Is Canadian Real Estate a Ticking Time Bomb?

According to Dan Werner of Morningstar, the Canadian real estate market is seriously overvalued and Canada could see a 30% nationwide decline in the price of houses.

Canadian debt-to-equity ratios look awfully similar to U.S. numbers at the top of its market, as 23% of Canadian homeowners have a debt-to-value ratio of greater than 80%. The number in the U.S. at its peak was 22%. Werner also cites evidence that many Canadian borrowers can’t handle higher interest rates. More than 2.5 million have used the RRSP to help out with funding the down payment. This loan must be repaid over time, or else the recipient has to pay tax on the proceeds. In recent years, a full 25% of Canadians couldn’t afford to pay their RRSP loans back.

Source: http://www.fool.ca/2014/07/15/is-canadian-real-estate-a-ticking-time-bomb/

Housing Starts in St. Catharines-Niagara up in June

Housing starts in the St. Catharines-Niagara Census Metropolitan Area (CMA) were trending higher at 1,294 units in June compared to 1,208 in May, according to Canada Mortgage and Housing Corporation (CMHC).

"The higher trend for starts in June shows signs of a sustained recovery post 2009. Once again, actual starts for June and year-to-date were up from a year ago. This strength is attributable to a tighter resale market in which choices were limited. The greater gains posted in multi-unit homes than in single-detached homes shows that the more affordable home types were more popular," said Alberto Mendoza, CMHC`s Market Analyst.

http://media3.marketwire.com/docs/956474e.pdf

Source: http://dcnonl.com/nw/36575/re

Canadian consumer confidence rises

Canadian consumer confidence rises as real estate outlook surges

As the housing starts rose to their strongest level in seven months in May, preceded by a decline in construction in the first three months of the year (Canada Mortgage & Housing Corp.), Canadian consumer confidence rose and so the percentage of respondents who believe home values in their neighborhood will increase in the next six months, the highest since the fourth quarter of 2009.

Although Canada’s economic growth slowed in the first quarter as the harsh winter slowed housing construction, business spending and exports, and expanded less than economists forecast in April, it remained appropriate for the central bank to keep its benchmark interest rate at 1 percent, in view of the economy’s “modest” pace of growth (Bank of Canada Governor Stephen Poloz).

Source: BNN (Business News Network)

Average House Prices up 7.1%

Average house price in Canada rose 7.1% in May

Comparing with same time last year, average house prices in Canada rose 7.1 percent to $416,584 in May, according to Canadian Real Estate Association.

More than that, the real estate market went up 5.9 percent from April to May in terms of volume of sales. This represent the most significant monthly jump in almost four years.

Based on this data, Canadian Real Estate Association upped its forecast for how many homes it expects to be sold this year.
Canadian home sales hit an all-time high of more than 520,000 in 2007. They have remained in a range of either just above 450,000 or just below that level every year since then.

Source: 

May 2014 Housing Starts in St. Catharines-Niagara

Housing starts in the St. Catharines-Niagara Census Metropolitan Area (CMA) were trending lower at 1,210 units in May compared to 1,263 in April, according to Canada Mortgage and Housing Corporation (CMHC). The trend is a six month moving average of the monthly seasonally adjusted annual rates (SAAR) of housing starts.

St. Catharines-Niagara CMA Housing Starts

Preliminary Housing Starts data is also available in English and French at the following link:
Preliminary Housing Starts Tables 

Source: http://dcnonl.com/nw/36387/re

Spread your real estate investments

As real estate market continues to improve, many investors now are chasing the “hot markets” and putting all their eggs in one basket. Although is tempting to concentrate on one particular area, you have to ensure that you are not over dependent on one particular market, one particular type of property or one particular country.

Those who have been successful time and time again in the real estate market are those who have sold before the top and bought before the bottom of the market.

Investing on a medium to long-term basis and continually monitor the value of your real estate assets by making changes where applicable and assess the risk/reward ratio is something that you should consider for a profitable long-term business.   

Source:  http://www.propertyforum.com/property-trends/spread-your-real-estate-investments-to-reduce-your-risk.html

Remodel trend: Larger shower subs for tub

A more modern and functional bathroom adds to the quality of life at home, and potentially adds to a home’s resale value. Of course, there are limits to consider — from budgetary to footprint restriction. However, the oversized soaking tubs take up a lot of room and although they look glamorous, large tubs require more water than most standard water heaters can supply to completely fill with hot water.
If a good soaking bath is not a high priority for you, consider converting a tub into a larger, more-luxurious shower. The shower possibilities are almost unlimited, including body sprays, handhelds, rain heads and more.
Keep in mind that some of the innovative options could increase the cost of the project.
From spalike luxury to utilitarian simplicity, there are many options to create your own version of a bathroom update.

Source: http://seattletimes.com/html/homesrealestate/2023435292_hrehomework27xml.html