The basement walls are crying

@ Vicbot

“I think the main cause of sweatshops is our consumer-throw-away society”

Undoubtedly, if folks didn’t keep upgrading their cell phones there would be less work for those young people at FoxConn factories in China, you know, the ones with anti-suicide nets.

But the reason that Apple assembles the phones in China rather than California is that the labor is cheaper than in the US and therefore the profit margin as larger.

That’s all globalization’s is about. And that’s probably all the Lesser Trudeau is about too, collecting payoffs gifts from friends by way of the family foundation.

When Trudeau says there is no Canadian nation he’s either being disingenuous, or he doesn’t know the meaning of the words he’s using.

Barrister: It’s one thing to put up condo’s and triple the density but lets not make the same mistakes Vancouver has made. We don’t need dark ghost cities of condos unsuitable for families, like Vancouver’s Coal Harbour which is bought up by overseas (mostly Chinese) buyers.

Rezoning large areas of James Bay/Fernwood/Fairfield and Vic West (yes sadly, good luck rezoning Oak Bay)… is a great idea. They call it ‘gentrification’ and large parts of formerly sad old grimy industrial British cities like Liverpool, Newcastle and Manchester, for ex. have now been ‘regenerated’ in this way (but now, they’re a target of the Chinese global buyers, who ever thought that would happen, the UK hasn’t done enough to stem the tide of Chinese buyers either). Let’s hope the new Chinese capital outflow controls at least help somewhat with that.

Victoria is getting older and much of it’s housing stock is getting very old and tired, esp. by Canadian standards. There is ample opportunity for rezoning and regenerating, especially in areas near downtown or along transportation corridors.

Unlike Vancouver, we need to make condo’s/townhouses that are more ‘family friendly’. i.e. there needs to be a lot more 3 bed or even 4 bed condo’s/and townhouses or terraced homes or duplex/triplex with gardens and like I said before – why are there no ‘freehold’ terraced houses in Canada? (like there has been in large numbers of these in the UK since the 19th century). We can especially look at the ‘freehold’ terraced (or duplex/triplex/fourplex) house as a model here because it gives families an option besides ‘strata’. Many families and people, myself included, balk at the idea of buying into a strata.

It will require our zoning and planning people, mostly in Victoria city proper but also Esquimalt, which is ripe for regeneration – to ‘think outside the box’ and look at other options besides ‘North American norms’, and when have they ever done that? So, for now, if it doesn’t change, we are stuck with a future like Vancouver with either small or tiny condo’s (the tiny lofts in the Janion for ex. may work for some housing needs, but there are many many people who need larger condo’s than that) or overpriced SFH in the core. This condemns families to commute to the numerous quickly thrown up cookie cutter homes in the Westshore, b/c they have no other option. Let’s give them an option.

As for the parking issue downtown, and I didn’t want to get started on this but… yes many parking lots are being replaced by residential/commercial buildings, but Lisa Helps is also hugely purporting the bike lanes – apparently, we should all go to work and have ‘helmet hair’ like her! Then, waging war on the car and even the buses with narrower lanes and ridiculously wide concrete pads (along Johnson to the boondoggle of a bridge built w/ Chinese steel), while not giving people realistic alternative options like LRT and then eliminating the train on the boondoggle bridge, for ex., which could have let people in the Westshore, at least, have another option if they ever do get a commuter train (but I don’t think they’re going to want to walk from the Roundhouse in Vic West to downtown). Yes, Lisa will say, the bridge was a ‘done deal’ before her – but the bike lanes are her legacy. Along with ‘where are the people going to go’, I say – ‘where are the cars going downtown going to go?’

I really think we should add another 30 or 40 highrise apartment building downtown; they should be modelled after Toronto and be at least 25 stories high. That way we can catch up to all the American cities. We should start by rezoning James Bay and all of Fernwood. We have a pretty good start in Vic West but we should continue there by tripling the density of the remaining land.

“(instead, Lisa Helps is just eliminating parking left right and centre, but lets not get started on that).”

Oh let’s. Did you notice the lane sizes on the main drags like Johnson/Pandora/Fort have been narrowed to the point of no room for error in order to make a whole bike lane with cement barrier on Pandora below Douglas. Don’t even know if their legal lane sizes anymore.

It’s getting to be a joke considering over half the bikers appear to not wear helmets anymore as it effects the image of the hipster bikers.

What is going on with new listings? Last year was a 10 year low for new listings and this year we will be below that.

Mon Jan 30, 2016:

Jan Jan
2017 2016
Net Unconditional Sales: 409 539
New Listings: 699 934
Active Listings: 1,525 2,471

Please Note

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

“in fact there are a number of core identities in Canada”

I think that’s what he was trying to say – there’s no 1 core identity to Canada – there are many. eg., my family are immigrants and they had to learn the history of Canada – English/French/First Nations. But an identity is more than just history – it’s a way of life that evolves over time, including support for universal health care (health as a basic human right), minority rights, women’s reproductive rights, respect for the diversity of our neighbours, etc

In other words, we’re bigger in our way of thinking that just inside “national borders” – we look at ourselves as citizens of the globe, who want to preserve our environment and health for future generations, no matter what country they’re living in or from. We recognize that what we do impacts the rest of the world, and things that are good for us may not work in areas of extreme poverty. It’s not a “me-first” attitude.

I think the main cause of sweatshops is our consumer-throw-away society that western gov’ts have encouraged, to keep economies going – it’s bad for third-world workers. We need to pay a higher price for those goods so that third-world workers get a fair wage, but that doesn’t mean making everything in Canada. I agree we need to do something more – but halting trade isn’t a solution.

“I find him to be outrageously dangerous to human rights and I’m actively looking for a way to put my skill set to work against normalizing that – and plan to be at any local protests.” – Agree Totoro, same for me.

Luke, funny Christy graphic LOL, ain’t it the truth 🙂

Rook – yes of course it’s too late for Vancouver. The devil is in the details – how hard is it to get a work permit in Canada? (I wouldn’t know as I was born a Canadian -UK dual national – having a parent from each country). Personally, like Leo S – I would like to see a work permit AND income above a certain level (say min amount per year). If there is no income requirement any joe blow can go out and get a work permit. (or is that any… Tony Joe?). Next question is: what is the income requirement going to be? This could get messy.

When you say negative impact on Victoria I’m not sure what you mean?

I’m not a fan of Christy – so you may have misinterpreted my post, and I was only really saying it was more vote grabbing by her and it seems she’s going after the large ethnic Chinese-Canadian vote (by doing this on Chinese New Year).

And yes, I think we can safely say this means now the foreign tax won’t be extended to Victoria, at least not before election time in May…

Hows that leverage going Mike ? Looks like the credit markets are maxed out like you. Only one to go now and it ain’t up.

http://realinvestmentadvice.com/wp-content/uploads/2017/01/Margin-Debt-1.png

Luke, sorry but I think you are out to lunch on old Christy Clark. It is a good move for her, definitely, but not for Vancouver or the rest of BC. I think she is too late for Vancouver. Victoria though will see the negative impact from this.
I think we can safely say now she is going to stay away from implementing a foreign buyers tax for Victoria and the rest of BC after this move.

How does a family of median income with 5%, or even 2o%, down buy a house at the current Victoria median price, or anywhere close, if the mortgage rate is 10%? They don’t.

We can agree on that CS. However, I think it’s unlikely that many of us see 10% rates again in our lifetime. Interest rates and inflationary cycles tend to take decades to go from cycle lows to cycle highs, regardless of who holds the oval office. And as seen below, rates may again only rise a few percent over the next ~30 years after carving out a long saucer-shaped bottom.
Even if we were to get another 1946-’81 anomaly, that would be a bear’s inflationary nightmare. Houses that were bought here for around a $1000 at the 1940’s rate lows, went for over $100,000 at 1981’s rate highs.

http://l1.yimg.com/bt/api/res/1.2/x93tHFi.Ofh5VNOfFWgyJw–/YXBwaWQ9eW5ld3NfbGVnbztxPTg1O3c9NjMw/http://media.zenfs.com/en-US/blogs/talking-numbers/Louise-Yamadas-chart-of-222-years-of-interest-rates.jpg

http://www.cbc.ca/news/canada/british-columbia/foreign-buyers-tax-exempt-1.3957470

http://vancouversun.com/news/local-news/b-c-premier-christy-clark-lifts-foreign-buyers-tax-for-those-with-work-permits

Isn’t this announcement what many on this blog have been saying all along? That people who are going to work here and pay taxes shouldn’t be subject to the foreign buyer tax? If it ever is implemented in Victoria, this should also be the case here. Good move by Christy – but of course, there is an election coming up…http://i.imgur.com/awVMC8g.png
Interesting timing also, doing it at Chinese New Year.

@ Mike

“I think what you’re overlooking is that interest rates tend to rise ‘slower’ than inflation, not faster.”

Even if rates rise more slowly than inflation it is irrelevant to the argument.

How does a family of median income with 5%, or even 2o%, down buy a house at the current Victoria median price, or anywhere close, if the mortgage rate is 10%? They don’t.

And remember, first time buyers earn less than older couples, because they’re less experienced, and because job opportunities are poorer now than 10 to 20 years ago. Hence prices will have to fall if rates rise substantially.

You seem clueless to the real world how most people hide bad debt and mostly from those with high incomes and educated as they have access to borrow more and take on more risk like Mike.

Except I’m not basing my observations on what you, I or my neighbour says. It is based on national stats. I grew up poor and have close relatives who are bad with money so I’m not unaware.

It seems to me that you are implying that the stats point to Canadians having done something exceptionally responsible with the current housing markets making them less vulnerable than would ordinarily be expected but I do not believe this to be the case.

Where do I imply this? I’m merely reporting the facts backed up by stats. Of course some of this is due to rising home equity – just like always but most recently at a faster rate than might be supported long-term. Don’t forget equity is only 30% of average net worth though so pensions and retirement savings have also risen in value as the next biggest asset and then unregistered investments.

As far as financial literacy goes, I strongly agree with teaching this in school. Math alone doesn’t cut it. There is planning 11 which includes a requirement to budget based on your first job, but this doesn’t go far enough. I’m in favour of mandatory investment and home ownership classes with modeling, including rent v. buy, the power of compound interest on assets and debt, and identifying different types of borrowing. I do this with my kids, although levels of interest vary greatly. My oldest is very interested now that he actually has some money of his own to put on the line.

The US crash was caused by people on the edge. The average home owner in the US was perfectly fine throughout the downturn. That has zero relevance to the extent of risk of a housing price correction.

Yes, and none of that was the point I was making. The only point I was making was that the average homeowner will be fine if prices crash in Victoria and they hold through it – just like the US in similar appreciation markets. Will they crash? I don’t know. Maybe. Maybe we’ll have another long slow period of price stagnation. Our borrowing rules are different than the US rules were and our mortgage products are different too. I don’t believe prices will go up forever in the short term.

At the top end of the market, people with capital may pay what they like for a house, but most of the RE market depends on first-time home buyers, who enable those moving up market to realize the capital gain upon which their new purchase depends.

Most of the RE market does not depend on first-time buyers. Seventy percent are not first time buyers. I’d say a segment of the market depends on this and they are linked to the ability to move up in that first time buyers can move up if they gain equity, but it is overstating it to say the entire market depends on them. I’ve read the opposite trickle down argument about the high end properties and foreign buyers and agree there is a correlation, but not primary. The whole system works together and each sub-market seems to have different variables. Really hard to evaluate what measure will have what effect imo.

CuriousCat, agree with you on the travel ban (nonsense, pure chaos just to appease his paranoid voters)

I tend to advocate for change anonymously, by donating or by volunteering quietly. The Trump administration has changed this for me. I find him to be outrageously dangerous to human rights and I’m actively looking for a way to put my skill set to work against normalizing that – and plan to be at any local protests.

Mikey, I already posted that in 1980 debt levels were 60%, now they are 167%. There is no room left to borrow. The crash is closer than the bong in your hand with Trump and his band of white supremists about to send the world markets into the tank.

“Clearly you meant to say “levitate” the housing market.

No Michael, you deliberately misquoted me. I said rising wages would mean inflation which will mean rising interest rates.

At the top end of the market, people with capital may pay what they like for a house, but most of the RE market depends on first-time home buyers, who enable those moving up market to realize the capital gain upon which their new purchase depends.

But the ability of first-time buyers to buy depends mainly on their ability to borrow. And while in an inflationary environment wages will rise, perhaps by as much as 10 to 15% per year, interest rates will rise much faster, perhaps as much as 100 to 400% over several years, i.e., from the present 2.5% to 5.0, 7.5 or even 10% and more. In that event, the housing market will come to ground as it did in the early 70’s.

Luke:

I will drive this week although I have driven through there a number of times. You are aware that I am from Toronto and that prior to moving to Victoria I lived in L.A.

I have driven the “Callwood crawl during rush hour before. Actually not very bad; long way away from being gridlock and traffic sure moves a lot better than either Toronto or LA. People in Victoria really have no idea what even heavy traffic looks like.

Mr. Barrister: I look forward to hearing how your drive up through the Colwood Crawl goes this week… ask yourself… would you like to do that every day? Make sure you leave downtown Vic at 4-5pm… 5pm is probably peak time. Then, you can turn around at the ‘Rabbit’ (Helmcken) interchange before having to venture too deep into the fringes… Langford is a bit scary 😉

I went to the open house at 2111 Kings Rd yesterday – small, around 1400 sq. ft rancher listed for $1,065k after selling just seven months ago for $802k! They’ve fixed it up, but I still spotted at least ten things wrong w/ it. At first I thought it looked like a quality house, but there’s hidden things everywhere that shout borderline… ‘crap box’. It does have a nice private garden and is on a very quiet street (one of those rare streets where kids still play hockey and basketball in the street). If you want to catch it, there’s another open house today at 2-4pm before they ‘look at offers’ tomorrow (and can you spot the hidden things?). The open yesterday was a frenzy of BC/Alberta/Washington plates. Then of course, all the nosy neighbours 🙂 I guess we’ll see if it sells.

This new listing today – at first glance it looks like a rare quality house in the core: 2312 Howard St in Fernwood for $1,150k. Bargain, wouldn’t you say? It’s only 1 block off both Bay and Shelbourne Street’s (these aren’t busy or anything), and it’s a corner lot. The ‘legal’ suite should get the CRA’s attention though… Tax tax tax – that’s the Canadian way!

Yes, I guess Trump will affect us and our real estate. Perhaps not all negative though? It’s clear, we will see an increase in Mexican tourists (Did you know their numbers were up 36% last year?). And then, there’s the American ‘refugees’ that may be coming soon, if they can find a way to do that. (hence the American plates at yesterday’s open house). After all, no where else in Canada, other than Victoria or coastal BC, has a climate that is remotely close to theirs.

we have one HOT market left and that is Toronto.

As Toronto finally corrects in a couple years, Victoria will benefit again à la ’90-’94 with a wave of Ontarian retirees headed this way. Not so different from the past couple years with Albertans.

http://www.torontohomes-for-sale.com/account/461083ac0e597a15/pages/2578_9.gif

And just to add to the Trump discussion, because I also believe it will affect our market, perhaps as soon as this spring/summer…

Isn’t it ridiculous that his travel ban doesn’t include any of the countries whose citizens were responsible for 9/11? http://www.smh.com.au/world/donald-trumps-muslim-ban-excludes-countries-in-which-he-has-business-ties-20170128-gu0ptl.html

-“Trump claims to be motivated by the horrific September 11 attacks on New York and Washington, but the countries of which the 19 aircraft hijackers were citizens are not on the list – most came from Saudi Arabia and the rest from the United Arab Emirates, Egypt and Lebanon.”

-“In the 40 years to 2015, not a single American was killed on US soil by citizens from any of the seven countries targeted – Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen – according to research by the conservative-leaning Cato Institute.

But the same research shows that in the same period nearly 3000 Americans were killed by citizens of Saudi Arabia, the UAE, Egypt and Turkey — most victims of the September 11 attacks.”

-“Also absurdly absent are Pakistan, Turkey and Afghanistan – all of them hotbeds of terror.”

Remember the reason why places like the Netherlands and Norway have such high consumer debt levels is because of mortgage debt. In the Netherlands, 30% have negative equity in their homes:
https://ftalphaville.ft.com/2016/06/16/2166258/why-is-the-netherlands-doing-so-badly/

“Residential mortgage debt outstanding was worth twice the total disposable income earned by households at the end of 2015” because of falling house prices.

In Norway, they have it because of unusually high house prices.

I agree that everyone needs a place to live, and owning has a lot of advantages.

But we also have to be realistic about how much people (especially younger folks) are encouraged to rack up too much of all kinds of debt (credit cards, HELOCs, etc) by the banks. I don’t know how many times I’ve been offered a LOC by the bank.

I don’t think it’s just because a person is young and inexperienced, or uneducated – I place a lot of the blame on banks and other businesses that are taking advantage of people’s inexperience to take out far too many loans or types of credit that they shouldn’t have. These businesses are trying to drum up more profits, but when things go sour, taxpayers are going to foot the bill.

Totoro: “In my opinion, if rates rise and house prices drop in Victoria most homeowners will be fine.”

Perhaps we are looking at the problem from different perspectives, totoro. It seems that you are looking at it from a regional perspective and you might be partially correct in your assumptions.

Nationally I am more concerned about the economy’s reliance on the FIRE industries. The impending correction/crash will create a very, very big recession.

“And Hawk, you can see this for yourself if you believe the past is the predictor of the future.”

The biggest problem with this statement is in the validity of it. Lol. Yes, each of the previous crashes worked out fine for a number of people and we all survived, one way or the other. However, it was decreasing rates that ultimately saved the day for the real estate market. The crash in the early 80’s resolved by a big drop in interest rates, the correction in the 90’s resolved by a big drop in interest rates.
http://www.tradingeconomics.com/canada/bank-lending-rate

Now, the experts … real estate/economists/banks etc. tell us that we have one HOT market left and that is Toronto. Why the other MAJOR markets are declining is immaterial. They are declining and with that decline comes the potential for big job loss. Interest rates will not be saving the day this time.

“Some newer owners will have a hard time paying but the new qualification rules should create some breathing room given you have to qualify at the posted rate.”

You are dead on albeit the majority of this market has already been baked in at lower rates. There is no guarantee on rising rates just a probability. What we are seeing is sentiment changing and perhaps the weight of this bubble collapsing on itself.

In my opinion you might be very optimistic whereas I may be slightly pessimistic. Hopefully everything falls right between our viewpoints.

“In my opinion, if rates rise and house prices drop in Victoria most homeowners will be fine. ”

Right, and if one family member loses their job then what ? Only took 11% of bad debt homeowners to crash the US market. I go by facts not opinion.

You seem clueless to the real world how most people hide bad debt and mostly from those with high incomes and educated as they have access to borrow more and take on more risk like Mike.

Household debt has exploded since 2008 and will be very different next crash/correction but keep your head in the sand.

Doesn’t take a mensa student to figure out that all debt will soon be bad debt when the bank shuts down your HELOC as extreme measures get implemented.

That is a blanket statement. I’ve never found them much good for understanding where your risk is or for making good decisions.

A lot of people don’t have a HELOC or don’t use it if they do. Although debt has risen so has equity – at a greater pace than debt. Debt to income has risen, but not debt to net worth.

I’m not advocating consumer debt – but 77% of Canadian debt is in mortgages and that seems to be what you are referencing.

In my opinion, if rates rise and house prices drop in Victoria most homeowners will be fine. Some newer owners will have a hard time paying but the new qualification rules should create some breathing room given you have to qualify at the posted rate. I agree with this change, although we certainly benefited from the old rules when we started out.

House debt will still be good debt if the market changes, you’ll just have to be able to wait out the downturn. And Hawk, you can see this for yourself if you believe the past is the predictor of the future.

It would appear that your assumptions might be a little off base totoro.

What assumptions? This statement?

Also it is generally non-homeowners who have the most difficulty with consumer debt.

I’d agree new homeowners who then rack up consumer debt might have difficulty paying their bills.

Those with home equity have an advantage over those without including renters without other investments to access to consolidate a loan. Banks don’t just give out consolidation loans or personal lines of credit without credit and income to pay and if you are having trouble paying a lower interest unsecured line of credit becomes more difficult to obtain.

Given that 70% of Canadians are homeowners and about 50% have no mortgages there is a lot of equity to backstop debt. Most renters are not in this position as they don’t have the “meaningless” home equity to help them out if they get into difficulty.

When we look at insolvency stats we see that 72 per cent of the overall insolvency debt is unsecured without collateral – ie. not mortgage debt and not a HELOC or car loan secured by an asset. The fact is that most of those who file for restructuring or bankruptcies are renters who get into trouble with unsecured debt – they make up 79 percent of those who reach this stage of difficulty with credit.

The average owed by an individual filing for bankruptcy was just over $92,000, while the average owed by an individual filing for restructuring was approximately $115,000. Given that the average debt per household in Canada was approximately $56,700 ($79,368 for homeowners and $10,420 for renters)4 during the same period, it is evident that the amount of debt held by those filing for insolvency is substantial. This high level is surprising, since a large percentage of individuals who file for bankruptcy are renters and, therefore, do not have a mortgage.
http://www.bankofcanada.ca/wp-content/uploads/2012/02/boc-review-winter11-12-allen.pdf

In my view there is good debt and bad debt. Good debt is borrowing the has ROI and grows your net worth. Bad debt is borrowing for things like vacations and consumer items that result in a decrease in net worth.

Housing is usually good debt IF you can hold your home for at least seven years and through a market downturn or rate increase. There is risk in everything, but the risk in mortgage debt is early in with divorce, addictions, health issues and job loss and the risk diminishes as equity rises. The risk with consumer and unsecured debt compounds over time at a higher interest rate with no asset growth.

I know the article was posted but I thought I would do it again for those who missed it:

http://www.canadianrealestatemagazine.ca/news/bmo-overseas-buyers-mainly-responsible-for-toronto-victoria-price-growth-220279.aspx

I sincerely believe it is prudent for a foreign buyer tax to be implemented before the spring. 15% is too low.

That’s probably true as home owners can consolidate their credit card and other debts into their home mortgage while non home owners can not.

If they have enough equity and a high enough credit score.

Again, a reason why equity is not meaningless if it is saving you 18% interest on credit card debt.

We all just know what we know based on what we do and the people around us do. The stats are more reliable I think?

If you were bad with money matters before you bought a home chances are you still will be bad with money after you bought.

Maybe, but financial literacy is negatively correlated with factors like lower income and lower education levels and younger ages. These things change over time and houses require budgeting. If you have problem spending or addictions that might not change.

Totoro you also mentioned that non home owners have higher consumer debt than home owners.

That’s probably true as home owners can consolidate their credit card and other debts into their home mortgage while non home owners can not.

Financial literacy does not occur when you buy a home. If you were bad with money matters before you bought a home chances are you still will be bad with money after you bought. Except you might be a little older and a little wiser.

Vicbot you are quoting the 2011 statscan report to counter the newer 2012 statscan report from which I pulled the statement quoted?

Leo, I’ll give you credit for sticking to a position when you don’t want to be moved from it.

You are ignoring the many people that downsize. Even if they stay in their home a long time the surviving spouse might go into care – quite often – like both my grandparents and probably yours or those you know of. Cash is helpful for this.

Or those that do sell and downsize and rent – or become a snowbird – and someone has to be filling all the retirement condos and complexes – and then there are those who cash out and full scale move to ex. Mexico to retire where they can live well for 2k a month:
http://www.theglobeandmail.com/real-estate/mortgages-and-rates/time-to-sell-my-house-and-rent/article10465869/

A recent study shows 56% of Canadians are considering downsizing their home in retirement.
http://business.financialpost.com/personal-finance/mortgages-real-estate/canadians-close-to-retirement-getting-tempted-to-sell-new-data-suggests

The StatsCan report linked to this study which said:

” family type was no longer associated with having a high debt-to-asset ratio or a total debt service ratio of 40% or more …
Factors associated with having a high debt load or a debt-to-asset ratio of 80% or more included being born outside of Canada, having lower levels of household income, and living in a CMA [Census Metro Area] with high housing prices. Not surprisingly, people aged 50 to 64 had lower odds of having high debt ratios in all three metrics than younger Canadians.”
http://www.statcan.gc.ca/pub/11-008-x/2011001/article/11430-eng.htm

Hello foreign buyers tax. BMO says it’s time.

http://m.canadianrealestatemagazine.ca/news/bmo-overseas-buyers-mainly-responsible-for-toronto-victoria-price-growth-220279.aspx

Trump might put upward pressure on real estate here. It’s not like the US is creating a welcome environment for immigration. Tech firms are going to hire outside the states to hedge even more. My friend at MSFT was telling me that their presence in Van facilitates difficult to immigrate people.

Totoro, I guess that is some comfort however, the rules also state that you still have access to 80% of your equity, but the remaining 15% must be in the form of an amortized mortgage where the monthly payments are principal + interest.

This should have slowed usage down but the bigger concern is consumer spending. I personally know 2 friends that tapped into their equity to purchase “retirement” homes in Arizona. I’m sure that this is quite prevalent as Canadians were the largest foreign purchasers of real estate in Florida and Arizona for several years.

As you noted on home equity value, both of my friends were mortgage free on homes that are probably worth $800,000 and $750,000. today (my estimate). The problem is they were worth around $900,000 (their estimate) when they pulled that equity out.

One of my buddy’s big plan was to sell his home for $1.5 million, payoff the “retirement” home and then retire comfortably on the remaining $1.3 million.

He’s 63 now and holding on to a market “that will turn around in the spring”. He doesn’t have a pension. Savings are limited to less than $100,000 in RRSPs. His house is his retirement so I am actually pulling (against logic) for this market to turn around for him.

My other buddy is very well off so I don’t think he has any real concerns. Full federal pension and plenty of investments … other than real estate.

The only consolation to my first friend’s dilemma is that he probably made money on his Phoenix place.

Totoro:
I gave others including this very common occurrence at which equity is realized and usually redeployed. Equity is not meaningless for the average Canadian: it is their biggest safety net and retirement cushion.

Unfortunately Totoro, it doesn’t seem like the majority of Canadians follow your example of intelligent equity deployment…and this is 5 yrs. old. Ouch. I don’t really want to know what it looks like today.

http://www.bankofcanada.ca/wp-content/uploads/2012/02/boc-review-winter11-12-bailliu.pdf

“In this article, we have examined the relationship between the accumulation
of household debt and spending on consumption and home renovation. We
find that increases in home-secured debt, particularly home-equity extraction
(increases in mortgage debt and draws on HELOCs on existing houses),
contributed the largest share to the rise in total household debt in Canada
between 1999 and 2010. Moreover, we show that a significant share of the
funds borrowed against home equity was used for consumption and home
renovation. These findings suggest that household indebtedness constitutes
an important source of risk to household spending, since it makes households
more vulnerable to substantial negative economic consequences in
the event of a correction in house prices.”

No, house equity is meaningless because I will never access it (unless we leave Victoria).

Yes, Leo’s equity is meaningless as long as he stays within Greater Victoria’s 696 km² and doesn’t relocate to anywhere else on Earth’s 510,000,000 km².

I get you Leo. It is still a reminder of what you saved by not waiting any longer. Plus you never know…. it might come in handy when you look to renovate or buy that condo on Mount Washington….

Wow – lots happens on this blog in 24 hours.

Thank you Marko for the stat’s on listings/sales and what the average over asking price is.

Unfortunately, oopswediditagain, on realtycheck.ca it doesn’t show what places sell for, just weather or not they were reduced or increased. As I said before, a quality home will have much more interest than a crap box. And, while you may have bought and sold 2x the homes as me (and maybe are 2x the age?) and lived in the Lower Mainland more than 2x as long (sorry you had to endure that), it doesn’t really change the fact that Victoria is not Vancouver.

Barrister: I encourage you to dust off the Range Rover at 4pm on a weekday, and take a drive up Douglas St, and then on to Hwy 1 out towards Langford. Yes, ‘the Colwood Crawl’ may not compare to nightmare commutes in Ontario, or Metro Van for that matter, it’s still an awful lot of sitting there and stopping and starting and crawling along at a snails pace. If anyone thinks its going to get better with all that growth in the Westshore (and not as much in the core where it should be), then I think – think again. The McKenzie interchange may help the afternoon rush, but not so much in the am.

As for all this talk about Trump – isn’t this a blog about housing in Victoria? Aren’t there other blogs (i.e. Reddit) where Lefty liberals worried about Trump can banter. That said, I did enjoy the Bill Maher video.

Thanks for keeping it interesting everyone!

Trump has upset the tech industry in spades, this won’t end well as tech workers with green card and visa holders working from the banned countries are screwed. So much for the friendly round table job pump.

Google Tells Offshore Staff To Return To The US After Trump Executive Order

http://www.zerohedge.com/news/2017-01-28/google-recalls-offshore-staff-us-after-trump-executive-order

Looks like some much needed inventory is trickling into the marketplace in the last few days. Quite a few homes like 870 Roy Road which is what the demand is highest for.

There is also finally a listing in the Oaklands area at 1524 Pearl.

Actually house equity and other RE equity only make up 40% of the median net worth of Canadians. The next biggest part of the net worth is in private pensions at 30% (includes employer and RRSPs). That leaves 30% other. Most of the rest is in vehicles and mutual funds.

However the total median net worth of Canadian family units including over 65 is only about 500k – and less for those under this age. Barrister is definitely in the top 1% if his multi-million dollar paid-off home is 15% of net worth. It is not the norm to have over 10 million in net worth in Victoria.

What changed in a few short years?

The media & bears rang the bell of course – Macleans, GT, Rabidoux, Macbeth, Kay, Saretsky, Madani……………

http://i.imgur.com/RJkqWFK.png

You’ll know it’s time to sell in the 2020s when they’ve all finally bought and magazine covers show someone hugging their house with a rainbow shooting out their arse 🙂

CS – Is this OK with you?

Hawk, Vicbot – Thank-you !!!

This news seems to be slipping in under the radar:

“Privacy safeguards relied upon by Canadians have just been stripped away. Trump just signed an executive order eliminating Privacy Act protections for foreigners. This means as of right now, all your personal, sensitive information has no legal protections in the U.S.

Every day, the data of millions of Canadians enters the U.S. by Internet traffic being routed through the U.S., or by our own government routinely sharing personal information. You don’t need to have done anything wrong for your most personal information to be revealed, and you will likely never know what has been shared.” — via Open Media

And this is still only Week One.

That Fault Lines podcast is eye opening and quite terrifying. It is so unsettling to know that we are just clacking away in Victoria arguing about real estate while sitting on a time bomb. At the same time, we can’t live every day in fear and expectation. We need just to be prepared for the inevitable as best we can.

On another note. Has anyone heard of Ross Kay? I am not sure of his credibility but his confidence in his reports do intrigue me. Have a listen : http://www.howestreet.com/2017/01/23/trump-numbers-vs-real-estate-numbers/

I listened to him back in August on howestreet when he was stating a correction in Vancouver had started at the beginning of the summer, even before the foreign buyers tax. He was the first and only to report this. Looking back at the numbers he seems to be correct.

Also, on twitter, a twitterer stated that ‘no one seems to know when Victoria will turn (start correcting)’ and he replied ‘it turned months ago’.
I’m curious how he has come to this conclusion. Does anyone have a ‘membership’ to his website?

“Why is it that anyone who doesn’t believe the myths of the Clintonite liberal-left is almost always designated a hater”

Because this isn’t about left vs right. Nobody gives a shite about the parties. It’s about the survival of the human race (it’s plain ignorance and insanity to talk about “nukes” or OK torture on Twitter, or force scientists to go underground to communicate the results of their work).

“Hawk doesn’t actually know anything very much about Trump, he only knows what Hillary supporters, Vicbot and Women’s March supporters in “pussy hats” have said about Trump.”

So you’re sayin’ that I have control over Hawk’s mind now. Wow that’s power 🙂 I guess they’re in good company with most US intelligence offices & most US companies (eg., Buffett, Gates, Zuckerberg), or union boss Chris Jones who called him a liar, or even Canadian universities, Target, Kellogg, & 750 other companies that are pulling ads out of Breitbart (the pride of Trump’s chief of staff).

CS ,

Sad to see a Canadian blinded by hate to not see what Trump’s whole life has been about. Greed ,jealousy,envy and hate. This is just getting started, wait til the til the taxes get hacked and the videos leak out. They’re coming.

So pussy grabbing is an approved practice too ? Wow, that’s sick.

@ Intro:

“Hawk is wrong about everything except Trump.”

Hawk doesn’t actually know anything very much about Trump, he only knows what Hillary supporters, Vicbot and Women’s March supporters in “pussy hats” have said about Trump.

Not that I know much about Trump either, but if we are going to be irrelevant, let us at least be factually correct in our irrelevance.

@ Vicbot:

” I think most of the planet agrees with you (eg., the large US city mayors rejecting Trump’s illegal policies ….”

Most of the planet, perhaps, but as of today, “55% of Likely U.S. Voters approve of President Trump’s job performance” Rasmussen reports.

http://www.rasmussenreports.com/public_content/politics/trump_administration/prez_track_jan27

If there are a large number of people here who are saving up for a downpayment I have an idea for a little extra revenue. We hire Barrister to begin a class action suit against Hawk for repetitive strain injury, inflicted by hours of scrolling past his incessant and vapid posts.

Solid idea.

BTW, Hawk is wrong about everything except Trump.

“one week of silencing the scientists, killing women’s rights, promoting racism, corruption and narcissistic pathological lying is enough for anyone I hang with.”

Agree, well said. I think most of the planet agrees with you (eg., the large US city mayors rejecting Trump’s illegal policies, bizarre “alternative facts” claims, his repeated dismissals then about-face on the CIA, and the Netherlands setting up a fund to counter Trump’s actions that affect the poorest women in the world). It’s the end of America’s strong standing in the world – which unfortunately will negatively affect our economy.

Here’s the Netherlands point of view 🙂 http://www.youtube.com/watch?v=ELD2AwFN9Nc

Jerry – Hawk can afford a class action lawsuit. His portfolio was up 500% last year. He still can’t afford a house though, strangely.

@ Hawk:

Impeachment won’t come soon enough as the Russian connections get uncovered.

LOL. Confirming that there is no evidence known to Hawk concerning the alleged Trump “Russian connections.”

But we do know that Hillary and Bill and their associated foundations have “Russia connections.”

https://www.nytimes.com/2015/04/24/us/cash-flowed-to-clinton-foundation-as-russians-pressed-for-control-of-uranium-company.html?_r=1

So, if corruption is the criterion, Americans picked the right candidate.

@ Introvert:

Does anybody use UsedVictoria.com anymore?

Yes …the other day bought a rocking chair advertised there — very comfortable. Now I can while away my last days here in OB in the utmost contentment, without any further thought of selling my old shack to a philistine developer intent on building a 6000 square foot monster home for some nouveaux riche foreigner with hot money to hide and absolutely no taste.

Toronto up next, Victoria will feel the heat soon enough when the tide eventually goes out. No fad lasts forever.

Canada’s biggest bank warns of possible cooling measures coming to Toronto housing market

“Royal Bank of Canada warned on Thursday that policymakers are more likely to introduce measures to cool the Toronto housing market after home sales hit a record high in 2016.

“The likelihood of policy intervention to address housing risks in Toronto is increasing,” economists at Canada’s biggest bank said in its January Canadian Housing Health Check.”

http://business.financialpost.com/news/property-post/canadas-biggest-bank-warns-of-possible-cooling-measures-coming-to-toronto-housing-market

“As for Trump… give him a chance people. ”

We did, one week of silencing the scientists, killing women’s rights, promoting racism, corruption and narcissistic pathological lying is enough for anyone I hang with. Impeachment won’t come soon enough as the Russian connections get uncovered. Hard to believe anyone can side with that psychotic bullshit whose trying to destroy democracy.

That could support my “home owners being responsible for home inspections” argument. It’s such a snowball effect of people who are cashing in on this, it is ridiculous.

I just bought a condo. A house and a duplex in my price range popped up today and I got a little discouraged. But then I remembered that if they aren’t complete shit they will be bid up $50,000 or more. So they aren’t really in my price range…

1521 Arrow Rd for almost a million. Yes, WOW!

Even the outskirts are taking off. 3738 Ridge Pond out on Happy Valley Rd. Sold new for $600k. 5 years later (2014) it sold for $585k. Now sold for $705k.

The situation, in my opinion, is worse than at any point last year. Sales are obviously down but the interest on any semi-attractive property is insane. Quantity of offers seems to be similar to last year but the percentage that are unconditional seems to have increased significantly.

I was involved in one last night where four parties had the home pre-inspected/scanned for oil tanks, so that was four unconditionals at least.

The unconditional offers are saving me a bit of time. I’ve adapated the practice of emailing the listing realtor, “how many pre-inspections have you had,” and when I receive the answer I forward to my clients and most just don’t end up writing. No point really, either you are competiting against an unconditional offer or the house was total crap and the party that did the inspection is pulling out.

That’s why I hope that we can build more duplex/triplex style housing – barriers to this might include city councils or developers

In my opinion we could increase density in the core by just rezoning all the 50×110 lots into R2 and change the offset from 15′ combined to 10′ combined. Each side could then be 20′ wide, single car garage, you would have a bit of a yard for your dog to run around and you could do 1,800 sq/ft finished or so on three levels, what more do you need?

No strata fees, no bylaws, no bs, other than a bad neighbour.

Facebook

Go to Facebook search Victoria Buy and Sell. Lots of pages become members in the ones with huge membership.

Luke: “As I said before, the mainland is not Victoria (I would know I lived there for twenty years and its 10x better over here – but lets not let the secret out!”

Well, I’ve lived in the lower mainland for over 50 yrs so I guess I know a little bit more. lol. It sounds like you just missed the market correction in the early 90’s and definitely in the early 80’s.

The market on the mainland for this real estate run-up is absolutely no different than the previous markets and crashes. They were all characterized by stupid price increases. My first house went from $48,000. when I bought it in 1980 to $108,000. in 1981.

I’ve bought and sold over 6 homes in my lifetime and guess what? The real estate agent’s patter has never changed. We have another offer on the house!!! If you truly want it then you had better increase your bid. The most interesting thing is …. who knows if there is another bid. In a hot market there’s always another bid … right?

The biggest difference today is the ability of unscrupulous marketers and real estate agents to manipulate public opinion through social media. Foreign buyers was a huge meme that drove even more fomo with the buying public.

Yes they were a factor, but what middle class person would give two hoots about a mansion selling for $1,000,000 over asking. There is no trickle down effect. People selling those multi-million dollar mansions weren’t heading to the suburbs and overbidding houses.

Sentiment is the only factor that drives these kind of bull markets…period. If you believe or you are made to believe that you had better buy now or be priced out forever, then you buy. Helicopters flying over White Rock (proven scam), lineups for condos (paid to stand in line) were all factors in scaring people into buying now. All of this abetted by the media.

How about the mortgage broker’s contribution to this market. “A group of 45 brokers suspended by Home Capital Group Inc. for alleged mortgage fraud generated nearly $2-billion worth of outstanding mortgages for the lender, twice as much as executives originally estimated, the company revealed Wednesday.” http://www.theglobeandmail.com/report-on-business/home-capital-brokers-alleged-fraud-bigger-than-estimated/article27110594/

Those are just the ones that were caught.

How about homes/townhomes/condos being sold based on monthly payment. You couldn’t pass a development without seeing the monthly payment advertised. Not the price.

Every city’s market took off after emergency rates were enacted, in conjunction with extremely loose qualification standards.

How about if you tighten up all of those qualification standards that were enacted …. oops, less buyers.

Conversely, if the public believes that the “chinese buyer” is no longer a factor so prices might actually go down, well, now all of a sudden, sentiment changes. Voila. Dropping prices.

The most interesting part of that interesting site is that every city is seeing dropping prices. The crap that you see there in Vancouver is crap that was going for over asking last year and the year before. There is change in the wind and you had better be able to withstand the change in the tide.

Below grade basements are common because the zoning encourages them. In Victoria, you can build ~2550 square feet at grade or above max (depends on the zone, but this is for RG-1). If you want more than that, you must build it at least 4′ below grade – and then you can add an addition 600 sq ft. In Oak Bay, area at or below 1 meter below grade is exempt.

It’s a little silly because if you look at the outer shell of the structure (using setbacks and height regulations) you could easily fit all the required area at grade or above – but zoning won’t allow it. This is why so much area is put underground.

Also, per a comment below about using rigid insulation as a water barrier, you should use ‘dimple board’ or ‘drainage mat’, not rigid insulation. This provides a full drainage plane against your foundation walls.

As for municipalities pushing for higher density housing in place of large SFH – they do slightly. They offer incentives (5k) to put in a suite. To put that in perspective, it wouldn’t even cover the cost of the additional water line/meter required, which is now >6K. Want to add a storm water connection? That’ll be 9K please. I currently do not see it being financially worth it to put in a suite, since you need to excavate to get the extra floor area, extra concrete, extra water and service requirements, extra fire-proofing and sound proofing, second kitchen etc. It would take a long time to break even.

@Andy7, also changed was the green rush, exodus from Alberta. Then it’s simply that buying begets buying….

The thing I find interesting about the Vic market is just a few years ago a builder friend of mine couldn’t sell his properties, and ended up having to move into one of them as a result. Now, they’d be gone in a flash. What changed in a few short years?

The only thing that I see that really changed was the Van market went nuts and that impacted other markets and people left Van in search of more affordable properties elsewhere (Fraser Valley, Sunshine Coast, Squamish, Vancouver Island). Possibly a foreign buying element as well. If I’m missing something here, by all means let me know…

965 Byng probably is full of drainage issues as it has so many untouchable oak trees in front. It’s also a very small older home. Also, the grade slopes towards the house. In short- it’s a crapbox and even in hot markets crap boxes don’t sell. Binab has his work cut out selling that one.

To answer Barrister… I meant the future in the core is not sustainable if the majority of people can’t afford to live there and raise a family. If we are forcing these people to be condemned to long commutes to the Westshore instead of changing zoning and planning mindsets to offer more diverse housing stocks in the core, then the future is only sustainable for those who already have a lot of money.

While there may well be dips in house prices , even in the core, the long term trend for SFH, ESP quality SFH as these are so rare, will always be up so long as population continues to grow and the number of SFH in the core will not increase.

While families may not want to live directly downtown. You can bet Fairfield, Fernwood, Oak Bay and other areas near the core are very desirable for many families. It’s totally true though, similarly to Vancouver but unlike European cities, we do not offer families many welcoming options in the core. There needs to be more diverse types of housing in the core that would appeal to families. But this will take a mass transformation of the mindset of our 13 fiefdoms, zoning bylaws, and planners. Can you see it happening?

1521 Arrow Rd for almost a million. Yes, WOW!

people talk about multi-family dwellings but really most of the units in condo buildings are for singles and couples and possibly one child families. If you have more than one kid, it is hard to find three-bedroom units and they are as expensive as SFH outside of the core. I don’t know of many families who want to raise their kids in downtown Victoria. At least, I wouldn’t. What I would like to see is more three bedroom or four bedroom units/townhouses outside the core.

… this page is a wealth of information (and occasionally amusing drama).

So true.

Luke:

Can you be more specific as to what you mean when you say a more sustainable future to be possible.
I would like to be clear as to exactly what you are saying. Approximately how much population increase for the core are you suggesting, an extra 10,000 or an extra million? I am trying to get a clearer picture of what you are saying?

Earlier today, on CBC Radio’s All Points West, a guy from CMHC was on the show, talking about Victoria’s situation. I didn’t catch all of it. The segment doesn’t seem to be available online.

One of the things that really struck me the most coming to Victoria was many of the homes have driveway’s that slope DOWN towards basements. I could not understand why Victoria had such rampant development of this type which seems to stem from the 1950’s mostly. It defies logic.

This obviously will lead to more drainage problems in the future and with climate change apparently ramping up… I know Victoria only get’s 1/3 the rain of Vancouver but still… it boggles the imagination…

When hunting for our house we were determined NOT to buy a home with a driveway that led DOWN slope towards the basement, and there were so many homes like this it defied imagination, so in early 2016 it made our search that much harder. Thankfully, we were able to find a home that did not need a sump pump and actually had drainage that sloped DOWNHILL… away from the house!

As for Trump… give him a chance people. I had some thoughts that he might actually be a good thing for US/UK/Canada?? The Mexico wall thing is ridiculous, but revisiting China on trade…? Can you or I find things that aren’t ‘made in China’ anymore? Does that need to change?? Sit back and have a think about some of the things he says because while not everything makes sense some things actually do…

You would think that the overall CMHC score would be a weighted average of the other scores. But that’s clearly not the case. It suggests that there is some other element, perhaps a more subjective evaluation, that is thrown into the mix. It does look a bit strange, and it undermines their credibility a little. They should publish the scores and the thresholds.

Is there an online map that shows the depth of the water table across the CRD?

I have a question:

One of our rental properties is about 20 years old. No signs of water in the basement, or any water issues at all. Should we get the perimeter drains checked out? We have no record of them being checked before our purchase.

gwac:

Your clay solution working is as much a grading issue as it is placing an impermeable layer (clay) to prevent water penetration through the surface.

Grading alone won’t work if you have gravel fill next to your walls.

Just a short comment on the drain issue (great synopsis by the way). Up until the 1980’s roof drains were directed into the perimeter drains (known as a one pipe system). It wasn’t until later in the 80’s that a two pipe system became common. This involved a second system to take the roof water to a point beyond the house where it could be connected into the storm drain system. I mention this because the roof water is often the culprit when it comes to flooding. Consequently it can often be a lot less expensive to put in a second solid pipe system that diverts the roof water away from the house and downstream of the perimeter system. This solid pipe system doesn’t have to be buried down at the base of the foundation and doesn’t have to be right up against the house. So you can avoid some of the expensive digging. I often suggest people do this first before digging up all of the perimeter drains. Sometimes (often actually) it can be the cure.

I thought of James Bay being like the West End; Fairfield a bit like Kitsilano, Rockland like Shaughnessy, Oak Bay a bit like the West side, Fernwood like Mount Pleasant, and so on….

Pandora of course corresponding to the Downtown East Side. I live in Fairfield and I occasionally tell people it is the Kitsilano of Victoria. Bit of a stretch though. Cook Street Village isn’t quite as trendy as 4th ave.

Never had an issue in Victoria. Everything slopes away. In another province. 1940`s house, foundation block. I was told there maybe a moisture problem. Unfinished basement. First week 3 inches of water. I called the inspector. He ask me if I wanted the expensive solution or cheap. I said cheap. Get 2 yards of clay and a yard of white stone. I put clay around the perimeter of the house foundation so nothing sloped into the house foundation and put the white rocks as decoration on top. 50% of the House. $125, never had water issues after that and looked good after a bit more landscaping.

Moral of the story try to find away to not have the ground sloping into your house.

Declining Vancouver is stuck— we need more housing supply

http://www.vancouverobserver.com/opinion/declining-vancouver-stuck-we-need-more-housing-supply

@VicRenter our house in VicWest was built on a rock with a slope. Perimter drains were long gone. Some down spout diversions and some proper sloping and there were no general moisture issues. When we did get flooding from the driveway sloping down before diverting the one downspout. Much better now but that one side could need doing (not my problem anymore) Water would at least just go out the back door of the basement if it started coming in unchecked. Benefits of being on some high ground…. Anyway, after first buying it I had my own all night battle with the floods armed with the shop vac. Fun stuff. I felt better the next day hearing stories of basements filling up with water! At least my water was just passing by!

Thanks for the opinions re: sloped bedrock. How effective is diverting the downspouts 6ft from the house vs having perimeter drains? I’ve noticed a few places I’ve looked at that have done this.

Thanks for your post. We, knock on wood, haven’t had a flood. One thing to keep in mind with water damage though is to check your deductible. Often it is quite high for this type of damage as it is a frequent claim. My parents had a big one and it took ages to process the claim and do the work and their deductible was $2000.

I know it shows a problem has been addressed, but I’ve always avoided homes that have sump pumps. We travel a lot and the last thing I’d like is to be away when something goes wrong with it – they don’t last forever – and then have to deal with the damage. A solution that includes a sump pump is good if you are comfortable with it, but it may impact your home on resale as it is not as worry-free for a new homeowner as perimeter drains. Maybe the impact on resale is less than the cost to install perimeter drains when you have to rip up new patios and walkways though…

I remember looking at a partially below-ground unit in a converted triplex in Fairfield – it had an in-house sump pump! Like a covered hole in the living room floor. Lifted up the lid and there was water in the bottom. Not to mention the fireplace clean-out for the upper unit was in the bedroom… Or the kids running around overhead on the poorly insulated floors… Or the fact that there was no off-street parking as required by the City and in the plans, as the upstairs owners had converted it to a deck with raised beds and play area for their use. And street parking for a triplex was not permitted – only duplexes and SFHs.

I’m surprised the CMHC had it in them. Given the last report we seemed similar to Moncton NB, I was wondering if any of them were even talking about Victoria or if they were, how they could arrive at such an assessment.

“CMHC does a complete flip flop on Victoria moving the rating from Green (no problem) to Red (high alert) in one quarter. Clearly conditions didn’t change that drastically in 3 months so this is finally an admission that their previous reports were a joke”

Agreed LeoS, it was a total joke 6 to 9 months ago or more but the pumpers like Mike and those in the bizz who troll on here kept pumping out (and still do), that we’re the greatest place on earth and oh so cheap.

Wake up time, it’s ripe for a crash as Adolf Trumpmeister keeps spewing out the strange voices in his head on an hourly basis.

CBC’s article on CMHC report:

http://www.cbc.ca/news/business/cmhc-market-conditions-1.3953358

“”Price acceleration in Vancouver, Victoria, Toronto and Hamilton indicates that home price growth may be driven by speculation as it is outpacing what economic fundamentals like migration, employment and income can support,” said Bob Dugan, the agency’s chief economist.””

Leo – makes you question all their reports, doesn’t it?

One more thought about neighbourhoods. As a transplant from Winnipeg, my thoughts regarding Victoria are that there aren’t any bad neighbourhoods. In Winnipeg there are entire sections of the city that people would avoid and be scared to drive down, let alone walk! When I moved here I asked people which areas I should avoid, you know, the ones that are “dangerous”. The only response I got was that Esquimalt was kinda “scuzy”, so I had this idea originally that there were gang members in Esquimalt and I better avoid it! Well, after reading the TC for a few months and not seeing anything about murders, home invasions, stabbings, gang wars, I realized people here had a very skewed idea of what a “bad area” means. I started to explore more of the city and was shocked that pretty much every area I felt safe. Fast forward 15 years and sure, the downtown has deteriorated a bit, but it still isn’t scary for a city of this size.

A couple years ago my cousin from Wpg was here for a visit and the night before she left she wanted to have a “girls night”. It was a Thursday in August, we went downtown for dinner and then walked pretty much from the Inner Harbour to Chinatown and back afterwards, snapping photos of everything, being silly… and we never felt “unsafe”. We actually marvelled that the streets were actually kinda deserted after 10pm and nothing much was open. The clubs are pretty much on the outskirts of downtown and only a couple pubs were busy enough to have people spilling out of them. All in all, very tame. (In many other cities, walking to your car after dark after dinner can suddenly make you go, omg what was I thinking?? while you clutch your purse by the straps ready to swing it, giving yourself a mental pep talk that yes you CAN stab someone with your keys if you have to.)

This to me, is what makes Victoria stand out. The scenery, the climate, that’s just cherry on the icing.

Just out of curiosity, anyone have an opinion on how likely it seems that a house built on a slope on bedrock might have or avoid water issues?

In response to Barrister’s question in the last post, I think the Gorge/Tillicum area will continue to be an area that is accessible to the middle-class, simply because of the age and size of the homes. Most of the housing stock here are built between 1920-1960 and are 2 beds/1 bath up over a < 7′ basement or crawlspace. One thing I noticed driving thru the neighbourhood is that there are “nice” streets and then “not-so-nice” streets (cars parked on front lawns being a pet peeve of mine). However as more families start to move in (being that this is the only place they can afford in the core), the homes are being fixed up, the yards are being cleaned up, and the rif-raff are moving on.

The example of the house sold on Donald St I think demonstrates that the “floor” to enter the SFH market in the core has been raised. I think 2 years ago, this home would not have sold for more than $460,000.

Another home that just came to market, 569 Hurst in Glanford is a 2 bed/1 bath, 1035 sq ft home on a crawlspace with a detached garage, listed at $535,000. In terms of housing stock, this is probably the bare minimum for a family to squeeze into if they want to be in a SFH in the core. This is why I keep an eye on these properties, vs. the crazy $1.5 million homes in Oak Bay. I think the bottom rung tells more of a story regarding the market here.