February 6 Market Update

Weekly stats update courtesy of the VREB.

February 2017
Feb
 2016
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 119
772
New Listings 152
1160
Active Listings 1502
2562
Sales to New Listings  78%
67%
Sales Projection
Months of Inventory

3.3

Big divergence in the charts from last year.   Months of inventory dropping quickly while sales to list increases.  Usually the sales/list ratio is lower in the first week and climbs throughout the month because of all the listings that expired being relisted.

Fairly strong week of sales although it’s too few days to come to any conclusions about that.  Sales rate is up and new listings down so that’s not a great sign for any house hunters this spring.   Inventory has hardly built up at all from January and with a 78% sales to new list ratio right from week 1, it doesn’t seem like we are going to be building up much of anything unless the market softens significantly.  Maybe all this snow will scare people away?

 

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333 thoughts on “February 6 Market Update

  1. Bearkilla, the answer is yes and no.

    There is no universal sale to assessment ratio because the neighborhoods have appreciated differently. Yet if you were to look within a half or one kilometer radius of your home then it is possible to come up with a sales to assessment ratio for the typical house in the area. Or if more was known about your house like its age, house and lot size then it’s possible to get a good idea of what the sales to assessment ratio is for your type of property.

    One could even plot the sale prices against the livable floor areas of similar homes to yours and then using regression analysis interpolate a price per square foot rate applicable to your home.

    One could even create a House Price Index for a property with your house’s specific physical aspects. Make that the benchmark home and track that benchmark. In that way you would only have to look up the factor in the future. And as long as nothing substantial about your home has changed over the next few years you could apply that factor to your base price and have a quick estimate.

    But someone would have to be a really really nice person to do something like that for you.

  2. I’m still leaning towards building but if an HHVer is interested I’m looking for 785K, private deal only,

    If I get a buyer to pay me out of pocket would you still consider that private?

  3. In case there are any hunters interested in a private sale, I’m thinking of selling my current place. I currently have plans in to the city for a new SFH which should come back in 6 weeks or so. Would be the first single family passive house in Victoria proper.

    House is located on Cowichan street on a 6370 ft2 flat lot (West facing back yard). The house itself has a 6′ on-grade basement ~700 ft2 and a 750 ft2 upper. My kids have definitely done some cosmetic damage to the place so it could use an interior paint and ideally some new windows, but it’s not too bad. Still have the inspection report from 5 years ago when I purchased, and the place is clear of any asbestos / haz materials.

    I’m still leaning towards building but if an HHVer is interested I’m looking for 785K, private deal only, and I’m only mentioning it in this post. Leo has my details so you can email him (contact info on this site) and he can put you in touch with me. Maybe if there are more than one interested party we should try out some new transparent sale system…

    Email me at leo.spalteholz@gmail.com for the hookup - admin

  4. ICYMI while too busy counting all those make believe paper profits, it’s time to dump ASAP. 😉

    ‘The housing bubble has burst’: Economist warns market imbalances are threat to economy in long run

    ““The largest banks are now being strongly advised by OSFI, the federal banking regulator, to bolster their working capital base for their own protection,” write Madani.”

    http://www.vancouversun.com/housing+bubble+burst+economist+warns+market+imbalances+threat+economy+long/12887647/story.html

  5. Other changes that haven’t received much attention but may interest most working people:
    Bill-C26 received Royal Assent. http://www.cra-arc.gc.ca/gncy/bdgt/2016/qa14-eng.html
    Highlights include:

    Increase CPP retirement benefits from 1/4 to 1/3 of pensionable earnings

    Increase the maximum pensionable earnings eligible for CPP by 14%, (currently $55,300) projected to be $82,700 in 2025 (phased in starting Jan 1/19)

    Increase the contribution rate (currently 4.95%) to 5.95% over 5 years, starting Jan 1/19. Self-employed will still need to pay both portions, so their increase is 2% overall.

    Employees will get a deduction for the enhanced portion of CPP contributions while maintaining a non-refundable tax credit for existing CPP contributions. Self-employed will get to deduct both the employee and employer share of enhanced CPP contributions.

    The federal WITB will be increased to help offset the cost of the enhanced CPP contributions for low-income earners.

  6. Is there a ballpark number in terms of how much over assessed a house would sell for in this market? I know that’s not exactly a very accurate methodology but just curious really.

  7. There is a difference between raising and reducing the rate in how it effects the owner. There is no need to set a deemed disposition date if you are reducing the rate.

  8. Yeah, my accountant’s advice, which seems to mirror CC’s understanding, was that it would likely apply based on date of sale if they raise the rate. They were talking about doing it last year too and did not so no-one really knows for sure yet, just that there is a risk it will happen. We had a capital gain and I just preferred certainty and it worked for other reasons.

    Hard for people to get a closing date prior if the change happens this month.

  9. Totoro, that would be unprecedented when the government has set Valuation Days before.

    Such as in 1971 and 1994

    1971 was when they first introduced capital gains taxation in Canada, so no surprise they allowed valuation dates then to “soften the blow”.

    Feb 22/94 was when they eliminated the lifetime capital gains exemption of $100,000 for ALL Canadians. Now that exemption is only for qualified farm or fishing property and qualified small business corporation shares (limit is now $835,716).

  10. And in 1994

    The $100,000 capital gains deduction for other capital property (other than the three types listed above) was eliminated on February 22, 1994. At this time, everyone was permitted to make a special one-time-only capital gains election. In most cases, this election had to be made on your 1994 tax return. The election allowed you to opt to have a deemed disposition of any capital property you owned on February 22, 1994, at any amount up to its fair market value on that day.

    In most cases, the amount you elected as a deemed disposition became your new cost base. The election was made by filing Form T664 with your 1994 income tax return.

  11. But fear not landlords your current gains would be taxed only at the 50%. And only the gains after a specific date would be taxed at the higher rate.

    Errrm, I don’t know why you would believe that. When the capital gains were reduced in 2000, there was no adjustment for valuation at the different dates.

    For example: You buy three properties on Jan 1/99 for $100,000 each.
    You sell the 1st property on Feb 27/00 for $150k, your capital gain inclusion was 75% = $37,500.
    You sell the 2nd property on Feb 28/00 for $150k, your capital gain inclusion was 66.67%. = $33,333
    You sell the third property on October 18/00 for $150k, your capital gain inclusion was 50% = $25,000.

    That’s how they treated it when they reduced the rate, so there is every reason to believe that is how they will treat it when raising it too.

  12. Totoro, that would be unprecedented when the government has set Valuation Days before.

    Such as in 1971 and 1994

    Subsection 26 (7)

    for the first taxation year in which an individual disposes of a capital property which
    was owned by the individual on December 31, 1971, that individual may elect to
    establish the cost of all such property as being the fair market value on valuation
    day,

  13. Thank you Marko – re. Fair St

    My PCS sheet didn’t go over $1.5m, maybe I’ll have to update that given this market…

    $1.575k for 2125 Fair St! I am floored by that. To me, that house was sheer misery, with the sump pumps, lack of privacy, cheap workmanship, and three/four storey walk up rental apartment buildings staring at it! Then you had to add GST & PTT! That puts the price up to around $1.7m! Absolutely mind boggling! Obviously, someone else didn’t see it my way… so glad I’m no longer looking for a house in this market…

  14. “Oil is up 14% since October”

    Oil was $52 at middle of October and has bounced around a $5 swing for many months. Nothing to write home about.

    http://stockcharts.com/h-sc/ui?s=$WTIC

    Oil at $75 to $85 is laughable unless US dollar crashes in a ball of flames. Clean energy is the future, not oil. Gasoline demand in decline since 2010 as well.

    BP warns of price pressures from long-term oil glut

    Market faces uncertain outlook as demand shifts from fossil fuels to cleaner energy

    “The world is facing a long-term oil glut as producers scramble to exploit reserves before fossil fuel demand goes into decline”

    https://www.ft.com/content/28607ed2-e305-11e6-8405-9e5580d6e5fb

  15. I really doubt the capital gains exemption will be changed. Too disruptive and will impact their middle class supporters. Garth is not exactly right a lot of the time. They will not do anything to Doctors since they are mobile and can move to the US. Already a shortage of Doctors. Losing Doctors impacts the middle class.
    The US is going to lower taxes. This will also make the liberals less likely to
    hike taxes for the top 5% since they are more mobile than ever.

  16. But fear not landlords your current gains would be taxed only at the 50%. And only the gains after a specific date would be taxed at the higher rate.

    My understanding is that it will apply to the entire capital gain if the sale date is after the effective date so I don’t think this is true?

  17. Except there are 4400 of them at BC Hydro. Plus many more making 100k plus with pensions in government. Not knocking, just saying it can be more secure and less stress than starting a business or putting the time in to be a professional who is liable for all sorts of things like life and death and can pay more when you count the up to 30% added in benefits, paid holidays, tax and pension costs to the employer plus the pension payout later. I’m not interested but something for people to consider early on, particularly if there are more tax changes like nan is promoting. I don’t have a problem with the current changes.

  18. “The problems outweigh the benefits. If you dont believe that move to Vancouver or Toronto. Notice how much more affordable both of these high density cities really are.”

    Montreal and Ottawa are both more dense than Vancouver and don’t have affordability problems.

  19. As for the Capital Gains going from 50% to 66 or 80.

    It’s about time.

    But fear not landlords your current gains would be taxed only at the 50%. And only the gains after a specific date would be taxed at the higher rate.

    I suspect the government would take a date that coincides with the assessment year as they have done before. That could be July 1, 2016 or 2017 and you would be given the option of choosing the assessed value +/-10% or a certified appraised value.

    So there is no need to panic and sell your investment properties. You haven’t lost one dime.

  20. “4400 BC hydro including lineman making 200k plus. ”

    They get high pay for high risk of electrocution plus tons of overtime they pay big tax on if they take the payout. Not the norm by far.

    Average trades guys make $25 to $35 per hour at 2000 hours (40 hour week) a year is $50K to $70K max before any OT. If it’s a 35 hour week you can knock off $7K.

  21. As for the discussion regarding the doctors, lawyers and the small business deduction, Bill C-29 (which received Royal Assent Dec 15/16) says the following:

    “Small Business Taxation – Multiplication of the Small Business
    Deduction and Avoidance of the Business Limit and Taxable Capital Limit

    Small businesses benefit from a reduced federal corporate income tax rate of 10.5 per cent, as compared to the general federal corporate income tax rate of 15 per cent. The small business tax rate is provided through the small business deduction, and applies to the first $500,000 per year of qualifying active business income (business limit) of a Canadian-controlled private corporation (CCPC).

    The business limit must be allocated among associated corporations, and is phased out on a straight line basis if the taxable capital employed in Canada of a CCPC (and its associated corporations) is between $10 million and $15 million. In the case of a business carried through a partnership, the members of the partnership must share one $500,000 limit in respect of that business under the specified partnership income rules.

    These measures will ensure that the small business deduction cannot be multiplied by using particular tax planning structures.

    The first measure addresses structures in which corporations conduct business through a partnership but manage to avoid the specified partnership income rules. The measure ensures that such corporations (as well as corporations used in alternative structures) are subject to these rules.

    The second measure addresses tax planning structures used by certain taxpayers that have avoided the business limit and the taxable capital limit. The structures rely on special rules under which a corporation that could not claim the small business deduction on its income (notably because its taxable capital exceeded $15 million) paid that income to other associated corporations, with each claiming a full $500,000 small business deduction. This measure provides that the income earned by a corporation from another corporation in such structures is ineligible for the small business deduction.

    These amendments will apply to taxation years that begin on or after March 22, 2016. “

  22. Likely any changes will not be retroactive, so if you were thinking of unloading an investment property this year, you may want to do it now, before Budget Day.

    Do we have a date yet?

  23. @gwac. They still need to have more than a 5% surplus by the end of the contribution holiday. Still a fair bit different than scooping all surpluses to pay off debt. Either way, I don’t understand the animosity towards a defined benefit plan if it’s fully funded. Which BC’s is.

  24. Gwac – To me it certainly seems Victoria Ave in South Oak Bay is overpriced. I would’ve picked something fairly compareable but priced $1m less. Just across the road is 2161 Beaverbrook (another brand new house, but this one isn’t selling at $1,468k, probably b/c of the very small corner lot and again, GST).

    I guess Victoria Ave is for a wealthy Vancouver buyer who cashed out last year, or a rich CEO or professional retiring from somewhere? Or if someone came into a huge inheritance. If they’ve got the money to burn… then add the GST.

    What really got to me the other day was the newly built open house I attended at 2125 Fair St – in my ‘hood – and I thought my own house was waaay better, which I paid much less for.
    It was listed at $1.6m + GST. Now I can’t find it on Realtor.ca or anywhere – can anyone tell me if it sold?

  25. I think you can build a house in Victoria and make money on the sale.

    You just had to buy the land a couple of years ago.

  26. So at my tax course yesterday, they repeated the same warning that Garth posted on his blog two days ago about the capital gains inclusion rate. They said there are rumblings at the federal level that they may increase the capital gains inclusion rate to 66% or even 80% in the next budget. They also heard that they may eliminate the lifetime capital gains exemption (but this is less likely).

    Their thought is that the government may see this is as the perfect time to take advantage of what’s happening with Trump (distracting the public) to announce unpopular tax changes.

    Likely any changes will not be retroactive, so if you were thinking of unloading an investment property this year, you may want to do it now, before Budget Day.

  27. @gwac. Interesting, the non contract stuff was news to me. BCIMC’s performance doesn’t change the benefit, but they’ve had a large surplus for years, and unlike other places such as the US or Canadian Federal, the BC government can’t scoop that surplus and use it to pay off debt. Cops & Firefighters get to retire earlier as well, but they also on average die earlier.

  28. James

    Not the 19k from the cities/lot of cops/ fireman/profs/IT and BC hydro line guys.

    BTW all fulltime (some par time) non contract employee of the Government, local including are eligible for a pension

    BCIMC manages the money. There performance does not change the benefit. The government and employees make contributions. Government is responsible for shortfalls but can always fight in out with union to have employees contribute more.

  29. “Oil has been pretty flat for months with a big glut and loonie has been pretty wonky lately. If US dollar tanks then both will head up for sure.”

    Oil is up 14% since October.

    @gwac those are all people in mgmt. most of the people on that list are CEOs or VPs.

  30. Luke if you had up to 2.5m to spend. What would you pick Oliver or Victoria. For me Victoria is what the rich dudes/ highly indebted dudes want to show off.

  31. TSE is pretty much where it was 9 years ago. It is due for a huge rise which will be driven by commodities. I would not be in long-term bonds. There maybe some pain there.

    Gold in a good bet to continue to hold due to Trump and inflation.

    Canadian dollar 1.2 to 1.22 by the end of the year. Oil 75 to 85.

    Victoria average price 940k for SFH.
    Going to be a good year for the west.

  32. Perhaps the prospective owners of 762 Victoria should’ve looked at nearby 663 Oliver St – Listed for well over $1 million less at $1,349,900, and sold today for $1,299k. Older home, but it was fixed up and with a suite (who says Oak Bay doesn’t have suites?) Great location – and no GST.

    Also interesting – looks like Oaklands is ticking up into ‘newly desirable’ along with Fernwood… 2617 Victor St. Listed at $929,900, sold for $930k – wow, $100 over asking! Nice quiet tree lined street. I can see why it’s picking up there due to the central location as well.

  33. Oil is creeping up again……could this cool the Victoria market off? Alberta gets going again and the dollar strengths.

    Suppose it could. Then again, when oil & loonie were $26 & 68cents at the start of 2000, their rise to $147 & 109 over the next ~8yrs sure didn’t hurt Victoria (up 135% from ’00-’08).

  34. “Oil is creeping up again……could this cool the Victoria market off? Alberta gets going again and the dollar strengths.”

    Marko, are you trying to talk down the market again ? 😉

    Oil has been pretty flat for months with a big glut and loonie has been pretty wonky lately. If US dollar tanks then both will head up for sure.

  35. His blog is obviously intended for the top earning percentiles, which is evident in his last post and the fan mail he responds to.

    I guess the rich have no common sense either.

  36. 762 Victoria owners will do well if it sells close to asking. Jack and others have often stated that buying a lot and building new always means taking a loss. Places like this show that is not true. You could buy a similar lot and build this house for less than asking. So apparently some people will pay a premium to avoid the hassle of building and to have someone else make the decorating choices.

    Except the lot is now pushing 900k and it is $300+ a foot to build (garage included in calculation). so $300 x 4,000 + lot price.

  37. VREB is now changing the reporting of buyer origin to a dropdown list rather than freeform and reducing the private information like name that is reported. This should improve data quality for where buyers are coming from going forward and reduce instances of it being not reported.

  38. 762 Victoria owners will do well if it sells close to asking. Jack and others have often stated that buying a lot and building new always means taking a loss. Places like this show that is not true. You could buy a similar lot and build this house for less than asking. So apparently some people will pay a premium to avoid the hassle of building and to have someone else make the decorating choices.

  39. For those interested with today’s new highs, here’s a longer look at TSX on a log scale:

    I guess it’s already a couple hundred points higher than shows.

  40. I don’t find Garth to be all that great. As you guys mentioned, his forecasting skills stink. His arguments are also very one sided and purposely lack any data that contradicts him.

    His blog is obviously intended for the top earning percentiles, which is evident in his last post and the fan mail he responds to. He’s given a ton of advice to dual income doctors who earn $200,000 a year and spend it all, but where’s the single income engineer or architect?

    In the last post his kept harping on how the top 1% pay 11% of the taxes, but neglected to mention that they earn 10.3% of all income (as mentioned by a commenter), not to mention hold a much larger percentage of the wealth in assets.

    His whole “never buy and invest the difference between renting” doesn’t hold water in every market or income level. And his condescending terms such as moisters and deplorables irk me a bit.

  41. “Out of 49,212 dwellings, 3,450 or 7 per cent, were listed as unoccupied.”

    The lower percentage doesn’t mean squat if the demand for housing has shot up so fast that it is impacting the ability of the city to function in a healthy balance, thus making the previous 9.9% irrelevant.

    Back in 2011 the renters were getting free months of rent and we’re due for a shift back as more people leave Victoria to expand their job skills or out of frustration of finding what they can afford.

    Seeing more apartments with for-rent signs in the core. Looks to me like more are leaving than coming here.

    As per U-Haul, Victoria doesn’t even make the top 25 in Canada on their list of in demand move-to cities. Kamloops is the place to be, get the truck ready Jed.

    U-Haul Migration Trends: Kamloops Tops Canadian Growth Cities of 2016

    “Kamloops is considered a very affordable option for people looking for full city living without being in a metropolitan area,” Kamloops Mayor Peter Milobar said. “We have a well-diversified economy. There’s been a push in tech jobs, education and health care jobs. People are moving here, and U-Haul provides an option for them. U-Haul gives people the option to move on their own time while saving money.”

    Kamloops is known as B.C.’s friendliest city and lays claims to the title of Canada’s Tournament Capital for sporting events with its high-end facilities. It is home to major employers such as the Interior Health Authority, Highland Valley Copper Mine and Thompson Rivers University.

    http://www.newswire.ca/news-releases/u-haul-migration-trends-kamloops-tops-canadian-growth-cities-of-2016-612884453.html

  42. To celebrate, I thought I’d quickly help Garth with his support line for Van (yeah, I’m bored)

    The most ridiculous thing about that graph is trying to fit a straight line when it should be exponential. If you expect 2% appreciation a year (just pacing inflation), then that is exponential appreciation an not a straight line on a graph.

  43. There has been a year over year sale volume declines in all price ranges for houses in the core except properties in the $900,000 to $1,000,000 range relative to the same time interval last year.

    The volume of sales have sharply been declining month over month since April 2016. While some of this decline is seasonal. Not all of the decline may be brushed away with seasonality as the decline in sale volume is steeper than previous years and would be attributable to declining affordability in the core for houses since April.

    This year seems to be starting out like no other year as most middle income buyers are excluded from purchasing a house in the core due to high prices.

    What usually happens at this time of year is that the volume of both listings and sales begin to increase. Starting around this time last year we had the beginning of the Alberta tar sand’s Black Swan event that closed the gap between listing and sales. The months of inventory and average days on market fell to their lowest level around April when the levels reached 18 DOM and 1.06 MOI. That black swan event has moved on and we are returning to past levels as last month the average DOM was 27 days and the MOI was 3.59. We are still below historical levels with a market that favors sellers but that could change in the next few months.

    The legacy of the black swan event left us with high prices as we are poised to enter the spring market. Those high prices appears to have quashed the middle income market. So it is reasonable to expect sales to increase proportionately with listings this year or will the gap between sales and listings volumes continue to increase with both the average days on market and the months of inventory trending larger?

    How this plays out in the next 30 to 90 days will make this an exciting year to watch.

  44. TSX new all-time highs. Dow well past 20k.

    To celebrate, I thought I’d quickly help Garth with his support line for Van 🙂 (yeah, I’m bored)

  45. Yeah, just disagree for many social policy reasons on the small business tax rate and, contrary to what you state nan, see no evidence the Feds are changing it in a way that would impact any more than a tiny number of super well off docs and other professionals that are set up in partnerships.

    There is so much risk in starting a small business yet small businesses and incorporated professionals are necessary. Not everyone can get into med or law or engineering or other professions that require you to forgoe years of earning potential and once you’re done require you to shoulder high stress and responsibility. Among those professionals and other small business folks who do form a corporation and take on way more risk while creating jobs for others, all of which generate income tax and ei and cpp contributions, usually wiTh no pension for owners, there had better be some hope of being able to have enough in retirement to justify the effort and risk plus, as you say, access to capital to grow the business.

    As far as government workers go, they don’t need to worry as much. A paid off house and a pension and you are good. For some that is worth the bureaucracy they work with.

    And yes, there are many who are employed without a particularly good pension or any pension at all and wages lower than government. These folks need to be more frugal and creative, probably in a place with lower cost of living than here, or be able to live on Cpp and oas with the top up. They do have the benefit of a lower tax rate if cost of living can be reduced. I’m glad Canada has a basic pension and okay to pay taxes to support this but it is pretty limited if that is all you have.

  46. Caveat Emptor:

    That is interesting to know. And I am surprised if it sells close to asking. Let me know if you find out the final sales price. Makes me suspect that there is still some Vancouver money floating around out there.

  47. I agree that properties over two million are not selling. I dont believe that it is a matter of declining buyers so much as rather gross overpricing on a number of these listing. 762 Victoria is a good example of someone daydreaming, 1580 Despard is another one. Cant blame people for trying but I doubt either of these will sell for this price. But I have been surprised before.

  48. In my opinion, the small business deduction is designed to make it more tax efficient to accumulate capital in a business so that it can be reinvested with as little tax burden as possible to grow the business, not even the after tax playing field for its owners with government pensioners. There is an entire private sector that makes less than both of those groups, receives less benefits from tax loopholes and has far less job security. At a given taxable income doctors will pay the same tax as anyone else and if they want to pay it all to themselves, use their rrsp room to accumulate that 2mm with after tax dollars and generate their own income stream they can do that too. The problems with government at every level is that they are paid more than the private sector, AND get job security AND get a pension AND work less AND get flex days AND get more holidays AND get more severance if terminated etc etc.

    I do pretty well for myself but when I look at the incomes and the indifference to risk that my government friends have the privilege of going through life with while they feel more comfortable taking on larger mortgages than me due to their job security and pension plans, I would be lying if part of me wasn’t envious.

    Either way that has nothing to do with the sbd. Everyone should pay a fair amount of tax on the income they generate and if they generate it and don’t reinvest it or pay tax on it, that is an abuse of the Sbd in my mind.

    On the govt side, the easiest jobs shouldn’t pay the most with the least amount of risk but that doesn’t mean the sbd should exist so that some folks can try to even the playing field. Most people can’t do anything about it.

    Both of those things are broken at the moment and at least the govt is fixing one. Inflation will probably fix the other one over time.

  49. Penguin:

    Like you I am shocked that a blog called “House Hunt Victoria” is so focused on housing. I was expecting a lot more discussion about skiing and sailing.

    You posed what a lot of people assumed was a serious question about whether you should buy a house and you asked for advice. A number of people spent time and effort trying to give you their perspective. Obviously more in life for you seems to mostly involve being a total ass.

  50. It’s not like this is free money though, you contribute through out your time working…

    Yes, but a ex. doctor does not have this benefit nor the benefit of matching funds. You contribute in pretax dollars to your pension fund. An incorporated doctor first pays tax on earnings within the corporation at 15% if they qualify and then more tax at the personal tax rate when they take out retained earnings. They have to save at least two million dollars to be able to have a pension of $80,000 a year.

    A lower pension of $60,000 a year would still require savings of 1.5 million dollars by someone without a pension to create a similar income stream in retirement. There is a strong policy reason to support the small business tax deduction imo as many business owners are in this position.

  51. @vicbot
    “Penguin, because you saw people weather tough times, you can be very realistic about the risks. If I was in your shoes, I would think first about where your career/job might take you. If there’s a good chance you’ll have to move outside of Victoria during then next 5 years, in your 20s & 30s (like I had to do to gain experience & move up the ladder), then it’s risky buying here now.”

    Great advice. Unfortunately we have pesky government jobs so most likely not moving to Duncan anytime soon. And for the record I have nothing against Duncan and I would totally live there if I could get a job there in my field. I’m not worried for myself if I decided to buy a house, because if I do buy one it will be a calculated decision. But for others that might not have secure jobs it might be a different story. We are well above average earners so I’m not worried about being able to afford a house… And honestly there’s more to life than owning a house anyway! You wouldn’t think so after reading the comments on this blog though!

  52. It depends on the sector. The lowest paid are government of BC employees. Their salaries aren’t competitive with industry. Then the Feds pay a bit better. Municipal employees do pretty well, have you ever checked out what a city manager makes?

    And as stated below, pensions are not free money but rather forced savings with employer matching contributions. A decent private sector employer would offer RRSP matching and the overall benefit may be the same if you could save and invest well.

  53. “a government worker can earn $100,000 a year and $80,000 plus medical in retirement because that is the pension plan without any need to plan or save.”

    Unless you’re talking about MLAs or Judges no one in Public Service makes $100 000 unless they’re in management, and I’m pretty sure they’re not part of the pension plan since they’re not in the Union. Based on the latest BCGEU agreement, the highest earners (of which I know none, and have never seen a 33 listed anywhere) make about 88 grand. The highest position I’ve ever seen (a 30, which there are plenty of) maxs out at 80 grand a year. That being said, you’re still wrong about the retirement wage since someone making $100 grand would pull in a max of $70 grand after 35 years of service, depending on which option you take. It’s much less if you want to leave it to your spouse after you pass. It’s not like this is free money though, you contribute through out your time working, it’s just a guaranteed benefit because BCIMC does a good enough job investing it that it pays for the future pensions as well as all the employees of BCIMC and the Pension Corp. Can’t see how the government would cut it exactly…

  54. Don’t get me started on government pension plans either. I’m sure the other shoe will drop on those as well eventually.

  55. Renters rent for many reason. They like the freedom,
    The pay less in rent vs mortgage, their jobs are not stable, they are saving, they are downsizing, they are retiring, do not like the upkeep. Or in your case they stupidly speculated on their place thinking prices would go down. All perfectly valid reasons

  56. Wasn’t me. Not sure what Garth is smoking…

    Sorry.. was on my iPhone and made a mistake. I really apologize as we are in agreement and I know this is your area of expertise. Turns out I was responding to nan’s post, not yours.

    The draft changes mention none of what people here are posting or what Garth is saying. I agree with you – the small business deduction makes total sense imo. As does allowing professionals without pensions to retain earnings as an incentive to take on a career with no pension built in. People really underestimate the value of a pension imo.

    A doctor might net $200,000 a year but they’d better be saving and investing along the way for retirement as they’ll need to invest two million at least to get $80,000/yr in retirement. Meanwhile, a government worker can earn $100,000 a year and $80,000 plus medical in retirement because that is the pension plan without any need to plan or save.

  57. Re: Gwac and Hawk. You guys are like scrappy little brothers.

    I believe Gwac lives in the forest just outside of town. And Hawk has said he’d like to buy in the outskirts as well. So that means there’s a chance, albeit small, that they will end up neighbours. Could you just imagine.

  58. “gwac, maybe you should stop making false assumptions of why renters don’t currently own without opening your mind to the real world and ignorantly stereotyping because you can’t handle an opposite opinion.”

    Hawk – I thought you sold your place a couple of years ago, and now you can’t afford to buy a house at these prices. Is that not correct? If not, please enlighten us.

  59. cc what tax changes are you referring to exactly? Do you have information about the changes?

    Wasn’t me. Not sure what Garth is smoking… I didn’t read his blog but the portion quoted earlier just left me confused as to what the heck he was talking about. Attended a tax course today and there was some information about possible future changes, but nothing about taxing retained earnings. Can expand on what was brought up when I have my notes in front of me.

    Also sounds like you are a fan of eliminating the small business tax exemption. I would strongly disagree Given the risks and capital required to run a small business vs the overall benefit to the economy.

    I don’t know if this was directed at me as well, but I haven’t commented on this post at all until now. I think the SBD is a good thing.

  60. gwac, maybe you should stop making false assumptions of why renters don’t currently own without opening your mind to the real world and ignorantly stereotyping because you can’t handle an opposite opinion.

  61. cc what tax changes are you referring to exactly? Do you have information about the changes?

    Also sounds like you are a fan of eliminating the small business tax exemption. I would strongly disagree Given the risks and capital required to run a small business vs the overall benefit to the economy.

    Hmmm, that wasn’t me, I’ve been busy all week! Sick child and husband + shoveling driveway and neighbours sidewalks (I’m a nice gal) = barely time to read the 200+ comments on here.

    Today I finally attended the Personal Tax Update course I mentioned before. I will summarize tomorrow when I have my notes in front of me. And procrastinating from work. Lol (And no, I’m not a fan of eliminating the SBD.)

  62. gwac, you said you were going away for a month about 2 months ago. Homeowners fear rate is rising as Vancouver crashes. Keep on pumping the fake news.

    Nowhere is immune no matter how crowded when the fools buying stops.

  63. 246 comments in 3 days! Very high on the HHV chitter chatter index. Must be an interesting market… Leo — you are missing a graphing opportunity.

  64. Unoccupied dwelling in 2011 9.9%/2016 7%.
    Down 3% in Victoria.

    Mayor is more concerned with derelict properties.

  65. If you can afford to leave it empty, you can afford the tax.

    Yep. But tax planning will mean that most, maybe 90%?, will find a way around given that there are so many ways around it. Ridiculous policy.

    I also don’t agree increased density is the best solution in the world, just that it increases affordability in an area as land square footage decreases. Maybe the core is almost all full up and prices will just go up… And then Langford will get hotter looking.

  66. As I said gwac, you’re as clueless as per your right wing whacko ideas. Get into the real world. Too much wood chopping has done some damage. 😉

  67. Hawk

    I am not clueless about why you do not own. You sold expecting to buy cheaper . You now come on here day after day talking the market down thinking that and the Government will get you a home. Does that sum it up?

  68. “The empty home tax is, imo, going to be ineffective. Many ways to own a second home and avoid the tax including letting a friend stay six months of the year. Don’t see these homes coming onto the rental market as a result of the tax. If u can afford to leave a home vacant u are not going to rent it to strangers.”

    In other words I’ll let some friend stay and charge them rent rather than pay the taxes. Great, that’s what the purpose of the tax is. The friend pays you instead of somewhere else.

    If you can afford to leave it empty, you can afford the tax. Many will sell increasing the inventory and pushing down prices for all. Win win deal IMO.

  69. gwac,
    Guess you should have done your DD and checked the last BC voters results before you moved here. It’s heavy NDP and Greens in your backyard ICYMI. You’re still clueless as usual when/why some own and some don’t. You can always move back to Vancouver, I hear the market is tanking there. 😉

    Barrister ,

    Defending Marko’s weight loss program based on his ability to save taxes on his company loopholes is a very fattening subject. 😉

    Most of us just go to the gym and not have to base it on saving some taxes. I found that a quite pitiful excuse and has nothing to with why he owns and I currently don’t. Last time he told us months back how he has a strict work out regime because he uses strict time management, not tax management. Just sayin.

  70. Rook my point is if voters and politicians really wanted to do something about availability they would look at opening up some of the alr land that really does not produce a meaningful amount of produce. It will not happen Instead we will see actions that look like they are doing something but have little meaningful impact on home availability.

    Do we need 100s and 100s of acres producing flowers or homes. Obviously flowers. 🙂

  71. Why is it that everyone assumes that increasing the density of greater Victoria will make for a better city.
    The problems outweigh the benefits. If you dont believe that move to Vancouver or Toronto. Notice how much more affordable both of these high density cities really are.

  72. In Victoria I’m wondering if the empty condos are retirees to be most of the time. Who really socializes with their neighbours in a condo? I’d rather have a vacant one next door and above me. Plus many many condos don’t permit rentals anyway so what is the point?

  73. The City of Richmond, B.C. is still working out how it will enforce a ban on unlicensed short-term housing rentals — such as those found on Airbnb — after a surprising vote earlier this week.

    City council voted unanimously in favour of the ban on Monday evening, despite a report from city staff last week that recommended regulating the short-term rentals instead of banning them outright.

    Mayor Malcolm Brodie said the move came after council heard significant public input about the negative impact short-term rentals are having on Richmond neighbourhoods.

    “We said as a council, okay, we want to move forward,” Brodie said.

    “We’re going to prohibit these, and we want greater rigour around the bylaws that will talk about enforcement and provide a better program in terms of how we go forward.”

    He noted that the city is not banning Airbnb itself, just short-term rentals of the kind Airbnb is known for listing.

    The ban applies to rentals of less than 30 days, but Brodie said exceptions will be made for licensed business such as bed and breakfasts.

    Source CBC News Jan. 11 2017

    -This is a ban and not simply regulating them which Victoria is thinking of doing.

  74. Gwac
    So your vote would be to sell ALR land to developers? Curious how you find this would benefit the South Island in the long run? Trying to keep an open mind but your post sounds a little bit near sighted and backwards to me. So you are not a fan of it but your critisizing officials for being non-effective by keeping it?

  75. Caveat

    No fan of getting rid of the ALR I was just throwing it out there as a real solution if governments and tax payers were serious about fixing the problem. I think we know the answer. We get vote enticed non effective solutions.

  76. You get why this is all smoke and mirrors for voters. The thing that will really make a difference wont be done because somehow the 400 dollars worth of flowers, the 600 worth of eggs or 5000 dollars worth of hay is worth keeping these parcels tied up. Sorry it is complete joke that people buy into.

    You might not like the policy aim, but the ALR and farm assessment has been relatively effective at keeping farmland from being developed. Some of the farmland is underutilized – sure (though the thresholds are higher than you state (https://www.bcassessment.ca/services-and-products/Pages/Classifying%20Farm%20Land.aspx) although there are plenty of viable and thriving farms too. Fact is people like farms and the ALR is popular and not going anywhere.

    The census figures posted by Leo and Introvert show that you can easily fit more people in Greater Victoria without having to pave over farmland. Victoria, the most densely populated municipality, fit in over one thousand a year. If Oak Bay, Saanich, and Esquimalt did their bit the “core” could easily grow by 2000-5000 per year without having to sprawl.

  77. There will be a certain amount of days that the house must be occupied. This and the 15% foreign tax is nowhere near becoming law here. Not all the cities agree on it.

  78. You will identify that when your tax bill comes under treat of huge fines and so on. Just another box and tax on the bill. That is my understanding.

  79. I’m curious as to how a home is defined as being empty. My current job sees me on the other side of the country anywhere from 4-8 months in a given year. For the rest of the time I reside in Victoria. Would the condo I intend to purchase in the next year or two be considered an empty home, even if it is my principle residence?

  80. The empty home tax is, imo, going to be ineffective. Many ways to own a second home and avoid the tax including letting a friend stay six months of the year. Don’t see these homes coming onto the rental market as a result of the tax. If u can afford to leave a home vacant u are not going to rent it to strangers.

    Look at the Vancouver bylaw – my bet is the revenue doesn’t pay for the program.

  81. Caveat

    You get why this is all smoke and mirrors for voters. The thing that will really make a difference wont be done because somehow the 400 dollars worth of flowers, the 600 worth of eggs or 5000 dollars worth of hay is worth keeping these parcels tied up. Sorry it is complete joke that people buy into.

  82. Tax away it will not make a difference period in availability. Just more taxes. The gullible people can believe that this will have an impact if it makes them happier. It is for votes.

    Want to make a real difference get ride of the agricultural land and let development. Why the hell do people around Mt Doug have huge parcels of land. Let them subdivide. Let them subdivide in the Sannichs.

    I agree that the proposed tax won’t make a ton of difference. Probably won’t be set high enough to change behaviour that much. Plus I foresee a lot of compliance challenges. For that reason I am only lukewarm on the vacancy tax.

    Opening the ALR to development would certainly increase supply. I don’t think that idea has wide support or is likely to happen any time soon. Changing zoning to permit smaller lots in many areas would be a good step I agree

  83. Tax away it will not make a difference period in availability. Just more taxes. The gullible people can believe that this will have an impact if it makes them happier. It is for votes.

    Want to make a real difference get ride of the agricultural land and let development. Why the hell do people around Mt Doug have huge parcels of land. Let them subdivide. Let them subdivide in the Sannichs.

  84. This socialist Vancouver Island work less play a lot, hug some trees and have the government take care of me is a hoot.

    Who is asking for the government to take care of them? A vacancy tax wouldn’t “take care” of anyone. It would just be a modest economic disincentive to something that many people consider undesirable – namely leaving housing vacant.

  85. I have every right to use it in any legal manner without big brother telling me I have to sleep 181 nights in my place. It is a very slippery slope after that.

    IF the empty home tax is implemented you will continue to have that right. We already tax many different land uses differently. Commercial is taxed more than residential. Both agricultural and forest land are taxed on their current income generating value not the actual market value of the land. And as Leo pointed out owner occupied housing gets a host of tax breaks. The empty home tax would just be a minor encouragement towards the socially desirable use of the house as a residence (rental or owner).

  86. This socialist Vancouver Island work less play a lot, hug some trees and have the government take care of me is a hoot.

    Not everyone gets to live in the core. People need to deal with that.
    There are some very affordable homes within an hour commute which is a very common commute for most major cities.

  87. Leo:

    You are right that you already pay taxes for a lot of services that you might not use. But you are arguing that if the house is vacant and you are not using any services that you should pay for even a greater proportion of other peoples services. There is an element of the less you cost the city the more you should pay.

  88. “If someone want to buy a home and pay their taxes and let it sit empty or hold a monthly orgy that is their business. ”

    You can also go and buy a car load of groceries and burn it in front of a group of starving homeless people if you want – that isn’t illegal either and is essentially the same thing – a waste of resources.

    Wasting resources is wasteful and should be discouraged. If you want to own a vacant home, do it somewhere where everybody has one.

    Wait – why would I want to speculate when there isn’t demand? Exactly. Go speculate on things that don’t materially and negatively mess other peoples lives up.

  89. Tall Boy:

    Good idea; maybe you could buy a second house and then rent it out cheap. If all your friends did that as well than the problem would be solved.

  90. Tallguy

    I hope you find something. I know it is very hard out there.

    All those that did not speculate on lower prices I feel for, the rest you rolled the dice and lost too bad. Do not look to the government to bail you out.

  91. Not sure what any of those items have to do with me buying a house and letting it sit empty.

    All of them are there to encourage local people to live in their houses rather than do other things with it. A vacancy tax is exactly the same thing.

    I have every right to use it in any legal manner without big brother telling me I have to sleep 181 nights in my place.

    You do have this right. You just may have to pay an additional tax if you would like to keep it vacant. Just like you have the obligation to pay property tax to support local services even if you never set foot in the house.

  92. Hawk:

    Marco can afford to build a house and take time off. Maybe you should ask yourself why you cant afford a house and he can?

  93. Gwac:
    If people acted in the best interests of society instead of their own we wouldn’t need all of these taxes and regulations.

  94. Leo

    Not sure what any of those items have to do with me buying a house and letting it sit empty. If I buy something and follow the rules. I have every right to use it in any legal manner without big brother telling me I have to sleep 181 nights in my place. It is a very slippery slope after that. People are already penalized by paying higher tax both municipally and income tax on sale.

    Hawk I am fed up with taxes and governments interfering in their citizens lives in order to balance things out for votes.

    Also hawk maybe you should not have speculated on your house and sold hoping to buy cheaper.

  95. Interesting how all the property kings wouldn’t mind living in a hood with empty homes all around them, no life, no soul, nor vibrancy, just like the way Vancouver has gotten. Greed has turned some so called family people on here into total hypocrites.

    If even half the hoarders put their places up for rent the vacancy rate would climb and rents would go down. What a concept, but then the property kings can’t gouge anymore so that wouldn’t be a good thing would it.

    Could always stick some kid in there who might throw parties and trash the place though.

    https://www.reddit.com/r/VictoriaBC/comments/5t1ypw/census_of_unoccupied_homes/

  96. If someone want to buy a home and pay their taxes and let it sit empty or hold a monthly orgy that is their business.

    Clearly society disagrees with you. Foreign buyer tax, principal residence exemption for CG, home owner grant, lending restrictions for investment property, etc. All are put in place to prioritize people buying a place to live in. Empty home tax is just another thing on that path.

  97. TallGuy

    I feel your pain but we are not a socialist country. People have the right to buy and sell things and make a profit.

  98. gwac:

    If a home is sitting empty, it’s likely for speculation, letting the lack of inventory and perceived land values increase its cost with no effort put in. Let me know how you feel about that the next time you’re searching for a home to rent or buy.

  99. I strongly agree that if someone wants to buy a retirement condo to lock in at current prices and visit it a few times a year until they retire they should be able too. Or even if they never move here. Focussing on empty condos appears like a deflection from the real issues for vacancy rates – zoning and subsidized housing. These things cost money and require bureaucratic effort which imo makes them less popular with government than trying to implement a tax even if the tax is ineffective. If I had an empty house I’d probably just find a way to meet the minimum criteria by sending a kid or other relative or friend to stay. I would not be inviting strangers in to live in the place I live in pt.

  100. I am well aware of the difference between tax evasion (illegal) and aggressive tax planning (legal). I do not advocate illegal activities of any kind and we declare and pay tax on everything legally. I’m a fan of taxes as they support our social system and we’ve paid a lot.I’m less of a fan of paying tax that you can legally avoid based on the advice of an accountant – like everyone I know.

    cc what tax changes are you referring to exactly? Do you have information about the changes?

    Also sounds like you are a fan of eliminating the small business tax exemption. I would strongly disagree Given the risks and capital required to run a small business vs the overall benefit to the economy.

  101. Way to many tax loving socialists on this board. Tax this tax that. If someone want to buy a home and pay their taxes and let it sit empty or hold a monthly orgy that is their business.

  102. Luke, people heavily rely on agents fairly pricing a property. So it just a natural tendency for them to assume the market is in favor of sellers when the sale price is more than the asking price. And the greater the difference the hotter the market.

    So should agents have to abide by a fair listing price policy? Or should agents be permitted to bait purchasers with an unrealistic low asking price?

    Maybe these are the kinds of questions the Real Estate Council of BC should be addressing.

    I think most people who saw a sign saying a coffee pot was $10 and then took it to the till and was charged $20 would be livid. Maybe it’s time to change things and make residential real estate more transparent and fair for all. Don’t get me wrong, it you’re selling commercial or industrial try anyway you want to screw the buyers. They’re usually experienced buyers. But someone buying a place for their family to live – that isn’t kosher.

  103. A tax on empty homes would also be appropriate for those that are using their homes as a business enterprise. The tax would not apply to homeowners casually renting part of their home.

    However if you’re using your Humboldt Valley condo as an airbnb for more than 180 days – you should be worried. The same with the Janion. The building may be zoned transient but that does not mean you are going to avoid the tax if City Council approves one.

    I’m interested to see what happens in Vancouver if the tax is approved. Will there be a Tsunami of condo listings hitting the market?

  104. 2321 Howard St in newly desirable Fernwood – listed for $1,150k sold for $1,201,201.

    Quality home, 2013 build so no GST. But, on a corner lot near busy Shelbourne and Bay St’s. Def. a bidding war but it didn’t go extreme over asking.

    830/840 Victoria Ave sold for $1.4m which was same as asking price, but it was 150 days on market! Flat roof, dated, stucco duplex next to a posh private school in South Oak Bay.

  105. Are delayed offers a function of the market or an exploitation of the market?

    Many agents refuse to list a property using a delayed offer tactic and others do it on a regular basis. So I can understand some saying that they are getting the best deal for their client but others saying that this is just gaming the system and re-enforcing the public’s negative opinion of real estate agents.

    But if you’re a buyer and a home in the core is priced around its assessed value while properties in that neighborhood are selling at 20 or 30% over assessment you should put a bid in. Because there is always a faint chance, like a prisoner on death row for a reprieve, to get a deal. And that may be the case of half a dozen of the bids being around fair market value. But the affect on that seventh person when they sees 6 bids causes them to dig deeper into their piggy bank.

    Banks don’t lend on what the last bidder pays, they lend on market value. So if they overbid then they will have to come up with a bigger down payment or lose the deal. As a buyer you need deep pockets to play this game.

    My advise for someone is to go in with their best offer and never counter. When you overpay on real estate you lose when it comes time to re sell the property by netting less than those that paid fair market value. You may have gotten the house today – but at what cost to tomorrow.

  106. Wondering how empty home is defined? I was surprised at the number of empty homes in Victoria almost reaching the same levels (percentage wise) as Vancouver. While Oak Bay appears at about half the level of Victoria. I would support a tax if the home was left completely empty for over six months/year. As for Airbnb- this is not really an empty home, as someone is renting out the home for part of the time. Often w/ Airbnb, they are renting out only part of the home while living in the other part. As for weather or not Airbnb takes rental units away from Permanent renters – this is only a very small percentage as often people who rent their units as Airbnb would not rent to Permanent renters (and all the problems/issues/challenges that comes with).

    Isn’t is up to governments (and not individuals) to add much needed supply to the rental market? The different levels of government can do this through zoning, incentives for homeowners to add suites if the homeowner wishes to rent the suite permanently, and incentives for developers to build rental buildings, such as the Federal Gov’t used to do when all the three/four storey ‘walk up’ rental buildings were built back before the 1970’s. The Prov Gov’t could also do a lot more than they have been doing… and yes, they can tax completely empty homes.

    I caution people not to get too ‘Orwellian’ with regard to all these rules/regulations/taxes around what people can do with their own properties, esp. Freehold properties, that they often worked hard for. (Strata already has rules set by the Strata, with the ex. of the Janion being one where Airbnb are allowed, and many other Strata’s do not allow this use anyway). When people buy into a Strata, they often know what they are getting into (or they should know).

    Taxing properties – if they are left completely empty for more than six months/year would discourage speculators, while not penalizing ‘snowbirds’ leaving for up to six months/year, or people renting out parts of their homes temporarily. If you want to tax Airbnb – do it separately from an ’empty homes’ tax as it’s not the same thing.

    I assume any empty homes tax being proposed by the City of Victoria would only apply there, and each 13 individual ‘fiefdom’ in the CRD would have to implement their own rules/regulations.

  107. Sometimes the Spelling Troll has some good points to be explored. It only has an issue when the discussion is not going the way it wants. Then it reverts to being an arse. Sure I could run my posts through a grammar checker but I chose to let the Troll do that.

    I’ll allow the troll its small sense of significance by being able to run a post through an online grammar checker.

  108. Marko, I don’t think buying a house in a delayed offer situation is the best way to buy a home either.

    It is a horrible way to buy a home in my opinion, but it is a function of the market place (low supply, high demand).

    Closed bid, open bid auction, etc., it’s all bad for the buyer.

  109. So the Core is basically School District 61.

    Also to Luke who didn’t think empty homes were a problem, again I ask. BASED ON WHAT?

    @John Dollar. Stop responding to the Spelling Troll and he’ll eventually go away.

  110. It would have been nice to know how “empty home” was defined. If Victoria has not included airbnbs that were rented in excess of 180 days like Vancouver has done, the number of “empty Homes” could be much higher.

    I would support a 2 percent tax on empty homes as defined by Vancouver. A home owner could still rent his home as an airbnb when they went on vacation but not as a commercial enterprise.

  111. Re tax changes, I don’t think the intent of the changes is to marginalize anyone, only make it fair for all tax payers. If I make $300k working for a corporation I don’t control and someone else works for a corporation they do control, is it fair that my tax burden is higher then theirs in the year income was earned just be cause they don’t need the money right away? We both generated $300k in net economic activity during the year but my tax burden will be 40% because the government has made it illegal for my employer not to pay the tax on my behalf in the year it is earned versus theirs maybe as little as 15 % (although probably higher if they take anything out of the corp) because of the tax structures, share capital allocation and people that exist between them and the taxation authorities. Not paying that tax up front affords them all sorts of options not available to me.

    The way I see it is that if two different people create the same value in society as defined by market prices and net pretax income on a T1, they should be required to contribute the same amounts to supporting the shared services we all enjoy. Any deviation from this is by definition, unfair for those that don’t have access to the loopholes enjoyed by those that do by virtue of their employment arrangements. I believe what the fancies like Totoro out there call aggressive “tax planning” is actually tax evasion in this case and has been for years. Offshore gifting arrangements were very popular “tax planning” arrangements too until the CRA cracked down on them. If the intent of income tax is to tax income, it should tax income, not income mitigated by employment arrangements and corporate structures if you’re industrious enough to figure that out or pay someone to do it for you.

    Any concentrated impact on doctors is merely incidental and should be balanced out through other means like fee schedule adjustments, etc not through arbitrary tax unfairness schemes like gaming the system by allocating income to wives and kids and other nonsense that we all know happens on a regular basis.

    Besides – it is improbable that increasing taxes on the rich will make them move anyways. Sure a very small % will move but generally they are tied to the communities where they make their money and know how hard they worked, how lucky they are and how difficult replicating their current circumstances would be.

    http://www.citylab.com/politics/2016/06/do-taxes-really-cause-the-rich-to-move/487835/

  112. Worried about driving up the costs?

    It’s the decision of the seller and agent to conduct a delayed offer for the purpose of enticing multiple bids in excess of the asking price.

    The home owner chose to do so – the home owner should pay for an unbiased third party to conduct the auction.

    The upside is thousand of dollars and protection from a potential law suit. For much the same reasoning why agents suggest building inspections to their clients. The building inspection protects the seller and the agent from a law suit for not divulging known and not known deficiencies in the property.

    The downside is a couple hundred bucks for a few hours of a lawyers or Notaries time. Where the third party would state that the delayed offer was conducted in a fair and equitable manner.

    Totoro is correct no one is forcing you to make an offer. Something that I have never heard happening where a seller forces a buyer to make an offer. But there is the expectation that you are making an offer under all conditions requisite to a fair sale. That the buyer is not affected by undue stimulus. And that a reasonable time has been allowed for exposure on the open market.

    And I believe that could be done if the delayed offer is scrutinized for fairness by an unbiased third party.

  113. Marko:

    You are right that some people might use the inspection clause to walk away but that has always been the case in a normal market. It is a matter of balancing the interests of buyers and sellers. In a normal market, if there is such a thing, inspection clauses were standard and legislating a five day inspection period would simply create a more normal playing field. Particularly in a hot market I suspect that a lot of people would not walk away.

  114. Marko, I don’t think buying a house in a delayed offer situation is the best way to buy a home either.

    The BC government moved quickly to enact legislation to protect sellers from a perceived unfair practice of flipping houses.

    Just asking for the same consideration to protect buyers from a perceived unfair practice of selling homes.

  115. Worried about driving up the costs?

    It’s the decision of the seller and agent to conduct a delayed offer for the purpose of enticing multiple bids in excess of the asking price. They home owner chose to do so – the home owner should pay for it.

  116. What would be fairer is to provide for a mandatory clause that allows five days to have the house inspected after an accepted offer.

    Only if clauses were re-written that don’t allow the buyer to walk for any reason. That is the appeal of unconditional offers; with conditional offers the buyer doesn’t have much skin in the game. Deposit is not payable upon removal of subjects, anyone can make a conditional offer without being pre-qualified, you can walk for any reason, etc. Just a few weeks ago my clients went conditional and got beat out by an unconditional offer $20k less and my clients were only asking for 4 days for conditions.

  117. 3805 Campus Cres listed for 839K and sold for 900K on day 1.

    Guess the seller opted out of the delayed auction route. My guess is it didn’t hurt them given the look of the place.

  118. Turning that around, is there any evidence out there to suggest that the current non-transparent bidding system would result in lower prices than an open and transparent bidding system?

    70% of Canadians own their own home. Trying to set up a system that “would result in lower prices” is not going to be popular. A system that is fair to both parties would be okay – not sure how that would be different than what we have given no-one is forcing anyone to place an offer. Seems fine to me. Just market conditions that are creating havoc.

  119. There are a number of houses that have been on the market for quite a few weeks and frankly if I was buying I would consider going low on a couple of them. Depends if there is anything out there that you really want in the first place.

    What would be fairer is to provide for a mandatory clause that allows five days to have the house inspected after an accepted offer.

  120. If you are to have a delayed offer/auction then you have to have an unbiased auctioneer conduct the auction. That auctioneer that has to follow the rules and regulations of auctions. That could be a lawyer or Notary or an unbiased third party that has been accredited and has appropriate E & O insurance.

    This would drive up the cost to sell a home for sure and given sellers pay real estate commission in the current system not sure why a seller would want to have someone that is unbias.

    And really isn’t that what we all want. To be treated fairly when making a decision that will likely be the biggest financial decision of our lives. A decision that will impact the rest of our lives.

    I don’t see how an auction where you have to make immediate decision is the best way to purchase a home.

  121. If you are to have a delayed offer/auction then you have to have an unbiased auctioneer conduct the auction. That auctioneer that has to follow the rules and regulations of auctions. That could be a lawyer or Notary or an unbiased third party that has been accredited and has appropriate E & O insurance.

    The listing agent can not also be the auctioneer as it may result in a conflict of interest in a fair bidding process.

    And really isn’t that what we all want. To be treated fairly when making a decision that will likely be the biggest financial decision of our lives. A decision that will impact the rest of our lives.

  122. Is there any evidence out there to suggest that an open bidding system would result in lower prices on average?

    Turning that around, is there any evidence out there to suggest that the current non-transparent bidding system would result in lower prices than an open and transparent bidding system?

    someone is still going to bid 50k or whatever over to have certainty in a rising market

    You can always establish rules on bid increment limits so that such bully bids can’t be issued

  123. I think the amount of times the market is hot enough to create bidding wars is limited and rare. I don’t find the current process terrible and Auctions and open bids would be subject to competitive pressure – someone is still going to bid 50k or whatever over to have certainty in a rising market. Bids might be irrationally high open or closed because of this – and maybe higher in an auction than closed bid. The real problem is a rising market with not enough inventory creating a potentially justifiable sense of urgency.

    When we bought in 2012 we were the only offer. The place had been priced high and taken off the market once due to lack of interest. Good old days when a high price offended buyers with choices who walked away rather than make an offer. Probably happen again – question is when.

  124. If you are really concerned lots of clauses a half decent realtor can draft for you….off the top of my head.

    This offer is contingent upon the seller receiving one or more additional offers with respect to the subject property. Proof of such will be provided upon acceptance. Should there be no competing offers this offer is hereby withdrawn and the seller agrees to allow the buyer to resubmit prior to contemplating any other offers. Or something to that effect.

  125. I think it should just be that if you have an offer on the table you should be able to see all the offers. Then, until time runs out or an offer is accepted, anyone with an offer can make another. It’s not that hard really.

  126. Hmmmmm….the Australian system has some issues too. Seller sets a reserve so you could do all your inspections, etc., and then not meet the reserve. That would suck…..”you are the highest bidder, but sorry you don’t get the house.”

    Also, a few bad apples down there as well that have set up “dumby” bids at the auctions.

  127. Is there any evidence out there to suggest that an open bidding system would result in lower prices on average? I am picturing people getting emotionally caught up in the process in front of the home and duking it out against each other. Plus imagine only having seconds to decide whether you want to go up higher or not?

    Other issue I see is in a delayed offer situation at least you can make a conditional offer and have a chance sometimes. With an auction you have to be unconditional which increases the financing risk (something you can’t officially secure without an accepted offer).

  128. More transparency around multiple bids is required.

    The Government needs to prohibit the practice of blind offers in which interested home buyers are required to submit their best and final offer upfront without ever knowing the price, conditions, or existence of any other bids. The process is nothing more than a blind guessing game which unnecessarily drives up prices.

    Bids are kept secret in Canada and no would-be buyer knows what the others have offered in a multiple bid situation.

    CBC Marketplace recently offered a solution: http://www.cbc.ca/news/business/here-s-how-to-buy-a-home-in-australia-should-canada-follow-its-lead-1.3826727

    In Australia, the process is transparent. Over about a four-week period leading up to the auction, interested house-hunters can schedule visits and inspections on the home in order to prepare their bids. Then on bidding day, interested buyers gather on the sidewalk outside the home and place their bids out in the open, in an auction led by the seller’s agent. Buyers can see exactly what the competitors are doing, and they can decide whether they want to keep going or not. Since all bids are public, no one bidder has an advantage.

    The government will not act on this lack of transparency in the home buying process until this serious issue receives greater attention in the media and voters.

  129. Any listing that says “offers will be accepted at such and such time” is underlisted.

    Even if it ends up receiving no offers? Which happens quite a bit.

  130. Well as long as Introvert is fine with it, then we should be okay.

    There was another way of describing the core and that was how far you were from downtown City Hall. If you are within an 8 kilometer radius of city hall that would be the urban core. That would include areas such as Broadmead, Sunnymead, Gordon Head, View Royal but not the semi-rural areas of Saanich West.

  131. Vicbot, I’m not saying you are fibbing about your home. I suspect your house was actively listed for sale until your conditions were removed and that took 8 days from the time it was listed on VREB.

  132. Saanich West is core?

    Yes. All of Saanich is considered “core.”

    So if I buy a house on Brookleigh Road I can look ahead to calling it in “the Core” when the time comes for resale? I think we need a better metric.

    Most rural properties in Saanich aren’t too far from major roads, so I’m fine with lumping them in with “urban” Saanich, especially for simplicity’s sake.

  133. “It’s definitely Oak Bay, Victoria, Saanich, and Esquimalt. But sometimes View Royal is also included, so we’ll need a ruling on that”

    Saanich, eh? So if I buy a house on Brookleigh Road I can look ahead to calling it in “the Core” when the time comes for resale?

    I think we need a better metric.

  134. Nope, John Dollar. The data isn’t being manipulated. We bought on the 1st day (the seller accepted), the deal was subject to an inspection 2 days later, and all the paperwork was completed a week later, thus 8 Days on Market. It would have been stretched to 2 weeks if the sellers hadn’t delayed their trip out of town.

    For unconditional offers, Marko would have to comment – perhaps something similar to our situation, where it took a week to complete the legal paperwork, money transfers, etc

    And yes the reality of what we consistently saw for each desirable house was that the buyers crowded in the day before public MLS posting. The only reason we got the house was because we learned from our mistakes when losing other houses to faster-acting buyers.

  135. Vicbot, that would be Alternative Facts on your part.

    Anything under 30 days exposure is definitely favoring sellers. But to suggest that the data supplied by the real estate board is being manipulated to be higher than the actual days is worthy of Kellyanne Conway.

    Autotrader? WTF is that about. Houses are not subjective. They are this large and this old and in this location. Buyers may buy on emotion but banks don’t lend on it.

  136. There is under listing taking place, but proving it is a tad more tricky.

    Any listing that says “offers will be accepted at such and such time” is underlisted.

  137. Under listing gone wrong perhaps?

    712 Brookridge Pl
    ML No: 373555
    Assessed : $675,000
    Asking : $600,000

    Sold : $595,000

  138. It’s definitely Oak Bay, Victoria, Saanich, and Esquimalt. But sometimes View Royal is also included, so we’ll need a ruling on that.

    The VREB includes View Royal.

  139. Introvert, you should really read your own comments as you were the first to use this phrase.

    You don’t get it.

    Is there an agreed definition of this vaunted and hymned place called “The Core”?

    It’s definitely Oak Bay, Victoria, Saanich, and Esquimalt. But sometimes View Royal is also included, so we’ll need a ruling on that.

  140. That won’t work TallGuy, If a property is competitively listed with other similar properties then the market exposure isn’t likely to be one day.

    Problem is houses are incredibly subjective and buyers buy on emotion for the most part, it is not like competitively listing a Honda Civic which you could easily do by taking a quick look at autotrader.ca.

    There is under listing taking place, but proving it is a tad more tricky.

  141. “Since at least 2012, we saw crowds of people pouncing on a house the day before it appeared on MLS (through their PCS systems), and being toured around the property by their realtors – before any open house or “general public” viewing.”

    Yep. The owners of any decent houses were often accepting full price or higher offers on day #1 well before these auctions started. If a house came on the market and you were at all interested in it you had to put in an offer right away after viewing it. Offers with conditions were the norm and so there was still the chance to back out, but you still initially had to act very quickly on anything good in the core. Although I hate them for other reasons, the introduction of delayed-offer blind auctions last year was almost a relief. Suddenly you had 3, 4, even 5 days to consider putting in a bid! Conditions are another story now but I appreciate being able to at least look at a house twice + before I buy it.

  142. “Is there an agreed definition of this vaunted and hymned place called “The Core”? ”

    LOL, agree Jerry – we need to standardize this definition – perhaps Leo S could post a permanent definition of the core to this site, and then all stats that anybody posts follows this definition?

    eg., What is the core in this case: “the average days-on-market for houses to sell in the core last month was 28. Imposing a shorter time of 8 days will not allow the property to be adequately exposed to the market.”

    Also, the relative DOM to price range is very interesting, but actual time-before-seller-accepts-offer is usually less than DOM. For example, when we bought, the official DOM for the house was 8 days, but our offer was accepted the 1st day it was listed.

    Ultimately, length of market exposure is incredibly short here in Victoria for the most decent properties because there’s so much demand for so few properties. It doesn’t matter if official DOM is 8 days or 20 days. Since at least 2012, we saw crowds of people pouncing on a house the day before it appeared on MLS (through their PCS systems), and being toured around the property by their realtors – before any open house or “general public” viewing.

    So agree with TallGuy, from our own experience, if you had let the market determine DOM for the most decent properties, the DOM would be 0 – the day before the listing appeared on public MLS.

  143. That won’t work TallGuy, If a property is competitively listed with other similar properties then the market exposure isn’t likely to be one day.

    For example, the average days-on-market for houses to sell in the core last month was 28. Imposing a shorter time of 8 days will not allow the property to be adequately exposed to the market. That could result in a sale price less than market value or more than market value depending on the asking price and the property.

    If you want to create excitement and entice multiple buyers then under price the property and have a short exposure before you accept offers.

    For those that are interest the average days on market is different for different price ranges. Showing which price ranges for houses in the core are hot and which ones are steaming.

    Days to Sell, Average

    Sold Price 2016 2017
    $0 – 200 255
    $200 – 300
    $300 – 400 55
    $400 – 500 40 52
    $500 – 600 25 16
    $600 – 700 23 27
    $700 – 800 28 16
    $800 – 900 40 31
    $900 – 1,000 21 22
    $1,000 – 1,250 26 25
    $1,250 – 1,500 22 38
    $1,500+ 38 46

  144. Exposure is the Days-on-market.

    You list the property for sale at a fair price and the buyers present their offers. That’s not the same as the listing agent under pricing the property and setting the days on market so that they can entice multiple offers in a week.

    The first is determined by the marketplace and the latter is set by the agent.

    The public has an expectation of being treated fairly. I doubt that most understand the difference between normal marketing and an auction. They are expecting to be treated fairly and are unaware that an orderly liquidation of a property under normal marketing conditions is not the same as an auction or delayed offer. Especially when the delayed offer or auction is not being conducted under the same rules and regulations that auctioneers have to adhere to.

  145. Marko, I think the problem is that there are different kinds of realtors out there. There is you, who tells their client not to bother, and then there are the pumpers, who encourage their clients to go full out. And until a client has had their sole crushed a few times by being outbid, they trust their realtor.

    I disagree with John Dollar. The market determining the exposure won’t change anything, and will likely make it worse. Right now the market would give any half-decent place maybe a day of exposure before it was bought. Anyone buying to speculate isn’t going to care about an inspection, and I believe speculation is rampant right now.

    I made an offer on my place after one day because I wasn’t going to risk any other offers coming in and raising the price. It was a nice place in a good location and I wasn’t going to take any chances.

    I think a strategy might be to make it illegal to list for less than assessed value. That doesn’t mean that it wouldn’t be sold for less than assessed value, but rather that the interest in places couldn’t be falsely inflated past a certain point. I know that not all homes are assessed fairly, but not every angle can be addressed without over-regulating.

  146. The exposure to the market place should be market determined.

    So how does this work in real life?

    Knowing that there may be eight bidders for the property, some buyers may offer well over fair market value under the erroneous assumption that the property must be worth the amount as so many are bidding on the property.

    Or the top bid may be under what the property would have sold if it was listed higher with no offer delay. I’ve seen the underlist delay back-fire just as many times as I’ve seen it work.

    I agree that underlisting is super annoying. 80% of my clients listen to me and we just don’t book the showing but 20% see a listing for $499k and think $550k would work and realistically the house is going for 620-650k based on recent comparables. Waste of everyones time. If the house was listed at $599k it would still go over ask and save a lot of time.

  147. No.

    The exposure to the market place should be market determined.

    Not imposed by an agent that all offers are to be presented on a certain date. Then if the agent baits buyers by under listing the property that could lead to multiple offers and irrational bids.

    This is iterated on this blog. “the home was listed for 699K, had multiple offers and sold in a week well over asking price” All of which were deliberately created by a less than normal marketing practice by the agent. The aforementioned may also lead some prospective buyers to believe the market is “hotter” than it really is and these potential buyers will be more aggressive in their bids, not wanting to be outbid.

    Knowing that there may be eight bidders for the property, some buyers may offer well over fair market value under the erroneous assumption that the property must be worth the amount as so many are bidding on the property.

  148. I’m going to do the same Dasmo. My PC was supposed to hold my retirement and if this isn’t the case, I’m not sure what the benefit for being a PC is. If you wouldn’t mind, let me know what you find out. I think Totoro is probably right that it seems like a big problem but likely will apply to a subset of PCs.

    Also, I was thinking about the insurance issue and I think there must be a way around it because a lot of docs work part-time. Not sure how that works. But I still think just because you’re a PC, doesn’t mean you shouldn’t get to retire fully. Of course everyone has to pay taxes but it might be that you’re better off in a defined benefit plan, making less money and working less hours, than you are as a PC with overhead, no pension, no benefits and no work/life balance.

  149. Is there an agreed definition of this vaunted and hymned place called “The Core”? I ask because I thought I knew what it was until a few days back when Marko was commenting on asking prices for new condos at Christmas Hill and he said something like “not bad pricing for the core”.

    I clearly have been thinking about this all wrong in that case.

  150. Marko, it boils down to exposure. A property should be exposed to the market for a reasonable period of time. That exposure is set by the marketplace and should not be set by an estate agent.

    An agent that limits market exposure to 8 days may be interfering in one of the factors requisite to a fair sale. The prospective purchasers should be informed that the property is being offered for sale using less than normal marketing practices and that the eventual sale/market price paid may or may not be at fair market value.

  151. But in a closed bid auction, you aren’t aware of how much you overpaid. There is no accountability.

    If the market is dead and a house is sitting on the market for $799,900 and you buy it after 60 days on market for $775,000 you still aren’t aware of how much you overpaid. Could have sold for $730,000 if you never made your move?

    In a closed bidding situtation, in my opinion, you should be making an offer based on recent comparables not based on the amount of bids (beyond 3). If there are 6 offers at 4:30 pm and you are offering xxx,xxx and at 4:55 pm you find out there are 8 offers and you decide to revise your bid to xxx,xxx+$20,000 you are playing with fire as it is a complete guessing game.

    In my opinion there are only three different situations

    One offer
    Two offers (this is the most difficult one to read).
    Three or more offers…….once you get above this number trying to chase a number based on the amount of bids is not the best strategy in my opinion.

    At the end of the day what is going on right now is very market specific. I don’t hear anyone talking about assignments anymore in Vancouver…..what are you going to do? Assign an underwater contract.

    This market will run it’s course here as well. Either inventory will pick up or prices will go to the point where demand starts to drop off due to lack of affordability. The multiple offers will disappear for another 7-8 years other than the occasional property.

    I was in real estate for 5+ years and over 350 transactions before I saw my first unconditional offer and now I would say 80% of offers I write are unconditional and vast majority are unsuccessful.

  152. If someone actually held a gun to your head that would void the contract. Obviously, no one is going to literally hold a 44 Magnum to your head.

    Thank you for that completely unnecessary, and very odd, specificity.

  153. If the government taxes retained earnings in a PC at 50% as Garth states, it would be devastating to me. Having recently retired as a doc at age 67, a lot of my retirement is based on dividends from my PC. Being self employed means no pension.

    I see no evidence of this in the proposed draft changes or of any changes to the treatment of retained earnings except for the situation where the small business tax rate is multiplied through a partnership. Perhaps CC can weigh in.

    Your argument holds no water.

    Maybe, but I have been in a blind auction situation and we were not given the opportunity to counter. You were. It is up to the seller how this is handled and the seller in our case just took the highest offer which was not us. There is no rule on this.

  154. John Dollar:
    “If you get caught up in an auction and or delayed offer and feel that you have been mislead into overpaying for a property you should immediately consult with a lawyer to nullify the contract of sale or be compensated by the agent for the difference in market value and your offer.”

    But in a closed bid auction, you aren’t aware of how much you overpaid. There is no accountability.

  155. You can retire like everyone else. You just have to pay tax like everyone else. Anyway I’ll be looking into this since I am self employed and employ a similar strategy of paying myself.

  156. But are real estate agents licensed to conduct auctions?

    In Alberta, sales of real estate at public auction usually combine the services of a
    real estate broker and an auctioneer. The Real Estate Act regulates this
    type of sale.

    This may be a reason why you never hear a real estate agent in BC call these sales auctions. Instead they use the term “deferred offers”. There also may be a potential conflict of interest for the real estate agent acting as both listing agent and auctioneer. And not following rules of how to conduct an auction as set out by Public Auctions Regulations and the Sales of Goods Act. Those regulations may prohibit blind auctions.

    If you get caught up in an auction and or delayed offer and feel that you have been mislead into overpaying for a property you should immediately consult with a lawyer to nullify the contract of sale or be compensated by the agent for the difference in market value and your offer.

  157. Dasmo, I’m not a physician but from what I understand, professional liability insurance is outrageously high, so to work one day a week would cost tens of thousands in insurance. And isn’t the point to stop working? Just because you’re a physician doesn’t mean you shouldn’t be able to retire like everyone else.

  158. Here is the problem with the blind auction. It creates these bully bidders. I have friends that tried to buy a place in Naniamo. They lost to a higher bid. They would actually have offered more for the house but didn’t have the opportunity. They just said screw this and stepped out of the market. (smart move IMO). What this does is create a situation where people feel they need to bid higher the more they keep losing until they become the bully bidder. It’s the perfect phsycological setup for the sellers.

  159. @ dundigg’n
    No need to take it out in one large sum. As far as I’m aware this is only applicable if the corp is inactive. So you can’t work for 20 years and keep money in a corp then retire and still draw dividends. No big deal. Instead of retiring cold turkey, You keep working one day a week and then draw your dividends out. Shoot work one day a year…. I haven’t looked up the new rules mind you. Perhaps I shall….

  160. @ Tall Guy,

    That’s a false choice predicated on your opinion that the bids should be revealed. Not revealing them for better or for worse, is how the system works and until that changes, realtors are required to abide by the rules. He’s just doing his job.

  161. When I brought this up before, I was told that it was the Realtor’s job to get the best price possible for their client.

    Now I’m told that it’s unprofessional to reveal the prices of the other bids.

    Which is it?

  162. I’m not sure why you’re being so secretive. The listing agent told us the value of the other bids when we lost out on a place. Is this not professional behavior?

    No it is not, and in fact could get that listing agent in trouble depending on the circumstance.

  163. At the some time there are people out there in desperate need of a GP without one.

    True, but the solutions is likely as Leo outlined.

    If you had to choose between strategies for addressing the shortage of GPs I think training more doctors is likely more effective than a tax cut or tax holiday for GPs.

    BTW – lots of GPs don’t even make it into the top bracket.

  164. totoro:

    “You mean because only the owner knows what the offers are? I’m not sure I agree. If you start posting open bids my I think you’d need to allow the opportunity for bidders to counter and in some cases this type of competitive open bidding leads to really high offers – just like an auction. Not sure in a hot market that closed bids are not more favourable to some home purchasers. I’d like it better than an open auction scenario. I’d rather not have the pressure to know that if I just offered another 10k I could beat them even if it was out of my comfort zone.”

    When we made our offer the listing agent called us back and gave us the option to increase our bid over the highest bid. How exactly is this different from an open auction? They could indefinitely go back and forth between the bidders until no one could compete anymore.

    Bidders already have the opportunity to counter
    Bidders are already bidding really high offers, sometimes severely over the next highest bidder, such as the Blenkinsop case
    Bidders are advised by their realtor what a winning bid should be. They aren’t bidding on the true market value of the home. In the case of the Blenkinsop house, if the average bid was $727k, that is the current market value of the home.

    Your argument holds no water. At least in an open auction I can hear the offers coming out of the other bidders’ mouths and don’t have to wonder if the listing agent or my own agent is bullshitting me to get a higher offer.

  165. As our society gets richer and richer surely it is rational to take some of our increased wealth in the form of increased leisure. Were the 1800s when most worked 60 hours a week really some kind of paradise?

    At the some time there are people out there in desperate need of a GP without one.

  166. @Dasmo. Taking the retained earnings out in one lump sum would be taxed as income and would generate a large whack of taxes vs taking it out in small amounts as dividends.

  167. I’m not sure why you’re being so secretive. The listing agent told us the value of the other bids when we lost out on a place. Is this not professional behavior?

    I don’t feel comfortable laying out the specific details of my clients’ offer on a public forum…..seems reasonable enough to me.

  168. As for “disincentive to work”:

    As our society gets richer and richer surely it is rational to take some of our increased wealth in the form of increased leisure. Were the 1800s when most worked 60 hours a week really some kind of paradise?

  169. Marko:
    “I only know the offer I wrote and the winning offer, not sure how Allison would know the other offers?

    All I am saying is the offer I wrote does not match what Allison outlined.”

    I’m not sure why you’re being so secretive. The listing agent told us the value of the other bids when we lost out on a place. Is this not professional behavior?

  170. Am I missing something here? The tax is only if the corp becomes inactive. So there will just be a time when the doc slows down instead of outright retiring. Then they draw the money out. Big deal.

  171. Maintain a bit of perspective on tax changes/tax burden. The particular change under discussion affects only a proportion of doctors. The rest, likely the vast majority, are just affected by the overall increase in the top bracket.

    If you made 600 K of income in BC in 2014 you paid $254,991 in combined fed and prov income taxes.

    If you made the same in 2016 you will pay $260,561. A difference of $5570.

    That may make a tiny difference to some people in terms of their marginal willingness to work a bit more. It’s unlikely to motivate someone who was working 50-60 hour weeks to suddenly switch to 30 or 40 hours.

    If that big earner worked hard and earned an extra 100 K they would have kept an extra $1900 in 2014 relative to 2016.

    Those are worse cases as there are still many legal ways to shelter income.

  172. Imagine if 23,000 left Victoria when the inevitable next recession hits. I’ve been mentioning congestion around town for months but all the bulls want to compare it to Vancouver where the market is tanking with all those newbies.

    Garth is very entertaining and informative. His refusal to believe Asian money laundering had anything to do with the Vancouver boom and always plays the race card is beyond belief though. You have to be blind or have a financial motive to not see.

  173. If someone actually held a gun to your head that would void the contract.

    Obviously, no one is going to literally hold a 44 Magnum to your head. But there are other ways to coerce or apply wrongful pressure on someone into signing a contract that he or she would not normally enter into.

    For example, delayed offers are not a typical listing process and unless the prospective purchaser is made aware of the difference in the marketing scheme bidders may be mislead by erroneous and unverified statements and pressured into making a decision due to a shortened deadline in which to make an offer. The delayed offer is intentionally placing a heightened level of stress on the buyer over that of a property that is exposed to the market under normal marketing conditions.

    Because of this departure from normal marketing practices, additional protection should be extended to the buyers of properties under a delayed offer much like those extended to buyers of new condominiums.

    What that would mean for the buyer that successfully bid $851K is that they would now have 7 days to cancel their offer without penalty.

  174. If the government taxes retained earnings in a PC at 50% as Garth states, it would be devastating to me. Having recently retired as a doc at age 67, a lot of my retirement is based on dividends from my PC. Being self employed means no pension.
    I worked long hours and lived a relatively frugal life paying off my student loans and putting my five kids through university. I paid myself a salary and saved as much as I could in my PC to fund my retirement. I didn’t have the luxury to decrease my hours or take long blocks of time off.
    So if Garth is right, either the government will have to step up and provide pensions for doctors, of face an even more acute shortage.

  175. totoro might be right about the roll out. I will see my accountant who specializes in medical corporations next week. I have organized into a discretionary family trust, so I might be protected to some degree.

    I think the issue around reducing hours due to taxation is really one of diminishing returns. If you start making less money the more hours you work, what’s the point? I would rather follow Marko’s example and take off for two months of travelling than spend more hours making less.

    One of the problems with health care is that physicians are doing a lot of things that other professionals could be doing. I once read a study many years ago now that found that 70% of GP visits are actually for mental health reasons (I believe it included things like depression, anxiety, stress, pain, and illnesses that are attributable to behavioral issues like smoking, poor diet etc). If that work could be off-loaded to the professionals with expertise in behavior change (psychologists like me) then that would relieve an enormous burden for physicians and be cheaper in the long run because psychologists are cost less than physicians and their treatments last longer for these kinds of conditions.

    Anyway, I’ll see what my accountant says.

  176. Surprising amount of growth in some core areas.

    You can feel it in the traffic on Mckenzie, Blanshard, Hillside, Douglas……5-6 years ago at 1 pm, for example, getting around was a breeze….now not so much.

  177. My GP works three days a week as part of some “team practice.”

    And would fewer taxes get him to work full time? I doubt it. Once you make enough money the time is much more important than the money (to some people).

  178. No, but they were disadvantaged due to information asymmetry.

    You mean because only the owner knows what the offers are? I’m not sure I agree. If you start posting open bids my I think you’d need to allow the opportunity for bidders to counter and in some cases this type of competitive open bidding leads to really high offers – just like an auction. Not sure in a hot market that closed bids are not more favourable to some home purchasers. I’d like it better than an open auction scenario. I’d rather not have the pressure to know that if I just offered another 10k I could beat them even if it was out of my comfort zone.

    And it sounds like the information being transmitted below is misleading in any event.

  179. Vancouver Real Estate Inventory Skyrockets Over 215% In January

    followed by

    This sent the total number of homes listed up 9.1% from the same time last year, leaving 7,238 listings available for sale.

    Conclusion: inventory is below the 10 year average.

  180. Yep. And why should doctors be different? The solution to the doctor shortage is not to get them to work 80 hour weeks (and make more mistakes because of that overwork).

    My GP works three days a week as part of some “team practice.” I am not saying 80 hour work weeks but don’t de-incentivise doctors who want to work 50-60 hours which in my opinion is managable for some without increasing mistakes. Would you reather go see a talented doctor working 55 hours a week or a useless one working 35 hours a week?

    Let doctors make their own choices re work-life balance, no need to nudge them towards working less in my opinion by increasing taxes.

  181. Vancouver Real Estate Inventory Skyrockets Over 215% In January

    “January 2017 was a terrible month for Vancouver real estate. Sales are declining, inventory is building, and prices are dropping.

    New inventory is hitting the market at a rapid rate, while sales are simultaneously declining… 4,140 new listings hit the MLS in January, representing a mind boggling 215.5% increase from the month prior. This sent the total number of homes listed up 9.1% from the same time last year, leaving 7,238 listings available for sale. This represented a 14.1% increase from the month prior.

    The theory that homes will begin hitting the market with aggressive price cuts is starting to look like it is playing out. If this is the case, the city could see prices drop rapidly since domestic buyers in Vancouver don’t have the income required to support prices at these levels.”

    https://betterdwelling.com/city/vancouver/vancouver-real-estate-inventory-skyrockets-over-215-in-january/

  182. For me taxes led to a better work-life balance which could mean potentially living an extra few years in the end. If it wasn’t for taxes I wouldn’t have taken off for 6 weeks in the middle of the hottest market on record on Victoria and what would I really have? A few more dollars in my bank account and zero experiences.

    Yep. And why should doctors be different? The solution to the doctor shortage is not to get them to work 80 hour weeks (and make more mistakes because of that overwork). Train more, pay them more in the family practice areas, and we will have more. It’s not rocket science, they just don’t want to spend the money.

  183. No one held a gun to that person’s head.

    No, but they were disadvantaged due to information asymmetry.

  184. Looking back I totally don’t mind the tax changes from last year and probably won’t mind whatever happens going forward. The 6 weeks I took off last year as a result were awesome. I travelled, met my hero Matt Rimac and a bunch of other people I wanted to meet for a long time. Then when I came back I started working out, have lost 10lb in the last 5 months and hoping to do another 10 in the next 6 months.

    For me taxes led to a better work-life balance which could mean potentially living an extra few years in the end. If it wasn’t for taxes I wouldn’t have taken off for 6 weeks in the middle of the hottest market on record on Victoria and what would I really have? A few more dollars in my bank account and zero experiences.

    Just saying I wouldn’t be happy if I needed medical attention and my doctor was gone for two months because of exessive tax reasons 🙂

  185. Marko, are you saying there was more than 1 offer over 800k on the Blenkinsop house? (when you said “doesn’t add up”). Would be interesting to know.

    I only know the offer I wrote and the winning offer, not sure how Allison would know the other offers?

    All I am saying is the offer I wrote does not match what Allison outlined.

  186. Agree with providing incentives for doctors.

    I’m just not sure the change is as catastrophic for doctors as Bitterbear is indicating and definitely not what Garth is saying. His post was extremely unclear and inflammatory and got people riled for little reason imo but to be inflammatory and portray himself as a guru with secret inside knowledge.

    My best guess is that it might not affect Bitterbear at all . It will affect groups of radiologists who pool their retained earnings through a partnership and funnel them into an investment corporation to ex. buy up commercial property. This does occur and does provide an incentive for very high earners to work together this way that the tax change reverses.

  187. “If this is the case, there is no benefit to me to be working the long hours I work.”

    I understand and relate to this, eg., sometimes I worked long hours because of 2 reasons tied together: a customer needed my help + I was compensated fairly for it (eg., performance bonuses or time off).

    If you removed the 2nd factor (compensation), I was doing charity work, and those customers weren’t charities, and I’m human, so it’s better to have the time off and stay healthy and re-charge my batteries – to be more effective at work and life overall.

    Numbers Hack, totally agree with this: “If one invests 10+ years in post secondary education at great expense to themselves, then you SHOULD earn more money and have incentives to work HARDER which makes the SYSTEM more EFFICIENT.”

    Marko, are you saying there was more than 1 offer over 800k on the Blenkinsop house? (when you said “doesn’t add up”). Would be interesting to know.

  188. There were 6 offers. 5 of them ranged from 710-727k with conditions. Ask was 669 k . One person made an unconditional offer of 851k! That home should have sold for 727k.

    What does it say about our market when someone unironically says, “That home should have sold for [$58k over asking].”

    Can you imagine being the one that bid more than $100k too much?

    No one held a gun to that person’s head.

  189. These proposed changes to taxing retained earnings and income splitting are a great relief to me. If this is the case, there is no benefit to me to be working the long hours I work. I will reduce my hours and withdraw services.

    Good for me, bad for patients. I wonder if the government has thought of that.

    I took 6 weeks off last summer and will probably take a longer period off work this year. I made some other changes too….stopped offering mere postings in Sooke, started a PREC last year, etc., etc.

    Now, me taking time off work because of taxes is no big deal as I don’t really do anything meaningful for society but I was arguing on VV about this last year when it came to doctors.

    If you are a GP you are being taxed the least seeing your crop of patients 9am-noon. Then after noon you start getting into the higher taxation brackets and after 5 pm and Saturday work you are taxed to death. If I am not willing to drive out to Sooke to do a mere posting because of taxes can’t see a GP sticking around to 6 pm to see a really annoying patient while his or her family waits at home, so they can get slammed on taxes. I would just take off at 5 pm and say screw it and given the younger crop of doctors are more into work-life balances taxes give them even more incentive to work less.

  190. We actually made an offer on 3716 blenkinsop. Don’t be lured in. There were 6 offers. 5 of them ranged from 710-727k with conditions. Ask was 669 k . One person made an unconditional offer of 851k! That home should have sold for 727k.

    Doesn’t add up as I wrote an unconditional offer and it wasn’t the 851k one.

  191. @ Allison

    Maybe this will make you feel better, or not. We were told there were 8 offers and about 6 were serious, aka unconditional. We also made an offer, it was just over 727k, in the range of all the other offers. We haven’t made any offers in years (just weren’t in the position or didn’t like anything on market at the price we were willing to pay).

    I think it is good news that the banks have really tightened up. We are in a strong financial position, but STILL had a hard time getting pre-approval (in comparison to 7 years ago when I was pre-approved for the same amount on my single income which was a quarter of what we make now). We technically weren’t even pre-approved for this because of the low assessment (562) and our high offer (over 700), but we put a solid offer in anyways.

    The crazy part – even we knew (or thought) were insane and we knew we were overpaying for the house (didn’t want to pay over 700 tbh), PLUS we’d have to liquidate a huge chunk of our portfolio!

    Someone please tell me there will be a trickle down effect from these mortgage tightening rules. They’ve been in effect since October, we have experienced this ourselves now, yet sale prices are insane.

    @Penguin, totally know how you feel and agree. We are in the same situation.

    Sorry folks, I lurk here occasionally, a bit more recently, so I don’t really post. But thanks for all your informative posts 🙂

  192. Clearly it’s not about the money since you are relieved to work less.

    Er, clearly it is about the money. He is only relieved to work less if he is paid less. He is working more now because the tax preferenced income is worth the extra time it to him. Seems logical to me.

  193. These proposed changes to taxing retained earnings and income splitting are a great relief to me. If this is the case, there is no benefit to me to be working the long hours I work.

    I’ve heard this a lot and it seems like an odd attitude. If you don’t like the long hours why would you work them if you have the choice? Clearly it’s not about the money since you are relieved to work less. So why even bother in the first place?

  194. I don’t know why Garth has such a bad rep. I find his blog to be a good balance to the MSM house pumping messaging and worth checking in on now and again.

    I like Garth too, as a source of entertainment and sometimes he has housing news before others.

    What I don’t like about Garth is his tendency to make certain predictions based on very little data and then sweep them under the table when they turn out to be wrong. This nature has created the brainwashed followers he has that are immune to logic. While he does offer a valuable counterpoint to the mainstream media pumping houses, and much of the advice he gives is sensible, there are also many people that are worse off for buying into what he says.

  195. We actually made an offer on 3716 blenkinsop. Don’t be lured in. There were 6 offers. 5 of them ranged from 710-727k with conditions. Ask was 669 k . One person made an unconditional offer of 851k! That home should have sold for 727k.

    How do you know what the other offers are?

    If true that is crazy and just another example of how we need a transparent bidding process. Can you imagine being the one that bid more than $100k too much?

  196. Bitterbear, has your medical association given you advice on the tax changes? Seems to me taxes on retained earnings have only changed for a very small percentage of specialists who have incorporated in a Canadian controlled private corporation in partnership with other high earning doctors and this partnership may now have to split one 500000 small business tax rate limit whereas before each partner got one. If I was a doctor I’d just reorganize so I qualify for the 500000 small business tax rate on my own. This might not affect you anyway.

    Some doctors might leave Canada over this change, more might just do what high earners have always done, aggressive tax planning to reduce taxes.

    I do agree canada is going to lose more of its tax base to geographic arbitrage in very portable sectors like tech and it. Partly due to tax rates and partly due to cost of living, Canada should track this as its health care and social welfare system is a big draw for many still and rules around time spent in Canada to access this should be strictly enforced.

  197. Personally I like Garth’s posts, he basically repeats the same message to diversify investments and not to sink everything into a mortgage. Garth’s Rule of 90 is a good sanity check to consider when buying a house:

    http://www.greaterfool.ca/?s=rule+of+90

    I don’t know why Garth has such a bad rep. I find his blog to be a good balance to the MSM house pumping messaging and worth checking in on now and again.

    But yea, the comments section is a gong show of tinfoil hats and questionable levels of sanity. Have you checked vancouvercondo.info lately? Not for the faint of heart if you find Garth’s comment section objectionable.

  198. @bitterbear
    Government never thinks through these things (e.g. income splitting). If one invests 10+ years in post secondary education at great expense to themselves, then you SHOULD earn more money and have incentives to work HARDER which makes the SYSTEM more EFFICIENT. So sad to hear that if those changes to the tax code are true.

    Many ex-pat Canadians and professionals over the last 2o years have been “dis-incentivized” to work hard, in particular in Canada. From our own personal experiences and that of our contemporaries in our field, we at one time made a top percentile income in Canada. Over a 10 year period culminating to our move in the late 90s, our effective tax rate went from 33% to over 50%; in addition to a plethora of regulations + electrical hikes that made it impossible to operate a R&D/Manufacturing operations in Canada competitively.

    So our company had a choice, either face imminent financial gloom or move somewhere else. We hesitantly picked up our bags and left to the US and Asia. After seeing our peers go under one by one over the last decade, we made the right choice. Our business is multiplied in size and every faucet is positioned well to do in the Global economy. Our team is 90% Canadian, and have had many a discussion after a few cases of Moosehead, we’d all like to move back the operations back. However the sobering fact is that the tax code, in particular in BC, does not empower us to be competitive.

    IMO, there is over 1MM Canadian passport holders working overseas. Taxable revenue from just personal income would be $100-$150 billion CDN. I would assume that corporation revenue would be about the same size. Now imagine if we can get at least 25% of people coming back if there was an efficient tax regime? Now would be billions of dollars into our system!

  199. Oh I don’t wade. I don’t even dip a toe. Control f for Victoria once in a blue moon. I also don’t read the blog itself. Yes, control f is your friend my friend. Avoids all sorts of nonsense.

  200. These proposed changes to taxing retained earnings and income splitting are a great relief to me. If this is the case, there is no benefit to me to be working the long hours I work. I will reduce my hours and withdraw services.

    Good for me, bad for patients. I wonder if the government has thought of that.

  201. We actually made an offer on 3716 blenkinsop. Don’t be lured in. There were 6 offers. 5 of them ranged from 710-727k with conditions. Ask was 669 k . One person made an unconditional offer of 851k! That home should have sold for 727k.

    I believe the Victoria housing market is very hot right now, but not that hot. Sure there are some crazy and desperate people, but there is still hope

  202. Good on you totoro for wading through the cesspool of comments at greater fool. Garth’s posts are often amusing to read, but the comments are painful. HHV seems like a Mensa get together in comparison.

  203. @Cook: I think Shawnigan Lake is considered part of the Cowichan Valley. It’s closer to Victoria, and has it’s own little community, and the lake of course. It usually is a bit colder in the winter and gets more snow.

    From talking to friends who moved from Sooke, it sounds like the Cowichan Valley has a better sense of community than Sooke, and more of an agricultural feel – slow food movement – whereas Sooke is more of a resource/west coast town.

    Metchosin is beautiful. I lived there about twenty years ago when Langford was a hick town. I’m just not sure how affordable it is… I assume not.

    Duncan has its historical negative reputation (and the strip on the highway) that keeps prices from rising too fast, but for those who know about the changing tide it is quite desirable. If you’re interested, you should check out the Saturday farmer’s market when it starts up again in earnest in April. Walk around the downtown, have lunch at the Duncan Garage. Check out Cowichan Bay if you’ve never been there.

  204. Would not the Canadian dollar rise relative to the US dollar thereby allowing the Bank of Canada to raise rates earlier than expected?

    opposite

  205. If the US dollar falls. Would not the Canadian dollar rise relative to the US dollar thereby allowing the Bank of Canada to raise rates earlier than expected?

    “We want to sell the yanks our softwood and they want to sell us their dairy. The solution is that they buy our logs with cheese wheels.” cc’d to POTUS

  206. Something to think about…

    “The MLS home price index (HPI) clearly shows Vancouver prices dropping after the province implemented a 15 per cent property transfer tax on foreign buyers.

    Vancouver is, of course, a different market than Toronto. But the HPI showed that prices in areas that were not hit by such a tax (but were affected by changes to federal mortgage rules), kept climbing.

    In case there was any doubt what force is at play, note that Victoria has tracked closer to Toronto’s behaviour than Vancouver’s (no tax in Victoria either),” chief economist Douglas Porter wrote”

    http://globalnews.ca/news/3218598/toronto-foreign-buyers-tax/

    P.S. Not sure why the TREB is allowed to conduct it’s own survey — conflict of interest much??

    and…

    “Local realtors argue disingenuously that non-residents account for
    “only 4.9%” of Toronto sales, yet that a tax on these buyers would also cause havoc.
    To which we would simply respond: Is a 22% surge in prices not already havoc?”

    Douglas Porter, CFA, Chief Economist, BMO

  207. US mortgage borrowing on the decline as banks tighten credit lending. The Trump Tanking may be looming.

    Something that ‘usually only happens in recessions’ is popping up in the US economy

    “Banks also reported weaker demand for most types of mortgage loans over the fourth quarter, the Fed said, perhaps reflecting higher borrowing costs in the wake of Donald Trump’s presidential victory.

    The most worrisome sign, however, was a pattern seen among large and medium companies.

    “Although modest over the past couple of quarters, it is still worth noting that this is now the sixth quarter in succession that standards have tightened for large and medium sized firms,” Deutsche Bank economist Jim Reid wrote in a research note to clients.

    “This usually only happens in recessions.”

    http://static5.businessinsider.com/image/589a334b3149a119008b5cf7-1200

    http://www.businessinsider.com/feds-senior-loan-officer-survey-q4-2016-recession-warning-2017-2

  208. My preference for Duncan and the Cowichan Valley over Sooke/Metchosin/Langford is partly because as Gwac identified, you get more value for your house/land. The other factor is subjective: I spent a good chunk of my childhood summers hanging out on Shawnigan Lake. I have fond memories of it, and I like it better.

    The major advantage, I suppose, to Sooke/Metchosin/Langford is proper bus service to Victoria. In the Cowichan Valley, you are cut off from Victoria unless you own a car (save for a few commuter buses in the am and pm). I’m sure this has a limiting effect on demand and is one reason why you get more house/land for the money.

  209. I think Duncan will get you more house for the Money on a big lot than the others. Sooke may be close.

    Check the 719k brand new house I posted. You will not find that in any of the other areas. Longer commute though.

    You can also find a 200k to 250k house in Duncan

  210. Why Duncan versus Langford or Shawnigan Lake or Metchosin or Sooke? Not to familiar with the areas and Just wondering?

  211. You are nothing more than lucky to have had money at a time when house prices were relative to income.

    Funny, that’s how I feel about people who bought in the early 2000s.

    By the way, price-to-income ratio was already steep when we bought in 2009. It isn’t a recent development.

  212. Yeah, prices are rising. I know the rental inventory is way down, so rents are going up. I’m curious how the SFH inventory compares to previous years.

  213. Good question gwac. I’ll ask. But early reports were grim. They were getting a great deal from us though so it’s a tough benchmark to go from.

  214. We considered Duncan when looking for land. The strip is awful as would a commute on the Malahat but it’s in a great geographical location! Closer to all the natural playgrounds on the island. I wouldn’t want to live in a duplex downtown Duncan but a rural setting here would be a nice lifestyle.

  215. I’m not justifying $2800 rent. I’m thankful I don’t have to pay it. This is what our existing landlords offered us. They were actually discounting it from the $3000 they were renting it for previously. They were trying to entice us out early because then they could stage the house we are living in now. We thankfully have a place to go to….My point was that the rental market for a detached SFH is also insane in the core so this also has an effect on prices….

  216. Amen Ben. Some really beautiful countryside up in the Cowichan Valley, and the rivers are great for swimming in the summer. People knock Duncan, but I figure they never get off the main drag (akin to judging Victoria on Blanshard and Douglas Streets). Lots of beautiful spots along the water like Maple Bay and Genoa Bay as well.

    Only thing stopping me from moving is a kid who is in high school in Vic.

  217. I support a tax on empty homes that include airbnbs that are rented for more than 6 months for periods of less than 30 days. Vancouver is considering a 1 percent tax based on the assessed value. I don’t think that is high enough for Victoria.

    A tax of 2 percent would be appropriate to discourage airbnbs. For example, a $500,000 assessed downtown condo rented out as an airbnb for 6 months of the year would then have to pay an additional $10,000 a year if they wanted to operated as an airbnb. But not have to pay the tax if they rented the condo out to long term tenants. And most certainly we should not be granting tax exemptions or reductions for ten years on buildings like the Janion which is operating more like a hotel than a residence.

    Another possibility is to allow the current system to continue. Eventually the market for airbnbs will become saturated and daily rental rates will drop. That will leave our city with empty, derelict buildings and force the price of these units down. In otherwords, the market will take care of itself and we will be left with a legacy of condominiums of the type we don’t need in the city. Effectively, we are building tomorrow’s slums today. Which in my opinion is a mismanagement by the city of our land base.

  218. Hawk LOL

    Ben I go MTB at Mt Tzou, there is some amazing places there that people are unaware of. There are some greats lots on the mountain. Duncan/NC are very nice.

  219. gwac, why are you even here if you are a well off homeowner ? Bragging rights and ego stroking is all it seems for many like you. I’m a renter who wants to be a buyer down the road but not at prices based on insanity for what they are. Who are you again ?

  220. I hate to sound like a pumper for Duncan, but we moved to this area from Victoria three years ago and bought this past spring. For anyone who has lived on the island for a while, they may have a negative impression of Duncan, but the town is going through a cultural transition. There is a nice mixture of rural and village feel, the best farmer’s market on the island, and growing downtown core that is developing a feel similar to a cook st. village. There are a lot of young families who are moving here (many from Victoria). There are some great schools. Of course, work is always an issue, but the nice thing is that one can look for work in Naniamo (an easy commute) or Victoria. Lots of folks I know do a combination of working from home and working in one of these centres, and because the area is growing and attracting more money there are entrepreneurial and professional opportunities within the Cowichan Valley itself, and I find that many (including myself) are making a slow transition from one of the bigger centres to working here.

    What is missing here are the beaches you can access in Victoria, but there are places to access the water, like Chemainus, Cowichan Bay, and Mill bay, and of course the rivers that are right at your doorstep.

    Just wanted to point this out, maybe for younger people who are feeling hopeless about the possibility of home ownership in Victoria.

  221. Interesting that 20-30 people are seriously looking at any semi-livable home that pops up in the core. Serious lack of supply, lack of land, and continued demand means a SFH in the core will always be unaffordable/unattainable for most moving forward. Marko is quite right only the top 5-10% of net worth people will be able to afford a SFH in the core moving forward.

    Had a look at 1908 Greatford Pl on Sunday… just listed for $1.2m … Grandma’s house. 1940 build in a fantastic location just one block off Willows Beach. Totally in need of upgrades but had a new roof and great landscaping. the oven was in perfect condition from the 1950’s! Carpet in the bathroom… It indicates how often it’s only when ‘dearly departed’ leave that a home in that part of Oak Bay becomes available.

  222. What’s really needed for commuters to get to/from the Westshore and even beyond the Malahat is bring back the train – and make it a commuter train. This would open up the Cowichan Valley for family types working in the core but unable to afford a SFH there, and not wanting to drive the ‘highway to hell’ that is the Malahat drive.

    It is pretty laughable that we only have one lane heading out of the CRD over the ‘Hat. I guess we needed the Olympics here to have the gov’t upgrade that pathetic stretch of highway to hell. I am always beside myself how it seems everyone goes crazy driving on that stretch which is the most dangerous stretch in these parts. Another good option I’m sure government will never pursue anytime soon, is build a new bridge over the Inlet from Central/North Saanich, thereby avoiding the ‘Hat altogether (and many snow related problems as well).

  223. Marko:

    Air BnBs aren’t a problem, yet. Empty houses/condos aren’t a problem, yet. Foreign buyers/investors aren’t a problem, yet. Age restrictions aren’t a problem, yet (they are a problem). Red tape for builders isn’t a problem, yet (surely you disagree).

    I could go on and on. Why is it unfathomable to have proactive levels of government instead of reactionary who study issues way beyond the tipping point? There is the issue is market sentiment changing because of more regulation, but there is also the case of increased revenues possible through being proactive that could be used to generate more affordable housing.

    I realize there is a balance to strike as to not crash the market. But when there is nothing to rent, let alone buy, then some action needs to be taken.

    I mean, hell, Dasmo is justifying $2,800 a month for rent. And he’s right, that works out to paying the full mortgage, which to me means that they bought it to speculate rather than live in it. I’m a working professional and if I paid that much for rent my family wouldn’t eat.

  224. Curious about this house in Fairfield listed for 699. https://www.realtor.ca/Residential/Single-Family/17760743/1217-May-St-Victoria-British-Columbia-V8V2S8
    It would be a barometer on our house there although our lot is bigger. They had an open house last weekend.
    We are moving into our house there and it’s going to be tight moving into 890 sqft but man am I grateful we are not being tossed into the rental market right now. Brutal. Our landlords offered to rent us another of their houses (since they were kicking us out to sell) for only $2800/month. I’m not sure what the rental scene is like for SFHs but last spring it was insane! I had to get on my game fast. Get the reference letters in place, build your origin story and family branding. Have the money in place, get a hair cut and be fast and flexible. The hardest part was figuring out that anything under 2K was not actually a house for rent. They were always misrepresented. You would go there and there would be people in the a basement suite etc… I feel for the renters out there. It’s unpleasant. Although I always found it difficult it becomes more so when you have a family.

    This leads me to my other input on rising prices. The stats don’t seem to represent the rental reality out there. $2800 for a SFH that is difficult to even rent will cause upward pressure on this product. that said it feels like this is a new price ceiling that will be a bit sticky. If you do the math with these kinds of rentals then the $850k ish for a Gorden head box is supported at todays interest rates. If a suite is involved then a 900k house with a $1500/month income does seem like an option especially if mom and dad are taking on a portion of the risk and the bank will give you the money. Just thinking out loud, not pumping….

  225. Penguin, because you saw people weather tough times, you can be very realistic about the risks. If I was in your shoes, I would think first about where your career/job might take you. If there’s a good chance you’ll have to move outside of Victoria during then next 5 years, in your 20s & 30s (like I had to do to gain experience & move up the ladder), then it’s risky buying here now.

    It’s still possible to buy, but with this crazy market everyone needs to be prepared to hang onto their home for 10-15-20 years in order to weather any storms. I held during the downturns in the 90s, but I could only do this because I was in Vancouver, where there were more job opportunities. So there are advantages to having a job in a bigger city when there’s a downturn in the market.

    But if you have a secure enough job here in Victoria, you can keep paying a mortgage if it ever goes underwater – my parents held on in the 80s when the economy was bad, and homeowners and renters were leaving Victoria to find work. I agree that risky worldwide speculation in RE has driven up prices everywhere.

  226. Uh oh, is China bleeding again?

    “China’s foreign exchange reserves unexpectedly fell below the closely watched $3 trillion level in January for the first time in nearly six years, even as authorities tried to curb outflows by tightening capital controls.

    While the $3 trillion mark is not seen as a firm “line in the sand” for Beijing, concerns are swirling in global financial markets over the speed at which the country is depleting its ammunition to defend the currency and staunch capital outflows.”

    http://www.cnbc.com/2017/02/07/china-jan-fx-reserves-fall-more-than-expected-to-2998-trillion-near-6-year-low.html

  227. There are only a handful of buildings downtown that allow Airbnb and the city wouldn’t be issuing the zoning for projects going forward. I am all for taxes on Airbnbs but they aren’t a significant contributor to housing problems.

  228. Air BnB’s should be subject to all of the taxes, zoning, and regulation of hotels/regular BnBs. The income generated by Air BnB should be taxed as income.

    Full stop.

  229. “You can wait a few years, but that too is risky, as people like SweetHome can attest.”

    More fear mongering by the anal homeowner to prop up his paper profits. The risk has never been higher to jump into a market where supply is limited, rates are going up and qualifying for mortgages is getting harder. The perfect recipe for the perfect storm when the inventory eventually hits.

    Seeing multiple price slashes in all areas of town tells you it’s only the odd homes that are getting 100 people bidding and are usually promoted heavily by the agents like brokers do for a hot stock. If they don’t sell in a weekend they languish.

  230. Let’s put some logic behind those numbers of home owners that own second homes in BC.

    The 1% increase is for the entire stock of housing – not what is being bought and sold in the marketplace which only accounts for 3 or 4 percent of the entire housing stock at any time. For example if we have 100,000 properties in the core, a 1 percent increase would be 1,000 properties. Yet total sales in the core last year for houses were 5,768. In this scenario the number of properties purchased in the core for rentals would be 17% And that 1% increase is for all of BC while most buyers of secondary rental homes concentrate their purchases in city centers. Therefore the growth in property rentals in city centers such as Victoria would be larger than the provincial average.

    And lastly, the growth in population in Greater Victoria has been about 1 percent a year. If you believe that rental purchases are not a significant factor to price increases then you would also have to believe that population growth has little effect on prices too.

    In my opinion, the growth in purchases for rentals including airbnbs has been a driving force in price appreciation. In the case of downtown condos if those purchases had been for month to month rentals then they would have increased the vacancy rates. However, if they are used as airbnbs then they drive prices and do not increase the stock of month to month rents pushing rental rates higher. This is counter productive to affordability in the City.

    I support a tax on empty homes that include airbnbs that are rented for more than 6 months for periods of less than 30 days.

  231. Victoria has always been a desirable city in one of the most desirable countries in the world. That explains why it was always relatively expensive. It doesn’t explain why prices have surged in the large 2-3 years.

    The full extent of the surge cannot be explained but we had 7-8 years of a flat market (inflation caught up a bit), vacancy fell next to nothing. I am seeing suites rented for $1,300-$1,500 that use to be $900-$1,100 5-6 years ago, the Vancouverite influx had something to do with it, etc., lots of compounding reasons for an increase.

    I’ve said the same thing for the last 7 years I think interest rates are the biggest problem. The pressure to sell is extremely low and it allows people to move up the ladder while holding on to their previous property (hoarding). I have a feeling interest rates in the 4-5% range would flush out a lot of inventory onto the market place.

  232. Sorry to hear that Marko. This is where the commission pay really bites you.

    The flip side is the listing portion where you just throw it up and wait to collect the offers. No need to feel sorry.

    I meant that if I was a buyer personally I would just wait this market out right now. It is kind of a waste of time looking at houses in the core that are semi-attractive.

  233. Sorry to hear that Marko. This is where the commission pay really bites you.

    I’m assuming that you meant that you wouldn’t take the risk right now.

  234. Victoria has always been a desirable city in one of the most desirable countries in the world. That explains why it was always relatively expensive. It doesn’t explain why prices have surged in the large 2-3 years. I’m leaning towards SFH in the core being mostly speculation at this point.

    The “I’ve got mine” sentiment in this thread is loud and clear; RE – Introvert. You are nothing more than lucky to have had money at a time when house prices were relative to income. The NIMBY-ism and selfishness really shines through.

  235. As for buying I would personally take the risk right now and just wait it out…..I’ve written over 15 unsuccessful offers in a row at this point. I wrote 5 unconditionals in the last week and they were beaten out by an average of $100k give or take. Huge waste of time going to three inspections, pulling title documents, etc.

    Trying to buy a house is far worse than at any point last year. The number of unconditional offers and the above asking spread is just insane on semi-attractive core homes. I am not talking awesome homes, just livable without a messed-up layout.

    My thoughts are right now you have 1 house that pops up in a neighbourhood and 20-30 serious parties looking at it. In the spring we should be up to 2-3 houses popping up in the same neighbourhood so those 20-30 interest parties will at least get split up amongst the different homes.

  236. It’s not that long ago that people viewed Oaklands as undesirable. I remember showing a house on Shakespeare in 2011 and the home next door was also for sale (when there was inventory) and I could hear the potential buyers next door saying “nice home, too bad it is a white trash neighbourhood.” Having grown up in the Oaklands area I was like what????

    Fast forward 6 years and all of a sudden Oaklands is super popular, zero inventory, and it is the Westshore people look down upon. Maybe that will change in the future where the Westshore is more like Burnaby versus Surrey.

    I don’t think the core will ever be affordable again. Sure at some point in my lifetime it will drop 10-20% but will still be out of reach for the average family. At the end of the day will live in one of the best countries in the world, in my opinion, and Victoria is one of the more attractive places within that country and the Victoria core is constrained by water.

  237. I’m a millenial but I’ve seen my parents weather tough financial times when I was younger…

    I’m a Millennial as well. I bought a house in the core eight years ago that, at the time, I thought was really expensive. Today, people would kill to get this house for the same price.

    I just don’t get why anyone would buy a house right now. Bidding wars and no conditions? For 800k+ houses? That just seems so risky and I wonder why not wait a few years.

    I agree that it’s an absolutely shitty time to buy a home right now, mostly because selection is so limited. You can wait a few years, but that too is risky, as people like SweetHome can attest.

    I would unequivocally support a major upgrade to both the Pat Bay and Island Highways, but there are too many old fuddy-duddies in this town.

    I, too, would support major upgrades to the Pat Bay and any of our other highways, especially the Malahat. What I don’t support is significantly increasing the density of my neighbourhood. If you can’t afford to buy in a low density neighbourhood, then find a neighbourhood you can afford.

  238. Penguin,
    Great you aware and have seen your family struggle when things aren’t going good. Best education one can get. Keep your eye on what the big money is doing as they rotate their investments away from high risk and what the bond market is doing.

    It’s a no brainer much higher mortgage rates are coming and influenced from places most here don’t even think about. Read and educate without the hype that a house is some savior, it’s not when it’s in a bubble and it tanks like Vancouver is.

    How many over there who bought last summer are saying to themselves today “WTF did I just do ? ”

    The US crash is still haunting the markets and may be the next catalyst to pop this one bigtime.

    After the crash: Everyone is suddenly worried about this U.S. mortgage-bond whale

    “In the past year alone, the Fed bought $387 billion of mortgage bonds just to maintain its holdings. Getting out of the bond-buying business as the economy strengthens could help lift 30-year mortgage rates past 6 percent within three years, according to Moody’s Analytics Inc.

    Unwinding QE “will be a massive and long-lasting hit” for the mortgage market, said Michael Cloherty, the head of U.S. interest-rate strategy at RBC Capital Markets. He expects the Fed to start paring its investments in the fourth quarter and ultimately dispose of all its MBS holdings.”

    http://business.financialpost.com/news/property-post/after-the-crash-everyone-is-suddenly-worried-about-this-u-s-mortgage-bond-whale

  239. @Bman,

    You are so correct. This is a good article in terms of density and infrastructure from the world bank.
    https://www.esmap.org/sites/esmap.org/files/DocumentLibrary/ESMAP_CEETI_MayoralNote_6_PlanningEE%20Livable%20Cities_optimized.pdf

    If you look@ the population density below, Victoria/OB are doing their parts in terms of housing people. If Saanich could get to the SAME density as Oak Bay and they have 100 sq KM, you could easily fit another 70000 people or 20% population growth. A nice size lot in OB is 5500ft2 and everyone in Saanich needs 10000 fts haha.

    Victoria is roughly 4200 people/km2
    San Fran is 6700 people/km2
    Vancouver is 5300 people/km2
    Saanich is 1050 people/km2
    Oak Bay is 1710 people/km2
    Colwood is 900 people/km2
    Langford 730 people/km2
    Central Saanich is 400 people/km2
    Sooke is 200 people/km2

    The highest? Manila @ 42000 people/km2 or 10 times that of Victoria 🙂

  240. Penguin:

    Sounds like you will be unhappy either way. I agree that you should not buy a house without a full inspection particularly if it is an older house. Just come to a decision which makes emotional and financial sense to you. Like all decisions in life you get to live with the consequences so stop worrying about it.

  241. @Numbers hack
    The same granola-munching NIMBYs that oppose density will oppose highway building (See Ben Isitt for example). I would unequivocally support a major upgrade to both the Pat Bay and Island Highways, but there are too many old fuddy-duddies in this town. I just can’t see that happening. If it was a four lane bike path, maybe. We can’t even build a 100m bridge to Vic West.

  242. The last few comments highlight the generational divide and gives some candid perspectives of how “housing” can illicit strong emotions amongst us. Market and price direction opinions and are polarized; which is healthy. But whatever is going to happen, no one really knows.

    In order to fix the housing conundrum in Victoria, as I have mentioned for quite some time, we will either need more density or more land to support the growing population. Since density and NIMBY is very alive, we should look a the latter.

    If there was more EFFICIENT ACCESS, think 2/3 lanes either direction on the Old Island Highway, and the commute time is 20-25 mins to the western communities, then the WC would be a great place to live. Case in point, Carleton Place, a small town outside of Ottawa just got a 4 lane highway directly into City Center. There are 1500 new homes planned when the town only has a 10,000 population.

    This can be done and it only takes a little intestinal fortitude from our leaders to do this. No need for class/racial/generational etc… warfare.

  243. Do people just forget what it’s like to be hopeless? Does a house save you from that? Does it bring happiness into your family and marriage when you can’t afford to put food on the table? When you are afraid of losing your job and can’t make your mortgage payments? Then your car breaks down and you need a new fridge…

    Look millennial penguin, you get to save yourself. Decide what you want and then do what it takes to have what you want. Stop whining, start strategizing. Maybe you can co-own a house with a friend or with your parents. Maybe you don’t even need a house – like ever. Lots of options besides living in a place where a new fridge puts you over the edge.

    Here is a few alternate viewpoints and some information:
    http://www.millennial-revolution.com/#
    http://www.mrmoneymustache.com/2013/04/29/frequently-complained-questions/
    http://www.legalnomads.com/
    http://jlcollinsnh.com/stock-series/

  244. Corporations which cease to actively earn income are being restated as passive, investment entities, with a tax rate jacked to the 50% level.

    expect surplus funds – money not used to fund the operation, buy stuff, pay salaries or create jobs – to be taxed at a separate, higher level

    Total jibber jabber. Exactly the same rules as are in place now. Invest through a corporation in passive stuff like stocks and real estate and you are taxed at the top marginal tax rate already, which is close to 50%.

    how many real estate kings here are about to get whacked bigtime thinking their slumlord tax shelter was pure genius.

    None, because unless your slum lord has five or more full-time employees running this show they are already being taxed at the highest marginal tax rate because this is passive income.

    The actual changes are public information and sent out for comment:
    http://www.pwc.com/ca/en/services/tax/budgets/2016/federal.html

    The folks who will be affected are super high earners who previously were able to multiply the use of the small business tax rate through complicated business structures – like medical specialist partnerships.

    Other tax changes might have some impact, but not what is stated above.

  245. All this talk about Duncan… I think everyone in this area (island, province, country?) is going to be in for a wake up call soon… I was taking a look at prices in places like nanaimo, parksville, Duncan, and it’s a bit ridiculous in my opinion. I’m not sure how some of the people in those communites would be able to fare an economic downturn or interest rates rising. Homeowners or not… The lax lending rules have encouraged so much debt. It is not going to be any of us on this forum in trouble as I’m sure most of you are doing well in life (not the ones you find at 7-11 at midnight). Yes there are many well off people buying houses but there are also many people in over their heads. I know many of them. It also boggles my mind why parents want to help their kids buy condos/houses when they should know better. Let’s just tie everyone down and when people start losing jobs then what?

    I’m a millenial but I’ve seen my parents weather tough financial times when I was younger and it was not an easy time for any of us. Do people just forget what it’s like to be hopeless? Does a house save you from that? Does it bring happiness into your family and marriage when you can’t afford to put food on the table? When you are afraid of losing your job and can’t make your mortgage payments? Then your car breaks down and you need a new fridge… I am not a homeowner and I want a house as much as the next person but I always think what is it worth to me? I definitely feel FOMO right now…What if I don’t buy a house now I’ll be priced out forever. But then reality sets in and I really don’t think houses are things to jump into… I just don’t get why anyone would buy a house right now. Bidding wars and no conditions? For 800k+ houses? That just seems so risky and I wonder why not wait a few years. Even if you pay a bit more then at least you won’t be stuck with a crappy house no one will want in a couple of years.

  246. Interesting tax changes coming via Garth. I wonder how many real estate kings here are about to get whacked bigtime thinking their slumlord tax shelter was pure genius.

    “Until now lots of self-employed have left earnings inside their corporations thinking it could grow there, be taxed at the lower small business rate, then fund their retirement through a steady stream of tax-advantaged dividends. Well, the CRA is already putting the kibosh to that plan. Corporations which cease to actively earn income are being restated as passive, investment entities, with a tax rate jacked to the 50% level. Ouch. The logic is simple: you did this to avoid tax. So according to the GAAR (general anti-avoidance rule) the feds can Hoover you. There are thousands of retired docs soon to learn this reality.

    But it may get worse after the next budget (I hear). On the first $500,000 in business income, owners currently pay tax rate about half that of individuals, encouraging them to leave money there, invested, rather than paying it out as salary or taxable dividends. While the small biz rate is unlikely to increase, expect surplus funds – money not used to fund the operation, buy stuff, pay salaries or create jobs – to be taxed at a separate, higher level. This retained earnings tax would have accountants dancing in the streets (the complexity of reporting – and fees – would swell) and be spun as an eat-the-rich win for the Libs.”

  247. DB, realist not a pessimist. Economics matter in a maxed out debt and rising interest rate enviroment with government intervention.

    Tall guy, are you going down the tototoro/ intorovert paranoia road that I’m James Soper as well as a woman ? That’s fricking hilarious ! Paranoia will destroya. 😉

  248. Esquimalt, View Royal, Saanich West (Glanford area, etc.) are not that unaffordable, and are not that far from the downtown core either. A coworker just helped his son buy a 3-bedroom 1300 ft^2 2-storey condo for $250k on Craigflower. Ok, it’s not Cook St. village, but that is a pretty reasonable price for to pay for family accommodation.

    I don’t mean to be unsympathetic, but there are still deals to be had if you like the Victoria core (using the term loosely) and don’t like commuting. These places will likely be excellent investments as the city continues to grow. The difference is that they’re not particularly hip neighborhoods for the moment. Buy hey – compared to living in Duncan?

  249. I love the Realtors waxing poetic about only having to commute 1.5-3 hours today and how that is a good lifestyle choice.

    What a load of crap it is, the way that the boomers, salesmen, and speculators have told us that we either have to pay every dime we make or spend our lives in a vehicle, since time is the thing that we value least otherwise. It’s not like we’ll have neglected children or will eventually die one day.

    Just saying if one so desperately wants a North American style SFH you can always move and it doesn’t even have to be off the island…..personally I would rather live at the Janion than commute to Duncan, but the Janion isn’t getting great feedback on here either.

    Attitude seems to be Rockland or Oak Bay, SFH only, and I don’t wont to give up my flex day either because that would throw off the work/life balance.

    Population has grown to the point when you have to be in the top 5%-10% to buy in the core, beyond that it is the Westshore which is what use to be the core 25 years ago (middle class).

  250. These boomers, as you outlined, have bought investment properties, but not 30 years ago, more like the last 10 years when they could raid their equity on their principal residences.

    The stats don’t seem to support this.

    The 2011 stats can stats (latest I could find?) show that about 9% of BC homeowners own a second home – usually a cottage – and this percent has only increased by 1% in the past ten years.

    What has been climbing is Canada’s population and the overall rate of ownership of a primary residence:

    https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/2011002/c-g/c-g01-eng.cfm

    http://www.statcan.gc.ca/pub/91-003-x/2007001/4129907-eng.htm

    I don’t believe second home ownership is the main issue, it might be a minor one.

    It does seem like it is a combination of factors that include current positive consumer confidence and overall lack of inventory.

    We appear to be at a point in history when the SFH in the core of Victoria is out of reach of income-based affordability supported by the increasing divide between those with move-up home equity and those without, perhaps inheritances, and just more buyers than available properties and a lack of land to build new homes in the desirable areas.

    I agree prices don’t go up in a straight line forever. The most likely thing is that they will fall at some point and consumer confidence will tumble with it. I wouldn’t bet on a return to income-based affordability in these areas ever though.

    Also, came across my post from 2013 when looking for the stat above:

    Janion microcondos 80% sold yesterday – 100 people lined up at a time…

    http://www.timescolonist.com/victoria-s-downtown-boom-population-7-170-and-growing-1.682942

    Argh. I had no idea.

  251. Oops, James Soper, and Hawk all read as different personalities and grammatical capabilities of the same person.

  252. This entire QE thing around the world is the #1 culprit in driving RE prices through the roof in every desirable country to live in.

    Probably a close second in the globalization meme. Remember, Canada is not a nation. Diversity is our strength. Don’t like living under the ChiComs, no prob., you’re welcome in Justin’s Canada. If you got the cash, by all means drive a Canadian citizen out of the housing market.

  253. I love the Realtors waxing poetic about only having to commute 1.5-3 hours today and how that is a good lifestyle choice.

    What a load of crap it is, the way that the boomers, salesmen, and speculators have told us that we either have to pay every dime we make or spend our lives in a vehicle, since time is the thing that we value least otherwise. It’s not like we’ll have neglected children or will eventually die one day.

  254. Gwac: “Crash been 8 years on here hearing about the crash. I guess one day you can say you where right.”

    Lol. Like a clock, right Gwac. Well, tell you what, I’ll even give you a timeline and then I’ll either be right or wrong.

    By June 15/2017, you will be very aware of a crash in the real estate market on the Mainland. Victoria? Sorry, the Island is always a little behind. I’ll let Hawk choose that timeline.

    Oh, Marko, I didn’t mention the correction of the early 90’s because the run up prior to the correction didn’t nearly match the absurdity we are facing today. So no correction …. crash.

    If your house is your home, no worries. If your house is your “future”, you had better re-evaluate.

  255. Because they’re crazy and don’t understand that the money they save on living gets eaten up by fuel costs and their time. That or, some people want to spend as much time away from home as possible…

  256. Hawk is a robo-pessimist…

    By negating the commute across the Malahat… he just confirmed how great Victoria is… 🙂

    May the Force of Victoria Pricing be with you 😉

  257. BTW

    Here website in LC use to have to 10 to 15 pages all un sold a couple years ago. Things have really changed there also

  258. You know it’s Peak Victoria when they want to film the sheep being led to the slaughter. Who would want the worst financial decision of their life on film for ever ? Sounds like a horror flick. 😉

    Casting HOMEOWNERS and BUYERS for real estate Reality TV shows! Do you want to be on TV? We are currently looking for Buyers and Sellers in the Victoria area who are interested in being cast in our TV productions to be filmed this spring.

    https://victoria.craigslist.ca/reo/5992364386.html

  259. “we haven’t had a crash in 32+ years.”

    Which means the odds are at it’s highest in 32 years and ignoring Vancouver tank job is done at your own peril.

    Many a fool bought at the high of 81 and all the way down to a 50% loss because of FOMO and it took 10 years to recover and many went under.

    Crashes happen at extremes. 81 was extreme interest rates and affordability. We are at extreme debt levels of 167% when in 81 they were 66%.

    RBC affordability charts are a mere few percent from historical highs and CMHC has Victoria in red alert zone.

    Unemployment levels in BC were on a 6 year decline heading into the 81 crash as well. Food for thought.

    There’s a psycho president/dictator who says any bad news is officially fake news. Global markets risk have never been higher.

    Those with the most financial interest and livelihood at stake are those who pump out this “it’s never going to happen” bullshit.

  260. Saw 1740 Triest Crescent hit the market a few days ago for $749k. Told my partner that it was way under-priced and it would go for around $900k; she agreed. Sure enough, $901,800.

    Sales are down but these types of sales, in my opinion, are proof that the decrease in sales in supply restricted.

  261. Saw 1740 Triest Crescent hit the market a few days ago for $749k. Told my partner that it was way under-priced and it would go for around $900k; she agreed. Sure enough, $901,800.

  262. Marko:

    You are absolutely wrong. When you are 80 you are most definitely interested in real estate. Us seniors at 80 are looking at getting one of traditional subbasement micro housing units. They are usually six feet by three feet and about six feet down.

    Thanks for all your work on this site.

  263. ….which is very close to what we had in the 80’s crash.

    Which is more than 30 years ago. A crash will happen but I don’t think you can ignore the time span. You probably don’t need a house before 30 and after 80 you are probably more concerned about making it to the next year than the pricing of real estate so ownership comes into play for 50 years tops and we haven’t had a crash in 32+ years.

  264. Numbers Hack: “How to fix this is impossible IMHO. We would need a 50% decrease in prices ballpark to have young families enjoy the same financial circumstances that we had.”

    ….which is very close to what we had in the 80’s crash.

    The biggest problem with boomers is that very, very few of them have saved for retirement and apparently, only around 30% actually have a defined benefit pension.

    Amazingly, they have bought into this Real Estate Meme, as well and are praying for even higher gains so that they can retire with all of the goodies.

    These boomers, as you outlined, have bought investment properties, but not 30 years ago, more like the last 10 years when they could raid their equity on their principal residences.

    Yes, if they sell now, they can realize excellent gains but too many are myopic and think they are going to leave money on the table if they sell early. I would sell 1,2,3 or 4 years early rather than 1 yr into a crash.

    This bubble has created a whole industry of amateur landlords/investors and unfortunately, I believe we are going to have a lot of boomers who will not be retiring, as per their dreams.

    Apparently, nobody can see that crash coming but you had better be prepared, financially, when it does.

  265. I assume that’s a 2,550 square foot basement entry home in the Westshore at $310,000 or $120 to $125 a square foot.

    When you’re trying to build in Victoria or Oak Bay the costs are just crazy. I wonder if that home in Fairfield was or was not a basement entry home or a two storey home with the main living area on the ground floor and the bedrooms on the second level at $190 to $195 a square foot.

    I’ve always wondered why these two different styles of homes having the same square footage can be so different in construction costs in these two areas.

    It may just come down to risk and economy of scale. It’s less risky to buy two lots in the Westshore and build two homes than putting all your money on one home in Victoria or Oak Bay along with 6 to 9 months to build. A builder’s profit has to be a lot more when building just one house a year in the City on speculation.

    There may be a difference in costs when hiring a contractor to build a home for yourself versus a contractor laying out his own money and trying to sell at the property at the end of construction.

  266. 458 Kipling St listed for $1.2m sold for $1.180k in just 3 days… on only a 3600 sq ft lot!

    First thing I noticed about this house is it looks like a modern desirable contemporary… However, on closer inspection on ‘google street view’ one discovers it was actually an old stucco 1980’s crap box, now covered in ‘lipstick’ on the pig? I have to wonder – in the frenzy of this market did these buyers have time to do a proper inspection when stressed out by numerous others poking around? On ‘google street view’ image from April 2014, you can even see the water stains and mold on the old stucco. There are no eves on the original build, thankfully during the reno these, with sufficient overhang, have been installed. Question is: Did adequate remediation of the obvious mold and water penetration issues take place?

    @VicRenter: I sympathize with looking at houses in this market, as my partner and I lost three homes last year to multiple higher offers. When placing a ‘house wanted’ ad on ‘used Victoria’ – we finally found our dream home in Oak Bay – with no competition!

    A friend of mine is a Professional Transit Operator, and they can make close to $100k a year if they work overtime – plus benefits and defined Pension Plan. Who knows when this bus driver actually bought the Fairfield home (back when it was affordable?). It’s not an easy job either, after I hear the numerous stories of the challenges they face in that job.

  267. VicRenter

    Good post and best of luck.

    The place I bought in Ontario for 370k in 2000 is work 1.4m. (sold when I moved here) My salary is 40% higher. The Math has gone crazy.

  268. I’m one of the spring house hunters who isn’t taking any of this as a great sign. Sigh. But I’m going to carry on looking and bidding in the hope that something I like works out for me at a price that I can afford.

    I’ve been thinking about expectations a lot lately and I think that the pivotal moment for me came last year when my partner and I (both professionals with high incomes) put in an offer on a house in Fairfield. When you put in an offer, you get to see the owner’s listed occupation on the paperwork and the owners of this particular house were a bus drive and a home maker. I have nothing against bus drivers (I take transit to work whenever I’m not walking or biking) but it was really eye opening to realize that in 2016 we could only afford a house that a single-income, non-professional couple could afford previously. (The house sold for $80,000 over our bid, which was already considerably over asking price.)

    Many, many Victorians are having to adjust their expectations for housing/life in the face of the real estate market here.

  269. Also seems like everyone wants the fancy finishes over anything else. In the age of self improvement, everyone needs granite and crown moulding.

    I was just doing a construction budget for a 2,550 sq/ft home in Colwood and I came up with $310,000. Was kind of surprised as I was involved in a project in Fairfield, 2,583 sq/ft that was north of $500,000 for construction costs. It’s interesting how many huge line items just disappeared such as $8,000 worth of cedar. Instead of a $3,000 custom shower just throw in one of these (often on sale for $800) -> https://www.costco.ca/OVE—Eilat-Shower.product.100112371.html

    The Colwood home one could probably get down to $275,000 by cutting solid flooring, quartz, etc., or basically building a early 1990s house in terms of finishing.

    Would be tough to go under $275,000 due to code requirements.

  270. “This entire QE thing around the world is the #1 culprit in driving RE prices through the roof in every desirable country to live in. This will not be an easy problem to resolve and won’t go away.” There’s a lot of talk with the US fed right now about unwinding their QE. If they go ahead with that (and it look like they want to) that will decimate the housing market.

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