DundeeWealth Economic Forecast

The march edition of the Economic Monitor by DundeeWealth has been released. Interesting read as it tries to forecast both short and long term economic implications of the situations in Libya and Japan. Below are excerpts from the report as it relates to Real Estate.

The BANK OF CANADA is expected to remain on hold over the summer, raising rates again in September, December and March 2012 – by 25 basis points each time. While economic growth is expected to accelerate (a spillover from accelerating US growth), domestic growth is likely to be only modest, with high consumer indebtedness and the recent tightening of mortgage regulations curbing domestic demand somewhat. Domestic credit growth has been flat (apart from home mortgages) and inflation has been lower than expected, notwithstanding fairly strong wage growth. Core inflation fell to just 0.9% in February, well below the Bank’s 2.0% target. The core rate is not expected to exceed 1.5% until near year-end. The Bank is likely to be wary of increasing interest rates before the Fed does as it could cause a further rise in the Canadian dollar, which would further dampen domestic growth prospects.

The FED Funds target rate is likely to remain in the 0% to 0.25% range for the remainder of this year, though the Fed may encourage a rise to the top of that range toward September whilst it contemplates the prospects for growth and employment, and inflation into 2012. At this point we have the Fed raising rates by 25 points in January and again

in April 2012. The Fed is expected to end its current round of quantitative easing as scheduled in June, even though the pace of economic growth is improving and is set to benefit further as a result of the 2011 payroll tax holiday and a new measure to allow much faster depreciation this year. Despite the improving growth picture, unemployment remains high and core inflation very low, although rising energy and food prices have already pushed headline CPI up to 2.1%.

The CANADIAN DOLLAR is expected to trend relatively flat, somewhat above parity, during the next six months or so, then move higher. While the Fed’s quantitative easing program could help boost commodity prices and the loonie further in the near term, a modest slowdown in emerging market economic growth is likely to serve as a counterweight. Mid-east unrest is a wild card. Extended political troubles in Libya and elsewhere could add to upward pressure on oil prices and also the loonie, whereas an early resolution could see oil prices and the Canadian dollar both fall. In any event, periodic commodity price corrections are expected in the first half of the forecast.

The complete report can be found here

Spring Home Maintenance Checklist

Spring

• After consulting your hot water tank owner’s manual, carefully test the temperature
  and pressure relief valve to ensure it is not stuck. Caution: This test may release hot
  water that can cause burns.
• Check and clean or replace furnace air filters each month during the heating
  season.
• Ventilation system, such as heat recovery ventilator, filters should be checked
  every two months.
• Have fireplace or wood stove and chimney cleaned and serviced as needed.
• Shut down, drain and clean furnace humidifier, and close the furnace humidifier damper on units with central air conditioning.
• Switch on power to air conditioning and check system. Have it serviced every two or
  three years.
• Clean or replace air-conditioning filter, if applicable.
• Check dehumidifier and drain — clean if necessary.
• Turn OFF gas furnace and fireplace pilot lights where possible.
• Have well water tested for quality. It is recommended that you test for bacteria every
  six months.
• Check smoke, carbon monoxide and security alarms, and replace batteries.
• Clean windows, screens and hardware, and replace storm windows with screens. Check screens first and repair or replace if needed.
• Open valve to outside hose connection after all danger of frost has passed.
• Examine the foundation walls for cracks, leaks or signs of moisture, and repair as
  required.
• Ensure sump pump is operating properly before the spring thaw sets in. Ensure
  discharge pipe is connected and allows water to drain away from the foundation.
• Re-level any exterior steps or decks that moved as a result of frost or settling.
• Check for and seal off any holes in exterior cladding that could be an entry point for
  small pests, such as bats and squirrels.
• Clear all drainage ditches and culverts of debris.
• Repair and paint fences as necessary — allow wood fences to dry adequately
  before tackling this task.
• Undertake spring landscape maintenance and, if necessary, fertilize young trees

Good Luck

Calgary Real Estate Market Forecast & Predition

According to many real estate experts, the Canadian housing market is expected to stabilize in 2011 returning to more normal long-term growth patterns after a decade-long bull run.

The housing sector has avoided two extreme bubble-and-crash scenarios over the past three years when resale prices dropped sharply in 2008, then quickly rebounded as low mortgage rates and lower prices supported the turnaround.

Record low interest rates fuelled a home buying spree in 2009 that helped pull the Canadian economy out of recession and pushed home sales back to record levels. The market cooled rapidly over the summer of 2010 as the Bank of Canada began hiking interest rates, though recent data have indicated the market may be stabilizing.

In 2011, interest rates are expected to hike further as the economy improves. While still at historical lows, any hike in interest rates have big effects on mortgage rates. If interest rates are raised too quickly, this will further dampen real estate prices. On the other hand, if the government decides to lower the rates once again, as unlikely as this may seem, then home sales might surge slightly.

Government and institutional lending policies will also affect real estate prices. As banks and governmental policies become increasingly strict, more people will be turned down for mortgages. At the very least these potential home buyers will need to choose from more modest homes if their mortgage is declined.

In 2011, Canada will experience an overall decline of 0.9% in home prices. Not all provinces will feel the effects of fluctuating real estate prices equally. Some provinces will have a more profound move in housing prices than others.

While real estate prices might remain fairly stable, buying activity is expected to slow down significantly. The Canadian Real Estate Association expects a 7.3% decline in home sales. This means that homeowners in a panic to sell may have to drop their prices substantially in order to liquidate. Others may need to wait longer than in previous years to sell.

The drop-off in home sales comes from an anticipated slowing of economic growth along with a reduction in consumer spending. Less free floating capital means fewer large purchases.  Ample inventory levels, steady demand, and moderate growth, both in terms of sales and prices, will characterize the market in 2011.

Federal Government changes to Mortgage Guidelines

It looks as though the federal government has decided to tighten Canadian mortgage guidelines once again. Here are the key changes: · Mortgages with amortization periods longer than 30 years will no longer qualify for government-backed mortgage insurance, which is required for buyers with less than a 20% down payment on a home. The previous limit was 35 years. · Maximum amount Canadians can borrow against the value of their homes, lowered to 85% from 90% on a refinancing · Federal government backing for home equity lines of credit, or so-called HELOCs, is removed · Adjustments on amortization and refinancing limits coming into force on March 18 · Government backing on HELOCs will be removed as of April 18 Here is the related article taken from Sunday's Financial Post: The federal Conservative government is expected on Monday to introduce new rules aimed at toughening up mortgage lending in an effort to curb further growth in record household debt levels. The key change Finance Minister Jim Flaherty is likely to unveil is a cut in the maximum amortization period, to 30 years from 35 years. Mortgages with amortization periods longer than 30 years will no longer qualify for government-backed mortgage insurance, which is required for buyers with less than a 20% down payment on a home. Government sources also told the National Post Mr. Flaherty is expected to lower the maximum amount Canadians can borrow against the value of their homes, to 85% from 90%, and remove federal government backing of home equity lines of credit, or so-called HELOCs. The sources, who spoke on condition of anonymity, add the minimum down payment, at 5%, will remain as is. Further, there will not unveil any plan to target condominium purchases by requiring monthly condo fees be added to the list of expenses that is measured against income to decide whether a buyer can afford a mortgage. The changes to the country's mortgage rules - the second in as many years - emerge amid rising concern about the record levels of household debt, which measured as a ratio of money owed to disposable income nears a startling 150% as of the third quarter of last year. That surpasses the level of debt held by American households, whose appetite for borrowing helped stoke the financial crisis of a few years ago. The Bank of Canada recently warned debt levels are growing faster than income, and the risk posed by consumer indebtedness to the domestic economy would continue to escalate without a "significant change" in how consumers borrow and banks lend. Bank of Canada governor Mark Carney said policymakers have a "responsibility" to look at the benefits of pre-emptive action. Joining the chorus have been chief executives at the big banks, most notably Ed Clark at Toronto-Dominion Bank, in publicly advocating for tougher mortgage standards. Last Friday, Prime Minister Stephen Harper acknowledged his government was considering changes to the rules governing mortgages. He said the government "remains concerned about growth in the level of household debt and will look at taking prudent steps to moderate that growth. We will look at what steps may or may not necessary. In February of 2010, Mr. Flaherty moved to toughen up the mortgage rules amid worries that Canada was in the midst of a housing market bubble. The reforms, since introduced, compelled borrowers to meet standards for a five-year fixed-rate mortgage, even if the buyer wanted a shorter-term, variable rate loan; reduced the amount Canadian can borrow against their home, to 90% of the property value from 95%; and require purchasers of rental properties to issue a 20% down payment as opposed to 5%. The moves played a role, observers say, in slowing down real estate activity. The new changes, though, reduce even further the amount people can borrow against their homes, to 85%. Also, the changes target HELOCs, which Mr. Flaherty cited as a source of concern in a recent interview. Home-equity lines of credit surged 170% over the past decade, or twice the rate of mortgage growth, and now represent 12% of overall household debt. With the new rules, Ottawa will no longer back the HELOC, as it was doing up until now through mortgage insurance. Instead, sources say, the government will signal that the banks are on the hook for any default linked to a HELOC it issued. The cut in the amortization period, or the time required to pay off the home loan, follows a 2008 move by Ottawa to stop insuring 40-year mortgages. While the federal government looks to curb borrowing, economists say the Bank of Canada may have to follow by raising its key interest rate sooner rather than later. The central bank issues its latest rate statement on Tuesday and it is expected to hold its benchmark rate at its present 1% level as signs indicate the economy may be benefiting from renewed business and consumer confidence in the United States. Stewart Hall, economist at HSBC Securities Canada, said the extraordinarily low-rate environment "provides all the incentive to consumers to borrow and spend and none of the incentive to save. You can try to [regulate] that away but that is apt to be fraught with significant frustration."

Fixtures, Chattels and Flat Panel TVs

Recent dramatic price reductions in the cost of plasma, LCD and LED televisions have resulted in flat panel TVs becoming some of the most popular electronic devices. Today you would be hard pressed to find a household without one or more flat panel televisions and at least one of these will likely be mounted in an elevated position on a wall by means of a mounting bracket.

The question that arises is how should flat panel televisions be dealt with in a real estate transaction?

For reasons that will be discussed in greater detail in this article, if you have your hearts set on removing a mounted television when you move out, then you’d better be listing this item as a “fixture” not remaining with the property. On the other hand, if you want that wall mounted television and bracket, then, as the buyer, in the offer to purchase you should be specifying these items as a “chattel” to remain with the property on closing. Anything else, and in particular remaining silent about this item in the contract, is likely to give rise to disappointment and hurt feelings on possession day.

Relevant provisions in the standard form contract

A number of years ago AREA’s standard form contracts introduced the plain language terms “attached” and “unattached” goods to replace “fixture” and “chattel”. The key provision in the Residential Real Estate Purchase Contract that deals with this issue is paragraph 1.1 which states that:

“The Property is the Land, Buildings, Attached Goods (unless excluded) and included Unattached Goods located at (municipal address):.................”

If clauses 1.3 and 1.4 are left blank, then the contract includes everything that is attached to the property and excludes (the seller is entitled to remove) everything that is detached from the property. Clauses 1.3 and 1.4 are provided to enable the parties to deviate from the default provision. Most commonly one will find standard kitchen appliances listed in clause 1.3 (unattached goods to be included) as “stove, fridge and dishwasher”. This is problematic because failing to be specific in terms of the make, model and colour of the appliances can lead to substitutions of appliances by sellers prior to possession day. Such substitutions are difficult to prove and therefore remedy. Clause 1.4 (attached goods to be excluded) is used less frequently, but might indicate “the heirloom dining room chandelier” as being an attached good that the seller intends to remove from the property on closing.

Clearly the key to completing these clauses correctly is an understanding of what constitutes “attached” and “unattached” goods.

The Common Law

All available court precedents that have addressed this issue have done it in the context of “fixtures” and “chattels” rather than the new terminology. I expect, however, that the same analysis would apply. The clearest rules that I could find were set out in a British Columbia decision (Royal Bank of Canada v. Maple Ridge Farmers Market Ltd. S.C.B.C. 1995, No. A950858) as follows:

1. Any item which is unattached to the property, except by its own weight, and can be removed without damage to ... (the premises) that will need repair, is a chattel.

2. Any item which is plugged in and can be removed without any damage or alteration is a chattel.

3. Any item which is attached even minimally (i.e., it cannot simply be unplugged) is a fixture. For example, if an item requires the removal of screws, nails, bolts, detachment of plumbing, or the cutting and capping of hardwire, it will be a fixture.

4. If a piece of equipment is attached to a structure, a part of which could be removed but which would be useless without the attached part, then the entire piece of equipment is a fixture.

The foregoing makes it clear that any appliance which is simply plugged into an electrical outlet but otherwise stands on its own is a chattel (unattached good) but the moment that the appliance is screwed or glued or otherwise attached to a cabinet or wall it becomes a fixture (attached good). It also makes it clear that if a part of an appliance can be removed (such as attachments to a vacuflow or remote controls for a garage door opener) but would be useless without both parts, then all of the parts are considered to be a fixture.

Analysis

Where does the foregoing leave us with respect to common appliances and the flat panel TV?

Stove: could be an attached or unattached good depending on whether it is free standing and only plugged into an electrical outlet, or built in or wired directly into the electrical system.

Cook top: will usually be wired directly into the electrical system or gas line, and as a result is an attached good.

Refrigerator: can be either free standing or built in or, potentially, directly tied into a water line if it has a water cooling or ice making feature and, as a result, could be either a chattel or a fixture.

Dishwasher: needs to be connected to the water supply and may be wired directly to the electrical lines (rather than plugged in) and, in addition, will likely have some screws attaching it to the cabinets, and, as a result, will be an attached good.

Microwave oven: can either be a free standing chattel (if it is simply standing on a ledge) or a built-in fixture (if it has venting grills attached to both the appliance and the cabinets).

Garbage compactor: unless there are some screws to hold it in place, will usually be a free-standing appliance.

Washer and Dryer: may be either attached or unattached goods depending on the nature of the connection of the water lines to the washer and the exhaust vent from the dryer.

Garage door opener: is always a fixture as the motor is bolted to the ceiling of the garage and connected to the garage door. The remote controls are an integral part of the whole as they are useless without the motor.

Ceiling fan: is always an attached good as it will be screwed to the ceiling or the electrical box.

Vacuflow system: is always a fixture due to the motor being attached to the wall and the system pipes, and the attachments are an integral part of the whole.

Wall-Mounted Panel Television: First of all, there is no question that the mounting bracket is an attached good as it will be screwed directly into the wall. However, the television itself is more problematic. Unlike the power head of a vacuflow system, the television could be removed from the bracket and still function and be useful on its own. However, rarely will a wall-mounted television simply hang on a bracket by its own weight. Usually there will be some degree of attachment to the bracket by screws, bolts or safety pins. This would make it appear to be more of an attached rather than an unattached good.

Conclusion

In order to avoid misunderstandings and problems on possession day, where doubt exists about any goods being attached or unattached, it is best to list such goods in either 1.3 or 1.4 depending on what the intention of the parties may be. Frankly, even where there is no doubt at all about an item being a “fixture”, there is no harm in a buyer including it under clause 1.3 in order to avoid a misunderstanding on closing.

courtesy of Lubos K. Pesta

7 Ways To Improve Efficiency in The Workplace

As we start to get into the colder and darker winter months most Canadian companies will find it increasingly more difficult to keep your team motivated and efficient. Here are some tips that managers and employers can do every day to keep their employees motivated.

1. Establish step by step milestones. When working towards a goal, having small steps to accomplish before reaching the goal is critical. such as, if you wish your sales team to create 30 contacts over their workday, show them that they just have to make five contacts each hour. This makes the goal more sizable and easier to grab and hold.

2. In instances where there is lots of time being wasted doing things that must not be done, such as browsing the Internet, take away the risks. such as, you have a presentation to finish but you keep discovering yourself browsing online. Instead of doing that, get down to the park to work. There is no Internet and you can get the project done.

3. Tackle the hardest tasks first. That way, there is no worry about procrastinating with them and instead, they are done and taken care of leaving more time for the necessary tasks.

4. There will be days when there just isn't enough time. What must be done? increase efficiency by focusing on the most necessary things. Keep in mind the Pareto principle that 80 percent of the value of any event will come from the 20 percent effort that's put towards it. Concentrate on that 20 percent.

5. Stay organised and get rid of clutter. Cluttered spaces often means cluttered minds. It will hold you back from achieving your unsurpassable purpose.

6. Offer rewards to those who accomplish the purpose. These do not have to be big things but they must be something that they wish. such as, if a team is working on a big project, offer to take them to lunch if it's completed prior.

7. Use resources. If the team has the necessary resources on hand to finish the task, they are more likely to be able to do just that. Encourage them to do this to increase their efficiency.

These are several tips that you can incorporate into the day to day tasks to accomplish your purpose. Ultimately, by increasing the ability to perform the task at the best level will enhance the ability of the workers to do well in the long term as well as the short term. That means benefits for everyone.

Good luck.

Calgary Buyers’ Remain Cautious

Calgary Buyers’ Remain Cautious

Sales of million dollar plus homes a bright spot in 2010 market

Calgary, November 1, 2010 – Home sales in the city of Calgary were down month-over-month in October 2010, showing signs that buyers still remain cautious, despite signs of economic recovery. Year-over-year sales continued to trend lower in the month of October, according to figures released today by the Calgary Real Estate Board (CREB®).

The number of single family home sales in the month of October 2010 shrank by 7 per cent at 888, compared with September 2010, when sales were 958. The number of condominium sales for the month of October 2010 was 310. This was a decrease of 15 per cent from the 366 condominium transactions recorded in September 2010.

Year-over-year, the number of single family homes sold in October 2010 in the city of Calgary were down 31 per cent. In October 2009, single family home sales totalled 1,285. Condominium sales saw a decrease of 48 per cent from the same time a year ago. In October 2009, condominium sales were 601.

“Buyers remain cautious, perhaps waiting to feel a little more confidence in Calgary’s economic growth and their own job security,” says Diane Scott, president of CREB®.

“We believe economic recovery will build momentum into 2011 as the outlook for oil and gas and other sectors continues to improve. This, coupled with low interest rates and improved affordability, should eventually help to stimulate Calgary’s housing market,” adds Scott.

The average price of a single family home in the city of Calgary in October 2010 was $444,744, showing a 3 per cent decrease from September 2010, when the average price was $460,278, and a 4 per cent decrease from October 2009, when the average price was $462,465. The average price of a condominium in the city of Calgary in October 2010 was $287,793, showing a 1 per cent increase from September 2010, when the average price was $284,028 and no significant change over last year, when the average price was $289,155. Average price information can be useful in establishing trends over time, but does not indicate actual prices in centres comprised of widely divergent neighbourhoods, or account for price differentials between geographical areas.

The median price of a single family home in the city of Calgary for October 2010 was $387,900, showing a 1 per cent decrease from September 2010 when the median price was $390,000. This was a 5 per cent decrease from October 2009, when the median price was $410,000. The median price of a condominium in October 2010 was $255,000, showing a 4 per cent decrease from September 2010, when the median price was $265,000, and a 3 per cent decrease from October 2009, when it was $263,500.

All city of Calgary MLS® statistics include properties listed and sold only within Calgary’s city limits. The median price is the price that is midway between the least expensive and most expensive home sold in an area during a given period of time. During that time, half the buyers bought homes that cost more than the median price and half bought homes for less than the median price.

“Our average price is being buoyed by more sales in the million dollars plus category. Despite a slowdown in certain market segments, homes sold in the city of Calgary at a million dollars or more have actually seen an increase of more than 15 per cent when compared to the same time one year ago. This boost in sales is, indeed, a bright spot in our current market,” says Scott.

Single family listings in the city of Calgary added for the month of October 2010 totalled 1,765, a decrease of 22 per cent from September 2010 when 2,252 new listings were added, and showing a decrease of 3 per cent from October 2009, when 1,819 new listings came to the market.

Condominium new listings in the city of Calgary added for October 2010 were 721, down 22 per cent from September 2010, when the MLS® saw 921 condo listings coming to the market. This is a decrease of 16 per cent from October 2009, when new condominium listings added were 859.

“We are seeing some decline in the number of new listings coming on to the market. A continuing decline in supply will help bring the market into balance,” says Scott.

“We believe we will see a tempering of our inventory levels, as some sellers offer marginal reductions in prices, or others choose to pull their home off the market for a period of time,” notes Scott. “Homeowners should consider speaking with their REALTOR® about their current marketing strategy—there are always options in every market.”

“Overall, we’re cautiously optimistic that Calgary’s economic recovery will pick up as we move into 2011—but in-migration will be needed to fuel a sustained recovery in Calgary’s housing market,” says Scott.

courtesy of CREB.