March 12 Market Update
Weekly sales numbers courtesy of the VREB.
| Mar 2018 |
Mar
2017
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 72 | 235 | 929 | ||
| New Listings | 104 | 424 | 1217 | ||
| Active Listings | 1434 | 1627 | 1556 | ||
| Sales to New Listings | 69% | 55% | 76% | ||
| Sales Projection | — | ||||
| Months of Inventory | 1.7 | ||||
Sales are weak but not catastrophically so, running at about 20% lower than this time last March. If we look at the seasonal pattern, they should continue to pick up for another couple weeks and then stay high for about 6 weeks before starting to decline.
Over asks as well are down from the frantic pace of last year, but still about a quarter of detached houses are going for more than 1% over the asking price. Some of those are intentional underpriced listings intended to incite a bidding war, but I’m seeing a lot fewer of these.
The encouraging news is that we are finally starting to see more of an uptick in inventory, gaining nearly 100 active listings in the past week. Still tracking very closely to where we were last year, but hopefully that will start changing in the coming weeks and bring some more supply on the market.
There are definitely some nervous holders of second properties out there. Remains to be seen how many of these decide to proactively list them vs waiting for the details of the spec tax to be announced. Despite the premier’s assurances that BC residents are not being targeted, there is still a lot of uncertainty about whether they will be exempt from all or just part of the tax.
“Trump is fucking up the whole world trade. Repercussions will not be pleasant. Gas up again, 9 cents yesterday.”
The US polices do affect us, but you can’t solely blaming them for it. To me the fault lay mostly with Canadians, because our policies rely largely on trading with American specially energy. The current price increased is due to refinery shutdown in Washington state where most of our fuels come from. It let the suppliers gouge us because we don’t have enough domestic refineries for the local demand.
I also find it is odd that BCers complaints every time fuel price go up, but at the same time they are pro taxes and protests against all energy developments. An example of price discrepancy between pro tax and low taxes cities from Gasbuddy; Edmonton $1.054-1079, Calgary $1.089-1.126, Vancouver $1.479-1.499, Victoria $1.489-1.499.
@CE
Remember I was giving advice to a “Newbie” and to most of them buying their first house/Condo is “rocket science”
As to the cash back realtors, my point was to get the best realtor as opposed the cheapest, if it happens to be a cash back realtor then good on ya.
New post: https://househuntvictoria.ca/latest
Average commenter,
I am barely in my 30s and only started looking/thinking about buying a house the last 2 years. Not great timing. Im not trying to time the market but there’s nothing to buy. It sounds like you got a great place though. I like the Langford area and would live there if it weren’t for the commute x 2 parents. I would definitely not live in Langford in a 2-4 people per bedroom scenario or by a race track. There are sacrifices and then there is giving up on life as you know it.
Also who said anything about moving into a dream house? I just want a house to fit my family that isn’t falling apart within 30 mins driving from work. With the current state of the market (peak?) if I did buy now it would have to be somewhere I can see myself living for 20-30 years. This is far from dream house status. There are lots of houses I can afford so why not wait for the right one?
Grant you haven’t been following long enough this is pretty tame. Can get pretty rough in the wild HHV forum just you wait 😉
Caveat thanks for admitting it may have been easier in another time regarding education, jobs and housing. It’s also easier for us now in a lot of aspects. A lot of millennials are entitled brats but there are those in every generation. Most of us also haven’t gone to war, lived through much hardship and have equal rights as women. I wouldn’t have my career as a woman if it was 30 years ago and I would probably have been a miserable and horrible housewife. So even if I could go back and be born another time I wouldn’t change a single thing about my life. Maybe even the struggle of wanting to own a home is good for the ol’ character. It all works out in the end.
Counterpoints
1) Buying a property ain’t rocket science.
2) Why would Richard assume that the cash back realtors are less “knowledgeable, experienced, and professional” than any others.
@Newbie
If you are about to make one of the biggest and most important financial decisions of your life I highly recommend you search for the most knowledgeable, experienced and professional Realtor you can find as opposed to one of the cheapest.
HAWK I’ve set it up for you!
Simple. Just search “cash back realtor victoria” and you will find the ones that do it. There are a few.
I can’t tell you how much you would hate me. 😀
My family & I plan on purchasing in 2018 or 2019, we would be low maintenance clients.
I ran a 50% cash back program 2010 to 2015 and there was no way on earth to identify “low maintenance clients.” I tried many strategies such as requiring pre-approval letters and limiting the number of showings for the 50% cash back, etc. No strategy was ever a good predictor. Once I met a tattooed badass looking guy in a Timmies parking lot, no pre-approval of any sort, and I thought to myself “no way this guy buys a 800k home” and literally two days later he buys a 950k home and then refers me to a bunch of his military friends. One of the best clients I’ve ever had.
Other buyers present as “low maintenance” but overanalyze things to death and three years later your are showing them house number 101. The longest buyer I had was five years and I honoured the 50% cash back when they eventually bought. I’ve also had people disappear after 2-3 years because they changed their mind and decided on Comox.
The other thing that happened is it became brutal to work with buyers starting in 2015. It went from helping someone find a home to helping someone find a home plus actually having the winning offer. The real-life problem being there is if someone is coming to you for 50% cash back they are typically financially concious and not willing to go unconditionally to outbid everyone else for their “dream home.” In 2016 I had stretches of writing 15+ offers in a row without acceptance. My luck improved a bit last year with buyers.
If you send me an email at markojuras@shaw.ca I can send you back agents doing cash back in Victoria…it is basically two.
That looks like a good option for many Marko but it seems like word is out!
That was the same story they were selling when I got into the program straight out of Vic High with so so grades. I did a bit of poking around during the program and I think pretty much everyone that applied got it in my year and back then there were only 50 spots.
Universities are a business too….of course they have a ton of applicants because the program is soooo good and they only accept a handful. On a side note, program actually was pretty good.
Ever hear of these guys?
https://housepriceindex.ca/
@Newbie
There is no such thing as a “low maintenance” client! No offence, doesn’t matter how nice, easy going or accommodating you are……it’s all about the deal, and all kinds of things can go wrong there. In my 30 years of selling I’ve had 2 sellers die between the offer and possession, what a mess that creates! How about a house fire, flood, burglary and the list goes on.
@Newbie
Sign a buyer’s contract with your realtor for a flat fee he/she will receive on a completed deal. Specify on any purchase contract you write that the offer is made excluding all “selling realtor’s” commission. This way the home seller knows to negotiate the final price without having to pay a “selling” realtor’s commission.
Note: all commissions are negotiable.
I’d agree with several of the posters that the challenges of buying a house now are greater than they were in the past.
First of all you need more education than ever to get a good job these days. The organization I work in hires Phd’s and MSc’s to do jobs that we used to hire folks with a two year technical diploma for. The job hasn’t changed that much, there is just so much competition that we can hire RIDICULOUSLY qualified people.
Then education has got more expensive so people are likely to graduate with a higher debt load.
Finally houses have become insanely expensive, even in relation to increased wages.
I didn’t have it that hard (early Gen X’er). Education was still dirt cheap. I delayed house buying compared to my peers but still got in to benefit from most of the 2000-2008 run up. Job market was tough for me, but not as tough as it has averaged for the last 10 years or so.
Grant, that report is probably using 3 months previous numbers which would mean last summer. A ton of changes since then.
Does anyone know any buyer’s agents who offer discounted commissions? (i.e. split the commission with you)
My family & I plan on purchasing in 2018 or 2019, we would be low maintenance clients. I have a real problem with the misalignment of incentives where buyer’s agents get paid more the worse the deal their clients get, splitting the commission seems to correct for this, also the amount of work an agent would do on our behalf would not be at all commensurate with the compensation. I know there are a bunch of agents out there who do split commissions with their clients, like Barry McGee in Vancouver who offers $6k flat commissions. As a new arrival in Victoria I’m not as familiar with the agents here.
Thank you in advance.
I don’t know if this has already been covered by Leo, but here is CMHC’s Housing Market Outlook for Victoria as of Fall 2017
https://www.cmhc-schl.gc.ca/odpub/esub/64367/64367_2017_B02.pdf?fr=1521319407175
If you don’t want to read that it can be summarized:
Housing prices are unlikely to decline due to low housing availability. This has led the market to become overheated with accelerated price growth, leaving the market highly vulnerable. Low housing availability is expected to continue due to employment growth and general migration.
Note – Since this was released last Fall there’s no discussion of the new taxes and related possible impacts on the market.
Welcome to the Internet.
By the way, HHV is dinner at Buckingham Palace compared to the conversations being had on most of the rest of the Web.
Yes, this would be extremely interesting.
Someone, please do these comparisons!
The average house price increases in Calgary were insane between 1998 -2007 going up more than 400% I bought a house in 1998 for $142K and could have sold it in 2007 for over $600K. (didn’t) The best way to get a handle on the inflationary changes is to ideally follow the sale price of the same house over the years or comparables. To go by average or median as has been pointed out isn’t really a true perspective as home sizes and finishes in the last 20 years have changed so dramatically.
ĶMany touting continued price rises are in serious denial of the RBC affordability index that just surpassed 2007 and 2009 peaks.
This “everyone works for VIHA or a cop” is so much bullshit. Even the trades guys is hard work and cyclical employment and first to get laid off in a downturn.All are hard jobs that most people wouldn’t be able to stomach. Reality is average families are maxed out on debt or basic affordability.
Thus the sell off in Vancouver is coming here like a tsunami. Debt is debt and trying to spin it into some new norm is even more bullshit. Credit lending is tightening by the day.
The banks know it well which is why private loan sharks are even tightening lending. The cycle is ending so best take off the rose colored glasses.
Rates are going up and credit will only get worse. 20% can’t even qualify today Spec taxes etc are the final nail. Reality sucks eh.
That’s true that houses are bigger nowadays, but this is just VREB core victoria, isn’t it? No way the average is 850k when you include sooke and langford. So that’s Victoria, Vicwest, Oak Bay, Saanich, Esquimalt, and View Royal. How many houses are newly built over the last 10-15 years in those municipalities?
…..now that I type that in I consider how many perfectly usable houses have been sold in Victoria over the last few years as lot value. It’s a blessing and a curse really. When a bare lot is $500k, why not throw in granite countertops, hardwood, and an extra bedroom? It’s essentially a rounding difference on your final price tag.
Average Commenter
I’m sorry that I didn’t factor in the inflation rate. I look at pure dollar value for 10 year trend from 1967 onward for single family dwelling, and 1987/88 for condo/town house. To me it look like the price double roughly very 10 year.
The average price could be skewed for the last 10 years or in your case 6 years with inflation adjustment, but I think the new houses being sold are bigger and/or fancier than the past.
Maybe we could get a clearer picture if the data show how many top 3-5% houses are sold compare to the bottom houses, and perhaps the top 10% of the houses and bottom 10% prices are omit to make a more accurate average graph.
My thoughts too @avgcomm, that data shows a rapid increase in appreciation from 2002 on. What would be interesting (and possibly more instructive) is to compare Victoria’s increases vs other major metros in Canada: Vancouver, Toronto, Montreal and Calgary.
@QT, I’m not sure I understand. I’m just eyeballing the numbers from the chart you posted, so I know these aren’t exact, but:
(using: https://www.bankofcanada.ca/rates/related/inflation-calculator/)
1982 – avg house in victoria = 100k
1992 – avg house in victoria = 200k
adjust for inflation = 26% increase in prices
1992 – avg house in victoria = 200k
2002 – avg house in victoria = 300k
adjust for inflation = 28% increase in prices
2002 – avg house in victoria = 300k
2012 – avg house in victoria = 600k
adjust for inflation = 62% increase in prices
2012 – avg house in victoria = 600k
2018 – avg house in victoria = 850k
adjust for inflation(6 years only) = 30% increase in prices
It is interesting that the price chart from VREB shown that this past decade prices hasn’t risen as quick as the previous 4 decades.
The new tax may dampen demand, but it look like prices in Victoria still have room to grow if history repeat itself.
https://www.vreb.org/media/attachments/view/doc/graa2017/pdf/Annual%20Average%20Selling%20Price%20Graphs
It’s unfortunate that the discourse here is devolving into more personal attacks.
If you could, keep distance from these insensitive/rude people, or ask them where were they in their early 30s next time.
Housing is an issue now for sure, when young professionals with good incomes couldn’t afford to live relatively close to work and have to move away in some cases (like in Vancouver).
That being said, people probably do need to make sacrifices when they first start (without support from parents), even with good incomes. I bought my first house here near General Hospital in 1990 with a nice one-bed suite (plus another bedroom upstairs to a student) that covered big part of the mortgage payment (rate was over 10%), I worked in IT near downtown with good income then . My 2nd home was a new home within biking-distance to work in Ottawa. I had a grad degree (and was a single parent) with very good income, but to get to be near work and a nice home, I chose a townhome and rented out a room for more than 3 years.
Things are tougher now for sure, so in addition of housing tax measurements enforced by government, young people may still need to make similar sacrifices as we did, if not more, to start in the housing market?
@ Average, I hear you. I most likely would not be buying in this market. Prices are insane. But…. just before I bought my house in VicWest I had resigned myself to never owning. I was 30, living with a roommate and saving/investing and pushing hard for raises. I got lucky because I worked with a bunch of Leo types so we were analyzing the market at lunch time. Of course one guy had the rent vs buy spreadsheet. It was better to rent. Some though the bubble would burst. Another had a house with a suite and was touting that. It was basically HHV in meat space. I was happy to rent but was looking at VicWest and saying that was the value spot. Then rates started declining rapidly and the window opened. Then the Railyards sign popped up so I struck fast. The house I bought was sitting on the market for months. An unwanted POS apparently. Another window could open, who knows…. But there is no denying the opportunity is thin compared to the early 2000’s.
Average Commenter, thank you for explaining this hot topic even though it was so “common sense” (as Marko loves to say), because everyone in Victoria easily makes $200.000.
Before we all lose our minds on the public sector salaries, let’s remind everyone. 75% of the BC Public Service makes less then 75k/year. And salaries flatten out hard after that.
I work in government(Finance). In my branch of 85 staff we have about 20 people that make over 75k/year. The breakdown of those 20 people are lawyers(4) accountants(10) non-union management(4) and two senior supervisors. And of those 20 people that make over 75k only 2 make over 100k(both are non-union management who are also accountants and have fancy titles).
While there are standouts(BC Teachers have negotiated very well over the last 15 years) salaries aren’t that crazy. And teachers often spend money on their work(because budgets haven’t covered their 50% pay increase in real dollars, they just took money out of classrooms and put it into salaries) and with police/firemen there’s the hazard pay element to what they do.
That looks like a good option for many Marko but it seems like word is out!
I like this:
Is Canadians’ soaring debt too high? Our government hasn’t a clue
While the household burden is at historic heights a ‘secret document’ reveals Ottawa has no way of knowing whether that’s too high
http://business.financialpost.com/personal-finance/debt/no-way-to-know-if-debt-to-income-ratio-has-climbed-too-high-federal-officials
requires an income of $135k/yr
It isn’t too far fetched though…..I went straight from Vic High into the RT program and I was by no means book smart. I had to drop out of Calculus after getting 20% and 24% on my first two tests.
RT Program -> https://www.tru.ca/science/programs/rt.html
Every hospital I did my practicum at offered me a job @ 20 yrs old (not because I was special, but nature of the profession). Never had to do an interview at VIHA…just started working. Tons of overtime. Gauranteed >75k income in very early 20s assuming you jump right into it after highschool. Lots of other careers out there along these line.
Hook up with a nurse/teacher/police officer/plumber/programmer etc…..and there is your household >150k/year income.
Problem is people are trying to “find themselves” and all this other BS and than they end up in their late 20s before they have a half decent paying job.
There is still a road to home ownership but it no longer includes finishing your Bachelor of English at 25 yrs old and then trying to figure out what to do. Unfortuantely there is no “real talk” to kids in highschools. Wish I could volunteer teaching CAAP or whatever it is called…..
Need to sell a house? Use a mere posting.
Need to invest? Stay clear of MERS.
Etc, etc 🙂
Dasmo:
fair enough. Then again, I’d say you likely have the same coloured goggles that plum has. let’s talk about what your starter home in vicwest cost you vs it’s current value(as a percentage of household income). Houses are pretty durable, I assume that house still exists. If you want to make an apples to apples comparison, let’s look at the value of that house now.
It’s true that we don’t dodge bullets very often in Langford(I’m curious how bad the murder rate was in vicwest back then as well) but that crap townhouse in Bear Mountain is an hour’s drive away in normal traffic conditions. What if you were an hour’s drive away from town back then?
And to plum’s original question: “Are these places not affordable for young couples/families? How much cheaper can we build them?” – 6x household income isn’t cheap.
And I truly am sorry if my post seems aggressive(the language obviously is) – I’m not mad. But this is a conversation I’ve had and rehashed so many times. I have staff that have homes in broadmead, brentwood bay, and oak bay and I often get asked by them why I live where I do when I could have so much more(insert eye roll here).
Husband a police officer, wife a high school teacher, but their combined income is just under 200k before the husband adds in his overtime. I wondered if he was exaggerating their income but I looked it up this morning and on average it is pretty well in that ball park.
I must have posted the VIHA over $75,000 list 20 times between 2012 and 2015. The increases in salary are kind of meaningless right now but when the market is flat like it was over a certain number of years it does improve affordability.
Late 2011 was an eye opener for me when a single parent, government employee, bought a 495k house in Oaklands area and rented the basement suite in one day. Home ownership was cheaper for her on a monthly basis compared to the condo she was renting. Throw in that the VIHA over $75,000 list was growing by few hundred employees every year as I am sure other lists were too (BC Ferries, etc). At that point I was like hmmmm…..maybe the market isn’t going to tank.
Our family’s starter home was a 2 bedroom, 2 bath cutie in a neighborhood of heritage and craftsman bungalows, in a very livable medium sized city in the American southeast (with a major university). Our monthly mortgage was $660! Bought in 1999 for $120k, sold in 2010 for $220k, I just checked and it is now worth 306k. The 2008 crash didn’t really affect prices in our neighborhood at all, but maybe the value would have risen faster between 08 and now if not for the US correction. Needless to say, Victoria prices were a shock when we first looked into moving here.
Most people I know played the property ladder and didn’t just buy their dream home out of the gate. My parents did, my good friend’s parents did. They are an excellent example actually. Started with a trailer in Langford (the 80’s langford) ended up with a house on Gonzales. I started with a fixer upper in VicWest when VicWest was considered gang land. My story ain’t over yet so stay tuned on that… anyway point being that a lot of Boomers earned their houses and had to make sacrifices to get them including some crazy interest rates and turbulent times. Yes the playing field has changed for the worse so it is much harder but you gotta play the cards your dealt as they say. So IMO it’s not unreasonable to get attitude back from the Boomers out there that you should lower your expectations for a starter home.
I’m not saying go out and buy. That is an intensely personal decision and the market is sputtering right now so it’s probably a great time to wait. Then again, who knows…. That doesn’t change the fact that hate for the Boomers and all they have aquifered is misguided.
Penguin,
It’s not really even that. To be honest I’m a lot like Josh(and you?) in that I’m in my early 30s, have a healthy household income, and sat on the sidelines for years waiting for the prices of homes to crash. Turns out that lull from 2010-2013 was the crash, and I missed it. Unlike many people here though, I actually gave up last spring and just spent 500k to buy a place in Colwood. I overthought it for years and this time I just held my breath and took the plunge. As is, from the price of some comparables I’d say I’m already up 10% on last March’s price. Yes a 12% drop would leave me underwater(5% downpayment, but 4% is tacked on by CMHC). But I have a healthy income and my mortgage doesn’t need a renewal for 4 more years. I figured it’s worth the risk. And I just had a baby, I wanted my wife to be able to walk around suburbs and parks with a baby carrier and my kid to have a yard.
a few things that got me about that post are:
condescension: suddenly we can’t understand basic math? It’s common in lots of demographics. They see their struggle, forget their privilege, and then jump to a value judgement. I remember seeing an episode of the ‘Dragon’s Den’ tv show where all these moguls describe their hard luck roots and poverty. Kevin O’Leary takes you to an average house where there’s a basement suite he used to rent and says ‘that’s the 4 billion dollar basement suite.’ Of course what he doesn’t tell you is that his dad was a millionaire CEO who gave him 100k in startup capital. Same thing with some of the older folks kicking around here, hey, sure you struggled, but you were also buying at the right time.
complete lack of understanding of the westshore market. The townhouse he chose truly is garbage. No one who looks at the market seriously would ever really consider buying and holding long term. They look amazing from the inside, but the logistics of the area are trash. That 480k condo with $300/mo in strata fees would be unlikely to rent for more then $17-800 a month because it’s location is so ridiculous. Spend an extra 60k and buy a similar(slightly older) townhouse in Royal Bay or spend 70k more and buy an actual house in Happy Valley and you will be getting WAY better value. Public transit that goes into the city, roads that can fit two cars at the same time, schools nearby, services either already exist or are going in. If you go for the townhouse in Royal Bay you get an ocean view and quiet instead of a race track. And the rents show it. You could rent out the bear mountain townhouse for $1800 a month(but it costs 480k+300mo/strata), or you can rent out a Happy Valley house for $2500 a month(that costs 550k+no strata).
finally, take a look at some of the pictures. That crappy townhouse near bear mountain, look at the nursery. That’s a brand new dutailier nursing chair($600-800) and a fancy hardwood crib($800+). These aren’t the starter homes of poor people. These are people with obvious income or access to money.
Average commenter,
You just can’t reason with these people. They don’t care to see your point of view or how these places aren’t nice places to live. In their mind people need to make sacrifices for home ownership. IMO if the sacrifice is living in places like these I’ll happily rent forever and live a stress-free life with a bunch of money in the bank and a nice place to live. Luckily I’m not priced out of getting what I want yet but there’s no way in hell I would live in the places you described.
@plumwine
I guess you got me. Requiring a home that allows me to walk from my front door makes me a snob. Pardon me for asking for some of the simple pleasures allowed by greater generations like yours that got to buy way back in the late 90s.
Or put this another way: your ‘starter’ townhouse. The one that you are not able to walk to and from and overlooks a literal racetrack. It costs 480k. That townhouse represents a 6x modifier of the median household income in Victoria. Say you have median household income in Victoria(about 80k/yr). You are looking at spending 60-70%+ of your household income on your home alone.
You don’t even need to consider that housing prices have doubled(inflation adjusted) over the last 20 or so years. Just consider the ramifications of pricing out your average household of crappy townhouses an hour’s commute from work.
This increases the likelihood that if the banks are afraid of falling prices they will demand their money back, or that the borrower takes out and pays for CMHC insurance, at renewal time as they have the right to do.
CMHC insurance is paid for at the time the loan is issued and it continues valid for the entire original amortization of the loan, regardless of any change in valuation of the property or circumstances of the borrower. The lender does not have to get approval from CMHC to renew the loan for a new term.
THE DARK SIDE OF CONDO OWNERSHIP
If you have the misfortune of suffering a catastrophic loss as a CONDO owner, the results can be a living nightmare.
http://www.cbc.ca/news/canada/edmonton/condo-owners-consider-bankruptcy-as-lawsuits-plague-one-of-fort-mcmurray-s-largest-rebuilds-1.4575589
@Local Fool – “A 10% drop is a run of the mill correction – the bare minimum for it it be called as such. In a sense, it assumes that the previous mania gains were more or less based on sound fundamentals. They weren’t.”
Okay, but house prices in Victoria doubled in about 5 years preceding 2008. That’s why I was expecting at least a 20% drop after the meltdown, which never happened. Was that run-up based on sound fundamentals? I agree that the factors that caused the recent increases are different, but we haven’t had an economic hit (yet).
Holy Sh!t! I don’t know it is a huge challenge to walk up from garage, no sidewalk (death trap!!!), snow-in here Vic. Hell, I didn’t know Bear Mountain is a shithole as you described.
Damn, it must be tough to buy a starter dream home.
@dasmo “Mandate that evalueBC goes to an index system and not a dollar value system. that alone would have the biggest impact on house prices. Notice how after everyone got the letter that their house was worth 20% more asking prices went up 20%?”
An index system sounds reasonable, but I don’t really see the current method as inflating prices. In the past few years the assessments were lagging the market anyway. In 2016 we paid over assessed for our house, and it wasn’t until this year’s assessment that the value surpassed what we paid. Now I see houses for sale in our vicinity are generally priced slightly above assessed if they are in average condition, but I don’t see asking prices jumping 20% from last fall. I live in Gordon Head so maybe it’s different in other areas.
QT
That’s a very impressive ersatz-oriental patois you have. Are there courses for that or do you just like Charlie Chan movies? I only ask because I occasionally drift about downtown passing myself off as a one-star Michelin chef from Nicef but I am getting caught out on my over-enthusiastic aspirates.
We have a similar rate selling below ask (still 25% over ask which is a good chunk). However the under asks seem to be going for further below ask, up to 20%. Previously they were barely below ask. Still well over assessment though. Only 9% in the last week sold under assessment.
LOL. This one had me giggle.
“Are these places not affordable for young couples/families? How much cheaper can we build them?
https://www.realtor.ca/Residential/Single-Family/19155762/404-821-Goldstream-Ave-Victoria-British-Columbia-V9B2X8
https://www.realtor.ca/Residential/Single-Family/19162269/2113-Greenhill-Rise-Victoria-British-Columbia-V9B0J1”
These were examples of good and cheap family properties.
Ummmm, ok. So first, a 2br/2ba is not a family sized property. Especially when you are looking at a cheap wood construction condo lowrise on a busy street.
The 3br/3ba townhouse on the other hand is excellent… on paper. It is recently built, with good materials. Drawbacks:
-bear mountain. Means it’s a 1hr+commute into town on good days. I would choose Sooke over this.
-Overlooking the racetrack means many hours a week listening to screeching cars tearing about a race track(you can hear them clearly from every room).
-no yard either front or back
-up a tight windy narrow private street with no sidewalks. You are required to use a car to simply leave your house. there is no ability to safely walk out of your home. And even if there was there isn’t a sidewalk for about 2kms until you get to the developed part of millstream(this was the deal breaker, I almost bought one of it’s neighbours last year when it was listed at $419k)
-in the winter the smallest amount of snow or ice will trap you
-Only the garage is on the ground floor. everything is a walk up.
-strata
You might consider $480k cheap, but consider after insurance, current interest rates, strata, and utilities you’re probably looking at closer to $2700-2800/month. To live with all those terrible problems. So that means your ‘cheap’ living requires an income of $135k/yr to come out to 25% of pretax income for housing costs.
Again, I know that most people on this blog are wealthy 1%s like yourself. But mere peasants in the top quintile of Victoria household incomes are excluded from owning that crappy townhouse.
3 out of 4 houses in van selling below ask in Feb; 50% below assessment (according to this article):
https://thinkpol.ca/2018/03/16/nearly-3-4-vancouver-houses-sold-asking-february/
Barrister:
Don’t know about being “disingenuous” or “dense”. I am a scientist by profession.
Richard: Thank you, I was not aware that Alberta limited banks to recovering on the house.
Apparently also Sask.
No, Barrister, please stop twisting words. It is not about what you have seen or not, but what you have believed and promoted as below:
DON”
As to sold under or over statistics, the simple answer is that they have next to no value as I suspect that you well know.
“In Canada, you cannot just give the keys of the house to the bank and walk away from the debt.”
Each Province is different. In Alberta if your mortgage was conventional (not CMHC insured) and all your payments are up to date you can drop off your keys at the bank and walk away, so called “jingle keys.”
Correction:
CMHC cover all cost incurred on the on the loan.
Instead of cover all cost incurred on the property.
Add: CMHC cover for the life time of the loan (25 years amortize, etc…)
QT: My actual question is a bit more subtle. If there has been a major drop in equity, in fact the mortgage is underwater, does CHMC have the right to refuse the bank to carry the insurance upon an attempt to renew.
Not generally how it works. If there was some policy tool that could “deflate it very slowly”, governments would use them to prevent housing bubbles bursting dramatically. It doesn’t work.
Even the vast resources of the United States and the trillions of dollars (yes, with a T) they used to try to stave the RE bleeding in ’08 did nothing to help. It’s because markets are a reflection of human psychology. Sheep following herds – people all want to pile in to expose themselves to a rising market. People then bail en masse when it goes sour. They don’t slowly trickle off over many years; loss aversion is a powerful psychological motivation, much more powerful than the greed that drove it up.
It’s why I kind of chuckle when I see people say, “maybe a 10% drop is coming”. A 10% drop is a run of the mill correction – the bare minimum for it it be called as such. In a sense, it assumes that the previous mania gains were more or less based on sound fundamentals. They weren’t. Our regulatory bodies and even the BoC has repeatedly told us this in the last year and a half, albeit in occasionally slippery language.
We’re misguided if we believe we can have 15-50% gains in a year or two and then call for a “soft landing”. Not saying impossible – but don’t count on it.
I love it! 😀 😀
Can someone please explain why the statistic “Sold over Asking” or “Price Slash” are a logical statistic to judge the markets performance? Realtors and their Clients are very subjective? It’s easy to find a 20% discrepancy in what Realtors and their Clients think a house should be listed at. For some reason people think this has relevance. What happens if all the Realtors that list under value in attempt to create bidding war go on holidays for 3 month? Then that under value sale will be gone and the “Sold Over Asking” will be gone. It has nothing to do with the value of a home and everything to do with the subjective value that the realtors and their clients guess their house is worth.
Conversely property assessments seem to be thought of by some realtors as insignificant. Take a look at the value in Vancouver , Land Value far exceeds the Value of the house on it.
From prior posts : LF Spain was in a financial meltdown and Canadian banks would only do business with Two Spanish Banks, No Greek Banks and No Italian banks—It was not the good/bad weather that made any difference.
RE: HELOC’s in Canada , I know many people who have capitalized on this opportunity. They borrow at the going interest rate ( low) and lend at the best secure bond rate( high) they can change this in 1 second. They are smart and will not be in any trouble in a downturn. This is way different then using your HELOC for going on Vacation or buying as Ski boat as what was happening in the USA before their crisis.
Re: Josh and The Sweeping Generalizations, point taken but there have been other generalizations from the Bear side. Other than sensationalist articles predicting a crash , most logical people I know think prices are going up. Some think the increase in Victoria Housing Prices has not even started. Obviously I am bullish .. just an opinion.
“Now I have a question and I hope someone here actually knows the answer (rather than just guessing at it).”
CMHC cover all cost incurred on the property and pay the bank on your behalf even if the owing money is greater than the original loan, however CMHC will come after you for any lost.
http://www.moneysense.ca/save/debt/your-cmhc-insurance-doesnt-protect-you/
Now I have a question and I hope someone here actually knows the answer (rather than just guessing at it).
Does CHMC insurance just cover the original term of the mortgage or does it also insurance the bank for additional renewals of the original mortgage. Does the bank need to get any approval for renewing the mortgage to continue the CHMC insurance. (Specifically, if the mortgage goes into negative equity does CHMC have a right to refuse a further renewal past the original term?)
I know it is a good question but does anyone know the answer?
“As a “bull” you can be right for 10 straight years and enjoy the ride up when your home goes up by 100%. A “bear” only has to be right once in a “crash” scenario.”
Bang on Oops. The warning bells are ringing but the bulls have their earplugs in tight. 😉
DaveJ.
I am now going to assume that you are being disingenuous which is better than the alternative that you are incredibly dense.
Bizznitch: Unfortunately, I suspect that you might be right. Lets hope you are wrong.
Opps:
Well, technically you are right about being hurt in a crash but I have always had a very old fashioned view of a house as a home. I will be the first to admit that it is a bad way of looking at real estate but frankly I always saw it more like buying a car. If I can get my money out of it, after inflation, I am thrilled. If I lose some then I got the joy of living in the house.
Personally, I never felt that I was smart enough to invest in real estate and certainly not confident enough to sleep well at night. If house prices drop fifty per cent tomorrow it wont change my life at all and I wont lose a night’s sleep over it. I do worry about the younger generation and I still regret that my generation in many ways have failed in our duty to be good stewards.
“CPP is based on contributions and OAS on residency. Citizenship entitles you to neither. You have a point about health care though. ”
I’m talking about OAS and healthcare. They are entitle to receive OAS and healthcare once they move back to Canada to live (as long as they have resided in Canada for 20 years of their live).
Barrister I knew all that. People that went for the max. amount of debt shouldn’t be mentioned here at all. Marko has said numerous times that people that he has worked with never went for the maximum borrowing capacity, so they should be fine in case of an underwater mortgage,in the long term. So, again, are you bulls really worried about the first time homeowners or about your “hard earned equity”?
Barrister:
“How to deal with the housing bubble is the real question. The first step is clearly to stop it expanding any further. The second step is to deflate it very slowly allowing a longer adjustment period where salaries and savings can catch up and cushion the drop of prices.”
I doubt there’s going to be a soft landing here. It’s either going to be a prolonged (3yrs or so), or a quick one (<2yrs). I think it’s going to be prolonged.
“I have a cunning plan which could guarantee a promotion to the Politburo. We create a new tax. At the end of every month any of the workers who have more than $2000 in their bank account must pay 2% to general revenue. As it is patent that these reprobates have acquired far more capital than they need we will call this the Hoarders Tax.”
Great plan you have. What happen to commonsense and be responsibility?
Are you trying to say that we should reward people that spend all their money, and punish those who follow tradition that save 3-6 months of cash for emergency? And, tax people more for saving for their retirement?
As you know, our social system already reward those that don’t save, because they will get more money from old age pension, and those that save will get less money from old age pension.
CPP is based on contributions and OAS on residency. Citizenship entitles you to neither. You have a point about health care though.
Also loads of Canadians who work abroad aren’t dual citizens (e.g. in the US on various visas).
Plumwine and swch25…yea, I thought the same especially the backyard. Wow, what a great place to play tag with your kids in the evenings.
“If first time homeowners are not speculators they will be fine in the long run. Why are we so worried?”
Because, it is another step at eroding our way of life and hurt us economically. This is just another tax grab that the NDP is implementing to pay for all the new pet projects/social programs that they are cooking up instead of balancing the budget, reel in government spending, and promote economic growth.
Not if the mortgage is insured, which is everyone who puts <20% down. You will be unable to move to another lender at renewal though.
“As an American family living in Victoria (PRs, working on becoming dual citizens), I just wanted to chime in that the US policy of taxing its citizens living abroad is horrid.”
Many people from all walk of life that are immigrants and or dual citizens feel the same way as you. However, my wife and the rest of my put our money where our mouth is and we gave up our just so we have only Canadian Citizenship.
I’m sorry but I’m quite draconian on immigration, PR, and dual citizenship, because something have to give otherwise it will erode our way of life. I believe that we should open our arms to take those what willing to come to Canada to live and absorb our culture, language, and pay taxes to be able to enjoy our freedom, social system, and benefit from our health care system.
I think it is unfair to honest tax paying Canadian that people including Canadian citizens work overseas who doesn’t pay Canadian taxes or health benefits, but once they are old they come back to Canada and reap the heath care befits as well as old age pensions. And IMHO, stopping the dual citizenship and put a time limit on PR is the first step of protecting Canadian way of life and slow down the out of control taxes.
Dave J.
Let me explain the problem for first time buyers if there is a major crash by way of example.
You bought a house for $500k putting 50k down in cash and taking a mortgage out for 450k.
The market crashes and drops by 20%. The house is now worth 400k but you still have a mortgage of 450k. Basically it is what is called being underwater. If you have to sell the house you will still own the bank 50k (By the way, if you have been following this blog that CHMC insurance that you paid for does NOT insure you but rather the bank for any mortgage loss).
The answer of coarse is not to sell the house and that works fine right up to the point that you have to renew the mortgage. generally banks will renew a mortgage as long as you have some equity in the house. The situation changes if you owe more on the house than what it is worth. Lets just say that if your house comes up for renewal and you are underwater bad things happen.
While I am addressing the basics here let me clear up a common misconception. In Canada, you cannot just give the keys of the house to the bank and walk away from the debt. (This misconception arises because you can do exactly that in I believe 37 US states but not in Canada). If the house is sold and the mortgage is greater than the proceeds of the sale you still owe the difference.
Part of the concern here is that for most young families that 50k down payment represents years of savings. In my example I chose a 20% drop in house prices but even a 10% drop would wipe out a lot of young peoples equity. A major housing crash can effect far more than just than just individual homeowners particularly in an economy such as BC where so many jobs are tied to the housing industry.
How to deal with the housing bubble is the real question. The first step is clearly to stop it expanding any further. The second step is to deflate it very slowly allowing a longer adjustment period where salaries and savings can catch up and cushion the drop of prices.
I know that I have provided a simple answer to a complex question but I hope it is at least some starting point for you.
Barrister: “But you are absolutely right that I personally will not be affected by a major market crash unlike a lot of people on here who are hoping for a crash because it will benefit them regardless of who else it hurts.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
You are actually touching on the worst part of a housing crash, Barrister. The hard feelings have developed over several years by some hopeful buyers and finally those people, that have been shut out of the market, see a glimmer of hope in the horizon.
Most people, as they move through the various stages of their lives, want to buy a home. There never seems to be anyone getting hurt as the bubble starts to develop and there aren’t a whole bunch of people screaming, “burn the homeowner”. Heck most people who couldn’t buy before interest rates tanked were suddenly buying their “dream” homes. Life is good.
That changed when everyone and their dog become “REIN” wannabees and housing got totally out of reach for the first time buyers. Boomers, who should know better, financed 2nd and 3rd properties with helocs to capture that pot of gold for retirement and the first time and move up buyers resorted to ridiculous mortgages to get on the bandwagon. Oh, and Foreign buyers, as well, Hawk. Lol.
Everyone is a genius for getting in at $400,000/$500,000/$600,000 etc. and they are constantly looking for that next assessment so they can “borrow” a lifestyle that they otherwise couldn’t dream of attaining. Is this generalizing? Absolutely, but our debt levels support that generalization more than the financially adept bloggers that live on this blog.
The interesting thing is that a lot of these people can’t help but brag about it to anyone that will listen. Blogs like this provide a great outlet for “bears”. The “bulls” talk about incredible tax free gains and exhort the “bears” to get into the market but when the market does turn they cry foul and tell everyone that “everyone will suffer and why do you want that to happen?” Sadly, each and every time, they are mostly right. A very small percentage of the population will do well.
When the tide turns it gets ugly and I can assure you that only the dumbest of the dumb are going to say, “I told you so.” to anyone in the “real” world. The harder part for the staunch “bears” that hibernate here is that the “bulls” won’t be back for that online .. “I told you so.”
As a “bull” you can be right for 10 straight years and enjoy the ride up when your home goes up by 100%. A “bear” only has to be right once in a “crash” scenario.
There will not be too many people untouched by the upcoming disaster, including you Barrister. You have been on this blog long enough to get a sense of your equity gains and you have been talking about selling your home for awhile. We are both old hands in the real estate market and it never feels good to leave big gains on the table.
Here’s a gentle reminder for all to enjoy.
http://www.vancourier.com/real-estate/twas-ever-thus-vancouver-real-estate-headlines-30-years-ago-1.23198902
Good luck.
“there is no way back to 1950”
I’m starting to wonder. A lot of seemingly intelligent folks here rattled down to one response to points they disagree with: “Must be a communist!”
Local Fool,
And some increasingly desperate bulls.
Money in bank accounts isn’t hoarded, it’s loaned (i.e. rented out) to those who need capital. Directly analogous to renting out a house to someone who needs a place to live.
Hoarding means keeping something unused.
DaveJ.
Great observation. I think the “concern” for buyers is those who over-extended themselves to get in “before it was too late”. But in such cases, the “concern” would have been more believable and useful had it been shared with such buyers before they scrambled into a frenzied market. But, of course, this time would be different. I was close to being one such buyer.
Freedom:
I absolutely agree that is what politicians should be doing but in my experience I have rarely seen it.
Frankly I suspect that what we are seeing is a badly contrived attempt at popular policy rather than good policy that may be going awry. But, I am willing to see where they go with this.
Local Fool, actually there are quite a few that I know of and with high salaries.
freedom_2008
Very well said.
Is it me or are there a few more bears hanging out here lately? Some of them seem…emboldened.
Anybody here with connections to an NDP cell or perhaps even know one of their commissars?
I have a cunning plan which could guarantee a promotion to the Politburo. We create a new tax. At the end of every month any of the workers who have more than $2000 in their bank account must pay 2% to general revenue. As it is patent that these reprobates have acquired far more capital than they need we will call this the Hoarders Tax.
Patriotz:
The factors you have mentioned are correct but the vast majority of the individuals we are talking about are excluded by the so called treaty “tie breaker” tax rules as to residence. In this case the exception is the general rule since we have tax treaties with the vast majority of relevant countries.
I suspect that we have either confused or bored, or worse both, most of the people reading this blog.
Perhaps we can both agree that there is a problem here that should be addressed but is extremely difficult to address (we have not even broached the issue as to the extent that Federal international treaties can constitutionally limit the provinces taxing powers). How does one spell dog’s breakfast again.
If first time homeowners are not speculators they will be fine in the long run. Why are we so worried?
I have lived long enough to know who I am and I don’t care what you (or anyone else) do or don’t suggest about me at all. I just don’t agree with your opinion that an elected politician should “be focusing on how to expand voter base and the number of seats in the next election”, rather than focusing doing governing work.
I would like to know why is so bad for first timers if the prices go down? You all have said that real estate is a safe long-term investment.
@plumwine great point. Im surprised at how nice those places are. Yes, it would be a commute into the city for work. Every place had trade offs though – even those over 1 million.
Freedom:
It is what lawyers ask when politely dealing with people who they are pretty sure dont have any idea what they are talking about and have not thought something through. Not that I am necessarily suggesting that you dont.
Victoria:
What a nasty little piece of work has developed in your heart. No, due to personal tragedy, I dont have kids although my wife has two that are as close to my own as possible.
Most definitely I have said that there is a lot of money from Vancouver retiring and buying in Victoria. That is because there is a lot of money moving to the island. it is called a fact not some type of opinion. Or are you suggesting that there is a bunch of poor people from Victoria suddenly buying 1.5 million dollar houses in Victoria.
And whether you like it or not, I actually do care what happens to the younger generation particularly the ones who have scrapped up a down payment for a condo or a house on the west shore. i am also concerned about young families that would like to be able to build a future. Just to make my day worse I am starting to get concerned about the level of intelligence and what it may say about the education system here but I will leave that for another day.
But you are absolutely right that I personally will not be affected by a major market crash unlike a lot of people on here who are hoping for a crash because it will benefit them regardless of who else it hurts.
The most important thing to consider when determining your residency status in Canada for income tax purposes is whether or not you maintain, or you establish, residential ties with Canada. Significant residential ties to Canada include:
a home in Canada;
a spouse or common-law partner in Canada; and
dependants in Canada;
https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/information-been-moved/determining-your-residency-status.html
Once and Future:
I actually do understand our tax system and, I apologize that I made my comments assuming that you do understand the system and were reading my comments in context.
The issue that I was addressing was so called satellite families. You are correct that we tax all Canadian residents on their world wide incomes. The operative word is “residents of Canada”.
The second point that one has to bear in mind is that we dont tax family units under present law but individuals (this is different than deductions for an individual based on dependent family members).
The issue on hand arises from the fact that the income producing spouse is not a resident of Canada
while the family here because the Canadian resident spouse has no income does not pay any income tax while drawing upon services such as health care and education.
It has been proposed that we impose some tax based on the non-residents income in this situation.
It is important to note, as correctly stated, that the non resident spouse who is working abroad is not a resident of BC and often not a resident of Canada and at the moment is legally not subject to any tax. Frankly I find it difficult to fashion a practical solution in identifying and taxing these so called satellite families other than forcing all Canadian citizen living abroad to file an income tax.
For all the wonderful people on line here who leap to assumptions with little or no thought might I remind you that my wife is a natural born American citizen and, yes, even as we speak she is actually upstairs staring on filing out her American tax forms. And yes I am really aware of the problems and inequities caused by this type of tax and there are indeed many inequities in its application. My comment though was directed upon the so called satellite families.
Thanks for the reply Barrister. Sorry haven’t read here for a few days.
We talk about affordability, homes are too expensive for 1st time buyers….
30 seconds on MLS. I found
– 2 bed/ 2 bath top floor for $310k;
– 3 bed / 3 bath townhouse under $500k.
The insides are move-in ready and nicer than most houses in the core under $1M.
Are these places not affordable for young couples/families? How much cheaper can we build them?
https://www.realtor.ca/Residential/Single-Family/19155762/404-821-Goldstream-Ave-Victoria-British-Columbia-V9B2X8
https://www.realtor.ca/Residential/Single-Family/19162269/2113-Greenhill-Rise-Victoria-British-Columbia-V9B0J1
This spec tax does nothing for affordability and it was a failed attempt at appealing to the vengeful millennial’s. I’ll say it again…. Mandate that evalueBC goes to an index system and not a dollar value system. that alone would have the biggest impact on house prices. Notice how after everyone got the letter that their house was worth 20% more asking prices went up 20%?
Change the building code to allow for less expensive building, mandate an up-zoning target for cities where the biggest problems are, remove dollar values from evalueBC, introduce financial transparency into all building projects making their books open to the public. introduce a temporary foreign buyer ban in key cities.
Instead we continue to make building more and more complicated and expensive, we spot zone everything making the process cumbersome, uncertain, unfair and lengthy, we tell everyone there house is worth 20% more this year and then say we have an affordability crisis, we prevent people from building their own homes, and now we will tax the sh*t out of anyone who happens to have a second home, and will further increase the cost of construction buy having the government build mega projects….
B……….S………
“To all those real estate bulls and pumpers out there….
Did you really think that interest rates would stay low and house sales and prices were going to go up forever? Like really? And I am honestly asking.”
Charlie,
They’d rather bicker about the Green/NDP new rules for greater fools, and how they’re praying for their demise so fat-ass Coleman can come back and shut down the casino/real estate money laundering investigations like Trump wants to shut down Mueller. Ain’t gonna happen.
Meanwhile Rome slowly begins to burn with red lights flashing everywhere.
Nice place in Cordova Bay slashed $100K to $1.25 mill.
Weaver is playing on both teams. Complaining and supporting. Complaining and supporting. That will only work so long. If his party is going to be taken serious outside of this Island, he needs to be something other than an NDP clone and supporter. The only seat that is safe is his own. The other 2 could go NDP very quickly and say goodbye to all the goodies the NDP just gave him. One thing about Weaver he is not stupid so he will do what he needs to do politically to prosper. Seeing the NDP crash and burn is a good way forward to that.
Barrister,
Is that what lawyers do: to throw out a vague question for cover themselves when they can’t answer a pointed question?
To answer your question: I am not an economist and I don’t have an ideal target for housing price either. But I (and most other people in BC) know that government has to do something to help fixing our housing issues. These new tax measurements are definitely not perfect, probably has collateral damages, and will be improved over time, but they are a good start for now.
For me, a government doing something on the issue, small or big, perfect or not, is much better than any selfish politicians who are only focused to get more votes.
What he said was that he understood that it was not going to apply to BC residents at all based on Horgan’s and James’ documented comments.
http://www.andrewweavermla.ca/2018/03/08/calling-bc-ndp-botching-tax-measures-nonexistent-legislative-agenda/
The paramount interest of the Greens is in getting PR. Forcing another election under FPTP is not likely to give the Greens a better position than they hold today.
Regarding Weaver’s criticisms of the spec tax, I think he’s angling for the NDP to drop it in the Gulf Islands and up-Island where his supporters are, and he’s likely to get this. Likewise the NDP are not likely to put up a fight over qualifying 8 month a year rentals in Kelowna.
Weaver will bail quickly if the economy and/or BC finances goes south. This is a minority government not held together very well. A recall attempt will be held next year against the speaker. 44 to 42 is not exactly a big margin for error for the NDP where 3 of those 44 are looking out for their own interests.
Are you Barrister really worried about the first timers? You are saying, all the time, how rich people are buying in Victoria, especially recently and now all of a sudden we have to worry about those poor people that could afford to through a million plus dollars..It seems that you don’t have much compassion about the future generations since you don’t even have kids of your own, so just let be sincere now and no more pretending. We all know that you are rich and don’t care and all that story you have told us many times so please, enough!
At the time of the article quoted, February 21, the NDP had not released details of the tax. Once the details were released Weaver:
https://www.straight.com/news/1042541/bc-green-leader-andrew-weaver-eviscerates-ndp-government-tax-policies
All Canadian residents are taxable on world wide income. This includes anyone resident for over 183 days a year regardless of immigration status.
The American model is to require all citizens regardless of residence to file US tax returns, although a non-resident making under $70K or so isn’t taxable and those living in places like Canada will get a foreign tax credit.
Barrister, we do tax worldwide income for Canadian residents. There are tax treaties that allow you to get a credit for taxes already paid in some other countries, but you are still obligated to report it.
Foreign-based multi-house owners pretending to be BC resident and reporting tiny incomes is a failure of enforcement, not a failure of the law.
What the USA does is an abomination. If you were born in the US and moved to Canada at age 2, you still are under their thumb. Do I care if a Canadian moves to France and lives and works there for the rest of their lives? No, and I don’t think we should tax them, either.
From your comments, I don’t think you really understand either our tax system or creepy uncle sam’s.
Here is what the “green guy” had to say about the budget. He said plainly that the NDP did not go far enough.
“It’s clearly a budget that’s meant to put people first and correct some of the perceived wrongs that have happened over the last number of years,” BC Green Party leader Andrew Weaver said Tuesday. “We are very pleased to see a recognition of the housing crisis that’s there. The steps that are brought forward are welcome first steps.”
Weaver was concerned that the foreign buyer and speculation taxes would only apply to specific areas – namely Metro Vancouver, the Fraser Valley, Kelowna, West Kelowna and the Nanaimo and Capital Regional Districts.
https://globalnews.ca/news/4037476/bc-budget-greens-support/
They’re not, there’s a whole set of other measures dealing specifically with “dirty money”. Why not read about it, the links are posted on this forum.
Freedom:
I am curious, what percentage drop in house prices is your ideal target? (Just ball park).is there a point that you think might create either too much hardship on first time buyers or a point where the job losses in construction might get too great. Since government revenues will decline with lower house prices where should the government income shortfalls be made up?
I am not arguing against a correction but rather wondering what the target decline should be.
Comrade Horgan got to play house for a year. He needs to go now before he destroys this Province with permanent damage. Hopefully this speculative tax will be the start of the end for the NDP. Will not take much to send the economy into the toilet. At that point the green guy will have to separate himself from any ndp disaster. Here’s hoping.
Barrister,
As an American family living in Victoria (PRs, working on becoming dual citizens), I just wanted to chime in that the US policy of taxing its citizens living abroad is horrid. I believe the US stands alone in this policy (Eritrea sort of does this, but not to the same degree), which is abusive. The yearly declarations of all our Canadian bank accounts to the IRS, with the potential fine of 10k for each account not properly declared is a nightmare.
Please tell me, If elected politicians only focus on being re-elected, then who will be doing governing???
People vote to get a government to govern. If they do right thing to help the housing market (even if it will impact our own house value), we will vote for them again (our whole family voted for Green last time) .
Sidekick….lots of changes to the program over the last decade or so. I have not heard of that book before but it looks like a good read. Gonna get it. Cheers.
Lief:
I am not near, or affected, by the chicken farm. This obviously is terrorist campaign of harassment that is being waged by this women. Moreover this is not the first time she has reverted to these types of tactics. Her behavior is totally outrageous.
I believe that she also owns a tile and carpet company according to the TC; personally I will make sure never to do business with her.
He’s part of cabinet so naturally has some influence. And of course his ministry is involved with every new piece of legislation, albeit more in the legal sense rather than whether something is good or bad policy.
Also this is a government where one or two disgruntled backbenchers could bring the whole thing down so Horgan has to ensure that his policies have support or acceptance from the whole caucus.
A 10% or 20% drop in values will wipe out a lot of peoples’ total equity especially first time buyers. This is a difficult political balancing act in that the people you benefit will still feel you have not done enough while the people you hurt will never forgive you.
People shouldn’t bank on an asset always rising in value and plan accordingly.
I think there may only be a handful that actually do feel that way about real estate. Almost anyone I talk to in the real world (off this board) think it will only go up. I know about 4 or 5 of us on this board all waiting to buy but calculating this factor in which has put us on pause. As people pointed out this may be detrimental to our overall ownership or it may not. Only time will tell.
Sweet Home:
All the points that you are making about a person on a single income being able to buy a house fifty years ago are true. The only thing you left off is that people are paying a much higher portion of their income in taxes.
For better or worse, it has taken a double income for most people to buy a house for a very long time.
Buying a house is still basically an auction. All else being equal, you will be outbid by the person whose spouse is working and can bid with that second income. House prices, not surprisingly, rose pretty dramatically as two income families became the norm. Some might argue that most of the extra income of a working second spouse has simply been absorbed by the housing market after the cost of child care are taken into account.While an interesting academic argument the fact of the matter is that there is no way back to 1950 where the average single income could both buy a house and support a family.
The other factor of your example in Arbutus is simply population growth in the city. Sooke is now the outskirts of Victoria whereas Arbutus would have been the outskirts before.
My original point, though, is whether house prices are actually as detached from local incomes as some suggest. That they are detached is not disputed but perhaps not as detached as some would suggest. I am not a stats guy but it would appear that public sector jobs, in Victoria, when one includes pensions, may have overtaken private sector jobs in many sectors of the local economy.
I am not denying the major impact of Vancouver money on our market but rather suggesting that its effect might be a bit over rated.
Barrister are you near the 100 chickens going into Rockland 😉
http://www.timescolonist.com/news/local/rockland-coop-d-%C3%A9tat-neighbours-worried-about-plans-for-100-chickens-1.23203551
I believe as well they are doing this to be a problem then allow for rezoning.
Pretty sure. I don’t remember the course but I think 3rd or 4th yr. Would have been ~97?
@Andy7
“the dirty money and the foreign money being parked into real estate that then just sits there empty,”
I addressed the “empty” house situation, as for “dirty” money, that is a completely separate issue and has nothing to do with a “Speculative Tax.” There’s the problem, trying to address both issues with one tax.
100 chickens coming to Rockland by this weekend it looks like ahead of the bylaw change. Story in the times colomonist. Property has an interesting past. Presently a room house for low income people. The property has been rejected by council for rezoning in the past.
Patriotz:
I was not referring to satellite families in terms of immigrants but rather the tax on cottages and second homes. As matters stand, just by way of example, a family moved to Victoria four years ago and bought a house downtown and a small condo in Vancouver because the wife works four days a week in Vancouver. Should they be treated differently than someone who was born in BC and has lived here for thirty years?
As for Satellite families, I agree that taxing them is extremely popular. I am at a bit of a loss as to how to implement this tax fairly. Perhaps we should follow the American model of taxing world wide income for BC residents (we would have to exclude income earned and taxed in the rest of Canada otherwise we would run foul of Constitutional issues). Maybe somebody can suggest how this type of tax could be drafted and implemented (short of creating a bureaucracy that costs more than it collects). Initially, I thought the simple solution would be if your property tax was more than your income but then I realized that would capture a a very large swath of legitimately retired people who are living off capital rather than interest. I am not saying it cannot be done but I am at a loss as to how to do it.
I’m not sure this tax is super popular now that more details are known. Seems to be a lot of opposition to it in areas outside of Vancouver and perhaps Victoria. Maybe if they rework some aspects it would be.
Yes he is, and it’s about time:
“Exemptions will be available for:
– Principal residences (excluding satellite families)
– Qualifying long-term rental
– Certain special cases
Q. Will satellite families have to pay the tax?
A. Yes, satellite families will be required to pay the tax. We will be collecting information from home owners to identify families with high worldwide income. These families will not be eligible for the up-front principal residence exemption. To the extent that they pay tax in BC, they will still be eligible to claim the income tax credit.”
And for those who think this is a “quagmire” – this is one of the most popular policy moves any BC government has ever made. The opposition is coming from the RE industry, those with interests tied to the RE industry (i.e. continued high prices and rents) and the 1% or so of BC voters who would be directly affected – many of whom are using their “second homes” for illegal short term rentals.
David Eby is the AG. He had a lot to critique about housing prior to being appointed but he has a ft job as AG and his ministry doesn’t formulate or weigh in on tax policy. He would deal with money laundering strategies though.
To all those real estate bulls and pumpers out there….
Did you really think that interest rates would stay low and house sales and prices were going to go up forever? Like really? And I am honestly asking.
CREA Now Expects Real Estate Prices And Sales To Fall Across Canada In 2018
“Real Estate Prices Expected To Fall Across Canada, BC, And Ontario”
“Canadian Home Sales Are Expected To Decline”
“Yes, even real estate crazy BC is expected to see home sales decline. CREA is forecasting 2018 will close with 92,400 sales, a 10.95% decline compared to the year before”
https://betterdwelling.com/crea-now-expects-real-estate-prices-and-sales-to-fall-across-canada-in-2018/
@Leif
I totally agree.
@Barrister
I think the NDP threw too much into the fire at once. I think they should have started with the FBT (even though I think it’s sort of useless) back in the fall, waited 6 months and then moved on to other measures/taxes as needs be. Waded into the pool to acclimate the public to these new measures rather than jumping in all at once.
@Richard
That might help decrease flipping, but it’s not going to do anything to stop the dirty money and the foreign money being parked into real estate that then just sits there empty, destroying neighborhoods, jacking the market prices and messing with our housing stock, forcing people to move away because they can’t afford their original city anymore, which then puts pressure on the new area, rinse and repeat. Do I agree with other Canadians buying properties in hot areas and leaving them empty? If our market wasn’t a mess, it would be fine, but considering our housing market is a total disaster, I don’t agree with it.
@Barrister “Husband a police officer, wife a high school teacher, but their combined income is just under 200k before the husband adds in his overtime.”
$75 – $100K a year when an average house costs $800K is not a lot. That still makes a house 8 to 10 times one person’s annual income. I know someone now in their 80s who was a teacher and was able to afford a house in Arbutus on his salary alone. His house is now over $1M.
So, at best, it now takes the income of two people working full-time in better-than-average paying jobs to buy what a single person could 50 years ago. Also, childcare costs could eat into that second salary quite a bit.
House prices have tripled in Victoria since the turn of the century. Whose salary has gone up that much? Yes, interest rates have come down, but if it takes you 35 instead of 25 years to pay off the house, when do you save for retirement? The police officer and teacher I believe have defined benefit pensions, but those are gone for the majority of people.
Eby IMO has been on top of this for a long time and wants to see the change. I look forward to what he brings 🙂
Once and Future:
Even Elby comment is fraught with political danger. It implies that people who are not lifetime residents of BC might be taxed differently. How many permanent residents are there in BC who have moved from Alberta or other Canadian provinces are there in BC. Is he going to be attacking immigrants to Canada as well. The political reality is not just that the NDP has a one seat majority but that there are a substantial number of ridings that were marginal wins. Elby doew point out the pitfalls but seems to ignore that this is not only a political minefield but one also best not entered into in the first place.
Leo S
He just stated the obvious that to make real estate truly “more affordable” you have to drop house
values. A 10% or 20% drop in values will wipe out a lot of peoples’ total equity especially first time buyers. This is a difficult political balancing act in that the people you benefit will still feel you have not done enough while the people you hurt will never forgive you.
From a purely political perspective this has been badly handled. The icing on this cake is calling it a speculator tax and then being forced to admit that it has nothing to do with speculation. That is the sort of cynical deception worthy of Christy Clarke. To do it while balanced on a one seat majority propped up by a coalition seems reckless. Note that I am not arguing as to whether this is a good tax or a bad tax but rather was it a politically sound move. Personally I would have advised them to announce the FB tax which has at least popular support and an additional tax on present foreign owners and left it at that for the moment. There are a number of indications that the market is already starting to slow or at least level out. The last thing I would want as the present government is to be blamed for a major housing correction. The fact that this tax might only have a minor impact on a correction is not relevant to the fact that the present government would be blamed for bursting the bubble. I appreciate that after approving Site C and then appearing to back down on the pipeline that the government felt a need to have a big “win” on housing.But between the foreign buyer tax and the announcement of building thousands of affordable housing units this speculator tax was a bridge too far that could end up hurting the party. If they really felt that they had to go that extra step it would have been far better optics t go after units that are being exclusively used for AirB&B.
If I was Horgan I would be focusing on how to expand my voter base and the number of seats in the next election and I dont see how this tax will add to his voter base.
I would not want anyone to post their home address on such a public forum. However, if you stare hard at maps and know victoria, you may be able to figure it out.
Average Commenter, that is my understanding as well.
Found a commentary by David Eby (undated):
http://davidebymla.ca/newsletter/issue-update-speculation-tax-housing-action-2018/
This is the only clear acknowledgement I have ever seen of the NDP taking issues seriously:
While some of these NDP moves make me very nervous, I have to say that Eby has consistently impressed me. I hope that he has a real hand in making these taxes fair. I am not so sure that the rest of the cabinet is as level-headed.
Is it not time to cease labelling this excrescence a “speculator tax”? Since not even the most florid lefty could offer any cogent reasoning in support of that incendiary moniker, may I propose that we begin to call it the Shameless, Half-baked, Ill-considered, Two-residence tax?
The acronym would then provide a modicum of accuracy as to the provenance of this bold new policy.
“Our property values here will decline,” Veenhof told All Points West host Jason D’Souza.”
I don’t understand how people can say complete nonsense like that. Yes, if you want to make the market more affordable that means pieces have to decline. The idea you can address affordability without impacting people’s equity is pure fantasy.
Nanaimo wants out of the spec tax too:
http://www.cbc.ca/news/canada/british-columbia/nanaimo-speculation-tax-ndp-1.4578857
Great idea. I don’t know why they just didn’t do this in the first place. Strikes me as a cynical move to called it a “spec tax” to get public support behind what is actually just a tax grab having little relation to speculation in most cases.
The “Speculation Tax” is descending into political quagmire. For a government hanging by a one or two vote coalition majority if they want any credibility they need to simplify and simplify fast. KISS
How about; ANY sale that takes place within one year of the previous ownership, 50% of profit goes to the Province and 25% if within two years. This in addition to any RCA obligations. Forget about rental requirements, principle residence, residency, or paying BC taxes.
2nd; Give municipalities their individual right to impose a “Vacancy Tax” proceeds payable and collected by the individual municipalities.
END OF STORY!
Hey Sidekick Spliff….you sure about that? Second year course? How long ago?
In Vancouver this week, hence the lack of post. Cool sustainability tech at the GLOBE forum.
“The Coming Plague” (https://www.amazon.com/Coming-Plague-Emerging-Diseases-Balance/dp/0140250913) used to be required for all Biochem/MicroBi undergrads at UVic. Eye opener.
Is Dasmo’s new home build location public knowledge? If so would appreciate address.
Bingo & Once and Future
PTT is currently only triggered by transferring a title at the land title office. If company 1 owns 10 properties, and company 2 buys company one, then company 2 would own all 10 properties. However if company 2 keeps those properties in company 1’s name then no PTT would be triggered.
If however, company 2 bought 10% of each of those 10 properties from company 1 then company 2 would pay 10% of the PTT on each of those properties.
“A toy example: BigGas owns 10 gas stations around BC and is owned by 5 people equally. A new investor buys out 3 of the 5. I have never seen information that says BigGas has to declare a change of ownership for the land it holds and pay PTT.”
-If no change in ownership occurs on title(and it wouldn’t in this transaction) then no PTT is owing.
This is a common tax planning process. For now…
Local Fool, you had me laughing for quite a while with your post.
I am certain that many people would consider me an oaf!
If you prefer to be more charitable but still lazy, you can also try o&f. It doesn’t have the same ring to it, though.
Tip line is interesting and definitely needed. The complaints process before was way too complicated.
If anyone is looking for an interesting read try “The Great Influenza” by John M. Berry. The library has it. Just be prepared to have a chill put up your spine. You will never again think that “it is just the flu”.
And, for the cynical, another outbreak would certainly drop house prices.
Introvert:
What a shady real estate agent in Victoria; not possible. Tell me it is not so. Victoria is so quaint.
http://www.cbc.ca/news/canada/british-columbia/real-estate-agent-tip-line-bc-1.4578301
@LF – once the bridge finishes the construction of the WWTP ramps up. That should keep us all complaining for years.
It is tragic. There is a lot to be said for proven technology.
Once the bridge is done, we’ll have to find another topic. McKenzie admirals interchange perhaps. Speaking of bridges, a certain engineer/contracting company in Miami is about to get a scolding. Tragic.
Harp Echo,
Our house assessment in 2018 is about 50% higher than in 2016 without any work done. It will likely get more if we sell now and we are in pseudo-core area only. So sorry, purchase history in core area from two years ago, is just that: a history that went by and gone. These buyers were probably more worried about other buyers in the current market.
Does anything other than the weather actually happen here? We did get to talk about the new bridge for about ten years.
Renters come out ahead with a peaked out affordability index. Any renter with a decent job who has ambition can invest smartly and come out ahead in these bloated conditions.
“Owning a home used to be a great way to build wealth, but that equation is turning. It may, in fact, be more lucrative to invest your money elsewhere.
As home prices rise quickly and mortgage rates threaten to increase, the rent versus buy equation is tipping toward rent, according to an index from Florida Atlantic University. It factors in home prices, rents, mortgage rates and alternative investments that create wealth. Essentially, it calculates the wealth accumulated when owning a home compared with the wealth accumulated when renting the same property and investing the down payment somewhere else.”
https://www.cnbc.com/2017/06/09/rent-dont-invest-your-money-in-a-home-mortgage-says-a-new-report.html
29 new 2 bed 2 bath condo listings city wide in last few days. Most in a long time. Ahhh, the joys of spring real estate spec tax dumping time after 4 months of just about solid rain or crappy weather. 😉
https://www.curbed.com/2018/3/13/17111548/housing-market-us-household-net-worth
Weather and real estate, I’ve noticed.
Introvert
Victorians LOVE to talk about the weather. You’d think nothing else happens here…
Quintessential Victoria: arguing about whether our weather was best or second-best on a particular weekend.
People kept prying my situation and decisions and I stupidly kept providing answers. Wasn’t meant to be a brag and I don’t think I can call myself successful yet. But ya, mostly accurate 😛
I went to a house warming party for a pair of local teachers last week and was pretty surprised to hear what they make. I’ve always heard my whole life about how underpaid teachers are but on average they’re making roughly the same average as local tech workers. Maybe a bit more.
Dasmo, that house is looking great!
It wouldn’t. If they were condos, they could be added to the long term rental stock but it seems it just a hotel. Posting those was just meant to combat the idea that AirBnB’ers are all sweet couples who are “just trying to pay the mortgage”, and not point out bad actors. That’s for later!
I haven’t bought before so I feel like getting an agent is most likely. If anyone has advice on representing myself, I’d like to hear it. I’m under the impression that many agents do a very poor job giving sound financial and market advice and don’t provide a service that’s worth what they get paid (esp. with current days-on-market).
Luke
Yeah, yesterday was awesome. Probably the best in Canada ;). Day before was great too and today is shaping up to be pretty awesome. I’ve gotta get off this computer and outside.. just a few things to wrap up for the day.
We get less rain than Vancouver and Vancouver gets than Seattle. So it’ll often be the case we get lingering sun and they are back in the grey (gray if you are in Seattle.. might as well stick with the pedantry).
Alex’s misguided attempts to attract foreigners along with claiming no “PPT due”, I guess that’s vacuously true since there is no such thing as PPT.
If he meant PTT.. the buyer had best take a look at BC Government as to say about when it’s due.
And if the buyer is foreign they may want to read about Additional Property Transfer Tax for Foreign Entities & Taxable Trustees. What matters is that you are foreign and acquiring an interest in a property.
Realtors tend to not know much about tax law so they really should avoid giving their opinion. I was talking to one who both him and his client thought capital gains weren’t due when they were…
Barrister,
Are those four houses in rock land that sold to the Quebec investor immigrants designated heritage as well?
I thought the Quebec investor program has been canceled/stopped, am I wrong? Or are they still punching more people in through that program?
I was hopping the price at James bay to go down, but looking at the sold price at 583 Toronto st, I was very disappointed.
Josh,
I have checked out the Airbnb links you posted, all those 10 units are condos in the same building. Even if they all come back to the selling market, how is that going to improve the SFH inventory in James bay? And it looks like they are quiet established in Airbnb, doesn’t looks like they will come back to the selling market any soon.
By the way Josh, are you planning to get a buyer’s agent or just going to represent yourself when buying?
“Still couldn’t understand why would anyone pay for that price at 583 Toronto st, don’t buyers check for purchase history before they buy?”
It’s called “dumb money”. Happens at the end of every cycle.
583 Toronto st in james bay sold for 950k! It was bought couple years ago at 590k! Why would any one pay for that price?! 209 Ontario in james bay sold recently at 756k with much bigger lot and the same south facing backyard. I thought 756k for 209 Ontario was way overvalued, now comes 583 Toronto st.
Still couldn’t understand why would anyone pay for that price at 583 Toronto st, don’t buyers check for purchase history before they buy?
“Some years ago, when a similar house on the same street was offered for sale at $440, 000, a customer of mine remarked that he had just looked at a canal side property in Florida for the same price. The Florida property had an in-ground swimming pool with a sun roof, two boat slips each with a power boat tied up and offered with the 3 bedroom house. He asked me: “Have we lost our sense of value here in Victoria?” It’s a question which still rattles around in my brain.”
Sign Post,
I’d say the answer is a resounding affirmative. We’re completely out of touch, but coming rate hikes will clearly reshuffle the deck.
https://www.zillow.com/homes/for_sale/Palm-Coast-FL/pmf,pf_pt/26366_rid/saltwater-canal-_att/globalrelevanceex_sort/30.168875,-80.800324,29.155759,-82.276612_rect/9_zm/
“And what’s with all the 8’s in the price?”
It’s my understanding that 8 is a lucky number in China and real estate agents often do this to attract foreign buyers.
Totally agree about the neighbourhood too. It is unfortunate as there are a lot of families with young kids in the area.
https://www.realtor.ca/Residential/Single-Family/18923890/737-Princess-Ave-Victoria-British-Columbia-V8T1K5
Luke I went to that place on Princess, it was WAY worse than cat pee in Oak Bay 😉
It is Asian owned and it is a rooming house. The house has been split into 3 levels, the house was inspected by the fire department to make sure it was not deemed unsafe. They are renting out each room on month to month. The person who looked after the place was living there for discounted rent.
Whoever buys it has to put it back to SFH since currently it is setup more like tri plex for each level. Downstairs is also illegal height.
Can someone run an analysis for me please.
I am curious if there are more rental homes coming on sale in the past 1-2 months than normal. I have seen lots of what looks to be fully rented homes 2+ kitchens where the photos look like renters in terms of items all over the place and condition of the current house upkeep.
I am curious if this is contributed to people looking to dump rentals due to the speculation tax and or not currently declaring income. I would be curious how the % of 2+ kitchen SFH is over the past 1 and 2 months vs last year?
Wow – 11 bedrooms in what looks like a rooming house. Unfortunately, that part of town near Rock Bay has a reputation I’m sure many on here are well aware of – drug addiction, prostitution, etc, are problems in that area… so… if you want to be a slumlord.
And what’s with all the 8’s in the price?
Yes, Pedantic, and thank you – I learned another new word! That’s two on this thread alone!!
I’ll try to keep ‘brevity’ about this… (that’s the other word I learned) – but apparently that’s tough for me!
On Sat. last weekend we did in fact have the best Temp’s – at Sheringham Point to be exact was the hot spot in Canada that day. OB where I live was only slightly behind Sheringham Point. I remember Astrid or the other hot weather gal on the news saying so, sorry don’t have a link to prove it for you! But, Sat. was the hot spot here – then by Sunday/Monday the hot spot moved over to White Rock or Pitt Meadows as you point out.
So, if you measure best by hottest then on Sat. we were the best. Sunday/Monday the hot spots moved over to Lower Mainland. So, they had us beat those days.
In any regard – we shared great weather w/ the Lower Mainland on the weekend. Then, yesterday you might note – as often happens – the LM still had rain lingering while we basked in sunshine! So there! 🙂
“With developers suddenly putting projects on hold, what does that tell you: they were building for speculators and now they’re not. How about building something families can live in?”
Exactly
Leo S
Worded like that it sounds like you can have a pure interest loan. If you signed up for a 30 year mortgage amort, you are paying minimum payments and the bank’s prime rate goes up… sure as shoot your payment is going up. You don’t get to stretch your mortgage to more than 30 years just because interest rates went up. There’s a minimum amount of principal you have to cover too.
Of course you pay your mortgage off a lot faster than your max amortization, so it’d take a lot of interest hikes to get you to the point of having your payments jump automatically.
Also, I think (with some lenders) you can ask to have your payment jump (iirc I had some check box in my online setting for a previous mortgage). E.g. if you want to target a 15 year amortisation (despite your mortage being 30) you could have it stick at payments that would equate to a 15 year amort. My current mortgage doesn’t have that and changing payments is a PITA (previously it was online, and as long as the payment was within your max and min allowed it’d change effective next payment).
Luke
Oh, I agree (and don’t forget the hummidity in the fraser valley when it hits high 30s.. ughhhh). I’ll take quality over pure heat (I hate heat) but you stated and I quote:
It wasn’t a general statement that Victoria has some of the best weather or the best weather overall in Canada, it was that particular weekend. It it was an absolute “the best” and undeniable even! I’ll take take the 21C in Whiterock over our 17C and I’ll go have picnic at memorial park. The point was it could be denied that we had the best weather in the country on that particular weekend. Pedantic AF, I know, but if you want to debate it then tell me why that particular weekend was the best in Canada in your opinion (rather than moving to goalposts to “victoria has some of the best weather in the country”).
Introvert
Yes, we’ve seen that before. We can all trot that out to everyone that doesn’t live in Victoria so we can show them how awesome it is and explain away our housing prices. Point still stands, Luke made a statement about a particular weekend having the best weather in Canada and that it could not be denied. I simply pointed out in that particular example it could be denied (depending on how you measure “best”).
By my measures White Rock had nicer weather. They too have a nice ocean breeze, beautiful places to visit AND it was hotter (yet still in the narrow band of temps I consider comfortable).
Maybe Luke’s measures include in close proximity to his current residence. Seems a lot of Victorian’s use proximity to their current residence as a factor in deciding Victoria is so awesome.
once and future
My info is from my accountant and it was in regards to holding residential RE in a corp. My accountant scored top 10 in his/her convocation year and is very diligent about keeping up on current tax laws (which is great since I had a bunch of questions about Trudeau’s CCPC changes).
I have zero clue about commercial RE, I have no idea what constitutes enough of a change in ownership.. is 60% enough? No clue (and my accountant isn’t available, and I’m not wasting retainer $ on asking that). Apparently with residential a 100% change in corporate ownership will trigger PTT.
In the foreign owner scenarios it seems this is the norm. Buy RE with corp, sell 100% of corp to someone else so they now own the property. No new rules needed, we just need to track and enforce.
Chyron on the morning news said house prices down 5% and sales down about 16%. Presumably, nation-wide estimate. First bit of bad real estate news I’ve seen in a very long time.
With developers suddenly putting projects on hold, what does that tell you: they were building for speculators and now they’re not. How about building something families can live in?
CS:
I am perfectly capable of dating myself. To be diplomatic I am somewhere between really old and ancient.
Re MacLeans opinion piece: the author fails to point out that the proposed speculation tax is directed at urban areas (although some outlying areas such as the Gulf Islands are included at present). Either he’s so incompetent he didn’t notice or he chose to conceal this fact.
And then he spins a tale of Grandpa’s hand built cottage.
@ Barrister
“… a couple, in their mid thirties, Husband a police officer, wife a high school teacher, but their combined income is just under 200k before the husband adds in his overtime. I wondered if he was exaggerating their income but I looked it up this morning and on average it is pretty well in that ball park.”
That kind of dates you, Barrister. Wages are up a bit since the millenium. In fact, they are up about 50% or a compound rate of about 3.2%, which means that Leo S will be paying a real interest rate of zero percent on his mortgage.
In turn, that means, LF, that the market ain’t toast — yet (maybe). It suggests that folks will continue borrowing to the max and will mostly manage the payments as long as real interest rates stay at zero. That in turn suggests room for at least a 50% rise in prices over the next 15 years. Not that I’d bet on it. Before then, something’s sure to give.
And it’s good to see Patriotz back with comments as incisive as ever.
http://www.greaterfool.ca/
He is in fine form today telling it like it is to people who want to do questionable things.
For VicPD:
https://www.vicpd.ca/benefits-wages
For SD61 (Greater Victoria):
https://bctf.ca/uploadedfiles/SalaryGrids/SD61.pdf
http://www.macleans.ca/economy/realestateeconomy/b-c-s-real-estate-speculation-tax-will-reserve-homes-for-the-ultra-rich/
Thoughts? https://www.realtor.ca/Residential/Single-Family/18923890/737-Princess-Ave-Victoria-British-Columbia-V8T1K5
This is not a nice part of town in which to live. My workshop is 50 metres from this property. Each day that I go to work, I see needles and used condoms aplenty, strewn about. By day, this area is very industrial and noisy, by night it is completely changed and not in a nice way.
Some years ago, when a similar house on the same street was offered for sale at $440, 000, a customer of mine remarked that he had just looked at a canal side property in Florida for the same price. The Florida property had an in-ground swimming pool with a sun roof, two boat slips each with a power boat tied up and offered with the 3 bedroom house. He asked me: “Have we lost our sense of value here in Victoria?” It’s a question which still rattles around in my brain.
It is a gorgeous day out today so I hope everyone is feeling upbeat.
I was talking to a RE agent last night and the topic of affordability came up. He pointed out that he has a couple, in their mid thirties, Husband a police officer, wife a high school teacher, but their combined income is just under 200k before the husband adds in his overtime. I wondered if he was exaggerating their income but I looked it up this morning and on average it is pretty well in that ball park. I am not sure what to make of it but I found it interesting.
This should disabuse anyone of the notion that the East Coast is roughly equivalent to the West Coast in terms of climate:
Small steeple topples in Halifax as winter storm lashes Atlantic Canada
Environment Canada had issued a slew of warnings, saying up to 25 centimetres of snow was expected in some areas.
Agency meteorologist Ian Hubbard said 20 to 25 centimetres of snow was expected in New Brunswick, with up to 40 centimetres possible in some areas.
https://www.theglobeandmail.com/canada/article-lights-out-flights-grounded-as-storm-lashes-atlantic-canada/
Hawk lol
Haven’t all the crackheads turned into Methheads?
LeoS, you really want hookers and crackheads outside your front door at all hours ? As well as your tenant quality who would want to live there ?
land size 1932. How is that possible?
If you want to be a landlord worth a look.
Not a lot of photos which makes me wonder.
“I was sitting enjoying a laté yesterday when a couple of realtors sat at the side of me. One started complaining to the other that his client was very unhappy with him because for the second time deal on a condo he was selling was going to fall through because the financing stalled. It made me realise how lucky I am to be in a position where I am not going to be looking for financing when I purchase a small condo. It also highlighted how many deals are very close to the edge.”
Interesting story Deb. Shows how these things start, drip by drip the financings get turned down as the banks/lenders are now getting jittery. Change is definitely in the wind.
Agree on the rentals too. Friends found a nice place within a week in Fairfield a couple months ago when it was supposed to be impossible, and they even had cats and one wasn’t working at the time either.
Thoughts? https://www.realtor.ca/Residential/Single-Family/18923890/737-Princess-Ave-Victoria-British-Columbia-V8T1K5
Nanaimo now wants special spec tax treatment tho they have a housing crisis as well from speculators and developers. They all want to solve the problem but not actually trying to deal with the root cause: speculation that prices will keep going up forever.
“He said there are already signs developers are hitting pause on local projects.
“Suddenly, the development market is freezing up,” Findlater said in an interview. “The banks are not loaning and some developers are being caught in this already. I’m aware of that. Other developers who haven’t built are just putting it all on hold and just waiting for the air to clear.”
http://www.timescolonist.com/nanaimo-region-wants-exemption-from-proposed-real-estate-speculation-tax-1.23201897
Kinda like a presale then.
Only switching if they pay for everything. TD has all my other business so if they match or beat everything and pay for the transfer I’d switch. Otherwise just leave it.
Charlie don’t surf
That lot is tiny and the house layout is a bit weird. The lot is essentially all paved so the only area to hang out is the front by the main street.
You also pull out into a somewhat blind corner in your driveway.
I guess people do not like to live 30 feet from a busy road. Nice place though.
4817 Cordova Bay Road
Assessed July 2017 – 830K
Original listing Oct 2017 899K
Then re-listed 879K as a New listing! Jan26/2018
Now reduced to 799K
Prime – 0.63 on the variable (2.82%)
or
5 year fixed at 3.36%.
Personally I would go variable all day long given we`ve had a run-up in rates recently (risk of increases is lower then in was 12 months ago).
As far as shopping for a mortgage I 100% dont understand the industry. If you walk into TD, for example, and they offer you 3.36% and youll get the same rate via mortgage broker through TD, but TD has to pay him or her .2% give or take. If you walk straight into the branch there should be a discount, but there isn`t.
Also, have you calculated your legal fees if you switch lenders
“Will shop around to my usual bank to see if they can beat it (TD) and run it by my mortgage broker to see if it’s worth switching but seems reasonable.”
When shopping around for a mortgage rate, offer to take out a credit card from that institution (which there is no obligation to use) or suggest opening a TFSA or RRSP account and that may well earn you a further discount on your quoted rate.
I’ve never been a fan of the Housing Affordability Study by Demographia for two main reasons
1) The report is claimed to identify the most expensive real estate in the world when it covers all of 9 countries.
2) It seems more ideological than factual – set up to support a particular model of urban growth.
Here is a recent critique – obviously this critique comes from an ideological place as well – still an interesting counterpoint. http://www.vtpi.org/ihasc.pdf
LF – that brought a smile to my face
In regards to all the kafuffle over the spec tax, saw this posted on fb and thought it worth re-posting:
Person 1: More homes for the people who live and work here full time
Person 2: Recreational properties as well? Rural properties?
Person 3: Yes, in my community ALL properties are rural, and we have a population of about 15000..and over 80% of the rentals are owned by non-residents and rented as air b&b’s, leaving no long term rentals for the working families in our community. Over the past 3 years I’ve watched responses to rentals of 3 bedrooms or more go from getting 25-30 responses from locals looking for stable housing, to over 70 families looking for housing that is adequately sized and not going to kick them out in the summer for the owners to vacation in for a week and then rent out as a b&b.
Dasmo that house is gorgeous. Lot looks amazing. I will read the blog more but I hope things get better. Sorry about the $ issues.
@Totoro
The 2% spec tax was in the NDP voting platform. There were a bunch of newspaper articles on it as well. It’s changed a bit, but it’s in there, and it’s consistently been in there.
BC voters absolutely did want the housing crisis issue addressed and dealt with, and many could see this tax addressing that.
It’s my belief the reason they’ve done it this way is to go after the foreign funds and to stop people from leaving 1/2 of neighborhoods empty, and using houses as stocks — there’s too many ways to get around the FBT but this should start to put a stop to it. Will they need to tweak a few things? Yes, but give them some time to do that, and write to them and give them feedback if needs be.
May 6, 2017:
source: https://globalnews.ca/news/3428046/bc-election-2017-what-you-need-to-know-about-the-bc-ndp-platform/
Lf – you put a smile on my face 🙂 Since I do care…
For some reason it is… they love it there, like a ‘kid’ utopia! (kind of reminds me of my school back in Eng) Glad to live in a ‘hood like that!
Pretty much what I expected. Will shop around to my usual bank to see if they can beat it (TD) and run it by my mortgage broker to see if it’s worth switching but seems reasonable.
Will go for variable. I just don’t believe rates are going to rise that much given how much society is drowning in debt. Risk isn’t a material factor and chances are variable will be cheaper.
Variable vs fixed that is a difficult one. Probably go with the 5.
Is that offer better or worse than you anticipated? Also, did you get them to lock in that offer?
I never knew that either. Thanks for sharing!
Dasmo
What have I missed about the financial shit storm?
Things costing more taking longer?
Local Fool well done.
That’s a good one.
He makes it very obvious once in a while (as one should).
He’s not new. He just took a multi-year hiatus.
@Gwac, blog link is in my name. A post is there with a bit on banks…. I’m looking forward to being out of this financial sh*t storm!
Had a meeting with the bank for early mortgage renewal. Currently at 2.79% on a 5 year fixed, expiring July.
They offered:
Prime – 0.63 on the variable (2.82%)
or
5 year fixed at 3.36%.
Also here’s something I didn’t know since I never looked into how a variable actually works. When prime increases your payment doesn’t change, just more of it goes to interest. Having never looked into it, I thought your payment would actually go up, but unless prime skyrockets and your payment doesn’t cover the interest that won’t happen.
I was sitting enjoying a laté yesterday when a couple of realtors sat at the side of me. One started complaining to the other that his client was very unhappy with him because for the second time deal on a condo he was selling was going to fall through because the financing stalled. It made me realise how lucky I am to be in a position where I am not going to be looking for financing when I purchase a small condo. It also highlighted how many deals are very close to the edge.
I wonder why people put themselves in that position when the market is so unpredictable. I will just wait and see what happens six months down the road. The rental market is not too tight for people with good references, I found my new temporary home in three days.
Local Fool…well done.
Well, given Once and Future’s post where he characterized a few users, I decided to do the same. It’s just for fun. I’ve made a few digs to a few folks…reciprocal digs are welcome. But if I were you, I’d just scroll past this whole post.
Barrister: What an interesting analysis you have. Thank you. I’m going to go think about this.
Once and Future: Hopefully no one will refer to me by the acronym form of my name.
Penguin: I am Local Fool with kids.
Local Fool: I think I know what will happen next. I’m actually clueless.
Jerry: I stab at thee, with my mastery of the English language and dry wit.
CS: The market is toast. Resist social engineering. Birth control pills and Liberals are a problem.
Charliedontsurf: We’re screwed.
Totoro: If you voice an opinion in a forest and I am not there to contradict you, you are still wrong.
Leo S: I like data. You annoy me, but I will never make that obvious to you.
Introvert: I own an asset rapidly increasing in value; you do not. Ergo, I am smarter and generally better than you.
Number6: Here is some numbers and my analysis. I hate you. Especially you.
Luke: I will tell you in not less than 500 words how it’s different this time. Rejoice and embrace! Also, I care about affordability.
Gwac: Hawk, you’re an idiot. Prices won’t move more than 10% within 5 years.
Hawk: Gwac, you have a brain disorder. Look out below, pumpers.
Richard Haysom: Consultant to Luke, owns a cool hat. Howdy, ladies.
Marko: Here’s some learned and thoughtful market analysis, and pardon me while I drop a few hints here and there so we’re all clear that I’m rich. And smart.
Partriotz: I’m new, but boy am I liking this forum.
Dasmo: Triple pane? WTF, am I made of money or something?
Michael: I don’t tell lies, nor damn lies. Here’s some statistics instead.
Bearkilla: Given the market now, I better make a quiet exit before my foolish posts look even more foolish.
Leif: I speak when I have something to say. I’m basically just a nice guy.
Caveat Emptor: Do you know that I’m real life friends with Entomologist?
Josh: Okay, I’ve done well and I’m successful. I want a house. Can you fools just quit your damn house party already?
Yes, correct. It is a minority government with an agreement with the Greens for support, which is not super strong at the moment, although the budget was passed which is the main thing.
Weaver is not in agreement with the spec tax or payroll tax. https://www.straight.com/news/1042541/bc-green-leader-andrew-weaver-eviscerates-ndp-government-tax-policies
It’s not a coalition, it’s a minority government. The Greens are part of the Opposition. If it was a coalition they would sit with the NDP.
Coalitions are very common in countries with PR, Germany has just agreed to new one between the Christian Democrats and Social Democrats. Less common with FPTP but they do happen, the UK had one not too long ago (David Cameron’s first term) and BC itself had one post-WWII – to keep out the CCF, which had won the most seats.
The FBT was good except for the fact that it caught those with already signed deals which, at the time, I pointed out was unfair and which later they permitted an exemption for.
It was 110% unfair to apply it to unconditional contracts. It’s like they didn’t consult anyone with common sense. Needless to say, I didn’t vote for the Liberals come election time.
Well, I think it will be interesting to see how this tax plays out. But it is easy for me to feel indifferent about it.
Yes.
They haven’t released enough details to even know the policies yet. I think it is fair to criticize what has been released in the hopes it will become better targeted.
It is not about blaming a particular party. That makes me crazy! It is about the specific policies. The FBT was good except for the fact that it caught those with already signed deals which, at the time, I pointed out was unfair and which later they permitted an exemption for. This particular tax stands or fails not on the party but on its own merits, which are obviously lacking. Maybe they will adjust it enough that it will be okay based on public outcry – not sure.
I prefer it.
BC voters were given no details on these taxes other than “absentee landlords” would be taxed in the platform info. I don’t think it is fair to say that BC voters who owned cottages had any idea they would be impacted, nor did folks with Albertan neighbours in rural areas. You simply cannot say voters wanted this particular tax, even the NDP don’t understand it.
Re NDP, who cares? They are in power fair and square and if the population has issues with the spec tax they won’t be re-elected. I think their policies will fail but let’s give them a chance first.
Don’t remember the Liberals being elected on the Foreign Buyers Tax yet they still brought it in so not sure how you can put the blame on the NDP for the Spec Tax.
I voted Green too….it was either Liberal corruption or the NDP drive the economy into the ground. Who thought there would be a coalition……I always thought Italy was the only country with coalitions (65 governments since end of WWII).
None in our electoral system from a who wins the seats perspective . Some in response to to the idea that the current un-elected coalition government has 60% of the seats – but not votes.
Both points are irrelevant really in a system that is not proportional representation, but relevant where we have a minority government and the justification for weird policy is they can do what they want because they were elected to do so when they were not elected at all.
I don’t blame the lieutenant-governor. That was a logical decision. Elections are expensive. Nothing wrong with the current government. Something wrong with the policy or with claiming the party in power was elected to implement this particular policy when they were not.
I think for the spec tax to apply there needs to be an area by area analysis and consultation and perhaps a municipal opt-in criteria along with means testing. Unfortunately, the NDP is basing some of its budget on this tax, and this revenue is not likely to materialize in the projected amount in any event.
Even if we had a minority government instead of a coalition, the spec tax still would have happened. The Greens and the NDP said very similar things on housing in their platforms. I think it’s fair to say voters in BC wanted these measures.
Marko, I just have to say your writing has improved a lot over the years. Cheers!
Not bad for an ESLer 🙂 In the last few years I’ve been focusing more on my Croatian but I always try to pick up new things whether it be language, business, history or geography.
One of my past clients told me about FANBOYS (for, and, nor, but, or, yet, so) and semi-colons so I’ve been trying to use it correctly.
Also drives me nuts in real estate when agents write my client’s lawyer when it should be my clients’ lawyer!
Okay totoro. Explain the relevance in our political system of the fact that the liberals got a few more votes than the ndp. Assuming the same seat totals would it make any difference if the ndp had got a handful more votes than the liberals?
Hint: None. No.
There is no way any provincial government would let a municipality decide whether a provincial tax would apply in its territory. This is a much bigger issue than just the spec tax.
Totoro your points about the policy are perfectly valid opinions about a matter of public policy. I happen to agree with you that parts of the proposal are half baked and could have benefited from consultation.
OTOH your points about the minority supposedly unelected government are irrelevant. Why not blame the queen? It was her representative who chose Horgan and appointed cabinet.
You mean something like introducing the FBT out of the blue and applying it to contracts that hadn’t yet closed? Didn’t see that, but I saw this:
https://househuntvictoria.ca/2016/07/25/foreign-buyers-and-a-market-update/#comments
LeoM
Thanks for the link. Tom Davidoff (UBC Economics Prof and the author of what much of the tax was based off) was the primary guest with a bunch of callers. He obviously supports the speculation tax because very low property tax and high income/sales taxes has led to an environment where people park their money in BC real estate, greatly impacting locals ability to purchase real estate. There was lots of anger from the callers over tourist areas being subject to an unfair tax, and even Davidoff agreed that the are areas which are primarily tourist oriented should not be subject to the speculation tax. Victoria and Vancouver, yes. Kelowna, possibly. Or, he said areas (with a council) could specifically tell the provincial government they want to opt out. Based on the Kelown mayor’s comments, he would be in favor of opting out.
Any bets on whether this is exactly the change the NDP makes?
They are elected and then appointed based on majority vote. Where there is no majority vote and a coalition forms a majority the LG in C can accept or reject the government, otherwise, in a majority vote situation, they need to accept the results or risk revolt.
I’m not trying to undermine the NDP. I am responding to this statement:
They didn’t have that mandate, they were not elected on this platform, or at all, and what local governments think is relevant whether the NDP, Liberals or Greens are in power. I would be making this statement if the Liberals were elected and made the same choice – nothing to do with political parties only policies. Bad policy is bad policy and illogical arguments are illogical. Sound logic is something that transcends politics.
BC governments aren’t elected, period. They are appointed by the L-G based on support of the Legislature. And we know who has the support of the Legislature.
That you are even raising this suggests you are trying to undermine the legitimacy of the NDP. Clinton won millions more votes than Trump and that has zero relevance. The libs won a handful more votes than the ndp – likewise – zero relevance.
Estevan is the new Uplands?
Just as I thought the market soften, Dunlevy happened. DoM 4, over asking, one of the worst lot on the street. Maybe the kids going to Willows school is a big deal.
Hawk, bias is not everything/everywhere/all the time. Good policy is effective and rational, doesn’t matter the party. Liberals had their own ineffective policies and programs like the first time buyers program, as one example. We should hold all governments to the same good government standard.
Last time, I’m not saying they are not a legitimate government.
I am saying this statement from another poster is incorrect:
They were not elected to power based on their spec tax because a) they were not elected to power and, b) the details of the spec tax were unknown at the time. They are a legitimate government, doesn’t mean good government doesn’t involve a good policy development process.
“That is a surprisingly weak argument from you totoro. Just because you don’t like the current government does not deprive it of legitimacy.”
Friends bias has a lot do with not liking it too. Lots of Libs who can’t handle the thought their corrupt princess got turfed. West Kelowna is like every other hot spot with outsiders jacking up prices.
I’m not criticizing the system or the NDP in general, I am criticizing the specific policy.
I don’t have a big problem with the fact the NDP did not win a majority and instead proposed a coalition with the Greens. So what. The only point I am making is that they were not actually elected to power. Not false, just a fact. They were not elected at all, they formed a coalition with the Greens, and the Greens could have joined in with the Liberals instead, and this coalition was accepted by the lieutenant-governor with no requirement for a vote.
I personally don’t mind this, I just mind someone stating they were elected to implement the spec tax which is actually not true.
I like it.
The fact that they might not be operating in a policy direction exactly as described pre-election, while annoying, doesn’t really distinguish them from other governments. They do appear to have implemented a hamfisted taxation approach…kind of a tale as old as the institution itself.
As far as not electing to power, our system doesn’t work exactly on popular vote. Your criticism is more to the Constitution and procedures of parliament. They are currently our rep government whether we like it or not.
SweetHome’s experience is a cautionary tale.
Historically speaking, it’s not that prices never decline in Victoria; it’s that prices have never declined as much as many have reasoned/hoped they would.
It was an airtight case for a local market crash then, just as it is today.
I’m fine with a coalition government and the fact that the Greens agreed to go with the NDP and this was approved (not voted on).
I’m just stating they were not actually elected to carry out the speculation tax as stated below because a) they were not actually elected to power and, b) the details of the speculation tax are not clear even now so they were not voted on.
Province-wide, Liberals won more of the popular vote count than the NDP by 1,566 ballots. And I voted Green for the record.
I think what you’re saying is you don’t like the means by which our system brought them into power. Otherwise at face value, what you have said is false.
Constitutional authority is not the issue, effective policy is. Just because you can drink until you pass out doesn’t make it a good thing to do. Governance is “the process of decision-making and the process by which decisions are implemented (or not implemented)”. Good governance means that policy is formulated with thought and considering:
That is a surprisingly weak argument from you totoro. Just because you don’t like the current government does not deprive it of legitimacy.
BC governments are rarely elected by a majority of voters. Only one government since 1950 in bc was elected by a plurality of voters (Gordo – 2001). Majority or minority in parliament is more or less irrelevant too. Either you have the confidence of parliament or you don’t.
Governments can do what they damn well please subject to constitutional limitations. In this case you have a minority government supported by a 3rd party and together they got 60% of the popular vote. That’s more than any BC government got in at least 50 years.
If someone doesn’t like it they know what they can do about it in 2021. That’s exactly how the system works.
Except it is not the whims of the current council. It is the community concerns about their economy which is very different from other areas. And it is being implemented based on regional maps that include rural and urban indiscriminately – no logic in that – regional does not work. It needs to be more targeted in application or area or both.
For the spec tax to work it needs to be applied regionally not municipality by municipality depending on the whims of current council.
Here’s how I would define best overall:
https://www.weatherstats.ca/
Marko, I just have to say your writing has improved a lot over the years. Cheers!
If you are going to implement a tax you need to have adequate consultation to the point where you are sure the benefits outweigh the costs/impacts. In my view, the NDP government gets an F on consultation and strategic regional thinking here.
Vancouver is different from Saltspring, Parksville or West Kelowna. Owning a family vacation home is not speculation and we should not penalize this. Vancouver was asking for a foreign buyer’s tax. The rest of BC was not. Is it needed? Clearly not everywhere, particularly not against our neighbours and not in its current form.
The current NDP government was not elected at all. They had to form a coalition government with the Greens to get in power. They are a minority government who do not represent the wishes of the majority of BC residents on their own and were elected in large part because the Liberals were not trusted. People want more affordable housing for sure, but not this way.
The NDP government was clearly not elected to implement this particular speculation tax. They don’t even know the details yet.
Because it has nothing to do with their powers, responsibilities, or budgets. The current provincial government took office with a mandate to implement this and what local governments think isn’t relevant. You might recall that Christy Clark sprung the FBT as a complete surprise. The NDP let everyone know this one was coming.
Totoro
NDP cares about its voting base the urban complainers. 🙂
I don’t but I do have friends that live in the area and the reason I’m bringing it up is because it points out that municipalities were not consulted on this and not all of them feel like Vancouver does.
CBC Radio discussion on speculation tax begins in a couple minutes on BC Amanac
Hawk, the Victoria area is very atypical as it saw a large runup from 2000-2008, then essentially flat prices until 2016, and a recent runup since then. It’s too small to visibly affect the Canada-wide average which is what I was talking about.
“West Kelowna has 93% opposed to the spec tax in letters to council and are petitioning the province to be excluded from it for a number of reasons.”
You keep bringing up West Kelowna like you have a second home there. They are all Libs in that riding so no surprises, plus probably lots of vacation spec homes there.
“Most of all, it was because of prices. Prices in Canada hadn’t gone up nearly as much by 2008 as they had before the peak in the US – even BC lagged California. Toronto had only gone up 50% over the 8 years from 2000 to 2008, for example, and that was following a bust in the previous decade. Thus when Harper turned on the taps it was effective at averting a crash. The big price growth in Canada has been since then.”
Patriotz,
I see at end of 2000 a Saanich East SFH average price was $280,916. In 2008 it was $558,062. Now $877,400 as of last month. The move between 2000 to 2008 looks much larger than post 2008.
Well the place by the Fish n Chip shop in Estevan sold… 2438 Dunlevy St listed for $1,349k sold for $1,415k. To be fair – that is one of the best Fish n Chip places around (Barb’s gives them a run for the money though) Guess it’s worth an extra $66k to just run over to Willows Galley…
Looking at the place I can see it has 2 kitchens and a suite – but isn’t that OB? Wait a min… it might even have two suites!? Does Nils know about this? (OB mayor). Now I can see why it sold…
Something about Estevan makes people go bananas?
Finally! Half the homes on my street and probably wider OB have suites already. Will be interesting to see all the details when they pan out…
True, this was a bargain, but everything needs reno’s unless you want to live in the Brady Bunch era.
Marsha? Where are you Marsha? The views looked spectacular from up there though. I’m jealous!
Bingo – hottest certainly isn’t always the best – though to be fair 21C is a nice Temp. However, often in the summer it gets too hot in the Fraser Valley (I lived near there for 9 years), and there is no breeze so you can get smog. Unlike Victoria which I don’t ever think sees smog with our ocean breezes and very rarely does it get too hot here.
Thanks for your response to this QT – enjoying your posts. So refreshing to see some other new people on here too. It’s def. better to have more perspectives than just black avatars.
Along with Ottawa this week, we could also compare to our sister city on the Atlantic, Halifax: This week approx. avg. highs of -2C, lows of -9C and snow in forecast.
Or, how about… Montreal: Avg. highs of -4C lows of -11C! Snow then cold sunshine.
Toronto: Highs of 4C Lows of -7C some flurries and sunshine.
Regina: Highs of -2C Lows of -10C cold sunshine.
Calgary: Highs of 2C Lows of -7C Special weather statement: Snow, freezing rain, risk to travel.
I know where I’d rather be 🙂
This is sad, but don’t they have Gov’t funded care homes in Ont?
My late mother was in a care home here in BC and they took 80% of her income – no more (it went from 70% to 80% soon after the Liberals took over – mean spirited Gordon Campbell also cut them down to 1 bath a week from two!). However, everything was paid for – i.e. prescriptions, TV, food, private room, activities. It was pretty good and run by Island Health.
Doesn’t matter how many assets someone has either, it’s just based on income… so does this not exist in Ont.??
Good to see the new NDP policies are working.
The more interesting question is whether rental restrictions should even be permitted given the vacancy rates. That is a provincial decision that could be addressed by the government.
Bad political move. People who own in rental restricted condos are typically older and go out and vote.
The AirBnb scapegoat is perfect politically as the optics are you are going after some big bad corporation that is causing the housing crisis……..while ignore real issues that may cost you votes.
The point I want to make is that I desperately wanted prices to come down after 2009 since
I was reading HHV and Garth way too much in 2009. The arguments were so good for a correction that instead of buying a one bed+den at the 834 for $264,900 (great deal) I ended up buying a crap layout one bed without parking for $198,900 (so so deal). I figured it had less room to drop when the correction came.
The arguments are still all pretty much the same. I’ve come to the conclusion that the market is impossible to predict and might as well focus on looking at opportunities within the market you are operating in, at least you can control that component.
Came to the same conclusion about the stock market after watching BNN daily for a few years…..the so called market experts can predict **** all. Use some common sense and avoid the 2% MERs.
From Garth
Sad what money does to people and that house asset maybe needed later in life. Some good advice in there. Never have your kids in control of your assets.
http://www.greaterfool.ca/2018/03/13/duty-of-care-2/#comments
Penguin:
I have taken a day to consider your reaction to my relating my experience in Toronto. First of all, electing to rent downtown as opposed to buying a house that involves a commute is a perfectly sensible Plan B. I never meant to suggest otherwise. What I was saying is that what is occurring in Victoria is not particularly unique to Victoria. My point was that while we might see a decline in house prices it is not likely to be a major drop of 40 or 50%.
The impact of the baby boomers retiring here has been more than comment on here as has the foreign money being parked here. What I have noticed in Rockland is that four of the most expensive purchases of houses here have not been either of those categories but people immigrating to Canada through the Quebec investor program. After making some discrete inquires through people I know it would appear that all four purchases were all cash purchases. All four of these houses are being lived in by very pleasant families. They are true principle residences in every sense of the word. Two of the families are comparatively young and it may well be many years before these houses are on the market. My point is that this is just one more reason that prices are less likely to decline.
Penguin, I am extremely sympathetic to your situation because I faced the same challenges in Toronto. Frankly, I am not advocating that you do what I did because if I was smart I would have moved to somewhere like Kitchener or Waterloo and had a much better lifestyle. I am just suggesting that maybe it might be worthwhile to reconsider all options. Josh’s idea of looking at Ottawa seriously, or at least putting it into the consideration set, is actually rather sensible. But, far be it from me to tell you what to do.
It’s not a loophole, it is just reasonable. If you can’t rent your place out because it is prohibited you are not contributing to low vacancy rates. These condos are never going to be part of the rental stock. This means owners have the advantages of living with other owners plus all the disadvantages of not being able to rent if they need to leave for some reason. The more interesting question is whether rental restrictions should even be permitted given the vacancy rates. That is a provincial decision that could be addressed by the government.
Loophole or not, below are the rules of rental restricting strata condos exemption (for Vancouver empty home tax: http://vancouver.ca/home-property-development/will-your-home-be-taxed.aspx):
“Strata bylaw restricting the duration of rental agreement
A strata property may be exempt from the tax if:
The maximum allowable number of units has been reached.
All rentals are prohibited by the strata
The exemption is not applicable to strata units where there is a:
Restriction on the minimum duration of a rental agreement”
The final spec tax might have similar exemption for these condos.
West Kelowna has 93% opposed to the spec tax in letters to council and are petitioning the province to be excluded from it for a number of reasons.
https://okanaganedge.net/2018/03/13/93-spec-tax/
Most of all, it was because of prices. Prices in Canada hadn’t gone up nearly as much by 2008 as they had before the peak in the US – even BC lagged California. Toronto had only gone up 50% over the 8 years from 2000 to 2008, for example, and that was following a bust in the previous decade. Thus when Harper turned on the taps it was effective at averting a crash. The big price growth in Canada has been since then.
I don’t think there is any reason to follow Ross Kay. Leo is a better source of analysis and information for Victoria than he is. Steve Saretsky is a better source of Vancouver information than he is. He has a lot of ego and little credibility as far as I can tell.
SweetHome, I agree with your views on the market.
Highly unlikely. In my view there must be an exemption for this or there could be a court challenge to the legislation as this is unfair to owners. This is likely why this is a reason for an exemption from the Vancouver tax. Anyway, guess we will wait and see.
“Obviously those factors meant that I could take on much larger debt load in the US than in Canada. But that sort of lending environment has other potentially much bigger risks too, the best example being the 2008 mortgage meltdown. Canada weathered that event far better than in the US. (Admittedly it wasn’t just mortgage rules but the financial shenanigans with CDOs as well)”
Grant,
You have to remember PM Harper secretly bailed out the banks on their shaky mortgages back then that many would have been called in to the tune of $113 Billion. By dumping it into CMHC and tax payers backs to avoid what should have been a much needed correction on all those 35 to 40 year mortgages, it will only compound the problem during the coming recession. I don’t see JT being able to pull off the same scam with the massive HELOC time bomb.
No, it certainly wasn’t. I did find it interesting and it expands on an important aspect of corrections that many people overlook.
I haven’t really tracked Kay’s “forecasts” much, but I do know there’s been several events that he mentioned occurring well before we heard anything about it – one of them is the decline in mortgage rate growth, as well as price drops before they are recorded in Teranet. None of it’s magic, IMO, just data.
Another phenomenon he referred to was what he called a “contraction bump”, which sounds suspiciously like a “dead cat bounce”. I haven’t looked at the subsequent data to ascertain whether that occurred in any market since (most) of the exuberance petered off.
3501 Camcrest Pl MLS#:388577 sold for $1,150,000 (Assessed Value:$1,276,000, Price List$1,248,000) and DoM: 3!!
IMO, it is a great bargain.
@Penguin “I’m not complaining about my situation but it is frustrating sometimes. Many of us would just rather rent right now and suffer the consequences. We don’t need a plan B because life is more than buying a house. But it would be really sweet if we could!”
I really empathize with you. The situation you described illustrates that house prices in Victoria are detached from the incomes of local working people. However, this is the case for many cities in the world, and Victoria might have crossed into that category, never to return.
The “old folks” telling their stories is relevant, just to give some context that when it looked like it was foolish to buy in past, it actually wasn’t.
My spouse and I are now in in our late 40s, and we technically could have afforded a house over 10 years ago. However, first the market seemed too bubbly (prices doubled in the 2000s), then we were expecting a greater drop after the 2008 financial meltdown, and then interest rates were supposed to go up and put a downward pressure on house prices.
Anyway, by the time we bought in 2016, prices had jumped $200K in a year. We bought because rents had also gone up, and at our age we could not afford to risk further house price increases.
I look at my sister-in-law who bought a house near the Hillside mall in the 90s for around $250K, and it’s now over $800K. This is a bitter pill to swallow, especially since it took a painful amount of deprivation to save the amount we did, and we never got ahead of the price increases. Along the way I was worried about losing $50-100K, but I ended up losing much more. I say “I” because I was the one with cold feet, not my spouse.
But, as they say, “Past performance is no guarantee of future returns”. The point I want to make is that I desperately wanted prices to come down after 2009 since I felt I’d already missed out on substantial gains. Instead, the good areas and desirable houses hardly budged, and then they quickly skyrocketed. So did rents.
Given Victoria’s climate, the growing tech industry and ability to work remotely, and the relatively small number of houses compared to potential outsider demand, Victoria might just stay unaffordable for younger people with traditionally middle class incomes. Hopefully they get some inheritance from their baby boomer parents.
Certainly the exuberance of the past few years is gone, but I still wouldn’t hold my breath for big losses. At this point, however, if I couldn’t comfortably afford a decent house in a neighbourhood that didn’t require lifestyle sacrifices, I would accept that I was priced out of the market and wait a bit to see how the current uncertainties play out.
That is pure (pardon the pun) speculation. The government has said nothing of the sort. I think if such an exemption is added, it might be limited to existing owners for the reasons you cited.
https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
Sorry for the duplicate posts. Not sure where the glitch occurred.
From my perspective as a critical thinker, I am curious about the content. What is in the glass; water, wine, or vinegar?
and
From my perspective as a critical thinker, I am curious about the content. What is in the glass; water, wine, or vinegar?
From my perspective as a critical thinker, I am curious about the content. What is in the glass; water, wine, or vinegar?
@Harp Echo
I am mulling over selling my property in Fairfield. It is a 13,000 sq ft south backyard lot with an 1800 raised sq ft bungalow. It is rented till end of August.
Barrister,
Thanks for a quick reply. I like that location (in city core) and the size of the lot. The reason that I want a bigger lot is because I want to grow my own vegetables, I like to have a hobby farm and not away from the city. I am not planning to sub divide any lot that I am buying, I just want to live in there and have a family down the road. I feel like a house with 8000 sqft might be too big and too pricy for me, but if you decided to sell the house let me know, I would like to take a look.
Regarding the YouTube link of Ross Kay, even if you find him self aggrandizing, it’s silly to ignore some of the statements he makes simply because of the size of his ego. His interview was not simply “if there is a 30% housing correction we’ll have a recession”.
Leo S, I tried to find Kay’s forecasts as well – from what I can see his website is login protected to clients only. However he does have some research available, such as “Vancouver’s Currency Exchange Ponzi Scheme against Canada’s Housing Bubble” – it’s a rather interesting read about just how much of an impact foreign buyers had on the benchmark prices in Vancouver.
http://www.rosskay.com/vancouvers-ponzi-scheme.html
In general a little research on news articles involving Ross Kay show he has been bearish since late 2016. He pretty strongly believes a correction is already baked in and that attempts by governments to engineer soft landings will not be successful.
In the youtube link he discussed the latest BIS report and interestingly even though he is bearish, he’s dismissive of most of the report, primarily because they are analyzing data from countries and then ranking them together as though each country had the same lending environment. For instance, mortgage debt in Canada vs the US isn’t the same. I know this first hand – my first house was a place I bought in California. I had a 30yr FIXED rate OPEN mortgage. It was incredible when you compare it to what we have to tolerate in terms of lending options here in Canada. On top of that, the mortgage interest was deductible from my taxes, which meant the buying power I had was enormous (and thus borrowing was much cheaper.) Obviously those factors meant that I could take on much larger debt load in the US than in Canada. But that sort of lending environment has other potentially much bigger risks too, the best example being the 2008 mortgage meltdown. Canada weathered that event far better than in the US. (Admittedly it wasn’t just mortgage rules but the financial shenanigans with CDOs as well)
BUT even if he faults part of the BIS report, this doesn’t mean our housing situation is in a good spot. In his opinion, housing prices have been far too hot for too long (stretching out the cycle) and more fundamentally, our reliance on housing is too big a portion of GDP – thus a recession may be inevitable. Further, in any scenario where house price growth slows and goes negative, housing’s contribution to growth will fall, taxes will fall, and overall growth will slow even faster.
So back to the Victoria market, and this is my projection not his: while its fairly obvious that the majority of “regular” house owners are going to stay in their homes even during a price drop, if consumer spending is dropping off (it is), if household debt is too high (it is), if there is a disconnect from the market of what people can buy (definitely), if there are new taxes being introduced to try to generate a soft landing, then the deck sure seems to be getting ever more stacked against continued price growth if not a correction.
This is how I look at: What are you doing? Are you filling up the glass? Then it is half full. Are you drinking from it? Then it half empty. Context matters 🙂
Harp Echo:
We still have to make a final decision as to whether we are selling this summer. The house is in Rockland and the lot is 26,000 sq. ft. The house is about 8000 sq. ft. In addition there is a carriage house. Both the house and the lands are designated heritage and not sub-dividable.
Hi Barrister, you mentioned that you will have a house for sell soon, may I know the location (neighborhood) and the size of the lot? I am currently looking for a house but didn’t see anything appealing/suitable on the MLS.
Hi everyone, I have been watching this blog for a few months and finally decided to register so that I can communicate with others here.
Someone mentioned here earlier that you can buy a rental restricted condo and avoid that 2% speculation tax, I was thinking if this is the case, wouldn’t this become a loophole for money laundering people to dump their money in the rental restricted condos to avoide that 2% tax and still keep the unit vacant. If more and more people doing this, it would push up the price of the rental restricted condos, wouldn’t it?
Steve Saretsky posted this today:
As we know, whatever Van does RE wise, Vic follows as a later date so should be interesting to watch what happens here…
Oak Bay votes in favour of legalizing suites:
https://www.oakbaynews.com/news/council-votes-in-favour-of-legalizing-secondary-suites/
FYI: Saanich considers Garden Suites and Tiny Homes (which meet building code) to boost housing stocks
http://www.saanich.ca/assets/Community/Documents/Planning/Garden%20Suites%20FAQ%202017.pdf
http://www.saanich.ca/EN/main/community/community-planning/policy-initiatives/garden-suite-study.html
Another step towards higher density …
boosy, as far as we know you should be exempt. As Leo S points out, we still don’t know the details of the tax, but principal residence and long-term rentals have been specifically mentioned as exempt.
What QT is mentioning is a change in the school tax (that you already pay), but only if your property is over 3m. The empty home tax will be administered separately from the usual yearly property taxes that fund your city services.
“If we own a principle residence in Victoria, live 100% of the time there, pay taxes there, work full-time, and we also own 3 rental properties – 1 in Vic and 2 in Surrey, which we rent out 100% to long term renters and declare all our rental income, and have no plans to sell…are we still potentially subject to the tax?”
Yes and no.
Principal resident are exempt.
Long term rental property are exempt.
All property that assessed at $3,000,000 or greater face increase in luxury/school tax, except for apartment (or houses that have 4 rental units or greater).
Looking at some listings and came across this in the agent to agent notes
Previous deal collapsed due to foreign buyer tax.
I am still unclear about the spec tax. I understand it is only on houses in the specific regions in BC where the tax applies. Does it apply to investment properties rented out 100% of the time and held for long periods?
If we own a principle residence in Victoria, live 100% of the time there, pay taxes there, work full-time, and we also own 3 rental properties – 1 in Vic and 2 in Surrey, which we rent out 100% to long term renters and declare all our rental income, and have no plans to sell…are we still potentially subject to the tax?
“QT: I was wondering why it was a crawling instead of a moving average.”
I do not know. To me it seem to crawl on the way up, and feel like jumping out of an airplane with out a parachute on the way down. I no longer manage my own portfolio so it seems to move at a steadier pace.
QT: I was wondering why it was a crawling instead of a moving average.
correction:
200 day moving average instead of 200 weeks
Patriotz:
Actually, collateral damage would not necessarily be bad . If you can reduce the number of jobs in Victoria that should reduce the prices on real estate. Perhaps moving the capital to Duncan would help both Victoria and Duncan.
Does Tump proof read his tweets? I have signed up to follow them as it is interesting to see what he says vs what the markets have done in the past few weeks. He had some humdingers today 😉
BTW I’m not sure who was talking about WWIII yesterday but it looks things are heating up over in Syria.
Russia calling out a possible planning of a false flag operation.
https://www.cnbc.com/2018/03/13/russia-military-threatens-action-against-the-us-in-syria.html
Today Tillerson also got sacked.
“the glass is neither half full or half empty; the glass is too big. “
That is a good one. Thanks
patriotz,
It is naive to focus on a low or peak for only couple of weeks, because the market need at least a few months to react. Instead, one should look at 200 weeks or greater moving average (unless one is a day trader). IMHO, smart money was parking their investment in gold starting from 2006 onward or perhaps earlier as a hedge against any market correction.
Take a look at the chart that I dug up and it shown that gold spiked during the 70s and early 80s due to out of control inflation, then hold pretty steady till the mid 90s. There were a dip from the late 90s till the early 2000 before it took off. Investment in technology were a rage, and due to the dot com people were converting over to commodities, and then perhaps more so in gold at a later date as a hedge against any market correction.
https://goldprice.org/gold-price-chart.html
QT: Obviously you are not an engineer. As a friend of mine pointed out “the glass is neither half full or half empty; the glass is too big. “
Five 2 bed 2 bath condos slashed today. First in awhile.
Yes, patriotz. All because your magical taxes will have exactly the effect on the market you want, not cause a recession, leave law-abiding non-speculators unscathed, not make property tax law an impenetrable mess, and cure cancer.
“(and in your case it “tanked” for couple of months out of 12.)”
I wouldn’t call 9 months a “couple”. Facts seem to be painful for some.
Not gold discussions again….about as useful at Bitcoin.
You mean lower prices?
In fact gold historically has gone down during stock market and RE crashes (including the financial crisis of 2008 – from $1125 to $950), except in times of high inflation. It went down about 80% from 1980 to 2000. Government bonds have gone up during stock market crashes, except in times of high inflation.
“Actually it did tank 30% from $1000 to $700 for a best part of 2008. The charts say so.
https://www.sunshineprofits.com/gold-silver/charts/gold-charts/gold-chart-2008/”
Thanks for providing me the chart. From 2007 to 2008 your link did show that there were a jumped roughly $200 average. And, as most people know you can always cherry picking the data to prove your point because of fluctuations (and in your case it “tanked” for couple of months out of 12.)
Everything can be positive or negative is all depend on the individual. One can look at the glass as half full or half empty.
Debt warnings keep piling up.
Consumer Debt Binge Draws Moody’s Warning for Canadian Banks
“Moody’s Investors Service joined the Bank for International Settlements and S&P Global Ratings which have all warned in the last month that Canada’s banking system, dominated by five giants, is facing a growing threat of souring consumer loans amid rising interest rates. The country’s ratio of household debt to disposable income reached a record 171 percent in the third quarter of last year.”
https://www.bloomberg.com/news/articles/2018-03-13/consumer-debt-binge-draws-moody-s-warning-for-canadian-banks
“However, gold price didn’t “tanked a couple of hundred dollars”, in fact it jumped $200 from 2007 to 2008 and then a steady march till above $1800 by 2011.
How do I know this? ”
Actually it did tank 30% from $1000 to $700 for a best part of 2008. The charts say so.
https://www.sunshineprofits.com/gold-silver/charts/gold-charts/gold-chart-2008/
“Gold didn’t hit $1800 til 2011. It actually tanked a couple hundred dollars which was about 25% give or take after the crash in 2008. It took off when QE kicked in.”
You are right that it didn’t hit 2011, but every thing take time. However, gold price didn’t “tanked a couple of hundred dollars”, in fact it jumped $200 from 2007 to 2008 and then a steady march till above $1800 by 2011.
How do I know this? A family friend asked me of what she should do with her gold or stocks when gold was up to $900 USD during the crash, and my answers was it is her money and she should do what she saw fit. However, my take on it is that gold tend to lose on the long term so if it was my money I would sell gold instead of stocks if I need the money. She ended up traded in over 70 ounces of gold in 3 sessions and the first was over $900 USD an ounce while the last was over $1100 USD.
“The Feds did that in 2006 and two years later the taps were shut off for years. Things change when the SHTF. Counting on planned projects is a fools game when a recession is coming.”
Perhaps, I’m not as informed as you, even those I’m currently working on a NSPS project.
“Uh, define best. It definitely wasn’t the hottest.
Prince Rupert – 17.5 degrees
Pitt Meadows – 19.5 degrees
White Rock – 20.3 degrees”
Victoria temperature will always be milder than the Lower Mainland (or North of the Malahat) because we are surrounded by the ocean. We get lower spring to fall temperature, but we also get higher temperature during the winter. Another aspect is that we get 1/2 of the rain and cloud cover than the Lower Mainland.
“You can’t deny we had the best weather in the country this weekend, as is frequently the case. There’s just no where else in Canada comparable. The fact in March we compare w/ Palm Springs is pretty amazing – and it doesn’t get so hot here in the summer like it does down there.”
Not American Palm Springs, but certainly Canadian Palm Springs or at least compare to Ottawa.
http://ottawacitizen.com/news/local-news/total-of-15-cm-of-snow-forecast-to-fall-through-wednesday
“Knowledge is a bad thing also…best in the past to not over analyze and try to rationalize .”
Good advice
Actually the blog has improved greatly. Most of us now have a good understanding of how the real estate market works. Unlike a decade ago as when most of us were floundering without a knowledge of the foundations of real estate. Nor did we know how the various governments have been revamping the marketplace. Or the extent of foreign ownership, vacation rentals, and land banking/hoarding. Even in 2016, only a few of the bloggers understood why the market took off in the first few weeks of February when the typical house added a $100,000 to its value in just a few weeks.
Another example is vacancy rates. Years ago it wasn’t understood by many on this blog of the relationship of declining vacancy rates to future house prices. But we know the relationship now. And we can deduce that when vacancy rates begin to climb, house price will fall in the future. These are things we know now but didn’t a decade ago. We also know the difference between a bull and a bear market in terms of months of inventory, days-on-market and the ratio of sales to listings. A lot of the stuff that we have discussed first on this blog has made onto Garth’s site and into the mainstream media.
We have come a long way in understanding from a decade ago. And personally, I think that most of the regulars on this blog have a greater understanding than the majority of real estate agents and developers on how the market works. You now know when someone is selling you bullshit and you can call them on it.
This blog has been cutting edge in real estate. A lot of real estate professors could learn a great deal from this site.
“I dont need to repeat that I dont have a crystal ball but I really believe that a drop in prices in the core, for SFH of more than 10% is highly unlikely. ”
I agree that downtown core price is not going to drop much compare to the outer area. The gulf islands, Sooke, and North of the Malahat just now begin to catch up to the last market down turn.
During the 80s crash, Victoria downtown core saw a drop of 35%, and the outer area saw a drop of 40%. While farther out such as Sidney, Westshore saw as much as 50%. I do not know the percentage drop for Sooke or Shirley, but I remember vividly that the road was littered with for sale signs. Many were hand painted from $7000 to $19,000 for water front properties and some of them were 3/4 acres.
Bingo, I am not sure it is. While there is a lot of due diligence in corporate transactions, this is not something that I have ever seen.
A toy example: BigGas owns 10 gas stations around BC and is owned by 5 people equally. A new investor buys out 3 of the 5. I have never seen information that says BigGas has to declare a change of ownership for the land it holds and pay PTT.
Something that people are missing in all the property tax discussion: This is a tool invented for a very different job. We are trying to re-purpose it to scare away foreign money and speculation. Don’t be surprised if all your clever “solutions” to the housing crisis, using property transfer taxes and yearly property taxes, ends up with huge collateral damage.
That doesn’t mean we can’t try, it just means you shouldn’t make sweeping assumptions about how the world should work.
“If I remember correctly during the 80s crash gold price was average above $500 USD and at time, and high was above $800 USD. And, the recent market crash gold shot up as high as $1800 USD.”
Gold didn’t hit $1800 til 2011. It actually tanked a couple hundred dollars which was about 25% give or take after the crash in 2008. It took off when QE kicked in.
“And, currently the federal government is on track for spending an additional few billion dollars in Esquimalt at least for another 8-10 years (NSPS).”
The Feds did that in 2006 and two years later the taps were shut off for years. Things change when the SHTF. Counting on planned projects is a fools game when a recession is coming.
“I guess my question is whether there is likely to be a flood of inventory over the next year or two that would cause prices enough to allow Josh to actually jump in and buy a house in the inner core?”
Not going to happen unless the government suddenly fire government employees en mass, reel in spending (historically NDP is know for spending like drunken sailors). And, currently the federal government is on track for spending an additional few billion dollars in Esquimalt at least for another 8-10 years (NSPS).
He can continue to declare his current residence as his primary residence and delay the decision. Primary residences are exempt I believe. It will also mean that any capital gains are exempt. In his new location he will not have this benefit although he can buy another property. You only get one designation.
http://www.advisor.ca/images/other/ae/ae_0507_taxbreak.pdf
Of course, the rules have not been released in detail but I’d expect you can exempt the property.
CBC Radio at noon tomorrow (Wednesday) will have a discussion on the new speculators tax with an opportunity to phone-in with questions. It’s the show called B.C. Almanac from noon to 1PM.
It should be an interesting show.
“where that would leave someone holding cash? ”
Traditionally, gold and bond are use as a safe harbor during a market crash or run away inflation, but on the long term it has proven that they also lose.
If I remember correctly during the 80s crash gold price was average above $500 USD and at time, and high was above $800 USD. And, the recent market crash gold shot up as high as $1800 USD.
Sounds like you’re confused Bingo. Every year there seems to be a day in the late winter/early spring where the temperature pops and breaks a record. Talk about nitpickers.
Leif,
I’m by Florence Lake in Langford. The area was developed during the 90s, and there are many lots that are 1/2 acres, however a few had subdivided theirs to make way for more houses.
Quick question re speculator tax….I have a client that is being relocated for work and wants to keep his property in Victoria vacant (so he can visit on a regular basis) but doesn’t know when he will be back permanently (2-3 yrs). He will rent a property in Ottawa for the time he is there.
Is he subject to the speculator tax?
Looks like there some provisions for long absences but not all of the wording lines up with the speculator tax info provided so far -> https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/reduce/home-owner-grant/extended-absence
Hawk
Yep, one of those rare everyday occurrences. You sound a little more confused than usual Hawk.
Hottest day in Victoria in 53 years… happens every year?
Maybe you mean a stretch of hot weather in March is not uncommon?
Starting to notice a trend of multiple offers but barely going over asking. I’ve been involved in a few 4-5 offers situations in the last 30 days where the property didn’t even go 10k above asking. Buyers are defintiviely a bit more reserved this year compared to 2016/2017.
It would appear that the demand is still there; however, affordability might be hitting a ceiling.
“Luke
You can’t deny we had the best weather in the country this weekend
Uh, define best. It definitely wasn’t the hottest.”
Actually Surrey was 22 but is it really relevant ? Typical March fluke warm day that happens every year.
Luke, it was in your typing, not in quotes. I didn’t see caveat’s post and that’s not what he said.
“We broke an all time record by 0.1C yesterday – it was 16.8C vs 16.7C in 1965. Not too far off Palm Springs…”
Speaking of posting same bullshit over and over Luke you should read your posts sometimes but you might be asleep by halfway thru.
@josh
I list on Airbnb ( a whole house) but I have a minimum one month stay. I advertise there because it is free and allows for good cross checking of potential customers. They carry an excellent insurance and they handle all the money transactions. With that all said I have had very few enquiries (because of the one month minimum) but it complements with all the other advertising I do.
Marko: “In my opinion best case scenario for a buyer that over analyzes is 10% drop over 2-3 years then 2-3 years of flat allowing wages to catch up a bit and the over analyzer makes a decision 5 years in.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
A well reasoned answer to a similar question on another blog.
Doomcouver
I’m sure some people do, but I don’t “wish” prices would go down. It’s nearly an objective mathematical certainty that price:rent and/or price:income ratios will normalize at some point. Rents generally reflect incomes however, and since wage growth doesn’t look like it will be getting much bigger any time soon, your “non-crash” scenario means that house prices would have to stabilize and move sideways until wages can catch up.
Since housing across Canada has roughly doubled in price over 20 years and wages have grown by roughly HALF that: What that means is for the imbalances to correct, we need about 15 YEARS of house price stagnation, coupled with at least a 2% wage increase per year to make up the difference.
Can you honestly believe that the level of speculation in the market would allow for 15 years of price stagnation? I’d give it 2 or 3 years max of stagnation before the “investors” get spooked and crash the market. That is if the market externalities don’t pop the bubble before then, which seems the most likely outcome.
Literally the only way the bull argument works is if you believe in the “new normal”, but there’s no compelling evidence to believe we should toss out economic fundamentals because housing has detached itself from incomes for a relatively short period of time in a low-rate environment.
If you want to know what I “wish” it’s that the bubble hadn’t grown in the first place, and central banks had shown better judgement when leaving rates so low for so long.
Luke
Uh, define best. It definitely wasn’t the hottest.
Prince Rupert – 17.5 degrees
Pitt Meadows – 19.5 degrees
White Rock – 20.3 degrees
totoro
While I agree a smart investor would think that way (Airbnb seems like a flash in the pan.. get in, get your money while you can, get out), Caveat and Luke have a point with how it seems we overestimate how little some people know about RE.
It’s really mind blowing how little mental effort people will invest in their most valuable asset. But I think that’s the point for some, RE is “easy” and stocks and bonds are “hard”. Easy vs hard seems to be how much perceived mental effort is required for the investment.
3/4 of them are in the City of Victoria. Most must be condos. Some of these are legal hotels or zoned for this or are part-time residences eligible for licensing under the new rules.
I agree that some will stop and something else will happen with them once the City starts its enforcement program – which will be shortly. I don’t think this affects the SFH market too much but it might mean that some will become long-term rental condos again.
As far as speculators, maybe. More likely opportunists. Doubt many bought with a view to Airbnb rentals given that it was always at risk of being stopped. The most money you can make on Airbnb is by renting a place from someone else and then putting it on Airbnb. My guess is that some entrepreneurial/unethical sorts have a few listings like this.
May or may not be the management company for the resort. My guess is that they are family managing for other families who own timeshares and not for Wyndham.
BTW Hawk – it was Caveat who brought up Palm Springs in that link – not me.
You can’t deny we had the best weather in the country this weekend, as is frequently the case. There’s just no where else in Canada comparable. The fact in March we compare w/ Palm Springs is pretty amazing – and it doesn’t get so hot here in the summer like it does down there.
Palm Springs is a nice place but it’s a bit like you – same weather over and over again – same posts over and over again. At least Victoria has variety of weather. Only a bit of snow in winter which just makes it look nice for a day or so. Nowhere near as much rain as Van. Never too hot in the summer w/ the ocean breeze. It can’t get much better than here weather-wise. Thank you for pointing that out 🙂
Josh
All about marketing. Talk about a timeshare people run. The nice family with a good rating are not so scary. 🙂
Luke
Knowledge is a bad thing also. Sometimes its just better to jump in unaware I find. Over analyzing can lead to believing you know more than the market. House prices/ crypto currencies and Marijuana stocks best in the past to not over analyze and try to rationalize . 🙂
I just find it funny that this $100m+ management company’s profile talks about this one family.
Do people think AirBnB’ers are speculators? They’re specifically running short term rentals. To me it seems obvious that many of them are just going to act for the highest profit in the short term. There’s over 1000 entire home rentals in the peninsula (Victoria, Saanich, Esquimalt, Oak Bay and View Royal). That seems like a lot of rats that could flee if the ship starts to sink.
Source: airdna.co
So far disaster doesn’t appear to be happening… 426 Arnold Ave sold $110k over asking for $1.1m.
Nothing strikes me as great about this place – did you see the kitchen layout (I’m sure they’re going to blow that out). Only 4080 sq ft. lot in what’s a very boggy marshy area. No off street parking. No suite. Looks like an older English house so maybe that’s what was appealing…? Lots of wood burning fireplaces and radiators I wonder how the heating is?
https://www.theweathernetwork.com/us/weather/california/palm-springs
This morning when I looked it was 21C. Long range has it at 19C as a high. Sunny in both places. That’s reality, but you like to talk Victoria down whenever possible. A sad ol’ bot that just repeats endlessly… it’s all you can do.
“We broke an all time record by 0.1C yesterday – it was 16.8C vs 16.7C in 1965. Not too far off Palm Springs…”
Luke, can you stick with reality please ? It’s 27 in Palm Springs, not 16. 11 degrees is a bit of a diff. There’s pumping , then there’s outright lying.
“Many of us would just rather rent right now and suffer the consequences. We don’t need a plan B because life is more than buying a house.”
Bang on Penguin. So many here put a house as a be all end all to some sort of success in life. It’s four walls, with a roof and bottomless pit for your wallet.
“I do not get all the people who cannot possibly see how house prices could dip below 10%.”
They will soon enough. 10% is just a warm up. The warning signs are stacking up by the day but many will ignore them until it’s too late.
Quality of consumer credit seen ‘under threat’ as red flags mount
The first signs of danger will come in unsecured credit card debt, Moody’s warns
Canadian banks are seeing the creditworthiness of their customers besieged by external forces, according to Moody’s Investors Service.
“The strong credit quality of Canadian consumer loans, thanks largely to record low unemployment in recent years, is under threat on several fronts: debt-servicing costs are increasing because of interest rate hikes, the proportion of riskier uninsured mortgages is on the rise, and longer auto loan terms point to greater borrower vulnerability,” Moody’s said in a report released Tuesday.
But the ratings agency said that the real harbinger is unsecured credit card portfolios, predicting that “the first bite” into the asset quality of the banks would be taken out of that area.”
“The proportion of uninsured mortgages, including home equity lines of credit, has increased to 60 per cent from 50 per cent five years ago, with an interest rate reset looming,” said the agency. “And almost half of outstanding mortgages will have an interest rate reset within the year, which will increase the strain on households’ debt-servicing capacity.”
http://business.financialpost.com/personal-finance/debt/credit-quality-of-consumer-loans-seen-under-threat-as-debt-warnings-mount
Mostly true – esp. for some of the main characters that Once & Future mentions. You can go back years and years and see that Hawk and Number 6/Jack are like ‘bots’.
Leo’s analysis is what makes it worthwhile to come back to for me, and some new people (thanks for your contribution suzy123), and occasionally some smart people (can’t think of any of the top of my head though) 😉 make good contributions from time to time. Thank you for teaching me what Brevity means, Once! Not so sure I’ll learn though 😉
We broke an all time record by 0.1C yesterday – it was 16.8C vs 16.7C in 1965. Not too far off Palm Springs…
In my job where I work w/ the most disenfranchised people and people from all walks of life – the biggest problems are in the Westshore, Quadra Village, and downtown core.
The Westshore esp. Langford is almost as bad as the downtown core for problems.
So true Caveat – so many people out there just don’t care or are clueless. They may even own two properties and be oblivious to the new Spec Tax. Amazes me how many people walk around like ostriches with their heads in the sand… or their headphones… or buried in their i-phones. Like sheep to the slaughter….
“Low prices, higher cap rates draw developers to Vancouver Island”
Putting your faith in developers is like putting your faith in bitcoin.
“Marko at 5000 to 6000 listings the market barely budged downward last time.”
Were rates going up last time after record low 2% rates and new mortgage rules to stifle speculation plus a 2% stress test. I don’t recall that being so.
The building in James Bay is actually a legal hotel. They obviously manage Wydnham Resort timeshare bookings for a living. Airbnb is actually considering buying Wyndham Resort properties in Europe outright I believe.
I get that gwac but there are a lot of other factors at play. That’s the whole point of the comments. X happened so what will the result be? It is pretty interesting to watch all the politics, rate hikes and decreases and their impacts on the market in a city and commodity that we actually live and breathe in. For those of us who like numbers anyway it can be very interesting to watch so closely. Which is probably why you see some bright minds here. I do love math but do not know much about politics/economics/houses. I love learning via all the commentary and numbers.
I feel like I’m probably similar income/age to Josh and LF and probably similar situation to some of the older people here when they were our age. I really don’t know why you all make us feel dumb to be waiting in this market and give us advice like “when I was your age I had to make sacrifices to buy a house and now I’m house rich so you should do what I did. House prices never go down so you’ll thank me later”. Give us a break we’re no dummies and think about what you might do in our situation (run the numbers). Hmm buy a house at the top of our budget with high rates looming at the end of a long period of price increases. But actually there isnt a good house to buy so you will have to pay 750k for a crap house (that requires a lot of work) to fit your family. But to even do that both parents will have to work full time (daycare costs $1000 per kid per month). But barrister you say we should suck it up and move an hour away. Ok well Langford is not too much cheaper so we still most likely require both parents to work and we just add 1.5h of commuting time per parent per day to get into the city. Time away from kids and any free time sitting in a car. Oh and we make too much money to get any government handouts for housing, child care, anything else.
I’m not complaining about my situation but it is frustrating sometimes. Many of us would just rather rent right now and suffer the consequences. We don’t need a plan B because life is more than buying a house. But it would be really sweet if we could!
I do not get all the people who cannot possibly see how house prices could dip below 10%. How can you not see that it may be even a little possible? I don’t think it’s likely to dip below that either but I definitely see how it could happen.
There are condos that don’t allow rentals and they will be exempt from the spec tax, like in Vancouver vacant home tax. So they are perfect for people who want condo for their own use only, with added bonus: modest buying price comparing to similar rent-able condos.
Of course, the price gain wouldn’t as high either when they sell, but they are not a speculator anyways, or are they? 🙂
Josh
I cannot figure out what is going on with those. Those are timeshares. How that family/WM and airbnb are connected is confusing.
Approx. $550k.
I’d like you guys to meet humble Jerry and LeeAnne from Salt Lake City Utah. And their quaint family. And their quaint one hundred and ninety three AirBnB listings. https://www.airbnb.ca/users/146323554/listings
They have 10 units all in the same building in James Bay. https://www.airbnb.ca/s/homes?host_id=146323554&refinement_paths%5B%5D=%2Fhomes&allow_override%5B%5D=&ne_lat=48.42674448738727&ne_lng=-123.37277122195042&sw_lat=48.41655530656968&sw_lng=-123.38442273791111&search_by_map=true&zoom=16&s_tag=mdP31JkV
So ya, I’m starting to think there’s some potential for inventory blow up if prices head just a little south.
Josh:-Not to get too personal but what sort of price range are you comfortable with for a house?
Barrister, all good points. My wife and I love James Bay mainly cause of the Dallas road beach, beacon hill park and being walking distance to everything. It really is hard to compete with that in our minds. I’m not convinced we’ll ever afford anything that we actually want to live in JB or Fairfield but my wife seems so attached to the neighbourhood, she’d be ok renting forever. Plan B is Ontario. I keep an eye on both. I can afford some surprisingly nice places right in downtown Ottawa. At least in Ottawa I seem to be outpacing the market and not the other way around.
That would help too.
AirBnB research is interesting. I don’t think I’ve found the worst yet but there sure are a lot of “struggling home owners” who are “just getting by” with their “3 whole house listings”. One lady named Dianne has 10 listings across 2 accounts (so far). I clearly need to write a script to get the whole picture. Could be a very interesting weekend project.
Patriotz:
There was a major crash in Toronto in the 1990s but house prices in premium downtown areas such as Forest Hill and Rosedale were far less effected than other areas. I do recall looking downtown at that time. But for me personally prices went from outrageously unaffordable to just plain unaffordable. In percentage terms my house dropped a lot more than the houses in the core. Bear in mind I bought in the beginning of the seventies. The nineties crash was two decades after I had bought initially. Now I am feeling really old–sigh.
Toronto crash 91 to 95 aprox. Condos fell 50% houses less maybe 30%. It was ugly. Toronto was a huge mess during that period.
http://www.torontocondobubble.com/2013/02/toronto-housing-bubble-in-1980s.html
Marko:
Your best case situation is interesting for the over analyzer.
Question for you. In terms of single family homes that are in the core have you seen a higher percentage of all cash buyers in the past five years than before?
Barrister, I would like to know what time frame you’re talking about. Reason is there was a massive crash in Toronto in the 1990’s which you don’t mention, but I’ve gotten the impression you’re a bit older than someone who’d be just starting out in the RE market post-2000.
This blog is amazing but it on a loop over and over. You could go back to 2009-2015 and the posts are near identical. Debt/higher interest rates/ falling prices. No idea what is going to happen but base on history. We may not see much of anything in either direction.
Marko at 5000 to 6000 listings the market barely budged downward last time.
Low prices, higher cap rates draw developers to Vancouver Island
A Vancouver development company is making its first investments in Nanaimo, joining other Lower Mainland firms that have been building on the Island as land values and demand rise in one of B.C.’s hottest real estate markets.
https://biv.com/article/2018/03/low-prices-higher-cap-rates-draw-developers-vancouver-island
A greater than 30% drop in the median price of the segment I buy in wouldn’t hurt.
The situation at that point and time would look so dire that you wouldn’t buy. Inventory would be around 6,000 with sales of 400 a month. There would be more price drops than pending sales. It would look like another 30% is just a few months away.
In my opinion best case scenario for a buyer that over analyzes is 10% drop over 2-3 years then 2-3 years of flat allowing wages to catch up a bit and the over analyzer makes a decision 5 years in.
Josh:
This is not me beating up on you but rather some sincere advice. I was faced with a similar situation in Toronto as a young man. House prices in the core where simply unaffordable for me. Looking back, in spite of making really good money, they only became more unaffordable with time. There were a number of dips in the market but never enough to afford a reasonable house downtown. So I bought what was then well outside the core and commuted for over an hour to work, each way, for most of my working career.
Unlike me, you have the advantage of being able to work at home, although that may not be the case for your partner. But I am hard pressed to understand peoples fixation with being downtown. I dont need to repeat that I dont have a crystal ball but I really believe that a drop in prices in the core, for SFH of more than 10% is highly unlikely. Prices are likely to plateau out for the next few years. But if my experience in Toronto is anything to go by nearby areas will continue a slow but steady climb.
By the time I sold in Toronto, my cheap house well outside the core was considered in the core and was certainly unaffordable for the vast majority of the city. You are absolutely right that maintenance fees on condos generally are almost prohibitive. But, I only managed my first home by being the maintenance man, gardener, painter and carpenter. I bought my first house exclusively because I liked the lot. Calling the house itself crap would have been elevating above its actual condition. The windows leaked to the point that one could have flown a kite instead the house on a blustery day. But with time, I added an addition and a second floor and repaired the original house. I built a set of terraced gardens by adding a series of retaining walls and I did the work myself. It was slow but frankly I found it rewarding.
It sounds like you have done a great amount of rational analysis. If you require a 39% crash to buy in the core, I would suggest that the probability of that occurring is exceptionally low. it really is time to come up with plan B before plan B becomes unaffordable as well.
As you know, I am not one of the people that believe that Victoria house prices can go up endlessly in great jumps but I also dont believe that there is a great likelihood of a major crash in the core area.
Partially it depends whether you are looking for a long term home and putting roots down with family in mind as your goal or whether you need this to be a short term housing fix. If I can paraphrase Warren Buffet, if you are not confidant as to the price ten years from now, you should not be thinking about the price ten months from now as to whether you buy.
Hope this helps, but probablely not.
Thank you.
Had an appointment in the West Shore not long ago. During the trip I saw one car with a bumper sticker reading “I [heart] pit bulls” and another car with a sticker depicting a skeletal hand giving me the finger.
The smart money is only where Leo says it is.
It may not be over-inflated but it definitely holds pressure.
I know. It’s one of life’s great mysteries.
FOMO works both ways. When prices drop a bit, we’ll be a few panicky news segments and articles away from speculators phoning their realtors to cash out and causing a Toronto situation. The three horsemen are reasons for sales of primary residence but in the last 2 years, everyone and their dog has become a RE tycoon.
It looks like AirBnB isn’t linking or showing listings on profiles, but you can change the URL from /users/show/12345 to /users/12345/listings and it’ll show you. Spreadsheet time!
suzy123
If you are curious and willing to disclose the address there are dozens of people on here that could look it up for you . Or ask your realtor™, he/she just made a bundle of money off your purchase, he/she can spend the 5 minutes looking it up.
Andy7
Quote of a quote (I know it’s not your words). That person is ill informed. It IS illegal. If there has been a significan ownership change then PTT is owed. It’s similar to someone not declaring capital gains when they sell a place (that capital gains is owed on). It’s someone doing something blatantly illegal, though apparently it’s as easy as not declaring tips (though CRA has been cracking down on that recently).
As Average Commenter pointed out there are changes in progress to more readily catch this.
I’m sure Totoro would know more, but I’d expect the lawyer involved in the sale of the corp to be in some sort of heat. I don’t know what they have to disclose when property is involved but I’d be surprised if they have no duty to at least inform their client of taxes due and liability if they are not paid. I was involved in a sale/purchase of private corporate shares and there was definitely some due diligence on the lawyer side (verifying it was an arms length deal at a fair market value etc), it’s not just a straight forward matter of money exchanged for shares.
Boosa
Looks like they are still trying to figure it out, but currently if you own two places and they are both in the zones they want to discourage “speculation”, then yes, tax will be due then you apply for a non-refundable tax credit (which means you need enough income to get the full tax back). If they keep it as proposed there will be middle income people forced into selling vacation homes. We’ll have to wait and see.
I think discouraging vacation property investment is a mistake (vacationers take up slack in slow markets.. just ask palm springs or any other US vacation spot popular with Canadians). And it seems strange to target pretty much everywhere with “high” prices but not Whistler. If you don’t want to screw over vacationers there… then why is it ok to screw them over elsewhere? Whistler vacationers are “real” vacationers, but Kelowna or Gulf islands aren’t? They are just speculators?
The gulf islands being affected rubs me the wrong way too. If someone lives on a gulf island but holds a small condo in Victoria or Vancouver for when they are on business, it hardly makes them a speculator. They can’t rent the condo out long term since they need it. What are people like that supposed to do? Sell both and move to a city they don’t want to live in full-time? Sell the condo and use short-term rentals when they are on business?
@Once and future
That sums it it pretty good 🙂
” Because, I assume that the majority of the population and people on this board is well prepared that we can handle 8-10% interest rate.”
LOL That’s the most ridiculous statement of the year. Have you done the numbers on a mortgage at 2.2% refinanced to 8 to 10% ? How about the trillions of government debt domestically as well as international ? Get back to us.
My take on waiting to buy in any market is don’t if you are ready and can afford it otherwise. Trying to time the market is illogical for the most part and if you hold long enough it works out in your favour in any event. If you look back this has been the case in our market.
In every market there are people who think about selling for various reasons not including necessity. They tend to sit on their house in a rising market because psychologically it is hard to sell a rising asset. Once things look like they might turn, selling becomes a top of mind issue worth taking steps on. I don’t think that people sell because they have to most of the time, they sell because they want to a change or to lock in a gain or because they are tired of being landlords. When you think prices might stall or fall it lights a fire.
To help answer your question Barrister about how the number of active listings may increase I just have to look back over the last decade at active listings.
Last month there were 338 active house listings in the core districts. Back in February 2013 the number of active listings was double at 724. And that is not peak active listings that typically happens during the summer market. In the last ten years peak active listings for houses in just the core districts have reached close to a thousand and I would expect that history will repeat itself in the next few years. A tripling in the number of houses for sale in the core.
Dasmo
You still have your Blog. I read it at the beginning. Lost the link
I am not totally sure how to phrase this question so bear with me. First, I am focusing just on SFH for the moment. I guess what I am trying to figure out is whether there is really any realistic potential for a substantial increase in the inventory of SFH for sale. I am trying to gauge whether there is a realistic chance that enough inventory would flood on the market to cause a significant drop in house prices.
I know that there is a steady flow of inventory from the three horsemen of the apocalypse namely death, divorce and disability. But I dont have any feel as to the number of houses that come on the market because of that. Cannot speak for the whole city but it seems to me in areas like Fairfield, Rockland and Oak Bay that a lot if not most of the buyers are from the mainland and in their fifties and early sixties in the last three years. They seem to be there for the long term.
I know that inventory is climbing slowly and the number of sales is really down but inventory of SFH
in the core seems to be rising, at best, as a trickle rather than a flood. There are only four SFH in James Bay, a handful in Fairfield (notably less under 2 million), exactly one in Rockland and not that many in Oak Bay (excluding Uplands which actually has quite a few).
I guess my question is whether there is likely to be a flood of inventory over the next year or two that would cause prices enough to allow Josh to actually jump in and buy a house in the inner core?
@Once, You nailed it. It’s like a soap opera. We all have our roles….
A greater than 30% drop in the median price of the segment I buy in wouldn’t hurt. I’m not necessarily holding my breath for a correction – I just want to buy something that makes sense. Trouble is that keeps getting more and more unrealistic despite increasing income and putting most of it away. I’d like to be spending 20% or less of household income before tax on all ongoing costs on a place that has at least 2 bedrooms, preferably 3. I’d also like that asset to not fall off a cliff right after I buy it. Condo fees here are insane and I would prefer to make maintenance decisions for myself but I seriously doubt my first home here wouldn’t be a condo.
I already have analysis paralysis. I’ve made a big fat spreadsheet and come up with a few rules of thumb to stop analyzing things emotionally. I’m hoping the obsessive research pays off (already has I think) and stops after I buy.
Pardon me while I investigate local major AirBnB operators… https://twitter.com/JanePlaceCLT/status/973237577431109633
Lol, accurate!
Truth is we don’t know yet. They haven’t announced the final rules but we haven’t gotten a definitive no on that
Just heard from a family that is selling their house after coming over from Vancouver a few years ago. Being away from family and friends just didn’t work.
And that’s just across the water.
Not “in BC”, in one of the designated urban areas. The tax applies both to residents and non-residents. The difference is that the BC income tax offset for the tax is much more likely to apply to residents.
If someone wants to bring up the Gulf Islands, I think they should be excluded, for BC residents currently owning at least.
On its own, agreed. If it falls because of rising interest rates or a recession, that’s a cause for other investments to fall as well.
LF I am in the same boat and also looking in the same areas. My rental is really nice and for a great price but the kids I keep popping out are making it seem so small these days. Dasmo’s house is looking pretty nice. I think he should do a house tour when it’s done!
2 things
Once that was brilliant and spot on.
Victoria is amazing place to live. When the sun comes out paradise….
” Despite the premier’s assurances that BC residents are not being targeted, there is still a lot of uncertainty about whether they will be exempt from all or just part of the tax.”
You are saying that regular BC residents will also be hit by the tax if they hold a second property in BC?
If you believe that the Canadian housing market is overvalued, and that the economy is intrinsically tied to that market, then you should invest outside of that market to minimize the correlation. If the Canadian real estate market keels over on its own it shouldn’t affect US and international investments.
I just invest in everything and hope for the best
You know dasmo’s shed is built better than any new house
Anything’s possible. But I plan to stay where I am until I buy. 😀
Broadmead, Central or north Saanich. I love Dean Park. But from any of those, we’d be into a smaller lot and house. I don’t need huge, that just costs more to own and its harder to maintain. And I look forward to more of your user-content summaries. That made my morning.
If you’re saving money to buy a specific asset, what matters is your inflation expectations for that asset. If you expect housing to keep going up you should just buy now. If you expect it to go down, note that housing price declines often happen together with declines in stocks and bonds. And gold.
So what’s left? The highest return you can get on cash or short term bonds. The rates will go up with inflation (in fact they already have) so future inflation isn’t a dead loss.
As for me, I’m not selling anything, but I have a good amount of cash plus a margin account that will allow me to take advantage of a downturn in stocks or bonds.
In regards to beancounters topic of inflation, could someone smart and wise educate me on where that would leave someone holding cash? I assume QE is inevitable for Canada in the coming days. What would be the safest, even profitable way of hedging against inflation, keeping in mind the bubbles around us in stock and housing.
I know this is a housing blog but I think the topic is relevant given we have a lot of people unable to afford in the current market right now. If one is holding out in anticipation of a correction of sorts, where should one park their monies?
“A numbered company buys a property, then instead of selling the property they sell the company, the property remains in the possession of the company and since it doesn’t change hands, no property transfer taxes are ever paid… until they sell outside the company.
A huge tax dodge, this practice should be made illegal. This is also the way (I believe) that the number of foreign-owned properties in Canada is under-represented.”
Pretty much non discussed changes to property transfer tax in the budget are all the enforcement changes: GAAR now applies to all PTT, statute of limitations to 6 years, collection of more info, penalties, AND a number of registries.
Those changes will likely be used(eventually) to scoop up all transfers.
Caveat:
Look at the weather. Total exodus from Santa Barbara heading up here because of the weather. Sigh.
As to location, different strokes for different folks. Variety is not a bad thing.
Qt where are you located? Your house description sounds like what we are after.
LF, I am now inspired to summarize every HHV comment thread:
Leo S: Here are some stats.
Marko J: Here is some real-world stuff.
Jack Number 6: Sometimes I will post good market analysis, sometimes I will insult people instead.
Local Fool: Here are some thoughtful doubts about how crazy housing has become.
Hawk: Pumpers, pumpers, you all suck. Housing is going to crash! Here is a link.
Introvert: Hawk, you have always been wrong. Hahaha.
Josh: Dammit man, I make decent money and still can’t afford a house.
gwac: Darn millennials want everything for free!
Dasmo: I am trying to build a cool house, but everything is so damn expensive!
(All snark comes with affection). More to come…
So true – wrecks it for ever IMO. Those lots with over the top big and fancy houses will never again be affordable useful dwellings for people with average requirements and average means.
Spoke to a co-worker. Owns in Victoria and the Gulf Islands. Had sort of heard of the spec tax but was convinced it won’t apply to him. Maybe he’ll be right in the end, but as written you’d think he’d at least be aware??
Made me realize – folks on this blog are way more knowledgeable about RE than average folk.
It’s no shocker that some people prefer the burbs to the core. Tomayto, tomahto. Just because Fairfield is considered desirable doesn’t mean everyone should want to live here.
Even often mocked Langford. Plenty of people choose to live there for what it offers – not just because they couldn’t afford OB.
LF, how far from the core are you thinking? There is a lot of green space outside of the core, but the commute is a trade-off. For me, one of the real gems of the CRD is the amazing park system. Everyone in the city should be protective of the parks we are blessed with.
I am always curious about different people’s balance of requirements.
One thing that always annoyed me was finding most larger lots had over-sized houses on them. I would love a few acres somewhere, but I don’t need 4000 square feet of living space.
Local Fool I feel like we could be neighbors in our future community and I feel like a lot of people here think the same thing although I do know some people who like to be in the city. You seem much better at analyzing the market than me but there has definitely been something holding me back from buying. Maybe we can co-rent dasmo’s garden shed?
Chuckle
Figure this will have them all running to Victoria?
Beancounter, I know that is just one anecdote, but thanks for sharing. Very interesting.
Local Fool, thank-you for the link. I had a good laugh!
Leo S, that is why I like reading your blog so much. You have no over-inflated ego.
QT, we lived for a short time in Langford and quite enjoyed it. We moved for various other reasons but had no problem with the town in general. I know it is fashionable to be snobbish about the westshore, but most of it is pretty decent. The brand new subdivisions lack character, but I guess people thought that about Gordon Head in the 70s.
On ross kay. He talks a lot about how their forecasts are dead on, and yet I can’t find any forecasts that they publish. Where are they?
They aren’t. Except the ones that might be hit by the spec tax.
I do think that the extra speculators in the market may not we willing to keep buying if they don’t think that price appreciation will counteract their money losing rentals. It happened in the last downturn as well.
Agreed on the first part. The #1 correlated factor with house price declines is unemployment. Interest rates are secondary. No matter how low your interest rate is if you don’t have a job you can’t pay the mortgage.
I believe the crackdown on this is coming soon as well. Report due this month on how to attack the money laundering if I remember correctly?
Had a house in Fernwood for a while. Made some good money, sold up last year and moved a little farther north.
Some people will talk of Fernwod/Fairfield/Estevan charm, other people would call it genteel squalor, and being of a different era I align with the latter.
As Woody Allen remarks in Annie Hall when offered the opportunity to get “mellow” – “oh, I don’t do well with ‘mellow’, I tend to ripen and then rot”.
Exactly.
I’m not convinced there is any smart money in residential real estate.
“I just don’t like the hillbilly vibe but I confess, it isn’t as bad as it was. But it still is that way, on the whole. And that Colwood crawl is nuts, though the Pat Bay is starting to have a bit of congestion too.”
Almost choked on my water with the hillbilly reference. I had similar notion in the past till I moved here. Yes, there are still some hillbilly mentality out here, but the majority of them had moved on, except for Peatt Rd area, and the new shanty town Westhill and Kettle Creek where the houses are packed tight together. I too found downtown core were too busy and noisy, hence I was looking for a nice peaceful place to come home to, and surprisingly I found it out in Langford.
As for the traffic, it is terrible everywhere. But, I don’t find it too bad because I tend to get to work an hour early so I’m not stuck in traffic.
I don’t like the busyness, the loudness, and the really visible escalation of social problems occurring down there in the last several years. Also, just the “vibe”, but that’s harder to describe. For instance, I can’t stand Cook St. Village, or Fairfield. Fernwood is even worse. I’ve gotten many “What planet are you on?” looks for all that, but it is what it is. For whatever reason, I also don’t like living near where I work. I like my home to be a quiet escape from things – a downtown condo or SFH, would be almost my nightmare. Partner is the same. I guess that’s a good thing? It makes it marginally cheaper.
Westshore – I just don’t like the hillbilly vibe but I confess, it isn’t as bad as it was. But it still is that way, on the whole. And that Colwood crawl is nuts, though the Pat Bay is starting to have a bit of congestion too.
Brevity is amazing. To wit, book-a-minute’s version of Dr. Seuss’s “Cat in the Hat”:
Sally and Me:
“We’re bored.”
(The Cat in the Hat shows up and wrecks the entire house. He cleans it up just before MOM gets home.)
Sally and Me:
“Let us never speak of boredom again.”
The End
http://www.rinkworks.com/bookaminute/
I just received an email today from a major distributor for our company, listing literally every major supplier we deal with and the push in core prices from 2-10% across the board. Reading the letter I was speechless at the number of suppliers on the list and the price increases. In all the years I have been in business I have never seen such a thing.
We will be raising prices by 10% this summer. I replied to him that with this kind of news inflation is going to be something of a wildfire that will show up later this year – he replied to me that there were so many similar responses to mine that they have actually set up a seminar to help everyone deal with the coming issue. I have the feeling a storm is coming in 2019.
“There was nothing near war in 1981.”
Not near World War, but the lead up to Iran/Iraq war did add jitter to the market that send oil price to north of $110 USD price in 1980.
“Stress tests will be 6% soon. 6% rates plus 2% stress tests up to 8% will blow it up. 1 in 5 can’t qualify now. Global debt problems everywhere that only need another 1 to 2% to blow it all up. Servicing government debt is critical right now letalone another 1%. Inflation is about to pop bigtime.”
I’m not an economist, but my take is that the stress test will only dampen some first time buyer and perhaps low end SFH and condos. Because, I assume that the majority of the population and people on this board is well prepared that we can handle 8-10% interest rate.
I would like to see hard numbers to prove that a couple of percentage of debt increase to send Canada to the brink of a default, because the few countries that went into default in the past decade were way over their heads in debt compare to Canada.
Today’s summary of Ross Kay:
1) If house prices fall by 30%, we will have a recession and lots of people will be unemployed (fairly obvious to most observers).
2) Everyone else is stupid and only Ross Kay has magical knowledge of the housing market (yeah, whatever).
There, I just saved a lot of people from wasting 30 minutes.
(Local Fool, I always appreciate your posts, so don’t take this personally.)
“We have zero interest in the core or anywhere near it. Ditto Westshore.”
I’m curious as to your reason for not living in the core or Westshore?
Unlike you. I’m thinking of downsizing, because our 20,000 sqf lot and 3800 sqf house is too much for just my wife and I. It is a 4 beds, 4 baths, den, and large 2 car garage house that I use as a workshop.
“IMHO, unemployment have to jump to at least 6-7% and mortgage rate have to surge to 6% or greater in order for us to see a significant correction. And, to see a market crash similar to the 80s there has to be something significant short of World War III for the market to take such a turn.”
There was nothing near war in 1981. Stress tests will be 6% soon. 6% rates plus 2% stress tests up to 8% will blow it up. 1 in 5 can’t qualify now. Global debt problems everywhere that only need another 1 to 2% to blow it all up. Servicing government debt is critical right now letalone another 1%. Inflation is about to pop bigtime.
Thought I would throw the latest interview with housing consultant Ross Kay up here.
While it contains all the self-aggrandizing it normally does, it has an interesting and IMO, fair commentary on the consequences of home prices falling 30 or 40%. Hint: It’s not pretty.
https://www.youtube.com/watch?v=tmUMTdiWRl4
Single investor bought up 10 out of 91 townhouses as presales in Richmond project using numbered companies, court case reveals
https://thinkpol.ca/2018/03/07/single-investor-bought-10-91-townhouses-presales-richmond-project-using-numbered-companies-court-case-reveals/
I read this comment online and thought it fitting to re-post:
Off your narc pills again Intorovert? Sad that the end is nigh and the pumpers have to take jokes and try to paint it as real. Some of you homeowners are a sick bunch. Stalked any child killers this week Inspector Clouseau ?
Law/Crim
“But when everyone wants a house, prices are rising at 15 to 40% a year, when you start hearing how things are different this time, it’s not the time for us to buy.”
Local Fool, my intuition tells me you have a Econ background. If so ditto.
Haha, good and observant question. For us (Mr and Mrs Fool), there’s a few things. We do have a strike price for what we want, where we want it. It does take into account movements in interest rates to a degree (we obviously cannot cover for every possibility, but we’ll only live once). We’d prefer a SFH, but could consider a townhome if it was designed right and gave me my workshop. Some maintenance of the freedoms we enjoy now are also important, as of course owning will have an effect on that. We have zero interest in the core or anywhere near it. Ditto Westshore.
I think right now what we want is a sense that a relative stability has taken a hold of the market. And that’s one part that that runs the risk of analysis paralysis, because I don’t have a good sense of what I mean when I say that. It’s a lousy and imprecise metric. But when everyone wants a house, prices are rising at 15 to 40% a year, when you start hearing how things are different this time, it’s not the time for us to buy. There’s no selection, the prices are ridiculous, the market is filled with speculators, and the headwinds are getting almost too numerous to count. We need a serious correction, but that will bring arguably even more serious problems at least in the interim. This needs to unwind, then we’ll see what it looks like. 🙂
Hi everyone,
I’ve been reading this blog since our family started looking to buy in Victoria. And yes, we’ve just purchased one. Most of you here seem to be very bearish on the housing market. I don’t recommend anyone buy or wait. However, I know some of you here are thinking about buying so lets me share our experience.
We were looking for a detached house, we needed 3 beds minimum and a usable backyard for our kid, dog and my gardening hobby in a nice neighborhood. My husband works in downtown, I work from home and we have one kid in elementary. We bought to live in. Our budget was 1.3M. We were particularly interested in the Saanich East area.
The inventory was very low during the time we were looking. I mean decent looking houses that met our requirements and budget. From January to March, I could only find one that met our criteria for every 4-7 days of new listings. We missed the first three houses when we didn’t even have a chance for a visit as our bookings were cancelled. They were gone in 2 or 3 days. We had our first visit to a house in Broadmead area. The house was in perfect location, everything looked great but it was at the top of our budget. We saw 4 or 5 other potential buyers at the open house. They reviewed offers the following day. I believed they had 4 offers including ours. Our realtor advised us to raise our bid but we didn’t want to stretch even more so we lost that one. I still didn’t know how much it was sold at. The second house we looked at had 5 offers after 2 days on the market, it was gone for 50K over ask, no condition. The third house was also gone with 20K over ask. Finally, “the one” for us, my husband went to see it the same day it was listed. Offers were reviewed the 2nd day, we offered 25K over ask with conditions on financing and house inspection. We were against 2 other offers. We think we might overpay 5K-10K but we are still happy because we like that house the most and that we were 200K under our budget.
If you are looking to buy something similar to what we were looking, be prepared to face competition unless inventory is much better in the next few months. There have been quite a few rental properties with suites or detached housed with some drawbacks (to us, big trees in front or backyard, cheap looking renovations by flippers, etc.) on the market but we weren’t interested in those. All the houses we were interested in were well-priced so they attracted a lot of interests. I was also well aware of the housing bubble but we need a place to live and we can afford it.
Potential dumpers, be warned: you may end up like Hawk, desperately predicting a real estate crash on a blog every day for a period of years.
You may also find yourself scanning real estate listings daily for price slashes, checking the B.C. Supreme Court website weekly for promising foreclosure numbers, and trying to persuade an anonymous blog community that you currently reside in the penthouse suite of the Oak Bay Beach Hotel.
Josh and Local Fool,
I bought a duplex a couple years ago that I plan on keeping for an investment property. I intended to buy a single family home, but I thought the market looked frothy, so I decided to buy a less expensive home and keep some cash for a correction. I’m curious, what will trigger you to enter the housing market? What kind of property will you be purchasing? Are you concerned you will have analysis paralysis?
“Speaking of upward pressure on prices. I see that 2751 Burdick in OB-Estevan is now pending for $1.31M; a mere $240k over asking.”
I could be out to lunch here, but I think it was purchased for the lot and location. The lot is a nice rectangular flat lot at 9000 sqf, assessed at $1,050,000, with adjacent lots are of similar size.
80/20
No idea why anyone would pay 1.3 for Burdick but I am not one of the big brains. But it has been a while since the Victoria market made sense tome.
I am surprised too. Can it subdivision (9000 sq ft)?
2438 Dunlevy St, same neighborhood, is listing @$1.35M, right next to an apartment and Fish&Chips….
Gamb, I think both the Moss Street $2M & Bank Street $1.6M are much better deals than Estevan OB….
There are only a couple of price drops in Victoria in the last 4-5 decades and that was contributed to the market crash, job lost, and high interest all coincide at the same time. IMHO, as long as debt can service there isn’t going to be a market correction.
In 1981 unemployment rate in BC were 6.8%, and mortgage rate was 21%. By, 1982 to 1988 BC unemployment was above 12% and peaked at 15% in 1984. If I remember correctly Victoria unemployment rate was 18% at peak, and mortgage rate was around 14%. Many families including mine were able to pay the mortgage (our were 18.75% variable at peak) because we were employed. And, the price correction was 40%.
In 2008 unemployment rate in BC were 4.6%, and mortgage rate was above 6%. By, 2009 unemployment rate jumped to 7.7%, mortgage rate at still at 6%, and the correction was 10-15%.
IMHO, unemployment have to jump to at least 6-7% and mortgage rate have to surge to 6% or greater in order for us to see a significant correction. And, to see a market crash similar to the 80s there has to be something significant short of World War III for the market to take such a turn.
LF,
It’s only sunny in Victoria, and nowhere else, ever. 😉
It was a joke Barrister. I stated it was the market top last spring and it appears it was regardless of a few suspicious over asks being touted. The masses are broke and borrowing their ass off to keep up the payments.
Canadian consumer debt hits new high amid watchdog warnings
A fresh wave of concern has washed over the growing amount of debt Canadians have piled up.
Equifax Canada said Monday that the country’s consumers owed $1.821 trillion as of the fourth quarter of 2017, a new high that was up 1.3 per cent from the previous quarter and six per cent from a year earlier.
http://business.financialpost.com/business/canadian-consumer-debt-hits-new-high-amid-watchdog-warnings
Kind of had to giggle at the innocence of this one. This is a virtually identical argument the Spaniards used just before their housing bubble burst.
Popular sentiment was that people all over Europe were buying vacation/luxury homes in Spain, and when folks started noticing the prices were getting out of hand, it was essentially disregarded on the basis that any dip would immediately be compensated for by continued demand pressure from European buyers. In other words, unsustainable market conditions were regarded as “different this time”. What better or more desirable place to buy a vacation home but somewhere on the Ibizan coast? The appetite was seemingly insatiable.
Oops.
Ya but what about the dumb money?
Don, there’s so many sweeping generalizations there, I don’t know where to start. People would sell because they’re no longer convinced they can rely on 15% YoY gains to keep their heads above water. A 40% decline at this point would only be a return to late 2015 prices.
Uhm…
Speaking of upward pressure on prices. I see that 2751 Burdick in OB-Estevan is now pending for $1.31M; a mere $240k over asking.
Any thoughts from the big brains?
So why exactly are people going to rush and sell their houses ? IMHO people live here because they love it. Anyone that bought in the last 5 years is staying and anyone who did not sell in the last 5 years is also staying. The only people in the core that use their house for vacationing are super wealthy and have many similar homes all over the world . So who exactly will be dumping their house because the market has peaked and will drop 20 -30 -40 % ? For most it will be a non event because they are not extended like is being hypothesized on this blog. Take a look at the weather in North America and see if that is discouraging people from moving here? Hello Demand!
I agree with little upward pressure on prices. But not much downward pressure on sfh prices till inventory builds a lot further. What could increase sfh inventory? In the short term spec tax and maybe change of psychology. I don’t think it will unfold that quickly.
Hawk:
Not sure that I backed up anything you said; maybe you are confusing the posts. Nor am I saying that you were wrong just dont know what you are referring to.
Do we any any idea to how many spec houses are even actually out there? I sort of got the feeling that a lot of them where sold last year and that the smart money got out of the market.
No worries bulls, debt is just another 4 letter word. 😉
Canada among three economies in world most at risk of banking crisis, BIS warns
“Global central banker raises red flag for Canada, along with China and Hong Kong, for its households’ maxed-out credit cards and high debt levels
Canada — whose economy grew last year at the fastest pace since 2011 — was flagged thanks to its households’ maxed-out credit cards and high debt levels in the wider economy.”
http://business.financialpost.com/news/economy/china-banking-crisis-warning-signal-still-flashing-bis-says-1
“Last spring seems like the time of peak prices in Greater Victoria. ”
Thanks for backing up my prediction from last spring Barrister. 😉
This could get real ugly fast. First they stop buying, then the dumping begins.
‘Fear and uncertainty’: Out-of-province homebuyers could rush to sell if B.C. slaps speculation tax
‘It’s like Saskatchewan putting (poison) on all their fields’
“CALGARY – Canadians are not rushing en masse to sell their recreational properties in British Columbia yet, but they’ve stopped looking to purchase vacation homes there amid growing fear of the province’s planned speculation tax.
http://business.financialpost.com/personal-finance/mortgages-real-estate/fear-and-uncertainty-out-of-province-homebuyers-could-rush-to-sell-if-b-c-slaps-speculation-tax
Not a prediction, just a desire. I think SFH inventory will only see a real blow up if inventory goes over 4 months and prices go south enough for speculators to flee, or a credit crunch (or both). I don’t think the latter will happen till late this year, if the hikes happen as planned. It’s still pretty stupid what people can afford.
LeoM:
Baring the unforeseen, I suspect that you are correct that any correction would be spread out over a number of years.There is a natural psychological resistance to lowering your price. Someone made the analogy to a large ocean liner which is generally true. It does not turn on a dime.
The slow motion correction has likely started.
Last year at this time houses were being listed on Thursday, open house on the weekend with hundreds of people attending, many unconditional offers to the listing realtor by Monday at 5PM, and then the realtors and prospective buyers went back and forth in a bidding war until all other bidders backed-out, leaving one unconditional successful bidder.
This year at open houses fewer are attending, other than neighbours, the banter of attendees is opposite to last spring, the frenzie has been replaced with rational thinking and pessimistic comments.
The first domino has fallen and the domino chain-reaction will continue in slow motion for a couple years at least. The great stagnation has begun, downward pressure on prices will increase as MOI increases. There is zero upward price pressure and enormous downward pressure this spring.
Last spring seems like the time of peak prices in Greater Victoria. The first week of August 2018 will probably give us confirmation that the party is over.
IMO, my guess is both will happen. We already know the possible reasons for the demand decrease (new tax, rates up, mortgage reqs tougher) Now add in guys like me looking at the market and deciding, “I think I’ll wait this one out”. For supply Leo mentioned a pattern of people rushing to list their homes once it’s obvious a peak has hit and that the market may turn.
As another Canadian data point, here in Calgary the market for SFH has really stalled (condos have been in the dumps for a long time now due to a major overbuilding of condos). February sales of SFH are 18% below last year. Anecdotally we’ve had our house listed for 4 months at a price similar to other comparables in the area – lots of showings, but no offers. Unlike BC there’s no new tax on the horizon here, but in talking with mortgage brokers and realtors, everyone is seeing a big slowdown due to stricter mortgage requirements, lenders requiring more documentation and the uptick in rates. With how battered Calgary’s economy has been for several years now, it’s been remarkable how resilient the RE market has been – but cracks may be starting to show.
Thanks for the numbers update. Any idea of split for condo vs SFH sales?
On the left coast, all the ills of the world can be cured if only they can be taxed enough.
Josh:
I can see a few factors that might lead to an increase of condo inventory but I am curious why you think the SFH inventory is going to dramatically increase (assuming that you do think that about SFH). Not saying that you are wrong but I was wondering how you see this. Are you that there is going to be a real drop in buyers or a major increase in people putting their houses on the market.
Ah, right. Thought I was looking at 12 months.
Josh
I think you are reading it wrong. No change. June 30th is not the end of the year. I think the end of the year would be Dec 31st.
Really want to see that inventory blow up. Why does inventory in 2017 end with more than 1900, then 2018 starts with less than 1400?