I doubt that you’ll ever hear a bear provide a timeframe. Because I’ve asked here many times … what is the definable “end point” of a bearish “wait-before-buying” approach that many here are doing. No one has answered that, even if presented in simple yes/no format.

You have to be in our private bear club to be in the know Patrick. 😉

I bought in 79 for $55K and no one told me I was a fool to buy, especially when it went to $100K a year and a half later when I sold just below that.

It tanked back to mid 50’s two years later and I rebought. It’s called 6th sense Patrick, there is no timeline. You really have to let go of the pompous stuff, gives the appearance you’re secretly crapping your pants.

Guess we won’t see many posts here tonight. Half the city has no power…

josh: The bear vs bull discussion here has a reasonable timeframe

I doubt that you’ll ever hear a bear provide a timeframe. Because I’ve asked here many times … what is the definable “end point” of a bearish “wait-before-buying” approach that many here are doing. No one has answered that, even if presented in simple yes/no format. For example, are you gonna wait until prices fall N% and then buy? What happens if houses rise M%, would you buy then?

I’ve concluded that there is no reasonable time frame for the bears, just a partially formed thought to “wait”

@ Deryk

With all due respect, you gotta stop cherry picking your data.

Vancouver – 1.4M List Price, 5 bedrooms with 2 bedroom legal basement suite.
https://www.realtor.ca/real-estate/20088839/5-bedroom-single-family-house-231-e-king-edward-avenue-vancouver

North Vancouver – 1.4M, 4 bedrooms
https://www.realtor.ca/real-estate/20087462/4-bedroom-single-family-house-2182-rufus-drive-north-vancouver

Victoria – 1.2 M Gordon Head, 4 bedrooms no suite
https://www.realtor.ca/real-estate/20152931/4-bedroom-single-family-house-4364-gordon-head-rd-victoria-gordon-head

Victoria – 1.4 M, James Bay
https://www.realtor.ca/real-estate/20114187/3-bedroom-single-family-house-63-boyd-st-victoria-james-bay

The way I see it, Victoria is currently way overpriced (except perhaps Langford).

Puts Weaver in his place. I am sure the NDP is trilled deep down.

I would guess there are mixed feelings among NDP supporters. But mainly this is a blow to potential third and fourth parties. The Greens, the BC Conservatives (or whatever the current name is for the folks that think the BC Liberals are too liberal), etc.

Once this became a partisan issue it was doomed to defeat. That’s why one almost wonders if the NDP wanted it to die.

The one time that proportional representation was presented to British Columbians in a non partisan way it did quite well (57%). But as soon as it is seen as a partisan move support drops even among those that might otherwise favour a change.

LOL dead quiet on here. All the Greenies head outside to kick a pipeline. 🙂

Now we need to get rid of the speaker and than things will start to align.. Recall on him and Eby would be real nice

gwac : no on the referendum

Great! That ought to settle that issue.

‘No’ wins 61 per cent of the vote in proportional representation referendum, Elections BC announces
https://www.thestar.com/vancouver/2018/12/20/no-wins-61-per-cent-of-the-vote-in-proportional-representation-referendum-elections-bc-announces.html

No on the referendum. Too bad green LOL. Not even close

If you’re talking to me, that was the point I was making in response to Deryk. Referring to a cost of a home at an earlier point in time (in his case, 1978), over a long enough time span, is indeed pointless.

Same goes for 1978. That was 2-3 cycles ago.

When people express doubts about gains in RE locally, what exactly is the point about bringing up what property cost in 1918?

If you’re talking to me, that was the point I was making in response to Deryk. Referring to a cost of a home at an earlier point in time (in his case, 1978), over a long enough time span, is indeed pointless. I just made it more extreme to illustrate the issue…

It’s the easiest thing in the world to say that you’re a long-term bull on RE. If the term is long enough, everything goes up (herp derp, no shit sherlock, etc etc). Everyone is a long-term bull on RE unless they’re some kind of apocalypse nut job. When people express doubts about gains in RE locally, what exactly is the point about bringing up what property cost in 1918? That’s so utterly out of context and pointless. The bear vs bull discussion here has a reasonable timeframe – when you talk about things so far outside that timeframe, you’re not writing anything worth reading.

@guest_53671

money loses half it’s value every ten years….

How?

Using 2% inflation I get 1$ being worth 80 cents after 10 years

“Knowing what city defined neighbourhood you live in can be important as it might affect what rules apply to development (for instance in local area plans)”

You should always look up the zoning and the Official Community Plan for a property irregardless what neighborhood you think you may live in. As the zoning in your neighborhood for individual properties may be different. Some people may think that because they live in Fernwood they are duplex zoned. That may or may not be true as it is also dependent on other characteristics about the property such as frontage and site area and sometimes the age of the house.

If you want to know about zoning then you would refer to the city’s planning department.

As I said it is about being consistent. When you ask an agent about homes in a neighborhood they don’t look at the zoning bylaw boundaries to find homes in that neighborhood they use the real estate board’s definitions.

Since this blog is concerned about real estate prices and homes then I would say that using the VREB’s neighborhood definitions would be the most appropriate. Which is the neighborhood that is identified on all listings.

@ patriotz

The rule does provide a good approximation of doubling time for rates from 2 to 18 percent.

To work out a rental yield, the weekly rent X 52 weeks, is divided by the purchase price.

• From 48 years ago. Wow then yes, you are doing something…

HA. Is it true they don’t really have an MLS like service there?

The system we have here in insane compared to a lot of countries. I looked at purchasing a brokerage in Croatia and after all my due diligence I wouldn’t touch the market with a 10-foot pole.

No exclusivity on listings so sellers list with 10+ brokerages which means no one has a strong incentive to do floorplans, photos, or anything for that matter.

No MLS system so really only form of advertising is along the lines of websites like usedvictoria.com, Kijiji, Craigslist, and brokerage listings on their website. You have to hit up 10-20 websites to find most of the inventory.

As a result of no MLS system you also don’t have a reliable guide on pricing.

No standard template contracts so both parties hire a lawyer to help with the drafting and the bank and forth….lawyers must love this!

99% of transactions are “double-ended.” Buyer has no agent.

No lockboxes.

Docusign not accepted and most people aren’t packing scanners at home.

Very few clean titles. In a region like Dalmation sometimes you have families that moved to countries like Chile after WWI (one) and then you have like 50 people you need to chase down in foreign countries to clean up the title.

VERY FEW sellers will give you keys to the property (culturual? as not that many scams going around). So every showing you meet the unrepresented buyer and the seller. Sounds fun with the seller hanging out during the showing.

A good percentage of sellers will question the commission once the property sells. Like they will ask for a statement of expenses. Here property sells in 2 hrs, commission is 40k and you don’t hear a beep from anyone 🙂

A ton of buyers will try to circumnavigate the listing agent and go directly to the seller by knocking on the door. Most bigger brokerages don’t put the address on the website but they text you the address the day of the showing.

I ended up with something like 32 negative points compared to here.

Gross commission is about +/- 2.5%, no coop.

One brokerage I looked at had a “managing broker,” four agents, office space, two brokerage cars and their GROSS for the year was $84,000 Euros.

Salaries are similar to here but in euros, so approximately similar affordability ratios (but ownership rate much lower there).

Have lots of extended family in Germany as it is a hotspot for Croats and don’t think salaries are 55% higher adjusted for currency conversion.

My backyard trebuchet can almost launch rocks into Oak Bay. For that reason I consider myself an Oak Bay resident.

The old proverb: “Home is where the trebuchet can reach.”

When we bought our first house in Kerrisdale in Vancouver for $50,000.00 in 1978 ……. we were called idiots then too.

You could heighten the dramatic effect by seeing what your Kerrisdale lot sold for 1 hundred years ago. You could compare your nominal income against that hypothetical person who bought your lot in 1918. So? I could say your net worth in RE took a pounding in 1981, 1990, and to a lesser extent, 2008. I could also say you’ve known almost nothing but declining rates since the early 80’s.

What you’re saying is it’s good to buy and hold. And that is usually true. But the point is not to say, “at no point will the nominal or real value ever go up again”, rather at certain moments along the market cycle there are better times to buy than others. Ignoring the market around you when purchasing RE is not necessarily a good idea, especially if you’re just getting in.

As it stands, the data and market activity suggests a correction is unfolding and people are stretching dangerously to buy in now. If we were having this conversation 37 years ago, I would tell you, it’s not a good time to buy. And I would have been correct – you would have, in that moment, lost over 40% of your money in real terms.

Today you can simply retort by saying, but I held it for decades, so it recovered and look at it now. Then I say, yes, but have a look at all of that in the context of the 1st paragraph. So I would agree that anyone buying now, had better be prepared to hold it for a long time. Over enough time it would likely be a wash, it just depends how burdensome the debt repayments would be in the interim. That last part, is the real issue that I sense you’re not apprehending here.

Anyways, no one’s trying to “win” here as you put it, so don’t worry about it. Just pointing out, it’s simplistic to say, “It was 50k in 1978 and people thought I was an idiot then too”.

the newer residents north of Bay Street no longer identify themselves as living in Fernwood but the older residents still call it Fernwood.

According to the city of Victoria the boundary between Fernwood and Oaklands runs along Haultain. There is a lot of consistency but some inconsistencies between VREB defined neighbourhoods and municipally defined neighbourhoods in City of Victoria.

Knowing what city defined neighbourhood you live in can be important as it might affect what rules apply to development (for instance in local area plans)

Victoria Map – https://www.victoria.ca/assets/Departments/Planning~Development/Maps/neighbourhoods-map.pdf

VREB map – https://www.vreb.org/buying-selling/about-victoria-bc/the-vreb-core-region/victoria

PS: I am a bit sad that Colwood no longer has the VREB defined “neighbourhood” of “Gravel Pit” (now Royal Bay). Would have been cool to be able to say you live in “Gravel Pit”.

Deryk you sound similar to my mom when I’m arguing about RE. She laughs and says “Daughter” if you had bought a house 3 years ago we wouldn’t be having this conversation. But the reality is I wasn’t in a position to buy a house then so it’s a non-argument IMO. Yes if I could go back in time I would maybe try to find a way to buy a house but it just didn’t happen for me. My point is you can look back and say yes a kerrisdale house for 50k was a great investment but do you still own it? Why not keep it forever as an investment? Because other factors are at play right? I fully agree with you that as a person who can “afford” a SFH right now that if I were to buy one right now and then 40 years later look back it would look like a good investment. But I have to be able to afford that house now and live in it! Also the house I can afford to own is a bit junky and am on the verge of something nicer so why not wait to find something good for my money? I’m not trying to argue with you (as I do sort of agree with you as well) just some expensive Canadian food for thought.

“As an example, I’ve never heard anyone say they live in Arbutus.”

• Maybe you don’t know enough people.

The real estate board from time to time will re-define the boundaries of areas to better reflect the changing neighborhoods. If you’re a long time resident of Gordon Head you are not likely to change. But new residents that are buying homes on small lots say in Christmas Hill identify their area differently. The same with those that live in Oaklands the newer residents north of Bay Street no longer identify themselves as living in Fernwood but the older residents still call it Fernwood. Another example is the area around Hillside Mall it used to be called Sears. Sears is gone and so is the name.

Several years ago the Gordon Head neighborhood was broken into Gordon Head and Lambrick Park as it was too big of a geographical area. Now when someone says they live in Lambrick Park you know they live near Lambirck school and Home Depot. When they say Arbutus you know which side of Gordon Head Road they live on. Even when it comes to values one knows that the Arbutus neighborhood has more in common with Cadboro Bay than it does with Lambrick Park.

I don’t see any harm when someone still identifies themselves as living in Gordon Head when they live near UVIC, I know what they mean but a good attorney would use that inaccuracy to discredit an appraisal in court as the appraiser has not kept up with changes. It’s just a matter of being consistent in your data sources and up to date with recent changes.

But for the ordinary Joe and Jane you can still call Arbutus as Gordon Head and Saanich as Victoria when someone asks you where you live.

Housing on the other hand they were saying was extremely cheap. They were describing some pretty insane rent prices and house prices. My house would be worth 20 million in Germany apparently!

Only comparisons to Australia and the United States are valid, sorry.

The price difference is massive and yet people in Victoria still think houses here are over priced.

If you don’t think either markets are overpriced, then I would be inclined to think that there’s effectively no upper limit to what you would consider to be overpriced.

People in Vancouver were (and in some cases, still are) arguing the same thing – house prices in Vancouver aren’t that expensive compared to Hong Kong.

I don’t think it’s a good argument for several reasons, but the most basic one is:

If the police stop me for driving in a school zone at 100km/h where the speed limit is 30km/h, I don’t think it’s logical to defend it by telling the officer that other people normally drive through the area at 150km/h – therefore, my speed is comparatively reasonable.

I suppose it’s literally true (I mean, it is cheaper here, isn’t it?), but it remains indefensible and actually misses the forest for the trees.

‘The water’s starting to rise’: Insolvency business booms in Canada amid rate hike

The interesting thing here, is that this is happening depsite the fact that we’re still running negative interest rates in real terms, have the lowest unemployment in decades, and above average wage growth.

Shows you how sensitive and overbought the economy is now. 25 basis points is a bit of a joke – try telling someone 20 years ago that that kind of hike might push people over the edge. Different times!

‘The water’s starting to rise’: Insolvency business booms in Canada amid rate hikes

People who make a living guiding others through bankruptcy in Canada say they’ve never been busier.

Record debt burdens, rising borrowing costs and, in some cases, bigger payday loans are driving many Canadians to seek relief, according to several licensed insolvency trustees who spoke to Bloomberg. They say November was their busiest on record, and December — typically a slow time of year in the insolvency trade — hasn’t let up.

“I’m essentially trying to add capacity every day to get people seen,” Blair Mantin, a Vancouver-based licensed insolvency trustee at Sands & Associates, said by phone. “Usually things slow down around Christmas, but we haven’t seen the demand slow down this year.”

“The tide has turned, and the water’s starting to rise,” Ted Michalos, a licensed insolvency trustee at Hoyes, Michalos & Associates Inc., said in a phone interview. “Now it’s just a question of how quickly does it rise.”

https://www.bnnbloomberg.ca/the-water-s-starting-to-rise-insolvency-business-booms-in-canada-amid-rate-hikes-1.1186351

LocalFool: Speaking of truly stunning – after watching the RE carnage beginning to unfold in Australia, their regulator has just okayed banks to start reissuing interest only mortgages again.

What is “truly stunning”, is you describing what is going on with Australia house prices as “carnage”. Fact is Australia house prices are down 1-3% on the year. Yawn.

https://www.businessinsider.com.au/australia-property-market-house-prices-sydney-melbourne-corelogic-2018-10

“House prices fell by 3.1% over the year in weighted terms, again faster than units which declined by a smaller 1.3%. However, while prices have now fallen for 12 consecutive months — longer than the average housing market downturn in Australia seen in the past — Lawless says the pace of declines are still modest at this point.
“[This is] hardly a crash, and a slower rate of decline relative to the previous housing market downturn between June 2010 to February 2012 when national dwelling values fell by 3.0% over the first twelve months, declining 6.5% from peak to trough,” he said.”

Here’s an interesting read. This chronicles an American couple with a few kids, and they are drowning in debt. Funny thing is, they are in far less debt than people here in BC are taking on.

Just reading about their lives and the choices they make – it truly is stunning that people do this, live like this, and do it again and again.

LF – that is just financial porn. It exists so people can read it and feel smug that they aren’t that stupid.

Sorry to interrupt your narrative but folks with 60,000 of credit card debt are not the norm here, there or anywhere. Folks with 60K credit card debt who also send their kids to expensive private school are probably about 5 standard deviations from the norm.

Debt larger than what they have ($570K)would be quite manageable on their stated income ($170K) if (a) it was mortgage debt not credit card debt, (b) they lived within their means.

Speaking of truly stunning – after watching the RE carnage beginning to unfold in Australia, their regulator has just okayed banks to start reissuing interest only mortgages again. Effective January.

What the heck are they thinking? First they say they are willing to drop rates and aggressively print even more money to “stimulate the economy”, and now this?

I have said before that Australia’s housing market is certifiably insane. Now it’s clear that’s not the only thing. I will be very curious to see what happens.

In markets, the trends are like travelling up, then down, a mountain. Momentum begets more momentum, and once it’s established, it’s very hard to stop until it’s actually run its course. We saw this here with the, “I can’t believe the housing market is still going with everything we’ve thrown at it” theme.

But that’s how it works, and the reverse is just as true. So what will this policy move do? I suspect their measures won’t work…but hmmm.

https://www.theguardian.com/australia-news/2018/dec/19/bank-watchdog-lifts-restrictions-on-interest-only-loans-as-house-prices-fall

I am seeing more out there too. More variety, decent(er) houses taking their time to sell and some good “deals” for someone compared to a year ago. Even during the slow time of year! I don’t think the data truly shows these peaks of 2016/17 because they didn’t last very long. You have to think the buyers who continuously lost out on houses during that time are now buying that house they couldn’t get before.

I agree about the neighborhoods. You see the good neighborhoods become out of reach for the average dual incomers so they settle for a lesser neighborhood and that goes on and on until people are thinking shawnigan and Mill Bay look like nice places to commute from (sacrifices right?). That process takes time and we can see how hot Sidney got (well after Victoria) and how it doesn’t seem to be so hot anymore. Just like that!

Since we all rely on data from the Victoria Real Estate Board, it would make sense to use the maps from their web site.

There is a selection of homes available now (even the dated & odd ones) with many positive qualities that were too hard to find before.

I’m starting to see this too. Not many compared to a historically nominal market, but more than before. Just lurking for now. Can’t say it’s never tempting, but I still don’t think the market psychology is where it needs to be for me to feel confident that present valuations are going to stick.

I can hit a golf ball from that house to Campus View Elementary School so I would consider it GH. I think your nit picking on technicality here and doing so on purpose. Please save that for your online battles with Hawk.

Based on her definition, i don’t even think Campus View is in Gordon Head.

In general, the impression I have from the listings and sales updates I continue to watch is that prices in the areas you selected have not gone up this year, have possibly dropped from last year, but have not gone as low as 2016.

So these “desirable” neighborhoods in Victoria are now selling for prices seen a year and half ago. This means that some of the “undesirable” neighborhoods has seen their price increase much more than the 5.4% and 10.1% in the past two years to arrive at those overall regional increases.

If this true then it inherently makes me very nervous about buying a home currently, especially one in an “undesirable” neighborhood. Instead of “financially well off” folks driving up average home prices, now it has turned into “financially stretched” folks driving up average home prices.

@ Deryk

Here is a house for sale in Vancouver… for those who think Victoria is expensive. https://www.remax.ca/bc/vancouver-real-estate/2696-w-11th-avenue-wp_id226950742-lst
The house shown is not at all unusual. It’s what it costs in Vancouver today in a what they call a down market.

Meanwhile, this house in West Van with a legal suite and listed for 1.5M, nice interior, in a great neighborhood, safe, ocean a couple blocks away, good schools sat on the market for ages, unable to sell and was eventually cancelled.

https://www.zolo.ca/west-vancouver-real-estate/6780-marine-drive?sc=aw-1016539634-52921574314&gclid=CjwKCAiA9efgBRAYEiwAUT-jtGRIFfDQxB65tfhLXl7ONcpOZQe2c-xTrTkxPJKUmVMI13Wj_JI2iBoCsk8QAvD_BwE

MLS® Number: 397966
https://www.realtor.ca/real-estate/19854504/5-bedroom-single-family-house-1759-mortimer-st-victoria-mt-tolmie
(Current List Price – $769,900), (2017 Price – $728,325), (2016 Price – $654,765)

ks112, just so you know, this isn’t in GH.

I think there are too much what ifs and that in the discussion on house prices, lets get back to evidence and facts.

I have below a sample of 8 homes currently on the MLS in two so called “desirable neighborhoods”: Gordon head and Broadmead/Royal Oak between $750k and $1M. I have taken the average of the Year over Year price changes for Sept, Oct and Nov for 2018 (5.4%) and 2017 (10.1%) to come up with an indicative of what these homes would be asking/ worth if they were listed this time last year and this time in 2016.

So assuming these homes are currently fairly priced (which is very conservative since since some of these have been on the market for quite awhile), is it probable that these homes would have sold at the indicative 2017 and 2016 prices I had calculated for those respective years? If the answer is: they would have sold for more in 2017 and 2016 than what is calculated, then it means those Year over Year increases quoted by the VREB is understating the correction currently seen in those neighborhoods. Vice versa if the opposite true. I am especially curious to hear the opinions of those whom have been watching the market for a long time.

Gordon Head:
MLS® Number: 397966
https://www.realtor.ca/real-estate/19854504/5-bedroom-single-family-house-1759-mortimer-st-victoria-mt-tolmie
(Current List Price – $769,900), (2017 Price – $728,325), (2016 Price – $654,765)

MLS® Number: 401451
https://www.realtor.ca/real-estate/20089460/6-bedroom-single-family-house-1824-feltham-rd-victoria-lambrick-park
(Current List Price – $835,500), (2017 Price – $789,910), (2016 Price – $710,129)

MLS® Number: 400569
https://www.realtor.ca/real-estate/20004371/4-bedroom-single-family-house-1770-ash-rd-victoria-gordon-head
(Current List Price – $899,000), (2017 Price – $850,454), (2016 Price – $764,558)

MLS® Number: 401677
https://www.realtor.ca/real-estate/20112715/3-bedroom-single-family-house-1603-hawthorne-st-victoria-gordon-head
(Current List Price – $748,000), (2017 Price – $707,658), (2016 Price – $636,140)

Broadmead/Cordova Bay:
MLS® Number: 401238
https://www.realtor.ca/real-estate/20068529/3-bedroom-single-family-house-4493-emily-carr-dr-victoria-broadmead
(Current List Price – $899,900), (2017 Price – $851,305), (2016 Price – $765,324)

MLS® Number: 402258
https://www.realtor.ca/real-estate/20166022/4-bedroom-single-family-house-4878-cordova-bay-rd-victoria-cordova-bay
(Current List Price – $875,000), (2017 Price – $827,750), (2016 Price – $744,147)

MLS® Number: 401745
https://www.realtor.ca/real-estate/20118852/5-bedroom-single-family-house-926-falaise-cres-victoria-broadmead
(Current List Price – $888,888), (2017 Price – $840,888), (2016 Price – $755,958)

MLS® Number: 400893
https://www.realtor.ca/real-estate/20034459/4-bedroom-single-family-house-1005-kentwood-pl-victoria-broadmead
(Current List Price – $999,999), (2017 Price – $945,054), (2016 Price – $849,604)

“Here is a house for sale in Vancouver… for those who think Victoria is expensive. https://www.remax.ca/bc/vancouver-real-estate/2696-w-11th-avenue-wp_id226950742-lst
The house shown is not at all unusual. It’s what it costs in Vancouver today in a what they call a down market.”

This is not what an average home costs in Vancouver. For some reason you think the west end is metro Vancouver. It is a small portion of it. You would be comparing it to Oak Bay where many of them would likely purchase in. They are unlikely buying homes in Sooke or Langford and driving up prices there. Vancouver residents were buying here in large numbers in 2016 for the simple fact that prices were at a high there and much lower here. Those buyers have substantially decreased since 2016 simply because our prices are now much more expensive. Many of those west end buyers have already left or are wealthy foreign owners who bought there to live the Vancouver lifestyle. I think you are also connecting your love of Victoria over Vancouver to how you think every other Vancouver resident feels. This is not the case of anyone of my family members and friends who live in Vancouver and the Fraser Valley who have never considered a move here. Victoria is great but there is no way to get around the fact that the ferries here are a major obstacle. Just simple things like having the freedom to take a quick weekend road trip to Washington State or other towns around BC without having to worry about ferry hassle like we do is something most Vancouver residents have never had to consider and would want to avoid. There are many cheaper options for Vancouver residents . You can drive just a little over an hour from Vancouver and buy a home for example in a city like Chilliwack for 500k or other areas of the Fraser Valley for about the same price as Victoria. This is no different from the people who move from here to places like Parksville or Campbell River and can still be close enough to family, friends, and Victoria. Take a look at Leos chart in the link of lower mainland buyers which is steadily decreasing and which is likely to continue as sales and prices fall in Vancouver

https://househuntvictoria.ca/2018/07/06/whats-going-on-with-prices/

It does hawk when you claim 5 years are going higher because the fed raised rates.

hawk: Doesn’t mean shit when you can’t qualify at 2 points higher.

But for those who do qualify, they qualify for higher amounts, a factor pushing prices up. In other words, the reverse of the price drops you tell us happen with rising rates.

Here is a house for sale in Vancouver… for those who think Victoria is expensive. https://www.remax.ca/bc/vancouver-real-estate/2696-w-11th-avenue-wp_id226950742-lst
The house shown is not at all unusual. It’s what it costs in Vancouver today in a what they call a down market.

Canadian 5 year bond rates are at 1.94 from a high of 2.5 a month ago so the reality is 5 year rates should be coming down and help with the stress test.

I’m not so sure they’re going to be in an overall down trend from here. The path is a strong upward trend on a 3 year series, though it has fallen since October. The hike down south is going to put pressure up here at some point, immediate or not.

Poloz is really in an impossible situation, IMO.

‘Mild recession’ in housing market to continue in B.C. in 2019: report

B.C.’s housing market is in a “mild recession” but Vancouver Island’s real estate market is generally stable, a new report from Central 1 Credit Union says.

“I think the market in Victoria and the rest of the Island is still quite solid,” Bryan Yu, Central 1’s deputy chief economist, said Tuesday.

“But prices have essentially flat-lined” on the Island, Yu said.

However, prices are expected to rise in Island communities that are attracting retirees, he said.

https://www.timescolonist.com/real-estate/mild-recession-in-housing-market-to-continue-in-b-c-in-2019-report-1.23546285

… underscoring market expectations that imminent interest rate hikes are off the table.

Good news in the short-term for mortgage holders.

Still haven’t answered how many times you’ve biked downtown.

You’re fixated on that, aren’t you? Does it make it any less bikable if I don’t personally do it daily?

At least that English degree is good for something.

I feel fortunate—only doctors, lawyers, engineers, and government workers can afford to buy in much of Gordon Head, but I did it with a useless English degree.

Not by neighbourhood, only by municipality.

Oh, so Soper fabricated that “20% foreign buyers in Gordon Head in one month” thing. Noted.

I do find it amusing that Introvert hates Langford developments with a passion, but Gordon Head is simply Langford from 40 years ago.

Sort of, except for lot sizes and overall neighbourhood planning.

I can see your point, and in many other cities, it would be accurate, but most of Gordon Head is located near Mt. Doug, or the ocean, or at least some park. If you can look past the houses, most of the lots are quite nice, and the houses will eventually get torn down for nicer ones.

Yes. This is what I’m trying to get at.

The GH box is not why GH is desirable. And, to be clear, I’m not arguing that GH alone is special; there are several areas in the core that have most or all of the positive characteristics of GH, and that’s why they are very desirable too (and, by the way, prices reflect that).

Canada’s annual inflation rate drops sharply on lower gas prices

Lower gas prices pulled Canada’s annual inflation rate in November down to 1.7 percent, the first time in 10 months it has been below the Bank of Canada’s 2.0 percent target, underscoring market expectations that imminent interest rate hikes are off the table.

The Bank of Canada, which has raised rates five times since July 2017 as the economy strengthened, said earlier this month that economic data heading into the fourth quarter had been weaker than expected.

“There’s absolutely no rush for the bank and probably the earliest we’re going to hear from them is in the springtime, in terms of rate hikes,” said Doug Porter, chief economist at BMO Capital Markets.

https://ca.finance.yahoo.com/news/canadas-annual-inflation-rate-drops-134436946.html

@Leo S.
“Yeah I don’t see a lot of seasonality in the median prices. Even 10 year averages are all over the place. Maybe some more price gains in Feb/Mar but standard deviation on all of these is 3-4% so likely just noise.”

Well, a drop of 7.6 is double the standard deviation. That’s quite unlikely to be noise. Such a big change has less than 5% chance to be noise, at least if we consider the normal distribution (see: 68–95–99.7 rule on Wikipedia).

@Wolf

Gordon Head it feels like last call at a bar when a sloppy drunk woman (or man, we do not discriminate) in a leopard-print tank top, black leather skirt (two sizes too small), and enough make-up on her face…

I’ve never heard a neighbourhood described like that; I appreciate your vivid imagery. I can see your point, and in many other cities, it would be accurate, but most of Gordon Head is located near Mt. Doug, or the ocean, or at least some park. If you can look past the houses, most of the lots are quite nice, and the houses will eventually get torn down for nicer ones. I am biased, though, because I am now a…? What do you call someone who lives in Gordon Head?

Can you give a similar-styled description of a neighbourhood you think is great, for comparison?

“That would be “peddle,” genius. And what I’ve been “peddling” has so far panned out. What you and the other desperate renters have been peddling for the last 11 years has not.”

At least that English degree is good for something.

…………….you don’t bike downtown ever, because it’s not a great bike ride. You’re either going down shellbourne which is a death trap, or going up over the side of mt.doug to the lochside trail connector, and it’d be a minimum 45 minute trip for you in each direction.

You’d have to go quite slow to take 45 minutes. Especially on the way in. Tyndall Park to the legislature via the Lochside is <35 minutes bike if you are in reasonable shape. Even Google Maps says 38 minutes and their bike times are very easy to beat.

Also if you halfway enjoy biking, cycling from Gordon head to downtown on the Lochside is a lovely commute. Long enough to maintain fitness. Short enough that it is not an epic hurdle.

You’ve never experienced true paper gain fluctuation. It will be gut wrenching and cause much lost sleep. A whole generation will learn a valuable but painful lesson as house taxes/owner upkeep costs will never go down.

So much certitude from a person who’s never once been right since he started posting on HHV.

Property taxes and owner upkeep costs aren’t an issue to owners who know what they’re doing. Obviously, they were an issue for you.

How? If they’re are no spots there are no spots.

Gordon Head’s schools aren’t overflowing with students the way many West Shore schools are. Royal Bay Secondary has classroom space for 800. Its enrollment is over 1,100.

When really it’s about you, and the bullshit you pedal.

That would be “peddle,” genius. And what I’ve been “peddling” has so far panned out. What you and the other desperate renters have been peddling for the last 11 years has not.

Canadian Mortgage Credit Growth Drops to 22 Year Low Signalling the End of the Housing Boom

Canada’s mortgage credit growth continued to decelerate in Q3 2018. Per a recent report from RBC, mortgage credit growth decelerated to 3.2%, the weakest pace of growth in 22 years.

As credit growth begins to contract it is effectively reducing aggregate demand, not only for housing but also has a subsequent knock-on effect, slowing new spending and wage growth. This ultimately impacts debt servicing, as wage growth is needed to offset the increasing rise of interest payments. Per RBC, Interest payments rose at their fastest rate (14.8% y/y) since 2007.

This is also important to keep in mind for rent prices. Rents rise when the housing boom is in full swing because credit growth is abundant, this then pushes home prices higher, which propels banks to issue more loans, creating a self fulling prophecy. The creation of this new credit drives wages higher, improving the quality of the borrowers who are witnessing strong wage growth. As unemployment falls an inflow of new migrants come looking to participate in the exciting economic prospects, many of whom become employed in the booming construction sector. These inflows push the vacancy rates even lower.

However, like all cycles, they must eventually end, and the boom ultimately sows the seeds of its own demise. The slowdown of credit stalls wage growth, asset prices come to a standstill, and construction begins to slow. This results in job loss, and inflows of migrant workers turns to outflows. Today, we have home sales plunging, prices declining, and wage growth (a lagging indicator) is decelerating, construction remains strong but has also begun to slow.

https://vancitycondoguide.com/canadian-mortgage-credit-growth-drops-to-22-year-low-signalling-the-end-of-the-housing-boom/

Makes sense why my kid was 42nd on the waitlist at Campus View.

Would that have something to do with your kid registering in the French Immersion program? Because that would be pertinent information in this discussion.

You don’t live in Gordon Head, you live in a fucking bubble.

Your lashing out at me is understandable: things really haven’t gone the way you wanted.

I was listening to CBC the other day and found it interesting that the housing market downturn is newswhen it should have been news long ago. You know it’s really happening when it’s mainstream news (and happening everywhere). I think it’s funny listening to people talk about RE. You could have a friend who will argue the reasons RE will go up forever and then they read an article and they will change their tune so quickly. But didn’t agree with any of the data or reasons you pointed out 3 months ago but now CBC tells them the outlook is gloomy so they believe it. This is why I find the psychology of it all so fascinating! It’s one of those things that is tough to quantify but I think has a place in the debate.

Love the top comments!

They’re not making more Gordon Heads—that is, neighbourhoods in the core, on the ocean, that are not a bad drive or bike ride to downtown

Tell me honestly, how many times have you biked downtown?

not containing overcrowded schools

Makes sense why my kid was 42nd on the waitlist at Campus View.

You don’t live in Gordon Head, you live in a fucking bubble.

@Barrister

Not having the house on the market with just a dual agency is a pretty big red flag to start with in my opinion if you are dealing with an non savvy old person

Thanks for the reply; it reinforces my initial reaction. The problem is convincing this person that he is not savvy and might have cognitive issues. He has bought and sold at least 6 houses in his life, and nothing went off the rails, so he thinks he is savvy. The fact that was all at least 20 years ago does not seem to matter.

As a friend of mine said, “The older people get, the more you have to treat them like children.” (I will say this certainly does not apply to everyone, but the incidence of dementia does increase with age). The problem is that until they are declared incompetent, you can’t really make them do anything. Oh well, I can advise as best as I can.

Interesting having a look at the various explanations given in each country that is experiencing a declining housing market. While there are many at the moment, a few of mention below are:

Canada: B20
Australia: Lender clampdown on I/O loans
England: Brexit
China: Central Policy
USA: Rate Hikes/Donald Trump
Israel: Excess currency appreciation
Hong Kong: Chinese capital controls

However, the near universality of the occurrence suggests a common factor. What could it be? 😛 One thing they do seem to have in common: Most commentators/analysts think their market will either be flat henceforth, or achieve a soft landing.

Young and riskless: Millennials taking a pass on stocks to emphasize savings

https://www.theglobeandmail.com/investing/personal-finance/article-young-and-riskless-millennials-taking-a-pass-on-stocks-to-emphasize/

The massive ups here were caused by this 2 fold. From the demand of people from Vancouver, as well as HAM.

Vancouverites moving to Victoria had a negligible effect on us. Vancouverites moving to Victoria had a huge effect on us. Has anyone noticed that bears will claim either depending on how it suits their particular argument?

Lest we forget that Gordon head had 20% of their sales one month from foreign buyers.

Is a one-month occurrence statistically significant? Also, I don’t recall Leo ever breaking down foreign buyer sales by neighbourhood (but I could be wrong). Do you have a link?

Since Victoria’s ups weren’t caused by big Chinese money/organized crime/money laundering, it stands to reason that Victoria’s downs will look a lot different than Vancouver’s (and we’re seeing this).

The massive ups here were caused by this 2 fold. From the demand of people from Vancouver, as well as HAM. Lest we forget that Gordon head had 20% of their sales one month from foreign buyers.

but I also do not believe we will experience the same level of disruption that Vancouver will.

Same. Since Victoria’s ups weren’t caused by big Chinese money/organized crime/money laundering, it stands to reason that Victoria’s downs will look a lot different than Vancouver’s (and we’re seeing this).

On this site people’s completely anonymous predictions are skewered and put under the microscope, and that’s a good thing. It keeps people honest.

You’re welcome!

Canadian house price slump makes buyers wary for 2019: Don Pittis

Ya it’ll be funny when/if people start arguing “It’ll never go up again”. It’ll be just as true as “it can never go down”, haha.

I’m afraid that I heard most of those same arguments several years ago when my family members bought our new properties in Sooke for $375,000.00.

You are correct. Arguments for rising or falling markets are always repetitive.

History proves me right. People have come here in droves…There are certainly connections and dots that line up and emerge if you look for them.

I guess that depends what you mean. If your argument is the population is growing, then sure. If you’re saying it’s growing at a rate markedly stronger than the long term average, I disagree. This is a data driven question and isn’t really debatable in that way.

I’m betting that they will pick places like Victoria because it is a spectacular place to live.

That’s fair relative to some other markets, but I’m unconvinced it will generate the market conditions you are betting on. But a bet is just that, so fair enough.

my belief is that Victoria’s (sfh) will only experience a hiccup. Don’t believe me?….look at the charts

This is historically supportable. Victoria rarely gets large scale corrections, then again it’s rarely been this unaffordable. I happen to think a correction is actively beginning and will be more than what we’re used to, but I also do not believe we will experience the same level of disruption that Vancouver will.

My advice is buy what you can afford. Never risk your family home by over leveraging. Make sure you have the ability to “Hang on” during harder times such as losing your job, illness, tenant not being able to pay their rents, etc etc.

+1

Thanks for responding Deryk.

Local Fool: Real Estate in BC is like the wild west.

It’s like you observed yesterday, spin doctors and also, liars. What makes a bubble? Loose credit and a compelling story. Missing one of those two? No bubble.

Nothing motivates a population to buy more than the perception of endless, rich Chinese cavalierly buying their kids RE as “New Year’s” gifts while you save for years to buy, hordes of “investors” floating overhead in bright yellow helicopters to scope out your neighborhoods to buy in, pictures of unmarked buses with blackout window tint (you just know they’re full of Chinese investors), or seeing line ups of paid actors of Asian descent, standing in line at a pre-sale offering.

They want your mind, and for you to act in a certain way. People are going to read about this garbage years from now, and won’t know whether to laugh or cry…

Local Fool: Real Estate in BC is like the wild west.

Real-estate marketers investigated over allegations of media manipulation

The Real Estate Council of British Columbia (RECBC) is investigating a series of incidents in which Metro Vancouver real-estate marketers have allegedly duped media to spur sales and inflate the perception of demand for real estate projects.

Its most recent investigation involves MAC Marketing Solutions and a charade that at least one of its employees executed on February 8. MAC owner Cameron McNeill publicly apologized for an employee who pretended in television interviews with CBC News and CTV News to be a customer.

The employee and another woman posing as her sister claimed they were both daughters of wealthy Chinese parents who wanted to celebrate Chinese New Year by buying them a Vancouver condo as a present.

https://biv.com/article/2013/02/real-estate-marketers-investigated-over-allegation

@guest_53519

Do they need conveyancing services or they need the offer reviewed? If they are a seller they need a seller’s lawyer review subject otherwise in absence of any other subjects there is no turning back.

Well, this was an elderly person who accepted an offer from a real estate agent representing clients (property was not listed on the market). I believe the agent had him initial something to waive the problem with dual agency, and he will be paying a certain commission to that agent. He assumes it will all get worked out once the purchaser’s conditions come off (inspection) and he takes the papers to the lawyer.

I have never sold a property, only purchased, and we put in our offer to purchase and then I guess it was the title and money transfer that our lawyer handled after. I did tell this person that whatever document he signed when the agent presented the offer to purchase is what he agreed to. Hopefully he didn’t get fleeced.

This brings up a question that someone here might have encountered: does a senior with questionable mental faculties have any recourse if they get taken in a real estate transaction?

3491 Mayfair Dr MLS 397252

Pros: generally updated house with views from Mt. Tolmie. Cons: 70 year-old house on 4150 sq. ft. lot. I don’t think you can draw conclusions from this because it is not a typical property.

caveat emptor said: “There has never been a better time to buy Victoria real estate for long term wealth creation! ”

What a joke!! Demand is floundering and prices are declining according to B.C. Assessments and about to show even bigger declines relative to the BC Assessments from earlier this year which will be released in a few weeks. However, it might be a good time to buy in about 36 months.

Local Fool, I agree with you.

Since were discussing options to Vancouver, personally I’d rather live in either Vernon or Penticton.
Both are the same distance by plane from Vancouver that Victoria is. Both have more amenities, better winter sports, far better powder, better curling, better hockey rinks. Yes, clearing driveways is not my idea of fun. But since the RH % is drier it’s not that bad.
Summers are nicer, and nothing beats the local Okanagan Fruit and Veggies. That being said Forest Fires are becoming a real problem, but we seem to all get the smoke now anyways. My point: Victoria is nice, but people are notoriously tough to get to know.
Coming from a 4th Gen Victoria born/raised. We will probably retire in the Interior for reasons listed above, but that’s down the line.

Lastly, BC Business Mag ranked Victoria 35/38 in cities to live. And of the metrics used only Port Alberni had lower household income. Both for Under 35 and above (separate categories).

“That assessed value is a powerful psychological tool though, and I expect to see more unrealistic asking prices for listings once owners get the letter saying their house is worth more.”

Leo, Are you able to create a long term chart (at least prior to 2008?) for % over/under assess? Your comment really hit the nail and would love to see a chart if possible. Cheers and Happy Holidays!

Along with Amy, who posted this, I would also be interested in a real estate lawyer name, as I know someone who accepted an offer will need to do the paperwork.

I think Amy needs to start with a really good commercial appraiser.

Not sure what you mean by “someone who accepted an offer will need to do the paperwork?”

Do they need conveyancing services or they need the offer reviewed? If they are a seller they need a seller’s lawyer review subject otherwise in absence of any other subjects there is no turning back.

I’ve been following House hunt Victoria for several years now. (It is much appreciated.)
Trying to predict the future of real estate is not easy as most will agree.
I find it useful to look at other places and try and figure out how Victoria will be effected. That’s why six years ago…. when I looked at the prices for a post war, junk bungalow on a 33 foot lot in vancouver, selling at well over two million dollars, I thought that $375,000.00 for a house in Sooke with a legal suite was a good deal…That’s why my family bought 3 of those houses. ( At the time, I was laughed at by some people on house hunt because they thought $350 thousand for a house in Sooke was insane.)
Those newer houses in Sooke with a legal suite are now worth $565,000.00 each. (In Victoria you get a broken down old house for $565,000.00 ……if you can find one.)
I now look at Vancouver prices dropping and I read about people on House hunt Victoria biting their nails and talking up the pending doom and gloom.
But I have to wonder where those Vancouver people who are selling their $2million plus homes are going to go. My guess is that many of them will search out places like Victoria where they can still buy a beautiful big house for around $1million on a lot twice the size of a Vancouver lot and still put $1million in the bank.
That’s why I think Victoria will “not” drop in price in any dramatic way. People here still do not understand that Victoria is quite inexpensive. There are tens of thousands of people likely to be thinking about selling their 2million dollar plus homes in Vancouver because they know the bubble there is going to burst. They have to go somewhere.
That’s my humble opinion for what it is worth:)
So……Keep the head and don’t miss opportunities. This spring should be interesting.

There has never been a better time to buy Victoria real estate for long term wealth creation!

You already sound like you have the job,lol.

Dow tanks lower to December decline levels not seen since the Great Depression. Yep load up suckas.

Take advantage of low interest rates!

The market already did.

Quick, the Markets are on sale!
Buy! Buy! Buy!

Quick, the Markets are crashing!
Sell! Sell! Sell!!!!

Maintain autopilot. Keep dollar cost averaging into something diversified and low cost.

Anyone who still has a lot of years of retirement savings ahead of them should absolutely be cheering when the markets fall.

I am pretty sure that you never paid any attention to the spin doctors.

That’s not really it. I’ve seen this before in other examples which I quoted often. None of it’s unique or new (which is part of my annoyance in how people repeatedly fall for it).

It’s when it applies to you, to your market, to something you may have a stake in now or at some point, that fosters a deeper level of understanding via resonance. Think of it by analogy.

“Most automotive service clerks are crooks out to rip you off,” but you’ve never actually had that experience. Then you go to Jiffy Lube and presto, you have the rip-off experience up front and personal.

Did you learn anything new? Not exactly in one sense, but sort of in another. It’s just somehow clearer than it was before. Or think of it as knowing the lyrics to music, but then coming to understand the music too.

Not explaining it very well but hopefully you get what I mean…

I know that it is sad that a lot of people do listen but it seems to partially stem from a real failure in our education system.

Perhaps, or people hearing what they want to hear. We all have that weakness though, whether we’re educated or not. It just depends on how effective an antidote that education is.

Local Fool: Did you miss economics 101. If you are an economist and you have a great job hang on to it and spin the story the CEO tells you to spin it. Local Fool, having read your posts for a while now, I am pretty sure that you never paid any attention to the spin doctors. I know that it is sad that a lot of people do listen but it seems to partially stem from a real failure in our education system.

“I wouldn’t be surprised to see the average place sell for under assessed value in 2019. That assessed value is a powerful psychological tool though, and I expect to see more unrealistic asking prices for listings once owners get the letter saying their house is worth more.”

I agree it shouldn’t be a surprise. The unrealistic owners should check VREB: AVG for Single-Family-Greater-Victoria down -7.6% for November compared to October and -5.7% compared to November last year. About $70,000 down in just one month.
Maybe people think November is usually a “down” month, which is not because last year it was an “up” month. Same for 2016, it was an “up” month. A big “up” month in fact. Here are some numbers about November.

2016 10.2% (LM) 37.2% (LY)
2017 5.6% (LM) 5.9% (LY)
2018 -7.6% (LM) -5.7% (LY)

LM — means compared to last month (i.e. Oct)
LY — means compared to same month last year

A similar picture can be seen if median is used instead.

And that could be bad news because housing investment is more important to Canada’s economy “than at any other time on record,” Tal and Mendes wrote.

Rant time!

One of the things I am really understanding more and more of, is how aggressive and useless this market information “machine” is, from people with vested interests.

Look at the quote above – almost anyone could have determined this years ago with an hour or two of study. I mean, seriously? You’re just seeing this now? Bulls**t. Anyone who has been looking at the data knows full well that anticipating a downturn isn’t genius, perspicacity, clairvoyance, or insider information. It’s simple market dynamics unfolding as a consequence from loose credit combined with a compelling story (Chinese).

The first signs of the contraction appeared almost 3 years ago in Vancouver, and yet as recently as a few months ago, that same guy above was all up, up and up – the same as many analysts, RE boards and even governments. It was as if everyone in society collectively gave not a single thought as to how Canadians would be able to access enough credit to continue to drive the market higher. Indeed, the RE market as a whole runs on credit – it’s not the same as candy bars, stereos and drywall. I ask myself, how the heck do people not pay attention to this most basic principle? Where do these analysts go to school?

This is why housing bubbles are far easier to identify than stock bubbles. Sure, RE speculators can come in, and can even dominate the market for a time. But sooner or later, that retreats and we’re once again left with the elemental variables – residents of a human community that need shelter, that need to pay for that shelter, and must pay for that shelter by participating in the economy. Market can’t pay the prices? Use credit. Can’t get enough credit, or the credit costs too much for the market to bear? Prices have to fall or there’s no market. This is grade 10 stuff, folks.

And here we are, with the data getting worse all the time. And now that it’s deteriorated to the point where there’s no plausible way of denying it, all these pundits are blithely acting like – well yes, of course markets correct. We’re too reliant on RE as it is, and that’s a problem with potentially unpleasant consequences. Then they downgrade their rosy forecasts, then downgrade again, then again, then again, and it’s all just so surprising.

Thanks, tweedle-dee and company. Real useful.

Interesting !!

LeoS: Thank you for the numbers; I am sure we are all grateful for all your hard work.

Agree on that post from Beancounter! 🙂

Other than that, your list is arbitrary and capricious. 😛