Canadian banks on brink of mortgage price war

January 28th, 2015

RBC dropped its 5-year fixed rate for qualified borrowers to 2.84%.

Canada’s major banks are heading into a renewed mortgage price war in the wake of the Bank of Canada’s surprise decision to cut interest rates.

Mortgage brokers reported that Royal Bank of Canada dropped its five-year fixed rate for qualified borrowers to 2.84 per cent over the weekend. While smaller, non-bank lenders have started offering even cheaper rates, RBC’s rate cut is likely a record for a major bank, said Drew Donaldson, executive vice-president of Safebridge Financial Group. The bank also slashed its posted 10-year fixed rate to 3.84 per cent, the lowest nationally advertised rate in the country, said Robert McLister, founder of Ratespy.com.

RBC spokesman Wojtek Dabrowski said the bank continues to “review the impact of the Bank of Canada’s rate decision,” and that the company’s “individual product lines continue to make pricing adjustments in the regular course of business to ensure we provide competitive rates in the marketplace.”

Bank of Nova Scotia and National Bank of Canada have also cut fixed rates on broker-originated mortgages by 10 to 20 basis points in recent days. Toronto-Dominion Bank said it was dropping its posted 5-year fixed rate on Tuesday to 3.09 per cent, down from 3.29 per cent.

Mortgage officials said RBC was among the last of the major banks to introduce new rate specials.

“National Bank already offers competitive rates over the mortgage rate spectrum as we moved early over the past weeks,” bank spokesman Claude Breton said.

A battle in the mortgage market seemed inevitable given that Government of Canada bond yields have plummeted in recent weeks, falling 57 basis points in the past month to historic lows. Brokers had predicted that falling bond yields were almost certain to drive down the fixed-rate mortgage pricing ahead of the competitive spring housing market even as banks have largely kept their prime rates, which govern variable-rate mortgages along with other types of loans, unchanged. All the major banks will soon be forced to follow the Bank of Canada and cut their prime rates 25 basis points to 2.75 per cent, Mr. Donaldson said. “We expect more cuts to come from all lenders,” he said.

Even ahead of the Bank of Canada’s unexpected rate cut last week, the country’s major banks already seemed poised for a new round of rate cuts this year. Earlier this month, Bank of Montreal chief executive officer Bill Downe told an industry conference the bank was expecting to “again have a fresh offer that is appealing to customers” in the spring. The bank drew the ire of former finance minister Jim Flaherty in 2013 after it dropped its five-year fixed mortgage rate to 2.99 per cent in what Mr. Flaherty called a “race to the bottom.”

The renewed price war is raising concerns that the central bank’s rate cut will add fuel to the country’s overheated housing market even as Canadians struggle under the burden of rising household debt. Canadian Imperial Bank of Commerce deputy chief economist Benjamin Tal warned last week that falling mortgage rates could lead to “a monstrous spring in the real estate market.”

Others argue that low rates may not be enough to kick start a housing market that had already begun to slow toward the end of this year as oil prices plunged. Even as they predicted that Canada’s central bank will cut interest rates a second time later this year, TD economists said Monday they expect Canada’s real estate market to fare poorly this year as cheap crude and sky-high house prices in major cities are making it difficult for new buyers to afford to jump into the market despite low mortgage rates. “The housing market is … projected to be a drag on growth, with changes in existing home sales and prices, as well as housing starts, forecast to tilt into negative territory,” the bank said.

Source: Tamsin McMahon, The Globe and Mail

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Why the trend for owning a rental property is growing

January 26th, 2015

Rental property ownership tends to be higher for households with residents under age 50.

Derek Petridis, a 39-year-old chief financial officer at Shikatani Lacroix Design Inc. in Toronto, has loaded up on seven condominium rental properties over the past decade.

It may seem like he’s got an extreme bet on the housing sector, but a new survey shows he is far from alone, with about one in 20 Canadian households owning some type of rental property.

The study from Altus Group, which relies on research from the Financial Industry Research Monitor, considered highly accurate on a national basis, shows that among households earning more than $100,000, the rate on rental property ownership is about 10%.

Rental property ownership tends to be higher for households with residents under age 50, which the study’s authors think may be driven by basement apartments and flats that homeowners are using to pay down their mortgages.

Home ownership rates in Canada are among the highest in the world with the 2011 census from Statistics Canada showing the trend to own continuing to climb and reaching 69%.

The other strength of the market has been people like Mr. Petridis, who have seen the benefit of owning investment properties. A Canada Mortgage and Housing report? last year of the Toronto and Vancouver markets found about 17% of condominium owners were investors.

“I fretted over the first purchase for weeks, but then I just started going from there. Once you are over the first one you fall in love with the cash flow, the model,” said Mr. Petridis, who has cooled his heels on the sector a bit and not purchased a new unit since 2011.

Peter Norman, chief economist with Altus Group, said the quarterly FIRM survey didn’t break down rental property ownership versus people simply renting out a piece of their principal residence, but there is some older data from Statistics Canada that addresses both aspects.

Renting out secondary suites or basement apartments seem to grow in tough times, as people use them as a way to cover their home ownership costs. “When times are tough, more renters choose that [way to live] because it’s cheaper and more homeowners find they need to supplement their income,” Mr. Norman said. “It does come and go and acts like a pressure valve in the housing market.”

Lately the valve has been left open as the number of secondary suites grows slightly. The census found there were 330,000 in 1996, 310,000 in 2001, 370,000 in 2006 and 390,000 in 2011. Builders have even been constructing new homes with roughed-in apartment suites with separate entrances and kitchens, Mr. Norman said.

Don Campbell, a real estate expert and author, said he started by renting out a basement apartment so he could buy a larger home than he might have otherwise been able to afford, and eventually moved on to larger real estate investments that didn’t involve his principal residence.

“Once they figure they can get a yield on their investment, they do,” said Mr. Campbell, adding Canadians are looking to get better income than they might achieve elsewhere like the stock market.

He thinks the basement suites are probably a large driver of the trend toward owning rental property. “That just might be the only way some people can afford to live in the neighborhood they want to,” said Mr. Campbell.

Source: Garry Marr, Financial Post

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Will the Bank of Canada’s interest rate cut make any difference to home buyers?

January 21st, 2015

The Bank of Canada surprised markets Tuesday with cut to key overnight lending rate.

Already ranked as one of the most unaffordable cities in the world, Vancouver’s heated real estate market could get a further push, after the Bank of Canada cut the overnight lending interest rate to 0.75 per cent.

The rate had been at one per cent since September 2010 and the cut shocked markets on Wednesday. It will likely result in lower interest rates for variable rate mortgages, lines of credit and other loans that float with prime rates.

“That should provide a nice little potential boost for the housing market, not just in Vancouver but the rest of British Columbia as well,” said Bryan Yu, senior economist with Central 1 Credit Union.

But it depends how lenders respond to the Bank of Canada’s surprise interest rate drop with changes to mortgage rates, said Yu.

He expects the rate cut will put “mild downward pressure” on fixed and variable mortgage rates, but not make big waves on the housing market.

“This doesn’t change our outlook for Vancouver’s housing market significantly,” said Yu.

The credit union’s recent B.C. housing outlook forecast the median detached house price would climb by four per cent in greater Vancouver — continuing to outpace growth in condo prices.

Vancouver mortgage broker Michelle Byman said if lenders cut their rates, a quarter point change won’t make a big difference.

“It will help people that are buying,” said Byman. “But I don’t think that’s going to fuel anything more than what’s already going on in the market.”

On a $100,000, 25-year mortgage, lowering the rate from 3 per cent to 2.75 per cent would only cut someone’s $473.23 monthly payment by $13, said Byman.

Even on a $500,000 mortgage, a quarter point drop would only mean paying $63 less per month, she said.

Byman said 2010 federal policy changes intended to turn down the heat on Canada’s housing market affect the buyers she deals with.

In particular, the government requirement that borrowers qualify for the posted rate for a fixed five-year mortgage — even if that’s higher than the rate they’ll pay — limits how far buyers can extend themselves, said Byman.

Source: Lisa Johnson, CBC News

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Doesn’t look like interest rates will rise this year

January 20th, 2015

Poloz can hit rate snooze as markets do the work.

Bank of Canada Governor Stephen Poloz will remain in interest-rate hibernation for another year as plunging oil prices raise concerns the nation’s economic growth is in jeopardy, economists say.

Poloz, who delivers the central bank’s next rate decision tomorrow, will hold off raising borrowing costs until 2016, according to the median forecast in a Bloomberg monthly survey, which previously predicted the governor would lift rates later this year. Economists also cut two-year yield forecasts by the most on record.

The central bank hasn’t raised its benchmark interest rate since 2010 as it awaits an economic recovery that’s in danger of fading. Crude oil, Canada’s biggest export, is trading below $50 a barrel, from $107 in the summer. The slump is already crimping exports, weakening investment and playing havoc with prairie housing markets. The last thing the economy needs is higher interest rates.

“Markets are doing the dirty work for the Bank of Canada,” Emanuella Enenajor, senior Canada economist at Bank of America, said Jan. 15 by phone from New York. “We are still going to see the Bank of Canada holding on to their assertion that the recovery is proceeding, perhaps it’s just proceeding a bit slower than they thought.”

“They are definitely going to have to acknowledge that there is a large downside risk from falling oil prices,” in the new economic forecast, Enenajor said. Last week she pushed her rate-increase forecast to the third quarter of 2016 from the first quarter.

The Bank of Canada has kept its benchmark rate at 1 percent since September 2010, predating Poloz taking the governor job, and is the longest stretch since World War II.

Bets are increasing that Poloz will cut rates, rather than raise them, with swaps trading signaling about a one in three chance of a reduction to 0.75 percent by December.

Homes sales in the nation’s oil hub – Calgary – and Alberta’s largest city plummeted 24.6 percent in December from the previous month, the Canadian Real Estate Association said last week. That was the worst drop since the 2008 bankruptcy of Lehman Brothers Holdings Inc. sparked the global credit crunch.

Source (edited): Greg Quinn and Catarina Saraiva, Bloomberg News

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How much are first-time homebuyers spending across Canada?

January 16th, 2015

Buyers spending more to purchase their first home

First-time home buyers are spending more to get into homeownership while some are putting off the buying decision based on financial considerations, says a new report from BMO.

The average spent in Canada by first-time buyers is $316,100, up from $300,000 in 2013, according to the BMO 2014 First-Time Home Buyers Report, with only one of the country’s top four markets coming in under the national average.

In Montreal, first-timers spend an average of $237,900, in Toronto $408,300, in Calgary $363,400, with Vancouver having the highest average first-timer spend of $506,500.

Despite the increases in spend, the average downpayment remains unchanged from last year at $50,576 (16% of the average national spend).

BMO also reports 30% of first timers expect parents or family to assist in their purchase, a percentage that rises to 40% in Montreal and Vancouver.

The majority (61%) have made cutbacks to their lifestyle in order to save for their first home.

Six in 10 say their home-buying timeline has been delayed, with 39% citing rising real estate prices as the main reason.

“Among the many considerations for those trying to get a foot in the door of the real estate market for the first time, the most important of all is building a substantial downpayment,” says Laura Parsons, a mortgage expert with BMO Bank of Montreal. “Buying a home is one of the most important financial decisions one can make, and typically represents the largest form of savings for Canadian households. It’s crucial those planning to buy are well-prepared and have considered all options available to them.”

The rising prices in the major markets are forcing first-timers to reconsider their first choice of housing.

“High prices in a few major cities, and the fact that prices are outrunning incomes in Toronto, are turning off some first-time buyers, while forcing others to go deeper into debt, tap their parents for hefty down payments and opt for a condo rather than a detached house,” says Sal Guatieri, senior economist, BMO Capital Markets.

While 60% of first-time buyers say they will set a budget and stick with it, 30% are prepared to go higher for the right home.

Parsons recommends first timers should set price boundaries before setting out on the home-buying journey.

“To help ensure first-time buyers don’t spend beyond their means, they need to be fully prepared to purchase the right house, at the right price. Getting pre-approved gives buyers the opportunity to consider multiple options, during a time-sensitive decision period,” she says.

Source: Myke Thomas, Calgary Sun

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How will plunging oil prices affect the Canadian housing market?

January 14th, 2015

Slumping oil prices could slow home sales in West, but boost prices by 4.5 per cent in Toronto.

House prices are expected to increase just “moderately” across Canada this year, led by above average gains in the Greater Toronto area but saddled by uncertainty in the West thanks to slumping oil prices.

House prices gains are likely to slow this year, but still average about 2.9 per cent across Canada, says realtor Royal LePage in its annual house price survey and market forecast released Wednesday.

That would bring the average price of a resale home to $419,318, up from $407,500 in 2014.

The national realtor has now revised its regional forecasts, however, as oil prices continue their slide.

Toronto is expected to lead the pack when it comes to price increases this year, with the realtor saying the average home price in Canada’s largest city is forecast to rise by 4.5 per cent, although that would be well behind last year’s pace.

It anticipates that the shift of economic activity from West to East, combined with the strengthening U.S. economy, could help drive even more demand for housing in the GTA.

That would bring the average resale price of condos and houses combined across the GTA to $592,000 — up from $566,500 in 2014 and $524,089 in 2013.

“We would have taken a more bearish approach to Toronto and the Ontario market had it not been for the sharp change in Canada’s economic conditions,” said Phil Soper in an interview, the president and chief executive of Royal LePage.

Vancouver is expected to see the second-biggest average jump in prices, up 2.8 per cent, followed by a 2.4 per cent gain in Calgary, among several of the major centres surveyed across the country.

“I do believe there are winners and losers, in the short term, both economically and in the housing markets. And one of the places (slumping oil prices) are playing out positively right now is in Central Canada.”

The fallout from oil also makes it less likely that interest rates will rise, as had been expected, sometime this year, noted Soper.

Calgary’s expected 2.4 per cent rise this year is less than half what had been anticipated before oil began its slide. That would still bring the average house price to $472,000 this year.

Calgary had been among the “hot three” Canadian housing markets in 2014 (Toronto and Vancouver were the other two), with detached bungalows up 9.1 per in the fourth quarter of 2014, year over year. Average two-storey homes saw prices jump 8.5 per cent in the fourth quarter. Even condos saw price growth of 9.1 per cent during the quarter, says Royal LePage.

Vancouver’s likely 2.8 per cent gain keeps it firmly in top spot as the most expensive real estate market in the country, according to the national real estate company’s projections for nine major Canadian markets.

That would bring the average Vancouver home price to $835,000, which includes everything from condos to multi-million dollar single family homes.

Edmonton is expected to see gains of 2.5 per cent, followed by Ottawa at 1.8 per cent. House prices are anticipated to largely flatline in Halifax, Montreal and Winnipeg, but decrease by 1.3 per cent in Regina.

Source: Susan Pigg, Toronto Star

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Is now the right time to buy a home?

January 12th, 2015

Is 2015 the right year to buy a home?

Buy a house. Don’t buy a house. Soft landing. Crash landing. As we start the new year, the question on everyone’s mind is: What can we expect from Canada’s housing market?

Once again, experts agree that housing affordability is stretched, historically low interest rates will rise, and housing prices will drop. Rewind 365 days and you could be reading a forecast for 2014. But this time the experts agree: prices really will fall and it’s got everything to do with the recovery of the global economy.

Now, if the global economy were a ballgame we wouldn’t be in the World Series. Oil prices are depressed and Europe is still struggling with its credit crunch. But things are slowly improving in the U.S. and within Canada, and the important teams are still in the game: our employment rate is stable, oil prices are not (yet) low enough to cause real concern, and exports have picked up as the value of our dollar has dropped. All this leads most economists to believe we’ll see slightly higher bond and mortgage rates and a nation-wide cooling of the housing market over the next couple of years.

Robert Hogue, senior economist with RBC Bank, says he believes the coming year will be “a moderating phase for the market with a soft landing in 2016.” Hogue predicts national home prices will actually rise 1% or maybe 1.5% in 2015, as buyers race to get in the market before mortgage rates increase, after which prices will fall later in the year. “It’s one of the reasons why 2014 was such a strong year.”

But he cautions home owners: “Canada’s real estate market really is a multi-headed beast. It’s essentially very strong in Toronto, Vancouver and Calgary, but it’s balanced or soft in the majority of other markets.” As such, he predicts we’ll see a cooling of the three biggest markets by the end of the year in response to small mortgage rate hikes starting mid-year.

Now, if the prime rate were to climb from its current 3% level to 5% or 6% over the next year or two, many Canadians could find themselves in deep trouble, says Hogue. But he isn’t sure we’ll see rates shooting up that fast any time soon. Until recently, analysts and policy makers considered 5% to be the neutral or natural interest rate. It was the rate that allowed full employment, a stable inflation rate, and a sustainable growing economy. But Hogue, along with economists from Morgan Stanley and analysts from the C.D. Howe Institute, believe that the “new neutral rate” has actually dropped.

The primary reason is the impact baby boomers continue to have on the national economy. As boomers continue to age and leave the workforce, Canada can expect a slowing of the labour market, which will depress productivity growth, limit the economy, and suppress potential inflation, explains Hogue. “If the new normal is markedly below what we’re used to, then we won’t see as much downward pressure on housing prices,” he says.

The impact of demographics doesn’t stop there. According to a new report by Benjamin Tal, deputy chief economist with CIBC, analysts have been seriously underestimating the number of new immigrants in Canada. New immigrants account for 70% of the country’s population growth and about half are between the ages of 25 and 44—the key demographic that leads to household formations. According to Tal the under-estimated increase in the number of home-buying immigrants in Canada will help to offset a slowing economy, created by the boomer generation. “Immigration, itself, won’t be able to change this trajectory, but it will help to offset it,” explains Tal.

But David Madani from Capital Economics isn’t convinced. “Every good economist knows that immigration always fluctuates and it’s never prevented a housing cycle in the past.” He’s also not convinced that builders are out of the weeds when it comes to supply and demand. While he agrees that absorption rates are close to historical long-term averages, he’s confident that the market will suffer. “There are too many one-bedroom condo units being built when demand shows a need for family accommodation.”

So what’s a regular home buyer to do? The best advice is prepare for the worst, but if you’re ready to jump in and you can afford it, waiting for prices to fall might not be the best idea. Ted Rechtshaffen, president and CEO at TriDelta Financial, advises against trying to time the market in general. “It’s not about prices or the mortgage rate, it’s whether you can truly afford to own the home.” This means calculating whether or not you could still afford your monthly payments even if mortgage rates increased to 4% or 5% a few years from now. It also means deciding whether or not you can stomach a housing price drop. While many economists are predicting a 10% drop, the correction could be as great as 30% in some Canadian markets.

Of course, your home is more then equity and capital. It’s the place you spend time with friends and family, and the place you build memories. “Life and lifestyle is just as important,” says Rechtshaffen, so as long as you can afford your payments, “don’t be too concerned about the correction.”

Source: Romana King, MoneySense

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What are the new assessed values for Vancouver’s homes?

January 5th, 2015

Condos and single-family homes both saw their values increase.

Metro Vancouver homeowners have grown accustomed to healthy increases on their annual B.C. Assessment notices, which are now landing in mailboxes.

What’s new this year is that condo values are also rising in the region, after a few flat years that saw condo construction outpace homebuyer demand.

“Condominiums, that’s apartments and townhouses, up until 2014 had been relatively flat over three years,” said Cameron Muir, chief economist of the B.C. Real Estate Association.

Over 2014, however, Muir said condo sale prices have risen in step with inflation. Condo prices in Vancouver and its nearer suburbs were up about two per cent as of July, when B.C. Assessment sets its values for the next year’s assessment roll.

Single-family home values were up a more substantial 6.5 per cent, Muir said, but some of the condo valuations were a departure from the previous year.

“We’re probably looking, in Vancouver, at sales (increases) of 16 to 17 per cent in 2014,” Muir said, “so, there’s much stronger demand, and we’re also seeing inventory levels steadily decline.”

B.C. Assessment doesn’t produce average assessment values for property types in Lower Mainland markets but does highlight representative examples.

In Vancouver, a typical east-side two-bedroom apartment increased 4.7 per cent to $381,000, from $364,000 a year earlier.

On Vancouver’s west side, values for a typical two-bedroom apartment rose 7.5 per cent (to $616,000), in line with the growth in value of a detached home on a 33-foot lot (up 7.5 per cent to $1.575 million).

In its real estate assessments a year ago, B.C. Assessment had highlighted decreasing condominium values in the range of four to five per cent — the second consecutive year that condo prices declined or offered minimal increases.

“Changes within a plus or minus five per cent range, that’s what we categorize as stable,” said Dharmesh Sisodraker, B.C. Assessment’s deputy assessor for the Vancouver Sea to Sky region, which takes in Vancouver and the North Shore all the way to Whistler.

Assessments, which are used by municipalities to set property taxes, tend to lag the overall market by the time they are released.

In east Vancouver, a typical detached house on a 33-foot lot saw an increase of 11.3 per cent, to $993,000.

In Vancouver Heights, typical detached home prices rose five per cent to $955,000.

“(Condominium) prices are still under pressure versus detached homes, mostly because there is so much (condominium) product on the market,” explained Ray Harris, president of the Real Estate Board of Greater Vancouver, and the increases in condo prices are “sporadic.”

In Metro Vancouver, demand for new condos has been in high-growth areas linked to rapid transit, such as the Marine Gateway development at Cambie and Marine in Vancouver or the Metrotown and Brentwood town centres in Burnaby.

“If a complex is in demand and there are not a lot of units in the market, you can get more of a lift,” Harris said.

Suburbs such as Burnaby, Coquitlam and Port Moody — communities either on SkyTrain, or where SkyTrain is being built — are among those that have seen modest increases in the range of two to three per cent.

However, the gains weren’t shared equally and some spots still showed decreasing assessment values. B.C. Assessment cited an example at Simon Fraser University’s UniverCity development, where the assessed value of a two-bedroom highrise unit declined 2.5 per cent from 2014.

“There are a few pockets where values decreased slightly,” said Zina Weston, a deputy assessor for B.C. Assessment in its North Fraser region, which takes in the eastern suburbs closest to Vancouver.

“If there is a lot of building that comes on in a short period of time in a finite area, there might be some (downward) pressure on pricing,” Weston said.

Harris added that condo owners trying to re-sell are having a tougher time because developers are selling new units at lower prices than they would be if the market were stronger.

Condo values also declined in Fraser Valley suburbs from Langley to Chilliwack, where single-family home prices are in the reach of more buyers.

Dan Scarrow, a vice-president at Macdonald Realty in Vancouver, added that some municipalities are more encouraging to condo developers and “as a result of that, maybe some areas tend to get overbuilt.”

“Then, in some municipalities, say Vancouver, it is more difficult to get a project off the ground, but demand is actually quite high,” Scarrow added.

Markets that rely on recreational property sales — such as Whistler, the Okanagan and Kootenays, where sales collapsed and values declined following the 2008 recession — also took part in some of the rebound in 2015 assessments.

B.C. Assessment cited examples in Kelowna where assessments were up from four to seven per cent. In Whistler, a typical home in the White Gold area increased in value 7.4 per cent, to $1.06 million.

Source: Derrick Penner, Vancouver Sun

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Canadian home décor trends for 2015

December 28th, 2014

Home decor trends for 2015 are looking amazing and you can thank interior designers for setting the bar.

Every year, home decor trends change, drastically at times, so no one is recommending that you gut your home on a year-to-year basis. Rather, it might be nice to add certain elements of these home decor trends for 2015 so that they have longevity and don’t make you shudder in disgust come the next year.

Here are 5 home decor trends for 2015.

Multi-speed jets/handheld shower heads

The shower is one of the places that the home decor trends for 2015 is headed.

The master bathroom shower should be a place to escape and enjoy a hot, relaxing moment away from the world, so it’s fitting that the new trend would be to have multi-speed jets built into the walls. Imagine the feel of the water against your back, relieving those sore muscles… sounds delightful.

Navy and plum

Don’t bust out the buckets of paint just yet. While these rich varieties of blue and purple are a welcome treat for many, going at the walls with such hues may make a room feel smaller and may not appeal to home buyers at large if you plan on selling.

Rather, invest in furniture or accessories in these colours. Plum throw pillows work well with yellows, lime green and even beige. A navy couch works well with yellow, white and dark brown.

Wood window frames, doors and garage doors

If you’re the type of person who prefers a home that exudes beauty from end to end and are willing to deal with the required upkeep (or pay someone to deal with it), may I introduce wood on the outside. Yup, despite our brutal winters in many provinces, many homeowners are opting to have window frames and front and garage doors made of wood.

It’s absolutely gorgeous, but the upkeep is not exactly a walk in the park. You need to wash it once a year and if it begins to erode, you need to prime and finish it. But it sure is beautiful.

Oversized paintings on canvas

If you aren’t a big fan of wallpaper or painting your walls all kinds of freaky colours complete with texture, you may want to invest in over-sized paintings instead. They don’t have to be priceless works because, let’s face it, not many of us will be found at a Sotheby’s auction anytime soon.

There are some incredibly beautiful and original paintings that make great conversation pieces and are timeless enough that they won’t make you cringe in two years’ time.

Metal backsplash in kitchens

Move over ceramic, here comes something sleeker. New home builders are opting for a metal backsplash in the kitchen over the typical ceramic because it is easy to maintain and simpler to install. And while some may think that it looks too industrial, there are many varieties, including some that actually have a tile look, that will blow your mind.

These home decor trends for 2015 may not be everyone’s cup of tea, but I think we can all agree that there are some elements here that appeal to the decorator in all of us.

Source: Rosy Saadeh, comFree Living

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What is predicted for Canada’s housing market in 2015?

December 23rd, 2014

Predictions for the Canadian housing market in 2015.

There were no double-digit price gains in the country’s hottest real estate markets this year. Instead, Calgary, Toronto and Vancouver saw prices increase between 5% and 7%, according to each city’s real estate board.

And as Sal Guatieri predicted, interest rates held steady.

But that will change in 2015, says the senior economist at BMO Capital Markets. Rates will go up, but slowly.

“We don’t expect the Bank of Canada to begin raising rates until October 2015,” says Guatieri. “The overnight lending rate, currently at 1%, likely won’t reach a more neutral level of 3.3% for another three years. Longer-term mortgage rates will also rise gradually.”

As a result, home prices and sales will stabilize next year. “The ‘Hot 3 cities’ should see much slower price appreciation next year, while most other regions will see modest price gains,” he says, adding Toronto and Vancouver could even see prices decline in the next three years.

Nationally, the average home will cost $404,800 by year-end. That figure will rise to $410,600 in 2015, and $417,300 in 2016, notes MLS.

Meanwhile, about 189,500 housing starts are expected, according to CMHC. This is in line with 2014, which should see 189,000 units by year-end.

“[There will be] a slight moderation in multi-unit starts during 2015, which will be offset by an increase in single-detached starts,” says Bob Dugan, chief economist for CMHC. “Looking ahead to 2016, expectations are for total starts to moderate, as builders focus on reducing their inventories.”

So where’s the opportunity for real estate investors?

Guatieri warns about investing in detached property in Vancouver or Toronto, “as lofty valuations suggest the returns will be low and prices are at risk of falling when interest rates rise.” Condos and townhouses will offer better value.

Also, keep an eye on demographics and economic activity. “Housing markets are much weaker in eastern Canada due to [slower growth], older populations and weaker economies than in Ontario and western Canada. Cities such as Calgary [and] Montreal, which attract a relatively larger share of the one-quarter million international migrants to Canada will see stronger housing markets.”

Regional breakdown

Toronto

Sales are expected to increase, before moderating in 2016, notes Dana Senagama, CMHC’s senior market analyst for the Greater Toronto Area.

“An increasing desire among millennial and baby boomer populations to live an urban life will also fuel higher demand for condominium apartments over the next two years,” she says.

Guatieri adds steady buying from immigrants and echo boomers will support the market, cushioning any price declines.

Montreal

Montreal will see support from international migrants, says Guatieri, so there’ll be “steady sales activity and modestly rising prices in coming years.”

Kevin Hughes, CMHC regional economist for Quebec, adds, “A gradual pick up in Quebec’s economic growth over the next two years will provide some stimulus to housing demand. During this period, resale markets will tighten somewhat, which will help sustain housing starts. However, despite an edging up of demand, the expected supply levels will keep price growth below the 2% mark.”

Calgary

The market should remain healthy, predicts Guatieri, but will see slower sales and price appreciation. That’s due to the recent decline in oil prices, which will likely dampen investment in the energy sector and slow job growth. “We expect oil prices to firm next year, but an unexpected further decline would undercut Calgary’s housing market more severely.”

Meanwhile, the province saw regional price gains of 4.7% this year to $399,000, notes CMHC. The average price will continue to rise, but at a slower pace to $407,800 in 2015, and $417,500 in 2016.

Vancouver

“Housing demand will be supported by employment and population growth, but tempered by gradually rising mortgage interest rates,” says Carol Frketich, CMHC’s B.C. regional economist.

In B.C., existing MLS home sales are forecast to total 79,200 units in 2015, and 79,300 units in 2016. The average home price is forecast at $566,300 in 2015, and $573,000 in 2016.

Source: Suzanne Sharma, Advisor.ca

This Canadian Real Estate Blog was brought to you by BestHomesBC.com. Looking for a home to buy in Vancouver? Check out BestHomesBC.com for properties for sale throughout British Columbia. Looking for an assignment condo? Check out AssignmentsCanada.ca for pre-sale condos for sale in Canada.


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