Cancellation of Home Retrofit Program –

A lot of home sellers have reaped the rewards of the home retrofit program. The benefits were two fold in that home owners made their homes more efficient while at the same time increasing the value of their properties. The program was introduced in 2007 as the ecoEnergy program. After conducting the initial audit home owners were able to update their properties with everything from insulation to furnaces and air conditioners in order to get back as much as $5,000 in rebates. In order to obtain the rebates a follow up audit had to be performed.

This program was intended to run until March 2011. However, on March 31st at 5pm ET it was announced that the Department of Natural Resources would not be accepting any new applicants to the program. Those who have had the first audit done can complete their retrofits and then complete the second audit to get the rebates. According to the press release If you have already booked an appointment for a pre-retrofit evaluation, have completed an evaluation or applied for re-entry to the program, you remain eligible to apply for a grant.” Homeowners who have not booked an audit will not be eligible for the rebate. The Government will be administering the program until March 31, 2011.

The speed at which the program was cancelled and with little to no warming is drawing fire from the political opposition. This program was also creating many jobs in Canada.

I know that I personally have benefited from this program, as have numerous clients of mine. Hopefully the decision makers will reconsider this decision. For those of you that missed the opportunity you may want to send your opinion to Ottawa. For those that are still going to squeak in under the wire, you will want to make the most of the opportunity.

If I can be of assistance to you with regard to this information, please contact me at 905-330-1241 or rdavison@trebnet.com. All the best. Ryan.

Low inventory levels set stage for heated Spring market in most major Canadian centres, says RE/MAX

Active listings down in 81 per cent of markets in January

Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.

The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16 markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.

There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months, as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.

Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo
(-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax-Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.

Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.

While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings—especially at the entry-level price point—experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.

The level of frustration is growing, as pent-up demand builds. For every successful offer, there are those that will walk away empty-handed. They’re thrust back into the buyer pool and the process starts all over again. Some buyers are upping the ante, while others are considering alternate housing options. Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.

Recent revisions to lending criteria will add fuel to the fire in the short term. Buyers considering a variable rate mortgage will step up their plans for homeownership in the next month or so just to get in under the wire. In the longer term, buyers will adjust, but move forward. Compromise has long been a reality—particularly in the larger centres. This simply means they may go smaller or further in their pursuits.

It’s been a 180 degree turnaround from this time last year. It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders. The vast majority of markets are now recovered and fully-evolved, with all segments working in tandem. At the luxury price point, activity was brisk in seventy-three per cent of centres surveyed, with momentum ramping up in the remainder. Opportunity exists in some areas, but the question is for how much longer?

The local real estate market is quite active at the moment. Should you wish to discuss how the information above might impact the value of your current home or the price of a home you might be considering, please feel free to contact me at rdavison@trebnet.com or 905-330-1241. Exciting times!

The New HST: What It Means To You.

July 1, 2010: Be sure to note that date in your Blackberry, iPhone or gadget du jour. This is the date that the new provincial harmonized sales tax (HST) is set to come into effect. In the simplest sense the HST combines the 8% PST and the 5% GST into one 13% HST. This extra 8% will apply to a list of goods and services that were previously exempt from PST.

One large item of interest will be new construction homes. New construction homes have been subject to GST since its introduction in the early 1990’s. The government did create a GST Rebate to first time home buyers of new construction to help ease the burden. With the introduction of the HST, there is an additional 8% tax added onto the price of a new construction home.

To help offset this cost, the government has created the New Housing Rebate. The rebate will be 75% of the provincial portion of the HST payable on the purchase of a new home, up to a maximum rebate of $24,000 (i.e., $400,000 purchase price × 8% provincial component = $32,000 ×75% rebate = $24,000). This results in a maximum rebate of $24,000 if a vendor spends $400,000. A recent update in legislation has made the rebate available to homes of any sale price, to a maximum of $24,000.

What will the HST mean to Ontario resale home purchasers and sellers?
Should you be purchasing or selling a home on or after July 1, 2010, it makes sense to budget an additional 8% more for legal fees, moving costs, real estate commissions, appraisals and home inspection fees to name but a few. The Ontario Real Estate Association estimates that an additional $1,449 in new taxes would be added to a transaction for a home valued at $302,354. This is estimated to add $262 million in new taxation of resale homes annually in Ontario. Even if you are not planning a move in the next couple of years, all homeowners need to take note.

The 8% PST increase in taxation will apply to services required to maintain your home as well. Many of these services would have previously been exempt from PST including utilities, home renovation labour, landscaping, snow removal and more. Should you be renting, you may think that the HST increase would not apply to you. Please take a step back and think about whether your landlord will be willing to take an 8% increase in operating costs or whether he or she might pass as much of that along to you as possible. In fact, condominium residents will experience a similar effect with maintenance fees as these 8% cost increases will need to be passed along or eventually eat away at reserve funds.

Love it or Hate it, the HST is going to be a Canadian reality as of July 1, 2010. (I have an idea which way you might be leaning.) Be aware of the looming increased costs and make smart decisions with the money you have in hand.

Please feel free to call me direct if I can be of any further assistance: 905-330-1241.