February 2011

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There are ways that property owners and home buyers can save money. On February 25th, 2011 the Vancouver Sun created a list of the Top 25 Grants and Rebates which I have adapted to only include those available in the Kamloops area.


Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time. For more information click here. Enter ‘Home Buyers’ Plan’ in the search box.


New home buyers can apply for a rebate of the federal portion of the HST (the 5% GST) if the purchase price is less than $350,000. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. For more information click here.  Enter ‘RC4028′ in the search box.


Buyers of new or substantially renovated homes priced up to $525,000 are eligible for a rebate of 71.43% of the provincial portion (7%) of the 12% HST paid to a maximum rebate of $26,250. Homes priced at $525,000+ are eligible for a flat rebate of $26,250. For more information click here.


Landlords buying new or substantially renovated homes are eligible for a rebate of 71.43% of the provincial portion of the HST, up to $26,250 per unit. Click here for more info.


Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for homes priced up to $450,000. For more information click here.


This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15% in 2010) x $5,000. For the 2010 tax year, the maximum credit is $750. For more information click here.


Reduces school property taxes by up to $570 on properties with an assessed value up to $1,150,000. For 2011, the basic grant is reduced by $5 for each $1,000 of value over $1,150,000, and eliminated on homes assessed at $1,264,000. An additional grant reduces property tax by a further $275 for a total of $845 for seniors, veterans and the disabled. This is reduced by $5 for each $1,000 of assessed value over $1,150,000 and eliminated on homes assessed at $1,319,000+. For more information click here.


Property Tax Deferment Program for Seniors. Qualifying home owners aged 55+ may be eligible to defer property taxes. Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to defer property taxes. Property Tax Deferment Program for Families with Children. Qualifying low income home owners who financially support children under age 18 may be eligible to defer property taxes. For more information click here and enter ‘Property tax deferment’ in the search box or contact your municipal tax office.


This federal program provides financial aid to qualifying low-income home owners to repair substandard housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available for seniors, persons with disabilities, owners of rental properties and owners creating secondary and garden suites. For more information click here.


Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient mortgage or make energy saving renovations. For more information click here.


Financial institutions offer a range of mortgages to home buyers and owners who make their homes more energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an RBC Energy SaverT Mortgage, may qualify for a rebate of $300 to their RBC account. For more information click here.


Financial institutions offer ‘green’ loans for home owners making energy efficient upgrades. Vancity’s Bright Ideas personal loan offers home owners up to $20,000 at prime + 1% for up to 10 years for ‘green’ renovations. RBC’s Energy Saver loan offers 1% off the interest rate for a fixed rate installment loan over $5,000 or a $100 renovation on a home energy audit on a fixed rate installment loan over $5,000. For information visit your financial institution.


Home owners improving the energy efficiency of their homes may qualify for cash incentives through this provincial program provided in partnership with Terasen Gas, BC Hydro, and FortisBC. Rebates are for energy efficient products which replace gas and oil furnaces, pumps, water heaters, wood stoves, insulation, windows, doors, skylights and more. The LiveSmart BC program also covers $150 of the cost of a home energy assessment, directly to the service provider. For more information click here.


Home owners and residential landlords buying heating fuel receive a BC government point-of-sale rebate on utility bills equal to the provincial component of the HST.


Mail-in rebates of $25 – $50 for purchasers of ENERGY STAR clothes washers, refrigerators, dishwashers, or freezers until March 31, 2011, or when funding for the program is exhausted. For more information click here.


This ongoing program rebates BC Hydro customers $30 to turn in spare fridges in working condition. For more information click here.


Pay no HST when you buy ENERGY STAR high-performance windows and doors. This offer is available until March 31, 2011.


To save energy, BC Hydro offers rebates including 10% off an ENERGY STAR cordless phone. Check for new offers and for deadlines. For more information click here.


A range of rebates for home owners include a $50 rebate for upgrading a water heater, $150 rebate on an Ener-Choice fireplace (both good to March 31, 2011) and a $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating system (good to Feb. 29, 2012). For more information click here and in the search box enter ‘rebates’.


For commercial buildings, provides a cash rebate of up to 75% of the purchase price of an energy efficient boiler, for new construction or retrofits. For more information click here and in the search box enter ‘gas efficient boiler program.

Link (Story removed)

 Brocklehurst Kamloops BC Real Estate 867 Lolo StreetBeautifully updated modern Santa Fe style Brock home in a cul-de-sac. 1 bedroom inlaw suite, basement could be a 2 bedroom. Recent updates include kitchen, all appliances, bathrooms, flooring, all windows, roof 5 years old, furnace, hot water tank, electrical, plumbing, paint inside & out, internal & external doors, soffits, gutters, landscaping – new patios (3), pond with waterfall & so much more. The master bedroom has a huge 6×12 walk-in closet & large jetted tub. There is a private deck off of the master. All tile flooring throughout. Basement suite all done as well. Shared laundry. Seller currently runs a dog grooming business. Shed in yard & drive through access for a potential shop. Huge lot! There isn’t anything left to update!

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

On Saturday, February 26th and Sunday, February 27th, 2011 open houses will be held in Aberdeen, Batchelor Heights and Pineview Valley.

Pineview Valley Kamloops Real Estate 1927 Englemann Crt Saturday, February 26th, 2011: 11:00-12:30 1927 Englemann Court, Pineview Valley, $439,900

Beautiful two-storey home located in a quite cul-de-sac in Pineveiw Valley. The main floor features Acadian Walnut hardwood floors, vaulted ceilings, slate fire place, and a bright dining room. more

Batchelor Heights Open House 5-930 Stagecoach Drive Saturday, February 26th, 2011: 1:00-3:00: 5-930 Stagecoach Drive, Batchelor Heights $339,900

Stunning three bedroom and den townhome with TONS of custom upgrades. Located in the desirable Ridge at Saddleback development and perfect for first time home buyer or retiree. Many of the upgrades include.. more

west highlands kamloops aberdeen real estate 2249 linfield  Sunday, February 27th, 2011: 1:00-3:00: 2249 Linfield Drive, Aberdeen, $429,900

This brand new view home is located in Aberdeen’s newest subdivision Aberdeen Highlands. It is located right beside a golf course and elementary school. more

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

This report was released by the British Columbia Real Estate Association on February 23rd, 2011.

Vancouver, BC – February 23, 2011. The British Columbia Real Estate Association (BCREA) released its Housing Forecast for the first quarter of 2011 today.

BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 8 per cent from 74,640 units in 2010 to 80,900 units this year, and increase another 4 per cent to 83,950 units in 2012.

“British Columbia housing markets are returning to  normalcy after two years of volatility,” said Cameron Muir, BCREA Chief Economist. “Employment and population growth will fuel consumer demand over the next two years. However, higher mortgage interest rates and tighter credit conditions for low equity home buyers will limit home sales to below the ten-year average of 87,600 units.”

“Total active residential listings in the province declined 14 per cent since last spring. However, the inventory of homes for sale is expected to edge higher as the number of new listings to the market advances during the first two quarters of 2011,” added Muir. “Regional market differences continue in the province, with Vancouver trending into a seller’s market, while the Okanagan, Kootenay and Kamloops markets trend from a buyer’s market toward balanced conditions.”

The average MLS® residential price is forecast to increase 2 per cent to $517,000 this year and remain relatively unchanged in 2012, albeit declining by 0.4 per cent to $515,400.

This article appeared on The Daily Commercial News and Construction Record on February 21st, 2011.

Canada’s national housing agency says the pace of new-home construction will stabilize in 2011 and 2012 after trending lower at the end of last year.

Canada Mortgage and Housing Corp. predicts between 157,000 and 192,000 new housing units will be built this year, with the number remaining virtually the same in 2012. In its first quarter housing market outlook, released Feb. 17 it said economic growth and lower unemployment will prop up the need for new homes.

“This, in conjunction with relatively low mortgage rates, will continue to support demand for new homes. Housing starts will remain in line with long-term demographic fundamentals over the course of 2011 and 2012,’’ Bob Dugan, chief economist for CMHC said.

Dugan said listing prices are expected to keep pace with increases in inflation.

The corporation said sales of existing homes should be in the range of 398,000 and 485,000 this year.

In its January figures, CMHC said Canada was on track to build 170,400 units of housing this year, about 10 per cent less than in 2010.

The housing market was unusually active in late 2009 and early 2010 due to a catch-up from the recessionary levels in late 2008 and early 2009 and historically low interest rates that kept the cost of borrowing low.

The real estate market kicked off last year on a tear as buyers rushed into the market in advance of higher interest rates, new mortgage rules and a new harmonized tax regime in two provinces.


On Saturday, February 19th, 2011 the open houses will be held in Aberdeen and North Kamloops.

North Kamloops House For Sale 451 Alexander Ave

Saturday, February 19th, 2011: 12:00-1:30: 451 Alexander Avenue, North Kamloops, $259,900

Cute North Kamloops home close to shopping, park & transportation. Some updates done such as flooring & bathroom sink. Pool has new liner & pump in 2010. 70 amp service. Room for a detached workshop. more

Kamloops BC Real Estate 1189 Howe Rd Aberdeen

Saturday, February 19th, 2011: 2:00-3:30: 1189 Howe Road, Aberdeen, $309,900

This Aberdeen doll house has had numerous updates over the past couple years. All the flooring (porcelain tile and laminate) and windows were recently replaced, new hot water tank and it has a fresh coat of paint throughout. more

Click here to view more pictures of these homes.

To view all homes for sale in Kamloops click here.

This article appeared in the Vancouver Sun on February 15th, 2011 and was written by Brian Morton.

B.C.’s real estate market appears to be morphing into two categories: Metro Vancouver and the rest of the province.

While Metro Vancouver saw a strong increase in the average home price over the past year – up 19.6 per cent in January compared to January 2010, from $638,000 to $763,000 — that’s not the case for most other regions of B.C., according to a survey released Monday by the B.C. Real Estate Association, which represents 11 real estate board across the province and 18,000 realtors.

Except for Metro Vancouver, the Fraser Valley and – for this month, at least – the Kootenays, the province has seen average prices fall, in some cases substantially, in every region in January compared to the same month last year.

“There’s certainly a divergence in the market [between] the south coast and the rest of the province,” BCREA chief economist Cameron Muir said in an interview Monday. “There’s very strong market activity in parts of Vancouver. And that’s skewing the average price higher.”

Despite the difference between Metro Vancouver and the rest of the province, Muir said the numbers can be misleading because the huge increase in Metro Vancouver’s average price was largely because of a surge in purchases of luxury, executive homes in Richmond and the west side of Vancouver.

He said the “benchmark” price — the price of a typical home in Vancouver — actually rose just a bit more than two per cent over the year. He did not have information on benchmark prices for elsewhere in the province.

According to the BCREA survey, the average price of a home in B.C. rose 11.5 per cent, to $548,183, in January compared to January, 2010.

The BCREA also said that Multiple Listing Service sales climbed seven per cent in January from December 2010, on a seasonally adjusted basis.

Compared to January of last year, home sales were down 10 per cent, to 4,137 units.

The survey noted that the inventory of homes for sale remained below 47,000 units for the third consecutive month in January, down 14 per cent from the spring of last year.

While the south Okanagan saw prices drop 8.9 per cent, from $310,000 to $283,000, the Okanagan Mainline (from Kelowna north) saw prices drop 2.9 per cent, from $387,000 to $376,000.

Vancouver Island prices dropped 5.7 per cent, from $328,000 to $309,000, while Victoria prices fell 4.5 per cent, from $510,000 to $486,000.

B.C. Northern prices fell 4.6 per cent, from $215,000 to $205,000, Chilliwack dropped five per cent, from $289,000 to $275,000, and Kamloops prices dropped 1.5 per cent from $314,000 to $309,000.

Powell River saw the steepest drop in the province, 29.6 per cent, from $301,000 to $212,000, while Kootenay bucked the trend in January with a 4.7-per-cent increase, from $264,000 to $276,000.

Muir said Vancouver is doing better because its economy is more diversified that the rest of B.C. and also has the advantage of significantly more immigrants, many of whom are in the investor class and typically buy a house upon arrival.

Muir noted that the Okanagan is in buyers’ market conditions, with 22 months of housing supply, meaning that it would normally take 22 months to use up the existing inventory.

“In Vancouver, it’s 6.1 months of supply. A balanced market is typically five to seven months.”

As well, he noted, one of the Okanagan’s main source of buyers – Alberta investors – has dried up, with many looking south of the border for cheaper recreational properties.

Carol Frketich, B.C. regional economist for Canada Mortgage and Housing Corp., said in an interview that while a one-month snapshot doesn’t tell the whole story, Metro Vancouver has generally done better than the rest of the province. “And Vancouver’s employment has been stronger than the provincial average. That provides a solid basis for the housing demand.”

Frketich noted that housing starts in the Vancouver CMA (census metropolitan area) saw a 57-per-cent hike in January to 1,436 from 917 in January 2010, with the Abbotsford and Kamloops CMAs also saw increases.

On average, urban centres saw a 15-per-cent rise over that period, although Frketich cautioned that one month doesn’t indicate a trend.

Meanwhile, Muir said he expects home sales to moderate this year as higher interest rates push mortgages up, impacting affordability.

He said there should be a “moderate improvement” in interior home prices in 2011.

Juniper Heights Kamloops BC House 2665 Qu'appelle Blvd,

This solid Juniper Ridge home has 4 bedrooms and 3 bathrooms. There is over 2,000 square feet of living space and numerous updates which include, kitchen, bathrooms, flooring, paint, baseboards and more. This home sits on a lot over 10,000 square feet. There is drive through access to the back yard, two gas fire places, built in vacuum, central A/C, under ground sprinklers, RV parking and single car garage.

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

Kamloops Real Estate 451 Alexander Ave Cute North Kamloops home close to shopping, park & transportation. Some updates done such as flooring & bathroom sink. Pool has new liner & pump in 2010. 70 amp service. Room for a detached workshop. Lots of potential. 3 bedrooms, 1 bathroom & 3/4 basement with workshop. Nice large patio in back with veggie garden. Fully fenced yard.

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

CBC News posted this article on Thursday, February 10, 2011. Click here for the full RBC Resale Housing Market Outlook.

Canada’s housing market is likely to be far more stable in the next two years than it has been for the last two, the Royal Bank of Canada said in a report on Thursday.

The housing market since 2008 was shaped by truly exceptional events and factors such as the global financial crisis, a major recession that destroyed nearly 430,000 jobs in Canada, cuts in policy interest rates to the lowest levels in a generation, the introduction of a harmonized sales tax in Ontario and British Columbia, and the tightening of mortgage rules, RBC’s senior economist Robert Hogue said.

“With the economy (both global and national) on a more solid footing now, the road ahead will be less bumpy,” he said.

But there will be regional variances, the bank expects. With Saskatchewan, Alberta and Manitoba seen leading economic growth among the provinces in 2011, demand for housing will similarly outpace that of other provinces. A slowing housing market is possible in areas east of Manitoba.

The bank expects home prices to rise in all provinces, but at a very slow pace in most cases in 2011.

On average, the bank is forecasting price gains of 0.5 per cent in 2011 and 1.3 per cent in 2012. That compares with a very strong, but unevenly distributed, 8.3 per cent gain in 2010.

“In our opinion, the Canadian housing market is on path towards mostly flat levels of resale activity and minimal price increases this year and next,” Hogue wrote.

Earlier this week, the Canadian Real Estate Association forecast the national average price is now expected to rise by 1.3 per cent in 2011 to $343,300.


Open houses in Kamloops on Saturday February, 12th and Sunday, February 13th 2011 will be held in Aberdeen.

Kamloops Aberdeen Real Estate 2090 Van Horne Drive

Saturday, February 12th, 2011: 11:30-1:00: 2090 Van Horne Drive, Aberdeen, $379,900

Private & spacious 3 level split home in Aberdeen. There are 5 bedrooms & 3 bathrooms, including 1 ensuite. Recent updates include outside vinyl “chic” paint with a 20 year warranty, tile flooring & 95% efficiency furnace. more

Kamloops BC House For Sale 1189 Howe Rd Aberdeen

Saturday, February 12th, 2011: 1:15-2:45: 1189 Howe Road, Aberdeen, $314,900

This Aberdeen doll house has had numerous updates over the past couple years. All the flooring (porcelain tile and laminate) and windows were recently replaced, new hot water tank and it has a fresh coat of paint throughout. more

Home For Sale Kamloops 26-1555 Howe Road Home For Sale Kamloops

Sunday, February 13th, 2011: 11:30-12:30: 26-1555 Howe Road, Aberdeen Glen Village, $199,900

Spacious three bedroom home in Aberdeen with one full bathroom. Recent updates include roof, all windows, hot water tank, paint, kitchen appliances and more. The rec room could easily be converted to a fourth bedroom or office. more

Click here to view more pictures of these homes.

To view all homes for sale in Kamloops click here.

This article appeared in Kamloops this Week on February 11th, 2011 and was written by Jeremy Deutsch.

Kamloops Real Estate MLS Listings SoldThough many of the real-estate conditions in Canada appear to be bipolar, the Tournament Capital is expected to be the bastion of stability in the market. The Kamloops and District Real Estate Association (KDREA) is predicting no major swings in the market — up or down — in 2011.

“It’s certainly not a hot market,” said Dick Pemberton, KDREA president. “Stable is the best term to describe it.” He makes his prediction despite a dip in sales last month.

Residential sales in the area fell by 18 per cent in January to 93 units, from 114 the previous January in 2010. The majority of the sales still falling in between the $200,000- to $400,000-price range.

However, Pemberton said real-estate agents in the region have noticed a dramatic increase in the number of people stopping in at open houses in the last few weeks, leading to a more optimistic forecast for the spring and summer.

Some real-estate experts are predicting house prices across Canada will fall by as much as 25 per cent in coming years, while other reports have the Vancouver housing market heating up, similar to last decade. But, tighter mortgage rules recently introduced by the federal government will no doubt keep some buyers out of the market.

Ottawa has lowered the maximum amortization period for a government-insured mortgage to 30 years from 35. The change is meant to help lower consumer debt. It’s a move applauded by the KADREA members, which sees it as a positive change in the long term. “Given the economy right now, we felt it was a prudent move and won’t have a significant impact on the market place,” Pemberton said. He added it takes borderline buyers out of the picture until they’re in a better position to purchase a home.

With no major increase in interest rates in the horizon, Pemberton suggested it’s still a good time to get into the market. Homes sales weren’t the only stats to take a dip last month.

The number of single-family permits issued by the city also dropped to just four in January, from 13 the previous year. The city also issued $5.4 million in commercial-building permits for the month, but the combined total of the two sectors failed to match the $13 million in overall permit activity from January 2010. It’s a slow start for the city’s building-permit department, which handed out $191 million worth of permits in 2010.


This article appeared in Kamloops This Week on January 27th, 2011 and was written by Jeremy Deutsch.

Sun Peaks Golf Course KamloopsAs homeowners in much of the province, including Kamloops, saw their property values rise in 2010, there is at least one real-estate sector that wasn’t quite as fortunate. Many recreational properties were down in value last year — and Sun Peaks Resort was not spared.

According to BC Assessment, residential properties in the resort municipality dropped in value by an average of 2.5 per cent. Whistler, the only other resort municipality in B.C., also saw similar decreases in residential-property values.

Graham Held, a deputy assessor with BC Assessment, noted the values are based on the market and incorporation wouldn’t have had any effect on assessments. “It’s just what the sales are telling us,” he said. There are 1,600 properties at Sun Peaks on BC Assessment’s rolls, including 425 single-family homes.

The resort became a municipality last summer and 2010 marks the first year it is on the tax rolls as a municipality. But the drop in value is neither a surprise nor major concern for Sun Peaks Mayor Al Raine. He feels the two per cent decline isn’t unreasonable considering the economic environment.

Raine noted recreational properties tend to take a bigger hit in value than residential properties when there is a downturn in the economy, adding some units in the village were sold for very low prices.

He also suggested a couple of other factors for the decline, including the harmonized sales tax, in which an HST credit isn’t offered on recreational properties, and that units were being built faster in the resort than the demand supported. “Quite frankly, I’m happy with stable prices for these days,” Raine said. He said real-estate agents have told him they expect demand to pick up in the spring. Raine said he still considers Sun Peaks “a good place to invest and live.”

Last year, a home in Sun Peaks sold for $2.2 million, besting the previous most-expensive house by $700,000. Another home was recently listed for $4.3 million, which will be a new record if sold. For the second year in a row, the majority of Kamloops homeowners saw a modest increase in their property assessments.

According to BC Assessment, the property owner of an average single-family dwelling — assessed at $309,000 — likely noticed their property value increase by 4.7 per cent.


This article appeared on The Record on February 9, 2011 and was written by Chuck Howitt.

While mortgage and interest rates are inching higher, the major banks aren’t likely to keep pushing them up if they sense household debt is too high, an economist told local real estate agents Wednesday.

Two large banks announced mortgage rate increases this week, but the banks will likely refrain from further increases if they jeopardize the economic recovery, said Paul Ferley, assistant chief economist for RBC.

The Bank of Canada became alarmed when debt-to-income ratios, fuelled by a long period of low mortgage rates, continued to rise in Canada during the recession while dropping in the U.S., Ferley said.

Traditionally those ratios have been lower in Canada, but now they are about equal in both countries, he told about 150 agents at Coldwell Banker Peter Benninger Realty.

While mortgage debt continues to be worrisome, Ferley doubted Canada is on the verge of a housing-price correction. In the late 1980s, when the last housing bubble burst, mortgage payments were growing much more quickly than incomes, he said.

The same trend has not been occurring in recent years, Ferley said.

Housing prices jumped about 20 per cent coming off the recession, but they have since begun to follow the historical pattern of more gradual increases. He expects that flattening trend to continue.

Looking at the North American economy as a whole, economists no longer fear a double-dip recession, Ferley said. The economic recovery “will be gradual, but sustained,” he said.

While a sudden eruption in the Egyptian crisis could send oil prices soaring and destabilize the world economy, the U.S. economy is gaining steam, he said. But the private sector needs to pick up the slack now that government stimulus is being turned off, he added.

The Canadian economy, while still closely tethered to the U.S. economy, is well positioned because commodity prices, particularly oil prices, remain at historically high levels, he said. He expects oil to remain at the robust price of around $90 a barrel because of demand from countries such as China and India.

High commodity prices are not necessarily good news for Ontario’s economy, which relies more on manufacturing and a healthy U.S. economy, Ferley said.

On the positive side, auto sales have climbed past 12 million units a year in the U.S. after dropping to about nine million during the recession and manufacturing has picked up, though just modestly, he noted.

In Waterloo Region, manufacturing accounts for 22 per cent of the labour force, higher than the provincial average of 14 per cent, he noted.

This is a concern, but strong building-permit activity particularly in the commercial and institutional sectors and the rebound in housing starts and employment have brightened the outlook for the local economy, he said.


TD Economics released a special report on February 9th, 2011. This report assesses the financial vulnerability of households across Canada. Below, I have included British Columbia specific information from the report. Click on the images below to enlarge.

The main highlights of the report are:

  • The focus nationally on household debt has raised questions about which regions of the country face the most significant challenge.
  • TD Economics has constructed an index of financial vulnerability, which takes into account six key metrics of household financial position.

    TD Economics Household Financial Vulnerability Index

    Household Financial Vulnerability Index

  • The index is not a predictor but is aimed at capturing which regions are more vulnerable in the event of an unexpected adverse economic shock, such as a housing market downturn, a rise in the unemployment rate, or a spike in interest rates.
  • We find that households in British Columbia, Alberta, Ontario and Saskatchewan are the most vulnerable, followed by the Quebec and the Atlantic Region. Meanwhile, Manitoba is the least vulnerable.
  • Despite growing vulnerability across regions, we do not think that a household debt crisis is in the making in any region.

Based on our analysis, we find that households in British Columbia, Alberta, Ontario and Saskatchewan are the most vulnerable. Following next are the Atlantic region and Quebec, while Manitoba is the least vulnerable. That being said, risks related to household finances have been rising broadly across all regions over the past few years, as households have responded to extremely favourable borrowing conditions. With higher interest rates on the horizon set to boost the cost of servicing debt, this upward trend in vulnerability is almost certain to continue over the next 1-2 years.

All regions increasingly vulnerable

Some of the common trends:

  • Vulnerability has been increasing from coast to coast over the past two years– prior to 2009, trends in the vulnerability index were mixed across the country, with some regions experiencing sharp increases while others registered declines. However, over the past two years, vulnerability has headed higher right across the board, and for the majority of regions, increases in the index began to accelerate in 2007.

    Snapshot of Canadian Household Debt indicators by region 2011

    Snapshot of Canadian Household Debt Indicators by Region - click to enlarge

  • Rising household debt-to-income and home price to- income ratios have been the major catalysts driving up vulnerability – the debt-to-income ratio has followed an upward track in all regions since the mid-part of the 2000’s, reflecting in large part the strength of housing markets and the significant easing in mortgage insurance rules in late 2006. These home price increases supported the asset side of the ledger and mitigated the upward trend in the debt-to asset ratios over the past half decade.
  • Debt-service ratios have been falling and remain in a comfortable range – despite rising indebtedness, the falling cost of borrowing has been pulling down the share of income households have been shelling out to service obligations. Low interest rates have also helped to keep a lid on the share of vulnerable households in recent years.
  • All regions will experience a substantial increase in vulnerability over the next few years – our adjusted index shows that even assuming that the debt-to-income ratio holds constant at current levels, which would seem unlikely, vulnerability is set to rise across the board in lockstep with short-term interest rates.

Most vulnerable

Household Debt to income ratio BC vs Canada 2011

Household Debt to Income Ratio: BC vs. Canada

Reflecting the lofty costs of home ownership, households in British Columbia record the highest vulnerability. In particular, B.C. residents on average register the highest debt-to-income ratio, debt-service cost, and greatest sensitivity to rising interest rates. What’s more, B.C. is the only province where the average savings rate is negative.

None of this is new, however, as the province has systematically been the most vulnerable since the start of our data series in 1999. The structural nature of this challenge suggests that there maybe factors at play that are not being captured in the aggregate data. For example, the province’s relatively large economic reliance on its service sector and self-employment – two areas that tend to have higher-than-average incidences of non-reported income – might be superficially driving down income and driving up the various sub-index readings.

In addition, B.C. households appear to have adopted coping mechanisms, such as renting out basement suites, which might not be fully factored into the income side. Even if these factors are part of the story, they don’t address the fact that British Columbia’s index level has recorded the second fastest rate of increase among the provinces over the past half decade.

Higher interest rates over the next few years threaten to leave as many as one in ten households in B.C. in a position of financial stress. On the plus side, rapidly-appreciating home prices in the province has left the debt-to-asset ratio – a metric of household leverage – below the Canadian average. Still, with the home price-to-income ratio pointing to some ongoing over-valuation in the housing market, stable B.C. home values are far from assured.

The Canadian Real Estate Association released this article on February 8th, 2011. Click on the images below to enlarge.

OTTAWA – February 8, 2011 – The Canadian Real Estate Association (CREA) has revised its 2011 forecast for home sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards and Associations, and extended it to 2012.Canadian Real Estate Assoc. Sales Activity Historical & Forecast 2011

“Home buyers recognize that low mortgage interest rates represent a once in a lifetime opportunity. At the same time, they expect that rates will rise, so they’re doing their homework in order to understand what it could mean in terms of higher mortgage payments down the road before they make an offer,” said Georges Pahud, CREA President. “The housing market and buyer psychology is different now than it was at the beginning of last year, so buyers and sellers would do well to consult their REALTOR® to understand local market trends.”

The upward revision to CREA’s forecast for 2011 reflects recent improvements in the consensus economic outlook and a further expected improvement in consumer confidence. National sales activity is now expected to reach 439,900 units in 2011, representing an annual decline of 1.6 per cent. In 2012, CREA forecasts that national sales activity will rebound by three per cent to 453,300 units, which is roughly on par with the ten year average.

“Recent additional changes to mortgage regulations will further ensure that buyers don’t buy more home than they can afford when interest rates inevitably rise,” said Klump. “The announcement of the new changes to mortgage regulations will likely bring forward some sales into the first quarter that would have otherwise occurred later in the year, particularly in some of Canada’s more expensive housing markets. This is expected to produce a milder version of the volatility in sales activity that we saw last year which resulted from additional transitory factors.”

Three transitory factors contributed to volatility in sales activity last year: changes in mortgage regulations announced last February, the early withdrawal by the Bank of Canada of its conditional commitment to keep interest rates on hold until the second half of 2010, and the introduction of the HST in BC and Ontario during the summer of 2010.

CREA expects that home sales activity will gain traction after dipping in the second quarter as the economic recovery and job growth continue, incomes grow, and consumer confidence further improves. “Even though mortgage interest rates are expected to rise later this year, they will still be within short reach of current levels and remain supportive for housing market activity. Strengthening economic fundamentals will keep the housing market in balance, which will keep home prices stable,” said Klump.

The national average home price is forecast to rise 1.3 per cent in 2011 and 2012, to $343,300 and $347,900 respectively. Average price is expected to rise modestly in most provinces, reflecting the continuation of a healthy balance between supply of, and demand for, homes listed for sale. Although the supply of new listings is expected to trend higher, the expected continuation of sellers’ market conditions in Manitoba is forecast to result in a bigger percentage increase in average price in 2011 and 2012 compared to other provinces.

Canadian Real Estate Assoc. Residential Market Forecast 2011* Provincial weighted average price for Quebec; does not affect unweighted national average price calculations. Information on Quebec’s weighted average price calculation can be found at:


This article appeared in the Globe and Mail on February 3, 2011. It was written by Steve Ladurantaye the Globe and Mail’s real estate reporter.

Kirsten Mason Kamloops Real EstateHigher interest rates could “easily” cause Canadian home prices to collapse, Capital Economics warned in a bleak report that suggests the housing market is likely to suffer the same sort of crash that has plagued countries such as the United States. The report suggests that house prices in Canada have climbed at the same pace as the United States, but have not fallen at the same rate. In the United States, some markets have seen prices fall as much as 50 per cent through the recession.

As the Bank of Canada raises interest rates, mortgages will become more expensive for consumers. Add inflation to the mix, and Capital Economics predicts prices could fall 25 per cent over the “next few years.”

“Even small rises in official interest rates have been shown to have a big effect on homeowner confidence in other countries under similar circumstances as they can change perceptions toward the housing market very quickly,” Capital Economics economist David Madani said. “If the Bank of Canada does resume its monetary tightening this year, this could easily prove to be a tipping point for a house price collapse.”

Other market watchers expect higher rates to hinder price gains, but few are calling for as sharp a drop. The Canadian Real Estate Association expects sales to fall 9 per cent this year, for example, but prices are only expected to drop 1.3 per cent. It hasn’t issued a forecast beyond 2011.

Bank of Nova Scotia economist Adrienne Warren said it’s difficult to compare the Canadian situation with the American because Canada’s gains have been based on a strong economy – relatively speaking – as opposed to easy lending.

“We lack the triggers that prompted the U.S. market to crash,” she said. “I think what you see is prices staying flat as incomes rise over the next few years.” Such a scenario could lead to home prices that are flat over the next five years, as personal incomes catch up.

“I think some markets may be overvalued and they can’t stay that way forever,” she said. “If you look at the longer-term trend in ratios, we could say things are overvalued by about 10 per cent, which is typical at the end of a boom. But there are so many different measures – it’s just safe to say that eventually you see a softening in prices.”

The country’s bank economists have varied short-term forecasts, but there are no expectations among the largest forecasters that a crash is inevitable, or even likely.

Some have suggested drops of 10 per cent may be in order next year as mortgage rates move higher and households struggle to service record debt loads, and the Bank of Canada specifically mentioned the prospect of “a more pronounced correction in the Canadian housing market” as one of three key risks to the country’s economy. However, real estate sales data from the autumn market showed that fewer houses have been listed and prices were largely unchanged from a year ago.

Capital Economics chief concern is that as the central bank raises rates, variable-rate mortgages become more expensive and homeowners could find themselves priced out of their homes. Fixed-rate mortgages are tied to government bond yields, but would move in the same general direction. If a homeowner is already stretched financially, any hike could prove problematic.

However, a survey by the Canadian Association of Mortgage Professionals released late last year showed that Canadians are confident they could shoulder higher mortgage payments without too much difficulty, with 84 per cent saying a $300 monthly increase was no problem.

If prices do fall as far as Mr. Madani predicts, “the knock-on effects to consumer spending and housing investment could be significant and perhaps even strong enough to push the economy into another recession,” he said.

Capital Economics also warns that a crash in prices could cost Canada Mortgage and Housing Corp., which insures high loan-to-value mortgages, a loss of as much as $10-billion.

In January, the federal government shortened the maximum amortization period for mortgages to 30 years from 35 to rein in Canadians from taking on more debt at a time when it is at record highs. While most private sector watchers expect the market to pull back in the second half of this year after a strong two-year run, the Capital Economics call for a 25-per-cent drop is the harshest.

After hitting record highs in May, the Canadian market did slow down, and ground to a halt across most of the country through the summer. Recent data from the Canadian Real Estate Association has many economists predicting a “soft landing,” however, with activity returning at a lower level and prices holding steady rather than rocketing higher each month as they have through the recovery.


East Barriere Lake Waterfront Real EstateThis beautiful lake front property is located on East Barriere Lake in the Sands development and has a private sandy beach. This property has a common water system, septic and electricity. Telephone is also available in this area. This property is a one hour drive from Kamloops, great for power boating, swimming and fishing in the summer; snowmobiling and cross-country skiing in the winter. All access roads are maintained year round. Small bunk house included, 26ft travel trailer not included, but open to offers. Maintenance (strata) fee is $600 per year. Pre-paid lease until 2191.

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On Saturday, February 5th, 2011 the open house will be held in Aberdeen.

Aberdeen Kamloops House For Sale 2255 Linfield Drive

Saturday, February 5th, 2011: 12:00-1:30: 2255 Linfield Drive, Aberdeen, $429,900

This brand new view home is located in Aberdeen’s newest subdivision Aberdeen Highlands. It is located right beside a golf course and elementary school. more

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The Kamloops and District Real Estate Association has released the latest statistics for January 2011. Click on the image below to enlarge.

Comparative analysis by property type January 2011

Kamloops Real Esate Comparatie Analysis by Property Type January 2011

MLS Activity January 2011 Kamloops Real Estate Statistics

Kamloops Real Estate MLS Activity January 2011

Sales by subarea January 2011 Kamloops Real Estate

Kamloops Real Estate Sales By Subarea January 2011

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