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Managing mortgage rates and the HST

Monday, March 8th, 2010 by Dan Cooper

There is mounting pressure for buyers and sellers to make a move over the next few months. Just last week the Bank of Canada maintained its overnight rate at 0.25 per cent, but economists are predicting interest rates will begin to rise in July which will convince some consumers that making the move now and locking into a lower mortgage rate might be the wisest decision.

Not only are rates expected to rise later this year, but July is a critical month since the new harmonized sales tax (HST) comes into effect on the 1st and will add to the price of a new home, especially homes priced $400,000 and higher. New home builders are currently using this as a marketing tool, encouraging buyers to buy now and avoid the full 13 per cent impact of the HST. Essentially, the province is marrying the existing Provincial Sales Tax (PST) of 8 per cent and the Goods and Services Tax (GST) of 5 per cent to create one tax of 13 per cent known as the HST or Single Source Tax. Under the HST, home buyers and sellers will have to pay extra tax on a range of services associated with real estate transactions such as mortgage insurance premiums, title insurance, legal fees, moving costs, real estate commissions and home inspection fees. Currently, consumers only pay the 5-per-cent GST on these services. Subject to the 13-per-cent HST, these services will then cost you an additional $2,000 or more on a home priced at $360,000 for example.

According to Pauline Aunger, President of the Ontario Real Estate Association, these additional taxes could price some home buyers, especially first-time buyers, right out of the market. “Now is not the time to be erecting barriers to homeownership,” she argues “We need consumers to invest in housing to help get our economy going again.” While beating the HST is certainly a consideration while shopping for your new home, realize that after July 1 when the HST comes into effect, builders may be forced to offer discounts or incentives if the new tax dampens sales. Carefully weigh your options and your priorities to determine what makes the most sense for you. The best strategy is still to find your ideal location, find a home that suits your needs and tastes and offer a price that is comfortable for your budget.

As for what might happen with mortgage rates over the next 12 months, Douglas Porter, deputy chief economist with BMO Capital Markets, sums up what most economists are saying today. “Canadians should not be expecting these extreme lows of interest rates to last that much longer. The bank is slowly but surely laying the groundwork for higher interest rates,” he says. According to a BMO report, the central Bank did not feel pressured to alter the rate due in part to vigorous domestic spending and a higher level of economic activity in Canada.

BMO predicts that the Canadian dollar will remain strong against the U.S. dollar and will be on par through to the fall, which will lead the Bank of Canada to cautiously hike rates. If your financial plans this year include buying or selling a home, choosing a Broker who will get the most for your home quickly will reduce the hassle of selling and put money in your pocket. Not only is Dan Cooper Canada’s #1 Royal LePage Team, but Royal LePage outpaced all other firms in volume sold in Oakville last year.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Finances, House Building, Mortgage, Planning, Real Estate, Statistics, Taxes | No Comments »

International games are good for business

Friday, February 26th, 2010 by Dan Cooper

I trust, like me, everyone is thoroughly enjoying the Olympic Games. What a spectacularly successful showcase for Vancouver, and after a shaky first week, our Canadian athletes certainly began to pour it on during the second half of the Games. It finally appeared that we were going to live up this year’s theme “Own the Podium.” The Olympics is a massive undertaking that creates thousands of jobs and provides valuable infrastructure that can be utilized for years to come. Vancouver is realizing the dream today, from Richmond to Whistler.

Here at home, our time will come. We have something on the horizon that, although it will be on a smaller scale, will nonetheless have a major impact on our local economy just as the Olympics is having on Vancouver. Our own local boom will increase demand for homes and increase property values. I’m speaking about the 2015 Pan Am Games. While they are still five years away, work will begin soon enough in order to have facilities and accommodations completed for 2015 – everything from the athletes village on the Toronto waterfront to a new $170 million stadium in Hamilton. Billions of dollars will be poured into the Golden Horseshoe, creating jobs and providing new infrastructure for housing, commercial and recreation once the games are over.

The Pan Am Games are anticipated to be a catalyst for a major building boom all through the Golden Horseshoe. About $2.5 million in new recreation and public facilities will be constructed to host the games – $1 billion evenly split by the federal and provincial governments and the rest being financed by municipalities and private enterprise. According to Jagoda Pike, president and COO of Toronto’s bid committee, “Preparing for and staging the games will trigger 10,000 jobs in construction and games operations. The games will draw 250,000 tourists and 10,000 athletes and officials and the region will have $700 million in new and improved sport infrastructure for athletes and local communities to use for generations. The economic impact will be relevant for years to come with new opportunities for hosting high-calibre sport events becoming attainable.” This spending boom comes at a time when more than $200 million worth of federally funded capital projects in Halton have got underway. These initiatives will keep Oakville and Burlington economically buoyant for many years and could very well be the answer to a struggling manufacturing base. The bottom line is that more jobs means more people which results in more demand for homes.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Community, Job Market, Sports | No Comments »

Are we seeing a real estate bubble?

Wednesday, February 24th, 2010 by Dan Cooper

We have been hearing about a housing market that is heating up, to the extent that Federal Finance Minister Jim Flaherty is considering stiffening up-front mortgage qualifications to help fend off a resurgence of a real estate bubble. The issue for the minister, is a fear that rising debt among Canadians could lead to thousands of homeowners becoming overextended on mortgage payments when they can’t really afford to own a home.

A Vanier Institute of the Family study found the average Canadian family’s household debt rose to $96,000 last year, along with a dramatic rise in late debt payments – a 50 per cent increase in mortgages running 90 days or more in arrears in 2009 compared to the previous year. And the number of credit card holders at three or more months behind in their payments was up 40 per cent during the same period.

There is no doubt this is a troubling trend and there is no question action must be taken so we don’t see the same type of economic meltdown we recently witnessed south of the border. But the fact remains if you are financially stable, real estate remains one of the strongest and best forms of investment you can make. If you are selling your current home to purchase your dream home, having a knowledgeable broker is perhaps more important than timing. Prices can swing one way or the other fairly quickly, but choosing a broker who is skilled at marketing your property and can expertly negotiate the best deal on your behalf are far more critical than trying to time your deal.

We continue to see solid market conditions in Oakville and Burlington. For an overview of Oakville’s real estate market conditions, Jeff Mahannah, President of the Oakville, Milton and District Real Estate Board (OMDREB), recently offered this insight. “There is some debate about whether the property market in Canada is heating for a housing bubble, but I believe that is very unlikely. The Canadian Real Estate Association is forecasting sales will jump by seven per cent this year, much of that because the first few months of 2009 were relatively weak. Prices are expected to rise 4.7 per cent and momentum in the housing market is expected to carry through the first quarter of 2010 before home sales begin to moderate as a result of eroding affordability and less pent-up demand.”

Here is a snapshot of the Oakville market today compared to a year ago. According to the OMDREB, the number of residential sales in Oakville jumped by 133 per cent in January compared to the same month a year ago. And the average price rose by 25 per cent, from $474,772 in 2009 to $594,986 this past January. To put this into context, we can look back at 2007, before the recession began and prices were at their peak. Oakville house prices are still three per cent lower than what they were in 2007. That may not last long, however. Mahannah explains that the current strength of the Oakville market will continue to hold its own and live up to the Census Canada findings of being the “fastest” growing community in Canada.

In Burlington, the real estate market saw a 58 per cent increase in resales in January compared to the same month last year. The average price of freehold residential properties sold in the month of January was $302,474, an increase of 10 per cent over the same month last year, and 1.25 per cent over last month. In the condominium market the average price of condominiums in January was $230,583, an increase of 10 per cent from January 2009, but a decrease of 4.5 per cent from last month. “While the January market performed at levels that are more normal, we are looking forward with caution, as there is still a great deal of economic uncertainty surrounding us.” says Joe Ferrante, Realtors Association of Hamilton-Burlington President.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Community, Finances, Market, Mortgage, Real Estate, Statistics | No Comments »

A young local talent launches her first CD

Friday, February 12th, 2010 by Dan Cooper

Every now and then you come across someone who absolutely wows you with their talent. This was the case recently for the Dan Cooper team and me when we went to the popular Latitude Restaurant at Dorval and North Service Road to see a young violinist named Leslie Ashworth. What Leslie has accomplished with the violin at just the age of 12 is incredible. Leslie not only plays beautifully, but she composes her own music as well. We were simply blown away by this young lady. I play the guitar so I can appreciate how difficult it is to master a string instrument and to be able to perform at a professional level.

My team and I had gone to Latitude because one of our core values is to support the community, good causes and the efforts of Oakville residents. We wanted to come out and show support for Leslie, and we were well rewarded with an outstanding performance. I know that to be number one in anything, it takes a lot of hard work, total commitment and dedication.

What I also love about Leslie’s new CD is that half of the net proceeds are going to a wonderful organization called Free the Children. The organization empowers children in North America to take action to improve the lives of fellow children overseas. Its local leadership initiatives bring leadership and inspiration to tens of thousands of youth in the U.S. and Canada. Free the Children’s international projects, led by its adopt a village program, have brought over 500 schools and water projects to communities around the world.

“I connected with the founders when playing at a gala that they were also attending and it seemed like a great fit, and as they say, the rest was history,” Leslie says. I have to admire this charitable philosophy from someone so young. As for her music, Leslie began playing the violin at age 4, has won many awards and has composed more than 10 original pieces. In fact she recently dedicated a piece to the founder of Future Aces, Herbert Carnegie, at his 90th birthday. On March 7th, Leslie will be playing with the Symphony Hamilton Orchestra at the Royal Botanical Gardens beginning at 3 p.m. The concert is The Magnificent 7 (composed by Elmer Bernstein) and The Junior Young Artists Winners, featuring winners from a competition last spring which included Leslie. She will play the first movement from the Mendelssohn Violin Concerto in E minor.

Leslie’s CD is available at music stores and online at www.leslieashworth.com. You can sample some of her music on YouTube as well as her website. Keep your eye on this talented artist, she is going places.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Arts & Entertainment, Community | No Comments »

Plan your tax for maximum return

Wednesday, February 3rd, 2010 by Dan Cooper

Tax season is fast approaching and as you scramble to collect receipts, bills and slips, financial advisors will tell you the same thing – planning should be a year-long endeavour. Having said that, though, there are some valuable last-minute tips that could help you reduce your income tax costs.

These are merely suggestions, so be sure you consult with your advisor before making any decisions.

One of the biggest home improvement plans to come out of the government is the Home Renovation Tax Credit. This credit can only be applied for the 2009 taxation year on eligible expenditures. But note, you must have incurred these expenditures up to and including January 31st, 2010 in order to apply them to your 2009 tax return. The credit, by the way, is only available for the 2009 taxation year.

Novel tax strategies include your children. Did you know that you can file a tax return for children with “earned income” in order to start accumulating RRSP room? You can contribute to an RESP to start saving for your child’s education, and may be eligible for a government grant. Keep receipts for fees paid for your child under the age of 16 for enrolment in eligible physical activity programs and you might be able to take advantage of available fitness tax credits.

When it comes to claiming charitable donations, combine all donations for you and your spouse and claim them on one tax return. If your total donations are less than $200, consider carrying them forward up to five years.

These past couple of years have been challenging for everyone, but economists are telling us that better days are ahead; that the recession is over and that we will begin to see modest growth in jobs and family income. So begin your planning now for 2010 in order to enjoy maximum returns next April.

If your financial plans this year include buying or selling a home, choosing a Broker who will get the most for your home quickly will reduce the hassle of selling and put more money in your pocket. Not only is Dan Cooper Royal LePage’s #1 Team in Canada, but Royal LePage outpaced all other firms in volume sold in Oakville last year.

Dan Cooper is an award winning Broker with Royal LePage Real Estate Services Ltd., Brokerage – the Number 1 Royal LePage Team for Canada in 2009. He can be reached at 905.338.3737, direct line at 905.849.3303 or through his innovative and interactive website at DanCooper.com. Be sure to catch the Dan Cooper Real Estate Series on DailyWebTV.com. For his free booklet How To Sell Your House For Top Dollar – Fast! or his Guide to Oakville Real Estate, please call the Dan Cooper Team.

Posted in Finances, Planning, Taxes | 1 Comment »

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