Blog › July 2014

Recently Sold Listing 304 - 1777 Kingsway Other, Vancouver, British Columbia


V1058465 - 304 - 1777 Kingsway Other, Vancouver, British Columbia, CANADAI have just recently sold this listing at 304 - 1777 Kingsway Other, Vancouver.

BC Home Sales Up 24.9% in June, Prices Up 4.5%


There were 8,989 residential sales in British Columbia recorded by the MLS® in June, up 24.9 per cent from June 2013, according to British Columbia Real Estate Association (BCREA) figures released July 16.

Total sales dollar volume was $5 billion, an increase of 30.5 per cent compared with a year ago.

The average MLS residential price in the province rose to $556,977, up 4.5 per cent from June 2013.

“Home sales finished the second quarter on an upward trend,” said Cameron Muir, BCREA chief economist. “The increase in provincial housing demand was broad-based, with the largest year-over-year increases occurring in the Okanagan, the Kootenays and Chilliwack.”

Home sales increased 46 per cent in the South Okanagan and nearly 30 per cent in the Okanagan Mainline Real Estate Board area.

In the Kootenays, home sales rose 36 per cent year over year and in Chilliwack they increased 33 per cent.

“Market conditions also continued to improve, with the Okanagan and the Lower Mainland even flirting with sellers’ market conditions,” said Muir.

In the first half of the year, BC’s residential sales dollar volume was up nearly 26.8 per cent to $23.8 billion, compared with June 2013. Residential unit sales were up 18.5 per cent to 41,883 units, and the average residential price was up 7 per cent at $568,499.

Here’s BCREA Chief Economist Cameron Muir with his video wrap-up of the June 2014 real estate market in BC.




How to Use Home Equity to Unlock Tax Deductions


unlockUnlike our American neighbours to the south, Canadians can’t take a mortgage interest deduction on their taxes. However, there is a scenario where the Canada Revenue Agency (CRA) allows taxpayers to mimic the effect of deducting mortgage interest.

Fraser Smith, a now-retired financial strategist in Victoria, BC, created the Smith Manoeuvre two decades ago based on this premise: Mortgage interest isn’t tax deductible in Canada, but loans on investments are.

So, a Canadian with sizable non-registered investments (those that generate taxable income and do not have contribution limits) could use those funds to pay off an existing mortgage or purchase a residence. Depending on the mortgage and whether it’s open or closed, there may be prepayment penalties for paying it off before the end of the term, so those costs should be weighed against the potential tax benefits of this strategy. Assuming the numbers stack up, a few days later, the homeowner would be able to apply for a separate loan for purposes of investing and use their property as collateral.  If the borrower later decides to move house during the process, the lender may agree to what’s called a “substitute of collateral.”

Afterwards, the homeowner could reinvest funds from the loan into qualified, non-registered investments (avoiding TFSAs and RRSPs, as those are registered investments) and deduct the interest on the investment loan.

Homeowners who employ this strategy are basically using the equity in their home to invest and hopefully grow their assets over time, thanks to the tax deduction they enjoy combined with the growth of their investments. This deduction is legally permitted by CRA, but it’s always a good idea to keep all records documenting any tax deductions in case they are questioned later.

There are some scenarios in which the Smith Manoeuvre may not work. Canadians who take out a mortgage to purchase a rental property may be looking at slightly higher interest rates as most lenders add a premium to non-owner occupied homes. It makes sense for the investor to compare the offers and rates on websites such as ratehub.caratesupermarket.ca or lavarates.ca to ensure they are getting the best available mortgage and rate. However, it does help to know that when a property is considered an investment, with fair market rent, the homeowner may be able to deduct the mortgage interest, among other costs associated with the rental unit. This would not apply if a mortgage was taken out on a paid-off rental property to finance the purchase of a new primary residence.

In addition, under CRA rules, those who do more than 50 per cent of work in a home office may be able to deduct certain costs associated with that home office (such as a percentage of property taxes, heating and home insurance) but not the actual mortgage interest.

For more specifics on tax deductions, investments and how they might apply to your individual situation, consult a tax accountant or financial planner.

 


Recently Sold Listing 1275 DOUGLAS TE, Port Coquitlam, British Columbia


V1070204 - 1275 DOUGLAS TE, Port Coquitlam, British Columbia, CANADAI have just recently sold this listing at 1275 DOUGLAS TE, Port Coquitlam.

Recently Sold Listing 1 - 138 W 13th Ave, Vancouver, British Columbia


V1074108 - 1 - 138 W 13th Ave, Vancouver, British Columbia, CANADAI have just recently sold this listing at 1 - 138 W 13th Ave, Vancouver.

BC Home Sales, Prices Predicted to Continue Rise


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BC housing sales and prices are predicted to continue their rise over the next few years, but will be only a modest source of growth for the BC economy as a whole, according to a Central 1 Credit Union report released July 3.

The report was issued on the same day that the Real Estate Board of Greater Vancouver and the Fraser Valley Real Estate Board reported increases in home sales and prices in Greater Vancouver and the Fraser Valley respectively.

B.C. Housing Forecast 2014–2017 forecasts that median home prices in the province will continue to climb, with growth expected to average just under 3 per cent per year through 2017 to $429,000.

“Price growth is expected to average less than 3 per cent a year through to 2017 as higher borrowing costs and stricter mortgage insurance policies weigh on affordability,” said Bryan Yu, Central 1 economist and report author.

“The strongest gains in BC will be in the Lower Mainland and Northern B.C. regions. Excess supply and subdued demand hold back price growth in the interior and island markets.”

Annual housing starts are forecast to remain at about 27,200 units in 2014 and are on track to average 30,000 units by 2016. Because of the surplus of housing inventory, housing starts will trail household formations, which are forecast to average about 31,000 from 2014 to 2017.

Northern BC’s housing market outpaces the rest of the province, with stronger port activity and pre-construction projects related to LNG development.

BC’s economy will expand by less than 2.5 per cent this year, but is forecast to make some steady gains, averaging more than 3.5 per cent from 2015 to 2017.

The forecast for the housing market, however, remains mixed. Low borrowing costs have boosted BC’s market this year, particularly in the detached housing sector in the Lower Mainland market, but rising mortgage rates and tightened lending policies are predicted to reduce sales over the forecast period.

“Despite a rising rate mortgage environment, the stronger economic outlook is expected to drive consumer confidence, income and employment,” said Yu.

The loss of BC residents to Alberta and Saskatchewan is expected to reverse in 2015, with an inflow of landed immigrants and Canadians from throughout the country driving demand for new homes. In the meantime, housing starts are predicted to remain steady, despite a busy early part of 2014, in which urban markets posted a 14 per cent year-to-date gain through May.



New Listing 1 - 138 W 13th Ave, Vancouver, British Columbia


V1074108 - 1 - 138 W 13th Ave, Vancouver, British Columbia, CANADAView my new listing for sale SOLD at 1 - 138 W 13th Ave, Vancouver and currently listed at $1,198,000.SOLD

Vandwell Living Signature property -Magnolia at City Hall!! Brand new side by side, duplex style townhome 3 bedroom /2.5 bathroom with 1 car garage. North/South facing exposure. Contemporary interior design, open plan living/dining chefs kitchen w/Wolf range, electric f/p, s/s appliances, built in speakers, good size deck, roughed in a/c, built in vacuum, gas cooktop, engineered H/W flooring, clean lines, 'Kohler' plumbing fixtures, 9 ft ceilings, radiant heat, rainscreened exterior with 2/5/10 yr warranty, Prime City Hall area!! Tree-lined street close to Sky train, City Hall, VGH and shopping. Schools - Simon Fraser, Eric Hamber. Open House Sat/Sun July 19-20 2-4pm

New Listing 2 - 138 W 13th Ave, Vancouver, British Columbia


V1074109 - 2 - 138 W 13th Ave, Vancouver, British Columbia, CANADAView my new listing for sale SOLD at 2 - 138 W 13th Ave, Vancouver and currently listed at $1,249,000.SOLD

Vandwell Living Signature property -Magnolia at City Hall!! Brand new side by side, duplex style townhome 3 bedroom/2.5 bathroom with 1 car garage. North/South facing exposure. Contemporary interior design, open plan living/dining chefs kitchen w/Wolfrange, electric f/p, s/s appliances, built in speakers, good size deck, roughed in a/c, built in vacuum, gas cooktop, engineered H/W flooring, clean lines, 'Kohler' plumbing fixtures, 9 ft ceilings, radiant heat, rainscreened exterior with 2/5/10 yr warranty, Prime City Hall area!! Tree-lined street close to Sky train, City Hall, VGH and shopping. Schools - Simon Fraser/Eric Hamber. Open House Sat Aug 2 1-3 and Sun Aug 3 2-4

New Listing 3 - 138 W 13th Ave, Vancouver, British Columbia


V1074110 - 3 - 138 W 13th Ave, Vancouver, British Columbia, CANADAView my new listing for sale at 3 - 138 W 13th Ave, Vancouver and currently listed at $599,000.

Vandwell Living Signature property -Magnolia at City Hall!! Brand new garden level, townhome 2 bedroom/1 bathroom with 1 open parking. North facing exposure. Contemporary interior design, open plan living/dining chefs kitchen w/Wolf range, electric f/p, s/s appliances, built in speakers, good size deck, gas cooktop, engineered H/W flooring, clean lines, 'Kohler' plumbing fixtures, 9 ft ceilings, radiant heat, rainscreened exterior with 2/5/10 yr warranty, Prime City Hall area!! Tree-lined street close to Sky train, City Hall, VGH and shopping. Schools - Simon Fraser/Eric Hamber. Open House Sat/Sun August 23/24 2-4pm

New Listing 4 - 138 W 13th Ave, Vancouver, British Columbia


V1074111 - 4 - 138 W 13th Ave, Vancouver, British Columbia, CANADAView my new listing for sale SOLD at 4 - 138 W 13th Ave, Vancouver and currently listed at $629,000.SOLD

Vandwell Living Signature property -Magnolia at City Hall!! Brand new garden level, townhome 2 bedroom/1 bathroom with 1 open parking. South facing exposure. Contemporary interior design, open plan living/dining chefs kitchen w/Wolf range, electric f/p, s/s appliances, built in speakers, good size deck, gas cooktop, engineered H/W flooring, clean lines, 'Kohler' plumbing fixtures, 9 ft ceilings, radiant heat, rainscreened exterior with 2/5/10yr warranty, Prime City Hall area!! Tree-lined street close to Sky train, City Hall, VGH and shopping. Schools - Simon Fraser/Eric Hamber. Open House Sat/Sun August 9/10 2-4pm