April 9th Market Update
Weekly sales numbers courtesy of the VREB.
| Apr 2018 |
Apr
2017
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 158 | 885 | |||
| New Listings | 331 | 1270 | |||
| Active Listings | 1842 | 1690 | |||
| Sales to New Listings | 48% | 70% | |||
| Sales Projection | — | ||||
| Months of Inventory | 1.9 | ||||
As we progress into the spring the declines are getting more pronounced in the single family market. The dip we saw a couple weeks ago has continued and I’m tired of saying it, but this is not the time of the year for sales to be flat. Overall sales are down 30% but in single family its north of 40%. Meanwhile inventory is up 10%.
Those sluggish sales are starting to show up in the days on market which rose from 13 to 19 in the past week. These are small increases but coming far ahead of the usual seasonal slowdown. On pricing, the median single family house is selling for 15% over assessment (estimated value at July 1, 2017) while the median condo is at 19% over.
The condo market, while not weakening as much as the single family market is still down some 30%. Inventory is still desperately low there though and new listings are not coming on quickly enough to change that yet. On that front, we will have to wait on any units to be driven onto the market from the spec tax (no real sign of that yet) or some of the very high level of new construction to be completed. Although much of what is currently under construction is already sold, many of those units are bought by investors/speculators and will hit the market after completion anyway to try to take advantage of the runup in condo prices.
Classy, people say this when they lack maturity and have no valid argument to contribute.
New post: https://househuntvictoria.ca/latest
RE Lost Soul:
Time to put Lost Soul on the ignore list.
Your copy/paste job doesn’t help me much, holmes. Give me a link directly connecting their growth to crap oil transport or I call BS!!!!
My family sold their house in Regina for approx. $120K in 2000 (bought in 1979 for $76K). It would now be around $300K.
When I moved here in 2001, a similar house would have been around $300K and would now be around $900K. You could also say $400K to $1.2M if you compare location (i.e. near the university). It’s hard to compare directly because the neighbourhoods aren’t exactly the same, and Victoria has a large price premium for certain neighbourhoods.
Since government salaries are public, I recently did some comparison, and the jobs I looked at had similar salaries. Imagine if you make $100K here or there, but an average house costs $500K less there. If only I could tolerate the cold. Apparently other people also see advantages worth paying for to be in Victoria. And they are able to pay, however that has been enabled.
“You understand that it’s coming to market regardless right?”
I don’t think he does. That generation’s engagement with problems is limited to tub-thumping and solipsism. It would be optimistic to try and introduce rationality into the discussion.
You need to learn how to use the World Wide Web:
Meanwhile, CN is focused on clearing the backlog, Finn said. CN Rail has ordered 200 new locomotives and expects to get 60 this year and leased 130 locomotives in the interim.
The company is also hiring more than 1,000 new employees
From Alberta.
It’s still coming from somewhere or you wouldn’t be driving around, or getting your garbage from China, or wearing Goretex rain gear or drinking out of plastic water bottles, or going on trips on airplanes or enjoying fruits and vegetables in the middle of winter.
Oh wait, it’s not the oil that’s the problem. It’s the people in this province who demand oil, and things that come from it.
While I don’t love flooding river valleys this does actually make sense. Massive backup hydroelectric storage enables more reliance on intermittent renewables like wind and solar. We are going to need a whole lot of that to wean the North American power grid off of burning coal for electricity.
De-carbonizing the economy is not going to be easy or cheap, but getting rid of coal fired electricity is a good first step. Metallurgical coal (most of what BC exports) can come later.
Assuming basic economics works, denying the oil cheap transport via pipeline will mean that less of it will come to market. If transport by train was a perfect substitute for pipelines, Alberta and the oil companies wouldn’t be in such a tizzy about needing a pipeline.
Show me proof of this, cite a source or something? Or I will deem you just another fear mongering politically driven crackpot like Don Pittis.
Hi Grant:
How about these (all allow pets):
http://www.usedvictoria.com/classified-ad/4-Bedroom-Full-House-on-Oak-Bay-Border-no-suites_31556916
http://www.usedvictoria.com/classified-ad/House-for-Rent-in-Gordon-Head—4-Bed-2-Bath-Fully-Renovated-Avail-Sept-1st_22251286
Actually there are quite a few (some have suite though) in usedVictoria with 3 to 4 bedrooms, allow pets and rent under $4k/m, and in good or okay locations
@Michael you are misinterpreting that population graph. Boomers are a spike, millennials are a block and the block is bigger than the boomers. Why do you think we are building bike lanes?
I so agree Deb.
I have had incredible luck with putting my needs out there. If you write a detailed, honest, well thought out ad people will respond.
Victorians will help out. It really is an amazing community.
@Grant
Have you tried advertising for a place in the area you want to stay in. That is how we have found our last 3 places. Granted we don’t have a dog but it is worth a try. Used Victoria always works for us and add a family photo. Be honest about your situation if you do get a reply.
Good luck.
You understand that it’s coming to market regardless right?
It’s just going to be coming in a railcar instead of a pipeline. CN is already upping capacity.
@Grant
If I were in your shoes, I’d call up Remax and see if they have any rentals. I think they tend to have a sales and property management division. If not them, then one of the other brokerages. A lot of realtors post available rentals, so they’re another source to inquire with.
I have seen some lovely Oak Bay houses for rent. They are out there. Join some Facebook groups like Victoria rentals and the Oak Bay locals group. People are amazingly helpful and have connections.
I can’t believe there aren’t
some really nice places for rent if you can afford them.
Where it is really tough is for people in the middle and lower end of the spectrum. Then all you have you have is crap.
Any who are opposed to transmountain please feel free to post comments on this CBC news article….
http://www.cbc.ca/news/canada/british-columbia/b-c-business-leaders-announce-campaign-in-support-of-trans-mountain-pipeline-1.4616388
Band together and stop this insanity!!!
“You must be desperate, dude. You’re reaching so hard!”
Desperate? Where the hell have you been? Scouring international publications for tourist brochures is “desperate”.
Victoria is front page international headline news for last 2 weeks from our local whistleblower . You’re looking at the back page where no one reads.
Horgan seems to be the only west coast premiere in the last few terms that hasn’t acted like some posturing gangster. I didn’t like his approval of Site C but on the whole, he’s doing well IMO.
The world is a complicated place, but given how dire the climate situation is, I don’t think that matters. Does generating a fatal blow to Canadian nationalism matter when we’re talking about Earth’s 6th mass extinction? I say no. The TL;DR of climate change and the Paris agreement is that we need to pivot hard and pivot now, and things are still going to get bad. Not only do we need to stop new exploitation, we need to scale back existing exploitation to zero and consider ways to extract CO2 out of the atmosphere.
Picking the middle of two extremes isn’t automatically correct. I honestly don’t give a damn about Alberta’s oil industry. They have other industries. They’ll adapt, as we all will. Or we won’t adapt and we’re doomed. I don’t think it’s that complicated.
@Introvert
It’s important to ask oneself why average home prices in Regina, Halifax, and Calgary aren’t $800k like ours, when we all had the same access to easy credit.
Also, keep in mind that foreign buyers have never played a substantial role in Victoria’s market.
How is 1 in 10 foreign buyers not a substantial role in Saanich? We actually don’t even know to what degree they play since numbered corporations and the various other loop holes allowed them to dump money here.
The price was driven up because non local buyers had more money than local buyers and they didn’t mind spending an extra $50,100 or 200k to buy a home they wanted. What do you think happened to the street where one lady moved from Van to be with her daughter and paid $200k over asking so she could be on that street. Her comment was something like “I sold my place in Vancouver for 2 million. What is another $200k over asking to live beside my daughter we still have a million in the bank. (I’m paraphrasing)
Now pump a bunch more of those through the system and eventually it will continually rise the prices up.
So rent for 2 years…
?
She doesn’t have to change schools once she’s in anyway.
If it works for our situation I will but it’s looking increasingly unlikely. We’ve been looking and not only is the rental market still pretty tight, but for our requirements we’re not finding anything, and that’s even with a (begrudging) willingness to pay close to $4K a month. Seriously I see more wanted ads seeking large Executive style homes for rent than ads for them. And we’ve got a dog. And I’ve got a daughter going into Gr 11 and we’re not going to disrupt her yet again once she’s into a particular school.
@Grant
Like so many have said on here, I think your best bet would be to rent to start with.
Rent for a year or so, figure out what areas you like/don’t like, look at a bunch of homes for sale and let the market work itself out as to which way it’s headed. One month in you might find a house you love, or maybe you’ll figure out the neighborhood you thought you wanted to live in, you don’t actually want to.
If you don’t want to rent, then another other option is to stay at different AirBNBs in different neighborhoods to get a feel for those areas. And then buy.
When I want to get a feel for a neighborhood I walk my dog through it and talk to the neighbors about the area; they’ll tell you all sorts of things.
“Sometimes” being when house prices are at a cyclical low and mortgage rates stay at all time lows for a decade. I’m certainly not going to argue with that.
What are the 3 Universities in town? Uvic, Royal Roads and…. SMU?
You must be desperate, dude. You’re reaching so hard!
Nice pic Intorvert. That’s the same pic CNN used yesterday talking about Victoria’s new notoriety as THE tech connection to the Trump election /Cambridge Analytica/Facebook/Russian fraud right out of Market Square. Such a great tourist attraction now. Come see where the dirty work really went down!
Canadian firm tied to Facebook data scandal got $100K from feds in 2017
Facebook has suspended AggregateIQ amid allegations data was improperly used
http://www.cbc.ca/news/politics/aggregateiq-facebook-liberal-data-1.4609167
“When credit tightens prices fall. When it loosens, they rise. Central banks are raising rates, and banks are now tightening credit both due to regulation and their own assessments of the market’s potential from here.”
Exactly LF. As usual Mike doesn’t get the big point that credit begins to tighten at the end of the credit cycle not the beginning. The US didn’t tighten even with rising rates til it was too late. Canada is doing it now because they know they are up shit creek and lent out too much money the past 10 years.
If we’re going to post fancy charts then pick a spot where you think Toronto is on the roller coaster then put Victoria in the last cart coming over the peak.
http://vancitycondoguide.com/wp-content/uploads/2016/10/Screen-Shot-2016-10-24-at-8.01.34-PM.png
It seems you and Leo are in agreement.
I think most people here get it, Michael. Higher rates imply a hotter economy, implying more wages, begetting higher home prices. Fortunately, it’s actually simpler than that. At essence, home prices are set by how much banks are willing to lend. That moves in cycles. When credit tightens prices fall. When it loosens, they rise. Central banks are raising rates, and banks are now tightening credit both due to regulation and their own assessments of the market’s potential from here.
Interest rates affect how much of that debt we can afford to carry, which is also subject to other variables such as income growth and inflation. Incomes are rising slowly, but consumer debt has been rising much, much faster and for a long time. Now we’re at extreme levels of consumer debt, and sitting on a precipice. Inflation could reduce the burden in nominal terms, but interest rates would spike even higher. This is the rock & hard place that has the BoC pooping bricks.
The only thing “mind boggling” here is if someone honestly believes that rising rates against our current consumer financial backdrop are going to somehow reignite the real estate gravy train at this stage of the cycle. Rising rates are actually one of the largest systemic financial risks this country faces.
I believe that is because gains in employment and income were stronger upward pressures than the downward pressure from rising rates. Both are pushing on the same lever of affordability
Oh, cool. Today the New York Times wrote a glowing piece about Victoria in its Travel section:
It begins:
https://www.nytimes.com/2018/04/12/travel/36-hours-in-victoria-british-columbia.html
“I think irrationality is the problem. For instance, it’s mind-boggling how everyone still holds onto the belief that if rates rise, prices must fall.”
Yeah that’s hilarious James. Mike doesn’t get that’s just why the US crash happened. Wait til we see BC tank as the debt bombs that didn’t exist in mid 2000’s explodes.
18%? Ouch. Condos next.
Ooops posted earlier but worth a second read.
What It Was Like to Get Caught in Toronto’s Housing Slump
“Some 866 homeowners had clinched a sale but were not able to close, eventually selling to another buyer later in the year for C$140,200 less on average. Some buyers had to walk away as they weren’t able to sell their own homes or the banks appraised the house for less than what they agreed to. Another 122 sellers sold their houses for an average $107,325 lower than what they bought it for earlier. By the time the dust had settled in July, the median price had dropped to C$626,000 from C$765,000 in March.
To put that 18 percent four-month decline in perspective, it took major U.S. cities 20 months on average for prices to fall 18 percent from their peaks between 2005 and 2006, with Miami the shortest at 12 months, according to the report.”
https://www.bloomberg.com/news/articles/2018-04-12/what-it-was-like-to-get-caught-in-toronto-s-record-housing-slump
I think renting can def. be more affordable. Here is an example of why it is more expensive to rent than buy sometimes and might be going forward.
Ex. SFH homes purchased for $589k in 2009. Mortgage is $2500/month plus about $500/month in additional ownership costs including repairs and maintenance. House has a suite that is renting for $1200/month. Means actual cost to live there for the owners was $1300/month plus LOC on the down payment of about $300/month. So $1600 a month total. In 2009 it would have rented for $2000/month for the upstairs and $2400/month today. And say the house sold for 800k last year – a profit of about $200k via mere listing and sold privately. So the owners gained $200k plus approx. 30k in lower COL.
So now the new owners have a house worth $800k and a mortgage of $3500/month. They would have paid $2400/month to rent the same space so lets say they are behind $1600/month. Less the suite income and they are behind $400/month and any income tax on the rental income plus the LOC on the down payment. Over time rents will rise and the home will appreciate. Likely they will be in a better position owning that they would have been renting as well if they don’t have to sell in a downturn and interest rates don’t sky rocket – which are risks that some people might feel better not having in their lives.
If you have extremely cheap rent and no suite the numbers will shift too. Extremely cheap rent and secure tenure (ie. parents’ suite? work in exchange for rent?) and I’d be tempted not to buy.
However demand certainly won’t outpace like it has over the past two decades. House-buying 30+ yr-olds are now in decline for the next ~20 years (especially in BC – see below). Also, the decades-long boomer upsizing trend has now started to shift to downsizing. That said, I don’t think SFH will see much in the way of nominal declines thanks to inflation & immigration, but in real terms they will underperform. Single-level houses with security & walking distance to amenities will fair better.
James my intelligent friend, I never once said correlation implies causation. I merely said “holds onto the belief that if rates rise, prices must fall.” Clearly that’s not always the case.
Thanks again Michael for proving you’re an idiot that still believes that Correlation implies causation.
As Leo S said, the Sooke Lake Reservoir supplies the core municipalities. It is a good question and we are lucky to have an excellent water system. If you are an infrastructure nerd, the history is well covered here:
https://en.wikipedia.org/wiki/Timeline_of_the_Greater_Victoria_Water_System
There are a few places in greater Victoria that have smaller local water systems, but many of those are also managed by the CRD.
https://www.crd.bc.ca/service/drinking-water/systems
While the CRD are good stewards, not all of these systems are as robust as the main supply system.
It’s not just rising rates by themselves. In 2012 Seattle house prices were at a cyclical low. I don’t know about Seattle in particular, but US household debt was under 100% of disposable income, another cyclical low. Also Seattle was heading into a tech boom that boosted incomes.
Also your graph is US Treasury yields. Take at look at mortgage rates and you will see that the rise, proportionally, was far lower.
http://www.freddiemac.com/pmms/pmms30.html
Try house prices and household debt at cyclical highs, and see what higher mortgage rates do.
I think irrationality is the problem. For instance, it’s mind-boggling how everyone still holds onto the belief that if rates rise, prices must fall.
(example)
What?? My picture of helicopters deicing wind turbines was over the top?
It’s true, and we’re paying more for water because we’re collectively using less of it.
Wanting the perfect option isn’t foolish as much as it is human. Thinking you can get it deliberately and through analysis perhaps is. That doesn’t stop people like us from trying though. It’s part of why my screen name is what it is. 🙂
You’re sensing risk on both ends, because there is. But it’s as I say. Regardless of market, don’t overextend, presume higher rates, and buy to live in for an extended time. But I don’t think you’re going to get burned waiting a bit, if you can.
Let’s be honest, Notley’s probably a goner irrespective of the pipeline outcome. The only difference will be whether she loses by a landslide or by a slightly smaller landslide.
I know.
Grant, I’ve got the solution.
If you can swing it, buy a home that you can afford that meets 90% of your needs for the next 20 years. Stay in the home for 20 years. In the end, you will do very well—there’s no need to worry.
“outdoor water use accounts for almost 50% of water used around the average home in the CRD”
I would hope people are being more responsible and that had lead to drop per capita.
Sooke lake reservoir: https://www.crd.bc.ca/service/drinking-water/watershed-protection/sooke-water-supply-area-(primary-water-supply)
What’s interesting is that water use flatlined after 1995 despite large increase in population.
Sick double burn.
@LocalFool
I vacillate between being confident and then not. I always want the perfect option, or at least to know with certainty which way things are going to go. It’s foolish for sure, especially on stuff like real estate where there are so many factors at play.
On another topic, what’s the drinking water situation like in general on the island? In my research on Mill Bay I’ve discovered they’ve stopped new development until next year due to water issues with the wells they rely on. That got me thinking, where does most of Victoria’s fresh water come from?
I think the numbers support your argument, however the political optics do not. Right now in Alberta you have a major percentage of the populace that are mad as hell Notley and the NDP are in power and worse, that they’ve introduced a carbon tax. For many it’s like Satan incarnate is at the controls. If this pipeline isn’t built, it’ll be one more nail in Notley’s re-election bid. And if the pipeline doesn’t get built, and Notley gets turfed and you have the atrocity of a Jason Kenney led government, oh boy, Canadians everywhere will ruefully wish for the days of the Notley administration. I kid you not – Kenney is off the tracks whacko, a little Republican wannabe.
Oh well, I guess I’ll pop some more popcorn and grab a seat to watch the fireworks.
Removed. I’m not allowing this blog to be used to spread complete nonsense. Take it over to vibrantvictoria - adminGrant, there are currently a lot of tankers passing through the Salish Sea and I don’t hear many people talking about ridding them. What’s at issue is whether we want a lot more.
Also, Alberta has been a “have” province its whole life without the Kinder Morgan expansion, so I don’t accept the argument that this project is crucial to Alberta or to Canada. Canada and Alberta will survive just fine if it fails to proceed.
I agree, Grant, that carbon taxes are good. But the feds have also allowed Alberta to increase its emissions by 47%, which is kind of nuts given what we know about climate change.
I am perfectly happy with BC coal business. BC has no moral right to criticize Alberta and its oil.
Both are being shipped out of the same area. Both are bad for the environment. Both are the old economy. Both are being sold to foreign countries. Difference is Alberta has to use BC`s port which the federal gov has approved.
Do you mean in homebuying? I had thought you were feeling confident, or were you just weighing that side of the argument?
They are comparing a “median house price” (which seems to include condos, since C$765,000 sounds too low for houses at peak) with the Case-Shiller US index which is a repeat sale index. Teranet which is also a repeat sale index doesn’t show nearly as big a decline, less than 10% off peak as of March.
Yeahright
The parking lot is huge and probably developed first until the leases run out.
True. Thankfully, if it’s not First Nations stopping it legally via court decision then it will be First Nations—and concerned citizens—stopping it via continued mass civil disobedience.
I’m guessing Trudeau won’t call in the Army to force this pipeline through. But, then again, I was wrong about Trump becoming president.
…. and one more for the “bears”.
https://www.bloomberg.com/news/articles/2018-04-12/what-it-was-like-to-get-caught-in-toronto-s-record-housing-slump
The 18% dive in four months was faster than in U.S. crash
A speculative mood hit Toronto,’ Realosophy president says
“To put that 18 percent four-month decline in perspective, it took major U.S. cities 20 months on average for prices to fall 18 percent from their peaks between 2005 and 2006, with Miami the shortest at 12 months, according to the report.”
@gwac > BC dirty little secret
Another piece of that article is that when you burn all the coal that’s coming out of BC, the CO2 produced is actually nearly the equivalent of what the oil sands is producing. Clap clap BC.
Iron building is included in the deal but not the business, it stays.
https://vancouverisland.ctvnews.ca/seven-acre-parcel-of-land-in-victoria-s-old-town-up-for-sale-1.3881521
RE: Josh’s post
Come on, are things in life EVER that black and white, or that simple?
Uhm, it actually isn’t stupid, it’s pragmatic. More on this in a bit…
So in isolation I totally agree with your comment – it’s ridiculous that with what we know about carbon and our environment, that sources like the oil sands are considered for future exploitation. It just doesn’t make sense. But we don’t live in an isolated or simple world!
Let’s see how quickly we can put out a spectrum of possible actions.
First let’s set the stage. Let’s all assume for the moment that global warming is real and needs immediate attention. Let’s also acknowledge that Alberta and Saskatchewan are, dumbly or smartly, incredibly reliant on O&G for public revenues, and in fact the economy in general. Let’s also acknowledge the massive amounts of dollars that have flowed out of Alberta as part of redistribution to the rest of Canada, so it’s not like only Alberta has profited here, everyone in Canada has. So, there’s absolutely nothing controversial in anything I’ve listed here.
So our options range from on one end:
1) “All hands on decks, we’ll ignore what the rest of the world does we’re going to be a shining beacon of light and we’re going to mothball those industries in Canada which are dependent on the carbon economy.”
To the other end:
2) “Screw the rest of the world, we’re going to double down on the carbon energy industry” (Which BTW is what Weaver argues Harper did, and I tend to agree with him)
And then we have our options in between.
Josh’s idealist approach is essentially #1. Now, let’s say we’re going to do that. The only way you wouldn’t implement that scenario and not generate a fatal blow to nationalism is to have all the other provinces start to massively directly financial support to Alberta. I can’t even get my head around how it would happen. But we all know that wouldn’t realistically happen. And if that financial compensation didn’t happen, you’d have provinces getting Balkanized so quickly our collective HHV heads would spin. Civil wars start over stuff like this.
So, can we agree we need a 3) something inbetween? And that’s where I think you make some lemonade out of all these lemons. The best scholars and smartest minds are coalescing around the idea that best, most realistic and serious approach to global warming is accomplished via the implementation of carbon taxes. That’s what Trudeau and the Feds want, that’s what the NDP has done in Alberta. But if you’re going to hit the industry, if you’re going to spur economies to transition away from carbon energy, it has to be done in a way that you don’t kill the patient in the process. Thus the federal approval of things like pipelines and in the meantime you hope like hell there is a massive push to diversify those provinces that are so reliant on carbon economy. As an added wrinkle, I really think the best solution is more refining within Canada, but it’s also the more expensive option and no one wants to pony the $ to do it! So again, we’re left to shipping the oil out.
This quandary we’ve globally got ourselves in is a real fucking mess. It’s going to take an intelligent and pragmatic approach to even try to solve it.
Just another take on interest rates and Central Banks.
http://www.cityam.com/283649/interest-rates-should-set-market-not-central-banks
“The US housing bubble was largely generated by the Federal Reserve’s one per cent interest rate policy of 2003-4, which resulted in more houses being built than were justified by the amount of resources and saving in the economy. In a free market, the sudden rise in demand for borrowing would have caused higher interest rates. The current protracted low interest rates have resulted in a global debt bubble which dwarfs the debt bubbles of the last decade.”
BC dirty little secret
https://dogwoodbc.ca/wp-content/uploads/2016/08/Coal-BCs-Dirty-Secret-web.pdf
a quote from the article
“coal is the single greatest threat to civilization and all life on our planet”
Where is Andrew on this???
How do countries with no fossil fuels buried in the ground pay for their social programs?
And Alberta is making sure of it.
I agree with you there. That the NDP is pursuing LNG is hypocritical and wrong. I don’t support it.
Electricity such a fine destruction of land has been done in BC and Canada to produce it. That’s ok…
They do. And so do you.
And BC should do the same with their coal.
If Alberta loves their dirty oil so much they should use it themselves.
To hell with shipping their dirty crap around the world, Alberta should stop being hypocrites and immediately start construction on a mega plant to process and burn their own dirty oil/bitumen and use it to generate electricity.
Alberta can then be a leader in supplying North America with electricity. Alberta can also deal with all the infrastructure required under the Paris Accord and Canadian environmental laws and disposal of the toxic waste.
North America needs energy, but it could be electricity instead of dirty oil.
Just like BC has no legal right to stop a federally approved pipeline crossing it’s land.
Blah blah blah.
Wouldn’t they just not send anything that could be used in Burnaby? They currently switch what they’re sending in the pipeline, from Gas, to jet fuel to Dilbit. Pretty easy to just send dilbit.
Considering something like 80% of the gasoline you currently use comes from this source, you should probably be looking for that cliff. Also the Vancouver Airport is 100% powered by jet fuel from Alberta.
Alberta isn’t going to cut off the oil because they have no legal right to do so, and even if they did it would create havoc with the petroleum industry, Trans Mountain, and TM’s customers in Washington State where most of the oil goes. Notley is just trying to sound tough which I understand since she has an election next year.
While we’re talking about coal, let’s note it’s Alberta that mines thermal coal and uses it to generate power, not BC. It also exports thermal coal via Prince Rupert. You might remember Christy Clark’s grandstanding last year that threatened to impose a tax on thermal coal moving through BC (no legal power to do so, but never mind).
Coal is much worse for the environment, and for individual health on account of mercury emissions.
So instead of getting it from Alberta because of risk of spills into the ocean by tankers, you’re going to get it from other places via tankers.
Well done… well done.
Pat
Read the article. Thermal coal and lots of it goes through the port.
“If there was a big slow down in RE do you think most people would keep their jobs?”
“Sure most people would keep their jobs. 85% of people kept their jobs in the early 1980’s in BC. 90% in the US a decade ago. It only takes a small % of the population to get into trouble to tank the RE market when prices are at historic highs, because sustaining such highs requires the best of all scenarios.”
Good reminder patriotz. In 1981 there was no soup kitchen lineups, no families in the streets. They just carried on, found a second job, found a better job, or just rode it out and cut back on wasteful spending. There’s more support systems in place now then there ever was back then, which was about nil.
10% can tank the market is all you need to remember, and by the looks of the debt bomb it will be more than that this time around.
Amen to that. I now have a very severe case of paralysis by analysis.
“The BC coal exported from Westshore is metallurgical, i.e. it’s used to make steel, not burned as a fuel.”
Lets not let the facts get in the way of gwac’s muddled hypocrisy, patriotz. He thinks Christy wouldn’t be doing the same but she did with the Northern Gateway that also went belly up.
Alberta wants it all, it’s their way or the highway after they blew the bank the last 20 years.
“On Tuesday, Premier Christy Clark said the pipeline will die if Alberta doesn’t negotiate with British Columbia over the sharing of economic benefits.”
““We will not share royalties, and I see nothing else proposed and would not be prepared to consider anything else,” Redford said Tuesday morning.”
““I think it’s a little unreasonable to suggest that I’m trying to destroy Confederation. I’m only trying to get B.C.’s fair share out of this project and make sure we’re protecting our environment. It’s as simple as that,” said Clark”
Sounds very similar to Horgan’s words.
http://www.theprovince.com/news/politics/alison+redford+turns+heat+northern+gateway+royalty+words/6982233/story.html
Where is the outrage????
No outrage because its coming from BC mines..
Gwac,
Thank you for bringing this to the forefront of the debate. Boiled down this issue is no different than transmountain, an environmental and health hazard exist.
In terms of outrage I think coal export has gone under the radar because the level of risk of environmental or health hazard exposure is lower being it is solid not a fluid like diluted bitumen. However, mixture with salt water due to shipping accident, storm surge or tsunami then outrage would fly through the roof.
Still I’m not pleased re: coal exports and will lobby to stop this before disaster strikes.
Yep its the good kind of fossil fuel that causes no harm to extract or use. Got it…..
BC good fossil fuel. Alberta bad fossil fuel. I think I understand.
The BC coal exported from Westshore is metallurgical, i.e. it’s used to make steel, not burned as a fuel.
Also the terminal isn’t in Vancouver, it’s in Delta. In any case the local government has no power to shut it down.
City of Vancouver now defines $3,702 rent as “affordable” housing
It’s 2018, and the City of Vancouver has changed the definition of “for-profit affordable rental housing”. For this year, a new three-bedroom rental on the West Side of the city with a starting rate of $3,702 per month is considered affordable.
A new rental in East Vancouver with three bedrooms with a starting rate of $3,365 is deemed affordable by the city. Also for the same part of the city, the following rates will be considered affordable: $2,505 for a two-bedroom rental; $1,730, one bedroom; and $1,496, studio.
https://www.straight.com/news/1039161/city-vancouver-now-defines-3702-rent-affordable-housing
They’re saying it won’t be long before cars don’t run on gas anymore? No, I guess they’re saying they can cut BC off from petroleum supplies. Aside from their having no legal right to discriminate against other provinces in supply, they seem to be talking at though it’s the 1970’s where oil was in short supply, rather than a sunset commodity that producers are racing to get rid of before the music stops playing. Actually they know the latter quite well, which is why they want that pipeline built.
http://nationalpost.com/news/politics/yes-anti-pipeline-vancouver-really-is-north-americas-largest-exporter-of-coal
Vancouver BC likes other kinds of fossil fuel. Hypocrisy is amazing.
Where is the outrage????
No outrage because its coming from BC mines..
Sorry Patriotz, I didn’t word that quite right but in my opinion and in reference to Leo’s last post there could be many thousands of good jobs lost in the construction and FIRE industry if there was a slowdown. That is not insignificant and I suspect there would be many more jobs lost than that if this turned into a catastrophic event. What happens when everyone stops rolling in money? Expensive tastes don’t go away.
Also something I’ve been thinking about in regards to moving up the RE ladder. I am thinking if you live in a fancy condo or townhouse you are probably not going to want to live in a crappy SFH which may be all the move uppers can now afford. Go from new everything to having to renovate and spend money you don’t have to get fancy cupboards. I know every time I have rented somewhere new I “move up”. Now that I rent a house I would never want to go back to basement dwelling. Luckily my place is not fancy and I’m ok with buying a house equally unfancy.
I was thinking the cheapest houses would get more expensive with the stress test because everyone could afford less but now I’m thinking the opposite. The people moving up now can’t afford anything as nice as what they have so they are waiting. Did anyone paying attention in 2007/8 see the results of this? Any predictions?
Solid rant, Josh. Respect.
We are using more and more oil every day. They’re not trying to help a private corp build a pipeline, they’re trying to get BC to back off screwing over a private company who’s building an already approved pipeline.
Alberta’s counter is: that won’t continue.
Its reckless and stupid to think our social programs pay for themselves.
There is no new economy as some would like people to believe that is generating massive tax dollars. . Its the old economy that pays for all those wonderful social programs people love.
Yep all is going to shit. Bla Bla bla. Endless rhetoric of doom and gloom.
LNG is NDP good but oil is bad. How much energy is used for LNG.
Socialist talk out of both sides of their mouth when it benefits them.
Just because people want it doesn’t mean we should sell it to them. Jobs-above-all-other-considerations is stupid and reckless, and is what is going to eventually destroy everything.
Decades from now our planet will be in shambles, half of all animals will be extinct, there will be heat waves and endless forest fires, and we’ll be saying, “Gee, at least most of us had awesome jobs back in 2018.”
Regina and Halifax have always been cheaper than Victoria, i.e. they started from a much lower base at the beginning of the runup. The fact is that the runup in prices has been Canada wide. Winnipeg has seen a higher % rise since 2000 than Victoria. Calgary and Halifax not far behind. Regina isn’t on Teranet, but I do know it’s a lot more expensive than in 2000.
Into
Its about selling or product to people who want it. This is good for our economy and good for jobs. Too much me in this province.
Josh’s essay is completely right.
It’s astounding that two levels of government are trying to help a private corporation build a pipeline to transport shit we know is hurting the planet and that we don’t need more of.
The argument that I use gas in my car is countered by saying, “Yes, I do. And it got into my fuel tank just fine without the Kinder Morgan pipeline expansion.”
Balls of Steel. Got it….
Steal is what the NDP is doing to taxpayers
Sorry for the confusion.
Sure most people would keep their jobs. 85% of people kept their jobs in the early 1980’s in BC. 90% in the US a decade ago. It only takes a small % of the population to get into trouble to tank the RE market when prices are at historic highs, because sustaining such highs requires the best of all scenarios.
It’s steel, geniuses. Had to chime in after seeing the mistake repeated ~6 times.
It’s not that demand can’t collapse, that prices can’t take a sizable plunge; it’s that prices probably won’t plunge to anywhere near the level that many hope/think. That goes for Toronto, Vancouver, and Victoria, IMO.
It can’t be totally understood; it’s too complex and we always have incomplete data.
And this is coming from Leo, you guys. I love what I’m hearing.
It’s important to ask oneself why average home prices in Regina, Halifax, and Calgary aren’t $800k like ours, when we all had the same access to easy credit.
Also, keep in mind that foreign buyers have never played a substantial role in Victoria’s market.
Interesting & worrisome article about Vancouver.
Housing starts roar as sales go quiet
https://biv.com/article/2018/04/housing-starts-roar-sales-go-quiet
Because they think the government will take care of them. I have heard many people I know saying the government won’t raise rates because too many people would be in trouble. I’m not sure what their threshold of “high” is but I guess that is what we are all questioning. What is the interest point that sends everything crumbling?
Totoro, I agree with some of your points but others I cannot understand. In what way is renting not affordable? If I were to buy the house I currently rent my monthly costs would triple (maybe quadruple). And if I were to buy an affordable house it would be in a less desirable location than where I live. Just curious about what you are trying to get at.
It is easy to say prices will go up in the long term so it isn’t risky to buy a house (for first time buyer) and that a job loss or illness isn’t likely. So if you happen to find an 800k house with a suite, it sure as heck won’t be in a desirable neighborhood. And an emergency fund and down payment? 2-300k isn’t easy for most people to save up. Seriously put yourself in someone else’s shoes before you give advice. Lay it out for us. Seriously. Give me real life examples.
This is why I can’t take your advice/predictions seriously. If you cannot imagine other people’s situations how can you make RE predictions? If there was a big slow down in RE do you think most people would keep their jobs? How big of an emergency fund do you think most people have?
Dasmo, perhaps. We’re just arguing intuition, though. But, I did point out earlier – similar reasoning was applied to Toronto and boy-howdy, did sentiment ever change. It would appear then, that that reasoning is not helping them much atm. Does that translate to here? I dunno.
But if people are convinced housing will quickly make them rich, you’ll never build enough. Conversely, if people suddenly are convinced they’re going to get Mattamy’ed and be financially FUBARed, you bet a significant portion of demand will evaporate even if much less was being built than there is.
I wonder why they would be interested in publishing that on the Vancouver Sun.
What about that whole global warming thing? You can’t support the accelerated exploitation of fossil fuels without being a climate denier. I suppose you could if you were a nihilist, but I’m assuming you don’t actually want to cause the sea to swallow cities, mass extinctions and the worst migrate crisis in human history.
Trudeau’s line of “let’s use the profits from oil to invest in clean energy” is amazing levels of stupidity. Or perhaps assumes amazing levels of stupidity in the public. Wind is already cheaper than coal and solar continues to plummet.
Ponder for a moment the total lunacy of taking chunks of tar-laden sand, diluting them with a mixture of salt water and hydraulic fluid, putting them in a pipe to ship across 1/3rd of the most mountainous regions of the world’s second-largest country, shipping them across the largest ocean, and refining it on the literal other side of the world. Do you seriously think that’s going to lower gas prices around the corner from your house? Do you seriously think we should be exploiting the world’s dirtiest source of oil after the Paris agreement? If so, it would be vastly more efficient to locate your nearest cliff and leap from it.
“Plus he probably owns a stack of oil stocks”
He is a she. She is very smart and good at her job. To discuss intelligently trying watching it.
No LF, we need overbuilding in a big way to drop prices – in a big way. We need to overshoot present demand AND have demand drop. Then you will be in full on buyers territory. Otherwise it will be as before. Opportunity for those bold to seek it but no obvious fire sale.
gwac,
ICYMI, that’s the interviewer’s job. BNN is pro oil, they pump stocks for a business. Plus he probably owns a stack of oil stocks.
Spec tax working on Van rentals. Victoria next. Good work Horgan !
New empty-homes tax beginning to ease the rental picture
http://vancouversun.com/sponsored/business-sponsored/new-empty-homes-tax-beginning-to-ease-the-rental-picture
Agree Leo, but that’s a different issue and something that’s been going on for a long time. I don’t really even think that’s a problem and it happens anywhere a city grows. However and IMO, compositional changes in inventory and resultant price growth in SFHs due to simple population growth is inadequate in explaining what this market, and many other markets in Canada, have seen over the last ~2 years. I know, you’re not saying it is.
I agree with Gwac who thinks that’s not as much as a factor here than in Van or Tor. Victoria has seen itself deal with increased speculation, be a pressure relief valve from other markets, FOMO, population growth, dropping rates etc. It’d be foolish to pin it to one cause. But I bet speculation and FOMO have made a substantive contribution within the last 2 years.
Another way to say this is, “we need supply to meet demand”. Yes, true. But as Gwac pointed out, it goes both ways: Either an increase in supply, drop in demand or both. Usually both. Lots of the former is coming on-line, if I’m not mistaken.
Hawk
The interviewer did a good job dealing with his BS and circle talk.
“Watch the whole thing. This guy is controlling the NDP and the province.”
Common sense always gets the righties tighties in a knot. 😉
“While we are on the oil subject…”
I like how Leif always repeats my posts. Keep up the good work lad. 😉
Back to the debt bomb and coming housing correction. If you wait for Stats Can to prove it then you’ve already lost bigtime.
Canadians warned to climb out of debt before it’s too late, as threat of cooling housing markets looms
“Hannah, president of the Credit Counselling Society, is seeing an influx of clients as higher financing costs begin to bite and people find it harder to manage. Phone calls were up 5.3 per cent in the first quarter from a year earlier, while online chats increased 40 per cent.”
http://business.financialpost.com/news/economy/dr-debt-warns-canadians-to-get-financial-houses-in-order
https://www.bnn.ca/the-one-way-b-c-will-back-down-from-trans-mountain-fight-1.1054793
Watch the whole thing. This guy is controlling the NDP and the province.
@gwac prices won’t budge in the stats until a lot more pressure happens. There is a huge perceptual crutch for sellers to list high and stay there. It’s that official letter they have telling them there house is worth one million dollars. This is why it’s only sales that are sliding. The other crutch is low vacancy rates so some that don’t sell can choose to rent if it works. It’s like post financial crisis. The stats didn’t show it but deals were out there.
@Leo, the immense complexity, cost and time it takes to build condos are the constraints. Land is as well but in relation to infrastructure. So condos can’t simply fill demand. They are built in a speculative way by nature due to the time it takes to complete. In reference to the infrastructure constraints I will say again, if the NDP was truly motivated to help the housing crisis they would have committed a tram link from west hills to downtown on the E&N ASAP. Then provided loans/grants for private industry to build affordable rental and owned high density dwellings along the corridor. We actually need overbuilding in a big way to have an impact on prices. Otherwise all that will happen is a handful of people will get deals on a handful of properties from sellers who find themselves in a bind.
Local Fool:
I am not really convinced that speculation alone was the major cause of the run up in prices here in Victoria. Obviously there are a number of factors but the two outstanding ones are a combination of low mortgage rates and a flood of retires from Vancouver and Alberta who had deep pockets.
https://www.bnn.ca/trudeau-to-meet-with-notley-horgan-about-trans-mountain-on-sunday-1.1054973
Horgan is going to lose the fight. This is more than just about a pipeline its about how confederation works. Do we want 10 countries or 1. Now how do we make Horgan look like he did not lose and face the wrath of the Prof.
I would love to be in that meeting. Alberta has nothing to lose in this fight and will go all out. Trudeau and Horgan have a lot to lose.
Alberta has paid way more into this country than it has gotten back and its time to get something back.
Does anyone have any idea what the average mortgage in Victoria is at the moment?
I am not sure why some people seem to be surprised that mortgage rates are moving back to about 5% or 6%. That is a pretty average rate and certainly, historically speaking, would not be considered high.
For a good period of time normal rates ran between 10 and 12% and thus was definitely not peak rates back then. A rise in interest rates was pretty well predictable and actually was a lot longer in coming than most people thought. Yet, some people are acting like it is a shocking development. On the other hand, at my age, I guess I should not be really be surprised.
As the city grows demand for SFH will outpace supply for sure, and has been for decades. Doesn’t mean prices can’t and won’t come down but SFH will get more unaffordable to the average family over time. There is no way around that. Condos is more the speculative mania I would say since there are no fundamental constraints to supply there. There might be temporary shortages but those will always be corrected by increased construction (like we see now). Just a matter of time. If you’re gonna invest in condos, it better make sense from a rental yield perspective.
No argument there. Haha!
Arrived back in Calgary to -4° heavy fog and snowing. North backyards have 3′ of snow while south front yard are barren really quite weird. HAWK I hope you are out enjoying Victoria’s fine weather, if only on my behalf, enjoy a cool one on some great little outdoor patio, cheers Bud!
LF
Something has to happen to either supply or demand for a correction here. Will that correction stagnate prices or send them down no idea. I stopped trying to understand this market along time ago. Everything is against this market/ rates/ regulation/ prices and prices have not budged.
Too much knowledge/being rational has been a bad thing in this market the past 4 years.
I read both articles and much to my surprise they contain nearly identical information. My guess is that the CIBC article duplicating previous information is to justify the horrendous monthly mortgage payment increases they are about to inflict on many hard working Canadians.
How opportunistic, I hope that come renewal time homeowners speak to their accountant or crunch the numbers from the bank to see if everything jives. This will be the next big bank scam some employee blows the whistle on…high mortgage payments that are not in line with promised interest rates. Then the bank will add it to fine print in mortgage agreement and make it all ok. Criminals.
Side note: CIBC would not even look at my mortgage refinance application to try and save my home before I was forced to sell. Is there a regulator I can report them to for this?
Not sure if population growth is above or below any long term trend. Regardless, the same argument was (and is actually still being) made by Torontonians. Centre of the universe, everyone wants to be here, choice destination from immigrants. So far, it’s not helping them as aggregate demand continues to collapse.
I can’t statistically debate your point on spec here vs in bigger cities, but you can make inferences from the suddenness and scale of the demand increase here – to say nothing of the hundreds of thousands of dollars that prices have suddenly increased. IMO, these are signs of speculative activity. Housing markets don’t just shoot up like that from organic growth.
Totoro
I agree with your post. The problem is most have neither of the two.
Rising rates just add to the issue. People can do whatever they want all I said was you have to have balls of steal to take on that much debt and more. I am sure there is credit card debt with a lot of these people with those size mortgages.
Local its all totally insanity. The problem is we have a huge supply/demand issue that is not going away with the expected population growth here in the core and on the island. Spec is not as prevalent here as Van and Toronto.
Losing a job – make sure you have an emergency fund.
Health issues – make sure you have disability insurance.
There is risk in everything. Don’t buy and you run the risk of lost affordability and equity as many here have discovered. I’m not saying that you should buy what you cannot afford to pay for, I am saying that not buying has its own set of concerns that I personally find way more risky than job loss or ill health.
If you are worried, having a suite provides some peace of mind and you can always rent out a room or the whole place and move into the suite if times are really difficult and you’ve just bought and don’t have enough equity to sell.
And renting is not that affordable in Victoria as an alternative unless you are willing to live in less desirable places than you would as an owner.
Thanks Leo and Patriotz.
Gwac, 2240 Woodhouse Rd is one such a case. Who knows how much they borrowed, but if it’s a fair bit, I suspect they’re going to regret it over the next few years. Balls of steel is one way to put it. Monumental foolishness could be another.
The degree to which people have a way of rationalizing and normalizing complete and utter insanity is quite interesting to me. People who don’t really ever leave this region have no idea how unhinged and frighteningly hilarious our market currently is.
If you feel some of the posts here are rooted in fear, nothing compares to the writings of fear mongering, politically driven crackpot Don Pittis….
http://www.cbc.ca/news/business/canada-real-estate-home-prices-1.4613215
Leif
My words were you have to have balls of steal to borrow that kind of money. Losing a jobs or health issues make that size unmanageable in bad times.
“http://www.rbc.com/economics/economic-reports/pdf/financial-markets/rates.pdf
RBC forecast rates from Monday”
Looks like a a bump up in rates for each quarter of 2018. That would put us 1% higher at the end of 2018 around 4.5% for a fixed 5 year and 6.5% for the stress test.
That is an extra $450 a month for a $600k mortgage.
Btw going back to whoever said a 600k mortgage is crazy I’m pretty sure that is where entry is on a 800k home these day’s. That is 25% down and then all the other closing costs, moving, furniture etc on top.
I look back and think how easy it would have been to buy a house in the nicer neighborhoods from 2013 to 2015 in terms of affordability in this city. That is not the case anymore which is why at least 6 or 7 of us posters who all make significant wages are on the sidelines.
My understanding matches patriotz however I thought when Teranet reduced the delay in their indexes they may have mixed in some current sale data as well. Don’t quote me on that but the Teranet used to be 6 weeks delayed, now down to 2 weeks.
Note that Teranet gets its data from Land Titles, so the index reflects the prices of properties that closed in a given month. As well it uses a 3 month moving average. This means the March index represents closings in Jan, Feb and March 2018, most of which would likely be “sales” (in real estate board parlance) that took place in 2017.
From that globe article
“For Vicki Clayton, the cost of her failed deal was even higher. After a buyer agreed to pay $1.9-million for her North York tear-down bungalow in late April, 2017, the transaction fell through as the market plunged and the two parties couldn’t agree on a lower price. She relisted her house and it recently sold for $1.27-million, a loss of $630,000”
The buyer could be on the hook for the 630k plus legal fees. ouch
Leo, in your opinion is it reasonable to surmise that that increase was from the pre-B20 rush?
We’re winning!
The Teranet–National Bank National Composite House Price IndexTM was unchanged in March – the first time outside a recession when the March composite index was not up at least 0.2 percentage points from February and the first time outside a recession when March indexes were up for only four of the 11 metropolitan markets of the composite index – Victoria (1.0%), Vancouver (0.5%), Winnipeg (0.5%) and Quebec City (0.1%)
http://www.rbc.com/economics/economic-reports/pdf/financial-markets/rates.pdf
RBC forecast rates from Monday…
Holy shite did I lose a lot of sleep over potential closing default on my recent home sale here. I guess it remains to be seen if prices decline as quickly as in Toronto?
Nice silver bullet Leif! I bet Trudeau or one of his team read this article and it took the wind out of their sails. I have a couple things to contribute from having my boots on the ground in the oilsands.
Believe it or not, many oilsands producers are already selling byproducts from heavy oil upgrading to overseas buyers. Getting the same byproduct along with bitumen and some other heavy metals, including and aside from ones mentioned in article may be seen as a good buy overseas(F****** nuts, I know). The reason is with the twinning of transmountain in place, transport costs would be lower. Buyers already in the producers rolodex may jump at the opportunity to pay a fraction for partially refined product. It will be very cheap but after final refining and shipping costs I don’t know where it will be compared to refined light crude.
The sad part in all of this for me is that technology has been implemented in the oilsands to minimize environmental impact (I believe much more can still be done) but in some places overseas lack of regulation and moral conscience would jeopardize an already fragile planet even more.
This pipeline must be stopped at all costs!!!
“Hundreds of homeowners whose real estate transactions collapsed in the aftermath of Toronto’s market plunge last spring lost an average of $140,000 in property value when they eventually managed to sell their houses, according to a new report.
The study is the first to measure the loss of market value associated with so-called closing defaults, an unwelcome reality of real estate that lawyers say surged in the last half of 2017.
The report also identifies high demand from real estate investors as a key factor that fuelled the region’s white-hot market in early 2017. Investors bought 16.5 per cent of all low-rise houses in the Greater Toronto Area in the first quarter last year, a 65-per-cent increase compared to 12 months earlier.”
https://www.theglobeandmail.com/real-estate/toronto/article-closing-defaults-hit-toronto-sellers-hard-in-housing-plunge-report/
While we are on the oil subject…
Here is an interesting view into why the pipeline and shipping from Vancouver is already inferior. I had not read about LOOP or the VLLC’S.
https://www.nationalobserver.com/2018/03/07/opinion/fatal-flaw-albertas-oil-expansion
“These are the reasons—hiding in plain sight—why Western Canada bitumen fetches the infamous “discount” price per barrel compared to oil supplies shipped from Texas and the North Sea. The LOOP terminal for VLCCs will magnify that spread, and no mythical Asian refiner, trader, or nation is likely to purchase for long a dirtier product that costs more and arrives on slower, smaller boats.”
“917k omfg. How much was a place like this 2012. 500k”
What was 5 year interest rates like in 2012 ? 5.37% . I’m sure it will revisit the old price as rates move back to that level over the next year or so, along with the stress test at 7.37% What’s a couple more grand a month on the mortgage these days eh ? Chicken scratch. 😉
So you’re saying we aren’t currently building thousands of rentals?
Well you pay for the privilege of the open. So it all depends on whether you think you will need to break it or not. Another strategy is to go variable, penalties are usually lower (commonly 3 months interest instead of the interest rate differential).
@Leif: I wish! Rockland area. We’ve found the city somewhat resistant to subdivision in our area. So much for densification!
@VicInvestor1983 and @gwac
2240 Woodhouse Rd is pretty much all land value
Total Value Assessed as of July 1st, 2017 $880,900
Land $818,000
Buildings $62,900
Previous Year Value $803,300
Land $736,000
Buildings $67,300
https://www.bcassessment.ca/Property/Info/QTAwMDBIUTk5Ng==
@VicInvestor1983 is your 1/2 acre in Oak Bay?
@Gwac: I guess that’s the land value now in that area! Boy am I glad I’m sitting on a 1/2 acre lot!
Thanks Leif, FWIW the new article was published by CIBC, haven’t had time to read BoC one yet.
Glad there is some forward thinking politicians versus the stone age oil based righties.
“Weaver said that while it’s clear the Canadian oil sector is hurting, the country’s focus on pipelines won’t help the economy.
“[Stephen] Harper and the Conservatives went all-in on an oil economy at a time when the rest of the world was diversifying its economy, and moving toward renewables, moving toward clean tech and bringing technology together with our resource sector,” Weaver said.
“Dragging us, kicking and screaming back to the early 21st century is precisely what’s going to leave us behind.”
917k omfg. How much was a place like this 2012. 500k
The flattening of the yield curve http://www.worldgovernmentbonds.com/country/united-states/ suggest to me that rates might not being going up very fast or very far lest they trigger the dreaded Trump-cession.
What was the sell price for 2240 Woodhouse?
$917,500 is what it shows on my list.
What was the sell price for 2240 Woodhouse?
@Lost Soul
https://betterdwelling.com/bank-of-canada-half-of-canadian-real-estate-mortgages-will-renew-by-next-year/
Looks like November 2017. On google you can click “Tools” -> “Time” and select a custom range. I find it very useful when trying to read past news and or recent news within the past few days etc.
https://www.bnn.ca/b-c-green-party-s-weaver-slams-alberta-feds-panicked-trans-mountain-response-1.1053989
Wow the beaver is ripping it up! I too think Energy East was the way to go or at least refine it somewhere on the west (BC or AB) not shipping bitumen to China or SEA.
It is great to see the her yaking away and Weaver laying it down.
As far as I can tell Leif this is a new report on many major media websites. Can you please post a link with date of original article from last summer? People are already getting caught with their pants down (like myself) and are forced to sell or default if they can’t pay outrageously high monthly payments. This is just the beginning IMO.
~buy gold 2018
Interest rates are rising as we type – the Fed’s moves are raising rates in the bond market which is where mortgage rates are set. I commented about this previously. Cheap money has be sloshing around the world for far too long – we are now seeing some inflation and labour market constraints – rates must rise and I expect the BOC to move April 18 or May 30 – let’s get on with it.
As far as the pipleline goes – one view is the BC [NDP and Greens] are forward looking. Let’s stop being the Trudeau Sr. and Jr. lap-dogs for the USA. Alberta always wants to strut about their bitumen wealth. Come on – Canada would be far, far better off if we stopped being a branch-plant for the USA. Canada needs to develop refining capacity and refine our own bitumen in to oil and gas that we can sell to the world and become energy independent ourselves. Why is eastern Canada importing oil from Venesuala to refine. Energy East was a better plan that Trans-Mountain. A Texas company looking to profit and reward its own shareholders – they must be laughing.
I am not a fan of the Green Party, but spend 12 minutes watching this exchange:
https://www.bnn.ca/b-c-green-party-s-weaver-slams-alberta-feds-panicked-trans-mountain-response-1.1053989
Or, do you favour this bullying:
https://www.bnn.ca/alberta-prepared-to-stare-down-b-c-over-trans-mountain-notley-1.1054069
Developing a refining platform in Canada [do it in Alberta or in BC or both] will create great wealth for Canada.
Yup. The court will force BC to accept its fate. Horgan will be deeply disappointed, but we have to respect the court decision. Notley will be the new hero in Alberta, she will save the environment by intro more taxes. Selfie-boy is a happy boy, $$$ to the East and RCMP will do his dirty work.
@Lost Soul that was originally posted about sometime last summer or fall regarding 50% of all mortgages coming up for renewal in 2018. The question will be before or after rates go up again and again.
I’m curious if Poloz will raise rates in the next meeting or May as has been suggested in another recent post.
Lost Soul, the worst news seems to have been missed today. Rates are heading up bigtime in the US, which means 5 year rates here going up in tandem effecting the stress tests even more.
The Federal Reserve plans to hike interest rates even faster
“Buoyed by a strengthening economy and increased confidence that the Federal Reserve will reach its inflation target in the near future, central bank policymakers suggested the path of future rate hikes could be “slightly steeper” over the next few years than previously thought, according to minutes of their March meeting released on Wednesday.”
http://money.cnn.com/2018/04/11/news/economy/fed-rate-hike/index.html?sr=twCNN041118economy0628PMStory
Gas=liquidity
Will the market reach the gas station? Will it run out? Will the hike to the gas station be long or short?
@Barrister
11 year old yoddler in Walmart:
https://www.youtube.com/watch?v=jlmNwjdYVnk
@Grant
Yes, the BC liberals are incredibly corrupt.
@Dasmo
Good analogy. Curious to see how many months this phase lasts.
This is why I say the market is sputtering. It’s like when you run out of gas. You don’t just slow down or stop…. you surge and slow surge and slow (and pray you make the gas station). Cream that has all the check boxes for someone ready to buy pops up and Bam. While other places sit…. wirrrrr. This is also why you won’t see price reductions in the stats. The houses that aren’t selling are just sitting with small incremental price reductions as the sellers aren’t desperate enough especially when they see the place a few doors down get listed and it sells instantly, overnight. So everyone is confused.
Oh boy…look at this…half of all mortgages up for renewal in 2018?
https://www.bnn.ca/nearly-half-of-canada-s-mortgages-up-for-renewal-in-2018-cibc-1.1053959
http://www.news1130.com/2018/04/10/home-construction-surges-metro-vancouver-led-condos/
Construction is at record highs all across the country. This means we will have a record number of units coming on to the market for the next few years no matter what happens to prices. Construction will eventually drop with falling prices, but historically this has not been accompanied by rising rents. One big reason is that when RE amounts to an all time high % of the economy, there is a significant dropoff in average household income during RE downturns.
Marko this what confuses me too. Houses seem to be listed higher than I think it should and then sell quickly and at or over asking. Other houses sit there. It is messing with me a bit because I’m waiting to find something and so surprised at the prices this year in what seems to be a less heated market than last year. The only thing I can think of is that the sentiment hasn’t quite changed yet. These buyers don’t read the news? The people paying these prices have no doubt that prices will be higher 3 months from now because they have already seen the increases over the past few years and their dreams of home ownership slipping from them. It is a last ditch effort before the next big increases. Or maybe people finally able to move up with big gains on their condos?
Marko, any pattern via market segment, or is it everything?
Everything from crappy old condos to house in Sun Rivers (Sooke) you see going over asking.
Kudos Grant, it partially opened in December 2017. What’s missing in the ability to refine dil. bit. into gasoline or even diesel here. This refinery is only refining light oil to produce diesel now. They are a long ways from producing gasoline from heavy oil in Alberta. It’s not economically or environmentally feasible like your post mentioned.
Spoken like a true Albertan supporter but hey I admire anyone who does not contribute to fear. They just have to be honest with themselves in the process.
Thanks for the support Introvert and for teaching me how to quote a comment. +1
Yeah, I think what gets lost in the news sound-bites, is that the issue is deep and complex. Alberta has painted itself into a corner and now is holding BC hostage to solve its mismanagement. Low royalties followed by a drop in prices led to a glut of capacity. In Canada we have a long tradition of exporting jobs.
Sadly David Black’s Kitimat refinery seems like a long-shot (thanks for the link, Introvert).
Personally, I think they should rebuild the refinery in Kamloops. It is in the perfect spot for the existing pipeline and could supply all of Southern BC. This would ease our reliance on Washinton state refineries.
Anyway, behind all the smoke and noise from Notley, in fact Horgan has actually done very little to stop the pipeline beyond asking for a court ruling on jurisdiction.
Link from patriotz below:
Marko, any pattern via market segment, or is it everything?
What an odd market I am seeing….sales slowing for sure, lots of price drops, new listings very low by historically comparisons and an abnormal number of properties going over asking price.
2016/2017 made a lot more sense….a ton of over asking but very few price drops with high sales.
It’s like the pattern right now is it gets listed and sells over asking or it doesn’t sell.
Source: Canadian Centre for Policy Alternatives
I’m pretty sure we have always had it backwards: corporations should be begging the government to operate in our abundant province, as opposed to the government begging corporations to crap on our environment for measly royalties and ephemeral jobs.
Apparently, when bitumen mixes with sediment (e.g., from the Fraser River delta, hello!) it tends to sink. Also, the studies on bitumen that they’re doing are in a lab in Saskatchewan, if I’m not mistaken. So, real-world studies! No worries there…
Alberta has always been shortsighted and seemingly can’t break the habit.
It bites them at every oil downturn, and yet they never learn.
GTA House Prices Falling Furthest Where Investors Once Dominated
…Realosophy Realty published a report titled Freeholds on Fire: How Investor Demand for Houses is Driving Up Prices in the Greater Toronto Area that looked at how investors in the GTA were impacting the market for single family homes.
Looking at the areas that have had the steepest decline in prices during the first quarter of 2018 versus the first quarter of 2017, it’s no surprise that the areas that were once dominated by investors are showing the steepest price declines.
We published our report to caution buyers about the impacts this type of speculative buying might have on the market in these areas. One of the key signs of a housing bubble is when more and more people start to buy real estate strictly as an investment rather than as a place to live.
This means that as a home buyer you want to be more cautious about buying in a neighbourhood that has a high number of investors.
https://www.movesmartly.com/articles/gta-house-prices-falling-furthest-where-investors-once-dominated
I’m sure I’ll get jumped all over for this comment, but with new tanker designs the chance of a spill is actually very, very low. I totally get the desire to not increase the chances from what they are, but if there truly was a iron clad principle that “beaches aren’t a science experiment”, then all existing oil tanker traffic should also be banned immediately. A bitumen spill would likely be worse, but let’s not kid ourselves because any oil spill would be a disaster.
Some of the references from that national observer link on the changing dynamics of shipping oil bear vetting out. However I can’t imagine the oil execs in Alberta are ignorant of them – they aren’t going to build a pipeline if there won’t be tankers to pick it up.
Anyways – that’s enough from me on this off topic item.
“As most of us are aware, the GreeNDP recently instituted campaign finance reform”
Yep more theft from the taxpayers
“The national observer Hawk . Not oil friendly.”
Because they post actual facts and numbers that doesn’t conform to the influential massive money the oil & gas corps swing ? Bummer you don’t want to hear about facts.
If was going to spend billions on a pipeline, I think I would want to know if the ships are able to maximize my investment and aren’t going to competitors in the US instead or insist on major price cuts to the bitumen junk oil after the fact. I think it’s called being a smart businessman.
I’m all for oil and gas bizz too Lost Soul but lets step back and look at the emergency oil spill response teams ? Where are they ? Not a peep out of JT and Notley.
That was Horgan’s first reason for not wanting the pipeline and they have yet to produce a game plan. Sorry, but my west coast beaches aren’t a science experiment.
On that note, the new North West Refinery is now (2017) in operation in Alberta, and its the first refinery built in Canada in 30 YEARS. (kind of astounding isn’t it?) The Alberta government and industry would love to not have to ship oil out because oil producers are losing gobs of money on the price differentials between WCS and WTI. But here’s the rub – nobody wants to take on the risk of building the refineries and even NWR has been derided as a boondoggle. The refinery is currently doing 20,000bpd (adding a value of $23/barrel margin to producers) and will scale to 80,000 by summer 2018, but it’s pretty small in relation to production capacities. Proposals to bump up NWR capacity are not being warmly received in Alberta because existing costs for NWR have soared to $9.5 billion (a doubling from $5.7B estimates). The Alberta government contributed a lot of dollars to the project and is considered to have been an unwise investment.
So the appetite for new refineries isn’t there which means the alternative is to ship oil out. Pipeline, rail tanker, whatever, because the economics are so much better to get the refining done in Asia or the US. And in the bigger picture everyone wants to fill their car up with gas for cheap (and keep all sorts of transportation related costs down), keep refineries out of their backyard, restrict oil movement through sensitive ecosystems, keep jobs and reduce carbon output. See any problems with that wish-list? But I digress..
Personally I don’t feel too sorry for Alberta’s plight. They’ve made their bed for the last 50 years and the lack of economic diversification is now really starting to bite. But I’m actually proud of the current NDP government because they recognize the situation and had the balls to implement a carbon tax. In return they bargained with the feds to get this pipeline built because the economic conditions in Alberta pretty much require it. And BC is (rightly or wrongly, the distinction is irrelevant) boxing Alberta into a corner. It’s a wounded cat and the fight could get ugly.
Yes.
David Black first proposed such an idea six years ago, but it seems to be going nowhere.
http://www.cbc.ca/news/canada/british-columbia/media-mogul-david-black-makes-another-pitch-for-his-northern-refinery-1.3922739
Some aren’t. Some are. Some really are.
As most of us are aware, the GreeNDP recently instituted campaign finance reform:
http://www.cbc.ca/news/canada/british-columbia/b-c-government-to-ban-union-and-corporate-political-donations-1.4295482
That is sobering as hell, thanks Hawk. Wake up Alberta before it’s too late.
I think politicians care about seats. Those 2 represent what the population felt about the NDP and their great 90s success.
I appreciate your kindness, all of this info on diluted bitumen makes it very difficult to support twinning trans mountain pipeline, even for someone such as myself who is in support of Oil and Gas economic growth.
Crap oil shipping out of BC puts our ecosystem at great risk. If this pipeline goes through I will devote my life to preventing a spill and training to be qualified if one does (optimistic new found purpose ha)!
The false instant economic gratification from this pipeline creates a huge illusion for Alberta, it’s painfully short sighted. Please join me in stopping this.
The national observer Hawk . Not oil friendly.
https://en.m.wikipedia.org/wiki/National_Observer_(Canada)
Who cares about seats gwac. The numbers prove you’re full of it.
Governments change every ten years which is good for everyone. The facts are the books are cooked but the voters don’t see it til now.
Money laundering is rampant and the economy is built upon the next fool buying your four walled shack. Usually referred to as a house of sand economy.
Some food for thought for the pipeline pumpers. The shipping game is changing and this pipeline could be a massive mistake. Not to mention the low bitumen quality.
The fatal flaw of Alberta’s oil expansion
“Any VLCC from any country can now unload or load at LOOP. They can bring oil from the Persian Gulf, Nigeria, Russia, or Brazil. They can carry it—two million barrels at a time—to China, India, Indonesia, or Europe, at a shipping price lower than smaller tankers. And because the LOOP bi-directional pipeline can pump oil at a mind-bending 100,000 barrels per hour, supertankers can arrive with one load for refining and take off with another, by barely dropping anchor.
That will likely prove fatal to Alberta’s plans to expand unrefined bitumen exports either by the proposed Trans Mountain pipeline to the British Columbia coast, or the proposed Keystone XL pipeline because:
• Potential foreign refiners and customers will demand that future oil price, quality, shipping costs, and delivery speeds match those that LOOP can offer.
• For marine safety reasons, the maximum oil tanker cargo allowed through B.C.’s Burrard Inlet is an Aframax class ship at 80 per cent capacity carrying 550,000 barrels, only about one-quarter the load of a VLCC. That means a refiner in Asia would need to book and pay for four tankers to ship the same amount as from the LOOP terminal, then wait longer for the full order to arrive.
• The diluted bitumen Alberta wants to export has chemical and combustion properties that make it far inferior to the higher-quality oil LOOP has access to from U.S. formations in the Dakotas and Texas, or OPEC countries, or North Sea producers. Tar sands/oil sands bitumen can be upgraded and refined, but that adds significant costs and requires dedicated facilities.
• The terminus of the Keystone XL will be refineries on the Texas Gulf Coast near Houston which are not connected to the LOOP. Even if future Alberta bitumen were to be refined there, it would take three fully-loaded Aframax tankers leaving Texas for ship-to-ship transfers to each VLCC.
These important changes in tanker and terminal technology and scale are no secret in the oil industry outside Canada. Nor is the dirty chemical composition of tar sands/oil sands bitumen. Nor is the cutthroat competition among global oil producers, refiners, shippers, and speculators, in which nickels per barrel of oil delivered are fought over fiercely.
In fact, the bad news for Alberta’s oilpatch has been building for a decade. That’s when shipbuilders in South Korea, China and Japan began constructing what has become a global fleet of about 750 VLCCs (with 50 more ordered for 2018), and the scrapping of Aframax class tankers began accelerating. This in turn drove down the benchmark price for ocean oil shipping, triggered the LOOP terminal upgrade, effectively consigned oil terminals like those in Burnaby, B.C. to minor league status, and left oil deposits far from deep port tidewater at a significant cost disadvantage.”
https://www.nationalobserver.com/2018/03/07/opinion/fatal-flaw-albertas-oil-expansion
Hawk 2 seats. They did a good job???You and a few other clueless people I guess think that. 2 seats from 51. . Do I have to type that again.
Any thoughts on the merits of closed versus open though? The bank I’m looking at getting a mortgage with offers 5 year fixed in both open and closed, but the rate is lower for closed.
Sorry lost soul. That is horrible.
“NDP did such a great job in the 90s Caveat.”
Ahh, the 90’s yes. The largest commodity crash in history where no government could have done better. NDP did more for the economy than Libs did when the market turned huge in 2000’s as Campbell killed jobs by ripping up contracts and killing wages too. Might want to check your fake facts gwac.
“From 1992 through to 2000, during the New Democrats’ nine full years in power (which excludes the last two months of 1991, and the first four months of 2001), B.C.’s GDP grew by an annual average of three per cent.
Under Gordon Campbell’s BC Liberals, provincial GDP from 2001 through 2008 rose by an annual average of 2.8 per cent. However, if we include the Royal Bank’s estimates for 2009 and 2010, that number slips to 2.4 per cent.”
I was prepared to lock in for a 5 year fixed closed term or even longer if possible to wait out the storm. I could not get a reasonable renewal from my secondary lender for one year let alone 5. My private lender offered near criminal interest only 2 year term thus I was forced to sell my home I worked so hard for. I fear so many people will get caught thinking they can afford a renewal with interest rate increases only to be forced to sell with potential value depreciation shortfall that will no cover their mortgage. If someone in this position does not sell now (I know only applies to some) the only way out may be consumer proposal or bankruptcy.
Banks do not give out long term open mortgages in my experience, too much risk but how sweet it would be to find open 5 year these days…
“Horgan has box himself in with this pipeline and there is no way out with him looking good. Which impacts investment in this province.”
The desired pipeline hasn’t been there forever and BC is still in fine shape. Only the paranoid right wingers spreading fake news is the problem.
Horgan is cleaning up the tens of billions in debt the Liberals have left us in after lying about the books,as only thing the righties are good at.
@CE
“What would that comparison tell us?”
I am interested to see if all these new rules and regulations cause a slow down in new condo and housing construction starts for sale. There may be an uptick in rental units.
I suspect there will be a significant slowdown in new construction, comparisons to previous monthly stats will show what is happening.
Thank for for the study gwac but I have hands on experience working with diluted bitumen. One study cannot provide blanket assurance. Why? Particulate levels and viscosity will vary depending on location of extraction and quality assurance/control (which in my experience operators don’t really care about.. especially with a partially upgraded product because there will be no accountability, just finger pointing).
In full agreement Josh. Notley is scared of the election next year and trying to act like the tough chick but will backfire in spades.
Josh
What Alberta is doing is exactly the same as BC is doing. All about the province and not what is good for the country. We have 10 rouge kids and a spineless parent off taking selfies.
Does anybody have any strong opinions they can share with me on a closed mortgage, versus an open one? It seems to me like as long as you don’t plan to re-finance or sell mid term it’s probably a negligible difference. Thoughts?
So right-wingers are all “I thought this was Canada!” when BC said maybe non-BC residences shouldn’t be able to speculate in our housing market, but when Alberta cuts off gas supplies for reasons that can only be described as greed, they cheer? Typical right-wing hypocrisy. I used to think Notely was just a greedy child but apparently, she’s also dangerously idiotic. She’s an embarrassment to the NDP.
http://www.macleans.ca/society/does-spilled-pipeline-bitumen-sink-or-float/
What the studies actually say about it and water. It will not sink right away. There is time to clean it if there was a spill.
There is no argument there needs to a extremely robust spill response in place 24/7.
@Patriotz
“A new condo has to be sold to somebody.”
I don’t know how to be more clear, I am saying there will be way fewer condos built, period.
If there will be way fewer buyers, whether investors or 1st time buyers because of all these new rules there will be way fewer condos built, therefore rents will increase, eventually significantly.
There is parkland refinery in Burnaby but it does not have the capacity to take in large quantities of diluted bitumen. I’m sad to say until we have the facilities to refine products of heavy oil upgrading much, if not all of this crap oil will be headed overseas putting our marine ecosystems in extreme jeopardy. Why? Dil. Bit. (Diluted bitumen…is full of sand and other particulates that sink in water). Cleaning up a spill is not possible no matter what billion dollar ocean protection plan is in place and Trudeau knows this now. Leave this shit in northern AB where is belongs, they could have had a refinery built there years ago but greed and over development of heavy oil upgrading facilities prevented this.
To the south, there are many refineries in Pacific NW (which do not want shit oil to refine) so Alberta choking us off won’t last long, USA will gladly sell us more. Alberta is shooting themselves in the foot by losing BC as a oil buyer with all of their rhetoric and bogus legislation that will most likely be overturned by the supreme Court in the long run but I’m no lawyer so Barrister can you provide some insight on this?
Rant over.
What Alberta NDP has in store for BC`s NDP. The economy and tax payers will pay the price of this disaster.
No leadership from Ottawa. This country is turning into 10 different countries.
http://calgaryherald.com/news/politics/braid-coming-soon-the-ndp-bill-to-choke-off-fuel-to-b-c
What would that comparison tell us? The effect of higher interest rates? The effect of declining affordability? The effect of mortgage rule changes? The effect of the spec tax? The effect of inflation in building costs? Reversion to the mean?
Quite a few moving parts.
Personally whatever happens I will be blaming Trump.
Liberal still ended up with more seats than the NDP after 16 years of power and being so “horrible”.
The current duo though is a shit show of epic proportions. No company would would invest big dollars here with the uncertainty that is going on. Who know what the next tax or legislation could be or the next policy to kiss ass to the Green.
Horgan has box himself in with this pipeline and there is no way out with him looking good. Which impacts investment in this province.
Harcourt was one of our better premiers and history will be kind to him. Glen Clark not so much.
NDP in 2001 are not the first nor the last to suffer electoral wipeout . Socreds in 1991 – 47 to 7, PCs in 1993 – 169 to 2
Barrister “CAN WE STICK TO HOUSING AND GET OFF THE POLITICS”.
I don’t think they are separate.
gwac “Liberals will be back in power soon stopping the theft from tax payers”
Ha, ha, ha, ha, ha, ha. Liberals stopping the theft from tax payers. Ha, ha, ha, ha, ha, ha.
I think that is too cynical a view. I would agree that corruption spans ideologies. But there are individual politicians on both sides of any political fence who are much more and much less corrupt.
Jimmy Carter was more honest and less corrupt than Nixon, George HW Bush was more honest and less corrupt than Bill Clinton
On the topic of Politics…when was the last time BC had a leader with leadership qualities?
BC has had more than its share of leadership or lack of it since mini-WAC stepped down (he got Expo86/ SkyTrain/ and the Coquihalla built). Who can forget Vanderzalm (always in Fantasy Land), Mike (Bingo Gate), Glenn(Can you fix my deck?), Campbell (Drunk in paradise), Christy (Crusty), and Horgan (Weaver’s B____) How time flies when you are having fun.
Agreed. You’ll never find a political party you can’t find dirt on, throw dirt on, or smell dirt on. Cynicism in politics is not without reason.
Having said that, I say selfishly, I don’t want this oil feud to cause gas to go to, “it’s different this time” per litre…
NDP did such a great job in the 90s Caveat.
They went from 51 to 39 to a grand total of 2. Yes 2 seats in 2001. Go NDP….
The mismanagement of policies and uncertainty is right back this time. Taxes/ big budgets and BS about revenue targets.
There is a Victoria Swiss Society – they’d be a good place to make inquiries.
Not sure if yodelling is quite the thing in Lugano though. I associate it more with the german speaking cantons.
I am not an ardent NDP supporter, but the corruption level of the BC Liberals had ascended to the point where they badly needed to be turfed. In general democracy works best where governments get kicked out after a while. Too long of ANY government breeds corruption. GWAC I guess would prefer one party rule as long as it keeps the real estate corruption casino booming.
For the record economic growth during both previous periods of NDP government in BC were similar to the economic growth under the Socreds and Liberals.
On a lighter note, my wife thinks I should learn how to yodel. Does anyone know someone in Victoria who gives lessons?
Barrister
You cant talk housing all the time. Same old. Crash is here this time…
Hawk its amateur hour in Victoria. Taxes announced are all being looked at now because go figure they were rushed in and had issues. Now the business tax is being looked at because go figure its bad for jobs. Only jobs being created in the next little while are to make sure the taxes they raised are collected. Their forecasts are BS. Dark days for this province.
CAN WE STICK TO HOUSING AND GET OFF THE POLITICS
gwac,
Your Ontario redneck mindset needs a cleansing. You’re on the west coast now, get over it. People need help occasionally, but exaggerating that the NDP are blowing money out the window to crackheads is total bullshit and a figment of your warped imagination.
sorry for the duplication and grammar.
I’ve lost track how many BC Liberals just went thru the court system getting convicted.
Brian Bonney, Former B.C. Director, Pleads Guilty In Vote-Getting Scandal
Clark apologized for the plan in the legislature, saying it was a serious mistake.
https://www.huffingtonpost.ca/2017/10/13/brian-bonney-former-b-c-director-pleads-guilty-in-vote-getting-scandal_a_23243100/
Hawk helping people with other people money. The flow eventually stops and it ends real bad with huge deficits no investments and so on. You think anyone in their right mind would invest in this province this province with mickey mouse and his crew and the helm.
“Grant those that want the government to give them things felt the liberals were mean.”
Last time I looked government is voted in to help the people not screw them. But some aholes want nothing for anyone but themselves.
Christy cuts buss passes for disabled people and wasted 10’s of millions on useless court cases on teachers to screw the kids out of spite. How more mean is that ? Thank God that bitch is gone. The same crew that backed her are still there.
http://www.cbc.ca/news/canada/british-columbia/financial-reports-bc-2018-1.4612140
NDP just a lot of talk. Took in far more than the liberals. Seem to like those corporate donations.
Grant those that want the government to give them things felt the liberals were mean.
NDP took just as much money from corporation/Unions. That came out yesterday. Big shocker there.
Liberals will be back in power soon stopping the theft from tax payers
“Regardless of the branding, isn’t it fairly well known that the BC Liberals were very corrupt?”
Grant,
gwac doesn’t want to talk about the elephant in the room. Corruption is almost an understatement. Anyone wanting those corrupt clowns back in needs a lobotomy.
https://www.huffingtonpost.ca/sarah-miller2/top-9-scandals-christy-clark-liberals_b_7658002.html
Grant:
To safe a lot of argument perhaps we can move to the bottom line that politicians are corrupt.
Has any thought been given to having a refinery built in BC and that would avoid bitamen being shipped. I know that would run into the not in our backyard but it would solve the problem.
A new condo has to be sold to somebody. It’s either going to be owner-occupied or purchased by an investor who rents it out. Doesn’t make any difference in itself to the rental market.
What does make a difference if is an investor decides to rent out short term (usually illegally) instead of long term. I think that’s the real problem.
Up until recently I haven’t followed BC politics that closely, I was surprised to find out that the BC Liberals are really conservatives. Regardless of the branding, isn’t it fairly well known that the BC Liberals were very corrupt?
The diversion of illegal STRs to regular rental is the only good thing about the vacation home tax. But that’s not really the motivation since they will now get tax revenue from AirBnB AND through the vacation home tax.
That will kill all the businesses down there including Capital Iron. Nowhere to park means lost dollars, big dollars.
Barrister the value would be better if all the stores did not have long leases. The capital iron store is not owned by the greene family and has a long lease. I assume the other stores are in the same situation.
This pipeline is a pipedream. As Horgan said, one investment isn’t the entire Canadian economy JT and Notely making it out to be. It’s a political pipeline built on fear.
Back to real estate, the flippers are feeling the pain. 950 Mcbriar Ave slashed $60K to $879K. That’s a big chunk of the reno cost gone poof.
More condos and one less parking lot. It should make some developer both happy and rich.
“The average cost to rent a condominium in the Greater Toronto Area has risen by almost 11 per cent in the past year partly because tougher mortgage rules have shut out new buyers and flooded the market with renters, a new report by research firm Urbanation says.”
Well, there’s the point I’ve been trying to make. Never mind the 3-5 year projection I recently made this “housing” shortage will be upon us much sooner than thought. How ironic, house prices falling but rents going up. The very people governments are trying to help by putting a check on housing prices are going to be hurt by higher and higher rents. Just leave it to government meddling to get it all wrong.
If governments don’t immediately embark on building massive social rental housing there is going to be a real crisis. But that is just toooo much work for them they would rather just legislate their way out of a housing crisis, how lazy and naive.
AZ
No that is not sarcasm. Every NDP government in the history of this country has been a disaster. This one is honouring the tradition with extra effort and success.
Is that sarcasm?
Cap iron building and parking lot for sale. 7 acres.
More condos I guess.
I think there is a 100% chance this pipeline will be built after the companies move on Sunday. Well played. Horgan has got himself into a no win situation. I see an election within a year. All these taxes were not well thought out. Amateur hour.
Soon the liberals will be back in power and all will be good again in BC.
Barrister, the fact is that the BC government has done nothing to block the Trans Mountain expansion. The cynic’s view is that KM just wants to take their profit now (i.e. a bailout) rather than later (i.e. from customers).
https://www.theglobeandmail.com/opinion/article-bc-needs-face-saving-exit-in-pipeline-dispute/
The vast majority of people buying secondary properties in BC’s cities have always rented them out. There just aren’t many people with enough money to burn by leaving a property empty in one of Canada’s most expensive cities.
Now there is the issue of whether they rent out short term (usually illegally) or long term. The spec tax provides an incentive for owners to do the latter rather than the former.
I am starting to suspect that the decision has already been made by the company to give up on the pipeline and that the rest is window dressing.
The real question is how determined on the Feds to implement the pipeline. I am not concerned about Alberta cutting off the oil but if the Feds start cutting off the cash in terms of projects this could get ugly quickly. PET would have done something like closing down a couple of airports. Wonder if the son has the same steel.
@Leo S
Here’s a different perspective….
“Very quickly, most of B.C. wouldn’t notice
It’s very hard to blockade a place with a port. B.C. can import refined products from as far away as China. Meanwhile, there are plenty of Washington State refineries ready to start sending gasoline over the border in a moment’s notice. All of these methods would be a few cents’ more expensive than the Trans Mountain pipeline, but given the volatile pricing of a product like gasoline, it’s unlikely that it would be particularly noticeable at the pump. At any one time, B.C. also has a fair amount of stored petroleum. The Trans Mountain Pipeline is unique in its ability to carry multiple petroleum products at once. At any one time, the pipeline can contain a rainbow of crude oil, jet fuel and diesel. This means that B.C. terminals all maintain large gasoline storage tanks to tide them over while the pipeline is moving crude. In a sudden shutdown Vancouver already has enough gasoline and jet fuel on hand to keep cars on the road and planes in the air until American supplies can plug the gap.”
source: http://nationalpost.com/news/canada/could-alberta-bring-b-c-to-its-knees-by-shutting-off-the-oil
So Leo it is going to be very interesting to watch the housing starts going forward. A comparison of housing starts over say the last 24 months compared to the upcoming monthly starts will be interesting indeed.
Entirely unintentional but if Alberta cuts off the oil and spikes gas prices here the NDP is in big trouble. Once this little battle hits the pocketbooks of voters they will turn on the NDP very quickly.
Also all my fellow EV owners on this blog will become even more insufferably smug and no one wants to see that.
Subliminal LNG messaging?
Here some Spec tax notes prepared by a brokerage for distribution to clients to mobilize opposition to the tax. They raise some interesting scenarios of people who might be (intentionally or unintentionally) hit by this tax.
https://househuntvictoria.ca/wp-content/uploads/2018/04/Speculation-Tax-Speaking-and-Newsletter-Notes-and-Facts.pdf
What I’m curious about is the discrepancy between the province’s estimation that 99% of british columbians will not be impacted vs the opposing assertion that the majority of home buyers being targetted are BC residents and nearly a third of buyers in some developments are BC residents buying a secondary property.
Perhaps the province is anticipating that the vast majority of BC residents buying a secondary property will either rent it out or fall under the tax credit?
Who is right?
If 1/3 of new buyers delaying their purchase by a year or two torpedoes our economy and grinds construction to a halt we have a big fracking problem. Sure we could just keep throwing gas on the fire and see what happens but that is a bad idea. A moderate and sustainable market is better than one propped up by poorly thought out handouts to encourage buying.
I call BS on this. One of the things that has helped make housing so unaffordable in the first place was all the easy money. Low interest rates, low down payments, low lending standards and long amortization. Going back to the policies that got us here is not going to help first time home buyers.
On the Speculation Tax, now more correctly referred to as a Vacation Home Tax, one must remember that the viability of this tax is propped up by the slimmest of a minority majority(!) that is tenuous on a number of fronts and so holds as much promise of being enacted as ever seeing the light of day.
“one in three Canadian homebuyers said they had decided to forgo a home purchase in light of the new mortgage qualification rules”
Well HELLO as if that wasn’t predictable. Goodbye economy, goodbye new housing construction. What will this all translate to in 3-5 years…..critical housing shortage and watch the prices soar then. Alternatively we become a nation of renters and the dream of home ownership belongs only to the very rich, somehow there is a problem with this vision.
It never made sense to me that a first time buyer under 35 should have to qualify at a higher rate. These folks are just starting their careers and their earning power in almost all cases will only go up so if they initially take out a 5year fixed by the time their renewal comes around their income will have substantially increased plus they would have paid down 5yrs of principle. If they elected a floating rate or shorter term then arguably yes they should qualify at 2% higher. A huge oversight by the powers that be, not to recognize this obvious situation. Why penalize these people to settle for something less than what would suit them.
LF,
More evidence stacks up with the 1 in 5 not qualifying and credit quality deteriorating.
1143 Princess Ave on slash #2 down$100K to $999K.
Stress tests pushing one in three homebuyers to forgo home purchase: survey
In a sign of the ongoing role government intervention is playing in the market, one in three Canadian homebuyers said they had decided to forgo a home purchase in light of the new mortgage qualification rules that came into effect January 1, according to a new Re/Max survey conducted by Leger.
A quarter of buyers compromised on the size of their home, while 18 per cent made concessions on its location.
“It has definitely cut out the buying power of first time home buyers and prompted other consumers to rethink where and what they’re going to buy,” said Christopher Alexander, executive vice-president and regional director for Re/Max.
The new mortgage lending rules introduced by the Office of Superintendent of Financial Institutions (OSFI) require home buyers to prove that they can service their uninsured mortgage at the contractual rate plus two percentage points or the five-year benchmark rate published by the Bank of Canada.
http://business.financialpost.com/real-estate/stress-tests-pushing-one-in-three-homebuyers-to-forego-home-purchase-survey
Hot water tanks need to have a drain nearby. At least when the dishwasher or washing machine goes it’s only for one cycle. The hot water tank on the other hand will keep on flooding till someone gets home. I’ve had 3 HWT go in 30 years. Two I caught right away ( one just an hour before going on a two week holiday) and the third I came home to 2″ of water in the basement. Now, when I go on holiday I always turn the main water off and turn off the HWT. The problem with fridges having water lines is that people ar’nt careful enough when they move them out to clean or retrieve something. Also thing to remember about floor drains especially those on upper levels you need to pour water down them every 2 months or so as they evaporate out and then you are vulnerable to sewer gas.
Whoa. Listed at $749,900. Here I was thinking one of the advantages of Mill Bay was getting away from bidding wars.
“System is showing 35 sales in the last 24 hours with 18 being above asking price. ”
In the core or in Sooke? 1 bed condos or high end SFH’s? Details matter when touting big sales.
@Grant – $807k
Bidding wars not over yet!
Percent out of town buyers dropped a bit in 2018Q1. Now at 25.4% compared to 28.4% at the peak in 2016. However still slightly above level of 2014.
Would someone with access please let me know what MLS #389149 in Mill Bay sold for?
Grassy Ass.
Water and ice out of the fridge is so damn convenient I will gladly flood the house for the privilege.
Yup solid day today. Last thursday/friday even better for number of sales, although much fewer over ask.
And two incomes are taxed less than a single one.
Most are catering to realtors and it’s bad for business if your ratings hurt your clients.
OK, that makes more sense.
Seeing more of these notes:
“Out of town seller”
“Suite is vacant and hasn’t been rented”
“Seller never lived in home”
“Leave offers open for at least 24 hours”
This isn’t scientific, just caught my attention. Possibly some spec tax nervousness.
James Soper: “Can you give an overview of IFRS 9 and what the differences are between that and IAS 39, and what, in your opinion those changes mean?”
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Hi James, I have a very novice understanding of accounting principles, however I can advise you that IFRS 9 has a much more rigorous review of loan default (impairment) than IAS 39. The adoption of IFRS 9 could/should/will result in an increase in the total level of loan impairments in most banks.
I expect that it will result in a much different report of consumer default and could very possibly create a very big problem, in conjunction with the B20 legislation, with simple mortgage renewals.
Just another straw on the camel’s back, my friend.
Victoria market is correcting and there is a risk of a hard landing.
System is showing 35 sales in the last 24 hours with 18 being above asking price. Sales are slowing but don’t really see any signs of price corrections quite yet.
As far as price reductions….yea some sellers are starting out incredibly optimistic.
Victoria market is correcting and there is a risk of a hard landing.
Spring selling season is not yielding many sales but we see lots of price reductions. This is all prior to the speculation tax to touch the market in the fall and be in full force January 1, 2019. I am most interested in the 2019 Spring selling season. Could be a lonely time for Realtors who made a lot of hay while the sun was shinning for 5 years-plus.
Hibernation may be on the horizon.
As far as incomes go in this town, I have a close friend who is a personal injury lawyer [incorporated so the corp pays lower tax] who has pre-tax income of $2 Million annually – I kid you not. Lives in Uplands.
PolyB…..I haven’t heard the different manufacturer theory. The inspectors and plumbers I’ve talked to over the years describe it more along the lines of the three generations. The first generation with PolyB fittings and crimps is the most prone to leaks and is difficult to find insurance for.
Of the 5+ plumbers I’ve talked to none have seen a PolyB leak due to failure of the product itself…apparently cooper leaks on 1950s homes are way more common. I’ve also never had a client or come across a story of a PolyB line leaking inside a wall. In Victoria that is.
I already had to deal with a &^@$% water line into a fridge, where the less than $1 valve failed and leaked water all over our hardwood kitchen floor for a half day. Warped hardwood, yay! Grrrrr.
I was super paranoid about water leaks when I built my personal home so no water line to fridge, laundry directly above a crawl space encase it floods, etc., but I would do things differently now. I would do laundry upstairs next to the bedrooms, but I would tile the laundry room and install a drain.
I’ve also notice that in Europe high-end places all have fancy floor drains in the bathrooms….now sure why not here? Makes sense…your tub overflows and into the floordrain versus causing a ton of damage. Also not sure why they don’t do floor drains in all laundry rooms? They have some super cool modern looking drains these days.
@oops
Can you give an overview of IFRS 9 and what the differences are between that and IAS 39, and what, in your opinion those changes mean?
On the topic of realtors…is there a site you can put a review and which the realtor can not get it deleted?
It has been a year since we sold and I am still not over the crappy service we got.
We deserve a lot of the blame for being stressed and too emotional but when your realtor never gets your name right and doesn’t answer your calls after the house sells….grr. He did not give us any advice. He was arrogant and lazy.
I know he monitors and culls his online image. I would love an honest review to be available.
Via Steve Saretsky: “Vancouver detached sales hit a 27 year low for Q1.”
Penalty would be the proper term. Early renewal means breaking your existing contract. I was worried because my mortgage was coming up before I would be ready to sell and move into the new house and my construction mortgage has the “fake” mortgage on title that is at 8.5%. What I call the cockblock mortgage. So any lender scrutinizing me would just tell me to declare bankruptcy. So was happy they called me..
Slick, and misleading. You’re probably quoting Statcan’s SFS survey from 2016, so let’s have a look at your analysis, using that.
Canadians have roughly 12 trillion CAD in assets as of 2016. The single largest source of it was primary real estate, at 33%. What you fail to mention, is that another 10% on top of that comes from the 1/5 of Canadians that own secondary real estate including cottages, timeshares, rental properties and other commercial properties. So the distribution of wealth tied into real estate is about 43%. That friends, is a big number. Indeed, Statscan remarked that “housing is both the largest asset and the largest debt for Canadians”.
And that level of consumer debt tied to RE and HELOC growth has gotten worse, rather quickly, if you’d like to read the latest BoC Financial system review at the link below. It appears you don’t share the BoC’s concern, though they’re not likely to sound the alarm for nothing.
The next largest source of wealth (and the largest gain) in wealth is EPP’s, at just under 30%. And so what? That’s not a liquid asset you can really do anything with until you retire, and I’m not aware of any large scale use of pension raiding to fund consumer spending. And…guess what a lot of pension funds in Canada have been buying these last few years? You guessed it – Canadian real estate!
The position of pension funds, who own such Canadian real estate landmarks as the Yorkdale Shopping Centre and the TD Centre in Toronto, continues to grow and the top 24 Canadian pension funds now own $188 billion of real estate, according to RBC analysts Neil Downey and Michael Smith. Allocation of real estate now amounts to 13 per cent of the total investments of $1.5 trillion at those funds.
Totoro, a slide in real estate in this country would decimate wealth. It always does – and with Canadians so involved in real estate directly and indirectly, I don’t find your rebuttal, “oh, we’re wealthy” terribly convincing or really even addressing the points he was talking about.
I don’t care if you use stats to prove a point – they’re a great tool. But don’t throw numbers up there, and orphan data at your discretion to support a slant.
http://www.statcan.gc.ca/daily-quotidien/171207/dq171207b-eng.htm
https://www.bankofcanada.ca/wp-content/uploads/2017/11/fsr-november2017.pdf
http://business.financialpost.com/real-estate/canadian-pension-funds-have-amassed-188b-in-real-estate-assets-and-they-are-hungry-for-more
@Andy7 @Barrister
Hard to disagree with either of you there 🙂
SWCH 25:
You left out the all the grey haired retirees who in some areas like oak bay dominate a large part of the market. They are paying for those million plus houses with cash in a lot of instances. The city of Victoria has actively promoted itself as a great place to retire for years. You are now harvesting the bounty of all those annual flower counts. In Toronto alone there are over 10,000 families with a net worth of more than ten million and that is not including their principal residence.
Might be time to shut down the flower count.
I think the bank of mom and dad is helping more people than you realize.
125k is great for one person in victoria but doesnt compete with dual income in this city. Two working professionals, whether they be in healthcare, government or other sectors will easily pull in 150k+ in their 30s and $180-200k in their 40s-50s. If they have equity from a condo or investments, downpayments can easily be larger than $150k. Payments on a $400-600k loan at 3% arent that bad… (insert standard hawk statement RE rising rates, helocs etc; and gwac statement about balls of ‘steal’).
That said – thats some of who you’re competing against out there. Maybe a lot of the competition? idk.
That’s gold, Jerry. Gold!
As I’m fond of saying, underestimate Victoria real estate at your peril.
For how many days have you been saying that it’s getting closer by the day?
Now might not be the right time, but people were saying the same thing during the last downturn, circa 2010. And those who didn’t buy back then are in therapy today.
I thought you said any day now.
Wealth is constantly, often imperceptibly, trickling into the city, it being one of the nicest and most desirable places in the country and all.
@Penguin
I keep waiting for inventory to improve but asking prices seem to keep increasing. It’s like people think they can get whatever price they ask for their house, and currently that is somewhat true. Some of the sold prices leave me dumbfounded. When will it stop?
I am thinking the same thing. I found what was a perfect home for $850k except that it’s backyard was small (ok) but it backed onto very old tall trees which were owned by the neighbor and would cut out all the evening sun which is a deal breaker for my wife and I. Since then I have seen all kinds of crap sell around the same range for far inferior quality. Even some around $800k that would need $100k in remodeling and still not be close.
I actually don’t want to buy with a suite since people can ask for $50-100k more as it allows people to be approved for more on houses with suites. We would rather build the suite ourselves from an unfinished basement or basement conversion.
pretty damn good for victoria.
The median family net worth has shot up about 60% in the past ten years. And all the assets are not in real estate – only 33% of wealth is in RE. Nearly 30% of Canadians are debt-free.
Sweethome: “So, the bears like Hawk might finally be sort-of right, but what about the many years they were dead wrong?”
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Hey Sweethome, let me try and help you out a little bit. In the last 10 years, “bulls” being right have only added increased debt to the average Canadian and created a delusional world of speculation and dysfunctional housing markets.
Purchasing that house would have only provided you with a mortgage that might have been manageable … until it wasn’t.
The “bears” being right will bring a world of hurt to the country. A very bad recession which many Millenials have never experienced, job loss, foreclosures and even worse deflation.
Unfortunately, too many things are adding up that might suggest the “bears” are going to be right …. and yes, they only have to be right once during this bubble.
This is a borrowed list of problems the housing market is facing.
the extent that people have overextended themselves to get into those expensive homes
the number of people who got down payments from private lenders
the number of parents who cannot afford to carry their child’s down payment on their HELOC at 5% or 6%
the number of big banks who knowingly signed mortgages with people who did not qualify by turning a blind eye to the private lender’s down payment mortgage in order to not have to conduct the previous stress test for people with less than 20% down payment
the number of people renewing their mortgage who can’t afford a 1% increase in mortgage rates … or more as rates continue to climb.
the number of condos bought by lower-income individuals hoping to sell the assignment or think becoming a landlord with a positive cash flow after rising mortgage costs and maintenance fees is easy
the number of local flippers and speculators who don’t know how they will breakeven to pay for the loans on their investment homes as the market slowly turns over.
the homeowners who bought new homes under construction and still need to sell their current home that is falling in value and secure a mortgage in a rising rate environment
the people who have no savings and have to cut expenses to pay the higher mortgage costs and the ripple effect that will have on the Canadian economy
how little debt people will be willing to take on as scared homeowners and people with line of credits, hear more stories about lenders refusing to renew mortgages or private lenders drastically increasing the mortgage rates on people who cannot leave them
the full effect of B20
the full effect of IFRS 9 – which the world will not amend to accommodate for Canada
Sweethome, a housing crash is not pretty and I don’t think anyone really wants it to happen but pay attention to the flashing lights. This is just an example of the upcoming pain and this is very, very early.
Good luck.
https://www.thestar.com/amp/business/2018/04/04/they-bought-their-prebuilt-homes-at-the-markets-peak-now-they-face-financial-ruin.html
“This impacts your health. Financially it breaks families,” said Zahir Bashiruddin.”
Wow, all I got was all the door locks replace and bottle of $60 Champagne and a cute little thank-you card.
Marko, can you answer my questions down in this post, please?
I can’t answer your questions because the questions are not based on common sense.
Haha! I was thinking the same thing.
Learned something new today never new about PolyB. Thanks
Lots of people go with PolyB and never have a problem – but that’s just luck. The problem is there is no easy way to determine if the PolyB you have will be problematic – if it was subjected to UV from the sun prior to installation, the UV broke down the plastic and later it could spring leaks. There’s also no predictability about it. “Are you safe after 5/10/15 years? Nope, not necessarily.” No way I’m buying a house where there are increased chances of flooding. I already had to deal with a &^@$% water line into a fridge, where the less than $1 valve failed and leaked water all over our hardwood kitchen floor for a half day. Warped hardwood, yay! Grrrrr.
“if it goes within a week, it is not for us”
There’s your mistake Penguin.
:”Hey this house has PolyB pipes, that’s going to be an expensive fix”.
I’ve had PolyB in my house for close to 30 years never had any problem. There were two different manufacturers of PolyB. One had a defective manufacturing process the other was fine. Problem is, no one seems to be aware of this and so there is this carte blanche condemnation of PolyB.
Incorrect.
Brought three pre-sales and two of them gave me back 90% buyer’s agent commission. the only one did not want to give me commission back was at 989 Johnson. I had to ask to speak with the owners of the developer and told the owner how their agents did not put developer’s best interests by charging developers fee in order to conduct a sale whereas developer would have saved at least half of listing fee because it was not on MLS.
Some of the agents just want to earn their fee and treat buyers as a receipt number.
This makes no sense. Do you have a GST number? The developer would be losing $ giving 90% of the commission back to you as I am not sure how they would expense that. In real life practice they don’t reduce the price as people talk and the next thing you know everyone wants the same deal.
Secondly, it is rare from experience that the sales person working in the showroom is paid any sort of significant bonus for an unrepresented buyer. Whether you walk in alone or with a realtor the sales people are getting paid a fixed rate on their end. Most developers running their pro forma on 60% of buyers having representation and 40% being unrepresented.
Third of all, most developers themselves are the one that investing huge amounts of money to attract the realtor community. For example, Bosa (the actual developer) was offering some crazy bonuses at the Promontory and the Encore to realtors so your argument of sales people not representing the developer’s best interest doesn’t really make sense as the developer is pushing the buttons on the commissions/bonuses/etc.
Finally, whether the listing is on MLS® or not with a pre-sale is like 99.9% irrelevant.
Not much adds up to your story.
It’s a healthy sprinkling of both. But I’m also in my 40s and I’ll be stepping up with a new 20 year amortization, which annoys me a bit because, well retirement! But if business continues as it has (crosses fingers), I can pay it off much sooner. Of course, shit happens in life. I’ve already been through a divorce which was financial Armageddon. But, you shake it off and plow ahead. You’ve got to dream big to achieve big and get back up when life knocks you down. Besides, it’s just a house.
I wouldn’t be borrowing that much but it all depends on your earning power. Salaried individuals, other than Drs, lawyers and the like, I agree its pretty difficult to accomplish even for 2 income houses. Realtors do not badly too, lol. But having other people working for you is where doors really start to open.
Thanks for your reply LF. I’m with you! We haven’t bought because we don’t want to panic buy. Even if we like a house we would not buy it without full conditions, multiple viewings etc. and lots of waiting. Nothing good can come from impulse buying a house. Whenever a house I like on MLS comes up we don’t even go see it because if it goes within a week, it is not for us. It’s starting to get better for buyers in that sense though and at this point I might go see a house I like right away. It is a big deal to have such a big mortgage and you better be able to, as you say, weather the storm. To me it feels like it’s gone on long enough and I’m very surprised to see some things selling for what they are. But I’m in it for the long game so would rather pay a bit more for the right house.
Patriotz
I think Montreal/ Toronto and Van will see this trend continue. I think a SFH in anyone of those cities is a good investment over 20 years.
No idea about small cities like Victoria.
If you read the article you’ll see that the prediction is dealing with worldwide population, i.e. urbanization in the 3rd world. Actually you don’t have to read it since it’s obvious that far more than 30% of Canada’s population lives in big cities.
Will the % in Canada increase in the future? I think there’s a case to be made it won’t, as technology may erase the economic trends that have made big cities attractive. Not to mention they’ve simply become too expensive.
You have to have balls of steal to borrow 600k. Very scary what people face to buy.
https://www.bnn.ca/ikea-prepares-for-a-future-of-small-spaces-1.1052563
Ikea thinks 60% of the population will live in cities by 2030 up from 30%
The SFH close to a core is going to be a luxury in that type of change
builders wouldn’t give any discount for buyers withOUT an agent” in my last post. Missed my morning coffee
~~~~
Incorrect.
Brought three pre-sales and two of them gave me back 90% buyer’s agent commission. the only one did not want to give me commission back was at 989 Johnson. I had to ask to speak with the owners of the developer and told the owner how their agents did not put developer’s best interests by charging developers fee in order to conduct a sale whereas developer would have saved at least half of listing fee because it was not on MLS.
Some of the agents just want to earn their fee and treat buyers as a receipt number.
It is not rocket science to purchase on your own, nor figuring out how much is paid to your realtors.
Also, the status quo MLS system does creates barriers and hefty fees for transaction. It has to be changed.
Grant,
You may not be comfortable answering which is fine but could you provide a little more info on the financial side of the house?
A 800-900k budget is fairly significant. Do you have a large downpayment or is your income really high?
I was approved a max mtg principal amount of $600K (10 yr at 3.4%). Obviously my max purchase price is whatever i can scrape together for a downpayment. I originally told them i had $150k for a downpayment for the 20% as we initially had a price ceiling of $750k.
My income is $125k ish with no debt. 600k was the max three separate institutions would do (with a credit union thrown in too… all pre-stress test but they all used the stress test numbers)
I truly don’t understand how people afford this. I thought i was doing well Must be some significant dual income couples out there with some significant money for a downpayment to be buying in this market.
Its a renters life for me 🙂
Vetting possible agents is key, there’s always excellent ones out there in any market. (Far more bad ones though.) My realtor in Calgary has been doing it 35+ years, he’s awesome nothing much gets passed him. From the interactions I’ve had, a good example in Victoria is Marko. He’s on this blog, answering people’s (sometimes very repetitive) questions, participating in the discussion, offering balanced opinions and not shying away from delicate or tough questions. You can also see his videos on youtube and he’s a pretty straight shooter with his market updates. Yes all that acts as good marketing for him, but smart, saavy people who are straight shooters are exactly those individuals that I seek to deal with in pretty much all phases of life. Only problem is Marko probably doesn’t need the business! lol
I’m sorry, that’s really tough. Buying or not will depend on your personal circumstance, worthless as that observation is. If you are able to go in at 800k but have to eat KD for the next 25 years, no home is worth that. It’s very important that you and your partner have a “strike price” that is, the price level at which you’re willing to pull the trigger, presuming payment at nominal rates. It’s even more important that you and your partner avoid going in on a panic.
The only solace I can offer is, if your renting circumstance is okay (it doesn’t have to be perfect), that choosing to wait at this moment would appear to be lower risk than at other times. I know, it’s harder to say that with kids. But it’s still true. Even if prices didn’t change, you’d at least have more opportunity of choice and reflection before buying.
No market mania goes forever. What you’re seeing, I think, is the tail end of one enabled by excess liquidity. Without the enabling factor, it doesn’t have the fuel it needs. Liquidity is beginning to shrink, and as that progresses, banks become more and more miserly. This is why we’re generally seeing declines across the country. On this last point, expect to see increases and fluctuations along the way, and stories about this one place that sold infinity dollars over asking etc. Ignore it and the media cheer-leading that follows. Instead, pay attention to the broad indicators instead, dollar volumes and such. Declines are rarely linear.
One tiny anecdote: I had a conversation with a friend of mine in the late spring last year, who wanted to buy a home with her new husband. DINKs, and good jobs. The price tag would have meant a real lifestyle change for them, so I said if you don’t want to give that up, just rent for now.
She said, precisely, “Well the market is the market, it isn’t going to change”. I wasn’t going to try to give her a history speech (I save that for y’all). They proceeded with the sale, north of 800k. They were actually quite happy. Last week we were chatting, and it came up again. Today, both of them regret buying. The novelty has worn off, the payments aren’t going away and they’re actually quite nervous about the market. She doesn’t want to sell, because she’s afraid that if they want to get back in again, they will go through what they went through the last time, and might find some place worse. Nice people, and I don’t think they’re alone in their circumstance. You’re not a fool for feeling the way you do.
I know some folks that moved to the West Shore, bought ebikes (approx. 3500 each for a couple) and now commute in along the Goose. They don’t mind their daily commute to much.
Obviously this is not practical for everyone. Some folks need their car for the job, others may have too many stops (kids at school). It worked out well for this couple that they were able to get the lower prices of the Westshore, still work downtown, but avoid the soul-sucking daily car commute.
“Nothing wrong with being a bear. However it’s always advisable to consider other viewpoints to make sure you don’t have blinders on, to re-visit assumptions, to look back on past projections and see where you were off.”
I always keep an open mind to other view points, but the over valuations is my only concern and we have exceeded 2007 to 2009 RBC affordability levels, the highest since 1981 and you can not ignore that chart with rising rates. The buyers are getting slowly squeezed out and something has to give wether it’s soon or the fall/winter.
All we have is a lack of sellers. Look at what happened in Toronto last year, more sellers suddenly showed up, deals collapsed, and prices tanked the most since the 1990’s. It can happen here very easily and is not doom and gloom.
According to my Toronto agent buddy the SFH’s are still a ghost town.
I would appreciate this but I would also be skeptical that the inspector was his buddy or cousin or something. If I was serious about buying a place that had a posted inspection, I’d still be tempted to get someone I trust in there.
I would love to pay a decent hourly rate. I think I’d probably vomit if I heard some realtors equivalent hourly rate with the prices and DOM right now. Any idea what a going rate would be if someone did this?
True, but when they’re getting commission, I straight up do not trust their advice. Several realtors told me in summer 2017 that it was a good time to buy when MOI was at an all-time historical low. When I brought that up, one had no idea what I was talking about and another replied with “but low rates and free money from the government!”. I can see someone being clueless enough that they could make mistakes larger than a buyers agent fees, I just don’t think I’m that clueless.
There are some truly lame inspectors out there. I had experience with one of them. Utterly superficial report but padded with lots of boilerplate text to make it look like he had actually done something.
If you have some building knowledge or have a highly knowledgeable friend who will have a good look around with you that may be more valuable than the home inspection and save yourself a few hundred.
Have been looking a couple years. Honestly never thought I would be in this situation with good stable incomes, money saved, no debt etc. But here we are! I am fairly risk averse which is why I haven’t bought yet. Had to save money, pay loans, find a place I could live in for a long time. But in retrospect would have been better to jump in and hope for the best! I’m not too bothered about paying more than someone else 3 years ago as long as I get a place that I can afford and live in for a long time.
Every time I post about my situation I get people telling me that I will have to make sacrifices like moving to westshore. I totally would but not willing to live my life in my car. I would rather rent than spend 2h in a car every day.
Luckily I am still able to afford a crappy house in an area I am willing to live in but there is not much supply right now and looks like prices are still going up and people are biting! I think the fall/next spring will be my time to buy.
If I were in your position (price range) I’d be golden. There is so much out there for your price range compared to mine. Are you maybe being to picky? You have to make sacrifices! Just kidding of course but actually if I could afford 850 there would be so much more to buy. I think you will be ok when inventory increases and if it is like last year it definitely will soon.
Nothing wrong with being a bear. However it’s always advisable to consider other viewpoints to make sure you don’t have blinders on, to re-visit assumptions, to look back on past projections and see where you were off. It allows one to make better decisions and if you blow time on a blog like many of us here do, it’ll mean you’ll be a more helpful guide for others as well.
Sorry, it should be “builders wouldn’t give any discount for buyers withOUT an agent” in my last post. Missed my morning coffee. 😉
Also on buying, to me, driving around with an agent is more for market education purpose, especially if you are new to the city. We always find the house we want to buy ourselves, and have agent doing the other half work getting it.
How long have you been looking Penguin?
I completely empathize with your situation, we’re in that 800-900 range as well. It’s still a glaringly hot sellers market, with the added ulcer of uncertainty about where the market is headed. If we go ahead with summer plans to move, it’s looking like I’m going to have to sacrifice location for the type of house we want. This goes against the mantra of “location, location, location”, but I’m simply not going to buy something unless we’re going to feel 90%+ happy with it. Renting is an option but it’s looking quite unlikely we’ll find what we need: a well appointed, good location, unfurnished, 3+ bdrm that will allow a dog.) So we’re into the Westshore, possibly Mill Bay or if we get lucky, something on the Saanich peninsula.
Because you are a sensible person Grant. 😉
For ourselves, we always use an agent on buying, even with new build/pre-sale and got compensation from agent, so a win-win (builders wouldn’t give any discount for buyers with an agent). But we do prefer to sell ourselves (done three SFH sale-by-owner, two of them in Victoria), when we have time.
I agree with your advice LF. My current problem is there is nothing much to buy in my price range (~800k with a suite) that I would want to live in for a long time. I keep waiting for inventory to improve but asking prices seem to keep increasing. It’s like people think they can get whatever price they ask for their house, and currently that is somewhat true. Some of the sold prices leave me dumbfounded. When will it stop? It seems so far this spring, in the areas and price range I’m looking in, prices have increased from the winter. It’s like people think they can keep getting 75k over assessed and because assessed keeps increasing, the prices keep increasing. I think it’s going to get worse before it gets better but some days I get a bit panicky. I really don’t think now is the right time to buy but who knows. I don’t mind “overpaying” for something I could (and afford to) live in for the next 20 years but it’s getting to a point that I don’t know if it’s really worth additional cost to buy.
Please no comments about having to make sacrifices, move etc.
If a owner has an inspection done, he/she is obligated to report the main issues found on the disclosure sheet (regardless if the inspection report is used or not), right?
I wouldn’t bother with owner inspection, neither as a owner nor as a buyer.
I’ve always bemoaned the fees that are charged, and with the internet you’d think it’d be easier to do things without them. But, it’s typically the biggest financial transaction we make and really, you don’t want any fuckups with that. The odds of a deal running into a major problem are probably on the low side, but what if you do run into one of those problems? Wouldn’t it be good to have an experienced realtor who knows what to do? An imperfect analogy is that these days lots of people run to Google when they have a health issue. Sometimes that works, sometimes it’s best just to go see the damn Dr.
Also, agents live and breathe the market. They know the neighborhoods inside out. They have their finger on the pulse of the market, and they’ll have more access to inside information that Joe Q Public doesn’t have. Agents will also be able to give price guidance, assuming the buyer/seller is willing to listen to that guidance. Agents will (or should) have a good network of people they trust for various services that you may need. Agents also get much better at negotiating and on walk throughs of a house, can point out stuff that may not be obvious to you. My agent recently did this for me on a house in Calgary we were looking at :”Hey this house has PolyB pipes, that’s going to be an expensive fix”.
It’s a long list. Is it worth the $? In my opinion it 100% is worth it when you’re the buyer, because it costs you nothing. As a seller, most buyers use agents and there are some agents out there with clients who won’t even bother showing FSBO listings. Or buyer agents may try to take advantage of you one way or the other.
Do you get that kind of service with a 1% agent? I have no idea, but I highly doubt it. I can’t believe I just defended real estate agents 🙂
If I was selling I might do this. I think most buyers would want to do their own inspection anyhow.
I am 100% for scanning for an oil tank prior to listing, but a home inspection I don’t know. Most buyers want to have their own inspection done anyway. There is a massive delta between the worst and the best inspectors.
http://business.financialpost.com/real-estate/realtors-go-beyond-a-bottle-of-wine-with-personalized-and-elaborate-closing-gifts
If I was selling I might do this. I think most buyers would want to do their own inspection anyhow. But if I had a good inspection report that identified all the defects (of which there are many in my 105 year old house) it makes it harder for a buyer to come back and ask me to knock 10K off the price for some obvious defect.
Of course the obvious question is – if all the “issues” are spelled out before offers are made perhaps the offers are lower in the first place? Is it better from a purely financial perspective to let the buyers get emotionally invested in the place before they find out the “issues”?
i felt this exact way until we sold/bought. I have/had a real disdain for realtors.
However, on the buy side our realtors really helped us see stuff we would have otherwise missed and prevented us from over-offering on some properties. This probably saved us tens of thousands in reno and repair costs (and im a pretty handy guy).
On the sell side, they worked the phones and created a bidding war. Once they had a couple fish on the line they dialed up the urgency to create a false-ish sense of fomo. This ended up in us getting an offer 30 k higher than all the other offers (condition free to boot).
In our situation using full service probably broke even or maybe even netted us a positive return. Plus they did all the paperwork, staging, ads, web hosting etc included in their base fee. They were sharks, and we needed that on our side. Plus they dealt with all of the BS – and there is a lot of BS.
They didnt drive us around in a lexus though. We had to do our own driving.
Leo S:
A post on the divergence of supply between condos and SFH homes with an eye to future investment performance would be interesting reading. Are there any stats for the core that might show how many new infill lots have been created each year? My unscientific guess is that at least in the core areas like Victoria and Oak Bay the majority of “new houses” are actually just rebuilds that dont effect the amount of inventory.
On this topic, does anyone actually feel like getting driven around in a Lexus and shooting the shit with a virtual stranger is worth $15-$30k? I don’t know what part of the service is supposed to be worth that much and I can’t imagine being happy with any realtor charging more than 1%.
Everyone says this but no one actually executes it…..my mere posting side of the business has completely dropped off the cliff this year….it will be the worst year for mere postings since I started. For whatever reason the consumer is willing to pay quite a bit for full service.
As far as the buying side of things I don’t think I’ll ever figure that out. Some people buy the 2nd house they see and some people spending five years looking and then they decide to buy in Comox and predicting the outcome is extremely difficult at the start.
Until there is a fundamental change where buyers want to be billed per hour for showing homes/writing offers there is not going to be a massive appetite for offering cash back. Eight years ago when I started cash back offers started strong then realtors offering cash back including myself started introducing ridiculous minimums which made the advertisements pretty lame (50% cash back, but $7,000 min to realtor so few people actually got the 50% cash back, etc.) and then a few realtors phased it out, etc. It just doesn’t work well in practice.
Sweethome – in 2012 the resident super bear was “info”. A few years ago she was still posting on greater fool. Haven’t checked lately. Hawk is a raging bull compared to info. I still remember “info” predicting that “sales will tank”. That prediction pretty much marked the bottom of sales and there followed several years of year over year sales increases.
I was in much the same situation as you, but in 2008, not 2012. I followed too many financial blogs and was convinced Canadian real estate was going to tank big time. I wanted to rent and wait but my wife pushed buying and we bought in late summer 2008. The market did fall a bit from there but in the 10 year rearview mirror it worked out OK.
Your buyer’s agent (if you have one) can hopefully help you with things like that. The question of “how low price should I offer” depends on market factors, and factors specific to the listing, but it also depends on you. How badly do you want the place, how long are you willing to wait for something equal or better, is there something uniquely attractive to you about that specific property?
Damn, more bad news. Sorry bout that but it’s reality. 😉
Bank of Canada’s latest indicator clinches it — interest rates are going up soon
http://business.financialpost.com/news/economy/bank-of-canadas-latest-indicator-cliches-it-interest-rates-are-going-up-soon
Although the real estate services market is not that diverse, there are lots of options if you don’t like the status quo. You can get your own license, you can use the existing services, get a cash back realtor, do a private sale, buy unrepresented, etc. All it takes is some legwork.
Grant, as per my previous post, debt bubbles never just resolve themselves, they have to be dealt with and they are never pleasant. It happens every 7 to 10 years and we are at that point again. Thus my viewpoint. It’s not doom and gloom, it’s reality.
Canada is supposed to be the conservative lending example to the world but is far from it with major fraud, money laundering capital of the world, and they still resist to deal with it effectively.
Just look at the charts with an honest perspective and you will see the reality that the best days of this market is behind you and now just a matter of time til the debt collectors step up the pace. The government intervention will not stop if the tax doesn’t work. They will bring something else in, as their base demands it.
The bulls viewpoints are more like Fox news as everything I post is from legit sources. Whenever the bad news comes all they want to talk about Trudeau, Horgan the commie and windows/ heat pump losses.
Just like when I posted the RBC news of deteriorating credit quality last night, or the NBC millineal survey from the US saying that group is flat broke, and then I’m attacked for being a bear? Seriously, how the hell can you not be?
Thoughts on value of a seller having a home inspection done and posting the report with the listing so all buyers can review proactively?
On this topic, does anyone actually feel like getting driven around in a Lexus and shooting the shit with a virtual stranger is worth $15-$30k? I don’t know what part of the service is supposed to be worth that much and I can’t imagine being happy with any realtor charging more than 1%.
Yup. SFH will be in shorter and shorter supply relative to the population. Will write a post about this soon. You should not expect affordability of single family dwellings to move in a flat band, rather a slowly increasing one.
Amen. We have another one too!
“So, the bears like Hawk might finally be sort-of right, but what about the many years they were dead wrong?”
SweetHome,
Only need to be right once at the right time that I want to buy and it’s getting closer by the day as the credit market deteriorates as expected.
BTW I wasn’t on here in 2012 so you’ll have to go to Garth’s blog and blame him. I’ve always said if you can afford it, and can hold through a long downturn then go for it.
Bubbles take a long time to build til the excess is so obvious, that the big money is leaving or has left as costs increase, and rates rise off emergency historical level lows about 5 years too late. Now we have a debt bubble along with a price bubble, worst combo you could ever want with rising rates.
So long as you’re planning to hold for a long time and can weather interest rates at 6-7%, I say enjoy whatever property you end up buying. And thank you, enjoyed our chat.
Sweet Home:
I would lend you my crystal ball but my wife is using it as a paperweight.
@Grant re:Hawk “this is an honest question: what’s your goal when you post on HHV? You have a clear and unrelenting bias in your posts…..It’s all gloom and doom all the time”
Yes, Grant, Hawk reminds me of my Dad. My Dad has been preaching about the economy crashing for 40 years. Sometimes he was right, but he missed out on tremendous opportunities. So, I grew up with that negative bias, and around 2012 when it would have been the right time for us to buy based on our personal situation, I listened to Garth and I think this site (and Hawk) was around then too.
I accepted the theory that interest rates would go up and drive house prices down. And, like Harp Echo, I was so hyper-focussed on not “overpaying” (not about commission, but the idea that I could buy a house and it would drop $50K in a year or two). Not having bought a house before, I didn’t fully understand that the principals that apply to bargain-shopping when buying a new TV do not translate to real estate.
So, for the approx. $800K we spent for a house when we finally bought in 2016, we could have bought, for example, a house in the Henderson area near UVIC in 2014. That house sold in 2016 for $930K and is now BC assessed at $1.228M. So, listening to those one-note perma bears lost us $300-400K. Even worse, I have to live with my spouse saying, “I told you we should have bought that house”.
Now with more experience and having tracked the market for over 10 years, I see that things are definitely more precarious than in 2012. So, the bears like Hawk might finally be sort-of right, but what about the many years they were dead wrong?
@Harp Echo
If you feel like you’re getting ripped off by realtor fees, then another option is to get a realtor, get them to show you a ton of homes so you feel like you’re getting good value for their service and go from there.
Grant
Perhaps you are new here. Long-term residents know that Hawk guards the reliquary which holds THE GRAPH. At certain times in the liturgical calendar of the Church of the Bear, it is brought out and exposed to the faithful.
For encouragement.
I would think the opposite, since people desperate for a place to live are more likely to bid up a place, where as investors aren’t, since they’ll be looking for a deal. If there are places to rent, they’ll be less desperate.
I would agree if the two were perfect substitutes but they aren’t. Adding more rental inventory will help keep real estate prices lower but I don’t think as much as adding equivalent amount of condos.
Same goes for rental rates…..doubt that building condos reduces rental rates as much as building apartments.
If you are so intent on avoiding a buyer’s realtor commission why don’t you get your real estate license? You would learn a lot and the difference between the cost of the license and the buyer’s commish will save you thousands.
I was just about to chime in with this…..you could be up and running for about $4,500 to $5,000 which you would easily pay off on your first deal.
Pre-inspections do take place all the time especially in delayed offer situations but sellers reject them all the time too. I had a seller reject pre-inspections because her personal theory was that if buyers aren’t allowed to pre-inspect they will be forced to offer “subject to inspection” which will drive the offers higher as buyers would feel inclined to bid higher if they have to go conditional versus unconditional.
I don’t agree with her theory but the point is if you are being a weird unrepresented buyer most likely the seller will not allow you to pre-inspect as you also might be weird and bring uncle Joe for the inspection who falls off the roof, breaks his or her neck, and sues the seller.
@ local fool – When I look at the graphs of new supply over the decades the primary spikes in overbuilding are not SFH. That doesn’t mean SFH didn’t experience price declines during down periods but they would have in general held their value better. Admittedly I’m filtering that data into my own specific situation in that I’m primarily interested in the direction the SFH market is going to take. If there was a real supply spike happening in SFH I’d have to go back to sitting on the fence as to which direction that segment is headed.
@Hawk – this is an honest question: what’s your goal when you post on HHV? You have a clear and unrelenting bias in your posts. You post some relevant information, info that is good for everyone to hear and acknowledge, but I’ve yet to see a reconsideration of a position based on new data, or a moderation of a viewpoint based on an another’s reasoned argument. It’s all gloom and doom all the time. Or maybe more like watching Fox News – it’s just obviously biased. I can’t imagine you’re just another internet troll, what an enormous waste of time that would be.
freedom_2008,
That is odd, that buyer’s agent from that home inspection team told me “you can do a home inspection before making an offer”, it was a vacant house though. Maybe it was an estate sale like you said, I don’t know.
@ Harp Echo
If you are so intent on avoiding a buyer’s realtor commission why don’t you get your real estate license? You would learn a lot and the difference between the cost of the license and the buyer’s commish will save you thousands.
The Canadian credit picture is looking uggggggly. More “not seen since 2008” stats is not a good sign for the pumpers.
Cracks ‘Starting to Show’ in Canadian Credit Quality, RBC Says
“The quality of Canadian consumer credit is beginning to deteriorate, according to Royal Bank of Canada credit analyst Vivek Selot.
The roll rate — the percentage of credit card users who “roll” from early stage delinquencies to 60-89 day delinquencies — reached the highest since 2008 for one credit card program, while delinquencies for another program were above the 10-year average, Selot said in a monthly analysis of credit securitization programs.
“Cracks are starting to show in more and more places,” Selot said Monday in a note to clients. He declined to comment further.”
https://www.bloomberg.com/news/articles/2018-04-09/cracks-starting-to-show-in-canadian-credit-quality-rbc-says-jfsmzpqs
What you saw could be that buyer made a fast offer with inspection as condition which needed to be done right away. Otherwise, unless it is an estate sale, it doesn’t make sense, since owner normally wouldn’t allow inspection without an offer.
Think about it, if you are the owner, would you like someone to go up into your attic and pull up the carpet without a firm buy commitment? I wouldn’t even if there is no other buyer.
Marko was right that the answer to “how low price should I offer”, “what is a good deposit amount” and “what is the best closing date” are really case specific, and are part of what the agent paid to do for you, if you can’t decide by yourself.
Best of luck.
No, I can’t.
Grant,
I’m not sure what if anything, you’re implying. Yes – building has been slanted towards attached homes. That’s a historically consistent dynamic. So then, did that make a difference previously when the market turned? For those parts of the 1980’s, 1990’s and to some extent, the early 2010’s, Victoria experienced a downturn across the entire market: SFH’s, townhomes, apartments, etc. As demand slumped and prices fell or stagnated, builders then responded by slowing building. Are you meaning something else, or am I being obtuse somehow…?
Lots of talk about overbuilding but really all the data and graphs presented in Leo’s post and in the comments point towards overbuilding only happening for high density buildings.
Thanks for the clarification. Seems like a reasonable way to estimate.
I used the average household size for greater Victoria. So Pop increase / hh size = dwellings needed. Of course hh size will vary with age of newcomers but that’s just my best guess
I would think the opposite, since people desperate for a place to live are more likely to bid up a place, where as investors aren’t, since they’ll be looking for a deal. If there are places to rent, they’ll be less desperate.
@harp
That commission is already signed by the seller to be paid. From what I understand from the agents are replying to you it ether goes 100 % to the losing agent or you get a buying agent willing to give you 50% of his commission.
Either the selling agent gets 100% or you can at least get 50% of the buying agents commission.
From what I read that is the best you can do. I tried to get Vancouver agents to write a offer giving me 75% of the fee and they wouldn’t do it. The best I could find was 50%.
50% of the agents commission is better than 0.
If the seller is going to pay $10k in fees (total seller and buyer) it’s not going to change if you wrote your own offer. They still pay $10k in fees you just didn’t get the $2.5k you would by getting a 50% back agent.
Harp Echo,
You are spending a lot of time asking questions and then not listening to the answers you get. Leo S and Marko are giving you advice for free. Take a little time and do some research elsewhere before clogging the entire forum with questions.
Marko,
I have seen home inspection being done before an offer here, it was at the end of an open house, we got kicked out because a buyer had arranged a home inspection right after the open house before making an offer.
Your chart make it clearer for the commission structure. Does it mean your seller pay you 21.2k realtor fees, and you give 12k to the buyer’s realtor? And if a buyer doesn’t use a realtor, you still get 21.2k from your seller, and you give 5k back to your seller?
I remember told to a seller/owner before, he said if I don’t use a realtor, they can remove the buyer’s commission for me. Does that mean different listing realtors use different commission structures?
Also you chart says full MLS service, doesn’t that include representing your seller, why you said it is unrepresented?
Thanks for the added graph Leo. Helpful.
Wondering in looking at it, do you know what constitutes a “dwelling need”?
For instance, does 1 person denote 1 new dwelling needed? 2? 3? Is it extrapolated from age proportion or something else?
For example, CMHC says there are 3182 condo/apartment units under construction right now. Citified says there are 5330 of which 57% are rental apartments. Don’t ask me to explain the discrepancy.
I like the CMHC data because it is time series back to 1972 and I would hope their definition of “under construction”, “start”, and “completion” has been consistent in that period so it allows long run comparisons of construction levels.
If rental apartments are being built and more rental vacancy then people are less desperate to buy.
Fair enough…less likely to overpay for the privilege of owning if you live in a new professionally managed building.
Right. They do not separate it out. But it is still connected. If rental apartments are being built and more rental vacancy then people are less desperate to buy.
As for pure supply for resale, I would imagine citified has that data? I cannot reconcile citified’s data with CMHC data though (which is what that graph is base on) as the definitions seem to be different.
And people don’t live in apartments?
Curious in terms of real estate prices rather than physical accommodation. I would think if only apartments were being built, for example, that it would put upward pressure on condo prices.
Renting isn’t a perfect substitute to buying imo like diet Pepis and diet Coke.
And people don’t live in apartments?
It’s a bit of both. We were under building relative to population increase for a few years now we are overbuilding. In the end it evens out.
Can this be separated out to condos vs apartments? The three largest projects downtown are all apartments.
It’s a bit of both. We were under building relative to population increase for a few years now we are overbuilding. In the end it evens out.
I don’t randomly buy houses, if it is not the best vaule overall I will not pay for it. And there are places to check for buried oil tanks.
You think if you are trying to modify a listing contract that has absolutely nothing to do with you the seller/realtor will be comfortable allowing you the carry out your various inspections prior to you making an unconditional offer?
I offer an unrepresented discount to my sellers -> http://markojuras.com/wp-content/uploads/2011/04/2065.FullService_flowchart_v2-01-01.jpg
and I’ll do a lot more than $5,000 depending on the price point but if an unrepresented buyer made such a request in writing red flags would be going up all over the place.
I understand the desire to get the best possible value but ignoring real life concepts doesn’t help achieve that.
I do look at the big picture, if it is not the best value I’ll not make an offer, I don’t buy junk, or money pits
You are right. 19 days on market is not a lot at all. The point is it would not normally be increasing this early in the season .
I don’t randomly buy houses, if it is not the best vaule overall I will not pay for it. And there are places to check for buried oil tanks.
You’ll be so focused on the buyer’s agent’s commission that you’ll miss the buried oil tank which is not a great outcome if going unconditional.
Marko, can you answer my questions down in this post, please?
I can’t answer your questions because the questions are not based on common sense.
How early the closing date should be to the seller’s liking?
Common sense tells me some sellers will like an extremely quick completion of two weeks (vacant house) or super long completion (6 months) if they need time to find another place subsequently; therefore, how do I answer your question?
Same with all your other points….sorry if I am coming across as a complete douche but your questions can’t really be answered as negotiation is transaction specific.
You are focusing on all the wrong things such as confirmation that the buyer’s commission is being waived that you will likely do poorly on a real estate transaction in general. Focus on the big picture.
I am all about saving money but it has to be within reason that doesn’t impact the big picture. It would be like saving 2% on MERs and than going out and randomly buying penny stocks.
Marko, can you answer my questions down in this post, please?
Garth better get off the pipe pumping the Canadian millineals buying up houses BS. The US millineals are broke. Both can’t be right and the US story sounds more like reality to me.
Majority of millennials are in debt, hitting pause on major life events
Credit card debt — rather than student loans — is the most prevalent type of debt among the group
“Approximately three out of every four millennials in the U.S. have some form of debt, according to an NBC News/GenForward survey released Wednesday, and they’re putting off major milestones because they can’t pay up.
A quarter of millennials — those 18 to 34 years old — are over $30,000 in debt, including 11 percent who are over $100,000 in debt. Only 22 percent of millennials are debt free.”
https://www.nbcnews.com/news/us-news/poll-majority-millennials-are-debt-hitting-pause-major-life-events-n862376
Thanks for the graph, LF. The cliff in 2008 is pretty stark. Developers don’t have deep enough pockets to keep building and just hold until the next peak. They are all in debt to the banks, just like everyone else. The carrying costs can be huge.
City of Victoria/Saanich also make things very difficult in terms of timing. Right now we are hitting peak condo prices so it would make sense that developers are launching pre-sales right now but I think downtown/Vic West we will have just one launch of all of 2018 – The Hudson Place.
The other 5 or 6 will be dragged into next year and who knows what the market will be like in 2019. Perhaps it slows down, and some projects don’t get going. This is a pro and con depending on how you look at it…..the pro being you don’t get sudden over-building.
In every bubble everywhere, the rationalization is made that “we aren’t building enough”. In fact, it’s during times of rising prices that more housing is built than is actually needed. That’s the very reason why cycles exist in housing markets. Eventually the overbuilding results in falling prices. When prices are falling less housing is built than is actually needed. Rinse and repeat.
Duran:
I totally agree that the Peninsula is a bit of a checkerboard so I did gloss over it for the sake of brevity.
The one thing I will say is that there have been major transformation through the area.
Victoria Born:
Property values are not always a function of medium incomes in the region regardless how much some people might want them to be. All one was to do is look at the cost of a house at Whistler.
Rather property values reflect the purchasing power of people who are buying in a city. Victoria has a disproportionate number of affluent retirees with 30 or more years of accumulated financial strength that have been buying in the city. In the last few years a significant portion of the buyers island were not local and tended to be the gray haired set with deep pockets. This is a trend that I suspect will continue for quite a few years while the boomers are retiring.
Thanks for the graph, LF. The cliff in 2008 is pretty stark. Developers don’t have deep enough pockets to keep building and just hold until the next peak. They are all in debt to the banks, just like everyone else. The carrying costs can be huge.
Is this supposed to be a joke?
916 Empress Ave
Listed: 2,000,000
Assessed: 994,000 (461k of that is buildings so definitely includes the “addition”)
To anyone interested, if you adjust the graph to cover 1972 – 2018, a pattern of building emerges.
After 81, it went off a cliff when demand evaporated. Then we had a run up starting in the late 80s to about 1990, and with it huge amounts of construction. Then demand plummeted and construction fell off. Then another run up until 2008, and then stagnation for several years.
While the correlation isn’t 1:1, it appears rather strong nonetheless. Each time it spikes – a plummeting follows as demand drops off. And what’s more, the greater the spike, generally the greater the plummet. With that in mind, have a look at where we are now, and also the scale of it.
Not only is it suggestive, but it also challenges the notion that we “aren’t building enough”. I would actually argue that we’re overbuilding relative to population (but not demand) growth. It would be interesting to see inflation adjusted prices over the same time frame superimposed over this image.
My assistant goes through all the private sales on various websites and sends me a spreadsheet every Friday that I look through. 98% are overpriced but there are gems out there my clients have bought over the last couple of years. Depending on the description (i.e. NO REALTORS PLEASE) I either send my clients in by themselves or I represent them.
I think last year I did 7 or 8 private deals with FSBOs. Where I do represent my clients, I ask for 1% instead of what they may see otherwise (3%100k+1.5balance..commissions may vary) works really well when the FSBO feels you are being somewhat reasonable. Haven’t had the 1% rejected to date.
oopswediditagain
Thanks for the 411! Always good to understand that sort of thing better.
Can you be more specific? It’s just a guess. It’s not like I plan to hold you to it.
@Caveat Emptor
I agree but lately I’m seeing the opposite. I’m keeping my eye on 3 private sales that didn’t sell, so all 3 sellers listed with a realtor, at a higher price (Two went from 400k to 430k and one went from 450k to 490k, so 30k, 30k and 40k more). I’m curious what they’ll end up selling for in the end.
“The interest rate game is really difficult to gauge.”
Local Fool: “Definitely. All we know is what’s happening now. For the moment, the difference between US and Canadian rates are unfavorable for the CAD and consumers relying on imports (less discretionary spending). It is also favorable for inflation.”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Hi Local Fool. Just a quick refresher on how mortgage rates are determined in the marketplace.
http://www.fciq.ca/pdf/mot_economiste/en/me_022011_a.pdf
“Fixed Mortgage Rates
Fixed rate mortgage loans are primarily influenced by the yield on Canadian government bonds (bond yields) of corresponding maturity. Chart 1 shows the relationship between five-year mortgage rates and the yield on five-year Canadian government bonds. Notice that the correlation between the two is almost perfect. This is because bond rates represent the benchmark for financial institutions’ cost of funds. The difference between the two rates (mortgage rates and bond yields) represents the yield that financial institutions require to lend the funds out on the mortgage market.”
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The Bank of Canada certainly has an impact on variable rates but the bond market will determine the 5yr rate and the 5 yr rate in Canada will be determined by the bond market in the U.S.A.
When the bond prices in the State provide a better return with increasing yield, the Canadian government will have to match that yield in order to attract the buyers that they HAVE to have to enable all of the government projects on the table.
“They are also influenced by foreign economic conditions and
investors’ perception of Canada’s financial and economic health.”
The world (bond traders) is undoubtedly aware of the FIRE market in Canada and believe me, if they ascertain that there is a probability of a housing market implosion they will be looking for added premium on the yield. That increased yield will put further stress on potential homeowners with OSFI B20 regulations.
http://business.financialpost.com/real-estate/toronto-luxury-home-sales-tank-from-last-years-record-pace
“Thanks for keeping the BUY GOLD dream alive, Introvert! I want you to think deeply about this…and get very sleepy:)”
Agree Lost Soul, now is the time to start slowly accumulating gold and related quality miners. By fall the shit should hit the fan as US dollar tanks even further. Oil will probably spike into 80’s as well.
US credit problems looming ? Trump’s lawyer office just raided , planning to bomb Syria…… verrrry interesting. 😉
Via WSJ reporter…. “BMO: there is “some chatter” that the U.S. credit rating is at risk; #Moody’s is reporting its findings Friday.”
Greater-than sign followed by a space followed by what you want to quote.
For example, here’s how I quoted you (above):
Getting rid of the buyer agent commission requires the agreement of both the seller and the agent so is always going to be harder to achieve.
I agree with others. Focus on making your lowball offer as compelling as possible by minimizing conditions, being flexible on possession, etc.
Cut out a buyer’s agent and the listing realtor MAY be motivated by greed to support your offers above others.
Alternatively enlist a cash back buyer’s agent. Yes 50% of cooperating commission is “too much”. But maybe it is the best you find
Private sales are in theory the way to go.
Let’s face it -real estate agents commissions – while in theory contributing to economic activity are really just a drag on the economy.
A typical sale has a 2% PTT (which at least helps fund our government) paid for by the buyers and a 3% realtor “tax” paid for by the seller. Avoiding the former is impossible (except for some very specific transactions). Avoiding the latter is great if you can do it.
I say private sales are great in theory. The problem in practice is that many private sellers have an inflated view of the value of their property. Their private sale never happens. Later they list with a realtor at a more reasonable price, the property sells and they think that the genius realtor sold their place. Sigh!
If you want to be a successful private buyer you are going to need to talk to people, neighbours, landlords, friends, and total strangers to ideally find a place before it comes to market (obviously you can look for FSBO listed sales too) and you are going to have to follow the market carefully to get a good idea of what stuff is worth. Also be prepared to pay for an appraisal.
If you want to be a successful private seller:
1) Get several real estate agents to look at your house and do a market analysis
2) Spend the few hundred bucks for a professional appraisal
3) Study comps on your own
4) Hopefully all of the three above will be in rough concordance and give you a target value
5) Talk to neighbours, friends, and other contacts. If you are lucky you find a buyer without spending a cent on advertising. If you are in a condo unit talking to other people in the complex is invaluable
6) Advertise
7) Be willing to post on MLS (mere posting) and pay commission to a buyer agent if above steps have not yet netted a sale.
I agree with Hawk – I have been watching Uplands as a harbinger of things to come – a leading indicator. Haven’t seen so many listings there for 2 years [2016 is really when the Victoria market took off] and now significant price drops.
Victoria’s market is certainly cooling. We have not yet felt the full sting of the Housing Affordability measures – but we will. Buyers need to be patient. Sellers need to sharpen their pencils, as more listings come on stream.
Let’s keep in mind that property values are a function of median incomes in that region [not China, Russia, or elsewhere]. By that standard, Victoria’s RE market is extremely expensive. Fundamentals do not support these prices.
VB
From Last thread – @Barrister
There are almost two Victoria real estate markets roughly divided into two geographic groupings. On the one hand there is the West Shore, Esquimalt, View Royal and parts of the Peninsula such as Brentwood Bay. On the other hand, there is Oak Bay, Fairfield, Rockland and James Bay and other parts of the Peninsula that are dominated by retirees.
I don’t disagree with much of your thesis, but your ‘two markets’ picture is off. For one thing, it doesn’t include Saanich, which is the largest muni in the area, and the traditional ‘wealthy suburb’, that isn’t really either anymore. And I think you’re misrepresenting the peninsula, which has its own dynamic, with a real mishmash of property types: includes more affordable places like Central Saanich as well as expensive acreages, full blown farms, and high end waterfront like Lands End.
Real Estate-wise, Greater Victoria is a strange animal.
“Those sluggish sales are starting to show up in the days on market which rose from 13 to 19 in the past week.”
Oh, whoop de doo. Back on the prairies, my last house sat on MLS with weekly open houses for more than 6 months.
The demand for condos is interesting, in light of the sheer volume that has been built over the last decade. I haven’t followed comments here regularly, but wonder how much of it is like downtown Vancouver: gambling.
“lowball the price with an unconditional offer directly through the listing agent and hope that listing agent is motivated to make more $$$ or he or she decreases the gross commission with no buyer’s agent involved to make the numbers work. ”
Marko, I do plan to make an unconditional offer with a big deposit and an early closing date. How much lower do you think the price can be? How big the deposit should be to impress the seller? How early the closing date should be to the seller’s liking?
I still don’t quite understand the buyer’s commission part, on the offer should I put a note saying that buyer is not using an agent, to hint that seller don’t need to pay buyer agent’s commission to the listing agent?
My goal is to lower the price as much as possible with unconditional offer with a big deposit and early closing date and no buyer’s agent commission. How low do you think my price can go and still can be accepted for the seller?
“Basically your offer is of “high risk” to sellers due to no agent (and not from local?). ”
I am local Canadian. What make you think no agent means not local? There are locals don’t want to pay high commission especially with an unconditional offer because there is not much work need to be done by an agent.
Leo S, if I write an offer to a listing agent, how do I get the proof that listing agent pass on my offer to the seller as soon as possible?
Andy 7, I do prefer private sales, but most listings are on MLS, I will still try to find a private sale but most likely I’ll find a house on the MLS.
Leif, 50% commission is way too much if I find the house myself and make an unconditional offer, there is not much need to be done by a buyer’s agent.
Thanks for keeping the BUY GOLD dream alive, Introvert! I want you to think deeply about this…and get very sleepy:)
I agree with you Hawk, the numerous listings in the Uplands also supports this theory.
For anyone, how do I comment on a comment, by quoting it? Please help me Introvert you have done this so nicely….keep in mind I’m on a mobile device.
338 Foul Bay Rd slashed $120K to $1.57 million. High end place reno’d by Gonzales Beach.
3361 Woodburn Avenue by Uplands golf course slashed $152K to $1.99 million. The big bucks buyers gone AWOL, which is usually where the crash starts.
I have a suspicion that people won’t realize the spec tax applies to them until they do their taxes and end up owing 10’s of thousands more than they thought. If sluggish sales continues all summer, all that new construction comes online around fall 2018, and then in March/April of 2019 the spec tax sinks in, that’s shaping up to be quite a spring market for next year.
(All from the previous thread:)
I don’t think prices in the core will decline as much as many hope/think they will.
Did I?
Calgary gets snow in August on occasion.
Do financially troubled people disproportionately recommend buying gold, or do people who recommend buying gold disproportionately get into financial trouble?
There’s a fee to renew?