February numbers: another leap upwards

After a brief period of time where the market-o-meter merely said the market was hot, we are now back to an assessment of ludicrously hot (which is triggered at residential months of inventory under 2).   The market predictor uses Victoria’s history of market conditions and associated price movements in single family homes to come up with a prediction of how fast prices are likely to change.  It is based on the data we have from 1996 onward so keep in mind it doesn’t represent all possible market conditions (the crash of the early 80s for example).

With a residential MOI of around 2 we have seen anywhere from 10% to 20% annual rate of appreciation in the past with a median of 15.5%.  Last year in February this model predicted increases of 13% which was a bit less than the actual value.   That’s because the market continued to heat up in the following months and the predictor looks at the market conditions as they are in the current month.

As unbelievable as our numbers are from an absolute perspective, I will say it again and again:  when the market is this hot, there is no such as a price plateau.   The latest VREB numbers hammered this home again with the detached average jumping by $50,000 and the median up by $75,000 over January.

As usual, the monthly numbers are noise, so what we want to find is the underlying signal.  To get at the signal, we can simply take the trailing 12 month average which will flatten seasonality and show us the trend.

Another way to look at it is by what extent are prices rising on a monthly basis during this upward trend.   With monthly averages swinging wildly, how much is the market really appreciating every month?

Still pretty variable, but the jump last spring is pretty clearly evident when detached homes were increasing by nearly $10,000 per month.  As is the slower period in the fall when appreciation rates were a mere three or four thousand a month.    Will we see another spring of these insane jumps?   Well unless we add some more inventory I don’t see how it can be avoided.   With a puny 18 additional residential listings in February, we are nowhere near a normal year where hundreds of listings are added in the same time.

The one weakness in the market right now is detached sales.  They are down 25% over this time last year while condo sales are keeping pace with last year.   I often hear people using the theory of volume analysis to indicate that increasing prices on decreasing volume is a sign of a market top.

However as far as I can tell, a market where there is no shortage of supply like the stock market would not necessarily behave the same as the housing market so I’m not convinced that this translates.   What do you think?  Does the fact that sales are dropping mean our bullish trend is weakening?

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324 thoughts on “February numbers: another leap upwards

  1. @Lurkess – the listings in the Map are from my PCS feed, which is targeted towards 600 – 950k, 3+ Bedrooms. I just pulled what was available, your Offer may not have been on my feed or just dropped off. The listings shouldn’t be expected to be complete, now that I’ve started though I might as well keep it up to date as new Pending Offers hit my feed.

    @Vic&Van – agreed on Maplewood. I’ve added a Sales Price Map to compliment the % Assessed Sales to gauge Prices vs excitement. 3351 Doncaster Dr jumps right out when putting both perspectives together.

    For my own curiosity I’m going to maintain this Map. Standard Caveats apply, and interpret as you see fit.

  2. AG: I do find it amusing how concerned you are with whether other people think of you as a minimalist or not.

  3. That’s what money does. It buys you time. And it means that you don’t have to compromise.

    Except for the trade you did in spending your time to get money if you didn’t inherit or win the lottery. Far too big of a compromise for me once I hit a sustainable quality of life. I just don’t need more of anything but time.

  4. No-one, including you, has unlimited resources as far as money, time, energy and health are concerned. Everyone makes choices based on their values. Luckily we each get to decide this.

    I think the compromise definition you are referring to is “accept standards that are lower than is desirable”. If so, you would be wrong because I’m happy and comfortable where I am for the reasons important to me and I chose this. How can it be a compromise if you did what you wanted and feel like you have enough. Since when is more space always better? We didn’t even use it all when we had more space.

    If you desire a big house in, say, Uplands and are willing to do what it takes to have that, well great. We could buy this house, but that would be an undesirable compromise. In my view, and this is subjective, the greatest purchase you can make is your own time, not more and bigger once you have enough. Might be different for you.

    Here is an interesting article on house use downsizing done by choice:

    http://www.nytimes.com/2012/11/29/greathomesanddestinations/in-raleigh-nc-cutting-living-space-to-make-room-for-life.html?_r=0

  5. Because a large space requires more time to maintain. Unlike money, you can’t get more time.

    I have a large house. So that must mean I spend all my time doing maintenance, right? No.

    I have a couple of gardeners, a cleaner, and if anything goes wrong I call a professional to fix it that day. In fact, I spend far less time on maintenance than you do.

    That’s what money does. It buys you time. And it means that you don’t have to compromise.

  6. That, my friend, is the absolute definition of a compromise. Why not travel AND have a large, comfortable living space?

    Because a large space requires more time to maintain. Unlike money, you can’t get more time.

  7. No. A house, ultimately, is the environment that you choose to live in. Possessions are the things that you fill it with.

    posession – noun – 1.
    the state of having, owning, or controlling something.
    “are you in possession of any items over $500 in value?”
    synonyms: ownership, control, hands, keeping, care, custody, charge, hold, title, guardianship
    2.
    an item of property; something belonging to one.

  8. We can afford a bigger house and have lived in both. It isn’t a compromise for us – I prefer it because we travel and time is more NB to me than more space

    That, my friend, is the absolute definition of a compromise. Why not travel AND have a large, comfortable living space?

    You’re prioritizing what is important to you, which is great. But it comes at the cost of something else.

  9. A house is nothing further than a possession.

    No. A house, ultimately, is the environment that you choose to live in. Possessions are the things that you fill it with.

    I choose to live in a spacious, peaceful environment. I guess I’m lucky that I have the choice.

  10. Good write up by Garth on blind auctions which are prevalent here and a total scam to suck in the sheep.

    “The system is rigged in favour of sellers and their agents. It is amoral, inefficient and sleazy. There is no other commodity which changes hands in a more obtuse, unfair and non-transparent fashion. And, ironically, real estate is the most expensive thing any of us will ever purchase. To do it under these conditions, intimidated and manipulated, is a crime.”

    http://www.greaterfool.ca/2017/03/05/the-manipulators-4/

  11. Not really – it is a choice. We can afford a bigger house and have lived in both. It isn’t a compromise for us – I prefer it because we travel and time is more NB to me than more space. I’d agree minimalism is not about compromising what is really important to you, but more about thinking about use patterns. I think the point is that biggger houses don’t necessarily make you happier and often stuff expands to fill the space and you have to spend time taking care of it and the house. if you analyze patterns of use you might be surprised at what space and stuff you actually use and need. It’s not a good bad thing but a critical thought thing Imo. From a financial perspective a bigger house may be better.

  12. In my opinion, having a large house and choosing not to overfill it is the essence of the minimalist aesthetic/lifestyle.

    A house is nothing further than a possession. Probably the biggest one you will ever own. So no, having the biggest possessions does not make you a minimalist, unless we are talking alternative facts now.

  13. All this talk about “look at me, I’m so great for living in a small space” really confuses me.

    Minimalism is not incompatible with a large space. Just because you have a large house, doesn’t mean that you need to fill it with junk.

    In my opinion, having a large house and choosing not to overfill it is the essence of the minimalist aesthetic/lifestyle.

    Enough of people pretending that they live in a small house out of choice. Admit it – you live in a small house because you had to make a compromise.

  14. I think minimizing things works for a lot of people. Different strokes for different folks. But personally I enjoy having the space. I like having room for my books and grand piano as well as room for guests. But different things work for different people.

  15. LeoS, yes you’ve hit the nail on the head – it would be interesting to see the data controlled for other factors.

    The buildings with no restrictions are most often new buildings, which automatically have a price premium just because they’re new, not because they have no restrictions. And developers like having shiny new & no restrictions, because they can sell the whole building fast to the broadest market, not because prices remain high over 10 to 20 years.

    The AIC report said, “buildings that limit the occupancy to older residents received a 20% premium to similar un-restricted units. Cannaday (1994) presents a simple model that suggests limited constraints are more valuable to owners in a building than stricter constraints. Examining a set of condominiums in Chicago, he finds that allowing cats only raises property values by 5.5% relative to forbidding pets entirely, while allowing dogs, either small or large, lowers values.”
    http://www.aicanada.ca/article/do-restrictions-on-renting-increase-condominium-values/

    So there you have several studies saying the opposite – because while you might turn away people with pets, you’re going to attract >50% of people that don’t have pets.

    It’s a complex issue that deserves more thought and analysis, because it’s just not accurate to say “your condo won’t go up in value” with restrictions – it’s often not the case.

  16. I keep meaning to redo the sock drawers

    The socks were one step too far for me. However I do find folding my shirts in little squares very effective. Also got rid of tons of stuff based on that book, even though she is a bit whacky.

  17. Something to ponder for the pets/no pets argument. Yes I realize I am not controlling for many factors here… This is just a 5 minute search.

  18. Yes, I like that weirdo Maria Kondo who advocates for a very intimate relationship with possessions. I keep meaning to redo the sock drawers. I have redone the kitchen entirely and it was a bit… magical. Honestly, I do have friends.

    CL storage is awesome. Growing up we were poor and my parents stockpiled all sorts of things in an effort to buy on sale and keep costs down. They still do and I dread the day I get called in to sort.

    I find that the opposite is true for me. We don’t stockpile stuff. Live in a walkable neighbourhood and buy back your time so you can cook based on whatever is in season on sale and find what you need used.

  19. When getting rid of stuff I found it important to embrace the concept of sunk costs. Just because you spent money on something doesn’t mean you have to keep it

    Another good way to think about it is Mr Money Moustache’s concept of using craigslist/usedvictoria as long term storage. Have something that you think you might need in the future but won’t need anytime soon? Sell it on craigslist. If you ever need it back you can easily get it back from there (for most things). Better than paying to store stuff whether that is in the form of buying a bigger house for your stuff or actually renting a storage locker.

  20. Good thing is – you can do what it takes to have what you want and you’ll likely find you have more money and less stress at the end of it. Heck, we’ve got two bathrooms and six people and have garden parties for 20-30 fairly regularly – no problem. In 1400 square feet I never really go upstairs – kids zone. I use the main floor and patio a lot and it is more than enough. I go to the rec centre and walk for exercise. When getting rid of stuff I found it important to embrace the concept of sunk costs. Just because you spent money on something doesn’t mean you have to keep it. If you haven’t used it in a year …EDIT “Consider giving it to Leo” .

    And financially downsizing a house can really be a windfall in our market.

  21. Totoro

    I have a lot of shit. It really just adds stress. Why the fuck do I have 4 chain saws. 6 bikes and the list goes on. Time to reevaluate what Crap I really need.

  22. Easy for a couple of single guys living a city life to only have a shirt and a chair…. but yes a good message. Question your purchases. Do I need 6 bathrooms?

  23. “3020 Uplands Rd just got slashed $100K too. Looks like Oak Bay is starting to really tank. Get out while you can.”

    Call $100K a slash?

    LOL

    I’d call it a piddling adjustment of no practical significance whatever. I mean, if you’ve got $2.5 time ten raised to the power of six to spend on a very boring house squeezed between Uplands Road and a very busy Cadboro Bay Rd., then why’d you worry about the odd hundred Gs. As it is, even after the “slash,” they want 0.5 X 10^6 more than the assessed value.

    Well good luck to them.

  24. Yep. I am really concerned about the environment and how consumption causes all sorts of issues. I find myself evaluating purchases on this basis. We buy a lot of things used and feel good about it. Not a hardship at all. The kids are completely on board. And what do you really need when you analyze patterns of use. And while we are off topic – for anyone building their own place or considering layoutI highly recommend ‘A Pattern Language’ by Christopher Alexander.

  25. Totoro thanks for sharing.
    Ignoring the 2 guys. The concept and facts are very interesting and worth exploring.

  26. I’m a minimalism fan. Watched the movie and thought it was good with a bit too much focus on hugs and travel (like both but not the message – more math, case studies and facts please). We downsized from 2100 square feet to 1400 square feet in 2012. We got rid of a lot of stuff. I haven’t missed any of it. Part of the reason I was able to retire in my 40s was minimalism. I have minimal personal effects – except for kitchenware cause parties!

  27. Does anyone happen to know of a “Cheers”-type bar in Victoria where the alcoholic regulars “know your name”? Asking for a friend.

    My husband said Bartholomew’s and The Beagle Pub in Cook St village (aka The Regal Beagle).

  28. Marko

    Love the part about usage of rooms. There is actually one room in my house I have been in less than 20 times in 9 years. My house is 3200 before I get attached. :).

  29. Minimalism: A documentary

    It’s on Netflix. Very interesting. Discusses why homes have gotten larger. It’s to fill all the shit we buy that we don not need. Well worth the hour.

    Watch it a few months ago…..wish the two guys were a tad more engaging, but 100% awesome message.

  30. Minimalism: A documentary

    It’s on Netflix. Very interesting. Discusses why homes have gotten larger. It’s to fill all the shit we buy that we don not need. Well worth the hour.

  31. Yeah, seems pretty obvious to me that any kind of restrictions (pets, rentals, age) will lower condo property values. I’ll try to pull some local stats to back that up in a future article though.

  32. The fact that Marko sells condos for living and owns investment condos may make him biased against owner-occupied. The fact that my condo realtor owns a house & not investment condos makes him a little less biased.

    “To every single argument I’ve made you’ve replied with something totally off tangent.”

    That’s just not true – I actually replied directly to your points. You introduced this whole topic of bylaws – I gave examples & studies that proved the opposite. You’re just frustrated because I’m giving you an opposing view point (and using the very same studies that Totoro is).

    “all I am saying is if you introduce pet restrictions you take out a huge segment of the market and then just apply Econ 101 – supply and demand.”

    That’s the opposite of what the AIC report showed though

  33. A lot of my clients read this blog…..you and Info have brought me a lot of business over the years.

    My friends used you on my recommendation and were very pleased. Too bad they sold before the big run up of 2016 though!

  34. I’ll keep it short: I don’t agree with your analysis of the data for Victoria and the conclusions you reach – no point in continuing the discussion as I’ve posted why. I strongly agree with Marko who sells condos for a living in Victoria and, moreover, owns five.

  35. Marko, you’re trivializing the problems with pets

    All I am saying is if you introduce pet restrictions you take out a huge segment of the market and then just apply Econ 101 – supply and demand.

    To every single argument I’ve made you’ve replied with something totally off tangent.

    It is exactly like the strata meetings I go too……”but Airbnb is hurting hotels downtown…..” What does that have to do with out strata corporation again? Are we going to worry about Uber hurting Taxis too? Not up to the strata corporation to fix disruptive business model problems.

  36. Jeez Marko , I wonder why. That was your #1 classless comment.

    I am arguing AGAINST pet restrictions……lol……sigh.

    A lot of my clients read this blog…..you and Info have brought me a lot of business over the years.

  37. “Buyers call me to buy a condo and if they have a cat or dog 100% of them are not willing to put their dog or cat to sleep”

    Jeez Marko , I wonder why. That was your #1 classless comment. #2 being you only meet one smart person a year. No doubt now you’re an animal hater. Amazing you get any clients with those beliefs but guess they don’t read this blog.

  38. Back to a much earlier thought; when should we be getting together at the penny farthing?
    Lets just pick a date and see if anyone shows up.

  39. Totoro, the only thing that is clearly correlated is what I said in the first place:
    “It shows that once you went over a certain price ($500k in Vancouver) and/or size, the owner-occupied units were valued higher, because you’re now talking about people wanting homes, not investments or vacation rentals. ”

    I didn’t “err” – I was saying exactly what I meant. This wasn’t about “smaller city lower-end condos” – it’s about higher-end condos that people want to live in.

    The same study that you quoted says: “What effect rental restrictions should have on prices and values is not clear. Restrictions reduce a potential investor’s return, making a unit in a building that forbids rental of lower value to investors2. This will push down market values by reducing demand. On the other hand, owner-occupiers might prefer a building with rental restrictions, such that they would pay a premium.”

    Rental restrictions don’t automatically mean your building is valued lower. You are just interpreting the data from an investor point of view. (Vancouver has > 35% condos owned by investors that want rentals)

    The way I interpret the same data is that the value of your building or unit depends on the targeted buyers and location. Also, the same policies that may turn off some buyers may turn on others.

    It’s not a black/white either/or issue.

    Marko, you’re trivializing the problems with pets – although I know people who have them for medical reasons so there’s a way to work around that. (Again, that study showed that dogs actually decrease condo values.)

    Rest assured that there are good % of buyers that want owner-occupiers in their building (and are thus marketed to them that way), and condo issues are complex.
    Condo Hell
    eg., http://www.macleans.ca/society/life/condo-hell/

  40. Overall buyers just need to be aware that by-laws can change depending on who’s on strata. So it’s hard to make a blanket statement.

    It also depends on where you’re buying (eg., trendy West End people like dogs, but a retiree North & West Van enclave, not as much)

    I’ve walked into buildings where the wet dog smell is so bad that you almost hurl – I kid you not.

    Once again, off topic. Yes a building with a lobby that smells nice is going to be easier to sell than one that doesn’t smell nice.

    Buyers call me to buy a condo and if they have a cat or dog 100% of them are not willing to put their dog or cat to sleep; therefore, they automatically don’t look at condos with pet restrictions. It is not a difficult concept.

    If a building introduces pet restrictions for various other reasons that’s great, but the reality is on average the market value will drop.

    Let me put it this way….why do all brand new developments in Victoria have bylaws with no restrictions? Because developers are pretty smart people….most even amend the bylaws to allow for more pets than the standard BC Strata Property Act bylaws.

    You don’t see developer advertising “No rentals, no pets, no BBQs, etc.” come see our development. They leave it up to the strata corporations to introduce restrictive bylaws and decrease re-sale value.

  41. 3020 Uplands Rd just got slashed $100K too. Looks like Oak Bay is starting to really tank. Get out while you can.

  42. Some people find relentless prolixity just as annoying as relentless youtube links.

    If only we could get totoro and john/hawk together for a coffee date – maybe a romance would blossom 🙂

  43. We have another Oak Bay price slash of $95K at 2780 BEACH Dr. That’s a healthy whacking in prime Oak Bay with some waterfront view. I’m sure Luke’s been in the crawl space and attic already deeming it another crap box. Sad.

  44. @househunting thanks so much for posting that, that is really cool. i looked at your data sheet cuz i was wondering why the house we placed an offer on was missing from the map. curious why there are some rows that are missing on your map? thanks

  45. “Some people find relentless prolixity just as annoying as relentless youtube links.

    Just sayin’”

    I second that.

  46. Gee Luke, a house you actually haven’t been inside of. The board’s new authority on affluent neighborhoods of Victoria after a few months doesn’t get out of behind the tweed curtain anymore to see where other well off people live. Those are high end hoods where they aren’t all stuck up.

    Kinda sad when one needs their ego stroked to justify dumping their life savings into an overvalued asbestos box so many Oak Bay houses are, not to mention mold boxes so many others on here can verify. I’ve heard of a couple of real nightmares the last few months in that area.

    What to watch for in Oak Bay’s older homes

    Asbestos is also a common substance that Kent finds in Oak Bay’s homes. “Every (older, non-renovated) house has asbestos in it,” he says.

    http://www.oakbaynews.com/lifestyles/379256401.html

  47. Some people find relentless prolixity just as annoying as relentless youtube links.

    Just sayin’

  48. And from that same article:

    Having any sort of rental restrictions on units in a building will always lesson the pool of potential buyers (like investors), but it doesn’t seem to negatively affect the price in which the unit will end up selling for. In fact, it’s the opposite. In a Downtown Vancouver Ownership, Occupancy, and Rentals study, the median value for owner-occupied units were valued over $30,000 to $40,000 more than non-owner occupied units.

    She makes the same error you are making. Just because an owner occupier spends more for a unit with greater floor space or amenities on average than a non owner occupier doesn’t mean buildings with rental restrictions are not selling for more than the same type of unit in a building without rental restrictions. What is clearly correlated is the fact that rental restrictions reduce value. I posted the data link to the recent study of Vancouver on this point on this below.

    When people buy a condo to live in, they’re paying for different things than investors do – so that really can carry a price premium.

    Agreed if we are not confusing this with ROI/value based on a financial analysis. For quality of life this may well be worth it and certainly for the over 55 buildings there is, absolutely, and despite a 27-year-old study from Florida and Chicago, a reduction in value in Victoria for the same type of condo. Same in Vancouver.

    According to realtor Maria Werbicki, who has shown units at Magnolia Gate and other buildings in the neighbourhood, comparable condos without age restrictions are valued at up to $50,000 more than those in age-restricted buildings. Value gaps of 10 to 20 per cent are the norm.

    http://www.vancouversun.com/business/Couple+with+baby+asked+leave+adults+only+building+give+your+home+give+your+child/7537148/story.html

    from the same AIC study

    Yes, which is why I stated this was the finding for unrestricted pet rentals. I don’t have any data for Victoria except for Marko’s on the ground experience and this article from a large local property management and RE company:

    Restrictions can have an affect on the number of potential buyers that will look at your condo. If you have a rental restriction, we know now because of CMHC that you are marketing to only 80% of the buyers; if we add an age restriction in, we are reducing this number of buyers by another 30%. In some cases, the mortgage insurers like CMHC are even reluctant to lend on buildings with age restrictions. While I don’t have a figure for the number of pet owners, from my experience working as a buyer’s agent, this could be somewhere between 30% and 40%.

    “I am sure by now you can see where I am heading: if you are selling a condo that does not allow rentals, pets, or children, you could be marketing to as few as 20% of the buyers in the market. If you had the exact same condo in two buildings, one with these restrictions and one without, which do you think will likely sell first?

    Plus this from Vancouver:

    Overall, though, properties sell for significantly more in stratas that allow pets compared with properties in stratas that do not. For example, in the past 60 days, one-bedroom condos in Vancouver’s West End that allow pets sold for 28 per cent more than those that don’t.

    http://www.thecondogroup.com/high-cost-strata-restrictions/
    https://www.linkedin.com/pulse/how-do-your-stratas-bylaws-affect-condos-value-lindsie-tomlinson

    Another factor that influences value imo are strata fees.

    Honestly I think the other assertion is also flawed – that rentals automatically increase condo values. It all depends on which neighbourhood you’re buying, and which buyers you’re targeting.

    Yes, and my statement was you might be right about smaller city lower end condos but in Victoria restrictions cause values to drop vs. similar units which do not have the restrictions.

  49. Wow – Hawk actually posted a price reduction (slash;-) that doesn’t look like a crap box! The house up on 762 Westbury Rd. Good one Hawk… At least, it doesn’t look like a crap box at first glance. Maybe things are turning around and you can get back in the market, eh Hawk? That would be nice if people can afford things again. Only $929k for a family home. I wonder if they’re trying to ignite a bidding war? Hmmm…

    I’m a bit surprised considering how crazy prices are in nearby (shady) Broadmead and (not shady) Sunnymead. What gives on that one? Maybe the location near the cemetery has people fearing the zombie apocalypse?

  50. Regarding age & pet restrictions, from the same AIC study:

    “buildings that limit the occupancy to older residents received a 20% premium to similar un-restricted units. Cannaday (1994) presents a simple model that suggests limited constraints are more valuable to owners in a building than stricter constraints. Examining a set of condominiums in Chicago, he finds that allowing cats only raises property values by 5.5% relative to forbidding pets entirely, while allowing dogs, either small or large, lowers values.”

    The benefit of age restrictions were also from a Florida study, which is a retiree hotspot like Victoria.

    “I read it in light of your assertion that owner occupation in and of itself increases values. It does not. Owner occupiers just buy slightly higher value units ”

    Honestly I think the other assertion is also flawed – that rentals automatically increase condo values. It all depends on which neighbourhood you’re buying, and which buyers you’re targeting.
    From the study you quoted:
    “Investors make up a substantial share of the owners of condominium units in the Vancouver area. In the city, 35% of condominium units appear to be investor owned”.

    So in cities where there are a lot of investor-owned condos, the ability to rent is important, but there are plenty of areas and buildings (eg., Vancouver >$500k in that on study) that shows that people may pay more for owner-occupied.

    The point that I was trying to make (and also my condo realtor) was best expressed in this article from Vancouver:
    http://www.givemebackmyfivebucks.com/2013/03/27/would-you-buy-a-condo-that-has-rental-restrictions/
    “My realtor explained to me that it’s because owners often purchase with their wants in mind, and are willing to pay more for units with a better layout, upgraded features, or a nicer view. Makes sense. Owners are more willing to invest money to renovate their units and make them nicer, because it helps them improve their overall quality of life – and that’s why owner-occupied units usually sell for more. Whereas investors who rent out units for profit are only concerned about their bottom line.”

    When people buy a condo to live in, they’re paying for different things than investors do – so that really can carry a price premium.

  51. The great crash is hear bears. My PCS account EXPLODED. Over 20 new listings. Ran into a colleague who’s moving to Vancouver soon and I know another guy doing the same. Huge deluge of people moving out of town. Didn’t see a single high end SUV this weekend either. It’s over folks Hawk was right.

  52. I ran the numbers too, and after taking into account the risk of special assessments and opportunity costs, it can make much more financial sense to not rent.

    Agreed, but irrelevant to whether rental restrictions reduce or increase values, which was the point of debate.

    I did NOT misquote. The data clearly shows condos over $500k that were owner-occupied had higher values.

    Yes, but that is not because the buildings have rental restrictions or are non owner-occupied, but because owner occupiers spend more money on a place by about 30-4ok on average.

    Your conclusion from the data was:

    It shows that once you went over a certain price ($500k in Vancouver) and/or size, the owner-occupied units were valued higher, because you’re now talking about people wanting homes, not investments or vacation rentals.

    The data shows that owner occupiers spent more money, not that the homes were valued higher because of owner occupation. Perhaps I misunderstood your point but I read it in light of your assertion that owner occupation in and of itself increases values. It does not. Owner occupiers just buy slightly higher value units – which makes sense.

    As for pet and age restrictions, there is clear data from BC on this that age restrictions reduce value. Not sure on pets but the data from the US found that condos that don’t restrict pets sell for 11.6% more.
    http://communityassociations.net/wp-content/uploads/2013/11/pets_condos.pdf

  53. Vicbot will be proven right in the near future (if not already) on the rental vs owner-occupied debate. The sheer demand from incoming & downsizing boomers will shift any premium towards owner-occupied.

  54. “So people just give away their dogs and cats? Not from my experience.”

    Overall buyers just need to be aware that by-laws can change depending on who’s on strata. So it’s hard to make a blanket statement.

    It also depends on where you’re buying (eg., trendy West End people like dogs, but a retiree North & West Van enclave, not as much)

    I’ve walked into buildings where the wet dog smell is so bad that you almost hurl – I kid you not. (There were also rentals allowed) And this was in a popular area where you got a lot of high-income earners, overseas owners who stayed 2 months a year, and retirees. So the buildings changed pet policies to decrease maintenance costs and maintain long-term value.

    A lot of the pet policies evolve over time due to maintenance issues, and really run the gamut – from “no dogs or cats” to “no dogs,” etc. There are also exceptions where a person might need a pet for health or therapy reasons.

    Ultimately it’s not a clearcut “if this, then that” effect on prices.

    “You can’t misquote a US or Vancouver study for standing for this proposition when this is a) a US study ”

    I did NOT misquote. The data clearly shows condos over $500k that were owner-occupied had higher values.

    “That is the point – it does not. When you buy and you can’t rent out you have zero flexibility if you have to leave for any reason – cash flow negative immediately while you pay for housing elsewhere … ”

    Seriously, this is an individual decision, and it depends way more on special assessments than mortgage payments. I ran the numbers too, and after taking into account the risk of special assessments and opportunity costs, it can make much more financial sense to not rent.

  55. It makes more ROI sense to pay less & invest the rest.

    That is the point – it does not. When you buy and you can’t rent out you have zero flexibility if you have to leave for any reason – cash flow negative immediately while you pay for housing elsewhere.

    Plus you may not have run the numbers – 500 vs. 550 is an additional 10k down but also roughly an additional $3500 per year tax free appreciation on the additional 50k leveraged investment less the $400 lost opportunity cost/year on the extra 10k investment. This is based on historical rates of appreciation and the fact that if you have to move for work or school you can rent and retain the primary residence exemption but even taxed this will still compound and produce a gain.

    And the bottom line is risk protection. If you are not wealthy and buying a condo because you cannot afford a house being able to rent protects you from market volatility and your own vacancy.

    In fact, the data shows that people are willing to pay a premium for condos that are owner-occupied.

    That is incorrect. There is a study of Vancouver exactly on this point:

    We find that forbidding rentals in a building lowers the price owners receive when they sell by between 2.7% and 3.3%. This result is robust and consistent across the different types of statistical analysis conducted. The one exception is that units in strata buildings in the West End of Vancouver, an area with very high numbers of renters and rental buildings, actually receive a premium of 10%. It would not be surprising that, in an area where renters are the dominant tenure, being able to differentiate your product can yield a positive effect on unit values. Excluding the West End from the more general analysis strengthens the negative effect of restrictions on price: to 3.3% to 5.4%.

    The study goes on to find that buildings that permit rentals also sell faster (increased liquidity).

    http://www.aicanada.ca/article/do-restrictions-on-renting-increase-condominium-values/

    You can’t misquote a US or Vancouver study for standing for this proposition when this is a) a US study which specifically excepts a market like Victoria or b) the study you quoted about Vancouver doesn’t actually support what you are saying – it supports the fact that owner-occupiers spend more on their units than non owner-occupiers – the data comes from an analysis as to who claimed the home owners grant.

    Let us not lose track

    Of what? Did you not read what I said? Weird when I have to quote myself.

    Taxing:

    Or institute the tax through Airbnb if the City wants to permit them.

    Prohibiting:

    The fact is that there are already by-laws prohibiting Airbnb rentals less than one month in duration and the City has the power to impose daily expensive fines already.

    If the City wants to stop Airbnb and services like this from operating in areas not zoned for this keep the current bylaw and enact new regulations to fine the service for each listing they accept in areas where such rentals are prohibited as other cities have done.

  56. “3225 Ripon Road $3.4 ($268k under asking and this now available for rent)”

    That’s very interesting. I’m guessing it was an Asian buyer, as it would make absolutely no sense from a yield perspective.

    How much is it renting for?

  57. Finally, Airbnb. I’m not sure why people are proposing that the City use Airbnb as a cash cow by imposing ludicrous fines or taxation except that it appears to be a knee-jerk reaction from individuals talking from their armchairs with little research.

    Let us not lose track that these are businesses not residences. Businesses that are not paying a room or destination tax. Applying a license fee that removes the advantage of a daily rental versus a month to month will help our city reduce the vacancy problem. That’s good for the long term health of the cities economy.

    For years we watched crane after crane build tower after tower in the hope of reducing the lack of affordability in the city. And what we have now found is that a good portion of that construction was for vacation rentals. And builder after builder wanted the units smaller and smaller so that more people could afford to live in our city. City Hall even gave tax breaks to the builders.

    Little of this type of construction has gone to ease our tight vacancy rate or make it more affordable to own a home in the city.

  58. Barrister re stats on houses sold over $2m – I too would love to see this if anyone would be kind enough to provide?

    I asked this question of my realtor as I am attempting to purchase in this price range (‘attempting’ means sellers are not budging on asking price, despite asking prices being $700-$1m over assessed without renos).

    He sent me MLS listings of properties that have sold at over $2m since September 2016. There were 10 sales, the last home was listed as sold on 7 Jan.

    There are five others that I know of (from monitoring realtor websites and MLS) that have sold but were not included on his list :

    762 Victoria $2.5m
    1820 Beach drive $2.35m

    3225 Ripon Road $3.4 ($268k under asking and this now available for rent)

    3185 Ripon Road $2.65 (this sold around August at $1.830, sold again around 4wks later at $2.65m and is on the market again at $3.135)

    3375 Upper Terrace Road (popped up as sold on a website but not sure if on MLS).

    I am very interested to see if the insanely priced $4.5m refurb on Exeter Road sells.

  59. “In fact, many financial institutions judge a condo complex to be risky if more than 25% of the units are rented out and refuse financing to new buyers…”

    Lenders have no idea of the percentage of renters in a condominium building and none have such a regulation or guideline for lending.

    What I’ve experienced as the difference between condominium complexes that have a greater number of renters/investor owners and home occupation owners is the level of maintenance. Most investors do not want to spend any more that the minimum in maintenance and repairs.

    Notably condominium complexes near Quadra and Hillside and near Tillicum and the highway.

    This is also true of some of the complexes in the city core that have age restrictions of 55 and older where the retirees don’t want big repair bills and are more likely to defer maintenance. Hence the value of these properties slump.

    Investor and retirees in these buildings are more likely to vote down these expenditures.

    So when the Vancouver Judge imposed a $16.8 million, last September, to repair a leaky condo that spooked a lot or investors/retirees.

  60. Marko, in that realtor’s experience, pet & BBQ bylaws were the least of the factors affecting decisions.

    So people just give away their dogs and cats? Not from my experience.

  61. “that is why these condos are worth less than those that allow rentals.”

    So far no one has produced data that shows this is the case for Victoria (special transient zoning is a totally different story)

    Also, my point was that even if this is the case, why on earth would an owner-occupier want to pay a premium for a condo with up to 10% rentals. It makes more ROI sense to pay less & invest the rest.

    In fact, the data shows that people are willing to pay a premium for condos that are owner-occupied.

  62. Having considered buying various condos and having owned one too I’d say Marko is correct in Victoria. In some of the smaller towns in BC you may be correct with regard to complexes that are lower end of market.

    I personally would not want to be restricted from renting out because sometimes plans change and ex. all of a sudden you have a dead loss if you want to study abroad for a year or are forced to sell potentially when the market is down. This is fine if you are a high net worth person and can afford this, not so fine for most others and that is why these condos are worth less than those that allow rentals.

    It is also not fine imo to raise the “empty house problem” as if it was all a foreign buyer issue or greedy hoarding and at the same time support owner-occupier restrictions. Many of the empty homes may be condos in restricted buildings with owners who live in them during the winter months as part of an eventual retirement plan. If I was looking to retire in Victoria and saw prices rising I’d be tempted to buy before I was ready to move ft.

    Vicbot the article you cite is for the American market and the author states:

    The exception to this rule may be condo complexes located in popular tourist resort areas or heavily congested, major downtown hubs, with high rental demands.

    Seems like Victoria to me. And the discount for the owner-occupied restriction in Victoria is something I have definitely noticed. And you can see dramatic positive impact on pricing per square foot the short-term rental zoning brings on buildings like the Janion.

    As far as 55 and over goes, I understand it is frustrating for people wanting to buy in but I agree that this discount is not only supported by the reduced market, but also it is a benefit to those in this age group who no longer can earn greater income and are relying on savings to buy. Not all older folks have high incomes or net worth and I appreciate that these buildings provide good value for these individuals and I support this.

    Finally, Airbnb. I’m not sure why people are proposing that the City use Airbnb as a cash cow by imposing ludicrous fines or taxation except that it appears to be a knee-jerk reaction from individuals talking from their armchairs with little research.

    No sound policy would support the measures proposed and there are principles of administrative fairness which would likely result in a very expensive court challenge to a $10,000 first time offender fine which I do not believe the City would win. Not to mention any challenge to a by-law through the courts is going to cost the City 15k plus.

    The fact is that there are already by-laws prohibiting Airbnb rentals less than one month in duration and the City has the power to impose daily expensive fines already. The issue is why there is not widespread enforcement, not ridiculous punitive measures with no demonstration that there were valid complaints or enforcement under the existing bylaw was ineffective. And if you want to legalize and tax the easy way is to collect is through Airbnb which can charge and remit the additional tax, as has been implemented with many cities.

    The reason City by-laws are not enforced all the time is because in Victoria they are generally based on complaints. And to make a complaint you have to show that you are impacted by the infraction and this means you must live close enough to be impacted. People can’t just stroll down the street and look for short term rentals or illegal suites or unpermitted bathroom renos to report because they, what, it makes them feel important?

    Why not, because enforcement costs money and if a by-law violation is not creating a problem for neighbours then the enforcement is generally not worth the cost for the City or the public use of taxpayer money. Yes, it would be your taxes being used to enforce by-laws strictly. This is likely why there is not widespread enforcement of short-term rentals or unpermitted suites or unpermitted interior renovations – no complaint – and where there are complaints by neighbours the City will investigate.

    If the City wants to stop Airbnb and services like this from operating in areas not zoned for this keep the current bylaw and enact new regulations to fine the service for each listing they accept in areas where such rentals are prohibited as other cities have done. Or institute the tax through Airbnb if the City wants to permit them.

  63. @ Marko, thanks for that. The next headline should read “city of Victoria fails to update website with relevant information”….

  64. It can’t be much longer for this massive debt pig.

    Housing market will burst like all bubbles do: Pape

    Gordon Pape writes that between 1989 and 1996, Toronto house prices fell by 40 per cent, adjusted for inflation.

    A “stress test” done by Canada Mortgage and Housing Corporation last fall found that house prices could fall by as much as 30 per cent if mortgage rates were to rise by 2.4 percentage points over two years.

    If you believe that’s scaremongering, let remind you that it has happened before. Between 1989 and 1996, Toronto house prices fell by 40 per cent, adjusted for inflation. It can happen again and probably will. It’s just a matter of time.

    https://www.thestar.com/business/wealth/2017/03/04/housing-market-will-burst-like-all-bubbles-do-pape.html

  65. Marko, in that realtor’s experience, pet & BBQ bylaws were the least of the factors affecting decisions.

    People’s priorities were with building maintenance & meeting minutes. Most people cared more about maintaining the value of the property.

    So the vast majority didn’t care if there was a pet or BBQ policy (and if you’ve ever lived with elevators & hallways that smell like wet dog, then you’ll understand why that never affected Vancouver buyers – the vast majority were no-dogs – and the no-BBQ policy is for safety/insurance reasons)

    That’s how Economics 101 played out there.

    Speaking of Economics 101, though – strangely, if people are being so picky about a no-BBQ policy, it seems like there are too many choices out there – maybe an over-supply of condos now.

    Plenty of news stories about BBQs causing fires – that’s why it affects insurance:
    http://globalnews.ca/news/1421045/massive-blaze-tears-through-fort-mcmurray-condo-building/
    or
    http://bc.ctvnews.ca/balcony-bbq-suspected-source-of-condo-fire-1.420732

  66. Too Many Renters are a Bad Sign in a Condo Complex

    Once again you are not addressing my BYLAW point by throwing in confounding variables. Yes, if you have two unrestricted buildings A and B and one has 10% rentals and one has 50% rentals the one with 10% rentals is more attractive. What I am saying is building B with 50% rentals will have a higher market value, all other things equal, compared to building C which does not allow rentals at all.

    Here’s what my condo realtor said increases condo prices:
    #1 Comparables in same & nearby buildings
    #2 Location location location (eg., quiet but next to transportation like Skytrain or walkable activities)
    #3 The unit must present well – clean, tidy. (best updates are floors & paint; kitchen/bath updates don’t get much ROI in condos)
    #4 Building Maintenance (all buildings have issues so there must be history of strata attending to them promptly)
    #5 Maintenance Fees (not excessive)

    Bylaws are critical….economic 101.

    Pet bylaw? Say goodbye to 30 to 40% of buyers.
    Age bylaw? Say goodbye to another 30% to 40% of buyers (not to mention CMHC won’t underwrite, etc.)
    BBQ bylaw? Yes, I lost an accepted offer this year on a no BBQ bylaw.
    Rental restriction? Same concept as the other three above.

    Probably most people on this blog have taken economics 101….no need to explain how supply and demand work.

    The thing is these bylaws go for the most part one way when it comes to selling….I’ve never had anyone approach me with “I want to buy in a building that doesn’t allow BBQs.”

  67. “What I am saying is if building A has no rentals allowed the average unit will sell for $500,000 and building B with unrestricted rentals will sell for an average of $550,000.”

    Then the net result is zero. No reason at all for an owner-occupier pay a $50k premium when buying. Then they can also use that $50k savings for other things. (there’s no data to support that theory anyway)

    “if SFHs are slow, rental restricted condos are impossible to sell”

    Hogwash. The data shows otherwise, and banks judge it otherwise. (and when I sold, buyers saw it otherwise. Same for other buyers/sellers in mid-90s when SFH were decreasing)

    http://www.marketwatch.com/story/too-many-renters-are-a-bad-sign-in-a-condo-complex-2015-04-27
    Too Many Renters are a Bad Sign in a Condo Complex
    “In fact, many financial institutions judge a condo complex to be risky if more than 25% of the units are rented out and refuse financing to new buyers. As a result, such condo complexes may become desperate. To attract buyers, they may start selling the vacant units at lower prices, adversely affecting the value of the other units within the same complex.”
    “If 25% or more of its units are rented, stay clear of such a complex. It very well may have a dark future.”

    Here’s what my condo realtor said increases condo prices:
    #1 Comparables in same & nearby buildings
    #2 Location location location (eg., quiet but next to transportation like Skytrain or walkable activities)
    #3 The unit must present well – clean, tidy. (best updates are floors & paint; kitchen/bath updates don’t get much ROI in condos)
    #4 Building Maintenance (all buildings have issues so there must be history of strata attending to them promptly)
    #5 Maintenance Fees (not excessive)

    “Most of my clients are non-investors and the majority will not look at rental restricted condos.”

    That’s not the case for the majority of owner-occupiers. It may be true for your clients because you promote the idea of condos for investments, so you attract that type of client.

    “What if you want to go travel for a year or job opportunity overseas, etc.”

    Sorry to be blunt, but that’s a RE sales scare tactic. Most owner-occupiers don’t want to waste time or money moving all their crap into boxes, hauling to a storage facility, increasing insurance premiums, and risk getting their floors, kitchen cabinets, etc marked up (accidents happen even at the best of times)

    If they do this once in their lives in their mid-20s, maybe. But it’s not an on-going concern with owner-occupiers.

    More reading: http://www.givemebackmyfivebucks.com/2013/03/27/would-you-buy-a-condo-that-has-rental-restrictions/

  68. Very nice house and hood in Cordova Bay price slashed $60K from $989K to $929K. 762 Westbury Rd. Things must be getting congested with the increase listings in Saanich East.

  69. Iam getting the impression that anything close to 2 mil and above is just barely selling if at all. Can one of the stats masters tell me if this is true or not?

  70. Those hot areas extend quite far north through Maplewood right to Mckenzie Ave./Swan Lake.

    While everyone has been talking about Fairfield and South Oak Bay, it looks like serious action has been missed in Maplewood.

    I don’t think Maplewood has come up once in all of the discussions.

    It’s an older pleasant middle class Saanich East area that is far from the ocean but fairly close in and nice enough. Not a place that is obviously on the radar though but it should have been. I had friend who lived Ina Brady Bunch home with a lifestyle to match.

  71. That is a very interesting map.

    The areas most prone to overbids/sales over assessment are the less expensive core (absolute as opposed to per square foot) areas east of Blanchard around Quadra/Cook.

    We are talking Oaklands, Fernwood, Uptown, Mayfair, Hillside etc.p

    I had assumed S Oak Bay would be the hottest area but that does not appear to be the case.

  72. Mukluk
    March 4, 2017 at 8:24 pm

    Does anyone happen to know of a “Cheers”-type bar in Victoria where the alcoholic regulars “know your name”? Asking for a friend.

    Hey Mukluk, Christie’s Pub reminds me of “Cheers” and a friend of mine tells me that every time he has gone since 1999 he has seen pretty much all the same folks sitting at the bar. Apparently, they open at 1100 on Sundays.

  73. Side discussion.. @Barrister

    “I am not sure how one establishes if a house has gone for over or under in the first place.”

    My method is pretty loose, and based on the property assessed value. This might help explain:

    https://fusiontables.google.com/data?docid=1SvVWy6ekdz6uuiaoiq29LlzPkNRE5aMDlkaJmsUM#map:id=4

    The map is a rough set of listings from the 650 – 950k PCS feed over the past couple of months. The baseline is the Sold Price vs. the Assessed value with the assumption that the Assessed value is applied fairly equally across all properties.

    Any marker on the map in the Yellow has done well, and purchased close to (or below) assessed value. Markers in the Green are exactly what I expect, where the Sale price is somewhere around 20% – 35% on top of assessed value. Purple Markers are likely bidding wars, and those is the Red are the head shakers.

    Quite loose but useful as a finger in the wind. MOI is a great metric to gauge competition overall, I look to the Sales vs. Assessed to determine a reasonable offer – or to walk away.

    That’s my method, likely flawed, and I’m looking for prices to graduate more to the Yellow rather than the Red. Last year was actually more predictable than this one with this metric – perhaps it’s early days..

    @Introvert

    “Strawberry Value” – typo on my part, that should stick. It’s a gem of an area..

  74. Also there are Canadian & US studies that show that owner-occupied condos sell for more, eg.,

    I am talking about something completely different.

    What I am saying is if building A has no rentals allowed the average unit will sell for $500,000 and building B with unrestricted rentals will sell for an average of $550,000.

    What you are referencing is that in building B an owner-occupier unit will sell for $550,000 and an investor unit will sell for $500,000; however, this is for totally different reasons (owner-occupiers are more likely to carry out upgrades to their unit, etc.).

    Most of my clients are non-investors and the majority will not look at rental restricted condos. There are a ton of reasons why owner-occupiers don’t want to buy in rental restricted condos. For example, when the market slows down/prices drop and you can finally afford your dream SFH you are stuck with an asset you can’t sell (if SFHs are slow, rental restricted condos are impossible to sell); whereas, if you were in a building that allows rentals you could rent out your unit, buy the SFH, and sell the condo at a later date. Even if you can’t afford a SFH home I’ve seen clients rent out their rentable condo and in turn rent a SFH home themselves versus taking a beating on the condo.

    What if you want to go travel for a year or job opportunity overseas, etc.

  75. Does anyone happen to know of a “Cheers”-type bar in Victoria where the alcoholic regulars “know your name”? Asking for a friend.

  76. If you make the fine for an illegal Air BB large enough the city could, at least initially, make some real money from it. First offence, 10,000, double for the next. Hire someone to book a room and then show up. If every third one is illegal, the city would rake in a fortune. After six months the word would get around.

  77. @Marco, Vic website still says rezoning required.
    From the info PDF

    Note to Applicants
    • Submission of a complete rezoning application is required.

  78. Bingo, it you’re a one of those 500 to 900 units that are zoned for vacation rental you would be assessed the tax unless you could show that it is your principle residence or have a long term tenant. In order to be exempt from the tax you would have to submit proof every year.

    And if you operate a vacation rental that is not appropriately zoned then all it takes is one of your neighbors to make a complaint to city hall.

  79. Also there are Canadian & US studies that show that owner-occupied condos sell for more, eg.,

    from Vancouver:
    http://bingthomarchitects.com/app/uploads/2009/12/btaworks_condo_study_report_final2.pdf

    “Median values for owner occupied units were generally valued over $30,000 to $40,000 dollars more than non-owner occupied units. This pattern conforms to the existing American and Canadian academic literature on condominium ownership where owners often state that quality of life is their primary reason for condo ownership whereas investors focused rate of return on investment.3 Owners were more likely to pay more for their units than investors while investors would wish to minimize the amount of capital they would need to invest for a rental unit.”

    It shows that once you went over a certain price ($500k in Vancouver) and/or size, the owner-occupied units were valued higher, because you’re now talking about people wanting homes, not investments or vacation rentals.

    There are 3 other studies on page 9 that they cite as well.

  80. Did six open houses today and did not really see a whole lot of buyers. Seems a lot less busy than it was this time last year. Could be my imagination but I focused on houses that have just come on the market.

  81. jj:

    Bingo, those are just details that have to be worked out.

    Pesky details. Of course the details involve knowing who is doing short term rentals.. again not an easy task because it isn’t just “available on the internet”. It’s the same problem.

    I don’t think any jurisdiction has compelled Airbnb or any of the other short term rental services to share their detailed data.

    I would of course start with the assumption that you would fill out the declaration honestly.

    Just like servers and bartenders declare their tips and contractors declare work for cash? Tax evasion is pretty serious yet plenty do it.

    If you have a building of 100 and you have 100 claims of exemption, how do you know if any are false? You pay someone to trawl through airbnb and all the similar services and find pics that look like they could be from the building? Then you end up with something like 10 units that may be in the building (some may not be and some were probably missed). Then what.. you book them all to see which are liars?

    Point is council isn’t sandbagging. It’s not something trivial to solve.

  82. Barrister

    Personally if I was ever to buy a condo I would look for a building were any type of rental was prohibited.

    I’m with you.

    We owned a condo and it allowed 2 rentals max out of about 50 units. Guess where nearly all the problems came from.

    For whatever reason owners seemed to be more considerate of how their actions affected their neighbours and other owners. I can’t remember any owner breaking a bylaw or rule. Only issue I can remember is older owners not paying strata on time.

  83. Marko, I was living in Vancouver at the time, and there was a live in caretaker and a new security system. The caretaker couldn’t control building security 24 hours a day and watch the movers.

    The majority of owners voted to eliminate rentals for good reasons, and it’s why many other buildings continue to do so. These people have very valid safety and wear and tear concerns. In many buildings the caretakers dont communicate with renters or owners about their monthly rentals, or control deposits – that is mostly between the owner and renter. If any other owners had concerns about damage, they had to write to strata.

    The realtor that lived in the building also voted to restrict rentals and he eventually represented other sellers when he moved into a house.

    We could use the argument of increasing prices either way – all condos have gone up in value including ones that are rented.

    If you live in a building that’s more set up with a concierge and/or for transient accommodation, it’s probably different.

  84. and Vicbot if you are referring to Shutters that building had a long list of complicated issues that needed to be addressed. Prices dropped further after the bylaw change and only recovered with the market.

  85. @Markos (hehe) totally agree. The garden suite is a non starter. Can’t just buy a modern shed and follow some rules and have a garden suite done economically. You have to still apply for a rezoning AND hire a GC. So drawings and town meetings and surveys and more meetings and engineering and whatever else…. My HPO registration was just over 6k. Just to get to build the suite will probably cost 15k minimum. Way to arduous and costly. Don’t expect a flood of them to be built creating any relief on rental stock. I can only see luxury ones being built.

    The City of Victoria took away the re-zoning requirement three months ago to encourage garden suites, but what is the point when the building department has added the HPO requirement for the building permit. End result, you won’t see any garden suites and the City will continue to spend endless resources on trying to rezone Airbnb. As I said, how about just approve a few apartment developments and give home owners a REALISTIC process to build a garden suite.

  86. The biggest issues were the side effects of rentals and the mishandling of rentals by absentee investors. Entrance doors left open for movers every month because of the frequency of renters leaving, then strangers walking in and breaking into people’s suites and storage lockers. Plants and furniture and workout eqt stolen when renters moved out because there was no accountability to the strata. Damage to carpets, walls, elevators (from frequent movers with dolleys and furniture) sports eqt, pool, hot tub area. The list goes on and on.

    Having been on many strata councils I don’t agree. At the 834 we had a lot of break-ins in the first year and they were all related to crappy developer installed security/locks/etc. Once we spent $2,000 beefing everything up the problems went away.

    At the Bayview when I rented you paid a $200 deposit for a move-in, the building caretaker would inspect the hallway prior to move in and inspect it after. If there was no damage you would get your deposit back and if there was damage they would use the funds to repaint the hallway. There was also a $100 non-refundable move in fee as well in addition.

    The biggest difference that I’ve noted between buildings once they get over 60-70 units is whether they have a live-in caretaker or not. A live-in caretaker is great for move-ins/move-outs and managing security.

    The issues went away when the building was changed to owner only. So there was an abrupt documented change to the positive.

    There was actually on impact on resales – our sold prices went up.

    Argument I hear at every annual general meeting…..but it isn’t true. CMHC has done studies on this that clearly show the opposite.

    Your prices may have gone up related to the market, certainly not to the bylaw restriction.

    In 7 years of real estate I’ve never had a client request a preference towards rental restricted condos; however, it has been 50+ clients that have requested when I set them up on the PCS account that is immediately excludes buildings with rental restrictions.

    Just look at the square footage prices at some places like 160 Wilson……completely lags the market secondary to no rentals.

  87. “Can’t just buy a modern shed and follow some rules and have a garden suite done economically.”

    Possibly naive question: If you wanted to create a studio/office in your backyard, can you buy a modern shed (Costco sells pretty nice ones, for instance) and install it without going through a permitting process? I’d want it to have electricity but not plumbing.

  88. 100% agree they should not down zone existing buildings. Too far. Simply enforce existing laws. Or open the zoning up but tax it.

  89. @Markos (hehe) totally agree. The garden suite is a non starter. Can’t just buy a modern shed and follow some rules and have a garden suite done economically. You have to still apply for a rezoning AND hire a GC. So drawings and town meetings and surveys and more meetings and engineering and whatever else…. My HPO registration was just over 6k. Just to get to build the suite will probably cost 15k minimum. Way to arduous and costly. Don’t expect a flood of them to be built creating any relief on rental stock. I can only see luxury ones being built.

  90. I lived in a condo for many years and in fact the owners who lived there DID take care of it better than renters. That’s why the building voted to disallow rentals.

    The biggest issues were the side effects of rentals and the mishandling of rentals by absentee investors. Entrance doors left open for movers every month because of the frequency of renters leaving, then strangers walking in and breaking into people’s suites and storage lockers. Plants and furniture and workout eqt stolen when renters moved out because there was no accountability to the strata. Damage to carpets, walls, elevators (from frequent movers with dolleys and furniture) sports eqt, pool, hot tub area. The list goes on and on.

    The issues went away when the building was changed to owner only. So there was an abrupt documented change to the positive.

    There was actually on impact on resales – our sold prices went up.

  91. Just want to make it clear that if a building is not zoned for short rentals I am in support of Airbnb beings immediately shut down by city/strata council.

    What I am not in support of is the city going after the 24 buildings in Victoria that are ALREADY ZONED for short term.

    Just deny short term to developments going forward. How complicated can it be? The 24 buildings will become a smaller and smaller percentage of housing inventory as time moves forward. Not to mention there would be a ton of law suits flying around if this happened. For what, a couple of hundred units that people will switch to executive rentals (2-3 months)…….how about the council just approves one development that has 200 units instead. Problem solved.

  92. Also remember you have a conflict of interest – you were quite honest about how you encouraged people to vote in your condo building’s strata meeting to prevent the majority of owners to disallow AirBnB. The pro-AirBnB minority narrowly won (because it takes more than 75% to change a rule). They had legitimate reasons including building security with so many strangers walking in and out, and additional noise.

    If you read the minutes from the special general meeting you’ll notice I stood up and posed a question to the strata council of “how many complaints has the strata received pertaining to Airbnb….” and after a long pause one of the council members said “very few,” and did not provide a specific number.

    And it was way more complicated than what you note above. The building was NOT ZONED for vacation rentals and the strata wanted to self-enforce by introducing a bylaw instead of calling the city bylaw officer. My argument was we are not zoned vacation rental so let’s work with the city in shutting them down versus spending money re-writing bylaws and self-enforcement.

    Rental restrictions are fine and dandy until you go sell and the identical unit in the building next door without rental restrictions is selling for $50 to $70k more.

    People are funny….you get all these argument of “but it is our home,” and then when people go sell everyone wants top dollar.

  93. Marko:

    You might well be right about the condos. I was just stating a personal opinion but very little weight should be given to it since I suspect I will never move out of the house.

    Do you know what 617 St. Charles sold for? it seems to be a mystery in spite of there being a sold sign on it.

  94. Personally if I was ever to buy a condo I would look for a building were any type of rental was prohibited. Owners treat a building differently than tenants. On top of that the idea of AirB&B’s having god knows who coming and going is totally not appealing.

    As an owner of 5 condos, having lived in condos, and having served on strata councils including buildings that allow vacation rentals (the Era) this is the biggest misleading non-sense going around.

    Does anyone notice how people still reference the “Calgary house” when Airbnb comes up? The house that got trashed 5 years ago, guaranteed there is someone burning down a hotel room right now and a tenant stuffing the toilet full of crap ahead of showings so the place doesn’t sell.

    At the Era, I kid you not, in 16 months I was on council we received ONE complaint about Airbnb and that was the someone did not like the look of electronic code front door hardware on an Airbnb unit.

    How many complaints did we receive from owner-occupiers illegally smoking (non-smoking building) and throwing their cigarette butts onto units below? How many complaints did we receive pertaining to excessive noise coming from long term tenanted properties?

    I would never ever short-term rental my condos. My requirements is one year minimum lease. I just don’t think short-term rentals make any sense when you factor in your time at a reasonable rate. That being said the arguments against short-term are not supported by facts.

    And don’t get me started on the owners treat a building differently…..I’ve heard this argument a million times at strata meetings. Tenants are not second class citizens. I rented at the Bayview for almost three years and left the unit is I found it 3 years earlier.

    and finally, if you want to knock 12% of the market value of your condo, sure prohibit rentals.

    I stayed at Airbnb’s when travelling around Europe this past summer….don’t remember trashing any of them.

    Problem is you have all these groups with invested groups that make crap up like lawyers who re-write bylaws, for a fee. I’ve seen presentations by lawyers arguing the rentals are bad for the building etc……..completely ignoring the 12% re-sale value factor.

  95. Highest SFH listings in East Saanich at 72, was down to 40 a month ago. That’s an 80% increase. Someone thinks the time is right to take the money and run.

  96. Personally if I was ever to buy a condo I would look for a building were any type of rental was prohibited. Owners treat a building differently than tenants. On top of that the idea of AirB&B’s having god knows who coming and going is totally not appealing.

  97. Marko, allowing more condos to be rented won’t stop the housing crisis because it’ll just encourage more investors to buy condos to rent, taking supply away from people who want to buy. Exactly like what happened in Vancouver.

    Also remember you have a conflict of interest – you were quite honest about how you encouraged people to vote in your condo building’s strata meeting to prevent the majority of owners to disallow AirBnB. The pro-AirBnB minority narrowly won (because it takes more than 75% to change a rule). They had legitimate reasons including building security with so many strangers walking in and out, and additional noise.

  98. Leo :

    Penny Farthing is a great idea; I am in. Their Shepherd’s pie is particularly good by the way. I am told that it is made with real German Shepard. Seriously it is a great place for a get together and there is lots of parking in the evening at the Library parking lot across the street.

  99. Re AirBnb 4 of the 9 councillors are not participating due to conflict of interest….the mayor runs a hotel, one lives in an apartment building where there is an AirBnb operation etc.

    Why do we try to solve the root cause of too much governement regulation and taxes with more regulation and taxes. Home owner builds require exams, really! Permits, property transfer tax, near impossible to rezone, rent controls, etc etc. no wonder we have an under supply of houses. That is the true root cause, but we insist on more regulation and taxes thinking that will solve a problem, but it is the cause of the problem. Maybe it should cost more for a home to live in the most beautiful place in Canada.

    Why do people not understand this? Airbnb is thrown as a smoke screen and everyone ignores the 100s of other issues causing the problems. Why is no one touching the subject of the vast majority of condos in Oak Bay and Fairfield not being rentable as per strata bylaws?

    I emailed the city last week to see if the owner-builder authorization would be required for a 400 sq/ft garden suite and here is the reply

    “Hi Markos,

    Yes we would require that for a new garden suite. It does not necessarily have to come in at the time of application, but the permit would not be issued until it is received.

    Thanks,”

    Who on earth is now going to build a garden suite when they can only do so by hiring a builder or writing an exam that is extremely difficult to pass where you have to know the code book.

    I could go on and on…..the provincial government and the municipality say one thing, “we want affordable housing,” but put in policies that are totally against affordable housing and somehow the public can’t figure it out.

    I was saying 4-5 years ago on the blog that bureaucracy was driving up the cost of new home construction big time and in the last few years it has gotten so much worse.

  100. The only reason the market exists is because of government interference.

    Although you could just switch “government interference” to “people”, as of course governments are chosen by the people.

    Even if gov’ts temporarily go against the will of the people, I don’t find they can alter markets for long.

    There are alot of misconceptions on here lately as to what’s driving our market. As always, people resort to blaming anything and everything, instead of simply taking the time & thought to figure out where the supply & demand are going to be coming from.

  101. Is it time to suggest another HHV meetup?

    Yes keep meaning to do that. Will put up a post about it this weekend. I was thinking a weekday evening at the penny farthing since everyone is so obsessed about Oak Bay..

  102. House Hunting:

    I am not sure how one establishes if a house has gone for over or under in the first place. Certainly one cannot use the listing price as a measure of very much since there is a pretty common practice of listing low in an attempt to get multiply offers. At the same time there are a number of houses that are listed way above any rational number (even in this market).

    It is possible that out of town buyers might be bidding higher than locals for a variety of reasons including deeper pockets.

    I completely agree with you that Victoria can be a bit difficult to get a handle on at first. But often the choices are pretty well narrowed by your price point. I rented a condo while I was house hunting and had the luxury of time to spend cruising the neighbourhoods to get a feel for the city. I wish I had known about this website since it would have provided me with a great resource of opinions about the different neighbourhoods. I will be the first to admit that it was a lot easier for me since I started my hunt about four years ago and ended not buying till late 2013. Lots of inventory, and lots of deals to be had (mind you, that’s looking at it in hindsight).

    Frankly, when we finally did buy I was still worried that I might have overpaid. I remember telling my wife that there was a good chance that we would never be able to get our money out of the house if we decided to resell. But we both loved the house itself (more so with each passing year) so we went ahead. I finally justified it by calculating that I was paying $206 a sq. ft. for a house that would cost upwards of $600 a square foot to replace. My wife had a much simpler and more rational approach to it. For her the house totally felt like home.

  103. Why do we try to solve the root cause of too much governement regulation and taxes with more regulation and taxes. Home owner builds require exams, really! Permits, property transfer tax, near impossible to rezone, rent controls, etc etc. no wonder we have an under supply of houses. That is the true root cause, but we insist on more regulation and taxes thinking that will solve a problem, but it is the cause of the problem. Maybe it should cost more for a home to live in the most beautiful place in Canada.

  104. Is it time to suggest another HHV meetup? Tensions seem pretty tight.

    From this corner I’m trying to make sense of the PCS listings and sales. Here’s a random thought, there’s a weird oversell on some properties, and some others going below, which I think John Dollar was alluding to earlier. My current thought on this is that the oversells are going to newcomers to the city, and it’s quite possible that well may be drying up. The undersells are going to locals who just know better.

    As a relative newcomer to Victoria, I can say that it’s a very difficult city to get a bead on. Victoria has the well founded Oak-Bay, Rockland, Fairfield, Oaklands, James Bay, Gorden Head areas that are the prime targets for Real Estate. These are all well established neighbourhoods, with varying degrees of quality and price points and which are the prime magnets for any new comers to Victoria.

    Stretching out a bit there’s Prospect Lake, Cordova Bay, Sannichtown, Strawberry Value, and the Highlands, which all offer good/equal/better housing opportunities for a lesser price point. Anyone new to Victoria would not be familiar at all with these areas and it would be off the radar as far as house purchasing goes.

    And not to forget Broadmead, View Royal, Cadboro Bay which I think are all medium hot right now, and going to get hotter as the core areas become out of reach.

    That’s my random thought for a Friday.

  105. Nobody including apple would have the necessary balance sheet to be in this business.

    So we agree, this is not even remotely a free market. The only reason the market exists is because of government interference.

    As for CMHC making a profit, maybe the Feds should also get into making iPhones? They’d probably make a profit there too. After all if it makes a profit it must be good policy

  106. Why is Mayor Lisa and the Alfalfa counsel dragging their feet on this issue? Potentially millions of dollars in additional taxes for the city. These vacation rentals are businesses, not rentals and not housing for Victorians. They cause rents to be higher for locals, increase the cost of buying, and reduce the vacancy rate in the city. 500 to 900 units in 18 to 20 buildings at an average tax of $7,000 a piece that’s 3.5 to 6.3 million dollars in tax dollars.

    Victorian’s should be pissed off.

    Think of that when we get our property tax notices in the mail this year.

  107. If you don’t the fine should be at least 10 times the amount, and or jail time for commit tax fraud.

  108. Bingo, those are just details that have to be worked out.

    I would of course start with the assumption that you would fill out the declaration honestly. And if you don’t then the tax could be doubled.

    Of course there are many ways to skin a cat. I’ll let the city’s legal department work out the details.

  109. The city no longer has to prove you are using the property as a vacation rental – you have to prove that you are not.

    How? By signing a piece of paper that says you weren’t?

    By showing you didn’t declare any rental income for that property to the CRA?

  110. Isn’t the 11 percent room tax a Provincial Tax.. While the 2 percent destination tax is a municipal tax?

    It may just be easier to restrict vacation rentals to transient zoned properties and fine those that do not comply. Then assess all condos zoned transient a 2 percent tax based on their assessed value. If you want a rebate of the 2 percent tax then you will have to show the suite was owner occupied or rented on a month to month basis. The city no longer has to prove you are using the property as a vacation rental – you have to prove that you are not.

  111. “As a public mortgage insurer, CMHC has a mandate to provide service in all parts of the country and for a range of housing forms. A significant portion of CMHC’s mortgage loan insurance business is in markets or for housing options that are not served or less served by private mortgage insurers.”

    So CMHC has a mandate to go where private insurers will not. How is that not intervening in the so-called free market?

    The very fact that federal law mandates mortgage insurance on mortgages with less than 20% down should rattle you to your free market core.

  112. TallGuy

    Their addresses are on the internet..

    Airbnb doesn’t list addresses. It gives you a general area. You don’t get the address until you’ve booked.

    Houses are pretty easy to tell from the pics (can use street view). It’s just a bit labour intensive. Figuring out a unit in a building would be pretty tough (without booking).

  113. Friday round up for houses in the Saanich East, Victoria and Oak Bay areas. 49 new listing to 25 sales.

    That’s 2 new listings for every 1 house that sold in the last 7 days in these 3 areas.

    For the overall market including all types and all areas it has been 294:189 or 1.6 new listings for every home that sold.

    Now who would have guessed that would have happened – well I did.

  114. But city staff caution that effecting meaningful change will be a complex process, with enforcement both difficult and costly to undertake.

    Make a business license mandatory and charge the hotel tax. Boom. Their addresses are on the internet, stop acting like it would be so hard to do. Stop pussy-footing around.

    Democracy is such a joke. Politicians are so obsessed with being re-elected that they won’t make any policy for the greater good that will offend their selective voters.

  115. “Genworth is the private competition. There is no subsidizing going on.

    Please, what is a 90% government backing if not subsidy? If this was a free market they wouldn’t need 90% government backing to compete.”

    Exactly, and house prices would be much cheaper as banks would have stopped lending out stupid money years ago. I went to a bank with 10% down on my first house and a fulltime job and had no problems being approved. Now the banks want insurance to keep their ponzi scheme alive. It’s one big bomb about to blow.

  116. Why. I do not care. Up down sideways why should I give a shit anymore.

    A good, safe MO. I have tried to aggressively apply this principle to my life. “Who cares? The earth will still orbit the sun merrily tomorrow…”

    Seems to work well, but for some real estate compels me to write on here anyways – like it will somehow make a difference. It won’t, yet I write. Neurotic…

  117. CMHC is mandated to operate its insurance business on a commercial basis, such that premiums and fees collected over time cover related claims and other expenses and provide for a reasonable rate of return to the Government of Canada, thus ensuring a level playing field with private sector insurance providers. This approach was also meant to ensure that the federal government would not have to bail out CMHC, as has happened in the past. CMHC’s mortgage insurance activity must be conducted at no cost to Canadian taxpayers.

    Like all insurance companies, CMHC takes risks that inevitably result in the payment of claims. For the purposes of sound management, therefore, it must set aside a provision for claims relating to MIF activities. CMHC is also regulated by OSFI, which develops capitalization guidelines(11) and ensures that there is enough capital to cover the claims to which policy holders are entitled.

  118. It is a free market in my definition because any company that meets the requirement can get in the insurance game and get the use of the government backing. They all play under the same rules. Banks are not forced to use the chhc. They can use genworth.

    Government does give anyone cash and actually collects a dividend from the CMHC.

    CMHC does not have an unfair advantage over Genworth.

  119. Not ignoring I am just done. Been 8 years fighting this bearish talk and today I came to the realization. Why. I do not care. Up down sideways why should I give a shit anymore.

    Makes a lot of sense.

  120. @gwac. no one said it wasn’t valuable (that’s a different debate). People are trying to tell you that it isn’t free market. If you believe in the “free market” then you should really hate orgs like them, regardless of value.

  121. Leo

    Nobody including apple would have the necessary balance sheet to be in this business. Neither company has gotten cash from the Government.

    Not sure what the point of this is. If people want CHMC and Genworth gone than write Trudeau. I find it ludicrous that anyone finds what Genworth and CMHC does not valuable. Millions or people got homes because of their existence.

  122. Genworth is the private competition. There is no subsidizing going on.

    Please, what is a 90% government backing if not subsidy? If this was a free market they wouldn’t need 90% government backing to compete.

  123. “@gwac.
    5 year Canadian bond yields were .59 in September.
    They’re 1.168 today.
    Totally stable. They’ve only doubled”

    James, common sense and fact checking gets thrown out with the irrational exuberance at market tops.

  124. “@gwac, why use Toronto 416 as a comparable to all of Victoria?”

    Because he has nothing else James. Toronto is a massive bubble about to implode which will only reverberate across the Rockies as the credit system goes for a complete dump.

  125. James

    Not ignoring I am just done. Been 8 years fighting this bearish talk and today I came to the realization. Why. I do not care. Up down sideways why should I give a shit anymore.

  126. Mike, your Olympic boost was a one year deal then floated back and forth within $100K for 4 years. The big move was mass Asian money which has been shut down to a trickle. As Ross Kay said, $340 Billion in BC net worth just went poof. Victoria’s turn is coming.

  127. gwac,

    Canadian long-term mortgage rates tend to track the yield on the 10-year U.S. Treasury note.

    Sources: here and here

    Doesn’t mean it will necessarily happen. Nothing seems to be going as expected.

    I don’t understand why the CAD is holding on so well. It finally dropped a bit this past week.

    If Trump gets his tax Poloz might be forced to drop rates in hopes of tanking the CAD to offset the tax. I think he’s hoping the fed increasing rates will do the work for him.

  128. @gwac.
    5 year Canadian bond yields were .59 in September.
    They’re 1.168 today.
    Totally stable. They’ve only doubled.
    Can you guess which direction they’re heading in the next two years.

    Michael you’ve shown us your one 80s data point 15 times now. It made no sense before, and it makes no sense now.

  129. Toronto 416 area detached 1.6m
    Victoria 785K

    I’ll say Toronto peaks within the next two years, so be prepared for a wave of
    Onta-retirians in a couple years similar to the early 90s. Recall how Toronto fell up to 50% in the early 90s as Victoria kept rising.

    Here’s my updated of approximately where we are in the cycle (using Van). I still find it comical how the olympic boost seemed to confuse alot of people.

  130. “Just for kicks, imagine all the people who thought prices here would fall in the 1960s and 70s as mortgage rates soared while they reluctantly watched prices go from under 10k to well over 100k!”

    Debt loads well under 1980 level 66% pumper Mike. Rising rates now will blow this into one pile of ugliness with all these property kings who will be sucking for air when the rents won’t cover the mortgage.

    Ever heard of the word divergence Mike ?

  131. Hawk

    You win. I am done here.

    Enjoy…..I agree house prices are going to zero. Interest rates are going to 1000%. The zombies are coming and whatever else you believe.

  132. An inordinate amount of attention is given on this blog for properties that sell over asking price. But last month almost 40 percent of houses in the core sold at or below asking price.

    Even in the slowest markets some homes will sell over asking price. Sometimes the agent just “F”s up in setting the list price. Other times the agent has to reduce the asking price because he over estimated the property’s value or bought the listing with a high list price. So let’s assume a 5% buffer.

    Then about 47% of the sales last month sold over 5% of asking price.
    25% sold for more than 10%
    8.5% sold for more than 15%
    3.6% sold for more than 20%
    1.4% sold for more than 25% over asking price

    And almost 100% of the properties that sold 15% and more over asking price were auctions/delayed offers. No one wins in these kind of auctions. Especially the person that has their offer accepted. And it’s the same real estate agencies over and over again that are doing these auctions.

    This is an absolute bullshit practice that preys on the consumer. It’s bad for the industry and would be considered unprofessional conduct in other businesses. We even have a law that protects buyers of products from “bait and switch” but not for what most people would consider the most expensive purchase of their lives.

    Shame on the Real Estate Council of BC

  133. Bingo

    Bond rates in Canada are based on our shitty economy, No guarantee that our economy is going anywhere especially with that US border tax idea.

  134. Re: interest rates rising

    Just for kicks, imagine all the people who thought prices here would fall in the 1960s and 70s as mortgage rates soared while they reluctantly watched prices go from under 10k to well over 100k!

    I like how Mukluk put it:
    “Rates don’t lead the economy, they follow it.”

  135. Most mortgages are long term gwac, especially any CMHC buyers. Those rates will go up for the second time in 3 months with more to come. Look out below.

  136. gwac

    If you are talking about the fed that is not Canada.

    Fixed rates are based off the bond market. They’ll go up.

    Of course rates will still be below the qualifying rate for high ratio mortgages.. so I don’t seem them affecting anything anytime soon. So what if rates go up a bit. Still have to qualify at 4.64%.

    BoC will face more an more pressure to increase our overnight rate as the fed increases (which affects our variable mortgages). Of course so far Poloz is talking about holding until 2018.

  137. “Anyone who thinks Victoria cannot get crazier may be in for a rude shock.”

    You mean when the bank turns down your mortgage application because it’s so far off assessment they want you to pony up 40 to 50% ? You forgot what happened in 90 to 94 condos and other bubbles as they see them popping gwac, the banks stop lending to desperate idiots who think it’s a good deal.

  138. “Right now the economy and interest rates are stable.”

    Yellen says interest rates will be going up again this month. Canadian long term rates and stress levels will move in tandem. Not much longer for this FOMO insanity. 2 or 3 more to come this year. Banks will be tightening lending even further.

  139. I keep hearing interest rates are stable.
    They’re likely going up again in about 12 days.

  140. Luke

    It’s killed the mainstream market there, for now, but not for developers who are able to offer incentives to get around this.

    Just like the Vancouver developers that sidestepped the minimum down payment rules? I don’t even see how that is doable. How is a “discount” of 5% a down payment? Isn’t the point that you have enough capital to support the purchase?

    I mean, I guess if CMHC and the banks agree you have 5% equity at the purchase price.. then it’s arguably equivalent (from an accounting perspective). Still doesn’t seem to fit the spirit of requiring buyers to have 5% down.

  141. Leo

    Genworth is the private competition. There is no subsidizing going on. Government does not give CMHC money. The opposite happens. The governments balance sheet is there as a back up which is what leads to the profits that are given to the government.

    BTW CMHC does not insure above 1m purchase price.

  142. VicRenter

    you’d have to be naive/clueless right now to think that good houses are going for (often artificially low) asking prices

    Pretty common occurrence especially if they are first time or new to the market. Just ask Marko or any other realtor. Not everyone desperately follows the market and posts comments on a local realty blog multiple times per day ;).

    I’ve heard some crazy stories. Stuff like a buyer being so butthurt they insisted on countering a counter offer with a bid lower than their first bid since they didn’t like that their first offer wasn’t accepted. “How dare you counter me! I’ll show you! I’m offering less!”

    Completely childish. Someone else bid more than you so either walk away or make your offer more appealing. You’re lucky you had a chance to bring your bid up, they didn’t have to counter.

    Seems it takes losing out on a few houses to get a grasp of reality. “No, a bid of 20K below ask has zero chance of being accepted, doubly so with conditions. Your sappy cover letter is not going to help.” doesn’t work with a lot of clients from what I’ve heard. You have to do a very polite warning that they will most likely not get the house and write the pointless offer. You just hope a few offers down the road they catch on.

  143. Needs a catalyst and that is usually the economy.

    Usually, but not necessarily – Vancouver may be a case in point. While it may be too early IMO to be definitive about where Van is going next, at some point capital/debt exhaustion is enough to break it down.

  144. Local

    I lived through the Toronto crash in 90-94. Condos went down 50%. Not sure about houses. The higher they go they uglier it gets. Needs a catalyst and that is usually the economy. Right now the economy and interest rates are stable. Not sure if there is a catalyst soon. Could be an NDP government
    that kills the BC economy.

  145. gwac – totally agree. All the chatter about Victor St. going for 3/4 mill and that was ‘crazy’, etc. It’s sad, but I actually think you are spot on – some of the locals who have been here for a long time and have not travelled much have no idea what they’re in for. If they think this is crazy (and it is), it can get waaay crazier! (just look at Toronto and Vancouver and other global western cities). Sure, Vancouver’s correcting now – but certainly not a crash, and it’s nowhere near affordable or Victoria’s levels.

    As a caveat on Vancouver’s market – my brother lives in Hong Kong and as well as being a pilot for Cathay Pacific he runs a company in real estate there. He has shared interesting insights and parallels that seem to occur between YVR and HK. He says when HK first implemented their 15% tax on foreigners (mostly mainland Chinese)- things cooled for about a year, then took off again, so in late 2016 HK had to double it to 30% and even implemented a 15% tax on locals (first time buyers exempt). It’s killed the mainstream market there, for now, but not for developers who are able to offer incentives to get around this. Like Vancouver, (and now Victoria) they are also way off line from incomes meeting the cost of housing. Just saying, Vancouver could again resume the upward trend once the 15% tax is digested – especially if the CDN dollar falls more (which it may very likely do this year). And Victoria could well keep rising even further from these ‘crazy’ levels.

    Well that’s enough from me for today…

  146. Hawk CMHC has made billions for the federal gov in the past 30 years. They offer a service that competes with a non government agency and make money. That is free market.

    Funny. Nothing about the CMHC is free market. Neither are their competitors private in more than name. Taxpayers guarantee 90% of them too.
    Just because a government agency makes a profit doesn’t make it free market. If CMHC was not subsidizing the market we would have private competition.

  147. Anyone who thinks Victoria cannot get crazier may be in for a rude shock.

    Agreed. I won’t be surprised either way, actually. I don’t think the fundamentals support further gains, but psychology has a funny way of casting that aside…for a while anyways. Of course, we’re seeing this in spades in a few of our metro regions. However, I don’t think Victoria will pull a Van or Tor.

    It’s the aftermath of all of this that concerns me more than anything.

  148. Forgot to include 2 other major buyer groups in Victoria: gov’t workers, and UVic Canadian/international students and faculty, and all the support systems required for that. (UVic’s combo of depth/breadth of programs + small town safety + weather)

  149. Halibut – I live just on the other side of the ‘tweed curtain’ from Trent St., and I can tell you that’s a total crap box. It’s got a flat roof, stucco, everything’s old and dated… ugh!

    The helipad is right there across the street as well – though it’s not all that busy – that’s a bit close for most people’s comfort. In addition, that area is very flat and damp with a very high water table (same as Fair St. that went for $1.6m though).

    https://www.realtor.ca/Residential/Single-Family/17746214/2421-Trent-St-Victoria-British-Columbia-V8R4Z4

    VicBot – not everyone’s going to like everything about Victoria, of course. Lacking in Business or Science… ok, interesting (but with the web does that really matter?). I still hear people in my demographic saying it’s too sleepy, but I don’t think so. Definitely the weather is the huge positive as nowhere else in Canada comes close to compare (Vancouver, for ex. has 3x more rain). Other great beaches are Island View and Cormorant point.

  150. LF

    Do not disagree. My only point is at one time Victoria average prices were the same as Toronto a decade ago. Anyone who thinks Victoria cannot get crazier may be in for a rude shock.

  151. “But no one could come up with any concrete examples of any other Canadian city they thought was better.”

    Great suggestions Luke on the beaches and thanks for the tip on Hollydene. I also like Cadboro & Willows.

    In all fairness, though, I think your question was really about the weather, better phrased as, “can anyone think of a better city than Victoria for outdoor pursuits, gardening, etc?”

    There are millions of people who don’t care about the weather, who love business, science, or other pursuits that stimulate their minds – and some can only do it in other cities – and so would consider Victoria a icy Arctic wasteland mind-wise where they can’t do what they want.

    But if we focus on the main idea – weather – then that definitely explains some of the interest in Victoria in sub-segments of the population: retirees, investors, vacationers, people who can work remotely but need easy access to Vancouver, and all the support workers for those people, then we can better define which buyers are competing with each other & for what prices.

  152. http://www.timescolonist.com/news/local/houses-for-sale-faked-as-rentals-in-scam-1.10749115
    http://www.timescolonist.com/news/local/1-million-scammed-in-email-breach-1.10749119

    A couple of news articles that caught my eye yesterday – scary out there!

    Yes, one has to feel for the woman who lost the house because she had a condition in (gasp – how dare she?) But, in a market like this with such stiff competition for few houses the only way anyone is getting a house that’s any good is with no conditions – and well over asking price. Sad but true. If the couple wasn’t aware of how the market is behaving these days they didn’t have a very insightful realtor either.

    As for Hawk – no I’m not a 911 operator who works graveyards either – I was encouraging you to think outside of your box (so hard for you, I know).

  153. Hawk

    CMHC and Genworth offer a service and collect a fee. CHHC made 1.4 billion in 2015 and similar profits the past 6 years. Every once and awhile they need to eat mortgages in down cycles. That is their business. It is a profit driven business to support homeowners. It seems to be working quite well, hence there is a private company involved.

    Free market. Business earn and lose money in up and down cycles.

  154. gwac, they took $114 Billion in shit mortgages from the banks last crisis, what’s going to happen next time ? That’s not a free market, it’s a taxpayer backed high risk crap shoot.

    Why do you think they want the banks to have more skin in the game and the banks are resisting ? Because the bubble popping is near. Every bank CEO has said so.

  155. Lets put things in perspective.

    Isn’t that a bit like saying..compare Toronto to Hong Kong, ergo Toronto is reasonable?

    785K for a run of the mill home, IMHO is ridiculous – 1.6 is just far further down that line.

  156. VicRenter:

    I probably missed the post, but have you bought or just given up? Hope that you did finally get what you want.

  157. Hawk CMHC has made billions for the federal gov in the past 30 years. They offer a service that competes with a non government agency and make money. That is free market.

  158. I really feel for the couple who wrote in to the TC (I really do), but if they put in an offer at asking price in this market and expected to get the house then they obviously don’t know the market. I’m not saying that things aren’t messed up and nutty out there – they are – but you’d have to be naive/clueless right now to think that good houses are going for (often artificially low) asking prices. Maybe that was the very first house they’d bid on and they got their first shock? That certainly happened to me last year.

    All is great with me on the housing front. Thanks for all of the enthusiasm and well wishes here!

  159. “Hawk

    I believe in free market.”

    Then why should CMHC juice the market on taxpayers dime and risk ? This whole market is based on billions of tax money or your free market would never have gone where it has.

    Not to forget your pal Christy giving away BC taxpayers money to FTB to juice her election chances which aren’t looking good.

  160. Halibut:

    On the other hand if a helicopter crashes onto your house at least you can crawl to the hospital.

  161. “You’d know not every public service worker has a desk job or… works for the Fed’s… Next time you have to call 911 maybe you should think of that…

    Since I work nights all around the city and don’t post to this site from my iphone at work … that renders another comment from you FOS.”

    Fair enough but last time I looked 911 operators work for the city, not the Feds but whatever.

    First post I saw of yours today was at 1:25 in the AM but again, whatever. Just saying you should be working with Mike for BC Tourism instead, your missing out on your passion.

    “Luke
    March 3, 2017 at 1:25 am”

  162. Good question Barrister. I often wonder if the people who leave their houses up to languish in this market have any intention of selling?

    Take 2421 Trent St, for example. Im not sure if it’s had any PriceSlashes™ but there’s nothing stopping somebody from at least putting in an offer. In my mind this property isn’t too different from Victor St., other than it’s within 100ft of a helipad.

  163. Barrister some people just list and hope price appreciation catches up or some desperate soul will buy. Most of these I bet drop off when listing expires.

  164. Gwac:

    Since they are not selling for months they are overpriced by definition in some ways. I was just wondering what happens if all these houses start to make major price drops at the same time?I guess it matters what percentage of these houses are ones where the owners feel like they have to sell as opposed to I will sell if I can get a super high price.

  165. Pretty soon the editorials will be saying “we’re moving because this has become a shit show and impossible to buy”. No one who is getting screwed over and over is going to stay til the bitter end. The pain must be incredibly frustrating without selling your soul to the devil with a ball and chain for decades. This is how all bubbles end.

  166. Has anyone noticed that there seems to be a lot of houses that have now been on the market for months without selling?

  167. Andy7,
    Thanks for the link. Ross Kay is saying we’re beginning to correct from the “shockwaves” from the Vancouver correction in motion. This is not surprising based on the same declining sales since last spring.

    Also interesting that he implies that the only reason the Vancouver average price jumped last month is because of a suspicious amount of million dollar plus sales in the first few days of February that juiced it.

    After the large amount of similar suspicious closed sales at the last few days of January he sure paints a clear picture of shady business going on. Why should we be surprised when this industry has covered up massive fraud for years.

    $340 billion removed from net worth in BC real estate last year will soon start to impact our local BC economy. That’s no chicken feed.

  168. When the market turns. I wonder if home owner will post editorials complaining about all the conditions buyers are imposing

    That just made my morning, nice one. 😀

  169. Creating a city for tourists and millionaires

    Why does the writer assume that the people that outbid them with no conditions are not locals?

  170. When the market turns. I wonder if home owner will post editorials complaining about all the conditions buyers are imposing. 🙂

  171. Must be frustrating to put in an offer and have this happen partly because of conditions. Aren’t people getting pre-inspections now though? And these folks are not local buyers by the definition used by the vreb, they are Vancouver buyers adding to local buyer demand. I can see why people are going high on their offers to be done with it. Maybe we’ll get more inventory soon.

  172. I appreciate all the answers to the question is there any city more desirable, in Canada, than Victoria and why? Of course it is subjective. To each their own. But no one could come up with any concrete examples of any other Canadian city they thought was better. Many of you came up with plenty of great examples as to why Victoria is a sought after place to be, esp. when compared to those prairie winters. I did think, I do enjoy skiing and think that’s about the only thing I miss living here that Victoria is lacking right on it’s doorstep. It being quite a haul up to Mt. Washington (which by the way does have some great skiing).

    I thought, we have some pretty nice beaches – has anyone been to East Sooke Pk? There’s a lovely beach there with tropical – like sand on the Aylard Farm side. Also, for a quick trip from home I love to head up to some of the beaches in (gasp) Gordon Head! (like Hollydean – is that why the 70’s crap boxes are going for almost a mill?)

    As for hiking, parks, nature options – these abound a plenty. I have so many more places to discover…

    Cavaet Emptor- If you want endless grey in winter try Vancouver or worse… England. I happen to like ‘windy’ but that might be from my time in England (nostalgia?)

    As for the new passenger ferries – I think two of them competing is probably going to be a good thing – might bring down the price. It does appear at three hours they’re going to be geared more towards tourists than locals. They may or may not make it. Things are different than in 1993… my prediction is only one of them will make a go of it, there isn’t room for two.

    And finally, yes it is sad that Langford is the last affordable place to be, what’s more terrible is what that mayor and lack of planning is doing to the place with the rapid development (any sane outsider can see it’s being destroyed). My first impressions of it was ‘what were they thinking?’

    When a home like Victor goes for 3/4 mill…that’s also got to be depressing for anyone trying to get into the market for SFH in the core. I actually think the situation is sad for housing being too expensive for many in larger cities across Canada, esp. when you see what could happen in Toronto and the people (many of them younger) that may loose out big time there. What we in Victoria desperately need is more diversity of housing in the core (things like row housing, semi’s, creative condo projects), but it’s too late for that with much of the land already used up… so that leaves Langford (sigh)…

  173. Strangertimes

    I went to the open house at 2643 Victor and its actually pretty nice. The photos are terrible but the backyard was great and home is definitely not a teardown.

    I viewed it as well and it was unremarkable. While perhaps not a teardown, it wasn’t appealing enough to entice me to place an offer, even at the assessed value. I felt the listing price was excessive at $717., even compared to other properties which I viewed and deemed overpriced. Perhaps I have more brains than money, but at least I’m not as insane as this market currently is. Just cannot justify paying these prices and my mortgage lender likely agrees.

  174. Maybe you should get a job with the Welcome Wagon instead of posting on the taxpayers dime at your Fed office.

    Nice one Hawk… However, if you actually knew what you were talking about (when has that ever happened over the years?). You’d know not every public service worker has a desk job or… works for the Fed’s… Next time you have to call 911 maybe you should think of that…

    Since I work nights all around the city and don’t post to this site from my iphone at work … that renders another comment from you FOS.

  175. Barrister

    the listing for the Victor house. Somebody actually paid 3/4 of a million for that house. Now this market has reached a point of insanity. The house looks like bulldozer bait.

    Only 2 weeks ago the purchaser of 1217 May acquired a 6240 sq ft lot in Fairfield for $790 (which was less than assessed value of $808).
    Victor buyer clearly has more money than brains! I suspect no financing was required.
    Discouraging enough for Those watching the market and were hoping to buy to abandon their search and pray for a correction.

  176. I went to the open house at 2643 Victor and its actually pretty nice. The photos are terrible but the backyard was great and home is definitely not a teardown.

  177. Halibut

    That Victor st. place is near me and must be priced 200k higher than it would have been a couple years ago

    Actually way more since it sold for $750.

    2016 assessment $477
    2017 assessment $594

  178. Bman

    Yikes, just looked up 2643 Victor. $750k is a lot of money for a rancher that totally sucks. 2651 Forbes went for $686k, and it even comes with a creepy basement with some faux log-cabin accents – that seems more reasonable.

    I thought Jackson was too high at $765 but compared to Victor, it seems to be better value – larger house and lot, nicely finished inside and out. All the above confirm Mars was great value (for the current market)

  179. I could not help it; I actually looked at the listing for the Victor house. Somebody actually paid 3/4 of a million for that house. Now this market has reached a point of insanity. The house looks like bulldozer bait.

  180. BREAKING NEWS …… Hawk was the buyer for 2643 Victor.

    That’s obviously why he hasn’t commented. The capitulation has happened; we’ve hit the top of the market.

  181. LF not yet but getting there. :). I should rent out my bull dozing services. Seems I would have a lot of work.

    When hawk sees this one. The words bag holders will be used.

  182. “Migration doesn’t equal desirability. That more people buy Hondas than BMWs doesn’t mean Hondas are more desirable.”

    The fact is that many don’t have the means to acquire that which they desire.”

    Maybe. Or they don’t give a shit about cars, so they drive a Honda. They desire a well-paid job, so they settle in a city that gives them the best shot at landing one. It depends on what is important to you. It would seem to me that living in a big city is more important to recent immigrants than some nice water views and a few oak trees.

  183. Hawk is right this market is definitely done. That victor house proves it. :).

    No, but it does prove that this market has lost its mind. 🙂

  184. Hawk is right this market is definitely done. That victor house proves it. :).

    5500 lot value is now 750k in that area. Wow.

  185. In any case, I don’t think migration statistics support a finding that Victoria is the most desirable place to live in Canada.

    Migration doesn’t equal desirability. That more people buy Hondas than BMWs doesn’t mean Hondas are more desirable.

    The fact is that many don’t have the means to acquire that which they desire.

  186. Barrister
    Three years ago 750k got you a knock down rancher in Uplands, actually a number of them where in pretty good shape.

    yup. The bears were saying they were over-priced…

  187. That Victor st. place is near me and must be priced 200k higher than it would have been a couple years ago.

  188. Yikes, just looked up 2643 Victor. $750k is a lot of money for a rancher that totally sucks. 2651 Forbes went for $686k, and it even comes with a creepy basement with some faux log-cabin accents – that seems more reasonable.

  189. “still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting”

    Over two-thirds of newcomers to Canada settle in Toronto, Montreal or Vancouver. Barely a half percent settle in Victoria. Calgary, Edmonton, Saskatoon, Regina, Lethbridge and Kelowna all grew faster than Victoria between 2011 and 2016 (and I’m talking about the CMAs here).

    If I am young and single, perhaps Edmonton and Calgary are more desirable because I can (could?) make more money. If I am a non-white immigrant, maybe somewhere less white is more desirable. Maybe I prefer hot summers, and Kelowna is more desirable.

    In any case, I don’t think migration statistics support a finding that Victoria is the most desirable place to live in Canada. And as everyone has already pointed out, desirability is subjective. It all depends on what is important to you and how you weight it.

  190. Ash:

    Three years ago 750k got you a knock down rancher in Uplands, actually a number of them where in pretty good shape.

  191. Not sure about 900k but nevertheless Oaklands is definitely still increasing. 750k for 2 bed rancher on Victor is nuts. Last year at this time 750k got you fully reno’d 3 beds on the main with suite on Asquith. And we all thought that was high.

  192. “still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting”

    “More desirable” means different things to different people and at different stages of their lives.

    Family may be the biggest reason why people live where they do. Another huge factor is your job. Why would ever I live in Victoria if I had to be in Toronto, Calgary, or Vancouver for my dream job.

    Not everyone can earn a living from their laptop at Machu Picchu. So honestly it’s a bit self-important and insulting to assume that everyone would “choose” to live in Victoria – otherwise we wouldn’t benefit from all the people that work at world-class medical research labs in Winnipeg, or the UN or Parliament, or food manufacturing in Vancouver.

    I’d say Kitsilano, West Van, and Horseshoe Bay were more desirable than Victoria (nice weather, views, ocean, hiking, paddling) when I needed access to the rest of the Lower Mainland, but parents & slower pace became more important.

    For prairie weather, my better half grew up in Manitoba and says, “People don’t understand how difficult it is there. Victoria is like Hawaii compared to the prairies. Rain is paradise compared to snow. I can wear a t-shirt and light jacket all year here. I guess some folks would say they like shovelling snow, spending extra time getting your car engine warm, and wearing parka hoods that stretch 1 foot from your face so your eyelids don’t freeze shut. Not for me (in retirement).”

  193. Luke,
    That fast speed ferry to Vancouver takes 3 hours one way and way too expensive. It will flop in the first year.

    Maybe you should get a job with the Welcome Wagon instead of posting on the taxpayers dime at your Fed office.

  194. It’s not really a defense. I live on the island. The difference is stark.
    At -5 I can play hockey outdoors wearing sweatpants and no shirt in Edmonton, I did it this winter when I went to visit. I wouldn’t wear that while biking around Victoria this time of year, even though the exercise is pretty similar, and the weather is much warmer.

  195. Difference between -8 and -20 isn’t really that significant when it’s that dry.

    “But it’s a dry cold!” The classic defense raised by inhabitants of the Rest of Canada. I lived almost 10 years in Edmonton, worked as far north as Fort Chip. It can be freaking cold on the prairies. Yes -20 on a sunny February day with no wind feels just lovely. However -20 on a grey day with 20 km/h wind can be absolutely bone-chilling. Trust me, after a stretch of days where -20 is the high, Victoria, or any location on the coast feels like a tropical paradise by comparison.

    Virtually every city in Canada east of the Rockies has quite a few winter days where exposed flesh will freeze. Victoria not so much.

  196. Also, still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting…

    To you maybe Victoria is the most desirable place and that is perfectly valid. And it is true that Victoria has many physical attributes that lots of people find desirable.

    But the fact of the matter is that Canada is filled with desirable places to live depending what you like.

    Every location has its disadvantages. Not to be down on Victoria (I LOVE it here!) but here are some of Victoria’s disadvantages that I have noted:
    – somewhat isolated by expensive ferry rides
    – grey in winter
    – high taxes and dysfunctional local politics
    – expensive real estate
    – windy
    – long way from skiing and nice mountains
    – bypassed by many major music acts
    – have to drive (or bike a long way) to get to any mountain biking opportunities
    – have to keep sweeping those damn cherry blossoms in spring, couldn’t the just melt a way like snow.

  197. Difference between -8 and -20 isn’t really that significant when it’s that dry. You have to wear gloves instead of 50 cent Zellers mittens, and you need to wear a toque. I worked outside during the winter there, and unless until you were an hour north of Edmonton you wouldn’t really need much in the way of winter gear.

  198. James Soper:

    Alberta at -20 is nicer than Victoria at +3

    Damn, maybe if you’re acclimated. I was just in the interior and -8 with nearly no humidity and no wind chill.. yep definitely better than rainy Victoria at +3. Went for a nice walk. -20 though? Bah. Too cold.

    If I can’t wear jeans without long johns it’s too cold for me.

  199. For sure the beaches suck here. What we need is a man made beach and bring in white sand and water slides like at Cultus Lake.

    If they build the sewer treatment plant strong enough maybe we can put an amusement park over top of it with a white sand beach. It is such a waste of water front property so close to the core. I’d pay a $100 a day for the family to go to such a park. A public/private venture to reduce costs? Another source of tourism other that boat loads of septuagenarians that are given an hour to buy Mountie and moose dolls.

    .

  200. Correction is far from over pumper Mike.

    OK, dumper Hawk.

    Gotta call you on that JJ. That might well be what you are saying now, but it seems to me that your opinion changed with your name and desire to buy.

    I love it.

    The only reason Langford has massive growth is because it’s a small sub-region of Greater Victoria and that’s where the growth is happening.

    I wonder what Stew Young will do once Langford chops down every last tree to make way for row-upon-row of cookie-cutter houses sardined together with no more than six feet between each building?

    I suppose he’ll have to run for mayor of Metchosin.

  201. LeoS

    Personally I could live very happily in any number of cities.

    Care to share? I’m curious.

    After Totoro said the Okanagan I’m a little more curious as I have not spent much time there. Being near some decent ski hills would be nice.

    I kind of liked Squamish until it went nutso in prices. Stayed there a few times and found it good for a town that small. Quite beautiful, though the sun hid quickly at night. It used to be a much better bang for buck than Victoria if you could deal with a place that small.

  202. that graph Michael posted

    Hawk, you might want to post that bull trap graph for him one more time.. it’s ridiculous how close it is now.

  203. People need to get out more and be less set in their ways I think…

    Yep.
    Plenty of nice places in Canada. The beaches in Victoria are terrible compared to many on the Great Lakes, or even compared to Parksville. Skiing the “powder” of Mt.Washington is nothing like skiing the champagne powder in Banff and Jasper. And the too cold remarks make me think you’ve never lived anywhere else. Alberta at -20 is nicer than Victoria at +3, and the actual public amenities like outdoor rinks and soccer fields and bike trails and tracks and water parks and cross country ski trails are much nicer. The fact that Victoria doesn’t have to pay for snow removal and way less road repair, and doesn’t have the same infrastructure makes me wonder where the hell all the tax money goes. Oh right, 13 communities, and Victoria itself has what 4 playhouses? They haven’t even paid for proper sewage disposal ever.

  204. Luke, I find Lugano a bit nicer than Victoria. (Technically, that is sort of in Switzerland but both are close to mountains).

  205. Also, still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting…

    Luke that is a subjective opinion. Personally I would say yes there are several cities and towns I like more than Victoria. But that’s my opinion based on my personal likes. And no one can tell me or you what we should or should not like. In general the answer has always been for me has been the people not so much the city.

    I do find that people in this city judge you more on what you own than who you are as a person. And people do like to brag a lot in this city. This blog in itself is a microcosm of the city.

  206. It still doesn’t change the fact Langford is seeing the most growth of any community in BC (that’s a Stat)

    Good example of how to lie with statistics. The only reason Langford has massive growth is because it’s a small sub-region of Greater Victoria and that’s where the growth is happening. The correct comparison is Greater Victoria’s growth rate, then you can compare it to other cities that aren’t divided into 13 little bits.

    Also, still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting…

    Depends on your criteria. Plenty of cities have many things we don’t. If you like to see cherry blossoms in February then Victoria is nice. If you like to ski it sucks. If you like the size of the city it’s great, if you like it bigger or smaller it sucks. Personally I could live very happily in any number of cities. People need to get out more and be less set in their ways I think…

  207. @ Luke

    For what it’s worth, I appreciated the respectful response, Luke. There’s been some nasty stuff flying around the last little bit. Refreshing.

    I guess whether one talks up, or talks down the market, makes little difference in the end. None of us have any real effect on what happens.

    I agree re Langford. Personally I think it’s sad that it’s one of the last remaining vestiges for affordability, and being chewed up fast. It’s the only reason it’s growing like it is, IMO. A friend of mine sold her house and is trying to buy – unsuccessfully. It’s been a terribly stressful experience for her.

    I think Victoria will always command a premium, and be considered expensive. That’s fine. I think this place is vastly better than Thunder Bay, Moncton, or Winnipeg. But there’s a difference between expensive, and overvalued. Overvaluation is what is occurring now, and that is what annoys me.

    Maybe it’s not the overvaluation itself, but seeing the mentality everywhere that this is sustainable, the sky’s the limit, there’s new fundamentals etc. It’s precisely the same rhetoric every time, and it almost always ends the same way. That just irks me. It’s foolish.

    Contrary to what some of us bears think, BC won’t, in the short or medium term, benefit from a massive housing correction. The bears that are priced out may then not have a job to afford that 50% off house. Yet, that is what will be needed in Van to correct and be healthy long term, Victoria as well – just to a lesser degree.

    In my view, we’re in a dilly of situation where there is no easy way out. Vic and Van are hardly alone. The party in Victoria for now, may go on for a while. Regardless, I sure ain’t buying anything here. And if I’m wrong? So what. Life has more to it than investing in houses.

    Again, thanks for writing.

  208. Local Fool:

    True enough – if you flip the numbers. I wonder where the other 77% might want to go?

    It still doesn’t change the fact Langford is seeing the most growth of any community in BC (that’s a Stat), and that Victoria had 23% price growth over last year. While in my opinion Langford’s not the greatest place – it’s not the worst either (that award goes to Surrey). We all know why Langford is experiencing the growth…

    And… what’s wrong with ‘pumping’ if that’s what it is. Is ‘pumping’ some kind of sin? I see nothing wrong with extolling the virtues of this incredible place.

    Also, still no one has answered my question is there any city in Canada more desirable than Victoria, and why? I’m still waiting…

    The smaller island cities all have their own appeal, but none of them can boast the amenities Victoria has. As for east of the Rockies… no need to mention anything over there. The Lower Mainland – do we even need to mention the hell hole that’s turned into these days? My best view of the Lower Mainland is in the rear view mirror!

    Guess that’s my answer 😉

  209. Personally, I don’t see the logic of excluding Oak Bay. There are neighborhoods such as Fairfield, Rockland, James Bay, Cadboro Bay and Ten Mile Point that have high end sales too. Should one exclude these areas too?

    At what point do you stop cherry picking the data?

  210. @ Luke,

    While I don’t think that is a neutral source of info, I just noticed (other than the piece hyping, of all places, Langford):

    According to our respondents, Victoria is perceived as a coveted place to live, with Metro Vancouverites identifying it as the second-most preferred location to move to, after Vancouver. Notably, 23% of B.C. Gen-X respondents looking to move elsewhere (if money was no object) prefer Victoria, followed by 22% of B.C. Boomers and 18% of Millennials.

    “According to their respondents” – that’s almost meaningless. We don’t know how many there are or how representative they are of the buying populace writ large. Even if I could take it as credible, I could just as easily flip that paragraph to invert its bias:

    According to our respondents, Victoria is not perceived as a coveted place to live, with Metro Vancouverites identifying it as the lesser preferred location to move to, compared to Vancouver. Notably, 77% of B.C. Gen-X respondents looking to move elsewhere (if money was no object) would not prefer Victoria, followed by 78% of B.C. Boomers and 82% of Millennials.

    Standard issue pump piece…

  211. Two awful new listings in OB this week: Not impressive at all, but in this tight market, what will they fetch?

    2331 Pacific Ave for $1,149k – Check out the lovely master bedroom suite – a new use for pallets!?

    2350 Nottingham Road for $1,189k – the kitchen is in perfect condition – from the 1940’s!!

    Thanks Totoro for those awesome links re. history of Oak Bay, etc – I love learning about the history of my new community 😉

  212. The problem is that you want me to exclude based on price to determine price.

    No, I don’t. Not sure how much clearer I can be. I was referring to the price of ENTRY to Fairfield and Oak Bay in 2013 and stating they were similarly priced in 2013. A median will not be the data you need to assess this information JJ.

    In order to assess the validity of this assertion you need to exclude the upper end because we are talking about a certain segment of the market which might behave quite differently than another segment. If you did it at the other end you’d likely find that OB’s high end median was much higher than Fairfields.

    The rest of what you say is frustratingly illogical imo – I’ll leave you to your beliefs as to how to utilize stats.

  213. So much for ferry fares being a detriment to living in Victoria… And we have two new high speed passenger links coming as well. All part of the Renaissance going on as Victoria awakens…

    http://globalnews.ca/news/3283169/clipper-ferry-service-to-begin-between-downtown-vancouver-and-victoria-in-2018/

    Resonance released another report to my email yesterday. Apparently Victoria is on many radar screens. They say interest is up from U.S. Buyers. So, I’m wondering if we can get more up to date Stat’s than 2015 on U.S. buyers? (now that the loonie isn’t doing so great)

    This from Resonance:

    The fastest-growing cities in the just-released Canadian census reveal British Columbians’ renewed interest in slowing down by moving across the Strait of Georgia. The patterns are consistent with the resident sentiment in our Future of B.C. Housing Report.

    Although you’d never know it by the gripes about Lower Mainland traffic, B.C.’s fastest-growing cities are not Surrey, North Vancouver or New West. In fact, the places with the largest percentage of population increase from 2015 to 2016 are not in Metro Vancouver at all.

    The cities sitting atop our provincial slice of the just-released Canadian census are on Vancouver Island. As in: that place so many of us swore off, given spiralling ferry fees and difficulty in scheduling access.

    As it turns out, we don’t seem to mind all that much.

    In fact, the province’s fastest-growing city for the past five years is the rugged (in so many ways) western suburb of Victoria.

    B.C.’s Fastest-growing City:

    Langford, part of the Capital Region District’s West Shore, is the historic flip side to Victoria—sprawling, where the B.C. capital is hemmed in by inlets, gorges and straits. As a result, it’s so much more affordable. It’s also the land of golf courses, monster trucks and mountain lakes, along with rivers and streams and all the outdoor pursuits that such terrain serves up.

    Today, Langford boasts 40,000 residents, already almost half of Victoria’s 85,000, and it grew 6.7% in 2015/2016, after a 7.4% jump in 2014/2015. It is the engine that is powering the rapid population growth (and resulting real estate appreciation) of the Capital Region and the South Island.

    British Columbians’ positive opinion towards Victoria, its suburbs and the South Island in general was expressed strongly in our Future of B.C. Housing Report.

    According to our respondents, Victoria is perceived as a coveted place to live, with Metro Vancouverites identifying it as the second-most preferred location to move to, after Vancouver. Notably, 23% of B.C. Gen-X respondents looking to move elsewhere (if money was no object) prefer Victoria, followed by 22% of B.C. Boomers and 18% of Millennials.

    The real estate market is already reflecting the pull of the South Island, experiencing one of the most intense price spikes in recent memory, with a 23% annual appreciation in 2016 (according to the local real estate board). Although speculation abounds about foreign buyers being diverted to Victoria by Vancouver’s foreign buyer tax and empty house penalties, our research shows that local British Columbia buyers are the most likely to choose the Victoria area.

    “If you’re going to cash out of your Vancouver goldmine,” Urban Planner and SFU City Program Director Andy Yan tells Resonance, “you’re going to seek a place with most of the big-city sophistication on a smaller scale. In B.C., [a] smaller [version] of Vancouver [is] Victoria.”

    Mike Nugent, the former president of the Victoria Real Estate Board, notes that it’s not just B.C. dollars flowing in. Homeowners cashing out across the country are making their loonies work harder by opting for the South Island versus the Southern States, with their 35% premium. To say nothing of the political tire fire.

  214. As Dasmo said, “Most of today’s retirees who have lived in 4000 sqft homes will not want to move into 500sqft. ”

    Absolutely, but I’m not seeing that happen. I see retirees selling their 4,000 square feet homes and buying luxury condos. As I said, today’s condos are not like condos of the past that resembled 1970’s apartments.

    Today’s condos are pretty frigging nice!

  215. As it is, you are working with medians which will be skewed in OB by a lot of ultra high listings. Correct this and we can discuss the results logically.

    That would be cherry picking the data. The problem is that you want me to exclude based on price to determine price. Oak Bay isn’t an island floating off the coast. What happens in Oak Bay will have an effect on adjoining neighborhoods. The rational for excluding high end sales would be just as appropriate for excluding low end sales.

  216. As Dasmo said, “Most of today’s retirees who have lived in 4000 sqft homes will not want to move into 500sqft. ”

    For example: http://www.theglobeandmail.com/globe-investor/retirement/retire-housing/retirees-scaling-back-their-housing-costs-but-not-their-lifestyles/article27179116/
    “One trend is “co-housing”: neighbourhoods of private homes built around shared facilities such as communal kitchens and gardens.” (this is also happening in the US & South Africa)

    The Demand Institute study said 63% of baby boomers don’t plan on moving out of their current house as they age (they want to age in place), and of the 37% that want to move, 68% want SFHs and 46% are looking for homes to upsize, ie., the same size or bigger than the ones they have now. http://demandinstitute.org/baby-boomers-and-their-homes/

    While there’s an uptick in condo sales here, there’s no proof that this demand is created by seniors or that condos have “become the first choice of Victoria retirees”. In fact, what we’re seeing is more younger people buying condos as first homes.

    As people have said before, personal anecdotes aren’t trends.

    I hope that if anyone has insider’s access to real estate data and make comments about trends, they should preface it by saying “I don’t have data to back this up, but my personal opinion is …” because there are real people out there making some tough personal or business decisions, and they need help distinguishing between opinion & fact, especially when it’s presented by an industry insider.

    Another CBC report showed seniors moving to the suburbs instead of downtown.
    http://www.cbc.ca/news/business/seniors-moving-to-suburbs-instead-of-downtown-living-study-finds-1.2849032

  217. Historically speaking between 200 to 300 new listings are added to the market in March. For houses in Saanich East, Victoria and Oak Bay it’s more like 50 new house listings. Last month only 95 houses were sold in these areas or 40 percent less than last February. Historically March sales have also increased but if there is a lack of affordability due to high prices then I would expect a much lower increase in sales than we have seen in the past . Unless prices decline so that more people can afford to buy.

    Last month we were adding 1.4 new listings for every house that sold in these three areas and that kept the median and the average house prices from increasing despite the months of inventory being low. If new listings were suddenly being added at the rate of 2:1 or 3:1 that would impact people’s perception of the market. Visually you would be seeing double the number of “For Sale” signs in your neighborhood and they would be staying up for sale longer.

  218. It’s always interesting to read the Vancouver version of HHV.
    https://vreaa.wordpress.com

    LeoS, your charts and analytical wisdom are second to none!!! I hope you continue this blog for years!! If you need more advertising revenue to maintain this site, you wouldn’t get any objections from me.

  219. Bingo,

    Time will tell but from my own experience twice at market tops the inventory flood gates opened at a shocking rate and the market changed overnight. Once I made off great, second time had to take a 15% haircut due to a pending offer on another place.

    As it’s well stated, real estate is emotional and emotions to lose out on easy big money is very high right now in my humble opinion.

  220. That’s why personal anecdotes are of little value. Individual circumstances will differ but rarely do they represent the market as a whole.

    Wasn’t pretending to represent the market as a whole, only the price of SFH entry to Fairfield and Oak Bay. I followed both markets in our price range daily for three years prior to buying. Separate out your stats for SFHs under 400k for Fairfield and Oak Bay in 2013 and maybe there will be support for my experience with the market, or not. As it is, you are working with medians which will be skewed in OB by a lot of ultra high listings. Correct this and we can discuss the results logically.

  221. LC

    You need a large enough amount of inventory which I would say is between 2500 and 3000 to drown our the crap and over priced to get real sense of health of the market.

  222. I’m sure your point exerts an impact on the stats, but I suspect it’s an indication of a broader reduction in enthusiasm for buying RE there.

    We’ll soon see, won’t we.

  223. Sales are down because of lack of inventory so keep that wishful thinking about prices.

    Errr not so sure I agree. The sales levels (VanRE) have been dropping for several months and DOM has been rising.

    Not referring to condos, of course. Those are still smoking hot.

  224. hawk

    If 1000 places hit the market over the next month, one could only imagine which way prices would go.

    Quite true. A flood of inventory with declining sales would put significant downward pressure on prices.

    Could this be your prediction coming true, and nearly on schedule? (for this particular prediction)

    hawk November 1, 2016 at 2:10 pm

    Obviously the new rules and banks tightening the credit lending screws will tip this market over the next few months like Vancouver. Prices have peaked and nowhere to go but down as per Couvellier and Associates.

  225. “Actually not as off topic as you might think…”

    Agreed Local Fool, market tops are always smelly and toxic as the pumpers keep telling you its never going to end. Greed always overwhelms logic. 😉

    Another of Canada’s big bank CEOs is warning about housing market corrections

    “Trees don’t grow to the sky and markets will correct at some stage here,” Porter told analysts Tuesday ”

    http://business.financialpost.com/personal-finance/mortgages-real-estate/another-of-canadas-big-bank-ceos-is-warning-about-housing-market-corrections

  226. LeoS

    Friend of mine has been travelling the world the last 2 years. Said he’s never been busier. Arguably it’s feast time in tech, but I wonder if they considered that they have to do a lot less feasting if they live in a cheaper place?

    Excellent point. I have a friend that travelled south america with nothing but his backpack and a laptop. He was at some big tech companies in Van and wanted a change and to see more of the world.

    Worked out great. His cost of living dropped significantly (despite living out of hotels and restaurants and cafes) and his income (to the best of my knowledge) didn’t drop. I got him to quote on some stuff and his rate was the same. Rightfully so, he was well worth it.

    His instagram would make anyone jealous.”My office for the day” Where his laptop is on a bistro table with fresh coffee and a snack and in the background is the most beautiful beach I’ve ever seen. He’s definitely not a braggart, and the intent would be more along the lines of: “Look, this could be you!”

    He a big proponent for minimalism. It’s not that hard to take off and try something new when all you own can be carried in one bag. There’s a lot of freedom when you aren’t tied down to stuff.

    Some people do similar things with kids (e.g. bumfuzzle ), but most wouldn’t consider it with a family.

    Lots of ways to live. If you think you feel most comfortable and happy in Vancouver and the cost of living is worth it to you.. so be it. Van has a lot going for it. A big city life (night life, shopping, food etc) but also access to all the outdoor living you could want (world class skiing, mountain biking, motocross, auto racing, kayaking, sailing etc etc). For people that want all those things I think it’s hard to beat.

    Right now I can swallow the cost of Victoria for what it offers. It’s getting more difficult though.

  227. Same for us 14 years ago. The medians may differ a bit because OB has much more high end but if you are looking to enter the market they were similar

    That’s why personal anecdotes are of little value. Individual circumstances will differ but rarely do they represent the market as a whole.

  228. @ Leo S:

    It is based on the data we have from 1996 onward so keep in mind it doesn’t represent all possible market conditions (the crash of the early 80s for example).

    That’s the money quote. Prices will keep rocketing up, until they cease to rocket up.

    As usual, the monthly numbers are noise, so what we want to find is the underlying signal. To get at the signal, we can simply take the trailing 12 month average which will flatten seasonality and show us the trend.

    I question whether there is a signal. Markets are chaotic. They may display trends, but so do chaotic systems (beginning Sunday, the weather will show a drying trend). They may show cycles, but so do chaotic systems (i.e., strange attractors) but they are still chaotic, which means there is no signal, not a reliable one, anyhow.

  229. @ Tallguy:

    when they say that foreign buyers only account for 5% of the market right now, they aren’t specifying which zone.

    Probably the foreign buyers are the folks bidding up the prices of tarted up OB homes, like Exeter Road, a tough sell last summer at $1.2 million, now offered, after an internal makeover and a bit of fresh landscaping, at $4.5 million.

    We should be grateful to foreigners so lavishly dispensing their cash to keep our interior designers and landscape gardeners employed. However, we should also be wary of average prices, means or medians. There’s a lot of froth at the top end that has nothing to do with ordinary folks buying a place to raise a family.

  230. That was also the case when I was seriously house hunting 8 years ago.

    Same for us 14 years ago. The medians may differ a bit because OB has much more high end but if you are looking to enter the market they were similar. In our case we bought in OB even though Fairfield was our first choice (due to seismic upgrading on the elementary school) because the house was cheaper, location we could get was better, and the square footage was bigger.

    I was approached to look at doing a joint venture with a home owner that wants to subdivide his property

    Hope the numbers work for you. A joint venture with all the details spelled out could be a very good thing for you.

    Instead this is what I say to renters out there. Buy when it makes sense to you.

    Gotta call you on that JJ. That might well be what you are saying now, but it seems to me that your opinion changed with your name and desire to buy.

  231. Yes the Thursday onslaught of new properties begins. Happened every Thursday for the past year. Its spring so hopefully we get more so we can have a normal spring market.

  232. totally off topic I am never swimming in a pool again

    Actually not as off topic as you might think…

  233. @ Michael

    What I find strange is people seem to not discount the red zones. Any quake near Richter 7, and a big chunk of Fairfield will be levelled.

    Maybe it’s not so strange.

    Insurance premiums, including fire and earthquake, seem generally to be in the region of 0.2% per year, which implies that insurers estimates the risk of a your house being flattened by a quake at less than 0.1% per year, or once in a thousand years.

    That’s less than your risk of being killed in a car crash, and is the sort of risk that most people are willing to take — especially when they have earthquake insurance.

  234. “Interestingly, according to realtor.ca, 110 properties hit the market in the last 24 hours.”

    Thanks for that CS, and so it begins. Might only take a couple weeks if this pace keeps up.

  235. Vancouver SFH’s sales are cratering and prices still down from 6 months ago. Correction is far from over pumper Mike.

    Sales of detached properties in February 2017 reached 745, a decrease of 58.1 per cent from the 1,778 detached sales recorded in February 2016. The benchmark price for detached properties is
    $1,474,200. This represents a 6.5 per cent decrease over the past six months and is unchanged compared to January 2017.

  236. Thanks for the Oak Bay/Fairfield comparison data JJ. I think the second comparison is the more valid one as Oak Bay has way more waterfront properties than Fairfield and the waterfront is really its own category. The data would suggest that Oak Bay has fluctuated around 10% more expensive than Fairfield.

    Perhaps it was just a quirk of the properties I looked at that made me feel that Fairfield was just as expensive for comparable houses in 2008.

  237. @ Hawk:

    If 1000 places hit the market over the next month, one could only imagine which way prices would go.

    Interestingly, according to realtor.ca, 110 properties hit the market in the last 24 hours.

  238. Vancouver…tanking.

    I have told you several times that Van’s correction is over.

    I hope buyers like Vicrenter used the uncertainty to their advantage.

  239. Hawk

    Wishful thinking does not change what is happening right now. Next year who knows. Right now it sucks to buy a home in Victoria. Any house priced right will sell within a month or so. You can post whatever negative crap you want but in means nothing right now to a buyer and seller in Victoria at this moment.

  240. Most of today’s retirees who have lived in 4000 sqft homes will not want to move into 500sqft. No mater how many low voltage MR16 pot lights there are…. Expect the aging in place industry to boom. Expect more small lot subdivisions. Expect high demand on town homes. Condos are flying off the shelves because first timers cant afford detached and investors see $$$$ (And some people prefer condo living).

  241. gwac, You and Intorovert need to wake up that Vancouver has people moving there too, low interest rates and more jobs than ever last year and they are tanking. Wrap your mind around those facts.

    BREAKING: Vancouver home sales slide continues

    Vancouver-area home sales fell 41.9 per cent in February from the record set a year earlier. The Real Estate Board of Greater Vancouver’s home price index fell 1.2 per cent from January to $906,700.

  242. I’m beating a dead horse here, but when they say that foreign buyers only account for 5% of the market right now, they aren’t specifying which zone.

    Few, if any, foreign buyers are buying anything west of Saanich. In fact I’d bet you could eliminate anything west of Wharf and north of Bay, except areas such as Vic West, Sidney, and a few other pockets (waterfront/close to the airport).

    Anyways, there were 578 sales of SFH, TH, and condos last month. Of those total sales, there were 288 sales in Victoria, Vic West, Oak Bay, Saanich East, and all Waterfront areas. Fiver percent of 578 is 29, but 29/299 is 10%. So basically, if my postulating is correct, core sales are closer to the 10%, such as they were for Vancouver when it got the foreign buyers tax.

    I went through the provincial data to try to debunk my theory, but the foreign buyers numbers are only given for the Capital Region as a whole. Unlike Vancouver, Richmond, etc, the Ministry of Finance does not break down the numbers by municipality for Greater Victoria. This is typical of the cloudy transparency of this government, but that is another discussion…

    Long story short, I believe that foreign buyers are having a larger influence in the core areas than they are given credit for. I also believe that it is likely a higher percentage of Americans than Chinese due to proximity and the 30% discount our dollar is giving them right now.

  243. That people move here and rent before buying is nothing new.

    Since you want to see if the percentage of out-of-town buyers is increasing, comparing the two time periods is very reasonable.

  244. Yes, thanks, Hawk, for pointing out some random shit from the UK. (USEFUL!)

    Amazing what happens when the tide goes out and the bagholders are left wondering WTF just happened. Can’t happen here, we’re special, right Intorovert ?

    It could happen here, but I’m not betting on it.

  245. “What the hell does London England have to do with Victoria BC.”

    Nothing. Just like San Francisco, which to many a civic booster on this blog, is somehow a comparable to Victoria.

  246. Hawk I deal in facts not fantasies. Our economy is strong, people are moving here, inventory is low and interest rates are stable.

  247. Is this a little more local for you gwac or is a 10 minute plane ride too far too ?

    BREAKING: Vancouver home sales slide continues

    Vancouver-area home sales fell 41.9 per cent in February from the record set a year earlier. The Real Estate Board of Greater Vancouver’s home price index fell 1.2 per cent from January to $906,700.

  248. If I cherry pick the data and remove Uplands and waterfront properties then this is the result.

    Primary Year Sale Price, Median for Fairfield excluding waterfront
    2007 $610,000
    2008 $664,000
    2009 $610,000
    2010 $693,750
    2011 $685,000
    2012 $658,750
    2013 $681,500
    2014 $711,500
    2015 $727,500
    2016 $950,000
    2017

    Primary Year Sale Price, Median for Oak Bay not including waterfront or Uplands
    2007 $675,000
    2008 $722,500
    2009 $674,000
    2010 $765,000
    2011 $735,000
    2012 $712,000
    2013 $715,000
    2014 $730,000
    2015 $815,000
    2016 $1,050,000
    2017

  249. Amazing what happens when the tide goes out and the bagholders are left wondering WTF just happened. Can’t happen here, we’re special, right Intorovert ?

    The towns and cities where sellers have cut their asking price – we reveal where to get a property bargain

    According to new research, almost a third of properties currently for sale in major towns and cities in the UK have had their original prices slashed in order to secure a sale.

    https://www.thesun.co.uk/living/2814101/the-towns-and-cities-where-sellers-have-slashed-their-asking-price-we-reveal-where-to-get-a-property-bargain/

  250. “I hope the renters that waited for a crash listening to him speak up and hold him accountable.”

    Grown ups can synthesize and analyze information from multiple sources and make their own big-boy decisions. If there are renters who did not buy based on the opinion of one dude posting on a blog, then perhaps they aren’t very smart.

  251. “What I find strange is people seem to not discount the red zones. Any quake near Richter 7, and a big chunk of Fairfield will be levelled.”

    Not to mention Oak Bay, James Bay and Sidney. Good thing you’re in Vic West Mike. You’ll just get the tsunami rush through the harbor. 😉

  252. Gee I wonder why the banks don’t want to take on more mortgage risk ? Maybe because it’s a massive fricking bubble about to pop into ugliness.

    Canada’s banks are pushing back against taking on more mortgage risk

    Canada’s financial industry is urging the federal government to consider alternatives to proposals that could require them to take on a greater share of mortgage defaults through a deductible — calling it one of the biggest shakeups to hit housing finance in 50 years.

    Finance Minister Bill Morneau announced in October that he would tighten access to mortgage insurance for banks, while considering options for banks to have more skin in the game.

    http://business.financialpost.com/personal-finance/mortgages-real-estate/canadas-banks-are-pushing-back-against-taking-on-more-mortgage-risk

  253. I am noticing that prices in Fairfield are pretty well matching those in Oak Bay these days.

    What I find strange is people seem to not discount the red zones. Any quake near Richter 7, and a big chunk of Fairfield will be levelled.

  254. Feb Feb
    2017 2016
    Net Unconditional Sales:675 772
    New Listings: 880 1,160
    Active Listings: 1,537 2,562

    If 1000 places hit the market over the next month, one could only imagine which way prices would go.

    I think there is a lot of teeth gnashing going on right now wether to take the money and run or hold for one more bump that may never come. Whose going to dick around for an extra $10 or 20K when the risk to lose bigly in a flooded market would be much higher ? I would be selling ASAP.

    James Soper, you nailed it. Intorovert is a parasite who offers nothing on here.

    Even London town with limited land is price slashing and it’s a “world class city”. Wait til the NDP get in. 😉

    London Homeowners Are Desperately Slashing Prices

    More London home sellers are having to cut the asking price of their homes, and they’re offering deeper discounts as political uncertainty and high values dampen demand.

    “Price cuts seen in prime central London in the immediate aftermath of Brexit are now filtering through to outer boroughs,” said Savills Plc residential research director Lucian Cook. “Affordability issues are now a problem after a decade of house-price growth, and buyers are finding they increasingly come up against mortgage-lending limits.”

    https://www.bloomberg.com/news/articles/2017-03-01/these-are-the-places-in-london-where-house-prices-are-falling

  255. If I understand you correctly Caveat Emptor this is the data you would like to know.

    Here are the median prices for each year for Fairfield

    Primary Year Sale Price, Median
    2007 $610,000
    2008 $669,000
    2009 $614,500
    2010 $697,500
    2011 $690,000
    2012 $672,000
    2013 $685,250
    2014 $711,500
    2015 $740,000
    2016 $950,000
    2017

    And here are the median prices each year for all of Oak Bay

    Primary Year Sale Price, Median
    2007 $699,450
    2008 $760,000
    2009 $690,500
    2010 $785,000
    2011 $760,000
    2012 $745,500
    2013 $750,000
    2014 $778,400
    2015 $865,000
    2016 $1,108,000
    2017

  256. In general greater victoria properties are bought by locals and I don’t believe that has changed.

    Locals, like the newly retired couple I met a couple months back who moved here from Ottawa but rented first.

    I’m considering building two houses in Oaklands…

    Just curious how Just Jack, a property appraiser who rents, can afford to build two houses in Oaklands. Sounds fishy.

  257. Hard to argue with the facts about people selling their home and buying a condo. I can say however that I personally wouldn’t think about selling our house and buying a condo. Here is why people should think twice before doing this. Do you really want to be at the mercy of a few people who dominate the strata council and decide that they want new carpets all through the building because they don’t like the colour any more? A number of my friends have been stuck with over fifty thousand dollars expenses to replace things that only needed “repaired” and not “replaced”. I’m serious. I’ve seen building having all their windows replaced when in reality only a few needed attention. “Might as well do the sliding doors while we are at it mentality”.
    Not to mention the strata fees which are getting out of hand because the system is so complicated and bureaucratic that you need professional property management companies to weave you through the maze of paperwork.
    A Better idea is to install a basement suite that will give you a good income instead. And yes….maintain your house well ……but don’t go silly on it. (Repair instead of replace things).
    That’s my simple opinion:)

  258. I am noticing that prices in Fairfield are pretty well matching those in Oak Bay these days.

    That was also the case when I was seriously house hunting 8 years ago. South Oak Bay had a premium over Fairfield, but if you averaged South Oak Bay, Estevan, and North Oak Bay it was approximately the same as Fairfield. I remember JJ contradicting me but that was my finding on the ground.

    For the comparison to make sense you have to keep Uplands out of the equation as well as waterfront since Oak Bay has far more waterfront properties than Fairfield

  259. Thank-you Truthnotlies for expressing something that I have never said.

    Instead this is what I say to renters out there. Buy when it makes sense to you.

    I’m considering building two houses in Oaklands and earlier this week I was approached to look at doing a joint venture with a home owner that wants to subdivide his property. That’s pretty bullish. But I want to know what is happening in the market. Because then I’ll know how much personal risk I am willing to take or should I spread the risk with other investors?

    I tell you if sale volumes and prices were both increasing, I would be a happy, happy person. The answer would be clear. Instead we have the volume of house sales close to a 15 year low in Saanich East, Victoria and Oak Bay. And that is the opposite to what is happening in condominium sales in the core. Then when you lump house and condo sales together – the average looks fine.

    When I have spoken to house sellers, that are retirees, they are selling their homes to buy a condo or a town home. And I suspect that that trend will become more prevalent into the future as retirees now have a choice to live in the same community and to have a big bank account. That can become a huge amount of house listings as retirees take advantage of high prices.

    What has changed in Victoria from a decade ago is that the condominium has become the first choice of Victoria retirees. Condominiums today are no longer built to look like a 1970’s apartment. They look and feel like a home. That gives today’s retirees an attractive option other than to stay in their house. And I think that is a trend that is only going to grow. More retirees selling houses and not buying another house – but purchasing a condo.

  260. On a totally unscientific basis, I am noticing that prices in Fairfield are pretty well matching those in Oak Bay these days (if you exclude the Uplands. There is also a much larger inventory of homes under 1.5 million in Oak Bay right now than in Fairfield. Might just be a fluke of the moment.

  261. I was looking at the income survey which is not census data. Will review.

    Anyway I do agree that Oak Bay prices aren’t and haven’t been tied to local incomes. I just don’t see it as much of a problem because in my mind there are many alternatives. Of course buyers that had their hopes on that neighbourhood specifically may feel differently.
    Thanks for the resources, will review. The tricky thing is often finding the data. Even finding census data online is very difficult further back than the last couple. Not sure why they don’t just publish it all easily accessible. Will have to check the library.

  262. In general greater victoria properties are bought by locals and I don’t believe that has changed.

    Agreed. Stats support this. Only question for me is how people can afford the homes they buy when appreciation exceeds wage growth over the long-term and how they are buying houses today.

    I’m not sure why you believe the data for incomes is flawed or poor quality. The data was cross-checked with actual tax records held by CRA for 70% of BC respondents who gave permission in the National Household Survey. Seems okay for the purpose of using it to identify income-based affordability by sub-area.
    https://www12.statcan.gc.ca/nhs-enm/2011/ref/guides/99-014-x/99-014-x2011006-eng.cfm#a5

    because an area gentrifies and is no longer affordable to the same people that lived there before doesn’t mean much. That’s completely different than an entire city detaching from local incomes.

    Agreed. I’m just not sure gentrification based on population growth is the complete explanation here.

    The data for Oak Bay for the 1950s and now came from this study:
    https://dspace.library.uvic.ca/bitstream/handle/1828/2682/Patterson_Brandy_2010.pdf?sequence=6&isAllowed=y

    This write-up by a UVic prof:
    https://www.oakbay.ca/our-community/history/archives/research/oak-bay-history

    This collection:
    http://www.webturf.com/oakbay/history/open_forum/

    And this:
    https://www12.statcan.gc.ca/nhs-enm/2011/dp-pd/prof/details/page.cfm?Lang=E&Geo1=CSD&Code1=5917030&Data=Count&SearchText=Oak%20Bay&SearchType=Begins&SearchPR=01&A1=All&B1=All&GeoLevel=PR&GeoCode=5917030&TABID=1

  263. Thank god Leo has access also to the actual data now. For too long Just Jack has been mixing in fake data with real data. Just didn’t have the energy to constantly post a rebuttal.

    This isn’t true.

    1. The data on MOI is the same data I’ve had for years. Nothing new there.
    2. John Dollar is often referencing a sub area of the market (like detached in the core), while I tend to talk about the whole market. So his statement may have been about that sub area which wasn’t clear to me.
  264. Does anyone know what the story is on the building under construction on Goldstream avenue in the 6 or 7 hundred block? It looks like it has came to a complete halt. I believe it is a concrete structure using that foam forms. It is quite a large building…maybe an apartment building?
    Any news about what happened/

  265. We have years of sales data for each sub area and the census information for income and age and property type. The only data quality issue I see is no measure of net worth

    Last I checked the income survey stats from statscan the data quality (their own assessment) was poor even for all of greater victoria. Not sure where the Oak Bay stats come from and the quality.

    My view is that the data would be more valuable if broken down by sub-area and we’d get a better idea of how income is or is not correlated with housing prices.

    And I think you’re missing the point on the income comparison. Areas change, and just because an area gentrifies and is no longer affordable to the same people that lived there before doesn’t mean much. That’s completely different than an entire city detaching from local incomes.

    Oak Bay was already a middle class neighbourhood in the 1950s

    That’s exactly what I said. Middle class neighbourhood then, no longer middle class now.

    We might be saying the same thing different ways but what I’m saying is that income-based affordability no longer provides a check on price growth in desirable areas and it would be interesting to understand why not as these factors will likely be of assistance in developing a crystal ball.

    I think it only works for the city as a whole. In general greater victoria properties are bought by locals and I don’t believe that has changed.
    Sub areas, especially the most premium ones, are free to not correspond to local incomes due to a small number of foreign investors or retirees having a disproportionate effect.

    As for the crystal ball, we have to remember that fundamentally it is going to be limited, and I really doubt it could ever say anything useful about the appreciation of one area over another aside from that it perhaps might appreciate at a faster or slower rate. I’ll be happy if it predicts price direction and magnitude overall, as well as provides some early warning of changes in trend for both condos and detached homes.

  266. These stats break down when you try to dig that deep. Both due to data quality when you have so few respondents, and because in a retirement area income means less and less.

    We have years of sales data for each sub area and the census information for income and age and property type. The only data quality issue I see is no measure of net worth. My view is that the data would be more valuable if broken down by sub-area and we’d get a better idea of how income is or is not correlated with housing prices.

    Yes. Just a different way to think about it. Your grandparents could not afford to buy in a luxury area so they bought in everyday Oak Bay in a sleepy town.

    Oak Bay was already a middle class neighbourhood in the 1950s with a good reputation with some luxury homes on the waterfront and in uplands and only 1000 fewer people than now. It also had 25% seniors like it does now. It remained this way until about 15 years ago as far as I can tell when the middle class homes experienced significant appreciation. Up until maybe 7-8 years ago you could buy a home based on median family income here – now you can’t. When we bought in 2003 it was affordable to someone with lower than median incomes.

    I think the point I’m trying to make is that this could be due to recent population growth, but other factors probably have a fairly high role in demand and whatever has been occurring has been impacting income-based affordability significantly in desirable areas. Greater Victoria has actually had a much lower growth rate than other areas in BC like Kelowna, yet experienced a higher appreciation rate.

    http://www.canada.com/technology/census+victoria+population+growth+lags+western+trend/6119744/story.html

    We might be saying the same thing different ways but what I’m saying is that income-based affordability no longer provides a check on price growth in desirable areas and it would be interesting to understand why not as these factors will likely be of assistance in developing a crystal ball.

    I’m going to go out on a limb and suggest these new mortgage rules are significantly affecting the real estate market in a way not anticipated.

    Could be. I might be misunderstanding the new rules but it appears to me that someone selling their home to move up would have 20% to put down on the next place and should be able to access a mortgage through the banks and would not necessarily have to qualify at the qualifying rate.

    These changes affect those putting less than 20% down and everyone using non-bank lenders. I do think the changes will have an impact on the market though because for those caught by them they can now borrow 20-30% less than before.

  267. Just quickly commenting, long time reader never posted.

    Thank god Leo has access also to the actual data now. For too long Just Jack has been mixing in fake data with real data. Just didn’t have the energy to constantly post a rebuttal.

    From now on, please when you see him post blatant lies, please correct it like you did below.

    Months of inventory were much higher in 2007, even myself without access to data knows that!

    Unbelievable, I hope the renters that waited for a crash listening to him speak up and hold him accountable. We had a wolf in sheeps clothing posting here for over a decade.

  268. Mars only got 716k, well below my estimate of 800. On the other hand, nearby 3305 Linwood fetched a wild 885k, which I would have pegged below Mars.

    Here’s to hoping our contributor vicrenter landed Mars. I didn’t view it but I’d say at 716k it is good value compared to others out there.

    Mars purchaser did well. Compared to nearby 3011 Jackson – Assessed at $563, listed at $639, Sold for $765.

  269. Leo: 617 St Charles has a sold sign on it. The owner and the listing agent are the same person.

    Ah, missed that. In that case I have no idea.

  270. Leo: 617 St Charles has a sold sign on it. The owner and the listing agent are the same person.
    There is something possibly a little fishy about the quick flip of this property.

  271. Looking back in history the market was even more ludicrously hot in 2007 and 2008 than it is now, just before the months of inventory shot up to 5 and 6 months. Those ludicrously hot years didn’t prevent a market surplus.

    Not that I can see.
    Feb 2007 MOI: 4.1
    Feb 2008 MOI: 3.8
    Feb 2017 MOI: 1.7

    Current conditions have never been seen before as far as I can tell.

  272. I was just talking to a couple contractors/consultants in Vancouver about this. Rent is insane, houses unaffordable and they could work anywhere. Live in Vernon and have a season pass at Silver Star, live on one of the cheaper Gulf islands.. whatever. Somewhere cheaper than Van. The answer was jobs. While they primarily do work remotely their business connections are primarily in Vancouver. It’s famine and feast in consulting. So it’s all good to live somewhere small during the feast, but come famine they want to be near jobs.

    Friend of mine has been travelling the world the last 2 years. Said he’s never been busier. Arguably it’s feast time in tech, but I wonder if they considered that they have to do a lot less feasting if they live in a cheaper place?

  273. It certainly does given that OB is included in Greater Victoria and your premise is that Greater Victoria prices are tied to median family incomes.

    These stats break down when you try to dig that deep. Both due to data quality when you have so few respondents, and because in a retirement area income means less and less.

    People who five years ago could buy in an area with no commute can no longer buy.

    Yes. Just a different way to think about it. Your grandparents could not afford to buy in a luxury area so they bought in everyday Oak Bay in a sleepy town. Today they could also not buy in a luxury area, so they would buy in an everyday area like Langford if they wanted to live in the much bigger city of Victoria, or they would move to Campbell river and buy in an area closer to town.

  274. Any idea how many US buyers are buying into Victoria as they are getting a 30% discount (because of the $) from a few years ago?

    2015 numbers: 0.8% of buyers. New data hasn’t been released yet.

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