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 Swapping kitchen hardware, installing new light fixtures or removing outdated decor, such as wallpaper, can help.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.