How fast can the market change?

Right now the market conditions are stupidly hot (ludicrously hot if you ask the automated predictor).  Residential inventory at record lows for the season, and sales near record highs.   But what does that mean going forward?  What can we say about the market next month, three, or six months from now?

Basically how fast can this market turn around?  Let’s take a look at the history.

historicalmoi

There are two things at work here, one is the long term trend in market conditions from hot to cold to hot, which seems to be an incredibly slow cycle spanning some 12 to 14 years.   On this trend, conditions change very slowly, with the cooling cycle only adding about one month of inventory every year.

historicalmoi2

But on top of that trend is what can happen during black swan events like the financial crisis.   Those events show that the market can also change rapidly when confidence is lost.   In the 7 months from June 2008 to January of 2009, months of inventory nearly tripled, from 5.7 to 15.7, and prices started dropping rapidly.

historicalmoi3

Now the 15% foreign buyers tax is no great financial crisis, and we are not Vancouver.   Also I believe the larger trend will overpower shorter term jags but we may be in for a time of turmoil especially if the government keeps at it.

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54 thoughts on “How fast can the market change?

  1. “As for co-op salaries: currently median is ~$3300/month for uvic engineering.” For people getting their masters. There’s also the $700 fee for each term that you forgot about. Plus every other nickel and dime charge that UVic can claw out of you.

  2. Ok children calm down calm down.

    Y’all sound like pretty well off to me, I was on my own at 15. Only kids who had good families even had the thought of education on their minds. So be greatfull.

    I didn’t have no edumication, but I did retire young, never had to deal with sucking up to teachers and years of paying off debt.

    So easy to make money if that is your goal. If you want a career for yourself that is a lifestyle choice.

    Grind away, grind away.

    And holy over asking this weekend Jesus the market is on fire!

  3. Doesn’t sound like you know a thing about me. But go ahead make a judgement on my frugality

    Chill. Just saying I did what you said is “insane” and as far as I know none of my friends took on any debt during their co-op engineering degree either and none of them had 2 years paid tuition. As for taking 3 not 4 co-ops… 4 co-ops are mandatory to graduate engineering at UVic. You cannot decide to take 3 unless you were not in engineering or challenged one of them based on previous experience.

    As for co-op salaries: currently median is ~$3300/month for uvic engineering.

  4. James Soper, have to agree that everyone’s situation is different. People under-estimate the cost of travel and accommodation to complete work terms in bigger cities (and it’s necessary to get a good job later). Also, with engineering usually you’re taking 6 courses per semester instead of the usual 5 (~20% more workload) – definitely there’s zero time for working an extra job on the side. Students also cannot necessarily mix & match programs across the different universities – they each have strengths/weaknesses for various programs, and for good job prospects you may have to attend one particular uni over another.

    In general, I think students from families who can’t save for RESPs (limited income) or can’t get a scholarship have the toughest uphill battles, and I think they need to be admired for their struggles against all odds.

  5. I didn’t meet anyone in Engineering working 20 hours a week extra on top of their course load, personally I think anyone doing that was asking for bad grades.

    If it is going to affect your grades and job prospects for co-op, working is a really bad use of your time. Student loans would make way more sense. Nothing wrong with the debt in exchange for a school success if that is really the trade off. For some it is. For others it is not. They spend the extra time procrastinating or socializing.

    I’d say the ability to process information quickly varies. Some students can work part-time while in professional programs, some should not. I’ve noticed engineering students find time for extra-curricular. That time could easily be spent working instead with no loss of study time.

    I found working helped me study efficiently and avoid procrastination. I wouldn’t be alone in this:

    https://www.reddit.com/r/EngineeringStudents/comments/2v6dq1/24_yo_working_fulltime_and_seeking_engineering/

  6. “How? You said $5000/year so $2500/term. First 2 years paid for so you had 4 academic terms to go and 4 work terms after finishing 2B.
    $10,000 in tuition, $10,000 rent, Say $10,000 food. $2000 books.
    4 co-op terms @ ~$2200/month take home = $35,000.
    = $3000 to cover other things (clothes, beer, etc).

    Not a lot, but you’re saying you spent an extra $600/month to end up $20k in debt? Doesn’t sound like you were as frugal as you think.”

    Your math is a little off.
    $10000 in rent gets you 2.75 years of rent @ 300, doesn’t get you heat and water and your share of internet. Also, your $2000 in books is off for 40 courses. Tuition also got more expensive over the course of the degree so first two paid years were more expensive than the last 2(my last semester was 2960 after health & dental, and bus pass). Scholarship covers tuition, not food and accommodation. I did 3 co-op terms not 4 since it made more sense to power through and get a properly paid job than work for $15 an hour again in a 4th coop term, and it was more like 2 grand a month take home. One of my Co-ops was in Toronto. Didn’t actually save much(if any), but good experience.

    Doesn’t sound like you know a thing about me. But go ahead make a judgement on my frugality. There’s a reason you paid considerably more than me for accommodation, you probably didn’t live in a slum.

    @totoro
    I didn’t meet anyone in Engineering working 20 hours a week extra on top of their course load, personally I think anyone doing that was asking for bad grades.

  7. When I was a UVic student my roommate and I shared a 2 bedroom basement suite for $600/month (so $300 each), which seemed expensive in the early 2000s. The place was definitely mouldy and it was very bare bones. It wasn’t pretty. We picked up free furniture from friends or from off the street. We both worked like crazy in the summers and managed to pay for the whole school year between jobs and scholarships. But we also didn’t yet have cell phones or laptops, and we didn’t have cars. I think a huge part of why things are harder for students today is that they’re spending large sums on electronics and many of them have cars. Having a car will suck you into debt in no time.

  8. I feel for the SFU students, but high rents are the norm in big cities with big universities. I highly doubt that the SFU students are the first to have trouble paying the rent – the Globe is just really into reporting on the Vancouver real estate situation at the moment and found a new angle to work. Rent in Vancouver is generally still cheaper than rent in Toronto, for instance, even though house prices are higher in Vancouver.

  9. I agree I finished my degree and put myself through school too no family help. Worked 2-3 jobs in summer. 15-30/week through school year. Had a roommate, lived within means. I also still has a large student loan once done about $20,000 too.

    The difference is once you have a job your pay is higher. I still lived like a student the first couple years after and I paid off my student loan in 2 and 1/2 year and saved for downpayment on a little place.

    I know other students that lived with parents rent free and would take daily bus from cowichan, Millbay.

    I know someone who went to school 30 years a ago and took a graveyard shift janitor job. So didn’t have to pay rent well in school. Shower at work, eat and nap at school or friends couches.
    Student life and situation is temporary and will change once done. Managing your time and money is a learning experience and life still.

    Story seems at little dramatic but so are drama students and media (kidding).

  10. I put myself through two degrees with no parental help and I did not live at home.

    One degree had high tuition, higher than $5000. I worked while I was in school (at least 20 hours a week) and all the breaks. This helped me get a job at the end and forced me to manage my time and, with scholarships and grants, paid my way. As I was working at restaurants during my undergrad many of my dinners were provided and I had an on campus job as well. I did not have a car.

    Relative to other countries, like our neighbours to the South (including Mexico), the price of a university education is not incredibly high vs. income. Even kids from backgrounds of poverty can go.

    I have a kid in engineering. Graduating with 20k in student loan debt is not a tragedy when your starting salary is relatively high: http://talentegg.ca/incubator/2014/09/15/average-starting-salaries-engineers-2014-edition/
    In any event, with engineering co-op and scholarships I don’t expect him to graduate with any debt.

    I think university should not be free. There is a taxpayer cost to this and it is already subsidized. Students need to think about what courses they are taking, job prospects and what kind of debt they want to take on, if any. There are many cheaper options than UBC, including doing the first two years at a local community college. Take a year off and work and save if you are not sure what you want to do.

    The way to manage affordability is through income-tested grants and bursaries imo. Not through reduced tuition overall. Government implemented the RESP to encourage parents who could save to help with education to do so. Probably not a bad move overall.

    FWIW students who completed an undergraduate program in 2009 owed an average of $26,680—which is $2,231, or nine percent, more than those who completed their studies in 2000. During a decade in which the average tuition increased by 14 percent, student debt grew at a slower pace. https://library.carleton.ca/sites/default/files/find/data/surveys/pdf_files/Price-of-Knowledge_4th-edition_2009-11_chapter-7_en.pdf

    Students in the US have about 52k in debt on average.

  11. It’s true that the main benefit of a co-op program is that you can get into the job market faster, but it’s still expensive because you have to go wherever you find a job for those 4 months – Vancouver, Calgary, Ottawa, etc. You have to pay to get there, look around for a place to live, and a lot of landlords won’t take you because you’re only there for 4 months (much less than the regular 8 months student year) – so when you do find a place, it’s not necessarily just a room. Even with a room at $500 or $600 a month, plus moving/travel expenses, you don’t make much to then spend on tuition as well. That’s why a lot of co-op students still graduate with debt as well.

    We’re cheaper than the US but the US is one of the most expensive places in the world to go to school. In the early 90s university was $1000 a semester for a co-op student, so it’s gone up a lot.

  12. I graded 8 years ago, paid $300 a month for accommodation, worked co-op in the Engineering program and two terms was under $5000 a year when I went. I had my first two years of school paid for through scholarship. I didn’t take any vacations or party hard, or eat out much. I lived very frugally, and I still finished with nearly 20 thousand in debt

    How? You said $5000/year so $2500/term. First 2 years paid for so you had 4 academic terms to go and 4 work terms after finishing 2B.
    $10,000 in tuition, $10,000 rent, Say $10,000 food. $2000 books.
    4 co-op terms @ ~$2200/month take home = $35,000.
    = $3000 to cover other things (clothes, beer, etc).

    Not a lot, but you’re saying you spent an extra $600/month to end up $20k in debt? Doesn’t sound like you were as frugal as you think.

    I also graduated engineering at UVic (2006) and didn’t have any debt. Paid significantly more in accommodation than you too. No big scholarships, although I got about $4000 from my parents.

  13. “I don’t find tuition to be incredibly high.”

    Since I went to UBC tuition is up more than four fold. Provincial scholarships dollar value has increased by 25% – much less than inflation.

  14. @James Soper

    Could’t agree more, my son did virtually the same, tried hard to find co-op work that paid a reasonable amount but it was a joke and like you graduated with about $20,000 in debt. Students have a hard time finding affordable rent or food and those who think it isn’t a struggle don’t have a clue.

  15. “I don’t find tuition to be incredibly high. At UVic it is about $6000 for two terms. It is higher in faculties like law, medicine and engineering – although engineering has co-op so most graduate without debt. Canada is a bargain compared to our neighbours to the South. Also the Canada Grant Program and student loans plus tax credits provide some assistance.”

    I’m sorry but this is insane, I graded 8 years ago, paid $300 a month for accommodation, worked co-op in the Engineering program and two terms was under $5000 a year when I went. I had my first two years of school paid for through scholarship. I didn’t take any vacations or party hard, or eat out much. I lived very frugally, and I still finished with nearly 20 thousand in debt. Which isn’t much compared to a lot of people whose parents aren’t paying their tuition. If you think 4 months a year of making $15-20 an hour actually pays your tuition and living expenses, you’re insane.

  16. Over 2300 students live on campus at UVic and about 36% of students live at home. Single students are not the group primarily affected by the rental shortage imo – they have more flexibility and there are many rooms and shared situations available on usedvic and CL – at reasonable prices like in Vancouver.

    There is an issue with low vacancy and high rents for separate accommodation though. This must make it hard for families who rent to find something reasonable in the core areas.

    I don’t find tuition to be incredibly high. At UVic it is about $6000 for two terms. It is higher in faculties like law, medicine and engineering – although engineering has co-op so most graduate without debt. Canada is a bargain compared to our neighbours to the South. Also the Canada Grant Program and student loans plus tax credits provide some assistance.

    http://www.theglobeandmail.com/news/national/education/a-university-education-in-canada-is-a-bargain/article4255741/

  17. Why University is so expensive. Short and to the point.
    https://m.youtube.com/watch?v=7PsmkAxVHdM

    A quick look at total # of students. While a small percentage stay on campus, many more require rental housing, and compete with the likes of Airbnb

    UVIC
    21,209 students
    Camosun
    9,700 students
    ^^^Total Victoria students: 30,909^^^

    UBC
    61,113 students
    SFU
    34,990 students
    BCIT
    29,339 students
    Vancouver Community College
    26,000 students
    Langara college
    21,000 students
    Capilano College
    11,000 students
    Emily Carr
    2,400 students
    Columbia College
    1,800 students
    ^^^Total Vancouver Students: 186,942^^^^
    (Not including Trinity Western 4,000 and a handful not in the Core)

    UBC is currently ranked #37th in the World with a motivation to move up this list. To do so requires brighter faculty that is lured and poached from other colleges worldwide. This incoming faculty is provided highly lucrative incentives and salary. The campus itself is perpetually being upgraded to achieve higher ranking and accreditation. This is not cheap and the costs are borne through endowment and tuition increases. The same is true of UVIC or SFU.

    We, the public, own these schools. When students protest tuition increases, the schools silently grin because due to budget planning and constraints that need to be met, the foreign student % is increased, and GPA average entry requirements are increased.

  18. Mon Aug 8, 2016:

    Aug Aug
    2016 2015
    Net Unconditional Sales: 188 741
    New Listings: 265 952
    Active Listings: 2,133 3,688

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

  19. More from the Globe and Mail

    Canada seizing more suspect money from Chinese travellers

    …According to the agency, suspected criminal proceeds and undeclared money over $10,000 could be seized. The former is forfeit, while the latter can be returned on payment of a $250-to-$5,000 fine.

    …China said last year more than one-quarter of its 100 most-wanted corruption suspects had fled to Canada.

    …In the United States, penalties for not declaring currency over $10,000 can include a fine of up to $500,000 and up to 10 years in prison.

    The value of U.S. seizures from Chinese citizens arriving by air, while roughly on par with Canada, consistently accounts for under 10 per cent of the total, the U.S. border agency said.

    Such seizures from Canada’s three largest airports alone make up more than one-quarter, according to the country’s data.

  20. from the Globe and Mail

    Signs emerge that Canada’s hottest housing markets may be cooling

    … In July, Canada Mortgage and Housing Corp. introduced new restrictions on how lenders use portfolio insurance – a type of insurance that lenders can take out on uninsured mortgages, or those where the buyer has a down payment of at least 20 per cent. The changes are complex and technical, but the end result is that it will likely mean higher costs for banks and mortgage lenders. That could potentially mean higher costs for mortgage borrowers, or less money to make new loans.

    More importantly, last month, the Office of the Superintendent of Financial Institutions announced a plan to require lenders to hold more capital against mortgages in cities where the regulator feels house prices are unaffordable compared to incomes. Toronto, Vancouver and Victoria are all markets that OSFI considers to be risky – but so are the struggling markets of Calgary and Edmonton.

    Last month, Royal Bank of Canada analysts Darko Mihelic, Brendon Sattich and Vanessa Wan estimated the change will affect 23 per cent of all mortgages. While the analysts expect the change to be “modest to immaterial” for the major banks, they are likely to affect smaller lenders whose mortgages are more concentrated in overheated markets, particularly if their customers had relatively little equity in their houses.

    The changes also apply to mortgage insurers and could prompt them to raise premiums when the rules kick in next January, officials from Genworth MI Canada Inc., the second-largest mortgage insurer after CMHC, told analysts last week.

    All told, the new rules could potentially mean higher rates for many borrowers already grappling with Ottawa’s hikes to minimum down payments that took effect in February.

  21. Sleeping on campus is not the only option. Students don’t have to go to school in Vancouver, particularly if they don’t have a place to live. UBC Okanagan or UVic are viable alternatives for most programs and available with planning. Students are also able to apply for student loans. There are quite a few ads for room-mates and shared houses on CL in Vancouver at affordable prices: https://vancouver.craigslist.ca/search/roo?query=ubc+student

    I have more sympathy for faculty, although UBC does provide housing assistance: http://www.hr.ubc.ca/housing-relocation/housing/housing-in-vancouver/
    http://www.hr.ubc.ca/housing-relocation/faculty-home-ownership-program-vancouver-campus/sample-financial-scenarios-calculator/

    As does SFU:
    http://www.academicrelations.sfu.ca/Housing/

    It would be nice if an article set out why the individuals were making the choices they have made and investigated what options are available and why they are not viable.

    I agree that the Vancouver market makes SFHs unaffordable for many. I’d probably leave if I wasn’t a home owner.

  22. Globe and Mail article “Priced out of rental market, Simon Fraser students sleeping on campus” is unsettling. It kind of sounds like people displaced from a war zone. The headline is mainly what the article is about, but it also mentions how Vancouver home prices are affecting faculty (i.e. people with “good” incomes). A city with those conditions is not sustainable, and even Victoria home prices are likely a factor in the labour shortage in certain fields.

    http://www.theglobeandmail.com/real-estate/vancouver/priced-out-of-rental-market-simon-fraser-students-sleeping-on-campus/article31291389/

  23. Michael, nice looking chart but it only includes the things that increase prices.
    To be balanced, you have to include some key factors that can negatively affect real estate prices: government policies (taxes, minimum downpayments, etc), interest rates, the general Canadian economy, and bank policies (tightening restrictions on lending).

  24. Prices ignite from job & pop growth and Vic/Van are absolutely killing it. Another ~20% increase for Vic looks inevitable by next year. Perhaps we finally outperform Van for a year.

  25. It has been a long time since we have had more houses for sale in the core than condominiums. There are 272 houses listed for sale versus 239 condos. That’s about 1.3 months of inventory versus 1.1 months respectively.

    With the median price for a condo being 40% of a detached house in the core districts you might think condo prices are skyrocketing these days. But the median and the average prices have stagnated over the last three months. The same with the days-on-market.

    The median price for a condo has vacillated between $320,000 to $338,500 for the last three months and the DOM has been steady at 16 days. And that isn’t much higher than a year ago when the median varied between $275,000 to $290,000. As of last month the median condo price in the core is only 10 percent higher than this same time last year.

    Yet condos are the favored property for out of town buyers. Some 40% of condo sales last month were sold to out of town buyers. And that’s up from 29% the year before.

  26. Interesting about employment. I know the government has opened hiring and no longer has hiring freeze like did a few years back. Also our tech sector has grown…tectoria. And we meet do a lot of other families with diapers (babies) around who moved here from US and Vancouver etc.

    I think Until increasing inventories can’t really see much change in our housing market. need more row housing builds for families and condos for boomers and out of towners.

    Thanks for stats. And sounds like there are lots if mouldy messes.

  27. Do contract, freelancers, start ups and retail jobs get mortgages from banks cutting back ? Highly unlikely.

  28. http://www.cheknews.ca/victoria-bucks-national-jobs-decline-july-204507/

    New numbers from Statistics Canada show the jobless rate in Canada moved up in July, as the economy shed more than 31,000 jobs, but BC, and Victoria in particular, are bucking the trend.

    The Capital Region’s unemployment rate was now the second-lowest in the country last month, at 4.7 per cent, bolstered by job growth in tech, government and retail.

    Viatec CEO Dan Gunn said the Statscan figures showing 5,000 more people working in science and tech in the Capital Region, could actually be low.

    “You have new companies starting everyday and they’re growing fast so the reporting can be slower than the actual reality,” he said, adding that Statscan’s labour force survey also fails to account for contract and freelance workers who make up a large part of the tech workforce.

  29. Love the conversation about mould… Any way about how fast the market can change. If you were paying attention in 2008 it was quite something to see absolutely no confidence in the Vancouver prices – people walking away from deposits, developers suing buyers, etc. If you ask most homeowners today if they didn’t have the gains from their existing home, if they could afford today’s prices – the typical answer is a resounding no! I see the housing market like a momentum stock – nothing holding up prices other than momentum. It’s relatively easy to make money in this type of market but it can change super quickly. The tax is just the first shot and I don’t see much to be positive about (other than the potential for lower interest rates). Christy has stated the tax is just the beginning, so there is more to come. The Feds have also said they want to address affordability and with the popularity of the BC tax watch for them to follow suit in some manner.

  30. I’m not entirely sure if anything other than mould causes the mould smell. If you dry it out, the smell might go away but the mould goes into a spore form, so the next time it gets damp, it starts growing again. Mould becomes a management issue not a curable issue because the spores are in the millions and lie there just waiting to germinate when good conditions come around.

    Not all mould is toxic but some are and can give people flu like symptoms. We have been dealing with it for many years in houses we’ve owned and rentals. Drying out the space (we have had a dehumidifier going in the basement for four years) works to reduce the smell, but the mould spores are still there. I think the best way to do the test is to actually put out a petri dish with a growing medium and see what comes up. You can get them at Home Depot, but it is best to do an inside test and an outside test for comparison purposes. Public health can also come and do an inspection and an air quality test which is the gold standard.

    I’m not sure what “musty” is as opposed to “mouldy” because I don’t think there is a “must” organism causing it. Some houses seem musty because they haven’t had the windows open, had smokers living in the them or the ducts haven’t been cleaned. Easy solutions.

    When I look at houses I always trust my nose. I don’t mind the musty smell but if I get an acrid whiff in a certain place in the house, I’m pretty sure there is mould. Then I go looking into crawlspaces for seepage.

    I feel for anyone with this problem in their house. It is very hard to get rid of.

  31. @LeoM

    “Basically these Hawaiian laws seize up to 30% of the total sales proceeds as capital gains taxes…”

    In the UK, people have avoided such taxes by purchasing by way of an offshore company. Then ownership of the company can be transferred, which triggers no UK tax. In response to that maneuver, the UK then went to taxing the imputed rent of foreign owned property. But that was some years ago, so not sure what happens there now.

  32. @ Sweet home:
    @Bitterbear and @CS – you have both spoken of “mouldy breadboxes”

    I was just quoting Bitterbear. But you raise an interesting question. Does anyone know what makes houses smell musty? Mostly, it seems, people don’t notice the smell of their own house, so the phenomenon may be more common than most people who live in old houses think. Could it be an effect of high atmospheric humidity on plaster (but not drywall?), or is it always indicative of decay? If the latter, where would one look and what would one be looking for?

  33. SweetHome,

    I’m sure you’ll be very happy in your new home. Much success to you.

    On the topic of distances outside of the core I find it interesting. Generally speaking, those that have grown up in Victoria and have not moved away and then returned tend to buy in the Core or relatively close to where they grew up (that summer after grad school in Europe doesn’t count 😉 Those from out of town or those returning tend to have a fresh view which is healthy for the region.

    The governing factor is emotions. How you feel about an area, a neighborhood. You can take all the stats, value, price per foot of the house and/or lot, compare it with Walkscore or any similar service, but when the hands of the clock both point up, buying is emotional. “..It wasn’t where we thought we saw ourselves” or “Took some convincing” usually means you got a very good deal and you are trying to relay this to a born and raised melon-head.

    Victoria has always had it so good. It’s a gem that most people in this town don’t realize how good they have it. It’s a shame that it has the largest per capita number of passive aggressives in the country, but if you simply ignore the non globe travelling Garden Gnomes you’ll live a happier existence here.

  34. Also just because a place smells like mould doesn’t mean it’s a real issue. Our rental house smelled like mould the day we moved in. Turns out there was a very slow drip underneath the sink. Fixed that, couple hours with the dehumidifier to dry it out and mould smell gone.

  35. In the rainy season, at least 1/4 of the houses I walked into smelled of mould.

    The nice part about living in a neighbourhood like Gordon Head is that, when the market is hot, your house will sell fast, probably above asking, and probably without conditions no matter what your house smells like.

  36. Since 2004, inventory has doubled at least half a dozen times within a span of 12 to 18 months

    Here is the change in inventory month to month and the 12 month average to take out the seasonality.

    You can see that in less volatile years in the mid 2000s there were up to 200 listings added per month in the spring, and down to about 200 listings dropped per month in the fall. When the market was topping out in 2010 you can see there were almost 500 listings being added every month that spring.

    However going into the fall, active inventory always declines. There is almost zero chance that inventory will improve until next spring.

  37. The next step for the Government of B.C. to impede foreign buyers should be to implement measures similar to Hawaii’s HARPTA and FIRPTA laws.

    Basically these Hawaiian laws seize up to 30% of the total sales proceeds as capital gains taxes when foreigners sell their Hawaiian real estate. The seller can try to recover some of these funds after they file income tax returns, if they qualify (most foreigners do not qualify).

    If the Liberals are serious about collecting the legitimate taxes due from foreigners then this should be ‘Step2’ of their plan to slow the land grab by foreigners.

  38. @Bitterbear and @CS – you have both spoken of “mouldy breadboxes”. Mould was an issue when we were looking at houses, and I am still not sure how you can conclude a house does not have it until you live in it (and even then maybe not easily). Do you have a particular type of house in mind that is more susceptible?

    In the rainy season, at least 1/4 of the houses I walked into smelled of mould. Some houses had a strong smell of bleach or air freshener to cover it up. In one house, there had been plumbing work (patched ceiling in basement), so that was likely the source. In other houses, it was coming from the basement, but the source wasn’t visible. Yet other houses had decks sloping into the house without proper drainage, so the whole wall could have had mould behind it.

    By the time we purchased our house, the rainy season was over, so we likely lost the odour clue. I am crossing my fingers that we don’t get surprised this winter. The houses we looked at ranged in age and price, so I don’t think any house is for sure “safe” except a brand new one (but if not well-built then not for very long either).

    I lived in a mouldy apartment, so I don’t necessarily think refusing to purchase in this market means you escape living in a “mouldy breadbox”; it just means you live in the basement instead of upstairs, unless you pay a lot to rent a newer condo. If there were good rental options, we wouldn’t have bought. This city is just darned expensive to live in, and it may not get any cheaper, mouldy or not.

  39. @VicRenter – we bought in Saanich East (Fairfield and Oak Bay went out-of-reach this year). We haven’t moved in yet, so I can’t say how the neighbourhood is. Other than the usual gamble with the immediate neighbours, I am not really expecting any surprises, since we know Victoria well (which is why those high prices in the areas around Jubilee Hospital are mind-boggling).

    At this point, though, I am happy we did not buy in Central or North Saanich. We had been looking there too this year because the houses in the core in our price range got worse and worse. For personal/family circumstances, the driving would have just been too much, even though we looked at some lovely houses.

  40. Great points Bitterbear. The quality is not worth the money being asked. Victoria is nice but not mecca.

    OlympicTroll needs to find another blog. Whines there is nothing for $950K but cheerleads higher prices. Zero credibility.

    There is no Victoria lag to Vancouver, it’s a parabolic chart that’s beginning to explode into bits and pieces.

  41. @Bitterbear: R/E is overpriced, for sure. However, where to park $$$ these days? Equities are expensive & fixed income has near zero yield.

    @CS: you can’t predict the future. Inventory could also go down or flatten. Who knows.

  42. Neat charts.

    Since 2004, inventory has doubled at least half a dozen times within a span of 12 to 18 months. Pretty certainly, therefore, we can expect inventory to at least double from the current low within less than 18 months. So if you find nothing out there but overpriced, moldering breadboxes, you can look forward with some confidence to greater selection quite soon.

  43. It seems like there has been more volatility since the 2008 crash than in the past. I never did understand why there was that surge in inventory in 2012-13, with prices dropping too. What was going on then? Maybe people holding on after the crash all deciding to sell at once?

  44. OlympicBound,

    I wouldn’t be too sure regarding people jumping into a falling market. It certainly didn’t happen in the early 80’s nor 90’s when the market plopped.

    If the U.S.A is any indication, the only people jumping on the bandwagon were Canadians when their market fell dramatically. Canadians were the largest foreign purchasers of real estate in Florida, for example, from 2008 to 2015. Thank goodness for helocs, eh.

    The same euphoria that has driven this housing market could easily turn to fear and create a whole different market all together.

    Just remember, the insiders in this market are the real estate agents. Watch for signs of them bailing out of properties and govern yourselves accordingly.

    They will be painting sunshine and flowers in the media until they have divested themselves of their investments………..be careful.

  45. I’m on the sidelines, not because I need more downpayment, not because I can’t get a mortgage, not because I think prices will go down or I don’t make enough money. I’m on the sidelines because there’s no bloody value in this market. Three quarters of a million dollars and a million more in interest payments to make a rich bank richer just for the privilege of living in a breadbox with bad wiring and mold behind the wood panelling? I’ll save my money, thanks.

  46. Admin:
    Can you find a chart of or correlate the annual price increase for the past 30+ years Victoria vs Vancouver?

    Seconded… Please provide this, it’s so valuable, would answer most questions we have here about incoming lag from Van.

    Sadly articles like that just pander to angry 45-55 year old workin class guys like “Derryll, Doug, Bill, Jack, Karl, Mike” etc. They really got left out of the rising tide in the last few years by assuming prices were “to damn high” so they waited on the sideline and are getting more and more pissed off.

    Sadly, prices here are just getting warmed up. There are so many professionals waiting on the sidelines for any signal of flat or slight correction to jump into the market, all while saving substantial down payment funds monthly. I know a few professional 20 somethings saving 10+ thousand a month while renting a cheap 1 bedroom.

    It’s way more risky to be on the sidelines assuming just because your jerb as a plumber or truck driver will guarantee you a new house in the best areas of town. Those areas are full of people who work much harder and smarter at making money, that’s why they can afford it.

    If you are on the sidelines, get in while you can, because this next bump up is going to be 10-15% by end of year with another 30% bump next spring.

  47. Not a lot of sympathy in the comments. Or with me. Gov brought some reality and risk back to a risky product.
    1.9m home.

    This article is so dumb! I thought it was going to read that they had purchased another place after their place had gone unconditional and than the foreign buyer backed out of an unconditional contract because of the tax.

    Nope, not at all, they bought another property before selling theirs first which is a super high risk maneuver at that age. They took a risk and they got burned. Can’t blame the government, an earthquake could have happened, a terrorist attack in Vancouver, etc., that cause also have caused the value of their property to decrease after purchasing something else first.

    I too do not feel sorry for these people. They risked it and they got burned, end of story.

  48. Gwac,

    They’ll still find a buyer and then they’ll have one mortgage. A bit of sensationalism. It might take a month or two this time of year.

    If there is fallout, Vancouver could pay a heavy price as current prices at upper levels are supported by Foreigners.

    In Victoria, there has been an influx of buyers from Van that have cashed out. I would assume these people have locked in their ideal area or neighborhood and didn’t mind paying a perceived inflated price. The fact is that Victoria was underpriced for the last 7 years, and in 2 years caught right up. Even house prices drop there are a very large number of young professionals that are renting waiting to buy into their dream home/townhouse/condo. Personally if houses drop by 25% or more I’d be prepared to sell at a loss and buy in an even more desirable area.

    Admin:
    Can you find a chart of or correlate the annual price increase for the past 30+ years Victoria vs Vancouver?

  49. @SweetHome (from the last post): I’m curious which neighbourhood you ended up buying in – Fairfield, OB, or Saanich East? I know you’ve said before that you didn’t buy the house that you’d hoped for, but are you happy with the neighbourhood? A 30% premium over last year hurts, I’m sure. It’s what’s stopping me from jumping in because I still haven’t quite gotten over the shock of it. Also, like you, my ideal house is now completely out of the picture. My ideal neighbourhood is unrealistic, too.

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