Archive for June, 2008

Rates on 30-year mortgages jump to avg. 6.32%

Thursday, June 12th, 2008

Martin Crutsinger
USA Today

WASHINGTON — Rates on 30-year mortgages jumped to the highest level in nearly eight months, reflecting increased concerns about what the Federal Reserve might do to fight inflation.

Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.32% this week, a sharp increase from 6.09% last week. It was the highest level for 30-year mortgages since they averaged 6.33% for the week of Oct. 25.

Analysts attributed the big jump to increased concerns in financial markets that the Federal Reserve might be preparing to start raising interest rates in order to make sure that inflation does not get out of control.

“Mortgage rates jumped this week after a number of Federal Reserve officials … expressed concern over a threat of inflation,” said Frank Nothaft, Freddie Mac’s chief economist.

In a speech on Monday, Federal Reserve Chairman Ben Bernanke signaled deepening worries about inflation and said that the Fed would “strongly resist” any tendency for Americans’ expectations about price increases to become unsettled.

Those comments have led many investors to move up the date when they believe the Fed might start raising interest rates to some time later this year. From last September through April, the central bank was aggressively cutting rates to try to keep the economy from falling into a recession.

The housing market is facing numerous headwinds at present from slumping prices, which are keeping potential buyers on the fence, to rising mortgage defaults, which are dumping more homes on an already glutted market.

A year ago, rates on 30-year mortgages stood at 6.33%, 15-year mortgage rates averaged 5.99%, five-year adjustable-rate mortgages were at 6.37% and one-year adjustable-rate mortgages were at 5.75%.

The Observatory Restaurant on Grouse Mountain is spicing things up

Thursday, June 12th, 2008

Fresh menu items and a breathtaking view

Linda Bates
Sun

Executive chef Dino Gazzola of Grouse Mountain Peak restaurant is looking to shake up the West Coast menu with fresh, local, organic foods. Photograph by : Bill Keay, Vancouver Sun

The Observatory Restaurant atop Grouse Mountain must have one of the most breathtaking views in the world of dining — or, for that matter, in the world. Tables hug the large windows and, at dusk, candles flicker as the light slips away, opening up another dramatic view, this one of the glimmering lights of Vancouver below.

Lovers hold hands across the tables and visitors to the city find their eyes wandering to the windows as they eat.

But enough of waxing lyrical about the view. The food provides another kind of window on B.C.

At present, the menu emphasizes fresh, sustainable West Coast foods such as halibut, scallops, beef tenderloin and lamb — and in a month or so there will be even more dishes made from local products.

Vancouver-born chef Dino Gazzola, executive chef for all the restaurants on Grouse Mountain, will be streamlining the a la carte menu and adding a seasonal tasting menu that may vary weekly, taking advantage of fresh, seasonal B.C. products.

He says, “I want to re-establish relationships with organic farmers” and take advantage of the rich bounty of food here.

Although that new menu sounds like something to look forward to, on a recent visit we thoroughly enjoyed the current one.

We started with a salad of poached apples with farmhouse cheddar and fresh Vancouver Island oysters. The salad had a lovely light dressing, the apples were delicious and I kept scraping at the plate, hoping for one more molecule of cheese.

The oysters, too, were beautifully prepared and presented — three with a Champagne sabayon (light foam) and three with a touch of gazpacho.

Our mains of beef tenderloin and halibut were good-sized and also well presented, and the cauliflower prepared three ways that accompanied the meat dish was delightful.

However, we had some minor quibbles. The tenderloin was unevenly cooked — some of it was medium rare, as requested, and some not. The halibut was moist and flavourful but salty. (We enjoyed our dinners very much nonetheless.)

Desserts were elegant and just the right size to provide sweetness without guilt. My friend especially enjoyed the white chocolate mousse with roasted strawberries.

It’s not only dessert you don’t need to feel guilty about here — the restaurant is certified by two “green” organizations. Seafood dishes are reviewed by the Vancouver Aquarium before being granted Ocean Wise approval. And Green Table, a San Francisco-based organization, assesses all aspects of a restaurant, from food to power consumption, once a year.

In addition to its a la carte menu, the Observatory also has a prix fixe menu with flights of wine. Speaking of wine, there’s a list of fine wines so vast and varied here you wonder where they find space for the bottles.

Initially, we considered the prices ($39 for a main course) somewhat high — until we realized that Skyride fare, which is complimentary with dinner, would otherwise cost $34.95 per adult.

This makes a very attractive package for a romantic special occasion or for treating out-of-town guests. You get a day of enjoying the walks, the grizzlies and wolves, the gift shops and films — topped with a gourmet dinner in a peerless location.

Make sure you request a window table.

THE OBSERVATORY RESTAURANT

Overall: 4

Food: 3 1/2

Ambience: 5

Service: 4

Price: $$$

The peak of Grouse Mountain (access via Skyride)

604-998-5045

www.grousemountain.com/Summer/dining/the-observatory/ Open 5 to 10 p.m. daily

Restaurant visits are conducted anonymously and interviews are done by phone.

Restaurants are rated out of five stars.

© The Vancouver Sun 2008

 

Growing supply helps stabilize market conditions

Thursday, June 12th, 2008

Re-balance continues

Sun

The Greater Vancouver housing market continued its re-balance between sales and listings last month. The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales in Greater Vancouver declined 30.7 per cent in May 2008 to 3,002 from the 4,331 sales recorded in May 2007.

New listings for detached, attached and apartment properties increased 20.2 per cent to 7,390 in May 2008 compared to May 2007, when 6,149 new units were listed.

“With more property listings and a decline in the number of sales, prices are not increasing as rapidly, now down to single digits overall, which is good news from an affordability standpoint,” said REBGV president, Dave Watt. “The housing market is at a balanced state, sellers have more competition and buyers have more selection to choose from.”

Sales of detached properties in May 2008 declined 33.4 per cent to 1,203 from the 1,805 sales recorded during the same period in 2007. The benchmark price, as calculated by the MLSLink Housing Price Index®, for detached properties rose 8.4 per cent from May 2007 to $771,250.

Sales of apartment properties declined 30.5 per cent last month to 1,244, compared to 1,789 sales in May 2007. The benchmark price of an apartment property increased 8.7 per cent from May 2007 to $389,668.

Attached property sales in May 2008 decreased 24.7 per cent to 555, compared with the 737 sales in May 2007. The benchmark price of an attached unit increased 9 per cent between May 2007 and 2008 to $478,931.

Bright spots in Greater Vancouver in May 2008 compared to May 2007:

ATTACHED:

Coquitlam – up 45.2 per cent

(45 units sold from 31)

APARTMENTS:

New Westminster – up 13.6 per cent

(100 units sold from 88)

Home prices still rising in B.C.

Thursday, June 12th, 2008

But modest increase reflects a sector ‘coming off the boil’

Province

OTTAWA –Prices for new homes in B.C. rose by about five per cent in April from a year earlier — almost on par with the national average, Statistics Canada says.

Vancouver saw year-over-year prices in April climb 5.4 per cent, StatsCan said yesterday. Vancouver prices rose by 0.1 per cent between March and April of this year, StatsCan said.

In Victoria, new-home prices increased by 1.9 per cent between April and the same month in 2007.

Victoria‘s prices fell by 0.3 per cent between March and April.

Nationally, the year-over-year increase of 5.2 per cent was the slowest pace in more than 21/2 years as a weakening Alberta market dragged down the national average, StatsCan said.

April’s rate was down from a year-over-year increase of 6.1 per cent in March. “This was the third consecutive month in which the increase has decelerated, and the slowest rate of growth since September 2005, when year-over-year prices rose by 4.9 per cent,” it said.

In contrast to strong markets in Saskatchewan and parts of Atlantic Canada, home prices in Alberta showed more signs of cooling. “Edmonton and Calgary continued to experience slow market conditions,” StatsCan said.

“Competition among builders has resulted in lower prices being offered to prospective homebuyers.” Prices in Calgary edged up 2.5 per cent in April from a year earlier, compared with a 5.3 per cent year-over-year increase in March.

Meanwhile, Saskatchewan continued to heat up in April. Prices in Saskatoon led the country for the 12th straight month, jumping 43.7 per cent from a year earlier.

In Newfoundland, “a strengthening economy, coupled with increased material and labour costs, has contributed to record increases.” Prices in St. John’s rose 16.3 per cent in April.

“The report adds to the growing body of evidence that indicates that the Canadian housing sector may be coming off the boil,” said Millan Mulraine, economics strategist at TD Securities.

“Similar behaviour has also been observed in the price of existing homes . . . The Canadian housing sector remains in reasonable shape and a U.S.-style correction in home prices remains highly unlikely.”

© The Vancouver Province 2008

 

The pressure’s off rec property

Wednesday, June 11th, 2008

With less demand for vacation homes, prices have been coming down

Bruce Constantineau
Sun

The B.C. recreational property market has shifted to more balanced conditions, with fewer buyers creating less upward pressure on prices, according to a Re/Max report.

The report said the one B.C. exception to the trend is Saltspring Island, where the Islands Trust limits the supply of new properties.

“The demand for waterfront recreational properties remains strong, but prices have stabilized,” Re/Max regional executive vice-president Elton Ash said in an interview. “That’s good news for consumers because there are fewer multiple offers driving prices higher.”

As well, Ash said, the availability of bargain real estate properties in the U.S. has clearly reduced the number of buyers looking at Canadian recreational properties.

“We see U.S. owners of Canadian properties putting them up for sale now so they can take their profits and reinvest them in the U.S sun belt,” Ash said.

While the price of a three-bedroom winterized home on ocean frontage on Saltspring Island starts at about $1.3 million, there are more affordable properties for sale throughout B.C.

The report said the South Okanagan market has moved into “clear buyer territory” for the first time in five years, with rising inventories, falling sales and price corrections underway.

The price of a two-bedroom condo on the water near Penticton now starts at about $400,000, with some developers paying the GST and providing complete appliance packages.

The report noted the North Okanagan recreational property market has also reached a plateau, but affordability remains an issue with a typical three-bedroom winterized home on a 66-foot Okanagan Lake lot starting at $1.5 million.

Ash said the Cariboo region near 100 Mile House and Williams Lake has one of the most affordable recreational property markets in Canada, with budget-conscious buyers choosing rustic cabins or smaller non-waterfront homes.

The report said the majority of sales in the region range between $130,000 and $300,000.

“There are some great buys in the area because people have to drive longer to get there. It’s about eight hours from Vancouver,” Ash said. “It’s really popular with young families who want to unplug because they work 24/7 and they remember enjoying time at the family cabin when they grew up.”

The report said sales of upper-end properties in the Comox Valley/Mount Washington region remain strong this year, with four properties selling for more than $1 million — including a $2.2-million sale in Comox.

Sales of Ucluelet/Tofino recreational properties have slowed from last year’s pace and the inventory of properties priced below $500,000 has increased significantly — “creating buyer’s market conditions for the first time in many years,” the report said.

Across the country, the realty firm said it had found a “substantial increase” in the supply of recreational properties listed for sale, as 91 per cent of the areas it surveys were moving from being sellers’ markets to something more favourable to buyers.

Affordability is now a primary factor, Re/Max said, as a result of serious upward pressure on recreational values in recent years. Rising energy prices and a faltering economy in the East have also dampened demand.

© The Vancouver Sun 2008

 

Cottage country cools off

Wednesday, June 11th, 2008

Lower prices a possibility, but no ‘fire sales’

Province

New listings have yet to put downward pressure on property prices. Province file photo

OTTAWA — The recreational-property market, roiled for years, is returning to more balanced conditions as supply increases and buyers fret over economic concerns and higher prices, Re/Max said yesterday.

B.C. seems to have bucked the trend, but the realty firm said it found a “substantial increase” in the supply of recreational properties listed for sale in Canada, as 91 per cent of the areas it surveys were moving from being sellers’ markets to something more favourable to buyers.

Affordability is a factor, Re/Max said, following upward pressure on prices in recent years. Rising energy costs and a slower economy have also dampened demand.

As a result, “67 per cent of markets reported softening in the number of sales year-to-date,” Re/Max said, blaming part of that on tough winter conditions in the first four months of the year.

“Over the last decade or so we have seen across-the-board double-digit price increases for recreational properties,” said Re/Max spokeswoman Christine Martysiewicz, crediting the prosperity of boomers and the longest expansion since the Second World War for that boom.

Yet while the market has shifted, “don’t expect to see bargain-basement prices or fire sales,” said Re/Max executive vice-president Michael Polzler.

“The influx of new listings has yet to translate into downward pressure on recreational property prices,” Polzler said.

The market’s rebalancing hasn’t dented property values in the northern Vancouver Island community of Tofino where the starting price for a three-bedroom winterized recreation property is $2 million, the highest price in Canada.

Recreation property inventories are low on Saltspring Island, where the starting price for a three-bedroom, winterized home on ocean frontage is $1.3 million.

Alberta‘s oil-fuelled prosperity has helped drive up prices in B.C., Atlantic Canada and parts of Ontario, Re/Max said.

Still, for the first time in many years, a good selection of entry-level waterfront is available across Canada, Re/Max said. Central South Cariboo is among the markets with such properties under $200,000.

As well as baby boomers, the next cohort of young people known as Generation X is becoming a force in the market, Re/Max said.

Falling prices in the U.S. and the high Canadian dollar have lured buyers to that market, Re/Max said

“Some of those very same factors have spurred American recreational property owners in Canada to list their properties for sale,” it said.

© The Vancouver Province 2008

 

B.C. recreational property market stabilizes

Tuesday, June 10th, 2008

Bruce Constantineau
Sun

Recreational property sales have stabilized in B.C.

The B.C. recreational property market has shifted to more balanced conditions, with fewer buyers creating less upward pressure on prices, according to a Re/Max report.

The report said the one B.C. exception to the trend is Salt Spring Island, where the Islands Trust limits the supply of new properties.

“The demand for waterfront recreational properties remains strong but prices have stabilized,” Re/Max regional executive vice-president Elton Ash said in an interview. “That’s good news for consumers because there are fewer multiple offers driving prices higher.”

He also said the availability of bargain U.S. real estate properties has clearly reduced the number of buyers looking at Canadian recreational properties.

“We see U.S. owners of Canadian properties putting them up for sale now so they can take their profits and reinvest them in the U.S sun belt,” Ash said.

While the price of a three-bedroom winterized home on ocean frontage on Salt Spring Island starts at about $1.3 million, there are more affordable properties for sale throughout B.C.

The report said the South Okanagan market has moved into “clear buyer territory” for the first time in five years – with rising inventories, falling sales and price corrections underway.

It said the price of a two-bedroom condo on the water near Penticton now starts at about $400,000, with some developers paying the GST and providing complete appliance packages.

Ash said the Cariboo region near 100 Mile House and Williams Lake has one of the most affordable recreational property markets in Canada, with budget-conscious buyers choosing rustic cabins or smaller non-waterfront homes.

The report said the majority of sales in the region range between $130,000 and $300,000.
“There are some great buys in the area because people have to drive longer to get there – it’s about eight hours from Vancouver,” Ash said. “It’s really popular with young families who want to unplug because they work 24/7 and they remember enjoying time at the family cabin when they grew up.”

 

Condo units the big seller

Tuesday, June 10th, 2008

Nearly all snapped up as soon as they’re finished

Paul Lukes
Province

An estimated half of apartment condominiums under construction in Vancouver are pre-sold. Gerry Kahrmann file photo – The Province

Brisk condo construction pushed housing starts in the Vancouver area up by 10.3 per cent in the first five months of 2008 from the same period last year, Canada Mortgage and Housing Corp. says.

A 14.9-per-cent increase in multi-family units offset a 7.4-per-cent decline in single-family homes over this period, CMHC said yesterday.

CMHC senior market analyst Robyn Adamache said an estimated half of apartment condominiums under construction are pre-sold.

Over the past year, 98 per cent of condo units sold in the same month they were finished.

“This has left a very lean supply of completed and unsold new apartments on the market,” Adamache said.

“While the supply of unsold new condominiums has been edging up since last year, it remains at less than one-third of the 10-year average.”

In the Abbotsford area, multi-unit buildings have staged a rebound this year.

Abbotsford housing starts in the first five months of 2008 rose by 34.1 per cent from the same period last year, driven by a 67.6-per-cent surge in multi-family units, CMHC said.

Seasonally adjusted urban starts in B.C. climbed to 35,400 in May from 34,900 in April.

Nationally, Canadian housing starts rose more than expected in May, with single-family units leading the gains, the CMHC report said.

Activity was up 3.5 per cent last month to a seasonally adjusted 221,300 units.

That’s compared with 213,900 units in April.

Most analysts had expected an average of 220,000 units in May as the housing market cools.

“There has also been a noticeable fall-off in the rate of price increase for existing homes,” Millan Mulraine, economics strategist at TD Securities.

“In the end, this report does confirm our view that the Canadian housing market will remain in reasonable shape, though we expect activity in 2008 to remain below the blistering pace of 2007.”

RBC Economics said the weakening is consistent with signs of declining housing affordability last year as housing prices outstripped income gains.

“A weakening in housing will be a factor contributing to the Bank of Canada cutting the overnight rate by 25 basis points today, though concern about the ongoing credit tightening and dampening effect on U.S. growth are the greater motivating factors,” RBC said.

© The Vancouver Province 2008

 

Facing a CRA Tax Audit – Help avail from Canadian Tax Audit Protection Plan of Sixth Sphere Services by David Douglas Robertson a Toronto Law Firm

Monday, June 9th, 2008

Taxman giving you a hard time?

Ray Turchansky
Province

EDMONTON — An interesting new service called The Canadian Tax Audit Protection Plan is being offered to taxpayers who have caught the attention of the Canada Revenue Agency.

Many taxpayers have been receiving their Notices of Assessment from CRA, saying all is well with their income tax return, so far. But even an attached cheque for your calculated refund amount doesn’t mean you are out of the woods.

A few months later you may receive a follow-up letter, either saying CRA has adjusted your return to reflect incorrect or missing information — such as T-slip income you failed to report — or asking to see medical, education, moving or child-care receipts for verification.

The latter is often done randomly, or when you make a first-time claim or for an amount much greater than usual.

Make copies of any originals you send to CRA; one of my tax clients is still in limbo because the copy of the T2202A education slip sent to CRA went missing.

And send the originals within 30 days of being asked; another client didn’t send medical receipts and was reassessed back tax and interest until remitting the receipts six months later.

But chances are your original slips and receipts will be verified by CRA and returned to you, usually with no changes made to your return.

However, if you are reassessed or even face an audit because a claimed deduction or credit is disallowed or reduced, and if you cannot understand why, you should go to your accountant or tax preparer.

It may turn out that an amount was included as business rather than personal income, or that one expense claim included two or three expenses you had listed separately.

The Canadian Tax Audit Protection Plan is being offered by the Toronto-based law firm Sixth Sphere Services Professional Corp., founded by David Douglas Robertson of the law firm Gasken Martineau and R.D. Bell, former judge of the Tax Court of Canada.

Robertson says a main benefit of the plan is that it is “designed to make such legal services affordable for those individuals who generally could not afford them.”

After people prepare their tax returns, they can apply for membership in the plan through their accountant or financial planner or online at www.ctapp.ca. If their 2007 tax return is audited by CRA within three years of it being received, the plan member is entitled to up to 15 hours of legal services from the Sixth Sphere to advise and assist with the audit, including legal representation before the Tax Court of Canada.

Robertson says the fee for a taxpayer to join the plan, based on his or her sources of income plus types of deductions and credits, generally starts at $20 for an average taxpayer and $50 for people who are self-employed.

The plan is worth considering if you are making tax claims that CRA may contest, and which cannot be explained away by producing slips and receipts, or through an explanation from your accountant. But you should ask beforehand how the plan would cover your situation.

For instance, the plan might seem of interest to people who contribute to tax shelters.

But Robertson writes that “the 15 hours of legal services provided under the plan do not apply [given the virtual certainty that the tax shelter will be reviewed and audited]. However, members are still entitled to a 20-per-cent reduction of our normal hourly rates should they wish to consult us regarding the CRA’s reassessment of the tax shelter.”

He notes that most tax shelters include an escrow fund to help defend it against a CRA challenge.

An interesting angle is that the plan says it extends solicitor-client privilege to discussions between you and your accountant for the purpose of obtaining legal advice under the plan.

© The Vancouver Province 2008

 

Taking care of Google’s business

Monday, June 9th, 2008

Internet companies find they must adjust their ways to remain in favour with countries outside the U.S.

JANINE ZACHARIA
Sun

Google has created a version of its search engine that produces material that is sanctioned by the Chinese government. Companies must respect laws of countries in which they operate, a U.S. official says

When Thailand blocked Google Inc.’s YouTube website last year, the company dispatched deputy general counsel Nicole Wong to help restore access. In Bangkok, a sea of yellow shirts stunned her.

It was a Monday, when Thais wear yellow to honour King Bhumibol Adulyadej. Seeing their reverence, Wong says she grasped why officials reacted so strongly to a video blending a picture of Bhumibol with graffiti — an image that ran afoul of a law against insulting the 80-year-old monarch. Google agreed to block the clip in Thailand while leaving it available elsewhere, and YouTube returned to Thai computers.

Welcome to the culture clashes that Google and other U.S. Internet companies are navigating from Thailand to Turkey and China to Pakistan. The owner of the world’s most popular online search and video sites is learning to live with countries that “don’t share the same baseline” about the Web, Wong said in an interview at Google’s Mountain View, Calif., headquarters. These governments ban objectionable material because they “don’t know how else to control it.”

The Internet superpower’s corporate diplomacy is establishing far-reaching practices to keep online content, and advertising dollars, flowing across borders. Google’s ambassadors, lobbyists and lawyers are traveling the globe to gauge what governments will tolerate — and showing a readiness to bend America’s cherished belief in free expression.

“The notion that companies chartered in the United States do things in other countries they would never dream of doing in the United States is discomforting, obviously,” says John Palfrey, executive director of the Berkman Center for Internet & Society at Harvard University in Cambridge, Mass. “I think, though, this is the reality of doing business in a multinational environment, joined by a common technological network, which is the Internet.”

China, with an estimated 230 million people online, has been at the centre of the Web freedom controversy, especially since rival Yahoo! Inc. turned over emails and other information to the Chinese government in 2006, leading to the imprisonment of journalist Shi Tao and writer Wang Xiaoning.

“While technologically and financially you are giants, morally you are pygmies,” then-House Foreign Affairs Committee Chairman Tom Lantos told Yahoo executives during a 2007 hearing.

Yahoo, based in Sunnyvale, Calif., apologized, provided financial support to the prisoners’ families and asked the U.S. to discuss their plight with China.

In response to the Yahoo fiasco, Google decided not to offer Gmail, its popular e-mail service, in China to avoid government demands for messages. To prevent disruptions to its Chinese operations, the company maintains regular contact with officials through its office in Beijing.

Those ties are too cozy for some. Two years ago Google created a version of its search engine — Google.cn — that produces Chinese government-sanctioned material when people inside China seek anything on Tibet, Taiwan or Tiananmen Square.

“Even though Google and other companies now provide a disclaimer to notify users that censorship occurs, they still decide what to censor and whether they will even challenge the government’s actions,” Arvind Ganesan of New Yorkbased Human Rights Watch told a U.S. Senate panel on May 20.

Robert Boorstin, a former New York Times reporter who shapes communication strategy for Google from Washington, says the company was “given a choice to open a public library in the form of Google.cn” or be shut out of the country.

“We knew that users of the Google Chinese service would not be able to see a small, important part of the library,” he says. “But the alternative was no library cards for anyone.”

Customers in China and other countries are increasingly important for U.S. Internet companies: 48 per cent of Google’s revenue came from outside the U.S. last year, up from 39 per cent in 2005.

“Our goal is to maximize free expression,” Boorstin says. “But you face these situations where governments come to you and say, ‘You are violating our laws’.”

David Gross, U.S. government coordinator for international communications and information policy, endorses Google’s approach.

“We believe, of course, that companies need to respect domestic laws,” Gross says. “Having said that, finding technical solutions that don’t disadvantage those who live outside those countries is very important.”

Some say Google is in a unique position to take a tougher line in its Web diplomacy. “Google may be the first entity humankind has ever known with the global economic power and social influence to take the ethical high road and to treat free and open expression like a moral absolute,” says Jonathan Askin, a Brooklyn Law School professor and lawyer for Internet clients.

“If Google doesn’t have the wherewithal to exert its influence for the good of humanity, I don’t know who will have the courage going forward,” he says.