Ottawa Housing Market Soars Into Spring!

Looks like spring is off to a fabulous start Ottawa!

Members of the Ottawa Real Estate Board sold 1,499 residential properties in March through the Board’s Multiple Listing Service® system compared with 1,161 in March 2009, an increase of 29.1 per cent.

Of those sales, 327 were in the condominium property class, while 1,172 were in the residential property class. The condominium property class includes any property, regardless of style (i.e. detached, semi-detached, apartment, stacked etc.) which is registered as a condominium, as well as properties which are co-operatives, life leases and timeshares. The residential property class includes all other residential properties.

“The spring market kicked off early and strong this year, possibly boosted by the unseasonably warm weather and absence of snow in March,” said Board President Pierre de Varennes. “Inventory is still lower than at this time in 2009, but has begun to increase slightly in recent months,” he added.

The average sale price of residential properties, including condominiums, sold in March in the Ottawa area was $329,767, an increase of 15 per cent over March 2009. The average sale price for a condominium-class property was $240,409, an increase of 15.1 per cent over March 2009. The average sale price of a residential-class property was $354,698, an increase of 15.1 per cent over March 2009. The Board cautions that average sale price information can be useful in establishing trends over time but should not be used as an indicator that specific properties have increased or decreased in value. The average sale price is calculated based on the total dollar volume of all properties sold.

This is an amazing start for the 2010 Spring/Summer market. Sales will continue to grow in the next few months!

NOW is the time to buy or sell..

Your Real Estate Professional,

Mary-Anne

Source: The Ottawa Real Estate Board

Make the Most of Green Upgrades

As energy conservation becomes more of a concern for both government and consumers, REALTORS can better serve their clients by knowing more about heating system upgrades and government grant programs for them.

Clients who are interested in upgrading their heating systems can take advantage of the Ontario Home Energy Savings Program and the federal ecoEnergy Retrofit program which provide grants for retrofitting their homes. Homeowners can receive up to a combined maximum of $10,000 from both the provincial and federal government in grant money.

Only homes that have undergone a residential energy efficiency audit by an energy advisor certified by Natural Resources Canada will be eligible for grants under the ecoEnergy Retrofit program. So what’s involved?

Check for Leaks and Drafts: To qualify for federal grants and provincial rebates, homeowners must complete two home energy assessments: one pre-renovation and one post-renovation. Only renovations that begin after the initial assessment qualify. Renovations need to be completed by the earlier of either 18 months of receiving the pre-retrofit evaluation report or by March 31, 2011.

A typical energy audit consists of a walk-through to assess the home’s insulation, heating and cooling systems and other energy uses. The home’s ventilation, leaks and drafts are then identified using a “blower door” depressurization test. An evaluation report is produced and the advisor provides an EnerGuide rating label for the home. The energy advisor will submit the file to NRCan, who will then transfer the file to Ontario to process the audit grant cheque.
Once the audit is completed, the homeowner can choose which (or all) of the recommendations he or she wishes to implement. On completing the renovations, the homeowner should contact the energy advisor to perform the post-retrofit evaluation, and then submit the grant application. The homeowner should receive a grant cheque within 90 days of the post-retrofit evaluation.

All renovations, whether completely by the homeowner or a contractor, should be documented with receipts, photos and product literature to ensure full credit is received. After participating and completing the program, homeowners can register for another eligibility period in the program and continue with additional renovations.

Only energy advisors certified by NRCan and employed by licensed service organizations can conduct energy audits under both programs. Licensed organization can be found on the NRCan website at www.nrcan-rncan.gc.ca

Grants Available: For a list of grants available check www.nrcan.gc.ca

Aside from the rebates (up to a maximum of $10,000), the actual savings from participating in the program depend on the home’s condition and the type of upgrades chosen. Participants typically reduce their energy use by up to 30 percent. This translates into a savings of $450 on a $1500 annual heating bill.

If you ever have any questions feel free to email me at mgillespie@kwottawa.ca

Your Real Estate Professional,
Mary-Anne

Source: Ontario Real Estate College

Important 2010 HST Deadlines!

The implementation of the Harmonized Sales Tax is looming and how it will affect homebuyers depends on specific dates.

After July 1, 2010, consumers begin paying the HST, a 13% blended tax comprising 5% GST and 8% PST on the majority of goods and services throughout Ontario.

Here is a brief summary of key facts and dates relating to home purchases:
For homebuyers of resale homes, there is no HST on the purchase price, however there will be new HST on many services required, like real estate commissions, legal fees, home inspections and so on, which have suggested will increase the average costs to purchase and sell by more than $2000 per transaction.

For buyers of newly constructed homes where homebuyers take occupancy or ownership of new residences (including condominiums) before July 1, 2010, HST does not apply.

For contracts entered into after June 18,2009 and before July 1, 2010, and occupancy and ownership occur after June 30, 2010, HST does apply.

For contracts entered into before June 19,2009, where homebuyers both close and occupy new residences (including condominiums) before or after June 30, 2010, the HST will not apply.
There is an enhanced rebate program for HST on new homes. Purchasers entitled to the GST portion of the rebate will now be entitled to a PST rebate as well.

Effectively, the PST portion of the rebate is 75% of the provincial portion of the HST on purchases up to $400,000 to a maximum of $24,000, which is the same as saying the tax increase of 8% is reduced by 6% to 2%. So on the first $400,000 there is a 2% increase ($8000) and every additional $100,000 in purchase price will see an additional non-refundable $8000 of tax.

Homebuyers should make sure the HST and the rebate will be handled by their builder in the same way as the GST rebate was previously.

Please note, however, the homebuyer may be eligible for a PST Transitional Housing Rebate when construction is started before July 1, 2010 but closing takes place later.

The PST Transitional rebate is a short-term program intended to help purchasers recover the cost of PST embedded in the purchase price. The amount of the rebate depends on how complete the home is at July 1. Buyers should make sure their builders will help them apply for the transitional rebate.

Please also note that for some mysterious reason, the PST Transitional Housing Rebate does not apply to new condominium units.

If you have any questions feel free to email me at mgillespie@kwottawa.ca

Your Real Estate Professional,

Mary-Anne

Source: Riopelle Grenier

Breaking News Release- Canadian Government Takes Action to Strengthen Housing Financing

The Honourable Jim Flaherty, Minister of Finance, today announced a number of measured steps to support the long-term stability of Canada's housing market and continue to encourage home ownership for Canadians.


"Canada's housing market is healthy, stable and supported by our country's solid economic fundamentals," said Minister Flaherty. "However, a key lesson of the global financial crisis is that early policy action can help prevent negative trends from developing."


The Government will therefore adjust the rules for government-backed insured mortgages as follows:
Require that all borrowers meet the standards for a five-year fixed rate mortgage even if they choose a mortgage with a lower interest rate and shorter term. This initiative will help Canadians prepare for higher interest rates in the future.


Lower the maximum amount Canadians can withdraw in refinancing their mortgages to 90 per cent from 95 per cent of the value of their homes. This will help ensure home ownership is a more effective way to save.


Require a minimum down payment of 20 per cent for government-backed mortgage insurance on non-owner-occupied properties purchased for speculation.


"There's no clear evidence of a housing bubble, but we're taking proactive, prudent and cautious steps today to help prevent one. Our Government is acting to help prevent Canadian households from getting overextended, and acting to help prevent some lenders from facilitating it," said Minister Flaherty. "If some lenders aren't willing to act themselves, we will act. These measures demonstrate the Government is committed to taking action when necessary to support the long-term stability of a sector that is so vital to our economy and the financial well-being of Canadian families."

These adjustments to the mortgage insurance guarantee framework are intended to come into force on April 19, 2010.

Source: Mortgage Brokers Ottawa

Mandatory Home Energy Audits

Just a little update!

Members should be aware that regulations for mandatory home energy audits have not yet been created and there is currently no schedule for implementation of that section of the Green Energy Act. The pertinent regulations may be drafted in the upcoming session of Provincial Parliament. Members will recall that a waiver clause was inserted in the legislation, thanks to lobbying efforts by the Ontario Real Estate Association and our own Government Relations Committee, which will allow a buyer to waive, in writing, his or her right to an energy audit. The Board will keep an eye on this issue and advise members when the regulations are created and an implementation date is set.

Mary-Anne


Source: The Ottawa Real Estate Board

Buyer's Beware of Restrictions on Income Properties!

Many homebuyers consider purchasing a property with an existing or potential for a second suite. First-time homebuyers in particular often hope to take advantage of the extra income a second suite, often a basement apartment, can generate. Financial advantages can be great, but the buyer needs to know the legal implications.

Whether a suite is a legal second suite will depend on building code and fire code issues and municipal zoning bylaws. Although bylaws across Ontario are generally similar, each municipality has its own variations. Any landlord that violates the bylaws faces fines of up to $50,000 and one year in prison. REALTORS® should encourage their clients to visit a municipality’s website, or to speak to a lawyer located in the area.


If a buyer intends to create a second suite, he needs to determine whether the home qualifies under the bylaws of the specific municipality. If the home does not meet these requirements, the potential buyer must determine whether he is willing to make the necessary changes to create a legal apartment. A building permit is always needed, even in cases where construction will not be taking place.


If a home currently has a second suite, it is important to determine whether the existing unit meets the municipality’s requirements. The municipality will inspect the unit to determine whether it is fit for habitation and whether it meets established standards. Both new and existing units require a General Inspection for Fire Code Compliance.


The cost of retrofitting a home depends on the home’s condition. Assuming a renovation expense of $25,000 and net rental income of $500 a month, the return on investment will be 24 per cent. The investment will pay itself back in just over four years.


Rent collected from a second suite must be declared as income. However, landlords can deduct direct expenses (directly related to operating the rental unit, e.g. replacing appliances) and indirect expenses (costs shared with the entire house, e.g. utilities and mortgage interest) needed to operate the suite. Direct expenses are 100 per cent deductible; indirect expenses are deducted on the portion of the home assigned to the rental unit.


Landlords can also deduct capital cost allowance (CCA), commonly known as depreciation, from their income. CCA is permitted on any long-term purchase, such as renovations or appliances. The consequences of claiming CCA must be considered carefully. The equity earned when selling a principal residence is not taxed. However, once CCA is claimed, the area dedicated to the second suite is no longer considered personal residence. Therefore, a homeowner would forego any tax benefits from the sale of the property on the second suite portion of the home.


As in any transaction, REALTORS® need to be sure to provide their clients with information that is accurate and not misleading.


If you have any questions please feel free to contact me at mgillespie@kwottawa.ca


Your Real Estate Professional,


Mary-Anne


Source: OREA Newsletter 2010

**Hot News for East Enders and Orleans**

The other night I was with our local councillor Bob Monette and he announced that Orleans is the host of the Carivibe Celebration!

Orleans will be hosting it for the first time for the Nations Capital!!

Carivibe is the kick off to the summers most extravagant Caribbean celebration! A parade with amazing costumes and huge beach party at Petrie Island.

First hand I saw a sample of the performance with steel drums and amazing costumes. It was full of energy to say the least.¸

There will be so much amazing Caribbean culture showcased at the Island I can`t think of a better place!

For further information see me or go to www.carivibe.com to win free tickets to this outstanding event!

Another great reason to move to Orleans!!

Mary-Anne