Real Estate Articles

 

 

     To say that things have changed in the world of Real Estate is an understatement, not just market trends of the last quarter century or so but comparing with hundreds of years ago when land was the only true store of enduring wealth. Our ancestors knew nothing of stocks, bonds, or RRSPs and land was only owned by those of great wealth and influence.  The term real estate did not even exist in those days, nor did the concept of having an agent broker a deal between a buyer and seller. Possession was deemed to be enough to claim ownership and there was no authority that monitored or intervened when one had possession.  During the intervening years ownership has evolved to mean that the landholder has the right to utilize a given piece of land as well as all buildings and facilities which rest upon it.  In modern time the owner has the right to use, transfer, or sell that land as he so desires.

 

     In the eleventh century, King William created the distinction between real estate, or real property, and a chattel, some of which endures today.  Real estate was deemed to be an interest in the land (or, "estate") while chattel meant that you owned the land and structures outright.  Basically the land belonged to the King who sold the right to use various parcels of land to the Lords of his kingdom.  The Lords then rented it out to their tenants who had very few rights to the property which they worked to pay their rent but the Lords still had ultimate control.  While these aspects of real estate history introduced the concept of private ownership of real estate and the associated ability to buy and sell it we in Canada now have a much more organized system that is governed by the rule of common law.  However, the Crown still has a crucial role in real estate law just as it did in the past. In reality, the Crown still has ultimate ownership of all of our land and has the final say on issues such as utility, building and subdividing. While our ancestors needed the King's permission to build or subdivide current development can only be done in compliance with real estate law and zoning restrictions.  Although the concept of private ownership of real estate has changed dramatically over the millennia the owner of land in Canada still does not have the final say in how his property is used.

 

     One of the areas of real estate that has made a very progressive change is the notion of who owns a home. While in the past, owning a home or property was a privilege of the wealthy we now live in a world in which the average citizen can own his own home. The changes in land ownership and equality have allowed anyone with a regular job and income, some savings, and some financial planning to go through the home buying and owning process.

 

 

     You will often hear the terms "buyer's market" and "seller's market". With the fluctuation of the last few years in housing prices, this terminology is used regularly. A buyer's market means that there are more properties listed for sale than usual and consequently prices are lower and a seller's market means that there are less properties listed than usual and prices are higher. However, in the home market it all evens out because everyone needs a place to live.  If a person sell their home in a seller's market then buys another he may get a higher price for his sale but will pay more than normal for his new home.

 

     Another factor is interest rates for mortgage borrowing.  Most home purchase involve a mortgage on which the bank charges interest over the duration of the mortgage.  In 1986 a representative interest rate for a residential home was 13.5% over 25 years while at this time they are closer to 5%.  The interest rate market is continually fluctuating up and down and has a dramatic effect on whether it is a seller's or buyer's market.  With interest rates where they are currently it is estimated that one in five renters in Canada is planning to purchase a home within the next twelve months. Twenty percent may not seem a huge number but when you consider that it's twenty percent of the adult population of the country the number of people is substantial.

 

     The biggest factor in the change in real estate functions over the years is the Real Estate Act.  According to property law people have very specific rights attached to their property.  Laws can govern and regulate how this land is used but the risk of ownership lies solely with the owner of the property.  With a great deal more access to home ownership by the middle class it is no longer only the wealthy upper class that can own and profit from real estate.  Today all of us have the potential to increase our wealth through real estate ownership.