Property Type:
25.5% of purchases were by Move-Up Buyers
20.9% by First Time Buyers
12.3% moving from Single Family Home to Strata Unit
11.4% purchasing Recreation Property  (up from 4.8% in April)*
7.7% buying Revenue/Investment Property
4.1% moving from Strata property to Single Family Home 
2.7% moving into Retirement Home/Seniors Community

*Recreation property sales improved significantly over April with 11.4% of purchases in compared to 4.8%.

Buyer Type (Family Dynamic):
28.7% Two parent family/children
24.2% Empty Nesters/Retired  (up from 16.8% in April)**
23.7% Couple without children 
11.2% Single Female
9.4% Single Male
3.1% Single Parent with children

**Interesting to note the relative “balance” this month between two-parent families, couples without children, and empty nesters/retirees -- due to a rise in purchases by the latter group.

Moving From: 
59.5% from Within OMREB Board Area
16.2% from Alberta
10.8% from Other Areas in BC  (up from 6.8% in April)***
7.7% from Lower Mainland/Vancouver Island
2.7% from Eastern Canada/Maritimes
1.4% from Outside Canada
0.9% from Saskatchewan/Manitoba
0.4% from NWT/Yukon (9th month reported)

Information provided by www.omreb.com

Property Type:
31.0% of purchases were by Move-Up Buyers
17.6% by First Time Buyers
16.6% moving from Single Family Home to Strata Unit
10.7% buying Revenue/Investment Property
4.8% purchasing Recreation Property
4.3% moving into Retirement Home/Seniors Community
3.2% moving from Strata property to Single Family Home

Buyer Type (Family Dynamic):
30.4% Two parent family/children
27.7% Couple without children 
16.8% Empty Nesters/Retired
11.5% Single Female
9.4% Single Male
3.7% Single Parent with children

Moving From: 
58.6% from Within OMREB Board Area
19.4% from Alberta
7.9% from Lower Mainland/Vancouver Island
6.8% from Other Areas in BC
4.2% from Eastern Canada/Maritimes
2.1% from Outside Canada
1.0% from Saskatchewan/Manitoba
0% from NWT/Yukon (8th month reported)

Information provided by www.omreb.com

Okanagan Buyers Survey Summary - March 2012

Property Type:
28.7% of purchases were by Move-Up Buyers
21.3% by First Time Buyers
12.4% buying Revenue/Investment Property
9.6% moving from Single Family Home to Strata Unit
5.6% Recreation Property Buyers
3.9% moving into Retirement Home/Seniors Community
3.4% moving from Strata property to Single Family Home

Buyer Type (Family Dynamic):
30.9% Couple without children 
18.2% Two parent family/children
17.1% Empty Nesters/Retired
14.9% Single Male
13.8% Single Female
6.1% Single Parent with children

Moving From: 
63.0% from Within OMREB Board Area
12.7% from Alberta
10.5% from Lower Mainland/Vancouver Island
9.4% from Other Areas in BC
2.2% from Saskatchewan/Manitoba
1.7% from Eastern Canada/Maritimes
0.6% from NWT/Yukon (seventh month reported)
0% from Outside Canada

Information provided by OMREB.

The Bank of Canada left its overnight rate unchanged at 1 per cent for the 13th consecutive meeting. In the statement accompanying the decision the Bank noted that economic momentum in Canada is slightly firmer than the Bank had forecast in January and that economic headwinds from the US and Europe have abated somewhat. However, the Bank still judges the continued accumulation of debt by Canadian households to be the biggest domestic risk facing the economy. The Bank further noted that the degree of economic slack has been smaller than anticipated in January and that the economy is now expected to return to full capacity in the first half of 2013. Given a more rapid return to full capacity, we may see rate increases sooner than the mid-2013 date that most economists have penciled in. Indeed, the Bank sounded a more hawkish note in concluding their statement on the interest rate decision, citing that a modest withdrawal of monetary stimulus may become appropriate given firmer underlying inflation. However, the Bank was careful to condition that any withdrawal of stimulus would need to be balanced against domestic and global economic developments.

Our bias, and our modeling, still point to rates remaining at 1 per cent until the first quarter of 2013. However expectations of an increasingly hawkish Bank of Canada may start to get priced into long-term interest rates which could push mortgage rates higher in coming months.

Information provided by BCREA. 

Either way you’re investing in your future. Paying down your mortgage helps reduce future interest costs, and builds home equity. Contributing to your RRSP or TFSA builds your savings through the power of tax-free compounding.

What solution is right for you … or should you do both? Let’s take a look at both sides of the equation.

Pay down your mortgage

Being mortgage-free as soon as possible may be a sound strategy for creating wealth. Contributing to your mortgage over and above your payment will help you be mortgage-free sooner. Any additional amount over your regular payment will go directly towards reducing the principal. The more you pay down now, the more interest costs you’ll save in the future.

If your mortgage interest rate is equal to or higher than the rate of return you expect to earn on your RRSP or TFSA, then reducing your mortgage can be a good choice. An important thing to recognize is that when you pay down your mortgage it guarantees you a rate of return equal to the mortgage rate. In this low interest rate environment, it’s not possible to earn a similar guaranteed rate in your RRSP or TFSA.

Saving through RRSP/TFSA contributions

Money invested in your RRSP compounds tax-free, earnings on TFSA contributions are tax exempt. In either case each can create a sizeable nest egg for you in retirement. Also, if you're not planning on retiring for a while, the compound interest you can earn is likely more advantageous than a paid-off mortgage.

If the expected rate of return in your RRSP or TFSA is higher than the interest rate on your mortgage, then contributing to an RRSP or TFSA makes sense, (eg. 9% in your RRSP vs. 3.99% on a mortgage). It’s important to recognize however that the rate of investment return is not guaranteed and higher returns come with a higher risk.

Do both

Another consideration is to do both and get the best of both worlds. For example, contribute to your RRSP each year, and use the tax refund to pay down your mortgage. Finding a balance between chipping away at your mortgage and saving for retirement is a form of diversification that could benefit you in the long run.

There are a number of online calculators available that can provide a quick comparison of your options. Check out the RRSP vs. Mortgage Calculatoror the Government of Canada's TFSA calculator.

The above is general information and is not intended to be financial advice, and may not be suitable for you. Before you make a decision, we recommend you consult with a qualified financial advisor about which strategy might be right for you.

This article is provided by First National Financial. For more information call 888.488.0794 or visit www.firstnational.ca.

Property Type:

20.7% by First Time Buyers
20.7% of purchases were by Move-Up Buyers
14.0% buying Revenue/Investment Property
13.2% moving from Single Family Home to Strata Unit
6.6% moving into Retirement Home/Seniors Community
4.1% Recreation Property Buyers
3.3% moving from Strata property to Single Family Home

It is interesting to note that first-time buyers and move-up buyers appear to be neck and neck this month!

Buyer Type (Family Dynamic):
28.0% Two parent family/children
23.2% Couple without children 
16.8% Empty Nesters/Retired
12.8% Single Female
9.6% Single Male
4.8% Single Parent with children

Moving From: 
64.8% from Within OMREB Board Area
19.2% from Alberta
9.6% from Lower Mainland/Vancouver Island
4.8% from Other Areas in BC
0.8% from Saskatchewan/Manitoba
0.8% from Eastern Canada/Maritimes
0% from Outside Canada
0% from NWT/Yukon (fifth month reported)

Property Type:

23.6% by First Time Buyers
16.7% of purchases were by Move-Up Buyers
16.7% buying Revenue/Investment Property
6.1% moving from Single Family Home to Strata Unit
4.4% moving into Retirement Home/Seniors Community
4.4% Recreation Property Buyers
4.4% moving from Strata property to Single Family Home

Buyer Type (Family Dynamic):
28.6% Two parent family/children
23.5% Couple without children 
14.3% Empty Nesters/Retired
13.4% Single Female
13.4% Single Male
4.2% Single Parent with children

Moving From: 
64.7% from Within OMREB Board Area
10.9% from Alberta
10.9% from Lower Mainland/Vancouver Island
10.1% from Other Areas in BC
1.7% from Saskatchewan/Manitoba
0.8% from Eastern Canada/Maritimes
0.8% from Outside Canada
0% from NWT/Yukon (fourth month reported)

The provincial government announced today a potential tax savings up to $500 for new home buyers when they purchase a newly built home, effective for agreements written today until the HST is removed on April 1, 2013.  Details are as follows:

The new BC First-Time New Home Buyers' Bonus will be a temporary one-time refundable income tax credit for first-time home buyers who purchase a newly constructed home. The credit will be calculated as five per cent of the purchase price of the home up to a maximum credit of $10,000.

The credit will be phased out at a rate of 20 per cent of net income in excess of $150,000 for single individuals and at a rate of 10 per cent of family net income in excess of $150,000 for couples. Only one credit can be claimed per home.

The credit will be available on purchases of newly constructed housing where both the HST applies and where a written agreement of purchase and sale is entered into on or after Feb. 21, 2012.

VICTORIA – New housing transition measures give certainty to an important economic sector and help to keep taxes equitable throughout the transition as the province returns to the PST, Finance Minister Kevin Falcon announced today.

B.C. will return to the PST on April 1, 2013, meeting the Province’s commitment to return to the PST as quickly and responsibly as possible, while ensuring businesses can plan their training and systems switch-over effectively to apply the sales tax correctly.

Government is announcing new relief measures that will benefit purchasers and builders of new homes. The B.C. new housing rebate threshold will be increased to $850,000, effective April 1, 2012, meaning more than 90 per cent of newly built homes will now be eligible for a provincial HST rebate of up to $42,500. It is important to note that the HST does not apply to resale housing.

In addition, to help support workers and communities in B.C. that depend on residential recreational development, purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 will now be eligible to claim a provincial grant of up to$42,500 effective April 1, 2012.

The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under HST and partly under the PST, they will all pay a consistent and equitable amount of tax.

Specifically:

• B.C.’s portion of the HST will continue to apply before April 1, 2013. Purchasers will be eligible for the new higher B.C. HST new housing rebate, of up to $42,500, and builders will continue to claim input tax credits.
• B.C.’s portion of the HST will no longer apply to newly built homes where construction begins on or after April 1, 2013. Builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home’s final price will again be embedded PST.
• For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price. This ensures equitable treatment among purchasers and will help mitigate distortive market behaviour. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double-taxation on homebuyers.

The transition rules outlined today provide certainty for new-home construction and sales, particularly during the transition period.

For goods and services that will be subject to PST, PST will generally apply where tax becomes payable on or after April 1, 2013. Detailed general transitional rules for goods and services will be available with the full PST legislation introduced in the legislature this spring.

The provincial changes are subject to the approval of the legislature.

Information provided by the Ministry of Finance. For more information please visit www.gov.bc.ca 

Canadian housing starts began the year with a seasonally adjusted annual rate (SAAR) of 197,900 starts in January. While starts were down slightly from December's mark of 199,900, the pace of new home construction remains strong.  New home construction in BC urban centres rose 29 per cent from December 2011, registering 27,000 starts (SAAR) in January. 

Looking at major metropolitan areas, housing starts rose 8.3 per cent year-over- year in Vancouver. In a bit of a role reversal, it was single family starts that drove growth, rising 50 per cent year over year while multi-family starts rose a modest 2 per cent. Abbotsford new home construction fell 54 per cent year-over-year in January due to weakness in both single-family and multi-family starts. New home construction in Victoria rose 5 per cent year-over-year in January due to strong growth in multi-family starts. Finally, new home construction in Kelowna continued to build on momentum from late 2011 as total starts rose 48 per cent year-over-year on balanced growth between single and multi-family starts. 

Source: www.BCREA.ba.ca 

Property Type:

23.8% of purchases were by Move-Up Buyers
21.8% buying Revenue/Investment Property
19.8% by First Time Buyers
8.9% moving from Single Family Home to Strata Unit
7.9% Recreation Property Buyers
5.0% moving from Strata property to Single Family Home 
3.0% moving into Retirement Home/Seniors Community

Moving From: 

68.9% from Within OMREB Board Area
12.6% from Alberta
8.6% from Lower Mainland/Vancouver Island
2.9% from Other Areas in BC
2.9% from Saskatchewan/Manitoba
2.9% from Outside Canada
1.0% from NWT/Yukon (third month reported)
0% from Eastern Canada/Maritimes

For more information on Kelowna Real Estate, call the Dion-Ivans Group today. Your best source for Kelowna Real Estate Listings!

TORONTO, January, 2012 –The Royal LePage House Price Survey and Market Survey Forecast released today showed the average price of a home in Canada increased between 3.6 and 6.1 per cent in the fourth quarter of 2011, compared to the previous year. Royal LePage expects average price growth to continue through 2012 and predicts national average prices to increase by 2.8 per cent by the end of the year.

Despite calls in some quarters for Canadian house prices to soften in 2011, the market proved resilient as demand created by low interest rates and a relatively stable national economy created upward pricing pressure for all housing types surveyed. Further, recent high profile reports forecasting significant house price declines in 2012 are not supportable.  Nationally, consumer confidence in the housing market was high in the fourth quarter as real estate brokers witnessed an unusually high quantity of multiple offer situations, including over the holiday season, compared to same period in previous years.

In the fourth quarter, standard two-storey homes rose 4.2 per cent year-over-year to $375,427, while detached bungalows increased 6.1 per cent to $344,392. Average prices for standard condominiums increased 3.6 per cent to $234,680.

“In the recovery period following the 2008-2009 recession, I found myself repeatedly speaking of ‘irrational exuberance’ in the Canadian housing market,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Expectations were too high and the pace of expansion unsupportable. With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and buoyed by the stimulative effect of very low interest rates, we expect the market to continue to expand – albeit at a slower pace.”

While 2011 was a very strong year for price growth, over the past five years, including the recessionary period, Canada’s average home prices have grown by only 3.5 per cent compounded annually, well below the long term average rate of appreciation. Canada’s GDP has also grown modestly over the same period and the economy is expected to expand by approximately two per cent in 2012. While unemployment remains stubbornly higher then pre-recession levels, sustained employment at today’s levels in a low interest rate environment can be expected to support continued average house price appreciation across the country.

Canadians remain confident in their real estate investments. Throughout 2011, buyers took advantage of low rates to enter the housing market or move-up to homes that better suited their family’s needs or wants. All regions included in the Royal LePage Market Survey Forecast anticipate positive average price growth in 2012. This includes the relatively expensive Toronto and Vancouver regions, where rising home prices have consistently out-paced the other urban centres.

”We believe calls for falling prices and more affordable housing in 2012 are unlikely to materialize,” said Soper. “While this will comfort the seventy per cent of Canadians who are homeowners, there is cause for concern when house price growth outpaces increases in wages and salaries for an extended period of time. Coupled with more restrictive mortgage regulations that have made it more difficult to obtain financing, those who aspire to own a home may find it increasingly difficult to enter the housing market and, in some regions, it may leave people out entirely.”

Regionally, Royal LePage expects to see cities with commodity-based economies, such as Calgary, Regina and Winnipeg, outperform larger urban centres such as Toronto and Vancouver. Royal LePage has forecast Calgary’s average house prices to climb 3.6 per cent in 2012. In 2011, the largest average price increase was seen in Regina, where average prices for standard two-storey homes rose 19.5 per cent year-over-year.

For more information visit www.royallepage.ca