Low inventory and high prices starting to bite in core neighbourhoods
For a year it’s come up regularly that at some point we must be hitting minimum inventory levels and sales just can’t be sustained because there isn’t anything to sell. Well the market continued to prove everyone wrong, with December matching the year before despite there being 1000 less properties for sale. At the same time prices in the core have appreciated more than the outer areas.
We’ve managed to eek out year over year increases every month in 2016 but if you look closer, some of the most popular neighbourhoods seem to have hit a wall in 2016 and sales have fallen year over year. Oak Bay is the most prominent one, with large sales declines compared to last year.
Victoria has also been faltering, with a big sales decline in December.
Less traditionally favourable regions like Esquimalt and Langford have taken up the slack in sales.
Interestingly enough, while inventory is definitely down in Oak Bay, by the end of 2016 it had recovered to essentially match the levels of late 2015.
So there could be higher sales with current inventory, but it seems the huge price increases have driven some buyers out of the expensive areas in favour of the cheaper neighbouring ones. Question is, will this expand to the rest of the region this year?
Thanks CuriousCat for that update. Looks like your earlier analysis was dead on!
https://househuntvictoria.ca/2017/01/09/january-9-market-update-and-the-final-answer-on-suites/
@ Hawk some economists at TD bank have a message for you.
“In Ontario, finance and construction made up 68% of the full-time positions over the past year. In B.C., these industries explain over 100% of the growth. In other words, in the absence of this sector, there would be an outright decline in full-time jobs in the province.”
http://www.td.com/document/PDF/economics/special/Part_Time_Conundrum.pdf
Yes… Looking into it.
@ Curious Cat
Thanks so much for the capital gains info.
I know a lot of people that don’t declare secondary suite rental income on their taxes, and i’ve always told them it’s crazy not to… but now??
Seems the CRA is bent on punishing the law abiding, rental income reporting folk with higher taxes. We can thank the wave of foreign buyers for giving the government the ‘just cause’ to implement a massive hidden tax increase on what is most Canadian’s biggest asset.
Also – a great read on the recent mortgage changes here:
https://www.canadianmortgagetrends.com/canadian_mortgage_trends/2017/01/regulators-deserve-praise-and-reproach.html
@Leo
Interesting stats regarding OB and Victoria proper. Maybe we’re seeing some buyer exhaustion at the higher price points in these areas? Affordability cap reached?
@VicRenter and @Halibut
When you change your rental or business property to a principal residence, you can elect to postpone reporting the disposition of your property until you actually sell it.
This election only applies to a capital gain.
If you make this election, you can designate the property as your principal residence for up to four years before you actually occupy it as your principal residence. (so you can leave the suite empty).
To make this election, attach to your income tax and benefit return a letter signed by you. Describe the property and state that you want subsection 45(3) of the Income Tax Act to apply. You have to make this election by the date you are required to file your income tax and benefit return for the year in which you actually sell the property. So if you sell in 2020, then when you file your tax return April 2021 you would include this letter. (You may have to paperfile the return that year, unless CRA changes their ops by then.)
Assuming the reporting requirements are the same, you would need to have a good idea of what the value of the property was when you stopped renting it. A property appraisal would be ideal, but if you want to use BC’s assessment, I don’t see why that couldn’t work. The longer you hold the property, the longer you go from rental to principal residence, the harder it will be for CRA to argue against your “valuation”, as long as it’s reasonable. For example, you purchase in 2015 for $500k. You rent out the suite for 1 year. You own the home for a total of 10 years. You sell in 2025 for $1 million. You indicate that the value of the house was $520k after one year, 50% was rental, and report a capital gain of $10k. I would bet CRA would not hassle you to prove the value 9 years ago was not as you stated. But if you rent it for 8 years and sell it year 10, then the gain will need to be more reasonable. Make sense?
Hey Leo – looks like there’s a little bug in the Market Summary engine:
“If current market conditions prevail, you should expect the median single family home price to decrease at a rate of about $NaN (NaN%) annually.”
Funny how economists ignore new trends. Ex-economists that is. 😉
“That figure in particular has the B.C. Federation of Labour concerned.
“The trend is worrisome,” said federation president Irene Lanzinger in a statement Friday. “That three out of every four jobs are part-time and temporary is alarming. It shows that overall, B.C.’s economy and job growth continue to be weak.”
So how close is the crash? It seems like it’s pretty close by some of the anecdotes I’m hearing out there. I was getting gas the other day and a guy said he found it expensive.
Another day, another $46 million on its way to Victoria over the next 5 years.
http://www.timescolonist.com/canada-invests-46-million-in-university-of-victoria-ocean-science-facility-1.6751135
Even though the job gains of 2016 will add to home-buying demand this year, it’s a drop in the bucket compared to the billions in investment & jobs already on the way in the coming years.
Moreover, I can’t see any of these long-term projects getting cancelled, especially now that the economy’s finally starting to mend.
@Deb
Those are net of losses, so 35.9K net new full-time were created after accounting for losses.
“The only other economic region that saw net job creation last year is Vancouver Island-Coast, which gained just over 9,000 jobs – two thirds of them in Greater Victoria.”
At a 3 to 1 part time to full time, that’s about 2000 full time and 4000 part time. BC has a 7.2% part time increase and only a 2% full time increase year over year. Mike is slow to grasp the concept of rising part time over full time.
AG,
You missed the boat as usual. So your bank lends large money to part time temporary workers ?
Interesting, and how many job losses were there in the same period?
Lol…who’s posting the wrong numbers, Hawk?
We created 35.9k full-time (not your 14.3k!), and 36.5k part-time in 2016. Not exactly rocket science to pull up the data. Read ’em and weep, although if you think about it jobs are good for everyone (owners and non-owners alike).
http://www.statcan.gc.ca/daily-quotidien/170106/t003a-eng.htm
However, I’ll say it again… it’s the billions worth of new jobs coming over the next 5 years that we should be looking at.
Hawk – so you’re saying that there was an increase in both part time AND full time positions last year? Doesn’t sound very bearish to me 🙂
oops,
Mikey never likes it when you show his numbers are consistently wrong. Temporary and part time jobs don’t get mortgages, especially in a new world of tighter lending, stress tests and scrutinization of employment history.
“There has been an increase of 41,300 part-time jobs over the past year, compared to 14,300 full-time positions.”
JS said, “Question 1 RE property assessments …I was wondering if that would be grounds to appeal the assessment and bring it back to the $750 range.”
I’m not an expert, but I think it depends more on your neighbours’ property assessments, and how your property compares to theirs, rather than the price you paid for it. So you’d need a comparison of square feet for land & building, #beds/baths, recent updates, etc.
For Question 3 on building values, I’ve been wondering that myself – how they assess renos vs new builds, and quality. Maybe they’d have to do a walk-through of your house? When I’ve gotten insurance at BCAA, they gave us 5 different “grade” options in describing the materials used in our renos, to determine re-build costs, eg., some differences were laminate vs stone countertops or MDF vs wood cabinets.
Michael
January 8, 2017 at 8:52 pm
BC job growth for 2016 ended up 3.1% (mostly Vic&Van).
Ontario only came in at 1.2% and AB at -0.8%.
Iglika Ivanova with the Canadian Centre for Policy Alternatives says 83 per cent of jobs created were in Metro Vancouver and Greater Victoria.
Hmmm…..seems like Mikey doesn’t like it…lol. I was simply following your lead regarding the economist that you had quoted in your comment.
Let’s not quibble over your economist’s conclusions, let’s talk about the quality of the jobs. If, in fact, a high percentage of those jobs are extensions of the real estate industry then you have to admit that they are precarious … at least in Vancouver….for now.
C.S. I completely agree with you regarding the “inconvenience” of the Island. It is just that problem that keeps Victoria so refreshingly different than the mainland…….. and has people rethinking retirement options. I believe that Victoria will stay “refreshingly different” for a long time and that’s a good thing.
Victoria had higher job growth (2.5%) than Vancouver (1.5%) in 2016.
(Abbotsford beat Victoria, but that’s a tiny volatile job market)
http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/lfss04l-eng.htm
But again, you want to look ahead to the key drivers like the boomer retirement wave and the billions in projects about to break ground in Victoria, to see where our market is headed.
@Curious Cat – Thanks for the clarification.
We’ve been renting out a suite in our house since we bought it 18 months ago. Just so I’m clear, when/if it comes to a point where we take the suite back for ourselves, is it best to arrange an appraisal so that we know the value of the house when the entire thing becomes our principal residence or would the BC assessment value work in lieu of an appraisal?
If the appraisal came in higher than the assessment, would I be able to use the lower of the two?
@CuriousCat: Thanks so much for coming back to this issue. Any sense yet of what would happen if a homeowner who bought in spring 2016 rented out a basement suite (25% of the total square footage) for the first year of owning the house and then never again? (This is the situation that friends are in.) The assessed value of the house went from about $530,000 (2016) to $660,000 (2017), but that’s still less than they actually paid for it.
Regarding capital gains, I checked the form (Schedule 3) and the following needs to be reported:
On the first page you report the capital gain on your suite. It won’t be as complicated as the example provided by CRA as most people have not claimed CCA, so it’s basically total POD less total ACB less selling expenses (all pro-rated). If you had no suite, then you can skip this section and go to the second page. Let me know if you want any direction on how to report it for your particular situation.
On the form it specifically says, “For information on how to report the gain or loss on a part of your principal residence you used to produce income, see the section “Real estate, depreciable property and other properties” in Chapter 2 of Guide 4037, Capital Gains, and Income Tax Folio S1-F3-C2, Principal Residence.” This insures that people can’t claim ignorance, because it’s RIGHT there on the form, directing taxpayers on how to report the gain. The guide then gives an example that’s applicable to pretty much every suite in Victoria (homeowner is living on one floor and renting out the other). The rented portion is 40% and capital gains does apply, lower than the 50% magical figure some people mistakenly thought would shield them from capital gains.
“About 83% of net job growth in 2016 happened in Metro Vancouver, according to report by the CCPA.”
Agreed oops. Where does Victoria stack up out of the remaining 17% ? So jobs makes no difference in a falling market in Vancouver it seems to show. It’s about affordability and credit risk of the lenders which is shrinking.
Question 2 RE Secondary Suites: I read the posting regarding cap gains on secondary suites that was posted a few months back – but it appears the tax forms have now been released. Do they support that cap gains will be paid on most/all secondary suites? The house we sold earlier in the year had a suite – the new house doesn’t.
Yes, capital gains must be paid. See the following example from CRA: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/ncm-tx/rtrn/cmpltng/rprtng-ncm/lns101-170/127/cmpltng/rlstt/x1_pf-eng.html
@Oops,
from CCPA report:
<
If that is correct, then any substantial rise in interest rates will set off the mother-of-all recessions here.
@Oops,
“You cannot, however, overlook the fact that the Island is inconvenient.”
For some, namely, all those mainlanders who’d otherwise turn Victoria into an extension of the lower mainland sprawl.
Long live the inconvenience of Vancouver Island!
Mon Jan 09, 2016:
Jan Jan
2017 2016
Net Unconditional Sales: 65 539
New Listings: 130 934
Active Listings: 1,424 2,471
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
I’m going to piggy back on your comments with this bigger problem, Hawk. As the song goes, “It’s going down, I’m yelling timber.”
Same economist, Michael but a little bit different message.
About 83% of net job growth in 2016 happened in Metro Vancouver, according to report by the CCPA.
“The latest data on B.C.’s economic activity show real estate accounted for one third of the province’s GDP in 2015,” she said.
http://www.metronews.ca/news/vancouver/2017/01/09/bcs-job-growth-is-unequal-and-unsustainable-ccpa.html
Let’s post the truth shall we Mike ? Your fake news pumping is getting right pathetic.
“Full-time job creation may have outpaced part-time positions in October, but most of the job growth in the province from October 2015 to October 2016 have mostly consisted of part-time jobs.
There has been an increase of 41,300 part-time jobs over the past year, compared to 14,300 full-time positions.
That figure in particular has the B.C. Federation of Labour concerned.
“The trend is worrisome,” said federation president Irene Lanzinger in a statement Friday. “That three out of every four jobs are part-time and temporary is alarming. It shows that overall, B.C.’s economy and job growth continue to be weak.”
Lanzinger said many of those part-time jobs are low-paying and won’t support families living in the country’s most expensive province.”
http://www.metronews.ca/news/vancouver/2016/11/04/british-columbia-leads-canada-in-job-growth.html
Victoria sucks for skiing and mountain access. Other than that, it’s awesome. But Mt Washington is far and isn’t all that great for the effort to get there. Mountains are all around us, from the Olympics to Baker to peaks up island. But they all take 3+ hours to get to, including the ferry ($$) in most cases. If you like to play in the snow, this place isn’t great. But that’s the point for many (no snow, or very little).
BC job growth for 2016 ended up 3.1% (mostly Vic&Van).
Ontario only came in at 1.2% and AB at -0.8%.
British Columbia came out as number one for job growth in 2016, but a senior economist says the numbers don’t tell the whole story
Iglika Ivanova with the Canadian Centre for Policy Alternatives says 83 per cent of jobs created were in Metro Vancouver and Greater Victoria.
She says outside of the southwest region, there has actually been job loss.
That should lead to a lot of purchase demand this year.
http://www.andrewcmacdonald.com/wp-content/uploads/2011/03/long-term-real-estate-formula.jpg
Wages have decreased when you account for inflation according to StatsCan:
Canadian Wages Suffer Worst Slump In 15 Years
http://www.huffingtonpost.ca/2016/12/22/wages-canada-worst-slump-15-years_n_13787940.html
“There has been zero growth in wages in Canada over the past year. Given that inflation ran at 1.5 per cent during that period, this amounts to a 1.5-per-cent pay cut. The last time wage growth was this weak was in the wake of the dot-com bust of 2000-2001 …adjusted for inflation, [retail\ sales were still down from their peak in February, 2016.”
I can see why Vancouverites like the freedom to hop across the border or to the interior whenever they want, but when we lived in Vancouver, we didn’t do it very often at all, maybe 5 times a year. There were some concerts or shopping we could do – but we found Vancouver more interesting anyway – and there were other costs/hassles – long border lineups (Nexus pass would have helped) and if we wanted to catch a connection in the US, we’d have to deal with the car, parking, hotel, or bus etc. Some people also have family property in the Okanagan so they like the flexibility, but we didn’t get attached to that area either. We like Vancouver Island more. I guess it’s what you get used to.
I think YYJ is a great little airport. Having said that, we usually get the helijet when we go to Vancouver for a weekend.
The ” inconveniences” of island life are what has saved us from being the Lower Mainland.
I grew up in the heart of Vancouver and feel lucky to have done so in the 70s. Visit family there and can not wait to get out. Traffic and rude people being the main reasons. That and we could never afford to live there.
I do get the drawbacks to being on an island and do have times I wish we could just head south without all the extra hassle; but I always let out a sigh of relief when I get off the ferry and back to this little piece of paradise.
Mike,
You might want to point out those are temporary jobs as different trades rotate from month to month as most come from outside Victoria and Canada as the article states. Employment for local construction is already maxed out and not everyone local can perform on those specialized large projects.
We travel a lot – in transit right now. YYJ is way better than YVR for arrivals and departures. We don’t go to Seattle or shop cross border these days because of the exchange. Any differential in flight or ferry cost is more than offset by lower house prices than Vancouver and imo quality of life. I’m not an rv’er but can’t u take longer trips off island to offset the ferry cost? Our friends live in the us for winter and here in an Rv park for summer. They enjoy it – in their 40s and been doing it for 5 years but no kids.
If you lived on the island you wouldn’t feel the need to travel as much 😉
I travel a lot and it is an extra burden but not that much compared to the everyday burden of living in Van. Float plane to Seattle is the way to go FYI…. Unless yo have VIP tickets to Radiohead. Then those visibility rules really suck. I felt the burden of island living just that once in my time here….
Opps:
As to the ferry at Christmas, you can pre book a reservation online. Security does not have the long lines that you get out of Seattle. Visiting Seattle sounds like fun right up to the point you figure out the exchange rate. Most of my friends seem to be very eager to visit here which saves me a bundle. But as you say different strokes.
As Leo mentioned the shipyards budget has now nearly doubled to $781 million. When you add up the jobs & money pouring into Victoria over the next 5 or 6 years, it makes it alot easier to predict where our market is headed.
http://www.timescolonist.com/news/local/jetties-at-cfb-esquimalt-become-island-s-costliest-project-1.2349770
Lol, guys, I’m not saying that the Victoria Airport is akin to a backyard ultralight runway.
A couple times a month we drive down to Seattle for the weekend. Two to three times per year we fly out of Bellingham to Vegas. Sorry, flights are a heck of a lot cheaper and more convenient…direct.
We fly out of Seattle to Fort Lauderdale and out of Bellingham to Hawaii. We do a driving trip to San Diego each year in the summer.
Now, if we lived on the Island, we would have to take into account the ferry costs and time each and every time we wanted to head down to Seattle for the weekend. We could choose to fly out of Victoria to many of our destinations but the flights are all connecting and more expensive.
If you have lived on the Island all of your life then none of this would make sense to you. My brother in law takes one holiday a year. He lives on the Island and loves it. Different strokes for different folks.
You cannot, however, overlook the fact that the Island is inconvenient. Hell, I remember 3 to 4 ferry waits at Christmas in the 1980’s and 1990’s coming and going to visit family on the Island. Is it better? I hope so.
These are things that mainlanders will take into account before they decide to move to Victoria. Mind you, it’s only inconvenient if you want to travel (by car or more reasonably) or if you don’t have family on the mainland to visit.
Mike,
You might want to post articles with links that aren’t 4 years old . I don’t believe the runway extension was approved.
Anyone feeling the rumbling from those growler planes a lot these days?
Love Victoria’s airport! Clean, bright, great and affordable parking and check in is a breeze. You can get anywhere with many connections to Seattle, Vancouver, Toronto .
Sounds like the people who complain that downtown parking is expensive. Lol.
About two years old, but surely still applies:
Victoria airport tops in customer service
http://www.timescolonist.com/business/victoria-airport-tops-in-customer-service-1.1765076
Personally, I dont find travelling off the island really that big a deal. Direct flight to Toronto and then connect almost anywhere. But it depends what type of travelling you do. I can see a problem if you plan on doing a lot of RV trips. I certainly would not decide to life in Vancouver because I can get direct European flights. But I only plan on one trip a year. Being retired I am never in a big rush to get anywhere (perhaps with the exception of getting to the pub while they still have happy hour prices).
YYJ is a dream compared to Pearson or LAX; Kennedy is another nightmare. Actually, I always thought that YYJ is a perfect little airport. Parking is a real wonderful dream.
What is it you dislike about YYJ? I always thought it was one off the nicer airports.
Direct flights from Victoria to parts of Europe could be a reality in 2017 under a Victoria International Airport expansion plan.
Under the airport’s new master plan, which is being drafted, its 7,000-foot runway would have 600 feet added to it in 2017 at a cost of $8.2 million.
A longer main runway would allow airlines serving Gatwick airport in London to offer non-stop service to Victoria.
As demand picks up in a projected European economic recovery, flights could expand to Frankfurt, said Geoff Dickson, Victoria Airport Authority president and chief executive officer, on Tuesday.
Government projects don’t protect a housing boom from going bust when global events effect interest rates and credit crisis risk.
Jerry
January 7, 2017 at 1:37 pm
Over the last few years myself and six other former colleagues have returned to Canada permanently from lengthy stints overseas. When deciding where in Canada to buy a home not one of us considered anywhere but Victoria despite the rather steep price premium. There are many more like us to come over the next 5-7 years if that is of any interest to the forum.
Just as a counterpoint to my friends commentary, I retired two years ago. I was born in Vancouver and my wife was born in Victoria. My previous job took me to Victoria 6 – 10 times per year. We still have family on the Island and when we looked at retirement we really had to assess where we wanted to be.
Victoria is beautiful and the people are great, welcoming and very inclusive. The biggest problem for us in determining where to move was really “freedom”. My wife was adamant that she would not be “trapped” on the Island again. We do love to travel and the extra money and time to get off the Island was really the deal breaker. We did a lot of Seattle weekends, lol.
We have a number of friends on the Island, as well and as they reached retirement years they expressed an interest in getting off the “rock”….. solely for travel reasons. Apparently, those RV’s are very pricey on the ferry.
I think the main determining factor for retirement is really lifestyle. If you want to travel a lot in your retirement, the Island is a big deterrent. Even if you want the Island lifestyle but your kids and grandkids are on the mainland, it becomes another issue to contend with. The ferries are both expensive and sometimes unpredictable …… wind, mechanical, etc.
If you aren’t concerned about those issues, then the Island really would be my choice. I told my wife that we would move there when we reached our 80’s. Lol.
Oh, I had a number of work acquaintances that thought Victoria was gorgeous …. to visit. Similar reasons to ours for not considering it as a retirement option.
Victoria has a dismal winter climate? I suggest a road trip to Alberta…. Sure was nice driving to the lake yesterday without seeing ten accidents on the side of the road and coating my truck in sand and salt….
I guess when the glass is half empty everything is dismal.
Just renewing the jetties at CFB esquimalt is projected to cost $781 million
At least $253 million is coming from the federal govt for the sewage plant. That’s big. Much bigger for example than the ~$100 million in govt money for the McKenzie interchange.
BC wages in the real world have gone nowhere.
“Even British Columbia and Ontario — the two powerhouses that have accounted for most of Canada’s job growth recently — saw wage growth slow to 0.5 per cent in both provinces, well below inflation in those provinces.”
@ Michael: “Also, the sewage plant hasn’t even broken ground yet. That one alone will inject around a billion over the next ~5yrs.”
And will cost each household up to $583.00 per year — sort of like adding $25,000 to the price of a house.
@ Barrister:
“Have you ever been to Washington? Try looking up homes in Georgetown or Leesburg even for a real comparison.”
Yeah, long time ago: remember buying a newspaper, I don’t remember which one, for 8 cents, and the weather was hot as Hell.
Georgetown nets another 5 houses over $5 million. Leesburg, none, as far as I can tell from Zillow, which seems to confirm that Victoria really is a pricey little place, and with a dismal winter climate.
CS:
Have you ever been to Washington? Try looking up homes in Georgetown or Leesburg even for a real comparison.
Hands up anyone here who got a 7% to 13% raise this year. Those numbers sound like bullshit.
Washington, DC, with a population twice that of greater Victoria, and at the center of a conurbation with over seven million inhabitants, has 16 houses listed for more than $5 million. Victoria has 12.
Washington, DC:
http://tinyurl.com/zkvgjwv
Victoria, BC:
http://tinyurl.com/zu8ae8f
But as someone will remind me, I forgot about the discount on the Canadian dollar.
I believe that 9.5M home was counted in the November stats and then collapsed, causing it to be subtracted from the December stats. Hence the large swing in the average.
@Marko: In the spring you mentioned that your clients were having a very hard time buying houses because of the bidding wars that were happening on the best properties. Has it still been the case this fall that your clients are having a tough time getting the places that they want?
I could be totally wrong here but I suspect that it would only take the lack of a few very expensive house sales to bring the monthly average down (and the presence of a few such sales to bring it up, as probably happened in November). December 2016 sales were a tiny bit greater in number than those of December 2015 but we’re still talking about a relatively low number of sales, as is usually the case around here in December. Big $ sales or the lack thereof make a big difference with such low sales numbers.
Not sure how relevant this opinion is but I’m sharing:
http://www.timescolonist.com/opinion/letters/big-drop-in-home-prices-in-december-1.6545974
You forgot to mention the accurate measure, the benchmark, was up 1% in December.
Greater Victoria house prices November to December, 2016: Median down 6%, average down 12%.
http://www.vreb.org/pdf/VREBNewsReleaseFull.pdf
@Ash: yes, Montrose and Topaz are amazing. There are also some good views from the other side of the hill on Blackwood and Jackson. I don’t know Wicklow but I know that Mars is pretty cool. The hill that Mars leads up to is called Peacock or something like that and has spectacular views. There’s lots of character in those hilly hoods.
With the highest annual wage increases coming from the following 5 sectors, I’m not sure we would even notice if some of the billions in long-term construction projects were to somehow get held up.
Management occupations …..13.7%
Natural & applied sciences ….7.1%
Business, finance & admin ….6.9%
Educ, law and gov’t services ..3.9%
Sales & service occupations …3.8%
Also, the sewage plant hasn’t even broken ground yet. That one alone will inject around a billion over the next ~5yrs.
And good points, Luke.
I’m the one looking at Hillside/Quadra. Thanks for the Esquimalt/Saxe Point tips, JS. I haven’t been to the rec centre there or explored the shops much, but I’ll give them a closer look. I really appreciate your perspective.
Vicrenter – good luck in your search this spring. I too like that area of Hillside near Smith hill. Montrose and upper Topaz have awesome views. Another area we considered was in the Mayfair area – Wicklow in particular is nice and has some views, as well as the top of Mars street.
Some of the inventory levels are almost hard to believe given where we were at a few years ago. For example:
Condo inventory at Jan 2013: 909
Condo inventory now: 186
Over the last few years myself and six other former colleagues have returned to Canada permanently from lengthy stints overseas. When deciding where in Canada to buy a home not one of us considered anywhere but Victoria despite the rather steep price premium. There are many more like us to come over the next 5-7 years if that is of any interest to the forum.
Actually, I do now recall that one chap said he was going to make Vancouver his home. He went on a ten-day house hunting expedition to that city and and left after 36 hours. He said nothing on earth could compel him to reside there even if prices there were one half of Victoria.
Another interesting fact from my huge data-set of seven individuals: we are all reasonably intelligent professionals but none of us gets the attraction of Oak Bay. There were a number of objections but primarily it was the difficulty of getting anywhere and the generally depressing sense of decay. Many of the homes appear like the owners either don’t care or can’t afford to make even the smallest concession towards defeating entropy on the structure or garden. The are has no sense of repose, only pathos.
Just some comments and questions for some people following this blog (sorry the topics are not really very connected).
Question 1 RE property assessments: Wife and I purchased a home in the Saxe point area of Esquimalt on June 20th 2016 which is recorded on the BC assessment website. We purchased it for $750,000 and the assessment which was done 11 days later came in at $790,000. Nice to think it appreciated that much in 11 days, but I was wondering if that would be grounds to appeal the assessment and bring it back to the $750 range. The reason why I’d be interested in reducing the assessment is because Esquimalt has a pretty high mill rate.
Question 2 RE Secondary Suites: I read the posting regarding cap gains on secondary suites that was posted a few months back – but it appears the tax forms have now been released. Do they support that cap gains will be paid on most/all secondary suites? The house we sold earlier in the year had a suite – the new house doesn’t.
Question 3 RE Land/Building values on the assessment. I noticed something interesting about the home we sold versus the home we bought. The building values were pretty far out of whack. The house we sold was a 2004 finished to average / below average quality straight across the board compared with the new home which has a much higher quality finish and construction (2007 built). I’m not so worried about the old house, but I’m worried (for insurance purposes) on the build value of our new house – which they have pegged at $298,000. Is our insurance based on that value? I’m no expert but I doubt we’d be able to replace this home for that price. It’s also odd that the two properties would have such a disparate building value ($428,000 on the old house) when they are somewhat similar and the new house is definitely better built.
Comment – There was a poster who was broadening their search out to the Hillside/Quadra and Esquimalt areas. I’d like to chime in as we sold our house in Hillside/Quadra to move to Esquimalt. We knew that Hillside/Quadra was appreciating faster, but we liked Esquimalt better. Since moving here we can honestly say that we much prefer our new area versus the old one. I don’t want too spend too much time highlighting the negatives of the old neighborhood (its still decent and does have a lot of positives) but Esquimalt (at least in the Saxe point neighborhood). Friendly residents with a real sense of community, gorgeous views and ocean side parks/walks, the rec center/pool is amazing and affordable. The shops are also a plus and getting stronger (Esquimalt Village makeover starting soon, plus red barn, new library etc, health center). If you have kids, it has a great family environment – we loved the Christmas parade. The SFH prices seem lower as well, and your 850 budget could certainly go a long way here, whereas prices in H/Q have shot up more.
Michael is probably quite right that the next 30 years will be vastly different than the last. But, that will also require our planning dept’s to change and ‘catch up’ with the times. Can you see them (esp. Oak Bay) doing that? Having originally come from the UK (before Metro Vancouver) – I could tell our planning dept’s to take a trip there and see how to offer a more diverse array of housing for people. In that country for ex. there are many ‘terraced’ or ‘semi-detached’ houses that are more affordable for most, and still have the yard (garden) and freedom and privacy that everybody seems to want, with no onerous ‘strata’ councils – these are still often freeholds. Here in Canada it seems we have a lack of choice to offer people. It’s either an overpriced detached SFH, or a small strata condo or strata townhouse – or you have to move to a far flung cookie cutter home in the suburbs. Even if our planning dept’s were to change, that still leaves the problem of lack of land in the core.
Michael has an interesting point about the boomers not wanting to ‘upsize’. However, something to point out is what we already see in Greater Victoria and especially Oak Bay. Many of these existing baby boomers and the generation before them (those born before 1946 and perhaps already having strokes but still somehow surviving in their homes) would like to stay in their homes as long as possible, even long after the nest becomes empty. This creates continued lack of supply in the core as these groups bought in years ago when land and housing was affordable for most. Often, the only way their homes become available is when they become ‘dearly departed’. With many living longer this will take a while.
We still have another ten plus years of boomers retiring, and while some won’t want to upsize, if they want a SFH instead of that condo with no yard and an onerous strata council, they may have no choice. Imagine if only 1% of the boomers in Van and GTA want to come here? Victoria’s core is still cheap compared to those two large cities, even if we start to see large declines there.
Then comes the millennials and generation x. As a member of generation x, and having recently moved to Victoria for a good job, I can tell you many others in my generation would love to live in the core, if they could afford it – however – many are currently forced into condo’s or the west shore. I was one of the more fortunate ones, having started early at age 23 in 2001 in the housing market in Coquitlam. And yes, our first house was a crap house that we spent years and hard work fixing up and ended up selling for a large profit. Everyone has to start somewhere. While we moved ‘up island’ near Nanaimo, first – in 2007, after 8 years of that we decided that was too quiet and Victoria is the happy medium!
Good luck to anyone trying to get in this market of incredibly low inventory, high desirability, lack of quality homes, and virtually no one wants to move away. Victoria is a gem still relatively undiscovered but just starting to be discovered, and if you ask me – it beats Metro Van or GTA, or for that matter – virtually any place in Canada – tenfold.
“Agreed Leo, however one has to admire BC’s employment trend.”
With a high percentage tied to the real estate/construction business. Take that away temporary phenom and look out below.
Houses are being overpriced because the agents/clients list it high out of greed and the pumping local media that it will never end and that there is always some rich fool out there willing to over pay.
I did well by buying a crappy house. Bought it cheap, fixed it up, lived a good 13 years in it despite the neighbours at the end, paid it off and sold it for 2.5X what I paid for it. In the end it only appeared crappy. That old growth cedar siding will last another 80 years if cared for…. Did not spend a ton on renos as I did a lot by myself. Would recommend it to anyone buying their first home if they can learn and do things themselves (painting, building a fence, landscaping etc). That said, if I could have bought a million dollar home then I would be better off. BUT that’s if I was able to keep it through a split, the Great Recession, and moving to and from another country. In the end buying within my means enabled me to also invest in other things and never feel the pressure from debt.
I think the biggest curveball that starts over the next ~5 years, is the largest generation to ever walk the planet is about to reverse their ‘upsizing’ trend. Of course they still talk big, but that all changes once they hit their mid-70s and suffer their first stroke, etc. This will make the next 30 years of what to own, very different than the last 30 years. As there won’t be near enough millenials or immigrants to fill their existing 4bd/2storey suburbans, let alone continue the incline we’ve come accustomed to over the last 30 years. And yes, “quieter” the better, although they can just turn their hearing aids down 🙂
Agreed Leo, however one has to admire BC’s employment trend.
http://www.statcan.gc.ca/daily-quotidien/170106/cg170106a003-eng.png
Have to agree with both Luke & CuriousCat on different things …
We were looking to move back to Victoria for several years (through the flat/downturn) and for that entire time, the most “popular” houses always had multiple bids (2012-2014).
Luke said was that houses on quieter roads attracted more offers – this was our experience in both Victoria & Vancouver. Factors that determined if there were multiple bids: busy road (front/back/sides) or busy location (eg., school), bones & layout, and proximity to town, ocean & multiple shopping centres.
Some people think a house on a busier road is fine – great! Based on the data we had – the houses that were away from busy roads (all directions – front/back/sides) had the most bids because people wanted quiet for various reasons, eg., trouble sleeping at night or day (for night shifts), kids ability to play, working from home during the day, parking multiple vehicles, etc.
(If you’re not sensitive to noise, then you’re lucky!)
Many families were willing to reno a good-structured house though. But we DID see a lot of “crap” renos that were over-priced and we were very frustrated by the fact we had to compete with some flippers that would use cheap materials & then re-sell quickly, or builders who wanted to get the higher ROI by building a new multi-million $ house with layouts & stairs we weren’t fond of anyway.
Many quality houses sit because they are priced way too high.
I was talking about this to someone yesterday. There are a lot of quality houses out there right now but they seem to be above $1.5 million and priced way too high.
With the 39% run up in the core over the last 36 months there just isn’t much in terms of quality under a million. Quality being a subjective term.
Looks like the jump in foreign buyers in October was a bit of a blip. Vancouver edging back up though. So far they have collected $12 million from foreign buyers tax.
Has a tax higher than 15% been thrown around if the Vancouver trend continues?
Regarding the “busy street”, that doesn’t necessarily mean it’s a bad house, unworthy of living in. We had a whole post about that a few weeks ago. I LOVE my house and it’s on a busy street. Different strokes.
And finding a house that needs repairs and upgrading can be an opportunity to get into the market in your desired area, and then to improve it when you have time and money, putting in some sweat equity, according to your tastes, and up to your own standards. I’ve bought a brand new house and was afraid to paint over the builder beige walls. One reason was the open-concept main floor. You basically couldn’t paint the living room, without continuing on to the kitchen and dining room. Soooooo beige it stayed! Other than arranging the furniture and putting pictures on the walls (without nails of course, ’cause we didn’t want to damage the walls) there was nothing to do. It was a super boring, cookie-cutter, house. When we sold it 2 years later, it still looked the same as when we moved in.
Househunters should consider those crap houses. It might just be a jewel in the dirt. And if you save $100k off the purchase price and it only needs $50k of work, you are coming out ahead in the long run. I think Marko said, the less you can pay at the start, the better off you will be in the long run.
Many quality houses sit because they are priced way too high. Comparing sales to ask prices is by and large useless although in a slow market like 2013 the average sales/ask will be a couple percent lower than now (but even this year with the insane over asks, the average sale price was still less than the average ask price of sold listings)
From someone who was actively looking in the core area of Victoria for seven months in late 2015/ early 2016 I have to weigh in… We found our house on ‘used victoria.ca’ through a ‘house wanted’ ad. Thank goodness the awesome builder contacted us without listing his incredible quality home in North Oak Bay on the open market, because if he had listed, I’m sure a frenzy would have ensued…and we would have lost the home to others who would’ve paid more. lucky for us, we sealed the deal with no competition! We had previously lost three rare ‘quality’ homes to at least several multiple over asking offers. Our experience told us the homes that garner multiple over asking offers are more deserving of it. Crap boxes don’t get multiples.
The fact is… Victoria is full of older houses that need extensive updates…i.e. crap boxes. Weather or not these are on quiet streets, they are still ‘crap boxes’.
Whenever anything that nears any kind of quality comes on the market in Victoria’s core, and is priced appropriately – it will attract multiple over asking offers. Mentioning the crap boxes that went under asking is not indicative of what quality will attract in such a dire landscape of homes that need extensive renovations. If the home is brand new, you do have to consider the effect of GST.
Many of the homes that are mentioned below: i.e. Frederick Norris Rd, are on quiet streets – that back right onto busy streets! The backyard of Frederick Norris is on busy Cedar Hill X Rd., and it was waaay overpriced in the first place. How many of these others are near busy streets? It’s pretty tough in Victoria to get too far away from a somewhat busy street… Also, guess what… Frederick Norris is another ‘crap box’.
When people like Hawk like to mention the homes that go under asking… how much due diligence did he do on each of these? I’d bet all of these homes are in need of extensive renovations and/or near busy streets and hence, the ‘under asking’ price. Any quality house, esp. if away from a busy street, goes over asking.
The future for Victoria’s core SFH desirable areas: Very easy to predict – It is extremely unlikely there will be any price declines, barring a major surprise world event that would only produce short term declines in values that would resume an upward trend. Fundamentals of lack of land with an increasing population, a lack of any willingness to make any real change in planning policies, a continuing booming economy, continued high desirability of Victoria among Canadian retirees who are baby boomers who have the highest wealth levels ever seen, and also competition from generation x workers will be what drives prices in Victorias desirable core areas to continue to climb upward over the coming years…
With all the hubbub about gaining 81000 full time jobs, is it just me that thinks the charts are just noise? Why is data quality never mentioned? It’s not like they’re counting every job out there and it seems they aren’t doing a good job estimating. Here we know not to worry about month to month price movements but for the jobs numbers everyone loses their mind every month
http://wpmedia.business.financialpost.com/2017/01/fp0106_canada_jobs_fulltime_parttime.png
Looks like the jump in foreign buyers in October was a bit of a blip. Vancouver edging back up though. So far they have collected $12 million from foreign buyers tax.
Entomologist, only 3 or possibly 4 out of 12 are on busy roads. Not quite most or many. The many reductions I posted are on quiet streets in prime hoods.
@ James, and he has a lawn worthy of Buckingham Palace! Just in VicWest….
@dasmo it’s called rolling your lawn. It’s for firming it.
They do it every day at buckingham palace.
CuriousCat – I can’t help but notice that many/most of the listings you posted are on busy streets (Shelbourne, Caddy Bay). That matters a lot in terms of desirability.
In last year’s RE boom, super-desirable houses (turnkey, recent renos/updates, 2300-3500 sq. feet on quiet streets in the core) were the ones garnering the most attention in terms of bidding wars, over-asking price sales, etc. All the others ‘fixer-uppers’, busy streets, etc. were quite a bit quieter.
Just IMO, but I think that was a big factor.
Good luck avoiding looney neighbours. Money does not erase inconsiderate tendencies. A yapping dog is enough to drive anyone nuts….
I tried doing a table using the pipe symbol | but it turned into this. Sorry I give up! lol
Address
Original
Reduced
Sold
DOM
891 Snowdrop Ave
529,900
499,900
499,000
74
795 Gladiola Ave
534,900
514,900
503,000
138
724 Esquimalt Rd
539,900
519,999
495,000
97
4113 Shelbourne St
625,000
599,900
602,000
98
3010 Cook St
675,000
639,000
608,000
128
1241 Tattersall Dr
969,000
839,000
821,000
96
2016 Frederick Norris Rd
1,288,000
1,1188,000
920,000
176
3740 Cadboro Bay Rd
1,495,000
1,398,000
1,370,000
133
128 Meadow Park Lane
1,500,000
1,419,000
1,335,000
172
1211 Old Esquimalt Rd
1,595,000
1,399,000
1,400,000
148
620 St. Charles St
2,650,000
2,550,000
2,390,000
256
2915 Tudor Ave
2,800,000
2,595,000
2,500,000
100
So here’s a question;
Do the better, more expensive neighbourhoods have less looney neighbours?…or is OB full of looneys too?
I was joking about the cross!!! he would haul out a large metal barrel and an aerator though. His grass was putting green quality. The only one on the street! Mine was natural with weeds and uncut grass so he probably thought I was nuts….
The 4 ~ do work. They need to be on their own line.
4 ~
Paste from spreadsheet
4 ~
https://en.support.wordpress.com/markdown-quick-reference/
LeoS, is there a link/website/info you can direct me to on how to properly format the comments? I tried putting 4~ before and after my comments and it still didn’t preserve the spaces.
I tried using the tips https://wpbtips.wordpress.com/2010/05/23/html-allowed-in-comments-2/ but their suggestion of using < pre > didn’t work either.
Leaf blowers are the dumbest thing ever invented. Every few weeks the neighbour a few houses down transforms his property into a war zone. 3 guys with leaf blowers and riding lawn mowers for a postage stamp sized lot.
I saw a lawn service guy with a rake down in esquimalt. Pure heaven.
I found a spreadsheet from June 10/2016 that I had posted on this blog, and now, being ever so curious, I looked up the selling prices. Not all houses sold for over ask after all in 2016! 😉
Address Sold Reduced Original DOM
4113 Shelbourne St 602,000 599,900 625,000 98
932 Tattersall Dr Did not sell 549,900 599,900 ?
1241 Tattersall Dr 821,000 839,000 969,000 96
724 Esquimalt Rd 495,000 519,999 539,900 97
891 Snowdrop Ave 499,000 499,900 529,900 74
3740 Cadboro Bay 1,370,000 1,398,000 1,495,000 133
322 Plaskett Pl DNS 1,995,000 2,275,000 55+
128 Meadow Park Ln 1,335,000 1,419,000 1,500,000 172
2016 Frederick Norris 920,000 1,188,000 1,288,000 176
2915 Tudor Ave 2,500,000 2,595,000 2,800,000 100
1211 Old Esquimalt Rd 1,400.000 1,399,000 1,595,000 148
4040 Saanich Rd DNS 1,300,000 1,400,000 82+
795 Gladiola Ave 503,000 514,900 534,900 138
3010 Cook St 608,000 639,000 675,000 128
620 St. Charles St 2,390,000 2,550,000 2,650,000 256
Did the wooden cross work for weeds? 🙂
We had some doozies. One neighbour hired gardeners that used leaf blowers. If anything will drive you insane when you’re working from home, it’s leaf blowers. I still have a video of one of the guys blowing dirt from the street onto people’s cars in order to fill the hours.
When we were in a concrete condo, the grandkids of a couple upstairs visited 1 or 2 times a week and repeatedly threw things from their balcony onto ours, hammered the floors, and stomped and shook the ceiling of our floor to the point where our stuff would rattle. After we left a friendly note pointing out the issue, the grandfather denied everything, attended council meetings to “track our activities down”, and claimed we were out to get him for some kind of personal vendetta (for what, I don’t know!)
Wow. Just wow.
I had a neighbour in family housing who was in the townhouse one away from ours. Childless couple who were transferred to the townhouse after making lots of noise complaints in the condo complex. They proceeded to terrorize our direct neighbours who were lovely people with odd and picky noise complaints – even though we as the other direct neighbours found them quiet. The couple hated kids and became obsessed with the idea that kids were going to damage their oldish car in the adjoining parking lot and sent out notices to the neighbours even though no damage had occurred. They then set up a 24-hour surveillance camera trained on the parking lot from the second floor window, which was mighty uncomfortable for the rest of us. Oh, and they never left their house if anyone else was outside. But that is nothing compared to a grass cross.
From the street her house looks perfectly normal. Her insanity increased over time. As did her sons condition….
same with the other neighbour. They had a family breakup. Then ended up renting their suite to some tough guys who appeared to take over.
The neighbour I found the most odd was the one who obsessed over his lawn. He would drag a twelve foot wooden cross over it every month so god would keep the weeds away….
@Leo, hard to see the macro location without living there. You can have irritating neighbours no matter what hood you live in. Anyone else have nasty neighbour stories?
Location location location. However you can rest assured there are no street people out by your new place. Maybe the odd axe murderer though…
@Leo S: “In 2016 they were pricing at previous year prices despite the jump. So lesson is: you better educate yourself if you’re going to sell privately.”
I would imagine that this is in part because most people don’t have PCS accounts and so only know asking prices not selling prices. Last year there was a huge discrepancy between asking and selling prices, so if you didn’t know what was going on you could easily have missed out on a big chunk of cash.
Agreed. Come back JJ! Always appreciate your posts.
Burning low heat and wet wood produces smoke. I dry mine for 2 years and always burn as hot as it takes to produce no smoke. Half my neighbours burn wood and rarely do you smell smoke. New inserts are very efficient if used properly.
I’m a regular reader of this site but have never posted before. I just wanted to say I miss reading just jack’s posts. He was around from the beginning and always had interesting info and added humour to this site. I think the mix of view points made the comments section more interesting.
Our house we sold had some neighbour issues which is why we sold it and not the rental. Loved the house but hated the neighbours. The one had three wood stoves. She would collect scrap wood and saw it all summer and burn it all winter. When she installed the third chimney is when it got real bad. It was under her roof height and the smoke would flow down and into our house. It got bad at the point when my wife called her a crazy idiot. I thought she was polite… We went the complaint route which took months of Terry Gilliam esc interactions with misc city departments. It’s a bylaw issue, it’s a health issue, it’s a fire issue, it’s a building code issue… After creating a document with all the laws being broken, and Continuing to call and email, the fire department inspected her new fireplace and she was forced to extend the chimney. It helped a bit but the smoke still came in the house. Relations were bitter after that. I’m pretty sure her street person son who lived in a shed in her back yard (heated with a wood stove) vandalized my car a number of times…. Ahhhh the joy of home ownership….
On proximity to power transmission lines, they run over the park across the street from our house. We borrowed a gaussmeter from bchydro and found that the regular neighborhood lines had a much higher EMF reading than the transmission lines. The intensity is the inverse square of the distance, so the strength drops off pretty quickly.
On wood burning, many people on our street heat with wood including us. Only twice in 3 years have I noticed a smoke smell from neighbors. A good stove should have very little particulate matter after it heats up. Our street doesn’t have gas and when I called Fortis about getting it installed, they quoted me some ridiculous price to have gas installed for the whole street and said I would be reimbursed if or when other houses connected.
They’re doing it wrong. A modern wood burning insert and dry wood doesn’t smoke. maybe offer to go halfers on an upgrade?
Re wood smoke from the last thread. Sorry to hear about your neighbor Sweethome. That is a tough issue to identify unless you happen to be house hunting in the depths of winter. I guess spying in backyards for piles of firewood would be advisable. Your story is actually the third I have heard on this issue in the last few months. One friend who lives near foul bay road regularly gets smoked out by a neighbor. Another on the peninsula is so bothered by neighbor’s smoke she wants to move.