Appreciating your house.

Long-term homeowners see big profits

By Meagan Fitzpatrick
CanWest News Service
Wednesday, January 24, 2007

OTTAWA — If you bought a house 25 years ago and have stayed put since, you made a wise investment, according to a new study that found the average price for a Canadian home appreciated 264 per cent since 1981.

An analysis of 17 housing markets across the country by Re/Max real estate company released Wednesday found that the average price of a home in Canada rose 5.3 per cent annually on a compounded basis over the 25-year period studied, rising from $76,021 in 1981 to an estimated $277,000 in 2006. On a non-compounded basis, prices rose 11 per cent annually.

The study shows that Canadians who poured their savings into a house 25 years ago are getting a very solid return on their investment, said Michael Polzler, executive vice-president and regional director of Re/Max for Ontario and Atlantic Canada.

“What we see is that Canadians like home ownership. It’s very predictable,” he said in an interview. “They see it as a logical, long-term investment.”

It’s also one you can live in, he added.

“Everybody has to live somewhere, you can’t raise your family in a mutual fund and because of that, there’s always going to be that demand for housing and traditionally real estate has always appreciated,” Polzler said.

Barrie, Ont., a small city located about an hour north of Toronto, led the way with a huge jump of 372 per cent between 1981 and 2006. The compounded annual rate of return for Barrie is 6.4 per cent.

Price appreciation topped 240 per cent in seven other Canadian cities including Ottawa (297 per cent), Montreal (292 per cent), Greater Toronto Area (290 per cent), and Greater Vancouver Area (242 per cent). Victoria reported a 229 per cent jump and Calgary was up 227 per cent.

The top seven markets experienced an annual compounded rate of return ranging from five per cent to 6.4 per cent.

The report highlights several factors that likely contributed to the gradual rise in housing values in Canada. Number one is a 25 per cent increase in Canada’s population over the period studied.

The report also said greater economic diversity in many regions of Canada has increased housing demand and therefore pushed up prices.

Alberta has done well to attract major corporations, for example, Saskatchewan shifted its economic base from agriculture to natural resources and the addition of the high-tech sector to Ottawa played a big role in the health of its residential real estate market, the survey said.

Immigration is another influence, and baby boomers have also been a powerful driver behind housing demand, according to Re/Max. Canadians in that demographic have not only been buying their own homes or retirement properties, but also helping their children to buy their own homes.

“It’s very common that you see the baby boomers helping with the down payments, sometimes more than that,” Polzler explained.

He predicts housing values will continue to climb over the coming year and in the foreseeable future. His advice to younger Canadians is to buy now and reap the rewards later in life.

“You have to live somewhere. You’re paying for your lodging either way so it makes sense to have that as a primary investment strategy,” Polzler said.

The survey used data from real estate boards in the cities included in the study. Of those surveyed, Vancouver was the city where it was most expensive to buy a house last year. The average price was $509,876, making Regina look like a bargain where the average house went for $131, 851.

Average price for a residence in 2006:

- Canada $276,824

- Vancouver $509,876

- Victoria $400,000

- Calgary $346,673

- Edmonton $250,915

- Regina $131, 851

- Saskatoon $160,577

- Toronto $351,941

- Ottawa $257,481

- Montreal $215,659

Should You Get Your Heating Ducts Cleaned?

A hot air furnace heats and distributes air through its ducting system.The ducts are usually made of sheet metal and are most obvious in your basement, where they hang from the floor joists.The return, or cold air, ducts bring air to the furnace, usually collecting it centrally in the house. The return air trunk duct is the big rectangular duct along the basement ceiling that enters the bottom of the furnace. The supply, or warm air, ducting usually exits from the top of the furnace. It starts with a trunk duct on the basement ceiling.The individual supply ducts, in round or smaller rectangular sheet metal, branch off the trunk duct and go to each room, where they terminate in a floor or wall register. Over time, dust and debris will collect in these ducts, particularly in the return air ducts.You may be wondering whether it would be worthwhile to have these ducts cleaned.

Duct cleaning is a major industry. As a homeowner, you may be regularly solicited to have your heating ducts cleaned on a regular basis. Claims are made that duct cleaning will:

- provide you with better indoor air quality (or IAQ),
- reduce the presence of house molds and allergens,
- get rid of house dust,
- result in more airflow and better delivery of warm air, and/or
- reduce energy costs.

If you expect duct cleaning to make these improvements, you may be disappointed. It is difficult to find objective and independent research which substantiates these claims.

What Can Duct Cleaning Do For You?

Duct cleaning can clean your ducts. Thorough, professional duct cleaning will remove dust and debris - pet hair, paper clips, children's toys, and whatever else might collect down there. Ideally, the inside surface will be shiny and bright after cleaning. Duct cleaning may be justifiable to you personally for that very reason: you may not want to have your house air circulated through a duct passage that is not as clean as the rest of the house. However, duct cleaning will not usually change the quality of the air you breathe, nor will it significantly affect airflows or heating costs.

In the 1990s, duct cleaning research conducted by Canada Mortgage and Housing Corporation (CMHC)1,2 and the US Environmental Protection Agency (EPA)3 tested house and duct performance before and after cleaning. Researchers observed little or no discernible differences in the concentrations of house airborne particles or in duct airflows due to duct cleaning. This is because ducts are just metal passages.They cannot create dust. Most household dust comes from outdoor dust that has been tracked in or blows through windows or other openings. Dust is also created by human skin and hair shedding, pet debris, fibres from carpets, clothes, bedding, hobbies etc. In fact, as you walk around in your house you raise a small cloud of dust particles wherever you go. Dust will be present in one form or another whether you have clean ducts or not.

Householders often expect an efficient furnace filter will remove airborne dust. CMHC has tested the effectiveness of furnace filters in reducing household dust. While some very good filters effectively clean the air in the ducts, they do not create a dust-free environment in your house because of all the dust sources mentioned above. A good filter will help keep your air-conditioning coil, furnace heat exchanger, and supply ducts from accumulating circulated dust.

1 Efficiency of Residential Duct Cleaning , Auger, Donnini, and Nguyen Inc. for CMHC 1994
2 Use of Biocides by Residential Duct Cleaners , Figley Consulting Associates for CMHC, 1994
3 Should You Have the Air Ducts in Your Home Cleaned?, US EPA, 1997

When Does Duct Cleaning Make Sense?

There are several situations when duct cleaning could make sense (although there is little research data to support this).

- If you have a problem with water in your ducts, this may result in mold growth in the duct. In this situation, solve the water problem first, clean and disinfect the ducts where mold growth has occurred, and have the rest of the ducting system cleaned as well. In some cases, it may be necessary or more cost effective to simply replace the affected duct areas.

- If you are moving into a newly constructed house, and have doubts about the diligence of the construction crew, duct cleaning can be useful. Drywall dust, fibreglass pieces, and sawdust have no place in ducts. Duct cleaning will also catch the odd occurrence where lunch bags or soft drink cans have fallen or been swept into ducting. For similar reasons, duct cleaning may be advisable for older houses following major renovations.

- If you are having trouble with furnace airflow, a duct cleaning could reveal significant blockages. Have the ducts cleaned before you embark on more expensive duct replacement or rerouting to solve an airflow problem. Cleaning of furnace and air conditioning components (e.g. furnace fan blower, air conditioning coil, humidifier, furnace heat exchanger, etc.) has been shown to make some difference in duct air flow.

- If you look in the return air registers and see an accumulation of debris in the duct below, you may want to have it removed. CMHC research showed that return air ducts, which are relatively big and have slow moving air, are generally far dirtier than the supply ducts.You should be able to accomplish much of the return air duct cleaning with a household vacuum cleaner after removing the register grill. For example, households with hairy pets or forgetful young children may find it necessary to inspect their return air ducts more frequently. Do not expect any difference in airflow or house air quality after this cleaning.

How Should Your Ducts Be Cleaned?

There are various duct cleaning procedures available. Reputable duct cleaners will be familiar with different techniques and their effectiveness. Duct cleaners affiliated with heating and air conditioning firms may be able to provide a more thorough system tune-up. Check to see if the duct cleaners are affiliated with trade organizations.They should also be able to offer references from satisfied customers. Some duct cleaners visually inspect the ducts after their work, either through duct access panels that they cut into the sheet metal or by in-duct cameras. This allows some proof of the effectiveness of the cleaning.

Do not accept offers from duct cleaners to spray or fog the ducts upon completion of the work, ostensibly to get rid of residual bacteria or mold.There are no products registered under the Pest Control Products Act in Canada for residential duct cleaning. Registered products, if they existed, would have been tested for effectiveness and human safety. A proper duct cleaning job does not require the use of a biocide to clean up missed areas. Based on current research, broadcast spraying of biocides through houses is considered inappropriate if you wish to maintain good indoor air quality.

So... To Clean or Not To Clean?

This choice is up to you. Duct cleaning may possibly improve air quality of houses in cases where serious moisture or blockage problems exist in the ducting. A comprehensive cleaning of all heating and cooling system components (furnace fan blower, furnace heat exchange, air conditioning coil, humidifier, ducts, etc.) may help air movement within the house. However, regular duct cleaning is probably unnecessary for most householders.

Some people will choose to have their ducts cleaned simply because they feel that they cannot do this task easily themselves, and they prefer to have any accumulation of dust and dirt within the house removed regularly. Ensure that any duct cleaning that takes place in your home does not include broadcast spraying of biocides within the duct system.

Information from CMHC (Canada Mortgage and Housing Corporation)

Tories announce energy efficiency plan

Last Updated: Sunday, January 21, 2007 | 9:57 PM ET

CBC News

The Conservative government has unveiled a plan to spend $300 million over four years to encourage homeowners, businesses and industry to use energy more efficiently.

"It's time to recognize that the largest untapped source of energy is the energy we waste," said Natural Resources Minister Gary Lunn as he announced the ecoEnergy Efficiency Initiative in Toronto on Sunday.

The Conservatives' latest environmental plan, the third in a series of ecoEnergy initiatives announced over the past week, features three different programs:
• A $220-million program that will offer homeowners and smaller businesses support and information needed to retrofit buildings to make them more energy-efficient.
• A $60-million program in the construction industry to encourage the construction and retrofit of more energy-efficient buildings and houses.
• A $20-million program that aims to accelerate energy-saving investments and the exchange of best practices information within Canada's industrial sector.

Under the retrofit program, the government expects homeowners will receive a grant of up to $5,000, depending on the efficiencies that can be realized, Lunn said.

"Not only will homeowners receive this one-time grant, but they will continue to realize the potential of thousands of dollars in savings in their energy costs, year after year."

"There are more than 13 million homes and 380,000 buildings in this country," the minister said. "They use 30 per cent of our energy and are responsible for almost 30 per cent of Canada's greenhouse gas emissions.

"Canada's industries account for 38 per cent of energy demand and are responsible for 34 per cent of our greenhouse gases," he said.

Last week, the Conservatives unveiled two other environment plans. One would invest in projects that generate electricity by wind, solar and other forms of renewable energy. The other would help clean up the production of conventional energy.

Critics say the plans are similar to incentives launched under the former Liberal government that were put on hold after the Conservatives took office last year.

Former Liberal leadership contender Bob Rae has charged that the Harper Conservatives realize "they missed the boat completely" on the environment in general, and on global warming in particular.

In a shot at the environment minister, Rae, who is working on Liberal campaign strategy, said the government is now doing what he calls the "Baird minimum" while trying to look green.

House prices will climb 15%

For many, condos now only affordable option

Ron Chalmers, The Edmonton Journal

Published: Thursday, January 11, 2007

EDMONTON - Resale home prices will rise 15 per cent in 2007, Edmonton Real Estate Board president Carolyn Pratt predicted Wednesday at the board's annual forecast seminar.

This would bring the average price of single-detached homes to $393,223 -- and beyond the reach of many buyers -- by year-end. "While the suburban dream of a single-family home still dominates in Edmonton, condominiums are being considered by a full range of demographic groups who are seeking both lower entry costs and a simplified lifestyle," Pratt said.

In 2006, 62 per cent of sales were of single-family homes, with condos capturing 31 per cent of the market. The balance was divided among row houses and duplexes.

Richard Goatcher, senior market analyst for Canada Mortgage and Housing Corp., was slightly less bullish.

"I'm hoping that we'll see (increases) closer to 10 per cent," he said.

"Supply will be higher in March and April than it is now," Goatcher said, because many new houses that now are being built will be completed -- causing buyers to sell their current houses.

Goatcher predicted that rents, after rising 10 per cent in 2006, will climb another 12 per cent in 2007 because of low vacancies. "It's pretty disappointing. The number of starts has dropped off because of costs."

Pratt pointed out that "increases in price have made housing unaffordable to a large group of people."

This problem has been compounded by redevelopment, she said.

"In some cases the value of the land under rooming houses and slum housing has increased to the point where the owner can redevelop," she said.

"This removes housing stock for the socially disadvantaged and chronically poor portion of our population."

Realtors cannot fix that problem -- which is forcing more Edmonton residents to live on the streets or in shelters, Pratt said -- but they can "influence the various levels of government to provide assistance" in delivering the basic necessity of housing.

The board's forecast seminar, in the Westin Hotel, was sold out. It attracted more than 500 of Edmonton's 3,100 realtors.

House prices still outpacing income gains, bank says

Last Updated: Wednesday, December 20, 2006 12:53 PM ET

CBC News

The average price of a detached bungalow in Canada jumped more than 12 per cent in the year ended Sept. 30, the Royal Bank's economic department reported Wednesday.

Housing prices rose faster than incomes in the third quarter, RBC said, making the benchmark, 1,200-square-foot bungalow less affordable. But the rate at which housing prices are growing faster than incomes is slowing, so home ownership may be more manageable next year.

"In fact, after three consecutive quarters of sharp deteriorations in affordability, the pace slowed for all home classes in almost every region of the country," said Derek Holt, assistant chief economist. "Alberta's housing affordability was the lone exception, but it will probably join the rest of the country next year."

New home construction and resales are expected to slow down in 2007, which will ease the pressure on house prices, RBC said.

The bank calculated that in the third quarter, bungalows cost an average of $276,293 across the country, although the national figure hides a huge range of prices. Saskatchewan, Manitoba, the Atlantic region and Quebec were lower, while British Columbia and Alberta were above average.

Ontario was close to the average, but Toronto was far above the mark. Vancouver — atnearly $540,000 — was the priciest city.

The bank also calculated the annual income needed to carry a mortgage on a bungalow — nearly $68,000 nationally, ranging from $42,000 in the Atlantic region to $119,000 in Vancouver.

The bank also monitors prices for two-storey homes, condos and row houses, and compared the prices to incomes to develop an affordability index: the share of pre-tax household income needed to cover the costs of owning a home.

Ranked from cheapest to most expensive, the bank said the index is:

- 28 per cent for a standard condo (900 sq. ft.).
- 32 per cent for a standard townhouse (1,000 sq. ft.).
- 40.2 per cent for a detached bungalow (1,200 sq. ft.).
- 45.8 per cent for a standard two-storey (1,500 sq. ft.).

Calgary faces the biggest price pressure.

"While price growth in Toronto has been fairly gradual and sustained, the eye-popping speed of price growth in Calgary (reaching annual gains of 50 per cent to 60 per cent) has moved up so quickly that the current pace of price appreciation is simply unsustainable," the bank said.

House prices stay strong as listings slip to historic lows

Edmonton market expected to heat up this spring, but not as wild as last year's

Ron Chalmers, The Edmonton Journal

Published: Tuesday, December 05, 2006

EDMONTON - Edmonton-area home prices resumed their ascent in November after a brief pause in October.

Average prices rose to $334,039 for detached houses, and $282,434 for all housing types.

Compared to one year earlier, those figures are up 47.7 per cent and 42.5 per cent, respectively.
"Weaknesses in the U.S. or eastern Canada housing sectors are not present in the Edmonton market," Madeline Sarafinchan, president of the Edmonton Real Estate Board, which released the figures, said Monday.

Prices of all housing types fell 0.75 per cent in October from September -- then rose 2.1 per cent from October to November.

"Less than 15 per cent of last month's sales were sold for over the list price," Sarafinchan said. That's down from 37 per cent in July.

While prices are strong, the market has relaxed from the frenzy of earlier months. Listings were down 21 per cent, and sales were down 16.7 per cent from October. The market now has fewer semi-serious or speculative sellers than during the summer. "We saw some of that as prices increased dramatically," Sarafinchan said. "A lot of people were testing the market."

With demand still strong, prices could be pushed higher, she said.

"We are going into the new year with historically low levels of inventory," Sarafinchan noted. "We may see a real hot market in the spring, although maybe not to the same extent as this year."

During November, homes sold after an average of only 26 days on the market, compared to 39 days one year earlier, and 49 days two years earlier.

Home Buyers' Plan

Did you know that you can use your RRSPs for your down payment on your first home? You can by using the Home Buyers’ Plan (HBP).

What is HBP?

The HBP is a program that allows you to withdraw up to $20,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home.

You can click the link below to find out more about the Home Buyers’ Plan.

http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-e.html#P90_8353