Loans Secured by Residential Property

Loans secured by residential property, are when homeowners pledge home equity as collateral. If the borrower doesn’t pay the loan back, the lender can recoup losses by selling the collateral. Since the lender has a lower risk, they can charge the borrower a much lower interest rate. The most common form of this loan is a home equity line of credit (HELOC), but there are other types of loans as well.

HELOCs can be beneficial if used properly. The one issue is when real estate prices move quickly, the amount of equity homeowners will have access to can fluctuate. In the event real estate prices ever fall, this amplifies risk for homeowners because they would lose not only the on-paper value of the home, but the debt remains the same until paid down. This could leave borrowers with less equity than they expected.

The balance of loans secured by residential property reached $303.41 billion in August.

Home Renovations that Add or Detract Value

On Thursday, the Times Colonist ran an article entitled “Home renovations with the best financial, emotional return for owners.”

“Dream kitchens and luxurious bathrooms are often the go-to renovations for homeowners looking for the best return on investment, but experts suggest the biggest bang for their buck might be as simple as replacing a garage door,”

Dollar-for-dollar returns tend to come from smaller tweaks. Swapping kitchen hardware, installing new light fixtures or removing outdated decor, such as wallpaper, can help. Kitchens and bathrooms, on the other hand, often don't boost the sale price by the cost of the renovation.

Some additions you might think would be valuable end up being a detriment and could lead to lower prices. For example, personalized design choices such as bright, not-neutral paint colours, or less-common features that can be expensive to maintain like wine cellars, saunas, hot tubs or swimming pools.

Reference: https://www.timescolonist.com/home-renovations-with-the-best-financial-emotional-return-for-owners-1.23986438

Real Estate Investment

Maclean’s published a story titled “Is real estate still a good investment for Canadians?”
Wednesday, October 23rd.

The article focuses primarily (but not exclusively) on buying a home as an income property and concludes with this,

Bottom line: Canadians can still confidently invest in real estate... real estate is still a viable way to build and grow your investment portfolio. While 2018 numbers appeared bleak, by 2019 the climb out of negative growth forecasts was already taking place. According to CREA, the national sales activity was on target to increase by five percent in 2019 and forecasted to grow by 7.5 percent in 2020. The national sales price was also on track to climb with only a slight nudge up in 2019 (of 0.5 percent).

Read the full article at https://www.macleans.ca/sponsored/investing-in-real-estate-in-canada

Greater Victoria Neighbourhoods – Metchosin

The District of Metchosin may be a tiny rural area but it is big on heart and strong on community. With a population of just under 5000 on roughly 30 square acres of farmland and second-growth forests, this is the perfect spot for anyone who loves small-town life, friendly neighbours, and communing with nature.

The farming community is Mecca for those who bask in the glory of the outdoor life. Imagine long stretches of pristine hiking trails, sublime pebble beaches, and cool marshlands for bird watching. Think of sailing on one of the many regional lakes or through the ocean’s mist, watching a fiery sunset paint orange streaks on the cool blue watery glass. Explorers and adventurers have been fascinated by Witty’s Lagoon for a long time, marvelling at its wetland area. It's unique ecosystem attracts tourists in all seasons.

The country life, amidst the wonders of nature, seems to draw out people’s artistic and creative inner child. Metchosin is a beehive of imagination and creative expression. Crystals and handmade gifts adorn the walls of Metchosin Country Crafts. Award-winning and internationally renowned ceramic artists Robin Hopper and Judy Dyelle have been turning out exquisite pottery for 75 years on their six-acre farm. Their 'Chosin pottery business includes two studios, a gallery and showroom.

Little Metchosin is an important player on the world stage. It is home to Pearson
College, ‘Canada’s School for the World’, accommodating up to 200 students from 150 countries eager to make this planet a smarter and kinder place. This rural community also encourages future artists at the Metchosin International Summer School of the Arts.

Westmont Montessori School, Metchosin Elementary School, Metchosin Co-op Pre-School, and Hans Helgesen Elementary school keep the youngest Metchosin citizens well-informed and knowledgeable. The community is a member of West Shore Parks and Recreation, which offers a wide variety of recreation facilities and activities for Metchosin residents.
Sometimes living on a smaller scale means reaping bigger rewards.

Housing Affordability Survey

Online real estate company Zoocasa conducted an online survey of over 1,300 respondents between Sept. 17 to Sept. 29 wherein 91 per cent of respondents said the cost of buying a home has risen faster than their income making it difficult for middle-class earners to buy their first home.

Despite the rising costs, respondents felt that home ownership was an important part of life in Canada: 31 per cent of respondents think, “people should own a home or property by the time they are between 31 and 35 years old,” while 29 per cent say this should happen between the ages of 26 and 30.

Homeowners felt that owning a home has helped them to build wealth. Yet, while 69 per cent of them feel that they have benefitted financially from owning a home, “54 per cent of these respondents say their housing costs have increased faster than their income since they purchased their home.”

You can read more results from the poll here: https://biv.com/article/2019/10/84-canadians-feel-housing-affordability-negatively-affects-their-lives

What Does a Liberal Minority Mean in Terms of Real Estate?

Canadians across the country went to the polls Monday, Oct. 21 and gave Justin Trudeau another opportunity to lead Canada with a minority government.

If you’re a first-time home buyer, this means you’ll be looking for the Liberals to make good on their promise to expand the First-Time Home Buyer Incentive to allow buyers in Toronto, Vancouver and Victoria to qualify for up to $769,000 instead of $505,000 like the rest of the country.

The Liberals also promised a 1% speculation tax on non-residents and non-Canadians. What that means and whether it has the intended effect of slowing down demand remains to be seen.

Immigrants Help Drive Canada’s Housing Market

A recent poll of 1,500 people who arrived in Canada in the last ten years found half chose Canada because it’s a good place to live and work. 31 per cent said they received a better reception for immigrants in Canada and 26 per cent said Canada is a safer place to live.

In addition to supporting Canada’s economic growth, newcomers to Canada are vital to the health of our national real estate market, accounting for approximately a fifth of the housing market.

Immigrants may purchase 680,000 homes during the next five years if migration levels continue.
46 per cent chose to live in Ontario, Quebec drew 19 per cent, and B.C. came third with about 13 per cent of newcomers to Canada. Approximately 89 per cent came to our province with savings to buy a house according to Statistics Canada.

Don’t Forget to Vote!

Today is our federal election. If you haven’t already hit the advanced polls, make sure you get your vote in today, because it matters. When voters don’t turn out to choose their government, they receive a government that doesn’t represent them.

Here is a useful resource from elections Canada for you to find out where you can vote. The polls will be open for 12 hours.
https://www.elections.ca/content2.aspx?section=vote&document=index&lang=e

Greater Victoria Neighbourhoods – Colwood

Colwood is an award-winning city. Just a few of the categories are Vancouver Island Green Business, Top 100 Canadian Neighbourhoods, Community Excellence Award, and Climate and Energy Action Award. Colwood is an ‘up and coming’ city, with multiple amenities and many progressive initiatives that raise the quality of life of residents. Beauteous natural panoramas and resplendent places to relax, walk and catch a sunset put the shine on one of the most desirable places to live on Vancouver Island. It even has a castle!

Getting around Colwood is a joyous and comfortable experience. Local transit is quick and efficient and the Galloping Goose Trail meanders through lush countryside, accommodating walkers and cyclists. For those who are trying to reduce their carbon footprint, there are numerous free, public electric vehicle charging stations in Colwood. Over 50 parks and trails provide plenty of opportunity to get out, feel the sun on your face and the wind on your back. Just a few teasers: Bee Creek, a small stream in Colwood flowing into Esquimalt Lagoon; Colwood waterfront and lagoon, featuring miles of breathtaking ocean beaches; and a national bird sanctuary. Avid golfers will hit their stride at the Royal Colwood Golf Course.

A rich colourful history lies behind the peaceful serenity of Colwood. Travellers from around the world come to see the many national historic, cultural and environmental landmarks that rest in some of the most spectacular scenery in BC. Hatley Park, home to Royal Roads University, is also host to one of the most ravishing series of gardens in Canada, Hatley Gardens. Within the grounds of the university stands a towering palatial relic of an elegant past, Hatley Castle.

Colwood has a thriving Arts community. Coast Collective is a new innovative art centre and an accessible showcase for Fine Art. The community’s family theatre, Four Seasons Musical Theatre, has provided joyous entertainment since 1975. Families have access to numerous schools, such as Colwood Elementary School, Dunsmuir Middle School, and Royal Bay Secondary School. The primary recreation centre serving Colwood is Juan de Fuca, with a pool, swirl pool, sauna, curling rink, and a fitness studio.

Give yourself a well-deserved award -- consider Colwood as your forever home. 

Housing Policy Focus

First-time home buyers – those who are in their 20s and 30s – are in the process of making major financial decisions and they are paying attention to candidate’s messages in the upcoming federal election.

As a consequence, a good deal of policy is focused on helping first-time buyers into the housing market.

Politicians are largely focused on ‘demand stimulus’ ideas. These are policies to help buy homes in our big cities, but where we don’t have enough homes for sale to satisfy the current demand, let alone increased demand.

Our politicians also need to address how these homes will be provided. In other words, lower barriers to building homes we need to meet the demands of a growing population.

Otherwise a surge of new buyers – increased demand with constrained supply – could cause prices to escalate and erase any benefit from stimulus packages.

Love Bird Watching?

At the peak of the migration, you might see up to 1,000 turkey vultures and other raptors kettling (a term that birders use to describe a group of birds wheeling and circling in the air). The migrating birds visit our area from mid-September to late October around East Sooke Regional Park.

The southbound birds use the park as a staging area to rest and feed before they make a 29-kilometre crossing over the Juan de Fuca Strait on their way to Olympic National Park in Washington state.

The most common raptors you can expect to see are turkey vultures, bald eagles and red-tailed hawks. Other less common raptors that may be present include Cooper’s hawk, sharp-shinned hawk, peregrine falcon, American kestrel, merlin, northern harrier and osprey.

Beechey Head is an excellent place to observe raptors during their fall migration.

Reference: https://www.timescolonist.com/entertainment/explore-birds-of-prey-flock-to-east-sooke-1.23965105

The Arts - Art Gallery of Greater Victoria: Celebrating Art by First Nations Women

The Art Gallery of Greater Victoria is celebrating Matriarchs: Two-Spirited, Coast Salish artist from Shíshálh Nation, Margaret August brings together a selection of prints in celebration of the First Nations women that inspire her and will inspire you too!

The exhibition features work by Kelly Cannell, Francis Dick, Lou-ann Neel, Sage Paul, Susan Point, Marika Echachis Swan and Carrielynn Victor, as well as Margaret August. The Matriarchs: Prints by First Nations Women exhibition runs until November 24th.

For more information, go to https://aggv.ca/events/celebration-of-matriarchs-featuring-answer-drum-group/

Greater Victoria Neighbourhoods – Sooke

Sooke embodies the quintessential West Coast spirit and lifestyle – one of freedom, a certain wildness, and a celebration of nature’s bounty. The oceanside paradise has all the elements of good living: the enjoyment of sunsets, rocky shores, and beautiful homes; wonderful activities for all ages; tantalizing food; and the pursuit of art, knowledge and wonder.

This west island community has everything to thrill the outdoor enthusiast. Fans of walking, skateboarding, horseback riding, and cycling have their own special corridor - the Galloping Goose Regional Trail. This walkway winds through the countryside for 55 kilometres. A cool swim on a hot afternoon does not get any better than a plunge into Sooke River at Sooke Potholes Provincial Park. East Sooke Park provides walking trails along the rugged rocky edges of a turbulent ocean. Enjoy a gentle stroll along Whiffen Spit, a sandy appendage into the aqua blue.

For an art and culture infusion, the Marshall-Inman Gallery showcases stunning ceramic and wooden marvels. Master Carver Brett Borrie creates magic in precious metals at B & K Jewelry and Gifts. The South Shore Gallery is a venue for local artisans to display their talents in paintings, prints, ceramics, and glass.

Trip Advisor awarded The Sooke Region Museum with a 'Certificate of Excellence' due to rave reviews from customers around the globe. At Saltwest Naturals, you can watch how they distill salt from the ocean and sample their delicious products. The first 'meadery' in Western Canada, Tugwell Creek Honey Farm and Meadery staff wave a wand over their freshly made honey and turn it into ambrosial mead wine.

The humble little town on the island's edge has internationally celebrated restaurants such as
Sooke Harbour House, 'Diner's Choice Award' winner in 2018. On a smaller scale, Mom's Cafe is a popular local favourite. SEAPARC Recreation Centre in Sooke has programs in arts, recreation, sports, fitness and health. The many exceptional schools include John Muir Elementary School, Poirier Elementary School, Saseenos Elementary School, and Sooke Elementary School.

Once you get a taste of the Sooke lifestyle, resistance is futile!

BC’s Economy Will Not Improve According to Jock Finlayson - executive vice president and chief policy officer of the Business Council of BC

Residential home sales have fallen markedly in the last year or so. Recently, however, lower interest rates and earlier price declines have improved affordability, with home sales moving higher.

Some market watchers believe the housing down-cycle is over. But the Ministry of Finance estimates that residential sales in 2019 will hover near 46,000, down from almost 74,000 two years ago.
At the same time, housing starts, which have been strong so far this year, are poised to slump, in line with reduced demand from non-resident buyers and decisions by many B.C. developers to pull back from planned projects.

The provincial government predicts that housing starts will drop by more than one-fifth in 2020.
The deteriorating global economy is another major worry. Slower growth in major external markets, including the U.S., China and Germany, is already beginning to pinch B.C.’s exports.
Through July, the value of provincial exports was down by three per cent from 2018 levels. The forest industry has suffered the biggest blow, with wood product exports sagging by around 20 per cent. There is little chance of a meaningful export recovery in 2020.

The rolling economic crisis in the forest sector is another significant negative in B.C.’s economic picture. Mills are closing and jobs are being lost across the province. Forestry provides one-third of B.C.’s merchandise exports.

Dwindling residential investment will detract from aggregate economic growth. It will also work against the policy objective of enhanced affordability, which – among other things – requires an increased supply of new housing units.

Reference: https://www.vicnews.com/opinion/column-and-now-the-bad-news-about-b-c-s-economy

New Downtown Development Up for Community to Decide

The city’s official community plan allows for 8-story buildings. However, Chard Development wants to build two new buildings — one 13 storeys and the other 6 storeys — and retain an existing five-storey medical professional building on Yates.

The project features a central courtyard, daycare spaces, hidden utility lines, pedestrian and transit improvements, and underground parking. Of the 217 residential units, 104 will be sold at below-market value.

Councillors raised concerns about the project’s height and lack of rental units, and they’ve decided to move it into a public hearing.

“Is this perfect? No. Is it really great? Yes,” Councillor Marianne Alto said. “And I certainly think it’s great enough to move on to a public hearing.”

“At that point, I would look forward to hearing what people think about applications like this.”
What do you think? Would you like to see this 13-story building become a reality on Yates?

To learn more about this, read the Times Colonist story HERE

National Housing Debate & Housing Platforms

The National Housing Debate took place in Ottawa on Sunday, and Canadians got one final chance to hear representatives from the five major political parties outline their stance on issues related to housing and home affordability before the October 21st election.

It’s no secret that the party representatives have wildly different approaches to tackling housing issues, and that was made even clearer during the debate.

Here is a succinct look at each party’s housing platforms:

Conservative Party of Canada
The Tories would loosen stress test stringency and eliminate it for renewals to prevent banks from gouging borrowers with uncompetitive rates. They would also allow first-time buyers 30-year amortizations to lower their monthly payments. Finally, they would set aside surplus federal lands for housing developments to help with supply constraints and deeply investigate money laundering.
Liberal Party of Canada

The First-Time Home Buyer Incentive was introduced and became operational early September. If re-elected, the Liberals would expand it to allow buyers in Toronto, Vancouver and Victoria to qualify for up to $769,000 instead of $505,000 like the rest of the country. The program allows the government to share in equity gains—and losses. Additionally, the Liberals have also promised a 1% speculation tax on non-residents and non-Canadians.

NDP
The NDP has a list of over 30 promises to make housing more affordable. One of them is developing 500,000 affordable units over 10 years, $5 billion of which will be spent within the first 1.5 years of the party’s rule. To build co-ops, social and non-profit housing, the NDP has promised “fast-start funds” to ensure construction commences as soon as possible rather than years down the line. The federal GST/HST will be waived on affordable housing construction to stimulate development, and it will re-introduce 30-year amortizations to lower monthly payments.

The boldest move is the 15% foreign buyer tax it would impose on non-residents and non-Canadians who own housing anywhere in the country.

The NDP has also said it will double the Home Buyers Tax Credit to $1,500, and facilitate co-housing through funding from the Canada Mortgage and Housing Corporation.

Green Party
The Greens have proposed legislating housing as a fundamental human right, and they seek to change CMHC’s mandate and have it focus on developing affordable non-market housing and co-ops.
The Green Party sees co-living as a cornerstone solution to Canada’s growing housing crisis. It will also create a Canada Co-Op Housing Strategy to encourage co-op living and eliminate grants for first-time purchasers. The Greens will fund non-profit housing organizations for seniors, low-income families and special-needs individuals. Restoring tax incentives for rental housing construction and conceiving of a new tax credit for gifted lands, the Green Party believes, will spur plentiful affordable housing.

They also proposed building 25,000 new housing units and renovating 15,000 more every year for a decade. Housing co-investment will see an increase of $750m for new builds, and the same amount of money will be added into the Canada Housing Benefit to help 125,000 households with rent.

People’s Party of Canada
Maxime Bernier’s supports the notion that lowering immigration means there will be less demand for housing, which would theoretically close the chasm between supply and demand.

Bernier intends to address housing indirectly: a 15% income tax for Canadians earning between $15,001 and $100,000, and 25% on anything larger, will free monies that could go towards housing. The PPC has also proposed abolishing the capital gains tax.

Foreign-Buyers Tax Now Mainstream in Canada

When Canadians last went to the polls in 2015 you would have had to scour the country to find someone willing to talk about a surtax on foreign nationals buying real estate.

Now, such taxes are just considered the right thing to do. And B.C. has shown the way.
Ignited by the public’s anger over the housing affordability crisis, the B.C. Liberals surprised everyone in 2016 by going against their own free-market ideology by quickly imposing a 15-per-cent tax on foreign purchasers of housing in Metro Vancouver.

Reactions were immediate. Property developers and their lobbyists, plus some activists and a handful of academics, claimed a foreign-buyers tax was xenophobic and even racist.

However, the foreign-buyers tax took some fuel out of Vancouver’s stratospheric housing prices and had some impact on housing prices in Victoria. And after the B.C. NDP narrowly won office in 2017, it hiked the surtax to 20 per cent and expanded it to Victoria and other cities.

Now there is talk of imposing taxes or even outright bans on a Federal level. What will happen next?

Greater Victoria Neighbourhoods – Esquimalt

Located on the southern tip of Vancouver Island and surrounded by a marine environment, many homes in Esquimalt boast panoramic ocean views of the Juan de Fuca and the Olympic mountains. The area is encompassed by the Strait of Juan de Fuca, Esquimalt Harbour, and the Gorge inlet.

Esquimalt is steeped in history. The native inhabitants called this “Es-whoy-malth” which means “the place of shoaling waters”. Esquimalt Harbour became the west coast base for the British Royal Navy in 1837. Today, Canada’s Pacific Naval Fleet calls CFB Esquimalt home as do over 4000 military service personnel and 2000 civilians who work onboard ships or at the base.

Over the last decade, the township of Esquimalt put a great deal of planning, money and love into developing their community. Today, families thrive here amongst over 30 parks, a sports centre, a state-of-the-art recreation center and library, and a wide variety of restaurants and shopping amenities.

I recommend exploring Saxe Point Park, MacAulay Point Park and the West Bay Marina (https://www.westbay.bc.ca/Marina.aspx). You will love walking or jogging along the shoreline walkways in Esquimalt.

Esquimalt embodies the live, work, & play lifestyle.

Should You be Worried About the “Big One”?

Victoria is in a seismically active zone, and Vancouver Island experienced two large historic earthquakes: A Magnitude 7.0 in 1918 and Magnitude 7.3 in 1946. The 1946 earthquake was the most damaging in western Canada and caused minor damage in Victoria which was 200 km from the epicentre.

Geologists have pointed out the potential for another large earthquake originating from the Cascadia subduction zone west of Vancouver Island sometime between now and 500 years; less than the blink of an eye in geological time, but lifetimes for us.

If you’re concerned about earthquakes, liquefaction, amplification hazards or slope instability, check out the area you’re interested in purchasing your home with this map produced by the Ministry of Energy and Mines in 2000.
LINK http://cmscontent.nrs.gov.bc.ca/geoscience/PublicationCatalogue/GeoscienceMap/BCGS_GM2000-01.pdf

Realize, however, that this map is for regional purposes only, such as land use and emergency response planning, and should not be used for site-specific evaluations. In Greater Victoria, developers hire site-specific geotechnical evaluations prior to new construction or for upgrading buildings and other facilities. There are also many resources for you to review to secure and earthquake-proof your new home.
LINK https://www.victoria.ca/EN/main/residents/public-safety/emergency-preparedness/earthquake-readiness.html

The Arts - Pacific Opera Victoria

It’s been nearly fifty years since all three operas of Il Trittico (The Triptych) by Puccini have been produced and performed in Canada. If you love opera, you must see this truly emotional and beautiful masterpiece!

The three operas include:

Il tabarro (The Cloak) sees infidelity and suspicion brutally end a marriage in this dark thriller.

Suor Angelica (Sister Angelica) features a nun struggling with anguish and guilt in this lyrical tragedy.

Gianni Schicchi showcases the greed and unscrupulous behaviour leads to a family’s comeuppance as they fight over an inheritance.

Read more on the Pacific Opera Victoria website: https://pacificopera.ca

Canadians Extracted Almost Half A Trillion in Home Equity

A HELOC is a line of credit secured against your home. In Canada, homeowners can access up to 65 percent of the value of their home through a HELOC. But the sum of the outstanding mortgage balance and HELOC must not exceed 80 percent of the value of the home.

Mortgage refinancing means replacing your existing mortgage with a larger one—up to 80 percent of the value of the home.

But why are Canadians extracting money from their home equity? That’s the topic of another article, but it’s worth noting that using it to maintain an inflated lifestyle is never a good idea. However, using it to purchase real estate investments may be a good way to increase your overall net collateral.

References: https://www.bankofcanada.ca/2019/09/staff-analytical-note-2019-27