August 8 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

August 2016
Aug
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 188
741
New Listings 265
952
Active Listings 2133
3688
Sales to New Listings  71%
78%
Sales Projection
Months of Inventory

4.98

Daily sales with a grain of salt given the long weekend just like the first week of July

Outside of the anecdotes in the news, there isn’t much real data out of Vancouver yet as far as impact of the 15% foreign buyer tax on sales.   In looking for some I poked my head over to one of the more active housing blogs in Vancouver and was honestly shocked at the amount of blatant racism and garbage in the comments.  It seems that market is bringing out the worst in some people.

Also the lack of easily available data for Vancouver is interesting.  We’re actually pretty lucky with the amount the VREB publishes compared to most other real estate boards.

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161 thoughts on “August 8 Market Update

  1. 86% Percent of US Renters can’t afford to buy.
    http://finance.yahoo.com/news/86-american-renters-cant-afford-000000211.html;_ylt=AwrBTveooa5XDMEAp3DrFAx.;_ylu=X3oDMTEybHNjOW9yBGNvbG8DYmYxBHBvcwMxBHZ0aWQDQjAzMDlfMQRzZWMDc3I-

    Unlike Vancouverites, they don’t have a scapegoat. Interesting to see view their comments section and where their vitriol is directed:

    ARE YOU SERIOUS? My 1st home I purchased under Jimmy Carter in 1980 for $18,500 with $2,000 down & financing the $16,500…. $3,500 @ 10% by owner & $13,000.00 @ 14.5% through a finance company over 10 years. SO…us BOOMERS HAD IT EASY? Today a $200K home at 14.5% interest would be $29,000.00 a year in JUST INTEREST! OR, / 12 = $2,416.67 per “MONTH” in just interest! SO…BUY NOW, at 3%!

    the counter view

    In many cities, buying a house is financial suicide. Chicago is a prime case, property taxes are out of control, trash fees, sales taxes, fuel taxes, road taxes etc. Buy in states with no income tax and low property taxes, and make sure the public unions pensions are sustainable. Public unions are a huge burden, and should be illegal because of the conflict of interest. Politicians promise high wages, generous benefits, impossible to fire work rules, early retirement, pensions that are way over what the private tax payers will ever have (then they “pension spike to boot), plus the top heavy union bureaucracies in exchange for the unions support and votes. The housing crisis is just one consequence of big government, liberal, socialistic public policies of dependency and systemic corruption throughout the body politic.

  2. In China, and out, money flows. In ways different than in the west. Guanxi. Thousands of years’ experience flummoxing the authorities.

  3. All the anecdotes I’m hearing point to continued market frenzy. I know many who are still looking.

  4. Hawk,
    there’s always a bigger story behind the mainstream news story; ever heard of Monsanto?

    In Canada there are three main groups of herbicide-resistant canola: Roundup Ready (Monsanto) and Liberty Link varieties that were produced using genetic modification, and Clearfield varieties that were developed using a traditional plant breeding technique called mutagenesis.

    Canadian canola seeds are mostly GMO and Monsanto is #1 and Monsanto wants to dominate China with their GMO seeds.

    China is fighting against Monsanto on several issues; Canola, Soya beans, and GMO in general.

    Thousands of Canadian farmers are pissed off at Monsanto because Canadian farmers’ personal seeds stock has been contaminated with Monsanto’s patented genes. Pollen floats in the wind and pollen from Monsanto’s GMO canola has become a part of every canola seed in Canada. Canadian farmers can no longer save seed from their own fields to plant next year because it’s contaminated with Monsanto genes. So Canadian farmers must buy Monsanto seed each spring. When farmers used their own seed, it was practically free but now they must pay Monsanto a huge price each spring. If a Canadian farmer plants their own seed and does not plant Monsanto seeds, then the Monsanto police are there in late summer to take canola samples from the farmers fields, test for Monsanto genes, then sue the farmer when their tests show Monsanto genes.

    This news story you quoted is just the cover story. The chaff in the canola seeds is just for public newspapers. The real story is that China wants its Canola seed to remain free of Monsanto’s patented GMO genes. China will then sell GMO-free canola seed back to those pissed-off Canadian farmers.

  5. Meanwhile they screw our farmers and agriculture bizz but they should come in tax free? Righto !

    “The Chinese government is poised to effectively shut the door on $2-billion in annual exports of canola seed from Canada – a potential blow to bilateral trade with the Asian giant that could land just as Justin Trudeau makes a historic visit to the country to try to rebuild relations with Beijing.

    http://www.theglobeandmail.com/news/politics/canola-dispute-threatens-to-overshadow-trudeaus-trip-to-china/article31384092/

  6. What a weirdly biased Bloomberg article – not researched at all – inaccurate, no fact-checking.

    This part isn’t even in quotes, written by the author as if it’s fact:
    “Many Vancouverites, accustomed to unimpeded views of mountains and ocean, are fiercely resistant to increased high-rise development. ”

    (What …? The great majority of condos & houses do NOT have unimpeded views of mountains & ocean.)

    “Meanwhile, a C$7.5 billion plan to fund public transit was voted down in a referendum ”

    (The people who voted “no” were voting against increased taxes & Translink’s waste of public money – it was NOT a vote against public transit. Translink spends excessive $ on Board of Directors, >$1M on an empty building, >$7M trying to get a Yes vote, etc. One management person I know quit the organization due to the waste & politics)

  7. The tax has nothing to do with immigration. It’s perfectly reasonable to rent until you get status. In fact I would say it’s prudent….

  8. China is trying to stop billions from escaping to Canada then they get pissed off at the tax ? I guess the corrupt government cronies are money laundering their own dirty cash in here and their game is getting shut down. Sucks to be a hypocrite criminal.

  9. Interesting that this issue is headline number 4 at Bloomberg.com. I can’t even get my business news without being bombarded by this static.
    http://bloom.bg/2aRY207

    “China’s top envoy in British Columbia challenged the Canadian province’s new 15 percent tax on foreign home buyers, questioning the justification behind the hastily imposed measure.”

    “Re/Max Holdings Inc., one of the biggest residential real estate brokerages in Canada, estimates 45 home sales could collapse this month. The tax has suddenly chilled the market and “virtually no business is being done,” Western Canada Regional Executive Vice President Elton Ash said in phone interview this week. Failed deals could have a “domino effect” that potentially jeopardize as many as six subsequent sales, Ash said.”

    This is a big country with a small population,” Liu said. “It needs immigration to grow the economy.”
    -(Triple A… Correct Liu. Not an investor program)

    “Liu called for a more holistic approach to make housing more affordable, such as timelier data to better match supply with demand, a more extensive public transit system and taller buildings to house a growing population.”
    (-Triple A… Which would be funded by either speculative tax or this foreign tax. I think it’s time Ottawa steps in. There is no trust in the Municipal or Provincial level.)

    “Many Vancouverites, accustomed to unimpeded views of mountains and ocean, are fiercely resistant to increased high-rise development.”
    (Triple A…-Dead Wrong. Development is rampant.

  10. So far this month about 127 houses have been listed in the core in the first 11 days of August. That’s up 59% from 80 during the same time period last year.

    The last 11 days of July there were 76 houses listed for sale. That’s a 67% increase of house listings in the core.

    Years ago I spoke with a home owner how he decided it was a good time to sell. He looked at the “For Sale” signs sprouting up in his neighborhood and noticed that the homes were taking longer to sell.

    Well there certainly is more for sale this month than in July and the median days on market seems to be increasing with median days to sell now at 13 and the average at 18. The last 11 days in July the DOM was 11 and 15 respectively.

    Again, I’m looking at a very small sample size and that could be misleading. I would not consider the sample size to be large enough to gauge what the effects have been on Victoria from Vancouver’s special tax. But as the month progresses a trend may develop. You’re just getting to see what may be happening before the rest of the market.

  11. @Numbers, I agree. It’s very risky right now but that doesn’t mean prices will come down soon. There are a few drivers for price appreciation but they are weak. Anecdote time. I’m shopping for a small truck and in my meeting of different folks I met an unemployed fellow from Alberta that said I might as well live here if I don’t have a job….
    Being an investor I witnessed long lived price appreciation totally disconnected from fundamentals so who knows. Vancouver managed to blow past any shred of reason. But again this is a risky arena to play in. Especially if your not a millionaire.

    @Hawk The only time I have ever pumped Realestate was in 2003. That was a much more solid foundation for a run….

  12. Teranet is out. “Gains exceeded that of the countrywide index in the four markets that have been driving it in recent months: Victoria (3.8%), Toronto (3.1%), Hamilton (2.4%) and Vancouver (2.3%).”

  13. @Hawk
    Good on you and your investments. In life sometimes it is better lucky than good. The last time I had such a return was over 25 years ago. Just remember, it isn’t a gain until you monetize it.

    @Dasmo
    RE is super risky right now. There are little or no bargains to be had, unless you have JJ’s information and watch the RE market daily and pounce quickly. HOWEVER, from a macro standpoint there are a lot of variables adding fuel to the fire for investment assets, especially RE to keep on going up. How much is anyone’s guess.

  14. Haha, I am far from a pumper! I wouldn’t recommend buying Realestate as an investment right now to my worst enemy…. I can see risk, unlike some around here who put it all on Zippy Chippy to win….

  15. “And that would imply to me that even if prices were to decline a little, sellers won’t be too upset. Even if house prices were to roll back to 2015 levels or even 2010 levels most buyers would be satisfied in the sale price.”

    Not sure I follow your logic, JJ. How do you know that sellers would just be fine with ~25% lower prices? Some of the asking prices that I’m seeing right now imply that sellers have come to expect 2016 prices.

  16. You’re a liar caveat! It’s impossible !! Unless you hire AG as your advisor then you make 2.5%. 😉

    Just like all those house pumpers who claim they bought their house at 30% off last correction or got a great deal in Fairfield but never post the address. 😉

  17. Blogs on anything wealth related are “full” of people claiming amazing and unverifiable investment returns. Why waste time trying to debunk them? Who knows – it could even be true. In any given short term period some investors will do spectacularly better than average purely by luck and particularly if they are concentrated in a very small handful of stocks. Several stocks I own have gone up by 200 and 300% since January. Sadly I bought them well before January so the return to me is much more modest 🙁

  18. You can’t have seasonal variations in a hot market. How can the market be hot if prices drop?

  19. While the ASP seems to be dropping, media seems to still be reporting only the VANRE YOY gains – ie this month or week vs same time last year. So it sounds like explosive gains are being made still.

    If this is mere seasonal variation, it seemed to start awfully early. If it’s not and the trend continues, come early next spring, the YOY numbers could be shocking…in the other direction.

    Interesting times indeed. Popcorn anyone?

  20. Just to go back to real estate for a moment.

    One indicator of how well the market is doing, that we have yet to talk about, is the number of expired listings. For most of 2015 the number of expired listings ranged from a low of 20 to a high of 47 in any one month. In 2010 it went as high as 86 in the fall months of 2010. Which isn’t bad at all since expired listings can roar up over 100 very quickly as sellers’ price expectations are not being met.

    But like the days-on-market this year has been unique in how low the number of expired listings fell.

    Month Expired Listings, Count
    Jan 27
    Feb 15
    Mar 13
    Apr 10
    May 12
    Jun 18
    Jul 6

    At just 6 expired listings it does seem that sellers are quite happy in what they have received for their houses in the core last month. And that would imply to me that even if prices were to decline a little, sellers won’t be too upset. Even if house prices were to roll back to 2015 levels or even 2010 levels most buyers would be satisfied in the sale price.

    That would be between $100,000 to $150,000 off the current median price for houses in the core.

  21. Sounds like the media wants to ignore the reality now that they’ve beat the drum for months now. Maybe they don’t want to be accused of causing the crash or the reality of their own homes losing value is kicking in.

    Ross Kay
    ‏@rosskay
    #VanRE The Province of BC recorded a 6.1% drop in purchase price paid in July but that’s called “simmering” by organized real estate.

  22. How many hedge funds went under or took massive losses in the oil/commodity business because they couldn’t liquidate their stocks ? Did you get your license just last year ?

    Pain Endures for Hedge Funds as More Are Shuttered Than Started

    “Yet in the past 12 months, 910 funds launched while 1,053 funds liquidated, according to HFR measures, as managers struggled to raise capital and some put off starting new funds.”

    http://www.bloomberg.com/news/articles/2016-06-16/pain-endures-for-hedge-funds-as-more-are-shuttered-than-started

    Why do you consistently BS to say I’m telling people to do the same ? I took some cash, did some real hard work, invested smartly in a handful of stocks and made good money, yet you condemn me as some dangerous person ?

    You’re turning into a troll AG and not some ex-trader who pretends to live in the Uplands. AKA as a fraud.

  23. Sorry I offended y’all. For the record, It was a drawing with some useful instructions on how to measure ones penis not a crazy image…. Punishing all for my indiscretion is a little heavy handed. A delete was probably enough….

    [Re-enabled with some additional safeguards. And yes I get the point you were making - admin]

  24. Hawk, if you put your entire portfolio into that stock, you would certainly have made more than 300%. Would that make you a good investor? No. And I sincerely doubt that even you would be idiotic enough to put all your money into a single stock like that. Investing like that (low diversification, high risk stocks) is why so many retail investors lose their money.

    “hedge funds go under all the time because they can’t liquidate nor buy like retail players”

    What on earth are you talking about?

  25. Well the automatic image expansion was nice while it lasted. Thanks Dasmo. Image links are back to normal links now.

  26. We’ve made a 200% tax free return on our down payment since 2012… on paper.

    As for the stocks, maybe a longer time period for ROI is a better measure unless you are cashing out today. And if you are using leverage that is riskier than a mortgage imo

    The stats definitely do not support stock picking over index funds in general. Some people can probably do better but nowhere near 300% returns overall, and the same with real estate, a spectacular run up is not going to go on forever. Difference is that with real estate you are usually using leverage and not so much with stocks for most so the gains are usually much larger.

  27. Investor confession time:
    I bought a bunch of BBD a few years ago when it was 6.99!

    Oops. I bought into that whole ‘blowing through resistance’ thing. Anyway, doubled down a bit to make it a ~40% loss since then, but it still smarts.

  28. “Admin, please remove the dick pic off the site. We don’t come here to look at that and neither do your kids. Not appropriate.”

    Agree, most inappropriate from a family guy.

    AG,
    Are you a narcissist who only you can be right ? Sounding a lot like Trump. Do you ever look at some of the thousands of charts that have gone up 300% in the last 6 months in major companies ? Guess not.

    Here’s one for you as a sample. Low of 6, high of 20. What’s the math genius trader ?

    http://stockcharts.com/h-sc/ui?s=SSO.TO

    Guess I blew your cover as hedge funds go under all the time because they can’t liquidate nor buy like retail players. Not to mention they get inside info most of the time and still only make 2.2 % as you claim. I’ve never read such bunk from a so called expert.

  29. Admin, please remove the dick pic off the site. We don’t come here to look at that and neither do your kids. Not appropriate.

  30. Hawk, this may be a surprise to you, but financial markets tend to be extremely liquid. Hedge funds can quite easily move millions of dollars around with lower transaction costs and better pricing than you will ever be able to access. They also have better access to research, lots more information, and some of the smartest people around running them.

    But of course, you can do 100x better sitting at home with your RBC trading account and a Telus connection..

    Keep the insults coming. I know that you’re lying about your returns, and you know it too.

  31. AG,
    Your ignorance is outstanding for a so called ex-trader. When does a retail investor compare to a hedge fund that has to move millions in and out of stocks all the time ? I think your a phony or a piss poor trader.

    I knew a bond trader in TO a long time back, he handled millions daily but made zip himself. I see the similarities.

  32. Dasmo, you seem to need to hang yours out all the time for who knows why. Again I don’t need my ego stroked like you nor divulge my hard work to strangers. I don’t give two shits wether you believe me or not. It happens to thousands every day in the markets. Get with the program.

    What’s dangerous is you pumpers promoting good folks to take the highest risk ever with hundreds of thousands and their financial future to buy an over priced shack when the market is teetering on a potential crash.

  33. Hawk, it has nothing to do with giving tips. You have zero credibility if you don’t back up your claims. here is my performance proof, no tips involved… let’s see yours…

  34. The big problem with what Hawk is saying is that other investors will read it and believe it. Patent untruths like the ones he’s been spewing encourage more gullible investors to make inappropriate changes to their risk profile.

    His comments like “Why is that so hard to grasp?” and “Not too complicated” suggest that making outsized returns from the markets is easy. The reality could not be any more different. The average hedge fund is up 2.5% year to date. These are some of the best-paid, most experienced investors in the world. Lots of them have insider info, and all of them have some kind of edge over your typical retail investor like Hawk.

  35. “In terms of gold companies, there has been strong rebound in gold prices over the last few months. This rebound was NOT predicted by many experts/economists. In fact, gold was predicted to be below $1000. ”

    Funny you mention that VicInvestor, I called it on here back in January for gold to go to $1500 by year end and we’re half way there.

    I was talking to an investment guy I know on Howe St and he says in 25 years he’s never seen such strong interest in the metals plays this summer which is usually dead. His phone is always ringing and taking many meetings with investors who want to put money back in after a 3 year or so hiatus from the gold peak.

  36. These 2 articles Stste how important Foreign capital is to provide growth and facilitating Chinese money into the country. As the numbers have slowed, the marketing pitch overseas will continue. The fact Bob Rennie knew ahead of time that the 15% tax would be implemented wasn’t for his sole benefit. I believe he was tasked to ensure the demand would continue with minimum effect. The fact is Vancouver has become so dependent on Real Estate for “growth” to support jobs in construction, real estate, home renovations, finance that you could easily argue 40% of the city directly works in this sector, and another 20%+ works in the secondary markets and services. My point… Government states it does not want to see home owners lose equity but what they are really stating is that we cannot afford any significant job losses.

    http://www.cbc.ca/beta/news/politics/canada-china-visa-offices-foreign-workers-1.3714991

    “We want to facilitate the entry of people who can make some great contributions to Canada while they are here, and hopefully be able to retain them,” the official said.
    McCallum’s trip comes as Prime Minister Justin Trudeau is set to attend the G20 summit in China later this month.
    Trudeau has tasked McCallum with preparing a three-year immigration plan which is expected to be unveiled in greater detail later this fall.
    It is part of the Liberal government’s larger plan to promote innovation and grow the economy.

    http://www.theglobeandmail.com/report-on-business/rob-commentary/vancouvers-new-foreign-buyer-tax-beware-of-unintended-consequences/article31347447/?service=mobile

    “Foreigners have many other options for investment. If foreigners start to worry about taxes hurting their return on investment in Canada, they will be more likely to spend in other countries. And while this may be a good thing for the overheated housing markets in Vancouver and Toronto, it may not be for Canada in general. Canada remains very dependent on foreign capital to finance its current account deficit of $62-billion a year, or 3.5 per cent of gross domestic product. We should beware the risk we run of reducing this flow by making foreign capital less welcome.”

  37. “It”s unfortunate we have to spend precious time discrediting Hawk. However, it’s our duty to stop the spread of lies and propaganda.”

    It’s unfortunate you idiots can’t accept a basic concept of the markets when they are on a roll.

    I post my profit numbers for the year (best in a couple of years) and you tools go off the rails wasting the board space trying to discredit me. Get over it trolls. Paranoia will destroya ! 😉

    https://www.thestar.com/news/2016/08/11/rob-ford-crack-video-revealed-at-last.html

  38. AG,
    You sound like a disgruntled ex-bank employee. I’ve known brokers in the past who were MM’s and it’s not brain surgery when you see under-followed companies come to life due to new developments after being beaten up or just not getting market attention. Why is that so hard to grasp ?

    I don’t give out free tips Dasmo, my picks are all still in play for the time being. Follow the company’s fundamentals with TA and don’t buy the bullshit. Not too complicated.

  39. “Is that a low priced business jet made by Chevy?”
    Haha

    Hey BBD is almost at what I paid for it!

  40. It”s unfortunate we have to spend precious time discrediting Hawk. However, it’s our duty to stop the spread of lies and propaganda. There is a wealth of academic research and empirical data on investing methods and market returns, and none support Hawk’s viewpoints. Over the long term, very very very few beat the market by a few % points, let alone achieving returns of 300%. It is possible to get lucky with some of your holdings, but your entire portfolio is unlikely to significantly outperform over 20-30 years. Thus, many have shifted to passive buy & hold index funds.

    In terms of gold companies, there has been strong rebound in gold prices over the last few months. This rebound was NOT predicted by many experts/economists. In fact, gold was predicted to be below $1000. The problem is that opinions of forecasters and so called ‘experts’ are sometimes no better than random guesses. Thus, the inherent unpredictable nature of investing and economic models.

    Some very good reads on these themes:

    -The Laws of Wealth: Psychology and the secret to investing success
    -The Incredible Shrinking Alpha: And What You Can Do to Escape Its Clutches
    -The 3 Simple Rules of Investing: Why Everything You’ve Heard About Investing is Wrong & What to do Instead
    -Future Babble: Why Pundits Are Hedgehogs and Foxes Know Best

  41. Of course you can invest in under valued companies. That’s why I like to pick stocks. But diversify man! I have ups and downs because of that but overall outperform the market. But by a few percent not 286%!
    Give us some names?
    My recent double was CGC. After it doubled this week I sold half and bought Twitter and Boston Pizza. So I now have three stocks. And a slight move towards safe but at least spread out more. There, not so hard to give some detail…

  42. Hawk you obviously have no idea what a market maker does.

    According to your claims, you have outperformed every single fund manager on the planet this year. You’ve outperformed all the big names like Buffet, Soros etc.

    You must be a truly amazing stock picker, and probably worth billions by now. Yet I remember someone saying that you live in a rented house? Somehow that doesn’t add up…

  43. AG,
    So you were a market maker whose never seen a hot market where it’s possible to make 300% on undervalued companies ? You must have been the phone guy who just plugged in the numbers what he was told too.

    Real market makers can smell a bull run coming a mile away and make huge coin. I smell BS.

  44. AG,
    You sound like the fraud here. Most real traders would love to talk the action.

    Dasmo,
    I don’t need my ego stroked, you can believe it or not. If someone calls me out saying I know nothing when they offer zero substance I’ll offer up what I’ve done so far the past 6 months.

    I have no ulterior motive like so many others here that are paranoid their house value may crash in the coming months.

  45. Back in my days as a market-maker, I used to speak to fund managers all the time. There were always one or two of them who would spend a lot of time talking up their trading ability. It was always “I just made 50% on this stock” or “I’m killing it this year”. We had no way of verifying what they said because usually we only saw one side of the trade.

    Anyway, come the end of the year, these guys’ performances were invariably less impressive than the fund managers who were more modest about their performance. In fact, some of them consistently lost money for their clients and had to close their funds.

    Most of them were taking too much risk, and only telling us about their winning trades. We never heard about their losing trades. It’s human nature to boast about your successes and ignore your failures.

    I suspect that Hawk is doing something similar.

  46. 300% overall is a bad sign. But a good fluke. I would take that profit and distribute it. I’ve had a couple doubles this year and some solid gainers but overall I would say I’m up more like 15-20% for the year. And here I have been labeled as cavalear for buying individual stocks….
    It’s easy to prove your not full of it. Post a performance chart from your brokerage….

  47. AG,

    I’m up 300% on the money I allocated to risk in the market ? Does that basic concept suit you ?

    So you never seen a stock or discovered a stock on your own, go up 300% ? You must be a shitty trader. I’m not a trader, I’m an investor for months or longer as I see undervalued companies develop their plan.

    So are you a trader or a passive long term investor ? You’re talking out of both sides of your mouth.

    So you’re a licensed broker for a bank who never dug for hard info on his own but just sat back and punched in the orders the brass told you too ?

  48. numbers,

    All were Canadian, a few techs and a couple of junior golds. no leverage. Just hard work scouting out undervalued/under-followed companies with real products with increasing sales turning a corner. That’s what I call “real” investing, not sitting back on auto pilot for 5 years hoping and praying for 7% minus your mutual fund salesman cut of 3%. Any fool can do that.

    As you say, the market’s been on a great run and it’s a perfect market to find these gems as last year was a tough year with all the volatility. How long it lasts,we shall see.

    Not sure how the local experts “investors” can’t see the opportunities that present themselves for the time being. Also funny how Mike can boast he made 300% claims and nothing is said, but when I say it the clown show starts up. Ignorance comes in all shapes and sizes I guess.

  49. @ Hawk

    I used to be a trader at one of the larger banks. I know quite a bit about investing.

    The average hedge fund return so far this year is 2.55%
    http://www.barclayhedge.com/research/indices/ghs/Hedge_Fund_Index.html

    These are guys that get their 2 and 20 and are highly incentivized to outperform the market. Yet few of them do. Even with some of the smartest, best-equipped guys in finance at the helm.

    As I said, if you claim you’re up 300% YTD then you are either over-leveraged, under-diversified, or just lying.

  50. @Hawk

    I believe he pulled this off. Equity markets are on a tear from their bottoms and a combo of leverage of lucky picks could give you some real decent returns.

    Hawk, can you elaborate if you invested in securities US or Canada and if it was leveraged? Always good to hear people doing well in the markets and am genuinely happy for you. If you could impart some of your wisdom, it would be interesting to know. TIA.

  51. We shouldn’t give Hawk such a hard time. This blog wouldn’t be the same without his bearish slant. Here’s to all our gold miners making it to 10 baggers, old buddy!

  52. “AG, he must have made it all from shorting since January”

    6 bagger on that gold junior so far I posted about Mikey. Doubles on several others. Can’t handle it when someone really buys at the bottom ?

    Not like back in October when you called the famous commodity boom that never happened, it tanked, and you had to average down in January to cut your losses ? Selective memories indeed when your a BS’er.

  53. Funny when the extremist perma-pumpers come out crying:

    “Either way, you haven’t a clue about real investing. Or (and this is much more likely) you’re full of shit.”

    But when their four walls pop $150K in 3 months they know it all about “real investing”, not just shit luck.

    Tell me what’s “real investing” AG, you have a brokers license I assume to make judgement or are you full of shit ? Can’t handle the fact smart people invest in undervalued companies and make great money every day but you don’t ? Seriously ?

  54. A house near me, that sold in early spring, is still unoccupied. I wonder if there are other cases of this in Gordon Head.

  55. What matters are the teachers and how much they care about the “well being” of your child and more importantly a stable home environment that fosters a conducive environment for learning, values, and inquisitiveness.

    Well said, and true.

    My two cents on schools. I went to and graduated from Vic High in 2004. Teachers were totally 100% alright. Only difference between Vic High vs Oak Bay vs SMUS is the average socioeconomic status of the students.

    I agree, Marko.

  56. AG, he must have made it all from shorting since January…

    Hawk
    January 16, 2016 at 2:04pm
    “I already made my prediction on January 1st Mikey. Stock markets to tank and housing to follow in the spring…Small SPY short too I will add to but mainly insurance if all hell breaks loose. As I said before Mike I don’t have much cash in the market, it’s an extremely high risk enviroment to be investing in markets or over priced houses.”

  57. @Hawk: 300%?!! Seriously Hawk. Can you at least make up a more believable #? This is beyond ridiculous.

  58. “I don’t give away my investment advice for free, I work too hard for it which is why my investment account is up 300% this year”

    Hawk – this is one of the funniest things I’ve read all year.

    You are either massively over-leveraged, severely under-diversified, or trading on insider info. Either way, you haven’t a clue about real investing. Or (and this is much more likely) you’re full of shit.

  59. Not sure how Victoria tech companies are all awash in cash paying 43% less wages and can’t attract top talent

    Not what I’m hearing from the tech companies on the ground. Lots of them are scaling up a lot recently and none of them have had a huge challenge getting people. Not sure what they are paying, but apparently enough.

  60. LeoS, of course it would be everywhere as it would mean a credit squeeze brought on by the excessive household and business debt loads.

    Not sure how Victoria tech companies are all awash in cash paying 43% less wages and can’t attract top talent. Last time I looked tech companies and most businesses use bank money to expand their business or they stay stagnant. Everyone is awash in cash before they aren’t as per every market peak.

  61. Leo, interesting chart on TO. Do you have longer data?

    Unfortunately not. In fact there is precious little data out there in most other jurisdictions other than Victoria. This is based on Teranet which only goes back to 1998 for Toronto. And now that I think about it the title of the chart is incorrect because the index is normalized to 2005 so you can’t compare them. Would need price data and that I have not been able to find.

  62. Since two big banks have come out saying they are cutting back on mortgage lending then whose to say they won’t cut back on the LOC’s etc ?

    You’re off the mark on this one. The tech industry is awash with money and growing steadily. Sure if there was a massive crisis like 2008 there would be a pullback but that applies to everything everywhere. The industry is certainly not going to “collapse overnight”.

  63. Most tech firms I do work for are not surviving on VC funding. A few startups yes but that’s normal. It’s a healthy mix here. Most are simply making money. Our tech scene is very solid and only going to grow. It’s had a slow organic growth to this point making me feel very confident in it. Also, the VC scene here is not very big…. I would remove it from your list of why the bubble will burst. It’s really all about Van to me. What happens there will affect us.

  64. “biased extremists like Hawk”

    Says the VicInvestor guy who just bought a house after he flipped his condo while timing the market but won’t admit it, and TripleA who just moved in to a new house a month ago. Nope, they’re not biased, they just hang out on here to make themselves feel better about their huge 30 year mortgage ball and chains.

    I don’t give away my investment advice for free, I work too hard for it which is why my investment account is up 300% this year as I methodically stepped back into the markets.

    Never did like Casey, pumping the end of the world, while flogging real estate in the middle of nowhere in Argentina. Embry is the real deal indeed.

    Bottom line is if you can’t take it, don’t read it. It’s an opinion based on reality, what do you have to offer VicInvestor ? Nothing of any substance so far. You and TripleA always define a correction as doom and gloom when it’s the normal part of a market business cycle. How hard is that to grasp ? Oh right, you’re both “extremist” house owning perma-bulls where nothing ever goes down. AKA Fantasy Island. 😉

  65. My two cents on neighbourhoods. I don’t regret being in Central Saanich in a brand new home but looking back now it wasn’t the best financial decision. Instead of spending 2014 building a home something like this would have been a much better option -> http://www.dharvey.ca/property-details/336388 sold for $1,025,000. Would fetch north of $1.5 million now with zero work involved, it is totally livable, and I wouldn’t be priced out of the neighbourhood, but who knew Uplands would explode 50% upwards in a short period of time while my neighbourhood only went up 20%. I’ve come to the conclusion with this market I am forever priced out of the elite neighbourhoods such as Uplands, unless we see a 40% price correction across the board.

    My two cents on schools. I went to and graduated from Vic High in 2004. Teachers were totally 100% alright. Only difference between Vic High vs Oak Bay vs SMUS is the average socioeconomic status of the students.

    Quality of inventory? It kind of sucks. There is one single family home listed in the Oaklands area right now, for example.

  66. The further apart the two dates of comparison the greater the inaccuracy. 10 years is about the maximum difference that you can compare data and still have the results reliable. And of course statistical estimates are based on a sample and are therefore subject to sampling variability. Estimates from smaller geographic areas or types of properties will have more variability.

    In the end you have to review your data and determine if it is reliable. Sometimes you may only need a few dozen sales and other times 500 sales.

    There are only a few indicators for quality. House size, Lot Size, Age and Condition all have some of the elements associated with quality. Condition is the most subjective of them. What is good to you may not be good to me.

    I had this discussion with another appraiser who was reviewing an appraisal in Bear Mountain and he said the home was custom because it had granite counters, over height ceilings and stainless steel appliances. I said that would be average today for new builds in that neighborhood and not custom.

    So yes you can add another level to improve the accuracy of the data by adjusting for quality and that would be best to express your findings as a price per square foot and then adjust for diminishing utility. Since as a home gets larger the price per square foot rate gets lower. I think it is more informative to say that homes in Bear Mountain sell at around (for example) $220 a square foot for a house around 3,000 square feet but most people don’t understand that and would rather hear $660,000.

    I wouldn’t rely on just one week of data but because of the tax change in Vancouver I thought it might be interesting to a few of us.

  67. Vicinvestor…

    Good summary. I’d have more respect for Hawks comments if he offered specific alternatives, be it conservative ETFs with low MER’s or basic well funded Blue Chips with growth potential. Apple, Google, JNJ, Amazon, Facebook among a few others have been a backbone in my portfolio for years. YRI and PVG have both provided excellent returns. Since March stocks have been incredible, while they’ve climbed a wall of worry. A deeper look shows more money has been flowing out of treasuries and bonds, and never oversold.

    Generally, the doom and gloom websites provide garbage so that readers keep returning. In the 2000’s, guys like Doug Casey had followers that listened to his nonsense, when guys like John Embry were the real deal.

    Same is true with housing and this blog.
    Keep the emotions out of it, there’s a number of well informed posts by a host of individuals that provide real insight.

  68. Just Jack & Marko:

    How does the quality of these homes compare Month over Month, Year over Year? Perhaps just a sense as I doubt there are any metrics or grades you can associate. I’m wondering if we won’t have a true sense of the market until the following Spring, but would be good to hear your thoughts on Quality.

  69. Here goes Hawk again with his grand predictions & doom/gloom warnings. Hawk likes to think that he is an investing superhero sent by the forecasting gods. Of course, it’s all a delusion! No one can predict the future, especially not biased extremists like Hawk. All Hawk does is read and share negative bits of news. We get it Hawk: the world economy is struggling, assets are overpriced, and returns are likely to be sub-optimal. But, so what? What are you or any other investor going to do with this current situation? Sit in cash? Buy gold? Wait for the big crash? You have no answer, absolutely none. Why? Because you don’t know. All we can do is diversify, keep investing fees low, have a decent career, and not overspend.

  70. There have been 43 house sale in all of the core districts for the first week of August which is up from the first week in July at 27 but down from May and June when there was 76 and 66 respectively. A year ago the core had 38 house sales in the first week of August. So it looks like the wave of buyers is over and we are back to the volume of sales of previous years.

    The slow down is equally evident in buyers from Victoria and out of town. However the slow down is most obvious in the more expensive Oak Bay township.

    City 2015 2016 first 7 days of August

    Victoria 4 now 5
    Vic West 0 now 0
    Oak Bay 6 now 1
    Esquimalt 1 now 1
    View Royal 2 now 4
    Saanich east 18 now 19
    Saanich West 7 now 13

    The good news for prospective purchasers is that new listing added in the first week were 76. That’s 2 new listings for every home that sold. If this were to continue then the months of inventory would begin to rise significantly and I would expect prices to moderate lower.

    Of course this is just one week but considering the tax changes that happened in Vancouver I thought this might be note worthy.

  71. Looks like the foreign tax is having an impact already. If Vancouver struggles, the ripples across the waters are inevitable with low paying tech jobs and a housing crisis.

    “Vancouver’s technology industry is in danger of becoming collateral damage in British Columbia’s push to rein in spiralling home prices.

    The surprise decision last week to impose a 15-per-cent levy on overseas property investors may make it even harder for Vancouver to attract foreign talent and reach its goal of becoming a Canadian version of Silicon Valley. The city already has two major strikes against it: some of the highest housing costs and lowest wages among North America’s emerging technology hubs.

    “It’s a complete shock, a nightmare,” Eric Kong, a Singaporean computer scientist who’s in the middle of relocating his family to Vancouver, said in a telephone interview. “If I’d known this, we would’ve gone somewhere else.”

    Yet, it struggles to attract high-end talent and corporate head offices, or to build the transportation infrastructure to support income and productivity gains.

    Tech jobs in British Columbia pay on average 43 per cent less than those in California, according to a June, 2015, report by the provincial statistics agency. Add in the high cost of living and the city can be a hard sell. ”

    http://www.theglobeandmail.com/news/british-columbia/vancouvers-technology-industry-caught-up-in-foreign-tax-policy/article31267320/

  72. Dasmo, who funds the tech industry ? Banks and VC’s. When they pull back the hiring stops and the layoffs begin. Since two big banks have come out saying they are cutting back on mortgage lending then whose to say they won’t cut back on the LOC’s etc ?

    Private lending is even more dicey and faster to cut back lending when things look bubbly. Did you forget 2000 already ?

  73. “The tweed curtain and small town England feel of Victoria is long gone.”

    Bang on. I sense more people are moving to Nanaimo and Comox area and other smaller towns along the way where prices are at least in some sort of reality with similar shopping options of big box stores. The homeless problem will only get worse here which has been a major turn off to tourists in the past as well as locals getting fed up.

  74. I gave up on the baby boomers saving us from a market correction a long time ago.

    Boomers seem to have a lot more options of where to live than those in the 1970’s. It’s possible that Victoria might have a net loss of retirees as other smaller cities and towns become more attractive to live in.

    The tweed curtain and small town England feel of Victoria is long gone.

  75. Hawk, come on. Our Tech has been slowly growing over the last 40 years. I’ve been in it for over 20 so possibly even more permanent than those mill jobs close to town…. Sheesh, our tech industry here adds nothing to the risk of a housing bust. It’s the opposite….

    Leo, interesting chart on TO. Do you have longer data? It’s hard to say if we have returned to a normal divide or if it’s just coincidence we are at a similar point as the early 2000’s. (Early 2000’s was also extremely affordable here where it’s not the case now) Can JJ you do one for Van?

  76. “That why I think Vic could possibly climb higher than Van again, since the boomers are a much larger cohort than the parents who were retiring in the 1970s.”

    New brand of purple kush there Mikey ? There’s a reason Vancouver surpassed Victoria, it’s due to industry and corporations. Victoria has little anymore. Back in the 70’s they had several wood mills right by downtown. Blue collar jobs were solid paying and permanent for the most part if you could take the dangerous work. Government was swamped with paper pushers with their briefcases.

    Now we have a tech base that could collapse overnight and a health care crisis with no doctors to take on the existing old timers and families. If I’m a retiree with health issues from somewhere else, this is the last place I’m moving too. Housing crisis’s always end ugly.

  77. “And incidentally this is where I see the weakness in our market. It’s a cash flow problem. Prices may be high but fewer people are making money as sales have declined so rapidly recently.”

    Great post Jack. House hoarders with all the eggs in one basket is the recipe for disaster. This will be worse than 1981 when it blows. The chart above showing a clear downtrend from May is a major red flag only a blind perma-pumper with max leverage/debt could ignore.

    Did you note the part of the tech rep stating most of the tech jobs are contract or freelance and so many pie in the sky start ups waiting to crash and burn when the VC angels fly away.

    The new government jobs are only secure for as long as the next election then the books get opened up for real to discover how much BC Hydro and ICBC funneled cash has been funding all the so called balanced budgets.

  78. in the 1970’s house prices in Victoria were higher than Vancouver…when Victoria attracted retirees which were at that time the baby boomers parents

    That why I think Vic could possibly climb higher than Van again, since the boomers are a much larger cohort than the parents who were retiring in the 1970s.

  79. Last evening I was speaking with a retired agent that mentioned that in the 1970’s house prices in Victoria were higher than Vancouver.

    It isn’t the size or the population of a city that sets prices it is the interaction of supply and demand. The real estate market is much smaller as it is ONLY comprised of people selling and those making bids. That’s only 3 or 4 percent of the population and the total stock of housing at any time.

    Net population growth does have an effect on prices as it increases demand but stagnate and declining populations may a negative effect on prices depending on supply. And that’s what happened in the mid 1970’s and early 1980’s when Victoria attracted retirees which were at that time the baby boomers parents born after the Great War ended. Increased demand with little supply. That’s why there is a Gordon Head, built mostly in the 1970’s, today. But as all boom markets that market would bust later too.

    This boom is different from the one in the 1970’s as this one is primarily driven by construction jobs and cheap rates, not retirees, allowing many people to own multiple properties. Sometimes I wonder if there is any real estate agent that doesn’t own at least 3 condominiums and a house or two.

    And that makes this market precarious to black swan events as all of our eggs are in one basket. Things can change rapidly as a lot of software developers understand. On Friday you have a job on Monday morning there is a paper on the office door saying the company is no longer in business. An acquaintance is an accountant and went for a job interview with a software company in Victoria and he asked about the cash flow. The owner said the company was well funded. Two weeks later the company was out of business. Leaving an empty high end office, leased equipment and 30 people without a job. The same in construction except if you’re a sub contractor you are out the cost of materials and wages for the last 30 days and more.

    And incidentally this is where I see the weakness in our market. It’s a cash flow problem. Prices may be high but fewer people are making money as sales have declined so rapidly recently.

  80. I would say the opposite Leo. The relative price shouldn’t be that much different…. It’s not like we are living in Hamilton…. You are the chart master. Has it ever had this big of a divide?

  81. I wouldn’t call TO also losing all touch with any fundamentals a move towards sanity

    Relative sanity though. Victoria SFHs definitely should not be higher priced than Toronto’s.

  82. Here’s just an example from 2 yrs ago…was a great time to buy presales nearby so many white-collar jobs.

    Yeah maybe there was a very small local impact, but that doesn’t make commercial starts predictive of the residential market.
    Employment growth and immigration is good for the residential market. Employment growth will lead to more commercial starts, but the commercial starts are an effect, not a cause.

  83. BC schools are pretty much universally terrible so I wouldn’t base my choice solely on schools. The only thing you have to watch for is a concentration of low income families at a particular school. You don’t want your kids befriending a bunch of losers, especially in high school.

  84. I wouldn’t call TO also losing all touch with any fundamentals a move towards sanity…. It’s the stratospheric rise in prices in Van and TO in particular that has me worried now.

  85. “We can afford to send our kids to private school while working from home AND spending plenty of time with our kids. So it’s not an either/or for us. We get the best of both worlds. Given the opportunities that private school offers, I think pretty much 99% of parents would choose private school in our situation.”

    …gets my vote for most egocentric post of the year. You must have an AMAZING collection of participant ribbons…

  86. The crazy thing about 2008 in Victoria was that prices were higher here than in Toronto. Some sanity has returned to at least relative pricing since then.

  87. Interesting off-topic discussion on public vs. private education. Being a cynic and all, I can’t help but think the popularity of private schools has a lot more to do with insecure, status-conscious parents desperately trying to project an image of upper-middle classiness, and a lot less to do with getting Suzy a better education. I guess you have to blow your money on something though.

  88. 2008 was after a long run up that had solid fuel behind it. It was a gradual cresting defying the brutal recession and large bubble bursting down south. We had the entire market propped up through QE and we are now finishing coasting on that price plateau supported with low rates for almost a decade now. We now have increasing regulations, foreign buyer scrutiny, A sudden 30-50% spike in house prices in Victoria with people offering insane amounts over ask and doing unconditional offers. Our big sister Vancouver in crazy price land with an even greater disparity between it’s house prices and everywhere else on the planet. This market simply isn’t like any other time….

  89. Staying with the barely related to real estate theme.

    A lot of school choice among middle and upper middle class Canadians can be explained if you assume that parents try to keep their kids from going to school with poor kids. East side Vancouver parents try to get their kids into west side schools. West side parents pony up for private school. In Victoria Fernwood parents manouver to get their kids out of George Jay. Fairfield parents manouver to get their kids into the Oak Bay stream instead of the Vic high stream.

    If money is no object then you can be quite confident your kids will get a fantastic education at either GNS or SMU. There will be a level of attention to your kid that just does not happen at public school and every effort will be made to ensure no one falls through the cracks.

    If money is really no object then why not look farther afield i.e. https://en.wikipedia.org/wiki/List_of_most_expensive_schools? By a lucky circumstance I attended one year at one of those institutions. It was a great experience even though I was a fish out of water coming from a small working class BC town. It was quite good academically though the truly lasting benefit was to my skiing skills. I can attest from first hand experience that the scions of European nobility and/or captains of industry aren’t appreciably more academically gifted than the sons and daughters of BC millwrights, fallers, small business owners etc.

  90. All the bad asses went to private school when I was kid in Victoria. They had the most drugs and drug overdoses and had the most access to booze from all their rich parents who were never around. If they were they were half cut themselves a lot of the time.

  91. “This is nothing like 2008….”

    You’re right Dasmo, it will be worse when the China Syndrome kicks in.

    All those holes in the ground in 2007 were “predictive” too. Nice try Mikey.

    Soaring Debt Has U.S. Companies as Vulnerable to Default as 2008

    “U.S. companies have taken on so much debt that they’re at least as vulnerable to defaults and downgrades as they were leading up to the 2008 financial crisis, according to a report by S&P Global Ratings Tuesday.

    Corporate leverage in the U.S., excluding financial firms, is at the highest level in 10 years, driven by a combination of low interest rates and slowing profits, S&P analysts Jacob Crooks and David Tesher wrote. This has resulted in record leverage ratios across a universe of 2,200 companies, they wrote.

    Junk-rated firms are particularly at risk because the credit cycle may have peaked and future tightening in interest rates could shut the spigot on new borrowings right when the companies would want to refinance their debt.”

    http://www.bloomberg.com/news/articles/2016-08-09/soaring-debt-has-u-s-companies-as-vulnerable-to-default-as-2008

  92. Decades after graduating High School in Victoria and having friends/acquaintances from public and private schools; it can be concluded that within my own circle that it doesn’t make a ounce of difference where you went.

    What matters are the teachers and how much they care about the “well being” of your child and more importantly a stable home environment that fosters a conducive environment for learning, values, and inquisitiveness.

    A large percentage of what children learn is not from school but from their parents; so if you do a good job you have really nothing to worry about. You are the EXAMPLE for them.

    BTW Leo, after reading some of the Vancouver threads you linked; I cringe at the blatant ignorance, racism, and fear mongering of these posters.

  93. If someone has money to burn and they want to spend it on private education for their kids that is something they can choose to do. If you are at the point where your assets are generating more than your needs while your kids are still young you are in a real minority.

    A lot people making this choice will have trust funds set up so the money earned from investments is taxed at a low rate in the kids names and used to pay for the fees. This halves the cost in after tax dollars.

    http://www.thebluntbeancounter.com/2013/02/paying-for-private-school-with-tax-free.html

    I agree the research doesn’t support it being better for academic performance or “success”.

    It is probably better for having your kids make friends with other kids from rich families, including foreign students, if that is the goal. There might be some advantages to these connections – or not. There is definitely an advantage if you are looking for religious education and choose a religious private school – which is not the case here.

    Overall I’d say private schools have very nice environments, but the advantages they provide don’t outweigh the other benefits the money you spend on the school could bring for your kids. But then it is all on a scale. If your kids are going to inherit millions anyway and have their first house purchased for them the usefulness of the extra money kind of fades away if you aren’t charitably inclined.

    I would say that if you really want to send your kids to private school you’d better do it early – once they make friends and love their school they won’t want to leave. And there is a bit of an attitude at the public schools about the private schools. I believe SMU is commonly referred to as “Poo” in fact.

  94. When so many of the permits are office, commercial & infrastructure they become predictive.

    Why?

    The permits coming through from 2 years ago were a great leading indicator of what prices would do.

    How? Starts 2 years ago were nothing of note.

  95. To clarify my response, you asked whether you should spend money on bad investment “A” or bad investment “B”. I responded with “don’t buy either because they’re both bad investments”.

    You mention “the best of both worlds” but I clearly explained how private schools are expensive and academically benign at best and deny your kids experience in the real world at worst.

    To be clear, it doesn’t matter how much money you have, they’re still bad investments.

  96. Buildings starts are reactive not predictive.

    When so many of the permits are office, commercial & infrastructure they become predictive. The permits coming through from 2 years ago were a great leading indicator of what prices would do.

  97. Why does it smell like 2008 all over again ? Can’t be all that enthusiasm like in 2007 and a year later a pile of empty pits.

    “Part of the demand is being fuelled by Vancouver-area property owners cashing out to move to Greater Victoria, he said. ”

    As per Jack’s numbers:

    “And the number of houses in Oak Bay that have sold to out of town buyers, since the tax has been levied on Vancouver, so far this month is…

    ….none”

    “The value of building intentions climbed by 115 per cent to $140.3 million in June”

    Note the word “intentions” doesn’t mean “completions”.

    Looking back to 2007:

    “The value of building permits, however, has dropped $25 million since last year, and nearly $200 million since the pre-recession era of 2007.”

    We’re not even close to 2007 peak and they can’t handle the employment demand which always translates into garbage work quality as they hire amateurs and rookies fresh out of six month courses to build your dream home.

    I recall so many complainers on here about the pathetic finishing quality last go around, which will be another guaranteed repeat.

    They had great “intentions” back in 2007 until they didn’t and holes in the ground and developers in bankruptcy were common, as they made excuses over and over why the big holes had zero workers and financing deals consistently fell through.

    http://www.douglasmagazine.com/holes-in-the-ground/

  98. When we originally bought our first home it was without kids. Now that we have little ones it has made us consider other areas that would not have considered due to schools and walking distance to schools.

    That said we do have many friends with kids in schools that maybe considered rougher. (Esquimalt, Vic west, central and all the parents loved the schools think it depends on teachers, community and parent envolvement…although none have high school kids).

    I have heard mixed reviews for colwood and Langford areas though. Think many new schools and overcrowded due to increased families population growth.

  99. My kids with many friends at both say SMUS for education – that is the primary focus. If you have an academically inclined child that might be a good environment. GNS seems a bit more relaxed and they perceive the students and teachers enjoy the environment a lot. One of my children says the kids seem nicer at GNS FWIW. I’d visit both campuses and talk with parents and teachers.

  100. I wasn’t really asking about public schools vs private schools.

    You already got your answer, supported by several references no less. That you chose not to listen is another matter.

  101. It doesn’t get much more obvious that prices will rise for at least another ~5 years when you have well over a billion in multi-year projects underway in Vic

    Buildings starts are reactive not predictive. The increase in building stats says exactly nothing about the future resale market

  102. I wasn’t really asking about public schools vs private schools.

    We can afford to send our kids to private school while working from home AND spending plenty of time with our kids. So it’s not an either/or for us. We get the best of both worlds. Given the opportunities that private school offers, I think pretty much 99% of parents would choose private school in our situation.

  103. Out-of-towners will keep pouring in. It mostly comes down to capital inflow & jobs. It doesn’t get much more obvious that prices will rise for at least another ~5 years when you have well over a billion in multi-year projects underway in Vic. We’re just getting warmed up and the boomer retirement wave has only begun. Meanwhile the rest of the country is starting to slow (will help keep rates in check). Get ready for an influx of Ontarians to join the Albertans and Vancouverites.

    Aug 9
    http://www.timescolonist.com/business/building-permit-values-soar-in-greater-victoria-1.2318719

  104. Back to the housing market, the zero out of town buyers in OB so far is interesting…

    Possibly. 211 house sales with 45% out of towners means 95 sales to out of towners in 7 months, or just over 2 sales per week. It’s been about a week since the introduction of the tax, so zero sales vs an average of 2 is not really unusual. Will be interesting how the sales rate continues.

  105. I’m seeing a lot of new listings so far this month.

    310 new listings for this nine days compared to 241 for the same time period last year. That’s almost a 30% increase. The last 9 days in July only had 199 new listings.

    Things that make you go hmmmmmm.

  106. On the topic of schools. My wife will have you folks know she went to the crappiest public school in Prince George and got 100% on the Math, 99% in History, and 96% in the Chemistry provincial.

    Game, set, match.

  107. At the end of the day, I think it’s better to invest the cash and spend it on more important things for your kids later in life. Or just retire early and spend more time with them.

    Amen. Spend the time with your kids. We never had money to even think about private school until the oldest was in grade two. We made the decision to scale back on work and have me stay at home and keep the kids in public school. Best decision ever.

    All those lunches at home together and volunteer hours at the school when they were little are really great memories. We never needed before or after school care and sick days were no problem. Kids always came to our house after school because we lived so near the school.

    I asked the kids and they say it was way better to have a parent with time than a private school education. Unless the grandparents are footing the bill I’d put the money into time with them now.

    And JJ was right, the friends your kids make at elementary will provide a strong incentive for the next level of school – very hard to switch kids into private/public/different school after this age because friends are the primary driver.

    Back to the housing market, the zero out of town buyers in OB so far is interesting…

  108. Since the beginning of the year there have been 211 house sales and 45% of those homes were sold to out of town buyers.

    Interesting. So much for the idea that out of town buyers don’t know the areas and are buying in traditionally less favoured ones.

  109. I thought that I would give some good feelings to all those who own in Oak Bay.

    This year has been remarkable for residential appreciation in Oak Bay and it is mostly due to out of town buyers. Since the beginning of the year there have been 211 house sales and 45% of those homes were sold to out of town buyers. The median price is $1,127,500.

    That’s about the same number of house sales for the same time period last year when there was 209 but only 32% were sold to people outside of Victoria. The median price a year ago was $865,000.

    Primary Year Sale Price, Median
    2006 $655,000
    2007 $699,450
    2008 $760,000
    2009 $690,500
    2010 $785,000
    2011 $760,000
    2012 $745,500
    2013 $750,000
    2014 $778,400
    2015 $865,000
    2016 $1,127,500

    And the number of houses in Oak Bay that have sold to out of town buyers, since the tax has been levied on Vancouver, so far this month is…

    ….none

  110. “GNS or SMU? Any thoughts which one give a more rounded education?”

    Virtually any Public School. A well rounded education includes diverse, uncontrolled experiences and social interaction which private schools do not provide. Also, academic performance isn’t correlated with private school attendance anyways – there are dozens of these studies out there that show this:

    https://bostonreview.net/us/snyder-public-private-charter-schools-demographics-incentives-markets

    Even the 2007 version of Christy Clarke Agrees:

    http://409.cupe.ca/from-the-province-newspaper-march-2007-you-dont-have-to-pay-for-private-school-to-get-your-children-ahead-by-christy-clark/

    However, that $230,000 in savings turns Caveat Emptor calculated turns into $330,000 by the time your kid will graduate from highschool if you invest it properly. Having the choices available that an extra $330,000 in cash can provide (higher education, stable housing, debt free business investment, etc) will certainly increase the probability that your kids are successful or at least enjoy a higher standard of living if you raise them right.

    http://www.asa.org/site/assets/files/3793/life_delayed.pdf etcetera.

    After thinking about it for years, and poring over all sorts of research, I have concluded that private school attendance for kids is really more a status symbol for the parents. Folks think they are paying for a better education for their kids but they should really think again because the science proves they aren’t.

    At the end of the day, I think it’s better to invest the cash and spend it on more important things for your kids later in life. Or just retire early and spend more time with them.

  111. “2. Chinese citizens who are supposed to be allowed to send up to $50,000 a year out of China, pretty much on questions asked, are not getting that money sent. I feel like every realtor in the United States has called us on this one. The Wall Street Journal wrote on this yesterday. Never heard this one until this month.”

    Bye bye Vancouver and Victoria. This has been the #1 way to get money into Canada. No cash, no house, sale fall through, market tank as foreigners panic like Chinese stock markets and dump relentlessly. This is just getting started.

    As Ross Kay says the market has already fallen $100K in Vancouver since February but no one in media or GVREB wants to admit the real numbers.

  112. “the additional cost of a private school is not that much more.”

    You be the judge if that is true.

    Bear in mind that these numbers are two years old and prices have increased since.
    http://victoriavision.blogspot.ca/2014/06/cost-of-independent-schools-in-victoria.html

    K-12 at SMU will set you back 230K. That 230K will buy you a lot of extra curricular activities plus a sabbatical year in Europe 🙂

    SMU or GNS will get you on the hedonic treadmill. I have seen it happen. Think a ski vacation at Mount Wash. will cut it when all their buddies are going skiing in Chamonix?

    FWIW my kids are at Sir James Douglas. Good experience with both English and French so far.

  113. Long time follower – don’t post much.
    When we bought our house in Oak Bay just over two years ago the only reason was so our daughter could go to French Immersion in the core. We both work downtown and we were living in Colwood. I wanted to be able to grab my kids fairly easily in the event of an emergency and not have to contend with the traffic during drop off and pick up each day.
    Looking back, we should have moved to Oak Bay years ago. The community is great, the mayor came to our house to welcome us when we moved in. I get in and out of downtown with ease and live blocks from the ocean/beach/stores/parks etc.. Also, given lot size, I feel like we got good value in Oak Bay. The fact that our house is worth 40% more today than we paid for it in 2014 is also a bonus.

    (Note, in Victoria but server likely states Toronto)

  114. “Now that’s…. odd. I was homeschooled for a couple years and not going to school was kind of the point.”

    Not really. It’s not a traditional school. Isolation from others is not the point of homeschooling, or “unschooling”…. they wont be sitting in a desk all day with recess time and homework….

  115. Fair enough. Similar anecdote – kid signed up to transfer to Vic High after touring it and Mt. Doug. Hated the pep-squad, all-American football high school vibe at the Mt. Doug open house, but reneged on Vic High and switched to Mt. Doug because she thought kids at Vic High would be less engaged, and it was just a bad school. Tried to disabuse her of this idea, but ultimately it’s her choice.

    Not surprised that private schools are ranked higher. I’ve read at least one study claiming private school kids perform worse than their public school counterparts in University when the coddling suddenly stops.

    Anyway, straying off topic…

  116. Excluding private schools, my thought would be to select an elementary school that is easiest for you to get the child there on time and be able to pick them up quickly in an emergency and where there are private activities to put them in because of the ridiculous number of professional and holidays that public teachers have today. In Middle school the kids will follow where their friends are going and in High school your child will decide for themselves depending on what they enjoy. You might also want an elementary that has pre-school and after school care that you can pay for.

    I would not get hung up on finding the “best” public elementary school because they are all mediocre in Greater Victoria. If you wanted the best public education for your child you wouldn’t be living in BC. You would be living 4,500 kilometers to the east where the advantages of good schools and high level careers exist.

    You might want to choose a French immersion school if you are concerned about students with English as a second language. It is very rare not to find any child in French immersion that does not have English as their first language. French immersion also tends to weed out children with learning problems. French immersion is a politically correct way for liberal minded parents to send their children to a predominantly White middle income school without the shame.

    As for the cost of private schools versus public schools. Since private schools don’t have professional days every month, where you have to pay to have your child in some activity, and the children wear uniforms thereby reducing the clothing costs of your child, the additional cost of a private school is not that much more. And private schools have more after school hour activities. Private schools are also more selective in the students they admit. If you and your child are not keeping up to the schools standards you will be asked to leave.

    Besides by the end of grade 3, you’ll have an idea if your child will go on to higher levels of education or spend some time in prison. In the USA they use the scores of grade three students to determine how many prisons to build.

  117. I bought after reviewing the schools. My first choice for elementary was Sir James Douglas which had good seismic ratings and French Immersion, but we couldn’t afford anything near it. We ended up at Willows, which was great.

    According to my kid who did a test day at Vic High, Oak Bay is a “way better school”. Sample of one but he said the teachers seemed more involved at Oak Bay and the kids seemed less interested in school at Vic High. They do have a fantastic band program.

    I had another kid transition to French Immersion at Lansdowne. Neither of us enjoyed the school, although there were some really nice teachers. We transferred to Monterey in English instead and it was excellent.

    I’d say the individual teachers matter the most, particularly in elementary, and at public school you are generally not in control of this, but the schools do have differences. First world problems for the most part.

    Also, FWIW, Oak Bay has a higher rating than Mount Doug on the Fraser Report and all the private schools are ranked higher than any of the public schools:
    http://britishcolumbia.compareschoolrankings.org/secondary/SchoolsByRankLocationName.aspx?schooltype=secondary

  118. @Michael, if schools were really that important, shouldn’t Saanich East be beating out all others, what with the illustrious Mt. Doug and prestigious SMU? Victoria’s got Vic High, which seems to have an undeservedly poor reputation, thanks to the pointless Fraser Institute.
    @Leo S, the walking distance thing makes sense to me, and that would be the only reason I would consider buying close to schools. Could care less about the average graduating GPA of the student body. I do wonder how many people buy near Oak Bay or Mt. Doug because they are reputed to be “good schools.” I’ll assume it’s a small number.

    Unrelated: One day I’ll figure out how to quote on this thing.

  119. our son will be going to a homeschoolers school

    Now that’s…. odd. I was homeschooled for a couple years and not going to school was kind of the point.

    I’m curious to know how many of you homeowners with kids factored neighbourhood schools in to your decision on where to buy?

    Definitely. I don’t care about ratings though. All 3 levels of schools are within a 5 minute walk of our house. I’m allergic to driving kids around and fundamentally opposed to the grind of endless lines of cars for school drop off.

  120. Re: Where to buy?
    Follow the leaders. The best areas (schools, amenities…) always give the best ROI.

    Annual gains:
    Oak Bay 33%
    SaanichE 23%
    Metchosin 13%

  121. We bought next to the elementary school and then sold and bought between the middle and high school. Kids have enjoyed coming home for lunch and it made dropping off forgotten bits and participation in extra-curricular easy. And the convenient location has always meant lots of friends stopping in and they’ve been able to walk to their friends’ homes. I would do it again.

  122. We are home schooling so the school has little play in our choice. Being close to Vic in general does since our son will be going to a homeschoolers school a few days a week but that has nothing to do with catchment.

    Haha on the OB and Fairfield suck routine!

  123. Regarding schools, I’m curious to know how many of you homeowners with kids factored neighbourhood schools in to your decision on where to buy? We bought our place based almost solely on price and proximity to town, and let the kid decide which middle school and high school to go to, with the understanding that she would be commuting by transit.

  124. “So which is it”?

    Exporting education, tourism and attracting working class immigrants to start businesses, pay taxes and otherwise contribute to the Canadian economy are all very different from admitting wealthy immigrants who don’t work, don’t pay taxes, use social services and accept transfer payments while squatting on residential real estate for their own non-taxable benefit.

  125. Maybe it’s just the effect of a bigger city, but I also found that Vancouverites didn’t seem to have that strange resentment towards pricier areas of the city, eg., everyone understood that places like Kerrisdale were closer to the ocean & downtown – therefore prices were higher, and if people benefited from sudden increase in prices, that was luck – didn’t indicate at all whether someone was materialistic. Ironically, a lot of UBC profs & business owners & techies were opposite of materialistic, very involved in environmental causes, etc.

  126. Yes those Oak Bay crackheads – so materialistic – nothing but the best crack for them. They flaunt their inflatable boats filled with Perrier bubbles and gold plated paddles 🙂

    What a joke. Most of the people in OB just like being near the beach and gardening – the increase in prices was a shock. Plenty of modest houses. There are materialistic show-offy people living in every neighbourhood.

  127. To make a blanket statement about ‘Saanich’ being this or that is just trolling. Are we talking about the 10 Mile Point Saanich or the Tillicum/Gorge Saanich? Because they’re so similar. It just sounds like someone trying to justify their choice.

    Schools? Yes Oak Bay High is terrible. 10 Mile Point is so warm in the summer, sticking out into the ocean and all. I would know, having grown up there with a solid collection of summer sweaters. I had to beat off the bums sitting at Ottavio this weekend. Nothing but crackheads at the marinas, sure. It beats all those posh people hanging out at the Bottle Depot on Quadra.

    Every place has its issues – some parts of Oak Bay and Fairfield are a little more urban and established and are just more dense and active than some parts of Saanich. I live in South Jubilee; the ‘Oak Bay Tijuana’ as we joke. Occasionally there are homeless around, yes. There’s also a really nice community of people who know each other and enjoy a vibrant community. Most urban places have homeless people, and petty crime from time to time. Some houses are old, some are new. You want mold, though? I’d put up Gordon Head as being high in the running for the moldiest place in the CRD. My house, like a lot of houses in the core, is about 105 years old, has central air and sits on slab on grade. As a result of no basement, constant air circulation and no large trees shading it, it’s as dry as a popcorn fart; unlike some basement with baseboard heat in the shadow of Mt. Doug.

  128. I don’t know about crackheads but Fairfield and the Gonzales part of Oak Bay are seriously cold and windy compared with Cadboro Bay or Cordova Bay in Saanich East.

    Most Saanich East schools are as good as Oak Bay. The St. Michael’s senior school campus is in the Saanich East Mount Tolmie neighbourhood. Mount Doug is a top public school.

    We talk about Oak Bay being the wealthiest part of Victoria but there is serious money (including some old money, too) in parts of Saanich East, too. It’s obvious if you have a look at streets like Queenswood Drive but true even in seemingly more modest parts of Saanich like Gordon Head.

    I was surprised to see that the average household income in some Gordon Head neighbourhoods such as Hillcrest (not even a waterfront hood) is north of $250,000+ – much higher than the household income in South Oak Bay and close to the household income in much of Uplands surprisingly. I believe the incomes of well paid UVic administrators and senior profs contribute to those figures.

    I’ve lived in both Oak Bay and Saanich East. They each have their points and both very desirable.

  129. These areas are nice – I’ve lived in them all. The schools and people are pretty similar as far as I can tell. Who your immediate neighbours are seems more like chance than neighbourhood in my experience. Oak Bay and Fairfield are generally more walkable and charming, which I found worth the higher price a few years ago – not sure about now.

    I’ve never noticed an epidemic of crackheads taking off in boats from the OB Marina myself and I’m down there pretty regularly. That was probably us with our shabby boat wear.

  130. The interior decorator strikes again. I do have to concur on Oak Bay and Fairfield. I don’t understand the fixation on these two areas. The part about crackheads, tourists and schools, etc., is pure conjecture.

  131. Must be some longtime Victoria renters here that still think that Oak Bay or Fairfield is better then other places.

    First off, Fairfield is seriously cold. It’s 5 degrees or more colder then Sannich.

    It’s full of rental suites, old mouldy houses, crappy half paved streets, tons of homeless everywhere and a lot of theft type crime. It’s also very hard to get anywhere interesting from there.

    Same with Oak Bay. Have seen so many homeless wandering around. Saw a bunch of crackheads in a stolen inflatable boat at the Oak Bay Marina the other day.

    Saanich is where it’s at. It’s easy to get anywhere interesting, no homeless/crackheads, a real community feel to it with mostly homeowners and families. The houses and lots are quite large. And you can still get a decent house for around 1.1mm unlike Fairfield or Oak Bay.

    The beaches in saanich are clean and mostly locals, Fairfield and Oak Bay is tourists, crackheads, or partiers.

    Also, both areas attract that certain annoying status focused materialist that you really don’t find elsewhere. “New Money” trying to outdo their friends and family.

    Also, there are just better people in Saanich in general. There are much better schools out that way now.

  132. You posted in the spring that your clients were having real trouble buying anything given the multiple offer situation in the core and the fact that many bids were placed with no subjects. Are you still seeing that? Have your clients had any more success in buying houses recently than they did earlier in the year?

    I went on vacation and five of my buyers looking at SFH in the core purchased during that time so I’ve pretty much just being doing listings since I came back. Things definitively feel slower but sellers are starting to price higher.

    Homes that would have been listed for $699,000 earlier in the year and sold for $820,000 in a bidding war, for example, are just being priced at $849,900 now, for example.

  133. We were not priced out of OB, Fairfield but chose not to buy there.

    However about a year ago that was our plan going in. We felt we would buy there regardless of the escalating costs. As we saw the market drive upwards I started to take a step back and reevaluate. Why were our perceptions to buy in OB, Fairfield formed? Proximity? Amenities? Schools?
    Would we walk to buy groceries? If not within 4 blocks then probably not. Same for amenities. Further if close to beaches was fine. Schools… How we based our concept of a good school, based on rankings? Forgive me but they’re a total waste of time. Top ranked schools prepare for these tests highly skewing the results. Even at highly ranked public schools there are poor teachers. Suggesting that kids need to attend a top school or private education is placing a huge expected result from your children. Suppose they graduate from SMU or GLN and choose a career in the arts. Are you fine with this? Or must they become Doctors, Lawyers, etc. Success isn’t marked merely by salaries. It’s an important discussion because these types of expectations are no different than those placed on neighborhoods. Same with expectations on further price escalation.

    Perhaps Hawk is correct, this Fall the wheels fall off the world economy, Russia invaded the Baltic States, China’s bond market implodes, and Oil reaches $15/bbl, Cruise Ships and Tourism slows to a trickle. If you decide to buy now you should be prepared to be happy in your home if one Spouse loses a job, House prices decrease by 30%+, while home repairs are required. Paying 134%+ of assessed value is IMHO unwise.

  134. @ Marko:
    You posted in the spring that your clients were having real trouble buying anything given the multiple offer situation in the core and the fact that many bids were placed with no subjects. Are you still seeing that? Have your clients had any more success in buying houses recently than they did earlier in the year?

  135. @SweetHome: Thanks for the details re: your house hunt and where you eventually bought. I too have been completely priced out of Fairfield and OB this year, which is where I always thought I’d live. It’s not the end of the world not to live in those neighbourhoods, but it is a weird thing to suddenly realize that within the space of a few months real estate has gone up that much. I’m happy for you that you ended up in one of your top 3 neighbourhoods. That’s pretty great. I’m sure you’ll be happy in Saanich East.

  136. Don’t forget Christy Clark says the foreign tax is just the first of many steps to be implemented. Her numbers are not good and will do anything to win next May and do everything the NDP has called for.

    This is a major political crisis as well as a housing crisis. Dumb slumlords with their stupid arrows and 20% annual increase calls don’t grasp this simple concept.

    The Chinese may want in but their odds of them succeeding are declining by the day.

  137. @NumbersHack
    Right on about difficulties of getting money out of China!!! I’ve heard from two acquaintances in the China banking system, at opposite ends of the country, that new computer algorithms have been activated that use AI to identify suspicious banking withdrawals/transfers between acquaintances, associates, friends, family members, business associates, etc

  138. @Hawk + China Watchers

    1/ Getting $ out of China via USD is getting harder and harder
    http://www.chinalawblog.com/2016/03/getting-money-out-of-china-the-reality-has-changed.html
    – banks are asking more questions
    – and a Central Banking System for every bank is now in place tracking all USD/FX transactions
    – the goal is protect fX reserves, if you look at the monthly data, reserves are stable vs decreasing
    – If people desperately need to get $ out, there is now a 5% premium on the black market.

    MOVING OUT OF CHINA
    – it use to be rich/older people in their 50s who wanted out
    – now it is younger people with families, and professionals who want to leave
    – the % is not large as there is still more opportunities in Asia, but you are working from a large base

    KEEPING PEOPLE IN CHINA
    – if the physical environment got better here, more people would stay
    – the pollution problem is caused by energy (coal) + automobiles
    http://wdi.worldbank.org/table/3.6
    the average Canadian uses 3x the energy of the average Chinese person in 2013
    – 7202kg/person/year VS 2226kg/person/year
    – I don’t personally see the environment improving without a technology pivot
    – therefore I don’t see the demand of people wanting to leave to go down
    – the ability for them to leave might be constrained, but demand will be there for the foreseeable future.

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