The Downsizers Dilemma

by Zoe Van Wyck, Sales Representative with the Bennett Property Shop Realty

               Do you ever wonder what it would be like to live a simpler life? Although it may require some lifestyle tweaking  to get there, do you realize how attainable it really is? This seems to be the mindset of the majority of Canadians as the flock of baby boomers have been contemplating the low maintenance lifestyle of condo living. With this ongoing trend and new condo’s popping up all over the city, the appeal and possibility is there. However, for a lot of these downsizers, even with this seemingly simple solution at hand, something is blocking the path to making the final decision to move forward and ‘make the change’.
               Certainly ‘making the change’ will require some effort to adjust; especially after dealing with the same routine for years and years. The idea of a lifestyle adjustment may present itself as an overwhelming feat requiring a great deal of energy and effort. It may be this notion of change alone that seems to instill in them the most fear. But fear has always been the greatest enemy in our decision making ability, as it does a fantastic job of holding us back.
               One of the main factors instilling this sense of fear is the conflict between the desire for zero maintenance versus the sacrifice of ‘space and things’. “Where will I put my 12 Rubbermaid containers of yarn?” one asks, “Where am I going to put those magazines I’ve been accumulating since 1965?”, says another. Well, the response to these concerns is nowhere. And that this is the whole point. The intention of downsizing is just that: downsizing. 
               Evidently there are adjustments to be made. It is a huge lifestyle change, without a doubt. But when a lifestyle change offers so many benefits, and the ability to alleviate so many of your burdens, why put it off any longer? Why not enjoy that ‘lock and leave lifestyle’ everyone is talking about right now! Don’t spend one more winter shoveling your 4 car driveway, tending to your lawn that never seems to stay green, or paying to air condition all ten rooms in your home…when you use only three of them.
               While the majority of baby boomers are still in their “contemplation stage” there are many that have benefitted from this lifestyle leap already – the downsizing dilemma is on its way out. It’s only a matter of time until this demographic fully accepts and adjusts to this trend and begins to wholeheartedly embrace the change. With Ottawa having the largest baby boomer population per capita, you can be assured that once the acceptance of condo living for downsizers truly hits, and all that fear subsides, there will be a shift in the market. All of those large, family homes will be scattering the market and the competition will be fierce. You don’t want to be caught trying to sell your house in a buyers’ market, especially if you’re nearing retirement. Don’t you want to get top dollar for your home?!
                Don’t get left behind! Get started now and contact the Bennett Property Shop today! Be a front runner and you will benefit far greater than those who sit back and let their fear affect their future.
                 You can thank me later.


Visit www.bennettpros.com for all your real estate needs.

Don't Buy the Doom and Gloom - New Reports Challenge the Myth of the Condo Bubble

 

You may be familiar with this gem from the great American humourist Mark Twain: “The reports of my death have been greatly exaggerated.”

 

I can’t imagine a more suitable quote to sum up recent media coverage of the Canadian condo market. Story after story perpetuates the negative message that the market can’t be sustained.

 

Frankly, these pieces are grossly distorting the facts, and misleading the public in the process.

 

To help set the record straight, I wanted to share the gist of the CMHC’s 2013 annual report. Spoiler alert: it’s good news.

  

The condo market has certainly grown quickly. Between 1981 and 2011, the growth rate for owner-occupied condos in Canada outstripped that of other homes by over nine times. By 2011, we had a total of 1,615,000 occupied condos, with most new construction occurring in urban centres.

 

While past numbers are solid, how can we be sure the trend will hold?

 

Let’s consider who’s buying condos. Quick answer: all kinds of people. To distill the numbers, in 2011, 29 per cent of condo owners were seniors, while nearly one-fifth were under 35. Close to half of condo owner-occupiers lived alone, while over a quarter were couples without children.

 

Are these demographic groups likely to grow? Fascinatingly, CMHC found that people living alone – let’s call them solo dwellers – are expected to become the most common household type by the 2020s. In another growing trend, couples with children account for fewer households than ever. For many seniors, young singles and urban couples, condos’ affordability, security and worry-free lifestyle makes them a natural choice. (At the same time, in large urban centres, more growing families are turning to condo living, à la Manhattan.)

 

But what about all those empty high-rise suites we keep hearing about? Let’s add some perspective. According to a December report released by BMO Capital Markets senior economist Sal Guatieri, “The number of newly built, unoccupied condos is not high when normalized for population growth.”

 

CMHC points out that current condo construction rates are in keeping with rising numbers of one-member households, immigration and a general shift towards more compact dwellings. In other words, condos aren’t going anywhere.

 

Where condominiums are concerned, Ottawa is still in its infancy. With such tremendous potential for growth, purchasing a condo in this city is still among the best investments around.

Visit www.bennettpros.com for all your real estate needs.

Women the new ‘wildcard’ in the condo market

Women the new ‘wildcard’ in the condo market

Megan Vickell is a new brand of condominium owner that people predicting a market crash may have forgotten to factor in.

She’s young, single and ready to buy her first home. And, more importantly, she’s female — part of a growing demographic that just might be creating a new paradigm in the housing sector.

A report from Canada Mortgage and Housing Corp. shows women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65% of owner occupants in 2011.

Condo owners: By the numbers

•19% Percentage of condominium owners under the age of 35; 29% were seniors 65 or older.

•65% Percentage of women among condo owner-occupants who live alone.

•2.5 Average number of people in a household size in 2011, down from 3.5 people in 1971.

•12.6% Percentage of Canadian homeowners who lived in a condo in 2011.

•42% Percentage of condo owners that are one-person households

•35.1% Percentage of Vancouver homeowners who live in a condo, the highest in the country.

•71% Among Canadians with a mortgage, the percentage of people with more than 25% equity.

•7% Percentage of people with less than 10% down.

•31% The percentage of Canadians with a mortgage in arrears, as of June, 2013.

The female factor is even more prevalent among older women with 76% of those 55 and older living alone women. Among lone-parents, women make up 84% of condominium owners.

It’s not just one thing about condos that is pushing Ms. Vickell to look at a high-rise. The public relations manager of eBay Canada says she’s close to putting in an offer this week on a 650 square foot unit.

“When I was looking I was grumbling because a lot of the maintenance fees were so high but then I was walking down the street after a big snowfall, and all these people were snowed in,  I thought ‘for a single female, I’m willing to pay those fees’,” she says. “I don’t even know where to start with half that stuff around the house.”

There are other perks of condominium living that attracts her to the market, including the 24-hour seven-day a week concierge service. “It’s everything you need in one place. There is someone to take my packages when I’m not there, I’ve got a gym. It’s really just all about convenient living,” says Ms. Vickell.

She sees the condominium as a stepping stone to a house. “I think of it as a five-year plan,” she says.

The condominium market shows few signs of slowing down. CMHC said this month November new construction reached 194,014 on a seasonally adjusted annualized basis, well above the number we need based on demographics. Multiples, which includes high-rise condominium units, made up 111,036 of the figure.

Growth in owner-occupied condominiums has exploded over the last three decades, according to the CMHC report. In 1981, there were 171,000 owner-occupied condo units but that figure grew to 1,154,000 by 2011.

Benjamin Tal, deputy chief economist with CIBC World Markets, agrees that women may be the unknown wildcard in determining whether the condominium market can continue its explosive growth.

“One point we’ve made when we’ve said this market is crazy is people need to look at demographics in a different way,” says Mr. Tal. “People buy a house now and don’t marry. Sure there’s the divorce rate being high but many young people in their 30s are not married but busy with careers and buying a home because they have the means. This is a new wave of demand that hasn’t been there before.”

What hasn’t really taken hold, based on the survey, is families considering condominiums. The largest chunk of condo owners are one person households at 42%, followed by couples without children at 28%.

Mr. Tal’s prediction is that in time we will see more families moving into condominiums, it’s just too early to see it any statistics.

“This will be the thing of the future. We are maybe five, six or 10 years from that,” he says.

The condo phenomenon remains mostly a story for Canada’s two most expensive markets with 51% of all new condo starts in 2012 happening in Toronto and Vancouver. Investors continue to drive both markets with 23% of condo apartment units in Toronto rented in 2012 and 26% in Vancouver.

Overall, there seems to be little question that the condominium is going to become a major part of the housing stock in Canada. CMHC noted that in 1981 only 3.3% of homeowners lived in a condo. That percentage grew to 12.6% in 2011.


Source: http://business.financialpost.com/2013/12/18/canada-condo-market/

Selecting The Perfect Place To Live In Ottaw

Housing is one of the most basic needs that every person has to satisfy, one way or another in their life.

Usually, during the first few years of independence, most people move around from place to place depending upon the place’s affordability and the person’s job situation.

Most people try to make the best of what they have with each place they live in, whether that place be owned or rented.

However, almost everyone at one time or another aspires to eventually have his or her own perfect Ottawa home – their “Dream Home” - and that’s when and where the search begins for the perfect place to live.

Location, Location, Location

Just about everyone has an ideal location for where they want to live. For some, it is the peace and quiet of the countryside; while others prefer the hustle and bustle of the big city. There are yet others who want a little bit of both, so they move into the suburbs.

Generally speaking, where a person chooses to live will dictate the type of housing they want and how much it will cost. Hence property evaluation is hugely impacted by “Location, Location, Location:

There are pros and cons to each and every environment or location, and, in a nut-shell,  here are a few of them:

City/Urban – Cities are always the cultural hubs for any region. Many younger people, when they first live on their own, tend to flock toward city living for the multitude of things to do and people to do them with. Depending on the city, noise, crime, traffic patterns and congestion, population densities and smog can be negative factors for people who are starting families or prefer some quiet.  For other folks, however, those factors, coupled with numerous restaurants, clubs and social events are a great lure to locate there.

Rural – Small town and country living account for a large number of residences across Canada.  Small towns are surrounded by large tracts of land or water.  Farming and industry comprise the major structure of such communities, and the culture that exists in these small towns most often results from or revolves around those activities.  This is the best locale for people who prefer peace and quiet, open spaces and cleaner air; as well as for those who seek a simpler environment in which to raise their kids. But in order to enjoy the excitement of what a city has to offer or to go to one’s downtown office requires a commute – sometimes of considerable distance and time - and often through less-than-desirable weather.

Suburban – This type of residence location is the so-called “happy medium” between the above two extremes. Suburban settings have reasonably-ready access to the cultural highlights of city living, usually have their own small sets of businesses, while maintaining a semi-placid atmosphere for those who desire it. Suburbs can vary from being quite city-like to almost rural depending upon how close it sits to either the city or the country.

Of course, the cost of living is directly affected by the location chosen. Typically cities and suburbs will cost more to live in because of the amenities and services these communities provide as well as because of the income level and spending habits of the majority of people who choose to live or work there.

Type of Housing

As we all know, different people have different needs and wants – or as it’s summed up colloquially:  “Different strokes for different folks”.

A person with a need or desire for less space usually doesn’t buy a big house. And equally true is the exact opposite.

Condominium-living is a great option when looking for a place for one or two people. After all, for a myriad of historical and economic reasons, condos are often all a person can find or afford in a downtown setting anyway.

Historically, as industrialization and crime sullied inner city environments, the desire for safer, cleaner, quieter and more family-friendly areas sprang up and so the “urban sprawl” started.  This migration from the city core to houses in the near-city countryside provided these homeowners with more space, more quiet – but also created greater demand for roads, vehicles and a myriad of home maintenance products – and all of this extra commuting and property maintenance ate up a lot of the home-owners’ free-time and budget.  Nowadays, the resurgence of people into the centre of cities is in part due to the suburbanites’ kids’ desire not to spend their time commuting and maintaining the property surrounding a suburban home as the new generation’s dream is not the same as was their parents’ or grandparents’.   It also reflects the desires of the aging population to be closer to the entertainment and health amenities or facilities (restaurants, museums, hospitals, etc.) that they now value more.

Satisfaction

The Bennett Property Shop Realty knows that the ultimate decision in finding the “perfect” place to live comes down to each person’s personal preference based upon their specific life-style and economics situation whether they currently be a renter or a home-owner.

They strongly recommend that each person consider or investigate several different types of locations and different Ottawa homes for sale before deciding what is “right” for them because, quite succinctly, there is no black or white in housing selection, but rather only a balancing of one’s attraction to a specific place in light of and balance with one’s personal needs, personal preferences and personal affordability.

5 Reasons Why You Should Open an RRSP

The RRSP or the Registered Retirement Savings Plan is a Canadian account registered with the federal government and the accounts characteristics are based on holding investment assets and savings. The RRSP was first introduced in 1957 to encourage employees to save for their retirement. However, there are certain rules and regulations that determine the timing of the contribution, the tax credit, the claim of the contributing value, the asset allowed, the maximum contribution and the conversion to RRIF (Registered Retirement Income Fund) during retirement.

There are a lot of benefits of having an RRSP as a savings options for retirement and here a just a few:

Tax Deductions on Contributions

Your RRSP contribution is basically a claim for a deduction on your tax returns. For instance, you’re positioned on the top tax bracket and every $1,000 that you contribute decreases your tax amount by approximately $460. However, if you find yourself with lower income, in a year you can carry forward your deductions for your contribution to the next year when your income increases. This way even though you would be in a higher tax bracket your tax savings would be greater.

Tax Free Savings

As long as your investment earnings stay within the RRSP you won’t have to pay any tax. Instead this investment earning is tax free; since it is compounded, your savings increase much faster.

Converting Your RRSP to Regular Payments during Retirement

If you’re looking for regular payments then you can convert your RRSP tax free savings into an annuity or a Registered Retirement Income Fund (RRIF) which pays out regular payments when you retire, but you’ll have to pay tax on the regular payments that are made.

Reducing Your Combined Tax Payment by Opting For a Spousal RRSP

If you’re thinking about helping your spouse with their tax free savings account, you can easily contribute especially if you earn more than your spouse. The both of you can go for a spousal RRSP, where on retirement the amount will be split equally amongst you two and thus reduces the total tax amount that you have to pay.

To Pay For Your Home or Education You Can Borrow From Your RRSP

If you’re thinking about borrowing money from your RRSP, you can take out up to $20,000 for the payment of yourself or your spouse’s education according to the Lifelong Learning Plan (LLP). You can borrow up to $25,000 as a down payment for your home according to the Home Buyers Plan (HBP). You won’t have to pay any tax.

If you already have an RRSP and it is not performing, the Bennett Team has a great program that can use your RRSPs to invest in real estate and generate a 8% secured annual return - that's better than any bank at the moment! Are you tired of loosing money in your RRSPs or STRESSED about your retirement visit www.bennettpros.com for details on this innovative program.

Visit www.bennettpros.com for all your real estate needs.

After the Move: Handling Warranty Issues during the First Year

From those first tentative steps towards purchasing a new home in Ottawa, you’ve come a long way! As you unpack your boxes, position your furniture and hang your artwork, you can feel this home becoming your own. You’re probably a little tired – but the exhilaration is enough to keep you going.

Ideally, this feeling is strengthened with the confidence that your Ottawa home has been built to meet both building codes and your own exacting specifications. In most cases, when you’ve chosen your home builder after proper research, and completed a thorough pre-delivery inspection (PDI) as I discussed in my previous blogs, you can rest easy that things are as they should be.

Sometimes, however, items are missed during that initial inspection. When this happens, it’s important for you to understand the proper course of action to take. Ontario’s Tarion Warranty Program is structured to deal with Ottawa homeowner complaints in a very specific manner; in order to take advantage of the program, it’s necessary that you fill out the appropriate forms and meet set deadlines.

Details of the process are outlined in A Guide to Your New Home Warranty, provided by Tarion to all new home buyers. As much as I urge my clients to become familiar with this guide, the truth is that amid the flurry of your Ottawa home search, purchase and move, it can be a lot of information to digest. Here are some major points to remember:

There are one year, two year and seven year warranties that apply to various aspects of your home.

If you discover a problem with your home within the first year of living there, you have two opportunities to file a warranty form. The 30-Day Form must be filed within 30 days of taking possession, while the Year-End Form must be filed within the last 30 days of the first year.

Naturally, it’s in your best interest to submit a report sooner rather than later, so I recommend paying particular attention to construction details during your first couple of weeks of occupancy. As well, some Ottawa homeowners who missed the chance to hire a home inspector during the PDI may choose to do so prior to the end of the year for an added sense of security.

New home ownership isn’t without its responsibilities; but attention to detail now will pay off in the long run. Here’s to a wonderful first year!

Visit www.bennettpros.com for all your real estate needs.

Investing your capital in the Capital: Home ownership in Ottawa

Ottawa-Gatineau has earned the first-place ranking for best Canadian city as ranked by MoneySense magazine for 2011 and 2012, in fact, Ottawa has taken it a total of five times in the past six years. As far as cities go, we’re the one to beat.

For the 2013 results click here.

What is it that makes Ottawa-Gatineau so appealing? The MoneySense study ranks 180 Canadian cities, taking into account such diverse factors as arts and culture, crime rate, household income, medical doctors per capita, rates of employment and air quality. We had consistently good scores in nearly every category – including, believe it or not, better-than-average marks for weather!

Now, I know that not many of us have the luxury of choosing the city in which we live strictly according to the appeal of its image. (Hello, Honolulu!) Most of us have to work our jobs, families and pocketbooks into the equation. On top of that, a lot of us feel deep emotional connections to the places we live, and no study is going to determine whether we stay or go. We Ottowans already know firsthand what we love about our Ottawa Home.

However, if you’re toying with the idea of home ownership in Ottawa, it’s great to know that you’re about to buy in one of the most desirable markets in the country. It’s often been said that your Ottawa home is probably the biggest financial investment you’ll ever make – and you’ll want to make that investment in a place that will hold its value over time. 

While Ottawa home prices here are higher than many in smaller communities, they compare favourably with other large cities in Canada. According to MoneySense, this region has an average home price of $352,020. Given the enviable average household income in Ottawa ($98,980), this is pretty affordable. Contrast these prices with Vancouver, where it will take you $882,000 to net you an “average” home!

Here’s what I take away from the MoneySense study: whether you’re Ottawa-born and bred or a relative newcomer, you can feel confident about purchasing a home in Ottawa, the city you already call home.

Visit www.bennettpros.com for all your real estate needs.