Now, we realized that it is not true that house price will always go up. The Big Picture has shown a chart of global housing price. It compares housing price in a couple of countries from 1997 – 2008.

As you can see in the picture below, Germany and Japan has been experiencing decline in house price in the last 10 years or so. To me, it is really scary.

As we have mentioned a couple of times, we are currently looking for a house in Ontario, Canada. We just moved to Ontario last year and have been renting our place for more than 1 year now.

We are getting really close to make our decision. We have found a location that we like. There is a nice resale home there. It needs a small renovation; but it should not be a deal breaker. It has a good location and nice neighbourhood. It is very close to a good school too (although we don’t have kids yet).

We also found a new construction home nearby. The base price is even cheaper than the resale home for similar size. The construction has not been started yet because the builder is still waiting for permit from the city. However, they are confident that their schedule will be on time.

Now, we have to make our decision whether we should go for resale home or new construction home. We tried to list advantages and disadvantages of new construction home vs. resale home.

Advantages of new construction home:

• It is just “brand” new.
• We are able to choose the design and color that we want.

Disadvantages of new construction home:

• There is no guarantee that we see is what we get. Of course, the builder has a model home, but they have done a lot of upgrades. If we buy just standard home, we have no idea how good the quality is.
• There will be very high closing cost at the end. We need to spend money to pay for utility hook-up, landscaping, home warranty, buy window covering, install a fence, etc, etc. In fact, we have no clue how much money we will need at the end.

Advantages of resale home:

• What we see is what we get. No surprise at the end.
• The neighbourhood has been well-established. No more construction going on when we move-in. It may take a couple of years to build a community from an empty land.

Disadvantages of resale home:

• We have no control over the design. It is given. We can still change the color though, by just applying a new paint.
• Some resale home, like the one that we want, needs a small renovation. It means more $$$.

(Picture is from stock.xchng.)

We are currently planning to buy a house in Ontario, Canada. One of our criteria is, of course, location. It has to be closed to a good school. Although we don’t have kids yet; we are planning to have ones in the near future. It would be nice to have a house near a good school; so that our kids can just walk to their schools.

After doing some research, we found a good web site that provides school rankings in US and Canada, called CompareSchoolRankings.org. Unfortunately, not all states and provinces are available. For Canada, it provides rankings for schools in Alberta, British Columbia and Ontario provinces. It’s good enough for us since we are based in Ontario.

There are a couple of things we can do on CompareSchoolRankings.org. The most obvious one is displaying school ranking in our areas. For example, the following table shows the school rankings in Greater Toronto area.

We can also display a map displaying schools in certain areas. It has legend showing which schools are good (green color) and which ones are not that good (red color).

Although we move to Ontario, we still keep our town-house. The property market in Vancouver area was really bad when we left. We didn’t want to sell it below our purchase price. So, we decided to rent it out.

A couple of days ago, we received an assessment letter from BC Assessment. Our town-house is assessed with the value of $336,000. It is far below our purchase price, $382,000. We were a little bit shocked for a moment. As we wrote a couple of weeks ago, Canadian housing price seems to have recovered from its low.

Then, we checked MLS listing to see if any of our neighbours are selling their houses. Yes…, there is one neighbour who is selling their house. Their model is pretty much the same to ours. Their assessment value is also the same to ours. Guess what, they’re listing it for $469.000! We had another shock. Why is it far above our purchase price now?

We checked another source of data, i.e. Plunge-O-Meter. The chart below shows the average house price in Vancouver area since 1999. As you can see, there is a significant dip in late 2008 and early 2009. Then the market recovered quickly starting in mid-2009 to continue its long-term trend, moving even higher.

It makes more sense now. BC Assessment assessed our property value on July 1, 2009. This is where the market is bottoming. Since then, the price has gone up significantly, it’s now even higher than the previous peak in early 2008.