June 2012

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This article appeared in the Financial Post on June 21st, 2012.

OTTAWA — Without the tool of interest rates to temper the housing craze and with the threat of Europe still overhanging the sector, Ottawa had to use other means to slow things down and, at same time, lessen consumers’ exposure to the market.

For that, it chose once again to tighten the screws on mortgage lending, a move that surprised many, but one that Canada’s finance minister characterizes as the government’s role in providing a “prophylactic function” — helping average Canadians save themselves from themselves.

Jim Flaherty, who had insisted it was up to commercial banks to take the lead on mortgage lending, on Thursday took that action himself ­— reducing the amortization period for government-backed mortgages and limiting home equity loans, among other measures.

“The government doesn’t necessarily need to be, at the end of the day, in the mortgage-insurance business,” Mr. Flaherty told reporters. “But we are in the business, so we have to ensure that the exposure to the taxpayers of Canada is reasonable.”

Mr. Flaherty said he wanted to “avoid the kind of issues that have happened in other countries in recent years. And I’m satisfied we are and our market is OK.

“But I think there’s a prophylactic function for government on this with respect to insured mortgages and it’s our job to try to be ahead of things and act — and act in a measured way, listening to the market. And I have been listening to the market and, quite frankly, I don’t like what I hear, particularly in the condo market.”

Thursday’s announcement marked the third time in four years that Ottawa has gone this route to head off over-zealous borrowing by homeowners, many of whom might not be able to carry their debt load.

The new rules, which take effect July 9, will see the maximum amortization period for government-insured mortgages fall to 25 years from 30 years. The limit for borrowing against the value of a home drops to 80% from 85%, while the maximum gross-debt ratio is fixed at 39% and the total debt-service ratio will be 44%.

The biggest surprise, however, was a new rule to limit government-backed mortgages to homes purchased for less than $1-million.

“At long last, the Canadian government is coming to the realization that the ball was in its camp all along,” said Louis Gagnon, a finance professor Queen’s University.

Mr. Flaherty has been “reluctant over the past several weeks to further tighten these rules, arguing it was up to the banks to stop people at the gate,” he said.

“In fact, what we’re dealing with is a systemic issue. It’s really in the government’s hands,” Mr. Gagnon said. “It’s always going to be important for the government to be pro-active on this front.”

Mr. Gagnon added: “These new rules are long over due. We know the pace of growth of consumer loans is not growing, it has actually come down a bit, but not on the mortgage side.”

The Bank of Canada has reluctantly been waiting on the sidelines — even as household debt ballooned — waiting to see how the European fiscal crisis plays out, and what impact that will have on the Canadian economy and that of its struggling neighbour to the south.

The central bank’s trendsetting lending rate, its lever for guiding monetary policy, has been stuck at a near-record low of 1% since September 2010.

The initial intention was to get consumers and businesses spending again as Canada edged out of recession. That indeed worked — too well, as it turns out.

Debt-to-income ratio of Canadian households has reached a record high of 152%, once again raising alarm bells that consumers were getting in way over their heads.

Just last week, the Bank of Canada warned consumers to brace for a possible shock wave from a worst-case scenario — a European banking collapse followed a housing crash and a jump in unemployment.

For his part, Bank of Canada governor Mark Carney also welcomed the tighter mortgage-lending rules, calling them “prudent and timely measures” in a speech in Halifax on Thursday.

Mr. Carney said the measures “support the long-term stability” of the housing market and “mitigate the risk of financial excesses.”

And while Canada’s “favourable economic performance” has relied on strong household spending, growth cannot “depend indefinitely on debt-fuelled household expenditures, particularly in an environment of modest income growth.”

Speaking later to reporters, Mr. Carney once again stressed the “No. 1 domestic risk to the Canadian economy is the potential for household finances to evolve in an unsustainable fashion.”

“These measures reduce the No. 1 domestic risk.”

Aberdeen Kamloops Home For SaleGreat family home in a cul-de-sac in Aberdeen. Beautiful city and valley views from the kitchen and living room. 3 bedrooms on the main floor. Maple hard wood floors in the living room with a nice gas fire place. the basement features arched entries to kitchen and living room, central a/c, B/I vac. The kitchen leads to a partially covered deck with a gas hook-up, a low maintenance fenced yard that backs to a slope offering privacy and a wooden garden shed. 2 car garage with lots of storage.

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Sahali Townhouse for SaleCentrally located townhouse. Close to shopping, recreation, transportation, and schools. Is within walking distance of TRU. Nice open design with lots of natural light. Kitchen and dining room area are open to living room below with high ceilings. Main floor lining room has French doors leading to the deck. 2 bedroom and 2 full 4 pc. bathrooms. There is potential to put a 3rd bed/den (where weight room is located). 1 covered parking spot (garage) and 2 outside parking spots. This is an end unit and is located in a quiet area of the complex. Pets and rentals are allowed. All appliances a/c unit and window coverings are included. Flexible possession and easy to show.

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This article appeared on the CBC on June 18th, 2012.

Kamloops Water Front Homes PropertyLower prices are powering a large increase in cottage sales across the country, one of Canada’s largest real estate companies said in a report Monday.

Re/Max said sales of recreational properties such as cottages are higher in 70 per cent of 33 markets the agency tracks.

Forty-nine per cent of markets showing “downward trending” in prices, and 33 per cent showing no change. Only 19 per cent of markets that Re/Max tracks showed higher prices this year compared to last.

“Affordability has provided some serious stimulus,” Re/Max Atlantic region vice-president Michael Polzler said.

Activity is especially strong on the low end of the market, the report said, with many markets showing inventory shortages for properties priced at $400,000 and under.

“While buyers are still cautious, they’re motivated,” Re/Max’s Western Canadian vice-president Elton Ash said. “Current market conditions have placed them firmly in the driver’s seat.”

The mild winter weather brought purchasers out earlier in the year in many parts of the country, Re/Max said.

The recreational property market is also witnessing a demographic shift. Sales among baby boomers are much weaker compared to previous years, in part because lower prices for vacation homes in the southern U.S. are enticing some older Canadians to become snowbirds.

But younger families and first-time buyers have stepped in to fill the void in most markets, Re/Max’s report says.

The company singled out several markets as being “value markets” at the moment. They include:

Atlantic Canada, the Laurentians and Eastern Townships in Quebec,
More than half of Ontario — including the iconic Muskoka area
Lake Winnipeg, Canmore, Harrison Lake and Comox Valley/Mt. Washington in Western Canada.

“Opportunity does exist,” Ash said. “Canadians love a good deal, and there’s no question that there are still some to be had in recreational property markets across the country.”

This article appeared on the Vancouver Sun on June 19th, 2012 and was written by Jeff Lee.

Tobiano Real Estate PropertyOne of Canada’s best golf courses, the Tobiano Golf Course on Kamloops Lake, has been put up for court-ordered sale for $5.5 million.

The Thomas McBroom-designed 18-hole course, ranked as the sixth best public course in Canada and No. 16 in SCOREGolf’s Top 100 courses in Canada, was seized by the Business Development Bank of Canada last year after developer Mike Grenier was ousted by two banks that placed his overall Tobiano Resort complex into receivership.

The adjacent resort continues to be administered by a receiver acting for BMO. But in May B.C. Supreme Court allowed the Crown-owned BDBC to proceed with a sale of the golf course because it had specific guarantees tied to the golf course lands. .

Vancouver-based NAI Commercial Real Estate, which just listed the golf course on Multiple Listing Services, says the 231-acre golf course includes a clubhouse, pro shop and licensed 120-seat restaurant, course maintenance facilities, paved roads and parking.

© Copyright (c) The Vancouver Sun

Dufferin Kamloops Property for SaleCentrally located Dufferin home located in a cul-de-sac with a 1 or 2 bedroom suite and separate laundry. 3 bedrooms on the main floor with a nice open floor plan. Large patio off of the dining room and private yard. There is central a/c, UG sprinklers, tons of parking with room for RVs and all your toys, single car garage and storage shed. Nice view from the back of the home. Steps from transportation, shopping, and Kenna Cartwright Park. Not far from Dufferin Elementary and a quick commute to TRU and secondary schools. 24 hours notice for showings a must.

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Barriere Property Acreage Home for SaleThis private riverfront paradise on 6+ acres has a cozy 2 bedroom home, 16×20 shop, 10×18 greenhouse, woodshed, garden shed, new hay barn for 200 bales. Creek runs through property and joins river with water rights. Fenced for horse, and mostly flat. Cabins under 200 sq ft can be built without permits and would be a good income to rent to snowmobilers or campers. Backs onto logging road and crown land for miles of fun. So many uses for this amazing property you have to see it, and only 1 km to East Barriere Lake! Dog kennel fencing and metal fence panels not included.

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The Kamloops and District Real Estate Association has released it’s latest statistics for May 2012. Click on the image to enlarge.

Kamloops Real Estate Statistics

Kamloops Real Estate Comparative Analysis by Property Type May 2012

Kamloops Real Estate Statistics May 2012

Kamloops Real Estate Statistics Sales by Subarea May 2012

Kamloops Real Estate Statistics Information

Kamloops Real Estate MLS Activity May 2012

CMHC Canadian Mortgage and Housing CorporationVICTORIA, BRITISH COLUMBIA–(Marketwire – June 14, 2012) – According to Canada Mortgage and Housing Corporation’s (CMHC) Second quarter Housing Market Outlook British Columbia Highlights Report, housing starts in British Columbia are forecast to increase in 2012 and 2013.

“Home builders are expected to gradually ramp up residential construction in response to positive signals from the resale market and economic developments,” explained Carol Frketich, CMHC’s BC Regional Economist.

Housing starts are forecast to increase to 28,600 homes in 2012 and 30,100 homes in 2013. This increase in residential construction follows a period of stable home building in 2011. Job creation and population growth will boost single-detached home starts in 2012 and 2013. Multiple-family home starts will continue their upward trend.

The resale market is forecast to maintain balanced supply and demand conditions in 2012. A slightly higher sales-to-new listings ratio, reflecting stronger demand for ownership housing, is projected for 2013 alongside an expected modest pick-up in economic growth. Sales of existing homes are forecast to increase to 79,100 MLS®1 transactions in 2012 and 82,400 in 2013. The annual average MLS® price is forecast to moderate slightly to $548,100 in 2012 and increase to $566,900 in 2013.

More detailed CMHC housing market forecasts are available for the Vancouver, Abbotsford-Mission, Victoria and Kelowna Census Metropolitan Areas in the suite of Housing Market Outlook Reports available online. Forecasts for Prince George, Kamloops and Nanaimo are available in the Housing Market Outlook British Columbia Highlights Report.

As Canada’s national housing agency, CMHC draws on more than 65 years of experience to help Canadians access a variety of high quality, environmentally sustainable and affordable housing solutions. CMHC also provides reliable, impartial and up-to-date housing market reports, analysis and knowledge to support and assist consumers and the housing industry in making informed decisions.

For more information, and to download CMHC’s housing reports, please visit CMHC’s website at www.cmhc.ca/housingmarketinformation or call 1-800-668-2642.

1 Multiple Listing Service® (MLS®) is a registered trademark owned by the Canadian Real Estate Association

Logan Lake Kamloops Property for SaleThis home has great curb appeal. There is an awesome South facing view from the covered deck off the main floor family room. It has a nice floor plan featuring slate tile entry, spacious master with 2 piece ensuite, 2 more good size bedrooms, open living/dining room plus a bright eat-in kitchen with new laminate floor. It has newer furnace and HW tank and lots of potential in the basement- 4th bedroom, workshop, laundry, rec room and ample storage. The backyard is fully fenced with plenty of room for RV parking. Possession is flexible. Comes with stove, 2 fridges, 2 freezers, washer and dryer and furniture is negotiable. Your ideas and some TLC will make it shine!

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This article appeared in the Kamloops This Week on June 7th, 2012 and was written by Andrea Klassen.

A jump in residential construction, coupled with some big-ticket projects on the horizon, has the city of Kamloops rethinking its building-permit estimates for 2012.

In May, the city issued about $20 million in residential permits, more than double the $8.7 million it issued in 2011.

The permits included 15 new single family dwellings and 115 new multi-family units.

In May 2011, the number of multi-family units added was eight.

Acting director of development services Kundan Bubbar said developers are rushing to fill a residential void left by several quiet construction years.

“For the last couple years, we haven’t seen too many new residential houses being built,” he said.

“Now, the inventory is almost diminishing and builders are taking advantage of low rates and also the demand in the market.”

Permits are being issued mainly in Aberdeen, Westsyde, Batchelor Heights and Juniper.

To date, the city has issued more that $79 million in permits, up from $68 million at this time last year.

While the city had expected to issue between $120 and $140 million in permits this year, Bubbar said it’s now looking like Kamloops will be on par with last year, when permits totalled just over $162 million.

“It shows the city is not in the same position as the other Okanagan cities are, where things are slowing down,” he said.

“We are still doing better than the average.”

Commercial construction is also up slightly over last year, with $2.8 million in permits, compared to 2011’s $1.5 million.

Bubbar said there are also a few major projects coming which should keep permit stats high, including the $30-million Telus Data Centre, which is expected to finish the permitting process later this year, and several seniors’ residences in the works for the North Shore.

TORONTO (Reuters) – Canadian housing starts slowed as expected in May after a red-hot April, retreating to the average of the last six months, Canada Mortgage and Housing Corp said on Friday.

The seasonally adjusted annualized rate of housing starts was 211,400 units, compared with 243,800 units in April. The April figure was revised down from 244,900 units reported previously.

The number of starts in May was just below the forecasts of analysts in a Reuters poll, who had expected 212,000 starts.

“As anticipated, the pace of housing starts observed in April was not sustained in May. In fact, the pace in May was more in line with the average over the last six months,” said Mathieu Laberge, deputy chief economist at CMHC.

“Although some ups and downs are likely to continue in the months ahead, the pace of housing starts should trend lower as the year progresses,” Laberge said in a statement.

The slowdown was led by a decline in multiple family urban starts, which fell 20.7 percent to 125,300 units, while urban single starts decreased 4.2 percent to 64,300 units.

The seasonally adjusted annual rate of urban starts decreased by 15.8 percent to 189,600 units in May.

Canada’s hot housing market has sparked fears of a bubble, particularly in Toronto, Canada’s largest city, where low interest rates have driven a condominium building boom and double-digit annual price increases in existing home sales.

May’s seasonally adjusted annual rate of urban starts decreased by 35.8 percent in Québec, by 18.3 percent in Ontario, and by 7.7 percent in the Prairies. Urban starts increased by 6.4 percent in Atlantic Canada and by 20.9 percent in British Columbia. In each region, the decrease or increase was mainly due to changes in multiple starts.

(Reporting By Andrea Hopkins; Editing by Chizu Nomiyama)

Barnhartvale Kamloops Property for SaleAmazing view from this 3 bed, 2 bath home with a huge covered patio perfect for entertaining that leads to landscaped, fenced backyard. Den could easily be a 4th bedroom. Lots of parking and room for your RV. Large single garage with extra room for tools or your toys. Nothing can be built in front so the view stays. Big rec room and hobby room that could be home theatre or games room. Open floor plan on the main with views from the whole front of the house.

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This article appeared in the Kamloops Daily News on June 4th, 2012 and was written by Sylvie Paillard.

Downtown Kamloops Economy Business OpportunityDespite jumping the gun on the start-up of Ajax Mine, a magazine article’s accolades for the business climate in Kamloops is still good news for the City by all accounts.

A combination of nature and nurture makes Kamloops the best place for business in B.C., and among the top three in western Canada, according to Venture Alberta magazine, a 15-year-old publication that boasts more than 160,000 business readers.

“We look at hard indicators like business tax, median income and average lease rate,” said Venture Alberta editor Michael Ganley. “But there’s also a lot of softer stuff, like a community that’s close to the mountains and has got some great swimming.”

The city’s strength in mining also boosted its ranking, despite the magazine’s incorrect report that Ajax mine started up a year ago and employs more than 850 people.

The magazine’s editorial staff took in 85 applications from communities from Saskatchewan to B.C. and settled on Kamloops as its top pick of the 25 best, based mainly on its new reputation as a hub for tech companies.

“That’s an industry of the future,” said Ganley. “Working on becoming a centre for IT, for communications, that set it apart.”

Q9 opened its six-megawatt data storage facility in April of 2010. It’s currently used to store information for the B.C. government. Just next door, Telus is building a $75-million facility set to open some time in 2013. The communications giant plans to invest $100 million in the city over a three-year period.

The magazine also points to developments in the business sector as a boon. Kamloops licensed 5,512 new business permits in 2011, a slight increase of 1.7 per cent from 2010. It also increased its annual construction value in the commercial, industrial and institutional sectors by nine per cent, to $57 million in 2011.

Despite the erroneous reference to Ajax, mining still gets top billing for its investment.

Rick Robertson, an owner of Robertson MFG, a Kamloops-based supplier of core and soil-sample boxes for the mining industry, is among the entrepreneurs benefiting from the area’s natural resources.

“We’ve got tremendous mining development potential and longevity,” he said.

Kamloops-North Thompson MLA Terry Lake says the area is naturally suited to be an IT hub since fibre optic networks follow the railway lines with CN Rail and CP Rail coalescing in the City. And its natural resources give it prominence for investment as well.

But there’s no forgetting the City’s business nurturing aspect.

“Venture Kamloops is getting stronger and stronger,” he said, referring to the City’s business information and economic development organization.

“People who are looking to do business here can find out about it in a very short period of time and that wasn’t always the case.”

To hear him speak of selling the area, Venture Kamloops executive director Dan Sulz makes it sound easy.

“I keep saying it’s really going to be our time to shine,” he said. “Because of the diversity of our economy, there’s a business case for businesses to be here but there’s also a reason for people to visit here as well.”

Diversity of industry attracts investment from firms that know skilled employees will be attracted to areas where they can live and work, said mayor Peter Milobar.

“The strength of our diversification and the wide variety of things that we have driving our economy are all strong and stable right now,” he said.

And with the City’s focus on balancing business, social issues and public amenities, Venture Kamloops will have plenty to boast about, said Milobar.

“Venture Kamloops is instrumental in trying to get the word out there to the broader investment community and publications and articles like this are another tool that they can use to effectively demonstrate what they’re saying is backed up by other people.”

Read the Alberta Venture profile for Kamloops.