The way we build houses is insane
If you want a vehicle, there are many options. You can choose the body type, then chose from amongst a dozen major manufacturers, a variety of models, and even customize some particulars of the vehicle if you like. It means you see some of the most popular cars quite a bit on the roads, but it also means you can purchase what is truly a marvel of modern engineering for a comparatively paltry amount of money. Tens of thousands of parts from suppliers all over the world, millions of lines of code, extremely strict regulations that vary by region, capable of withstanding harsh environments for years or decades and all for only a few hundred a month.
Imagine though if instead when we needed a new vehicle, we first hired a vehicle designer. Maybe it’s Richard Teague rather than Filippo Perini but a designer nonetheless. Through hours of meetings and revisions we come up with our dream concept car. Then we bring in the engineers, who start trying to design the production version that is as close to the concept as possible. They use mostly standard nationally approved parts, but everything is a custom size, has a custom look, or is programmed uniquely for your car. Will the car pass crash test? Will the AC be powerful enough? Will it meet fuel efficiency standards? All of these are fundamental mysteries, having to be calculated from scratch.
Finally the design seems good, and since the car is completely unique we need a unique factory to build it. Local government and neighbours – given they have never seen such a car before – are suspicious about you setting up a car factory in their neighbourhood. Will it be noisy? How much water will it use? Will it look nice? After hours of meetings when the objections are addressed, it’s time to bring on the manufacturing team. Some of them are experienced, some of them only know how to swing a hammer, but none of them have built a car exactly like this before. As they build they make some mistakes, and discover many of the mistakes the engineer and the designers made which require endless revisions to correct. Because you’ve only seen it on paper, as the car comes together you change your mind a few times about the design yourself. At every step the city inspectors come in to take a look at the car and have long arguments with your engineers about whether the shag carpet you wanted in the back is automotive rated.
If you’re lucky, your dream car is finally done after a few years of hard work and stress. It’s a thing of beauty, even if there’s a small leak in the windshield and the workers have to come back a few times to adjust the doors.
What would such a car cost? A fortune, but the point is moot because no one has built a vehicle like that in 130 years. So why do we still build houses like that? It’s no wonder that perfectly ordinary homes run into the many hundreds of thousands of dollars in construction costs. Even if land were free, new homes would still be expensive.
Of course, I get it. Custom homes are a luxury good and the fact that they are unique is much of the point. But we shouldn’t extend that model to ordinary functional homes. Luckily, changes are coming to the construction industry. For large multi-family housing the province is pushing to promote mass-timber which will speed construction and lower emissions. On the single family side there are also new developments and I believe in the next decade we will see a fundamental shift in how we build homes. I spoke to the founders of two BC companies that are working on this problem now.
Built Prefab is a Kelowna-based company that is bringing innovation to the factory built and modular construction space. I recently spoke to co-founder, Ian Garrity about the company. In the past I’ve looked at pre-fab options, but they were all targeted at the high end custom home market which seemed to rather miss the point. Ian came from that background but Built Prefab is aiming at a broader market.
One of the ways they are doing this is by focusing on a few core designs from just over 700 to 3300sqft that can then be fully customized through an online design tool on their website. The model here is very much like the build and price tools for cars, where you can pick the basic plan, then customize options until you get to a fixed price total for the construction (modulo site-specific charges). Through that customization you get create millions of different configurations starting from only ten basic plans. In traditional construction going over budget is nearly a guarantee, but in a factory producing a known design, it’s feasible to set a fixed price which is important to incentivize uptake. Though an online configurator may seem like a minor detail in the home construction process , we’ve seen the revolution of simpler ordering and increased consumer control in almost all industries, and I think it will be key in housing as well. I’m excited to see how this evolves over time with additional options (3D tour of your design, virtual placement of your furniture ahead of time, projection of energy costs based on site, rendering of the house on your lot, the potential is endless).
Built Prefab’s online configurator allows you to fully design a home from the website.
Currently the smallest layout is 768sqft for $187k, but I’m told there they have internal plans for smaller layouts that would suit the garden suite specifications in Victoria and Saanich.
Despite the pandemic, it looks like thing are taking off for Built Prefab. Ian mentioned that the next 18 months of production are virtually all spoken for with just a few spots left.
West Coast Container Homes is an even more local and focused startup. I spoke to founder Adam Benning about his Victoria-based venture to turn shipping containers into simple, affordable homes. Shipping container homes have been around for a long time, but many designs have been based on multiple stacked containers which largely defeats the purpose of the simplicity and structural integrity of the original container. Adam is designing units based on one container, with the emphasis that it may not be everything that you could want, but it will be everything you really need. The focus here is affordability (the base unit is under $100k), sustainability, and local production using island-based suppliers for everything. Not to mention you won’t have to worry about the big one in one of these.
I see some really interesting potential here in a turn-key garden suite, COVID home office, or caregiver quarters. They’re small, but we’ve seen strong demand for micro-condos of the same size, and the detached nature of these would make them far more desiderable. Because construction is so expensive we’ve seen new construction generally maximize the living space that fits on a site, but it will be interesting to see where the economics of a smaller space makes sense. So far no one has cracked the garden suite nut (only a few built despite thousands of potential lots that could accomodate one) but Adam may be on to something here.
The 320sqft Clovelly design to be constructed in Fernwood
The first unit is under construction right now in Fernwood, slated for completion this fall at which point it will be open for viewing for some time before being rented out. You can keep apprised of the progress on their website or Facebook / Instagram.
It’s all about scale
Both Built Prefab and West Coast Container Homes emphasized that the key to further driving costs down is scale. If you’re building one or five of a certain configuration, there are one time set up and planning costs that have to be added to the manufacturing. But if you are making tens or hundreds a year you can start to optimize the manufacturing, be it via automation, pre-building components in batches, and buying in bulk. The way to get there is to reduce the barrier to entry, and make some really compelling standard options available that will see the kind of uptake to bring individual costs down, then figure out a dead simple process to educate the public about the benefits or return of buying in.
It’s not just for construction costs though. Adam mentioned the permitting process for his first container home took several months, with close attention paid to every aspect of the unusual construction method. From the second build onwards, the staff will already be familiar with that design and approval should go much faster. Eventually you could imagine a pre-approval of certain popular designs, such that only site specific issues are even of consideration for the permits.
It will take more time and capital to truly revolutionize the new construction business, but to me it seems obvious that the days of custom design and on-site assembly are numbered. If we want to have affordable housing in attractive cities, it has to be.
Also weekly numbers courtesy of the VREB
| July 2020 |
July
2019
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 111 | 329 | 545 | 706 | |
| New Listings | 201 | 549 | 902 | 1152 | |
| Active Listings | 2675 | 2710 | 2757 | 2949 | |
| Sales to New Listings | 55% | 60% | 60% | 61% | |
| Sales YoY Change | +36% | +38% | +31% | ||
| Months of Inventory | 4.2 | ||||
Detached sales continue to soundly outpace last year, while condos are pretty much the same as a year ago.
It seems that the pent-up demand is concentrated entirely on single family properties. The 300 some condo sales that didn’t happen in the spring seem to have just disappeared instead of being shifted into the summer. Overall pent up supply and demand is depleting, but more slowly than it built up.
It will be interesting to see how sales and new listings do from now until the end of August. Normally both would be on a slow trajectory downwards starting about now, but we may see some more sellers hoping to take advantage of the strong detached market before the summer ends.
The market remains strong, but for now it seems that it has stopped strengthening. Despite the shifted spring, summer vacation schedules will still work against increasing sales.
We could create plenty of affordable housing on this island, but that would mean tiny homes, container homes, or pre-fab homes. Those can be very nice homes too.
But who wants single family homes which would sell for perhaps a quarter to a third of what a single family home now sells for here?
Not the lenders (small or no mortgages), not the municipalities (less tax revenue per resident), not the builders (not much framing in container or prefab homes), and probably not most realtors (low prices = low commissions).
So the market could and would supply what is there is a demand for – if it was allowed to, but is it going to be!?
We have the prices we do because of low interest rates and easy credit (in the last 20 years or so). We also have a boom generation which is the wealthiest in history. And we have tens of thousands of very wealthy immigrants and investors. The result should not be a surprise to anyone.
There’s no shortage of land on this island, what is holding us back is regulation and lack of transportation infrastructure.
Regarding demolitions Lief, my understanding is it takes so long to get planning permission in most municipalities that “developers” by the time they get permission to go ahead, are usually in too much of a hurry for “deconstruction”. Sad to see lumber of a quality you literally cannot buy here anymore being smashed and pushed into bin isn’t it? But can you build new construction with recycled lumber? It might cut into new lumber sales?
And as for multi-generational homes, we’d just be returning to the reality of before WWII, only today many/most of us have the means to do it in ways that give us more space. We might just have to face the fact that the lifestyles we’ve become accustomed to since the 1960s were a historical accident which isn’t likely to be repeated here again.
Marko, as you know governments, industry associations, the educational and the financial systems in places like Germany, Japan, Korea or Austria are all united by an awareness that they need to work together to some extent, and also united by a sense of their collective national interest in having an educated citizenry with real world skills, and nurturing and protecting their industrial bases. Here is North America we mostly have a bunch of individuals all running after their individual purposes and advantage. It worked OK while we were industrially and technologically dominant, but we can see what’s happened when we compete in the long term against societies that are much more wisely governed and led and pursue their economic goals far more effectively. German workers as you know are far better paid and have far better working conditions and shorter hours than most North Americans. Do they work harder? I don’t know. I’m sure many of them “work smarter” because of individual and collective pride and identity and knowledge that their country’s and ultimately their own wealth depends on manufacturing and exporting. We won’t even start comparing our educational systems! LOL
Fern: I know a lot of people who couldn’t afford a house in Victoria or anywhere in B.C. 25 years ago. They relocated to a different province and made a life elsewhere. I cannot afford to live in countless communities around the the world, that’s a fact of life. If you happen to reside in a desirable part of the world, like Victoria (most temperate climate in one of the best? country’s in the world) acquiring living accommodations are going to be out of reach for most people. The government cannot control this, and it is not their responsibility to do so. I f someone wants to reside in a place like Victoria, they have to have the money or be prepared to work their ass off. Our government only discourages hard work and promotes dependancy. We will never agree on this topic.
New post: https://househuntvictoria.ca/2020/07/27/airbnb-declines-but-slowly/
Hope everyone is enjoying the weather!
@nan
Spot on!
True. Another reason of multi generational family in China/India is that the grandparents there are expected to be taken care of by their children when they are older and have health issues, instead of going to “homes” (never mind of financial fund problem, some places may not even have nursing homes), thus the old saying in China “raise a son for my old age” （= Bring up children for the purpose of being looked after in old age）. But this culture in China is changing, too.
Even in Canada, how many of you remember your parents (or grandparents) took care of their parents with dementia in your own house (my husband’s mother did that), and how many of you want and can do the same for your parents or help with their monthly nursing home bills, regardless if they helped taking care your children or not?
@ Deb & Freedom_2008 etc
I have been thinking about this problem for years, since spending a number of years in Vancouver and seeing many Chinese & Indian families do it to great success, especially when buying RE. It is definitely more efficient from housing and tax perspectives. Big houses with multiple generations generally provide more scale per dollar and less income fragility and all that in-kind labor is far more efficient than earning taxable income and then paying for market value childcare etc.
I came to the conclusion that one of the reasons why the grandparents from China/ India do this is because their parents raised their kids while they worked and lived their lives. They haven’t raised kids yet!
For this transition to occur in western society, a transitional generation would need to raise their own kids and then their grand kids and to your point Deb, after doing kids for 30 years, you just don’t want to do it for 30 more.
My parents are the exact same – “We already raised you, we’ll take the kids for limited periods on our terms”
I figured that in order to make this transition, you need poor parents. The poorer your parents are, the more willingly they will live in your basement/ spare room / suite to avoid rent at their own expense of having the kids. Lo and behold, I have seen this quite a few times among my friends. If you have reasonably well to do parents, expect to raise your own kids and fork out for childcare if you both work because your parents aren’t only retired from work, but retired from being parents too.
Wait until she becomes a grandparent to see if she wants to do it herself 😉
Are you actually living with your adult children?
@Totoro
Call me mean but having raised two children while working full time off an on I would hate living in the same home as those children and looking after their off-spring on a full time basis. I guess I am from a different culture because my son’s wife seems to think that is what we should want to do.
We on the other hand love our to pursue our own lives and visit with the extended family occasionally living with them is not an option we would willingly take.
They closed it because the ocean was being too “enriched” with “nutrients” that “cause an abundance of sea life,” right, Mt. Tolmie Foothills?
https://househuntvictoria.ca/2020/07/13/employment-recovers-strongly-in-victoria-but-its-about-to-lose-meaning/#comment-72009
As a woman, I’m pretty happy that I wasn’t stuck in a stereotype like prior generations. On the other hand, as a gen x’r who grew up believing I’d be able to work and have a family I quickly realized that two people working full-time outside the home wasn’t the best option with kids. I’m not saying you can’t do it, many people do, but it was not a match for me and I can’t believe we’ve built our society around this model and called it liberation instead of the stressful juggling act it actually is.
I think if we are going to ‘have it all’ then family and home can’t be left to the hours around work with no additional support. The cultures that seem to have figured this out tend to live in multi-generational households where grandparents help with childcare and get the real benefit of interacting with family on a daily basis. Caveat being you all have to get along. And you’ll more likely be able to afford a home in Victoria if you have two or three generations under one larger roof – or two families even.
Wow how much reusable materials could be saved and reused in house deconstruction?
I’m watching a 3.5 million dollar 6000sqft home be taken apart by a excavator.
Was a beautiful home but not to the new owners.
Anyways thought it was fitting for the post. So many items inside I’m sure the owners don’t W care and just rip it all down without trying to sell or reuse anything it seems.
I am not sure there are many families that would be comfortable living off what the average family lived off in the 70s. A microwave or TV cost the equivalent of over 100 hours of work. Nobody had cell phones, let alone smart phones. About a third of households didn’t own a washing machine.
So the woman of the household didn’t work for a wage, but spent all day washing clothes and doing other household chores that are now mostly automated thanks to the much higher income or cheaper goods we have.
If Canada went back to the quality of life in the 70s we would definitely not be the 11th happiest country in the world.
It’s more likely that all Rockland houses have increased by $1.45 million in the past 3 years right?
KennyG: Regarding Rockland, it is possible that they may have installed a new front door and added some landscaping which probably cost about 1.9 million and would create a serious loss for the owners.
Frank, thanks for sharing your story. I don’t think people who own homes have not worked hard. It is just that government policies made purposely to increase home prices are unfair to people who also work hard but who now can’t afford to buy a home or even rent a place. Its not about wanting total government control, just a fairer system that considers the interests of all income groups and doesn’t advantage home owners over others.
An unplanned wastewater discharge out the short outfall overnight on July 23, and the shorelines affected are along Dallas Road between Government Street and Crescent Road including Holland Point, Clover Point, Ross Bay and Gonzales Bay. As a result of this discharge, residents were advised to avoid entering the waters along the affected shorelines, as the wastewater may pose a health risk
I noticed they closed down a bunch of beaches this weekend (including Gonzales). Must have been too much fertilizer in the water.
Most of those Japanese cars you get in Canada are actually built in Canada Marko. Out in Ontario. They actually build a lot for the US as well.
Have you been outside BC within Canada? Because I’d say the same throughout the country.
1745 Rockland sold for a cool $1.45 mil over what it was purchased for 3 years ago. It’ll take some creative accounting to make this one look like a catastrophic loss for the seller, but I’m sure LookingAtOptions is up to the task.
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If it was just about the money, given the opportunity cost of the money and reno costs over 3 years, they would have been most likely better off just putting the money in an balanced mutual fund, even after capital gains tax, without having to do any work, although it sounds like it wasn’t done with profit in mind.
The pictures of 1745 Rockland from 3 years ago and now show what an amazing job the current owners did. I don’t know how much it costs to remodel a house and yard of that size to that quality (any estimates?) but I expect they still made a good profit. But some people don’t want to spend 18 months renovating and are willing to pay extra for someone else to do that.
Here’s an article on the renos: https://www.timescolonist.com/homes/house-beautiful-120-year-old-rattenbury-home-gets-new-life-in-rockland-1.23896406.
They took it to the studs, rebuilt all the plaster walls, spent 3 weeks on asbestos removal alone. Planned to live in it forever. Pictures show they also added a swimming pool.
Fern: True owning properties on the Island has been good for me. Only one is in Victoria, the other in Ladysmith. I have been providing renters very nice accommodations since 1989. That first house had a mortgage rate of 12.25%. It took a lot of balls to buy when I did and the sellers were more than happy to take my money. No one ever asked or cared that I was an out of province buyer, they just wanted to sell their home. I have been priced out of Victoria’s market for 20 years and had to look up Island for another investment. The best part of investing in B.C. is the quality of the tenants. In 30 years I have never had to repair damage done by a tenant, while landlords in Manitoba are constantly dealing with deadbeat renters that leave your property in shambles. The people in Manitoba are irresponsible and destructive making owning a rental property a nightmare. If you want complete government control over everything, keep voting for the NDP and expect to live in a country like Venezuela in a few years.
@FormerLandlord said “We would be so much poorer if we were forced to buy everything local. This new great wage that everyone would be getting would be useless since we could barely afford any of these locally made goods that will be very expensive. Also we wouldn’t be able to sell these goods abroad because they would be so expensive, which would cause the CND to become worth less. Now our money is not worth anything, and as these companies that have to pay such high wages go busy, we would no longer afford being able to buy these goods abroad and the shelves in stores will start to empty.”
@FormerLandlord said “Also Canada is able to compete in lots of areas like the Tech Sector, so there will still be lots of opportunities for employment.
@FormerLandlord said “There was a country that went down this path recently called Venezuela.”
“The politicians are put there to give you the idea you have freedom of choice. You don’t. You have no choice. You have owners. They own you. They own everything. They own all the important land, they own and control the corporations that’ve long since bought and paid for, the senate, the congress, the state houses, the city halls, they got the judges in their back pocket, and they own all the big media companies so they control just about all of the news and the information you get to hear. They got you by the balls. They spend billions of dollars every year lobbying to get what they want. Well, we know what they want. They want more for themselves and less for everybody else. But I’ll tell you what they don’t want. They don’t want a population of citizens capable of critical thinking. They don’t want well informed, well educated people capable of critical thinking. They’re not interested in that. That doesn’t help them.”
@Marko said, “Wow….lots of people living in delusional lala land.”
@Marko said, “I for one do not want to be forced to buy a Canadian poorly designed and built in Canada car for 50k when I can buy a Japanese well designed and built in Japan for 20k.”
@Marko said, “Just think how well we did designing and building the fastcats in BC.”
Because 3 catamarans were problematic (and highly politicised) that means that Canada should not try to be a value-added country, and instead, just rip & ship resources to primarily benefit foreign-owned corporations?
1745 Rockland sold for a cool $1.45 mil over what it was purchased for 3 years ago. It’ll take some creative accounting to make this one look like a catastrophic loss for the seller, but I’m sure LookingAtOptions is up to the task.
We would be so much poorer if we were forced to buy everything local. This new great wage that everyone would be getting would be useless since we could barely afford any of these locally made goods that will be very expensive. Also we wouldn’t be able to sell these goods abroad because they would be so expensive, which would cause the CND to become worth less. Now our money is not worth anything, and as these companies that have to pay such high wages go busy, we would no longer afford being able to buy these goods abroad and the shelves in stores will start to empty.
There was a country that went down this path recently called Venezuela.
Also Canada is able to compete in lots of areas like the Tech Sector, so there will still be lots of opportunities for employment.
$3.2 million.
Some huge sales today again. Looks to be another over $1 million average for the month.
Wow….lots of people living in delusional lala land.
I for one do not want to be forced to buy a Canadian poorly designed and built in Canada car for 50k when I can buy a Japanese well designed and built in Japan for 20k.
Just think how well we did designing and building the fastcats in BC.
I’ve traveled to 38 countries so far and there are some massive cultural differences that make certain countries non-competitive when it comes to manufacturing. I frequently go to Graz, Austria which is less than a 2 hr drive from my condo in Croatia. Croatia is a 3rd world economy and Austria is a powerhouse. It’s pretty simple, Croatians are lazy as *** (I am 100% Croatian) and disorganized and Austrians are organized and hard working. Croatians blame their poor economy on the government….favorite past time. Business person comes to Croatia opens a factory and no one wants to work, classic.
Canadians are a bit more organized but work ethic is poor compared to other powerhouse countries.
I don’t think I would last two days in my friend’s factory in Taiwan…..I just don’t have the discipline or work ethic. Has nothing to do with wages or working conditions….the factory is super safe, organized, cooks cooking lunch for all the employees. My friend and I ate two days in a row in the cafeteria with all the employees and it was top notch food. But damn these people work hard. I rather just buy consumer goods from them than have to make it locally inefficiently.
Does anyone know what 1745 Rockland sold for?
@alexandracdn the question I ask is why should folks born in BC, with friend & family ties here, be forced out because the BC Liberals, and the federal Liberals & Conservatives sold our province out to global and local wealth parasites, money launderers, and Chinese drug triads, to enrich their own bank accounts and to benefit their donors?
“When I was young, a single income could support a family, but the Liberals & Conservatives sold us out with “free trade” agreements to bust unions and send decent paying jobs offshore. Nothing is “made in Canada” anymore. They also brought in temporary foreign workers to keep wages low.”
Exactly!
“University fees rose 40% in a decade (2006-2016), and are higher than ever to keep taxes low for the 1%, as locals, held to a higher grade standard, are forced to compete with foreign students for space, on (and off) campus.”
Truth!
“Rents and housing prices are punitive for those earning a living in Canada. Minimum wage is pathetic and has not kept pace with the cost of living – not even close.”
So true!
“Interest rates are; have been, pathetically low for years – punishing savers, to goose the housing market for the boomers.”
Exactly!
“CMHC (taxpayers) backstop multinational banks that at one time were giving mortgages to foreign students without requiring ANY proof of income (see image)….Passports; 10 year visas were sold to offshore wealth parasites, money launderers, and drug cartels to keep the real estate ponzi scheme going.”
Well said!
“Seems the only folks the government is motivating with endless handouts are the the asset owning class, and the 1%. Everyone else can eat cake, though, right?”
Thank you !
“BTW, if the Winnipeg housing market is “hot” and the city is increasingly unequal, I’m guessing the money launderers have moved in. Instead of blaming the poor for being poor, you might consider that the wealth gap is by design, so the folks at the top can hoard further riches….You holding 2 properties in Victoria has likely been great for you, but what about the Victorians looking to own a home”
So true!
This whole post thumbs up times 1000!
@Umm…really? said, “Only if we could get government out of the business of subsiding housing as well.”
@Marko said “Reality is people in Croatia and Canada are too lazy culturally to compete with a country like South Korea which has a massive ship building industry.
You can’t expect government to forever subsidize business that can’t compete in the global market places especially those that aren’t important for national security.”
I can only speak about Canada. The question to ask is why should Canadians have to compete with workers from other countries? Why shouldn’t businesses employing Canadians pay a living wage, and be rewarded for that?
Is that really what we want, Marko? For Canada & Canadians to have worse wages, a worse social safety net, & worse environmental protections so the multi-millionaires can become billionaires?
Global governments are never going to grant all us 7 billion peons the ability to freely move for the highest wages (which would force corporations to level the playing field) but they’ve allowed them free movement to chase the bottom, and pollute the planet while they’re at it.
Rather than compare how well the shipbuilding (or whatever) global industry is doing, lets talk about what actually matters: happiness.
South Korea rates 58th globally, and Canada is at 11th. Governments should exist to benefit ALL citizens. Ottawa should be striving to compete for our happiness with (1st place) Finland, not South Korea, with their appalling and tragic suicide rank- the 4th highest in the world.
“Reality is people in Croatia and Canada are too lazy culturally to compete with a country like South Korea which has a massive ship building industry.”
Perhaps we should oppose the globalization that undermines the right to fair wages that our parents fought for instead of trying to compete against slave wages.
From Reddit Victoria:
” Posted byu/treesareteachers
7 hours ago
MEC requiring masks heads up
Friendly heads up, MEC has taken on the (awesome) initiative to only allow customers with face masks in side their stores!
Don’t waste a trip to town while forgetting your mask like I did lmao”
Couldn’t agree more….so many things broken with the system. It is sad that someone with an uninsured mortgage gets a better mortgage rate vs someone who has saved up 20%+. Unfortunately, like the poster posted below you have to play the game of life.
Only if we could get government out of the business of subsiding housing as well.
And it turns out a lot of your speculation, opinions and selective data were unfactual.
You should let your words speak for themselves and not need to lecture others on what you think facts are.
It reminds me of a certain someone that constantly feels the need to tell others that he is a stable genius.
Your truthful statement is going to ruffle a few feathers, because the solution involves hard work and it is easier to be in denial.
The real secret to Asian American success was not education — https://www.washingtonpost.com/news/wonk/wp/2016/11/19/the-real-secret-to-asian-american-success-was-not-education/
In America, Immigrants Really Do Get the Job Done — https://hbswk.hbs.edu/item/in-america-immigrants-really-do-get-the-job-done
Maybe so Morrisey……..How are Canadians supposed to save money? How are Canadians supposed to afford an education? How are Canadians supposed to afford housing?
Maybe you should change that to How are British Columbians supposed to save money, supposed to afford housing etc.
Look up a few houses in the cities of Edmonton, Calgary, Saskatoon, Regina, Winnipeg & Halifax. We are talking a nice house in a decent area with 3 bedrooms and 2 baths. In everyone of those cities you will see many of them asking between $325K & $385K. Now, look at the statistics. Most “family” homes have 2.1 to 2.2 people. Family incomes….between $103K & $108K.
Those same homes in the Victoria area would sell for between $600K & $1M.
So in most large cities in the provinces that aren’t BC or Ontario a couple can buy a nice family home for say what would be maybe 3.5 years years of their family income.
I know of quite a few couples that live in some of those cities. They are all in their late 30’s to mid 40’s. Do they stretch their mortgage out to the 25 yrs? Yes. Do they save and pay it down after the term ends? Nope. Do they put more in their TFSA and RRSPs than do the couples that live here? Don’t think so. Do they save considerably more money and put the funds into RESPs for their children more than couples that live here? Don’t think so. Do they take nicer holidays? Do they buy late model cars more often…………one would think they must. The thing is honestly, they don’t manage their money properly.
When I was younger, I would listen to the guys around the coffee machine……….”.We could never afford a home here. ” But for everyone of them, there were three other men that seemingly could afford it. And in many cases the ones that couldn’t afford it for some reason had better incomes than the ones that could. Me? I was single for the most part. Supported a child and worked 2&3 jobs sometimes. Probably made 70% of the what the guys were earning around the coffee pot………..but still, “Good money for a woman” I was able to purchase a home…..many of them actually over time.
How old are you Morrisey? You must be pretty old. Because I am. What I remember is that most women did work outside the home, at least here in Victoria since the mid 70’s. Mind you, unless they had a degree, they weren’t making much more than minimum wage.
Anyway, I admit, it is very challenging for young couples in BC to get ahead these days without some financial support from their parents. Life is kind of a game. You have to play it well and try to make it fun. Find fun things to do that don’t cost anything. And know that you are probably better off than most people in this world. Knowing that, you are truly rich.
I spent a few days at my friend’s factory in Taiwan last year and it was super eye opening for me. It would simply be impossible to be competitive with our culture here.
Same with the culture in Croatia where I am from. For example, my father was a naval architect in Croatia and the ship building industry there is bust the same way it is here and everyone blames the government.
Reality is people in Croatia and Canada are too lazy culturally to compete with a country like South Korea which has a massive ship building industry.
You can’t expect government to forever subsidize business that can’t compete in the global market places especially those that aren’t important for national security.
Introvert: Why would people not flock to Winnipeg?
@Frank said, “Governments have to learn how to motivate people to improve their own situation instead of giving endless handouts that only perpetuate their dependancy.”
Seriously?
When I was young, a single income could support a family, but the Liberals & Conservatives sold us out with “free trade” agreements to bust unions and send decent paying jobs offshore. Nothing is “made in Canada” anymore. They also brought in temporary foreign workers to keep wages low.
University fees rose 40% in a decade (2006-2016), and are higher than ever to keep taxes low for the 1%, as locals, held to a higher grade standard, are forced to compete with foreign students for space, on (and off) campus. https://globalnews.ca/news/2924898/university-tuition-fees-rise-40-per-cent-in-a-decade
Rents and housing prices are punitive for those earning a living in Canada. Minimum wage is pathetic and has not kept pace with the cost of living – not even close.
Interest rates are, & have been, pathetically low for years – punishing savers, to goose the housing market for the boomers.
CMHC (taxpayers) backstop multinational banks that at one time were giving mortgages to foreign students without requiring ANY proof of income (see image).
Passports & 10 year visas were sold to offshore wealth parasites, money launderers, and drug cartels to keep the real estate ponzi scheme going.
Seems the only folks the government is motivating with endless handouts are the the asset owning class, and the 1%. Everyone else can eat cake, though, right?
BTW, if the Winnipeg housing market is “hot” and the city is increasingly unequal, I’m guessing the money launderers have moved in. Instead of blaming the poor for being poor, you might consider that the wealth gap is by design, so the folks at the top can hoard further riches.
You holding 2 properties in Victoria has likely been great for you, but what about the Victorians looking to own a home near their family, and not pay someone’s morgage? Perhaps homes should be for living, not for speculation.
2555 cotswold was in way better shape. 1.675 may have seemed like a good deal vs. land value on paper, but it was not an easy sell then or now because you would need to be willing to live in a dated house with structural issues (two hundred thousand to rectify by my inexpert estimate), or well past a million to tear down and rebuild to the Uplands design standards – exceeding adjacent home values.
The main thing that strikes me about 2505 Cotswold is that they got it for a good price in 2019, below the land value according to its assessment and compared to the sale of neighbouring property of similar size. 2555 Cotswold (old house on similar sized lot) also sold in early 2019, for $1.825M. In order not to lose money when having to sell your house 18 months later, it helps if you got a good deal when you bought it. Unless the city isn’t very good at assessing land values within a neighbourhood, it seems $1.675M in 2019 was a good deal.
totoro: That’s pretty incredible actually. To be able to buy and sell a vacant house in under 2 years and actually make a small amount of money is crazy.
LookingAtOptions: In that case, to answer your question: “why are you so adamant to prove it was a good transaction, when the facts show otherwise?”. I would say that, with your help, it has been proven that this transaction was a moneymaker whether the property was:
a) a primary residence,
b) a rental property,
c) simply left entirely vacant.
Still you seem to be missing the bigger picture that apparently this was not meant to be an investment property at all. So even if they did lose money all you’re proving is that someone had a (potentially unfortunate) change of plans as the market value of the property increased by 9% in 18 months.
They did not sell another property to buy this one so they never paid for two sets of real estate fees, land transfer taxes, home inspections (they never even paid for one as they were planning on tearing it down), or moving costs and they negotiated a discount on realtor fees. By my calculations they came out slightly ahead accounting for everything – way better than the alternative that could have happened had the market dropped as it looked like it was going to do. It had been on the market for so long I expected a lower selling price.
I was watching this sale as a bit of a market barometer and my take is that it is a good time to sell right now, better than earlier in the year.
Thanks for the response. I own two properties on the Island and have been an investor in B.C. real estate since 1989. However, I still reside in Winnipeg, a city that is getting more dangerous and squalid looking in certain areas, every year. The real estate market here is very hot lately, with lots of bidding wars. Don’t ask me why, but our extremely low covid numbers probably help. Already 23 murders this year with no hope in sight. The divide between the haves and have -nots is growing every day. Governments have to learn how to motivate people to improve their own situation instead of giving endless handouts that only perpetuate their dependancy.
Let’s face it. The way the game is set up it’s heads homeowners win, and tails non-homeowners lose.
Congratulations you have done a marvelous job in trying to prove that we are not in a seller’s market currently by using a home that sold for $150k more now compared to 18 months ago as an example. Bravo bravo.
Yes, and what’s the snowbird-iest place to live in Canada?
Agreed. If the virus keeps kicking around for a few more years, causing trouble, a low-infection region like Vancouver Island will be even more desirable (assuming we keep our cases low).
Also, keep an eye on the Hong Kong situation in the short- and medium-term. There are roughly 295,000 Canadians living in Hong Kong (more people than live in Regina or Saskatoon). If these folks return to Canada in any kind of numbers over the next few months/years, they’re probably not going to flock to Winnipeg.
I only first posted on this transaction after other posters seemed to be admiring the transaction. So, you are okay with several people admiring what was actually a bad transaction, but you are not okay with somebody pointing out the facts ? Why?
My first post on the topic started and ended with the question clearly: “what gives with all of the excitement and applause for what happened here? ”
You can’t pick and choose parts of a transaction you like. Buying and selling in 18 months resulted in an overall loss of money here, DESPITE what appeared to be a gain. PERIOD.
Why people were applauding that, I couldn’t understand. It sounds like you finally agree with the facts that this was a loss. So let me turn your own question back on you: “why are you so adamant to prove it was a good transaction, when the facts show otherwise? “.
Why is there so much resistance to facts and Truth on this site, except when it backs up a person’s given hopes?
In an entirely different recent exchange here, I pointed out that the saying “Life in Victoria is about 10 years behind Vancouver” is complete and utter nonsense. Again, just the facts.
I notice Ks112 has stopped fighting the facts, LOL.
When losing on logic and facts, instead of being man/woman enough to admit the truth he/she resorts to being a sore loser, and attempted insults. Way to fly your white flag there, champ!
Thank God we only have to hear from Ks112 occasionally here, not in real life; I do feel sorry for any of relatives or coworkers that are forced to put up with such a childish sore loser.
For the umpteenth time, I am not a bear. A bear “believes that a particular security, or the broader market is headed downward”. As I have said before, I make no predictions about where the market is headed. I do wish it would head down, for the sake of young and old buyers alike, but I am the first to say I have no idea.
I will defend the facts, and Truth, when I see obvious mistakes. And that goes for whether or not the truth sides with people hoping for lower prices or hoping for higher prices. Truth and facts are paramount.
As I have also said before, i consider myself extremely fortunate to be financially quite comfortable. Why can’t some people understand that even homeowners and other people that are financially quite comfortable can hope for things to be more affordable for their children, grandchildren, friends, community?
For example, you only need to look as far as the majority of Vancouver homeowners who, polled in recent years, thought their own home prices were too high. Gasp Yes, that means there’s more to life than greed, for many people.
Do you really think that everyone who is financially well off could care less about the ability for others to buy homes? “Screw you, I got mine” is what you expect all that are doing financially fine to say?
Sadly, that only further betrays your lack of character, and imagination.
Check out this loss. First google utube Blair Venstra 2485 Rhapsody Place. I think it was taken in 2016 . Beautiful home (in Langford). Zebra design, around 3600 sq. ft. Legal one bedroom suite. It was built in 2010 and I don’t know what the original sale price was. Then in 2014 The house was sold for $760K. The video was in 2016 and at that time they were asking around $1.1M. Don’t know what it sold for. Then in Jan 2017 the home sold for $910K. And the last sale? Jan 2019…………it went for $875K. Why doesn’t anyone stay in this beautiful home?
If you look at the post, what lookingatoptions is trying to prove is that it isn’t a seller’s market right now…..
I think what LookingAtOptions is trying to say is whenever people look at so called profits in real estate they neglect the fact to tell you that the seller most likely paid real estate fees 2x which could easily have been 100K in this case , also land transfer taxes 2x which could be another 70K plus when they buy again, home inspections x 2, mortgage interest, mortgage penalities, renovations cost, property taxes, insurance, moving costs (not to mention stress) and the list goes on… Most people would be shocked at how little they actually made on their house if they added up all of these fees, especially in the short term of less then 10 years. But whenever media shows you what a house was bought and sold for they leave out all these fact just like those tv shows that renovate your basement and show how great it is that someone else is paying for your mortgage and then forget to tell you that you’ll now be living in 1,000 sq feet or less and have no storage space.
I cant figure out what would be worse, living in nice new home in Langhole or living in a typical awful stucco box in Gordon head
13 years of HHV I still can’t comprehend these seller didn’t make as much or seller lost money arguments?
The house re-sold for $150,000 more in 18 months. As a buyer how on earth does it help me whether the seller made $50k or lost $50k, paid $10k in real estate commission or paid $50k in real estate commission?
It is completely irrelevant imo, all I know is as the buyer I have the shell out 150k more than I did 18 months ago.
Off camping will be a bit later on Monday with the weeks numbers
The geopolitical tensions and current pandemic insanity in the snowbird states will do nothing but escalate Canadian real estate prices. Especially in areas such as Vancouver Island that were not greatly impacted by the covid virus, price increases will be unbelievable to most. There’s a ton of money looking for a safe place to live.
Lookingatoptions you should really spend more time trying to improve your own finances instead of counting other ppl’s pockets. If someone can afford a $1.8m home and keep it vacant for a year and half then I think they are doing just fine.
Typical bear behavior, trying to poke holes into transactions of million dollar homes from other ppl all while having trouble scraping up enough for a 600k house on a 3000 sqft lot in Langford.
People have built whole Twitter accounts dedicated to just this. The reason is solace.
It’s all so easy to see and typical.
I mean, with all of that in mind, why are you so adamant to prove it was a bad transaction? I don’t think anyone will argue that buying a place, keeping it vacant for a year, and then trying to sell it is generally a good investment plan. Obviously this was not an investment, so who cares?
What people are “admiring” is the fact that the market value of this house went up $150k in 18 months.
I admittedly did not look at the listing or read into the backstory all that much. All I noticed was the glaring omission of a mortgage in your initial numbers, which was primarily the point of my original post. It would be foolish to not take advantage of that sort of leverage at these interest rates if the home was a principal residence or a rental property.
Welcome to the MELT UP soon to be followed by the MELT DOWN! This is typical in a housing crash, this place is full of bulls but “if we all thought the same we would all be wrong”. You guys better rush out and buy Tesla stocks as well with the rest of the sheep!
I’m no Sherlock Holmes here, why would you think I had to make many assumptions about the place not being occupied?
I don’t memorize property tax rates either. Every property listing shows property tax amount for a recent year.
.
As shown above, it was not a rental.
But, even if it had been, that rent would be taxable as personal income. So, likely 40% of that “ideal scenario” 63k would poofdisappear. That brings you down to 38k fantasy rental income, but as we know the place was largely empty.
And in anither dimension where it had been a rental for 18 months, when the property was sold the price gains would be subject to capital gains tax, because then it’s not a principal residence.
As much as people don’t want to hear it, you can’t put lipstick on a pig.
It’s a bad transaction, nothing to admire whatsoever.
What confuses me is why some people here are trying so hard to make a bad transaction look like a good outcome. Are you interested in Truth, or fantasy?
Chances are anyone who purchases a home for $1.7M probably had a home to sell previously, so they also had all the selling expenses of that home. And, are they buying another home? More costs. If you have nice furnishings etc. and they probably do, then that’s another few thousand for each move.
i would say the rent is probably above 3500 for that house, so 18 month would be 63k minimum.
https://househuntvictoria.ca/2020/07/20/the-way-we-build-houses-is-insane/#comment-72231
Will they have any capital gains due and are they paying tax on their rental income?
Okay, you’re assuming that the place was vacant. Yes, I agree buying a place, keeping it vacant for 18 months, and then selling it is not a good investment. If they either lived in it, or rented it out, then my numbers hold with the reasonable assumption that the house is worth at least ~$2700/mo in rent in Victoria.
I stand corrected on property taxes then. I estimated based on my own, but I live in Victoria and not Oak Bay.
Say what? From the property’s own listing, they paid $10, 531 for 2018 property taxes. For 18 months, just multiply by 1.5 for a pretty good estimate ($16,000 in property taxes for 18 months). How the heck is that “inflated”?
As for the insurance, a bit over $300 per month here is not unreasonable for a good set of insurance coverage options for that property. If you want to go more bare-bones in insurance, (which doesn’t sound like an Uplands attitude to me, by the way) you might be able to go around $200 per month there. You just added a paltry $1500 to the profit over 18 months…taking it from $23,000 to $24,500 (or $38,000 to $39,500 for a lived-in Canadian principal residence). Hooray? No, it’s still peanuts. And you don’t address all the unknown expenses I list, which definitely add significantly to the bottom line.
What?!? You don’t get to ignore enormous mortgage interest expenses!! Your assumption that they borrowed 80% of the purchase price makes the result WORSE, not better.
An 80% mortgage means they took out a mortgage for $1,340,000.
Assuming they got a good mortgage rate of something like 2.69%, over 18 months they paid roughly $50,000 for ONLY the interest portion of mortgage payments.
Congratulations, you’ve just taken the paltry profits from my scenarios (of $23,000 or $38,000) and you have managed to eliminate that entirely with a subtraction of $50,000 in interest-only portion of mortgage payments.
Paradoxically, thanks for helping clarify that the owner ostensibly LOST money, even when selling into today’s “seller’s market”, the most active June/July in many years.
Standing ovation! 😉 (Insert “slow.clap.jpg” here)
And it gets even better. If, as you say, they put down less than 20% down payment, they also paid a hefty mortgage insurance throughout the 18 months. Add that to the losses, it ain’t cheap.
And, if they had any kind of mortgage, they’ll have a GIGANTIC penalty to pay their bank for breaking the mortgage only 18 months into ownership. That is an unknown expense left out of my calculations, but breaking a mortgage for $1,340,000, with 3.5 years left on it, would be very, very, expensive. That’s a BIG addition to the losses.
If they had a mortgage of 80%, clearly they lost money overall , for their empty home.
I know the owners. They are Canadian and did not pay cash for it. They just changed their plans for reasons not foreseen at the time of purchase. It happens. I think they did well given the real risk of losing money had the market not miraculously continued to rise during covid.
That assumes they put 100% down on the house for some reason. More likely they put down 20% if it’s an investment property, or even less if it was a principal residence. Even using your inflated property tax and insurance numbers, at 20% down it’s an 11.7% return over 18 months.
I get the sense that the transaction is being applauded here. What?!? How the hell is that anything but a bad return on their money and time?
Purchase price 18 months ago:
$1,675,000
Property transfer tax, inspection, lawyer and closing costs (due at time of purchase):
$33,000. (But if they are not Canadian buyers, they also paid a whopping extra 20% foreign buyers’ tax, which is more like $360,000 in property transfer taxes upon purchase).
Insurance fees over 18 months:
~$5000
Property taxes over 18 months:
$16,000
Realtor commissions upon recent sale:
$58,000
BC Speculation tax for 18 months (as discussed, appears not lived in; listing photos also showed it totally empty, “ready for quick sale” ):
$15,000 if a Canadian owner. $60,000 if a non-Canadian owner.
Gardening & exterior upkeep:
$X,XXX
Maintenance, upgrades and renos (especially in preparation to sell):
$XX,XXX
Utilities (even if empty, you’re going to have some lights and water going) :
$X,XXX
Mortgage interest paid:
$XX,XXX
Mortgage breakage penalties:
$X,XXX
Other Misc:
$X,XXX
(Personal time, management work, sleepless nights, stress — esp. during a pandemic:
$priceless).
Final sale price:
$1,825,000
Even if we of ignore the various unknown amounts above, gain for the owner — only if a Canadian —was a pathetic $23,000 after spending $1,802,000 (mostly upfront) over 18 months. That’s a 1.28% return over 18 months, which is a 0.85% profit per annum. AND, since it was not a principal residence, that sad 0.85% profit is whittled down much further since it is subject to capital gains taxes. What a nightmare!
If the person was non-Canadian, they lost at least $375,000 on their investment, over 18 months — more than a 20% overall loss. Don’t forget, these are supposed to be the “good times”. Why any non-Canadian would buy here is beyond me.
Even under more generous scenario assumptions, it’s not much better.
If we assume the owner was Canadian, and despite the place being empty can claim it as principal residence (thus removing the spec tax), they made $38,000 on the sale, but not including all those unknown expense amounts. Generously assuming they made $38,000 after spending $1,787,000, that’s 2.1% over 18 months, or 1.4% per annum.
In this Canadian-principal-residence scenario, they don’t pay capital gains taxes on their overall $38,000 (or 1.4% per annum) “windfall”. However, 18 months ago anybody could have obtained a 3% GIC for this length of time , and come out tidily ahead even after income taxes, and that’s not even including all the unknown expenses above which most certainly dwindle the $38,000 profit down to much less.
The icing on the cake:
All of this for a sale that’s supposed to be during a “seller’s market” and the most active June/July market in years, selling at a time that mortgage rates are at historical lows. Imagine how much worse this sale would be if mortgage rates don’t plummet between the purchase and sale date (As an aside, mortgage rates cannot fall anymore, for future buyers hoping for even this paltry outcome).
I rate this property transaction a “D-“. And if they were non-Canadian, they get an “F” for “Fark me, my losses are approaching half a million dollars, after exchange rates on a weakened Canadian dollar”.
I ask again, what gives with all of the excitement and applause for what happened here? Surely this is not an example that’s supposed to instill confidence in buyers. Well, at least not in buyers who crunch the numbers.
With mortgage rates having no more room to go down, can any future buyers hope for a repeat of this “D-” scenario, where the miniscule profit was thanks to a market spurred on by lower rates?
Thanks Leo..Enjoy the interior! Watch out for those house boat parties.
Our realtor and friend says this is one of the busiest months he has ever had! The COVID market meltdown doesn’t seem to be happening, at least not in Victoria. I’m sure the stats will show a healthy market rebound this July.
I’m a home owner and also diversified in stocks, and the asset recoveries have blown my mind. I’ll admit that I also fell into a bit a despair during the March market crash but thank god I didn’t sell much of anything. Unfortunately, I didn’t buy either because my income unexpectedly dropped.
Ha ha still here…..it is totally nuts. I would say certain market segments are crazier than 2016.
The RE market must be pretty active judging by how seldom Marko is posting. That, or he’s in Croatia.
“Gateway to Red Deer.” I gotta remember that one. Jack Knox is a beaut.
Thanks LeoS – definitely wasn’t spec tax motivated – just a change of plans. Interesting that the price was so close to list after being on the market for months. Sellers market is likely stronger now than when listed.
https://www.timescolonist.com/news/local/jack-knox-seattle-nhl-team-s-name-fails-community-test-1.24175496
Original price $2,199,000
Reduced via several re-lists to $1,888,800 vs Assessment at $1,807,100 (incorrectly advertised as below assessment in the Member 2 Member notes)
Sold $1,825,000
Still a tidy uplift in 18 months though, it previously sold for $1,675,000 January 2019. Possible spec tax motivated sale.
Off in the interior for a while, but here’s the market activity to date. Note both of these are 14 day average values.
More bad news for landlords
According to a finder.com survey 1.5 million Canadians have moved back in with their parents due to Covid-19 and 278,000 parents have moved in with their children
https://www.ctvnews.ca/business/pattie-lovett-reid-nearly-1-in-10-canadians-have-seen-their-living-situation-change-due-to-coronavirus-1.5037372
Umm really: In case you are not aware Leo traditional gives an update on the numbers most Mondays. Considering the fantastic amount of high quality work he does for this web site you might reconsider asking him to do more in proving additional listing numbers.
Anyone know what 2505 Cotswold sold for? TIA
Yes, thank you for continuing to point that out (I’m not being sarcastic).
Meanwhile, BC Hydro is refusing to release its latest quarterly report on Site C, probably because it outlines yet more cost overruns (we started at $6.6B and now we’re at $10.7B, and counting).
Also, we don’t — and won’t — need lots more electricity for a long time. BC Hydro always cooks the books when it comes to forecasts:
https://thenarwhal.ca/bc-hydro-site-c-dam-covid-19-report-delay/
https://in-sights.ca/2019/03/03/demand-forecasting-falsehood-or-foolishness/
Leo S,
As we get to the end of the week, what are the new listing numbers looking like?
Thanks.
So are you comparing gold to cash or gold to real estate? Dollars are more liquid than gold.
I do agree that holding cash is would not be where you want to be if you are expecting inflation. However, historically there has been a higher chance to lose a substantial amount from gold in any given year than lose the same amount due to inflation (at least CND and USD)
It’s been pointed out that BC Hydro’s dams actually might be contributing a hell of a lot that isn’t accounted for.
Oh look, O&G wants wants BC Hydro to give them a long-term discount and a guarantee that their rate will never go up.
Guys, you’re fucking up the planet; why you should pay less than the rest of us for the privilege is beyond me.
Moreover, the province isn’t even making money off LNG. Royalties that were $2.05 per thousand cubic feet of gas in 2005 were $0.16 in 2018.
https://thenarwhal.ca/capp-lng-lobby-bc-government-hydroelectricity-discount/
https://thetyee.ca/Analysis/2020/07/09/LNG-Fail-For-BC/
Typically student rentals will be renewed in August and September, as far as Gold goes do you want to own dollars that are being debased by “money printing” or have an asset that is 100% percent liquid and protects your wealth… Hmmm.. It is without a doubt that houses will inflate however in the short to medium term they will most certainly deflate. I myself own multiple rentals however I have got out of the overvalued markets and into undervalued markets.. Ill pick up the overvalued properties on sale.
Of the rental houses close to me in Gordon Head, one is for sale and the rest are still being rented by post-secondary students even though it’s July and UVic undergrads are “not required to travel to or live in Victoria for the fall term.”
I’m actually a bit surprised that these rentals aren’t more vacant at this point.
My feeling as well. I already have more than enough of an allocation in real estate that I don’t need another inflation hedge. But likely true that gold will outperform RE this year. Much more volatile in general
The only inflation that is likely to occur is asset inflation — including real estate.
Sadly, you’re gonna be priced-out even harder when this is all over.
Gold is an unproductive asset to hold (unless you use it in building products). It is a hedge against inflation, but so is real estate. I can live in my house or rent it out. With gold you pay someone else to hold it in a vault.
In the short term a gamble on gold may work out, long term it adds no value to the economy. Especially if someday we discover unobtainium and decide to replace gold reserves with that.
If people were paying attention they would of bought gold when Basel 3 was held in Switzerland in April 2019 when it went from a tier 3 Asset back to a tier 1 asset. Could of picked it up before the break out for $1325 USD an ounce… That was the play not houses… Gold to outperform RE this year for certain! How about those rental properties, lots of students coming back, the vacancy rate will be at 10% in no time! I hope landlords have “wiggle room”…
Back in 2007/08 there were a lot of gold bugs on one of the old housing blogs pre-HHV. Seeing more and more interest in that again now.
In other words the world is floating on a sea of cash that was printed for QE and that is keeping rates very low.
World governments will now be printing a new tsunami of cash to pay for COVID handouts and all this new cash piled in top of the QE cash will create a massive glut of unwanted cash and that will drive down interest rates even more but paradoxically might cause rampant inflation due to nearly worthless cash. Strange times are ahead.
So 5% down and 3% cash back. We aren’t as far away from zero down mortgages as some think.
“If you can’t easily swing that, there are now lenders in the broker market offering up to 3% cash back at rates as low as 2.49%, just a smidge above the median 5-year fixed rate. On a $300,000 purchase with 5% down, that’s almost $9,000 cash in your pocket with an effective rate of just 1.85%.”
https://www.ratespy.com/cash-back-mortgages-get-more-competitive-072315037
Some places are just meant to be listed. In this case every year since 2015
Well that’s the big issue isn’t it. You know the joke about what BC stands for.
Victoria used to remind me of what Vancouver was like before the madness started in the late 1980’s. Not size of course – Vancouver was already much bigger than Vic is today – but in affordable lifestyle, lack of in-your-face social problems, and attitude. Now I hear suggestions, seriously it seems, that one ought to moonlight as an Uber driver to buy a townhouse God knows where.
“What decline? I’d say living quality in Victoria is up assuming you can afford it. More employment diversity, more things going on, better active transportation infrastructure, etc.
My sister lived on Pandora 20 years ago and anything that wasn’t nailed down was stolen. That’s not a new problem downtown.”
Downtown Victoria was way worse in the 1990s than it is now in my opinion. Not that vibrant in the day and dead at night.
There are more homeless now, but the long term trend is a declining crime rate in Victoria. People seem to perceive the opposite to be true.
This quote from Washington Post article that quotes from a Maclean’s article does not seem accurate. Also it is not clear where their numbers come from.
My understanding is that both Germany and Japan have given higher fiscal support as percentage of GDP for Covid-19.
https://www.csis.org/analysis/breaking-down-g20-covid-19-fiscal-response-june-2020-update
Much of Vancouver RE will never be affordable to regular folks ever again, but Mortimer makes priced-out people feel better by showing them that sometimes millionaires lose a fraction of their money.
Single family
Last week: 27/102 = 26.5% over ask
Under $1M only: 25/71 = 35%
So yes more in the last week. Week before that it was only 26% for under $1M detached.
It’s a dumb statement on many levels.
I was just looking at a place on North rd listed for 824K (interurban area) which i thought was priced too high – just sold for 901k. I know its anecdotal but are we seeing places for under 1M go over ask more now Leo (more than 25% from a couple weeks ago)?
@LookingAtOptions you are right, something else you never hear in this blog is frustrated sellers. I have seen so many in Victoria that anytime I see a For sale-sign I think about them. EVERY SINGLE PERSON i have known that had to sell went through a very hard time, except maybe 2016-2017 but no one in my circle of friends had to sell at that time. It is not as rosy as people in this blog want you to believe, quite the opposite.
For anyone interested in looking at seemingly endless examples of Vancouver owners selling at steep losses (purchase/sale prices, and assessed info for several years), I recommend you read through user Mortimer’s Twitter feed. Anybody can read through the Twitter feed, you don’t need to be a Twitter user. (If the link doesn’t work the first time, just click reload)
https://mobile.twitter.com/mortimer_1?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
Now what was that again about Victoria being a delayed version of Vancouver? 😉
Mortimer also posts regular examples of properties that are obviously ignoring the air-b-n-b rental rules in Vancouver (i.e., has to be principal residence, and registered for air-b-n-b). Once again, a clear example that there are a lot of people out there that couldn’t care less about breaking rules. How much you want to bet a lot of these rule-brraking air-b-n-b owners claimed CERB, too?
As well all know, and Leo S has also backed up with stats, foreign students/tourists in Victoria make up a significant proportion of the city’s economic lifeblood. So, this is bad news for the local economy:
“international students will not be allowed to enter Canada if they have received a student visa after the country’s border lockdown on March 18.
Even those who have a valid study permit from that date or earlier will be denied entry unless they can prove their travel is “non-discretionary or non-optional.”
Ouch.
https://www.thestar.com/news/gta/2020/07/21/canada-tells-most-international-students-not-to-come-until-travel-ban-is-lifted.html
All I’ve done is disagree with this statement, and pointed out how as a generalization it is ridiculous.
You assert that I misunderstand the statement, and so I’ve asked for clarification, and concrete examples.
Apparently that is me being “picky”. (I’ll have to remember that strategy next time I’m in a debate 😉 )
So far here are the vague clarifications I’ve been given:
Sorry, that doesn’t help much. “Slower life/changes” is very general — and I’ve already shown the general readings to be wrong.
Apparently we will be in need of a cryptologist.
🙂 Who would have thought such a simple phrase as “life in Victoria is about 10 years behind Vancouver” could be jam-packed with so much hidden information that we are all somehow expected to understand, yet still cannot be explained to me in a clear way?
Just face it, the phrase “life in Victoria is about 10 years behind Vancouver” is just plain wrong.
The phrase is empty of any real concrete meaning , and sounds like a desperate cheerleading pitch one would give to young misinformed mainlanders considering moving to Victoria.
No. Victoria cannot be generalized as being anything like Vancouver, nor being generally some X years behind Vancouver. They are two completely different lifestyles/experiences, always have been, and no comparisons across time give any rule of thumb which equates the two.
Victoria is NOT a mini-Vancouver that is just X years behind, and never will be.
Heck, if I got onto a time-travel ferry today and landed in 1990 Vancouver — a full thirty years ago — Vancouver would still feel like a completely different world in just about every way, compared to Victoria in year 2020.
Victoria should be proud enough to be taken on its own unique merits – and flaws.
PS – my Chinatown example does not help prove in any way that “life in Victoria is about 10 years behind Vancouver”. If anything, the example shows that the two two places are completely disconnected, and Victoria is not X years behind Vancouver in any way.
Victoria does its own thing. It will never be a Vancouver, and it is not even a Vancouver of 30 years ago, much less 10 years ago.
A few weeks ago, I posted debt-to-GDP numbers from Wikipedia which were a few years out of date.
Lately, I’ve seen numbers that put Canada in an even better position:
Another interesting thing to note is that Canada “doled out the most direct fiscal support of any G7 nation.”
https://www.washingtonpost.com/opinions/2020/07/22/canadas-fiscal-snapshot-looks-grim-we-can-transform-country-better/
What decline? I’d say living quality in Victoria is up assuming you can afford it. More employment diversity, more things going on, better active transportation infrastructure, etc.
My sister lived on Pandora 20 years ago and anything that wasn’t nailed down was stolen. That’s not a new problem downtown.
They actually had the equivalent over a hundred years ago, they became the Detroit Red Wings.
They won the Stanley Cup in 1925.
My feeling as I alluded to previously is that the rise in urban problems and decline in living quality, relative to population growth, has been much faster in Victoria than Vancouver. A lot of that is simply the result of Vancouver reaching a million plus before the onset of widespread homelessness, housing crisis and what have you. But Victoria has developed a Vancouver-sized attitude that it didn’t used to have and that other Canadian cities of the same size don’t have.
Isn’t that figure only referencing those people who claimed both CERB and EI at the same time? I would have thought there were many other ways to game the system that aren’t quite as easy for the government to retrospectively detect and quantify.
So $442M in CERB went to people that weren’t eligible. Of course the news likes to trumpet the big number, but if that’s the extent of it then it’s very low.
0.442B / $71.3B = 6.2% and a good chunk of that is probably just people making mistakes and will be recoverable. Pretty good for a program with zero checks. https://vancouversun.com/news/national/nearly-half-billion-in-cerb-cheques-went-to-canadians-that-werent-eligible
Haha, “10 years” is just a metaphor, if you are being that “picky” 😉
Isn’t what you said “Wasn’t Victoria’s Chinatown the first one in Canada? It even had a big head start on Vancouver, and 100+ years later Victoria’s Chinatown is still about 1 block in size compared to Vancouver’s endless sprawl.” a concrete (and somewhat extreme) example that how slow Victoria (life) change (or not change) compare to mainland? 🙂
“Life in Victoria” is a very general, overarching term..
But in this case it is something that we are supposed to know has a much more limited, specific meaning?
If what was meant by that was that “life pace/changes” in Victoria at a pace tens years behind Vancouver, well I don’t know what is meant by that. Could you give some concrete examples? “Changes” and “pace” in a city can mean many things, and I still can’t think of how this saying holds true in any general way.
They’re two completely different places. Apples and oranges.
What exactly about “life in Victoria” can be generalized as being continuously 10 years behind Vancouver?
Sorry for your monitor/keyboard, but if it is the 1st time you heard about the phrase, then you may not know what it meant 😉 . It has nothing to do with size/attractions/facilities/events, it just simply meant that we have (much) slower life pace/changes than Vancouver/mainland, similar as Gulf Islands to us.
You owe me a coffee and a new computer monitor/keyboard, which now have coffee splattered all over it.
That’s one of the most ridiculous things I’ve heard on this site, and there have been many doozies.
Or maybe I missed the memo about the Olympics that Victoria is getting ready to host this year, (exactly 10 years behind Vancouver’s hosting of winter Olympics), or even having a snowball’s chance in hell of Victoria doing so in the next 50 years.
It’s funny, by world standards core Vancouver itself isn’t even all that large nor impressive. Various international travellers I’ve known have been shocked to hear it’s one of Canada’s largest cities. Vancouver couldn’t even support a professional basketball team or a new modern stage theatre that went up and bankrupt there a couple decades ago. Meanwhile, twenty years later Victoria struggles mightily to support a minor league baseball team. 10 years behind indeed. 😉
Maybe I missed another memo too, about the NBA setting up shop in Victoria? And it’s only been 50+ years since Vancouver has a professional hockey team. Surely Victoria got an NHL team 40 years ago, and I never noticed.
But hey, when people mention Vancouver’s Grouse Mountain, or Capilano Suspension bridge, or Lion’s Gate Bridge, or Stanley Park, I always point out that Victoria more than makes up for those with “Craigdarroch Castle” — one of Victoria’s “top” tourist attractions. Actually I’m certain Craigdarroch Castle must set some kind of world record — in the numbers of disappointed visitors, who are expecting to visit what’s advertised as a “castle” just to find themselves paying entry for a big house with some tidbits of local history.
Wasn’t Victoria’s Chinatown the first one in Canada? It even had a big head start on Vancouver, and 100+ years later Victoria’s Chinatown is still about 1 block in size compared to Vancouver’s endless sprawl.
To be fair, when in downtown Victoria on a given evening, I have been often approached by friendly complete strangers.
Mind you, they are invariably either begging for money or asking me if I am looking to buy some drugs.
Panhandlers are to be expected in most cities . However, the number of times which I have been approached by downtown drug dealers curious if I am looking to “score” some drug or another, is simply jaw-dropping. First of all, they obviously have no fear of legal repercussions, which may indicate that law enforcement has lost control. Second of all, it’s not like I’m just standing on a street waiting around, nor anywhere near skid row — they stop me mid-stride as I’m making my way to a restaurant on government street, or a movie.
I have lived in various cities, and I have never experienced anything like that — nevermind repeatedly — anywhere but downtown Victoria.
80 years is a lon….g time. 😉
For us, the friendliness in Victoria/Saanich is not delusion, but very real. Felt the difference when I moved away to Ottawa (for work), felt the difference again when we stopped work and moved back.
That is what I keep telling relatives who (retired or not) want to move to a new city: to rent there first for a year, to see if you like the city and to find a good neighborhood (!=expensive neighborhood) if you want to stay.
We bought a house in Victoria 4 years prior to retirement because I lived here before and know the city’s and people.
Sorry that you happened to choose moving here in retirement by mistake, among all the choices you can have in the world.
Hearing anecdotal reports of more foreign buyer interest. Will be one to watch to see if some of these $2M+ sales are going to foreign buyers. Heck of a lot of PTT to pay though so I can’t imagine it would get to a significant level. Data up to May shows no uptick in foreign buying. (< 5 a month)
Sounds pretty good, until you realize that metro Vancouver had the same population as today’s metro Victoria about eighty years ago.
I’ve been here a long time, but that was definitely my impression when I first moved here too.
Paying the market rate isn’t really being ripped off. Maybe it’s cheaper in Calgary but unless you want to fly those trades in (which is exactly what the big projects are doing) it’s not relevant.
If you want to characterize overpriced, slow and incompetent as “Island Time” and charming go ahead, I just think of it as being ripped off.
Actually. Victoria has some of the most unfriendly people I have ever run into and that includes both LA and Toronto. Just to be clear overall I found Victoria to be a very unfriendly city. Feel free to disagree but it appears to be one more thing that people here are delusion about.
High transport costs should keep a lid on this and incentivize local production.
+1000
Building a modern home is substantially more complex than slapping together the 40/50s or 70s boxes we have so many of in Victoria. Complexity is up drastically and need for energy efficiency is not going away anytime soon.
Another issue that is not talked about that often are the costs associated with using a national building code and the step code. Victoria does not have the same housing requirements as a home in Ontario and as local municipalities and governments implement more rigorous environmental standards the cost of construction will continue to rise.
You forgot the “Lower”.
Reminds me of the films “A year in Provence” if anyone has seen those
That is more like it , and it is even slower on Gulf islands. Island life is like in another time and place (remember the old phrase: life in Victoria is about 10 years behind Vancouver, Salt Spring is 10 years behind Victoria 😉 ), even people are normally more friendly than on the mainland.
Reminds me of Italy, where the northern part of the country is substantially more productive than the southern part. Is it the warmer weather and different “culture”/attitudes?
Grain of salt when reading about random polls in mind…
The poll found that 21 per cent of people said that if they stopped receiving CERB, or any similar benefit, “they literally could lose the roof over their head.” British Columbians were most likely to be worried about CERB being gone at 27 per cent, with Ontario at 22 per cent, Alberta and Atlantic Canada at 19 per cent, and Manitoba, Saskatchewan and Quebec at 18 per cent.
https://www.trailtimes.ca/news/21-of-canadians-worried-about-losing-the-roof-over-their-heads-if-cerb-ends-poll/
Inflation back to positive 0.7%:
had talked to a few plumbing companies here on the island, they are not short of work regardless the covid19…. short of trade ppl so guess what, you simply cannot find trade people to put their labour in…..
I think you have it backwards. The lower productivity, etc. are the result of the high prices buyers are willing to pay and the resulting high demand for workers (the low availability of which has been noted on this forum). People tend to work harder when work is harder to find.
I’m not involved in construction, but I’ve found Victoria workers generally have lower productivity, produce lower quality work, and are more lax about safety. I don’t know if it is because of high demand for employees or because everyone is high all the time or if it’s simply “slow down, this ain’t the mainland”.
And yes I know anecdotes are not data, but I’ve shared my experience anyway. Perhaps that’s part of the reason houses are so expensive here.
Single family starts in Calgary are at their lowest level since at least 2000. Probably has something to do with it.
How can you explain this? If anything construction should be more productive here because it can work almost year round.
You meant just the house, excluding the land cost, right?
While our labour probably cost more (hopefully not too much more than in up-island or Vancouver area), but our roofs and windows probably last longer (thanks to the weather). So you win some and you lose some, c’est la vie. 😉
I’ve built homes in Calgary and Victoria. Victoria pays double for the EXACT same floorplan as Calgary. Land costs is one thing but labour on the island works slower and cost more than the Canadian average. Aside from the custom homes there are only about 20 different floorplans for townhouses and about 60 different floorplans for single family houses currently being. (same floorplan mirrored isn’t counted). This article was an interesting perspective.
Love that BC Gov can recommend glory holes, but can’t mandate masks.
Yeah, Dutch houses and their very steep stairs 😉 But things may have started changing a bit there, too. See this reno (done 2015) the architect convinced the local council that “the plans were better for the future of the neighbourhood.”
From the Calgary Herald, 1918:
In the Netherlands it is often considered “messy” to have houses that are different on a street. Most of these neighbourhoods will have strict bylaws on what kind of changes you can make to your house including the colour of the outside, since they are worried an outlier could reduce the value of all the houses in the neighborhood.
Most houses are row houses though so that is a different dynamic.
The real magic happens when the software is able to provide a compliance report to your municipality showing all the requirements are met. Then it performs all the engineering and sizes all the framing for best cost/performance (of course based on your seismic and wind loads). It then performs all the energy modelling and determines where to allocate insulation and which types of connections to be used. All this is electronically submitted to the municipalities new automated submission system and automatically approved/rejected.
There are already automated cut systems out there that can take plans and create marked up lumber packages (one package per wall/floor/roof panel). This package is then assembled quickly and easily by an experienced group of people in a controlled environment.
The real magic happens when it’s a group of very well programmed robots
“The other issue with ‘prefab’ and single-family buildings is there is a huge amount of variability in lot sizes, ”
I think they’re not necessarily one-size-fits-all prefabs.
You are able to customize your order using software, as per the realities of your lot and preferences. Think of it as being given a Lego set to work with, but customizing what you’re going to build given your Lego base and personal choices.
You put in the order, and somewhere in a nice, DRY warehouse a group of very experienced workers get the particular dimensions/details for the “building blocks” you ordered off their menu.
Did I mention those guys are experienced? They build these same set “blocks” day in, day out, it stands to reason they get very good at it…
Thank you!
Sure, when they were likely built by the same builder at the same time then. But do you want a house identical to your neighbour’s if you do a infill/rebuild or subdivision on a lot with unique geological features? I do like prefab houses for their modernism and airiness (like those shown in Magazines), but I’d rather not live in a street with 20 identical prefab houses. 😉
A few years ago, friends of mine were in an older condo that had to be remediated. The general contractors were a big outfit from Vancouver. (Can’t remember their company name but would know it if I heard it). Most of the company trades people came over from Vancouver as well and the majority were single carpenters, electricians etc. I know some of them were living in their campers. It seems Gordons Idea is a good one at least as a short term solution.
Plenty of nearly identical homes right now in Victoria.
The other issue with ‘prefab’ and single-family buildings is there is a huge amount of variability in lot sizes, orientation (including desired solar orientation), views, etc. I can see ‘prefab-at-scale’ as part of a new sub-division, but it’s not going to be a great fit for SFH replacement in established neighbourhoods.
https://househuntvictoria.ca/2020/07/20/the-way-we-build-houses-is-insane/#comment-72127
I wonder how many of those landing in Vancouver then traveled via ferry to Victoria? Do they even keep records of travellers on the Ferries?
Single family buildings, however, are not going to be using mass timber / CLTs (until prices come way down). Prefab for single family typically refers to panellized stick-frame construction. This is an example: https://www.ecocor.us/rethink-building
There is a lot more planning that goes into a panellized build than a typical site-built structure. A full 3d virtual build let’s you work out all the kinks prior to breaking ground, and normally makes the building portion way easier for all (framers, plumbers, electrical etc). It also enables energy modelling, finding and dealing with thermal bridging and tricky details. You also get a full cut list for the framing lumber (and can even send that to a truss manufacturer to get a ‘framing package’ with all the connection details laser etched on the wood). In the end you’re getting a way better product (imho) than what is often improvised on-site.
Having said all that, I always found prefab to not be economical for one-off single family builds.
Maybe true 30+ years ago, but houses are getting more and more complicated and that won’t stop as we require increased energy efficiency.
Yes this is a good point. But only works for new construction. Why not have the same efficiencies for in-fill and replacement? Most of the houses in Victoria are the original houses. Eventually they will nearly all need to be rebuilt. Hopefully at higher densities, but even if not hope they’re not going to all be $800k custom jobs.
And there’s your reason why: “Johnston’s firm has won awards for traditionally built custom homes and has recently designed and completed its first custom prefab home.”
No one is doing prefab at scale right now so we haven’t seen the cost savings. But there are some really big players starting to pour serious money into this problem.
Panellized construction with mass timber will most likely take over the MURB, commercial, large building space. From what I’ve read, it’s pretty much at price parity with steel and concrete now, and prices should come down as it becomes more mainstream. You’re not going to beat factory-built and cut (with precision cnc machines) panels with on-site construction. Factor in framing speed, better thermal envelope, better earthquake performance, better carbon footprint etc. Plus, the raw materials and factories are in our back yard.
You could probably charter cruise ships super cheap right now.
You would still have to buy those cruise ships and retrofit them and then re-sell them.
Gordon: Bring a couple of old cruise ships and dock them downtown for the construction workers.
Last year I was approach by MBA students from UVIC that were given an assignment to determine a way to provide housing for construction workers relocating to Victoria. We had a couple of discussion but the assignment was eventually dropped.
What I suggested to the students, at that time, was not to build homes for the workers. No single family, no condos, no town houses. They take too long to build and cost too much.
Instead, I suggested partnering up with the Native bands or private land owners to build RV parks. Flatten and pave a couple of acres and put in the underground services for the utilities that could be hooked up to recreation vehicles. The workers lease the pads and buy their own vehicles. The workers are free to pick up and move to new jobs in other provinces and take their vehicles with them or sell them. When construction eventually slows then the Native bands/ private land owners can use the site for over night campers or reclaim the land for another use such as a manufactured home parks.
In this way bringing in hundreds of workers and their families would not create more demand for purpose built housing thereby driving prices higher and not worsen the vacancy rate causing rents to escalate. It would also reduce the severity of any boom bust cycle of housing due to future unemployment in the construction trades.
Last week a similar discussion came up but this time I also suggested that a marina could be built for floating homes. Floating homes that are being built in Vancouver today and can be barged to Victoria. This is not as viable as the RV parks as float homes are not that easy to move as you need a place to move them to. You can’t just park them in your driveway like an RV while you’re trying to find a park. They are also very costly to build. And lastly few lenders will lend on them as they are not real estate which makes conventional mortgage financing not possible.
So there may be solutions that could lessen the demand for purpose built housing that takes time to build and a lot of money. The down size is always money. This is not as lucrative for local contractors or the city. As RV’s and pre-fabricated homes are great for the cities that build them creating jobs and taxes but not as much for the cities that allow them.
I’m in my thirties. I haven’t worn a mask a single time since COVID began, but I’ve decided to start wearing one when I grocery shop and go into buildings.
Airlines contact passengers on the manifests all the time regarding flight changes. That definitely sounds like a problem that could be overcome with some procedural changes.
As it stands, the BCCDC doesn’t even inform the airport if there has been a case: https://www.cheknews.ca/victoria-airport-says-health-officials-never-told-them-about-plane-that-had-covid-19-on-board-684631/
Quote from https://beta.ctvnews.ca/local/vancouver-island/2020/7/18/1_5029978.html
Yeah it’s buried on the site. So many people would not know to look for that information. Unbelievably it’s also the same for international flights.
I don’t get it – we’re ignoring low hanging fruit. Almost seems like willful ignorance. Why are we doing contact tracing for restaurants but not domestic and international flights?
Recent Globe article on the subject here: https://www.theglobeandmail.com/opinion/editorials/article-why-nobody-told-you-about-that-covid-19-case-on-your-flight-and-why/
“It’s not about spending billions to bail out an industry. It’s about spending millions on the tools to allow an industry to safely reopen, and stay open.”
Leo –
In our recent building experience, the “problem” is high labour costs. As soon as a component involves someone coming to do one-off work, it’s bloody expensive. So there’s some truth to what you say – if pre-fab became more popular, house components could be built in factories in manufacturing centres and make use of modern assembly-line and automation efficiencies. It might be a while before provinces and municipalities saw this as a good thing, however, since what’s good for individuals looking for housing isn’t necessarily good for munis looking for revenue and appeasing existing voters. “Yay for a proliferation of cheap housing built in factories in Surrey or Windsor, ON!” sounds medium rare at best; and once we are flooded with knock-offs built in China the mood would turn decidedly sour on this. Just like other industries (say, power tools, appliances, computers?), we would have traded local jobs and materials (forest products) for foreign imports of both. Like other posters have noted – it isn’t that complicated to build a house meeting certain standards of safety and liveability, not like a car or an airplane. One of the few bittersweet wins in our heavily over-budget recent build was how many local people we were employing…
It’s not that easy to find, but here’s the page with the flights into BC with CoVid exposure.
http://www.bccdc.ca/health-info/diseases-conditions/covid-19/public-exposures
(You can find it via bccdc.ca and then click on “for the public” and then scroll down that page to “public exposures” and click on that.
The only one so far into Victoria was July 13 AC Vancouver to Victoria …
http://www.bccdc.ca/Health-Info-Site/PublishingImages/health-info/diseases-conditions/covid-19/public-exposures/2020-07-20-Domestic%20Flights.jpg
LeoM, I think you are mistaken. I thought downtown was dead with empty parking at all the parkades.
The contact tracing app can’t come soon enough. Will be interesting to see what the uptake is.
Can anyone shed any light on why the BCCDC would choose not to trace and contact passengers on flights that had confirmed cases of Covid on board?
“Effective March 27th, B.C. no longer directly contacts passengers from domestic flights who were seated near a confirmed case during the flight. Instead, that information is posted online (see below).”
http://www.bccdc.ca/health-info/diseases-conditions/covid-19/public-exposures
Go for a walk around downtown on a Friday or Saturday evening to view firsthand how young people and restaurant staff are flouting the COVID rules. It’s the same or worse in Vancouver, actually Vancouver is much worse. After your walkabout you’ll have a keen understanding of Dr Henry’s comments yesterday.
“Henry says the recent trend is driven by young people in their 20s and 30s.
“We do have the possibility of having explosive growth here in our outbreak, if we’re not careful,” Henry said.”
Young people might have greater natural immunity but their parents, grandparents, and older Co-workers won’t have the same COVID resistance when the young folks bring home COVID.
Real estate will likely be severely affected for the next year when this second wave rolls through the population, the spring outbreak was probably just the warmup to what’s coming next.
Actually, my numbers are wrong and it is interior health. The spread sheet site I was using got it wrong. ^ appears to be the correct number and 45 was interior. Lets hope the numbers stay down.
Barrister, are you sure 280 is Island region Monday number? I see (on BC CDC site) Island health Monday number is 142, 6 cases higher than Friday’s (136). 280 is Interior region Monday number (mostly due to outbreak by 20 to 30 years old party goers in Kelowna area).
LeoM: You have it absolutely right as to the increased spread of Covid. Just to add to our concerns, on Friday the total number of Covid cases in Island health was 235 total for the year. By Monday the number leaped up to 280 or an extra 45 cases in just three days. Really give those numbers some thought.
Changes in house prices are almost entirely in the land value. Both going up and going down. And the more people can borrow, the more they are able to pay for that land value. We all know that if interest rates returned to where they were in 2005 prices would crash.
The cost of housing in Canada has increased dramatically in recent years… price of single-detached dwellings more than doubled from January 2005 to the end of 2016. — https://www.cdhowe.org/sites/default/files/attachments/research_papers/mixed/Friday%20Commentary_513.pdf
https://www.vanmag.com/should-we-be-living-in-prefab-homes — Are Prefabricated Homes a Good Fit for Vancouver?
If pre-fab or container homes were really the answer, wouldn’t we see more of them? I just can’t think of a single problem these solutions are solving.
The car analogy isn’t very useful imo. Cars are engineered to exacting specs because they’re fast death machines- 2500 lbs of steel, hauling our precious meat-bags at 120 km/h+. We should continue to engineer the hell out of cars.
But a house is not a car. Building a house isn’t rocket science, though I suppose there’s no limit to how complicated you can make it if you try.
Humans have been building adequate shelter for thousands of years. In my younger days I was a framing carpenter for a while, and I have to say… there isn’t much to building a house. It’s really much more simple than most people understand.
I don’t mean to diminish the importance of building science and ensuring we’re making good built spaces — these are all really important things. But I haven’t seen a compelling case for prefab or shipping container homes in reality, ever. On paper, sure – we can find efficiencies through scale. But you get similar efficiencies from the same framing crew building the same 3 house styles in a subdivision.
I’ve looked into shipping containers for various projects- cool idea, but nothing about it is easier than building with lumber. Do you want interior walls? cool, you’re gonna have to frame it up inside – just like a stick built house. Do you like insulation? fork out for the spray-foam applicators to come on site. Want a window or door? Angle grinders and welding equipment. Containers have serious condensation and damp-trapping problems due to thermal bridging and lack of ventilation. Serious issues with complex solutions to manage.
From my (admittedly brief) research it appears to be quite a bit more complicated creating a living space in a shipping container than just framing it conventionally with wood. But it does look cool…
By safely, I think what she meant is hospital capacity to handle it. The difference of 35/day in March and in July is that we had more idea now about our hospital load, and infected people now are younger so there is less hospital stay and less death now than in March.
Of course it is not good to have higher infected numbers, and I would think more measures will need to be forced once we have 50 to 70 or higher cases/day. Let’s hope we don’t need to face these numbers.
Inventory VS historical range. Quite a difference.
I only talk about poo with my grandson and we have fascinating conversations!
Good! I was afraid we’d have to talk about poo again.
One more important difference, the home in the core is very likely to be a one-off, so all the design costs are carried by one home instead of having just a couple designs with modifications reproduced many times in a new subdivision.
Some of it will. With pre-approved homes the engineering is done once, the construction is to tight tolerances in the factory, and chance of rework is much less.
I would agree on the single case, and in the past modular homes have often been essentially custom even if some of the wall assemblies were standard so there were no cost savings. But I don’t agree that it will cost the same at some reasonable scale. In the past houses were simple so it made sense to assemble them on site. But as you say the code has been getting rapidly more stringent, and with the step code ramping up it will bring on more and more required engineering time and more construction time that will continue to drive up costs. With standard designs you can amortise those costs over more units. I take your point that this is happening already in large new developments, but I’m thinking on a larger scale.
There is another benefit. More speed with less manpower required. We are tapped out on trades and that doesn’t look to be getting better. Even at 11% unemployment GCs are finding it just as hard if not harder to get the manpower they need. Speed the construction and move it off site and you reduce both carrying costs and reduce risk by reducing the install team. I was chatting with the framing crew at the Hockley Corners project and they were raving about how they got from foundation to roof in 9 weeks with half of the crew they would normally need (hybrid mass timber). Same goes for modular single family. Heck it may even make approval easier if the neighbours know the active construction will only take a fraction of the time. No one wants to live next to a construction site for a year.
Thanks for weighing in!
True. Mask mandate is likely inevitable. If we can’t keep cases down in the summer when everyone is mostly outside we have no hope in the winter without substantial changes.
Mid-March 2020 British Columbia ‘shuts-down’ when daily average of COVID cases passes 35 per day
Mid-May 2020 British Columbia “opens up’ when daily average of COVID cases is less than 10
May 19th “”I want to reassure you that we would not be easing these restrictions if we did not feel we could do so safely” said Dr Henry.
“We will do it safely, slow and together.”
July 20th, 2020 daily average over past weekend is 34 per day.
Exponential growth is so easy to predict with something like COVID that us rank amateurs on this blog predicted, in mid-May, that this would happen when mid-July arrived.
The government’s response is like poker, or rather more like Russian Roulette. We learned from the March shutdown and the May ‘opening up’ how to control the spread of COVID. Now the big question for the government is “what’s more important, the economy and people’s livelihood or the lives of 3% of the population”?
Really tough decisions ahead for the provincial politicians.
Leo S, I usually agree with most of what you say but this time I am very much not in agreement. To sum up as you have with “If we want to have affordable housing in attractive cities, it has to be” referencing modular, container homes, etc. doesn’t add up. I’ll just use the term modular but I mean any alternate form of housing.
The difference between the cost of a new home in Westhills and a new home in Victoria is the land, the size of the home (and the lot), and the finishing. None of these factors will be dramatically affected by modular buildings. If you make a large modular building (or many of them to benefit from mass production) with superior finishing and place it on the nice lot in Victoria it will cost the same as the stick built home. And the value will go up and down with the market in the same way. Houses built in Westhills (and other similar areas like Eaglehurst in North Saanich, etc.) are pretty much already modular. The costs, as Marko rightly argues, are rooted in the subdivisions (servicing and amenity fees), provincial requirements (HPO, warranty, etc.), municipal requirements (solar ready, electric car ready, energy requirements – just wait until the energy step code really gets going), etc. All of these will apply to alternate forms of housing unless you build simpler homes on much smaller lots and/or further from the city (kinda like exactly what is happening already).
There is a benefit to modular homes and that is the ability to turn out a standardized product in all weather. But here in Victoria that isn’t as big a deal as it is elsewhere in the country.
For context I do still work in the construction business and have for 45 years now, many of those as an inspector.
These guys have government accounting for 1/5th of the cost of building a home in the GTA. https://www.ratesupermarket.ca/blog/government-fees-increase-home-purchase-price/
Is there any local numbers on BC and Greater Victoria? Could we want to make bets on it being even higher here?
Yes, but a few days later, a newly infected party attendee may be ahead of you in line at the grocery store, and he should be mandated to wear a mask so he doesn’t spread his party-acquired-CoVid to you!
These cases are coming from private parties. It’s not like anyone is wearing a mask there no matter what the policy is.
Yes, osb.
Just curious, what do you use now instead of plywood, particle board or MDF? Maybe worse materials need more regulations? 😉
I put in FOI requests to BC Housing to prove that the owner builder exam is a total scam. I still get 10 emails +/- per week about the exam and the stories are comical/sad at what people are going through with BC Housing.
Btw the exam is SO important during covid they made it open book online -> https://www.youtube.com/watch?v=oyliAtG8-iE
One minute people have to drive 5 hours to a testing center to write a 100 MC exam closed book and the next minute it is open book online and you get 5 days to do it………….hmmmm.
Problem is there are sooooo many scams like this it isn’t even funny. We just sold a entry level home in Colwood for $749,900+GST. Colwood required me to hire a landscape designer and some other non-sense for their “form and character development permit” under some new bylaw. Total cost was over $5,000 (DP – $2,700, landscaper designer, etc.). We soldthe house, owner moves in changes the landscaping/fencing/etc….City of Colwood can’t do crap. Might as well have thrown $5,000 in a flame thrower.
People are really good complaining on Facebook about affordable housing but no one really understands root problems and why it is so insanely expensive to build. The 13 years I’ve been working with my father it has literally got worse and worse every year. We started off building houses with maybe 5 documents and now it is up to 25 to 30 and the houses are pretty much the same. Actually we built better back then as we used plywood, etc.
Honestly, she should.
Right, also six cases on the island in last three days is not good. In today’s presentation, Dr. Henry mentioned the uptick is mainly in young people in their twenties/thirties. That sounds similar to what’s happening elsewhere, and not a good sign, since they are efficient spreaders (lots of contacts) and hard to contact trace as they spread it to others (e.g, their parents).
They asked her again about mandatory masks, and got a big long answer that summed up to ….no.
She’ll get the same “mask” question every day if the numbers continue to increase.
Just a bit 🙂
Wrote about it several years back. https://househuntvictoria.ca/2017/02/23/the-owner-builder-exam/
There’s a facebook group: https://www.facebook.com/groups/bcownerbuilder
You bring up a good point though. If you order one of these pre-fab units that just gets plunked down on your foundation, do you still have to write the owner builder exam? As laughable as the exam is for normal construction, it would be completely insane for anything pre-fab. I’ll ask about this.
LeoS: I agree that 34 cases a day is not great but some increase was expected as we open up. If we trend up to a hundred a day three weeks from now it really would be time to worry.
102 new cases in 3 days. Not a good trend we’re on recently, but no new deaths is something.
Teranet is out – prices are up 0.8% which puts us a new peak after being down 0.5% last month:
https://housepriceindex.ca/2020/07/june2020/
In June the Teranet–National Bank National Composite House Price IndexTM was up 0.7% from the month before, a rise half the average for June over the previous 10 years and the lowest June advance in 17 years. And if the index were corrected for seasonal pressures (seasonal adjustment), it would show a slight decline of 0.1% in June, a first retreat in 11 months.
The index was led upward by Halifax (2.7%), Winnipeg (1.8%), Hamilton (1.7%), Ottawa-Gatineau (1.5%), Montreal (1.4%), Toronto (0.8%) and Victoria (0.8%). Trailing the countrywide average advance were Quebec City (0.5%) and Vancouver (0.2%). Prices were down on the month in Calgary (−0.1%) and Edmonton (−0.7%).
Other signs confirm the slowing of the market. First, in the wake of actions to stem the spread of Covid-19, the number of repeat sales entering into the index[1] was down 24% from June 2019, a second straight large drop from a year earlier. This drop is the reflection in the public land registries of the slowing of unit sales that began in the second half of March and extended into May. Second, after correction for seasonal fluctuation (seasonal adjustment), the raw composite index[2] for June was down 1.1% on the month and the raw indexes for six of the 11 markets of the national composite index were flat or down from the previous month.
Has anyone looked at the onerous owner-builder program? When I looked into going the owner-builder route, it seemed that the new improved system they brought in was mostly focused forcing people considering the owner-builder route back to general contractors. When I contacted the office for clarifications on some of the policies and procedures, the people that responded almost seemed offended that I was asking questions. The big initial stop with the program is that you can’t take the owner-builder course unless you have a property to attach the owner-builder designation against. Since the owner-builder course information and requirements is so closely protected, it is nearly impossible to forecast the comparison between it and the contractor route. That really impacts the determination of what property to buy before starting a project (It would be insane to purchase a property before taking the course). Not to mention, that most municipalities still treat permits and inspections in the the owner-builder program no different if it was just an owner pulled permit and still requires full inspections unlike the contractor route. Unfortunately, with the manufactured options, it will still be tied to either the contractor or owner-builder builder routes that will likely fail to put downward pressure on cost and loss of any possible efficiencies to be gained. If there was any program and policy that seemed overly impacted by an industry lobby looking to limit options and keep competition it was the owner-builder program. I guess it worked for industry, it has kept the owner-builder numbers low for years along with minimal uptake on the garden suite option in Victoria.
Hi Josh, we used Alan O’Rourke for a bathroom reno. Very professional. Weekly status and budget updates. Limited disruption to our lives. http://alanorourke.com/ Probably not the least expensive out there, but you get what you pay for. We will be using them for our attic reno when we get around to it.
Saw a black Lamborghini (Murcielago, I’m going to say) pulled over by the RCMP this afternoon on the Pat Bay near Sidney. Do those things have good air conditioning?
Lots of great speakers at this free event. Somewhat Toronto focused, but most are speaking about national-level topics relevant to housing.
https://www.movesmartly.com/summit
I’ll ask again – anyone got a general contractor they recommend?
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