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INSIDER April 2013

Inside this Issue: Is “Better” Good Enough in The Business of Homeownership? Life At The Top: Canada’s Luxury Property Market Smart Money Anticipates Emergencies Patio Appeal May Add Value to Your Home Food Waste Contributes to Canada’s Garbage Problem

Wayne Your Neighbourhood Real Estate Professional

APRIL ISSUE Is “Better” Enough For The Business of Home Ownership? Written by PJ Wade "Better" is not good enough. We're told the housing market is getting better, and that's great. But when a homeowner wants to sell - or has to - "better" may not be good enough. In many locations, prices are rising and home buyers are out in greater numbers. But is that true for your street or suburb? Are you confident you could sell your current home for enough to cover your existing mortgage and provide an adequate down payment for the next home, plus moving expenses and closing costs at both ends? If you are confident, even optimistic: Positive thinking is important to achieving goals, but they must be realistic to start with. If you're sure about real estate values, why are you sure? Have you arranged an update of the last real estate market evaluation of your home? If not, contact the real estate professional you're confident knows your neighborhood and get the facts on what's sold and which listings expired without a sale. Learn what's actually happening, not what the media is promoting about locations far from yours. Get used to going directly to the source of local real estate knowledge and information. Check with neighbors and local businesses to learn who the recognized real estate experts are in your area. If you discover you could sell and net more than you originally expected, there's still time for "staging" to get the best price possible in the spring market the prime selling season. Luxury realty firm Christie's International

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If you are not confident about your local market, but you remain hopeful:The advice above applies and is even more important to search out. Get rid of assumptions and seek the facts from neighborhood real-estate specialists. If the real estate value you need is not there yet, ask what you can do to help it along. What boosts value on your street or in your condominium complex? Create a plan to build extra equity in your real estate, and then start shopping around for the best contractors or do-it-myself classes. Transform spring into a productive starting point for you and your real estate. If you're sure real estate prices are lagging in your neighborhood, but you want to move on: Getting the facts, not just self-serving promotion, from knowledgeable real estate professionals is essential for your sanity. When I speak to groups of real estate brokers and salespeople, I always ask them whether they believe property owners understand what they can afford, based on the real estate they currently own and what they could buy next. They always answer, "no" - home and condominium owners don't understand what they could accomplish by selling their current home and then buying in the neighborhood that is a natural next step for them. (This comment is true for property owners in the first two bullets, too.) • Ask a few select real estate professionals to help you clarify what the big picture is for you. Gather more than one point of view to add to your own to

clarify your choices. If you sold, what could you net, and what would that allow you to buy? Before you sell and risk the pressure of a buying deadline, investigate the area you're buying into. Since neighborhood housing markets are rarely simultaneously all at the same level, you may get a great deal in an area where prices are currently running on the low side. Could you make up, or exceed, any loss in selling by buying more house or a better neighborhood, or both? Survey after survey confirms that owning your own home remains at the heart of the American dream. The difference now is that ownership is no longer a nobrainer. We've learned the hard way that homeowners benefit from understanding the business of homeownership when buying, selling, and owning their piece of the dream. is loaded with forward-thinking articles on elements of the business of homeownership, as is this column "Decisions & Communities," but it's up to you to put these ideas into action. How are you staying smart about what's happening to real estate values and development in your neighborhood and the one you'd like to move to? Your business of homeownership can't survive on media sound-bites, headlines, and reality shows. Solid information and creative know-how are essential. "Better" regarding anything to do with real estate will never be enough unless we all become "the best" at homeownership. By PJ Wade

Condominiums and Townhouses on the Halifax Common


92 %



Life At The Top: Canada’s Luxury Property Market Written by Jim Adair

Despite a slowdown in the real estate markets in Vancouver and Toronto in 2012, the long-term outlook for the luxury property markets in those cities and elsewhere in the country is bright. A new report by U.K.-based Knight Frank Research ranks Toronto ninth in the world in its list of "the cities that matter to high net worth individuals (HNWIs)". Vancouver is ranked 16th, while Montreal holds down the 31st spot. Besides being attractive to foreign investors, the report says the number of Canadian HNWIs (people with at least $30 million [U.S] in net assets) is set to rise by 35 per cent in the next 10 years, to more than 6,000. Most of them will invest in luxury real estate. For the Cities That Matter rankings, Knight Frank examined four themes: economic activity, political power, quality of life and knowledge and influence. While New York, London and Paris topped the overall list, Toronto lead them all for quality of life (ranking 4th) while Vancouver was 7th and Montreal 16th in that category. The quality of life was measured by looking at "measures of personal and political freedom, censorship, personal security, crime, political stability, health facilities, public services and transport, culture and leisure, climate and the quality of the natural and man-made environment," says Knight Frank. The top three quality of life cities were Zurich, Switzerland and Australia's Sydney and Melbourne. There were 1,765 HNWIs in Toronto in 2012, which ranked 20th in the world. New York and London have the most HNWIs. By 2022, the report says

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Toronto will have 2,367, an increase of 34 per cent. Sotheby's International Realty Canada says the Canadian market for homes priced at over $1 million "is expected to gain momentum and to generate increasing demand from both local and international buyers given strong economic fundamentals, historically low interest rates and a national unemployment rate that has hit a record four-year low." Sotheby's says confidence in the highend home market is reflected in the company's decision to expand into new markets in 2013, including Quebec City and Edmonton. It says the luxury market in Calgary also saw unprecedented growth in 2012. The high-end market took a hit in August of 2012 when the rules were tightened for government-backed mortgages. Homes priced at $1 million are no longer eligible for the mortgage insurance. However, after the change, luxury home prices held steady in Toronto and the number of $1-million homes sold increased by 13 per cent in 2012 compared to the year before. Vancouver saw a 34 per cent drop in the number of $1-million homes sold in 2012 compared to the year before, but the Knight Frank research shows a bright long-term future for that market. Andrew Hay, head of global residential property at Knight Frank, told the Globe & Mail that Vancouver is the most favoured Canadian location for "newly wealthy" individuals from outside the country.

Luxury realty firm Christie's International Real Estate recently introduced a new index that it calls the "first truly global indicator for luxury homes." The index covers 10 cities around the world, including Toronto. "For two years running, the shortest time on the market for luxury properties was 46 days in the luxury market of Toronto," says the Christie's report. It notes that the new lending rules may now lengthen the time on the market numbers. Toronto's prices were second-lowest of the cities surveyed – the lowest was Dallas and the most expensive was London. In a report last year, Re/Max of Western Canada's regional vice-president Elton Ash said, "Given volatility in other areas, housing has emerged as a blue-chip asset among the country's most affluent individuals. The capital gains exempt status ups the appeal, particularly as we see ongoing fluctuations in stocks and uncertainty in Europe. All the variables have come together to support an upper-end market firing on all cylinders." Re/Max says that immigration played a key role in bolstering Canada's population of HNWIs. "A report by BMO Harris Private Banking showed that Canadians of foreign descent account for almost one-third of all HNWIs throughout Canada and that almost all (96 per cent) keep the bulk of their wealth in Canada." Re/Max says that while financing is "not a huge concern for those spending multi-millions, purchases at entrylevel price points are ensuring peace of mind by locking in on five-year money." Luxury condominiums account for a growing percentage of the luxury market, the company says. Last year, high-profile penthouse units in Toronto and Vancouver condominium buildings sold for more than $25 million.

APRIL ISSUE Smart Money Anticipates Emergencies Written by PJ Wade • Homeowners don't always like surprises, especially at this time of year. Spring storms, flooding, winter-damaged roofs, heaved driveways... can all mean money to real estate owners. Unexpected home emergencies can include covering insurance deductibles, accidental falls which affect incomeearning, and broken anything. Add these unplanned cash grabs to what life brings in other areas, and an emergency fund is a necessity, not an option, to preserve financial stability. It's not always the cost that's the main problem when emergencies strike. It's the inconvenience and financial surprise that cause trouble. Suddenly, money is required and must be spent without delay. Although homeowners (and tenants, too) know that stuff happens and emergency funds make good sense, a recent study of more than 8200 employees revealed that almost half resorted to hopeful thinking instead of "saving for a rainy day" and the unexpected. California-based Financial Finesse, a provider of unbiased workplace financial wellness programs, which does not sell products nor manage funds, annually releases research on employee financial issues. The 2012 Study revealed a "mild backslide" in cash management with increases in problems managing cash flow, paying off monthly credit card balances, avoiding late fees, and setting up an emergency fund. Liz Davidson, CEO and founder of Financial Finesse, said "Ninety-one percent of employees in 2012 said they contribute to their 401(k) plan at work‌ At the same time however, only 51 percent of employees say they have an emergency fund in place to cover unexpected expenses. That leaves 49 percent of the employee population vulnerable to tapping their retirement savings because they can't afford expenses outside of the norm." Financial Finesse Think Tank Director Greg Ward emailed: "The real cost of taking [retirement savings] out depends on a number of factors, including age, whether or not it is borrowed or taken as

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a hardship, and investment performance. For example, if a 35 year old has to take $10,000 out of their retirement account as a hardship withdrawal, not only will they have to pay taxes and a 10% penalty ($1,000 in this example), but their account would be over $100,000 less in 30 years assuming an 8% rate of return. Here is a calculator that can estimate the cost of taking a plan loan. In the end, it is really a question of opportunity cost, and how long it is until retirement."

central air in? Safety procedures at home and elsewhere can reduce accidents and related emergencies that can affect income.

Whether you're a homeowner or a wannabe, your practical knowledge of money and related issues, or your Financial literacy has a big impact on success with real estate. Homeownership remains the largest single financial venture for most Americans, so financial literacy represents essential real estate knowledge. Budgeting and other money management strategies are vital to managing your home and vacation property, just as they are to career planning, and starting and operating a home-based business.

Don't waste money on symptoms A wet basement wet basement does not automatically mean the foundation has to be dug out. Clogged gutters and poorly-graded landscaping can introduce water to walls and create a wet interior. These issues are much cheaper to fix, too.

In all these situations and more, what you understand about money can add wealth even with a modest income. Lack of "money smarts" can cost you a lot. If you are earning big money, you won't automatically be successful at wealth building. In contrast, those with modest incomes or small businesses can build wealth, even fortunes. Not that this all starts with creating an emergency fund, but this is one excellent first step in perfecting money management skills. It's not how much you earn, but how much you keep that always matters. If workplace financial literacy programs are ignored by employees, employers may discontinue them. Make these programs useful by challenging service providers to share practical, actionable suggestions and strategies that go beyond "save 10% of your paycheck" basics. Smart Money Strategies Prepare You for Emergencies The goal is never having to use it Regular home maintenance and paying attention to details and strange noises can head off many expensive emergencies. What shape is your furnace or

Don't reinvent the wheel What expense has a neighbor with a home of similar vintage faced recently? Maybe it's finally time to listen to your parents' time-tested advice. Discover what causes common problems and expect them to happen. Then, the question is, "When?" and that you can prepare for.

Who's the local expert? Before an emergency, collect contact information for local repair experts who friends and neighbors turn to when problems pop up. If your house is past its prime, you may want to have one or two "go to" guys evaluate your roof, gutters...and suggest practical minor repairs that delay or end the threat of expensive breakdown. If they're the gems your friends swear they are, these professionals will not take advantage of you, but get second opinions for anything major just in case. Media emphasis on the state of the economy can distract us from the importance of improving our cashmanagement knowledge and skill. One thing remains certain: unexpected, expensive emergencies will continue to pop up. What are you going to do about this?

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WAYNE COCHRANE’S REAL ESTATE INSIDER Canada’s Water Management Crisis: What You Can Do Written by Jim Adair

In a recent consumer survey, the RBC Blue Water Project found that only 23 per cent of Canadians have taken preventative measures such as landscaping with grading or replacing paved surfaces with permeable materials such as interlocking stone or gravel. The survey showed 47 per cent of Canadians say their "ideal" house has a paved driveway or yard and they would be unwilling to change to a permeable alternative.

RBC says 54 per cent of Canadians have paved driveways, and only 24 per cent of urban dwellers currently have unpaved or water permeable driveways.

If you can't stand to be without your paved driveway, consider making it smaller by adding plantings. You can also help by keeping your driveway clean. If your car is leaking oil, have it fixed so the oil doesn't wash into the storm water system (and so your car doesn't let you down at the side of the road). Use a car wash instead of your driveway to keep the wash water, cleaner and sediment out of the storm sewers. Use road salt and sand sparingly in winter.

Aside from the driveway there are other places to keep storm water on your property. Recently Realty Times reported on some techniques to harvest rainwater.

"Canadians continue to have a love affair with paved driveways, and Rain gardens can also be planted in there's a serious trickle-down effect," low-lying areas of the property. They are designed to capture and absorb says Sandford. rainwater quickly, and can provide a habitat for birds, butterflies and fauAlternatives to a paved driveway na. include crushed brick or decorative pebbles. Or, install precast concrete pavers with wide gaps in between to Statistics Canada says that Canadiallow for drainage. Fill the gaps with ans are getting better at water consand or fine gravel instead of con- servation. About 63 per cent of crete. Another alternative is to pave homeowners reported using low-flow two strips spaced for the wheels of shower heads in 2011, more than your car, and plant the middle with twice as many as used them in 1991. About 47 per cent of households had grass or ground cover. a low-flow toilet in 1991, up from only nine per cent in 1991. Several companies also offer "green" driveways that allow you to park on grass without killing it. CORE Grass By Jim Adair features plastic grid panels in a honeycomb design, to which a structural soil mix is added to support the turf. Other companies offering "green" pavers include GOPLA and Ecogrid.

Brain Teasers What Animal Is On the Canadian Quarter?

Word Scramble: TPSIL YRENT

Go to - ‘About Wayne’ and click on ‘Monthly Newsletter Trivia’ for the answers. Page 5


Patio Appeal May Add Value to Your Home By Phoebe Chongchua Depending on where you live, a patio might not be the kind of thing you think about during the cold, and maybe snowy, winter months. But a patio is what many people enjoy on a sunny warm afternoon. It just feels good to sit outside and sip some iced tea or lemonade. That's the picture your real estate agent would want to capture when listing your home for sale.

Patios are appealing because they can create a sense of peace, open space, freedom, and they can seem to extend the square footage of livable space on those good weather days.

Set out on your patio some simple but comfortable patio furniture when you're listing your home and you might find that prospective buyers take a seat and think about your home. Good! Let them soak in the energy of the home. The way it feels. The way it allows them to relax. Set some brochures out on a side table. Maybe even a good book. You'd be surprised what these buyers pick up. If they enjoy themselves while sitting on your patio, you're likely to have piqued their interest in your property.

Your patio should be located close to an entryway to the home, typically the kitchen. This is so that if there is grilling or eating outside, people can easily access the kitchen as opposed to walking through some other room in the house first.

Patios also should be located in areas where there is some level of privacy. A patio is most appealing when you can sit back, relax and enjoy a good meal, book, or conversation without feeling like you're being watched. So the backyard is usually the best location.

Buyers often consider a well-built and maintained patio a plus and may create a higher selling price for your home.

To cover or not? Often when homeowners put in patios, they question if adding a covering would help increase the value of their home. That really depends on many things such as if the covering is well built and maintained and if it's aesthetically pleasing, not blocking views, etc. In the case where it's crafted and maintained well, the patio and its covering can increase the appeal of your home. That So, what if you have a backyard but no could translate to a higher selling price patio; is it worth investing in one? The as well as a faster sale. answer depends on your financial situation but there's no doubt that having a patio or a deck - a space outdoors to relax - is a plus. Written by Phoebe Chongchua However, here are a few tips about creating that patio space. If you have a small backyard, you don't necessarily want to take up the entire space with a concrete patio. The reason? Greenery is also appealing. Basically, you want to have the patio proportionally sized to your yard. So you don't want to have a huge yard and tiny patio nor the opposite.

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WAYNE COCHRANE’S REAL ESTATE INSIDER Food Waste Contributes to Canada’s Garbage Problem Written by Jim Adair Canada ranks 17th out of 17 countries and gets a "D" grade on municipal waste generation in a recent report card by the Conference Board of Canada. It says waste generated per capita in Canada has been steadily rising since 1990, and that the country generates more waste than any of the other countries studied, including the United States, the United Kingdom, France, Italy and Germany. Municipal governments in Canada spent more than $1.8 billion in waste collection in 2008, of which a third was residential waste, according to Statistics Canada. Much of that garbage was made up of food waste, which is taking a lot of money out of taxpayer's pockets and causing a lot of harm to the environment. "It may seem like a little thing to throw out the uneaten half of your sandwich or the limp carrots in your fridge. Collectively, though, this behaviour has significant environmental costs," says the Environmental Commissioner of Ontario in a report called A Terrible Waste: The Environmental Costs of Throwing our Food Away. "Resources that went into the production, packaging, transportation and storage of food - and that are now squandered - could have been saved or put to another use. There are additional environmental consequences associated with disposal of that wasted food." These include the use of water and energy resources, in addition to greenhouse gas (GHG) emissions. "An estimated 20 per cent of global GHG emissions arise from the production and preparation of food," says the report. "To add insult to injury, when that food goes uneaten, methane - a GHG 25 times more potent than carbon dioxide is generated if the food goes to landfill. It has been estimated that if avoidable food waste was eliminated, the reduction of GHG emissions would be

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equivalent to taking one in five cars off the road." All the garbage and food scraps that Canadians generate must go somewhere. Statistics Canada says the average diversion rate (waste that was diverted to recycling and composting) increased from 22 per cent in 2002 to 25 per cent in 2008. Most of the rest of the garbage goes to municipal landfill sites, and less than five per cent is incinerated. Another environmental concern related to landfills is leachate. "As liquid moves through the landfill, it picks up a variety of toxic and polluting components in large or trace amounts forming leachate, which can potentially contaminate ground and surface water," says the Statistics Canada report, Human Activity and the Environment. "Sanitary landfills control the types and quantities of incoming waste and use liners and leachate collection and treatment systems to prevent water and soil contamination." But as the Conference Board report points out, "Although there is ample space to create landfill But as the Conference Board report points out, "Although there is ample space to create landfill sites in Canada, many residents are opposed to having landfills close to their communities." It outlines the problems that the City of Toronto faced when its main landfill site reached capacity. With no sites available near the city, one proposal would have shipped the garbage by rail to Kirkland Lake, Ont., some 590 km north of the city, where it would have been dumped in an abandoned mine. The Kirkland Lake residents objected and the idea was scrapped. For a couple of years Toronto trucked its garbage to a landfill site in Michigan. Finally the city purchased its own landfill site near London, Ont.

"To achieve more sustainable municipal waste management practices, the challenge will be to reduce the amount of solid waste generated, while increasing the amount of waste diverted from landfills through recycling and other initiatives in an economically feasible way," says the Conference Board. "Canadians must also realize that economic growth cannot come at the expense of the environment." To help cut down food waste, Canadians need to rethink the concept of buying their food in bulk to save money. Buying in bulk encourages waste because often food is left over. In the U.K., the Waste and Resources Action Programme (WRAP) has encouraged retailers to initiate programs that reduce food waste. The U.K. has also developed new food labelling guidelines, encouraging retailers to stop using "display until" and "sell by" labels because they cause consumers to throw out the food even when it is still safe to eat it. WRAP's website offers recipes for leftovers and tips about how consumers can reduce waste and save money. The David Suzuki Foundation's Queen of Green site offers these tips for ending food waste: Take produce out of plastic bags, which suffocate fresh produce and speed up the decay process. Don't wash produce until you are ready to eat it. Moisture encourages decomposition and mould growth. Don't rip off fruit stems, because once living cells are broken, microorganisms start to grow. Keep produce whole as long as possible.


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Wayne Cochrane Real Estate Professional 902-830-4761 unless noted otherwise

Note: This is not intended to solicit clients currently under contract. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA.

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Wayne Cochrane's Real Estate Insider  

This newsletter is full of interesting and useful information that I think you will enjoy whether you are a homeowner or currently renting....