February: Where are the listings?
February numbers are out so let’s take a dive into what is happening in the market right now starting with sales.
Sales
This is the most negative part of the monthly numbers. Condo sales are down 15% while single family home sales are down 23% from February of last year. It’s not because of inventory either, which is up 6% from last year. And that’s not even the full story. Once you look into the core, the picture is even worse, with sales off 35% and inventory up 12%.
As I said on Monday though, just looking at sales and inventory at face values is not catastrophic yet. Months of inventory at 3.8 for single family in the core is still in sellers market territory so what’s the problem? The real eye opener is how the market is going counter to the seasonal trends. Sales always increase from January to February. Except this year.
It adds up to a market that is deceivingly stable on the surface but is actually slowing quite quickly. We are coming from crazy hot market conditions and going into the spring when it traditionally heats up further but the slowdown is counteracting that. If the slowdown continues we would see a rapid buildup in inventory once the spring market passes. That is, if we get new listings coming on board.
New Listings
Currently the very slow pace of new listings is what is preventing the market from really showing the weakness in sales. New listings are down to the lowest level on record, just under the number we had in the last hot market in the early and mid 2000s (red line).
With reduced inventory, people are concerned about finding a new place to buy so they don’t want to list, however I believe a lot of it is also not wanting to miss out on gains in house values. People generally accumulate properties in hot markets and then try to cash out only after it is clear the run up is over. That is what we saw in the market in 2006 as it started to cool. As people saw the party coming to a close they listed their properties, and listings stayed high until the market started heating up again. We will likely see a similar pattern this time as soon as people realize what is happening.
That said, it’s only February and the bulk of the new listings generally arrive in from March to June. Now that the headlines have switched over from talks of rabid Vancouverites piling on the ferries to bid up our real estate to stories about vacation homes that have to be sold, it may encourage some more listings.
Prices
Despite this weaking, prices still look relatively strong. Although the condo median dropped a bit from January, in general prices are still growing strongly nearly 20% on an annual basis while single family is up around 6%.
You can see that although price growth in the single family segment stalled somewhat, it has not started trending down while condos and townhomes are still strongly upwards. Looking closely at the market areas, the core is by far the weakest, with price appreciation having ground to a halt for near a year now. Westshore single family and condos meanwhile are still pulling strong increases. Will we see some of those markets go negative this year?
On the policy changes
It’s been interesting to see the various hit pieces on the new housing measures being released in the past week. Even here on this blog we seem to have a few new aggressive voices talking about communists and how the government is seizing properties for the common good (it’s fitting since we had poor Snowball killed by some that fancied themselves more equal). The argument from these stories alternate between stating that the measures will do nothing and then saying it will surely collapse the market. The common refrain is that this won’t fix affordability and the common source is – you guessed it – the real estate industry.
That kind of black and white thinking won’t get us anywhere though. Of course there is no one measure that will fix affordability. The foreign buyers tax won’t do it, the spec tax won’t do it, the new supply won’t do it, and the fraud crackdown won’t do it. But they will all help. They will all make housing more affordable than it would have been without those measures. It took 15 years for the markets to go from being connected to local economic factors to off the hook in BC, and it will take many years of focused effort to get it back.
The changes aren’t perfect of course. The inclusion of some recreational areas without a housing problem in the spec tax is concerning, and I look forward to some of these issues being addressed before the tax rolls out. However after reading our attorney general’s speech on how deep the corruption in BC really has gone, I am encouraged that at least someone is finally paying attention and it seems that BC residents agree. Mistakes will be made for sure, but after years of outcry the issue is finally no longer being swept under the rug.
The new speculation tax being worked on by Carol James has to inflict all sorts of uncertainty into the market and end up hurting renters.
For example: Investors outside of the province (and possibly even those inside the province) who were encouraged to create new housing for rental,( because it was considered a good thing to create more rentals) …..might very well find themselves paying this new speculation tax. This will result in the tax costs being added onto the rents whenever possible. So how does higher rents help people who pay rent? Even the “uncertainty” of how or what this extra tax will be…could mean that these people will sell their rental properties as quickly as possible before new taxes are introduced. Again…who loses? The people renting that house will be replaced by people who buy what was once a rental property. There needs to be clarity and a sound decision. I don’t see that happening and so unfortunately ….renters will be replaced by owners, which is a sad outcome.
Correction:
“I do not see the right to punish people that worked hard to own a second house or vacation home even if they leave it occupy is a simple justice.”
Should have been: leave it unoccupied
What tweaking? X money needs to be collected. Previously it was being collected by a fee on Y people. Not it is being collected by a fee on Z businesses where Y >> Z.
Therefore the new fee must be larger than the old fee. You can try to exempt schools and non-profits and that just drives down Z which drives up the fee.
Q.E.D.
New post: https://househuntvictoria.ca/latest
Weaver has no business complaining . He don’t like it don’t vote for it. Very simple. Complaining and voting for it is BS. You vote for it don’t complain.
Reading Vaughn Palmer’s latest column.
http://vancouversun.com/opinion/columnists/vaughn-palmer-ndp-cannot-afford-retreat-on-payroll-health-tax
School boards are crying foul about the new payroll health tax, saying it will be a $70M bill for them. Wasn’t the NDP supposed to be more friendly to education?
And Weaver points out that the NDP decided to go against the advice of its own hand-picked advisory panel on eliminating MSP premiums.
“The panel last month recommended against a payroll tax on grounds that it would reduce business competitiveness and instead favoured a mix of income tax increases and other measures.”
I think this tax needs some tweaking, too.
Or, a few years ago… or, yesterday.
Just a few of the over asks today:
306-100 SAGHALIE RD ask 925, sold 950
207-27 SONGHEES RD ask 499, sold 531
304-1246 FAIRFIELD RD ask 549, sold 575
If people thought the Harper gov’t was inflationary, they’re in for a big-spender treat with the free-for-all lefties.
SweetHome,
“My spouse grew up here and said that Sunnymead floods. I don’t know if all of it floods, but there do appear to be some low-lying areas.”
Most of Sunnymead was an old farm/swam that was/is drained after the market crashed of the 80s, and one of them was a man made creek (not sure it still there. A man made pond was built but got filled in later) that supposedly to drain 5 or 7 natural springs by 5110 Crodova Bay Rd/McMorran Park. And, yes much of the houses in the low area may get wet during raining season, because of the basement/foundation grade was too low. Lake Side subdivision on Lockside Dr. is another low point where the surrounding area drained into that man made pond and again the basement/foundation are too low so they are susceptible to flooding.
“If you have concerns about a particular property, most municipalities have a GIS map on their website where you can look at the contours of an area. I found that a really useful feature when we were looking.”
Good suggestion, but one might want to ask the neighbors in those areas to see how their basement are because we have lots of natural springs on the island and engineering as well as code was pretty relax at in the past.
The Vancouver empty homes tax rules – which will presumably be replaced by the BC rules – an expensive and repetitive endeavor in itself – are sort of out.
Final numbers won’t be out until the fall because of the complaints process but there about 10,000 returns that have claimed an exemption, declared themselves vacant or failed to file at all. The rest are owner or tenant occupied. I’d guess maybe 1/3 of them will be deemed vacant – maybe 3500 max? Got to be lots in buildings where rentals are prohibited and exempt…
The City projected 25,000 empty homes out of the total 185,000 homes caught by the 1% tax.
That is a big tax shortfall in an area that would be expected to have the highest number of such homes in the province. Not sure that will pay for the implementation, administration and enforcement of the bylaw. Next year there are going to be far fewer imo.
https://globalnews.ca/news/4068309/bc-speculation-tax-changes/
Interesting article about the impact of 1.95 business tax. Your municipal taxes will be going up to pay the increase
List of some businesses impacted.
Patriotz said:
“failure, BC style, which is working hard and saving and still not being able to afford a decent house.”
Working hard and saving has never been the road to success in the western world, not for my generation, my parent’s generation, or my grandparent’s generation. Working hard and saving usually equated to subsistence living; conversely, working hard 14 hour days and buying a small farm was the norm in 1901 for my grandparent’s generation and recently the norm has been to work harder and buy a fixer-upper. Unfortunately due to speculators and investors the fixer-upper starter house is rarely available at a reasonable price for our younger generation.
These days, sitting back, doing no work, buying a spare house, going on vacation with HELOC money, sitting around, watching prices rise on the realtor website, smirking in self congratulatory pride is the new norm.
Thankfully the NDP will fix this anomaly in our RE market by driving out speculators and foreign investors. No, I’m not an NDP fanboy, I didn’t even vote for them, but I’m supportive of their recent actions to slowly and methodically impede the speculators. My net worth will drop significantly under the NDP, thankfully, because it increased in the past few years by hundreds of thousands without any hard work on my part. That’s not right and it’s not sustainable and it does serious harm to our younger generations.
This internet is a great invention. Back in my youth a person could rant to a friend or acquaintance at the local coffee shop (they served horrible coffee). These days you can sit at a computer/mobile with your favourite beverage and rant to hundreds without leaving home.
Thanks for the link, Local Fool.
I really hope they get it right.
I don’t think the the BC Liberals have the moral high ground on many things, but he is not wrong here.
James hints B.C. speculation tax being redrawn for vacation homes implications
VICTORIA — British Columbia’s finance minister is dropping hints the blueprint for the province’s proposed speculation tax is being redrawn after a homeowner backlash.
Carole James introduced the speculation tax in last month’s budget, but details were scarce other than saying it will come later this year and it targets foreign and domestic buyers who do not pay B.C. income tax.
She said Wednesday concerns about unexpected tax increases from some B.C. property owners with two properties are being heard.
https://www.cheknews.ca/james-hints-b-c-speculation-tax-being-redrawn-for-vacation-homes-implications-2-426489/
“So what do people online think about Sunnymead. Anybody know about pitfalls or bonuses?”
My spouse grew up here and said that Sunnymead floods. I don’t know if all of it floods, but there do appear to be some low-lying areas.
If you have concerns about a particular property, most municipalities have a GIS map on their website where you can look at the contours of an area. I found that a really useful feature when we were looking.
Introvert, I have quite a bit of skepticism about the accuracy of polls. It is very easy to skew your statistics through clever wording, or just popular ignorance. While it is good that people are trying to quantify the mood of the province, be careful how much you trust other people’s stats.
Aimed at no-one in particular:
Just to be clear, I would be very happy to see prices in Van/Vic come down 10% or even 20% (although that would probably mean some serious badness was going down in the larger economy, which I wouldn’t like so much). This would negatively affect me as a homeowner, but the disconnect between prices and wages is damaging to the fabric of the city.
I support the foreign buyers tax and I advocated for several ideas around speculation taxes. I even think the empty homes tax was proposed with good intentions. I just think it is an extremely blunt weapon that will hurt a lot of innocent people.
Leo S, this is exactly my concern. The more exemptions there are, the more loopholes there are for people who “should” be taxed, and the more misinterpretations there will be for people who “shouldn’t” be taxed (based on your opinion of should and shouldn’t).
Ha! It shows you are providing an important place for people to debate!
Some polling, by Insights West, on the new taxes:
http://vancouversun.com/opinion/op-ed/mario-canseco-on-housing-and-the-budget
Well said Patriotz. It’s an attempt to cool off an overheated market that government created . It’s far beyond the “get a better job” stage.
HHV chitter-chatter index at an all-time high? Market changes must be in the wind…
patriotz,
“The present RE bubble is the direct result of government policy. At no other time in our history have prices been so out of proportion to incomes. Those who want to end this are not asking for a handout, but simple justice.”
I have to agree with you that the policy of keeping interest low among many other policies, but they though at the time that was the correct course of action. Now aren’t the Bank of Canada is reversing and already implementing rate increase?
I do not see the right to punish people that worked hard to own a second house or vacation home even if they leave it occupy is a simple justice. I strongly disagree with this tax grab as Canadian citizen who only own 1 house. To me this tax is not thing more than robbing from Peter to pay Paul therefore this tax is not going to solve the government out of control spending, curb foreign ownership, or “speculative” ownership. IMHO, it going to prevent many hard working Canadian on enjoying vacationing in their own comfy homes in BC. This legislation would give more opportunities to big business, be it locally or internationally to be able to pick up homes, to rent them out and sell them at a later date for profits.
We had a good experience with Monterey Middle School and OB High. I think most schools are pretty good. I’d make the choice based on the neighbourhood and house amenities. For us walk-ability was high on the list. For you it might be house size for $ in relation to other factors?
And really, once you buy you’ll probably really enjoy it wherever it is. Victoria is a nice place to be, especially if you mostly work from home and have a limited commute.
I came from a poor Canadian family and did the same. I find I do have little sympathy for people who are not willing to work hard and save until I remember that maybe what I did was not the best thing for child. I would not want my children to work like that. Many things get sacrificed that are valuable.
I don’t know what the right answer is, but we do need to support medical services, the elderly and young who cannot provide for themselves… and affordable housing. People are not asking for free housing, but social policy seems to be turning in a direction that does not recognize the value of working hard and accumulating assets for retirement. Those people that do should now pay even more without tying it to realized capital gains or recognition of past taxes that have been paid.
Jesus i need to write a new post before the server collapses under all the comments
QT you are a credit to the Canadian fabric. Yes at some point we all are immigrants to this spectacular country. I grew up in Zimbabwe so I can totally appreciate fears of too much government power or recklessness.
A point to the “Fairness Tax” I think every BC resident should be willing to exchange their homes 6 months of the year with an Albertan family to appreciate the incredible climate and bounties of this amazing Province ! That would give a new meaning to fairness !
In fact many of them came to get free land from the government. They certainly had to work to get something out of it. Also, when they thought those at the top were getting too much of the fruits of their labour, there were rebellions (fortunately for those at the top, not wholly successful, but they did lead to reforms).
Nobody (well almost nobody) is asking for free housing, etc. What they are asking for is the same or better opportunities in life that their parents had. The present RE bubble is the direct result of government policy. At no other time in our history have prices been so out of proportion to incomes. Those who want to end this are not asking for a handout, but simple justice.
QT,
I commend you for your life experience and having to work young. So did I, so I think I know what a real job is. I worked most of my spare hours from 12 to 14 after school and onward as my parents were in tough and scraped by.
You seem to be blowing this out of proportion. It’s a tax to reel in an out of control housing market, not instill some sort of insane dictator into power. There’s no Red flags and tanks in the streets. No one will die because the price of houses go down.
Hawk,
Here one for you that I missed in the last post.
My father was a professional in Vietnam and his first job here was a laborer at a construction site that Manpower agency found for him. His employer cheated and pay him less than minimum wage for full time work and he earned $920 a month mean while welfare for my family would have been $1200 a month. After working for 3 months he went back to Manpower asking for a new job because his employer has declared bankruptcy and weren’t paying my father. Social workers stepped in at this time and was telling my dad to apply for welfare and they will also make up the different of $280 per month for the 3 month that he worked.
My dad shocked the social worker by telling her that “No thank you, we are here to work. We are not here to for handout.” And, less than a week later I started working at 12 year old at 20-30 hours a week, gradually 40-50 hours a week at 14 year old during school, and 60+ hours a week during summer breaks. That said, I’m very grateful for this country to give me to allow me to live here and give me all the opportunities in life that every Canadian have.
We reached 500 replies on this single post. woo-hoo!
No, Sunnymead, is not same as Broadmead, other than resides next to it. Sunnymead is like a upgraded Gordon Head, bigger lots, bigger and newer houses, and better looking yards with no big trees. Not much anything else really, no service facilities, no fire hall, no seaplane, no homelessness, and no tourist traffic. But it does have very low walking scores.
I was an on call teacher in Victoria and worked and volunteered at a few schools. They are all good. My favourite is Vic High which probably doesn’t have the best reputation. Oak bay and Claremont are pretty snooty and the kids have quite a sense of entitlement. The sports and other extra extra curricular activities are wonderful.
Vic High is a very inclusive school with kids from diverse backgrounds. So if your child is a bit of a nonconformist they will fit right in.
But Victoria schools are really great. Good teachers and admins scattered throughout the system.
Hawk,
“This is where the right wingers lose it. The old cut your hair bullshit is pathetic. So all benefits to all people should just be cut off, no help for extreme daycare costs, medical benefits for the few who have tough times, seniors, etc ? AKA assholes.”
Do you think most people here that you called right wingers and I haven’t considered all of what you said?
I’m a refugee from the Vietnam war. My family and I are very grateful to be able to immigrate to Canada, to have the opportunity to go to school, the opportunity work hard with out worrying dying or wounded from bombs and mines. I have lived trough a dictator government, Communist government, and now Democratic government that I truly believe is the best so far. However, I disagree with the government on its spending and cater to the loud mouth that cries at every opportunity that they can get, as how hard their lives are when they are not willing to go out there to better themselves by having pride and hard work.
Old people, medical services, and children should have help from our society, and as a good society we should lend a hand to help. But as a society why shouldn’t the parents or children of older people have pride to take care of their family? Where is the pride in one selves?
Please stop cry me a river and travel to see how the rest of the people around the world live. They would be so grateful just to have a job and not live in a war torn country. Or, keep on crying till one day you have a communist dictator come into power like Hugo Chavez to give you everything that you dreams of. To make everyone are equally poor except themselves, and good luck at finding a job or food then.
PS. Just to let you know I (started working at 12 year old, full time at 14 during school, and perhaps 60+ working hour per week during summer break) and many people that I know worked here in Canada since we were young to help put food on the table and we have no problem with hard work or complaint about volunteer at soup kitchens on our spare time, or volunteered at hospitals to help the old and sick.
Not sure if this was discussed but a couple other items worth mentioning and their impact on housing, direct/indirect.
Transfer tax increase for homes over $3M – 3% to 5%… This is a significant increase to pay. While I’ll likely never be in that category there are a number of properties in that range it may defer prospective buyers.
MSP premiums to be paid by businesses with salaries equally more than $1.5M to pay 1.95%.
That could be the difference in relocation or moving on from a family business such a farm that employs a large number of employees.
gwac
“Broadmead is the opposite in everyway of sunnymead. Good or Bad. Cannot lump them together in a broad stroke description.”
Perhaps, you are right. Yes Broadmead certainly have some large lots with lots of old trees area that part of the old neighborhood on Lockside. If one is lucky enough to have the finance to purchase a house in Lockside area nowaday is great. For the mere mortal one have to settle for a lesser home if one can afford the out outrageous price.
A lot of foreigners don’t want to fess up by the looks of it.
More than 2,000 Vancouver property owners fail to declare status for empty homes tax
http://www.cbc.ca/news/canada/british-columbia/empty-homes-tax-1.4566199
“Funny that you said move to right wing Alberta, but it is okay to stay put and demand that the government must pay for their accommodation. ”
This is where the right wingers lose it. The old cut your hair bullshit is pathetic. So all benefits to all people should just be cut off, no help for extreme daycare costs, medical benefits for the few who have tough times, seniors, etc ? AKA assholes.
Lots of people have great jobs, and still can’t afford basic living costs on the west coast because of speculators and foreigners who jacked the market. Those righties who own can’t handle the thought that prices might go down trying to remedy a serious situation that is out of control shows the greed factor in spades.
Wait for the real shit storm that’s coming. You’ll be blaming yourself rather than a government that was voted in to make changes. You got emergency rates the last 10 years, now it’s pay back time with higher rates and tightening credit for the housing party. Suck it up.
“The people spoke and voted for drastic measures. If you don’t like them then move to right wing Alberta or wherever your redneck/stuffy shirt ways are popular.”
Funny that you said move to right wing Alberta, but it is okay to stay put and demand that the government must pay for their accommodation. How about, cut your hair and get a job, or move to where there a better job opportunities, then move to where your budget fit once you have accumulate enough money for you lifestyle.
The founder of Canada didn’t complaint about why they are not getting free housing, schooling, money, food from the government. They just simply went out and get money by work hard and are proud of it.
QT
Broadmead is the opposite in everyway of sunnymead. Good or Bad. Cannot lump them together in a broad stroke description.
Barrister,
“My question may have got lost in the chatter. What do people think of Sunnymead as a neighbourhood. The good and the bad.”
Sunnymead/Broadmead are just another neighborhood no bad things or great things going for it. It was build starting from the late 80s, and through the 2000s. The houses are all look the same and are stucco with some trees that finally fill in the neighborhood. They were the first project that perhaps copy the American suburb look of mass production houses.
“So could we put this “communistic” stuff to rest.”
The people spoke and voted for drastic measures to the housing crisis. If you don’t like them then move to right wing Alberta or wherever your redneck/stuffy shirt ways are popular.
Meanwhile people are leaving San Fransisco en masse for the mid west to get cheap real estate and have a life. $2000 U-Hauls impossible to book.
San Francisco Bay Area Experiences Mass Exodus Of Residents
Soon to be ex-Victorians:
“I loved it here when I first got here. I really loved it here. But it’s just not the same,” Dabak said.
http://sanfrancisco.cbslocal.com/2018/02/08/san-francisco-bay-area-mass-exodus-residents/
Andy7,
“I would doubt the NDP is trying to directly harm BC taxpayers as that is their base, so I think there will be some tweaks to the tax…. what exactly, I guess we’ll see. If you have an issue with this tax, then write in to the government, and explain why. And if you support it, then write in and explain why, or any changes you’d like to see made.”
No the NDP are not trying to harm BC taxpayers, but they are spending just like all government agencies. And, what a better way to come up with the short fall by raising taxes or better yet come up with another tax. It is not in their interests to curb budget because they will face budget cuts if they spend less than what was allocated to them. Because, the system is design to punish hard work and efficiency while reward laziness and inefficiency.
Thanks introvert – that pretty much sums up the difference between Victoria area high schools. That said some folks struggle mightily to get their kids into “richer” schools like Oak Bay. Maybe the wealth rubs off?
You are a font of misinformation.
We don’t have deeds of tenancy in fee simple. We have title certificates showing indefeasible fee simple ownership in BC. This is what is registered:
You can be registered as the sole owner or joint tenant or tenant in common. The use of tenant has nothing to do with tenancy, it is a legal construct assignment or limiting inheritance rights between two or more individuals.
Fee simple ownership is ownership that can be deeded, transferred, sold and leveraged. It can only be expropriated for a public purpose and for compensation – which is very rare – or seized for debt payment or criminal law penalties. It is full ownership subject to registered encumbrances.
Taxation is not ownership. Taxation is a governmental right pursuant to the constitution to raise funds to promote good governance and provide services. It is subject to reasonable limits and fair administration rules.
Aboriginal title to private lands may require compensation from government in some cases, but it does not supersede or replace private fee simple ownership. There is no ability for a FN to expropriate or otherwise take these lands.
Neighbourhoods usually are defined by the schools. Broadmead/Sunnymead are both attractive because of lochside/royal oak/ Claremont. Houses if priced right go quickly in the area. Lots of parks. Need a car for each adult. Bike path all the way to downtown.
Looking at today’s Greater Fool it appears I channeled Garth earlier today. I can offer no apology – synchronicity is as synchronocity does. Take it up with the cosmos. Speaking of our new 2% outrage, he says
“This is what happens when policies are based on envy, jealousy and (clearly) hatred. Ethics bow to expediency. The lowest common denominator prevails. Politicians make citizens believe they can be better off simply by taking from others who have more.”
It also appears that Josh posts over there under the handle “Maxx”.
Introvert,
“B.C. was in deficit billions before the GreeNDP took power; accounting sleights of hand made it appear as though surpluses existed.”
Please show me one great BC government since 1980, because I have live in BC since then. IMHO, no one party is great, because they are all human therefore they will gravitate toward protecting their friends, family, and individual interests over that of the public. That tend to be keeping their jobs and pocket full over that of the deficits and they all cook the books to make things look good while creating new jobs to hire their buddies.
There is dirt on the Liberals, so as dirt on the NDP, and look no further than the casinogate and fast ferry fiasco of the late 90s that almost completely wiped out the NDP in 2001.
Sunnymead is nice. Not as gloomy as Broadmead. Not all that walkable though and definitely doesn’t have much character but that’s overrated.
Bingo,
“Spectrum was sketchy when I was in HS, but I’ve heard it’s good now… someone else would have to chime in. I was in the Spectrum catchment. All my friends ended up at Claremont or Reynolds to avoid Spectrum.”
IMHO, all school go through its phase, however for what it worth all school in Victoria is pretty much equal to each others, because it all depends on the individual.
I went to Spectrum in the mid 80s because of it high academic concentration at that time, while living within 1 km from Oak Bay and Vic High.
Luke,
“The thing I agree with about this statement is Canada does seem to have a large segment of the population that is unsuccessful in life. Hence, it’s easy for them to be envious of those who have achieved success, as we see churning out on this thread/ blog. Largely though, I find that often it’s because compared to many other countries opportunities for success here are limited. Only some will get lucky and be rewarded. Often it’s Government jobs supported by taxation that bring success. There isn’t really much industry to create success with is there? My brother for ex. Felt he had to leave Canada to achieve success and in Hong Kong it worked for him. Other family members in the UK have had an easier time with the more diverse economic conditions there than many of my family members in Canada who remain ‘stuck’ quite frankly. Stuck in a rut is a good way to describe many but not all Canadians.”
I have to agree, many younger Canadian tend to complaints specially the millennials. My nieces and nephews are in their 20s and are first generation Canadian/Victorians. They have no motivation while they jump on the foreigners are bad bandwagon they complaints why their jobs are paying so little and they all have university degrees. The funny thing is that they do not realize that their grand parents were professional who came here that would willing to work as cook, cleaners, etc… to put food on the table when we first came to this country.
My wife is a pediatrician from oversea, and she currently working at the Royal Jubilee hospital as a nurses aid after 2 years of volunteer and schooling, and she was a waitress at a local restaurant (currently she is upgrading highschool courses to enter nursing school at Camosun College, because her credentials aren’t accepted here). Many of her and my coworkers/friends are all experienced overseas professionals from engineers to physicians, and they work as cleaners, cook, dishwasher, wait person, parking attendants, labourers, at coffee shops and nail salons .
I have said before, people in this country no longer have ethic and pride in themselves, because it is easier to complaints over that of hard work.
I think sunnymead is “nice” but doesn’t have much character. Probably like it’s inhabitants… That being said I think it’s one of the nicer parts of Victoria.
I’m an EE and went to a crummy high school (not in Vic) and have never been in a robot comp. I was more interested in academics in HS sadly. I honestly don’t know if something like that even existed at my HS. But I have definitely built a robot so I guess I got there eventually.
gwac:
Yup. That’s exactly how I’d sum it up.
There are some nice places there, but also a lot of peach and pink stucco boxes, some with pillars (shudders).
Broadmead has much more interesting architecture (if you like “West Coast Modern”). I’d take any house designed by Mike Nixon. A few have come up lately like 961 Sunnywood Court. His designs have aged well (if you are into that style).
Grant,
I’m sorry for the HVAC noise in this forum, and I’m not a real estate agent but lived in Victoria for almost 4 decades and worked in IT till 2004. However, I have to agree with everyone that it make sense to rent for a few months before you buy so that you know what you are get into. Location is important. Highschool are pretty much everywhere in town, and they are all within walking distant or 10-20 minutes biking/bus. Anywhere near UVIC or Camosun College is now an enclave for student rentals if you don’t mind that, however I’m sure that you can still find a few hidden gems in those area.
As you already have a sense, the price of a home anywhere in town is out of reach for the majority of the population, hence Westshore/Langford is where most young professional migrate to. Langford got it bad rap because of the over developed Bear Mountain, small foot print lots/houses of Westhills and Kettle Creek as well as rush hour traffic, but there are still many good homes in good area with reasonable price for the average professional.
My brother inlaw is retiring from IBM this year and he currently reside by Millstream Village in Langford for the last 15 year, and I also live in Langford by Florence Lake. And, we enjoy the outdoor because there is more space out here. Everything we need from shopping to entertainments are within walking distant or 5 minute drive and free parking are provided. You can’t say the same for living in downtown Victoria, because it would take at least 10-15 minutes just to find a pay parking space and you still have to walk to and from the shops, etc…
Since always actually. Your deed says “tenant in fee simple”. Since the Crown has the authority to level any level of taxation on RE, it is the ultimate owner. I guess I should also note that in most of BC the First Nations have never ceded title, VI is an exception I think.
Sunnymead is nice. Not a lot of trees like its neighbour broadmead. Close to the ocean. Excellent Schools. Well maintained. Low petty crime. Only thing I do not like. Too much stucco.
@Luke
I’m curious, what’s your definition of unsuccessful/ successful?
My question may have got lost in the chatter. What do people think of Sunnymead as a neighbourhood. The good and the bad.
Patriotz:
I believe that you misread my post. I want a 2% tax on all foreign property, rented, empty or otherwise throughout the whole province. No exceptions, no exemptions. To be clearer if it is owned by a foreigner then an additional tax of 2% with the clear intention of bumping it up further every year until they sell out. Our real estate market should not be their piggy bank. Our real estate market has no chance of reflecting local incomes as long as foreign money is involved. The net effect is that people in Vancouver who can barely afford to rent will now be able to actually buy their condo.
islandscott:
That’s awesome. I think I would have loved that. I did precious all technical in school and think it would have been great for me (as far as deciding what I wanted to do and having a practical background to tie things I learned into it). Probably would have ended up an EE if I had done stuff like that in HS (which wasn’t on my map until it was too late to go that direction).
Caveat emptor
The stereotype I grew up with was Spectrum and Vic High were vocational schools. I don’t even know if that was actually true. I knew very few people that went to either, though the few I knew fit that stereotype. Also in the case of Spectrum the feeder schools had reputations (Colquitz and Shoreline).
Just another thing ingrained in people that grew up here.. like “Langhole”.
Currently, Victoria’s schools don’t differ significantly in terms of what a dedicated student can get out of them.
The only thing that differs a bit is the socioeconomic status of each school’s catchment.
@Patrick
First thought when I read this is I think the NDP are trying to catch the shifty money with this spec tax — for example, the satellite families and foreign students living in multi-million dollar homes that are bought by mom and dad yet pay no to minimal income tax or that sit empty while local, working people struggle with housing and rental costs. With so many homes left vacant across the lower half of BC due to foreign money and speculators, I think something like this needed to be done as a start to see the effect.
I would doubt the NDP is trying to directly harm BC taxpayers as that is their base, so I think there will be some tweaks to the tax…. what exactly, I guess we’ll see. If you have an issue with this tax, then write in to the government, and explain why. And if you support it, then write in and explain why, or any changes you’d like to see made.
And defeats the purpose of having a vacation home. Not to mention many of these homes have no winter rental market and the new limitations on fixed term leases may mean you cannot get someone out to use it for the summer. Since when does government care about increasing incomes of people who do not wish to do so in this manner?
So does selling all primary residences I suppose.
Since when is the government the owner of private homes? It is not the government’s RE stock, it is something purchased by individuals. Since when has government taken over the free market system to this degree? Not a reasonable limit.
See above.
B.C. was in deficit billions before the GreeNDP took power; accounting sleights of hand made it appear as though surpluses existed.
Great to hear. I didn’t want my comment to imply that Spectrum actually is bad or that I think it is bad. Just that some parents are leery of it most likely based on a reputation from some time ago. There are also folks leery of Vic High for the same reason (reputation from before). But the kids and families I have spoken to with direct experience of Vic High liked it.
My oldest is at Spectrum and it’s been great so far, especially with his interest in engineering. For example they are one of 3 local schools entering the FIRST Robotics Competition this year which has schools entered from Alberta, BC and a few US schools. He has been able to stay late after class and go to the school on weekends to work on their robot.
Bowser is covered by the spec tax area too so that does not help. There may be an exemption for rental restricted buildings as there is for the Vancouver tax.
I’m not sure if this real-life scenario (from my extended family) will get caught up in the tax:
Retired couple left Victoria 10 years ago and moved permanently up to Bowser area. Purchased a condo in an over 55/yr rental restricted building so they could be close to the rest of the family. Come down to Victoria once or twice a month to help kids/grandkids.
I suppose they could switch the condo to their primary residence to get around the tax?
Again, incomes change over a lifetime. Most vacation home owners are older and inherit or buy with home equity. When they retire their income is usually much more limited. Going forward people may make that choice for new purchases, but that doesn’t help existing homeowners.
I disagree that the intent of the law was to discourage second home ownership by BC residents. The intent was to curb undefined “speculation”.
Don’t believe me? Don’t blame you because if you look at the fact sheet has no consideration of this. Why do I still say that?
Confusing. Yes. Poorly thought out and coordinated, yes? Surprising, no. It is a new tax after all and probably developed by a relatively small working group within the province in a short timeframe with no public consultation or consultation with municipalities.
So the Premier thought one thing, Carol James thinks another (it’s a “fairness” tax – again undefined and was not rushed), and nobody gave adequate consideration to the collateral damage or the wishes of the particular communities subject to the tax.
Not lots, but the individual examples will have a lot of weight. It doesn’t take a lot of stories of a poor pensioner that inherited a shack on Saltspring that is facing a large tax bill to turn the public opinion on this. Hence I believe they will make tweaks to minimize the number of those examples
In fact this was in the budget. With regard to charging foreign owners 2% province wide, I doubt there are many outside the spec tax zones, probably not worth the administration cost.
https://www.cwilson.com/b-c-budget-2018-update-province-to-require-pre-sale-condo-registry/
“The 2% property tax should have been applied to all property owned in the province by foreign owners. This would have actually forced a lot of new inventory on the market”
Couldn’t agree with you more Barrister.
All the monies received from the foreign owners 2% tax plus the 20% PTT should go directly to building low income rental housing.
There should also be a new form of obligatory registry ownership for multi unit condominiums where all units are registered prior to construction and any flips have to be recorded and taxed. The units would begin by being registered to the developer and then into the names of pre-sale owners as they were sold.
Renting out a second property, instead of letting it sit empty most of the time, increases your income. So does selling it and putting the money into productive investments. Really the government is trying to increase the economic efficiency of its RE stock. So could we put this “communistic” stuff to rest.
))) patriotz: Success, BC style, seems to mean getting into the RE market decades ago and then watching the price balloon through no effort of your own. As opposed to failure, BC style, which is working hard and saving and still not being able to afford a decent house.
Yes, and the solution is for the NDP/Greens to increase taxes on all of those groups, insuring failure for all.
They can’t afford current prices in the spec tax areas anyway, so I don’t think the tax will change much for them.
It’s true that I didn’t see this coming when I first got into the housing market in Metro Vancouver in 2001. And it’s also true that hard work wouldn’t get me anywhere near that now. But we must be careful not to get too communistic about things and insist that everyone should be equal. That never works. Government intervention coming now is too late and somewhat misguided. Things will never be perfect that one can be assured of.
However, one can be hopeful that in the future they are able to strike more of a balance…
caveat emptor
That brings up something else.. overall people may give good reviews but different schools have different strengths. Music (and what in particular, concert vs marching vs jazz), drama, sports etc.
I have 0 clue about the current state of things. Back in the day Spectrum had strong basketball but their volleyball wasn’t strong iirc? Reynolds has the marching band, good at BB, Volleyball and maybe soccer (though maybe Mount Doug had better soccer?). Equimalt and OB had good jazz bands. Claremont good drama (though I think Spectrum a better theatre?). Vic High and Spectrum had the auto shops. Anyhow, all useless info now (and quite possibly not correct, even historically).. point being if your kids have particular interests, certain schools may be better than others.
Grant:
There is what might be a nice house at 4686 McMoran Way. It is in an area called Sunnymead which I always thought was one of the nicer areas in Victoria. Pretty easy drive to both the airport and Uvic (google the exact time but probably under twenty minutes.) About a half hour down to the Empress Hotel in bad traffic. You dont want to to too close to the University since a number of the houses are filled by students at six to a house.
I am not a real estate agent or any sort of expert. So what do people online think about Sunnymead.
Anybody know about pitfalls or bonuses?
In areas where the tax is implemented it will discourage second home ownership that aren’t rentals. There is no doubt about that, since that is the intent of the law.
Many BC domiciled second home owners will have the income such that they can offset the tax and won’t pay.
Some BC domiciled second home owners will not have enough income to offset the tax. They can put their property onto the rental market sufficient to avoid the tax (increases supply), sell the property (increases supply), or pay the tax (help funds affordable housing)
Any folks selling now as a result of the tax are likely to sell at a profit. Over time the tax may help adjust prices down in some areas – this is a positive as well in over-priced markets.
Current purchasers of BC vacation homes are likely to be high income (how else do you finance a discretionary purchase of 200K to multi-millions) and thus not subject to the tax. Lower income vacation home buyers are likely as a result of the tax to steer their purchases to areas not included in the tax (which may actually benefit some relatively depressed parts of the province)
Success, BC style, seems to mean getting into the RE market decades ago and then watching the price balloon through no effort of your own. As opposed to failure, BC style, which is working hard and saving and still not being able to afford a decent house.
That is exactly what’s wrong with the province IMHO.
I’d echo Bingo that there are probably no truly bad schools. That said I know people that live in the Spectrum catchment and are trying to avoid it. Our family knows families with kids in Oak Bay, Vic High, Esquimalt, Reynolds and Stelly’s. Pretty positive reviews of all five of those schools. Victor Brodeur is also a good public option but obviously only if your kid are francophone or fluently bilingual.
Correct in form, but not substance. The legislation if implemented as the government fact sheet states will make it prohibitively expensive unless you have a very high income/asset base outside of your primary residence and vacation home. We know for the majority this is not the case based on stats can figures. This is why when we have terms like substantive equality.
My eyeballs are now on the floor from rolling so hard.
A major problem with the speculation tax, that I don’t think the NDP will be able to be fix is that it is an arbitrary, yet huge tax at several levels.
Whether you pay it on a property is arbitrary, depending on:
– where the property is located in B.C. one town you pay, the other you don’t.
– how much income tax you pay to offset the tax you owe. Maybe you get sick and go on disability so you don’t pay tax that year (disability payments are tax free). So then you pay the spec tax that year. Which could be a huge bill for you.
– what province you reside in. Maybe you get transferred from B.C. To Alberta for a couple of years. So now you have to pay tax on your BC cottage.
Any kind of tax advertised as “fair” should affect people equally. Our society has correctly decided that progressive taxation is fair because rich can afford more. But this spec tax isnt like that. It collects a huge tax from some people with a single property or multiple properties, and leaves others with similar properties untaxed. Hardly fair.
I cannot see how they can fix all these arbitrary aspects of the tax. We will be reading lots of sad stories of people affected by this tax, and I hope the NDP pays dearly for it in future elections.
Even worse for the NDP will be if the tax works as intended, and house prices fall substantially in the most populated voter regions of the province. There would be huge job losses associated with a rapid fall in prices.
The first proof of Godwin’s Law I have seen on the blog.
Grant:
Then I’d suggest somewhere a reasonable distance to the airport (not Victoria proper or Oak Bay). Saanich East or West tend to be pretty central (within about 20 minutes to anywhere.. except out west during rush hour). Saanichton/Central Saanich will get you closer to the airport but farther from UVic. Of course, I’m not a morning person. Ymmv.
I’m no pro on secondary schools (too far out of HS and too far away from kids in it). That being said I’m not sure there are any truly bad secondary school in greater vic anymore.. definitely was when I was in HS. Also, I assume you mean public schools (since we don’t have a huge selection of private schools.. if you were going that route you’d probably know which one).
Mount Doug is good (some posters here graduated from there), but Gordon Head is overpriced and you’ll end up with junk for 900K. Claremont and Reynolds are good (to the best of my knowledge.. know quite a few people that graduated from both and all are doing well), Claremont being a little more affluent due to its area. Both of those put you in nice central areas. Reynolds being easier to get to UVic (short drive and plenty of bus options).
Spectrum was sketchy when I was in HS, but I’ve heard it’s good now… someone else would have to chime in. I was in the Spectrum catchment. All my friends ended up at Claremont or Reynolds to avoid Spectrum.
Stelly’s is good (I think?). More bang for your buck in that area, closer to the airport but not the easiest to get to UVic (though less than 30 minutes by car). Personally I like Brentwood Bay a lot. I think living close to BB village would be fun.
Sidney/North Saanich is more than 30 minutes to UVic as is the West Shore (depending on time of day… might be able to get to an evening class in 20 minutes, but a class first thing will be an hour).
Recreational property has been hit and miss in the past. If you bought a lot on Chesterman Beach in Tofino 30 years ago as a recreational property you have made out like a bandit. If you bought a condo or chalet on Mount Washington 30 years ago it is unlikely that you have even matched inflation.
IMO anyone buying recreational properties at current prices should be looking at it as in investment in lifestyle not necessarily an investment that will bring financial returns.
Thank goodness that isn’t in the legislation.
Luke well said.
The left and Right are battling it out right now across the globe. Left is winning in Canada but I think the tone is changing here. Fed will most likely go conservative. Alberta will be back to conservative and I doubt the little experiment here will last more than a year. One economic bump and the last budget will throw us into a deficit of billions.
top 10% make 35% of income and pay 54% of the taxes.
https://www.fraserinstitute.org/article/top-earners-already-shoulder-much-of-canadas-tax-burden
The thing I agree with about this statement is Canada does seem to have a large segment of the population that is unsuccessful in life. Hence, it’s easy for them to be envious of those who have achieved success, as we see churning out on this thread/ blog. Largely though, I find that often it’s because compared to many other countries opportunities for success here are limited. Only some will get lucky and be rewarded. Often it’s Government jobs supported by taxation that bring success. There isn’t really much industry to create success with is there? My brother for ex. Felt he had to leave Canada to achieve success and in Hong Kong it worked for him. Other family members in the UK have had an easier time with the more diverse economic conditions there than many of my family members in Canada who remain ‘stuck’ quite frankly. Stuck in a rut is a good way to describe many but not all Canadians.
So, while this situation illustrated by my own experience with a very large extended family who live all over the globe is only anecdotal it’s food for thought that we shouldn’t necessarily blame some Canadians lack of success on them but perhaps look to lack of opportunities in what is a somewhat hollowed out country. We see it south of the border as well with Trump trying to revive the rust belt and increased mortality rates among the redundant white former middle class there.
Now back to BC – we had a big problem with extreme corruption from Asian sources which my brother can allude was/is also a problem in Hong Kong. Has the new Government done enough to deal with it? Personally I think a foreign ban was needed but there should be some repercussions from what the NDP just did. As for the misguided Speculation tax… we haven’t seen all the details but I’m not as hopeful they’ll get this right as some on here. I don’t think they went after speculation in quite the right way. For ex, going after vacation homes as sort of punishment of success is misguided, imo. But we will see how the details on that iron out…
While Jerry is right Canada seems to have an underlying tone in its society that success should be punished ( the other crabs pull down the one about to escape the aquarium). Also spare a thought for the many Canadians unable to achieve success due to limited opportunities and until recently unfair competition from foreign globalized corruption.
Also this one (3beds+den):
https://www.realtor.ca/Residential/Single-Family/19135601/4064-Feltham-Pl-Victoria-British-Columbia-V8N5Y2
There are no fire hall, no seaplanes, no homeless people (as I know of) in the areas of these 3 houses, just midgard road has more traffic.
Paging Leo…
Rebates offered for vehicle chargers at home and at work
https://www.saanichnews.com/business/rebates-offered-for-vehicle-chargers-at-home-and-at-work/?utm_source=dlvr.it&utm_medium=twitter
Grant,
There are two houses very near UVic in the market now, seem to fit what you described:
https://www.realtor.ca/Residential/Single-Family/19131883/1821-Midgard-Ave-Victoria-British-Columbia-V8P2Z1
https://www.realtor.ca/Residential/Single-Family/19127394/1742-Howroyd-Ave-Victoria-British-Columbia-V8P3C1
(Note that I am not a realtor, but an IT worker in my previous life)
Hi Grant. We moved to Victoria from Calgary about 11 years ago. We love it here, and I bet you will too.
Thank you Barrister, Leo S and 3Richard Haysom for your direct replies, the additional information is much appreciated! Barrister:
I’m fortunate to be in IT and work exclusively out of my house, although traveling to client sites (throughout the world) every 1-2 months is typical. So a commute isn’t something I’ll typically have to deal with (but we’re not sure what my wife will end up doing long term.) We’re definitely house people (we have a dog and like not sharing walls). Since I work out of home I really need either a dedicated office or a 4th bedroom, so this pushes us into a larger house… which makes buying in the core a very pricey proposition. At this point in time we’re looking at a max of $900K, less would obviously be better if we find the right fit.
Interesting..
I doubt we can get the house we’re hoping for in that area, but regardless it’s another interesting data point to have.
I used to live in the SF Bay Area so I’m somewhat used to homelessness.
The other big things for us are a good secondary school for my 2 daughters, and if we really look far out, being close, or at least within a reasonable commute (< 20-30 minutes) to UVic will likely be a big bonus.
Yeah, nothing like watching two boobs duke it out.
Love to see Hawk negotiate reality.
This is interesting:
https://betterdwelling.com/canadian-real-estate-just-saw-mortgage-credit-fall-for-the-first-time-since-2011/
Jerry – Your vocabulary is strong, so you’re clearly educated. May I suggest we elevate the discourse and drop the ad hominem attacks? Attack the NDP policy all you like, that’ll best advance your argument. Ad hominem attacks merely expose one’s bias and directly undercut just about everything else someone has to say.
Sure, in addition to property transfer tax increase (from 2% to 5%) for $3M and over houses in new rules, there could be something more about it coming if we go to the fairness route. Also aren’t there some reflection in the yearly property tax?
Hi Grant:
If you provide some details as to what type of property requirements you have such as are you needing to commute downtown, looking for a house or townhouse or condo, ideal size of house and price range then I believe that a number of people here can give you suggestions and great tips on Victoria.
Let me start by providing a minor tip. Make sure that you know where the fire hall is located in any neighbourhood that you are looking in. I almost bought one house that was hidden just out of sight of the Oak Bay fire hall. My real estate agent sort of neglected to mention it. I did enquiry from a friendly fireman as to how often at night they are called out. I was shocked to learn that the average number of night shift calls was 14 and that they are required to leave the fire hall with both sirens and lights on. There are also frequently traveled routes by emergency vehicles such as St. Charles in Rockland. For many this is a minor point but good to know.
It is also important to understand that Victoria is very much a seasonal town. James bay seems pleasant and serene in winter but it is packed during the summer because of the cruise boats unloading literally thousands of tourists every day. Local people also complain about the amount of noise and also air quality.
Victoria also has a very real homeless problem which is substantially more apparent as the weather improves. By all accounts it is a growing problem. You really need to see it in order to decide your choice of neighborhood.
If you are thinking of buying a good near the inner harbour one has to appreciate that this is a full functioning airport for seaplanes and the number of flights triple in the summer months. When I first moved to Victoria I rented a condo by the inner harbour for a year while I was house hunting. For the first few months the seaplanes appeared picturesque but as I entered the summer months the noise soon turned annoying. Again, maybe not important to you, but good to know.
An outright ban on foreign ownership, giving teeth to enforcement of money-laundering laws, and getting the CRA to visibly show they are cracking down hard on the egregious amount of tax evasion occurring here is looking like the better option.
Again, does every one who buys a second property for “the family” plan to lose their shirt on it and have no problem with that ? Nope, they want to have their cake too with major price appreciation because someday someone will sell it wether it’s the parents to finance their health problems, or the kids because they don’t want the hassle and up keep. Seen it many times.
If you can afford it in the first place then you can handle the extra tax to deter others from hoarding up Victoria.
The right wingers blaming the lefties is hilarious. Harper’s legacy is about to blow up and they can’t handle it. ICYMI there’s this thing called a housing crisis. This takes extreme measures.
There’s a whole island left with no tax and a great deal on a place in Comox. 😉
Capital Gains tax is about income type, not really about speculation. The existence of property CG tax itself shows that there is a difference between primary residence and non-primary residence.
Also people don’t need to pay any CG if they don’t sell or don’t have a gain after selling.
Exactly. So why not have a tax on homes that are not modest? Aren’t they contributing to the investment market based on the gains they have experienced?
Someone can own a 3 million dollar house in Kelowna with no spec tax and get the capital gains tax exemption on gains and property tax grant. It is a choice they can make not based on necessity but they are not penalized for it.
Or they could have chosen a more modest house and a vacation house and split their time between the two already paying capital gains on a sale and no homeowner grant for the second property.
I think the differential tax treatment is warranted for a second home and for primary residences over a certain value. It is a tax on gains that reasonably limits speculation – actually shifts it to primary residences imo but that is another topic.
It used to be that each spouse could have a primary residence and the cottage was then tax exempt. Seems a fair change to me and I would not have argued against it. And people buying second homes are aware of these difference and go into it with this knowledge.
What is unfair is a 2% annual tax on assessed value – way out of line with what people can afford to pay. At least the gains tax is on, well, gains. Price goes down, you don’t pay it and you only pay it when you sell and have the funds to do so. Spec tax is not tied to gains in a meaningful way and something people cannot afford annually.
We already have taxation for speculators. It is called Capital Gains tax.
This new tax is just another way for the NDP to put their hands into the pockets of people who have succeeded in life. Individual success is anathema to the left and synergises nicely with that large group of Canadians who are individually unproductive yet deeply covetous of others who have propelled themselves forward.
The difference is that people can only have one primary residence, but they can have as many vacation/rental homes as they like and can afford. Primary residence is the only home you live and is more a necessity (for modest size ones), not so for the vacation and rental homes regardless the size. Thus they have very different tax treatment wtr CG and some operation/mortgage cost, even when they are both “investments”. Maybe you want to dispute the existing tax treatment difference as well, if you think they should be treated the same?
Leo,
My spouse also felt the quake last night, and we live on top of rock near UVic.
Great.
Yes. Definite change on that front. HGTV is full of shows on this.
And those that don’t rent out their place at all but use it themselves which is a significant group of people.
Totoro
You are right Investment is the wrong word. Not sure what the right word is but a lot more talk about the value than before.
My parents’ and grandparents’ homes were their biggest investment whether they thought that way or not. They just used them as a home and, in my grandparents case, they sold and used the proceeds to live on in old age. My parents will stay as long as they can and probably do the same.
Owning any home is an investment and always has been, although being a home used to be more of the primary focus for all but the very wealthy. The real issue is that short-term investments with a view to short-term gains can distort the market in a shortage situation and more Canadians are participating in this.
Do we allow Canadians to buy whatever legal housing they can afford if they are not “speculating”. What is speculation?
The spec tax IS a crackdown on illegal short term rentals. Can’t figure that out? Anyone who owns one of these as a second property will get hit with the tax. In the budget the government also enabled strata councils to levy large penalties on illegal short term rentals. They are the best enforcers as their ears are closest to the ground.
Lots of the smaller crap boxes getting slashed today. It’s always where it starts during the final denial phase.
Real estate sales are cratering around the GTA. Is this a crash in the making?
Falling home prices in the suburbs of Toronto offer a cautionary tale of what would happen in a larger collapse. Will it be different from past slumps?
“Real estate agent Paula Minuti knew the housing market had reached a turning point. The problem was her clients refused to accept it. ”
“Speculators got caught, too. John, who asked that his real name not be used, purchased a home in the GTA for $1.3 million in June. An appraisal was conducted soon after. “It came back short. Very short,” he says. “I had a small heart attack.”
He borrowed $300,000 from a private lender at nine per cent interest under a one-year term, and found tenants rather than flip the property. The rent doesn’t cover the carrying costs, so he’s losing money every month. “I probably got ahead of myself on this one,” John concedes. He hopes to refinance later this summer with an alternative lender at a more bearable interest rate.”
Good luck John, you’re gonna need it.
http://www.macleans.ca/economy/realestateeconomy/gta-real-estate-sales-falling/
I never said that. What I said is that I think people who oppose the policy, but are not impacted personally, are probably afraid of lower costs.
The direct impact on supply, whether rental (if rented out) or ownership (if sold) will likely be quite small. But I think the psychological impact on the market of all the new measures together will be much bigger – witness the outcry we’ve seen already from the usual suspects who have an interest in continued rising prices.
Then crack down on this. A speculation tax that hits a wide target is not the answer. If a property is a commercial short-term rental in an area which prohibits this outright, enforcement is the issue. The City of Victoria is taking measures against this already, as is the province in terms of taxing all short-term rentals. A tailored solution is going to work, a shotgun approach is terrible policy.
Patriotz:
Your argument, regarding full time BC residents, owning two properties seems to be completely conflicting. On the one hand you argue that it will affect only a tiny percentage of property owners. On the other hand, you argue that it needs to be done in order to lower housing costs. If it really is only going to impact a few property owners then it will have little to no impact on the general cost of housing so why bother doing it. Note that I am referring to the full time BC resident component and not the whole package of “speculator” taxes.
As to motivation, I actually would like to see the bubble of housing prices slowly deflate to more reasonable levels. I cannot speak to other peoples motivations on this blog. But you cannot speak to it either. Pulling a Donald Trump line of tossing mud at people really does not strengthen your argument. Arguing that there is not public sympathy for cottage owners, frankly, puts a bit of a real chill in my mind. There was not much public sympathy in France for some of my Jewish relatively against shipping them off to Germany either. Public sympathy does not equate to either good, fair or intelligent public policy.
The simple solution would be to exclude two homes for BC full time residents from the property tax. That way you dont ever catch peoples vacation homes. The number of people who have homes in both Vancouver and Victoria is rather minuscule. In cases I know of (which is two) it is people whose families live in Victoria but one spouse works in Vancouver. As you repeatedly pointed out the numbers are small so taxing them will have no real impact on lowering house prices overall.
There are two clear and major causes of this bubble and they are foreign buyers and speculators buying and flipping houses. The real problem with the “speculation tax” is it does not even begin to address real estate flipping by speculators. It only partially, and in my opinion, inadequately addresses foreign ownership. The 2% property tax should have been applied to all property owned in the province by foreign owners. This would have actually forced a lot of new inventory on the market
in Vancouver and Victoria and went a long way to ensuring that real estate values reflect salaries in
Vancouver and Victoria. (by the way, before you accuse me of a recent invention, I have advocated this measure on this blog for a long time). The foreign ownership tax should also be slowly increased
each year with the long time goal of removing foreign ownership but also with an eye to deflating the bubble rather than having it burst all at once. The goal should be that housing prices more accurately reflect incomes in our major cities but also not to target the legitimate goal of a vacation property for BC residents.
First, I would emphasis that my goal is to reduce property values and, within reason to have them reflect local incomes. My objection to this speculation tax is that it does not target the people who caused this bubble nor will it effectively reduce the bubble.
As to Albertans ( and all other Canadians) lets get rid of the foreign owners and seriously deal with real estate flippers before we turn our tax guns on fellow Canadians. I would be okay if it was felt really necessary to tax all non BC resident purchases moving forward. But we should grandfather those that have purchased here prior. We seem to have forgotten that BC as a matter of government policy actively promoted the purchase of vacation homes in BC for many years when the economy was faring poorly during our years as a have not province. There is both an element of fairness and an element of national unity involved here.
Note that we both share the goal of having real estate values reflect local incomes but I still firmly believe that this is a matter of bad policy that does little or nothing to undercut the original cause of the bubble in the first place.
I used to live near that Buena Vista house in Comox. It has been on the market many times and taken ages to sell each time. I was in it once about ten years ago. That price is insane. From the pictures it doesn’t appear much work has been done since the last sale. But who knows? Whatever was done it does not warrant that price.
Aren’t you sinking your own argument by showing that these are commercial short term rentals, and not “family cottages”? By the way I bet a lot of those which are in residentially zoned areas are illegal. The ones in commercially zoned areas wouldn’t be subject to the spec tax.
Biggest problem today. Homes are considered investments. Our parents never thought that way. Could be because of the amount of $ in a house right now.
Most of places near me are in the family for decades, The kids use them because the parents pay for it. Only ones come up for sale are the ones where the parents die and kids do not want the place.
A cottage is different world whether stress goes and its all about fun. It is well worth the $.
You care because it affects a sale if you ever have to sell for reasons you cannot predict and because, like anyone, you want to have a cushion in life. Some may be forced to sell with the spec tax so value is relevant. Operational costs are a much bigger annual issue usually, as is how to structure for inheritance if you have no plans to sell – you want to avoid probate fees and PTT if it is to stay in the family.
Why would a long-term second home used for family purposes be any different than a primary residence in this respect? Both are “investments”, but not necessarily ones that are speculative or short-term. Both are associated with family memories and our family is very attached to our vacation home, which we have owned longer than our primary residence.
Housing and land have been a good place to put your money. As has the stock market. Housing provides something more: a home.
We need to separate out whether we are limiting homes to one a piece now because owning two is affecting valuations, or because speculation is, or because it is an easier target than the primary residence capital gains tax exemption which is used far more for short-term investment purposes imo.
Josh
As you get older. You acquire things that are for other reasons than making money. It is a sanctuary for my family to get away. Even my Dog likes it better there.
The reason I like this blog is for learning and arguing with Hawk. I have stop that for the sake of the blog. 🙂
How about “genuine vacation properties” in greater Vancouver? This is a huge area including lot of cottages in white rock etc
LOL when were you last in Whiterock?
—-/////////
I go to White Rock a lot, and know the real estate well. My statement was that there are genuine vacation properties everywhere including White Rock. Many of the “tear downs” that remain are cottages, and I stay in one of them. Remember the term cottage just means a small house near a beach. Lots of those still in White Rock.
If you don’t believe me check out https://www.tripadvisor.ca/VacationRentals-g154949-Reviews-White_Rock_British_Columbia-Vacation_Rentals.html
The only reason we would sell would be unexpected personal financial or health issues. I think a lot of vacation home owners feel the same. In fact, during most of our ownership window prices have declined or stagnated and now they are up. So what.
I guess it’s possible but I find it difficult to believe that someone who frequents this blog and owns a non-primary residence would genuinely not care about where prices go.
The reappearance of comrade patriotz must mean it’s a good time to buy 🙂
Josh
Not an investment. Up or down do not care. Rather it actually go down because of taxes. Not selling
Interesting topic: for owners of non-primary residences, what would it take for you to sell? Would price stagnation do it or does it have to be a drop? What’s the threshold?
LOL when were you last in White Rock? 1970? Here’s what the market looks like today.
White Rock for sale
Richard is an Albertan subject to the tax if he ceases to rent out his Victoria property. Patrick’s mother is affected. Several of our friends are affected. We could be affected if they expand the tax as they say they might.
I don’t care much about property values declining. They will do what they do and long term they will go up at whatever rate they do. We are not selling.
I do care about someone telling me I can’t own a second property long-term for family purposes. Seems pretty unreasonable for reasons I’ve already mentioned.
))) Not one person on this forum has claimed that they will subject to this tax.
That’s because they believe posts from Leo and others here that say the NDP will fix things so that they won’t have to pay it, and there is “essentially zero risk” that they will have to pay it. Leo has stated it would be “political suicide” for the NDP to not fix it, so obviously he believes that LOTS of voters (and forum members here) would be affected if they leave it as is.
Because what they have announced how the tax works makes it seem like it will apply to second homes in the spec tax area owned by BC residents ie. “not owner-occupied or a qualifying long-term rental property. A corresponding income tax credit will help offset the tax for BC residents.”
If it is not going to apply in this manner they clarify it asap as the tax is applied this year. They’ve had plenty of time to make an announcement on this point now given the complaints received and they have remained silent – leaving many BC residents with significant and realistic anxiety about this.
http://vancouversun.com/opinion/columnists/vaughn-palmer-readers-stunned-by-impact-of-b-c-s-new-speculation-tax
What constitutes unused and what level of housing problem is required?
We use our vacation home about four months of the year. Probably not enough to be deemed owner occupied if they follow the Vancouver model, but enough to make sure we can’t rent it out long-term because we go once a month. If we were in a spec tax area we’d be worried.
Vancouver already has this tax so the question is whether this particular tax should apply in this manner to the rest of the areas.
I disagree with applying it to Victoria where it is a second home owned by any Canadian who bought and uses it part of the year or will use it in retirement.
If you want to quell “speculation” define it and tax it more directly.
Patriotz,
You object to my characterization of your position that you are in favor of taxing cottage owner because they are taking up extra space. Yet in your objection, you restate your opinion as not wanting to affect “genuine vacation properties in places like the Gulf Islands.”
How about “genuine vacation properties” in greater Vancouver? This is a huge area including lot of cottages in white rock etc. If you don’t want to exempt them too then, yes you are in favor of taxing cottage owners, albeit just some of them.
The two arguments that the NDP have provided for this spec tax are :
– speculators. That doesn’t apply to people who use the property as a second or recreational home with no intention of selling.
– fairness . That doesn’t apply to people who pay all their tax in BC.
So you’re adding a third one, which is people that tax should apply to people who “keep properties empty in big cities”. You’re entitled to that opinion, but I’m also entitled to call you out on it and characterize it s taxing cottage owners. And by “cottage ” I mean any second recreational home, including anywhere in BC.
Interest rates unchanged. Poloz sitting on the fence again cause things aren’t going just perfect, just housing that’s gone stupid due to low rates dished out by him. He’s paranoid of the debt bomb teetering on the edge of the cliff.
“The Bank of Canada has left its overnight interest rate at 1.25 per cent. The central bank’s statement says “some continued monetary policy accommodation will likely be needed to keep the economy operating close to potential and inflation on target.”
“Not one person on this forum has claimed that they will subject to this tax. So why this rush to defend someone else? I think they are simply opposed to measures that may bring down prices.”
Yep, you’d swear the right wing opposers are secretly all Albertans with the outrage for something has no effect on them… except lower prices.
But they all say they that would have no effect on them because they are “in it for the long run”, or ” it’s all going to the kids”, or “any correction would only push prices back to, 2014, 2010… etc”. Deep down they can’t handle seeing a tiny drop of $5000 in a month.
Just want to add – I have said all along is that it’s those who keep properties empty in big cities who deserve to be taxed. I also said that I thought is was likely that the NDP would exempt genuine vacation properties in places like the Gulf Islands.
What has gotten you so wound up to make this kind of claim?
Even in the very worst case I can’t see more than a couple of % of BC households being charged this tax. There is no public sympathy for these people. That’s not just my view, it appears to be Andrew Wilkinson’s too because he has decided not to publicly take their side.
Not one person on this forum has claimed that they will subject to this tax. So why this rush to defend someone else? I think they are simply opposed to measures that may bring down prices.
That’s not to say you shouldn’t write your MLA to raise issues with the tax right now. Some parts are certainly problematic as written.
The more I read the discussion about it here the more I think it might turn into an administrative and political nightmare. Some people will be caught up in it that shouldn’t be and there will be many stories in the media about those people. Efforts to reduce the collateral damage will make the tax complex with lots of exemptions.
While I support the spec tax in principle it might get bogged down in implementation.
))) how the tax will work when it hasn’t been announced.
Leo,
Many others don’t share your reassurance that the NDP will fix it before implementation. Just look at the opinions expressed here like patriots that are in favor of taxing cottage owners because they are taking up extra space. So no, there isn’t a zero risk that the NDP won’t fix this.
My concern is also shared elsewhere, for example in this article in the Vancouver Sun.
http://vancouversun.com/opinion/columnists/vaughn-palmer-readers-stunned-by-impact-of-b-c-s-new-speculation-tax
Here’s an excerpt from the Vancouver sun article which references the BC fact sheet from the govt here https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
— ———–/////
Vancouver Sun: “But a fact sheet on the speculation tax posted on the finance ministry website tells a different story.
Question: “What about British Columbians with two homes? A resident who lives in Vancouver and owns a vacation property in Kelowna?
Answer: “A non-refundable income tax credit will help offset the tax for B.C. residents.”
Note, the non-refundable tax credit will HELP offset the speculation tax. But it won’t fully offset it unless the amount paid in speculation tax is less than the amount paid in provincial income taxes.
For instance, the speculation tax, calculated at two per cent on assessed value, would levy $20,000 on a $1-million recreational property. But a British Columbian with an income of $100,000 a year would only get back the $7,000 or so that he or she would be paying in provincial income taxes.”
/////——///////——-
As an aside, I also believe that Albertans and other Canadians should receive the same treatment as BC residents. I think the NDP will push ahead and charge Albertans but not BC, and I think it will be a huge mistake if not political suicide for them. The idea that we are charging Albertans for using our BC services based on fairness is absurd, especially when we are only planning to charge Albertans who own property here, and not ones that are renting here.
Recreational homes should be exempted from this spec tax for all Canadians…. period.
Because they are keeping a property unused in a city with a housing problem. That has nothing to do with how well off the owner is.
Even if it’s in downtown Vancouver or Victoria?
I feel like this has been covered many times already. Why are you jumping to conclusions about how the tax will work when it hasn’t been announced? The chances of them phasing in a tax that will work as you describe is essentially zero since it will be political suicide.
Regarding the spec tax of 2% on a second home (cottage)
If someone is a 100% BC resident only, and 100% of their income is subject to BC income tax, then they are clearly already “paying their fair share for the services they use in BC” which is the justification used by the NDP.
A rich person in this situation with lots of B.C. tax paid has nothing to be concerned about since he won’t have to pay spec tax on additional properties. If you’re not so rich, with income of less than $100K per year, you would likely be subject to paying lots of spec tax, even though you already pay and reside full time in BC. This is crazy!
Why would a middle class BC person be subject to this spec tax at all? They are already paying BC tax on ALL of their income, yet they are subject to spec tax if the tax they pay isn’t enough to offset the tax. Isn’t paying tax on all of your income enough for the NDP to consider that you’re paying your fair share, or do relatively poorer people need to pay more because the absolute number of dollars isnt high enough ?
The solution is simple. Noone paying all their taxes in BC should be subject to spec tax on a second property that they declare as a recreational home that they reside in part of the year. They already pay their fair share for BC services in provincial income tax using the progressive taxation system championed by the NDP.
That just isn’t true. You are generalizing from a single vote in the House of Commons to a federal/provincial party Canada wide. The vote was also purely symbolic, because it was obvious that the required provincial consent would not be forthcoming.
The fact is that in the 1990’s the NDP was in power for a decade in BC and did nothing on this issue. It did nothing in Ontario, and to this day has not advocated doing anything. It was the current Liberal government which brought in the FBT there. It has done nothing in Alberta. It’s also a fact that PEI, which is the leader in opposing equal property rights by foreigners and non-residents, has never had an NDP government.
There was also longstanding opposition from other parties:
At the time Manitoba was governed by the Progressive Conservatives, and PEI by the Liberals. PEI of course has had restrictions on foreign and non-resident land ownership for decades. It also charges non-residents higher property taxes on those properties which they are allowed to own – province wide.
http://publications.gc.ca/Collection-R/LoPBdP/BP/bp268-e.htm
The secret is that Leo’s not really in the real estate industry, a fact that only serves to reinforce your point.
One Hawk is enough, thanks. Unless you have The Chart handy? Haven’t seen it in a while…
Hi Grant, as an Albertan that bought in Victoria I strongly recommend that you rent for a minimum of 6 months before you buy. It will take you at least 3 months to figure which areas appeal to you and then likely another minimum three months to find a home in those areas that meet your requirements etc. Victoria/Sannich/Oak Bay/ Esquimalt have some very distinctive unique communities and just about every house is different, It is a far cry from trying to find a place in Calgary where there are so many similar homes, price ranges etc ao trying to find a home in Victoria will be a very different experience and needs lots of time compared to Calgary/Edmonton.
All the best!
I would definitely rent; getting too really know Victoria is important. Things are often not like they seem at first blush.
Hi Grant. Welcome to the blog and possibly to Victoria even if you are ruining the market with your additional demand.
To rent or not to rent. That is the question. I would definitely keep my eyes open for properties as the spring develops especially if sales continue to lag. There are always people that have to sell, but so far still more than enough buyers such that those properties do not languish.
I’m not sure there really is a consensus, although the audience on this site is more bearish than most. If I was looking right now I would watch for a 3-6 months to see what happens in the spring and summer. There is a lot of uncertainty in the market and it has weakened but it hasn’t ground to a halt like we’re seeing in Toronto at the moment. Still some 25% of houses going over ask (compared to 35% this time last year).
I see two sides to the argument for the market right now. On the one hand there are a lot of headwinds. Rising interest rates, stress test, foreign buyer tax, looming spec tax, more supply.
On the other hand I also see a lot of long term positive things in the local economy which I think will put a floor not far underneath current prices. I wouldn’t be surprised at a small decline and I wouldn’t be surprised at extended stagnation in prices but I don’t see a large decline without serious economic disruption.
I’d say overall we are in a high risk period just like we were in 2007/08. The market is vulnerable to disruption from weaknesses in employment and regulatory changes. But a high risk market doesn’t guarantee a significant correction. The runup could still end much less dramatically.
Well, what a little gold mine we have here! Kudos to Leo for putting together an excellent resource for real estate in Victoria – I’ve found it particularly useful and feel like I should make a financial contribution! It’s rare to see someone who is in the real estate industry actually provide a balanced view of the community and market that they earn a living in. Kudos also to all of those who contribute here. I can’t believe I just read the overwhelming majority of 380+ comments on a single blog post. Of course, I’m particularly interested in the topic, but I can’t think of many (any?) other social media websites where you don’t either gag, wonder about the future of humanity or feel like you have to take a shower after reading just a few of the comments. The HVAC tangent in this particular thread was a bit distracting, but even I read with interest some of those initial posts. There’s been some (mostly) very reasoned, diverse and balanced discussion going on in the thread.
As for me, I’m looking to possibly move my family out to Victoria and join the ranks of “those damn outsiders who are ruining Victoria”. What can I say, I’ve done my time dealing with winter here in Alberta and if the stars align for us, well my family deserves a bit of a change. As already mentioned, this blog and many of the comments here have been particularly useful to get an insider’s view on what the Victoria real estate market is like. In summary : buyer beware! It seems that the overwhelming consensus is that now would be a particularly risky time to buy, so if we do move perhaps renting is in our future. It’s not an easy decision as home ownership has always been my preference for a multitude of reasons. The problem is that in addition to losing the typical benefits of home ownership, it looks like renting a house in Victoria like we’re used to is NOT cheap either. The 3+ bdrm houses available that will allow a dog and meet my wife’s (and my) relatively picky requirements are underwhelming. Sure I can rent a place for $3500/month or more to satisfy what we’d like, but holy sh*t that is a lot in rent. Add in kids who will go through a period of resettlement from a move of this sort and I don’t look with fondness on the idea of being a renter and for whatever having to move again, even after 1 year.
I found the graph showing median home prices since 2008 to be really, really interesting. That is quite the spike that hit in 2015, sending the median price on detached homes from the 5’s to well into the 7’s. So while I may gag at the idea of spending thousands on a rental, the idea of buying a house at a possible peak and then seeing it lose tens of thousands, or gasp, hundreds of thousands, is equally unappealing. It’ll be an interesting next few months and I’ll be watching this website like a hawk!
Peace.
Leo S,
“Small earthquake?
edit: yes 2.3 magnitude earthquake 7 km from Langford
https://earthquaketrack.com/quakes/2018-03-07-06-06-15-utc-2-3-33”
How the heck did you felt that? It look like I’m about 5 km from the epicenter and I didn’t feel a thing.
Andy7,
“Houses close to the hospital are now going for $500,000- $650,000, the % escalation is nuts.”
Who woulda thunk. An ex coworker picked up a duplex (both unit) for I think around $300k or less as a rental investment in Comox less than 2 year ago.
Small earthquake?
edit: yes 2.3 magnitude earthquake 7 km from Langford
https://earthquaketrack.com/quakes/2018-03-07-06-06-15-utc-2-3-33
Correction:
Some houses were selling for just above $200k 2-2.5 year ago near the new hospital on Lerwick.
@QT
I wish it were a misprint but I don’t think it is… I’ll keep an eye on it.
Houses close to the hospital are now going for $500,000- $650,000, the % escalation is nuts.
double post
Bought in June 2015 for $570k
A complete restoration still doesn’t warrant the price increase. Perhaps courting FB or those wanting to avoid the speculation tax.
Will be curious how much it goes for and the number of DOM.
Andy7,
“Apparently Comox hasn’t gotten the memo yet… Assessed at $596,000, listed at $1,425,000…. wtf is all I have to say.”
It got to be missed print, because the house assessed price is approaching the price of new houses in upscale neighborhood Crown Isle resort & golf course.
The houses in the area of the new hospital on Lerwick Rd. that I worked on up till last year, were selling for less than $350k. Some went for just above $200k 2-2.5 year ago, and they are all around 1/2 acre lots or larger.
The NDP have a long history of opposing equal property rights by foreigners and non-residents. They have opposed it for over 35 years.
As Minister of Justice, Pierre Trudeau proposed the passage of a charter that would give constitutional protection to certain rights, including the “enjoyment of property.” In 1969, as Prime Minister, Mr. Trudeau again proposed entrenchment of a charter of rights which would have guaranteed the right of an individual to use and enjoy property, with the assurance that there would be no deprivation of property except in accordance with proper legal procedures.
After the failure of the Victoria Conference in 1971, constitutional reform was not a major issue again until the late 1970s.
On 21 April 1983, Prime Minister Trudeau stated in the House of Commons that if the opposition parties agreed to limit debate to one day, the government would introduce a resolution entrenching the right to enjoy property. This resolution, with the required support of seven provinces having at least 50% of Canada’s population, could have amended the Charter.
Representatives of the NDP were concerned about the effect of a guarantee on provincial legislation regulating non-resident ownership of land.
On 2 May 1983, the motion was defeated.
Seems to me the NDP have always been opposed to foreigners/non-residents owning real estate in Canada. Maybe the 20% tax is just the beginning salvo to get their attention.
The foregoing was heavily plagiarized from the Internet, surprising what you can find after delving five hyperlinks deep!!
Pooty and Trump wouldn’t know what hit them. 😉 They’re both going to implode on their own. SHTF time.
Andy, that’s criminal. Someone looking for a dumb foreigner. Saw a nice 2 bed condo in Royal Oak sell under assessment yesterday. A couple others under ask too.
@Hawk
Apparently Comox hasn’t gotten the memo yet… Assessed at $596,000, listed at $1,425,000…. wtf is all I have to say.
https://www.realtor.ca/Residential/Single-Family/19147147/1876-BUENA-VISTA-AVE-COMOX-British-Columbia-V9M2B7-Z2-Comox-Town-of
I think this should be part of every development and planning decision in the region.
In Ottawa, my neighborhood was planned exactly like that. Developers were required to provide a certain portion of housing for multiple income levels as well as park and sports field space within the development. They were aware of this when buying the land and factored it into their offer.
For example, in my small area – a little less than 1 sq mile, there were:
○ SFH – 6K-8K sq ft lots (middle income)
○ Townhouses & Garden Homes with small lots – lower income, single parents
○ Apartment building (10-12 floors) – purpose-built rental
○ No condos, but newer neighbourhoods had those as well
○ Higher-end SFH on larger lots for approx double the price of a SFH
○ Schools
○ Small shopping centre
The result was a community with many different ethnicities and income levels where everyone felt equal. Our children went to school with refugees from Afghanistan and Croatia right through to kids of multi-millionaires.
I think this would be a challenge to implement in the CRD due to the fragmented municipality structure combined with RE greed.
What do others think? Should the CRD try to implement something like this? Would it improve affordability?
“Punish” is your word, not mine. Different people have different views of what the common good is – that’s why we have political parties. What person “A” considers fairness person “B” may consider punishment and vice versa. You can’t change that without making everyone think the same, which has been tried, and which I don’t think is a good idea.
Love to see Hawk negotiate anything with Putin.
Hawk for Prime Minister.
Love to see him negotiate NAFTA with Trump.
“Smart planning is important or all our cities turn into concrete hell.
Exhibit A: Langford.”
You don’t get out of the house much with your “introvert problem”. ICYMI houses are made of wood, not concrete.
You think the public is going to allow another bail out of all the fraudulent mortgages and FOMO’s who couldn’t stop themselves from too much HGTV ? Aint gonna happen. Another naive pumper who think’s Harper’s $113 Billion legacy on taxpayers backs to save his political ass is a good thing.
Huh? They don’t sell solar stuff. But if you want to put your weight behind a facebook comment, go for it.
Sidekick Spliff,
“Or go to a reputable source. Home Power magazine is pretty great for anyone looking at solar.”
One would think that the quoted source is making money of solar aren’t bias?
Or go to a reputable source. Home Power magazine is pretty great for anyone looking at solar.
once and future,,
“We’re at the point now where … it’s now at a reasonable rate,” Sheppherd said. “It’s at around three dollars per watt now and that’s something that could be paid off in 10 to 15 years”
Your linked article also mentioned that it is around $3 per watt but I’m a bit skeptical on that price for small residential application.
once and future,
“Good to see this but does anyone think the price is a bit high? $120k for a 30 kW system would scale to $40k for a 10 kW home-sized system (with no economies of scale factored in/out).”
Check the comments in the linked article below for the true cost of solar.
https://globalnews.ca/news/3902583/vancouver-island-man-shows-off-his-solar-house-and-his-electricity-savings/
Exhibit A: Langford.
Patriotz, your cynicism is worrying. Is it ok to punish people just because they didn’t vote for you, or are too small a demographic to threaten your power? I thought any elected govt was supposed to work for all the citizens, not just their own voters. This was exactly the thing that the BC Liberals were terrible at – ignoring the people that didn’t vote for them.
Why would you want to play the same game?
“Sidney tapping into solar energy”
“Town installs 132 solar panels on roof of its public works building ”
https://www.saanichnews.com/local-news/sidney-tapping-into-solar-energy/
Good to see this but does anyone think the price is a bit high? $120k for a 30 kW system would scale to $40k for a 10 kW home-sized system (with no economies of scale factored in/out).
Yes, meet-a-plebeian night has been quite popular this year.
I agree. I don’t golf, but Cedar Hill is great to walk around. Other, more exclusive golf courses prehaps have less public benefit.
Once green space is gone, it is gone forever. Smart planning is important or all our cities turn into concrete hell.
There is always bailout money available. “Jeezuz the naivety.”
“100 plus acres is a lot of homes Hawk. People cant have it both ways.”
You think they would build for the average joe ? Highly unlikely. Developers would milk the shit out of it.
I want green spaces like Cedar Hill where people can play golf for reasonable prices, or go for a good hike around the whole place. These are important parts of urban living to keep, and not flog off to some greedy ass real estate industry.
Easy credit and low rates is the problem, and the rates are going up and the credit noose is tightening. Canada has no bail out money left for the coming disaster. Like you posted before, better get your financials in order.
Victoria Golf club membership 35k 347 monthly dues. Not bad. Has not changed in 10 year I think.
Amazing course especially along the ocean. Look hard for the ghost. The lady in white is always watching.
100 plus acres is a lot of homes Hawk. People cant have it both ways. Complaining homes are too expensive in the core and have 2 full length golf courses in the middle of it. Either way I don’t care.
Use to play 100 rounds a year. Rather go up island now for the fresh air and get lost in the forest.
totoro,
FYI, there is something strange going on with the link in your name. Not sure if it is intentional.
Adam, thanks for providing an island perspective. I agree that the housing market has left a lot of people out. However, not all areas are equal and the solutions may need to be a bit different.
“Gwac:
Agreed that golf courses are monumental waste of land. George Carlin had some pretty funny things to say about this exact subject.”
Golf’s a great game, a great stress reducer and way to meet new people from all walks of life, as well as an excellent way to get back to nature within the city. Once you plug up the courses with high priced houses it’s gone forever.
Sounds like some need to pick up a club and get out of the house, breath some clean west coast air and have some fun.
LeoS, a couple hours late on the RBC CEO link I posted, but the more that see it the better. Foreign money needs to be banned for 5 years then selectively allow it under a lottery system, not just how deep your pockets are.
Leif,
It is not an isolated ruling. We have similar rulings for much of Metchosin, and not long ago the Vantreight family wanted to subdivide a 32 acres rocky hill into 57 lots at their farm in Central Saanich, however the battle between his brother and the NIMBY neighbors forced Ian Vantreight to sell his 270 acres for $8.5 million on a court order sale.
GWAC:
You might be right about the number of people who prefer not to downsize but the simple math is that us boomers will be dying out faster than retiring in about ten years.
Personally I cannot see any reason why Alberta would be mad enough at BC to start shipping their homeless and welfare people to BC. I guess it would be perfectly legal as long as it is voluntary but it sort of goes against being one Canadian Nation.
Of course another problem is when the boomer sells and is retired the new OFSI rules don’t allow them to equity finance, say to buy a condo if they want to use a large part of their sale proceeds to travel etc. Their pension and OAS funds won’t qualify them for much. Another reason for them to stay put.
Boomers are not as crazy about Condo living as younger generations are. I think most boomers will stay put unless they have a HUGE home. There is so much cost to selling and then rebuying, takes a lot of steam out of the idea.
Ottawa’s real estate market is heating up:
Bidding wars and scant supply: Ottawa’s housing market finds itself ‘listings-starved’
http://ottawacitizen.com/news/local-news/bidding-wars-and-scant-supply-ottawas-housing-market-finds-itself-listings-starved
Agreed. Let’s not pollute the blog anymore.
RBC CEO says “We do not need foreign capital using Canadian real estate as a piggy bank,”
http://business.financialpost.com/news/fp-street/foreign-buyers-are-using-canadian-homes-as-piggy-banks-rbc-ceo-warns
Michael
You could be right but I have witnessed the opposite over and over where boomers single or married refuse to leave their 3000sq houses until the ambulance shows up.
Michael, your chart seems to neglect the fact that the supply of condos is essentially limitless compared to houses.
http://www.timescolonist.com/business/golf-curling-futures-uncertain-at-glen-meadows-1.23192424
How does this protect agricultural land. The land could be turned into housing. Turned down once already.
A lot of courses here could be turned into housing. Forcing low income on part of the land could be a part of the deal.
Foreignors are not the issue. They are just a tax grab. Which is ok. Canadians are not foreignors.
That is a sad article to read. It was ridiculous that the council didn’t let them rezone it and donate land back to the ALR and create some homes. Now it is Chinese owned and will probably be shut down and just sit and wait to make an investment out of it when it could have been done for the family operating it for so many years.
Looks like multi’s are heating up again. All price ranges starting to go over ask this week:
305-3700 CAREY RD ask 399, went 420
502-741 TRAVINO LANE ask 759, went 789
715-845 DUNSMUIR RD ask 1149, went 1155
Plenty of core SFH will hit the market in the coming years as boomers downsize.
Rising inflation & immigration will ensure SFH prices don’t fall much nominally, but they will drastically underperform in real terms.
We’re still adding new listings at an adequate rate to prevent any price increases.
So far this March the rate for houses in the core districts is 2.9 new listing for every sale 2.9:1
Condos in the core are at the rate of 1.7:1
Houses in Langford and Colwood is 2.7:1
Historically a new listings to sales ratio between 1.5:1 to 2.5:1 is considered to be in the balanced market range.
A rate higher than 2.5:1 indicates that the market is in favor of buyers with increasing inventory, better selection and less irrational behavior on the part of buyers.
This isn’t good new for sellers as we head into the spring market. House prices in the core are now back, after a slight decline, to what they were a year ago. And while it is early to call, this spring market has a potential to be a bust when it comes to appreciation.
Not sure why you are pointing out the obvious when it is.. obvious and the reason I posted it in the first place.
Not sure he is trying to get a better deal, but is trying to use it to market his property and get someone to buy his lot on a trade for a place within the spec tax area.
This is part of why Kelowna/West Kelowna is upset. They feel like a) they want Alberta buyers and, b) they are unfairly targeted given the vacation homes in the surrounding areas which may experience an uptick.
I think it is part of why there is some unfairness in the implementation. If you are a speculator lets define it first, implement measures, and lets make sure we are applying it to areas with real issues with speculation rather than arbitrary geographic boundaries based on regional maps. What is speculation affecting the community negatively in one area is the bread and butter keeping another community going through the winter and employed fully in the summer.
I tracked down the glass used by energy-star plygem windows. They’re posting a glass U-value of 1.7 or an R-value of 3.34. The glass isn’t the weak part of the window, it’s actually the frame (and installation), so your whole-window R value is probably ~2. This doesn’t take into account air leakage, which is another way in which you’re losing/gaining heat.
Compare that against an Internorm KF410 (which is the $ I provided) with an independently-tested glass U-value of 0.53 or R-value of 10.71. Again, the frames and installation are the weak part so the whole window R value is lab tested to R-7 (certificate: http://www.euroline-windows.com/wp-content/uploads/2016/08/ThermoPlus-PHC-Passive-House-Certificate.pdf).
So discounting air leakage, you’re losing 3.5 times as much heat through through a plygem window.
What is the time frame? Short-term you’re right. Won’t pay back, although again when you start to get to higher efficiencies you can throw out other bits and pieces (like a complicated heating system, gas installation costs etc.). So that can go a long ways towards parity.
See above, 3X more efficient, not including air leakage (which would distort the numbers further).
This is true. Even the worlds best glass isn’t as good as an average stick framed wall. This is one of the reasons the glass towers are energy hogs (even though they may be LEED platinum).
Interestingly (or not), the most efficient configuration is fewer windows, but bigger ones. For the same window area, a single large window is quite a bit more efficient than multiple smaller ones. This is because the ratio of frame to glass is much better in a larger window and the frames are the weak links.
And you’re right. The reason I’m taking my time typing all this stuff out is because I find it interesting and it’s a bit of a hobby for me. In order for PH or pretty-good house to make any sense at all, you have to take a holistic approach. You can’t over optimize one bit without considering the others.
The way in which I see people approach the cost analysis for almost any “green” investment, whether it be solar, passive, electric car etc, is to borrow the capital and ensure the carrying costs are lower than the savings. Just like the taxi company that goes and buys a fleet of new electric cars, the initial outlay is big, but the month-to-month savings provide a favourable long-term ROI.
Here is an article worth reading from the Berhardt Contracting guys and their PH in Saanich: http://www.greenbuildingadvisor.com/blogs/dept/guest-blogs/ten-misconceptions-about-passive-house-standard
@Hawk
“Looks like Victoria has peaked out moving trends”
Correlation does not always equal causation. I moved off and back on the island in 2017. I got three quotes from movers plus a quote from Uhaul. Once I factored in the ferry fare for a uhaul truck it was cheaper to use a mover than rent a uhaul – plus I didn’t have to lift a finger.
Sidekick Spliff,
I’m not here to dispute HRV or heat pumps with you, however I’m willing to go for coffee to discuss. Email me at quoc.v.trinh@gmail.com if you are interested.
Maybe not these days, but many of us remember when Ralph Klein actually boasted about shipping them out of Alberta to BC.
Why are some people so upset with what the NDP has done?
Government meddled on the way up. That is a big part of why it went up.
Now Government is meddling on the way down to get it to come down.
So many people weren’t upset when Government meddled on the way up because it benefited them.
Now maybe this meddling on the way down will benefit others.
https://www.kijiji.ca/v-house-for-sale/calgary/avoid-the-new-bc-speculation-tax/1337566507
LOL. That ad is from an Okanagan property owner hoping to get a better deal for his lot as it is outside the spec tax zone. Cuts both ways doesn’t it.
As for what Kelowna and West K councils think, I doubt there’s anything the the NDP care less about. Where did Christy go after her defeat in Point Grey?
QT:
Thanks. It sounds like most arrive here by choice. I don’t think the practice of “shipping” welfare recipients here (under duress or compulsion) is particularly wide-spread.
““For five years, they were basically our bread and butter,” says Sylvia Morris, a real estate agent who specializes in Unionville, an area of Markham. Foreign buyers, typically from China, would purchase four or five houses at a time. “This time last year, I’d put a property on the market and within two or three days, I’d have 10 offers on it,” she says. Morris often participated in transactions where buyers never even visited the property; their agents sent video footage instead. Minuti saw countless local clients repeatedly shut out of bidding wars. “The offers I would get would just blow everybody out of the water,” she says. “I’m talking $150,000 or more over asking.”
http://www.macleans.ca/economy/realestateeconomy/gta-real-estate-sales-falling/
Interesting that this realtor apparently said times were changing in May 2017. I remember when we first started looking in Sept 2017 in Victoria and every agent (maybe 10 agents we saw at open houses or setup for viewings) we talked to said things were changing here. Houses were being listed longer and the overbidding frenzy had stopped, they felt there was some winds of change around the market but things were just cooling a little after a wild spring to settle down.
Judging that Toronto released some pretty dark stats yesterday “Sales plunge 35% across the GTA. Average selling price down 12% while detached home values sink by 17%.” it will be interesting to see what happens here over the next month or 2 based on Toronto’s possible peak a few months before here.
I am also curious how many agents in Vancouver have ever come out with their stories of bread and butter foreigners buying left and right even though they tell us they only represent a small amount of the sales.
Bman,
“Evidence?”
http://theprovince.com/news/local-news/smyth-nearly-one-in-seven-new-welfare-recipients-in-b-c-last-year-were-from-out-of-province
This trend has been going on since the 90s.
And, Maybe someone can clarify this for me if the recipients aren’t count as out of province after they become BC resident after 6 months.
Good golf courses are a terrific use of land. Crappy golf courses are a terrible waste of land (that could be used for good golf courses).
https://www.youtube.com/watch?v=86URGgqONvA
Run for the Hills everyone! The ‘Hawkapocalypse’ is coming!
Try saying ‘Hawkapocalypse’ ten times fast everyone 😉
Hawk if foreigner are distorting our housing market. Than the NDP should have banned it….NDP say there here to help. Something does not add up. NDP tax revenue is not going down due to their changes so they anticipate little change in foreign ownership. Is foreign ownership a problem or not?
So what are you suggesting? Seems like you’re advocating for an HRV? Or a well-built home? I’m not suggesting retrofitting an HRV into some old house, I’m talking about new construction.
What is this complicated system you speak of? Poly and acoustical sealant?
Incorrect. You can use whatever material you want as long as it meets the required PERM ratings. Most higher performance houses use taped OSB/ply as an air barrier/vapour barrier. Some people go for closed-cell spray foam (popular in roof cavities).
Well, most of the north American HRVs aren’t great. I’d recommend one of the ones on the list I posted. The typical choice available in BC is the Zehnder CA350 with an independently tested, passivehouse certified sensible recovery rate of 84%. Just like COP, this includes the energy used to run the motors, losses due to cabinet air leakage etc. Here’s the report for that unit: http://zehnderamerica.com/wp-content/uploads/2015/05/ComfoAir-350-HRV-Passive-House-Certificate.pdf
That is an older tried and tested model used throughout the world. The newer Zehnder units are even better.
I have never heard of this and there is a rather large body of real-world evidence for these higher-end units. Just like every HRV on the planet, you should remove the core once a year and soak it in warm water for a couple of hours. The cores of these units are not cheapo plastic units.
Winter outdoor average temperature 6 degrees. Indoor temperature 20 degrees. Delta-T no HRV = 14 degrees. Delta-T with 93% HRV 0.8 degrees.
Energy required to heat 1 litre of air from 6 to 20 = 17 Joules
Energy required to heat 1 litre of air from 19.2 to 20 = 1 Joule
So that 93% efficient HRV drops your heat load by a factor of 17 in the winter. Go ahead and downsize that boiler/heatpump/whatever folks. As a bonus you can throw away your bathroom fans too. In the summer, the savings are nowhere near as much as the delta-T is much smaller, although for those one or two uncomfortably hot weeks in the summery it’ll keep you cooler.
The wacky part is that you can add a shallow ground-source brine loop and that pushes the efficiencies even higher and provides air conditioning (Zehnder comfofond). That is overkill for Victoria.
Other cool HRV stuff: Add occupant sensors, CO/CO2/moisture sensors and the systems will adjust automatically to keep the indoor environment just so. No need to hit the fan switch in your bathrooms, no worries about cracking windows/doors during the dinner party.
And as a final note, HRVs are heavily modelled in any house energy work, so we can quantify the variables. Here are a couple of screen caps from my model:
https://1drv.ms/b/s!AnTWecW-S7l3irIL1URr10MIxxlZQA
https://1drv.ms/b/s!AnTWecW-S7l3irIKu65–S6iHryqbQ
“I just looked and I can buy a 3 bed SFH on 4.88 acres on Saturna for 269,000.”
The price of Vancouver and Victoria real estate is affordable to many foreigners who aren’t trying to earn their livings in either place. $269k is affordable to many foreigners who aren’t trying to earn their living selling turnips.
I’m currently transitioning from Salt Spring to Victoria. Among my reasons is Victoria’s greater housing affordability; that is, the prospects of earning a living and paying a mortgage here are much better than doing so on Salt Spring (or Galiano, or, as far as I know, any gulf island). I know many young people, especially families, who have recently moved to Victoria and elsewhere from Salt Spring with housing affordability/availability being among their reasons. At the rate it’s been going, Salt Spring will be a place where vacationers go to talk about how important they are to the local economy and wonder why there’s nobody to serve them.
A family member has been instrumental in a housing affordability project on the gulf islands. It’s not an altruistic endeavor. He’s a senior and is genuinely concerned about who will take care of him if young people can’t afford to live in his community. When restaurants are run, ferries captained and vineyard grapes harvested by robots, property owners won’t be intrinsically tied to the issue of affordable housing and whether people live in our vacation destinations. Until then, we serve our own interests by expanding our perceptions of who and how people are effected by current and new policies and by our behavior.
https://globalnews.ca/news/2567494/reports-2-homeless-men-from-saskatchewan-given-one-way-bus-tickets-to-b-c/
I’ve heard of Montreal doing the same. It’s pretty easy to convince homeless folk to move here where there’s no real winter and they’re allowed to camp in parks.
Gwac:
Agreed that golf courses are monumental waste of land. George Carlin had some pretty funny things to say about this exact subject.
http://www.timescolonist.com/business/golf-curling-futures-uncertain-at-glen-meadows-1.23192424
How does this protect agricultural land. The land could be turned into housing. Turned down once already.
A lot of courses here could be turned into housing. Forcing low income on part of the land could be a part of the deal.
Foreignors are not the issue. They are just a tax grab. Which is ok. Canadians are not foreignors.
“welfare recipients are still being shipped from other provinces to Vancouver/Victoria,”
Evidence?
Hawk,
“Looks like Victoria has peaked out on moving trends.”
You could be right, however the report also shown that Langford is growing quickly.
http://www.timescolonist.com/business/langford-s-population-grows-by-20-9-in-five-years-highest-in-region-1.9748691
totoro,
“Victoria’s council might be in favour, they asked for a 15% non-resident (of Canada) tax”
Hard to say, but the non resident tax was defeated in Victoria last spring in a tie 4-4 votes.
Introvert,
“Does Victoria need 600,000 people? Is limitless population growth sustainable here or elsewhere?”
Same question can be ask of all communities in the world and you will get the same no answers. People do not like foreigners, competitions, or change. And, it is unlikely that Victoria population growth is going to stop at any time soon, because retirees are still coming here to live out their days, welfare recipients are still being shipped from other provinces to Vancouver/Victoria, and young families are coming in droves.
“And, again, he does not make decisions.”
He has influence and I’m sure he knows many people with money. Politics is a dirty game ICYMI.
Once again, the bankers see where the money is flowing better than the layman.
Gwac says: “Foreigners are not creating this issue. Our population growth is.”
Foreign buyers using Canadian homes as piggy banks, RBC CEO warns
Foreign inflows are distorting Canada’s already constrained housing market and aren’t the kind of investment the country needs, RBC chief David McKay said
““We do not need foreign capital using Canadian real estate as a piggy bank,” David McKay, said Tuesday at a bank conference in New York hosted by the Toronto-based lender. “If capital is coming in to sit in a home, unproductively, and is distorting your marketplace and the livelihood of your residents — no thank you.”
McKay, whose bank is Canada’s largest mortgage lender, says he’s supportive of government taxes and other measures targeting foreign buyers, as well as other regulatory efforts to cool the country’s housing market. He’s seeing some impacts from these rule changes, with “a little bit more healthy dynamics.”
http://business.financialpost.com/news/fp-street/foreign-buyers-are-using-canadian-homes-as-piggy-banks-rbc-ceo-warns
He got 57% of the votes. It was a landslide win – full 20% of the votes above the next candidate. By comparison, Lisa Helps won with 37% of the votes and only 89 votes more than Dean Fortin. And, again, he does not make decisions. A quorum of Council makes decisions and, on this particular issue, they are engaging in a community consultation process.
“How about we not densify, and let prices continue to rise, which will signal to people that Victoria is full. And if you’re rich enough to buy here, go for it.
Does Victoria need 600,000 people?”
Who said anything about 600,000? BC Stats projections put the CRD at about 470,000 by 2041. As for not densifying, I’m all for it – my preference is to do away with the ALR and throw all that land open to development. Build single family homes to your heart’s content – it’s what everyone wants, and the land is there so go for it.
“Is limitless population growth sustainable here or elsewhere?”
Population growth is limited here by a number of natural factors, e.g. it’s on a fuckin’ island, and made-up ones, e.g., restrictive land use policies. Let’s not get hysterical here about Victoria suddenly becoming the next Vancouver.
Well, CS, that is a long ways off. Sometimes I think some of the locals here have no clue what it’s like in other parts of the world. They don’t seem to know how good we have it here. Have a look at this website and punch in stat’s for any country…
Let’s have a look at Taiwan… since it’s very similar in size to Vancouver Island…
http://www.worldometers.info/world-population/taiwan-population/
We have lots of room to grow here on Vancouver Island – with a pop. density of only 24 people per sq. km if we were all spread out evenly. Compare this to Taiwan – With 670 people per sq. km! Taiwan is much more crowded. So this is why it’s apparent that even a 20% tax may not deter Asians, who come from much more crowded and polluted conditions, from coming here to BC… if they can… The tax may, in fact, be worth it to them. Or, quite possibly, they will get PR status first and then avoid the tax altogether.
Out of interest – Victoria’s CMA population density is still less than the Taiwan average… at 495 people per sq. km. We humans do like to crowd don’t we?
With so much room to grow and empty land on this island though, one does wonder why they aren’t just creating new cities in the nearby tree farms? I’m not talking about Langford (please put more thought into any ‘new towns’ than that abortion!) I’m talking about all that gently sloping empty tree farm lands just west of Sooke. Imagine the sparkling new cities that could rise on those shores? Alleviating overcrowding in the core and creating new jobs, space, and industry. But no… not in Canadistan – here we just expect more people to crowd into existing aged inadequate cities.
Hence, re-zoning is needed. But, are we going to raze existing ‘hoods ? Unlikely. So, land will continue to rise in value as long as population growth continues and no new cities are created. We may see an increase in condo’s listed as the Spec tax kicks in – but I see it unlikely that much more in the way of SFH in the core will come on market.
Looks like Victoria has peaked out on moving trends. Previous two years Victoria was #9 and #11, now it’s not even in the top 25 going by U-Haul stats trends. The thrill is gone.
U-Haul Canadian Growth Cities: Ottawa No. 1 for 2017
http://myuhaulstory.com/2018/01/10/u-haul-canadian-growth-cities-ottawa-no-1-2017/
“He has not been active as a realtor since 2014. ”
Who do you think voted for him ? Real estate buds maybe ? Jeezuz the naivety.
“Foreigners are not creating this issue. Our population growth is.”
Foreigners play a part by paying well over ask to secure properties at all cost. That’s how Vancouver got stupid and the same mentality spread here.
Soon you will see the media jump on the reality that Victoria is getting too big for itself. Our infrastructure can’t handle much more.
Stories will come out of people will choose to leave or contemplating it. I know I won’t be living in the core when I buy, who needs the congestion when one accident happens and half the town is gridlocked.
“Where does the Oak Bay hotel advertise rentals?”
Secret website that bans salesmen and peddlers. 😉
He has not been active as a realtor since 2014. And West Kelowna’s mayor is a retired civil servant and West Kelowna is way more irate about the tax than Kelowna council. https://okanaganedge.net/2018/03/01/blindsided-by-tax/
In any case, Council positions are determined by a quorum, not the mayor.
If foreigners were creating this issue. NDP should have stop foreign buying period. How does taxing a foreigner help a young family who is looking for a house if the foreigner is still there competing for the same properties. NDP tax revenue shows no decline in foreign buying. Asking questions about who is being helped by these policies.
“After we densify, we’ll need more densification. It will never end.”
Yeah, you have it. That’s what it’ll be.
And as VI’s population doubles and Victoria grows to 700,000, Nanaimo will reach Victoria’s present population of 350,00, providing what some will say is a city of the ideal size.
And when Greater Victoria reaches a couple of million, and the ten story limit on Oak Bay Avenue goes to 50 stories, there’ll be around half a dozen perfect-sized (350,000) cities on the Island, including Duncan, Parksville, Courtney and Campbell River, and folks there will be hand-wringing about endless densification.
Kelowna mayor is a realtor
I think that is fine to a point, and what will (has) happen(ed) anyway. I don’t think it is fine not to have affordable rental housing in any community. I also don’t think it is fine to have people not paying federal or provincial taxes if they are profiting from housing and this could be increased which would likely moderate the market anyway. Affordable housing funding should be linked to these tax revenues.
After we densify, we’ll need more densification. It will never end.
How about we not densify, and let prices continue to rise, which will signal to people that Victoria is full. And if you’re rich enough to buy here, go for it.
Does Victoria need 600,000 people? Is limitless population growth sustainable here or elsewhere?
I’ve wondered the same thing.
Totally agree. There have been quite a few crash cheerleaders here over the year. While a sudden crash would benefit some it will hurt many, many more. The best case is a slight decline followed by stagnation with inflation doing a lot of the work of restoring affordability. If that is what we get – we are lucky.
Except, of course, those responding were supporting the idea that speculators would be taxed. I don’t think their views of “speculators” were well formed. The details of how were not canvassed because they have not been released and the impact on vacation homes would not have been identified, nor the impact on seniors owning vacation homes, nor the impact on Canadians from other provinces who live here a good part of the year.
Some responses to the tax:
https://www.kijiji.ca/v-house-for-sale/calgary/avoid-the-new-bc-speculation-tax/1337566507
Kelowna and West Kelowna mayors and Council are opposed to the tax as well.
Vancouver’s council must be strongly in favour given they implemented their own tax. Victoria’s council might be in favour, they asked for a 15% non-resident (of Canada) tax. Who knows what Nanaimo’s council thinks, they can’t stop fighting among themselves long enough to make any decisions.
Totoro seems the rental market is better. Even Hawk admits that.
If we keep expanding the population. The demand for the “in” neighborhoods will keep going up. Younger people/ will have no choice but to go further out or downsize. Foreigners are not creating this issue. Our population growth is.
Government meddling does not change that.
Good question. I don’t know.
Only thing I believe for sure is that a lack of affordable rental housing is a negative for our community. Rental affordability needs to be tied to income and basic rental housing is, I believe, a human need we should support with tax dollars for all sorts of reasons.
Other than that, the housing market has tended to follow a trajectory that exceeds inflation in desirable areas with periodic ups, downs and flat periods. Is that a crisis here now in Victoria? Not sure.
“if the bubble bursts then the NDP will be blamed.”
Blamed by some, applauded by others. Either way, it will be a largely false attribution of responsibility.
Interest rates, economic boom or bust, inflation, and psychology will affect the trend in house prices more than anything the Government of BC is likely to accomplish.
What is the definition of a housing crisis? People cannot find somewhere to live or People cannot afford a house in Oakbay and have to buy in the Western communities?
LeoM
You might well be right since the chances are that you have a better finger on the pulse of the province than I do. What we do agree on is that house prices are wildly exaggerated in Victoria. Frankly, I truly believed that they were overvalued back at the end of 2013 when I bought. Goes to show you how flawed is my crystal ball. A major crash will not have any really impact on those mainland buyers that bought with cash but I am concerned with the young families that bought in the west shore in the last three years. Personally, I think it is preferable to see the housing market slowly deflate over the next few years rather than a sudden and massive collapse that would bring construction to a standstill.
Barrister said: ”if the bubble bursts then the NDP will be blamed”
Not necessarily Barrister. The bubble hasn’t burst yet, but it appears the worldwide real estate bubble is slowly deflating, so the NDP might not be blamed, on the contrary they might be congratulated for stopping the insanity by speculators driving up our prices to a level that benefits a few but harms the many. Regardless of how effective these NDP measures are, one thing is certain — The NDP will get 90% of the young votes in the next election and a huge percentage of the wanna be homeowners voters.
These NDP moves are not political suicide, but rather a mobilization of over 70+% of voters who support the NDP’s plan to attack the perpetrators of the housing crisis in B.C.
Schadenfreude also plays a big part in the huge public support of the NDP initiatives.
Patriotz:
You make some good points, Politically speaking, as opposed to the economics of the situation, the real risk to the NDP is if the housing bubble suddenly bursts. I dont think that this legislation will be the principal cause of the bubble bursting and one can argue that it is not even a major contributing factor. Politically though if the bubble bursts then the NDP will be blamed. Considering how many jobs are linked to the construction industry then the blame could be pretty widespread.
I suspect that someone in the Liberal caucus has the brains to take a wait and see position. It will be interesting to see if this turns out to be a non event or whether it turns out to be a train wreck. I will be keeping an eye out for what effect it has on sales of properties in Whistler. I know that Whistler is exempt from the tax which is precisely the reason to watch it. If the “message” in Alberta and the United States is dont buy anywhere in B.C. then this might have more impact than was thought.
By the way, the talk on the street in Toronto is that the free trade negotiations, barring some breakthrough, are going badly. As a friend of mine so subtly put it, Ottawa seems to have a problem realizing that if the talks fail that, while the US will take a bullet in the ass, we will have our heads chopped off. No idea if that is true but an interesting perspective.
And here’s why you do your taxes right. The CRA can be jerks too http://www.cbc.ca/beta/news/canada/british-columbia/cra-tax-prosecution-malicious-injustice-1.4563235
The tax for 2018 will only be 0.5%, precisely so that people affected will be able to plan their choices before the 2% kicks in.
I do think the NDP is going to tweak things to exempt some special cases (or maybe all the Gulf Islands), but politically I don’t think they have to. There would be very few genuine hardship cases anyway, their votes are geographically dispersed (remember they vote at home not the cottage), and opposition appears to be from people who oppose the NDP anyway (yes that includes some of you on this forum). Those who can’t afford even one property are not going to have much sympathy for those who have to downsize from two.
You might also note that the MLA representing the Gulf Islands, who is from the Green Party, has so far been silent on the issue. In fact the BC Liberals have been silent on the issue too. You should give that a good long thought.
LeoM, I really want to believe you. However, if the tax is coming this fall, shouldn’t we have the details now, so people have 6 months to plan their affairs? Wouldn’t that be fair to everyone involved?
The lack of details about the tax, combined with a lack of clarity over who it is actually aimed at, really doesn’t inspire a lot of confidence. Every time someone here says “the NDP are clever, just trust us”, they should pay Leo S a $1 “speculation” fee to be put toward a local homeless charity.
I wouldn’t worry about the speculation tax until the statute and regulations are finalized.
The NDP aren’t fools, their goal is to free up houses and condos in a few key areas, most notably Vancouver, Victoria, and a few other hot spots. Most of those thousands of empty condos/houses are in the cities and most are used for a few weeks each year by the owners who like to visit for several weeks each year and they don’t need the rental income and they want their condo/house available whenever they decide to drop-in for a short visit.
If a commoner like me knows three families with condos in downtown Vancouver that are only used by family for a few weeks each year, then it’s feasible there are thousands of such condos in Victoria and Vancouver. These are the targets of the coming NDP legislation, not a family cottage on Saltspring. Car dealership owners like Jimmy Paterson, lumber barons from the interior, oil tycoons from Alberta, factory owners from China, and many others will just pay the tax, but the majority will likely sell before the 2% kicks in.
My wager is that the NDP and the Attorney General lawyers will find a creative way to hit the target group without much collateral damage to the cottage owners at Saltspring.
Thanks “Once” that was very helpful.
))) $100 K income does not support owning a primary home in BC plus buying a vacation condo in Kitsilano, James Bay or a second home on Saltspring.
More nonsense. I’m talking about seniors with existing homes, not millennials trying to buy a first home. Many seniors are in this cateogry, including my mother. The house and cottage were purchased long ago, when they were working and had higher incomes. Now they are retired, only with pension income, which is less than $100k (of course you still pay the cottage tax even with $100k of income, but you pay much more if your income is lower).
Now they are subject to this tax, because the NDP thinks they are speculators, and not big enough earners to offset the tax.
The info sheet also listed “Certain special cases” so we know there will be more exemptions, we just don’t know what they will be.
So, we have heard about the (unintended?) collateral damage of this tax, but what are the numbers for the owners that are supposed to be the target of the spec tax?
In the core, what percentage of actual speculators are keeping their houses vacant? My (worthless) speculation is that we have five kinds of people that actually drove prices up in the last two years:
1) Flippers that re-sell new build condos before they even complete. Spec Tax: None.
2) Reno-flippers. Probably an exemption for “major” renovations. Spec Tax: None.
3) Canadians who bought as an investment because “real estate always goes up”. These people are renting out and often subsidizing their tenants. Spec Tax: None.
4) People who actually moved here from places like Vancouver, when their homes jumped. Spec Tax: None.
5) Mythical Chinese house hoarders that keep their property empty for years. Spec Tax: Unknown, depending on loopholes.
How many of number 5 are there in Victoria? If you limited it to people that fall under the Foreign Buyer Tax, then you would still catch them.
I have great hope that David Eby is going to smash any money laundering that distorts the market. To me, that seems a much more clear goal. Otherwise, this is really a holiday home tax. Trying to demonize Canadians with second homes seems pretty strange to me and Totoro has done a good job of outlining the absurdity.
3Richard, I don’t like the tax either, but this case is pretty well covered.
Info sheet here:
https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
The only things we do know are exempted:
1) Primary residence
2) Long term rentals
If you don’t fall into one of those two categories, you might be able to offset the spec tax with BC provincial income tax (if your income is high enough). While it will hit the percentage of people speculating in the larger urban areas and not renting out, it also casts a wide net of collateral damage.
Pretty much all the solutions proposed here (tax credit multipliers, exemptions for gulf islands, exemptions for long held recreational property, exemptions for retired people who paid income tax in the past) are just “speculation” and should be subject to a wishful thinking tax…
Property taxes in Canada are regressive with respect to income. Low income earners (who own) pay a higher proportion of their income to property taxes than do high income earners, even though high income earners pay more total.
Most of the spec tax will be paid by folks living outside of BC. But will the tax be regressive for British Columbians?
In theory yes. The British Columbians paying the most spec tax as a proportion of income will be those owning two properties, including one vacant one in the spec tax areas, and reporting low to zero income.
In practice to even be eligible to pay this tax you pretty much need to have a net worth of 1M+. The vast majority of British Columbians will avoid this tax by:
a) not having enough money to buy two homes or just not wanting a second home
b) not having enough money to buy a second home in the most expensive parts of the province so having one in the non spec tax areas
c) not having enough money to buy any home
d) needing to rent their second home for income to support the purchase
e) the money they make to buy the second home gives them a tax offset to avoid the spec tax.
In summary. NO poor British Columbians will pay this tax. The vast majority of middle class and rich British Columbians won’t pay it either. A handful of asset rich but income poor Briitsh Coumbians may get hit with the tax
@ QT:
Agree. And the tax break should be on income of both parents whether cohabiting or not, and should be paid as a cash refund to the mother, thereby restoring some of the economic security that has been lost as a result of no-fault divorce, an innovation of the first Trudeau Government, that coincided with the decline of the fertility rate below replacement. (Non-enforcement of the anti-abortion law was, though, probably a bigger factor, plus the drive for more girls’ education that steered women into professions that must seem to some more rewarding than motherhood.)
Not suggesting this actually happen – pointing out that second home ownership is being vilified while other higher impact housing is not. SFHs is the core areas are tax preferred already if they are primary residences and increased density and capital gains tax changes would do a lot more for affordability/vacancy. I don’t know enough about urban planning to have fantastic ideas, but zoning changes seem pretty key.
I am in favour of taxing truly speculative investments in home ownership whether it is a primary residence or secondary residence owned by a BC resident or a resident from any province. Second-home ownership is not necessarily speculation for many Canadians, while primary residence ownership often is due to the capital gains tax exemption in a rising market.
If you are a satellite family with no history of paying taxes in Canada in line with the benefits you are receiving this should be a very high tax scenario. Non-residents who are owning through resident family members should be subject to specific rules and taxes.
If you are an Ontario couple who lives here part of the year in a house in Parksville you bought ten years ago and want to keep residency in Ontario because the cancer specialist you trust is there you should be allowed to do that without penalty.
https://www.theglobeandmail.com/news/british-columbia/part-time-bc-residents-fear-they-may-feel-full-sting-of-new-speculation-tax/article38205444/?cmpid=rss
It does if you have downsized from a SFH to a condo or inherited or saved up for many years after paying off your home. Especially if you own a modest home, paid it off and borrowed against it to buy a condo in Kelowna years ago. It doesn’t if you are just starting out.
It is the older folks who have saved and retired and bought a vacation home and no longer have working incomes that will be hit by the tax quite hard. They’ll either have to stop using their vacation house and rent it or sell. Maybe there will be a long-term part time resident exemption. If so, that would probably make things easier.
I still haven’t seen any explanation as to how an owner of a rental property that lives outside of BC and files a different provincial tax return will be exempt of the “Speculation Tax”.
Marko. I got quoted 1200 from van isle for 4 2by3 feet window replacements. Just shocked at that 11000. Window treatments will be more than that.
Patrick your argument would have some merit except for the pesky detail that there just aren’t that many low income British Columbians who own expensive vacation properties.
$100 K income does not support owning a primary home in BC plus buying a vacation condo in Kitsilano, James Bay or a second home on Saltspring.
Bottom line is we have no details on key aspects of the tax: Is the tax credit 1:1 or some other ratio? Is there going to be some exemption for lifetime taxes paid? Getting in a high dudgeon over the “poor” seniors who will no longer be able to afford two homes seems premature and also misplaced.
Well I will agree with you partially totoro.
Every government policy has unintended consequences. There is usually no way to completely eliminate unintended effects, but they can be minimized through careful design.
Overall the speculation tax should encourage some folks to sell or rent homes they hold in the areas covered by the tax. That is a positive effect that will increase rental availability and perhaps cause a small decline in purchase price in these housing crunch areas.
Against these positive effects we have negative effects – the relatively few low income earners that nevertheless own expensive vacation properties that they may be forced to sell or rent them.
While these negative effects aren’t wholly negative (even places like Saltspring could benefit from more affordable housing) they could be largely avoided by scoping down the areas to which the tax applies to if the government wants to.
Penalizing large lot urban dwellers as you seem to be suggesting might be attractive to some (in a soak the rich kind of way) but won’t be likely to free up substantial additional housing units. Plus it would be a policy/legal nightmare to design such a program. The mere existence of the Shaughnessys and Uplands type neighbourhoods is not causing the overall affordability problem since they constitute such a small part of our urban landscapes.
11k for Windows for 4200 sq ft home. That seems unbelievable cheap. How much is installation Aprox?
Installation is included in the framing contract.
Something things are really reasonable such as windows, but the same house was $48,000 to frame (labour only). 4,200 + 600 sq/ft garage. My house was a substantially more complicated and that was in the low 30k 3 years ago. I even had a quote for 26.5k but didn’t feel the contractor had enough employees to do the job in a timely manner.
That refers to mobility of person, not capital. It would be like me arguing that being forced by law to pay Income Tax violates my section 7 Charter rights, since paying none would materially protect the aspects of my life that 7 tries to enshrine. Or better yet, section 8.
It won’t work. The tax does not represent a true threat to principles consistent with a free and democratic society, IMO. If it said, “people from Alberta must pay the tax, but people from Saskatchewan don’t have to” – then you might have an argument.
As it stands, it’s just a pain in the *** for some people.
11k for Windows for 4200 sq ft home. That seems unbelievable cheap. How much is installation Aprox?
Caveat: ))) For a British Columbian to have to pay this tax they need to:
1) Have a low to very low income ( so no tax credit)
2) Own a second home that is located within the CRD, MVRD, FVRD, RDN or Kelowna
3) Keep the second home empty
Nonsense.
Point #1 is demonstrably false. Use a tax calculator such as one here https://simpletax.ca/calculator , you will see that with an income of 100,000 per year, you pay $6,797 in BC tax. So your $500,000 salt spring cottage is costing you 2% cottage tax, and that is $10,000 tax. You get to pay the difference, which is $3,303 extra tax. That’s for someone making $100k. So your statement #1 that only people with low income would pay this tax is clearly wrong.
Normally with taxes, showing an example of a lower income earner would show less tax owing, but not with this NDP REGRESSIVE tax. So let’s show a senior with $30k income. They pay $910 in spec tax, so they owe $10,000 tax on the $500k cottage, and they only get $910 back.
So the less income you make, the more cottage tax you pay, thanks to this NDP government.
Caveat, I hope you withdraw your statement that you need a very low income to have to pay this tax, since you see that earning $100k still means you would pay tax.
Moreover, how are you even morally comfortable with your statement that only someone with a very “low income” needs to pay this tax. How can people with a very low income afford this extra tax? Explain that one to your kids – lwe’ve made a new tax but only people with very low incomes have to pay it…..”
Totoro: “Shouldn’t the basis of a speculation tax be on speculation? Shouldn’t we define this first?
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
This new tax will undoubtedly capture a minority of people that you outlined. I think that the powers that be would call that collateral damage.
I don’t know Totoro, perhaps it is a coincidence that people have started buying multiple homes when interest rates plummeted and home values skyrocketed.
Leo S. pie chart pointed out 22% of Victoria buyers purchased second homes. Coincidental with the market taking off here? Not too likely.
Apparently, in Toronto, locals decided that multiple homes were great “investments” as their market took off. You can bet Vancouver and Victoria followed suit and this article was from 2016.
https://betterdwelling.com/city/toronto/foreign-buyers-domestic-greed-121000-toronto-homeowners-multiple-homes-city/
“The province is calling out Torontonians that bought multiple homes in the GTA, and there’s a lot of them. An analysis conducted by the Ministry found that 121,100 people in the GTA owned at least one other home in 2016. This number was a 14.46% increase from the prior year, and was the highest year of growth in the 16 years of data provided. In 2000, that number was just 24,000. So we’re looking at a massive 404% growth by 2016. Since this data was taken from MPAC property assessment records, it’s likely an underestimate. Families where a partner is legally registered at another address, wouldn’t have shown up on the query. So while 404% is a big number, it’s probably much larger..”
My window/door package for a 2800+ sq. ft. PH was 38K delivered, including an unnecessary fancy front door.
My Milgard window package was $8,400 + $2,800 for custom front door and $1,000 for suite front door. Right now a friend is building a 4,200 sq/ft home in North Saanich and his Ply Gem windows cost is $11,000 (not including doors). You can’t possibly pay off premium windows in this climate.
How much R value do you add going from double to triple? 2 or 3 at most?
If you are going triple might as well make the windows smaller too to improve efficiency. A lot of these modern builds are approaching 25% window surface area.
Right now, I am getting rid of my second car (a civic) to replace with a second electric car. It makes zero financial sense, but I just want to go all electric as I find it interesting. So I understand the interest in building a PH but the numbers I just don’t know. Doesn’t make sense to me simply given that our hydro/gas is cheap.
Rentals in my building going over 30 days now too with more just listed. First time in a very long time thats happened.
Where does the Oak Bay hotel advertise rentals?
Just trying to roll out some new vblogs….what are your thoughts on speculation tax and the Mobility Charter?
“6(1) Every citizen of Canada has the right to enter, remain in and leave Canada. 6(2) Every citizen of Canada and every person who has the status of a permanent resident of Canada has the right (a) to move to and take up residence in any province; and (b) to pursue the gaining of a livelihood in any province.”
Can any sort of argument be made that the speculation tax is in violation of the Mobility Charter?
What are the rents like in your building Hawk? And it it one you would recommend….I,don’t expect you to name it., just curious. I will be renting some day and want to keep tabs on what you have to pay for a good unit.
“The principle is, if you have a place in British Columbia and you are benefiting from the services in British Columbia, you should pay your taxes in British Columbia,” she said.
The term “speculation tax” does not seem to reflect Ms. James’s intent.
“I certainly see it more as a fairness tax,” she said. “We think it is fair for people to pay a little bit more for the services they benefit from, whether we are talking about roads or parks or the community itself.”
WELL THERE YOU HAVE IT……THIS TAX HAS NOTHING TO DO WITH A “SPECULATION TAX”
CAROLE JAMES WOULD PREFER TO CALL IT
……….”A FAIRNESS TAX”
Sidekick Spliff,
Correction:
93% of delta-8.25C
instead of 93% of delta-8C
I would wait for at least a decade to make sure the bugs are iron out and to make sure that manufactures, builders, product suppliers, and installers claims are true before I put my hard earn money into it.
CS,
Perhaps economic, education, and age have something to do with Canadian fertility rate. Canadian population with college degree or greater is now at 54% of the population, and statistically a woman with children is a disadvantage vs. younger woman with no children. I think the government may have to put in some serious thought into solving the fertility rate, because the current policy is not working. A much greater tax break incentive for high income family and even greater for high income single parent as a way to increase fertility rate instead of tax grabs that pay into non productive programs.
Sidekick Spliff,
I’m not disputing the semantic of air tight/vapour barrier, but the essential thing is that a house have to breath so relative humidity level stay below dew point to prevent condensate and mildew. You are correct that building code do not include air tightness in the code and thankfully it is not, because that would add another layer of red tape onto the overly complicated system that we already have in place. However, it doesn’t mean that the code doesn’t address what vapour barrier material must be use to envelope and sheet the building. Maybe residential HRV has improved greatly in the last decade that I don’t have knowledge of, but what I have seen is that due to our very mild climate it doesn’t make sense to have HRV for energy saving unless you live the prairie where it make sense due to greater delta-T than our climate
The HRV unit that you quoted at 93% efficiency is very likely running rated at peak efficiency, and just to let you know, to achieve high efficiency you have to increase in heat exchanger surface, decrease airflow. It lead to high maintenance and rapid drop in efficiency in usage, because of dirty/gummed heat exchanger surface (and the rating is very likely rated at high humidity level).
One also must look at the delta-T of temperature between inside and outside to truly appreciate the recovered energy. Victoria average winter day/night 8C/4C, low/high 11C/20C, so to simplify things we call it average of roughly 9.75C and you keep your house at 18C, so in best case scenario with brand new HRV of 93% of delta-8C or capture heat energy of 7.67C and then calculate the energy consumption from the blower/fan of the HRV to see what kind of energy saving that you can get. And, that is the best scenario, however in real practice you often do not get any where near manufacture rating and at best case scenario you are lucky to capture 50% of the exhaust energy.
And, please don’t let me stop you from having HRV system in your house for that tax rebate. But personally, I would wait for at least a decade to see if what the manufactures, builders, product suppliers, and installers work out the bugs and to make sure that their claims are true before I put my hard earn money into it.
toroto,
I do support density increase in core areas, and I do feel these will come in future, if we have good government in power long enough. But big changes take time, and need to be done in stages.
As Leo said, these new tax measurements may not have very big impacts, but they are good first steps and towards right direction.
I would support RS-x lots size reduction as part of the start, in addition to FB tax (FBT) and spec tax (ST); You like additional tax for primary residence as the start (in addition to FBT and ST, I hope); 81% of BC support FBT and ST as the start.
So we all agree that changes are needed, and they have to start somewhere. The most important thing is to start, even be it small at first, and keep moving forward from there.
Freedom, its a company owned building. Usually vacancy signs are up for 24 to 48 hours max the past couple years.
Is your building a company owned rental or a condo (strata/lease hold)? If it is a condo, it could be the coming spec tax pushed these units out for long-term rental. If so, that is good thing for our tight rental market, IMHO.
So, because most cannot afford a second home those that do have a vacation home should be penalized? Most can’t afford a big home with a big lot in the core either – should we penalize those that can because, well, they can and their home is taking up too much space? If not, then the rules are not being applied reasonably.
Shouldn’t the basis of a speculation tax be on speculation? Shouldn’t we define this first? What about those with vacation places who are not speculating ie have no intention of selling. Those that split their time between two places for reasons of work or school or family? Those that are worried about being priced out by retirement age? What if the value of the two homes is less than the value of someone else’s SFH? Or the median SFH?
And what is affordability? If you sold your house here once your kids left home and bought a condo you too could likely afford a place on Gabriola as well and you’d be freeing up a SFH for another family. Someone with a SFH could be contributing far more to affordability issues than someone with a vacation home.
I think we should definitely discuss this. If we are trying to address affordability then we should be looking at all the issues including whether density needs to be increased and whether those living in smaller spaces should be incentivized for doing so. We should identify the causes of rapid appreciation which include the capital gains tax exemption for primary residences.
What you or I believe is irrelevant until the details come out. Even if this is the case, the policy is not going to have the intended effect imo. A policy that applied to primary residences would definitely effect the market immediately, and I am one who would be affected by this. I’m not trying to evade something personally here caveat as I am not affected by the spec tax, I just believe we have a situation of a policy that will have some unintended consequences and basic fairness requires that we examine the situation and apply a more tailored solution. Not discussing primary residences is safe politically, but not exactly fair given the great gains in exempt appreciation that are buoying the market. Secondary homes are subject to capital gains taxes so they are much less lucrative.
I don’t think this will be as rare as you think for vacation homes. They are often inherited and owned by seniors or purchased by families who pay them off by retirement and renting out is inconsistent with regular personal use and the new residential tenancy laws make it much more difficult to have someone there part time.
6 price slashes on 2 bed 2 bath condos the past day. Haven’t seen that in awhile. Rentals in my building going over 30 days now too with more just listed. First time in a very long time thats happened.
It is simply not affordable for most of us to own a second home in current housing market, period. Thus the 81% support rate for the spec tax.
What is your point? The spec tax applies to the core areas already, you want it to apply to all the homes, not just 2nd homes?
Wouldn’t this be the same for retired and middle class people in primary residence market?
toroto,
I do believe, as I stated before, the final implementation of spec tax will consider those who own their vacation home for a long time and are not in core rental areas. If you don’t think so, best is to spend time to write a good letter and voice your reasoning to you MLA and Ms. James.
Sooke to Sidney pretty much.
Gulf Islands and Port Renfrew not so much.
Precisely. People moaning about this tax make it sound like it will mainly penalize remote rural vacation homes. In fact the VAST majority of the homes it will apply to will be in Metro Vancouver, the Fraser Valley, and Greater Victoria all areas experiencing affordability issues.
Patrick claimed the NDP is taxing the poor. I dispute that claim.
Most of the burden of the spec tax will fall on foreigners and Canadians from outside of BC. Then there is a relatively tiny number of British Columbians that will be affected.
For a British Columbian to have to pay this tax they need to:
1) Have a low to very low income ( so no tax credit)
2) Own a second home that is located within the CRD, MVRD, FVRD, RDN or Kelowna
3) Keep the second home empty
I fully expect further exemptions to the tax for some of the rural parts of those areas that will further reduce the small number of British Columbians paying the tax. Likely also see an exemption for licenced short term rentals.
Those (very few) British Columbians that actually own vacation homes in the main urban areas are unlikely to be exempted and will have to pay up, rent, or sell.
Wait… really? Can I have a link or something?
I just looked and I can buy a 3 bed SFH on 4.88 acres on Saturna for 269,000.
https://www.realtor.ca/Residential/Single-Family/15981693/410-EAST-POINT-ROAD-Saturna-Island-British-Columbia-V0N2Y0
How low do these house prices need to go?
If housing is completely fungible across the CRD, I expect Josh to move to Saturna and give up renting in James Bay 😉
As if the spec tax didn’t apply to the big cities. Indeed, almost all properties affected by it will be in big cities or within commuting distance of them. Take the Gulf Islands out and you’re probably up to 99%.
“I think people in BC are starting to forget how ridiculously expensive the whole place is.”
You got that right patriotz !
:large
Good info on Zehnder systems, Thanks Sidekick Spliff.
Did some searching, and find this interesting ductless Zehnder HRV/ERV:
http://www.greenbuildingadvisor.com/articles/dept/musings/zehnder-develops-ductless-erv
I think that is a bit of a red herring.
Obviously if you own a second home outright you have some level of net worth above the poverty line. Just like if you own a primary residence outright or for more than a couple of years you’ll have higher net worth. However, there is a big difference between net worth and net monthly income. This is why we offer property tax exemptions for seniors.
There are families in BC who have inherited or purchased vacation home prior to retirement which has appreciated and is now worth ex. $500,000 who could not afford the 2% speculation tax on top of the home operational expenses and taxes and any remaining mortgage. $10,000 after tax is a lot of money and if you are retired you won’t have a big tax credit against it or even if you are earning a middle class income.
This is a far more likely scenario than an Asian investor in our area given our foreign buyer stats. And many of these homes are in areas with poor winter rental markets and long-term rentals are inconsistent with regular personal use. It is simply not affordable for most to pay a 2% tax on a second home and if we are trying to increase affordability and vacancy rates it is the primary residence market that needs to have some tax treatment applied that motivates change.
Thanks for the post. I usually turn on space heaters once the outside temp drops is below +5c. They warm up my place nicely.
Patrick, why are you trying to define people who own two homes in BC (one of them a vacation home in one of the most expensive areas in the province) as “poor”?
Sidney is within Victoria Census Metropolitan Area, a place that you may have noticed has a housing affordability issue. Saltspring is not. Pretty simple really.
In other words a vacation condo in Sidney sold on to the market would help Victoria affordability. A Saltspring vacation cottage would not (or only to the most minimal extent.
Thanks the info, very good reading.
I enjoy reading these constructive posts than those self-absorbed talking out from their ass.
@Marko Juras
What kind of price range are the Airlux units? Who did you find to install it?
@ Barrister:
My own view is we need more people merely to achieve a political weight in the world commensurate with our huge land and resource base. Otherwise, we will for ever be taken very lightly by leaders in the US, China, India, etc. But it would be best if our population increase was by the reproduction of Canadians, not the replacement of Canadians with people from else where.
To that end, we should in the first place, aim to achieve a fertility rate equal to the replacement rate, which mean a one-third increase over the present rate. That requires a lower cost of housing and better job prospects for young people, i.e., better than hauling dry wall or looking after geriatric patients. That means reconstruction of Canadian manufacturing and the creation of more jobs in every branch of technology. For that reason we should be seeking to form a common policy with the US, not telling the US what is or is not acceptable to us — a ridiculous posture for such a junior trade partner to take.
Air-tightness isn’t a cause of mold. A poor vapour barrier is. When hot humid air gets inside your walls and reaches something cold, it condenses. This can cause mold and rot. Poly is a terrible vapour barrier and it’s too bad it’s the standard used today. Also note there are currently no air-tightness codes in the BC building code.
Interestingly (or not), this is the main driver behind the target energy usage numbers for passive/pretty good houses. The engineers looked at what it would take to throw out a dedicated heating system and have the ventilation system do double duty. What they found was that you could heat the entire house via the HRV ducting using a simple in-line electric resistance heater (a hair-dryer). They found the heat source couldn’t get above 50C or you’d get burnt dust smell. Here’s a place in oregon with a triple-duty system (space heating, domestic hot water, and ventilation): https://www.youtube.com/watch?v=_RRwf3Nh-fw
Not sure how you figure that unless we’re talking bottom of the line units. If the temperature outside is zero, and you need to bring in X litres of fresh air, you need to heat that air up 20 degrees. Use an HRV and instead of heating from zero to 20 you only need to heat from 18 to 20. It’s a pretty huge difference. Incidentally, the HRV in that place in Oregon is a Zehnder 350 which will run you about $2500. Pays off pretty fast.
Sorry for the building/HVAC talk, but I don’t like to let potentially misleading info slide by.
haha, love this comment. I try not to go too far down the rabbit hole. However, it’s crazy that this is happening. It’ll be an interesting few years, that is for sure.
If I am not mistaken it was not that many years ago that the province was promoting B.C. as a great place to own a second home. Strangely enough people bought here.
Frankly, the fair way to go is to implant the tax against people who buy a second home in the future. That would eliminate future demand without taxing existing owners. Eventually second home inventory would be phased out in an orderly manner.
I think, in addition of spec tax on (recent purchased) vacation/short-term rental properties, extra tax on big SFH lot should be coming, on top of high land value % in current property assessment/tax. Cities should also reduce lot size requirement for RS-x on our limited precious island land.
It is not that we like high density, but be forced into it, for everyone to have a good roof, big or small, over their head.
QT:
The flaw in your argument is that we actually dont need the same number of people as before to keep the economy going. For example the manufacturing sector’s output in Ontario is about the same amount as it was ten years ago. The number of people employed is half. Technology is seriously reducing the need for labour. Not having to build additional housing for about 300k a year would also free up a lot of the labour force for other projects.
Morover I did not suggest that we totally reduce immigration but rather keep the numbers much lower with an eye to maintaining the population rather than increasing it by 300k each and every year.
As is most of BC, including areas not covered by the tax, when compared to similar cities on the East Coast but not when compared to other desirable areas of a similar size in Canada. Just because it is more expensive to buy a house in Coombs than rural Nova Scotia doesn’t mean Coombs needs government intervention.
intro
For new high-ratio-insured, closed, residential (owner-occupied) first mortgage loans made to members with a Direct Payroll Deposit to a Coast Capital Savings account and a Pre-Authorized Credit into a Coast Capital Savings investment product (registered or unregistered) only. Additional mortgage insurance criteria may apply. Interest rate and approval based on risk profile. Rates subject to change at any time without notice. Additional fees may apply. Insurance fees and other applicable fees, if any, will increase your APR.
If one household occupies a primary residence in these areas with an affordability issue that is greater than required to satisfactorily house them this affects affordability directly. Not only do they get the capital gains tax exemption and property tax grant, they take up way more space than they need to. Could easily fit four families onto a SFH lot in these areas and increase the taxes and affordability through density.
I’m just putting that out there. If we are going to have rules about this they really should apply based on logic, not a distinction to one class.
I have already pointed out that every one of these places is among the most expensive in Canada compared to others of the same size, but they don’t have higher incomes. Somebody else has pointed out an accommodation crisis in the Gulf Islands. Kelowna’s crisis surely encompasses all of West K.
I think people in BC are starting to forget how ridiculously expensive the whole place is.
Coast Capital Savings offers a “5-Year Fixed Special Insured” at 3.19%. Anyone know what strings are attached?
Barrister,
“We also would not have to build a city almost the size of greater Victoria each and every year if we stopped bringing in 300,000 net immigration every year.”
That is a great argument, however the other side of the coin is that Canadian is living longer, and the average Canadian female produce 1.5 child or less (new immigrant women reproduce more hence the stat is now 1.6 child per woman). Having said that, some one must be working to pay for all of those old folks in Victoria, and also keeping the economy going, hence we desperately need net positive immigration.
Except for, according to the information we have:
Gulf islands.
Horne Lake.
Coombs.
Errington.
Lantzville.
Qualicum Bay.
Bowser.
Cedar.
Gabriola.
West Kelowna rural.
Kelown rural including Mckinley Landing and Bertram Creek.
None of which have an affordability or vacancy crisis as far as I can tell.
Should be called a second home ownership tax in these areas.
swch25
March 5, 2018 at 1:39 pm
Me thinks the liar loans will soon be exposed in spades
Not doubting you at all, Hawk, but just curious how does one lie to get a loan? If i recall correctly, the bank asked for T4’s paystubs, investment statements, etc., and then did a credit check. Maybe people are craftier than i am! haha.
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Hey, buds, you don’t have to be crafty. Just talk to a “good” mortgage broker. These are just the tip of the iceberg. Lol, I thought you might beat me to it Hawk.
https://globalnews.ca/news/2140146/lender-home-capital-cuts-off-45-brokers-for-alleged-fraud/
“Shares in mortgage lender Home Capital Group Inc. were up more than 10 per cent a day after it said it has suspended its relationships with 45 mortgage brokers over allegations they falsified information about borrowers’ incomes.”
https://www.theglobeandmail.com/report-on-business/economy/housing/mortgage-fraud-on-the-rise-among-brokers-trying-to-help-clients-qualify/article27051297/
“Although TD was still reviewing the application, Mr. Dhaliwal instead cut out the Interior Health letterhead along with the signature of the agency’s human resources worker from the couple’s application and pasted them onto a fake new letter, which he submitted as part of a different application to Bank of Nova Scotia.”
Such areas are not subject to the spec tax in the first place. Every community in any of the spec tax zones is among the most expensive in Canada compared to others of the same size.
“Not doubting you at all, Hawk, but just curious how does one lie to get a loan? If i recall correctly, the bank asked for T4’s paystubs, investment statements, etc., and then did a credit check. Maybe people are craftier than i am! haha.”
swch25,
Where have you been the last months/years ? Home Capital ? Mortgage brokers and private lenders will bend over backwards. You need to start clicking on my links and educating yourself bud.
1 In 5 Canadian Homeowners Commits Mortgage Fraud, Says Top Broker
“This one disgusts me,” he explains. “but it does happen a lot in Brampton, a shady mortgage broker may completely falsify all employment documentation, and facilitate the transaction with a known person, whether through the broker channel or through a bank not on the broker channel.” He further explains “A person can request company ABC – to create pay stubs, an employment letter – and confirm via telephone that this person is gainfully employed, when they are not.”
https://betterdwelling.com/1-in-5-canadian-homeowners-commits-mortgage-fraud-says-top-broker/
Not in areas where there is no issue with vacancy or affordability in general such as many vacation areas. What it does affect is community viability, especially in the off-season. In areas where there is an affordability and vacancy issue then primary home ownership as an investment has more of an influence than anything else on valuation and should be part of the conversation – and this would affect us too.
I don’t care if values go down short-term. We have no plans to sell – everything will be left to our children and any grandchildren.
I do care about affordability, fairness and sensible tax policy for the long-term.
Jerry: “Totoro, your tempered reason is wasted on people who see the terms “investment” and “speculation” as synonyms.”
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It seems rather synonymous especially to a lot of secondary home buyers. In an up market it’s called “investment”. In a down market it’s called speculation. lol.
Investment – Wikipedia
https://en.wikipedia.org/wiki/Investment
In general, to invest is to allocate money (or sometimes another resource, such as time) in the expectation of some benefit in the future – for example, investment in durable goods, in real estate by the service industry, in factories for manufacturing, in product development, and in research and development.
Speculation
From Wikipedia, the free encyclopedia
This article is about the financial term. For other uses, see Speculation (disambiguation).
“Speculator” redirects here. For the Montana mining incident, see Speculator Mine disaster. For the village in New York, see Speculator, New York. For the archaic tactic in rugby, see Field goal (rugby).
Speculation is the purchase of an asset (a commodity, goods, or real estate) with the hope that it will become more valuable at a future date.
Whether or not? If one household own two houses, and only occupies one at a time, that certainly affects affordability. Make that unattractive and you reduce demand and reduce prices. Is that your real problem perhaps?
agreed. Leo had a full post on this about a month ago, if i remember. There were some great comments showing calculations and other considerations.
Edit, here it is: https://househuntvictoria.ca/2018/01/25/fixed-or-variable-how-to-make-a-bet/
Not doubting you at all, Hawk, but just curious how does one lie to get a loan? If i recall correctly, the bank asked for T4’s paystubs, investment statements, etc., and then did a credit check. Maybe people are craftier than i am! haha.
Infrequent Poster,
Personally I would go for variable if I can get it. However, many people need the security of fixed rate for eased of budgeting.
“Wow, the fixed rate is now 3.54? That escalated quickly.”
ICYMI, low rates are gone for a very long time.
How many of the 47% who have to renew this year bullshitted their original income statements and fantasy pay raises that never materialized ? Me thinks the liar loans will soon be exposed in spades. 😉
Agree. Seniors and those who inherit the cottage would be helped by this.
QT
Curious what side of the spectrum do you think I am?
I am tad right and have taken a beating for it over the past little while.:)
Anti Tax/ anti Government/ anti socialists. I just throw some leftist posts out there just to be part of the crowd. 🙂
And why should someone with a vacation home who pays capital gains tax and higher property tax already on the vacation house and has a townhouse as a primary residence with the same net value as a large house in Oak Bay with a large lot that that could adequately accommodate a fourplex and that has appreciated more than the vacation and townhouse combined in the last five years and was bought in contemplation of this appreciation get no spec tax, no capital gains and no bad press? They are taking up enough square footage to house four families and impacting affordability.
If we want to capture “investors” primary residences should be on the table. Instead we are capturing families who use two homes whether or not they are impacting affordability or made the choice they did for family values reasons rather than maximum profit.
My view is that we should also consider duration of ownership and if we want to capture satellite families, which I agree we should, then measures need to be taken that do not cast such a wide net without considering fairness overall.
First I like to apologize to everyone for hijacking this forum for HVAC chatter, and a thank you to Barrister.
CS,
I have to agree that the added taxes doesn’t deter foreign investment in our real estate and would be more so if the CAD drop to $0.65 USD like the late 90s to early 2000s. PS. Does anyone have data regarding the real estate price run up from the late 90s to mid 2000s that correlate with the CAD at that time, and perhaps foreign purchase volume?
Sidekick Spliff,
I agree and I’m also not aware of independence rating on heat pumps. Yes it is nice to be able to afford high efficiency HRV over that of low efficiency but one might want to make the decision base on ROI economic, because the higher cost for high efficiency may not translate to over all saving. And, thank you for the ventilation database link. Personally I’ve only work on residential system for the first 2 years and for the bulk of the career it has been industrial and commercial applications, hence there could be some different. That said, like the majority all industries rating and data tend to be bias toward that industry. Presently, there is a financial gains to be running with the mainstream political and environmental mindset, therefore everyone is going with Leadership in Energy and Environmental Design (LEED) for rebates and capital gains that why rating for heat pumps, HRV, etc… are way out of wack. One more thing that I want to mention is due to green and reduce carbon footprint push that Vancouver banned gas furnace and boilers even those they are the most economical sense and perhaps could be greener than building more dams. Perhaps, we should meet for coffee if you are in Victoria to discuss this subject further if you are interested.
Gwac,
Yes, wood inserts are great if you get high efficiency regular log inserts over that of pellets and compressed logs. However, from the environmental aspect they are not truly green since CO2 release is much higher than electric, gas, oil.
And, IMHO there is nothing wrong with having multiple homes if one can afford it. In away these “rich” people are keeping the economy going and provide home and jobs for the have not. It will collapse our economy and perhaps society if we keep on going left and take everything away from the wealthy to share it with the poor. Essentially make everyone equally poor…see communist countries for reference. I’m not advocating a 100% capitalist society, but it make sense to empower people to have pride and work hard instead of praise and give into the lazy/drug addicts.
Freedom_2008,
Because, of “green” building regulation and codes new constructions must be air tight (essentially we live in a plastic bag house), and ventilation is needed to prevent mold for health reason. There are no real true double duty systems, however heat pumps and ac conditioners does double duty as dehumidify and heating/cooling that why drainage is necessary for condensate. As for HRV, they cost energy to run and the heat energy recover doesn’t offset the ROI over that of passive ventilation or bathroom fan exhaust for most residents.
))) If they tweak the areas that this applies to, so as to exclude primarily vacation areas such as the Gulf Islands and rural areas of the RDN and FVRD most of the fairness issues go away. Perhaps also an exemption or credit against the tax for a long history of paying BC tax even if your current income is low.
Well sure if they make all those changes. If they remove salt spring from the spec tax then my point about an unfair spec tax on a salt spring vacation cottage becomes a point about an unfair spec tax on a Sidney vacation condo.
But why did they put them there in the first place, and what leads you to belief they will remove them? And why do you help them in picking winners and losers by suggesting that if your list above of regions was removed it would make this tax “fair”. Why is Sidney to be taxed differently than Salt Spring? Not slightly different but a huge difference of about $10,000 per year on the $500,000 property.
Wow, the fixed rate is now 3.54? That escalated quickly.
OK gang, humor me by revisiting a topic from a few weeks ago.
If you were getting a mortgage today, do you take 2.95 variable or 3.54 fixed over five years? Asking for a friend…
Caveat: Patrick – the category of people that are
a) BC residents
b) have low income
c) own a primary residence
d) own a vacation property or other property not rented out long term in one of the spec tax areas
e) have only 1% equity in the vacation home
Is non existant
———/—-
That’s irrelevant to my argument. It doesn’t matter how much equity one has.
It can be a teacher making 70k per year, and you can choose any equity level you want for her cottage. She still has to now pay $10k spec tax on her $500k cottage (inherited from her parents) and gets a credit of only $3k provincial tax paid on $70k income, so nets out at $7k extra tax. A rich person pays no spec tax on his cottage because his BC income tax is higher and covers the $10k spec tax.
Here is the main point I’m making….
The higher your BC income, the less net spec tax you pay.
This hits “poor or middle class ” people more than rich. Not only in percentage terms but absolute dollars that they pay which is more. Unbelievable for a NDP government to do this.
CS:
Maybe we just need more villages and small cities.
We also would not have to build a city almost the size of greater Victoria each and every year if we stopped bringing in 300,000 net immigration every year.I know the developers are getting rich but I am not convinced that cramming more and more people into just a few cities is making anyone lifestyle better. But people are much more emotionally committed to a bad idea than to any sense of reason.
Part-time B.C. residents fear they may feel full sting of new ‘speculation’ tax
https://www.theglobeandmail.com/news/british-columbia/part-time-bc-residents-fear-they-may-feel-full-sting-of-new-speculation-tax/article38205444/
Patrick – the category of people that are
a) BC residents
b) have low income
c) own a primary residence
d) own a vacation property or other property not rented out long term in one of the spec tax areas
e) have only 1% equity in the vacation home;
is virtually non-existent. There are genuine issues with the new tax as proposed, but your line of argument is totally reaching.
If they tweak the areas that this applies to, so as to exclude primarily vacation areas such as the Gulf Islands and rural areas of the RDN and FVRD most of the fairness issues go away. Perhaps also an exemption or credit against the tax for a long history of paying BC tax even if your current income is low.
I like the term second-homeless.
Totoro, your posts in this thread have been excellent.
Thanks Sidekick Spliff. I have sent Leo an email.
Totoro, your tempered reason is wasted on people who see the terms “investment” and “speculation” as synonyms.
As ever, the luvvy left uses cant in place of policy or argument.
It is neither.
“Jerry, Jerry, Jerry, apparently, as Leo S. pointed out in his pie chart earlier, 22% of buyers purchased secondary homes. 11% acknowledged that it was an investment. There were other reasons but only 3.4% stated that the secondary home was a retirement purchase.”
Yep, and the other 89% said they were in it to lose a shit load of money and risk foreclosure and bankruptcy. Let’s call it the “Suck It Up” tax. If you can afford all the purchase costs using your primary residence as collateral then you’re in it for the money at the end of the day. Let’s quit with the poor guy hoarding real estate has it so tough BS.
@ GWAC:
In a village, it makes no difference to anyone’s convenience whether I have a one-acre lot, or I live in a row house occupying only a couple of thousand square feet. Everyone is still within walking distance of the pub, the church, and the village store.
When the village becomes a city, whether I occupy an acre of city center land, or share that space with 100 other occupants of an apartment building, makes a great difference to how far new dwellings are from the conveniences of town. Thus city center land values rise and occupiers of that land pay for their privileged position through higher property taxes.
Many residents near the city center may be happy to give up their rose garden or tennis court, in exchange for cash, thereby relieving the commuting problem of others. However, when cities rigidly maintain existing low density suburbs such as the Uplands of Oak Bay, or the low-rise buildings of Oak Bay Avenue, you have a sub-optimal use of resources.
To those who live on spacious lots downtown who say, but I don’t want rezoning that allows me to subdivide my property are, in effect, seeking to prevent others from doing so, since even if the zoning allows subdivision, no owner is forced to subdivide. They are merely forced to pay the higher taxes that come with the right to subdivide, which is fair, since on sale of the property, either at death or at the time of the owner’s chosing, the property will fetch a higher price because of its subdivisibility.
The implication seems clear. We need higher density zoning throughout the city core.
“My main point is that there is little difference between someone owning a modest home here and a vacation home in, say,parksville and someone owning a large luxury home here in terms of “investment””
You are taking up 2 family living spaces vs 1. That is my only argument. Seems that is the issue trying to be solved.
Canada has no jurisdiction to tax property in the US unless it provides income or capital gains which count as worldwide income for Canadians. California doesn’t have a spec tax and Palm Springs has been kept viable largely through Canadian vacation home owners. They love them.
My point was that why should a homeowner with a huge house in Victoria they call their primary residence who is not renting their home out while living somewhere else half the year, or all the year because you don’t actually have to live in the house to deem it a primary residence, and spending their money and taxes there get the benefit of the capital gains exemption and no spec tax while the vacation home owner here has to pay. If we made it less attractive to own expensive primary residences by applying a gains tax to them or spec tax unless the home is rented out while absent that would solve the complaints about luxury living and likely depress prices.
I’m not saying that I agree with this approach. I do not. I’m for freedom of purchasing power in home ownership subject to flipping rules and foreign ownership rules. I think you should be able to choose how you spend your money and that taxation should be applied strategically to encourage smaller homes/lots and other affordability measures. Perhaps through tax incentives rather than penalties. I would like to see a speculation tax to those who own multiple homes in BC for investment purposes but it needs to be better defined.
My main point is that there is little difference between someone owning a modest home here and a vacation home in, say,parksville and someone owning a large luxury home here in terms of “investment”. In fact, the big luxury home in Victoria has been a much better “investment” because of the capital gains tax exemption so people who really want to make money from appreciation are better off putting their eggs in the primary residence basket which has increased house prices as well.
Given this, it is the primary residence rules that should be examined to encourage density and tax fairness imo. Just because we call a home a primary residence doesn’t make it off limits from examination as to how someone is profiting from this vs. ex. second homes and how this affects affordability overall and density.
Maybe we tax the hell out of the 2 golf courses. A lot of homes would fit on them. That is complete waste of land in the core.
Shouldn’t it be CA government in US to tax these US vacation homes to help CA or Palm Springs?
Not for long, if we then have a 65 cent dollar.
With the tyro Justin at the helm, that seems a matter of when, not whether — we lost one cent today.
Foreign buyers may thus be well advised to wait and see where the loonie stands or falls after imposition of the US steel tariff, the aluminum tariff, the NAFTA negotiations debacle, not to mention the pipeline debate and the Prime Minister’s next overseas fancy dress parade.
Planners could probably anticipate future growth but wanted to preserve large house lots as part of a luxury development going forward so that owners could be assured that the neighbourhood they bought into would stay the same during their ownership period. Is that a luxury given that the land values in Uplands are depressed as a result and no further efficiencies in housing can be realized – or is it a right to a certain quality of life you pay for for so long as you can pay for it?
My view is that in Canada we’ve treated owned homes as a lifestyle choice, including vacation homes, that individuals are free to enjoy for so long as they can afford to do so. Where things became unhinged was through rapid appreciation causing more people to buy homes primarily as investments rather than for personal use and, at the same time, not enough government investment in affordable housing or the zoning to support it at the municipal level.
If we are going to crack down on second home owners and penalize them just for owning a vacation home that has been in the family for more than ex. ten years I don’t see how this really addresses the issues fairly.
Sure. This is why 3rd party independent testing is so great. I’m not aware of any database of independently tested heat pumps.
And this is why you’d get a good quality HRV. HRVs significantly lower the energy requirements (both heating and cooling) of a home and are now typically required in BC. Here is a list of all the small HRVs that are passivehouse certified, all independently tested with efficiencies up to ~ 93%: https://database.passivehouse.com/en/components/list/ventilation_small. You can also add shallow ground source brine loop and push that close to 100%.
The sanden units are posting the following COPs: 1.75 (-13F); 2 (-4 F); 3 (23 F); 4 (42 F); 5 (65 F). No idea on other units but there are a number of instrumented sanden units in the pacific northwest demonstrating some excellent performance: https://www.bpa.gov/EE/Technology/EE-emerging-technologies/Projects-Reports-Archives/Documents/Final%20Report%20TIP%20292%20(2).pdf
Pre-certified, I’m not done yet. And sure, Leo has my contact info.
http://shrinkthatfootprint.com/how-big-is-a-house
you can click it to sq ft half way down.
This also is the problem. (Canadian 2000sq ft/ brits 800)
I never said it was not. It is about how you use luxury vs. necessity to form social policy. Owning a house at all is not a necessity if we get down to it. Affordable housing is. We are not going to create more affordable housing through a tax on second homes in all cases or with this measure and the foreign buyers tax alone.
If we are attacking the making of appreciation on a home because it encourages people to own more homes which increases appreciation shouldn’t we also attack appreciation on bigger homes and lots used as primary residences? Lack of affordable small lots is an issue contributing to the housing issues.
Why do homeowners making a choice to have a huge house, live in their Palm Springs house half the year and not rent out their primary residence while continuing to get a capital gains exemption and no spec tax (even if they have a basement suite), not have to pay while someone with a vacation house gets taxed 2%?
I’d say the outcome of this tax is going to be that more people will buy vacation places in other areas or not at all and spend more on a primary residence unless the government starts to impose capital gains taxes on primary residence gains above a certain amount – which is what would really make a difference.
Heat topic. Wood inserts are amazing.
Broadmead and Uplands are examples of developments that would never happen again. A lot of land used for each house. Back than no one could anticipate.
10 years from now another 3 to 4 million people in this country. Where do they go?
QT,
Thanks for your inputs.
For our (baseboard heated) home, hydro bill for summer (June to Sept) is between $60 to $70 per month, winter (Nov to Mar) is between $210 to $310 per month. Thus the heating cost is between $150 to $250 per month in winter (shoulder months are a bit less).
One thing stopped us from going to multi-head ductless splits heat pump, besides the high estimation price and how long we will live here, is that it doesn’t have any air exchange function (like a HRV). We had high humidity (over 65%) in our shaded house in winter, used a big dehumidifier for a few years with small effect. But since we set all bathroom fans with auto timers and let them run 3 or 4 times a day and 2 hrs each time, that seems helped lots (humidity level is now always below 55%).
It seems to be funny that we all want our house as tight as possible to avoid heat/cool lose, but we also need to get fresh air into our house for health reason. So if there is one equipment that can do both heating and air exchange for ductless houses and with reasonable cost (machine and labour), that would be great.
totoro,
Totally agree! That is probably the only real solution for our limited land and housing market, as I said before on this blog.
More than half of our house 2600 sqft is in the basement (which wouldn’t be counted in ON and some other provinces), not very useful nor efficient at all. So we do plan to sell it and buy a 1000 sqft 2 bedrooms condo sometime down the road (and have a good realtor already).
Patriotz:
I dont disagree with you but I did cover that some investments are pure such as loans (GIC’s are a loan in essence). Some bonds are capable of capital increases and are traded as such. But in essence I dont believe we disagree.
“Perceived”? Owning a second private home in one of the most expensive markets in Canada isn’t a luxury? Give me a break.
My feeling is that the gov’t will end up excluding places like the Gulf Islands and Parksville where owners of bona fide vacation properties have legitimate complaints. There are no such legitimate complaints in the cities themselves.
We are experiencing an affordability and rental vacancy crisis. We are not experiencing a shortage of TVs, iphones, skis, surfboards or coffee. There’s been a lot of analogies flying and virtually none have been useful.
That’s not true at all. Some investments, such as bonds and GIC’s simply return the purchase price upon maturity. Other investments, such as rental cars, equipment, etc. depreciate and eventually end up worth nothing or next to it.
Barrister,
Yes, they are to some degree. But people buy them if they can afford/want/need them (I don’t have a cell phone myself as there is no need), instead of complain about paying sale tax on them.
But they have little to do with the housing issue, as much as the 2nd home ownership we talked about here, right?
So what. My guess is most people here have lives that are not composed only of necessities and have worked to make these choices happen in their lives and some of these choices do not contribute to the social good as much as they could.
Are we now taxing not based on income but on perceived level of luxury? If so, let’s do it across the board after weighing social benefits.
A car is only a necessity for those who cannot use public transit. Implement a 2% annual tax on car values above 10k on top of the insurance fees. That will fix ICBC’s issues. And it will discourage wear and tear on the roads and gas consumption. Surely the automobile is behind more social woes than vacation homes?
And what about big houses? Totally not a necessity. If we cut down lot sizes in the spec tax areas and made people all live in much smaller spaces or condos even we’d have loads of room for new development. Perhaps we should implement a 2% tax on floor space above 1000 square feet. Really people who have made a choice to buy and live in big houses are contributing to the housing crisis, as are municipalities for not permitting subdivision and condos to be built everywhere.
If someone owns a second home not as a speculative investment but as a life enhancing measure is this now a negative? We own a vacation home in an area not subject to the tax. The intent is to hold long-term for our children and grandchildren’s continued use and benefit and we have family and work in the area. It has been a great thing for us and means that we stay in BC for family vacations more often than not and spend our money in this community.
If it was in an area subject to the tax we’d need to rent it out long-term and not use it ourselves as we go there about once a month. Buying this house was a considered choice and meant we bought a much less expensive primary residence in Victoria. Had we a house in uplands instead we would be much better off financially long-term due to the whopping benefit of the capital gains tax exemption on primary residences. I much prefer the memories and lifestyle of travel and time together in our vacation place to more money.
I was on the ferry to a gulf island recently and was chatting with another fellow on the boat. He and his wife are retired and have had a second home on that gulf island for forty years. They built it and raised their children there when they were young. It is a short ferry ride away from their very modest primary residence and they stay in both and have gardens in both and absolutely love it. I wonder if they’ll have to sell one now as it is unlikely they have a pension income to support a 2% tax.
I say if you are going to attack speculation on houses then you should make sure you are really catching speculators. If you are trying to improve affordability you cannot just attack second home owners, you need to step in on municipal zoning issues and income tax collection measures.
GWAC:
Thank you for the clarification. The increasingly low dollar might well be an addition argument for restricting the purchase of Canadian real estate by non-Canadians.
For the sake of clarity, the Canadian doller is not yet at .75 it is sitting at .77 as of 10:30 today.
Freedom:
Owning a television is a luxury not a necessity as is owning an iphone or skis or a surfboard. Have a 500% per cent tax on coffee shops as well since they are not a necessity. Lets also start looking at flowers, wedding gowns, and computer games as well. The list is almost endless. Brilliant thought.
Barrister
Sorry I will point to posts in the future. The 75 cent Canadian dollars takes the sting out of a foreigner buying real-estate and paying increased tax. Not sure what you think I meant. Nothing to do with you or fellow Canadians.
Again, owning a vacation property is a luxury, not a necessity, regardless what.
Patrick,
Are you talking about real people? Who in their right mind would borrow 99% to buy 2nd home for vacation purpose only (not for investment), especially if they are poor (and wouldn’t get that high % loan anyways)?
As the spec tax is not out yet, so the coming details are not a fix but the real implementation. If the government wants to be in power longer than their current term, their have to listen to the voters, and use common senses.
QT:
Since you are obviously a professional can you come up with a solution for cooling the real estate market? Dont let people on this blog get to you since it is too nice a day for that.
AZ,
I’m sorry that I’m no professional, because I’ve only been working in the heating and cooling field for 14 years.
))) but I don’t know anyone who owns a second house can be called the poor.
If you “own” a house worth $500k, but owe $495k on it, you have $5K equity, and could easily be described as poor. Regardless of what we call you, the 2% tax is on all of the $500k, which would be $10K PER YEAR. This would wipe out your equity of $5K so you are now worth -$5K. Can I call you poor then, or do I need to wait a few years as the $10k tax is every year.
))) Also I am sure the coming details of the spec tax will have some exemption, for those BC residents who bought vacation properties long time ago, even if they are not the poor.
I haven’t seen any government statements to back that “some exemption” statement up. I think you are relying on common sense, that there is a NEED for some exemption as you describe. Which is exactly my point, except I am not sure as you that the government will fix it. And I don’t let them off the hook so easy for announcing this in the budget, effective for this year – 2018, and then just offering hope that they may fix it.
I don’t think this market is dead quite yet……wrote a few offers for buyers over the weekend and getting these types of texts when I assess the situation 15 minutes prior to offer deadline.
“Hi Marko. I have ten offers in hand, and waiting for a couple more. xxxxx”
GWAC:
I have no problem with taxing foreigners and if you read my comments I have strongly advocated taxing foreign money out of real estate. BUT, fellow Canadians are NOT foreigners. I am disappointed in you GWAC since your comment is intentionally misleading. I expected more from you.
AZ,
I’m sorry if I confused you and the reader here. What I mean by 50% efficiency at 2 COP should have been 50% of energy usage compare to baseboard.
And, please point out what information/s that I mentioned is incorrect? Perhaps you have dispute with ground temperature, but around the West Coast 7C is the norm.
LeoS:
First perhaps we can agree that every investment can be viewed as speculative in some degree in that the buyers hopes for an increase in the value of the asset. That holds true of stocks, bonds, real estate or precious metals. (I have a friend who actually owns an AMC Grelim and he is still hoping it becomes a collectible worth real money). Clearly one can argue that there is an element of speculation in any investment including buying a home for ones self and family.
What we are looking at to some degree is a spectrum. By necessity that is going to produce a band of grey areas. On one end of the spectrum there are investments that are clearly and exclusively speculative such as buying gold bars. They generate no income and only fall into the investment category if the price goes up. On the other side of the spectrum is holding a loan where the economic profit comes almost exclusively from the interest it produces.
Real estate is a more complicated issue since it can fall along several points on the spectrum in terms of an investment. Just to make it a bit more complicated real estate has an element of also being a consumable product since there is both personal and economic value to residing in a home.
In my mind, and not being smart enough to be an economist, I set the threshold for speculation in real estate at buying a property whose rental does not produce a net return greater than term deposits. Buying a condo or a house where one is running a negative cash flow from day one is clearly speculative. On the other hand I have a couple of neighbours that bought rental houses more than ten years ago that have been producing a steady retirement income for them.
Put more simply, in my opinion, a speculative investment is one that relies exclusively for its value on the market price of the commodity increasing.
Patrick,
From oxforddictionaries.com: Poor, adj
“lacking sufficient money to live at a standard considered comfortable or normal in a society. e.g. people who were too poor to afford a telephone”
I think a home owner can be low in income, but I don’t know anyone who owns a second house can be called the poor.
Also I am sure the coming details of the spec tax will have some exemption, for those BC residents who bought vacation properties long time ago, even if they are not the poor.
Toronto condo owner discovers unit listed on Airbnb behind her back — with more than 70 reviews
When Sanda Jovasevic agreed to lease her downtown Toronto condo to a tenant in May 2016, she hoped it would be a wise, long-term investment for her retirement.
But after a series of strange incidents the following year, including the unit’s front door being left wide open, Jovasevic and her husband learned something was going on behind their back: Someone was repeatedly renting out the unit on Airbnb.
http://www.cbc.ca/news/canada/toronto/condo-rentals-airbnb-investigation-1.4560076
Who knew there were so many HVAC aficionados on the blog?
Barrister just takes the sting out of the taxes for foreigners. 🙂
Except no-one knows exactly how it will be implemented yet. I support a speculation tax, but not one that means those making the most money pay the least tax as Patrick has indicated. That is silly. There needs to be another way to capture those making their incomes outside of Canada than this. This captures someone who inherited the family vacation place and has no money to pay the tax – and that would be most of the middle class who could not afford an extra 10k. And as far as renting out the place, many vacation or more rural areas do not have a viable winter rental market and this is inconsistent with regular personal use, or summer use for that matter.
I wouldn’t jump to conclusions here. They haven’t announced how the tax credit will work. It has been pointed out many times that it could be you get several times the tax credit for each dollar you pay in BC tax.
Define speculation properties then.
Monday:
Sales: 72
New Listings: 147
Inventory: 1564
Only really 2 selling days in there so no point looking into those numbers very deeply.
16% selling over ask, which is less than it has been.
Well children, keep an eye on the Canadian dollar. I would suggest that if it hits .75 it might be time to worry a bit.
Dave:
Obviously your argument is politically motivated rather than reality based. The vast majority of secondary properties in BC where bought before the price run up in 2015. If the act excluded properties purchased prior to 2015 then there might be some argument made that that a number of those where bought with speculation in mind. Investment property is not the same as speculation properties.
I am getting weary of apparently intelligent people making disingenuous and willfully misleading arguments on here. Dave’s argument, upon examination, seems to be taken from the Donald Trump school of reality.
Since the spec tax on cottages will be completely exempt for rich-enough BC people who pay lots of BC tax, it should be dubbed a “BC poor tax”.
Like a Chance card in Monopoly that says….
“BC taxes you pay from your middle class BC income isn’t high enough to offset your cottage tax…..Pay BC Poor Tax… 2% of cottage value”
@QT
50% efficiency is a COP of 0.5.
A lot of the information you present is incorrect.
I’d suggest anyone looking at getting advice go to a HVAC forum or get professional advice.
The spec tax is crazy….
If I live and work in Victoria and own a Victoria home and a Salt Spring Cottage worth 500K….
I pay all taxes in BC and reside in BC full time.
Since the cottage is a second home, and not rented out, I am now liable for the 2% speculator (aka cottage) tax which would be $10k per year.
If I’m a teacher making 70k a year, according to tax tables I pay $3k in BC provincial tax. So that partially offsets the spec tax, but I still pay $10k-3k=$7k
If I’m a businessman making $200k per year, I pay $21k in BC taxes, so nothing to pay in spec tax because I am paying more than $10k.
So this tax means nothing to rich BC residents, just the poor and middle class that own a second house.
How could the NDP have thought this through? Do they intend to punish “poor” BC residents who hadn’t paid enough provincial tax in real dollar terms, forgetting completely about the progressive nature of our tax system that the NDP have fought for all these years?
Jerry: “Not one per cent of the money extracted will be from an individual who had speculation on his mind when they bought the subject property.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Jerry, Jerry, Jerry, apparently, as Leo S. pointed out in his pie chart earlier, 22% of buyers purchased secondary homes. 11% acknowledged that it was an investment. There were other reasons but only 3.4% stated that the secondary home was a retirement purchase.
Do you seriously believe that all of these buyers of second/third/fourth homes were not getting caught up in the never ending rising Victoria housing market. I don’t believe that you are that naive.
Sure, you can get full support for a speculation tax. Too bad we don’t have one.
Not one per cent of the money extracted will be from an individual who had speculation on his mind when they bought the subject property. This is a craven and cynical populist move to extract capital from people who appear to have “too much”.
Alistair Campbell would like to offer his oily congrats to whomever came up with the name for this outrage.
And now I will offer my opinion. Why are we seeing ill-founded arguments here against the spec tax? I think some people are simply opposed to prices going down. But not that many:
https://biv.com/article/2018/03/most-bc-residents-support-foreign-buyer-tax-increase-and-new-speculation-tax-poll
Properties rented out long term are exempt from the speculation tax regardless of the domicile of the owner.
https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
PS. Manufactures rate their ground source heat pumps at 3 to 3.5 COPs, but in realistic usage they are also around 50% efficiency (or 2 COP). Hence, many new construction industrial, commercial, schools, hospitals, etc… still op for gas boilers and/or furnaces.
Sidekick Spliff
Not all COP are rated the same between manufactures (similar to frequency rating of amps and speakers).
Most manufactures however rated COP at 65F or 18.3C (obscure manufactures could be rating their products at 70F or higher), hence at this temperature your baseboard is not going to run much if at all. And, air source heat pumps COP efficiency quickly drop once it get down around 7C, then you might as well turn off the air source heat pump to reduce wear and tear (specially from defrost mode cycling), and use baseboard once the temperature drop down to around -1C or -2C (some inefficient unit don’t do well below 1C or 2C). And, to add insult to injury is that our climate humidity is high so at 1C to 2C or below there is a good chance that the outside unit may ice up and will need to go into defrost mode which use electricity to keep the unit ice free.
My past experience lead me to believe that most manufactures tend to over rate their heat pumps (for realistic humidity level), specially air source, and their rating quickly drop well below 2 COPs below -1C to -2C. While water source heat pumps happily humming away at around 3 to 3.5 COPs at 7C (most ground temperature is around 7C six feet below frost line year round). In layman term, air source heat pumps are around 50% efficient in our climate, because outside temperature and humidity level is not at an ideal constant. And, as I mentioned in the earlier post that HSPF rating is what you really want to look at for our climate.
HRV, is great if you want fresh air, low dust, and no pollen in your house. However, at the standard 5-6 air exchange per day for the entire house the total energy lost will be much higher than its rating. Again, most manufactures rates HRV at 70% or above (and the small prints indicated that it rated at least to that percent efficiency), but in real world usage they are at best 40-50% efficiency at 1 air exchange and in most condition the efficiency is 20-25% due to unideal temperature and humidity level.
Sidekick Spliff, great comments.
Did you get PH certification? Hmmm, do you feel like chatting somewhere outside of this forum?
Proportional representation refers to a number of different systems:
Good to know I always thought it referred to list proportional representation.
This is true. You need to look at the entire system and determine the weak points. It may not be the insulation. Most likely, it’s the windows/doors.
No thanks. It makes sense to build a ‘pretty-good-house’. It’s a simple prescriptive approach which lets you build something you’d actually want to live in and still address those concerns.
Well this is what an HRV is for, but sure, it could help circulate some air.
I don’t understand this. Even crappy heat pumps have a COP of ~3, making them at least 3x more efficient than baseboards. Some of them are approaching 5, and some of the air-to-water units are coming on the market (Sanden gen 3) allowing you to replace your hot water tank and heat your house. Nice thing about the Sanden units is that they’re super simple to install (no refrigerant lines) and use CO2 instead of the high GHG refrigerants used in most. They run about 5K.
PG35 is more of a durability rating – it doesn’t have anything to do with thermal performance. What is the posted whole window U-value for those ply-gems?
Very true – too (air) leaky. We want those nice tilt and turn European windows you showed in one of your videos.
Maybe I’m not being clear. I’m not advocating for super expensive fancy wood windows (which probably still aren’t great thermally). You don’t have to spend a mint to buy thermally decent windows. My window/door package for a 2800+ sq. ft. PH was 38K delivered, including an unnecessary fancy front door.
Why would this apply to windows? You have a seal go bad you just buy a new glass unit. They’re made to fit and easy to replace. Same goes for insulation…the one thing in your house that will never go bad or need servicing.
This is true – MURBs are ‘technically’ much more efficient for this exact reason, and many ‘green stamps’ promote this. Reality is a little different. Tons of literature out there about how bad the new glass and concrete towers really are. Go find some thermal photos of them.
Sure, consumption is generally not environmentally great, but I don’t see how that applies here. Can a passivehouse pay itself off in 7 years? No chance. Neither can solar, a heat pump, or whatever other upgrade you throw in there. Can a suite pay itself off in 7 years (assuming zero appreciation)? That might be a close one. Insulation actually can because it’s so cheap.
Thing is, houses being build today should last 50+ years. If you do the math, you’ll find that the dollar savings and the environmental savings are huge. Not to mention the rather large embedded energy is amortized over a much longer period if you’re building a house with a longer life expectancy. And there are a bunch of other benefits like air quality etc. This is why policy makers are pushing to adopt these standards. If you can go from the short-term, money only perspective to the 10,000 ft view, it makes a ton of sense. I don’t care if you fly around the world 10 times or spend all day power sliding doing Jeremy Clarkson impressions, it’s a step in the right direction.
Which is great? Build a pretty-good-house and now you’ll get that great comfort in every corner of your entire house.
Marko – I get what you’re saying, and while I may come across as being a weirdo engineer, I would encourage you to read a little more into what these types of programs are actually promoting. They’re created by the same types of engineers and pioneers which created things like the Tesla, or the re-usable rocket. Those guys took the car/rocket and figured out a way to make them significantly better. We’re actually pretty far along that path for the building structure.
Proportional representation refers to a number of different systems: https://engage.gov.bc.ca/howwevote/voting-systems/
Countries like Germany use the mixed member proportional representation. Yes leads to lots of coalitions, but I don’t see this as a bad thing. Forces compromise.
In theory….in reality no one would waste their time with rural issues; you need some local ridings.
The current system sucks but I am in favor of a 50/50 system. I would support proportional over what we have currently but not my ideal.
You also risk stability with a 100% proportional system due to coalitions.
Each vote has the same say.
Very likely. And when people are confused they stick with what they know, which is no change. Big risk of that happening especially if they ask people to choose between more than one type of proportional representation.
Ha! Leo S, while I kind of agree, don’t underestimate how much a new government can undo from the previous one. Just look south.
Marko, I don’t think any of the systems proposed will do that. In fact there is a greater chance that rural BC areas will have meaningful representation without needing to wait for a right-leaning majority supported by Vancouver (Not that everyone in rural BC is right-leaning, but that tends to be how the bipolar party system seems to fall).
I think the biggest risk is that the electoral reform people will just confuse the hell out of everyone. The current survey is evidence of that. They should just watch CPG Grey instead:
http://www.cgpgrey.com/politics-in-the-animal-kingdom/
QT, well a higher COP may be a higher purchase cost, but it gives a lower running cost. As I suspect you know, a baseboard has a COP of 1 but a good mini-spit has a COP of 3, meaning that it puts out 3 times as much heat as a baseboard for the same electric cost (or 1/3 the cost for the same heat).
As you say, geothermal makes more sense for parts of the country that actually get cold (like where I grew up).
Now pass the proportional representation referendum and after that I won’t care if they are voted out. Those two will have long term positive effects.
So Vancouver controls the government and if you live in Smithers you have no say?
Reduce the ridings to 44 and assign remaining 43 via proportionality. 50/50 system.
Quite possibly. But the NDP have already done 50% of the work I wanted them to do with getting the big money out of politics (at least through the obvious channels). Now pass the proportional representation referendum and after that I won’t care if they are voted out. Those two will have long term positive effects.
That is what I am finding so far. So far the response has been lukewarm at best. Can you email me the guy you used? leo.spalteholz@gmail.com
Also what unit did you buy? Considering either the Kaussmann or Senville. They both use Toshiba compressors but seems like Senville is a bit hit or miss on quality of the indoor unit.
Super interesting that you were able to get the rebate. I was not counting on it, but sure would be nice!
once and future,
Geothermal maintenance is higher than air source heat pumps, but ROI is relatively short for industrial and farming usage in the prairie where air source is not practical.
Furnace and heat pumps rated in coefficient of performance (COP), and the higher the COP the higher the cost. The highest COP units are often cost as much as twice the cost of a unit that rated 10-15% lower COP.
You are right that air source is practical and most efficient for our climate, specially ductless splits, and IMHO it make sense to look at units that have higher heating seasonal performance factor (HSPF) over cooling seasonal energy efficiency ratio (SEER/EER).
“The principle is, if you have a place in British Columbia and you are benefiting from the services in British Columbia, you should pay your taxes in British Columbia,”
I thought the whole purpose of the “Speculation Tax” was to penalize any owners that left their properties VACANT and to encourage them to make more rental space by renting them out which is fine, fair etc. But now it appears more than that, she wants those owners to pay “BC” taxes and any Speculation Tax will be offset by BC taxes paid.
So I rent my Victoria property out and have for the last 10 years, but as a resident of Alberta how am I going to offset any Speculation Tax when I don’t pay so called BC taxes as I file and declare my rents in Alberta? The only clear solution for me is to start filing in BC, occupy my home in BC for the minimum requirement to qualify as principal residence and rent my home out in Alberta. The total sum of this, is that will mean one LESS rental unit that is desperately needed in this zero vacancy rate environment.
She can’t have it both ways. My property assessed at 1.145M and there is no way I am going to pay $23,000 Speculation Tax every year and more as the assessment increases when my total rent is $30,000 year and on top of that I pay $6,400 municipal taxes, which is a $1,000 more than if I lived in it plus close to another $1,000 less as I will be over 65 next year.
A whole lot of other people will do likewise because this tax amount is so onerous it will force people to rearrange their affairs to avoid paying any tax at all. This tax as proposed is going to produce seriously unintended detrimental consequences for this government if they don’t rethink the terms.
On the heat pump topic, I managed to do well with a self-installed ductless model.
Purchased an efficient 1 ton unit from an online Canadian importer for about $1300. Mounted and wired it up under a home owner electrical permit. Had difficulty finding a HVAC technician to do the plumbing part – all the companies I called wouldn’t touch something that they didn’t sell – but eventually found a tech with a side business.
It turns out Hydro will give a $800 rebate even if it is self-installed. They audited me “randomly” but it passed no problem and as a result my net cost was about $1k for a unit that saves me $500 a year vs all baseboards (plus we get cooling for those rare evenings that require it).
The downside is taking on some risk: cost to send the thing back would be huge if it didn’t work, questionable warranty, etc.. But with a payback period of 2 years it seemed a risk worth taking. Plus like Leo says some of us get our kicks from finding efficiency and putting things together.
Even if you don’t DIY and buy the unit and hire out all the work it seems you would still be far ahead vs paying $7k or more to a full service contractor. They must all be very busy to be charging that kind of markup.
strangertimes, thanks for the link. That article highlights a lot of the concerns I have with the “spec” tax. There is too much uncertainty and it really doesn’t seem aimed at speculators. Calling it an “empty” house tax would at least be closer to honest.
I have some level of distrust for every political party, but have had some hopes for the recent crop of BC NDP. However, this level of uncertainty is really destructive. Even if it is as punitive as it looks, tell us the details now so people can start planning ahead of time. Springing it at the last minute is just stupid.
QT, thanks for your thoughts. My understanding is that geothermal has turned out not quite as efficient as initially hoped, often because of pumping costs (down deep wells or around horizontal fields). While I have no personal experience, I have been told that the newer air-source heat pumps have gotten more efficient and better at dealing with cold weather. One person told me that Victoria is in the goldilocks zone for air-source heat pumps, with our mild climate.
Ductless mini-splits just seem like such a smart solution but NatGas is still competitive for heating, if you can get it (we can’t).
Triple A Rated, good post. I am a bit of an infrastructure nerd (not professional, though). However, we still have to balance all the trade-offs when it come to making major construction decisions. Increasing solar is a great way to decrease the load on the island electrical system.
I hadn’t heard about the NatGas pipeline that comes over to Courtenay until recently.
https://www.fortisbc.com/NaturalGas/Business/TransportationServiceOption/Documents/WINS_FortisBC_Pipeline_System_Map_2593.pdf
Do you know how much that has changed the supply on the island?
It is going to be 2001 all over again for the NDP in 3 years if they are going to stick with the punitive tax grab.
As for heating and cooling, the net gain of energy saving diminish as R-value increase, hence it is may not be economical to add more insulation.
If environment and energy is a concern then, it make more sense to have a small house with little or no windows and low ceiling. The simplest and cheapest heat energy saving is to use a ceiling fan to equalize household temperature, next is to add attic insulation and make sure that it is well vented (heat rise so most of the heat lost is through the ceiling if windows and doors are up to standard), slab heat lost is the lowest compare to walls and ceiling however it will help with energy saving over the life span of the house. Solar/wind have draw back as it requires maintenance, produce little to no energy during cloudy or windless days, and they don’t last forever.
Leo is lucky to have someone to hookup his heat pump and likely with no warranty of service from the installer/helper, and he didn’t need to upgrade the house electrical service for the additional power draw.
The rule of thumb for heating and cooling is at least 1 ton (12,000 BTU) of heating/cooling per 1000 sqf (with out doing air test, normally 1 ton is required per 750 sqf for new construction.) That said most heat pumps come with warranty that can be up to 12 years and a good installer that take care of the install can make a cheap unit last up to 20+ years. There are many factors in price of heat pumps, however some of the factors could be quality of parts, warranty, ease of parts service and replacement, and parts availability. There are several options to heat pumps such as geothermal, air to air such as ductless and central heat pumps (they are all roughly 50% of energy efficiency +/-5% in Victoria climate compare to electric baseboard. Gas furnace is another good option that can last many decades over that of heat pumps and cost roughly the same amount of money to run as heat pumps due to low natural gas cost in the last couple of decades. And, all of the above options need maintenance unless one is handy.
And, the best way to find out how much it cost to heat one house is to compare summer electrical bills vs winter bills.
That is one way to look at it.
Of course the Albertan pays federal taxes, some of which go to federal roads and parks within BC, and municipal property taxes which support municipal roads and services, with no primary residence discount. Plus they are likely using far fewer services than a FT resident. And there is a mutual benefit on payments to Alberta taxes for BC residents who move to Alberta, which happens frequently, and vice versa.
I’d agree that someone paying taxes abroad instead of Canada should definitely pay more.
Carol James comments on the speculation tax
“The principle is, if you have a place in British Columbia and you are benefiting from the services in British Columbia, you should pay your taxes in British Columbia,” she said.
“I certainly see it more as a fairness tax,” she said. “We think it is fair for people to pay a little bit more for the services they benefit from, whether we are talking about roads or parks or the community itself.”
https://www.theglobeandmail.com/news/british-columbia/part-time-bc-residents-fear-they-may-feel-full-sting-of-new-speculation-tax/article38205444/
“2645 Bowker Ave.
Went for $780,000 in 2014 and looks totally livable back then as well.”
So, my 2 cents: I looked at the photo and thought, “Holy crap, $1.42M for that old house?” It is on a large lot near Beach Drive, and that’s clearly where the value is (BC land assessment $1.115M). The point is, just because this goes for less than asking, doesn’t mean the sky is falling. The house nearly doubled in price in 4 years. How much higher do you expect it to go? Those kind of increases can’t go on forever. The first flipper made money; the ride was over for the second one.
I still don’t see that this means house prices in general will crash to 2014 levels in the next year. Even a pullback to modest increases of a few percent a year would be a huge change from the crazy ride that happened over the past few years. This does means that the opportunities for flippers are over, but it doesn’t mean average homeowners will be underwater.
The indoor unit is as simple as hanging a TV. I’m talking about a single head version though.
The part that requires a professional is connecting the refrigerant lines and properly vacuuming them and testing for leaks. Also hooking up the electrical but I’m going with a 110v version to make this easier
FYI.. 50% of the islands power comes from the mainland from next to the Tsawassenn Ferry Causeway where it meets the shore. 230Kv cables pass under the Salish Sea, cross over Galiano, under Trincomali and over Saltspring. The other 50% is up from Powell River to Parksville. Those combined supply 95% of VI’s power needs.
Gas/Diesel/Heating Oil? By Barge.
On average VI receives 25 Million Liters of fuel per day of obviously separate grades. In the summer this more than doubles.
Food/Consumer goods? By Truck and Trailer delivered by Seaspan Ferries during the night at Duke Point Nanaimo and Swartz Bay. These trailers deliver 95% of the goods with B.C. Ferries contributes 5%.
Face it, Vancouver Island is a net importer with a huge trade imbalance and we should welcome any changes to improve the system while realize as an Island how dependant we are on our infrastructure network that’s outside of most people’s awareness or understanding.
2645 Bowker Ave.
Went for $780,000 in 2014 and looks totally livable back then as well.
“I did look into this somewhat on the inventory front https://househuntvictoria.ca/2018/01/04/the-journey-back-to-normal/”
I did read that…
Can you run a new graph with
-average inventory (chart data from 2018/01/04 post
-average house price increase/decrease in the core
Bonus points if you can add another axis for interest rates.
This might appear straightforward sometimes they don’t match or a lag is apparent. Or everyone reads the blog in Victoria. So maybe another with a visitor count to this Blog. Kidding.
I have Fujitsu in my personal home but if you want a really cheap ductless system this is the way to go -> http://www.airlux.ca/
They have stock in Vancouver, we’ve used it on a few cheaper spec homes without issues. As Leo pointed out, you can do most of the work yourself with a bit of help at the end from a electrician/HVAC or refrigeration tech.
I don’t know if this is supposed to be black humour but in reality Horgan’s father died when he was a toddler.
Ya I can see why too. John Horgan’s father is a paid Site C lobbyist.
For some weird people out there (aka mostly engineers), efficiency is it’s own reward. It’s not really about the money.
Fair enough…once I had a Tesla owner show me his log book from a trip down to Florida and back documenting how much energy he spent between superchargers in “range mode,” etc.. My first thought was why on earth would anyone do this…..the supercharger network is free! Ludicrous it all the way down and back 🙂
Does anyone know what 1737 Algoa, Victoria, sold for? Thank you.
Sign of things to come to the west coast/Oak Bay. What’s $700 these days anyhow, chump change for the property kings. Just have to eat Kraft Dinner/ McRonny’s an extra couple of weeks a month or do that side hustle thingy til you drop. 😉
“You may find this image useful for your blog,” David said, in sending me the shot above. “I saw these signs sprouting on Bantry Ave in Richmond Hill this morning… the end must be near in the 905. An $80k loan, interest only payments at 10.32%, ‘rates subject to change’…”
Well, as stated here last week, with 25%-30% declines in housing values across York Region these days, including the smoky epicentre of R-Hill, we’ll soon be needing teams of Médecins Sans Frontières to treat an epidemic of heart palpitations. And the war has just begun.”
http://www.greaterfool.ca/2018/03/04/sunk/
You are very handy Leo. But not sure it is that easy for ductless heat pump that needs to install indoor wall units as well.
Barrister, 2645 Bowker looks like a flip. Purchased June 2017 for 1.278M. Extensive renovation. Then as you say sold recently for 1.420M. Considering the reno was probably close to 100K? ( I really have no idea but it sure looks like a nice reno on the kitchen and bathrooms at the least), along with the fees and taxes associated with buying and selling, this one was most likely a pretty good loss. Maybe the owners have multiple properties on the go and are starting to freak out and just want their money back.
The monthly mortgage payment for my SFH in Saanich that I bought 1 year ago (with less than 20% down) is less than $3000.
“Strange sale in Oak Bay:
2645 Bowker Ave.”
It’s a flipper which last sold in the $1.2’s from my guesstimation. Obviously saw they better take the first offer before the shit hits the fan. Or before they find bones in the back yard. 😉
12000BTU heat pump on Amazon for $850. Runs on 110V, do the install myself and get an HVAC technician to vacuum the lines and do the leak check in the end. Maybe $1300-$1500 total. Payback at that point should only be a couple years.
For some weird people out there (aka mostly engineers), efficiency is it’s own reward. It’s not really about the money.
Strange sale in Oak Bay:
2645 Bowker Ave.
Asking: 1,748.000
Sold : 1,420,000
You have to wonder how the negotiation on that one went.
And shit, while you’re at it throw some half-decent windows in.
Entry level windows are half decent as they are test to death these days. Just intalled some super cheap Ply Gem windows on a project and they are PG35.
The Yaris and the Fit are cheap cars and guaranteed they will outlast any BMW or Tesla for that matter.
When I go into 20 year old homes the houses with high-end windows typically have more issues as the higher end windows are simply more complicated. Slider vs awning/casement mechanisms.
Let’s face it, you aren’t going to load up a house with half decent windows and have a bunch of picture and slider windows.
Applies to everything else. Cheap 20 year old house? Stove breaks down you wheel it out and they wheel in a new one from Sears. Expensive 20 year old house you have a built in double oven with odd dimensions requiring five people to pull it out. Questionable if you can find direct replacement or not.
That all being said if I was building in Fairfield or Oak Bay I would go expensive on the windows but not because of energy savings or the environment. When the lot price is 800k to $1.1 million dropping some cash on finishing isn’t huge.
Sorry for the rant
My fundamental issue with the home your are describing is that it is over $1.3 million minimum in the core (current lot prices + construction cost). When spending that much who cares if your yearly hydro is $1,200 or $2,000. If that is such a huge factor make the house a tad bigger with a suite and rent the suite from time to time for $1,500/month.
As far as emmissions; buy a condo if that is such a concern. You just went from losing heat in 6 directions to 1 direction (unless you have a corner unit or penthouse).
I understand spending money on things you like such as high-end
windows or simply having a super efficient home because that is your thing, but trying to justify it via cost savings/emissions…..don’t know about that. I have heated floors in my kitchen and all the bathrooms but it is for comfort versus economy.
It’s like trying to justify my Tesla because I save $5,000-$6,000 in gas per year and it doesn’t emit. Completely ignoring how much I paid for the car and the fact I took a bunch of vacations last year that required air travel. The individual with a Honda Fit who can’t afford to go Dubai did a lot more for the environment than I did.
Over the lifetime of the structure, a pretty-good-house emits far less emissions that a code-standard house (even one using highly intensive materials). There is quite a good selection of low intensity products out there which make the math even more lopsided.
I mean, really people. How hard is it to put an extra 3 or 4″ inches of Roxul in the walls of your house when you’re building it? You already have to install an HRV, so how about a putting a better one in? And shit, while you’re at it throw some half-decent windows in. Still gotta install them right? Oh interesting…we don’t need that in-floor heating system anymore, and it looks like we can downsize to one minisplit for the whole place. Hey, now we only need 10 solar panels instead of 20 so they’ll all fit on our roof.
I don’t know honey, these upgrades are going to cost us an extra 15K. Hm, looks like it’ll drop our heating bill by 50% so I guess we’ll save $75/month. Oh hey – that’s more than it’ll cost us to borrow that against our mortgage, so I guess it’s actually costing us nothing month-to-month.
Meh, thorium reactors will be online in a few years so why bother…
https://vimeo.com/32007211
Sorry for the rant.
Our house is about 2600 sqft, on hydro only and all heated by baseboard (newer house, no duct). Only about 1600 sqft of them are fully used, and we set the rest areas (laundry/guest/movie) at around 16C-17C normally.
For this winter and the last one, hydro is billed monthly, between $210 to $310 per month (Nov to Mar).
They used to bill hydro bi-monthly. For the record, our annual hydro and water cost over the years (with no major change) are:
2010: $1696
2011: $1882
2012: $2127
2013: $2070
2014: $2076
2015: $2083
2016: $2280
2017: $2989 (new hydro smart meter and start of monthly billing)
BTW, we did have four companies here last summer to give us quotes for adding ductless heat pumps. The estimation were between $7500 to over $9000, no including electrician fee, and only for the 1600 sqft used areas.
Very similar to our house, a bit smaller at about 2200sqft. $420 on the Dec/Jan bill. The big consumers there are the baseboards in the basement and the electric car. Rest of the house has a heat pump but doesn’t properly heat the downstairs. Will probably be putting in a separate mini-split pump in the basement this year that should help.
I did look into this somewhat on the inventory front https://househuntvictoria.ca/2018/01/04/the-journey-back-to-normal/
I’m not sure we have a pattern for corrections though. We’ve had 2 long term plateaus, one severe medium length correction (81), and one sharp but very brief one (2008). Then certainly some more in the past that I don’t have sufficient data to examine.
Must. not. reply.
Wonder how long it will take for hydro prices to double to pay for Site C. Suddenly that extra insulation in the walls and under the slab look like a good idea (purely from a $ perspective). Too late now I guess…
If I was worried about hydro doubling and that impacting my life than I would just live in a condo. I looked at one of my condos downtown the other day and the consumption for the last 12 months has been $21.32/month and it has baseboard heat.
It is kind of like buying a V8 car and worrying about gas prices imo.
Yes.
A pretty good house would be a much better standard to be put into law than passive. I am a big fan of passive and did my best to get there but it should not be forced. Right now our Canadian average is 153 kW h/m2. Do we really NEED to get that to 15 kWh/m2 by 2032? Will that really be better for the environment? That’s a lot more glass, foam and other building materials like solar arrays etc. It is also added design, engineering and other impacts like more tree removal. So we are further killing affordable housing and not even really having a net benefit the environment if we look at it holistically?
By the testing and modelling I will be at 36.7 kW h/m2. That is 1/4 of the average household energy consumption. It isn’t sexy and branded but that is a real drop using the principles of passive house without being forced to meet them.
energy use: http://www.statcan.gc.ca/pub/11-526-s/11-526-s2013002-eng.pdf
Hydro bills….
Only my second winter here so I have no experience. What would the spectrum be for hydro bills for SFHs? Ours uses a heat pump and is two-stories on a pad, 2400 sq ft. The bill was $333 for the two months beginning December 22. Is that good, bad or indifferent?
Interestingly, the blurb on the bill says this is 27% less consumption than the same period last year which would reflect the relative intensities of the two winters as we haven’t touched the thermostat.
Once, you make no sense. How did they pay off $500K that fast unless they make great money? How much did they pay on condo per month? I see a pile of rentals from Langford to Saanich for $2000 to $3000 that take dogs. Nice places too. Kids are a bit hard to ban isn’t it? I think it’s called discrimination.
If you don’t want to move then don’t move and ride it back down. If you want to profit and cash out then cash out and rent or move somewhere cheaper. Not that hard a concept.
This is probably my favourite post in a long time.
Well laid out, informative, and interesting.
Thoughts for a future blog post…
If it seems apparent that sales are declining seasonally, and MOI is increasing, then it’s clear that supply and demand will take over. But how about a positive approach, when do we enter into perfect Buyers conditions? Is it relatable to the stock market (ie. Recessions lasting 12-18months?). How long will the current slide take to bottom out? Yes, I realize they’re all different with separate conditions but I think it’s worth exploring in more detail.
More listings means more choices for anyone considering upgrading. New buyers into the market, those in a townhouse looking st moving into a SFH..etc, etc.
Love the graphs. Keep up the excellent work.
Right I was thinking more from an emissions standpoint, not cost.
As for hydro prices, just put solar up. Almost makes sense now, if hydro doubles it’ll be a no brainer.
So Hawk, educate me a bit here.
We have Bob and Janet, with one kid and two dogs. They scraped together their savings and bought a condo for 350k that has now gone up to 500k (to live in, not as speculation). They choose to sell and put that 500k into a conservative bond fund at 3% to pay their rent (bonds won’t be so great in your crash). They get 1250/month from their bond fund. Can you find them a nice two or three bed rental that takes kids and dogs at that price?
What do they have with a rental that they don’t have now? Unless they are itching to move to another part of the country, why wouldn’t they wait out a slump?
I was slightly wrong on this. It is roughly a third of the generation on the island, but only about 10% of the use, since a bunch comes over by undersea cable.
https://www.bchydro.com/energy-in-bc/operations/dam-safety/seismic-hazards/jordan-river-options.html
Hopefully the cables wouldn’t be harmed by a seismic event.
Turn off the lights. It’s over. Sell now while the sheep are still being herded to phony RE conferences or regret it the rest of your life.
In Toronto’s Housing Market, The Party Really Is Over, Latest Data Shows
Sales of low-rise homes were down 45 per cent in the second half of February.
Actually, the Jordan River dam is probably the single biggest argument for having solar and a good battery backup on the island (and a generator).
https://www.google.ca/maps/place/Jordan+River+Diversion+dam/@48.5067935,-123.9748122
Especially since it is right over the Leech River fault…
You are right that Hydro rates will go up. It would have been better to never start Site C, but I can see why they chose not to kill it. Along with that, we have a lot of old dams to keep healthy, and that costs money.
For example, according to wiki, the Jordan River dam was started in 1911 and (after some upgrades up to the 1970s) still produces roughly a third of the energy we use on the island.
“A 2014 BC Hydro study indicated Jordan River had a high risk of seismic dam failure. BC Hydro has offered to purchase the nine residences in the evacuation zone.”
https://en.wikipedia.org/wiki/Jordan_River_Dam
I would be interested to hear if anyone has done the financial forecasting to say what hydro rates need to be to catch up on all of that. I haven’t heard anything as drastic as doubling, but slab insulation would certainly hedge your bets against that future.
Then again, if you can use solar to make your own electricity at 9 cents, it doesn’t matter so much.
Introvert
When did it stop being 1981?
Must. not. reply.
Wonder how long it will take for hydro prices to double to pay for Site C. Suddenly that extra insulation in the walls and under the slab look like a good idea (purely from a $ perspective). Too late now I guess…
I stand corrected. It’s a 35 year mortgage(still AKA a loser mortgage and as good as a 40) with another 25 to go still. Let us know when it’s paid off and your “partner” doesn’t dump you for wasting your life as a pathetic troll. Something tells me they will.
Does anyone else suspect, in light of Hawk’s memory challenges, that he sometimes forgets it’s not 1981?
I wrote:
Hawk replied:
Let’s see…
Similar with water usage. Has been flat in the CRD since the early 1990s despite a 40% increase in population. Amazing how far conservation can go.
Heck I just replaced my desktop that idled at some 200W with a micro pc that draws about 5W.
Leo S, you are right. I was a little too negative. The “net metering” that Hydro offers is a big plus in our favour.
You are right that, long term, it would be great not to need to expand our dams. Though, with Site C we may have more capacity than we need for quite a while, unless everyone very quickly moves to electric cars. Here is an amazing article saying that US electricity consumption has remained flat for a decade, surprising utilities that were planning for more capacity.
https://www.vox.com/energy-and-environment/2018/2/27/17052488/electricity-demand-utilities
It is a nice problem to have.
Well I wouldn’t say the worst argument. We have a lot of sun in Victoria so from that perspective it isn’t bad. Also you won’t be saving GHG emissions that is true (probably you are increasing them actually) but with the natural storage from hydro we are perfectly positioned to bring on a ton of solar and wind though. From a system perspective that could be significantly more cost effective than continually expanding the hydro capacity
Marko, I don’t know the exact numbers but, by memory, a high-efficiency gas furnace still has a heat pump edged out a little for costs. Now, that depends on the price of NatGas and Hydro and the furnace can’t air-condition your house in the summer.
I would suspect that your fireplace doesn’t have near the efficiency of a proper furnace. Choice is good, though.
In the Green Building world, there is some debate as to whether the falling cost of solar will overtake the cost of putting in triple-pane windows (or other expensive efficiency options). Is it better to put your window money into solar, considering you can use the solar to offset other electricity costs?
In BC, we have the worst sales pitch for solar: Our Hydro is already renewable, it is cheap, and on the coast we don’t get as much direct sun. Even with all that, newer panels may get cheap enough to make it worthwhile.
Triple pane will hopefully come down in price, too.
The efficiency argument is interesting. Given our hydro is as close as possible to emissions free, does it make less sense to squeeze out every bit of efficiency in the house (which often entails more embodied energy) than in locales where heat is more emissions intensive?
The last bit of efficiency may cost much more than it is worth as a long-term investment, unless energy prices rise much faster than anyone expect
I ran gas and power (cheap) to pretty much every single thing in my house that can run on gas…..that way you can flip flop between the two energy sources and you can also charge two cars with 200 amps if your are running hot water, dryer, range, etc., on gas .
Still haven’t really figured out if cheaper to heat my house with heat pump or gas fireplace. I have a Valor fireplace that can essentially heat the entire home if I leave all the interior doors open.
440 housing units planned in 7 buildings over 5 years in Langford
I went to the launch event for this….starting around $500 per square foot. One bedrooms will start at 310k+GST.
Marko, you are right that the numbers have to work. You would need to be wealthy to afford to upgrade on principle only.
I think there has been a bit of the resistance for some people with the full German PassivHaus standard. The last bit of efficiency may cost much more than it is worth as a long-term investment, unless energy prices rise much faster than anyone expects.
The people over at GreenBuildingAdvisor have been discussing the idea of a “Pretty Good House”, which is still much better than average, but not throwing money at things just to meet a paper standard.
I think the important thing is picking the low-hanging fruit, like sealing air leaks, insulating well, and putting in a heat pump. When you get to thick sub-slab insulation or triple pane windows, you need to crunch your own numbers.
The word amateur isn’t negative by itself, and it’s accurate. I haven’t come across a private landlord that properly educated themselves about landlord/tenant laws, which is no comment on Marko.
Half decent landlords have lower turn-over or just re-rent based on a referral from the tenant leaving so less opportunity to meet decent landlords.
I agree, the average landlord in Victoria is totally clueless and a lot of people just have zero sense of good or even common-sense business practices.
One thing that always gets me in my business is how sellers tell their tenants last minute that they are selling (like 1 or 2 weeks before). Why not tell them a few months in advance the home is going up on market?
When I sold my ERA unit last year I knew my tenant was planning on moving out in June. In March I contacted him. We signed a fixed-term end-date tenancy until June 4th, 2017 so he was protected and could stay until his medical residency finished (I also gave him a month free). It worked perfectly for all potential interested buyers as they knew they could AirBnbing the unit starting June 5th, 2017. The tenant gave me a long weekend he was going away for. Listed it before the long weekend, had showings while give has gone over the weekend, sold before he came back.
He got a month free and wasn’t forced out and I got top dollar for my unit because he agreed to sign a fixed-term tenancy lease (this was important because you can’t give a tenant notice so you can AirBnb a unit) Everyone benefited with a tad of common sense.
Tenancy legislation has changed a bit but if I had to do the same thing this year I would just have him or her sign a mutual end to tenancy.
Re triple pain windows from the previous thread. If I exclude my Tesla charging costs I am looking at $1,500 per year in hydro for a large home where I made zero effort to be energy efficient. I went with basic Milgard windows (same quality as Ply gem). Not sure where the math is in paying back the initial investment of triple pain? Even if somehow my electrical bill went from $1,500 to $0 which is impossible that is still only $1,500 savings per year.
I was also recently at an inspection of a high-end 2006 home with super high-end windows and a lot of them had blown seals already so not really convinced the high-end crap would last longer either.
Like what’s is going to last longer; hardie plank or your $ cedar siding? Heatpump or electric baseboards?
People overlook maintenance as well on some items; my gas fireplace and heat pump service is $300 combined per year. You don’t have that with baseboards.
There is a new(ish) step in the property transaction process, where you need to verify the residency of the vendor. This is frequently done by the lawyers for the vendor and then conveyed to the opposite lawyer. If you are entering into a property transaction with a non-resident, you need to seek tax and legal advice to make sure you are not liable for this kind of thing.
In particular, the new PTT form has a field for this:
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/property-transfer-tax/file
“My mistake, 30 more years to go with a stranger in your basement, that would totally suck.
On schedule to be mortgage-free in <10 years.”
Nice fantasy story but you’ve never posted that before, just that you have a 40 year mortgage that’s obviously locked in ten years ago at higher rates.
New Langford houses are built better than a Golden Head 70’s asbestos shack.
Until you sell it isn’t worth jack shit. The crash will take it back to 2005 faster than you could ever imagine.
Just want to point out that in such a situation the buyer is responsible for withholding tax and submitting it to CRA, and they can go after the buyer after the fact if this isn’t done.
Only the first quote is my words. The second is a quote of someone else. My point was that I was objecting to the use of emotionally loaded language.
Apology appreciated and accepted.
On schedule to be mortgage-free in <10 years.
Being close to UVic, nice suites in Gordon Head rent themselves.
Our tenant has been with us for six or seven years now (can’t even remember when tenancy started) and isn’t a student.
Sitting on a paid-for $1M+ asset, with absolutely no debt, before the age of 45 will be fun.
It’s called setting aside money for future maintenance/repairs as well as having an emergency fund.
I’ll take a ’70s GH box with its kinks worked out long ago over a home slapped together at breakneck speed in Langhole any day.
What an amazing scam foreign students were being afforded. Yes their tuition fees were approx. double the going rate but then their parents were allowed to buy them a condo/SFH. These properties averaged a minimum 5-8% appreciation per year. On a $500K property (the very low end of the scale) the property would appreciate by $25-40K/year more than off setting the cost of education. What a great way to get free education. If the parents sold and didn’t properly file with RCA they likely walked away without paying any income or capital gains tax at all. What a set up.
Hey thanks Barrister for putting that up. I did read it with interest.
Even if, as you say, his opinion is “worthless”, one of the reasons I wanted to hear about it is, most of us are hearing economists reports from media, which I think is a bit more questionable than a one-on-one conversation with someone in private. Press is frequently a bad source of info just catering to its advertisers, but often it’s the best we have.
My apologies, Introvert. I was obviously replying too quickly. I think the colour of their avatar is too close to yours and I made an unfair assumption.
“He has serious concern that the extremely large increases in debt are about to collide with inevitable interest rate increases.”
Thanks Barrister. Exactly what myself and the other bears have been saying for ages to deaf ears on here. The day of reckoning is upon us with 4 more US rate hikes coming jacking up the 5 year mortgages.
The massive HELOC borrowing the past year as the lottery winners milk their profits to buy toys and soon to be underwater “investment” condos will be the death knell.
“Don’t you live in an apartment building full of strangers Hawk? Not sure how that is necessarily a negative in either scenario. I’d prefer to have the principal paid down too.”
If I have a problem with any of the strangers in my building I call the manager and they deal with them but it’s been years since that’s happened to me. I don’t have to fight the landlord tenancy agency and risk having my place trashed for months on end.
I never have seen the fun in owning a house and having to give up half of it to a stranger. Defeats the whole point of home ownership.
I also save the same difference and save/invest it, Intorotroll has an obligation to pay it to the bank or the new roof, or the leaking basement, etc etc. Houses are bottomless pits unless brand new.
Probably not for vancouver but we’re not that far off here. Could easily return either through extended price stagnation or a moderate decline in a shorter period
My apologies to everyone that I did not elaborate on what my friend said. Frankly, I am not sure that the details I can provide is going to be particularly enlightening. I suspect that his overall opinion is based on computer modelling of the economy. In short, I dont believe that I can give you enough details that you can all scientifically re-examine his opinion.
In short. his opinion is that the economy is on the “threshold of its tolerances” (his expression, not mine) on a number critical fronts. He has serious concern that the extremely large increases in debt are about to collide with inevitable interest rate increases. Free trade negotiations are at a perilous point and the best case scenarios still present a negative impact on the economy. Balance of trade numbers have been disappointing and while manufacturing output has remained relatively strong employment in manufacturing has had serious deterioration over the past few years.These with a few other factors threaten the velocity of money within our economic system. On top of that they are seeing a worrisome amount of capital in the last few quarters relocating outside the country.
The housing bubble in BC is a concern but not one that one can view in isolation. If I can quote ( as best as I can recall) him again. We have gotten far to close to an edge of a dangerous cliff while denying that the cliff exists.
I would caution that it is only one man’s opinion and I suspect that if you ask ten different economists you would get fifteen totally different and contradictory opinions. Is his opinion meaningless, perhaps.
Fundamentals to me means people buying homes with the intent to live in them. There’s a few extrapolations we could make from that. People would be buying property as a means to lessen their losses over time against rent and inflation, or just a move sideways or up/down based on their situation. People wouldn’t be buying because they can get 15% YoY returns on an asset that’s 8 times their household income. In a market that’s based on fundamentals, the affordability ratio would be close to the historical value of 2-4.
Don’t you live in an apartment building full of strangers Hawk? Not sure how that is necessarily a negative in either scenario. I’d prefer to have the principal paid down too.
Spoken like someone who has yet to purchase. Even with the new government measures I don’t see a return to income-based affordability. There would need to be something significant that affects primary residence values owned by residents imo.
“Those numbers are off. I guess it’s true: memory is the first thing to go.
The stranger’s monthly cheque goes straight to principal paydown. Everyone in the house pitches in!”
My mistake, 30 more years to go with a stranger in your basement, that would totally suck. Especially when the crash hits and the current renter moves and no one else to rent to other than the folks on welfare. There’s always pop bottle and dumpster diving but you’ll have major competition in that hood.
But what are those fundamentals? I’m in the business of valuation and I don’t know of any “fundamental” to gauge what prices should be.
If you know of any, I think the lenders would really like to know too. It would make their job easier knowing what the “fundamental” value of a property is in relation to its market value. At the same time it would make getting a loan near impossible.
Loans Office: “Sorry but your loan has been denied as it is more than the property’s fundamental value”
Applicant: “WTF is a fundamental value”
Loans Officer: ” It is whatever I feel like making it today”
There would certainly be some valid sob stories in that scenario, but I think it’s necessary. Without a correction back to 2013-2014 prices, there’s way more people being hurt. I just can’t see a return to fundamentals being a negative thing when considering all of the CRD. If we want justice for people that jumped head first into a bubble, we should be teaching debt and financial planning in high school.
It’s for the greater good… https://youtu.be/DnqPrDN77Xg?t=19s
I am adept at failing to deliver, but those quotations are from patriotz.
You were being a troll? I don’t think so. Barrister was asking for it.
Ah Introvert, you never fail to deliver, no matter the discussion:
It demonstrates the polarizing nature of the debate. But the people who want to see RE crash hard may find themselves in less of a position to buy afterwards then they thought. Many of them may have their jobs threatened – the entire economy suffers. Even if they have their jobs and piles of cash, they may be surprised how suddenly ill tempered their lender becomes. Banks don’t want to give out mortgages in that environment. The same, self-reinforcing dynamics that fed into the melt up, can then go in reverse.
If these things weren’t the case, housing corrections (at least the substantial ones) would recover much faster than they generally do.
I know. I was being a bit of a troll I guess. I really did want him to elaborate, and it was a bit disappointing he chose not to respond. Ah whatever. It’s not like he owes me something, haha.
It’s not just the low inventory. It’s sales vs inventory (Months of inventory), sales to new listings ratio, and days to sell. Those are still indicating a seller a market for most property types
So how do you find realtors that meet your criteria? Speed dating?
No, Local Fool. He’s not. Barrister was mostly showing off.
Those numbers are off. I guess it’s true: memory is the first thing to go.
The stranger’s monthly cheque goes straight to principal paydown. Everyone in the house pitches in!
I don’t see why low inventory indicates a sellers market. Presumably people are worried about marketing their property in the current uncertain climate. Why should you fork out a lot to move up the ladder if the ladder is falling down.
Barrister,
Does this mean you aren’t going to tell us what your economist friend said? 🙁
“Got a letter from an agent today that someone is interested in my place. They want to facilitate a sale not list it. ”
That jives with how money launderers operate.
“Some of us work for a living at a real job
Did selling right before prices jumped 40% mean you had to delay retirement, Hawk?”
WTF are you talking about now narc ? Your made up assumptions of my life show your immaturity to understand how the real life works. Just because you have no real purpose in this world is not a reason to repeatedly spew false stories about others.
Another 25 years of a stranger in your basement and 40 year mortgage paying shows your clear lack of intelligence.
I dont know how much impact the new tax will have. Time will tell. My hope is that it does not crash the market totally because who then really gets hurt are the young families who bought in places like the west shore. If house prices crash back to 2013 values (which actually more closely reflected the purchasing power based on local incomes) that would put thousands of mostly first time buyers under water.
The probability of that occurring is not the most likely scenario but there are a number of other negative factors pressing down on the real estate market at the same time including inevitably rising interest rates.
I am not an economist but I do wonder what the impact of having hundreds of millions, if not billions of dollars leaving the province? Personally I am not big on disaster scenarios since they rarely come true. But like earthquakes, when they do happen the results can be devastating and recovery can be slow.
Of coarse it is easy for me to be nonchalant about it all since I dont have a dog in this race. Of coarse young people like Josh will be fine since they can always bail out to the US and live the good life in Austin Texas.
This makes a lot more sense for amalgamation http://www.timescolonist.com/news/local/amalgamation-advocates-now-favour-three-municipalities-town-hall-today-in-sidney-1.23190725
You’re the one using the word “suffer”. If you think this is appropriate to describe someone who might have to go from owning two properties to just one, I think you need more exposure to real life.
Thanks Leo for your answer about ‘sales to active listings’ ratio
Number 6, that roller coaster video is strangely hilarious. The sound of the gears as it cranks the coaster up to the peaks is hypnotic.
Leo S, I always find your personal analysis to be very balanced. Your frustrations occasionally slip through, but it is always done with humour so I find nothing to complain about. Separating them seems like a professional approach, though.
You are right, there is no way to change things and keep everyone happy. I guess the thing that frustrates me is the lurking self-righteousness (not you) that implies that anyone who is hurt by this new tax must automatically deserve to suffer for the good of others.
From the last thread: “Cry me a river”
If we all were a little more honest about the reality of collateral damage, it might be just a little easier to take.
Yes. Possible, but probably not if your ownership window is not too short – bigger expenses get spread out over time. Many unexpected risks are the kind you have insurance for and others you can inspect/maintain against or not buy in the first place. What you can’t control doesn’t have to be spread out over many properties to manage risk, just over time and planned for as a contingency. You cannot control for everything but you can for most things and that works most of the time.
A decent approach, but I will let Donald Rumsfeld explain the problem with it.
“There are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. And if one looks throughout the history of real estate investment and maintenance expenses, it is the latter category that tend to be the difficult ones”
Yeah, you can estimate, but it’s just that, an estimate. Problem is you have one expensive thing go and your whole estimate is out the window. That’s why the range is large. Some people have a gutter job go bad and leak into their walls, some people go 20 years and only their kettle melts. Some people have a cracked foundation while others only have to paint.
Preparing an estimate is good practice, but it is the illusion of control. If you own 100 properties your maintenance costs will be close to your estimate. If you own 1 property it can be wildly off.
It is not a wild card and if you are getting wildly varying answers by asking people, those people don’t know how to estimate this. It is based on condition/age. You just need to inventory components and develop a budget to come up with a reasonable estimate.
Here is a practical approach: http://www.moneysmartsblog.com/estimate-budget-home-maintenance-costs/
It is also not correlated with house values ie. some 1% rule. When house prices rise 30% costs don’t go up 30%.
Yes.
Agree that people should declare their rental income and this will help in some cases. Of course, this does nothing to encourage this for rental suites that are part of a primary residence.
In addition, the tax is going to affect second home owners in areas where there is are only seasonal tenants who would rent at the same time the owners would want to use the property and these areas have high vacancy rates in the off season. I disagree with this although I am not impacted by it personally. I am in favour of supporting recreational property ownership.
Massive development to significantly alter quiet community of Union Bay
https://vancouverisland.ctvnews.ca/video?clipId=1339548&binId=1.1180928&playlistPageNum=1#_gus&_gucid=&_gup=twitter&_gsc=eVvebQd
Got a letter from an agent today that someone is interested in my place. They want to facilitate a sale not list it. Last thing I thought I ever get in this market. Hard to understand what is going on. I would never buy in this market. Anyways not responding.
Found it weird after all that has happened the past 2 weeks.
Did selling right before prices jumped 40% mean you had to delay retirement, Hawk?
Basically, Leo refers Marko. That is all.
Incorrect - LeoYou are certainly tenacious Luke, I will give you that.
I see no problem with that. Foreign buyers are a small percentage and the main issue before was that there wasn’t a lot of economic benefit from the investment. If we now can collect $300M/year and plough that into more housing supply I think that’s fine.
http://business.financialpost.com/real-estate/vancouvers-hot-housing-market-gets-tougher-for-wealthy-chinese-2#comments-area
Read the comments section in this article. Really interesting. The commenters seem to think in order to deter Chinese FB’s the FBT needs to be either 100% or a total ban! Wow! They think many of the Chinese won’t stop coming unless banned basically.
Ex of comments from article: “I totally agree, an increase in the taxes will not stop wealthy Chinese from buying property in Vancouver. The only way to decrease housing prices is if all wealthy immigrants from China are declined Canadian citizenship and the ability to purchase homes.”
Well, we know that’s not going to happen, and also – Canada is increasing immigration which now mostly comes from Asia. Another question I have is: Do any loopholes around FB tax exist? Can they get around it by being PR or CDN citizens? Probably.
Also think this: If RE prices decrease in Van by 20% it becomes the same price for FB as before. Also, what will the CDN dollar do? If that declines that makes things cheaper. The reasons they were attracted here in the first place still exist (strong communities as Van is essentially a majority Asian city now, and there’s clean air/water/stable society/etc). Also – think about where they are coming from and what it’s like there… what can they buy elsewhere in the world compared to here? It’s going to take a lot to deter them, these latest measures may not even be enough. We will see…
The roller coaster video was great. It is beginning to feel like Hawk may just have his day.I thought that I found my crystal ball but it seems that it is a snow globe.
No but this is a good idea. The big wildcard is upkeep. That can make or break the investment and estimates vary wildly on this depending on who you ask from near zero to thousands per year
@Leo thanks for the chart 🙂 I thought it was around 25% actually but then second guessed myself thinking that was too high.
@totoro
I think a great thing the NDP has done is make it so that everyone now has to declare rental income on a “investment” home as part of their BC income otherwise they will not qualify for the long term rental incentive. Most of the people I know do not do this currently and I think this will force a change in increased revenue for BC. Some will sell and others will have to go legit. I really can;t see how these rental homes are cash flow positive unless they bought years ago and with rental increases are now positive. It seems like most were cash flow negative but because of rising housing property they would come up ahead.
Leo did you do a post on costs of doing an investment property covering mortgage, taxes, fees and up keep before? I have some friends that believe this is the way to go even in the current market as seminars and other events are held talking up rental investments and people seem to buy it.
I guess it depends on what kind of correction it is. If it’s a sharp correction then yes, they tend to be short lived. We’ve only had two of those that we have data for.
1981: 2-3 years to hit bottom.
2008: About 8 months to hit bottom.
Then we have the slow corrections:
1994: About 5 years
2010: 3-4 years.
Not all:
Buying a second home for use by family member(s) 229 5.3%
Buying a second home for future retirement 148 3.4%
Buying a second home for vacation use 84 1.9%
Buying a revenue property as an investment 487 11.3%
Although one could argue that a second home purchase is always an investment even if it won’t be rented out. No one would buy a second home for family if they thought it would decline in value.
I don’t see them that different. They just focused more on the prices which are still strong and market conditions which are still hot, whereas I am more interested in where the market is going which seems to be cooling.
I don’t think that data exists. That’s why people do whacky stuff like analysis based on hydro usage.
Yes, Feb traffic up about 25% from last year. 800,000+ annual page views.
And to answer your previous questions about how I identify good realtors for referrals, you can’t test for ethics of course so it is based on how they approach clients, their reputation in the industry, personal conversations, no record of complaints, etc. What I look for primarily is a low pressure approach and a certain experience level. Generally bad experiences with realtors come from a high pressure push into properties that do not fit your needs.
Thanks, I’m thinking of actually making this separation much more strict in the future. Separate posts out into “The Facts” and “My Take”. Then it’s even clearer.
Absolutely. But I think we also have to be realistic and realize that it will be impossible to change anything if our standard is “zero collatoral damage”. Some people will be hurt with these changes that didn’t deserve it just as many people were hurt because of the lax approach before.
The numbers they release are for the entire market (residential + commercial), while the chart is just residential. Not sure why they don’t release the residential inventory publicly but it is 1054 in February.
Hopefully. I haven’t read any detailed information about the projections but I am concerned they are way off. 20% is enough to deter more than a few but the 2% speculation tax is the real issue imo. That is a big enough tax to force sales or motivate people to find a solution to paying it. My bet is that they are not going to get the revenues from this that they have estimated. And if really is a refundable tax credit, well that is going to catch so many BC residents who have a vacation place and low incomes, including seniors. Going to make people hopping mad if it is the case.
It is not just about the 2% tax. It is about measures that most would believe will cause a drop in prices. Spurs people to list as far as I recall. In addition, even some who rent out the property and qualify for an exemption will be concerned about holding based on the new measures and rising rates. Being a landlord in the spec tax areas is largely a losing monthly cash flow situation and if you worry you’ll need to sell within the next seven years you list now if you feel prices might fall… imo. Snowball generally grows going up and down for a bit.
Possibly. But as we’ve seen in Vancouver, there are a percentage of foreign and wealthy buyers that are not deterred by the taxes. They will continue to buy and now the province will collect 20% on those purchases. So FB sales may decrease but the tax collected will still be more than before.
PTT revenues will definitely decrease with a drop in overall prices. One would assume they have modeled that.
Recession not far off. Rising listings will only fuel the coming bonfire.
Canada Didn’t Skip The Great Recession, We Delayed It. Here’s The Chart
https://betterdwelling.com/canada-didnt-skip-great-recession-delayed-heres-chart-explains/?utm_content=buffer016c0&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer
It looks like a big jump in active listing for houses in the core in the last two days.
For the last two days there have been 27 new house listings in the core versus 3 sales or 9:1. For condos in the core the new listings to sales ratio for the last two days is 3.7:1
For Langford and Colwood the ratio for houses is 4 new listings for every 1 sale.
Most of those new house listings are in Victoria, Oak Bay and Saanich East where the ratio is 21 new listings to 1 sale.
If the ratio is an indicator of how big speculation has been in Victoria, Oak Bay and Saanich East , I’d say hold on to your hat this is going to be a heck of a ride.
And just for you Patriotz….
https://youtu.be/hqOn5XEm86A
I just don’t understand how is the figure of ‘sales to active listings’ calculated.
“A total of 545 properties sold in the Victoria Real Estate Board region this February”
“There were a total of 1,545 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of February 2018”
So 545 / 1545 = 35% don’t know how they drew the line in that “Sales to Active Listings Ratio” page to show about 50% of that rate for Feb 2018.
@Anna Edwards
So for those who live in their house in Canada for 6 months of the year and spend the rest of the year in the USA and leave their Canada house empty will this hit them?
If they are a BC resident and it is their principle residence then I don’t see why it would effect them.
So for those who live in their house in Canada for 6 months of the year and spend the rest of the year in the USA and leave their Canada house empty will this hit them?
They will have to rent it out for the 6 months they aren’t living in it to avoid the spec. tax?
“You would know better than I would, but looking back, it seems to take 8 months to 1.5 years for a correction to hit bottom, with the exception of the GTA in the 90’s.”
Very astute Josh, see my previous post. This time there is 170% household debt bomb of massive proportions. It could go much quicker and nastier.
“It’s eerie how similar the parallels are to ’91 for Van/Vic & TO. Areas of Toronto are already ~20% off this time around.”
It’s eerie how similar this market is to March in 81. Listings were extremely tight, rates on the rise, sales were real slow but still getting ask prices and over/no questions asked were still common as I dumped to a developer bagholder in half a day.
Then the listings eeked out bit by bit. The market dripped and dripped for the next two years til I rebought in 83 at 45% off peak price. Smells like 80’s spirit. 😉
Intorotroll, I posted last night. Is your OCD narcissism/paranoia out of control again ? Some of us work for a living at a real job and don’t sit at home all day posting about Langford like it’s Nirvana.
https://www.youtube.com/watch?v=hTWKbfoikeg
440 housing units planned in 7 buildings over 5 years in Langford
A total of 440 housing units are planned, with 146 designated as rental. The rest will be condominiums.
http://www.timescolonist.com/news/local/440-housing-units-planned-in-7-buildings-over-5-years-in-langford-1.23189489
patriotz? I remember that name from a long time ago. Welcome back.
Haven’t heard from Hawk in a few days. Is his resolve weaking?
I guess the point I have been trying to make is: The people claiming “everything will be fine and this only hits bad people” are really really naive. Even if the intentions are good, we can still screw up the details.
I am sure that some of the condos downtown are speculative and this tax will hopefully loosen them up. I think the point is that there are a lot of reasons that people might own a second property and not be speculating on it. A lot of recreational property is owned for decades in the same family. That is the opposite of speculation.
As others have pointed out, you can be “land rich but cash poor.” For a school teacher who inherited enough to buy a holiday cabin, is it fair to make it unaffordable to keep something on Saltspring, when they bought it for vastly less money years ago?
Are empty properties a problem? Maybe. Certainly more in some areas than others. Is this the right cure? I certainly don’t know.
You mean buying something now and letting it sit empty, presumably because you expect prices to go up? What’s the word for that?
@Leo S
Thank you, as always, for presenting the Feb analytics. I like the way that you separate facts from opinions.
Vancouver’s SFH market is a buyer’s market now, with sales down 39.4 per cent over the same period in 2017. Overall sales were 14.4 per cent below the 10-year February sales average. See more at https://www.rebgv.org/sites/default/files/REBGV-Stats-Pkg-February-2018.pdf.
An echo to your comments on the policy changes. Yes, the housing affordability cannot be fixed within a short time, or by one measure. The key is, the new government targeted the right underlying fundamentals, instead of tolerating offshore corruption funding influx to BC. Casino and Advantage BC would be good examples. It’s difficult to predict the trend of housing price for now. However, local residents seem to be making one step further to the housing justice, finally.
Thanks once. The tax needs to get people moving on these properties.
Once I doubt it will be one for one. I predict 3 to one.
Thanks for the link, strangertimes. That is quite worrying since it looks like it will only be a credit against the provincial portion of your income taxes. For someone from elsewhere in BC to afford a 400k “future retirement” condo in Victoria (or recreation property on Saltspring), that would be 8,000/yr in extra tax. To offset that, you need a gross income of $110,000.
Well, this is turning out to be a tax that exempts only very high earning people. Well done, NDP, I didn’t expect you to stack the deck so much for high-income people.
If the Vancouver tax is anything to go by, yes it hits empty land. However, there is an exemption if you have an active building permit in place.
What about empty land that is not being developed. Gordon Head has a few parcels. Those should be part of the spec tax. Anyone know?
@Penguin
I think you really touched on an important “unintended” consequence of the spec tax. Getting people to declare rental income. Many people don’t declare this income(yes I know people who don’t, their excuse “no one does”) & this will force many to start. This sounds like a great way to fill in the loss of real estate related tax revenues that will occur due to a slower real estate market.
$80k difference for same SQ/FT and larger lot in Oak bay with a lane way access vs Cook and Hillside.
https://imgur.com/a/wjLL4
One of those 2 houses does not seemed to be priced right. The more I drive around town looking at homes the more I wonder if people who are buying the $800k-900k places near quadra village and oaklands.
2325 Belmont Ave V8R 4A2Vi Fernwood-VictoriaMLS#:386654 for $1.1 Million seems crazy to me as well. Why not go buy a place in Fairfield or Oak Bay. I can only assume these people are out of town buying or don’t know much about the neighborhoods.
@Barrister I was wondering the same thing about time shares when I saw Josh’s post. Curious also about your Banker friend and don’t think you’ve addressed this.
I don’t know how I feel about the spec tax I’m sort of torn. It doesn’t affect me but does to some people I know (will force them to claim the income). I think it is a bit unfair but may help me and may force people to claim rental income so I think that’s good. I know most people here think everyone claims rental income but I know so many people who don’t so I’m skeptical.
Leo there seems to be an influx of new posters. Are you noticing more blog traffic? I suspect there are some people out there trying to determine if they should buy/sell now and trying to judge the market. If that is true…we want to hear your stories people!
Carol James clarifies some aspects of the speculation tax in this interview
http://vancouversun.com/opinion/columnists/vaughn-palmer-speculation-tax-caveat-makes-b-c-property-owners-antsy
How do you embed an image on here?
Looks like this place was put up quickly, 2607 Fifth St, they didnt even bother cleaning up after the wine and empty gin bottle on the table.
I think my favorite rental sold house (i can only assume with the pictures) was last year with a pot plant in the backyard and a bunch of empty beer bottles scattered around the patio.
Me too, I wonder how we can get our hands on that data? I only have suspicions as follows:
-Not many $1m SFH in the core are just ‘vacation homes’ owned by people from out of province.
-lots of condo’s in the core are probably used as vacation homes by both out of province and Yankees. We may now see a glut of condo’s listed? Or… rented?
-Lots of vacation homes exist in Gulf Islands, places like Horne Lake or Qualicum Bay, Sooke, and apparently – Bear Mtn. Someone mentioned expensive waterfront prop’s in Saanich Pen. used as vacation homes, so apparently we may see those come on market. But forcing these owners in far flung areas to sell via high spec tax will do nothing to help the housing shortage where people really want to live/work if only they could afford it (i.e. the core). More condo’s OM, but not more SFH?
What’s odd about it is how they only charged the Spec Tax in certain areas. So an Albertan can still own a vaca prop on Shawnigan Lk. and not be affected. But now can’t own without being charged the tax in far away Horne Lk where the Sasquatch has been sighted – which is off the grid and just vacation cabins? Just b/c Horne Lk. is in the RD of Nanaimo…
So, my understanding as I try to wrap my head around it is – as a BC resident income tax payer I can now go out and buy a vacation prop. in, say, the Gulf Islands, and not be subjected to the Spec tax – but my fellow Canadian in Alberta or Ontario for instance is SOL.
I wonder how many Canadians planning to move here for retirement will now rush their move here to their second prop’s? Rushed retirement? Say, for ex. they were planning to move here in 2021 and now move it up to 2019… will this BC spec tax inadvertently free up housing in other provinces that they now leave behind? Will be interesting to see how this all plays out…
@josh
There’s crazy expensive condo buildings in the NW tip of James Bay are largely timeshares and vacation homes and a big portion SFH are actually apartments with 4 – 6 units.
I find it interesting as well to see how many of those old 1900-1930 Victorian homes have been converted into multiple units in James Bay/Fairfield. Take a old home, update it and split it 4 ways.
@Barrister
I dont anticipate a large flood of SFH coming onto the market any time soon. My own take on the situation (which may well be wrong) is the huge spike in prices motivated a lot of people to sell in SFH to sell earlier and either retire or move to a condo or move out of town. At the same time, people purchasing in areas like Oak Bay, Rockland, Fairfield and James Bay are likely to be long term occupants and unlikely to put their houses on the market until faced with divorce, death or debilitation. This is particularly true of the buyers from the lower mainland.
I thought the stats for % of people buying a second home in Victoria were high (10%+? I cant find the pie chart Leo posted), 25% of Victoria buyers are buying in cash from what Leo posted. I would assume that these are second homes for investment purposes. If prices start to fall I believe people will start to sell their “investments”. I think the key will be the perception in the media and general public. If the media starts to turn towards a story of lower sales AND lower prices into March the tides will turn I believe. It is interesting to see how the TC’s story is different than Leo’s above, so I do believe it will need to have a media push to get the general public to know changes are happening.
Barrister did you ever end up posting what your friend working at the bank told you?
The budget just allowed them to do that.
Money has to come from the province or feds but I think they should be either privately operated or by the municipality
Josh has sparked an interesting questions, although tribal, what will be the tax treatment of timeshares under the speculation tax? Will foreign buyer tax apply to timeshares.?
Unless all that focused effort to regain affordability cools the mania and prices slump, in which case affordability will be back soon.
The most common scenario that I found over the last couple of years is that of a baby boomer couple buying a new condominium to live in but NOT selling their family house. Depending on where the house is located it is either rented out on a month to month tenancy or handed over to a company that runs the houses as an airbnb. They don’t want to be in the landlord business they just want to hold the property for appreciation.
And that is a wise way of buying property in a rising market. Don’t sell the house and reap the benefits of appreciation. And that’s one of the reasons that has led to our low inventory and high prices.
However, If the market was to decline, these same baby boomers will sell that house as they don’t want to get caught chasing a falling market. That’s a pent up supply of housing with owners waiting for the optimum time in the market to sell all at once! It seems everyone of them know that our prices are extreme by any measure and they all expect prices to fall. They are just waiting for that apex in the market to get the highest price and then pay off the condo.
In the last 24 hours there has been 68 new listings relative to 24 sales. That’s a whopping 2.8 new listings to every sale. Was the new budget the signal the baby boomers were waiting for?
You would know better than I would, but looking back, it seems to take 8 months to 1.5 years for a correction to hit bottom, with the exception of the GTA in the 90’s.
The word amateur isn’t negative by itself, and it’s accurate. I haven’t come across a private landlord that properly educated themselves about landlord/tenant laws, which is no comment on Marko.
That’s super interesting. Carleton and U of O both took $124m in government grants to build as many cheap crappy residences as possible and charge ridiculous prices for them. People that argue against public universities often have no idea how subsidized private universities already are.
There’s crazy expensive condo buildings in the NW tip of James Bay are largely timeshares and vacation homes and a big portion SFH are actually apartments with 4 – 6 units.
I am a bit confused here. The whole stated purpose of the foreign buyers tax and the supposed “speculator tax” is to reduce or eliminate those category of buyers and owners with the long term view of reducing prices.
Assuming that those objctives are meet then the amount of real estate tax will reduce greatly over the next few years including land transfer taxes if there is a major drop in house prices.
Considering how much of the land transfer tax is needed to fund other government commitments I dont see that there is this magic large pool of money available assuming that the new taxes actually accomplish their stated goals.
I dont anticipate a large flood of SFH coming onto the market any time soon. My own take on the situation (which may well be wrong) is the huge spike in prices motivated a lot of people to sell in SFH to sell earlier and either retire or move to a condo or move out of town. At the same time, people purchasing in areas like Oak Bay, Rockland, Fairfield and James Bay are likely to be long term occupants and unlikely to put their houses on the market until faced with divorce, death or debilitation. This is particularly true of the buyers from the lower mainland.
The dynamics for both the West Shore and condos is somewhat different.
LeoS said: “Yes that is the situation we find ourselves in. But it doesn’t have to be that way. If the government properly supports rental housing construction …”
The only way ‘purpose built’ rental buildings will become the norm is if the Provincial Government gets actively involved in leading the process with initiatives and financial backing for land acquisition and ownership of the land. Once the government owns the land and forces appropriate municipal rezoning, they can lease the land someone else to build apartments, or contract the construction to a company like Campbell Construction. Details can be worked out later, but the province must be the land owner.
And if the province gets involved, they need a new Crown Corporation of Rental Housing to manage the land acquisition, building construction, and long term maintenance.
The new Crown Corporation could be funded with 100% of the taxes raised from foreigners real estate taxes, speculation taxes, and a significant percentage of the property purchase tax revenue.
You’re right LeoS, it can work and be profitable for everyone involved and yet still supply rental units at reasonable rates for both singles and families, but only if the Provincial Government owns the land and funds the project with real estate tax dollars.
I was talking with a neighbour, who is a senior staffer at the CRD, and usually very knowledgeable who stated the following (I am mentioning this simply because I have not researched this but I am passing on what I was told).
Uvic would like to build more residences ( a lot more) but under its charter it is not allowed to borrow money to build residences. Because the University already owns the land these residences would not only be self funding but actually a profit center for the University. Uvic has over twenty thousand students at the moment and housing for only a small fraction. If the University added another 5000 residences then this would go a long way to freeing up apartment space and also reduce demand on busing. Camasun College has has a huge campus that also could accommodate a large number of residences.
In short, you could free up a large number of rental units in the city at no long term cost to the province since the buildings would be more than self funding. The cost per unit would be very reasonable since there is no land purchase involved. Theoretically this would also benefit the students since it would eliminate travel time and allow them more time to study (the theory being that they are actually there with the principle purpose of studying).
I predict we see a big influx of Easterners (gwacs 🙂 ) for a few years.
(at least we’ll be able to vote out the socialists)
Saretsky on Vancouver sales
It’s eerie how similar the parallels are to ’91 for Van/Vic & TO. Areas of Toronto are already ~20% off this time around.
I’m really curious about how many mostly empty vacation homes we really have here. We always heard very few, now it’s supposedly a lot that will be impacted.
Agreed. Sorry about that.
Much different spin in the TC today:
Benchmark price for a single-family house in the core area — which includes Victoria, Oak Bay, Saanich, View Royal and Esquimalt — was higher, at $840,300. That’s an increase of nine per cent from February 2017.
Condominium prices also set a record, with the benchmark price in the region at $463,100, up 20.3 per cent from a year earlier.
http://www.timescolonist.com/business/benchmark-price-for-home-rises-to-840-300-in-core-1.23189515
I think the listings will show up soon Leo as a result of the 2% tax. Just a bit of lag time.
I agree that purpose built rentals are the way to go. Calling individual private market landlords ‘amateurs’ is a bit overbroad and negative.
What I have noticed in my recent foray into the rental market for some friends is that the purpose built rental apartments in Victoria are generally much better value and quality than basement suites for no more money – often less. A big influx of purpose built vs suites would help a lot imo.
From previous:
I don’t agree. Yes that is the situation we find ourselves in. But it doesn’t have to be that way. If the government properly supports rental housing construction we don’t have to rely on
amateurprivate landlords to meet rental demand. Many countries have figured this out, we can too.