Sept 10 Market Update
There’s a lot of ballyhoo in the real estate industry about September being the “second spring” in the market that supposedly brings a second wave of buying. Our local real estate board hoped that people returning from vacation will breathe some life back into our sluggish market, but the stats show that this is almost never the case. In Victoria, the only thing that September brings is more new listings. In 17 of the last 20 years, September sales have dropped from August. As a buyer, the fall might be one of the more interesting times since there are both the leftover serious sellers on the market that cut prices to make a deal, as well as some new ones listing into a time of declining buyer interest. If you are listing now it better be sold by Halloween or it’s not likely to.
As for what is going on now, I am growing to like the metric of how much places are selling over assessment as a poor man’s repeat sale index. Although assessed values aren’t particularly reliable on any given property, they are pretty decent for properties as a whole. This means we can use the collection of all single family sales and see how much over assessed value (the estimate of it’s value in July of the previous year) the median property went for. That measure has been drifting downwards since May, coming down from 15% over assessment to 10% now.
There are two potential explanations for this that I can see:
- Single family prices are starting to decline a bit or
- The average house selling now is in worse shape (not newly renovated, below average interior, or some other flaw not reflected in the assessment) than in the spring
Because it’s not a huge change from the spring, we can’t yet say for certain if this is a real trend or just some noise that will reverse itself, but it’s one of the earlier indicators we have of price changes when averages and medians jump around month to month.
Certainly on the basis of bidding wars, not much is happening out there, with only about 6% of both condos and single family properties going for over ask.
Here the weekly sales numbers courtesy of the VREB.
| September 2018 |
Sep
2017
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 123 | 640 | |||
| New Listings | 336 | 1072 | |||
| Active Listings | 2513 | 1976 | |||
| Sales to New Listings | 37% | 60% | |||
| Sales Projection | — | ||||
| Months of Inventory | 3.1 | ||||
A relatively slow week to start, but first weeks often are. So far sales off 25% from last year with 30% more listings on the market, but it’s too early to tell how the month will play out.
New post: https://househuntvictoria.ca/2018/09/12/the-leaky-bucket
Yeah, that again is your interpretation. Affordable housing requires qualification in all jurisdictions that I’m aware of and this is sound social policy. This means if you earn over a certain amount you are ineligible for it.
Private investors should not be expected to provide low income housing imo unless they are renting out rooms as they do a very poor job of meeting the needs to an adequate standard most of the time because the economics don’t work even with the rental subsidies that are currently available due to land prices and construction costs.
What has happened in Amsterdam is that the private market provides rental housing at a higher cost than the public housing. People choose this because they do not qualify for public housing and because they want more space or a different location. People who are not long-term residents like students also end up in private market housing but the government there provides a housing subsidy to students.
My understanding is that it is already in force? Homes will need to be rented out for at least three months to qualify for an exemption in 2018. In 2018, the tax rate for all properties subject to the tax is 0.5% on the property value.
https://www2.gov.bc.ca/assets/gov/taxes/property-taxes/publications/is-2018-001-speculation-tax.pdf
Yes, so we should be discussing this. The 6b number sounds good in the press and is certainly significant but is there a master plan that makes sense and ten years is more than an election cycle and they haven’t really started have they? I don’t think I have seen anything that makes any sense in a comprehensive and coordinated and costed out manner. Without this there is a good chance we’ll be mired in rhetoric instead of effective results.
“Except they’re not. They are planning to spend $6B on new housing over 10 years.”
Excellent – if it happens (I sure hope it does, especially here).
Since the spec tax is not implemented, that is pure speculation. It will have some effect for sure. Will it be “effective”? Depends on your definition of that word. Is the foreign buyer tax effective? it cut out much of the demand from foreign buyers in the short term, so seems like it but of course it cannot make housing affordable on its own.
Which they have in their housing plan. Should they spend $60B instead of $6B over 10 years in order to much more aggressively build out subsidized housing? Perhaps. But as a side effect you will also destroy the investments of anyone that has bought rental housing. When the government provides enough affordable housing for everyone a private investor can’t compete. I can imagine the outcry….
I’m all for building out more affordable housing, but that is a generations long effort. It’s unreasonable to expect some kind of perfect plan to come out of government immediately and it will require a gradual ramp in spending for people to even accept it. Vienna is spending $900M/year just to maintain status quo after 100 years of build out.
Meanwhile in Victoria they announced $90M to much fanfare and pretended that would end homelessness. Vienna when adjusted for our population is spending twice that every year just to handle incremental demand.
Except they’re not. They are planning to spend $6B on new housing over 10 years.
https://globalnews.ca/news/4036642/ndp-unveils-6b-comprehensive-housing-plan-speculators-in-the-crosshairs/
My bad. What was I thinking? 😛
“An effective solution usually comes in the form of a significant housing market correction.”
No, it doesn’t. This is the wild idea of capitalism – that the market will solve it’s own problems and everything will work out in the end. All that happens is widening disparities over the long run. The solution is government intervention. Per JM Keynes.
An effective solution for unaffordable housing usually comes in the form of a significant housing market correction. 🙂
As a (very small) investor with two rental units (in one house) I am very concerned that the government is focusing increasingly and solely on the demand side. Some of the changes to the Residential Tenancy Act were absolutely justified and required (such as getting rid of the loophole that allowed any rental increase by using fixed term tenancies) but other new measures are not. The problem is the government wants the private market to fix a social problem, and is so is focusing solely on the demand side measures. This means that they are in the impossible role of spouting rhetoric that they want more investors to create rental housing while introducing policies/legislation that directly disincentives it. I am fine with my investment stagnating, I know there is risk and there can be some (hopefully small) losses that occur over normal cycles. I am not okay with more and more rules that apply only to housing providers while the government sits around doing nothing to actually CREATE more housing. It’s not fair, and it’s stupid.
A lot, they claim: Oxford Economics is a leader in global forecasting and quantitative analysis, with the world’s only fully integrated economic model and 200 full-time economists, we help our clients track, analyse, and model country, industry, and urban trends.
“Older entry level Townhomes on Village Parkway in Markham are now selling for 27% less than the spring of 2017. This is loss of Net Wealth for those most vulnerable in a housingcorrection of over $200,000. Will take a decade of earnings to make up the difference.”
Ross Kay has a series of tweets today showing the pain some are feeling in Ontario.
Speaking of affordability, the Vancouver Sun Reports, in Vancouver, in neighbourhoods such as Kitsilano or Point Grey residents would need an annual income of $450,000 to buy a house. The actual median income in that area is $65,000, for an income gap of $385,000.” That surely spells T-R-O-U-B-L-E
This made me laugh (a lot).
Hawk and I don’t agree on anything except that the BC Liberals are bad.
Agreed. However, I disagree that the vacant home and speculation taxes are effective as implemented.
I don’t think 60% is the right number for here, but looking a family incomes here 30-40% might be. That is for Vienna btw, their solution provides some clues as to what might work on a modified basis here imo.
This is your interpretation of the result. I’d say if we have adequate, nice, affordable social housing in planned developments held by cooperatives many people will choose this and it will not come with the stigma it currently has in some cases. The private rental apartment and suite market for low end is pretty terrible quality here btw.
As far as being crammed into it, floor space is going to get smaller and if you are in the free market now on a low income your choice is probably to rent a room if you are a single person or live in a very small place, possibly a basement suite, if you are couple.
If we have alternative affordable housing it has to be paid for somehow and second home ownership or primary residence capital gains taxes would be helpful here and would curb investment. In addition, public lands should be earmarked for affordable housing before more are privatized.
I’m just not in favour of an ad hoc response. I’d like to see a comprehensive set of policies and measures with attached budgets. I’d also really like to see supportive housing for those who are homeless and incentives to use it and I’m okay to pay more taxes for this.
I’ve noticed over the past few months that more and more houses are being listed for sale and they are either empty or staged. Is this normal, or are more empty houses being listed for sale?
Maybe it’s a sign that investors/speculators are dumping rental properties before the prices decline further, before their paper equity gains evaporate.
I’m not sure that putting 60% of the population into subsidized housing is that great of an outcome even if you could figure out some way to pay for it. Is that what we’re aiming for that 40% of the population is free to own as many empty vacation homes as they like while everyone else is crammed into subsidized housing?
An effective solution requires both demand side and supply side measures. Ignoring one is not the solution. I’m not sold on the spec tax yet, but it’s perfectly reasonable to look into measures to incentivize the utilization of the houses we have in addition to putting money into building new affordable housing.
https://www.bloomberg.com/news/articles/2018-09-13/australia-one-of-the-four-riskiest-housing-markets-oxford-says
Oxford… what do they know.
A vacant homes tax with loopholes that create an exemption if you rent out for three months a year is just not going to solve the housing crisis. It is appropriate for jurisdictions who believe the administration costs and chill and impact on the market will not outweigh the revenues generated, but it is not going to generate more affordable housing directly – only with the reinvestment of revenues collected.
The lack of affordable housing and the government’s responsibility in ensuring there are alternatives to the free market is lost in the focus. The horse that was let out a long time ago was the lack of provincial and federal investment in affordable public rental housing in BC for decades.
The free market does a very poor job of responding to affordable housing needs because it is a private investment which responds to economic incentives, not affordability based on a formula of rent to income. To expect the free market to do this is illogical. To try to mandate it without creating alternatives is madness.
https://www.theglobeandmail.com/real-estate/vancouver/what-vancouver-can-learn-from-the-vienna-model-for-affordablehousing/article35128683
Yes, I agree that for income tax filing purposes where you principally reside is a different test.
I don’t see anything in the legislation that sets out which test is to be applied so you might well end up being correct. It appears to be a gray area at the moment.
https://www.thor.ca/blog/2018/03/bc-leaves-much-to-speculate-about-the-so-called-speculation-tax/
Maybe you mean you generally cannot elect your province of residence or where you are principally resident for provincial tax purposes?
https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-5-international-residency/folio-1-residency/income-tax-folio-s5-f1-c1-determining-individual-s-residence-status.html#p1.11
I think the property tax act needs to be amended to clarify this. For example, P.E.I. defines a resident, for property tax purposes, as someone who resides in the province for 183 consecutive days or more in each taxation year. Non-residents pay a higher rate and whether it is a principle residence for capital gains has no effect.
Yes lets bring back the corrupt BC Libs so they can clean out ICBC and BC Hydro again to balance the books, allow money laundering to go unchecked for 16 years, while screwing taxpayers for years to come for billions more. Wee Wilkie doesn’t have a hope in hell with the charisma of a weasel. Horgan is in there for next 7 years, so suck it up or move back to Doug Trumpford land.
Almost 2 weeks later than normal.
Having seen the destruction of the Vancouver housing stock up close due to empty homes/ foreign money etc, I have no problems with the spec/vacancy tax. There’s a reason why Vancouver has put an empty home tax into play. The thing I think needs to be done is this needs to be implemented up island as well, and not just in Victoria/ Nanaimo; otherwise you get into a wack a mole effect. So no, I don’t agree with Weaver on this. If we didn’t have the housing crisis we currently have, these types of measures wouldn’t be needed. But the horse was let out of the barn long ago and now it’s time to clean up the mess.
Saanich and everything north of them will opt out also. Victoria will be on its own. Oakbay will opt out.
I can confidently predict that there’s a 100% chance Langford will opt out if given the chance.
Is the bromance over and Weaver is starting to flex some muscles???
Weaver needs to go back to UVIC and do whatever the hell he did there before and the other one needs to go back to opposition party. Playtime is over…
And…it’s snowing in Edmonton today:
Predictably, the Canadian Centre for Policy Alternatives is not impressed:
Victoria Born :
Even if the city gets to decide, with the housing affordability and rental crisis in Victoria, what are the chances that Victoria would elect to not have it? Oh, that’s right, 0% chance.
========
I enjoy posts where people predict a 0% chance of something happening.
Have you thought of this?
Put yourself on Victoria city council. Why keep a tax that sends money to the BC govt, when you could replace it with a custom Victoria empty homes tax, where the money goes to Victoria city only? Like the Vancouver one, that goes to Vancouver city https://vancouver.ca/home-property-development/empty-homes-tax.aspx .
Victoria could retarget the tax, so it actually targets true speculators (and not second homeowners) and use the money in Victoria to improve housing affordability.
Still think there’s s 0% chance of something happening?
Totoro: You are right as to principal residence but not right as to province where you are principally resident. We will see how the spec tax ends up reading but I believe at this point that BC will have to be the province were you are principally residing for the spec tax to not apply.It applies to any. It is a matter of which provincial tax jurisdiction you are residing in as near as I can tell.
The same rules will apply as to which province you have to pay provincial tax when filing. The legislation may not end up reading that way but I suspect that it will be tied to residence as defined for provincial taxing jurisdiction.
“I don’t believe we should be punishing British Columbians or Canadians that happen to have a second place.”
Says the politician with a second home
I do that a lot but instead of considering Langford, I’m considering Ottawa. I still haven’t made my child expense spreadsheet. It’s scary just thinking about it.
Disagree with Weaver but you guys already know that, and could take a good guess as to why.
The speculation tax is within the Province’s jurisdiction to enact [see Constitution Act 1982]. Nothing the municipalities can do about it except belly-ache. Weaver is pretending to be a capitalist [he should stick to his Marxist views]. I disagree with Weaver on most things, and this is just one of a long list.
“The Province shouldn’t get to pick cities that get or don’t get a provincial tax”. Uh, that’s why it is a “provincial tax” – the Province decides. Even if the city gets to decide, with the housing affordability and rental crisis in Victoria, what are the chances that Victoria would elect to not have it? Oh, that’s right, 0% chance.
It is coming and will be applicable in Victoria.
This “speculation” tax doesn’t target speculation, it’s a broader pill which basically sours secondary home ownership. A 50-75% flipping tax on the other hand with mandatory ownership revelation and CRA reporting…now that’s a spec tax. 😀
None of which the speculation tax does. In fact if it turns out to be particularly effective (i doubt it) it would make home ownership more achievable.
Weaver owns one or two second homes I thought I read ? Figures. Wait til Wee Wilkie gets in tho, he’ll show’em gone dammit. 😉
Well done to Andrew Weaver on the vacancy spec tax. The Province shouldn’t get to pick cities that get or don’t get a provincial tax. Let the cities choose.
And if municipalities like Victoria opt to keep the spec tax, I’d expect every non-speculator, who has a legit reason to have a non principal residence second home in Victoria, to show up at a town hall to tell the councillors how unfare the tax is to their circumstances
I agree with Andrew Weaver on this.
I’m pretty tired of measures meant to make home ownership less attractive/achievable or pass the buck for affordable renting housing on to the private market. Really masks the bigger issue which is the decades of under funding of public social housing. It is not home ownership that is creating a crisis, it is lack of attractive, affordable alternatives. The lack of safe affordable housing also contributes to our homelessness issues.
Amsterdam has 55% of its housing as affordable public housing with rent geared to income – generally capped at 710 euros a month. I saw precisely zero people on the streets there when I visited recently for this and other social policy reasons. Finland has solved its homelessness problem with it’s housing first strategy. When people have no other stable, affordable, long-term option, home ownership becomes a coveted thing and homelessness becomes entrenched.
Also, Barrister, I’m sorry but you are incorrect on the principal residence designation. The home can be anywhere, including outside of Canada, and, according to CRA decisions in the past, you can simply use it once a year for a vacation in order to deem it as a principal residence. Doesn’t matter where your kids go to school at all because ordinarily resident is not defined that way.
https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4037/capital-gains-2016.html#P4266_152355
Reverse prospecting (seller realtor emailing because portal client indicated interest in their property) message today: “New price at XX but the seller says bring an offer and will consider offers significantly lower”.
Advertise you are looking for lowballs, now that is a new strategy I haven’t seen before.
Good job Andrew.
Richard Zussman
(@richardzussman)
Andrew Weaver just spoke extensively on the speculation tax. Says he is opposed to the vacancy tax part of the Spec Tax. “I don’t believe we should be punishing British Columbians or Canadians that happen to have a second place.” #bcpoli
How BC’s Soaring Real Estate Prices Made the Rich Richer
https://thetyee.ca/Opinion/2018/09/11/How-Real-Estate-Made-Rich-Richer/
Looking for a bidding war? 1614 Mileva La. Decent enough location, decent but dated interior (as in livable and not a dump). Priced at $108k below assessment. Interesting…. MLS: 399515
Interesting. Wonder if he is really going to withdraw support based on that. If communities can choose, it would be a total cluster with our collection of munis
GWAC: Because she is working in both BC and Alberta that might work. But that is going to be a pretty exceptional case where it is six of one and six of the other. If your husband and kids are principally in Alberta this might not fly. In either event, the point is that you generally cannot elect your principal residence.
Orange is the new Black Barrister and people can always find a way around stupid rules/taxes. As described in the article she made the changes needed. I guess she made the calculations that her new provincial taxes still make sense.
Next Flip.
3122 Glasgow St
Purchased: Nov 30,2017 for $570,000
Assessed: $557,700
Asking: $839,000
Looks like they’ve done a nice job on the reno but a few items give me concern.
No insulation in the roof.
Removed gas furnace and replaced with electric baseboards.
No insulation and electric heating = $$$ heating bills.
I don’t think they’ll get what they are asking.
Petty difficult as it hasn’t been enacted yet.
)) LeoS: Speculation tax can be avoided by some people by simply designating your Victoria property as your principal residence and your Alberta property becoming your ‘investment’ property.
https://www.timescolonist.com/opinion/columnists/les-leyne-taxpayer-trapped-by-the-in-her-name-1.23426749
======
Here we have the example of a professional working in two cities (Calgary and Victoria), and spending about half year in Victoria and still being subject to a “speculator” vacancy tax.
I would love to see a single example of an actual “evil” speculator who has been caught by this silly vacancy tax. True speculators are in it for the money and that includes being smart enough to be renting the property from the get-go (where they avoid the tax)
Life circumstances are complicated and there are hundreds of “not-a-speculator” reasons that people have homes in two places.
What we have is a tax that affects the people like the woman in the article, and IMO doesn’t affect actual speculators who don’t have to pay a penny for unlimited speculation (as long as they rent their specs out).
GWAC: You are simply wrong. You cannot simple name your principle residence. There are already very defined rules as to what is a person’s principal residence jurisdiction under the tax act. Albeit, that these rules have usually been applied as to country of residence but the legal tests are easily applied to provincial jurisdiction.
By way of example, if your kids go to school in Calgary and you are working full time in Calgary then guess where your principal residence actually is? Legally you dont just get to pick your principal residence rather principal residence is determined by a bundle of factors. One has to bear in mind, that Alberta has a vested interest in your principal residence remaining in Alberta since there is an issue of were you pay provincial income tax involved.
There might be some wiggle room in the case were you have a spouse who is not working
and the property is in her name but she better be prepared to spend six months of the year here. Will people be able to bend the law? Probably to some degree since it will be hard for the BC government to figure out exactly who is and who is not residence. Most people will be trapped by the simple fact of the jurisdiction where you pay provincial income tax. Trying to claim that your principle residence is in B.C> while claiming that Alberta is your provincial taxing jurisdiction is simply not going to fly in 99% of cases.
Trying to do that is also going to open you up to some very serious tax fraud liability.
CONSULT A LAWYER. Orange is not the new black.
This compares the current Victoria market (prices) to the mid 1970’s. Back then, home prices were 4 times household incomes. Today, they are 12 times.
https://www.youtube.com/watch?v=v-J5H1P82Dg
Historically, this has been the best way to judge affordability and to identify disequilibrium. Of course, much has changed, particularly interest rates, between the 2 time frames.
On the principal residence issue [here are the CRA rules]:
https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-1-individuals/folio-3-family-unit-issues/income-tax-folio-s1-f3-c2-principal-residence.html
That’s a deemed disposition of the Victoria property with tax on the capital gains. On top of that you become a BC resident for income tax. Not much difference for middle incomes but there is for $100k+.
Josh: I am not sure that renters converting to homeowners has actually been the biggest dial on the market these last five years. We all understand that first time buyers allows other to move up the property chain.
The other big dial is people, often retirees. with large amounts of capital moving to Victoria. First we had a wave of Alberta money but then it was followed by a wave of Vancouver money. Having a renter inject 750k of new money is significant but having a Vancouver refugee injecting 1,5 million of new money,may well be the key that has driven prices past local incomes. In many cases this has resulted in its own chain of buying with locals moving down the property ladder (from a house in Oak bay to a condo downtown by way of example).
The way stats are kept I would suggest makes trying to figure out which is the bigger dial next to impossible. So areas like Oak Bay are more directly affected than others but the price pressure is seen across the whole city. It is obviously not the only factor since things like the prevalence of suites has also boasted prices for SFH including houses that dont have a suite.
New money is new money but there is a marked difference to the market when the new money is a flood of new arrivals with very deep pockets.Looked at another way, is it really surprising that an old guy like me with thirty years of savings behind him has deeper pockets than a young man like yourself. I have no doubt that long before you reach 65 you will be able to afford your dream house in James Bay. Of coarse there is a strong chance that by that time James Bay will be a sea of high rises and no longer your dream location. I have seen this chain of events happen over and over in Toronto. The call for more density in order to make a neighbourhood more affordable does not always produce what people expect. Unleashing the dogs of development does not mean you always get to control the developers. Unless I am mistaken a new fifteen story building has recently been approved for James Bay. I know for a fact that a number of other buildings are on the books and waiting for the election to be over.
I know that you want to increase density to make it more affordable for you without necessarily changing the character of James Bay. But you have to remember that there are a lot of people behind you in that affordability line you will scream that density needs to be increased to the point that they can live downtown. Ironically I suspect that you are a Nimby in the making.
I am not trying to beat you up (basically I dont care what happens to James Bay although I am saddened that Victoria might loose the very character that makes it a good place to live). I would suggest that you rethink what part of town you want to buy in if your plan is to stay there over the long term and raise a family there. But you seem more than smart enough to figure that out for yourself so this is really just an old man talking into the wind.
No way to do that. People can name whatever property they want. Government cannot not dictate that you must name the Alberta one, May have rules but I am sure anyone can get a license here or whatever. Big middle figure to the NDP
Seems she is now paying BC provincial tax so you need to way the 2 to make sure its worth.
Regardless of whether the tax is meritorious, you can bet that they’ll move to close that little gap off, if indeed it is one.
LeoM
That’s good. Glad to see people are finding away around this stupid tax
Speculation tax can be avoided by some people by simply designating your Victoria property as your principal residence and your Alberta property becoming your ‘investment’ property.
https://www.timescolonist.com/opinion/columnists/les-leyne-taxpayer-trapped-by-the-in-her-name-1.23426749
This won’t work for everyone, but the loophole is catching on; I’ve heard of an Alberta house owner on Dallas Road doing the same thing.
Leo that’s a shock. Every idiot who invested in that crap is going through the day of reckoning with more to come. Pet rocks have more value. Bitcoin will last because that will be the mechanism to hold illegal funds or other funds away from the government for a while. Ethereum will last as well as ripple but at much lower prices.
Bubbles pop…
It’s just a matter of time.
Crypto currencies are essentially worthless.
https://www.bloomberg.com/news/articles/2018-09-12/crypto-s-crash-just-surpassed-dot-com-levels-as-losses-reach-80?srnd=premium-canada
About the zoning, call Langford and see what this kind of thing has taken in the past. Langford is pretty good at changes as long as it is seen as positive and your neighbours in the surrounding area are not against.
They will also give you the process and paperwork.
As mentioned from Leo find a Lawyer with experience in these kind of things in Langford. Market has changed so be careful in listening to any promises.
Contacting a few developers in the area to discuss may also be a good idea.
No one thing “controls” the price of houses, but renters converting to homeowners would appear to be the largest dial on the control panel. If someone currently owns and is selling / moving, then they’re likely moving slightly up, sideways, or slightly down. Not a big change to the money in the market. If someone puts their life savings towards a downpayment and goes to the bank for another $200-500k all for one property, that’s a huge injection of new money. LeoS has said that first-time buyers are the biggest market factor and I’d have to agree.
The wisdom of highschool level statistics tells us how meaningly an average can be. We know there’s a bunch of rich folk here. The average income is low compared to similar cities in Canada. The only reason why rich folk already living here would continue snapping up local homes is speculation. Local speculation isn’t looking so hot right now.
True. See paragraph 1. This demographic is not a big dial on the control panel.
Recent $50K price drop in Henderson/Mount Tolmie area:
https://www.realtor.ca/Residential/Single-Family/19760264/1944-Waterloo-Rd-Victoria-British-Columbia-V8P1J5-Mt-Tolmie
@ Leo S
yes, the physical sign on 1783 Rockland says sold.
1738 Rockland does have a sold sticker on the sign.
Hard to tell without knowing more specifics. Certainly potential to upzone means the land is worth more so generally one would expect a developer to pay a premium in order to acquire the whole land assembly.
Get your brother to get a competent real estate lawyer to review the deal and ask for a big deposit if they feel like there’s a chance the deal won’t complete.
It is, and more steeply than normal for the season.
You’re out of touch with the point of the discussion. It was all about $200K per year incomes.
Every perfect scenario of firefighter and teacher being the norm is more BS. Most folks with kids or family responsibilities don’t have the energy nor time to work two jobs. The time off is far more valuable than the cash.
Yep Google is easy to search for slashes too which several in Golden Head are stacking up again today. Ground zero for the coming tank job.
Jan 1. They will be generally up, since values in July 2018 were generally up over July 2017.
Listed as current… Does it say sold?
No, they are not being double counted, but it is very misleading that sales where the price was agreed on nearly 2 years ago are showing up in current statistics.
No side hustle for this kid. I enjoy my life outside of work too much to spend it grinding away at something else. But to each their own.
Totally fair, I took three months off last year, so I get, but if only 5% the population can live in Oak Bay and 5% of the population is hustling you end up in a scenario where the non-hustlers are priced out of the market……in an over simplified way.
If you have a firefighter hustling a side business and her husband is a teacher with a summer gig pulling in 20k/summer and they have a suite and they take on a home stay student from time to time you’ll have a tough time affording the same level of housing with a 9 to 5pm government job and doing nothing else.
Loving the evolving path to home ownership in this country.
Boomers: Single income
Gen X: Dual income
Millennials: Dual income plus side hustle or rental suite
Post-millennials: Dual income plus side hustle plus rental suite plus sell your kidney, presumably
Solid summary. At least there is a path to home ownership as in many countries unless you’ve been born into money there isn’t.
It was sarcasm… sorry. Lowest form of wit, I know.
No side hustle for this kid. I enjoy my life outside of work too much to spend it grinding away at something else. But to each their own.
I know one couple who probably earn around $400k. While they may have some nice things, she is never home and her health is failing. They definitely don’t seem to have much time to enjoy what they have accumulated. Not saying that is always the case, but sometimes you really need to ask yourself what your spare time is worth. For me, that is quite a bit more than i could ever earn in a side hustle.
Earlier today, I posted what houses cost in major Canadian cities.
Your “evolving path” seems to only apply to a handful of cities, ours included.
Hello all and thanks Leo for this great resource. My spouse and I are currently watching the market, saving and doing lots of research including regularily checking out your blog. We are trying to make sense of a situation a friend of my husbands has got himself into. He purchased an older townhouse in Langford roughly 2 years ago. His marriage has since gone south and he doesn’t have enough cash flow to pay bills. He said all the owners of the townhomes have been contacted by a real estate company about getting the zoning changed from attached housing to medium density. He thinks he’s in the money (going to make hundreds of thousands in profit) in a matter of a couple of months but we can’t find any applications to get the zoning changed online. How long do those things take to happen? And would he really be offered this kind of extra money for his place just based on a zoning change? We really know nothing about how this sort of thing works. Thanks in advance.
Loving the evolving path to home ownership in this country.
Boomers: Single income
Gen X: Dual income
Millennials: Dual income plus side hustle or rental suite
Post-millennials: Dual income plus side hustle plus rental suite plus sell your kidney, presumably
A decade into their careers (if they’ve worked full-time during that whole time), teachers earn decent money: around $80K to $88K a year. Mind you, that’s still $10K to $20K less than teachers earn in Alberta.
Super tough market to read right now….all over the place.
319 Chester sold today for $2,020,000 and purchased in 2013 for $1,165,000.
401 – 1820 Maple (950 sq/ft pre-sale condo in Sooke) sold today for $749,900.
845 sq/ft unti at Janion listed yesterday for $1,588,000.
and one for Hawk
Home in North Saanich re-listed 4 days ago for $1,590,000 and previously purchased for $1,750,000.
Seeing a bit of everything.
I can tell you that this particular house is very far from inexpensive construction. Good wood, and the trades to finish it, are among the most expensive options when it comes to finishing. Notice the clear wood on the ceilings (with a reveal no less)? I’m sure if I walked through that place I’d be able to point out all the fancy and expensive upgrades in it.
I wouldn’t be surprised if that was a 7 to 800K build (or more). What it’s worth, I have no idea.
The owner gave me a tour of the home when it was still under construction. He is a developer so not one to get ripped off on construction costs and this was north of 800k.
It is a really expensive build.
I know firefighter/government employee and firefighter/police and firefighter/nurse couples who all own homes $850k – 1 million. They make it work.
I know people in this category that make $1.0 – $1.2 million work no problem. Often people sell a starter home or a condo and have 200-300k in equity. Throw in a basement suite in the purchase and $1.0 million isn’t so crazy. Well it is, but not in terms of making the monthly cash flow numbers work.
I had a firefighter cut down some trees for me a few years ago….I looked him up on http://www.vancouversun.com/business/public-sector-salaries/basic.html and he was at $102,000.
If you are a hustler $150,000 for a firefighter combined income (firehall + side business) should not be an issue. It is 2 days/2 night and 5 days off so working 2-3 days of those 5 days off is not out of the question physically and mentally. I use to do it all the time as a Respiratory Therapist.
The firehall on Esquimalt Rd by the base I think is 24-hour shifts….so 24 hours shift, day off….24 hour shift and something like 5 days off.
@ VicInvestor1983
Is there a sold sign up?
I know firefighter/government employee and firefighter/police and firefighter/nurse couples who all own homes $850k – 1 million. They make it work.
As for teachers, if they work as tutors in their spare time (including summer), they can easily earn $30 k cash per year. As a university student >10 years ago, I used to tutor high school kids for $30/hr (individual) or $60/hr (groups).
I thought they were volunteers? It’s called Volunteer Fire Department. Good way to make a living.
Not a bad rookie salary, though. A first-year teacher working full-time in SD61 makes around $52K a year.
You’re mixed up again. I never argued they made $200K with a side job.
How out of touch are you? I Googled “saanich financial report” and it was the first result.
That’s if you make it past 4 years. First year are $74K . It’s in the contract. The fact you avoid to mention is they don’t make $200K with a side job. Thanks for spending so much time searching for it.
Hawk: Do they really pay the Saanich firefighters in barley? maybe we should offer them oats?
According to Saanich’s latest financial statement, many (even most?) firefighters earn salaries in excess of $90K.
Scroll to page 36:
http://www.saanich.ca/assets/Local~Government/Documents/Corporate~and~Annual~Reports/Saanich%20Stmt%20Fin%20Info%202017%20Final.pdf
))) josh: Hilarious typo aside, the only way $1.5m will be chump change is if your run of the mill middle income household is pulling $300k+.
============
It is too simplistic to think the “only way” to afford a house is based on annual income.
Why assume that middle income household income controls the price of houses in Victoria? For starters, there are plenty of Canadian cities with higher incomes and much lower house prices .. like Sudbury for example. https://en.m.wikipedia.org/wiki/List_of_Median_household_income_of_cities_in_Canada
There are other factors, such as average (mean) net worth (assets-debts) of Victoria household being over $1 million, amongst the highest in Canada. http://victoria.citified.ca/news/1-one-million-thats-the-average-net-worth-of-a-victoria-resident/
And median net worth around $650k. Considering that only 62% of families own houses, the typical house buyer would be above average to those numbers above.
So the people buying $1.5m houses aren’t necessarily those with >$300k annual income. They might have sold a house for $1m and taken a small mortgage.
There’s at most less than 500 households making $400k+ sustainably year after year in this town. In Vancouver it’s different. BC business magazine publishes a report every year. While they don’t show incomes at that level they do show averages.
In Vancouver it’s $135k. Victoria it’s $70k.
Firefighters make $33 an hour in Saanich. That’s barley $70K on average hours. Even with OT that would be $100K with little time left do work a second job. What are they doing ? Selling dope ?
sar-chasm
(n.) the giant gulf between the sarcastic comment and the person who doesn’t get it.
either that or he/she was channeling bearkilla who makes $700 per hour on a slow day.
What’s Cynic’s point? they convert everyone’s yearly wage to Yen in their mind? That they’ve never met anyone in Victoria outside of the uplands? that they subscribe to the same view as Michael and with these upcoming interest rate increases that we’re clearly set up for 700% price increases?
My point is that if Cynic doesn’t change his point of view, he’ll end up looking like a chump.
I am not an expert in this area but I believe that a motion might be brought to the Ontario Court of Appeal for a declaratory judgment clarifying the decision although this would be unusual. Not my area of practice so I cannot give an opinion.
I can tell you that this particular house is very far from inexpensive construction. Good wood, and the trades to finish it, are among the most expensive options when it comes to finishing. Notice the clear wood on the ceilings (with a reveal no less)? I’m sure if I walked through that place I’d be able to point out all the fancy and expensive upgrades in it.
I wouldn’t be surprised if that was a 7 to 800K build (or more). What it’s worth, I have no idea.
My apologies Barrister, I rushed through my last post rendering it unclear. I’ll try again.
The fight between the Competition Bureau vs the Toronto Real Estate Board (TREB) began in 2011 when the Competition Bureau, a federal watchdog designed to protect consumers by investigating business policies and mergers, challenged TREB’s policy preventing the publication of such information, saying it impedes competition and digital innovation.
The TREB sought leave to the Supreme Court of Canada to challenge judgements in favour of the federal Competition Bureau, but they were denied by the Supreme Court.
My question to you Barrister, is this: now that the TREB has been denied access to the Supreme Court, they are still trying to intimidate their members, perhaps in contravention of earlier court rulings, who are releasing MLS information. So, is it legally possible for the Federal Competition Bureau to seek access to the Supreme Court of Canada to force the TREB into compliance with the intent of lower court rulings in favour of the Competition Bureau?
Josh: Have you considered selling your body parts? Good money to be had for kidneys, liver, lungs and hearts?
LeoM: I assume you mean the BC Competition bureau. I believe that there are a number of procedural steps required before this matter would even begin the long and winding road through the courts.
I do side hussle and it brings in another ~$10k, which the government then takes almost 40% of. I couldn’t “side hussle” my way to $200k unless I cloned myself. For free.
My family once had to eke out an existence on a mere 400K/year. Fortunately I found a real job and the hard times passed 🙂
Toronto Real Estate Association was refused by the Supreme Court. I wonder if it’s legally allowed for the Competition Bureau to apply to the Supreme Court force the Realtors into submission. Barrister, over to you as our local legal expert.
Lots of price decreases even on the cheapest SFHs. DOM seems to be increasing. It’s reminding me of last summer before the stress test crunch time. Buyers choosing not to buy or no buyers left? I hope we start to see a flood of inventory but I think we’re a year from that. Lots of hopeful sellers! They are probably trying to get top dollar to move up. I think there are going to be a lot of expired listings coming up.
Leo as always thanks for the blog. It is very valuable to me as a house hunter. Is there any way to analyze the blog views and match to prices/sales/%of ask value? Like you did with Vancouver buyers? Or even a Vancouver buyers rehash? We have much more data to work with now to see if there was any correlation.
Are you guys really missing Cynic’s point???
The bears are sensitive bunch.
TREB still fighting their losing battle.
https://business.financialpost.com/real-estate/treb-sends-real-estate-company-threat-over-publication-of-gta-sales-data
Interesting that the ruling seems to be fairly narrow, and that they are now insisting that the data can only be used as part of providing real estate services, and only behind a password protected site. Fully public data may still be some ways off.
737 Princess Ave aka the flop house: https://www.realtor.ca/Residential/Single-Family/19901236/737-Princess-Ave-Victoria-British-Columbia-V8T1K5-Downtown
I know exactly zero local tech workers making over $160k. If you want to earn more than that you have to move to New York, Seattle, San Francisco or found your own successful startup.
Hilarious typo aside, the only way $1.5m will be chump change is if your run of the mill middle income household is pulling $300k+. Probably $400k if they’re not tax dodging. Incomes just don’t grow that fast.
Cynic if you believe 1.5M is “chump change” compared to what house prices will be at in a year than you clearly have not been watching the market.
Apparently the home of “Infinite Wealth” https://opengovca.com/corporation/9211705
Fixed that for you.
Cynic – you crack me up! Guess I’ll go get that Walmart greeter job to pull in an easy extra $100k a year.
Me too and so are all my friends
Victhunter – I assume you’re asking about the Princess ave property. It is weird – I see it through the MLS portal setup by my realtor but I can’t find it on mls.ca or the listing realtor’s website. If I find something – I’ll post.
Gawd I’m a loser. 🙁
Every couple i know in Victoria easily make 400k per year. And the stats on median and average income back this up.
Dont make that much? Get a different job or a second job. Find a side hussle. Try harder.
Real estate prices will continue to rise indefinitely. $1.5M is chump change compared to how much that house will be worth in 1, 5, or 10 years from now.
@guest_48836 how many couples? If you are making 200k a year each it is tough to stay married. I know lots of people who make or can make 200k a year but usually, the partner works fewer hours or they are single never married divorced/making alimony payments. I know there are a people who retire rich but few would want to sink 1, 1.5 or more into the flippers houses I’m seeing for sale.
An example was two professionals at an open house I overheard, both were divorced and own their own places and they had 2 teenagers. Moving into a good livable home is tough for them even if one makes 200k and the other 100k. Between mortgage/car dept and two kids, more than 1M is a stretch and they have to deal with the selling of their homes in a slow market.
Just thought of another couple I know, that’s two couples x 400k. One high tech business owner and one doctor. Few lawyers after expenses and high tech workers make over 200k, but maybe I’m wrong.
@RenterInParadise have a link?
This is, apparently, from April 2018.
Hmmm. To me, Calgary’s price seems unrealistically high.
https://www.worldatlas.com/articles/average-home-prices-across-canada.html
Except that includes 11 pre-sales from the Verde that were uploaded last week, including 6 sales from back in December 2016.
The building completion date keeps getting delayed and the REALTOR® changes the completion date which triggers it to come up in the “pending” section, but I don’t believe the sales are being double-counted.
New industrial space scarce, Victoria market tightens
Greater Victoria’s industrial vacancy rate continues to drop as demand to buy and lease workspace in the region outstrips the pace of new supply.
Industrial vacancy fell from 2.4 per cent in 2017 to a decade-low 1.71 in 2018, according to Colliers International’s summer 2018 regional industrial market report.
https://renx.ca/new-industrial-space-scarce-victoria-market-tightens/
Hey one of our beloved subject properties is baaaack…. 737 Princess Ave. MLS 399468
Yeah, last time I was apartment hunting was in 2011 in Ontario before I bought a house. Just the two cats back then, but it was such a breeze. Find an apartment building in the location I wanted, walked in, saw a unit, and signed a lease for a very reasonable price. Since then the building has been renovated and the prices have doubled… but at least they wouldn’t deny me a place because I choose to live with a small wolf instead of a small ape.
We’re not like Joe and Josephine; our only debt in the world is the mortgage, which we’re trying to pay off pronto.
Even an extra $55 a month in extra payments to principal (on top the extra we already do) will save us a shit tonne in interest and knock a good chunk of time off our mortgage.
It’s gross what condo boards restrict here. Ontario has far better laws around pets, except when it comes to pit bulls. Basically, there are no pet restrictions. Someone can say no pets in a listing but it’s unenforceable and if there are pets in a unit, you can’t remove them for that reason. It’ll be hard finding a place that takes 3 pets here. Good luck!
@ Victhunter
$200k/year = $100/hr salary. Lawyers, doctors, some tech workers, and senior government workers easily make that. Even firefighters can rake in $200k when they work on the side.
CMHC reports that housing starts slowed in August. 200k vs expected 210k
https://www.timescolonist.com/cmhc-says-annual-pace-of-housing-starts-slowed-in-august-compared-with-july-1.23426976
GWAC: 10 years from now the baby boomers will be dying (or nursing homes) at a much faster rate than retiring. Actually, the nursing home rates may have a greater impact than the death rate since they can eat up a lot of any estate.
I will be spread in the rose garden long before ten years from now so I dont really care where house prices are ten years from now. But if I had to predict I believe that houses prices will start a serious decline ten years from now. My wife just came in and wants my crystal ball back.(she claims it is her paperweight and I need to leave it in her office).
I’m with Sidekick. At this location (1118 Woodstock Ave), I’d gladly settle for a postage stamp lot with just enough room to walk the perimeter. But not at this price.
Happy to see Mr Money Mustache referenced. I wish Victoria had rowhouses like in London or Toronto (aka fee-simple freehold). I think it’s the housing option most aligned with my “mustachian” priorities. You get reasonable density and thus low transportation costs. Low taxes due to small lot & building size. No strata so no fees. I can choose ways to save money on maintenance, e.g. by having a zero-maintenance yard.
Right now, trying to find a rental apartment with one dog and two cats, I’m really not sold on arbitrary restrictions on how I live. The idea of buying into a strata which might make rules as to how large my dog can be is extremely off-putting. Plus I’d much prefer a private entrance onto the street.
I’m leaning towards sucking it up & buying a SFH in a year, and delaying financial independence a bit longer.
Barrister totally agree on the 10 years. I hear there is a big land find coming in the core. That will drive priced down. Also I hear they are stopping immigration. Double whammy for Victoria. Lastly I hear they are turning the temperature down in Victoria and adding rain in the summer.
Agreed – not everyone needs or wants a big lot. A lot of work or expense if you want to keep them looking nice.
Caveat: Not saying it is bad construction but rather inexpensive construction. It has draw backs but that does not mean it will not last. The construction costs cannot be used to justify this price.
Ultimately a house is worth what someone will pay for it but I personally dont believe that Victoria house prices will hold their value ten years from now.
@guest_48840 I agree on densification. I can’t wait until the board chimes in with the “death moat” “Ontario Cabin” type comments or worse about my house when I list it, we have a half lot as well. I’m madly replacing the carpets this week so I can keep some of the laughter down when my list price comes up!
My wife an I laugh about how many Koi Pond water features we see. With young kids it really not a selling feature but it is a sign of the wealth of baby boomers that they have the ability and interest in creating waterfront rather than buying it. It’ll be a sandbox the first weekend we move in.
@guest_48836 how many professional couples in Victoria make 400k a year? I know one but I guess I come from the wrong side of the tracks.
I was betting we are running out of Million dollar home buyers as some people get smarter and all homes in Canada start to have difficulty selling due to a slow down/liquidity/tax/regulations and people get tired of having rental suites. Seriously if you are making enough to buy a million dollar house do you want to deal with someone on the same property? I was disappointed 40 people a month were buying expensive homes, the same as last year but let’s see if that number drops……..
200k per year is more than either the average lawyer or GP makes in Victoria. Maybe plumbers make that.
You can also argue that Warren Buffet can afford that house but it does not change the fact that it is a ridiculous amount of money for a small house on a small lot. Not having seen the house I cannot comment on the construction quality.
No house is tough to sell. Just tough to sell at the price you think you’re entitled to.
Michael you check out the RNX news.
Of course Europe is sprinkled with post-and beam buildings that have stood for centuries.
@ Barrister
$1.5 million is not insane. It’s condo price in Vancouver. A professional couple making $400k a year ($200k x2) can easily afford that. Did 1783 Rockland sell for listed price of 1.55?
If only that price was for 10 years, it’s going to go up. But still a savings non the less!
1118 Woodstock, that is an insane price for a small house on a small lot. What’s with the mosquito breeding pen or is that to drown small children in? That is over 700/sq. foot.
I know, as my wife reminds me, the world has changed but this sort of post and beam construction was considered a cheap way to put up a cottage in Ontario when I was young.
Has 1783 Rockland sold? and for what price? Where are all these people with 1.5 million coming from anyways?
1118 Woodstock Ave
that’s a lot of wood.
1118 Woodstock Ave.
That moat is a death trap for those coming home late from a party…I’d quit drinking if I lived in that place 😉
I agree with Victhunter. This has some more price slashing in its future.
This is a good argument for densification. A 2500+ square foot home on a 3400 square foot lot. Lots of families could easily live in a place of that size (and you can see from the pics that they have plus sized bedrooms). With a huge park close by (with amenities), you don’t need a big lot. It apparently has space for parking as well.
This was clearly an expensive build, but it goes to show you can get a lot of house on not a lot of land.
A BC Assessment official told me a few years ago that most properties are assessed by a computer algorithm based on input sales data and a small percentage of assessments done by an assessor. An assessor is only involved in a detailed assessment in relatively few actual properties.
I made the switch to teksavvy when I was reminded they exist on this board. It was a harrowing switch cause Shaw didn’t provision my modem for several days past when they were supposed to but all is well now. I’ve seen telus trucks hooking up fiber now though and I want me some of that. Teksavvy resells fiber in Ontario but it seems there’s no word of when fiber could be resold here.
1783 Rockland Listed near assessment. What are the pro’s thoughts on offering near assessment to the pie in the sky sellers?
1783 Rockland sold real fast. Anyone know the price?
@guest_48833 tough house to sell. Although I love wood my wife, not so much and 3 bedrooms for over 550k each, with no view and a postage stamp lot? It will be the motivated sellers like this one that adjust the market. Assessed as of July 1st, 2017 $1,235,000. If it comes in at over 1.5 I’ll be surprised, maybe drops all the way to 1.29 in the spring if they are moving and keep dropping or it may be reassessed and come in lower?
When are 2018 assessments released, I might want to list mine before then as we should see a drop or will assessments lag like the media?
I’ve been watching it for a while, not that that’s in my budget. It’s a good looking place but it’s a garden suite. It looks like it has enough land to walk the perimeter and that’s it. A few blocks away you can get double the bedrooms and double the land size for $1.4m. I think they’ll have to drop it a lot more than 15%.
Here’s one for Hawk. Another slash at 1118 Woodstock Ave, now down 15% cumulative.
Price Original $1,995,000
Price List $1,695,000
DoM 62
I like it when you get all Triple M for us. However, the savings might be even better put toward all that crazy HELOC debt that Joe and Josephine Canadian are piling on at the moment…
Absolutely. That’s a known thought that could be greatly expanded upon. It’s interesting however that the very nature of each of the current statistics that are followed here: Sales/New List, MOI, can each be broken down individually (and if you’re a long time fan of this blog, have been…) to their inputs accordingly. It’s no different than choosing an individual stock to invest in. P/E vs FCF, EBITDA, etc, etc, etc…
At the end of the day, everyone sees it a little differently but Assessed Values for the most part are a constant for the reasons Leo mentioned, but I would add the high majority of homeowners have never questioned the values and paid on time.
Yeah in rapidly changing markets it is harder to get the right value. We see the same in that sellers misprice their listings and appraisers have a tough time valuing properties even if they do spend a lot of time on it.
You bring up an important point though that consumers are incentivized to appeal their assessments. I see this as an advantage of the BC Assessment process. If they get it too wrong on the high end owners are keen to correct the assessment keeping it from getting too far off. Crowdsourced assessments if you will.
135 “sales” reported in the last 7 days.
Except that includes 11 pre-sales from the Verde that were uploaded last week, including 6 sales from back in December 2016.
I don’t have too much elaboration to provide. Just a question more than anything. I am assuming a fixed number of staff of appraisers for a very large geographic area having to make some decisions based on a provided data set.
As real estate seems very much a micro-climate unto itself I have run across many folks who have had cause to dispute their assessment with the taxing jurisdiction for either a higher or lower assessment. Most are advocating for lower based on the tax bill. But some may advocate higher.
I do not discredit the statistic as a valuable benchmark. Rather i am wondering as a source of revenue for tax purposes how assessments may compare in a very active or volatile market.
Can you elaborate? The assessed value is just an estimate of value at the midpoint of the year. I don’t think the methods are too contentious, just that since they don’t actually go into the houses and since they have to value every property in BC they will do best on “standard” properties of average condition, and do poorly on unique properties or those that are substantially nicer or poorer than average.
What of the mildly contentious subject of the means and methods used by BC Assessment to determine assessed value year over year?
I am wondering what lag time if any may skew asessed values in a rapidly changing real estate market.
@ LF:
True if there is no effective financial regulation to create a stable housing market.
But the current run up in prices concomitant with unusually low interest rates — a consequence of the deflationary effect of off-shoring much of our manufacturing base — could have been prevented by progressive tightening of borrowing regulations.
The commercial banks, obviously, had no reason to seek or support such regulation since for every dollar they added to their reserves they could lend around ten or twelve dollars to home buyers, thereby grossing an income of twenty or thirty percent on their capital (what Totoro insists is not a usurious practice by what Totoro calls a “competitive” banking industry, notwithstanding that these competitive banks all pay zero point essentially nothing on deposits, even as credit unions pay up to twenty times as much).
the downside to the absence of effective regulation of mortgage lending is seen when interest rates rise. Then recent buyers are squeezed, often to the point of bankruptcy, divorce and general misery. Still, bank are proving to be an excellent investment, so obviously there is a huge vested interest against reform.
“Although assessed values aren’t particularly reliable on any given property, they are pretty decent for properties as a whole.”
Can I suggest you add this % to your recurring weekly numbers? In my opinion it’s just as important in forecasting potential change and trends as MOI but captures another angle. And if possible to go a step further in a monthly update (Core/Peninsula/Communities).
$55/month in savings would turn into $9515 over 10 years (if invested).
Put another way, you’ll have an extra $67,000 in your retirement accounts in 30 years.
https://www.mrmoneymustache.com/2011/04/15/getting-started-3-eliminate-short-termitis-the-bankruptcy-disease/
Thank you, Leo S.
One of your theories to explain the current market status is “Single family prices are starting to decline a bit”. Best be careful as those are fighting words for many on this board. You risk being categorized as a “bear” or “doomsayer”. Be very careful.
“So far sales off 25% from last year with 30% more listings on the market, but it’s too early to tell how the month will play out”. Without exception, this has been a monthly pattern for a number of months, just like Vancouver………..month after month after month ……….. rinse and repeat. This is a necessary condition for downward price adjustment. Any other conclusion is the subject of ridicule.
PS: there is a typo:
“Certainly on the basis of bidding wars, now much is happening out there….”
“now” should be “not”.
Deb
Personally, I don’t accept the premise of the article. It actually made me laugh. There has been almost no deleveraging of the consumer at all, and things are unlikely to meaningfully get better until and well after that occurs.
If you’re a huge vendor of mortgages given to a highly leveraged population, I don’t think the chief economist would be writing himself a good ticket home if he talked down the market. Calling it “balanced” and therefore price stable is defensible in academic terms, but in practical application it’s completely out to lunch. A RE market is always subject to downward or upward pressure; it depends on which part of the cycle we’re in that dictates which force tends to predominate and drive the overall trajectory of pricing.
Toronto or Vancouver is not going to skip most of the “slump” phase and move into some magically balanced market. That’s the perpetually offered pipe dream of invested economists, politicians, newly over-leveraged buyers, and it’s never to my knowledge, been accurate. And we’re way, way worse relatively speaking, than the US was before they had their deleveraging event. Prices IMO, have a lot further to fall at least in those markets, and I don’t think Victoria will be a picnic either.
@guest_48807
Did you read the comments at the bottom of the article. Apparently there are more people out there than me who think this is “biased BS”
Canadian August home price gains are a “sign of things to come”: RBC
August saw housing markets across Canada post year-over-year home prices gains, in what many are calling the end of a policy-induced cooling period. But will the jump in activity carry on into the fall? One economist says yes.
“It’s official: the Toronto benchmark price is no longer falling on a year-over-year basis. It returned to positive territory in August — more or less on cue — marking an end to a correction that lasted five months,” writes RBC senior economist Robert Hogue, in a recent note.
“[Our] view [is] that rising interest rates, the stress test and affordability issues will drain away the market’s momentum in the period ahead,” he writes. “We think that low single-digit (year-over-year) increases will be the norm for a while. We see little that would disrupt the current balance between demand and supply in the market.”
https://www.livabl.com/2018/09/canadian-august-home-price-gains-sign-things-come-rbc.html
IMPORTANT PUBLIC SERVICE ANNOUNCEMENT:
A few weeks ago, I switched from Shaw Cable (internet + landline) to Juce and VOIP Much.
Very pleased so far. Switch-over for both was painless. Now paying $55 ($45 internet + $9.45 phone) a month vs. $110 a month with Shaw.
The kicker is, even though I’m paying for the same internet speed (15 Mbps down) I’m consistently getting 22 Mbps, based on Shaw Speed Test. Upload is also 50% faster.
All in all, I’ll be saving $660 (what Jerry used to earn per minute) a year and receiving the same or better service.
Plus, Juce is a local Victoria company!
Huge thanks to the HHV community for the fruitful discussion we had on this topic a few months ago, which spurred me to take the plunge.
https://www.juce.ca/
https://www.voipmuch.ca/
We are back to the never ended stats problem of City of Victoria as opposed to greater Victoria.
Reminds me of living in Toronto before the boroughs were amalgamated and you ended up with Toronto having a population of 670,000 but the GTA being close to 4 million.
lets cherry pick the numbers to support whatever we want to argue.
Pretty much this. I’d have to look at what it was in 2013/14 when the market was relatively flat.
Got it. That makes sense. Our mess of municipalities often bites us when it comes to statistics. No one should be using the City of Victoria for any statistics compared to other cities. Always use the CMA
It’s true, but only for Victoria proper (~100,000 pop), not the whole CMA.
ie. Langford would be a much higher percent.
Leo for your second possible explanation is there a typical seasonal pattern to the sale/assessment ratio? Other than the step change when new assessments come out. The theory that some “crap” finally sells in the fall at relatively discounted prices and pulls down the ratio makes some sense.
Probably hard to see a seasonal cycle in the ratio as the market itself is usually rising or falling tending o change the ratio.
Same with Vancouver:
City – 46.9% ownership rate
CMA – 63.6% ownership rate
According to Stats Can community profiles:
City of Victoria – 39.4% ownership rate
Victoria CMA – 62.6% ownership rate
Correct. An owner-occupied house with a suite is two dwellings, one owner-occupied and one renter.
On the other hand a room is not a separate dwelling. If anyone in a dwelling is an owner it’s owner-occupied.
That’s the City of Victoria only. Still surprised? City of Calgary comprises almost all of the metro population.
Looked up the 2016 census and under item 130 ; it appears to be 66% are owner occupied and 34% are renters. I am not sure how houses with suites are handled or people just renting a room in a house. I assume that suites are treated as a separate housing unit.
Nice work Leo. Thanks for this.
From previous:
Before looking into it further, I’ll say it’s garbage data. Home ownership rate is about 66% in Victoria, not 39%. Will look up exact values later.