Here comes the supply
We hear a lot about supply issues in housing. The government loves to push building more supply as a solution to our housing woes and of course the developers (who will… ehm, supply that supply) agree wholeheartedly.
How’s it going on that front? In a word: famously. Or at least, relatively famously.
As of November 2017 there were 4123 housing units under construction in the Victoria census metropolitan area (i.e. Greater Victoria). That is the highest ever, beating out the previous peak of 3781 in August 1973. Of course the population back then was only about half of what it is now so on a per capita basis there was more activity.
Construction is mostly made up of condos, which make up 75% of units under construction.
Zooming in to more recent years, we can see that after flatlining around 1750 units under construction for years after 2010, it suddenly jumped to around 2800 in 2016 and above 4000 recently. Of course this is because monthly starts doubled from 150 to over 300 per month in that time period.
The average lag time between start and completion is around 1 year, so we can use the pipeline to project into the future.
In other words, regardless of whether the current rate of construction can be sustained, we are going to keep seeing completions at around 200/month with a jump to over 300/month by the end of 2018. Talking to the major builders around town, they are going flat out and booked ahead a couple years. Barring a large shock that dries up construction financing, don’t expect the rate of new construction to slow down anytime soon. With the housing crisis near the top of the todo list for many local politicians, there will likely also continue to be support for new projects on that level.
Is it enough?
Between 2011 and 2016 the area grew at a rate of about 4600 people per year. At that growth rate and an average 2.2 people in each household, we need 2100 new housing units every year. In the last 12 months we built 2500 and should finish about 3800 in 2800. So yes, currently we are building significantly more new housing than we need to accommodate population growth.
Are we overbuilding?
Maybe, but probably not yet. Construction goes in cycles so it’s advised not to get too excited about over or underbuilding at any given point in time. If we look at the rate of population growth and rate of building, there is a pattern of underbuilding for a few years (when the real estate market is slow) followed by overbuilding in hot markets. In the end it evens out, but at this elevated pace of new construction we will quickly address our supply challenges and start building up inventory. Combined with the stress test sucking demand it could get interesting.
Yep, that’s exactly what I’m saying. “If anyone knows of a second James Bay, let me know”. Fairfield or Cook St would also do it for me. Car dependency makes me shudder and I really do value being able to go for a stroll and have a beer watching the sunset on a beach or have a little BBQ picnic with friends. I could bare to part with being walking distance to the US ferries and float plane terminal. But ask me what I think in another 3 or 4 years. I could live like a king in Waterloo and I’m getting sick of dumping money into rent.
I’ve done it 6 times since I move here about 3.5 years ago. Strathcona is definitely harder but I’ve done that too.
New post: https://househuntvictoria.ca/2018/01/15/jan-15-market-update
When was the last time we had a medium sized earthquake in Victoria?
I support anything that raises awareness of earthquake preparedness, but the article was not really that great. Amalgamation is an important issue (and strangely toxic to people in greater Victoria) but I think it is somewhat separate.
Leo S, earthquake magnitude is a tricky thing. If it is farther away and deep, larger may not be so bad. Half a year earlier, there was a 7.1 near Christchurch but it was far enough away that it did much less damage than the 6.3. In the end, comparing numbers in news articles is hard.
The big Cascadia subduction zone earthquake is what is getting a lot of media attention, but the Leech River fault is what makes me really nervous. It essentially passes right under Langford:
https://en.wikipedia.org/wiki/Leech_River_Fault
http://www.timescolonist.com/news/local/fault-line-near-victoria-shows-signs-of-rumbling-1.13690749
I don’t mind the slightly breathless articles about the monster “big one” because it gets people thinking. However, a local mid-size crustal earthquake may be just as bad for us.
Disclaimer first: I am not a geoscientist.
The issue with soil amplification is with direct building damage. You have a better chance of your house surviving if it is low-rise and made of wood and, of course, on firm soil or rock. Modern building codes also make a huge difference, but some positive things were being incorporated into building design a while ago, so not every old building is terrible.
If it is on rock, the building is less likely to resonate with the incoming earthquake waves and so they will have less impact on the building structure itself. This does mean that the building appears more “stiff” and is probably MORE likely to throw your pictures off the wall (and topple your bookshelves). I would take the tradeoff for keeping my walls straight, though.
So, to my limited understanding, your comment doesn’t look right. Liquifaction is a serious issue, but is somewhat different from soil amplification.
Introvert, I don’t think the comparison is very fair. We may well handle a moderate crustal earthquake without too much disruption, but there is a good chance that it will cause deep damage to city infrastructure. As long as the world economy keeps stable, Victoria will recover, but it could take a while.
California has had more time to develop Earthquake resilience because they have had more common medium severity quakes. We have had nothing significant for a very long time. It has bred a fair bit of complacency and our codes (and public buildings) are only starting to catch up now.
Seattle builds thousands of rental apartments and few condos; meanwhile in Vancouver and Victoria builders build thousands of condo units and few rental units. Why? Government taxation and rules, in many forms. Developers take the path of least resistance, with the least risk, and the highest profit. In other words, Governments indirectly direct the path that developers take.
http://www.sightline.org/2017/08/14/why-seattle-builds-apartments-but-vancouver-bc-builds-condos/
Fort Wayne Indiana. Although it has a better hockey rink, and a friendlier airport.
Also for real though.
Auckland. I mean the weekend camping is in much nicer places than Sooke or Tofino or Strathcona, but if you’re not picky, and can handle being in nicer places than those…
Christchurch, If you can handle being hours from some of the best wine country in the world, or having a beautiful surf spot like Taylor’s Mistake right on the edge of town.
Also, Brisbane, or Perth, or Gold Coast Australia, again the camping is in much more beautiful locations. Sorry.
Honolulu, Seattle, San Fransisco (hell, tons of places in California). I’m sure the Carolina’s have some nice places too.
I mean, even Vancouver meets your criteria. It has a much nicer park than beacon hill (stanley park), and the bowen island campground you can actually walk to (since apparently taking a float plane is considered part of walking, catching the walk on from Grandville to Snug Cove is also clearly walking). Best part is that it’s actually walkable to Vancouver since it’s IN Vancouver.
Seller seeks buyer with bitcoin for Victoria property
Hugo Donais’s 20,000 square-foot lot sits on Midland Road in the Uplands subdivision. The listing describes the lot as the perfect spot to build a dream home — on a country lane and walking distance from the golf course and yacht club.
Donais said he’s not a gambler, but he told his real estate agent, Jason Binab, he was willing to speculate on the volatile cryptocurrency.
“It’s been on the market for about a month and I thought hey, this is not really a busy market right now, so why don’t we just offer it to people to buy it for cryptocurrency? Jason said: ‘Are you joking?’ And I said no, I’m not.”
Realtor Binab said an offer might already be in the works for the property.
http://www.cbc.ca/news/canada/british-columbia/bitcoin-cryptocurrency-real-estate-victoria-uplands-1.4484549
My neighbour moved here from Wynyard Saskatchewan. They sold their place there for more than what they bought their place in Gordon head for. Clearly Wynyard used to be a more desirable place to live than Victoria.
I expect you’re capable of more insight than that, Luke. Investing in the markets is broadly a more sensible choice than “investing” in houses, hands down. There are a few people that can buy and flip homes as a living, but that requires risk and a lot of skill. Unless of course, you’re in a bubbly market – then every participant is a genius until they aren’t. Historically homes tend to trail inflation, although Victoria over several decades has done better – but not 6-8% year after year. Anyone who buys homes here, now, for profiteering IMO, is gambling and not investing.
Now, growing net worth – in renting vs owning, that’s bit different with ownership usually much better as it forces your contribution to it. It also tends to be a safer way to store what you do have. So when you rent, you must exercise discipline to take the nominal savings relative to mortgage and ownership costs and invest the rest. My rent is about 7% of my income, so my ability to invest and save is relatively reasonable. I can tell you had we bought in the last few years, that would not be the case and we’d have a lot less freedom. Yes we’d have paper gains, but to us that’s basically worthless.
The point is, I think there’s value to saving and investing over house-chasing. I drive a 10 year old car. I only buy my shoes when they’re on sale for 40% off, then I buy several and keep them till I need them. We take care of what we have and if something we own breaks, I pull out my tools or Q-Bond and fix it; I don’t toss it and buy a new one. I respect and understand the value of money, and believe that the thriftiest option isn’t always the cheapest. On home buying, “expensive” can be okay if it represents good value.
Overpriced never is.
I’m curious what city in the United States Victoria is closest to in regards to economy, demographics and amenities. Arizona? Boulder? Any other thoughts?
Yeah noticed that as well and that is how I interpreted it too. I am not a
geologistgeoscientist though.Other than the 300k+ city, it sounds like you’re talking about Nanaimo, since no one here is going camping for the weekend in Tofino.
I guess this is the mildest climate in Canada, in which you’re likely have your neighbour kill his children.
Thanks for that map, Michael – very interesting – it’s nice to see I’m in a grey zone! (though I did know about the bedrock there already). One thing I did notice is older homes often tended to be built in these ‘elevated’ zones, and on bedrock more often. (often, they built in floodplains later on when there was no where else to go after all the good spots were taken – and you probably noticed Uplands and Rockland are in ‘grey’ zones so they must’ve thought about this). Back in the early 20th century, I suspect this also had a lot more to do w/drainage and agriculture issues than people thinking about earthquakes? Bedrock doesn’t make for good vegetable growing conditions… Nice for that sedum garden though…
One thing I did notice about that map is ‘the amount of amplification due to soil conditions diminishes as the strength of ground shaking increases’. I read this to say – the stronger the earthquake is then it won’t make any difference where you’re located… i.e. we’re all going to have big damage if it’s a 9 on the scale, whereas if it’s a 6 or 7 then people in the wrong ‘zone’ would have more damage than those in grey areas. Am I reading that right?
If more people paid attention to this – it limits desirable parts of Greater Victoria even more! I wonder though, how many actually even think about this stuff? This does explain all those ‘sinking feeling’ places in certain parts of Fairfield/South OB and elsewhere… like this nightmare listing: https://www.realtor.ca/Residential/Single-Family/18967605/1640-Earle-St-Victoria-British-Columbia-V8S1N5#v=dir
A really big earthquake has not happened here since Jan. 26, 1700. As you say, in the very long term, it could be hundreds of years before another hits, and it may strike far enough away as to not be too catastrophic for our small city on varied rocky outcrops, or maybe it will be devastating. Time will tell but I don’t sit around thinking about it too much.
And renting is better? Your landlord probably thinks so…
@Dasmo:
“To the Bears it sounds like OVERsupply is the solution.”
No, oversupply is not the solution — Yet. But it will be, judging from the shape of the supply curve.
California has had many earthquakes over the years, including big and damaging ones in ’89 and ’94. Remind me, how’s real estate doing down there?
https://en.wikipedia.org/wiki/List_of_earthquakes_in_California
It’s encouraging that, in the case of New Zealand, private insurance covered a lot of it:
Expenditures have been split between private insurance ($20 billion) and public monies ($12 billion).
Also, keep in mind that New Zealand’s GDP is nearly 10 times smaller than Canada’s, meaning Canada could probably cough up more dough more easily.
Mind you, if Victoria and Vancouver were leveled, we’d probably need the U.S.’s GDP to pay the bill!
The Avon River meanders through the broad plain where Christchurch was built, mainly swampland and river silt. The whole downtown and suburbs along the fault line experienced liquefaction. The damage discriminates — one neighbour loses everything, the other across the road, nothing.
http://www.timescolonist.com/life/islander/what-we-can-learn-from-the-christchurch-earthquake-1.23144294
Hence, why buyers should be reviewing this Victoria hazard map. Our few liquefaction zones (parts of inner harbour, Fairfield, etc) could see extensive damage, while grey areas may not even have a picture fall off the wall.
http://www.empr.gov.bc.ca/Mining/Geoscience/PublicationsCatalogue/Maps/GeoscienceMaps/Documents/composite_new.pdf
Generally, housing is.
Forgot that it was only a 6.3. Childs play compared to what could come here.
So it will take two decades and $40B to rebuild a medium sized city after one medium intensity earthquake. Wonder how long it will take to rebuild the entire pacific northwest?
In the very long term, housing here is going to be a poor investment.
This article seemed to be about earthquake preparedness in Victoria but is actually a strained attempt at pushing amalgamation—nonetheless worth a read:
What we can learn from the Christchurch earthquake
http://www.timescolonist.com/life/islander/what-we-can-learn-from-the-christchurch-earthquake-1.23144294
Remember my joke about Nanaimo from a few days ago:
This morning:
Three injured in violent home invasion in Nanaimo
http://www.timescolonist.com/news/local/three-injured-in-violent-home-invasion-in-nanaimo-1.23144493
But don’t worry, guys, the RCMP stressed that this incident isn’t related to a murder that occurred yesterday morning in Nanaimo.
Lots of spam promoting cryptocurrencies trying to post to the blog lately. Maybe the stream of greater fools is running dry.
Victoria has the best quality of life in Canada when all is taken into account in my view. There may be better places around the world but not in Canada.
Just walked my dog at the beach now off to MTB. Lucky and count my blessings to be able to live here.
Bingo. So what if he’s commuting in an M5, he’s still wasting his time, just in a slightly fancier box.
Number 6, feel like lunch at the Oak Bay pub this Monday or Tuesday? If yes day and time.
And in typical government fashion.
The BC government may be adding new rental units to an already over supplied market at the worst possible time.
The market eventually employs its own solution. Investors trying to catch rising prices by buying significant amounts of new supply is a relatively normal aspect of this part of the market cycle. Only thing is, this particular cycle has been intensified and prolonged by CB manipulation.
As Prof. Mason Gaffney characterizes it: “Bank credit swells and shrinks in synch with the land cycle. The two interact in a positive feedback process: swelling bank credit raises land prices; buyers need more credit to purchase the land; the appreciated land then serves as collateral for more bank loans, and so on.”
This is where investor/speculator activity is highest.
Land prices eventually peak and then construction activity peaks. This is followed by a peak in the general economy. In short, land prices are a leading indicator of both construction activity and general economic activity.
Sound familiar? Anyone seeing all the “now hiring” signs? This is that cycle at work. And finally, as everything cools, a broad economic downturn almost always follows. Then we repeat…
https://www.cato.org/publications/commentary/great-18year-real-estate-cycle
To the Bears it sounds like OVERsupply is the solution.
thanks for the link LeoM. This is why I don’t see supply as a great solution. Maybe part of the solution but I keep asking who are all these DINKs buying downtown condos? Answer: investors.
Seattle over-built new condos/rental units, now hit by declining rents and high vacancy rates and declining prices. Lots of empty rental units in Seattle held by investors/speculators who can’t find tenants. Will it happen here next year?
https://www.heraldnet.com/business/seattle-rents-drop-significantly-as-new-apartments-sit-empty/
“Local buyers,” as we call them.
Salaries in vic seem to compare in my industry (mining/oil&gas) between vic and van if responsibility levels are compared. Living in vic does put a very real cap on your advancement potential though. Doesn’t bother me… I work less hard and live in a SFH with an ocean view and have a 15 min drive to downtown. My boss makes more, sure, but he lives in a shit box townhouse outside of Vancouver and commutes to downtown 75 mins each way everyday.
I’ll forgo titles to live like a king here all day long.
We do, however, have more and more people transferring to the Vic office every year.
If you think property values in Victoria are crazy now, just wait and see if our Tech pay scale starts to match Seattle or SF. Personally, I would be fine if that doesn’t happen. Sorry to all of you in the Tech industry.
Probably beats Saskatoon, anyhow. I recall someone recruiting for a position there who could think of only one attractive feature; namely the hours of sunshine, which are 150 per year more than Victoria.
As for Hawk, he probably got fed up being continually dissed by Auntie Snowflake, aka Intro, and cashed some of his ample stock market winnings to take a long break in Hawaii.
I’m a software engineer that up till very recently worked remotely for a tech company in Vancouver. Vancouver and Toronto actually have a problem with paying tech workers what they’re worth. The workers that are paying attention are leaving.
I totally agree. Currently in Seattle you can make around 50-100% more in tech(easy) and it is just across the water. Pay in Canada has a long way to go in Tech. I think this is because US based firms are still setting up shops here since it is cheap and for some reason we are fine being paid that. When I look at salaries in Seattle and working remotely it makes a huge difference. I understand Victoria has a lot of software shops but the majority of them are small and pay peanuts to what a small shop has to pay in Seattle. If you are a half decent developer you can easily make double the wage you would be paid in Victoria.
This picture sums it up well
?w=801&s=07d0599e76accdcbacd908a09b242ad4
Introvert said “Moreover, if one asked a person who lived in Vancouver for 40 years and in Victoria for six months where she was from, do you suppose her immediate reply would be Victoria?
As per VREB
It is a simple question Introvert. How can you not understand.
Really? I found Hawk’s posts horribly tiresome.
Oh you.
The fact is that we don’t know how good a proxy it is at any time.
My own view is that newcomers renting here for 0-12 months prior to purchasing should be classified as non-local buyers, similar to how the federal government recognizes couples as common-law partners after they’ve cohabited for 12 months.
Moreover, if one asked a person who lived in Vancouver for 40 years and in Victoria for six months where she was from, do you suppose her immediate reply would be Victoria?
Hyperbole noted.
It’s like when the government advertises a job that they already have someone in mind for but they union makes them post it. Required: Someone with 5.4 years of experience with a bachelors in Zoology that likes to crochet.
That reminds me of those websites that try to peddle something – they do a side by side feature comparison of their product vs a competitor, but they use metrics that they themselves decide which are virtuous and valid to compare. The result is their product has 20 green checkmarks next to the features and benefits, and the competitor on the list beside has one or two. It’s not a neutral comparison.
All you’re really saying, again, is “I value these particular things, and so Victoria works for me”.
I think Beacon Hill Park is generally boring (and the Drive-In’s ice cream has changed for the worse in the last year or two, anyone notice that?) – float plan terminals are loud and smell bad, west facing beaches are better than south, and the mountains are not that dissimilar than that with other cities on or near mountains regions. Camping here has little comparison to regions near Oregon and California, etc and it doesn’t rain there huge portions of the year.
And so what? All that matters is you yourself like it here.
This January seems a bit different from last year. Of course only a dozen days into the month these numbers will likely change but there is no glory being the last one into a battle.
New listings for houses in the core have been outpacing sales at a rate of 2.4 to 1 or 42% which is just on the cusp of being a BUYERS market. This has also plumped up the Months of Inventory to 5.3 and that historically been thought of as balanced market. And the average days-on-market has skyrocketed to 46 which is still thought as being balanced.
But is this to do with more home owners selling or fewer purchases? Well, it really doesn’t matter as the result is the same on the market. Relative to the last few Januaries this January is trending towards being cool.
Of the 85 sales so far this month. 52 have been in the core and 22 have been houses. That seems to follow normal ratios with 60% of all sales being within 10 kilometers of downtown. Strata homes in the core are still outpacing detached houses as they did last year at about the same ratio 30:22 or 1.4:1
So while it seems that there are fewer buyers this year no specific income group is more affected than another.
To give an Introvert analogy. This Honda has shifted down a gear.
I’m a software engineer that up till very recently worked remotely for a tech company in Vancouver. Vancouver and Toronto actually have a problem with paying tech workers what they’re worth. The workers that are paying attention are leaving. https://www.reddit.com/r/vancouver/comments/6pskix/tech_salaries_in_vancouver_vs_north_america/
The company I was working for has an anonymous feedback thing. I said that senior talent wasn’t getting paid what their worth. The response was “no we are paying what they’re worth, in fact we’re paying more”. I put in my notice about a month after that since I accepted a job that paid 43% more after bonuses (19% before bonuses). Now I work remotely for a company that’s based in Ottawa.
If anyone else knows of a place that I can be walking distance to a grocery store, downtown of a 300k+ populated city, a south facing beach with a vista of mountains, a park that’s on par with Beacon Hill, a float plane terminal (I can literally walk to downtown Vancouver), a huge array of excellent breweries and restaurants, and be weekend camping distance to places like Sooke, Tofino and Strathcona, you just let me know!
Thank you, but, it won’t be genius that’ll be responsible for the inevitable. Actually, it’ll be the opposite.
Thanks for commenting expat. You are so right.
You wonder that every time and the answer is always the same. It doesn’t really matter.
100 people move to Victoria. Say 60 buy directly and 40 rent first. 60 are counted as out of town buyers. 40 are not. I don’t see any compelling reason why that ratio would vary significantly over the years so counting the 60 is a good proxy for the 100.
So a person living here and buying here is not a local to you? How long must they live here then? Or do they need to be born into it?
The norm. There have never been a significant number from out east.
I agree. There’s a reason we saw a big push in 2015/16 when prices were still much lower and their market was on fire, and a reduction now when the situation is reversed.
I don’t think this is true. If only because most of the world class companies only exist in Vancouver and they pay higher. Especially in tech.
Fixed that for you. 🙂
Victoria is nice for sure, but people get carried away thinking it’s something other places aren’t. Tons of nice places in Canada for different reasons.
In memoriam, perhaps someone could post The Graph?
Some of us feel no need to argue incessantly with those who believe that the market will forever remain disconnected from fundamentals and/or have a pathological need to humblebrag about their paper gains and perceived investment brilliance. It’s horribly tiresome. At least Hawk’s posts were short and offered some level of comic relief in their own peculiar over-the-top way.
Well, I do hope that Hawk is both healthy and happy.I rather hope that he bought a house rather than the farm.
My theory is that he made a New Years resolution to stop wasting time on HHV.
@LF
Don’t worry. Within a year, if not less, you’ll look like a genius.
Creston. Like northern Italy only better.
I don’t need to Google it; I camped at Wasa Lake as a kid! I’ve driven through Kimberley once.
Enough man splaining. So you live in a car then.
We lived in Kimberley and Wasa ( google it!). Moved there from Vancouver…now that was culture shock but we met the people who are still our best friends.
Winter there killed me though.
“In terms of experiences I would much rather go to a third world country than a place in Canada.”
I should have been more clear as I didn’t mean it as an either/or thing. But yes, definitely do both!
We lived on the Mexican border for many years. Never went to those gated party resorts my friends go to but saw the real Mexico, as much as a gringo can anyway. What an eye opener.
I still have not seen Quebec or the Maritimes but would love to.
Oooh, fun! What’s the name? (I love the Kootenays.)
I miss Victoria very much nomgetting around it. BUT it was always amusing to,watch people try not to grimace or twitch when I said we were moving up island. I know people who have not been over the Malahat in years.
Now when I am back in the city and run into acquaintances and tell them we have moved they pause…and says well that is a big change. And they don’t mean it in a good way.
I get it. I was a Victoria snob for awhile. Maybe I will be again some day. But I will never be one of those people who doesn’t appreciate that life can be great off island. We lived in the Kootenays for years as well….many people seriously have no clue where that is…I say the name of the town we lived in and to this day get blank stares.
Allow me to explain. Quality jobs will raise the desirability of any location—to a point.
No. Honda outsells BMW every year, but that’s not because Hondas are more desirable.
Intro,
I knew you were going to like that last sentence I wrote, and your visions of me growing more exasperated with each chart I post. My will slowly eeking out of me, eroded piece by piece by a relentless RE market. Even if I “take lessons from walls”, I think it would upset you to see me destroyed. Just a little.
Bears tend not to last all that long on HHV; the market destroys them. Just Jack is a notable exception (congratulations, sir).
The blog’s founder was a bear, who eventually gave up and bought in a lower-priced city (euphemistically described as “relocating for a job”).
Have you not been reading this blog for the last ten years! Why is Fort McMurray so expensive! Because it’s more desirable!
A better measure would be how fast the city is growing. And Introvert- you are not going to like what you find when you google this one.
Leif
Sounds like subject to probate.
I went to private schools for most of my life. The only difference is the kids can afford to bring coke to parties in their parents mansions instead of sneaking sips of your parents vodka and wine in a suburban basement.
That is exactly my thoughts. I never went to private school but my cousins and some friends did and they were way more into drugs than anyone I knew in public school.
At the individual level, desirability is subjective.
But it’s not an accident that prices in Toronto, Vancouver, and Victoria are the highest. The market reveals desirability (and perceived desirability).
I see 2654 Fernwood Rd finally sold. 70 DOM but sold for $40k over asking. Was this because they had a super long subject to?
It’s funny, for some reason I feel like Hawk will be back. Otherwise, he’s picked a curious time in the market to go silent, especially given the content he preferred to offer.
I’m a somewhat lonely bear, now. 🙁
It should be like Israel but instead of 2 years military service you have to live off island. There are many special places on this earth. This is simple one of them not THE one. And, like everything it ain’t perfect either.
I found Toronto to be a warm, friendly and walkable place. Maybe the suburbs are Costco-land, but the inner city was diverse, interesting, and quite pretty. Much prettier than Vancouver in my opinion.
Didn’t have the same experience. Everyone is wearing suites. People in the elevator at the condo I was staying at wouldn’t say a word. Didn’t find it warm at all…basically like any other big modern city. Yes, definitively more diverse.
I like Jack 6’s semi-random positions. The bear moments are much more thoughtful than Hawk’s doom posts. In my short time on the forum, it looks like Jack plays devil’s advocate against whatever is the trend of the day. It is a valuable role, as long as it is good-natured.
I love Victoria, but the world is a very big and beautiful place. Pointing out that there are a lot of very nice places in BC to go instead of Victoria isn’t necessarily bashing Victoria. I think the property craziness would ease from Vancouver and Victoria if people discovered that, yes, there are a lot of really nice towns & small cities in the province.
“Not everyone has to LOVE Victoria, you can LIKE it too. But these are the responses you get from rednecks you’re either with them or against them. And I personally would stay far away from them.”
Akin to ‘Murica, love it or leave it.
“I was in Toronto for five days in November and not sure what I gained out of it. People here shop at Costco and people in Toronto shop at Costco. Welcome to North America.
In terms of experiences I would much rather go to a third world country than a place in Canada.”
I found Toronto to be a warm, friendly and walkable place. Maybe the suburbs are Costco-land, but the inner city was diverse, interesting, and quite pretty. Much prettier than Vancouver in my opinion.
I like Victoria, but I think there is some value in leaving the island bubble from time to time to visit other parts of the country, or even other parts of the province. There are nice places in Canada other than Victoria, and it helps to have something to compare this city to other than Nanaimo (not that I’m knocking Nanaimo) when assessing its desirability.
Many times through out the thread I said Victoria is nice! If you think that is bashing Victoria you gotta get out more often.
Not everyone has to LOVE Victoria, you can LIKE it too. But these are the responses you get from rednecks you’re either with them or against them. And I personally would stay far away from them.
It’s funny, that’s the opposite of my experience. I spent my childhood overseas and saw the world before university (diplomat parents). Went to Ottawa for University, lived in Saskatoon for a year and spent loads of time in Toronto, Montreal, Halifax and little places around Ontario. No place has felt as right as Victoria has, specifically James Bay. <3 the island.
On the topic of Oak Bay, I just don’t get it. Pay for a mansion, get an underwhelming 70’s built shack all for the ‘convenience’ of still being car dependent and raising your children in a little socioeconomic bubble of rich kids and not knowing what homeless people look like. I went to private schools for most of my life. The only difference is the kids can afford to bring coke to parties in their parents mansions instead of sneaking sips of your parents vodka and wine in a suburban basement.
Yup, they are all me. No secrets. Just different years.
Just like to keep old cranky pants frothing at the mouth.
Am I wrong to assume that buying real estate or other goods with bitcoins gets around the capital gains on the coins themselves. Governments cannot track the transaction like a huge deposit into your bank account. Is this the reason why more expensive homes are popping up for sale against the coin?
It’s sad how many people I know who spends thousands of dollars to go to a third world country like Mexico but have never been further east than Kelowna because they think they already live in the only part of Canada worth seeing.
I was in Toronto for five days in November and not sure what I gained out of it. People here shop at Costco and people in Toronto shop at Costco. Welcome to North America.
In terms of experiences I would much rather go to a third world country than a place in Canada.
Victoria itself is not that spectacular. I much prefer my hometown of Split, Croatia as a town itself ignoring all else (economy, politics, health care). If I had $10 million I would be on the next flight back to Croatia, but I don’t.
What makes Victoria specatacular in my opinion is an aggregate of factors. It’s not that spectacular itself like Vienna but it is pretty good. It’s not in Switzerland but Canada is pretty damn good. Doesn’t have the amenities of a big city, but it has enough. Traffic isn’t perfect but it is a lot better than the majority of places I’ve travalled to, etc.
When you package it all together it does start becoming somewhat unique.
I was in Europe and United Arab Emirates in November and I had a really good time but whenever I come back driving down the Pat Bay Hwy I am always like…..yup, lucky to live and work here.
thanks
Gwac, should be a decent 1st half. Maybe we can get near 20k. I figure Dow gets to ~27k before decent correction. I’ve liked energy but now waiting for pullback to add to positions. I liked your predictions couple weeks ago on loonie etc.
Here’s a look btw at some of the different prices in CAD/bbl that producers are receiving. Most of the new production in Alberta lately is condensate and light oil, so they’re doin’ all right 🙂
Yes the $C is a clue, also the fact that it is in Canada 🙂
Michael
Where do you TSE topping out this year?
What sectors are you bullish on? Materials/Oil and gas?
James
Is there not a new refinery in Alberta that’s helping the Canadian producers out a tad?
Found the article
http://business.financialpost.com/commodities/energy/a-new-refinery-in-alberta-has-come-to-the-rescue-of-battered-oil-producers-so-why-is-its-ceo-sad
That’s a day old, and in Canadian dollars.
bloomberg.com/energy works for wti and brent and is up to date always.
this is what I’ve got for wcs
http://www.oilsandsmagazine.com/energy-statistics/real-time-oil-prices-wti-brent-wcs-energy-stocks
“What was most amazing to me, is how I never noticed it before I left here and then came back”
We briefly returned to Victoria years ago and had the same experience. The belief in the inherent superiority of Victoria is so widely accepted that I didn’t notice it either when I originally lived there. To question it would have been like suggesting the Earth was flat.
But when I came back I couldn’t help but notice it. It was weird, since I knew better. I knew that you really could have a good and in many cases much better life off the island because I’d done it. And then people who’d never lived off the island or even visited another province would treat me like I was ignorant and they knew better than I did what it was like to live in cities they’d only seen on TV.
And I’m not saying any of this to bash Victoria. It’s a nice place. But man, I wish some of my friends would see the rest of their country. It’s sad how many people I know who spends thousands of dollars to go to a third world country like Mexico but have never been further east than Kelowna because they think they already live in the only part of Canada worth seeing.
Re: oil prices
Most of the stuff being produced outside of the oilsands is condensate or light oil which receives nearly the same as WTI.
Jack might want to revisit his ‘leaving for Alberta price theory’ by reviewing how much Victoria home prices increased between ’03 to ’08 as oil prices quintupled ($30 to $150/bbl).
https://oilprice.com/oil-price-charts/block/49
not sure how accurate
Two prices on there 38.70 I think is more accurate 40.40. The 40.40 is old it looks like.
James
Jordon River sorry a bit over an hour.
I lived in the southern states for a year some time ago, and I can tell you this comment resonates with me. I know exactly what you’re talking about. When I came back to Victoria, I thought the people here were the most unfriendly, cliquey, snooty group of people I had ever met. It was almost overpowering. Not just how they talk to others, but even the way they carry themselves down the street. You can actually see it.
What was most amazing to me, is how I never noticed it before I left here and then came back. I suppose it’s like saying, “It’s a strange fish that knows the existence of water”. After many years of being back, I don’t notice it as much – but I continue to be aware of it. This is my home, after all.
Tying it back to real estate, when you go other places, and see other things and then you look at our RE market here, you realize just how foolish we’re being here, and how “cute” and naive many of our collective beliefs are. It’s very much like living in a bubble here, in every sense of the word.
Thanks for posting, Expat.
Good site for energy prices – https://www.psac.ca/business/gmpfirstenergy/
Where can you surf 45 minutes away?
Also, where are you seeing the price for western canadian select? I haven’t seen it above $40 since the beginning of December.
This is good news:
Langford’s Millstream Road overpass improvements to start this month
https://victoria.citified.ca/news/langfords-millstream-road-overpass-improvements-to-start-this-month/
Expat
All about finding ones bliss wherever you live. Glad things worked out.
In the interest of transparency (from newest to oldest identity):
Number 6 = John Drake = John Dollar = Just Jack
Just Jack began posting on HHV in 2008.
The old HHV, which is now a great archive, spans from 2007-2015:
http://househuntvictoria.blogspot.ca/
Reading some of the—in hindsight—goofy stuff people said is instructive on a few levels, not to mention extremely entertaining.
gwac, I’m in the States now. Just came across the blog again recently and I remembered it from years ago so I started reading it again because I find the housing market up there hilarious/terrifying.
Different people are different, so I wouldn’t expect everyone to have my experience, but we earn about twice what we would on the island and really like it here.
Loving the island and not understanding the love affair with knob and tube single pain houses with newspaper for insulation are 2 different things. 🙂
Expat why did you move back? My experience is opposite. Been a lot of places lived in 2 big cities. Than moved here. This is paradise.
Good advice though to experience the world.
“Get out there and see the world”
Great advice. I was raised in Victoria believing we were the smart ones who lived in the special place, unlike those idiots who live in all the other parts of Canada. So we looked down on the rest of Canada and mocked them. Because that’s what you do when you live in Victoria. And don’t even mention the States!
Then I pulled my head out of my ass and got off the island. Best decision I ever made. I had no idea how much of an ignorant snob I’d been.
I was exposed to a wider range of experiences, opportunities and cultures than would have ever occurred if I’d just stayed there for the rest of my life. Now that I know better, I’ll never look at the island the same way. It’s still nice of course, but so are so many other places. And there’s no way I’d be living my best life there.
I encouraged my friends to take the leap when they were young and single but none of them did. Too scared. Calgary is too cold. Vancouver is too big. Toronto is too far away. One excuse after another.
It’s really a shame. I’m a better person for having lived in different big cities, with wildly diverse populations and all the good and bad that go along with that. That new perspective has been invaluable.
Wasn’t it just yesterday that everyone was crowing about Oak Bay and bashing Victoria?
In Victoria, this is a solid financial plan.
LOL. I just turned 40 and moved into my parents basement.
I bought a townhome in Edmonton in 2006 as an ‘investment’.
Maybe getting stoned would have been more fun and I would have ended up in the same place as I am today.
Lol
that is so funny….
Yup. Maybe the point was that after the first two years life has just been a boring cycle of repeat visits to Miniature World?
I have a feeling the black cloud might follow him. The negativity has been fairly consistent.
Victoria has been at various times: “the rainiest city in North America”, full of stick houses ready to collapse in an earthquake”, boring, mediocre, crime-ridden, full of stoners and gridlocked by bike lanes.
Jack has been here more than 2 years everyone.
I’m pushing ten years here and I truly don’t feel like I am running out of nearby adventures and exploring. But if you are mainly into city stuff then Victoria is going to come up short compared to an actual city like Vancouver let alone T.O.
I think basement suites will be a fact of life for the foreseeable future. Perhaps the ability to rent out the worst substandard suites will be affected, which is a good thing.
I wonder how many more people, in any year we look at, rented here for 3+ months, then bought a place, and thus were recorded as “local buyers.”
And when non-local buyers from the Lower Mainland get misclassified as local buyers (because of the stupid definition of “local buyer”), it’s a big deal because these buyers probably tend to a) buy more expensive property, and b) bring huge amounts of cash to the table (i.e., they take out smaller mortgages, if they even take out a mortgage at all).
The revulsion towards anecdotes underscores, for me, just how overrepresented programmers and engineers are on this blog.
The same can be said about almost any Canadian city.
For BC natural gas at Chetwynd ranging between $0 and $2 Can is not great
Jack
Bashing Victoria for 10 years on here seems silly and still living here. One should find their bliss and move to it instead of living in a place that gives them such stress/disappointment and anguish.
Naah, I bet you don’t.
I’m not saying you should quit school and take a bus to Calgary. But if you’re making minimum wage and the best prospect of a spouse is someone that spends a good portion of their lives stoned or playing video games- what the hell are you still doing here.
Get out there and see the world. Leave that enabling parent behind.
Local
Ok I was wondering WTF. All makes sense. 🙂
John Dollar
I have been gone awhile is number 6 someone else from the past?
Number 6
Yep all our young live in Moms basement stoned out of their mines. Ok got it…
Most the young I know have jobs and go to school.
Marko: I took a look at that rental building; is it me or do the one bedrooms seem tiny? Is 580 sq. ft. normal for a one bedroom apartment?
Number 6
Within 45 minutes I can surf
within 15 minutes I can MTB
with 2 minutes I can walk my dog at the beach
within 90 minutes I can be at my cottage
within 4 hours I can be at one of the most beautiful place in the world Tofino.
Good schools
Hospitals close
There is no better place in Canada.
If people want stuff than maybe you can get more stuff in Calgary/Toronto and Vancouver while you work your 10 to 12 hours a day and commute 2 hours to your cookie cutter house in the burbs.
Not every young person will want to move to Calgary. Many will just be content to be stoned in mom’s basement into their forties. Waiting for her to die so that they get the house.
That’s true GWAC, but there are a lot of communities that offer the same or more as Victoria and you get to live near a ski mountain, mile long sandy beaches, or warm lakes to swim and canoe in. What do we have here – Thetis Lake.
GWAC it is nice to have pride in your community but remember Pride goeth before a fall. Victoria is a nice place to live but it’s one of many nice places – it isn’t the only one.
Number 6
Yep all our young are desperate to move to Calgary. All our condos will soon be empty.
BTW Canadian oil is at $40.
Canadian Crude Index •15 mins 40.95 +0.23 +0.56%
Western Canadian Select • 40.40
It could if young people moved back to Alberta for high paying jobs. That could mean a rising vacancy rate and developers moth balling construction plans.
I see more of a very soft landing if anything under this type of scenario. I can’t see Alberta booming and Victoria tanking.
It could if young people moved back to Alberta for high paying jobs. That could mean a rising vacancy rate and developers moth balling construction plans.
Think of it this way. If you just bought one of those new condos and have been renting it for $1,600 a month and young people start leaving the city. That empty condo means a loss of $1,600 a month which quickly adds up to a call from the bank.
Some people like big city stuff some people don’t. I will take the island any day and its outdoor activities and tranquility. Vancouver is just Toronto with rain instead of snow.
Toronto and Vancouver everybody is just trying to impress each other with stuff. No one gives a damn here.
Go to PadMapper to see the places for rent and play with the long term and short term rentals buttons.
Then you’ll understand why people have to pay $1,600 a month for a one-bedroom and why so many condominiums are being built to supply the short term rental market.
TD just bumped their 5 year rate too. Could be a bit of a pickle if Uncle Poloz holds steady next week…
I don’t want to detail my reasons, but I am completely convinced that the shock is starting later this year. Look to the price of oil and interest rates.
Not sure if high oil prices would plunge the real estate market in Canada?
The current $64 USD seems to be a fairly good position for Canada. That is $80 CND a barrel (ingoring the fact that Alberta oil is a bit cheaper, etc.) which is likely enough to turn a buck in Alberta given unemployment dropped 2% YOY and the CND at 0.80 US is still have decent for exports.
Ouch. Okay, thanks for clarifying. They’ve reposted the article with some revision.
My partner and I go there all the time. Never get tired of it. Christmas display this year was just fantastic, and we went several times.
That’s what I’m saying too. The Lower Mainland has everything Victoria has and more.
As for Toronto. I enjoyed the time I worked there and would recommend every young person to live there once in their lives. They should pack up their bags and leave that Oak Bay cabin and move to the Hub and experience what a real city is like.
And since we have now gone to the level anecdotes. I was speaking with a young mother who moved here from Toronto a few years back and misses New York North and would move back there. Victoria to her is backward.
The thing about Victoria is that after living here two years, you’ve seen everything. From then on it’s just repetitiveness. How many times can you see Butchart Gardens or the Miniature Museum.
That is a lot of rental supply coming on in the next year or so. I’ll be interested to see how that impacts homeowners relying on suite income (and often renting out substandard accommodation) to make the mortgage payment.
It isn’t enough inventory to impact the market substantially. Basement suites will still be rented; however, the gouging will decrease.
Keep in mind that this new inventory is very expensive. We are taking $1,600/month for a one bed without parking in buildings like this -> https://www.v1488victoria.com/
6.5%
Can I ask for your indulgence a bit more…I’m still a little confused. It’s less confusing to me if the contract is 2%, and BOC is 5% – you’d be tested at 5%. But when the stress test causes the contract rate to exceed the BOC rate, does your stress test get drawn down to the BOC rate, meaning the BOC rate is the absolute max ceiling in any case?
In other words, what happens when the contract rate is 4.5%, and the BOC rate is 5%? Would you be stress tested to the BOC rate, or to 6.5%? I’m guessing the former, but have they said that explicitly? Their wording I posted below is throwing me off…
Number 6
I will take quality of life over amenities anytime. I came from Toronto. All I need is on this island. Quality of life surged here for me. Lower mainland is no different than Toronto in all the negative stuff. Island is Paradise. Everyone I know who has left for work has found a way to come back.
Victoria averages wages are no different than Vancouver.
Our company pays higher than both Toronto and Vancouver to get the right talent.
For people in the Lower Mainland there has to be a significant discount in house prices for them to move here. There is little reason for someone living in the lower mainland with all their amenities to sell their house and move to an island with lower wages and less amenities unless there is hundreds of thousands to be made.
Have we had much larger numbers from Ontario in the past? or is this just the norm?
Better Dwelling pulled the article.
RBC hikes mortgage rates ahead of Bank of Canada rate decision
Royal Bank of Canada raised its posted five-year fixed mortgage rate on Thursday, the first of Canada’s Big Five banks to make the move ahead of the Bank of Canada’s interest rate decision next week.
RBC increased its posted five-year fixed rate by 15 basis points to 5.14 per cent, with more rate hikes across the board.
“Rate changes reflect recent activity by competitors, and the current costs that we incur for funds on the wholesale market as well as other costs and market considerations,” A.J. Goodman, director of external communications for RBC’s personal and commercial banking division, said in an email to BNN confirming the bank’s mortgage rate changes.
https://www.bnn.ca/rbc-hikes-mortgage-rates-ahead-of-bank-of-canada-rate-decision-1.966188
@Leo
You make a good point about people not understanding the stress test. Indirectly, you make a better point about the low caliber of financial reporting these days.
I find the drop in lower mainland purchases interesting but not surprising.
The low number of buyers from Toronto is even less surprising.In the last couple of years I have had a number of friends come to Victoria and stay with me while checking it out as a possible retirement location. Affordability was never an issue but desirability really was in the negative range. I am not going to pass on their comments since I dont want to get beat up on here. I know our weather is better than Edmonton but it is not like anyone is considering Edmonton as the alternative.
I think most of what that article is saying is if the benchmark rate rises, that coupled with the stress test will make it even harder – kind of a “duhh” statement. I’m guessing the kicker is where they say,
As of 2018, conventional mortgages are now stress tested 200 bps higher than the Bank of Canada’s 5 year fixed.
Yes?
You’re right. But it is never five year benchmark + 2% like what BetterDwelling is writing. No one is going to get stress tested at 7% like they show in graph. That would be catastrophic.
It is the higher of
Contract + 2%
OR
5 year benchmark.
Leo,
I’m a little confused. Didn’t the OSFI say it’s the contract or BOC benchmark, whichever is higher?
For insured residential mortgages, OSFI expects FRFIs to meet mortgage insurers’ requirements in regard to debt serviceability. For uninsured residential mortgages, FRFIs should contemplate current and future conditions as they consider qualifying rates and make appropriate judgments. At a minimum, the qualifying rate for all uninsured mortgages should be the greater of the contractual mortgage rate plus 2% or the five-year benchmark rate published by the Bank of Canada.
Edit: looking at the paragraph again, it almost looks like it could be read two ways.
It will be the greater of this or this, whichever it greatest, versus
It will be the contract rate + 2%, but if that’s less than the BOC benchmark, then we use the latter.
So then, which is it? I guess the latter?
This is the kind of thing that makes me wonder about Better Dwelling. They write about the stress test and drop hints that their interest rate models are being sent out to private clients but then they get completely confused about the stress test and think it applies on top of the posted rates.
https://betterdwelling.com/canadians-are-going-to-see-a-huge-reduction-of-borrowing-power-on-top-of-stress-tests/
VREB Buyer origins report out for 2017.
Lower mainland buyers down from 2016 but still elevated.
Other notes,
Total percentage of out of town buyers down a couple percent from 2016 at 26%
No significant numbers out of Ontario or the other provinces
Buyers from the US up despite total sales down (but still just 120 of them)
Buyers from Asia up but very small (82 or less than 0.1% of buyers)
Yeah I’m more excited about that than more condo supply. I hope that we continue to build more dedicated professionally managed rentals so that the market is not dependent on individuals renting out condos. Amateur landlords are less likely to be good, create uncertainty for renters (selling units in hot markets or moving i in), and drive bubbles in the resale market.
Having adequate stable rental supply (and hopefully more townhouses as well as condos) would make the whole situation a lot more pleasant
“In December the Teranet–National Bank National Composite House Price IndexTM edged up 0.2% from the previous month, interrupting a three-month run of declines. However, only five of the 11 metropolitan markets surveyed showed index increases. The one-tick rise of the composite index was due to a 1.3% jump of the index for the large Vancouver market. The other indexes showing gains were Winnipeg (1.9%), Halifax (1.9%), Ottawa-Gatineau (0.4%) and Edmonton (0.1%); without Vancouver their combined gain would not have offset the combined decline of the indexes for Toronto (−0.3%), Victoria (−1.0%), Calgary (−0.6%), Hamilton (−0.5%) and Montreal (−0.2%). The index for Quebec City was flat.”
https://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/rbc-just-hiked-mortgage-rates-heres-why-its-a-big-deal/article37584568/
The etc. for “Apartment and other” includes stacked townhouses, duplexes, triplexes, double duplexes and row duplexes. So I guess that answers my question. I suppose that means there are more houses under construction in Greater Victoria than the data suggests.
Hmm. Just looking at CMHC’s definitions of Dwelling Type, which are:
A “Single-Detached” dwelling (also referred to as “Single”) is a building containing only one dwelling unit, etc.
A “Semi-Detached (Double)” dwelling (also referred to as “Semi”) is one of two dwellings located side-by-side, etc.
A “Row (Townhouse)” dwelling is a one family dwelling unit in a row of three or more attached dwellings, etc.
The term “Apartment and other” includes all dwellings other than those described above, etc.
Is it possible that a new build with a legal secondary suite in the basement is being categorized as “Apartment and other”? If so, that’s really stupid.
I don’t want to detail my reasons, but I am completely convinced that the shock is starting later this year. Look to the price of oil and interest rates.
On the topic of overbuilding/underbuilding, did you notice that 1,869 of the units currently under construction in Victoria are intended to be rental units? That is a lot of rental supply coming on in the next year or so. I’ll be interested to see how that impacts homeowners relying on suite income (and often renting out substandard accommodation) to make the mortgage payment.
Absolutely. I think it is ridiculous the way parents obsess about getting their kids into the good (rich) schools. You’ll get the same mix of good and bad teachers throughout the system. A good principal can make a bit of a difference in hiring and retaining good teachers.
Kids are attending the neighbourhood school and loving it and they’ll most likely go to Vic High if we are still in Victoria in 7+ years
Hey who said he was going to list for bitcoin? And it’s with Engel & Völkers… I wonder what car they will be using in the YouTube video for this sale?
https://www.cheknews.ca/seller-bitcoin-pricey-oak-bay-property-406406/
The crypto market has been going down hill.for the past few days. Even holding in escrow for a week or 2 could totally change the value. I’d be curious how this contact would be written up.