Where’s the inventory?

Spring is off to an early start in Victoria, both in terms of the weather (it’s glorious when the sun in shining after work) and in terms of market activity.   This is when inventory traditionally starts piling on to the market, but so far this year we haven’t even added 200 new properties to the inventory since the low point on January 11.  Last year it was over 400 in the same period.

chart

It’s not that new listings are lagging very much, they are almost bang on the pace of last year, but things are selling so quickly we just aren’t accumulating any significant inventory.   So far the theory that a hot market will persuade owners to sell in larger numbers hasn’t panned out.

chart (1)

Stats update courtesy of the VREB via Marko Juras.

February 2016
Feb
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 165 317 523
542
New Listings 307 579 860
1108
Active Listings 2472  2550 2575
3480
Sales to New Listings
54%
55% 61%
49%
Sales Projection 660 760  715
Months of Inventory

6.4

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235 thoughts on “Where’s the inventory?

  1. I’ve been following the discussions on the lack of inventory and the associated pressure on prices in Victoria. Would like to buy in Oak Bay but it seems out of reach now. Does anyone know the sale prices for 531 Oliver and for 879 St Patrick? Seems like they sold almost as soon as they were listed.

  2. Just Jack, nice pick n choose going on with your numbers.

    You are really saying prices are not changed since 2008, other then a couple “over paid” houses in Oak Bay?

    Is this your “Victoria is overvalued above market value” theme again?

    Here is the thing, if you want to live in exceptional areas, you are competing with exceptional people, and exceptional people get wealthier and wealthier each and every day… So next year oak bay will be more, and more, and more.

    Also JJ, you keep saying the market is “insane” but then a post later say prices haven’t moved in a decade.

  3. Bman … as for Mt Doug… My daughter was in private school but wanted to go to Mt Doug… I told her to prove her case.. which she did… I relented.. she went to Mt Doug..then Uvic.. then to London England and a Masters degree.. as well as worked for the top Law firm in the world.. now on the exec level of a communications firm… (glad I trusted her analysis and presentation on why Mt. Doug…) FWIW…

  4. Here you go Michael.

    The median detached home price in the core was $655,500 last month and $597,500 a year ago in 2015. Most of the increase in the median is due to some very high prices paid in Oak Bay. If you exclude Oak Bay then the median price has remained relatively unchanged for the last three months.

    Median
    Month 2013 2014 2015 2016
    Jan $540,000 $576,250 $542,500 $655,500
    Feb $590,000 $579,000 $597,500 $681,500
    Mar $574,750 $568,950 $625,000
    Apr $610,000 $599,450 $631,200
    May $551,250 $609,450 $620,250
    Jun $585,000 $583,000 $629,450
    Jul $570,000 $576,000 $610,000
    Aug $556,100 $595,000 $659,500
    Sep $575,000 $585,000 $640,000
    Oct $579,500 $570,000 $677,250
    Nov $555,500 $569,000 $620,550
    Dec $571,750 $561,250 $672,500

    But let’s look at how the separate districts performed

    District Percentage Change
    Oak Bay 28.8 %
    Saanich East 13.5 %
    Victoria 13.0 %
    Esquimalt 9.8 %
    Saanich West 6.8 %
    View Royal 0.9 %

    Higher prices are having an adverse effect on local purchasers as we have the fewest sales centered around the primary mode in the last decade. It’s the middle income household that is taking the hardest hit in affordability. The last time that we came close to this low of a primary mode was in 2013 before prices began to decline in May of that year.

    Will history repeat itself???????

  5. It’s about the quality of people. And if you want to raise a family, Gordon Head has a reputation for great schools and great family environment. There was some stat somewhere I read that said something like the majority of kids that grew up in Gordon Head end up buying a house there to raise their kids. That speaks volumes.

  6. What is the appeal of Gordon Head exactly? I keep hearing things about Mt. Doug being a good school, and of course the proximity to UVic means if you’re buying a house as a rental property, you’re pretty much guaranteed to keep it rented…at least during the fall and spring semester.

    I attended an open house at Mt. Doug with my step daughter because she was considering going there. We both agreed it was kind of shabby, and she’s not interested in Football or Cheerleading. The reputation for academics seems to stem from the Fraser Institute rankings, which as already discussed probably says more about demographics than anything.

    When I look at the neighbourhood, it’s got a Richmond in the 70s vibe…flat, older box homes with 6 bedrooms. Also, there isn’t really any “centre,” and, strangely enough, poor transit service to UVic. Seems like you’d be driving everywhere.

  7. Gordon Head – Cadboro area is fastest appreciating area in the core. I think the affordability in those areas passed after Jan 2015.

  8. I always seemed to think that Cadboro Bay and surrounding areas were slightly better value than Oak Bay – prices are about the same but it seemed you could usually get a little bigger house and a bigger property for the same price? Is that still the case or has that ship sailed?

    Now as far as Cordova Bay and Broadmead are concerned – it seems clearly you can get a bigger, newer place for less dollars than a smaller place in Oak Bay, Fairfield, Cadboro Bay and maybe now Gordon Head? Are those northern Saanich East areas still considered “core” in Victoria? Too suburban to be the best investment?

    Is the talk about the “core” anything not including the Western Communities?

    Thoughts welcomed.

  9. Wow the over-asking prices for this week are unreal! Maybe we will get 25% gains this year.

    Regularly seeing houses that sold for 620k selling for 900-1m w minimal updates.

  10. “the happiest renter” seems to have every other comment lately.
    Hawk my buddy, I’m worried about your health…you might want to take a breath and eat once in a while.

    Introvert, you got it wrong. I’m the happiest renter

  11. If I’m reading the vreb stats correctly, SFH inventory is up just slightly month to month. Meanwhile condo inventory actually dropped a little from last month. That can’t be normal for this time of year.

  12. Hi VictoriaVV. I did Google it. It must be very private indeed…unless of course you are referring to YYJ, which is owned by Transport Canada. As for the ferry, if you’re that rich, why not take Harbour Air and have your driver pick you up on the other side?

  13. I think Cordova Bay is a better bet for being ‘away from all that’ than Caddie Bay. It actually is closer to the airport, ferries, marinas, etc. I like Cordova Bay too, but don’t know if I could live with myself for succumbing to the ‘lure of the suburbs’. The final nail in the casket of youth…

  14. I guess I should do the standard thing and state that I read this blog often, but rarely post. Anyway, speaking of houses in Duncan, does anybody have any experience with real estate in the Cowichan Valley? Is anyone familiar with the market there? It’s a pretty area, especially around Cowichan Bay and Cobble Hill. It seems cheap, relative to Victoria, although I guess it’s not really a fair comparison.

  15. “If you are on the fences, get in while you can. ”

    The greatest fool statement of all time. Do you sell used cars by chance ?

    Meanwhile the sheep are now buying with ZERO conditions and the VREB is telling families to buy on the Westshore where it’s still sane as the core is on some other planet. Those poor folks in Metchosin lost $4000K last month.

    Unconditional offers are new normal in Vancouver real estate market

    http://www.theglobeandmail.com/news/british-columbia/unconditional-offers-are-new-normal-in-vancouver-real-estate-market/article28962021/

  16. Yes have to agree w Michael, core is going up 20%+ this year, we are already at 14%+ and it’s not even warm and beautiful out.

    If you are on the fences, get in while you can. Seriously, I’ve been saying this for years now, get in get in if you want to own a house in nice area here, cause if you don’t then you must be ok w a condo or house in Duncan.

    Why do people make fun of people that say get in while you can? History has proven this over and over!!! It ain’t gonna crash here period, we had our crash from 2008-2014.

    And yes uvic is near airport (20 min drive), rich people take the ferry (they travel a lot and can afford the $300 round trip), and yes there is private airport in Vic… The fact you don’t know says a lot. Google it.

  17. Looks like the Core is up 14.7% over last year.

    I’m guessing we’ll post a ~20% sometime this year. Anyone notice how much the markets/loonie are up lately? That truly was a once in lifetime buying opportunity in mid-Jan.

  18. Did somebody say that Cadboro Bay is close to the ferry and a private airport? I’m sorry, could someone point me in the direction of said private airport…and the ferry for that matter? Also, since when do “rich” people like ferries?

  19. This pearl of wisdom was told to be by the dispatcher of the Victoria Police department.

    “Never buy a home within a mile of a secondary school”

  20. No, I think that that is what I can smell. I don’t know for sure about anything else because I have not observed it but I have seen people who fit the health condition and unkempt appearance associated with harder drug use enter and leave this building. Maybe it is true, maybe I’m unfairly stereotyping and they are all ill. What is true is that the building is not maintained or managed well.

  21. “but there does appear to be a problem with drug use by tenants or visitors of 2013 Oak Bay Avenue and I have smelled this repeatedly. ”

    Oh my God !… do you think it’s people smoking pot ? It’s about to be legal soon so best you get used to the smell. Maybe it’s the new Oak Bay dispensary getting ready to open, there’s one on every block these days, even in the “rich” folk areas. 😉

    Mike you’ve made a lot of hot tips the last many months that became larger losers, sorry I lost track of your hot “<200K tip.”

  22. Using the following area map of Victoria, I agree that Oaklands, Fernwood, Jubilee are probably the best bets right now. Central Park will eventually come around, but it’s still a little too sketchy to invest.

    Hawk figures there are “Lots of condos” that are as I said “rentable <200k 2bd units around there”? There were months ago, but it looks like you missed the boat again as they’ve all since sold.

  23. There are no packs of drug addicts wandering the streets of OB I’ve observed walking them regularly – and I would notice. There are a couple of bottle collectors, a couple of irregular panhandlers in front of the liquor store, – but there does appear to be a problem with drug use by tenants or visitors of 2013 Oak Bay Avenue and I have smelled this repeatedly. I haven’t seen harder drugs used but they may be based on the haggard condition of some of the occupants/visitors. If you look at the OB crime map you will note there is no crime problem in Oak Bay and, in fact, you’ll wonder what a detachment does with its time here.

  24. In order to determine how one area compares to another you would have to calculate the residual land values of the properties in the different areas. That isn’t the same as researching vacant land sales for in-fill housing. You might also compare the value of properties with marginal homes. Houses that contribute very little to the value of a property as a whole.

    When you do that, then you’ll find that homes on a level standard size, mid-block lots along quiet residential streets provide the benchmark for comparison to other properties.

    Homes along arterial roads sell for less than the benchmark
    as do homes on corner lots, rocky or steep lots.

    homes on cul-de-sac lots sell for more than the benchmark.
    as do properties with views of the mountains, city and water

    Water views don’t all have the same contributing value either. A water view in Fairfield adds more value than a water view in Esquimalt because the underlying land value for the benchmark home is much higher in Fairfield than in Esquimalt. You can have two properties with nearly identical south west water views in Fairfield and in Esquimalt. But the contributing value of the water view is substantially different.

    As an example. The benchmark value for a lot in Esquimalt might be $400,000 and in Fairfield the benchmark may be $650,000. Then if an unobstructed south westerly water view contributes 50 percent (not saying that it is 50%) to the benchmark value, the contributing value of the water view in Esquimalt would be $200,000 and in Fairfield it would be $325,000. But if you had pictures of the different water views, they would look nearly the same to each other.

    When you are looking at your BC assessed value, that is simplistically what the different values for the land and improvements are showing you on a mass appraisal basis. The land component isn’t showing you what vacant lots are selling for in your neighborhood but what the contributory value of the land is to the value of the property as a whole. And for a lot of different reasons it is why the land component on your BC Assessment can be way off from what is happening in the market today.

  25. “I did mention last summer to buy any of the rentable <200k 2bd units around there as they were not only serious positive cash, but an obvious double.”

    Lots of condos in the $200K range in that general hood not selling for many months now. Guess they are not that hot or profitable as the pumpers “hope” them to be.

    Always has to be bagholders at the end of the boom and Victoria is the last to wake up as usual to any new trend. It’s a tradition in this town. Might as well be some “million dollar condo owners”, they can afford the hit.

  26. Yes, actually am agreeing with Hawk here. There is a ton of homeless/crackhead/methfiends moving into oak bay recently. So many that I’m starting to recognize the local pack of them. Oak bay is definitely way to close to downtown for me.

    Used to love oak bay before it got crowded, can’t find parking at all, what was red barn thinking.

    Cadboro bay is an amazing area, but prices are higher then oak bay and rising faster then anywhere. It’s far enough away from meth problems and is easy access to things rich people like (sailing, horse riding, private airport, ferry, etc)

  27. Long time HHV follower, first time poster. Oaklands is my hood and we targeted this area specifically so thought I should chime in. I was drawn to it for many of the reasons Marko listed, especially proximity to schools and work/downtown. It will never be coveted like Fairfield and Oak Bay (truly exceptional areas), but it ticks a lot of the boxes and has its own charm.

    East of Fernwood Ave and south of Ryan the stock of housing is actually decent and many of the smaller ones have been added to. Definitely haven’t seen drug use/crime and I think Totoro’s link to the crime map supports this. A couple of the nearby houses that I was worried about turned out to be nice old widows who’ve lived there since the beginning of time and just can’t do the upkeep anymore.

    Definitely room for the area to gentrify further, time will tell if it happens. Now, if Red Barn ever takes over the Adam’s Food Fair spot then all bets are off 😉

  28. Cadboro Bay is really nice. Lots of university students in the village. Gyro park and the beach are great but I’m not sure if that translates into noise issues at night and too much traffic on the weekeds – never lived there. Frank Hobbs is a good elementary school but can be far for middle and high school. Area is prone to flooding near the beach. House prices in Cadboro Bay seem similar to OB to me but I don’t follow that area closely. Marko or someone else would have a better idea.

  29. Re: the Red Barn strip… it’s definitely transitioning to a rich hood. Abstract wouldn’t be building more ~1000ft million dollar condos along there if it weren’t. I believe their latest is at the corner of Richmond. I did mention last summer to buy any of the rentable <200k 2bd units around there as they were not only serious positive cash, but an obvious double.

  30. I was using it in the normal dictionary definition way JJ.. take it up with them folks.

    the·o·ry
    /ˈTHēərē/

    noun
    noun: theory; plural noun: theories

    a supposition or a system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.
    “Darwin’s theory of evolution”

    synonyms: hypothesis, thesis, conjecture, supposition, speculation, postulation, postulate, proposition, premise, surmise, assumption, presupposition; More
    opinion, view, belief, contention

  31. A theory is an analysis of a set of facts that is tested. What you have is an opinion not necessarily based on fact or knowledge. It would be ridiculous to argue against an opinion as it is yours alone. But not all opinions are correct when they don’t fit the facts in the real world. Then it isn’t a matter of opinion, it’s a matter of fact.

  32. This is what happens when the HAM leaves town. Look out below.

    London Bubble Trouble – Visas Issued To Wealthy Foreigners Plunge 84%

    “London’s luxury property bubble seems to have popped sometime during the second half of last year, something I’ve written about repeatedly over the past several months.

    One of the primary drivers behind the weakness in this “asset class” is a sharp reduction in the numbers of foreign criminals laundering money via London real estate. Just in case you still harbored any doubts about high-end London property being little more than bank accounts for shady foreign oligarchs, we learn the following from Bloomberg:

    http://www.bloomberg.com/news/articles/2016-02-29/london-luxury-homes-face-new-blow-as-visas-for-rich-fall-chart

    http://www.zerohedge.com/news/2016-03-01/london-bubble-trouble-visas-issued-wealthy-foreigners-plunge-84

  33. I don’t know if there was a quantifiable impact in those areas. As I have stated repeatedly now it is just a theory, no compiled data exists that I am aware of. Hopefully Red Barn is using the type of metrics Starbucks uses to evaluate locations.

  34. I think the schools issue is sometimes overrated and not the only factor for sure, but there is some impact.

    Drugs are everywhere but the peer focus on academics is not. Peer group attitudes and cohesion are really important in early high school particularly – your kids may get a lot of their attitudes towards many things here. And not every kids is impacted the same way but I have a bunch of very social ones.

    I would happily send a kid with musical talent to Vic High (have you ever seen them peform? they are awesome – like watching Glee) – got one of those and proposed this plan and was turned down. Once your kid has friends it gets very hard to move to a different school because their friends are so important so you should determine whether you believe the particular school is significant before you buy.

  35. When it comes to gentrifying a neighborhood.

    Was there a quantifiable impact on property values of other Red Barn stores in other hoods like Glanford?

    Does the Red Barn attract a special group of clients that would lead to higher property prices in the neighborhood?

    Or does the Red Barn appeal to all income groups equally?

    If a Money Mart was to locate next door to the Red Barn would that negate gentrification of the hood?

    When you get a lot of new home owners in a neighborhood they will upgrade and update their homes and the hood will improve in desirability and price. However, that doesn’t last forever. With time the amount of renovating declines and so do the homes and neighborhood.

    For example Fernwood/Oaklands. As young couples moved in to the hood they upgraded the older homes and added suites. They also brought children to the hood and Oaklands School became very popular. However, kids get older and in a few years that neighborhood will have many of the social problems associated with teenagers, higher density and transient renters in an inner city. Crime rates will rise in the hood and the desirability of the area will decline as the inner city grows to encompass the area. Fernwood/Oaklands is a blue collar and low to middle level government worker neighborhood. That’s never going to change.

    Fernwood/Oaklands has one of the highest turn over rates of housing in the city. People outgrow the small houses in the neighborhood and move on to suburban style housing in Saanich.

  36. Another reason for more transparency from brokers to access to property histories.

    Ontario mortgage brokers face allegations of lying to investors, fraudulent documents

    “There used to be a little more flexibility, but banks are really rigid now,” says Blair Anderson, a Hamilton-based broker and the author of Ask Your Mortgage Broker.

    “The agency also says it’s learned that some brokers have been using prohibited, coercive sales practices, such as charging cancellation fees to compel borrowers to follow through.

    The B.C. agency received a total of 116 mortgage broker complaints last year. Of those, five led to formal enforcement action, 16 resulted in warnings and four led to conditions on the broker’s registration. Another 19 investigations are still open.”

    http://business.financialpost.com/personal-finance/mortgages-real-estate/ontario-mortgage-brokers-face-allegations-of-lying-to-investors-fraudulent-documents

  37. I wonder if the proper comparable to Fairfield or Oak Bay is not Oaklands but Cadboro Bay? Or does Cadboro Bay compare more closely to other Saanich East areas like Gordon Head or Broadmead?

    I say that because of the proximity to the ocean and they have their “Village” . It’s farther from Downtown but close to the University.

    How do prices in Cadboro Bay compare to other areas?

    Is there value to be had there or is it overpriced?

    Thoughts from Marko and anyone else here in the “know” would be appreciated.

  38. Proximity to the ocean was the deciding factor in favour of Fairfield for me. Moving from Alberta the fact that I could pull/carry my kayak down to the water from my house was an amazingly awesome selling point. Obviously that particular factor doesn’t apply to a lot of people, but lots do like to be close to the ocean.

    That said our search included Fernwood, Oaklands, Vic West and other supposedly less desirable, but to me still attractive seeming areas.

    At the time (2008) the Fairfield premium didn’t seem to exorbitant. Our assessment is up only 11-12% but judging from some recent sales in the area I think the hood has gone up more like 20% since we bought.

    I agree with Marko that the “schools” issue is over-rated. A kid with strong family support is likely to thrive and get a decent education at any Victoria school. The “strength” of a school like Willows compared to George Jay has a lot to do with the demographics of the kids that attend. If your kid falls in with the “wrong” crowd you can always move them later.

    Based on my one year of private school attendance even paying the big bucks won’t guarantee a drug free school for your kids. Kind of the opposite – better drugs though 🙂

  39. I’ve lived next to Estevan village and next to OB Avenue and I like them both equally. Some people seem to prefer further into south OB but I loved the walkability of Estevan and the fact that it has a small commercial section.

    OB Avenue area has way more amenities but Willows Beach is the best beach/park and right down from Estevan plus we liked the fish&chip shop and the toy store when buddies was there. Really, anywhere in OB is going to be pretty nice.

    The bacon is the best and Red Barn is consistently busy and the parking is terrible and might get worse as I hear the city is considering bike lanes. I do disagree with your assessment but only time will tell, gentrification does not happen instantly, so probably best to just leave it at that.

    I find it annoying that 2013 Oak Bay Avenue is managed as it is. That property and the one next to it are owned by the same family and they do nothing to improve or manage that building well. 2013 is in a deplorable state although the brick camouflages the disrepair somewhat – broken windows don’t get fixed. The interior maintenance looks worse. Hopefully one day there will be some movement but I sure wouldn’t be happy living next door.

  40. Victoria Real Estate Board

    Tue Mar 1, 2016 8:55am:

    Feb Feb
    2016 2015
    Net Unconditional Sales: 772 542
    New Listings: 1,160 1,108
    Active Listings: 2,562 3,480

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

  41. I’m hard pressed to see any serious gentrification of that Oak Bay Ave area where Red Barn is. It already has had a few new buildings/condos over the last 10 years and the rest are very firmly entrenched businesses like only gas station for miles, medical building, the nursery, florist, church, small restaurants, etc that are part of the character of the area. If you think it’s going to turn into Robson St for the wealthy I think you’ll be waiting a very long time.

  42. Went in Red Barn the other day, nice store with some tasty stuff but you can’t shop for all your usually grocery shopping needs. Definitely won’t make your house value go up. Hard to find parking during day and hard as hell to get in and out of onto Oak Bay Ave if you park around back. Have to drive 4 blocks to loop around. Was already hard to find parking to get to Home Hardware, only going to get worse. But the bacon is the best.. did I say that already ? 😉

  43. South OB. North OB. Estevan or Village? Uplands is in a league of its own. Which would u pick for value/ lifestyle?

  44. “No doubt Fairfield/Oak Bay are better areas but the premiums are a little nuts and getting crazier and it seems people are a little out to lunch with drug use/safety concerns in the Oaklands area.”

    Drug use is spreading everywhere in this town. A few weeks back I saw two crack heads smoking their pipe in the alley beside the building used to film Gracepoint on Oak Bay Ave and Foul Bay. I always see homeless biker addicts cruising around that area looking for opportunity.

    Oaklands is over valued, their streets are in rough shape and haven’t been paved in 60 years easy, mind you some in Oak Bay are in similar shape. A few side streets are quaint like Roseberry but it still feels like blue collar area and I would never buy there at those prices.

  45. No doubt Oaklands has many good things but as far as visual appeal it lags far behind OB and Fairfield. I don’t enjoy shopping in malls or walking along Shelbourne or Hillside. Maybe a bunch of people in Oaklands are walking over to OB rec, I’m not sure. I know the kids in OB use it a lot and walk themselves. My guess is parents would be driving from Oaklands to Rec Centres depending on the ages.

    As for schools, they are ranked here: http://britishcolumbia.compareschoolrankings.org/secondary/SchoolsByRankLocationName.aspx?schooltype=secondary

    OB High 61/258
    Vic High 225/258

    Vic High is known for a really good music program. If I had a kid who wanted to be a musician I’d send them there but for academics no..

  46. Roseberry/Aveberry are really nice but to me there is a very big difference between a neighbourhood full of these types of places that you can walk through to great little parks and one with some areas on the top of the hill and just over the hill is the busy and visually unappealing intersection of Cedar Hill & Hillside. I don’t use my car during the week at all. Not everyone cares about visual appeal and walkability that much, but enough people do, along with other factors, to make the values higher.

  47. Nothing wrong with Oaklands… Just clarifying why those other hoods are desirable. Fairfield in particular is desirable among the less exclusive minded too. Plenty of rental housing in Fairfield.

  48. If trees are important stick to upper part of Oaklands….Roseberry/Avebury (2600 and 2700 blocks) are very charming with lots of character homes/trees. Yes, once you get down to Scott Street things are a little boring but the City of Victoria has been planting new trees in the boulevards. They will take years to grow out.

  49. Not a big difference in lots between Fairfield and Oaklands. 5,880 sq/ft vs 5,500 sq/ft median. Oak Bay is pushing 8,000 sq/ft median and you pay for it.

    Is there anything to support that schools are actually good in terms of teaching quality? My impression is that “good schools” have to do moreso with the socioeconomic status of the kids than quality of teaching. Are teachers really better at Oak Bay High vs Vic High?

    Neighbourhoods with upscale housing…I would describe that as exclusive.

    Charm, fair enough.

    Walkability is going to be better in Oaklands vs Oak Bay. You can walk to Camosun, Hillside Mall, Jubilee, Oak Bay Rec, It is only 1.16 km from corner of Oaklands to corner of Foul Bay/Oak Bay.

    No doubt Fairfield/Oak Bay are better areas but the premiums are a little nuts and getting crazier and it seems people are a little out to lunch with drug use/safety concerns in the Oaklands area.

  50. Fairfield and OakBay are also well established and stable neighbourhoods. Their tree lined streets are very friendly to walk and increase the homy charm of the houses. Also very easy bike and walk locations to beaches, parks and town due to the flatness proximity and traffic patterns.

  51. I do disagree about the premium for Oak Bay and Fairfield being mainly derived from a feeling of exclusivity and closeness to the ocean. Having lived in these areas and other areas of Victoria for decades I’d say that the price difference is also due to the extremely high charm factor, the good schools in these areas, the neighbourhoods with upscale housing on big lots, very few homes in disrepair, and there is good proximity to services and high walkability.

    I think this plays out even more when you have kids. They can walk to the rec centre, library, schools, parks, sports practice, lessons, the grocery store, the walk-in clinic – everything is here. There is very little non-local traffic on the side streets and lots of local fun events. Oak Bay in particular is one of the safest communities in Canada: http://www.vicnews.com/news/221352441.html I’m willing to pay more for this.

    And given that I view a primary residence as an investment my opinion is that these areas are a safe bet for appreciation and will hold their value better in a down market than Oaklands or Haultain Village.

  52. I agree Haultain Village is pretty charming and, imo, an area that is gentrifying. Oaklands is pretty nice too and definitely changing but it is a bit rough around the edges, literally the edges. As for drug use-related issues (homelessness/crime/camping) the area that I would avoid is lower Fernwood. Having had friends buy and sell there and from what my Victoria police officer friend says, there is a reason prices below Fernwood are cheaper even though there are a lot of nice places. It is just too close to downtown/Pandora to avoid being impacted.

    There are crime maps available. If you are really worried about crime don’t live downtown or anywhere below Fernwood level between Hillside and Rockland. https://vicpd.ca/public-safety/crime-prevention/crime-reports/

  53. I see more drug use around Cook Street village than I do around Haultain village. The lots are actually a solid 5,500 sq/ft on average (50 x 110) and the yards are either East or West facing in the Oakland areas so you get fairly decent south sun hitting either orientation.

    I lived for over 15 years in the Oaklands area and my office is there currently. Have never had safety concerns. I think I would rather have my kid walk from Oaklands to Vic High than from Fairfield to Vic High.

    Regarding speeding….haven’t noticed an issue and I would say walking on a street with double sidewalks/boulevard as a buffer is a lot safer than the 90% of street in Saanich without any sidewalks at all, for example.

    I think the huge premium of Oak Bay and Fairfield has more to do with proximity to ocean and exclusivity than any of the other factors mentioned.

  54. There is a reason Oaklands area is 25% cheaper then oak bay – Fairfield, it’s because it’s an area that gets a lot of “flow through” traffic and unsavoury types. Lots of drug users, high break and enter, lots are small and north south facing, and just a general feeling of drug use and worn out old buildings.

    I know the area well, used to rent on haultain when I moved to Vic. Great area for a student, would never let my kids walk to school, way to much speeding Drivers taking shortcuts, and way too much drug users.

  55. The assessment on my house was super low even when I bought it in 2003. A solid 35% lower than my purchase price which was low. I never complained. Keeps my taxes low…. Or at least it did.

  56. Myself I never look at assessments, nor do I call BC assessment to complain if they’re 200k below market 🙂

  57. Also, if you buy in Oaklands your kid can literally walk to all levels of school which is a time saver.

    We like this too and a big part of the reason we bought where we did. Think ahead people! Do you really want to drive your kids to school and waste your life idling in a zoo of other sheep dropping their kids off every morning?

    This blog is no stress, it is very civil for all intensive purposes

    It’s “for all intents and purposes”. Just a friendly tip from one ESL to another 🙂

  58. My realtor tells me that assessments are irrelevant but I get nervous buying a house much higher than assessment.

    I think your realtor is correct. Also in this market you have very little leverage to argue about prices being higher than assessments. Assessed values are goofy in that for an individual house they can be way off, but overall they seem to be very close in flat markets. I used to track sales/assessment and over time in a flat market it was something like 99%.

  59. I am looking for a house right now & wanted to know what everyone thinks about assessment prices. My realtor tells me that assessments are irrelevant but I get nervous buying a house much higher than assessment. The spread between assessments & list/final sale price seems all over the map as well. Some homes are listed/sold close to assessments, others much above (like we’re talking 200-600K over in the current market). Any thoughts? Do assessments provide any useful information?

  60. Other part of it is long exposure to repetitive stress. Might want to get off this blog Marko.

    This blog is no stress, it is very civil for all intensive purposes. I am involved in a few Croatian blogs/forums (I am Croatian) where I discuss life in Canada (for those Croats looking to emigrate) and I have people accusing me of propaganda and all sorts of political crap; that’s a little more interesting/argumentative.

  61. Crazy that Oaklands area (really not that great of an area) is getting these boxes near 700k. Makes other nice areas look super cheap still.

    One of my favorite areas. Most streets have sidewalks on both sides, some streets even have double sidewalks plus boulevard on each side. Much more convenient in terms of commuting compared to Oak Bay and Fairfield. I like the feel and vibe of Haultain Village…..etc.

    Also, if you buy in Oaklands your kid can literally walk to all levels of school which is a time saver. The nice thing is for elementary school they don’t need to cross any major streets. When they are a bit older they need to cross Bay Street to get to Vic High but there is a controlled interspection at Fernwood and Bay Street.

    I must admit that very few of my clients agree with my assessment. I regularly have clients paying 150-200k more for the same house in Oak Bay/Fairfield depsite my encouragement to buy Oaklands.

  62. Another flipped house hits the market… 2612 Asquith (Oaklands area) sold June 2015 for $508,500; now listed at $649,900. It appears to have improvements since last year (legal suite, kitchens, bathrooms, roof, etc.)

    I would be really shocked if this place had less than 5 offers come Friday (date offers are being looked at). Three beds up, three baths, suite, larger city lot, west facing yard, 30 second walk to my favorite coffee shop in Victoria; Koffi. According to my crude calculations this place will hit around 1800 to 2000 PCS accounts this evening.

  63. Marko, can you tell me the sale price of 322 Gorge Rd W and 340 Gorge Rd W (unless this one was pulled off the market – I never saw a sold sign, just gone one day).

    Both sold; $430,000 and $558,000.

  64. Crazy that Oaklands area (really not that great of an area) is getting these boxes near 700k. Makes other nice areas look super cheap still.

  65. Another flipped house hits the market… 2612 Asquith (Oaklands area) sold June 2015 for $508,500; now listed at $649,900. It appears to have improvements since last year (legal suite, kitchens, bathrooms, roof, etc.)

  66. Marko, can you tell me the sale price of 322 Gorge Rd W and 340 Gorge Rd W (unless this one was pulled off the market – I never saw a sold sign, just gone one day).

  67. Why you can’t afford a house in the UK:

    https://medium.com/@neweconomics/why-you-can-t-afford-a-home-in-the-uk-44347750646a#.56x9ihe2p

    The argument that banks intent on profit maximization and governments intent on preventing financial disruption between them cause property bubbles seems to be correct.

    However, only a stupid government would allow a housing bubble to continue long beyond an election, since it will obviously want to build steam in the economy before instigating a new feel-good, wealth-effect-generating RE boom prior to the next election.

    The implication is that the Government of Canada must now be taking steps to cool the RE market. They will aim for a soft landing, but there must be a significant risk of miscalculation. What seems unlikely is two or three more years of double digit price increases.

  68. Personal household debt levels were half of current levels back then Mike. As Caveat stated rates have no where else to go but up and the banks will tighten the lending like a vise.

    Wishful thinking that you desire Victoria to turn into a city where youth and families flee as in past over valued markets but I never sensed compassion just greed.

    Vv’s numbers still don’t add up.Now you have multiple properties worth a million each in high end areas near/in the Uplands but your up 50% equity but up $1.2 million in profit. Hmmm. Those who brag the loudest are usually over stating the facts.

  69. Maybe my math is off. I think I miscalculated the principal pay down amount and it seems likely that you are correct.

  70. Michael – to me the chance of Victoria having multiple years of 20% gains seem to catch partway up to Vancouver seem low.

    Maybe, but we did have at least 3 ‘near’ 20% years in the previous cycles of ’99-09, ’85-95, and ’71-81(had 4). So at least there’s a fair chance we get 3 again in this cycle ’13-23.

    ’72&73 >20%
    ’80 37%
    ’81 38%

    ’89 18%
    ’90 19%
    ’92 16%

    ’03 17%
    ’04 18%
    ’05 20%

    http://www.vreb.org/media/attachments/view/doc/ye782015/pdf/Annual%20Summary%20of%20Single%20Family%20Sales%20from%201978

  71. “My job is long hours but also very low stress”

    This is the key

    My job is very long hours but my agenda is driven not by my own wishes but by the schedules and expectations of others.

    I think if the data collectors dove deeper, the number of hours worked probably has a lower correlation with health issues than the circumstances under which the work is completed. I.e. work a stressful job 40 hours / week = OK because you can recover, work a no stress job for 70 hours week = OK because there isn’t much to recover from, work a stressful Job for 70 hours/ week = problems because you are tired all the time and you have no time to recover.

  72. Tororo, not sure what you mean.. Just with deposit plus paid off mortgage even at original price I’m close to 38%… With a 26%+ appreciation it’s close to 60% equity if you count current valuation.

    Reasonfirst, you need me on this blog to cut through the loser hate… People hating on others that put their money with risk into the market and got the gains.

    You gotta be innit to winnit

  73. My house is in a nice area and was over 600k. Near Uplands might be different for appreciation. You’d need about 40% appreciation to hit the 50% mark on your house. That area might have it recently – seems a little high but some of the recent sales prices have been crazy. Most I think I’ll see is 15% unless things keep going the way they are for a while longer.

  74. For example:

    House 1 – bought 2008 @ 740k

    Now estimated at 1+ mil (near/in uplands)

    Current estimated value + paid down mortgage + down payments = easily close to 60% equity.

    If you bought a cheap rental house in a cheap area obviously gains will not be as much.

  75. Michael – to me the chance of Victoria having multiple years of 20% gains seem to catch partway up to Vancouver seem low. Victoria has only managed that rate of price appreciation twice since 1980. The occurrences before 1980 were associated with 10%+ inflation so don’t have quite the same meaning as 20% now would have.

    Local salaries won’t support that and the possibility to lever up more is limited. I don’t believe mortgage rates are going much higher for quite some time. But we KNOW they can only go a tiny bit lower than current.

    So multiple years of 20% appreciation would be dependent on a major increase in outside money flowing into Victoria

  76. @Reasonfirst

    in declining order of probability

    1) just a weird annoying person
    2) plant by the seller (who would have some fairly major incentive to talk up the bidding war)
    3) plant by realtor (who as Marko pointed out only has pretty modest incentive to do this)

  77. Assuming the work isn’t dangerous, super stressful, or completely sedentary the I expect that 70 hours a week doing a job you love or at least like is probably better for your health than 35 hours a week at a job you hate.

  78. CS, I’m in complete agreement with you that you’re on an entirely different topic of comparing specific areas & lot values as per your memory. I’m comparing the entire city historical spread between Vic & Van SFH with the available ~40 years of REB data. That’s not to say your theory doesn’t have merit, only time will tell.

  79. Seventy is a lot of hours to work. Don’t recommend it with children. I don’t think Marko has any kids yet and I think most of the risk is associated with being sedentary and drinking too much.

    “Physical inactivity can increase the risk of stroke through various biological mechanisms and heavy alcohol consumption – a risk factor for all types of stroke – might be a contributing factor because employees working long hours seem to be slightly more prone to risky drinking than are those who work standard hours.”

    Other part of it is long exposure to repetitive stress. Might want to get off this blog Marko.

  80. “6 years of 1% growth plus 2 years of 12% growth ”

    Meanwhile in the real world prices only went up from a median of $550K in January 2008 and now at $600K median in January 2016, while yours were going up much more than market average even counting renters equity ? Sounds like you need an honest appraisal from Jack, and not from Mike.

  81. I put 20% down on a rental home in 2009. I do not believe I have 50% equity yet.

    All of my expenses were covered by rents and it is cash flow positive after taxes.

    I don’t think my place appreciated 1% per year over the last six years plus 12% over each of the past two. Where are you getting these figures of overall 30% appreciation from? Victoria?

    My guess my place is up about 12% overall, but won’t really know until it sells. And then I’ll have to pay tax on the capital gains. The overall gain on the down payment is good, but nowhere near the kind of returns you are calculating.

    Am I missing some factors? Even if I added two more years of principal payments I don’t think I’m at 50% – are you talking of original purchase price or current value?

  82. @Hawk, last time I argue with you, it’s like talking to a rock.

    Re: 50% equity in a house in 7-8 years.

    –20% down payment

    –7-8 years of mortgage paid down by renters.

    –All extra funds left over from renters – maintenance goes to pay down the mortgage on each property.

    –6 years of 1% growth plus 2 years of 12% growth = around 30% gain in equity.

    So actually it’s more like ~60% average equity in each property now.

    Come on down, leave the apartment in James Bay and quit smoking and buy a house and eat organic.

  83. Yeah… A “plant” was needed at an open house for a piece of junk place with well over 100 buyers desperately looking to buy the place. Paranoid much?

  84. There are some super very strange people that come to open houses. I was thinkg about making a YouTube video along the lines of this one -> https://www.youtube.com/watch?v=0gWxHFMog9w

    about about stereotypes at open houses. You always have the person, “can I look in the crawl space?” when they have zero intention of buying the house. I always want to respond with “Okay, if the crawl space is perfect are you in a position to buy the home? No? Well then why not save us all the risk of you breaking your ankle going down there.”

    That is not how I respond, but what I am thinking inside my head.

    There is about 5 other stereotypes I wish I could hash out in a video 🙂

  85. For as far back as we have SFH data (70s) Van has only held a ~50% premium to Vic until we diverged in 2010. My guess is Vic now outperforms to return to our historical spread. For example, maybe Vic sees some ~20% years with Van <10% gains.

    Again, you entirely miss my point, which is that there may be no deviation from what you call the “historical spread” if you look at lot prices, not house prices, in Point Grey and Oak Bay, and that any deviation from the “historical spread” in house prices in those two neighborhoods could be explained by differences in redevelopment investment, which one would expect to be greater in Point Grey than in Oak Bay. If I am correct in that, there will be no “return to our historical spread” in lot values because there has been no deviation from it. And if investment in redevelopment is greater in Point Gray than in Oak Bay, there seems no obvious reason for it to return to any prior ratio.

  86. Marko – may not make sense, but I am 100% sure she was not just a looky-loo or prospective buyer. The behaviour was just too obvious.

  87. 33% increase of stroke is sure significant.

    So are my odds of dying in a MVA driving 42,000-45,000 km/year compared to the average person driving 15,000 km/year.

    You just have to compensate as much as possible. I now drive a much safer/heavier car than the average person.

    Same with the risks of working too much. No TV. Exercise more.

  88. The Grant St open house was crazy. There must have been at least 100 people through there in 2 hours. The realtor was just standing there as though she didn’t even care because she knew it was easy money, gone that day.

    I’ve overheard in the last couple of years’ people leaving my open houses giving me bad feedback along the lines of “the REALTOR® at the other open house was way more engaging.”

    Could be a generational thing? As a consumer I hate being inconvenienced, annoyed, and most certainly can’t stand BS. When I bought my 435i last year I never saw the car in person, negotiated everything online via email (never spoke via phone to salesperson), showed up in Vancouver and told her I had 30 minutes to sign all the paperwork/insurance because I wanted to meet a friend for lunch downtown. Told her straight up I didn’t want the walk-through of that car, didn’t want any extended warranties/products, or any of that BS. She understood and I was gone in 30 minutes.

    I had already researched the product to death on YouTube, BMW forums, I knew the smallest details like the difference in suspension setting between the 435i (RWD) and 435xi (AWD), etc.

    Same with house shopping. I personally don’t need anyone to sell me anything. I like to do my own research, walk through the house in peace and only ask questions if needed.

    I approach hosting my open houses the same way…no point in harassing someone at an open house about how awesome the house is and listing off every single upgrade when they’ve written it off in two minutes because the yard is north facing and they only would consider a south facing yard. Or they are just browsing and not interesting in buying for another year. At that point no matter what I say will change their mind so why bother?

    Yes, it comes across as I don’t care but that is just the way I would want to be treated.

  89. “I read the study…. doesn’t really put me off working 55+ hours per week. 13% percent increased risk of coronary heart disease isn’t significant when compared to the average person working 35 to 40 hours a week.”

    33% increase of stroke is sure significant.

  90. My story is this. I was in the kitchen and this lady, who wasn’t acting in any formal role but just looked like a realtor, asked me in a manner much too forward for my liking (and loudly so everyone could hear) ..”what do you think will happen”. Taken aback a bit as it was uninvited and out of the blue, I just said, “I don’t know”. She then continued uninvited to state as loudly…”I think it will be a bidding war!” Feeling the slime, I moved away quickly.

    Is this a standard tactic, to have a plant (like the infamous lee sisters in Vancouver posing as foreign buyers) that tries to play the rubes? If she was a realtor acting in an informal role, is this even legal,,,,ethical?

    Honestly, it just doesn’t make any sense for a REALTOR® to bother with such tactics. Whether a home sells for 650k or 750k is doesn’t swing the commission much, the actual sale is far more important.

    What’s happening is the market is 100% crazy, 100+ people at an open house is not tactics just irrational consumer heard behaviour.

  91. I read the study…. doesn’t really put me off working 55+ hours per week. 13% percent increased risk of coronary heart disease isn’t significant when compared to the average person working 35 to 40 hours a week. I don’t smoke/drink/etc., which probably already puts my risk below the average 35 to 40-hour worker when all the risk factors are aggregated. Add in more exercise/eat better and I’ll take the 13% on the extra hours.

    Also study noted sleep disturbances….I sleep like a rock. My job is long hours but also very low stress (at least to me it is), it isn’t like I am operating or doing something serious 70 hours a week.

  92. The Grant St open house was crazy. There must have been at least 100 people through there in 2 hours. The realtor was just standing there as though she didn’t even care because she knew it was easy money, gone that day.

  93. “You are now a health expert too?”

    I’m not but these guys are. I just put in a 120 hours with a ton of overtime in a 13 day span, hard on the bod but the extra OT cash came in handy. Not something I do often.

    “Last week, a study published in the British medical journal the Lancet had an alarming warning for people who work more than 55 hours a week: They appear to have a 33 percent higher risk of stroke than those toiling a more sane 35 to 40 hours each week, and a 13 percent increased risk of coronary heart disease, too.”

    https://www.washingtonpost.com/news/on-leadership/wp/2015/08/24/working-more-than-55-hours-a-week-is-bad-for-you-in-many-ways/

  94. Which is crazy given there were 20% fewer people back then, household sizes were bigger, and there were a heck of a lot fewer condos. Adjusted for population we’d have to have over 935 sales to beat 1992

    There were fewer condos but still 143 sales. We didn’t more than 143 condo sales in February from 2011-2015.

    Find I find absolutely crazy is the total sales numbers are well above 2002-2006. I didn’t think we would see another market like that for 10+ years.

  95. Went to the Grant St. open house. Showed very nicely and definitely listed very low. Lots of people.

    My story is this. I was in the kitchen and this lady, who wasn’t acting in any formal role but just looked like a realtor, asked me in a manner much too forward for my liking (and loudly so everyone could hear) ..”what do you think will happen”. Taken aback a bit as it was uninvited and out of the blue, I just said, “I don’t know”. She then continued uninvited to state as loudly…”I think it will be a bidding war!” Feeling the slime, I moved away quickly.

    Is this a standard tactic, to have a plant (like the infamous lee sisters in Vancouver posing as foreign buyers) that tries to play the rubes? If she was a realtor acting in an informal role, is this even legal,,,,ethical?

    If that happens again, I will be better prepared for a loud smart-ass response!

  96. I’m simply comparing Vic vs Van, not specific areas or lot values since we don’t have that data.

    For as far back as we have SFH data (70s) Van has only held a ~50% premium to Vic until we diverged in 2010. My guess is Vic now outperforms to return to our historical spread. For example, maybe Vic sees some ~20% years with Van <10% gains.

  97. Re Victoria versus Vancouver prices.

    Michael, I was comparing lot values, you are comparing house prices, which is quite a different thing. A $600 K lot in Oak Bay may have an old house assessed at less than $100 K or a new house that adds more than a million to the lot value. So when you compare Vancouver to Victoria house prices in prime areas, you have to consider the extent of redevelopment in those areas. Pretty certainly Point Grey has undergone more redevelopment in recent years than Oak Bay, so one would not expect a constant ratio between them in house prices even if there was a constant ratio in lot values. Thus, when you compare the trend over time in houses prices in Point Grey versus Oak Bay you are not comparing apples to apples.

    But in any case you are not comparing house prices in Point Grey and Oak Bay, you are comparing prices in the two cities, which have highly diverse property markets. Such a comparison seems virtually impossible to interpret.

    What I am confident of, however, is that today’s lot prices in Point Grey have about the same 4:1 ratio with lot prices in Oak Bay that they had in 1974.

  98. Even with a strong day today we’ll fall a few sales short of the 780 record in 1992.

    Which is crazy given there were 20% fewer people back then, household sizes were bigger, and there were a heck of a lot fewer condos. Adjusted for population we’d have to have over 935 sales to beat 1992

  99. Even with a strong day today we’ll fall a few sales short of the 780 record in 1992.

    Mon Feb 29, 2016 8:35am:

    Feb Feb
    2016 2015
    Net Unconditional Sales: 718 542
    New Listings: 1,120 1,108
    Active Listings: 2,575 3,480

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

  100. Not sure I understand the motivation behind cheering for huge price appreciation. Hooray the city will be entirely unaffordable to my kids!

    So we can be more like Vancouver? 🙂

  101. It’s your choice to work 70 hours a week and not have a life. This usually leads to an early grave or heart probs in 30’s. One crappy mover and a late carpet cleaner doesn’t equal $10K. Building a house while packing isn’t in the realm of the average tenant move.

    You are now a health expert too? 70 hours a week still equals 5 free hours a day for exercise and other. 70 hours isn’t crazy when you consider the average person watches 20 hours of TV/Movies per week.

    Happy with my life 🙂 but thanks for the concern.

    Fair enough, I am not an expert tenant so I guess I don’t have moving down to a science.

  102. So you’re up over 50% after buying 4 or 5 properties at the market peak 7 years ago ? Something doesn’t add up there bud.

    If the market tanks 50% as it did in 1981 and/or the renters flee Victoria like they are in Calgary you’ll be luring them in with free rent, groceries and a new flat screen like they are doing there. Even worse if you’re a slumlord, you’ll need a bag of free coke too. 😉

    Alberta landlords forced to offer free TVs, housecleaning, groceries to rent their properties

    “[In the past] you could throw an ad up with a high rent and get a bunch of calls right away,” leasing agent Shawn Langille said.

    “You could pick your tenant and have them fight over a property.” Not anymore.

    http://globalnews.ca/news/2529060/alberta-landlords-forced-to-offer-free-tvs-housecleaning-groceries-to-rent-their-properties/

  103. Not sure I understand the motivation behind cheering for huge price appreciation. Hooray the city will be entirely unaffordable to my kids!

  104. @hawk… How would I lose money? I’m making cash each month on each property, plus after 7 years have well over 50% equity in each property.

    It would take full on economic crash never seen in history plus a plague to make me lose “it all”.

    Even then, with all tenants dead of the plague and housing market crashing well below 50%, it would take about 10 years before I had to liquidate.

    Your world view is seriously messed up.

  105. It’s your choice to work 70 hours a week and not have a life. This usually leads to an early grave or heart probs in 30’s. One crappy mover and a late carpet cleaner doesn’t equal $10K. Building a house while packing isn’t in the realm of the average tenant move.

    Multiple properties leveraged into stock markets that keep going down eventually result in margin calls. Common knowledge.

    A millionaire with leveraged properties with zero risk to downside on borrowed money ? That’s a joke. My buddy knew both a double figure millionaire and a triple figure millionaire go under in very short order last year. Zero risk is a figment of your imagination.

  106. If Marko was taking the middle road he’d show both sides of the market. Not just transactions which show the positive side of things. However, one can’t blame him for drumming up business. He has to pay for his massive house somehow.

    Places going so much over asking feels so unnatural that it is entertaining to post. Posting a house selling for 785k on an asking price of 800k just isn’t interesting.

    I don’t think I want, and certainly do not need, any more business. I do wish consumers would get their head out of their *** and embrace lower commission models in terms of the market as a whole, but personally I have more business than I can handle.

  107. You must have had a large down payment Marko. Doesn’t add up for the average person with 10 to 15% down on what it takes in this market to get a decent place with a suite.

    $10K inconvenience on lost bizz to move out of a condo when your in the bizz with connections seems far fetched. You have 3 months to move. As long as I keep paying my rent, I decide when I move from my apartment not the landlord.

    How about some under asks showing some lucky winners getting “deals of the week” instead of “sheep of the week”… or is that bad for business ?

    Less than 1/4 of buyers in Victoria are putting down less than 20%. My downpayment was enough to avoid CMHC fees and than I added another 20%-25% in equity by buying the lot in 2013 ($145,000 less than a recent similar lot sale a block away) and doing the owner builder thing gig as can be followed in my 40 part series on youtube 🙂 -> https://www.youtube.com/watch?v=fNkX72hBSxg

    Moving is simple when you have flex Fridays, weekends off, and a paid “moving day.” When you run a business working 70 hours a week it is a disaster especially if not planned in advance. We continued renting our condo on a two month overlap with our finished house and it still sucked; movers shatter are glass dinning room table (they replaced it but it was super annoying having to deal with it); carpet cleaner showed up an hour late on the condo (when I had a listing appointment to be at), etc, etc.

    Enough about me though….reality is not everyone is going to have the aptitude to go out and buy a patch of land, design and build a house, but they don’t have to.

    The numbers still work on something like this –

    https://www.realtor.ca/Residential/Single-Family/16582976/1055-Nicholson-St-Victoria-British-Columbia-V8X3L3

    Suite rents for $1,550 and you get a nice three bedroom upstairs with south facing yard.

  108. Hawk, multiple cash positive properties can’t get burned “on the way down”… I’m not sure if you know how this works?

    Cash flow positive, I don’t care if property goes down… But if property goes up, bank lends me equity at super cheap rates which I then take and invest.

    So far up 1.2 mil w zero risk for downside and all the joy and wealth generation of the upside?

    Come on down, leave the apartment and join the party!

  109. Sounds like Mike’s wife posting now. Sales numbers tomorrow via Marko you mean ? Tomorrow is 29th incase you don’t use a calender. Multiple properties equals multiple pain on the way down.

    I get the feel the landlords are sweating the numbers are flat or down since we never see the under ask sales.

  110. @bizsnitch nope just own multiple properties and watching 100k a month rise in equity. There ain’t no smack happening over here, only renters get smacked missing out on wealth generation.

    Vic has a loooong way to go to catch up to Van.

    Tomorrows numbers will show you what I mean.

  111. If Marko was taking the middle road he’d show both sides of the market. Not just transactions which show the positive side of things. However, one can’t blame him for drumming up business. He has to pay for his massive house somehow. 🙂

  112. You must have had a large down payment Marko. Doesn’t add up for the average person with 10 to 15% down on what it takes in this market to get a decent place with a suite.

    $10K inconvenience on lost bizz to move out of a condo when your in the bizz with connections seems far fetched. You have 3 months to move. As long as I keep paying my rent, I decide when I move from my apartment not the landlord.

    How about some under asks showing some lucky winners getting “deals of the week” instead of “sheep of the week”… or is that bad for business ?

  113. VictoriaVv: You must be a Realtor. Constantly pumping up things. Going to be great when reality of a market correction smacks you in the back side. 🙂

  114. 1573 Wilmot was super underpriced. Could easily see that selling for 2.2 million in a few years. Literally prime location with stunning house.

  115. I’m the happiest renter, lotsa cash left every month to save, invest, treat myself without fretting about paying the next unexpected but inevitable household breakdown nor the massive mortgage payment that sucks a whole paycheck or more.

    My mortgage payment + property taxes + maintenance (mind you, new home) – rental income from secondary suite < monthly rent at the condo we use to rent.

    Not even factoring in principal repayment in the above but if I did it would be even more skewed as the rental income pays all of the interest, plus some principal, on the mortgage.

    We were lucky that in 2.5 years we rented the landlord never gave us notice but if he did it would have cost me at least $10k+ in lost time/business productivity having to deal with an unexpected moved.

    If you have “lotsa” cash in both scenarios at least in owning you eliminate the notice to move risk.

  116. and over ask of the day for Sunday, February 28th….I spoke too soon earlier in the day! A few more over ask sales have come in this afternoon and the winner is.

    1573 Wilmot listed for 825k and sold for $1,008,000 (unconditionally too).

  117. Many people just get trapped in houses as they underestimate the expenses and cost of upgrades and renos which is inevitable

    Fully agreed. I should note that although we haven’t spent much in absolute dollars, everything has aged and gotten that much closer to needing replacement. Roof, deck, fence, furnace, heat pump, floors, paint, appliances. All those things are costing money every single year if you account for them properly.

  118. I wasn’t implying LeoS, he makes very valid posts.

    My world view is fully inline with reality and the rest of the world’s outside the bubble, thanks. Thinking this is a normal market and buying into it will have huge consequences.

    Did my chimney top once for a few layers of bricks. Saved a lot. Just use a safety rope.

    Many people just get trapped in houses as they underestimate the expenses and cost of upgrades and renos which is inevitable.That’s why there is a debt bubble.

  119. I’ve spent tons of time on the roof. Scraping the moss off (many hours), repairing a couple shingles, cleaning gutters, installing gutter guards. Its fine and it’s peaceful up there (kid’s are too small to climb up). Maybe for the chimney I’ll harness myself in.

  120. I have heard both. I have heard from a number of people that buying a condo was a big mistake. I have yet to year of that from someone who bought a house, although it has happened that people have been hit with big unexpected repair bills which was a bit of a shock.
    So far so good on this place. We’ve been spending about $1600/year on what I classify in Mint as “home improvement” and that is mostly on the improvement side (or tools) and not actual repairs. Currently working on repointing the chimney, which I was quoted $1500 for, but figure I can do it myself for about $100.

  121. Yeah, we are just fine. I’d go into it a bit more but I don’t want to be responsible for blowing hawk’s world view.

  122. Only a matter of time before rates climb…

    Certainly true, but no one knows when.

    It’s also possible that rates may stay extremely low for another 10 years and future economists will devote textbook chapters to this unusual epoch, much the same way that we now look back on the atypical high-interest period of the early 80s.

  123. I’m the happiest renter, lotsa cash left every month to save, invest, treat myself without fretting about paying the next unexpected but inevitable household breakdown…

    Some homeowners must fret about that stuff, but totoro and Leo S don’t strike me as the type who are in that category; they seem like the “let’s keep a good emergency fund” type. I’m also this type.

  124. VictoriaVv: How about Hawaii? http://www.hawaiilife.com/mls/big+island/-ra/288634?page=13 This one’s close enough to 40% cheaper than the small, asbestos, leaky basement bungs you see for sale here right now. Sure medical costs will be more there, but that’s not an excuse for the way prices have gone up here.

    What’s the next excuse? Any of the following:

    -Rich foreigners are buying everything up.
    -Everyone wants to live here.
    -We’re running out land.

    I can guarantee you that your theory that prices will go up and up and up will not work out. Only a matter of time before rates climb, along with every other cost the by looks of it. Keep an on your hydro bill for example. 😉

    Glad you like the nick. 🙂

  125. Can’t believe grant street went for that much over asking. It seems it was priced too low to begin with.

  126. Introvert, you got it wrong. I’m the happiest renter, lotsa cash left every month to save, invest, treat myself without fretting about paying the next unexpected but inevitable household breakdown nor the massive mortgage payment that sucks a whole paycheck or more.

    If you’re handing out awards how about the biggest owner pumper award or for those bitter owners who write the longest posts without saying anything. 😉

  127. @biznitch (quality name btw, classy). So middle of nowhere Texas along the border with cartels, houses are 20% cheaper then Victoria?

    Once you factor in the huge cost per month of health insurance in the USA, our affordability here is much, much lower per month cost then there.

    Plus it’s not Texas.

  128. I’m reasonable confident that there will be a correction in the market in Victoria. Of course no one can put a time frame on it. I think we can easily solve the dispute about how many HAM are buying by doubling interest rates. We’ll quickly see how many buyers are overextended locals. I bet most are.

    Go watch some of the housing shows from the US and see what stuff is selling for there. Disregard that it’s US dollars be they’re buying in US dollars. Then look at the dives for sale here at over 2x the price.

    I bet all these us states thought they were different. Just like people say here..

    http://www.macrobusiness.com.au/2011/11/how-phoenix-housing-boomed-and-busted/screenhunter_01-nov-03-21-38/

    If one doesn’t think it’s risky to buy here now, they might want to look at this.

    http://www.visualcapitalist.com/canada-has-the-most-overvalued-housing-market-in-world-chart/

  129. Wow, wait till you guys see the numbers for tomorrow AM… This month will blow all stats out of the water.

  130. Hawk is the undisputed bitterest renter on the blog — a coveted title.

    Also, I’m really enjoying Marko’s new segment, Over-ask of The Day.

  131. Here’s the REB data Leo in chart form that I’m using to determine the ~50% historical spread Vic vs Van.

    Thanks. Looks like the actual data is tough to get hands on. The Vancouver REB is a lot more stingy than Victoria.

  132. Fireecology said “Just Jack- I’m not sure how to put this, but your statistics knowledge leaves something to be desired. The monthly stats, particularly if you’re only looking at the core sfh market, is waaaay too thin to be detecting multiple modes and making a big deal out of the tails. The market has not been swinging around wildly for 4 months; it’s been showing the usual variability within that time period. Not everything swings from boom to bust to boom on a weekly basis.”

    Fireecology, I’m not understanding what you are trying to say unless it’s just an attempt at disguised personal attack, because you’re implying that the current events of over asking prices, bidding wars, and extraordinary prices are normal for this time of year and would not show up any statistics. Both are false. This data only shows a distribution of sales in different price ranges it doesn’t illustrate “swinging” or “boom to bust to boom on a weekly basis”.

    As for the data being thin, Victoria is a small city and what we are seeing in house prices is contained in a small geographical area. The data is calculated on 216 sales. But I have also calculatee the data over the last six months using 688 sales and I still get a fat tail that is more pronounced than the graph over the last decade using 13,952 sales which provides a base line for comparison. I can also compare the data to the same time period last year, again a pronounced fat tail.

    All the fat tail is showing is that the probability or risk of a catastrophic event is higher than any time in the last 5 years or last decade. How much more – I don’t know. But I do know that what we are experiencing is a dysfunctional market. Buyers and Sellers should have a fair, equitable, reliable and reasonable idea of what a property is worth. Without this presumption, there is no functioning market place.

    https://youtu.be/vgqG3ITMv1Q

  133. Having some issues with the caching system and having it show the mobile site to desktop users. Disabled it for now. Will probably switch to a theme in the future that is responsive to mobile.

  134. Looks like Tectoria’s bloom could be ending soon as Silicon Valley is showing cracks. Start up valuations down on some almost 50% overnight. With the surge in high end condo building here I see similarities that could be the catalyst as with all booms and busts.

    These 2 things will pop the housing bubbles in San Francisco and Silicon Valley

    “Venture capital is getting nervous. And the flood of new money has become a trickle. As money dries up, startups have to tighten their belts and lower their burn rates in order to live another day. In the process, big hiring plans are shelved.”

    http://www.businessinsider.com/popping-housing-bubbles-in-san-francisco-and-silicon-valley-2016-2

  135. Don’t worry Hawk I’m not jumping to the 70’s on you where the average 5-yr mortgage rate rocketed over 20% by ’81 as Vic prices quadrupled.

  136. It is markets like these that make you realize how well a high end home can perform in a rising market and how much it can pay off as an investment given the tax exempt nature of the gains.

  137. “You’ll get confused if you’re going by memory since prices more than doubled between ’72 to ’74 as inflation took off”

    So you are predicting major inflation with zero mortgage rate rises Mike ? They can’t even move up rates a quarter point without international markets tanking into bear markets. I don’t see the logic as you jump from the early 70’s to the mid 80’s whenever you feel it justifies your theory.

  138. You can reach back further for Van (~’74) here…

    http://www.royallepage.ca/realestate/info-and-advice/market-reports-and-surveys/house-price-survey-historical-database/

    I’ve seen data all the way back to 1960 for Van (and Vic of course), but I’m not sure on the reliability pre-’75.

    CS, like I said you have to remember that Vic lags Van typically by at least a year and ’72, ’73 were crazy inflation years.
    You can see in the chart I posted below that Van has only held an average ~50% premium (range of about 40-60%) to Vic from ’78 to ’10 (over 30yrs). My guess is Vic now plays catch up to restore that historical spread.

  139. Again LeoM? You haven’t been right in ages. Point is if they are coming on masse, then they haven’t done their homework that most of the HAM aren’t staying here, just leaving their houses empty, or here for a coffee pit stop.

    Sales internationally reflects whose spending the big cash and it’s in a major decline. Just because Vancouver has a hot mall, that’s always been hot, doesn’t mean every high end store will survive. Rich Asians have been coming here for decades and Robson St churns high end businesses over and over like clockwork.

    BTW, DeBeers flooding their mine in NWT is very telling on the direction of the diamond bizz and big spenders. Otherwise they could sell direct to the rich HAM on personal tours to hand pick their own rough stones as in the past.

  140. Here’s the REB data Leo in chart form that I’m using to determine the ~50% historical spread Vic vs Van.

    I believe the widening spread since ~2010 was to do with, among others, currency exchange & US home prices. Now that these have reversed, I’m guessing Vic closes the gap with Van again. But of course like you hinted at Leo, we could also return to our ‘normal’ spread by Van dropping.

  141. @ Michael

    You’ll get confused if you’re going by memory since prices more than doubled between ’72 to ’74 as inflation took off

    I’m not confused about the data I cited (you, I notice, cite nothing but vague generalities).

    When we moved to Victoria, prices in Vancouver Point Grey had just increased from $16 K to $32 K for a shack on a 33 foot lot. At that time, a 50 foot lot on Victoria Avenue in Oak Bay was valued at $8,000, i.e., a four to one ratio between Point Grey and Oak Bay, precisely the same as it is today.

  142. You missed the point again Hawk; it’s not important that their global earning are down this year, the point is that the luxury brands are coming to Vancouver en masse.

    The other point you missed is that the global sales decline of luxury brands did not happen in Vancouver. Here’s a quote you missed in the article:

    “Word is out that downtown Vancouver can support luxury retail, Negris said. A recent report from Retail Insider showed Pacific Centre topped the list of Canada’s most prized malls, with annual sales of $1,498 per-square-foot. Industry chatter indicates the nearby Pacific Centre mall may have one of the highest sales-per-square-foot figures in North America.”

  143. “I am seeing homes in the core bought 2-3 years ago, with zero work done, selling for 50-300k (depending on price range) more which puts those individuals ahead even with commissions/PTT factored in.”

    I saw people buying in the late winter of 81 paying double the price of a few years before have their ass handed to them on a silver platter, as the meltdown slowly began that spring eventually down upwards of 50% a year or two later. It’s called timing the markets, some can do it well, and the greater fools who get caught in the hype and myth of “being priced out forever” can’t. It’s that simple. There are indeed winners and losers, the winners are selling now, the losers are paying $50K to $300K over and risk losing a lifetime of financial freedom.

  144. It is getting to the point where people who made poor decisions, sometimes impulsive, in terms of purchases (bought the wrong type of home, wrong location for them, etc.) from 2011-2014 are now better off than those who have been indecisive and waiting for the perfect home. I am seeing homes in the core bought 2-3 years ago, with zero work done, selling for 50-300k (depending on price range) more which puts those individuals ahead even with commissions/PTT factored in.

  145. Over ask of the day for Saturday, February 27th….

    3985 Telegraph Bay listed for $925,000 and sold for $1,012,000.

    and over ask of the day for Sunday, February 28th

    1460 Grant St listed for $635,000 and sold for $752,500

    SPECIAL NOTE on this one, google the address and take a look at the listing brokerage (I can’t for some reason mention broker names)

    Yet, 98% of the population can’t do 5 minutes of analytical/research thinking to save $15k.

    I guess I shouldn’t be complaining as the 98% of consumers keep my competition pretty much non-existent. Essentially no point for anyone out there to spread their wings into the remaining 2% market share.

  146. LeoM,

    DeBeers sales have tanked 40% last quarter and Tiffany’s as well as per their 30% plus drop in share price. It’s common knowledge that with diamond prices falling to 6 year lows and the world entering a global slowdown the central banks can’t control, that sales in high end goods are in the crapper. Look at Soetheby’s share price down 50%.

    The Asians prefer the large stones too which are harder to come by (and are usually back room deals),but DeBeers just dropped their prices again as India,which is half their customer base, is cutting back recognizing the rich have slowed down buying expensive items as China collapses.

    Just another “good news” article that come out at market tops. Man we aren’t even out of February and the bulls are predicting summer to be just as hot with 75% gains coming down the road. Another sign to tread carefully.

  147. Summer will only get stronger. Low MOI. Lots of buyers.
    Who knows if the market is going to correct. The trend is your friend and prices are going higher. So if you are on the fence:

    1/ 12-24 months of waiting @ opportunity of capital OR
    2/ pull the trigger with 10% downside if crap hits the fan

    Good luck fellow HH

  148. @sweethome, I’ve seen you post about being able to afford up to almost 900k for years now, and saying how the market keeps going up and you need a home. Why still delay a purchase? Why wait for years and years and turn down homes you say you would jump on today so fast but at the time didn’t like them enough to buy them?

    Each month that goes by a nice house at 800-900k is rising up in cost by 9,000-12,000 per month.

    The longer you wait the less you can buy, unless you are ok with a new build at Westshore langferd. Seriously nothing wrong with that. Anything under 1.4 in the good areas you want to live in will be a crappy old house in need of a big Reno $$$.

  149. Michael, can you cite any data to support that contention? When we moved from Vancouver to Victoria (1972, 3 or 4, I forget), the spread was much wider.

    You’ll get confused if you’re going by memory since prices more than doubled between ’72 to ’74 as inflation took off (and Vic always lags Van). Just pull up the reb data and you’ll see the spread, for as far back as the data goes (70s), averages only a 50% premium until ~2010. Since then it’s grown to about 160%.

  150. Surprised to see 1215 Duke and 4938 Lochside still in the market for more than a couple of weeks. Both places I’d consider buying; great locations, in their own way (I’m a sucker for an awesome bike commute route!). Absolutely nfi in either, just places I think would make great family homes.

    Just Jack- I’m not sure how to put this, but your statistics knowledge leaves something to be desired. The monthly stats, particularly if you’re only looking at the core sfh market, is waaaay too thin to be detecting multiple modes and making a big deal out of the tails. The market has not been swinging around wildly for 4 months; it’s been showing the usual variability within that time period. Not everything swings from boom to bust to boom on a weekly basis.

  151. I have my MLS search filter set for up to $900K, although this is somewhat above what I would actually spend. Sometimes for fun I change it to unlimited and pretend I’ve won the lottery, but the houses that catch my eye then are usually over $2 million.

    What surprised me is that when I changed the filter and looked at the $1 – 1.5 million range, the selection of houses in the “nice” areas was quite disappointing. I guess the “middle class” keeps getting poorer everyday.

    So, I can kind of see your point @VicInvestor1983. I guess every potential buyer is wondering now how much they should extend themselves. I can say that after following the Victoria house market for more than 10 years and keeping current on economic issues, I can’t predict where this market will be 5 years from now. I still need a house, though, so I am not sitting out yet. I will just have to settle and try not to think about what I could have bought in the past. It could be worse.

  152. @SweetHome: we are young, yes. but not exactly 1983 lol. This is our first detached, though we own a condo. No debt & some savings. I agree with you re: asset allocation & diversification. Putting all eggs in one basket is a very bad idea, though 100% RE in Vancouver has seen monstrous gains. We were initially looking for a modest house but nothing good can be found in desirable areas (Oak Bay, Rockland, Fairfield, et) for <1 million. I mean Lafayette or Island Rd weren’t super luxury homes & they went for 1.61 & 1.41, respectively.

    @CS: CMHC report of Victoria’s RE definitely suggests lower demand than Vancouver but we’re now seeing international & Vancouver buyers rushing into the Victoria market given its ‘value’. In an earlier posting, it was suggested that we’ve had 1.1% growth here since 2008. This is below inflation, which suggests that the market here has not turned into the dangerous bubble some other cities have. Our dt condo was purchased in 2006 at the same price we bought it in 2014. My parents’ condo in Vancouver has more than doubled since they bought in 2005 ($180 –> $425).

  153. It really is a bit different this time Hawk, despite all your negative banter. Times change and the wealthy immigrant jet-setters who were encouraged and invited by the Harper government are here and they are buying and that is unlikely to abruptly change anytime soon. Checkout the immigration statistics; prior to about 1992 the average new immigrants to Canada was about 100,000 per year but for the past 15+ years the average is about 250,000 per year. The new immigrants love to spend their money, not just on real estate.

    http://www.vancouversun.com/touch/story.html?id=11747944

  154. One way to compare Vic & Van is through their price spread. Historically Van has only averaged a 50% premium to Vic over the decades

    Michael, can you cite any data to support that contention? When we moved from Vancouver to Victoria (1972, 3 or 4, I forget), the spread was much wider. For example, a 33 foot lot with a shack in Point Grey could be had for $32,000 (i.e., lot value), whereas a 50 foot lot in Oak Bay cost $8,000, a ratio of four to one, about the same as today, i.e., $2.5 million in Point Grey versus $600,000 in Oak Bay.

  155. At least Victoria has been listed as the least overvalued market by CMHC. That gives me some confidence if I were to buy now.

    I don’t follow your line of thinking. If Victoria’s market is least overvalued, then that means there is, relatively speaking, a lack of demand, which if the lack of demand persists? Could that not mean poor performance in the future, especially if market conditions turn adverse?

  156. @VicInvestor1983: I wish I had your problems! Maybe your name indicates when you were born, so you are young and don’t have a lot of savings, but I don’t quite see how a $500K income should cause any problem buying a house in Victoria. All I can say is if you are buying your first house for personal use, don’t hold out for your “dream home” right away. “Settle” (size, area, age of house), buy something truly affordable, and that way you hedge your bets either way the market goes. I wish I had done that 10 years ago, then I would have a perfectly comfortable $900K house in Oak Bay or Fairfield for which I paid $450K. Instead I am still renting and, though I can afford more that $450K, I can’t afford $900K. If you are talking about buying additional property as an investment, well that’s a whole different story.

  157. There has never been a worst time in Victoria to be a bear no question.

    What is the point of a remark like that? It is a prediction about the future. But who’s to say now, that the market is more likely to go up than down between now and December 31?

    Since no one actually knows, one might as well say the chances are even — unless he has a reason why things are more likely to go one way than the other. But Bearkilla never seems to have an argument, just an aggressive assertion stated with apparent contempt for any who disagree.

  158. Every real estate market is just about to crash for a bear. The number 1 trait of a real estate bear is being wrong year after year and this year is probably the mother of all years in terms of being wrong.There has never been a worst time in Victoria to be a bear no question.

  159. So merely to restore their historical spread, Vic would have to see a further ~75% upside.

    Or maybe the other thing could happen to restore the balance.

  160. Mike , why do you think Vancouver’s price spread has increased since like ten years ago ? Economics,population and out of control foreign investment maybe ? You’ve been spending too much time at the dispensary if you can’t see the difference. There is no catch up in a city with no industrial job growth, just mainly low paid service industry jobs.

  161. Supply = inventory. You said nothing about land availability.

    Creepy ? [Personal attack removed. Keep it civil please – mod] I could give two craps where you live. You were the one predicting your Red Barn hood value increasing then misstating you live in Oak Bay. It’s called credibility and there seems to be none.

  162. One way to compare Vic & Van is through their price spread. Historically Van has only averaged a 50% premium to Vic over the decades, whereas lately that premium has been stretched out to ~160%.
    So merely to restore their historical spread, Vic would have to see a further ~75% upside. More of course, as Van continues climbing. Methinks we’ll soon see a period where Vic outperforms Van.

  163. @totoro

    Red Barn is within two blocks of Oak Bay and there is no manned border.

    Maybe they should build a wall… When Trump loses in the states he can run in Oak Bay.

    @VicInvestor1983

    Once they flood the small inventory here, we’re screwed… We make a very strong professional household income (>500k/year)

    Methinks you’re being a bit too conservative here.

  164. The limited supply comment is was in reference to the lack of land availability in the core for additional SFHs, not the amount for sale at any one time which can vary a little in different markets but I haven’t observed an abundance of houses for sale in the core in the time I’ve been following the market. As for where I am, that is a bit creepy. You’ll have to just come to your own conclusions.

  165. “Who said inventory will never rise again? ”

    Umm, you said it.

    “My take is that there is a limited supply of SF housing in the core of Victoria and this won’t change.”

    Didn’t need a thesis, just a yes or a no wether you live in Oak Bay or in Victoria as per municipal boundaries. There is a difference wether you actually live in Oak Bay or you’re just an Oak Bay wannabe. The answer seems to be the latter.

  166. The dividing line between OB and Victoria is Foul Bay Road. Red Barn is within two blocks of Oak Bay and there is no manned border.

    I’d consider anything walkable within 20 minutes my neighbourhood whether it is in OB or Victoria. Not sure what difference it makes otherwise except you may get to use the OB municipal yard and OB has a slightly lower tax rate. I also shop at Fairways. I don’t like Superstore but used to go when it was Safeway. Also by foot. And regularly go for coffee at the marina, on foot. This whole area is great for that.

    Who said inventory will never rise again? I have no idea why you insist on colouring only in black and white as if people have to pick some side instead of merely observing what is happening in the moment and deciding what you want to do. This is not a winner vs. loser thing – you are the one who gets to make the decision about your buying choices and someone else’s choices are what they get to live in and with them. So what. Pick up another crayon.

    Of course real estate is cyclical – inventory will rise and fall as we’ve seen in the lifetime of this blog. Overall the only thing that has been predictable for the core in the past is that prices will go up over time. You are not going to be a magical winner in timing the market because, guess what, it is not a competition. If you buy when you can afford it great. If you don’t great. If you buy when prices drop even better. If it never happens and you can’t afford what you want you can make alternate choices and life will carry on.

  167. Inventory in core will never go back up to previous levels ? More BS . It’s a short term event that happens at every market peak as historical charts show. When the tide turns the sellers will show up in the hundreds. Irrational exuberance is fleeting.

    BTW totoro I thought you said you lived by the Red Barn, that is in Victoria not Oak Bay.

  168. Well, there are always going to be people who time the market well and make a lot flipping – but not that many of them. You need to be at the right place in life and have significant credit and equity to do this and the vast majority of people are not in that situation or don’t want to take risks with their capital. The few that are will do well as long as the market rises and they pay their taxes correctly. In the 80s it seems that many of the folks who were investing this way were RE agents and many of them got caught in the downturn. Be hard to resist the get rich quick allure as a realtor exposed to rising prices!

    I don’t think the stats currently support a large influx of foreign money into Victoria real estate. We just had a post on this recently that linked the data. Not sure if that has suddenly changed. There has been a small increase in people from Vancouver buying here.

    My take is that there is a limited supply of SF housing in the core of Victoria and this won’t change. There will always be buyers interested in living in this area and even as prices rise there will be motivation to try to buy. Parents may be asked to help. Suites will become even more popular. There will be a risk of interest rate hikes impacting affordability, but perhaps government intervention will temper this risk.

    If your family is making over $500k a year with income stability you are in a better position than flippers long-term imo. You can afford a very nice house in Oak Bay and your professional designations likely mean you aren’t at great risk of a downturn.

  169. Totoro, you’re right we can’t compare Victoria to Van & that prices in Oak Bay are outta reach for majority of working population, but we’re dealing with decoupling of housing market & local market fundamentals. Foreigners & house rich vancouverites are price insensitive. Once they flood the small inventory here, we’re screwed. CIBC told me last week that there has been a big uptick in foreign activity in the last 12 months. We make a very strong professional household income (>500k/year) but flippers are making that in Van off one house!!! Market has gone mad. By local fundamentals, we’re in a massive bubble but with foreigners in the picture, this isn’t a bubble.

  170. 100k for a reno? I don’t think so. On a $1.61 million house you would be dropping at least 50k+ on the kitchen alone. (cabinets, counters, appliances, backsplash, flooring, sink, faucet, hoodfan/venting, lighting, electric and plumbing rough-ins/modifications, etc….)

  171. We could compare anywhere else in BC walking distance to the beach with Kitsilano and it would be a bargain. Oak Bay is not Kitsilano and comparing them makes no sense imo. We could say it is noteworthy that you can buy a fancy house on the ocean up island for a 1.6 million. Just not the same market.

    Oak Bay is not in any way a bargain for the vast majority of Victoria people who aren’t cashing out a Kits house to buy here.

    The part that is tricky is that maybe a million will seem cheap in five years comparing prices in Victoria itself. I remember when we bought in Oak Bay ten years ago we thought pushing up against $400k was excessive. Prices appear to have doubled on some Oak Bay homes since then. I don’t know any low risk investment that would have given that type of tax free return on the down payment amount of a home.

    And then we can look farther back to the big crash in Vancouver in the 80s.

  172. The Laws of Supply and Demand are all that you need.

    Yeah, except that the balance shifts, due to change in the factors that determine supply and demand, so if you’re looking for trends or changes in direction, you have to look beyond current supply and current demand.

  173. Noteworthy that the Kitsilano house only went ~20% over list (4.3M) …Lafayette 26% over list. Similar distance to the beach, yet you get 3x the land with Lafayette for nearly a third of the price.

  174. This is a market to run the other way from. I would imagine shell companies are now heading into Victoria as well. Who would pay $400K over with a reno needed of 100K ? Only greater fools would jump into this insanity and will get burnt severely.

    All Canadians are paying the price for ‘conceal’ estate in Toronto and Vancouver

    “Using the New York metric, a good guess would be that offshore shells bought half of all the high-priced condos in Vancouver and Toronto. But nobody knows — and that’s the problem.

    The lack of transparency is a major global economic risk, according to the G7, United Nations and the Organization for Economic Cooperation and Development. This is because hot money is destabilizing countries that are being abused, and creating real estate bubbles in destination countries. The lack of transparency also enables the spread of terrorism, criminality and tax evasion globally.”

    http://business.financialpost.com/diane-francis/all-canadians-are-paying-the-price-for-conceal-estate-in-toronto-and-vancouver

  175. If you have decided to buy in Oak Bay and want a house that is larger and/or updated you are looking at north of a million. I can understand a sense of urgency about it if you can currently afford a nice home in the neighbourhood you have chosen, but if prices go up much more you won’t be able to. Of course there are always other choices and this is a first world problem but it does show why a rising market can gather momentum.

    In Oak Bay a million is starting to look like a good deal for a nice-ish family home.

  176. Ideally, I shouldn’t buy a house right now due to life circumstances … We looked @ Lafayette & are shocked it sold for that price!

    That’s a heck of an all or nothing choice there. Either don’t buy or buy a house well north of $1M?

  177. Ideally, I shouldn’t buy a house right now due to life circumstances but the recent price appreciation is making me nervous that the Vancouver tsunami has finally arrived! We looked @ Lafayette & are shocked it sold for that price! The house needed min $100k of work so you’d be in for min 1.7. Crazy. I’m panicking a bit for sure! Would I be the ‘greater fool’ for rushing in or is this market sustainable? Who knows. Good luck to us hoping to find a house.

  178. In Victoria almost everything is negative cash flow with 20% down. It is not a great rental market until prices appreciate.

  179. Yeah, I graphed it but I don’t know how to copy it onto the blog.

    Here:

    I cant say I notice anything different about the sales distribution. With the low numbers in 2016 its hard to tell how much is noise

  180. Recent deals on some key Vancouver properties at astronomical prices have politicians, planners, and the B.C. Securities Commission concerned about the level of speculation, misrepresentation or plain ignorance emerging.

    City officials see signs that Vancouver’s hot housing market is enticing buyers to pay inflated prices without getting complete information on how demanding the rezoning process is.

    And they’ve also become alarmed recently at news that a new type of venture – real-estate crowdfunding – is being marketed without giving investors a picture of all the costs, hurdles and perhaps outright rejection that a development rezoning may encounter.

    For its part, the B.C. Securities Commission is investigating the activities of two local companies that appear to be crowdfunding real-estate deals.

    Source: The Globe and Mail February 1, 2016

  181. don’t really get the numbers behind some of the purchases. A few I’ve seen are definitely negative cash flow at 20% down.

    Maybe it’s the same people that think buying a $4M home is smart because they could rent the upstairs for $4000

  182. Back in October 2015, I noticed how the graph of house prices was being distorted from the historical symmetric bell shape curve. So far this year the graph has developed three distinct modes at $650,000; $900,000 and $1,250,000. This makes a very pronounced fat tail distribution to the graph for detached housing in the core.

    Sold Price Sales, Number of
    $0 – 200 1
    $200 – 300
    $300 – 400 12
    $400 – 500 35
    $500 – 600 61
    $600 – 700 61
    $700 – 800 35
    $800 – 900 33
    $900 – 1,000 20
    $1,000 – 1,250 21
    $1,250 – 1,500 13
    $1,500+ 15

    As compared to the normal distribution over the last decade of data

    Sold Price Sales, Number of
    $0 – 200 3
    $200 – 300 125
    $300 – 400 1799
    $400 – 500 4485
    $500 – 600 5028
    $600 – 700 3431
    $700 – 800 2010
    $800 – 900 1088
    $900 – 1,000 547
    $1,000 – 1,250 634
    $1,250 – 1,500 357
    $1,500+ 485

    https://youtu.be/OdA27-ap99s

  183. I’ve seen people lately buy condos and put them up for rent on usedvic/craigslist before the completion date……..don’t really get the numbers behind some of the purchases. A few I’ve seen are definitely negative cash flow at 20% down. It is like people are buying on speculation hoping the market continues to soar.

  184. Seen a few of these buy then rent actions happen lately. The crazy thing is when you go onto Air BnB and see huge mansions for rent! As in full mansions so they are empty being rented short term. Perhaps there is more money in that for some of these mansions?

  185. Curious Cat:

    A lot of “New to Canada” mortgages require 50% downpayment. Consider it a built in safety measure by the Canadian banks to shield themselves from the potential of “investor flight” from markets like Vancouver.

  186. My friend who just sold her house, previously had an offer in December from Asian buyers living in Vancouver. They arrived to the showing in a van with their friends/family (my friend was parked down the street, watching, and she couldn’t believe it when 6 people climbed out). They were very difficult, demanding that she kick out her tenant because they wanted to re-rent it for a higher amount, wanting a second inspection the day before possession, asked for an extension on the offer, etc. The deal actually fell through because they said the bank required a 50% downpayment as they were not Canadian and they only wanted to put down 20%. Anyone else heard of Cdn banks requiring larger downpayments for non-citizens/residents?

  187. If there was a psychological trait that you might assign to a corporation,such as a bank, it is that of a Sociopath.

    Canadian banks are not ingenious leaders they simply follow the herd. If there is money to be made they will exploit that option even if it is sure to lead to folly. The directors have to maximize profit for their shareholders or the directors will lose their jobs. So they will follow this market into the ground. It is near impossible to determine how risky it is to lend to foreign nationals in Canada until the foreigners start to default on their mortgages. Up until then this type of lending is profitable.

    While there is a potentially huge chance of never being able to recover funds from a foreigner living in a different country, they will still do it because the other banks are doing it and it makes money today. Later on, they’ll write off the losses and tighten up on lending practices which will only drive the market lower.

    The can’t help themselves – it’s in their nature.

    https://youtu.be/8x525Tk7KpI

  188. What gets me about all this hot foreign money paying $700K over, is how many are taking out mortgages with Canadian banks ? How can the banks believe a single word these so called “businessmen” say about their financial status when it’s the biggest joke going that China’s numbers all bogus ?

    What does that say about all the boasting about conservative Canadian banks when they lend out money to liars ? No wonder our banks are being shorted large.

    “In January data released last week, the Chinese central bank omitted or hid one key number and altered the parameters of another that gave insight into what the central and commercial banks were doing to prop up the country’s currency.”

    “Ms. Stevenson-Yang, of J Capital Research, said she and her colleagues had seen growing discrepancies in official data in the last two years in a variety of sectors, including retail, shipping and steel production. She said a colleague had once called a Chinese cement factory to ask for production data, and a factory employee had thought the researcher was calling from a government-affiliated research association. The employee told the researcher that the factory had already changed its numbers twice and would rather not do it again, so the researcher could choose any number that fit.”

    “When you go around and meet state-owned industry people, everybody laughs at the national statistics, so I don’t know why foreigners believe them,” Ms. Stevenson-Yang said.”

    http://www.nytimes.com/2016/02/26/business/international/china-data-slowing-economy.html

    Meanwhile RBC jacks up mortgage lending levels to foreigners.

    “We’re seeing a lot of affluent newcomers looking to buy high-purchase price homes,” Christine Shisler, RBC’s director of multicultural markets, told Reuters. “Now we can actually service any mortgage amount.”

    Shisler said the bank removed its internal $1.25 million mortgage limit for buyers who have no Canadian credit history in May.

    According to Reuters, a case study was released Monday that found two-third of buyers in neighbourhoods around the University of British Columbia had names typical of those from mainland China. 88% of those also had a mortgage.

    And the big banks are the ones serving that market.

    The mortgages in that study ranged from $1.25 million to over $9 million. They were predominantly backed by HSBC, CIBC, and BMO. For its part, RBC originated 8% of those loans.”

    http://www.mortgagebrokernews.ca/news/rbc-does-away-with-mortgage-limits-for-foreigners-198845.aspx

  189. Now that detached listings are returning to the market where are we?

    282 active listings in the core
    207 sales in the core over the last 31 days (offset 7 days)
    314 New Listings over the last 31 days (offset 1 day)
    Median market exposure at 13 days on the market
    Median Price $662,000 or $298 per finished square foot for the last 31 days
    Median Price $655,500 or $307 per finished square foot for January
    Median Price $597,500 or $278 per finished square foot in February 2015
    Median Price peaked at $677,250 in October 2015
    Sales of houses in the core were 164 in February 2015
    Sales of houses in the core were 122 in January 2016
    Median Sales to Assessment Ratio over the last 31 days is 116%
    Median Sales to Assessment Ratio in January 114.25%
    Median Sales to Assessment Ratio in February 2015 was 105%

    Months of Inventory 1.36
    New Listings to Sales Ratio 1.5:1
    DOM= 13
    Sale Volume up 26%
    Median MoM price up 1 percent
    Median Y0Y price up 10.8%
    Median SAR MoM up 1.5% (closest I can get to an HP Index)
    Median SAR YoY up 10.5%

    It still sucks being a prospective purchaser but the good news is that New Listings to Sales ratio has improved when there was only 1 new listing for every sale and also property values for most of the market are not changing significantly from one month to the next.

    However, it will take some time before we see the months of inventory start to move back towards a balance between buyers and sellers as well as the DOM over 30 days. The market remains strongly in favor of sellers which has pushed month over month prices higher by 1 to 1.5%.

  190. The Laws of Supply and Demand are all that you need. You have a few bulls that consider themselves as master baiters, pitted against 250 years of proven economic theory.

  191. Re: BullSplat

    Sorry, I was just doing a bit of bull-bashing to redress the balance. I did not intend to question the moderating.

    When I’ve figured it out, I’ll return with an entirely rational destruction of the Bull case.

  192. I could easily re-classify what I’m doing these days as tech rather than a service industry. Since the work is running models without performing physical inspections of properties. I no longer have to live in Victoria to do this consulting. Which means I could be skiing this morning rather than de-mossing the lawn.

  193. I thought this blog aimed at rational discourse and analysis, not bear-baiting. But it seems I was wrong.

    This is a fine balance to strike. So far I’ve erred on the side of not moderating unless there are significant personal attacks, unsolicited promotion (spam), or people posting under multiple names. I’d rather not get into trying to judge whether a comment is productive or not. Like anywhere on the internet, HHV will require a thick skin.

  194. It’s at market peaks when you see articles like those pumping the virtues that their city is being “discovered” by major players who have never heard of Victoria, or outsiders with cash from big cities are moving in. Especially articles by real estate agents and politicians. I’m sure if you dug back to 2008 you would read the same stuff.

    Microsoft came, and closed up shop within 2 years. What happens when the tech market eventually tanks and funds dry up as in the past ? Very vulnerable relying on a volatile industry for business and employment growth.

    http://www.engadget.com/2013/12/05/microsoft-closes-victoria-studio-moves-development-to-vancouver/

  195. @ BearKilla:

    It just keeps getting worse and worse for bears

    I thought this blog aimed at rational discourse and analysis, not bear-baiting. But it seems I was wrong.

  196. Peak pricing by agents might also slow down sales activity. Peak pricing being when an agent looks at the last price paid and adds X percent to the new listing price.

    I think we need a lot more inventory to be added before we’ll see some areas move from the extreme end of the bid/sale range to a more balanced position where bidding wars won’t work as a marketing scheme. And I think that will be good for the market.

    If a market segment is too dominated by auctions, that marketing practice can back fire on the seller. Most buyers rely heavily on the asking price as being a reasonable indication of the property’s worth. If they loose confidence in the pricing system then they would stop bidding altogether.

    That may have happened with two of the auctions that I’ve been watching. Both were under listed and I anticipated the selling prices to be some $75,000 over asking price. Instead the auction resulted in prices $50,000 over asking price.

    In my opinion, if the seller had listed close to market value then they would have received a higher sale price.

    Auctions can backfire on the seller too!

  197. Only in the last week have I noticed inventory start to increase. In the City proper we have had around 35 listings since the beginning of the year. Now we are up to 41.

    Oak Bay hasn’t changed much and is still in the low 30’s

    But the big gain is in Saanich East. Most of this year had listings at around 85. Now we are at 116 house listings.

  198. It just keeps getting worse and worse for bears. I almost feel sorry for them at this point. ALMOST but not really.

  199. We have always had mainlanders buying on the island. The number of lower mainlanders buying in Greater Victoria nearly doubled in 2015 over the previous years.

    In 2015 there were 325 buyers from the lower mainland as compared to 205 from the year before. Typically the number of buyers from the mainland is between 150 to 200 per year.

    Since most on the blog are only interested in houses in the core the number increased from 68 purchases to 120 in 2015. And 38 of those purchases in 2015 were for properties in excess of $900,000 but most or 82 or them fell in the same price ranges as homes bought by Victorians.

    Is it something prospective purchasers should worry about? For some it may well be, but they might also be worried if it were Blacks, Gays or Chinese moving here too. Does it really mater where the buyers are from or who they are?

    https://youtu.be/sZ_uCUcoFwo

  200. Except you really need to subtract a huge portion of the numbers they provide. Anyone know what the BC Government spends on technology services in Victoria? More than a billion I bet and this makes the government the economic driver not these tech providers that often work on 10-20 year old technology.

    Not them mention they count Viking Air which any manufacturing study would also include in their numbers…double counting all around.

    just trying to add a little honesty to these impact studies (which I have written in my distant past).

  201. Sounds like Vancouverites and retirees are becoming a larger share of our buyers.

    The most recent statistics from the VREB show that about 7.5 per cent of Victoria buyers now come from the Lower Mainland…

    http://www.vicnews.com/business/370127071.html

    “I’ve had buyers from Calgary who are simply choosing to make the jump to retirement or relocation now…they aren’t willing to wait for things there to turn around.”

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