July 2011

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On Saturday, July 30th and Sunday, July 31st, 2011 open houses will be held in Brocklehurst.

2070 Pala Mesa Pl Brock Kamloops For SaleSaturday, July 30th, 2011: 11:00-1:00: 2070 Pala Mesa Place, Brocklehurst, $329,900

Tastefully updated solid Brock home in quiet cul-de-sac. 3+1 bedrooms & 2 bathrooms with suite potential recent updates include flooring, appliances, paint, window coverings, baseboards & more.

2108 Greenfield Ave Brock Real Estate KamloopsSunday, July 31st, 2011: 11:00-1:00: 2108 Greenfield Avenue, Brocklehurst, $264,900

Beautifully updated half duplex in Brock near to schools, parks, transportation, rec centre and shopping. Recent updates include heat pump, high efficiency furnace, windows, kitchen, bathrooms, flooring, paint, fencing, deck and more.

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Kamloops House 2149 Grasslands Batchelor Heights Beautiful Batchelor heights home on quiet end of Grasslands with unobstructed river views and a ton of extras. The main floor features a large kitchen and dining room area that leads to the private beautifully landscaped yard with hot tub. The living room has vaulted ceilings and has views up the North Thompson River and surrounding mountains. The master bedroom is spacious and has a large walk in closet and 3 piece ensuite. There are two other bedrooms on the main floor and a lot of closet storage space in all the rooms including the main bathroom. The basement has a bedroom off of the main foyer, a large rec room with gas fireplace, a big 5th bedroom, large storage room, a four piece bathroom and a 9 X 9 laundry room with folding table, laundry sink and storage. The back yard has a pond with waterfall, a large covered hot tub and spacious patio area (cedar & paving stone). The lot goes past the back retaining wall. Heated double garage with 220. In-ground Sprinklers, central A/C (3 ton unit), HE furnace & hot water tank, heavy duty garburator, monitored security system ($28/month) and RV parking. A lot of care and expense went into putting this full package together; don’t pass this great home up.

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On Saturday, July 23rd and Sunday, July 24th, 2011 open houses will be held in Brocklehurst and Westsyde.

927 13th Street Brocklehurst Kamloops PropertySaturday, July 23rd, 2011: 1:00-3:00: 927 13th Street, Brocklehurste, $209,000

Centrally located Brocklehurst home with 2 bedrooms and 1 full bathroom on a private lot. Updates include furnace (5 years), HW tank, 100 amp service, windows, roof and some parts of the bathroom. more

Kamloops For Sale 2211 Greenfield Ave BrockSunday, July 24th, 2011: 1:00-3:00: 2211 Greenfield Avenue, Brocklehurst, $349,900

Spacious, updated Brock home close to Elementary &  Middle Schools, transportation and shopping. This home features a vaulted living room and dining room ceiling, updated kitchen, recently painted inside and out, new flooring, more.

2181 Perryville Pl Westsyde Kamloops HouseSunday, July 24th, 2011: 1:00-3:00: 2181 Perryville Place, Westsyde, $349,900

Immaculate Westsyde home with river views…numerous updates include furnace, hot water tank, central A/C, flooring, kitchen, 2 bathrooms, patio, most windows, external doors, paint, mouldings, more.

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Deb Fehr Dominion Lending Mortgage BrokerDeborah Fehr of Dominion Lending provided this article below that was written by Tom Fennell on Tuesday, July 19th, 2011.

If there’s one question being kicked around the barbecue more than any other this summer, it’s probably this: should I lock in my variable rate mortgage? But with interest rates bouncing around, to the point where they make a mortgage-rate chart look more like the diagram of a rollercoaster, homeowners can be forgiven if they are hesitant.

After all, every time mortgage rates rise, they seem to come back down again. Recently, Royal Bank tried to raise mortgage rates, increasing the cost of its five-year fixed mortgage by 0.15 per cent, only to quietly lower them a few weeks later.

What gives?

On the variable side, rates have been stable, holding at 2.1 per cent for so long it seems like the new normal. They are priced based on the Bank of Canada rate. And with the U.S. economy slowing (Alberta created more jobs than the U.S. did in the last quarter), it’s little wonder that Bank of Canada governor Mark Carney decided not to raise interest rates this week – and it’s doubtful he will anytime soon.

While the variable rate has held steady for months, fixed-rate mortgages are far more difficult to predict. Fixed mortgages are primarily priced off of the five-year bond, and as a result are subject to volatility in the bond market, which is being whipsawed by the European sovereign debt crisis.

As more European countries edge toward default, interest rates have risen on their bonds, in some cases to more than 10 per cent. Many investors, however, fearing widespread defaults, have fled to the safe haven of the U.S. bond market. In the process, that has kept U.S. rates in the 2.3 per cent range, and helped keep mortgages rates low in this country, with a five-year fixed term mortgage going as low as 3.29 per cent.

But these bedrock-low rates could rise quickly if the U.S. does not solve its own debt crisis. President Obama has asked Congress to lift the country’s debt ceiling — the amount the country can borrow to meet its obligations. The Republican-controlled House of Representatives is refusing to grant the increase until Obama makes deep cuts to government expenditures.

They have until Aug. 2 to solve the impasse and if nothing is done, the U.S. will default on the latest round of payments it has to make on its debts. Bond rating agencies have already said they will downgrade U.S. bonds if a default occurs. If that happens, it will drive up interest rates in the U.S. and push rates up on Canadian mortgages in the process.

“If Europe gets into trouble and the U.S. gets into trouble, money will be looking elsewhere,” says Kelvin Mangaroo, founder and president of RateSupermarket.ca. “Interest rates have been bouncing around and we might continue to see that until the U.S. credit situation gets sorted out.”

Could the uncertainty in Europe actually drive interest rates lower in Canada?

If Obama and Congressional Republicans come to an agreement, there could be a sudden flight to quality as investors buy U.S. bonds. That could drive down interest rates on the U.S. five-year bond, and reduce rates on Canadian fixed mortgages.

“There is always the possibility that they could drop a bit still,” said Mangaroo. “They’ve been lower before, so there is no reason that they can’t go back.”

With so much volatility in the market, should you lock in your mortgage? It’s hard to say, but studies have concluded you are better off holding a variable mortgage. Then again, those studies also include periods of extremely high interest rates, but with rates now at historic lows they would only go marginally lower.

In fact, you can purchase a 10-year mortgage for just 4.84 per cent and a 25-year at 8.35 per cent. In effect, you could lock your mortgage costs in at today’s historic lows and that would pay dividends long after the crisis in Europe and the U.S. has passed and rates are rising again.

Whether to lock in or not is the most common question Mangaroo gets at RateSupermarket.ca. About one-third of Canadian mortgages are variable, but Mangaroo says, “It all comes down to risk profile. And interest rates will be going up, so if you’re uncomfortable with that, you should look at a fixed five-year term which is at 3.5 per cent.”

But one thing is certain. If you hold a variable mortgage, you can breathe a little easier knowing Carney won’t be raising rates anytime soon. Ian Lee, director of the MBA Program at Carleton University, says this is because of the ongoing failure by the European leadership to address, let alone resolve, the growing Eurozone debt crisis and the ongoing inability of the U.S. political leadership to seriously address their annual $1.5 trillion deficit and $14 trillion debt.

“This clearly suggests,” says Lee, “that Governor Carney will think many times before raising interest rates now or in the fall.”

Deborah Fehr, Mortgage Consultant, Dominion Lending
P. 250-571-2472 E. ac.gnidnelnoinimodnull@rhefd W. www.dfehr.ca


Link to article

Kamloops Property 2108 Greenfield Ave Brock Real Estate Beautifully updated half duplex in Brock near to schools, parks, transportation, rec centre and shopping. Recent updates include heat pump, high efficiency furnace, windows, kitchen, bathrooms, flooring, paint, fencing, deck and more. Bright open floor plan where family room on main floor could easily be a dining room or mud room. Huge living room,  large bedrooms and spacious rec room (currently used as a 5th bedroom). Large private back yard with storage shed, some new landscaping and is fully fenced. Lots of parking and room for an RV. This great home won’t last!

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Kamloops Mobile Home 211 Universal Way North Perfect senior downsizer in quiet 55+ park. Large living room & kitchen. Cozy family room & good size master with 2 piece ensuite. One additional bedroom for guests. New flooring, newer furnace & most new windows. Roof inspected & in good condition. Comfortable yard & deck to enjoy the nice summer weather. Comes with small garden shed out back.

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To view all homes for sale in Kamloops click here.

This article appeared on CBC.ca on July 19th, 2011.

The Bank of Canada has kept its bench-mark overnight interest rate steady at one per cent, saying the need to keep the country’s economy growing amid the U.S. and European debt crises outweighs the need to slam the brakes on inflation.

In response to the central bank’s decision, the Canadian dollar has gained more than a cent in morning trading.

The Bank of Canada said Tuesday that Canada faces an uncertain international economic situation with European and U.S. debt concerns dominating the fiscal landscape.

“The U.S. economy has grown at a slower pace than expected and continues to be restrained by the consolidation of household balance sheets and slow growth in employment,” the bank said in a press release.

“While growth in core Europe has been stronger than expected, necessary fiscal austerity measures in a number of countries will restrain growth over the projection horizon.”

Thus, while Canada is growing roughly as the central bank had forecast, the country still faces a threat to its slowly-recovering export sales, partly because of weak U.S. economic growth and partly because of a rising Canadian currency.

Tuesday’s rate decision provided further lift for the Canadian loonie. The currency traded at $1.053 US in mid-morning, up from Monday’s Bank of Canada close of $1.043 US.

Growth versus inflation

Economists had split as to whether the bank would raise its overnight borrowing rate or keep the trend-setting interest rate at its current, record-low level as the July decision approached.

Late last year, Bank of Canada governor Mark Carney talked extensively about the need for Canadians to rein in their personal debt levels, a signal many experts interpreted as the central banker about to get tough on rising prices.

Indeed, many economists began predicting that the bank would boost rates in July, especially after three months — March, April and May — when inflation popped above the central bank’s one-to-three-per-cent target range for price growth.

Carney, however, began signaling a change of sentiment in June when he talked about the financial “headwinds” Canada faced in an interview with the Wall Street Journal.

His wording lead to a subtle shift in thinking among Carney watchers.

“The hard place that Carney is caught between is the growing risk that Canada’s economy will underperform expectations if U.S. demand remains weak and/or Europe’s credit crisis erupts and spews lava across global financial markets,” said BMO Capital Markets economist Sal Guatieri in a commentary prior to Tuesday’s rate announcement.

Economic growth — something central bankers are trained to generally ignore — began pushing out concerns over rising prices in the bank’s thinking, experts said.

Still, many economists believe the Bank of Canada will boost interest rates towards the end of 2011 as long as the Canadian economy keeps to its current decent GDP growth path.

RBC Economics, for example, currently predicts that Canada’s economy will grow at a 3.2 per cent clip in 2011, equal to the growth rate for 2010.
Europe and America

There are growing fears that the Greek debt crisis is spreading to other European countries, especially the continent’s third biggest economy — Italy.

As well, the administration of U.S. President Barack Obama has so far failed to reach a deal with the U.S. Congress over whether to raise Washington’s borrowing ceiling.

Failure to get an agreement by Aug. 2 risks placing the world’s largest economy in technical default of it debt obligations.

Both situations hold the potential to drive the global economy back into a recession similar to the one in 2008-09 or at least to reduce the potential economic growth for most countries, experts have warned.
Into the winter

Still, the Bank of Canada said it is eyeing rate hikes into the later months of 2011.

“To the extent that the expansion continues and the current material excess supply in the economy is gradually absorbed, some of the considerable monetary policy stimulus currently in place will be withdrawn,” the Bank’s statement said.

The central bank now forecasts that Canada will expand by 2.8 per cent in 2011 and 2.6 per cent in 2012, the year that the Bank expects the Canadian economy will reach full capacity.


This article appeared on the Vancouver Sun on July 16th, 2011 and was written by Bryan Yu.

Provincial home sales recorded a third straight monthly decline in June, falling 2.9 per cent from May to a seasonally-adjusted annualized rate of 70,280 units. In spite of a two-per-cent increase over the same period last year, sales remain weak.

June’s decline largely reflected a 5.5-per-cent drop in Metro Vancouver figures as combined sales in the rest of the province rose 3.8 per cent from May. The largest gains were seen in Kootenay (20.6 per cent), South Okanagan (15.7 per cent) and Chilliwack (16.5 per cent) real estate board regions. In the Okanagan-Mainline region, sales rose 4.2 per cent in June following a 9.4 per cent advance the previous month.

While it’s too early to predict a recovery phase, the outlook for the Okanagan and Kootenay markets has improved slightly. High oil prices continue to boost Alberta’s economy and have led to some of the lowest unemployment rates and the strongest pace of job growth in the country. This could bode well for B.C.’s recreational housing markets over the next few years as discretionary spending picks up.

However, a high Canadian dollar and dramatic price declines in some markets south of the border has made recreational housing in the U.S. a significant competitor for those same dollars.


B.C. exports to international markets rebounded following a drop in April. Total seasonally-adjusted exports rose 17.4 per cent to reach $2.8 billion in May, the highest level seen since late 2008. The underlying trend remains slightly positive (although uneven), but largely reflects higher prices rather than increased physical shipments.

The resource sector led growth in May. Exports of industrial goods and materials reversed April’s 33-percent drop, advancing 27.2 per cent to $562.7 million, while energy exports surged 46 per cent from April to $918.8 million.

There was a sharp rebound in natural gas exports to the U.S. and a 32-percent rise in bituminous coal exports from April, reflecting increased shipments to the U.K, China, Brazil and South Korea.


Following a 30-per-cent gain in May, led by a jump in multi-family construction, housing starts fell 25.9 per cent in June to a seasonally-adjusted annualized rate of 23,500 units.

In B.C.’s urban areas (which represent about 90 per cent of total activity), multi-family starts declined 36.2 per cent to 14,100 annualized units. Meanwhile, single-detached starts remained flat, dipping 1.4 per cent to 7,100 units.

While June’s monthly decline was relatively steep, month-to-month comparisons of housing starts are volatile, reflecting the large proportion of apartments and other multi-family dwellings that make up the flow of new housing additions in the province, particularly in Metro Vancouver.


Estimated first-quarter combined capital costs of major projects under construction in the province rose two per cent to $63.1 billion, according to the B.C. Ministry of Finance. Major projects are defined as those with capital costs of at least $15 million ($20 million in the Lower Mainland).

The bulk of the net gains were observed in the Kootenay ($877 million), Thompson/Okanagan ($624 million) and the Mainland/Southwest ($669 million) development regions. In contrast, completed projects outpaced commencement of new projects in the Northeast by a margin of $600 million and on the Vancouver Island/ Coastal region by $416 million.

Among the 28 major projects that began construction in the first quarter, the highest valued project was the Waneta power plant expansion in Trail, with estimated capital costs of $900 million. Work also started on the Interior Heart and Surgical Centre in Kelowna ($448 million) and the Surrey Memorial Hospital Emergency Department and Critical Care Tower ($512 million).

While the value of total proposed projects in the pipeline dipped by two per cent to $112 billion in the first quarter, 39 major projects with combined capital cost of more than $2.5 billion were added to the list. The largest proposed project was the Telus Garden Communications Centre in Vancouver, a 22-storey office tower and a 44-storey residential tower with an estimated capital cost of $750 million.

Bryan Yu is an economist with Central 1 Credit Union.

This article appeared on the Chronicle Herald on July 16th, 2011.

OTTAWA — Canadian home prices continued to soar above year-ago levels in June but economist believe price hikes could soon ease, spelling relief for buyers in expensive markets.

The Canadian Real Estate Association said Friday the national average price for Canadian home resales was $372,700 in June, up 8.7 per cent from the same month last year, but down 0.9 per cent from May.

In Nova Scotia, the association reports the average price was $216,391 last month. That was up from $212,814 last June. Halifax home resales averaged $269,605 last month, up from $262,992 a year earlier.

Realtors across Canada sold 48,487 resale homes last month, 10.8 per cent more than in June 2010, when sales began to taper off from an earlier hot streak when buyers rushed to beat interest rate hikes. Last June, the Bank of Canada raised interest rates from emergency lows for the first time since the recession.

Last month’s sales activity was also 2.6 per cent higher than in May, bucking a four-month trend of monthly declines.

“Canadian housing demand remains resilient, thanks to low interest rates, job growth, and home buyer confidence in the economy,” association president Gary Morse said in a statement.

June’s double-digit, year-over-year, sales increase was the fastest pace recorded since April 2010, said Bank of Montreal economist Robert Kavcic.

“However, the strong growth figure somewhat masks more moderate recent activity, as sales fell more than 16 per cent between April and June last year amid stricter mortgage rules, making for an easy comparison,” he wrote in a research note.

Despite the year-over-year price hikes, seasonally-adjusted prices have now dipped for three straight months, suggesting the changes to mortgage rules that limited the maximum amortization period “might be having at least a modest impact on pricing,” he said.

Some industry watchers have speculated that prices have now peaked and expect to see declines, especially when interest rates inevitably rise.

“Stricter mortgage rules and declining affordability appear to be taking at least some momentum out of prices, a trend that could continue if the Bank of Canada resumes its tightening campaign in the fall,” Kavcic said.

Sonya Gulati, an economist at TD, said June’s figures suggested a pickup in activity after a “particularly muted” over the past few months, but added that they could be a blip.

“We expect the mini reprieve to be fleeting and in turn, sales gains should be muted for the remainder of the year and into 2012,” she said.

Gulati said she expects prices to decrease by 10 per cent over the next two years, accompanied by a 15 per cent decline in sales.

“The lag between sales and prices usually comes in between two to three quarters. In turn, we anticipate prices to temper early next year,” she said.

Sales picked up in a majority of the country’s cities, with two notable exception — the pricey and once overheated markets of Vancouver, down 1.7 per cent and Toronto, 0.4 per cent lower.

In Toronto, average seasonally adjusted home prices fell 1.1 per cent, but are still up nearly 10 per cent year-over-year. The market remains one of the most competitive in Canada as demand so far this year has far outweighed the number of listings, contributing to higher prices.

In Vancouver, average prices are about 23 per cent higher than they were last year, but the average is being skewed higher by a flurry of activity at the high end of the market. Sales in expensive West Vancouver and Richmond have eased since February, which helped to reduce the impact on average prices, the association noted.

That area has recently been a hotbed of housing activity, and high end sales helped drive June average home prices in Greater Vancouver to $630,921.

However, the national figures in June showed less of an impact from the sales of high-priced homes in Vancouver, although that city continued to skew the national results, the association said.

About 60 per cent of local housing markets in Canada were balanced in June, meaning the number of sales and new listings were about the same. However, new listings increased just marginally, by 1.8 per cent in June from May.

Calgary, Montreal, Ottawa, Hamilton, London, Ont., and Victoria all saw gains over May.

Nevertheless, national sales activity in the second quarter (April, May and June) was down 4.5 per cent compared with the first quarter of 2011.


This article appeared in the Kamloops This Week on July 12th, 2011 and was written by Jeremy Deutsch.

Kamloops Property For Sale SignsLike so many industries following the 2008 economic meltdown and ensuing recession, steady may not be so bad.

That can also be said for the real-estate market in the Kamloops area.

Kamloops Century 21 realtor Kirsten Mason said the market isn’t in the same place as it was before the recession of 2008 — when homes were flying off the market — but it has remained consistent in the years since.

According to numbers from the Kamloops and District Real Estate Association, home sales in the first six months of 2011 dropped slightly — to 1,031 from 1,140 the previous year.

The number of residential listings also dipped — to 2,920 from 2,981 in 2010.

The median price for a home hasn’t changed much, either, with the average home in Kamloops selling for $352,000.

The majority of homes being sold in Kamloops are between $200,000 and $400,000.

Mason, who also writes for her own Kamloops real estate blog, suggested the market still favours buyers, noting there is plenty of inventory from which to choose.

She has also come across homeowners who purchased at the height of the market, but haven’t been able to sell their property at that same price.

“It is now taking more time for properties to sell and listings sitting on the market for over 60 to 90 days is not unusual,” Mason said.

“There are definitely still the buyers/sellers who are moving within the city, but it seems like a lot of people are taking the wait-and-see attitude.”

She predicted the market will likely remain in the same state for the rest of 2011.

With plenty of houses on the market already, it should be no surprise the number of new houses being built has also taken a tumble.

According to statistics from the Canadian Mortgage and Housing Corporation, the number of housing starts in June dropped to 20 from a high of 54 the previous year.

That pushed the overall starts down to 100 for the first half of the year, compared to 194 through the first six months in 2010.

The number of multi-family starts also declined slightly —  to 159 from 178 in the first half of  2011.

Overall, housing starts dropped by 30 per cent in Kamloops in the first six months of the year.

The drop in starts in Kamloops is in line with other communities in the region, such as Kelowna, which recorded a 24 per cent drop in starts.

Permit statistics from the city’s building department are expected to be presented to council on June 19 as part of a mid-year report.


On Saturday, July 16th and Sunday, July 17th, 2011 the open houses will be held in Westsyde and Upper Sahali, Kamloops.

2181 Perryville Pl Westsyde Kamloops House

Saturday, July 16th, 2011: 1:00-3:00: 2181 Perryville Place, Westsyde, $349,900

Immaculate Westsyde home with river views…numerous updates include furnace, hot water tank, central A/C, flooring, kitchen, 2 bathrooms, patio, most windows, external doors, paint, mouldings, more.

Kamloops For Sale 506 Garibaldi Dr Upper Sahali Kamloops

Sunday, July 17th, 2011: 1:00-3:00: 506 Garibaldi Drive, Upper Sahali, $399,900

This upper Sahali rancher with open floor plan has had many updates in the past few years which include; new flooring, kitchen, paint, light fixtures, some internal doors, bathroom, furnace 7 years old, appliances, landscaping and more.

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9096 Finlay Place Knouff Lake BC Real EstateBeautiful 0.45 acre flat cleared lot with large pine at rear of lot. Very close to Knouff Lake with lake views. Excellent building site. Roads are maintained year round, close to Sun Peaks and Kamloops. Great lake for the whole family. Some boat restrictions.

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Vancouver, BC – July 14, 2011. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose 2.4 per cent to 7,904 units in June compared to the same month last year. The average MLS® residential price climbed 14.4 per cent to $571,837 last month compared to June 2010.

MLS Residential Sales BC June 2011 Real Estate

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“Home sales were relatively unchanged in June compared to last year,” said Cameron Muir, BCREA Chief Economist. “However, low mortgage interest rates and an overdue pick-up in BC employment growth are expected to provide some incentive to consumers over the summer months.”

Year-to-date, BC residential sales dollar volume increased 15.5 per cent to $24.7 billion, compared to the same period last year. Residential unit sales are essentially unchanged compared to the halfway point of 2010 at 42,095 units, while the average MLS® residential price rose 16.1 per cent to $585,661 over the same period.


June 2011 Residential avg price, active listings

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June 2011 BC Residential MLS Service Data by board

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June 2011 Year to date Residential MLS

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CIBC Economics released it’s latest report on July 7th, 2011. Click on any of the images or charts to enlarge.

The Canadian real estate market appears to have nine lives. Over the past two years, home owners and potential buyers primed themselves toward highly expected increases in borrowing cost—increases that were supposed to end the real estate party of the past decade—only to be pleasantly surprised as global economic and political uncertainties kept a lid on Canadian interest rates. The misfortunes of other nations prolonged the real estate boom here at home, but it is hardly a secret that Canadians, including the governor of their central bank, are becoming increasingly anxious regarding current housing valuations.

Is it a bubble? Glancing at popular metrics such as the price-to-income ratio or the price-to-rent ratio, it is tempting to conclude that the housing market is already in clear bubble territory and a huge crash is inevitable. Tempting, but probably wrong. When it comes to the Canadian real estate market at this stage of the cycle, any statement based on average numbers can be hugely misleading. The truth is buried in the details—and there the picture is still not pretty, but much less alarming.

House Prices—A Closer Look

The average house price is still rising by 8.6% on a year-over-year basis. However, take Vancouver out of the picture and this rate slows to 5.6%. Exclude both Vancouver and Toronto and the price increase is only 3.7% (Chart 1). CIBC Average National Residential Home Price

Zooming in on the high profile Vancouver market, we see that the gap between average and median prices is approaching an all-time high—indicating a highly skewed market. In fact, removing properties that are above the $1 million mark reveals a much more moderate price appreciation and reduces the average sale price by $220,000 to just over $590,000. So what makes Vancouver abnormal is the high end of its property market.

And in this context many, including Governor Carney, point the finger at foreign—mainly Asian wealth—as the main driver here. Data on the extent of that role is quite limited. Our analysis of data obtained from Landcor Data Corporation suggests that only 10% of the close to 4,500 transactions involving foreign money over the past five years were above the $1 million mark, with an average purchasing price of just under $600,000. In fact, according to the information provided by Landcor, foreign money accounted for only 2.6% of all sales (mostly condominiums) during the same period (Chart 2). CIBC Foreign Buying of Vancouver Real EstateHowever, that could be a serious underestimate, as it is based on where property tax assessments are mailed, and would exclude offshore buying on behalf of children or other local proxies. Furthermore, there are many reasons to believe that a significant portion of what is perceived to be buying by offshore investors is, in fact, driven by Chinese immigrants that are integrated into the community but still maintain strong links to mainland China, with many residing and working in China while their family establish roots in BC1. Note that, this activity is much more dominant in specific parts of the city, such as the west side.

So looking beyond the average price numbers reveals a highly segmented and multi-dimensional market that is probably influenced by different forces. But even a multidimensional market can overshoot—and the likelihood is that prices in the Canadian market and its sub-segments are higher than what can be explained by factors such as income growth, rent and household formation. Given that, the housing market will eventually correct. The only question is what will be the mechanism of that correction. A crash is, of course, the shortest route to equilibrium. But for such a scenario to materialize we need two pre-conditions: 1) a significant and quick rise in interest rates akin to the one that led to the 1991 recession and housing market correction, and/or 2) a high-risk mortgage market that is highly sensitive to any changes in economic realities, including hikes in interest rates. In fact, one can make the point that the US crash was a combination of these two conditions as the subprime market in the US started to melt only after the Fed began hiking and reset teaser rates, for hundreds of thousands of subprime mortgage holders, by roughly 400 basis points.

Pre-Conditions for a Crash in the Canadian Context

In Canada, a sharp and brisk tightening cycle is unlikely. CIBC Market Expects a Gradual Increase in RatesThe market expects a gradual increase in short-term rates in the coming years (Chart 3). The rising number of mortgage holders that carry a variable rate mortgage (Chart 4) will be the first to feel the pain, but if history is any guide, they will return quickly to the comfort of a five-year fixed rate the minute the Bank of Canada starts hiking.

What about the risk profile of the Canadian mortgage CIBC Shifting from Fixed to Variable Mortgagesspace? We zoom in on two sub-segments of the mortgage market that traditionally accounted for most defaults: mortgage holders that carry a debt-service ratio of more than 40% and those with less than 20% equity on their house.

As illustrated in Chart 5, just over 6% of households have a debt service ratio of more than 40%—a number that has risen by a full percentage point since CIBC number of Stretched Households on the rise2008. Note, however, that this ratio is still well below the ratio seen in 2003, when the effective interest rate on debt was more than a full percentage point higher, and no correction in house prices ensued. All other things being equal, even a 300-basis-points rate hike by the Bank of Canada would take this ratio to only just over 8%. Not surprisingly, Vancouver has the highest ratio of households with high debt-service ratio, followed by CIBC Share of Households with 40 debt service ratioToronto (Chart 6).

Moving on to the equity position, just over 17% of the Canadian residential real estate pool is in properties with less than a 20% equity position. Note that this number has been rising over the past few years (Chart 7). More than 80% of households with less than 20% equity position are first time buyers. Digging deeper and looking at the households with both low equity positions and high debt-service ratios, we found that this fragile CIBC High Ratio Mortgages on Risesegment of the market accounts for only 4.6% of total mortgages—a number that has been on an upward trend over the past few years (Chart 8). Shock the system with a 300-basis-points rate hike and that number would rise to a still-tempered 6.5%. Historically, even in that group, the default rate has been well below 1%. Thus, short of a huge macro shock, there does not appear to be the risk of CIBC HIgh Risk Segment of the Mortgage Marketlarge scale forced selling that would typically be the trigger for a precipitous plunge in the national average house price. As a result, while house prices are likely to adjust as interest rates eventually climb, the national pace of any correction is likely to be gradual. That could still entail a period in which housing under performs other assets as an investment class, until rising incomes and a tame price trajectory brings the market back to equilibrium.


This article appeared in the Kamloops this Week on Friday, July 8th, 2011 and was written by Jeremy Deutsch.

As a local group gets organized in an effort to keep Tobiano locally owned, the company that holds all the putters is getting set to put the resort on the market.

The Bowra Group, which was appointed receiver of the golf resort by the courts on June 9, has since been going through the books and putting a package together for sale.

Bowra Group president David Bowra said there has been interest in the resort from  outside of Kamloops and locally, but added demand for recreational property isn’t what it was a few years ago.

“Whether or not it’s [Tobiano] sold or we operate it for the foreseeable future remains to be seen,” he said.

Bowra said the company should have a package ready by next week, followed by a data room for interested groups to view.

A data room typically refers to a monitored site used for a large transaction in which confidential data is being disclosed to bidders.

Bowra said his company will run the resort business as usual and even try to sell lots on the development side of the resort.

“In the meantime, if someone wants to do a deal and comes in with a proposal that we think makes sense, we will recommend it to the courts,” he said.

“It’s going to be up to the courts to decide.”

Word of the resort’s financial woes broke on June 13, after the real-estate side of the resort and golf course were ordered into receivership by a B.C. Supreme Court.

Pagebrook Inc. and Kamlands Holdings Ltd., companies owned by developer Mike Grenier, owe the Bank of Montreal debts totalling roughly $26 million.

A local group called Save Tobiano has come forward with the goal to keep the course locally owned and open to the public.

Bowra said he would like to see a Kamloops group put together a venture to acquire the development, adding it would be good for the community and good for the resort.


This article appeared on CBC.ca on July 7, 2011.

Canada’s housing market has hit a peak and will likely slow in the next six months, says one of the country’s largest real estate companies, Royal LePage. “The market has seen its near-term peak in house price appreciation,” the company said in a forecast released Thursday. “A slower second half of the year is expected.”

The realtor group says home prices by the end of 2011 will be 7.7 per cent higher than they were at the end of 2010, on average. Sales volume is forecast to fall by two per cent over the same period.

High house prices are concealing early signs of a moderating market, the report said. The national average price of a detached bungalow has gained 7.5 per cent in the last 12 months to $356,625. ‘This trend cannot continue indefinitely’—Royal LePage CEO Phil Soper

Meanwhile, the price of a standard two-storey home rose 6.1 per cent to $390,163 and the price of a standard condominium rose 3.5 per cent to $238,064.

“In many of Canada’s regional markets, we saw house prices appreciate at a significantly faster rate than wages and salaries, and this trend cannot continue indefinitely,” Royal LePage CEO Phil Soper said.

Red hot Vancouver market bucks trend

There are wide regional variances within those numbers. The Canadian Real Estate Association has noted repeatedly in recent months that the national average price is being skewed higher by a red-hot Vancouver market, for example.

The Vancouver market continues its rally, Royal LePage says, with the average price of detached bungalows and standard two-storey homes both over $1 million and seeing double digit year-over-year gains.

It is interesting to note, however, that the average price for a standard Vancouver condominium saw a very modest increase of 2.5 per cent over the past year.

Soper noted that Vancouver — specifically certain neighbourhoods in the lower mainland of British Columbia — “remains an anomaly, as investment from outside of the country continues to support higher price levels.”

Other regions see gains

Most regions are still seeing strong gains, but home prices in Calgary declined modestly as the market continues to adjust following the Alberta housing boom experienced in the middle of the previous decade, the report noted.

The Atlantic provinces are still seeing gains, although smaller than the ones seen in recent quarters. And additional inventory coming on to the market in the Montreal area has provided home buyers with more choice and opportunities for negotiation, the report said.

Toronto’s seller’s market witnessed strong year-over-year price appreciation, with price gains ranging from 4.7 per cent to 6.1 for the housing types surveyed.

The company is predicted flat price gains in the fourth quarter of 2011 as the year-ago period was unusually strong.

The report makes no mention of the current mortgage rate environment. but it’s clear that borrowing costs are set to rise — something that could put pressure on home prices. Earlier this week, a couple of major banks raised their posted five-year fixed mortgage rates by .15 percentage points to 5.54 per cent.

The Bank of Canada is expected to resume raising its key overnight lending rate later this year. That will cause the interest rate for variable mortgages to rise.

With files from the Canadian Press


506 Garibaldi Dr Upper Sahali Kamloops Real Estate

This upper Sahali rancher with open floor plan has had many updates in the past few years which include; new flooring, kitchen (both up and down), paint, light fixtures, some internal doors, bathroom, furnace 7 years old, appliances, landscaping and more. The inlaw suite has a separate entrance and generates $1000/month in rent. Garage was converted into master suite with sliding glass doors to yard. One bedroom and den basement suite with large living space and separate laundry. Beautiful spacious deck that overlooks large, flat, private yard. Master suite could also be used as a rec room or family room. This home shows beautifully inside and out- owner is an interior designer. All appliances included (2x fridge, 2x stove, 2x washer/dryer, dishwasher). Great location close to school, transportation and a short drive to all shopping.

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

This article appeared in the Kamloops This Week on July 7, 2011 and was written by Jeremy Deutsch.

Property Tobiano Golf Resort Kamloops BCIt’s one of the premier golf destinations in Canada, but financial troubles have left Tobiano with an uncertain future. Now, a group in Kamloops is organizing in an effort to keep the golf course in local hands.

The group, Save Tobiano, has created a website and is looking for feedback and support from the public. Save Tobiano is being led by a Kamloops company called Quantum Business Golf Canada, which is a division of another company, Canada’s Mastermind Development Corporation.

Peter Cameron-Inglis, who is spearheading the group, told KTW the goal is to keep the course locally owned and open to the public. He noted the website savetobiano.ca is also being used as a tool to gather ideas to determine if there is interest in the community with respect to saving the course.

“We want to see it [Tobiano] leveraged for the community and benefit the community,” he said, adding several local businesses have already expressed interest in being a part of Save Tobiano. “It’s a jewel of the golf industry.”

Cameron-Inglis suggested one option could be for a local group to purchase the course or to simply work with the trustees or a new owner. Besides keeping the course locally owned, the group has also listed a few marketing ideas of its own.

One idea is to turn Tobiano into an  international business golf-training centre. That means offering a combination of a golf vacation to business individuals, but at the same time offering business-golf training.

Cameron-Inglis said many local companies, including his own, use the golf course to attract new business.

The group is also proposing a golf water taxi that would link Tobiano to other golf courses in Kamloops by an 18-person river jet boat. The plan would be to pick up passengers and transport them to locations along Kamloops Lake and in town.

Word of the resort’s financial woes broke on June 13, after the real-estate side of the resort and golf course were ordered into receivership by a B.C. Supreme Court judge on June 9.

Pagebrook Inc. and Kamlands Holdings Ltd., which are both companies owned by developer Mike Grenier, owe the Bank of Montreal debts totaling roughly $26 million.

The Bowra Group, which also took control of the troubled Mission Hill development in Kamloops last year, has been appointed receiver of Tobiano. At the time, the company said it intended to continue to operate the resort and golf course, but noted the process was in the early stages and the receiver could sell the resort to a new owner as a whole or sell individual lots.

With little attention, Cameron-Inglis said the website has already attracted more than 100 hits, with the response being all positive. The group is expected to start a larger campaign in the next few weeks, but is first waiting to speak with the trustees handling Tobiano.

CMDC is the company behind Race to a Million, a social-enterprise project promoting business opportunities and entrepreneurialism in the city.


This article appeared on Canoe.ca on July 4th, 2011.

RBC Royal Bank and TD Canada Trust said Monday they will raise their benchmark five-year fixed-rate mortgage 15 basis points, to 5.54%.

Other banks are expected to follow suit, since the hike reflects rising bond returns in the wider market, which lift the costs of funds for all lenders.

Despite Monday’s news, mortgage rates are still lower than they were just three months ago, and way below historical norms. And lower promotional rates are available at most lenders, including RBC and TD.

Bank of Canada Governor Mark Carney has held the key interest rate at 1% since last September, after lifting it from a rock-bottom 0.25%. The next rate decision is due out July 19, though most economists now expect the central bank won’t resume rate increases until at least September.

Anyone hoping to buy a home with the help of Canada’s largest bank has until the end of Monday to get the best possible rate.


The Kamloops and District Real Estate Association has released the statistics for June 2011. Click image to enlarge.

Comparative analysis by property type June 2011 Kamloops Statistics

Kamloops Real Estate Comparative Analysis by Property Type June 2011

Sales by subarea June 2011 Kamloops Real Estate Statistics

Kamloops Real Estate Comparative Analysis by Property Type June 2011

MLS Activity June 2011 Kamloops Real Estate Statistics

Kamloops Real Estate MLS Activity June 2011

Sales by subarea Second Quarter Kamloops Statistics

Kamloops Real Estate Sales by Subarea Second Quarter

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