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

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

Housing prices in the Lower Mainland are predicted to rise a modest three per cent in 2015, while Canada’s highest prices, in Vancouver, will be sustained by demand from Mainland Chinese buyers.

That’s the view from RE/MAX’s 2015 national housing outlook, in a relatively optimistic report that suggests Greater Vancouver real estate is well supported by a variety of supply and demand factors.

RE/MAX’s report diverges strongly from a new Bank of Canada report that warns parts of Canada’s housing market are overvalued by 30 per cent.

RE/MAX’s report says average residential prices in Greater Vancouver increased from $781,517 in 2013 to $838,400, and are projected to rise to $863,600 in 2015.
Price gains in Vancouver will continue to be driven by hot demand and limited supply for detached homes in west-side neighbourhoods, RE/MAX predicts, while buyers who hoped to break into Vancouver’s market on the east side and lost multiple bid battles may drop out of the market in 2015.

Frustrated buyers won’t limit the market, though, because “the pipeline of demand for the region will continue to grow,” according to RE/MAX.

“Offshore buyer demand from Mainland China continued throughout the year,” the report says. “Demand for westside homes will continue to be driven by offshore buyers who can afford to pay the two million dollar-plus price tag.”

Cory Raven, managing broker at RE/MAX Select Realty in Vancouver, say agents report that “the mindset” of Mainland Chinese buyers focuses on “parking wealth” in Vancouver, rather than seeking price appreciation. That means a significant group of buyers in Vancouver is content to buy higher and higher, agents believe.

“Assuming that tap stays open, the higher end of the market will (continue to see aggressive gains),” Raven says.

There has been speculation that the flood of cash pouring from China into Vancouver real estate will be limited with the ending this year of a federal immigrant investor program. The South China Morning Post has reported a replacement program will be much smaller in scope, and will subject applicants to rigorous audits. But Raven says the perception among realtors is “the tap” will stay open.

“Many realtors have told me that the way business is done (in China) is very different, and the wealthy can always find a way to get their money out.”

Meanwhile, in a new report, the Bank of Canada studied worrying debt loads carried by homeowners across Canada, and calculated that some markets are at risk of correction, with homes overvalued by up to 30 per cent.

But Helmut Pastrick, chief economist of Central 1 credit union, says he believes the Bank of Canada’s data and study method is “constrained” and does not account for unique supply and demand factors in Vancouver’s housing market.

Pastrick says limited land supply in Vancouver is the main factor justifying high housing prices, and demand from Chinese buyers impacts Vancouver’s west side, and West Vancouver. But even if the flow of investment from offshore were to end, according to Pastrick, there would not be a significant drop in Greater Vancouver home prices.

Pastrick says he sees RE/MAX’s prediction of a three-per-cent rise in home prices across the region as reasonable.

“This market is not booming, but it is pretty solid,” he said. “It certainly is not a bubble.”

Pastrick says while U.S. officials appear ready to raise historically low interest rates within half a year, the Bank of Canada probably will not raise rates until late 2015 or longer.

While the Bank of Canada warns that high home prices and heavily indebted households raise risks of a housing correction, Pastrick believes the only real risk is an economic recession.

A drastic fall in oil prices that caught almost all economists by surprise will impact Alberta and other areas of Canada, but actually could support provincial economies such as B.C. that are net importers of oil, Pastrick believes. At this point, he sees no recession risk for B.C. on the horizon.

Source: Sam Cooper, The Province

New York, USA, is expected to be the top-performing prime city for real estate in 2015, with Sydney, Australia, the only other destination in the Prime Global Cities Forecast to see price rises.

Luxury prices across Manhattan are expected to rise 5%-10% in 2015, boosted by strengthening foreign interest from Chinese, British, Russian and Latin American buyers and an improving economy, says Knight Frank in its Quarter 4, 2014 Prime Global Cities Forecast.

Sydney is also on the radar of foreign buyers and limited luxury supply could see prices rise by up to 5% in 2015, Knight Frank predicts.

With uncertainty surrounding the UK 2015 General Election, London is forecast to see volume weaken in 2015 with prices staying stable.

Knight Frank Partner, Kate Everett-Allen says, “The biggest faller is likely to be Dubai, where luxury prices could fall by 5-10% in 2015, Knight Frank predicts, with a growing appetite from Indian purchasers cushioning the market a little.

Of the eight cities in the report, luxury real estate price gains are expected only in New York and Sydney, with stable values in London and falls in Paris, Singapore, Hong Kong, Geneva and Dubai.

New wealth, investment in infrastructure and a continuation of the safe haven trend are likely to all help drive growth, but a slowing global economy along with major tax changes are major risks for the world luxury residential markets in 2015.

“Luxury residential markets face a diverse range of challenges and opportunities in 2015. Now that stimulus measures have all but disappeared in the US and the UK all eyes are on Europe and Japan and the extent to which they could halt the tentative global recovery, explains Ms Everett-Allen.

“Since 2009, a number of the key housing markets worldwide have been supported by government stimulus measures. The slow withdrawal of such initiatives in markets such as the UK and the US, along with the potential relaxation of cooling measures in Hong Kong and Singapore, could mean that 2015 sees a more level playing field for the world’s top luxury housing markets.”

In Sydney, rising business confidence and an increasing sense of political stability is helping to attract interest from overseas. The weak Australian dollar is adding to this momentum and also reviving interest from Australian ex-pats, says the report.

Source: Adrian Bishop, Editor, OPP Connect

A low inventory of single-family detached homes for sale in Metro Vancouver has buyers engaging in multiple bidding wars or camping out to get a shot at the few homes when they come on the market.

The demand is so high that many buyers are paying more than the original asking price and, in some cases, aren’t bothering with inspections or subjects on the property before signing on the dotted line, said Cory Raven, managing partner at ReMax Select Realty.

This is because they’re afraid someone else will beat them to the punch if they wait or take their time, he said.

“It’s very typical for someone to enter the market once, twice or three times expecting to buy a house and going into the bidding war and losing.” Raven said.

“It really has changed the dynamic of the good old days when you see a place, put in an offer and wait a couple of weeks … people are going into a 40-year-old house with no inspections.”

Such tactics are not surprising in the most expensive region in Canada for residential real estate in 2014. The average residential sale price for a single-family home in Metro Vancouver this year was about $838,400, up from $781,517 a year earlier, according to the ReMax 2015 housing market outlook.

And the situation isn’t expected to improve much for buyers looking for deals in 2015, with home prices forecast to rise by at least three per cent across Metro Vancouver — similar to what was experienced this year. Healthy gains are also anticipated in Kelowna, which is expected to see a seven-per-cent increase, and Victoria, slated for a four-per-cent rise in house prices.

The market is so hot that sales of single-family houses are still being listed across Metro Vancouver into mid-December, when they would have usually stopped by now before resuming in the new year, said Brian Lamb, of Royal LePage Realty Coquitlam.

“It’s bizarre,” Lamb said. “It can only go up in the first quarter of 2015. I think we’re going to have an incredible first half.”

The ReMax report suggests young families and older homeowners wishing to downsize are expected to drive demand, while interest from Mainland China also continues to influence the Greater Vancouver market.

“The supply side has definitely been affected,” Raven said. “A lot of people who are housing rich don’t know what to do with the equity except to keep it.”

David Lamb, of Sutton Group West Coast Realty, agreed many older people are hanging on to their homes, which is having an impact on inventory. He recently had eight offers on a home in Windsor Park on the North Shore, while a property east of Seymour raked in $40,000 more than the asking price, which was round the mid-$800,000s.

“Earlier this year we had a guy who lost out four times and finally found a house,” David Lamb said. “It’s emotional, it’s tough. When there’s a lot of competition, there’s always somebody who will pay more.”

It’s not just older homes that are facing the crunch. Lamb said foreign investors are willing to pay more for a home in Metro Vancouver, particularly in the Tri-Cities and Burnaby, where they tend to knock down existing homes to build their own.

He cited the Rivers Run development as an example of foreign investment interests: in the first two phases 24 homes sold within hours, while the remaining 14 homes were snagged within an hour by buyers who camped overnight to get them.

ReMax expects there will be upward pressure on detached house prices in Vancouver’s west side due to high demand and low inventory, but said the condo and townhouse markets will likely sustain a more balanced market.

However, even those markets aren’t immune from buyers’ frenzy. ReMax realtor Mary Cleaver said a four-bedroom townhouse listed on Vancouver’s Carolina Street had seven offers and was sold within the week, with no subjects and at $50,000 more than the asking price. “It is unique for that to happen,” she said.

Condos in East Vancouver were in high demand near the end of 2014, according to the report, which suggested well-priced homes often sold within one to two weeks, whereas the average market time for condos was 45 days. “The condo market has been healthy but nowhere near the bidding wars and housing (price) gains,” Raven said.

But both Lamb and Raven said some people are starting to get buyers’ fatigue and bowing out of the bidding wars. Two Sundays ago, Lamb said, 28 people had come through an open house, but several parties decided not to bother in the bidding. “We had people who won’t get tied up in this flurry,” he said.

However, ReMax noted as those potential buyers move to the sidelines and wait for the market to stabilize, the demand in the region will continue to grow.

Source: Kelly Sinoski, Vancouver Sun

After 18 months on the job, Bank of Canada governor Stephen Poloz has yet to wield the primary tool at his disposal: the key interest rate.

When Poloz took the bank’s reins in June 2013, he inherited an overnight rate set nearly three years earlier by his predecessor Mark Carney. That rate has yet to budge from one per cent, idling for one of the longest stretches in Bank of Canada history.

Bill Robson, the president of the C.D. Howe Institute think-tank, believes it will happen sometime in 2015 thanks to an increasingly positive economic outlook, including an improving U.S. economy and a pickup in Canadian exports.

Once the bank’s overnight rate starts to creep up, Canadian businesses will see their borrowing rates rise as will consumers who take out car loans and mortgages.

Ian Lee, a professor at the Sprott School of Business at Ottawa’s Carleton University, predicts businesses will feel the sting of higher rates right away, but he expects the effect on households to be much more muted.

Many consumers, he added, will avoid a sudden jolt because of fixed-rate loans and mortgages.

On top of that, Lee said the rate would likely inch up a quarter-percentage point at a time, making the coming increases easier to manage than the towering Canadian levels of the early 1980s.

Lee said the rate hikes in the early 80s killed the real-estate market, but didn’t create a housing meltdown and the number of foreclosures barely increased.

On the flip side, higher rates would help pension funds reap a bigger return on their investments, Lee added.

McGill University economics professor Christopher Ragan said, fundamentally, rising rates are a good thing.

“It is signalling a stronger economy,” he said.

The Bank of Canada said last week the country had showed signs of a “broadening recovery” and the output gap appeared to be smaller than it had projected just six weeks earlier. The output gap represents the divide between where the economy stands at a given time and where it would be when performing at its full potential.

However, the bank’s statement offset the positives by pointing to potential threats: weakening oil prices that drive down inflation and the significant risks of high household debt accumulated during years of low borrowing rates.

The basic logic behind low rates is to encourage people to gather debt when the economy is weak, said Ragan, who has worked at the Bank of Canada.

Robson belongs to the camp that expects Canada’s strengthening economy to force Poloz to move the rate in the middle of 2015, while Lee predicts the rapidly shrinking output gap will spur an increase as early as this spring.

The Organization for Economic Co-operation and Development recently predicted the Bank of Canada would start pushing the rate up in late May due to advancing inflation, a key driver of interest rates.

At the other end of the spectrum, economists like David Madani of Capital Economics expect Poloz to stand pat for a while, even after the U.S. Federal Reserve starts hiking its own key rate.

He predicts the forces pushing Canadian inflation upwards to remain fairly subdued in 2015, which he says will keep the central bank in a “holding pattern” for the whole year.

Robson said it would even be OK if Poloz raised rates and then edged them back down, if necessary.

“Everybody knows that the central bank has trouble reading the economy just as everyone else does,” he said.

Source: Andy Blatchford, The Canadian Press

The benchmark price for a typical detached home – a gauge that omits the most expensive properties – is approaching $1-million in Greater Vancouver.

The Real Estate Board of Greater Vancouver uses the resale home price index (HPI), which strips out the priciest properties, because it asserts that calculation serves as a better barometer of trends than average prices.

On Tuesday, the board reported that the HPI for single-family detached houses reached a record-high $997,800 last month, up 7.9 per cent from November, 2013.

The HPI for detached homes on Vancouver’s west side hit $2,323,300 last month, up 10.9 per cent from November, 2013, while the index for Vancouver’s east side reached $957,300, up 11.9 per cent from a year earlier. Both of those prices also set records.

The average price for detached homes sold in the region has risen 1.2 per cent over the past year to $1,274,904.

Over all, the HPI for detached houses, townhouses and condos rose to $637,300 last month in Greater Vancouver, up 5.7 per cent from a year earlier.

Greater Vancouver had 2,516 housing sales last month, up 8.4 per cent from November, 2013, and 6.9 per cent higher than the 10-year average for that month. “It’s been a more active fall than we typically see,” board president Ray Harris said in a statement.

In the Fraser Valley, which includes the sprawling and less expensive Vancouver suburb of Surrey, there were 1,136 residential sales on the Multiple Listing Service in November, up 15.2 per cent from 986 properties sold in the same month last year.

November’s HPI for Fraser Valley detached homes climbed to $575,400, up 4.6 per cent year-over-year.

Source: Brent Jang, The Globe and Mail

One measure which suggests that housing demand is relatively strong heading into 2015 is the number-of-months’ supply of homes for sale in Canada, which declined from 5.9 to 5.8 in October, its lowest level since April of 2012.

Also, year-over-year house prices in the Teranet/National Bank House Price Index (+5.4% Oct) and the Canadian Real Estate Assn House Price Index (+5.5% Oct) have trended gradually higher since the beginning of 2014. However, the rates of increase in both indexes early in the final quarter of 2014 are nowhere near the levels they reached in 2006 of 14.1%, and 13.0% respectively and early in 2010 (12.7% and 12.5%).

Turning to the supply of dwellings, housing starts in Canada have remained quite stable. Indeed, over the past two years, starts have averaged 190,000 units seasonally adjusted at annual rates (SAAR) which is at or very close to the estimated rate of household formation. Further, despite the steady uptrend in existing home sales and the above noted gradual increase in house prices, housing starts trended lower since mid year.

Another indicator of housing market health is the percentage of mortgages that are more than ninety days in arrears. In line with the very gradual decline in the number of regular Employment Insurance beneficiaries and the unemployment rate since the beginning of the year, the percentage of mortgages more than ninety days in arrears has trended down from 0.32% in January to 0.29% in August, its lowest value since September of 2007.

Further according to the most recent Annual State of the Residential Mortgage Market in Canada published by the Canadian Assn of Accredited Mortgage Professionals, approximately 77% of the 1.35 million homeowners who renewed their mortgates in 2014 saw a 0.8% drop in their mortgage rate. This decline in mortage rates over the past year suggests that the majority of mortgage holders renewing over the next twelve months will also see a reduction in rates.

Looking forward, the fundamental drivers of housing demand in Canada appear more positive now than they have been for several quarters. First, over the past two months, Canada has added 117,000 jobs, the vast majority of which (96,000) are full time. Second, according to a recent study by CIBC, immigration has made a much stronger contribution to growth of Canada’s prime 25-44 age group than was previously estimated. Indeed, over the past five years, growth of this age group, the major driver of employment and household formation, has accelerated from -0.8% y/y in 2009 to +1.1% in 2014.

This rate is well above the average growth of the OECD and 75% faster than in the United States. Third, in addition to giving a boost to consumer spending, lower energy prices should, by increasing discretionary income, make home ownership more affordable. Finally, interest rates are likely to remain low well into the middle of the year and while they may edge higher in the second half of 2015, they are unlikely to chill housing demand significantly. Given these positive fundamentals, we expect housing starts to total in the range of 185,000 to 195,000 in 2015 compared to an estimated 190,000 in 2014.

Source: John Clinkard, Daily Commercial News