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Demand for luxury homes still strong in Canada, real estate company says – Ask Bruce Coleman, Vancouver Mortgage Broker

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The luxury end of the Canadian housing market shows no signs of slowing down, at least according to one real estate company.

Re/Max surveyed 16 Canadian markets and found sales of what it calls “upper end homes” higher in 75% of those markets.

Vancouver, the priciest market in the country, saw an increase of 36% in sales in 2013 from 2012 in homes selling for $2-million and up.

“Canada’s luxury housing market has undergone serious transformation in recent years, setting a new standard for the lifestyles of the rich and famous,” Gurinder Sandhu, executive vice-president and regional director of Re/Max Ontario-Atlantic Canada, said in a statement.

Re/Max says there is “upward trajectory” for home values in Vancouver but expects modest growth this year for prices.

In Toronto, where a luxury home is said to start at $1.5-million, sales were up 18% in 2013 over 2012. The most expensive home sold in the city last year went for $13.4-million for 21,000 square feet in the city’s prestigious Bridle Path area.

In the oilpatch, a luxury home starts at $1-million. Sales of upper end homes in Calgary climbed 34% in 2013 from 2012. Edmonton is a little less pricey for a luxury home with the starting price $750,000 but sales jumped 32% over the same period.

Two cities that reported declines were Montreal and Ottawa. Quebec’s largest city saw a 7% drop in the sale of homes for $1-million or more from 2013 to 2012.

In the nation’s capital, where luxury starts at $750,000 sales were off 1% year over year.

“High-end homes are commanding top dollar in blue chip neighborhoods from coast to coast,” said Mr. Sandhu.

Home Series: Popular remodeling trends for spring home improvement – Consult with Bruce Coleman, Vancouver Mortgage Broker

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It’s time to think spring which means fresh home updates. Spring home improvement projects will help you update your home, add comfort and save more of your hard-earned paycheck.

‘You can save time, money and stress by planning ahead,’ says Kathy Krafka Harkema, Pella Windows and Doors expert. ‘Seek out expert advice, research product options and schedule home remodeling projects now, while you have the time to plan it and get on the schedule of contractors.’

A well-planned remodeling project can:

1. Add curb appeal to your home

2. Increase your home’s energy efficiency and help reduce energy costs

3. Improve your home’s comfort and style

4. Reduce annual maintenance time and expenses

Jumpstart your spring projects with inspiration from these 2013 remodeling trends:

Energy-saving updates

From low-volatile organic compound (VOC) paints and adhesives to more energy-efficient windows and furnaces, spring projects can help improve air quality and increase your comfort. Look for ENERGY STAR-qualified products that help lower your home’s energy consumption, and in turn, your utility bills.

Better bathrooms

For many homeowners, sought-after remodeling projects for 2013 will include kitchen upgrades, bathroom remodels and master bedroom suite renovations.

Bathroom remodeling options can include heated bathroom flooring, custom tile and stonework, custom vanity and cabinetry, beautiful bathtubs, showers and fixtures, low-profile linear shower drains and big windows to let in more natural sunlight.

‘Today’s bathroom and bedroom remodeling projects often incorporate relaxing technology and products,’ Krafka Harkema says. ‘With energy-efficient replacement windows from Pella, you can create warm natural light-filled spaces while also maintaining your privacy and comfort.’

Energy-efficient Pella Designer Series wood windows and patio doors bring in the sunshine, and provide privacy with optional between-the-glass window fashions. Between-the-glass blinds and shades also help reduce certain indoor airborne allergens from accumulating, improving indoor air quality. Cordless window fashions also are safer for homes with children and pets.

Hot kitchens

Yahoo! Homes says 2013 kitchen remodeling trends focus on practical, durable and do-it-yourself (DIY) projects like refacing kitchen cabinets, adding quartz composite countertops, hardwood-looking engineered floors, deep bowl kitchen sinks, commercial-style or built-in appliances and mixing colors and tones on cabinets.

Whether you do the work yourself or hire someone to get it done, Pella can help you complete your spring home improvement projects. Schedule a free, in-home consultation to choose the right product to fit your home’s design, your climate and your budget.

Is using your RRSP to buy a house passé? – Ask Bruce Coleman, Vancouver Mortgage Broker

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The $25,000 Ottawa allows you take out of your retirement fund to buy your first home sure doesn’t go as far as it used to.

Under the home buyers’ plan, Canadians can take $25,000 out of their registered retirement savings plan and pay it back over the next 15 years without incurring any penalty. For a couple that means $50,000.

But the dollar amount has been stuck at $25,000 since 1999 while house prices have continued to escalate. At $50,000, you’re barely making the  minimum downpayment if you are buying a home in Vancouver with a mortgage backed by the government.

The Canadian Real Estate Association says the average price of a home will climb to $391,000 next year, meaning that $50,000 is less than 13% and not enough to avoid costly mortgage default insurance.

“I don’t know how effective the plan is now, so I’m not sure what would happen, if you increase the amount,” says Don Lawby, chief executive of Century 21 Canada.

It’s not just the amount. The tax-free savings account is now just as an effective savings vehicle. As of 2014, Canadians were allowed to contribute $31,000 and the amount increases every year. You can also withdraw money from a TFSA and put it an equal amount back later.

“I think you almost need a combination of the two plans together to fund that kind of investment,” said Mr. Lawby, about buying a house. “It depends on where you live in Canada.”

The home buyers’ plan was launched with a $20,000 withdrawal limit and it jumped to $25,000 in 2009.

One of the arguments against increasing the limit is it will encourage young Canadians to rob their retirement savings to buy a first home. Paying the money back over 15 years — there are significant penalties if you don’t — means you might not have the money to make current contributions.

“Some people say the RRSP is not the most efficient way of saving for a house,” says Benjamin Tal, deputy chief economist with CIBC World Markets.

He says there hasn’t been an acceleration in the use of the home buyers’ plan because first-time buyers are being squeezed out of the market.

“Older people and people buying second properties don’t use their RRSPs to buy homes,” says Mr. Tal. “You would expect given rising prices there would be more use [of the plan.].”

Vince Gaetano, a principal of monstermortgage.ca, says the home buyers’ program is mostly being used by people as a tax loophole.

“This is the most popular time of the year to do it. They manipulate the system to deliver a tax return on the downpayment they will [already be] making on their purchase,” he says.

If you know you are buying your first home in the next 90 days, you make a $25,000 contribution or $50,000 for two people. That means a big refund in April. You then withdraw the $25,000 or $50,000 to pay for that initial home.

“Most people have the RRSP room. If you are buying a house by June and you have the downpayment in cash, you make the contribution to trigger the the refund,” said Mr. Gaetano, noting the $25,000 has to be in the plan for 90 days before you can take it out.

“You can garner $20,000 in refunds,” said Mr. Gaetano, pointing out it will depend on what your marginal tax rate is.

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