Feb 25 Market Update
Weekly sales courtesy of the VREB:
| February 2019 |
Feb
2018
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 56 | 152 | 259 | 341 | 545 |
| New Listings | 91 | 308 | 454 | 621 | 837 |
| Active Listings | 2001 | 2063 | 2059 | 2100 | 1537 |
| Sales to New Listings | 62% | 49% | 57% | 55% | 65% |
| Sales Projection | — | 535 | 492 | 415 | |
| Months of Inventory | 2.8 | ||||
Last Monday I said I expected the sales that we missed due to snow to be made up the following (aka last) week. I was gathering some data for an article to illustrate the effect of snow days on sales, and how those sales would just get pushed to after the snow. Well I was wrong. Or rather, the sales that would have happened during the snow surely did happen after it melted but they weren’t enough to prop up the slowing market to match last year’s sales rate, let alone surpass it. The weeks this month compared to last February went from a 4% increase in sales, to a 1% decrease, to a 17% decrease, to 25% last week.
At this point we’ll be lucky to hit 420 sales for the month which would put use well below the long run average (530) and close to the slowest years when February sales were at just 400.
New listings also took a beating during the snowy days but seem to have roughly recovered to last year’s levels.
Not exactly the start to the spring season that the industry was hoping for.
Huge drop! I hope things recover, or has the government gone too far in regulations?
Preview of February numbers: https://househuntvictoria.ca/2019/02/28/february-preview-market-cools-further
Patrick,
The only way I could understand the amount of effort you put into supporting your ideas on here is if you’re collecting a per word paycheck from our local real estate cabal.
What’s your goal?
They lost a very great deal more than that in 2008. While that was the GFC to be fair, but housing definitely them until CBs put rates to the floor. This time around, they don’t have nearly the same room to move the rates. Would be surprised if their share prices only went down 2-3%, especially ones who’s operations are more concentrated domestically.
It’s being circulated in the media atm that these banks are starting to build up their loss provisions…they can see the writing on the wall as well as anyone.
As the saying goes, don’t listen to what they say, watch what they do.
Yeah its not the point. They are a barometer of the health of the economy.
Better still, would be to come up with current articles where the alarming “doom and gloom” headline is actually supported by the content in the body of the article.
Headlines you post like “worlds most expensive property market is crashing” turns out to be Hong Kong down 9% from all time high (after a 400% run up from 2003). Why bothering to post that here, unless you naively think that down 9% is “crashing”. The word “crash” only appears in the headline, not the article. They do that so that people like you that self-select and goal-seek their news by searching for keywords like “crash” will find these articles and view their ads. Misinterpreting these type of articles has caused people here to miss out on a huge, perhaps once-in-a-lifetime housing bull run of 50% in the last 5 years.
Here was the article you linked to… did you even read it?
World’s most expensive property market is “crashing”
https://www.smh.com.au/business/markets/the-world-s-most-expensive-property-market-is-crashing-20190227-p510gh.html
The big 5 banks:
Yeah but the banks make so much profit, that they are just making a little less when the market tanks. Their earnings have been less than expected, but their stock only drops 2-3%. Where as any other company comes up short on earnings, their stock tanks 10-20%
Barrister thanks for the offer but I must stay invisible. 🙂
I did my best for you, Gwac. Sorry.
Hey Hawk sorry I mean Local you forgot to post TD`s bad earnings this morning that show mounting bad debt… The biggest issue for housing is our pathetic economy. Time for that moron in Ottawa to lower taxes and do something to support business growth/spending.
The big 5 bank results are a wake up call for the people running the country.
While I’m at it, here’s OSFI’s mandate (the agency responsible for the stress test). Have a look at the part where they mention security and preservation of the housing market.
OSFI’s mandate is:
Fostering sound risk management and governance practices
OSFI advances a regulatory framework designed to control and manage risk.
Supervision and early intervention
OSFI supervises federally regulated financial institutions and pension plans to determine whether they are in sound financial condition and meeting regulatory and supervisory requirements.
OSFI promptly advises financial institutions and pension plans if there are material deficiencies, and takes corrective measures or requires that they be taken to expeditiously address the situation.
Environmental scanning linked to safety and soundness of financial institutions
OSFI monitors and evaluates system-wide or sectoral developments that may have a negative impact on the financial condition of federally regulated financial institutions.
Taking a balanced approach
OSFI acts to protect the rights and interests of depositors, policyholders, financial institution creditors and pension plan beneficiaries while having due regard for the need to allow financial institutions to compete effectively and take reasonable risks.
OSFI recognizes that management, boards of directors and pension plan administrators are ultimately responsible for risk decisions and that financial institutions can fail and pension plans can experience financial difficulties resulting in the loss of benefits.
In fulfilling its mandate, OSFI supports the government’s objective of contributing to public confidence in the Canadian financial system.
http://www.osfi-bsif.gc.ca/Eng/osfi-bsif/Pages/mnd.aspx#
Now for a little doom & gloom for your sunny Thursday afternoon…
Only 1 In 10 New Homes In Greater Toronto Were Bought Last Month
https://betterdwelling.com/city/toronto/only-1-in-10-new-homes-in-greater-toronto-were-bought-last-month/
Credit Concerns Emerge in Canada as TD, CIBC Miss Estimates
https://www.bloomberg.com/news/articles/2019-02-28/credit-concerns-emerge-in-canada-as-td-bank-cibc-miss-estimates?
Foreign investors are souring on Canada, which could hit the Canadian dollar
https://outline.com/8jbes9
World’s most expensive property market is “crashing”
https://www.smh.com.au/business/markets/the-world-s-most-expensive-property-market-is-crashing-20190227-p510gh.html
British Columbia sees country’s largest dollar volume decline in RE
https://betterdwelling.com/the-dollar-volume-of-canadian-real-estate-sales-off-to-a-weak-start-in-2019/
Maybe I should re-dig for some housing market articles from 1990. They sound exactly the same, just like all the assurances from pundits that no matter what was happening, it was “almost over”. Or, the need to play the blame game, the debate about rent controls, no supply, no land…Haha. Humans have such fickle memories, but with the internet there’s no excuse.
B.C. mining a “treasure trove” of housing data with new vacancy-tax declaration form
A prominent Vancouver immigration lawyer and other experts are praising the surprising amount of information that the province has demanded on the declaration form for its new Speculation and Vacancy Tax (SVT).
They say such data, which includes social insurance numbers, will finally enable governments to nab foreign and domestic speculators who are reaping windfalls from property purchases without contributing their fair share of taxes.
Now, with social insurance numbers tied to property ownership, they say it’s a new day.
The collection of that extra income tax information is vital, says lawyer Richard Kurland, who has been outspoken on this issue for years, saying that the double whammy of failure to declare global income by wealthy foreign buyers, coupled with speculative buying practices, has lead to the current affordability crisis.
“It’s not a perfect system, but it’s a game changer,” he says of the SVT. “Locals were paying taxes on capital gains and foreigners were declaring their profit to no one – not Canada, not their home country – so they could afford to keep buying more and more property while the locals could not, because they had to give a piece of the pie in tax. And we were outbid.
As well, he adds, the new information will help in the battle against money laundering, which was revealed by a provincial report last year as occurring in casinos and real estate.
“That’s the plus,” Mr. Kurland says. “This is an effective tool against money laundering because you know who owns what. Then [government] can go, ‘Okay Mr. Smith, great, you bought and sold three houses for $1-million each. We looked at your income tax returns for 20 years and you have been earning $40,000 a year. Where did the money come from?’
“Now, you can ask the questions.”
https://outline.com/VGNAFT
The flower count is a great way to make sure that we reduce the number of out of town buyers
In other news, the Greater Victoria Flower Count starts in 5 days.
Ks112, are you getting excited?
https://flowercount.com/
Have you guys heard this yet?
As columnist Mike Smyth observes, “this clip is a gift to the NDP”:
https://twitter.com/j_mcelroy/status/1100998562681249792
Patrick, I totally agree with your last post. A 10 year mtg would be a good, logical, circumvention to the stress test. As for the answer to your question – the B-20 states: “At a minimum, the qualifying rate for all uninsured mortgages should be the greater of the contractual mortgage rate plus 2% or the five-year benchmark rate published by the Bank of Canada.” http://www.osfi-bsif.gc.ca/Eng/fi-if/rg-ro/gdn-ort/gl-ld/Pages/b20_dft_let.aspx
So by taking a 10 yr rate in this instance your actually qualifying for a lower mtg amount as you need to qualify at your 3.94% +2% instead of the benchmark rate.
This is listed as the reason for the B20 stress test: “OSFI wants you to prove you can handle higher mortgage rates when they arrive in the future.” https://mortgagepal.ca/b-20/
If we accept that….
I don’t think people who put 20% down, and take out a 25 year mortgage with a 10 year term, 3.94% rate (http://www.mortgagearchitects.ca), should be subject to any stress test. (Currently they’d be subjected to a stress test for about 5.3% rate) They should be approved if they can handle the 3.94% rate payment that they will have for the next ten years. With a ten year fixed term, they are protected fully from “interest rate stress” for ten years.
At the end of 10 years, they have at least 43% equity in their house (20% from the down payment and 23% from the principal pay down) . And of course more equity than that if the house has appreciated in nominal terms with inflation. So prices would need to be, in 10 years from now, 43% lower than when they bought for them to be in a negative equity position.
Also, in 10 years, given typical inflation and demographic projection their income would be estimated to be up 25%. If interest rates have risen >2% by then, this could be covered by their higher income, or renewing at a shorter term with a lower rate (5 year). If for some reason they couldn’t pay, they have a 43% equity cushion, and have other options like refinancing the mortgage, or selling the house.
I get the idea that some prospective homeowners here would want as many people as possible shut out of buying for any reason, so that the pool of buyers is reduced, so would be in favor of the stress test applying to anyone except themselves.
Perhaps someone can confirm that someone with a ten year term is in fact currently subjected to the stress test as I’ve described, and justify why a stress test should apply to this case?
Cadborosaurus, if they bring back the 30-year amortization, consider getting it and making extra payments to principal such that your payments are equivalent to a 25-year (or even less). Just because you have a 30-year doesn’t mean you have to pay it off in 30 years. Think of it as an insurance policy; if you run into financial difficulties, you can stop your extra payments and simply pay your more affordable regular payment until the storm passes.
Probably not. My guess is still flat-to-slightly-lower prices for Victoria over the next few years.
Yes, leaving the stress test in place makes sense. Hopefully election politics won’t mess things up.
I realized afterwards that it’s technically a decline in real terms. Just fooling with words, I guess. And if an asteroid were coming, I can tell you they’d be bullish.
“How about a backyard full of iridium – a rare, valuable metal which can be yours if you act today!”
Leaving out the part where you’re dead through the course of it being deposited, of course.
https://www.vancourier.com/real-estate/b-c-home-sales-to-creep-back-up-over-next-two-years-bcrea-1.23644991
In fact the BCREA forecast for Victoria is flat within a rounding error. Personally the direction the market is moving in now would make me think that modest declines are more likely than “flat” in 2019.
We have to remember that BCREA is default optimistic. If a giant asteroid was heading straight at Earth they might issue a negative report. On the other hand they might figure out a bullish take on even that.
LeoS: An excellent summary.
On the industry pressure to relax the stress test (from twitter):
Re: are sales slumping because it’s hard to get financing or because it’s a declining market that could go further?
First time buyer. If we were approved for a higher mortgage today I would not start looking for a higher priced home. Same thing if we were approved for a 30 year term vs. a 25 year term. When I do the math on a purchase I look at the whole picture, and a short term ‘gain’ of a lower monthly payment because of a longer term to pay it back is not appealing at all, I’d rather pay it off on the short-term term with less interest. 25 years seems about right to me. That being said I’m sure I have peers who would be chomping at the bit for a 30 yr or longer mortgage if they could get one, and I hope they’re never given the chance. It’s irresponsible to give drugs to minors and also long term loans to first time buyers.
We can, but not into doing a large group meetup like before.
Intro. What do you think of that forecast? Do you think prices are going up this year?
Real estate forecast: Expect fewer sales, prices to inch higher
The number of Greater Victoria and Vancouver Island residential sales are expected to continue slipping this year — but to a lesser extent than in 2018 — while prices are forecast to inch up slightly, according to a new report from the B.C. Real Estate Association.
https://www.timescolonist.com/real-estate/real-estate-forecast-expect-fewer-sales-prices-to-inch-higher-1.23646899
Local Fool; How about an evening get together in that case? Maybe we need another meetup at the pub?
Thanks for the invite – you are very generous! Unfortunately I couldn’t make a lunch excursion work, as most days I’m pretty subscribed during that time and nowhere near Oak Bay. Funny, the last time I was in Oak Bay was when we had the HHV get-together. Remember that? 😀
Josh, while I often disagree with you, I certainly would say that you are both logical and articulate.
I’m an engineer married to a humanities grad and I have to say this is ass backwards. We both know plenty of engineers and humsies between the two of us, and the only ones that are consistently capable of thinking critically or articulating their arguments are the humsies. Thinking critically and articulating yourself is, in a sentence, precisely what humanities is about. Engineers will try to apply physics logic to human social dynamics, come to their own conclusions and then ignore all evidence to the contrary. Unless this HR person is an HR person for an engineering firm and they’re talking about engineering logic, then my experience has been the total opposite.
What a difference from the mantra of “you can’t time the market, just buy early (now) and HODL”. How much arm twisting did you have to do to get the truth out of a RE professional?
You’re not missing anything. People complaining are the real estate brokers. Who would find something else to complain about if it wasn’t “The reason” for this downturn.
GWAC: Can I buy you lunch one day at the Penny Farthing? Local Fool, I will pick up your lunch as well if you want to come along; assuming that you are not too confused to be able to find the pub.
You can bet on it. Regardless, just let me have my petty fun, please…
Local Fool: My views on both the housing market and the Canadian economy have not changed. If you review my old posts you will see that I believed that housing in Victoria was a bit overpriced in 2013 when I bought my house and I still believe that. Also if you carefully read my old posts you will note that I pulled my assets out of Canada years ago.
My confidence in the Canadian economy has not changed.
You might be confusing my long term views with where I feel real estate might be over the next few years in Victoria. Different parameters and issues.
KS112: You were asking about foreclosures. G&M featured an article on this today:
Foreclosures increase as home values fall and mortgage lending tightens
A study published by the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) in late 2018 warned that there is typically a two-year lag between when interest rates begin to rise and when homeowners and consumers begin declaring bankruptcy in larger numbers.
“Rising interest rates during the periods of 1996 to 2000 helped fuel a 22 per cent increase in the number of annual consumer insolvency filings from 1998 to 2003. Interest rates increases from 2004 to 2006 fueled a 54 per cent jump in the number of annual consumer insolvency filings between 2006 and 2009,” according to organization’s report.
Given that rates began to rise in Canada in 2017, CAIRP is predicting more insolvency filings than average starting in 2019. Exactly how many remains to be seen.
https://outline.com/WqfZ6Y
Not a bear not a bull….We are in a consolidation period. Long-term due to our immigration policy prices keep rising and get out of reach for some people in the past who could afford.
As mentioned in the past I support 100% our immigration policy…only way to keep our economy going..to pay for our love of government programs.
You! 🙂
Local Fool: Who are you referring to by the way?
I’ve just seen two people go bear, right below. Gwac was already there on an honorary basis.
😀
Governments have a huge problem. No inflation/ little growth/ large debt both government and individual. Forget a recession but a depression could happen if things are not managed properly by governments. Such as trying to slow the debt bubble. Trump is not a stupid as you all think. He is trying to create inflation, larger US growth. Not succeeded yet. I am not a trump supporter just understand what he is trying to do economically.
I think the bank earnings were a big warning on the Canadian economy. Something has to happen to create growth in this country. Governments getting bigger is not the answer, destroying our energy industry is not the answer. The Canadian economy has serious structural issues that needs to be addressed. We cannot continue to be reliant on real estate but at the same time we cannot destroy it yet. This is why I think the feds will do something soon.
KS112: Indirectly you may have put your finger on a different problem, When the government sector rewards itself more than the private sector upon which it depends for wealth creation then there is a fundamental problem.
Ya, fair enough.
I may be missing something but B20, in my mind, has nothing to do with real estate prices. Rather it is solely directed at the fact that interest rates are at historically and probably unsustainablely low rates. Its main purpose is to prevent banks from imprudent lending practices which would threaten the stability of the banks should interest rates revert towards the more normal rates of about six percent.
That house prices are declining actually is a further danger to the banks loan portfolios since the equity of the owners is vanishing.
People are quick to forget that our six banks are not only backstopped by the government in large part but also are too big to fail.
While the press constantly talks about a housing bubble what we actually have is a credit bubble which, in my eyes, is as dangerous as hell. B20 was perhaps one of the few really responsible steps taken by government in the last decade.
In the long run, pricking the real estate bubble will help millennials far more than having them pile on totally unmanageable debt. On the negative side, it will expose the fact that Canadians have been living past their means for quite a while.
Maybe I will go reread the Great Crash to remind myself how politicians actually handle this type of credit bubble.
The graph is certainly stark but I would always be careful with normalized charts because they show the change from a certain normalized value. That is one piece of the puzzle but isn’t a fundamental per se. In that chart they normalized all house prices whatever they were in 2005 to 100. So one market may have been overvalued and set at 100 and another may have been undervalued and set at the same 100. Then if the first declines and the second increases it looks like the second is now overvalued when that may not be the case. Not to say Canadian prices aren’t very high but I prefer charts that are based on fundamentals rather than normalized change.
Lol viola do you know how much your typical family doctor makes after deducting expenses? Keep in mind doctors have no pensions
Government lawyers in BC starts out just under $90k and most of them will top out at $220k in a none manager role. Defined benefit pension on a 220k salary will roughly be somewhere around 130k a year assuming 30 years of service. So say at 60 (assuming a 30 year old start) you can call it quits, collect 130k a year for life and go work at a private practice or another entity if you are bored.
There are no national or international law firms Victoria, and from what I have seen, government actually offers higher pay for lawyers throughout one’s career progression provided they are not made partner at a successful practice.
There are two near-sure ways to make real money (when you have little to start with): 1) start a success business; 2) be a doctor. That’s it, really. Yes there are some very successful lawyers out there but for each one of them there are 5 toiling away in the shadows, eking out a living at 50-60k/year, paying back student debt to 40x years. That’s the reality that they don’t put on the shiny lawyer magazines.
Victoria Born,
Not every lawyer ends up being a partner in Victoria and not every Partnership is that profitable in Victoria. I know quite a few that quit private practice to be a government lawyer because the overall comp is just better. Plus you don’t have to deal with the sales aspect of being in private practice which isn’t for everyone.
“While the stress test served its purpose early on, requiring homebuyers to qualify at a “stress rate” that’s two-per-cent higher than the actual rate on a 25-year amortization period is unproductive now that the market has normalized to more reasonable levels.” – Christopher Alexander, executive vice-president and regional director of RE/MAX INTEGRA, Ontario-Atlantic Canada.
Yes indeed. Quite normalized, quite reasonable – time to ditch B20 and jump right in! Canadian RE is so awesome. 😛
Quite the reduction on 8449 West Saanich Rd.
MLS 397980. Went from 1M to 849k, which is also substantially below 2018 assessment. 4.5 acres, 181 DOM so far.
Could be a strategy change from biding time and hoping for a price insensitive buyer, to trying to jump ahead of the market.
While I still think it’s overpriced compared to what I would consider a nominal market, it’s not a bad deal in relative terms.
Local
Lol thanks for posting. His reasoning is what I think is going on in this banana republic. 🙂
Crashing a housing market in an election year not such a good thing to keep the selfie thing going.
LF “Not sure what you mean? I suspect there’s actually plenty of buyers; then again that isn’t really the issue.”
I just meant that if sellers are waiting for buyers to up their bids: (a) are there as many buyers as sellers waiting and (b) have those buyers already maxed out their bids? I believe the answers are ‘no’ to (a) and closer to ‘yes’ than ‘no’ to (b), therefore the idea of a stalemate with equal numbers on either side seems beneficial to maintain/unify the seller mindset to ‘not give in’.
“lets bring austrailia’s interest only mortgages and japans 100 year’s mortgage.. that will make affordable housing”
Or we could do what Sweden did and have no limits at all! 150 year mortgages for all!
Gwac,
You and Garth Turner are on the same page today.
https://www.greaterfool.ca/2019/02/26/stressed-out-2/
lets bring austrailia’s interest only mortgages and japans 100 year’s mortgage.. that will make affordable housing
A 30 year mortgage seems particularly beneficial to a first time buyer. It lowers their starting mortgage payments by 11% compared to a 25 year, improving affordability. Then in a few years, when their income has risen more than 11%, they could easily accelerate their payments so they finish in 25 years or sooner.
As income increases with inflation and job seniority, it makes sense for FTB to push the higher mortgage payments ahead a few years. It beats the alternative, which is renting, waiting and the uncertainty that maybe you’ll get to buy a house at some point in the future.
Thank you, Leo. The analysis is helpful: listings up, sales tanking, prices faltering.
Engineers v. Lawyers – no contest, LL.B./JD rules everyday, twice on Sundays.
In law, average income does not tell you anything because of professional law corporations where lawyers retain earnings and invest [which is why Morneau went after passive income]. The data on incomes does not consider professional corps which has allowed lawyers [and doctors and accountants] to keep retained earnings [paying the 13% small business tax rate up to $500K; 27% above $500K – and investing the rest – the 10 year bull market has created a mountain of wealth in these corps and the Feds want to tax us] and build up the GRIP account for future eligible dividends [that professional in retirement can earn eligible dividends of $52,000 annually form the GRIP account – tax-free]. LL.B./JD, CA/CPA and MD – nothing like the big 3 – steer your kids in to one of these. Engineers, if we look just at income, not worth the time.
The R/E market – this is working out according to plan. Just love it.
Thanks, again, Leo. Always enjoy the weekly update.
Allowing 30 year amorts for first time buyers only will lower average selling price even more and freak everybody out. Do it CMHC. I dare ya.
If you want to decide for yourself, pay with your own money. If you want to pay with borrowed money, you have to follow someone else’s rules.
This is interesting provided it doesn’t re-inflate the market. Let’s say a 30 year term for a 750k house with 10% down nets you a savings of $400 per month (vs a 25 year), which you dump into an investment account earning 5% annually. At the end of 25 years that account would be worth 240k. You’ll have about 80k more in interest to pay over years 25-30 for the house, but it still seems to be a positive if you are a passable investor.
Yes. Otherwise, people would be able to get out of the tax by listing for a price that nobody was willing to pay. Which of course is why those houses aren’t selling.
Sub prime: 16.0%
Higher than I thought it would be.
They won’t buy in a cratering market. Vancouver detached (bench, aggregated) is already down 9.1% YOY, and the numbers are not getting any better. The smart money will come in again eventually, but that’s probably not going to be for a while.
Local Fool,
I am not sure it will discourage investors as the cash-flow for investment properties will improve.
I still don’t think it’ll subvert the cycle. If 30 year amortizations came into effect, you might paradoxically see the average prices drop faster (at least for a bit) because the market participants are changing – less liquid FTB’s rush in while investors and speculators suddenly are not wanting to play. Some FTB’s who don’t see what’s happening might do this, but there’s only so many of them even with the slight improvement in affordability that 30 years would give. The fact is, people are drowning in debt and the market was starting to roll over quite some time ago.
Keep in mind, these “rescue” policies are par for the cyclical course just the same as the “suppressive” policies were. And they’re always too little, too late.
As an aside, other regions with 30 year amortizations, heck – even 30 year terms, are seeing precipitous declines in sales and recently, prices.
I be very curious as to the effect it will have on the Vancouver market as the general public is aware that the real estate market there has turned bearish. It would be interesting to see if people would be lining up to buy just because they can get a higher mortgage.
Patrick-The simple answer is no the buyer can’t decide for themselves. If you offer a kid candy they’re going to take it. If you offer Canadians more debt to drown in they have already proven that they will take more. The people who do choose to take the 30 year mortgages are increasing the price of homes for everyone including themselves as prices are just starting to drop. We have large debt and housing affordability issues here and the 30 year mortgage makes both of those problems worse. Adding an extra 75k in interest payments or more to a first time buyer in Victoria for a house here and increasing the price of that home are not going to help these first time home buyers that the govt says they want to help. It will do the exact opposite. What is going to help them is not implementing these new rules to try and prop up the market and just allow the cooling trend to continue which will result in lower home prices and make your monthly payments and debt level much lower
If you don’t like that, don’t get a 30 year mortgage, get a shorter one. But are you also wanting to prevent someone else from gettting a 30 year mortgage, even though it makes their house monthly payments 11% more affordable, based on the standard affordability metric of mortgage payments divided by income? Who says 25 years is “right” and 30 years is “wrong”? Can’t the buyer decide for themself?
First-of-its-kind registry in B.C. targets under-the-radar condo flippers
https://www.cbc.ca/news/canada/british-columbia/condo-and-strata-assignment-integrity-register-1.5032714
Not anything, just things that don’t really have an air of reality. Things that do are rising wages, longer amortizations, growing population, low and lowering interest rates and CB’s pumping trillions more into the financial system.
Each one of those has counterarguments, but they are defensible. IMHO, supposing that the federal Liberal Party might tell OSFI to trash or modify B20 because it’s hurting their chances of re-election, isn’t.
“Increasing from 25 to 30 years allows borrowing and qualifying for 11% more for the same monthly payment. That improves affordability by 11%, since affordability is measured in monthly payments to income.”
It lowers your monthly payments but for an average priced home in Victoria it would just add a massive increase to your total interest payments. It also drives the price of homes up even further and encourages more speculation in the market. First the government says the market is overheated and implements measures to try and cool it. Now that it has just started to cool they want to try and prop it up. With debt loads at record levels how does it make any sense to encourage people to load up on even more debt.
“Lowering your payment gives a little more wiggle room, and improves payment “affordability.” This is how the government, banks, someone profiting from your mortgage, and idiots look at the numbers. The government and industry always forget to mention it’ll cost people more… a lot more. ”
https://betterdwelling.com/canadian-government-considers-move-to-load-households-with-more-real-estate-debt/
Local
lol anything that does not support your crash theory is dismissed. All good enjoy your crash wait. 🙂
In a banana republic, they might work that way. Otherwise, the feds telling OSFI to dump B20 so we can all get million dollar mortgages would completely subvert the entire purpose of the agency.
Local OSFI does what the government tells them to do….Period.
The much talked about Victoria housing affordability graph is based on 25 year mortgage. Current level of 55% is high, but if expressed based on a 30 year mortgage it would fall by 11% to 49%. That level of 49% would be similar or better than seen in 2009-2011 and other periods (for 25 yr mortgages).
And of course that affordability graph is for the first year only, affordability each year improves as your income goes up and your mortgage stays the same. For example if income rises 3% per year, after 5 years that 49% number (30yr amort.) becomes 49/115= 42.6% which is about the 50 year affordability average (25 yr amortization).
Affordability graph is here…
https://househuntvictoria.ca/2019/02/19/feb-19-market-update-2/#comment-56654
I am very curious to see what the 30 year amortization does to sales. Right now what we don’t know if sales are down mostly because its hard to get financing or if its down because people don’t want to buy into a declining market.
That really was a terrible article. The comments underneath it are golden.
What this real estate agent is essentially saying is, We want stimulative measures to the housing market so that people can amass debt levels huge enough to support the current valuations.
They don’t care one iota about first time buyers or their fiscal health, and it doesn’t indicate the winds of anything other than a predictable industry who can and will pull out all the stops to preserve the interests of its members. They’ve been whining about this for months, so much so that OSFI actually responded directly to those calling for it to be culled.
OSFI doesn’t really care about the housing market. That’s not their focus, or their mandate. They even said recently that the solution to extreme debt levels cannot be more debt. They care that banks are lending prudently, and at these extreme valuations that means less lending. Phil Soper and his team’s desperate caterwauling isn’t going to fan the winds of change any more than me petitioning for the Baldwin brothers to win a beauty contest.
Federal NDP and RE industry on the same page here
https://www.whichmortgage.ca/article/ndp-proposals-on-30year-loans-welcomed-by-mpc-254724.aspx
“NDP proposals on 30-year loans welcomed by MPC”
Increasing from 25 to 30 years allows borrowing and qualifying for 11% more for the same monthly payment. That improves affordability by 11%, since affordability is measured in monthly payments to income.
@DavidC Its tough, livin’ in the sprawl.. with the rise in Victoria’s cost of living and interest rates on the rise, I would expect to see dead shopping malls rise like mountains beyond mountains… and there’s no end in sight.
The conversation about the stress test is starting…I am neither for or against them changing I am just reading into how the wind is starting to blow and how we may see some changes.
“The bottom line is that the Canadian government needs to find ways to support, even incentivize, homebuyers in Canada (especially first-timers who are facing challenges entering the market) rather than penalize them. While the stress test served its purpose early on, requiring homebuyers to qualify at a “stress rate” that’s two-per-cent higher than the actual rate on a 25-year amortization period is unproductive now that the market has normalized to more reasonable levels”
https://business.financialpost.com/opinion/the-mortgage-stress-test-has-started-harming-canadians-more-than-it-helps
@ Local Fool,
I certainly wouldn’t be able to keep my house at 20% rate, heck 12% is about the maximum that I can handle (my other half would have to get a job if rate get higher). That said, can you buy a SFH in Victoria today if we lose 41% value at 20% rate?
BOC can influence the long-term rates and any other rates they don’t directly set to a degree gawc.
KS BOC has zero control over any rates other than the short term rates it sets. Rest are market driven.
Local all I care about in forecasting is land/interest rates and population growth. That’s all for determining long-term trend in real-estate. The rest is noise that may slow the trend down but will catch up later on…
Desirable cities have little useable land
interest are going no where
We are letting in 1m people every 3 years.
I agree, but you can look at it deeper than that. The issue fundamentally is the degree of leverage. If I carry a $1.00 balance on my Visa, a 100% interest rate is superficial. If I carry a $10,000 balance, a rate of even 50% would be devastating.
Sky rocketing rates was the buss killer to everything in 1981 so maybe that should have been the point of the article. 🙂
Local we don’t agree and personally none of it impacts me either way. So really this only impacts you and your desire for a house. Best of luck…
When that article was written and everything was hotter than a firecracker, the prime rate was already 22.75% and had been at or near 20% since December of 1980. Wasn’t stopping anyone then. Interestingly, the bubble went on for a few months after that, and actually popped when rates started to decline.
Not faith, just data. Besides, rocketing interest rates wasn’t the point of my rebuttal.
It’s not about that. When you see a RE market have prices rise on declining volumes (which we did), that is a sign of a consumer that’s tapped out. Technically they call it market exhaustion. That doesn’t just undo itself with a policy shift. This is why it’s called a cycle.
Banks and their latest results show lending growth in Canada stalled. If ya think the banks and Government are going to sit back and let this happen doubt it. You will soon see the war on mortgage growth end with government loosing rules. Banks results were piss poor on the Canadian side.
“I don’t have good data on that as foreclosures are harder to see and track than in the US.”
I don’t think there is any foreclosure data publicly available in Canada. There is the arrears rate for big bank mortgages, but it’s four months behind and only goes to the provincial level.
https://www.cmhc-schl.gc.ca/en/data-and-research/data-tables/canadian-us-residential-mortgage-arrears-foreclosure-rates
https://cba.ca/mortgages-in-arrears
For foreclosure numbers, you could check the Supreme Court daily list and start manually keeping score.
My only other thought is that maybe there is a way to tease that data out of MLS, but probably not because I doubt foreclosures are flagged in the system except via the description (e.g., as is where is), which would be super unreliable. You’d get estate sales mixed in there, different realtors enter information differently, etc. Boo Canada.
gawc to be fair, lots of people are stretched on 2% currently. As far as where rates will go, no idea but BOC doesn’t have absolute control over long-term rates.
Yes local 1981 and 20% interest rates. Keep the faith up… 20% interest rates here we come or is that 2%.
From Gwac’s article, written February 26, 2019:
“The market for industrial space is so hot in Vancouver the city may run out of land for the sector, according to brokerage CBRE Ltd. “There is a critical shortage of industrial land in Vancouver,” Paul Morassutti, vice chairman at CBRE Canada, said by phone. “It was our estimation that they could potentially, literally run out of industrial land by the early 2020s.””
From the Globe and Mail, written April 20, 1981:
“The value of commercial and industrial building permits last year reached $881-million, a rise of 9 per cent. That, along with the $1.75 billion in housing permits, contributed to a record annual $2.95 billion in total permits. Peter Maddocks, vice-president and general manager of B.C. commercial operations for A.E. LePage Western Ltd., said the activity is continuing. Demand is strong for business and industrial space and a lot of developers’ applications are still being processed by the municipalities.
Very little industrial land is available for sale. The industrial parks are leasing, not selling. Most of the unoccupied industrial land is owned by big companies, and the supply within convenient reach of Vancouver is quickly diminishing.”
Land values dropped 41%, soon after. Not saying it’s predictive, just giving people some perspective on claims that things will “never be affordable again ’cause of no land”. That claim pops up regularly throughout history.
I don’t have good data on that as foreclosures are harder to see and track than in the US. I have a few anecdotes that say yes, but from levels that were extremely low by comparison to previous cycles.
One firm in Vancouver that specializes in doing foreclosures indicated that they completed only 1 for the entire year of 2018, which was crazy low. For 2019 so far, they’ve reported 9 (last I’ve heard). So that’s a statistically huge increase, but tiny in absolute terms.
2019 should see quite a bit more though, especially from the condo pre-sale sector.
When land gets unaffordable it does not mean it will come back to affordability. It means only a certain % of the population will be able to afford it.
This is industrial but all usable land in the major hot spots of Canada is disappearing. That is the biggest issue with affordability going forward.
https://www.bnnbloomberg.ca/vancouver-may-literally-run-out-of-industrial-space-by-2020s-1.1220059
As someone who often sees the aftermath of a career in first responding, I can assure you they earn their money. Remember, when every fibre of your being drives you to run away, they have to run toward.
Local Fool,
Has foreclosures increased in volume in the Vancouver Market yet?
I have a question, from time to time, I see houses for sale that are empty and a few of these have been on the market for a really long time. Will the new spec tax apply to these homes?
Little anecdote pulled from Bill Ferguson’s MVHC page:
“I just did some electrical work for a gentleman who was the President of the Vancouver Island Real estate board a few years back.
He has bought and sold real estate for thirty five years while running multiple businesses that were related to the industry. I asked to pick his brain when my work was done.
He told me that I should wait another six month to a year at least. He said he has seen this exact scenario play out a hand full of times in his years in the business and that house prices were too high.
He then said to wait to see foreclosures starting to hit the market. I asked him what he thought about all of the trades people who financed their houses based on jobs that won’t be around when things slow.
To which he said “it happens every time”
The last thing he told me was that it took him six months to convince his business partner to sell some property they owned during the peak. As he was fairly sure that was peak price.”
I love this! We used to call this “finding your happy place”….
Jamal, I am referring to the pay bands in core government. If u compare them to other provinces, BC is definitely low. I don’t know when the last time pay bands have been adjusted. For example, the executive director is a position where most intelligent and educated folks top out at in core government, I think the pay for that caps out at $127k. CRD managers have salaries that top out in the $120k range with alot less responsibilities.
You can’t forget about the DB pension in the public sector though. If you have a $70k a year pension that’s like saving an extra million for retirement.
Victoria is unique in that because it lacks large private sector employers, the pay at the public sector is probably more for the same job.
yup .. while private sectors gets a boost in salary in the last few years,,.. GOVT workers are getting wage increase that is less than inflation.. in health care.. most people are only getting 2% increase for the next 3 years and less than 2% in the last 3 years
David C, I would say that within core government the pay is actually pretty bad (don’t think u top 90k unless you are director or above). But most people’s with some intelligence and ambition are able to find greener pastures.
Anyone with a CFA in this town is either already employed or actively trying to be employed at BCIMC. Unless they are a very successful investment advisor with a very large book.
i believe there are plenty of buyers too …. desires to buy does not equate to ability to buy
Both private and public sector employment carry their own distinct advantages, and different people will gravitate to one or another. Being in any job you dislike is challenging, regardless which side of the fence you’re working on.
But if you believe your life has no purpose by virtue of your job, your problem isn’t your job, it’s you.
Leo, I think BC assessment said 770k, unless I read wrong. Oh prob the gst
Government employees earn a decent wage in this town, but after 5 years they are tainted goods and would struggle to get job in the private sector. Within government the pay is reasonable, but life has no real purpose, and after each passing day those feelings will swim to the surface.
Someone may have a 4 year econ degree. A CFA, working in gov, looking for love. It’s time to quit these pretentious things and just punch the clock.
$801k..
To be fair they have dropped it $110k in the last year. We’ll see if that’s enough.
Depends on the market segment. Single family already in balanced territory, moving towards buyers market. Condo should be out of sellers market territory for this month as well.
Same pace of $1m+ sales as last year.
Some rumours there is something coming in the budget March 19th
Ontario stats:
1/3 of engineering grads end up working in engineering or engineering management
1/3 end up working in another career that requires a degree
1/3 end up working in a career that would not have required a degree at all.
Thought that was interesting.
My desk is turbocharged. Just kidding I only drive electric.
Looks like this one is back on the market for the exact same price as couple months ago. why not change the price and have it at $1,888,888….
https://www.realtor.ca/real-estate/20363188/3-bedroom-single-family-house-4565-duart-rd-victoria-gordon-head
@ C E
Nope, no english minor. Lawyers draft up the official language on transactions at work. As for internal / transitory presentations and memos, I typically do a quick proof read. Definitely don’t do that when posting on here using a mobile device.
Not sure what you mean? I suspect there’s actually plenty of buyers; then again that isn’t really the issue.
No English minor though?
Looks like 3956 sannich road sold for 770 in 2016. So not sure if they didn’t a Reno or not.
Throwing this out there in hopes that the owner/realtor of 3956 Saanich Road might see this. We all know that your home has been on and off the market at the near-same price point since you purchased it in late 2016. We all get notifications each time you list it. Can you please do everyone a favor and either take it off the market for good or sell it already? As you may be beginning to see based on the difficulties that you’ve experienced trying to sell it over the last couple of years, your asking price is a bit unrealistic and nobody thinks it’s worth that much but you and/or your real estate agent. Have a good day sir/ma’am. Sincerely and respectfully, Wolf
“I will almost guarantee the CRD will not fill that job with someone who has 15+ years experience.”
I agree, which is why I said 12-15 years experience, not 15+.
“Do you think they’ll say no thanks to someone with 8 years of quality experience instead of the posted 10?”
Depends. It’s extremely subjective. Kind of sounds like it may be a desperation hire if they can’t get the candidate they’re looking for which makes you wonder if you want to work there in the first place. I’ve never seen a well-qualified/over-qualified candidate get picked over but obviously what we have each witnessed differs. To each their own.
@ Wolfe
If someone is not satisfied with their pay then they are free to get another job that pays more. But clearly my interpretation of a Professional Income is different compared to yours and that’s ok.
As far as that crd posting goes, I have seen plenty get hired with less than the posted experience at various places. Do you think they’ll say no thanks to someone with 8 years of quality experience instead of the posted 10?
On the contrary it’s actually the overqualified candidates that have trouble getting these jobs. I will almost guarantee the CRD will not fill that job with someone who has 15+ years experience and previous senior level leadership experience.
(From the previous thread:)
Ks112 wrote:
You’ve done some amazing work around here, Sherlock. I’ve always stated that I bought my place for $500-something. I’ve never concealed that we needed dual income + suite income at the beginning. I don’t believe I’ve ever denied that our parents kicked in 25% of our down payment. My house has appreciated. As mentioned prior, +65% (2010 to 2019 BC Assessment).
Usually, couples combine net worth until they part ways. If you enjoy splitting my net worth in half, knock yourself out.
It has indeed been a miserable, uncharacteristic February weather-wise. But it’s been a lot worse in the rest of Canada. It’s currently -20°C (wind chill -28°C) in YYC, and it’s been like that for most of February. What’s it like in Summerside, PEI (a.k.a. Cheap Victoria)? Tomorrow’s forecast high is -13°C and wind gusts up to 80 km/h will make it feel like -28°C.
Victoria is still the best place to live in Canada 🙂
“When buyers and sellers are at a stalemate after a market peak”
Is the jury in on whether we actually have a stalemate, or is that optimistic propaganda from sellers? It’s apparent from MLS that many prospective sellers are trying to stand their ground but how many prospective buyers are on the other side? Personally I don’t know anyone who’s looking to buy. People that were either already did or are well-priced out.
“https://www.crd.bc.ca/about/careers/current-opportunities/job-description?id=3454”
My anecdotal evidence suggests that experience requirements in postings like these are minimums. Postings ask for “degree + 10 years experience + professional designation” but the person who gets the job has multiple degrees and 12-15 years experience plus professional designation. I also recall people doing just this and taking 20% pay cuts to boot. Either way, the census data suggests that a dual-professional income household making $180,000 might be in the top 8-10% of Victoria household incomes and is not the norm.
“No way in hell do I accept being out earned by [someone] with a 2 year diploma… when I have a 4 year degree [and] a globally accepted professional designation… I personally felt that I should earn more [than them] and took steps to do so.”
Many/some here with more credentials than you probably feel the same about your lone 4 year degree and professional designation. Don’t be so quick to judge; perhaps you’ll need (and see the value in) police or fire services some day.
In fact Oz has banned foreign ownership of existing properties, and allowed foreign ownership of new properties, for many years. There has been no “crackdown”.
Some states do have a foreign buyers tax. The highest is New South Wales (Sydney), at 8%.
https://www.afr.com/real-estate/8pc-is-nothing-australias-foreign-buyer-taxes-are-competitive–knight-frank-20180516-h104o2
I guess maybe for those currently priced out, another solution would be to see if you are underpaid in your current job. If the CPA wife here that earns 70k a year at the provincial government goes and gets the same job at the CRD then there would be a 20k increase in salary and whatever the associated increase in affordability maybe.
ks112; You are correct but the norm is 3yrs. Requirements also vary in each province.
Barrister,
I am pretty sure you can get admission to law school after 2 years of undergrad, obviously that is for keeners only.
To be fair it takes about eight years to earn a law degree (depending on the province) so if you are comparing salaries you need to compare engineers with advanced doctoral degrees.
Here is the salary grid for Vic PD, $100k after 5 years
https://www.vicpd.ca/benefits-wages
Jaleek, outside of entrepreneur or any successful high commission sales job (ie. investment advisor, realtor). The highest paying job in Victoria is at BCIMC.
On the investment side the typical all-in cash compensation progression is as such: Analyst: 110k-140k, associate PM: 170K – 210K, senior associate PM: upwards of $300K, PM: upwards of $500K. The heads of asset classes are in the low 7 figure ranges.
However, although it is a public entity this is an atypical firm compared to the rest of the public sector as it is essentially a wall street job and will need to pay accordingly to attract talent from around the world. Downside is that if you get laid off or fired then you are most likely SOL in this town trying to replicate that income.
Just a note or two
The richest guy on my street was a college educated finish carpenter – made me think that’s where it’s at.
As for cops and training – the RCMP have an additional 6 months of training at a minimum 7.5 hours a day – that beats out the 20-30 week for 8mths x2 additional years for an engineer. And whatever a cops salary is they can almost double it in overtime if they want
Anywho – I don’t know the training requirement of the municipal police force but being a cop firefighter ERT are putting their lives on the line everyday so kudos to them
Looking forward to the data from the condo flipping registry https://www.cbc.ca/news/canada/british-columbia/condo-and-strata-assignment-integrity-register-1.5032714
420 sales this month, you say? Oh well, I guess it’s all going to pot …
I bet you 10 bags of nachos that, since the legalization of cannabis last October 2018, sales have dropped off a cliff. For real. A real downer.
It can’t be the high prices, right? So, maybe people are too stoned to make an offer.
Leo, do you have a chart for that? Pass it my way, man.
@ underachiever
Those who feel like they should earn less than a cop or fireman are free to accept a lower wage. I personally felt that I should earn more and took steps to do so.
Leo if sales stay low (based on average for low sales the last few months) and listings stay similar to last year when will we switch from seller’s to buyers market according to inventory? (Ballpark answer)
Wow. Not to mention you get to drive a desk all day, safely in your office, far away from the types of people/situations police officers have to deal with.
Barrister, are you implying that experienced lawyers in Victoria make less than experienced engineers? I am not particularly in tune with private sector lawyer pay in Victoria, but public sector experienced lawyers are usually in the $130k and above range. Vancouver new associate salary at a national/international firm would be close to $100k a year all in (on an hourly basis its crap though).
Whats wild to me is that at the partner level the billable rate at a national/international firm in Toronto is sometimes close to double ($1100/hour) compared to Vancouver ($600-$700/hour), and this is at the same firm… Anyways that’s off topic
agree – for example – in electronic related departments 2 decades ago- Pro.engineers are required to sign off small repairs and modifications and take the blames .. now they just ship out defected items and buy new one ..
many engineering degrees will only grant you entry level jobs now
+1
Lawyers in Canada earn on average far more than engineers. So it seems like the market signal being sent is that we need MORE lawyers and LESS engineers. I agree this is crazy but it is what the market is telling us.
On a personal level if I was advising my son or daughter I might tell them that engineering is in some respects a “better” career than law but I would also have to tell them that they are likely to make more money as a lawyer.
Of course my kids still want to be superheroes which is ALWAYS a respectable profession.
they are pooping out more engineers than ever .. but we all agree, arts and philosophy degrees is the best way to go 🙂
https://engineerscanada.ca/publications/canadian-engineers-for-tomorrow-2017#postgraduate-degrees-awarded-gd
Logically near identical goods SHOULD be priced more or less the same on either side of the border so that when the Canadian dollar rises our Canadian dollar prices should fall and when the Canadian dollar sinks our Canadian dollar prices should rise. Mostly this is what happens but not always.
Barrister mentioned cars. Car prices in constant currency are sometimes cheaper in CAN and sometimes cheaper in the US. They are generally cheaper here (in USD) when our currency is low and more expensive (in USD terms) when our currency is high. So car manufacturers don’t just adjust their prices based on the exchange rate they also seem to expand and contract their profit margins in Canada
KS 112: Our universities have been allowed to become seriously detached from the needs of the economy. Too few engineers and far too many lawyers. A large portion of the humanities have little or no practical utility. A friend of mine in Toronto who heads a major HR department said in confidence that even the basic ability to write clearly and think logically seems to be completely lacking in so many humanity graduates. He is angry that so many young people have invested years and tens of thousands in earning next to useless degrees in terms of earning a living. Makes one wonder what the parents are thinking.
Are $800k homes in Australia going for $650k now? or is it similar to Vancouver where 1.5M homes are going for 1.2M?
That’s what’s said every time; no bubble could be a bubble without enough people intractably convinced of that. Another thing that you will always see – irregular lending, fraud, and other forms of misfeasance. Typically, you don’t really see it until after the peak, when the books are opened. Here in BC, we’re starting to get whiffs of it. In Australia, it’s further along and has a bit of a different focus.
Forced End of “Ponzi-Like Leverage” & “Fraudulent Lending” Turns Australia’s House Price Bubble into “Property Bloodbath”
“The over-ripe bubble was pricked not by rising interest rates – the Reserve Bank of Australia’s policy rate remains at record low – but when bank regulators finally started to crack down on some of the bank-lending shenanigans required to inflate that kind of bubble, and when the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (RC) was established in December 2017 to investigate those shenanigans and then started “revealing an epidemic of crime.””
https://wolfstreet.com/2019/02/20/forced-end-of-ponzi-like-leverage-fraudulent-lending-turns-australias-house-price-bubble-into-property-bloodbath/
I don’t think a lot of people here understand just how pervasive and unshakable the notion was of ever rising prices in Australia. It was like the sun rising in the morning, or something. I do suspect it was considerably more acute than Vancouver. A lot of folks are getting burned – you like to think lenders and leaders understand basic math and history and make good decisions, but the fact is, it doesn’t work that way. They’re just as vulnerable to group-think as the rest of the masses.
They said it couldn’t happen. They said it was different this time. They said prices in Australia were solid and might plateau but would never decline. That was last year and the year before.
Today key markets in the most desirable areas are now down 13% from their peaks and the experts are now saying the decline will go to 40%, some even predict 50% price declines.
Very interesting parallels to the situation in British Columbia, Australia cracked down on money laundering and foreign ownership about one year before British Columbia did the same.
https://www.news.com.au/finance/real-estate/selling/desirable-propertys-dramatic-13-per-cent-price-plunge-proof-of-downturn/news-story/c2631846838e62051d92ab6d6aff7f1f
Barrister, someone commented specifically on dual income “Professional” couples not being able to afford a home. That is the statement I disagreed with, I absolutely agree that the average couple cannot afford a house.
And your comment regarding being out earned by Police and Firemen. That is exactly my reason to jump ship from the $80k a year job 4 years ago. No way in hell do I accept being out earned by a cop with a 2 year diploma from Camosun when I have a 4 year degree with along with a globally accepted professional designation.
In the previous blog someone commented that they were shocked how much cars cost these days. If you take into account that cars are generally priced in American dollars I am not sure why the surprise. We are now operating on a 75 cent dollar which basically means you are a lot poorer today than you were a few years back in terms of purchasing power. I am now expecting the flood of reasons why this basic economics is not true.Sigh.
In regard to median incomes and housing purchases, one has to take into account that Victoria has a high ratio of both students and, especially retirees. it is better to look at family incomes by age group particularly in the 30 to 35 age level for first time buyers.
As to “professionals”, sorry both your services and income are not worth what they used to be. If you are a professional and making less than a thirty five year old fireman or policeman (include the value of their pension) than that should tell you something.
LeoS, as always thank you for a great job with the stats.
KS
Acreage/ Farm is what I am looking for… I do not flip Real estate.
@ Leif and anyone else who commented on what a Professional Income is. Here is an example I found on the CRD, this is a professional but none management/executive position.
https://www.crd.bc.ca/about/careers/current-opportunities/job-description?id=3454
When buyers and sellers are at a stalemate after a market peak, that’s not a “non-event”. That’s an active part of the correction process. Given what’s going on in Vancouver and similar cities across the world, I suspect this is going to get considerably worse before it gets better. True, most sellers will attempt a hold-out. But not all of them can, and that’s what matters.
gawc, in that case you should be buying a new house so you can turn a quick profit.
Spring is going to be one huge non event as buyers and sellers continue to wait each other out. At this point buyers can afford to wait and sellers with a continued strong economy can also wait. Some bargains out there with trash that needs work and high end, Quality core in the 800ish will find buyers.
By the end of the year Feds will loosen mortgage rules.
wonder what the prices will be, Marko mentioned bunch of $1M plus home sales I believe.
Nice update, thanks Leo. A number of people here have opined that spring this year will tell the tale one way or another.