Please come with any questions you may have. In the meantime you can take a virtual tour of this Central Lonsdale Apartment for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Central Lonsdale Apartment for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

1) Home Buyers’ Plan:

Qualifying home buyers can withdraw up to $25,000 (couples can withdraw up to $50,000) from their RRSPs for a down payment. Home buyers who have repaid their RRSP may be eligible to use the program a second time. Canada Revenue Agency www. cra.gc.ca Enter ‘Home Buyers’ Plan’ in the search box.

1.800.959.8287

2) GST Rebate on New Homes:

New home buyers can apply for a rebate of the federal portion of the HST (the 5% GST) if the purchase price is less than $350,000. The rebate is up to 36% of the GST to a maximum rebate of $6,300. There is a proportional GST rebate for new homes costing between $350,000 and $450,000. Canada Revenue Agency www.cra.gc.ca Enter ‘RC4028’ in the search box.

1.800.959.8287

3) BC New Housing Rebate (HST)

Buyers of new or substantially renovated homes priced up to $850,000 are eligible for a provincial enhanced New Housing Rebate of 71.43% of the provincial portions (7%) of the 12% HST paid to a maximum rebate of $42,500. Home priced at $850,000+ are eligible for a flat rebate of $42,500.

www.hstinbc.ca

1.800.959.8287

4) BC New Housing Rebate (HST) for Secondary Vacation or Recreational Homes

Buyers of new or substantially renovated secondary or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 are eligible for a provincial enhanced New Housing Rebate of 71.43% of the provincial portions (7%) of the 12% HST paid to a maximum rebate of $42,500. Home priced at $850,000+ are eligible for a flat rebate of $42,500.

www.hstinbc.ca/buying_goods/buying_a_home/new_home_tax_calculator

1.800.959.8287

5) BC New Rental Housing Rebate (HST)

Landlords buying new or substantially renovated homes are eligible for a rebate of 71.43% of the provincial portion of the HST, up to $42,500.

www.hstinbc.ca

1.800.959.8287

6) BC First-Time New Home Buyers’ Bonus

First-time new home buyers may be eligible a one-time grant equal to 5% of the purchase price of the home, or if you are building a home, 5% of the land and constriction costs, up to $10,000. The bonus is based on the net income of the home buyer. This program ends March 31, 2013.

www.sbr.gov.bc.ca/documents_library/notices/FTHB_Bonus.pdf

1.877.387.3332

7) BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program

Qualifying first-time buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $425,000. There is a proportional exemption for homes priced up to $450,000.

BC Ministry of Small Business and Revenue www.sbr.gov.bc.ca/business/Property_Taxes/Property_Transfer_Tax/ptt.htm

250.387.0604

8) First-Time Home Buyers’ Tax Credit (HBTC)

This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15% in 2011) x $5,000. For the 2011 tax year, the maximum credit is $750.

Canada Revenue Agency www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncmtx/rtrn/cmpltng/ddctns/lns360-390/369/menu-eng.html

1.800.959.8281

9) BC Home Owner Grant

Reduces property taxes for home owners with an assessed value of up to $1,285,000. The basic grant gives home owners

• a maximum reduction of $570 in property taxes on principal residences in the Capital, Greater Vancouver and Fraser Valley regional districts;

• an additional grant of $770 to rural homeowners elsewhere in the province; and • an additional grant of $275 to seniors aged 65+, those who are permanently disabled and war veterans of certain wars.

BC Ministry of Small Business and Revenue www.rev.gov.bc.ca/hog or contact your municipal tax office.

10) BC Property Tax Deferment Programs

Property Tax Deferment Program for Seniors. Qualifying home owners aged 55+ may be eligible to defer property taxes.

Financial Hardship Property Tax Deferment Program. Qualifying low-income home owners may be eligible to defer property taxes.

Property Tax Deferment Program for Families with Children. Qualifying low income home owners who financially support children under age 18 may be eligible to defer property taxes.

BC Ministry of Small Business and Revenue www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Tax_Deferment/ptd.htm

11) Canada Mortgage and Housing (CMHC) Residential Rehabilitation Assistance Program (RRAP) Grants.

This federal program provides financial aid to qualifying low-income home owners to repair substandard housing. Eligible repairs include heating, structural, electrical, plumbing and fire safety. Grants are available for seniors, persons with disabilities, owners of rental properties and owners creating secondary and garden suites.

www.cmhc-schl.gc.ca/en/co/prfinas/prfinas_001.cfm

1.800.668.2642 | 604.873.7408

12) Home Adaptations for Independence (HAFI)

A new program jointly sponsored by the provincial and federal governments provides up to $20,000 to help eligible low-income seniors and disabled home owners and landlords to finance modifications to their homes to make then accessible and safer.

BC Housing www.bchousing.org/Options/Home_Renovations

604.646.7055 or toll-free

1.800.407.7757 extension 7055

CMHC Mortgage

13) Loan Insurance Premium Refund

Provides home buyers with CMHC mortgage insurance, a 10% premium refund and possible extended amortization without surcharge when buyers purchase an energy efficient mortgage or make energy saving renovations.

www.cmhc.ca/en/co/moloin/moloin_008.cfm#reno

604.731.5733

14) Energy Saving Mortgages

Financial institutions offer a range of mortgages to home buyers and owners who make their homes more energy efficient. For example, home owners who have a home energy audit within 90 days of receiving an RBC Energy Saver™ Mortgage, may qualify for a rebate of $300 to their RBC account.

www.rbcroyalbank.com/products/mortgages/energy-saver-mortgage.html

1.800.769.2511

15) Low Interest Renovation Loans

Financial institutions offer ‘green’ loans for home owners making energy efficient upgrades. Vancity’s Bright Ideas personal loan offers home owners up to $20,000 at prime + 1% for up to 10 years for ‘green’ renovations. RBC’s Energy Saver loan offers 1% off the interest rate for a fixed rate installment loan over $5,000 or a $100 renovation on a home energy audit on a fixed rate installment loan over $5,000. For information visit your financial institution.

www.vancity.com/Loans/BrightIdeas and www.rbcroyalbank.com/products/personalloans/energy-saver-loan.html

16) LiveSmart BC: Efficiency Incentive Program

Home owners improving the energy efficiency of their homes may qualify for cash incentives through this provincial program provided in partnership with BC Hydro and FortisBC. Rebates are for energy efficient products which replace gas and oil furnaces, pumps, water heaters, wood stoves, insulation, windows, doors, skylights and more. The LiveSmart BC program also covers $150 of the cost of a home energy assessment, directly to the service provider.

www.livesmartbc.ca/rebates

1.866.430.8765

17) BC Residential Energy Credit

Home owners and residential landlords buying heating fuel receive a BC government point-of-sale rebate on utility bills equal to the provincial component of the HST.

www.sbr.gov.bc.ca/business/consumer_taxes/residential_energy/residential_energy.htm

1.877.388.4440

18) BC Hydro Appliance Rebates

Mail-in rebates for purchasers of ENERGY STAR clothes washers, refrigerators, dishwashers, or freezers.

www.bchydro.com/rebates_savings/appliance_rebates.html

1.800.224.9376

19) BC Hydro Fridge Buy-Back Program

This ongoing program rebates BC Hydro customers $30 to turn in spare fridges in working condition.

www.bchydro.com/rebates_savings/fridge_buy_back.html

604.881.4357

20) BC Hydro Windows Rebate Program

Pay no HST when you buy ENERGY STAR high performance windows and doors.

www.bchydro.com/rebates_savings/windows_offers/current_offers.htm

604.759.2759 for a free in-home estimate.

21) BC Hydro Mail-in Rebates/Savings Coupons

To save energy, BC Hydro offers rebates including 10% off an ENERGY STAR cordless phone. Check for new offers and for deadlines.

www.bchydro.com/rebates_savings/coupons.html

1.800.224.9376

22) FortisBC Rebate Program

A range of rebates for home owners include a $50 rebate for upgrading a hot water tank, $300 rebate on an Ener-Choice fireplace and a $1,000 rebate for switching to natural gas (from oil or propane) and installing an ENERGY STAR heating system.

www.fortisbc.com/NaturalGas/Homes/Offers/Pages/default.aspx

1.888.224.2710

23) FortisBC Efficient Boiler Program

For commercial buildings, provides a cash rebate of up to 75% of the purchase price of an energy efficient boiler, for new construction or retrofits.

www.fortisbc.com/NaturalGas/Business/Offers/Pages/default.aspx

1.888.477.0777

24) City of Vancouver Rain Barrel Subsidy Program

The City of Vancouver provides a subsidy of 50% of the cost of a rain barrel for Vancouver residents. With the subsidy, the rain barrel costs $75. Buy your rain barrel at the Transfer Station at 377 W. North Kent Ave., Vancouver, BC. Limit of two per resident. Bring proof of residency.

http://vancouver.ca/engsvcs/watersewers/water/conservation/programs/rainbarrel.htm

604.736.2250

Other municipalities have similar offers.

25) City of Vancouver Greenest City 2020 Pilot Home Energy Loan Program

The City of Vancouver in cooperation with Vancity, FortisBC, BC Hydro and Natural Resources Canada offers access to loans for energy retrofits including heating systems, insulation and air sealing. The Home Energy Loan from Vancity is a 12 month pilot program that will end October 21, 2012. For more information attend a workshop (see third link below).

The goal is 500 homes and loans are offered at 4.5% fixed rate over 10 years. The program also helps with accessing grants from the federal ecoENERGY program, the provincial LiveSmart BC program and FortisBC.

www.vancouver.ca/energyloanand www.vancity.com/Loans/homeenergy and http://energyloan.eventbrite.com

Email: energyloan@vancouver.ca

604.374.0507

26) Vancity Green Building Grant

In partnership with the Real Estate Foundation of BC, Vancity provides grants up to $50,000 each to qualifying charities, not-for-profit organizations and co-operatives for projects which focus on building renovations/retrofits, regulatory changes that advance green building development, and education to increase the use of practical green building strategies. The deadline for applications was January 23, 2012. If you are still interested in this grant open the link, and consider contacting Vancity to express your interest.

www.vancity.com/MyCommunity/NotForProfit/Grants/ActingOnClimateChange/GreenBuildingGrant

604.877.7000

27) Local Government Water Conservation Incentives

Your municipality may provide grants and incentives to residents to help save water. For example, the City of Coquitlam offers residents a $100 rebate and the City of North Vancouver, District of North Vancouver, and District of West Vancouver offer a $50 rebate when residents install a low-flush toilet. Visit your municipality’s website and enter ‘toilet rebate’ to see if there is a program.

28) Local Government Water Meter Programs

Your municipality may provide a program for voluntary water metering, so that you pay only for the amount of water that you use. Delta, Richmond and Surrey have programs and other municipalities may soon follow. Visit your municipality’s website and enter ‘water meter’ to find out if there is a program.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Upper Lonsdale House for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Upper Lonsdale House for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this LoLo Townhouse for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this LoLo Townhouse for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Upper Lonsdale House for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Imagine the ease of living on one level up while enjoying the financial benefits and security of an authorized 2 bedroom suite down! Completely renovated from the inside out, you'll have nothing to do but move in and love your new home. Designed to make entertaining and hanging with family to be effortless, the open concept kitchen/living/dining space is warm, bright and inviting. From the sparkling composite kitchen counters and contemporary melamine cabinets, to the undermount large double sink, from the walk-in pantry, to the stainless steel appliances (including gas range), you'll find thoughtful and appealing design. Don't wait for water to boil to enjoy your pasta supper, there's an instant hot water dispenser over the stove. The kitchen island is beautifully lit and is highlighted with bar seating for on-the-go meals and chats. Warmth will prevail here as the modern gas fireplace adds ambiance and heat to the space. Restoration Hardware lighting fixtures and matte finish hardwood accentuate the classic timelessness of the design of the plan. From the dining room step onto the party-sized deck which overlooks the freshly landscaped back yard and features a subtle privacy panel. High quality neutral-toned berber carpeting is found throughout the rest of the home, including the 3 spacious bedrooms. The master bedroom is luxurious and bright with sliding doors leading to the deck and back yard, vaulted ceiling, smart built-in shelving, a walk-in closet to keep even the most extensive wardrobe organized, and a lavish ensuite with duo shower heads, artisanal floor-to-ceiling tile, and two vessel sinks with waterfall faucets sitting on a sizeable vanity. The well-considered layout which includes the laundry and a second bathroom heightens the ease of one level living. Above the main level, there is a comfortable and fun loft space which can be used as a kids' play space. For privacy and productivity, consider the separate office/studio space within the enclosed garage. Downstairs there is a bright and renovated ground level 2 bedroom suite, complete with it's own laundry. Fresh new landscaping, flowers and a paved-stone wrap-around driveway complete the pretty picture this home paints. EVERYTHING in this home is NEW NEW NEW! Roof, wiring, plumbing, appliances, double pane windows, paint: ALL NEW! A brand new home in the well-established and charming neighbourhood of Upper Lonsdale! The best of both worlds.

Please come with any questions you may have. In the meantime you can take a virtual tour of this Upper Lonsdale House for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Upper Lonsdale House for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Introduction 

Secondary suites have been legally permitted as a use in the District since October 14, 1997. Before this, only family residential units (family use only) were permitted except that, from 1988 to 1995, illegal suites were allowed to operate under the Registered Illegal Suite Phase-Out Program. 

A building permit authorizes the installation of a secondary suite. Those installed without a building permit, such as any installed before 1997, are considered to be unauthorized. 

In 2001, annual utility charges for water and sewer services were imposed on properties containing a secondary suite (family residential units were already paying additional charges). This charge applies to all secondary suites, whether authorized or not. 

Residents with an unauthorized secondary suite are asked to ensure that their suite is recorded, for utility fee collection purposes, by contacting the District at (604) 990-2480. 

Definitions 

1. What is a “secondary suite”? 

The District’s Zoning Bylaw defines a secondary suite as: 

“secondary suite” means a designated area within a single-family residential building, only in a single-family residential zone, that is comprised of one or more habitable rooms and contains or provides for only one cooking facility”. 

The term secondary suite includes suites that are sometimes referred to as “in-law suites”, “basement suites”, “nanny suites” or “mortgage helpers”. If you wish to review the relevant property use regulations, please refer to the District of North Vancouver Zoning Bylaw. 

2. What is an “authorized secondary suite”. 

An authorized secondary suite is a secondary suite that has been created with a building permit. Document No: 319753 

3. What is an “unauthorized secondary suite”? 

An unauthorized secondary suite is a secondary suite that has been created without a building permit. 

4. What is a “family residential unit”? 

Family residential units, (commonly referred to as “inlaw-suites”), were permitted in the District between 1987 and 1997. The family residential unit regulations, which allowed family occupancy only, were replaced by the secondary suite regulations on October 14, 1997. Prior to this date, the District’s Zoning Bylaw, defined family residential unit as: 

“Family residential unit” means a designated area within a single family residential building that: 

a) is comprised of one or more habitable rooms, and 

b) contains or provides for only one cooking facility, and 

c) does not exceed in total area the lesser of 700 square feet or 40% of the residential floor area of the single family residential building in which it is located, and 

d) together with the dwelling unit in the single family residential building creates a single-family residential building that provides for the residential accommodation of only two or more persons inter-related by the bonds of consanguinity, marriage, legal adoption or who all have a common law relationship. 

5. What is a “cooking facility”? 

The District’s Zoning Bylaw defines a cooking facility as: 

“cooking facility” means a room or portion thereof where and the equipment by which meals may be prepared. 

Secondary Suites 

6. Are secondary suites permitted in the District? 

Yes, secondary suites have been permitted in the District since October 14, 1997. The Zoning Bylaw requires that the building be occupied by its owner, that an additional off-street parking space be provided and that the suite be less than 40% of the total floor area, to a maximum of 90 m. (968 ft.). The construction of the suite is regulated by the relevant construction Codes, (ie Building, Electrical, Plumbing, Gas). A building permit is required to create a secondary suite. For further information about creating a secondary suite, refer to information bulletin Secondary Suites in Single Family Zones. 

7. I have a secondary suite that was built with a building permit. Do I pay the additional charges? 

Yes, you will automatically be billed on your tax notice. Document No: 319753 

8. I have an unauthorized secondary suite. Do I pay the additional charges? 

Yes, if the District is aware of your suite. In 2001, a Program was implemented to identify all secondary suites, whether authorized or not. Many property owners received a letter from us, asking to declare their suite. Even if you did not receive such a letter, you are still responsible for the additional water and sewer charges. Call (604) 990-2480 to have your property added to the annual secondary suite utility billing. 

Inspections 

9. Will the District be inspecting my suite, if I call to have it recorded on the utility billing? 

No, the purpose of this Program is to identify secondary suites so that the applicable utility charges can be collected, not to enforce zoning and building regulations. Inspections may occur when it is learned that an undeclared suite exists or when a complaint is received. 

Family Residential Units 

10. I have a registered family residential unit. What does this mean to me? 

You pay the same utility charges as someone with a secondary suite. The space may still, however, only be used in accordance with the bylaw at the time that it was developed, (family use only). Although family residential units are no longer permitted, existing family residential units may continue as a legally non-conforming use. A building permit is required to convert the space into a secondary suite and compliance with the Building Code will be required. 

11. What is the difference between a family residential unit and a secondary suite? 

Family residential units were not required to meet Building Code requirements as a suite. Therefore, an existing family residential unit may conform to the zoning regulations as a secondary suite, but would likely not conform to the Building Code’s requirements as a secondary suite. Family residential units were also limited to a smaller floor area. 

Registered Illegal Suite Phase-Out Program (1988 to 1995) 

12. My property was registered in the Registered Illegal Suite Phase-Out Program. What does this mean to me? 

The Registered Illegal Suite Phase-Out Program existed from 1988 to 1995. The purpose of the Program was to allow property owners with an illegal suite (secondary suites were not permitted at that time) to use their suite for a temporary period, with the understanding that all illegal suites would eventually be phased out. 

One of the conditions for registration in the Program required the property owner to sign an Agreement, which was then registered as a covenant on title to the property. Many of these covenants still exist. An owner of a property that was registered in this Program can have the covenant removed, however, as a condition of removal, the suite must either be closed, (confirmed by inspection) or the property must be Document No: 319753 

listed in the current Secondary Suite Program. The owner is required to pay a fee to discharge the registered covenant. Please contact the District of North Vancouver to confirm current filing and administrative fee. 

It is important to note that registration in this Program did not legitimise the suite – to the contrary, it was recognized by both parties that a contravention of zoning regulations existed and that it would be rectified no later than June 30, 1995. 

13. Billing 

When will I be billed for the additional utility fees? 

Property owners with a secondary suite are billed on their tax notice each year, along with regular utility fees. 

14. When did the new utility fees take effect? 

The additional utility fees for secondary suites came into effect in 2001. They apply for the calendar year. 

Declaring a Suite 

15. I have an unauthorized suite. Am I supposed to declare my suite? 

Yes, it is an offence to use water or sewer services without paying for them. 

Second Kitchen – Not in Use as Suite 

16. I have a second kitchen in my house, but don’t use it as a suite. Do I have to pay the extra charges? What am I expected to do? 

Yes, if the suite is in existence, you are required to pay the charges, even if it isn’t currently occupied. To avoid the charges, you are required to remove the second cooking facility, (this means remove the range, remove the hood vent, remove the range outlet, disconnect the wiring at the panel and remove the electrical breaker). If this applies in your case, call us at (604) 990-2480, once the work has been done, to arrange an inspection. Electrical work or gas work done by a contractor requires a permit. 

*For further information, please contact a Customer Service Clerk at 604-990-2480 or email building@dnv.org 

Please come with any questions you may have. In the meantime you can take a virtual tour of this LoLo Townhouse for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Central Lonsdale Apartment for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

On February 17, the provincial government made several important announcements that will affect BC housing and real estate. The BC Real Estate Association is very pleased with these measures, which demonstrate the government’s recognition of the difficulties experienced by the new housing sector over the past few years.

PST Transition Rules 
April 1, 2013 is the target date for implementation of the Provincial Sales Tax (PST). As of April 1, 2013, the Harmonized Sales Tax (HST) will cease to apply to sales of real property (including residential real property), buyers will not pay the 7% provincial portion of the HST for newly-built homes where construction is at least 10% complete by the target date, and the PST will not apply to real property, or to real estate commissions. For more information, specifically for REALTORS® and their clients, visit BCREA's FAQ about the PST transition rules.

Enhanced BC HST New Housing Rebate
From April 1, 2012 to March 31, 2013, the BC HST New Housing Rebate threshold was increased to $850,000 (from $525,000), with a maximum rebate of $42,500. For more information, visit BCREA's FAQ about the Enhanced BC HST New Housing Rebate.

Grant for New Secondary and Recreational Homes
From April 1, 2012 to March 31, 2013, a provincial grant of up to $42,500 is available to buyers of new secondary or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000. For more details, visit BCREA's information about the Grant for New Secondary and Recreational Homes.

Please come with any questions you may have. In the meantime you can take a virtual tour of this LoLo Townhouse for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this LoLo Townhouse for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

Please come with any questions you may have. In the meantime you can take a virtual tour of this Central Lonsdale Apartment for sale.

As always please do not hesitate to give me a call at 604-788-7792 if I can answer any questions before the open house, or if you would like to book a private showing.

Steve Hamer-Jackson
Prudential Sussex Realty

The market has been off to a great start in 2012! The low rates have continued to drive home prices higher, albeit at a slower rate than in 2011. While some media outlets are reporting that we are long overdue for a correction, the market has been surprisingly resilient.  

I believe the main reason for this is that low mortgage rates are helping sustain higher home prices. From an interest rate perspective, the market has never been this affordable. Put another way, $100,000 borrowed at a 5 year fixed rate, 30 year amortization, and 3.29% interest rate is only costing borrower’s $437 per month. Four years ago, a fully discounted rate was 4.99%, which if using the same variables above, resulted in a payment of $534. calculated That’s a big difference on only $100,000 borrowed, and the majority of buyers are borrowing a lot more than $100,000.  

Using a larger mortgage balance yields an interesting result. On a $600,000 mortgage, your payment on a 25 year mortgage at 5% equals a payment of $3,489 per month. After 5 years, your mortgage balance would be $515,090. If you change the rate to 3.29%, then your payment drops to $2,929, and your balance after 5 years would be $497,093. The lower rate results in a lower payment, which is a surprise to no one, but what’s shocking is that it ALSO results in a lower balance at the end of 5 years ($17,997 lower to be exact).  

Will an increase in rates result in a correction? Of course it will. If homes become more expensive due to increasing rates, then prices will inevitably correct… something has to give. However, that doesn’t change the fact that real estate is an excellent long term investment. I needn’t look further than recent history for proof. Take North Van for example, in 1977 the average price for a home was under $100,000, by 1994 that price had risen to $400,000, and today the average price is $961,000. 

Timing is everything, but patience counts too!
 

View this recently sold House or see all my home sales