August 2011

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This article appeared on the CanadianRealEstateMagazine.com on August 30th, 2011.

New Lending Rules Drop CMHC MortgagesRefinancing activity of insured mortgages in Canada dropped 40% following the federal government’s tightening of mortgage rules in March, according to a second quarter financial recap report out this week by the Canada and Mortgage Housing Corporation.

Earlier this year the government limited insured mortgage refinances to a maximum of 85% loan-to-value ratio, after previously setting the mark at 90%. Finance Minister Jim Flaherty also reduced the maximum amortization period for new government-backed insured mortgages to 30 years from 35. While buying activity did not seem to slow much after these changes, refinancing seems to have been particularly hit.

Additionally, homeowner mortgage insurance dropped 10% initially after implementation of the news rules, but by June was down a lesser 5%.

The CMHC also noted in its report that insured mortgage volumes were down 13% compared to last year and 20% below what was anticipated for the year.

Along with the new mortgage rules, the CMHC attributed weaker housing activity and a drop in its mortgage insurance share to the drop in activity.

Flaherty in June told reporters he was “satisfied” with the moderation in the housing market following the tightened rules.

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This article appeared on CBC.ca on August 26th, 2011.

B.C. families can expect to save hundreds of dollars a year once the province returns to the PST and GST system, which the provincial government Friday said would be completed by March 2013.

An independent panel appointed by the government reported in May that families earning between $40,000 and $60,000 a year would pay about $350 more annually in sales taxes due to the HST.

That amount rose to more than $1,000 a year extra for individuals or families making more than $100,000.

“There is a slight benefit to consumers under the old PST system compared to the HST,” said Helmut Pastrick, chief economist for the Central Credit Union.

Pastrick said some people may want to wait to purchase certain items until the old tax system is restored.

“For those planning on purchasing those big ticket items such as a vehicle or house, then it might be worthwhile to wait as there might be some savings,” he said.

One of the biggest objections to the HST — which combined the five-per-cent GST and the seven-per-cent PST — was its application to many items that previously had not been taxed.

After the announcement Friday that the HST had been rejected in the provincewide referendum, both Premier Christy Clark and Finance Minister Kevin Falcon promised that all the product and service sales tax exemptions that existed before the HST would be reinstated.

Range of consumer items:

Some of the items that consumers can expect — in 18 months — to once again be PST-exempt include:

New homes over $525,000.
Real estate fees.
Moving services.
Home renovations and landscaping.
Purchase or lease of a fuel efficient vehicle.
Restaurant meals and snack foods.
Domestic flights, coach bus, rail and taxi.
Sporting events, movie tickets, gym memberships, concerts, camping sites
Beauty salon services.
Over-the-counter medications.
School supplies.
Wedding expenses.
Telephone and TV service.

Critics of the PST point out that there may not be any real long-term savings under the PST system, because it will provide less government revenue and lead to an increased provincial deficit, which theoretically will have to be paid for eventually with tax dollars.

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This article appeared on The Vancouver Sun and was written by James Kwantes on August 29, 2011.

B.C. residents have high hopes of retiring debt-free, but for many, this reality show has an unhappy ending.

While most B.C. residents believe they’ll be debt-free by age 58, fewer than one-third of B.C. residents aged 45 to 64 don’t owe any money, according to a Harris-Decima poll conducted for the Canadian Imperial Bank of Commerce.

About one-quarter of B.C. residents report that they’ve abandoned hopes for a debt-free retirement. Fourteen per cent believe they will pay off all debts in their 70s and one in 10 says they will never be debt-free, the poll found. That compares with only four per cent of Alberta residents who believe they’ll carry debt into their 70s.

Part of the problem is that many Canadians who have a financial plan don’t factor in their debts, said Mike Stevenson, CIBC senior vice-president, Western Canada. For example, polling shows that about three in five Canadians meet with a financial planner to talk about financial goals and retirement strategy, but only one in five incorporates a debt repayment plan into that strategy.

“Many people lack a comprehensive and cohesive plan or strategy,” he said.

On the bright side, 37 per cent of all B.C. residents are debt-free, compared to 21 per cent nationally, the poll found.

The trend of more British Columbians carrying debt into retirement is one that Scott Hannah, president and CEO of B.C. Credit Counselling, has noticed.

People have a higher tolerance for debt because interest rates are very low, Hannah said. Compounding the problem, many are unwilling to make the hard choices required to dig themselves out of debt.

“People have to make some sacrifices, and the more severe your financial situation is, the bigger the sacrifice you’re going to have to make,” Hannah said, using the example of a cash-strapped family going from two cars to one.

“But none of us wants to give up what we have.”

The poll showed that people tended to predict they would have all their debt paid off 10 to 15 years from now. For example, those 18 to 24 picked 32 as the average age for being debt-free, those 25 to 34 said 44, people 35 to 44 said 54, 45- to 55-year-olds said 60, and 55- to 64-year-olds said 65.

Rob Abboud, an Ottawa-based financial planner with Raymond James, said many people underestimate the effect of 30-year amortizations, consumer debt, their children’s education and various things that can come up, such as buying a new car.

Hannah advocates setting up a financial plan that involves debt repayment and retirement savings coming out of the account first.

“What you’re probably going to find is that the amount of funds that a person has available for discretionary spending is somewhat limited,” he said. “But at least you’re taking care of your financial goals and those things that are most important to you first, as opposed to doing it after the fact.”

Many homeowners who are mortgage-shopping still ask how much they can get instead of how much they can comfortably afford, he pointed out. “For a lot of people who put themselves into a tight spot, it makes it difficult to get ahead,” he said.

It’s not only expensive real estate that has British Columbians cash-strapped.

One in five B.C. residents who responded to an ING Direct survey released Monday said their biggest monthly expense — besides mortgage or rent payments — was loans and credit card payments, compared to 16 per cent nationally. Half of B.C. respondents reported that they could not afford to save $25 more per week.

 

This article appeared on TheStraight.com and was written by Carlito Pablo on August 24, 2011.

On the day Mark Carney appeared before the finance committee of the House of Commons in Ottawa, Miguel Escueta went about his regular routine in Vancouver.

While the governor of the Bank of Canada talked on Parliament Hill about risks associated with the economic crises in the U.S. and Europe, it was business as usual for Escueta, a realtor of several years.

Global equities and financial markets may be wobbly, but according to Escueta, this is keeping interest rates down in Canada. This can only be good for property buyers out to make a move.

“We feel positive about the real-estate market,” Escueta told the Georgia Straight in a phone interview.

Escueta may not see most of the data that Bryan Yu goes through as an economist with the Vancouver-based Central 1 Credit Union, but the latter arrives at practically the same conclusion as the realtor.

“We’ve also seen factors of instability creating downward pressure on bond yield as a lot of investors know there’s so much hesitance to be in the [stock] market,” Yu told the Straight by phone. “What we expect to see, in the short term at least, is that mortgage rates [will] tend to come down further than they already are, and they are already at low levels.”

Yu also predicted a softening of housing prices, though this may not exceed five percent. But he doesn’t foresee a housing crash. “Sellers generally, if the market becomes weaker, they don’t list their properties,” the economist said.

However, Yu pointed out consumer confidence could take a hit in the face of an unstable world economy. With personal investments declining in value, people could pull back on spending on large items like new houses.

The B.C. Real Estate Association has reported that home sales in the province fell four percent from June to July this year. However, the organization is banking on mortgage rates slipping further as a government measure to mitigate the impact of uncertainties in the world economy, giving home buyers more purchasing power.

The housing market in the province isn’t immune to economic vagaries, the last of which was the recession of 2008 and 2009. According to BCREA data, total sales dropped 31 percent from 2007 to 2008, to $31.3 billion. The number of houses sold declined by 33 percent to 68,923 units, the lowest since 2000.

Weak sales continued into early 2009. Residential unit sales decreased by 57 percent in January of that year compared to the same month in 2008, with only 2,115 homes sold. But the pace picked up in February 2009. Tracking by Statistics Canada indicated that the economy began to stabilize in mid 2009.

While interest rates are expected to remain low, the federal government will be keeping a close eye on household debt levels. As the central bank’s Carney recalled in his opening statement to the House finance committee on August 19, the government has tightened mortgage rules since 2008 to “support the long-term stability of the Canadian housing market”.

“In an environment of exceptionally low interest rates, we must be careful not to repeat the mistakes of others who now face the challenges of simultaneously lowering unsustainable public and private debt burdens,” Carney stated.

Carney noted that Canadians are “now as indebted as the Americans and the British”.

The volatile global economy isn’t much of a concern to Simon Fraser University’s Andrey Pavlov. According to the associate professor of business, who specializes in real-estate finance, many people are expected to consider parking their money in properties as a safe investment.

“There’s no other place to put your money,” Pavlov told the Straight in a phone interview. “All other investments are suffering a lot.”

What worries Pavlov about the real-estate market in Metro Vancouver is the high prices relative to rent. According to the SFU academic, that could affect the potential for further price increases down the line.

“It doesn’t mean that prices would go down, but future growth of prices from here is hard to see because any investor wants to look at the rent they can collect if they rent their property,” he said. “And that rent is just not very high right now in B.C.”

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MLS Residential Sales BC August 2011

Click to enlarge

Vancouver, BC – August 25, 2011. The British Columbia Real Estate Association (BCREA) released its 2011 Third Quarter Housing Forecast Update today. BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 3.8 per cent from 74,640 units in 2010 to 77,500 units this year, increasing a further 3.6 per cent to 80,300 units in 2012.

“Slower than expected employment growth is expected to keep BC home sales below their ten-year average through 2012,” said Cameron Muir, BCREA Chief Economist. “However, weaker global economic growth and recent uncertainty in the equity markets points to continued low mortgage interest rates which will help underpin housing demand.”

“Following a decade where unit sales broke all records, consumer demand over the next few years will be relatively moderate,” added Muir. The ten-year BC MLS® residential sales average is 87,600 units. A record 106,300 MLS® residential sales were recorded in 2005.

 

Heffley Creek Home For Sale 4749 Heffley Louis Creek Rd Beautiful 40.2 acre flat property with a spacious home, numerous out buildings, 15 acres of hay fields, and tons of potential for further development. Louis Creek runs through the property. Recent updates include new laminate flooring, beautiful river rock fireplace, 4749 Heffley Louis Creek Rd hayfield Kamloops BC Real Estatekitchen countertops, appliances & lino floor, windows, light fixtures, water softener, plumbing, metal roof (2006), deck & railings, gutters, down spouts & facia, hot tub and more. Large 30 X 60 barn with a 10 X 60 storage area in the loft with a second loft area for even more storage (400 sq feet). There are 4 stalls in the barn and has electrical service. Other outbuildings include: animal management building 16 X 16, Wood shed 12 X 16, Green house 16 X 16 with attached 16 X 12 storage, Loafing house 12 X 16 with tack house, poultry coup 20 X 50 with incubators and storage, and a storage shed 12 X 20. The raised garden bed is 24 X 20 great for growing all your veggies in the summer. The hay fields are subirrigated and one of the 7 acre fields yields 2 cuts per year. The shallow well produces more than enough water and owners have never run short.

Click here to view more pictures of this home.

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This article appeared on the CanadianRealEstateMagazine.ca on August 12th, 2011.

British Columbia suffered a major dip in home sales during July, but the situation could get better if interest rates drop, according to a new report by the British Columbia Real Estate Association (BCREA).

Sales were up 12.9% in July compared to a year ago, while average prices were up 10% over the same period. But even with adjusting for the typical drop in July activity, seasonally-adjusted sales are trending down in the province.

BCREA said seasonally adjusted sale fell 4% in July from June. The raw numbers pointed to larger downward trend, with sales dropping 17% to 6,533 in July from 7,904 sales in June

Rising prices in the province might be putting off interest from potential buyers, however. The average price is now $540,877, according to the BCREA’s report on July stats.

“Less frenetic activity in Vancouver operated to pull total provincial sales lower,” said BCREA Chief Economist Cameron Muir.

Recent global financial uncertainty, especially in the U.S., could help pull mortgage rates in Canada even lower, however, spurring another surge in sales, Muir said.

“The increased affordability and added purchasing power from lower mortgage rates will help bolster housing demand,” he said.

While the average residential price in Greater Vancouver is now $761,763 and 15.8% higher than a year ago, the rest of the province showed more modest results.

Prices are up 9.7% in Fraser Valley to $503,931, and up just 0.5% in Okanagan Mainline to an average of $408,035.

B.C. Northern was the most affordable location last year with an average price of $211,542, but that’s now up 7% to reach $226,359.

In Northern Lights, where the average was $239,955 last year, it’s now the province’s lowest after dropping 8.3% to reach $220,060. Kamloops also dropped 7.6% since last year to reach an average in July of $287,005.

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This article appeared in the Kamloops This Week on August 10th, 2011 and was written by Jeremy Deutsch.

Tobiano Golf Green view Kamloops Homes For SaleOne of the largest group of companies in the country is eagerly waiting to see who will take the reins of the financially troubled Tobiano resort.

The Jim Pattison Group​, which owns a 13-acre parcel of land within Tobiano, told KTW it is optimistic a new owner will be found, one who can carry on with the original plans of the resort.

“We’re hopeful that a new owner with a vision comes in that could carry it out and help build [Tobiano] out over time. That will be the best thing for the project,” said Michael Lee, vice-president of developments for the Jim Pattison Group.

The company bought the parcel of land in hopes of one day developing the space into townhomes.

But, citing the recent economic struggles in the golf-resort market, Lee said it’s unlikely such a project will get started any time soon.

“Until that [the market] turns around, I don’t think we would be confident enough to move forward,” he said.

Word of the resort’s financial woes broke in June, after the real-estate side of the resort and golf course was 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.

Meantime, the Bowra Group, which was appointed receiver of the golf resort by the court, has since put together a sales package for about 100 potential buyers.

Douglas Chivers, a representative with the Bowra Group, said the company intends to start a larger sales campaign by taking out ads in national publications such as the Globe and Mail newspaper and Financial Post magazine.

He noted the company has received some interest in the resort, mostly from local people and groups in B.C. and Alberta.

“It’s a little early for a lot of people,” Chivers said.

The deadline for offers is Sept. 30.

Afterward, the receiver will review the offers and begin negotiations with interested buyers.

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

Its website, found here, seeks ideas from the public to help keep the resort locally owned.

Chivers said Bowra Group is also trying to get some form of a marina in place at the resort.

The financial downfall of the resort was in part blamed on the inability by the developer to secure funding to build a marina.

Link

This article appeared in the Kamloops This Week on August 17, 2011 and was written by Jeremy Deutsch.

Kamloops New Home ConstructionJust when construction activity was looking tepid in the Tournament Capital, along came July.

Though the number of residential permits did drop last month, overall construction value topped that of July 2010, according to the city’s building-permit department.

The city handed out $14 million in building permits in July, compared to $10 million during the same month in 2010.

So far in 2011, the city has recorded $97 million in construction activity, compared to $126 million through the same span last year.

The solid numbers from July seem to have caught city hall by surprise.

David Trawin, director of development and engineering services, said it appears Kamloops will meet its target for the year.

In 2010, the city issued $191-million worth of building permits, but expected that number to drop in 2011 to about $140 million.

“Will we hit the $190 million we hit last year? No. We’re definitely not going to and I don’t think we expected to,” Trawin said.

He also expects August construction numbers to be similarly steady.

Part of the month’s strong showing was the result of a big jump for commercial construction.

The city issued $4.6-million in commercial-building permits for the month, a significant increase from the $300,000 value in July 2010.

The number of single-family permits issued in July hit 13, a little more than half of the 21 permits issued at the same time last year.

The city handed out $7.2-million worth of residential permits last month, compared to $9.3 million in July 2010.

Kamloops has only topped the $200-million mark in permits once, in 2008, when it doled out $207-million worth of permits, which remains a record.

Housing starts in Kamloops were also down last month.

According to statistics from the Canadian Mortgage and Housing Corporation, the number of single-family housing starts in July dropped to 26 from 35 the previous year.

However the number of multi-family starts did increase —  to 56 from seven in July 2010.

Overall, housing starts have dropped by 18 per cent in Kamloops so far this year.

The drop in starts in Kamloops is still not as steep as other communities in the region, such as Penticton and Vernon, which recorded declines of 73 and 44 per cent, respectively.

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On Saturday, August 20th and Sunday, August 21st, 2011 open houses will be held in Batchelor Heights, Juniper Heights and North Kamloops.

Juniper Heights Ridge House For Sale 2210 Quappelle Blvd Saturday, August 20th, 2011: 1:00-3:00: 34-2210 Qu’appelle Blvd, Juniper Ridge, $379,900

Spacious level entry view unit in Juniper Heights. Quality finishing throughout this 4 level split with a nice open floor plan on the main floor, a gas fireplace, central vac and single car garage with 2nd parking spot included. more

1846 Grouse Crt Batchelor Heights For SaleSunday, August 21st, 2011: 1:00-3:00: 1846 Grouse Court, Batchelor Heights, $489,900

Beautiful level entry Batchelor Heights rancher with a large, bright 1 bedroom inlaw suite with separate laundry. Hardwood flooring, and tile throughout the home. 3 bedrooms on the main floor with 2 full bathrooms, more.

1119 SurreyNorth Kamloops BC Real EstateSunday, August 21st, 2011: 1:00-3:00: 1119 Surrey Avenue, North Kamloops, $229,900

Cute as a button – this North Kamloops 2 bedroom bungalow has had numerous upgrades over the past few years. In 2008 – new roof, hot water tank, furnace, central A/C. more

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This article appeared on CBC News on June 29, 2011.

Canada’s housing market is in a bubble that’s set to burst and prices could plunge by as much as 25 per cent, a major independent research firm warns.

“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.

“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”

The report predicts a fall in house prices by as much as 25 per cent over the next three years.

A domestic housing boom coupled with high commodity prices worldwide have spared the economy the severe recession felt by other developed countries.

Canada’s economic success could become the thorn in its side as the threat of a downturn in the housing sector looms, the report says.

The firm says a burst housing bubble would shrink real estate investment and hurt consumption — two things that would considerably slow economic growth.

This decline in consumption would mean a slowly rising unemployment rate as well, according to Capital.

The company says Canadian house prices are overvalued by approximately 25 per cent, close to excessive levels seen in the frothy U.S. market at its 2006 peak.

Over-building is already visible; the number of unoccupied houses and condos is at a record high. It closely resembles the 1994-95 housing slump, when the construction industry experienced a severe downturn.

The report forecasts falling house prices and smaller residential investment. Real estate currently makes up 6.8 per cent of Canada’s GDP. Lower prices would mean a hit to household net worth as property now accounts for one-third of a family’s total assets, the report found.

The firm expects the Bank of Canada to stay the course in the near term, as financial worries at home and abroad will keep interest rates at their current level for a while.

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1189 Howe Aberdeen Kamloops Real Estate For saleThis 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. Open floor plan with vaulted ceilings, main floor laundry, underground sprinklers, large sun deck with natural gas hook up for a BBQ & storage shed. There are four bedrooms and one bathroom. One bedroom would make a great rec room for all to enjoy. There is a large, private, fenced back yard that backs on to a green belt. Beautiful unobstructed city views from many of the windows in this home. This is a great home for a first time home buyer, investor or for someone wanting to downsize. Why buy a townhouse when you can have your own detached home?

Click here to view more pictures of this home.

To view all homes for sale in Kamloops click here.

On Saturday, August 13th and Sunday, August 14th, 2011 open houses will be held in Aberdeen, Batchelor Heights, Brocklehurst, Upper Sahali and Westsyde.

Kamloops Property 2181 Perryville Pl WestsydeSaturday, August 13th, 2011: 11:00-12:30: 2181 Perryville Place, Westsyde, $339,900

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.

2070 Pala Mesa Pl Brock Kamloops Property For SaleSaturday, August 13th, 2011: 1:00-2:30: 2070 Pala Mesa Place, Brocklehurst, $319,900

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.

Kamloops House 1846 Grouse Crt Batchelor Heights Saturday, August 13th, 2011: 1:00-3:00: 1846 Grouse Court, Batchelor Heights, $489,900

Beautiful level entry Batchelor Heights rancher with a large, bright 1 bedroom inlaw suite with separate laundry. Hardwood flooring, and tile throughout the home. 3 bedrooms on the main floor with 2 full bathrooms, more.

Kamloops Home 1189 Howe Aberdeen Real Estate Sunday, August 14th, 2011: 11:00-12:30: 1189 Howe Road, Aberdeen, $304,900

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

Kamloops For Sale 506 Garibaldi Dr Upper Sahali Sunday, August 14th, 2011: 1:00-2:30: 506 Garibaldi Drive, Upper Sahali, $389,500

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.

Kamloops House 2211 Greenfield Ave Brock Sunday, July 14th, 2011: 1:00-3:00: 2211 Greenfield Avenue, Brocklehurst, $348,900

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.

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To view all homes for sale in Kamloops click here.

This article appeared on the Vancouver Sun on August 11th, 2011 and was written by Brian Morton.

B.C. home sales rose 12.9 per cent to 6,533 units in July compared to July 2010, while the average price climbed 10 per cent to $541,000, the B.C. Real Estate Association reported Thursday.

However, there was a wide discrepancy in price increases around the province, with Metro Vancouver continuing to show the highest increase.

But price increases in Metro Vancouver are slowing down, and are expected to slow down even further in the coming months.

“In Metro Vancouver, the price numbers have been inflated over the past several months as higher end [single detached] properties selling in pricier neighbourhoods [pushed] the average price higher,” BCREA chief economist Cameron Muir said in an interview. “But this is unlikely to be sustained over the longer term.”

Muir expects the number of single detached homes sold in pricier neighbourhoods like West Vancouver and Vancouver’s west side won’t be as high a proportion as experienced in recent months.

“Three months ago, the average price [in Metro Vancouver] was growing 25 per cent year over year,” he said. “Now, it’s dropped to 16 per cent.”

According to the survey, Metro Vancouver saw a 15.9-per-cent increase in the average price of a residential property in July compared to July 2010, from $658,000 to $762,000. The Fraser Valley recorded a 9.7-per cent increase, from $459,000 to $504,000.

However, the Okanagan Mainline recorded a minuscule 0.5-per-cent increase, from $406,000 to $408,000, while Kamloops saw a 7.6-per-cent decline, from $311,000 to $287,000. Victoria recorded a six-per-cent decline, from $497,000 to $467,000.

Muir noted that housing demand in the near future could be bolstered by lower interest rates as investors flock to bonds and bank analysts predict the Bank of Canada will keep its overnight target rate steady in light of the U.S. Federal Reserve saying it expected that an increase in rates would not be warranted, given the state of the U.S. economy, until 2013.

He said that recent global economic uncertainty means that mortgage rates have the potential to reach record lows in the coming weeks as investors flock into bond markets. “This will mean added purchasing power and affordability for consumers.”

Year-to-date, B.C. residential sales dollar volume increased 16.5 per cent to $28.2 billion, compared to the same period last year. Residential unit sales increased one per cent to 48,628 units, while the average residential price for houses sold through the multiple listings service rose 15.3 per cent to $579,645, BCREA said.

Muir noted that home sales edged down four per cent from June to July on a seasonally adjusted basis. “Less frenetic buying activity in Vancouver operated to pull total provincial sales lower.”

Vancouver, BC – August 11, 2011. The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential unit sales in the province rose July 2011 MLS Residential Sales BC12.9 per cent to 6,533 units in July compared to the same month last year. The average MLS® residential price climbed 10 per cent to $540,877 last month compared to July 2010.

“BC home sales edged down 4 per cent from June to July, on a seasonally adjusted basis,” said Cameron Muir, BCREA Chief Economist. “Less frenetic buying activity in Vancouver operated to pull total provincial sales lower.”

“The silver lining in the recent global economic uncertainty is that mortgage rates have the potential to reach record lows in the coming weeks as investors flock into bond markets,” added Muir. “The increased affordability and added purchasing power from lower mortgage rates will help bolster housing demand.”

Year-to-date, BC residential sales dollar volume increased 16.5 per cent to $28.2 billion, compared to the same period last year. Residential unit sales increased 1 per cent to 48,628 units, while the average MLS® residential price rose 15.3 per cent to $579,645 over the same period.

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Deb Fehr Dominion Lending Mortgage Broker

This article was provided by Deborah Fehr of Dominion Lending. She says that:  It is a great time to buy a home in Kamloops. Mortgage rates are at almost rock bottom levels and it looks like there may be a rate cut instead of increase in September.  Of course if you have a rate hold now and rates go down before you close your deal, you will get the lower rate. Read the article I included below.

46% probability of a rate cut Sept. 7.  100% probability of a rate cut by year-end.

That’s what prices of closely-followed overnight index swaps (OIS) were implying at the close of business on Monday. OIS trade on market expectations for Bank of Canada rate moves.

That amounts to a 180 degree swing in market psychology. Just a few weeks ago traders were pricing in a rate hike by January.

“As we’ve seen, markets can swing and perception can swing quite aggressively, and we could well be back to a fall expectation [of a rate hike] in a month’s time,” said RBC economist Eric Lascelles to the Globe & Mail.

Lascelles counterpart at Scotiabank, Derek Holt, says: “Any talk of the Bank of Canada hiking this year is just foolish in my opinion.”

Peter Gibson, chief portfolio strategist at CIBC World Markets notes: “I think it’s clear that there are a lot of serious problems still in the world and it’s more likely that we’re setting the stage for a sustainably low level of interest rates for a very long time.”

And that is the takeaway here.

Despite the roller coaster of emotions as of late, this about-face in rate assumptions reminds us of the necessity to focus on long-term trends. Long-term, North America’s prognosis still seems compatible with low-growth and low-inflation. That’s an environment where fixed mortgage rates typically underperform.

Link to article.

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

This article appeared on the Globe and Mail on August 9th, 2011 and was written by Richard Blackwell.

Canadian fixed-term mortgage rates could fall to even more affordable levels after roiling financial markets pushed the yield on five-year government bonds to record lows on Tuesday.

As investors fled equities in recent days, money poured into the haven of Canadian government bonds, pushing prices up and yields down sharply. Because banks borrow government bonds to help finance their fixed-rate mortgages, there is a tight link between five-year bond yields and five-year mortgage rates.

“We have seen a precipitous drop in five-year bond yields,” said Toronto-Dominion Bank chief economist Craig Alexander, mainly because Canadian bonds look so attractive because of the country’s positive fiscal situation.

Since July 21 the yield on those bonds has dropped a remarkable three-quarters of a percentage point, Mr. Alexander said, hitting an all-time low of about 1.5 per cent on Tuesday.

Five-year mortgage rates tend to move in lock-step with that yield, but about 1.1 to 1.4 percentage points higher, and with a lag of up to several weeks before major lending institutions react with their changes.

“The lag is really about financial institutions assessing whether the movement is going to be sustained,” Mr. Alexander said, noting that the time for them to react varies. In the current volatile market, financial institutions won’t likely move until they see whether bond yields stabilize for a period of time, he said. “There is a distinct possibility of a decline in five-year mortgage rates, but it is not clear [yet] how much of a decline there will be.”

He expects to see a drop in mortgage rates, but perhaps not as dramatic as current bond yield numbers would suggest.

For home buyers, or those looking to renew their mortgages, the prospect of lower five-year mortgage rates is very positive, said Alyssa Richard, founder of the mortgage-rate tracking website RateHub.ca. Five-year mortgage rates, on average, have been at about 3.5 per cent in recent weeks, she said, but if current bond yields are maintained those rates could drop to below 3 per cent, a level not seen before in Canada.

Such a drop would save a home buyer almost $1,200 a year on a $360,000 mortgage amortized over 30 years, Ms. Richard noted.

People holding variable-rate mortgages will also likely get a break, she said. Variable rates – which are linked to the Bank of Canada’s prime rate – will rise after the central bank’s next rate increase. But with U.S. Federal Reserve Board Chairman Ben Bernanke having said Tuesday that he will hold U.S. rates steady for two years, and the Canadian economy growing only marginally, Bank of Canada Governor Mark Carney is not expected to hike rates until next year at the earliest.

For Canada’s real estate market, which has shown some signs of softening, the prospect of even cheaper mortgages could provide a welcome shot in the arm.

“The Canadian real estate market has nine lives,” said Benjamin Tal, deputy chief economist at CIBC World Markets Inc. “Every time it looks like it’s going to slow down, something happens somewhere else in the world and interest rates stay low. The market could have been a lot weaker if not for such things.”

Still, low interest rates can also send the wrong signal to some people, said Louis Gagnon, finance professor at Queen’s University in Kingston, Ont. “Many will enter the [real estate] market at prices that are too high, with very little equity, and they will run into trouble later when rates begin to go higher.”

With a file from Steve Ladurantaye

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Brocklehurst Home For Sale 3-1320 Selkirk Ave Beautiful, bright end unit in this great condo complex. Excellent starter or investment! This unit’s large eat in kitchen allows plenty of daylight to shine in through the big bay window at the front. Comes with convenient in suite laundry plus an extra large storage unit downstairs. Two parking stalls are provided as well as the large overflow lot at the back of the building. You will be impressed by the large amount of closet space, not to mention the two great sized bedrooms and spacious bathroom. Close proximity to transportation and schools.

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

Comparative Analysis By property type July 2011

Kamloops Real Estate Comparative Analysis by Property Type July 2011

Sales by subarea July 2011 Kamloops Real Estate Statistics

Kamloops Real Estate Sales by Subarea July 2011

MLS Activity July 2011 Kamloops Real Estate Statistics

Kamloops Real Estate MLS Activity July 2011

Kamloops Real Estate 1846 Grouse Crt Batchelor Heights Beautiful level entry Batchelor Heights rancher with a large, bright 1 bedroom inlaw suite with separate laundry. Hardwood flooring, and tile throughout the home. 3 bedrooms on the main floor with 2 full bathrooms, open floor plan with vaulted ceilings in the living room, beautiful river and valley views from the living space. Partially finished rec room in the basement allowing the main floor more living space. Heat pump (central a/c), central vac, roughed in for security, solar film on windows, lots of pot lights throughout, stainless steel appliances, 2 car garage, storage shed and hunter douglas window coverings with lifetime warranty. All appliances included (2 X fridge, 2 X stove, 2 X dishwasher, 2 X washer &  dryer), extra flooring for basement suite included. Suite previously rented for $1,100 per month. RV parking or room for 3rd car in driveway. Low maintenance yard with beautiful flower bed in front. Call for your appointment, some notice appreciated.

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