National prices continue gains in first two months of 2012

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If national real estate prices are to begin to decline or stabilize this year, it’s not going to be happening in the first few months.National prices continue gains in first two months of 2012

Survey: Sector less optimistic about commercial real estate

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Survey: Sector less optimistic about commercial real estate

The commercial real estate market in the first three months of 2012 looks very much like 2011’s, according to a new survey of sector players, identifying only modest improvement over last year.

“2012 real estate conditions are expected to remain relatively stable, with 50 per cent of respondents providing an entirely neutral outlook for the coming year,” according to the REALpac/FPL Canadian Real Estate Sentiment Survey, released last week and measuring the current and future outlook of 55 industry executives. “Eighty-seven percent of respondents report increased asset values from those of a year ago, though respondents expect asset values in 2012 to be much more stable.”
Billed as Canada's most comprehensive measure of senior executive confidence in the domestic commercial sector, the survey’s first quarter index reading came in at 61 out of a possible score of 100, slightly up from 60 last quarter but down from 71 one year ago.
A growing divide between respondents’ perceptions of the current market conditions and those in the future has started to emerge, scoring 64 and 58, respectively.
That reflects the expectation of a declining rate of market improvement, although does not, according to survey authors, reflect an expectation of decline.
That growing discrepancy between today and tomorrow’s commercial sector mirrors overall projections for the Canadian economy.
Analysts are anticipating that GDP growth in the last quarter of 2012 will come in just under the 2 per cent growth expected for all of last year.
That trend will likely carry over into this year and next, according to some economists, although most are waiting on official Q4 results due out this week.
Written by Vernon Clement Jones

Courtesy of  http://www.CanadianRealestatemagazine.ca

Interest rates to keep buyers active this year:

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Interest rates to keep buyers active this year: CREA
While prices are higher this year, lower interest rates will keep buyers active, according to a new forecast.

The Canada Real Estate Association (CREA) said today that home sales activity in Canada will remain relatively unchanged in 2012 from last year, although average prices will be lower in two years than they are now.

National resale housing activity will gain 0.3% from the 457,305 sales last year to reach 458,800 this year, said the CREA

Is it Time to Pop the Hood on Real Estate Commissions?

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What is it about Real Estate that encourages such a firestorm when it comes down to payment for services rendered? Why is it that REALTORS® face such scrutiny for charging commissions? Is it about the amount? Is it about the service? Is it that consumers feel that there is an inequitable gap between value and dollars paid?

Commerce, in its most basic form, comes down to providing a product or service in exchange

for some sort of compensation. In virtually every industry designed for profit, this is a common

practice, easily accepted and done both by consumers and providers of said service.

What is it though, about Real Estate that encourages such a firestorm when it comes down to payment for services rendered? Why is it that REALTORS® face such scrutiny for charging commissions? Is it about the amount? Is it about the service? Is it that consumers feel that there is an inequitable gap between value and dollars paid? Herein may lie the problem. The problem with concept of value in a transaction is that it is subjective and that varies depending on the context. There has been a concerted campaign on behalf of REALTORS® to help to articulate the value that they bring to the table, but perhaps this needs to go further, to help the public both understand the concept of value as it applies to

REALTOR® commissions, and how the mechanics of the industry themselves work.

What Makes Borrowers Tick (And What Ticks Them Off)

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Here is an interesting article I thought I should share.
What Makes Borrowers Tick (And What Ticks Them Off)

New Mortgage Changes

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Since October 2009, the Government of Canada has been systematically tightening mortgage financing regulations for all federally regulated lenders. The changes have been made in order to ensure that Canadians are prepared for higher interest rates in the future by not taking on too much debt, which will improve the stability of Canada's housing market.


On January 17, 2011, Federal Finance Minister Jim Flaherty announced additional changes to the rules for government insured mortgages.

 Three new measures that have been announced are as follows:


New Guidelines – Effective March 18th 2011

1) Lowering the maximum amount consumers can borrow when refinancing their home

This change will lower the maximum mortgage amount for refinances to 85% of the appraised value of the property from the current 90%. This change will help to promote savings in homeownership and ensure that homeowners don’t become overextended by using all the equity they have built up in their home when refinancing.

2) Reducing the maximum amortization period for new government insured (default insured) mortgages

The maximum amortization for all new default insured mortgages will be reduced to 30 years from the current 35 years. This change will help reduce total borrowing costs for consumers, helping them to build up equity more quickly.

As an example, a $300,000 mortgage with a 4.5% interest rate and an amortization of 35 years has a monthly payment of $1412.05 and total interest cost of $293,059.17 over the life of the mortgage. The same mortgage with a 30 year amortization has a monthly payment of $1512.65 but total interest cost reduces to $244,551.49. The difference of roughly $100 a month in monthly payment reduces the interest cost by almost $50,000 over the life of the mortgage.3) Withdrawing government insurance backing on lines of credit secured by homes


Home equity lines of credit generally offer a variable interest rate and often have no repayment terms associated with them, which exposes borrowers to an increase in interest costs should interest rates as expected. Due to an increase in the household debt associated with these loans, the federal government wants to limit the amount of equity for which these loans can be granted

Loans that have repayment terms associated with them will still be eligible for default insurance.

3) Withdrawing government insurance backing on lines of credit secured by homes


Home equity lines of credit generally offer a variable interest rate and often have no repayment terms associated with them, which exposes borrowers to an increase in interest costs should interest rates as expected. Due to an increase in the household debt associated with these loans, the federal government wants to limit the amount of equity for which these loans can be granted

Loans that have repayment terms associated with them will still be eligible for default insurance.

Update on the CREA v Competition Bureau case

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Update on the CREA v Competition Bureau case