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Invest in Real Estate (Posted On: Monday, February 23, 2009)

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You can’t live in an RRSP. Real Estate is your best investment. For most people, purchasing a home has been a necessity of life rather than an investment tool. Yet, over a 25 year period the national Canadian average price of a home appreciated 264 percent from $76,021 to an estimated $277,000 in 2006.

Leading the charge was Barrie, Ontario with an exceptional 372 per cent increase in average price ($51,665 to $244,000) over the 25-year period. The percentage increases that have occurred across the country over the past 25 years show that real estate is a solid investment.

The media has cast a doom and gloom vision of real estate lately, and despite all that you read these days - the future is bright! Canada is ideally positioned to weather the storm.

10 Strengths for Buyers and Sellers in the Canadian Real Estate Market:

1. Subprime Mortgages - Our exposure to subprime mortgages is limited. One quarter of one percent of homes are in arrears in this country and Canadians have more equity in their homes (approx. 70% of the values of residential property). In the US, nearly 3 million households are expected to go into foreclosure by the end of 2009.

2. Strength in Immigration - Between 2001-2006 1.1 million immigrants came to Canada, and more than half settle in Ontario. Many immigrants purchase within 5 years of moving to Canada. This equates to more buyers looking to purchase a home.

3. Interest Rates - Compare to the interest rates of past years (17% in 1980) and we are at a record low with prime hovering around 1%; and rates typically between 5-6% for mortgages.

4. No Capital Gains - Primary residences in this country do not pay capital gains tax when you sell, making your home an even better investment.

5. Tax Free Savings Account (TFSA) and Home Renovation Tax Credit (HRTC) - The new TFSA will allow Canadians to set money aside in eligible investment vehicles and watch those savings grow tax-free throughout their lifetimes. TFSA savings can be used to purchase a new car, renovate a house, save towards a down payment on a home, start a small business or take a family vacation. This can be a very helpful tool for those looking to enter the market or purchase an investment/secondary property.  Also, recently announced was a one time income tax credit on renovations (HRTC) completed during 2009, over $1000 and up to $10,000; for a maximum tax credit of $1350.00.  For more information on these programs; visit

6. Unemployment Rates - Although they will rise, they are not expected to rise to the almost 11% seen in both 1983 and 1992.

7. Provincial Government - We began this fiscal year in a surplus position compared to a deficit position in both 1982 and 1991.

8. GST Reduction - Typically paid on commissions, when purchasing new homes, and business owned properties; the reduction to 5% in 2008 has a significant savings to both buyers and sellers.

9. Demographics - The Baby boomers continue to push the upper end of the market with their purchasing power and search for recreational retirement properties; as well as assisting to elevate the percentage of first time homebuyers by aiding their children in purchasing their first homes.

10. The Green Movement - People are looking to make their homes more green and efficient.  New Provincial and Federal Government initiatives including retrofit rebates of up to $10,000 are offered following an energy audit of your home. An excellent opportunity for Sellers to upgrade their homes and new Buyers to renovate.

Because the average household generates 50-70% of its energy bill through heating and cooling, properly insulating your home is one of the easiest ways to cut back on energy usage and lower your bills year round.  Most conventional insulators, such as fiberglass and mineral wool contain carcinogenic resins and can be challenging to install.  Green entrepreneurism has generated a number of affordable alternative insulators that are made of eco-friendly materials, which are healthier for your family and the environment. 

Here are some alternative to fiberglass and mineral wool to consider for your insulation project:

• Natural Fibers, particularly those made from recycled denim, have been growing in popularity with sustainable builders.  This type of insulation is manufactured with 85% recycled cotton material, contains no chemical irritants and requires no warning labels.  If you insulate with natural fibers, you are also ensuring that those faded 501's, which were headed toward the landfill, can now be recycled into the walls of your home.

• Cellulose is another popular option.  Made from 100% recycled newspapers and cardboard, this alternative requires substantially less energy to manufacture and install than traditional insulation.  Cellulose is available as a loose fill or spray-on material so it fills every crevice preventing energy loss through drafts and condensation caused by air infiltration.  Cellulose costs the same as fiberglass, but is much more environmentally friendly and is just as readily available.

• Paint-on insulation is one of the most flexible of all the emerging materials.  This product, named Nansulate, utilizes nanotechnology.  Microscopic particles fused with acrylic resin create a non-toxic, environmentally-friendly product that is both water and mold resistant. Though more costly than other options, paint-on insulation can be applied to ceilings, walls and flooring making it the most versatile of all the insulators.

• Greensulate is the newest insulating material created from oyster mushrooms.  It is, by far, the cheapest and greenest of all the options with a forecast manufacturing cost of $1 per square foot.  Greensulate is 100% natural, bio-degradable and fire retardant, so it does not require additional chemicals and will bio-degrade when it is no longer in use.  This technology is winning global attention with its unique ability to decrease carbon emissions on a globally significant scale.

Look for these products for your next insulating project.

Compliments of Heather Stitt;
Broker of Re/Max Four Seasons Realty limited Brokerage
705.445.8500 ext. 251 or direct 705.888.1974
Sources: Canadian Real Estate Association, Bank of Canada, Re/Max Ontario Atlantic, Mortgage Bankers Association


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