Archives for category: Personal Finance

More Canadians are acknowledging they may be reaching the upper limits on borrowing, a new poll shows. Details

More Canadians acknowledge they may be reaching the upper limits on borrowing, even though they believe they are in the safe zone now, a new survey shows.

Rising IT salaries
The good news for IT workers: jobs are relatively plentiful and about to become more so. The bad news is that salaries are stuck in low gear.

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Talk isn’t necessarily cheap when you’re on a cell phone, particularly if you’re addicted to your BlackBerry, iPhone or Android.

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Experts agree that there are clear warning signs when things in the market aren’t quite right. What the signs are saying

Experts say it’s impossible to say for certain when, or if at all, a bubble is going to pop. However, they agree that there are clear warning signs when things in the market aren’t quite right.

Read more….

> Flipping real estate? Here’s how to do it right
> Biggest traps to avoid. Home buyers mistakes
> What your agent isn’t saying

Find out about the pros & cons of buying (or selling) a home in uncertain times

Before the bubble bursts: understanding the real estate market
What you need to know about buying and selling a home now

Canadian homebuyers are in a conundrum. For several years, analysts have warned that home prices are out of control and will soon collapse the same way the American real estate market did a few years ago. And yet prices keep rising and homebuyers keep purchasing due to the easy availability of credit — and fear that the market may soon become unaffordable. Here are the top guidelines you need to know about the queasy state of the market and what to do if you are a homeowner.

For pessimists: Why the real estate market will crash

Studies show houses become unaffordable when they exceed three times a family’s salary. Currently, most homes are 4.6 times our salaries. Further, the Toronto condo market is in a glut; if no more units were built now, there would be no real demand for five years. That’s because up to 60 per cent of buyers are speculating investors who will sell when conditions change. Moreover, wages are not keeping pace with house prices. Therefore, when interest rates do rise, house prices could drop by 25 per cent.

* VideoThe condo market in Canada

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

For optimists: Why the real estate market won’t crash

Higher interest rates will hurt prices but rates are unlikely to rise in this current global downturn. Unlike the U.S., we can’t just walk away from homes we shouldn’t have bought in the first place, which means we need to be prudent buyers. Further, the restrictions on buying are getting tighter, and while large cities like Toronto and Vancouver are showing extremes in prices, the situation is not the same in most other parts of Canada.

* BingWill interest rates rise in 2012?

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Renting: Why you should be doing it

While house prices are sky-high, rental prices are stable or even falling in many markets. A recent study showed that if you invested money in low-risk bonds, you would come out richer than paying down a mortgage and waiting for your home to appreciate. Renting is cheaper, gives you more flexibility and you don’t have to pay five per cent commission when you pull up stakes and move to another property. Life-long renting isn’t acceptable in Canada like it is in Europe — get over it and rent.

* VideoBuying into a U.S. housing recovery

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Decoding real estate jargon

Don’t be confused by expectations and reality; learn what these market phrases really mean:

Sunny corner lot: The house is located on an intersection — probably a busy intersection.
Large family room: Large, open basement that only makes sense if you stick a few couches down there.
Lots of storage space: The basement is just too small to be considered living space.
Cozy bedrooms: Not a single room could fit a full size queen.
Newly remodelled kitchen: The 50-year-old cabinetry and faucets were finally ripped out and replaced with cheaper equivalents.
Storybook charm: The house is old, small and doesn’t have a flat roof.

* BingWorld’s most expensive cities

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Why doesn’t anyone want this house?

The market has gotten so frothy that the lack of a bidding war on a solid property raises suspicions about structural faults in the building. While caution is always necessary when you are making the largest purchase of your life, take sensible steps to ensure you are doing the right thing. Remember, when bidding wars happen, buyers overpay. So if you’re feeling uneasy, check out comparable homes and review the inspector’s report. Maybe you are just getting a really great buy.

* VideoHow long can real estate prices in Vancouver and Toronto defy gravity?

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Mike Holmes on why we should slow down

‘I’d like to wave a wand and make people slow down. A husband and wife who decide they want a new kitchen tend to hire a cabinet company before checking out if they have asbestos in the plaster — anything before 1980 has a 50 per cent chance of this — or lead in the paint or need new plumbing or electrical work. That’s just not logical. People also tend to spend more money on the inside of their home than the outside. And I have to tell you, when you do a $30,000-plus kitchen and haven’t even looked at your roof in the last 10 years, it doesn’t make sense to me. You need to address the outside first.’

* BingWhat is Mike Holmes’ net worth?

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Four indicators that predict when the housing bubble will burst

Popular economist Robert Shiller of Yale University has written that U.S. house prices peaked two years before the market crashed. The implication for Canada is that, if you are just watching house prices, you may miss the warning signs that the Canadian market bubble will burst. In brief, the fours indicators of an impending crash are: 1) a huge run-up in house prices; 2) a growing negative outlook by homeowners about property value increases; 3) a drop in the number of potential buyers visiting houses for sale; and 4) a drop in the number of house permits issued.

* VideoCMHC’s housing outlook

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

The best day to list your home is …

According to Redfin, a U.S. online real estate brokerage, Fridays are the best day to debut your home. Redfin found that homes listed on a Friday are 12 per cent more likely to sell within 90 days and sell much closer to the original list price. Also, homes listed on a Friday got 19 per cent more prospective buyers through the door.

The theory behind a Friday listing is that it’s fresh in a buyer’s mind. A Friday listing makes it to the top of a potential buyer’s list created for weekend viewings.

* BingWhat is the best season for selling a home?

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Why owning a home is a bad investment

Everyone needs a place to live but homeowners who think a house can serve the dual purpose of a home and an investment may be wrong. Consider: the basic rule of investing is to diversify your assets by type or region (Canadian stocks, U.S. bonds). However, a house can’t be diversified and therefore its whole value is influenced by uncontrollable events like interest rates, the jobless rate and the growth of the neighbourhood. A home is also an illiquid investment, one that can’t be sold at a moment’s notice like shares of a company.

* VideoCanadian housing bubble?

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Why paying for an appraisal is worth it

Online home appraisals are beginning to proliferate. The tool is in demand for owners who wish to find out the value of their home but don’t want a formal appraisal. However, homeowners are forewarned: the online tools are assessing a few top level home features, comparing your home to recent sales and arriving at an appraisal. The problem with this is that neither the specific features of your home, nor the homes it is being compared with, are taken into consideration when arriving at an average price.

* BingMost expensive homes in Canada

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

How to calculate what you really made on your home

House prices across Canada are soaring. If you bought ten years ago and sold now you would earn a huge profit, right? Not so fast. Instead of subtracting what you paid for your property from what you sold it for, you have to make the following calculations: subtract what you still owe on the mortgage and the down payment, the legal and realtor fees for buying and selling, plus ten years of mortgage payments and property taxes and home improvements. Check again to see if you really made a profit on your home sale.

* VideoThe condo market in Canada

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Which renos add value? (and which don’t)

Conventional wisdom dictates that remodelling your bathroom or kitchen will drive up the sale price of your home. Unfortunately, that has been disproved by a survey by Remodeling Magazine. If you remodel your attic into a bedroom at a cost of $50,000, you might see 72 per cent of the costs recouped and replacing all your windows could get two-thirds of the cost returned. On the other hand, a new front door can get you a 102 per cent return on your renovation. However, there are some renos that are just not worth it. A new roof will only bring back about 60 per cent of the costs while a $40,000 bathroom will only return about 50 per cent.

* BingTips on hiring a contractor

Canada’s richest postal codes
The secrets behind Tim Hortons cupsizing
Gail Vaz-Oxlade’s tips for saving more money
The MoneySense guide to smart house buying and selling

Rich forced to ditch summer homes post-recession

RRSPs

People come up with many reasons for not using RRSPs to plan for retirement, but here are the reasons you should. What to know >>>

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The nation’s top bank warns that people have set themselves up for the ‘perfect storm’ of financial problems. Indicators>>>