Peter Colls


It is wildly unpopular to be positive in B.C. these days. When we are down, we feel down, we want to be down and down we are. Particularly in the real estate market, we like to wallow in our self-imposed misery. No matter what the positive news, no matter what the uplifting statement, it is always countered with a frown followed by a seemingly knowledgeable: "Yeah, but.. this time the real estate market will never recover."


I find this amazing. In 1960, the average Vancouver, home sold for $13,105. Thirty-eight years later, the Real Estate Board of Vancouver reported the average sale price as *$346,540 (September '98, single famiily home). Assuming that in 1960 you had plunked down 10 per cent or $1,310 as down payment and hung in there, you would now be gloating over a 26,555 per-cent retum on that original down payment. And you'd haye a roof over your noggin to boot. Amazing.


Exercise in fantasy, but if this "lift" kept right on trucking for the next 25 years, by the year 2023 that $13,000 home would be commanding $7,119,420. And "antique you" will still have a roof over your gray hairs.

But at various times in our history, the "yeah, buts" scare people out of their chairs. They are told that real estate's day is gone, that this is a New World and that this or that factor will sink real estate investment. Of course, the Chinese have disproved that theory for 2,000 years; the Europeans and North Americans have founded their empires on real estate. In fact, ownership of even the humblest real estate has been the greatest wealth builder - bar none - for the average person.


Home ownership in North America makes the average person wealthier than his or her counterpart in any other part of the world. In fact, it is the defining difference between rich and poor. But no matter... to the naysayer this time it is somehow different.


Today, for some inexplicable reason it is all right for investors to be exhorted to invest for the long term when it comes to highly speculative mutual funds, to "stay the course" even while they suffer outlandish losses in their portfolios. It is all right for gurus to tell the hardworking, saving couple to mortgage their cleartitle home to the hilt and put the cash into mutual funds. Yet a variety of those mutual funds have collapsed up to 90 per cent in value several times in the last 30 years, something you never see in real estate. 

I can't recall any time where I have seen comparable losses in real estate in such a short time. Most losses in real estate come from foolish investments following the wrong trend, listening to a guru, getting  swept up in an emotional "pre-sell" binge or being forced to sell at a particular time. 

Are there no problems on the housing? Of course there are. I am bullish but not foolish. 


The world has changed; the '90s are a frightening place... but so were the '80s, the '70s and the '60s. In 1959, not one house sold in Burnaby. In 1969 I couldn't give away brand new $19 900 full basement homes. 


In 1974 the U.S. stock market crashed by 40 per cent and gloom descended on Vancouver's housing market. Headlines read "Realtors are prowling like hungry tigers," "Real estate prices will never recover again."


In 1981 and 1982 real estate values did crash sharply over a period of 18 months. Five-year mortgage terms were written at 16.5 per cent. In fact, all of the '80s saw five-year mortgage terms at an average interst rate of 12.45 per cent - and never less than 10.75 per cent. In 1988 the end of the real estate world was predicted following the 1987 crash.

Had you listened to all the doom and gloom of 1961,1974 and much of the '80s and not bought al house you would have done a serious disservice to yourself and your family. Of course, this is a new world. You- have to apply some new principles. Get some unbiased advice, listen to where the "yeah, buts" come from, make some intelligent decisions. Discard some of the old standbys. Note that in the new millennium you will make the most money on the day you buy, not when you sell. And forget about location, location, location. Trend and time identifiers will rule.

I have had the privilege to lead big real estate companies, make speeches and write a real estate  newsletter during my 29 years in this business and I know this: There are no good or bad markets, only good and bad deals.

I have seen the absolute worst deals in the so-called very best markets (i.e. some condo hotels in Vancouver and at Whistler in the early '80s as well as the early '90s) and I have seen the very best deals in poor markets. I have listened to the gloom and seen the boom.


Every year for 30 years somebody tells me that there are too many realtors in the business, that no one can afford to buy any more and then they say, "I wish I had bought 10 years ago .... "


Don't become involved in the gloom. Even with modest population increase. predictions we will add 1.3 million more people to the existing 1.8 million in the Lower Mainland by the year 2020. Prices rise on properties  in places where people want to live and not in Porcupine Plains, Saskatchewan, where you can buy a building lot for a buck. People will

want to live here in beautiful British Columbia.

Real estate shopped wisely, purchased with good sense and good unbiased, independent advice will outperform most other Investments you will make in your life. It always has and it always will.


Article written by Ozzie Jurock on Oct 6, 1998 for Business in Vancouver. 

*Since 1998 when this article was written, the Home Price Index composite benchmark price for all residential properties in Greater Vancouver has risen to $601,900

Greater Vancouver 5 Year Price Figures Dec 2012

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30 Days Before Your Move


  • Call a mover early for an estimate
  • Call and inform your insurance agent
  • Notify Post Office of new address
  • Mail change-of-address cards
  • Obtain medical, dental records
  • Notify schools
  • List any questions about your move
  • Ask about cleaning services


2 Weeks Before


  • Arrange to disconnect utilities  
  • Arrange to connect at new home
  • Collect dry cleaning and items sent out for repair
  • Return things borrowed and collect those loaned
  • Create a packing table or area
  • Hold a garage sale to dispose of items


1 Week Before

  • Set items aside to pack in your car
  • Take down the curtains/rods, shelves
  • Arrange for sitter and/or pet care on moving day
  • Make up "Do not move" cartons for articles to be taken in your car

Day Before Moving

  • Empty refrigerator and freezer
  • Clean and air your range
  • Finish packing personal items
  • Get a good night's sleep


Moving Day


  • Be sure that someone is there to answer the mover's questions
  • Inspect all appliances to be sure that they have been serviced
  • Sign/Save copies of bills of lading. Verify delivery address with mover. Advise where you can be reached
  • Strip beds, but leave fitted bottom sheets on mattresses
  • Keep your vacuum ready. Movers will give you ample time to clean hard-to-get areas, like bed rails and the back of your piano
  • Make a final inspection of the house before leaving. Check all rooms and closets. Turn off lights/Lock up tight
  • Provide driver with accurate directions to your new home

Smile... You've done great! Just relax and leave the rest to the movers!


For a printable vertion of this checklist CLICK HERE

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"My kids love this chalet. One day it will be theirs... "


Are you sure?


If it is your intention that your children will one day own the family chalet, beware. It may cost many times what you originally paid for the property to transfer it into their hands years from now. (For the purpose of this article "chalet" refers to a cottage, condominium, vacation/2nd house or undeveloped lot.)

Capital gains rules:

  1. If your chalet has not been specified as a principle residence, it is subject to the same capital gains as any other growth asset.
  2. A taxable disposition occurs at death or when the property is given away as a gift.
  3. 50% of the growth since 1971 must be taken into income in the year the property is disposed of.
  4. Taxes on capital gains may be paid over a 10-year period after death, but interest charges will apply and security for the amount owing must be provided.
  5. Any gain on a chalet triggered by the 1994 lifetime capital gains election will be added to the cost of the property.
  6. With proper planning the taxation of capital gains may be postponed until the latter of the deaths of the two spouses.

How does it work?


Value of 30 years growth       -     $861,000
Initial price of the chalet         -     $150,000
Cost of additions                    -     $ 50,000
Adjusted cost base:               -     $200,000
CAPITAL GAIN:                      -     $861,000
Taxable capital gain at 50%:   -   $330,500
Income tax payable at 50%:    -   $165,250

Can you afford the gift? Can your estate afford the bequest? Or must the chalet be sold to pay the tax? Possible solutions:

  • You, your estate or your children could pay your income tax liabilities from current funds. (Would liquid funds be available? What would you or your children have to give up to pay the tax?)
  • Money could be borrowed to pay the tax. (Would credit be readily available? Would the borrowers have adequate cash flow to repay the loan with interest? What interest rates would be in effect at the time?)
  • The tax could be paid in installments after your death. Would the estate of your children be able to provide the necessary security to Revenue Canada? Would the estate of your heirs have adequate cash flow to repay the amount owing with interest?
  • Appropriately designed life insurance could be put in place to pay the tax. (Income tax liabilities arise on the death of an individual. Life insurance creates tax-free cash on that event to provide a solution.
  • Through careful planning between you and your spouse, the payment of income taxes can be postponed until after the second person's death. This usually makes it a very economical way to pay funds when the second death occurs.
  • Sit down and plan with a professional. Look at your present situation and figure out the desired situation you would like to have for your estate.

Once you have done this it would becomes much easier to figure out the solution that will fit your needs. By planning now, your children and grandchildren will continue to enjoy that chalet that you all love so much.

Trying to decide on where to purchse a recreational property? CLICK HERE to view the RE/MAX Recreational Property Report 2013. Lots of information on the most beautiful areas in Canada to purchase a cabin, chalet, or any other type of investment property or second home. 

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Mortgage rates are down. It's an excellent time for young people to get into the housing market-if they can afford it. Unfortunately, many young people don't have the financial resources to take advantage of the opportunity. Unless, of course, parents or grandparents are willing and able to help out with financing or sage advise.


Share what you know


The advice part doesn't cost anything. If you're a homeowner, you undoubtedly know about property selection, mortgage costs, and all the other aspects of home ownership. Share that information with your children and/or grandchildren. Discuss with them what they can afford, and what their various options are. Then let them make their own decisions.


Ways to help financially

If you have the resources available, you may wish to go further and provide financial assistance to help them buy that first home. There are several ways to do this that don't have to cost you a lot of money. Here are some ideas:


Provide money for a down payment. This can be either a gift or a loan, whichever you prefer. In many ways a loan is better, because it imposes a responsibility on the children to repay the money

The bottom-line cost to you of an interest-free or low-interest loan will depend on what other use you might make of the money. For instance, lets assume the buyer needs $25,000 for a down payment and you are using funds that otherwise would be invested in a five-year Guaranteed Investment Certificate (GIC) at 9.25%. You're in a 45% tax bracket:

  • Case one: Interest Free Loan. You're giving up $2313 a year in GIC interest. However, you'd pay the tax department $1041 of that in tax so you're actually out of pocket $1272- a little more that $100 a month
  • Case two: Low Interest 5% loan. You're giving your child a loan at a very attractive rate. But the after tax difference between your return on this loan and the GIC investment is only $584 a year-about $49 a month.It doesn't seem like a high price to pay to help the children get started
  • Become a joint owner. If you'd like to help the children financially and perhaps make some tax-free profit as well, arrange to become a joint owner of their home. This will enable you to share in any capital gain when the property eventually is sold. If the $100,000 capital gains exemption still is around at that time, you may be able to shelter your entire profit
  • Just make sure the arrangement is properly drawn up and reviewed, and is seen to be fair by everyone involved. You don't want to end up driving a wedge between you and other family members
  •  Buy the house and rent it to them. Purchase the property and rent it to the children with an option to buy. If you charge fair market rent, the tax department should allow you to deduct all appropriate expenses, even though you're not dealing with the children at arm's length


This strategy will enable the children to move right away into the type of home they want, even if they don't have the down payment saved. They can exercise their purchase option when they're financially able


If you decide to use any of these strategies, be sure to obtain legal advice before going ahead, to ensure everything works out as expected. You don't want to run into tax problems or family arguments down the road.

With careful planning and close consultation with your children or grandchildren, you can help them get into their first home now - at minimum cost to you.

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