Click here to read the full report.

Vancouver has the hottest real estate market in the country, according to figures released Thursday by the Canadian Real Estate Association.

Quarterly sales increases of 11 per cent in Toronto and 19 per cent in Calgary were topped by a 34-per-cent jump in Vancouver.

It’s the biggest year-over-year increase since early 2002, the association said.

Prices and demand are also on the way up in some sectors of the Vancouver market.

One home up for re-sale on the city’s east side tells the story.

The home — on Prince Edward Street near East 21st Avenue — isn’t officially showing until this weekend, but is already generating strong buyer interest.

It will list for $1.27 million, but three buyers have already offered to pay full-price without having stepped inside the building.

“Nobody’s seen it. I’m very shocked at that [response],” said owner Leland Burridge.

The average price for a home in Greater Vancouver in September was $610,576, according to the B.C. Real Estate Association.

That’s $100,000 — or nearly 20 per cent — higher than the bottom of the market in November 2008, and not far from the highest prices ever.

The Vancouver market peaked in May 2008, when the average home price hit $624,639.

B.C. average price also climbing

“Low interest rates have really had an impact on the marketplace,” said Scott Russell of the Greater Vancouver Real Estate Board.

Some parts of the city have been seeing unprecedented prices, such as the Grandview and Mount Pleasant area in East Vancouver, where prices are six per cent above the 2008 peak.

“We’ve had 36 houses sell for over a million [dollars], and 19 have done that in the last six months,” said realtor Darryl Sjerven.

The average price across the province has also jumped.

The B.C. average price of a home has climbed from its low in November 2008 of $395,687 to $474,169 in September 2009 — an increase of 20 per cent.

On July 23, 2009, the provincial government announced plans to implement a Harmonized Sales Tax (HST).  If approved this tax will come into effect July 1, 2010. 

How does the HST impact our daily lives?  Here’s a link to the province’s website which explains the tax and its impact.

Globe and Mail Update and The Associated Press Published on Thursday, Oct. 01, 2009 7:21AM EDT Last updated on Thursday, Oct. 01, 2009 5:41PM EDT

Real estate markets around the world are showing tentative signs of stability and this, in turn, will boost broader economic activity, Bank of Nova Scotia said Thursday.

“Home ownership is a crucial sector of national economies and an important source of wealth for many households, influencing spending, saving and borrowing decisions,” Adrienne Warren, the bank’s senior economist, said in a report on global real estate trends.

“It also has significant spillovers to other domestic industries, including retail sales, finance and insurance, and a range of professional services (legal, engineering) and household services (landscaping, moving, cleaners),” she wrote.

The report came as fresh numbers released Thursday in the United States provided yet more evidence that the U.S. real estate market is healing.

The volume of signed contracts to buy previously occupied homes in the United States rose for the seventh straight month in August as buyers rushed to take advantage of a tax credit for first-time owners that expires at the end of November.

The National Association of Realtors said its seasonally adjusted index of sales agreements rose 6.4 per cent from July to 103.8. It was the highest since March 2007 and 12 per cent above a year ago. Economists surveyed by Thomson Reuters expected the index would rise to 98.6.

Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of future sales. However, new rules for home appraisals and rigid lending standards have scuttled many sales agreements recently.

A separate U.S. government report Thursday showed construction spending rose in August as housing leaped at the fastest pace since 1993.

Scotiabank said it believes the improving sentiment in global real estate markets is sustainable. “The firming in pricing is evidence of growing confidence in the sustainability of the fledgling global economic recovery.”

Historically low borrowing costs, increased affordability and home-buyer tax incentives in a number of countries have underpinned this “modest revival” in housing demand, the bank said.

“Indeed, signs of a bottoming in home prices are likely now bringing some fence-sitters off the sidelines,” Ms. Warren said in her report.

“Real home prices increased in a number of major developed economies in the second quarter of 2009, including Canada, Australia and the United States,” Ms. Warren said.

“Prices were still falling in many other markets, including the U.K., France and Spain, but generally at a slowing rate. For the most part, however, real home prices are still lower relative to a year ago.”

Scotiabank added that, while not as strong as the resale housing revival, new home building in Canada is improving.

“On a trend basis, housing starts are running just over 140,000 annualized units, up from a spring low of around 120,000,” the report said. “Most regions are showing gains, with the largest improvement in Canada’s four western-most provinces.”

Still, Scotiabank cautioned, the recovery will be gradual.

“The rebound in housing activity will be constrained, in part, by a generally more cautious borrow and spend mentality, with weakened household finances leading to a renewed focus on reducing debt and rebuilding savings,” Ms. Warren said.

“Labour market conditions are beginning to stabilize, but unemployment rates remain high and are expected to be slow to decline. A more cautious lending environment is expected to persist as financial institutions around the world recapitalize their balance sheets.”

Macdonald Realty, in conjunction with Offsetters Carbon Neutral Society, offers our clients the ability to make all of their real estate transactions Earth friendly. Greenhouse gas emissions are an unfortunate by-product of many of today’s commercial activities. A real estate deal is no exception. Through our partnership with Environment Canada accredited Offsetters, we give you the opportunity to ensure your transaction is ‘Carbon Neutral’.

News

Announcing the opening of the new Macdonald Realty Whistler office

“Worldwide, Whistler is known to be the All Season Vacation Capital of the Pacific Northwest.” Sam Stoddart, Managing Broker Ph: 604-898-1010 Fax: 604-898-1400

Nestled in the spectacular Coast Mountains of British Columbia, and just 120 km north of Vancouver, Whistler resort provides a year round west coast mountain lifestyle. Whistler and Blackcomb Mountains offer the largest terrain of any ski area in North America, with large alpine bowls and forested glades, expert grooming, and ski runs that last forever.

Whistler is much more than an internationally renowned four season destination resort. It is also a vibrant mountain town with thousands of long-term residents. This growing community features a wide range of schools, a new library, many arts and cultural activities, local clubs and groups, and incorporates a high degree of political and environmental awareness.

As the Official Alpine Skiing Venue for the 2010 Olympic and Paralympic Winter Games, Whistler is the perfect real estate location for you, whether you are looking for an investment property or a new place to call home. Macdonald Realty Whistler can help you select from the wide range of real estate products (quarter ownership, condos, townhomes, chalets and luxury homes) that are available.

Shauna O’Callaghan says:
“After selling real estate in Whistler for 12 years, I’m very excited to be involved in the Macdonald Realty Whistler office. Macdonald Realty has a huge presence and far reaching network in the Lower Mainland and across Western Canada. Another great advantage is that Macdonald Realty has strong brand alliances, including: Leading Real Estate Companies of the World, Luxury Portfolio, Who’s Who in Luxury Real Estate, MacGreen Earth Friendly Real Estate and our own project marketing and commercial division”