Valentines Market Update

Weekly stats update with love courtesy of the VREB.

February 2017
Feb
 2016
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 119 285
772
New Listings 152 344
1160
Active Listings 1502 1498
2562
Sales to New Listings  78% 83%
67%
Sales Projection 748
Months of Inventory

3.3

Sales to list ratio is absolutely astronomical and completely out of the ordinary for this time of year.   This is when listings should be piling on and sales are just warming up so the rate is usually fairly low (last year was already abnormally high, the 10 year average for February is 47%).   At 83% month to date, we might  almost double the 10 year average.

The effect on inventory is obvious and again unprecedented.  I don’t see any past years where inventory has declined from January to February but unless things turn around that’s what we’re on track for.

Sales are down about 3% from last year.   I can’t imagine that that pace can be maintained but we’ll see.

 

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197 thoughts on “Valentines Market Update

  1. Convenient way for long time posters to dodge accountability for previous opinions offered as facts.

    I’ve got some alternative facts to sell you..

  2. http://www.theglobeandmail.com/life/parenting/many-canadians-too-cash-strapped-to-raise-children/article34031452./

    High house costs cited as one reason Canadians are delaying starting families

    “It’s likely one reason people are delaying starting families.”

    “Whereas it took five years of full-time work to save a 20-per-cent down payment on an average home in 1976, it now takes from coast to coast over 13 years,” says Paul Kershaw, a professor at the University of British Columbia. The founder of Generation Squeeze, a group that highlights generational inequities, Kershaw likes to use 1976 as a comparison because that’s when many baby boomers were buying their first homes and having children.”

  3. What’s been frowned upon is trolls using multiple names. I’ve got no problems with people changing names in general.

    Convenient way for long time posters to dodge accountability for previous opinions offered as facts.

  4. Good video summary of the HPO idiocy in Marko’s new video
    https://www.youtube.com/watch?v=H92ej4ZZf0c

    Will start working on this again more consistently…lots of new emails in the last few days with great points…

    ….”being tested on non-applicable items: for an owner-builder (OB), this is a one-time process. In my case, there is no basement or crawl space, I don’t have any need to know what the code requires in that regard. The same for chimneys/fireplaces; I don’t have one, don’t need one, & don’t want one; how will questions on this “improve the quality of owner-built homes and enhance protection for subsequent homeowners”???”

    ““You cannot consult any reference materials or electronic devices”. This is ludicrous …. memorize the BC Building Code?? Go to any building inspector’s office and ask him/her a couple of questions; …. in short order that person will haul out, if it isn’t already open, the Code that is highlighted with probably more than one colour!! Since a building inspector regularly references the document, how can a one-time OB be expected to know it all???”

    “our retirement is contingent on this project. Failure to correctly answer enough questions may result in the HPO/LCS forcing me to be a “Walmart greeter””

  5. Dasmo “Anyone know what 1217 May St sold for? asking $699. seems to have sold fast.”

    Sold for $790. Assessed at $807
    9 offers

  6. “I guess Just Jack is some sort of V.I.P.”

    I’m glad he’s back. Have always enjoyed reading his posts.

  7. Very interesting meeting held the other day by the Standing Committee on Finance. President of the CMHC took quite a grilling from some politicians, but I do think it was an eye opening conversation about the state of the real estate market and associated consumer debt in Canada. For those of you who haven’t seen it and are interested, here is the link.

    http://parlvu.parl.gc.ca/XRender/en/PowerBrowser/PowerBrowserV2/20170213/-1/26696?useragent=Mozilla/5.0%20(Macintosh;%20Intel%20Mac%20OS%20X%2010.9;%20rv:51.0)%20Gecko/20100101%20Firefox/51.0

  8. I think it’s kind of pathetic that Leo feels the need to protect Just Jack and his identity hopping, a practice that has hitherto been frowned upon and called out on this blog

    What’s been frowned upon is trolls using multiple names. I’ve got no problems with people changing names in general.

  9. @ Introvert and totoro,

    Suppose you could confirm right now that JJ and JD is the same person…what will have changed for you? Nothing. So who cares.

  10. Ah, it really is you JJ. The illogical approach is distinct.

    It’s got to be. The comment with the YouTube clip clinched it. That and Leo’s refusal to answer my question.

    I think it’s kind of pathetic that Leo feels the need to protect Just Jack and his identity hopping, a practice that has hitherto been frowned upon and called out on this blog. I guess Just Jack is some sort of V.I.P.

  11. Broadmead has some really nice homes, big and architecturally interesting but most were built in the 70s, 80s and 90s.

    It’s an upper middle class area but it’s never going to be the most prime, the most fashinable, the most expensive, the most scenic or the highest class area although it does OK on all of those things.

    That’s because it is a bit too far from Downtown and the University. It also lacks any shoreline or even close proximity to the water.
    Parts of Gordon Head like Gordon Point/Coromorant Point/Arbutus are close to water and the university so have the edge.

    There are also parts of Gordon Head specifically Hillcrest that trump Broadmead and even come close to Uplands for very high household incomes – we are talking $250000 a year – so not plain middle class by any stretch.

  12. “I wonder what the ideal age is for owning a condo? Any ideas?”

    Good question. Assuming maintenance costs are the deciding factor, you’d probably want to avoid amenities like an elevator, pool, sprinkler systems, etc. So maybe mid 70s built under Part 9 of the Building Code? Construction should be solid, and the walls won’t be hermetically sealed. Roof and balconies would be the major expenses.

  13. I asked the same question many a night… not for health or enjoyment, just to make money.

    So how many do you own now?

  14. Ah, it really is you JJ. The illogical approach is distinct.

    Broadmead versus Gordon Head.

    Completely arbitrary. Why not Broadmead vs. Oak Bay or Broadmead vs. Victoria? Or Broadmead vs. Royal Oak – that seems a more direct comparison?

    A Broadmead property where they don’t allow suites is vastly superior in terms of beauty, house and lot size to that of Gordon Head.

    Why not Broadmead and Oak Bay? I find Oak Bay vastly superior to Broadmead and you know what, it also has a higher cost per square foot likely because it is a more desirable area. And weird how Royal Oak is right next to Broadmead, has lots of suites, and it is less expensive than Broadmead!

    Have you ever though that Broadmead, like Royal Oak, is cheaper per square foot for the house because it is further from the university and downtown and because it is not had as much densification? Heck I think Uplands is cheaper per square foot for some of those big old houses than the new builds in Oak Bay and certainly cheaper per square foot of land.

    Also, overall, I don’t see a house in Broadmead being that much cheaper than Gordon Head, maybe more. Houses and land sizes are bigger but I buy based on what I can afford in the area I like, not what the cost per square foot of house or square foot of land is. A condo is cheaper than a house too but the square foot price might be much more! Imagine that.

    CMHC regulations are a bit of a red hearing there Totoro. That’s something that you brought up to move the discussion. Because most likely CMHC financing is not being used on most of these sales.

    The CMHC rules apply to anyone buying with less than 20% down. You’d be surprised to learn that 63% of first time buyers do not put 20% down. This is about 25% of the market and doesn’t count those that are not first time buyers who are also putting less than 20% down and buying a house with a suite. And among first time buyers in Vancouver even 25% of them are buying a SFH. Percent is likely higher here, especially with a legal suite. If I was a first-time buyer that is what I’d be looking for.
    http://totalmortgage.ca/category/first-time-home-buyers/

  15. Unless you’re reasonably handy…and motivated — then you can save a lot doing your own work.

    Very true. I’ve installed full suites to save money, right down to the porcelain thrones 🙂 (jackhammering sucks)

    Why?

    I asked the same question many a night… not for health or enjoyment, just to make money.

  16. Condo costs –

    a couple of years ago I bought a 2 BR, 900 sqft condo at Mount Washington off of the rest of my extended family. I have tracked almost every penny I have spent on it since then. I have tracked expenses more diligently than I do with my house as I regard this as an extravagance vs my principal residence which I regard as an expensive necessity. Expenses per year have come in consistently at just below $7000. This includes absolutely everything (condo fees, tax, insurance, hydro, minor maintenance, new fridge). The condo fees are steep but they have enabled the strata corp to do a lot of preventative maintenance plus build up a pretty massive contingency. I assume condo living would be cheaper in the city where there aren’t costs like snow clearing. Also the severe weather up there takes a toll on the building envelope. Obviously some costs like hydro would be more if the unit were full time occupied.

  17. “Lots of fresh listings today….haven’t seen this many in months. Looks somewhat promising for buyers if the trend continues”

    I noticed it too, and a few places look pretty nice. This will be the first test of the ‘insufficient supply/pent-up demand’ theory of slightly declining sales; as identified as a possible issue in the core, at least.

  18. Except for Afghanistan, Iraq, Nigeria, Ruanda to name but a few with more than twice the replacement rate.

    Ok you win! When presented with that list of countries with high birth rates I can only agree that more babies will make Canada great again 🙂

  19. I’ve owned about 20 houses/30 condos

    Why?

    Good point about maintenance costs though. I suspect a lot of people underestimate the cost of maintaining a detached home.

    Most definitely. Although similarly many condo buildings choose to kick the can of maintenance down the road instead of properly keeping it up with it.
    I wonder what the ideal age is for owning a condo? Any ideas?

  20. “If you really do the math, condos are cheaper.”

    Unless you’re reasonably handy…and motivated — then you can save a lot doing your own work. Painting, replacing windows, building a deck etc., aren’t too difficult.

    Good point about maintenance costs though. I suspect a lot of people underestimate the cost of maintaining a detached home.

  21. “Rather, I would have thought it was the decision not to enforce the abortion law…”

    Staying off topic here, don’t you mean the decision to amend the Criminal Code, and legalize abortion (and other naughty things like the sale of contraception)?

  22. CS, 68,000 women each year worldwide die from unsafe abortions, and 5 million each year suffer complications so they cannot have kids (legal abortions ensure safety for procedures that are inevitable). On top of that, a lot of kids starve when there are no parents around. So we’ve kept a lot of women & children alive in the western world with progressive health policies, and made it better for the men in their lives to support them financially or for basic sustenance (also better for all taxpayers who support healthcare). Otherwise you get conflict and wars fought over lack of land & resources.

    Getting back to your original point, however, I;m concerned that we need to have enough employment for anyone coming to Canada, and balance that with our empathy towards those in need. If they don’t find jobs, everyone suffers, including the families that arrived for a better life.

  23. @ Cav Empt:

    “Occam’s razor says you are wrong.”

    Rather, I would have thought it was the decision not to enforce the abortion law, resulting in something like five million abortions since then, plus the “reform” of the divorce law making way for no-fault divorce.

    “while the simultaneous drop in every other country”

    Except for Afghanistan, Iraq, Nigeria, Ruanda to name but a few with more than twice the replacement rate. Do try not to hallucinate facts merely to support a failing argument.

  24. CMHC regulations are a bit of a red hearing there Totoro. That’s something that you brought up to move the discussion. Because most likely CMHC financing is not being used on most of these sales.

    I’ll stick with my original statement that areas with a high percentage of suites also have high prices. Broadmead versus Gordon Head. A Broadmead property where they don’t allow suites is vastly superior in terms of beauty, house and lot size to that of Gordon Head. Yet the median price in the executive neighborhood of Broadmead is around $320 per square foot compared to the boring middle income basement homes of Gordon Head at around $350 per square foot.

    That’s two distinct neighborhoods from each other. One is executive housing the other is middle income. Yet one pays less on a price per square foot basis to live in Broadmead than Gordon Head.

    Basement suites have driven up house prices in Gordon Head because more people can afford them.

  25. you’ve then got those mandatory upgrading fees they are often hit with – such as upgrading the roof

    However, when you crunch the numbers there’s not much difference. I’ve owned about 20 houses/30 condos and the big difference is house owners hardly ever know their monthly maintenance fees.

    If you really do the math, condos are cheaper. An example, the last house roof I replaced costs me ~17k, the last condo roof ~4k (80k divided by 20 units, came out of the bldg fund). Unless you’re like one guy I know who bought a leaker 2o yrs ago. Then again I’ve also known a house owner whose deck fell off the back of the house (~40k in remediation & rebuilding).

  26. @CS

    I explicitly referred to the Canadian fertility rate.

    So in your mind the drop in Canadian fertility rate was caused by PET while the simultaneous drop in every other country was caused by other factors? Occam’s razor says you are wrong.

    As for the rest … let’s stick to the state of the Victoria real estate market.

    Says the fellow ranting about the death of the West

  27. RE: Rockland sale. Actually, a neighbour told me that the house was put on the market not as a quick flip but because the husband died and the wife did not want to stay in the house that they built together. Understandable.

  28. @ Caveat emptor:

    “I doubt the worldwide drop in fertility was caused by the election of Pierre Trudeau.”

    Oh dear! Why is it that some people cannot understand the simplest statement in plain English if it contradicts the tenets of Political Correctness?

    I explicitly referred to the Canadian fertility rate.

    As for the rest … let’s stick to the state of the Victoria real estate market.

  29. new CMHC rules that allow 100% of income to count apply only to legal suites.

    Really? I’ve never heard of CMHC caring about the municipal status of suites. Where does it say that?

  30. Suites improve affordability but at the cost of higher house prices. One possible way to reduce house prices is to reduce or eliminate how much income may be used to qualify for a mortgage.

    Illogical really. Suites increase the house price a bit, but not that much in HCOL areas where house prices are mostly land anyway. And most suites are illegal currently and the new CMHC rules that allow 100% of income to count apply only to legal suites.

    The capital gains tax if applied to suites will mean some people will stop renting their suite out now as the tax is pro-rated per year of use. Why bother for the hassle when the return is only slightly more than the loss on the capital gain overall – less in a rising market, especially if the inclusion rate is raised. Get ready for vacancy rates to drop further.

    We’ll still keep renting as we have a legal multi-family and were always going to have to pay capital gains on part of the profit – no way around it unless we convert to a SFH, but most people with basement suites who have some home equity and can meet their monthly obligations will probably be advised to rethink their rental by an accountant.

  31. I was thinking, another reason many people don’t like strata condo’s or strata townhouse complexes is, on top of the (often high) monthly maintenance fees, you’ve then got those mandatory upgrading fees they are often hit with – such as upgrading the roof or the elevators, or whatever. The Strata council decides the upgrades are in the best interest of everyone, and whammo – you’re suddenly hit w/ a huge bill for something you may not have done if you had a freehold property.

    There’s a lot of appeal w/ freehold. I don’t blame the empty nestor’s and seniors or anyone else for wanting to stay in their large freehold homes in the core as long as possible. Who would want to deal w/ these onerous strata councils w/all their fees? Regulations as to what colour blinds you can have (no smoking, bbq’s or bird feeders either). Forget it! Esp., if those fortunate seniors bought years ago for cheap, and have now paid it off and on top of that, now those over 55 can defer the property taxes to boot! Personally, I’m avoiding strata like the plague.

  32. So you suggest we just die off, replacing ourselves with people from elsewhere in the process. Good God, the West really is doomed if that is the general view.

    If you think Western Civilization is defined by your genetically inherited whiteness, then the “West” could be in trouble. I don’t buy that, instead I think our civilization and culture is defined by our ideas, values, laws, customs and tradition. Immigrants to Canada aren’t coming here to do away with our culture, they are coming to benefit from it and become part of it.

    In any case low birthrates aren’t confined to the high income West. They are also prevalent in the former soviet union and Eastern Europe, East Asia, Southeast Asia and parts of the Middle East. It’s also falling most other places as well. Going back to your original post I doubt the worldwide drop in fertility was caused by the election of Pierre Trudeau.

  33. We are also improving tax fairness by ensuring that the principal residence exemption is available only in appropriate cases, so that everybody pays their fair share.

    That could mean a lot of things. Could just be referring to the new reporting requirements. As totoro suggested could also refer to abuse of the PRE by serial builders and flippers. It could also mean a crackdown on full PRE in houses with suites. Given that suites are concentrated in the liberal bases of the GTA and SW BC I’d guess it won’t be the latter.

  34. So on 1287 Rockland Ave, which sold for $1,570k (I looked at this house last year when it was for sale for the $800’s) they made over $500k?! And, that’s after the cost of doing the renovations. Wow – was I ever out to lunch thinking they wouldn’t get that price… the market really is heading skyward! Now, if their closing date is after one year, and they lived in it – there’s no capital gains. Nice work if you can get it. The Gov’t might be putting people like this under the microscope now with the disclosure on the Income Tax form, but as far as I can tell you can still flip houses after you’ve lived in them for one year w/ no capital gains?

    This is interesting: The reduction that I mentioned last week at 192 Bushby St – in that ultra desirable ‘hood just steps from Dallas Rd. They listed it first for $989k, then reduced to $948k – now it’s sold for $1,053k! I don’t think I’ve seen a tactic like that yet – reduce the price days after listing to get more offers over asking? Interesting.

    So if Hawk is right and everything’s going to crash – maybe I should sell the house that I’ve now lived in for a year, bank $500k or so, and wait for it all to come crashing down… oh wait, I need somewhere to live… that’s what a house is supposed to be, right?

  35. True. All the bike haters get up in arms about subsidies. How about on street res only parking. The city should rent it to residents….

  36. @ Sweethome

    “I would love to see this” [higher density along OB Avenue]

    “but you would have to do something to the width of the Avenue because of the traffic.”

    Or just eliminate private cars on the avenue to make way for a fleet of autonomous minibuses providing service both ways every 60 seconds or so.

  37. I’ve heard Vancouver estimates at 45% of houses in the city with suites.

    Suites improve affordability but at the cost of higher house prices. One possible way to reduce house prices is to reduce or eliminate how much income may be used to qualify for a mortgage.

  38. Maybe. I’d bet that they will be targeting those who own for a short period of time before reselling quite strongly.

    Good. The serial house flippers that claim PRE every time need to be addressed.

  39. We are also improving tax fairness by ensuring that the principal residence exemption is available only in appropriate cases, so that everybody pays their fair share. Sounds like there will be a crackdown on suites as we suspected…

    Maybe. I’d bet that they will be targeting those who own for a short period of time before reselling quite strongly.

    Most of the country doesn’t care about suites. It’s a Vancouver/Victoria phenomenon.

    In BC 25% of homes have a secondary suite. Across Canada 14% of homeowners rent out a portion of their home to non-family members. These numbers are thought to be low due to under-reporting.

    There are 13,320,610 households in Canada. If 70% of them are owned that is 9,324, 427 and 14% of that is 1,305,419 households renting out space, likely with more than one voter in the household.

    So you’d be right that probably the prairie provinces are not going to care as much as the rate of secondary suite ownership is much lower at 5%, but BC, Alberta and Ontario all have high populations and high rates of secondary suites that go a long way to provide needed accommodation.

  40. Nothing will take down the federal liberals faster than cracking down on suites

    Most of the country doesn’t care about suites. It’s a Vancouver/Victoria phenomenon.

  41. Nothing will take down the federal liberals faster than cracking down on suites. Already people are noticing the various tax increases and credit eliminations. It’s reached even the lowest information voters possible.

  42. “For example, rezoning one or two blocks either side of the Avenue could double the population of Oak Bay.”

    I would love to see this, but you would have to do something to the width of the Avenue because of the traffic. I was going to post yesterday that the area around Fort and Foul Bay would be great for some high rise condos. Why do most of the new steel and concrete condos have to be right downtown with the noise, pollution, homeless, etc.? Of course it will never happen (or at least not in the next twenty years).

  43. On the greaterfool tonight:

    You might be interested in this note from blog dog Peter, in YVR:

    “Faithful reader, occasional writer. I’m sure you have great sources but I thought I’d pass on some confirmation for something you’ve been talking about recently.

    “As we’re expecting our first offspring I noticed an unfair disparity when researching child care benefits. I wrote my MP, and current Justice Minister, Jody Wilson-Raybould about it. Her response was polite and concise but basically was “tough luck, deal with it”, however to end on a sweet note it included this paragraph:

    To ensure that all Vancouverites can live comfortably, we are working to ensure that families like yours can find adequate and affordable housing that you deserve. We have increased consistency in mortgage rules by standardizing stress tests for both low and high ratio mortgages. This will help to ensure that households can afford the homes they buy even when economic circumstances change. It will also promote a more stable housing market for current and new homeowners. We are also improving tax fairness by ensuring that the principal residence exemption is available only in appropriate cases, so that everybody pays their fair share.

    Sounds like there will be a crackdown on suites as we suspected

  44. Sounds like all our villages. Give it time. We are young. The hippies are in power long enough to get a good start on the protected bike lanes. Maybe the next set will get a tram going…

  45. Actually, the Swiss towns are new communities with the old town feel, They have been engineered with a view to having a sustainable economic base. Combination of light manufacturing, government and tourism. It strikes as a model that could be replicated here in BC.

  46. examine the Swiss model of small interlocking towns as an alternative to high density larger cities.

    Big difference between many small towns with long histories slowly growing and a population that is growing into only a few major towns like we have here.

    I have no problem with Victoria densifying. Will the character change? Certainly. Can you do anything about that? No. Never seen a town that stayed the same over time and the ones that don’t grow tend to be pretty depressing.

  47. Some of the old houses really were poorly built as are many new houses today as well. Overall in many ways the new houses today are probably a bit better. That does not mean that they are great.

    Occasionally one can still find an old century house that has very solid bones. Obviously the electrical and some mechanical systems need to be upgraded but there is still real value in other aspects of the house.

    I am at times surprised at how little research people do before buying a house on how houses are actually constructed. These days there are so many great educational videos available . One would think that people about to make the biggest investment of their life would invest a few hours learning about the product they want to buy.

    Marko, how many of your clients focus on cosmetics rather than whether the house is sound from a mechanical point of view.

  48. @CS
    Sure enough, lowering limits hasn’t done much at all. I’m sure the smiley sign will do wonders:

    http://www.timescolonist.com/news/local/victoria-sticking-to-slower-speed-limits-smiley-signs-eyed-1.2360528

    A common way of determining speed limits is to observe how fast people drive, and setting the limit at or below the speed at which 85 per cent of drivers are traveling. One reason, is that drivers tend to ignore speed limits that are set too low.

    City of Victoria staff recommended not lowering speed limits to 40 km/h along arterial roads because there was no data (including collision data) to support it. Another reason of course, is that side streets remain 50 km/h. Seems random and arbitrary enough.

    Fortunately, the provincial government occasionally makes evidence based decisions (like when speed limits were raised to a very reasonable 120 km/h on many stretches of rural highway, and subsequently lowered where collision data supported it.)

  49. @ Barrister

    “Switzerland uses a system of architectural controls. We could follow the same model of development.”

    Good idea. Let’s adopt it in OB first.

  50. Marko:

    The village in Croatia is beautiful indeed. But there is no reason why we cannot build places, while different, that are not just as beautiful. Switzerland uses a system of architectural controls. We could follow the same model of development. The key is to create an economic base along with architectural controls with a view to making sustainable towns.

  51. @BMan:

    “Speed limits are artificially and arbitrarily low in Victoria. ”

    Not sure what “artificially… low” means, although by definition an imposed limit must be artificial.

    But Victoria’s speed limits are not arbitrarily low, if by arbitrarily low you mean they have no valid basis: they are low to reduce the number of fatal and other accidents.

    According to a study quoted by a report of the European Commission:

    Very strong relationships have been established between speed and accident risk: The general relationship holds for all speeds and all roads….

    Based on work by Nilsson in Sweden, a change in average speed of 1 km/h will result in a change in accident numbers ranging between 2% for a 120 km/h road and 4% for a 50 km/h road.

    So slow down, everybody, especially in town.

  52. @CS
    “It’s called “user pay” not “myopia.” And the alternative is not 20-20 vision, it’s vote buying — at the expense of non users. You must be an NDPer, they are exemplary practioners of non-user pay.”

    No. The alternative would be a tax, progressive or otherwise.

    “The principle of user pay has already been adopted by some auto insurance companies. They put a box in your car that monitors how you drive. If you keep to the speed limit and otherwise drive in a responsible way, you get a lower rate.”

    Speed limits are artificially and arbitrarily low in Victoria. This would reward blind rule-following, not safe driving.

  53. John Dollar I’m saying the happy valley shit boxes are using laminate, berber, vinyl flooring, painted spruce trim, 15 year fiberglass roof, simple vinyl sliding windows, mdf cabinetry throughout etc. Yes I agree the materials of the buildings with the engineered truses, 2×6 construction, proper insulation, proper venting etc far exceed even a 1980s gordon head shitbox and I would prefer that no doubt but the basic finishing and basic off the shelf layout is what makes it a shitbox.

  54. Original floor in my old house to! 94 years old. That poster print of wood on MDF you love will last twenty years tops. Less if you have a dog. Then it’s time for a new one with a fresh dose of off gassing. Engineered products are becoming necessary because the quality of wood is going. Second or third growth fir just ain’t the same thing….

    Upgraded wiring though 🙂

  55. However a user pay system is easily abused.

    Your water rate is a user pay system. However, if the community is too good at reducing usage, then the city will just up the rate. If you have a gas fireplace and never use it, you still have to pay a gas bill every month.

    Here is a little money saver for any of you thinking about buying a condo with a gas fireplace where you pay the bill each month. DON’T sign up for gas. You don’t need it if you have electric baseboards. The gas company will send you notices to hook up – just throw them in the garbage and save yourself $60 a month.

    But once you sign up – you can not disconnect from the gas and you HAVE TO pay the gas bill.

  56. Not trying to get a rise out of you or anyone else. All am I suggesting is that we at least examine the Swiss model of small interlocking towns as an alternative to high density larger cities.

    Can’t really compare. There is town, Samobor, of population aprpox. 30,000 in Croatia my cousin lives in and I spend a couple of days there every summer.

    This is the main square -> https://www.google.ca/search?q=samobor+main+square&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiQ18XpopPSAhVKImMKHcmaDfEQ_AUICSgC&biw=1315&bih=1143#imgrc=8LwSXIiNjb_m0M:

    There is also a 12th century castle in the town, a spectacular walk-way along a river, etc., just Google image “Samobor, Croatia.”

    I would absolutely love to live there. It would be great for kids, etc. Do I want to live in Duncan or Crofton even though it is significantly cheaper than Victoria? Not so much.

    I’ve driven through Swiss a couple of times and the small towns are nicer than Croatia.

    You can’t compare small towns with centuries of history with what we have in Canada. In Canada the bright lights of Toronto, Vancouver, etc., seem to have a greater appeal than the smaller towns. Seriously the worlds biggest hockey stick?

  57. It may seem like cheap finish to you but it costs a lot of money. Myself I prefer the engineered hardwood floors of today, thicker insulation and grounded electrical outlets.

    I have no desire to go back to asbestos insulation, knob and tube wiring or a 60 ampere electrical service.

  58. @ Barrister:

    “CS:

    While you are at it lets license and tax bicycles to pay for the bicycle lanes. A system of toll roads would also work if one wanted to go on your model. …”

    Indeed, why not, so far as is practicable. Road tolls are entirely practicable and would surely curb traffic congestion (with higher rates during rush hour on busy roads, etc.) and air pollution.

    The principle of user pay has already been adopted by some auto insurance companies. They put a box in your car that monitors how you drive. If you keep to the speed limit and otherwise drive in a responsible way, you get a lower rate.

    User pay is the basis of a productive market economy. It ensures the efficient allocation of resources to achieve maximum utility.

  59. Looks more like a home owner improperly installed the window.

    What you have there is not endemic of the industry. Unless you are saying that the lack of a building code a hundred years ago is better than having one today.

  60. @Bman

    “Perhaps people living on the mainland should not subsidize BC Ferries. Perhaps people who chose not to live in urban areas should not subsidize public transit. Let myopia reign supreme!”

    It’s called “user pay” not “myopia.” And the alternative is not 20-20 vision, it’s vote buying — at the expense of non users. You must be an NDPer, they are exemplary practioners of non-user pay.

  61. @ Bearkilla,

    That’s the first post that I’ve ever seen you make that appeared to have a purpose other than juvenile antagonism. Didn’t think you had it in you – congrats!

  62. I’m not talking about the construction itself. I live in a modern house and agree 50s leaky houses suck. I used to live in a 1950s piece of crap too. What transcends generations is cheap materials. That’s what I’m talking about. Go and see a Happy Valley spec house some time. It’s basically the same deal as a 1980s Gordon Head shitbox everyone seems to be snapping up now. Just cheap finishing, basic layout. That’s what I’m talking about.

  63. The materials used, building standards. education and quality of workmanship is superior today than in any other decade of construction.

    You mean they CAN be. Actually not. OSB and modern 2X4’s and starline windows will not outlast that Arts and Crafts built with old growth Fir…. Of course the technology was simple then. single pane windows and hollow walls….
    Hop your OSB box doesn’t leak.

  64. CS:

    While you are at it lets license and tax bicycles to pay for the bicycle lanes. A system of toll roads would also work if one wanted to go on your model. Particularly high taxes could be implemented for all truck traffic into the city to ensure that people living in the city pay their fair share of highway use for bringing in things like food. Perhaps rural municipalities could charge a much higher road toll to non residents.

  65. “Ok I can’t believe this. Spec houses in Happy Valley are selling at $689. 2500 sq ft shitboxes. I think you bears are about to be BTFO.”

    Typical market top signals, low inventory and gloating paper king hillbillies who can’t type more than a sentence. Always a boat load of suckers at the top, and many a developer whose going to go bankrupt building those shitboxes.

    http://www.theglobeandmail.com/sports/hockey/current-former-nhl-players-lose-more-than-13-million-in-resort-deal/article563492/

    http://victoria.citified.ca/news/league-assets-corp-developer-of-colwoods-capital-city-centre-project-declared-bankrupt/

  66. Bearkilla when I hear someone who lives in a post war house in Victoria call Langford houses shitboxes, I know they really don’t know what they are talking about.

    It’s the same as when I hear a person speak about cars built in the 1960’s. That they don’t build them like they used to. And I am glad they don’t.

    The materials used, building standards. education and quality of workmanship is superior today than in any other decade of construction.

    Stop living in the 1950’s

  67. @CS
    Why stop there? Perhaps people living on the mainland should not subsidize BC Ferries. Perhaps people who chose not to live in urban areas should not subsidize public transit. Let myopia reign supreme!

  68. Tall Guy:

    Not trying to get a rise out of you or anyone else. All am I suggesting is that we at least examine the Swiss model of small interlocking towns as an alternative to high density larger cities.

    Frankly, I am at that age where it wont affect me directly. If Victoria decides to follow Vancouver in creating ever increasing high density, I will be long gone before they finish building. I am hoping that we can make more intelligent planning choices for the next generation. I lived through the growth of massive development in Toronto and I heard all the argument how if we just make the city density higher than everything will be more affordable and will solve all the problems. The main thing I saw is that a lot of developer and land speculators got extremely rich.

    For all those who are arguing for more density let me ask a serious question; what do you believe the optimum population of Victoria should be. 500,000; a million or more.

  69. @Caveat Emptor

    “No high income developed country has replacement level fertility (2.1). France, NZ, Ireland and Iceland is the closest.”

    So you suggest we just die off, replacing ourselves with people from elsewhere in the process. Good God, the West really is doomed if that is the general view.

    Fortunately, in Canada, the first nations still have a positive fertility rate. Good for them.

  70. @ Bman

    “Copenhagen is connected to outlying suburbs by actual freeways (130 km/h) and rail transport. I don’t see what the problem is with giving people a choice of commuting or living close in.”

    That’s fine with me as long as th0se commuters pay for their freeways in full, plus all the exterrnalities generated by freeway use including noise, air pollution and the general ugliness that highways driven through otherwise tranquil countryside create. Oh, and they’d better pay a carbon tax too.

  71. @ Barrister

    “I suggest that you move to either Toronto or Vancouver which are already high density.”

    Having lived most of my life in Victoria, why would I do that?

    “If you think Victoria is unaffordable try comparing it to New York.”

    Why don’t you try the comparison?

    I see Donald Trump’s old family home in Queens sold at auction the other day for $1.39 million. A large, detached tudor-style home with room for a large family. Much bigger and better than that house on Greatford Place that went the other day for $1.25 million.

    I could probably exchange my house in OB for a better house in Queens and finish up with some change.

  72. At the very least we need to see the Canadian fertility rate back above the replacement rate where it was before Pierre Trudeau became Prime Minister. After that, we can consider more immigrants, people like Marko.

    No high income developed country has replacement level fertility (2.1). France, NZ, Ireland and Iceland is the closest.

    I don’t see many middle class 2 working parent families having more than 2 kids anymore. With today’s child raising expectations it is just too expensive and tiring. The few demographics I see still regularly having large families (4 or more kids) are (1) Rich folks with a full time stay at home mom, (2) Certain religious groups, (3) near and below poverty line families. I don’t know if the data supports that but what I see in middle class city life is that 1 or 2 kids are the norm for folks that couple up.

  73. Ok I can’t believe this. Spec houses in Happy Valley are selling at $689. 2500 sq ft shitboxes. I think you bears are about to be BTFO.

  74. Less we forget the CMHC warning from a few weeks back but keep pumping the fake news Mikey.

    CMHC issues alert for Victoria housing, warns of ‘overvaluation’

    Canada’s housing agency has added Victoria to its list of real estate markets with problems, seeing danger signs in the B.C. capital’s home values.

    The agency’s decision to issue the red alert in its overall assessment for the Victoria region has been months in the making.

    “Evidence of problematic conditions has increased in Victoria since the previous assessment due to moderate evidence of price acceleration and overvaluation,” CMHC said.

  75. Barrister,

    Mike likes poor people though that he can milk in his slumlord shacks then kicks them to the curb. He explained it in detail once on here…. “transitional housing” is the nice way of saying welfare housing. Greed has no bounds.

  76. “I do wonder why more people in their 70s and 80s aren’t selling. Is something missing in the condo/townhouse market that makes them hang on in their houses?”

    Imagine yourself waking up tomorrow with the same brain, same motivations to get up and do something productive, but you look a little older and maybe a few joints hurt. You take your heart & stroke pills, & away you go managing your household, talking business with your friends, adjusting your investments, debating politics, contributing to charity work, etc.

    Also imagine that you’re still paying taxes, and have paid A TON of taxes your entire life, PLUS you’re doing charity work on the side.

    There’s no reason whatsoever to decide you’re moving out of your home – seniors have the same motivations as anyone else to stay where they’ve made a “nest.”

    It has nothing to do with facilities available at condos – people are people whether they’re 80 or 30. 80-90% don’t develop dementia/Alzheimer’s, and they’re living 10+ productive years longer with better health care (if they stay active).

  77. Yep Mike, prices went up in 80’s because rates went from 20% to 12. Rates are heading up with debt levels of 167% versus 66% in the 80’s. They didn’t even put government intervention in back then, the rates crashed it and we only need a couple of percent this time around to tank this bloated pig.

    “Canadian homebuyers face some challenges this year, including new mortgage rules that make it harder to qualify for a mortgage and regulatory changes that will push up mortgage financing costs,” said Cliff Iverson, president of CREA. “

  78. Barrister:

    You’re right, you’re the only person who has ever worked hard. My lazy generation should commute 3 hours everyday and live in boring cities.

    But honestly, you remind me of the old, bored people who just troll during their boring retirement. You seem slightly more intelligent, but overall a waste of time responding to, as you’re just trying to get a rise out of people.

  79. “Population density is the key to a dynamic, creative economy. Spread people around and all you get is the Colwood Crawl, death on the Malahat, and ever more expensive government funded transportation boondoggles.”

    Why is it always one or the other? In addition to bike lanes and density, Copenhagen is connected to outlying suburbs by actual freeways (130 km/h) and rail transport. I don’t see what the problem is with giving people a choice of commuting or living close in.

  80. CS:

    I suggest that you move to either Toronto or Vancouver which are already high density. New York is great to live in if you have a net income of over 250K a year, otherwise not so much. If you think Victoria is unaffordable try comparing it to New York.

  81. @ Barrister:

    “People get to live and work in manageable sized communities.”

    No, Barrister, I don’t miss the point. There’s nothing necessarily unmanageable about large high density cities, such as New York, for example, which is more compact than Metro Vancouver yet has a GDP almost equal to that of Canada.

  82. @ JD

    “I agree Barrister, the solution is to move out of the downtown core.”

    Nah, we need to kick the economic illiterates and self-serving non-entities on council off council and put on council people who will do some serious rezoning that will allow ordinary working folks with children to live a decent life in the core. For example, rezoning one or two blocks either side of the Avenue could double the population of Oak Bay. Rezone the Uplands for various kinds of high density living (with a waterfront walkway from Cattle Point to the North Uplands Gate) and you could redouble the population of OB.

  83. CS:

    I think you missed my point which is if you move jobs to small communities and help them develop then
    you reduce sprawl. People get to live and work in manageable sized communities.

  84. Economist says it’s 1980s all over again in the Toronto market. Remember how that ended?
    http://business.financialpost.com/personal-finance/mortgages-real-estate/economist-says-its-1980s-all-over-again-in-the-toronto-market-remember-how-that-ended

    Victoria prices surged as we were inundated with Ontarians. If in fact Toronto were to burst again, it could be worse this time with millions of retiring boomers. We’d have to put up with more Barrister types for neighbours 🙂

  85. Tall Guy:

    Got that sense of entitlement working the night shift in a factory while doing school during the day.
    Thirty years of sixty to seventy hour weeks helped push that entitlement along. By the way too old to be a boomer.

  86. @ Marco,

    “The only other way to solve this problem that I can possibly think of is ask the feds to immediately cut off immigration…”

    With only thirty-five million people to occupy a country larger than either China or the US, there’s seems much to be said for having more people here, not fewer. But first we should accommodate our own in a way that allows them the financial possibility of raising a family under favorable conditions, rather than suppressing their fertility by burdening them with outrageous real estate debt.

    At the very least we need to see the Canadian fertility rate back above the replacement rate where it was before Pierre Trudeau became Prime Minister. After that, we can consider more immigrants, people like Marko, but not people destined to live on welfare.

  87. @ Barrister

    “The long term solution is not to increase density in the city but to help move jobs to places like Duncan and Millbay.”

    Population density is the key to a dynamic, creative economy. Spread people around and all you get is the Colwood Crawl, death on the Malahat, and ever more expensive government funded transportation boondoggles. Double the density, square it and multiply by two and Victoria’s economy would begin to justify the current high real estate prices.

  88. John Dollar:

    Maybe we can move Mayor Helps and the city council out of the core as well. North Korea would be about perfect since it is mostly bicycles already.

  89. I agree Barrister, the solution is to move out of the downtown core. Victoria is located at the tip of the island making ingress and egress difficult. Better to move commercial outside of the downtown core and near the Saanich/Victoria border around Uptown.

    In my opinion, the policies of the last few mayors is going to kill commercial business in the core. And that’s fine, have Victoria simply tourism and residences.

    We also need the provincial government to decentralize and share its resources with the other districts. If the province decentralizes then a massive burden on Victoria’s roads will be alleviated and Mayor Lisa can have all the bike lanes she wants.

  90. The long term solution is not to increase density in the city but to help move jobs to places like Duncan and Millbay.

    As for that Syrian family would it not be better for everyone if we resettled people to places like Thunder Bay or the Maritimes where there is a large stock of affordable housing.

  91. Islandscott – interesting that $68k in early 1970’s translates into $390k today. Goes back to my point about previous generations being more fortunate with their timing on housing prices.

    Now the same house is $1.25m, and everything more dated in it as well! So, that’s 3x more than what they were paying in the early 1970’s. Yes, we have ultra-low interest rates, and FOMO panic buyers, but in the core we also have extreme lack of supply and high demand. I def. think outside fundamentals are at play here, i.e. people bringing money in from the outside – just look at what’s happening in Toronto right now, with prices going crazy there, and there’s six million people there. Then, there’s what already happened in Vancouver…

    This article from cbc is food for thought about how we can address the housing crisis here more creatively than just more strata condo towers, or strata townhouse complexes with big ‘maintenance’ fees and onerous regulations. The article talks about things from a Vancouver perspective (they built far too many condo towers). I think – ‘thinking outside the box’ moving forward could help solve or at least reduce Victoria’s housing problems as well. Thankfully, we don’t yet have neighbourhoods full of high rises like Vancouver, and I think we have a former mayor Peter Pollen to thank for that. Let’s not repeat the same mistakes Vancouver did, that would be nice.

    http://www.cbc.ca/news/canada/british-columbia/density-without-towers-vancouver-architect-says-yes-1.3982385

  92. The only other way to solve this problem that I can possibly think of is ask the feds to immediately cut off immigration Trump style and don’t give any benefits of having children.

    Don’t know if anyone caught the story on CTV News last night about the Syrian family that can’t find a rental in the Fernwood area……..people coming to our country have to live somewhere! Density or clear cut Langford to Sooke. What other solution is there?

  93. We are talking about a newer duplex build in a prime area…..there are more affordable options. For example, 707 Stancombe Place $479,000 with a 2 bed suite….which is $300,000 cheaper than a smiliar style house with 2 bed suite.

    My point is for nearly 1/2 the price you still get a lot of fundamental things people desire (decent sq/ft, three beds up, garage, yard, etc).

    Sure, it is not affordable at $849,000 but still a lot more affordable than $1.5 to $1.7 million.

    It is a good argument for density in my opinion.

    I do agree that density is needed, but these luxury condos/townhouses/duplexes do almost nothing to solve the problem.

    If you put up a bunch of $850k duplexes in Fairfield and $650k duplexes in Oaklands area I do think it does solve some of the problem. Someone moving into a $650k will likely vacate a rental condo or basement suite improving rental supply.

    The more people you can shove into the core the less we have to clear cut out in the Westshore.

    and personally I would rather live in a new duplex in the Oaklands area versus a SFH in the Westshore.

  94. Funny how Toronto goes up 22% and it’s a bubble in dangerous territory as per BMO but Victoria goes up similar and it’s “just the beginning of 5 to 7 years of pent up demand”. Someone isn’t living in the real world.

    FOMO is about to have major wake up call.

    Toronto Home Sellers Vanish as BMO Warns of Housing Bubble

    “The Toronto housing market —- and the many cities surrounding it —- are in a housing bubble,” Porter said in a note to investors, where he added that he believes the main culprit is demand not supply. “Toronto and any city that is remotely within commuting distance are overheating, and perhaps dangerously so.”

  95. Yeah, 849k is not really affordable for someone with a median income and no other assistance or equity. 849k with a suite might be okay.

    I’d say that prices for SFHs are out of reach now in many areas of the core and unlikely to be within reach of the median family in Victoria without move up equity.

    Doubt we’ll ever return to a greater level of affordability. Instead land size and floor space will need to be reduced or move further out or somewhere else. I don’t know if we would have stayed in Victoria had the price/income ratio been where it is at now when we graduated.

  96. Marko, I think your post reflects the total detachment that many people have from what is affordable. Even at $650,000, that is a ton of money for a duplex. Not to mention the property taxes are $4,600 a year (which is insane for a lot that size, okay maybe they won’t be that much not in Rockland).

    It’s not suite-able, so I can’t even get a decent mortgage helper other than renting a room to a student until my next kid comes along. I make just under the median income for BC and I’d be lucky to live paycheque to paycheque even with 20% down.

    I do agree that density is needed, but these luxury condos/townhouses/duplexes do almost nothing to solve the problem.

  97. I might be re-developing two properties in Oaklands this year. I have used $225 a square foot as a guideline in estimating the cost. My plan is to build a basement entry home and leave most of the basement unfinished with roughed in plumbing and stud partition walls which reduces my costs. However I also want to build a detached suite at the rear. A 2,200 square foot home with 1600 finished floor area on the main and about 500 square feet unfinished in the basement but with 500 square foot granny cottage at the back.

    Then sell them for 1.3 million each.

  98. 1462 Brooke St for $849,000 is a perfect example of how density could help affordability in my opinion. A 2010 home in that location on a 7,200 sq/ft lot would be north of $1,500,000. At $849,000 you get decent square footage, garage, three bedrooms upstairs, a nice yard, and an awesome location too.

    Move over to Oaklands and this setup drops down to $650,000ish which starts becoming somewhat affordable to middle-upper young professionals. It’s still expensive but better than $1,500,000.

  99. Most folks wait til they accomplish things first before announcing major career moves, just incase.

    Not a career move quite yet, just a side business. The island I am from is a desert 10 months of the year so it would be possible to get all the work done in a 6 week span in the summer time.

    Tesla is still not in Croatia so that dream is not dead yet 🙂

  100. The daily and weekly sales/assessment ratio will vacillate considerably depending on location and what type of property as we head into the spring market.

    Since the beginning of this month we have had 42 house sales in Victoria, Oak Bay and Saanich East. And during that period some 53 new house listed. That’s about 1.3 new listings for every home that sells. Allowing for owners that over price their properties and will need to lower the asking price in the next few weeks and those that will change their minds and cancel their listing, a ratio of 1.3:1 seems sufficient to keep house prices stable in these areas.

    Average days-on-market is 27. Historically 30 to 90 days is considered to indicate a stable market. The DOM is not a good indicator because of how the agents game this indicator by limiting exposure by under pricing and putting a time limitation on showings. 27 days does indicate a market that favors sellers but the DOM may actually lay in the 30 to 90 day range.

    There are also currently 120 houses for sale in these three areas or 2.9 months of inventory. That’s low but not as bad as it has been in the past. So you will get properties selling for over asking price with multiple bids, especially when they are under priced by the agent.

  101. I think the market has transformed to the point that one really needs separate stats for SFH homes and condos for it to be meaningful. Lumping them together may be producing a bit of a misleading picture.

  102. @ Hawk

    I wouldn’t pay much day to day attention to the S/L ratio for Van RE. It’s been convulsing all over the place the last few weeks. It’s probably going to spike again, then drop again etc…

  103. “My approach in Croatia will be 100% different from here. I’ll wear a suite, 7% commission, and sell a global marketing pitch Planning on joining a Sotheby’s International Office in Split (hub to all the Dalmation islands).”

    Was that like last year when you were going to be the head honcho of Tesla sales over in Croatia and it never transpired ? Most folks wait til they accomplish things first before announcing major career moves, just incase. 😉

  104. Marko:

    Do the city planners mostly sit around and think of ways to add to the cost of building a house. If you dont have time to fiddle with your cars you are working too hard.

  105. What the hell is an engineered rain garden anyway.? Are talking water drainage slopes?

    It is this BS where you have to excavate your backyard, truck in a bunch of sand and crap, run perforated pipes through it all that collect water once the sand is saturated and then that flows into a catch basin and if that basin fills up to a certain level it only then drain out to the storm system.

    It’s super dumb. You find them in the stupidest locations such as the new homes on Christmas Hill…..basically someone from Saanich went to Europe at some point and saw it in another country and thought it was a good idea. The minute you cross over into any other municipality this system is magically not required.

    If it actually worthwhile every munciaplity would insist on it.

  106. @Barrister, it’s a garden designed to absorb storm water runoff from your property. Engineering is required because it’s not as simple as sloping into a trench filled with ferns. But it’s also not rocket science. I had to submit a storm water management plan that is less specific. Most of my surfaces are permeable too. My desire is to have a rain garden but to not be forced into engineering and building one is very precious right now since I really don’t like the thought of spending another 20k on something. This way I can simply focus on building a native garden myself over time…. Permit and studies etc so far for me are at about $13,500.
    That’s for the arborist report, two biologists reports, septic test, well test, wildland urban interface report, two surveys, development permit fee, building permit application fee, and building permit fee. This doesn’t include any design or engineering costs (or my energy study). So that is simply the cost to get permission to build.

  107. Rightly or wrongly, what I hear in my circles is that a lot of people really regret moving into a condo.

    I love condo living especially concrete. The numbers don’t make sense versus a SFH with suite but numbers aside I would prefer to live in a condo. Just don’t use the yard whatsoever and I don’t have time to tinker on cars in my garage as I once thought I would. Got to the point where I actually sold one as it was collecting too much dust.

  108. Maybe you can advertise that you have access to the Croatian market?

    Will write my Croatian real estate exam this summer…surprisingly more difficult than here, there is a verbal panel questioning component and stuff.

    I’ll advertise in Croatia that I have access to the “North American” market 🙂 I figure I can pick up a few villas on the island I am from every year and my unlicensed cousin can do the showings and the rest DocuSign 🙂

    My approach in Croatia will be 100% different from here. I’ll wear a suite, 7% commission, and sell a global marketing pitch 🙂 Planning on joining a Sotheby’s International Office in Split (hub to all the Dalmation islands).

  109. I cant speak for everybody but I suspect that a lot of people are staying in their homes longer because of the feedback they are getting from their friends on the condo lifestyle. Rightly or wrongly, what I hear in my circles is that a lot of people really regret moving into a condo.

    The other factor is that a lot of us old farts are are a lot more active and healthier than ever before.

    One friend summed up his move into a condo as getting a place in deaths waiting room. Another neighbour discovered that getting a gardening service was a hell of a lot cheaper than most condo fees.

    But most of us dont move because we enjoy annoying the rather pushy and entitled next generation.

  110. 100 sqft will build a POS. Especially right now. It’s painful to get hit with these quotes right now. I wish I was building three years ago….

  111. Thing is it’s not the 1500s when we needed someone to travel the silk road to access the Chinese market. These days 99% of advertising is just having the listing on MLS.

    Why can’t people just use common sense? No one is China is going to see an ad for a house in Victoria and fly out here to buy that specific house. 99% of buyers will hire one of these 20+ Victoria realtors -> http://www.victoriabbs.com/ to help them buy a home and guess where they will look? MLS.

    I was on a plane to Europe last summer and a magazine on the plane was advertising a condo in Zurich for 3 million euros. If I happen to have 3 million euros I am not going to catch a flight to Zurich and buy that condo, I’ll probably want to see at least 10 other condos in Zurich, assuming I want to buy in the city, which makes the marketing for that particular condo 100% useless. That maganize is about getting the listing agent more listings, not actually selling the unit via magazine.

  112. Can anyone give an idea of how much is it to build in today’s market?

    $150 in the Westshore and over $200 per foot minimum (but closer to 250-300 realistically) in Victoria/Saanich. Victoria kills you with permit fees/service connection fees/driveway and sidewalk replacement/requires additional things that other municipalities don’t such as your suite has to have its own main water shutoff and bureaucratic BS too like they won’t accept handwritten engineering notes/design. Also if a build permit takes you two days in Langford it takes two months minimum in Victoria for an identical house. That is why you don’t see a lot of spec homes, mostly customs. As a builder you can build almost two homes in Langford back to back in the same time frame as building one in Victoria.

    Saanich has their own completely different BS such as an engineered rain garden requirement in many areas, etc. They have some messed up crap too….they are the only municipality that won’t let you build a suite unless it has an interior door connection to the main part of the home.

    It is like who ever is the boss at the respective building departments just thinks up whatever they want. Through in the HPO office and the 100% zero evidence based owner-builder exam and pretty much only the extremely rich will be able to build going forward.

  113. Side
    my range was 200 to 400 sq. based on finishings and materials. Marko is the expert and his was 300 so that would be the figure I would work with.

  114. Doubt you’d get <=200 sq. ft on anything but a cheapest of builds/materials. Trades are charging big money right now.

  115. @ Local Fool – “The only reason anything is affordable now (and in many cases, that is just barely or not at all) is due to interest rates being in a place where they cannot possibly stay for the next 25 years.”

    That’s what I thought five years ago when I was waiting for the correction from 2008 that never really came here. I was waiting for rates to go up, prices to drop, and to save $50K (which seemed like a lot at the time). Boy, was I disappointed! Instead, rates went down, Victoria got really popular, and I lost $150-200K by the time I woke up and bought last year.

    I don’t know how all the factors will play out, and there are local people hanging in with the low rates and suites, so there is not a total disconnect from local fundamentals. However, when houses are going for more than 10 times the local average family income, it is clearly not the local average family doing the buying the way it was historically. So, who knows where the limit is? I think it depends on how popular Victoria is with outsiders, and I can’t see the crush fading.

    I would love to see more inventory to get some liquidity in the housing market. It seems to be all “bunged up” (pardon the expression). I do wonder why more people in their 70s and 80s aren’t selling. Is something missing in the condo/townhouse market that makes them hang on in their houses? Didn’t there used to be an intermediary step between house and care home or cemetery? I think maybe the price differential isn’t enough to make them take the leap, especially now that condo prices have risen as well.

  116. Joker Marko mentioned 300 a sq foot including the garage so 2500 house and 500 garage is 3000 * 300 as a gauge.

    My 2 Cents is +- 100 a sq ft depending on material and quality.

  117. I wonder when the bank will switch to advertising weekly payments for mortgages just like they switched for cars?

    It’s not $800,000, it’s only $850/week!

  118. @island scott,

    IMO, $390,000 for a SFH would be what a reasonable price would be now, presuming nominal interest rates and a market inline with its fundamentals. It wasn’t that long ago that that was the case, too. I shudder to think about the poor first time buyers who are plunging in now without regard to future consequences.

    While it is always true that there is something to be bearish about and if you always pay attention to the negative, you may indeed miss out. However, I think current circumstances in our market genuinely merit some deeper consideration from people jumping in for the first time.

    The only reason anything is affordable now (and in many cases, that is just barely or not at all) is due to interest rates being in a place where they cannot possibly stay for the next 25 years. Yes there’s the new stress test which I think is a great idea – but literally being able to make the payments on a mortgage is quite different, in my view, to being able to actually afford it without it becoming a debt prison.

    Consider that, while you fear being priced out – you might rather have that problem than leaping before you look and getting priced in. And the former problem never truly lasts forever, regardless of what a buy-now-or-never pumper may tell you.

  119. CS, using the Bank of Canada inflation calculator it shows that $68k in 1972 is about $390k now. Not even close to $1.2 million.

  120. Re: Greatford Pl.

    Thanks Luke, Marko.

    Amazing price really, over $1000 per square foot, and it needs total renovation!

    I think part of what we are seeing is due to the inability of people to tell the difference between a lot of money and a stupendous amount of money.

    For some, anything over about two bucks fifty is a lot. For others its over twenty dollars, for yet others, Mark Zuckerberg, maybe, a few thousand, or even million.

    But beyond a certain point it’s difficult to distinguish between expensive and crazy expensive. So when we bought our house on a quarter acre in OB for $68 K it seemed a lot. We even had to borrow ten thousand from the bank and it took us all of six months to pay it off. I suspect if we were young today and considering $1.2 million for an OB bung on a small lot, requiring a 25 year mortgage, it would seem like a lot, but no more so than that $68 K in the early 70’s.

    That may explain why, today, people seem to be making extremely rash purchases. They have no emotional basis for distinguishing between paying a lot from paying a crazy amount.

  121. “Almost every single seller that we bump into right now is asking not only ourselves, but realtors in general, ‘do they have access to the Chinese market?’” he says.

    Thing is it’s not the 1500s when we needed someone to travel the silk road to access the Chinese market. These days 99% of advertising is just having the listing on MLS.

  122. http://www.greaterfool.ca/2017/02/14/fess-up/

    Garth wastes no time posting another article about how the Gov’t, apparently, might be thinking of taxing the massive profits people have been making off certain housing markets in recent years. (Ex. 3705 Crestview where they made a million bucks or so, after costs, just for doing a reno.) That million bucks won’t be taxed if they lived in the house. The Gov’t may be eyeing taxing stuff like this. Other examples abound out there about people making huge amounts for almost doing nothing. Beats working for a living. Or, investing in the stock market – where you might loose and if you win you will get taxed (outside of the tfsa of course).

  123. Leo,

    Garth’s problem is he has some personal vendetta against Justin/Libs and must have strong Asian business interests and can’t dare say what everyone else could see happening in Vancouver for years despite shady Asian realtors and agencies being investigated for fraud and tax evasion. His blog tone has changed and isn’t as appealing as it once was.

    Pent up supply is definitely more like it John. Greed is stopping hundreds of listing but can change overnight when the tide rolls out. Getting caught being priced to perfection will cost those trying to max out. Been there. Grab that cash and make a stash.

  124. ‘Grandma’s’ house in an excellent location at 1908 Greatford Pl steps from Willows beach, just sold. – listed for $1.2m, sold for $1.25m. It needs about another few hundred grand to bring it up to date.

    Interesting new build house just listed today at 1456 Hamley St. in uber-desirable Fairfield. View of Gov’t house you could’ve waved to Wils and Kate & kids when they visited last year. Only $1.975m +GST! Open house on Fri & Sat.

  125. I’d be glad if someone would indicate how much 1908 Greatford Place went for. Offers were to be submitted by last Friday.

    It’s a 1940’s, two bedroom bung with some nice features, leaded lights, oak floors, and a good roof, though otherwise seemingly without renovation. At sale price of under, say, 500K, it would have been fun to fix up.

  126. John Dollar: “We really have to get away from the wild wild west show of BC real estate.”

    I can’t agree with you more.

    I know a few realtors and they really are solid guys. I also know another that will mislead his clients to make a few extra dollars, or get the clients off his plates quicker, or hire a Chinese girl to speak Mandrin for him so he can pump our market overseas.

  127. Based on these anecdotes I’d say this spring will be the biggest drop in real estate values in Canadian history. This is how it plays out. Inventory continues to drop until people are fighting over 1970s condos on Burnside and paying 300k over asking unconditional. That’s the final straw for Vancouver buyers who finally wise up and start buying up houses in Maui instead. Unemployed oil workers from Alberta give up too and move to Nova Scotia instead and take up cod fishing. That leaves nearly dead people from Ontario but they decide that it’s cheaper to be euthanized back home.

  128. Local Fool: ‘That may cause people to speculate, but I don’t think buyers en masse are thinking along those lines atm.’
    The masses listen to whatever is playing on the local television. I think by looking there is where we get a bit of a handle about what people are thinking. A news story is heard and soon people are spouting the information they heard from “experts” as gospel. This information gets passed on and on an permeates conversation.
    In this story, the expert is Tsur Somerville who has always maintained that talking about foreign money is just plane racist. He has also been under fire for not relying on proper research and for being a player in the market rather than an ‘expert’ observer. (I don’t disagree with him that retirees from Vancouver are a big player in our housing market)

    Tony Joe is currently making bank off of his foreign clients and also vilifies any talk of the flood of capital from mainland China into our local housing markets as racist and hypocritical. I can’t stand the guy.

    http://globalnews.ca/news/2716057/very-hypocritical-victoria-realtor-laments-outrage-over-his-pitch-to-chinese-buyers/

  129. On the other side of the coin, I am not sure if it is that easy to price some houses in this market. I know that I am glad that I am not buying into the market right now.

    I suspect that in parts of Victoria people hold onto their homes for quite a while. There seem to be a number of people who have retired early, in their mid-fifties and it is possible that they will stay in the house for twenty years.

  130. Absolutely VicRenter, that’s why I can see a Gordon Head home getting multiple offers when the property is underpriced. You get 5 offers on a house listed a hundred grand below market.

    But what did you expect to happen? That there would only be one offer.

    I really think when it comes to the most costly purchase of someone’s life there should be protection from creative marketing schemes by some agents. And that’s why there should be a fair listing act for residential properties. An agent has to list the property fairly. If the agent intentionally and grossly under prices a property they should be fined and publically censured by the Real Estate Council. A prospective purchaser or seller should be able to look up that agent on their web site to see if there have been any reprimands.

    We really have to get away from the wild wild west show of BC real estate.

  131. “A lot of buyers are more educated and when they see a house listed for $750k they aren’t bothering putting in a 775k conditional as they know there is no chance (depending on the home).”

    That’s the education that I received last year. It was a tough lesson to learn since it’s so easy to get attached to a particular house. But all you can do is keep putting in bids that you’re comfortable with and hope that one works out.

  132. Well I have new neighbours again, who are once again out of towners (Sask), and who are looking to buy. So far I’ve had Seattle (purchased newly built home), Vancouver (currently looking), and now out-of-province (looking)…

    On the flip-side, not much interest from HHVers on my post two articles ago.

    Just some more kindling for the anecdote fire.

  133. What about “pent-up supply”? Is there such a thing at all?

    We are now into our second year of below average active house listings in the core. Have people decided that they no longer want to move to another home? Or that circumstances precluded them from listing and they decided to renovate instead? It is rare today to have someone buy a home and live in it for 30 years. People move around on a regular basis trading up and trading down in the market.

    This has happened in the past when we had below average listings for a couple of years. Followed by a large increase in active listings well above the average. Such as what happened in 2008 and 2009.

    That’s pent up supply.

    As for pent up demand. We all should understand by now that any time the interest rate or prices increase fewer people can buy. So while people wish they could buy a home, the fact is that fewer can buy a home. That’s not pent up demand.

  134. In case anyone’s interested in following more discussion about the new ‘Principle Residence Designation’ that the CRA now requires Canadians to disclose on their income tax returns. ‘Greater fool’ just posted an article about it:

    I’m a bit concerned about the shift in tone on Garth’s blog recently. Makes sense to me for someone claiming a massive tax break (principal residence exemption) to have to fill out a small form on their tax return. But Garth is painting this as some large government overreach designed to invade our privacy and set up for a future cash grab. Smells of trumpism and alternative facts..

  135. Wow – what an awful time to be house hunting right now!

    The Rithet condo looks like it could be a 1990’s leaky condo! possibly w/ mold issues, so on top of paying $77k over those people may now have to deal with the health effects from that. I once worked w/a guy who lived in a leaky 1990’s condo and all he did was cough all day, suffering adverse health effects from that.

    In case anyone’s interested in following more discussion about the new ‘Principle Residence Designation’ that the CRA now requires Canadians to disclose on their income tax returns. ‘Greater fool’ just posted an article about it:

    http://www.greaterfool.ca/2017/02/13/the-house-tax/#comments

  136. @ Totoro,

    Agreed, right now houses will almost sell themselves. I’m sure a house actively on fire could find a few buyers to come in over asking…and I’m not being facetious in saying so.

  137. @Marko – Any sense of approx how many offers are being placed on the popular core houses right now?

    It is starting to drop for sure, but not because of decreased demand in my opinion. A lot of buyers are more educated and when they see a house listed for $750k they aren’t bothering putting in a 775k conditional as they know there is no chance (depending on the home).

    Basically, last year you had 10 offers and 8 were conditional and 5-6 were barely above asking.

    This year it seems like it is down to 5 offers but 4 are unconditional and those 4 are bidding significantly above ask.

    Overall it is way worse this year depsite less offers from some of my observations.

  138. I see the moi is down on your chart now. I’d say now is a very good time to sell. Maybe the best in the history of the blog. For owners of rental property my guess is they are waiting to see if the capital gains rate is raised. If it is not some of them will likely sell as it will be a risk again next year. Maybe homeowners with suites have similar concerns.

  139. I thought overall it was not a shortage of listings but an increase of demand?

    We’ll see. All the way up to December 2016, new listings were not down at all. January was down though, and February looks just as bad. So people were not avoiding listing their places all of last year, but something is definitely different this year.

  140. I thought overall it was not a shortage of listings but an increase of demand? Did we not just have this conversation a few posts back? Do we have different data now?

  141. Hawk

    Have you tried the Marijuana to help you get through this delusional period, They say it is the wonder drug.

  142. 5 to 7 year pent up demand ? Gwac has really lost it now. Bet all those pent up Vancouver buyers/bagholders from last February are questioning their sanity taking a $300K plus hits. Coming soon to Vic as sales decline….oh right, blame a couple days of slush on the low sales. Desperation showing.

  143. @ Barrister,
    A few years back people weren’t necessarily selling before buying because they couldn’t sell. My friends just rented their place because of this. Easy to rent but difficult to sell. Now they just don’t see the need to sell it.

  144. John Dollar:

    Interesting point about people finding a home before putting their home on the market. I suspect that is very true. Opposite of what it was a few years back. But you cannot put in an offer conditional on the sale of your home with any realistic expectation that anyone would take it.

  145. In the last week the sales to listings ratio has dropped to close to 1:1 for all types of properties in all areas. But I have found that sales increase then listings.

    People are buying a new home before listing their existing home.

    -wouldn’t you?

  146. @ gwac,

    Perhaps, but the activity levels seems rather extreme to just attribute it to pent up demand, and adding to this is the fact that Victoria is hardly alone in terms of what is occurring. I don’t think populations in our largest metro regions suddenly discovered low interest rates or became richer. I know, here we go with the same arguments as every other thread.

    But I agree this is panic buying, but then what causes the panic? Perception of “yellow peril” about the flood the market? People suddenly watching too much HGTV? Poloz’s comments continue to be dovish, and I’m not sure I see any imminent rate hikes. Trump’s protectionism may actually encourage the BOC to allow the dollar to fall to remain competitive. That may cause people to speculate, but I don’t think buyers en masse are thinking along those lines atm.

  147. You know it’s tight out there when an old & original-cond skybox (that’s in the dirt 🙄 ) goes 77k over ask.
    103-525 Rithet, assess 370, ask 399, sold 476.

  148. For 500 to 750 a month you can lease a lot. I never judge wealth by vehicles. I know a lot of very rich people who drive 10 year old cars and vice versa. Students have their parents lease cars for them. Some cultures are very status conscious.

  149. “you have very young buyer showings up in cars like BMW i8s.”

    Yep. I can’t believe how much money appears to be floating around out there from what I see at open houses. Also, has anyone looked at a UVic parking lot lately? There are many more luxury cars that I’ve ever seen there before. And the professors certainly aren’t the ones driving Porsches.

  150. This not wild local speculation. This is 5 to 7 years of pent up demand being released in panic mode.

    Locals en masse felt this market was going no where and maybe down so no rush to do anything. Now we have locals mixed in with other Canadians and add a few foreigners and little land availability. Bang you have this disaster created for buyers.

  151. Thanks. That’s interesting to note.

    More generally, I have seen some people claiming that Victoria is simply lagging behind Vancouver, with the implication being that our market would also put the brakes on as in some of the Vancouver market segments now.

    On the other hand, Victoria seems to be mimicking Toronto and a few other markets as well. Regardless, I’m not sure how much I buy the foreign investor argument of “juicing the market” here (as opposed to wild local speculation), but what do I know. This is just crazy, in any case.

  152. Where are you finding most of the recent demand coming from? Is it locals, or out-of-towners?

    Most of my clients are local and the rest are tough to read. I was at a few houses in Gordon Head over the weekend and you have very young buyer showings up in cars like BMW i8s.

  153. I know y’all would like to consider yourself upper class but I know the upper class wouldn’t sit at our table at the union club. Even Barrister had to work his entire life before he could enjoy the last bit.

  154. @ Marko,

    Where are you finding most of the recent demand coming from? Is it locals, or out-of-towners?

  155. Dasmo:

    I am not sure that the definition of middle class really works in the bigger cities. A young policeman married to a young firefighter most definitely have a combined income over your middle class limit.

  156. I doubt anyone on here can be classified as anything but working middle class +-.

    Pretty sure you are off on the middle class thing Dasmo.

    Middle class by income is a family income of $61-88,000/year. Many, if not most, posters here are above this level. Plus several posters are retired.

    Middle class family net worth falls between $283-489k. Depending on how long you have owned a home and whether or not you have a pension your net worth may be below this despite an above middle class family income.

    http://www.macleans.ca/economy/money-economy/are-you-in-the-middle-class

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