What was going on in 1991?

We know its crazy right now, but even with this insane level of market activity, we are just barely breaking the previous records set in 1992.  We’ll see what the final March numbers bring, but we probably won’t be miles above the 959 sales in March of 1991.   So we’ll set an all time record, but Victoria was quite different a quarter century ago so it makes little sense to compare just the sales numbers.

Here’s what has happened to Victoria’s population since 1986.  We now have 37% more people than in 1986, and 23% more than 1991.

popchange

This was going to be a graph of just the population, but then I decided to add the change in population year to year, which immediately gives us one clue that could be behind the sales frenzy in 1990, 1991, and 1992.   I was in grade school back then, so anyone here remember why population growth was so strong in the early 1990s and thus sales off the charts?   Were they building out the West Shore back then?

It makes sense to examine sales, inventory, and new listings relative to the population at the time.   Here are those factors not adjusted for population.

And here they are taking into account population growth in Victoria.

(If the graph above doesn’t show population adjusted numbers, do a CTRL-R on your browser to force refresh).

So we see that the rate of new listings is pretty low right now, and while sales are high, they are not as high as they have been in the past.  Will be interesting to see if this March can outpace even the inflation adjusted numbers from 25 years ago.

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100 thoughts on “What was going on in 1991?

  1. Keep in mind though that universities will also be obsolete soon…..or at least radically changed. On line education is the future. Kids are already doing it. And yet the university of Victoria for example still does not even allow students to record the lectures….even when the student has a learning disability. That is how out of touch and backward thinking they are. My daughter is signed up online with Athabasca university and is almost got her masters degree. The system is not there yet though. But I think it will be.
    I agree with you that people will still want to be close to a hub with access to airports etc. But my point is that I believe that our cities are going to change radically. They will shrink down as people can live on the edges.
    I could be wrong of course!!!

  2. “Because a lot of people still have to be close to transportation hubs (eg., airport, ferries to Vancouver/US), major medical facilities, universities for their kids, availability of jobs for their whole family, sports, etc.”

    …not if you have a drone….

  3. @Hawk

    The BIS is always, always bearish. Most people in finance just ignore them. Of course they will be right occasionally (see: broken clocks).

  4. For those who don’t educate themselves or just keep the blinders on tight, this is the real shit that caused the 2008 crash, not “doom and gloom” BS the agent(s) and bulls here want you to believe.

    ICYMI, credit squeezes causes banks to shut down lending for mortgages and businesses resulting in mass layoffs.

    Next global credit squeeze looming: Bank for International Settlements

    “Notwithstanding the recent reprieve from the bond sell-off, evidence is mounting of dark forces lurking in global credit markets, the Bank for International Settlements has warned.

    While markets have regained their composure lately, the past three months have seen credit conditions in much of the world at times deteriorate to levels typically reserved for recessions and crises.

    The BIS, which acts as an intermediary for the world’s central banks, has long been warning that cheap credit has encouraged risky borrowing and lending, sowing the seeds of the next credit squeeze.”

    http://www.theglobeandmail.com/globe-investor/next-global-credit-squeeze-looming-bank-for-international-settlements/article29042839/

  5. The actions of a handful of agencies has led to the destabilization of the Oak Bay residential market. While the volume of sales in the core has increased 28 percent from last year, in Oak Bay the auctions have led to the elimination of an entire economic class of buyers that were buying at the $700,000 range last year. The number of buyers has stagnated, at last years level, but prices are now at the $1,250,000 price range.

    The low level of listings has allowed a few opportunistic firms to exploit the market with skulduggery tactics. We should have new laws in BC to protect consumers from these selling tactics. We need a real estate fair pricing policy in BC and compensation paid to the victims of what would be in any other industry an activity in violation of the Business Practices and Consumer Protection Act.

    There should be special regulations governing auctions that all bids are made known to all bidders during the auction.

  6. Actually….. the areas such as Esquimalt etc are being bought up rapidly as well. An old house there (Needed work and major updating) just sold for one hundred thousand dollars “more” than the asking price. One was fifty thousand over the asking price. It seems that Langford and Sooke are the only places where it is a bit slower. But even there…I notice that the New houses with a legal suite in Sooke are going for $435,000.00 where as a year ago…. you could get one with a suite for $375,000.00
    The builders were more hungry back then and now there is more demand and so they are looking for more return instead of just keeping their crews working. It is a change that I think has gone unobserved. But it is an important change non the less.
    I agree though that people should be looking a bit further out or at least in neighbourhoods that you might not normally have considered. There are some really cute little house in the gorge area for example. (But they are all being bought right away with multiple offers.)
    Sooke is an amazing little community and so is Langford. They will both benefit in a big way by the new plans for the overpass apparently.

  7. Happy Easter everyone!

    Agreed on the less desirable areas, I would be looking there. As humans we are very adaptable and I think most people will be surprised at how many places they could happily live in that they may have never considered up front.

  8. It seems to me like the craziness is concentrated in a few neighbourhoods. If you are a first time buyer why be looking there? Shoot I didn’t bother even back in 2003 Because the bank would only lend me 200k…. All those plane loads of hungry rich Vancouver buyers and their realtors aren’t shopping in ESQ or VR or VW….

  9. @freedom_2008 Thanks for posting that article. I think it is an extremely important piece highlighting so much that’s wrong and we aren’t doing anything to prevent these issues. I realize the article was written more as a ‘fluffy’ interest piece in their home & garden section and doesn’t go into detail but IMO is an excellent sociological overview of the mess we are creating. It shows the lack of interest in maintaining our heritage, the challenges (i.e. municipality hassles) of updating an older home versus rebuilding, vacant houses, difficulties in creating affordable housing and attracting workers in moderate-level paying positions. These are the tip of the iceberg issues that then lead to deeper issues such as money laundering, economic challenges for younger adults to have a family, economic inequality and associated health outcomes. These are the truly expensive issues!

    Our short term fear and greed is leading us into some hefty long term problems. I dropped into an open house yesterday that was literally crawling with people and overheard the realtor comment that coming in from Vancouver Saturday morning the flight was filled with people intending to purchase Victoria real estate. Three obvious points – why were so many people ‘crawling’ over a house that quite frankly was poorly maintained but lipstick looked good on this pig, the realtor was from Vancouver and had teamed up with one from Victoria, and thirdly, doesn’t this sound like some yellow helicopter story that I recall from a year or two ago? I’m a home owner so I’m gaining (on paper) too, but I also have children and their future is more important to me. Somehow we have lost a fundamental respect for our society’s future at the expense of ‘getting ahead’ quickly via the real estate market.

  10. Great statement admin: “Best we can do is make a somewhat informed choice that’s best for our own life.”

    So true. Everyone is so different. (ie. Love big yards! Hate big yards!)

    We just biked through Oak Bay neighbourhoods today & although the flowers smell great right now, I can’t imagine paying the hydro & property taxes on such big places where I have to drive anywhere for food & pay a gardener to maintain my yard. I find these differences in choice very interesting. Will be interesting to see how each generation is different in their preferences. Plus I can’t imagine Hydro is getting any cheaper? Nobody really knows what the future brings.

    Plan ahead & choose accordingly. To each his own!

  11. What was going on in 1991? Picture a sixteen-year-old Just Jack barking at his parents, “These Victoria house prices are ridiculous!”

  12. We went for two open houses for our friends who plan to move back to Canada and retire in Victoria (I also have referred Marko to them).

    One is 3170 Service, in good shape, but already had three offers on Friday at 2pm, after only 3 days on market, probably will go above asking (http://paulwhitney.ca/mylistings.html/details-55761573)

    The other one is 2646 Mt. Stephen, very nice mid century house with one bed suite, sunny garden and good view. It will probably go fast, too. http://www.vreb.org/property-details/362343

    Both would have been in the low to mid 600K range last year.

  13. To any fellow house-hunters out there (or Marko): how are things on the ground? Any change one way or the other?

    After my regret of not making an offer a couple of weeks ago, I haven’t seen anything worth looking at in person. I did notice that a house in Gordon Head and one in Broadmead from last week are still hanging around this week. I think they are priced too high, but maybe it’s a good sign for purchasers that there is at least a ceiling to price increases.

    I am hoping listings pick up next week after possibly slower weeks due to spring break and Easter.

  14. @Ash re: 1002 Karen Crescent. I also only looked at the pictures and did a Google maps “drive-by”. It’s not the best neighbourhood and the driveway slopes down into the house, so would have to check for water problems. However, for under $600K I agree it does not look bad.

  15. Vicbot,
    Multiply that case by the thousands that have been doing the same for years and you have a serious bubble about to detonate. Media attention will drive them to other countries which is step one of the crash and may cause them to start dumping at any time now.

    All you have to look at is their stock market and real estate markets to see how they flood markets then bail over night.

    Bulls can poo poo it all you want but the Vancouver media will not leave this alone ,this will be front page for a long time. Corruption is rampant and people are pissed off.

  16. More on mortgage fraud affecting the market …
    http://www.vancouversun.com/news/alleges+Metro+Vancouver+homes+were+part+scheme+launder+money+embezzled+China/10926774/story.html

    “Zhao’s numbered company bought the [Richmond and White Rock] properties outright. However, a few months later, it took out mortgages on both, totalling $1.1 million … a few weeks later Zhao and Qiao took money from their Canadian RBC account to pay for a Bellevue WA home.”

    “the money for the Metro home purchases came from an embezzlement scheme …”

  17. Thoughts on your points raised:
    (Risk is drastically higher. One thing goes wrong in your drone and you’re guaranteed dead. Software bug? Dead. Mechanical failure? Dead. Bird strike? Dead.)
    Yes. I agree. Risk is higher. But I don’t doubt they will factor that in and build redundancies into the design. Along with a parachute for the entire machine in case of catastrophic failure.

    (Regulation in aviation is far more complex and demanding than for road vehicles. There is no precedent for any flying machines not piloted by a licensed pilot and that will take a very long time to solve.)
    Yes. I agree. However ….factoring out the pilot and making them fly in a computer controlled environment should make it easier.

    (There is zero infrastructure for personal flying vehicles. Everything would have to be built from scratch.)
    Not much needed other than software solutions and a yard to rise up out of or into. Think about what they said about lack of roads etc when the car was invented.

    (There are no well defined paths so full autonomy will be more difficult to implement than on roads.
    Energy efficiency of personal drones will be terrible compared to vehicles. By the time 1-4 is solved we may not have the luxury to throw away that much energy for such frivolities.)
    Airplanes already follow well defined paths to some extent. Certainly this will be worked out quickly. But it will take some banging heads together to come up with a plan.
    The energy efficiency will be the main factor I would think that will hold things up for some time. But again….we are making leaps and bounds on new battery or power sources. It is a tough nut to crack though as you suggest.

    Good points though and certainly they will all need to be solved.

  18. 1002 Karen Crescent sells for 595k. Rare value in this market? Seems like a good deal going by just the pictures.

  19. “Then why bother with Victoria?”

    Because a lot of people still have to be close to transportation hubs (eg., airport, ferries to Vancouver/US), major medical facilities, universities for their kids, availability of jobs for their whole family, sports, etc.

    I moved back to Victoria for those reasons. One co-worker moved as far out as Nanaimo but had similar reasons for not moving further.

    Parksville is a nice place to retire, but it’s very hard to deal with driving/bussing to Victoria for regular cancer treatments or other major surgery. People have to factor that in when they get older.

  20. We have to keep an open mind and recognize that something unusual is going on here in Victoria.

    Agreed. If there’s one thing I’ve learned in the 5ish years I’ve been blogging about the market is that no one knows what will happen. Not realtors, not bloggers, not high priced economists. Best we can do is make a somewhat informed choice that’s best for our own life.

    But it is easy to get the thrust of the dramatic changes that are coming in the next five years

    I’m also interested in autonomous vehicles, and I think autonomous cars are going to be one of the biggest revolutions in our entire economy within the next 10-15 years. However I don’t think we are going to get to autonomous drones for personal transportation that quickly because:

    1. Risk is drastically higher. One thing goes wrong in your drone and you’re guaranteed dead. Software bug? Dead. Mechanical failure? Dead. Bird strike? Dead.
    2. Regulation in aviation is far more complex and demanding than for road vehicles. There is no precedent for any flying machines not piloted by a licensed pilot and that will take a very long time to solve.
    3. There is zero infrastructure for personal flying vehicles. Everything would have to be built from scratch.
    4. There are no well defined paths so full autonomy will be more difficult to implement than on roads.
    5. Energy efficiency of personal drones will be terrible compared to vehicles. By the time 1-4 is solved we may not have the luxury to throw away that much energy for such frivolities.
  21. A lot of people don’t need to physically commute anyway. They can telecommute and only go to Vancouver every few weeks.

    Then why bother with Victoria? Live in Parksville or on a gulf island for a third the price. If you telework you can go anywhere,

  22. What’s going on here is nothing more than easy credit and that’s the bottom line. Most deals are financed and when the catalyst hits then the taps are shut off. Just a matter of when, not if. It happens at the end of every 7 year cycle in the stock markets who rely on it to create wealth.

    The charts tell the tale, the credit cycle is ending and the bear is entering the room but your blinders are on too tight.

    This drone talk is just showing how stupid this bubble is and how close it’s getting to blowing up. $150K over for a POS bungalow ? Beam me up Scotty.

  23. What Deryk’s referring to started a while ago and will likely continue for years. Take 2695 Eastdowne Rd – 1200 ft, 1950 box, view of street & other warshacks, busy corner lot, halfway between Hillside mall & the ocean – assess 696k, ask 869k, sold 1,038,000.

    Historically, Van has only averaged a ~50% premium to Vic, but there were also times where Vic averaged more, so you can’t entirely rule that out from happening again.

    Regarding drones, I figure i’ll be taking one regularly to Canucks games within ten years.

  24. I like the tone of this discussion in general. I certainly don’t have a monopoly of knowing what the future will hold. But it is a good conversation and I like tossing around ideas. We have to keep an open mind and recognize that something unusual is going on here in Victoria. Real estate agents are saying that they have never seen anything like what is happening right now. Never!
    On the other subject…..Drone advances fascinate me. From all accounts I am reading,major advances show that we are just on the cusp of cracking the nut. I have been reading special reports that are used by city planners and these reports are being used to plan years ahead. I’m not sure if the city of Victoria subscribes to those reports or not but certainly the major cities like Vancouver do. I’ve only been able to read a summery of these reports because the full reports cost tens of thousands of dollars. But it is easy to get the thrust of the dramatic changes that are coming in the next five years. There are major changes coming… in how we move around our cities and surrounding communities.

  25. And what is one of the big values here? Besides ISIS no blowing shit up in your backyard, my son has asthma in Rotterdam and I have chronic bronchitis. Here in Victoria we do not…..

  26. I do agree that locals don’t see the value and that modern economics are less geographically anchored. I’m proof of both. I have run a business for more than a decade that is not reliant on being in Victoria. Case in point, I lived in the Netherlands for a year with the biz being uninterrupted. (I did keep the office in Vic). Then comming back I proceeded to buy a lot that once I build on would only be achievable in the EU by a multi multi multi millionaire….

  27. “That passenger drone was not operational. It was a model with a special FX video….”

    That’s why I said it was unveiled at the Consumer Electronics Show where new technical prototypes are unveiled.

    The point is, the technology is there, it’s a matter of implementation and regulation.

    Watch the flying hoverboard video with Catalin Alexandru Duru, or flying cars with Aeromobil. http://www.cbc.ca/news/technology/hoverboard-duru-1.3270569

    BUT, people are already telecommuting anyway, so I agree they don’t really need the vehicles.

  28. “Why not million dollar bungalows in langley and abbotsford and hope?”

    That’s what people used to say in Burnaby, until it happened.

    Funny our friends in Maple Ridge last month told us that houses were selling in 1 day in their neighbourhood, and one was a “rancher, that sold for over $800k, can you believe it??”

    As for drones: the autonomous passenger flying drone was shown off at the Consumer Electronics Show in Las Vegas in January by Chinese company EHang. EHang said it signifies a major turning point “transportation, shipping, medical care and retail.”
    http://www.cbc.ca/news/technology/worlds-1st-passenger-drone-unveiled-1.3393437

    A lot of people don’t need to physically commute anyway. They can telecommute and only go to Vancouver every few weeks.

    I don’t know the future, but the current trend is for people to move out of Vancouver because they can’t afford to buy or pay taxes on $5M shacks, so even if prices go down, people aren’t necessarily moving back.

    Even brand new $7M homes are being demolished – so much for Vancouver being “green”:
    http://www.ctvnews.ca/canada/a-perfectly-good-home-vancouver-councillor-protests-7m-tear-down-1.2759731

  29. Deryk, your point that just because a price seems high now doesn’t mean it can’t get higher is a good one. Vancouver is a great example of a place that has had by all measures completely irrational housing prices for two decades and yet so far it hasn’t crashed.
    Could it happen in Victoria? Certainly. But treating it as some kind of inevitability is also wrong. Just because it happened in Vancouver doesn’t say much about Victoria. Why not million dollar bungalows in langley and abbotsford and hope? In Nanaimo and Parksville and Courtney? After all it happened in Vancouver so it must be coming shortly everywhere else.

    As for drones. Dream on. Autonomous cars are coming in a huge way. Autonomous drones to carry people are not anytime soon (they may very well carry cargo though). If you knew a little bit about the technology you would see that.

  30. If the same shitty drivers here start flying drones then we’re all screwed. 😉 Google hasn’t even mastered the driverless car yet. Good luck George Jetson.

  31. Ha Ha…that is what they said in Vancouver when people were faced with the reality of one million dollar tiny bungalows. I’m sorry Hawk…but I completely disagree with your arguments.
    A one million dollar house is very affordable to someone with well over two million dollars in their pocket coming from Vancouver.
    Also: On the drone issue….You ignore the fact that drones already exist now. (Hyperloop technology will also come but it is meant for a totally different solution of moving people large distances. For example…..New York to LA).
    Arguing that drone technology will not change the shape of our cities is like those who believed that cars would not replace the horse and cart.
    Your position is quite the standard though. I happen to believe that there is a massive change coming that will change the shape of our cities because of autonomous cars and drones that can carry people. In the meantime…the norm is to keep building billion dollar rapid transit lines that will be obsolete before they are even paid for:)
    People will very shortly be flying above it all. Some are already flying in by helicopter to work from the fraser valley into Vancouver. Imagine what will happen as cheap drones that fly themselves do the same thing.

  32. My point is that we are so close geographically to Vancouver.

    Right, but the geography is irrelevant. If you work in Vancouver then what matters is the commute. Commuting on the ferry is not practical, so that leaves Harbour Air and the Helijet. Harbour Air will cost you $200/day to fly back and forth at the minimum. So you are saving on the mortgage, but paying an extra $4,200/month to commute.

    As for autonomous flying drones. They will likely never arrive, and if they do they are 50 years off.

  33. Just imagine when they build the hyperloop to Victoria or when we can just transport ourselves. 😉

    No one will live here in 2 years with million dollar bungalows. Lets get real bud, taxes would skyrocket, and bankruptcies would explode. Credit cycle is already in the last inning or two. Fantasy Island indeed.

  34. Yes….I actually do believe that Victoria prices are the best deal in the lower mainland.(When I say “Lower mainland”…I should say I meant the lower part of the province.Obviously we are not technically the lower mainland:)
    My point is that we are so close geographically to Vancouver.
    Two years ago I told a friend of mine in Vancouver that they should sell their million dollar bungalow on the east side of Vancouver and move to the island. It seemed insane to me that their modest, tiny house was worth one million dollars. They didn’t listen to me and argued that something “different” was going on in Vancouver than ever before. They mentioned the power of the foreign buyers. Today, their modest bungalow is worth close to two million dollars. They were right and I was wrong.
    So….the question is…..Is the same thing going to happen to Victoria? No one really knows. But I do hear the same arguments being made now by people who say $550,000.00 dollars for a tiny bungalow in Victoria is a crazy price to pay.
    It seems to me that it would be more crazy if Victoria real estate “didn’t” follow Vancouver’s lead.
    Oh ….and by the way….that body of water is also going to matter a lot less when we are all flying around in autonomous drones. (They have one now for $350,000.00 dollars)
    It might sound like a lot…. but if you can sell your house in Vancouver, for two and a half million dollars, you could easily afford to buy one and fly into work in Vancouver from Victoria or even Sooke……….. with the two million dollars left in the bank after you buy a Victoria house for $550,000.00
    I predict that in two years, a tiny bungalow in Victoria will soon be one million dollars. Even at one million dollars……..it will still be one and a half million dollars less than a Vancouver house in Kitsilano.
    Talk again in two years. I might be wrong. But I don’t think so.

  35. Victoria prices are still the absolute best deal in the lower mainland

    Did the tectonic plates shift and I didn’t notice?

  36. Pasting this comment by deryk on the previous post because it looks like it was meant for here:

    “I can only speak for ourselves. Just before 1990, house prices in Vancouver made (for that time at least) a very dramatic jump. We were offered $100,000.00 more than we had just paid for our house and so we moved to Victoria where houses were incredibly cheap compared to Vancouver prices at the time. We had much smaller mortgage payments, more money to travel and do things with our lives and to raise a family.
    We see the same thing about to happen in Victoria today. People in Vancouver are selling their west side homes for two and a half million dollars and buying the same quality house here in Victoria for $550,000.00. (All within walking distance to the beaches and the downtown core and on twice the size of lot, than in Vancouver.)
    People here don’t seem to understand what is going on, but once you have seen it happen, it seems a no brainer. Even the real estate agents don’t seem to understand what is going on. We have been told more than once that this is just a minor blip and that prices in Victoria will settle back down again.
    No one has a crystal ball, but my bet is that Victoria prices are going to go up dramatically and stay there.
    Victoria prices are still the absolute best deal in the lower mainland.”

  37. Also not personal but I don’t watch youtube stuff you or anyone else posts – just not my thing.

    Same.

  38. I dunno, I took JJ’s story for what it was. A bad luck story. No big deal. If yer borrowing over a half million without being aware there are risks you are ignorant. JJ is just trying to enlighten the ignorant masses in his own way….

  39. Also not personal but I don’t watch youtube stuff you or anyone else posts – just not my thing.

  40. JJ – I do appreciate your stats and data posts.

    There is no personal grudge. What I find difficult are anecdotes with vague one-sided facts which are always pointing out the pitfalls of home ownership without further analysis. If I pass over someone doing this, which I don’t recall but may have occurred, it is likely because I don’t view that particular opinion as very persuasive overall and am not concerned that someone is going to follow it to their detriment.

    There are risks in home ownership and I agree these need to be clear, but if risks are not rationally analyzed they appear as if they are completely out of individual control and management, a mystery box of mishaps waiting to happen. Recognizing what is within your control and what is not is the key to risk management. It is often also the difference between complaining about perceived hardship and taking action to do what you can to have what you want.

    In the example you provided on bankruptcy you have someone borrowing $465,000 to invest in a business (?). Businesses do fail. That said, he had access to $465,000 of tax-free money on an original purchase price of less than half of that. Paying mortgage and principal over time was likely far less than rent would have been. The business failure is the real cause of the financial catastrophe, not being a home owner. Your average investor would love to get their hands on this much equity on these terms. Basically he had a fantastic opportunity to create wealth that went wrong for whatever reason – again not enough facts to evaluate. I’d take that equity opportunity any day. It is so hard to accumulate this amount by just working and saving.

    If this money was spent on consumer goods then that needs to be pointed out as within the locus of personal control. Someone with these types of spending habits would have been unlikely to accumulate wealth as a renter either. They still had the short-term benefits of this type of wealth that they would not have had as a renter.

  41. Speaking of politicians lining their pockets in this real estate mess, there’s Vancouver Mayor Robertson. His girlfriend is Chinese pop star Wanting Qu, whose mother was charged in China with real estate corruption (personally profiting from sales of state property below market value).

    Wanting Qu hobnobs regularly with Gregor and the world’s elite at places like the Paris Climate Conference … (Lucky us.) She came to Canada as a uni student and became the first ever tourism ambassador for Vancouver, “with the intention of raising Canada’s profile among destinations for Chinese visitors.”

    Can our world get crazier or what?

    “In 2010, Canada’s then-top spy Richard Fadden gave a rare interview to CBC host Peter Mansbridge in which he warned that ‘several municipal politicians in British Columbia …” were “under at least the general influence of a foreign government …
    there was evidence those governments had in the past identified young, ambitious Canadian students while they were at university, groomed them …”

    http://blogs.theprovince.com/2015/12/02/gordon-clark-who-is-our-hobnobbing-mayor-actually-serving/

    “China Daily reports that her mother, Qu Zhang Mingjie, a Harbin city official, was arrested after allegedly undervaluing state assets for sale.”

    http://www.cbc.ca/news/canada/british-columbia/mother-of-wanting-qu-gregor-robertson-s-girlfriend-arrested-in-china-1.3048133

    “Robertson has attributed his following on Chinese microblogging site Weibo, in part, to Qu, who has hundreds of thousands of followers on the site.” (actually it’s 1.5M followers)

    http://www.ottawacitizen.com/technology/Vancouver+Mayor+Gregor+Robertson+girlfriend+Wanting+poses+outside+COP21+Climate+Change+Conference+Paris+Instagram/11558088/story.html

  42. @Just Jack re: house re-listed for higher price

    Thanks, that’s what I thought, although it seems an “auction” is now “normal marketing conditions” in many areas. Just to confirm: if a seller receives an offer above asking but it’s still not what they were hoping to get, they don’t have to accept it, do they?

  43. Sweethome, one possibility is that the agent tried to cause an auction and the auction flopped. Now it has been re-listed at a higher price to be sold under normal marketing conditions.

  44. Can someone explain what likely went on for a house to be listed today for $55K more than when it first came on the market last week? There was an open house and one would assume they had an offer. Did they just not get an offer high enough over asking for their liking?

  45. Great piece by Gary Mason of the Globe.

    Plenty of blame to go round in real estate crisis

    “History will not be kind to the political leadership in this country that has mostly watched, hands in pockets, as the hyperinflation we are witnessing in Metro Vancouver’s real estate market destroys the home-ownership dreams of more and more of the young and middle class.”

    http://www.theglobeandmail.com/opinion/plenty-of-blame-to-go-round-in-real-estate-crisis/article29384402/

  46. “As for super-aggressive – maybe it came across like that. I do find vague anecdotes supporting an overly positive or negative view a bit difficult. They are sometimes unreliable and lead to false causation conclusions.”

    Totorro, how did you came to the erroneous conclusion that what I posted was overly positive or negative and led to a false conclusion? I simply restated what was told to me without giving any personal opinion or conclusion. Many of the people on this blog provide anecdotes tethered to a personal opinion but you seem to pass those by.

    It isn’t your desire for fairness but a personal grudge that clouds your objectivity.

    Get over it.

    https://youtu.be/6m07tiAb-OA

  47. Hawk and all … just a thought… but don’t you think that the tightening of Shanghai rules will in fact accelerate the demand for N.A. Real Estate…ie; greener pastures…(not looking for an answer)

    “Shanghai will limit homebuying eligibility to those who have paid income taxes and social insurance for at least five years consecutively, up from two years now, Gu said. It also will require a down payment of at least 70 percent for second homes larger than 140 square meters or more than 4.5 million yuan ($691,000) in value, and require at least 50 percent down payments for other second homes, Gu said. That compares with a 40 percent nationwide threshold set by the central bank in March, when it loosened the requirement.”

  48. “David Eby, a Vancouver NDP MLA and opposition housing critic, said these increases are a good step, but still pale in comparison to the $200,000 in commission that unethical agents can stand to make selling just one house in his riding.”

    As per Vicbot’s post, this is always the worst part of white collar crime. They get a fine but still get to keep the proceeds or part of.

    Along with it is corruption or the potential of it. Look at Quebec, everyone is on the take in government. How can BC government be completely clean ?

  49. We could always do what they are doing to the insane in Shanghai.

    Shanghai Tightens Non-Local Homebuyer Rules as Prices Surge

    “Shanghai will limit homebuying eligibility to those who have paid income taxes and social insurance for at least five years consecutively, up from two years now, Gu said. It also will require a down payment of at least 70 percent for second homes larger than 140 square meters or more than 4.5 million yuan ($691,000) in value, and require at least 50 percent down payments for other second homes, Gu said. That compares with a 40 percent nationwide threshold set by the central bank in March, when it loosened the requirement.”

    http://www.bloomberg.com/news/articles/2016-03-25/shanghai-tightens-rules-for-non-local-home-buyers-as-prices-soar

  50. “If the people cannot trust their government to do the job for which it exists – to protect them and to promote their common welfare – all else is lost.”
    (Barack Obama)

    Apparently Vancouver is the major entry point in North America for smuggled cash due to the minimal fines, and guess where it goes
    http://news.nationalpost.com/news/canada/vancouver-international-airport-acts-as-major-entry-port-for-millions-in-cash-smuggled-by-mostly-chinese-citizens

  51. @ Introvert

    Both this and my original statement can simultaneously be true.

    If you think that most people have a mistaken belief that government has an effect on the economy greater than that of enabling the economy’s existence, i.e., a enabling a yearly GDP per capita of $51,958.38, versus nothing at all, perhaps you’ll tell what this extraordinary delusion consists in.

  52. @ Vicbot

    how do we get out of this mess?

    A one percent per month tax on empty houses. That would generate the city of Vancouver $1.68 billion a year, or thereabouts, assuming all those houses purchased by Chinese investors are empty. That’d improve things all round except for the speculators, who nobody loves. Victoria’s municipal governments could presumably scoop some extra revenue the same way.

  53. Except that without government there wouldn’t be an economy.

    Both this and my original statement can simultaneously be true.

  54. Leo neither of those assumptions are correct from my perspective.

    JJ did not say he was talking about Victoria, although given the blog and the reference to the recent upswing it was not clear he was not talking about Victoria either and given the facts posted it is extremely unlikely that it is.

    I also never said a business failure was owner caused and indicated that in places like fm where home equity had fallen along with oil prices and business this could provide reason enough. Half of all business fail in the first five years and there are many causes – some by things like owner lack of experience and others like bad partners, economic conditions, etc. Owing your own business is full of risk.

    As for his other facts, he seems to now be stating the list price is not market value and distinguishing between first and second mortgages. In any event the amount borrowed is significantly over list and I agreed that this is a risk in Victoria for individuals with little equity if the prices drop a lot and they have to sell. Something that has not occurred in my window of home ownership.

    As for super-aggressive – maybe it came across like that. I do find vague anecdotes supporting an overly positive or negative view a bit difficult. They are sometimes unreliable and lead to false causation conclusions.

  55. @Introvert

    Governments have far less influence on the economy than most people think.

    Except that without government there wouldn’t be an economy.

    Human existence in the absence of government, or in what Hobbes called a state of nature, will degenerate into a war of all against all:

    “… there is no place for industry, because the fruit thereof is uncertain, and consequently, no culture of the earth, no navigation, nor the use of commodities that may be imported by sea, no commodious building, no instruments of moving and removing such things as require much force, no knowledge of the face of the earth, no account of time, no arts, no letters, no society, and which is worst of all, continual fear and danger of violent death, and the life of man, solitary, poor, nasty, brutish, and short.”
    Thomas Hobbes, Leviathan

  56. “Hey, baby. Let’s spice things up a bit tonight.”
    “All right, what do you have in mind?”
    “How about some role playing … I want you to call me ‘Admin.’ “

  57. I wonder how one could find those newspaper articles…. Does the TC have a digital archive or is it on microfiche?

    Best we can do is search articles dating back to Jan. 4, 1993.

    GVPL.ca
    Under “Digital Content” click “eResources by Subject”
    Click “Magazines & Newspapers”
    Click “Canadian NewsStand”
    Log in with your barcode and password
    Click “Publications”
    Search for “Times Colonist”
    Click on “Times – Colonist”
    Scroll down to “Search within this publication”

  58. Full disclosure: Admin and Leo S are both me. Sometimes I’m logged into one account, sometimes the other. Just thought I’d make that clear before I’m banned for posting under multiple names

  59. I find it exceedingly unlikely that the VREB falsified their price data. If they had taken the lowest price in one year and compared it to the highest price in another year to report a large gain, it would immediately bite them in the ass the following year.

    I wouldn’t be surprised if the stats aren’t super accurate going back that far, but more due to transcription errors and omissions rather than willful deceit

  60. Call me a liar all you want LeoM but I bought in 83 for $65, sold in 90 for $110. Minimal update. Rebought and it went up 40% by 93 then pulled back 10% for several years. It’s all about your hood, not the averages, as has been beaten to death on here.

  61. Hawk: I also bought and sold, I know you didn’t make a 100% gain between 1983 and 1993 unless you did a nice reno to update the kitchen and bath.

    A house bought in the core in 1983 for $115,000 would have sold in 1999/2000 for $230,000. Check the TC fiche at the library if you want confirmation. In 1993 that same house would never have sold for $230,000 (unless renovated and updated considerably).

  62. Admin: the Times colonist and the public library both had microfiche archives of every TC newspaper, or at least they did ten years ago. Ask a librarian at the main library branch for help. In the past you could not phone the TC for an index search, but a librarian could phone TC on your behalf. So ask a librarian about specific search criteria and they will then phone the TC with your request. A day or two later they will call you with the details, then just pull out the fiche cards and read the articles. You can also read the classified ads because in those days realtors advertised in the TC and the TC had weekly special sections for real estate. Lots of good information is available if you have a few hours of time at the main library branch.

  63. People with large businesses and good intentions get into money problems because they usually have a good banker relationship that believes in them and lends them more than they should. The economy turns and the guy goes under. Happens all the time. Ritchie Auctions survives off unfortunate situations.

    It’s not based on exact precise calculations just poor luck, timing ,and over borrowing. Something the mortgage business is clueless about as they funnel the cash down the sheep’s mouths.

  64. Perhaps you did not read my second post?

    I did. Your argument rests on the assumption that JJ is lying. Then it diverged into suggesting the business owner must have been incompetent if his business failed.
    I was just surprised at the super aggressive response to a simple example.

  65. If you got that data from VREB, they likely compared the absolute lowest selling price in 1983 to an absolute highest selling price in 1993, as they often did for recording RE increases; but to record declines they took the lowest selling price at the beginning at the beginning of a decline and compared it to the highest selling price during the lowest period. There were several newspaper articles at the time suggesting VREB was manipulating the data to paint a rosy picture, maybe they still do.

    Very interesting allegation. The VREB claims their data represents the average sale price in that year. Are they outright lying? Also if the data is total bunk then the article about Victoria single family homes having a historical real rate of appreciation of 3.75% annually is also incorrect.

    I wonder how one could find those newspaper articles…. Does the TC have a digital archive or is it on microfiche?

  66. “What we are giving up by floating so many passports around the world is control over our economy and policies.”

    Well said. Sad but true, and we’re seeing the effects now. Too bad Canadians are so over-worked that they don’t have the energy to stand up against what’s happening with all this speculation and money laundering. The government was desperate to boost the economy, and now how do we get out of this mess. Also thanks to Hawk for the article that summarizes everything in Vice.

  67. First let’s begin with you’re the one who said he bought in Fort Mac. Now that you said that it has somehow become a fact in your mind. The property is not in Fort Mac., Then you assumed that at a bank gave him a mortgage of $485,000. When I clearly said it was a first and a second mortgage. Then you assumed that the property was worth $425,000 when I said it was listed at $425,000.

    You assume too much and lose the ability to focus on the big picture being more worried that someone is always slighting you.
    .
    What is the average scenario is that people have used their equity in their homes and now have larger mortgages than what they originally paid for their property. They have not been paying down their mortgage they have been increasing the size of their mortgage.

    That’s the anatomy of a foreclosure I was illustrating. Not that someone did or did not seek information about trucking companies before they started a business.

  68. sometimes business fail through no fault of the operator

    Agreed. Going into business for yourself is a much greater risk than working as an employee.

    There is not enough information to assume anything in this example except that the example is likely not from Victoria.

    I stated that consulting someone with experience in that industry in those circumstances should have likely been done IF it was not. I never assumed the operator was an idiot. I stated that it appears that this scenario occurred in an area like Fort McMurray it was likely due to a drop in housing prices combined with a drop in oil prices. I also said it could be relevant to Victoria if there was a significant drop in prices and someone had little equity – something that has been talked about frequently on this blog.

    Perhaps you did not read my second post?

  69. Admin said: “Not in Victoria. House prices increased by 142% between 1983 and 1993.”

    Totally wrong. But you probably got your numbers from VREB and they were notorious in those days for manipulating the data.

    I owned more than one house in the core during those days and I guarantee that house prices did not increase by that much. If you got that data from VREB, they likely compared the absolute lowest selling price in 1983 to an absolute highest selling price in 1993, as they often did for recording RE increases; but to record declines they took the lowest selling price at the beginning at the beginning of a decline and compared it to the highest selling price during the lowest period. There were several newspaper articles at the time suggesting VREB was manipulating the data to paint a rosy picture, maybe they still do.

    The actual increase in house prices between 1983 and 1993 was just over 50% for an average place; and maybe 65% for a place that was updated a bit. In 1983 a typical Gordon Head house was selling for $115,000 and in 1993 that same house was selling for about $175,000. The ratio was the same throughout the core. South Oak Bay and South Fairfield were the last areas to decline and the first areas to increase, as they always are. Never trust the old VREB statistics, they were always ‘massaged’ to remove the rough spots and to put a spotlight on the highlights.

  70. @totoro Not sure why you’re attacking JJ’s example here. It’s just a real-life example of what can go wrong. I don’t see the implication that this is a chronic issue. Also sometimes business fail through no fault of the operator. It’s pretty cold to assume that the operator must have been an idiot if his business failed.

  71. House sale in Fairfied that was described as land value only sold at $725,000 for a 5,200 square foot lot or $140 a square foot. After an auction on March 22 at 7 PM. Silly people they could have bought a new vacant lot on Masters that has been up for sale for the last 73 days at $559,900 or $103 a square foot. I guess they thought the agent was kidding when he said it was lot value.

    Another big ticket sale at $6.2 million along Beach Drive. The property has been continuously listed since 2007 starting at $15,000,000. And is currently assessed at 6.3 million. At one time considered as one of the top ten most expensive homes in Greater Victoria. If they had only known to buy in Gordon Head rather than Beach Drive they would have doubled their investment – silly people.

    Or how about the agent that listed a house for sale at $788,000 in Gordon Head even though it was purchased four years ago at $670,000. Maybe he has been on holidays and didn’t read the Times Colonist. Well surprise, surprise, the property sold over asking price at $841,000. Who didn’t see that one coming? Maybe the half dozen bidders driving the price up. Silly people.

    Or how about the person who just bought a house on a duplex lot. Too bad the house is too wide to permit a driveway to link a new home at the rear. Now they will now need to buy an easement from the neighbor. If the neighbor and the city will allow it? Silly people.

    If you’re waiting for an email from an agent these days on the newest listings then you’re just someone with a bulls eye sharpied on your forehead.

  72. Not sure why you feel the need to devolve into false personal attacks – but whatever.

    I do have significant experience in business development and own businesses. He probably should have sought out someone with this skill set in the trucking industry if he did not prior to declaring corporate bankruptcy.

    The point is that your story is not the anatomy of a bankruptcy in Victoria. It is more like the story of someone who borrowed $485,000 against their home in Fort McMurray to invest and the housing market declined sharply and their business was impacted by oil prices. That or there was severe mismanagement. In any event, this is not the average scenario. Most people are not self-employed and a minority of those that do own businesses have their home equity at risk.

    Again, the stats show that bankruptcy rates are low and declining and most who declare bankruptcy do not own homes. It is consumer credit use apart from HELOCs or refinancing combined with illness, divorce and/or addictions that often underpins bankruptcy. The rate is rising only in the over 65 group. This group has little to lose financially with such a declaration as RRSPs, CPP and OAP are exempt from bankruptcy and the opportunity to repair credit is less likely. If you have more debts than assets and are over 65 this might be a wise choice.

    The Fort McMurray example is; however, relevant to a situation in which housing prices decline rapidly and some homeowners who have little equity get into a situation in which they have to sell. This could occur in Victoria at some point but hasn’t yet. Many blog posts analyzing how to protect against this risk already posted here.

  73. I was here in the 80s & 90s.

    Part of the reason for 1991 being so strong is because prices dropped off a cliff by 40% in Victoria in the 1980s. Interest rates were at 20%, inflation was 12%.

    People had wanted to protect themselves against inflation by buying houses.

    Homes went from $120,000 to $80,000 overnight here. That was a big deal back then. There was a big recession – a lot of people left Victoria to find work, including me.

    By the early 1990s, the economy started improving, and the “World Wide Web” came into being by 1993.

    In the early 1990s part of my job was working with a US-based research firm that worked with US gov’t contractors on the “World Wide Web.”

    The Internet enabled different types of businesses to set up shop anywhere, instead of depending on face-to-face sales. That included Victoria and Vancouver Island.

    My co-workers & company managers had lots of wild debates about whether people would really use the Internet to buy books? Clothes? LOL! Debates about whether computers or TV or our phones would be “central” to our daily lives. Lots of trips to the US to debate what would sell, and how, and to who.

    Anyway, the 1990s were a period of recovery from the 1980s, in every industry, not just technology.

  74. No Totoro, it was just that he didn’t have your guidance in these matters. Instead of trying to build a trucking company he should have rented out rooms.

  75. The internet was not a mainstream effect on the economy in the Victoria or BC in the 90’s. It was the stone age, computers were expensive as well.

  76. Hard to believe a bank would lend 485 on a property that is only worth 425 today. You’d have to be in Fort McMurray for those numbers to make sense.

    I’d say that if this is true this guy had the benefit of $485,000 in home equity which he apparently invested in a non productive manner. In addition, he had to live somewhere and this calculation only points out the expenses rather than the shelter benefits. $485,000 could have been turned into multiples of this number with a better strategy.

    Given that most loans for businesses are backed by personal guarantees and/or funded by home equity it is unsurprising that a failed business leads to corporate and potentially personal bankruptcy. That is a tough outcome but also a risk you take when going into business for yourself.

  77. The internet happened in the 90’s. My parents moved here in 79 when my dad was here on business in January. The flowers were starting to bloom…. He called and said were moving. I think there is some influence to the news getting out. Also I moved back here in 92 after school and the Tech scene was starting to bud then….

  78. The anatomy of a foreclosure.

    Had a fellow explain to me what happened to him during this run up in prices.

    Bought his property many years ago for $200,0000 and put $60,000 down so that he did not have to pay CMHC fees. During his years of ownership he enlarged the home and built a workshop. He estimates that he spent another $500,000 on the home in mortgage payments and improvements over the years and now has a first mortgage of $385,000 and a second mortgage at $100,000.

    Well his wife left him and his business has gone bankrupt. Yesterday the bank got conduct of sale and the property was listed at $425,000.

    After it all clears and the property is sold he’ll likely still owe a hundred grand. He never wants to buy real estate again in his life.

    How many other home owners have done the same thing. Dipped repetitively into the home equity in order to improve their home and buy cars, boats, vacations using the equity. And now years later after spending hundreds of thousands have a much larger mortgage than what they paid for the home?

  79. But it’s doubtful if any level of government gives a damn about Canadian citizens struggling to buy a home in a frenzied market as job quality and wages shrink. So no one should hold their breath for any useful government intervention.

    It’s too late to step in now in any serious manner. They provincial government have already stated that they won’t do anything to jeopardize the equity of existing homeowners. So they have committed to being useless right off the bat. The Vancouver bubble is going to have to pop on its own I think or the feds may have the balls to step in since they don’t live or die by the Vancouver voters.

  80. The economy was robust between 1983 and 1993, but house prices just increased a bit more than annual inflation

    Not in Victoria. House prices increased by 142% between 1983 and 1993.

  81. National Bank analyst says:

    Buyers from China comprised about one-third of purchases of Vancouver’s hot housing market in 2015, according to “back of the envelope calculations” …

    Chinese investors spent about C$12.7 billion ($9.6 billion) on real estate in the western Canadian city in 2015, or 33 percent of its C$38.5 billion in total sales, according to a note by financial analyst Peter Routledge on Wednesday. In Toronto, they made up 14 percent of purchases, or about C$9 billion of the C$63 billion in deals. Routledge compiled the data by extrapolating from a Financial Times survey of 77 high-end buyers and data from the U.S. National Association of Realtors.

    http://www.bloomberg.com/news/articles/2016-03-23/chinese-buy-one-third-of-vancouver-homes-national-bank-estimate

    Such a rate of foreign speculative investment is undoubtedly destabilizing, and thus detrimental to the interests of Canadian citizens. A solution would be a tax on unoccupied foreign-owned property sufficient to set off a crash that punishes the speculators. But it’s doubtful if any level of government gives a damn about Canadian citizens struggling to buy a home in a frenzied market as job quality and wages shrink. So no one should hold their breath for any useful government intervention. In time, the speculators will sell and the market will return to normal, i.e., prices determined by interest rates, zoning bylaws, population trends, and trends in local economies.

  82. “the NDP drove the economy of BC into the ground during the later 1990’s”

    Such an overblown and over used liberal backed lie. The commodities market was in the tank and copper prices were at 50 cents and nearly every mine in BC, gold and otherwise was shut down, the lumber prices tanked with over supply problems which were the two main drivers of the economy. Campbell’s only shit luck was commodity prices took off not long after he took over.

  83. You asked what happened in the early 1990’s?
    The economy was robust between 1983 and 1993, but house prices just increased a bit more than annual inflation, so the mood was positive, but cautious. People were cautious about RE after the crash in 1981/82 so RE was viewed as a family necessity not an investment.

    The NDP got elected in 1991 and 1996 before being defeated in 2001. The economy was strong in the early 1990’s but as the 1990’s progressed, the NDP drove the economy of BC into the ground during the later 1990’s, and BC had an exodus as people went to other parts of Canada for work. Other resource rich areas of Canada were booming during the 1990’s but the BC economy was crumbling under the NDP leadership. Even the NDP realized they were ruining the economy with their socialist ideals, so Premier Harcourt gave his famous province-wide televised address in which he lashed out against “welfare cheats, deadbeats and varmints”.

    After the NDP got kicked out in 2001, RE and the economy rebounded and made-up for the lost years under NDP.

    So the moral of this story is this; if you think RE prices are too high, just elect the NDP in the next election.

  84. Canada isn’t alone in the business of selling passports. But unlike some other countries we have a residency requirement which has led to crazy real estate prices.

    The residency requirement causes problems for those that want a Canadian passport but don’t want to live here. They need to falsify documentation that they have met the residency requirement. That could mean buying a home that they may never live in on a regular basis. Which can be sold to the next foreign investor and so on and so on. Something that I’ve noticed in a very few listings in Victoria. Where an expensive home is purchased and then three years later re-sold. When you look at the pictures of the interior – nothing has been altered. They even have the same pictures on the walls.

    By selling passports Canada has been able to add gobs of cash to our government coffers. And the Canadian passport is a good one to have. Allowing access to most of the world’s countries as opposed to some other countries like North Korea that have limitations on the number of visa-free countries that one can get into.

    With so many Canadian passports floating around the world, it has raised concern by the Federal government. A fact that the Federal government realized when it came to our last election. If you had not lived in Canada within the last five years, you were not entitled to vote in the election. If they hadn’t added this clause, then those living in China might some day elect our Prime Minister, Premier or Mayor.

    In a strange way the Federal government made two classes of Canadians when they did that change to the election process. Canadians with voting rights and Canadians with non-voting rights.

    What we are giving up by floating so many passports around the world is control over our economy and policies. When the teachers strike it isn’t every day Canadians that force the government back to the table. It’s a letter from Beijing to the Premier implying a future restriction on students coming Canada that gets the strike solved.

    And cities like Vancouver becomes China’s little whores.

  85. “Our land system is based on trust. That allows some in our society to exploit that trust for their personal gains. Money launderers require anonymity to ply their trade either with alias names, different spellings of their names or using nominees to buy property and transfer funds.”

    As per Jack’s post on the previous thread. I believe the process is now in major transition. Criminals don’t want attention, especially major criminals washing billions through one particular area.

    Now that they are front page news internationally, most have likely started to move to a new area of the world where they won’t get scrutinized, their lawyers and agents won’t get cold feet, and they don’t have a hassle.

    With the NDP yesterday ramping up the money laundering story and proposing changing laws, using FINTRAC etc, they will ride this baby home to the finish line as Christy Clark doesn’t have the guts to do anything. Her new shadow flipping “rules” will be useless.

    http://www.cknw.com/2016/03/23/ndp-call-on-premier-to-end-money-laundering-in-bc/

    ICYMI,

    All The Ways Vancouver’s Housing Market is Fucked Up

    http://www.vice.com/en_ca/read/all-the-ways-vancouvers-housing-market-is-fucked-up

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