Well isn't that a turn of events. The banks are asking for the government to impose rules rather than them making proper changes to their own lending policy. Well now that they see their own weakness maybe they will ask the government to lower the rates allowed to be charged on their charge cards. Ha Ha That one is far too profitable so they will keep it under wraps for a long time I am sure. Too bad the government watch dogs don't bite the banks in retaliation!
Neil "Mortgage Man" McJannet
The government seems prepared to sit pat with the current set of mortgage rules -- the Finance minister viewing, with some irony, banker calls for tighter ones.
“I find it a bit off that some of the bank executives are taking the position that the Minister of Finance or the government somehow should tell them how to run their business,” Jim Flaherty told reporters just outside Ottawa Thursday. “It’s their market. It’s not my market.
“They decide what they want to charge in interest rates.”
While analysts are still parsing through those comments, a consensus is emerging that the government will hold off on further tightening of the country’s mortgage rules, at least for now.
TD’s chief economist, among others, had urged Flaherty to use his budget address next week to announce one of three moves meant to slow down demand for housing.
On Thursday, the Minister hinted at none of those – a shorter amortization, a higher minimum down payment or new stress tests for borrowers.
“With respect to tightening up the mortgage insurance market we’ve done it three times,” he said. “If we have to tighten it some more we will. The new housing market produces a lot of jobs in Canada so there’s a balance that needs to be addressed. I’d like the market to correct itself, quite frankly, if it can.”
That may not please some property investors, quietly hoping for tighter mortgage rules and any uptick in demand for rental units that might result from tougher qualifying terms.
Monday, March 26, 2012
Wednesday, March 21, 2012
How Canadians can boost home value through renovation
By Gail Johnson http://ca.finance.yahoo.com/blogs/insight/canadians-boost-home-value-renovation-132555909.html
With the popularity of home-decorating shows like Trading Places soaring, suddenly everyone's an interior designer. But from a real expert's point of view, where are home-owners' renovation dollars best spent?
"Kitchens and bathrooms are the best place to start," says Toronto's Howie Track, owner of Traxel Construction, which specializes in high-end residential and commercial renovation and construction. "Kitchens and bathrooms are the first places people look, and if a new buyer sees that the kitchens and bathrooms have been done, then there's less for them to do."
Figures from the Appraisal Institute of Canada support Track's claim. According to the Ottawa-based property-valuation association, bathroom and kitchen renovations continue to be the most popular on the list of perennial home improvements, with a recovery rate of between 75 and 100 percent.
The organization defines "recovery rate" as the likely increase in a home's resale value that could be attributed to a renovation. If a $10,000 renovation increases a home value by $6,000, for example, the recovery rate is 60 percent.
Landscaping vies for top spot too, according to Track. "If you can wow potential buyers with some curb appeal and the kitchen or bathrooms have also been done, then selling will be that much easier," he says.
When it comes to renovating older homes, Track suggests updating wiring and plumbing. "Most knowledgeable home buyers will see this as a definite bonus. That said, many first-time homebuyers may not appreciate the work that has been done."
Approximately 1.9 million households in 10 major Canadian centres did renovations in 2010, totalling almost $23 billion. The average cost of renos was nearly $13,000.
According to the AIC's most recent data, energy-efficient upgrades are another popular focus for renovations, with an average recovery rate of 61 percent.
Other renovations that have higher recovery rates include the use of non-neutral interior paint colours (67 percent), the addition of a cooking island in the kitchen (65 percent), and the installation of a Jacuzzi-type bath separate from the shower stall (64 percent).
The biggest mistake people make when it comes to renovating is expecting Champagne-style results on a beer budget.
"Clients will say to me, 'Get a few prices and we will go with the cheapest,'" Track explains. "In construction, you get what you pay for, and if you only consider price, then you are asking for trouble. It's important not to overpay, but quality trades come at a cost. I always tell my subtrades that I want good work at a fair price."
Above all, planning is crucial. It takes at least two to three months to plan for a simple kitchen renovation, Track notes, urging people to read magazines and clip pictures of everything from layouts to paint colours.
"People who don't plan always run into problems," Track says. "People need to hire a good architect and a good designer to help them make informed decisions on materials and design. So many times I have clients who don't want to spend money on a good architect or designer, and inevitably this leads to problems. The better you plan, the less the chance of making mistakes and the better the chance of coming in on time and on budget.
"Try to make as many decisions as possible before you start," he adds. "By planning, you'll have a better idea of how long the job will take and how much it will cost. Also, make informed decisions about materials and do some research."
Budgeting is another basic, as is asking contractors for references and asking for examples of past projects.
"If you set a realistic budget for a job, you have a better chance of not exceeding it," Track says. "It's common for contractors to low-bid a job so that they get it. Once the job is underway, the client has no alternative but to pay all additional costs that arise in order to get the job done. There's a square-footage or unit price for almost everything in construction, so the only real difference between contractors should be the fee they charge."
Renovations that add features to a home that others in the neighbourhood already have, such as a second bathroom, have higher recovery rates than features not shared by adjacent properties, according to the AIC.
Poorly done renovations may have no positive impact or could actually reduce the value of a home.
Recovery rates and resale value aside, the AIC can't put a cost on professionally done renovations when it comes to home owners' sense of satisfaction and enjoyment. That's priceless.
With the popularity of home-decorating shows like Trading Places soaring, suddenly everyone's an interior designer. But from a real expert's point of view, where are home-owners' renovation dollars best spent?
"Kitchens and bathrooms are the best place to start," says Toronto's Howie Track, owner of Traxel Construction, which specializes in high-end residential and commercial renovation and construction. "Kitchens and bathrooms are the first places people look, and if a new buyer sees that the kitchens and bathrooms have been done, then there's less for them to do."
Figures from the Appraisal Institute of Canada support Track's claim. According to the Ottawa-based property-valuation association, bathroom and kitchen renovations continue to be the most popular on the list of perennial home improvements, with a recovery rate of between 75 and 100 percent.
The organization defines "recovery rate" as the likely increase in a home's resale value that could be attributed to a renovation. If a $10,000 renovation increases a home value by $6,000, for example, the recovery rate is 60 percent.
Landscaping vies for top spot too, according to Track. "If you can wow potential buyers with some curb appeal and the kitchen or bathrooms have also been done, then selling will be that much easier," he says.
When it comes to renovating older homes, Track suggests updating wiring and plumbing. "Most knowledgeable home buyers will see this as a definite bonus. That said, many first-time homebuyers may not appreciate the work that has been done."
Approximately 1.9 million households in 10 major Canadian centres did renovations in 2010, totalling almost $23 billion. The average cost of renos was nearly $13,000.
According to the AIC's most recent data, energy-efficient upgrades are another popular focus for renovations, with an average recovery rate of 61 percent.
Other renovations that have higher recovery rates include the use of non-neutral interior paint colours (67 percent), the addition of a cooking island in the kitchen (65 percent), and the installation of a Jacuzzi-type bath separate from the shower stall (64 percent).
The biggest mistake people make when it comes to renovating is expecting Champagne-style results on a beer budget.
"Clients will say to me, 'Get a few prices and we will go with the cheapest,'" Track explains. "In construction, you get what you pay for, and if you only consider price, then you are asking for trouble. It's important not to overpay, but quality trades come at a cost. I always tell my subtrades that I want good work at a fair price."
Above all, planning is crucial. It takes at least two to three months to plan for a simple kitchen renovation, Track notes, urging people to read magazines and clip pictures of everything from layouts to paint colours.
"People who don't plan always run into problems," Track says. "People need to hire a good architect and a good designer to help them make informed decisions on materials and design. So many times I have clients who don't want to spend money on a good architect or designer, and inevitably this leads to problems. The better you plan, the less the chance of making mistakes and the better the chance of coming in on time and on budget.
"Try to make as many decisions as possible before you start," he adds. "By planning, you'll have a better idea of how long the job will take and how much it will cost. Also, make informed decisions about materials and do some research."
Budgeting is another basic, as is asking contractors for references and asking for examples of past projects.
"If you set a realistic budget for a job, you have a better chance of not exceeding it," Track says. "It's common for contractors to low-bid a job so that they get it. Once the job is underway, the client has no alternative but to pay all additional costs that arise in order to get the job done. There's a square-footage or unit price for almost everything in construction, so the only real difference between contractors should be the fee they charge."
Renovations that add features to a home that others in the neighbourhood already have, such as a second bathroom, have higher recovery rates than features not shared by adjacent properties, according to the AIC.
Poorly done renovations may have no positive impact or could actually reduce the value of a home.
Recovery rates and resale value aside, the AIC can't put a cost on professionally done renovations when it comes to home owners' sense of satisfaction and enjoyment. That's priceless.
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