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For move-up buyers_ property equity is power - Morningstar Homes

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EDITOR MICHAEL SASGES 604-605-2467                                                    S AT U R DAY, F E B RUA RY 1 4 , 2 0 0 9                             E-MAIL HOMES @ VANCOUVERSUN.COM               I
                                                             For move-up buyers,
                                                           property equity is power
                                                   Couple brings combined 13 years of ownership to new-home purchase in Coquitlam
                                                       BY KIM PEMBERTON
                                                             VANCOUVER SUN




                                             R
                                                      osey Saroya and Anup Manhas
                                                      are in an enviable position, with
                                                      falling house prices. They are
                                                      move-up buyers with enough
                                             equity in their current homes, to make
                                             a profit after selling at a reduced price
                                             and be able to buy more home for their
                                             buck in the current buyer’s market.
                                                The couple recently bought an under-
                                             construction four-bedroom home in
                                             Coquitlam’s Burke Mountain neigh-
                                             bourhood for $640,000, after the builder
                                             slashed about $100,000 from the origi-
                                             nal price. Rosey Saroya, 33, has owned a
                                             townhouse in New Westminster for sev-
                                             en years. Anup Manhas, 36, has owned
                                             an apartment in Coquitlam for six years.
                                             “This (the Coquitlam detached house)
                                             is going to be our dream house. I’m not
                                             a mover. I’m the kind of person who
                                             wants to do it only once,” Rosey Saroya
                                             says.
                                                Yes, the couple will probably start and
                                             raise a family in their Burke Mountain
                                             residence. They are scheduled to move
                                             into their home together in July; they
                                             will wed in September.
  Builders bring                                Anecdotally most buyers right now in
                                             this declining housing market are first-
  backyard living                            time purchasers who recognize low
                                             interest rates and declining house prices
  to spring show                             has finally given them the opportunity
                                             to mount the first rung of the property-
                                             ownership ladder.
        It’s been a busy week at BC             But what about move-up buyers?
        Place, with exhibitors                  These buyers already own a home,
        getting ready for the annual         but either need or want something else,
        spring home show, which              something typically more expensive. As
        starts on Wednesday and              Jennifer Podmore of MPC Intelligence
        runs until Feb. 22.                  — a real estate information and consul-
                                             tancy company — points out, move-ups
        One show-stopper promises
                                             are typically in their 30s and 40s; if sin-
        to be a small home from              gle are typically seeking a larger apart-
        Smallworks Studios/Laneway           ment; and if a (new) couple want to
        Housing of Vancouver. (That’s        merge their accrued equity to buy
        Smallworks principal Jake Fry        together.
        [above] taking a break from             With interest rates at the lowest level
        set-up supervision and posing        seen in a long time they are now in the
        for Vancouver Sun                    position of having purchasing power for
        photographer Ward Perrin.)           homes that were previously unavailable,
        The 624-square-foot                  she says.
                                                But the question is do they wait until
        residence is called a laneway        the market returns to a seller’s market
        home or backyard coach               in order to gain more profit from their
        house; was designed by               existing home or take advantage of low-
        Birmingham & Wood                    er house prices happening now. “We’ve
        Architects; and will be found        never seen interest rates so low coupled
        in the Greater Vancouver             with declining house prices,” says Pod-
        Homes Builders’ Association          more.
        exhibit. Westcoast Homes                She points out last year when interest
        columnist Peter Simpson, the         rates for a five-year fixed term were at
                                             5.5 per cent compared to today’s interest
        association’s chief executive,
                                             rate of 4.5 per cent for the same term a
        is too unassuming in his             person with $15,000 down and an aver-
        column today, leading with           age income of $79,000 would qualify for
        the celebrity advice scheduled       a maximum mortgage of $285,000.
        to make an appearance at the            The lower interest rate the person
        home show. But centrepiecing         qualifies for the same mortgage but
        the laneway home in his              instead of a monthly payment of $1,740
        association’s exhibit was his        would now be required to pay $1,577
        idea. It’s a good one, a right-      monthly.
        for-the-times presentation for          As Saroya points out although they will
                                             not get as much money for their current
        so many reasons. You will            homes they are not too worried because
        find Simpson’s column, and           both the apartment and the townhouse
        more pictures of the house           have doubled in value since they pur-
        under construction on the            chased them.
        floor of the stadium, on I-8.           “Even if we take a bit of a hit it’s still a
                                             bonus. The lower housing price is                                                                                                          STUART DAVIS/VANCOUVER SUN
                                             enabling us to get a lot more house,” she
                                             says.                                             For Rosey Saroya and Anup Manhas, here in a Burke Mountain show home in Coquitlam, an accumulated 13 years of
                                                   Those devaluation blues, I-2                separate home ownership is the foundation of a joint new-home purchase.


  INSIDE                                                                                                                                                                            ONLINE
                             LAUNDERING LAUDABLY                             BEVERLY HILLS HOMAGE                                  THEY CALL ’EM THE GEORGIES
                                                                                                                                                                                    Vancouversun.com is
                             Columnist Kim Davis writes                      A homeowner and architect restore                     The golds and silvers in the annual              your when-you-want-
                             about doing the right thing                     a residence built for, and by, a mid-                 industry competition are pursued                 it show home/room.
                             at your washer and dryer. I-9                   century modern. I-5                                   with vigour – and coveted. I-10




              Your kind of place.Your kind of space.
                                                                                                       The Foothills Information Centre opens on February 21st
                                                                                                  With stunning natural surroundings, easy access to Coquitlam, and a truly connected
                                                                                                      community, the Foothills at Burke Mountain is the perfect place for your family to
                                                                                                           grow. Visit our Information Centre and ask about duplex homes, single-family
                                                                                                                                                                    the low 400,000’s.
                                                                                                                          homes and estate residences starting from $419,900.

                                                                                                                                 t he f oot h i l l s at b urke.com
I2     THE VANCOUVER SUN, SATURDAY, FEBRUARY 14, 2009
                                                                                WESTCOAST HOMES

        In a buyer’s market, devaluations cancel each other
         BY KIM PEMBERTON
              VANCOUVER SUN                    Deals are great — but current home’s fallen worth is a problem                                                                 Coquitlam and North Delta by 15 per
                                                                                                                                                                              cent, for an estimated savings of
                                                                                                                                                                              $100,000 on large single family detached
  Housing prices may be falling but           are doing it despite the great deals out      “But if they’ve owned it three years-    of selling their own homes improve. To   homes, while Polygon for a Richmond
there’s still a psychological hesitation by   there, says Cameron McNeil, of Mac         plus they probably have equity built up.    help try and overcome buyer reluctance   project is throwing in a new Mercedes
move-up buyers willing to take the            Marketing Solutions.                       The bottom line is if you can get a great   many in the house building industry      Benz to help sweeten the deal.
plunge because their current homes              ”The problem is psychologically it’s     price on a quality asset and you’ll be in   have begun to introduce incentives to       Peter Simpson, of the Greater Van-
have depreciated, says housing experts.       hard for them [the move-up buyer] to       the home for the medium to long term        try and sell completed new home prod-    couver Home Builders’ Association, is
  A buyer’s market may be the “perfect        see the condo that was worth $400,000      it’s worthwhile.”                           ucts.                                    one of those who is finding it tempting
time to move up” because your dollar          six months ago now at $320,000,” he           Still, it appears many of these would-     Morningstar Homes for instance just    to move up to a more expensive home in
will buy you more but few homeowners          says.                                      be buyers are waiting until the prospects   reduced prices for two projects in       this softening market.
                                                                                                                                                                                 “My wife and I were out there looking.
                                                                                                                                                                              Prices are very attractive. We looked at
                                                                                                                                                                              a house almost twice the size and the
                                                                                                                                                                              difference in price was $60,000 to move
                                                                                                                                                                              up,” says Simpson.
                                                                                                                                                                                 But in the end, the Simpson have opt-
                                                                                                                                                                              ed not to leave their established neigh-
                                                                                                                                                                              bourhood for the new home because the
                                                                                                                                                                              couple didn’t need the extra space.
                                                                                                                                                                                 “A lot of families need to move up




                                                                        CANADA’S
                                                                                                                                                                              because they have kids. Our kids are
                                                                                                                                                                              grown.”
                                                                                                                                                                                 As Jennifer Podmore of MPC Intelli-
                                                                                                                                                                              gence points out, while the company has
                                                                                                                                                                              noticed more people visiting open hous-




                                                                       ECONOMIC
                                                                                                                                                                              es, there hasn’t been a corresponding
                                                                                                                                                                              increase in sales.
                                                                                                                                                                                  “MPC has been doing daily monitor-
                                                                                                                                                                              ing and we’ve seen a huge level in traffic
                                                                                                                                                                              to sites. We’re definitely seeing more




                                                                     ACTION PLAN
                                                                                                                                                                              people looking,” she says.
                                                                                                                                                                                 “What we tell people is you’ll never be
                                                                                                                                                                              able to see the bottom [in this buyers’
                                                                                                                                                                              market] but as soon as you see some-
                                                                                                                                                                              thing you like that you can afford then
                                                                                                                                                                              buy it.”
                                                                                                                                                                                 In the case of the move-up demo-
                                                                                                                                                                              graphic, Podmore points out most have
                                                                                                                                                                              owned their existing home for more
                                                                                                                                                                              than five years so should have enough
                                                                                                                                                                              equity built up in it to make a move to a
                     The Government of Canada’s proposed Economic Action Plan contains                                                                                        larger home worthwhile.
                                                                                                                                                                                 “The couple who had resigned them-
                     new tax measures that may benefit you.                                                                                                                   selves to believing a single family home
                                                                                                                                                                              was out of reach is now realizing it’s pos-
                                                                                                                                                                              sible,” she says. “Their money is buying
                                                                                                                                                                              them more.”
                     If you’re a homeowner, or are planning to become a homeowner,                                                                                               Rosey Saroya and Anup Manhas are
                                                                                                                                                                              typical of this demographic. They were
                                                                                                                                                                              able to get their dream home — a four
                     the Action Plan can help.                                                                                                                                bedroom, two-and-a-half-bath home in
                                                                                                                                                                              Coquitlam for $100,000 less than the
                                                                                                                                                                              original price. The couple is selling a
                                                                                                                                                                              condo and a townhome in order to com-
                     Support for home renovations                                                                                                                             plete the move to their single family
                                                                                                                                                                              house which sold for $640,000.
                                                                                                                                                                                 Likewise, Gail Tachiyama and her hus-
                                                                                                                                                                              band Matt were also able to move up in
                      ¸ For a limited time, the new Home Renovation Tax Credit means                                                                                          this current housing market from a Burn-
                                                                                                                                                                              aby condo to a townhome in South Surrey.
                               homeowners could receive up to $1,350 in tax relief on                                                                                            Their condo, which they only owned
                                                                                                                                                                              for one year, sold within two weeks for
                               renovation expenses                                                                                                                            their asking price.
                                                                                                                                                                                 “The realtor said we should have
                                                                                                                                                                              asked for $10,000 less than what we got
                                                                                                                                                                              but we though we would give it a try. It
                                                                                                                                                                              was a new building and we kept every-
                     Support for first-time homebuyers                                                                                                                        thing in good condition,” says Tachiya-
                                                                                                                                                                              ma, who adds they were able to make a
                                                                                                                                                                              slight profit.
                                                                                                                                                                                 The big benefit was buying the three-
                      ¸ An increase to $25,000 in the amount you can withdraw from                                                                                            bedroom, two-bath condo and doubling
                                                                                                                                                                              the square footage of their old home —
                               your RRSP under the Home Buyers’ Plan to purchase or build a                                                                                   especially necessary for the couple who
                                                                                                                                                                              are now parents of 10-month-old
                               first home                                                                                                                                     Jamieson.
                                                                                                                                                                                 And while there are sales happening
                                                                                                                                                                              it appears those who aren’t pressed to
                                                                                                                                                                              sell are opting not to put their home on

                      ¸ A First-Time Home Buyers’ Tax Credit that allows you to save up
                                                                                                                                                                              the market.
                                                                                                                                                                                 Statistics from January in the Greater
                                                                                                                                                                              Vancouver region show a continued
                               to $750 on the closing costs of a first home                                                                                                   reduction in the number of homes list-
                                                                                                                                                                              ed for sale, while sales volumes hit the
                                                                                                                                                                              lowest for that month since the early
                                                                                                                                                                              1980s.
                                                                                                                                                                                 The Real Estate Board of Greater Van-
                                                                                                                                                                              couver reports that sales of detached,
                     Canada’s Economic Action Plan                                                                                                                            attached and apartment properties
                                                                                                                                                                              declined 58.1 per cent in January 2009 to

                     www.actionplan.gc.ca                                                                                                                                     762 from the 1,819 sales recorded in Jan-
                                                                                                                                                                              uary 2008.
                                                                                                                                                                                  New listings for detached, attached
                     1 800 O-Canada (1-800-622-6232)                                                                                                                          and apartment properties declined 20.9
                                                                                                                                                                              per cent to 3,700 in January 2009 com-
                                                                                                                                                                              pared to January 2008, when 4,675 new
                     TTY: 1-800-926-9105                                                                                                                                      units were listed. Total active listings in
                                                                                                                                                                              Greater Vancouver currently sit at
                                                                                                                                                                              13,966, down nearly 6,000 listings from
                                                                                                                                                                              October 2008.
                                                                                                                                                                                  REBGV president David Watt says
                                                                                                                                                                              his advice to homeowners is to time the
                                                                                                                                                                              market to their life.
                                                                                                                                                                                 “If your jobs or income are vulnerable
                                                                                                                                                                              I’d stay away from it [home buying],”
                                                                                                                                                                              says Watt.
                                                                                                                                                                                 But, he adds, if you are in a position to
                                                                                                                                                                              buy the “overall drop in prices is favour-
                                                                                                                                                                              ing the buyer moving up.”
                                                                                                                                                                                 Home prices in Vancouver have
                                                                                                                                                                              dropped an estimated 10 per cent in less
                                                                                                                                                                              than one year.
                                                                                                                                                                                              kpemberton@vancouversun.com


                                                                                                                                                                                 WESTCOAST HOMES
                                                                                                                                                                                 WANTS YOUR NEWS
                                                                                                                                                                                Sold recently? Bought?
                                                                                                                                                                                Helped broker a sale or
                                                                                                                                                                                purchase?
                                                                                                                                                                                We at Westcoast
                                                                                                                                                                                Homes think that’s
                                                                                                                                                                                news these days. We
                                                                                                                                                                                know there are buyers
                                                                                                                                                                                and sellers out there.
                                                                                                                                                                                We also know there will
                                                                                                                                                                                continue to be buyers
                                                                                                                                                                                and sellers out there,
                                                                                                                                                                                because of life’s transi-
                                                                                                                                                                                tions: households start,
                                                                                                                                                                                grow, shrink, “transfer,”
                                                                                                                                                                                dissolve. If you are a
                                                                                                                                                                                real estate agent, a
                                                                                                                                                                                seller or a buyer, let us
                                                                                                                                                                                know about your agree-
                                                                                                                                                                                ment of sale and pur-
                                                                                                                                                                                chase with an e-mail
                                                                                                                                                                                to homes@vancouver-
                                                                                                                                                                                sun.com or with a tele-
                                                                                                                                                                                phone call to the Sun
                                                                                                                                                                                newsroom, 604-605-
                                                                                                                                                                                2219.

				
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