Edmonton Real Estate Blog

Edmonton’s healthy residential housing market was the first to emerge from the depths of the recession, with sales surpassing year-to-date figures for 2008 in June 2009. Low interest rates, greater affordability, and pent-up demand were behind the push for real estate early in the year, as consumer confidence levels slowly escalated. First-time buyers snapped up entry-level product at significant cost savings. By October, momentum had reached the top-end of the market, with sales over $750,000 moving ahead of 2008 levels. Given the solid percentage increases reported since June, the number of homes sold by year-end is expected to climb to 20,500 units, up 18 per cent over 2008, and on par with 2007 figures. Average price, after peaking in 2007 at $338,636, has since stabilized at $321,000-down just four per cent from 2008 levels. The balanced residential marketplace took both realtors and consumers by surprise in 2009, many of whom hoped for the best but prepared for the worst. However, economic performance, with a 2.8 per cent decline in GDP growth forecast for 2009, has been less than stellar. The energy sector continues to battle back in Alberta-oil prices are on the upswing and forecast to rise further next year. While challenges still lie ahead, some positive industry developments, namely the Kearl oil sands project, are hoped to return to the oil sector to a growth cycle or at least off set recent contraction.

The good news is that real GDP is expected to climb three per cent in Alberta in 2010, bolstered by housing, new construction, a recovering oil and gas sector, and consumer spending. Oil prices are expected to hover around the $80 mark-which should serve to kick-start activity in the mega sand projects. Improving global demand for commodities is forecast to place upward pressure on prices, while rising confidence and more normal crop conditions should also have a positive impact on economic performance in 2010. Retail sales at 5.6 per cent will be one of the top performers in the country, falling just behind British Columbia and Saskatchewan. Unemployment levels hover at approximately 7.1 per cent.

Building on the real estate recovery already underway, the number of homes sold in Edmonton is expected to edge slightly higher in 2010, rising to 21,000, up two per cent over 2009. Housing values, finally on the upswing, should reach an estimated $330,000 by yearend 2010-a three per cent increase over one year earlier. Inventory levels-at about 5,500-are forecast to remain stable, representing a three to four month supply. Market conditions should be balanced throughout much of the year, leaning slightly in favour of the seller. First-time buyers are expected to once again play a significant role, stimulating activity in virtually every segment of the market. It’s anticipated that demand for condominiums will be constant, given their affordable entry-point. An influx of new conversion units in months ahead should be absorbed relatively quickly but fewer multi-unit housing starts in 2010 overall may apply some pressure to the resale market.

With barely a month to go before the end of the year, it is time to get your house in order. Herewith, your top 10 end-of-year tax tips:

1. Tax-loss selling

This is the practice of selling investments that are in a loss position at year-end in order to offset capital gains elsewhere in your portfolio. To guarantee that a trade of public securities is settled in 2009, the trade date must be Dec. 24, 2009, or earlier. This will make sure that the settlement takes place in 2009 and that any losses realized are available to the taxpayer this year. Any trade made after Dec. 24, 2009 will not settle until 2010, so those losses would not be available until next year.

2. Fix your house

The deadline is fast approaching to qualify for the home renovation tax credit (HRTC). The HRTC is a 15% tax credit for eligible renovation expenditures made to your home or vacation property. The credit applies to any amounts spent over $1,000, up to a maximum of $10,000, producing a maximum credit of $1,350.

Although the deadline for the credit is Jan. 31, 2010, the Canada Revenue Agency (CRA) has stated that as long as any materials you purchase to be used in a renovation are acquired by this deadline, they will qualify for the credit, even if they are installed after January 2010. The same, however, does not hold true for labour expenses, as only work completed before February 2010 will qualify for the credit, even if the amount is prepaid.

3. Turning 71 in 2009?

If so, you must convert your RRSP into either a Registered Retirement Income Fund (RRIF) or a registered annuity by Dec. 31. In addition, you only have until Dec. 31 to make your last RRSP contribution — if you plan to do so. You don’t have the advantage of delaying until March 1, 2010. If, however, you have a spouse or partner who is under 72, you can continue contributing to a spousal RRSP in his or her name, provided you still have contribution room.

4. Contribute to your children’s future

If you have a child or grandchild who has never participated as a beneficiary in a Registered Education Savings Plan and who turned 15 sometime in 2009, Dec. 31 is the last chance to contribute at least $2,000 to his or her RESP to be allowed to collect the 20% Canada Education Savings Grant for 2009 and create eligibility for the grant in 2010 and 2011. If you miss the deadline, the child or grandchild will not be eligible for any grants in the future.

5. Give big

Dec. 31 is also the last day to make a donation and get a tax receipt for 2009. Keep in mind that gifting publicly-traded securities with accrued capital gains to a registered charity or a private foundation not only entitles you to a tax receipt for the fair market value of the security being donated, but eliminates any capital gains tax as well.

6. Contribute to a registered disability savings plan (RDSP)

The RDSP is a tax-deferred registered savings plan open to Canadian residents eligible for the Disability Tax Credit, as well as their parents and other eligible contributors. Up to $200,000 can be invested within the plan with no annual contribution limits. While contributions are not tax deductible, all earnings and growth accrue on a tax-deferred basis. Contribute before the Dec. 31 deadline to qualify for the 2009 matching Canada Disability Savings Grant and potentially, the Canada Disability Savings Bond.

7. Splurge on office furniture

If you are self-employed or a small-business owner, consider accelerating the purchase of new business equipment or office furniture that you may have been planning to do in 2010. You are permitted to deduct under the “half-year rule,” one-half of a full year’s tax depreciation in 2009, even if you bought it on Dec. 31. For 2010, you can then proceed to claim a full year’s depreciation. For computer equipment purchased after Jan. 27, 2009 and before February 2011, you can write off 100% of the cost in the year of acquisition — with no half-year rule.

8. Consider a low, low loan

The government’s prescribed interest rate is set at the all-time low of 1% until at least Dec. 31, 2009, providing couples with a significant income-splitting opportunity. Under this strategy, the higher-income spouse loans funds to the lower-income spouse at 1%, with interest paid annually by Jan. 30 of the following year.

If the loan is made before Dec. 31 while the prescribed rate is 1%, any investment returns above the 1% rate can be taxed in the hands of the lower-income spouse. Note that even though the prescribed rate varies quarterly, you need only use the rate in effect at the time the loan was originally extended.

9. Pay investment expenses

To deduct any investment-related expenses on your 2009 tax return, the amounts must be actually paid by year-end. Such expenses include interest you paid on money borrowed for investing, investment counselling fees for non-RRSP accounts, professional accounting services for tracking rental or business income and safety deposit box rental fees.

10. Get a head start for 2010

If you routinely get a large tax refund each spring due to RRSP contributions or child-care deductions, the CRA can authorize your employer to reduce the amount of income tax withheld on your employment income. Send a completed CRA Form T1213 “Request to Reduce Tax Deductions at Source,” with all supporting documents to the Client Services Division of your local tax services office.

 Financial Post

Edmonton, December 2, 2009: Total sales through the Edmonton and area Multiple Listing Service® system to the end of November have surpassed total year end sales in 2008. The total value of all types of property sold to the end of November is $6.64 billion. The same figure at the end of December 2008 was $6.42 billion. There have been 20,355 property sales so far as compared to 19,448 at year-end 2008.

“Both sales and the value of sales have exceeded our expectations this year,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “We anticipated sales levels would be the same as last year but REALTORS® have already sold more property than last year with a month to go. This is a good indicator of the strength of our local market.”

In November, the average price of a single family dwelling went up 1.2% to $368,018, reversing a 2% drop in the previous month. Single family dwelling prices are 1.5% higher than the same month last year.

Although condominium prices are down 2.5% from last month they are just $50 higher than condo prices a year ago. The average price for a condo in November 2009 was $231,684. At $284,849, the duplex and rowhouse prices were down 4.7% from last month and down 9.5% from a year ago. Overall, the all-residential average price is down marginally from October and the previous November. It sits at $318,482.

There were 1,894 homes listed on the MLS® System in November with 1,261 sales for a sales-to-listing ratio of 67%. The total value of residential sales in November was $402 million and total available inventory was 5,226 homes which is a typical four month supply. Homes sold on average in 48 days which is up one from last month but much brighter than the 63 days it took to sell a home in November 2008.

“The market remains rock steady,” said Ponde. “Prices vary from month to month within a small range and with a slow gradual upward trend. Buyers have confidence in this market and REALTORS® are prepared to match their needs with the perfect housing option.”

-30-

Highlights of MLS® System activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual prices, which may vary.

Weekly rate minder provided by: Souchita Rattanarasy Dominion Lending Centres Optimum 780-932-2225. Explore Mortgage Scenarios with Helpful Calculators on http://www.souchita.com/

Money tips for engaged and married couples

After starting a career, the next life-cycle stage to begin for many people is marriage. Some say it is the most important in terms of financial success. No, they don’t mean marrying someone wealthy (although this wouldn’t hurt!). What they are referring to is financial compatibility between two individuals.

“Probably my best financial move has been choosing a spouse with similar money habits and views on personal finances,” says Scott McKibbon, a do-it-yourself investor in Hamilton, Ontario. “This seems to be particularly important in this day and age as broken marriages have destroyed more personal balance sheets than poor markets.”

Here are 10 tips to help sort through the financial risks and rewards of married life.

1. It takes two to tango. As a married person, one needs to realize they are not saving and investing just for themselves. Their spouse will likely have a different tolerance for risk and that should be taken into account

York University professor Moshe Milevsky, a leading expert in financial mathematics, came to the conclusion his personal exposure to stocks should be leveraged by 300 per cent to offset the predominately bond-like nature of his personal wealth (tenured job and pension plan).

“Are you out of your mind?” was his wife’s reaction (as quoted in the November issue of the Journal of Financial Planning). And so Mr. Milevsky went with a much lower level of leverage.

2. Set compatible goals. Also realize that one’s spouse may have different financial objectives, and compromise is in order on this count as well. On Tim Stobb’s blog, Canadian Dream: Free at 45, a recent post recounts a frugal husband’s attempt to interest his wife in buying a Tumbleweed Tiny House, which range from 65 to 800 square feet in living space.

The husband thought they could live in such a tiny house since they had no plans for children. His wife responded with: “I will not live in a garden shed, no matter how cool you think it is.” The solution settled upon in the end was a thousand-square-foot townhouse.

3. Talk about money, even if it hurts. Some spouses don’t like to compromise and may hide what they are doing with the family finances. They don’t communicate and that is when money issues can really spiral toward the tragedy of separation and divorce.

In Jonathan Chevreau’s financial novel, Findependence Day , the central character, Jamie, decides to borrow $60,000 – without telling his wife – to invest in stocks. But after taking the plunge, the market crashes hard. When his wife finds out about the losses, she tells her husband: “I can’t believe you’d be so stupid. That is the last straw.” A while later, Jamie receives an envelope from his wife’s lawyers requesting a split.

4. Two heads are better than one. But marriage, of course, is not all sacrifice and strife. A team working together can accomplish more than the individual members separately. “The other huge success I’ve had is finding a partner who enjoys taking part in our financial decisions,” declares Brad Ferris, the author of the blog: Triaging My Way to Financial Success.

He illustrates with an example. “As I mentioned in a post a while ago about investing in the stock of Reitmans Canada, my partner’s shopping experience and insights into their products … helped me see a different side of the fundamentals than what any analyst could pass on.”

5. No ‘I do’s’ without a financial chat first. It is no revelation that money issues are a leading cause of martial discord and dissolution. So head them off before getting married (if one is still at the stage of clubbing around). Don’t be blinded by those beefy biceps and a twinkle in the eye. Look for extremes in financial behaviour before saying “I do.” For a guide, check out the “lighthearted” Valentine quiz from the Australian Securities & Investments Commission.

Here’s a sampling on what to look for: Is your prospective partner up most the night trading oil futures on margin or do they keep “banknotes in the freezer, some gold bullion in the underwear drawer, and regard bank deposits as high-risk?” Do moths fly out of their wallet on the rare occasion they are forced to open it or “have they already spent more than the gross domestic product of a small nation?”

6. Get educated. For Emil Saumier, divorce was the worse thing that happened to him financially. He never paid much attention to the intricacies of family law in his province or realized how much marriage breakdown could devastate one’s financial situation. “I really think I would have been better prepared if I had been better educated in finance,” says Mr. Saumier, the owner of a martial-arts school in Ottawa.

Christine Van Cauwenberghe, director of tax and estate planning with Investors Group in Winnipeg, would likely agree. She observes that family law can indeed hold some surprises. For example, “In a few provinces the marital home is shareable even if acquired prior to the time of marriage.” Her book, Wealth Planning Strategies for Canadians: 2010 , points out other surprises that lurk in family legislation.

7. Know thy spouse-to-be. “It is surprising how many couples have never discussed finances before their wedding,” notes Brenda MacDonald, an independent financial counsellor living in Victoria. In the June, 2009, issue of Canadian MoneySaver, she offers a comprehensive checklist of topics that engaged couples should discuss before walking down the aisle. They include: financial goals (and how to reach them), where to invest savings, and debts brought into the marriage.

She also recommends comparing credit scores. If both persons have similar scores, above 750, shout “Hurray for us!” If one or both score lower than 650, the caution flag is waving. Not only could it signal an irresponsible personality but it may diminish the couple’s ability to borrow for a house, car and other items.

8. Use your spousal status as a benefit. Marriage presents many opportunities to protect assets and enhance after-tax income. An entrepreneur can protect the family house from creditors by putting it in the other spouse’s name. And they can split income by employing a spouse. Other income-splitting moves include contributions to a spousal registered retirement savings plan (RRSP).

The higher income spouse should pay household expenses while the lower income spouse uses their income for investing. If he or she doesn’t have enough funds, a loan from the higher income spouse (at “prescribed” loan rates) can be invested without attribution back to them. As well, contributions can be made to the other spouse’s tax-free savings plan (TFSA) without attribution.

9. A prenup shouldn’t be such a dirty word. Second and blended marriages raise additional considerations. Notably, one or both parties in such unions may be bringing substantial assets to the marriage. A properly executed prenuptial agreement can provide protection (family law may have grey areas and can be changed). And in blended families (both spouses have kids from previous marriages), prenups and other arrangements may be necessary for ensuring an estate is left behind for one’s children from the previous relationship.

10. Those who save together, stay together. A study, Fatal (Fiscal) Attraction: Spendthrifts and Tightwads in Marriage, conducted by researchers at Wharton Business School and Northwestern University, found that spendthrifts and tightwads tended to marry each other. Go figure. Anyway, that was not a good thing, the study said, because the greater the difference on the spending continuum, the more likely the marriage would encounter turbulence.

This martial tendency is all the more reason for engaged and married couples to zero in on the financial aspect of their relationship. One step often recommended for resolving disputes is to have separate and joint chequing accounts. But, above all, communication is the crucial factor.

“During marriage, I think one of the most important things that spouses need to do in dealing with financial issues is to communicate,” advises Ms. Van Cauwenberghe. “If the couple is experiencing financial difficulty, there are usually ways of resolving those issues, but many couples simply choose to ignore them and allow [problems like] debt to pile up. In many cases the solution is to speak to a neutral third party. A financial adviser is often able to state the obvious things that spouses don’t want to admit to each other.”

Source: Larry MacDonald from the Globe and Mail

While the newpapers are happy to announce that maybe the recession is over since we had economic growth in the 3rd quarter of this year, things here might be changing.

We also go a report last week that came out that indicated that the number of unemployment claims in Edmonton were rising, which would indicate a slow down for us here in Edmonton.

As of this morning there were 1,762 single family dwellings listed on MLS in Edmonton proper.  That is only a slight decrease over last weeks number1,781.  This would be a seasonal norm and not one that I would be concerned with.

The concerning part is the drop in the sales.  In the last 30 days there were 509 single family dwellings sold in Edmonton proper.  That is a drop from last weeks number of 545, but that also represents almost a 7% drop in sales in one week alone.

You compare that with only a 1% drop in the listing inventory that is a trend of concern.  The listings to sales ratio has also risen to 3.46:1 from last week’s ratio of 3.27:1.  If this trend continues we might see valuations drop slightly before we see them come back again in the spring marketplace.

Gross domestic product sees first gain in a year in Q3, signals recession’s end

OTTAWA – Canada’s real gross domestic product grew 0.1 per cent in the third quarter, the first quarterly gain since the third quarter of 2008 and a signal – if a feeble one – that the recession has ended.

Statistics Canada reported Monday that the economy expanded at an annualized rate of 0.4 per cent in the third quarter, compared with a 2.8 per cent increase for the U.S. economy.

The first overall economic growth in a year marks an end to the recession, which is defined as at least two back-to-back quarters of contraction.

While it is the first indication Canada’s economy is again beginning to grow after begin battered alongside the rest of the world during the economic meltdown that saw the failure of U.S. banks, ravaged corporate profits and lengthened unemployment lines, it is “not exactly a clanging endorsement of the ‘end of recession’ story,” said Douglas Porter, Bank of Montreal’s deputy economist.

“While the quarterly gain for the third quarter was a bit of a damp squib, this doesn’t alter the bigger picture that the Canadian economy is erratically grinding out of recession, led by broad-based gains in domestic spending,” Porter wrote in a note to clients.

“With the solid hand-off from the sturdy September result and mounting signs that the U.S. recovery is taking root, look for much more convincing evidence that the recession is over in fourth-quarter GDP results. Still, the broader picture of a relatively muted recovery remains the dominant theme.”

The agency says final domestic demand advanced 1.2 per cent, as capital investment and personal expenditures both increased.

Real GDP was up 0.4 per cent in September, as most major industrial sectors increased their production.

Final domestic demand was bolstered by a second consecutive quarterly gain in personal expenditures and the first expansion in business capital expenditure since the fourth quarter of 2007.

Export and import volumes both increased after many quarters of decline.

The output of services-producing industries increased 0.6 per cent, with the wholesale and retail trade sectors and real-estate agents and brokers leading the way.

Goods-producing industries slipped 1.4 per cent, continuing a downward trend that started in the third quarter of 2007.

Mining and oil-and-gas extraction contributed the most to the decrease as a result of temporary shutdowns.

Source: THE CANADIAN PRESS, cp.org, Updated: November 30, 2009 9:20 AM

Need to sell your home quickly and at a good price? Here’s how.

The real estate market is beginning to recover across the country. According to the Canadian Real Estate Association, prices have rebounded from an average selling price of $291,788 in September 2008 to $331,682 this September.

Whether it is historically low interest rates or optimism about Canada’s economic recovery, people are beginning to think about moving house.

So how do you ensure your house is not the one sitting on the market two months after you have decided to sell? Here are five tips to ensure you make a quick sale.

1. Price according to conditions
“The top five percentile of homes price-wise tend to take longer to sell because there is a smaller market, and it tends to be a more volatile market in a boom and bust cycle,” says Cameron Muir, an economist with the British Columbia Real Estate Association.

So, right from the outset, you want to make sure you do not price your home at the top of the market.

“Having your house priced according to current market conditions and having maximum exposure to the greatest number of buyers is always a good idea,” says Muir. “What you’re doing as a home seller is competing with a lot of other sellers in the marketplace.”

Julie Kinnear, a Toronto Realtor with 16 years of experience, agrees. “Price is critical in a soft market, but buying is (about) first impressions, and there are two: the look of the place and the price.”

Then, there is also what Kinnear calls social proof, meaning that if a house stays on the market for a long time, buyers automatically think there is something wrong with it.

Everyone connected to real estate seems to agree — you need to price it right the first time to avoid this stigma, especially if you are hoping for a quick sale.

2. Stage your home
To ensure a quick sale Getting your house ready to sell can help you make the emotional transition from one home to another. Some people like to do this before they call in a professional. Either way, this transition is important.

“It’s not home anymore, it’s product on the market,” says Tricia Scott, owner of Vancouver, British Columbia’s Ready Set Show Staging Inc. “You need to separate yourself from the personal side of the home. Staging helps — a staged home versus an unfurnished home sells much faster.”

With the popularity of home decorating and renovation programs on TV, people are more accustomed to looking at houses with an eye for design. Scott says there is a good reason why property developers use show suites to sell new homes — people want to come into a house and see themselves living there.

Kinnear agrees. “Have the house in good condition. When the market is soft, people are pickier. If you can renovate on a budget, then it’s worth it because a lot of people have no cash at all — they are looking for a turnkey operation.”

3. Work with a pro
To ensure a quick sale, you have to be sure your buyers can afford to pay what they offer. Working with a Realtor can help you do this, as Realtors take precautions to be sure their buyers are not overreaching their grasp. They have also been trained and licensed in working with buyers and negotiating contracts that do not, as a rule, tend to fall through.

Realtors also know what is selling. They have access to a database of statistics that the rest of us cannot use and can help you set a price that will make your house attractive to buyers without undercutting your bottom line.

An agent will also bear all the costs of advertising your home. This can seem minor at first, but newspaper ads and signage do add up.

When looking for a Realtor, pay attention to the sales in your neighborhood and attend open houses. Observe Realtors in action and ask friends for their referrals. Every Realtor is different. Your agent works for you, and it is up to you to be a good and thorough employer.

4. Go where the buyers are
If you want a quick sale at the best price, it only makes sense to compete on the biggest market — and there is no question that the biggest market in Canada is the Multiple Listing Service, or MLS. A full 90 percent of all home sales go through the MLS, and while the Canadian Competition Bureau recently suggested the MLS may be required to open its doors to non-Realtors, that has not happened yet.

Going it alone means relying on yourself, and while that may sound appealing, the numbers argue against it.

5. Create word of mouth
Finally, if you have a home that one of your friends or acquaintances has often admired, put the word out to your friends before you talk to anyone else, and ask them to spread the word. Doing so could help you avoid the stress of staging and hosting open houses and get you the quick sale you are after.

Source: MSN Money Article By: Stephanie Farrington is a writer based in Victoria, British Columbia.

Easy-to-obtain credit cards and student loans means many college and university grads enter the working world with more than diplomas and high hopes – they are also saddled with hefty debt loads. After graduation, they face the prospect of piling on more debt in the forms of mortgages and lines of credit. Before they know it, Gen Xers and Ys can find themselves buried more deeply in loans than their parents could ever have imagined.

One thing is certain: digging out from under the debt heap will prove more difficult than building the money mountain in the first place.

So just how do young families struggling with heavy debt loads deal with those financial institutions, once so eager to lend, now asking for payments on credit cards, lines of credit, mortgages and student loans? Unless an inheritance providentially appears, the formula for success consists of discipline, a plan and time.

Alex, an IT industry worker, and his school-teacher wife Sam (they did not want their last names used) are illustrative of how debts can quickly erase any post-graduate euphoria. The two mature university students, both in their early 30s, had accumulated nearly $110,000 in red ink – a combination of student loans, credit card debt and personal loans.

Personal circumstances forced Alex to become a part-time student, which meant his student loans immediately began accruing interest. He lost his new job and ran out of new sources of credit. The couple enrolled in Credit Canada’s credit counseling program and have graduate married, with a seven-year-old son and no debt. The couple is now redirecting the money that has for so long been paying off their debt load towards a down payment on their first home.

“We’re free and clear right now,” said Alex. Under the program, the two drew up a budget with a counselor. Going out for dinners and entertainment disappeared immediately, a lifestyle change that got easier when they had a child. “Really the biggest change is just being conscious about the money that is coming in, the money that is going out and not having that constant feeling of ‘Where did all my money go?’ which was definitely the case for both of us beforehand.”

The combination of young families and out-of-control debt is all too common, said Laurie Campbell, executive director of Credit Canada, which provides debt management programs in the greater Toronto area. Her group regularly sees young families with a child or two living in their parent’s basement. “They can’t handle living on their own because of their current debt situation which is usually high student loans and high credit debt.”

While financial experts often say people should look to pay off their most expensive debt first, such as those 28 per cent store credit cards, Ms. Campbell suggested those drowning in debt take a long, hard look at their lifestyles. Are two cars with their attendant loan payments, insurance, maintenance and parking costs really necessary? Many young families are also camped in more home than they can afford, barely scraping by with a 35 or 40-year mortgage. “It may mean they need to sell their home, significantly scale back in order to deal with this debt because it is not going to go away and their current lifestyle can not sustain it.”

Ms. Campbell singles out daycare costs (which can run as much as $700 to $800 a month) as a major household expense that might be offset with the assistance of family and friends.

Although much of her group’s debt relief advice seems pretty obvious – brown bagging lunch or ditching the family wheels for transit – it’s not always welcome. “There is a lot of reluctance, unless they have thought of these ideas on their own.”

While cutting costs on travel and entertainment may be the quickest way to free up cash, Ms. Campbell says most people overlook ways to earn more revenue such as taking a part-time job (admittedly tough in this economy) or renting out part of their property.

Margaret Johnson, president of Vancouver-based Solutions Credit Counselling Service Inc., has a straightforward approach to dealing with those drowning in too much debt. First of all, she advises clients to cut up the four, five or six credit cards populating their wallets and purses. It is not a popular recommendation: “Most people have an unbelievable fear of living in a cash world. They can’t imagine living without a credit card,” she said. “They say, ‘How will I book a trip?” Her answer: “You don’t have any money so you can’t go on a trip, you don’t need a card for that.”

Ms. Johnson’s favorite debt story concerns a couple who wanted to put a $2,500 fireplace in their house and the bank would not give them more credit or a personal loan. The couple, who had already maxed out their credit cards, decided to buy a bigger house. This house, which had a fireplace, cost $50,000 more and came with a larger mortgage. “Today they are divorced and the house is long gone.”

Although most couples likely will not face Alex and Sam’s seven-year journey to debt freedom, Ms. Campbell says young families can’t expect a quick financial turnaround. “A lot of people are shocked by this but it takes a lot of time to get into debt, it takes a lot of time to get out of debt,” she said. “It takes up to two to four years depending on their situation but then the beauty of this is that they have learned to manage their money and restrain their spending.”

Article By: Paul Brent of The Globe and Mail

People make a lot of mistakes, avoidable mistakes, when they’re building or renovating a home. Those mistakes begin at the planning phase – when the homeowners are developing the layout with a designer or architect.

I recently looked over several floor plans for next spring’s reno and construction season, and I have to tell you, some things continue to pop up that make me grind my eyeteeth in frustration. Here are five things that I would ban from all blueprints.

Corner fireplaces

Oh, they rake the eyes. Why would anyone put a fireplace in the corner of a room? This rookie mistake starts a domino effect of ugliness that’s nearly impossible to stop. Developers are fond of doing it because it’s an easy way to parachute in a prominent feature they haven’t adequately planned for.

The problem is focal points. A fireplace is a natural centre of attention, and a room is most comfortable when the furniture aims at it. But when you put the fire in the corner of a room it’s almost impossible to do anything but place the furnishings at odd angles to the walls, which misaligns the room with the structure of the home. (Conversely, if you ignore the fireplace as a focus, people in the room become disoriented and don’t know where to put their eyes.) Fireplaces are best located on a long run of wall. There, they’re easy to centre in the room, making them an effortless focal point around which to plan.

Spiral staircases

Cinematic grandeur is what people have in mind when they attempt to shoehorn a spiral staircase into their floor plan. But more often than not, the stairs come off like clumsy plotting – superfluous of detail and disruptive of flow.

The reason is simple: Spiral stairs are a circle, and most homes have walls that intersect at right angles – that is, they’re squares. And when you drop a circle into a square, everything feels off.

One of the few places spiral stairs feels right is in a home with a grand entrance – picture the 1,000 square foot foyer of a colonial mansion in the Deep South. There, fanciful spindles and expansive treads blend effortlessly with the majesty of the home. There, not here.

The problem is the same as with the corner fireplace: The alignment feels off. A home without room for its spiral staircase feels like a series of circles and squares mashed together. Odd angles proliferate, creating spaces that are difficult to furnish and a house that is challenging to resell.

Getting a spiral staircase to integrate seamlessly into a floor plan demands an investment in good architecture and exceptional craftsmanship. Unless you’re willing to go to the expense, you’d best forgo spiral stairs altogether.

My advice: Stick to straight runs – they’re efficient and much easier to construct. If you want to jazz them up, spend your money on quality materials, finishes that are consistent with the rest of the home.

Grecian columns

Used properly, Grecian columns are a nod to outstanding architecture and engineering, and an implicit statement of affluence. And it’s that savour of affluence people are after.

But in the average house – with flat, eight-foot ceilings and six-inch crown mouldings – a Grecian column looks as natural as a tuxedo in a honky-tonk. It’s foolishly trying to elevate the occasion.

To support the Grecian columns, homeowners often deploy empurpled regal furnishings and many-layered draperies – touches that only draw attention to the original sin. They’re trying to make their home something it’s not.

Regardless of its size, play to your home’s strength, whether it’s a nice floor plan, beautiful wood floors or well-chosen finishes. Structural elements like posts should integrate with the other finishing carpentry (baseboard, window trim and crown).

Superfluous French doors

Good quality French doors are beautiful – solid wood with a thick frame enclosing a grid of bevelled glass. But their appeal leads to frequent misuse.

French doors should be reserved to the entrances of formal rooms, like the living or dining room – spaces intended to impress, where the act of sweeping open two glass doors is a dramatic gesture.

There was a time when the library would have been a room that deserved French doors. But yesterday’s library is today’s home office, and its mishmash of Office Depot furnishings and HP hardware is no enticing thing to see through the glass.

The general rule of French doors should be: Use quality doors with beautiful hardware, and use them sparingly for rooms that you intend to decorate beautifully and share with others.

Avoid slapping French doors on rooms that require privacy – you’ll only end up curtaining the glass.

Pork chop countertops in bathrooms

I’m amazed that this dated detail still finds its way onto floor plans. I’m talking about that odd ledge that extends from the vanity over the toilet in the bathroom. At the best of times it housed a vase with dried twigs in it; at the worst, dingy collections of half-used perfumes and aging soaps.

If space is a concern, then glass or floating shelves over the toilet are far more useful. If covering up the unsightly toilet is the rationale, buy a nicer toilet – there are too many beautiful plumbing fixtures on the market these days to go down that road.

Special to The Globe and Mail