July 18 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

July 2016
July
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 265 512
796
New Listings 354 630
1235
Active Listings 2240 2214
3942
Sales to New Listings  75% 81%
64%
Sales Projection 1002
Months of Inventory

4.95

Looks like we might just crack 1000 sales in July.  That last happened…  never.

chart (3)

From this week it seems the last was unduly affected by the long weekend.  Now sales are back to previous levels and show no particular weakness.   Inventory also continues to melt, so likely any significant weakening of the market will not be until next spring.

It will be interesting what the next round of regulatory tightening brings.   Qualifying rates for terms under 5 years were raised a couple weeks ago and the OSFI has already indicated there are changes coming.  As I’ve said before, the regulatory environment is the wildcard that can make or break this market, and right now all levels of government are either making changes, planning changes, or gathering data (badly) on what changes to make.   What will be interesting is whether they the combination of the tweaks turns into something bigger.

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141 thoughts on “July 18 Market Update

  1. Then maybe you should reconsider moving here if you can’t find anything for $950K. I see lots for sale in that range. Your story still smells to high heaven.

  2. Hawk: am from Quebec, own two rental properties, they originally cost 176k and 212k

    Prices there are nothing like here.

    We are moving to Victoria for the weather and there is great job for my boyfriend in pharma.

    Our budget is an insane 950k, and we feel priced out of a safe non toxic non issue house in a decent area of the core.

  3. Sorry folks, can’t get the charts to upload. Found at Trading Economics Canada if anyone’s interested.

    1 yr, 5 yr and 10 yr national building permits.

  4. Olympic your trolling days seem to be over.At the beginning of this thread you were a poor house hunter who kept losing out to other buyers due to your budget restraints and now you own multiple houses. Must be the same clown troll as before who was a real estate whiz in the Uplands etc.

  5. I don’t have access to the numbers but all owners and landlords are significantly facing higher costs with taxes

    I am seeing extremely small cost increases as a landlord. I focus on buying extremely small units; therefore, you just don’t see the impact when strata fees, etc., go up.

    Rents have gone up a lot more than my costs. I have a unit at the Promontory that is now $500 cash flow positive each month. I put down 25% when I bought it a few years ago.

    My personal strategy ->

    http://victoria.citified.ca/news/stay-small-a-guide-to-buying-an-investment-condo-in-victoria/

    Just want to add this strategy is not for everyone. If I had a trade or was handy, or semi-retired, or just had more time to deal with problems and maintenance I would probably go for a triplex or fourplex.

    Condos work for me as I have no free time for maintenance, but I pay the price as appreciation is not similar to that of a triplex or fourplex long term.

  6. I can understand why Marko has so many rentals. He’s in the business and he understands it and is willing to double down on his bets. It’s the poor schmuck from Sidney who is just following the crowd that gets crushed.

    I’ve am shifting my focus away from real estate at this point. The amateur investors are driving up the prices to the point where they just don’t make sense for my personally.

    494 sq/ft unit at the Union (wood framed) with NO PARKING just sold for $342,000. Purchaed in 2015 for $235,900.

    The numbers just don’t add up for me anymore. When I could buy units in quality concrete buildings for aprprox $200kish that made sense.

  7. sorry can’t figure out how to cut and paste these images. Here’s the 1 year building permits

    ?s=canadabuiper&v=201607132313n&forecast=2&d1=20150101&d2=20161231

    [I fixed the first one but it doesn’t seem to link to the graph you talk about. Not sure why, maybe link to where you can make these graphs? – admin]

  8. Hawk:

    Here is prices adjusted for inflation for the last decade.

    ______________–

    Where the heck is the bubble? You crack me up.

    So LeoM, Just Jack, and Hawk (who all are around 54 years old, and live in basement suites/apartments, still waiting for houses to go back to 1983) .. Why should we listen to you?

    The houses I own have a large % equity, and rents more then cover them, even if prices drop a bit it will be 5 years before my mortgage is up for renewal. Worst case in 5 year I’ll have to not make as much a profit on rentals.

    I just don’t see the seething fear, it’s not that complicated. You guys either never could own or just always thought it was expensive.

    If I was 54 years old, of course I would remember when houses were $35,000 in Oak Bay, of course now I would be that old guy yelling out “$700,000 for a house in Oak Bay is insane! Watch out, the SKY IS FALLING RUN RUN SELL SELL OH JESUS H CHRIST ITS GONNA RUIN YOUR LIFE FOREVER YOU WILL BE STUCK IN HELL AND THE MAN WILL ROB YOU AND FOREIGNERS TOOK R JEEERBS AT THE STEEL FACTORY!

    THEY TOOK R JERRRBS!

  9. “Hawk and I we’re both real-estate-watchers in 1981; and this market feels eerily similar to the spring of 1981 when no one was certain what the hell was happening, but something is about to implode, yet the majority of bulls think it will keep escalating. ”

    “Eerily similar” is bang on LeoM. You didn’t know when it was going to pop, but you knew something was coming down the pipe and was time to get the hell out. They kept stupidly buying back then because they thought 20% interest rates might go to 25 or 30%, which is the same FOMO, different era. All human emotion that eventually regains sanity at some point and feels like it’s beginning to with the declining median.

  10. Just Jack: in one post you try to prove that the market isn’t hot at all, and look at how little house prices have risen, and this market is just marketing and fluff. Basically saying that there was just a small blip of tiny price increases for a couple months out of the last 10 years.

    And you are right, core prices are only up 10% in 9 years. Certainly no bubble, and really bad ROI if you tried to invest.

    Then in another post you talk about how the market is so insanely overpriced that bankers will look at selling prices of contract and shut down their banks and reject all offers. You then try to prove that a summer slowdown (which is still the hottest July on record), is proof that the insane prices have literally gone off the charts and the bubble is so insanely hot that no lender would ever lend.

    Pick a point of view dude. And it seems this is your 10th (or some such insane amount of time) year posting these same predictions.

    Market here is up a small amount, same % as rest of Canada this year (9% average). It has nothing to do with Cancouver, it’s just a cycle and low rates.

  11. The slumlords are getting nervous. The core median is still down 40K from May with 2/3 of the month over with record sales and declining population. I believe its called “distribution” AKA The Greater Fool / Economics 101. It’s definitely “just getting started”. 😉

  12. Hi LeoM, just curious if you have any numbers on the impact that QE, or as Flaherty dubbed it “liquidity support”, has actually had on Joe Public.

    The 114 B that was distributed to various Canadian banks in 2008 might not be filtering down to the Mainstreet. I wonder how much of that money simply went into capital reserves to plump up the cushion for these banks when the Canadian RE market goes belly up.

    Also, what DOES trickle down seems to trickle down in the form of mortgages which basically takes liquid and freezes it. Not much help to drive to the economy. I saw somewhere as well that Canadians are hoarding cash (on some CIBC report) which slows things further. Are we grinding to singularity?

  13. It’s nice to see Jack trolling away another summer with his seasonal-slowdown hook 🙂

  14. It happened when someone brought in a mortgage application and the banker took a look at the astronomical price and said I’m not lending on this. Then other lenders began to do the same.

    Now they would say, “I’m not lending on this, toss it over to CMHC and let the taxpayer take the risk instead or package it up in a mortgage backed security and sell it”.

  15. On the topic of population, here’s the last few years of increases for Victoria CMA:
    2013: 1.2%
    2014: 1.1%
    2015: 0.9%

    Those few Vancouver buyers can have a big effect on the market but they don’t add appreciably to the population. We probably have 300 people die off every week.

  16. (Liked your joke about the “short man”…and the rain:)
    For what little it is worth…..My crystal ball says Victoria is simply taking a breather. It will take some time to digest what has happened.
    The bottom line is that there is still low supply and people are still moving to Victoria.
    I believe that come next spring…… The market will do this all over again.
    No one knows.
    But house prices here are still cheap….. for such a spectacular city surrounded with beautiful beaches, the best weather in Canada, growing tech centre and building opportunities for workers, investors etc etc.
    This city is just getting started and it’s an exciting place and time to live here.

  17. I don’t have access to the numbers but all owners and landlords are significantly facing higher costs with taxes (one of the main big expenses), changes in insurance requirements to all structures or no insurance will be issued and therefor no mortgage secured, higher labour for building costs…framing up 30%, higher material costs. Everyone is playing on the same field and so rents will move up significantly or no further units will be built. The only other option left for landlords would be to take the rental unit out of the rental market and switch to air BNB. And that is happening. This will cause rents to rise because supply will shrink even further. The only way for this to change is for governments to lower taxes, and also flood the market with new supply. Instead….the government raises taxes thinking that they are making more money, but what really happens is that they pick up the increased costs at the other end with social breakdown, policing costs, and peoples lives ruined…… who don’t pay taxes.

  18. Our population may not be exploding but we do have fewer persons per household than in the 1980’s. And the number of home owners with multiple properties has never been higher.

    I can understand why Marko has so many rentals. He’s in the business and he understands it and is willing to double down on his bets. It’s the poor schmuck from Sidney who is just following the crowd that gets crushed.

    He is like a short man in a rainstorm. The last to know it’s raining -the first to know it’s a flood.

  19. It does seem that we are at a point of stagnation in house and condo prices in the core districts.

    Although we have low months of inventory with new listings just replenishing sales and the days on market being less than a month, median prices for houses and condos are not increasing.

    Month Sale Price, Median
    Feb $681,500
    Mar $740,000
    Apr $759,500
    May $760,450
    Jun $743,000
    Jul $721,250 so far this month

    Month Sale Price, Median core condominiums
    Feb $305,250
    Mar $289,400
    Apr $299,000
    May $325,000
    Jun $338,550
    Jul $320,900 so far this month

    And the number of sales is falling

    Month Sales, Number of houses
    Feb 228
    Mar 318
    Apr 376
    May 338
    Jun 291
    Jul 138 so far and projected to be 200

    Month Sales, Number of core condominiums
    Feb 176
    Mar 224
    Apr 232
    May 307
    Jun 254
    Jul 164 project to match last month at around 250

    All this happening in what conventional wisdom has called our hottest real estate market???

    A long time ago, a banker explained to me how he saw the market collapse in the 1980’s. It happened when someone brought in a mortgage application and the banker took a look at the astronomical price and said I’m not lending on this. Then other lenders began to do the same.
    That’s how he saw it happen. Only now do I see the wisdom behind his words.

  20. LeoS said: “Population is not exploding here.”

    I know the official statistics that are prepared by the academics support your statement, but I doubt if it’s a truism in the context of real estate market purchasers.

    Something has happened in the Victoria RE market that has all the earmarks of rapid population increases. Forget about the normal 5% foreign buyers and 15% non-Victorian purchasers; something fundanental has changed. It’s no secret that I attribute some of the change to QE cash and house hoarders and investors, but something has changed in the RE buyer dynamics; à la 1981. Maybe all the adult children living in the parents basement have finally decided to move out and buy a home.

    Hawk and I we’re both real-estate-watchers in 1981; and this market feels eerily similar to the spring of 1981 when no one was certain what the hell was happening, but something is about to implode, yet the majority of bulls think it will keep escalating. Maybe it’s as simple as the CBC journalist Don Pittas states; the central banks have made cash worthless, so everyone wants hard assets, like RE. Hindsight will be 20/20 after the correction.

  21. “It doesn’t work the other way around, you can’t build and charge more just because it cost you more.”

    Amen LeoS. Maybe this discussion can be put to rest. Owners have to suck it up if they want to be business people and want strangers to pay off their mortgage.

    Right now the owners/landlords have the upper hand, but a few years ago they didn’t with free rent for a month and $100 for anyone referring a new tenant. I’m sure those days will happen again in the not too distant future as the cycle completes.

  22. The thing about Vancouver buyers is that they have a lot of effect on the market because they represent pure demand. No other type of buyer does this.
    The first time buyer increases demand in the market but reduces demand in the rental market by vacating their unit.
    The move up/down/sideways buyer generally buys one unit and sells another so they have a net zero effect.

    The opposite of an out of town buyer is one that dies. That kind of buyer represents pure supply addition with no increase in demand (other than maybe a plot in the graveyard)

  23. That’s not the assumption. Victorians wouldn’t be bidding so high if it wasn’t for the increased number of competitors from Vancouver. When you have an increased # of interested buyers, the bids go up. Case in point: the realtor that advised his clients to decide on bids based on multiplying $10k by # of bidders, eg., 6 bidders, $60k, and so on. So Victorians or Vancouverites can win if they price it right.

  24. The “highest price” sets the market price irregardless if it is a out of town buyer or a local buyer.

    The assumption that you and money sense are making is that local buyers can not compete with out of town buyers. That is incorrect, as Victorians are out bidding Vancouverites on most of the properties. Almost 70 percent of the purchases are made by people from Victoria while only 6 or 7 percent of Vancouverites are successful.

  25. as population explodes.

    Population is not exploding here.

    Result: Rents for those units are going to be high.

    You’re mixing up your cause and effect. Rents are high because vacancies are low. The cost to build does not set rents and never will.

    I would accept that the cost to build affects vacancies (by restricting new supply), which in turn affect rents. So they are related, but it doesn’t change the fact that landlords cannot pass on costs to renters unless the market already supports those costs.

  26. It was a quote from that MoneySense article (should have put it in quotes) – see “Factor #4”:
    http://www.moneysense.ca/spend/real-estate/buying/whos-to-blame-for-high-home-prices-demographics-for-one/

    “While many downplay this factor (“it’s only X% of the buyers!”), Economics 101 will tell you that the marginal buyer sets the price; and, if you introduce a wave of new buyers on an already tight market, prices will soon reach for the sky as the demand curve shifts even slightly to the right.”

    (marginal buyer pays market price – which in this case – is determined by the increased demand and prices offered from the wave of new buyers)

  27. Vicbot, I don’t understand what you mean when you say that marginal buyers set the price.

  28. That’s one of my concerns as well, Bitterbear. There have been articles written about the farmland risk:
    http://www.cknw.com/2016/02/11/new-concerns-about-shadow-flipping-affecting-farmland/
    BC Housing Costs Could Threaten Food Security
    http://www.theglobeandmail.com/news/british-columbia/bc-housing-costs-could-threaten-food-security-study-finds/article29554768/

    (G&M also wrote about how foreign companies are buying BC farmland for carbon tax credits)

    Deryk, just an anecdote, but I also saw what you’re saying about costs increasing and landlords passing that along between the 80s & 90s. Before Victoria investors started purchasing condos to rent, the vast majority of apartment rentals were in purpose-built rental buildings. When all sorts of individually-owned condos came on the market, I saw that rents for many 1 bedroom units jumped to over $1000 – one could argue that maybe they increased because of the condos having upgraded appliances, fixtures, etc. But these condos were tinier on average than purpose-built apts. It was a factor in rents increasing in general (which perhaps later led to some renovictions).

    Also, in any market, when you have increased demand from new buyers (eg., Vancouver), and they have more money to spend, prices go up. Even if the majority are still Victoria buyers, it’s the marginal buyer that sets the price.

  29. Yes vicbot, that is where I was going with that. If I read the tax bulletin correctly, assignments are not registered so they are not subject to PTT. that means that while de Jong’s report of foreign ownership extracted from the PTT forms shows only 5%, it might only reflect the level of participation of foreign human buyers not corporations and it does not reflect the true impact of foreign activity in the market.

    If I read the rules on capital outflow from China correctly, it is easier for a Chinese corporation to acquire foreign investments than an individual.

    This begs the question then about the massive spike in PTT over the last three years. Average BC incomes are about 70,000 with average BC household expenditures of 80,000. I can’t see domestic buyers driving this. If only 5% of buyers are foreign, then corporate buyers might be the uncounted piece. Also, I wonder if the PTT revenue is expanding so dramatically, not because of just the velocity of sales, but rather the value of sales and I am a bit spooked to think that some of these sales might relate to large corporate purchases including things like water and timber rights.

    I have this kind of sick feeling that the BC Liberals sold us out.

  30. I have found no evidence of what your saying to be true Deryk. And if I could find it, I would gladly post what I found.

    I hear the anecdotes but I can’t find the evidence to show what you are saying has had any effect on Victoria. In fact I find it is the opposite. It has been Victorians that drove our prices higher. I suppose it could have been the fear that Vancouver or China or wherever was about to overwhelm us. And that has just as powerful psychological effect as if it were true. When prices went up, then that became the proof needed by so many that it was really happening.

    I don’t deny that there are more buyers from Vancouver over the same time last year. But it isn’t that significant to our market. In the first 6 months of last year there were 146 sales to people from Vancouver. This year it has been 380. That’s a big increase. But there were a total of 6,075 sales in the first 6 months too. And they were buying in all areas and all price ranges.

  31. Thank you for confirming what I have been trying to get across to some people on this forum.
    It’s just a logical thing to happen.
    Who even needs a job in Victoria if they just sold a house in Vancouver. They can buy a similar house in Victoria and stuff two or three million dollars in their pocket. (Or buy more houses and live off the rents.)

  32. Sorry Leo….you haven’t told me anything I didn’t know before.
    All I can respond with is watch what is about to happen.
    Rents are going to go up because Victoria has a crisis in supply as population explodes.
    The new units coming on stream are expensive to build. Why?
    *Building permit costs are going up.
    *The costs of tearing down the old place are going through the roof. (Dealing with lead paint, asbestos in materials, etc etc.
    *Material costs are going up big time.
    *Labour costs are going up
    Result: Rents for those units are going to be high.
    Further results: Rising rents for the new construction ……bring up all the other rents.
    This can only happen if supply is low. No one would argue with that.
    But the fact is…….there is a low supply and it will be lucky if the new buildings coming on stream will ever be able to keep up with the inflow predicted.
    I’m done now….I am just going to coast for a while and observe:)

  33. there will be no more units built or provided if landlords can’t pay for their increased costs

    Correct. That’s how markets work. A clear example is the rental projects in Victoria. In the 60s there was a building boom. Then nothing until just a few years ago when they started being built again. Why is that? Because rents increased and made it profitable to build rentals again. It doesn’t work the other way around, you can’t build and charge more just because it cost you more.

    I don;t understand why you would be in denial that increased costs to the landlords will not have an effect on rent increases

    Because that’s not how markets work. Let’s say I am a really terrible landlord and I buy a place that needs $300,000 in soil remediation work because I forgot to scan for buried oil tanks. Can I recover that cost by raising my rents? Definitely not. I can set rates to what the market will bear, and no more.

  34. “The pressure from Van is intense….”

    Yep. I’ve spoken to several Vancouver friends recently who are utterly priced out of anywhere they’d really like to live in that city. Three of them are actively trying to figure out how they can arrange their jobs so that they can move to Victoria (finding new jobs entirely or telecommuting). I mentioned the big jump in Victoria prices to one friend the other day and his reaction was to say that he wasn’t surprised because moving to Victoria has become a regular topic of conversation among his 30-something year old peers. No one seems to want to leave Vancouver but they don’t see how they can stay. They all consider Victoria to be very affordable because they’re so used to Vancouver prices.

  35. “Just Jack”….I appologize. ( Please accept my appologies even though I don;t know how to spell it:)
    Deryk

  36. I have empathy for renters. It is not easy.
    It has just been my experience that it is never cheaper to rent at any time. The cost of renting always comes sometime. That cost comes in different forms. Getting an eviction notice because the landord decides to sell or live in the house. No one factors in the cost of moving yourself or your family down the road.
    When I was a young man I worked hard to renovate a basement suite so that we could afford our mortgage. The house was in Kerrisdale in Vancouver and we paid $50,000.00 for the house.
    It was difficult to have to listen to my friends back then say…. “Why are you wasting your time renovating this old place”. They would then say they were off to Europe in a few days instead of getting tied down with a mortgage. Well….. Thank goodness I didn’t see it that way.
    And so I am trying to encourage young people to try and get their own house instead of renting. It’s not easy and it’s harder than ever. But there are situations out there if people think outside the box. Perhaps a move? Many people move to where they can afford to raise a family. I always liked the idea of living in New York….but could never afford it. My advice is talk to a mortgage broker instead of a bank. I rarely use bankers. Bankers are fools in my opinion. They don;t value someone with building skills who can fix up and improve a house. They don;t value rental income. They don’t value equity. They don’t value the fact that a number of young people wanting to buy a house together as a group. They are too ridged in my opinion and overlook great attributes that people have. I’ll give you an example: I know a young man who was wanting to buy a house and he had his family help him with a sizeable deposit. The banks insisted that the family be on the title for one percent. This meant that the young fellow no longer qualified for the first time home buyers grant of ten thousand dollars. He would have lost that opportunity for ever just because the banks required the one percent of the parents on the title. Even though he was putting down one hundred thousand dollars on a $375,000.00 property. He went to a broker instead. The bank lost the opportunity to have the young man as a client. (The banks also lost three other mortgages as a result but they don;t know that.)

  37. I wouldn’t leave simply because my kids are fifth generation VI. I feel connected to the land and don’t want to move and I’m willing to pay more for this. I enjoy taking my kids to the same places that my grandparents and great-grandparents frequented.

    Personal history apart, Ottawa is nice, but it is not Victoria in terms of climate or topography. I expect there are a lot of people willing to pay more to live in Victoria at cheap interest rates. I would go somewhere else to make and save the money for a down payment though. Hard to save when rent is high.

    But you are right that, at some point, some millennials will make different choices based on house prices if they keep rising like they have been. I think more are either buying a home with a suite or buying in Langford. We aren’t at Vancouver levels where it is no longer feasible to do this within a reasonable commuting distance.

  38. Leo…… there will be no more units built or provided if landlords can’t pay for their increased costs. I don;t understand why you would be in denial that increased costs to the landlords will not have an effect on rent increases. (Of course it goes along with supply and demand as well. But I am talking about in an extremely tight market like Victoria).
    The draconian and costly measures being introduced by insurance companies is going to have a serious effect on everyone and one can chose to ignore it…….or taken as a heads up and plan accordingly.

  39. I don’t see many affordable rentals for families. Renting cheap is not possible for many.

    By starting out I mean before starting a family. If I was planning on starting a family I would probably leave. Ottawa for example. Just as much tech industry and average house price some $300,000 less.

  40. I can’t help but think that Victoria’s demographics are part of the reason we’ve seen such a high amount of activity over the past 18 months or so. There was a post on this a few months ago (https://househuntvictoria.ca/2016/03/07/demographics-part-one/) but in addition to foreign and Vancouver buyers there are tens of thousands of people in the 20-34 year old age range. These people might not drive prices too much higher but I think they will continue to produce demand.

    If my experience out there means anything there are plenty of young couples in this city waiting to enter the market. Yes, we often receive help from parents or maybe use an inheritance to help with a downpayment but there are plenty of young professionals in trades, tech, health care, government, finance etc who, together, can afford mortgage payments on a $700k house. Add a suite into the mix and it makes it even more affordable.

  41. could you “really” be so naive as to believe that these costs will not get passed on to the renters overall? Especially in a tight rental market such as Victoria.

    It’s not naive to understand supply and demand. Yes rents are definitely going up in Victoria. That is because the vacancy rate is extremely low. Landlords will raise rents to what the market can bear for new tenants, and increase towards the max allowable for existing ones.
    It has exactly nothing to do with increasing costs for landlords.
    The only impact the increased renovation activities might have is on so called renovictions. With more work being done, renters may be tossed out and the rents raised after renos are done.

  42. 1957 Granite – annoyingly priced to try to create a bidding war. It is priced under the BC Assessment value. It is a nice location, but right next door to an unkempt rental duplex.

  43. @deryk, I agree that negativity does no one any good. However, scepticism can be a useful combo with optimism. I think you actually mean Victoria is “relatively” cheap. 800k for a crappy house in a hood that has no walk-ability, is far from the water, is a 40 minute bus ride to town including the walk and wait and has poor bike routes is far from cheap….Comparing it to the fact the same thing costs 3 million in Vancouver only makes it scarier IMO. Victoria was cheap in the late 90’s and early 2000’s. It was literally cheaper than renting, rates were on the way down from 7% and wages were on the way up. It was affordable in the 2010’s because people were cowering from the market, prices had settled at 2008 prices, and rates had declined to historic lows. Now rates have been riding the bottom for a while with constant tension to start going up, wages are flat, and prices have popped 30% in some case. Hardly a no-brainer to buy at any cost right now. That said, I am renting right now and is SUCK!!! So I feel for all you HH’s. You are in a tough spot right now. The pressure from Van is intense….

  44. That’s true James. But so what???? It’s like saying that research should be ignored because sometimes it turns out wrong. Do you have a better plan? I trust research. And yes…..sometimes it will not work out. That’s why I always plan for the best and prepare for the worst. I never bet the farm.
    Surround yourself with positive minded people. Misery attracts misery.

  45. @deryk All the big players do their homework. That’s why there was never a bust in condos in Toronto 30 years ago. It’s why there haven’t been holes in the ground in Victoria for over 20 years that are just finally being filled, like that one right next to the Odeon.

  46. Thank you soooo much for your comments Hawk. There is so much bad news coming from around the world that your comments leave me laughing so hard I can’t stop:)
    I am an old man. When my dad bought a house in Kitsilano back in the sixties for $11,000.00 people then said that he was buying at the top of the market and that he was crazy. I’ve seen this story repeat itself all my life.
    This doesn’t mean that markets go up forever. I’ve seen drops and have seen people get hurt because they haven’t had “the ability to hang on” until things turn around….. as they always do.
    The fact that a Dubai company is building and investing in Victoria is not simply someone trying to fluff up the market. It is a fact and it is worth noting. The fact that Malls such as Mayfair Mall are about to be significantly overhauled is a sign that the big players see a larger trend. They have done their homework and can see that Victoria is about to grow significantly.

  47. “The insurance agencies are imposing dramatic requirements for insurance. (Something I’ve noticed over the past couple of years). These changes will result in major expenses for landlords, owners of houses, and will reflect in the cost for renters.
    (On another note: Interesting to note that a Dubai company is investing in Victoria big time.)”

    If you think every joe homeowners basement can be jacked up $200 to cover his increased costs I think there will be a lot of vacancies soon. The $1500 to $1600 range is the limit. Most would downsize or just leave Victoria which leaves many extra mortgage payments for joe.

    Funny, I thought Dubai money was going to buy Bear Mountain at the market top for $400 million back in 2007 and they balked and the place went tits up. The TC couldn’t stop writing about it for months. Why would they buy in big at another market top ? Sounds like more RE marketer bullshit trying to keep the pump alive.

  48. when any place is close by, you will get a ripple effect of prices

    Completely agree with you there. I’ve changed my mind on this one and believe that a big part of the insanity is driven by the spillover from Vancouver. And certainly with today’s market conditions more price increases are virtually guaranteed.
    I just think that in the past an argument could still be made that Vancouver prices were somehow rooted in local fundamentals. Now that is out the window and the whole thing is far too speculative for me. Victoria is not there yet but at this rate will quickly detach as well

  49. We are being sucked into the vortex, but the assumption that because prices have risen in the past they will always continue to rise in the future is a dangerous one.

    Totally agree with this. I don’t know what prices will do in Victoria. My best guess is that they will not continue to rise into the stratosphere like Vancouver. There is enough information out there that credibly points to foreign buyers buying through legal means as the catalyst for Vancouver and TO’s markets that I believe this is the root of the problem. At some point I also believe there will be a federal and provincial response that will temper the attractiveness of Canada and BC on the global scale for RE investment. Australia, NZ and many other countries have or are imposing additional taxes and closing down investor programs or dramatically raising the buy-in. That will, imo, temper the market and have an effect on Victoria.

    If I was starting out in Victoria today I would rent cheap…

    I don’t see many affordable rentals for families. Renting cheap is not possible for many.

    Plenty of places with opportunity where you don’t have to become a debt slave if you want to buy a house.

    Yes, although tax-free appreciation on a high cost leveraged asset can be a faster way to get ahead than almost any other investment and you get a place to live. All those people in Victoria who are in 700k houses are getting 28k in tax-free appreciation per year compounding if the past is any indicator of the future. If you can cash out on your house in a HCOL place and bring the equity to the LCOL town this seems like a win. And appears to be what some Vancouverites are doing here.

  50. Bitterbear, yes I see your point – a lot of transactions are missed when assignments (or people behind numbered companies) aren’t being added to the count.

    With shadow flipping (assignment clauses), there can be multiple buyers before the final closing date. That’s how the realtors make multiple commissions. Diagram explaining it here including problems in City of Van & Richmond:

    http://www.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/
    “In one sample of 250 houses sold and resold in Vancouver’s West Side for more than $2-million in recent years, 11 per cent involved buyers and sellers with the same names as real estate brokers. ”

    “The Globe also reviewed records of 1,585 building permits issued in the suburb of Richmond since 2011. More than 200 of the single-family properties – 14 per cent – were owned by people who were brokers or shared a name with a broker; or by a numbered company with a broker listed as a director. Some owned multiple properties. A sample of 2015 Vancouver building permits yielded similar results. ”

    That July 19 Province article by Sam Cooper also showed the couple being sued bought multiple properties with numbered companies, and their total investment in Vancouver properties is $150M.

    Instead of the BC government’s PR consultants trying to downplay these issues (because these are serious issues that affect every taxpayer), they should be announcing efforts to find everyone that owes them the PTT. Especially when Bob Rennie says that 50% of >$4M properties are bought by foreign investors.

  51. True enough. In reality…both are factors and with Victoria being such a tight rental market with such a dramatic lack of rentals……these new costs will result in higher rents. No landlord or home owner is going to be able to insure their property unless they make the changes and so landlords will be faced with costs such as changing heating systems (removal of large oil tanks in the house) older roofs with asbestos removal costs, cast iron main plumbing stacks, electrical wiring upgrades…. could you “really” be so naive as to believe that these costs will not get passed on to the renters overall? Especially in a tight rental market such as Victoria.

  52. these changes will result in major expenses for landlords, owners of houses, and will reflect in the cost for renters.

    Rental rates are set by demand and not by the owners costs. For example: two identical houses, one with a 95% mortgage and one fully paid off. The owner of the mortgaged house has much higher costs but his house won’t rent for a penny more than the house that costs little.

  53. If there is anyone out there who does not believe that the Victoria housing market is going to explode over the coming years….you might want to read the following article on the dramatic changes coming.
    http://victoria.citified.ca/news/exclusive-over-20000-victoria-rental-apartments-due-for-major-renos-or-replacement-by-2025/
    The insurance agencies are imposing dramatic requirements for insurance. (Something I’ve noticed over the past couple of years). These changes will result in major expenses for landlords, owners of houses, and will reflect in the cost for renters.
    (On another note: Interesting to note that a Dubai company is investing in Victoria big time.)

  54. Thanks for the respectful comment Leo.
    Your clear comment does point out to me how people could think that I was comparing cities when I agree that it is impossible to do so.
    What I should have said is that when any place is close by, you will get a ripple effect of prices. Example:The Kitsilano area versus the east side of Vancouver area (Main street etc). If the Kitsilano area goes up in price then it is a given that the houses on Main street generally go up as well because in comparison, the Main street houses seem cheap in comparison.
    The same thing happens as you extend the ring outward. Victoria is very close to Vancouver and so has historically always been close in price. (Victoria always being less than Vancouver because Victoria is not Vancouver) But when Vancouver prices started to rise about eight years ago, for the first time ever….something strange happened. Victoria prices generally didn’t budge. I found that very odd because it had done so historically for the past twenty five years. Over the eight years the gap kept widening and it seemed very odd that Victoria was not budging. The market stayed flat.Three years ago, our family thought that was odd and so we invested in a number of houses as best we could because we thought that Victoria houses were very “cheap”. The wave of the ring is moving out. Victoria, Esquimalt, langford, Sooke. Some people say the Victoria market is crazy.
    I say it is doing exactly what is logical. I say it is cheap.

  55. There is no purchase until the property is transferred at which point the PTT is paid.

    There is no transfer of the property, only the right to buy it, when the contract is assigned by the assignor. The assignee does pay the property transfer tax.

    I don’t really see your point.

  56. Does anyone know or can anyone confirm for me:

    When a contract of sale is assigned, is there no property transfer tax paid by the assignee?

    If this is correct, maybe that’s why deJong’s numbers are out of whack. I believe he took his numbers from the PTT filings which would not capture assignments.

  57. I never compared Victoria to Vancouver.

    Sure you did. You’re saying Victoria is cheap compared to Vancouver. That would be a comparison. And JJ pointed out many other towns are much cheaper. Of course none of those are the special flower that is Victoria, but I find comparison between cities pretty unproductive. Everyone has their own story about why their city is special.

    Just because Vancouver has gone into fantasy land prices doesn’t mean the rest of the country is about to detach from reality too. We are being sucked into the vortex, but the assumption that because prices have risen in the past they will always continue to rise in the future is a dangerous one.

    If I was starting out in Victoria today I would rent cheap or get the hell out of here. Plenty of places with opportunity where you don’t have to become a debt slave if you want to buy a house.

  58. Well “Just Jack”…I’d like to have an intelligent conversation with you but it’s impossible to do that with someone who is incapable of taking the time to read what I actually said.
    For example: (And there are several)
    I never compared Victoria to Vancouver. If I did that I would have to conclude that Victoria prices would be the same as Vancouver.
    Victoria will never be Vancouver for a number of reasons. For example: Victoria generally does not have head offices like Vancouver has.
    I could go on but there is no point. You sound like a sad, disgruntled, angry man who always sees the glass half empty.
    I prefer discussing ideas with people who are more positive minded.
    Good luck to you.

  59. Starting Monday, Provincial Government to impose new measures to quell the hot real estate market?!?!

    Quote from CBC news:
    “…changes will be announced when MLAs return to Victoria for a rare summer legislative sitting to address both the City of Vancouver’s request for an empty home tax and affordability on the whole.
    “Starting on Monday you will get a better sense of some of what the government believes is appropriate in terms of assisting. Clearly we have some choices we can make due to increased revenues,” added de Jong.”

    Email the Premier if you think de Jong is in a conflict of interest situation because he has an interest in several RE investment properties. de Jong’s comments hint that he won’t do anything to quell the hot market; instead he might just throw money at first time buyers to help them buy an expensive house. I smell the old BC Government second mortgage being resurrected again.
    Email: premier@gov.bc.ca

  60. I don’t buy the comparison of Vancouver to Victoria or any city to city comparison. Every city is different and those that are more attractive will be more expensive. The fact that City A is more expensive than City B does not mean that City B is a bargain. It means that City B is less attractive than City A at the top of a cycle and at the bottom of a cycle. While arguably the cycle fluctuations are not constant across locations, City B is still not a bargain if you buy at the top.

  61. LeoM,

    Even if you believe DeJong’s fraud numbers the percentages of foreign cash is overwhelmingly from China.

    More has been done daily in last couple of months to make it the #1 media topic and it isn’t going away. To think the average Canadian doesn’t want action now is out of touch with reality.

    Ross Kay is quoted on Garth saying foreign cash inflows have dropped off huge from $4 billion earlier in the year to half a billion. That translates into something is being done behind the scenes or Chinese investors have changed their investment plans. Either way a change is afoot.

  62. Hawk, it’s only the “market top” if our Provincial and Federal Governments stop the flood of foreign cash into Canada and tighten lending rules for foreigners. The foreign cash isn’t just from China, but from all corners of the globe; notice all the Russian and American accents in your Victoria and Vancouver neighbours recently? QE has pumped trillion$ into the global economy, and all the recipients of that QE cash want a safe haven (like Canada, New Zealand, etc) to convert their QE cash into hard assets, like RE. But, there is no question the Chinese factory owners are swimming in QE cash.

    http://www.bloomberg.com/news/articles/2016-07-21/chinese-companies-are-turning-japanese

  63. Deryk, I applaud your pride of community. And I understand how you want to compare Victoria to an international city like Vancouver. This is something we all do as humans – we compare up. Those that believe in reincarnation always imagine themselves as the Pharohs and royalty of past civilizations. Never as the one who cleaned out the ditch toilets in ancient Rome.

    Victoria is not in the same league as Vancouver. Even the City of Surrey has more inhabitants than all of the 13 municipalities combined for Victoria. In fact the City of Victoria is quite small about the same population as Chilliwack. The problem has been and will always be that Victoria is at the southern tip of an island. 3 or 4 hours drive away from Vancouver. And that puts cities like Kelowna and Kamloops within roughly the same driving time of Vancouver. Most certainly Nanaimo is ahead of Victoria since the ferry is right at the city. In Victoria you still have a 40 minute drive from the ferry after a 1.5 hours on the ferry and another 30 minute drive from downtown Vancouver. If there are no ferry delays and the ferries are running on every hour.

    So Deryk, I applaud your pride in our little city at the far left hand side of Canada. Just as I applaud Melania Trump as she praises the Donald – but then – she has to sleep with him too.

  64. I hate seeing people get burned at market tops by clueless people saying it’s so cheap relative to some major city in the world temporarily flooded with foreign cash causing distorted prices without comparing real economics.

    How about some real mortgage numbers for average incomes and families , and for when rates rise. Never see that from those who say we’re so cheap cause everyone has bottomless wallets.

    How about those multi millions of bankrupt folks in the US who thought it was a good idea to buy at the top? Didn’t work out too well.

  65. Had a friend just come up with an interesting theory. Prices have appreciated % wise the most where the % of Vancouver buyers is the highest. Looking at the numbers seems to hold.

  66. I’m not sure that Victorians are “looking for more” Hawk. Do we think that Victoria prices are low when compared to Vancouver …then yes. It’s not about wanting more. It is simply making a comment that Victoria real estate is still inexpensive compared to Vancouver.
    The only reason I get involved with any of the comments is because I feel sorry for people who hold back on buying a property when it clearly is a good deal. I’ll give you an example: Several years ago I was looking at buying a property and when I went around with the agent, they kept telling me that $200,000.00 for a house was “way too much” to pay. Well, we thought the prices were very reasonable and went ahead and bought. I’ve been watching people hold back for years on buying a house and I’ve seen them miss out time and time again on getting into the market because they thought two hundred was too much to pay for a house in paradise in those days. I can’t stand seeing people miss a good opportunity and that is what I see today. Watch what happens next spring in Victoria. They will go up another hundred or two hundred thousand dollars. And still be one third or more less than Vancouver. So…my point….don’t miss out if you are considering buying a house in Victoria. Don’t listen to the doom and gloomer’s. It’s not about greed. It is about securing a home for you and your children’s future. If you rent, then be prepared for the rents to increase every year. More importantly…….you can get kicked out at any time and you will have to move. Be your own boss if you can possibly do it.

  67. LeoS,
    CMHC is on a pumping campaign like David Learah of NREA did at the top of US bubble. Calling no condo bubble in Toronto is called trying to calm the masses before the inevitable.

  68. Sorry “Just Jack”…but your list of other cities as “other” examples of bargains…is outright silly. Victoria is a city with the best climate in Canada. It also is the centre of our provincial government. Are you serious when you mention one hundred mile house as also a bargain? I actually like hundred mile house…but it is no comparison to Victoria BC when it comes to comparisons to Victoria.
    Victoria has several theatres, restaurants of all cultures, universities, symphonies, art galleries, various high tech industries, shipbuilding etc etc. PLus warm winters. (Very small heating bills for example)
    I really have a hard time of seeing your point. Perhaps I am missing something. What I said was that your claim that Victoria prices are no longer a bargain when compared to Vancouver prices. I am saying that Victoria is still an amazing bargain if you are comparing it to Vancouver prices.

  69. I have to laugh at Victorians who think this place is worth way more than it is. You just got a $150 K gift or more within a few months and you still want more. Talk about greed.

    It’s the end of the cycle not beginning. When US interest rates start to pop mortgage rates we’ll see how cheap it really is, or gets.

  70. Then Deryk, these cities must be an even better bargain for Vancouverites

    3 Abbotsford Large urban 149,855 140,275
    4 Kelowna Large urban 141,767 128,127
    5 Nanaimo Medium 88,799 84,100
    6 White Rock Medium 82,368 74,023
    7 Kamloops Medium 73,472 70,549
    8 Chilliwack Medium 66,382 58,593
    9 Prince George Medium 65,503 65,066
    10 Vernon Medium 44,600 42,731
    11 Courtenay Medium 40,809 37,435
    12 Penticton Medium 36,902 35,846
    13 Campbell River Medium 34,514 33,121
    14 Walnut Grove Small 27,969 25,683
    15 Duncan Small 24,479 23,157
    16 Parksville Small 24,326 23,740
    17 Port Alberni Small 20,503 20,189
    18 Cranbrook Small 19,364 18,373
    19 Fort St. John Small 18,699 17,697
    20 Terrace Small 15,569 15,415
    21 Squamish Small 15,051 13,148
    22 Quesnel Small 13,566 12,641
    23 Powell River Small 13,175 12,972
    24 Aldergrove Small 12,778 12,363
    25 Williams Lake Small 12,408 12,475
    26 Prince Rupert Small 11,838 12,128
    27 Salmon Arm Small 11,810 10,791
    28 Dawson Creek Small 11,583 10,994
    29 Nelson Small 10,520 9,529
    30 Trail Small 9,276 8,956
    31 Castlegar Small 8,992 8,402
    32 Ladysmith Small 8,841 8,467
    33 Gibsons Small 8,089 8,023
    34 Whistler Small 7,699 7,796
    35 Sechelt Small 7,251 6,773
    36 Merritt Small 7,189 7,148
    37 Sooke Small 7,136 6,174
    38 Kitimat Small 7,046 7,600
    39 Revelstoke Small 6,772 6,869
    40 Kimberley Small 6,723 6,199
    41 Summerland Small 6,704 6,345
    42 Duck Lake Small 6,281 5,643
    43 Smithers Small 5,473 5,257
    44 Creston Small 5,379 4,944
    45 Oliver Small 5,175 4,754
    46 Osoyoos Small 4,855 4,752
    47 Armstrong Small 4,830 4,258
    48 Fernie Small 4,811 4,621
    49 Dallas Small 4,445 4,348
    50 Grand Forks Small 4,274 4,237
    51 Hope Small 4,234 4,455
    52 Fort Nelson Small 3,902 4,514
    53 Golden Small 3,701 3,811
    54 Fruitvale Small 3,628 3,627
    55 Shawnigan Small 3,543 3,586
    56 Port Hardy Small 3,515 3,290
    57 Rossland Small 3,491 3,207
    58 Sparwood Small 3,460 3,358
    59 Cumberland Small 3,381 2,737
    60 Mackenzie Small 3,300 4,316
    61 Kent Small 3,182 2,908
    62 Lake Cowichan Small 3,159 3,082
    63 Chemainus Small 3,035 2,937
    64 Invermere Small 2,955 3,002
    65 Enderby Small 2,932 2,843
    66 Princeton Small 2,724 2,780
    67 Tumbler Ridge Small 2,700 2,444
    68 Elkford Small 2,518 2,443
    69 Port McNeill Small 2,505 2,623
    70 Chase Small 2,495 2,409
    71 Sicamous Small 2,441 2,676
    72 Burns Lake Small 2,390 2,778
    73 Pemberton Small 2,369 2,192
    74 Fort St. James Small 2,278 1,876
    75 Chetwynd Small 2,255 2,218
    76 Houston Small 2,246 2,304
    77 Aldergrove East Small 2,203 1,048
    78 Lillooet Small 2,068 2,111
    79 Logan Lake Small 1,975 2,072
    80 Blind Bay Small 1,738 1,684
    81 Lumby Small 1,731 1,634
    82 One Hundred Mile House Small 1,721 1,683
    83 Ashcroft Small 1,628 1,664
    84 Ucluelet Small 1,627 1,487
    85 Nakusp Small 1,574 1,524
    86 Mill Bay Small 1,549 1,343
    87 Roberts Creek Small 1,472 1,434
    88 Harrison Hot Springs Small 1,468 1,573
    89 Cowichan Bay Small 1,401 1,215
    90 Vanderhoof Small 1,382 1,213
    91 Lions Bay Small 1,318 1,328
    92 Gold River Small 1,267 1,362
    93 Fraser Lake Small 1,167 1,113
    94 Salmo Small 1,139 1,007
    95 Miller’s Landing Small 1,113 722
    96 Cultus Lake Small 1,110 1,119
    97 Welcome Beach Small 1,106 1,069
    98 Crofton Small 1,092 1,108
    99 Deep Cove Small 1,088 1,249
    100 Cache Creek

  71. I have to laugh at “Just Jack” for his comments that Victoria might not be seen as a bargain by Vancouver people any more.
    Can you imagine? A cheap, post war bungalow house…ready for tear down…in “Vancouver” is around three and a half million dollars. A similar house in Victoria is around $650,000.00
    The confusion I think is that so many Toronto based articles on Vancouver don’t quote the “Vancouver” prices. They repeatedly make the mistake of talking about “Vancouver” and then quoting the “Greater Vancouver region” average price as being around one and a half million dollars. But the GVRD includes all the way out to Chilliwack and also one of the islands. (I think it is Bowen island).
    Any price in “Vancouver” is actually more like three and a half million dollars. So….my question is: Why would “Just Jack” think for a moment that Victoria prices are no longer seen as a bargain when compared to Vancouver prices???? You can still sell your house in “Vancouver” and buy five similar houses here within walking distance to downtown Victoria….even at todays prices of $650,000.00 for a Victoria home. Victoria is very cheap and yet many people here have no idea and think they are overpriced. We need to get out more and see the world:)

  72. Who is paying the most relative to the utility/size of the home.

    Oak Bay is the highest with the average price paid per finished square foot at $497 over the first half of the year. In the first half of last year the rate was $386 or an increase of 29%

    Victoria City isn’t that far behind with an average of $440 per square foot. ($366 last year) 20%

    The rest came in as follows:

    $371 – Saanich East ($311) 19%
    $329 -Saanich West ($280) 18%
    $259- Colwood ($233) 11%
    $262- Langford (248) 6%

    The other areas just had too few sales to be meaningful.

    So now you know where you get the most house for your money.

  73. For all you condo humpers, hope you’re not claustrophobic.

    Trapped in a stuck elevator? The problem is worsening in Canada, experts warn

    “About 1,550 of Ontario’s 18,000 residential building elevators are more than 50 years old and another 10,000 are between 25 and 50 years old. But even those shiny elevators in new condo buildings are not immune from outages.

    “The part needed has been shipped from China and should arrive in Toronto by next week,” one harried manager of a new, upscale condo told restless residents at the end of May. “We are hopeful that the work should be completed by mid-June.”

    https://www.thestar.com/news/canada/2016/07/21/trapped-in-a-stuck-elevator-the-problem-is-worsening-in-canada-experts-warn.html

  74. @Leo, I am budgeting 200/sqft. I will know in more detail once i do a more detailed budget after the design is complete and I can get quotes on windows etc. The envelope is more money but you need to spend less on the mechanical and there is energy savings in the long run. I am able to do a lot of the design and management myself so that is a savings. Building in an environmentally sensitive area adds to the administrative burden and has been a lot to navigate. It was a large stack of papers just to get the development permit. Biologist report, arborist report, Wildland urban interface study, site plans, letter of explanation, elevations, survey etc. pulling all that together myself has saved time and money for sure. Otherwise I would be waiting for an architect to do it all. which would be nice I must admit but I have more skills than money….

  75. For Belmont, it’s probably the layout & room sizes that caused it to sit on the market (look at the floor plan on the realtor’s web site). They presented it well, but you have to walk through the kitchen to reach the bedrooms or bathroom (no hallways). The sunroom is a big part of the 1000 sq ft, and there’s no dining room. The room specs say 2 baths on main floor but there’s only one. The basement bedroom is very narrow as well. Maybe there used to be a hallway alongside the living room, which could be re-created.

  76. As for who is buying houses in the core. So far 68% have identified themselves as from Victoria compared to 66% last year. There are more buyers from Vancouver this July but not as great of an increase as at the beginning of the year.

    I suppose the high prices have to do with this too. Victoria may have been seen as a bargain by Vancouverites in February but not at today’s prices. But that’s just my opinion based on the information at hand. I reserve the right to change my opinion as new information becomes available.

  77. What happened in the core for detached houses in the second week of July (8th to the 14th)

    House sales stood at 56 and the median days on market were at 9.

    That’s down from 76 house sales in the second week of June 2016. And up from 52 house sales in the second week of July 2015 when the days on market was 22.

    New listings stood at 72. Slightly lower than the month before when they were 76 and about the same from a year ago when new listings for that week were 71.

    Starting to look like a demand-driven downturn in the core housing market as high prices cool sales.

    For houses in the core that means slightly better selection, slightly lower prices and slightly higher days on market for this July.

  78. Did anyone view Belmont? I expected it to sell for more given other recent sales in the area, but I didn’t walk through it.

  79. The PEI restrictions pertain to seafront land. They came about a few decades ago when a non-Canadian non-resident prevented beach access from several MILES of oceanfront she owned.

  80. PEI charges owners who do not reside on PEI double the property tax. Works quite well for discouraging investors despite the inexpensive prices. Plus there are restrictions on size of land and how much waterfront can be bought.

  81. I wish I could share your optimism that the current team will get turfed in 2017

    I’d say the chances currently are about zero

  82. Attended a thesis defence on how property tax could be used to influence house prices. Talking about how either a value tax (% of property value annually), vacant land tax, or property transfer tax can be used to tamper prices. Overall the existing research in the area was quite weak so not many conclusions could be drawn from previous implementations.

    What was more interesting was that the property tax division in BC stated that they fully expected to be asked what they could do about prices, so they were being proactive about looking at options. Most likely change would be to increase PTT for foreign nationals or increase PTT for people not paying other income tax in BC or Canada.

  83. @LeoS, @Dasmo – ICF isn’t too common with Passivehous, and when I did the PH training back in 2010 it was generally frowned upon. Maybe things have changed…

    Costs vary wildly. From a code-minimum house you’re looking at +30% since they tend to use the cheapest heat source possible. With PH you should be able to scrap your heating system (less emergency baseboards) and so that goes a long way to offsetting the cost of the HRV and insulation.

    I’m currently designing a PH and the differential from code minimum is pretty big, although the energy savings are also quite big.

  84. Another interesting anecdote, a Van realtor tweeted a prominent realtor friend said Tsawassen has gone dead, in a place with 48% increase.

  85. Thanks for the clip Local Fool. BMO’s Doug Porter comments are very telling why he believes foreign money is the major cause of Van and Toronto based simply on credit growth.

    “The economist says there were wild swings around the financial crisis in 2008-2009 but home prices have tended to grow slightly slower than credit growth over time.

    But look at what has transpired in the past year — prices have absolutely surged, while credit growth has barely budged. Something besides domestic borrowing has clearly fanned the flames. We will simply note the anecdotal evidence that many foreign buyers do not borrow to buy,” said Porter.”

    http://business.financialpost.com/personal-finance/mortgages-real-estate/economists-go-to-battle-over-foreign-investor-influence-on-the-housing-market

  86. Here’s a radio clip from CKNW Vancouver discussing the state of the vancouver RE market, featuring Ross Kay. It’s bearish of course, but quite an interesting interview nonetheless. Kay seems to reject the 35%+ gains in Vancouver as a “mathematical impossibility”, and offers a different perspective.

    The interview starts at about one minute in.

    http://www.cknw.com/2016/07/18/steele-and-drex-is-a-vancouver-housing-bubble-burst-just-around-the-corner/

  87. caveat,
    Agreed, 16 years is too long for any government let alone a corrupt one. If they can’t do it this time, not sure what it would take. Not a hard core NDP’er but the alternatives are zero unfortunately.

    Too funny Jack, Christy needs a spanking….at the polls. 😉

  88. Hawk

    I wish I could share your optimism that the current team will get turfed in 2017. While I am not a huge NDP supporter it is definitely time for a change. 16 years of one increasingly corrupt government is long enough.

  89. “Why does BC politics have to be so rife with conflicts of interest”

    I’ve never seen it so bad as with Clark and her gang. How many scandals can one group have in 3 years and still stay in power ? It’s more like corruption as up to 2 months ago they denied there was a housing problem as DeJong and fat boy sidekick Coleman threw out condescending comments that just added to their arrogance.

    I think they are toast this time around. Rolling the dice on LNG was a huge mistake.

    Not to mention their bad judgement in character doing a deal with Malaysia government for LNG while they get busted for mass corruption.

    Have to wonder how much wound up in BC real estate ?

    U.S. Seeks $1 Billion in Asset Seizures Tied to Malaysian Fund 1MDB

    “U.S. investigators paint a starkly different picture in their lawsuits, which instead describe transactions involved with 1MDB as part of “an international conspiracy to launder money.”

    The documents allege that more than $3.5 billion was diverted by unnamed high-level Malaysian officials from 1MDB in three groups of transactions over several years using fraudulent documents and shell companies around the world.”

    http://www.wsj.com/articles/u-s-seeks-1-billion-in-asset-seizures-tied-to-malaysian-fund-1mdb-1469019540

  90. Given the fact that real estate prices have gone up substantially in the last 2 years in Metro Van and the Fraser Valley, de Jong has clearly benefited with his 5 mortgages.

    Why does BC politics have to be so rife with conflicts of interest – which of course they deny, but there are so many things that are actually illegal in most of the world (eg., high amounts of political contributions by corporations & foreign interests). Maybe people in BC don’t have time to complain because they’re too busy working 16 hours/day to pay off debt.

  91. re Mike de Jong
    The ridiculously low value for the family farm would be because it is assessed as a farm. The huge break on property taxes is why some rural landowners run money-losing operations just to qualify for farm status. If you are assessed as a farm the assessment bears little or no relation to what the property might sell for. It could well sell for 10X the assessed value.

    The values on the condos seem low although the article claims they are assessed values. The queerest thing is the condos that aren’t in the BC Assessment database. Probably just a mistake, but wouldn’t it be sweet if your property accidentally fell of the tax roll 🙂

  92. If he is using dated purchase prices rather than current values then he is intentionally misleading the public and should recuse himself.

  93. So farmer de Jong who doesn’t use email and drives an old beater car is a condo king in the Fraser Valley? Interesting. BTW how are all his condos only worth 80-100k? Add them all up and it’s actually not a lot invested so it’s not quite as bad as it sounds. His family farm is only worth ~200k – how is that possible?

  94. Mike de Jong should recuse himself from all government deliberations on solutions and actions to address runaway housing prices if the Tyee news article is accurate. It’s disgusting and a travesty of our government system when an elected official, in a ministerial position, pretends to make unbiased decisions, that will have negative lifelong affects on our entire younger generation, when he is invested in RE properties that will potentially be negatively impacted by his decisions.

  95. Any sense of what your passive house is going to cost to build? Sqft?
    Super cool btw. Would like to do that but it’s a ways off

  96. “There have been some exceptional houses sold after more than 10 days on the market.”

    Maybe they were sold in a bidding war but with subjects and so just look as though they’re sitting on the market for 10+ days? Or they’re not in the most desirable areas of the core? I’m really not seeing much of this when it comes to the properties that I’m interested in.

  97. I haven’t seen a co-relation between better houses selling in the first 9 days and only the garbage scraps left after 10 days. There have been some exceptional houses sold after more than 10 days on the market.

    Besides the sales to assessment ratio wouldn’t be effected by the early sales being better than the older sales as the assessed values allows for the condition of the home.

  98. @Leo not Bernhardt but their Bernhardt house is pretty awsome… Not sure if I’ll go for certification. I might if it ends up being possible but I’m not going for certification at all costs.

  99. The jump in asking prices between May and June matches with what I noticed. Thanks for the stats, JJ.

  100. “The median sales to assessment ratio for houses in the core that sold in nine days or less is 134%. The sales to assessment ratio for houses that sold after 10 days on the market was 123%.
    This just puts some empirical data behind what you already new about getting caught up in the emotion of a bidding war.”

    I completely agree that bidding wars can be emotional and therefore irrational, but the houses that aren’t going in bidding wars right now are usually quite awful. I say this after having looked at more than a few of them in person. It’s all fine and good to say that you’ll only put in offers on the houses that have been on the market for a while and don’t have major interest/competition, but the market is so nuts right now that if that’s your strategy you should be prepared to buy something that needs major work and involves some serious compromises. The houses with longer market exposure are cheaper for a reason.

  101. To my mind, the fact that fewer houses are selling for outrageous amounts over asking isn’t a measure of anything much.

    It might be a measure of market acceleration. When the market is heating up quickly sellers are taken by surprise and haven’t adjusted their asks upwards to match

    That was the case in the spring. The market now is hot but it’s no longer getting hotter so people have a better handle of what something will sell for

  102. @Marko thanks for tips. I am going all ICF so no external framing. Simple design but to the passive house standard. Thus the ICF envelope. My GC is an ICF specialist so at least that is covered….

  103. Have asking prices gone up over the last six months for houses in the core?

    Month List Price, Median
    Feb $719,500
    Mar $724,950
    Apr $709,900
    May $700,000
    Jun $750,000
    Jul $754,900 so far this month

  104. The median market exposure is 10 days. All delayed offers or blind auctions have an imposed short exposure usually of less than 1 week. The median sales to assessment ratio for houses in the core that sold in nine days or less is 134%. The sales to assessment ratio for houses that sold after 10 days on the market was 123%.

    This just puts some empirical data behind what you already new about getting caught up in the emotion of a bidding war.

  105. Olympicbound I don’t know if you understand what the phrase cherry picking means. The data I’ve shown is raw data. Comparing the last 100 house sales to the last 500 house sales in the core. I didn’t set any other parameters but the core districts and the number of sales. That’s not cherry picking. You don’t like the numbers – so what. They are what they are.

    I also did the same for the condominium market and that has gone up. But you don’t have a problem with that – do you? So, the only cherry picking going on here is by you.

    As for the over asking price. I know that ask prices are meaningless but for some reason the bulls like to mention how much homes sell over ask and that includes you. All that I’m showing is the anecdotes made by yourself don’t stand the test for being reliable. There have only been 7 houses that sold for more than 20 percent over ask and none higher than 132% this month. In fact the median sale to list price ratio is now down to 100%. Half the homes sell above and half the homes sell below list price.

    A better gauge of the market is how the sales to assessment ratio is changing. So far this month it stands at 126%. Last month the median sales to assessment ratio was 132% And in May it was 128% And that matches well with how the median price for houses in the core over the last few months.

    Month Sale Price, Median
    Feb $681,500
    Mar $740,000
    Apr $759,500
    May $760,450
    Jun $743,000
    Jul $715,000 so far this month

    These aren’t harsh numbers they are not showing that the sky is falling. And I haven’t been saying that the market is crashing either. I’ve actually been more bullish on some types of properties. You should just drop your negativity .

    “Holding onto anger is like drinking poison and expecting the other person to die.”
    -Buddah

  106. “To my mind, the fact that fewer houses are selling for outrageous amounts over asking isn’t a measure of anything much.”

    I’ve noticed this as well – ask prices have moved up, so it’s hard to tell what’s happening.

    Even a few years ago when we were looking, the best houses were sold in 1 day before it went on public MLS, and ours had multiple offers. Our realtor said it was because Victoria has had a low inventory of “great” properties for a long time – geography limits the location of roads, and a high % of older homes have some issues with wiring, layout, plumbing, etc. – which makes them desirable to both families and flippers – a fixer upper for one guy is a business opp for someone else. Probably a situation that didn’t exist as much in the 70s/80s.

  107. “When the market slows average asking price actually might go up as sellers won’t be able to depend on a bidding war?”

    I too suspect that that will be the case.

    Marko, are you still seeing bidding wars on many of the houses that your clients are interested in? Have more of your clients had success buying lately than in the spring or is it about the same out there?

  108. I am super nervous now going into a build due to lack of trades. Maybe it’s everyone moving back from AB so by next spring there will be plenty of hammers here….

    Framing is a really tough one. If you can jump this hurdle gets a bit easier with plumbing/electrical/insulation/drywall/etc.

    Design of your house also become important. I find when things are this hot/busy trades people focus in on simple jobs (boxes) versus complicated builds that eat up time.

    For example, if you have a box and it is all 100% hardiplank will be a lot easier to find a contractor compared to a complicated multi-angle box that is 70% hardiplank, 10% rock, 10% cedar, and 10% something else.

  109. It took sellers a while to start asking for the amount that they hoped that they might get for the house, but I think it’s happening more and more now.

    I am starting to notice this for sure. When the market slows average asking price actually might go up as sellers won’t be able to depend on a bidding war? I don’t know, just a thought.

  110. I should also note that although in my PCS 20% of listings seem OK, when I actually go look at them in person that number drops drastically. It’s amazing how much better real estate photos are than the actual real estate.

  111. “Are you in the market? Curious to know what % of houses that come up in your PCS you would even consider looking at.”

    I’m kind-of-sort-of in the market. I have my PCS set to show me SFHs under $900,000 and only in the areas of the core that I’m interested in. Excluded from my search are Esquimalt/Vic West and Saanich West. I’m also not interested in Burnside, High Quadra, or Swan Lake but can’t remove them from my search. Within those (admittedly limited) parameters it certainly doesn’t feel as though there’s an abundance of houses for sale. And among what is listed I’d say that maybe 20% actually seem appealing. I agree entirely with OlympicBound that the houses that are typically going for close to asking price are those that need major work or that are in less desirable locations like on busy streets. (The asking prices are of course already much inflated over the prices from the last year or two. Just because a place is selling for the asking price doesn’t mean that that price isn’t fairly outrageous.) In my experience so far, any place that I’d really be interested in buying sells considerably over asking. Usually, in my price range, this seems to put the sales prices of desirable houses about $200,000-$250,000ish above assessment.

    JJ often cites a decrease in how many houses are being sold over asking as a mark of the market’s tepidity. But I’m not convinced that considering the number of houses that have sold over asking price, or for a certain percentage over asking price, is a very good way to take stock of this market any more. Even though places are still selling over asking, asking prices have also really jumped up in the last few months so that they’re now closer to sales prices. It took sellers a while to start asking for the amount that they hoped that they might get for the house, but I think it’s happening more and more now. To my mind, the fact that fewer houses are selling for outrageous amounts over asking isn’t a measure of anything much.

  112. There have been some truly shockingly high sold prices in the last couple days

    Can you throw out some examples? I haven’t seen too many shockers in the last week but maybe I am becoming accustomed to new price levels.

  113. Yes, I notice it. That said, if you ignore the prognostications and faulty 99% biased to the market falling now comparisons, JJ has access to good stats which he kindly shares.

  114. Halibut, yes in the market, like a lot of other people it seems. We like a lot of the houses we see, but they go on to sell for above our budget. The houses that sell for asking price usually have a big cost up front to deal with after a purchase, so even though they sell for asking, they actually sold for 50-100k more in reality.

    That’s why I don’t look at stats as if they provide real answers. I would say 50% of places we look at that sell at or below asking price have a 50-100k up front issue to deal with. So add that data to your number counting and you will see the core is much, much more expensive then it appears on paper.

    Just Jack. Again, you cherry pick data. Why you compare house sales from July to “May” and then in same post compare condo sales from July to “June”.

    Hasn’t anyone noticed that he does this? It’s just incredibly frustrating.

  115. The contrast is stark from a few years ago. Next spring will be the one to watch. I am super nervous now going into a build due to lack of trades. Maybe it’s everyone moving back from AB so by next spring there will be plenty of hammers here….

  116. OlympicBound — Are you in the market? Curious to know what % of houses that come up in your PCS you would even consider looking at.

    When we were looking last spring it was probably like one in ten.

  117. There have been some truly shockingly high sold prices in the last couple days. I’m sure that we will get closer to 1100 for the month and average price has to tick towards 800k

    Looking at my PCS since early July, not much was happening, looked like things had chilled out a little bit but nope, not one bit.

    One place sold for close to 1m that I swear 1.5 years ago would have been 580-610 ish.

  118. Vicbot,
    Good link, missed that one. Like some around here it sounds like DeJong is a slumlord at the prices of those properties.

  119. Also from that article:

    “The three empty Belmont Drive properties — which were purchased in February 2015 for $26.5 million through three numbered companies …”

    Lots of this stuff happening through numbered companies – another reason why BC gov’t stats on citizenship aren’t enough to expose the extent of the problem with flippers and speculators.

    Also interesting what the NZ gov’t is doing. As been stated in the news before, if politicians like Mike de Jong have 5 mortgages on their own investment properties, there’s a conflict of interest with this whole issue. http://thetyee.ca/News/2016/01/11/Finance-Minister-Well-Invested/

  120. Thanks for the NZ link Hawk. 40% down for investors, 20% down for owner-occupiers. The higher requirement for investors seems like something Canada would do well to emulate. Also the higher down payments although obviously going from 5 to 20 in one step for owner occupiers would be unwise. 10% would be a good first step here.

  121. More shady business in this bloated bubble. Tip of the iceberg when the scamsters are forced out of the woodwork.

    West Vancouver property developers caught in cross-country lawsuit

    A wealthy West Vancouver real estate developer faces an unusual lawsuit involving a $10 million loan which was advanced in China with the key term that it must be repaid in B.C.

    http://theprovince.com/news/local-news/west-vancouver-property-developers-caught-in-cross-country-lawsuit

  122. New Zealand seems to get it, harsh times bring harsh measures.

    Thinking of buying a house? New rules just made it harder

    Property investors will need a 40 per cent deposit under tough new restrictions revealed today.

    Restrictions to lending limits on residential properties are also being extended nationwide.

    The new rules are being urgently introduced in an attempt to put a lid on New Zealand’s spiralling property prices.

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11677196

  123. In the second week of July there were 55 house sales in the core (July 8th to 14th). Down from 76 in the second week of may and up from 52 one year ago.

    Core condo sales stood at 50. Down from the previous week in June at 54. And up from one year ago when 41 condos had sold in the second week of 2015.

    So where is most of the increase in sales activity coming from? Most of the increase is in the Westshore and Saanich Peninsula which has almost doubled its number of sales in the second week of July. And since that is where most of the new construction is happening, it is also one of the factors why you’re finding it hard to find a tradesman.

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