Maximum hotness
If there’s one good bit of news for house hunters in the February statistics, it’s that the market didn’t get much hotter than it already was in January. The 863 sales are up 53% from the 563 sales last February, while new listings are roughly unchanged from a year ago and inventory is down 38%. Sales have more or less been topped out at an average of 21 per day all of February which means that the percentage change from the previous year has been steadily declining throughout the month, down from 60% at the start of the month to around 40% now. The seasonally adjusted sales to new listings ratio is at 90%, unchanged from January.
Does that mean market activity is topping out? Not impossible since these overheated markets usually don’t last that long, but more likely sales are simply being constrained due to lack of inventory. The biggest drop in seasonally adjusted sales in February came from detached properties, which are the most inventory constrained. There would certainly be more sales if there was more selection.
Before we could call a reversal in trend, we would need to see sales drop a lot more and inventory increase. So far that is not the case, with inventory actually down a bit from January in a time when it usually increases. That means on a seasonally adjusted basis, inventory continued to drop further in February.
Months of inventory for the entire market at 1.3 remains in extreme sellers market territory indicating a continued strong upward pressure on prices in all market segments.
And that’s what is happening out there, with the median sales to assessed value ratio rising further, to an astonishing 26% over the assessed value for single family homes, while the median townhouse went for 16% over, and condos at 10% over the valuation from July 2020.
My take
The market remains incredibly hot no matter what segment you’re looking at. Luxury sales are up nearly 5 times year to date from last year. An astonishing 62 properties over $2M have sold this year vs only 12 in January/February 2020. Bumping the price threshold to $3M, we get a 4.2 times increase in the sales rate so it’s not just that high end places have crossed the $2M threshold. The shift of preferences towards detached properties continues to be reflected in the market as shown by the sales to assessed value chart above. However all segments are hot and as I’ve said before, expect condo price increases with these market conditions. I believe that detached prices are facing increasing pressure from strained affordability and don’t have that much more room to run. If they do run further it puts us into dangerous territory from an affordability standpoint and exposes us to a price correction. However the gap between single family and condos has grown by around $100,000 in the past year, condo affordability is not as strained, and I expect condos have more latitude for increases on a percentage basis than single family from here on out.
The impact of dropping interest rates has been an incredible driver of this market. Perhaps I shouldn’t have been surprised that a 20% drop in mortgage payments led to a 20% gain in prices, but it shows us how important mortgage financing is to buyers. However this past week the bond market has delivered a shot across the bow, jumping some 0.5% suddenly and causing banks to raise fixed rates. Variable rates remain low so it’s no immediate risk to borrowers, but it shows that the Bank of Canada’s promise to keep rates low for a couple more years may be more difficult to keep than they thought. Although they can influence it with bond buying, the bond market is not within their control and may get away from them if bond traders decide the pandemic doldrums are over and government spending is making them nervous.
I don’t personally expect any kind of rapid increase in mortgage rates. The economy is so juiced up with cheap credit that a substantial increase will quickly lead to an economic slowdown which will put the brakes on rates again. However even a partial reversal of the pandemic rate drop (which unleashed this mania) should have significant effects. What I don’t think is fully appreciated is that we’re at the end of a 40 year trend of dropping rates, and most investors have never seen a world where rates weren’t constantly dropping. At best we’re now in a world of flat rates, and quite likely we’ll see a gradual move upward from current levels. It means that for the first time in decades a major driver of prices is at an end (unless rates go negative). How will it impact future prices? No one knows for sure because it basically hasn’t happened in a modern market but I expect large impacts on long term real estate trends.
Give how hot the market is, what would anyone suggest for a home buyer… Is there any reasonable chance prices will decline from current levels this year? If inventory increases in the spring, what will this do to detached house prices?
New post: https://househuntvictoria.ca/2021/03/08/not-just-a-victoria-problem-and-other-tidbits
I’m not coming down on any particular immigration target as correct, but isn’t it embarrassing that a huge country can’t handle a few immigrants coming in without (according to you) their health care, economy, and housing systems collapsing?
Seeing how BC can’t even build enough campsites to meet demand despite endless wilderness to build them in doesn’t inspire confidence that they will ever build enough housing.
NFTs are ridiculous. The prime example here is Twitter founder Jack Dorsey selling a “one-of-a-kind autographed copy” of the first public tweet https://v.cent.co/tweet/20 – current bid is $2.5MM USD.
This just underscores the need for a wealth-based tax. Warren’s 2% on anything over $50MM of wealth is very reasonable. You can live a lavish life on a $50MM nest egg, and the asymptotic top of the wealth curve means that you affect a relatively small number of people with it. People don’t sit on 9,10,11 figure net worths without tax money being spent on society as a whole (infrastructure, healthcare, subsidies, etc etc). It’s time they pay back into it again instead of just extracting and hoarding.
“Plenty of room in Canada for new immigrants “. What a strange comment. Our health care system is overwhelmed, our country is massively in debt, housing storages in most major cities, especially anything a new immigrant can afford, and increasing food prices. Immigration is needed but not at the levels our government is proposing.
I am going in on some small cap dual listed energy stocks, hoping to get a lil pump from the WSB crowd once they catch up to what is going on.
No worries. I agree that oil going make a jump because of last week events.
WTI and Brent oil up over 2% in the Asian market as of this moment.
Yemen’s Houthis attacked Saudi oil terminal.
US senates okay $1.9 trillion stimulus package on Saturday.
OPEC+ announced that they are staying firm with the oil cut on Friday.
Canada Natural Resources and Suncor is shutting down some oil facilities worth 500,000 barrels a day for 30 days maintenance in April.
Goldman Sach is bullish on oil claiming $75 by third quarter of this year.
RBC saying that $100 oil is a strong possibility in the near term.
I agree, we may not get to that extend, and I believe that there is time to turn the ship around before it is too late.
Canada does not have oil that can be pumped out of the ground at a cost of $3 per barrel, so there is no way we could afford what Saudi Arabia does.
QT, I take back my previous comments about oil stocks being priced in already. I think they are going to go on a rip in the next few weeks.
At some point in time in the near future Canada will be the lazy welfare state like Saudi Arabia, because the majority f of the Saudi population are working in useless public administrative sector and the other half are on welfare. Just like the Saudi, no Canadian in their right mind would get a degree in engineering, medicine, or a trade cert.
https://www.seattletimes.com/business/half-the-saudi-population-receiving-welfare-in-new-system/
Half of the Saudi population are on welfare and in the mean time they have a shortage of hundred of thousands skilled talent.
https://www.arabnews.com/node/1332926/saudi-arabia
https://epod.cid.harvard.edu/sites/default/files/2019-08/EPD_Report_Digital.pdf
You make a good point. It’s report after report about housing. Who is going to build it thought? Assuming they can get rezoning done in under 5 to 10 years.
Government just getting more and more bloated. Why risk falling off a house installing trusses when you can sit at meaningless desk job at BC Housing administering the meaninglessness owner builder exam making the same salary. It’s on a no-brainer I am taking the BC Housing job any day.
Because you have the craziest of them all, Elon Musk at the helm. He is pushing Bitcoin and Dogecoin that was created as a joke by IBM engineer Billy Markus, and Adobe engineer Jackson Palmer.
https://en.wikipedia.org/wiki/Dogecoin
https://www.forbes.com/sites/billybambrough/2021/02/14/doge-is-underestimated-elon-musks-fav-bitcoin-rival-dogecoin-is-getting-a-surprise-upgrade/?sh=12e9422d6580
If it weren’t for young and productive people that live in the Western communities (median 38 years old) Oak Bay (median 53 years old) would be a heck of a lot more expensive to live.
Yeah the amounts being paid for these NFTs is crazy!
Interesting, I hadn’t thought of it that way.
I don’t think giving the government more money will work, because what we need is man power over that of money. Since, there is a shortage of man power everything costs more.
Just when you think the crypto world can’t get any dumber you get NFTs. With the world awash in capital it’s just one Ponzi scheme after another.
I wonder if shifting our taxes more to wealth would help since many retirees have reduced incomes but higher wealth. We could add inheritance taxes as well as capital gains taxes on housing. Policies keep increasing wealth in housing but those gains are not being taxed. We are also being told that automation will reduce the number of workers needed which will further reduce the tax base from income. More environmental taxes could also play a role.
If the buyer is moving from out of town, that keeps a local from buying, which means one less rental compared to renters. If the landlord didn’t sell, it would also mean one less rental compared to renters, since the new arrival would either outbid a local to buy another property, or rent another property.
https://househuntvictoria.ca/2021/03/01/maximum-hotness/#comment-76921
I’m talking about the city of Portland. I know that the whole place is not bad. But I would hate to see that level of protest here in Victoria. No simple answers.
It is like the camping bylaw. When concerned citizens phoned about tenants being within 4 meters of their property line there is literally nothing done about it. Okay, fair enough, but why spend time/resources writing up the bylaws then.
By “Portland”, are you referring to PHS and their buildings in Victoria? Or the City of Portland? If PHS, I’m genuinely curious to hear your opinion about their operation.
Could have been from many places. Not necessarily the local rental market.
Yeah plenty of room in Canada for immigrants (I am myself one). Problem is right now immigration is in the control of the feds, but housing is basically in the control of thousands of municipalities across the country, and they are all failing miserably at accommodating any kind of growth.
Yeah seems to be not much bylaw enforcement going on. All short term rentals are supposed to be licensed and display their license number in any ad since 2 years ago. As far as I can tell not a single one is, and emailing the short term rental licensing department for the story I wrote in the Capital got no response.
Why even bother making bylaws if there’s no enforcement?
The graph below shows the largest cohort of immigrants that come to Canada are within the working age of 20 to 39 years old.
https://www.statista.com/statistics/443305/international-migrants-in-canada-2014/
Always a buyer at some price, aka market price.
Where did that new owner-occupier come from?
The logic is that people don’t automatically die at the age of 65 when retire, and need more resources/supports in retirement than during their productive age of 25-65. Hence the need to import workers to support the large ageing population that are living much longer than the past.
IMHO, Canada will need to accelerate immigration in the next 10 years or delay retirement age to at least 70 year old, other wise we will not be able to continue our present social and economic lifestyle.
https://www.canada.ca/en/employment-social-development/programs/seniors-action-report.html
Basically the cov is going to be acting as the RTB for renovations/renovictions. say you have to re pipe/wire an old 70’s apt building that is full of high risk asbestos, you will basically be paying to house the tenants until the reno is done, paying moving costs, having them come back at the same rent or you can apply to the rtb for an increase (good luck on that.
They will also be tying it to this, so watch out slumlords.
https://www.victoria.ca/assets/Departments/Planning~Development/Community~Planning/Housing~Strategy/RPSOM%20Bylaw%20Draft%20(1).pdf
How they are going to managing this is beyond me! it took us 1.5 months to get bylaw to address ripped open garbage bags every week, next door to one of our rental properties, this was after calling multiple times, sending multiple pictures of garbage blowing down the street.
So far they talked to the tenant and told us to send more pictures if it keeps happening.
We have to tread lightly and carefully, with this generation of street people. Look at Portland. I am sure that a few of nastiest are lording over the true mentally ill or economic homeless.
I have anecdotally commented about the aggressiveness and violence I have been seeing living in the Harris Green area. Living down here the last decade I have watched the situation degrade on an annual basis and unfortunately, I have little faith that it will improve because I don’t see the city of Victoria ever changing the types they elect to municipal government (activists and zealots focused on ideology instead of pragmatism). A part of finding a SFD is to have safe place to raise and maybe not be on the constant lookout for sharps where my toddler is playing.
From: https://www.cheknews.ca/victoria-polices-union-concerned-about-escalating-violence-in-city-750330/?amp
When I read it, …. yeah, duh…where have you been? because you are not enforcing anything when it’s happening right in front of you. But when someone is swinging a pipe outside the police station, it is now a concern?
Can you elaborate?
Eh? Sure they can take them away, they can simply sell them. Rental supply reduced by one, resale supply increased by one. The renter that was there previously is still there looking for a rental, it’s not like they bought the place when it was converted.
Immigrants rent at first for the most part. The impact of that drop on the housing market is yet to come. I’d say in 1-2 years when the immigrants that would normally be buying are reduced.
Just some Sunday musings about the magnitude of changes which can occur in one lifetime:
We bought our first home at the absolute peak of the early 80’s boom in Calgary but even at that towering peak the purchase price was less than twice our (modest) annual income. We were 24 years old. The house was 700 square feet. We took a personal loan for the downpayment so had no skin in the game whatsoever. The mortgage interest rate was 12 %. Within 24 months of our purchase the value of the home had declined 30%.
You could select any phrase in there and be accused of the wildest hyperbole but it’s all fact.
The market value of luxury property is extremely hard to ascertain. Because the properties are so unique, sales prices can be plus or minus a couple million depending on whether the property finds that one buyer that really wants it.
Example:
9760 West Saanich
Sold 2006 for $6M
Sold 2021 for $6.087M
The overall market has doubled since that time.
Of course there are also examples the other way, where luxury has outperformed because the variability of an individual property is so large relative to market movements.
All this non-sense has negative consequences elected officials aren’t smart enough to figure out. I once asked a client why she was putting in a small shower into a super nice suite and her reply was “with the tenancy laws the way they are I just don’t want to rent to a family.” Can’t shower a kid.
Plenty of other things I’ve seen people do to adapt.
Then you have to fill that space up with consumer clutter. It is shocking how many places I show that have in excess of three TVs. What do you need three TVs for.
Then we talk about how we are concerned about the environment as we drive from are non-walkable neighborhood into town because we needed more space to clutter up. Makes sense.
No one is going to be buying or renovating any of Victoria’s older rental stock, depending on what comes out of the “rental licensing bylaw” they are working on now.
Have a read through the minutes
https://www.victoria.ca/EN/main/city/other-boards-committees/renters-advisory-committee.html
The fact is we have more dwelling space per capita than ever, and historically low average household size. It’s really an inequality problem, not a housing shortage.
With regard to immigration, we had the biggest drop in immigration in decades in the last year. How come prices went up so much then?
They can’t pick up the properties and take them away. If you’re talking about rental SFH or condos becoming owner-occupied, that means one fewer renter for one fewer rental.
It should also be pointed out that higher property taxes would result in lower property prices, adjusting for each other for new landlords.
From the sounds of it, there is a housing shortage across North America, yet the government still insists on bringing in more people from other over-crowded countries. I don’t understand the logic.
Directly no, but indirectly increasing costs can make rentals uneconomic, motivating landlords to sell and thus reducing rental supply, driving up prices. That’s a slow feedback loop though, and another case for purpose built rental that is more stable
We’ve had rent control in BC for decades. Not a bad hing, but it certainly doesn’t reduce rents, it just reduces the possibility of rent shocks for existing tenants
You would apply such an incentive to new construction only not existing stock to encourage density (mucipalities would have to be on board). It could be similar to the program that is already in place where there is no PTT payable on new builds under 750k in BC.
It may lead to lower supply of rentals, because there is less of an incentive for landlords to build new supply if the return on investment is low.
Only politicians can push such propaganda with a straight face. Just like the GST and carbon tax would leave more money in your pocket.
I was kidding when I said that. Personally, I don’t think the government should get involve in private housing, because there would be more inefficient bureaucracies layers that the tax payers have to bear. And, what would stop condos homeowner not to upgrade to SFH after they purchased an incentive condo?
Landlords are already charging as much rent as they can get, aren’t they? The rental market doesn’t care about landlord expenses. A landlord with no mortgage is going to get the same rent as one who is cash flow negative, for the same property.
I do think we should have higher property taxes and lower income taxes. However I don’t see the Feds getting into direct property taxation, they don’t want to get into a fight with both the provinces and property owners over one issue. Broadening capital gains taxation, on the other hand, would put money in provincial as well as federal treasuries.
More efficient use of property? How about 1114 Rockland: damaged beyond repair in a fire 8 years ago and currently in rezoning limbo. Things have gone past inefficient and are now entirely broken.
Increasing property taxes should lead to more efficient use of property, because it would cost more to not utilize the property. This could lead to more rental supply and more options for renters to choose from.
Also higher property taxes should make property less valuable so landlords would potentially have lower mortgage payments.
However, yes in the short-term rents would probably go up to cover the extra costs. However, if taxes are increased property taxes should impact low wealth individuals less than high wealth individuals. Unlike an increase in GST or income tax for example.
The advocates would demand for rent control.
Don’t most landlords raise rent by the allowable thresholds anyway?
If it was across the board, wouldn’t it hit renters as well as owners? Landlords would raise rent to cover property tax increases. How would that help?
Gentle densification?
When I started my profession as an Architect in Calgary in1976, it required 3 sets of drawings to get a Development Permit. Today it is 16 sets of drawings. That is how many more departments were created in between. Often one department will require a certain feature and another department will request its removal, so you end up mediating between departments. When you visit the older parts of any town, say anything pre 1970’s one has to ask, just how has all this bureaucratic meddling improved anything?
It isn’t just this past year. We built a home in the Oaklands area 10 years ago and I have a handful of PDFs for that project. We are building a home right now in the Oaklands area and I have 30 PDFs in my onedrive and the PDFs cost $$$.
Current home required an energy report, will need a blower test at insulation and on completion, etc. Would we have done anything different if there was no energy report? Nope. Would have still gone with same heating system, same windows, etc. Every year it is more and more bureaucracy, code is more complicated, etc., and net result is prices go higher.
I really like QTs comment from a few weeks ago. Let’s give incentives to people to live in density versus trying to make something very inefficient (SFHs) efficient. Not just talking about the SFHs themselves but the infrastructure required to support them.
2000 people will live in the final phases of Dockside Green being built right now and not a single tree will be cut or road will be built. I would also love to see how many cars those 2000 people have total compared to 2000 new SFHs builds on the Westshore.
They would obviously drop per lot compared to 1 lot subdivision but you would be surprised in how little they would drop due to DCCs the need for more expensive consultants, etc.
For example, you soft costs per unit on a 4 unit townhome complex are probably going to be lower PER UNIT than a 6 unit townhome development. 4-unit you can get a designer to draw it up, 6 you need an architect and that is ridiculously expensive in relation to designer. A bunch of other factors you only really gain with experience.
I’m still on the fence about whether speculators do anything. Yes they can amplify market movements by piling in on the way up and then selling in downturns so they add market volatility but that should be a net zero impact on long run prices.
The feds basically promised us a national spec tax so I bet it’s something along those lines, which will do absolutely nothing except potentially being a shock to consumer confidence in provinces that don’t already have one. Market sentiment is not to be underestimated but it won’t move the needle on the real causes of this.
These actually make housing less expensive than if there were no taxes, by making it less attractive as a speculative vehicle. As for the costs involved with building, have they gone up in the past year? What’s behind that 20%+ increase in prices?
“Combined with sluggish listings, the surge in demand has left Canada with only 1.9 months worth of housing inventory available — the lowest reading for this measure of home supply on record.”
This is ominous, and I have to lay it at the feet of all governments. There are so many regulations that have compounded the costs of building a home through all stages required. Then all the added tax grabs governments have added in selling a home, transfer tax etc. It’s no wonder people just want to stay put and renovate.
If taxes are going to be raised to pay for all the Covid spending, my vote goes to property taxes. The federal government should look at imposing an across the board tax on property. This would also make speculative purchases of property less attractive. However I see no chance of this passing because homeowners would punish the government in the next elections for taxing their homes. And I am sure there will be arguments made that this would make homeownership even less affordable.
It will be interesting to see what gets floated. The down payment requirement across the board might be it, possibly more tracking history on the down payment gifts to see it was borrowed against other properties. Separate from anything the regulator might do, the bond market is going to be growing the rates anyway, which will have the biggest impact. The big thing I think might happen, is from real estate being seen as the store house for Canadian wealth and increasingly debt riddle governments are likely going to look to unlock that revenue potential. So, whatever is going to be looked at, the limited imaginations of policy makers will likely have it in the form of taxation on the primary asset that Canadians hold.
Mike Grace….maybe you should start that blog for people living on boats. Good luck to you whatever you decide. I’m sure it is a lot of work. Leo does a great job and I’m sure he can vouch for that idea. (Like running a daycare:)
Would soft costs stay the same if we break a large lot into 30 smaller lots?
What could they really do though. Increase down payment requirements for investments maybe?
From: https://financialpost.com/news/economy/speculators-distorting-canadian-housing-market-economists-warn/wcm/24ee6241-ade0-40d1-8c12-12fb50de3695/amp/
Looks like some are starting getting worried about a regulatory hammer coming down on this market. The funny thing is, these are the banks talking about being worried. It’s almost like they are saying “we can’t help ourselves, but we also don’t want government to do it either”.
Tough to say without finished photos. Lot is 62k and let’s say builder proft 50k that still leaves 380k for improvements which isn’t out of the realm of possibility for the cheapest possible build in Victoria on the Westshore of that square footage.
Thanks Leo,
That’s an awesome chart, and I feel so special you did that since I was just asking for a friend 😉
The housing market has me exhausted, so I’m thinking about cashing out living out the rest of my life on the high seas.
There’s nothing similar to this blog for boats, unfortunately.
Way too many variables but 75k to 150k per lot hard costs. Soft costs even crazier spread.
I just had a meeting today with city staff re small apartment building rezoning on Westshore and on top of all the previous list of consultants biologist was added, never mentioned before but what you going to do you just need to accept another 5 figure bill. Quotes for consultants also all over the place architectural quotes from $148,000 to $346,000 for a rather small building. If I didn’t have my real estate business for steady revenue I would be sweating it.
‘ QT Marko,
Do you have or know of anyone that have experience with land subdivision?
And guesstimate of soft cost and hard costs?
Thanks
~~~~~~~~
great question, following.
Marko,
Do you have or know of anyone that have experience with land subdivision?
And guesstimate of soft cost and hard costs?
Thanks
Oops. re-reading I see that I missed the sarcasm. Apologies.
So $TSLA is now down 30% since the beginning of February. Clearly house prices are about to follow right?
And swap Guelph for Duncan, at the end.
… analysts often exhibit herding behaviour “whereby they release forecasts similar to those previously announced by other analysts, even when their information does not justify this.”
When housing market forecasting goes wrong, we all suffer
https://financialpost.com/real-estate/when-housing-market-forecasting-goes-wrong-we-all-suffer
https://www.facebook.com/22Minutes/videos/2994618004158466/
Just swap Toronto for Victoria
“Drama! The Malahat is like 350 meters above sea level and experiences winter conditions for perhaps an average of 1-2 weeks per year.”
I was just kidding dude. I realize the malahat ain’t shit.
Not actually the case, but the chart is hard to read in that way. The lack of inventory is entirely due to increased sales.
Or even Rogers Pass, late December, in the pitch-dark of night, in a blizzard, with so much snow on the road that the only drivers dumb enough to be out there create their own lanes based on a hunch. Ask me how I know.
Mike you cashing out? Basically currently Victoria is on a bit of a run relative to Comox valley, just like we were in 2017/18 so the gap in dollars has widened.
However the gap in % is actually narrower now than it was from 2011 to 2018.
Drama! The Malahat is like 350 meters above sea level and experiences winter conditions for perhaps an average of 1-2 weeks per year. Visit Europe, South America, or Asia if you want to experience an actual “treacherous mountain pass”.
I could probably agree with “Dad” on some of his points for sure.
But I also noticed in the Helsinki article that the government has done a great job of building housing as well….even having it’s own building crew.
I came from Scotland where they always had a strong social housing support system and I know many people on low income who live quiet, simple lives in these little stone houses in small villages all over Scotland. If they were in Canada, they would likely be on the street.
Certainly building more townhouses etc would be a good help as well.
And…as far as the Crofton/Duncan area….. if you can’t smell the pulpmill up there….. maybe you have Covid 🙂
It’s long been reported that people living near pulp mills have a higher rate of cancer. It’s one of the reasons I don’t recommend these areas.
It’s tough though because there are no easy answers.
PS: Ha ha…. Nothing wrong with Moncton:)
Leo- Your new listings graph is excellent and helps explain what is going on in this crazy market. The plunge in listings last spring due to covid, simply has not recovered. People’s behaviour has changed and are reluctant to make any major moves until things get back to normal. The mediocre listings so far this year indicates that we are a long way from returning to normal any time soon. Supply will remain far below demand for a while.
Marko said “Someone post a brand new construction home somewhere in Canada that is less than the cost of construction in Victoria.”
Someone more knowledgeable would have to evaluate this properly, but here’s a random one in Halifax. There are many around this price/quality and Halifax isn’t Moncton (no offence)… it’s a vibrant city very comparable to Victoria. Under $500k including the lot which was purchased for $62.5k.
https://www.viewpoint.ca/map#eyJvdmVydmlldyI6eyJsaXN0aW5nIjp7ImNsYXNzX2lkIjoxLCJsaXN0aW5nX2lkIjoiMjAyMDIyMjY5In0sInByb3BlcnR5Ijp7InBpZCI6IjQxNDA4MzM3IiwiY2xhc3NfaWQiOiIxIn19LCJzdW1tYXJ5Ijp7Imxpc3RpbmciOnsiY2xhc3NfaWQiOjEsImxpc3RpbmdfaWQiOiIyMDIwMjIyNjkifSwicHJvcGVydHkiOnsicGlkIjoiNDE0MDgzMzciLCJjbGFzc19pZCI6IjEifX19
https://www.realtor.ca/real-estate/22528171/lot-2-bissett-road-cow-bay-cow-bay
Hey Leo,
For selfish reasons only, it would be awesome to have a post on the comox valley and some of the madness up there.
Anecdotal stories of Squamish families cashing out and scooping up cheaper homes.
Could we compare price differential between the valley and Victoria over the last 3yrs?
Middle of the road pace of new listings this year
Here’s an idea for low cost rental housing that would provide immediate rental units for low income. Allow landlords to increase their rents by an additional 1•5% over the yearly inflation allowance maximum if they provide one subsidized unit for low income earner occupancy for every 20 units in the building. (Or some similar formula)
This way instead of low income earners all being cooped up together in one large building, they are integrated into the general community. The concept of living as a village, where integration is embraced.
The roofing company I used was Infinity Roofing. The cost for my 1450 sq ft bungalow tear off (two layers) and reroof was $4830. in 2014. I was super pleased with the work and end product. I see they have a couple of really negative reviews especially by one individual, so do your due diligence ask to see and speak to recent customers.
The answer is lower prices. The government should stop subsidizing home ownership. That won’t happen unfortunately because too many voters are homeowners. But lower prices may arrive of their own accord, as they have in the past.
Take a look at the chart Leo posted below. Why do we have a housing shortage when so much of the economy is going into housing?
https://househuntvictoria.ca/2021/03/01/maximum-hotness/#comment-76732
That’s assuming perfect competition.
“up island near duncan stinks unfortunately”
Never ever noticed it and I spend lots of time up there in the summer. Anyway, I wasn’t suggesting you move there. I was pointing out that if someone is priced out of an SFD in Victoria, the cow valley may be an alternative. Beautiful area that offers all the usual Vancouver Island things.
“The only answer to that is low cost rental housing provided by the government and the overall costs shared by society.”
This would only address low-income renters unable to afford private market rents. The discussion on here is usually centered on middle-income families priced out of SFDs. We don’t need to build massive subsidized rental housing projects for those people. What is needed, is what Leo and others on here have said; more townhouses, row-houses, duplexes, triplexes etc.
I would agree that government subsidized supportive housing is probably the best option for housing low-income people with mental health issues/addictions. For other low-income renters, more purpose-built rentals and expanding rent supplements should do the trick. Gets government out of the business of building and holding rental properties.
Almost certainly the latter. Not a lot of smart investors paying hundreds of thousands dollars higher than market value for anything. This is almost certainly someone who doesn’t care and just wanted it.
I meant to mention….I was being sarcastic when I said “Victoria is over priced”.
I still think it is cheap here compared to other choices.
I also recognize that many people just can’t afford to buy a house.
The only answer to that is low cost rental housing provided by the government and the overall costs shared by society.
Those that don’t agree with that idea had better buckle up for increased taxes as more and more people give up participating and end up costing us way more in crime and the fall out of that. You will end up paying more.
Why anyone would be willing to pay more rather than fixing the problem, I will never understand.
But that’s what we are doing right now.
“Dad” …. up island near duncan stinks unfortunately. (Crofton Pulp mill)
We visit someone there all the time and sometimes my eyes water as we get into that valley. People say they don’t notice it but it is there. They did do a retrofit many years ago now to help cut the percentage of the pollution, but they also increased the production and output…so you still end up with an eye watering stink. Tons of people live there though. Just not my cup of tea.
By the way, I believe that having an awareness of prices in other parts of the country is very relevant to Victoria. For example: If it cost a billion dollars for every house in Toronto, then it would effect other parts of the country. Just as Vancouver prices effect us here.
“Victoria and vancouver Island is so beautiful….but we do pay for that.”
The point has been raised here recently, but once you venture 50 or so km north of Victoria over the treacherous mountain pass, house prices get a lot more affordable. Especially in Duncan, which, you will discover is a nice town if you get off the strip. Ladysmith, Chemainus and Nanaimo are also places I would consider if I was priced out of Victoria and able to wfh.
“Yes…Victoria is definitely over priced. Look what you can get in Toronto instead:)”
Isn’t the issue affordability, rather than houses being over priced? Also it’s not clear what the cost of a residential lot in a City of 6,000,000 located 5,000 km away has to do with house prices here, but ok.
Leo, any news on the local employment front? UVIC making anymore cuts or are they hiring people back?
I need to get my roof done this spring. So I, too, would appreciate recommendations.
I had my roof done in Victoria 4 years ago cost me $4200. Just had two roofs done in Calgary, 1,150 sq ft bungalow cost $4200 and a 1,800 sq ft 5.5/12 roof cost $10,500.
I will post the Victoria roofer if I can find the info.
199,000.00 in Moncton NB. I wouldn’t want to live back east myself. But millions of people do:)
Victoria and vancouver Island is so beautiful….but we do pay for that.
regarding that 377k over asking sale, i think my co worker’s house on Cowichan set the benchmark when it went for $1.65M last week.
Yes…Victoria is definitely over priced. Look what you can get in Toronto instead:)
https://toronto.ctvnews.ca/dilapidated-garage-hits-the-toronto-housing-market-for-729-000-1.5332018
Big different between a private entity and government employee. One can shop around for better/cheaper service and fire for poor performance, and the other is that you can’t shop around or fire your employee for poor performance/service even those you pay their salary.
Me too. I like that area a lot.
It’s a unique joy living near one of these houses.
Marko’s job is essentially that of an entrepreneur, he eats what he kills, so if kills are easy then good for him. In the long run if there is excess money to be made being a realtor then economic theory states that more will enter the field until there are no more excess money to be made. Thing with being a realtor is that like any sales game only 20% make 80% of money, so if Marko is in the 20% then he is clearly good at what he does and deserves the $.
My comment above was a tad ambiguous. I guess what I was driving at was that anyone who is willing to pay $377K over asking is presumably fairly confident in the future of Victoria RE as an investment.
Or, the buyer is a multimillionaire and doesn’t care what the market does going forward, which I suppose is also a possibility.
GH towards the arbutus/10 mile point area is nice I would definitely live there long term. I have rented to UVic students before, I would get complaints from neighbors about parties and people peeing in their driveway.
Thanks, alexandracdn. Yes, I am very much looking forward to owning my house free and clear.
Oddly enough most of my friends and their elder siblings in 1980 were latchkey kids, because both of their parents had to work to pay for their house in the 60s and 70s in Esquimalt/James Bay/Fernwood/Fairfield/Oak Bay.
I hear ya. If I could do it over again, I might not choose GH. I didn’t realize how obnoxious houses rented by UVic students can be, and I didn’t realize how many of these rentals would spring up.
That said, GH still has many wonderful aspects that I appreciate.
I agree with you introvert re paying your mortgage down. Everyone has different comfort levels…..depending on their current situation as well as their personal experiences during their lifetime. Some like living on the edge and if you are fairly young without any responsibilities except for yourself, then it is easier to take risks. Much easier. Time catches up to us all. There is a nice, safe & comfortable feeling when you finally own your home free and clear. The tension of continually enduring financial risks throughout ones marriage takes its toll on all family members. So good for you!!
Introvert, that is fair and most people should be debt averse but they are not. I am ok with taking on debt if it the risk reward is worth it, however I just didn’t feel like they have been in recent years when it comes to Victoria Real estate.
If i can go back I would have ponied up some more cash and bought a house in a neighborhood I ultimately wanted to live in rather than in GH (west of GH road), but I was too focused on cap rates and cash-flow.
To be fair, Marko has acknowledged many times that his job doesn’t contribute much to society and that he is grossly overpaid for what he does.
[quote]
Yeah, no offense Marko but if you want to talk about contributing nothing and being WAYYYY overpaid you should start with your own profession.[/quote]
Breathed heavily through my nostrils at that one.
The short answer is: because I’m debt-averse. It’s why I’m also trying to pay off my mortgage ASAP, despite many here insisting how financially foolish that is.
I’m happy to have my primary residence be my only RE investment.
ks112, you weren’t around in the early years of this blog, but you’ll have to take my word for it that buying a house in 2009 was considered by most to be an extremely bullish/optimistic thing to do.
In fact, here’s how Leo characterized it looking back:
Most (me included) thought early 2009 was the end of the (financial) world and were just happy to hang on to their job rather than out looking for deals.
https://househuntvictoria.ca/2017/10/23/oct-23-market-update/#comment-33430
Anyone think the federal budget, set to be tabled March 30, will include measures to constrain the housing market? Up downpayment requirements for investors,, for example? Given the rapid acceleration, I’m expecting something…
Introvert can always move to Oak Bay if HE is afraid of densification in GH.
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I thought introvert was a SHE?
620 Normanton: $377k over
1911 Shotbolt: $305k over
What house in Fairfield sold for $377k over ask?
Yeah, no offense Marko but if you want to talk about contributing nothing and being WAYYYY overpaid you should start with your own profession.
Introvert, If you are such a housing bull how come you didn’t buy another house during the slow times in 2018/29 or during April/May when sales were down and rates were low?
I appreciate some of your commentary Marko, but do you actually believe that every government employee contributes essentially nothing?
Does anyone still want to argue that houses aren’t investments?…
“GC and Marko, why is building a new house (not including land) so much more in Victoria compared to elswhere? Is it main attributed to high labour costs? I am assuming the raw material costs are the same here as they would be in say Saskatchewan.”
If we compare apple to apple, the cost of building an “equal quality” house here and Sask is in the ballpark range. The cost of my last house in Regina was around $250/sft, that was in 2013. In terms of labour cost, I believe Sask is slightly higher than here. Raw material costs are similar, but customized material costs here are cheaper than Sask.
Frank, could you tell me the name of the roofer. Might need one in a year or so. Thanks.
$955k
Does anyone know what 627 vanalman ave sold for? Looks recently renovated?
That is without the foundation. Will have to do that on our own, but ICF isn’t rocket science.
Wow….less than $23K to frame an entire house, I take it two or three levels. A friend of ours just paid a carpenter nearly $4K to put two new wood railings around their small sundeck, replace 4 deck boards (joists all good) and replace two steps and a set of railings on either side of their stairs at the back. It included getting rid of the old debris. Cost of painting/staining would be extra. I guess that carpenter charges what the market can stand too.
Frank, maybe you should get into the construction business. Lots of profits by the sounds of it.
$11,000 for a roof seems reasonable when 98% of people pay >$36k to sell their average priced SFH home and the costs for the agent involved in that are less than $1,000/listing.
I actually don’t have an issue with trade prices. For one they actually do something and secondly all the quotes are different (there is solid competition within the marketplace) so you can look for a deal. There is a massive shortage of skilled trades people. Agents are making an absolute killing so if I was a plumber or similar I would be charging as much as I absolutely could get away with and it would still be 10x better value. People sit at government desk jobs making $70-$100k/year contributing very little so only make sense plumber would be a 150k/year profession, imo.
Let me put it this way. I just signed a contract for $22,900 to frame a house that will be worth approximately $1.3 million which equates to $42,000 in real estate fees (commissions may vary). People will get multiple quotes for the framing (if they can) but rarely will anyone try to save on real estate fees even thought there are 1000+ agent willing to take the listing. Mind boggling.
Okay, let’s play this game again. Someone post a brand new construction home somewhere in Canada that is less than the cost of construction in Victoria.
This seems like a good move to me. Leo’s previous article “How long do overheated markets last?” suggests about 1-2 months left of this frenzied SFH Victora market, based on previous ones (e.g. 2016). Prices can remain high, but at least the stress and insanity of bidding wars and unconditional offers may be gone.
One working adult.
Frank: Labelling it greed is a bit unfair in that you work for whoever pays you the most(all else being equal). Same for everyone else. Why should the roofer take 7k if someone else will pay him 11k?
ks112- Your question regarding the inflated cost of building in Victoria can be answered in one word: greed. Material costs are probably slightly higher on the Island and removal of refuse is also more expensive, but the idea that quality of construction is superior is ludicrous. Houses across the prairies require far more insulation, triple pane windows, more efficient heating and air conditioning systems (summer temperatures actually exceed 30C. for days), and buyers also demand granite, quartz, and tiled finishes. The houses are probably better constructed than on the Island. I’ve been trying to get a roof shingled in Ladysmith and have received quotes of over $11,000 for cheap 20 year shingles. Let’s do some math on what is usually a one day job: crew of 4 men- $1600, materials- $3000, disposal of old shingles- $1000. That leaves a profit of over $5000 for one roof. My property manager finally found a local roofer to do the job with 25 year shingles for $7000. I jumped on it. Contractors simply have the attitude that if you can afford to live here, you’re going to pay dearly for the privilege.
In some ways I’m a bit relieved prices have risen further the past few months. A house is far enough out of reach again that I’ve stopped searching (which removes all the stress that comes with it). Still have the risk of our landlord selling hanging over our heads but if that happens now we’d likely just move back in with my parents (even though we’re in our 30s and have a two year old). I just have no desire participating in this market and perpetuating the problem.
Our evening entertainment is looking at pending sales from our realtor and laughing about how much they sold for. We’re learning to find comfort and happiness in what we do have, and the peace of mind of having liquid assets during a time of great economic uncertainty.
Which place in Fairfield?
Hard to imagine a time when sentiment changes during a frenzy. But it does
I can’t see how the current run up in prices ends badly:
As long as there isn’t a sudden drop in prices (which could be precipitated by a flood of inventory), then current buyers entering the market paying over-asking are setting a new floor. Stagnant or flat prices, while no optimal, will create some stability and certainty.
I can’t see inventory levels rising to the point they impact prices. I think the demand for SFH will absorb inventory coming to market.
I was a bear for a long time. I think this is the new normal.
The problem with the “quit yer whining” approach is that eventually the political winds change and those left out start voting for policies to change the status quo. It’s already happening, hopefully starting with making it easier to get homes built.
Another day of insane over asks…house in Fairfield $377,135 over.
And, then we have the people who are so lucky that they won the lottery of life by being born in Canada belly aching of how unfair that the world isn’t hand to them on a platter.
And, not very long ago a family of 2 working adult is lucky enough to have electricity, indoor plumbing, washing machine, vacuum, electric iron, B&W TV, party line telephone, and perhaps a gently used station wagon to be able to afford a home.
https://www.vintag.es/2020/08/1960s-kitchens.html
I talk to people around the province and the market is on fire everywhere, with many saying that it’s a flood of Vancouver buyers cashing out and moving to their community, similar to what we are seeing.
At the same time Vancouver sales are up 74% from last year and sales are rapidly rising in all sub markets.
Whatever the outflows are from Vancouver it seems they’re not enough to cool down that market
My parents grew up in socialist Croatia where if they were 2-3 years older they would have received a mortgage free brand new condo through their work and we would have never moved, but they were 2-3 years too late so they moved to the other side of the globe (Victoria).
If you can’t afford what you want in Victoria you only really need to go up to Duncan, no need to move half way across the globe.
Vote with your feet.
BC is tame compares to ON 27% jumped in price.
https://creastats.crea.ca/en-CA/
Here ya go millennials, your chance to buy a place in Toronto for a low low price of $729,000 compares to Victoria core.
https://toronto.ctvnews.ca/dilapidated-garage-hits-the-toronto-housing-market-for-729-000-1.5332018
I wonder if a comparison of medians would make more sense. There seems to have been a big jump locally in high end sales that might skew the number upwards if it is the same elsewhere.
Yes. Appreciation is a monster as that grows exponentially as the numbers rise. Wages can’t keep up.
You could, but taking on a $700-$800k mortgage doesn’t qualify as low stress in my book with that income. I was responding to Marko’s list (dog, kids, work-life balance, low stress, no risk, 2,200 sq/ft home on a 6,000 sq/ft)
Canadian average residential price increased by 23% in January 2021. That’s exactly the same 23% increase we saw in January 1981. The difference is back then it was a one year jump of $14k ($42k inflation adjusted), now it’s $115k.
I would say at 80k each, a couple can still afford a house here with 20% down payment
I think what bothers people is that it used to work like that, and not very long ago. 20 years ago that was attainable to ordinary working families in Victoria. As recently as 5-6 years ago that was attainable to double income working professionals. Now it isn’t.
You left out their parents, without whose assistance they could not buy at today’s prices.
The reason we have such inflated RE prices is that the rules that apply to other investments don’t apply to RE. RE prices are high because of government policies that inflate demand.
It’s common for apologists for inflated RE prices to claim that they are just the result of a “free market”. It’s anything but.
https://motivationgrid.com/differences-between-the-rich-and-the-poor/
I am not exaggerating in that at least once a month my mid 30s clients will run into their mid 30s friends at a viewing on the same property (friends arriving with another realtor before or after us). Literally happend on Sunday. Young doctor client ran into a young doctor colleague viewing same home as we were leaving.
Yes. For years many posters here have been blaming the high prices on invisible bogeymen – foreigners, satellite families, speculators, money launderers, people with “unexplained wealth” etc. In fairness the government has said the same thing.
I’ve always posted that it is not the bogeymen, but instead is the large cohort of home-grown millennials/GenX pushing the prices up. Example post….
Sep.25 2019: “The implication for a young househunter like you – the “enemy” here in your house hunt is not the bogeymen, it’s friendly-fire from your Millennial and Gen X cohorts, nice people just like you looking to buy a house, in huge numbers compared to housing supply. When you put in an offer on your Gordon Head house, you’re not going to be be bidding against “bogeymen”…foreigners, speculators, satellite families etc. – this govt data indicates there’s just too few of those to worry about.
You’ll be bidding against people just like the posters here on this forum.
If that’s all true, and you agree and recognize it early, you’ll buy ahead of that coming wave of core-loving Sooke-commute-averse Millennial buyers (like yourself!) , and thank me later! If I’m wrong, oops and sorry for wasting your time.”
https://househuntvictoria.ca/2019/09/25/where-to-invest-in-the-everything-bubble/#comment-63372
Introvert can always move to Oak Bay if he is afraid of densification in GH.
That’s not the only alternative. People who can’t afford a detached house in Victoria could move to a more affordable location instead of advocating for the building of stratas that they don’t even want to buy.
Hot tip: Port Alberni is affordable and Leo thinks it’s nice.
Like one of the Redditors said, no one complains about affordability in Beverly Hills. Closer to home, no one complains about affordability in the Uplands. I’m arguing that soon (maybe even now!) people should stop complaining about affordability of detached houses in the core of Victoria — and people should stop fooling themselves that densifying the city will make what they aspire to live in (a SFH) more affordable.
Its “lucky” that you bought a SFH in Victoria on a median income. Its lucky you had parents to help to get you to 20% to reduce your payments. As for the rest of it, you complain about people wanting to densify but you bought here and didn’t have the foresight to see that people want to move here and the cities only alternative is to densify. So it is going to happen, slowly perhaps, but almost a certainty. So instead of patting yourself on the back for buying and patting yourself on the back for predicting prices would go up how about you stop complaining and just blame yourself for not having the foresight of the inevitable densification/rezoning issues that are upon us.
1038 Wolaston Street, $649.00 nice solid little house for a reasonable price. Wonder how much over this little place that only needs a Reno will go for? It will probably get torn down before a small young family gets a look in.
People mention “luck” a lot here.
So I’m lucky to have been able to buy in 2009.
But I wasn’t lucky enough to have been able to buy in 1999. Yet, in 2009, would you believe that I didn’t bitch and moan about the better luck others had in 1999?
I sucked it up and bought a house for the price they were selling at in 2009, and carried a much bigger mortgage than anyone carried on a similar house in 1999.
That’s how it goes. That’s facing reality.
I didn’t advocate for the blanket rezoning of all of Saanich. Didn’t castigate NIMBYs. Didn’t demonize foreign buyers or buyers from Vancouver. Didn’t blame the Bank of Canada.
Marko, so what you are saying is that for the same quality of house there is actually not much delta in the price of construction regardless of the location? I have been hearing that some developers are bringing in an entire crew from Vancouver to do the construction here as it is cheaper and more efficient than local labour.
No, I don’t. But I’d be peeved if I lived at 4335 Tyndall or 1807 San Juan because now I have a bunch of new neighbours who have sightlines from their balconies into my house and yard.
No, but you want as many of them built, as soon as possible, everywhere. That worries me.
Township Coffee… I could take it or leave it.
If you could promise me that we’re not going to have 15 more townhouse/commercial developments built directly beside SFHs in the next 10 years in GH, then I’d say I’m perfectly content to have a coffee shop on that corner.
Map it out. From the center of GH to Yates and Douglas compared to center of Fernwood to Yates + Douglas I got 19min vs 7min. That’s almost 3 times as long. With either option, you have to tack on 5 mins to find parking.
When I lived just South of the Belfry, it was a 20 min walk and sometimes as quick as a 5 min bike ride (downhill most of the way), and no parking needed. Major win compared to GH.
Not only can’t people connect the dots but they also want the layer of honey right away. No one wants to eat the 9 layers of **** in life to get to the honey. They want the dog, kids, work-life balance, low stress, no risk, 2,200 sq/ft home on a 6,000 sq/ft right off the bat. Doesn’t work like that.
Last one we built on Bank Street was 50 x 104.6′, R1B so we were able to do three bedroom upstairs plus a one bedroom suite above the garage. Can’t do that with R1G.
In previous years people have posted on HHV new cheap houses elsewhere in Canada and some of the finishing you wouldn’t find in the cheapest new houses in Victoria. When you pay $300,000 (Sooke) to a $1,000,000 (Oak Bay) for a standard lot you are going to do basic things like 9′ ceilings, tile the bathrooms, etc. Some of the new houses people posted in other provinces I’ve never seen that level of cheapness.
A bunch of other factors.
GC and Marko, why is building a new house (not including land) so much more in Victoria compared to elswhere? Is it main attributed to high labour costs? I am assuming the raw material costs are the same here as they would be in say Saskatchewan.
That’s correct, if I were trying to buy today I would be depressed (but not surprised) that prices have kept climbing and that my mortgage will be that much bigger, but I wouldn’t be trying to stick it to current homeowners in the hope of making myself feel better — especially since what I’m seeking is a detached house in a relatively low-density part of the core and all the benefits that that confers. I would be shooting myself in the foot by vigorously supporting the building of higher-density buildings everywhere possible.
Also, keep in mind that, when I arrived in Victoria, people on HHV were laughing at the ridiculousness of crappy GH boxes going for $500K; they thought those prices were nuts, that Victoria was in a massive bubble, and that it had to pop any month now. Garth was invoked constantly.
When I arrived and saw high house prices, I was like, Duh! It’s Victoria. It’s awesome here, and obviously I’m not the only person who specifically chose to move here and wants to buy a house.
Leo, have you seen data pointing to wage increases over the past year? From what I have heard is that all the government places got their 2%, i am assuming tech got a bigger bump given covid, and also the trades people i am sure got a bump too given the amount of construction related work at the moment.
If the average/median house hold income are still in the 90k range then I guess SFHs are 10x now compared to 7x like 5 years ago.
Exactly…it’s a “drive”, rather than bike/walk
Thanks Marko. In your past experiences, was your lot like 50 by 110?
I’m sitting here with my bowl of popcorn waiting for the our saviors at the NDP to identify the vampires responsible for the current unhinged prices.
Remember all the villainous rentiers that the “Speculation” tax was meant to expose? Despite the delicious (and genius) hint of xenophobia and righteous indignation in that little exercise in agitprop, no bogey men were found.
So who will be to blame now and what new departments will we need to extricate them? I can’t wait to hear.
I have a second bowl of popcorn waiting to watch the inevitable sound and fury as the nomenklatura spin out some version of “affordable” housing. From past observations, this seems to mean that the government can draw out some chalk lines inside of which the rules of supply, demand, and the prices of land and of materials no longer apply. That’s pretty powerful pixy dust.
There are several small townhouse developments in Gordon Head. Curious, do you shudder and recoil when you walk by them? Do they impact your life even in the slightest?
Do you like having township coffee around? Because the only reason that place exists is because of a mixed townhouse/commercial development.
I’m sorry but this is such crap. Are you saying that if you hadn’t been lucky and instead been looking at the market now you would be saying, “Nooo i’m happy to preserve Victoria and pay over inflated prices just so I don’t inconvenience some NIMBYers” – I highly doubt you would. Easy to pretend that’s important to you now that you own. Also I haven’t heard anyone ‘hating’ to pay a strata – I have only heard people being afraid that their Strata will double overnight (which has happened in BC more recently) and by the time you factor in the strata (especially in a TH) you are actually paying more out of pocket then buying a house with a suite in it. Whats the point of densification if its more expensive than SFH?
The irony is that young people are primary supporters of high house prices. If you ask a typical millennial:
– do you want urban containment boundaries? yes!
– do you want to punish evil property developers? yes!
– do you want more green space? yes!
– do you want CERB helicopter money? hell yes!
They don’t connect the dots and will continue to vote for governments that make housing unaffordable.
Here in Victoria, the ultimate irony will be when some of today’s angry prospective homebuyers who hate NIMBYism finally scrape up enough money to purchase a detached house but then complain that they can’t find a decent one that isn’t so near a busy 4-storey condo complex.
https://www.theglobeandmail.com/opinion/article-house-prices-are-going-bonkers-again-where-is-the-outrage/?ref=premium
or
https://docdro.id/iCe42rs
Moreover, priced-out people’s contempt of NIMBYism is actually working against their goal of affording a SFH in that, as more “missing middle” housing gets built, the proportion of SFHs in the overall mix declines, adding even more upward pressure on SFH prices.
KS112 …Fernwood certainly has a mix of income people.
I personally like a mix.
It was low income volunteers that transformed the suites and spaces in the large building with the coffee shop. Those wonderful, low income people, spent a lot of sweat dragging out broken plaster and literally…. piles of shit. The community/Society then repaid them with low income rentals in return for their hard won efforts.
(The Fernwood transformation was a wonderful story based on the determination of a few key people who came together as a community.)
Same with the Pub. It was transformed by an amazing family who buckled down and took on a major renovation and risk.
I am so happy that the family achived great success after so much blood, sweat and tears.
Also: Got to Love Terry, “The Bubble man” . I remember one day I was talking to him about raising funds for Woodwynn Farms, The therapeutic community for people with addictions and mental health issues.
I was simply relating to Terry what we were up to because we were good friends. He absolutely insisted that I accept his small donation. I was overwhelmed because I knew that he didn’t have much and was living on the edge. He would not take no for an answer.
That is Fernwood for you. It has an abundance of low income people who have more than the average person among us.
+1. Yup, the array of arguments just don’t line up whatsoever. It is one contradiction after another.
The difference is, I wasn’t trying to densify and screw-up Victoria to get myself in.
And I love how all these people priced out of SFHs are denouncing NIMBYs for opposing big condo and townhouse projects when they themselves hate stratas and don’t even want to buy a condo or townhouse.
Any big solutions to homelessness have to be deployed across the entire country, or else homeless people will tend to migrate to the city or province that’s spending/doing the most to “solve” homelessness and the strategy will no doubt fail due to the influx.
Ohh I know, my flights/vacations/lifestyle is horrible for the environment, but when have you seen me be pro-environment or complain about price of housing in relation to my personal accomodation? More than happy living in a 800k place.
I just call people out on their pro environment justice hypocritical BS. I’ve stated a number of times I’ve had an EV since 2015 because it is the best car for my needs, not because I care about the environment. If I cared about the environment I would actually do something about it like not travel, not spew out BS like I drive an EV, I live in a condo, etc., I don’t print marketing marterials for my listings, etc., etc. I can’t stand the “I have a solar panel on my SFH so I care about the environment” ignoring every other factor that went into that 3,000 sq/ft home such as clear cutting, roads, etc.
I’ve even made videos on how much I dislike Tesla owners who think they are doing something for the environment https://www.youtube.com/watch?v=rRF-t4soglw&t=1s
I live in a condo because I like living in a condo, I wasn’t losing sleep about the environment when I was living in my house, but when I look at the hydro bills it is clear cut that condo living is much better for the environment, but then I have someone living in a SFH lecturing me on the environment. Really.
Fernwood was a low income neighborhood for the longest time from what I remember
I think Fernwood is a great neighborhood. (An article in the New York Times featured it because it wanted to honor communities that had a high score in livability!).
Where else can you step out your door and stroll to an evening of the best live theatre? Or stroll to one of the best pubs, Pizza place, wine bar, etc?
You also have Hillside mall within walking distance. Same with the College or downtown….you can walk anywhere and enjoy it’s history in the houses you see.
The community spirit of Fernwood is second to none. It has an amazing community center that looks after people who have issues or big dreams.
It has a great high school with a great art program. It also has solid useful programs such as welding etc.
The community has a diverse mix of interesting people from all walks of life.
That’s why I love Fernwood. It’s not sanitized. It’s a people place. Kind of like Granville island in Vancouver. (Nothing compares to Granville Island mind you!) But it’s the vibe I am talking about when I make the comparison.
House prices are going bonkers again. Where is the outrage?
HI: I do like the painting.
Ks112 – People want to live in Fernwood exactly for the old houses and narrow streets. They also want to walk and bike.
I think it is pretty normal to be excited about the idea of having a dog and a kid. The math has to work though. The math doesn’t work for saving for a couple of years for a down payment and buying a SFH in Victoria.
At this point it is a townhouse or condo that is a starting point or you need to buy with another couple/family member – or relocate if that is a viable option. No sense complaining about it. I don’t think things are going to improve unless major reforms are brought in, although prices can’t go up like this forever.
As far as pet ownership goes, like everything, this is a choice that is open to people who have the space and time for it. There is no law against it. And being judgmental about it doesn’t help too much. Someone could point out that your transatlantic flights add up to a far more of a climate impact than owning a dog does and get angry at you for your annual trip overseas. Or if you still eat meat that is going to be far above pet ownership in impact.
Again, math probably provides some of the most convincing answers. Knowing the climate impact of various choices provides more solid ground for individual decision making.
http://www.lunduniversity.lu.se/article/four-lifestyle-choices-most-reduce-your-carbon-footprint
I agree. I dislike the Fernwood area.
I just don’t get why everyone wants to be in Fernwood, it is full out old houses and narrow streets. Sure it is close to downtown but GH, cedar hill/maplewood are just an extra 5min drive away…
The initial Reddit post
I don’t know what is worse; listening to the old non-sense argument crusty NIMBYs or people have the been priced out.
You went to UVic? That is really nice, but I need someone to change my hot water tank not another English degree.
Prospects of owning a dog? Last time I checked a dog wasn’t some sort of given right. Not to mention dogs are expensive and horrible for the environment, but that all obviously goes out the window when it comes to personal enjoyment. Everyone having a dog is very symbolic of how entitled and hypocritical our society is, at least to me anyway. If you can afford a dog please don’t complain about cost of housing or how no one will rent to you. I don’t remember anyone every holding a gun to my head insisting that I acquire a dog. If you can afford a $2 million dollar home and three dogs, I am totally fine with that. I love dogs.
You can buy a nice house in Duncan for <$600k…..wait, but everyone wants to be in Fernwood.
We’ve built on both R1B and R1G lots in Fairfield and R1G is a pain. It has a few quirks like a 1 1/2 story bylaw which means the top floor can only be 70% the square footage of main floor. The problem with this is it is difficult to design three decent bedrooms + ensuite + main bath upstairs. Takes a bit of creativity.
R1B is better for sure but I wouldn’t pay 50k more for R1B vs R1G all other things completely equal.
We can’t make homelessness illegal without providing comprehensive and medically recommended treatment and immediately available supportive housing. It won’t pass a charter challenge. This is why the bylaw against camping in city parks was struck down. The province could not show that there was a viable alternative for those that are homeless.
This issue is not fining or jailing, it is the power to move people off the streets and into treatment/housing. Most people will go willingly if there is a viable option that is not a temporary shelter (which are not desirable places to sleep for many reasons).
We can’t continue to make camping in public places an option – we can see this doesn’t work out well for those doing it or for the general public’s right to use these venues. And the cost of homelessness appears to be greater than providing treatment and supported housing. Just that you have to invest up front which is a hard argument and involves multiple levels of government agreeing.
I would like to clarify that when I say I agree with the statement, “Make homelessness illegal”, I mean that it should be illegal for our community not to provide housing for those who are in such desperate need.
Helsinki’s solution has been shown repeatedly to be cheaper and more humane and it’s madness that anyone would argue against the idea.
I’ve been heavily involved in homelessness for years now as some on this forum might know.
In my opinion there is absolutely zero hope of success under our current model.
We need our federal government to stop insisting that “housing is primarily a provincial jurisdiction”.
While that statement is currently true, it’s exactly what needs to be changed. (Otherwise everyone will flock to the one city that makes an effort to provide housing and that cities support system will be crushed and overwhelmed. We need to spread the burden around the country.)
We also need to take the drugs out of the equation.
We also need changes to the mental health act.
Nothing is going to change and things will only get worse unless we grasp the nettle and make tough choices.
I doubt this will happen so expect your taxes to go up. You will pay more and get less.
If we make homelessness illegal, I hope we’re going to be locking up policy makers for failing to take care of people. There’s no point to fining (lol) or jailing individuals for homelessness, it’s a net $$ drain compared to services that would help them. Most of the failure is systemic, not down to individuals.
lol where were all those reddit people in 2019? And what does having 20% down ready to go help when going into a bidding war? Does that guy mean he has financing lined up and can go anytime with unconditional offers?
Yes, the whole – I got lucky and got mine and now screw everyone else mentality.
could anyone please educate me on the value of R1B zoning in Fairfield? The owners seems think his box worth like 2M for a standard lot…
TIA
‘It’s a miracle’: Helsinki’s radical solution to homelessness
Finland has about the same population as BC.
Am I missing something here?
Since the general economy (business/consumer loans, LOC’S, Government debt) is more associated with the BOC prime rate as opposed to mortgages tied to the bond rate, doesn’t it make more sense to choose a floating rate heloc over a conventional fixed mortgage right now as there is less likelyhood of the heloc rate increasing and for quite some time to come?
Sort of. Holland made “squatting” a criminal offence in 2010. The municipalities also have the power to create zones where police have broad powers to banish at risk users. This combined has meant that it is basically illegal to be homeless. They have not really solved the problem though as shelters continue to bridge the gap rather than supportive housing.
Finland seems to have the best track record on reducing homelessness overall. They put a huge effort into an initiative called housing first – making supported housing available for those that are homeless as a first step. In addition, mental health services are mostly free, as is opioid treatment.
I think your plan sounds good too – a combination of treatment and disincentives that could restore our parks and downtown areas and recognizes shelter and medical treatment as a human right. It would be illegal to camp in parks here too if the government could show that there were other adequate options. The only reason the bylaw was struck down was because there were not.
As for immigration, I think people are getting ahead of the market here. Immigrants rent on average for 3 years before buying. Before we see a boost to the market from immigration we will see the drag from the immigration drop in 2020
Bidding wars are everywhere but I do worry about over market sales in this frenzy.
People underestimate the pain of a flat market for a long time, and that’s doubly so if you paid over market. We’ve seen stories out of Calgary on this front.
Yep. And more and more people are being lured into gambling instead of investing. Savings accounts and GICs are yielding zero. Same with bonds.
Globally diversified low cost portfolios are boring to many.
So we see people chasing meme stocks, Tesla, Bitcoin, doge, etc
Lots of pain coming for people on the way down.
Has that been done anywhere?
I vote for free safe supply in certain facilities + readily available treatment and housing combined with a zero tolerance drug use policy everywhere else. Has to be a national initiative though.
Holy moly, honestly kind of shocked how many like-minded folks were posting in that subreddit…
But starting from a very different base. This chart is just so crazy
I agree Leo.
As per DIY investing I can only go from experience. When my partner and I started we went with RBC wealth management per recommendation. A lot of people do the same. All they did was divide up our savings equally into the Big 5 banks and then a chunk into a u.s. equity mutual fund where profits were reinvested all the while charging a management fee of a couple grand per year just to not really do any managing. Only once did they move assets which was from national bank to Intact financial. Nowadays with online brokering you could at least do this yourself and save yourself the fees.
Very similar trends in Canada and the US right now with inventory
Reading that Victoria sub Reddit…
Someone asks where are all the low-wage workers are going to live if RE keeps getting more and more expensive?
My answer: where they’re living right now. They’re making it work! Believe it or not, today, all the coffeeshops had baristas behind the counter, the grocery stores had cashiers, and the floors at the mall got swept.
Ain’t it wonderful that we have NIMBYs working hard to save our environment?
https://www.timescolonist.com/news/local/metchosin-throws-wrench-into-boys-and-girls-club-subdivision-plan-1.24288864
Hope it leads to the political support councils will need to allow new supply.
Young people are freaking the fark out over on the Victoria sub Reddit. To say they’re not happy with the current real estate climate might be an understatement. I do feel for them but some peeps sound a tad entitled.
I agree, there’s no hope!
Victoria is full. I’d rather see big trees left standing than more people around. But there is affordable housing available in Prince George. Average house price is $400K. Beautiful mountains nearby.
Good luck!
People only care about themselves and their own agenda. The lack of reflection is just mind boggling.
So many complete idiots in my own TWO YEAR OLD building complaining about development going in the area…..”I don’t want to live in a construction zone for the next 10-20 years.” Like wtf, you do realize the building you live in took 3 years to build creating a construction zone for OTHER PEOPLE? We are talking retired lawyers, engineers, coming up with these non-sense arguments. Funny thing is they are complaining about the Roundhouse development increasing density which is a 15 to 25 year build out in my opinion. Some of these people are in their 70s….I don’t know how to tell them you do realize you’ll be 6 feet under by the time we see this density. Why worry about it.
I’ve been watching the online council re-zoning meetings in various muncipalities and I don’t know if I’ve ever seen NIMBYs stronger than it is now. People from three blocks away complaining about one lot being subdivided….get a life. I don’t know how sad my personal life would have to be where I care what someone is doing three blocks away.
Same thing. For example:
https://www.investopedia.com/articles/basics/12/intrinsic-value.asp
Given prices, apparently lots of people still find reasons to buy here, regardless of minority opinion online.
That is a very interesting question, because it seems as if Victoria housing is a growth stock with out market saturation nor competition (unless the government move all offices to Vancouver).
Thanks for the correction. I somehow saw it as HOD.TO instead of HOU.TO, however it is the same the EFT was an option hedged and lost.
Leo, do you think we will see a correction for GH houses like what we saw in 2018/19? Is that where most of the bidding wars are or are they not just concentrated to certain neighborhoods anymore?
Why we would listen to comfortably housed people in million dollar homes about whether we should build more homes is beyond me.
They’re all very concerned about trees being cut down (and replaced with native species!). Funnily enough they didn’t give a damn about the trees that were cleared to build their houses. When it comes to homes for other people it’s suddenly the most important thing in the world.
The system is broken. No matter the result of this development there is no way this kind of process will ever create affordable housing. There are simply not enough hours in the days of developers, city council, and city staff to waste on the endless discussion about a measly few townhomes to make a dent on the supply we need.
Any thoughts on the controversial development planned at 902 Foul Bay road?
Neighbours are making all the usual arguments against density: it doesn’t suite the character of the neighborhood, not enough parking, it’s already too busy/congested, 900K isn’t ‘affordable’ so it doesn’t help young families, etc.
But, this one is complicated by the number of trees, some designated as heritage, that would be cut down, which seems to be the main rallying cry behind the opposition.
Some of the neighbours say they would be fine with a scaled down development that preserves the trees, but of course the developer doesn’t want that.
https://www.timescolonist.com/opinion/op-ed/comment-why-building-townhouses-at-902-foul-bay-rd-is-a-bad-idea-1.24275939
https://www.theglobeandmail.com/canada/british-columbia/article-bc-real-estate-industry-braces-for-postpandemic-immigration-boom/
Patriotz, I think you meant “intrinsic value”. I also had no idea someone made that reference about hawk.
Also Canada 5 year Bond down to 77bps . 25 bps down from recent peak but still 45 bps over bottom so i suspect the big banks aren’t planning on giving back any mtg rates they just bumped up quite yet.
I miss Hawk. I hope he’s doing well wherever he is. And James its time to let go of that dumb joke from years past. Who cares what someone said on a housing forum 3 years ago.
Fundamental value is the present discounted value of the future net income produced by an asset. That is, it’s the amount of money you’d have to put in the bank to get the same income at the presumed future interest rates.
That’s what it means to stock market analysts, of course RE operates in its own world in many ways so I’m not going to guess what it means to the average person buying RE.
It’s just a dumb joke when you have a poster here who would infer that he was the guy in oak bay who killed his two daughters. I didn’t like Hawk as a poster here, but I don’t see the need to bag on a person especially when they’re no longer on the forum.
That’s gambling, not investing. I do own some O&G producers – not leveraged ETFs that make bets on oil price – and have taken my lumps on some of them. That will happen in any diversified portfolio.
QT – the author clearly states s/he bought HOU.TO. That is the leveraged Bull ETF, not the bear one. It went from $1388 in Jan.2020 to $10 in early May 2020 (currently at around $25). But you’re right, the author may not have known what the investment was all about. Or have any business with DIY investing in the first place, actually.
Leo, can you post some examples of the “steals” that people got in march/april 2020? I think that would be interesting to see how far we have come in 1 year.
QT, you bring up fundamental value which is interesting. I am really curious as to how much “fundamental value” a Victoria house is worth (not the price some fomo person is willing to pay in a bidding war). If someone offered me $1M 1 year ago buy my house, I would throw in a fresh paint job and a new fence on me without hesitation. When I compare my house to the ones in the states (Cali, Arizona, Texas, Florida, Hawaii), I feel there is much more value there in comparison. If i had a few more houses, I would seriously consider selling at least one.
James, I guess sarcasm is hard to sense through an internet forum.
Volvo says it will be ‘fully electric’ by 2030 and move car sales online
https://www.cnbc.com/2021/03/02/volvo-says-it-will-be-fully-electric-by-2030-move-car-sales-online.html
Where could the author went wrong?
He failed to follow the rules of investing, and perhaps he doesn’t know what BETAPRO CRUDE OIL INV LVGD DLY BEAR ETF mean (Volatile, light crude, 2X leverage, bear index). The author essentially purchased an ETF that buys Put Options daily on light sweet oil Index.
That you think Hawk appears on the Ontario Sunshine list says more about you than it does about Hawk.
It sounds like this fellow makes 100% of the family’s financial decisions himself, without much or any input from/collaboration with his spouse. As we see, that approach has potential downsides.
And, another victim of the wishful thinking peddled by Garth Turner.
RE: lost my life savings – that is absolutely brutal. those 2X and 3X etfs are just killer and degrade over time. Really unfortunate considering the sacrifice he made up until then.
Is that person hawk?
Addictions, not additions, eh.
I read that too, Leo. I thought the tale was harsh, and likely to end the poster’s marriage, if nothing else. But at the end of the day, a $100k /yr job with defined benefits pension isn’t a bad place to be. Entrepreneurs are taught to take risks and dust themselves off if the business collapses. This individual seems to have approached personal savings with a similar mindset.
Nothing to do but dust him/herself off and start again. With some frugal living, savings could be up at $50k again within a couple of years. The kids will have to fend for themselves for post-secondary, though. Or maybe the poster could pick up a second job?
I guess I’m saying the tragedy level is unfortunate, but doesn’t come close the tales of ruined lives from additions we read once in a while.
This is such a terribly tragic story. Housing + overconfident DIY investing ends in disaster. https://www.reddit.com/r/PersonalFinanceCanada/comments/lvuhw9/lost_my_life_savings/
There’s only 2 hard problems in computer science Leo. 1) Off by One errors 2) Cache Invalidation 3)Naming things
Downtown is in a state of chaos, yates on yates building has had lots of homeless breaking in and chard will not get a concierge, people shooting up or smoking crack in hallways, and one drug deal with weapons that went down during early occupancy – https://www.victoriabuzz.com/2021/03/man-arrested-after-pouring-gasoline-on-occupied-tent-in-victoria-park/
Buddy, I see a lot of rent signs downtown also, however apparently in other neighborhoods the rental market are still tight.
If I were able to move my work location to a smaller community in B.C., we would be looking at selling our 1916 Fernwood character house. Bought for around 575K in 2015, assessed for 760K. Busy street, good house, great backyard. Kind of seems silly to carry a mortgage for the next 10 years when we could simply action our pre-retirement move ahead of time and then work remotely.
Absolutely agree with Totoro on this one….”I’m ready for a radical change like making homelessness illegal which, in order to pass the Charter test, would also require government to provide mandatory treatment until stable and then supported housing in some form.”
Agree for a number of reasons. (Which I’ve stated before.)
1.Costs much less than what we are spending right now.
2. We should be treating people with dignity and respect.
The Federal government is bankrupt for ideas.
Seems like many housing markets are experiencing the same upswing during the pandemic. Can’t last forever.
There is no reasonable route to an “opportunistic upgrade” currently imo – too risky to sell and try to rebuy in this market.
Barrister, you are in a different scenario as your wife is not Canadian and Europe is added in as a viable option and you are likely in the top .5% for net worth and no longer work. The vast majority in Canada have no other reasonable option but to maintain primary residence in Canada where they can work. With this limitation, Victoria remains desirable as a base due to climate, geography, and jobs – with winter travel to warmer spots as the realistic plan for many.
I am tired of the free for all homelessness and untreated mental health and drug addiction that is evident on downtown streets. I’m ready for a radical change like making homelessness illegal which, in order to pass the Charter test, would also require government to provide mandatory treatment until stable and then supported housing in some form.
Sadly, I have to agree that buying in the City of Victoria is rather questionable at this point. I am about to hear from all the city cheering section about how wonderful it is here in Victoria but it is getting to be a more questionable place to invest from my perspective.
The Colonist today is once again agog at the average house price.
I am going to muse that a large number of purchasers actually already reside in the area and are being opportunistic with a downsize or an upgrade.
Why? I think that if I was comtemplating a move into the area and the pricetag for a mouldering moss-roofed half-century-old bungalow was past a million I would raise my eyes slightly above the muddy yard to see what the local social order was like.
It would not escape my attention that local government seems very motivated to cripple traffic in the downtown area, make fashionable moves with statues, yet entirely ignores the ulceration spreading out from Beacon Hill and maintains the road surfaces using Mogadishu as a model.
Poor value.
This is interesting. Highest income people are spending less (less vacations and entertainment I imagine), while lowest income are spending more (govt transfers?).
Lots of economic surprises to come when this normalizes
Saw it myself at the Vancouver East Cultural Centre. At the time I was an aspiring homeowner priced out, as was much of audience I think. Little did any of us know we were on the verge of a historic bust. Ended up buying for under $100K.
Haha sorry you’ll need to force a refresh. CTRL-R should do it. Caching is the bane of my existence
Now that the median SFH price plot doesn’t fit into Y axis range, we can call house prices “off the charts”!
Leo. I am totally disappointed in your article. When I read the headline I thought it was about my wife.
Is it just me or are there lots of for rent signs on apartment buildings around town? A quick look at Devon Properties website reveals a lot more inventory especially compared to this time last year. Wonder how this will affect the value of all the homes with crappy mouldy suites in the basement.
Since it has passed by now, do you mind sharing what the property was?
With any luck, rates claw their way back to something crazy like, I don’t know, 5% around the time when my mortgage is paid off and I become a saver again 🙂
I think getting to 5% will be a challenge, though, given that we couldn’t even crack 2% in the 13 years between the ’08 financial crisis and today.
Still love this play. https://www.youtube.com/watch?v=P7XlM2T9svo
The shock and laughter that a single family home cost $180,000 in Vancouver. First couple minutes
We were unsuccessful today. Don’t know yet what the home sold for but we bid $210K over ask, no conditions. 16 offers I was told.
Still got the blues….
Wow, the Lake Hill area strikes again. Decided to watch mls 866944 listed at 899k… Sold for 1.1 mil. I think I will continue my time on the sidelines
Great time to sell for sure especially if a property has some flaws. In a slow market that matters but right now everything is moving
Great information and thank you for your work that must take up much of your time. I can say that my children are waiting for the market to level-off a little. They are both earning good amounts but have not been able to get a foothold in the market. The interest rates going up could slow things down and help build the inventory which can only help them. Could be I should have given up my savings to help them out but they wanted to go it alone and I respect them for that.
The over asks coming in pending today are just insane. Multiple places 200k over ask. Lots 100k over ask.
First!