Across Vancouver, mixed-use development – especially ones with specialty food markets or full-service grocery stores on the ground level – are popping up like mushrooms after a spring rain.

Condo purchasers want a new kind of lifestyle – one of convenience. As living space shifts downtown, municipalities are shedding old zoning models in which homes were placed in one spot, retail in another, industry in yet another, and everyone drove from one to the other. In Toronto, the movement is ramping up. In Vancouver, where space is at a premium, it’s rampant.

Yaletown was a decaying industrial area before Vancouver designated it as a mixed-use residential-commercial hub and made it a priority for redevelopment in the late 1990s. First, a highrise condo went up, then Choices Markets Ltd. won the lease to provide groceries in a structure adjacent to the residential building.

“The original developer approached us for tenancy as both a means of providing service to the neighbourhood and adding a selling feature for their condo development,” says Tyler Romano, director of marketing for Choices, a retailer known for natural and organic foods.

The developer approached national chains, but at the time they did not have a format for a grocery store with a smaller footprint. Choices won them over with plans to stock the shelves in only 11,500 square feet, a 10th of the size of a suburban big-box grocery store.

Over the past 13 years, as at least 15 condo towers were added, the area has morphed into a vibrant, upscale oasis, “a perfect fit for our brand of socially conscious, community-minded green retailing,” Mr. Romano says. “This works perfectly for the car-less urban dweller who adheres to the two-bags, six-blocks shopping pattern.”

The grocer has adapted its offerings for the clientele – many of them younger single people and busy professionals who want to pick up dinner right where they live – with grab-and-go items from the salad bar and deli making up a high proportion of sales.

“It’s unbelievably convenient when it’s nine o’clock at night and all you have to do is go straight down the stairs and walk into a store and grab products,” Mr. Romano adds.

In Toronto, grocery was always part of the plan of the massive Concord CityPlace development which, when complete, will be home to 20,000 people. Tucked in a downtown corner off Spadina Avenue, a vibrant 20,000-square-foot Sobeys grocery store offers benches outside for patrons to take the sun, with a flower shop up front.

“It’s quite quickly becoming the heart and soul of CityPlace,” says Gabriel Leung, director of development for Concord Adex. “Financially, if we could have landed a retailer sooner, we could have leveraged on that and included it in our marketing materials. People always appreciate these kind of things in an urban centre.”

Concord Park Place, the developer’s second Toronto highrise neighbourhood at Sheppard and Leslie streets in Toronto’s North York area that will boast 10,000 units when complete in 2018, does not yet have a grocer. “We’ve been talking to a few other mainstream operators,” Mr. Leung says, adding that it takes a long time to negotiate with national chains.

Originally, though, the grocery store was not part of the plan. Home Depot Inc., which had wanted to get closer to the downtown condo market, had signed a lease agreement with developer RioCan Real Estate Investment Trust, but when the economy in the United States sharply contracted in 2008, the hardware giant was forced to lay off employees and close stores. It broke its lease with RioCan. Almost immediately grocery stores lined up to fill the vacancy.

David Speigel, vice-president of operations at Tribute Communities, which partnered with RioCan to work on the residential portion of the project, recalls welcoming the switch to a grocery store. Tribute wasn’t keen to have residents live on top of a hardware store.

Mr. Speigel thinks residential can co-exist right next to retail – although mixed-use planning is more complex and there are few developers with the expertise to construct both. “It becomes very complicated because you have floors that are servicing both retail and residential.”

A small development, epecially, makes more sense financially when combined with retail stores beneath, Mr. Speigel said. “It’s less important when you have a 40-storey building; the retail at the bottom of it becomes less significant.”

He maintains downtown condo buyers are happy to live above the grocery store. He even knows of one, happy to wander down to the store to grab his dinner in his “boxers and flip flops” on a cold winter day.

Source: Beverley Smith, The Globe and Mail

The Canadian dollar rose against the majority of its most traded peers as a report showed new home construction increased more than forecast in May, adding to evidence the housing market is regaining momentum.

Canadian housing starts rose at their fastest pace in more than a year in May on a surge in condominium construction, Ottawa-based Canada Mortgage & Housing Corp. said on its website Monday.

The currency rose for a third day against its U.S. counterpart after its biggest gain in a year and a half versus its U.S. peer last week as a surge of hiring in construction led to Canada posting its biggest jobs gain in a decade in May. Canadian housing starts were 200,178 units at a seasonally adjusted annual pace in May, according to the Ottawa-based Canada Mortgage & Housing Corp.

“May’s increase in homebuilding suggests overall housing construction continues to garner support from condominium-related building, although the overall levels are still off from the highs seen in mid-2012 when the market was more frothy,” said CIBC World Markets economist Emanuella Enenajor.

“Today’s data could mean that homebuilding activity in the second quarter could be less of a drag than seen in the prior quarter.”

Housing-market data are showing few signs of a sharp correction even amid warnings from analysts and policy makers that a bubble may have been forming. Finance Minister Jim Flaherty tightened mortgage rules for a fourth time last year on concern that an overbuilding of condos could lead to sharp price declines. Former Bank of Canada Governor Mark Carney identified record household debt as the biggest domestic risk to the economy.

The loonie rose 0.1% to C$1.0184 per U.S. dollar at 8:19 a.m. in Toronto. One loonie buys 98.19 U.S. cents.

Economists forecast a reading of 179,100 housing starts, according to the median of 18 responses to a Bloomberg News survey.

Home construction, which helped lift Canada’s economy out of recession, has been a drag on growth over the past year, according to Statistics Canada data. Construction fell in the first quarter at an annualized 4.7% pace, the third- straight drop, the Statistics Agency reported May 31.

Multiple-unit housing starts in urban areas rose 22.2% in May to a pace of 114,346 units, according to the CMHC report, while single-unit work increased by 3% to 62,888 units.

Source: Ari Altstedter, National Post Wire Services

There are many factors that could potentially reduce the value of your home. According to a recent article on MSN Money by Leah Culler, here are 8 potential deal breakers:

1. Location

Threat to value: Could be high – in some cases, 50% or more

What are the three most important factors in determining a home’s value? You guessed it: location, location and location. Although you likely considered location when you bought or built your home, something may have changed since then: rezoning, an increase in crime or a new city dump. So what can you do? Well, that depends on what about your location is bringing down the value. If you have a view of the city dump, for instance, you can plant some privacy hedges to make it less of an issue. Play up your home’s strengths; make sure every interior and exterior detail is perfect and be patient.

2. Lack of updates

Threat to value: Low to medium; usually, at least 10%

When there’s an oversupply of homes, buyers can be picky — and they definitely are. Rather than seeing the potential in an outdated kitchen and bathroom, a buyer will just move on to another home that won’t require as much work and vision. Granite countertops, new appliances, and a modern kitchen and bathroom, will all help to increase value. For between $5,000 and $8,000, you can install those granite countertops, update the light fixtures and add fresh paint and carpet. You’ll likely get a return of $15,000 to $20,000 when it is time to sell.

3. Bad floor plan

Threat to value: Medium to high; up to 25%

Appraisers consider odd floor plans when appraising homes. Without easy access to upstairs and an open layout, appraisers classify this as a functional problem which can reduce an appraised value by as much as 25 per cent compared with similarly sized homes.

4. Major systems and structures

Threat to value: Medium to high; up to 20%

A buyer wants to be able to walk in and say, ‘I could move right in’. Major system and structure issues kill potential deals in high-end neighbourhoods. Have an inspection done before you list your house and fix the major things. A roof that needs to be replaced could knock 15 per cent off the value. A heating and air-conditioning system that needs repairs could cut the value by as much as 20 per cent, and an electrical-system problem is probably somewhere between eight per cent and 10 per cent.

5. No garage

Threat to value: Varies; usually about $5,000

A garage definitely adds value to a home, and the key is to have the right-size garage for the home and the neighbourhood. If you have a one-car garage in a 1,200-square-foot home in a starter neighbourhood, there’s a big premium for that, but if you have a one-car garage in a half-million-dollar home, that’s a functional problem. The added value for a garage varies greatly by neighbourhood, but a good rule of thumb is $5,000 per stall.

6. No fence

Threat to value: Low; 5% to 10%

Many potential buyers are looking for a home with a fence because they have pets or want their children to be able to play in the yard safely. When you look at standard appraisal forms, there is a premium paid for fences. Porches and decks also add value to homes because people like outdoor space.

7. Allergens

Threat to value: Low to medium; up to 15%

A little mould under a sink could potentially kill contracts. Even if buyers could easily get rid of it, sometimes they just back out. If people have an allergy, they’re going to run. Possible problems also include cigarette smoke and pet dander. No matter how many times you clean your home, you can never really get rid of Fido.

8. Fit and polish

Threat to value: Low; 5% to 10%

How’s your curb appeal? Is your lawn mowed? Is there chipped or peeling paint on the outside of your home? This is a sure way to negatively affect the value of a home and turn a buyer off. Buyers wonder if sellers can’t take care of simple items like peeling paint, what will the rest of the house look like?

What about the inside of your home? Small things like a stain in the bathtub or a hole in the wall can stand out to buyers. These repairs may be inexpensive, but they can make all the difference when it’s time to sell. Make sure you’ve got good paint and carpet. Whatever you spend there is usually a good investment.

The Canadian housing market is calming rather than crashing, as the impact of tougher mortgage rules and cooling credit is partly offset by the supportive influence of low interest rates and continued income growth, according to a new report from BMO Economics.

“House prices have hit record highs in most regions across Canada, though the rate of appreciation has slowed,” said Sal Guatieri, Senior Economist, BMO Capital Markets.

Resale markets are largely balanced, though buyers have gained leverage in some provinces, including Quebec and British Columbia.

Steadier prices are expected in the year ahead amid decent job growth. A benign outlook for rates and income should support affordability this year, weighing towards relatively steady sales and prices in most regions.

Canadian Housing Market Balanced Mr. Guatieri noted Toronto house prices, though slowing, hit a record high in April; gains in the detached market more than offset slightly lower condo values. Alberta enjoyed decent price gains, while Vancouver’s prices have declined moderately.

“Nationwide, housing starts have adjusted to the reduced demand, returning to household formation rates,” Mr. Guatieri added. “Meantime, Toronto continues to build up rather than out to meet supportive demographic demand.”

BMO Housing Confidence Report found that nearly half of Canadian homeowners (48 per cent) intend to buy a property in the next five years — mostly unchanged from fall 2012 — signalling a high level of confidence in Canada’s housing market is continuing into 2013.

Laura Parsons, Mortgage Expert, BMO Bank of Montreal, noted that it is essential for both buyers and sellers to be aware of any changing conditions on the local level. “If planning to buy or sell a property, consider working with an expert who can help you make decisions that are appropriate to the health of your local market, and more importantly, that responsibly fit within your particular financial situation.”

Source: MarketWire, Vancouver Sun

Ever wonder about the costs associated with moving versus putting money into renovating your home? Garry Marr from the Financial Post added up the figures.

Here’s a way to get some value from your house without selling. Just be prepared to stay put and be ready for some headaches.

Renovating can make your home bigger and more valuable but without any of the enormous transaction costs that can easily top 10%, depending on where you live in the country.

The federal government might have made it more difficult with its tighter and tighter regulations over the last three years to extract cash out of your home to pay for renovations.

Whereas once you could refinance your home for up to 90% of the value, it’s now only 80%.

If you bought a $500,000 home with 5% down, it has to rise in value past $600,000 before you would be able to extract some equity for a renovation. With home price increases shrinking — they are not falling in most parts of the country despite the general negativity — that hasn’t left much opportunity for a major project.

But guess what? Canadians have other ideas. A new poll shows they are actually saving for major projects based on the results that reveal a majority of Canadians are paying for a renovation with cash.

A Bank of Nova Scotia study found 44% of Canadian homeowners plan to do a major renovation in the next two years. Among that group, 62% will fund the transaction with cash.

“The renovation market is quite large in Canada and quite consistent, people are reinvesting in their homes,” says David Stafford, director of real estate secured lending with Scotiabank.

The amount of money spent on renovations in Canada is still dwarfed by the money people spend on buying homes but it’s not small potatoes either. The latest annual data from Canada Mortgage and Housing Corp. put the market at $20.9-billion in 2011 across 10 major markets.

Unfortunately for the 2.6 million people in Toronto, they live in a jurisdiction with two land transfer taxes. You have to pay both the city and province which amounts to $16,200 on a $600,000 purchase or about 2.7% of the value. The only other city with an equivalent tariff is Montreal with its so-called welcome tax.

Consider some of the other costs associated with moving. Realtors charge about 4% to 5% commission on the sale of your home. Add in legal fees, moving costs and some of the soft costs like painting and minor repairs that come with any selling and buying transaction and it’s not hard to get to 10%.

“I wouldn’t say renovation is just a financial decision,” says Mr. Stafford. “People are looking to improve the quality of their environment. The financing and financial requirement are just part of that decision.”

It’s a good point. We’ve come to think of our houses as an investment because they can easily top 50% of our net worth but they are as much about consumption as anything.

Let’s say you do that $50,000 kitchen project. Is your house really going to be worth that much when it comes time to sell? Probably not but in the interim you get to enjoy all those years of cooking and eating in your fabulous kitchen.

“The reality is that very few renovations return a dollar for dollar,” said Mr. Stafford, adding one of the other reasons people choose to improve their existing home are qualitative. “They like the neighbourhood they are in.”

There’s no question not all renovations go as planned. One of the great perils of renovation is doing the whole thing in cash, to avoid HST, and without permits to avoid costly fees.

“It’s cheaper in the short run but maybe not the long run,” says Raymond Leclair vice-president of public affairs with the Lawyers’ Professional Indemnity Company.

The tax is ultimately something that your contractor is required to pay and there’s nothing technically illegal with a verbal contract. But when things go wrong, what do you do without a paper trail?

“It becomes a ‘he said, she said’ situation and you get into court before a judge and say ‘he painted it blue and it’s supposed to be green’. The other said says the opposite,” says Mr. Leclair.

And when it comes to permits, think twice about not doing it by the book. When you sell, the buyer may ask if that addition you built is up to code. The city can ultimately order any project done without proper permits to be taken down, says Mr. Leclair.

Doing a renovation on the books is going to cost you more money. For sure. But when you start by saving up to 10%, it’s worth it.

Should you buy or should you rent? There are many factors to consider and what is right for one person may not be right for you. The following is an article that addresses this dilemma which appeared in today’s Vancouver Sun.

My landlord’s email twisted my stomach into knots.

She informed me that she plans to sell the bright, spacious, perfectly located condo that I’d been renting for the past year and a half.

I would have to leave in three months, she said.

Once the initial shock wore off, I asked myself: “Is it time for me to finally grow up and buy place of my own?”

Farhaneh Haque, director of mortgage advice at TD Canada Trust, said the first factor to consider is whether or not you can actually afford to buy.

“Really have a good understanding of where you stand financially today,” she said.

That means finding out whether there’s enough money for a down payment — a minimum of five per cent of the home’s purchase price. It’s also important to look at what other debts you owe and how stable your employment is.

And the down payment is just one cost to consider. Haque recommends potential home buyers set aside another 1.5 to three per cent of the purchase price to take care of closing costs.

Once the papers have been signed and the property is yours, it’s not just the mortgage payments that you have to worry about after that.

Can you afford property taxes, condo fees, heat, electricity and repairs?

“When you own a home, you can’t call the landlord. Guess what? You’re the landlord,” said Haque.

“You have to create a cushion in your monthly budget to provide for these additional costs.”

Shannen Lazorko, a home financing adviser at Scotiabank, said those costs should be put into the context of the benefits of owning a property.

“At the end of the day, if you continue renting, you’re building someone else’s future,” she said.

Sometimes it does make sense to rent if you’re moving around frequently for work or if the money simply isn’t there.

“I would say, yes definitely it would make sense to rent, but always with the plan to build toward home ownership,” Lazorko said.

“Long term renting to me does not make any sense if you can build towards owning something.”

Steve van der Woerd has a different perspective. He ditched home ownership in favour of renting two years ago — more for lifestyle reasons than financial.

For five years, he owned a condo in Burnaby, B.C.

“There, I was able to get 1,200 square feet, a nice big deck — something I just couldn’t have found in the city of Vancouver for that price.”

But van der Woerd found he didn’t like feeling so disconnected from the cultural and social life in the city. He didn’t like the car-centric way of life and the chores associated with keeping up the condo.

Now, van der Woerd rents in the Vancouver’s South Granville neighbourhood, not far from downtown. He spends less time in his car and has considerably less stress.

“If you’re in Vancouver and you’re thinking of buying, inevitably you’re going to move into a less desirable area unless you’ve got lots of money. My advice would be don’t do that to yourself.”

As for me, I have enough saved for a down payment and the bank pre-approved me for a mortgage at a great interest rate.

But in the end, I decided to keep renting a little longer and build up more of a financial cushion.

When the adviser at my bank plugged the mortgage payments and the extra costs into a calculator, it added up to half my monthly income. That would mean less money for travel, lift tickets and nights out with friends — not to mention emergencies.

“That’s what’s called being house poor,” the adviser said with a laugh.

Source: Lauren Krugel, The Canadian Press