The Montreal Real Estate Blog

by Sveta Melchuk

Home staging is an important marketing technique for selling homes, whether they are furnished or vacant.

Important points to remember about vacant properties are:

• People buy «Homes» and not «Houses»: it’s therefore essential to give them the feeling of a «Home» and you certainly won’t be able to achieve that with an empty space!
• A vast majority of people (over 90%) can’t imagine what a house could look like with furniture in it and they have nothing to compare their own furnishings to in an empty space. Did you know that a room actually looks smaller empty than properly furnished?
• With nothing to focus on except the bare space, the negatives will become more apparent to prospective buyers.
• A vacant house gives an impression of a desperate situation and you can expect to get lower offers than otherwise.

So, to sell your property fast and for most money, what do you need to do?
Read more »»

Plateau Mont Royal. Photo: Deyanira Bautista

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• Canada economy to slow, risks to downside - IMF (Reuters)
  Canadian economic growth will slow to 1.8 percent this year and there is a risk of an even sharper downturn as weakness in the U.S. economy spreads beyond the housing sector, the International Monetary Fund said in a report on Monday.
  After growing about 2.5 percent in 2007, Canada’s healthy economy and fiscal standing will help it withstand the global turbulence but external risks will pose a challenge. >> read more
  …….
• Canadian institutions expected to make writedowns (Exec Canada)
  Some of Canada’s five biggest banks are expected to report headline-catching writedowns when they announce first-quarter earnings. The banks have so far escaped with remarkably little damage from the credit market turmoil. >> read more
  …….
• Storm clouds threaten to rain on bank profits (Globe and Mail)
  Canadian Imperial Bank of Commerce said in January that it will take $2.46-billion (U.S.) in pretax writedowns for the two months ended Dec. 31 because of its exposure to the U.S. subprime mortgage market. >> read more
  
  …….
• UPDATE IMF lowers growth projections for Canada on back of US economic downturn (Forbes)
  Canada’s growth will likely decelerate further in 2008 and 2009 as a result of the sharp downturn in the US economy, the International Monetary Fund (IMF) reported. >> read more
  

Financing
Means used by a buyer to acquire an immovable. Financial resource, often in the form of a mortgage loan provided to the buyer by a financial institution for the purchase of an immovable (see Mortgage loan).

Fonds d’indemnisation du courtage immobilier
Body created under the Real Estate Brokerage Act, to which all real estate brokers and agents in Québec contribute to indemnify consumers who are victims of fraud, dishonest transaction or misappropriation of funds or other goods by a real estate broker or agent, which, under the Real Estate Brokerage Act, must be deposited in a trust account.

Montreal has the highest concentration of historic monuments in Canada and more than 40,000 buildings are protected under provincial or municipal legislation. These buildings represent an exceptional collective heritage that the city’s administration is dedicated to protecting and promoting in various ways.

Photography: Caribb

Owners of classified buildings that are recognized as cultural property or located on a historic site, in the Mount Royal Historic and Natural District or in the Old Montreal historical district, must obtain authorization from the ministère de la Culture, des Communications et de la Condition feminine before carrying out alterations.

Owners who wish to modify the exterior of a designated monument or an immovable that is part of a heritage site must comply with the conditions applicable to the preservation of the specific elements of the building, as well as with the municipal by-laws. They must also first apply for a permit from the city.

These heritage buildings may benefit from financial assistance under a joint program of the city of Montreal, the ministère de la Culture, , des Communications et de la Condition feminine and the Société d’habitation du Québec. The by-laws concerning subsidies for the restoration and renovation of heritage buildings and for archaeological excavations was adopted for this purpose.

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The financial well being of the condominium corporation is an important consideration. Buying on into a condominium corporation that is insufficiently funded to operate and maintain common elements is a risky proposition.

Low condo fees may make one condo more appealing than the others, but it may also be a sign that the condo corporation is not-prepared to fund major repairs and renewal projects. As a result, the condition of the property can deteriorate or you may be faced with substantial charges from the condo to cover repair costs as they occur.

Fortunately there are way to determine the financial status of the condominium, based on the documentation that the condo corporation is obliged to keep, such as annual operating budgets and end-of-year financial statements. An important part of the operating budget is the reserve or contingency fund.

The Reserve Fund

The purpose of a reserve fund is to provide financing for major repairs and renewal projects over the life of a condominium building. The fund essentially ensures that the common elements will be maintained in good shape for the life of the project. The amount required to be in the reserve fund depends upon the condition and life expectancy of all common elements in the building and the estimated costs to replace them over the life of the project. Read more »»

• Bank of Canada’s Carney ponders degree of rate cut - (Reuters) The Bank of Canada has to weigh strong domestic demand against the spillover effects of the slowing U.S. economy when deciding how much to cut interest rates next month, Governor Mark Carney said on Monday. Carney used his first speech since becoming central bank chief on February 1 to convey that he is keeping his options open, suggesting he could potentially reduce the bank’s overnight rate by 50 basis points, as most market players expect.

>> Read the complete article on reuters.ca

• U.S. credit woes seep across the border (Globe & Mail)
  American subprime shemozzle is beginning to squeeze mortgage and funding availability in Canada.

“Canadian chartered banks have been the main source of financing for real estate projects, but they have got caught up in the U.S. subprime mess and have had to write off those investments. Now, they have returned to what is known as balance sheet lending - or traditional mortgage financing. To maintain government-mandated equilibrium between a bank’s equity and its loans outstanding, the banks have had to both call in loans and cancel commitments for new ones, industry observers say.”

“Intense competition for funds has both increased interest rates on mortgages and created a demand for higher cash-to-mortgage ratios, says David Bowden, president of real estate broker Colliers International Canada in Toronto.”

“The credit crunch is having its greatest effect in smaller centres, says Sheila Botting, senior managing director of Canada for the capital markets group at Cushman & Wakefield Lepage Inc.”

>>Read the complete article on Globe and Mail

• Rate cuts likely to trump inflation fears (Globe & Mail)
  The inflation watch is under way this week in Canada and the United States, but investors are betting the U.S. Federal Reserve Board will to continue to cut regulated interest rates despite price pressures, while the Bank of Canada is expected to play some catch up.It’s anticipated that domestic inflation data scheduled for release today will provide plenty of leeway for the Bank of Canada to lower its target overnight rate on March 4.>> Read the complete article on Globe and Mail

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space4lease.com A free network of commercial real estate spaces available nation wide

tremblantliving.com Great rental locations on Mont Tremblant.

therealestatebloggers.com American Real estate bloggers, interesting articles and information.

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TORONTO, Feb. 15 /CNW/ - BMO Bank of Montreal announced today it is
decreasing its residential mortgage rates, effective February 16, 2008. The
new rates are:
Fixed Rates: To: Change:
6 month open 8.90% 0.00%
6 month convertible 7.10% 0.00%
1 year open 9.40% -0.10%
1 year closed 7.25% -0.10%
2 year 7.30% -0.10%
3 year 7.30% -0.10%
4 year 7.19% -0.20%
5 year 7.29% -0.10%
6 year 7.45% -0.10%
7 year 7.65% -0.05%
10 year 8.00% -0.05%
18 year open 9.20% 0.00%

(The interest on fixed-rate mortgages compounds semi-annually, not in advance.)

The Five-Year Protected Variable Rate ceiling changes to 7.29%.

Special Offers(*)
To: Change:
3 year (fixed/closed) 6.23% - 0.10%
5 year (fixed/closed) 6.23% -0.10%
7 year (fixed/closed) 6.38% -0.05%

Homeowner ReadiLine(R)
5-year variable rate closed term 5.50% 0.00%

(*) These special discounted rates are not the posted rates of BMO Bank
of Montreal. Rates are subject to change without notice. Offer may be
withdrawn or extended without notice. Mortgage funds must be advanced
within 90 days of the application

The Resale Market Reaches New Heights in 2007 with Close to 56,000 Transactions

Île-des-Soeurs, January 14, 2008 – The residential resale market reached new heights in 2007 with 55,776 transactions compiled on the Greater Montréal Real Estate Board’s (GMREB) MLS® system. Sales grew by 11% compared to 2006, which is the highest raise in five years.

“The increase in transactions, combined with an inventory of properties for sale similar to 2006, has contributed in maintaining a market that advantaged sellers in 2007,” says Michel Beauséjour, FCA, Chief Executive Officer of the GMREB. “As a consequence, price increases have been sustained, reaching in average 5% to 7% depending on the type of property, which represents two to three times the level of inflation.”

At the geographic level, the increase in sales spread to all sectors and all types of property. Furthermore, price increases were higher outside the Island of Montréal, with Lanaudière taking first place with an average price increase reaching 13%.

“During the last few years, the strong residential real estate market has been sustained by positive job creation, good consumer confidence in the economy and historically low interest rates. As a result, the price of properties in Greater Montréal has doubled since 1998,” says Michel Beauséjour.

For 2007, the volume of sales recorded in the GMREB’s MLS® system reached close to $13 billion, 19% more than in 2006.

Real Estate Snapshots
The condominium is mainly responsible for the resale market’s growth, outclassing the single-family home. In total, 12,251 sales were recorded in the GMREB’s MLS® system, compared to 10,216 in 2006, a 20% increase. The average sale price of a condominium for its part rose by 5% in 2007, settling at $211,000.

With a total of 35,728 transactions compiled in 2007 on the GMREB’s MLS® system, an 11% increased when compared to the 32,196 transactions recorded in 2006, the singlefamily home remains the most popular type of property. The average sale price reached $232,000, a 7% rise in comparison with $216,000 for 2006.

Source The Greater Montréal Real Estate Board www.cigm.qc.ca
The Greater Montréal Real Estate Board is a non-profit organization that brings together most of the real estate brokers and agents who work in the Greater Montréal area. With more than 9,000 members, it is the second largest board in Canada. Its mission is to actively promote and protect its members’ professional and business interests in order for them to successfully meet their business objectives and maintain their predominance in the real estate industry.

Winter. It’s a time of crisp air, gently falling snow, and piles of coats, slushy boots and soggy mittens in your front hall. This season, make your entryway organized and inviting. Here’s how:

Make first impressions count. Give your door a fresh coat of glossy paint, and put down a new doormat. Hang a nice winter wreath or plant an evergreen in a sturdy urn.

Store your stuff out of sight. If you don’t have enough closet space, add storage by hiding a garment rack behind a curtain, using an armoire, installing a coat tree or hall stand, or by trying one of these storage ideas:
- A bench with built-in storage holds your stuff and offers a convenient spot to sit down and put your boots on.
- A small bookshelf with labeled baskets is good for storing small items.
- A chest of drawers can make your front hall look more like a furnished room, and it gives you a surface for photos, a lamp or incoming mail.

Stay in season. Move non-winter items to a different part of your home. Leave some extra space and extra hangers for your guests’ coats.

Tame your shoes. Set a limit to how many pairs each person can keep by the door, and install a shoe rack to keep footwear organized. Avoid putting boots on a mat that doesn’t drain ? they won’t dry properly and the leather will get damaged. A perforated tray with a mat underneath will let your footwear drip-dry.

Hook it. Heavy-duty hooks keep backpacks, scarves, purses and coats off the floor. Hang them at a height where kids can reach them to make it easy for them to put away their things.

Make a place for your misplaceables. How much time do you spend hunting for keys, sunglasses, cell phones and dog leashes? Dedicate a basket or bowl to these important items by the front door, and you’ll never have to search under the couch cushions again.

Design idea 1: Install a hook and small shelf for each person, and stencil their name on the wall beside it.

Design idea 2: Hang an ornate frame and fill the blank space in the middle with small, pretty key hooks.

Floor décor. Offer a warm welcome with a soft, washable rug that doesn’t show dirt easily. Put a mat outside, too; wiping your feet before you go in will mean less muck and less cleaning.

Don’t forget to decorate. Paint your entryway a striking colour, hang a graceful mirror, incorporate family photos or a favourite piece of art, add a table lamp and an accessory or two. Make it welcoming and beautiful. After all, it’s the first place people see when they come into your home.

Source: Royal LePage

OTTAWA, February 4, 2008 — Housing starts reached 228,343 units in 2007, an increase of 0.4 per cent from 227,395 in 2006, according to Canada Mortgage and Housing Corporation’s (CMHC) first quarter Housing Market Outlook, Canada Edition report. In 2008, residential construction will decline to about 211,700 units, given higher mortgage carrying costs. Nevertheless, Canada’s housing market remains strong and 2008 will mark the seventh consecutive year in which housing starts exceed 200,000 units.

“Despite some global financial instability with regards to the U.S. housing market, Canada continues to experience robust employment levels, ongoing income gains and low mortgage rates,” said Bob Dugan, Chief Economist for CMHC. “This has strongly supported Canada’s housing markets. However, housing starts are expected to decrease in 2008 mainly due to recent increases in house prices, which will push mortgage carrying costs higher for home buyers.”

Existing home sales, as measured by the Multiple Listing Service (MLS^®)¹, are poised to experience a very strong year with about 520,000 units in 2007, a 7.6 per cent increase over 2006. In 2008 the level of MLS^® sales is expected to fall by 3.9 per cent to 499,650 units, while 2009 will see an additional decrease to 488,300. Growth in the average MLS^® price has remained high at 10.6 per cent in 2007, mainly because of continued strong price pressures in Canada’s western provinces. However, as most resale markets move toward more balanced conditions, growth in average MLS^® price is forecast to slow to 5.2 per cent in 2008 and 3.8 per cent in 2009.

Read more »»

Location: 1085, St-Alexandre, Montreal.
Size: 6 floors, 55 units.
Prices: $300 per square foot.
Architect: Karl Fischer
Developer: Mark Dichter & Noam Schnitzer
The Scoop:

Five floors feature 12- or 13-foot ceilings, and a wide open floor plan that will make is easy to create large open lofts. The units range in size from 650 feet to 1,200 feet, though some buyers have been buying and combining units. Prices work out to about $300 a square foot. The developers are adding a glass and steel penthouse, which will contain five luxurious two-storey units. Prices for those are in the $1-million range.

For more information visit: www.gillettelofts.com

OTTAWA, Jan. 31 /CNW Telbec/ - Three national associations whose members are central to the investment, management, purchase and sale of real property are calling on the federal government to change capital gains tax policy in the 2008 federal budget to encourage reinvestment. The members of the three associations generate hundreds of billions of dollars of economic activity annually.

The policy change proposed by The Canadian Real Estate Association (CREA), the Canadian Federation of Apartment Associations (CFAA) and the Real Property Association of Canada (REALpac) would support urban regeneration and expand rental housing in Canada by encouraging new investors, and by providing existing owners the opportunity to re-invest because of capital gains deferrals.

The three Associations have completed new research to support the proposal to allow the deferral of capital gains tax and recaptured capital cost allowance when an investment property is sold and the proceeds of the
sale are reinvested in another property within a year.

The research shows that the first-year cost of implementing the proposal would be $415 million, not taking into account offsets from increased economic activity. The group of taxpayers who would benefit most from the change would be those with net incomes of $50,000 or less. The research also shows current tax policy creates a negative “lock-in effect” so investors hold onto old assets to avoid having to pay tax, rather than selling and reinvesting in new assets.

Read more »»