RRSPs: Should you be investing before March 3, 2014?

It’s that’s time of year again – RRSP season is upon us, yet the majority of Canadians are not properly educated on this investment vehicle and if it’s the best option for them.  Everywhere we turn, we are constantly bombarded with advertising messages telling us to buy, buy, buy, and RRSP’s are no exception.  How many of us take the time to really understand what we are purchasing?

Let’s review the basics: despite what we are often led to believe, RRSPs are not the actual investment; they are simply the registration of the account.  It is the registration of the account that dictates how it will be taxed both when the money goes in, and when it comes out. The account itself can hold a variety of different types of investments, such as GIC’s, mutual funds, stocks, or savings accounts, to name a few.  There are several rules surrounding RRSP’s that it is important to be aware of:

RRSP’s basic tax and withdrawal rules are:

1. You are eligible for a tax deduction for the amount of money you contributed to your RRSP in that year. This can be up to 18% of our previous years income, to a maximum of $23, 820 for the 2013 tax year. For example, if someone earned $50,000 before taxes in 2013 and purchases $5,000 worth of RRSP’s on or prior to the deadline on March 3, 2014, they will pay income tax as if they earned $45,000 in 2013. (*allowable contribution amount will differ for someone who is contributing to a pension plan already).
2. The growth within the RRSP is tax deferred.  That is, no taxes are payable on the growth that may be earned until you start to withdraw your funds.
3. When it does come time to take RRSP’s out, the amount withdrawn is taxed at your marginal tax rate at the time of withdrawal. Many retirees expect to earn less in retirement than they did during their working years, so the funds would hypothetically be taxed at a lower tax bracket.  However, in reality, this is not always the case – some retirees find themselves in the same or higher tax bracket during retirement than they did during their working years by the time they consider all sources of income.
4. When the account holder passes away, the RRSP’s will transfer one-time to a surviving spouse (if applicable) who can then access the investment as the new owner.   Upon the death of the second spouse, the entire amount left in their RRSP portfolio is deemed to have been liquidated or withdrawn during the year of their death.  This means that the full amount is then added to their income for the year, and therefore is subject to further taxation prior to the estate being fully settled.  Unfortunately, if a financial plan is not structured properly, up to 50% of the funds could be handed over to the government in the form of taxes and fees.

For some people, it might make sense to purchase an RRSP loan. This strategy can help maximize the tax deduction for those in a high income tax bracket or catch-up on unused contribution room.   Lenders offering the RRSP loans can typically amortize the loan over up to a 10-year period.  However, in most situations the best way to make the loan work for instead of against you is to choose an amount that can be paid back within 12 months.  This lowers the chances of creating a constant cycle of debt, as most people do not want to be paying for their 2013 RRSP’s in 2016!  In addition, applying the tax refund immediately once it’s received towards the outstanding loan balance should be done to help keep things manageable.

It is worth nothing that regardless of where the RRSP is invested and even if a RRSP loan isn’t purchased, once the tax refund is received it ideally should be re-invested or used to pay down debt instead of spent on the newest toy or gadget, or annual vacation.  This will help maximize the growth potential, and play a role in achieving greater financial success. Today and especially in the Vancouver area, fewer people have company-held pensions, therefore, investing and reinvesting your income tax returns in your RRSP’s can be a great avenue to grow your wealth to enjoy your retirement or later years.

What about TFSA’s?

While RRSP’s are a wonderful vehicle for many Canadians, for others they are not necessarily the best option.  An alternate or complimentary investment strategy consideration for many Canadians is the Tax Free Savings Account (TFSA).  TFSA’s are simply another investment vehicle, but the taxation rules are different.  Interestingly, many people are surprised to learn that despite having the words “savings account” in its title, their TFSA can hold the exact same investments that their RRSP can, such as GIC’s, mutual funds, or stocks, amongst other choices. TFSA’s can be a phenomenal tax shelter, when used properly and invested wisely. Here are the basics that everyone needs to know:

TFSA’s basic tax and withdrawal rules are:

1. As of 2014, the maximum available contribution room in the TFSA’s for Canadians over the age of majority is $31,000.  The funds are invested after-tax, and no income tax deduction is given.  In the same example given above with RRSP’s, someone who earns $50,000 annually and invests $5,000 into their TFSA will pay income tax on the full $50,000.
2. Any growth that may be accumulated within the TFSA is tax-free.
3. Since the tax was paid up front, when it comes time to withdraw the funds it is done tax-free.  There is no tax payable!
4. Upon death of the account holder, the proceeds of the account are given to a named beneficiary without any tax implications.

Canadians in the lower tax brackets may find a TFSA makes more sense over investing through an RRSP as they are perhaps not as concerned with receiving tax deductions. For others, a combination strategy could provide a better long-term outcome. Please speak to a financial professional to determine what investment vehicles and strategies will make your money work as hard for you, as you do for it.

Please don’t hesitate to contact me if you have any questions about RRSP’s or TFSA’s and what might make the most sense for you, or if you’d like a complimentary no-obligation review of your current portfolio.

To your financial success,

Jaclyn Carmichael Financial Coach & Educator email: jcarmichael01lsxc@wfgmail.ca phone: 604.888.4934 or 604.220.5719 web: worldfinancialgroup.com/Canada

Steady and Healthy Momentum

For the most part, economists are expecting the national prices to maintain a healthy momentum.  Lower gains over previous years will be realized with the exceptions of Calgary, Edmonton, Toronto and Vancouver.

Housing starts experienced the slowest year since 2009, and the slowest year in more than a decade, not counting the recession year.  Further cooling is expected throughout 2014, but should help to balance the market.

Interest rates have dropped by 10 basis points or more, and could continue downward, but the long-term forecast is for the Bank of Canada to begin raising its main policy rate in the second quarter of 2015.

Alberta experienced a record-breaking 2013 with sales activity and benchmark prices for single-family homes especially in Calgary and the surrounding communities. Toronto rounded out the year with a 14% increase in sales and a 9% increase in prices for the month of December over 2012.  Finally, for the sixth consecutive year, Vancouver has ranked among the top three least affordable markets. At a median home price of $670,300, 10.3 times the gross annual median household income, Vancouver is second behind Hong Kong who’s median home price rose to 14.9 times income.

More highlights from January’s headlines:

OVERALL

• Royal LePage: housing survey shows average price of a home in Canada increased between 1.2% and 3.8% in the fourth quarter of 2013. Standard two-storey home rose 3.6% year-over-year to $418,282, while detached bungalows went up 3.8% to $380,710. Price of a standard condominium rose 1.2% during the quarter to an average of $246,530. CEO Phil Soper says late 2013 saw the housing market transition to “buoyant sales volumes“ and above-average growth.
• Building permits fell by a sharper-than-expected 6.7% in November, more than double the 3.0% pullback expected by analysts, while housing starts dropped to 189,672 units in December, shy of economists’ forecasts for 190,000.
• Statistics Canada: Canada’s new housing price index did not change in November, after a 0.1% rise in October, with prices rising in eight metropolitan areas, unchanged in eight and declining in five.
• Prices in Toronto-Oshawa region were up 0.1% on the month and a tame 1.4% on the year. Vancouver fell 0.2% on the month and 1.3% on the year. Calgary was up 0.4% since October.
• Starts for all of 2013 slowed to 188,200 units, down sharply from 215,000 in 2012 and the lowest full-year tally since 2009, according to Robert Kavcic, senior economist at BMO Capital Markets.  “In fact, outside of that recession year, it was the slowest year for starts in more than a decade. We expect further cooling to about 180,000 units this year, which would reflect balanced overall building activity,” Kavcic said
• Residential construction intentions sank by 7.6% with both single- and multi-family dwellings declining, while the nonresidential sector dropped by 5.2% as institutional and industrial building plans decreased. Commercial building intentions, however, were once again robust, with the value of permits hitting a record level over the past 12 months, according to Kavcic.
• Stephen Poloz, central bank chief: The Bank of Canada should keep its key interest rate on hold until economic data persuades it otherwise. “For us, minimizing the risks of making a big mistake here is what we’re trying to do, and that tells us that we should be holding rates where they are until the data flow changes our mind.”
• The CBC cited Poloz as saying he was not worried by international calls for rate hikes and that his decisions would be based on Canadian economic factors. In November, he disagreed with the OECD’s assessment that rate hikes could start in 2014.
• Poloz: there would be upward pressure on rates this year, but he referred specifically to long-term market rates, not the rate set by the central bank, as the U.S. and global economies strengthen and stimulus is curbed. Adjusting the central bank’s target for the overnight rate, on the other hand, is a tool that is available “but we have to consider in the broader context what impact would it have,” he said. He suggested higher rates would have a negative impact on highly indebted Canadian consumers.
• Canadian Real Estate Association: prices across the country rose 10.4% in December from a year ago to an average of $389,119. Once you hack out Toronto and Vancouver, the increase drops to 4.6%.
• “For the year as a whole, existing home sales rose 0.8%, a pace that is neither too hot, nor too cold but largely in line with our view of a soft landing in the Canadian housing market,” said Diana Petramala, an economist with the Toronto-Dominion Bank.
• Royal Bank lowered rates 10 basis points on two-, three- and five-year fixed rate terms. “Rates were lowered to match competitor pricing. Competitors have been pricing at lower rates for several weeks, and this rate change now puts us in line,” said a spokesperson.
• Canada’s economy, once the envy of developed countries following the global recession, is struggling to gain momentum as households deal with record debts. Low interest rates pushed the nation’s ratio of debt to disposable income to a record 163.7% in the third quarter, according to Statistics Canada, surpassing levels in the U.S. “We’ve learned around the world that when you make the consumer indebted like that, their ability to withstand shocks is dramatically less,” Toronto-Dominion Bank Chief Executive Officer Ed Clark said. “So the economy as a whole is more accident prone, more fragile. Over time, the consumer becomes more fragile and the Canadian economy becomes less competitive,” he said. “That’s worth worrying about.”

PREDICTIONS

• Royal LePage: prices are expected to maintain a “healthy momentum“ this year and rise a projected 3.7% over 2013. “We predict continued upward pressure on home prices as we move towards the all-important spring market.“ Phil Soper,Royal LePage CEO says. “We expect no landing, no slowdown, and no correction in the near-term. Conditions are ripe for as strong a market as we saw in the post-recessionary rebound of the last decade.”
•  “The decline (in building permits) is in line with our expectation that residential construction will soften in the coming year in the face of affordability challenges to a pace more in line with underlying demographics,” CIBC World Markets economist Peter Buchanan said.
• With prices stabilizing, economists expect new construction to cool further in 2014.
• Finance Minister Jim Flaherty told CTV television: there would be some pressure to tighten (rates) because of the U.S. Federal Reserve scaling back its bond-purchasing program.
• Falling bonds yields could push mortgage rates lower in coming weeks as banks compete in the spring housing market, traditionally the strongest real estate period of the year.
• Analysts in a Reuters poll have forecast the Bank of Canada will begin raising its main policy rate in the second quarter of 2015.
• Things aren’t holding up quite so well on the new home housing front, however, Canadian housing starts, which started to cool in the latter part of 2013, are expected to continue their decline into 2014 as affordability, and a significant decline in condo construction, continues to impact sales.
• One ReMax realtor, with a respectable record of calling the ups and downs of Toronto’s condo market, in particular, blogged this week that he’s heard from so many buyers fed up waiting for prices to drop, he expects to see 95,000 sales transactions this year across the GTA.
• Royal LePage: the “moderate” price growth that defined the Vancouver market in 2013 is likely to continue through 2014 with prices project to rise 4.4 per.
• Bryan Yu, an economist for Central 1 Credit Union: “You’re not going to see the volatility we saw last year (in Vancouver), though there will be a slight drop off in momentum into the first quarter (of 2014).” Central 1’s forecast is for Metro Vancouver’s property sales to increase by six per cent in 2014, mortgage rates to increase but remain relatively low and employment growth to continue in pace with a stronger economy that will be influenced by improving conditions in the United States. For 2014, Central 1 Credit Union’s forecast is for prices to edge up about 1.5 per cent.
• Shifts in 2014 (Vancouver) real estate prices will also be influenced by the types of properties people are buying, with lower-priced townhouses and condominiums expected to make up a bigger share of the market, according to Lance Jakubec, a senior market analyst for Canada Mortgage and Housing Corp. While Jakubec does not make forecasts for individual communities within the region, he added that it will be interesting to watch how markets along the Evergreen Line rapid transit corridor perform over 2014.
• “It’s very reasonable for prices to ease or even fall,” said Benjamin Tal, deputy chief economist with CIBC World Markets, who rules out doomsday scenarios that would see prices drop 25%.
• Toronto-Dominion Bank issued a note January 14, 2014 with a continued call for a soft landing in the housing market.
• Urbanation: The GTA new condo market is expected to see a slow, steady rebound in sales through 2014 anticipating 15,500 sales in 2014.  They also expect more deals from developers keen to clear the record backlog of 19,004 unsold units that remained as of the end of 2013.
• Brace for much lower gains — or even price slumps — in many of Canada’s major cities by the end of 2014, says Marc Pinsonneault, senior economist with the National Bank of Canada. The notable exceptions will be Calgary, which is expected to lead the country in 2014 with price gains averaging some 3.5 per cent, followed by Edmonton at 3.1 per cent, Toronto at 3 per cent and Vancouver at 2.5 per cent, year over year, says Pinsonneault.
• Richard Cho, senior market analyst in Calgary for Canada Mortgage and Housing Corp., said sales in 2014 are expected to post another increase.
• Fitch’s Global Housing and Mortgage Outlook, mortgage volumes in this country “may fall slightly” as government efforts to tighten mortgage rules since the financial crisis exert downward pressure on demand. One reason Fitch believes Canada is not facing a rough road in 2014 is because it expects unemployment to remain stable at around 7% and the limited use of risky mortgage products, curtailed in this country unlike the U.S. and other jurisdictions by strong government regulation.

VANCOUVER

• Vancouver Real Estate Board:  sales of detached, attached and apartment properties in 2013 reached 28,524, up 14%from 25,032 sales in 2012. The total for 2013 was the third lowest for the region in the last 10 years.
• Vancouver has the second least affordable housing market, according to a recent study that took median home prices in nine wealthy nations and divided them by gross annual median household income. The only city that ranked higher in the Demographia International Housing Affordability survey was Hong Kong. Homes in Vancouver, at a median price of $670,300, cost 10.3 times income. It was the sixth straight year the city ranked among the top three least affordable markets according to the study, which fingered land use regulations as partly to blame for a shortage of affordable housing.
• Vancouver, the priciest market in the country, saw an increase of 36% in sales in 2013 from 2012 in homes selling for $2-million and up.

TORONTO

• Toronto Real Estate Board: December home sales in Toronto were up almost 14% and prices were up nearly 9% compared with a year earlier.
• Multiple listings service totaled 4,078 for the month, up from 3,582 in December 2012. Sales for all of 2013 totalled 87,111, up about 2% compared with 85,496 in 2012.
• The average price for a home sold in December was $520,398, up 8.9% compared with $477,756 in December 2012.
• New listings for the Toronto market in December were down by almost 4% over the same period.
• Royal LePage: prices should climb a further 3.9 per cent in 2014 over average gains of 5.1 per cent in 2013 — as a shortage of lowrise homes in the 416 region continues to drive up average sale prices.
• Resale condo transactions, especially in the more affordable 905 regions, saw the biggest increase of any sector of the housing market: Sales were up 27.8 per cent in December year over year — 46.1 per cent in the 905 regions (accounting for just 374 transactions) and 20.7 per cent in the 416 region.
• The biggest price gains were in the City of Toronto, where sale prices were up about 7.6 per cent to $367,376, according to TREB’s figures
• A shortage of listings has plagued the GTA market for more than three years now as baby boomers stay put and homeowners opt to renovate their homes rather than pay hefty real estate fees and land transfer taxes for properties that, in many cases, end up in bidding wars that have further pushed prices into the stratosphere.
• Urbanation: prices for sold units grew by 1.3% on an annualized basis in the fourth quarter to an average of $543 per square foot, which is the slowest pace of growth since 2005.  Urbanation said sales totalled 4,299 in the fourth quarter, up 12% from a year ago and the best quarterly result since the fourth quarter of 2012. But it was not enough to stop a 22% slide for 2103 when compared to 2012.
• Resale condominium apartment sales reached 15,698 units in 2013, up 2.7% from 2012. Condo resale prices jumped 2% in 2013 reaching $418 per square foot.
• Rents continue to grow and were up 4.2% in 2013
• The sale of both new homes and new condos hit their second-lowest levels in a decade in 2013. 30,054 new units — 12,256 of them lowrise homes, and 17,798 of them highrise condos — went up for sale across the GTA last year, 22 per cent less than in 2012 and close to the record low recorded in 2009 as the industry held its breath in the wake of the Great Recession.
• In Toronto, where a luxury home is said to start at $1.5-million, sales were up 18% in 2013 over 2012. The most expensive home sold in the city last year went for $13.4-million for 21,000 square feet in the city’s prestigious Bridle Path area.

CALGARY

• CMHC reported that total housing starts in the Calgary region closed 2013 slightly down from a year ago despite an increase in the single-detached sector. Total starts for the Calgary CMA were 12,584 last year, down from 12,841 in 2012. But the federal agency said the single-detached market saw starts rise to 6,402 from 5,961 the year before. In the multi-family sector, starts dropped from 6,880 in 2012 to 6,182 in 2013.
• Statistics Canada: total building permits in Alberta of $1.5 billion were up 3.3 per cent from last year but down 2.8 per cent from the previous month. Residential permits of $875.5 million rose by 18.4 per cent on an annual basis but dropped by 8.7 per cent from October. Non-residential permits of $590.3 million were down 13.1 per cent year-over-year but up 7.5 per cent month-over-month.
• Cochrane and Okotoks both experienced record years in 2013 for MLS residential sales activity
• CREB: total sales in communities surrounding Calgary rose to 4,440 units in 2013, a hike of nearly 12 per cent. In the city, MLS sales rose by nearly 11 per cent to 23,489 transactions.
• “Lifestyle preferences play a role in demand,” said Ann-Marie Lurie, CREB’s chief economist, in a statement. “Single-family homes in surrounding communities tend to provide newer and larger homes at a lower cost than in Calgary.”
• CREB: 554 homes were sold in Cochrane in 2013, a nine per cent increase over 2012. Prices rose six per cent from 2012 with an average annual single-family benchmark price of $403,183.
• CREB: Okotoks had 699 sales, up 19 per cent from 2012. Single-family benchmark prices in Okotoks rose 4.8 per cent to $385,308.
• CREB: Sales in Airdrie rose by 15 per cent to 1,321 units. The single-family benchmark price averaged $357,583, which was a seven per cent increase.
• CREB: The single-family benchmark price in Calgary in December was $472,200, up 8.60 per cent from a year ago.
• “There’s huge demand for single-family houses in Calgary proper, and that’s meant price increases. All those young people who are moving to Calgary might be getting priced out of the market a bit, so they’re increasingly looking for condos and duplexes, but also more affordable single-family homes in these other communities.” Scott Bollinger, broker with the ComFree Commonsense Network said “Improving transportation accessibility is also a key factor. As the Ring Road actually becomes a true circle, it’s connecting Cochrane and Chestermere and Airdrie and Okotoks to Calgary like never before, and it’s allowing people who choose these communities to access work and play in the city without sacrificing their lives to the road.”
• Calgary Real Estate Board: A slowdown in net migration this year should help ease some of the housing demand pressure in the city but overall MLS sales are forecast to rise by 3.6 per cent with prices going up by 4.28 per cent.
• Sales of upper end homes, a luxury home starts at $1-million in Calgary, climbed 34% in 2013 from 2012. Edmonton is a little less pricey for a luxury home with the starting price $750,000 but sales jumped 32% over the same period.

Facebook: A decade worth billions

Mid January  in the Times Business & Money online there was a feature on a Princeton research study stating: Facebook Is About to Lose 80% of Its Users.  Not even two weeks later, Facebook Inc.’s Market Value jumps to nearly $155 Billion and Sheryl Sandberg, Facebook’s COO, is now one of the youngest female billionaires ever.

The study released from Princeton Researchers on January 17, 2014 titled “Epidemiological modeling of online social network dynamics” takes epidemiological models to explain user adoption and abandonment of online social networks (OSNs). OSNs are compared to infectious diseases that spread between people before eventually dying out.  Using Google search query data and MySpace as a validating model, the researchers suggest that Facebook has already reached the peak of its popularity and has entered a decline phase, which will undego a rapid demise, losing 80% of its peak user base between 2015 and 2017.

Analysts are not shy about sharing their concerns regarding the potential Facebook decline as the “younger teens” demographic has reached saturation and are looking for alternatives. Zuckerberg’s efforts to stay current and impressionable have included buying out the completion (e.g. Instagram) or competing head on (e.g.. Snapchat), which by the current market value, seems to be working.

Currently, 750 million Facebook users login every day and mobile is rapidly expanding amongst OSNs.  More than $1 billion of the $2.6 billion in revenues for Facebook came from mobile advertising. Even in the mortgage industry, mobile searches have been on the rise and Facebook remains the most popular social media platform for mortgage-related research.

It’s hard to believe that with1.23 billion members, nearly half of the global population with internet access, Facebook could basically collapse and dye out within 2-3 years.  But if a 23 year old can become a billionaire off one idea 10 years ago, then we’re in a day-in-age where anything is possible.

Happy 10th birthday Facebook. Wising you continued success over the next decade.

References Calgary Herald. URL http://www.calgaryherald.com/business/Happy+Birthday+Facebook+Billions+dollars+billions+users+decade/9459832/story.html.  Accessed 2014-02-02 International Business Times. URL  http://www.ibtimes.com/facebook-incs-nasdaq-fb-market-value-jumps-nearly-155-billion-strong-earnings-report-1551726. Accessed 2014-02-02 CMHC. URL http://www.cmhc.ca/en/hoficlincl/moloin/cosu/loader.cfm?csModule=security/getfile&PageID=278459. Accesses 2014-02-02 CNN: URL http://money.cnn.com/2014/01/22/technology/facebook-sandberg-billionaire/. Accessed 2014-02-02 Time:  http://business.time.com/2014/01/21/facebook-is-about-to-lose-80-of-its-users-study-says/?xid=newsletter-weekly. Accesses 2014-02-02

Jennifer Dupuis

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BUSINESS BASICS

Started as a Realtor in: 2011

Specialization:  The community she lives in, South Meridian, White Rock.

One-piece of advice for your clients: Talk to a mortgage broker and get a pre-approval.

Why RE/MAX Fraser Elliott Group? I am very proud and excited to have joined the Fraser Elliott Group as the Designated Buyer’s Specialist. The Fraser Elliott group is a group of energetic professional Realtors that motivate each other to succeed in this business. The group is the number one Real estate group in Delta. We are in the top three ranked teams in the Greater Vancouver Real Estate Board and in the top 100 in the world for Remax. Our Team is a part of Remax Progroup Realty (Delta).

Ongoing real estate education: Beyond the industry standard training, Jennifer uses Twitter and other social media avenues for research and to read up on new stories Attending trade shows and speaker series, keep her current on the latest industry trends.

"Jennifer is dependable, accountable, very creative, energy to spare, has great enthusiasm, is always available, loyal, friendly and the most important gets results.  Our experience with Jennifer was great – she will be our realtor again.  Anyone who hires Jennifer will not be disappointed". -Jacqueline Farmer, Client

Q & A

1.    What differentiates you from the 11,000 licensed real estate agents in the Greater Vancouver area? I have a marketing degree, which is the education to back up my work, but it’s my customer service that’s the key differentiator.  I work with my clients molding my services and personality to their expectations and needs.  I’m workaholic, personal, and approachable, but I also incorporate a number of other things that impacts my client’s experience:

• I focus on research.  I want to dig everything up on property that I can, for both buying and selling. The research allows me to ensure I am negotiating the proper pricing for a purchase or sale.
• I’m not afraid of competition and I want to build relationships with other Realtors, which helps give an overall smoother experience for the client(s).
• I appreciate my clients with appreciation events.  I’ve hosted a breakfast, winery tour, and given great prizes like trips to whistler and massage packages.
• I build strategic partnership with other professionals in the industry to support and connect with people in my community and provide quality referral for my clients.

2.    What was your favorite success story? Every single client is a mini success story.  In some cases, you can search for a year to find the perfect home.  Home is sanctuary and I can help my clients find it – that’s success.

3.   What inspired you to be a Realtor? I have always been in sales and worked in entrepreneur type positions.  I was an event and wedding planner and worked in the tourism industry as a consultant.  When I made the move to real estate, it was because it was the right time for our family for me to take the jump.  It’s been great ever since.  I love it and I’ve proven I can do it.

4.    How do clients describe you and what’s your best feature? I believe they see me as very diligent, hardworking, and passionate person.  My best feature would be my confidence.

5.   What do you love most about your job? I love looking at homes.  Seeing the different designs and character and what people put into their home to make it theirs, all the creativity.  I often come home and tell my husband all the things we need to incorporate into our home.  I love being a buyer’s agent.

6.   What is the hardest part of your job? Right now, it’s finding the perfect home when there are not enough listings to match the demand of the buyers.  I had to flyer areas where my clients wanted to move to see if anyone would be interested in selling, and its disappointing when there’s no interest.

PERSONAL SNAP SHOT

About: Jennifer is married and a young mother of two kids, a girl (7) and boy (5). She loves to act and dance, be a “show boat” as she describes it.  She’s passionate about her community and getting involved in a variety of levels. When it comes to real estate, Jennifer doesn’t have a typical client, but she really enjoys working with out of town clients; visiting the homes on their behalf and composing a full report on each home with photos.

Interests: Dance, acting, supporting her kid’s school, getting involved with the people in her community, and aspires to get involved with the White Rock Players Club.

Likes (If you had more time, what would you do more of):  Travel.  I would love to go away twice a year to an exotic destination and travel Europe.

Loves (can’t live without): My family, wine, and music.

Something unique about Jennifer: A couple of things:

1. If she wasn’t a Realtor she believes she would be an outside sales rep for a tour operator
2. When she’s driving, she loves to blare Hip Hop and R&B.

Contact Jennifer

Surprise! The market didn’t do what it was predicted to do

The unpredictability of 2013 has added yet another surprise. Housing sales dipped in November but the decline expected to follow failed to materialize. Canada’s housing market is on track to close on a stronger note than 2012, defying expectations. Twenty-five out of 26 largest Canadian cities recorded price gains, a complete contrast to predictions made by industry experts earlier this year.

The market it expected to remain resilient through 2014, that is if interest rates remain low. RE/MAX Realty is predicting that sales will increase by 2% and prices by 3%. Canadian Real Estate Association is calling for sales growth of 3.7% with average price increases of 2.3%.

For Calgary, their November year-over-year home price growth, best in the country with more than double the national average, is expected to forge strongly into 2014. Toronto’s 3-year challenge with property shortages isn’t expecting to change, and Vancouver’s laneway house popularity is hoping to help families with affordable housing options.

More highlights from December’s headlines:

OVERALL

• Stats Canada: Credit-market debt such as mortgages increased to 163.7% of disposable income, compared with a revised 163.1% in the prior three-month period, Mortgage borrowing climbed 1.8% to $1.13 trillion.
• Stats Canada: Over the last five years, the growth in mortgage debt has averaged 1.7% per quarter, while consumer credit debt growth has averaged 1.2%.
• Stats Canada: The amount of equity that owners have in their homes as a percentage of real estate dropped to 69.3% in the quarter from 69.5%.
• Stats Canada: National net worth increased 2.1% to $7.50 trillion in the third quarter. On a per capita basis, the gain was to $212,700 from $209,200.
• Deutsche Bank Report: Canada has the most overvalued housing market among 20 developed countries. The new report comes as real estate giant Re/Max predicts an “exceptionally healthy” year for real estate in 2014. Deutsche Bank estimates that house prices in Canada are overvalued by 60 per cent. That’s an average of two different measures: Home prices compared to rent (88 per cent overvalued) and home prices compared to income (32 per cent overvalued). The analysis compares house prices to historical norms.
• Canada’s housing market is on track to close out 2013 on a stronger note than last year, defying the expectations of economists just a few months ago.
• Canada named Evan Siddall, a former official with Goldman Sachs Group Inc., as chief executive officer of the country’s government-owned housing agency, CMHC.
• CREA chief economist Gregory Klump said while interest rates remain relatively low, the Canadian market should remain “well behaved” based on current trends. “Most housing markets are in balanced territory, including in many large urban centres where sales are below peaks reached earlier this year.
• Don Lawby, the chief executive of Century 21 Canada, agrees that so far the Canadian housing market seems to be holding its own, if no longer taking off. “The collapse has not happened and it looks like there is a stable market and people are still out there looking for real estate,” said Mr. Lawby. “In my mind what we have now is a very stable market. People have heard this story of a balloon that was going to pop for so long,” said Mr. Lawby. “People carry on as long as their employment carries on. Maybe there is a postal worker out there today not going to buy a house but most people are in a stable environment.”
• CIBC deputy chief economist Benjamin Tal said he could see a little bit of negative sales numbers in December or January but concurs that the market is showing more resiliency than many anticipated.
• CMHC Report: Growth in owner-occupied condominiums has exploded over the last three decades. In 1981, there were 171,000 owner-occupied condo units but that figure grew to 1,154,000 by 2011.
• CMHC Report: Women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65% of owner occupants in 2011. The female factor is even more prevalent among older women with 76% of those 55 and older living alone women. Among lone-parents, women make up 84% of condominium owners.
• CREA: November’s home sales dipped slightly from October but were up substantially from the same month last year, when the industry was going through a soft patch attributed to changes in federal rules for mortgage lenders and borrowers.
• “In staggering contrast to the dire forecasts early this year, precisely one of the 26 largest cities in the country has reported a drop in average prices so far this year — Victoria, with a minuscule 0.6 per cent sag,” said Doug Porter, chief economist with BMO Capital Markets. “All of the other 25 cities have recorded single-digit price gains, with the median city posting a non-threatening 3.6 per cent rise. “When judged by total sales volumes, a measure that combines both price changes and the number of units sold, the hottest markets this year have been Calgary, Edmonton, and, against all expectations Vancouver. All three reported double-digit volume increases, the only cities in that category.”
• CREA: By November, year-to-date sales for the entire country were up 0.2% from the previous year with 433,678 transactions. Prices climbed 5% over the first 11 months of the year from the same period a year earlier to an average of $382,111.
• A report found Calgary’s median family income at $100,500. Three other cities surveyed had median family incomes of $72,400 in Toronto, $72,800 in Vancouver and $73,200 in Montreal.
• The ratio of house prices to annual family income in Calgary was 4.1. It was also 4.1 in Montreal, 6.6 in Toronto and 8.3 in Vancouver. The mortgage service costs as a percentage of family income were: 23.1 in Calgary, 39.3 in Toronto, 50.2 in Vancouver and 23.1 in Montreal.

PREDICTIONS

• “As the housing market stabilizes over the coming quarters and income growth picks up, the debt-to-income ratio is expected to remain close to its current, still elevated, level,” Leslie Preston, an economist at TD Economics.
• Central 1 Credit Union says higher mortgage rates in the next three years will restrain housing sales in Ontario as a whole, but not cause a market correction. Ontario home prices will rise about 4% a year through 2016, down from a decade-long annual average of about 6%. Toronto condo market will slow as builders delay new construction in the face of weaker demand. Ontario’s overall rental apartment vacancy will hold steady at 2.6% through 2014, before declining to less than 2% in 2016.
• The Canadian Real Estate Association’s 2013 sales projections have been increased slightly upward in Ontario and the four western provinces and that prices have been generally firmer than expected.
• Re/Max says that nationally, home sales are expected to climb 2% to 475,000 units next year after a 3% increase to well over 453,000 projected for 2013 when all the numbers are in. At the same time, the value of an average Canadian home is forecast to escalate 3% to $390,000 in 2014 after rising 4% to $380,000 in 2013, according to a survey of the group’s independent brokers and affiliates. Re/Max says its optimism is largely based on an improved outlook for Canada next year which is expected to see the country enjoy economic growth second only to the 2.8% rate of the United States among Group of Seven countries. Although there are several factors that are expected to contribute to rising housing prices on a national basis, one of the most pressing is build out, Re/Max said. “As such, the availability of low-rise homes relative to the population is expected to contract, placing further pressure on prices,” it said.
• Helmut Pastrick, chief economist of Central 1 Credit Union, expects Toronto resale house prices to continue to climb by a more modest, but still healthy, 4 to 5 per cent through 2016 and double over the next 25 years fuelled by a shortage of land for new development and rising population levels. “Housing in Toronto is expensive but not overvalued, especially from a long-term perspective,” Pastrick said in a forecast. “Today’s record high prices will seem inexpensive in 25 years.”
• While that spending spree has already shown signs of a letup, demand for houses continues to outstrip supply which could see Toronto price gains “temporarily rise” to as much as 7 per cent, year over year, in early 2014, says Amna Asaf of Capital Economics.
• Real Estate Association said that it now expects the average price of houses sold over the Multiple Listing Service to have risen by 5.2 per cent this year, to $382,200. Heading into 2013, CREA had been expecting the average price to rise just 0.3 per cent; it became even more pessimistic in March when it revised its forecast and called for a 0.2-per-cent decline, to $362,600.
• CREA’s prediction for the number of houses that will change hands this year is now 458,200, which would be a 0.8-per-cent increase from 2012. In contrast, at the outset of 2013, CREA was expecting sales to fall 2 per cent, and by March it was expecting sales to fall by 2.9 per cent. CREA is calling for sales to grow by 3.7 per cent in 2014, while it expects average prices to rise by 2.3 per cent.
• CREA said there was a drop off in the fourth quarter but sales are expected to be up 0.8% this year. In a new forecast, it is now predicting an even stronger rebound with a 3.7% increase in sales.
• Nationally, CREA is projecting 458,200 homes will be sold through its members this year — eight-tenths of a per cent more than in 2012. CREA also anticipates next year will be even stronger, with 475,000 homes nationally. The updated numbers are slightly ahead of a forecast in September by the association that predicted 449,900 homes sold this year and 465,600 in 2014.
• CREA: the 2013 projected national average price is $382,200, a 5.2 per cent increase from last year. The projected national average price for 2014 is $391,100, a 2.5 per cent increase from this year.
• CREA: Alberta this year is projected to reach 66,300 units, which is a 9.8 per cent hike from the previous year and the best growth rate in the country. Sales will rise an additional 3.5 per cent in 2014 to 68,600 units.
• Across Canada, CREA is forecasting 0.8 per cent growth this year to 458,200 sales and 3.7 per cent growth in 2014 to 475,000. As for the average sale price, CREA is projecting it to rise by 4.9 per cent this year in Alberta to $381,100 followed by 3.4 per cent growth, the best in Canada, in 2014 to $393,900. Across Canada, the association is forecasting 5.2 per cent price growth this year to $382,200 and 2.3 per cent growth in 2014 to $391,100.
• “A tweak to amortization or requiring a little more down payment is not enough to significantly change the state of the market. The big change will occur when the cost of money starts to rise and that won’t happen in 2014,” says Mr. Soper, Chief executive of Royal LePage Residential Services
•  “The investor is a big part of the condo market and rents are still rising. It’s not that difficult to find a tenant given the condo vacancy rate is quite low,” says the economist, noting the issue for buyers today is rent is simply not covering all the costs of owning a condo. “If prices start to fall, we could see investors getting antsy and start to sell their units which could aggravate the market,” said Bank of Montreal senior economist Sal Guatieri, who nevertheless says the risk is low because a spike in rates seems unlikely.
• Toronto: With a surprisingly unpredictable 2013 coming to an end, economists are weighing in on what the future could hold. While opinions vary somewhat, there seems general agreement that house price gains will slow — if not slip by the end of 2014 — and the rental vacancy rate should edge up slightly as a record number of new condos come on the market.

VANCOUVER

• Of Canada’s four largest real estate markets, Vancouver has the highest number of vacant condos, with 1,934 units completed and unabsorbed.
• The city of Vancouver says demand for laneway houses continues to grow, with 348 permits to build the rental dwellings issued in 2013. Laneway housing, also known as granny flats, coach or carriage houses and “Fonzie suites,” are usually one-and-a-half or two stories high, and typically built above or next to detached garages in narrow lots or laneways.
  • Laneway housing is just one part of a series of consumer-driven housing trends that is changing the provincial residential construction sector, according to the Canadian Home Builders’ Association of B.C. That includes strong demand for smaller, cheaper units, dense housing along transit lines, and residential space in shopping complexes.
  • More than 1,000 laneway house permits have been issued in Vancouver since they became legal in 2009. That year there were just 18 permits handed out. But by 2012 a record 350 permits had been issued, up from 192 in 2010 and 229 in 2011.
  • “We’re seeing this as a family-based solution. Often we see the parents build them for their adult children. So it’s not a silver bullet for the affordable housing strategy but it is one piece in trying to confront the (housing) crisis.” Says city councillor Geoff Meggs
  • Laneway houses were first approved by Vancouver back in 2009 as a way to boost the supply of affordable rental housing in a landlocked city where the vacancy rate has hovered at less than 1 per cent for years and the average two-storey detached house costs more than $1 million. But they’re now exploding in popularity for other reasons, says Brian Jackson, general manager of planning and development for the City of Vancouver: They’re allowing baby boomer homeowners to downsize but yet age in their own communities. They’re also enabling echo kids to stay close to home and raise their kids in neighbourhoods they otherwise couldn’t afford. In fact, the program has worked so well that the City of Vancouver has now amended its bylaws so that every single-family lot can now have three units — a basement apartment and upper suite in the main house, as well as a laneway home in the backyard. Already he’s working with one B.C. credit union that’s approving so-called “mixer mortgages” that allow shared ownership of a property. He foresees a day where two buyers will jointly own both the main house and a laneway home through something akin to a condominium agreement, and perhaps even swap homes as their personal circumstances change.

TORONTO

• TREB: Toronto home sales rose 13.9% to 6,391 units in November from the same month the year before. The average price of homes sold during the month rose 11.3% to $538,881
• Despite concerted efforts by Ottawa to cool the housing market, the average price of a home in the GTA hit $538,881 last month, up from $484,208 in November of 2012.
• But what’s really pushing up prices — in addition to exceptionally low interest rates — is the worsening shortage of properties for sale that has plagued the Toronto market for more than three years now. The number of new “for sale” signs dotting the region was down 4.4 per cent in November, year over year, and month-end active listings were down 12.1 per cent, according to TREB.
• TREB: The number of new “for sale” signs dotting the region was down 4.4 per cent in November, year over year, and month-end active listings were down 12.1 per cent.
• The average sale price of a detached house in Toronto was a whopping $855,188 in November.
• Condo sales showed somewhat mixed results depending on where people were buying. Sales remained strong in both the city and suburbs, up 12.7 per cent and 14.2 per cent respectively.
• Resale condo prices were up 10 year cent, year over year, in the 416 region, but they were down just slightly, 0.4 per cent, in the 905 regions.

CALGARY

• 22,489 MLS sales in the city, up 10.85 per cent from a year ago. New listings of 31,366 are up by 0.75 per cent but active listings of 3,034 are down 19.27 per cent. So far this year, the median selling price of $400,000 has increased by 5.26 per cent while the average sale price of $456,680 has risen by 6.60 per cent.
• BMO Economics report: new home construction has picked up but housing starts have barely kept pace with an exploding population. “Inventories of new homes are very low, while benchmark prices are climbing the fastest among major cities and have now all but retraced the 16 per cent collapse from 2007 to 2009.
• Guatieri, senior economist with BMO Capital Markets, said that despite “heady price gains” they remain reasonable at about four times the median family income and mortgage costs “consuming a manageable” 23 per cent of earnings. “About half of the increase in prices is supported by rising income. Hourly wages in Alberta are up 4.4 per cent year over year in the first 10 months of the year, double the national rate,” he said. BMO said immigrants and young Canadians are flocking to the city, drawn by better job prospects, faster wage growth, and healthier housing affordability than in Vancouver and Toronto.
• (December) Sales in the city are actually higher than new listings this month making it a strong sellers’ market right now.
• Calgary Real Estate Board: total MLS sales in the city were 546 transactions, up 14.95 per cent from the same period a year ago. New listings of 511 are up by 1.19 per cent. Active listings of 2,865 are down 18.77 per cent.
• The tight market has pushed sale prices higher this month than a year ago. The median price of $406,000 is up by 7.98 per cent while the average sale price has risen by 0.91 per cent to $457,758.
• CREB: the last time the city has had more sales than listings was December 2012. Before that, it was 2006. Right now, it’s looking like this December will be the 12th time since 1990 when sales eclipse new listings and seven of those have been in December.
• Canadian Real Estate Association: Calgary year-over-year home price growth was the best in Canada in November and more than doubled the national average.
• CREA: MLS sales across Canada in November rose by 5.9 per cent to 32,411 units. They were up by 18.7 per cent in Calgary to 2,173 units and increased by 13.1 per cent in Alberta to 4,563 sales.
• BMO: If there is a market that can support further price gains it is Calgary, which has been a major benefactor of net-immigration growth. Alberta attracted 53,000 more people in the last year than it lost.