Dec 12 Market Update

Weekly stats update courtesy of the VREB via Marko Juras.

December 2016
Dec
 2015
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 222
465
New Listings 218
451
Active Listings 1702
2517
Sales to New Listings  102%
103%
Sales Projection 502
Months of Inventory

5.41

Amazingly enough we are still running about 8% ahead of last year’s sales rate despite having nearly 40% less inventory.   I thought December would be the end of the trend of improving year over year sales but it isn’t the case yet.

December is a month where we usually see about as many listings as new sales, so don’t expect any reprieve to the inventory situation until February at the earliest.

Coming up next:   The ruling concerning whether the Toronto Real Estate Board can block the release of sales data is due to come out any day now.   If you recall, the Competition Tribunal ruled that the TREB cannot block this data from being made widely available to the public, which the TREB promptly appealed citing privacy concerns to releasing the data.   My prediction is that their appeal will fail and the data will be released.  This precedent will likely spread to the rest of the country within about a year so look forward to Zillow in Canada and many other similar sites that will pop up.

It will be interesting to see the effect on the real estate industry once this happens.  Currently they are wailing and gnashing their teeth, but has it really hurt the industry in the US?   Their home sales data has been available for years and yet typical commissions in the US are 5-6% of the sales price, which is even more than here (typical is ~3.5% on the average Victoria home).   While those sites are allowing people to be more informed (or is it just more info-garbage?), they’re apparently not doing a thing to impact the value proposition of agents.  The high transaction costs seem to be much more resilient to a better informed consumer than anyone would have anticipated.

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186 thoughts on “Dec 12 Market Update

  1. That was the situation in the early 70’s when a house in P0int Grey cost only a couple of years of household income. So for first-time buyers, it seems that an 18% mortgage rate would be a God-send.

    Thing is, you had to get in before mortgage rates started rising. If you jumped in at 18% rates, you were about to take the roller coaster down.

  2. New listings for house in the core are down about the same as sale volumes. But Active listings are only down by 21%. That put November as the third highest months of inventory at 2.21 behind January (2.84) and October at 2.38 We were scraping bottom in April with half the inventory we have today when it was only 1.06 months of inventory.

    We have to look back to 2006 and 2007 when the MOI was this low. Oddly, although our median prices were rising they rose over a much longer period of time in 2006 and 2007 and not as much in percentage or lump sum as what happened this spring over a couple of months.

    Or to think of it another way. We had 5 or 6 years of a flat market where people paid down their mortgage and gained equity. Equity that they used to buy homes this year. However that equity advantage quickly disappeared with rising prices and now sale volumes have fallen dramatically.

  3. “Christy is just starting a subprime lending election ponzi scheme”

    The world of zero interest is truly awesome. If five years of free money doesn’t keep the bubble growing, then extend it to ten, twenty, for ever.

    It’ll keep construction booming, and anyway what else can she do?

    The forests are so poorly managed that the industry has now to make do gluing shavings together, the gas bonanza has yet to be realized and may never be, and there must be a limit to how many British Columbians can find employment making video games.

  4. When interest rates go down, “affordability” is said to go up, which means that prices rise. When interest rates go up, “affordability” is said to go down, which means prices fall.

    Therefore, if “affordability” declines sufficiently, many folks can afford a house without entering into expensive long-term debt. That was the situation in the early 70’s when a house in P0int Grey cost only a couple of years of household income. So for first-time buyers, it seems that an 18% mortgage rate would be a God-send.

  5. Christy is just starting a subprime lending election ponzi scheme just as rates are about take off. That’s the worst thing you could do to a young person.

    Meanwhile she makes the couples with no kids and seniors pay more MSP then give it to the families who just got an extra $400 a month from Justin. Christy is toast in the spring.

  6. @ jj

    Yes there is a seasonal variation in sales but not 54%. Last year it was 35% The year before it was 37%. In 2013 it was 38%.

    Yet, despite the sales slump, listings and inventory are way down, most likely because those thinking of selling are waiting for prices to peak. Once they realize prices have peaked, then the deluge.

  7. Totoro, forget talking about HELOC’s its a non starter in this discussion.

    You can refinance your home with a private equity lender that doesn’t have to stick to loan to value bank guidelines. Most homes under foreclosure have mortgages in excess of their market value. Some how they got mortgages for more than the property was worth? Because desperate people find desperate means to get money.

    It’s highly doubtful that you’ll find a major lending institution financing these loans. But there are a plethora of lenders you never have heard of that will. Just google the law courts and you’ll see how many equity lenders, that few people have ever heard of, that are foreclosing on home owners. The lending world is bigger than just a couple of Canadian banks.

  8. Mike , you must have a shallow life as a rich dude to look back at quotes from a year ago. No worries tho. The commodities boom you screamed about has a pulse but still well below where you made the infamous blown call well over a year ago.

    http://stockcharts.com/h-sc/ui?s=%24CRB

    Christy wants to give out free tax payers money to keep the bubble from popping after Justin tries to prevent one. Talk about political pressure from developers greasing the palms. The real economists (not Mike) say this is a joke. NDP will rip her a new one. Disaster in the making.

    Joshua Gottlieb ‏@GottliebEcon 9 minutes ago
    4: Subsidies like this one actually worsen the affordability problem and reward speculation.

    UPDATE: BC to offer interest-free loans for first-time home buyers

    The provincial government says it will match contributions from first-time home buyers on their down payments, providing up to $37,500 or up to five per cent of the purchase price. The 25-year loan is both interest-free and payment-free for the first five years only

  9. Your stats are really helpful JJ. And I’d agree that you did point out that condos were a deal when they still were.

  10. Of course I was talking about dropping sales volume at this time last year as it was the start of the winter market.

    And I was also describing the market anomalies that illustrated that something strange was happening in the market as prices were heavily skewed with large fat tails . That eventually proved out to be the harbinger of the rapid rise in prices in February, 2016. I also suggested that people look at buying condominiums for quick price appreciation.

    For a “bear”, I think I’m pretty bullish on real estate. As I search out where the market is under performing for the best deals for buyers.

  11. You have to qualify for refinancing based on your debt service ratio. You can’t just pull “almost all of your equity out”.

    If you are in trouble financially and trying to consolidate debt and can’t get a HELOC because you don’t have 35% equity, the maximum you can refinance for is 80% of the home value or the an amount between 20-35% of the equity in your home. You will not be a high ratio borrower.

    And the new mortgage rules apply which reduces borrowing capacity by 25% further narrowing the amount you can borrow.

    A lot of people with very nice homes are up to their eyeballs in debt.

    12% of Canadians are “highly leveraged” – they carry 40% of the debt in Canada.

    However, steady increases in asset values have generally kept debt-to-asset and debt-to net worth ratios stable. I’m not sure what percentage have very nice homes. What we do know is that, on average, Canadians have 70% equity in their homes.

    Here is a report on indebtedness with lots of stats:
    https://www.cmhc-schl.gc.ca/en/hoficlincl/observer/upload/housing-observer-examination-household-indebtedness.pdf

  12. As for Hampshire you would have to believe that BC Assessment is totally incompetent in how they do their job to believe such rubbish.

    Or that the home was substantially renovated. Renovations that BC Assessment was not informed about by a building permit. Or that the renovations were performed after October 31, 2015 and would not be included in this years assessment.

    Anyway the property taxes based on the old assessed value of $676,00 were $4,356. This new home owner is going to get quite the surprise in the future come property tax time.

  13. While there are limitations of how large your global limit may be on your home equity loan. You can re-finance your home to pull out almost all of the equity in it. That would make these home owners new high ratio borrowers too. And over half of the re-finance appraisals are for debt consolidation purposes.

    And that was a conversation I had this week with a person that had a $950,000 home and needed to consolidate another $40,000 of debt into the mortgage. She couldn’t do it with a HELOC so she needed to re-finance the mortgage. That adds mortgage, legal, appraisal and other fees to the cost of the loan.

    A lot of people with very nice homes are up to their eyeballs in debt. It isn’t just first time owners or people that just bought their homes in the last five years. Most of the foreclosures that I do are on homes that were bought 20 years ago in Saanich, Victoria and Oak Bay. Because prices have gone up this year, the owner can re-finance with another lender to get out from pre-foreclosure but that only puts off the inevitable. So don’t assume that it is the first time buyer as I’ve had to appraise $10,000,000 homes that were in the pre-foreclosure stage. Crap happens to everyone.

  14. Sells for 100% over assessed! 1367 Hampshire with an assessment of $676,000 sells for 1.3 million. The market must be heading up up up. Just wait for this new loan for first time buyers to be announced. Yep, all these doomers with their hidden agenda of wanting prices to drop so much that is all they can talk about: you snooze you lose.

    PS. If you disagree you are just a doomer. Other facts and market information are irrelevant.

  15. I don’t know why you guys don’t just cut-n-paste from last year’s date to save time.
    Jack was going on about dropping sales same time last year, and here’s a snippet of hawk’s comments from Dec 15, 2015.

    On the other hand we have another Oak Bay home with a price reduction, and a massive one at that, of $600,000 from $2.1 to $1.54 million and under assessment.

    Looks like Vancouver is leading the way down and all the sheep are left overpaying here.

    Surprise, surprise. Canadians borrowing their ass off to infinity and beyond.

    Federal Reserve raising rates for the first time in nine years…risks for a credit crunch in the region as China’s economy slows

    If you don’t like my posts on new information potentially effecting house prices then skip them and go back to your rocking chair.

    I saw a Fairfield house in nice shape drop their price from $720,000 to $660,000 in order to get the sale. That’s a 60K hit on high expectations. Ouch. As my friends agent said to them there is a shift in the winds in the Victoria market.

  16. That drop in sale volumes is more evident in the more costly areas.
    For Saanich East, Victoria and Oak Bay the drop in single family home sales was 64%
    In the rest of the core it was 51%
    Langford and Colwood it was 55%

    Oak Bay had a drop of 67% in sales from April to November.

    These are not typical seasonal declines.

  17. As Barrister mentioned the high cash buys via the agents he talked to, you have to remember it only took 11% of the US market to go into dire straits before it crashed. The cash purchasers aren’t part of the selling process in a crash, it’s those who borrowed too much as LeoS’s article stated.

    That one third will be enough to send it over the cliff with a rapidly declining purchasing power to keep the market moving.

    “The bank calculates that almost half of new high-ratio borrowers in Toronto are above that threshold, and 39 per cent are in Vancouver. In Toronto’s case, such monster mortgages are spreading to nearby cities like Oshawa and Hamilton too.

    “In these cities,” the bank said, “the proportion of high-ratio mortgages with … ratios exceeding 450 per cent has more than doubled over the past three years, from around 10 per cent to roughly 25 per cent.”

  18. But we have seen a drop in sales. A 54% drop in sales from May to November. It’s just that most on this blog think of it as being seasonal.

    Yes there is a seasonal variation in sales but not 54%. Last year it was 35% The year before it was 37%. In 2013 it was 38%.

  19. LeoS,
    I think it’s the typical delayed reaction based on the amount of FOMO who were lining up just a few months ago who don’t pay attention or went and borrowed more money from ma and pa. The deniers also play into it and thus takes awhile to drain the swamp, so to speak. 😉

  20. Hawk

    408 and 581 are the assessed prices on those 2 price reductions. People are pricing too high at the beginning.

  21. Barrister,

    What happens if 10% of the seniors die off ? I think it’s a saw off at best. Victoria is not the place it was 20 years ago for many who think they want to retire here and might have not been here for ages. I would imagine Parksville/Qualicum is the future growth area, less big city BS and few mental health problem cases on every corner. Been downtown for a walk lately ?

  22. From this morning’s Globe on the plans of millennialis, boomers, and gen-Xers to leave Vancouver:

    A poll of more than 1,700 B.C. residents, done by Insights West for Resonance Consultancy, indicates that 68 per cent of the millennials surveyed would like to live in the Lower Mainland if money were no object.

    Only 16 per cent who live here now think they will move away within five years.

    But other data in the poll also show that the region is on the verge of a tectonic demographic shift.

    That’s because a third of boomer homeowners, many retired or on the verge of it, say they’re ready to cash out and move to another part of the province in the next five years. That’s significantly higher than in any other part of the province, where typically only about 20 per cent of that group say they think they’ll move within five years.

    Even more striking, half of Gen-Xers who are homeowners say they’re ready to move to be able to afford a larger house.

  23. Couple of nice townhouses in same complex on Mallek Crescent had to slash their prices $14K and $10K. I thought townhouses were on fire and selling in a day. Guess not.

  24. Hawk:

    You are right about there being an impact when the boomers finally move on. But I think you are looking at a fifteen year horizon. In the meantime the demographics nationally would suggest that we are looking at just the beginning of the wave of retirees potentially moving here. To avoid opening up a flood of “not everyone wants to move to Victoria comments” try calculating the numbers if only one per cent of Toronto boomers decide to retire in Victoria over the next few years.

  25. The city of Victoria should seriously consider passing a bylaw requiring all of us to stop aging and start becoming younger. I think I will work on that today.

  26. “At a quick eyeball there seems to be more people who are 50 and older than there are between 25 and fifty.”

    Less young people to buy the old folks homes when they want to downsize or die off. Kills off the food chain with tougher rules for first time buyers makes it seem like it’s inevitable inventories will increase in due time.

  27. Chris:

    I tend to agree that house prices might be plateauing out at this point. The joker in the pack is if there is an increase of retirees coming to Victoria over the next few years. I spoke to two real estate agents who sell high volumes in what I call south Victoria (south of Bay Street basically, Rockland, Fairfield, James Bay and Oak Bay) both of whom said that their experience is that well over half of the single familly houses were being bought for all cash and no mortgage. One said that in Oak Bay that number is more than three quarters. I have no idea of the truth of that but I am passing it along for what it is worth.

    If that is true, I am not sure what to make of those numbers. Does anyone have any thoughts?

    Secondly, thank you for providing the borrowing numbers. It would support the prices of homes in the West Shore for most income earners in Victoria but I agree that other factors seem to suggest that we have reached a plateau. It could be argued that if interest rates continue upwards that price declines might be seen on the west shore. Unless mortgage rates seriously increase then I suspect that price declines would be pretty minor.

  28. At a quick eyeball there seems to be more people who are 50 and older than there are between 25 and fifty.

    I saw that! Looks like a significant increase in the age bracket.

  29. Langford price slashes continue. 872 Arncote Place whacked $34K , now $535K. Guess it’s not as hot as it was out on the Westshore, things change.

  30. LEO:

    Thank you for the demographic numbers. At a quick eyeball there seems to be more people who are 50 and older than there are between 25 and fifty. (I am discounting the big spike in 20to 25 because they probably represent the large number of students here).

    The other relevant fact seems to be that the number of people over fifty has grown substantially over the last decade. I will keep looking for a breakdown by age. Obviously the government must have the raw data to figure out medien income but they might not have parsed it out by age.

  31. Barrister – I didn’t give it a lot of thought and the only issue I had was the idea that there were so many rich business owners (and rich retires) that average/medium income had no relevance. This was stated like it was fact with no supporting info.

    The points you made are sensible and I agree – the average wage earner is not buying housing in the core unless they have a huge down payment. However the ratio between house prices and incomes, at all levels, has never been so high. Using the Royal Bank qualification tool with a $200k income and $350k down payment, the maximum qualification is just over $1M. That’s with no other debt – no car payment, loans, etc. What you get at that level is the very low end of Oak Bay and is usually a house that requires extensive renovations. So I suppose this income level could support current prices but it’s hard to fathom prices going up significantly from here with all the other headwinds pointed out (interest rates, debt levels, etc.).

  32. Chris:

    First, I agree with you that private business owners probably have a minor impact on house prices. So lets put that aside. Were we probably disagree is on the impact on house prices of retires on the one hand but also how retires may alter the medium income of Victorians. The newest census I was able to find was 2011 which shows the city of Victoria having about 19% of the population over 65 and with Oak Bay having almost 25% of the population over 65. The median age in Oak Bay 54. The national average is about 14 percent. It is not untypical for many seniors to have a fairly substantial asset base while also have a low income. The fairly large student population would also impact the medium or average income.

    What would provide a much better picture of affordability is the median or average incomes of those between age 25 to 55. This would tend to exclude students and most retirees. It would include most first and second time homebuyers.

    The other factor when dealings with averages is that they can be deceptive if there is not a breakdown by tranche. I vaguely remember one of my profs illustrating it by looking at the average age in the City of Guelph. At the time it was something like 42. In point of fact, people aged between 35 and 50 were only a small percentage of the population. Because of the University there was a vast number of young people in Guelph while there was also a large population of people over fifty. The thirty to fifty year old had migrated to jobs in the big cities. My point is that the average, while accurate, did not reflect the reality.

    I suspect that a similar effect might be occurring in Victoria. A lot of the jobs in Victoria are in either retail or tourism both areas that are known for low pay. On the other end of the spectrum a lot of the public sector jobs are reasonably well paid. There is a large gap between the two. The example pointed out to me is that a 35 year old police officer married to a 30 year old teacher have a family income around 150k. If there are two segmented groups of wage earners then these has some real implications for housing prices in Victoria.

    I have looked but I have not been able to find any really good stats on income in Victoria as to wage breakdowns by segment and by age. If anyone can find these please post them.

    If you point is that it is harder for people in low paying careers to get housing in the core i totally agree with you. Most people, particularly developers who are getting rich, propose increasing density. I am probably the single voice on here suggesting that we follow the more recent, and in my view very successful Swiss model of moving jobs into clusters of smaller cities and communities. On that point perhaps we can agree to disagree.

    To be clear, I am not disparaging your point about the average income but rather I would like to see more thorogh statistics to see if we are dealing with statistical reality or deception.

  33. Big news from provincial govt dropping tomorrow regarding a 5 year interest-free loan matching program for couples under combined income threshold. This is bound to add further confusion to the markets. You heard it here first, folks!

  34. For all of you that are about to receive your assessment. The assessed value is an estimate of your property as at July 1, 2016 assuming the condition as at October 31, 2016.

    So in Sidekick’s example his 25% increase is from July 1, 2015 to July 1, 2016. If you disagree with your assessment that is the date of the value you are appealing. Not what you think your property is worth today.

    Sale Price, Median Single Family Core Districts
    Month 2015 2016
    Jan $542,500 $655,500
    Feb $597,500 $681,500
    Mar $625,000 $740,000
    Apr $631,200 $759,500
    May $620,250 $760,000
    Jun $629,450 $743,000

    Jul $610,000 $754,500 23.5% year over year increase

    Aug $659,500 $728,000
    Sep $640,000 $781,550
    Oct $677,250 $826,500
    Nov $620,550 $809,000
    Dec $672,500

  35. I think one thing that may change the market is simply perception – we’ve have had years of lower and lower interest rates, ever rising prices and short lived corrections. If Vancouver continues to lose ground it will become clear this is not a buying opportunity, as has happened in the past, but the actual correction everyone kept predicting but never seemed to come. There will be an urgency to crystalize the massive tax free gains and I think we’ll see some momentum on the downside with cash flow negative “investments” unloaded. To me the stars seem to be aligning for this outcome and with the recent quick rise in Victoria prices we’ll see some of the same, though less pronounced. Seems posters here believe the perception of buyers will remain the same regardless of the changing economic environment.

  36. Of coarse not everyone in Victoria is rich. That would be a ridiculous statement. But, I dont know why you are arguing about it since absolutely no has even suggested that everyone in Victoria is rich.

    I bring it up because in the past when I’ve mentioned average/medium incomes it was quickly dismissed with several comments indicating the reason it’s so low is because the many Victoria business owners who draw a minimal salary while reaping huge profits within their corporations, as well as a prevalence of rich retires with small incomes vs. their assets (more likely to have some significance). I’ve just been making light of those weak arguments because the comments irked me! I’ll refrain from doing so going forward…

  37. I think Warren Buffett was referring to personal debt, and he wasn’t saying you shouldn’t use leverage – he was just saying that it’s the only way a smart person might go broke. (Thanks for posting his quote)

    Speaking of stereotypes, Warren Buffett said, “If you’re in the luckiest 1% of humanity, you owe it to the rest of humanity to think about the other 99%.”
    Imagine that – a rich dude with a heart – not as uncommon as you might think.

  38. Ouch. Pre-assessment came in the mail today. 25% jump over last year (not in OB, all land value). I actually think they got the market value about right this time, although I could probably argue 10K off.

  39. Warren Buffet has a wonderful way of inserting common sense into a matter. Thank you for that wonderful quote.

  40. On HELOCs and leverage;

    “The only way a smart person can go broke is by using leverage. So if you’re really smart, you won’t use it and if you’re not so smart, you have no business using it in the first place!” Warren Buffett.

  41. Thanks Leo. I didn’t realize that.

    There’s two ways of looking at it, right now it doesn’t take the season into account, so the absolute assessment is correct as it is less hot than it was in the summer. It is “ludicrously hot for November” but just “hot” from an absolute perspective.

  42. Just Jack:

    You might have a point about the lower inventory being the new norm. The number of new listings seem to be matching the monthly sales. In some areas the amount of inventory seems to have crept up a bit from three months ago.

    I am not sure how much the drop in house prices in Vancouver will impact here in Victoria. While prices have dropped the gap between similar houses still is extremely large. Now some people on this blog do not believe that transplants have much influence on our market in the first place so, if they are correct, it should not matter much.

  43. TD just raised rates again. 5 year fixed up to 2.94.

    “James, I guess my point is that it would be great to stop generalizing about well-off people as if they’re all braggarts trying to avoid taxes.” Stereotypes are stereotypes for a reason.

    “Well they have a point, since they are required to pay more than half their income in taxes (if you include capital gains tax, excise taxes, sales taxes, property tax, etc.).” They aren’t, and they don’t since most don’t make their money from a paycheck.

  44. Month to month sale volumes drop off dramatically in the winter.

    However, looking back over the last 252 house sales in the core since October 24, the median price was $792,500. The year before there was 241 house sales in the core for the same time period and the median price was $654,000. A whopping increase of $138,500 or 21 percent.

    But for most of the year the median price for a house in the core has not changed significantly since April and May when it was $760,000.

    Despite the low inventory, the low number of new listings to sales and the low days on market – prices have not changed much since the spring.

    If this is a hot market and prices are flat. What happens when the market eventually cools?

    While we or at least some of us, religiously monitor the months of inventory, sales to listings ratios and days on market. That measure of illustrating if we are in a buyers, sellers or balance market is just a guide and is always shifting. If we only have 2 months of inventory and prices are flat, then 2 months is the new balance instead of the usual 5 or 6 months.

  45. Vancouver is down right depressing compared to Victoria. Even the valley is a complete wack job of a place to be. There’s no way I’d live there in a million years even if I had all the money in the world. Just terrible, completely terrible.

  46. I always feel like December stats are useless, especially after the 15th or so. No one wants to be worrying about staging open houses around the holidays or trying to make dead flowers and yard plants seem vibrant in the dark days around the solstice. January is almost as useless, except the latter half of the month can start to have enough volume to be interesting sometimes.

    So don’t sweat the details. We wont know anything new until the the first weeks of February – and then we’ll be roaring (or limping?) into the spring market, and trying to figure out how the CIA’s assassination of Pres. Trump will affect things in 2017. Ha!

  47. Re: rich people and charity

    “Most bleat on about how much taxes they’re paying.”

    Well they have a point, since they are required to pay more than half their income in taxes (if you include capital gains tax, excise taxes, sales taxes, property tax, etc.).

    With that, you’d think that governments could do a decent job of caring for those who cannot care for themselves.

    True, many, it seems fall between the cracks or, perhaps, deliberately evade the system, which is why we still have a need for charities, some of which no doubt do a good job.

    Unfortunately, Canadian governments provides little or no supervision of charities, so one is usually uncertain which charities are honest and which are a scam. It would be good, in my view, if all charities were required by law to provide on request to those they solicit for contributions a one-page audited statement of accounts clearly revealing all overhead costs and the manner of cash disbursement on behalf of beneficiaries. A charitable group of accountants might be organized to prepare the audited statements without a fee.

  48. “I’d take that bet in a heart beat. Most bleat on about how much taxes they’re paying.”

    James, I guess my point is that it would be great to stop generalizing about well-off people as if they’re all braggarts trying to avoid taxes. There are some very generous people and very selfish people out there – but it’s not determined by where they live or how much money they have.

    Introvert, funny enough, one of the first things that a transplanted Vancouverite (who just moved to Victoria) said to me last night, “the traffic has gotten so bad there!”

  49. People from Metro Van visit Victoria for a break from all that. When I was moving to Victoria, everyone I spoke to (including strangers) said “lucky.”

    I know of two fifty-something couples from the Lower Mainland who are planning on retiring in Victoria. Both regard Victoria as a slower, quieter, simpler — yet equally gorgeous — location in which to live.

    “Victoria the Greatest Place on Earth…. to leave”

    So take a hike!

    When I think of the difference between Calgary, where I lived for some time during and after grad school, never do I pine for a shallow retail reflection on my quality of life.

    The only redeeming thing about Calgary is its proximity to beautiful mountains.

    The risk you run is that rates rise and the stock market drops and you can’t sell to cover the amount borrowed.

    The riskiest thing I’m comfortable with is buying a house in Gordon Head (in 2009).

    … rents are escalading …

    Just picture those rents, pimpin’ in a blacked out Escalade!

  50. So the Fed rate increase coincides with 2 cents off the Canadian dollar, two bucks off the price of oil and 100 plus points off the Dow. Under those circumstances, I’d hesitate to pay a premium of 30 to 70% over assessment for a house in Oak Bay. Moreover, were it not for a combination of family ties and inertia, I’d be inclined to plunk my old OB heap on the market at a fat premium, while looking for an ocean-view spread in, say, Costa Rica.

  51. ” I bet you anything that most well-off people recognize their good fortune, and contribute to society or charities to help other people in need.” I’d take that bet in a heart beat. Most bleat on about how much taxes they’re paying.

  52. “I certainly agree with you that the views on this blog have been very polarizing”

    Agree, Barrister, it’s unfortunate that sometimes there’s too much focus on black or white instead of shades of gray.

    There are a lot of smart cookies on this blog so I get huge value in reading the data and anecdotes from all sides, because that’s what worked for me – tracking BOTH data & word on the street. (eg., company stock was always “up on rumour & down on fact”)

    It’s understandable why Oak Bay was a popular topic – because it shot up quicker than anyone expected, so there was useful discussion as to why – and what the alternative hoods were.

    There’s name calling on all sides, eg., saying that anyone that lives in OB or Rockland wants to brag about it or wants it as a status symbol. Gimme a break. Sounds like sour grapes. I bet you anything that most well-off people recognize their good fortune, and contribute to society or charities to help other people in need.

    So it would be good if we could all agree to disagree. eg., I understand where JJ is coming from – even though we don’t always agree – because his job is trying to protect people from over-leveraging, so he’s very conservative when it comes to RE. If one of Hawk’s comments came out harsher than intended, I think he got exasperated because of other posters that, as he said, pounce on a small thing & take a condescending tone – not you Barrister 🙂

  53. Since you’re the “expert” on here maybe you could disclose your credentials ?

    I don’t believe credentials are needed to post and I’ve never claimed to be an expert. I generally post based on a review of data, and I’m definitely more interested in figuring things out than promoting a viewpoint.

    It is probably better not to have credentials posted. If your information and analysis cannot withstand third party review it doesn’t matter what your education and background is. The emperor really has to wear clothes this way.

    Don’t read them then, no problem.

    Good advice.

  54. This does not mean that the market will always be hot. Indeed, it used to be “ludicrously hot” so there is a change. This change does not mean prices are declining, but it may mean that they are no longer rising like a meteor.

    The change in assessment is more a function of the way the algorithm assigns “hot” vs “ludicrously hot” and not a reflection on the market actually cooling off. The algorithm says anything under 2 months of inventory is ludicrously hot, so at the current 2.2 it is above that. However there is natural seasonal variability where in the winter the months of inventory tends to be higher. So 2.2 is a record low for November, even though it is above 2.

    What I should do is assign the market evaluation based on comparison to same-month historical ranges, not an absolute number.

  55. @Hawk. No need to stoop. I guess I see it more from you simply because I agree with your position, but you’re the only one who espouses that position who posts frequently. So I see the “pumper” name calling too much. It’s certainly much better than the dude who’d come by just to correct evrey one’s (that’ s for you ;)) spelling.

  56. James,
    Don’t read them then, no problem. What you call personal attacks are normal responses to the blatant pumpers posting imaginary charts/info in the face of conflicting information. There are a couple whose who choose to repeatedly talk down to people with their “higher than thou” attitude because they’re over leveraged/overtalk their wealth, and any bear statement with some fact behind it is shot down continuously with spin talk and taunting. Shit happens.

  57. James

    I gave up a long time trying predict interest rates/ housing prices/ stock prices. I just go with the trend until a moving average breaks or some other trend determination happens. :).

    Trump is a huge wildcard. If he cuts taxes and increases spending like he says. We could have an inflation issue quickly. 100 oil, 3% increase in interest rates within 2 years.

    It is no time to load on debt that you cannot afford to pay much higher rates on. These low rates should have been a time when people cleared up debt. Unfortunately the opposite happened. Jobs and debt repayment ability are the factors to watch.

  58. @gwac. this year they had 4 anticipated rate increases, only ended up doing 1. The reason was Brexit though. They were anticipating two next year until today’s meeting. You never know though, depends on world affairs, could have a Frexit, which would delay them, or Trump could start a trade war with China, and they’re probably increase the number.

  59. james
    1 to 5 year mortgage rates are base on Canadian bond rates. No central bank direct influence.

    Variable is a based on prime which is based on Bank of Canada overnight rate. Set by the Bank of Canada. So what the Fed does has no direct impact on Canada. Bond rates may go up if the 3 suggested rates was not anticipated. Got to remember Canada`s economy is not as strong as the US. BTW anticipated increase have not materialized in the past. with the US.

    Oops

    As I stated below Canadian 5 year Bond rates are up 60 BP since Trump was elected in anticipation of his spending and the impact on Canadian inflation and growth. No idea if it continues. No idea when Canadian short term rates may go up. My guess is a year. My point was Canadians need to get their balance sheet in order and be ready to pay higher interest rates in the future.

  60. Gwac:

    Hawk

    We do not live in the US. Our economy is way behind that of the US.
    We will have to see what happens to Canadian bond rates.

    Unfortunately, we don’t have to wait too long, Gwac. The 5yr bond rate has gone up significantly from it’s 52 wk. low of .40. The bond market is going to do what the B.O.C. doesn’t want to do …. raise mortgage rates. The rates have gone from .70 a few months ago to a high (so far) of 1.17 today.

    In the world of bonds that is a big move. We will be watching the banks now.

    http://www.marketwatch.com/investing/bond/tmbmkca-05y?countryCode=bx

    Canada 5 Year Government Bond
    TPI: BX:TMBMKCA-05Y
    Enter Symbols or Keywords
    GO

    Market Index
    OVERVIEW HISTORICAL QUOTES
    1.16
    Change
    +0.04 +3.11%
    Volume
    0
    Dec 14, 2016 3:34 p.m.
    Quotes are delayed by 20 min
    Previous close
    1.12
    Day low Day high
    1.07 1.17
    Open
    Open: 1.12
    52 week low 52 week high
    0.40 1.17

  61. Marko:

    I really appreciate more information as to what is going on in the West Shore. Oak Bay is mostly interesting because there are more stats available for it as an individual city. My impression is that
    prices in Oak Bay, to some degree, mirror the increases we are seeing in Fairfield, James Bay and Rockland. Stats for those areas are harder to get since they are rolled into Victoria as a whole.

    By the way the Dalmatian coast must be one of the most beautiful places I have ever been (let me point out that this is a very personal opinion so i will save some people the bother of saying that not everyone wants to go there and that there are people who dont like it). it is absolutely gorgeous and also filled with wonderful history and very warm friendly people. If i had any chance of getting immigration papers that would have been right at the top of places to live.

  62. Also Canadian bond rates are heavily influenced by international bond rates. Why would people buy Canadian bonds over US bonds if the US bonds paid more. They wouldn’t. So bond rates go up even if the central bank doesn’t raise rates (since less people are buying them and more are selling them). When the US interest rates increase and the Canadian ones don’t, the Canadian dollar goes down, which further incentivizes people to sell Canadian bonds.

    So the fed increasing the rate will increase the bank rates here, regardless of whether the Canadian rate is adjusted.

  63. @gwac, the lending rate isn’t based solely on the bank of canada prime rate. Also the main news in the states this morning isn’t just the interest rate hike, but the fact that they’re planning 3 more next year.

    @hawk, I think the housing market is about to correct personally (too many conflating factors, and when the government is introducing policy to deflate a market, i don’t know why anyone would want to enter that market.) but I don’t like reading your posts. When you stop personally attacking the people on this board, people will have more time for you. Attacking ideas & data is actually great, telling people that they’re just another pumper or whatever else is just a waste of time (yours included).

  64. Chris:

    I certainly agree with you that the views on this blog have been very polarizing. Since I am neither a bear or a bull on real estate I have had the privilege of being attacked by both sides. It is when the attacks become either personnel or when they intentional distort what I have said that I find it annoying. The extreme comments do less than nothing to help anyone understand the Victoria Market.

    Just for absolute clarity, I find your comments are reasoned, insightful and I agree withe majority of them. Nor have I ever seen you do personal attacks. This might be a bit of a long winded post since I am going to try to put some of my views out in detail.

    First, I tend to agree with you that there are some serious storm clouds in the Canadian real estate market. Foremost is the unrealistically low interest rates. When i was a young man and interest rates moved up 2 points it was unpleasant but not disastrous. A two point increase these days would have major effects on the markets in my view. Would it be cataclysmic; probably not but certainly very painful. A quick escalation (by quick I mean over two years) to historic averages of 6% might well produce a cataclysmic impact on Canadian real estate markets. I also whole agree that our market is much more vulnerable than the US ever was simply because the vast majority of Americans have 30 year fixed terms on their mortgages. (By the way, I have yet to have anyone explain why Canada does not have thirty year fixed terms when our neighbours to the south do; if anyone actual knows I would like an explanation). Would Victoria be impacted by an interest rate crisis; of coarse it would. the real question is how vulnerable are we compared to other Canadian cities? Do i have a simple answer to that; absolutely not.

    I will turn briefly, I hope, to a couple of recent posts. They are the ones that are screaming that not everyone in Victoria is rich. Of coarse not everyone in Victoria is rich. That would be a ridiculous statement. But, I dont know why you are arguing about it since absolutely no has even suggested that everyone in Victoria is rich. I am offended by this type of comment because setting up a fake straw man in order to knock him down is the lowest form of argument. it is both deceptive and dishonest.

    The original issue is how does one account for the dramatic increase in house prices over the last three years. I would hope that at least everyone agrees that there has been a dramatic rise in prices especially for SFH. The second related question is whether this rise is likely to continue. Understanding some of the factors that have lead this rise in prices is important but there very well might be new influences that will counteract future prices (less foreign money, higher interest rates,
    etc). My point is it is not a simplistic dynamic at work here.

    One of the big difficulties is that we dont have accurate or even necessarily meaningful statistics in many cases. What the statistics actually mean and what they are counting in the first place is very important. We have some raw numbers given for the number of people moving to Victorian from elsewhere every year. Those numbers indicate only a very slight increase in numbers. But it is important to know what this statistics is measuring (and I actually dont have any idea as to the details at this point). Does this statistic include students that move to Victoria; if so the increase numbers of people moving to Victoria might largely be accounted for by the expansion of the university and colleges. I am not saying that it is but rather that i dont know.

    In terms of the real estate market, we actually have no idea how many retiree’s are moving to Victoria. Twenty years ago most retirees were 65 and over. I think it is safe to say that is no longer the case. There are a number of unanswered questions about retirees moving to Victoria that directly bear on the real estate market. Foremost in my mind, is how much money do these people have and has that increased significantly over the past few years. Secondly, has there been a significant increase in retirees under 65. (That is important because if they are buying a house at age 50 or 55 that house might not be on the market for another thirty years; it relates to volume of future inventory).
    It is here that a blog such as this can be useful, since there are not detailed statistics. it allows input in what one sees and knows of one own neighbourhoods.

    Speaking of the value of this blog, one of the best posts (at least for me) was a younger person that stated that I am likely not in touch with the younger generation. They commented that there were a fair number of young families with children moving into Oak Bay. I found this information extremely useful as well as the very true reminder of how limiting my own experiences might be. The next day i went to Oak bay and paid particular attention to whether there were a number of younger families about. My initial impression was that the blogger that corrected me was making a very valid point. I also asked the librarian whether she had noticed any increase in young er families in the last few years and she said that she definitely did and the circulation numbers for children books seemed to back that up as well. How significant that is for the real estate market remains to be seen. My point is that I learnt something from this blog of real value(principally that I need to observe better )

    I have similiar problems with the medium family income number. Do they include full time students in these statistics. Do they also include retired couples? The implications for the real estate market is dramatically different depending on what those numbers actually reflect. My suspicion is that incomes in Victoria are very stratified. (I dont have statistical evidence for this). The public sector pays a lot more than the tourist industry here in Victoria. A 35 year old policeman married to a 30 year old high school teacher have more than double the medium income for the city. (This does not make them rich but it does allow them to buy a house in the core).

    Chris, I again would like to support your comment that the polarization on this blog is rather unfortunate. But perhaps a greater degree of civility might really be in order.

  65. When house prices are rising, people thinking of a discretionary move, either up or down, will surely be inclined to buy first (before prices rise further) and sell later (when prices may have risen further), which means inventory will tend to fall, causing prices to trend further upward. But when a top is evident, the rational approach to moving up or down market would be to sell first (before prices fall further) and buy later (when prices may have fallen further), which means inventory will tend to rise, causing prices to trend further downward.

    Is this an important factor in housing price dynamics and, if so, will the announced FED rate raising trend, set off a comparable trend in Canada and if it does, does that mean we are we now at the tippy top for RE in Canada.

  66. gwac, the 5 year rate here tracks the US FYI. I believe the US long term rate jumped half a point in the last week.

  67. You need to get over the fact totoro that people are entitled to their opinions when they see changes in the market that weren’t there a month or two ago. You can spin it all you want but it is what it is. The market is hot due to a low inventory which is a temporary condition which is showing cracks which I am pointing out.

    Since you’re the “expert” on here maybe you could disclose your credentials ? I’m just a regular joe who sees what is happening and makes note of it to the other house hunters on here.

    Like Barrister your thin skin becomes more evident while you have no problem dishing it out that you always know more. There is a name for it. Is retirement that boring ? Seems like it.

  68. The market was hot, now it’s not.

    This blog measures the market using stats. If you look at the upper right-hand corner the market is currently “hot”.

    This does not mean that the market will always be hot. Indeed, it used to be “ludicrously hot” so there is a change. This change does not mean prices are declining, but it may mean that they are no longer rising like a meteor.

    I have no plans to sell Hawk. I would prefer the market to drop myself as we would buy a nicer house.

    The personal attacks on anyone who has facts to present that don’t align with your imminent doom theories that have gone on for years now and accusing anyone who points out information that contradicts your wishes or interpretation of stats is not very credible.

    If you want to take part in predictions then there is an annual post for this, which I don’t think anyone has ever gotten right.

    However, if you are just using equity in your house and gambling on appreciation..

    Yes, you’ve figured it out JJ. The appreciation gamble is not something for the faint of heart. Lots of risk in doing this in a market that has already risen at above inflation rates. Less risk if it is your primary residence and you will have the exemption, you would pay rent anyway, maybe you have rental income if you need it, and your income will likely rise.

  69. Hawk

    We do not live in the US. Our economy is way behind that of the US.
    We will have to see what happens to Canadian bond rates. Short term rate increase in Canada is 12 months away at least.

    All that said it is time for Canadians to clean up their balance sheet and pay down debt.

  70. Rate hike of quarter point, 3 more to come next year. Batten down the hatches, credit noose will be tightening.

    “Our debt is a pyramid scheme held up by low interest rates”

    Not by the looks of the news gwac but it is a pyramid scheme about to unravel. Many people will get crushed with a one point rise on their rate and likewise on a 5.6% stress test to qualify.

  71. Hawk

    Our debt is a pyramid scheme held up by low interest rates and good employment. The problem is no one ever knows when the pyramid will fall. Could last a month or years and years. So far years. It is vey concerning to say the least.

  72. “You really need to do more analysis on these “slashes” if you want to understand what is rather than what you wish to be. ”

    It is what it is totoro, they were priced to sell otherwise any agent worth his salt wouldn’t waste his time and it looks like a lot of agents have been with the amount of price slashes the last month.

    Funny how the multiple property owners try to diss the facts and can’t take it that they are losing paper profits so they make up excuses. The market was hot, now it’s not. That’s what you need to understand, totoro. Deals are collapsing and major price slashes have been happening.

    Can’t be that debt thing can it ?

    Canada’s Gravity-Defying Household Debt Swells to C$2 Trillion

    https://www.bloomberg.com/news/articles/2016-12-14/canada-household-debt-ratio-hits-record-with-c-2-trillion-tab

  73. If I understand you Marko. I would agree that too much attention on this blog is wasted on Oak Bay. Oak Bay is not symbolic of the market place. It is an anomaly.

  74. Adanac was, and maybe is, priced too high Hawk. Look at recent sales in the area. It is assessed at 370k and is a 1 bed 1 bath.

    Service has a direct sales comparison available. Same type of house sold in June 2016 for $691,000 at 3240 Service, but the garage had been converted for a suite with separate entrance and fully finished basement.

    In addition, the sale on Service collapsed. This can mean the financing did not come through, or it could mean that there is a deficiency with the property like perimeter drains or foundation.

    You really need to do more analysis on these “slashes” if you want to understand what is rather than what you wish to be. Looking at recent comparable sales is probably the best way, including the relative condition of the properties you are comparing.

    I’d say that Service is a better gauge of what that sub-area is at. It will be interesting to see what this property sells for.

  75. I ccould pay it off tomorrow by selling my investment portfolio, but I’d be stupid to do so

    Often the thought of simplifying my life and selling my investment properties, paying off my personal house and jetting off to my native Dalmatia to do nothing but sit on the pier drinking beer watching yachts pull in and out has crossed my mind, but yea it would be stupid. Maybe if interest rates go up and the market doesn’t completely tank I would consider doing such. Right now, when my mortgages are hovering around 2% and rents are escalading doesn’t make sense.

    Demand – Everyone wants to move to Victoria and we don’t have enough homes to accommodate

    There will be more than enough homes to accommodate, just not in Oak Bay. Westhills has hit its stride and when Royal Bay is in full swing there will be all the inventory you want. I had a young couple that purchased a brand new three level home on an 8,000 sq/ft lot in Royal Bay for $599,900 (GST included, no PTT) a couple of month ago, basement is unfinished for that price, but nice detached garage and large lot (they have a few bigger ones available).

    You move the same house over to Oak Bay (add $100,000 in finishing upgrades) and it’s over $1.5 million+ on a 8,000 sq/ft lot.

    Problem with this blog is we aren’t discussing floorplans at Westhills and Royal Bay. We are discussing Oak Bay where apparently, everyone and their mom wants to be. Unfortunately, the orthopedic surgeon and her nurse husband trump the family with two upper middle class jobs making 75k/each. The $150k/year income family is being squeezed out of Oak Bay, not the housing market. I do think prices in the Westhore will moderate once supply catches up. My feeling is developers were caught off guard by the last 12 months and only building at a pace we saw for the last 5 years. They will adjust and market will slow down a bit and then there will be a bit of oversupply while they slow down.

  76. Hawk there was an offer that collapsed. Wonder what the price was since the
    BC assessment is 491k in 2015 and 464k in 2014. Interesting to see what it does go for.

    According to JJ`s post 650k or 32% above assessment is the median.

  77. Let’s take a look at the stats for the first week in December for houses in the core.

    34 house sales ranging from a low of $420,000 for a small home on a 5,550 square foot lot along Shelbourne near McRae to a high of $2.28 million (original ask was 2.6 million) for a McMansion in Ten Mile Point on a two-third’s of acre of waterfront.

    One year ago there were 26 house sales in the first week. Ranging from a low of $420,000 for a starter home on 5,000 square foot lot near Tolmie and Alder street in Mayfair to a high of $2.4 million for a 4,000 square foot home on a half acre of waterfront near Portage Park in View Royal.

    New listings for the first week this year stood at 36. A year ago it was 24.

    New listing were being added at the rate of 34:36 or 1:1 compared to a year ago at 24:26 or 1:1
    Median Sales to Assessment Ratio in the first week was 132% up from 124% the year before.

    A very small sample size of just the first week of December and therefore subject to large swings.

    As for listings, for those that want to get into the Oak Bay market there is an updated starter home on a 5,500 square foot lot in Oak Bay just a block from the Golf Course and the Ocean that has been listed now for 21 days at $749,000.

    Another choice is a small home on a 5,000 square foot lot along Westall near Gosworth and the Hillside shopping Mall now listed for 22 days at $575,000.

    For those that want to trim the budget a little bit more there is a renovated starter home on a 5,000 square foot lot near Cadillac and Seaton that has been listed now for 28 days now at $499,888.

    As rental properties by themselves it really doesn’t make sense to purchase any of these properties because of the size of the down payment that is necessary to give you a neutral income stream. If you have saved enough for a large down payment there are better places to invest a couple hundred grand and earn income.

    However, if you are just using equity in your house and gambling on appreciation then you may find these properties worth taking a look at when you BC Assessment arrives this January and find that you’re richer than you think. Dust that HELOC off and get rich!

  78. 3224 Service Street slashed $20.9K to $698K and it’s just a mere handful of houses away from St Mike’s and easy walk to Camosun,Landsdowne school, the mall etc. I thought these hoods were all going over ask. Guess the tide is changing.

  79. The collapse of 249 King George Terrace is an interesting one. Was it part of the Nov stats? If so it would count as a collapse in Dec and drop the average. Could be a huge swing in averages from Nov to Dec.

    I too wonder how they will account for it…..as I said at the start of the month December will be the biggest average drop in the history of the VREB.

    I was also thinking that 4 years of month over month of previous year increases would come to an end in December but it is going to be real close……I don’t think we will see a streak like this again in our lifetime, it is unprecedented statistically speaking.

  80. “The collapse of 249 King George Terrace is an interesting one. Was it part of the Nov stats?”

    Was wondering that too LeoS.

    Looks like Bob the builder wants the hell out of the 1753 Adanac shack ASAP. Just slashed it $50K. to $599K. Lot prices taking a hit in the core.

  81. That’s why you need the large stock portfolio

    Maybe – or just use index funds and learn to invest yourself through TD e-series or Questrade or just invest through Tangerine. I don’t know enough about stock picking to feel comfortable doing that myself and the stats show the vast majority of people don’t either.

  82. @ Totoro

    “The risk you run is that rates rise and the stock market drops and you can’t sell to cover the amount borrowed.”

    That’s why you need the large stock portfolio 🙂

  83. The collapse of 249 King George Terrace is an interesting one. Was it part of the Nov stats? If so it would count as a collapse in Dec and drop the average. Could be a huge swing in averages from Nov to Dec.

  84. Yes, the interest on a HELOC on funds used to invest is tax deductible. There is no minimum stock portfolio required.

    The risk you run is that rates rise and the stock market drops and you can’t sell to cover the amount borrowed.

  85. We have quite a large HELOC on our primary residence. You can make the interest payments tax deductible if you have a large enough stock portfolio. So not only is the interest rate very low, but you also get to deduct the payments from your taxable income. As JD said, it makes perfect sense in this environment.

  86. It’s just sound financial logic to leverage yourself when it makes sense.

    Yes it does. We have an unused HELOC. I admit it would be better to use it to invest than have it sit.

    I also agree there is an issue with HELOCs being used for consumer items, but consolidating consumer debt through a HELOC makes good sense.

    If interest rates rise those borrowing to the maximum of affordability on a mortgage will be impacted. Those borrowing through a HELOC may have an affordability issue, but the equity will create an asset buffer that may result in a lower net worth but not catastrophe.

  87. In the low interest rate environment the HELOC makes sense even if you have money. I have one, and it’s sizeable, but it’s very serviceable given the low interest rate. I’ve seen a significant increase in my house’s value and can take advantage of it – and why wouldn’t I? I ccould pay it off tomorrow by selling my investment portfolio, but I’d be stupid to do so given that I can make more in equities than I can save by paying the HELOC off. It’s just sound financial logic to leverage yourself when it makes sense. There are many stocks that pay more in dividends alone than I pay in interest.

    I suspect many people are in that position.

  88. You can only borrow up to 65% of the home’s value so those without substantial equity won’t have access to a HELOC at all. For a house in Victoria this means you will need to have almost 300k equity in your 850k home before being able to borrow anything.

    I’d agree that there are a lot that will qualify for a HELOC. There are also stats that show that older Canadians are accessing a HELOC in increasing numbers and this amount makes up 22% of the debt carried by those over 65 in Canada. The median amount is about 18k.

    12% of households in Canada held 40% of total debt in 2014 and the proportion of highly leveraged Canadians remains concentrated in a small cohort. My guess is that this would be newer buyers in high cost areas and those who have refinanced for business reasons or poor financial management or other reasons such as illness or divorce.

  89. Newer buyers here will have greater debt here on average than those in lower cost markets, but not sure how it compares to the average. Buyers who have owned for 10 years or more will likely have less than $217,000 even in Victoria simply because prices were significantly lower 10 years ago.

    What about the huge increase in HELOCs in Canada? When Victoria prices jumped earlier in 2016 I spoke with more than a few parents at my child’s school about renovations that could now be done with the new equity. I doubt all the renos in Victoria are being done with income/cash and a lot are probably done with debt. I have no figures to confirm but it would be an interesting number to see.

  90. Not sure if you can just apply the BC figure to Victoria and get a reliable outcome when our prices are so much higher in relation to incomes.

    Hard to tell really as the BC figure also includes all of Vancouver.

    Newer buyers here will have greater debt here on average than those in lower cost markets, but not sure how it compares to the average. Buyers who have owned for 10 years or more will likely have less than $217,000 even in Victoria simply because prices were significantly lower 10 years ago.

  91. totoro – thanks for the reasoned response, (though I already do understand how medium income is derived…). The medium income in Victoria comes in at number 8 in the country despite our high real estate prices (yes Vancouver and Toronto are low too but they have much bigger populations).

    The mortgage figures are very interesting and sound like they could support the resiliency of our market, though I would like to have more specific details – the 70% home ownership rate is for Canada as a whole I believe. And “40% of BC homeowners without a mortgage” and “BC residents have an average of $217,000 in mortgage debt” includes a lot of areas outside of Victoria! I imagine people in low value areas would likely have higher rates of mortgage free properties. Not sure if you can just apply the BC figure to Victoria and get a reliable outcome when our prices are so much higher in relation to incomes.

  92. Appreciate the comment David. I try to base my posts on facts or indicators of changing markets that many bulls like to call “weak links” when it’s the new reality.

    As far as the inventory goes, anyone with a brain knows it will change at some point and the longer it goes, the larger the increase as the fence sitter hoarders/flippers, and those hoping for more easy money start to see it slip through their fingers in $10K to $100K increments like we are seeing in Vancouver.

    Trying to say inventory increase won’t happen here because everyone is so rich and doesn’t need the cash is just asinine and very narrow minded to how markets function. It’s a boom at it’s peak, with Peak Cranes never seen before in this city. It’s always the tell tale sign.

    Canada’s cooling housing market will soon start dragging the economy down, watchdog warns

    http://business.financialpost.com/news/economy/canadas-cooling-housing-market-will-soon-drag-the-economy-down-watchdog-warns

  93. The median family income is about 80k in Victoria. This is not all due to “rich company owners and retirees” whose buying power is not reflected in their income: it is a median that reflects the median salaries of employed folks. It correlates well with wages here earned from an employer.

    Median income is the amount that divides the income distribution into two equal groups, half having income above that amount, and half having income below that amount.

    As for mortgage debt, BC residents have an average of $217,000 in mortgage debt. About 40% of BC residents own a home without a mortgage so the average will be skewed a bit lower by that. Oak Bay’s rate of mortgage-free owners might be slightly higher if the age of homeowners is slightly higher – I don’t know but my guess is the difference would be small.

    Will older people downsize? Seems unlikely for the majority. 80% of boomers want to stay in the homes they currently occupy according to a survey of homeowners carried out this October by Manulife.

    If the home ownership rate is 70% and 40% have no mortgage that sure creates a lot of equity in BC.

  94. I see the polarization of views is alive and well on this blog! Not sure when it started happening but I see the same thing in Canadian politics – anything and everything proposed by one party is shot down and discredited by the other. Doesn’t matter which side you’re on, the strategy and myopic views are the same. It’s a shame more people seem less and less inclined to step back from their point of view to utilize some rational and critical thinking.

    As I’ve tried to point out there are so many negative influences building in the real estate market which are hard to dispute though it seems the weakest of arguments are put forth:

    Low average/medium incomes – all due to rich company owners who only draw small salaries and rich retires with small incomes but huge assets. Average incomes have been flat for 10+ years, debt levels have exploded to record levels and we’ve had year after year of weak employment with most new jobs being part time or related to real estate. Despite the numbers apparently in Victoria everyone’s rich and has lots of available assets so all is good.

    Demand – Everyone wants to move to Victoria and we don’t have enough homes to accommodate, even though migration levels are just above norms, housing starts are near 10 year highs, and of course it has absolutely nothing to do with year after year of quick easy tax free profits that have been way beyond the majority of income levels. Did the honor system arrangement with the principal residence exemption have anything to do with speculation/demand?

    I admit I’ve had a negative view of Canadian real estate for a while and have been wrong but the mounting evidence of negative factors is hard to argue against. From my perspective the only driving factor is income/assets produced outside of Canada and being funnelled into residential real estate. As mentioned this makes Canadian home owners “rich” and stokes the economy but I question how long we can keep it up against growing backlash. Trudeau is targeting immigration levels of 400k and the Quebec Immigrant Investor Program is still in place so maybe it will continue. If this is the case I would suggest Canadians get on board and buy real estate and/or start earning income from global sources which are much more lucrative than Canadian incomes. Seems like a short sighted, unequal and unsustainable way to build a country’s prosperity though…

  95. ASH:

    To add one more thing, I agree that higher prices motivate a lot of people to put their houses on the market. But I wonder if the last three years of major price increases has already pulled out a large percentage of people of might be motivated to more. The example that comes to mind is one of the neighbours who sold all five of their rental houses recently. I regularly do garage sales on weekends, if nothing else it gets an old man out of the house and reminds me which day is Saturday). It struck me that there seemed to be a lot tenants holding garage sales because the house had been sold. Once again totally unscientific and perhaps completely wrong.

    My point is that the market may have already sucked out a disproportionate number of people that might have been motivated to move by price increases. Further price increases might have a much smaller effect on increased inventory. Of coarse there are the usual death, divorce and nursing home
    allotment of new inventory. I cannot speak for Victoria but I know that in Toronto there were whole neighbourhoods that were extremely stable with houses rarely coming on the market. In many cases houses were passed from one generation to the next without ever coming on the market. I have no idea if this happens a lot in Victoria; perhaps someone else does.

    Bman: You seem good at digging up statistics. Have the number of new listings for the past five years remained stable or was there a large increase during this hot market?

  96. Ash:

    Thank you for having the courtesy of actually reflecting on what I wrote. But let me say that i might be wrong since there is no real statistical basis to actual pin point the situation. Obviously it is far from all buyers in this market but many buyers are paying all cash with a more long term view of settling in.
    For many of these buyers increased house prices are not a big incentive to sell since they really dont want to move again and dont have any real need for extra cash.

    What might provide some insight is if anyone has the statistics for what percentage of buyers are purchasing without a mortgage. A breakdown by area would also give a clearer picture.

    You made an interesting point that I have not even thought of; that younger recent buyers in areas like Fernwood are carrying such a large mortgage that their ability to move up will not occur for many years. it is a excellant and very insightful thought.

  97. At first glance I thought Rabidoux’s violin pic might have been in reference to the Globe story citing the Vancouver RE industry’s private complaints to gov’t about the foreign buyers tax.

  98. Barrister, you might be on to something re: that lots of recent purchases could be for the long term. When I first read your post I thought “BS”. But with core detached prices being so high now, the first time ‘starter home’ buyers may be being filtered out. And those first timers that are buying are coming in with a ton of debt, so likely not positioned to flip the place in two years and move up to something bigger/ better. Even on a Fernwood/Oaklands starter at ~700k, will as many be looking to ‘move up’ in a few years?

    The flip side of course is when owners start to see what they can get they may be tempted to list. Lots of variables to consider.

  99. David:

    Arrogant and selfish; interesting viewpoint. Name calling is often a substitute for rational argument.
    I have no idea what your comment about the numbers “telling a different story” actuals means of even what you are referencing. Maybe you can clarify your point. I assume that the last point is some sort of generalization and not specific to me.

    You are welcome to find whatever value in Hawks posts that you want. Accord me the same right to ignore them. I am always open to listening to reasoned opinions, and value them whether they concur with mine or not, but comments like yours sadden me to no end. It seems to be increasing what increasing substitutes for intelligent discourse these days.

  100. Thanks for the Over 65 incoming, Bman. I think I’m going to call you Statsman 🙂
    Agreed, it may take another Toronto ’89 meltdown to surpass the ON to BC ~25,000 number from the 90s.

  101. Barrister,
    Who are you to say Hawk’s posts have no value! Yes they do, actually, the fact that it bothers a lot of people in this blog means a lot. You all want to pretend like you have tons of money, nothing to worry about etc. when the numbers say a different story. You are so arrogant and selfish that I assure you that you bring nothing interesting in this blog, I am your neighbor by the way.

  102. Barrister,

    Not sure why you’re offended, sorry if I did. You stated you believe the inventory numbers won’t rise anytime soon because you talked to a number of those families in the hood and your perception is most people in the core have houses paid off in cash. I think that’s just a crap shoot guess as you have no hard numbers to back it up. From my buddy talking to a credit counselor it’s evident that it’s the opposite. That’s just his opinion but he’s in the debt business. Sorry again, but I thought lawyers had thicker skin.

    On a side note I just learned of another young couple with a couple of kids divorcing and having to sell the house they’ve been in for just over a year. The pressures of life with the big mortgage etc got to be too much.

  103. Hawk:

    I never ask people how much money they have nor do I stop people on the street. But you know this already. Sadly, this just underlines your ability to totally fabricate things. Your credibility has just reached a new low for me. Your posts have no value and your thoughts even less.

  104. I had to google Holt Renfrew….lol, never been to one. Who has time to go to stores? Just ordered my glasses on clearlycontacts and my awesome pair of shoes arrived from Aldo.

  105. @Hawk
    Agreed. The numbers are way down from where they were in the 70s and 90s. The one area where Mike might be onto something is the number of over 65 migrants. Perhaps not too surprising given the aging population, but the last 3 years shows a significant spike in the number of inter-provincial migrants in this category moving to BC. Hardly a wave, but something to think about:

    2015/2016 Over 65 5524
    2014/2015 Over 65 5375
    2013/2014 Over 65 4659
    2012/2013 Over 65 3519
    2011/2012 Over 65 3545
    2010/2011 Over 65 3267
    2009/2010 Over 65 3407
    2008/2009 Over 65 3123
    2007/2008 Over 65 3434
    2006/2007 Over 65 3549

  106. “1992 25762 5094”

    Interesting numbers Bman. Looks a long ways off 1992 peak when the housing boom was peaking then too but similar trend. History soon repeats itself.

  107. Barrister, so you stop families on the street everyday and ask them where their from and how much money they have ? Judging people’s financial situation is the biggest false assumption you could make. As a lawyer you should know better than judge folks by the looks of their appearance.

  108. Michael,
    Gonna need a pretty big boost from these two guys for that to come true. Here are the number of people who migrated from Quebec and Ontario to BC since ’72.

    Year Ontario Quebec
    2015 19133 3687
    2014 18005 3710
    2013 14311 2964
    2012 14294 2785
    2011 14316 2601
    2010 14721 2727
    2009 14678 2562
    2008 16154 3111
    2007 16131 3101
    2006 18579 3866
    2005 17234 3076
    2004 15977 2769
    2003 15058 2267
    2002 15354 2561
    2001 13944 2638
    2000 14131 2726
    1999 13790 2925
    1998 15830 3357
    1997 18289 4672
    1996 22121 5353
    1995 22663 4988
    1994 24424 5388
    1993 25630 5253
    1992 25762 5094
    1991 22807 4666
    1990 24679 4064
    1989 22308 3801
    1988 18830 3064
    1987 14264 2453
    1986 11385 2017
    1985 9949 2053
    1984 9502 2143
    1983 10702 2858
    1982 12581 3483
    1981 19703 3945
    1980 23347 4734
    1979 21641 5240
    1978 19620 5823
    1977 19396 6026
    1976 18250 5009
    1975 18201 4077
    1974 24169 5484
    1973 23499 4989
    1972 17281 5146
    1971 12195 3196

  109. How many left here Mike, and how many died ? Yes we’ll have to keep those easterners out of the city core, they don’t have much money and probably came by Greyhound bus with no jobs too right ? Don’t want another tent city sprouting up. 😉

  110. AG:

    You are right in that I have also noticed a number of younger families with kids. Talked with a number of them and many said that they saw this as their final home or at least for a few decades.

    What this suggests to me is that inventory rates are not about to spike any time soon. A sharp spike in interest rates might have an impact but the proportion of all cash purchases in the core is fairly high. I suspect in many areas, like Oak Bay, the majority of homeowners have little or no mortgage. .

  111. I thought it would be interesting to show how many people migrate here, from other parts of the country.

    2012-2013 5176
    2013-2014 6184
    2014-2015 6549

    I suspect Vic will surpass 10,000 new easterners per year soon. As prices elevate many will have to settle for the Western Communities or central/north Saanich.

  112. Isn’t it interesting that the two biggest bears on the forum (JJ and Hawk) are also the most negative about Victoria as a place to live?

    Is this because their ironclad belief that property prices must fall has driven them to focus exclusively on the negative aspects of the city?

    Or is it because they have a naturally pessimistic outlook that manifests itself in these two separate ways?

    I have lived in lots of different places and I find Victoria to be a beautiful, welcoming, charming city. It’s probably not the kind of place I wanted to live when I was 18, but for anyone with kids or older it has many advantages. I can honestly say there is nowhere I’d rather be.

    Lastly, there is much more to life than worrying about shopping at Holt Renfrew. It’s basically the same crap you buy in The Bay but 10 times more expensive. Probably even comes from the same factories. If you want to be the sucker who pays up for all those marketing expenses, it’s your loss.

  113. No prob Chris, always craziest before the crash. 2007 was the same way, everyone I knew said I knew shit then the bottom fell out. Trump is only going to amplify it this time, give him a few months, if he makes it that long.

  114. @plumwine
    My lady and I work in town and the kid is in school here. We’d rather live on an acreage somewhere else. For now, we are going to stick it out here. We certainly don’t hate Victoria, but we’d prefer to live elsewhere. I assume there are numerous people like us. No need to take pity.

  115. Everyone has a right to move. Don’t stay if you don’t like it. I have a hard time relating to this view as I’ve lived in many places, including other provinces and countries, and I deliberately chose Victoria.

    Maybe the problem is not with the external but the internal. You sound kind of depressed or something? Maybe get it checked out if you think that could be a factor, pretty common during the xmas season for lots of people.

  116. You guys do know you can buy stuff from Holts by phone…. ship to your door free. This is how regulars shop, 5 min phone call vs. fighting for parking spot with “New” drivers….

    @Bman, this is why I feel sorry for them. They are staying at a place 24/7 they don’t like, while they are free to move.

  117. Perspective is perfectly fine. I have plenty to compare it to and I love Victoria.

    If you hate it here Move. Waste of a precious life.

  118. @Plumwine

    True, but not everyone cares about those things. I assume there are many reasons a person might stay put here, even if they don’t think it’s the best place in the world – family, friends, work. You are allowed to live where you want in Canada. Nothing says you have to love where you live.

  119. “No one “needs” to shop in Holt Renfrew but they can and do. Not understanding the difference is why Victoria is a small town.”

    What a sad and pathetic commentary on what life’s expectations should amount to.

    I’ve lived in big cities and have shopped (and actually bought a few things) in Holt Renfrew. When I think of the difference between Calgary, where I lived for some time during and after grad school, never do I pine for a shallow retail reflection on my quality of life. I do not long for IKEA when there are plenty of much higher-end furniture stores in town here.

    When I think of the difference between Victoria and Calgary, I think of standing in the Cowichan River in February and hoping for a big winter steelhead. I think of my kids playing on Willows Beach in the summer, and how I did the same thing when I was a kid. I think of surfing in Tofino in March. I think of how lucky my children are to grow up in a community where we have friends and family within walking distance, and where we can afford a yard and a garden 5 minutes from downtown. I think of all the things that we’re extremely lucky to have rather than the shallow insignificant things we don’t.

    By all means, if having Holt Renfrew at your doorstep is important to you there’s some deals to be had on the tundra at the moment (or so I hear).

  120. I feel sorry for those dislike Victoria yet stay put. They must be miserable and feel trapped.

    You can play golf, sailing, ride a motorbike in December here, yet people found us boring.

  121. @Chris – No worries about the realtor comment – and I agree, people leaving would be a factor.

    @Leo S – Cansim tables 111-0030 and 051-0065.

  122. Victoria is a town with big city amenities.

    We are not flashy enough for HAM, there isn’t even direct flight to Asia.

    HR, Ikea… rich Victorian can afford weekly trip. It is the island lifestyle makes people love or hate this place.

  123. Hawk – sorry to single you out! I share a lot of your views but also think this craziness could go on much longer than economic cues indicate (Vancouver has defied all logic for years). I don’t see a lot of (if any?) acceptance this could happen from your comments.

    Bman – sorry to you too, I removed the realtor reference… But if you’re talking about desirability do the people who decide to leave Victoria not factor in? Lots of people move to Victoria, but as seen in the stats lots of people decide to leave too.

  124. If you have to ask what’s meant by high expectations- you never had them.

    When we say Bay Street Lawyers we’re not talking about Victoria’s Bay street.

  125. JJ

    I have lived over 10 years in each of the countries 2 large cities. I lack nothing here. This is a gem compared to those 2 places. Shocking.

  126. No Chris, not a realtor. Not even a civic booster. Not sure what you mean by net migration being the “right number.” Since a number of people here seem preoccupied with the desirability of Victoria relative to other parts of the country, I thought it would be interesting to show how many people migrate here, from other parts of the country.

  127. “Anyone who lives in Victoria has no need to shop in Holt Renfrew”

    No one “needs” to shop in Holt Renfrew but they can and do. Not understanding the difference is why Victoria is a small town.

  128. Chris, with all due respect there are plenty more “know it alls” on here than me. Let’s get serious, I see experts in 75% of the posts from the “pros” who have been everywhere, have tons of cash at their disposal and know every aspect of the world that mainly sounds like BS. I’m just a normal dude with an open mind to a declining market and the obvious signs that have been brewing for years. Seems the homeowners can’t hack the price slashes hitting the market these days. 😉

    Did you see the Bloomberg article about China capital controls being implemented that will effect how the rich send their kids to school in places like Victoria ? With the Trump anti-China mantra the reality could be closer than we think. That could be devastating to the local economy but no one wanted to talk about it, especially South. Might effect his net worth.

    China May Face Yuan Float if Capital Controls Fail

    “It’s a grinding down for growth. The upper middle class will get hit very badly. That’s the whole point of still controlling the state sector so that things won’t be so bad. By pouring all this money into the state sector, you obviously have to print a lot of money to sustain that, and that weakens your currency. But then at least the lower class and even the middle class people with median incomes can put food on the table. But the upper middle class and some part of the upper class, people who own two or three apartments in Shanghai, maybe they won’t be able to send there kids overseas any more because of capital controls and rapid depreciation of the renminbi.”

    https://www.bloomberg.com/news/articles/2016-11-21/shih-says-china-faces-yuan-float-if-capital-controls-fail-q-a

  129. if you have mediocre expectations in life

    Goodness, I’d be interested to hear about what high expectations in life are.

  130. For those of you who are curious, here is how many people migrated to Victoria from everybody’s favourite 3 prairie cities between 2000 and 2014

    Nice. Where is that from?

  131. And just for the hell of it, the number of people who migrated to Victoria intra-provincially, and inter-provincially. Be interesting to see this year’s numbers.

    Year In -Inter In-Intra
    2001-2002 5571 8740
    2002-2003 5685 8393
    2003-2004 6023 7933
    2004-2005 6216 8123
    2005-2006 5724 7785
    2006-2007 6232 8291
    2007-2008 6788 8628
    2008-2009 6349 8310
    2009-2010 6224 8208
    2010-2011 5889 8054
    2011-2012 6032 8952
    2012-2013 5176 7896
    2013-2014 6184 7958
    2014-2015 6549 7958

  132. “Best thing about Victoria is not having to keep up with Jones`.”

    Agreed. But I wonder if that will start to change with this year’s high influx of Vancouverites. Since the spring I’ve noticed many more fancy cars and people around town than ever before.

    A friend who was considering moving here from Vancouver actually commented on how low end Victorians seem. She seemed to think that that was a bad thing but I think it’s a positive! I can never believe how flashy Vancouver has become. I actually feel gross watching all the money on display over there. Showing off wealth seems to be Vancouver’s favorite pastime.

  133. Amazon isn’t the same as shopping in Holt Renfrew.

    You do realize that “shopping in Holt Renfrew” has to be a .001% factor in location right? And it is all available with free shipping online like an upscale Sears catalogue.

    http://www.holtrenfrew.com/store/holt/home?utm_campaign=Branded&utm_medium=cpc&utm_source=google&utm_content=Branded_EN_Home_General&utm_term=holt%20renfrew%20online&gclid=CJvejfL88dACFciCfgodN9EIsw

    I think proximity to shopping is a really silly reason to choose a location these days and even if this is a factor Victoria has more than enough of every kind of amenity except family doctors and, apparently, tradespeople.

  134. For those of you who are curious, here is how many people migrated to Victoria from everybody’s favourite 3 prairie cities between 2000 and 2014. Apologies for the dreadful format:

    Winnipeg
    2000 283
    2001 244
    2002 233
    2003 263
    2004 298
    2005 277
    2006 314
    2007 260
    2008 303
    2009 245
    2010 243
    2011 221
    2012 221
    2013 203
    2014 211

    Regina

    2000 90
    2001 101
    2002 84
    2003 119
    2004 96
    2005 104
    2006 99
    2007 81
    2008 112
    2009 86
    2010 99
    2011 127
    2012 127
    2013 105
    2014 130

    Saskatoon
    2000 96
    2001 101
    2002 126
    2003 120
    2004 105
    2005 118
    2006 92
    2007 124
    2008 125
    2009 115
    2010 113
    2011 159
    2012 159
    2013 111
    2014 151

  135. Yup one afternoon at Holt Renfrew is enough to fill your pretentiousness quota for the year. I know well-off people who buy at consignment stores all the time.

    Chris, agree with you here: “simply question how prices can keep rising at the same time negatives keep piling up (interest rates, more restrictive lending, tax crack downs, debt levels, realtor oversight, etc. etc)” Victoria was still one of the nicest place to live in the 80s but that didn’t prevent what happened with RE.

  136. Don’t get me wrong, if you have mediocre expectations in life, Victoria is a good as most places to live.

    However, if you’re young and ambitious you have to leave Victoria. Maybe our city’s motto should be…

    “Victoria the Greatest Place on Earth…. to leave”

  137. Value village is Victoria Holt Renfrew. Surprisingly a lot of people with money shop there. I guess that is why they have money. A whole season`s outfits for a 100 dollars. 🙂

  138. Anyone who lives in Victoria has no need to shop at Holt Renfrew. Best thing about Victoria is not having to keep up with Jones`. I have only seen a handful of people who are status conscious. Most of Toronto is. Those people coincidentally all live in Oakbay and need to continuously tell me they do. :).

  139. I guess (according to people on this blog) none of this applies to Victoria but still interesting…

    http://www.macleans.ca/economy/economicanalysis/75-charts-every-canadian-should-watch-in-2017/

    Because Victoria currently has low inventory and a good sales to list ratio it can be extrapolated out 10 years while taking nothing else into consideration? The near 10 year high in starts is apparently irrelevant too. I notice Vancouver also has very low inventory a sales to list regularly over 100% but prices are moving down? Did they not get the memo on this metric? (http://www.robchipman.net)

    I don’t claim to know the future, like Hawk, but simply question how prices can keep rising at the same time negatives keep piling up (interest rates, more restrictive lending, tax crack downs, debt levels, realtor oversight, etc. etc.). From my perspective the only thing that will keep things going is foreign investment (income/assets continuing to flood in). Here’s a good example of what I see as fueling Canadian real estate (including Victoria):

    “I have Chinese clients with permanent resident cards, and their kids go to school here, their money is from China, and that’s where they generate their income. They don’t want to live there because pollution is off the scales. But they can’t make the money here that they make in China. And they’re not paying the 15 per cent tax because they’re permanent residents.”

    Change “Chinese” to any nationality… With Trudeau’s goal of 400k this could keep it going but it’s shutting out any Canadians who are not already in the housing market. Considering the backlash in Vancouver with this strategy not sure how it can continue long term.

  140. Hawk:

    You might want to change from “Hawk” to “Eeyore”.

    By the way, I am retired and since my wife spends at least two hours a day in the home gym, I have a bit of time which at my age I think I have earned. The home gym is a bit counter productive since she watching cooking videos which seem to result in an awful lot of homemade apple pies, shepherd pies, Schnitzel and ultimately me not really wanting to go out to restaurants very much.But the exercise seems to keep her both trim and cheery.

  141. Funny anecdote: when my in-laws lived in Winnipeg they monitored weather in all major cities across Canada (via the newspaper) for a decade before they decided to retire in Victoria – they calculated that had the best climate. They considered Victoria one of the major cities because of easy access to hospitals, shopping, etc. The only thing they ever needed from Van was Ikea & a handful of hockey games. (The people who frequent the extreme-high-end shops in Van are mostly tourists)

    Barrister, I’ve also noticed people seem to be moving into the neighbourhood that are planning to stay for 20+ years – but they’re a mix of young families, 50s boomers, & retirees.

  142. Barrister we’re a youngish family with kids, and our impression is that all the new Oak Bay homebuyers are young families with kids. You’re retired and your impression is that all homebuyers are retirees. So it really depends who you hang out with!

  143. Just Jack:

    Actually I was surprised at what you can get here which is just everything that you can get in Toronto or LA. There is no Tiffany’s and the Bay is not exactly Rodeo Drive but short of a very few high end stores
    just about everything is here. The selection of restaurants is suburb. All the big box stores are here with the one notable exception of Ikea (although if you looking for inexpensive solid furniture, Used Victoria has much better deals and you dont need an engineering degree to make things fit).

    Toronto has twenty major malls but basically they all have the same stores and products. If you really need to shop at Tiffany’s or even Harry Rosen it is a short ferry ride over to Vancouver. Frankly, i was expecting it to be hard to find a lot of things in Victoria and I was pleasantly surprised to find that was simply not true.

  144. Hawk, are you employed? We know Barrister is retired so that explains his ability to post regularly during the day.

    Maybe train for a second job to fill in all this free time, at least that way you get paid for your time, could help you get that down payment faster.

    It’s all Econ 101. Supply and Demand.

  145. Hawk:

    Nobody with half a brain beleaves that it is 15C here all year long. There is this fancy new invention called the internet where one can actually get all the weather stats for the least thirty years or more.

    Sure there are lots of places that have better year round weather, it is just that none of them happen to be in Canada. And you are right, that Edmonton at negative 30C is a dry cold.

  146. JJ

    I moved from the east. I was actually surprised what I could get and what is here for the size. Not been off the island except for business and travel in 6 years. What I cant get Amazon can get it for me in 2 days 🙂

  147. The biggest shock for people who move here from Toronto, Calgary and Vancouver is how really small Victoria is. And that you can’t get things here that you take for granted in the bigger cities.

    In scale, it would be like someone moving from Victoria to Comox.

  148. I just checked the listing for SFH in South Victoria (south of Bay St. plus Oak Bay). There still seems to be a fair amount of inventory available. More than three or four months ago.

    I really do try to avoid doing predictions but I suspect that the level of inventory at present may be the new norm. At least for South Victoria, I suspect that the high number of houses bought in the last three years where purchased by people who will not be putting them on the market again for a very long time.
    A very high percentage of purchasers seem to be in their mid fifties or early sixties. I will be the first to admit that we dont have demographic stats to support this and it is just a general impression that a couple of real estate agents that really work these neighbourhoods have confirmed.

    Time will tell, but I suspect that this level of inventory may really be the new normal at least for the next ten years. Prices will either plateau or continue their upward creep. As I stated before Victoria 4 years ago struck me as seriously underpriced so the adjustment in prices has not really been a surprise.

  149. “Greater Victoria’s rainy October days break record”

    Toss in only 6 dry days in November and the winter is off to an ugly one. It’s not the amount of rain, it’s the amount of wet dark days with no sun. Hasn’t been many except the coming week if you like walking in sub zero with a wind chill on top, like Barrister does. 😉

  150. Barrister,
    As you are one of those poor saps who had to live in Toronto I expected that type of “you don’t know what cold is” lame comment. Last year it rained for 4 months and this year it’s colder/wetter than in many years. Those coming here expecting sunshine all year and 15 Celsius are in for a wake up call and is why many leave after a few winters. They like the dry cold and the clear versus the rain, damp cold and darkness.

    Making Victoria out to be Mecca is a worn out line. It’s nice here but I know many who don’t and would never move here.

  151. I walked by a Victorian the other day grudgingly shoveling the snow off his sidewalk with a broken piece of plywood and I said.

    “Cheer up – it could be raining!”

  152. Leo:

    Thank you for the sales numbers; having an up to date picture is helpful.

    When we were looking around in Califonia, I actually found Zillow really useful in that it at least listed all the recent sales and had them mapped.It at least gave you some idea of what people where actually paying in the different neighbourhoods.

  153. Hawk:

    Yeah, it was the great blizzard of 2016. I bet Hawk dug out his snowshoes to get around with. I can just see everyone packing up and moving back to Ottawa or Edmonton. And right now it is brutally cold out there, almost freezing. Maybe my fiends in Winnipeg can put me up for the rest of the winter. Just brutal out there; time to break out the Artic Parka and thermal underwear.

    Well, time to go out find the huskies before I get them hitched to the sled. Now where did that damn snow go to this morning?

  154. 249 King George Terrace that one seems to be on the market off and on for 10 years. I think this guy wanted 15m at one point in 2007 or 8. Not sure it is the same owner. Really nice place though for those with some $$$. I thought it was for sale for much less a few years ago.

  155. “Told ya it was going to be strong.”

    Looks like the big money isn’t strong and is leaving town. The $9.75 million 249 King George Terrace deal Marko was pumping must have fallen through as it’s back on the market.

    Toss in the near $2 million price slash on Villa Madrona since bought just in January and I think it’s pretty evident where this market is headed.

  156. “Except for the 40 extra days of rain and 4x the annual volume of precipitation as compared to Oak Bay. Oceanic vs. Mediterranean climate and all…”

    Well it’s monsooned here for the last 40 days, then more snow in Oak Bay then rest of the city the other day, not to mention well below zero for the next week and it’s not even halfway through December. The new transplanted retirees are looking around saying ” WTF ?, we got stiffed, the postcards the agents sent didn’t mention this”.

  157. Have to agree, VicRenter and totoro.

    People would not “choose” or retire to the Lower Mainland/Fraser Valley unless it’s for work, sport, or family reasons. (by the way, Delta/Surrey/White Rock are not part of Fraser Valley) Sure, downtown is gorgeous in July & August and fun to hike/paddle/swim or ski in winter.

    But the traffic is the worst part – stuck idling your car breathing exhaust in endless traffic jams & paying $$ tolls over bridges that have to connect each municipality over water. In Victoria you can drive to any big mall in 5-10 minutes – not so in Metro Van. You’re stuck following endless lines of cars driving on endless concrete and asphalt.

    Traffic is getting worse the more 50-storey condos they add. Plus, anyone who’s lived near a Skytrain (where most of them are built) talks of the bad noise of screeching Skytrain brakes. Lots of bridges, and traffic on bridges is loud. A few people I know have to wear earplugs to sleep. Skytrain isn’t going to solve pollution problems because people’s jobs often aren’t near its limited routes.
    (Victoria’s traffic is getting worse but nothing like Van)

    It rains a ton more, and when it rains, it’s darker for longer because of the way the clouds amass against the mountains. It snows more because it rains more, so more salt on the roads eating your car.

    People from Metro Van visit Victoria for a break from all that. When I was moving to Victoria, everyone I spoke to (including strangers) said “lucky.”

  158. Wowza! Hope you are laying the groundwork to be the next Zillow Leo…

    I don’t actually find Zillow to be all that useful. I suspect once other sites start publishing this sales data Realtor.ca will integrate some of that as well. Still looking at how to leverage increased access to data and tech in general to be useful to the consumer…

  159. weather is great

    Except for the 40 extra days of rain and 4x the annual volume of precipitation as compared to Oak Bay. Oceanic vs. Mediterranean climate and all…

  160. “Given the choice between Oak Bay and South Delta, South Surrey or White Rock it’s a slam dunk for buyers to choose the Fraser Valley. Housing is built better over there, location is far superior, better employment opportunities, weather is great and they’re on the mainland.”

    Um, everyone I know thinks that the Fraser Valley is a pretty crap place to live — endless, charmless suburbia. I honestly can’t imagine anyone picking it over Oak Bay unless they had to be on the mainland for work reasons. I have friends who work at UFV who would love to get out of there, and not just because the school isn’t very good.

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