Thursday, August 14, 2014

Housing starts showing signs of easing over next two years: CMHC



By The Canadian Press
OTTAWA - Canada's housing market may start showing some signs of easing over the next two years as new construction begins to slow and sale prices climb down slightly, according to the latest forecast by the Canada Mortgage and Housing Corp.
The national housing agency is forecasting housing starts in Canada to range between 179,600 and 189,900 units in 2014 on an annual basis, dropping to a range of between 163,000 and 203,200 units in 2015.
“Recent trends have shown an increase in housing starts, which is broadly supported by demographic fundamentals," said Bob Dugan, chief economist at CMHC.
"However, our latest forecast calls for starts to edge lower as builders are expected to reduce inventories instead of focusing on new construction," Dugan said Wednesday.
The third quarter outlook also says that Multiple Listing Service sales are expected to range between 450,800 and 482,700 units in 2014, with an average price of between $394,700 and $405,700.
In 2015, the CMHC says Multiple Listing Service sales are expected to range from 455,800 to 502,900 units, with and average price of $396,500 to $416,900.
"It certainly seems like the soft landing picture is unfolding," said Benjamin Reitzes, a senior economist with the Bank of Montreal.
"Housing has remained resilient despite continuous calls for prices to collapse, or sales to collapse or condos to collapse. Sales have remained consistently strong and you've also seen construction remain consistently strong pretty much to everyone's surprise."
Sales should begin to slow down next year as interest rates begin to rise, which will lead to construction slowing down as well, he said.
Construction is currently at about 200,000 units on an annual basis, Reitzes said, but should go down to between 180,000 and 190,000 to avoid oversupply.
When it comes to pricing, he added, a lot depends on what market home buyers are in.
"You have a hot market in Toronto, a solid market in Vancouver and a very hot market in Calgary. Those are the areas that are really driving price gains throughout the country," he said.
In its forecast, the CMHC said housing starts in the Prairies are projected to increase to 52,900 units in 2014 before moderating to 50,800 in 2015, as net migration to that part of the country is expected to decline from the record achieved in 2013, as is employment growth.
Ontario housing activity will regain momentum through the course of 2014 before easing later in 2015, with housing starts in that province ranging between 50,900 and 63,300 units over the next two years.
Quebec housing starts are expected to amount to 38,400 units in 2014 and 38,700 units in 2015, as moderate economic and employment growth will hold back demand for existing and new homes.
In Atlantic Canada, housing starts are expected to decline close to 14 per cent in 2014 and a further three per cent in 2015, amid a slowdown in economic growth.
Earlier this week, CMHC said in its monthly update that housing starts increased to a seasonally adjusted annual pace of 200,098 in July, a slight increase from 198,665 in June.
It was the fifth consecutive monthly increase in new housing construction, with gains in urban starts were concentrated in Ontario and Atlantic Canada, while the Prairie provinces and Quebec all recorded declines. There were also modest decreases in British Columbia.
On Wednesday, the Teranet National Bank National Composite House Price Index reported home prices were also up in July, rising 1.1 per cent from the previous month and exceeding the historical average for July. The index measures price changes for repeat sales of single-family homes.
A separate condo report commissioned by Genworth Canada, also out Wednesday, found that population, economic and employment growth all point to a stabilizing of the Canadian condominium market, suggesting that while pockets of higher risk still exist in Toronto and Vancouver, a broad-based downturn is unlikely.
https://ca.finance.yahoo.com/news/housing-starts-range-between-179-600-189-900-124843657.html

Wednesday, August 13, 2014

6 things to ask when buying a cottage




Buying a cottage can be complicated. Water potability, septic systems and what happens if the lake level changes are all questions you to need answer.


Mark Weisleder Real Estate, Published on Fri Jul 25 2014
Buying a house in the city or suburbs can be complicated enough, but buying a cottage or vacation property outside of town requires even more due diligence.
In town, you probably wouldn’t ask if the water coming out of the tap is drinkable. Nor would you wonder if the plumbing was hooked up to the sanitary sewer. But these are exactly the sorts of questions you should ask when buying a cottage, plus a few more.
1. Get an inspection: Cottages are usually occasional residences and so may not be as properly maintained as they should be. This is why every purchase should be conditional on a satisfactory professional home inspection. If the cottage has a wood-burning stove or fireplace, then a certificate must be requested from a Wood Energy Technical Transfer specialist, to confirm that the system was installed and is operating correctly. To find out more about this, go to wettinc.ca.
2.Is the water drinkable? There are two areas of concern when it comes to water — the quantity and quality. .
Ask the sellers for these things:
·  A potability certificate from the local health authority, confirming the water is safe to drink;
·  Confirmation that the well, the pump and related equipment have performed adequately during the seller’s occupancy;
·  Confirmation that there is an adequate rate of flow for normal household use;
·  Provision of a well driller’s certificate, if available; and
·  The location of the well.
A separate inspection may be needed. If nothing else it gives you an idea of what it would cost to replace the well if it fails.
Related: Is cottage a matrimonial home? A $500,000 question
3. How’s the septic system? Septic systems present their own difficulties because it is usually difficult to tell during an inspection how long the system may last. The replacement cost can be up to $20,000, especially if there are stringent environmental regulations in your area.
You want to know whether:
·  The system was installed with all necessary permits;
·  The system has been adequately maintained and is working properly;
·  The seller will provide copies of any inspection or approval reports;
·  The seller agrees to pump out the tank at their expense prior to closing; and
·  There are no work orders on file with the Ministry of the Environment or the local municipality.
The buyer should arrange for their own separate inspection of the system itself.
4. What’s the road allowance? Even if your cottage fronts on water, this does not mean you own the land up to the lake. The first 66 feet fronting onto the lake is typically owned by the local municipality and is referred to as the shore road allowance.
Although you have access to the water, you can’t stop others from using it. Nor can you build anything on that 66-foot piece of land. Many cottagers have found out afterwards that either all or part of their cottage was built on land that they do not own.
You may be able to buy the land from the municipality or the province, as the case may be.
5. What about Hydro easements? Check to see if there are any hydro poles or lines on the property. It is possible that Hydro has easements which could affect where your cottage can be built that are not registered on title.
6. Access to the cottage: If you do not have year round access by a city road, then you must ask how you get from the road to your property. If it is a private right of way over a neighbour’s land, you must understand the terms of this agreement to ensure it is year round access and it is clear who is responsible for maintaining the road.
If there is no registered right of way, it can be a nightmare, with owners fighting over who owns it.
In addition, check the local zoning by-laws to make sure the property is not zoned only for “seasonal” use. In these cases, the municipality may not be providing road maintenance, snow removal, garbage pick up or emergency services during the winter.
By being properly prepared before buying a cottage, you will avoid unwelcome surprises after closing.
http://www.thestar.com/business/personal_finance/2014/07/25/6_things_to_ask_when_buying_a_cottage.html

Thursday, August 7, 2014

Summer earnings may not be enough




The poll found that among students working this summer, nearly half (45 per cent) are making $11.00 per hour or less, and 60 per cent are working part-time hours. As a result, most college and university students (73 per cent) will also need to work during the school year to support their education expenses. This suggests that many students are struggling to cover their school bills with summer employment alone. Ms. Kramer notes that it is critical these students build and stick to a realistic budget while working in the summer to make it easier to manage expenses once back at school. "It's never too early to get sound financial advice. Sitting down with an advisor in the summer can go a long way to understanding what the real costs are going to be and setting a plan to best manage their finances throughout the year."
Advice for students to help manage spending
  • Create a Budget - Having a plan in place before school starts can help you make the most of your resources.  Talk to an advisor or use the CIBC online Budget Calculator to get a clear picture of all your expenses, and how much you have to spend.
  • Stick to your plan - Once you have a plan in place, stick to it. If you fall off track, get back to your budget as soon as possible to keep your expenses in check.
  • Track your spending - Use the CIBC Mobile Banking App to see account transactions and balances in real time. Services such as CIBC CreditSmart® can also help students stick to their budget, by allowing you to set a budget limit on each spending category on your credit card, and be notified by phone, email or online message when you exceed your customized budget.
  • Student Banking Offer - CIBC offers a bank account for students with free unlimited banking transaction fees and no monthly fees. CIBC Advantage® for Students gives you the comfort of knowing that your everyday banking won't lead to unexpected charges at the end of the month.
KEY POLL FINDINGS - NATIONAL
Percentage of college or university students who currently have summer jobs:
Have a paying job
65%
Have not been able to find a job
20%
Not working this summer
10%
Volunteering/unpaid position
5%
How much college or university students expect to earn over the course of the summer:
$1,000 or less
10%
Between $1,001 and $5,000
53%
Between $5,001 and $10,000
26%
Between $10,001 and $15,000
7%
More than $15,000
4%
How college or university students expect to proportionately spend the money they will earn this summer:
Tuition/school expenses
31%
Living expenses
25%
Entertainment/personal expenses
20%
Saving for future
19%
Other
5%
Results are based on a CIBC poll conducted online by Leger, which surveyed 500 Canadian university or college students. The associated margin of error for a probabilistic sample of the same size is +/-4.38%, 19 times out of 20. Polling was conducted between July 11 and 17, 2014.
https://ca.finance.yahoo.com/news/cibc-poll-despite-summer-jobs-080000409.html