“Everyone wants a house or condo that will be perfect the minute they move in so they only have to do the minimum amount of work to it,” says Barbara Sukkau, president of OREA. “But with the price of houses continuing to rise, and some buyers desperately looking for a family home in a seller’s market, it may not be an option for all buyers. Buying a property that needs work can be a way to save on the overall cost even when you factor in the cost of an extensive renovation,” says Sukkau.

OREA recommends potential homebuyers work with their Realtor to identify properties that will build equity after improvements are made but still remain in budget. Together with their Realtor, homebuyers should research what the top homes in the neighbourhood sell for before buying a fixer-upper.

“It doesn’t make sense to invest $100,000 worth of renovations in a property if the other homes only sell for fifty thousand more than what you bought the house for,” says Sukkau. “Buying a house that needs renovation should grow equity — not become a property that’s too expensive for the neighbourhood when you want to sell.”

Sukkau says there are other benefits to buying a property that needs renovation, such as the fact that HST does not apply to the price of a resale home, unlike newly built homes, which can save a homebuyer thousands of dollars. Also, the federal government currently offers grants up to $5,000 to owners who want to make their home more energy efficient. If an older home needs new windows or a new furnace, then homeowners can apply for the grant for this cost. And finally, renovating a home lets the homebuyer add their own personality to the space and determine what’s most important to them. Newly built homes, while beautiful, can have a cookie-cutter feel and look very similar to the other homes in the neighbourhood.

No matter if a homebuyer decides on a fixer-upper or a property that needs no improvements, according to Sukkau the most important thing is for potential homebuyers to know their budget and stick to it. “Before looking at any home, discuss with your Realtor what your budget is for both the property and any possible renovation. Even though it is difficult, remain emotionally detached when looking at homes, and if a property is beyond your means, then move on to the next one,” says Sukkau.

A video about how to calculate home affordability is available here. More information on buying a property can also be found at howrealtorshelp.ca.

As for the causes of this large gap, the authors pinpoint three economic factors: the supply of rental accommodation, the state of the labour market and the rate of in-migration. However, the authors argue that the overriding factor is the supply of rental accommodation or affordable housing.

As Calgary’s labour market expands, more and more people are attracted to the city, therefore increasing the demand for rental accommodation. Data used in the study indicates that there are 38 rental units per 1,000 people in Calgary.

“With a small and falling supply of rental accommodations and the local housing market’s failure to expand supply, this results in upward pressure on shelter use,” the authors write.

Meanwhile, in Edmonton there is a larger supply of affordable housing at 86 units per 1,000 people. The authors argue this allows the city to adjust more easily to in-migration and curtails their homelessness numbers.

The authors note with concern the possibility that the recent fall in shelter use is due to the recent slowdown in the Calgary economy and that shelter use will increase again when the economy recovers.

Therefore, the authors recommend that ways be found “to engage the energy and efficiency of the private sector” to increase the supply of rental accommodations in Calgary. In this way shelter use might permanently be reduced. Based on previous research by The School of Public Policy, possible measures could include implementing a housing tax credit modeled on the US Low Income Housing Tax Credit; relaxing current rules for investors in multi-unit rental buildings on the use of the capital cost allowance when there is a rental loss; and controls on demolition and condominium conversions.

The paper can be found at http://policyschool.ucalgary.ca/publications

“Our research indicates that Canadians don’t stay in one home too long,” says Farhaneh Haque, Director, Mortgage Advice, TD Canada Trust. “Before making the decision to move, explore all your options and ensure that your new home will suit your changing needs and lifestyle.  It might be more affordable to renovate and make your current home work for you.”

The top five features that Canadians felt they compromised on when they purchased their previous home that they are not willing to budge on this time are price (34%), layout of home (33%), features of home (31%), garage or sheltered parking (30%) and number of bedrooms (28%).

“If you are dissatisfied with something like the layout or features of your home, a renovation can be a convenient option to save the hassle and expense of moving. A Home Equity Line of Credit will allow you to use the equity you’ve built up in your home to finance the renovation.  Further, if you do ultimately decide to sell, the renovation could increase your resale value,” says Haque.

Fifty percent of repeat buyers considered a Home Equity Line of Credit (HELOC) and are just as likely to say they would like to have it simply as a cushion (46%) as for the purposes of a renovation (45%). Thirty percent would use the line of credit for investment purposes.

Timing is everything: Canadians think it’s a good time to buy – and to sell

In this year’s survey, Canadians were more likely to say that investment opportunities and market conditions played a factor in their decision to buy another home (both at 21% versus 15% in 2010). The large majority (82%) plan to sell their current home and of those who are selling, four in five expect to sell at or above asking price (78% versus 66% in 2010).

Among those who have purchased a second home and do not plan to sell their previous home, 42% will keep the first home as a rental property.  More buyers this year than last indicated that they will stay in their current home and the new home they purchase will be a rental property (32% versus 20% in 2010).

Interestingly, there was a big increase this year in the number of buyers who said that rather than selling their current home, a family member will move into it (12% versus 4% in 2010).

“Buyers should keep in mind that if they are expecting to sell above asking price, it’s likely they will need to also buy at above asking price,” says Haque. “A home is, obviously, a very big purchase – especially if you will not be selling your previous home to put towards the cost. A mortgage expert at your bank can walk you through your financing options and show you strategies and products that may save you money and provide flexibility over the course of your mortgage.”

Canadians are savvier sellers than last year

The report showed that 63% of Canadians have a mortgage on the home they are moving from and 69% will take out a mortgage on their new home.

In 2010, nearly three in ten Canadians (27%) who planned to sell their home didn’t know they had options when it came to their mortgage.  This year, that number decreased to only 9%.  Thirty-eight percent of sellers say they will bring their mortgage with them and 14% say they will use it as a selling feature. Although they say they are aware of the options, 39% haven’t considered what they will do.

“It’s just as important to consider your mortgage options as a seller as when you are buying. You may be overlooking your mortgage as an important selling feature of your home or you may be able to save money by keeping your low rate and bringing your mortgage terms with you. Talk to an expert to find out what option might work for you,” says Haque.

Three-dimensional entertainment is the hottest trend, both at home and in theaters, and it doesn’t show signs of abating any time soon. If you’ve already decided to make the commitment to a 3-D TV, it probably makes sense to create an optimum viewing environment so you can get the most enjoyment out of your investment.

Whether you’re creating a 3-D home theater from scratch or upgrading an existing home theater to 3-D, you should keep a few considerations in mind. The home entertainment furnishing and accessories experts at Sanus offer some advice for your 3-D home theater:

Bigger is better

While advances in high-definition viewing mean you can now get a great image on virtually any size set, when it comes to 3-D viewing a larger screen will provide optimum enjoyment. Choose the largest screen you can afford and that you have space for. You’ll also need to arrange seating to allow more distance between the larger 3-D TV and your eyes, to help minimize eye strain. Sanus recommends positioning a TV so your eyes are level with the middle of the screen. For most people, this is between 40 and 60 inches off the ground.

A wall mount that provides a full range of motion, like the VLF311 Super Slim, will make it easier to achieve the proper distance and viewing angle for your 3-D TV. Plus, wall mounting a flat screen more closely evokes the movie theater experience.

Dark is desirable

Minimizing light is important for any home theater, but even more so for 3-D viewing. No matter how good your 3-D set is, if the room is too bright your enjoyment of the images will suffer; 3-D images are significantly less bright than 2-D ones. If you’re lucky enough to have a dedicated home theater room, paint the walls in dark colors. Use carpeting to eliminate reflection off floors, and room-darkening blinds or drapes to cover windows.

Be aware of items in the room that might create reflections such as glass or lights near the screen. Move items away from the screen that might distract your vision. For example, if you choose to wall mount your 3-D TV above a fireplace, remove everything from the mantel beneath it and cover the glass fireplace screen with something nonreflective.

Functional furnishings

After spending the money on a 3-D TV, it would really drag down your home theater experience to have components like your 3-D Blu-ray player sitting on the floor. Furnishings made to house components not only create a neat, orderly environment, they can help protect and preserve expensive electronic equipment.

You can find a wide variety of home theater furniture, from speaker stands to devices that mount components on the wall, at sanus. Finally, don’t forget to include a dedicated place to store and charge your 3-D glasses. These costly, delicate devices are essential for 3-D viewing, and it will be more cost-effective in the long run to spend a little bit of money creating a safe spot in which to house them, than it will be to keep replacing lost or damaged ones.

Original article ARAContent

“Housing starts increased modestly in May due to an increase in multiple construction in most provinces and in rural starts,” said Bob Dugan, chief economist at CMHC’s Market Analysis Centre. ”The increase in multiples and rural starts was partly offset by a decrease in single starts.”

Urban starts increased 0.8 per cent to an annual rate of 161,000 units in May. Urban multiple starts were up four per cent to 100,000 units, while single urban starts fell 4.1 per cent to 61,000 units. May’s annual rate of urban starts increased 33.3 per cent in British Columbia, 13.5 per cent in Quebec, 11 per cent in the Atlantic region and 10 per cent in the Prairies. Urban starts fell 22.9 per cent in Ontario.

Rural starts were estimated at a seasonally adjusted annual rate of 22,600 units in May. TD Bank economist Francis Fong said in a note that affordability is beginning to erode as home price increases have significantly outpaced income and job growth.

“With the Bank of Canada set to raise interest rates later this year affordability will weaken further, putting downward pressure on overall prices and, thus, construction activity,” Fong wrote.

“TD Economics anticipates housing starts to run below their long-run sustainable level over the next few years as multi-unit building slowly unwinds.”

CIBC World Markets economist Krishen Rangasamy said housing starts reached a peak of around 200,000 in the first quarter of last year and the numbers have been on a gradual decline ever since, even with low interest rates.

“And with a recent softening in the pace of existing home sales, the listing to sales ratio rose to a seven-month high in April. So, we may see some softness ahead for housing,” Rangasamy said.

“We expect housing starts to continue to soften — a 10 per cent or so drop in starts compared to last year — as home prices stagnate in light of higher interest rates in the second half of the year.”

Asking Price $315,000

A home inspector will provide a visual inspection by looking at the home’s various systems, including interior and exterior components.  The inspector will check exterior components including roofing, flashing, chimneys, gutters, downspouts, wall surfaces, the foundation and the grading around it.
Interior systems the home inspector will check include electrical, heating, air conditioning, ventilation, plumbing, insulation, flooring, ceiling and wall finishes, windows and doors.  To be properly inspected, a chimney must first be cleaned.

Sellers can speed their home inspection by following these suggestions. The inspection will go smoother, with fewer concerns to delay closing.

1. Confirm that water, electric and gas service are on, with gas pilot lights burning.

2. Ensure pets won’t hinder the inspection. Ideally, they should be removed from the premises or secured outside. Tell your agent about any pets at home.

3. Replace burned-out light bulbs to avoid a “light is inoperable” report that may suggest an electrical problem.

4. Test smoke and carbon monoxide detectors, and replace dead batteries.

5. Clean or replace dirty HVAC air filters. They should fit securely.

6. Remove stored items, debris and wood from the foundation. These may be cited as “conducive conditions” for termites.

7. Remove items blocking access to HVAC equipment, electric service panels, water heaters, attics and crawlspaces.

8. Unlock areas the inspector must access: attic doors or hatches, electric service panels, closets, fence gates and crawlspaces.

9. Trim tree limbs to 10 feet from the roof, and shrubs from the house, to allow access.

10. Attend to broken or missing items such as doorknobs, locks and latches, windowpanes, screens and locks, gutters, downspouts and chimney caps.
Checking these areas before your home inspection is an investment in selling your property. Your Realtor will thank you.

Shown above is a Trent Canal waterfront home that has been prepared to be inspected by any home inspector with minimal interference to a home inspector’s visual review.  It is an open-concept Viceroy style home with second-level interior balcony, tongue- in-groove pine ceilings, wood-burning fireplace inset that has been WETT inspected. Recent improvements include newer stair and bedrooom carpets, steel roof on garage in 2009, fireplace insert in 2009, renovated main floor powder room, and freshly dry-walled and painted bedrooms. Most of the original windows and glass doors have been replaced. Asking $315,000.

Source: Terry Jones, Jones on Homes; Canada Mortgage and Housing Corporation.

Email jones on homes

However, hot tubs can be used year-round under properly maintained conditions. The comfortable temperatures seen during summer months still produce many cool Canadian summer evenings, where home owners incorporate hot tubs in their home environments. The insulated models available for our northern climate can be left running all 4 seasons.  The water heat can be turned up to high heat, for frigid days and nights and turned down to a comfortable tepid temperature for cool midsummer evenings.

Soaking yourself in the rolling, bubbling hot waters

The Scandinavian tradition of hot baths blends well in Canada.  Soaking yourself in the rolling, bubbling hot waters cause surface blood vessels to dilate, increases blood flow to the skin, raises body temperature and cleanses the skin.  According to Scandinave Spa Resorts located in Whistler B.C., Mont Tremblant Quebec, or Blue Mountain Ontario, in addition to cleansing the body, the massaging jets in a hot tub stimulate blood circulation and release endorphins. All of the senses are awakened; muscles are soothed and a general sensation of well-being washes over you. The second stage in a resort spa consists of closing the pores of the skin with a brief, but highly beneficial , cool water in a shower, waterfall or cool bath.  In a Canadian back yard spa, a roll in the snow works wonders to cool down the body!

The investment for a hot tub is only a fraction of an in-ground or above gound pool and is not likely to deter a buyer from putting in an offer on your home if all else is satisfactory.  Many models are portable and could be considered a chattel, meaning it can be a negotiable item to be either included or excluded from the purchase price of the home.  Sellers can decide to not include their hotubs in the home sale, and take it with them to their new home.  But the properly installed and designed spa area, in your own outdoor personal  garden spa should include the hot tub as part of the home’s layout and would be considered inseperable. Good landscaping always adds to a home’s resale value, and incorporating your hot tub spa space as part of the landscape will create an inviting outdoor area to excite buyers into liking what they see.

The hot tub is set on decking only a few chilly steps away from a home entrance

An example of a well-designed home oudoor hot tub spa, is seen in the photo.  The hot tub is set on decking only a few chilly steps away from a home entrance. The cedar plank decking lets any water splashes to run between the floor planks and decking will prevent anything being carried onto the tub from the feet.  There is a matching set of cedar steps to help get up into the tub.  An overhead pergola prevents snow fall from piling up on the hot tub cover, shelters the users from rain and keeps the tub shaded in the summer.   Of course the surrounding scenery should be a major consideration when situating your hot tub to maintain a soothing atmosphere as part of your relaxing experience..  The scenery here set amongst the wooded shoreline of Crowe River can’t be beat!  This hot tub is located at a luxury log home for sale in Mamora, Ontario, and the entire estate with hot tub can be yours to purchase for $850,000.

Astrid Hood

If you have any questions about locating properties in Ontario please feel free to contact our realty expert Astrid Hood of Remax Eastern Realty Inc., Brokerage at astridhood@remax.net or by toll free at 1-800-567-4546

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