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Finance 101 Series: 10 things you should know about TFSAs – Consult with Bruce Coleman, Vancouver Mortgage Broker

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While many Canadians are focused on the looming RRSP deadline and maximizing contributions, it’s important that they don’t lose sight of an important alternative investment, a tax-free savings account.

A major benefit of TFSAs is that money invested in them can grow tax free-for life, says Ahmad Dajani, vice-president of investments, guaranteed investment certificates and sales tools for Scotiabank in Toronto. “They provide great flexibility because you can pay as little as you like up to $5,500 a year and withdraw funds without penalty or tax consequences.”

TFSAs are a useful special purpose savings vehicle for anyone wanting to save for a major expense, such as a renovation, car purchase or other outlay. Alternatively, investors – including retirees — can use TFSAs to generate dividend, interest or capital gains income tax-free.

Here are some things you should know about TFSAs:

1. The starting age for contributions is 18.
2. There’s no age limit to contributing to TFSAs; you can continue to invest even after the age of 71, the limit for RRSPs.
3. Investors can contribute a maximum of $5,500 per year in 2014.
4. If you have not contributed in the past, or did not meet maximum contributions in any given year, you can catch up on unused contributions (Up to the $31,000 limit as of this calendar year).  The best way to keep track of your unused contribution room is to check out your notice of assessment from the CRA.
5. Be careful not to over-contribute or you will incur tax penalties equal to 1% of the highest excess amount in the month and for each month you are over.
6. You can withdraw money at any time without penalty or tax consequences. However, you can’t re-contribute that amount in the same calendar year. (If you only need the funds for a short time and plan to replace them quickly, the best strategy is to make the withdrawal late in the calendar year so you can re-contribute Jan. 1 of the following year.)
7. TFSA withdrawals do not impact any government benefits or assistance programs such as child tax benefits, old age security or other guaranteed income supplements. This means low-income earners can generate tax-free income without it affecting their support.
8. A TFSA is not just a cash account. It can be structured so you can invest in various vehicles, such as GICs, bonds, mutual funds, stocks and exchange-traded funds, among other options.
9. Unlike RRSPs, deductions are not tax deductible. However, you can double up on tax-free income generation by opening a second TFSA in your spouse’s name.
10. For those on a limited budget, the best way to keep up with contributions is to set up an automatic monthly withdrawal plan.

Bank of Canada chief Poloz says rates on hold until economic data improve – Consult with Bruce Coleman, Vancouver Mortage Broker

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OTTAWA • The Bank of Canada should keep its key interest rate on hold until economic data persuades it otherwise, central bank chief Stephen Poloz said on Tuesday, adding that he was not worried about calls from

“For us, minimizing the risks of making a big mistake here is what we’re trying to do, and that tells us that we should be holding rates where they are until the data flow changes our mind,” Poloz said in an interview with CBC television.

some international players to tighten policy.

His comments follow controversial remarks by Canada’s finance minister on Sunday suggesting there would be pressure to raise interest rates in 2014.

“For us, minimizing the risks of making a big mistake here is what we’re trying to do, and that tells us that we should be holding rates where they are until the data flow changes our mind,” Poloz said in an interview with CBC television.

Asked about the potential for higher rates in 2014, Finance Minister Jim Flaherty told CTV television on Sunday there would be some pressure to tighten because of the U.S. Federal Reserve scaling back its bond-purchasing program.

He also cited reports by the Organization for Economic Co-operation and Development and the International Monetary Fund recommending rate increases.

“I think the pressure will be there because the Fed in the U.S. should stop printing money, and taper off as they say … And the OECD and the IMF have both said to Canada, we ought to let our interest rates go up a bit, so there will be some pressure there for that to happen,” Flaherty said.

Flaherty’s remarks spurred some criticism that he appeared to be meddling in the day-to-day implementation of monetary policy, which is the domain of the Bank of Canada and supposed to be off limits to the government.

His comments on the outlook also appeared to contradict the central bank chief, who has been signaling rates are on hold for the foreseeable future.

Poloz, who took the helm at the central bank in June, oversaw a sharp policy shift in October when he abandoned any talk of rate hikes after 18 months of signaling that a tightening of policy was on the horizon, pointing to inflation that has been below the bank’s 2% target for a year and a half.

Analysts in a Reuters poll have forecast the Bank of Canada will begin raising its main policy rate in the second quarter of 2015.

LONG-TERM RATES UNDER PRESSURE

The CBC cited Poloz as saying he was not worried by international calls for rate hikes and that his decisions would be based on Canadian economic factors. In November, he disagreed with the OECD’s assessment that rate hikes could start in 2014.

Poloz did say on Tuesday there would be upward pressure on rates this year, but he referred specifically to long-term market rates, not the rate set by the central bank, as the U.S. and global economies strengthen and stimulus is curbed.

“So as a tapering occurs we might expect to see, as we saw in the summer, some increases in long-term rates, (although) most of it seems to be priced in,” Poloz said.

Adjusting the central bank’s target for the overnight rate, on the other hand, is a tool that is available “but we have to consider in the broader context what impact would it have,” he said.

Higher rates would have a negative impact on highly indebted Canadian consumers, he suggested.

“Would it be the same size impact we normally would expect? Probably not, given the situation,” he said, referring to the record high household debt-to-income ratio and a situation that he called “fragile from a consumer point of view.”

© Thomson Reuters 2014

3 surprising money resolutions everyone should make in 2014- Ask Bruce Coleman, Vancouver Mortgage Broker

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Yes, you should stick to your budget, save more, and fully fund your retirement account. But you already know that.

Jonathan Clements, director of financial education for Citi Personal Wealth Management, suggests moving past the obvious and committing to these three counterintuitive money resolutions in 2014. Your wallet will thank you.

Stop trying to “save money” by shopping the sale rack. It doesn’t count as saving when you buy something you don’t need at a discount. “No matter how much the price is reduced, you’re still spending money,” says Clements.

Open your eyes to how much you waste money. Be honest. You probably pay for groceries that end up going bad, infrequently watched cable channels, unused extended warranties, clothes you rarely wear, and subscriptions to publications you don’t read. Clements suggests using money management tools offered by your bank or a financial service like Mint.com to get a clearer picture of where your money goes.

Don’t look at your investment accounts so often. You probably think you’re being responsible by checking how your money’s doing. Instead, you may just stress yourself out or overact to normal market volatility. “Looking frequently probably won’t help you make smarter financial decisions, but it could prompt you to trade too much and perhaps make panicky decisions,” Clements says.

The rise of the miserable Canadian homeowner – Ask a Vancouver Mortgage Broker

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ROB CARRICK – The Globe and Mail

Consider the financial misery factor before you buy a house.

A poll to be released Tuesday by Manulife Bank indicates that almost 30 per cent of homeowners are very unhappy with how they’ve managed their debt and day-to-day finances in 2013, and only 43 per cent are very happy.
(Martti Salmela/iStockphoto)

That’s where the constraints of paying a mortgage and all the other usual costs of living leave you feeling frustrated and unhappy about your finances. Even real estate agents concede that such a phenomenon exists. “It’s been disturbing to watch runaway housing prices weigh down young families, constrain their daily lives, and make it near impossible for children to live in the same city as their parents,” a Toronto realtor said in a recent e-mail.

A poll to be released Tuesday by Manulife Bank amplifies this sense of a home handcuffing you financially. It indicates that almost 30 per cent of homeowners are very unhappy with how they’ve managed their debt and day-to-day finances in 2013, and only 43 per cent are very happy.

There are multiple explanations of why so many homeowners are unhappy with their finances. Some lack the restraint to live within their means, and then give in to inertia instead of taking action. The decline of middle class prosperity, which is being well covered in a Globe and Mail investigation called The Wealth Paradox, also plays a role. So do central bankers, who have created a new normal of irresistibly low interest rates to bridge us across the economic stagnation caused by the financial crisis five years ago.

But if homeowners are dissatisfied about how they’re managing their finances, we must also consider their single largest expense on month-by-month basis. That would be the mortgage payments they’re making on their homes.

The problem with housing is that it’s expensive compared to our incomes. I will document this further in an upcoming column, but for now let’s just say that mortgages plus other basic costs of day-to-day living, such as cars and daycare, may leave us with little money left over. And so we borrow more through credit lines and credit cards. That’s our unofficial second income.

The Manulife survey shows homeowners are not happy about how things are working out, which is noteworthy. We’ve been borrowing madly as a nation for the better part of five years now, and the story has so far been cast as one of imprudent behaviour. Here, we get a sense that there’s a cost in stress and angst.

This is particularly true for younger Canadians, according to Manulife. In the age 30 to 39 range, just when people are buying first houses, 38 per cent of homeowners are very happy with their debt management and 31 per cent are very unhappy.

Manulife believes these people can address their problems with better debt management techniques and solid advice. Maybe so. If they cut spending or use a budget, they could pay extra money down against their debt principal and get out of debt sooner. Consolidating high-cost debts in a low-rate line of credit or mortgage refinancing may also help.

But the best way of managing debt is to keep it under control from the get-go, and that brings us back to housing. The October resale housing numbers showed a modest pullback in sales nationally from the previous month, and that had some market watchers saying the market is slowing but stable because of reasonable levels of affordability.

If houses are affordable, then why are so many homeowners unhappy about their financial situation? We should talk more about this because we’re not living in a rising economy that lifts all households. Wage and salary increases aren’t raining down on us. Moreover, interest rates will at some point start to rise and make it even more difficult to manage our debts.

Will the financial burden of home ownership ease as you get older and presumably earn more? Depressingly, Manulife found that only 51 per cent of homeowners feel they will be able to retire debt-free.

Too many of us still think owning a house brings financial security and, in the past, it most certainly did. But houses have become so expensive in some cities that they now bring financial insecurity for those without well above average incomes.

Forget my lectures on this for a moment and listen to the silent voices recorded in the Manulife poll. A total of 2,132 homeowners aged 30 to 59 with household income of more than $50,000 were interviewed in September. Almost one in three of them isvery unhappy with how they’re managing their finances. Remember these voices if you’re stretching to buy a home.

Follow me on Twitter: @rcarrick

Chill out, retirement pessimists: Should we worry about seniors living in poverty?- Consult with a Vancouver Mortgage Broker

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ROB CARRICK – The Globe and Mail

The best of the web on money, markets and all things financial, as chosen daily by Globe and Mail personal finance columnist Rob Carrick.

Chill out, retirement pessimists
Some perspective can be found here on the debate about how badly prepared Canadians are for retirement. The poverty rate among seniors has fallen drastically since the late 1970s, although it has moved up a little recently.

Should we worry about seniors living in poverty?

The truth is few Canadians spend their senior years worried about basic living expenses. This has been lost in the retirement income debate.

One in five Canadians is worried about being able to cover basic living expenses in retirement. I reported this to audiences in Regina and Saskatoon last week, where I was invited to present the findings of our Sun Life Unretirement™ Index. But while it’s true that 22% told us that they are “not at all confident” about their ability to cover these expenses — and while it’s also true that another 49% said they are only “somewhat confident” — these Canadians are almost certainly more worried than they need to be. Despite the sometimes-overwrought debate about Canada’s retirement income system, we live in a country considered a world leader in the fight against senior citizen poverty. We have made tremendous progress on this front, thanks largely to the Canada Pension Plan (CPP), Quebec Pension Plan (QPP) and Old Age Security (OAS) programs.

I don’t mean to suggest that there aren’t ways to improve the retirement income system. I’m just saying we owe it to one another to be clear about the fact that few Canadian seniors live in poverty.

More on CPP and OAS in a moment.

Statistics Canada’s low-income data show that poverty rates among seniors fell off dramatically between the 1970s and 1990s. Our low-income measure (LIM) rate hit 33.1% in 1977. It fell to 3.7% in 1995, and has since climbed back up to 11.5% in 2009.

We saw these numbers begin to fall in the late 1970s, because that was when the first Canadians began receiving full CPP benefits. The rate fell further as members of workplace plans — which grew in number during the 1950s, 1960s and 1970s — began to retire.

Certainly it is worrisome that the LIM rate has risen since 1995. Still, the Organization for Economic Co-operation and Development (OECD) ranks Canada third-best among OECD countries in terms of providing seniors an adequate standard of living. In most OECD countries, the poverty rate is highest among children and seniors. Working-age citizens tend to have the lowest poverty rates, in percentage terms. It’s a different story in Canada, where the lowest percentage is among the elderly. We can thank CPP/QPP and OAS for much of this.

Working Canadians contribute to CPP and QPP with help from their employers. They pay out retirement, disability and death benefits to eligible recipients. A couple of specifics:

• You can collect CPP/QPP as early as age 60, although doing so will permanently reduce the monthly income you receive. The standard age to begin collecting CPP is 65. If you hold off, you’re paid more each month. You can delay receiving CPP payments until you’re 70.
• Your monthly cheque is based on how much you contributed and for how long. According to the Government of Canada website, the average monthly payout in March 2013 for a new pension taken at 65 was $596.66. The maximum monthly amount this year is $1,012,50. The same maximum applies to QPP.

OAS and the Guaranteed Income Supplement (GIS) are available to eligible Canadians regardless of their past or present employment status. Canadian residents quality if they’re 65 or older, a Canadian citizen or legal resident and they’ve lived in Canada for a minimum 10 years since turning 18. Non-residents qualify if they’re 65 or older, they were a Canadian citizen or legal resident before leaving the country and they’ve lived here at least 20 years since turning 18.

OAS benefits change each quarter. The maximum monthly OAS pension amount in Q2 2013 was $546.07. Depending on your income, an amount (up to 100%) of your OAS pension may be clawed back. Low-income Canadian residents are also eligible for the GIS. In Q2 2013, the top monthly GIS payout was $740.44. Visit this Government of Canada web page for details on OAS and GIS payments.

These are only high-level details, of course. For more information, visit these government web pages on CPP,QPP and OAS and consult a financial advisor.

Home Series: Some Vancouver Decorating Trends for 2014 – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Some Vancouver Decorating Trends for 2014

With so many ideas floating around about what decorating styles to use in creating your ideal living space, it’s hard to know which way to go. Everyone’s sense of style and taste versus what they can afford to spend on decorating varies.

Every year, the decorating industry experts and style gurus come up with a whole new approach in terms of setting the new trends for themes and colours. As this year closes and 2014 approaches the old trends are put out on the back burner.

But, each New Year provides new ideas to incorporate into decorating your home to achieve a whole new look and maybe even a much fresher approach.

Here are what some of the decorating gurus are saying will be the in-thing for the coming year.

Colours

Here are some the hottest colours that are going to dominate in 2014.

Light Greens and Blues

Both are excellent color choices especially if you chose to go with a monochromatic style. Both colours tend to be very soothing. Blue is especially calming and you can go with something lighter like a teal blue, a light blue or even a turquoise. Blue seems to the in thing especially for living rooms and bedrooms.

Yellow and Orange

Yellow is a bold and sunny colour which is great for opening up smaller rooms or brightening up rooms which have exposure to the sun. Orange is also expected to be quite popular in 2014 and can add some fire and vigour to any room. Don’t go too bright though as that might too overwhelming. The gurus suggest a more subdued hue of yellow or orange might be more appealing.

White

White never really goes out of style especially again if you’re going with a monochromatic motif. White doesn’t have to too boring or sterile though because you can temper it and add some contrast such as creams or nude colours.

Pink

We’re not talking “shocking pink” here so don’t that your guy is going think it’s going to be too frilly. Some of these muted pink colour versions are incredibly appealing to the eye and blend in nicely in any living space.

What Else is In for Decorating in 2014?

Some of the other ideas put forth by the experts include the following:

Using More Metals

Metals have been relatively popular for several seasons, but for 2014, it’s not just going to the standard ones used in the past because the new focus is expected to be on brass in the coming year. This is considered a metal which has a warm appeal and can be incorporated into your home in a variety of different ways.

Art

Art is really going to huge this year. Not only can it be a great investment, art can really accent a room and the nice thing about it is that you can incorporate the art to reflect your own tastes. Traditional paintings always work but if you consider abstract pieces such as sculptures or abstract paintings you can also blend these either nicely into the overall colour scheme or use them as focal pieces. And, don’t forget that “bold” can also fit in if you do it right…

Fabrics

Cotton, wool and polyesters aren’t going to do it this year. The decorating seers are suggesting you be a bit more dynamic and go with either silk or even velvet to add a touch of elegance to your space.

Period Pieces

To add some contrast to newer furniture and even to give your room an extra bit of charm or use as contrast, an antique piece may give your room that extra bit of flair. Antiques can be anything from silver knick knacks to an eclectic armoire, or anything in between.

Home Series: Some Cool Ideas for Your Vancouver Basement Renovations – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Some Cool Ideas for Your Vancouver Basement Renovations

Basements have a bit of a bad reputation and many people who have one tend to not fully develop and use them to their best advantage.

After all, the basement is “downstairs” so many folks out there don’t really do a lot with them. You prefer to focus on your living space upstairs on the ground and upper floors or even to the exterior such as landscaping or adding a deck.

However, even though the basement contains the core functions of our home such as the furnace, water heater and laundry facilities, there is still usually plenty of room to be creative and innovative to add some high value extra living space that can be very attractive to buyers.

With a little imagination and some careful thought to the materials, and of course, depending on your budget, why not transform your basement into something spectacular.

You can easily create a separate room that is functional and suitable to use as your utility and furnace room. Adding some shelving can help you neatly store away a lot of your seasonal toys or other memorabilia. The rest of the available space is all yours to play with and turn into something special.

The materials you use can vary ranging from simple sheet rock to something more elaborate such as using brick, stone, wood or even marble. How you use lighting and colour can also greatly enhance the appearance of the room depending on the motif and style that you want to adopt for your new living space. You can change the stairs and make them more suitable and eye appealing.

You are only limited by you imagination, the space you have to work with, and the amount you can afford to spend. Don’t forget that you can always use the equity you have built up in the house and obtain a HELOC or Home Equity Line of Credit to complete your dream project in style.

To ensure that everything is done to comply with the local building code, you will need to get applicable permits to perform the work. Unless, you’re especially handy, you would best be advised to contract the work to an experienced contractor.

Ideas for Your Basement Renovation

Here are some things to consider for your living space downstairs.

Living Room – Yes, you can actually have 2 living rooms instead of just the one upstairs. This would be an ideal situation especially if have younger children or teenagers. Everybody gets their own space to hang out and can be use for entertaining friends.

Media or Gaming Room – You can set up whatever electronic gadgets that you and your family are into, ranging from projectors and large screen televisions or game consoles or anything else. Of course, you could be more traditional and opt for a pool table, dart board and shuffle board motif.

Wet Bar – You could go all the way with this and make a really snazzy area to entertain your adult friends. A wet bar can be designed in a variety of ways ranging from a traditional wood bar to something more modern such as marble or other more expensive materials.

Wine Cellar – If you’re a wine connoisseur, then set create you very own wine cellar because it can perfectly suitable for a lower temperature.

Hoe Gym – Why spend a lot of money and time at a gym when you can do it all downstairs? You could even toss in a nice soothing sauna to ease away all those aches and pains from your strenuous work out.

Home Office – With all the hustle and bustle upstairs, it’s probably hard to finish a day’s work when things got to get done. With your home office downstairs you can work in peace and quiet, or have a separate office to manage you business if you’re self employed.

A Man Cave – Well, this can be anything you want it to be such as work or hobby area or just about anything that suits your particular “guy thing.”

Kid’s Playroom – It’s a good place to keep the kids localized and occupied. You could even install a camera so you can do what you’re doing upstairs and check out the kids at the same time.

Guest Room – If you get a lot of visits from family then rather giving up your rooms or bunching people all together, you can build a comfortable space for your guests downstairs, replete with bathroom facilities if you so choose.

The other cool thing about basements is that they can evolve over time and be changed according to your changing needs and desires. And, finally, the other neat thing about basements is that they be used in combination with all the potential ideas listed above.

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Antique pieces are a great addition for any home. They can be used as a valuable hobby or can as a special focal point to accent a room.

10 Best-Kept Secrets for Buying a Home – Ask Bruce Coleman, Vancouver Mortgage Broker

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Get the most out of your money with these handy home-buying tips.

• More from Buying & Selling: 20 Best-Kept Secrets
• Filed under: Home Buying, Home Staging, Remodeling

Buying Secret #10: Keep Your Money Where It Is
It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile. Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.

Buying Secret #9: Get Pre-Approved for Your Home Loan
There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.

Buying Secret #8: Avoid a Border Dispute
It’s absolutely essential to get a survey done on your property so you know exactly what you’re buying. Knowing precisely where your property lines are may save you from a potential dispute with your neighbors. Also, your property tax is likely based on how much property you have, so it is best to have an accurate map drawn up.

Buying Secret # 7: Don’t Try to Time the Market
Don’t obsess with trying to time the market and figure out when is the best time to buy. Trying to anticipate the housing market is impossible. The best time to buy is when you find your perfect house and you can afford it. Real estate is cyclical, it goes up and it goes down and it goes back up again. So, if you try to wait for the perfect time, you’re probably going to miss out.

Buying Secret # 6: Bigger Isn’t Always Better 
Everyone’s drawn to the biggest, most beautiful house on the block. But bigger is usually not better when it comes to houses. There’s an old adage in real estate that says don’t buy the biggest, best house on the block. The largest house only appeals to a very small audience and you never want to limit potential buyers when you go to re-sell. Your home is only going to go up in value as much as the other houses around you. If you pay $500,000 for a home and your neighbors pay $250,000 to $300,000, your appreciation is going to be limited. Sometimes it is best to is buy the worst house on the block, because the worst house per square foot always trades for more than the biggest house.

Buying Secret #5: Avoid Sleeper Costs
The difference between renting and home ownership is the sleeper costs. Most people just focus on their mortgage payment, but they also need to be aware of the other expenses such as property taxes, utilities and homeowner-association dues. New homeowners also need to be prepared to pay for repairs, maintenance and potential property-tax increases. Make sure you budget for sleeper costs so you’ll be covered and won’t risk losing your house.

Buying Secret #4: You’re Buying a House – Not Dating It
Buying a house based on emotions is just going to break your heart. If you fall in love with something, you might end up making some pretty bad financial decisions. There’s a big difference between your emotions and your instincts. Going with your instincts means that you recognize that you’re getting a great house for a good value. Going with your emotions is being obsessed with the paint color or the backyard. It’s an investment, so stay calm and be wise.

Buying Secret #3: Give Your House a Physical
Would you buy a car without checking under the hood? Of course you wouldn’t. Hire a home inspector. It’ll cost about $200 but could end up saving you thousands. A home inspector’s sole responsibility is to provide you with information so that you can make a decision as to whether or not to buy. It’s really the only way to get an unbiased third-party opinion. If the inspector does find any issues with the home, you can use it as a bargaining tool for lowering the price of the home. It’s better to spend the money up front on an inspector than to find out later you have to spend a fortune.

Buying Secret #2: The Secret Science of Bidding
Your opening bid should be based on two things: what you can afford (because you don’t want to outbid yourself), and what you really believe the property is worth. Make your opening bid something that’s fair and reasonable and isn’t going to totally offend the seller. A lot of people think they should go lower the first time they make a bid. It all depends on what the market is doing at the time. You need to look at what other homes have gone for in that neighborhood and you want to get an average price per square foot. Sizing up a house on a price-per-square-foot basis is a great equalizer. Also, see if the neighbors have plans to put up a new addition or a basketball court or tennis court, something that might detract from the property’s value down the road.

Today, so many sellers are behind in their property taxes and if you have that valuable information it gives you a great card to negotiate a good deal. To find out, go to the county clerk’s office. 
Sellers respect a bid that is an oddball number and are more likely to take it more seriously. A nice round number sounds like every other bid out there. When you get more specific the sellers will think you’ve given the offer careful thought.

Buying Secret #1: Stalk the Neighborhood
Before you buy, get the lay of the land – drop by morning noon and night. Many homebuyers have become completely distraught because they thought they found the perfect home, only to find out the neighborhood wasn’t for them. Drive by the house at all hours of the day to see what’s happening in the neighborhood. Do your regular commute from the house to make sure it is something you can deal with on a daily basis. Find out how far it is to the nearest grocery store and other services. Even if you don’t have kids, research the schools because it affects the value of your home in a very big way. If you buy a house in a good school district versus bad school district even in the same town, the value can be affected as much as 20 percent.

Survey focuses on two generations of buyers – Ask Bruce Coleman, Vancouver Mortgage Broker

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By Jean Sorensen

The millennials (known also as the children of baby boomers born between 1972-1992) and the post Second World War baby boomers (born 1946-1965) are making the greatest impact on the real estate industry today.

“Both the boomers and the millennials want move-in ready homes,” says Century 21 Real Estate Canada president Don Lawby. His company, in conjunction with Rona, recently conducted a national home buyers preference survey that looked at the generations’ purchasing preferences and regional differences.

“Time is very important to people…they want to spend time doing what they want to do and not the things have to do,” says Lawby. The survey also showed that 37 per cent of millennials planned to move within two years.

“The message that it sends sellers is that if you are thinking of selling or putting your home on the market and something needs to be done, do it before you put it on the market,” Lawby says, adding it may be something as basic as painting a room. Digital images of the home showing its curb appeal are becoming more important, says Lawby.  Sellers should be aware of how the home looks when presented digitally.

Lawby says the company made the decision to conduct the survey to see “if it really was about location, location, location.”  While the old maxim still applies, it is impacted by lifestyle choices to a greater degree than in the past, he says.

There is a general shift away from long commutes and greater focus on family time and career choices by the millennials. The survey showed a short commute was important to 46 per cent of millennials and only 25 per cent of baby boomers, the demographic group that caused bedroom communities to expand around larger cities a generation ago.

Baby boomers are looking to enjoy leisure time such as pursuing travel or hobbies in their move-in ready homes as they downsize. The survey found that 28 per cent of boomers wanted funds left over when buying a house, compared to 18 per cent of millennials.

Many greying boomers (8.2 million according to Statistics Canada) no longer want to maintain a single-family house or empty nest.

“Baby-boomers don’t need to work,” says Lawby. “They are going into condos because they have the ability to close the door and walk away. They are cashing out to some degree in big cities and moving to the smaller communities.”

That cash-out of traditional single-family homes is needed in cities to supply the base for entry-level condominium homes. “If you don’t have an entry point in the market, there is no first-time buyer. You are seeing in cities that they are wiping out whole blocks of single-family detached housing to build townhouses or row-houses as developers are optimizing the value of the land,” says Lawby.

The millennial generation has a realm of other concerns. Many of the children of boomers (StatsCan figures estimate 9.1 million of them) either can’t afford single-family housing or don’t want to spend time cutting the lawn and renovating as their parents did.

They are looking for ways to maximize personal time and limit time spent on traveling to work, services or recreational facilities, Lawby says. There’s also a concern that interest rates, which have remained low for a prolonged period, will rise, infringing upon their ability to renovate a home.

The millennial generation is becoming clustered around work, often in cities, and fuelling the high-rise trend experienced as densification occurs.

The big drivers in how individuals in more rural or remote areas are situating themselves are driven by climate change and geography, says Lawby. Individuals in these communities also want to be near social activities or centres. “They want access to curling or skating indoors (in areas where winters are longer).”

The survey highlighted some regional differences in buyer preferences. In Atlantic Canada “they are looking for a good home in a good area many of the communities are smaller, so they are looking for good access to services and amenities,” Lawby says.

In Ontario, homes with character features are the hot ticket. “There is some prestige in finding a character home in a nice area with trees and it feels like the kind of place that you would like to raise a family,” says Lawby.

Quebec buyers place a high value on their social life and want to be involved in activities. “They want money left over after buying a home…and they want to be close to where they are working. They like the city, but don’t live in high-rises but in older properties.”

n the Prairies, says Lawby, there is a focus on wanting to be close to centres that can provide social or recreational activities. That is indicative of the harsh and long winters and home buyers want to be able to escape into a social atmosphere, rather than be isolated.

Alberta buyers, though, want to be situated in an area that generates a sense of community and that is family oriented. They are more interested in single-family homes than condos. They are entertainers and want a property that allows them to entertain inside and outside.

In B.C., Lawby says it’s about lifestyle. Buyers want to be close to recreational facilities, services and entertainment.