April 10 Market Update

Weekly stats update courtesy of the VREB.

April 2017
Apr
 2016
Wk 1 Wk 2 Wk 3 Wk 4
Unconditional Sales 255
1286
New Listings 419
1590
Active Listings 1661
2594
Sales to New Listings  61%
81%
Sales Projection 990
Months of Inventory

2.0

Holy moly 470 comments on that last post.   That’ll teach me to leave the same post up all week.

Thanks to everyone that came out for the HHV meetup last Friday.  Pleasure meeting you all.  As the event tagline promised, there was beer, housing, and lots of bullshit.    Let’s do it again sometime.

We are now getting extremely close to the conditions of last year.   While we still have some 36% fewer properties on the market, sales are down 23% as well, so the months of inventory are about the same, and will likely match last year by the end of the month.   We are also no longer posting stronger sales/list ratios compared to last year.   It seems there is a limit to the level of activity that can be sustained, and this is it.

Marko Juras mentioned at the meetup that activity is down somewhat in multiple bid situations.   Places are still going for big over-asks, but now there might be half as many bids as last year.   Buyer exhaustion?  Or just a response to the higher asking prices?

Some problems with the date alignments on this chart recently.  I’ll fix it for next week.

A common argument for increasing prices is that there is a lack of land in Victoria.   While true that we are land constrained in some areas (plenty of space in Langford, and plenty of space downtown to densify), I think the market emotions have a more powerful effect than land constraints.   As Steve Saretsky points out, condos in Abbotsford are up 38% from last year.   No shortage of land out there and no shortage of construction.  Speculation overpowers all.

It’s OK though.  Ask most Canadians and they will tell you that house prices never go down.    After Fukushima we got some radioactive seaweed here in Victoria.  What fallout will there be here when Toronto collapses?

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312 thoughts on “April 10 Market Update

  1. The rental tax credit seems more likely to be an attempt at vote buying than a way to fix things.

    The grant is regardless of how much a renter spends on housing or their income – silly way to spend 200 million a year. Better to put it into financing more purpose built rental or the already existing rental subsidy program that is means tested.

    “If homeowners can have a homeowner grant, renters should be able to have a grant as well.”

    Seems illogical given that the HOG is funded by property taxes paid by homeowners and no funding has been identified for the rental grant. They should have means tested the property tax deferment program instead.

  2. Hinging on the assumption that a rental tax credit will change people’s rental choices. I don’t buy it.

    All units will still be filled

    We’re talking about demand and rent changes. If demand were to shift up the lower end sees less demand unless there are suddenly more renters. So instead of 3% increases across the board maybe the high end increases by 3.5% and the low end at 2.5%.

  3. And if renters move up to the higher end, that means demand is reduced for the lower end

    But in a fixed rental supply, that’s not how it works. All units will still be filled.

    Basically, the tax credit shifts the demand curve to the right but supply is fixed. So you end up with higher prices overall.

  4. I think they are robots that Leo made as part of the automation here….

    The only real people on this blog are the ones you met at Penny Farthing. Everyone else is a script. Sometimes those scripts get into a loop…. I’m not perfect.

  5. Wolf

    No one makes 500% on their whole portfolio at his age in one year. Total BS. Risk comes off as you get to that age to protect the principal.

    Of course there are people who do well but let’s deal in reality about the return on the whole portfolio.

  6. What if every renter were given $10,000 per year. They would spend some of that extra money on consumption, some of it on savings, and some of it would inevitably be spent on competing with other renters for the rental unit that they want.

    That’s not rents going up, that’s more demand for higher end rentals. And if renters move up to the higher end, that means demand is reduced for the lower end. Zero sum game.

    Realistically a rental tax credit is not going to convince anyone to move up to a higher end rental.

  7. @Stock market idiots
    With all that cash he’s saved from not having a down payment he’s probably raking it in big time. Add some zeros there Gwhack. I know several people who have very high stock ROI’s. These people exist, and don’t you think they’d end up on a website like this come time to buy a house?

  8. @Bingo,

    What happened to the grammar thing?

    It became a “he who is without sin cast the first stone” sorta thing.

    Any of these look familiar?

    And therefor….

    …both of which would slow down or recovery or worse.

    So presumably 50%+ of the shares are owed by a Canadian, right?

  9. Yep 500%. You are my hero. You had your 10 dollars in a marijuana stock and now you 60 dollars. Woo wee drinks on no one.

    If you do as good this year maybe you can buy something pretty for yourself.

  10. gwac, did you miss the biggest stock market move the last year ? I didn’t. 500% and counting. 😉

  11. AG if that was the case I would have killed myself a long time ago for being the stupidest person on the planet

    Your move, Hawk. Make it worth my while. 😀

  12. AG if that was the case I would have killed myself a long time ago for being the stupidest person on the planet for missing the biggest $ housing movement of all time in Victoria.

  13. Hawk-n-Gwac: the perfect duo of online hatred.

    Its it possible that Hawk and Gwac are actually the same person? Or at least 2 personalities belonging to the same individual?

  14. Hey Hawk. I am not a landlord.

    Yep all the rent you have paid over 10 or 15 year. What a wise use of cash. Flush flush flush. Your landlord must love you.

    Hey hawk seen 5 year yields lately. Lol

  15. Completely unconnected to the tax credit. If the rental market is tight enough to justify rent increases then rents will increase. If it isn’t then rents won’t increase. How much money renters have for rent is not a factor.

    If a fixed number of people are competing for a fixed number of rental units, then the tax credit will certainly push rents higher. Probably not by the full amount of the tax credit, but a proportion of it.

    Think of it this way. What if every renter were given $10,000 per year. They would spend some of that extra money on consumption, some of it on savings, and some of it would inevitably be spent on competing with other renters for the rental unit that they want.

  16. Seriously Barrister , we all know the high priced houses arent selling because the wealthy know it’s a bubble or the they are tapped out. All the pumping of the greatest place on earth doesn’t change that fact. Gwac is about the only fool left buying over priced lots.

  17. Barrister ,you need to learn how to take a joke. AG and gwac have absolutely zero skills clueing in.

    BTW gwac, as an angry slumlord you have zero awareness that many renters like me have nice stashes of cash that’s safer than an illiquid bloated house. Cash is king when a bubble is about blow. Wait til the new rules hit. 🙂

  18. Local Fool:

    You have a point. It is like the “Odd Couple” suddenly having a food fight.

  19. Leaving Hawk aside there seems to be a notable slowdown in the upper end of the market at least in Victoria (dont know about Saanich). But perhaps it is simply that a lot of houses have just been priced on a unrealistic level to start with. Some of it might be people saying “Sure I will sell if some idiot will give me three million”.

  20. With all respect to Barrister, Gwac, don’t ever ignore Hawk. If you two stopped flinging mud at each other, I wouldn’t come here half as often.

    Hawk-n-Gwac: the perfect duo of online hatred. That, or an angry bird of prey served with a side of guacamole. 😛

  21. Barrister

    Hawk making things up time to time. Try every post. 🙂

    I hear Hawk is writing a book. “How to spec on house ownership and fuck yourself and than complain on a blog for 10 years”

  22. GWAC:

    Hawk is back to just making things up again. He does that from time to time, just ignore it.

  23. Hawk what are you talking about? What margin call.
    Never used margin ever. Typically NDPer. Dislusional, out of touch and a big complainer.

  24. Cadborosaurus – my point is that in a very competitive rental market (like this one), that extra money will likely just end up in landlords’ pockets.

    Completely unconnected to the tax credit. If the rental market is tight enough to justify rent increases then rents will increase. If it isn’t then rents won’t increase.
    How much money renters have for rent is not a factor

  25. Funny how the landlords whine about the renters getting a government freebie, but when they actually get one the landlord automatically thinks it’s his to take. No wonder these slumlords they are AKA as greedy assholes by tenants.

  26. There has been no major market change so why should there be any margin calls. Hawk, stop sounding silly.

  27. Barrister,
    The highly leveraged are getting margin calls. AG and gwac’s phones should be ringing soon. 😉

  28. There are now 15 SFH in Oak Bay between 1 mil and 2 mil. But there are 18 asking 2 mil or over. There is something wrong with this picture.

  29. Cadborosaurus – my point is that in a very competitive rental market (like this one), that extra money will likely just end up in landlords’ pockets. Which is fine by me, but I’m guessing that’s not really the point of the tax credit.

  30. I mean you could try to bump rents, your current tenants could take you through the wringers at the tenancy branch if it’s more than the legal rate increase set by the province each year, or you could try to charge new tenants a higher price and see if they’d pay it next year when rents correct.

    $33 is 4% of $825. So if your rent is more than $825/mo your landlord can up your rent without repercussions.

  31. Giving renters more money is essentially giving landlords more money though.

    It’s just another treatment of the symptom. And at $33/month, it’s not a very effective one.

    Although not as deep, the NDP have developers in their pockets as well, so they won’t be offering global solutions to the housing issues either.

  32. AG I’m not following why you’d bump up all of your tenants rents. Are you jealous of the measly tax credit being offered to the have-nots? I mean you could try to bump rents, your current tenants could take you through the wringers at the tenancy branch if it’s more than the legal rate increase set by the province each year, or you could try to charge new tenants a higher price and see if they’d pay it next year when rents correct.

  33. Wait til Justin changes the rules, will make the tax on the wealthy look like nothing as the market caves on ability to borrow. 😉

  34. What happened to the grammar thing? No one is going to mention “of coarse”? I thought that’d be like fingernails on a chalkboard to some of you.

  35. We tried to buy 2376 Central in 2008. Price less than 50% of current IIRC. Nice house in great location, but holy cow on the price.

    I think that’s going to sit on the market for a long time. I’d be amazed if it sells for that.

  36. $400 renter’s tax credit may offer relief to some

    Does that mean I’ll be able to bump up all my tenants’ rents? Maybe the NDP aren’t so bad after all…

  37. Wow, Christy is going to stay the course and drive BC to the moon with more foreign owned condo towers and where the corrupt can do what they want as long as they keep greasing her palms. At least the NDP have a plan that can be tinkered with.

    Christy blew her brains on out on LNG and families last. She has nothing left in the tank to offer, other than more RCMP investigations of shady money deals as per usual.

  38. We tried to buy 2376 Central in 2008. Price less than 50% of current IIRC.

    Nice house in great location, but holy cow on the price.

  39. Really falls short for middle class buyers though

    If they remove that many people from the rental pool wouldn’t that make housing cheaper on account of there being less incentive to buy a place to rent it out.

  40. The NDP came out swinging with today’s platform release but it pales in comparison to the Greens housing strategy. Good thing the NDP is promising a referendum on proportional representation to woo the Green supporters this time, maybe they’ll swing NDP. I’ll just point out the things relating to housing:

    2% speculation tax on only foreign investors in BC Real Estate… this could have been applied to all speculation IMO. We have plenty of homegrown profiteers ruining this market let alone foreign ones.

    $400 renter’s tax credit may offer relief to some. Closing loopholes on fixed term tenancy evictions and rate hikes is long overdue.

    Over 100,000 new affordable housing / co-op units built over the next 10 years. Really falls short for middle class buyers though (don’t we just get screwed from all angles?)

    https://www.bcndp.ca/platform

  41. Gwac, did you see that chart that said “Eliminate Clarke’s LNG fantasy fund”?

    Rather brash humor to use. Made me laugh.

    Wonder if the liberals will have similar jibes at the NDP…I think this election is going to be a slug-fest compared to the last one.

  42. Wow NDP is going to hand out goodies for everyone. The top 2% and businesses will pay for it and they will still run a surplus. Wow is all I can say. The good times will be here soon.

  43. BoC hasn’t denied the role of low interest rates in housing issue. They basically stated their hands are tied since “adjusting interest rates is a ‘very blunt tool’ which has widespread effects.” And therefor, “That leaves it up to other policy makers to quell the growing concerns.”

    It’s true. However, if the criteria for raising rates is inflation occurring broadly throughout the economy – if more and more capital is being tied into unproductive RE, where is the money going to come from to drive that inflation?

    If you follow this down the road a little bit – having good exports due to a low dollar isn’t going to help much if the domestic beneficiaries of this activity have to allocate huge amounts of income to housing. It’s like food, like water. A basic necessity. In an economy where consumption is a large part of GDP, people will always cut back on that consumption in favor of ensuring they can pay for food and shelter. Excessive monies to housing dampens broader consumption. Given that most mortgages in this country are recourse, a deleveraging event has an elevated risk of being very long lasting.

    There’s no doubt it’s not “just” a BOC issue. The problem is, their refusal to do anything about it. They look to governments. The feds say “our levers are too broad”, and then blame the province. The province blames the municipalities. The municipalities blame the province etc, ad infinitum. Standard blame game, which is depressingly common when these things occur.

    It makes me ranty. That and the fact that the bread for my sandwich today was stale. I hate that.

  44. @Bearkilla
    I’m neither a bear nor a bull, if you want to attach labels. Can make money when the market goes up and down – might be opportunity here if it does the latter. If you’re a bull I’d expect you to be the first buying if there’s a drop. Nobody’s getting priced out here.

  45. And this is why we can expect new taxes and regulations coming. Rates need to stay low because wages haven’t budged. Rising wages are the true inflation that affects rates. So…. expect some meddling. Province wide foreign buyer tax? Flipper tax? Who knows, but every action has an equal and opposite reaction. This spike doesn’t come for free….

  46. AG

    Market controls them by interpreting future growth inflation, and added government risk. . BOC can babble all they want at the end of the day the market adjusts to the reality of what is really happening.

  47. @Local Fool

    BoC hasn’t denied the role of low interest rates in housing issue. They basically stated their hands are tied since “adjusting interest rates is a ‘very blunt tool’ which has widespread effects.” And therefor, “That leaves it up to other policy makers to quell the growing concerns.”

    There is a whole lot more to the economy than housing, so ramping up rates to quell that in a few heated markets may ruin our exports or hurt other industries (not to mention housing markets that aren’t hot). The goal is to keep inflation steady and currently to keep the CAD low for export reasons. Ramping up interest rates now would slow inflation and pump up the CAD, both of which would slow down or recovery or worse.

    I’m not saying it doesn’t have to be dealt with, but BoC is the wrong level.

    Why not set a minimum mortgage rate federally? There are lenders out there offering Prime -0.85% currently. That’s absurd. What if the lowest rate a lender could charge was prime?

  48. I think inflation or the Consumer Price Index doesn’t factor in RE price rises. If it did, we’d have a much higher inflation number, esp. considering what’s going on in TO. Kind of ridiculous too, b/c people there are having to pay higher and higher rents as well. Therefore, those on fixed income’s like OAS/GIS are getting tiny increases that probably aren’t keeping up with the real rise in the actual cost of living…

  49. Bonds rates are not controlled by the BOC

    5- and 10-yr yields might not be controlled directly by the BOC, but they are strongly influenced by it.

  50. Take the BOC out of this. Bonds rates are not controlled by the BOC. Even if they raise variable rates. Only makes 1 to 5 years more attractive and does not change the housing market. It takes inflation and growth the get bond yields up.

    You want growth get rid of regulation and cut taxes big time instead of raising them like those bozos in Ottawa are doing.

    Soon everyone will be stoned and not really wanting to work very hard if our liberal gov has its was. Don’t worry though the 1% will pay for everything. 🙂

  51. Rant time! 🙂

    This is regarding the Central Bank’s choice to leave the rate at 0.5%, and their disavowal of RE speculation being connected to the former.

    The problem with Steven Poloz, in my opinion, is his failure to admit a connection between the BOC’s policies and what is happening in our RE markets. The BOC’s mandate is to keep inflation around 2%, with inflation being quite simply, the price increase in all goods and services in an economy over time. There hasn’t been much inflation he says, hence we keep the rates low. In the overall economy, he’s right, inflation is low. This is where his disconnect is.

    Personally, I think a 0.5% interest rate is causing a misallocation and bias in capital in the RE markets – that’s where the inflation is concentrating, rather than it occurring more broadly throughout more productive sectors of our economy. Perhaps he’s hoping that the rest of the economy will “catch up”, and make the problem go away. I really don’t think that’s likely to work; in fact I think this imbalance will only get larger and larger, to the point that there’s not going to be a pretty way out. In some areas of this country, that point has long been passed. Australia is facing a similar reality.

    And watching Steve say that low interest rates do not cause speculation, well he’s right again. Speccers care about raw gains, not interest rates. But just like before, the devil is in the details.

    The low interest rates provided the platform, the impetus, the enabling factor for this whole mess to get started. Personally, I think the BOC’s dismissal of low rates as a causal factor is a form of “cover your @$$”. They aren’t stupid. They know exactly what’s going on, and that there will be a deleveraging.

    There’s an imbalance here, folks, and despite what many people think (some without even realizing it), these things can’t go on forever. But can-kicking is a true Canadian past time. Oh Canada, the true north strong and free, indeed.

    That’s all.

  52. I think John was saying that those speculators = Donald Trump = make $$ flouting the rules = wins some/loses some with lawyers. “Bad (or sick) guy!”

  53. Do you think Donald Trump made it this far on his brains or that he had a good legal department for his real estate deals?

    Scheming and litigating your way to success rarely works.

    Besides, do you hold up Donald Trump as an ethical businessman? His corporations have declared bankruptcy numerous times, presumably with awful consequences for their creditors and employees.

  54. Yes a lot of flippers find ways around taxes with cash deals, even LOCs, to cover deposits, eg., another G&M article from September:
    “Federal figures reviewed by The Globe and confirmed by the tax agency show that auditors discovered $14.3-million in unpaid taxes from 339 individuals and companies last year through increased scrutiny of flips and other real-estate transactions in Vancouver.”
    or
    http://www.cbc.ca/news/canada/british-columbia/chinese-real-estate-investor-to-repay-millions-1.3998380
    “purchased three homes in Surrey worth $1 million, $2.3 million and $3.1 million, while his wife paid $2.5 million for a Vancouver house … one of the homes in Vancouver was bought following a withdrawal on the line of credit.”

    Also Stephen Poloz just said yesterday:
    http://www.theglobeandmail.com/real-estate/the-market/toronto-and-hamilton-home-prices-soar-to-march-record/article34679288/
    “’There’s no fundamental story that we could tell to justify that kind of inflation rate in housing prices … Demand is being driven more by speculative demand, or investor demand, as opposed to just folks that are buying a house,’ he told reporters in Ottawa.”

    “But if you’re buying it on spec and you only flip it … then you stand to lose if there is a correction, and maybe a significant amount of money. So that’s the kind of risk assessment that these buyers – and their lenders – need to ask.”

  55. You have 1.7 million cash? If you don’t and you aren’t talking about yourself I see no point in discussing something you’ve made up and keep trying to make some weird point with that you’d be better to just come out and state.

  56. You’d have to make sure the gain would be worth the resale. Might be after you pay the resale costs and interest penalty to discharge your new mortgage and the capital gains tax on the profit if this is deemed to be a business transaction if prices went up 20%.
    But this is the scenario whether you went for a long closing or not. If you make 20% in six months you can sell and make a profit – as some people appear to be doing in Victoria right now. In most markets you’d lose money doing this.

    Let’s assume a cash deal and no capital gains payable rather than getting bogged down by obfuscations to redirect the discussion away from the point being made.

  57. Here we go again on the ethical mud slinging. Seems anytime AG wants to shut down a discussion he reverts to ad hominem attacks.

    Is it unethical to discuss a possible down side to accepting a long completion date with a low down payment? Or to discuss how likely sellers are willing to invest additional time and money in suing.

    Do you think Donald Trump made it this far on his brains or that he had a good legal department for his real estate deals?

  58. The deal completes in April and you sell the home a week later. Who is entitled to the gain?

    You’d have to make sure the gain would be worth the resale. Might be after you pay the resale costs and interest penalty to discharge your new mortgage and the capital gains tax on the profit if this is deemed to be a business transaction if prices went up 20%.

    But this is the scenario whether you went for a long closing or not. If you make 20% in six months you can sell and make a profit – as some people appear to be doing in Victoria right now. In most markets you’d lose money doing this.

    If you had a crystal ball this would be a good way to make money. If you didn’t, it would also be a way to lose a lot of money.

  59. 2376 Central seems laughably overpriced to me…

    I disagree. It’s a livable house on 10,000 sq. ft., in Oak Bay a block from the ocean. There’s a store and cafe just up the street and a school another block away.

    It’s expensive to me and you, but it’s almost twice the size of most lots in Victoria, and it’s the land, not the houses that are causing the price premium.Otherwise those bidding wars in Golden Head wouldn’t be happening.

  60. The assignment clause in the standard contract to purchase relates to while the contract has not been completed.

    Once the sale is completed the new owner is free to sell the property immediately. If there is a long closing date and the property appreciates during that time then that’s to the benefit of the buyer not the seller.

    For example what happened last year. You could have bought a home in Oak Bay in December 2015 at $700,000 with a closing date in late April. During the interim house prices appreciated 20 percent. The deal completes in April and you sell the home a week later. Who is entitled to the gain?

  61. South OB… I’m starting to notice that area for some reason has a higher price premium

    Didn’t someone point out last year that South OB has a higher land value per sf than Uplands?

  62. Even if I had $1.5 million to purchase it

    They want $195k more than that… plus PTT…

    But, if houses start selling regularly under list buyers start to notice. I believe that days on market is perhaps a more meaningful number.

    Houses are going under and over list… or right at list… Days on market is sometimes hard to determine when lister’s keep ‘re-listing’.

    I agree with you that it seems really overpriced but in my eyes almost all of the properties are selling at outrageously high prices. But still overpriced for this market today.

    But, Barrister, it’s in South OB… I’m starting to notice that area for some reason has a higher price premium, even compared to other parts of OB (like the former ‘working class’ part where I live). I did notice, at night time, it’s extremely quiet down there, and with that new LED lighting you can see all the stars. It’s so quiet there that if I was to turn on my stereo I think the entire ‘hood would hear it. They’d be grooving then 😉

  63. 1217 Hewlett Place – I’ve seen less sophisticated mechanical rooms in small water treatment facilities. Even if I had $1.5 million to purchase it, I’d be wary of the O&M costs for that place. I know, I know, it’s pretty new and those are likely 10+ years down the line, but still…

  64. Some of us work for a living Barrister, plus who can keep up with all the price slashes these days. Someone in the construction bizz I was talking to was noticing things are turning south as places they have reno’d aren’t selling. The winds of change coming down your way. 😉

  65. AG:

    I agree with you that it seems really overpriced but in my eyes almost all of the properties are selling at outrageously high prices. But still overpriced for this market today.

  66. I am surprised that Hawk missed the 200 under list. List price is meaningless of coarse. But, if houses start selling regularly under list buyers start to notice. I believe that days on market is perhaps a more meaningful number.

  67. 2376 Central seems laughably overpriced to me. Nice lot, decently sized house, and a good location. But $1.7m for an old house without any recent updates? I would have guessed closer to $1.2m.

  68. Crazy if it goes for that much more. Very little upgrading done. Literally paint and nice staging. Great area though, aside from the neighbour that feeds the seagulls, crows, racoons, rats and any other wildlife that makes it onto her property.

    Maybe now I’m really glad I didn’t get that other house on George St back in Jan ’16… That, and people camping in their cars?

    Here’s another OB sale yesterday – Hawk will like this one – almost as much as he loves that graph he keeps posting over and over. It’s strange b/c the house is very similar to Oliver St and listed for the same $1.695k (I know, ‘listing price is meaningless’- John Dollar). However, this one went for $1.5m (and was on the market for much longer than six days) 1217 Hewlett Place. It was a 2015 build, on only a slightly smaller lot and house than Oliver St. Now I’m wondering if they got a deal, or did the Oliver St. people over pay?

    New listing today, by Rattenbury’s business partner – P. Leonard James. Again, listed at $1.695k. 2376 Central Ave. On a bigger lot than the other two that just sold.

  69. Agreed Andy7, Ross Kay has a good read on how markets function after blow off tops. It’s the classic bull trap that sucks them back in thinking all is OK. Meanwhile the smart ones realize the once in a lifetime lottery win is slowly dripping away as it heads toward the fear zone.

  70. “Who knew that Just Jack / John Dollar was so unethical?”

    Who knew AG and a few others are so naive to not see John is just turning your crank ?

  71. Totoro not sure if you saw this part of my post:
    The new rules BC has about assignment clauses may not be enforced properly or are just being ignored. Hence we still get shadow banking, along with flipping

    Yes the article was from Feb but it’s still happening. See articles with lawyers like Christine Duhaime quoted.

  72. The only speculation JJ pointed out was the price appreciation or depreciation speculation on a long closing. Not sure if he was also wanting to flip the house, but he never mentioned it.

    If he wants to flip as well and is using a realtor the assignment rules will be enforced or the seller will have a right to sue the realtor and the buyer for any profits made on assignment. I made an offer with an assignment clause for a third party and it triggered the clause – in order to get seller consent for this any profits from the assignment would have needed to have been paid over to the seller and this is standard in all realtor.ca purchase sale contracts.

    That article from February 2016 you are quoting is prior to the time the new rules came into play in September 2016 to deal with exactly that situation.

  73. Same as caveat’s post on the house on George St flipping so fast. It would be great to see more brainstorming instead of tearing apart someone’s opinion.

  74. I think there’s a misunderstanding of what John Dollar said. He was talking about what a speculator would do. ie, wtf happened with the 1.7M house.

    Speculators flip. Here’s John’s words:
    “Of course no one on this blog would ever do such a thing. But if you are a speculator this would just be a business decision. Better the seller gets screwed over than you.”

    The new rules BC has about assignment clauses may not be enforced properly or are just being ignored. Hence we still get shadow banking, along with flipping
    For more info on the assignment clauses see this article from G&M
    https://beta.theglobeandmail.com/news/investigations/the-real-estate-technique-fuelling-vancouvers-housing-market/article28634868/?ref=http://www.theglobeandmail.com&service=mobile

    Then instead of continuing some brainstorming on why that house is selling for 1.7M people started ganging up one 1 persons opinion.

  75. Who knew that Just Jack / John Dollar was so unethical?

    Advising others to walk away from an agreed transaction is one thing. But advising them to enter into that transaction in the full knowledge that they plan to walk away? That’s deeply wrong. It’s grossly unfair to the other party, and it shows a deep lack of respect for the rule of law.

    It’s also a quick way to get a really bad reputation in business.

  76. He’s talking about flipping it without carrying the mortgage during part of the holding period.

    I don’t see that he’s mentioned flipping the house in his posts at all.

    He stated if prices go up he’d make be making a good return on his deposit with a long closing. Appears to be calculating this return based on the house appreciation in the interim period. Plus there are rules against flipping now that require seller consent and it is the seller who is entitled to any profit.

    His main business idea was you hold it and buy it with a long closing only if prices go up, but walk away from your deposit if prices drop.

  77. here also hasn’t been a large enough drop in the market to execute this type of maneuver since the early 1980s.

    Huh? The point is not for house prices to fall. He’s talking about flipping it without carrying the mortgage during part of the holding period.

  78. Whatever your thoughts on Ross Kay, I did find this conversation really interesting, especially in regards to the low inventory issue.

    In discussing the Vancouver housing market, RK said roughly the following: the Vancouver housing market is currently in Stage 2 of a house price correction.

    In Stage 2, homeowners begin to realize they can’t get those big house prices from 6+ months ago. Homeowners react to that by not listing their homes for sale. Real estate misreads that number and suggests it has something to do with supply which is a myth.

    If you look at the number of listings that are coming to the market vs number of listings coming off the market, then you have an understanding of what happens in Stage 2 of a house price correction.

    Stage 2 is when a re-balance takes place… where a seller comes to grip that they will have to take less money to sell their home — while that change in perspective takes place (approx 2-3 months) people aren’t listing their homes because they can’t get the price they want.

    Reality hits home 3-5 months later and all of a sudden your listings start to bloom again because fear of missing out then switches to fomo of not getting the selling price you want.

    source: http://www.howestreet.com/2017/04/10/can-canadian-real-estate-only-go-up/

  79. Not to mention if it was worth doing you would get sued for specific performance and it has been done successfully many times. Happened in Whistler on a few pre-sale properties where the developer successfully sued buyers that bailed during the 2008/2009 crash after re-selling for substantially less than pre-sale contract.

  80. How about you buy the house at 1.7 million with a long closing date where you don’t have to come up with all the cash until July or August. If property values continue to increase then you’re making a good return on your deposit.

    If property values fall significantly below the amount of your deposit – you walk. The trick is to put as little as possible down as a deposit.

    This is the dumbest thing I’ve read on the blog in a while. I don’t even know where to start in replying.

    Don’t know if you’re in the biz or not – if you are, are you seeing a lot of this? Marko?

    No, people are not dumb enough to do this. There also hasn’t been a large enough drop in the market to execute this type of maneuver since the early 1980s.

  81. 1340 George St in Fairfield sold a couple months ago in February for $810,000. Relisted today for $968,000. The only changes appear to be a bit of interior paint and cheap appliances. $150,000 increase for tiny lot, with an old house with minor upgrades. Wow!!! Which way will it go Hawk?

    Crazy if it goes for that much more. Very little upgrading done. Literally paint and nice staging. Great area though, aside from the neighbour that feeds the seagulls, crows, racoons, rats and any other wildlife that makes it onto her property.

  82. I guess I’m one of those statistical anomalies AG. So far….

    I believe most of the active vs passive comparisons are net of fees. So if you DIY without the fees you have a better chance.

  83. Here’s some new research for our resident stock-pickers.

    “Active mutual-fund managers say you can’t judge their performance against passive benchmarks over short time periods. Is a decade and a half long enough? Over the 15 years ending December 2016, 95.4% of U.S. mid-cap funds, 93.2% of U.S. small-cap funds and 92.2% of U.S. large-cap funds trailed their respective benchmarks”
    https://blogs.wsj.com/moneybeat/2017/04/12/for-90-of-all-stockpickers-a-decade-and-a-half-of-underperformance/

    If you extended the analysis further than 15 years, the underperformance of the stockpickers would likely become even more obvious.

  84. Luke;
    The US economy is way stronger than ours and they will definitely see some rate increases this year, probably 3. We on the other hand will likely see one sometime around Sept only because of a reaction to the US and to help the $C from slipping further and to keep our $ from slipping below 69cents.

  85. Look forward to enjoying some of the wealth that you give back. Classic NDP voter right there.

    I’m troubled by the choices this election (or lack of choices), as I would never vote for Chrusty the smiling clown, but on the other hand, I worry the NDP would trash the economy. My prediction on what happens is this – Chrusty get’s back in, as the left vote is split btwn. NDP and Green. While I won’t be mortified about that, in one way I’d like to see the NDP get in to help people who are disenfranchised more as they havn’t had much help in a long time during the Liberal reign. But – the NDP have been shown to be good at trashing the economy. You can bet all the cranes would soon disappear, and… would we be left with ‘Colwood Corners’ all over downtown? It’s a real predicament.

  86. “Look forward to enjoying some of the wealth that you give back.”
    – Wolf.

    Classic NDP voter, right there.

  87. Luke I like OB too, and agree with what you’re saying about the benefits, but I also find my friends/relatives places special as well, eg., some areas of Cadboro Bay, Gordon Head, Victoria itself, etc. Let’s face it, Caddie Bay is only 5 minutes away, so even having those boundaries seem artificial.

    Last summer I went to the beaches up in Gordon Head lots b/c I have a dog and Willows beach is only dog friendly in the Oct-April period. The beaches up there are also nice and quiet. Yes, there’s lots of great area’s nearby, including Dallas Rd which is also awesome for dogs. And, uplands park opens up for dogs again in July. There’s also a pretty awesome park out in East Sooke (East Sooke Park). Let’s face it, basically most of the Capital region is pretty darn awesome (love it when that pisses some people off).

    If people only think in terms of protecting their neighbourhoods from riffraff, problems are just going to get worse, and eventually “troublemakers” find their way on bus routes or rapid transit to other neighbourhoods.

    Well, the trouble makers aren’t really getting on buses to OB in big numbers just yet, I think the cops here are pretty bored actually, always watching the 40km/h zones, etc. I also get the weekly crime report from OB police from my local ‘blockwatch’ group for OB and some weeks they often say ‘nothing to report’ or they will mention online scams or phone scams. When there is something to report it’s often minor, like someone left their car unlocked, oops. As for rapid transit – that’s a dream we don’t yet have here, but I guess they are building new bus lanes that will get anyone that wants to out to Langford more speedily in the future…

    As for problems w/ homeless/troublemakers, etc. getting worse – long time Victoria people tell me it’s much worse now than it used to be, but I still see it in Vancouver terms and so here to me it still seems much more tame than that. I think, like in Van, the troublemakers will stay concentrated in certain neighbourhoods. For Van that’s the downtown Eastside. For Vic it’s hoods like Rock Bay or (Pandora) Harris green. Anywhere within say 2km of downtown is within their zone as well, but they don’t tend to go further than that, and most of OB is 4km or more away.

  88. As for Ten Mile Point. There have only been 3 sales there in the last six months ranging from 1.1 million to 2.6 million.

    That’s not enough data to make any kind of judgement. But Ten Mile Point isn’t the only area with the physical characteristics of large lots and ocean views. You find those physical characteristics in the neighborhoods of Queenswood and Arbutus.

    Take an objective view of your property. What are the physical aspects of your home that would appeal to a prospective purchaser? It could be that you have a large lot or the house is newer or it has waterfront. Those are the aspects that define the target market for your property and not necessarily that your home is in Ten Mile Point. Because if someone is looking to buy in the next few months they are not going to limit their search just to Ten Mile Point they are going to look at properties that meet their wants like a big lot or a newer home or water front in adjoining areas too.

  89. Lots of long-winded posts from tot’s. Gather ’round folks. Bring a pen and paper so you don’t miss the gospel.

    Looks like some of you might be poised to take it in the face come election time. Probably see an increased number of listings from here on out in addition to the normal spring increase. Only need a seed of doubt/change to spark selling. Look forward to enjoying some of the wealth that you give back.

  90. It’s going to be a sad day when Sean Spicer gets the sack. This guy is a natural born comic! He can’t open his mouth without making me laugh!

  91. Not at all. I never held out any belief that I would get the deposit back it was just leverage to make you settle.

    You take the deposit and give up any right to sue me for anything else. That’s what I wanted.

    You see I was never trying to win. I was out to settle.

    But because you are naturally a confrontational person you wanted to ramp things up.

    There is no such thing as a sure bet when you go to court. The Judge and I could belong to the same Masonic Lodge.

  92. John Dollar:

    You are right that most people want to settle. I had this problem once but being stubborn and annoyed I took it to the court room door before the other side gave up. Somewhere along the line some bright light realized that all I did for a living was courtroom fights and that I actually enjoyed them. Knowing the system in Toronto we managed to get shorted listed onto the trial list within six months.

    But in most cases you are right. You should also make sure that your real estate commission is only
    payable upon transfer of the title and not if the deposit is forfeited.

  93. AG,
    Been there, done that, WAY over rated and boring as hell.

    Here’s one for you AG.

    Arrogant
    Ignorant
    Douche bag

  94. Exactly, take the money

    You realize you are contradicting yourself right? Before you were saying you’d countersue for your deposit and act like Trump.

    Really, what happens is the deposit is usually forfeit, whether prices go up or down, if you walk.

    In rare cases where there are additional damages, like prices dropping significantly below the deposit amount as you stated, the seller won’t settle for the deposit amount but will want full compensation for all damages. Of course it would have to be worth it to sue for this, but over 50k and a strong case is worth it to a lot of people.

    It is just not a smart way to do a deal. Even if you think Trump litigious ways are somehow admirable.

  95. There is a lawsuit in BC right now where a deal did not close. Seller kept deposit. Agent is suing seller for commissions.

  96. Exactly, take the money. Is it worth five years of your life and tens of thousands of dollars?

  97. I have been involved in 2 cases where buyers failed to close after removing all conditions. In both cases there were no lawsuits, according to the offer they forfeited and monies were dispersed almost immediately after the reneged possession date, equally disributed to the listing realtor and their client.

  98. They are locking up the deposit in a Trust fund. If the seller wants the deposit they will have to settle.

    No, they don’t have to settle. They can sue.

    Most people at first want to sue, but after getting a couple of invoices from their lawyer they will want to settle. Most never get to court.

    Agree with that, although if your case is very strong a lawyer will take it on contingency and it is much more likely to go to court.

    You’ll have to pay some out of pocket costs but your lawyer’s bill will be subsidized by the buyer. And the want to settle usually goes both ways unless you are dealing with a personality disorder on one side.

    if you are a speculator

    You were talking about yourself here but now you are talking about some mythical speculator?

    If for some reason we are to believe someone doesn’t care about breaching a contract and the legal ramifications of doing so and tying up a 10-20% deposit plus the risk of damages, I would say it is more likely that they have a personality disorder than that they are a business person conducting themselves in a business-like fashion. They’d be the outlier.

    Keep in mind that if someone is completely unreasonable in their conduct a court can order solicitor-client costs – the actual costs spent on legal.

    What you are really saying is that a business person would not care about risk or manage it reasonably and instead sign contracts and decide to breach them and say “sue me”. I’d say you aren’t speaking from experience.

    But, hey, you are welcome to try out your theory and see where it lands you.

  99. Barrister, it won’t end well. When the pompous asses are orgasming over Oak Bay day in and out its best sign ever this thing is close to tanking bigtime.

  100. Total foolishness and nonsense

    Is it? The speculator isn’t trying to win. They are locking up the deposit in a Trust fund. If the seller wants the deposit they will have to settle. It might be five years before this gets to court if it ever does.

    Most people at first want to sue, but after getting a couple of invoices from their lawyer they will want to settle. Most never get to court.

    Like I said at the beginning if you are a speculator you are going to have a thick skin for this kind of thing. Donald Trump didn’t make all his wealth by paying people what they were owed.

    Law suits are just a part of doing business if you are a speculator. Its a litigious business. Someone is always going to want to sue.

  101. Lurkess

    how do these #s even work for people?

    Other than a large down (which you mentioned) sometimes they just don’t work and they are putting money in monthly. If you are expecting the property to appreciate, then maybe that’s acceptable.

    A family friend sold their place last summer and it went up for rent immediately. I did the math on it and they would have had to put 300K down on the 720K they paid to make it break even on mortgage, tax and insurance (never mind maintenance). So it seems most likely they were putting money into it every month.

    That area is now selling in the 800s (house a block away that is comparable just sold for 865K). So, did their investment work out despite not being break even on a monthly basis?

    At current prices you can’t break even renting out a property without a huge amount down. Rents are high, but not that high. With current interest rates you are better off putting a small down payment so you can invest the rest of your capital. The cost of carrying debt is so low (currently).

    @JD

    Thanks for those numbers. Really interesting stuff. If I were in the market that would really help finding areas I like that are better value. I think I could live with High Quadra over GH if it saved me 200K+ for something comparable.

  102. John Dollar, thank you for the data on core neighbourhoods. It’s much more informative than that ridiculously inaccurate Tony Joe article. Why bother even ranking neighbourhoods individually if you only use the stats for large districts/municipalities?

    Could you please post the actual stats for Ten Mile Point, not all of Saanich East, if you could?

    Thank you.

  103. You will probably lose the suit and counter suit plus have costs awarded against you.

    I’m not trying to win. I’m just making the other person’s life hell by dragging out the case and making it expensive for them.

  104. -so sue me and I’ll counter sue for my deposit to be returned.

    Total foolishness and nonsense.

    If you have a standard purchase sale agreement and the conditions have been removed or there is no condition they may return your deposit and sue you for specific performance or damages or keep your deposit and potentially sue you for additional damages.

    If they do sue and you lose, which is almost certain on these facts, you’ll pay your lawyer, pay for their lawyer, and pay for the other losses of the seller (difference in sales price, cost to maintain the property in the interim, loss they had on an offer they made, etc.).

    You might even be compelled to complete the sale on the original terms plus pay damages and legal fees.

    In any event, the seller, if they agree to accept the deposit as damages is going to be able to keep the deposit if you walk and the conditions have been lifted, even if they later sell for a higher price.
    http://cobbett-cotton.com/seller-wins-house-buyer-loses-deposit/

    http://www.fasken.com/files/Publication/acf184a7-7683-461b-81ea-6bd0e12c9f7a/Presentation/PublicationAttachment/7dcce56e-9078-4d61-988b-720ee87ef90e/CLESellerRemedies.SCoval.pdf

  105. -shit happens

    We just don’t want you to get into trouble and have to come back as John Dollarless 🙂

    Not sure you answered my original question, though.

  106. A quick search and I found around 8 properties subject to Court Approval ranging from $200,000 to $625,000. Last month a property that was under foreclosure for three years starting at $5 million sold for 3.3 million.

    It can be the best real estate market but people still get into financial problems.

    -shit happens

  107. John:

    You will probably lose the suit and counter suit plus have costs awarded against you. It is a very risky strategy because you can be held liable for a whole chain of real estate deals following through and not just the one house purchase. Too risky for my tastes.

  108. Oak Bay = OB = Obviously Best?

    If it were the 17th century, I’d challenge you to a duel on that. 😛

  109. John that is a lawsuit if you walk. Not the smartest thing to do.

    -so sue me and I’ll counter sue for my deposit to be returned.

  110. Luke I like OB too, and agree with what you’re saying about the benefits, but I also find my friends/relatives places special as well, eg., some areas of Cadboro Bay, Gordon Head, Victoria itself, etc. Let’s face it, Caddie Bay is only 5 minutes away, so even having those boundaries seem artificial.

    If people only think in terms of protecting their neighbourhoods from riffraff, problems are just going to get worse, and eventually “troublemakers” find their way on bus routes or rapid transit to other neighbourhoods.

    We can’t protect 10 sq km of paradise without thinking about the other similar 100 nearby. Off topic, but it’s that approach that has destroyed the Great Barrier Reef. (I don’t know what to do about Helps though! Our muni’s are too small) OK back to RE.

  111. Local Fool – lots of people like the walkable neighborhoods because that’s part of what attracts them to Victoria in the first place – the small community feel, where independent business is still strong, streets are walkable and have some character and history, and it doesn’t all seem overtaken by highways like so many sprawling cities. But if you want quiet, attractive suburban streets away from it all, there are many more options up the peninsula. Central Saanich and Saanich west are both much cheaper than the inner core, and have all sorts of different options – acreages, agricultural lots (have your own orchard or winery? horses?), waterview, outbuildings (big shop, etc.), etc.

    As an urbanist, these places are too boring and car-centric for me, but there are certainly options for those who see things differently.

  112. Yeah, way to get sued right quick. Prices go down and you get sued for specific performance or the difference between the selling prices. Your deposit may be the least of what you lose.

  113. I don’t really know whether to laugh or cry at people. Yikes, what a joke of a listing.

    They actually paid really close to $1.8m by the time you add PTT to $1.750k

    For SFHs at least, I’d say that Vancouver’s prices are around 4x higher than here.

    Maybe Ron Neal was referencing Metro Vancouver compared to the entire CRD? I guess when you compare the city of Van to the core, prices are 4x higher there. Does that mean we have much more of an upside here?

    In hindsight, I’m actually glad I ended up in OB since Lisa Helps proposed letting people sleep in their cars, Fairfield might not be so nice if that proposal takes hold. Actually glad now, that I lost those homes in Fairfield, one was on George St. Cook St. village I noticed the other day has some graffiti going on, does that mean ‘gang-land?’ Still, it would be tame compared to Van. but perhaps it’s a bit too close to all the rif raf when you are close to downtown that’s something to consider. OB is nicely removed from that.

  114. How about you buy the house at 1.7 million with a long closing date where you don’t have to come up with all the cash until July or August. If property values continue to increase then you’re making a good return on your deposit.

    Don’t know if you’re in the biz or not – if you are, are you seeing a lot of this? Marko?

  115. How about you buy the house at 1.7 million with a long closing date where you don’t have to come up with all the cash until July or August. If property values continue to increase then you’re making a good return on your deposit.

    If property values fall significantly below the amount of your deposit – you walk. The trick is to put as little as possible down as a deposit.

    Of course no one on this blog would ever do such a thing. But if you are a speculator this would just be a business decision. Better the seller gets screwed over than you.

  116. I found that 1.7 for a small house on a smaller lot to be outrageous. Where is all this money coming from. I bought three years ago and prices were nowhere near this type of insanity. Now I am sounding like a really old guy but I am starting to suspect that this will not end well.

  117. Local

    I get where you are coming from but to some the 1.7m to get into Oakbay and have a liveable house without tube and wire and all the other 1900`s fun stuff is worth it. Not my cup of tea but the crowd I work with big time.

  118. Yes that MoneySense article doesn’t make sense. That list might be more to do with where realtors are smelling their biggest profits? Or a mix of random opinions from one realtor. Or just bafflegab to sell magazine advertising.

    #1, the “Top 5” and “Top 25” don’t correspond.

    #2, they want to “find value in neighbourhood pockets that still have price momentum” That means “High Value, High Momentum”

    Even if you assume their red/blue bars are supposed to be scores out of 10, all the hoods’ red/blue scores all come out to total approx the same (11 or 12) +/- 10%.

    There are “High Value, Low Momentum” areas listed as #4, #10, #12, #18 .
    (we could just as easily insert any cheap, slow moving property there)

    They also have “Low Value, High Momentum” listed as #5, #6, #7, #8.

    The only neighbourhood that has “High Value High Momentum” is Saxe Point.

    In summary: you can choose either Value or Momentum in Greater Victoria, but not both.

    Local Fool, thanks for the Aus article – like their comparison to a “perpetual motion machine” 🙂

  119. There are some 47 house sales in Oak Bay that have not closed yet. Some dating back as far as September 2016.

    That seems to be so unusual.

    Years back I came across a deal with a long closing date that gave the seller a long time to find a home. Once the seller put an offer in on another home and the closing date was nearing on the first home the first buyer on the original backed out of the deal because he could not get financing.

    That’s fine the seller gets to keep the deposit and re-sell the house. But the sneaky part was that the first buyer offered over market value. Now the owner was faced with selling the home at a lower price and possibly carrying two mortgages which he didn’t qualify for at the bank.

    Luckily the original buyer came back with a new offer at a reduced price and everything was fine.

  120. I don’t care if something isn’t cheap; I care if I perceive it to be overvalued.

    That 1.7 million dollar SFH is overvalued to me, and by a lot. It’s like asking me to pay $120,000 for a new, base model 330i. I wouldn’t care if it was the last one on earth; I wouldn’t care if I had 100 million in the bank (I wish).

    I forgot 10 mile point. Wonderful area, Wedgewood Estates and along Arbutus. 😀

  121. Its Oak Bay. The roads are paved with gold….You get to send your kids to the finest schools. Your in paradise. That is the cost of paradise and happiness. Being able to say you live in Oakbay “priceless”

    I have no doubt at least some people think so. The power of perception and its monetization. To me, being able to say I live in OB or any other neighborhood has as much value as saying “I had X for dinner”. Who cares – but, many others see it differently.

    Personally, I’ve never liked Oak Bay, Fernwood, Fairfield, and most especially Cook St Village. Ugh. Just no. Most people are puzzled by this, and I don’t know why. Never had the slightest interest, all for me are far too close to downtown. And downtown – don’t even get me started. “Baffled” doesn’t begin to explain how I feel when people express so much desire to live there. The closest I come to liking a more “core” area is Gordon Head, but that’s not really the core. Lived on Kenmore for years. Good memories.

    In late 2015 we were looking at some places in around Dean Park – see for me, that area is my “paradise”. Yet, most would never think of it. Way too far, not close to anything, no one walking the streets etc. But that’s precisely why I like it. 😀

  122. Local

    Its Oak Bay. The roads are paved with gold….You get to send your kids to the finest schools. Your in paradise. That is the cost of paradise and happiness. Being able to say you live in Oakbay “priceless”

  123. 947 Oliver looks nice

    Sorry, I’m not really up on the OB market, so forgive my shock…

    While that’s a nice house – 1.7 million dollars? I don’t blame the seller for being opportunistic, but are there seriously buyers out there that would think that a relatively ordinary, nicely updated home is worth that much money? LOL! It almost seems arbitrary – why not make it an even 2 million? Or really make it seem exclusive and ask for 5? Past a certain point, it doesn’t seem to be about money any more.

    I don’t really know whether to laugh or cry at people. Yikes, what a joke of a listing.

  124. We are literally still half the price of Vancouver!

    Prices here are not even close to half the price of Vancouver.

    A crappy old house on a 6000sf lot in a nice part of South Oak Bay is probably close to $1m now. The same house in Kitsilano would be at least $3m. And that’s for a lot that’s under 4000sf.

    For SFHs at least, I’d say that Vancouver’s prices are around 4x higher than here.

  125. Ron Neal’s monthly report came to my email inbox today. You know, he’s the smiling guy that’s over ten ft. tall with his ‘team’ on the back of some of the double decker buses in town. Whatever you think of him, here’s a snippet:

    “Spring has sprung and the cherry blossoms are out (late this year) and sales continue to be very strong, although down some from last year’s record pace due entirely to the lack of supply. There were 929 sales in March which is 17% fewer than the 1,121 sold in March of last year. That’s still significantly higher than the 734 properties sold in March of 2015.

    We had expected to see an increase in listing inventory as we came into the spring market, but while the number of new listings coming on has increased, it has only marginally outpaced demand. The number of unsold available residential listings as of this writing in Greater Victoria is just 1,223. That’s only up about 10% from this time last month and still less than the number of Realtors in Victoria! The ratio of current listings to sales shows literally just a 40 day supply! The scales are still very much tilted in favour of sellers.

    At this pace, until there is a government intervention or a significant economic event, I would expect to see continuing upward pressure on prices. Over the past year the benchmark price for single family homes in the core of Victoria have increased by 19.1% from $663,300 to now $790,100. We are literally still half the price of Vancouver!”

    The last sentence got my attention… half the price of Van. I know some will call him a ‘pumper’ but that’s food for thought. Also, I was thinking, given the fact that only around 10% of realtors take most of the business, there must be an awful lot of ‘starving’ realtors out there?

  126. Eegad Luke! Every municipality has its pros & cons. Leo just referred to some stats on OB taxes, and then he gets hit by “this is the greatest place on earth!”

    It’s a good thing unlike Garth Turner, that Leo S seems pretty chilled out… and he does a great job running this awesome blog 😉

    I was just pointing out that the graph was one year out of date which makes a big difference when the average assessment in Oak Bay changed by 32% in just one year. That $900k house is now near $1.2m.

    And – it’s the greatest place in Canada, not on earth. I think I can think of a few places to spend the other six months in once I retire (Costa Rica? Canaries? Caribbean?) the question is where, but I’m at least six years away from that 🙂 (freedom 45, or worst case scenario: 11 more years to freedom 50)

    Here’s an OB sale today – almost smashing the $1.8m mark Barrister keeps mentioning… 947 Oliver St. Listed at $1.695k, sold for $1.750k . If you go to google street view you can see from the three year old imagery they put a lot of work into it, and it’s in a great location. Still, there does seem to be a ceiling (mostly) for what people are willing to pay right now. I think in the market above $1.5m people can wait to be more picky (for the most part). I see the last house on the strata cul de sac for $1.6m (2127 Fair St.) is still sitting…

  127. the two that stand out to be as most likely to be “under valued” are High Quadra and Lakehill because they have lower median prices relative to days on market

    Your data is much better than the data the moneymarket article used. They ranked high Quadra 103 and Lakehill 108 out of the 124 neighbourhoods because they applied the same price change and current price (890k) to all of Saanich East including these subareas.

  128. For those blog longtimers, do you remember a few years back when the number one neighbourhood to discuss or cite was Fernwood? It was Fernwood all the time! Nowadays, Fernwood rarely comes up. Just an observation.

  129. As mentioned endlessly on this blog the quicker a property sells the hotter the market.

    So here is a list of neighborhoods ordered by their average days-on-market along with the median price paid in the last six months for Victoria Oak Bay and Saanich East. Note: neighborhoods with fewer sales are subject to a sample variability. For example Central Park, Blenkinsop and Queenswood only had 2 or 3 sales and I excluded them from the list.

    I chose the last six months of data as it provided enough data for most neighborhoods during a period of stable pricing. The order does change slightly when I expand the data to 12 months or reduce the data to just the last 3 months.

    OB Gonzales 77 $1,925,000
    Vi Rockland 56 $1,147,500
    OB Uplands 47 $3,117,500
    SE High Quadra 41 $780,000
    SE Cordova Bay 40 $1,050,000
    OB South Oak Bay 35 $1,275,000
    Vi Fairfield East 28 $929,900
    SE Lake Hill 26 $756,500
    SE Cadboro Bay 25 $1,900,000
    OB North Oak Bay 23 $1,015,500
    SE Broadmead 22 $1,123,750
    Vi Fairfield West 21 $951,500
    SE Camosun 21 $805,000
    SE Mt Doug 20 $862,250
    SE Lambrick Park 20 $1,010,000
    OB Estevan 19 $1,110,000
    OB Henderson 18 $1,051,500
    SE Quadra 17 $739,950
    Vi Burnside 17 $551,100
    Vi Jubilee 15 $735,900
    SE Gordon Head 14 $906,000
    Vi Fernwood 14 $776,250
    Vi James Bay 14 $896,000
    Vi Mayfair 13 $657,500
    SE Mt Tolmie 13 $880,800
    SE Maplewood 13 $775,000
    SE Cedar Hill 10 $777,500
    Vi Oaklands 9 $759,000
    Other 22 $535,000

    This helps illustrate Barristers observation that, for the most part, the higher priced neighborhoods are less HOT than the middle income family neighborhoods close in to the downtown core.

    Now when I look over the list of hoods, the two that stand out to be as most likely to be “under valued” are High Quadra and Lakehill because they have lower median prices relative to the days-on-market to the other neighborhoods. In contrast neighborhoods like Gordon Head, Mt. Tolmie and James Bay are over priced and/or over heated markets.

  130. LeoM, it might well go the same way as the Broadmead 6 month flipper who just had to slash his price. I think the sheep are slowly catching on. The wealthy obviously have stopped buying,just a matter of time til the FOMO get worn out from multiple failed bids and give up looking.

  131. Barrister

    Only so many people that can afford those prices in Victoria so not sure I guess we will have to wait and see what happens in the spring market.

  132. 1340 George St in Fairfield sold a couple months ago in February for $810,000. Relisted today for $968,000. The only changes appear to be a bit of interior paint and cheap appliances. $150,000 increase for tiny lot, with an old house with minor upgrades. Wow!!! Which way will it go Hawk?

  133. Gwac:

    Cute comment. I guess is is out raking her garden.

    On a more serious note, are you getting the impression that the top end of the market is really slowing down?

  134. Totoro:

    For 1.3 million you can still buy a garage in Uplands although you might be able to haggle it down to 1 million. I noticed that as well in the article. I am also not sure where he gets the idea that most of the houses have ocean views. Is this the case of another real estate agent perched on top of the chimney?

  135. It is a rainy day so that means I am off to my woodworking shop. Time to dust off the router and make 40 ft of molding. Also, I really need to sit down and plan out a radiator couver to build. I found a great serving tray with some beautiful inlay work at a garage sale and I want to incorporate it into the couver. There is something to be said for being a bit old and eccentric. The two seem to go together.

    Has anyone else noticed that it has been a long while since anything has sold in Uplands. Prices have not moved but neither have the houses. For that matter, Rockland seems to be frozen in time as well. Still, it is early in the spring market.

  136. He is considering value for what you will have to pay.

    He can’t be.

    They have not accurately identified what you will pay in each of these “neighbourhoods” because they have not used data specific to that particular neighbourhood but to the larger area overall. Ex. he has used the average house price in Oak Bay overall and applied it to Uplands, which is completely inaccurate. If I could pay 1.3 million for an average house in Uplands I’d rank it higher too.

    Rank the neighbourhoods by price and you’ll see what I mean. All of Victoria gets a price of 801k which means they all get the same ranking for price and price change, which cannot possibly be true because we know that Rockland has higher average values than downtown. If an area gets the same price ranking it gets the same momentum ranking and value ranking.

    What this means is that realtor opinion appears to be entirely responsible for ranking differences in neighbourhoods in Victoria, Oak Bay, Sidney, Saanich. Sooke, Esquimalt etc.. And this seems to be appears based entirely on one realtor opinion with no indication as to why where all factors are equal, including realtor opinion, a neighbourhood gets a higher ranking..

    And it gets weirder, many places have no data differences at all including realtor opinion, yet they are ranked quite differently ex. Fernwood gets ranked at 22 while downtown is 11.

    You’ll also see the source citation for the data is missing.

    The momentum bars illustrate that that matters less than people wanting what others want.

    How? I see no correlation with what others want? The momentum bars are the same for all neighbourhoods in an area and appear to be based on the price change data which is also inaccurately applied.

  137. Nice mention in the article of HHV! Typical pumper article yes but I don’t get the confusion Totoro. The rakings are pretty clear. He is considering value for what you will have to pay. The momentum bars illustrate that that matters less than people wanting what others want. The most desirable neighbourhoods with the least value have the highest momentum. He did forget about Vic West though….

  138. March the Teranet–National Bank National Composite House Price Index™ was up 0.9% from the previous month, the largest March rise in 10 years. This increase is attributable to four of the 11 metropolitan markets surveyed: Hamilton (+2.1%), Toronto (+1.8%), Victoria (+1.0%) and Vancouver (+0.9%). The Toronto and Hamilton gains were records for March. Increases were also strong, though below the countrywide average, in Winnipeg (+0.6%) and Montreal (+0.5%). The other five markets, in striking contrast, were all down on the month: Ottawa-Gatineau (−0.1%), Calgary (−0.3%), Halifax (−1.7%), Edmonton (−1.8%) and Quebec City (−2.7%)

  139. yes am wishing rates increase as well. this environment is stupid. we looked at a glandford house but it went for 900 or just over last week w/1 bedroom suite. pretty crazy as well.

  140. then it sells at:

    sold price: 735k
    dp (20%): 147k
    mortage: 588k
    current fixed rate (5 yrs): 2690/mos
    strata: 369/mos
    property tax: 283/mos
    not including utilities, almost $3350

    $1,300 is going to principal repayment though starting at day one; the numbers are bad but not a complete disaster with principal repayment. Move over to Glanford, buy a 735k SFH with a $1,200-$1,400 per month suite, eliminates the strata fees and things are looking a tad better.

    Let’s face it, price are stupidly high, but the insanely low interest rate environment is helping offset the prices.

    My wish would be for interest rates to start creeping up slowly. Not so rapidly that it takes out the market but 1% spread out over two years (0.25% every six months) would really help calm things down imo.

  141. @Leo, I don’t know how to quote your post, but I make no assumptions on whether the new owners will rent it out or not, just that it was a condition to respect the current agreement until end of August. Just seemed like a losing #s game and @ such a high carrying cost, even if the new buyers move in, for the space that you get.

  142. Any advice on how to proceed? I saw Marko’s $1K cash back, and I know 1% realty does cash back too, but their formula works out to about $1K on the price of condo I’m looking at. Is paying full (or full -$1K) just tablestakes for getting a realtor, and it’s not too negotiable?

    A few issues with condos (and condos in you price range) and the market.

    Lockboxes are often not at the building and in the last five years traffic has become worse and worse. Sometimes the lockbox is close to Uptown and the condo is in James Bay. It can be incredibly time consuming to show condos. Mid-day and weekend traffic use to be a breeze, not anymore.

    The condo market seems to have gone nuts too in the last 12 months. If you have a buyer making conditional offers you might have to write 5 to 10 offers before they succeed. If you have a buyer making unconditional offers you might have to write 1 to 5 offers before they succeed. This is also extremely time consuming because if they are writing unconditional in order to do proper due diligence you need to spend about 3 to 4 hours going through the strata documents. The lower the price range on a condo the more due diligence is required in my opinion.

    I personally adapt my model to the market. I use to give more cash back and I use to do 50/50 in terms of listings/buyers. Now I do less cash back and around 80/20 listings/buyers.

    There is definitively a need for more cash back agents willing to hustle to make some cash. I have no idea why so few are doing it. Excellent way to quickly build up a business.

  143. Capital gains on sales over 750k?

    I don’t think this is their proposal. It is a lifetime capital gain tax exemption of 750k. If you buy for 400k and sell for 800k you’ve used 400k of the exemption.

    here is the list of the top 25 areas to buy

    That is a weird article.

    Since when is Gonzales Oak Bay a neighborhood – and what is Fairfield East and West? And how does Uplands come in at the same average price as this mythical Gonzales OB neighbourhood?

    The article appears to be based almost entirely on what Tony Joe thinks. He is the only realtor quoted, repeatedly for each point made. I’d say the methodology and data are both off.

    Ex. all OB sub-neighbourhoods have been assigned the same price and appreciation rates despite being separately ranked – which means Tony Joe’s opinion makes the difference between Uplands being ranked at 11 and North Oak Bay ranked at 27. Actually, looks like all areas were treated this way which makes the findings for sub-area neighbourhoods almost meaningless imo. Correction – after further thought, make that the the entire article is meaningless.

    And since when is value the inverse of price?

    Since Tony Joe said so.

  144. maybe the buyer has a huge downpayment? how do these #s even work for people?

    What makes you think the new owners will continue to rent it out? Rental numbers don’t work, but what defines “not working” if the buyers will occupy the unit?

  145. In fact, Oak Bay has just upgraded their underground pipes to move the Crème de la Crème around, it’s just so thick around here.

    Eegad Luke! Every municipality has its pros & cons. Leo just referred to some stats on OB taxes, and then he gets hit by “this is the greatest place on earth!” 🙂

    Interesting Leo on the PCS vs MLS – you’re right, the ones that appeared today are on both sites.

  146. I guess the greens won’t get anywhere this election sad. They should know that leftists only get elected when they hide their agenda. Capital gains on sales over 750k? There goes vancouver and the island lol.

  147. Reading about other successful people doesn’t mean you’re looking to learn from them …

    I recently read a great biography: Napoleon by Andrew Roberts.

    wondering if anyone has any insights to share on this: 8-1880 Laval Ave …

    No insights, but that would be an amazing location for wealthy Asians to put up their kid: Mt. Doug Secondary is across the street, and UVic is not much farther than a hop across Gordon Head Road.

    someone enlighten me pls unless my #s are really far off, is this a drop in the bucket for some? wish i could look under the hood to see what goes on..

    Me too! I would kill to know who is buying some of these properties (especially the ones in GH that are going for $100-200k over asking) and what their numbers are.

    If we could learn this it would, in aggregate, really enhance our understanding of the market—not to mention satisfy my nosy curiosity.

  148. wondering if anyone has any insights to share on this: 8-1880 Laval Ave, mls 376054, ask 639.9, sold 735

    we went to look at this, but the #s didn’t add up, so we didn’t bother. i was surprised at # of people that were interested, multiple bid scenario of course. i guess i was surprised because of the high carrying cost and there’s not like a suite that can be rented out or anything.

    consider the #s:

    if @ asking price: 639,900
    dp (20%) 127,980
    mortgage 511,920
    current fixed rate (5 yrs): 2342/mos
    strata 369/mos
    property tax 283/mos
    not including utilities, it would cost almost $3k/month.

    the place is currently rented for $2150 until august, possession date not before sept 1st, so the buyer would be out of pocket for about 850/month for the time being.

    then it sells at:

    sold price: 735k
    dp (20%): 147k
    mortage: 588k
    current fixed rate (5 yrs): 2690/mos
    strata: 369/mos
    property tax: 283/mos
    not including utilities, almost $3350

    maybe the buyer has a huge downpayment? how do these #s even work for people? very high income bracket perhaps? someone enlighten me pls unless my #s are really far off, is this a drop in the bucket for some? wish i could look under the hood to see what goes on..

  149. Our lawyer did it… would have been some time just before the sale right? So end of January this year.

  150. This is what I was referencing though…. State an unfavorable fact about Oak Bay and they get all defensive…

    This was just meant as a funny joke! Ha ha :-)… right? Do people on this blog get that??

    of course, everyone’s welcome everywhere… but there’s always jealousy…

  151. The proposal is for a lifetime maximum capital gain tax free on a principal residence of 750k would even the playing field a bit, but there is an inflation issue.

    Loved this, as in the UK, all things done in Canada should be indexed to inflation, otherwise, they quickly become redundant. If we don’t follow suit, we risk getting left behind…

    Luke, Sorry about my candy bar wrapper last time I was in Oak Bay, I knew you’d pick it up for me.

    This shows your true character Hawk, as all the world is all our oyster…

  152. CondoBuyer, we ended up going with a realtor because the properties that we were interested in always sold in a day, and since the PCS doesn’t tell you which realtor is the selling agent

    Look at the listing in PCS/Matrix, enter MLS# on Realtor.ca.. It seems there is no longer a delay on appearance on Realtor.ca, as new listings from today are already on there.

  153. I join you in defending life behind the tweed curtain. Nevermind the jealous ones, they can always visit

    This is what I was referencing though…. State an unfavorable fact about Oak Bay and they get all defensive…

  154. Is paying full (or full -$1K) just tablestakes for getting a realtor, and it’s not too negotiable?

    Everything is negotiable.

    On the topic of cash back agents, there are some as you have seen on Google. I think there is an unmet need there and I may offer something like this in the future but currently I have a real job still so no time…

    Here’s the problem with cash back on the buyer side in this market: You won’t find too many agents that are that keen on it because working with buyers is so much work in this market. It might take months and dozens of viewings and offers and back and forth before you can get a place, so less incentive to offer a huge cash back. On the other hand, lots of hungry agents out there so there is room for negotiation. Good luck!

  155. The proposal is for a lifetime maximum capital gain tax free on a principal residence of 750k would even the playing field a bit, but there is an inflation issue. Someone with a pension relying on their home equity to downsize and retire could be derailed by this at a time when their earning capacity has been almost eliminated.

    Creating an income-based HOG grant starting in 2019 is a bit odd. Without assessing assets this means a couple who has retired early with a paid-off house and a huge stock portfolio will likely get the grant as they’ll be in control of their income and have lower monthly expenses. Meanwhile the family with the higher combined income but a big mortgage and kids and no other assets will not get the grant despite having much lower disposable income and net worth.

    Introducing a progressive property tax system that imposes a surtax based on property value; and allows homeowners to credit rental income and their previous year’s B.C. income tax against the surtax.

    I don’t know what that means except maybe you’ll pay even more tax based on a higher valuation, but you’ll get a credit if you rented part of your house out and maybe a discount if you are lower income? That seems unfair given that higher value properties already pay more property tax. If you want to give an offset on property taxation and encourage rentals in houses it would be better to encourage fast-track municipal legalization first.

    Apply the PTT to the transfer of beneficial ownership.

    There are already enough checks and balances in the Income Tax Act for this in most cases, and it is a helpful structure for ex. parents worried about assisting with a house should there be a division of assets. I’d think it would need to be a lot more targeted not to have unintended negative consequences.

    I like the affordable housing supply measures. About time.

    Enhance the provisions of the Residential Tenancy Act to control rent increases, and to protect tenants from tenure termination that will result in the loss of affordable accommodation.

    Maybe the affordable housing measures are enough to bridge the rental housing gap, but if not, this will likely reduce the supply of non-purpose built (private market) rental housing as the taxation of rental income at the highest marginal tax rate, combined with loss of the capital gains exemption on a suite, combined with inability to control tenure and the really low yields in BC will encourage people to create room-mates rather than tenants if they need the income, and stop renting suites if they don’t need the income.

    Be interesting to see what the other parties propose.

  156. I’m with you there caveat emptor or is it empter! As for the Green Plan it would almost certainly lead to a significant construction/development slowdown which would not only cost jobs but ultimately lead to further housing shortages

    I don’t know about that. All those unemployed construction workers would be in foreclosure by then or would be moving to Ontario or Alberta.

  157. James, lots of people could plunk down 5% on an Uplands home and stick 4 Asian students in the basement and say they can afford the taxes. Then they can say they worked so hard in life and you can do it too. 😉

    Luke, Sorry about my candy bar wrapper last time I was in Oak Bay, I knew you’d pick it up for me. 😉

  158. If you sold your house in late 2016 but the sale was not finalized until February 2017 do you have to declare it on your 2016 tax return?

  159. I’m with you there caveat emptor or is it empter! As for the Green Plan it would almost certainly lead to a significant construction/development slowdown which would not only cost jobs but ultimately lead to further housing shortages.

  160. Long term homeowners I feel should get the full exemption otherwise the capital gains tax is just a tax on inflation.

    It could be matched to inflation from the date you bought your home. I do agree though, it should be tied to an ownership timeline, not the value of the home.

  161. I like a lot of things in that Green strategy. The major thing I disagree with is eliminating the principal residence exemption above $750,000. I would instead eliminate the principal residence exemption for short term ownership (say less than 3-5 years). Long term homeowners I feel should get the full exemption otherwise the capital gains tax is just a tax on inflation.

    Structured that way the capital gains tax would act to discourage flipping and speculation without penalizing the long term build up of equity for long time homeowners.

  162. I’m a long-time green groupie and I’m impressed with this plan. But, the cynic in me says it’s easy to promise the world when you know darn well you won’t have to provide it.

  163. Australian article, but I think the core principles transfer here quite nicely.

    The great housing bubble arse-covering begins

    “Our three economic regulators have finally revealed themselves as the three witches busy tending their poisonous brew while chanting “Bubble, bubble, toil and trouble!” to a nation of tone-deaf property speculators and commentators-come-experts. The architects of our dreaded housing and economic Frankenstein are among the last to formally recognise the monster of their own creation for what it is – a hideous creature that defies all reason, logic, decency, ethics and ultimately, any ability to survive.”

    “Such is the well documented exceptionalism and wilful blindness of the collective Australian bubble psychology, that bubble believers and sceptics alike have come to the physics defying conclusion that Australia has invented an actual perpetual motion machine. The problem with perpetual motion machines? They don’t exist. Can’t you just feel the growing friction rubbing up against the bloated sack of housing hot air? I am amazed at how tenacious the belief is that exponentially growing imbalances can go on forever, when every fibre of the economy must be sacrificed at the altar of housing speculation in ever more dramatic interventions just to keep the damned thing afloat for another few months or years. For just one more election cycle.”

    https://www.macrobusiness.com.au/2017/04/the-great-housing-bubble-arse-covering-begins/

  164. The Greens released a very bold housing strategy today that hits several nails on the head.

    Does it ever. Wow. Thanks for posting.

    That would radically change the BC housing market. In the long term, I think they would be positive changes. Major short term pain and upheaval though, though I think that’s what ultimately needs to occur. I have never thought that expensive housing enriches an economy; personally I think it’s quite the opposite.

    I am curious about their remarks on protecting recent homebuyers. What is “protect”? What is “recent”? How is it payed for (after those speccer taxes are in, people won’t be doing that much anymore)? What qualifies as “negatively affected”? If I were a recent homeowner, I’d want to know these things.

    Good for them for sticking it out there. Still think it’d be a wasted vote, though.

  165. The Greens released a very bold housing strategy today that hits several nails on the head. Sliding scale property transfer taxes, capital gains tax on primary residence sales over 750k, better protections for renters from fixed-term leases rent increases, 30% foreign investment tax province wide, more affordable housing and speculation tax. I’m really impressed with the ideas they’re putting forward to cool the market, too bad they don’t stand a chance of winning. NDP platform will be out this weekend, I hope it mirrors the greens. Libs still handing out 37k loans to first time buyers contrary to the feds doubling down on the debt loads first time buyers are up to their eyeballs in.
    http://www.bcgreens.ca/andrew_weaver_releases_b_c_green_party_affordable_homes_strategy

  166. In my experience, 99% of people who claim they beat the stock market in the long run are either 1. Lying, or 2. Extremely lucky.

    And yet that’s what most people have done here w/ real estate. So currently they’re extremely lucky.
    Guess what the future should bring?

  167. Someone who has a budget of 1.2 million might choose North Saanich, but if they do they are probably looking for something different than what Oak Bay has to offer. Someone choosing Oak Bay might, however, be looking in Fairfield as well. I know we did.

    Equivalent houses in Fairfield are often the same price as Oak Bay. Certainly many of the high end waterfront homes in Fairfield are paying a significant property tax premium for being in Victoria which I see no real benefit to given that they are not experiencing a higher rate of appreciation than Oak Bay and the prices are quite similar. Many people might prefer to have access to the OB municipal yard and pay less property taxes.

    In addition, property taxes are not the only fixed annual municipal costs. There are quarterly garbage, water and sewer charges as well. Each municipality has different rates and the difference can be significant. Victoria has higher water and sewer rates than Oak Bay.

    Thank you Totoro – I join you in defending life behind the tweed curtain. Nevermind the jealous ones, they can always visit 😉 But, please don’t overstay your welcome and remember to pick up your litter 😉 🙂

  168. As evidenced by the tax rates and their representative house. Oak bay is far and above the most expensive on an actual $ basis

    Hi Leo S – saw your chart on tax rates and as an Oak Bay homeowner have to point out – since assessments rose an average 32% this year in Oak Bay – the home now assessed at $900k pays around $4700 (this happens to be almost exactly what my home is assessed at – minus the home owner grant the threshold being increased to $1.6m) as well. My home, assessed at just over $900k will pay close to $4k in tax (after the home owner grant of $570 if factored in). So, your chart shows the average from 2016 and that home assessed at $900k and that home would now be closer to $1.2m based on the change in assessments from 2016-2017 (2017 being assessments from July 2016). (Last year: my home was assessed at $670k – this year it went over $900k)

    Question is: A home assessed at $900k in Oak Bay compared to a home assessed at $900k in Central Saanich (or elsewhere). What’s the difference there (not ‘average’ compared to ‘average’ as we all know that Oak Bay has by far the highest ‘average’ assessment prices).

    Here’s my cavaet on why I chose Oak Bay to live in when house hunting in early 2016 (Fairfield was my first choice but due to severe competition it turned out I couldn’t find a house there).

    In Oak Bay the municipal services are second to none – we have a waste collection facility we can take any type of garbage/recycling to at any time for residents only. We have an ancient oak tree in front of the house that the municipality takes care of. We have regular street sweeping. We have spring/fall clean up for tree /yard debris. I’m tired of counting the amount of different types of trucks that come up the street on collection day. It goes on and on, but lastly – who had the highest increase in equity in the CRD last year? Answer: Oak Bay! 😉 Lastly: Location, location, location! Willows beach, the village, Anderson Hill, Uplands Park, the list goes on and on but it’s by far the best feeling community around here. Judging by the smiles on all my neighbours faces, we’re all doing quite well thank you very much 🙂

    As for aging infrastructure – I’m wondering how old the pipes are on Hawks street? I’m sure the City of Victoria replaced all their pipes and everything is brand new there 😉

  169. Comparison of tax rates is very misleading.

    Should we shed a tear for the overtaxed residents of Port Alberni paying a mill rate more than six times what Vancouver residents pay?

    But when you look at taxes paid on a representative house: http://www.cscd.gov.bc.ca/lgd/infra/tax_rates/tax_rates2016.htm you find the typical house in Vancouver pays 2.3x the tax of a typical house in Port Alberni. On this metric Oak Bay is 5th highest in province and Victoria is 18th highest.

    If you look at municipal taxes per capita (same link as above) you can see that Victoria collects about 20% more revenue than Oak Bay per person ($1417 vs $1195). But the big caveat to that is that Oak Bay gets much more of this through residential taxes per person ($1128 vs $712).

    The reason being is that Victoria has 49% of the total tax burden on business and industry (51% to residents). Oak Bay has 94% of the tax burden on residents for the obvious reason that there isn’t a lot else going on there (and never will be given the NIMBYism there that makes Victoria look positively laissez faire by comparison.)

  170. CondoBuyer, we ended up going with a realtor because the properties that we were interested in always sold in a day, and since the PCS doesn’t tell you which realtor is the selling agent, we had to rely on a realtor to get us the inside scoop before they appeared on MLS. We didn’t pay “more” because the inside scoop got us the best value for what we were looking for.

    For taxes: both overall tax total and tax rate are important when people are buying.

    eg., this Vancouver Sun article is a good comparison of annual tax expenses (Oak Bay is 3rd): http://www.vancouversun.com/news/property-taxes.html

    Then again, sometimes my relatives say, “you’re paying higher taxes in OB” and I’ll respond “yes but my % is lower than yours and you’re now paying new stormwater taxes”

    … mostly to say that you never know what’s going to happen with your taxes – municipalities often find creative ways to increase the rates. It also, for some reason, makes me feel better when I see a lower rate. Dasmo – good idea – hug it out! 🙂

  171. Leo thanks for keeping the site going. This info on here really gives people a head up on what is going on out there. Plus I get a few laughs.

    totally

  172. Leo thanks for keeping the site going. This info on here really gives people a head up on what is going on out there. Plus I get a few laughs.

  173. Hug it out, Hug it out!
    I am more of a nominal guy myself and think comparing the actual dollar value of your taxes is more useful. It’s why I see no value in the HPI. Useless…. Same with the CPI… If it has a PI at the end of it I get skeptical.
    I am ok with real inflation adjusted numbers as it does give an better sense of things over a long time period. In general I would rather just see the actual dollars. Less room for masking and manipulation of the data. This is one of the big values of this site for me. The raw presentation of data and the raw presentation of peoples experience and opinions from many different perspectives. So many places online are selling so it’s gotten difficult to get real information. I mean nominal information….

  174. I did not take it as an attack. I did take this statement as an analysis of the situation, “Not a useful way to compare”.

    I find comparing the same houses across jurisdictions on a price per square foot basis interesting and useful, but when it comes to property taxes, it is the rate that matters to me, not the cost of the house because that is set by affordability and determined by preferences.

    This also may be because I view a house as an investment and you do not. I look at the carrying costs per dollar invested vs. the expected ROI over time.

    The cost of the house is largely determined by area and, as a matter of the practical, I did consider property tax rates and municipal charges as a factor between the areas we were looking at.

    My point is that given that OB has the highest property values does not mean that you are going to pay more, which is the thing most people are interested in. If you are choosing between Victoria or Saanich and Oak Bay in the same price range, Oak Bay is a better deal from a municipal tax and utility/service charge perspective.

  175. If you own a $1m+ property, the likelihood is that you’re not too worried about property taxes. And the people likely to be most worried about it (seniors on a fixed income) can just defer it anyway. I don’t think a slightly higher property tax is going to move the needle in Oak Bay.

  176. Not everything is an attack.

    Totoro was disagreeing with you, in a very civil way.

    If anything, Leo S, you’re the one who interprets too many posts as an attack. Being overly touchy is no recipe for a healthy discourse.

  177. Hey everyone, it’s been years since I’ve been here, but I used to lurk constantly. I was looking at buying back then, didn’t (kicking myself), and now am back looking to buy. I’m the type of buyer who is looking for a very specific thing (specific type of condo in a specific one or two neighbourhoods), and I get all that through my matrix listings. Seeing as I’ve never bought before, I’m interested in having a Realtor involved in the transaction, but given that I can find the property myself, it feels like a gouge to pay full commission to a Realtor who isn’t doing any of the leg work on finding a place, just the sale work.

    Any advice on how to proceed? I saw Marko’s $1K cash back, and I know 1% realty does cash back too, but their formula works out to about $1K on the price of condo I’m looking at. Is paying full (or full -$1K) just tablestakes for getting a realtor, and it’s not too negotiable?

    Thanks!

  178. My favourite documentary about a successful person is Pumping Iron. Total devastation of his competition…. Not always nice but fair game…

  179. “Reading anything about Buffett…”

    Some people read or watch documentaries on many subjects not because they’re looking for tips or strategies, but instead for entertainment. Instead Marko wants everyone to self centre and not share in each others stories and accomplishments, yet is quick to share his story, point out how many garages he has, and disparage others for wanting just one garage. Reading about other successful people doesn’t mean you’re looking to learn from them, and is probably applicable to most material/people on this blog. Some people with little interest in playing basketball would watch a Michael Jordan documentary. I watched the Allen Iverson one for example, but do not care for basketball.

  180. Yes, I remember your post on this, but I disagree with the analysis.

    There is no analysis. Take a house in Oak Bay, take the equivalent house in Central Saanich. You will pay more taxes on the house in Oak Bay because it’s going to be worth more.

    It’s a simple statement of fact. I’m not saying that means it’s better to buy in Central Saanich, im saying the taxes are higher in Oak Bay for the equivalent house. Not everything is an attack.

  181. The important thing is what you’re actually paying on an equivalent house

    Yes, I remember your post on this, but I disagree with the analysis.

    I think the tax rate in relation to your next best option is a much better measure. If equivalent house cost was the measure everyone would want to buy in Sooke so they could get the lowest price per square foot.

    What you are paying for when buying a house is partly the depreciating asset, the house, and mostly the appreciating asset, the land and location. Most people are going to narrow their neighbourhoods down based on budget and what is desirable to them.

    The size of house they can get for their money is a consideration, but many people, including both you and I, chose a house not primarily based on equivalent house cost, but based on the best house available in the desired areas within our budget. As a result, you bought in Gordon Head and not Esquimalt or Langford where an equivalent house would have been much less and the property taxes lower as well as a result.

    Instead, you got less house for your money and pay more property tax by your measure as a result, but you may also experience a slightly higher rate of appreciation if others share your views on desirability that may more than compensate for higher property taxes.

    Someone who has a budget of 1.2 million might choose North Saanich, but if they do they are probably looking for something different than what Oak Bay has to offer. Someone choosing Oak Bay might, however, be looking in Fairfield as well. I know we did.

    Equivalent houses in Fairfield are often the same price as Oak Bay. Certainly many of the high end waterfront homes in Fairfield are paying a significant property tax premium for being in Victoria which I see no real benefit to given that they are not experiencing a higher rate of appreciation than Oak Bay and the prices are quite similar. Many people might prefer to have access to the OB municipal yard and pay less property taxes.

    In addition, property taxes are not the only fixed annual municipal costs. There are quarterly garbage, water and sewer charges as well. Each municipality has different rates and the difference can be significant. Victoria has higher water and sewer rates than Oak Bay.

  182. Property tax rates in OB are the third lowest in the region, only View Royal and North Saanich are lower.

    Not a useful way to compare.
    The important thing is what you’re actually paying on an equivalent house

  183. Reading anything about Buffett and Buffett’s investment strategies is the equivalent of buying a book, “Play basketball like Michael Jordan,” only problem being you are only 5’9”.

  184. I noticed how shitty the roads in Shaughnessy when I was renting in a basement there. Rich people don’t want their roads torn up. And new asphalt ruins that heritage look.

  185. Truthfully, I dont know. Possibly it reflect a drop of Vancouver purchasers with their thick wallets.

    Average house in Van is how much? It makes no sense to cash out there and cash in here for the same amount. The speculators probably know this and don’t go above that price point either.

  186. Property tax rates in OB are the third lowest in the region, only View Royal and North Saanich are lower.

    Property taxes payments are higher on average in OB because property values are higher – not many apartments and some very expensive waterfront and Uplands places. You can own a similar type and priced house in OB or Fairfield/Rockland and you’ll pay a fair bit more tax on the Victoria side and they’ve got their own pipe problems… and bridge payments.

  187. Leo, for accountants you might want to try Maycock & Company on Richmond.

    Speaking of pipes, there was this article about all the “ticking time bombs” all over Victoria: http://www.timescolonist.com/news/local/old-water-pipes-in-capital-region-like-ticking-time-bombs-1.1727186

    I was talking to a plumber about this in Saanich – some pipes are so old there’s no way of shutting the water off, so they use liquid nitrogen to freeze the pipe while working on it.

  188. Jerry interesting fact in Toronto the shitttiest roads were in the richest area for a long time. Bridle path area. It kept people from driving fast. Residents like it that way.

  189. Yes, and at last check, Oak Bay property taxes were already third highest in B.C.

    Paradise doesn’t come cheap 🙂

  190. Oak Bay pipes? I believe those are customarily placed under the roads. Have you not noticed the roads?

    Wifey and I were cruising eastbound on Lansdowne yesterday and as we crossed Cadboro Bay Road she started to killing herself laughing. She got a flashback of a business trip we did to Berlin in the early 90’s. Everywhere we drove on that trip you could close your eyes and judge exactly when you crossed from the former West to the former East when the road dropped out from beneath you and the potholes knocked your fillings out.

    Cadboro Bay and Lansdowne, the new Checkpoint Charlie.

  191. Oak Bay

    Do not fret would assume a grant or 2 from Victoria and Ottawa would be coming to help those poor residents of oak bay with their pipe problems.

  192. in other words, tax hikes coming.

    Yes, and at last check, Oak Bay property taxes were already third highest in B.C.

  193. Horan notes that Oak Bay’s revenue “is insufficient for long-term sustainability.”

    in other words, tax hikes coming.

  194. Looks like you Oak Bay’ers are in for a lot of pain with your pipes about to blow all over the place.

    Keep it clean, Hawk. There might be children reading this.

  195. Leo – we use Lindalee Brougham, llbrougham.ca. I don’t know if you need anything special, but we got very professional but also personable service from her firm. Johnson near Cook.

  196. Wolf, dont waste your time bud. The bull pumpers can’t handle the thought big money can be made in stocks if you’re on the ball and work hard. All the stats bullshit is a smoke screen for their low self esteem to shoot down others who are successfull in other places. Even AG stated it as true the other day but then shoots it down. AKA as a hypocrite.

  197. Agree that it shouldn’t be discussed further. Let’s move on.

    You and I both know.. that’s not how the internets work.

  198. simply that long term real estate gains can be beaten by savvy investors whom are commonplace among us.

    Please show us the math. I posted the link to the calculator. Assertions without math are a tough sell here, as they should be.

    My take is that you have not actually done the math.

    Not sure it is worth continuing any discussion on it – you’ve been asked numerous times already and your reply amounts to, “yes, I have and it is so easy”. However, the stats show it is neither commonplace nor probable.

    It does remind me of Jordan Belfort come to think of it.

  199. Wolf I though so you know nothing other that the documentary. 🙁

    Wolfhawk going to suck.

    You deleted that I am a douche how come??

  200. Never said I was the master or extraordinary, simply that long term real estate gains can be beaten by savvy investors whom are commonplace among us.

  201. Wolf saw the sandwich thing in the documentary also. Anything to share that was not in the documentary?

    I want to be a investor extraordinaire like you please share some info.

  202. “Please tell me what you think that article proves”

    That Buffett gets the cheap breakfast sandwich when stocks are down.

    “Berkshire is simply too big an investor now to find suitable opprtunities”

    So little Joe nobodies are not.

  203. Even Buffett hasn’t been able to outperform the market since about 2000. Berkshire is simply too big an investor now to find suitable opportunities, and he’s probably lost his touch a bit with age.

  204. I’m quickly losing faith in Wolfhawk Capital.

    Shh… don’t tell the monkeys.

    Nit quite, totoro started his paper route at 9.

    Almost. I’m a girl and I was 11 when I got my paper route. I did enjoy ironing my dollar bill tips.

    Please tell me what you are invested in. I want to learn from the master.

    But aren’t unsubstantiated claims enough?

    Is it really that hard to believe people are getting higher percent returns than Buffett

    Short term, no, the market has a had a long run up. Long-term, yes. In fact I’d go so far as to say almost unbelievable.
    http://jlcollinsnh.com/2011/06/02/why-i-cant-pick-winning-stocks-and-you-cant-either/

  205. Also please note that Buffett worked almost as hard as totoro. Not quite, totoro started his paper route at 9.

  206. Wolf I watched the buffet documentary too.lol

    Sorry I don’t believe in imaginary friends or objects so I am not sitting on anything.

    Please tell me what you are invested in. I want to learn from the master.

  207. Halibut “FTB friends aren’t going to use it. Why take out a second loan for a slightly higher down payment when it lowers the overall amount you could qualify for?”

    Because if you’re only putting down 5% and are a savvy investor you can pocket the cash and any gains free for 5 years, and then pay it back in full at the end of the term? Free money.

  208. Buffett made most his cash once he was already rich due to compounding, plus he started early

    The level of misunderstanding is almost comical. And I think maybe you’re confusing absolute and percentage returns?

    I’m quickly losing faith in Wolfhawk Capital.

  209. “All of you crack me up: Unicorns, bullshit, and bananas. Hey – that sounds like Victoria real estate this year.”

    Agreed. I look forward to continuing to hear everyone bitching at one another more.

  210. Is it really that hard to believe people are getting higher percent returns than Buffett, gwax? Buffett made most his cash once he was already rich due to compounding, plus he started early. It takes lots of money to make tonnes money. I’m sure there are many people out there with higher returns percentage-wise than Buffett. Berkshire Hathaway doesn’t even do as well as your lousy index funds. You just think your chosen route is/was and always will be best so anything that challenges that is hog-wash. The only one sitting on a unicorn horn is you, all alone in your big empty second or third property.

  211. 3410 Browning St, which someone suggested to Wolf in the previous post, just sold for $900,000 (assessed @ $700,000, listed for $800,000). John Dollar may think that this hasn’t been much of a first quarter, but it is hard to watch houses like that sell for way more than they would have even just last year. I really didn’t think it could get much worse than last year.

    3351 Doncaster sold 3 months earlier for 1.2 million . 1613 Pear sold for $891,000 in February 3625 Doncastor sold in October for $871,000.

    Prices haven’t changed in that neighborhood in the last three months. And now that we are catching up to the big increase in prices from last year, the year over year increase has shrunk from 29% in February to 17% in March. That year over year increase could even shrink to 10 percent by the end of April and by November the y0y increase could be zero.

  212. Local Food/VicRenter — our FTB friends aren’t going to use it. Why take out a second loan for a slightly higher down payment when it lowers the overall amount you could qualify for?

    On a different topic we recently listed out suite for rent and despite the bears’ “watch out for May when all the students leave town” warnings I can tell you it’s an absolute zoo out there. We must have had 40-50 people inquire but from there we only showed it four times. By the sounds of the emails we received this city could use a lot more affordable housing!

  213. All of you crack me up: Unicorns, bullshit, and bananas. Hey – that sounds like Victoria real estate this year. 🙂

    Interesting info on Browing – thanks. I was curious what it would sell for.

  214. It’s time to give back to the youth and those who missed out gwac, just like the generation ahead of you did in 1990 for you. History will repeat itself once again. The New Paradigm is for suckers like you. 😉

  215. Bitterbear, I posted an article on these scumbags last week. Danger lurks everywhere when they start calling you offering almost free money. Think Wells Fargo.

  216. “The government’s plan is to help 42,000 first-time buyers in the next three years, so it has a long way to go. So far, it has received 1,178 applications

    I would think, or hope – that most FTBs see that “loan” for what it is – and aren’t biting.

  217. Info on the BC first-time buyer down payment matching program from today’s Globe:

    “The government’s plan is to help 42,000 first-time buyers in the next three years, so it has a long way to go. So far, it has received 1,178 applications and 633 of those have been preapproved. As of April 5, 341 first-time buyers from 84 B.C. communities had been approved for the loan and made offers to purchase.”

    So it doesn’t look as though that program can have made much of an impact on prices so far…

  218. 3410 Browning St, which someone suggested to Wolf in the previous post, just sold for $900,000 (assessed @ $700,000, listed for $800,000). John Dollar may think that this hasn’t been much of a first quarter, but it is hard to watch houses like that sell for way more than they would have even just last year. I really didn’t think it could get much worse than last year.

  219. Interesting phone call just now. I got a call from a company, a MIC, asking me if I wanted business capital. The deal is 20k for 5k due in 21 months as a way of “starting a relationship”. I asked what documentation was needed and they said just a bank statement and a credit card statement, no proof of income. So I asked what would stop me from sending them a “good” month and the answer was nothing. I asked what was stopping me from taking the money and instead of using it for business capital, using it for real estate and the answer was nothing, but they are happy to pass me onto their mortgage lending division. Then they said they can send me money every 90 days up to 200% of my monthly sales and they will take 5% of my monthly sales as payment. Anyone else hear from these shysters?

  220. I have seen many a time the seller has forgone their right to any compensation

    I’d have no problem agreeing to that term if it was the best offer received after listing on realtor.ca. All sorts of reasons for assignment and if they do it for a profit that is just fine with me, had my shot.

    This is definitely the case with developers

    As there should be imo. Given the looong closing on new developments I’d be wary of buying in if I couldn’t assign my contract. Same with commercial RE.

    I just don’t see assignment as a huge issue in the market. The new regulations appear to be in reaction to realtors essentially treating houses as options and “shadow flipping” places to known third parties for a big profit. All sorts of potential conflicts of interest there and I’d not be pleased if that happened to me.

    And when contracts are assigned there is a paper trail and legally the profits need to be reported and could be deemed passive business income.

  221. Happy to be that monkey AG. I agree totoro, there’s no shame in any job but people who work those jobs their whole life should be able to own their homes too, whatever they are. Thank you for the kind words vicrenter, I really appreciate it. Wolfhawk Capital sounds great. Hawk if you’re for real I’m in. Our logo could be a wolf-hawk mosaic like those First Nations T shirts. Maybe we can even work a unicorn in there somehow.

  222. Ya Hawk

    I am bag holder. 🙂

    How many times have I seen that graph while the market has gone up 30%. 30 times…..

    Find a place this morning Hawk?

  223. It’s 1990 all over again for you gwac but this time you’re the bagholder. Every generation gets it’s crash, it’s that time again. 😉

  224. Not much of a first quarter this year

    As active house listings in the core have slowly increased while median and average house prices remained stable.

    New listings increased dramatically from February to March. Up by 50 percent! We will likely break over 300 new house listings in the core this month. Historically that isn’t that high for April as we have typically average about 380 new listings in April. But because of lower sale volumes it seems to be enough to keep prices flat.

    But don’t expect any relief as a prospective buyer for a house in the core. Deferred listings/blind auctions still make this one of the worst times to be trying to buy a house.

  225. Lucky monkeys and dreg sifters. The chitter chatter index is creating its own lingo. And Wolfhawk seems like a sure thing. Make sure to pass on the tip to the lucky monkey.

  226. Richard

    That guy hit the jackpot. He will get millions. Stress and all this other crap. United just once it gone.

  227. You can take what you want from it.

    I choose to view it as the topping to a red velvet cupcake. Red velvet is amazing. Red velvet gelato from that outfit in Hillside Mall is amazingly amazing.

    Anyways, sorry. Back to RE

  228. My monkeys are currently employed in the Mayor’s office. They’re too busy for any stock picking right now.

  229. I am so in…..

    I’m not going to make a decision until I see their company logo. Judging books by their cover is so underrated…

  230. AG

    That would be great. I am ready to write a check…..They can hold on to your cash and make 500% while they wait for the housing crash to make another 10000%. I am so in…..

  231. The evidence is clear with properties being “flipped” numerous times prior to completion. I’m suprised RCA isn’t making a big deal about this as huge amounts of cash is exchanging hands with no paper trail.

    There is a paper trail and CRA gets this information from the developers. People do get caught, you just don’t hear about it.

  232. AG that is brilliant. thanks for the laugh.

    Sorry hawk can not be here he is house shopping in Port Hardy…

  233. John Dollar

    Thank you for looking up the numbers for me. You are right that 1.8 was sort of an arbitrary selection for me. but I was looking at price grouping in South Victoria (James Bay, Oak Bay, Rockland and Fairfield). I would have said that three years ago that this was not a relevant segment of the market.

    But, at least in South Victoria they make up over a third of the listings. With one or two exceptions sales in this price range seem to have ground to a halt. So what, if any, is the significance of this? Truthfully, I dont know. Possibly it reflect a drop of Vancouver purchasers with their thick wallets. Or like a couple of the houses on Despard it is mere wishful thinking on the part of the owners.Hawk i will save you posting that this is further proof that the market is crashing.

  234. Yeah, but here we have someone saying they have not only beat the stock market average returns of 6%-7% long-term, they have beat it by more than 20% in tax exempt returns over the long-term and they can keep doing this indefinitely.

    If Wolf’s claims were really true, he would be running a hedge fund by now and giving Ray Dalio lessons in stock trading.

    Still, 30% doesn’t compare to Hawk’s 500% annual returns. Perhaps they could set up a fund together, a la George Soros and Jim Rogers. Wolfhawk Capital has a pleasing ‘hedge fundy’ ring to it 🙂

  235. When does the vendor cease being the vendor?

    I would assume that would be when the contract is completed. Once the contract is completed then the purchaser would be free to re-sell the property thereby becoming the vendor. So let’s read that clause in the contract again.

    a.the contract of purchase and sale may not be assigned without the written consent of the vendor; and
    b.that the vendor is entitled to any profit resulting from an assignment of the contract by the purchaser or any subsequent assignee (the “Assignment Restriction”)

    So as long as you don’t assign the original contract you would be fine.

    So when is the contract completed? When the property is registered? Or when all the monies have been paid and the Deed is handed over to the purchaser?

    Because there is this time gap between the contract being completed and the property registered and that could be several days or even longer.

  236. totoro
    There are three parties that can legally sell RE.
    The owner, lawyers and realtors. In the first two cases they are not bound by the regulations. They can taylor make their contracts to suit circumstances. This is definitely the case with developers and even spec home builders who have their own, often unlicensed sales staff. The evidence is clear with properties being “flipped” numerous times prior to completion. I’m suprised RCA isn’t making a big deal about this as huge amounts of cash is exchanging hands with no paper trail. My point was this has to be addressed, hopefully stopped and at the very least taxes collected on these undeclared profits.
    As to home owners if a contract is submitted to them that they willingly accept in the excitement of an offer where the offer clearly says “the buyers name and or other” which I have seen many a time the seller has forgone their right to any compensation. Yes originally that terminology was meant for executors or power of attorney, next of kin etc. but it is easily abused.

  237. 99% of people who claim they beat the stock market in the long run

    Yeah, but here we have someone saying they have not only beat the stock market average returns of 6%-7% long-term, they have beat it by more than 20% in tax exempt returns over the long-term and they can keep doing this indefinitely.

    Seems unreasonable to buy a house at a high point on these odds when you can just invest your 160k down payment and in 10 years turn it into 2.2 million. At a 4% withdrawal rate you can retire and travel the world or buy in Victoria for cash. And that 160k does not account for any additional savings over the ten years which seem quite likely for a high income earner who has a track record of saving and investing.

    I would not buy a house right now if I felt stocks were a sure bet like this.

  238. totoro, regarding assignment clauses, I don’t know if Richard was referring to this, but here’s more info on one type, also known as shadow banking …
    http://www.theglobeandmail.com/real-estate/vancouver/out-of-the-shadows/article31802994/

    There are just some crazy patterns I’ve seen in Victoria recently that make my spidey senses tingle 🙂

    It might not be happening in Victoria, but there also many reasons why it might be, because it can happen anywhere in Canada (all an “investor” needs is a computer).

    The problem we have in Victoria is that Vancouver gets the bulk of the media attention, and these things distort our markets (along with a lot of other things like domestic speculators, low interest rates, etc).

    Numbers Hack had very useful info from his last post, but it doesn’t address the issue of these hidden/virtiual “RE markets” that are run by unscrupulous businesspeople out of places like Van.

    eg.,
    “The financing Mr. Gu’s companies receive from those clients comes in the form of loans that are not taxable, and that fall within what’s known as “shadow banking” – an unregulated system that has exploded in popularity in China, and now appears to be getting a toehold in Canada.”

  239. In my experience, 99% of people who claim they beat the stock market in the long run are either 1. Lying, or 2. Extremely lucky.

    If you get 100 monkeys to pick a list of stocks, a bunch of those monkeys are going to beat the stock market every year. Over 10 years, maybe you get one monkey still ahead. Is Wolf that monkey? Is Hawk? Who knows.

  240. Totoro, I can’t beat it or you can’t? I do. Perhaps you should work harder, and not assume what you can’t do is not possible.

    The stats say it would be extremely improbable, but maybe you are an exception and invested the equivalent of your down payment in year one and earned over 30% on your money year after year compounded for at least 10 years tax exempt in the stock market. To beat out Warren Buffet consistently would be quite remarkable – and I don’t think his 24% returns are tax exempt.

    Have you really made this much after tax long-term? I have not, I’m more in the 7% range long-term on unleveraged capital, but I’m no stock market whiz, I’m a low cost index fund investor. However, housing in Victoria has had that return. Leverage, when it works, amplifies gains (and losses when it does not). Risk in anything though and I’d agree prices are really high right now so you’d have to be prepared to hold for the long-term.

    I’d stick with the stock market and rent if you are really making those returns and are confident of your ability to continue to do so. Seems like a better bet. You might be interested in reading this blog if so: http://www.millennial-revolution.com/

    As for working harder, making assumptions without checking them is odd.

    totoro’s kids are now working at Thrifty’s until they’re 40.

    No shame in any job. I’d be fine with it in many circumstances. The author of Calvin & Hobbes said it best: http://imgur.com/gallery/nRI1l

  241. I think assignment selling is the biggest problem of all.

    Why is that?

    The Regulations in BC already require that real estate agents include a term in any contract of purchase and sale, unless otherwise instructed by their client, that provides that:

    a.the contract of purchase and sale may not be assigned without the written consent of the vendor; and
    b.that the vendor is entitled to any profit resulting from an assignment of the contract by the purchaser or any subsequent assignee (the “Assignment Restriction”)

  242. Hawk

    So is that a yes. Maybe Marko or Leo can help you out. Good luck….

    Local I am keeping them for Hawk…

  243. @ Wolf: As a long-time sifter through the dregs, I sympathize. It’s tough out there, especially when you consider what you might have been able to buy in Victoria previously compared to now. (My colleagues who are 10+ years older than me all live in Oak Bay or Fairfield, which were affordable for them when they started their jobs but entirely out of reach for me now. And they all keep asking me why I haven’t considered living in those areas -ha!) I kept at it, though, and it eventually worked out. So long as you’re not in a situation where you need housing desperately (getting kicked out of your rental and not being able to find an affordable new one, for example) you can at least only put in bids on places that really seem viable at a price that you’re comfortable with. This strategy won’t get you a house quickly, but it may work eventually. As my (very patient) realtor kept telling me, put in enough bids and eventually one will stick. I know how deeply competitive it is to get any kind of “good” house, but for whatever reason it may just happen that there’s less competition one weekend than in the past and you’ll get a place you like. I wish you well.

  244. ICYMI gwac, the sellers are chomping at the bit to sell bigtime to make the easiest money of their lifetime. A sudden 41% inventory increase in this town would crash it.

    Toronto “for sale” sign company can’t keep up with all the new listings. Last one to list gets hosed. 😉

    A new poll finds 41 per cent of Canadian with plans to sell their property are doing so to cash in and make a profit.

    http://business.financialpost.com/personal-finance/mortgages-real-estate/canadians-ready-to-cash-in-on-their-property-poll-finds-problem-is-where-to-go-next

  245. Victoria has a few Mansions that could be considered world class properties but not to the extent of other cities. Cities such as Vancouver with the British Properties and Los Angeles with Beverly Hills.

    You’ve clearly never been to British Properties 😀

  246. I don’t know why Barrister has chosen the number 1.8 million as it’s an arbitrary number. But using that cut off price for houses in the core he is quite right.

    Active listings for homes in the core over 1.8 million are out pacing sales. And there are 40 to 50 percent fewer sales over 1.8 million this year than the same time last year.

    Looking back over the last six months, 60 percent of house buyers in the core, western communities and peninsula purchased in the $500,000 to $900,000 range. Less than 5% of the buyers in the last six months bought homes in excess of 1.8 million.

    So it is a small market niche for greater Victoria. Victoria has a few Mansions that could be considered world class properties but not to the extent of other cities. Cities such as Vancouver with the British Properties and Los Angeles with Beverly Hills. We have a couple of nice houses scattered among a few streets.

  247. I think assignment selling is the biggest problem of all. The Government weather Provincial or Federal needs to act on it. There must be new clear rules that MUST be followed in the case of assignment selling. I think this is a much bigger problem than Foreign buyers, who I think are being politically targeted. Perhaps there needs to be a change to contract law in this regard as far as RE is concerned.

  248. @ Gwac – it’s clouded over now. He ain’t buying. If you offer me one of yours at 50% off FMV, I might be interested though. 😀

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