Breaking recession psychology

Here's something that everybody knew: we are worried about our jobs and household finances and the country's economy.

The Conference Board of Canada says its December consumer confidence index sank to levels just above the historic lows hit during the recession of 1981-82.
The board had some other bad stuff to say. But we're going to choose to highlight some of the bright spots the board found in its telephone survey of 2,000 Canadians.

For one thing, the survey discovered that, for the second straight month, an increasing number of consumers said it was a good time to buy large items such as TV sets, fridges, stoves, washing machines and cars.

Glen Hodgson, the board's chief economist, noted that optimistic consumers are taking advantage of steep price cuts.

He also pointed out that the economy is in better shape than in the country's two previous recessions. Some predict Canada's unemployment rate could reach eight per cent next year, but that would be down from 13 per cent during the early 1980s and 10 per cent in the early 1990s.

In Canadians' favour is a decline in energy costs, which is taking out some of the sting of filling up cars and heating homes.

Unfortunately, any bright spots are, as Mr. Hodgson noted, being "crowded out by a fear of the future ...and that fear is not totally rational."

The economist is pinning his hopes for an increase in consumer confidence next year on an effective federal stimulus package expected to be announced as part of next month's budget.

If the package works, it could go a long way to breaking the "psychology of recession," which causes consumers to Hodgson also points out that confidence will return once most Canadians realize they are keeping their jobs and, perhaps, getting a small wage increase.

When that starts to happen, you'll see a change in attitude," Mr. Hodgson said.
So, much depends on breaking the "psychology of recession," which takes hold when worried consumers stop spending, which in turn causes retailers and manufacturers to cut back on goods and jobs.

We're counting on our political leaders to give us reason to be hopeful.

Source: Posted By Brantford Expositor

Asher Ullah

www.homesforgta.com

Is your debt is 'Good' or 'Bad'?

People are usually scared and spectacle about the word 'debt'. It reminds them of a feeling of obligation and deficit.


But is it really true? Well their are two types of debts: Good and Bad.


A Bad debt is to finance things that can be consumed. This is the kind of debt that creates an unhealthy financial situation. Credit card debt is often considered bad debt because of the nature of items that credit cards are used to purchase. E.g clothes, restaurants etc.


Even debt used to finance a vacation is bad debt. Even though it might help you feel better and be more productive once you return, a vacation does not appreciate in value.


Debt is good as well. A debt considered an investment is a good one. You’re probably thinking, “How can anything as bad as debt be considered an investment!” If someone took on the debt to purchase something that will increase in value and can contribute to your overall financial health, then it’s very possible that debt is a good one.


For example, a home purchase can be considered to be a good debt. Since homes usually appreciate in value, the mortgage loan to pay for the home is an investment. Another example of a good debt is a student loan taken out to finance a college education. Earning a college degree usually means that you’ll make more money over your lifetime.


Some people consider using good debt to pay off bad debt, like getting a mortgage for $110,000 instead of $100,000 and using the extra to pay off credit card balances. This isn’t a good idea for several reasons. First, repaying debt with debt is never a good idea. Second, it ends up taking longer to pay off the mortgage than it would have otherwise. Third, the higher mortgage increases your monthly payments and the time it takes to build equity in your home.


Use cash to repay debts, not more debt. One must still be careful that don’t take on too much debt, even if it’s good debt. If you’re overloaded with debt, then it doesn’t matter whether the debt is good or bad, it still hurt your financial health.


So now evaluate your financial situation and find out whether the debt you have is good or bad.

Asher Ullah
Sales Representative
Re/Max Active Realty Inc. Brokerage
Mississauga, ON. Ph# 416-568-5932
http://www.estate4tune.com/

What to expect On Dec Dec 9, 2008 Interest Rate Annoucement

Its time for me to put some of my thoughts to share with others.

As we all know that the next scheduled meeting of Bank of Canada will be on Dec 9, 2008 and the important question is what will be the new change in the inetrest rate will be?

Most of the experts are expecting 25 to 50 bases points reduction that will be based on the key market indicators.

Its most likely that the bank will go for 25 bases points and reduce a further 25 bases points in next Jan 22, 2009 meeting.

Most people that have recently bought a home or will be planning to buy a home in near future will be happy with a lower variable rate and off course will enjoy lower monthly payment as well.

But on the other hand the banks wouldn't be happy as they are making the lesser amount money on the variable mortgages, and hence further rate reductions will make things even more difficult for them.

The banks right now are more happy to have a client with fixed mortgage as compare to variable, as they know that the lending rates at least in short run will not be on the increasing trend.

Well lets see what will the expected change would be on Dec 9, 2008. But hopefully it would be one that is good for economy!

Asher Ullah
www.homesforgta.com

Energy-efficient Housing Made More Affordable with Mortgage Loan Insurance

More than 17 percent of the energy consumed in Canada is used to run our homes। Buying an energy-efficient home or making energy-saving renovations can offer big savings. A 10% CMHC mortgage loan insurance premium refund and extended amortization period without surcharge may be available when you use CMHC insured financing to purchase an energy-efficient home or make energy-saving renovations. Help the Planet, Help Your Wallet CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers.

If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium may be available. You could also have the added flexibility of a longer amortization (the period of time required to repay your mortgage) from 25 years to a maximum of 35 years for loan-to-value ratios in excess of 80% (or 40 years for loan-to-value ratios of 80% or less), significantly reducing your monthly payments. The Government of Canada actively promotes energy conservation and initiatives to reduce greenhouse gas emissions that contribute to climate change. How It Works Obtaining an energy assessment through an NRCan qualified energy advisor. NRCan has developed an energy assessment and labelling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, a NRCan qualified energy advisor will evaluate the house to determine its energy efficiency rating on a scale of 0 – 100.

If You're Thinking of Buying or Building a Home

Step 1: Find out how energy-efficient it is If the house you're considering buying is: an energy-efficient R-2000 model; has an energy efficiency rating of 77 (on or after July 27th, 20051) or above; was or will be built under a CMHC-eligible energy-efficient building program; or the building in which the condominium unit you're buying (on or after July 27th, 20051) is 25% more energy efficient, than if constructed to meet the requirements of the Model National Energy Code for Buildings (MNECB), you could be eligible for a 10% mortgage loan insurance premium refund and extended amortization when you use CMHC insured financing to purchase that home or condominium unit. The house's energy efficiency rating can be obtained by: having an energy assessment completed by an NRCan qualified energy advisor; obtaining an R-2000 certificate or CMHC declaration from your R-2000 certified builder; obtaining a CMHC declaration from your builder that is a member of a CMHC-eligible energy-efficient building program; or for condominium units, a letter from Natural Resources Canada (NRCan) or the project engineer for condominium units must be obtained. If you are planning on building a new home and your builder is not R-2000 certified or a member of a CMHC eligible energy-efficient building program, you should have an energy advisor evaluate the building plans before the house is built. This can help you ensure that you will meet CMHC's requirements once the construction of the home is complete and it is evaluated. 1 An energy rating of 80 is required for purchases occurring on or after November 18th 2004 and until July 26th 2005.

Step 2: Boost your energy efficiency If the house you plan to buy has an energy rating below 77 (effective July 27th, 2005. A rating of 80 is required for purchases and renovations occurring on or after November 18th, 2004 and until July 26th, 2005), to be eligible for a 10% premium refund, you will need to obtain an energy assessment through a NRCan qualified energy advisor and renovate using part of the CMHC insured funds based on your energy advisor's list of recommendations in order to increase your score by at least 5 points and to at least 40 overall.

Step 3: Discuss and arrange a CMHC-insured mortgage Talk to your lender and ask for a CMHC insured mortgage. Step 4: Confirm the improvement After you make the renovations recommended by your energy advisor, you will need to have a second assessment done to determine the energy-saving effectiveness of the renovations। To be eligible for the 10% premium refund, the second rating must show that the house has achieved an increase of 5 points to a minimum overall rating of 40.

Step 4: Confirm the improvement
After you make the renovations recommended by your energy advisor, you will need to have a second assessment done to determine the energy-saving effectiveness of the renovations. To be eligible for the 10% premium refund, the second rating must show that the house has achieved an increase of 5 points to a minimum overall rating of 40.

Step 5: CMHC 10% Premium Refund
Submit a complete application form to CMHC for the refund.

For Futehr details: kindly go to the Web site http://www.cmhc.ca/en/co/moloin/moloin_008.cfm

Till next time:

Asher Ullah
www.homesforgta.com

Is that a good time to buy?

Well Folks this is me back again and answering the most important question in regards to todays market: "Is this is the right time to buy? or just wait?".

Most of the people are thinking that right now wait and see strategy will works best instead of actullay going for a "BIG' decision of buying a home. As anything can happen interms of economy, jobs etc.

My answer to those people is that what will happen if God forbid your job will not be their tommorow? how will you pay your rent even?How will you pay your other expenses?

I woudl say its actullay the best time to buy as not only prices are great but at the same time negocitations are easier as well. Though I must say that its not an ideal time for selling your property.

The market works in cycle and real estate is the most safest of them all. A small low in shorter run will provides a window of opportunity to avail chance as in the longer run the real estate will always goes up. Also keep in mind the great intrest rates that are there and will be there for a while as well.

All I can say is that those going against the tide will be benefiting, otherwise the market once come back to its normal, will not help you in saving money at that time.

So folks stop thinking and start acting, those who act will for sure. Buy things when they are on 'sale' instead of when they are at their normal price.

Asher Ullah
www.homesforgta.com

The Market - Today and Tommorow

Well folks time for me to start writing again.

For those that have recently burned fingers in TSX and NSE will be thrilled on getting news about strong market rallies for last two days.

Investors in any market go with basically two big options for investments:
1) Stocks
2) Real Estate

Out of the two which one is better ????? Hummmm...

Well the answer lies in how much Risk an investor can take. The higher the risk is the better the the results will be.

I am not advocating that real estate is far more better to option as its more secure and way less riskier then Stocks. But what I am saying is that its size of your risk that one can take from the uncertainty to certainty. If you can take the high level of risk then the stocks for sure have a much quicker return as compare to real estate.

But in my opinion a rule of thumb is to diverse your investments and go with the amount of risk that you can take with a combination of both.

Until next time!

Asher
Sales Representative
www.homesforgta.com
Re/Max Active Realty Inc.

Housing Market Condition

There’s been a lot of talk about real estate in the news in recent months. We’ve heard about declining housing starts, falling existing home sales, double-digit price depreciation, subprime fallout and foreclosures – in the United States. Fortunately, we live in Canada. And Canadian real estate markets are far-better positioned than their American counterparts for a good number of reasons.
Subprime mortgages represent less than five per cent of our market nationally.
Foreclosures occur in about one quarter of one per cent of mortgage transactions in this country.
Canadians have more equity in their homes.
We have less debt than our neighbours south of the border.
Speculation has played little or no role in existing home sales in Ontario.
The fundamentals of our economy are relatively solid. Of the G8 countries, only Canada is expected to show growth in 2008 and 2009.
The Canadian banking system is one of the best in the world, relying more on old-fashioned lending than innovative financial products geared toward profit.
The Canadian job market is stronger than the US, adding more than 200,000 jobs so far this year.
Interest rates remain favourable.
Housing values in Ontario major centres did not experience serious, double-digit price appreciation year-after-year for an extended period. Our markets were characterized by stable, healthy growth.
Immigration continues to play a key role in housing markets. Between 2001 and 2006, more than 1.1 million immigrants came to this country, with about half settling in the province of Ontario. Immigrants tend to purchase a home within the first five years of living in Canada.

Asher
www.homesforgta.com

Market Update -

Hi Folks!

Well after sometime I am back again.

People are asking about the market hapenings right now.

Well all I can say is that its not Canada that is shwoing signs for slowness, but in fact its all over the globe that is showing similar signs.

Canada is still has the strongest ecocnomy in the G 8 countries. And the proactive strategy will help up to cope up the porblems before they will happen.

Market is still good in terms of the realestate. And one important thing is that we are already in a conventional slow time of year and it will pick up in now after winter.

So just chill and stop worrying about more upcomming things. i.e. are you in best of your physical shape for showling the snow form driveway?? lol.

Till next time!

Asher
www.homesforgta.com

Grow House in Vaughan

I was showing a home last week in Vaughan around Jane and Major Mac area and my client liked a fabulous detached corner home an a Court location.

The home was about 8 years old and has got an excellent layout and my clients loved that.

My clients were ready to put up an offer but while talking to one of the neighbours found out that it was a former Grow house, and was busted by police.

After knowing this information I did the complete analysis about the previous sales record and didn't find any particular thing about the house.

Finally I inquire with the listing agent and he was clue less in that as well, and lastly he told me that he will further investigate with the seller. I also told him that if it was formally a grow house either the police may have the4 record or even they don't then the home inspector will find out for sure.

Later on the listing agent called me and was very upset and told me that the seller now accepted that is was a grow house before when they bought it about three years ago but did the environmental survey as well and they have a report.

Anyways later on it was updated on listing as well that it was used as grow house and changed the price as well.

Finally in protecting my client's best interest I advise the pros and cons about buying grow house and and the clients appreciated this alot.

This was a second House that I have found out in last two years that emerges as a grow house, and the common thing is that both of them were in the north side of GTA. But remember they can be in any city.

Ash
Re/Max Active Realty INc.
www.homesforgta.com
416-568-5932