What’s the outlook for condos?
In the same vein as last week’s post, let’s keep looking in the magic 8 ball of market forecasting, but this time we’ll turn our attention to the condo market. After all, with an average house at over $1.1 million, many have been looking at alternatives and in response the condo market has been clearly heating up since last fall with strong price gains in recent months. Back then was the better time to buy of course, but if you’re looking at the market now, does it still make sense to buy a condo for living or investment? Let’s take a look.
First we’ll do the same analysis on affordability as in the last article. Affordability arguably matters even more in the condo market, as those buyers tilt younger and are more dependent on income rather than other sources of wealth. The affordability picture (note a 5% down payment) looks like this.
Note that unlike for detached properties, condo affordability has stayed relatively constant over the long term. Payments on the average condo in the last 30 years have been between between 20% and 40% of the average household income, with a 30 year average of 30%. That should continue, since condo supply is far more elastic and can be created more or less without limit.
Factoring out the average, we can look at the relationship between prices and affordability for condos.
We have fewer years of data here than for detached houses, but for what we have it is much the same. When affordability is good prices rise quickly, and when it’s bad they stagnate or fall. On the face of it, affordability is not currently nearly as stretched as it is in the detached market. Despite recent price increases, low rates have kept affordability just a little worse than the historical average. Don’t expect massive returns, but the picture looks somewhat better than for houses.
Does the stress test still bite?
Back when the mortgage stress test was introduced, it immediately took nearly a quarter of buyers out of the market, making it clear that mortgage affordability matters a great deal in Victoria. However on the detached side the effect seems to have worn off starting mid 2019, with the market strengthening and then booming post-pandemic. Prices are also now rising quickly in the condo market, but it remains to be seen whether the stress test will keep increases more moderate, or if enough buyers have found ways around the qualification to sustain a similarly strong rally like we’ve seen in the detached market.
If we factor in the stress test rate (about to get bumped from 4.79% to 5.25%), then condo affordability should start to hit the ceiling soon as shown in the first chart. However I think there are enough people with ways around it that we will see prices run up some more before the condo market turns. The OSFI changes should throw some sand in those gears though.
Payments to rent
Another way to think about condo prices is using the mortgage payments to rent ratio. Given rentals and condos are close substitutes, when rents get closer to payments on the average condo you can expect more renters to jump into the ownership market and drive prices up (at the same time increasing rental vacancy rates). We know that it’s tough to make the case for a rental condo in Victoria on a cash flow basis. That’s been the case for decades and the vast majority of returns have come from capital appreciation. I believe there is some headroom for price gains in condos still, but the long term trend in interest rates will weigh on them just the same as for the detached market.
This ratio is not ringing any alarm bells about condo prices given current low rates and increasing rents. In the past prices have been much higher relative to rents. As before though, the stress test may throw a wrench in this analysis, since prospective buyers must qualify at higher monthly payments, and therefore cannot effectively take advantage of the low rates to make a jump from a rental to a condo.
Government action looms
With both the provincial and federal budgets expected this month, pressure has been mounting for the government to do something to slow down the housing market. While the OSFI stress test bump may cut buying power by 5% for uninsured borrowers (down payment over 20%), there seems to be widespread agreement that this isn’t enough to take down our market. However I don’t expect anything of great consequence in terms of additional government measures either. In a recent interview, MP Adam Vaughan, the Parliamentary Secretary for housing, made it clear that even a 10% decline in prices (after a 25% national increase in the last year) was an unacceptable outcome. He took to Twitter afterwards to double down on that stance, stating that protecting homeowners’ equity was paramount, declining prices would lead to contagion, hurt property tax revenue, and be a disaster for cities. None of that makes much sense, but it provides an insight into the government’s priorities on housing: protect equity at all costs.
The government seems to firmly believe that they are doing their job on supply, and the focus of upcoming measures, if any, will be on curbing the financialization of housing, foreign investment, and handing out more credit to first time buyers. Given we already have a foreign buyers tax that has taken out 70% of that activity since 2018, and a vacancy tax which has kept most people from keeping properties vacant, I doubt that any federal actions will make much difference on that front.
In the end perhaps it’s better that way. With some signs of slowing activity, it may turn out that consumer sentiment is fading on its own. If the original stress test taught us anything, it’s that even stringent government demand measures cannot stop a real estate cycle. You just have to wait for buyers to get tired of housing on their own. However if you’re about to jump in, it may make some sense to see what the governments have planned later this month.
Also the weekly numbers courtesy of the VREB:
| April 2021 |
Apr
2020
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 111 | 327 | 287 | ||
| New Listings | 176 | 499 | 667 | ||
| Active Listings | 1357 | 1416 | 2305 | ||
| Sales to New Listings | 63% | 65% | 43% | ||
| Sales YoY Change | +208% | +343% | |||
| Months of Inventory | 8.0 | ||||
The year over year comparisons in the media about April will be comical. What’s ironic is that it may very well be the month where the market back off from the frantic pace we’ve been on. There are more murmurs of fewer offers in the bidding wars for detached properties, both here and in markets across the country. Make no mistake it’s still an incredibly active sellers market out there with 56% of houses going for over ask last week, and 36% of condos, but there are some hints of a slowdown. The gap between new listings and sales has continued to open up, and for the first time we are starting to build a little bit of inventory.
New post: https://househuntvictoria.ca/2021/04/19/do-bidding-wars-work/
Patriots, that is why government needs to crack down on tax evasion. If I wanted to keep my home empty and get around the spec tax. I would have my friend or family them pay me 1k a month in rent and then make them whole after while leaving the place empty. Between that and plain undeclared rental income, there are lots of taxes being evaded.
Good point. And I see that Vancouver is planning to increase their vacancy tax to 3% for 2021 https://vancouver.ca/news-calendar/empty-homes-tax-rate-to-increase-to-3-for-2021-tax-year.aspx
So a foreign owner with a vacant home in CoV will pay 3% (Vancouver) + 2% (BC) + 1% (Canada) = 6%.
$60,000 additional tax per year on a $1m condo. Absurd.
A tip for a foreigner or anyone wanting to occupy a second (or third) home in Vancouver, completely tax free….. Rent!
Vancouver does not have a foreign buyer tax. It’s a vacancy tax which is the same for any owner.
It should be interesting to hear legal opinions and the US response after the Feds announce a foreign buyer tax. I would expect the US to challenge a Canada foreign buyer tax, under the USMCA (new NAFTA).
The NAFTA & USMCA agreements state that a country must treat other countries citizens and businesses the same way as its own, in many areas, including real estate. Canada must treat American and Mexican investors the same as Canadians. There are limited exceptions carved out in the agreements, such as for a small region of Mexico real estate.
The US didn’t challenge the BC foreign buyer or vacancy tax. But BC isn’t a party to the NAFTA/USMCA so it would be harder for them to challenge it. But the federal government is a party to the agreement. And the US typically doesn’t wait for a decision before “retaliating” to hurt Canada, so perhaps we’ll see something against the “snowbirds.”
Our finance minister is a family therapist? It will be interesting to see the deficit budget.
https://www.timescolonist.com/b-c-finance-minister-to-table-historic-pandemic-challenged-deficit-budget-1.24308611
Well is it tax evasion which is a criminal offense for all parties involved. Also they would have to declare the “rent” as income. I think that most of the foreign deep pockets will just pay the tax.
So the national vacant tax will be on top of the BC vacant tax? I think there are far too many loopholes, there is nothing stopping from a foreign owner to “rent” out their place to a friend or relative willing to sign a form, whether or not someone actually lives there is another story.
“With the country’s housing market booming, the government is proposing to tax vacant residential property owned by non-resident, non-Canadian owners from Jan. 1, 2022, sources said.”
https://www.ctvnews.ca/politics/canada-s-budget-to-include-digital-and-luxury-levies-but-no-wealth-tax-reuters-sources-1.5392475
In other words a big fat zero impact for the BC market.
I think managing an organization that size is a ton of work. You might think you want that job but in reality it’s rough.
“so we have a 400k +/year position where you can’t do anything other then tweet nonsense ”
I think that’s the nature of a public sector job, you can be the CEO but are still handcuffed by politics at the end of the day. ICBC is a good example, the main reason they were almost bankrupt is mainly because government policy forced them to go that direction, now that policy has changed they are doing better. BC Hydro’s Site C is another example that was conceived during the Christy Clark era, their former CEO was plucked directly from government though so she may have been underqualified from a technical perspective to run a large complex hydro company. End of the day I think this is more of a government agenda issue and less of a individual competence issue.
That’s putting it politely. They were taking out contracts that were betting on market direction. As we all know the market took a dive this time last year but stocks are back to all time highs. But the money they lost is gone for good.
https://www.theglobeandmail.com/business/article-alberta-pension-manager-loses-4-billion-on-investment-bet-gone-wrong/
Haha thanks Marko. I don’t think I know anything particularly unique that lots of other people don’t also know, but you spend enough time thinking about it and some ideas inevitably rise through the muck to the surface. And I think you’re right Youtube wouldn’t really fly. If there’s one thing I’ve learned in the last 10 years it’s to be humble about real estate predictions, and people like certainty. I mean look at Garth’s audience.
I liked Siddall but gotta say the last year was pretty odd. First the questionable prediction that his own economists were scratching their heads at. No issue with making bad predictions I’ve made plenty myself, but it was certainly weird to go on a twitter crusade against anyone that doubted it instead of just owning it and moving on. Ohwell, we’ll see how the new boss does.
I think CMHC should be refocused towards new housing. Post-war they were out there getting housing built for people, but in the last few decades they’ve mostly been goosing the resale market and recently building some rentals but doing absolutely nothing to build for the ownership market.
You have real CEOs that actually get things done like Elon Musk. Like him or not as person I have a 6 yrs old Tesla in my parking spot with 200,000 km that drives like brand new and almost no maintenance/no gas. That is something concrete to me.
Then you have all the BS CEOs like Siddall. What did he do that was so important at Goldman Sachs other than “well qualify” himself for CMHC where he twitted some ridiculous crap to “well qualify” himself for another 7 figure large institutional job.
What exactly changed at CMHC? Right, he didn’t have the autonomy to do anything so we have a 400k +/year position where you can’t do anything other then tweet nonsense trying to defend the 9-18% drop report instead of just saying hey we were wrong with our forecast let’s move on.
“Oh, for the $250,000 he would have had to learn how to walk in a straight line while carrying a heavy stick.”
ahhh out comes the internet arm chair CEOS lol.
Here is his interview with BNN from May 2019, he knows a lot more than that adam Vaughn and he knows what the issues are regarding housing. No one gets predictions right all the time, I don’t recall anyone predicting the bull run in the housing market when the pandemic began.
https://www.youtube.com/watch?v=s0lYufZOtyM
He apparently didn’t seek another term at CMHC so sounds like it was his choice (probably got fed up dealing with political pressures on keeping house prices up). AMICO has their own board (they just lost couple billion on some trades going the wrong way due to COVID) so without knowing any additional details I have to assume they picked him to be the CEO based on merit. He served as managing director at both Goldman Sachs and Lazard, two elite investment banks on wall street so it’s not like he never cut his teeth in the private sector.
Siddall could have been even better rewarded. He could just have asked some advice as to how to steal a woodchipper and a truckload of whisky and get caught. Then he could have made $250,000 for a year while sitting at home eating Cheetos and being “investigated” by his stern and moral peers.
Oh, for the $250,000 he would have had to learn how to walk in a straight line while carrying a heavy stick.
Uneasy lies the head……
Like bounced from one large institutional position to another? So CMHC releases report that the market will correct 9 to 18%, market does complete opposite and he gets a promotion to a 7 figure job……makes sense. Anyone with any common sense including Leo questioned the report the minute it came out.
I think in a real estate debate Leo would expose a lot of these high level officials as completely clueless.
Problem is you can’t do **** to get rid of them. I put in a FOI request to BC Housing to see how 5 years of the owner builder exam has changed anything and I don’t get a reply. Executive who brought in the 100% waste of a policy would be considered “well qualified.”
” Leo should be in a 500k/yr job somewhere imo.”
Leo, send your resume to BCI/Quadreal, your pension will transfer over too. I think Siddall is well qualified (he probably didn’t have the autonomy to do things the way he really wanted to while at CMHC), he is actually the new incoming CEO for AIMCO which is Alberta’s equivalent of BCI so he is in the 7 figure club now.
It has to be the best interview I’ve ever seen on real estate whether it be BNN/Youtube/whatever. Problem is Leo tells it straight up like it is, which is not interesting to the average viewer. I also think the average viewer just isn’t really smart enough to absorb and digest what Leo has to say. They can listen it, but they won’t comprehend the big picture concepts.
Just depressing the idiots we have running BC Housing/CHMC, etc….Siddall is pulling in over 400k and compared to Leo has no clue when it comes to a lot of concepts. A lot of these people in extremely high positions somehow have no common sense, and then we have Leo doing better anaylsis for free, how does that make sense? Leo should be in a 500k/yr job somewhere imo.
We need more Leos running these organizations, but I think Leos YouTube channel would be a flop 🙂 People want to watch fishing in a bikini not Leos 110% bang on real estate analysis.
Probably not. Never really liked videos because it’s very hard to really reference the info later. I’m more interested in eventually trying to summarize everything I’ve learned about real estate in one place then supplement that with a dashboard that gives the key up to date info without the noise. I think that would be of more use to people. Whether I’ll ever get to it is another matter.
Sounds great. Get on it, Leo 🙂
Leo – just checked your YouTube video and despite being the most recent video on formafists interviews you have the highest view count – higher than bill Ferguson and Steve Saretsky. Pretty impressive – any chance we see Leo with his own channel in the future?
I think it would be neat to have a better system to rank cities that uses your own inputs.
Like you drag some sliders around “How much do you hate winter”
Do you want to own or rent, how much money do you have?
What kind of outdoor activities do you like?
What industry do you work in?
etc
and it generates your personalized top ten list. Maybe with some tradeoffs. Like this place has a milder climate, but in this place you’ll have an extra $300/month.
Do they have their own secret hospital? Is there something in the water that makes residents more healthy than in Colwood? Do tell.
OMG! Things really got out of hand here. More than double in 4 years after some hipsters throw in a new floor, kitchen cabinets, and solar panels.
Severe flood damages nine floors of luxury Vancouver condo tower
It is anticipated many residents affected by the flooding will need to move out of the building for months to allow for major repairs.
https://dailyhive.com/vancouver/vancouver-house-flooding-damage
Well that should say it all really. Move to Langford with 22 of your closest friends to work at home. I mean you could move to Victoria but maybe friend #20 will have to borrow the neighbours wifi
Victoria falling behind…. Langford takes the lead!
https://www.vicnews.com/news/macleans-magazine-ranks-langford-best-community-in-b-c/
$886k
What did 2936 Pickford Rd sell for?
Risk of blood clot from:
• J&J vaccine: 1 in 1,000,000
• AZ vaccine: 1 in 250,000
• COVID itself: 1 in 5 (or thereabouts)
https://www.forbes.com/sites/leahrosenbaum/2021/04/13/heres-what-scientists-know-about-covid-19-vaccine-blood-clots-and-how-the-risks-can-be-diminished/?sh=77f7eea51c4a
Missed that one.
Thanks!
Patrick, looks like the majority of south island cases are in core victoria.
We are 🙂 https://househuntvictoria.ca/2021/01/25/borrowing-from-the-future/
You’re right though, very little talk about this in general. Recency bias is leading people astray I think.
So Leo, now that we’ve absolutely blown through the pent up demand, why aren’t we talking about the opposite?
That’s a cool site alexandracdn. Thanks for posting! https://health-infobase.canada.ca/covid-19/vaccination-coverage/
Wish they had more fine grained ages than 18-69 but better than nothing
For overall Covid 19 information, I have found this to be the best site: GOOGLE:
GOVERNMENT OF CANADA, COVID-19 VACCINATION IN CANADA
Updates everyday for vaccines administered. Todays: 9,428,664 people have had at least one vaccination.
Yesterday (15Apr), 306,442 doses were given.
Lots of breakdown on this site:
Key Updates
National Vaccine coverage,
Key populations
Coverage by age, sex, provinces
Coverage by vaccine product including AZ,
Hope this is helpful
$1.9M
I got the AZ vaxx on Wednesday, pharmacist said they were only 80% booked. Lots scared off by news, I guess. Most interesting comparison I found for 1 in a million chance of dying – driving 250 miles!!! Another client made the astute observation that we will be getting our second shot pretty soon if AZ phobia continues – yay!
2128 Neil listed for $1.9MM – Could I get a selling price please?
I was referring to the “age based” program. The “age based” program (mostly Pfizer/Moderna) is separate from the ”priority” group (mainly planned as AstraZeneca) . Dr. Henry always refers to them separately. For example, when they stopped Astrazenica for under 55, that stopped the vaccinations for the younger age (<55) workers and the age based program continued unaffected. Anyway, I don’t think they’re vaccinating 63 year olds today in the age based program (Pfizer) as shown in green on your graph, I think they’re working around age 70 and age 63 is about 2 weeks away. The AstraZeneca vaccine is available much faster than that, for age 55-65 who want it, the Victoria pharmacies are giving it within a week of asking for it.
Kelowna sees a real estate gold rush: With an influx of money from Toronto, Vancouver and Alberta, there’s a ‘dog fight’ for premium land
Well we know that’s the case. 55-65 is getting AZ and younger essential workers have already been vaxxed
That makes sense, but based on 2 data points from Victoria friends who just got their appointments, I think age 63 is getting their jabs around May 1-3. But who knows, and maybe their “age based” program is not doing it strictly by age.
Right. Ontario sharing the postal code COVID infection/vaccination data has allowed investigative journalists to look at the data and point out inequities which then puts pressure on the government to fix them, which is great. Example from Ontario, which publishes vaccination rates and covid rates by postal code. https://globalnews.ca/news/7741950/covid-toronto-vaccines-cases-ices-postal-code-data/
We should have this data published for BC. And not just the “dashboard” which they haven’t improved significantly since the start of the pandemic.
BC has done a terrible job on the data front no argument there.
Should we be concerned that a senior economist at BMO doesn’t know what housing supply is? New listings are not supply. Most of them are owners listing to buy a different home which is net zero.
If you’re going to use anything to measure supply it would obviously be active inventory which is extremely low across Canada.
Valid to point out that demand has spiked, but noticed that the decrease in inventory was a trend well before the pandemic. Pandemic accelerated it, but wasn’t the cause per se.
Still mystified why everyone wants to pick sides on the supply/demand argument. It’s never one, it’s always both.
Yes, because our government and health authorities share so little information with us. Not only what ages are currently being vaccinated but how about where are the Covid cases occurring in BC?
Ontario posts Covid data by postal code and a Dr. on CBC said a few days ago that 90% of COVID cases are occurring in 10% of postal codes. Now isn’t that important information for the public to know, and they should… uhh… avoid going to those postal codes? And those in those COVID hotspots can be extra careful with grocery store trips etc. Also, the Dr. then recommended that they vaccinate everyone in those postal codes, and it looks like they’re doing that.
My point is that it isn’t “silly” for the government to share data about COVID, using the assumption that the public are idiots and won’t know what to do with the data.
For example, where are the COVID cases occurring in Victoria? The government knows, by postal code. Maybe 90% are occurring in 10% of the postal codes, or maybe it’s spread evenly.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-canadian-housing-market-low-supply-is-not-the-problem/
https://twitter.com/SBarlow_ROB/status/1383020327463223297
I just made it based on the model of strictly oldest first. 1.2M doses administered subtract out 90k second doses and we get 1.1M people with one dose. Count down from the top of the age distribution and you get to age 63.
BUT. Rollout isn’t strictly age based, some essential workers have been vaccinated and some 55-65s have been vaccinated with AZ.
On the other hand vaccine uptake isn’t 100% either.
It’s a model, not reality.
Yeah I thought about turning this into a simple webapp but the provisos above make it probably not likely to be that accurate.
I would recommend following Trevor Tombe on twitter. He has automated daily tweets including projections of when all adults may get first doses by province based on current pace.
Leo,
Very nice vaccine chart. The “green” ages start at age 63. Does that mean the current age they are doing is age 63? I thought that was “top secret” information, at least I haven’t seen the government share such a simple data point as that with the public. Where did you find that?
Also, using the same data in that chart, you could make another chart, presenting the data in a different way
“Approximate date of vaccination based on vaccine/day”….. for X axis: age, Y axis: vaccine date to
show the data based on 30k/day. And of course everyone understands it would be different depending on supply. But you could also have a line at 20k/day and 40k/day, so that people could see how much their vaccine date changes based on vaccine supply.
On the vaccine scheduling topic, given the full reliance on vaccines actually arriving, it seems silly to give people a firm estimate for bookings when the provincial government has almost no control over how much they will get and whether they can hit that target.
Here is the current state, if it was all age based rollout. Because some younger people have been vaccinated this is somewhat optimistic on the age front. Of course in the future that means certain ages will go faster. No point worrying about when it’s your turn, just register and you can forget about it until you get notified to book.
Fair point. It’s a different method but still uses past sale information in different ways. “To mitigate volatility, a moving three-year sample period is used, since the use of a shorter sample horizon may result in an insufficient number of sales over the period and cause index inaccuracies.”. I’m no mathematician so I won’t pretend to understand the full methodology. https://www.crea.ca/wp-content/uploads/2016/07/HPI_Methodology.pdf
They definitely have a method to remove outliers, and perhaps it is happening more these days. “results are filtered to include records with values above 2.5% and below 97.5% of cumulative Normal distributions; other results are treated as outliers and automatically removed”
The benchmark is not a repeat sale index. That is, past sale prices are not used, only current ones.
https://www.rebgv.org/news-archive/mls-home-price-index-explained.html
Thanks Leo. I realize I didn’t articulate the question very clearly, but it seemed to me like benchmarks were below the crazy reality of the market right now and I wasn’t quite sure how to reconcile this.
Yes, but politicians’ willingness to reduce home prices will change when demographics change. That 60% homeowners is shrinking – by the time Zoomers are getting into politics (30 years?) what will the % of homeowners be? in 60 years?
I’m not actually saying those historical trendlines are necessarily predictive of where we will go in the future. They are just what has emerged from several real estate cycles. That’s how the market has behaved in the past over several decades. It’s no guarantee that it will behave the same in the future, but if I’m going to take a bet on it’s different now or it’s a continuation of the multi-decade trend I’ll bet on the trend.
I think our current runup in prices still fits within our normal trends.
Ownership rate is important. If we let affordability deteriorate then we could end up at say 50% ownership rate and ownership affordability for the average Canadian would be a lot worse. That would be an epic policy failure in my view.
Looks like this place on Kenmore had a price drop
https://www.realtor.ca/real-estate/23076321/1635-kenmore-rd-saanich-gordon-head
Didn’t a way crappier house on Kenmore on a smaller lot sell for more than $1.3M like couple weeks ago?
Normally pretty reliable, but for some odd reason it seems to have been lagging the market in the last year. I talked about it in a recent article, that by my estimation single family prices are up 20-30% but benchmark says 10%. Doesn’t make a lot of sense. One thought I had is that it’s a repeat sale index that rejects outliers (to avoid counting a renovated flip as a measure of the market). During the market mania it may be rejecting more sales as outliers when they actually aren’t.
Are 2021 Canadian home prices unaffordable, unsustainable, and near the top of a cyclic (mortgage/income) % affordability index that means they will start heading down soon?
Maybe not.
The main metric measuring the affordability crisis discussed on this site is mortgage payment as “% of income”. It’s very high for Canada at about 50%. (Higher numbers are more unaffordable.)
But when you look at the rest of the world, you see that Canada (in 2021,) is # 16 BEST affordable using that metric out of 109 countries. Most (80%) other countries are worse affordability than Canada (i.e. higher than 50%) such as UK 65%, France 78%, Japan 85%, Israel 98%, Croatia 103%, Argentina 900% (!) etc.
The best affordable country by far is the USA, with 29% mortgage/income. That’s one reason USA is #1 destination country for emigrants.
The points being,
1. some people here present the housing affordability metric as cyclic , with upper and lower bounds. But what if it isn’t, and Canada is becoming like the rest of the countries in the world, that have even more unaffordable housing than Canada. Maybe we are not at the “top of the cycle” and instead are “catching up” – on our way to be like the UK or France with 70% mortgage/income ratios.
2. The cost to buy Canadian homes that many call “unsustainable” may be sustainable, and get much higher, as they are in 2021 in 80% of countries with higher mortgage/income ratios than Canada.
Source : https://www.numbeo.com/property-investment/rankings_by_country.jsp
Click on “mortgage as a % of income” to sort. Lowest number is most affordable. Click on other columns too (e.g, price/income) and you’ll see similar results, with Canada near the best affordability, even using 2021 prices.
I am keeping an eye out on the housing market for a friend in Toronto. The prices seem to have leap upwards in an almost insane amount. I know that I am old and out of touch but I am comparing it to prices a little over a year ago before Covid.
What was the asking price?
That jump seems very sustainable.
Even that pack of raving lefties, the federal NDP, can’t bring themselves to say that prices should go down. Their housing platform is almost entirely made up of commitments to build more affordable rentals. They even advocate measures that would make prices higher! And note below they are confusing term with amortization (I hope).
https://www.ndp.ca/affordability
The slump in purpose built rental construction is primarily due to high prices in the condo market relative to market rents. A developer pays the same price for the inputs to either one, but gets more money back with lower risk by selling condos.
Indeed.
$1.111M
I can’t imagine the Liberals or the Conservatives ever announcing that they support a a decline in home prices. It’s always framed as “cooling” or “stabilizing” which current homeowners can take to mean “prices will still increase but slower.”
There’s not really any incentive for them to do so either. 60+% of Canadians own a home and the vast majority aren’t so altruistic that they want their home value to decrease solely for the betterment of society. The non-homeowners aren’t a contiguous voting block, and many happily vote for parties that fully intend to keep home prices as they are.
What did 309 Whimbrel go for? Tx!
The 10% decline that our government is hell bent on preventing
“$2.7M”
Whoa…for 1 bed 2 bath (BCA)
Also, thanks for sharing this type of info Leo. I find many realtors are hesitant to do so and it’s much appreciated by those that don’t have access (other than every January 1st of course).
I’m sure ol Stu isn’t surprised by the selling price based on his quote in this story
https://vancouverisland.ctvnews.ca/langford-ranked-best-community-in-b-c-by-maclean-s-magazine-1.5388927
It probably has far less to do with people’s thoughts and a lot more to do with a decades-long slump in rental construction, if you ask me.
Certainly for correctness the sale price registered with BC Assessment should be the price for the actual property, not the price + fees like now.
‘
‘
Are you talking about the public information for sale prices on the BC Assessment Public Site, as this doesn’t include any sales costs. I have also seen several mistakes on that site , I have seen 2 new homes sold and one had the GST included in the sold price and the other home didn’t have the GST included even thought it was charaged.
It’s commoditization and the view that one’s home is a financial asset that have put the basic necessity of a home out of reach for many.
B.C. puts $2B toward low-interest loans for builders of affordable housing
https://vancouverisland.ctvnews.ca/b-c-puts-2b-toward-low-interest-loans-for-builders-of-affordable-housing-1.5389296
“For far too long, housing in British Columbia was viewed as a commodity and a tool for building wealth, rather than a basic necessity of a home”
Actually, it’s both.
Patrick, the schedule for vaccines by age group in BC is here:
https://www2.gov.bc.ca/gov/content/covid-19/vaccine/plan
Scroll down to Phases 3 and 4 to see where we are now, and who will be eligible in the next 2 months.
Good to see, I guess.
But note that RE prices did go down before this current run-up.
@introvert, if this is possible, housing in victoria might actually go down:
https://twitter.com/T_FisherKing/status/1382780755462397956
Seems like the benchmark price of homes in GV this year has increased from 932k in January to 968k in March or plus 3.9% in three months and up 10% yoy. How reliable are the benchmarks for SFHs? Is there a better measure?
As Marko indicated, most people assume higher realtor fee as being better service. I don’t think people realize how important the market they are selling into is and over attributes the outcome to the actual skill of the realtor.
I actually talk to people?
Granola moms . Same people that use crystals for teething.
$2.7M
Right, sloppy wording on my part. Unbundle it from the price to be transparent. Certainly for correctness the sale price registered with BC Assessment should be the price for the actual property, not the price + fees like now.
If transaction costs were publicly viewable people would notice that while most houses sell with a $30K fee, a few sell with only a $15K fee.
I don’t think it would take long for folks to ask themselves how necessary that extra $15K is and make arrangements accordingly.
When the fees for every transaction are on your screen, staring you in the face, people will be more likely to price-shop, IMO.
Agreed. As I outlined earlier, I just can’t see how the pandemic will end soon:
https://househuntvictoria.ca/2021/04/12/whats-the-outlook-for-condos/#comment-78670
The law that forces the cruise ships to stop outside the US is a ridiculous one but also very unlikely to be repealed. Also on Victoria’s side – the cruise ships like to offload their waste here 🙂
I found that getting a vaccination appointment was the smoothest ever. Somebody should share this process with other government offices and the cell phone companies.
For the vaccine registration and appointment I called: 1-833-838-2323. Initially it says how to go on-line and register…but I just hung on and after a minute or so, I got a real person. They registered and gave me the appointment at the same time. They followed up with a confirmation number and details with a text to my cell immediately. The appointment for the inoculation was scheduled for 8 days after the phone call. Everything went smoothly.
I don’t know whether this procedure still works but you could try it once your age group is eligible for registration. If one spouse is older, the younger one can register and get their appointment at the same time.
Anyone know what 1181 Goldstream Ave sold for? Saw the coming soon sign a few weeks ago but never saw it on MLS and now it’s sold
How do you know?
Yes.
Canadian home prices hit record highs in March, reaching ‘uncharted territory’
As usual, the bank economist is talking about the Toronto area bubble of that decade. That was followed by the largest RE bust (in terms of market cap) in post-war Canadian history.
Note that this price explosion has taken place at the same time that Canada’s population growth rate has dropped to the lowest level seen in decades.
https://www.theglobeandmail.com/business/article-canadian-home-prices-hits-record-in-march-reaching-unchartered/
It’s funny that all the greenies yelling about “believe science” w/r to the oil sands, don’t actually vaccinate their children.
It’s still months apart though yes?
It seems as though more money actually leaves Canada through tourism than they actually make through it, considering how busy campsites and vacation rentals have been within the province since covid. All provincial campsites are BC first, and are still booked solid.
They do here too, since the money comes from the buyer in any case. There are issues of transparency and negotiability of course. Similar to the issue of bundling the VAT/GST in the purchase price (like Germany), or adding it on at the till (like Canada).
This would be why you don’t play with a vaccine dosage schedule.
Ontario gives you the dates for both shots when you register. Obviously the ability to register has to be restricted by age for this to work.
Right, but read how vague and non-informative the BC government “news” tweets are…
https://twitter.com/BCGovNews?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Eauthor
“We’ve seen some questions about the timing of your vaccine appointment after you register. There can be a wait time between when you register and when you’re invited to book your appointment. Wait times vary depending on your age, vaccine supply, and where you live.”
//==//=/=//
Why not tell us something like “we are mainly working through the 65-70 cohorts and expect to be done that in 5 days, and we will move to the 60-64”.
Manitoba has a simple page where you enter your age and they show you who is ahead of you in line. You can click on a cohort ahead of you to see how many are in it left to vaccinate and how fast the line is moving. Bravo!
https://www.gov.mb.ca/covid19/vaccine/queue-calculator.html
Anyone can register at any time. The only reason they didn’t tell everyone to register is so the system wouldn’t crash. The whole point of this system is that you don’t have to keep up to date on whether it’s your turn. Everyone should register and when it’s your turn they will contact you. That’s the point of computers.
Dates eligible for registering online for Covid vaccination in BC.
Thur April 8 – Born 1956 or earlier (65+)
Sat April 10 – Born 1961 or earlier (60+)
Mon, April 12 – Born 1966 or earlier (55+)
• Wed, April 14 – Born 1971 or earlier (50+)
• Fri, April 16 – Born 1976 or earlier (45+)
• Mon, April 19 – Born 1981 or earlier (40+)
=======
People I’ve talked to assumed that when they are registering, this is good news in that the vaccination appointment will soon follow. I don’t believe this to be the case, and I haven’t seen any basic information as to the schedule of when these 5-year cohort age groups will get vaccinated.
BC is vaccinating about 30k per day, and each 5 year cohort is about 300k people. So a rough estimate is that each 5 year cohort will take about a week (assuming 70% compliance) . But you can see from above that the registrations are going way faster than that, with 6 cohorts added for registration over 11 days. So the 40+ cohort is likely 5-6 weeks away from vaccination, yet they are able to register in a few days.
The government needs to be transparent and let people know the anticipated schedule for each cohort to get vaccinated, and not get their hopes up with being merely “eligible for registration”. For example, today in BC they are vaccinating some certain age group… well what is it, and when do they expect to get to the next cohort?
“The blind-auction process, the lack of real-time sales data in the public domain and the poor transparency concerning fees to enter and exit real estate all clearly exacerbate the housing affordability crisis.”
I’m 100% for more transparency in real estate, but I don’t think it’ll make a damn bit a difference to prices. It will make the system somewhat more efficient in that the risk of paying outside of market value is reduced. It may also lead to a bit more business for lower cost options if it’s more of a front and centre issue.
In Germany the buyers pay the fee. Doesn’t seem to have made a damn bit of difference to fees which seem to average around 5-6%. Funnily enough they just passed a law that mandates the seller pays at least 50% of those fees going forward.
Very difficult to argue against this partial solution to home price increases — publish transaction fees on the house listing page on realtor.ca so buyers see exactly what they are paying.
https://financialpost.com/opinion/opinion-real-estates-dirty-little-secret-inflated-fees
Edit: Looks like up and coming just posted the same article at the same time. What a coinkidynk. It must be getting around this morning.
Also any thoughts on whether opening up the transparency in real estate would help affordability? I think it’s a start, I’ve never understood all the information being withheld, much like used car sales tactics where information is power.
https://apple.news/AEx7-mP76QkeKmTeq7onnsw
“ That said in the city of Victoria I think some that disappeared will not return due to the STVR bylaw making it not that economic to run a legal AirBnB and impossible for most places outside the grandfathered buildings.”
Thanks for the link Leo. I agree COV council has made it difficult to run a legal Air BnB as that’s important to their Together Victoria political base which is unfortunate, but I hope it makes a return as it fills a need when our limited hotel capacity is at its max. Just sitting here wondering if it’s a worth while investment opportunity.
“ A citizen reads that there is a 1 in 1,000,000 chance of getting a blood clot from Astrozeneca.”
There’s a 1 in 1000 chance of getting a natural blood clot so I really don’t know what all the fuss is about – just get the vaccine.
I just heard on the radio that 10 people in Manitoba have died after receiving the first vaccine and no one has died after receiving the second dose. Let me clarify, these people died of covid, NOT the vaccine. I’m not anti-vaccine but I am wary about its effectiveness to protect everyone from the virus. It seems to have reduced the death rate, for now, and decreased the seriousness of illness. We also have no idea how long the vaccine effectiveness will last. I believe vulnerable people are still at risk even after vaccination, this isn’t going to end soon.
Regarding vaccines, a disturbing scenario is emerging that vaccinated people may be contributing to the development of more dangerous variants. It depends on an individual’s response to the vaccine, those having a mediocre response are the ones enabling the virus to mutate. I tried adding part of an article by the AMA, I hope it works.
Yes, because the “impact” was felt elsewhere… namely the $400 billion deficit (mainly borrowed from foreigners) and spent by the government on CEWS wage subsidies, CERB etc. And we are still not “out of the woods” (“COVID” third wave).
If you use numbers posted here today ,
– 34 year olds homeownership rate of 42%. https://househuntvictoria.ca/2021/04/12/whats-the-outlook-for-condos/#comment-78732
– 24 year old home ownership rate of 15% https://househuntvictoria.ca/2021/04/12/whats-the-outlook-for-condos/#comment-78744
– Then the home-grown Canadian home ownership gains from ten years 24 to 34 = 42-15= 27%
– But that’s less than the 32% gain, from 0% to 32% ownership in ten years of “newcomers” (immigrants) reported by Royal LePage. https://www.cbc.ca/news/canada/toronto/royal-lepage-newcomer-survey-2019-homeownership-rate-real-estate-1.5322197
Surprising how little impact a complete collapse in tourism had on Victoria actually. +2% on the unemployment rate.
I don’t run an AirBnB but looked at the data a couple months back and wrote an article on it: https://www.capitaldaily.ca/news/victoria-airbnbs-disappearing-covid-rentals
I think they will bounce back by next summer. That said in the city of Victoria I think some that disappeared will not return due to the STVR bylaw making it not that economic to run a legal AirBnB and impossible for most places outside the grandfathered buildings.
I’ll update the activity numbers in a couple months to see where we are in terms of bookings. I think the ones that are left are pretty busy because of local tourists booking over the summer. Biggest risk for anyone acquiring one is that other munis are likely to start implementing AirBnB restrictions at some point as well so it’s a business with a target on its back.
I don’t see there being any way that Alaska is able to bypass the Jones Act. The US maritime industry has huge lobbying power and would be up in arms over this. If they allow non-US flagged ships to sail directly from the US west coast to Alaska, that would open up foreigner flagged vessels to compete on those routes for cargo.
In the Georgia Strait there is a constant flow of tug boats and cargo hauling freight back forth between Alaska. Canadian tug boat companies would love to compete on that route.
Also the article stated Alaska is only looking for a temporary exemption from the Jones Act, while Canada bans cruise ships.
California with a population of almost 40 million people had 2487 new covid cases yesterday. BC with a population of 5 million people had 1168 cases yesterday.
Wow, those vaccination levels are scary. I had assumed we were somewhere in the 80s. 50%-ish is pathetic.
Stroller, as a person whom has actually had a blood clot I reserve the right to choose which vaccine I want to take and will judge you the same way you have indirectly judged me. I’d be more blunt but hey, I wouldn’t wanna be a COMPLETE DICK now would I? https://www.ctvnews.ca/health/coronavirus/in-world-first-denmark-ditches-astrazeneca-s-covid-19-shot-1.5386867
FYI though despite the responses here we are ground zero for anti-vaxxers. https://www.capitaldaily.ca/news/vaccination-immunization-victoria-vancouver-island-disease
One of the most depressing things about getting older is the lavish proof that literacy does not defeat idiocy:
A citizen reads that there is a 1 in 1,000,000 chance of getting a blood clot from Astrozeneca. Citizen declares he is no fool and will not risk his life with such a foul creation.
Citizen waits for a nicer vaccine and receives it.
Citizen rewards himself for possessing such a finely-crafted intellect by booking a trip to Maui.
Chance of getting a blood clot on the flight? 1 in 800,000. And will be, every time he flies more than 4 hours for the rest of his thick-as-two-short-planks existence.
Long term no doubt. I think we have to separate housing affordability vs single family house affordability. A single family house in a city with limited land will get more expensive over time with a growing population.
You also gotta compare apples to apples. As the city grows you are getting different things. A city lot in a city of 100k people with very few other housing types is very different than a city lot in a city of 600k with most people living in apartments or row houses. As cities continue to grow the single family lot becomes more and more rare.
Of course none of that precludes prices from falling in the short or medium term or affordability of a single family house improving in that time frame as they have done many times before in Victoria. This is more like a 15 year + trend beyond the single housing cycle.
About 15% as of 2006 census for most recent cohort. 30-34 about 58%. https://www150.statcan.gc.ca/n1/en/pub/11f0019m/11f0019m2010325-eng.pdf?st=TfDVbJZi
Maybe they are asking both an unreasonable price and an unreasonable rent and will go for the first taker 🙂
There was a lot of this around the peak of the US market in 2006. I’ve given up making hard conclusions though.
https://www.oakbaynews.com/community/live-episode-of-saanich-podcast-focuses-on-regions-housing-issues/
Live podcast tonight from former Saanich councillor :
At 7 p.m. on Wednesday, listeners are invited to tune in for free on Zoom to hear Murdock, Saanich Coun. Rebecca Mersereau, Julian West of Urban Thrive Developments, Christine Lintott of Christine Lintott Architects and Matt Dell, president of the South Jubilee Neighbourhood Association, discuss infill developments and “missing middle” housing.
The 300k immigrants are being compared to Canadian population (38m) , so the % is valid (assuming the household size of immigrant families is the same as Canadian families)
High home-price cities don’t scare immigrants away. Main destinations for immigrants are Vancouver, Toronto and Montreal. This makes it even more impressive that they acquire 32% home ownership in the first 10 years (compared to Canadians in general who are buying in lower price cities too). By population we’d expect about 3,000 immigrants to come to Victoria, but since they like the big cities, we likely get less, maybe 2,000?
I highly advise everyone to get either the Moderna or Pfizer vaccine because they are in my stock portfolio. :p. But seriously; looking forward to getting either one. We need to get this shit past us and fast. My dad lives in the lower mainland and received the Moderna shot. No problems except for the usual sore arm thing. He is 81. I’ll take a pass on the J&J, Astrazenica, Sputnik and whatever others are thrown at us. Stay strong everyone.
The chart you showed is home ownership under 35. That covers a 19 year period of age 16-34 to buy/inherit homes. The newcomer (immigrant) data was from a ten year period since arrival (where they went from 0 to 32% home ownership). You can’t compare 19 years of home buying to 10. So to get a 10 year comparison, you would need to subtract the home ownership rate at age under 25 from the 42% number.
Home ownership at age 24 isn’t negligible. Do we know what it is?
Ie) (Canadian 10 year increase in ownership rate)= (ownership rate at age 34)- (ownership rate at age 24)= 42% – ??
Look at this place, they are selling and looking for tenants at the same time…. I thought the rental was a scam but they posted the showing dates…
https://victoria.craigslist.org/reo/d/victoria-bedrooms-15-bath/7305349991.html
https://www.realtor.ca/real-estate/23042450/1530-cedarglen-rd-saanich-mt-doug
Patrick, these aren’t 300k unique individual immigrants, the 300k people/year include families. So you should probably apply that 21% to only half of them.
Also given the job, wage and home price situation in Victoria, how many of them would actually be coming here?
Meaningless stats ?
“Phil Soper, president and CEO of Royal LePage, said in an interview with CBC's Radio-Canada that the survey found that newcomers represent about 21 per cent of all homebuyers in Canada. That number suggests people new to the country are contributing "significantly" to real estate demand, he said.”
https://www.cbc.ca/news/canada/toronto/royal-lepage-newcomer-survey-2019-homeownership-rate-real-estate-1.5322197
There are 3 million newcomers (300k/year x 10 years). That’s 8% of Canadians. And they’re buying 21% (1/5) of the homes as of 2019. Which means they’re buying homes at a higher rate than average Canadian households. Not meaningless to me – or Royal LePage, that declared it a “significant part of RE demand.”
Most of the credit goes to Leo and Marko as they are the ones providing up to date analysis and industry expertise.
Just wanted to comment and say this is a great blog and the discussion here is so much more informative than any Facebook RE groups, so just wanted to say thanks to all the contributors here.
Quick question re: condos
I love meaningless stats.
42%. https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pubsandreports/socio-economic-analysis/2019/socio-economic-analysis-homeownership-canada-69492-en.pdf?rev=300da95f-038f-4b5b-8985-eab341418992
Sounds like at lot, but read on:
So of immigrants in Canada 10 years or less, only 1/3 are homeowners. What % of native-born Canadians 10 years or less from, say, finishing formal education are homeowners?
I have received the first dose of the Pfizer vaccine. Didn’t have any side effects at all except for the day after my arm felt very slightly sore, but not to the touch. I know personally 8 other seniors who have received the same vaccine type and none of them have had any side effects. My daughter, son-in-law and granddaughter have all received the same vaccine early because of their work environment and also had no side effects. My daughter has had the 2nd dose as well with no side effects.
Absolutely! I can’t wait. Actually I can wait because I’m lowest priority haha but I’ll get one as soon as it’s my turn.
Ks112 no I’m Federal, near there though.
Can’t wait to get vaccinated. Our entire family is already registered. Wish I could get the AV but only available to over 55 right now. FYI most pharmacies have AV, with more arriving Friday, so check with your pharmacist if you are over 55 and let them know if you want to be on a cancellation list.
Most definitely.
Right, but “minimum wage” and “no savings on arrival” doesn’t describe the experience with immigrants. They are more home hungry than home-grown Canadians, and one in five home purchases is made by newcomers to Canada (“newcomers” being people who’ve arrived to Canada within the last 10 years.). 75% are coming with savings/cash and the ones that buy do so quickly (3 years after arrival on average.)
https://www.cbc.ca/news/canada/toronto/royal-lepage-newcomer-survey-2019-homeownership-rate-real-estate-1.5322197
“One in every five homes in Canada is bought by newcomers to the country, according to a Royal LePage survey released on Wednesday.
The Royal LePage Newcomer 2019 Survey, which was commissioned by the real estate company, found that newcomers spend about three years in Canada before buying a home and that 75 per cent of newcomers arrive with savings or cash to help buy a home.“
“Is everyone on this form getting the vaccine?”
I’m 39 and I would even sign a waiver just to get the Astrazeneca vaccine(as I am taking the first one available). It’s our duty as Canadians to get it.
My main reason for getting it is to greatly reduce the risk that I could spread the virus to someone else.
You must be new here 🙂
Sure, but that has nothing to do with us being more than a month behind them.
I hope they do have a hard time with it honestly so that they can start sending vaccines to other countries.
this blog is interesting. How do you go from a condos article to immigration to New Zealand to Victoria as the best city in the world to the vaccine without every getting in to condos?
Fuck yeah!
Is everyone on this forum getting the vaccine?
That’s sort of the problem. They’re “people like us”. The real challenge is getting to the groups that don’t want to be vaccinated or are marginalized. Both of which I suspect are a bigger % south of the border, but we’ll see.
Type “>” followed by a space followed by the text you wish to quote.
It’s Markdown.
So use the ‘>’ character.
Sure, but they’re in their 20s and 30s. They’re regular people. The only people I know in the country I actually live in that are in that age range that have received 1 dose is because they’re in health care.
The US did 4.5 million shots the other day.
At that rate they could do our whole country once before the first set was even eligible for their second dose. The could do all of BC in a day.
I don’t miss the tourists either.
And if Alaska gets its way, we may never see as many cruise ships in Victoria again:
Victoria may find out in the next year whether cruise ships come here because it’s pretty, or just because they have to by law.
Cruise ships could skip B.C. ports if Alaska proposal passes
https://www.timescolonist.com/opinion/columnists/les-leyne-cruise-ships-could-skip-b-c-ports-if-alaska-proposal-passes-1.24298437
A technical question – how do you quote others’ comments in comma/light grey when posting a comment? Thanks!
Oh look, a way for governments to raise much-needed revenue:
Tax Cheats Are Costing the U.S. $1 Trillion a Year, IRS Estimates
https://www.bloomberg.com/news/articles/2021-04-13/tax-cheats-are-costing-u-s-1-trillion-a-year-irs-estimates
At the risk of pissing many off, I really dont miss the tourists. I do understand that if your livelihood is dependent on tourists that you see it differently.
Some interesting photos of disappeared working class Vancouver. The one of Hastings and Columbia is my favourite.
https://www.theguardian.com/artanddesign/gallery/2017/jul/20/fred-herzog-lost-vancouver-canada-photography-in-pictures
New Zealand and Vancouver are great choices. Not for me, but that’s a personal choice. It’ll be nice when countries like New Zealand and Canada are at least open again for tourism.
Cadbro, where was your office downtown? Ministry of Health building?
“Just because we have the space for more people doesn’t mean we should fill that space.”
Lot of our space is not suitable for living in the traditional sense, pretty much anything north of Edmonton/Prince George IMO.
It’ll never happen, but I agree with having a population cap. Just because we have the space for more people doesn’t mean we should fill that space.
More people around doesn’t improve a thing, except for the economy — and, really, it’s high time we start figuring out how to create an economy that doesn’t require perpetual population growth to operate.
I worked downtown pre-pandemic and now WFH, and I hope we’re never demanded back to work. Wish more gov. Offices would move to Westshore. I used to not be bothered by the atmosphere and easily avoided it and confrontation but here’s a shortlist of happenings in the past 3 years that leave me pretty unsettled. Keep in mind this is all during a daytime work shift.
-People peeing everywhere, I’ve been exposed to quite a few bits and body parts
-Poop on the sidewalk and I don’t think it’s all dogs. Lots of needles too.
-Coworker doing CPR on a basically dead person In front of my workplace
-Friend bit by a sketchy guy’s pitbull on her coffee break
-Pregnant co-worker chased a block by someone with a hockey stick
-I’ve called the police twice myself for unresponsive people, one of them a woman in the road.
-Multiple coworkers have had vehicles broken into. If I have to return to the office after the pandemic i won’t want to drive. But I’ll have daycare pickups to manage so I don’t know what I’ll do.
There are no objective metrics for “best” country or city. It’s subjective. As I pointed out, Transparency International does have metrics for the least corrupt country and according to them it’s New Zealand. I do feel personally it’s also a nicer place than Canada overall but that doesn’t mean I want to pick up and move there, or that they would accept me if I did.
I have said that objectively “desirability” of a city can only be measured in terms of price. According to that Vancouver is the winner. But if you can’t afford a city, or any good or service, it’s not the best for you, right?
“More people wanting to buy the same stock of core Victoria SFH… bullish no?”
Net population increase is what matters though, in conjunction with the number of high paying jobs that can support the price growth. We can have 100k new immigrants, but if they are all working minimum wage and didn’t bring with them a crap load of money then I don’t see it doing much to house prices.
More people wanting to buy the same stock of core Victoria SFH… bullish no?
No doubt we will see continued growth from population (since we’re basically not growing from births). But those immigrants have to pay for the houses just like Canadians do.
Right. I’ve always been long-term bullish, but my thinking in Feb 2020 was that a first time buyer should first wait out the pandemic as I expected prices to fall. Obviously wrong, as the pandemic didn’t even make a dent in prices – Amazing!. For the record, I haven’t bought or sold a property in years and have no plans to do so.
In the sense that we will have continued population growth from immigration, and foreign investment which is bullish for house prices and the economy in general.
Can anyone suggest an excellent home renovator at an affordable price?
I am buying a house and need to take down a wall.
haha i like that Patrick uses data to inform his decisions and isnt’ like the perma bulls or bears on this forum. I think part of the reason we do well in these reports is because we are next to the US and are constantly being compared to Americans online and so we come out looking great – partly because its cool to hate the US these days. Comedian Bill Burr had a great bit about how people have it wrong about Canada when he was on Conan: “What’s funny up there is it nots going to be Michael Moore’s Canada… talk to anybody of colour who tried to make it playing hockey up there, listen to the stories they have. Like, were you in Alabama? ‘…no, i was in Manitoba’. They are still just white people on the other side of the invisible line. ”
We just have a better social system – I’m sure living in New Zealand, Australia, much of Europe would be similar to here. But that doesnt’ really matter I guess. All that matters is perception and we are apparently looking good on that front.
Patrick you seem to have turned back to bullish from bearish a year ago.
I do agree that Canada is one of the best countries in the world to live in. Not sure if it tells us much about house prices though.
You seem to be taking issue with Canada’s #1 ranking in this world survey.
If not Canada, what other country would you consider to be the “best country” in the world, using the metrics that you do consider important?
And if not Victoria, which city do you consider to be the best in Canada, using metrics important to you?
It’s just image. For example Transparency International, which gets data from people with actual experience, ranks Canada 11th in corruption. Not bad, but not #1. As for “respecting property rights”, I not sure what that’s supposed to mean, but Canada doesn’t have constitutionally protected property rights. I don’t think many people actually familiar with Canada would rank it #1 and I don’t think that’s a bad thing.
Do note that the US gets far more legal immigrants than Canada – in fact it’s the #1 destination for legal immigration – and a lot of people who immigrate to Canada would go to the US if they could. Yes I know it gets fewer per capita but that’s irrelevant to which country is most preferred.
Canada is considered to be the best country, I believe, solely on the fact that we have one of the lowest populations considering its vast size. Add to that our generous social benefits, self sufficiency, and comparatively low crime rates, it’s no surprise that billions of people would love to live here. Unfortunately, I would estimate that 80% of our land is uninhabitable due to the logistics involved to support any significant population. Most of Canada is remote, rugged, and harsh climatically. The cost to provide the resources necessary to support a comfortable lifestyle is impractical. If I had any say in the matter, I would cap our population at 50 million people, any more and we would soon become a socialistic third world country. Our current population is struggling to maintain a decent lifestyle, and poverty is ever growing as technology takes over the simple tasks people were needed to perform. That’s my opinion, our perceived quality of life is constantly being put out of reach for the majority of our population.
Many here would agree with me that Victoria is the best city in Canada. Now combine that with Canada scoring #1 best country for the first time in the world countries report, and you may conclude that you live in the “best city in the best country in the world.”
Other rankings have put Canada at or near the top based on objective data. But this one is different. It is a survey of 17,000 people, asking about 76 countries . These results are based on 76 metrics and scored by the 17,000 survey participants. This means it is how the rest of the world “perceives” Canada, which obviously leads to interest in visiting, immigrating, investing and thereby boosting our Canadian house prices.
https://news.wharton.upenn.edu/press-releases/2021/04/canada-is-the-no-1-country-in-the-world-according-to-the-2021-best-countries-report/
“Canada is the No. 1 Country in the World, According to the 2021 Best Countries Report
Full list of best countries: https://www.usnews.com/news/best-countries/overall-rankings
Living in the downtown of any city can be a real hit/miss most of the time. I lived close to downtown Toronto for 7 years, lived in kingston, ON for 3 years (i know kingston is small but the “downtown” area where I lived had its fair share of crackheads/sketchy people) and lived across from SOF centre for 3 years.
Victoria tops the cake. Per capita, the amount of sketchy, creepy people who roam Victoria is unbelievable. Victoria only has 90,000 people give or take. Many times while walking my dog in Victoria I felt very unsafe. I have been threatened multiple times in the course of 3 years. I understand the sample size is 1 in my example but at the same time parks in the city have signs telling parents to “check for needles”. Beacon hill is now owned by the tent coalition. The situation is utter insanity.
I am extremely fortunate that I moved from the victoria core after 3 years. It was 36 months overdue.
Living downtown has no appeal.
It’s less than once a month that I have any reason to go there.
Downtown is certainly less appealing right now than it was pre-pandemic…but that’s only because eating, drinking, and events are so severely limited right now. The pandemic has caused a lot of changes, but I’m fairly certain people will resume going out to eat, drink, and attend events as soon as they possibly can.
Barrister, yes downtown is a dump and losing its appeal fast. IMO, Humboldt valley is the only area one can realistic live long term without getting annoyed.
Shows as expired.
Doubt it. The city exodus has been way overblown in my book. Once this pandemic is in the rearview mirror and most people are back to in-person work it will bounce back.
It looks like 1358 Freeman Road, Cobble Hill is no longer listed. Does anyone know what it sold for? Or did get pulled off the market?
A uestion for the group. Is living downtown a lot less appealing these days?
If condo prices start to plateau due to a slight rise in interest rates than what happens to condo owners who have a negative cash flow. Without substantial appreciation do rents really support these prices?
I never claimed Canada was in good shape. However I regard death counts as more reliable than infection counts, as the latter depend a lot on the amount of testing and who is being tested.
We will see what happens going forward. On the whole vulnerable populations in the US have been less well protected than in Canada. The exception was LTC residents in Canada, but that’s now been fixed.
Looks like BC is delaying the release of yesterday’s Covid infection data, I have to assume the numbers are pretty ugly…
Oh they just released, 873 new cases, so that is two straight days under 1000. Going in the right direction atleast.
BoC as the mechanism of government policy. As well, CMHC also bought private bonds as well to push liquidity at the start of the pandemic. Again as a mechanism of government policy… So government….. They are responsible back to government.
lol patriotz, just go google the covid infection data and look for yourself to see how Canada is trending versus the US. We are a shit show no matter how you slice it.
“Most people I know” does not give you a good statistical sample. Particularly on this issue, and particularly with regard to the US.
You mean the BoC. The government sells bonds.
Unless it’s happening in other countries as well, I don’t see it being a possibility without absolutely skewering the CAD.
I wonder how much mortgage fraud there actually is in Canada, surely with prices the way they are people are probably doing whatever they can to get the most mortgage (skirting around stress testing).
Theoretically if stress testing does it’s intended job then it wouldn’t matter if rates increased 2% next week (provided no change to the stress test rate) as most people will have the same approved mortgage amount. Whether or not they can actually afford those payments would be a different story though.
Yes, that interview link you posted of the Minister was quite something. The guy talks both sides, claiming he doesn’t want to see home prices fall as much as 10%, yet he’s also a champion of affordable housing.
Most people I know in the states have had their second vaccine already.
We’re way more than 1 month behind.
At least look at previous day where USA had 459(56,522 cases) and Canada 41 (10,858 cases).
Difference is that cases in Canada are rising exponentially, and cases in the states aren’t.
Deaths in the US are falling, Canada’s are increasing.
India would be my bet for where the next set of variants come from.
185,000 cases today, and the steepest curve I’ve seen in this pandemic, it’s insane.
There’s 95 million people vaccinated there.
Rates have already moved. The bond market did it. Unless government jumps in with another big bond buy to push liquidity to the banks at very little cost to drop rates again.
Between the new OFSI stress test rule and the new rate for my pre-approval (when my current rate expires) it will be impacting me to the effect of a 1% increase. 0.5% on the rate for cost and another 0.5% for the stress threshold.
rush4life ow that stings
people from Canadahousingcrisis trying to get some billboards put up – here is the 1st one:
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Sorry to be a Debbie Downer, but…
My guess is COVID is going to cause trouble, economic and otherwise, for quite some time to come.
Potential factors:
• Canada never reaches “herd” immunity vaccination levels due to enough being hesitant or anti-vax
• Same in the USA, and some other OECD countries
• It takes a long time for all the poorer countries to receive the vaccine & they too may not achieve “herd” levels
• A small but ever-growing percentage (worldwide) decides to ignore public health guidelines because they’re tired of them
• The vaccines’ effectiveness, we may discover, is time-limited, necessitating regular vaccinations which more and more people choose to skip, like with the flu vaccine
• COVID stays prevalent enough globally that new variants continue to emerge, some of which could be nastier than today’s variants
Yes all sizes. Definitely not apples to oranges between condos and the average rental but as a place to live they are comparable. Correct that this doesn’t include strata. Not sure if strata has become more of a burden relative to payments over time. Worth looking into.
We are currently 1 month behind the US for vaccinations
just checked: New US deaths up from last reported 347 to now 438 deaths today. Canada still at 29.
We may exceed the US’s death toll on a weekly basis but it’s no guarantee even if weekly cases are now higher. Depends on the pattern of vaccinations and how many of those cases end up as fatalities. The US seemingly has a lot more vaccine hesitancy so we may actually outpace them on vaccinations in a couple months from now.
I don’t know what stats everyone is reading. Canada does seem to have an uptick right now. But these are some of the Stats from “Worldometer”
Total deaths per Million population:
USA: 1734
CANADA: 615
New deaths today:
USA: 347 deaths
CANADA: 29
The population of the US is approximately 10 times greater than Canada’s. Canada’s urban population percentage, I believe is slightly higher than in the US.
Both. BoC can’t control it directly but rates in the EU are way down. Seems investors aren’t pushing them up.
I think it’s just transparent politicking. They’re hoping to have an election and win a majority this year. Promising to protect equity is a way to do that since majority of voters already own. At the same time they can promise to go after foreign money and ill defined speculators which is tough for the opposition to argue with. Politicians have been making this promise for ages (affordability while protecting equity) but it was interesting to see Adam dive into the weeds trying to convince people he could actually square that circle instead of just letting it go.
Patriotz, just go google the covid infection rate for US and Canada and look at the chart, pretty easy to tell which country has a grasp on things.
“I’m betting on roughly flat rates but who knows”
Are we talking about fixed or variable? Fixed rates are much more difficult for BoC to control, yes they can try YCC etc. but that has its limitations and is dependent on the macro economic environment of the world.
Adamn Vaughn’s statement are interesting, they want to go after speculators but at the same time do not want a decrease in equity. This cannot happen simultaneously though….
Per capita new cases in Canada are now higher than in the US. Reported deaths lag reported cases by about 2 weeks. Unfortunately we can probably expect the per capita death rate in Canada to climb above that in the US at least temporarily.
I’ve been reading your content for years now and I just want to say thank you. Your analysis is always insightful and data driven. I appreciate that it takes a lot of time to create quality content. So many thanks.
(I’m also incredibly depressed that MP Adam Vaughn can go about adding fuel to the fire and his party doesn’t even blink.)
I’m curious if rates could drop. We may be able to squeeze one last cycle out of rates. Bad for the country I think but it could happen.
Mortgage rates in Germany are around 0.5%.
I’m betting on roughly flat rates but who knows
Spoiler: they won’t.
Deaths in the US have been moving up over the last week and are now averaging 985/day. They have also been moving up in Canada but are averaging 34/day. Of course their idea of normal is often different from ours.
Barrister, in my opinion if Covid has taught people around the world anything it’s that Canada is probably not the place to come if you want quick and effective resolution of anything after a major catastrophic event. People are at sporting events south of the border now and they are moving back to normal every single day, while we are literally back at square 1. We just lack the infrastructure, expertise and leadership to deal with anything major and that isn’t something which can be changed over night.
We are a good place to park money though… for the time being.
Leo, for the affordability analysis you seem to be using average price and average income. I am curious as to why you are using averages vs median? Do these look more or less the same?
I am wondering if using median would reduce the influence of outliers including potentially the concern below that there are more tiny condos being built.
I am wondering if the people moving because of Covid (regardless of the reasons) is sort of coming to an end at this point. Have we just been experiencing a pandemic surge? Is this going to be followed with a lull?
Leo,
That certainly is interesting that the market may be cooling off a tad in April. What affect might parents wanting to finish a move before September have this year…any thoughts?
I think KS makes a good point – perhaps per square foot condo prices are actually increasing similar to housing and its just the fact that we have a lot of junior/ micro condos these days? It would make sense to me if housing continues detaching from local incomes that condos would follow with it – eventually the spread would be at such a point that it would have to pull condos up with it (like we are seeing in the smaller cycles today).
I think you once again did a great analysis of the condo market. As with houses I am curious if interest rates start to move up to more historical norms.
Ontario tried a speculation tax on property, and the market ‘collapsed overnight’
Depends on how stringent you really want to be. Unfortunately I can’t find it, but a year or so ago I read another NP article titled something like “Why governments don’t take real action against high RE prices – they’re afraid it might work.” Which pretty much sums it up.
Leo great analysis as always, I am assuming you are including condos of all sizes in the analysis? I think the average size of condos have gotten smaller over the years so this data may not be an apples to apples comparison? Also, I assume strata is not included in affordability chart?
Btw, really impressed with your writing! Is it part of your day job?