June – Market eases slightly, but remains hot
The market in June continued the gradual cooling trend that we’ve seen since April, will sales going from 60-70% above normal to near par in recent weeks. This measure will drift up and down over weeks, but the trend of a slow return to a normal level of sales seems clear.
However the ultra-low levels of inventory ensured that the market stayed in a very strong sellers market territory. We are still at the lowest active inventory levels for June in history, and an insane 49% decrease from last June in total inventory (note chart below shows residential).
Single family sales dropped the most from May, while townhouse sales dipped a little and condo sales increased somewhat. Townhouse sales are around pre-pandemic levels, while single family are getting close, and condo sales remain the highest.
The obvious question is how much of the drop in sales is due to inventory constraints, and how much is due to a buyer fatigue and high prices. There’s no doubt at all that the low inventory levels are constraining sales, but we’ve had similarly low inventory during higher sales months in March, April, and May, so it’s not just that at work.
We know that bidding wars will remain exceedingly common until we exceed about 2 months of inventory. While months of inventory increased in June, we didn’t get to two and while the rate of bidding wars took a small dip (larger amonst townhouses), they remained extremely high.
Months of inventory crept up a bit again from May, but we’re talking about tiny gains here from a very low level. We’re a long way from a balanced market.
After 3 months of roughly flat single family pricing, the median sales to assessment ratio moved up again in June, with the median single family home selling for 33% over the assesssed value from 12 months ago. Townhouses and condos were roughly unchanged from May. If the change in the stress test had any impact by potentially sidelining a few condo or townhouse buyers, it wasn’t enough to rise above the background noise.
As always, assessed value on any individual sale is not particularly meaningful, but the mid-point gives a pretty stable measure of the change in prices from a year ago, and doesn’t suffer from the problems of noise like the medians and averages, or lag like HPI benchmark prices. If you take a look at the distribution of sales, it’s clear that it’s nearly impossible to buy anything at or under assessed these days.
The 6 month average prices (to remove noise) continue to increase rapidly in all categories.
On the construction front, activity remains strong with just under 5000 units under construction in the area. Developers are ramping up to take advantage of the prices and low inventory, especially with some of the pandemic price shocks beginning to show signs of easing. This is the same accross the entire province. Whether Kamloops, Prince George, Grand Forks, or Kelowna, everyone I speak to is run off their feet busy with development.
My take
Though the gradual pullback in activity continues, it’s been slower than I expected, with Vancouver and Toronto seeing a more substantial decrease in activity. Some of the surge in development activity in smaller centres is certainly from out-migration of the major centres, but it’s not enough to actually turn those large markets soft. If you’re tracking the market on the portal, you might notice more price decreases on individual listings which is common during market changes. Price decreases are a symptom of seller mispricing, which I’ve written about in a previous article and don’t necessarily indicate dropping prices.
There’s been a lot of discussion about inflation this year, with people being suspicious of the relatively tame CPI readings and pointing to the spike in commodity prices as indicators of inflation. However I’ve always thought these price spikes are more due to supply chain disruptions. The unwinding of those is starting to happen, with a sharp correction in lumber that is filtering down to retail prices, and I suspect the rest of our supply shortages will prove to be mostly resolved by end of year as well. As the economy re-opens, consumer spending will shift back towards services like restaurants, entertainment, and travel, and away from goods which will help on the demand side.
On real estate prices, it remains very tough to read what will happen. On the bullish side, months of inventory remains very low indicating higher prices to come and the Vancouver premium remains high which should continue to keep the number of out of town buyers elevated. On the bearish side, we’ve had a lot of demand pulled forward due to low rates, we’re at or nearing the end of four decades of dropping rates, and affordability levels are pointing to roughly flat prices in the medium term.
Then there’s the issue of consumer sentiment. We’ve just come from a year of arguably the most dramatic market in Victoria’s history which makes it tough to imagine that real estate will become boring again and people will lose interest. However it happens regularly and will happen again. If I had to guess, I would say we’ve got some more price gains to go this year, and then will be in for a relatively boring period again in Victoria’s market.
New post: https://househuntvictoria.ca/2021/07/05/the-population-inflection/
“A nice person on an internet forum bought a house. Maybe those regressive government handouts to homeowners are a good idea after all!”
The oak bay OCP being insightful. The more you try to preserve your neighbourhood character in amber, the more it slips through your fingers.
Congrats on the house, Cadborosaurus!
Time will tell. Buying is great for family life, regardless of what happens to the paper resale value.
Congrats Cad, glad it worked out for you. I haven’t viewed anything in about month now because listings went so dry, so no worries that we went against each other on it. You’re right, buying anything with a suite is tough cost wise. On top of housing the kids, I have to plan for my free range geriatric farm. So, I have been looking for properties that work for a garden suite or a split entry style that can easily be set up for the inlaws. As well, I put out some feelers work wise to see if I can comparable employment in Courtenay, Kamloops and Kelowna. If I can find similar compensation, I will probably just move the family. It’s unfortunate because there’s a path to achievement very well laid out here for me, but even being very well compensated, it’s tough to make things workout here (I just don’t want to push back a retirement date to buy a house). The good thing is my spouse’s work is very portable and hopefully that earning potential returns when the kids are school age. I will just remind her of her UVIC feminist days.
Really happy that you have found a great new home.
Yes. None for me where I live.
Yes. None for me where I live. Nor for seniors. If you can’t afford the property tax, you can’t afford the property.
I never said that this should simply go. There are complicating factors. I did say that the suite portion of houses should not be exempt. In any case, I don’t see much capital gain going forward compared to past decades.
I said that property tax should increase and income tax decrease in kind.
Congratulation to a new homeowner.
Cool as in flat for a few years, but crash isn’t happen at anytime soon bar a physical war on Canadian soil and extreme rates hike. Or, at least 5~6% interest rates that take a decade to move to and the total drop was less than 15% at peaked.
https://wowa.ca/canada-5-year-bond-yield
https://www.ratehub.ca/5-year-fixed-mortgage-rate-history
Isn’t that great news Cadborosaurus!
But to be clear, although not envious, as a “housewarming gift” you’d still like the government to take away Caddy’s:
– home owner grant
– property tax deferral (with a child under 18)
– Principle residence exemption from capital gains
– And increase the property tax relative to income tax
The goal was a forever home (forever being at least 5 years to weather any drops ahead), we missed our chance at an entry level 3 bed when they shot up to 3/4 million, $3000/m. I’m still a bear and believe this market will cool but I’m a risk averse bear and didn’t want to chance another renoviction, or play the long game in our too small rental. Thanks to all for the support, I still have great empathy for househunters in today’s market hell and think things need to change.
Dumb. Should have just stopped backstopping those mortgages with Sagen/Canada Guaranty.
CMHC reverses decision to cut GDS and TDS since all it did was shift market share to Sagen/Canada Guaranty
That’s great news Caddy, and well deserved. Congrats!
Congratulations Caddy!! We may not seem eye to eye on many issues, but believe me when I say I am so very happy for you. It has been a long haul.
Every day I was looking for something for you.
If it was the one on Rex, then you got yourselves a beautiful home. Regardless, it would appear you got most of your wants met on your new purchase so this may be your FOREVER family home. I’m glad your parents were able to help in some way to make your dream come true.
Obviously not everyone can work for the government, the term I used was “prefer” which is not based on any criteria.
Congratulations, although in comparison with buying my present house I don’t envy you.
Only 22% of Canadian workers are employed in the public sector. That includes fields like health care, education, military, policing where if you want that line of work you pretty much have to work in the public sector.
The number of people who actually have a choice of doing similar work in the public or private sector is a lot smaller. So on what criteria are you basing your claim that “most Canadians prefer the cradle to grave security of public service”?
Step 3, time to go out and party instead of listing your property.
We got one! After being really burned about the last bidding war we lost it was hard to get back out there but the literal perfect house popped up and we went for it. We wanted 3 beds 2 washrooms, even just a full bath plus ensuite for my fam, and a suite if possible because we actually have better affordability with one than without for the living space we want. The cheapest 3 bed 2 bath SFH in Langford is running about 740k right now, and cheapest with suite is in the 850k – 900k range and even some of those are only 3 bed 1 bath up. I was preparing to give up my 2 toilet dream or buckle down and rent for another 6 months without looking up.
We knew even before booking the showing that this was the house, and also this house or bust. And unless there was something glaringly wrong with it (we had viewed a house tipping towards a creek recently, and another with a cement pool monstrosity mess in the yard, others requiring substantial renos) we needed to get it. The listing switched from a bid war to reviewing offers as they come in so we jumped and offered immediately after seeing it and were successful. I hope it wasn’t one you were eyeing ummm really? (Not on McLeod). No sacrifices on bedrooms and bathrooms, house is in great shape, a nice suite, fantastic yard, and an excellent neighborhood for our kids. We were able to get a home with a suite because of parents co-signing, an idea I got from this blog (thanks Totoro) to help us count the suite income for affordability as we’re stress tested at a lower approval without this. We received no financial help from anyone but the autographs are worth their weight in gold and we are so lucky to have this option available to us, many don’t.
Looking forward to moving in and am even more excited that we’re done looking and all the stress that entails.
Nothing will compare to the call that our offer was accepted, my kids learned some new words.
Once normal public service jobs cannot provide a reasonable standard of living then people will make other choices, it just takes time.
‘Dear Homeowner, I want to buy your house’
https://www.theglobeandmail.com/real-estate/article-dear-homeowner-i-want-to-buy-your-house/
It’s a volunteer effort Patrick. Don’t worry the vote tracking will happen in time for the election next year. Feel free to pitch in in the meantime.
Going into a trade instead of a profession is a good idea if you understand the downsides. You have to be physically able at all times for the length of your career. Illness or injury can decimate your savings, getting income replacement insurance is very expensive. Good luck taking holidays, you have zero holiday pay. Lack of other benefits like dental plan, pension, etc.. discourage many people from becoming self employed. I know what I’m talking about, I’ve been self employed all my life. Luckily I’ve remained healthy, but never expected my business to be shut down by a virus. I can’t see many people chomping at the bit to start a business, sign a lease and go in debt to be self employed. Only some businesses and all government workers thrived, while thousands of business owners lost two years of income. I think most Canadians prefer the cradle to grave security of public service, which is why you can’t get a tradesman.
Don’t be seduced by what politicians say in a self written article. Instead of endorsing her and being “sad she’s not running next year”, how about doing what your family housing advocacy group has promised, namely reporting on the voting records of politicians like this who have been around for years.
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https://househuntvictoria.ca/2021/05/28/houses-for-living-and-lots-of-them/#comment-80210
LeoS: “One of the sub-projects we are hoping to do is track the voting records of council members to create a voting guide for the next municipal election.”
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Have you seen her sponsoring or voting for the initiatives your group wants? Namely…
– upzone all single family areas within the urban containment boundary to allow multiplexes and townhouses by right.
What’s her report card grade on that?
No. Not particularly convincing at all. But you DO like graphs. There must be one handy that shows Smart car sales against Honda Fit sales.
Ah yes the everyone must be wrong/brainwashed line of argument against popular products. Never particularly convincing.
Lisa Helps gets it. Too bad she’s not running next year. https://lisahelpsvictoria.ca/2021/07/04/housing-supply-in-victoria-is-tipping-in-the-wrong-direction-and-how-giving-away-councils-power-can-help/
2022, if Ford sells 1 Mach E for every 10 Model Ys let me know. Shouldn’t be a big deal with such a great product and huge dealership network.
Thread drift alert…..
“What are my options, buy a crap Ford?”
You’d have to be a supremely willful atavist to buy a Tesla when you could have an electric Mustang Mach E.
A huge dealership network and a beautifully executed product which only re-emphasizes the fact that if you look closely at a Tesla it appears to have been made by a second-tier Grade 9 shop class, most of whom had a couple of joints at lunch.
A few months ago, we had quotes for hardiplank siding (not rocket science) that we felt were too high and my dad ended up siding the house alone by himself. Based on how long it took him and the quotes a smart and somewhat ambitious person could make $200k/year siding at the current moment. Problem is a lot of young siders I meet are buying F350s, working 4 days a week during the summer, not willing to do a few hours a week on the paperwork side of the business, etc. If you buckled down as a sider for 3-5 years you could buy a fixer upper, throw a suite into the basement and off you go.
Last week we had four trades promise to show up to a site, no one showed up entire week. You can’t complain or say anything to them as there is no one else to hire. Situation is super bad, aka great opportunity for young people to go into trades.
“My point is obtaining a useless degree to obtain a useless bullshit job does not entitle you for a SFH, when what society is lacking is people banging nails in 2x4s.”
Yeah, no argument from me there. It’s just that in the past, that was the path you took to to get to middle-classiness. Expectations haven’t adjusted yet.
Fwiw, I strongly encouraged my stepdaughter to consider getting a trade before going to university, but generation Instagram doesn’t seem too interested. I guess nothing has changed since I was a kiddo. It’s too bad, because if you’re smart and somewhat ambitious, you can do well for yourself.
You’re looking fit, Marko. Have you been working out?
My point is obtaining a useless degree to obtain a useless bullshit job does not entitle you for a SFH, when what society is lacking is people banging nails in 2x4s. I don’t think everyone needs to bang nails; however, moving 2% of completely useless beauracy jobs into banging nails would be of massive help when it comes to building housing. Or at least allow some immigrants into the country that are willing to bang nails.
Meh, the guy is a total weirdo, but when someone else can sell me a car that makes it to 200,000 km on tire maintenance only let me know. What are my options, buy a crap Ford…their CEO only made $20 million last year and no one cares enough to publicize the non-sense he has to spew, that makes me feel better.
My perception is that sentiment mostly comes from the NIMBY crowd, as a way to spin their opposition to density as some kind of class struggle
“unless you study something tangible like nursing or engineer it is kind of useless”
It depends Marko. It’s pretty much a prerequisite for any bullshit job in the public or private sector (except flogging real estate). You can’t have everyone unclogging toilets and banging nails into 2x4s. And if you don’t like the step code/recent building code changes I’m not sure you’d want more engineers milling around. Could probably use some more economists in government though.
“I could care less if he is worth $100 billion or $500 billion, I just want the best possible deal on the best car.”
I’m more upset by the creepy personality cult, than how much the guy is worth.
Then you get these idiots that spew the “greedy developer” non-sense. If a developer builds 5,000 units, purchase or rental prices drop 10% as the market is flooded why on earth would I care if she or he makes $10, $20, or $30 million. My purchase price or rent just dropped.
If Elon drops the price of a new model Y to $39,900 eventually I could care less if he is worth $100 billion or $500 billion, I just want the best possible deal on the best car.
I have a masters degree from UBC and I learned way more valuable skills working for my father two summers mixing mortar then I did at UBC. Education is a business itself, unless you study something tangible like nursing or engineer it is kind of useless. I need someone to fix my toilet not to explain policy to me.
Problem is people just whine.
“We are educated and have two solid government incomes and we can’t afford a SFH in the core, change needs to happen immediately.”
There are literally entire departments of government workers making housing unaffordable for absolutely zero benefit, yet no one does anything to address these problems, they just whine.
I’ve now sent out over 5,000 owner-builder study guides (I’ve put over 50 hours of work into it) in the last 5 years. Take a look at the number of likes and dislikes on my latest video me bashing the owner builder exam -> https://www.youtube.com/watch?v=g1lZgdPxa1o&t=9s
There so many things people could do like Leo is doing, but all I hear is whinning. Why is no one like…hmmm there is a department for something completely unfounded? Let’s clean house.
Then on top of that people are dumb and believe foreign buyers, spectulators, and everything under the sun is the sole driver of prices. Much like Leo I am in support of foreign buyer tax, spec tax, Land Owner Transparency Registry and everything else just to prove a point.
btw, how come Land Owner Transparency Registry is out of the news now??? Ohh wait, it was introduced and prices continued to climb.
That is an oxymoron.
On one hand you wanted to add more regulations while on the other you are calling for regulations relaxations. These kind of mentalities is exactly what policies makers want to hear, because they would act upon the demand and add more regulations/red tapes to make it look like they are doing something on the matter.
Instead of adding costs to demolish a house, steps should be taken to invest more into house construction, making them safer when it comes to fire. The tragedy in Alberta emphasizes how quickly a newly constructed house can burst into flames making escape very difficult. Maybe a sprinkler system would be a better investment than spending thousands on hand demolition. I’ve mentioned before how dangerous newer houses are when they catch fire. The materials used in construction are highly flammable. Add to that all the phones and laptops that are constantly being recharged and have been known to burst into flames.
Along with eliminating housing subsidies, tax incentives, government backing the private high ratio insurers, that weird thing where the government owns part of your to get down payment assistance and either taxing a down payment gift or not counting the gift money towards the 20% down calculation (since a gift does not actually demonstrate a savings ability). Also, get rid of the property taxes deferral for elderly and eliminate the ability for people in high ratio mortgages to be approved for HELOCs. As for building more quicker, the blame is on us for what we elect locally. Forcing builders to include affordable housing just increases the cost of the profit units. Just let the industry over build (and they would if the could and then new magically becomes affordable) and have the market get saturated with supply to bring costs down and with private business taking the risk. The problem with the command economy folks is that they think they can design an outcome through micro measures, but it just ends up becoming the lady who swallowed the fly, then a spyder, a cat and so on…. (creating the opposite of what they claim is intended). The idea of building new is not to make it affordable (nice if it is), but to drive to old stock down into the affordable category. So, residents of greater Victoria, you keep electing these people to councils (the stop, delay and increase coats to serve their petty political ideals)… And if you don’t like what council does remember that municipalities are fully the creation of the province and can be overridden by the province (typically political suicide if they do because then the province owns the problem politically afterwards). Oh well, all for not, you want your tax incentive and subsidy for you and since you are in your place you don’t want your neighborhood to change and you definitely don’t want your home devalued when someone build something newer and better across the street… So why not obstruct? It seems the current politicians know you better than you know yourself. In the end we get the government and policies we deserve.
Sounds good. Thanks for the discussion!
Fatigued, you’ll likely get a chance to effect change this fall. We each only get one vote, and it’s not retro-active to the last election, but that’s what we get.
Sounds like you’re the one shaping the topic of housing affordability to suit your counter argument. The affordability issue affects the entire spectrum. And once again I’m not asking for sympathy. I’m asking for acknowledgement that there is a problem, and that it affects more than the lower rung on the property ladder.
Let’s agree to disagree. We’re not going to see eye to eye on this, it’s clear. No point in wasting our time further. At least we both agree interest rates need to rise as does the supply of missing family suitable housing.
I think you’re confusing the common use of the term “affordable housing” with what you’re looking for, namely an “affordable detached family house on a quiet street in a nice neighborhood.” They are not the same thing.
Don’t be fooled into thinking that advocates for “affordable housing” are at all interested in helping you with your problem of having $850k as a house budget, but wanting more house for your money than is currently available.
The term “affordable housing” refers to a poverty issue, to help the poorest among us. Affordable housing is the lowest rung on the housing ladder, after homelessness. So an example affordable housing project would be the YWCA providing affordable housing for single mothers and their children leaving abusive relationships. Or providing housing for the homeless. You get the idea.
Affordable housing advocates are not interested in or empathetic to your first world problems of not having A/C in your rental, or difficulties in finding a rental that accepts your pets. Or your plight as a “fatigued buyer” from losing out in bidding wars on nice SFH in Core Victoria.
If I’m wrong, tell me one housing unit deemed “affordable housing” that you would even consider living in, even temporarily. Until then, don’t hijack that term “affordable housing” to gain sympathy for your problem.
Face it, there are lots of millennials just like you, with good incomes and ready down payments, and currently not enough detached houses to go around for everyone. The only solution is building lots of houses. They won’t be cheap and they certainly won’t qualify for the typical definition of “affordable housing”.
Until then, given the demographic crush of home-hungry millennials for the next ten years, the only way you get your wish of lower prices for a cheap, nice SFH in Victoria like the boomers got, is if mortgage interest rates rise to levels paid by the boomers (10-20% in the 1980s).
@Patrick You only answered some of my questions, but I hope for your kids’ sake you will have significant assets to pass along to them, whether that’s help with tuition or help with a downpayment, because if things continue this way, they won’t be able to buy a condo in Victoria let alone something suitable for a family. I’m certainly not going to raise my kids to accept a lower standard of living; I would hope that they recognize the social impacts of unaffordable housing and advocate for change.
And let’s get one thing clear: I’m not that worried about my own situation. We will get a family suitable house eventually, through a lot of overtime, and sacrifices like skipping the odd latte 😉 I’m not asking for pity. The reason I’m frustrated is because though I’m educated and work two jobs, it is still very challenging. Therefore, what is it like for someone less fortunate, or on an average income with average savings? Our generation isn’t looking for more– we’re looking for the same opportunities our parents had (though I’d argue in the course of a generation, we should always be moving the needle upwards in terms of standard of living).
You also sort of proved my point when you implied that those without above average income are “poor folk”. That is exactly the problem 🙂
Also, there’s been nothing free about this market at all, it’s been full of knee-jerk interventions. Thinking the free market will solve things without significant political pressure is a pipe dream.
We don’t have a free market on the demand side either, but we don’t hear a lot about that.
There you go, a problem to be solved. But it won’t solve itself, it requires people to make noise and push for change. The first step is getting angry at the system that exists.
Patrick: The free market will solve the middle class problems, by increasing housing supply. Just as long as the government gets out of their way.
Leo: No subsidies are required to fix the housing problem for those with above average incomes, only structural change to how we approve them.
I think we’re saying the same thing Leo. Bring on the supply!
Strawman. Whoever said they didn’t? No subsidies are required to fix the housing problem for those with above average incomes, only structural change to how we approve them.
The housing issues for the above average income crowd is a different issue than the poor folks. The above average income people can afford “something” (as they put it), but it’s below their expectations.
The poor are unable to find basic housing without direct government support, and they deserve that support. The free market will solve the middle class problems, by increasing housing supply. Just as long as the government gets out of their way.
The place on McLeod?
You’ve got this backwards. If housing is only an issue for the poorest, then that’s a problem, but it’s also a predictable and manageable one. Someone without money will not be able to pay for housing.
When housing is an issue for even those making above average incomes, that means it’s a much bigger problem. And if those with above average incomes are struggling, that means everyone below them is struggling even more. Again, a bigger problem and much more indicative of an issue that needs to be solved, not a smaller one.
If you’re referring to fatiguedbuyer as an example of someone “pushing for change”, whether “change happens” depends if anyone’s interested in hearing about the economic problems of the young upper middle classes, with “above average incomes and substantial assets “
People do prioritize their interests, and there are lots of issues ahead of that one. And so the cries for help will fall on deaf ears.
Leo, I hope your advocacy group looking for family housing has much more compelling cases than that.
People raising issues and pushing for change is how change happens.
Woohoo! Let’s have the details…
Good question. My hopes for my kids are that they will be just like you…. Namely, that they will be married, have kids and pets, and have “above average incomes, and substantial assets”. And that they, like you will live in Victoria where they grew up, with their kids at great schools in a nice neighborhood. And that they’ve prepared and are carefully searching for a suitable house to buy as the final puzzle piece to their Canadian Dream. – Congrats, you have all that now.
But I do hope that they aren’t like you in that they don’t look at all those great accomplishments and post to Victoria forums complaining how they are shortchanged compared to previous generations and how they should be entitled to more.
Congrats Caddy!
Marko must be thrilled…lol..
I missed open houses so much. We’ve been trying to align showings on my one kids’ daycare days, put the other kid in a carrier so they don’t touch anything but they’re getting big and hate this, and just recently got access to some babysitting which was absent the entire pandemic. And all showings are our realtor and us hauling out to Langford, and jumping on timeslots quickly as some places book solid and are only listed a few days before a bid war. It’s been a time! We were ready to start sending only 1 partner to showings and the other would view it on the inspection as one commenter here suggested. But we ironically might have just bought a house so no open houses again for a decade haha I’ll update when the shock wears off.
Story in the Discourse about densification I was interviewed for. https://thediscourse.ca/west-shore/langford-density-my-belmont
Correction: I am not the original creator of this blog.
Open houses back on
Excellent as always Leo.
@Patrick Sure thing pal. If I’m entitled to think a high income and good savings should earn me an average single family home in the town I grew up in, then I’ll gladly be your exhibit A.
But I guess because I can buy “something” affordability is not an issue, right?
Since we’re being open and honest, how many kids do you have? What’s their plans for home ownership? How many homes do you have?
In the previous thread, I stated that some people here feel entitled to a SFH. And several people jumped in to say they have NEVER seen someone here that felt entitled to a SFH in Victoria. And so thanks for being honest enough to come forward as Exhibit A.
And btw, I do hope that you get the SFH of your dreams in Victoria. Good luck.
@Patrick It is possible to recognize the plight of others as well as your own. I’m less worried about myself as I am about an average family in this city. These are my friends, people I’ve grown up in this town with who aren’t as fortunate. These are families making 80-90k living in basement suites watching their dreams erode and feeling like they are working for nothing.
I’d appreciate it if you stopped trying to act like you know my family and my situation. I didn’t say I moved to time the market. I moved out of Langford because where I was wasn’t a good neighborhood to raise a young child. I regret nothing about that decision. We’re much better off on this quiet street with a yard, especially during the pandemic. But it isn’t stable and we are seeking something permanent and something to call our own (where we can install a proper heat pump. I won’t even start the debate about how a portable AC unit does nothing to cool a poorly insulated home in 30+ degree heat. Please don’t patronize me.)
You seem to take the suck it up approach versus acknowledging the problem. Just a few years ago, the savings and income our family has could have bought this house I’m currently renting. Now? Maybe a fixer on a busy street in a less desirable neighbourhood. Maybe you’re wondering why I deserve more? And think I’m being entitled? Yeah, I do think someone with my savings and income deserves more. And I’m not entitled or unreasonable to think so.
I think you need to look at the definition of the word affordable. Because being able to buy “something” is not synonymous with affordability.
Well if I’m in a debate with you, as you’re saying that homes are unaffordable, and then we get this admission from you that you
– have substantial assets and a well-above medium family income.
– owned a townhouse but sold it, in the hopes that prices would fall, and chose to rent a house with kids and a dog.but you don’t want to return to Langford, where you used to live. And
– You could “comfortably” buy for $850k now, but prefer to wait for better prices
… then this is the point where I say “you could afford a home, but chose not to” aka “you made your bed, now lie in it”.
And as for our “homes are unaffordable debate ”….. i can’t imagine it getting any better for my side, so I rest my case. Because you’re the “poster child” for my case, which is that many “homes are unaffordable” people can in fact afford nice homes, but choose not to buy.
As for empathy for your particular case , sorry I’m just not feelin’ it. I’ll save it for people who don’t “ have substantial assets and a well-above medium family income”
But let’s see how much empathy you get from others here.
Good grief. Time to spend some of those “substantial assets” and buy a window A/C for your family & pets.
@Patrick Nice deflection.
The example I highlighted to you was not my own. I was trying to provide a typical scenario for an average young family in this city, and I still don’t agree that finding a creative mortgage broker in a rising rate environment during a time of great economic uncertainty is the best solution.
I actually had a townhome in Langford before I moved into my rental. We sold because it wasn’t a great fit for us with our new child. Busy road, no sidewalks, no walkable parks or playgrounds. We have substantial assets and a well-above medium family income. We could probably stretch today and buy something move in ready in Gordon Head or Tanner Ridge. Why don’t we? For the reasons I opened with. Comfortable price max for us would be ~$850k and I’m happy to wait for something that meets most our needs without significantly overpaying or feeling pressured due to FOMO.
fatiguedBuyer,
I was thinking of you when AlexandraCdn posted a few core Victoria (Saanich) townhouses around 600K, that were on the market for over a month. Listed at $619k and one sold for $600K. I was wondering if you’d buy one. Or at least make a stink bid on this townhouse sitting for over a month.
3 bdr, pet friendly, and one was “gorgeous” according to one member here.
It seems to be still for sale, on Shelbourne , and the details are here. https://househuntvictoria.ca/2021/06/20/a-brief-history-of-credit-measures/#comment-80878
Anyway, given that this would result in a mortgage of about $2,150 per month, with 79% of that going to forced savings over time, maybe you could let me know the reasons you aren’t pulling the trigger on homes like this. Rush4life did a detailed analysis of a $600k townhome and found that you needed $100k income to qualify, but that was a strata and this one isn’t. You did mention $90 k income, but there’s lots of stories about creative mortgage brokers getting people into homes in situations like that.
What’s wrong with a townhouse like that? If it’s price, what is your max price?
@Introvert
lol nice one.
“We pull out the ‘NIMBY Handbook of Bad Faith Arguments that Work’ and pick 4-5 and send it back to Saanich as our response”
What do they think happens to the total cost of a development each time the developer has to go back to the drawing board to make things “more affordable”? I wish these community associations would cut the crap and just be honest about not wanting change or increases to density. It’s totally fine to not want change, I get it! Just be sincere!
LOL wasn’t me. I did write them an email back asking how I can actually get involved though. I haven’t seen a single opportunity to actually contribute to the GHRA. Their responses seem to be written by the board with no real input from residents.
I bet it was Leo!
Excerpted from the Gordon Head Residents’ Association’s summer newsletter:
@Patrick Calling Victoria affordable because it’s less expensive than Hong Kong or any of the other countries in that list is like saying the temperature last weekend was cool because it was hotter in Lytton.
Victoria is undeniably unaffordable, and so is Hong Kong and many others on that list to those who aren’t high income earners or have generational wealth. Can we stop with the gaslighting on this blog and have empathy for those who haven’t “got theirs”?
Victoria housing, particularly housing that is family suitable, is scarce and unaffordable. I don’t need statistics or international rankings to tell me that, just like I don’t need anyone to tell me how hot it was earlier in the week. It got up to 36.5 INSIDE my poorly-insulated 50s rental by the way, but I’m sure my landlord was enjoying his AC 🙂
Yes, and those Hong Kong Canadians will appreciate the bargains in Canadian house prices.
They are used to paying 6X higher price/income rate in Hong Kong (45) than Canada (7). (Source: numbeo)
Canada, in 2021 after the massive run up, is still 16th cheapest price/income out of 109 countries. And also the 16th most affordable out of 109 countries. That’s one reason people are wrong to diagnose me as “delusional “ when I refer to Victoria prices as “affordable”.
https://www.numbeo.com/property-investment/rankings_by_country.jsp
Love the name!
You can stop calling bs, because here is the table number you’ve requested: “Statistics Canada, table 46-10-0043-01” with the source of the 69% home ownership data that I reference.
Since 2016, statscan releases home ownership data every two years, not five as you’ve said. They started a biennial Canada Housing Survey. The results for the 2018 Survey were released in Nov. 2019 and it shows 10.138 million owned homes out of 14.790 million which is 68.55%. Because 10138/14790= 68.55% = 69% (rounded)
Here is the statscan data backing up all of the above, with links to the table number referenced
https://www150.statcan.gc.ca/n1/pub/12-581-x/2020001/h-l-eng.htm
FYI, Statistics Canada conducted the first Canadian Housing Survey in 2018, and intends to run it biennially until 2028. The data are being released in stages.
Anyway, you should be happy to know that some statscan housing data comes out every two years now, and you can stop labelling posts and articles “highly suspect” and “calling bs” on anyone who references that data.
Here’s info about Canada Housing Survey:
Methodology https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&SDDS=5269
Canada Housing Survey 2018: https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&Id=793713
Canada Housing Survey 2020: https://www23.statcan.gc.ca/imdb/p2SV.pl?Function=getSurvey&Id=1293147
The Globe and Mail article below mentions this paper:
The economic effects of density: A synthesis
https://voxeu.org/article/economic-effects-density-synthesis
This focuses a lot on Hong Kong Canadians returning to Vancouver and what that is starting to look like:
A new wave of buyers expected to hit B.C. real estate market
https://www.theglobeandmail.com/real-estate/vancouver/article-a-new-wave-of-buyers-expected-to-hit-bc-real-estate-market/?ref=premium
The wave is already happening according to Jacky Chan, president of BakerWest Real Estate Inc., who works closely with developers. BakerWest is the new Vancouver division of Baker Real Estate, Canada’s largest preconstruction sales and marketing agency, Mr. Chan says.
Mr. Chan says Baker’s sales are showing dramatic signs of a new wave of buyers.
Not really as teardowns have a second best use which is often very close in price to the best use, assuming best use is a teardown.
Yes – it comes off the lot value.
That is fine, but can’t complain about cost of housing after your are done waiting 6 months of a building permit to start hand deconstruction, step code, and a ton of other bureaucracy. We are currently spending $52,000 on a non-sense sidewalk required by the COV on a 1,644 sq/ft home in the Oaklands area. Sidewalk is literally to no where on a dead-end street. True, irrelevant how much I spend the market will set the price of the home; however, I won’t be buying any corner lots anytime soon to attempt to subdivide. Long term effect, less inventory and also won’t be selling the property as don’t have any interest in buying anything with current non-sense rezoning process/costs in place.
We need to drive down energy use of buildings, and step code is a good way to get there, but we need to relax regulations on the other side. If we prezoned areas for higher density we could say every new build needs to be Step 4/5. With pre-zoning you can ask for a lot, because the massive uncertainty and associated cost is gone. As Marko said, it’s not just the cost impact of the delay, it’s that no one but the biggest developers can even stand to take the risk in the first place. If we made the process predictable, smaller builders can plan for the costs and pull the trigger on smaller builds like townhouses. Instead we are attracting more and more mega-developers proposing mega-projects because that’s what’s required to make money with high land values and no idea what you can actually get through rezoning.
All the municipalities have already identified where they want growth to happen in their official community plans. With a stroke of the pen they could upzone those areas and get the growth to happen, but instead we are saying “we want growth here” and then telling anyone that wants to add density to where we want it to go through a years-long fight with the city and neighbourhood to actually build. Totally crazy system.
+1, 100% agree.
However, if input costs were lower you would see even more construction currently (more supply) and when the market turns construction would not come to a stop (again, more supply). The new hand deconstruct policy the COV is introducing….you think that policy and a ton of other BS truly has no impact on the pricing of the final product? At the end of the day the 30k extra to hand deconstruct a home will have to come from somewhere. You pile on the BS, less is built, and you have the same amount of buyers competing for the limited supply; therefore, pushing prices up.
How many townhome complexes are being built in the COV right now? If the rezoning process and non-sense regulations were eased and there were 20 townhome complexes currently being built that would have zero impact on prices? The 20 developers would get together and fix prices? No, they would compete against one another.
I’ll bring up my example again. I have a newer studio downtown I recently rented out for the same price as before. Only three inquiries in a week. I have a SFH I rented out and it was 50 emails in three hours at $700 more than my previous tenants. Why? A TON of studios/one bedrooms have been built recently, zero SFHs for rent. Supply is pretty important imo.
“Marko, it’s not a lack of construction unions keeping housing here at its bargain basement pricing.”
This. Unless we get to a bear market, it’s not the input costs that are driving the price of housing. Builders sell at what the market can bear. If wages go up, they stop building. No indication this is happening, based on the fact that (apparently) construction workers are hard to find.
A lot of the complaining about new regulations like Step Code* conveniently ignore this fact- it’s buyers willingness to pay that’s driving the cost of housing, not the cost of building. This could change, obviously, if the market slows, but it’s actually not a bad idea to improve regulation in this kind of a market when we’re building as much as we physically can..
Private liquor retailers are charged the BC Liquor Store retail price less 16%. The base gross margins BCL start at an estimated at 80% whereas as private liquor stores start at 16%. How is a private retailer expected to pay the same wages based on those margins?
Definitely. 30 sales over $2M in June, no sign of a slowdown there. 10 sales over $3M which is the third highest month on record.