The politics of housing

Plumwine says: “After months of bitch and whine @ pumpers, REALTOR®, landlords, rich Chinese, dirty Asian, boomers, selfish seniors with big houses, white old men, foreigners non-island people, bogeyman, and now it is not polite to call out a spade. Very adorable”.

For the record, never, ever, did I make the statements of which you attribute to me. Never did I “bitch and whine” at or to pumpers, landlords, any ethnic group, seniors, white old (or young) men, foreigners……..your list is never ending and purse fantasy. It appears that you [Pumwine] and the truth are not even on speaking terms. Never, ever did I make any of those hate-filled comments and you should be ashamed of yourself for even suggesting that. Shame on you !!!!

Gwac – I am not Hawk or anyone else. We sold our home near the top of the cycle because we could. As I stated, it makes no sense to sell and buy in the same market. This market will not be the same in 18 to 24 months. We have every expectation of buying a home again and know the exact neighborhood in which it will be – those areas have already dropped a sizable % since we sold. I don’t expect you to understand because you have displayed such a strong bias and lack of knowledge that it would be fruitless to explain economics to you.

We vacation annually in the Caribbean and whether we sold our home or not, we would be going there again this year. Business is very good, the family is healthy and investment income is accruing for our next home purchase. I am confident that we made the right decision and I am confident that you are making the right decision by not buying now – you speak a good game, but your actions scream the opposite as you refuse to put your money where your mouth is.

The short term future of real estate is never a certainty.

True, but it sure makes it easier now with how bearish everyone is (and that they don’t understand interest rates).

Vancouver is 25% more dense over 12x the land area so that changes the picture somewhat….

Don’t go pointing fingers at the bears – they are the ones who have advised people not to get into this situation.

Hawk and a few others positively drool with anticipation at the thought of folks losing their homes.

Wolf like I said during turbulent times my industry is busier and I owe nothing now so I can assure you I will not be impacted. The damage a 30 to 50% correction would cause to this city and people are not something people really want that have any compassion for their fellow man. People lose jobs… People lose homes. Families struggle. It is not just people who bought in the past couple of years that are impacted. It could be people on here wishing for a crash.. It is the tiler, the plumber, the person who works at the appliance store. The home depot guy.

How am I being prophet. I see a max 10% correction to the benchmark. If its more and something big happens I will take advantage but I do not wish and certainly would not day after day trash the market hoping that a huge crash happens knowing the damage it really causes.

Anyways enjoy. What people say on here has zero impact out there. So why should I care I guess.

The short term future of real estate is never a certainty. Don’t listen to someone who tells you it is.

Vancouver has roughly 7 times the population density of Victoria. I don’t think we’d have any need for that on a wide scale, for the foreseeable future.

Simply not true. The City of Vancouver is only 25% more dense than the City of Victoria.

If Vancouver feels 7x dense, and this is almost always a negative sentiment, then that’s an argument to caring how density is achieved and not just the number. Density is quantitative and qualitative. Cramming people into towers downtown and along arteries while leaving swaths of SFHs doesn’t feel as nice as spreading out people more evenly, which I think Victoria does a better than average job. The City of Victoria is going to keep growing whether you like it or not. If you don’t want it to become Vancouver (full of towers), then upzoning SFHs to gentle density is the only option.

People per square kilometre, Vancouver vs Victoria
City: 5,492.6 vs 4,405.8
Metro: 854.6 vs 528.3

https://www150.statcan.gc.ca/n1/daily-quotidien/170208/t001a-eng.htm
https://www12.statcan.gc.ca/census-recensement/2016/dp-pd/hlt-fst/pd-pl/Table.cfm?Lang=Eng&T=201&S=3&O=D

Neither just someone that does not get off on seeing others suffer to make a buck.

Nobody should make any investment, never mind one at historically high prices and historically low carrying costs, unless they can deal with the consequences of the former going down and the latter going up.

Don’t go pointing fingers at the bears – they are the ones who have advised people not to get into this situation.

Any thoughts on the likelihood that Victoria goes the way of Vancouver by upzoning to duplex and the effect on prices for those properties?

Vancouver has roughly 7 times the population density of Victoria. I don’t think we’d have any need for that on a wide scale, for the foreseeable future.

So that everyone understands a crash will have zero impact on me. My job will actually be busier. I would use the opportunity the buy land. To me it’s not worth it because of the job losses and impact on people. That is my position

modern day Jesus or slimy devil?

Vancouver and Toronto are two of the world’s five largest bubble risks. Interesting data in this:
http://www.visualcapitalist.com/biggest-real-estate-bubbles-2018/

275 Cadillac

710k

205 -1030 Meares St looks like you need to join the Guild of Calamitous Intent before purchasing.

Why not call them Ben and Jeremy? (Ben and Jerry’s, perhaps.)

Why do I refer to Madoff as Madoff instead of Pam? I don’t think it is gender based.

I’ll call Elon Elon (Elon Musk that is) and Trump Trump. I think Elon is a genius and Trump is an absolute moron piece of crap human being. First or last name is not a gender or respect type thing for me.

Personally, irrelevant of where I am in life I hope people keep referring to me as Marko (I also accepted Marlo, Mario, Marco, Mark, Marc)…….Juras would just make me feel old and stale.

All those promises from the federal liberals about green infrastructure spending. This would be perfect but not a peep.

The federal Liberals made a lot of promises.

Picked up the missus from YYZ after she successfully secured an apartment. Never a fun drive. I’m thankful today to be leaving behind this province with its awful infrastructure and embracing the island lifestyle

Welcome, future “local buyer” (as the VREB will classify you), who didn’t bring any money from elsewhere to purchase here!

Remember when Lisa and the city came out and…

Lisa.

Isitt and Loveday not sure if they would be employable at Walmart with the logic they present

Why not call them Ben and Jeremy? (Ben and Jerry’s, perhaps.)

Lisa in relation to others is actually not too bad.

And again.

So, we sold – you will find this difficult to understand but there is no gamble.

No gamble, eh?

so, we invested the funds … because what is taking place in the market was foreseeable.

And… here we have the gamble.

Thanks for having let me be a part of it, LeoS.

Leo let’s everyone be a part of it, so you’re welcome, I guess.

Personal insults are over the line yes but you threw it up here so it’s of course going to be torn apart and debated.

It should be, and is, open season for anything that anyone posts on HHV. Can’t handle the heat? Stay out of the kitchen.

Plus, we’re all anonymous here (and those who aren’t made that choice), so we don’t need to light our hair on fire at the occasional personal remark or instance of rudeness, IMO.

Stay well, all. This has been an interesting place to spend some time. Thanks for having let me be a part of it, LeoS.

Why leave? The people that hurled insults at you tend to speak that way almost every time they post. If it wasn’t you it would be someone else, if it wasn’t for the “I sold my house” reason, there’d be another reason…

Bah! Don’t say goodbye. Personal insults are over the line yes but you threw it up here so it’s of course going to be torn apart and debated. It is a controversial concept and It’s the internet.

@Victhunter

“There are now houses in good condition that are starting to show cash flow if you were to rent them out and not use a property manager (ie don’t value your time or opportunity cost and ignore depreciation/maintenance costs). Things are looking up and maybe the name calling will stop on here :).”

Can you show some examples? I haven’t seen anything cash flow positive except the odd places that has been converted into 3-4 suites and even those didnt always make sense.

No way around it, parking minimums are forced purchases. Impractical and silly to push stratas into business of selling public parking. Let the free market do it as Marko said.

Driving/parking downtown is only going to get less convenient. Sooner you accept that, sooner you can embrace alternatives. Oxford really impressed me with how they solved this problem. They’ve pedestrianized their core but have park and ride lots all around the city. Frequent buses shuttle people every few minutes from the parking lots into the core. The core was bustling and carefree, really lovely city and magical experience.

anonymous vitriol on social media.

+1, plus for the council positions the pay sucks. Anyone that can hold a pencil and has some common sense probably can’t afford or doesn’t have time run for council.

I’ve watched a lot of the meetings online in the last 12 months and they are painful to watch. Most of the council members don’t comprehend simple law, economic, design, etc., concepts. The old guy with the PHD in economics in Harvard or whatever starts arguments with “I bought a house in 1970 in James Bay for $11,000,” and then talks in a circle. That is great that you bought a house for $11,000 but no way relevant to the rental building the developer is proposing. Isitt and Loveday not sure if they would be employable at Walmart with the logic they present (no offense to anyone working at Walmart).

Lisa in relation to others is actually not too bad. I am not down with all of her policies but looking at the crop of other poor candidates I would probably vote for her again.

Re parking why can’t the free market dictate how much parking is required in new condo developments? My tenants at 834 Johnson and Promontory both don’t have cars. They work downtown and one of them uses Modo from time to time. It is 100% doable.

Just one rezoning she spearheaded to approval in Cook Street Village saw the destruction of about 20 affordable housing units which were replaced by 50 luxury units.

How are 50 wood-framed minimum building code rental units “luxury units?” This project was super super contentious but I wouldn’t call it luxury. It is basically a Langford wood-framed box in a nice location.

Oddly enough, a true luxury building (concrete condo @ $1,000 sq/ft) two blocks away on Heywood not one peep from the public and passed no problem.

QT, you get what you build for. I only got my license and bought a car after university. Lived downtown in my city (pop ~150k), got a job downtown next city over (pop ~350k), separated by only 20km. Lived and worked just a few minutes walk from two central train stations. Well, the boomers stopped running the trains in the 90s and the bus service was almost nonexistent (technically there’s a bus that gets you in after rushhour). Moving wasn’t an option since my partner was in school locally. I had no choice but to buy a car.

That article wasn’t about student housing in the sense of provided by the universities. Just a neighbourhood sandwiched between two universities where lots of students want to live. See, not everyone needs a car, for example students, and yet the parking minimums still applied. So the developers found workarounds by building 5 bedroom apartments (which is absurd).

Forcing people to buy parking is halfway to forcing them to buy a car. Housing in or near the downtown means you don’t need to drive downtown, so that TC article about parking drying up for suburbanites is not relevant.

In essence, we need to build the infrastructure first. Otherwise we are always in the makeup game. We have it before our very eyes. The E&N.

Yup. The province and the feds need to pony up some money to at least get the tracks from Langford to Vic West fixed, so that we can get some sort of passenger trains going.

The E&N goes right through Westhills for god’s sake! How great would it be if you lived in Westhills and worked downtown?

The Vic West terminus would be no big deal; the 5-minute walk across the new Johnson St bridge is a delight. If it’s raining, bring an umbrella. People in Seattle make umbrellas work. It’s possible.

After trains from Langford to Vic West get going, we could upgrade the rest of the E&N section by section over 5-10 years, eventually using it for passengers and freight.

Amalgamation will only happen if somehow forced by the provincial government.

Let me ask you a question here. If your old street were safe due to park cars that rendered it into a single lane, then why would it need speed humps?

Are you arguing that combining two solutions cannot result in an even better one? There are many strategies for traffic calming and often it takes more than one to get best results. In winter parking is forbidden overnight on the street, so people tended to move their cars onto the other side streets; the humps were he only protection in winter besides bad weather. The street in question was parallel to the main street and I presume had problems with rat runners before the speed humps were in place.

Perhaps it give you the sense of safety, however from my personal experience it is not because a neighbor/family friend lost their son who crossed the street with his sister (an inexperienced teen drove around parked cars that obstructed his view, whom collided his car front end into a 6 year old boy and smeared his brain all over the road).

That sad and disturbing anecdote doesn’t make a statistic proving your argument. Inexperienced and careless drivers can take their cars to any street. Traffic calming is never 100% effective. I’ve been the victim of two careless drivers smashing into me in my parents’ neighbourhood, where the roads are wide, people fill up their 4-car driveways, and there’s no speed humps. Kids play road hockey on my old street. No one dares linger on my parents’.

I’ll refer back to an article I posted earlier, it touches on the benefits of lower parking minimums.
https://medium.com/@m_druker/how-a-waterloo-suburban-neighbourhood-is-becoming-urban-804042c32a3e

Crucially, the parking requirements are low. Generally in Waterloo, the city — like most others in North America — requires at least 1.0–1.5 parking spots per new residential unit constructed. And that had been the case for the student housing being built along the edge of Northdale, where developers reduced the parking costs (among other things) by putting 5 bedrooms in each unit. With the proximity of the universities, even this low amount of parking wasn’t all needed. The new Northdale plan roughly maintained this ratio but on a per-bedroom unit, resulting in a requirement of 0.25 parking spots per bedroom.

250 Lester St — replaced two houses
Low parking requirements mean small-lot redevelopment is feasible. One project on Lester Street (pictured) replaced two detached houses with a 12 storey tower (4 storey podium) containing 1 retail unit and 80 bedrooms across 1- and 2-bedroom units. All of the required parking fits at grade, behind the building and in lieu of some of the first floor. I doubt underground parking would have been possible in that small a lot.

Mayfair man

I agree that there needs to be some parking, but providing parking is very expensive.

IMHO, it is part of doing business is to make sure that a resident is safe and have adequate parking. If we going to cut costs then we could one day delete sprinkler systems and fire alarms, because it increase construction costs that unlikely to ever have a fire.

http://www.edmontonjournal.com/living+small+parking+critical+condo+projects/10811766/story.html

In Calgary, a developer has made headlines for pitching a condo tower without offering parking stalls to residents. It’s a relatively rare proposal in Canada.

“I would say that 100 per cent of my clients need parking,” said Jakie Ng, a realtor with Re/Max River City in Edmonton.

The number of clients who don’t need a stall is “very, very small,” Ng said. The lack of a parking stall becomes an issue when that client wants to sell the unit — few people will want to buy it without a stall.

Ng thinks the situation may change in Edmonton when condo prices get so high that people may consider shaving $30,000 off the cost of their home to get into the building they want, even without parking.

wo

Street parking makes residential streets safer by calming traffic. My old street was very safe because, in addition to speed humps, the on-street parking made it impossible for opposing cars to pass each other. People drove slowly and were alert at all times.

Let me ask you a question here. If your old street were safe due to park cars that rendered it into a single lane, then why would it need speed humps?

Perhaps it give you the sense of safety, however from my personal experience it is not because a neighbor/family friend lost their son who crossed the street with his sister (an inexperienced teen drove around parked cars that obstructed his view, whom collided his car front end into a 6 year old boy and smeared his brain all over the road).

I despise NIMBYism, but I must agree with parking issue. With out adequate parking the street will be unsafe because it will be clog with cars parking on roadside.

Street parking makes residential streets safer by calming traffic. My old street was very safe because, in addition to speed humps, the on-street parking made it impossible for opposing cars to pass each other. People drove slowly and were alert at all times.

Forcing people to buy underground parking can increase costs up to ~10% and discourages people going car-free. Pushing more people into more cars makes streets unsafe.

Lisa Helps seems okay to me. It must be ridiculously hard to be an elected official these days subject to such a mountain of anonymous vitriol on social media.

Doubly hard as a woman. Women receive more verbal abuse, online and off, not to mention far more death threats.

Over the years, I’ve also noticed the subtle disrespect many talk radio callers pay Mayor Helps when they refer to her as “Lisa.” Just Lisa. No last name. No title.

Don’t recall Dean Fortin being called simply “Dean” in public discourse very much. Don’t hear many calling Richard Atwell “Richard,” in the same belittling way.

High risk, high reward.

I’m more of a low risk/medium-high reward kind of person.

I certainly don’t understand the hate at someone stating what their plan is and that they have put their money where their mouth is. Are we not all free to make our own bets?
Bizarre all the name calling at someone exercising their right to do what they wish with their investments.

Leo, worried people are going to name-call you when you buy that speculative investment property someday? 😉

Mayfair man

a few mixed projects(low income/affordable) that were shut down by NIMBY groups for having lack of parking and what they wanted made the projects unfeasible.

I despise NIMBYism, but I must agree with parking issue. With out adequate parking the street will be unsafe because it will be clog with cars parking on roadside.

Leo S

I certainly don’t understand the hate at someone stating what their plan is and that they have put their money where their mouth is. Are we not all free to make our own bets?
Bizarre all the name calling at someone exercising their right to do what they wish with their investments.

Kudos to those who make the best out of their investment. However, I have a problem with those that spew blames and hatred of others (Asian/foreigners) for driving up RE price, and then brags about how they made money from the artificial run up that was caused by the dirty Asian money.

Geez bored??? I guess maybe. I do enjoy myself here though. Can’t have only bashers here dominating. 🙂

I’m certainly not a fan of RE speculators, but they’re not the devil. There’s an argument to be made for the calming effect that shorters have on a market. If they sell when they think it’s too high and buy when they think it’s too low, they help stop the market from over-inflating and save it when it’s crashing. Entirely theoretical though – as we know, timing the market perfectly is something almost no one does successfully. Most RE pumpers hurt on the way up, but help on the way down, and are often their own worst enemy.

Affordable housing and luxury housing are arbitrary terms. What is adorable to me may be luxury for someone else. There have been lots and lots of affordable housing added with this counsel. There are many duel income earners that have regular jobs that have household income over $100k. Now if you are talking low income housing that is a different story. That comes at the hands of the federal and provincial government through special loans and cofunding. Also I know of a few mixed projects(low income/affordable) that were shut down by NIMBY groups for having lack of parking and what they wanted made the projects unfeasible.

Also I am hearing complaints about affordable housing from people in luxury areas who are against rezoning. I’m sure if they allowed a high rises in Fairfield they could make it affordable, but the people there complaining about affordable housing wouldn’t be for that kind afforability.

I’m not a fan of gambling the family home in anticipation of falling prices and then buying again after prices decline; however, VictoriaBorn has a good strategy that will probably work out well for him. He sold at the peak in 2017, so he likely sold for top dollar; he can now invest his cash in a high interest savings and get at least 3% risk free, and his goal seems to be to re-purchase a luxury home in a couple years. Luxury homes are currently declining fast in popularity and in price. So, with patience and cash, VictoriaBorn has a high probability of success with his plan. His plan is focused on a narrow segment of the market and if luxury RE repeats past performance, then places like Uplands will decline faster, in terms of both speed and %decline, than the middle market. Too much anxiety for me, but VB seems comfortable with his plans.

I think 2017 was probably the best time to sell. But I think the pot odds are terrible trying to time selling your home to buy back in at a lower price later. You are rolling the dice with your family life, your home, your financial foundation for a maximum gain of what? Outside of the financial theory this is not a simple transaction of buying back what you sold. Inflation is working against you especially with construction costs. So buying something that needs work five years from now is going to cost a lot more to fix up. They won’t be building a lot of SFHs anymore either. It’s now townhouses. Plus the political pressure is there to upzone the core so that alone will push prices of SFHs up. You have no idea what the climate is to create the crash needed to make this move worth it. It would not be worth the remote possibility of even making a few hundred thousand to suffer the constant looking at the market, hoping for the chance to be right and win big but never quite getting there all the while rent is eating your cash, the stock market is deflating your investments and inflation is draining your reserve at ever increasing amounts but you can’t bring yourself to buy back in at a loss because you fear that will be the point the market crashes etc etc….

I can’t wish you luck because I can’t wish for a 30% or more crash due to whatever else that means. I can only wish for wage inflation which will make houses imore affordable but not cheaper….

Lisa Helps seems okay to me. It must be ridiculously hard to be an elected official these days subject to such a mountain of anonymous vitriol on social media. Going to be harder and harder to find reasonable, skilled people to run for these positions as a result imo. We are going to be left with those with personality disorders who are immunized from this by internal dysfunction. This generally is not conducive to great decision making. Also, council makes decisions by quorum. Means if u r unhappy with a decision blame the majority of council – not one person. Scapegoating needs to be called out more.

Anna said: “Lisa Helps appears to help developers to build luxury housing. Where is all the affordable housing?”

Lisa approved many rezoning applications from large contractors which allowed the demolition of affordable housing which was replaced with luxury condos for the upper middle class purchasers. Just one rezoning she spearheaded to approval in Cook Street Village saw the destruction of about 20 affordable housing units which were replaced by 50 luxury units. Many other examples from Lisa over the past four years of affordable housing being demolished and replaced with luxury units. Meanwhile she has not built any affordable housing projects.

LeoS said: “Construction employed 17,700 in Greater Victoria in September, up from 14,500 in the same month last year.”

LeoS, is there any way to correlate the occupations of purchasers with the huge rise in construction jobs in the last 6 years? For example, are construction workers buying real estate at a higher rate now than in 2012? Is there a trend? Anecdotally I’ve seen and heard there is a trend, but I haven’t seen anything definitive.

For every construction job there is at least one job in the construction related industry; lumber yards, plumbing wholesalers, cabinet millwork shops, etc

When the construction boom is over, I know a couple families that will have trouble making mortgage payments, I wonder if it’s a widespread situation.

quite sobering in terms of how rapidly the market is correcting on the mainland given big macro economic/regulatory factors.

What’s to hate? People can come to this knowledge by their own willingness to look at what’s going on in the world around them, or they can come to it by force of circumstance. One of the things I’m sure you’ve realized is, none of the basic premises are complicated at all. All credit rolls in cycles. All RE rolls in cycles. Things that enter disequilibrium continue on that path until it becomes mathematically and/or circumstantially impossible for it to go on. The only points of controversy are precisely when, how much, and over how long a period of time the change will be. Then we do it all over again.

We love to polarize via this silly “bears and bulls” division, but it’s really about to what extent and how you apply your own logic models and perceptions to what you see happening around you. There’s a reason in your mind you’re feeling a need for caution today, and it’s not like that’s going to be, or should be, some kind of permanent position.

))) I too was a long time owner and bull. Mid-2017, I happily sold and pocketed a great return.

Day trading your family home. Not for me thanks.

VB tl/dr

I see that Steve is seeing the same for Vancouver:

https://www.youtube.com/watch?v=iCoJ78LLg-s

So much for the “the owner of the multi-million dollar Vancouver home will sell easily and bring that buying power to Victoria and pump up the prices and still have a few million dollars left to retire on” dream. It certainly was a factor – but that is over now.

Alice Kluge’s latest video is also a sober look at what is happening in Victoria.

Gwac – so much for “taking the weekend off”. Throw those insults around like they are going out of style [the Gwhack-attack, as I call it]. Enjoy. I am immune because the facts and laws of economics support me, but not you, and the facts that you can’t understand what is going on is really the foundation for your angst. Not speculating and not investing – that was the time to sell and this is not the time to buy. I am not trashing the market – the market is a beautiful thing to watch right now – the leaves are falling off of it and the owners are de-listing all at the same time with the same strategy of re-listing in the Spring – all at the same time. It truly is a beautiful thing. Between now and then the only thing that will be pumped is the mortgage rate making is even more difficult for a buyer who did not save to take advantage. Mortgage growth is so impotent right now that one is hard pressed to see how it could revive when the coupon rate is 100 to 200 basis points higher [plus the 200 basis point stress test] in the Spring. However, I believe that we are 12 to 18 months [perhaps even 24 months] away from the next entry point.

Things I am looking at are mortgage growth, the bond market warning us of impending inflation, listings compared to historical averages, sales as a % of new listings [as you can see, I am most interested in the demand / supply disequilibrium], absence or growth of foreign buying, the introduction of the full speculator’s tax, the deflation of in the ridiculous property tax assessments (which is a lagging indicator and we won’t see the full effect until mid-2020), just to name a few. As long as the NDP’s housing affordability measures stay in place and household debt stays elevated, the Dominoes are lined up.

Again, I was a bull 18 months ago, but not now. I am not speculating. I speak only for me: this is not the time to be buying. This is the time to be saving and raising cash. Yes, I am a joke – hope that makes you feel better. If not, just reach for the soother. Teething can be annoying and cause one to lash out. The rest of us are just not worthy of your eloquence.

Plumwine – nice language on a family friendly site. Tsk, tsk – what would your mom think? You don’t know when I bought or my circumstances for selling. It was, personally, the right time for me and my family. We have no regrets. Yes, I am 100% to blame for the RE bubble. Feel better? At least you have acknowledged that it is a bubble and admitting it is the first step to recovery.

I agree with you Josh. Hawk – yes, the bond market dwarf’s the stock market, and that is where mortgage rates are set, so watch the yields and the yield curve. LF, my friend, this is not my first rodeo – I am confident that I got this and have put my money where my mouth is. If you are a bull, like Gwac, buy everything in sight. I get the concrete sense, from reading your posts, LF, that you are far, far smarter and intelligent than that and you see that the foundation of this bubble, as I do, is frail, weak and illusory. The Victoria luxury market has already dropped more than 10% [look at 3190 Norfolk Road – listed for $4.3M in late 2016, assessed at $3.5M in 2017, sold for under 2.9M, just as an example]. I have over a dozen examples.

“Houses aren’t meant to be played with in this manner, you can only really do that in a bubble and even then it’s extremely dangerous. I’d never do it. Once I’m in, I’m in. Forget the RE market after that”. We are in a bubble, LF. That’s the point. Now, it is the supply and demand fundamentals at play using local incomes, massive debt, bond market fretting and regulations designed to pierce the bubble.

We are all entitled to our opinions and are just sharing them on the Board. But we are not entitled to our own facts – the data are the facts. I just don’t see the need to insult and use profanity. It is just beneath me.

Stay well, everyone. Be Thankful, I am.

Hoping to rinse and repeat, flip flop both sides, move into luxury market.

I continue to think it’s a horrible idea to dump your primary hoping to buy back in later, cheaper. If it was sold a year ago it was probably timed well, but you have to also have buy back in at the right time too. Much harder to do than you think. Knowing a RE cycle is very helpful, but it doesn’t usually let you play a game like this.

Plus, you’d need quite a substantial drop over a relatively short period of time to make it worth it. If it drops 10% over a year, then it’s a complete waste. Even if it was more than 10%, it would just be excess stress for very little potential gain unless you get a once-every-other-generation-crash on top of your perfect timing.

Houses aren’t meant to be played with in this manner, you can only really do that in a bubble and even then it’s extremely dangerous. I’d never do it. Once I’m in, I’m in. Forget the RE market after that.

Michael: “The actual Vancouver detached avg price is essentially flat y/y (1,666,284 last year is now 1,629,896)”
I was checking your link and I don’t see any reference to average price at all.

It’s in the ‘click here’ stats at the bottom. Here’s the direct links:
https://www.rebgv.org/sites/default/files/REBGV-Stats-Pkg-September-2018.pdf
https://www.rebgv.org/sites/default/files/REBGV-Stats-Package-September-2017.pdf

Easiest to scroll to the end of the pdf and you’ll see the prices on the graph.

Happy fall and thanksgiving everyone. Little picture from my morning stroll today…

Michael: “The actual Vancouver detached avg price is essentially flat y/y.
(1,666,284 last year is now 1,629,896)”
<<<<<<<<<<<<<<<<<<<<<<<<

Hey buds, I was checking your link and I don't see any reference to average price at all. Here are the benchmark prices though.

https://www.rebgv.org/monthly-reports/september-2017
"The benchmark price for detached properties is $1,617,300. This represents a 2.9 per cent increase from September 2016 and a 0.1 per cent increase compared to August 2017."

https://www.rebgv.org/monthly-reports/september-2018
The benchmark price for detached properties is $1,540,900. This represents a 4.5 per cent decrease from September 2017 and a 3.4 per cent decrease over the last three months

Gwac just can’t quit ya. What a way to spend your whole Friday and now Saturday defending the bubble. Wake up dude, money is leaving real estate by the billions. The party was over a year ago.

The bond market is worth multiples to the stock market and the former is saying inflation and risk to lend is going much higher. Over valuations of everything needs a major reset. The references to 1981 is in all the major financial news the past week.

Canadian Bonds Join Rout, Poised to Underperform as Rates Jump

“Investors in Canada’s C$700 billion ($540 billion) government debt market are bracing for additional losses, possibly outpacing U.S. declines, as Bank of Canada Governor Stephen Poloz gears up for several rate increases over the next year.”

https://www.bloomberg.com/news/articles/2018-10-04/canadian-bonds-join-rout-poised-to-underperform-as-rates-jump?srnd=premium-canada

Victoria Born is another house speculator on here trashing the market in order to make their mistake look less stupid

No credibility my little trasher. What a joke you are.

Back to fishing

Interesting hearing Alice Kluge talking about how disconnected home prices are from incomes in Victoria

https://www.youtube.com/watch?v=j7xfYq-8E44

Victoria Born, kudos for taking the money. I hope that bold move pans out for you. What’s your strategy for re-entering the market? Are you holding out for a particular % drop? Or you’re just waiting to see who’s desperate to sell as 2020 plays out?

Victoria Born,

Yep.

I too was a long time owner and bull. Mid-2017, I happily sold and pocketed a great return. Why 2017? Come’on, look back with your unbiased eye and you will see that this bubble was just past the peak which I submit happened in early 2017. No chance that local incomes supported those prices, then and now. Low interest rates and foreign money pumped this up – remove that and sales fall 25% in Victoria – 43% in Vancouver. A foreign buyer came along and, like many here, had that “blue sky” investment feeling. It has been almost 18 months, and everything is falling in to place. This is not my first rodeo.

“My head is exactly where reality is”. If you spend the time and do your homework, you will see what is really happening instead of sitting on your head. As we write, mortgage rates rose this past week because of macro events [the US 10 year treasury topped 3.2%] – some 84 lenders across the country hiked lending rates.

I have been very interested in the luxury market for RE in Victoria as a guide for the rest of the market. The reasons are simple and the cracks are more than visible. Some talk a lot, others stand by their convictions. This credit cycle really is the key to unlocking this and understanding what has happened and where we are going. Once you realize that, you will see that it is unsustainable. Cheap money brought us here and liquidity is drying up [evaporating] – the rest is just noise. This bear is ready for hibernation.

These tax assessment values are a mirage – built on quicksand. The government has loved it as they have collected huge tax revenues rising every year for the past 5+. Well, we pragmatists know that is over. But, homeowners smiled along the way (as I did, but I knew I was hitting the eject button) thinking this was a never ending path to wealth. Nope. I am prepared to be proven wrong, but the data does not lie. The drop in sales volumes is the first step. Then sellers take their homes off the market thinking this is just seasonal and better times are ahead (spring) – a mere blip. But that is what they all think and listings drop. So, come spring they all list again, along with the normal spring sellers – supply outstrips already declining demand. This disequilibrium results in an increased pace of falling prices. This is simple economics: price on the Y axis and quantity on the X axis. The supply curve (positive slope) shifts to the right and the demand curve (negative slope) shifts to the left. The mathematical result is falling prices. This is exacerbated by higher mortgage rates, the stress test, speculation tax, school tax and all of thees wonderful affordability measures that are designed to achieve this result.

Sure, I could be wrong, but I placed my bet and this is playing out just as I had hoped. Maybe this is a “V” pattern and the rocket ship is about to take off. If so, where is the fuel? The tank is empty and the refueling trailer is likewise empty.

I spoke too soon – the floor is cracking. Little 615 Moss St dropped to $950k overnight. Original $1.024m, assessed $1.069m. Already more than 10% below assessed.

I Can set it up to only show price changes if you like. Not that that will tell you a lot

Hmm don’t bother if I lose the existing functionality, thanks. Since I’m only interested in a small region it’s fine the way it is.

I have noticed some drops recently. It’s interesting that sellers in Fairfield seem to have a psychological floor. “Best buy in Fairfield” 59 Moss at $999,999 was taken off the market this week. There’s now 4 other SFH just under a million, but one has a suite. I’d think the others need to drop to be competitive. But surely Fairfield commands a million, no?! /s

I will be taking the weekend off. Bears you all have fun. Let’s find as many nonsense articles as possible, maybe some price slashes and whatever else feeds your fantasy/dilusion of the big crash. Lol

That was some imposter posting about the 25 percent decline in Vancouver.

Wolf if it’s already happened. I guess VREB numbers are wrong and yours is obviously right. 🙂

Another bear talking out of his ass. Wow you guys are really on a roll this week.

Just checked my PCS – price drop frenzy in Victoria this week – WOW. Where have all those buyers gone? Part-time job growth gains [$16 per hour], immigration at record levels and yet buyers are passing up an opportunity to bag gains of 40% to 50% in short order as someone just posted here today [as he sits on his or her wallet / purse]. The informed buyer reads, watches and listens: the credit cycle is dictating all of this and I subscribe to the view that people will make very different decisions when fully informed by knowing what took place from 2008 to 2015, and 2015 to the end of 2017. There are a number of important factors such as interest rates, foreign money flows, money laundering, stagnating wage growth (local domestic incomes do not support these prices), lack of monetary liquidity and the massive amount of new regulation aimed at moderating [deflating] this asset bubble. Too much household debt – people could not resist.

I do not see a soft-landing with this bubble, though – too many sharp objects to navigate and the Lion (Vancouver) has already succumbed. May be Victoria is so special that it will sidestep the laws of economics – yeah right, LOL – it appears to have already begun with rising listings vs sales, rising active listings and falling sales. I was a hard charging RE bull until early to mid-2017, but that was then, and this is now. 2016 was the year of out-sized euphoria. Times, they are a chang’in and it is right in front of your eyes, particularly with SFH.

“Wise words. 20-25% correction locked”

Nothing is locked except you guys being wrong for so many year.

Some kind of decline seems like a virtual lock to me at this point, but I’d advise against waiting for an epic 60% correction.

Wise words. 20-25% correction locked.

Just for clarification…

A 40% drop in core prices for SFH would take us back to the selling prices in the spring and summer of 2015.

I doubt we will see a 40% drop, but on the other hand, I would not be shocked or surprised either.

You could zone all of Fairfiled for high rises and you wouldn’t see it happen for 100 years.

I don’t buy that. I am NOT advocating this for any neighbourhood in Victoria, but here’s what happened when a SFH student ghetto in Waterloo was upzoned for high rises a few years ago (spoiler: many high rises were built very quickly, and continue to be built): https://medium.com/@m_druker/how-a-waterloo-suburban-neighbourhood-is-becoming-urban-804042c32a3e

I never said indefinitely. I said not in our lifetimes. I’m simply stating what is.

I missed your earlier comment. I was responding to this: “The neighbourhoods in Victoria are established so it’s pure fantasy to think about them turning into European style row house villages.”

I agree it would take decades to transform a neighbourhood if that was the goal.

Since we are Strawmaning here, wo, Are you proposing we go China style and the government displaces everyone in Fairlfield to rebuild it?

What? I think you misunderstood my motives.

I think Fairfield would be amazing as a Netherlands style neighbourhood. It is perfectly suited to that by it’s location alone. I lived in one so I know. But It’s not that. And to get there would take multiple generations. However, Large areas that are not established, that would be a ten minute tram ride to town could be developed within a decade. THAT would help people reading now…..

I have also stated many times in the past I am for upzoning these areas to at least to actually reflect what is and make it more democratic instead of this constant spot zoning. But, that wasn’t under any pretence of solving the housing crisis….

Where did I say the housing crisis would be solved by turning Fairfield into a “Netherlands style neighbourhood”? A row house in Fairfield is going to be expensive, likely towards the upper middle class. That’s why I support diverse housing options, such as small multi-unit buildings as well. And I think it’s a good idea to build rail corridors. You can do both.

For those of us in Victoria, this website does an excellent job summarizing the platforms for mayoral, council, and (soon to come) school board trustee candidates. Seems about as impartial as it gets, and really helpful that someone else did the legwork to gather all this information: http://www.victoriavotes.org/

“Josh – you raise a good point and I noticed that many threads ago. But keep in mind that his / her comments are not based on any analysis of the data, market or economics. It is a self-serving, self-back-patting, and self-congratulatory dance. Do your own analysis and follow the data – the Vancouver market is telling us exactly what is to come”

I will explain again. I would be happy to see a crash so I could pick up so more land. Unfortunately I do not see that happening…My real estate is not a flip or piggy bank. It is something to pass down to my kids.

You think you have identified all the variables that impact the Victoria housing market and now you are proclaiming a crash. LOL you are not the first and will not be the last to have no clue about the Victoria market and what drives pricing.

Anyone can extrapolate data for ones wish/fantasy does not make it right. LOL

I own real estate and became interested from one comment made in University by my professor. Buy as much real estate as you can afford because they are not making any more of it. No deep analysis just that.

Please let me know how I should rebut the crash calls of 40/50 and 70 %.

Okay. Yes when I see those numbers I might go “oh, impossible”. But why? Because I can’t imagine it happening? Because it hasn’t happened in a long time? Because some entity wouldn’t “allow” that to happen? Because it would be “too devastating”? Because it’s just the musing of some angry renter?

When you actually deconstruct those logic models, you find they’re quite weak in terms of their ability to disprove arguments calling for a larger retrenchment, even if maybe some or more of those rebuttals above could be true.

I don’t think it’s all mental disorder. It’s truly a sobering thought to realize that a 40% reduction in prices would still see houses here well above the national average (minus Tor and Van). While I wouldn’t expect to see it go that far here, that’s only because of the above reasons, which as I said, aren’t really good reasons. I remember when I heard “80% drops” in Vancouver, I actually thought that was funny.

But even that isn’t as crazy as it sounds. Some homes there were flipped more than once a year at a million dollars each time, to the point where a 1 million dollar home was goosed to 8 million in about 4 years. That’s definitely the exception, but in some cases, an 80% drop would actually just take them back to several years ago. It truly is that nuts out there, something that I think a lot of people just don’t realize.

I would be surprised if we saw a 40% retrenchment, but I wouldn’t be shocked. I definitely think it’s within the realm of possibility, remote or otherwise. The only thing a buyer can do is follow the data, and buy when they can do so without undo financial risk and/or lifestyle impairment.

What is realistically going to happen because of our population growth/cost of building and Job growth is a slow down of 5 to 10%. Than we will go up another 30 to 40%.

To me, that is about as likely as a 60% price fall in Victoria. Is your scenario possible? Yes. But Canada desperately needs to experience a deleveraging first, before we go up again. A 40% climb from a 10% drop is not only directly implying that affordability today isn’t an issue – but that homes here are actually seriously undervalued. I don’t think that’s a supportable contention.

The neighbourhoods in Victoria are established so it’s pure fantasy to think about them turning into European style row house villages.

Most people in the City of Victoria don’t own SFHs. The balance of power of SFH owners decreases as more people live in denser forms of housing. It’s pure fantasy to think the SFH NIMBYs will hold off redevelopment indefinitely.

Or maybe its pure politics and classic lobbying by the dev community. Ahk! there goes my skepticism flaring up again!

What a bizarre thing to say.

My last neighbourhood in Ontario was “established” in late 19th/early 20th century, bordering the downtown core. It hasn’t seen development in ages. Because family units are smaller, fewer people live in the SFH than used to (my house used to have 8 people in the 1940s; 2010s it was just us 2). The result is nearly zero amenities on the main street that would have once been a bustling “village”. No grocery store, no restaurants, no retail, just a single café and bakery.

My neighbourhood had so much more potential but the vibrancy was sucked out of it by not being allowed to rebuild itself for the 21st century. I’d have loved to see new developments – townhomes, small apartments, etc – I’d have benefited by having more amenities. Many of my neighbours were elderly, reclusive, absent, that the place felt like a ghost town. I’d have welcomed more people.

Is that so hard to believe? No I am not being paid by any developer.

Josh what I want is not important vs what is happening. I would like the market to crash so I can pick up a Cowichan farm cheap. What is realistically going to happen because of our population growth/cost of building and Job growth is a slow down of 5 to 10%. Than we will go up another 30 to 40%. Do not confuse what I want vs what I think the market is going to do. Blame immigration blame the fact everyone wants to live in the same places….

This is why I say turn your gaze to the West Shore. There are still some blank slates there. The neighbourhoods in Victoria are established so it’s pure fantasy to think about them turning into European style row house villages. Or maybe its pure politics and classic lobbying by the dev community. Ahk! there goes my skepticism flaring up again!
For instance, here is what Station ave is and what it could be….

missing middle is exactly the problem. However, eying the established neighbourhoods is piecemeal and way to lengthy to be any sort of solution in our lifetimes. That was the mistake of early planning and now organic growth will evolve these areas. Even if they are up zoned it’s not like they will transform in even 50 years. Look at the Railyards. That was vacant land and it’s more than 15 years later and it’s not done yet. There are huge tracks of land alongside the E&N that could be built into new neighbourhoods with a Tram link and protected bike path into town. The right away exists, the crossings have all been upgraded and there are no established neighbourhoods in the way…. focus on that if we truly want affordable family housing and transportation….

Here Local

I will keep it short. Here is reality… no 30 or 40 or 70% crash. Interest rates are up a percent or more. My so called rhetoric is based on here and now stats and how the Victoria market has behaved in the past 30 or so years during slow downs.

“The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in September 2017 was $832,000, while the benchmark value for the same home in September 2018 increased by 6.2 per cent to $883,700, slightly lower than August’s value of $888,300. The MLS® HPI benchmark value for a condominium in the Victoria Core area in September 2017 was $457,700, while the benchmark value for the same condominium in September 2018 increased by 9.9 per cent to $503,000, exactly the same as August’s value”

Please let me know how I should rebut the crash calls of 40/50 and 70 %. Other than saying that person has lost their mind and needs to deal in reality.

This may (or may not) be helpful for voters in Saanich:

……………….

Colin Plant: Can you guess why grandmothers adore me?

Cory Montgomery: My favourite food is meat, and I love business.

Karen Harper: My hair is insane but my policy positions aren’t.

Shawn Newby: I look like a steroidal Marko Juras.

Judy Brownoff: I miss Frank Leonard.

Susan Brice: Me too.

Rob Wickson: No one could be more avuncular than me.

Fred Haynes: I have a doctorate and a British accent. Do not eff with me.

Richard Atwell: I became mayor to meet chicks, and I want to continue.

David Shebib: I still haven’t found the correct meds.

Kathleen Burton: I think Richard Atwell is trying to date me.

Natalie Chambers: I’m a farmer who really, really loves food.

Ned Taylor: Ever since I was five, I’ve wanted to be on council.

Zac de Vries: I believe in people and in the colour purple.

Teale Phelps Bondaroff: Three names, bitches!

Rebecca Mersereau: I’m the female version of Ned Taylor but 15 years older.

Benjamin Allan: I anticipate receiving votes only from friends and family.

Trevor Barry: Me too.

Vernon Lord: I don’t know how to employ semicolons correctly thus have lost Introvert’s confidence.

Art Pollard: I’m so unremarkable that Introvert had trouble with this one.

Ian Jessop: I’m a sharp guy. Did you know that vaccines cause autism?

Rishi Sharma: I’m running to add some colour to council because Atwell’s perma-tan doesn’t count.

More reality

A good partnership with good policies on resale and qualifications sold out…Lets see more of this.

https://victoria.citified.ca/news/bc-housing-backed-vivid-at-the-yates-condominium-in-downtown-victoria-reaches-sold-out-status/

“Chard’s partnership with BC Housing was an immediate success with dozens of first-time and lower income-earners signing on as purchasers during Vivid’s initial sales launch and dozens more signing on in the months to come.

Company officials uphold the partnership with BC Housing as a novel approach to helping individuals enter highly valued real-estate markets like Victoria’s, and they see more opportunities for pursuing similar arrangements in the future.”

Some people look for crashes others look for opportunity to get in…

Thirdly, you forgot about income taxes, EI and CPP [all three of those statutory deductions rise as you earn more] – best to deduct 4 0% from that 3% rise in household income [leaves a nominal 1.8% gain]

You were paying income tax, etc. before the raise. So the take home pay increases in proportion to the gross pay. Note income tax brackets are inflation adjusted. As well, EI and CPP have ceilings, and if you’re above the ceiling you don’t pay more if you get a raise.

Employment increased by 63,300 in September, on a more than 80,000 gain in part-time work, Statistics Canada said Friday from Ottawa. Full-time employment was down by 16,900. Economists were anticipating a 25,000 increase on the month.

Canada’s unemployment rate dropped to 5.9 per cent in September from 6 per cent a month earlier, near the lowest in four decades. Wage growth, however, slowed.

This settles it: BOC will hike interest rates later this month. Expect another hike in December. Mortgage rates rising.

Gwac – thanks for your detailed and considered reply but that is no answer. Just the usual Gwhack-Attack. Not helpful to the discussion, evidence or data. “Nothing happens” – it is happening right in front of your eyes – fewer buyers because they can’t afford it. No one is talking about losing their home – the seller has no partner (the buyer). The owner that doesn’t want to live like a monk and spend all of their savings will have to sell – who is going to buy at the prices we are seeing. This is what is happening in Vancouver [and has started here] – fewer buyers; so they pull the shack off the market and wait until Spring 2019 – imagine the volume of listings to come on the market in the Spring of 2019. It will be something – but the astute buyer will be looking at 2020. So, how many of these bargains have you picked up this week? Walk the walk vs talk the talk. Do as I say, not as I do.

Today, Better Dwelling did a write-up on my favourite topic here…real estate cycles.

Expansion or downturn…should ignite a few fires on here today. I feel like it’s October 2008 all over again, history is ready to repeat.

“Not from the air, but from rising family income. Median family income has been rising 3% per year, which is a rise of about 3% x 83k = $2,500 Per year”.

Firstly, your 3% rise in annual household income is inaccurate (see #4 below). Second, even if you are correct, inflation is running at 2% (long run average is above that rate, but let’s use 2% because that is the BOC long-run target). Therefore, the real gain for that household is a mere 1% [3% less 2% = 1%]. Thirdly, you forgot about income taxes, EI and CPP [all three of those statutory deductions rise as you earn more] – best to deduct 40% from that 3% rise in household income [leaves a nominal 1.8% gain], so that $2500 pay increase is only $1500 in your pocket, or a mere 1.8%, from which you deduct 2% inflation, leaves you at -0.2%. Again, where does that $250 per month extra mortgage payment from from – the air? Fourth, surely you are not claiming that household incomes are rising 3% every year???? Look at the public service [largest employer in Victoria] – wages have been stagnant. Don’t believe me? Check this out: https://www2.gov.bc.ca/assets/gov/careers/all-employees/pay-and-benefits/salaries-overtime-and-other-wages/bcgeu_wage_increases.pdf
This shows wages growing at less than 1% annually over the last 10 years, not 3% every year. Most years over the last decade it is 0.5%. Lastly, cost of home ownership increases year after year – insurance, maintenance, upkeep, remodeling, utilities, property taxes……….then there is the cost of raising kids – it gets more expensive: education, sports, vacations………………

So, the statement that it is so easy to spit out another $250 a month is fantasy, let alone the more realistic figure of the true costs. So, when we see a quarter point hike in rates, best not to shrug it off as insignificant because the next hike is around the corner and your pay increases won’t save you after the tax man and inflation are done with you. 3% annual pay increase – wake up Dorothy, you are not in Kansas.

For the most part Federal & Provincial governments can have an effect on demand (Credit tightening, foreign buyers tax, ect.) and very little impact on supply – building some low income housing. Where as Municipal governments can have a big impact on supply(rezoning) and very little impact on demand(banning airbnb’s).

I have actually gone out of my way to talk with most of the present politicians over the last few years. The City of Victoria has about 90,000 people in it at present.

I made a point of asking them what they felt was the maximum population that they envisioned for the city in the future. That question drew a total blank stare from each and every one of them. The answer seemed to always be that we have room to increase density but that was not the question I asked them.

In theory we could double or even triple the density of Victoria but what are the consequences of how the city looks or functions. There does not seem to be any long term vision for the city nor a realistic look at the challenges are involved. By way of a minor point I talked to a city engineer who was really concerned that everybody is ignoring that our pipes for delivering water are approaching capacity. The reservoir has enough water but our ability to move it both to the city and disperse it to the different neighbourhoods is reaching its limits. According to him it is not just a question of adding pipes within our boundaries but getting the feeder pipe increased which is a CRD issue. According to him the politicians dont even want to hear about the problem much less deal with it.

I remember a couple of politicians five years ago telling me that my concerns were misplaced and that Victoria is never going to approve 25 story high rises.

On the other hand, to be fair to the politicians I dont think the average citizen or even the ones that vote have given any thought to their city either.

I keep thinking of Josh who wants more density in the hope that increased supply will reduce the cost of living in James Bay. The question that does not seem to be asked is how extra supply would it take to drop prices noticeably. Increasing supply by 20% is not likely to drop prices by twenty per cent.

Anyway I promised my wife that I would start working on a list of things we should ship and items that we should sell if we pull the trigger and move. Not looking forward to weeding out the library. Should start with all the garden stuff first I guess.