June 27 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

June 2016
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 187 460 725 977
New Listings 226 570 853 1137
Active Listings 2354 2362 2340 2323
Sales to New Listings  83% 81% 85% 86%
Sales Projection 1102 1127 1146
Months of Inventory


Barreling down on the end of the month and it’s pretty consistent as far as market performance.   Sales to new list creeping up as it usually does throughout the month, while sales per day have ticked downwards.   We are now running about 26% above the sales rate from last June so the days of near 50% improvements are behind us but that is more because last June was pretty active not so much that the pace is slowing down.   The lack of inventory is still a big problem and it continues to fall slowly.

I find it very interesting that the auction for the Rockland house failed after how much media attention it got.  With news of other multiple bidder setups failing there is definitely a slowdown, but it’s hard to tell if it is just the seasonality of the market come a bit early, or a sign of some buyer fatigue.

The Brexit news has displaced some of the daily housing stories but I suspect those will be back soon.  As far as Brexit’s effect on the markets, most likely it will just ensure that rates aren’t going up anytime soon as the UK takes a hit and pressure is taken off everyone else.   It’s disappointing to see the feds deciding to pump more money into affordable homes rather than addressing the root causes that is leading to affordability problems for everyone not just those with low incomes.  If our plan is to fight money with money, we will lose.

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112 thoughts on “June 27 Market Update

  1. @bearkilla
    Yeah, those boxes on Gordon Point are super cheap. And those boxes on Houlihan. And those boxes on Seawood Terr. You’ve got Gordon Head nailed.

  2. @ Introvert : I also used to be turned off by homes with additions that just didn’t seem well thought out or were sketchy. However, I’ve since seen some in Oaklands that were really well done and seemed to integrate seamlessly and were not at all weird. The place on the 2700 block of Forbes that fetched 960k is a good example. They added a large 3rd bedroom that led to the back deck, adding greatly to the main living space while not really giving up that much yard. Our situation wouldn’t be all that different.

    @JJ: the plan is to stay here for the longhaul regardless. I just can’t see accepting an inferior location or paying huge $$ for Fairfield/OB all just to have a bit more space. Plus the hassle/ cost of moving, mind you turning your house into a construction site doesn’t sound fun either!

  3. It’s doofus not dufus.

    Yes, it looks a bit better with the double o, doesn’t it. I’ll spell it that way next time I insult you, thanks.

    Does anyone have any thoughts on the economics of adding to a house, say to add an extra main floor bedroom or expanding kitchen/ dining space?

    When we were house hunting and walked through a house with an addition, we were always like, “what the fuck is this?” It was a definite negative for us. We never saw an addition that was acceptable let alone one that improved the property.

  4. “Does anyone have any thoughts on the economics of adding to a house, say to add an extra main floor bedroom or expanding kitchen/ dining space?”

    Sure, lots of different possibilities depending on what the house is like today versus the completed project. Any real estate appraiser can do an analysis on a before and after scenario to find out if the project is economically viable.

    Finding a contractor might be tough as most only want to do new builds as it is faster, easier work. As a rough rule of thumb, renovations can cost from 50% to double new construction costs and are not typically fully recoverable in the market place. But yours might be different. One thing to consider is that you have an option to sell the current home and buy one that would meet your needs.

    This may be tricky in this market and moving, commissions and taxes can add up quickly to another $30,000 or more. But you won’t be tripping over tradesmens’ electrical cords and your kids won’t be playing in mud for 6 months too.

    Then you have to step back a moment and think. Do you really see the family living in that hood in the next 10 years or will you outgrow the neighborhood? Particularly if you are in a starter neighborhood like Mayfair or Fernwood where the homes are very small and there is a very high turn over rate of owners. Because once your kid finishes grade 5 at Oaklands, you’ll be looking at a new school and neighborhood.

  5. Leo its a couple hundred dollars a year. The relationship is worth it to me

    Whether masochism is a relationship is debatable. But at least it’s only a mild case. 🙂

  6. Leo its a couple hundred dollars a year. The relationship is worth it to me. Just going to take the 2.24 3 years.

  7. How can these mortgage lenders keep a straight face when they dole out this bullshit. They cry there is no bubble anywhere in Canada, but if the government intervenes it will crash the market. So if it isn’t a bubble then any changes should be able to sustain itself, no ?

    Again, no wonder most people despise these money floggers. I thought a “market ” was allowed to go up AND down. Apparently not when your a sleaze bag milking the sheep of their financial future.

    Nothing to see here: Mortgage industry says there’s no housing bubble in Canada

    “A Canadian mortgage industry group says there is no bubble in any Canadian housing markets and is warning the government against any changes in lending conditions that might derail the market.

    Will Dunning, the chief economist for Mortgage Professionals Canada, which represents more than 11,000 members across the country, says everybody is waiting for the bubble to burst, but maintains there isn’t enough evidence to say it exists.

    “There is a risk that changes in policies of lenders or mortgage insurers that reduce access to mortgages could cause an unnecessary drop in housing demand and housing prices, and bring consequent economic damage,” Dunning said, in a release out Tuesday that accompanies his group’s 38-page report on the state of the mortgage industry.”


  8. Interesting article LeoM.

    As a thought, maybe the government should alter the BC Privacy act so that residential property ownership is public knowledge. Then properties that are held in one person’s name would be taxed at the residential rate while properties in shell companies would be taxed at a higher rate.

    All non Canadian owners will have to be finger printed and their purchase made known to their home country.

    Money laundering relies on anonymity.

  9. Does anyone have any thoughts on the economics of adding to a house, say to add an extra main floor bedroom or expanding kitchen/ dining space?

    I don’t know about getting the money back, but seeing that a house has had an addition makes me immediately suspicious because most additions I’ve seen are horribly built. If you can do it right with permits I think it could work.

  10. Admin., in his overview to this weeks blog said “It’s disappointing to see the feds deciding to pump more money into affordable homes rather than addressing the root causes that is leading to affordability problems for everyone not just those with low incomes. If our plan is to fight money with money, we will lose.”

    Real estate has become a commodity for investors and the working class is slowly being priced-out of buying and being relegated to being lifelong renters. It’s not just here; its worldwide. This New York Times article from last year is long, but it’s worth reading. Politicians need a swift ass-kick before it’s too late.


  11. Could do better if I went elsewhere to renew but they know I am not going to go through the process

    Why don’t you? Not like it’s much of a process. Or is the balance so low it’s not worth it?

  12. Does anyone have any thoughts on the economics of adding to a house, say to add an extra main floor bedroom or expanding kitchen/ dining space? Are you likely to get your money back upon resale? My suspicion is that if the location is decent it can make sense.

    I hadn’t previously considered this, until I started seeing places in oaklands with additions going for ridiculous sums of money. Which has me thinking – add to the house now, enjoy the extra space/ updating over the years, then sell and get it all back later? Thoughts are welcome.

  13. Just in case anyone cares. RBC quoted me 2.3 5 year variable. 2.7 1 yr, 2.2 2 yr and 2.24 3yr. They are being very scummy on the variable. Should be below 2. Banks finding ways to keep profits up. She warned me the discount to prime could be less in a few months.

    Could do better if I went elsewhere to renew but they know I am not going to go through the process. Just trying to pay if off it off the balance in 3 years so I will bend over and take it like a good Canadian.

  14. Sorry, screwed up the site colors there for a while.

    I’m wondering how you make your censorship decisions. To me, your criteria seem arbitrary and capricious.

    That’s about right 🙂

    I see calling someone a “dick” doesn’t warrant censorship

    I thought about it, but the value of the bickering between gwac and Hawk was so marginal that deleting that comment really would have led to deleting the last 5 slightly less crude insults so I left it. Overall I’d rather not delete comments and hope people moderate themselves.

    As for clear guidelines, I don’t think there really can be any other than keep it relevant to real estate and don’t be totally antisocial.
    Another approach is to introduce a voting system, but that can also lead to the mob downvoting useful dissenting comments.

  15. Once a dick, always a dick.

    Mr Administrator, Leo, sir. I’m wondering how you make your censorship decisions. To me, your criteria seem arbitrary and capricious.

    For example, a while ago, when I summed up Just Jack as a “dufus with access to statistics,” you censored that (deleted it). But I see calling someone a “dick” doesn’t warrant censorship, as that term has been used numerous times in the past.

    To be clear, I’m not trying to do away with (occasional) insults on this blog. Insults have a role to play: they keep things spicy! But what I am hoping for is some clarity and consistency from you with respect to your censorship rules.

    And, Leo, please don’t respond to this by giving us a fatherly tut-tut and telling us to be good little boys and girls from now on. That’s not what I’m looking for.

  16. I’m not super savvy but I can only imagine Port Alberni prices going up.

    These towns have low real estate prices for a reason: not many people want to live there. And that’s not likely to change anytime soon.

    I personally wouldn’t look to Port Alberni as a “good” investment opportunity.

  17. Well said Vicbot. Another pathetic part is they blame the government for not allowing them to jack up the fines to agents, yet last year they have 536 complaints and only one disciplinary hearing…and only 6 others in the previous 2 years out of over 951 complaints. It’s a fricking bad joke. No wonder the public despises the entire industry.

    Even the BCSC smacks the shady brokers in the finance business on a regular basis and nail them hard for the most part. The BCREA operates like a mafia group.

  18. Agree Hawk.
    Recommendation #28 was particularly mind-blowing:
    “WE RECOMMEND that Council consider retaining professional communication advisors or additional staff with experience in consumer education and literacy, to assist with developing and implementing a comprehensive plan to increase consumer education and awareness and to restore public confidence.”

    One of their recommendations is to spend money on convincing the public that they “ain’t so bad”? How is this related to protecting the public from illegal activity? How bizarre. That proves (a) they’re dismissing a lot of people’s serious legal and criminal money laundering complaints by throwing it back to them to get “more educated” , and (b) this recommendation is useless because any business with a public face is going to have to spend PR money anyway – but now they want to “retain additional staff” ??

  19. Real estate advisory study is another major fail. Other than big fines to agents for $250K and recommends 50% of board be taken over by public appointments, they want do another committee to talk about it some more. Real estate board is acting like the government. What a pile of corrupt leaches.

    Guess this has to just blow up in one big bloody mess cause they’ve lost control. Can’t even bring themselves to use the words “foreign money” anywhere.


  20. Some parts of Gordon Head are lovely – like the part north of Ferndale. There are some lovely streets there with high end homes on or near the ocean. The schools are generally good.

    There are other parts that are not on the water with nice houses with surprisingly very high incomes.

    The Hillcrest part of Gordon Head has a household income of $250,000 per year which is one of the highest income parts of Greater Victoria – it’s similar to the household income in half of Uplands, for example and more than double the income in most South Oak Bay areas. Hillcrest is not even a waterfront area.

    The part of Gordon Head with the rows of boxy tract homes is probably a good investment, too, because I have a feeling a lot of those homes could be rezoned to row houses and on the busier streets, condos.

    I’ve seen what has happened in similar areas in Vancouver. I think Marpole [one of the more modest neighbourhoods on the West Side of Vancouver] is a good comparable to the average Gordon Head area and I understand the appeal (maybe not so much for local Victorians).

  21. @Mike Grace
    What do you think of the 1 & 2yr fixed products out there? Seems like you can get them at less than variable rates and sub 2%. Good idea?

  22. Just my 2 cents: I think the sudden jump in prices at the start of the year was a convergence of different events – Canadian $ fell (15 cents lower to US$ than Jan 2015), China stock market crash in 2015 drove more foreign investors to safe havens like Vancouver, which then led Vancouverites to reach a breaking point and cash out after years of seeing exponential price increases, and then the millennial demographic wave reached a breaking point after years of waiting to buy a house and then needed it for more kids. When the millennials kept losing bidding wars, they were determined to fight it out – understandably. As that MoneySense article said, it’s the marginal buyer that sets the price – the out-of-towners with money.

    For Gordon Head: growing up in Victoria I always thought GH was sooooo far from town – OMG an extra 15 minutes driving from Hillside Mall, out into the boonies! But for anyone who’s lived in a big city, that’s nothing. GH & Mt Tolmie are just a little away from the beaches, with only Shelbourne St has a major road to cross – highly appealing to families, same as why Fairfield & Oak Bay are appealing to families – not a lot of major roads to cross. Even Cadboro Bay Rd has maybe 20% of traffic as Shelbourne (if that!). Friends that live in GH & Mt Tolmie repeatedly say that.

  23. Shoot sorry Leo. Had it wrong then. Never looked at the boundaries. replace “Gordon Head” with Mt Tolmie….

  24. Reddit discussion underway: Kathy Tomlinson’s (Globe & Mail) reply to one question about the top 3 issues in Vancouver real estate that many of us may not know about:
    1) There are many people acting as proxies and agents – for investors who are putting money into Vancouver’s real estate market but whose names are not on title. Companies, family members and business partners put properties in their names and private contracts spell out the (silent) investors interests. For this reason, identifying who is a “foreign buyer” is very tricky if not impossible. I 2) There is a growing parallel marketplace of listings outside the MLS system – on various websites and apps – where properties are sold “exclusively” or “privately”. Because the media and public rely on MLS stats to track sales and prices, this means we don’t have the full picture 3) Skeptics question how one house selling for a high prices affects the rest of the market. I believe it’s quite simply Economics 101. First, if someone finds an investor willing to pay over (reasonable) market value for a home, that instantly pushes up prices of the other homes in that neighborhood, because realtors do what’s called a comparative sales analysis showing other buyers what that (over valued) house sold for. Buyers who can’t afford those prices then move to other neighborhoods – spreading out demand and on it goes

  25. Hawk I guess I assumed people would get that. In the future i will be more to the point so even you can understand.

  26. “Obviously it was his parents who paid for it.”

    Then why not say that ? Pumpers at the top always twists the facts.

  27. Like this place:
    Nice big back yard and in the heart of GH but the reno’s look flippy. I mean it’s a neatly bricked up fireplace but it’s a bricked up fireplace…. Photo floors and direct buy kitchen just should not equate this dollar value IMO. I would find it hard to spend 600k on this but at least that would make more sense value wise. OR maybe lots south of the malahat are simply worth 100 sqft now and I stand corrected…. We will know if prices stick next spring.

  28. WTF Hawk.

    Obviously it was his parents who paid for it. How did you get from my post I was pumping. The “I guess part.” Ya I am a real-estate agent on here pumping the market. You got me……

  29. “My friends UVIC student renter bought their place.”

    Is there any doubt now the market top is in ? UVictudent buys house in Gordon Head, hmmm. Sounds like student in West Van buys $4 million shack. You sound like a starving agent gwac, pumping the ocean and schools to justify someone buying who doesn’t even have their first job. Pretty sad.

  30. My friends UVIC student renter bought their place. Its the proximity to UVIC, Ocean and good schools I guess is the attraction. Anyone seen the 3 year reno on Shelbourne. They are adding a second story right now. Not sure they know what they are doing or ran short of cash.

  31. I think anywhere this side of the Malahat in the end will be a good location given a long enough window. Gorden Head is strongly desired among the family types and the Vancouver types as it’s the most familiar to them. It’s our closest suburb for sure. I just can’t get over the jump in prices here. In part because I am renting here right now and thanking my lucky stars I did not spend 800K on the POS I am living in right now…. It’s fine as a rental and comfy but the house over heats, I don’t like the lack of sidewalks or the bike routes, and the reno’s done were nice at first glance but really poorly done and thought put….

  32. Hawk

    That really hurts. Sorry am I taking time away from Googling “crashing housing market” or “China money laundering in Real estate” You should get back to that…..

  33. gwac, you have a couple of more decades to mature then, but I doubt it. Once a dick, always a dick.

  34. Hawk

    Still work a couple decades away from retirement. Maybe one day when I am older and bitter like you we can find a porch and yell at some kids for making noise.

  35. I still don’t know a soul who’s managed to buy a SFH in this market!

    This year I know of two people that bought. Last year a couple more. Of our friends (early-mid thirties) I think everyone that was close to buying has bought now.

  36. Gordon head boxes are low end cheap housing that’s a fact. Sure the lots are valuable I guess but the structures are basic spec houses built on the cheap.

    Yep. You know what they say. Location location location.
    As for low end spec. I would take a gordon head box with a proper truss roof and drywall on a slab over a 50s house any day.

  37. Agreed dasmo, the market has never been as dangerous. A huge price spike while construction jobs are down 4700 this year regardless of the boom is most unusual. More topping out price action by the looks of it.

    Interesting to look back at the articles in 2007 where the local media was going all orgasmic over the building boom, and a year later the articles pop up asking why is there empty holes in the ground with no workers anywhere in sight.

    When developers were questioned they all had feeble answers like “hoping” other parties from Europe or Timbuktwo are getting involved as local banks have stopped lending on high ratio projects, or the previous failed bid came down to dollars and cents. What a concept that dollars and “sense”.

    Isn’t your seniors center open yet for some shuffleboard and crumpets ?

  38. What do you folks think about Port Alberni property as an investment?
    Houses and land are dirt cheap. And although the city doesn’t have much going on economically right now, it is one of the most beautiful (and hot!) places on the island.

    There are city sized building lots located in town for $29,000.
    Houses in the low $200s.

    I’m not super savvy but I can only imagine Port Alberni prices going up.

  39. Hawk is it not time for your daily walk through the neighbourhood that you can no longer afford?

  40. Jack,

    The lawyer involved is a pretty smart lady and I’m sure she won’t leave any stone unturned.

    I already see a follow up that this fraudster had a couple of 100% mortgages from that “oh so clean” institution the HSBC, as well as large loans through our “conservative” BMO.

    All through a shell company with obviously no due diligence on the validity of the borrower. How can you not see a massive landslide of these scumbags blow up on these banks and the market.

  41. The sudden jump of a hundred thousand dollars in the month of March and then flat. That bothers me as well Dasmo Alderon. What was the catalyst to create this spike. Was it the layoffs in the Oil patch, along with the fear of foreign investors? Is this what made so many Victorians dip into their home equity and start hoarding real estate as a hedge against inflation?

  42. “Not all of us treat our house as speculative or a piggy bank.”

    No, just an obsession where you sit there counting your equity like nickels in a jar down to your $.1 million based on hypothetical calculations off the top of your head. That’s weird.

  43. I so hope the lawyer(s) for the Chinese banks do not screw this law suit up. Canada and China have an agreement to share the proceeds of the recovered money laundering on an 80/20 split. Canada gets 20% or some $2,000,000 from this one court case. The BC government, who created this mess, doesn’t get a dime.

  44. I think it’s a risky market. I would feel more bullish if this sudden spike was driven by an economic boom or wage growth or even lower rates, or if it was a little more gradual even. But instead its a mystery. Why the sudden change? A need for Grow Ops to fuel the green rush? Millennials with equity rich parents desperate to launch their aging chicks from the nest? HVM cashing out? HAM finding Van too much on the radar? Our last boom had much more solid footing. It started with rates dropping in half, amortization lengths expanding and job/wage growth. A true window of affordability after a long flat period lit the flames and lasted a while due to all of the above. I was renting a much lesser place for what my mortgage turned out to be and I only had to put $9000 down. The setup is far different now. Rates will stay low but they are not on the steep decline they were. When I started my house search in 2003 they were at 6.5%. I locked in at 4.5% by the time I bought. My wages doubled in that period too, I assume I wasn’t the only one. Now the only obvious thing that can be pointed at is inventory is obscenely low, and the free money that has been printed over the last decade is now flowing into real-estate. Not a solid footing IMO. I really foggy vision as to what happens next. Could follow Van into the bizarre or it could pull back or it could plateau here due to a price ceiling/buyer fatigue. One thing is for sure, it would suck being a house hunter in Victoria right now. I feel for all of you….

  45. LOL yep my self interest is I plan to go there for a few more decades and than pass it on to my kids. You are a piece of work. I have already told you I have 2 houses and that I plan on keeping them so whether prices go up or down it will be my kids so called problem. Not all of us treat our house as speculative or a piggy bank.

    Why do I come here? For the education and amusement.

  46. Hawk I have a place there so I think I would know more than you. I know about the weir and the river, have studied all the details since it impacts me. The river has never run dry and never will. The river flow has been lowered to 4.5 cms. Assuming 0 rain there is enough flow till the end of Sept. We will get rain so there will be no issues and if there is non. Caytalyst will be pumping over. I think I know about what is going on over there. The lake is not the issue we have lots of water. Its the river which is higher than the mouth of the lake at when the lake gets to 161.37 meters above sea level. The middle of the lake still has 160 feet of water.

    I spend 50% of my time there. I have owned for many many years. The snow pack is the issue and little April, May Rain. They want to raise the weir 30 cm which will have little impact on the owners but we are fighting it just because. 🙂

  47. Just another one of those “few” bad apples.

    Chinese bank claims fugitive bought luxury B.C. real estate

    “A major Chinese bank has obtained a court order in B.C. freezing the assets of a businessman accused of fleeing China and buying “luxury” Lower Mainland homes after defaulting on a $10 million loan.”

    “Last year, Canada’s anti-money laundering watchdog FINTRAC claimed to have stepped up enforcement activities in Vancouver’s real estate market. A report prepared for the agency suggested the real estate sector was at “significant risk” for money laundering.”


  48. I’ve never understood the appeal of Gordon Head. I get it for students who want to live within walking distance of UVic, and I understand the increased property values that would result from that, but I don’t find it an especially nice neighbourhood otherwise. And it’s far from anything very desirable except the university. Maybe I still think of it as a student ghetto from my own UVic years, but it’s kind of depressing to me. It’s no Point Grey (which I know now has its own current vacancy problems).

    @ Sweethome: I’m sorry to hear that you’re not totally happy with your house. It’ll probably grow on you in the long run as you make it your own. My friends also waited to buy (they could have bought 2 years ago but were hoping that the market would drop) and ended up paying far more than they expected for less house than they’d hoped to get. The place they bought would probably have been $150,000 less if they’d bought it 2 years ago. That’s got to hurt.

  49. @Sweethome, Prior to 1973, municipalities had the authority to adopt building codes in BC. Post 1973, the province had the authority. Post 1973, the code would have been based on the National Building Code of Canada, so I’m not sure where this idea of lax codes comes from. 70s houses might be “spec” and boring to look at, but that’s certainly not specific to the era. I’d be more worried about buying a hermetically sealed (as required by the code today) Langford new-build, than a boring 70s box. Agreed that Gordon Head is over-rated though.

  50. I just bought a townhouse in May and we looked at it the morning after it went on the market. We put in a full asking price offer and headed home. Our realtor phoned us to come back as there were 2 other offers being written up. So we had to compete. We got it and I’m just glad to be done with looking! There wasn’t a whole lot to look at and it was pretty frustrating.

    I had been waiting for a few years for the market to go down like I thought it would. Now I’m just glad to be in because I don’t know if it will go down a ton like I once thought. Who knows.

  51. Gwac, it rains a lot in Lake Cowichan plus the river is showing signs of vulnerability of climate change drought conditions. They have had problems up there for years. Why do you always have to attack someone for pointing out real problems for a buyer ? It’s called due diligence. Did you just buy in Lake Cowichan ? My life is great thanks, you sound very nervous this market will tank.

  52. I still don’t know a soul who’s managed to buy a SFH in this market! Actually I can think of one but it was out in central saanich so it almost doesn’t count. Everyone I know of is either still looking or threw in the towel.

    Sweethome I’m sure it’s gonna work out for you regardless of what the market does. I’m curious about what kind of sacrifices you had to make. Were you dead set on indoor plumbing? I bet it’s not all bad.

  53. Gordon head boxes are low end cheap housing that’s a fact. Sure the lots are valuable I guess but the structures are basic spec houses built on the cheap.

  54. That ctv piece on lake cowichan doesn’t really say much. A few anecdotes from a realtor, a developer, and a real house wife. I am sure the market has picked up there, but I wonder what what the year over year increases look like. It also only talks about recreational properties.

  55. Hawk that is only in Lake Cowichan, happens only in the winter after heavy rain. Maybe 15 days a years. Youbou and Honeynoon bay are on CVRD water that does not come from the lake. Lake Cowichan is applying for grants to build a filtration plant.
    Hawk why is everything so negative for you. Life ain’t so bad.

  56. Guess folks buying up Lake Cowichan didn’t investigate the regular boil water advisories up there for drinking water, even in the winter months.

    Sweethome, don’t listen to the boasters who had no clue which way the market was going back then and still don’t. Be patient, as Jack said the foreclosures will come. This is the most bloated market in history and will end in a ton of pain.

  57. “If only you could have waited a little longer for the foreclosure boom that Just Jack has been certain will happen any time now for the last seven years.”

    Your words Introvert – not mine. But then your life is made up of lies and hate for others.


  58. Folks, stories like SweetHome’s are a result of heeding the advice of Victoria real estate pessimists.

    We worried that we overpaid a bit when we bought in 2009. At the time, $500,000-something for a house in Gordon Head seemed like a lot of money. Today, it’s almost impossible to find a house for less than $700,000.

    Can real estate in Victoria maintain this trajectory? I don’t know — ask Vancouver.

  59. We were getting worn out, and we need to move before winter, so we finally capitulated and bought something.

    If only you could have waited a little longer for the foreclosure boom that Just Jack has been certain will happen any time now for the last seven years.

  60. @bearkilla – “Gordon head is a very low end neighbourhood. The houses there were built as cheaply as humanly possible under a lax building code. I just don’t see the attraction.”

    Gordon Head is quite mixed, since areas were developed at different times. If the building code was lax, I would guess it was during the 1970s. In that case, wasn’t it just as lax in, say, Langford? Can you elaborate?

  61. @VicRenter “They told me that each week they’d wait for Thursday (now listing day) to roll around and they’d be lucky if there were 2 or 3 places that appealed to them. Maybe another 1 or 2 would trickle in on Friday. But many weeks they just didn’t look at anything.”

    This sounds like my situation; I probably passed your friends at some open houses. It seems like you understood your friends’ plight, but several people I talked to just didn’t understand why looking for a new house wasn’t “exciting”. This year’s market is a whole other level than most buyers have ever experienced. We were getting worn out, and we need to move before winter, so we finally capitulated and bought something.

    I am not really happy about the compromises we had to make; this is a house that we would have passed on several years ago for various reasons, and it would have been much cheaper then. However, the damage was done by not acting sooner, and now we just had to manage it as best as possible considering the particulars of our situation. Finding a new place to rent and risking prices going even higher seemed like a greater evil. Now time will tell if it was the right decision.

  62. Gordon head is a very low end neighbourhood

    Must be why there is hardly a house to be found under $800k.

  63. Further on Lake Cowichan. Area is made up of Honeymoon bay, Youbou and Lake Cowichan. Logging area. It has suffered since 2008 (crash) and before (Youbou Mill close). You are retired or you work in the Duncan, or even Victoria area. Houses were available at 100k to 200k in the past (work needed). Lakefront 500k, 1m plus. 5 years ago it seemed 10 to 15 % of the homes were for sale and would sit. Now hard to rent, sales happen quicker. Lakefronts are going quickly. Story on lake Cowichan http://vancouverisland.ctvnews.ca/mobile/video?clipId=897330

  64. Re: Gordon Head boxes.

    Here in Vancouver, what is most sought after these days is the roomy but boxy, tract home, “Vancouver Special” . Why? Because the city and neighbours don’t mind if those houses are ripped down and replaced by a larger home or even multi family housing. In the meantime, their large square footage per footprint size means that they are easily suitable and can be rented out for a decent amount while the home is waiting to be demolished.

    On the other hand, those beautiful half-timbered character homes in places like Kerrisdale are in less demand now because they are more likely to be declared heritage and there is a more of an attachment to them by the community.

    I think that was part of the problem with that beautiful Rockland home that went up for auction. I know one person who went to see it told me that the use was limited in that it would be difficult to alter it or replace it because of its heritage designation. You would be living the dream but it wouldn’t be a dream that you created.

    With the Gordon Head box, no one cares if it is ripped down to be replaced by a monster home or rowhouses. The key is that it’s close to the university and on the “right” side of town.

  65. Don’t get your knickers in a knot. You’ll likely be fine.

    I’m not personally worried, JJ. I’m only pointing out how long you’ve been intimating doom (and been wrong).

  66. Gordon head is a very low end neighbourhood. The houses there were built as cheaply as humanly possible under a lax building code. I just don’t see the attraction.

  67. I was also going to say that development in Cobble Hill/Shawnigan is constrained by the malahat not having capacity to facilitate commuting. Can’t really be a bedroom community until that bottleneck is fixed, and since this is Vancouver Island, the solution will be a bike path along a once viable rail line.

    Lake Cowichan could perhaps be a bedroom community of Duncan, but it’s a little out of the way and on a road to nowhere.

    I think this would certainly deter speculators/investors of the type that buy here (it’s only going to go up, up and up! Everyone wants to live in Victoria! World class!) You might find speculators snapping up waterfront (which would help explain Youbou/Lake Cowichan if indeed the market is hot), because all those newcomer milionaire Vancouver ex-pat baby-boomers are surely going to want a summer retreat to get away from the hustle and bustle of South Oak Bay and South Fairfield, right?

    I have no idea whether those communities are better indicators of the market. Just that their housing markets are different.

  68. 5 year yield now at $0.557
    2 consecutive sessions down 12% each.
    I see Fixed rates dropping in the next 2 weeks if this continues.

    Interesting article I read where 5 year fixed should be tightened up so that everyone has to qualify for higher amount.

    Also, many of the uninsured mortgages (more than 20% down) buyers are going with 30 year. Interesting because you could invest the difference between the 25, 30 year even in longer higher yield bonds and come out ahead.

  69. @Seth,
    The only other places on the island that I’ve been keeping an eye on are Cobble Hill/Shawnigan Lake and Lake Cowichan.

    Cobble Hill/Shawnigan are not like Victoria. Couldn’t tell you the sales to listing ratio, or comment on price increases, but houses do not sell very quickly. Haven’t noticed too many (if any) silly over payments. The properties that seem to sell relatively quickly are McMansion style homes in the Mill Bay area, and other new builds scattered in and around the region. The 0lder, rural homes on large lots don’t seem to be in demand. All I know is that if I move there, it’s not to buy a 3000 sq. ft home on an 8000 sq. ft lot. Too much risk of an interior decorator living in the ‘hood.

    Lake Cowichan seems to be much the same, though perhaps Gwac has more info. The town itself is depressed. There are a few river front properties that have been on the market for a loooong time, and they ain’t unreasonably priced. I suspect, if stuff is moving up there, it’s the newer build properties up in Youbou, or lake front outside the town. For what it’s worth, I’d rather live on the river.

    That’s all I got.

  70. Seth, it could also be because they’re trying to gain exposure to a wider range of buyers with a different bottom thresholds in their PCS interfaces or FSBO searches, eg., some buyers might only look at $500k-$700k, or $600k-$800k, and so would have missed anything below those windows?
    So maybe they didn’t get enough enquiries the first time around.

  71. Likely Seth, it was for the reason that you made your post. The price increase got peoples attention to take a second look at the listings.

  72. Introvert, foreclosures are a fact in any market. Even in this robust market there are foreclosures.

    And they are not all first time home owners. They are made up of all income groups and all neighborhoods.

    Don’t get your knickers in a knot. You’ll likely be fine.

  73. So here’s a little housing market riddle I’m trying to solve…

    A couple homes on the island adjusted their prices today… both upward.

    Both originally on the market for around 6 days (likely to test the weekend)

    1 of these homes was FSBO

    $599k to $635k (+6%)
    $475k to $520k (+9.5%)

    So why exactly did these price increases occur? What might this behaviour be telling us about the market?

    (1) Did they originally price the property, in their opinion, ‘low’ and not receive the traction/offers they were expecting?

    (2) Did they receive a bunch of interest and determine they could get more?

    (If so, one would assume that there was strong interest or even offers with the property and therefore odd if they didn’t work with them)


  74. But every cloud has a silver lining – the foreclosures will be fantastic bargains.

    Important fact: Just Jack has been saying variations of this since he began posting comments on HHV in 2009.

  75. “Like to hear from a broker on whether inventory is an issue on sales.”

    I’m not a broker but… since I do have good friends who just bought in April and took possession in June (the ones who are renting out the suite and dealing with putting together a lease right now) I had a relatively front row seat to a Victoria house hunt. My friends had to look at quite a few houses and put in several bids before they were successful, but at times they really felt that they had nothing to look at. They wanted to live in the city of Victoria (excluding Esquimalt and Burnside), Saanich East, or Oak Bay, but their preference was for Victoria. They had an $850,000 budget and wanted a suite if possible, although it wasn’t essential. They told me that each week they’d wait for Thursday (now listing day) to roll around and they’d be lucky if there were 2 or 3 places that appealed to them. Maybe another 1 or 2 would trickle in on Friday. But many weeks they just didn’t look at anything. I’d say that they were pretty close to giving up and continuing to rent for a while when they managed to get their place. So I do think that low inventory is probably having a huge effect on sales / buyer fatigue. It’s got to be pretty depressing out there if you’re shopping for a house.

  76. Some agents will place the existing listings on the system but it costs them money to do so. There is no reason except for getting awards that they would pay for putting what is essentially an add with VREB.

    The answer is that we don’t know how many exclusive listing are never put on VREB

  77. The Gordon Head box is the most economical home to build on a price per square foot basis. The style maximizes floor area and allows flexibility to a buyer to finish the lower level at a later time when it becomes more favorable for the family. The design also favors extended families and investors desiring to add more rental suites to a house.

    But for love of Zeus these neighborhoods are boring.

  78. “But every cloud has a silver lining – the foreclosures will be fantastic bargains.”

    You got it Jack. The 900K sale in Oaklands was the one that busted the stupid meter along with Graham in crack hood north.

  79. I think substitution works for Gordon Head to Langford for sure. It’s now 800k for a crappy war box with an OK sized yard but no sidewalks and no walkability and poor bikeability. No nice village really and almost 30 minutes drive to downtown in rush hour. I would not buy in this hood for those prices…..

  80. The other we don’t have information on are the exclusive listings. Houses that are sold in-house never being listed on the data system.

  81. Yes gwac that’s true. But that’s not what I am implying.

    Why are prices not rising in the core housing market with such a historic shortage of listings? There are a lot more bids on each house yet the median price for houses in the core remains unchanged.

    This is known as the substitution effect as people that are priced out in one area buy where there are more houses listed and/or if you are a first time buyer then you switch from a starter home to a less costly condominium.

    You can’t buy what isn’t listed but you can pay more for what is listed. Yet for a few exceptions, that isn’t happening in the market for houses in the core.

    And this is happening to both prospective purchasers from Victoria and out of town buyers as affordability is stretched to the limit. And that makes buying real estate more risky as the market is much more sensitive to internal and external economic shocks.

    I’m sure the foreign investor in Vancouver are feeling the resentment by the locals, together with so many lower mainlanders leaving that could have a significant effect on Vancouver. If Vancouver goes tits up, Victoria will follow. I seriously question anyone investing three quarters of a million dollars on a starter home in Oaklands.

    But every cloud has a silver lining – the foreclosures will be fantastic bargains.

  82. I am wondering if there are some cancellations going on here for over summer. Saw a big one day drop on the Saanich East listings from 90 to 60 in one day which I haven’t seen since been tracking last few months. People giving up for summer because their outrageous price demand isn’t met ?

    Brexit fallout in markets effects people’s wealth. If it continues I would expect sales to drop off as bankers tighten up lending.

  83. JJ

    People cannot buy what not there for sale.

    Problem is too few home sales/availability to get a proper reflection on what is going on.

    Like to hear from a broker on whether inventory is an issue on sales.

  84. A year ago was a different market than what we are experiencing today. If you want to measure the velocity of the market then you would have to look at month to month and not year to year.

    And while sales and listings are slowing median house prices in the core are not changing.

    Month Sale Price, Median
    Jan $655,500
    Feb $681,500
    Mar $740,000
    Apr $758,000
    May $760,450
    Jun $745,000 projected

    Unlike condo sales in the core that are rising

    Month Sale Price, Median
    Jan $272,700
    Feb $305,250
    Mar $289,400
    Apr $299,000
    May $325,000
    Jun $335,100 projected

    And unlike Langford and Colwood were median prices for houses is rising too.

    Month Sale Price, Median
    Jan $522,000
    Feb $489,600
    Mar $531,000
    Apr $518,000
    May $545,000
    Jun $559,500

    What is the ‘Substitution Effect’
    The substitution effect is the economic understanding that as prices rise consumers will replace more expensive items with less costly alternatives.

  85. Seth

    Everything is relative. Salaries and quality jobs are harder to come by than larger centers.

  86. I guess what I’m wondering is if the smaller centres on the island could be seen as more realistic indicators of the market.

    For the sake of argument only, Van/Vic could be argued to be world class type cities/markets, and because of that, could be more prone to irrational purchasing (due to excessive speculation).

    I would think it’s harder to make the same justifications for a place, say like Nanaimo, which while beautiful is simply not a global destination nor an economic draw for certain demographics like families.

    Less irrational = better indicator?

  87. [This poster has previously posted under the name Eve2 - admin]

    We have been holding off buying our 4th investment property because of concerns about Cad Gov doing something silly like restricting external money, which would put an end to the Govs income and plunge the country into a massive recession.

    Luckily they are educated and realize the only way to help affordability is to help the lazy and uneducated get access to communistic style government style housing projects. The new houses should quiet the noise from the vocal minority who can’t find a way to make a living in the most prosperous era in human history.

    The arrogance of entitled generations that they should have easy no competition access to the few very tiny neighbourhoods in central Vancouver as a starter home is laughable.

    Now that our dollar will (and is currently) very depressed, and interest rates will definitely go lower (more money was lost last Friday then after 2008!).

    So now that the fed also is coming round to what we all saw coming, the pressure is off on the incessant weekly threats to jump interest rates.

    Time to buy more property and watch another 25% gain by end of next year, just like we saw on our properties this year.

  88. I agree with the moderator’s comments; they are spot on.

    I think Brexit will just make the real estate market even hotter as interest rates are kept down and the stock markets experience more volatility without any particular uptrend.

    In terms of the federal announcement, it was very disappointing – just like all of the other levels of government.

    All of them are in serious denial about the tsunami of offshore money rolling into our country. All of their solutions conveniently skate around this elephant in the room.

    The province is in complete denial; the city talks about vacant homes and increasing the supply of new condos. The Bank of Canada talks about interest rates. No politician wants to touch the subject. In the meantime, immigrant investors (those who give a loan to Canada buy property here, get a passport but usually leave Canada again) continue to pour in through the Quebec program but not a single politicians has indicated this to be a problem.

    Even the NDP Opposition Leader gave some very disappointing comments today after announcing his plans to raise the minimum wage. His solution on housing was to “increase the number of co-ops” and put more money into building affordable housing. Again, not a mention about offshore investors.

    I believe there is a big space for anti-establishment politicians (like Trump or the Brexiters) to raise this issue.

    If our present politicians don’t do something, our politics in the future could get very ugly indeed.

  89. Any idea if other markets on the island (i.e. Nanaimo, Comox) are behaving the same way – or different for that matter?

    I don’t know about Nanaimo but I do know about Courtenay, Comox and Parksville as we just purchased a place in this area. Very hot market right now and desirable places are going over ask. Be careful to get your financing approved in advance as fewer lenders are willing to work in rural areas unless they actually have a branch in the town. I’d also say that working with a realtor is a plus if you don’t know the market well as there is no equivalent to HHV up there that I have located.

  90. Seth

    The Lake Cowichan area is hot also. Stuff is going quickly. One place that was for sale for over 7 years (private and agent) even went. Lake front that usually took 2 or 3 summers to sell is selling in weeks.

  91. Canada/Australia offers stability. Not a lot of that in the world.
    I guess I see why people buy houses and just let them sit empty. Its that just in case factor.

  92. The sales/list is unheard of for June. Even in the hottest Junes in the mid 2000’s it was only in the 70% range.

  93. Any idea if other markets on the island (i.e. Nanaimo, Comox) are behaving the same way – or different for that matter?

    Wondering if there’s any likelihood that Brexit will result with fueling the market? Considering potential diverted foreign investment, delays to interest rate increases, suppressed loonie?

  94. Active listing keeps going down. Got to be frustrating finding a descent property. Looks like 300 more properties will be sold in June vs 2015. 86% sales to new listings. I feel for someone looking.

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