The Canadian Home Builders' Association is disappointed this week's budget did not include housing-related tax changes, but is optimistic about the industry's prospects.

"Our industry in the last few months has seen a significant turnaround in the housing market. It's certainly looking brighter when you look to the future," said Gary Friend, association national president.

"Of course, the minister of finance and others keep warning that the recovery will be slow and gradual."

Friend is in Victoria this weekend for the association's annual meeting, held this year at the Victoria Conference Centre.

The association's 8,000 member companies across the country build everything from single-family homes to high-rise condominium buildings, and include renovators, building material suppliers and trade contractors.

"Everything points to 2010 to be a year of transition and things do look better," said Friend, adding that economic recovery is underway, consumer confidence is up and unemployment, which had been rising, has slowed down.

"Most of our builders report that they are seeing lots of activity in their sales centres."

That's welcome news for builders, who suffered when the real-estate boom crashed during the global economic crisis. Greater Victoria's real-estate market slowed and several major residential projects were cancelled or put on hold.

Pent-up demand and low interest rates are also helping fuel the industry, Friend said.

Sales numbers through the Greater Victoria Real Estate Board started picking up last year after a slow start in early months. Last month, total sales for all types of properties, new and existing, reached 621, up from 403 the same month in 2009.

The average price of a single-family house in the capital region was $620,833 in February, and the median was $560,950.

Condominiums sold for an average price of $304,163, and the median was $285,000.

Friend applauds the federal government's aim of returning to balanced budgets in five years, but says he is disappointed that it did not include a continuing replacement for the popular temporary home renovation tax credit that was introduced in the previous budget.

Receipts are required for rebates. One benefit is that it would "go a long way to combatting the massive underground 'cash' activity in home renovation," Friend said.

Building permits help take a measure of this sector industry.

The latest national numbers show that municipalities issued $5.7 billion worth of building permits in January, down from December, but 32.7 per cent higher than the same month in 2009, Statistics Canada said this week. The drop in December was due to a decrease in the non-residential sector.

Within the residential sector, permit values nationally climbed to $4 billion in January, nearly twice the value of permits in January of last year, the federal agency said.

The value of single-family permits has been rising since last March, moving to $2.7 billion, up 7.2 per cent in December, Statistics Canada said.

Although the total value of permits slid in B.C. month-over-month by 22.5 per cent, Greater Victoria's slip was not as pronounced, at 10.1 per cent.

Victoria saw total permit values, reflecting residential and non-residential sectors, rise to $61.6 million in January, a jump of 83.3 per cent from January 2009.

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Home sales decline in February

Home resales in Canada fell in February for a second straight month, with the biggest drop recorded in Vancouver, although purchasers were still higher on the year, the Canadian Real Estate Association said Monday.

The February decline in Vancouver and other parts on British Columbia was offset by "an equally large gain" in Toronto, CREA said.

The industry group said 42,799 units sold on a seasonally adjusted basis in February, down 1.5 per cent from the previous month, reflecting how "national sales activity has slowed while new listings continue to rise, resulting in a more balanced national resale housing market."

Sales in British Columbia were down 13.3 per cent in February from a month earlier, while Ontario posted a 3.3 per cent gain.

Year-over-year, residential sales were up 44 per cent from 2009, with Ontario and Quebec setting new records, but national gains in sales activity were smaller than in the previous three months.

"Since a year will soon have elapsed following the recessionary decline and subsequent rebound for the Canadian resale market, year-over-year comparisons are expected to continue shrinking," the report said.

Meanwhile, the average resale price of homes rose 18.2 per cent in February from a year earlier to $335,655, it said.

"The Olympic Winter Games may have impacted February sales activity in British Columbia, so activity for the province in March will be closely watched," said CREA president Dale Ripplinger.

"Activity is expected to remain elevated in Ontario and British Columbia over the first half of the year, with buyers looking to beat the introduction of the HST (harmonized sales tax in July) and expected interest rate hikes."

Millan Mulraine, economics strategist at TD Securities, said the moderating trend seen in the first two months of 2010 will be "briefly reversed over the next two months as homebuyers affected by the recent changes in Canadian mortgage rules attempt to get ahead of the April deadline."

"After this, we should see the Canadian housing market move slowly back into a balanced-market position as higher mortgage rates and prices begin to temper demand."

In a separate report Monday, Ipsos Reid said a poll showed the number of first-time buyers in British Columbia is beginning to decline as housing prices rise.

The poll found that 29 per cent of home purchasers during the first quarter of this year were first-time buyers, gradually trending down from 38 per cent at the same time in 2009, but still higher than in late 2008 when only 17 per cent were first-time buyers.

"Greater Vancouver in particular has seen a very rapid recovery in prices since the bottom of the market in the first quarter of 2009," said Hanson Lok, senior research manager for Ipsos Reid in Vancouver. "While low mortgage rates have kept monthly payments within reach for first-time buyers and kept them in the market, escalating prices will push many potential first-time buyers back out."

The poll suggests 53 per cent of British Columbians feel it's a seller's market, up from 14 per cent a year ago, while 68 per cent say it's a good time to buy, a number that has fallen from a high of 76 per cent in September of 2009.

Buyers racing rate rise

Jeannette Eason knew she had to move quickly when she spotted a real estate agent setting up a for-sale sign at a Fernwood house.

"I was lucky because I got in first. I made a full-offer price because I know what the market is like," said Eason, who runs a public contact centre for Health Insurance B.C.

After a drastic slump in residential sales during the recession, Eason had been watching sales rebound in the past several months and heard of multiple bids for homes.

She was walking her dog at lunchtime when she saw the agent at the house. "It looked about the right size so I asked him about it while he was putting the sign up outside."

Eason learned it had the extra space she wanted for when her two children reach their teens. "So that was it. I found my realtor and we got in right away."

That deal was struck just a few weeks ago. Her family moves in next month.

Eason's own three-bedroom house went on the market Feb. 5 for $599,900. After a flood of viewers over two days, she accepted an offer for $5,000 above the asking price.

Greater Victoria buyers are most active in the $600,000-or-lower price range, say real estate agents. The average price for a single-family house was $644,678 in January, and the median was $595,000.

Buyers are seeking to lock in before mortgage rates rise as predicted later this year.

The total number of sales in B.C. through the Multiple Listing Service leaped by 118 per cent in January to 4,619 compared with the same month the previous year, when the world was rocked by the global economic crisis. Sales dropped by 16 per cent last month from the previous month, the B.C. Real Estate Association said yesterday. Cameron Muir, the association's chief economist, said that's the result of waning pent-up demand and eroding affordability.

While low mortgage interest rates will continue to entice homebuyers through the spring, demand is expected to moderate from its frenetic year-end pace, he said.

Upward pressure on home prices, especially in Victoria, Vancouver and the Fraser Valley, is starting to slow as fewer home sales and a larger inventory reduce the likelihood of multiple offers, Muir said.

In Victoria, Bruce Matheson is heading into the seller's market with five two-storey, strata-title townhomes at 707 Linden Ave., the 1911 Moore-Whittington house. The first two units go on sale this weekend.

Sizes range from a one-bedroom unit of 1,000 square feet for $540,000 to 1,250 square feet for $600,000.

Matheson figures his units are well-priced in an area that's close to town, and that buyers will be attracted to the 10-foot ceilings, original stained glass and quality of workmanship in a character home.

Greater Victoria new house prices slumped slightly in December, but rose nationwide as low interest rates continued to lure buyers into the market.

New-home prices for the capital region slid by 0.2 per cent in December over November, Statistics Canada said in a report also released yesterday.

Victoria and Calgary were the only major cities among 21 surveyed where declines were reported.

Nationally, new-home prices rose 0.4 per cent, the federal agency said. This sixth straight monthly increase was above economists' forecasts of a 0.3 per cent gain.

Year-over-year, new-home prices in Victoria dropped by 8.2 per cent. Nationally, the rate decreased by 0.9 per cent

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How to lose money on real estate

I have a buddy who figures he made about $100,000 in the housing market in the last two to three years.

That's not a bad take, but I question whether he really made that much money. No, I don't believe he's lying about what he paid for his house or what he sold it for. I just think he forgot to include a few factors -- the transaction costs associated with his move.

Luckily, he's smart enough to not live in Toronto, the only jurisdiction in Canada with two land transfer taxes -- one going to the municipality and the other to the province. But even without those extra charges, once you factor in real estate commissions, legal fees and other closing costs, as much as $35,000 of his profit will have been eaten away.

So that leaves $65,000, you say. Not really.

He made a decision to downsize. He bought his home for about $400,000 and realized about a 25% return in a very short period of time. Impressive. But he also sold a previous home. If that first home was worth about $300,000 when he moved, based on a 25% increase in price, he still would be up $75,000 if he had just stayed put.

The way I figure it, all this moving has cost him money. Of course, there are other reasons for a move, such as a changing family situation, that cannot be helped and you have to bite the bullet.

But continuously selling and buying homes can lead to destruction of wealth over your lifetime.

On average, Canadians move about 4.5 to 5.5 times in their lifetime, according to the Canadian Association of Accredited Mortgage Professionals. All that moving could easily wipe out $150,000 in extra costs.

So why do it?

"It really depends on what you are accomplishing by the move," says Don Lawby, chief executive of Century 21 Canada, pointing out that if your company moves you far enough you can write off any costs they don't cover. "Sometimes, you move because of circumstances of life. A child may come along that you didn't plan on. Somebody might die. You could have a health problem. There could be a divorce."

Yes, there are ways to make money by moving constantly, such as putting so-called "sweat" equity into a house, improving its value. I wish I were a fix-it guy. Since there are no capital gains on a principal residence, this might be the only legal way to make money in this country without paying tax.

"You can make money [buying and selling houses] if you have lots of knowledge, but the average person doesn't. You can't pay the regular rate for a plumber, regular rate for an electrician and make money," says Mr. Lawby.

Derek Holt, an economist with the Bank of Nova Scotia, says if real estate commissions come down it would make moving more palatable. He estimates that if the Canadian Real Estate Association's lock on home listings is broken, consumers would see a drop of about $15,000 in costs on each transaction.

The Competition Bureau has lodged a complaint with the Competition Tribunal about CREA's practices. No date has been set for the hearing as of yet.

"[Former U.S. Federal Reserve chairman] Alan Greenspan once made the comment that the costs of moving absorb 8% of your home equity and that's not far off the Canadian experience. It might be higher," says Mr. Holt. "You don't want to do that too many times or you could blow a quarter or a third of your equity."

Despite the expense, Mr. Holt says the No. 1 concern for most Canadians when they are moving is whether they can afford the carrying costs on their new home. In his own life, Mr. Holt says he's trying to limit how many moves he makes.

"We moved three years ago and my next move is going to be feet first out the door," Mr. Holt says.

That's one move somebody else will be paying for.

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Real estate market heats up in capital