If you live in an area that is outside city limits, but still think of it as “Nanaimo” (ex. Cedar, Extension) you are in the Regional District of Nanaimo which is a different municipal entity.

For more information you can contact the City of Nanaimo directly at the number shown.

Ryan Coffey

Having said that, the money to run the province has to come from somewhere and not being a political science major or having a background in macro economics it’s hard for me to say what they would replace this tax with. I suppose this is why I have kept thinking about this article.

I am still grumpy about the HST though.

Ryan Coffey

Time to axe transfer tax

By Darrell Bellaart, The Daily NewsAugust 11, 2010

It’s time the provincial government started taking a hard look at eradicating the property transfer tax.

The B.C. Real Estate Association is keeping up its push to axe the PTT and has been busy arranging meetings with senior members of government for this September.

Now that the province has followed Ontario’s lead by harmonizing provincial sales taxes with their federal counterpart, it takes away one of the province’s biggest arguments for keeping the tax in place.

Provincial officials wonder how they would replace the millions of dollars the PTT brings in. In the 2002-03 tax year, it added

$400 million to provincial coffers and that amount grew by about $100 million each year afterward, reaching a peak of more than

$1 billion before the real estate market retreated in 2008.

Anyone who has bought a house in the past decade will be familiar with the shocking experience on closing day of sitting at the lawyer’s office and learning that the price of the transaction is several thousand dollars more than expected.

The reason is that in B.C. the first $200,000 is taxed at 1% but anything above that amount is taxed at 2%. The total is tallied up and inserted as a line item on closing day.

For the average Nanaimo homebuyer closing the deal on a $350,000 property, they can expect an additional $5,000 in taxes, which most people will likely add to their mortgage.

Add that to the legal fees, real-estate commissions, assessment and inspection costs and annual property taxes and insurance costs and it contributes considerably to the total the average person shells out each month to keep a roof over their head.

B.C. is not the only province with property-transfer taxes. Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island also use them, but in a recent analysis done for BCREA by economist Stanley W. Hamilton, he said the way B.C. applies the tax makes it “the highest property-transfer tax in Canada,” outside metropolitan Toronto, where a separate municipal tax jacks it up even higher.

Taxation pays for important services like health care and education and social services for the poor and needy.

But a shelter tax has unexpected social costs. It affects rental rates and that means it affects everyone, especially those people surviving on welfare and pensions who suddenly can no longer afford renting.

Many people now live in alleys, under bridges and in abandoned buildings. Suddenly, the province has a homelessness problem, requiring even more tax money to solve.

Taxes alone didn’t drive shelter costs up, but it did play a role.

Nanaimo realtor Jim Stewart was the chairman of the association’s committee fighting to axe the tax for more than 15 years. He says the government “does a terrible job of dealing with issues like affordable housing.”

He’s right. When the government gets involved, projects become more expensive due partly to standards unknown elsewhere in the marketplace. It drove the unit costs of a housing project on Meredith Road through the roof.

When former premier Bill Vander Zalm introduced the PTT in 1988, he said it would be a rich-man’s tax since it only applied to properties beyond the reach of the average worker. Twenty years later, it affects virtually all homes sold in the province.

The BCREA calls for a gradual phase-out of the tax, starting with eliminating the 1% portion applicable on the first $200,000. A year later, it proposes removing it on homes below $500,000, before abolishing it completely.

It’s time to axe the PTT.

So, what does this have to do with real estate? Well… if you don’t enjoy the area you’re living in, then what’s the point of being there? Life us full of choices and opportunities if you can recognize them and then have the strength to follow through with them.

So here is what inspired this latest sobering moment of appreciation for my area and my choice of settling down here:

On Friday, I had finished my work early and my wife had as well. We decided to go a for a short walk before dinner. Piper’s Lagoon is only a five minute drive from my place and after some discussion about which of the nearby places along the waterfront to go to, we decided to go there. If you are local, you will know it immediately, if not there is a map at the bottom of this post. Suffice to say that it is one of the oceanfront parks in Nanaimo.

While we were walking along the short trail, a bald eagle swooped by us eyeing us in the way that they do. No big deal. This is fairly normal around here but still kind of neat to see. They are quite magnificent with their grace, colourful talons and beaks not to mention a wingspan that is… well… a little intimidating when they fly close by. But again, this was no big deal as it’s not so unusual see them up close, especially if you’re in a treed area by the ocean front.

We came to a spot where you can sit on the edge of a cliff and stare out at the ocean without anything but air between you and the water. Past the ocean, or maybe I should say “straight” you can see the coastal mountains of the sunshine coast. Typical stuff around here as well, but still a nice spot to relax. We sat there for a bit and while we were there relaxing, off in the distance I kept hearing a sort of chirping sound that is similar to the sound that a bald eagle usually makes but it was more sustained, and even a little panicked. Stepping out from the cover of the trees I looked up and saw a group of them gliding in the wind. It was hard to be sure, but I believe I saw at least five. Many of them did not have the white head so I presumed them to be adolescent. “Neat.”  I thought, “Flying lessons for the young ones are going on. Must be for more than one family if there’s that many of them.”

But I still kept hearing the consistent squealing chirp that was coming from somewhere in the trees. I was wondering whether one had fallen and gotten hurt while trying to fly or if it was simply still in the nest and basically screaming “What about me? Hey, you guys! I wanna come too! …but I’m terrified!” I figured that if it was the former, I would keep my distance and call the experts who handle such things as there’s no telling what getting involved with an injured eagle that is with its family would mean for me. Upon finding the nest I realized that it was the latter.

My wife, being a city gal, had as far as I know not seen such a thing before so I called her over to the area near, but not threatningly close to, their nest. At the top of a giant and very old douglas fir was an enourmous nest from which a great deal of vocal commotion was arising. In my mind, the translation would have been something like “MOM! MOM! MOM! MOM!” or “WAAAAAAH!! I WANNA PLAY TOO!!” One of the parents (I can’t tell which is which) was flying around the nest eyeing whoever was in it as if to say “Come on! Let’s go!” I have no idea how long this had been going on before I found the nest, but my wife and I stood there for about five minutes before the next development in the story.

The young one took the leap of faith and it was plainly obvious that it was the first time for this one. Why? Well, the downward awkward flapping of wings in a state of total panic while squealing in a way that would most accurately be translated as cuss words AND while doing a slow downward spiral with all the grace of a donkey on rollerskates is a dead giveaway. I lost sight of it during the downward spiral but I think it landed on a branch that was out of view as I saw one of the parents glide by such a spot a few times at this point.

So I got to watch a bald eagle take its first flight and it was pretty neat to watch. Much better than watching it on TV.

My Friday: Worked, then went for a walk in an oceanfront park five minutes from my place, watched a bald eagle take its first flight, went home and ate a meal mostly made of quality locally grown food (there is a glut of wild salmon this time of year) and then drove ten minutes down the road to an eight-plex movie theater (which is past the six-plex) and watched a movie premier. After gas, food and movie I spent less than $20 for all of this. Take that big city.

I’ve lived in the world’s biggest city (Tokyo) for a time and I’ve also lived way out in the middle of nature (in the Queen Charlotte Islands) not to mention a long list of places that are somewhere between those two extremes. This is the right balance for me and part of what inspires me in my work. It’s not hard to sell something you believe in.

Ryan Coffey

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In the system we use, and in these times, foreclosures typically sell at around the same price they would were they not a foreclosure. You may have some friend or an uncle or something who swears that they saved a bundle when they bought a foreclosure one time. This may very well be,  as it does happen. But it usually doesn’t and you can also occasionally get the same sort of deal on a conventionally sold house.

The process of buying a foreclosure in this part of the world is long and uncertain. The offers need to be subject free by the time it finally goes to the courtroom so you need to have already lined up all your investigation of the property, mortgage, home inspection and the like beforehand. And then in the courtroom you may be suddenly outbid. All that work, effort, waiting and money so that you will potentially (often) have to start over again. Oh, and by the way, since the bank is the one you’re buying it from (who never lived there) just who are you going to sue if it turns out that there is a major problem that wasn’t visible or known to anyone involved in the transaction at the time of inspection? Foreclosure listings are “as is, where is”.

There is one type of buyer who I think foreclosures are right for. The sort of buyer who already makes a living in real estate investment. They probably already own a couple of rental properties and make the rest of their income by fixing up and eventually selling properties when the market is right. They are the sort of buyer who knows what a place is really worth, what it will take to fix it up (as foreclosures are more often than not in poor condition) and above all are familiar enough with the real estate process to know what to expect and not be surprised or otherwise greatly excited by what does or doesn’t happen.

So, if any of this is news to you and the risk of  a property with a costly latent defect (with no one to sue over) outweighs potential benefits, I would say that foreclosures aren’t for you.

But here’s the golden tip: Divorces and deaths are where the real deals are most often found. Not always, but sometimes people are too upset to deal with the sale in a way the reaps the full financial benefits they could normally get. The caveat is that they can be time consuming and complicated as well, but are generally less so than foreclosures.

This is a sad topic, but human drama of all sorts is a situation that us Realtors work in daily.  Part of our job is keeping a cool head while surrounded by grief, excitement, joy, fear, anger, or other  emotional chaos so that our clients can get the best service possible whether they recognize it at the time or not. That’s my take on it anyway.

Ryan Coffey

The main reason why you should own real estate  is because your equity (the portion of the value which is yours and not the bank’s) will almost certainly grow over time. It’s not so much a question of “if” it will grow as it is a question of “how long”. This is the part which I think loses a lot of those new to the concept of real estate. It takes time. In a boom market it may only be a couple of years, but generally speaking it takes more like 5-10 for a substantial change in the property’s value. Time and time again I see listings for places that have recently sold where the selling price is nearly double what they paid for it ten years ago. If they’ve done more than just replace the roof and the hot water tank in that time, it may be more. It may not be too, as it is very case by case but my point is that such an increase in value is not unusual. Of course, it should be mentioned that we had a boom time for most of the 00’s but I still stand by my point overall as although from 1990 to 2000 we only saw a 50% increase in average sale price for houses in Nanaimo, we saw it triple from 1985 to 1995.

Here are the stats from the real estate board to support my arguement.

Nanaimo-single-family-stats-1982-2009

Just in case that little drop during last year’s slow market is a concern for you let me point out that prices have already begun to climb again. Have a look.

06-jun_10_nanaimo_graphstats

You see, the bubble never burst here. Although there was certainly a big slowdown in numbers of sales we didn’t see a huge drop in prices like so many people who get their info from mainstream media were led to believe. We weren’t inundated with foreclosures, nor were places selling at a fraction of the value they were a couple of years before. People just seem to need something to freak out over once in a while. Besides, real estate was on sale for a time there and those of you who were to scared to buy at the time but could have, missed out on a good opportunity. Don’t fret though. I always say that in terms of the market, there are good times to buy and better times to buy. You just need to figure out what is affordable to you by talking to a mortgage broker.

Ryan Coffey

I look at so many houses, condos and the like. I see so many ideas, both old and new, for decorating homes, making them more livable, functional or durable. But when I was stumbling through the depths of the internet one night not long ago, I came across this product that still managed to excite me. I see so much potential for creative people, office workers, people with kids and basically anyone who doesn’t want to clutter the house with little bits of paper that are intended as a temporary holding place for their ideas.

The creators of this product claim that it’s able to turn any surface into a white board and that you can leave marks there indefinitely without staining the wall.

Ryan Coffey

Except… it’s not real estate investing advice per se. If you’re opening a retail business of some kind, “Location, location location.” definitely is a huge concern, but when buying a home or most kinds of investment properties, this is just one of various very important factors. I’m not exactly sure how this got twisted into real estate advice that is repeated ad nauseum by media outlets and ironically by the odd Realtor who puts it in a listing to emphasize one that property’s finer points. (Listings are ads after all.)

Sure, you can buy a place as a holding property because the location is such that the density is increasing in the area, there is clearly some gentrification going on and it is the last place in the area with a really good view. But there are other factors that are at least as important. Is the particular property worth the money they’re asking for it? Will it need a lot of expensive things fixed/maintained over the next few years? What if you find out that there is an old buried oil tank on the property, that it has a lot of faulty wiring, or extensive mould problems throughout?

Now here’s the kicker, what if you can barely afford the property and you find out that any of the serious issues above are true? Are you still going to buy the property because it has a great location? That’s flirting with bankruptcy in my eyes.

There’s no need to reduce real estate to a single snappy saying. The broader principles aren’t that complex (keep sifting through this blog and they will become clear in time) but the specifics that apply to each transaction are in fact super complex which is why we have Realtors, Lawyers, Mortgage Brokers, CMHC, Insurers and Home Inspectors involved with nearly every transaction. Ask us professionals for information that will help you with the decisions you make.  Making big decisions that are based on a generally misused proverb… is likely to end badly.

When I’m in work mode, the numbers and stats and locations and condition of places are all whizzing around in my consciousness in a whirlwind of business calculation. This peice of information really resonated with me last night because I was not in that mode and because I was not looking for real estate information at the time. I didn’t see anything I didn’t already know about, but this open mindset made me see this familiar information with clarity. What a difference in a short distance.

I can literally see Vancouver from my doorstep, yet when it comes to real estate prices it may as well be another country. Things are roughly twice the price there. Sure, there is more economic, cultural and social activity there. It’s a city after all. But there are also the social ills, the cost of living, the noise and the long commutes. That’s life in the city.

Here in my medium sized town (a little over 100,000 people in the district) I am always still discovering new stores,  restaurants, people, parks and activities. At the same time it’s small enough for me to run into people I know once in a while should I head out in public. I like feeling like part of a community but also being anonymous when I want to be. I can drive everywhere I need to withing twenty minutes too.

Should I crave some city life, downtown Vancouver is just twenty minutes away by float plane from our own downtown. Or, if I should choose to save some money or take my car with me to the city, there are two ferries to choose from as well.

On the other hand, wilderness is just as easy to get to as well.

I once spent ten years on the road travelling all over North America and Japan, and a bit of Europe. No more. I’m done. I’m staying here in the area I grew up in. It’s funny how we sometimes have to give up what we have in order to appreciate it. An affordable medium between both city and wilderness.

Ryan Coffey

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I am choosing this topic first not because it is the one that I see people hurting themselves with the most, but rather because it is the one that will simply not go away. The most common question people ask me  is after all “How’s the market?”.

My hypothesis of why the notion of good markets and bad markets is so firmly entrenched in the public mind is simply because we live in a world where most often people hear about real estate from media outlets or as part of some other sort of “news”. News by definition needs something new to talk about. The fundamentals of real estate change slowly if at all. So, what they hear about most often is not necessarily the most important stuff to understand, it’s just the stuff that has changed lately. Pump it full of drama and it’s ready for public consumption.

I explain my views on this is detail in the series  “When To Buy And Sell.” (Go to the oldest post in this section to start.) Having said all this I want to make it clear that I am not suggesting that what the market is doing will have no effect on you or your financial well being. I am saying that this is secondary to your financial standing as well as some other factors in most cases. One can pick these things apart and dissect it into a million peices. I do that a bit in the series mentioned above, and a lot more in my daily working life. In the end, it always comes back to the above for me.

So what is this viewpoint I have for homeowners you may ask? (Or maybe you’re just asking “Why don’t you get to the point already?”) Well,  the short of  is quite simple. What you can afford is more important than what the real estate market is doing. You have to remember that all the dramas about ups and downs are short term and that in the long term values rise. This simple truth is what makes real estate such a good investment for both homeowners and professional investors. It requires patience though.

When you can understand and appreciate the statement “There are no good markets or bad markets. I all depends on what cards you are holding.” then you are starting to hear where I am coming from. If it still sounds like a Zen koan (riddle) to you, then you need to keep reading.

“It’s a startling finding, one that is reinforced by respondents’ overwhelmingly positive attitudes about Canada’s welcoming and tolerant treatment of newcomers. The results bode well for Canada’s efforts to attract highly educated immigrants as the global search for talent heats up in coming years.”

Click here for the full article.

Ryan Coffey