Home Suite Home

In the previous blog topic, there’s been much discussion about how having a rental suite in a house can affect the resale value. Some neighbourhoods (such as Broadmead in Saanich and all of Oak Bay) do not permit legal secondary suites in Single Family Homes. Although many people would prefer not to have a suite in their home, the large quantity of illegal suites in Victoria houses suggests that many are willing to give up space and privacy in order to enjoy the benefits of a “mortgage helper”.

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What “pros” and “cons” are important when considering a rental suite?

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137 thoughts on “Home Suite Home

  1. Hey -As a newly married person (with a family gift of $100k available for downpayment) i appreciate the continued advice JJ. i guess you right, as many houses are selling for 50k over-asking / bidding wars, then half of that deposit $$ is immediately gobbled up.

    Can’t believe that Jamie girl has over 1 million Youtube subscribers.

    I do consider buying the condo we currently rent (rented x 4 years now & love it) – Could buy direct from landlord & put 33% down & continue to save 50% of our income & retire early (not going to have kids & we like sliding around in our little box! not willing to pay $1000/month premium x 25 years just for a yard)

    Do you feel a condo is an all right decision if you 1. know you like it 2. can easily afford it (ie. have $$$ if special assessments come up) 3. are comfortable living in it for a long time (ie. potentially forever) & 4. worst case scenario, it is easy to rent out (close to students)?

    I guess I have a hard time thinking of a home as an investment, because I don’t plan on moving out of it & don’t plan on depending on house sale to pay for care home (also can’t-leave-the-inheritance-to-my-dog)

    If a house is a home not an investment, isn’t it smarter just to make it the cheapest one that you would be comfortable in?

    Sorry for the ramble (didn’t follow jamie’s advice about short-messages-being-cooler)

  2. Agreed, excellent reporting from Sam Cooper of the Province. Makes you wonder how much laundering has gone on here under the guise of buying up businesses as well as houses. No place is immune from this mass corruption. When will someone grows a pair in the Victoria media and do some digging like the Province does? Probably never as it’s bad for business in a one horse town.

  3. “CRA should assign a market rent to vacant properties”

    The Swiss can do you better than that. There you pay tax annually on a deemed market rent on your home even if you live in it as your primary residence. Roll that around your head for a while. ‘Tis not surprising then that very few ordinary Swiss folk make any effort at all to reduce their mortgage principal and stay almost entirely financed for a lifetime.

  4. A suite would make the property more affordable. And also more expensive to purchase.

    I don’t know how wise it would be to buy a suited home and then not rent out the suite. You’re paying a premium for that potential rent income.

    Of course for some investors that’s what they do. They will buy investment properties and keep them vacant. The appreciation outweighs the marginal income they would receive as well as income tax problems.

    Maybe that’s a solution to Vancouver’s problem. CRA should assign a market rent to vacant properties and have the investors declare that as Canadian income and thereby they would have to file taxes each year.

    I bet the money launderers would hate that paper trail.

  5. Thanks for posting. Wow – does real estate in Vancouver ever stink like a sweaty glove. It’s a damn shame that no politicians have shown the leadership to step in a put a stop to this mess.

  6. JJ, do you have any evidence of price fixing? That infers they were colluding.

    I imagine that some developers “fix” prices the same way that gas stations do. Developers avoid undercutting each other, setting a “elevated” price for a similar new real estate “product”. Otherwise a price war can start, with nobody (other than the consumer) coming out ahead.

  7. Would consider a suite, makes it more affordable to get into the real estate market in VictoriA. Adds security and passive income and can always be removed when now longer needed or wanted.

  8. JJ, do you have any evidence of price fixing? That infers they were colluding. I like my conspiracy theories but I don’t think it was that. There were too many other options out there… I think it was more hype and marketing than collusion. Like Bear Mountain for instance. I looked at that entire thing and went right… a golf based whistler in seven years…. riiiiggghht…. But alas people sucked it up. Same thing bugs me with these master plan communities selling at top dollar at the beginning. They should be at a steep discount since the early buyers only assume risk and get no benefit from getting in early. Look at dockside green. That was supposed to be done in seven years. Those first buyers have been living next to a hole for seven years…. I got a steep discount for buying into VicWest in 2003 before the hype kicked in. I can live with it’s scars and bruises because of that, including the Dockside Green because my house cost half of a condo there…

  9. It wasn’t just hysteria. With only a few condo builders in 2008, there was price fixing as well. Only when re-sales started to compete with the developers did prices come down and become aligned with condo sales in other areas like Saanich and Victoria.

    It becomes obvious to everyone after the prices correct that people over paid. But the people buying condos off developers back then were adamant that it was different.

    But it still is happening today. Fernwood and Oaklands are over priced relative to the surrounding areas yet people try to find some reason why it should be different in that hood. People talk themselves into believing its different just like they did with condos in Langford.

    Any differences between one block and another or even one side of the street and the other is amplified by the low interest rate. When a hundred grand costs less than $450 a month in a mortgage you can get some outlandish reasons why buyers will pay a hundred grand more than the identical house a few blocks away or even across the street from another. The best justification for overpaying being “location”. If your excuse for overpaying is location it usually means you bought a tear down house without any redeeming features.

    I won’t use the example of a 19 year old so that Butter09 won’t be lamed out. But say you’re a 29 year old that got married. Both your parents and your spouses want to help you out so they agree to give you a down payment for a house. Armed with a couple hundred grand in this one-sided market – you’re going to make some horrendous mistakes.

    In order to be less lame in my posts, I thought perhaps I would get some advice from someone in the know who understand today’s meaning of lame.

    https://youtu.be/P1jDOwGbstE

  10. Condos in Langford should be cheaper… The hysteria allowed them to be overpriced… The reason to live in Langford would be to have more space for less money…Capital City Centre should be re-envisioned as a high density family oriented development. The zone I’m living in in Rotterdam is full of young families. Because there is a mix of open space but more important the unit’s are big enough… Luxury high-rise condos in Langford is just plane wrong and the market is now reflecting that.

  11. If condos are the canary in the coal mine. Then our canary will likely be condos in Langford.

    There are 125 condos listed for sale ranging from a low of $174,000 for an estate sale of a ground floor unit along Goldstream avenue to a high of $799,000 for a 2,400 square foot Penthouse on the top of Bear Mountain. -Both of which I think are pretty good deals.

    And 24 have sold in the last 30 days for some 5.2 months of inventory. The mid-point in sales shows a median of $245,000 for a 900 square foot condo or what you would have to pay $370,000 for a similar condo in Victoria. Half the stratas are selling in under 63 days; and new listings are being added at the rate of 2.3 for everyone that sells. Looking at the last 100 sales in relative to the 100 sales before the median price has remained flat between $256,000 to $254,000.

    With lots of selection, and a reasonable time for buyers to make their decisions along with fresh inventory being added this is well balanced market that doesn’t favor buyer or seller.

    This coal mine canary is laying on a beach chair with a margarita and an umbrella thinking shall I paint the kitchen yellow or egg shell blue?

    Certainly a contrast to the hard sell marketing techniques being used on home buyers in Victoria. No subject offers, 24 hour clauses, back up offers, no inspections and auctions. This canary is strung out on crack cocaine.

  12. I don’t really get the point of the stories about the 19 year old buying the condo or all the videos. It’s getting kind of lame.

  13. “…245 people have bought a condo so far this month in Calgary? Are they simply brain dead?”

    Some of those buyers will be looked upon as geniuses in a few years that they bought into the energy bottom. Nothing better than lowballing a fearful seller to have them quickly accept you price and all your terms.

  14. Calgary had seen huge declines for about 5 years leading up to 1986 and rates were dropping like a stone. Kind of a different sceanrio.

  15. It’s rather simple. Saudi Arabia’s GDP IS 92.5% dependent on oil…. Alberta is about 25%…. It’s a hit but I guess not enough for sellers to capitulate… Yet…

  16. It’s entertaining how everyone thinks Calgary has to crash due to oil. Even when Calgary was more dependent on oil in ’86 and oil crashed by 2/3rds, home prices didn’t budge.

    If you want to know where corrections are in the works, look to oil towns like Fort Mac and Estevan.

  17. Even in Calgary with all the doom and gloom of low oil; prices for houses are about the same as they were a year ago. Despite a 28 percent drop in sales and a 20 percent increase in listings.

    What I don’t understand is Calgary Condos. Prices are down 11 percent. Sales activity down 38 percent. Inventory has almost doubled. And developers are still building.

    What I don’t understand is that 245 people have bought a condo so far this month in Calgary? Are they simply brain dead? Does their family tree resemble a stick?

    The industry calls Calgary a “buyers market”. It certainly is a bear market but it ain’t no buyers market. If you want to see the effects of low oil, take a look at Saudi Arabia’s real estate market where prices are down 30 and 40 percent there. Calgary has a lot farther to fall still.

    If you’re a developer in Calgary it’s time to order more plywood to board up the doors and windows of the unsold inventory.

  18. Real estate boards don’t keeps records of the ages of the buyers.

    This is more likely due to lowered lending standards by CMHC to boost that happy feeling before an election.

  19. Saanich East Median is the highest EVER

    Month 2011 2012 2013 2014 2015
    Jan $630,000 $615,500 $550,000 $579,000 $531,500
    Feb $655,000 $569,000 $590,000 $637,400 $611,500
    Mar $615,000 $586,000 $600,500 $614,500 $631,000
    Apr $652,250 $620,750 $626,500 $599,000 $665,000
    May $622,500 $600,000 $584,000 $608,575 $655,000
    Jun $609,500 $650,000 $609,000 $597,000 $687,500
    Jul $595,000 $647,500 $575,000 $597,000 $646,000
    Aug $620,000 $590,750 $544,500 $647,500 $696,000
    Sep $622,500 $545,000 $602,500 $588,000
    Oct $625,000 $565,000 $581,000 $584,250
    Nov $590,000 $569,000 $575,000 $625,500
    Dec $619,000 $571,000 $600,000 $627,250

    Same with the AVERAGE

    Month 2011 2012 2013 2014 2015
    Jan $710,689 $681,179 $592,776 $638,137 $589,625
    Feb $683,987 $616,798 $735,740 $673,027 $659,829
    Mar $681,016 $645,421 $612,367 $727,153 $673,609
    Apr $754,486 $646,190 $743,995 $676,591 $751,627
    May $661,901 $706,253 $666,251 $651,834 $740,254
    Jun $699,440 $669,275 $693,893 $636,043 $761,771
    Jul $661,832 $693,685 $633,457 $675,491 $781,443
    Aug $704,335 $625,688 $623,213 $764,540 $809,797
    Sep $776,968 $567,881 $672,521 $671,138
    Oct $641,151 $608,051 $661,985 $647,864
    Nov $646,039 $611,468 $634,661 $657,316
    Dec $684,644 $673,794 $683,141 $651,061

    “YOU’RE RICHER THAN YOU THINK”

    Time to convert that equity into cash by taking out a low cost loan.

  20. Looks like the retirement wave is not only starting to hit Victoria, as the Niagara region too is up 10.7% (even outdoing Toronto’s 10.4%).

  21. Are median and average prices in Saanich East right now the highest they’ve ever been, or were they higher a few years ago?

  22. You’re 19 years old and have your first full time job. Mom and Dad are tired of you bringing home skanks and want you out of the basement and have agreed to take the equity from their home to buy you a condo. To them it’s worth a couple hundred a month so that they don’t have to see you and your pets so often. It’s either that or mom needs a haz mat suit to clean your sheets each week.

    So how much do you hit them up for?

    Let’s look at pre-owned condos constructed prior to 2013. Frugal parents will want to start here. If that isn’t good enough for you- just up the number of piercings and tattoos. Bring home a date with a facial tattoo or one with the looks of Mayor Lisa (male or female it doesn’t matter) and that will certainly guaranteed you a new condo.

    This month there may be nearly 150 pre owned condos sell in the core at an average price of around $310,000 and a median of $265,000. That median price will get you a mid 1990’s 900 square foot 2-bedroom suite on the second or third floor of a wood frame building. And affordable for mom and dad. The down payment will cost them just $250 a month on their line of credit for the next 25 years.

    Ahhh but you feel your parents owe you more – and they do!. Then go for new. Average and median price for new is around $370,000. That ups mom and dad’s share to $350 a month on a 20 percent down payment. But you shouldn’t stop there – threaten that you and your significant other can’t afford food and have to eat and mom and dads. Now you can go for a bigger down payment to get the mortgage payment down. Go for 40% down and have them on title too. That ups them to $700 a month but they feel that they’ll get it back when it comes time to sell.

    That’s what they think – one of your pets will move in and that makes a new partner in the deal.

  23. hard to test the market price when there is someone else wanting to buy the same place. That’s why I bought in 2012. No competition and more selection. There are no beaters in Fairfield for under 500k anymore…

  24. The market for houses in the core districts is heavily one sided these days.

    I’m projecting house sales for this month to be around 180 and inventory at 450. Projected median market exposure to be under 30 days. New listings at 200 for the month.

    That puts projected months of inventory at 2.5 and a new listings to sales ratio at close to 1.

    A balanced market that neither favors buyers or sellers will have between 4 to 7 months of selection with new listings being added at the rate of 1.5 to 2.5 for every home that sells. The typical property being exposed to the market between 30 to 90 days.

    At 2.5 months of inventory, an NLS at 1 and DOM at 28 the market is heavily in favor of sellers with some of the “turn key” or recently renovated homes in the better hoods selling at above market values in bidding auctions.

    The projected average price to be a smidge under $800,000 and the median at around $650,000 for the month. The typical home selling at 10 percent more than its government assessed value. The biggest increase in sales activity still remaining in the $600,000 to $800,000 price range.

    These one sided markets don’t last forever. Markets are more often within the balance range as economic forces are always pushing to equilibrium.

    Just to give you an idea of how far the market is in sellers territory the City of Calgary has had a drop in sales activity of 28 percent and a rise in listings by 20 percent. If that were to happen in Victoria’s core it would only bring the market into balance.

    It really sucks if you’re trying to buy a house in the core. It isn’t a pleasant experience, Estate agents are playing hard ball with you and there seems to be no one guiding you in your decisions. It would be nice if there was someone who could tell you what is fair or how much over market value you’re paying or when to walk away from a deal.

    Most people could live with paying 5 percent over market value but if you’re being pressured into paying 10, 15 or 20 percent more?

  25. “I assume the upstairs only has 1000 Sq ft after the 2 bed suite must be 800 at least.”

    I was referring to the Townley house. The MLS stated there was 1800 total sq ft.

  26. The sheep continue to get fleeced. Always happens at the top, unless you’re on Bear Mountain of course. $700K hit job…. ouch !! Must be one of those minuscule percentage of bankruptcies no one has to worry about.

    I assume the upstairs only has 1000 Sq ft after the 2 bed suite must be 800 at least. Not much living space for $700K minus $1200 or so a month for that size of space. Plus an old fireplace which isn’t heat efficient.

    Watched a couple play flipper after the 80’s crash. Went bankrupt very slowly over a year. Sucked the family and in-law’s cash down with them as they tried to keep them afloat trying to make the big flipper bucks. Guy was a tradesman too. Was painful to watch.

  27. I guess location is everything. This fugly old 70s box just sold for same as the Bear Mtn condo… it’s not even top floor, no view to speak of, and the fees are $506 per month!

  28. Sure looks like it.

    Just because a property sells for $710,000 doesn’t make it worth $710,000. This is a game to be played by only those with big down payments.

    In contrast there is the condo on Bear Mountain that was bought off the developer in 2008 for $1,250,000 and re-sold today at $550,000. This is the cost of irrational bidding wars.

    Now for a musical interlude….

    https://youtu.be/AhR36gV6vW4

  29. Norway and Australia’s GDP has taken a hit as of late and recessions are feared. Denmark seems OK but, of these 3 countries, they actually saw significant house price adjustments after the GFC and are still well below 2008 prices. Hmm.

  30. Mon, Sep 14, 2015 8:00am:

    Sep Sep
    2015 2014
    Net Unconditional Sales: 275 565
    New Listings: 412 1,099
    Active Listings: 3,553 4,253

    Please Note
    Left Column: stats so far this month
    Right Column: stats for the entire month from last year

  31. This is why OPEC can’t fight this price war for much longer….

    “Kuwait’s parliament on Wednesday approved a state budget for the current fiscal year that envisages a budget deficit of 8.18 billion dinars ($27.0 billion) – nearly half total spending – because of low oil prices.” “”In the 2013/14 fiscal year, Kuwait posted a budget surplus of 4.96 billion dinars”

    http://english.alarabiya.net/en/business/economy/2015/07/01/Kuwait-parliament-approves-budget-with-27-billion-deficit.html

    The government of Kuwait provides free health care for life and free education, from elementary school all the way to college, for all Kuwaiti Citizens. Each Kuwaiti child receives approximately $275 a month, every month, until they turn 18. Kuwaiti citizens also get a lump sum of cash in the amount of $12,000 when they get married and a free house is thrown in too.

    They are used to these lavish benefits and will not be so happy to lose them….

    Oil prices at these levels just wont last much longer if everyone is losing money producing it…

    I don’t know when it will turn but I think we are looking at 2016.

  32. The market should have crashed big time in 2007/2008, other than a small blip, it didn’t.

    Didn’t because interest rates were dropped to near zero. No chance of a comparable rate happening if we have another financial system crash, because rates are already on the floor.

    Ambrose Evans Pritchard:

    Debt ratios have reached extreme levels across all major regions of the global economy, leaving the financial system acutely vulnerable to monetary tightening by the US Federal Reserve, the world’s top financial watchdog has warned.
    The Bank for International Settlements said the wild market ructions of recent weeks and capital outflows from China are warning signs that the massive build-up in credit is coming back to haunt, compounded by worries that policymakers may be struggling to control events.
    “We are not seeing isolated tremors, but the release of pressure that has gradually accumulated over the years along major fault lines,” said Claudio Borio, the bank’s chief economist.
    The Swiss-based BIS said total debt ratios are now significantly higher than they were at the peak of the last credit cycle in 2007, just before the onset of global financial crisis.

  33. It’s a game of musical chairs. What else is your friend going to spend his equity on? After all It’s only bubble bucks that he’s spending. It wasn’t like he had to work double shifts at the Kwick -E Mart to earn real money.

    And your friend is not alone. The biggest increase in sales activity has been in the middle income housing market.

    That’s a new phenomenon in the marketplace. Markets need injections of new money to support itself. That’s why the first time buyer market is so important and governments target new buyers in their policies. The marketplace no longer appears as a pyramid shape with a broad band of new buyers but more like a colossal circle jerk.

  34. No worries, that was my first snd last question ever to you. Speaking of “annoying” it would make a great new nick for you as per your babbling posts based on renting out a few shacks. I post articles based on spotting changing trends so other readers can maybe not leap into a financial disaster. If you don’t like them then don’t respond. It’s that simple.

  35. Marko is absolutely correct: most people are really stupid with money. Case in point, a friend of mine has nonchalantly sold his house because he and his family want a bigger/better one. He seems blissfully unaware that the cost of this little change (realtor, transfer tax, etc.) is equal to his take-home pay for an entire year.

  36. Like I said, let’s check in after a bear market. His farm does not cash flow, so why would he expect continued appreciation? It has no value outside of a farm so if it is wildly more expensive to own than rent then the value is not based on anything and it’s pure speculation.

  37. How about you do some research for yourself before posting?

    As I stated, the stats are available on the superintendent of bankruptcy website. They are up to date (june 2014-june 2015) and your unsubstantiated speculation without any attempt on your own at verification is… annoying.

    You have access to the internet so there is nothing stopping you from doing this primary confirming research yourself.

    Even if you are talking about a 10% increase in consumer proposals you are talking about a very small number of people and there has definitely been a corresponding decline in bankruptcies yoy.

    An increase in consumer proposals and decrease in bankruptcies would indicate to me that things are improving.

    You need better finances to support a consumer proposal than what leads you to bankruptcy and it is by far preferable – except perhaps for seniors who benefit from the RRSP and pension exemptions from bankruptcy.

    Here is all the verified info you need: http://www.ic.gc.ca/eic/site/bsf-osb.nsf/eng/h_br01011.html

  38. Except that post was from December 2012 so we can already check back in.

    According to his 2014 update, “According to FCC during 2013 Saskatchewan farmland values increased 28.5%. That means my first farm purchased in 2012 for $150,000 is now worth more than $200,000! OMG!”

    I do agree his accounting methodology fails in not accounting for LOC and gains are only real once property is sold or mortgaged though. He has; however, gone from an investment portfolio that creates 1% of his required income for retirement in 2009 to 40% in 2015.

    For a guy in his late 20s making $25/hour and living in Vancouver this is pretty good six-year progress.

    http://www.freedomthirtyfiveblog.com/about-me

  39. Those stats are from last year ? I wonder what they are this year which is 9 months old. A front line credit person states they are seeing an increase in credit proposals and I am overblowing ?
    Sorry but I post articles showing changes in stats not year old data. Poo poo it all you want but every market correction has canaries in the coal mines and bankruptcy/credit problem increases are very important to know( just as in 2007) when you are putting your financial future on the line.

  40. I’m not into investing into real estate but if there was a 30% correction then I’d change my mind quickly.

    Not going to happen here any more in the foreseeable future. In 2008 the potential was there but not now

  41. Might be bad for my industry but for my business a few decimal percentage points in terms of market share is more important than a huge swing in sales. I was doing just fine in 2013 with 40% less sales in the market.

    A 30% correction would bring a 550k Oakland’s area bungalow with a mortgage helper down to $385,000. The suite alone would carry close to $250,000 on a monthly cash flow basis. Can’t really see that happening, but if it did happen I would definitely buy a few homes in the core.

  42. Running out of time ? Now that is a salesman line. LOL. Canada is heading into a recession incase you missed it.
    Market was saved last time by Harper and CMHC and won’t have that luxury next time.

    BTW I have never predicted doomsday, just a serious correction back to historical means. The Bank of Canada,IMF and everyone else on outside says the market is overvalued by 30% so I’m not wrong but I may be bad for your business as the lone bear on here. I know many homeowners who feel the same and know all is not well with the economy.

  43. I don’t see any concern on the debt front. Our 2015 levels are nowhere near as high as other advanced countries…Norway, Denmark, Australia… which seem to be doing just fine.

  44. His goal is to retire at 35, he is not there. He bought a farm which is cash flow negative even at our very low interest rates and not accounting for any vacancies or other contingencies. He’s only gambling on appreciation in both his condo and his farm purchases because they make no sense without that. He also gambles on appreciation in the markets, making bets on margin. All that works great in a rising market which is all he has ever seen since he’s only been at it since 2009.
    Let’s check back after a couple years of bear market.

  45. Well, he is doing something right to be able to retire at 35 and if you read to the bottom farm prices did, in fact, skyrocket and it turned out to be a very profitable investment unless I am missing something.

  46. You don’t have to guess. The stats on consumer proposals are publicly available and a google away. Check the superintendent of bankruptcy site.

    There were about 5500 consumer proposals in BC last year. There are 4.4 million people and 11% are under 19. This means that 5500/3916000 or .14% of the population filed consumer proposals.

    I would say that the issue is completely overblown in these articles and by you. People are paying less in interest now than they were before rates dropped.

    Right now we have historic low interest rates and if people are getting into trouble it is probably divorce or health related mishaps plus lack of planning or truly terrible money management and misuse of consumer credit.

    This could change in future quickly if rates rise or house prices drop. Neither of these things have occurred at present so I am not particularly concerned about a large cohort of people filing bankruptcy and consumer proposals. The stats demonstrate this is simply not the case.

  47. You need not worry about me in terms of livelihood; I happen to work in real estate because I like it, but I do have skills in other fields.

    There is always a risk to everything; however, given that real estate prices are just a notch above 2007 I just don’t see this massive crash coming eight years later factoring in inflation, lower interest rates, more homes with suites, higher suite rents to offset mortgages, etc.

    The market should have crashed big time in 2007/2008, other than a small blip, it didn’t.

    I bought my first property six years ago when Garth Turner and HHV bears were calling for 1/ a crash in the market, 2/ higher interest rates 3/ lower rents and the exact opposite has happened. My first property is worth more than six years ago, I went from a 2.3% to a 2.0% mortgage, and the rents have increased creating for a very favorable increase in cash flow.

    Six years isn’t an insignificant amount of time. That is 1/8th of my remaining life expectancy and probably 1/5th of my remaining life expectancy where I can enjoy travelling, eating a solid stake, etc., as I probably won’t be doing that if I am alive at 80.

    You eventually run out of time predicting doom and gloom.

  48. “This debt discussion is getting to be little long in the tooth. My real world life experience is people on average are horrible with finances and exercise little to zero common sense.”

    Which is exactly why it’s being discussed. Debt levels are in the same range as when the US housing market crashed. One would think since your livelihood depends on it you would want to be aware of the dangers of a downside to the market. Debt levels is what is keeping you in business, for now.

  49. If real estate agents were paid up front by the seller things would change quickly. I would think It would be near impossible to get a cheque from the home owner for $23,000 to pay for an agent’s services before the house was sold.

    In that hypothetical world of paying up front, the real estate industry would be reduced. No more fancy offices, no more slick cars, no more suits and big hair and no more full page adds in newspapers.

    https://youtu.be/k5DbZK2W7zw

  50. It’s a specialty appraising cell phone tower locations and power transmission lines. A lot has been written about the effect on property values but the effect on value varies considerably from site to site.

    Private property will have a lease associated with that tower along with an easement and licence giving access to the site for maintenance of the tower. The home owner is thereby compensated for the partial loss of some of their bundle of rights which define property ownership. In this case diminished use and enjoyment.

    I’ll give you an example of a property I was appraising in Delta. The properties were improved with modest homes and at the back of the site traversed a high power transmission line. When in the backyard you could hear this line crackle and hum. The home owner joked that he never let his dog outside wet.

    The sites however were one-third deeper than other house lots. The norm was 120 feet deep and these sites were 200 feet deep. When I looked at residual values in the hood the value of the normal and the impaired sites were similar. Buyers felt the extra land was fair compensation for the potential physical effect for having a high power transmission line in their backyard. So how much was that land at the back of the yard worth? Since the land was surplus to the needs of the home owner, it would be less than the price per square foot rate of the overall site. But how much less?

    In the end it was determined to be a percentage of the value of an unimpaired site. This percentage would then provide a base for the electrical company to compensate home owners where the transmission line crossed properties that were not as deep. A one time compensation paid to the owner. Subsequent owners are not compensated neither are the neighbors.

    Every site and circumstance is different. The key is that the home owner has to suffer some form of loss in their bundle of rights that is significant enough to be measured. Such as use and enjoyment of their property.

    Another example is of a home owner that wanted the strata council in Victoria complex to stop another owner that lived in the complex for the last ten years from smoking in her condominium. The argument was that her smoking within the suite was affecting the value of the condos in the complex? The person making the complaint lived on a different floor and would come down to this person’s suite and stand outside her door smelling the air. While there is documented proof of the dangers of second hand smoke, I don’t think you could show a loss in value for the complex.

    Ironically, the numerous complaints filed in court against the strata council and smoker by this litigious person were discouraging prospective purchasers from buying in this complex and that was causing a loss in value.

    How about community mail boxes that the government may want to install in front of your home?. They impair your property and you should be adequately compensated for them.

  51. This debt discussion is getting to be little long in the tooth. My real world life experience is people on average are horrible with finances and exercise little to zero common sense.

    Just look at everyone paying $23,000+tax to sell the average single family home in Victoria. In this day and age is there any common sense to that? Absolutely not, but it is 98% of the market. If people are willing to spend a massive amount of their home equity on commission it does not surprise me at all that the average person is carrying high levels of debt.

  52. “No one is predicting $20 oil… Goldman is predicting $45 oil. You just swallow the headline that sells because it fits into your doomsday vision….”

    You need to learn how to read. I posted what Goldman said as a “possibility” not locked in stone. Maybe you should complain to to Goldman, not to me. As a student of the markets you should know as I that when things don’t look to get any worse, they can. I have seen several friends and acquaintances over the years go bankrupt due to putting the blinders on too tight.

    Maybe oil will rebound, who knows ? If it does then I will be ready to buy back in but right now it doesn’t look that way without major amount of OPEC tap turning which is not showing up as you predict.

    $45 oil still could sink many Canadian oil companies who are on the ropes. Look at the new layoffs, and how many people live in BC,Victoria or transplanted from here that have been effected ? I know of several just in my circle.

    http://www.cbc.ca/news/canada/calgary/phx-energy-layoffs-the-latest-to-hit-alberta-s-oil-industry-1.3225115

  53. Some more reality checks that people are struggling out there to make these debt payments. You just don’t see it because who wants their friends and family to know they are maxed out?
    Are these consumer proposals numbers on the public record like bankruptcies ? I’m thinking not.

    “Here in the Lower Mainland specifically, more individuals are becoming concerned about their finances as a result of owing so much more, said Lana Gilbertson, personal bankruptcy trustee at MNP Debt.

    Gilbertson said she is seeing an increase in the number of families and individuals looking to file consumer proposals. These proposals are administered by bankruptcy trustees but are not full bankruptcies; they involve offering to pay creditors a percentage of what is owed or extending the time it takes to pay debt.”

    “[These families] are working, so they haven’t seen job losses or other life events that would cause an interruption in income, but they’ve been carrying high levels of unsecured debt for so long and they simply can’t do it anymore,” she said.

    “I see people’s day-to-day living expenses all the time, and what I’m seeing is households that can afford to pay their rent and food and other basic living costs, but there isn’t a lot of room in the budget so credit is looked to for consumer goods or when there’s an emergency people.”

    https://www.biv.com/article/2015/9/canadian-household-debt-ratio-hits-highest-level-r/

  54. Not sure how you missed Michael’s multiple posts on his predictions Victoria prices are doubling soon and we’re at the beginning of a huge commodity boom.

    I posted the chart to show where the Canadian economy is at, which is the beginning of a recession which will take years to play out. People loading up on Victoria real estate are the Johnny-come-lately’s which is very common when just ending a late expansion era.

    The speculators group of buyers think Victoria is some undiscovered gem which is ridiculous as the city has grown huge the last 20 years. An extra 150 or so buyers a month higher than normal, out of a population of 300,000 plus chasing fewer properties listing is not a boom to me, it’s a fad. If those sales numbers drops off then watch the sellers show up.

    Only point I was making is the recession is just starting, not a boom, and everyone else in the world can see it but not most of those with too much skin in the game or a financial employment interest.

  55. On a different topic, there’s a story about a quaint village in Canada, which has suddenly and without due process had an unsightly cell phone tower installed right in the middle of it. A lot of the residents are upset about it. They do not want it and are trying to get it removed. They were not properly informed and it was basically put through as an alternative to the old fire station alarm without informing the citizens that it was, in fact, going to be a cell phone tower with a small fire alarm attached to it – makes you wonder why they were so sneaky about it. The main concerns of this group are the potential health hazards of living near a tower, the question of lowering of property values, as well as the process.

    I found a map of the cell phone tower locations in Canada and there are a lot of them! In today’s world, there are thousands of these towers going up and I wonder if buyers take into account whether or not they are buying a house close to a cell phone tower. There is a house in the Cadboro Bay area which has just come onto the market. When you check the cell phone tower map, it shows one right in front of it. In fact, if you look at the map, there are a lot marked around Arbutus Road and Brentwood Bay. Not sure why, and I don’t know if these are actual towers or something else. Does anybody know? I have gone on Street View and you can see some of the ones marked up on the top of high rise buildings (one example I looked up was the Chateau Victoria Hotel and you can see it clearly on the top), so the map appears accurate. Are they installing them without informing residents? The one they installed in this village is so obvious you couldn’t miss it, but what about the ones that aren’t that obvious to the general public?

    There are more studies being done on the effects of living near a cell phone tower, some of which are now saying they are harmful, and others that say they are not. Like tobacco and asbestos, the studies may take a long time to be more conclusive, so what do we do? They are going up at quite a rate and even if there isn’t one near you now, that doesn’t mean that one won’t turn up at some point. Are all these cell phone tower locations chosen with the blessing of the residents living in that area?

    What about property values? Does this impact them negatively? Maybe Just Jack has more insight into that. To be honest, I wonder if today’s buyers even have this on their radar, and should they be informed if the seller is aware of a tower nearby? I can’t imagine real estate boards adding this to their Property Disclosure Statement.

    I think if I was a buyer today, I would look more closely at the street I was buying into and would check the map first, and investigate further if I needed to. For me, there are no absolute facts about these being harmful, but my feeling is that I would rather not take the risk of living too close to one.

    http://www.ertyu.org/steven_nikkel/cancellsites.html

  56. “LYB also looks like it could head down to $70 like it did in December.” says you… The median estimate from “the big guys” is a price target of $105. They are less an oil play and more of an oil refining play as they make plastics and chemicals…. They benefit from low oil prices. Like I said have you seen product or gas prices going down much?

  57. Not really if you are referring to the stat of debt increasing faster than income. That stat is misleading and alarmist if assets are rising faster in dollar value per year than debt and debt servicing payments are actually declining even if the percent of debt is rising faster than income as a percent..Not sure what your chart has to do with that. And who said house prices are going to double in Victoria anytime soon?

  58. Red herring stat. Do the math. The increase is due to low mortgage rates and higher borrowing for homes. People are actually paying less to service debt and assets are rising faster than debt. The income to debt stat is not a straight line comparison.

  59. Meh – kind of a red herring stat given that interest rates are low and the increase is spurred by mortgage debt and interest payments have actually been decreasing and assets have been outpacing debt:

    “However, he said interest payments as a share of disposable income hit a record low at 6.37 per cent in the quarter.

    TD Bank economist Jonathan Bendiner noted that growth in mortgages has been the main factor in increasing household debt.”

    http://www.metronews.ca/news/canada/2015/09/11/household-debt-ratio-grew-in-q2-as-debt-increased-faster-than-income.html

    It is annoying that the whole picture is not laid out clearly in these articles. If assets are rising 1.3% as a percentage of net worth while debt is rising at 1.8% percent and households have far less of a dollar increase of debt than dollar increase of assets so most are in stronger net worth position.

  60. ” incomes rose by 0.8 per cent, so too did Canadians’ debt levels, which increased by 1.8 per cent.”

    Wages went up less than half of debt load. Yep, that’s scary alright. At least the homebuilder is honest where the banks lie their faces off to keep the sheep borrowing at the top.

  61. Not sure where you get this “futures touching $20 for a brief second” from. GS said the potential is there for it to go to that range if oversupply and demand keeps dropping. Call it a headline all you want but one of the biggest brokerages in the world thinks the possibility exists barring OPEC or others to shut off the taps. They didn’t and I didn’t say it was for “decades”. Could be a week or a year ,who knows, just posting what the big boys are predicting.

    Saying oil is going to $80 because of the Saudi’s is nonsensical as they would have done it a long time ago if that was the case. LYB also looks like it could head down to $70 like it did in December. Insiders selling last while too. Still too early to buy oil.

    Michael, in 87 I was riding the profit wave because interest rates were dropping from record highs but still very expensive to own. It wasn’t like free money was dropping out of the sky. You had to have a real job for several years track record and zero debt and perfect credit, no exceptions. HELOC’s and credit cards requests in the mail every day didn’t exist so there is zero comparison to family economics back then to today’s ticking debt bomb.

    Did you not see the news today ? Highest debt levels on record in a country in a recession. The banks love to promote this “wealth” effect but it’s all paper profits until you sell which most won’t, instead they will borrow more against it. When the negative equity train comes it will be devastating.

    Debt-to-income ratio ticks up to 164.6%, StatsCan reports

    “The amount Canadians owe compared to their ability to pay it off rose to yet another record high last quarter, the national statistics agency says.

    Canada’s debt-to-income ratio rose to 164.6 per cent at the end of June, from 163 per cent at the end of March, Statistics Canada reported Friday. It marks the biggest jump in the ratio since 2011, and it’s now at its highest level on record.

    That means that Canadians owe just under $1.65 for every dollar of their disposable income.

    Most of that new borrowing came in the form of mortgages.”

    Tick, tick, tick……

    http://www.cbc.ca/news/business/debt-income-net-worth-1.3223917

  62. Keep in mind with oil Hawk, that the similar supply-led crash of ‘86 resulted in Vic house prices going up 160% by ‘94. There are also many other parallels ‘87 to now… currency, demographics, in-migration……. not that it necessarily means a similar outcome.

  63. It’s not the same. Calling for $20 and seeing the potential for futures to touch that price for a brief second is a big difference. I don’t have rose coloured glass. I watch this play out daily. I can just see through the BS of pulling out a tidbit like that as a headline. The OPEC crew are burning through their cash reserves with this price war. They can’t do it for much longer. Long enough to actually remove some of the competition however they need about $80 to balance their budgets so this won’t last for decades…. Less tar sands mining and shale oil fracking is good for the planet anyway. Plus someone benefits from buying and storing all this cheap oil and it’s not us as gas consumers obviously. This is why I put some cash into a refiner of oil at the end of Aug…LYB.

  64. Doom colored glasses ? LOL. Oil is at $45 from a $100. If you can’t see that as doom with major oil companies in dire straits then your rose colored glasses are on mighty tight. Those are devastating prices already.

    Goldman sees the potential of $20 oil based on oversupply caused by less demand from declining growth. It’s all in the same Dasmo.

    “While not our base case,the potential for oil prices to fall to such levels ,which we estimate near $20 a barrel, is becoming greater as storage continues to fill”.

  65. Gotta take those doom coloured glasses off…. “Goldman is not projecting a drop to $20 — a worst-case scenario, it would be fleeting if it’s reached. Goldman’s official projection for 2016 WTI prices is $45, down from a previous forecast of $57. Goldman’s 2017 forecast stayed at $60”

  66. Exactly, oversupply not collapsing demand… At a certain point it’s not worth pumping it anymore… Demand will still be there and shift fast as there isn’t that much storage to sustain too long….

  67. Yes, that makes a good point.

    People vary widely despite having the same culture, ethnicity, religious affiliation or country of origin.

    I’m sure there are others who share your views but Jewish groups have been very active worldwide in helping the Syrian refugees – motivated by an understanding of what it means to be a refugee and having to flee your home – losing everything.

    “Paul Anticoni, executive director of World Jewish Relief, told the Post. “We have an empathy of looking after the stranger, and I think there is a desire to assist, irrespective of the nationality of the individual.”

    http://www.jpost.com/Diaspora/The-refugee-crisis-A-Jewish-sense-of-responsibility-415738

  68. Actually it’s ironic you mention jews since I am one and Syrians aren’t particularly friendly to my kind.

  69. You might want to note Goldman Sachs call out this morning for $20 oil. It’s going to get very ugly.

    “In fact,the oil market is even more oversupplied than we expected”.

  70. “collapse of demand on a global scale” come on…. It’s a slowing of GROWTH” going on. It’s the futures markets that are causing the collapse in commodity prices. The planet is still guzzling back oil at an alarming pace so unless you believe in abiotic oil then you know this won’t last that long…

  71. Copper and oil in a bull market ? Get real, they just crashed over the last year or so. Bull markets don’t suddenly start on thin air. Oil glut is everywhere and copper mines are closing down due to the China syndrome and collapse of demand on a global scale. Living in fantasy is not healthy Michael.

    When the country’s leading homebuilder is scared, then you should be too.

    ‘Scary’ rate environment fuelling housing boom, homebuilder warns

    “And that’s a little bit scary, because when you think about where interest rates are likely to go, we could suffer some real pressures as people struggle to afford these houses [when] interest rates rise.”

    http://www.huffingtonpost.ca/2015/08/15/mattamy-homes-brad-carr-mortgage-rates_n_7990228.html

  72. Perhaps this is just a shift of assets from the “markets” to “real estate”. Oh the stock market is not doing well or too risky, just cash out and buy some RE.

    From our limited perspective in our neighbourhood, that is the case. 50s and 60s age group long time residents are either replacing their old homes with new ones or just buying new homes within the same neighbourhood. They did well in the markets over a 5-7 year span and they care cashing it out and putting it into their homes.

  73. What you meant to say is…
    “Victoria building starts and prices emerging from their bottom just as commodity markets like copper, oil and Vic RE begin a move into a new bull market just like 1987 for instance. History repeats itself once again.”

  74. As per the TC article:

    “The Victoria Residential Builders organization said the number of single-family starts is the highest since the time before the housing decline that followed the 2008 recession. ”

    Interesting timing, Victoria housing starts and prices peaking just as the stock market begins a move into a bear market just like 2008. History repeats itself once again as the 7 year cycle comes to an end.

  75. If you aren’t into the issue and dislike Syrian culture that is totally fine – not everyone’s cup of tea.

    Refugees are sponsored by a group of Canadians responsible for them for a year – the group provides full financial and cultural integration support.

    Canada has a long history of assisting refugees in times of extreme crisis, except the Jews in WWII. When asked how many Jews would be accepted a Canadian border official stated, “none is too many” – probably based on cultural stereotypes I’d guess…

    https://en.wikipedia.org/wiki/None_Is_Too_Many

  76. Plus you have the huge insurance policy of moving into the suite and renting out the upstairs. I figure our upper rent would cover the mortgage, insurance, and property taxes.

    Kind of important when you are self-employeed.

  77. It would be a good idea to read up on Syrian culture prior to inviting them into your home. No way I’d go there.

  78. Back in 1992, my girlfriend and I were the first tenants in a newly-installed basement suite in a house that we eventually purchased. The owner added the suite to their rental house knowing that the combined monthly rental of main + suite would be more than just for the house on its’ own. It cost about $3000 to install a separation wall, move a few light fixtures, wire in a stove and add a shower to the downstairs bathroom. Over the next 7 years, I paid close to $40,000 to rent the suite before we moved upstairs to rent the main part of the house.

    Three years later we bought the house and a few months later we asked the tenant in the suite to move out so that a family member could move in. After 10 years, the family member moved out and we have “reclaimed” the suite by removing a separation wall – adding 750 sq. ft. of living space for my family to enjoy. Reinstating the suite would only require the re-addition of a 6-foot wall, so probably just $400.

    I expect that at some point in the future I’ll be selling my house … I’m sure that the easy re-addition of the suite will add to the resale value.

  79. I’m wondering if it’s because as the leader of the NDP, the government might also pay his mortgage so that he can retain a home in his riding. Would be silly not to max out on the mortgage and pocket the equity as cash.

    But you should confirm this with Mike Duffy.

  80. Saying that a house with a suite is worth more than a similar home with finished basement is reasonable. Having a set of cabinets in a basement wouldn’t detract from the price.

    But how much more is a home with a suite worth compared to a home with a finished basement that has a family room with a wet bar?

    Of course if you already own the home, the cost to install some home depot cabinets in a family room is marginal.

    In contrast if you’re trying TO BUY a home the difference may be significant as the income from the suite is added to your personal income. Therefore you and and everyone else looking at buying that property qualifies for more money. Unlike the home with the wet bar in the family room. Or neighborhoods such as Broadmead that has covenants on the Property Title against suites.

    There is a greater pool of prospective purchasers that need homes with suites than homes with finished basements. Stronger demand and low supply results in rising prices. And homes with suites have risen faster in value than homes without suites. It’s simply a matter of need being in excess of want.

    You can see that in the data as sales activity for starter homes under $500,000 or homes without suites has declined from last year. But sales activity in homes in the $500,000 to $800,000 range has increased significantly in the city core. These days a significant portion of buyers need suites.

    I think most sales people would tell anyone building a home today, that they have to put a suite in their home since it’s better for re-sale purposes.

    .

  81. Housing starts is important because it is a leading indicator. Sustained declines in housing starts slow the economy and can push it into a recession. Likewise, increases in housing activity triggers economic growth.

  82. Agree.

    I look our multi-family as an insurance policy for our whole family.

    If when we retire something goes wrong, or one of us gets sick, or the kids need a place to land or are trying to save to buy a place in this expensive city, or my parents want to downsize and need more care, it is there.

    At this point the income is great, but even if we were fully retired I think I’d rather have the income and donate it to a good cause than not have the option at all. And we plan on staying in our house for as long as possible so we have the option of housing a caregiver or two separate from our living space in the future.

  83. Houses with suites are worth more…period. It gives the owner financial flexibility should he/she run into financial distress (which no one can plan for) and it is like a cheap insurance policy that pays out $10000 to $15000 per year should you cash it.

    Now whether you decide to use this policy is up to the user. But at least you have one.
    Like Marko, we are constructing a new home and we do have a suite, which we won’t rent out because we need the space for personal reasons, but if we don’t use it, at least we can rent it out!

    As a homeowner and with an unpredictable economy, having options and flexibility is not a bad thing.

  84. Mulclair is a career politician. NDP budgets at the provincial level have generally seen spending increase at 3%-4% more per year then the previous incumbent governments.

    Simply put, over a 4 year span, the budget will increase 12% to 16%. The number of public sector employees on the sunshine list- over $100K/yr (not including their guaranteed pensions + benefits) sky rockets.

    Though Liberals/Tories are perceived to done poorly over the last 30 years, a NDP government will set Canada back economically in my opinion by 12 years.

    1/ 4 years of their policies
    2/ 8 years to fix their policies

  85. On a different note, if you have a suite you don’t need to rent out perhaps you might consider offering it to a Syrian refugee family for a one-year period? Tax receipts can be provided for the rental value. The St. Matthias Anglican Church on Richmond are sponsorship agreement holders and you can sign up with them.

  86. Why does Oak Bay always come into this ? There are many more areas of Victoria that are nicer. Who says some of those 48% aren’t in Oak Bay mortgaged to the hilt ? You have no idea of knowing.

  87. Exactly Jack. If the government is taking a cut of the proceeds of crime and along with the real estate industry/banking system is keeping hidden all the numbers of Chinese who are buying through offshore means then is this not the biggest scam in Canadian history ? Our treasured banks allowing money laundering ? We are talking BILLIONS of dollars that has been siphoned into pumping the housing industry up while saying “we don’t keep track of HAM or money launderers. Utter bullshit.

    I can’t wait for more investigative journalists to dig deeper into this cover up which has far reaching places all the way up to the upper echelon of Harper’s paranoid “fear the terrorist” bullshit shtick. He wants the bad guys out while letting them in the back door as long as they have tons of money he can eventually get a cut from. AKA corruption.

  88. I think if you feel “overwhelmed by debt” you probably have too much, whatever the reason. If it stresses you on a daily basis you are probably outside your comfort level & should have less. “Overwhelmed” is very different from “comfortably leveraged” to me.

    I also think that most of the improvement in that “overwhelmed” score this time around is perhaps related to the decrease in interest rates, maybe government pressure with an election coming up and perhaps other psychological & market factors (lower gas prices perhaps), not an increase in income or relative decrease in debt burden (since neither of these things have happened over the last 12 months). I don’t have the survey in front of me but with a result like that, there is also a good chance that the question was also worded differently to yield a favorable result.

    Also, people win the lottery too. It doesn’t mean that buying a ticket is a good idea.

  89. Maybe Tom Mulcair has been withdrawing equity from his home to fund his investment portfolio?! 😉

    On the subject of indebtedness – Donald Trump has declared bankruptcy 4 times … Nobody would accuse him of leaning left!

  90. The quote you took Trevor was from last year’s (2014) survey, not this year. Anyway, it looks like the “overwhelmed” improved alot if David’s 16% (2015) is accurate (his link is not working for me).

    The “paycheque trouble” went down too from last year… 51% in 2014 to a slightly better 48% this year.

  91. Sometimes going into debt makes sense… Or you could save all your life to try to buy a house with cash and never make it since you are chasing a moving target… I remember my pal going into lots of credit card debt in his 20’s just saying he was going to make more money later anyway… turns out he was right… Who are we to judge? Live your life the way you think best. People who go into debt are not the ones feeling entitled. They have, and have to carry the burden of having. Where is the entitlement? It’s it irritating twits that hold up signs saying “I have a million dollars and can’t buy a home” that are the ones that must feel entitled…

  92. I don’t think many of them will be willing to return to China to object to the seizure.

    Yup … Canadian law will be much more forgiving of the money laundering than Chinese law – so the perpetrators will just go along with the seizure.

  93. “Well over one-third of employees (39%) say they feel overwhelmed by their level of debt (up from an average of 32% over the past two years)”

    I’m not sure you read that right but I’ll let you correct before I jump to conclusions.

    On another note:

    “The number one step that employees believe they can take to improve their financial situation is to earn more (27%), while spending less dropped to second place from last year and decreasing debt remained flat.”

    This is actually equal parts entertaining & depressing.

    Saying that the solution to the financial woes of individuals is to earn more or to spend less is like saying that the solution to an alcoholics problems are to simply drink less. The financial repercussions are most often a consequence of other things, the largest one being a perception of unjustified entitlement.

    The necessary change here is one of perception – if a person requires debt to fund a lifestyle, they simply do not deserve everything they think they do. Changing this perception is far more complex than simply “earning more” or “spending less”.

  94. On September 1st, Canada signed an agreement with China to split the value of the assets seized from money laundering. I believe Canada gets 20% and China will get 80% of the proceeds. BC gets nothing.

    Those accused of money laundering can have their day in court – a Chinese Court.

    All that was missing about acting on money launderers was how to split the proceeds. Now that that is settled I would expect banks accounts, houses, cars, jewelry and art to be seized.

    This could mean billions to Canada as the long arm of the Chinese government reaches out to suspected money launderers. I don’t think many of them will be willing to return to China to object to the seizure.

  95. CBC News: Burdened by debt and slipping behind, survey respondents say

    • Survey by the Canadian Payroll Association of 3,605 working Canadians who completed a poll between June 29 and Aug. 7
    • 48% said they might be in trouble if a single paycheque was delayed.
    • 24 per cent thought they could come up with $2,000 to cover an emergency, such as critical home or car repairs.
    • 16 per cent of respondents agreed or strongly agreed they were overwhelmed with debt.
    • The average debt balance for a Canadian consumer, excluding mortgages, was $21,028 in the second quarter of 2015.
  96. No big surprise as any change to the overnight interest rate would be highly political during our current federal election …

    CBC News: Bank of Canada keeps benchmark rate at 0.5%
    Economists had been expecting the bank to keep its trend-setting target for the overnight rate where it is now. A few believe, however, that another cut might be possible later in the year unless the economic picture improves

  97. I’ve had a number of clients 2011 to 2014 from Vancouver planning on retiring to Victoria eventually because of children/grandchildren buy houses with suites and they use the suite when they come here and they rent out the main. Had a few pick up great deals (in hindsight) in Fairfield in 2013. I thought they were taking a bit of risk taking on a mortgage so close to retirement but with what the market in Vancouver has done in the last two now makes total sense.

  98. Off topic but very worthy to note that the banks are now admitted facilitators of Chinese money laundering with no background checks on where the money is coming from. So much for honest Canadian banks that are so conservative in their lending practices.

    I wonder how much else they helped mortgage due to high equity levels ? “Bending rules” is the new catch phrase for “breaking the law”. What a fricking sham !

    Canada banks bend rules to move money out of China and into Vancouver real estate

    http://www.bnn.ca/News/2015/9/8/Canadian-banks-helping-clients-bend-rules-to-move-money-out-of-China.aspx

  99. Can you add – you have a suite but rent out the main living area.
    That’s me tight now. My suite is my crash/storage pad for when I return to Victoria….
    Suites will become more and more prevalent. Most will build new homes with a suite in the core…

  100. As I was showing homes all day Sunday and Labour Day Monday all I could think of is hmmm…haven’t heard from any of my three rental property tenants in over 3 months. Not even an email….but I’ve cashed 9 post-dated cheques in that time 🙂

    In terms of my personal residence, a 100% no-brainer having a suite. We have two upper floors to ourselves and the tenants have a super nice walk-out basement we would never use anyway as we have a huge media space above our garage. We get great rent as they have alarm system, internet,TV, etc., included and it doesn’t cost as anything as we would need those things anyway even if we didn’t have tenants.

    Would it be better not to have tenants, of course it would, but am I going to pass on essentially passive income from my suite of over $15,000/year? Hmmm, no.

    With a new home it is give or take passive. An old dumpy suite with failing drain tiles might not be as passive if your basement floods in the middle of January and the tenant is displaced.

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