Dec 11 Market Update
Weekly sales numbers courtesy of the VREB.
| Dec 2017 |
Dec
2016
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 60 | 168 | 471 | ||
| New Listings | 46 | 198 | 392 | ||
| Active Listings | 1704 | 1684 | 1493 | ||
| Sales to New Listings | 130% | 84% | 120% | ||
| Sales Projection | — | 390 | |||
| Months of Inventory | 3.2 | ||||
The question after the surprisingly active November is whether this will continue into December. How many buyers will the stress test pull forward? Most of this year single family house sales were off about 20% from last year while condos were down an average of 5%. That all changed after the stress test, where we saw a dramatic improvement of both condo sales (from matching last year in October to up 30%) and single family sales (from down 20% in October to matching last year).
By my estimation the stress test already pulled an extra 130 buyers into November. So if we see a similar trend in December we will have pulled about 220 buyers out of early next year’s numbers.
However, it seems so far we aren’t pulling off a similar stunt in December. Sales are off 17% so far compared to this time last year, so the latter weeks will have to post very strong numbers to hit the mark.
I have older friends who are looking for a condo. They think Spencer Castle is appealing but haven’t been in a suite. Any opinions on the building,..anyone know anyone who has lived there? Pros or cons appreciated.
Basically Google is a big omnipotent data collecting machine, and it spits that out for visitors to this site in the last year. How accurate it is I have no idea.
New post: https://househuntvictoria.ca/2017/12/13/if-i-had-a-million-dollars
Sitting by the fire, listening to Christmas music….
reminds me it’s almost my favorite time of year:
That’s when we all review our predictions from the past year and make new ones for the year to come. Sharpen your pencils and get your slide rules out!
It’s not just Horgan going after speculators:
https://www.thelawyersdaily.ca/articles/5401/cra-investigating-shadow-flipping-of-toronto-condos
Leo, where did you get those stats? I don’t recall filling out a survey. Is it all some sort of ISP mumbo jumbo (more in-depth than just showing that Hawk and Introvert share wifi)?
Renters are not all losers. Just the ones who sold thinking the market would tank but instead it went up 40%.
Yes.
“Beats having a stranger in your basement cooking up meth and who knows what else.
That’s funny. Our current tenant has been renting from us for going on six years.”
Do you go downstairs every day and tell him he’s a loser and you’re king shit? 😉
Only 20%. The biggest group is 35-44
Unsurprisingly, it’s also a bit of a sausage fest (can I say that?)
I think you are dead on there. Blockchain is what to invest in, not the currencies built on it.
That’s funny. Our current tenant has been renting from us for going on six years.
“I just turned 35 and am most certainly not a programmer.”
Certainly not very bright either. Maybe leave the MLS and Websters dictionary for a few minutes and you will find many people making nice sums of cash in exciting young companies. Beats having a stranger in your basement cooking up meth and who knows what else.
Since the Fed raised rates today for the fifth time in two years to 1.5%, I figured it might be thought-provoking to plot the Dow’s performance during those 5 rate hikes.
Likely 3 more hikes to come in 2018 too.
Lots of youngsters here!
Hey, it’s just like your claimed 400% annual return on your stock portfolio!
[sigh]
Deb, the entire Alberta oil sector didn’t get laid off.
I just turned 35 and am most certainly not a programmer.
Lots of programmers here! Also a programmer, not far removed from my 30’s, not in BTC (although I know a few who are). Maybe we should create an HHV crypto-currency.
I suspect that the NDP are going to tax the devil out of any house speculation. But that is not news.
As to interest rates, my guess is that the Canadian rates will be up by a full point at about this time next year. But that should not take anyone by surprise.
US interest rates up to 1.5, will Canada follow?
https://www.marketwatch.com/story/dows-4-day-win-streak-in-jeopardy-with-all-eyes-on-fed-and-alabama-election-result-2017-12-13?link=MW_popular
I’m also in software, in my 30s and even took a cryptography course in University. Here’s my 0.000001 BTC.
Bitcoin is too slow. I don’t think it’ll survive as a cryptocurrency. I’m interested to see what happens with Ethereum in the future. It has some cool features and if they figure out sharding that could make a big difference in its ability to scale.
At this point no cryptocurrency scales well enough. I think the first blockchain to figure out scaling without resorting to trusted authorities in the network will be the one that gains real acceptance as a currency.
Hah, ya I should probably know how to spell it. I don’t work for them though. A partner company of Ethereum is a partner company of the company I work for. Ethereum > Xpansive > Collaborase.
The way I see it (also under 35 and a programmer), is that it is exactly the same as the dot.com bubble. Lots of people seeing something new, that’ll change the way the world works, but no clue how it works, but they think it’s the future(and now they think it’s justified because of the gains it’s made). It could go on for a lot longer than a year, and it’s no guarantee that the most expensive coins now will win out (pets.com), but eventually the technology will be useful.
“Thanks to rising oil production and a swift turnaround in drilling levels, Alberta surged out of recession this year,” Marie-Christine Bernard, director of the organization’s provincial forecasting, said in a release Wednesday.”
Not going to happen when they can’t move it out of Alberta fast enough so they get absolutely thrashed on the price they get.
Not happening. Besides, I think you enjoy attempting to contradict me all the time.
@local fool
I could care less is said sarcastically.
John Horgan promises housing tax changes ‘that will affect demand’ in February budget
On Wednesday, Premier John Horgan confirmed to CKNW’s Jon McComb that the NDP will tweak tax rules to target demand as part of its strategy.
“We are going to make tax changes that will affect demand in the February budget,” Horgan said.
While Horgan did not confirm that the tax would come in February, he suggested that speculators were squarely in the party’s crosshairs.
“We’ve got to stop the speculation, we’re going to do that to the best of our ability in February,” he said. “The Liberals made a ham-fisted effort with loopholes the size you could drive a Mack truck through.”
https://globalnews.ca/news/3914763/john-horgan-promises-housing-tax-changes-that-will-affect-demand-in-february-budget/
Irregardless, many thank’s for you’re and Garden’s thoughts.
You monster!
Fed hikes rates another quarter point. Canadian 5 year to follow suit. It’s just money right. Side hustle AKA second job after long work day can cover the last 4 hikes and 4 more to come. McDonalds is always hiring. 😉
It’s Ethereum. Misspelling your work name could be grounds for dismissal.
Ok, enough of the grammar nazis & spelling LFs. Get a life people 🙂
Well, I’m sure there were trendy neologisms then, but now they spread faster.
Incidentally, your comment kind of surprised me. When we met last year, you looked a lot younger than someone who would have been in grade 2 in ’81.
Must be the cycling or something. Hopefully I’ll be as lucky. I think there’s a few greys starting to show on the sides. My barber regularly denies it, but I tip him fairly well so I don’t trust his observation.
Irregardless, many thank’s for you’re and Garden’s thoughts.
Thx Marko
2742 Scott – $965,000
Ento
Yeah I’ve always preferred a lowercase s for this purpose:
RRSPs
EFTs
Also, fun fact: those examples are initialisms. Some people put them as a subset of acronyms, and others consider acronyms to be only those abbreviations which are said as a word (ex. NATO, SCUBA).
Another ‘young’ programmer here, also not into bitcoin. I find the world’s fascination with it a bit mysterious. There’s always been super high risk, super high return potential ways to invest money. I find the idea of bitcoin mining with renewable onsite energy interesting. Virtually free energy over time, generating potential wealth… but it would certainly be a dubious investment.
I’m actually going to be sort of employed in the blockchain ecosystem come next month. The Etherium platform is for much more than cryptocurrency. I’ll be using it to create tools which create and verify standards around environmental stuff. CO2 emissions, natural gas sourcing, nitrous oxide emissions, etc. And we’re looking for investors, wink wink nudge nudge.
I’m with you, LF. I learned that most nouns in English can be pluralized by adding an s. This was a lesson in second grade, I believe. It was good enough for 1981, and it’s good enough for today.
table, tables
Bitcoin, Bitcoins
ski, skis
The confusion arises when using acronyms, as I believe I read some high falutin’ English language police edict a couple of years ago suggesting that when pluralizing acronyms, an apostrophe could be used. Thus –
RRSP’s
ETF’s
etc.
So apostrophe plurals are only ok for acronyms, never real nouns.
But ‘could care less’, like ‘irregardless’ (even hurts to type it), will never be part of my lexicon.
I couldn’t care less. Regardless. Ahem.
Anyone know what 2742 Scott St sold for? Pretty big house for Oaklands: ~2,000 sqft 3br upper with ~1,200 sqft 2br basement suite.
LF:
Same place that “nucular” is now an acceptable pronunciation: human (mis)use dictates language.
I’m betting this is down to phone autocorrect and people either being lazy, or not realizing their mistake’s.
@Introvert
That was the dream but the dream died for thousands when oil cratered.
https://www.bankruptcyalberta.com/debt-then-vs-now/
“People on this board are too old to know what is going on IMO. No offense to anyone but the only people I know in bitcoin are either programers and younger people under 35. Otherwise Hawk would post awesome bubble’s every day.”
You’d be surprised. Us wiley old coots are more into new tech than the youngins’ think. I just heard from one trader he knows a couple of guys in my age range who made $10 million on bitcoin. Did they cash it out? I have no idea, there are major problems with that part and finding banks that will accept the transfer.
Also the hacking is incredible. That’s what scared me off year ago. Why make an investment, be up thousands and in an instance it’s gone forever, with zero recourse. That’s not even a gamble.
Blockchain is a different story, it’s the future of data and money transfer that is secure and reduce or end financial fraud for good. I’ve done well on one blockchain company, up 400% in the last month or so and will be a major player in their sector. Companies want blockchain, they don’t need bitcoin., an imaginary currency used by terrorists and drug dealers. Can’t avoid that stigma.
https://www.bloomberg.com/news/articles/2017-12-12/large-bitcoin-exchange-says-hackers-are-attacking-again
https://www.theguardian.com/technology/2017/dec/07/bitcoin-64m-cryptocurrency-stolen-hack-attack-marketplace-nicehash-passwords
Dasmo, great points. I was reading a few tweets yesterday of folks not being able to cash out. As well different exchanges had price values up to $2000 lower than the so called real time price. Sounds like one nasty tulip bubble about to blow up just like housing bubble. When they all want out, look out below.
Of course Bitcoin could keep going up. Why not. All you need is four more people under you. Good luck cashing in your digits though. It’s not easy to liquidate and once it starts it will be an instant evaporation. It probably has more legs since it’s so talked about now. Now would be the time to cash out when it’s easy. If you have made 1000% based on nothing why wouldn’t you make that real while you can?
Bitcoin? Bubble. But it’s possible the bubble could go on a lot longer. Participation is still relatively low so MANY more people could join the game. Since there are literally no fundamentals, there’s really no limit on how high it could go.
There are still plenty of wealthy Albertans during economic ruts.
US Ratings Agency advertisement, 1929:
John McAfee (yes, that McAfee) on Bitcoin, 2017:
It’s just perfect. Here’s some more wisdom.
The psychological illusion upon which it is based, though not essentially new, has been stronger and more widespread than has ever been the case in this country in the past. This illusion is summed up in the phrase ‘the new era.’ The phrase itself is not new. Every period of speculation rediscovers it…There has been the same widespread idea that in some miraculous way, endlessly elaborated but never actually defined, the fundamental conditions and requirements of progress and prosperity have changed, that old economic principles have been abrogated… and that the expansion of credit can have no end.” —The Business Week, November 2, 1929
“There is nothing new except what has been forgotten.”—Marie Antoinette
Introvert: “The optimists have secured all the gains of the last 35 years, leaving the pessimists bitter, resentful, and clinging, more and more, to the fantasy that something is going to happen that will reverse history, vindicate their pessimism, and most importantly give them a do-over.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Introvert, you are either being disingenuous or simply baiting the board. Lol. I believe that most people who had/have bought in the last 35 years were simply following the normal course of their lives as dictated by their upbringing.
Find that special person, get married, have kids, buy a home/house.
That should be the normal progression for today’s youth as well, however cheap money and speculators have largely driven the market outside of their grasp. Today’s market has also turned many a homeowner into a speculator and an “Oracle of Omaha” knowing that their purchases from 20 – 35 years ago would make them wealthy.
Quite frankly, when I purchased my last home, the only thought that I had was “pay off the mortgage and when you retire you won’t have that big expense.”
The stupidity of the market provided a different direction for me so I sold, however buying that house or any other house never struck me as getting on the ground floor of “Apple” or “Microsoft”.
But congrats to those with the stones to be early in bitcoin but it has ceased to function as a currency. Expect more companies to back out of supporting it. A magic money machine is not a good thing.
I suspect it can’t be done since it wasn’t identified as a mitigating factor in the MPC report. Maybe stress tests have to be on 25 year amorts
It seems these cash positive investment of one bedrooms are very very hard to find these days, if any.
True, but you can`t find cash flow positive two bedrooms either. Buying pre-sale right now to hold and rent is questionable.
81% have contracted amortization periods of 25 years or less and 19% have extended amortization periods
Am I missing something here….would not 81% of buyers just get stress tested at 30 yr amortization come Jan 1st to mitigate the impact of the stress test?
i Stress test at 25 years drops your purchasing power approx 20%
ii Instead you stress test at 30 years improving affordability approx 10%
iii Net result around 10% drop?
Bitcoin….
http://amandala.com.bz/news/wp-content/uploads/2016/08/pyramid-scheme1.jpg
In November the Teranet–National Bank National Composite House Price Index™ was down 0.5% from the previous month, the third consecutive monthly decline and the largest for a month of November outside of a recession. Indexes were down for four of the 11 metropolitan areas surveyed: Toronto (−1.4%), Hamilton (−1.6%), Ottawa-Gatineau (−0.8%) and Edmonton (−0.7%). Indexes for the two West Coast markets, Vancouver and Victoria, were flat. Indexes were up for Montreal (1.0%), Quebec City (0.9%), Halifax (0.8%), (Calgary 0.7%) and Winnipeg (0.5%). For Toronto it was the fourth straight monthly decline, for a total drop of 7.1%. For Hamilton it was the third straight decline, for Ottawa-Gatineau and Edmonton the second.
One final thought…in life it much better to be lucky than good…especially when it comes to investments.
Hence we are comparing rates of return. The crypto currency for people who understand enough is an fantastic opportunity to make money, as long as you EXIT cleanly and make your clams.
In terms of RE, and how nuts it is worldwide; on an initial down payment on flat in Shanghai China, executed in the Spring of this time 2017, the return on capital on that flat is an astounding 4200% percent to date. That is no typo, 4200% or 42x the initial deposit rate in less than 10 months.
There were 300 units in the project and scheduled for handover in 60 days and one could sell their unit within 5-7 days to lock in the aforementioned returns. Crazy but true. BTW, the average deposit size was $35000 USD. So the locked in return of $35000 is an absurd amount of $1,435,000 USD. Like Hawk says, you got to know when to call it quits, and I would say people who purchased should call it quits! But others are saying another DOUBLE, and then that would be like winning the Lotto 6/49 for people who got in on this!
Makes alot of sense.
LF, the graphic from your last link may help. Your “100% of GDP” was taken from Q2 2016. GDP has grown substantially since. Therefore, the ratio has now very likely fallen, but can’t say for sure until we see Q3/Q4 2017.
http://thecanadianpress-a.akamaihd.net/graphics/2017/static/cp-gdp-q3-2017.png
I am both under 35 and a programmer and yet not invested in crypto. Maybe I’m dumb. But I don’t see any value there. Blockchain has a ton of great uses but cryptocurrencies have zero real value right now except as a speculative investment. Not practical as a means of exchange, no industrial use like Gold/Silver, and not rare (each individual coin has limited supply, but the number of coins out there is infinite).
Classic bubble as far as I’m concerned. Doesn’t mean it won’t go another year though. Bubbles always go longer than anyone expects.
They’d still get built, and sold at a somewhat lower price. Profit margins can absorb that today easily.
Some stats in the MPC report.
“Each year in Canada, about 700,000 homes (new construction and resale) are purchased for
owner-occupancy. Of these, 625,000 to 650,000 will require financing via a mortgage and/or a
Home Equity Line of Credit (“HELOC”). Just under one-half of these will be first-time buyers.
Each year, just over 1 million Canadian homeowners will renew mortgages.”
“For homes that have been purchased during 2016 or 2017, and have a mortgage, 72% have fixed interest rates, 24% have variable or adjustable rates, and combination mortgages have a 4% share. ”
“81% have contracted amortization periods of 25 years or less and 19% have extended amortization periods”
“for borrowers who renewed a mortgage during 2017, one-half (51%) saw
their interest rate drop. Among all borrowers who renewed in 2017, on average their interest
rates fell by 0.19 percentage points”
On the stress test
“In combination, credit unions and mortgage investment corporations might account for 14% of
mortgage originations. Some of these will be insured and therefore require stress testing
(perhaps 5 points out of the 14% share) and the remainder (9 points out of 14%) will be
untested. Under current conditions, therefore, somewhere around 91% of new mortgages would
be subject to stress testing.”
“In all likelihood, diversion of mortgage lending to non-stress-testing lenders will have only a
marginal impact.”
“On average, prospective buyers who could qualify based on their actual interest rates but would fail the stress test would need to reduce their target prices by $31,000, or 6.8%.
“Out of 700,000 home purchases per year:
Perhaps 50,000 to 60,000 per year will be able to make a different purchase, albeit one that is
less attractive to them.
Perhaps 40,000 to 50,000 per year will be entirely removed from homeownership. ”
“At this time, we do not have enough data to confidently express an opinion about how many
renewing borrowers will fall the stress test, despite being able to afford their actual costs with
reasonable comfort. Given that more than 1,000,000 mortgages are renewed each year, it is
possible that the number so-affected will be in the range of 50,000 to 100,000 per year. These
borrowers may find themselves unnecessarily vulnerable in their mortgage renewals, as they will
be unable to negotiate with other federally-regulated mortgage lenders. And, there won’t be
enough opportunities for these borrowers to transfer to non-federally-regulated lenders, due to
limited supplies of loanable funds. In some cases, these renewing borrowers may be forced to
accept uncompetitive rates from their current lenders. ”
https://mortgageproscan.ca/en/site/doc/40784
VicInvestor1983
People on this board are too old to know what is going on IMO. No offense to anyone but the only people I know in bitcoin are either programers and younger people under 35. Otherwise Hawk would post awesome bubble’s every day.
Like this one for litecoin in the past 3/4 days
https://ibb.co/eURvQR
I have been watching this closely, I had friends buy back in 2014, but at the time it was so complicated. Now you just etransfer some money and away you go.
Something changed this June, everything took off. I still find it amazing at EVERY week something has blown up 200-300%. Bit coins crazy 100% single day gains are over but look at them today.
Ripple up 46% in 24 hours, at one point today litecoin was up 67% in 24 hours and over 200% for the week.
https://ibb.co/bymOC6
BTW I 100% think its a bubble but I’m in it. How can you not be 😉
I’ve been reading some cryptocurrency subreddits and the arguments are interesting there as well.
“It’s a new paradigm”
“It can only go up”
“This is a new asset class that only comes around once in a lifetime, it’s just starting”
“Better than any fiat currency”
“Better than being scammed by wall street”
“My parents invested in stocks in the 90s and lost everything I’m never buying a stock”
“Yeah my friends think they’re so smart their investments are up 8% this year. Meanwhile my ether is up 80% this week”
I think the crypto crazy is driven largely by people who are disillusioned by traditional investments and real estate. This is a way to stick it to the man. We’ll see how long it goes.
I really can’t answer this, since I’m not the type to invest $1.5M into a flip. We are going to have to attract some flippers to the blog to discuss this.
It would. I have talked to some people that were looking to sell anyway and suggested they get out now rather than in the spring because the stress test could throw the market into disarray for a while. Whether a flipper would do the same? Not sure, it seems a lot of them think real estate only goes up so it would surprise me if they suddenly anticipated a decline.
Not saying it doesn’t happen, but what I would want to see is the rate of properties selling at a loss over time and seeing if that has spiked recently or if the magnitude of losses is increasing.
Caveat Empire “That corner of Vic West is only crappy to the folks who think anything outside of OB is slumming it.”
I think I need to make a video for you next time I drive down there and you can tell me what you think, I’m not sure where you grew up or live now but I would far from describe that from ideal in my opinion and I am not in Oak Bay.
Bingo, I saw a place on the other side (George) sell for $800k late 2016. There are a few houses on both sides in need of some major TLC. The Vic West side is very very high to get down to the water though depending where you are. I was curious about finding a place to keep my boat and be able to head out cruising around Victoria.
Oh, you’re absolutely right it’ll decline.
When consumers owe more than the entire production of their economy, they must deleverage eventually. Incidentally, your subsequent argument isn’t very robust and is actually a bit ironic. You’re telling me my debt to GDP number is out of date (it’s not), and you proceed to refer to newer data.
The problem is, you’re making an assertion (GDP igniting) based on a time limited observation, when there is actually even newer data which undermines your premise. Q1 and Q2 growth was hot. But not afterwards, in fact, the expansion is currently annualized at an anaemic 1.7%. In other words, your suggesting that the level of GDP “ignition” we’ve seen will propel wages up, when GDP has already plopped back down.
And even if wages went up, in some markets in Canada, housing is suddenly generations ahead in pricing to where it should be relative to the underlying economy – wage growth at a hilarious 10% per year , wouldn’t get some of our markets out of this mess for many, many years. That assumes housing prices stay where they are.
Here you go; here’s one also from CBC. It covers the entire country, not just Alberta.
http://www.cbc.ca/news/business/canada-economy-gdp-1.4427974
Uh oh. The small growth we’re now experiencing is driven mainly by household spending. Wonder if the explosion in HELOCs has anything to do with it?
Looks like realtors are still pushing to get their clients into the market before the OFSI deadline. Here’s a sponsored listing that popped up… “Need to find a place before the new mortgage rules impact your buying power Jan 1? Single-family home BACK ON THE MARKET with In-law suite”
Looking forward to seeing what happens in the new year.
It seems these cash positive investment of one bedrooms are very very hard to find these days, if any.
I could easily argue both sides. I guess that’s why I’m still a halibut in all this. I was one with horns for a bit. Now I might have a hairy back….
You’re referring to an old 2016 number LF, when our resource economy was in the tank. Our GDP engine has since ignited in 2017, therefore the ratio will decline.
Example:
Alberta’s economy to grow at blistering 6.7% pace this year
http://www.cbc.ca/news/canada/calgary/alberta-economy-conference-board-canada-1.4414153
Prepare for another wave of wealthy annoying Albertans over the next few years.
Have to laugh. These arguments never change.
We should have a day when all the bulls and bears reverse their positions and make a point to argue the other side.
I did such an exercise in undergrad once. I can’t tell you how weird and debasing it felt to argue something that I didn’t agree with. Like petting an angry cornish rex against the grain of his fur…with sandpaper. Funny the outcome, though. You found yourself feeling smaller and less positional then before. As it should be.
But we won’t do any of that here, I guess. And what would be the point. Being positional keeps some of the readers entertained, probably to the annoyance of others. But those annoyed ones…eh, they’re no fun anyways.
Speaking of annoyed, been trying to wrap these stupid presents. I have lousy dollar store tape. It won’t stick, it won’t cut right, it’s too narrow, and buying it probably supports slave labor somewhere. Folks, the cheapest option in life is often not the thriftiest. Mind you, that doesn’t mean go out and spend $900,000 on a run-of-the-mill SFH. Then you’re more like the guy with the dollar store tape than you realize…
@Leif, then you are either not perceptive or are trolling IMO. If neither these then I recommend walking around VicWest a bit more and with a broader perspective. Unless you are too afraid you might get mugged….
DSAN are still bigger debt slaves than us. We’re not even third place!
Dasmo,
I still do not get what is nice about it. I see the “sh*tty neighbourhood in the world….” but not nice.
I think you might be overlooking how much money Canadians have already borrowed, the pace of that borrowing, and that that borrowing has been predicated on a continuously rising market.
That says more about how you frame the world and others around you, than it does rebut anything. It’s totally fair to be optimistic long term about here. However, there are are well founded reasons for having pretty serious concerns about the state of Canadians’ finances and what happens when we inevitably move into the debt repayment phase. That’s not pessimism, that’s just the way a market functions. Right now, our household debt has exceeded 100% of GDP, and is among the worst in the world if not the worst. Credit globally is beginning to tighten and policy makers domestically are becoming increasingly interventionist in the RE market. They see the oncoming train wreck for exactly what it is, and they’re trying to limit the damage from the inevitable.
I just have to ask, because I hear this all the time now.
Where did expression “I couldn’t care less”, change to, “I could”? If the point is to say you don’t care, then saying you could care less implies the opposite. Last few years, like the recent predilection of people to add apostrophes to denote plurals.
Look at the Christmas tree’s!
Not that I necessarily disagree with your comment, I just think you might be overlooking how money can be ‘cheaper’ at higher interest rates.
Example:
Situation A – Homebuyer’s earnings are increasing at 1% per year, mortgage rate is 2%.
Situation B – Homebuyer’s earnings are increasing at 6% per year, mortgage rate is 3%.
Effectively, borrowing is ‘cheaper’ in Situation B.
Disclaimer: I could really care less where prices are headed, I’m just calling it as I see it.
As am I.
The optimists have secured all the gains of the last 35 years, leaving the pessimists bitter, resentful, and clinging, more and more, to the fantasy that something is going to happen that will reverse history, vindicate their pessimism, and most importantly give them a do-over.
@Michael: Which dispensary are you getting that good stuff from? The main reason (imho) that house prices are so high is due to 1) lax lending standards and 2) cheap money (low interest rates).
These two factors are slowly being taken away, and you figure house prices will continue to rise? I suspect you’re going to be disappointed.
Biggest two surprises by mid-2018…
*how little effect the OSFI changes had on our market
*prices continued rising as mortgage rates increase
Most will eventually go to zero,but I think bitcoin could easily get to 30k+ first (with a big correction likely around ~20k).
This is easy to say as someone who has the funds to ‘maneuver the market’. The rest of us are up shit creek without a paddle. Common sense departed this market in 2014.
I bought a pre-sale in 2009 at 834 Johnson for $198,900. 530 sq/ft, crap layout, no parking, etc. Happily lived there for one year, made the lack of parking work by working until at least 6 pm and Saturdays and then parking on the street. I’ve rented the unit since.
8 years later you can buy this slightly larger unit with a better layout across the street for $276,920 -> https://www.realtor.ca/Residential/Single-Family/18882674/505-845-Johnson-St-Victoria-British-Columbia-V8W1M2
When you adjust for the fact it is a better unit and inflation it isn’t completely crazy compared to what I bought in 2009 to start. Obviously, things are a lot more difficult now but there are still paths to acquiring real estate.
Marko: If condo prices seriously drop and if interest rates in the next two years climb two points will your condos still be cash positive?If housing does crash here and building grinds to a halt what is the impact on rental properties with some many high paying jobs disappearing.
My parents haven’t had a vacancy on their basement Oakland’s suite in 22 years. If I can’t rent brand new condos in the Songhees than I’ll worry about that at such time.
I just spent 6 weeks abroad including a week in Dubai and I definitively see a long-term appeal to living in Victoria. Markets will go up and down, but I am optimistic on Victoria.
Builders provide a service. Renovators provide a service. Speculators who do nothing but speculate, are not providing a service. Presale buyers offset risk and move-in ready properties are convenient – I understand that. But to say that sitting on an asset and selling it later for more money is a service is a lie. Unless you’re talking about servicing yourself (giggle).
When I was in high school for two summers I worked for my father who was a stone mason at the time. We once worked on a high-end property in Oak Bay building rock walls on a per square foot agreement. I think it was $11 per square foot. It was super difficult work carrying rocks and cement bags, mixing morter, etc. We submitted a final bill along the lines of 2,040 sq/ft and the owner took the time to measure it all out and came back with 2,032 sq/ft. I was 17 at the time but remember being like “WTF, are you serious?”
What I took away working for my father is honest hard work is not really appreciated by society. That same owner sold the house a few years back for a couple of million….so there he is grinding us on rock walls that took a few months to build but he dishes out 60k for real estate commission.
Is it bullsh*t that on some of these transactions I make more with signatures than someone swinging a hammer on that same construction site for two years? Yes, but it’s completely legal and anyone can walk into a showroom and buy the pre-sales I purchase. Just like everyone else, I am looking to get ahead in life.
Finally, Marko convinced me during his commentary on the old folks looking to purchase investment condos but not wanting to wait 18 months.
I was pitching the Lyra development to my clients looking to downsize to condos (principal residence). The Lyra development is an end-user product as the units are large. My theory is that buying into the development I am bridging the gap between the developer needing pre-sales and the end-user who wants to walk through a finished product.
For investors you need to stick to one bedrooms -> http://victoria.citified.ca/news/stay-small-a-guide-to-buying-an-investment-condo-in-victoria/
@OPPS:
I completely agree with you that I will not enjoy seeing another housing market crash.housing market crash. Frankly when I bought in 2014 I thought the Victoria market was bit overpriced. Obviously, over the last three years it seems to have reached insane heights.
I am not predicting what will happen to the housing market but I agree that there are a number of storm clouds on the horizon.
@Marko: If condo prices seriously drop and if interest rates in the next two years climb two points will your condos still be cash positive?If housing does crash here and building grinds to a halt what is the impact on rental properties with some many high paying jobs disappearing.
caveat emptor
Yeah, it’s seems quite rare, but it’s also a really small area. It’s like looking for houses on Tattersal, but only the part east of Blenkisop/maplewood.
I really liked walking along Selkirk especially in the spring. A second best would be certain areas of Fernwood. I really enjoyed Fernwood, but when we were buying there wasn’t anything worth buying for what we were willing to pay for a SFH. In hindsight had we bought the cool old place on Grant with nob and tube back in 2009 we’d be doing pretty well right now. Ask was 500K, it sold over 600K iirc. I don’t even want to know what it’s worth now.
Lol.
The areas of OB I’d consider are definitely above my pay grade. I like Oliver, St Patrick etc
E.g. 1415 Monterey seems nice and I like that area. I’m not even going to bother running the numbers on 1.245 million.
“30% of condos going over ask, only 12% of single family.”
70% of condos and 88% of SFH’s aren’t.
Great posts oops. Anyone holding that much in rentals heading into the toughest year ahead of rising rates and OSFI with smugness deserves to get hammered. From condo kings to bagholders in a flash. 😉
The alleged housing bubbles in Vancouver and Toronto, and lesser degree Victoria, do not even pale in comparison to the cryptocurrency craze happening. Never in the history of the universe have people made so much money so fast. What do people here think about crypto? Biggest bubble in the universe or the next big thing?
I have no plans to buy property or crypto at this time. I own a house in Fairfield and will hold on. IMHO, both appear to be overvalued, exceptionally so for crypto. I must say though that the FOMO is very painful. After all, random people putting $1000 a few years ago now have millions. Ideas?
CMHC fixed the link to their full report on rental building economics: ftp://ftp.cmhc-schl.gc.ca/chic-ccdh/Research_Reports-Rapports_de_recherche/2017/RR_Economics_of_New_Purpose_Sep18.pdf
Oops, thanks. Enjoyed the read. Great to see input from someone who has been there, and seen all of it before.
When you can still include a vacate clause going forward:
13.1
(1) In this section, “close family member” has the same meaning as in section 49 (1)
of the Act.
(2) For the purposes of section 97 (2) (a.1) of the Act [prescribing circumstances
when landlord may include term requiring tenant to vacate], the circumstances
in which a landlord may include in a fixed term tenancy agreement a requirement
that the tenant vacate a rental unit at the end of the term are that
(a) the landlord is an individual, and
(b) that landlord or a close family member of that landlord intends in good faith
at the time of entering into the tenancy agreement to occupy the rental unit
at the end of the term.
So it appears that you can still put the vacate term in if you want to rent out your basement suite for a period of time (say the academic year) but then want to take over own use of the space for a period of time (say the summer for visitors and relatives). And of course this exception is critical if you are moving away or travelling for a period but need the home back at a certain date.
Government seems to have struck a good balance here.
Local Fool: “Intuition only, or is there something in particular underpinning your thought that it would be a fast drop, rather than a slow melt?”
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I took a look at how quickly the markets changed in Vancouver and Toronto when the foreign buyer’s tax was brought in and then I asked myself, “What the hell would happen if something substantial ever hit this market?”
I looked at the sea change of mortgage applications going from insured to uninsured after the previous OSFI changes. This wasn’t minimal.
I then reviewed the incredible amount of debt that Hawk and you have outlined in various posts, as well as the stupid surge in helocs.
Then, I looked at the ratio of mortgages renewing this upcoming year and yes, renewals are not affected by OSFI legislation but I can assure you that there is a decent percentage of these renewals that were hoping to refinance the debt that they have lived on for the last several years.
John Dollar illustrated the point with the $400,000 mortgage turning into a $600,000 mortgage. I don’t care if the home is worth $1.5 million. That “player” now has to deal with the OSFI legislation because of refinancing or try to make the impossible payments on his heloc. Nope … sell.
Finally, Marko convinced me during his commentary on the old folks looking to purchase investment condos but not wanting to wait 18 months. How long will they wait as prices start to fall because sales have been pulled forward and a large percentage of new buyers can’t pass OSFI’s stress test.
The coup de grace for me, LF was really reading what this guy had to say about the comparison of the housing metrics between Canada and the U.S.A.
http://www.moneygeek.ca/weblog/2017/10/16/canadian-housing-market-bubble-interview-seth-daniels-jkd-capital/
The 1981/82 crash may have looked slow on paper, but it took me all of 6 months to sell my $135,000 home for $99,000.
The crash in the early 90’s enabled me to watch a builder’s home drop from $255,000 to $176,000 in one year before I purchased it.
I’m retired with a good income and I doubt that I would buy again regardless of what happens moving forward. This bubble is too fascinating not to follow. The pain that follows is something I have no desire to watch. So, warn as many people as possible and sit back and see what happens.
The “service” is called providing capital – you damn communist.
Just kidding. In all seriousness I partially agree with you. There is legitimate “investing” which funds good things that otherwise wouldn’t happen and then there seems to be a froth of useless speculation that doesn’t produce any beneficial outcomes.
Sometimes hard to separate the two. In Marko’s example what would be the outcome if there were no specuvestors to buy and flip the pre-sale units? Would the unit get built anyhow and the units sold cheaper? Or would the project just not get built?
Agreed – great area. I looked there when we bought but it seemed like little comes to market there. That corner of Vic West is only crappy to the folks who think anything outside of OB is slumming it.
Intuition only, or is there something in particular underpinning your thought that it would be a fast drop, rather than a slow melt? Either is fine, I’m just curious.
And what would fast mean to you? I don’t think for instance, that Hawk’s chart will happen. In the context of RE, that’s more capitulation which is pretty rare.
Local Fool: “Somebody could easily make a financial decision that you might find unfathomable. Perhaps the smart money is bailing, but the public by and large is still in a different place. I really think we’ll have to wait and see.”
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That pretty much summarizes my original post LF. My point was that if the smart money was bailing then people that frequent this blog should pay particular attention to the headwinds that are coming our way.
LeoM offered a constructive list of shifting winds in the real estate world but personally I don’t believe that it will be a slow grind. One year maximum before the local “specuvestors”, that bought overpriced condos, realize the worlds a changing and they are in trouble.
In saying all of this, you are absolutely correct in your assertion regarding the “herd” mentality. They will be in the dark, for the better part, regarding the upcoming problems….but we try.
There is going to be a world of hurt for those that get trampled by the change in direction of this particular herd.
It is the law now: as of yesterday (December 11, 2017), the vacate clause in a fixed term tenancy agreement in BC is history
https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/news
Builders provide a service. Renovators provide a service. Speculators who do nothing but speculate, are not providing a service. Presale buyers offset risk and move-in ready properties are convenient – I understand that. But to say that sitting on an asset and selling it later for more money is a service is a lie. Unless you’re talking about servicing yourself (giggle).
This is easy to say as someone who has the funds to ‘maneuver the market’. The rest of us are up shit creek without a paddle. Common sense departed this market in 2014.
Leif
I haven’t been down there in a while, but I remember a lot of the waterfront places on Selkirk being nice. Big older houses in decent repair (don’t remember any dumps). The other side of the street was a mix of quality.
Wish I could afford one of those waterfront houses on Selkirk. It’s a nice area. Quiet, walking distance to downtown, nice park nearby (Banfield), good little coffee shop nearby etc.
Or it could be $600,000 as it has been renovated.
Now the trick is getting this level of insight to people who are not making a living from it and know every pre-sale and listing inside out. There is certainly potential there.
That reminds me I was going to finish that rental market article. Will revisit that now that a few more units have sold in that building.
Interesting. So speculators and investors like pre-sales, but for those hoping to rent them out, smaller units are better, and perhaps speculative activity is not so high in Victoria for pre-sales that there are many people hoping to assign before completion. Makes sense that owner occupiers are rarely looking ahead that far.
@john D, it would cost at least $750,000 to build a house on that lot. But that’s not the house that is there. The depreciated value is probably at around $300,000….
That side of OB ave isn’t nearly as dense as JB. Majority of the lots are 50′ width or bigger. I walked through the Brighton place and they did add a nice suite and spiffed it up a little. But 1.3? Feels like it has to be market top…but I said that before and boy was I wrong.
Can’t be any fun out there for house hunters.
Dasmo, it would cost more than $300,000 to build a 2,500 square foot home in that hood.
That was an interesting article posted earlier about Vancouver: “Dozens of homes in Metro Vancouver bought in the last two years are currently listed to be sold for a loss as speculators appear to exit Canada’s hottest real estate market.” It’s not really surprising when a typical single-family Vancouver home has surged to a record $1.6 million, about 20 times the median household income.
The Bank of Canada Financial System Review mentioned earlier by Local Fool is also interesting, albeit a bit scary in their emphatic overview, written in prosaic terms, that many Canadians are on the brink of a serious debt induced cascade of default ‘vulnerabilities’. This gives some credence to Hawks many posts about the debt bomb explosion if interest rates go higher.
https://www.bankofcanada.ca/publications/fsr/
All these current events got me thinking about how the current RE market could unravel. Some people think the current real estate market is a house of cards on the verge of collapse, but I see it as a maze of dominos waiting for a chain-reaction to knock over all the dominoes, in slow motion over a couple years.
People on this blog have reasons for the hyper RE inflation, such as: QE, low interest rates, foreign investors, money laundering, easy mortgage qualifications, psychology, high paying construction boom jobs, population growth, stock market bubble profits, and many others. Each of these is like a domino.
But coming soon are changes that might start a chain reaction to those dominos that are supporting hyper RE inflation.
mortgage qualifications at higher interest rates, stress testing
foreign buyer taxes province wide
construction collapse putting thousands out of work, it happened in 1981/82 and shocked everyone when it happened suddenly leaving hundreds of partially constructed buildings.
exodus of unemployed construction workers from Vancouver and Victoria and Kelowna for jobs in locations with less expensive living expenses
new rules for reporting primary residence to CRA
hints of strict CRA enforcement of capital gains on self-contained suites
Currently, the federal government is on the hook to cover the cost of 100 per cent of an insured mortgage in the event of a default, but the Feds intend to force the banks to share this risk; banks will pass on the risk to borrowers
AirBnB restrictions are coming soon
New high NDP taxes to pay for daycare and 140,000 affordable housing units
NDP tax reform to discourage short-term speculation on housing, and to close a loophole involving so-called bare trusts, which allow owners to cash out and new investors to buy in without paying property-transfer taxes.
casino money laundering crackdown that funnelled proceeds of crime through casinos then into real estate.
Unannounced but hinted Federal changes to stop the speculators and foreign investors who are creating commoditization of residential RE.
and more to come; the point being that politicians, at all levels, are now focused on halting RE inflation.
And let’s not forget those thousands of empty houses and condos being held by the housing hoarders/‘investors’ that will be dumped onto the market as soon as their equity starts to disintegrate when prices start decreasing, just like the current situation in Vancouver
I have a few long-winded predictions for 2018/19 that I can summarize succinctly by just saying this; the first domino will fall soon and the domino chain-reaction will continue in slow motion for a couple years.
Can any of the mortgage brokers provide statistics
I would be curious to know what percentage of potential buyers that will be impacted by the stress tests were going with 25-year mortgages? Wouldn’t a lot of them just switch to a 30-year mortgage option to mitigate the stress test?
@Opps:
I am not sure that having four hundred buyers taken out of the spring market is that major a deal when you consider that you also have four hundred less houses on the market as well. But the fact that new buyers next year have a large constraint on their borrowing ability might be the real impact on the market this coming year.
What might have a greater impact is whether people like Marko start to think that flipping might be a bit more risker this coming here. If you own pre-sale condos do you really want to end up owning them if the market freezes or starts to seriously drop?
Ruit,
According to the Bank of Canada’s November Financial System Review, just about one in two mortgage holders in Canada is set to renew in the next 12 months.
Can any of the mortgage brokers provide statistics on what the most popular mortgage terms were in BC and Canada for each of the last 5 years ( 2013 to present??)
I would find it interesting to see how much of the mortgage population has to renew their terms in the next year.
notsureifsarcasm.jpg
Not sarcasm….you have the developer who needs to sell x% of units to finance construction and you have the end-purchaser who has no appetite for risk and I fill the 1.5 year niche holding the contract. In 1.5 years there will still be downsizers, but then they can buy a completed unit. If the market tanks, which it could, I rent out the unit and cover my monthly costs. If the market stays flat I figure I make 15 to 18% based on comparable analysis at the time of purchase.
It’s like how many people are comfortable building their own home? Therefore, you have a market for builders and their 15% profit. I took a risk, did the owner-builder route, and pocketed the 15%.
I always run my pre-sale purchases based on a flat market. I bought a junior one bed with parking at Promontory in 2011 for $193,000 but I figured it was worth $230,000ish in a hypothetical completed state. Sure enough the condo market was flat/down for the next 2.5 years but on completion in 2014 the unit was worth $230,000ish and I rented it out for $350ish cash flow positive per month (based on 25% down payment). I got lucky in that the market subsequently took off but if it continued to drop I am still fine pocketing $350 a month and paying down the principal.
Even in a downward trending market I continued to buy with the Era pre-sale in early 2015. The reason I was buying is even though prices were trending down the rental return was increasing.
In conclusion, my take away is try to use common sense and maneuver the market you are in versus trying to predict the market which is impossible.
@ Leif, Like I said, nicest sh*tty neighbourhood in the world….
Oops,
I feel a bit like you’re counting your chickens early when it comes to the stress tests. You could be absolutely correct in your “market killer” persuasion, but that doesn’t necessarily mean that investors or their speccy cousins are going to see it the same way.
A lot of the bull arguments are instructive.
—Victoria is transforming (New paradigm)
—Fundamentals like income, demographics and migration patterns matter less, or perhaps not at all due to ubiquitous wealth (Different this time)
—Limitless Chinese, Iranians, or space aliens will prevent a correction. (Different this time)
—Everyone wants to be here. (Different here)
—It’s a special market here. (Different here)
—Prices will never go back to where wage earners can afford them. (Different this time, new paradigm)
—Any correction is small, short lived, and will be quickly offset by even larger gains (Financial ignorance)
—The amount of debt is largely offset by huge equity buffers (Financial ignorance)
It’s the same arguments that are repeated everywhere in these situations, and this is no different. A lot of these beliefs are becoming baked in and totally pervasive in Canada, and are probably views shared by those folks that choose to make concordant financial decisions.
Somebody could easily make a financial decision that you might find unfathomable. Perhaps the smart money is bailing, but the public by and large is still in a different place. I really think we’ll have to wait and see.
Leo S: “I doubt they are looking ahead and selling at a loss to avoid a greater one. They’re not that smart.”
Marko Juras: “On the sale side, certainly not.”
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Lol, hang on you guys. You’re trying to tell me that if you had $1.5 million dollars invested in a flip that you purchased last year, you wouldn’t be looking at the effect that the OSFI legislation is going to be having on home prices and trying to bail.
I would suggest that you would have listed, recognized that you were going to take a loss because of the current market conditions but knew that the New Year would be even more challenging and sold to cut your losses.
Marko, of course you’re a savant when it comes to the buy side because as an insider you quite possibly get the best product at the best price. Lol.
Marko: “I was a little puzzled as to why it wasn’t moving so I pitched Lyra to 5 or 6 of my clients and the most common response was “we are too old to wait 1.5-2 years” so I kind of had a bit of an insight as to why it wasn’t moving; large units (1,100-1,200 sq/ft) and downsizers don’t really play and understand the pre-sale game in Victoria.”
Well Marko, at least this gives everyone a little bit of insight into why the condo markets are taking off. Realtors are selling condos to people as investments with the stories of 70% gains in 18 months dancing around their heads.
2018 could be a real defining moment in your career, my friend.
C’mon Leo, you’ve devoted time on this blog about the repercussions of the OSFI legislation and you would be considered an insider. Someone that has their finger on the pulse of the market, so to speak.
Leo: “By my estimation the stress test already pulled an extra 130 buyers into November. So if we see a similar trend in December we will have pulled about 220 buyers out of early next year’s numbers.”
So, knowing this and sitting on a 1 to 2 million dollar “investment” wouldn’t trigger your “sell” button???
notsureifsarcasm.jpg
The new construction wood low rise at 300 Michigan was listed as high as $717/sqft. People that bought in that building made such a bad decision it’s unreal. A lot of those units were flipped 2 months after buying only to make it an even worse decision.
I recently had occasion to stroll around Vic West. I was struck by the transformation this area has undergone in a relatively short time. It was beautiful down there. I discovered the charming Westsong Walkway, a scenic little route along the ocean.
Introvert and dasmo where I’m Vic west do you like?
My wife and I drive along Selkirk Ave, belton, pine, Raynor and thought look at all these dumps
No one seems to have money to fix their houses, run down houses, run down yards, crap in yards, falling apart fences etc
.. Honestly it looked like a ton are just rentals. We thought maybe it could be up and coming but this place reminds me of the same people and places I saw when I used to go to Vic west to meet a friend from university back in early 2000s.
I don’t see any awesome transformation. I don’t see it being a good place to raise a family either.
I’m not sure that a market insider really exists. I think it’s more that they bought at the peak, overpaid, and now are forced to sell for one reason or another. I doubt they are looking ahead and selling at a loss to avoid a greater one. They’re not that smart.
On the sale side, certainly not. Sold my unit at the Era in May thinking the AirBnB regulations were going to tank the value, but it’s probably gone up another 5%……impossible to predict but given it went up 70% in <18 months who really cares.
However, on the purchase end of things I’ve used insight in the last few years to make purchases. For example, I own at the Promontory and have sold quite a few units in the building. I purchased one unit at Encore when it launched without any intention of purchasing a second.
Then I listed a Promontory studio in late 2015 and I had listed the same floor plan a couple of times before; however, this time there were 5x the showings, we had three offers and it sold $10k over asking price. Sensing something was up I walked over to Encore and bought another unit, the last one bedroom unit they had left as it seemed very cheap compared to the Promontory studio sale the day before.
This summer as the condo market started going completely nuts I bought a pre-sale at Lyra (concrete tower you see going up on Christmas Hill right now) for $465 per foot while much inferior wood-framed units started going over $500 per foot. I was a little puzzled as to why it wasn’t moving so I pitched Lyra to 5 or 6 of my clients and the most common response was “we are too old to wait 1.5-2 years” so I kind of had a bit of an insight as to why it wasn’t moving; large units (1,100-1,200 sq/ft) and downsizers don’t really play and understand the pre-sale game in Victoria. That is where I step in; I take care of the 1.5 year problem.
Does that explain all those travel agencies along OB Ave as well? I guess so. There’s even still a video store in Cook Village called Pic a Flic. How are they staying in business I wonder every time I drive by it’s empty.
Brighton Ave is a bit of a doozy. That hood reminds me a bit of James Bay as everything is so tightly packed together. Put it in square footage term vs condos and you do have a good deal – quite correctly put, Dasmo. My suspicion is the suite all fixed up definitely helped sell it. Wonder if CRA knows about that big increase in equity and that suite? Hmmm…
That is a wow SS! 1800 Brighton Avenue is assessed at $868,000. Building is $212,000. It’s maybe worth $300,000. So it’s a million for the lot value or $161.50/sqft. Cheap compared to condos these days.
30% of condos going over ask, only 12% of single family.
I’m not sure that a market insider really exists. I think it’s more that they bought at the peak, overpaid, and now are forced to sell for one reason or another. I doubt they are looking ahead and selling at a loss to avoid a greater one. They’re not that smart.
Old people don’t.
Amazing how malls are still profitable enough for these massive expansions. Doesn’t everyone get stuff off amazon these days?
Here’s the 2014 listing:
http://www.victorialistings.com/property-details/341754
Place wasn’t exactly in terrible shape considering the massive increase.
Brighton sold for full asking at 1.3M. Last sold for $655k in 2014 – which seemed like a lot back then for a corner property with (I believe) just 2 beds on the main.
Barrister, what do you think he would achieve by bringing down the NDP? He would most likely lose the chance to push any of his other projects, like electoral reform. Seems pretty pragmatic to me. Politics isn’t just about throwing tantrums, as much as that seems to be the norm to our south.
He has said that it is important to show that different parties can still work together like adults, even when they disagree. Even though I don’t always share his view on everything, I think that one principle is desperately needed these days.
Thanks Introvert. I hope it looks like that because what’s there right now is looking horrendous. Interesting about the performance, that probably explains the expansion despite malls across N America on the decline.
It’s supposedly going to look like this when it’s finished:
And apparently:
Mayfair is one of Canada’s best performing shopping centres, with “sales approaching double-digit growth,” said Roman Drohomirecki, executive vice-president and CEO of Ivanhoé Cambridge.
http://www.timescolonist.com/business/72-million-makeover-in-works-for-mayfair-mall-1.2329297
Here’s a very interesting read for the bears and food for thought for those bulls that are still out there.
http://www.moneygeek.ca/weblog/2017/10/16/canadian-housing-market-bubble-interview-seth-daniels-jkd-capital/
“the main thing that credit bubbles share is the amount of debt that’s being taken on and how quickly it is growing. If you look at housing and financial insurance, real estate, construction, consumer spending, as a percentage of the economy, it’s bigger in Canada than it was in the US. Basically any metric that you look at, it’s a bigger bubble in Canada than it was in the US, at least the ones I used to analyze the US bubble at the time.”
I dont recall things as well as I used to forty years ago. For example I would have sworn that the NDP and the Greens ran on a platform of stopping Site “C” although I guess that they just promised to review it. But he sure gave the impression that he was definitely against it continuing. Andrew Weaver
says he will not bring down the government over this decision. Some much for his being a man of conviction. But by the time the next election rolls along everybody will have forgot about it. You can fool some of the people some of the time but you can fool all of your voters all of the time.
Got to admit that it made me smile.
LeoS. “There are always people selling for a loss due to unique circumstances.”
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Leo, you’re absolutely right but you’re overlooking the most important indicator. Speculators, with lots of money, bought and sold for a loss. These are not $500,000 homes, condos or townhomes.
This is “real” money getting out while they can. 90% of these purchases were made in 2016 before the new OSFI rules were announced.
These are not naive buyers. They got out because they knew that they would get killed in 2018.
I would say that these speculators are probably market insiders that are getting out while the getting is good.
I saw the beauty in VicWest 15 years ago! I’m out now though…. As I used to say “nicest sh*tty neighbourhood in the world”….
‘ I almost recall’
☻
I agree, but I’m not sure it’s particularly significant. What is being observed is growth, and the more advanced the growth cycle the greater the tempo tends to be.
I almost recall when Langford was a string of houses on a single lane road in the latter half of the 90s – and look at it now. Cities are always in a state of change, and 15 years from now, someone could just as easily say, “It’s not going to be like how it was 15 years ago.” Obviously, unless a city is dying. It doesn’t indicate anything new, IMO.
Absolutely. The Victoria of the past is gone forever, never to return. We can only hope moving forward they don’t spoil it, but so far I see mostly improvements. Watching the new JS Bridge take shape yesterday was really interesting, despite thinking about the ridiculous cost which I think is way higher than it should’ve been.
That said does anyone know what’s up with the albatross they’re building at Mayfair Mall? In an age of increasing online shopping I have to wonder why it’s needed and who designed that eyesore right on Douglas St? I’m hoping at least it may start to look better when nearing completion??
It is interesting how some neighbourhoods are being transformed. My sister lives on a quiet dead end street with large lots that when they bought in had mostly old houses on it in average to poor state of repair and a couple hobby farms. In the last year three or four properties were sold and now have massive single family homes under construction. I’m talking 4000-10,000 sqft. Whether fueled by debt or money or some combination, there is definitely a shift.
It’s an interesting analysis and something I can now repeat here as well with the data access, but not very conclusive. There are always people selling for a loss due to unique circumstances. The telling thing would be if the number of people selling for large losses was suddenly accelerating.
Welcome to today.
I recently had occasion to stroll around Vic West. I was struck by the transformation this area has undergone in a relatively short time. It was beautiful down there. I discovered the charming Westsong Walkway, a scenic little route along the ocean. All the while, cranes, nearby and far off, were busy building up the city.
The experience underscored my perception that Victoria is changing fast, and that the way it was is unlikely to return.
That’s not lot value. Check out the assessed values for land and improvements.
The last two vacant lots to sell in Fairfield happened last month at $640,000 for a 3,600 square foot lot and on Irving Street in May this year for $750,000 and that was a 9,900 square foot lot.
The house on the site contributes substantially to the value of the property, therefore its value is not vacant land but as improved with a house.
The highest price that you’ll get for the property is selling it to a family to live in and not to a builder to demolish.
Got an MLS link SS? Why so ridiculous? Lot value only?
I went to an open house for the place on the corner of Brighton and Clare street last week. Asking was 1.3. Wife and I had a chuckle that they must be on crack if they think they’re getting that. Apparently it sold and someone told me for close to asking. What are people smoking?
Thanks, always, for all the hard work in posting the numbers. The spring market might be interesting this year.
I think a broader sense of transparency would certainly help a lot of buyers make informed decisions Leo. I wonder whether there is a similar situation in Victoria.
https://thinkpol.ca/2017/12/11/many-metro-vancouver-homes-selling-for-a-loss/
“The fact that these people are willing to take an almost 25% hit means that they expect the correction to be even greater,” they added. “As smart money cuts their losses and run, many others will gladly line up to catch falling knives.”