August Wrapup: A tale of two markets
August numbers are in and the overall picture is of market that is diverging more and more between condos and single family. Single family sales continued to slow down as expected in August, down 30% compared to last year, while condo sales actually increased a bit from July and are at almost the same level as last year. This is relatively unusual, having only happened once in the last 10 years (in 2014). It reinforced the difference between the condo and single family market, which is perhaps best illustrated by the difference in sales compared to historical norms (past 10 years).
Single family sales are languishing near the bottom quartile, while condo sales are near the top for August. The same picture is in play when looking at months of inventory, where single family properties are at double that of condos. The bump in condo sales meant an interruption in the cooling trend in the overall market on a seasonally adjusted basis.
Inventory is still climbing when adjusted for seasonality, but more slowly than before.
If we want to dig ourselves out of this hole, it’s going to have to go faster than that. Again, the situation is quite stratified, with only 12% more condo inventory on the market while there were 33% more single family properties. One of the reasons for the scarcity of condo listings is that new listings are down 26% for condos in August compared to last year. I would have thought that the looming spec tax and AirBnB regulations would have brought a lot of investment condos out of the woodwork, but so far that is not the case at all. Historically speaking, we still have very few properties on the market.
Before we hear in a certain press release that the increase in inventory is limited to high end properties and won’t do the ordinary buyer any good, let’s put that myth out to pasture. Despite single family prices having risen from a year ago, inventory in every category including the lower end is up. The middle of the market is still the most active of the bunch with the high end the most sluggish.
Prices are flat for the month, which makes it 8 months of absolutely no change to the median prices. In January I said single family houses have probably peaked while condos may have a few more months of gains in them. SFH did stay flat which makes some sense given the market balance, but I’m surprised that condos didn’t pull off a few more months of price increases. Despite the low inventory and decent sales rate, it seems that condos have not been able to pull ahead this year.
In September we will see a bit of a bump in new listings, usually about 100 more than in August, however both sales and inventory will keep drifting downwards towards the end of the year as only the serious sell and speculative listings are pulled to try again next spring. By that point some of the initial impact of the stress test will be absorbed through higher wages, however we can likely also look forward to another bump or two in interest rates which will suck that credit right back again. It remains to be seen whether the policymaker’s dream of an orchestrated soft landing is to come to pass. So far in Vancouver it looks like it is getting pretty bumpy.
Monday numbers: https://househuntvictoria.ca/2018/09/10/sept-10-market-update
That only 39% of people own their home in Victoria, really surprised me. It’s pretty low compared to other cities including Calgary who is at the top with 71%.
https://www.huffingtonpost.ca/2018/09/08/canadas-tradition-of-homeownership-is-at-risk_a_23520973/?utm_hp_ref=ca-homepage
Anyone visit 1524 Cedarglen, what was the quality?..could be a contender for the flip of the year? 01-May-2017 $717,500 Just relisted for 100k less at 1.59
El Serano a similar total rebuild flip sold for 1.42 but had a much bigger lot.
https://www.zolo.ca/victoria-real-estate/1524-cedarglen-road
How millionaire migrants duped Canadian immigration
https://globalnews.ca/video/4436342/how-millionaire-migrants-duped-canadian-immigration
Back to the Victoria (Not Victoria Australia, not the mortgage foreclosure blog). What is a view worth? 807 Sea Ridge Pl V8Y 2T5SE Cordova Bay-Saanich EastMLS#:391887
$1,825,000 https://www.remax.ca/bc/victoria-real-estate/807-sea-ridge-pl-wp_id208092039-lst
I know it says bring your offers, Vancouver seems to be coming in at or below assessment but we still want a 350-500k premium,$1,457,000 assessment. Not a 10% adjustment in price to find buyers but the drop is substantial. 111 days on market.
I personally would need a drop to below assessment to go view it and watching view property on island view road, it might not sell for 222 days on market.
But a real friend is there for you in hard times.
Easy to find a friend in good times. But…
https://www.youtube.com/watch?v=0b-OHZI1Q5w
Counterpoint: my dad sued Deutsche Bank after he lost a significant sum in the financial crisis due to a misleading prospectus and unethical sales practices. He won and they had to refund his losses.
A point worth making again and again. What matters are the people at the margin. Most home owners were perfectly fine in the US crash and just kept paying their mortgage as before and stayed in their house. They were also completely immaterial to house prices.
Perhaps the bank of mom and dad is getting bigger in Canada due to the lack of inheritance tax. And, could it be a contribute to the run away housing price in Canada?
https://www.cbc.ca/news/business/canada-wealth-high-net-worthy-1.4814907
Usually people end up in foreclosure for a reason. There is bad luck foreclosure (health, etc.) but for the most part it is poor decision making.
Totoro is right…there are always options but I’ve yet to show a foreclosure where the upstairs main part of the home is rented and the owner is downstairs in a two bedroom suite renting out the second bedroom to a homestay student…..probably because someone willing to go to those measures wouldn’t end up in foreclosure.
I’d suggest that those two things are not linked in this manner and that rental income may not cover all your costs but may allow you to cover enough of the costs to keep your home. For me, this would be worth it in most circumstances to retain a house in this market during a downturn or hard times.
Unless it works. Which in some circumstances it does. I can see that this would not work for you, but I’ve co-owned property successfully with a friend. There are co-ownership mortgage products these days and co-ownership template agreements.
This is why meeting with a non-profit credit counseling agency is the best first step before deciding to consolidate debt, file consumer proposal, file bankruptcy or hang on. Googling file bankruptcy Victoria may direct one away from the non-profit agencies that are willing to help without being motivated by greed.
People should also remember that one half of surplus income for I believe a period of twenty one months is turned over to your creditors, assuming that I remember my bankruptcy law correctly (not my specialty so I might be a little off on the details.) The threshold for surplus income is set on a formula that is amended each year.
While an option, one has to weigh things very carefully before declaring bankruptcy. There can also be hidden costs. In my experience, it is not totally uncommon for a trip to the bankruptcy trustee to be shortly followed by a trip to the divorce lawyer.
Great conversation on the Canadian and Australian housing bubbles…
https://www.youtube.com/watch?time_continue=1778&v=0lrdxpKPocY
Watching the bulls sweat is hilarious. 😉
(1) “You are incorrect. Marko is correct. Your bank does not have to apply the stress test to renewals of existing mortgages and typically will not if you have been making payments”.
That is not what I stated. You are not subject to the stress test if you stay with the original lender – that is common ground. You succeeded to miss the point. If the borrower has negative equity – do you think the original lender is going to give that borrower the best rate for their best clients? Answer: no. The lender is at risk and will seek to contract for a higher rate, if they do at all, or make demand. If the borrower doesn’t like it, they can go to a different lender and THEN face a stress test. Either way, the borrower is paying more. The original lender is not stupid – they look at income, other debt, job security, amount of default risk, valuation [loan to valuation ratio], etc.
(2) “I don’t think that’s actually the argument. It’s more what the bank will do if come renewal, you owe more on the house than it’s worth”. You get it. Imagine if we are past the peak of the cycle and the borrower has other consumer debt. The bank’s initial mortgage is not secured by equity in the home. Lending in a sliding market by way of mortgage security where there is no equity makes no sense.
(3) “In reality at 30% under water a lot of people would stop making payments even if they could afford it and then the bank would foreclose on them. You get kicked out, you find something to rent and you move on. But that is not the argument here, the argument is you could be 50% under water but if you are making regular payments the bank doesn’t really have any better options than continue to let you make payments”. In the USA some states prohibited personal covenant on a mortgage, in Canada there is a personal covenant on 100% of mortgages – so, you don’t get to walk away – you jet judgment against you for the shortfall plus costs at Scale A under the Tariff to the Civil Court Rules.
(4) “Victoria Born’s post is fear mongering, and talk out of his arse”. Funny. Just put yourself in the shoes of the bank – would you loan $1,000,000 for a home that is worth $900,000 – no security – to someone who has $50,000 in other debt and prices are sliding? This is capitalism, not a commune where they sit around singing songs. Think of all of those US bank employees who were fired for making the mortgage loans you are saying, “oh, no problem, as long as you pay they will loan it”. Until you can’t pay it. Someone’ head is on the block.
(5) “OSFI has put fairly strict rules in place to protect the banks interests. Only the banks interests”. Enough said – so correct. This is why Canadian banks survived and the Regulations were tightened even more since.
You seem to all (most of you) forgotten what happened in the USA in 2007 through 2009. History. You also forgot about our stricter banking regulations. Further, personal judgment for the shortfall is a real thing. This is all part of the credit liquidity drying up as sales volumes drop and prices [which is happening right now] peaked months ago. This is not fear mongering – this is risk analysis – plain and simple. If you think bankruptcy is a cake walk – think again.
If you could pay the mortgage by renting the place out there wouldn’t be a downturn in the first place.
Bringing a whole new meaning to “greater fool”.
@guest_48781
I have a friend whom was sued by a bank, he fought the bank for years because he kept getting judgements in his favour. The bank always appealed the decision and banks have very deep pockets and hate presidents being set.
In my opinion he was foolish to fight the bank but as he watched his assets disappear and he turned to friends and family to carry on the fight his determination grew. As suspected by everyone with the exception of himself it exhausted all his resources.
The bank eventually beat him down and he declared personal bankruptcy. Yes banks do sue and do get sued but it is a hard battle to win.
In most circumstances this is very poor advice. Bankruptcy will stop you from getting another mortgage for at least six years and then you’ll need to rebuild credit. A smarter move in our market is to do what it takes to keep your home if you can and ride out a downturn. Rent rooms or the whole place out. Sell half to a friend. Given the history of the market you are setting yourself back substantially if you declare bankruptcy due to a mortgage.
If you have been way out of control with consumer spending and have no assets bankruptcy might be advised.
What I find curious is that while Van, Victoria and the rest of the island seems to be in a sales freefall for SFH, Parksville/Qualicum and the Comox Valley rebounded for the month of August after a few months of low sales. Curious to see if this is a dead cat bounce or if it will continue; If it doesn’t follow Van and Vic’s lead of downward sales, then perhaps there’s another factor at play…
In the Comox Valley, SFH inventory is still at record lows, and below last year’s numbers; again, has not yet followed Van/Vic SFH patterns for rising inventory.
What I have also noticed is Victoria appears to follow a much more consistent trend – ie when sales turn downwards or upwards, they tend to continue on that trend, while up island sales seems to bounce up and down quite a bit before showing a consistent pattern; not sure what would cause this but interesting to watch.. What surprised me though was after 3 months of falling sales, that parts of up island rebounded back up. We’ll see what September brings…
August:
http://www.vireb.com/assets/uploads/08aug_18_vireb_stats_package_64515.pdf
July:
http://www.vireb.com/assets/uploads/07jul_18_vireb_stats_package_64515.pdf
GWAC: “Well if it’s happening in Seattle must happen here.”
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That was actually for Introvert, my friend. There was a post by introvert a couple of days ago referring to the Seattle housing market going up by 100% over the last 6.5 yrs.
I'll try to stay current for you. Lol
It’s not cooling in just Seattle, not just in Toronto, not just in Vancouver, not just in Victoria, not just Sydney Australia, not just in England, not just in Shanghai, not just…(pick your city…). It’s a global cooling trend, just like the rapid price escalation from 2012 to 2017 was a global trend. It’s not a global crash, it’s just a global cooling. No one knows where we are heading, we are all just guessing. My guess is for an accelerating house price decline for the next 18 to 24+ months, exponential; but I’m just guessing, just like everyone else; but it’s indisputable that a decline is underway that has chilled all major real estate markets.
Most house owners will not be affected by a downturn, most of us consider our house our home, and we all need homes. The decline will be driven by a small minority that are forced to sell and there are only a few reasons why someone will be forced to sell for either material reasons or psychological reasons, for example:
1. Mortgage renewal time but can’t afford to renew due to higher rates, or insurance requirements, or bank reluctance due to underwater mortgage,
2. Change in personal circumstances, death, divorce, unforeseen major expenses, health, etc
3. Investment property expenses far exceed revenue. Any rental property purchased since 2015 will be in this category.
4. Major repairs are needed, but the owner can’t afford the repairs. I’ve seen people forced to sell due to a flooded basement when they couldn’t afford to have the perimeter drains replaced.
5. Employment; either laid off or moving to a new location for a better job.
6. Disillusioned with Victoria; some people just want to move away.
6. Panic, fear of losing paper equity
These reasons happen over time, not suddenly. Conversely, an increase in house prices is heavily influenced by ‘lemmings’, everyone suddenly jumps onto the ‘bandwagon’ of house buyers, so prices spike quickly. On the downturn, it rarely a crash because the reasons for selling don’t create a lemming effect, rather it’s a gradual decline.
Sure, but I’d rather not live in a pile of shit.
In our society one often hear bravado statements such as “I’ll sue you!” Or in the case of this thread people being sued by the bank.
-But will they?
An important thing to remember when suing someone is to know that they have the money to pay you. You can sue someone that is bankrupt but why would you?
You won’t get any money and you’ll have to pay legal fees.
Claiming bankruptcy is not as socially stigmatized as it once was. Today you will find most of the younger generation immediately claiming bankruptcy. While generations in the past would have tried to solve their financial problems by cutting back on their expenses and paying their bills. And in my opinion since the younger generation with debts in the hundreds of thousands have it right. If I were 26 years old and facing a mortgage debt of $500,000 that I could no longer pay, not only would I walk on the loan – I’d run. Recourse or Non-Recourse.
Well if it’s happening in Seattle must happen here.
The deperation of the bears is amazing. I am sure there is a pile of shit out there that is a bargain.
…. and meanwhile in Seattle … whoops
http://www.seattletimes.com/business/real-estate/seattle-home-prices-drop-by-70000-in-three-months-as-market-cooldown-continues/
“Looking just at the city of Seattle, the change is even more pronounced: The median house last month sold for $760,000, a drop of $45,000 in just one month and $70,000 in three months.”
We’re debating on whether it makes more sense to
a) look at 2nd property
b) sell and upgrade to our last house
I don’t believe PM’s exist here. Perhaps you have some advice on what you would do if you were back to a similar fork facing us and/or could do it all over again.
Would need way more info like could your current house become that 2nd property now or down the road, the price range of your last house and whether it would have a suite or not, etc. Not a black and white question.
That’s not what I’m talking about, ie full recourse vs non. I was talking about non recourse vs personal bankruptcy. If you’re in a full recourse jurisdiction, bankruptcy will discharge the homeowner’s obligation on the shortfall remaining, after the bank forecloses on their home.
They can seek legal action all right, the bankruptcy will just limit their take to your existing assets, split with any other creditors.
I agree with LF here, you could walk away and claim bankruptcy in BC so your mortgage lender would not be able to seek legal action for shortfall. In Alberta, there is no recourse for non high ratio mortgages and many borrowers have been walking away to capitalize on this.
I just got woken up by the earthquake.
https://calgaryrealestatereview.com/2012/03/04/lender-refuses-to-renew-owners-face-foreclosure/
The article notes that major banks generally won’t do this, but it’s the most stretched borrowers who are most likely to deal with the other lenders.
Time to debunk this fallacy again. Only about 1/4 of US states are no-recourse. The others are full recourse just like here. For example Florida, which had one of the biggest crashes, is full recourse. Also, the no-recourse states often have limits. In California only the original mortgage used to purchase the property is no-recourse. Any re-fi, 2nd mortgage, or HELOC is full recourse.
The stress test is not mandatory if you renew at your existing bank.
http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b20_dft.aspx
Barrister, here is some midnight reading for you on the OSFI expectations.
http://www.osfi-bsif.gc.ca/Eng/Docs/b20.pdf
The Loan to Value Ratio (LTV) seems very important at all times to the mortgagee governed by the OSFI rules.
Banks have few options when confronted with high LTV ratio applications, but two options are: insist on mortgage insurance and secondly, charge higher interest rate commensurate with increased risk.
The mortgagor on a high LTV mortgage application has few, if any, options, especially if they can’t qualify due to the higher monthly payments incurred by the higher interest rate at renewal, not to mention the difficulty of obtaining mortgage insurance at renewal.
The LTV ratio of all mortgage holdings held by a bank, seems to be an overriding assessment point used by OSFI in determining a banks compliance with OSFI.
The bankers practice of refusing to renew high LTV ratio mortgages was common practice in the 1980’s after house prices declined.
@guest_48535
Do you really think we are going to be going up in the next 12 to 24 months?
I see slashes happening all over the map for properties 800k+. Do you really think we are going to see a increase in median prices within the next year or 2 or do you agree that we are starting to see this run up hit its peak (for now) and we are now flat lining and going down?
I think that there has been a good question asked about what regulatory rules apply when the mortgage is renewed by the same lender. Not my area of expertise so I dont know the answer and I hope someone here actually knows.
In law I dont believe that there is any such creature as a mortgage renewal and each renewal is a new separate mortgage. It is possible that the bank regulatory rules provide exceptions of applications upon a renewal but I have no idea if such exceptions exist.
For example, if one wants to renew a mortgage does one have to qualify under the stress test? Are the banks limited by regulation as to what percentage of a house’s fair market value that they are allowed to lend.Do the regulations prevent a mortgage for an amount above the said limit upon a renewal.
We have a number of new regulatory changes so past bank practices might not be reflective of the new situation.While it might be sensible from a business point of view for a bank to renew a mortgage that is underwater rather than foreclose, the question is whether the new regulations prohibit a bank from renewing.
Does anyone here know for sure?
@AAA
“a) look at 2nd property” make more sense, but we did “b) sell and upgrade to our last house.”
Dollar and cent are not the most important for us, we like to live more comfortable, F+F visits, and hate to pack and unpack boxes again.
Sorry, my response rise more questions than answer.
I’d need more information to understand your goals and hoped for standard of living and age of retirement.
Generally a second property is going to be a longer-term, cash-flow negative investment in our market with the ROI coming from appreciation maybe seven-ten years into the future. If you are renting it out the costs will be somewhat offset but you’ll also become a landlord. Some are suited for it and some are not. When you sell you pay capital gains tax on the proceeds. In addition, although your costs might be set off by rental income, you will likely pay some additional taxes on the principal pay down portion. Financing terms are not as good as with a primary residence but you will be able to borrow more because the rental income will also be counted in the qualification process. If you want to leverage as much as possible a rental property helps you achieve this.
If you buy your last house this is going to be a really long-term investment that may only pay off for your children if you are adverse to HELOCs used for investments along the way. The plus side is you get to live in a great space now and the gains will be tax exempt. The negative is that your greater carrying costs are borne by you alone unless you have a suite to offset some of them.
For most people in our market the wisest long-term financial decision is likely to be the best primary residence they can afford with a suite to offset risk. For you this might not be the case depending on your views on suites and future ability to weather interest rate hikes and risk tolerance.
You might also want to look at the Canadian Couch Potato investing advice. Just because you’ve filled up the tfsa and rrsp doesn’t mean that you might not benefit from additional investments. Also, if you have a business that is making money I’d focus on how to do some tax planning within the company and how to sell the business when you want to exit.
@oops – IN THEORY, the bank can come in your home and if they are not happy with its condition, they can call the loan anytime.
It never happened, same as foreclosure on houses with good payment history.
VB is wrong. Instead of just admitting his mistake, he repeated his misinformation. Why is it so hard to admit that he is wrong?
Totoro/Marko/Leo,
You have my highest respect financially on this blog, so I’m throwing a couple questions your way.
We’re thinking though our options for the future and require some financial planning that goes well past our local bank. Business has been very good for us in the last 4 years and we’ve managed to save a good amount net of all expenses. We have also managed to max out our RRSP’s and TSFA’s. Age wise I’ll just say we have a long ways to go before either of us will consider retirement.
We’re debating on whether it makes more sense to
a) look at 2nd property
b) sell and upgrade to our last house
I don’t believe PM’s exist here. Perhaps you have some advice on what you would do if you were back to a similar fork facing us and/or could do it all over again. Anyone else in a similar position feel free to chime in without passing judgment (which seems like a provincial passtime)
Plum wine: “Victoria Born’s post is fear mongering, and talk out of his arse.”
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Not necessarily Plumwine. OSFI has put fairly strict rules in place to protect the banks interests. Only the banks interests.
You see, Marko was probably right regarding a homeowner’s strategy if they were 30% underwater on the mortgage.
The problem for Mr. junior bank representative is that he watched the banks collateral sink because “they always made their payments”.
Now, go to OSFI and explain that you didn’t apply their rules because you assumed that the homeowner would continue payments and nobody could have anticipated a 30 – 40% price drop.
….. now the bank is not only screwed on the collateral but they are fined by OSFI.
The banks are very forgiving as equity is driving up year after year. The bank supervisory body is anything but on the way down.
And I thought I was wasting my time, looking at Vancouver stats hopeful for a minor correction here.. Australia has 0 relevance to Victoria BC Canada. Go post on their blogs. If we want to read about irrelevant things we’ll go to reddit or google it. Don’t copy and past crap here. Get a sailboat off usedvic and take it down to Australia and buy your chunk of the South Pacific cheap at the end of their slow 5 year slide, but please leave now!
Meanwhile, down in Aussie land, the credit squeeze continues and buyers wait out the sellers. Victorians would be wise to do the same.
Buyers wait for bargains as Australia’s housing market hits long slide
It’s not a credit crunch, it’s a credit squeeze
Pete Wargent
Prices across Australia fall for 11th month in a row and while it’s bad news for investors, first home buyers are biding their time
“Five years ago banks were “falling over each other” to give out loans says the Sydney-based IT executive Karl Sice, who bought his first investment property 15 years ago. He currently has six properties in his portfolio across Sydney, Melbourne, and northern Queensland.
But after roughly six years of uninterrupted, breakneck growth, Australia’s housing prices are falling, and the noises from the lenders have changed. The difference between now and five years ago, Sice says, is like “chalk and cheese”.
Sydney and Melbourne, the twin engines of Australia’s house price boom, are finally spluttering – thanks mostly to financial regulator Apra’s tightening of lending and the fallout from the banking royal commission.
And while it may not be a crash, it seems set to be a long slide. This week, Capital Economics predicted the coming fall would be the “longest and deepest” housing slump in Australia’s modern history.
But while it is bad news for Sice and his fellow investors, it is good news for hopefuls trying to buy their first home. Where once the market was driven upwards by buyers’ fear of missing out, now they can afford to wait and see.
Rhi, who lives in the Illawarra region of New South Wales, south of Sydney, works in construction. She says she plans on biding her time and “snapping up” her first home when the market hits rock bottom.”
https://www.theguardian.com/australia-news/2018/sep/08/buyers-wait-for-bargains-as-australias-housing-market-hits-long-slide
Hey, all you owners and realtors out there dropping your asking price by less than 1%…fuck you.
Re: minuscule price drops…
I’m not ready to buy yet, partly for personal reasons (moving from Ontario, need to find and settle into new job, etc.) and partly because I think the market is insane. I do find it amusing though when sellers drop the price to $1.03M after the market says $1.05M is too much. Looking at you, 59 Moss and 615 Moss.
Good to know 🙂
In conclusion, the bank won’t kick you out if you keep paying them.
Victoria Born’s post is fear mongering, and talk out of his arse.
I think that’s the whole point as Marko stated… (ie. being current with mortgage payments). I also worked for Scotiabank for 5 years (my only banking experience) . When times are good and mortgage payments are being made, no complaints!
The branch manager where I trained always said, “Banks aren’t in the business of owning property”. True then and true now….just imagine the expenses related with foreclosing on a borrower. Our daily loan reports were completely focused on late payments, not valuations, etc. If you could get a borrower current, yipeee, then move on to loan origination. Only when the delinquency was so extreme, we would then have to pass on the file to our “recoveries” specialists. Collateral is ultimately the “back door” to under performing loans, not the primary focus.
That’s if you still have a job.
Right, that makes sense. Thanks.
Aside, unfortunately a lot of people in Canada think that people here cannot walk away from their mortgages as in the USA. “That can’t happen here.” In fact you can – different process, different name, but the end result is the same.
What happened down south benefited some and devistated others but it didn’t work out in the banks favour in any case. I have a friend that lived for a year in their condo without paying their mortgage after paying 200k for it and the unit next to them sold for 50k. The banks stopped kicking people out because they couldn’t manage all the vacant properties and the problems they created. Then he declared bankruptcy and his wife bought a SFH for the same price as the condo… hardly an example to follow for the banks. Make your payments and nothing will happen….
If you owe 30% more for example, would the bank still just “hope”?
In reality at 30% under water a lot of people would stop making payments even if they could afford it and then the bank would foreclose on them. You get kicked out, you find something to rent and you move on. But that is not the argument here, the argument is you could be 50% under water but if you are making regular payments the bank doesn’t really have any better options than continue to let you make payments.
If the mortgage has been bundled up in a mortgage-backed security and sold on to another party, who forecloses? In the US, foreclosure proceedings were instigated by parties other than the banks that people were paying. Even people who were paying their mortgages got foreclosed because the MBS holder wanted their money out.
also, I heard that credit unions aren’t required to register second mortgages against the title so how would a person know if a second mortgagor has a lien on the property?
I know people say our industry is better regulated but I have never seen anything that explains how. Any references in this regard appreciated.
It was not a big success for the banks down south so I’m sure they don’t want to repeat that…. if you are paying the mortgage then do not disturb.
I don’t think that’s actually the argument. It’s more what the bank will do if come renewal, you owe more on the house than it’s worth.
Something I’m not sure about, but there has to be a limit to when the bank stops saying yes. If you owe 5% more than what it’s worth at renewal, perhaps. If you owe 30% more for example, would the bank still just “hope”? What about 10%? 20%?
Something would have to give – millions upon millions of homes were foreclosed in the US when their bubble popped, and I wouldn’t think the bank’s logic or sense of risk balance would be that different here vs there. Thoughts?
Victoria Born, after working in a bank for 5 years I have to side with Marko.
“If the price goes down and their mortgage comes up for renewal and the bank wants an appraisal (normal) which comes in lower than the mortgage – and they can’t come up with the $$ to bring the equity to the bank’s requirement – then what?”
First of all that is not normal. In my time at Scotiabank i processed hundreds of renewals and I never once did an appraisal as it wasn’t a requirement unless they were refinancing at the same time. Even if it was a weird circumstance and I thought the place was worth less than the mortgage it didn’t matter. Even if it was for a place somewhere in Nowhere, BC where I didn’t know valuations we would never check. As long as payments were made we didn’t care. IF the place was valued less then what they bought it for then they would more than likely be CMHC insured which meant it really didn’t matter to us either way. Granted i never went through a 20% correction, I can’t see it making a large difference unless its a complete doomsday scenario. And then what? There is a writeup in our credit agreement that says the bank can request equity top up it if valuations drop to a level they find unacceptable but how much would that be? I mean Toronto dropped 20% in 3 months last year and I haven’t heard of people needing to top up their equity – Alberta house prices dropped when oil prices crashed and again that wasn’t the case.
What LEO S said is correct though. If the banks suspect you can no longer qualify to move your mortgage elsewhere they won’t be flexible on rates. Which is unfortunate given the new mortgage rules.
You are incorrect. Marko is correct. Your bank does not have to apply the stress test to renewals of existing mortgages and typically will not if you have been making payments.
No, Marko – you are totally wrong, I am afraid, and giving misinformation. The bank legally cannot refinance in that situation unless the owner coughs up more dough [come up with $200K or redeem the mortgage]. Go to another lender, but they won’t touch them with a 100 foot pole – they are radioactive. If the home goes in to foreclosure, with no equity, the bank gets conduct of sale and sells it. The owner gets judgment against them for 100% of the shortfall and get’s their wages attached, cars executed against, etc. – that is the personal covenant on every mortgage. If it is a CMHC insured mortgage, the bank is covered for the shortfall, so they will get out of it. Bankruptcy may be the owner’s only hope, if not. This is how the real world works – adult style. People are stretched far too thin, too much debt and they can’t service it even with a quarter point more on the coupon rate of interest.
“The best bet for the bank is to refinance and hope the owner can continue to make mortgage payments at the rate they offer the home owner”. Yeah, “hope” will ease the pain of the larger default down the road. Risk management dictates no refinancing [period]. The banker will be looking for another job at Tim Hortons if they refinance.
The banker is not there to wipe the borrowers nose – they are not the social assistance office. So, Marko – would you loan them the money at the prevailing mortgage rate? If not, what makes you think a bank would? I can guarantee you that the bank will not and can not. OSFI would have a hay-day with your approach.
Liens or judgments on title – Do an online LTO search. Costs $12. Here is the link – anyone can do it:
https://ltsa.ca/property-information/search-title
Does anyone know how one can see if there are any court judgments or liens on a property?
Go down to BC Land Title and pull the title on the property.
Does anyone know how one can see if there are any court judgments or liens on a property?
Marko – you misunderstand. The bank won’t force you to sell, I agree. The bank just won’t finance the renewal and the owner can look elsewhere for financing: alternative lenders or loan sharks.
It is the exact same thing. If the bank won’t refinance they have a foreclosure on their hands. Loan sharks aren’t stupid, and the home owner isn’t stupid enough to go refinance at 8% in a negative equity situation. The best bet for the bank is to refinance and hope the owner can continue to make mortgage payments at the rate they offer the home owner.
The bank requires security – the bank will not remortgage for $1M on a home that is appraised for $950K. This is particularly so where, as now, sales are dropping and prices are softening. CMHC will not touch this borrower as well.
Yes, they will or they have a foreclosure on their hands and they are losing 100k+ after commissions, etc. If they refinance the home owner their odds of avoiding a loss are much higher.
If you are renewing with the same bank where the CMHC come into play?
This must be the 15th time we are discussing this on the blog. If you are making regular mortgage payments the odds of the bank touching your are slim to none.
Steve Saretsky interviewed David Eby before the last election and asked him some good questions about direction and the intention regarding price:
https://www.youtube.com/watch?v=7yRczBxZBhs
Clearly, the NDP’s aim is to reduce RE prices in BC. That is the ultimate goal (and increase supply) of all of these policies. So, if you intend to paint your wall blue and you go to the paint store and you buy blue pain, you take it home and open it and use a brush and roller and put that blue paint on that wall and, lo and behold, you get a blue wall – don’t complain that the wall turned out to be blue. That was the intention. If you run out of blue paint – you drive back to the store and you buy more blue paint and repeat. If the paint is too light, you go back and add blue tint – viola – the wall is a darker blue. Some will get the point.
The government told you what their intention is, they have unleashed 30 measures to achieve it and are ready to do more – so, don’t be surprised if house prices fall and, I suspect, it will be a hard landing.
Read the comments at the bottom of the screen – fascinating.
And that is not Santa Claus – the hat is blue.
And Josh – you are probably paying far less than what you would be paying for a monthly mortgage [at these inflated and deflating prices], property taxes, water, sewer, garbage, maintenance, insurance…………bank it, earn some interest in a high interest savings account [Ex: EQ Bank] and let this play out. Better days are ahead for you.
Hey, Leo. Can you please explain why first-time homebuyers are so important to the RE market? We hear this all the time and I would like to understand it better. Thank you.
Seeing what seems like an increasing instance of vacant Vancouver homes mysteriously burning to the ground. Curiously, a number of them had recently been issued demolition permits. Lucky coincidence I guess, as it must be expensive to hire a crew to tear down a house.
My landlord kept prices the same for 8 or 9 years before I moved in, then raised it by the maximum every year. Pretty sure they’ll do it again this year. Still, we’re paying hundreds less than comparable apt listings.
Steve has it right – focus on the credit bubble – housing is in line with this:
https://www.youtube.com/watch?v=d63E1WUk5kE
Great summary of current status in Vancouver [I firmly believe that Victoria is in line with this]. Peak home, auto sales, jobs – all in the rear view mirror.
Opportunities forming. Shut out the noise. Follow the data so you are positioned when the bubble bursts:
https://www.youtube.com/watch?v=7pkr86X8VBo
…and it will.
Marko – you misunderstand. The bank won’t force you to sell, I agree. The bank just won’t finance the renewal and the owner can look elsewhere for financing: alternative lenders or loan sharks. Surely, you are not suggesting that the bank will violate Regulation just because the owner paid the mortgage on time for 5 years. It does not work that way. The bank will not share the owner’s risk to that degree. The bank requires security – the bank will not remortgage for $1M on a home that is appraised for $950K. This is particularly so where, as now, sales are dropping and prices are softening. CMHC will not touch this borrower as well.
Hate to burst your warm and fuzzy admiration for the banks – they are in the business of making money and they protect their shareholders. Why would a lender share the risk? Negative equity does not a loan get. Further, if they can’t meet the stress test, a banker can’t look the other way. Also, there is no Santa Claus.
Not sure it’s a great argument for a new house. Bit of a fluke that just the right stuff failed. A different combination of things can fail in any house.
Just an example of one of the many things that can go wrong in an older house.
Sorry, Marko, but that fact doesn’t jibe with the doomsday narrative. Try again.
Or you get a new tank without an expansion tank like we did.
Not sure it’s a great argument for a new house. Bit of a fluke that just the right stuff failed. A different combination of things can fail in any house.
Yeah stress test is a gift for the banks for any marginal borrowers. They can extract more spread out of those people that can least afford it. Just the type of ethical move that the banks love.
If the price goes down and their mortgage comes up for renewal and the bank wants an appraisal (normal) which comes in lower than the mortgage – and they can’t come up with the $$ to bring the equity to the bank’s requirement – then what? They have to sell.
We’ve talked about this to death over the years on the blog. The bank is not going to force you to sell if you’ve been making regular mortgage payments. Why would the bank take the huge loss of a foreclosure when they can just continue collecting your payment until you come back out of negative equity or your foreclose years down the road when the principal is lower?
If you are in negative equity you are stuck with a crap rate the bank offers you as you cannot switch banks but as long as you can make payments you aren’t losing your house not because the banks are nice but I just don’t see how it would benefit them to be forcing negative equity foreclosures.
I’m afraid you still haven’t found the issue. $600/year is equal to ~1200L per day. There is no way an expansion tank failure can lead to that type of water use unless there is actually a system leak.
The issue was resolved when we cut off the expansion tank.
i/ City meter spins very slowly, stops (with a super small flicker in the reverse direction), then spins again very slowly, this cycle occurs 24 hours a day.
ii/ We turn off the water at the main shut off at the house meter does not spin which would mean the “leak” is inside the house not between the meter and the house but we can’t see a leak,
iii/ We have the City of Victoria inspect the meter, functioning correctly.
iv/ We isolate a bunch of things (toilets, etc.) and the meter still spins slowly. Then we isolate the hot water tank and the meter doesn’t spin, but the tank isn’t leaking. We then cut off the expansion tank (not physically leaking) and the meter does not spin, problem solved.
Only theory I can come up is the failed expansion tank was causing an inflow/outflow of water but city meters don’t count backwards.
The reason the problem is so super rare is newer houses have PRVs and expansion tanks were only brought in <5 years so a bunch of things have to line up. You replace your old tank without expansion tank with a tank with an expansion tank, that expansion tank happens to fail, and your house doesn't have a PRV.
RenterInParadise asked: “…but I wonder if fundamentals have changed enough to make this type of investment cash-flow positive? Or even just break-even?”
Not even close!! House prices need to drop at least 30% before you could buy an average house in Victoria and rent it out for a break-even monthly rent that covers mortgage and property taxes and maintenance costs.
Download this great mortgage App and do “What if…” scenarios to show yourself the folly in buying a property to rent out these days.
https://canadianmortgageapp.com
I’ve noticed that as prices seem to be sliding just a bit that a few more investors are buying properties to put on the rental market. I had noted in a previous post awhile ago how it felt like investors were on the sidelines as I wasn’t seeing as many properties go from sale to rental as before. Now it’s not a flood of these types of transactions but I wonder if fundamentals have changed enough to make this type of investment cash-flow positive? Or even just break-even?
“Point is most people don’t sell a house because it may go down. They have the common sense to not spec and realize over the long term owning a house in Victoria is a good thing”.
That’s Wack Gwac.
If the price goes down and their mortgage comes up for renewal and the bank wants an appraisal (normal) which comes in lower than the mortgage – and they can’t come up with the $$ to bring the equity to the bank’s requirement – then what? They have to sell. Or, if rates rose (as now) and their income can’t pass the stress test – then what? They sell.
There are countless other “real world” scenarios that debunk what you are saying.
And your theory about the US housing market crash – well – with respect, read a book my friend. You are so very wrong. Before you employ the common “Gwac-Attack”, do some research on speculation and sub-prime lending.
On another note – I have been seeing a large surge in new listings over the first 7 days of September 2018. Plus, loads of price cuts. Many now below the inflated tax assessment values. Sellers appear anxious. The next 12 to 18 months will be fascinating.
Hawk – thanks for the link to the multiple mortgage article – wealth (?) built on debt on top of debt.
@guest_48686
I’m afraid you still haven’t found the issue. $600/year is equal to ~1200L per day. There is no way an expansion tank failure can lead to that type of water use unless there is actually a system leak.
GWAC, I was told that they don’t bother with pre-approvals because once you make the offer subject to financing they have to go through the whole vetting process again anyway. I thought the point of a pre-approval was avoid having to do that within a short time-frame. Incidentally, we were also told we would be contacted by a “mortgage specialist”. That was 2 weeks ago and no one has bothered to call. Looking elsewhere now.
Could it be that the bank thinks it has more leverage on you if you have put in an offer such that they can talk you into less than satisfactory terms because you have your heart set on that white picket fence?
Or maybe, as a self-employed person, I’m too big a risk and they are trying to gently move me out?
It’s true, history does not repeat. However, inflation has been with us since time immemorial, whether achieved by clipping coins, exploitation of new sources of gold and silver, or by the simplest means ever, central or private bank money printing. So confidence that “insane” inflation will not return seems a dubious proposition. Indeed, the 350% rise in Victoria’s mean house price since 2002, shows that we have just been through one of the most insane bouts of monetary inflation ever, though the chief consequence for prices has been manifest in asset, including RE, markets.
So the question is not whether inflation has been eliminated, but why it has manifest itself chiefly in asset prices, and how it will manifest itself in the future as money supply growth continues its merry way far in advance of wage growth.
The chief reason that the inflation of the 21st century has had only a muted effect on the cost of living is that (a) folks cannot readily buy groceries, cloths, cars and holidays with a 25 year mortgage, and (b) because off-shoring of manufacturing to Asian sweatshops has radically cut the cost of manufactured goods from computers to car parts, and shoes and shirts.
So will the trends in asset prices and consumer goods prices continue in the future?
That seems unlikely. The recent “insane” reduction in the cost of manufactured goods is being reversed in the US through a radical revision of trade policy. In future, Americans will be buying more and more stuff made not by people in electronics factories in China with anti-suicide nets, or collapsible garment factories in Bangladesh, but in high-wage US/Mexican factories. So look out for much higher consumer goods price inflation, unless Canada goes it alone on an anti-nationalist, and globalist, course. Moreover, don’t be too sure of continued rapid money supply growth through private bank lending, now that Canadians are maximally loaded with debt and interest rates have only one way to go — that being up in line with the rise in consumer goods prices. And if that is how things turn out, we could see air pockets developing in the Gordon Head RE market as loss avoidance, not affordability becomes the determinant of house prices. Only crazy central bank money printing can save RE now, but even that is likely to fail as home buyers will simply not be able to service ever larger mortgages, while dealing with rising consumer price inflation.
@guest_48636 Given the location and size of the property? I’d be tempted to buy it now with a little bargaining, can you get natural gas on Francisco Terrace? I have access to lots of trades people and it doesn’t look like it’s been home renod a bunch of times like lots of the stuff at a Million!
For the trolls out there, no one is getting rich in this market. http://hybridrealestate.ca/mylistings.html/listing.278829-1815-francisco-terrace-victoria-v8n-4w2.12653247
James, narcissists don’t need to learn because they know everything. Working in a library all day stacking books automatically makes one an automatic Mensa member. 😉
LeoS, your new chart completely blows up Mike’s 70’s theory he constantly applies to today’s market. Prices would now be collapsing as rates started to rise and surpassing affordability limits hit like they are now.
In the end we went with a home built in 05.
Not a whole ton has changed since 2005 in terms of the actual construction (a ton has changed in terms of additional paperwork/bs).
You argument is more along the lines of buy a quality newer houses versus old house and you can assessed that quality better with something that is slightly used which is solid logic.
Only thing to keep in mind with used modern homes >2000 yr built (9′ ceilings, etc.,) is that age is starting to creep up. A 2005 is going to feel similar to 2018 (not as much change as from 1992 to 2005) but your roof, for example, is on average at half lifespan.
I don’t get it. Which of this was caused by the old house?
A new house would have a PRV so unlikely the expansion tank would fail and if it did you wouldn’t end up with a water bill $600 higher than normal because of the PRV.
As for the correction in the 80s, it was very unusual. Housing markets don’t generally go from declining to +25%/year for a couple years and then immediately erase all those gains in another 2 years. That was a symptom of the insane inflation and economic measures used to combat it and is extremely unlikely to be repeated now.
I think the actual correction would have looked more like this if the economy had been more stable
A 23% correction over 9 years.
As always though, a time with increasing interest rates is different than a time with decreasing rates. Looking at the past is interesting, but does not say much about the future.
Oh, I think I get it now. So then 12% down is greater than the 100% up that came before it.
First, you normally always say something, Soper. It’s your shtick.
BTW, I seldom correct people’s writing on here anymore (and that’s not because the writing is perfect).
That’s amazing. So how’s your net worth looking, Soper?
AZ…..pretty bad when a realtor is unable to corectly spell words in the selling discription. Quite the stretch getting to “PRING” from “price”. I guess it does not matter, the house will sell itself in a market as HOT as Victoria’s.
Victhunter…..I have not gone to look at 1815 Francisco. IMHO, still overvalued by 300K.
It is. In fact 97% of original asking price is the current median sales price for single family homes (98% of last asking price). Not accounting for re-listings so real numbers slightly lower.
@guest_48491 It was enough to get your attention and then have me a google it, so there is some point to it. More importantly to me it indicates at least some motivation to sell on the part of the seller and realtor.
Maybe it is time to start putting out low ball offers (or reasonable offers in any other city in the world of the size and quality of Victoria).
I don’t think it’s true. Maybe one bank is being cautious but if this was a widespread thing it would have been covered as that would be a huge change. I reached out to a mortgage broker about it to see if they heard anything.
$1.999M
Anyone know how 2075 Neil St. sold for? Seems like a recent sale. Thanks!
Is there a point to a 2% or 3% price drop? (Just saw that 11 Oswego went down today.) Isn’t say 97% of asking a fairly reasonable offer? If you’re not getting those offers, shouldn’t you drop more? I guess this is what chasing the market down looks like.
Thanks Leo for the clarification. What could be the answer to no pre approvals. I can’t figure out what else may stop that. Income is income before or after.
Thanks Marko and Leo.
@guest_48636 did you go look at it? Could be an easy reno for someone wanting a great house at the 1 million price point. The tale of two sellers, just down the street: 1880 Francisco Terr V8N 6J2SE Gordon Head-Saanich East MLS#:399292 $1,149,900. Nicer lot/house in some peoples minds but by that much?
That’s always been the case. Just because you have a pre-approval doesn’t mean you will be approved on a specific property. The bank still needs to confirm that they will lend on that amount on that specific property no matter what you were pre-approved for.
What, you wouldn’t have bought when I said it was not a bad time to buy in Feb 2016?
https://househuntvictoria.ca/2016/02/22/why-it-might-not-be-the-worst-time-to-buy/
Granted 2013, 2014, and 2015 were even better times to buy, and I remember a lot of regular blog readers did buy during that time.
I don’t get it. Which of this was caused by the old house?
You can also bail on financing because the condition says financing “on terms and conditions satisfactory to the buyer”. Doesn’t make sense to leave out condition to inspection of course since you need to actually access the property to inspect it.
We bought without a financing condition despite requiring financing.
I can’t see PRING coming down anytime soon…
Seems like prices might be coming down.
$799,900MLS® : 391889
Last Update: New $ Chg
1815 Francisco Terr V8N 4W2
SE Gordon Head-Saanich East
Single Family Detached, 4Beds, 3Baths, 7,383SqFt Lot, 107DOM,
Originally$888,000
HUGE PRING DROP!!
I’ve had 1 rental increase ever. It was a total of 35 dollars a month.
BS on the US housing market meltdown. I guess you haven’t read any of the links I posted previously? So let’s keep it simple shall we? From the St Louis Fed – 30 year mortgage rates 2008 to present.
https://imgur.com/mAzyycd
Now to the more complex – The meltdown in the US housing market was a multi-year event beginning with a slowdown in mid-late 2005. It picked up steam in 2006 as the excessive fraud in some markets started to take a toll (see my previous post on that). Then there was the robosigning, foreclosure debacle where companies fraudulently took homes from people.
Now leading up to 2005/2006 there was quite a bit in the news about how someone could flip a house for tidy profits. The FOMO was incredible and people loved swapping stories about big over asks, line ups around the block for properties, etc. because on paper they looked like geniuses for their real estate investments. Guess what? With distrust in the stock market and financial markets post-dotcom, money flowed heavily into real estate speculation. Lots of people lost property to foreclosure because they overextended themselves. When you have 3, 4, 5, 6, or so many more properties and rental income doesn’t cover, you have to punt.
Lots of people didn’t lose their homes and could easily manage that 30 year fixed mortgage. And as rates decreased through 2013, lots of refinancing occurred to lock in those low rates.
While some did ‘jingle mail’, most that I read about were those who had overextended themselves on investments and not because of interest rates.
Mine was zero again this year.
Re: old home vs new home
We seriously considered a new build in Mill Bay, I even hired an inspector to view it while it was still being built – at drywalling stage. The inspector raised a concern over the backing being used in the tile showers.. a gypsum product that was brand new and attractive for builders because it could be scored and cut like drywall. But this stuff was relatively untested in the real world and had to be installed exactly according to manufacturer specs or it could leak. Lo and behold I t wasn’t getting installed correctly so I walked away. (And whoever buys this place isn’t going to know about this possible problem). The inspector also said, “otherwise the house is being built according to code” but really that just meant it was being built “to pass” using materials that developers use to keep costs low. I think a rule of thumb is the building must have good quality products where it’s important AND you, or better someone you really trust with building knowledge, needs to be onsite frequently to ensure things are getting done correctly. Generally houses built during boom times should probably be avoided – there’s so much rush or other possible labour problems you can almost be guaranteed of some corners being cut or things not getting done correctly.
In the end we went with a home built in 05. During the inspection of this house I asked our inspector (a different guy) if he would rather deal with an older house or have a new one. He said almost always the older one as you can see how it has settled, how the house breathes etc. You know exactly what you’re getting. For instance on a new house, even a well built one,you won’t know how air moves in the attic (and whether mold might be a problem) until at least a year or two afterwards. Of course there is “old” and then their is really old like Marko talked about with his parents house… those kinds of places I’d personally avoid unless it was some incredible place and I was prepared for major reno work.
That’s the right answer. And they have to take whatever is offered.
Max rent increase 4.5%
Highest in many many years.
Bitter probably because they want an appraisal first on the house to make sure it is worth what is being paid for.
Pat
People sell because they have to. Job/ down sizing or other reason not because prices may go down.
People in the US in 2008 walk away or sold because they could not afford the jump up interest rates structure. We do not have that here. The mess lead to job losses with lead to more housing issues.
Tell that to the 7 million US homeowners that got foreclosed on gwac. I guess you’ll be out buying that property you keep saying you’re buying for years now. You must be maxed out on credit.
No pre-approvals ? Banks know what’s coming.
My bank is telling me that no one gets pre-approved anymore. Is that right?
That’s true everywhere, all the time. So why do crashes happen then? Hint: what % of houses are on the market at any given time?
People don’t live in Enron and Nortel Hawk.. People need a place to live. it does not cost 9.95 to sell a house. Point is most people don’t sell a house because it may go down. They have the common sense to not spec and realize over the long term owning a house in Victoria is a good thing.
Sounds just like the Enron and Nortel pumpers the last few years before the credit fraud was exposed.
Imagine how all those new investment mortgage holders in Victoria will be paid back with new condos a year behind schedule, and 2 years if you’re looking for a leaker fix on your mistake purchase. Victorians late to the party as usual.
Victoria multiple mortgage holders up 20% a close second highest in Canada. Yikes !
Over 1 In 10 Mortgages Issued In Canada Are On An Already Mortgaged Home
Percent Change Of Multiple Mortgages Issued Across Canada By Market
https://betterdwelling.com/over-1-in-10-mortgages-issued-in-canada-are-on-an-already-mortgaged-home/
Only if you actually have no idea how math works.
42% down is greater than the 52% up that came before it.
I normally wouldn’t say anything, but you clearly show no appetite to learn what is something so trivially basic. Maybe if you spent less time on spelling…
Wow, the bubble deniers are working overtime. I just noticed the slashes have doubled since this morning so I guess the sellers are clearly seeing through the bullshit.
Australia debt loads same as BC/Canada, same major Asian investment that drove markets now cut off for a long time, and implemented a stress test/new mortgage lending rules like Canada reducing borrowing power by a huge amount. Credit is credit no matter where you live. And you call yourself educated ? Dumb as a sack of bricks.
Mortgage hikes show the dancing is nearly over at Australia’s credit party
Higher rates, tighter lending and falling house prices are a flashing red signal of increased stress in the $1.6tn market
https://www.theguardian.com/australia-news/2018/sep/02/mortgage-hikes-show-the-dancing-is-nearly-over-at-australias-credit-party
How $8 billion in added mortgage costs will squeeze Canadians and the economy
https://www.theglobeandmail.com/business/briefing/article-how-8-billion-in-added-mortgage-costs-will-squeeze-canadians-and-the/
What do you think the likelihood pod offering 50 or 75k less at either eagle Hurst or Polo village would have a shot at being accepted?
Both developments are for the most part out of the woods so highly unlikely they are willing to negotiate 50 or 75k.
Eaglehurst has 100 lots and let’s say they are 375k each. That is $37.5 million plus they have to finance construction to get started….that is a huge outlay of investment to start the development and at that point the situation is the riskiest. At over 50% sold they’ve retrieved $18.75 million in sunk lot costs plus another 5 to 8 million in improvement profit depending on what their margins are on the build out. Basically, you take on huge risk by not selling the lots but benefit is if the build out is selling you are making money on the lot development plus the build out; therefore, at 50% sold you are actually in much better shape than if you had just sold 50% of the building lots to builders.
Polo Village went $849,900 on three carriage homes. Those sold quickly and now the next two carriage homes they have upped to $889,900.
For whatever reason, financing or risk, they wanted to see some unconditional contracts and now they are willing to let construction catch up to sales (they’ve sold more than they have actually finished building).
info:
As for interest rates… Mark Carney recently said that rates will be moved higher soon. However, even if rates stay where they are or move a bit lower (they will not), it will not stop the 30% price/income ratio correction that has already started in Canada.
December 30, 2012 at 3:26 PM
Its been a wild 9 year ride on here for me. Good memories. I had another name on the old board. Forgot my password so had to change it. No idea what it was.
If I read this board the past few years as a new comer I would not have bought property in Victoria….Easy to get swept into the negativity.
Absolutely. You represent the well reasoned bear viewpoint
I hope I have never mocked anyone for being a renter on here.
My pet peeve on here is folks in my generation who criticize those lazy, entitled, avocado chomping millennials.
Do you really want a newer house? The houses seem to be made out of cardboard these days, and will not last. You can find older places with solid wood construction, among other perks.
Among other perks includes asbestos, knob and tube or ungrounded wiring, cast iron plumbing which corrodes from the inside, concrete or clay drain tiles that typical fail in November when you are on vacation and flood your basement suite, poor insulation, crap foundations with no footings, plus a million other things.
I just spent two months helping my parents diagnose a leak at their house. Old house, new hot water tank with expansion tank (code in last 5 years) installed last year. Expansion tank failed so as the pressure fluctuated (no PRV as old house) the expansion tank would absorb water (city meter reads forward) but then it would push the water back (city meter does not read backwards). There was no actual leak….after cutting the drywall in a bunch of places to check for leaks. Joys of an old home.
I think Victhunter meant their offer was subject to financing.
There isn’t a huge difference between making an offer subject to inspection+financing versus just inspection. The bigger factor is the length of the conditional period. Subject to financing+inspection for 5 business days would likely be a more favorable offer than subject to inspection for 8 business days reason being you can bail on the home inspection subject even if the inspection is perfect.
I would say less than 20% of buyers waiving the financing condition actually have cash. The 80% are just super confident they will secure financing prior to completion.
It’s always good to distance oneself from crazy.
Well it wasn’t the homeowners arguing that Greece would destroy Victoria RE.
Introvert: “Just for fun, let’s check in with what’s happening just across the pond (the Juan de Fuca Strait, that is):”
<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
…. and just for balance, let's see what's happening in the center of the universe. lol.
https://neuvoo.ca/salary/construction/toronto/
"The average Construction salary in Toronto, ON is $82,552 per year or $42 per hour. This is around 2.5 times more than the Median wage of the country. Entry level positions start at $58,000 while most experienced workers make up to $116,000. These results are based on 850 salaries extracted from job descriptions."
http://www.heavyliftnews.com/news/toronto–city-with-the-most-cranes-in-north-america
Toronto, city with the most cranes in North America
RLB Crane Index
20 August 2018
For the third consecutive reporting period, Toronto has the highest number of cranes in North America. This indicates massive development in the city.
For the third consecutive reporting period, Toronto has the highest number of cranes of all the cities according to the recent Rider Levett Bucknall Crane Index: 97, which is an increase over the last count of 88.
With this number Toronto rises above the number of cranes in Chicago (40), San Francisco (26) and New York City (20). Seattle is second on the list with 65 cranes total.
86% of the cranes in Toronto are for the residential sector. The remaining cranes are for mixed-use and commercial developments, followed by education, healthcare, and hospitality.
Total number of counting cranes per city:
Toronto: 97
Seattle: 65
Yes, info: a carbon copy of Hawk, but with ASCII graphs. Remember those? Weren’t they fun?
I also remember info’s constant refrain: it’s all because of these “temporary, emergency, unprecedented” interest rates.
Oh, yeah. And remember Greece? Greece’s insolvency was always about to destroy the Victoria housing market, the renters told us. Kinda like how Hawk thinks Australia’s woes have something to do with us.
Such fond memories!
Did you know that on Venus, the sun rises in the west, but from the surface you wouldn’t be able to tell? Retrograde rotation is unique to that planet. Also, the day there, is longer than its year?
The problem with the Hawk-baiting is it seems to dominate the debating between everyone, especially from those with bullish sentiment. It’s almost like what he thinks is what every other person who happens to think that what we’ve seen is unsustainable, thinks. And it’s not necessarily true – his unique brand of perspective is his only, like everyone else’s.
People who are expressing their viewpoint aren’t necessarily cherry picking, spinning, intransigent, or raging, destitute renters. That broad brush is not only childish and simplistic, it erodes critical thinking and degrades the ability for others to learn if they choose to, IMO. I’ll get off my high horse now, just felt like saying, not everyone is the same.
That’s exactly the nonsense I’m referring to.
Here is a good one from 2015. Should have listened to Marko about what he was seeing. Was different than 1980
Blogger LeoM said…
Marko said: I think I’ve received more phone calls about purchasing investment properties in the last month than the previous 5 years combined.
Deja vu 1980…
I know, I know… “It’s different this time…”
March 27, 2015 at 4:15 PM
That was INFO back on the old one.
It only feels that long!
As far as I can tell, Hawk never posted anything on the old HHV 1.0, which ceased operation May of 2015:
http://househuntvictoria.blogspot.com/
Ah, the sound interpretations of FHawk’s News.
Caveat 2 post below I spit my coke out in laughter. Well done.
Hawk keeps posting that graph that depicts a crash. If reality corresponds to that graph we would drop to well below 2013 price levels in less than a year. That would meet most people’s definition of a crash.
Just for fun, let’s check in with what’s happening just across the pond (the Juan de Fuca Strait, that is):
It’s undeniable that the market has cooled and is cooling in Victoria. So far that hasn’t amounted to much on the price front though. I personally believe some weakening of prices is in the works though it may well take longer and amount to less than the bears hope.
Why do people hawkbait? Hawk has been posting more or less the same stuff (including THE GRAPH”) for about six years and continuously predicting a crash that has yet to happen. For many people that sort of prediction record might be cause for some reflection about their analytical framework. Aside from general wrongness there is the humorous tendency to interpret every story as implying a Vic RE crash.
Interest rates going up – prices are going to crash!
Interest rates holding steady – means economy is tanking – prices are going to crash!
Alberta economy strong – – everyone is going to move back there – prices are going to crash!
Alberta economy weak – no more rich Albertans coming here – prices are going to crash!
Trump says something stupid – prices are going to crash!
Trump says something smart (yeah right!) – prices are going to crash!
Sun rises in east – prices are going to crash!
There is no such thing as the mean in house prices. Even in the most sedate market, house prices are expected to track inflation which means they exponentially increase in nominal terms.
What a lot of people forget is that the first phase of the stress test rolled out in 2017. High ratio borrowers had to pass the test starting then.
Yes, cycles.
Victoria’s inflation-adjusted cycles from 1969 to 2018:
List of increases have been:
77%, 52%, 100%, 105%, 40%
List of corrections have been:
-5%, -13%, -42%, -12%, -10%
As anyone can see, the increases always clobber the decreases.
Could the downturn that we seem to be heading into be the mother of all downturns, the likes of which Victoria has never seen?
It could. But I doubt it.
Been interesting watching this board the last little while. For some time, you could easily see the change in tone from most of the posters that are typically “bullish”. They were sounding a bit more open to the idea that a downturn is coming, or at least had stopped declaring that this lull is just a brief wait to the next, massive leg up in the market. It was refreshing, and entirely fair to do.
Now it seems as though it’s gone back the other direction, some even openly mocking the idea that anything of significance could happen to this market. Perhaps some of it is just a tit-for-tat response to Hawk’s style of posting, but really I don’t think there’s much basis for a turnaround in sentiment, or to disregard what is becoming plainly obvious.
“Ya, ya, you have nothing until and if the prices ever change.”
Well no, that’s not true. RE markets work in cycles, and each correction moves through pretty well defined stages. Price movement, especially substantial price movement, is one of the last stages of the correction. I’m not going to guess how much a correction could be here, but to giggle it off as well as disregard what is becoming a broader global downturn in RE is just plain ignorant.
Let’s pretend there will be a crash like what “the graph” shows. What is % price drop for SFH’s to reach the mean?
Thanks Josh, the Greed, Delusion, and New Paradigm phases are now long gone. Only the “I’m such a fricking idiot” phase is left before the real kick in the cajones. 😉
As of 2 years ago we were neck and neck with Australia. Bubble deniers need group therapy. 😉
Boy, both graphs match pretty closely, except for the part on the real-life graph where prices have yet to crater. Should happen soon, though—right, bears?
“4 out of 10 Aussies can’t get refinanced
Dear god! The implications of this for Victoria, B.C., real estate cannot be overstated.”
Maybe hawk thinks our Victoria is in Australia.
The run-ups in Cordova Bay were pretty steep given location and the slide down is not unexpected. As for which areas are better, location is always debatable and depends on one’s priorities at that point in their life.
But that’s not what I said. Sure metro population will increase. But will metro population increase more simply because Langford allows a greater increase in housing stock? No. Which means more supply meeting a given demand.
Some people think newer is always better. Some people are oblivious to the fact that land represents about 80% of a property’s value in Victoria. And some people buy brand new cars mainly because of the killer five-year warranty.
I’ll let the reader draw the overlaps on that Venn diagram.
Because supply, in this case, is apples and oranges.
Oh boy, the graph is back. The really important-looking graph with lots of words on it and a big red line going down.
Our friend seems to be pulling it out with more frequency of late. Maybe the fact that all those slashes haven’t amounted to much is starting to make someone a little nervous.
Dear god! The implications of this for Victoria, B.C., real estate cannot be overstated.
Hawks dream come true:
https://betterdwelling.com/toronto-real-estate-prices-literally-look-like-the-textbook-chart-for-asset-bubble/
Broadmead and Cordova Bay are really sliding [prices] down. It is quite noticeable. I think these are better areas than the Western Communities of Colwood and Langford. But you are a ways from decent shopping / entertainment.
The jobs numbers are not quite as bad as the headline indicates. We still added a little over 40,000 full-time jobs. One would not expect big job numbers when the unemployment rate is only 5.9% – we are at capacity – employers can’t find skilled workers. Wilkins said the BOC Board debated about removing the word “gradual” [rate tightening]. The yield curve is flat to almost inverted [it is actually flat]. This all tells you one thing. Incomes (wages) are not rising inline with long term averages, though.
The data from Vancouver is very scary indeed. The stress tests, foreign buyer’s tax, spec tax, money-laundering crack down, fentanyl crack-down, ….. It is all taking its toll. Leo says the market has been cooling for 18 months – likely true because the stress test pushed forward purchases for 2017 which skewed the data. The big run up in Victoria was mid-2015 through to early-2017. It was unsustainable. Wages are not rising and can’t provide a foundation for these high-prices. No one is predicting a crash, not that I have read here, though someone keeps attributing that word to others. We are in a correcting phase in Victoria. I define a “crash” as 20 to 30%. I do not see that happening here in Victoria, but do see the risk of that in Greater Vancouver.
Some don’t even see softening in price here in Victoria. To each their own. With eyes wide open, it makes sense to move to the sideline until the spring, unless you find that dream home and you can afford it. If I were a buyer, I would rent and save – as an example [probabilities favour this], a 10% drop in price, plus a larger down payment, should outstrip a 50 to 75 basis point increase in mortgage financing such that you will pay off the mortgage years and years sooner, savings thousands and thousands in the process. Just do the math.
Not to interrupt another fine moment on this blog but… one of our favorite properties on the market (1630 Pear) has 2 listings – 399271 and 398181. Is this normal? Someone get sloppy? Just curious.
Its back. The crash graph. The graph is never wrong except since Hawk has been posting it.
The bubble top blow off has only been evident the last 3 years. The hot Asian money flow has been cut off at it’s knees. Global real estate is beginning to show major pain. 4 out of 10 Aussies can’t get refinanced, filthy rich real estate tanking while the stress tests/higher rates kills the bottom half. Yep, just a stopped clock.
Note: You’re in the DENIAL stage.
ANATOMY OF A BUBBLE
https://228main.com/2015/11/23/anatomy-of-a-bubble/
?w=620&h=471
so says the stopped clock
An assumption I am quite comfortable with.
The Gollum’s posting obsessively on here are clearly scared shitless right now as Vancouver’s major slashings shift over here. Watching markets blow up are fascinating, historical and beneficial to thousands. I like being on the right part of history. 😉
Ownership rate shrinks for the first time in nearly half a century
https://www.mortgagebrokernews.ca/news/ownership-rate-shrinks-for-the-first-time-in-nearly-half-a-century-247622.aspx
Stress tests derailing most would-be home owners’ dreams – study
https://www.mortgagebrokernews.ca/news/stress-tests-derailing-most-wouldbe-home-owners-dreams–study-247247.aspx
You’re not looking at other factors being equal, i.e. you’re assuming a growth in metro population, which results in higher demand for housing, results from the growth in housing stock in itself. For a given population, will a growth of housing stock in Langford support higher prices in Saanich (or anywhere else)? No.
How can you possible give anyone crap about calling the state of the market wrong when you believe this.
Life as a renter can have many lifestyle benefits. Spending your spare hours posting slashes and googling real estate doom stories negates those benefits.
The owner received the forfeited down payment which makes me think there is a possibility she may have to pay that commission. Interesting case.
Leif said:
“GTA real estate broker demands commission even after failed house sale”
This sounds like a recurring real estate agent scam. Get a listing from an unsuspecting female who isn’t real estate savvy, get your secret scam partner to make an offer with a long closing date in the hope that house prices rapidly inflate before closing, down payment is equal to anticipated real estate commission, if prices go up substantially before closing then complete the deal but if prices are flat or decline then back out of deal and forfeit the down payment, real estate agent then claims a commission is owed, which is equal to the forfeited down payment. Result is real estate agent and ‘buyer’ have lost nothing, risked nothing, but potentially could have huge profits if prices escalates. Seller is scammed and pays scammers via commission.
It’s a scam and the courts have dealt with these scammers before, so hopefully the judge throws the book (a big heavy copy of Blacks Law Dictionary) right into the scammers face, with costs to the woman.
Yep Ontario lost 80k jobs and Victoria unemployment surged from 4.2 to 4.3. Yep I see the logic Hawk. Victoria housing market is going to crash.
“UP down whatever” ? ? LOL Sure dude, you can’t even handle the median dropping $10K without a freakout.
Broadmead taking some hits. 4691 Scottswood Pl slashed $70K to $849K.
Lol Hawk
All is fine because my real estate is not some spec tool. UP down whatever in 20 years it will be worth much more.
Just keep posting angry old man denials gwac , click those slippers together and all will be fine.
Canada loses 51,600 jobs, led by Ontario’s biggest drop in almost a decade
Ontario lost 80,100 jobs in August, all part-time, the biggest decline since 2009
<
blockquote>
live “paycheque to paycheque” but only because every dollar that’s not used for basics is put into TFSA and RRSP and finally extra mortgage payments on my properties. So I would have answered yes to that question. Now two thousand bucks has to be fake. No one could possibly struggle to come up with that in an hour.
For a so called educated one you don’t have much common sense of the real world. There are multiple surveys out on BC’ers struggling without paying a nickel even into a simple savings account. Only a total dummy would not see that.
Ya Hawk
The Tim’s job interview went horrible. No second job, Prospects are bleak. Not sure what to do. All I know is I have you as a friend to get me through being a bag holder.
LeoM,
Yes, gwac does appear to be losing it. Must be the stress of the bad job numbers and other indicators the bubble is showing major cracks. Bubble deniers unite ! 😉
“@SteveSaretsky
Canadian housing rolling over, auto sales have declined for 6 straight months, 51k jobs lost in August, credit contracting, and yield curve nearly inverted. #bullish”
I actually agree with this. Think of it on a longer time scale. Oak bay in the 60s was just a nice area in a small city. Still better than average but to pick a number out of thin air, 10% of residents could live there. Now, Oak bay is exactly the same as far as physical characteristics go, but it is more desirable in the region because now the city is much bigger and (another thin air number) only 5% of residents can live there. And of the 95% of other places you could live, the majority are less desirable because they are further away, or don’t have the character, etc.
Or look at Colwood. Once considered the dumpy outer fringe, now that there are tens of thousands of people living further out prices have been driven up.
Thanks makes sense
Yeah, two houses we were making offers on, one with no subjects and this one with just an inspection.
On the bright side, dream house was relisted today for 100k less (need a half dozen more) and an almost possible house dropped in price 70k. Maybe someone who wants my dream house has our good house ready to list because I don’t think the super-crash is coming.
Economics at work.
I think Victhunter meant their offer was subject to financing.
Victhunter
Sorry about that
Can you explain the cash thing. If you offered the same what does cash vs borrowed funds make any difference.
Well back to the topic of the blog. Lost out on a house in Gordon Head we offered full price for yesterday, listed for well over assessment, as if that matters. Difference maker was we needed another $900k in cash in addition to the massive downpayment, the buyer only had subject to inspection from my understanding.
1 Lesson learned if the sellers agent wants you to keep your offer open while they negotiate with the first bidder don’t, take the chance that it will expire or the seller will take your offer.
New carpets going in our place this week.
If anyone is seriously shopping for a home, trading up or selling, I’d invite them to join and post on the new facebook group I’ve set up. Facebook Marketplace has a few homes listed as well, if people want an MLS alternative.
https://www.facebook.com/groups/1712489382202939/
Another great article on Better Dwelling today. Great use of “The Chart”.
https://betterdwelling.com
More supply in Langford would support higher prices in Saanich? One for the bubble peak Hall of Fame.
Do you really want a newer house? The houses seem to be made out of cardboard these days, and will not last. You can find older places with solid wood construction, among other perks.
I’m not an expert though, curious what others think.
+1
Many smart people are not very wise.
GTA real estate broker demands commission even after failed house sale
https://globalnews.ca/news/4431658/real-estate-broker-demands-commission-gta/
I agree, Patrick.
Many smart people seem to think that “something must be done!” This always rings of “think of the children!” It is the siren call of: “Don’t think of the real consequences of this change, because it sounds good in my head.”
Real change takes time. The NDP empty house tax is going to take several years to digest, let alone the effects of any of the other proposed solutions. Every well-engineered system needs a feedback loop to tell you if it is actually working. Ramming change through to please voters is never a good idea, regardless of which side of the aisle it comes from.
With respect to real estate markets (and markets in general), even our probabilities tend to suck.
That’s because markets are unknowable, in part because information is always incomplete.
Truly bizarre..
Interesting article on that here: https://www.theglobeandmail.com/globe-investor/globe-wealth/eroding-family-fortunes-how-the-cycle-can-be-broken/article33757468/
“The wealth attrition rate is surprisingly high. It affects 90 per cent of family fortunes, according to one study from the United States. In some cases, the money itself disappears, and in others it’s the family business that’s lost.”
Yeah quite a lot of money coming in from exchange students in high school. Cousin from the homeland is here for the semester, and she said she’s one of 100 exchange students out of 1200 total students in the collection of schools. Also as you say a way to rent out without doing STVR, of course you can’t apply that income when qualifying for a mortgage.
Sure now you built your house you can have an entire room just dedicated to avocado toast…
Luxury Buyers:
The next 12 months will offer some pretty nice opportunities. Leo mentioned sales in 2015-2018 are about the same, but inventory has increased 2-4 fold. Nice/newer house in Uplands sold at $600K off assessed.
This listing would be interesting to see where it ends up selling, ready to move in/great condition house in Uplands close to Willows beach.
https://www.rew.ca/properties/397300/2805-beach-drive-oak-bay-bc
ASSESSED $3,279,000
LISTED $3,375,000
MY GUESS @SELLING PRICE: $2,500,000 or 22% of Assessed
If you are looking @ land, I think you can get even a greater discount because of the difficulty in financing.
The only reason to pay top dollar in this market is not because of land but for the NEWNESS of the house. Construction costs are so high and trades are so delayed that if you want something newer, you literally could be waiting years before you have the home the way you want it!
True but very misleading. Market has been slowing for over 18 months with the odd blip due to sales being pulled forward from stress test.
GWAC/Leo make some good points. Listings are down and MOIs are still low versus historic averages. However, they are trending up month over month.
People who have dabbled in RE for many years or assets of value LOVE it when the market goes down. Why? Because they can buy more and wait another X years for the next up cycle. So for buyers waiting on the sideline, as prices go down, the number of buyers go up. More people are qualified to buy and investors, yes investors, will look at a low entry point.
Moral of the story, it is impossible to market time buying. But you can have a number you are comfortable with and start throwing darts against the board to see what sticks. Why wait for a 20% correction when you can offer 20% off their list price. Your realtor might be pissed to writing up offers, but that is it.
Introvert: “You obviously don’t have a good sense of where my floor is”
<<<<<<<<<<<<
lololololol there you go. Much better.
"In point of fact, no one knows precisely and with absolute certainty what drove this market up."
<<<<<<<<<<<<<
… or in point of fact, no one knows precisely and with absolute certainty that tomorrow will come but the odds are that it will happen. Precisely and absolutely are weasel words to get around probability.
Median sale price for single family homes slowly dropping compared to assessment. Median 9% over assessment compared to ~13% for most of the year. Hard to tell if this is because prices are dropping or if it’s because the places that are left over are in overall worse condition.
“Forget trying to make the city we have work better for its inhabitants—instead let’s measure success primarily by how many meatbags we can stuff into this place.”
—Langford, basically
But it could work out well, because as Langford grows so too will the pool of people striving to possibly “move up” to a house in Saanich, which will keep Saanich properties in demand and prices here relatively high.
You obviously don’t have a good sense of where my floor is.
In point of fact, no one knows precisely and with absolute certainty what drove this market up.
Thus improving quality of life for its residents???
Introvert: *Garbage take of the day right here.
Most people in general, including most FOMO buyers, don’t treat their primary residence as a stock, to be bought and sold at the first whiff of potential trouble.*
<<<<<<<<<<<<<<<
Introvert, I often enjoy your responses but this one is beneath you. You are taking a chapter out of Marko's book and deflecting the context right out of the message.
Renter in Paradise was commenting on Leo M.'s post on speculators. That has nothing to do with your average buyer.
The speculators drove this market up and will most likely drive this market down.
Garbage take of the day right here.
Most people in general, including most FOMO buyers, don’t treat their primary residence as a stock, to be bought and sold at the first whiff of potential trouble.
Hawk treats houses this way. And look how it turned out for him: he spends his free time checking for slashes and googling market meltdown articles.
I live “paycheque to paycheque” but only because every dollar that’s not used for basics is put into TFSA and RRSP and finally extra mortgage payments on my properties. So I would have answered yes to that question.
Now two thousand bucks has to be fake. No one could possibly struggle to come up with that in an hour.
LeoM.
Lol. Keep dreaming for that panic / crash. It’s all just fantasy.
Facts and real numbers do not support it. All wishful thinking. Price near high. Sales numbers are average for 10 years. Housing available are low. Facts. Not your fantasy.
Gwac sounds like she’s going into panic mode, I think you’re getting to her Hawk… ‘No, it’s not happening, it’s not happening, it’s really not happening…’ someone should re-post that delayed decline due to momentum graph again to remind her that it probably really is happening.
FONGO (fear of not getting out) – as powerful an emotion as FOMO was on the way up.
Probably as a 33% increase in the number of properties for sale year over year.
As has everyone on this blog, no one called a massive upturn in 2013, nor was anyone buying a bunch of property then. The only one that has made a bunch of money on this is Marko, because he’s selling it.
2500 homes for sale. At 5k the market barely went down. All this BS is just that. There is no panic to sell homes. No crashing at the HPI levels. Just HHV posters dreaming. Day after day more BS articals. As we head down to 2k homes for sale by the end of the year. How are you guys going to frame that.
You want a pile of shit I am sure those will be bargains in the coming year.
Hawk just say this and give up.
“I have been wrong for years and just talk shit”
I just looked up those properties all being dumped en masses by the investor (speculator).
”Property must be purchased with the following properties, for a total of $10 Million:
867 Humboldt Street (MLS#399221),
1140 Arthur Currie Lane (MLS#399219),
4367 Torquay Drive (MLS#399225)
4357 Torquay Drive (MLS#399223)
1151 Oxford St (MLS#399222).”
Looks to be an example of a situation I mentioned a few months ago where ‘investors’ start to panic when they watch their paper profit ‘equity’ start evaporating. This happens whenever the market turns south, and this is just the beginning. This speculator is unlikely to get $10 Million, so the price will slowly decline and that will scare other speculators into panic mode. Lots more like this to come in the next 18 to 24 months.
For the guy who keeps yapping about “it will only be 5 to 10% drop” to cover his ass , that 10% would put many into all their equity lost or negative equity for others who rolled the dice through a private lender.
There are piles of slashes in that range right now and more selling near/at/or below assessment. Every avalanche starts with a small snowball.
Education by reading current articles on markets is a bitch eh?
It’s better to rent than to buy in today’s housing market
“Now, the tide has turned.
And it’s not just cheaper to rent, it may also now be a better investment. Renting and reinvesting the savings from renting, on average, will outperform owning and building home equity, in terms of wealth creation, according to new research from Florida Atlantic University and Florida International University faculty. That is the first time renting outperforms buying since 2010.”
https://www.cnbc.com/2018/09/05/its-better-to-rent-than-to-buy-in-todays-housing-market.html
That’s funny, I see another 27 more slashes the past 24 hours in prime hoods as well as ground zero Golden Head. Those who need to sell dictate the price downward and it’s evident many sellers need to. Must be all those collapsing deals due to financing we keep hearing about.
whisky point
“Seller willing to consider cryptocurrency for sale”
Is that a thing?
Oh, right, out of area, Doh!
We get it Jerry, you’re rich. Run for president already so that you can refuse to show us your tax returns.
It wasn’t even my idea, just refuting their point.
That’s outside of the CRD (in the CVRD) so tax doesn’t apply there. “30 minutes to Victoria” is a joke. More like 30 minutes to Langford…on a good day
“Only if they are living in the penthouse, in which case they should be taxed more”
The search for Kulaks resumes.
615 Moss now under a million after a 2.8% drop. Just need another half dozen or so of these minuscule price drops and then it’s easily in my budget.
Asking $995,000
Originally $1,024,000
Assessed $1,069,000
whisky point
4.4m
https://remax-camosun-victoria-bc.com/property/ml-mill-bay-whiskey-point-rd-victoria-real-estate-mls-375920/
out of the area i’m guessing.
Firstly, most teachers make more than 60k in the this province. Secondly, how many times do you people with that kind of income disparity living in the same building? Only if they are living in the penthouse, in which case they should be taxed more. People in mansions who make their money from investments that are taxed at a much lower rate would end up paying the lions share, which they should already do.
MLS 375920 “Nature’s paradise. South facing oceanfront on Whiskey Point. 30 minutes from Victoria, BC. Property EXEMPT from BC Speculation Tax & the additional 20% PTT…”
How does the exemption work?
I enjoy lots of extras. It’s the perspective of these extras the skews the objective.
And that’s ok. Housing markets have crashed even when the seller pool dries up. It’s those who have to sell that are the ones who suffer the most in a downturn.
Financial literacy is one thing, but making more money is the only way to get some things in life. You can be the the most financially savvy person, but no way are you buying a home, paying for your kids education or funding your retirement without enough money coming in. Besides, what fun is life if you cannot also enjoy the extras.
I know a couple of families who are struggling financially. They have very few extraneous expenses other than basic living costs. In both cases there is one spouse whose work is limited by health issues and nobody has a college education. This severely limits the options for getting ahead. Coincidentally perhaps, both families rent. I don’t know anyone who owns that is struggling financially. Perhaps they are better at hiding it with extra resources like Heloc’s available to weather bad times.
So does the value of my mortgage principal, then.
It’s difficult to tease out how much of this is due to financial recklessness and how much is due to being poor.
So is the seller pool.
Good point, as usual, Josh.
OK, I will admit that I don’t get minimum (I still make well below 45k a year). But I could definitely live off less (And I do with less than 25K per year for two family house, easy).
I never thought that people are poor because they are financially illiterate?!?
I said it’s a start to the solution!
Spoken like someone who earns much more than minimum wage.
Financial literacy is a major problem that we need to remedy as a nation, but the assumption that poor people are poor because they’re financially illiterate is also troublesome and often wrong.
Wooooow, let’s see more of these. They make me happy. I can’t see any sensible explanation for that other than they’re in big trouble right now. Like bankruptcy trouble.
))) Leo: I’m ok with shifting taxes towards unproductive assets and away from income
== == ==
So the idea here is that we reduce or eliminate provincial income tax, and make up for it by increased property taxes?
Good grief.
That would replace a finely tuned progressive income tax, (where rich pay more than poor), with a much flatter tax that would affect both owners and renters.
For example, consider two identical rental units in the same building. One is rented to a teacher making $60k, the other to a lawyer making $150k.
Currently the teacher pays much less income tax than the lawyer. Shift that to property tax, and both tenants will see their rents go up to cover the landlords increased property tax. And both tenants rents go up the same, so we now have the teacher and lawyer paying the same taxes (indirectly, through their rent increases).
Put another way, rewording your statement it would sound like you’re also OK with this too…. “I’m OK with shifting taxes towards owners (or renters) and away from income”.
Do you somehow think that an asset tax on property is a progressive tax, or are you OK with moving away from progressive taxation?
Victoria just another article with this and that and than you add a bunch of assumptions to jump to a large decline is coming here to Victoria. Great just a lot of BS until it happens.
Just as plausible and more likely is a small decline in the HPI and a pause.
Keep up the articles and attach your crash theory to it. Been done a thousand times on here by others.
NDP’s Eby clarifies the NDP’s housing measures:
https://vancouversun.com/opinion/columnists/douglas-todd-attorney-general-targets-foreign-capital-to-ease-housing-crunch
The impact of the 30 point policy is being felt and the data is proving it in BC. This includes Victoria as well as Vancouver. Sales are down significantly [see the CTV report re Victoria]. Before gwac attacks and points to “Fantasy Island”, keep in mind that one should not put the cart before the horse. Falling sales are what one sees before prices fall. It is the lack of sales [demand side softness] that sellers must face and address. The lead stories are that sellers are resisting the new reality (then be happy owning it). BNN had a good segment this morning where Steve Saretsky was one of the interviewees, along with a few other realtors, who said sellers are facing a new market and that the peak in prices occurred many months ago. Before you say, “hey wait, Victoria is not Vancouver”, take a good look at the drop in sales over the past few months in Victoria. Further, look at the multitude of seller ask price cuts right here in Victoria, BC. Coincidence, you say? Fantasy? A mirage? Tsk, tsk………………..
It is happening. It started 1 year ago.
AKA denial, like Victoria sellers. If half of BC lives paycheque to paycheque and can’t raise $2000 or be in dire straits, then who the hell is going to buy your over priced shack ? The buyer pool is drying up fast.
Addendum to my last post on that bundled set of properties – the listing says for a mere $10 million, you too could have a turnkey investment. I looked at all of the listings and these are pie-in-the-sky asks. Will be interesting to watch.
Right, because the parents were not shown the way. Might as well still teach it and maybe one child will see the way. Or better yet, the child could show a parent/s some interesting ways to make them better at it.
” Fu Bu Guo San Dai ” ( 富不过三代) = Wealth does not pass three generations!
Here’s an odd listing I just saw: MLS 399225
I’ve seen the “must be purchased with” before but that’s always been with adjoining properties. None of these are side-by-side properties. An investor who’s giving up? Someone concerned about spec tax? Interesting and odd because I would think that bundling these properties would decrease the number of possible purchasers. Should probably sell individually.
Sellers in Vancouver not willing to face the reality of lower home prices yet
https://bc.ctvnews.ca/video?clipId=1479870
“We really should have financial education in our public schools!”
I volunteer in Junior Achievement and cover many of these topics in school. Unfortunately studies have shown that no matter what is taught in school, how a persons parents handle money, investing ect. will have the biggest impact on how they handle money.
Not if they were financially educated (I still say education is much greater, and needed). They’d know that easy credit is a problem for them.
We have a credit card only for the cash back rewards from points. We only buy things we would normally buy if we had the cash in hand. Pay the Credit bill right away and accumulate a ton of points.
If it wasn’t for the point rewards, I would not dream of owning a Credit Card.
We really should have financial education in our public schools!
Access to credit by people who should not have it is the real problem My dog got a credit application for a credit card. More shit does not = more happiness.
I hate this. It really isn’t that hard to have a good life and live within your means.
More money is “NOT!” the solution. Being more financially literate is the start to the solution.
@Jaleek also from experience if you don’t mind homestay or adult students, I would say buy in the best area that you can afford with at least one extra bedroom, preferably an extra bath as well. For about 1/2 of the last 11 years of home ownership I had a student renting, a room and their own bath at premium paying half the mortgage. If there is a shared kitchen they are not entitled to residential tenancy act so you can do up a room rental agreement with strict rules that can ask them to vacate within 30 days with notice or even quicker if they break the provisions of the agreement (check with a lawyer to see if any legal agreement is binding, don’t take my advice). This allows you to afford the house you want, without having to pay the premium for a suite but also take backspace when needed or remove a difficult tenant without a headache.
BNN discusses the population’s mountain of debt:
https://www.bnnbloomberg.ca/canadians-feeling-weight-of-debt-despite-better-financial-position-study-1.1132884
Living pay-cheque to pay-cheque, and struggling – missing a pay-cheque would be devastating. look at how many could not come up with $2,000 [or have great difficulty] for an emergency. As interest rates rise, the problem worsens.
One more difficult flip 3920 Cadboro Bay, one price drop 48 days on market so far Price Original$1,395,000 Price List$1,360,000 Sales history 14-Sep-2017 $935,000.
The BoC has a legal mandate to track core inflation, which excludes volatile commodities like fuel. Both measures of CPI are produced by Stats Can, not the BoC itself.
They got them wrong so the pink toilet is in the avocado room….
Thanks Victhunter
Tell everyone house hunting and cheese shopping inflation has been only 2%… I suppose you tell them to buy cars instead. Just go by the rule of ten. Money loses half it’s value every ten years. That’s the grim reality….
@Jaleek I don’t think that is an unreasonable offer. Polo is advertising 599 on facebook so they are obviously willing to sell some lots cheaper with lower end finishing. 30% sold is not a good thing so they should be willing to bargain.
Might have my house coming on the market in the next couple days, closer to the core, newish.
@guest_48567
CPI is definitely out of whack. But the BOC thinks that the CPI over estimates inflation! In a recent article Poloz said that he’s not worried about inflation because although the CPI is at 3% his “core inflation” is more like 2%.
I’m definitely feeling the pressure in the labour market. We used to hired for low end positions around $14. Can’t hire for less than $17 now.
The news about people living paycheque to paycheque seems a bit ironic when the official inflation rate has been under 2% for years and recently it’s just a bit higher. The official inflation rate is pure bullshit; it doesn’t accurately reflect the inflation on the true “cost of living”. Someone in Ottawa needs to do something about this misleading statistic; it’s a worse statistic than the misleading DOM that the local real estate association publishes, and misleading statistics are useless. I suppose this is why FAKE NEWS is such a big concern these days, everyone is doing it.
Link to the video from previous post.
https://vancouverisland.ctvnews.ca/mobile/video?clipId=1479872
Interesting watching CTV tonite showing Victorians struggling to keep their heads above water. Reading this blog you would think everyone’s a $100K plusser. The debt bomb is real and its here now.
Half of B.C. workers living paycheque to paycheque, survey finds
https://bc.ctvnews.ca/mobile/half-of-b-c-workers-living-paycheque-to-paycheque-survey-finds-1.4080919
That fridge at Pear St is a major screw up. It’s unsightly, sticks out well past the door frame and would be awkward to use. Willing to bet it’s not on it’s own electrical circuit like it’s supposed to be.
What do you think the likelihood pod offering 50 or 75k less at either eagle Hurst or Polo village would have a shot at being accepted?
Is one development better than another?
I am willing to wait and I know new builds are less likely to accept lower offers unless they are hurting for cash – but I want to pull the trigger too and move on
I am here fot the duration, not into specation but I have seen houses in Victoria lower their price but in Essence every house I like needs to be lower by 100k and a lot just sit there waiting – feel like just going to some of these houses within 4k of downtown and offer 100k less and see what happens
Or of course just wait
Wow.
I can’t actually remember what the number was, but isn’t he the guy saying that there will be basically a 700% increase in prices because interest rates are going up?
845k
Great post on The Greater Fool today. Victoria gets a really special mention. And some realtors are beginning to use my word to describe the housing market in T-Dot…”bloodbath”
1630 Pear St. interesting how they can squeeze 2 kitchens, 6 bedrooms 3 baths into 2000sq feet without making it open concept. #realtorlibertiesBS
GWAC or HAWK, you boys willing to make a bet on the selling price or date for Pear? Bet each other at least 1$ so you guys can get together and share a pop somewhere.
Hope the home we are going to look at tonight is a little better than that one.
AZ
Not an expert on Vancouver realestate. All in know Mike is pretty good at the charts since he has been on here.
Hawk the phones have been quiet. :(. I have been looking for a second jobs at Tim’s. Got an interview tonight. Wish me luck.
Funny, I was just looking at the listing for that property. I totally missed the fridge in the dining room but did notice that they did a lousy job with the kitchen cabinetry. Add in the Costco cheap flooring in the dining/living room and VOILA! surely everyone wants it now.
My pet peeve: refusing to deal with poor kitchen layout and modern appliances. If they had bothered to look at the footprint of the kitchen / dining room, the fridge could have been properly dealt with.
@guest_48535
So are you in agreement with Micheal that we still have 3.5 years of price increases in Vancouver to go prior to the next downturn?
Flip of the month:
1630 Pear St
Purchased:30-Nov-2017 $780,000
Asking : $979,999
Good: Added a suite, New kitchen cabinets, Washroom cabinets
Bad: Looks worse IMO after the reno, than before.
Fridge in the dinning room (it was in the kitchen pre-reno)
Particle board semi enclosed space under the deck, I assume for the tenants “outdoor space”.
The wealth effect is wearing thin. Those 2% wage increases are barely paying the back to school costs. Consumer spending down jives with this survey that debt is the elephant in the room that is going to kill any fantasy house price rises.
gwac needs a holiday, the phones in the office must be dead or disconnected. Maybe a second job would help with his stress.
Canadians feeling weight of debt, despite better financial position: Study
“Many Canadians are feeling the debt crunch, despite two-thirds of the country being in a better financial position than previous years, according to a new study released Wednesday.
The Canadian Payroll Association found that 66 per cent of Canadians surveyed said they are in a better financial position than they were one year ago, according to the study. However, 40 per cent of respondents said they feel overwhelmed by their current debt levels, the study found.
“We would have hoped to see in the survey results that Canadians would do more to alleviate their debt and take control of their financial situation in strong economic times,” said Peter Tzanetakis, president of the Canadian Payroll Association, in a release.”
https://www.bnnbloomberg.ca/canadians-feeling-weight-of-debt-despite-better-financial-position-study-1.1132884
Hawk your back from your nap and feeding the pigeons downtown or maybe kicking the pigeons,
Any slashes since you were gone.
Mike you might want to update your fantasy chart. Prices are down in Van.
gwac getting his nuts in a knot again. Vic prices flat last 3 months and not going up as slashes stack up.
The party hasn’t even started yet, save your spastic denial for a few more months. The Asians have left, and stress tests are killing deals. Winter is coming for Game of Homes. 😉
Metro Vancouver home prices edge lower for 2 straight months
https://www.bnnbloomberg.ca/metro-vancouver-home-prices-edge-lower-for-2-straight-months-1.1133329
AZ
He`s been right….So if LMAO makes the pain go away. Go for it…
@Micheal
I love your confidence while I LMAO at your posts.
That very well could be. But I’d personally avoid any home on Tyndall.
You may consider Tyndall mild, but I consider it fairly busy, at least by Gordon Head standards.
The busiest roads in Gordon Head that I would attempt to avoid buying on, in no particular order, are:
• Shelbourne St
• McKenzie Ave
• Feltham Rd
• Tyndall Ave
• Gordon Head Rd/Ferndale/Grandview/Ash
• Cedar Hill Rd
• Mt Doug Cross Rd
797 Rogers looks great. Between that not selling and a big drop for 638 Simcoe, it’s exciting times for SFHs. Even if the drops are only happening outside my budget.
Slight bounce for Vancouver last month (up $13,051 from July).
Now halfway through the 7-year uptrend.
“Tyndall is one of the busiest roads in Gordon Head. Not ideal.”
Ferndale or Feltham is what I would call a busy road. Tyndall is pretty mild and traffic is not an issue. That home on Tyndall is not selling because the listing price is stuck at 2017 prices and 1970s looks. I think if many of the sellers in that area do not quickly adjust prices to the current market they will see even larger losses as prices continue downward
Local spin 2500 all you want. That is historically low. Get back to me at 6000 and maybe I will join HHV fantasy land.
In the mean time all, keep those crash articles coming.
The top end of the market in Vancouver is crumbling. As inventory keeps building and the high end continues to sink it is only a matter of time before it noticeably hits the lower end.
“But some real estate insiders in B.C. say there are segments of the market where things are considerably worse than the real estate board’s data suggest.
In West Vancouver, detached house prices are down 30 per cent over the past year, to $2.5 million from a median of $3.6 million.
The seeming collapse in house prices at the top end of the market could be the “canary in the coalmine” warning of a broader correction, realtor Stuart Bonner told the Vancouver Sun earlier this month.
“Vancouver will never be affordable, but it will drop 25 per cent or more,” the Sun quoted Watt as saying.
Things are likely to get worse before they get any better. A key measure of the health of a housing market — the sales-to-active-listings ratio — indicates that Vancouver’s detached home market is now a “buyer’s market,” with fewer than 10 sales for every 100 active listings.
The townhouse and condo segments are headed there as well. There were fewer than 27 condo sales for every 100 condos listed in August, down from around 57 sales per 100 active listings at the start of the year. That represents a rapid slowdown in the condo market.”
https://www.huffingtonpost.ca/2018/09/05/vancouver-real-estate-correction_a_23518030/
Indeed, and I would further add an increasing population of sellers are in fantasy land, too.
Tyndall is one of the busiest roads in Gordon Head. Not ideal.
Nope you are right Victoria born simple stuff does not show a decline in prices does not show 5000 properties for sale which while there did not even decline the market. We need to get real complicated and pull stuff from everywhere to predict this coming crash. Whole lot of BS. We are where we are not some HHV buyer fantasy land.
You guys have come and gone over 9 years as we have gone through the cycles. Always wrong always pulling this and that to justify a crash and than disappearing into the land of buying.
I know its different this time. Its 1981…
Vancouver Sun reports sales drop in Victoria for 9 straight months:
https://vancouversun.com/business/real-estate/number-of-homes-sold-falls-for-ninth-straight-month-in-greater-victoria
As for the rest below [it is just not that simple]: if you are saving while RE prices fall and mortgage rates rise, you are ahead of the game because your down payment will be larger [more equity] which could translate in to smaller monthly mortgage payments. This is true if your rate of savings {which you will invest and earn passive income} outpaces the rate of increase in mortgage rates. So the simple gwac analysis below is not even close to being on point.
This assumes that you will need a mortgage. If not, you are far, far ahead by not buying in a falling market and saving.
I am not a realtor or in any form of the real-estate business.
I own real-estate and I am looking for more if I see a bargain in large lots.
I get 0 income from real-estate
As I have stated I expected HPI to fall 5 to 10% before the next run up. I expect multi million dollar homes to take a larger cut.
@guest_48535 Are you a realtor? Are using the HPI to advise clients on making offers and listing their houses?
Local got it. Calling my broker now going to sell all buy back at 2017 prices when they get there. Thanks
I like this speculating on the house thing looks like a smart thing to do. Do not want to be a bag holder. Got it from Hawk and this smart blog lady.
If we presume that a housing market works at the same speed as the stock market, then we could conclude now whether that worked out well.
Unfortunately, we can’t do this. Housing markets move on the order of years – it’s taken over 2 and a half years just to get to this point where people are really starting to notice the change.
All those Hawk price slashes are finally showing up. HPI down 400 dollars on a SFH and 4700 on a condo, month over month.
Good thing people waited and did not buy last year. Worked out well. Mortgages rates up and prices up. Hawk you are a genius. Those slashes have saved so much $$. But don’t worry the crash is coming. 1981…
The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in August 2017 was $830,800, while the benchmark value for the same home in August 2018 increased by 6.9 per cent to $888,300, slightly lower than July’s value of $888,700. The MLS® HPI benchmark value for a condominium in the Victoria Core area in August 2017 was $453,900, while the benchmark value for the same condominium in August 2018 increased by 10.8 per cent to $503,000, slightly lower than July’s value of $507,700.
Elaine: I had the same thought that if rental properties will not support this than you are expecting the strata to subsidize this scheme. I suspect that this is just another election promise to drum up voter support by renters. I suspect that the politicians already know the numbers dont work in most cases.
As LF points out, and as expected, the BOC stayed the course [no hike] in the face of the NAFTA negotiations. Given Woodward’s book, Trump needs to pivot attention – I am uneasy about a deal getting done – Trudeau rightly (first time for everything) says that Chapter 19 must stay and Trump wants access to dairy markets. Our auto sector hangs in the balance. Our trade surplus is now the widest with the US since 2008 – this will be fuel for the orange fool in crazy town.
A lot more price drops and more listings. September is said to be more of a seller’s month than August and then activity drops dramatically, they say, for the seasonal pattern. As Hawk points out, there is continued downward pressure in the big city:
VANCOUVER — The Real Estate Board of Greater Vancouver says prices for detached homes, townhouses and condos have fallen for two consecutive months in Metro Vancouver.
The board says the benchmark price for all types of properties is currently $1,083,400 — up 4.1 per cent compared to August 2017, but down 1.9 per cent since May 2018.
Detached home prices fell 2.8 per cent since May to $1,561,000, which is also down 3.1 per cent compared to the previous August.
Attached home prices fell 0.8 per cent to $846,100 since May, but rose 7.9 per cent compared to August 2017.
Condominium prices also dropped since May by 1.6 per cent to $695,500 — up 10.3 per cent from the same time last year.
REBGV president Phil Moore says in a statement that current buyers have more listings to choose from and face less competition in the area than in recent years.
He says they’ve also been less active in recent months — with 1,929 home sales in the region last month compared to 3,043 in August 2017 — and prices are beginning to edge down as a result.
Barrister, I had exactly the same questions when I read the TC article this morning. Either Bill Cleverley didn’t give us a full report, or the City planners haven’t thought through the implications.
Will the low rents cover the growth of the depreciation fund?
I also noted that the proposal isn’t intended for rental properties because “purpose-built rental simply can’t support that” – but somehow this will be expected of strata corporations.
I was just reading about the proposed affordable housing policy for new condos which is on the front page of the TC. I am really unclear how this is supposed to work. Lets assume that it is 15% of the units that are in the building that are low rentals.
1) Does the ownership of these units remain with the developer or do they just become the common property of the strata corp? I am guessing the later since the developer probably does not want to be in the rental business.
2) The developer has to get 15% additional zoning just to accommodate the units themselves, but on top of the 15% how much more zoning does he need for building these units.
3) Once the building is completed and sold is the strata going to be responsible for paying the property tax on these units (will the low rents actually cover property taxes and maintenance?). In a larger building will the strata council have to hire a management company.
4) Over the long run is it likely that the condo owners are going to end up effectively subsidizing the tenants as maintenance costs escalate faster than allowable rent increases.
5) Will these condos demand a lower selling price in the market and will this require a lot density to the developer to offset this factor.
I have to admit that my first instinct as a lawyer would be to really caution a client against purchasing into a condo that has 10% or 15% low income rentals. Stratas come with enough problems to start with without adding an extra layer of uncertainty.
I am not sure how the math works out for a developer but having 10% or 15% of the units you have to build being unmarketable is adding a lot to costs at a time when presales have slowed to a trickle as it stands.
I have to wonder if this is just a rather cynical election promise that will actually produce little if it is even acted upon.
Listings up huge , prices down again.
METRO VANCOUVER LISTINGS JUMPED 34.3% IN AUGUST MONTH-OVER-MONTH
Metro Vancouver home prices edge lower for 2 straight months
https://www.bnnbloomberg.ca/metro-vancouver-home-prices-edge-lower-for-2-straight-months-1.1133329#_gus&_gucid=&_gup=twitter&_gsc=O1nWAYK
@Jaleek it is under a million, their asking price “anchor” is not what it’s worth and if you are the only one willing to make an offer within 15% you’re are setting the bar on what it’s worth. 4003 Gerard Pl has gotten with the program and moved into the sub-million mark where most of the buyers will be. It should sell quick.
@guest_48522 Here I am getting quotes on replacing my carpet in a 11-year-old home and 4442 Tyndall Ave has original carpets and wallpaper from 1976, beautiful.
BoC holds steady at 1.5%.
797 Rogers Way previously sold April 2004 for 490k. On Halloween 2001 it sold for 155k.
797 Rogers way was bought in 2016 for 920k. If it sells for a million the owners will just about break even after transaction costs. I really wonder why BC assement does not provide a more full sales history since they actually have that information why not make it public?
I’m not only OK with it, that’s exactly the fix that’s needed. Ideally get rid of the provincial income tax and make up for it with higher property taxes – which is what you have in Texas for example. That would bring about the end of people currently paying little or no income tax and parking their wealth in RE. That kind of radical change is too much to hope for though.
I wish 797 Rogers was under a million
797 Rogers Way
High Quadra
$1,147,000 Assessed
MLS 395299
$1,190,000 Org Ask
$1,145,000 Price Reduced
41 DOM
Listing set to inactive…
What sucks for these sellers is about 7 houses down, a house that is extremely comparable in terms of rooms, lot size, sq ft size, and of course location just sold for 10% below assessed value. What buyer would now, armed with recent comparables, offer anything over $1 million for a similar house in that area?
Effectively, that one sale now set the new market price for similar hoods in that area unless I am missing something.
785 Rogers Way
High Quadra
$1,108,000 Assessed
MLS 395882
$1,100,097 Org Ask
$1,000,097 Sold Price (pending)
10% below assessed.
Mind you, those houses were selling for around $690ish just four years ago so the sellers i’m sure will do fine even if they are going 10% below assessed.
4442 Tyndall Ave
Gordon Head
$963,000 Assessed
Old MLS 395505
$993,000 Ask
27 DOM
Cancelled
New MLS 397514
$939,000 Ask
22 DOM… and counting
Next move?
How’s the pink and avocado wall looking?
I’m ok with shifting taxes towards unproductive assets and away from income (Yes I realize they aren’t cutting income taxes).
I’ll give you that calling it a school tax was very sneaky though.
If you can then wait to build. It’s not that they are busy, which they are, it’s that you need to suffer their attitude that they are doing you a favour working for you. I mean that literally. I had our painter say they were doing us a favour painting our house…. I told them I don’t need any favours. Ahhhhh that felt good.
Vancouver….bloodbath.
@Albertan
1/ next time you are in town, drive around the hood you want to live in
2/ look for knock-down bait and then
3/ go knock on their door and tell them you are interested in buying in the next 5 years
4/ you’ll likely get a great deal and the seller doesn’t need to suffer the cumbersome selling process
OR
If you see anything you like, knock off -20% the selling price and put in a lowball offer and see what sticks! That’s what I would do.
Good luck, you have the benefit of time on your side!
Tired of taxes and fees on your real estate investment? Invest in digital housing!
https://www.marketwatch.com/story/people-are-making-more-than-500-buying-property-that-doesnt-actually-exist-2018-09-04
@Leo S it won’t be so amusing when the NDP School Tax (General Revenue for everything including politicians salaries) isn’t indexed for inflation and everyone in Vancouver and Victoria pays it in the future. It’s an asset tax, wait until they tax people with a bank account with over 100k in it. #worstideayet.
Anyone know what’s up with 59 Moss? Listed below assessment, 82 DOM.
Also this is amusing.
https://mobile.twitter.com/TessaVikander/status/1036373361348104192/photo/1
Wonder how much of the equity in Point Grey is hard earned vs magically appeared?
VREB press release is decent: https://www.vreb.org/current-statistics
Just remember when they say “Listings have remained relatively static for months after an initial increase last spring. However, this plateau has included more high value inventory and similar to last month, fewer single family homes for sale under $750,000. “
They mean there are fewer new listings under $750,000, not less inventory (there is more as shown in the article above).
It’s pretty much been said, but a few things to consider:
Meanwhile the filthy rich continue to hack and slash as well. Poor Warren has to slash too. It’s the 80’s all over again. 😉
The $1 billion price cut: Luxury real estate gets slashed
The high-end real-estate market has seen steep price cuts in recent months as foreign buyers dry up andnew tax laws kick in.
The Ziff family estate in Manalapan Florida cut its price in May by $27 million, from $165 million to $138 million.
Even the Oracle of Omaha, Warren Buffett, has had to lower his asking price on his beach home in Laguna Beach.
https://www.cnbc.com/2018/08/31/the-1-billion-price-cut-luxury-real-estate-gets-slashed.html
JS
Oops. Hope you got a laugh from the comic though. 😀
The Bank of Canada is expected to hold borrowing costs steady Wednesday in what will probably be just a pause on its hiking path.
After FOUR increases since mid-2017, including at their last meeting in July, investors and economists anticipate policy makers will take a breather this week and leave the benchmark overnight interest rate at 1.5 per cent, before raising again as early as October.
After a prolonged period of sluggish growth, the economy is finally doing well enough that it no longer needs abnormally low interest rates — even in the face of all the uncertainty around trade. Governor Stephen Poloz’s job is to wean Canada off of easy money in a way that doesn’t inadvertently damage the expansion and to do that, he needs to decide on two things: How high do interest rates need to go, and how quickly should policy makers raise borrowing costs to get there?
The 2019 Spring selling season in these neck of the woods will be most interesting. Mortgage rates will be measurably higher, the spec tax will be here, the public registry of true owners of property will be up and running, and we should have prosecutions for tax evasion flowing.
@guest_48485 that toronto article was from august last year.
Victoria Born: Not nearly large enough to fall into the mansion category. But you might be right that the upper end of the market could possibly be the canary in the coal mine.
If you are looking 5-7 years out you have all kinds of options. Right now market conditions are generally moving more in favour of the buyer. So it seems like there is little risk in waiting 6 months or longer unless you believe something is going to happen to re-ignite the market in the short term. You can still be ready to pull the trigger at any point if a truly perfect property comes up at an affordable-to-you price.
Personally if I was in your situation with little time pressure to buy I’d wait a bit.
@Albertan I’d agree with your advisor and wait 6 months as people list more properties in the spring and it may be the perfect storm or the new speculation tax and mortgage renewals at the higher rates and those with rentals start to feel the pain of the new Residential Tenancy Act. There are some empty homes in the Cadboro Bay area that are 90 and 45 days on market or being removed and relisted multiple times so it shows they are overpricing things.
On the flip side if you can find something in the perfect area that can cover or close to cover the mortgage costs and property management fees through renting it might be worth making offers now while the market is a little slow.
PS if Cad does = Cadboro Bay, please wait until you retire since I can not compete with big truck/big buck Albertans!
A few points by way of answer:
• Odds are, prices will be higher in 5-7 years than they are today
• Waiting six months probably couldn’t hurt
• If you buy before retiring here, you’ll be hit with the speculation tax if you don’t rent out your place
… and speaking of Steve Saretsky, on twitter:
Another month, another one for the record books. Vancouver detached home sales in August were the fewest in nearly 30 years.
Barrister – I am watching that segment because it tells a lot about the direction of the market. I am sure you will find someone else to buy your fee simple mansion / estate. Plus, I think you are in the Rockland area which does not interest me in the slightest. No offense intended…………..
Question for the brilliant minds on this blog: I’m the stereotypical Albertan looking to retire in Victoria in next 5-7 years. Looking at bulldozer bait in Cad and Oak Bay with plan to knock down and build later. I missed my chance to get in before the last run up so now what? Should I be: 1) shopping now? 2) wait 6 months? 3) wait til I retire and shop then? Also, hearing from my investment advisor that next spring could see a significant mortgage renewal issues (timed with when most people bought houses) Agree/Disagree?
Victoria Born: Are you actually looking at buying in the 2Mil price range or just following the market? If buying my house might be up for sale and you might be interested.
I don’t know exactly how many deals are collapsing, but the VREB stats (which I post every monday) are based on when deals are reported and the way they are counted isn’t 100% transparent so they are impossible to reproduce. The stats in the article above are all based on when properties sell, which is more robust in my view but does mean that occasionally the past data gets adjusted a bit if a sale collapses or if an old sale is reported late. The advantage of the VREB approach is that once data is reported (for a month) it never changes. But the number of sales reported is not the number that actually sold that month because it includes sales that were reported that month but sold earlier, and subtracts sales that were previously reported but subsequently collapsed. And yes, that is collapses after conditions are off.
“Liquidity Crunch Is the New Bubble Gripping Credit Investors”. The data supports this. The latest Saretsky You-Tube video hits the nail right on the head. 15 minutes well spent:
https://www.youtube.com/watch?v=V426LvNWZG4
Local Fool is correct – Vancouver is in a lot of trouble. Tightening “liquidity and flipping” are a real barrier – fascinating to watch. I expect 2 more Bank of Canada hikes this year – 4 over the next 12 months. Full spec tax around the corner.
There is a real chill in the Victoria RE SFH market. I have no interest in condos [box in the sky]. Prefer dirt. Keen eye on the luxury market [$2M plus].
Good morning, everyone.
Ok let’s relax on the income thing please, back to topic.
Thanks @Leo S! I wonder why so many deals are collapsing is that stat after subjects come off?
Very interesting to see that demand for higher-end houses is the same with almost the same number of sales, but supply has loosened up. I’d be interested in hearing from realtors are they happy to get offers at any price after 30 days on market right now?
@guest_48485 great for buyers to see that Toronto Graph, it’s what most homeowners and buyers want as even those planning to cash out and move. Everyone wants to pay less tax on the purchase of their new home and have more money in their pockets. It’s queesy for those of us in the buying cycle but for a significant number of the homes we see for sale they have had them for 3+ years so they are not losing money on paper even if they drop prices 20%.
Trump says he’s a billionaire too but won’t show his taxes and all the credit owing. When in doubt just toss out your massive income, 7 times the average Victoria income, and maybe someone might give a shit what you post. Not.
Final numbers for August:
Sales: 594
New listings: 972
Inventory: 2519
So they didn’t break 600 after all. Hard to tell what the final tally will be with the way the VREB counts. Collapsed sales are subtracted from the tally. Too bad I don’t have access to that feed because I bet the number of collapsed sales have increased this year.
Except of course when it’s about how much your house is worth and how smart you were to have bought it years ago.
My partner calls HHV the “Trash Blog.” She’s never read the posts but I’ve shown her (more than) a few comments over the year ..
@Jerry
Don’t u know it is not cool to tell people how wealthy you are?
I remember as a kid, when I saw a nice sports car…I would said…damn that is a nice sports car…I better bust my ass if I want to drive that one day
Now many moons later…you see an old fart driving a sports car…people think…mid life crisis! haha.
Oh well, people nowadays don’t give a damn if you have paid millions of dollars in taxes over your lifetime into the system; they think that you gamed the system and life is not fair. Even in the USA with Mitt Romney in 2012 same crap. https://www.npr.org/2012/01/18/145413364/are-attitudes-toward-the-wealthy-changing
Better just lie low and not advertise…that is not the BC way!
Haven’t figured out how to get it to draw the current point on those.. Had to put those in by hand. Otherwise would be useful to chart the whole year that way.
Very interested to see what happens with condos. I see that as a canary in the coal mine for stress test impact.
Not alone, but in the minority and sounding just a tad out of touch.
Jerry – A lot of sturm und drang about $175k. That was 7 months income for me before I retired to Victoria.
Wow, that’s a large sum of money for a lot of people man. Narcissism pays well I see.
Don’t think I didn’t notice your nice use of the candle stick Leo!
The ethereal “recovery” in the Toronto market continues – sales volumes crash by over 35%.
The local real estate board is bullish, of course.
“…if some buyers move from the sidelines back into the marketplace, as TREB consumer research suggests may happen, an acceleration in price growth could result if listings remain at current levels.”
I count at least five weasel words in that one quote. 😛
The only city doing worse is Vancouver, which I continue to believe is in very serious trouble. This is not a blip, people. This has to date, been a slow, but steadily accelerating creep downwards…
https://business.financialpost.com/real-estate/toronto-area-home-sales-fall-in-august-real-estate-board
56% of buyers up island report buying for retirement. That’ s not just Qualicum Beach / Parksville, but the entire island north of Victoria. Wow.
A lot of sturm und drang about $175k. That was 7 months income for me before I retired to Victoria. I can’t be alone in thinking it’s a paltry motivation towards uprooting and finding a life elsewhere.
Pretty much what you are saying.
SFH over $1M in the core:
Median days on market: 44 compared to 16 last year and 8 in 2016
Active listings: 315 compared to 185 last year and 122 the year before (some of the increase is due to prices having gone up).
Sales: 38 compared to 40 last year, and 35 the year before.
So sales are about the same as last year, with 70% more listings available. That means more price drops are necessary to sell. Last August, listings sold for an average of only 0.8% off original list price. This August it was 5.4% off. Prices still up year over year though, sellers are just having to dial back their expectations.
Let’s put it this way bears. In retirement you’ll likely be living in a tent gathering cans. Us bulls will downsize and snow bird during the winters.
194 this year vs 197 last year.
As for whether appreciation helps you (increases money in your pocket), that depends on the rate of appreciation of Victoria vs up island. Haven’t looked at the data but I don’t see why those two rates must be equal since they are very different products. Maybe they are equal, in that case you’d be ahead for sure.
@Leo S
Hey Leo,
How do the Aug 2018 condo sales compare to Aug 2017? Thx 🙂
Than in Vancouver or Victoria. From outside the bubble rather than inside it looks insanely expensive.
I’m not talking about the difference in prices so the $175k is completely beside the point. But I’ve said my piece here so I’ll leave it at that.
I personally would not sneeze at $175K. Having that amount over and above our pension and savings would be pretty neat.
I know everyone thinks up is.and particularly Parksville Qualicum is for retirees but let me say what a great place this would be to,raise kids. The schools are really good, the facilities are excellent and there is,something to be said for kids living around seniors. I have met some great young families here and they all say they love everything about the area as parents.
In my neighbourhood I,see kids riding bikes and exploring on their own. The roads are quiet and safe Nd there is a feeling of community.
I know jobs can be n issue but if you can get one or can work from home your money will go so much farther.
175k after tax cash is an objectively significant amount for any family with median income/savings in Victoria in retirement.
If you are spending 50k per year it allows you to retire 3.5 years earlier if you wish to and live on the difference.
You can easily travel the world for 3.5 years on this amount.
You can send two grandchildren through university.
You can help an adult child with a down payment.
You can spend an extra 1000/month on whatever you want for almost 12 years.
I’d disagree. See above.
It’s not. If gains go up by the same %, as plumwine pointed out, starting out with the higher priced leveraged home you end up with more cash. Ie. 50% on 850k is 425k, on 500k it is 250k And the PTT/selling costs does not make it a wash.
Up island is not for everyone but it is a really lovely retiree environment for many.
I live in Qualicum after 20 years in Victoria. It has been an adjustment. I pined for the city for many months but am finally settling in. The good here is the quiet, the amazing running, walking, biking trails and the beautiful beaches. I don’t golf, play tennis or Pickleball but if you like doing those things this place is heaven. The location is great. 35 minutes to Nanaimo and about 40 to the Comox Valley h skiing, great shopping, etc.
Nanaimo has been a surprise. Most Victorians look their nose down on the place but I have found fabulous gems. Incredible parks and some great little,stores and delis. Even the chain stores are brighter, cleaner and better stocked than Victoria. I have received excellent customer service.
Both the Nanaimo and Comox airport offers lots of flight options as well.
Victoria is only two hours away. I go,down more than I should..lol.
The negatives for me is the quiet. I miss the energy of the city. I do find the traffic in Victoria a bit of a pain now. Up here you can get places very quickly with little aggravation. Victoria is home. It always will be for me.
Our house has gone up about 130,000 in a year and a half ( yes that is a moment in time) and we have not done anything to it. We have a much nicer years and incredible neighbours. Houses in our area get snapped up.
We got a fabulous doctor in Comox. A bit of a drive but we are very healthy. Can’t get a doctor in Victoria either.
Would never live near the old highway!
Up island living is pretty darn good. If freeing up money but still wanting the island lifestyle appeal it is worth looking in to.
Possibly. I’m not convinced the differential is in a constant percent. Also PTT and selling costs are in % for most people which reduces any difference.
Long shot: Anyone need a stupid amount (~40,000 bdft) of clear Douglas Fir or Yellow Cedar? In the interior…
Re moving up Island to Parksville/QB…….we lived in Parksville for 3 years……the good – friendly locals, nice area, great beach, good cycling, okay shopping, scenic………the bad – most likely never get a Dr, almost every specialist visit will be in Nanaimo, need to go to Nanaimo for good shopping, a demographic time bomb with almost 40% of the population over 65!……..the ugly – highly recommend not buying within at least 3 blocks of the Old Island Hwy, as from May til Sept it is a parade of noisy motorcycle traffic!!!
Then we can expect to see mass boomer retirement bankruptcies as well if they can’t learn to stop spending like a drunken sailor.
Do the math and it’s very possible $200K can last you fine with a place paid off and standard CPP/OAS for two people.
Are the people buying condos now younger or older or pretty much mixed? Which group is most likely to buy in a flattening price market?
Thanks Leo!
I think the condo sales are driven by people needing a place to live and the lack of rentals but completions of many of the condos and rental buildings might fix that? Some of the squabblers should spend some time googling the numbers of completion to find the supply and demand equation for Victoria and spout some relevant facts for a change.
Not to make any more work for you Leo but any chance you can dive into the 1 Million and up SFH numbers a little bit? I’m watching a few houses sit at the 1.2-1.4 mark that should have been listed at 999,999 or low 1.1 to sell. I see some really small drops, under 5% and most are still sitting. The 5-10% drops seem to move things a little. Are the MOI at the high end of the market going to start producing some price drops and more listings when the speculation tax kicks in next year?
On the cost of moving up-Island we all underestimating the costs of relocating. 2017 average costs of relocating worked out to $73,500 in Canada. Sure moving up-Island is cheaper than across country but and when you add up one or two small reno’s, a little paint and some furniture you’re likely over 100k. https://www.cerc.ca/resource/resmgr/careers/2017_Relocation_policy_surve.pdf
That’s a US study looking back at those retiring 18 years ago. There were a lot more people with employer pension plans at that time. As well, this is the generation that was born in the 1930’s and grew up during WWII. Their saving and spending habits were far different than the boomers who are now retiring.
That is, in your words.
Nice strawman.
Sure Hawk, I am sure you are always right!
When can we see the chart again?
Plumwine, speak for yourself. I’m just the messenger.
Steve Saretsky on the current Vancouver liquidity crunch which is sure to spread here.
Vancouver Real Estate Faces a Liquidity Crunch
House flipping activity (which is considered a house bough and re-sold within 24 months) has dropped, falling to its lowest monthly total since January 2015. It was the fewest house flips for the month of July since 2012.
https://www.youtube.com/watch?reload=9&v=V426LvNWZG4
@Leo S
Introvert is banking on differential % maybe the same, but differential $$$ can be more between Vic and QB.
Introvert will buy his breads with $, not %.
patriotz is a baller, $175K is nothing to him…. yet I think $17.5 for a breakfast sandwich is too rich.
Bwhahahaha! We are all Narcissists here.
It’s there if you look. Narcissists are never wrong, right ? 😉
https://www.psychologytoday.com/ca/blog/communication-success/201601/7-signs-covert-introvert-narcissist
In other words: “It makes no difference to me, so therefore it makes no difference to anyone else.”
Nice.
Guess what I wasn’t clear on what I’m saying here. Obviously up island is cheaper than here, not sure where you thought anyone was arguing it wasn’t.
The topic was equity from increasing real estate values and how that will allow Introvert to retire up island. What I’m saying is that it makes no difference unless the differential between up island and here increases over time. When Introvert bought in Gordon Head in 2009, he could have instead bought up island for a couple hundred thousand less. The plan to retire up island does not depend on prices going up here. If prices remained at 2009 levels for 30 years he could still do the same thing and pocket the difference.
The only way you can really take advantage of price gains is moving farther enough away so the markets aren’t connected, or timing the move so that you sell when Victoria goes up, but before up island rises too. Otherwise it’s a wash.
$175K in retirement is huge. Many people can live off of it for a long time. Was reading this a few weeks ago.
How much money will you need after you retire? Likely less than you think
Even people who start retirement with less than $200,000 had 75% of their cash assets 18 years later
https://business.financialpost.com/personal-finance/retirement/how-much-money-should-you-have-left-when-you-die-likely-less-than-you-think
I was reading on Vibrant Victoria that the developers are saying all projects are over a year behind due to lack of labor unless you want to grease the palm for $100K to get preferential treatment.
Look at the huge list of them and tell me how many rookie developers are going to go bankrupt and pre-sale owners are going to get burnt when the liquidity crunch comes. Not to mention the lack of quality with “carpenters” with limited experience building your place. Man it’s going to get right ugly. It’s like watching a runaway freight train.
https://victoria.citified.ca/condos/
Liquidity Crunch Is the New Bubble Gripping Credit Investors
“In the space of two months, the fear factor has swung from bubbles in credit (i.e. too much liquidity) to liquidity vanishing,” the Bank of America strategists wrote.
https://www.bloomberg.com/news/articles/2018-08-07/liquidity-crunch-is-the-new-bubble-gripping-credit-investors
My morning ponderings …… As we go into a sluggish Fall season, it will be interesting to see which properties get pulled to be put back on in the Spring. What I wonder about are those properties that seem to be vacant. There are a number of them in the listings I follow (not counting those really nasty mold filled ones). Would an owner put those on the rental market? Accept a lower price? Hold out in the hopes that 6 months down the road someone shows interest? A number of the properties I’ve seen look like grandma/pa aged in place and now moved on. Time will tell.
Since quite a while. Getting an extra 175K would make no significant difference to my lifestyle in retirement nor would it make a significant difference to anyone else with otherwise adequate retirement funds.
Also I would guess that someone moving from Vic to QB would be incurring extra travel expenses.
Even taking your scenario:
850k sale – less 10k costs using 1% realty
650k purchase – plus PTT – 11k
200k difference minuse 21k costs of selling and rebuying plus moving costs – lets call it 25k. Since when is 25k most of 200k? And since when is 175k “nothing significant”?
If ex. Introvert is retiring and making that choice 175k after tax is going to buy a lot of luxuries. For someone who is as happy or happier in QB than Victoria that amount of money can add an extra 10k a year in spending to a retirement budget. Worth it for some.
I guess it depends where you are cashing out from and to and how you go about it.
If you have a house in the core worth 1 million – ex. fairly typical four bedroom two bathroom home in North Oak Bay at 1850 square feet on a 6500 square foot lot, you can get a completely renovated four bedroom two bathroom home with suite on a 15000 square foot lot in Qualicum Beach for 650k.
If you don’t use a full service realtor fees will not be significant on the 350k difference in price.
https://www.realtor.ca/Residential/Single-Family/19810629/1544-SUNRISE-DRIVE-PARKSVILLE-British-Columbia-Z5-Qualicum-Beach
In the past, the typical retiree bought something smaller in QB as they moved from a family home to a rancher with garden area. In QB you’ll find a lot of well developed back yards that have extensive sunroom/porches.
If we are talking apples to apples there are a lot of factors in play. In Qualicum Beach there are far more ranchers that are 3 bed 2 baths due to the age of the buyers and history as a retirement community. If we cash out from a 3 bed 2 bath rancher in Gordon Head at 850k:
https://www.realtor.ca/Residential/Single-Family/19565988/4093-Gordon-Head-Rd-Victoria-British-Columbia-V8N3X7-Arbutus
You are going to be able to buy a similar quality and size place in QB or Parksville for 40% less.
https://www.realtor.ca/Residential/Single-Family/19614580/773-FORSYTH-AVE-PARKSVILLE-British-Columbia-V9P1E5-Z5-Parksville
https://www.realtor.ca/Residential/Single-Family/19539539/606-MORESBY-AVE-QUALICUM-BEACH-British-Columbia-V9K1J6-Z5-Qualicum-Beach
https://www.realtor.ca/Residential/Single-Family/19862725/803-FIELD-CRES-PARKSVILLE-British-Columbia-V9P2N9-Z5-Parksville
https://www.realtor.ca/Residential/Single-Family/19732871/177-GARDEN-W-ROAD-QUALICUM-BEACH-British-Columbia-V9K1R5-Z5-Qualicum-Beach
If you are trying to compare a split level Gordon Head with 4-5 beds and 3 plus bathrooms to what is in QB there is a lot less to choose from, just not a lot of inventory.
If we move to comparing higher end waterfront the difference is 50% or more between here and there.
Of course it’s less expensive, it always has been. In 2013 you could have cashed out of Gordon Head at $550,000 and bought in QB for ~$400,000. Now you can cash out at $850,000 and buy in QB for ~$650,000. Maybe you gained a little bit on the differential, but nothing significant and most of it will be eaten up with fees.
If you wanna really cash out, you gotta go far.
Final numbers not out yet, but yes about 615ish.
So… did it get to 600?