cALGARY rEAL eSTATE mARKET sUMMARY
The first quarter of 2018 has definitely been an interesting one in the Calgary Real Estate Board! While sales continue to improve month over month, they are 18% below what they were during the same quarter in 2017. Even with the slower sales, the average days on market has been dropping and is currently at 45 days, and the benchmark price is slowly rising to $435,600 which are all good signs of an improving market.
The most notable aspect in our current market is that while most sectors and price ranges are seeing declines in sale volume; it is the luxury market that is seeing the greatest improvements! The sales in the $1M+ range have increased 16% year to date in 2018 over and above 2017's numbers. With other real estate markets booming in Toronto and Vancouver, there have been reports that Calgary and Montreal stand to see the greatest improvements in the luxury market in all of Canada. This is a trend that we are seeing developing and to should monitor.
Other benefits to consider in today's market are that interest rates continue to be at, or close to, all time lows and are beginning to edge upwards. It was as recent as 2007 when a five year fixed mortgage was over 7% which puts a significant damper on purchasing power should they return to that level. The low interest rates combined with an increasing inventory, and realistic sellers, is formulating a great market to buy in.
All of this combined with balanced absorption rates, we expect to see the overall market remain stable with modest increases as we enter into Spring.
renovation hOMEOWNER TIPS
If you are thinking of selling your home, or simply want to spruce it up, exterior renovations can significantly increase its value and curb appeal. Aside from more expensive undertakings such as new roofing and siding, there are some projects you can take on yourself, such as creating attractive flower beds or purchasing a new front door. With each project completion, you will be happier with your home, and increase its appeal to buyers when it comes time to sell!
WHAT SHOULD I BUDGET FOR MY HOME RENOVATIONS?
Article by Mario Toneguzzi, based in Calgary has 37 years of experience as a daily newspaper writer, columnist and editor. He worked for 35 years at the Calgary Herald
If you’ve never done a renovation on a room in your home, you may not know what you should be budgeting. So, how expensive can this get? It’s really impossible to put together estimates as to what it would cost to redevelop a kitchen or a bathroom or put in a secondary suite because all renovations are different and each project can be from the very simple to the very complicated.
Take a kitchen, for example. Renovations can be as easy as painting the walls to as complicated as a complete makeover with new cabinets, new plumbing, new appliances, and breaking down walls. It’s the difference between a renovation that costs hundreds of dollars to one that costs several thousand.
Renos are popular in Canada. They enhance the living experience for homeowners. They can also add value to a home if people are intending to sell their most valuable asset.
According to HomeAdvisor website, the average cost of a bathroom remodel in Canada is $9,627 with the typical range being $5,923 to $14,010. A kitchen remodel averages in at $21,999 with the typical range being $12,560 to $33,282.
REALTOR® experts say the most effective renovations for adding value to a home, and the best return on investment are kitchens, bathrooms and secondary suites.
So, how much are Canadians spending on these renos? A poll by CIBC in May last year found a growing number of Canadian homeowners – 48% in fact – said they would renovate in 2017 but are spending less to do so. They indicated they would spend $11,800 on average – the lowest in three years – to address ” wear and tear: and basic home maintenance like painting, flooring and replacing appliances.
Also, 56% of homeowners who are planning to renovate are choosing to stay in their residences and improve their space instead of placing their property on the market for sale. The top renos are basic maintenance (48%), landscaping (38%) and bathroom renovations (31%).
“These findings show that the decision to either renovate or relocate comes down to your financial situation, emotional attachment to your home, and ultimate real estate goals,” says Scott McGillivray, renowned real estate investor, contractor and television personality. “While moving into a new home can help address your need for space, a renovation can often help achieve the same goal, while keeping you in your neighbourhood and, if done right, adding value to your home. Do your research first by speaking with your REALTOR®, a trusted contractor and your financial adviser. Expert advice can help you determine which option best fits your needs and your budget.”
Going through a renovation can be one of the most stressful experiences on the home front. There are worries about finances, meeting budget, and worries about the reno getting done on time. Plus the stress of living in a chaotic environment during the reno.
“Renovations can be stressful but having a detailed budget can help minimize the disruption and keep your project on track,” says Scott Wambolt, Senior Vice President, Retail and Business Banking, CIBC. “Be clear about the goals and limits of your project as well as the costs before you head over to the hardware store or pick up your toolbox. While DIY (do it yourself) can add up to some cost savings, it could end up costing you more if you don’t know what you’re doing.”
Don’t expect to fly through a renovation project without any glitches. That’s almost impossible. Something along the way will go wrong. It’s just a matter of the magnitude of that misstep that is concerning.
Remember some simple tips:
- Create a budget – and stick to it!
- DIY what you know.
- Hire a professional for what you don’t
If you are doing renovations in order to sell your home, it is important to keep in mind that you rarely recover the full value of the renovation on resale so do your homework and stick to the projects that will give you the best return on your investment.
CANNABIS LEGALIZATION COULD BE A PROBLEM FOR HOMEOWNERS
One of the key issues that CREA's federal affairs team has been working on recently is on Bill C-45 and the legalization of cannabis in Canada. What's the link between cannabis and Homeowners you might ask? The legislation features provisions that allow individuals to engage in home cultivation of cannabis plants, which depending on the circumstance, size of the plant and scale of the residence, could have significant impacts in a home.
CREA's CEO, Michael Bourque, recently outlined his thoughts on the issue in an opinion piece published in the Financial Post copied below are a few key points that he brings up that are important for homeowners to consider.
Want to live in a former grow-op?
In recent weeks we have seen Ottawa Public Health as well as apartment owners and landlords speak publicly about challenges the Canadian Real Estate Association (CREA) raised over a year ago with government officials. Namely, growing cannabis at home poses huge problems for the health and safety of people and buildings.
Currently the legislation allows individuals to grow four plants at home. On the surface, this sounds reasonable, even moderate. But it doesn't limit the number of crops, or the size of each plant. With very little effort (proper irrigation and lighting) one could easily harvest three or four crops a year, which could cover a large section of a home, depending on the strain of cannabis. The consequences are myriad and significant.
First, that type of cultivation is a grow-op, with all the potential risks and hazards of a commercial operation. Health authorities are calling it a public health concern. Health Canada and the Canada Mortgage and Housing Corp. (CMHC) both place indoor air quality as one of the most important elements to maintaining a healthy home.
Risks associated with regular growing of cannabis include mould, spores and fungus. People living in these surroundings with any type of respiratory illness could be adversely affected. And the damage to the home or apartment is well known to REALTORS® who have encountered grow-ops across the country.
In fact, there are virtually no remediation standards for mould-infected homes. In addition, lenders and insurers are often reluctant to service former grow-ops, potentially taking a home off the market.
In addition to health risks, improper installation and the use of grow-op equipment, including high-wattage lights and irrigation tools, pose safety risks. With just three crops a year of certain strains, moderate yields could reach over five kilograms a year. At that level of production there is the potential for criminal activity, including easier access by minors, and apartment dwellers could be subject to health effects from smoke, odours and the consequences of a grow-op.
For all of these reasons, homeowners must take the time to seriously consider the risks of home cultivation and how it will affect your ability to sell your home down the road. It is also going to be very important to be conscious of this when you are in the market to purchase a new home.