Four out of ten respondents, 44 per cent, said that they are planning to make major renovations to their home within the next two years. Only 26 per cent said that they would not be making any changes to their home, and 29 per cent stated that they haven’t made plans either way in regards to renovations.

According to the survey, the majority of homeowners (93 per cent) say that they know how they are going to finance home renovations. Most homeowners (62 per cent) will be using cash savings, while 29 per cent say that they will be using a line of credit.

Other forms of financing for home renos included credit cards, government assistance, bank loans, RRSP and other investments, mortgage refinancing, money borrowed from friends and family, and second mortgages. A small percentage, 6 per cent, of Canadians said that they do not know how they will pay for their renos; and an even smaller amount is using other forms of financing for their renos.

David Stafford, Managing Director of Real Estate Secured Lending at Scotiabank says that while it’s easy to get swept away by tile samples and new appliances, budget and financing the project should always be at the forefront of homeowner’s minds when making changes.

“From painting a room to replacing your kitchen, financing a renovation should be based on your goals with budget and timeline being key to the whole process,” says Stafford. “The top three things to remember are: understand what you can afford, have a budget, and stick to your plan.”

But what will homeowners be spending all that money on? Kitchens are still the most popular renovations to be made to homes, followed closely by bathrooms. Basements round out the bottom of the list, as more homeowners are starting to look at finishing their basement to free up more livable and usable space in their home.

Kaz Flinn, Vice President of Corporate Social Responsibility at Scotiabank, says that when deciding on which area of the home to improve, it’s most important to consider replacing and repairing items with energy-efficient ones, so that you can save money in the future, add more value to your home, and all while being kinder to the environment too.

“Renovations can add great value to your home and when you choose environmentally-friendly renovation options, you can save energy, water and money,” Flinn says. “Making your home energy efficient will be a benefit that will continue to pay off over the years. We recommend looking at our Scotiabank EcoLiving Home Energy Savings Calculator to help discover easy steps to make your home eco-friendly.”

What about you? Are you among the many planning significant changes for your home? How do you plan on financing the renos, and what are going to do to your home?

According to a recent study done by Royal Bank, the monthly grocery bill for the average Canadian was $411 per household. But just as is the case with any survey, many provinces are higher than that national average, while others are lower. Quebec spends the most on food each month, averaging about $448 per home; while Ontario is the lowest at about $379 per month.

But those households probably aren’t getting as much with those amounts as they used to be due to the increase in food costs over the past several years. And Canadians have noticed. The survey also found that 84 percent of people around the entire country have noticed the rising cost of food, and that it’s made a direct hit on their budget. Again, this was a trend that was felt more in some provinces and less in others. Still, Ontario was the only province to fall below the national average when it comes to how noticeable the difference in cost is.

So it should come as no surprise then, to find out that consumers are making changes in their budget to try and accommodate these rising prices. 15 per cent of survey respondents said that they were trying to cut costs in other areas of their budget, such as car insurance, to help deal with the rising cost of eating and feeding their family.

“In light of concerns over escalating food prices, more Canadians are looking for cost-saving strategies they can use on their next trip to the grocery store,” says Jason Round, head of Royal Bank’s financial planning unit.

Have you noticed the rising cost of food? Has it impacted your lifestyle, or caused you to make changes in your lifestyle or budget?

No one can forget when, on May 15, 2003, one cow was discovered to have Bovine Spongiform Encephalitis, or BSE. The cow was on a farm in northern Alberta, and it led to the slaughter of 1,400 cattle. Countries overseas slammed their doors on any beef products coming from Canada, and even around the country sales dropped.

“BSE to some degree robbed our industry of that real optimism and in its place has been a shrinking industry under financial difficulty – not confident internationally and become defensive in its domestic life,” says Ted Haney of Canadian Beef Exporting Federation.

And Ellen Goddard, agricultural marketing teacher at University of Alberta, says that people’s perceptions of the meat have changed, and this is the cause of the drop in sales.

“BSE probably changed people’s risk perceptions considerably,” she says. “They need to keep public opinion positive about the industry.”

But that’s been proving to be more difficult than it would seem, especially since Alberta’s beef troubles don’t end there. And even though CBC and Albertan farmers seem happy to blame the mad cow outbreak alone, there was another major hit to the industry that hasn’t even been mentioned. That’s the fact that almost ten years after the mad cow discovery, E. coli was also found at one Albertan beef processing plant – XL Foods.

That happened a little less than a year ago, and people still don’t seem to have gotten over it. When a plant in Brooks, Alberta was found to be contaminated with E. Coli due to improper storage and handling of beef, the plant was shut down, and massive recalls went out around the country. Still, at least 18 people in three different provinces became ill with E. Coli poisoning.

Is it any wonder, with these two major instances happening within a decade of each other that Alberta beef is still not back up to par with what it once used to be? And regardless of which incident is to blame for it, it’s clear that major damage control is needed and, just as Goddard says, a major change  in public perception is necessary.

When CBC originally ran this story, many of the comments made the point that it’s not even so much either of these issues that has them eating less beef, but simply prices – and the fact that they’re way too high.

Do you agree? Come back later today when we’ll be taking a look at the rising cost of food today, and how it’s making an impact on Canadians’ spending habits.

Setting Future Goals

“Every single financial decision should be made based on the necessary steps to accomplish the future goal,” says Ian Arrowsmith, the vice president of investment at Scarborough Capital Management.

He says that while it’s important to teach kids about things such as pricing groceries and working to earn their allowance every week, it’s about setting future goals and knowing where you’re going to be financially in your future that’s important. And along with all those small details, parents need to also teach them about the big picture, such as teaching them to save their allowance for that big ticket item instead of spending it on pop at the store; or teaching them about buying in bulk and storing and freezing foods so that the budget takes less of a hit later.

Wealth isn’t Always Worn on the Sleeve

Driving a BMW, wearing the newest Coach bag, and being spotted in only the best designerwear are all sure signs that someone is swimming in money, right? Wrong, says Brian Parker, certified financial planner and managing director of EP Wealth Advisors in L.A.

“Defining wealth by what you see can be very misleading,” he says. “Ferrari owners can struggle to make payments, and multimillionaires may choose to ride their bike to work.”

Defining wealth by what’s on the surface can also be dangerous, too. Worrying that being wealthy means wearing the newest bag on your arm instead of putting money in the bank can lead to financial ruin and soon, children could grow up not having either if they’re led to believe this misconception.

Family Matters

The financial matters of a household are the family matters of a household, says Sheryl Garrett, certified financial planner and founder of Garrett Planning Network.

“I would have loved seeing my mother take charge of financial decisions or even discuss them with me,” she says. “I believe my father did a good job of this, and my mother supported him. But to a young person, seeing your mother be in charge, make important financial decisions and discuss these with us would have been wonderful and very empowering.”

She believes that leaving the financial decisions and responsibilities to one person alone makes it seem intimidating to others in the home, and as though it’s something that one has to be specialized or especially skilled in.

It can be difficult to know how to approach money matters with your kids, and there’s definitely more to talk to them about than what’s been covered here. Still, we believe that of all the many different things to teach them, these three points are certainly some of the best.

Whether or not Duffy wrongly claimed the expenses intentionally or not has yet to be seen; but Duffy has already resigned from his position. As of Sunday morning, Nigel Wright was next to follow suit.

Mike Duffy stated on March 25, 2013 that he had repaid the expenses and in full, and he had. However, what he had not shared was the fact that Nigel Wright, Prime Minister Harper’s Chief of Staff, had written a cheque for the full amount that allowed Duffy to repay his expenses.

Wright’s intentions were also unknown, but he did state that his actions were taken only to help repay the funds that was ultimately paid by the taxpayers. It was after many audits and investigations that Wright’s actions were ultimately found out; and as of Sunday, he resigned from his post as the Prime Minister’s Chief of Staff.

In his statement, Wright announced that Harper had accepted his resignation, “in light of the controversy surrounding my handling of matters involving Senator Duffy. My actions were intended solely to secure the repayment of funds, which I considered to be in the public interest, and I accept sole responsibility.”

He also wanted to make very clear that the Prime Minister had no knowledge of how Duffy’s funds were repaid.

“I did not advise the Prime Minister by means of which Senator Duffy’s expenses were repaid, either before or after the fact,” he stated.

After Wright’s statement, Prime Minister Harper issued one of his own.

“It is with regret that I have accepted the resignation of Nigel Wright as my chief of staff. I accept that Nigel believed he was acting in the public interest, but I understand the decision he has taken to resign.

“I want to thank Nigel for his tremendous contribution to our government over the past two and a half years,” Harper stated.

According to CBC’s Hannah Thibedeau, Ray Novak will be taking over the position of his Chief of Staff. Novak has been Harper’s principal secretary since 2008.

They can negotiate commission

Commissions can become tricky because so many agents charge them using so many different ways. Some will take a percentage of the home’s price, while others will take a flat fee. Some will charge more if they’re performing services that are over and above that of an average agent. The important thing is that you know the percentage you see is not locked in stone.

Agreements cover any purchases made within that time frame

Some buyers think that if they strike it out on their own and find the home of their dreams without the help of their real estate agent, they’re off the hook for the commission. They’re not. If you have an agreement with a real estate agent then you will be responsible for paying commissions to them whether or not they have anything to do with your final deal. Know that when you’re drawing up the agreement with the agent initially, you can include exclusions from commission, such as if you wander into a builder’s sale centre on your own and purchase a condo unit from them. Also know that if you choose to do so, you may end up getting the raw end of the deal anyway. A real estate agent can be valuable even when choosing among “cookie cutter” condo unit layouts by helping you choose finishes and features that will help you with the resale later.

Only certain types of open houses benefit the seller

Open houses that are open to the public will attract buyers that are actually interested in buying your home, tire kickers that are just looking to wile away a weekend, and buyers that are looking for a home – just not yours. All of these are potential clients for your real estate agent, but most of them won’t bring you any benefit. In addition to that, you run the risk of losing some of your valuables if some people with some not-so-great intentions see an open house as an open opportunity into your home.

The only kind of open houses that will benefit you the most, and with no risk of losing your belongings, are agent open houses. These are open only to real estate agents, and those agents will probably come with one (or a few) of their clients in mind – clients that they know will actually be interested in your home. Once they view your home they’ll go back to their client and tell them about it, and then set up a private showing time.

Real estate isn’t the right investment for everybody

If you want to buy a home and can afford to carry the monthly mortgage costs, the property taxes, and all the costs of home ownership, investing in a home that you’re going to live in for the next several years is probably a good investment. If you can barely afford the mortgage, let alone all the other costs, then it’s most likely not. Some real estate agents know that buying a home is going to stretch their client to their financial limit, but they keep quiet because they’ll make the commission regardless. Others on the other hand, will try to steer you towards properties that are closer to your price range, and this makes more sense. If you’re not approved for that mortgage after all, they’re not going to get that commission.

If you’re purchasing property for investment purposes, the chances that your real estate agent is going to be of any help in the return department is even less likely. And it might not even be their fault, they might simply not know. But remember that any investment must also be able to carry the costs, including taxes, insurance, utilities and possibly a large down payment. And in addition to all of that, you still need to be able to bring in a return. After all, owning an investment property really does you no good if you’re still just breaking even.

Professional staging is unecessary

Real estate agents, in an attempt to sell a home as quickly as possible and make their commission, will talk their clients into spending big money on professional stagers. These professionals will come in and set up pricey furniture, put up a new coat of paint, and maybe even tear out a countertop and put a new one in its place. All of this is unnecessary, and some are even things you can do yourself for free. Instead of hiring professionals, declutter your home, tidy up, and ensure that your home looks as attractive as possible to potential buyers.

Firstly, no one knows what will happen with prices in the marketplace; that’s part of the fun of it. They most likely won’t continue to increase as much as they have been the past year or two, and while a softening is predicted, again no one knows for certain that will happen. What is known is that real estate is always one of the safest and most secure investments you can make, whether you’re living in it yourself or are renting it to tenants. You will most definitely see value in the purchase, the question is just when that will be.

To better question to ask as to whether you should buy now or hold off until later, is why are you buying? Because if there’s a sense of urgency, it might make sense to improve your daily life and move into a new home – even if it does cost you a couple extra thousand dollars to do it. But if you can hold off, and there’s no expiry date on that down payment, than it might make sense to hold off a little while longer.

For instance, if you’re currently renting and your landlord decides to sell the place, it might be a good time to start looking for that home to call your own (on the condition of course that you’ve spent those rental years wisely saving up for a down payment.) If on the other hand, you’re an investor who wants to make the most bang for your buck, and you don’t need to put your money into something right this second, it definitely makes sense to hold off until prices start to come down a bit.

No one has a crystal ball. And no one can predict what’s going to happen with tomorrow’s housing market. We do know that we each have our own personal lives and personal situations. Deciding whether or not owning a home fits into yours, and whether or not that’s something you can afford, is something that you and you alone can decide.

It’s in a good, central location

There’s no sense in paying nearly $1 million for a home when you live in Brampton and work in the heart of Toronto. That’s because on top of your home price you’re going to be spending thousands of dollars every year on transportation and transit costs alone. Living in that big home in the suburbs is a dream. But it’s one you should only capitalize on if you also work closer to the suburbs than in the downtown core.

It’s in its pre-construction phase

If you must purchase a single-family home no matter where it’s located or where you work, then try and purchase it during the pre-construction phase. Yes, you may only be able to look at blueprints and floor plans, with maybe a trip to a sales centre to give you a better idea of what your home will look like, but it will also be thousands of dollars cheaper. During pre-construction developers are desperate to sell, partly so that they can get financing from the bank to go ahead with their project.

It’s in the U.S.

Last year Warren Buffet said that the best investment anyone in the States could make after the crash was a single-family home. The U.S. is in the process of recovery, and single-family homes here are seeing huge gains on the market, making them one of the most sensible investments anyone could make. Of course, you may not be able to live in it if your work and life is in Canada – but it could still be a nice way to turn a tidy profit year after year.

Yes, it’s all too easy to get sucked into the notion that everyone must own a single-family home. It follows the same kind of irrational thinking that we saw two years ago on the market, when everyone thought they had to have a condo. The condo craze eventually wore off, and now those prices are back to within reasonable norms. If you just don’t fall into any of the three above categories and they don’t seem right for you, the most sensible thing to do might be to simply wait. Just like condos, prices on single-family homes will fall too. And then you’ll feel much better about the price you paid for that sprawling lot in the burbs.

Personal Finance

Are you a consumer in Alberta? If so you’ve probably noticed that prices are up a bit from where they were last year. The Calgary Herald reports.

Going to be traveling at all this summer? This week Boomer & Echo looks at the many travel costs you’ll be facing.

Canadian Finance

Canadians around the country breathe a sigh of relief as a deal is reached, and an LCBO strike is averted. The Montreal Gazette has the story.

Investing

Love investing but hate marketing? This year the Engaged Investor breaks down the importance, and the relationship, between the two.

Mortgages

Think that Flaherty is regretting his move to tighten mortgage rules? This week the Mortgage Options blog reports on how the Finance Minister is actually quite pleased with the way the market has cooled.

Real Estate

Trying to avoid real estate rage as you buy or sell a home this spring? RateSupermarket has tips that will help.

Home sales continue to fall while home prices continue to climb in Toronto. The TO Real blog reports.

There are houses, and then there are houses. The Huffington Post reveals 7 of the most unique treehouses you’ve ever seen!

It was National Bank Financial that undertook a study to deem the credit-worthiness of mortgage applicants in Canada, and compare it with what was seen in the U.S. just before they fell. They found that lending practices for mortgage debt at Canadian lending institutions are much higher than they were in the United States before their housing market imploded, and even in the time before leading up to the crash. And for those that need cold hard facts to back that up, the bank has got those, too.

It all comes down to mortgage insurance, and what mortgages are backed by the federal government in both the United States and Canada.

In the United States the amount of mortgages backed by Freddie Mac, the American equivalent of the Canada Mortgage and Housing Corporation, peaked at 28 per cent at the end of 2006. It wasn’t long after that the credit crisis hit, and the American housing market tanked.

The American market is no longer well on its way to recovery – it’s all but recovered. Housing prices are climbing in most areas, and the market is seeing a burst of both domestic and international activity right now. The amount of mortgages backed by Freddie Mac has come down significantly; and at the end of last year it sat at only 8 per cent.

At the end of last year in Canada however, the amount of low credit mortgages backed by the CMHC was only 7 per cent, one per cent lower than what’s see in the States right now. That amount had topped out at 14 per cent in 2008; and had fallen to just 13 per cent in 2009 before finally settling in at the 7 per cent where it currently sits.

The bank points out that the problem of low credit borrowers is just one piece of the puzzle when it comes to crisis in the housing market, but that looking at these numbers would suggest that we’re not due for the same kind of collapse that was seen in the States.

Stefane Marion, chief economist and strategist at National Bank Financial says though, Canadians still need to be careful. We have no crystal balls, and the only way to best predict the future is to act responsibly and prevent ourselves from ever getting there in the first place.

“You can never say never,” says Marion. “A credit accident can happen.”

The bank does believe that a housing correction is coming in Canada, but their prediction is far less dire than what was seen south of the border. Mr. Marion expects that the correction will be somewhere between 5 and 10 per cent.

Flipping a property of course requires that a property be bought for cheap, fixed up real nice, and then sold very quickly again – this time, for a much higher profit. But during that time, the flipper is still holding onto the mortgage until they can find a buyer. If amortization periods are restricted to 25 years, instead of 30 years that they are now limited to, that means investors will need to pay more on that mortgage the longer they hold it. And with hundreds, or even possibly thousands, being added due to the shorter length, that leaves them significantly less in their budget to make renovations.

Of course, less money to complete renovations spells a lot of trouble for investors, and it goes deeper than just not having enough cash flow to make the necessary renovations. Because they’d be paying more towards the mortgage for the short time that they own the home, flippers may not be able to make all of the renovations that they want, and that could prevent them from getting the biggest return once the home sales.

Also, because the OSFI rules would have an impact on everybody, it may also mean that there are even fewer buyers on the market than there are today, meaning that the flippers would have to hang onto the home even longer. That means more money towards a mortgage payment, and even less money in the flipper’s pocket.

Of course, it doesn’t mean that the industry of flipping as we know it is completely over. It simply means that, should these proposed changes go through, flippers will need to give extra special consideration to the properties they buy. They’ll need to pay closer attention to their budget than ever before, and they may need to negotiate harder than they ever have before in order to get the best price for a property, and still be able to turn a profit on it.

“Of course it’s going to benefit subprime lenders,” said Adam Hale, a mortgage broker in Hamilton. “The B-lenders must be licking their chops at this.”

The question is, why would they? To begin with, there are only a very few subprime lenders left in Canada; most of those went out with the 40-year amortization. So even if this move is going to benefit them, we’re still talking about only a handful in a move that would be detrimental to everyone else.

But you have to figure that if moves are going to be made to tighten up mortgages in general, moves will also be made to tighten the subprime market. If this rule were to go through for instance, the chances that insured mortgages would still be capped at 25 years is unlikely, as the government wants these mortgages to be shorter than conventional mortgages that came with a full down payment.

So how short would insured mortgages be then? 20 years? 15 years? No one really knows, because other than talking about this proposed change, the OSFI and Canada Mortgage Trends haven’t really said what other changes would be made.

And it’s still unclear as to how the move would benefit subprime lenders. Hale seems to believe that with the new changes, those subprime lenders are going to be calling on mortgage brokers once again – and this time, probably more often. But still, doesn’t that benefit mainly the broker, and not the lender?

“Brokers once again are going to be valuable to the lender,” Hale says. “I have people phoning me saying ‘The bank told my TDS is too high.’ They don’t know understand what a TDS is, but they know that I will explain it to them and help them find a mortgage loan.”

What do you think? Do you see Hale’s point about how the new OSFI rules could benefit subprime lenders? If so, how; and do you think it’s worth it, considering how many people would again be shut out of the market should they go through?

10.)Vancouver
9.) Hamilton
8.) Victoria
7.) Toronto
6.) Quebec City
5.) Montreal
4.) Calgary
3.) Ottawa
2.) Regina
1.) Edmonton

When looking at these ten huge cities in Canada, we took several different factors into consideration. With the housing market in such an unpredictable state in Canada right now, and with so many people taking property values into consideration, average home prices and returns on rental properties were one of the first things we considered (and also one of the main determining factors in choosing our ten best cities, too.)

With the instability of many housing markets in the country, and the number of jobs that have been lost as of March 2013, employment is another huge factor when people are considering where the top cities in Canada are. Because of such, employment and unemployment levels were also one of the biggest factors taken into consideration for these purposes.

Average salaries, population growth, rates of inflation, cost of living, and more, it’s all here in our breakdown of the biggest and most booming cities in Canada; and all of it points towards these ten cities as being the current top cities in the country!

Within these top ten cities, there were four that were neither the best nor the worst in any category except housing and rental values, where they all ranked as some of the best. Those cities were Vancouver, Hamilton, Victoria, Toronto, and Quebec City. While Toronto and Vancouver still have big corrections coming their way in the housing market, these two cities will always be some of the biggest and best places to live. And after a couple of years when both have undergone a correction, you’ll see a booming marketplace here once again.

Montreal appears fifth on the list, as this city has a fairly robust housing market at the moment, and they also have the lowest cost of living out of our top ten cities. However, they also have the lowest average salaries, which might be why it doesn’t cost a fortune to live in Montreal.

Ottawa has the highest salaries in the country and doesn’t have  very high cost of living or a large crime rate. However, with a housing market that’s also set to cool within the next couple of years, Ottawa only makes number three on our list.

When it comes to the battle of Alberta, many believe that Calgary is the best place to live currently, but in fact our research turned up differently. While Calgary’s housing market may be at an all-time high, inflation and the cost of living here are also rising at very quick rates, which makes it not only one of Canada’s biggest cities, but also one of its most expensive. Edmonton on the other hand has a low inflation rate and places low in categories such as crime rate and cost of living, as well.

It’s for all of these reasons that Edmonton places top on our list of the best places to live in Canada; and why it even beats out Regina, located in Saskatchewan, which is the province probably seeing the biggest boom of them all right now.

Click Infographic to Enlarge

Investors know that the likeliness of successfully flipping a condo in today’s market is about as good as seeing the Toronto Maple Leafs win the Stanley Cup. Instead, to still ensure that they’re making a return on their investment, they are renting out those condo units and making even more of a return, as first-time buyers are holding off on purchases until they start to see prices come down, and until they can save up for their down payment.

“For the first time in a long time, we’re seeing rent levels grow stronger than resale and new condo prices,” said Shaun Hildebrand, senior vice president of Urbanation and former market analysis with the CMHC.

“What we’re seeing is investors who are recognizing that the real strength in the market is on the rental side now, not the resale side.”

And investors certainly are starting to realize that. The number of rental units on MLS grew by 19 per cent in the first quarter of this year, showing that investors see there’s a real opportunity to capitalize on this market.

And capitalize they can; the number of rental units isn’t the only thing growing – rental rates are too. Rent have increased by 10 per cent in the past two years, and are now seeing averages in the GTA of $1,856 per month.

But while those rents may sound high if you’re a renter, there is an upside. With more investors seeing the vast potential of the rental market, it’s also going to open up that market to more people; and at a time when more people are looking for rental units as they continue to hold off on their decision to buy.

Rent increases are also expected to start plateauing and maintaining the same levels that they’re seeing now, Hildebrand predicts, which could continue to keep the rental market open to even more people.

According to a recent BMO survey, proximity to transit and to being in a central location are the top priorities for today’s first-time buyers, and it certainly explains the booms happening in downtown cores all across the country, especially in Toronto. And those same buyers are even willing to give up those prime locations, as long as they’re located somewhere close to subway stations and bus stops. While 19 per cent of the nation’s buyers said that this is most important to them (or second most important, after safety,) 28 per cent of first-time buyers said this was one of their top priorities when choosing where to live.

But while first-time buyers may be willing to edge out of those downtown areas a bit, as long as they’re still close to transit, it doesn’t mean that they want to move too far away from those areas. 34 per cent of first-time buyers said that short commutes were also important when choosing a home, higher than the national average of 28 per cent.

And in keeping with short commutes and still always being somewhat centrally located, it shouldn’t be surprising to hear that according to the survey, being close to amenities such as shops and restaurants is also important for today’s first-time buyer – or at least 28 per cent of them, compared with the 23 per cent of the national average.

With all the hustle and bustle of a central location, you’re not likely to find a quiet street, and that’s why the survey’s next findings are somewhat surprising. While first-time buyers do want the short commute that’s close to work and everything else, as well as being a prime stop on all transit routes, 30 per cent of them still want to find a home on a quiet street. That’s compared with the national average of 43 per cent of other buyers; but those other buyers also didn’t place central locations so near the top of their priority list.

With all of these priorities on buyers’ lists, what aren’t buyers looking for? Being close to their friends and family. According to the survey, only 20 per cent of first-time buyers listed this as a priority, while only 25 per cent of all national buyers placed this as a priority. However, because employment and other factors may take some family members away from others, this may be one area in which buyers have very little control, anyway.

Are you a buyer on today’s market? Are you a first-time buyer or have you made a purchase before? What are your biggest priorities when deciding where to live, and do they match up with the results of the survey?

Currently, a mortgage can be capped at 30 years if a borrower has a 20 per cent down payment and a strong credit rating. If a borrower doesn’t have the full 20 per cent, they need to also buy mortgage insurance, which is  costly fee, and their mortgage cannot have an amortization longer than 25 years. This change was made last July, and it’s caused a lot of buyers to hold off on their home purchase in order to avoid paying huge monthly mortgage payments, along with the insurance on that mortgage.

The OSFI told Canadian Mortgage Trends that they’re currently “doing some preliminary consultation with financial institutions,” to speak about the issue; and that it’s “working to determine the desirability of some changes given current conditions in housing markets and recent trends in household indebtedness.”

But it’s not just the banks and financial institutions that the OSFI is consulting with. They want to know what the public thinks, too.

“A decision in that regard would be taken once we hear back from the industry,” the regulator told Canadian Mortgage Trends. “Any proposed changes to our mortgage guideline that may result from this work would be subject to a public consultation process.”

The reason for the move would undoubtedly be due to the alarming rate at which household debt is rising; and the fact that the government is taking different approaches in order to prevent a housing bubble from forming – or bursting.

The question is, would this measure work?

Many buyers have already been kept out of the market because they can’t afford that hefty down payment, in a time when housing prices only continue to rise, and mortgage insurance too. Should the buyers that are still out there be restricted to a 25-year amortization period, even with their full down payment, they might be forced out of the market, too.

The positive that would come out of this move would be that it may force prices to start coming down, and at a quicker pace than what’s been seen in some parts of the country. That could help some of those buyers that have been edged out thus far, and could in turn prevent that bubble that the government is so worried about.

What do you think? Should all mortgages in Canada be limited to 25-year amortizations? Or will this only further hurt an already cooling market?

According to Urbanation Inc., Toronto condo sales fell a whopping 55 per cent in the first quarter of 2013, when compared with the same quarter of last year. And compared to the previous quarter, sales were down 29 per cent.

Prices still climbed in the first quarter, but slower than what we’ve been seeing over the past year or so. While price per square foot climbed 2.5 per cent when compared with last year, that number is well below the 6.4 per cent increase that’s been seen over the past ten years.

And while sales are falling and prices are climbing, there is still a major amount of overstock inventory on the market. The number of unsold units has jumped by 21 per cent when compared with the first quarter of last year, many of which are still in pre-construction mode. That has led to a slowdown in construction starts and new condos in general, says Shaun Hildebrand, senior-vice president at Urbanation.

“The industry has been cautious in bringing new units to market as sales centre traffic has slowed,” he said in a statement when presenting these latest stats.

He also believes that the city’s condo sector will start to pick up steam once again later on this year, as more resales start to enter the market, overstock inventory will be sold off, and interest will return to the condo market.

However, resale numbers when comparing quarters year-over-year aren’t that great either. Resales were down 18 per cent in the first quarter of this year when compared with last year; and resale prices also fell 0.5 per cent, to $394 a square foot.

Finding the deal

You can just take a trip across the border to the city you wish to invest in and start searching around, but there are better ways to do it than that, says Menasce. He suggests going to auctions, trustee sales (that are usually held on the steps of the courthouse,) and wholesalers that are in the market, being paid a fee to connect good properties with qualified and interested buyers.

Funding the deal

Are you hoping that once you find that dream property that you want to invest in that you’re going to go to an American lender and get the deal for it? If so, you’re going to be sorely disappointed. Getting the funding for a property is one of the biggest advantages for Americans over Canadians when it comes to buying a home. This is because while Americans can simply head on over to their nearest local branch, Canucks cannot. We must bring our financing with us when we’re looking at deals, as this is the only way a U.S. seller will ever work with us.

Flip it

Once you’ve purchased a property in the U.S., what are you going to do with it? Allow tenants in? Good luck figuring out all the different laws concerning tenants and landlords in the two different countries. Or did you want to use it as your vacation home? Well, that’s not really an investment, is it? The only way to buy property in the U.S. and to make money from that property is to flip it. And the only way to do that, says Menasce, is to do some major renovation work first.

“We sometimes prefer more complex renovations because other investors are scared of them,” he says. “This affords us the opportunity to buy properties at a greater discount as a result.”

Buying investment property in the States is definitely one of the most lucrative real estate decisions you could make right now. But make sure you know how to do it so that when the time comes, you really are seeing all of those big profit margins.

For the past several years, investing in real estate in the United States has been something extremely risky for everyone, Canadians and Americans included. But there’s been an interesting shift in the past year or two. American real estate is being offered for rock-bottom prices, far better than anything you’re likely to find on this side of the border. And interest rates still remain at historic lows too. So why not invest in American real estate if you can?

That’s the question that real estate investor Victor Menasce is asking. Within the past two years he’s purchased over 30 properties in Pennsylvania, Illinois, Florida, Arizona, and the Sun Belt. He even purchased a baseball stadium in New Jersey. And he says, he was able to do it all because Canadians have an advantage when it comes to buying American real estate.

“We see value in places that Americans don’t notice quite so readily,” says Menasce, who authored the book The Great Canadian Takeover.

He’s not wrong, the popularity of U.S. real estate right here in Canada is soaring. While $66.4 billion was invested into this country’s properties in 2011, that jumped to $82.5 billion in 2012.

Rick Raddatz, a political commentator that has also noticed the uptick of Canadians buying American real estate, says that he’s not surprised given the world that we live in.

“The reason this is happening is because we’re living in a global economy,” he says. “AS international market places become integrated, we’re discovering more efficient ways to work with each other. The internet also enhances global interaction.”

And while that’s undoubtedly true, Menasce also says that there are reasons American property looks so good to the Canadian investor right now.

“The trend is a result of a combination of factors including the devaluing of the U.S. dollar, a strong Canadian dollar, an impressive U.S. real estate market and properties seeing far below construction costs,” he says.

He points to the fact that while you’ll pay $353,000 for a home in Ottawa, and $510,000 on the same in Toronto, you can get the exact same property for $149,000 in Tampa, Florida.

Jenny Witterick, chartered financial analyst and president of Sky Investment Council, says that while scooping up these properties might just be a dream for these investors, it’s also benefiting the American economy, too.

“Initially, the impact is positive, because when Canadians buy a home, they also spend money on furniture, restaurants, and other things, so it’s positive for the U.S. economy, because there’s more cash coming into the country,” she says.

Want to get in on the American housing boom? Stay tuned, later today we’ll be giving you tips on how you too, can cash in on this American takeover.

Unfortunately, aside from repeatedly asking them to stop smoking inside, and withdrawing whatever privileges and features you can that you’re currently providing, there is very little you can do if a tenant is smoking inside a property.

In Ontario at least, there has never been a successful case of a landlord trying to evict a tenant based strictly on the grounds that they were smoking inside the unit – even if the tenant doing so breaks a clause or a promise in the lease. The reason for it is simple. Tell people that they have to stop smoking inside their own home (even if it’s not technically their “own” home,) and it sets out a slippery slope for other offensive odours and potential health hazards.

For example, if it’s the smell that the landlord is most concerned about, what other smells may in the future be deemed “unacceptable” and “cause for eviction”? Cooking fish or curry? Bringing a certain perfume into the home? These latter seem ridiculous, even though pretty much everyone can agree that the smell of smoke is horrid.

Aside from the smell, everyone can also agree that smoking is a health hazard, not only to the smoker but to everyone around them. This seems like a perfectly viable and logical argument, but again, there are always going to be other potential “health hazards” that could be next on this slippery slope of telling people how to live their lives when inside their home.

For example, do you tell tenants in an apartment building that they can no longer drive their cars because the pollution bothers those that are walking in and out of the building. Or do you prevent anyone from eating peanut products inside their home because the dust could cross-contaminate or cause problems in the garbage area of the building?

Simply put, for the time being anyway, there’s not much you can do if a tenant is smoking inside of their rental unit. Just like most other things in life, this is just one of those risks that each of us takes, whether we’re living in a community building with many other people, or just trying to make the best investment possible.

It was the Globe and Mail that ran the interview with Marc Faber, in which he pretty much gave Canada the “hopeless” stamp in all categories. Household debt and the housing market were his two main arguments on why he wouldn’t invest in Canada at all for the time being. But just how good are those arguments? And how closely should we be listening to someone who doesn’t even live in the country?

First he touched on the fact that Canada is “on the expensive side” in general right now, and that this pertains to our household debt levels as well as our home prices. And no, neither can be argued. However, he also states that our debt levels are higher right now than that seen in the United States.

That may be true, but it was also the Globe that just reported that in the U.S., “household debt rose at a 2.5 per cent annual rate in the fourth quarter. It was the steepest gain since the first quarter of 2008.”

That was the U.S. Federal Reserve that released those stats; and we think they’re a bit more reliable than whatever a Swiss investor happens to be glancing at at the time of interview.

And, touching on the fact that we’re such a pricey country right now, Mr. Faber said,

“I think Canada is a case where you  have huge leverage in the private sector and where the economy is slowing down, where you have a strong currency and where the price levels are now relatively high. I don’t think Canada is inexpensive anymore. I travel there all the time, it’s rather on the expensive side. I think there’s significant risk to the Canadian economy.”

But Mr. Faber doesn’t say exactly where he’s visiting in the country. Let’s face it, if you visit Toronto or Vancouver for a week, it’s probably going to be more expensive than if you were to visit Lethbridge or Brampton.

And just how big of a risk to the Canadian economy does he see? Well, a big enough one to predict a crash. Mr. Faber apparently knows that our market will crash, and when it will crash. He just doesn’t have a very good answer as to the why. When asked by the Globe what will precede the crash, his answer was,

“What was the trigger of the ’87 crash when markets fell 21 per cent in one day? What was the trigger of the Nasdaq crash in 2000? What was the trigger of the Japanese crash of 1989? What was the trigger of the 2007 crash that brought global stocks down 50 per cent? We don’t know these things ahead of time, but something will always move markets up and something will always move them down.

“I would guess at the present time, given markets from the 2009 lows have in many cases increased by as much as 100 per cent, that they are no longer very cheap. Something could come along, geopolitically or otherwise. I would be very careful about being overweight in equities. I still have 25 per cent in equities and 25 per cent in corporate bonds.”

So there you go. Even though he seems to somehow know that the markets will crash, even he says that “you can’t predict these things ahead of time.” The biggest question then is, why is he?

With all due respect to Mr. Faber, we think that the next time we want to get an analyst’s thoughts on where the Canadian market is headed, we’ll be sure to ask another Canadian. While it’s important to hear and outsider’s advice, and know whether or not foreign investors sees us a safe place, most people still seem to at least want factual answers when one comes in and starts spelling out the end of the world for us.

• Don’t be afraid to say ‘no’ to a few invites. According to Weddingbells Magazine, there will be 165,297 weddings in Canada this year; and if you get invited to even five of those, it might be too much. If you find you’re getting overwhelmed, don’t be afraid to send a ‘no’ in your RSVP to those that you’re not extremely close to.
• Give the gift of your talent or skill. Do you design great window treatments? Are you an especially talented photographer? Do you have an eye for decor? Whatever your talent or skill is, offer that in place of giving a gift. Chances are, it will be something they really appreciate, and everyone feel better about it than something that was purchased from a store.
• Know how to shop. Yes, you should try to purchase off the registry, as this is how you know exactly what they want and need. While you can’t shop the registry and then go find knockoffs elsewhere, you can browse through the registry as soon as you know where it is and what’s on it. Be sure to shop early, so you can choose the cheaper items that will be gone later. If there is a larger, more expensive item on the registry that you want to get the happy couple, ask around to see if anyone wants to chip in on it with you. A large group present can often be more impressive than several small ones, and it could end up being cheaper for you in the long run.
• Wrap it like a pro. With so many simple tutorials and guides online these days, there’s no reason to do just about everything professionally, and that’s especially true when it comes to wrapping presents. This isn’t about impressing the couple (although it will,) but about bringing something beautiful to a beautiful occasion.
• Know what to wear. Attending several weddings doesn’t mean buying several different outfits. Buy one that can be worn different ways, or shop your friend’s and family member’s closets to see what you can borrow from them.
• Stay where you can afford to stay. Yes, the couple may be staying in that five-star hotel that the wedding took place in, but that doesn’t mean you have to. If you’re going to be staying out of town for a wedding, first see if there’s anywhere you can stay for free – such as a friend or family member’s house. If not, do some research to find out where some cheap hotels are in the area, that you can either walk to or aren’t too expensive to cab it to.

So what gifts can you expect within that price range? Traditional gifts are still some of the most popular, with 47 per cent of respondents giving cards, and 45 per cent giving flowers. 38 per cent will be treating mom to a bite to eat at a restaurant, while the majority of people, 68 per cent cent, will be heading to the store to buy that special something mom’s had her eye on.

And while showering mom with gifts is always a great feeling, and unquestionably well-deserved, BMO director Nick Mastromarco says that it’s still important to ensure that you’re not overspending and going into debt. And that mom will be just as happy, if not happier, with a simple expression of love and a gift that comes from creativity and true generosity, rather than something that comes from a store.

“It can be easy to lose track of financial priorities during holidays and occasions such as Mother’s Day, so it’s essential that all spending is planned and accounted for in the overall household budget,” he says.

“For those looking to be generous to mom while managing a tighter budget, consider redeeming rewards points not only for gifts, but also experiences such as a weekend get-away or spa treatments. But of course, the most important thing is spending time with your parents on Mother’s Day and Father’s Day.”

Personal Finance

Gail Vaz-Oxlade gives real practical advice on how you can save money this month!

Canadian Finance

Alberta reaches top ranks once again, by seeing a drop in their unemployment rate.

Having a party this Victoria Day weekend? Stock up on your cocktails now – the LCBO is planning to strike.

Mortgages

There are lots of ideas on how to pick the perfect mortgage. This week Boomer & Echo is full of tips on how to do it.

30-year mortgages have only been available in Canada to a select few for almost a year. Now though, Canadian Mortgage Trends looks at how 30-year amortizations might disappear altogether.

Mortgage loyalty won’t get you any discounts. CanEquity looks into a BoC survey that shows just that.

Real Estate

It’s the same old story in Toronto. Prices are up, but the market’s not interested. TO Real Blogs gives us the scoop.

It seems you can’t step outside your door, or especially pick up a newspaper, without hearing about all the disaster that surrounds the Canadian housing market right now. Analysts are starting to sound like Chicken Little, except it’s prices and not the sky that is falling. Sellers meanwhile, are thinking that they’re going to be living in their home forever, or they’re going to lose a fortune on their home. But all the panic is quite unnecessary. There is a change happening, but it’s not the end of the Canadian housing market. It’s just the end of the market as we’ve known it for the past five years or so.

A cooling market is really just another name for a buyer’s market. And yes, that is a transition from the busy seller’s market that we’ve grown so accustomed to seeing. But this change in the marketplace doesn’t spell certain disaster. It simply means that things are going to get better for buyers, while still protecting sellers from losing their shirts.

For buyers, they have the pick of the crop right now. And in areas where prices still have not come down as much as they would like, buyers there just have to wait another two or three months and they’ll see prices in their region start to slide, too. This is the group that will most benefit from the softer market, and they might be the most deserving of it. After all, these are the same people who waited on the sidelines during the entire boom, waiting for the craziness to die down some, and get a home they love for an affordable price. Now, they can.

It’s also one of the best time for investors that are on the market, and for much of the same reasons why it’s such a great place for buyers. Prices are low, and only dropping further. While it may take a couple of years to get that value back, and even multiply it just as sellers did last year when prices were sky high and it didn’t look as though they’d be leveling off any time soon. Now though, they are coming down, while interest rates are forecasted to remain at their historic lows through til 2015 (some experts say.)

Sellers might not be the group that’s going to benefit the most from this softer market, but the road they’re headed down might not be as dark as they think. They might not make the thousands upon thousands of dollars over the value of their home that they might have if they had sold it two years ago, but they’ll still get the full value from their home.

With just a little bit of perspective, this changing market may just be a good thing after all!