Cranbrook BC Real Estate

Its pretty quiet out there right now.  There are some sales but not as much as we thought for this point in the year.  We have listings and many people waiting to sell their place to buy another, but the chain of events hasn't quite produced yet.  Could it be the weather?  Could it be that it takes longer than we think to get those jobs back and get that steady income coming in before people are able to commit to buying a home?  How's Alberta doing?  They haven't bounced back yet, slowly its coming for them.  We did come out really well from the economic recession, but it takes time.  It is a great time to buy.  Lots of value out there for your money.  Lots of Sellers more willing to negotiate.  The Bank of Canada raised their prime rate today, but even with that, the interest rates are still fabulous.  This is a great time to buy an investment property.  Victoria Villa for under $100,000, you can rent these 2 bedroom 1 bath, in suite laundry units for $850 per month, no maintenance and Woodland Court for under $90,000, you can also rent these for $800 to $850, 2 bedroom, 2 bath, no maintenance.  You buy these units, rent them out, let the tenant pay your expenses, watch the market go back up and your mortgage go down and you've made some good money.  Money you would not have been able to save.  The Cranbrook real estate prices are down approx. 8 to 10%.  They will go back up when the market starts to pick up again.  When will that be?  If we could predict the real estate market then we all would be very rich real estate investors. 

How will the HST impact the real estate sector?

As proposed, the HST will increase the cost of buying or selling all types of property and becomes essentially an additional tax on home ownership. REALTOR® commissions, appraisals and other services will be subject to a 12% HST, replacing the 5% GST now charged, and new homes will be subject to the full HST.

The HST would generally apply to a supply of a service to the extent that the service is performed on or after July 1, 2010. The HST would generally not apply, however, to a supply of a service if all or substantially all (90% or more) of the service is performed before July 2010.

For more information and to see the General Transitional Rules for BC, click here. For the Residential Housing New Housing Rebates and Transitional Rules for BC click here.

 How will bare land be impacted?

According to BDO Dunwoody, the sale of land is currently the one supply where the GST may become collectible, regardless of the GST registration status of the seller. With the implementation of the HST, land sales that are subject to the 5% GST will become subject to the 12% HST. Any person who sells land should determine whether the HST is applicable to the sale. PST does not apply to the sale of bare land.

GST taxable sales of bare land do not require (or allow) for the seller to collect the GST from the buyer if the buyer is registered for the GST at the time of the sale. These same rules are expected to apply for the HST. A seller who makes a taxable sale of bare land to a buyer who claims to be registered for the HST should verify the HST registration with the Canada Revenue Agency (CRA). The CRA has established its own website (www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/gsthstrgstry/menu-eng.html) that allows a person to verify the registration status of a seller.

When a buyer who is registered for the HST acquires land that is subject to the tax, they are required to self-assess the HST payable on their HST return. Generally, when the land is used more than primarily (50%) in the buyer's commercial (taxable) activity, a full input tax credit can be claimed on the same return. The reporting of the self-assessment and the entitlement to claim a full input tax credit should result in no net tax for the buyer.

The HST charged on real estate commissions related to sales of bare land should be fully recoverable, provided the seller is an HST registrant and was using the land exclusively

When does HST become payable?

BDO Dunwoody anticipates transitional rules similar to those imposed for other harmonization and used in the recent federal reductions of the GST. If these rules apply, where a purchase and sale agreement for a new home is entered into on or after July 23, 2009, and ownership or possession of the house is given to the purchaser before July 1, 2010, the GST at 5% should apply to the sale. For new homes where the purchase and sale agreement is entered into on or after July 23, 2009, and both ownership and possession is given to the buyer after June 30, 2010, the HST at 12% is expected to apply to the sale.

For new homes where the purchase and sale agreement was entered into with the buyer before the July 23, 2009 government announcement, it is expected that only the GST at 5% will apply, regardless of when ownership and possession transfers to the buyer.

Is there any relief for buyers of new homes?

To offset the increase in costs, the Government of BC plans to offer a partial rebate of the provincial portion of the HST for new (and substantially renovated existing) housing to ensure that new homes up to $525,000 will bear no more tax than under the current PST system, while homes above $525,000 will receive a flat rebate of $26,250. New home sales over $525,000 will be impacted, as buyers will have to pay an additional 7% tax less the $26,250 flat rebate.

For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.

How will the proposed rebate for new and substantially renovated existing homes work?

Why was $525,000 chosen as the threshold for the rebate for new homes?

On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. The original $400,000 threshold reflected the median price of new housing in urban areas in BC in 2008. Homes priced above $525,000 will receive a flat rebate of $26,250. The rebate will be available whether the new housing is to be owner occupied or rented.

According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.

For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.

 in commercial activities.

“Copyright British Columbia Real Estate Association. Reprinted with permission.”

1.  Absolutely the most important thing and the very cheapest is CLEAN.  Your house needs to be immaculate.  Windows and the window frames.  People look at windows and if they are not new windows they should be a least very clean windows with no evidence of mildew.  If you cannot afford to replace old carpets, steam clean them.  Yes they may replace them anyway, but they may not have the money to do it.  Especially right away.  No dishes in the kitchen sink.  Bathrooms should be spotless with the toilet seats down for showings.  Taps should be shiny.  Beds all made, etc etc.

 2.  While you're cleaning, DECLUTTER.  Get rid of the piles of stuff.  If you truly want to move you need to deal with it anyway.  Make piles that go to the dump, Sally Ann, and storage.  It is worth renting a storage facility if you have that much stuff.  Organize shelves and closets.  Buyers don't want to see a cramped house.  They want to picture their things there and if they see no space or if they see how you have cramped everything in, it will not appeal to them.  Buyer's cannot imagine themselves there.

3.  It is important to keep your house smelling good.  Fresh flowers and air freshners really help a buyer feel good about the home.  Do not cook fish or wild meat or curry.  These SMELLS linger and really put someone off when they walk through the front door.  Don't go overboard on air freshners though.  There are buyers out there with allergies.

4.  Next in line would be STAGE.  Invest in selling your home.  Buy a few nice things to make your house appeal to someone.  A nice bedspread, new bathroom carpets, artwork, a nice throw etc.  Spruce it up!  You can take it all with you for your next home.  Tell yourself you have to do this to sell your house if spending the money on these types of things both you.

5.  PAINT.  Go pick out some earth tones, not just plain beige or white.  Go with some color!  The local paint store can really help you with a color palette.  Use their help and listen.  This will brighten your home up and look better maintained because all of the paint chips that are on your wall now will be gone.  It also makes the house appear alot cleaner.

6.  If your house is really tired, FLOORING.  Invest a few thousand dollars and do it.  Again, go with earth tones and texture.  You will get your money out of it.  If you need flooring and don't do it, you can guarantee the buyer is going to try to get you down lower on your price to compensate for it, even if you have already lowered the price.

7.  Does your KITCHEN need a face lift.  Countertops are very reasonably priced and can do the job.  Change the hardware on your kitchen cabinets also helps.

8.  Does your BATHROOM also need a face lift.  Counterops again will help so much.  Bathroom fixtures.  A new taps and shower head.

9.  LIGHTING in your home is huge.  New lighting does wonders for the look of your home at little expense.  Brushed nickel lighting fixtures is best or black.

10.  When your house has a SCHEDULED SHOWING, leave all the lights on, all of the window coverings open, fresh flowers or air freshners, completing neat and tidy, toilet seats down, keep the house warm on winter days and cool on summers days.  Make your house available to show.  Be very accomidating, the more people who come through your home the better chance it has to sell!!!  Good luck.

The Bank of Canada held its benchmark overnight lending rate steady at 0.25 per cent at its setting on October 20^th, 2009. The trend-setting Bank rate, which is set 0.25 percentage points above the overnight lending rate, remains at 0.5 per cent.

The Bank acknowledged that recent indicators point to the start of a global recovery, and that economic and financial developments have turned more favourable than it had previously expected. While recognizing that the Canadian economy is rebounding, it expects the recovery to be weak by historical standards.

The Bank downgraded its forecast for Canadian economic growth this year, while keeping its forecast unchanged for 2010. It also lowered its forecast for economic growth in 2011. 

In its September announcement to hold interest rates steady, the Bank forecast that inflation would return to its two per cent target in the second quarter of 2011. The Bank has now moved that date out to the third quarter of 2011.

The Bank’s commitment to keep interest rates on hold until the second half of next year is conditional on the outlook for inflation.  Since inflation is not expected to pick up sooner than it previously expected, the Bank repeated its commitment to keep interest rates on hold. “Conditional on the outlook for inflation, the target overnight rate can be expected to remain at its current level until the end of the second quarter of 2010 in order to achieve the inflation target.”

The Bank pointed to the rapid rise in the Canadian dollar in recent weeks as a risk to the Canadian economic recovery, saying “Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures.” The Bank now expects that the domestic economy will be a greater source for economic growth, at the expense of weaker net exports.

The Bank expects the output gap to close in the third quarter of 2011, one quarter later than it had projected in July when it said production would reach capacity in mid-2011.

“The Bank threw cold water on recent speculation that it may raise interest sooner rather than later,” said CREA Chief Economist Gregory Klump.  “By highlighting the recent rapid rise in the Canadian dollar while intentionally failing to mention the rebound in the Canadian housing market as sources for concern, the Bank aimed to end recent speculation that it will hike rates before its repeated pledge of not doing so until at least July 2010.”

As of October 20^th, the advertised five-year conventional mortgage rate stood at 5.84 per cent. This is down 1.36 per cent from one year earlier, but stands 0.35 per cent above where it stood when the Bank made its previous interest rate announcement on September 10^th.

Improving credit market conditions have enabled lenders to reintroduce discounts off posted mortgage interest rates. Discounts of up to a percentage point can be negotiated, depending on lender-client relationship.

http://creastats.crea.ca/natl/interest_rate_trends.htm