Visitors to the "new" HHV
This post is 9 years old. The data and my views may have since evolved.
As the “new” HHV has only been active for three weeks, I thought that readers might be interested in the range of readers visiting this site. As of the time I’m writing this, there have been 8,666 page views from 1,237 distinct visitors from from 16 countries. Who knew? Apparently Tuesday and Fridays at noon are the most popular time for viewing HHV!
Here is the distribution for the top ten countries:
I have a percentage break down for house construction. That might be interesting for the readers to see. I’m just wondering how to copy the form onto this site.
Good points about fees charged by all levels of government. According to StatsCan, carpenters average $28.20/hour on the Island, while the median across the US is $19.75/hour.
My suspicion is that our higher cost of construction relative to that of Americans is due to taxation and fees by three levels of government with their fingers stuck in the housing cookie jar.
I’ve heard that for the typical middle income house, taxes and fees contribute $100,000 to the cost of construction. And this seems acceptable to new home buyers given the current level of construction in Greater Victoria. The municipalities could make it cheaper to build but that would only mean larger profits for builders.
When we have our next recession, the municipalities and perhaps even the province may look at reducing these costs to stimulate employment. Materials and labor would also come down during a recession.
So in a strange way the high cost of construction is a barometer of how well the marketplace is doing. If construction costs are rising then that means a strong economy and market. If costs are declining that means a weakening market. I would think that you have to consider how the costs are changing rather than just activity. More construction could be related to lower costs from a weakening economy.
A selection of hilariously terrible listing photos: http://www.thepoke.co.uk/2014/05/26/20-terrible-estate-agent-photographs/
Good point, Dasmo.
In 2011, relatives in Portland (Oregon) bought a tear-down house located in a highly desirable neighbourhood (at the top of a hill and at the end of a cul-de-sac) for just $295K. The next year, they built their “dream home” on the lot for another $300K. Most of the labourers were Mexican (likely some not legally in the US), but the build quality was excellent. I expect that the house would have cost $450K to build in Victoria and the lot was worth $600K. To put things in perspective, they sold their “Broadmead-type” home in 2012 for $387K, likely worth an extra $300K in Victoria.
Way cheaper labour for one. They don’t really want to close the border…. Cheaper material costs, Economies of scale with the big corp builders. Plus, you aint buying a custom home on a city lot in a desirable neighbourhood for 300k… so the comparable would be Weshills not an OakBay custom…. so more like 500k vs 300k. Still a lot more….
House replacement costs in Victoria
Another way at looking @ the housing market is how much would it cost to build something new. The houses in the older parts of Victoria (Vic/OB/Esq) average 80-100 years old and nearing it’s useful life. Houses in Saanich are 40-50 years old. WC are likely 20-30 years old.
We all love heritage, but who doesn’t want to live in a new home? I mean real plumbing and insulation. So if you were to build a new SFH in the older part of Victoria, the replacement value would kind of look like this:
500,000 to 750,000 for land
330,000 to 440,000 for building a 2200 ft2 home @ $150 to $200/ft2
Range is 830,000 to 1.19MM
No wonder the prices of New SFH in the core regularly are 1.3MM+ in OB and close to 1.0MM in other parts, it is so expensive. What I can’t figure out is how the Americans can sell new homes that are McMansions, even though the land it dirt cheap @ under $300,000 USD?
We know our land is over priced, but is labour and materials over priced also by such a large margin on the Island?
Victoria’s growth is anemic. Very surprising. Always thought we are a top 10 versus a bottom 10 in terms of growth.
More evidence that this spring is leaning towards a seller’s market. Any ideas on the average days on market for those properties?
Last 15 sales in the Oakland’s area….
Average list price – $476,707
Average sale price – $488,654
lol…ok maybe my green arrow was a bit large, but when have governments projected anything correct. Do you think they projected Kelowna would go from bottom to a top growth city in one year?
See where Kelowna is on the ‘12/13 growth rates below. Now take a look where Kelowna is on the ‘13/14 (green arrow chart above).
http://www.statcan.gc.ca/daily-quotidien/140226/cg140226b001-eng.gif
I’m betting it’s around 3% now (’14/15) and possibly leading the country now that Cal, Ed, S’toon, and Regina are out of the race.
Ha! Love it
I appreciate you optimism, but you might want to check out the long-term population projections prepared by BC Stats for the Victoria CMA: http://www.bcstats.gov.bc.ca/StatisticsBySubject/Demography/PopulationProjections.aspx. The projection is for barely more than 1% annual growth over the next ten years, falling to the 0.5% range by 2040. Twenty five years from now, the expected population will be 450,00, up 25% from the current 361,000. How does this compare with the past 25 years? In 1990, the population was 290,000 – so we’ve grown by exactly the same amount as projected for the next twenty-five years.
After looking at the building permits, this would make for an interesting new post question…
Is Victoria about to pole vault from one of the slowest growing to fastest growing CMAs in Canada in the next few years?
http://i.cubeupload.com/JFlqSi.png
What makes me wonder is the building permits numbers released today and how the non-residential were strongest. The top 3 cities and there annual increases were; Toronto @ 134.7%, Victoria @ 116.6%, and Vancouver @ 88.9%. Calgary and Edmonton permits are now only increasing @ 8.0% and 10.9% annual rates.
Canada housing starts jump, bode well for economic snapback
http://ca.reuters.com/article/businessNews/idCAKBN0OO1C820150608
It could be because of the road sign right by the driveway.
http://i.cubeupload.com/DyvLvB.png
That hot Peruvian money’s going to do us in – buy now or say goodbye~!
Anyways, curious to hear people’s thoughts on 3703 Happy Valley Road in Metchosin. Half acre with a detached suite, what else could you ask for? Why’s it gotten so stale?
“…surveys showing about a third of Albertans (1.4 million) and 7% of Ontarians (1 million) who would like to retire to BC”
Yeah that’s what I mean with all the talk about people who will supposedly move here. There were countless references to surveys like that on the old blog too. Check out real estate agent websites and you’ll see the same thing there.
It’s probably better to look at what retirees actually do in retirement. They usually stay put. Do a third of Albertans really move to B.C.?
When people in their early 50s are asked something like “would you move to B.C.?” their answer doesn’t really tell us anything useful. They’re relatively young, healthy and in their peak earning years in their career. They haven’t experienced life in retirement with grandkids, mobility and chronic health issues, being unemployed on a fixed income etc.
I think it’s sort of like how every time I’m on holidays in Hawaii I think I want to move there….but of course never do. But the idea of living there is awesome!
Thanks for the stats, Marko. It looks like sales are continuing at a high pace while listings remain comparatively low.
Monday, June 8, 2015 8:00am
MTD June
2015 2014
Net Unconditional Sales: 208 680
New Listings: 357 1,234
Active Listings: 4,018 4,695
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
It looks like the boomers from only 4 provinces; Manitoba, Saskatchewan, Alberta and Ontario, will make much of an impact on BC.
http://i.cubeupload.com/ARryF2.png
Alberta and Ontario will be the two to produce a sizeable number of Canadian retirees moving to BC, with surveys showing about a third of Albertans (1.4 million) and 7% of Ontarians (1 million) who would like to retire to BC.
I agree that the early 2000’s was an excellent time to buy, particularly with a variable rate mortgage (as rates dropped quite a bit within a couple years) .
BTW… I don’t go out of my way to disagree with someone with a differing opinion. If fact, I believe that a range of opinions is very healthy and sets apart HHV from some other blogs. ☺
My experience is that “old” people prefer to live nearby their family. As their friends pass on, they turn to children and grandchildren for companionship. They rarely want to move to a new city, even if it makes good economic sense.
I think you might mean “old” people are obsessed with this town. I’ve never heard anyone say “boomers are obsessed with the garden city“. Not yet anyways.
I guess the question becomes what happens as boomers get “old“ over the next twenty years. Example, you just turned 68 and retired, live in south Burnaby, kids and grandkids up north and back east, your big old house is worth 1.5 million and you notice you are becoming more fond of a slower pace, ocean walks, sunnier winters, fine dining, ducks and flowers…to top it off you see a sold sign go up on your long time neighbour’s house that you often play cards with and he says they bought a nicer place for half the money in Victoria.
Will be interesting how this affordability picture turns around if prices start rising. Most of the improvement in affordability has come from rate reductions. Those are tapping out and if prices rise it could be reversed very quickly.
“Can you show me the chart where all these people are coming from?”
I’ve been hearing that boomers are obsessed with this town for as long as I can remember . The truth is that Victoria is obsessed with boomers. That generation has had their entire adult lives to move here and they still haven’t done it.
In fact Victoria has remained one of the nation’s smallest, slowest growing cities the whole time. But the local belief that it’s about to attract hundreds of thousands, if not millions of people born in the 1950s is as popular as ever!
We‘re not necessarily disagreeing, just discussing different dates. I said “best opportunities for buying in Victoria (similar affordability as 15 years ago)“ which equals the year 2000. You can see the year 2000 and now look to be at the same level on the above chart. I’m guessing you will probably disagree with their data, but it’s probably fairly rigorous.
If you do happen to agree with their data (showing the same affordability for now and 2000), then you may also agree with VREB’s data that show 2000 was an incredibly opportune time to buy.
http://i.cubeupload.com/NKdoSY.png
But I have a feeling you will want to disagree again 😉
Sadly, the same kind of marketing approach is also used overseas – as shown in this documentary from The New York Times: Rent-a-Foreigner in China https://youtu.be/hdS-l0SeTTc
Yep, that’s good marketing. Hire the Chinese couples, Say it’s more affordable now than ever. Greed and fear always markets well…
I would respectfully disagree… As shown in my earlier comment – a mortgage on my house would cost $450 more now in 2015 than when purchased in 2002 (in 2015 dollars).
Another way of looking at it was in 2002, when we purchased our house, it cost 2.25 times our family income. In spite of our income increasing 50% in the past 13 years, the house would sell for at least 3 times our income.
That’s why 2014-15 will also be looked back on as one of the best opportunities for buying in Victoria (similar affordability as 15 years ago).
The early 80s & late 70s were even worse than the early 90s for RBC’s affordability measure.
http://i.cubeupload.com/mGJjpf.png
Saying that houses are as affordable as any time during the past 40 years doesn’t make it so… Got any numbers to support your argument?
Yep, the chart came from Garth’s site… I believe that the data came from VREB, but I am not sure.
lol… I suppose all the opens we’ve been to lately could have been hiring the Chinese couples. I wonder how much they charge per hour?
Care to provide some numbers to support your assertion that affordability…. similar to, ’87 & ’02? According to the BOC, inflation since 2002 has been 27%, but housing prices have doubled.
In 2002, for my house a 25-year mortgage at the prevailing variable rate of 4.50% would work out to $1300 per month ($1650 in 2015 dollars). The same mortgage in 2015 with the prevailing variable rate of 2.85% is $2100 per month. That $450 difference seems much less affordable to me…
A “whole new era” of credit expansion and greed… sign me up. It’s exactly what the central bankers are shooting for. If you missed out on the stock run you may as well grab your piece of Victoria’s property run, especially when houses are as affordable as they’ve been here for 40 years 🙂
Now that Genworth is calling the sub-prime shots in Canada with CMHC maxed out, I wonder how much money they are supplied via the new US housing/mortgage backed shadow banking system that operates with zero regulation ?
“That new reality has experts warning of an unprecedented new era in the mortgage industry, in which the majority of home loans come from institutions with no deposits on their books — a massive transfer of systemic risk from closely scrutinized depository banks to lightly regulated shadow banks.”
“This is a whole new era,” says Marshall Lux, co-author of a new study from the Harvard Kennedy School on the rise in nonbank mortgages. “It’s a night-and-day situation.”
““It’s a really interesting time to be in the market,” says Lux. “The only thing we have to watch for is that greed doesn’t come back in.”
Good ole greed, nothing to worry about right ?
http://www.ibtimes.com/shadow-banking-now-dominates-mortgage-market-edging-out-wall-street-giants-1948660
“In fact we are right back to the same affordability as 2000.”
Right as the stock markets crashed and CMHC quietly opened the floodgates and bankers gradually raised 25 year mortgages 30, 35, then 40 years as affordability maxed out over each year from 2004 to 2008.
Historical low interest rates and personal debt levels beyond the US housing crash only leads to historical surprises when you’re not expecting it. Historically speaking of course. 😉
If I was selling a high end house I would hire Chinese couples to attend the open house….
I will admit Hawk, when you see insanity (irrational exuberance) like this it does make you wonder if a correction is looming.
http://globalnews.ca/news/2040234/west-vancouver-home-sells-for-1-1-million-over-asking-price/
37% over the list price…and the realtor says it was “quite sharply priced”. Then again, go check out some high end open houses today in Victoria and I guarantee you will see mainland Chinese couples. There’s likely a billion of them who would love to live here, so when does it stop? That global piece only needs one more sentence added to the end…“And then those people are taking their windfall and they’re buying something like a beautiful house in {Victoria }.”
Didn’t DavidL’s chart come from Garth’s site? Last I checked, Garth figures there are no foreigners buying in Canada.
We can use RBC’s up-to-date affordability measure if you want. The outcome is the same in that it is much more affordable now than it was in the early 90s and from ‘05-’08. In fact we are right back to the same affordability as 2000.
http://i.cubeupload.com/mGJjpf.png
My guess is we now head back towards the 50-60% range (on RBC’s measure) as prices rise over the next 5-10 years, even with rising wages.
Might want to use a more current chart that isn’t 3 years old. It’s already back to 42% range per RBC, so your 2020 estimate is off by only 5 years. I would say that is being generous, and doesn’t include a small thing called “property taxes”. So you can add a few more percent on there.
http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/house-march2015.pdf
“There’s too much outside and retiree money starting to chase our limited supply”
Can you show me the chart where all these people are coming from ? DavidL posted a chart on the previous thread showing that 75% percent are local, that’s not what you call “too much outside and retiree money”. Not sure how you can even say hot “retiree” money is moving in with no stats to prove it.
I’m sure there’s just as many anecdotal stories of those moving away from Victoria to offset any of those moving here. I have family that just sold and are moving to the mainland and another that rents that just moved away from Victoria. Doesn’t mean it’s a trend, just that it happens vice versa for many years, as it always has. Sounds like irrational exuberance when you bet the farm on four walls and a roof.
Debt loads are as affordable as they’ve been for 4 decades…near 30% for affordability again, similar to ‘87 & ‘02, and much better than most of the 1990’s. I suspect rising house prices and interest rates will put us back into the 40-50% range for average earners by the 2020s again, even as rising wages help offset.
http://1.bp.blogspot.com/-hbV4b_WvAaA/UQI5XK2lb4I/AAAAAAAAAus/iV2LjAVkAWg/s1600/maffproj.png
There’s too much outside and retiree money starting to chase our limited supply, and wages and interest rates typically don‘t affect those buyers… as Numbers Hack mentioned, Vancouverites are finally trading across (for half price).
“That’s why so many people are moving from Vancouver to here, we personally know of 5 families in the last 2 years.”
“Whopping” totals don’t mean higher incomes. Last time I looked, part time workers make far less than full time and aren’t given mortgages on a silver platter. That’s the only point to take home until the numbers swap to 2/3 full timers in non-seasonal sectors. This isn’t 1990’s when debt loads were realistic, not historically off the charts into no man’s land.
BTW, the Feds are offering practically nothing for a wage increase, 1.5% range from what I was told so no wage growth there, it’s going backwards.
The gains were in the following industries…
manufacturing (+2,600 or +1.5%)
utilities (+1,100 or +8.5%)
health care (+13,400)
transportation and warehousing (+3,900)
accommodation and food services (+6,800)
professional, scientific and technical services (+4,800)
business, building and other support services (+4,800)
information, culture and recreation (+4,500)
9,600 were full-time, 21,100 part-time. BC had by far the largest increase in employment at a whopping 1.4% for May (that’s 16.8% annualized). Even Calgary had a 1,900 net increase in jobs in May.
Worker strikes result in wage increases and inflation.
We’re likely entering a period similar to ‘87 or ‘03 on the inflation and interest rate front.
http://i.cubeupload.com/7hvyim.png
After further investigation I guess we can calm down about the jobs pop in BC as most were part time, not something CMHC and bankers lend mega bucks to. Most of the increases were in the typical seasonal areas one would expect relating to tourism and health. Nothing to get excited.
Funny how the TC doesn’t even bother to write a report on the jobs numbers, so I take it Victoria’s flat reading is not even worthy of a mention, but keep pumping out those real estate stories cause advertisers pay dammit ! 😉
“B.C.’s economy was up by 31,000 jobs in May, mostly in part-time work, as the rest of the country saw a surge in the labour force, Statistics Canada said Friday.”
“Sectors that saw the most growth last month in B.C. were health care and social assistance, and accommodation and food services.”
http://www.vancouversun.com/business/gains+jobs+private+sector+employment+surges+across+Canada/11111692/story.html
Will be interesting to see how the threat of a Federal government workers strike plays out. Harper is out to screw them and they are not a happy bunch. Since Victoria has a fair amount of them it could have an impact if it the threat of strike action plays out past the election.
Looks like the jobs picture just put a kibosh on any more rate cuts. With record debt levels I would say this won’t be 1990’s all over again as few had even heard of a HELOC back then. If the NDP upset as numbers indicate, then you could see interest rates go up quickly as international financiers would sit well with the notion of an unknown government in control.
http://www.huffingtonpost.ca/2015/06/05/ndp-poll-mulcair-election-ekos_n_7521306.html
It’s official. We have low rates and wage increases. Plus everywhere people are talking about it again…. Still a Halibut but I’m coming out the sea… Expect the next wave of data to show price increases…
My kids are still in elementary school! I expect that I’ll be selling/buying before they do …
More likely that the UAE viewers are members of the Canadian Forces (Navy) from Esquimalt who are currently deployed to the Middle East.
We have wine the Stanley Cup!
http://en.m.wikipedia.org/wiki/Victoria_Cougars
Run, the sky is falling… BC only added 31,000 jobs last month… wait a second, that’s 1.4% growth in employment in a month!
Run, hide, save yourself…“U.S. job growth accelerated sharply in May and wages picked up, signs of momentum in the economy that bolster prospects for an interest rate hike in September. Nonfarm payrolls increased 280,000 last month”
Hmph. Golly, maybe the threat of interest rate hikes are a good sign.
Exactly! There’s a reason millions of B.C. residents are paying way more money to NOT live here and be in Vancouver instead. Most people don’t want to live on an island.
But that works out just fine for those who prefer island life. And yeah, it’s a nice place to visit in the summer.
Lots of rich people in UAE also. I thought oil was down? haha
I figured it out… you and LeoV must have kids you are worried about buying a home for… am I right? That’s a valid concern if you don’t want them to have to move away to buy a house.
Once we hit 500,000 population and get our own NHL team who can win a cup, people won’t think it’s too small anymore 🙂
I think that many tourists think that Victoria is a great place to visit … but to live here – I’m not so sure. One of the biggest complaints I hear about Victoria is that it is “too small”. (Disclaimer: I was born and raised in Victoria and am definitely biased towards it!)
Or they were China military looking for some easy picken’s. 😉
http://www.cnn.com/2015/06/04/politics/federal-agency-hacked-personnel-management/
Then again we have a possible global bond butt kicking on the menu, but have no fear cause “we are Victoria the insulated ! ”
http://business.financialpost.com/investing/why-no-one-should-be-surprised-by-the-bond-collapse-that-has-wiped-out-2015-gains
Or maybe they are just looking to jack the market up with some phony bids so they can flip the place down the street as the neighborhood gets pumped.
http://business.financialpost.com/personal-finance/mortgages-real-estate/phantom-real-estate-bids-are-enough-of-a-problem-that-ontario-is-cracking-down
HPM
For example, at least 7 people from China are looking at this site to determine if it’s a good time to buy! 🙂
Very cool. I would think the views will increase as it’s a great site.
I do have to disagree with your “Victoria is not on the radar for many jet setters” comment. For example Conde Naste surveys of 80,000 voters put us in the top 25 cities worldwide.
http://www.timescolonist.com/news/local/victoria-rates-among-world-s-best-cities-in-cond%C3%A9-naste-2013-readers-choice-awards-1.661334