The average renter is a long way from home ownership
The Canada Housing Statistics Program is unearthing a lot of interesting data that I’ll be looking into in more detail over time. For now, I wanted to show the gap between the typical owners and renters in Victoria. Of course it’s natural that owners will tend to be wealthier and older, but I was a bit surprised at the magnitude of the gap that exists. Note that this data covers the 282,000 tax filers in the Victoria census metropolitan area.
The typical owner is a 58 year old married person making $63,600 while the typical renter is a single 37 year old making $33,600. Stress test or no stress test, it’s clear that only the top end of the renter distribution is likely to be able to transition to home ownership in the foreseeable future. Of owners, 28% of owners are “unemployed” (i.e. mostly retired) compared to 24% of renters.
However looking at the comparison to other cities, the differences in when people become homeowners are not that stark despite our high prices. We do have the oldest employed home owners, but that’s likely as much to do with our overall demographics as our high home prices.
Also weekly numbers from the VREB. Sales are on the same pace as last December (down 2%), however we have one more business day this month and just given the pattern of the last few months I expect a moderate beat once the year is done. Inventory is now dropping rapidly as it always does this time of year as focus shifts to holidays instead of showings.
| December 2019 |
Dec
2018
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 104 | 221 | 375 | ||
| New Listings | 135 | 240 | 384 | ||
| Active Listings | 2259 | 2148 | 1988 | ||
| Sales to New Listings | 77% | 92% | 98% | ||
| Sales Projection | — | 385 | |||
| Months of Inventory | 5.3 | ||||
If you want to walk along Shelbourne and the distances are quite a bit further between amenities – including the rec center and library. We had a house in the area and I enjoyed it, but I did not find it an easy or convenient place to walk around due to distances and traffic and hills. I used the car more.
I think technically I could afford a house in Victoria, but I’d have to work more, or my wife would have to find a full time job instead of being home with children, and yeah basement tenants. Likely all three. Also would likely be far enough away from my work that biking wouldn’t be as fun. Personally don’t see the upside.
New post: https://househuntvictoria.ca/2019/12/19/which-municipalities-appreciate-the-most/
Some thoughts on relative appreciation rates between munis.
Actually Saanich is a big area, and one can have the same convenience or even more here, too. e.g. Mt Tolmie neighbourhood. There are 4 big and a few specialized (Japanese, Korean and Greek) grocery stores, nice restaurants and coffee shops, home depot, city rec center, two libraries (including the big one in UVic), plus lots interesting events (like the coming “International Guitar Night”) in UVic that are open to public as well, most within 15 minutes walking distance. The presence of Uvic students nearby actually make the hood more lively than some other areas. 😉
I am now one of those working from home for a big US company building software. I am not quite yet at the $160k of James, but at the current rate I should be there within 5 years. I probably could have been making that much if I hadn’t stuck with the same company for over 10 years and taken over a year off to help at home after the birth of our last child.
Early in my career before having kids I did put in crazy hours on occasion. Stretched my finances to buy a house as soon as possible, which included putting up with tenants for a few years. However, now have been living tenant free for over 5 years, have a great work life balance (working from home I can get way more done in the same time as opposed to all the distractions I had working in an office) and make plenty of money.
Also I am happy to pay interest on my mortgage at 3%, while my investments having been making over 10% over the last 10 years.
“Good post. I interpret this as “I’d need to work harder to afford the home I want, but I’m also happy with the home I have.” Seems like a sensible work/life balance.”
Sort of. I could afford a house in Vic, but I’d have to divert more money to housing costs, or have basement tenants, and I don’t really see the point in that. So yeah, to maintain my current lifestyle and buy a house that I want, I’d have to make more money.
My longer term plan is to keep the duplex and rent it out to keep a foot hold in Victoria real estate, and buy a house up island a bit.
It is based on a % of fair market value. Seems like a reasonable way measure relative tax burden to me?
The mil rate is applied to both high and low value properties in the same jurisdiction at the same rate. A condo on the border of Oak Bay may have the same value as the one across the street in Victoria or Saanich, but the owner in Victoria will pay more property tax. The median home may be higher in Fairfield than Rock Bay, but they are both within the same tax jurisdiction and the low value condo in Rock Bay has the same tax burden relative to fair market value.
Oak Bay has high median residential values, but a very low amount of commercial, which is taxed at a much higher rate. Councils, such as Langford, are also able to subsidize the residential tax base through industrial and commercial taxes.
Taxes in OB are going up though to fund aging infrastructure.
Oops… Corrected some math mistakes below In bold.
That (rent less than mortgage interest) would only be true in the early (~5) years of a mortgage. For the $1900 you pay in rent, over 25 years that’s 300*1900= 570k rent paid (and that’s if your rent never goes up!) . If your landlord has a $1m mortgage (@ 2.69%) on your house, he will pay $372k interest over 25 years, which averages $1240 interest per month. and that is 35% less than your $1,900 rent. Likely much better for the landlord than that due to rent increases.
That’s why he’s happy to rent it to you. And if you’re happy to pay it, you’re an ideal tenant, and he’s lucky to have you.
Is that over the long-term Leo? I don’t have the same access to the stats but the ones I’ve looked at in the past showed a higher rate in OB, but maybe that is now incorrect or was always incorrect.
That (rent less than mortgage interest) would only be true in the early (~5) years of a mortgage. For the $1900 you pay in rent, over 25 years that’s 400*1900= 760k rent paid (and that’s if your rent never goes up!) . If your landlord has a $1m mortgage (@ 2.69%) on your house, he will pay $372k interest over 25 years, which averages $930 interest per month. and that is less than half of your $1,900 rent.
That’s why he’s happy to rent it to you. And if you’re happy to pay it, you’re an ideal tenant, and he’s lucky to have you.
Also not true BTW. Most munis have very similar appreciation rates, although the lower priced ones do a bit better than the higher priced ones.
Renting is fine. Owning is fine. However, paying interest on a house with a suite have a higher ROI than almost anything. I did get a lot of joy from having a mortgage – and was happy to pay the interest. Depends on what you value and what you are willing to do short term for long term returns.
I’d be very surprised if you could walk to both the Marina and Save-On in 15 minutes. There’s no chance in hell you’re getting downtown in 10 minutes by bus.
Have i been complaining? I’ve said that it makes no sense to buy the house I currently live in when I would pay more in interest every month than I do in rent, so house prices don’t make sense. I’m happy with where I’m at.
Not sure, and it doesn’t appear there are stats on this so maybe you aren’t either? Anyway, I guess if the stats were the same it would indicate the same very high degree of safety and security that Oak Bay has.
Good post. I interpret this as “I’d need to work harder to afford the home I want, but I’m also happy with the home I have.” Seems like a sensible work/life balance.
That is, the second least dangerous community in all of Canada that has its own police department and its own crime statistics. If I took a socio-economically comparable area of 20,000 people out of any major metro in Canada and compiled its own crime statistics, do you think they’d look much different? Getting right down to it, do you think the east side of Foul Bay Road is safer than the west side?
Another example of how looking at municipal statistics in a fragmented medium size metro tells you very little.
“Some of “them” you refer to, that work more than you, for more money are also the people able to afford a home that you complain is too expensive. Hopefully you’re “fine with that” too.”
I know I am. I could take on a more demanding job and work longer hours, but as far as careers go, I like mine (although I’d be out the door tomorrow if I won the lottery. I never absorbed any of that work-centric bullshit they teach in school, and I certainly wouldn’t have any trouble filling up my day without employment.)
I am willing to accept a lower standard of living in return for a less stressful life and the freedom to do shit that I think is fun. This is also one reason I still own a duplex in Victoria, and not my very own drafty little bungalow.
At least on weekends, I’ve found driving and biking down Oak Bay Ave to be the worst in the city, by far. It’s like going through molasses.
You can get busybody neighbours in any urban area and the rats don’t stick to borders as far as I can tell. I’ve always thought it odd to be bored by an area, there is so much to do/think about wherever you are. Natural beauty is more important than nightlife to me though.
We happen to have great neighbours, but that can change when a house is sold. OB does have more retired people with time on their hands so I suppose it could be a bigger issue depending on who is around you. And you are right, you can’t store an RV or a boat in a front yard in OB so that could annoy some.
OB has 29 parks. For ex.- Uplands, Bowker Creek, and Anderson are excellent for walks, and Carnarvan for kids. https://www.oakbay.ca/parks-recreation/parks-playgrounds/parks-listing
I’ve lived in Fairfield, Saanich, Victoria and Oak Bay. All of them have pros and cons, but they are all pretty good.
What has always made a difference for me is the amenities of my personal residence and walkability so I can use the car less. I’ve chosen to live an easy walking distance to OB Avenue and I have three grocery stores, a hardware store, loads of great restaurants and coffee shops, a library, a rec centre and marina within a 15 minute walk. IMO it is better than Fernwood, Saanich and Fairfield for the things I use a lot (grocery, library, rec center)and lack of traffic. Downtown is 10-15 minutes by bus and 7 minutes by car, although I don’t go downtown much.
If you want to have a wood fire in your back yard you are going to need to go out of the core anyway. You can have a propane fire in OB on the beach or backyard.
Personal preferences aside, OB objectively has a lot to offer, as do other areas. We bought a small farm up island, so I get the appeal of having fewer neighbours, rules and a fire pit, but OB is lovely for a core area.
Some of “them” you refer to, that work more than you, for more money are also the people able to afford a home that you complain is too expensive. Hopefully you’re “fine with that” too.
Lots of Oak Bay’ers deferring all property taxes (age 55+), so not much of an issue. Taxes are about 0.5% of property value, and houses there appreciate much more than that.
Ahh yes. Loved having a garden in Oak Bay. Was especially nice when the police came to check it out because someone suspected we might be growing pot hahaha. Also loved the rats.
“I guess if you hate having good schools and being able to walk everywhere including rec center, library, shopping, restaurants, services, parks, and ocean? Or maybe you don’t appreciate having a free municipal yard for garbage and yard waste? Or the lowest property tax rates coupled with the highest appreciation rate? Or being in the second least dangerous community in all of Canada?
Okay, maybe there is a little too much focus on keeping trees and historic stuff as is, but it is a pretty great place to live and you can build your kind of community wherever you are by finding like-minded people.”
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Actually, for the most part, I find that most of Oak Bay especially the South Part to be incredibly inconvenient, if your coming into or out of town it takes forever to get there and there is NO shopping within walking distance, I see very few people walking apart from downtown, it kinda reminds me of Gordon Head in that respect. There are also very few parks apart from Windsor and WIllows. I do like the Willows section of Oak Bay, much more convenient location. Lastly, I find Oak Bay to be incredibly boring, it’s way to homogeneous made up of mostly WASPs, of which I am a member.
Now IMO, Fairfield is way less stuffy is MUCH more convenient to shopping, good schools, downtown and waterfront actually has some life to it, Beacon Hill is a jewel, just my 2 cents
Majority of programmers work in someway shape or form for Government here.
None of the programmers working directly for government make anywhere close that.
Majority of contractors probably charge out at higher that $160k, but make less.
I’m fine with being a below average programmer in terms of compensation, since I work less than them, and have other benefits.
Although it does mean that I don’t get the joy of paying a ton of interest to the banks for the pleasure of being a landlord to basement tenants in the “Best place on Earth”.
“I guess if you hate having good schools”
I don’t, but I also don’t assign any weight to anything put out by the Fraser Institute, and I would never send my kid to private school so I don’t really care about Oak Bay’s school offerings.
“and being able to walk everywhere including rec centre, library, shopping, restaurants, services, parks, and ocean?”
This could also be said about Fernwood, Fairfield, Vic West and Esquimalt. Probably other areas too. One thing it does have is the Duncan farm market which is cool.
“but it is a pretty great place to live and you can build your kind of community wherever you are by finding like-minded people.”
For some, sure, and I agree that that you can find like-minded people anywhere…and no matter where you live, it’s up to you to make the best of it.
Biggest thing for me would be the busybodies. It’s nice to be able to store an RV in your front yard, or quietly have a fire in your backyard from time to time without worrying about the fire department showing up to douse it. I prefer a more live-and-let-live kind of place.
Does the real James Soper agree that a lot of programmers make $160k + in Victoria? Lol, neither James can win:
I doubt it is James Soper bragging, I would hope if he were to do that he’d atleast change the name to Tom.
Yes, if you are a busy body that likes to file complaints about your neighbors doing something with their property that they shouldn’t, you will fit right into Oak Bay
People make this comparison all the time but it doesn’t make sense to compare by mill rate. Vancouver has the lowest mill rate of them all, but that is merely a reflection of high house prices. Mill rate is not a measure of tax burden.
I have, north and south.
Very few people actually walk or bike. Personally I’ve never been honked at as much anywhere else in the city while riding my bike where I’m supposed to be riding. It’s a car community still, which is why it’s mandated that everyone has a covered parking spot.
The roads are shit, also the sewer system is the worst in the area, which is saying something.
For the last year it has the worst appreciation rate in the CRD.
Might be the least dangerous, but they have plenty of b&e’s and car break ins. Maybe it’s common in the rest of the city too, just never heard about it like I did living in Oak bay.
“Not I,” said the bear.
Do you really take me as someone who would gloat on the internet?
Is it James Soper who wrote this? Did he decide to drop his last name, or is this a different James who is also a programmer?
I’ve been in tech here for over a decade. Individual developers getting $160k+ total compensation (base salary, bonuses, stock, benefits) are likely working remotely for a US company, working in a local office of a big US company like Workday, or are upper quartile senior/principal/staff developers at a local company. Everyone else at that comp level is either along the people management track, technical leader track, or contracting/consulting (which is really running your own business with all the overhead involved in managing clients, networking, etc).
Probably a good strategy to lower your housing cost, but have you lived in Oak Bay?
I guess if you hate having good schools and being able to walk everywhere including rec centre, library, shopping, restaurants, services, parks, and ocean? Or maybe you don’t appreciate having a free municipal yard for garbage and yard waste? Or the lowest property tax rates coupled with the highest appreciation rate? Or being in the second least dangerous community in all of Canada?
Okay, maybe there is a little too much focus on keeping trees and historic stuff as is, but it is a pretty great place to live and you can build your kind of community wherever you are by finding like-minded people.
Hello Ash and all other well-wishers. I really appreciate your positive feedback. Would have said thank you before but was caught up taking care of things re. house purchase. I do love Oakland and have walked around there quite a bit. I have a few friends with kids who live there so that is really convenient.
Thank you!
Glad it’s not condos and individual owners dealing with this.
That third party is the engineer. They have ethical obligation to act in public interest, not interest of their employer. But doesn’t always work out as we can see from these two examples
If city inspectors don’t have the knowledge. Than time for 3rd parties to be involved not related or paid by the builder to be on site and monitor and sign off. Fee can be added to the permit.
Same thing happened in Surrey. https://www.google.ca/amp/s/beta.ctvnews.ca/local/british-columbia/2019/5/9/1_4415635.html
Not sure if any cities inspectors have the knowledge to catch stuff like this. Good on Langford for stepping up for the residents though
https://vancouverisland.ctvnews.ca/mobile/langford-warns-residents-after-new-highrise-deemed-potentially-unsafe-1.4736065
No excuse for this in this day and age. Wonder if something like this would have happened in Victoria or Saanich. Those 2
Cities have experience with high rises. Just curious if that plays any part.
Right. In greater Victoria, only 900 declared “vacant/spec tax” properties total. Tiny numbers<1%.
In any event, nothing adds up to lower home prices because of forced selling from spec tax.
I can only imagine the outcry if those were truly affordable shelter rate units. And voting against the good in favour of a non-existent perfect means we never make progress on housing for low income.
I’m in favour of filling empty properties, but there just aren’t that many of them to really make a dent.
I think about supply more broadly and that includes renters. Sure you could restrict credit and drop prices, but it doesn’t do anything to address intrinsic demand. It just means more pressure on already stretched rental market. Also doesn’t help first time buyers as we’ve heard on this blog. Credit restrictions like stress test disproportionately affect first time and lower income buyers that can’t pass it in favour of those who already have money,
She said “further gentrify”, and was objecting to not enough affordable units being provided in exchange for allowing the increased density. Not the increased density itself. That was Jean Swanson, who has been advocating for those with lower incomes for 40 years, was awarded the Order of Canada, and was finally elected to Vancouver council last year.
We need more of this. Councillors growing a backbone and approving supply that is necessary despite local opposition
https://www.cbc.ca/news/canada/british-columbia/vancouver-kits-rezoning-apartment-decision-1.5400935
Had to laugh at one councilors objection that a rental project would gentrify the Kitsilano neighbourhood, full of multimillion dollar SFHs.
Adding supply doesn’t just mean increasing the stock, it can also mean inducing owners to sell. Like, perhaps, imposing a tax on properties left empty. Also decreasing demand will bring down prices. I guarantee you that if the government imposed a 50% down payment requirement, prices would go down plenty. That’s an extreme example, but getting rid of all the present subsidies and incentives to buy would bring prices down. Like the property tax deferral just discussed, which affects both the supply and demand sides.
Leo S:
“This should be standard practice anytime anyone makes a prediction. Quick check on their previous predictions.”
I agree, it should be standard to show previous predictions. They should do even better than mentioning only last year. Give the readers a sense of, on average, which direction their errors are weighted.
“People would quickly find out at all matter of expects are wrong a majority of the time.”
There’s certainly nothing wrong with experts being wrong a lot of the time. However, in such a case a given expert would be expected to be wrong in different directions over time. There’s something very wrong when an expert’s mistakes are generally weighted in one direction — a direction that benefits their own business interests.
Maybe that’s what the article meant to capture by saying that BCREA is ““Prone to bullishness about the B.C. housing market”. That’s a start, but they need to give readers numbers showing if there’s a consistent direction in which they are wrong.
Beauty. This should be standard practice anytime anyone makes a prediction. Quick check on their previous predictions. Not just real estate, all sorts of groups make thousands of predictions every day and almost no media story ever does a quick check on their previous ones.
People would quickly find out at all matter of experts are wrong a majority of the time.
On the topic of mainstream media being lazy/inept and/or preferential when it comes to using real estate professional sources to comment on real estate, it was a bit refreshing to see this in the Vancouver Courier today, on the BC real estate outlook for 2020:
“Prone to bullishness about the B.C. housing market by nature, the B.C. Real Estate Association (BCREA) predicts that MLS residential sales across the province will increase 10.9 per cent to 85,500 units in 2020, which would take the annual total to just below the 10-year annual average of 85,800 units. However, it’s worth noting that BCREA’s forecast a year ago that sales would rise 5.2 per cent in 2019 did not come to pass.”.
Translated: “BCREA predictions are just bullish cheerleader fluff that cannot be trusted during market downturns. You should know better than to give credence to BCREA predictions, and we should know better than to lead our story with their predictions time and again. But here is their predication anyways, because… well…it doesn’t matter, just read it.”
https://www.vancourier.com/real-estate/b-c-real-estate-outlook-2020-a-forecast-summary-1.24036838
Maybe a computer glitch as the comments section pointed out that the same article was posted here in 2017 https://www.bnnbloomberg.ca/canadian-home-prices-fall-for-third-straight-month-in-november-teranet-1.942403
Headline in the National Post: “Canadian home prices fall in biggest November drop outside of a recession” https://business.financialpost.com/real-estate/canadian-home-prices-fall-again-in-november-teranet
What are they smoking? It’s like every figure they quote is wrong
They say “national prices declined 0.5 per cent in November from the month before” when in fact it’s up 0.16%
They say “four of the 11 cities surveyed weakened”. It was actually 3 that were down
They say “In Vancouver, where the British Columbia government implemented its own tax on foreign buyers more than a year ago” When the foreign buyers tax was implemented over 3 years ago.
They say ” prices were flat after six consecutive months of record highs” when in fact recent data has been down, and certainly not record highs
It is shocking how low the standards are in journalism sometimes.
Beware the assumption that real estate appreciation will be the same in the future as in the past. Interesting article.
https://business.financialpost.com/personal-finance/baby-boomers-have-made-a-fortune-on-real-estate-here-are-three-reasons-to-consider-cashing-out-now
Honest question: are NIMBYs winning or losing in Victoria?
Yeah the only advantage is that they charge simple interest, not compound. But net effect is about zero given low mortgage rates.
The only program that can possibly put downward pressure on prices is adding more supply. Which many owners and municipalities are fighting against.
The only way to change that is either for the province to step in and overrule the municipalities (I hold some hope for that) or for voting patterns to change in the municipalities as more residents are renters and NIMBY owners have less sway
Thanks Patrick. not eligible for the equity sharing. We’re under the income threshold but the mortgage can’t be more than 4x our income so when I run the numbers we’re always slightly over that and out of luck. Might factor into a low offer if we’re close though. I don’t think the program had us in mind when it was revamped to include Victoria… Ironically if we made more we could qualify for more house under the program vs. without it.
https://globalnews.ca/news/5900589/canada-election-first-time-home-buyer-incentive/
We’d quality for the tax deferral but just like the FTB it’s adding more debt to our future, yuck. I wish these programs were more geared towards reducing the actual overall cost of ownership vs. just shoving it ahead, with interest.
I don’t believe anyone claimed it was.
No consolation prizes in Oak Bay. Just prizes.
Increased property values without having to tolerate increased density. That’s having your cake and eating it too.
I’m pretty sure that many who dislike Oak Bay do so, in part, simply because others love it (which is valid, I think).
https://www.cmhc-schl.gc.ca/en/finance-and-investing/mortgage-loan-insurance/the-resource/government-of-canada-offers-homeownership-incentives
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/annual-property-tax/defer-taxes/families-children-program
Both of those would help your cash flow right away after buying the house.
Teranet for November.
– Victoria Up a tiny 0.02%, remains at all-time-high.
– Canada composite also another all-time high, (+0.16%, a “good showing” since November usually seasonally down month)
– Vancouver up for 2nd month in a row (leading the pack with +0.41%, -7% from peak)
https://housepriceindex.ca/2019/12/december2019/
That’s strata for ya. The best stratas are those with almost no responsibility and few rules. Bare land strata for example. Problem with strata is that rules tend to grow, not shrink over time. There are always those with endless energy to campaign for more rules and very few with energy to campaign for fewer rules, so the direction over time is always one of expansion.
Winding up a strata is a complex, expensive, and lengthy process, requiring approval from 80% of owners. It usually only happens when the property is end of life and not economically worth repairing. Don’t count on it ever happening.
Good question though why some developers end up going strata for single family developments and others don’t. I suspect that the upfront cost is less to do strata and offload things like private road maintenance than to turn it over to the city, but I admit I’m ignorant on that front.
Found this article about it: https://www.timescolonist.com/strata-of-single-family-homes-1.595227
tl;dr No surprise it’s to save money
a lot of programmers making $160k in Victoria? You sure about that, care to give couple examples of firms in town that will pay 160k for a programmer not in a senior management position?
I actually have a question about housing stratas, hoping someone has insight. There are a lot of SFH in the Langford area, with stratas of $20 – $200/m. Why are there so many, and what is the chance of a current strata street changing to a no-strata? I have a couple friends who bought in these, it was framed as if the strata fee was just for garbage pick up and snow removal. One buddy tells me this is still the case in theirs but the other has had an absolute nightmare time as the strata also came with a full set of rules and neighbours policing eachother. Things like parking rules, how a yard should look, houses must be owner occupied so no full house rentals allowed, fines for breaking rules, lawsuits about common property, more meetings than I’d assume a condo building has etc.
Will this set up be permanent forever or will these mini strata kingdoms turn into regular city houses at some point? My assumption about these set ups is that the city didn’t budget for the garbage pick up or road or whatever and that’s why when they were built, a small strata fee was implemented. As the city and tax base grows will there be less sfh stratas or more of them?
Dad:
Thanks for suggestions. We’re looking at all options but at our price point there aren’t many. By being pretty much limited to Langford we’ve actually fallen in love with it, there’s so many families, parks, lakes and shopping out there the only thing we’d be coming into town for is work.
Considered the shared walls years ago and we’re skipping the townhouse step, have had too many friends have terrible experiences with their stratas. Like lawsuits, damage, fights with neighbours. It’s anxiety we don’t want to deal with and I understand it’s not the ‘norm’ but after hearing their stories its had a huge impact on us. By shooting for a 3 bed / 2 bath sfh I’m hoping it’ll be a forever home right from the get-go. My strata meetings will be with my spouse which is enough haha.
Those houses are still 600k and with only 8% down there’s no wiggle room for bulldozing.
We’ve also have the “Oak Bay sucks” conversation, even if I won a house there I’d sell it immediately and buy in another area. For all the character houses, OB has no character… Nice Xmas lights though. I rent in Oakland’s right now and would absolutely stay if we could afford to buy here.
wait till your childrens or grand kids take on multi generation loans .. it coming soon
A lot of programmers are making like 160k and up in Victoria myself included. I weathered 2008 by being smart and not getting laid off. It’s easy to do.
Yes, I agree with that. May as well get on with it. Consolation prize for homeowners is increased property values, but with a rising population they can’t expect to keep Victoria to themselves.
Save us the sad story. How many millennial programmers like you are out of work? Zero? Average salary… $80-100k, after a 4-year degree? Do you work remotely from home, in the nicest city in Canada?
And your only argument is “boomers had it better.” It’s unrealistic to expect to be top-of-the-heap 7 years after graduation.
Higher density, it appears to me. And allowable density is not a matter of personal property rights.
To each their own! spits on a ferrari mega yacht
If you’ve got it, flaunt it? 🙂
For those who prefer a less hectic, quieter, more luxurious lifestyle, with the bonus of being super close to the action, then a community like Oak Bay scratches the itch oh so nicely. Throw in an ocean view too? Oooh, ahh. And of course these things are not easily obtained by the majority of the public; but if that was your ideal, and you won the lottery, there’s a pretty good chance you’d move to such a neighborhood and fight like a dog to keep it the way you, and presumably your neighbors, want it. So arguing against how absurd it is for these communities to have such low density is a bit like spitting on a parked Ferrari, or chastising the owners of those mega yachts – it may make your ego temporarily feel better but it’s a poor use of your energy. Of course if we take an egalitarian approach to life, step back from holding the rights of the individual as paramount and we see some of the pressures in the rest of the populace where a decreasing number of people are able to have something of their own, then perhaps a solid argument can be made that things are “not fair”, but are they so seriously askew as to warrant overriding of personal property rights? I know no one is arguing that here, and it’s pretty obvious we’re a long ways away from social revolt of any sort, but really, what IS the argument that is being put forward as “the fix”?
Hard yep. I was just thinking about how someone’s level of hardship in the 2008 financial crisis was directly proportional to their age. Any financial crisis hits those with high debt, low income and poor job security the hardest. That would overwhelming be students just starting their career. I graduated in 2012 and the ripple effects were still very much present. So many employers could get away with HR absurdity. Positions paying junior wages could ask for things like 10 years of experience and actually get it. I saw postings demanding 5 years of experience in frameworks that were 2 years old. That many experienced people were laid off – years later employers could still pluck the best and pay them garbage. For every experienced professional that managed to get re-hired, they muscled out a junior applicant. If you were a boomer in 2008, your experience was so, so different from that of a millennial.
“Interesting that one of the more desirable municipalities in the CRD has had zero population growth in 50 years. Maybe Introvert is onto something with the “more people is not better” mantra.”
Especially proletarians. The well-to-do, movers and shakers, emulators and other hangers on can have Oak Bay. It has such a goofy stuck up feeling about it and is gossipy as hell in the circles I’ve been exposed to.
Anyway, I’m clearly blinded by bias.
That’s a great post Cadboro. And great follow up posts showing possibilities. Two thumbs up to you and your young family, and I hope you find something great soon.
“We can have a purchase price of $500,000, or $575,000 if there’s a completed suite.”
I think your options at that price are:
1. Newer build in Langford on a small lot
2. As others have suggested, duplex or townhouse closer in (there are some cool townhouses at North Dairy and Cedar Hill. Worth checking out if one comes up during your search.)
3. Bulldozer bait SFH around Gorge/Tillicum/Uptown
I don’t live in Langford and it wouldn’t be my first choice, but it’s got some things going for it including proximity to the best parks in the region, a housing stock that is not made up of drafty 1950s pieces of shit that cost $400 a month to heat, new schools (already over crowded, but that is inevitable), and Princess Auto. It also has some things going against it, like an apparent lack of transportation planning.
If I was looking now, I’d absolutely consider a move out there. But I also think Oak Bay sucks and I wouldn’t live there if I could, so my taste may be questionable.
Good luck to you! I’m sure you’ll be able to find something that works for your price range and needs/wants.
@Koalas
Good luck with the home purchase! I’ve lived in Oaklands for about 5 years and we’ve been super happy with it. There’s a good sense of community with the local school and community centre, summer farmer’s markets, lots of parks and families, etc. Short commute to downtown is awesome, you can walk to Fernwood square/the Belfry, hillside mall, or bike to willows beach in 8-10mins. So yeah I’m biased and could ramble on. One downside is there’s none or little preserved native forested areas like say Uplands park or Mt. Doug which we miss, but it is an urban neighborhood after all.
And to tie in to the density discussion, long term I could see large swaths of the neighborhood being candidate for up-zoning from single family to duplex as Vancouver has done. A lot of the houses are on the small side with ~6,000 sq ft. lots that could comfortably accommodate another house in the backyard. But, I’m not sure how much this would fundamentally change the neighborhood or local demographics.
Cadboro –
I would think that many families like yours who are a bit marginal on a sfh would be quite happy in a townhouse. Cheaper utilities and lower taxes, often other families as neighbours (not always), lower prices. What’s not to like? Strata fees, I guess, but still.
Perhaps more accurately that its density has not increased is tops.
Congrats on the soon to be new arrival!
Hi Cadborosaurus;
Yes, I do think of you and others I know are struggling just to get in. That particular duplex does already have a completely done one bedroom suite. Even has own parking and washer and dryer as well as a cute sitting area at their entranceway. I imagine, because of the convenient location and the funkiness of the cute suite, one could get a pretty reasonable rent as well.
If I see something, I will let you know. In the meantime, good luck and have a wonderful Christmas with your family.
Oak Bay has many great things going for it, but its relatively low density within the core of a medium-size, desirable city is probably tops.
On several levels, there’s a threshold past which more people is not better.
Hi Alexandra thank you for thinking of me I truely appreciate it. It’d be awesome to end up buying a place that was scouted out by someone on this blog 🙂
That’s just above our max price point or I’d be all over it. We can have a purchase price of $500,000, or $575,000 if there’s a completed suite. I’ve been looking at a lot of houses with “suite potential” but unfortunately with the new stress test rules, we can’t factor in the rental income unless the suite already exists and can be rented asap, and even then the rules now only let half the potential income from a suite be counted for mortgage qualification. Despite raises and a larger downpayment, we are approved for almost 150k less than pre-stress-test. Hoping prices adjust soon so that we can move.
Some interesting bits in this Q3 report about the 5% difference / correct pricing with some examples of sellers who are out to lunch.
https://victoriaqreport.com/
Cadborosaurus…….A few months ago a half duplex at 850 Old Esquimalt Rd sold for I think $575K. Could have you afforded thisÉ I have seen that home and it was very nicely updated inside. The info that it shows now is actually incorrect. It has two parking spaces at the back, easy care yard shared with other side. Downstairs at the entrance level is an updated and funky self contained one bedroom suite. Quite possibly it could be made into a bachelor thus the main home would have three bedrooms. The shower in the suite is separate from but adjacent to the powder room. Also on the main level is a large bedroom belonging to the main home. Upstairs was all redone with new flooring, kitchen, bath, blinds, paint etc. Upstairs has master bedroom, kitchen, bath, and entertainment size living and dining rooms. The area is very convenient. There is a church across the street and you can walk straight though to Esquimalt Rd for buses, shopping etc. Have you thought of looking for something like this set-upÉ
Sorry caveat emptor didn’t see you already posted the over/under 65 breakdown.
This is insane though.
Patrick nice catch that the typical family income for ‘owners’ is higher. But we make a bit less than that and are pretty close to buying…. I’d still argue it’s pretty shocking that average house prices here are even 8x my family income (and average fam income for Victoria is around 90k, so the stretch is even bigger). We’re approved for only 4.5x our income with aprx 8% down.
As a renter here I’m feeling pretty squeezed. Inability to move because our rent is so “affordable” vs. market rate right now, but no space to grow. The January baby is going to live in our room until we buy there is nowhere else to put them, we’re all sharing dressers and closit space too. Our savings rate doesn’t even cover the % houses keep increasing by each year so we’re trying to amp it up but it’s certainly not easy. We cut cable in the summer, uninsured a vehicle, sold a bunch of stuff and one of us buses to work. Potty trained the 2 year old just in time to have another one in diapers which I try to find on varage and Amazon. Got a $400 hydro bill this week and I’ve only had heat on in 2 rooms in our home (which is over 100 years old).
Alot of my peers that couldn’t buy pre-2015 are in the same boat as us or just settling for a future as a renter or one without kids or both. I think my fantasy of a 3 bedroom house is still do-able for us but just barely, and in Langford. The ladder is going to be pulled up behind us though and I don’t think even what I’m able to swing right now is going to be available to the next group of buyers at the rate things are going.
Interesting. So the article was about the Housing Needs Study which must be produced by the municipalities and in this case outsourced to planners “Urban Matters”
So who screwed up?
The consultants?
The city in interpreting the report?
Or the reporter in reporting on it?
The line that cites population is in quotes, so one would imagine it is directly in the report, pointing at the consultants who screwed up. Which for the $50,000 allocated price tag of the report would be pretty embarrassing.
In here is the report: https://oakbay.civicweb.net/filepro/documents/?preview=40228
Sure enough, the quote is accurate so we can clear the city and the reporter:
“Between 2006 and 2016, the number of residents under 65 declined by 1050, while the number of residents 65 and over grew by 880 residents.”
Now for the fact check using the census which they almost certainly used given the years in question:
Population under 65:
2006: 13400
2016: 12380
Difference: -1020
Over 65:
2006: 4510
2016: 5715
Difference: +1205
Conclusion: Oak Bay is aging but not shrinking in population. Urban Matters likely screwed up that figure in the report.
I would concur. If schools are a factor for you I know several families who are quite positive about the elementary school there
Interesting that one of the more desirable municipalities in the CRD has had zero population growth in 50 years. Maybe Introvert is onto something with the “more people is not better” mantra
Can we KILL the “Oak Bay’s population is dwindling” narrative?
Oak Bay’s population was up between 2006 and 2011 and it was up from 2011 to 2016 according to Statscan data:
Population:
2016 – 18095
2011 – 18015
2006 – 17910
Over the ten year period the over 65 population increased by 1200, the 15-64 population decreased by 1015 and the 0-14 population decreased by 5 (these numbers don’t exactly match the totals)
Oak Bay’s population is within 0.2% of where it was in 1966.
Hard to trust media when they parrot numbers that are easily disproved by presumably reliable government statistics. As for the original report did it have an agenda or were they just sloppy with the numbers?
I know two people that have bought in that area in the last few years and they’ve been very happy with it. It’s certainly convenient if you want to be close to shopping and downtown.
local fool: looking at Oakland. I think it’s a nice neighbourhood and still very close to downtown as well as Quadra village. What do you think?
Oh congratulations! Whereabouts?
Patrick did explained 2X of 64K to 73K income as average, and I’m sorry that SFH are not median or average homes, because the average homes are condos and townhouses for the average Joe. That said, 900K SFH and up are in fancy or acreage area such as Metchosin, North Saanich, and Oak Bay.
Prices for a single family house* in Victoria, British Columbia in March 2018 and March 2019, by suburb (in thousand Canadian dollars)
https://www.statista.com/statistics/647969/single-family-house-prices-in-victoria-bc-by-suburb/
From LeoS graph, that $64k median Victoria homeowner income is per person, so for a two person household, each with median incomes, that’s $128k household income. Does that realization change your “shocking” comment to “shocking/2” ?
https://toronto.ctvnews.ca/woman-fears-losing-home-after-mortgage-insurance-expires-due-to-age-limit-1.4724495
Actually it’s not mortgage insurance, which protects the owner of the mortgage (i.e. the lender) from default. It’s term life insurance.
But what I found interesting about the article is that the couple took out a mortgage that would not be paid off until they were over 70. That used to be unthinkable.
The only significant asset most people have (i.e. their house) can only be used to retire the debt if it’s sold to someone else, who more often than not has to borrow more money than the seller owes. So think again about what’s more healthy or relevant.
Incomes are so, so low in Victoria – $64,000 to $73,000 annually [working 12 months a year !!!] for median income in a place where real estate prices for a decent single-detached home is $1M to $1.2M; let alone the median bench-mark price of what $900,000. That means that as a city, a population, these homes are priced at 13 to 16 times median incomes. How could anyone with this kind of income buying in this market even at these rock bottom interest rates, ever become mortgage free after a life-time of working? Be mindful of the cost of raising kids, buying cars, vacations, saving for retirement……
Shocking.
People talk of “debt to equity” – that’s fine, but your big pay day only comes when you sell that home and downsize – the buyer is earning only $64,000 to $73,000 per year. The foreign buyer is gone and the local buyer can’t afford your home [or pay a mortgage such that they can buy your home]. This is indentured servitude. $2900 per month, plus property tax, maintenance and all that.
This underlines the plight of the millennial.
Koalas,
Congrats on the house purchase. Best wishes for many happy years there.
The only time seller spec tax liability could be yours is if there’s a spec tax lien on the property, but that’s the same as any other lien in that your lawyer would find that out before closing, and you wouldn’t end up paying it.
Yes, since home prices have risen, the typical mortgage is less than a new one would be. I think the average mortgage balance is something like $170k in Canada, and the average equity in homes is about 73%, and a big buffer for us if there’s a downturn. Much higher equity than other countries like the USA or Australia. I mention that because media headlines always talk about Canadians un-healthy debt to income ratio, and don’t mention the very-healthy (and more relevant) debt to asset ratio.
Patrick, I will have to guess that the average owner has a mortgage that is less than the $640k in your example. So that could be thought of as a buffer when interest rate rises.
Thank you so much Leo and Freedom. It was indeed the non Canadian resident capital gains tax that had me spooked. Thank you for jogging my memory. I knew I could rely on this excellent blog in my time of need. Right now there seems to be little reason for me to worry about this but it is nice to know so I can do due diligence.
Note there is a spec tax exemption for the year you purchase
https://www2.gov.bc.ca/gov/content/taxes/property-taxes/speculation-and-vacancy-tax/exemptions-speculation-and-vacancy-tax/individuals#inherited-bought
Wish you good luck Koalas.
I think that issue discussed then was not about BC sepc tax, but income tax to CRA. See “Buyer beware: How purchasing property from a non-resident of Canada could leave you with a hefty tax bill” at:
https://business.financialpost.com/personal-finance/taxes/buyer-beware-how-purchasing-property-from-a-non-resident-of-canada-could-leave-you-with-a-hefty-tax-bill
reposting this from last thread. Sorry for the duplicate:
need help. Am in the process of buying a home. I vaguely recollect that there was an issue with the speculation tax (i think?) that could make the buyer liable for the seller’s tax if it had not been paid. Is my memory failing me again? I am trying to line up a lawyer to go over the papers with me before removing conditions but would appreciate if anyone on this blog knows anything about this issue.
Thank you so much in advance and wish me good luck!
Agreed. But it does match with we see In Victoria (more than in other cities): older and gray haired workers in Walmart, Save-on-food, etc.
Nice post with good information. The median Employed Owner age by city is interesting, the range between cities is quite narrow (age 48-53), so the main point to me is that the median owner age is “old” everywhere. Especially since retirees are not even included, and including them would push the median owner age even higher.
Also the $63.6k median Victoria owner income, that would put the median two person household income about $127K (likely less as one household home owners may have higher incomes). But with $127k household income, buying a $800k home with 20% down would be a $2920 mortgage (2.69%) and be an “affordable” 28% of income. That may help explain the near zero mortgage delinquencies and homeowner bankruptcies in Victoria.
Thanks it’s fixed. One was the city of Toronto, one was the CMA. Only the CMA remains.
Yeah individual income stats are often shockingly low. Not sure what to think about it, but this is straight from the CRA so unless there is rampant underreporting of income I imagine it’s accurate.
2 Torontos?
That’s a really cool set of insights. Thanks for posting.
I find it a bit hard to believe the average renter stat though – 37 years old and making less than 34k per year? Seems barely better than minimum wage?
I guess data is data. That also does seem to leave questions about the current rent levels. Perhaps a lot of people staying put and not paying market rents, but those numbers nevertheless seem disjunctive.
They referenced 2006 to 2016 numbers which are presumably down as they stated. “Between 2006 and 2016, the number of [Oak Bay] residents under 65 declined by 1,050, while the number of residents 65 and over grew by 880 residents,” the report says. https://www.vicnews.com/news/study-shows-oak-bays-dwindling-population-is-rapidly-aging/