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With Vancouver prices up, a call for curbs – Ask Bruce Coleman, Vancouver Mortgage Broker

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Along with a jump in house sales, house prices in Vancouver have risen sharply and will likely continue to climb in the new year, pushing some frustrated house hunters to call for curbs on the foreign buyers they blame

This brand new house on 6768 Arbutus St., in Kerrisdale, was designed specifically for the Asian market, according to the developer of this house. List price is $6.88-million, lot size is 12,800 sq. ft., house (not including garage) is 6,800 sq. ft. It also has a gold toilet.
(John Lehmann/The Globe and Mail)

for stoking the rapid ramping up of housing values.

B.C.’s real estate market powered through third-quarter 2013 as the number of sales rose 18.91 per cent this year over last, according to the most recent report by Landcor Data Corp., which bases its findings on provincial assessment numbers. The total value of those sales rose 25.62 per cent to $14.72-billion for July through September.

The outlook for 2014 is just as robust, says Helmut Pastrick, chief economist for Central 1 Credit Union. Mr. Pastrick forecasts prices to go up less than 5 per cent in 2014, with the greatest increase for single-family detached homes rather than apartments and townhouses. The Teranet National Bank Home Price Index, out earlier this week, showed prices up in Vancouver 3.9 per cent on an annual basis.

As usual, the market with the highest growth in sales volume was Greater Vancouver, with a 26.46-per-cent increase over 2012.

“Single-family detached [homes] are up a solid 6.39 per cent, propelling the average price of a Metro Vancouver detached manse to $869,772,” the Landcor report said.

Vancouver routinely shows up in surveys as one of the most expensive real estate markets in the world, requiring its residents to devote at least 84 per cent of their monthly incomes to housing costs.

But even areas outside the city are becoming unaffordable to residents such as Joy Mo, who came to Canada from China in 2001. Ms. Mo got shut out of the market when she and her husband sold their Coquitlam house and decided to rent for a year before purchasing a bigger house for their growing family. Ms. Mo has been renting a townhouse in Port Moody for the past four years, unable to find a house in the Tri-Cities area that falls within their $650,000 price range. They’ve put two offers on houses in the past three months and were out-bid on both of them, one by a foreign buyer.

Ms. Mo works as a court translator and she and her husband make a decent living.

Although some real estate analysts argue the lack of government data on foreign buyers is too anecdotal to confirm their impact, Ms. Mo disagrees. She was recently the subject of a South China Morning Post blog by Ian Young, in which she squarely blamed foreign buyers from around the world for driving the market.

She says you only have to look around to see that developers and marketers are catering to those buyers, particularly on the west side, in West Vancouver, Richmond, White Rock and the Tri-Cities area.

Because she’s from China, people often tell her she’s to blame for rising prices, but she’s not any different than the average middle-class resident. The government here, she says, should apply an extra tax to foreign owners.

Mayor Gregor Robertson recently said if warranted, he might consider a special property tax for foreign investors to try to control the high cost of real estate. But at this point, it’s less a plan than conjecture.

“Whenever we talk about building infrastructure, like bridges, tunnels, and that type of thing, we always cry about the lack of money,” Ms. Mo says. “Well, to me at least, [extra taxes for foreign buyers] is a way to generate some revenue.

“I am a Canadian citizen. If I go back to China, I am not allowed to purchase any property there. The government only allows it if you are a permanent resident there, and you have to purchase that house for your main residence. You can’t flip it or rent it out, that kind of thing.

“I’m not saying that’s wrong or right, but they know how to protect their market. I know Hong Kong has similar laws or regulations,” she says.

It’s true that China doesn’t allow foreign ownership. And the government in Hong Kong charges foreign buyers an additional 15 per cent Buyer’s Stamp Duty.

“I ask friends, ‘How do you find the housing market here?’ And they say it’s really cheap. They are surprised we don’t charge extra fees for foreign owners,” Ms. Mo says.

“On the one hand, we have immigrants like myself here, and we try to settle, and work very hard, trying to afford our homes. But on the other hand, there are really wealthy people from [China] coming here, and it’s not fair. They are our competitors. So why aren’t we doing anything?”

Automating Your Vancouver Home – Ask Bruce Coleman, Vancouver Mortgage Broker

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Automating Your Vancouver Home

Technology has provided you with a number of vital and convenient ways which allows you to make your home environment safer and to perform more economically. If you are away on business frequently or have young children, a disability or getting on in age then automation can help you in a number of ways.

The other neat thing about being able to program various aspects of your home is that you can do so to reflect not only your lifestyle but also the circumstances as they change. From programmable thermostats and light timers, you can now apply total or just partial home systems which can be programmable from your laptop or iPhone no matter where you are and at anytime of day.

Today’s automated systems are also designed to alert you of any problems immediately such as a break in or excessive heat so you can contact a neighbour or the authorities right away. Some systems can be programmed to automatically contact either you or someone you designate, or police, fire department or ambulance service. The point is that you can automate your home in a variety of basic or very complex ways.

Home Automation Basics

Home automation is also sometimes called “smart home technology.” They are systems and/ or devices that use computer chips or electrical components that may be automatically programmed and generally use sensors which monitor such things like heat, time of day and sound for example. This would be called the operating system. They are hooked up with the device which you wish to program or operate. The devices being operated use a link or an interface such as sensor or your keypad between the aspect of the home being programmed and yourself.

What can you Automate?

You can just about automate your entire home if you are prepared for the additional expense. If you can attach a computerized device to something then you can likely include that in your automation system. You can program the following on automated systems such as;

• Lighting – both indoor and outdoor
• Motion detection sensor apparatus such as vehicle detection
• Heating and ventilation systems
• Home security systems
• Outdoor irrigation or water systems
• Fire and carbon monoxide detectors
• Internet and telephone
• A variety of fixtures or fittings such as door, windows and blinds for example

The Benefits of Home Automation

Some of the benefits which you can derive from a home automation system include the following:

• Saves you money such as on your heating, cooling and lighting costs
• Increases the overall efficiency of your home
• Provides better protection from threats such as fire, carbon monoxide and break ins
• Allows you to personally monitor potentially damaging situations and gives you better control even when you are not present.
• Allows you greater safety features
• Provides you with a variety of alerts

How to Automate your Vancouver Home

There are actually companies which specialize in this and offer packages so you can customize your home automation to suit and reflect your own particular individual needs. There are a number of DIY kits which allow you to set some limited home automation systems on your own but you are best advised to be computer savvy.

The most important thing to do is to perform some in depth research before you decide so you better understand the pros and cons of these systems before you expend a bundle of cash, but these systems can be well worth the investment.

The rising tide of home ownership may have finally met its match – Ask Bruce Coleman, Vancouver Mortgage Broker

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Maybe there is one temptation out there to get Canadians to stop buying homes. Cheaper rent.

Anyone sitting on the sidelines considering whether to buy a home in Canada might want to take a look at a recent report from the International Monetary Fund.

The group says that among countries in the Organization for Economic Cooperation and Development, Canada is now the most expensive place in the world to own relative to the cost of renting.

“In many OECD countries, the ratio of house prices to rents — a typical measure of price valuation — remains above historical averages, leaving room for price corrections down the road,” said the IMF, basing its comments on second quarter statistics for 2013.

The Canada Mortgage and Housing Corp. said this week rental rates across the country continue to rise but mostly at around the rate of inflation. The Crown corporation said the rents for an average two-bedroom apartment had risen to $901 a month by October, 2012, a 2% increase from the year before.

The IMF says Canada is the most expensive place to buy in the world using its housing to rent comparison, 85% above the average.

Could the tide finally be turning on Canada’s high rate of home ownership which reached 69% of households in 2011. Only 60.3% of households owned their residences in 1971.

Benjamin Tal, deputy chief economist of CIBC World Markets Inc., said he’s not surprised to see the numbers produced by the IMF and said the shift could be towards renting now.

“This is not a market for first-time buyers,” said Mr. Tal, noting rental rates increases have simply not kept pace with prices increases in the housing market.

Royal Bank of Canada says affordability further weakened in the third quarter, as prices began to rise along with mortgage rates. The bank said a typical Canadian bungalow requires 43.3% of household monthly pre-tax income based on mortgage payments, utilities and property taxes.

The Canadian Real Estate Association said the average existing home sold for $391,085 in October, a 9.8% increase from a year ago.

Sam Kolias, chief executive of the Boardwalk Real Estate Investment Trust, one of the largest apartment owners in the country, says there remains a cultural bias that continues to favour owning versus renting in Canada.

“Whether you are in rent controlled or not, our experience is rents over time track the consumer price index,” said Mr. Kolias, adding rising interest rates could go a long way to determining whether consumers still lean towards owning.

“Historically the gap between home ownership and renting is lower when interest rates are higher.”

Rock bottom interest rates have actually boosted home prices because they have allowed consumers to take on more debt by lowering monthly carrying costs of a mortgage.

Mr Kolias says high-ratio mortgages backed by the government, which allows consumers to buy into the market with as little as 5% down, have allowed young consumers to skip renting.

“A consumer will buy a home, even if it costs him more because they believe in the long run ownership is good because it’s a forced savings program,” he said.

But even the chief executive of Century 21 Canada, Don Lawby, said there’s no question housing prices in Canada have made renting attractive.

But, in defence of housing, he wonders whether people renting will just spend all the savings. “Rent for 20 years and what will do you with that money?” said Mr. Lawby, adding home ownership results in forced savings.

Still, he says the idea that home prices are high is really only relevant in three major markets, Toronto, Vancouver and Calgary.

But, even Mr. Lawby doesn’t think we can go much higher in home ownership penetration. “Are we going to end up at 75% to 80%? No, there is always going to be a segment of population that wants to rent.”

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More Canadians have TFSAs, but many hazy on details: study – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Most Canadians believe they are knowledgeable about tax-free savings accounts, but 89 per cent don’t know what can go in the accounts and 81 per cent are unaware of the annual contribution limit, according to a Bank of Montreal study.

In fact, cash is the most commonly held asset in TFSAs, followed by mutual funds and guaranteed investment certificates, the bank said in a statement.

The study found that 48 per cent of Canadians now say they have a TFSA, more than double the 23 per cent reported in 2012. On average, they plan to contribute $3,625 to the accounts this year.

About 55 per cent of those polled in Alberta have a TFSA, with the Prairies and British Columbia at 53 per cent each. The number is smallest in Atlantic Canada, at 34 per cent.

The accounts are most often used as a way to save for retirement and as an emergency source of funds. One in ten TFSA holders have over-contributed since opening an account, the report showed. Only 11 per cent correctly identified all six types of investments that are eligible to be held within a TFSA.

Sandi Martin, a fee-only financial planner with Spring Personal Finance based in Gravenhurst, Ontario, said the nature of TFSAs as a tax designation instead of an investment type is confusing to clients. “It’s even more difficult for the average person to hear ‘Tax Free Savings Account’ and not assume that the only thing you can hold in it is cash.”

In her opinion, fixed income investments that pay interest are the best thing to hold in a TFSA because “that kind of investment income doesn’t get the same kind of tax breaks that capital gains or Canadian dividends do.”

TFSAs let Canadians earn tax-free investment income. There is no minimum contribution required to open an account and no tax on funds that are withdrawn, the bank pointed out. The federal government recently raised the 2013 annual contribution limit for a TFSA from $5,000 to $5,500.

The survey polled 1,023 adults between November 29th and December 5th with a margin of error of about 3 per cent.

Tips On Buying Vancouver Homeowner’s Insurance – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Tips On Buying Vancouver Homeowner’s Insurance

When you’re buying a new home or condo in Vancouver you’re going to need to also buy homeowner’s insurance. Many people simply contact their auto insurance agent and buy a policy without really giving it the attention it deserves.

And, unfortunately many people also don’t take the time to read through the policy to really appreciate what the policy covers, but more importantly what it doesn’t cover.

Not all insurance companies are the same and a discounted homeowner’s policy which you might find browsing the internet doesn’t mean you are necessarily going to be getting the best deal particularly if the company doesn’t have a good record for servicing claims.

Also, there are aspects of insurance coverage that some people neglect because they believe if they have a policy all their possessions will be fully covered in the event of a catastrophic loss.

There are likely plenty of folks in Calgary who were wishing they had included a “Flood Insurance Rider” after their own recent horrific experience. That nice little creek running alongside your property can take on monstrous proportions during a deluge and flash flood.

It is also important to remember that Vancouver is a not only a coastal city and could face the prospect of a tsunami, but is also situated on an earthquake fault line.

Type of Policy

Also, if you bought the wrong policy such as one which only provides ACV (Actual Cash Value) versus Replacement Cost then you could end up losing a whole of money and find yourself very underinsured in the event of a major loss.

This is a very important question to ask when buying a homeowner’s insurance policy especially as it pertains to your personal possessions.

An ACV policy means that depreciation will be applied to each and every possession so you will not receive full value unless it was something you just purchased. A flat screen T.V. which you bought 5 years ago may have as much as a 50% depreciated mark down on the amount which could be reimbursed.

Replacement Cost on the other hand is a more expensive policy but when it comes to replacing everything you own is the smarter buy because you even though that same T.V. described above is 5 years old, you would get the equivalent cash value of what it would cost to replace your set with an equivalent type model.

Another reason to read the policy is that certain types of events such as flooding or earthquakes may be excluded in the standard policy. If you want to protect your home and possessions from damage from these types of events you will be required to buy separate policies.

Other Facts about Personal Possessions

Your personal possessions are not covered in their entirety. Some more valuable possessions such as artwork, collectibles, furs and other items will only be covered to a specified percentage or dollar amount. To ensure that you cover these valuable items to their full value you will be required to buy separate “insurance riders.” In most instances, you will need these items appraised before the rider is issued.

You may also need separate riders for other personal possessions such as a boat, and R.V. or A.T.V. and other items as they may be excluded or only afforded very nominal coverage.

Do You Have Enough Insurance?

Many policies cover only the structure and/or your possessions. They may not cover the land itself. Instead of getting insurance just for the home, you want to consider increasing the amount of coverage to also cover the land. You also need to review the policy for unattached structures to ensure they are also covered.

Another point to remember is to review you policy every couple of years. Properties and homes appreciate in value but your insurance coverage has to be increased by you because it will not be done so automatically.

Money Saving Tips

There are two ways that you can save money on your homeowner’s policy. The first is by increasing your deductible. The deductible is the mount you will be responsible to absorb when you make a claim.

If you are submitting a claim on your home destroyed in a fire worth $500,000 with a comparable policy coverage amount and have a $1,000 deductible, then you would receive payment less the deductible. The higher the deductible – the cheaper the cost of the policy.

The second way to save money is through bundling. Most insurers will provide discounts if your bundle some of your insurance coverage under the one insurer such as your auto insurance combined with your homeowner’s. Always ask you agent about any discounts offered by the insurance company.

Insulating Your Vancouver Home- Consult with Bruce Coleman, Vancouver Mortgage Broker

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Insulating Your Vancouver Home

If you’ve bought an older Vancouver home and found it to be somewhat drafty or chilly then it might be time to consider some new insulation. Insulation not only helps to keep the home warmer in the winter months but can also keep it cooler in those hotter humid summer months.

Some indications that your home is not properly insulated in winter months include cold walls or floors, expensive heating bills, indications of mould and uneven heat throughout the home. In summer, some of the signs of inadequate insulation include uncomfortable heat levels, inadequacy of air conditioning and mould growing in the basement.

There are many different types of insulation available these days, and some types of insulation are more suitable for different parts of the home.

Ideally, the shell of the home should have 3 separate components when it comes to insulation. The exterior should have an air barrier underneath the siding or brick. The interior of the home should have insulation within the wall studs of the framework which should be covered with a third lawyer which is actually a vapour barrier to keep moisture at bay.

How Insulation is Rated

The effectiveness of insulation is rated by the “R” value or in metric terms the “RSI” value. The R refers to the insulation’s resistance ability to resist the movement of heat. The higher the R or RSI value – the higher the resistance factor.

Most provincial building codes have a minimal R value assigned to how insulation is used in varying applications, and most particularly refer to new construction, and will provide you with a good guide for how to use insulation effectively to insulate older homes.

Types of Insulation

Here is a basic guide of the types of insulation that are available for use:

Batt Type Insulation

Batt insulation comes in the form of bales which are wrapped and generally shaped to fit perfectly in between the wall studs and include:

• Fibreglass – Very commonly used for wall studs
• Mineral Wool – Has slightly better resistance to fire and sound proofing capabilities
• Cotton – Not very common

Loose Fill Insulation

The types of loose fill insulation should generally be applied using a professional installer. The types of loose fill insulation include:

• Fibreglass – pink or yellow in colour and perhaps not the best for attics as it can be affected by air movement
• Mineral Fibre – considered very light
• Cellulose Fibre – Grey in colour but is best applied by an experienced installer

Board Stock Insulation

There are a variety of types and include the following:

• Types I and II – usually comprised of polystyrene or EPS. Very thin and has foam beads pressed together and must be covered.
• Types III and IV – Also made of polystyrene or XPS. A suitable choice for moist of humid climates as can act as vapour barrier and must also be covered.
• Rigid Fibreglass and Rigid Mineral Fibre– Less rigid than polystyrene and has good drainage capability
• Polyisocyanurate – Is a rigid foam that is foil-faced

Applied Sprays

Sprays may have a number of potential health risks when being applied so it is vital that you closely follow the manufacturer’s requirements for using safety and protective equipment. Ideally, this type of insulation should be applied by a professional installer. The types of spray insulation materials include:

• Wet Spray Cellulose – Consist of a very fine particles which are held together with a binding agent
• Open Cell Light Density Polyurethane– A soft foam of spray which expands in the cavity area and must be covered with a vapour barrier

Keep in mind that the different types of insulation described above are suitable for different areas of the home such as the attic, wall studs, floors and basement and the exterior of the building. Using the wrong insulating material in the wrong location can be very counter-productive.

Women the new ‘wildcard’ in the condo market – Consult with Bruce Coleman, Vancouver Mortgage Broker

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Megan Vickell is a new brand of condominium owner that people predicting a market crash may have forgotten to factor in.

She’s young, single and ready to buy her first home. And, more importantly, she’s female — part of a growing demographic that just might be creating a new paradigm in the housing sector.

A report from Canada Mortgage and Housing Corp. shows women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65% of owner occupants in 2011.

The female factor is even more prevalent among older women with 76% of those 55 and older living alone women. Among lone-parents, women make up 84% of condominium owners.

It’s not just one thing about condos that is pushing Ms. Vickell to look at a high-rise. The public relations manager of eBay Canada says she’s close to putting in an offer this week on a 650 square foot unit.

“When I was looking I was grumbling because a lot of the maintenance fees were so high but then I was walking down the street after a big snowfall, and all these people were snowed in,  I thought ‘for a single female, I’m willing to pay those fees’,” she says. “I don’t even know where to start with half that stuff around the house.”

There are other perks of condominium living that attracts her to the market, including the 24-hour seven-day a week concierge service. “It’s everything you need in one place. There is someone to take my packages when I’m not there, I’ve got a gym. It’s really just all about convenient living,” says Ms. Vickell.

She sees the condominium as a stepping stone to a house. “I think of it as a five-year plan,” she says.

Do early mortgage renewals save or cost you money – Ask Bruce Coleman, Vancouver Mortgage Broker

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ROBERT MCLISTER – Special to The Globe and Mail

A rate in the hand is worth two in the bush.

Many mortgage lenders want you to believe that rate certainty is worth paying a premium for. It is the justification, they say, for staying with them and renewing your mortgage early.

Early renewal features typically let you lock in a new rate two to four months ahead of when your mortgage is due to mature. Some lenders, like Bank of Nova Scotia, even let you renew up to six months in advance.

The question is, do early renewals save or cost home owners money?

“Unless the consumer believes that interest rates are going to move up significantly prior to their ability to lock in, I fail to see a reason to do an early renewal with their existing lender,” says mortgage broker Calum Ross.

By locking in earlier, you minimize risk of adverse rate movements. But in return, you pay a premium to the best available rates, and you’ll lose all benefit if rates drop before your term is up.

Not surprisingly, Canada’s big lenders are advocates of renewing your mortgage in advance. “We think it’s a good idea to have some room to manoeuvre [when locking in a renewal rate],” says David Stafford, Scotiabank’s managing director of real estate secured lending. Having more time to make a decision is especially important if you plan to renew with your current lender, as more than 90 per cent of customers do at Scotiabank.

Of course, the benefit of renewing early depends largely on the rate you’re offered. Right now, for example, you can find fully featured five-year fixed rates at 3.29 per cent or less. If your lender is letting you lock in 90 days early for 3.39 per cent – a mere 10 basis point premium – that’s worth considering (assuming a five-year fixed is the right term for you). This seems especially relevant today, given that fixed rates may climb if the U.S. Federal Reserve slows its bond buying (i.e. “tapers” its economic stimulus program).

On the other hand, if your lender were pitching a “one-time-only” opportunity to renew early at 3.59 per cent or more, that warrants more skepticism. A 0.30-percentage-point rate difference would tack on $3,500 of extra interest on a $250,000 five-year term. (Note: This 3.59-per-cent rate is an actual early renewal “special” currently being offered by at least one major bank.)

I use 0.30 of a percentage point in my example on purpose: That’s roughly how high today’s best fixed rates can increase until they’re equal to a good early renewal rate.

But it’s not that often that rates jump 0.30 of a percentage point in 90 days. Since the 1950s, fixed rates have risen 0.30 of a percentage point over a three-month span only 21 per cent of the time. Mind you, we experienced one such case last May to July when rates soared three-quarters of a percentage point.

Either way, if lenders can get you to commit early, they will. By law, banks have to send you a renewal notice at least 21 days before the end of your existing term. But they’ll often contact you well in advance of that, which reduces the odds of you shopping around.

Positioning early renewals as a “convenience” or risk mitigator is a strategy that frequently pays off for lenders. According to the Canadian Association of Accredited Mortgage Professionals, almost four out of 10 people who renew with the same lender do so at the original rate proposed by that lender. In other words, they don’t negotiate.

To minimize rate risk, fixed-rate borrowers should seek at least a 90- to 120-day rate hold, either at their existing lender or elsewhere. If your current lender offers to hold a decent rate for you (without making you commit right then), that’s a “no brainer,” Mr. Ross says. Having a rate hold in your back pocket limits rate risk if you choose to wait until 30 days from maturity to renew. The market’s best rates are often 30-day “quick closes.”

“It is clear to me that consumers don’t do a good job at managing this part of their personal finances,” Mr. Ross adds, and that’s certainly true. If you want a great deal on your next mortgage renewal, one that could potentially save you thousands, remember that your lender’s first offer is seldom the best offer.

Robert McLister is the editor of CanadianMortgageTrends.com and a mortgage planner at VERICO intelliMortgage, a mortgage brokerage. You can also follow him on Twitter at @CdnMortgageNews.

Former Goldman Sachs investment banker appointed to head CMHC

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Canada named Evan Siddall, a former official with Goldman Sachs Group Inc., as chief executive officer of the country’s government-owned housing agency.

Siddall, who has been a special adviser to the Bank of Canada Governor for the past two years, will serve a five-year term at Canada Mortgage & Housing Corp. starting Jan. 1, the government said today in a statement.

Toronto-native Siddall holds a law degree from that city’s York University. He worked as a partner for Lazard Freres & Co. LLC and was managing director at the firm’s Canadian operations for six years, according to a biography on the Bank of Canada’s website. He has also held positions with Fort Reliance Co. and Bank of Montreal.

“I look forward to working with its dedicated staff, clients and stakeholders to ensure that Canadians continue to benefit from CMHC’s key role in providing affordable and accessible housing, as well as in promoting a strong financial system,” Siddall said in the statement.

At the central bank’s Toronto office, Siddal led projects that aimed to promote stability of the Canadian financial system.

In a Dec. 10 report, the central bank said “there is a risk of a correction in prices and construction activity” if the supply of new condo units in major cities such as Toronto isn’t absorbed. The housing market is also more vulnerable if demand has been inflated by investors who are more likely to get out of the market if it weakens, the bank said in the report.

“Mr. Siddall brings to the position extensive leadership and senior management experience,” Employment Minister Jason Kenney said in the statement. “His proven financial and capital markets expertise will be of tremendous value to CMHC.”

Bloomberg.com

Re/Max forecasts ‘exceptionally healthy’ real estate market in 2014 – Ask Bruce Coleman, Vancouver Mortgage Broker

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MISSISSAUGA, Ont. — Canada can expect an “exceptionally healthy” housing market in 2014 thanks to improvements in the overall economy that helped produce a surge in the latter half of this year, a leading real estate group said Wednesday.

Re/Max says that nationally, home sales are expected to climb 2% to 475,000 units next year after a 3% increase to well over 453,000 projected for 2013 when all the numbers are in.

At the same time, the value of an average Canadian home is forecast to escalate 3% to $390,000 in 2014 after rising 4% to $380,000 in 2013, according to a survey of the group’s independent brokers and affiliates.

Meanwhile, the outlook is for the residential housing market to remain in “clear balanced territory” throughout 2014, although some pockets and price points may see continued shortages.

Re/Max says its optimism is largely based on an improved outlook for Canada next year which is expected to see the country enjoy economic growth second only to the 2.8% rate of the United States among Group of Seven countries.

And it says that while Canada’s economic growth is currently forecast at 2.3% , it could move higher given the impact of strengthening global economies on the Canadian manufacturing sector.

“Canadian housing markets are on solid ground after a somewhat harrowing first and second quarter of 2013,” said Gurinder Sandhu, executive vice-president and regional director, RE/MAX Ontario-Atlantic Canada.

Better than expected economic performance, relatively stable inventory levels and the threat of higher interest rates down the road “proved mid-year game changers, providing the stimulus necessary to jump-start home buying activity,” Sandhu said.

As a result, the momentum that emerged in the latter half of the year is expected to spill over into 2014, setting the stage for continued growth and expansion in most residential markets, Re/Max said.

Overall, 23 of 25 markets surveyed, or 92%, are set to experience average price increases by year-end 2013, with Hamilton-Burlington the leader at 7.5%, followed by Barrie, Ont. and District at 7%, Calgary and St. John’s, NL, at 6%, and Greater Vancouver, Winnipeg and the Greater Toronto Area at 5%.

The forecast for 2014 shows the upward trend continuing, with values expected to again climb in 92% of markets surveyed, led by Greater Toronto at 6%.

Quebec and Atlantic Canada have been the exceptions to the rosy performance in 2013, with sales expected to fall below 2012 levels.

But even there things should improve next year, Re/Max said.

“Both regions should rebound in the new year, led by Halifax-Dartmouth (5%), Moncton (3%), Greater Montreal (2%) and Quebec City (2%).”

Although there are several factors that are expected to contribute to rising housing prices on a national basis, one of the most pressing is build out, Re/Max said.

“Nowhere is that more obvious than in Vancouver, where the mountains and the ocean have prevented further growth, and the Greater Toronto Area, where the greenbelt has stymied future development.”

“As such, the availability of low-rise homes relative to the population is expected to contract, placing further pressure on prices,” it said.

“We’re definitely seeing a greater commitment to higher density at a municipal level,” said Elton Ash, regional executive vice-president, RE/MAX of Western Canada.

“In fact, the trend already underway in Vancouver and Toronto, has gained serious momentum in smaller markets where cities are moving to infuse vibrancy into the urban core through mixed-use residential/commercial/retail development.”