New-home HST Break ‘Great News’, The Kamloops Daily News

This article was written by Cam Fortems of the Kamloops Daily News on February 17th, 2012.

The HST will be gone in April next year but B.C.’s residential construction industry gets a bonus starting a year earlier.

Finance Minister Kevin Falcon announced new transition rules Friday intended to end uncertainty among new-home buyers. As of April 1 this year it will increase the threshold from $525,000 today up to $850,000 for which there is a full rebate on HST.

The measure means more than 90 per cent of homes will be eligible for the full rebate of up to $42,500. The same rebates will be extended to second and recreational homes outside the Lower Mainland — a first.

Kamloops-South Thompson MLA Kevin Krueger blamed anti-HST campaigner Bill Vander Zalm and the Opposition New Democrats for spreading misinformation about the affect of the HST on new home purchases.

“We don’t want people to hold off (purchasing a new home) because they think they’ll save money — they won’t,” Krueger said of the new rules.

“There’s never been a better time to build a house. Interest rates are at the lowest we’ve seen in our lifetime.”

Brian Hayashi, president of the Kamloops branch of the Canadian Homebuilders Association, said the industry has suffered under misperceptions from potential buyers — something that should end with the new rules.

“There’s been a lot of uncertainty about what will happen with the HST,” he said.

“There’s been huge misunderstandings, just in speaking with clients and hearing stories…. It’s really slowed things down.”

Sun Peaks Mayor Al Raine predicted the tax break on second or recreational homes, with the same $850,000 threshold, will help a recovering real estate sector on the mountain, where prices are down about 10 to 15 per cent and inventory is high.

“It’s great news,” said Raine, who argues the province must do something to level the playing field with the inexpensive American market.

“I’ve written enough letters to both levels of government. People forget British Columbians are free to buy recreational property wherever they wish.”

Raine called the $850,000 threshold for a full rebate on a new recreational home “perfect.”

While there are some new homes in the Kamloops market that sell for more than $525,000, particularly at Sun Rivers, Hayashi acknowledged pushing up the threshold won’t have a huge effect here.

The biggest move could be extending the tax break to recreational housing.

“I’m thinking around here that (second home tax break) might have a bigger impact and offset migration down south…. Now a place out at Scotch Creek or somewhere else in the Interior might be a little more appealing.”

Doug Wittal, the Kamloops builder who leads the provincial association, said extending the rebate to second homes will lead to a “huge boom” and more jobs.

B.C. Finance Minister Kevin Falcon said the changes ensure that there is fairness through the transition period and provides a road map for the housing industry to make the transition back to the PST as smooth as possible.

“The homebuilding industry has been really looking for clarity and certainty, and that’s exactly what we will be delivering here today,” Falcon said at a press conference attended by homebuilding industry stakeholders.

After the HST-end date, those who buy a home built before April 1, 2013 will have to pay a two per cent transition tax on the full house price.

Falcon rejected comments from critics who suggest the government should be able to dump the entire HST by April 1 this year.

“I can’t agree with those who say, ’Gee, it took 11 months to get into this thing, I don’t think it should take any longer to get out,” said Falcon. “When you are going backwards, this is uncharted territory. It takes time to do it right.”

The change to the HST, a blending of the PST and the five-per-cent federal goods and services tax, was announced by then-premier Gordon Campbell and his then-finance minister Colin Hansen shortly after the 2009 election.

Anger over the implementation of the tax set off a province-wide referendum, and the tax was voted down last year.

The B.C. government announced last month it had worked out an agreement to pay back the $1.6 billion the federal government paid to the province in transition money.

While the province has to pay all the money back, it’s getting a $118-million break on interest and will be able to repay the money in installments over five years.

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Home Sales Rise Outside Lower Mainland, BCREA

Vancouver, BC – February 15, 2012. The British Columbia Real Estate Association (BCREA) reports that the dollar volume of homes sold through Multiple Listing Service® (MLS®) in BC dipped 7.6 per cent to $2.1 billion in January compared to the same month last year. A total of 3,976 homes traded hands on the MLS® over the same period, down 3.9 per cent. The average MLS® residential price was 3.8 per cent lower at $527,219 compared to January 2011.

MLS Residential Sales BC January February 2012

Click to enlarge

“Increased market activity outside the Lower Mainland in January was offset by fewer sales in Vancouver and the Fraser Valley,” said Cameron Muir, BCREA Chief Economist. MLS® Residential sales rose 7 per cent to 1,620 units outside the Lower Mainland, while declining 10 per cent to 2,356 units in Vancouver and the Fraser Valley.

“While provincial sales activity was down in January from year ago levels, consumer demand has posted modest improvement since last fall, driven by low mortgage interest rates and gradually improving economic conditions,” added Muir.

Full article click here.

Home Foreclosures Skyrocket in Kelowna, CBC News

This article appeared on the CBC news website on February 15th, 2012. I found this article interesting only because I have noticed an increase in the number of court ordered sales in Kamloops over the past year or so. Kelowna is a close neighbour and some of the economic factors that affect them also are present here in Kamloops.  There is a video on the CBC news website with this story. Click here to see the video.

Foreclosure Home For SaleHome foreclosures are on the rise in B.C.’s Central Okanagan in recent months, but local real estate agents disagree about who might be losing their homes.

There are more than 170 court-ordered sale properties on the market in the Central Okanagan, more than 10 times more than three years ago.

Real estate agent Jason Neumann says according to his estimates, in the last 30 days alone 60 new foreclosures were put on the market, and he calls it a disturbing trend.

Foreclosure are up in the Central Okanagan according to local real estate agents. Foreclosure are up in the Central Okanagan according to local real estate agents. (Reed Saxon/AP Photo)

Neumann is worried the number of foreclosures will bring the overall market down, hurting anyone who wants to sell their home.

“What do you tell your sellers that are not in foreclosure that are now up against something they didn’t see coming? It’s one of those things where the bank is going to have to do what it’s got to do to get it sold.”

Neumann thinks many working class families are losing their homes, but not all real estate agents agree.

Elton Ash, the vice-president of Remax Realty in Western Canada, says most of the foreclosed properties are from people who were trying to flip homes during the hot market a few years back.

“People weren’t able to achieve their goals in doing this and so they quit making payments,” he said.

“The market in the Okanagan has really come to a standstill on that speculative investment front, and that is really what has been a major portion of the court-ordered sale thing that has increased so dramatically.”

Ash says many Canadians are now buying vacation homes in the U.S., where prices are currently low, but he predicts prices will eventually rise in the U.S., and investment home buyers will again look to Kelowna.

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Average Performance for Housing Market in 2012, BCREA First Quarter Housing Forecast Update

Vancouver, BC – January 27, 2012. The British Columbia Real Estate Association (BCREA) released its 2012 First Quarter Housing Forecast Update today.

MLS Residential Sales BC January 2012BC Multiple Listing Service® (MLS®) residential sales are forecast to increase 2.1 per cent from 76,817 units in 2011 to 78,400 units this year, increasing a further 2.7 per cent to 80,500 units in 2013. The 15-year average is 79,000 unit sales. A record 106,310 MLS® residential sales were recorded in 2005.

“While European sovereign debt concerns and a sluggish US economy will continue to impact consumer confidence, strong demand in the bond market is expected to keep mortgage interest rates at or near record lows for most of 2012,” added Muir.

Home prices in most BC markets are forecast to experience little change over the next 24 months as the supply of homes for sale more closely matches consumer demand. The average MLS® residential price in the province is forecast to edge down 2.2 per cent to $548,500 this year and remain relatively unchanged in 2013, albeit increasing 0.8 per cent to $553,000.

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