Canadians start shying away from buying

Helen Morris
Province

The number of Canadians planning to buy a home falls across the country — except in Quebec.

OTTAWA — The number of Canadians intending to buy a home is at the lowest level since 2002, according to RBC Royal Bank’s annual homeownership survey released yesterday .

The survey results indicated that overall those “planning to buy a home” within the next two years has declined five percentage points to 23 per cent. The number “very likely” to buy a home has fallen from nine per cent in 2007 to seven per cent in 2008 — the lowest level since the survey began 15 years ago.

Survey respondents in Quebec bucked the downward trend with those likely to buy a home in the next two years rising two percentage points to 21 per cent.

The numbers very likely to buy a home were at nine per cent in Saskatchewan and Manitoba followed by Alberta at eight per cent.

Around seven per cent of respondents in B.C., Ontario and Quebec said they were very likely to purchase a home in the next two years with just five per cent in Atlantic Canada saying they expected to be in the market for a home.

The survey authors suggest there are signs of a slowdown in the housing market as the number of Canadians who would “buy now” rather than waiting until next year fell from 58 per cent in 2007 to 52 per cent in 2008.

“I’m not surprised by the results. We’ve had a really long, strong real-estate market and this is not a dramatic drop.” said Catherine Adams, RBC Royal Bank’s vice-president, home equity financing. “It’s really just saying things are starting to cool down. People are . . . being a bit more cautious.”

Adams suggested that Canadians remained optimistic about the housing market — but that they were merely less optimistic than last year.

“I think it’s a healthy economy. It’s a very healthy real-estate market, very healthy mortgage lending practices within Canada.” said Adams.

According to the RBC survey, 56 per cent of respondents also anticipate house prices will rise. In 2007 that figure was 59 per cent.

More respondents also believe their mortgage rates will change. A total of 46 per cent believe rates will rise compared with 43 per cent in 2007. However, the numbers who anticipate a cut in the cost of their home loan rose seven percentage points to 23 per cent.

The online survey is based on a randomly selected representative sample of 3,023 adult Canadians. The results are considered accurate to within plus or minus 1.8 percentage points, 19 times out of 20.

© The Vancouver Province 2008

Noelle Knox
USA Today

James Ratcliff is selling this two-story brick home, built in 1996 on the Grand River. This 6-bedroom home with a 3-car garage, a boathouse and views of a waterfall and river is the most expensive on the Lansing market. List price: $997,000. Price: $997,000 Bedrooms: 6 Bathrooms: 5 full baths, 2 half baths Size: 4,031 square feet Features: Hardwood floors, 3 fireplaces, 3-car garage, boathouse, waterfall, river views.

This Cape Cod-style house on a corner lot is on the market. Price: $111,900 Bedrooms: 3 Bathrooms: 1 full, 1 half Size: 1,080 square feet Features: Two bedrooms on ground floor, office upstairs, laundry room, finished basement. Two-car garage, shed, fenced backyard.

Layoffs in the auto industry throughout the state are the primary reason. Michigan has some of the highest mortgage foreclosure rates in the country. Lenders, stuck with thousands of empty homes, are unloading them at prices “significantly under market value, and that skews the numbers,” said Matt Robertson of Century 21 Looking Glass. He adds that many foreclosed homes in the Lansing area are selling for around $50,000.

For the average homeowner who has a house for sale, Robertson says: “It makes it more challenging. You have to have things done to your house to make it more appealing. But buyers need to keep in mind that with foreclosures, they need significant investments; they are not move-in ready.”

As the state capital, Lansing is blessed with one of the lowest unemployment rates in Michigan. The area also benefits from its hospitals, which are expanding, as is the local Michigan State University.

“If we didn’t have the university, I don’t think I would live here,” because it adds so much to the community, says Lynne Van Deventer, an agent at CB Hubbell BriarWood-East, who posted record sales last year thanks to an influx of people into Lansing’s suburbs.

Total value in Canada increases 8.5% in 2007

Sun

OTTAWA — The total value of residential construction investment in Canada for 2007 reached $88.7 billion, an increase of 8.5 per cent compared with 2006.

Monday’s report from Statistics Canada showed that there were gains across all types of residential construction –new housing, renovation and acquisition costs.

All provinces and territories saw an increase in residential construction investment year-on-year from 2006 to 2007. Statistics for the fourth quarter of 2007 showed a marginal fall in Quebec and Yukon when compared to the same quarter in 2006.

In dollars the largest yearly increases were in Alberta rising 18.9 per cent to $14.8 billion and Quebec where investment stood at $19.1 billion an increase of eight per cent. The greatest percentage climb was 37.4 per cent in Saskatchewan.

Investment in new housing made up the largest dollar contribution, according to Statistics Canada, with an increase of 8.5 per cent to $44.2 billion. The report said the main driver behind this increase was investment in single-family homes, which rose 7.2 per cent to $27.4 billion, and in apartment and condominium construction, which increased 9.7 per cent to $10.3 billion.

Strong economic indicators in Western Canada — favourable job situation, growth in disposable income, attractive financing options and the strength of the economy — continued to support the demand for housing.

The Statistics Canada report said the increase in the price of houses also contributed to the rise in investments. The New Housing Price Index (house-only component) increased by 7.4 per cent in 2007 compared with the previous year.

In 2007, renovations rose 9.5 per cent to $36.8 billion, which made up 41.5 per cent of all residential construction investments. The Statistics Canada report showed that acquisition costs were 8.6 per cent of total investments, or $7.7 billion, a rise of 4.1 per cent compared with 2006.

Figures for the fourth quarter of 2007, indicated that construction investment rose 10.6 per cent to $23.1 billion compared with the same quarter in 2006. The report said that the increase came from new housing, renovations and acquisition costs.

© The Vancouver Sun 2008

Sun

New Calgary homes: ‘The only way we achieved such [record] gains was due to the cost escalation in the construction market,’ one analyst says. Photograph by : Mikael Kjellstrom, Canwest News Service, Files

CALGARY — Despite a moderating real estate market, investment in housing in Alberta continued to soar in 2007, with the province adding the largest dollar volume of any.

Housing construction pushed spending up 19 per cent to a record $14.7 billion.

Analysts say high construction and renovation inflation drove over-all residential construction expenditures higher and renovation growth to a record, up 13 per cent from a year ago.

the pattern of surging housing expenditures in Alberta all of 2007 was also evident in the last three months of the year, when residential construction investment surged nearly 20 per cent to $4.1 billion.

“With weaker housing starts, the only way we achieved such gains was due to the cost escalation in the construction market,” said Richard Corriveau, regional economist for Alberta for Canada Mortgage and Housing Corp.

Corriveau cited Alberta’s new housing price index, which was 41 per cent higher than a year earlier in January 2007, 12.5 per cent higher in December 2007 and averaged 23.7 per cent for the year as another indicator of rampant price inflation in the housing area.

The agency measures residential housing investment using three broad categories; new housing, renovations and acquisition costs and all three posted gains in 2007, with new housing leading the way.

© The Vancouver Sun 2008

$88.7 billion spent on residential construction in 2007, up from 2006

Province

OTTAWA — The total value of residential construction investment in Canada for 2007 reached $88.7 billion, an increase of 8.5 per cent compared with 2006.

Yesterday’s report from Statistics Canada showed that there were gains across all types of residential construction — new housing, renovation and acquisition costs.

All provinces and territories saw an increase in residential construction investment year-on-year from 2006 to 2007. Statistics for the fourth quarter of 2007 showed a marginal fall in Quebec and Yukon when compared to the same quarter in 2006.

In dollars, the largest yearly increases were in Alberta, rising 18.9 per cent to $14.8 billion, and Quebec where investment stood at $19.1 billion, an increase of eight per cent. The greatest percentage climb was 37.4 per cent in Saskatchewan.

Investment in new housing made up the largest dollar contribution, according to Statistics Canada, with an increase of 8.5 per cent to $44.2 billion. The report said the main driver behind this increase was investment in single-family homes, which rose 7.2 per cent to $27.4 billion, and in apartment and condominium construction, which increased 9.7 per cent to $10.3 billion.

Strong economic indicators in Western Canada — favourable job situation, growth in disposable income, attractive financing options and the strength of the economy — continued to support the demand for housing.

The Statistics Canada report said the increase in the price of houses also contributed to the rise in investments. The New Housing Price Index (house-only component) increased by 7.4 per cent in 2007 compared with the previous year.

In 2007, renovations rose 9.5 per cent to $36.8 billion, which made up 41.5 per cent of all residential construction investments. The Statistics Canada report showed that acquisition costs were 8.6 per cent of total investments, or $7.7 billion, a rise of 4.1 per cent compared with 2006.

Figures for the fourth quarter of 2007, indicated that construction investment rose 10.6 per cent to $23.1 billion compared with the same quarter in 2006. The report said that the increase came from new housing, renovations and acquisition costs.

© The Vancouver Province 2008

Keith and Kevin Greenard
Province

The Home Buyers Plan may be a good idea for the first-time home-buyer.

Saving for education or buying a home often have higher priorities for young people than contributing to an RRSP.

But the Home Buyers Plan and the Lifelong Learning Plan can provide options for anyone saving for retirement but in need of investing in more immediate priorities.

The LLP allows you to withdraw up to $10,000 in a calendar year from your RRSP to finance training or education. You can’t withdraw more than $20,000 in total. To qualify, three conditions must apply:

– The person must be a full-time or a part-time student if he or she meets the disability conditions.

– The RRSP owner has to be a resident of Canada.

– The student has to enrol in a qualifying educational program at a designated institution.

People may participate in the plan as many times as they wish after repaying an LLP withdrawal. You and your spouse may also be participants in the LLP at the same time. You may be eligible to participate in the LLP even if you have withdrawn amounts from your RRSP under the HBP that have not been fully repaid.

Students must receive a written offer to enrol before March of the year after a withdrawal from their RRSP. Participants who withdraw funds from their RRSP under the LLP must repay the amounts over a period of up to 10 years.

With the HBP, young people who begin contributing to an RRSP may not even own a house yet. Does it make sense to contribute to an RRSP if you think you will need to keep funds liquid to buy a home? In some cases the answer is yes.

The HBP allows participants to withdraw up to $20,000 in a calendar year from an RRSP to buy or build a qualifying home. Couples may each utilize the HBP (combined maximum of $40,000). The plan may be suitable for any first-time home-buyers who are buying a home and may need additional funds to pay for a down payment or reduce financing costs. Participants have up to 15 years to repay the amount that is withdrawn.

© The Vancouver Province 2008