How sensitive are we to rising rates?

This post is 2 years old. The data and my views may have since evolved.

Interest rates have been in the news again lately, with Scotiabank making an agressive forecast that inflation will stick around and the Bank of Canada will raise rates 8 times to 2.25% by the end of 2023.   Others think we will likely see low rates for longer, or even get into negative rates like we’ve seen in much of Europe.   The first thing to realize is that there’s no reason to believe that anyone has any information about where rates are going.  Predictions of interest rates by experts (and non-experts) have been fantastically wrong for decades.

So rates could be going up, down, or sideways.  I’ve written a lot about affordability in our market, most recently looking at what the current levels of affordability might tell us about the direction of house prices and condo prices in the medium term.  In short, though we’ve seen a big jump in prices across the board, low rates have kept affordability for detached houses at levels where we’ve seen roughly flat medium term (5 year) prices in the past, while condo prices still seem to have some room to run.  Both seem to have some room to get less affordable and market conditions certainly seem to point that direction.

It’s worth remembering that affordability depends on the trajectory of incomes and interest rates, and though there has been correlation between affordability and price movements in historical data, the error bars and timelines are such that it can’t be used to predict short term price movements.

What happens if rates go up or down?   Well here is the impact on affordability if rates went down 1% (rates that we’ve seen in Europe), or up 1% and 2% from current levels.

A 1% drop in rates would obviously improve affordability and support further price gains.  If we saw a 1% increase in rates it would stretch affordability to levels roughly equal to past peaks (assuming continued deterioration in affordability for single family homes).  I think a 2% increase would put affordability into dangerous territory compared to the historical ranges.  Of course interest rates don’t rise overnight as shown on this chart, but with signs pointing towards further short term price gains, it doesn’t look like we have a lot of headroom for rates to rise anytime soon without putting house prices at very uncomfortable levels relative to incomes.

Of course affordability at our current rates only tells half the story.  On the upside, you could discount principal repayments and look at interest and opportunity cost only: measures which aren’t stretched from a historical perspective.   On the other end we have increasingly large hurdles set up for buyers in the form of the stress test which is around 3% higher than contract rates, and even more importantly the huge jump in down payments required just in the last year as the median house crossed the million dollar mark where 20% down payments are required.   Many people cannot jump those first hurdles, so it hardly matters how high the following hurdles are.

From the point of view of barriers to house ownership, 2021 was the biggest deterioration in single family home attainability in our history.   It’s worth noting that the Liberals did promise to raise the cap to $1.25M and tie it to inflation which would drop the required down payments again, but like any election promise it’s far from a sure thing.

106 Comments
Newest
Oldest Most Voted
Inline Feedbacks
View all comments
Perpetual Student
Perpetual Student
December 2, 2022 11:12 am

Always interesting going back in time and reading what the thoughts were before major events and policy shifts.

caveat emptor
caveat emptor
November 1, 2021 3:13 pm

Energy costs – Family of four – 1912 Fairfield house, 1.5 stories plus 6’10” partially finished basement, 2020 totals. Central gas heating plus baseboards in some of the added on areas upstairs. All but a few small single glazed windows replaced with newish double glazed:

Natural gas – $1042
Electricity – $645

Call it $1700 for a year of inefficient living (I try to conserve but the kids aren’t great).

Halibut
Halibut
November 1, 2021 12:23 pm

“What did 4018 Beam Crescent sell for?
$1.7 million, 15 offers.”

We were one of those 15. I thought someone might actually pay a bit more.

Sidekick
Sidekick
November 1, 2021 12:17 pm

but not in terms actual heat delivered

My mistake – I didn’t account for your primary heat being a heat pump. That would mean you’re getting double to triple the heat energy input from a unit of electricity. So I suspect you’re correct that your stove isn’t adding that much. If your COP is 2.5 then the calc would be 2900 * 2.5 = 7250kWh input / 195m2 = ~37kWh/m2/yr plus a little from the wood stove.

We scored 4.82 ach

Thanks for sharing.

QT: the triple glazed lowE energy saving would be something like 2% higher in our environment

Typically, this is not the case. Cardinal’s own literature shows the best double glazing at R-5 vs the best triple at R-7.7 (or 35% better, https://www.cardinalcorp.com/source/pdf/tsb/ig/IG05_06-2020.pdf). European triples can be R-10+. You can also upgrade the fill from Argon to Krypton for higher performance.

But glass is much more complex, since the best R-value isn’t always best if it reflects a bunch of free heat from the sun. It’s usually a combination of how much heat the glass lets in and how much it retains that gets the best overall performance. In your case going to triple may well have been only a 2% difference overall.

late30
late30
November 1, 2021 11:12 am

noticed Era is pushing towards 1000 per sqft…… believe it or not…

QT
QT
November 1, 2021 11:04 am

“The windows alone gauranteed triple glaze with enchanced low E, that’s at least 1k per opening average in white vinyl let alone black or any upgrades.”
Sure, building to step 5 does cost more up-front and less on the operations side. There are design considerations which can be made to reduce the price increases and with the increasing availability of high-performance components, prices will continue to come down.

This spring, I replaced my house windows (22 openings) with double glazed Cardinal LowE-366 argon filled (highest lowE coating possible, 13% higher energy saving rating than regular lowE), and it cost roughly half of triple glazed lowE price. And, If I remember correctly the triple glazed lowE energy saving would be something like 2% higher than double glazed lowE in our environment. In another word energy saving for my house calculation is roughly $375-450 over 25 years which is not economically or environmentally friendly to go with triple glazed in our environment.

Mr. Buddy
Mr. Buddy
November 1, 2021 10:25 am

Sidekick:

Wood score is probably correct, but not in terms actual heat delivered. Will do a test next time there’s two nights in a row with similar low temperatures. I wouldn’t believe that stopping using the wood stove would increase our total heating energy used by more than 5-10%- we just don’t have it on often enough.

How did you do on your blower door score? Gotta be careful with combustion appliances (wood stove) and tight houses!

We scored 4.82 ach WITH the basement door open, but I didn’t keep a record of it when he kept running it after I closed the basement door. I recall it dropping by more than half. All of the recommended high priority upgrades were in the basement- but I chose to just keep the door closed instead. 🙂

Marko Juras
November 1, 2021 9:43 am

A month of records for the Victoria market.

average over $1.3 million…this is getting insane.

koala
koala
November 1, 2021 9:31 am

Marco. Meant to thank you for your insight! Found an inspector so fingers crossed.

Inspector
Inspector
November 1, 2021 9:27 am

“I miss the days of the old A&W drive in and quiet village after 5pm.”

I agree but I also recall a little further back when both the Oak Bay theatre and the Club Tango used to unload hundreds of patrons into the village late at night. Pretty lively place back then. Also, a point of trivia, the Club Tango is where The Collectors played (soon to become Chilliwack).

GC
GC
October 31, 2021 12:48 pm

The tweed curtain is strong. I miss the days of the old A&W drive in and quiet village after 5pm. It also used to be quick to get from Oak Bay to places now it’s a pain in the ass with all the traffic reduction. Also in the Mid 90’s you didn’t even want to cross the bridge and look at the Vic West now. Perhaps on of the most practical and functional neighborhoods for a professional.

Frank
Frank
October 31, 2021 12:33 pm

uu- Interesting observation concerning the privileges Oak Bay has over other areas. I wonder how much impact political contributions from Oak Bay residents has in maintaining the status quo.

uu
uu
October 31, 2021 11:51 am

I don’t believe there is one single bank/credit union in Vic West, Esquimalt or View Royal yet pretty well every major bank has a branch in Oak Bay. Esquimalt was forced into giving up their police department and made to amalgamate with VPD. Not Oak Bay with virtually the same population. The treatment plant forced on Esquimalt waterfront. Not Oak Bay. Not one gas station in Oak Bay. Yet every other municipality has them. They are an elite society alright.

totoro
totoro
October 31, 2021 10:36 am

but the projection for an outright decline seemed somewhat insane to me

Seemed odd to me, especially as they show an increase in dwellings overall, but it looks like they are basing it on an aging population with more retired singles and couples per household.

Not to mention the sky high property taxes to address their infrastructure deficit amongst fewer residents. That’s always desirable.

Oak Bay is already raising rates for services to cover infrastructure upgrades to water/sewer. Property tax rates remain relatively low.

But seriously this is exactly what will force the province to step in and override the municipalities on housing. Same thing happened in California we are just 5 to 10 years behind

I think so too, but I’d expect that the restrictive covenants that apply to areas like Uplands and Broadmead will stand up to provincial legislation. Municipalities overall will be left with fewer choices on density and infill housing, as it should be given the situation and impossible pressures put on municipal councillors to act for only those who vote in their area despite a housing crisis.

2wheels
2wheels
October 31, 2021 9:49 am

Thanks Leo, super informative as always. CRD should bring you on as a consultant.

Sidekick
Sidekick
October 30, 2021 1:55 pm

Last year we used maybe 1/3-1/2 cord, which definitely is not nothing, but not a huge amount either

It’s near impossible to quantify since there are so many variables in play, but that’s probably about 9000kWh (1800kg dry wood x 5.14kWh/kg = 9200kWh).

2900 + 9200 = 12,100kWh / 195m^2 = 62kWh/m^2/yr. That sounds right to me.

How did you do on your blower door score? Gotta be careful with combustion appliances (wood stove) and tight houses!

Newishhomeowner
Newishhomeowner
October 30, 2021 1:01 pm

“just continue railing on homelessness. It really helps solve the problem.”

When did i rail on the homeless? I was commenting on lisa helps/council….You should read my comment again because you completely missed the point.

totoro
totoro
October 30, 2021 12:58 pm

I never really understood what made oak bay great. The almost 40% price preminum to be in oak bay while being surrounded by the garbage of downtown on all sides seems crazy. Also, Oak bay is one melting glacier away from becoming a swamp.

Oak Bay is pretty nice. A distinct lack of sketchiness so it feels safe, charming homes and back alleys, nice parks and walking distance to clean beaches. Other areas of Victoria are great as well. People tend to like and get attached to where they level so it is a mix of objective and subjective. What is the case is that Oak Bay’s rate of appreciation has been a bit higher than some areas, and their zoning is more restrictive and degree of neighbour investment in keeping things the same is higher – which I do find annoying.

As far as melting glaciers go, the climate modeling doesn’t show that most of Oak Bay will become a swamp. Most of Oak Bay is about 20 meters above sea level. Sea level is predicted to rise 30cm by 2050 as 1/4 of the glaciers melt. Even in the 4 degree climate change model the ocean is not going to rise 66 feet/20 meters to turn Oak Bay into a swamp if I read the data correctly. Areas at risk are areas like Richmond, Metro Vancouver and local places like the Esquimalt Lagoon and inner harbour/Dallas road.

The United Nations predicts the world’s oceans will be at least one metre higher by the end of the current century. After another 100 years, it could be four times that.

https://www.cbc.ca/news/canada/british-columbia/climate-change-in-b-c-here-s-how-2050-could-look-1.4146580

Mr. Buddy
Mr. Buddy
October 30, 2021 12:24 pm

Sidekick:

Definitely really good numbers, especially if there is EV charging in there. Did you do more than just insulation and windows? LEDs, induction cooktop etc?

We have an induction stove, and LED lighting throughout (but that’s pretty normal now.) I would never not have an induction stove anymore- it’s sooo much better than even a gas range, and we’re fairly enthusiastic cooks.

One thing I did forget to mention, that definitely skews our numbers: we have a recent wood stove, but use it mostly “aesthetically”- we put it on in the evenings as mostly as entertainment. Maybe 1-3x/week tops, from about 7-9pm. Last year we used maybe 1/3-1/2 cord, which definitely is not nothing, but not a huge amount either. I’ve only had it on once this year so far, now I’m thinking I should forgo it for the season to see how much our consumption goes up.. 🙂

Mr. Buddy
Mr. Buddy
October 30, 2021 12:18 pm

Leo just posted the legislative targets in the CRD Growth Strategy- Esquimalt is going to massively exceed those targets, unless their population/unit drops precipitously.

According to this: https://esquimalt.ca.legistar.com/View.ashx?M=F&ID=47426&GUID=1575330F-9DD4-4A6E-8821-D684A4A0AE90

Esquimalt has 2271 units in process right now- there’s a massive amount of building. Some of them might not get built, but if Esquimalt had 8300 units in 2011, that’s more that 25% increase in process now.

Dad
Dad
October 30, 2021 11:48 am

Esquimalt seems pro development to me. As of 2016, the population was 17,600. Should surpass 18,300 in the next census I would think.

It’s come a long way since I was a kid, and I think there is still a tendency to overlook it because of its previous reputation as sketchy crime-ridden part of town.

Josh
Josh
October 30, 2021 11:24 am

Oak bay is one melting glacier away from becoming a swamp.

Ah yes, all those local glaciers certainly affect local environments.

These idiots put homeless people in beacon hill park….that should be considered a criminal act

A ton of money was spent converting hotels to housing but make sure not to mention that – just continue railing on homelessness. It really helps solve the problem.

2wheels
2wheels
October 30, 2021 11:05 am

Interesting table @leo. Why would esquimalt population and dwelling growth lag behind so many other districts? Is their council that opposed to densification? There are so many awesome areas of esquimalt but also lots that would benefit from development.

Newishhomeowner
Newishhomeowner
October 30, 2021 10:07 am

I never really understood what made oak bay great. The almost 40% price preminum to be in oak bay while being surrounded by the garbage of downtown on all sides seems crazy. Also, Oak bay is one melting glacier away from becoming a swamp.

Yet, the value lies in their urban planning. People on this site with cry and whine about oak bay not allowing more density but oak bay shouldnt care about that. The council have a duty to protect/listen to oak bay residents first and foremost. Since most people are NIMBY by nature, there is something to be said about oak bay. They seems to listen to their residents.

The flip side of this is lisa helps and dt vic. These idiots put homeless people in beacon hill park….that should be considered a criminal act

Introvert
Introvert
October 30, 2021 9:03 am

You really gotta get into Oak Bay introvert. CRD actually projects a big population decline for them by 2038

That’s amazing.

If OB can (continue to) maintain relatively low density in the face of regional population growth, it will only make OB more desirable, IMO.

patriotz
patriotz
October 30, 2021 7:35 am

Ohh I see, so university costs also have no effect on them?

We weren’t talking about university costs. But since you brought it up, I’ve said before on this forum that there is something wrong with university becoming the new high school in terms of future opportunities. I think it impedes class mobility. In the past, when enrollment was a lot smaller, both those who did go to university and those who didn’t were better off. Better financial support for those who did go and better opportunities for those who didn’t. Like in Germany today, for example.

James Soper
James Soper
October 29, 2021 10:55 pm

So, James is one of the 5% of inspectors in Victoria that is actually competent

Thanks Marko, I’ve recommended you as a realtor too 🙂

Sidekick
Sidekick
October 29, 2021 8:57 pm

But $1650 (13351 kwh) for the year comes straight from BC Hydro.

Definitely really good numbers, especially if there is EV charging in there. Did you do more than just insulation and windows? LEDs, induction cooktop etc?

To be fair, the NR Can audit required us to keep the door to the uninsulated/unfinished basement open during the blower door test, so maybe we’re better off than just better than code.

What did you blow?

If we did achieve Step 5, then it’s a hell of a lot easier to do than I’d have thought. Maybe I should go into renovating homes for energy efficiency.

I think it’s unlikely you’re running at 15kWh, but maybe you’ve got excellent solar exposure? EnerPHit, the PassiveHouse retrofit program, puts the target at 20kWh/m^2/yr because it’s extremely hard/$$$ to hit 15 in a renovation. To hit 15, I’d expect roughly R40-effective walls, roof, and sub-slab/foundation, plus triple glazing and a good HRV. Blower door at 1 or less as well.

Areas where my calculations could be off…Assumption that average of total May/June/July/August – hotwater = “baseload” might be off.

This would be my guess, in which case your base load is stellar. Good job! At these numbers you’re heating your entire house with a hair dryer/small cube heater running 16 hours a day (on average in winter, and assuming you keep your house at 20C).

Bluesman
Bluesman
October 29, 2021 6:39 pm

With respect to private schools both myself and my siblings went to smus. However we only went there in our early years and did not go through to grade 12. I remember the old man thinking the fees were a rip off – lol. However, what it did give us was drive and study habits which was key. There were also many of my peers there who couldn’t have cared less about that and didn’t bother. Wouldn’t call them lazy, they were just kids who had different priorities and maybe the parents didn’t so much care or pay attention. Perhaps the parents were preoccupied with ‘other issues’ to notice. There was a high expectation to succeed in my house.

We are all doing alright in life and I do credit the incentive and also pressure and expectation to learn as part of the benefits.

And to a post further below, yes, there are most certainly addiction and other issues affecting students at SMUs like most any other student or adolescent on the face of the planet.

Bluesman
Bluesman
October 29, 2021 5:59 pm

Thanks Marko!

Marko Juras
October 29, 2021 5:56 pm

what did 4018 Beam Crescent sell for?

$1.7 million, 15 offers.

Bluesman
Bluesman
October 29, 2021 5:54 pm

Hello Leo, what did 4018 Beam Crescent sell for?
Please and thanks!

Marko Juras
October 29, 2021 5:45 pm

My question; any other inspectors HHV can recommend in case James is unavailable?

So, James is one of the 5% of inspectors in Victoria that is actually competent. Another really good inspector is Russ McCarthy from Barnes & Company but you have to specifically ask for Russ himself.

Any insight I should have re; pre-inspection?

If built before mid 1960s good idea to scan for an oil tank. If built before early 1980s good idea to scope the drain tiles.

Check all the city permits. For electrical and gas it won’t be in the city permits so check https://portal.technicalsafetybc.ca/permitsearch , then there are location specific things to check like https://www.archdatarequest.nrs.gov.bc.ca/ etc., etc. your agent should be doing a lot of this in the background.

Marko Juras
October 29, 2021 5:42 pm

Seriously? Most people neither want nor need private schools for their kids, expensive sports, etc., and whatever these things cost has no effect on them.

Ohh I see, so university costs also have no effect on them? Rich kid goes to university has everything paid for by parents versus poor kid goes to university and comes out with 100k worth of student loans. Who cares, all the same. It is only the lack of help with down payments that puts people without well to do parents at a huge disadvantage….I care to disagree.

koala
koala
October 29, 2021 5:34 pm

I know this topic has been broached in the past but am unsure how to search previous posts. I am planning on making an offer this coming Tuesday. Given crazy market conditions, I would like to get a pre-inspection done so as to offer with no conditions. I have used James Parr from Safe and Sound in the past and thought he did a great job. I left him a voice mail but the timeline is tight.

My question; any other inspectors HHV can recommend in case James is unavailable? Any insight I should have re; pre-inspection?

For that matter, does anyone have insight on the market in Brentwood Bay?

I thank you all in advance for your help and advice!!!

patriotz
patriotz
October 29, 2021 4:58 pm

What is the difference between parents chipping in $200k for a down payment and parents sending their kids to private schools, enrolling them in expensive sports like hockey, etc.

Seriously? Most people neither want nor need private schools for their kids, expensive sports, etc., and whatever these things cost has no effect on them.

Josh
Josh
October 29, 2021 4:55 pm

did anyone else get a “note” today in the mail?

I’ve seen “CASH 4 HOUSES” signs with a personal number on poles by stoplights. Same thing is happening in Ontario. I think it’s numbered corps acting on behalf of larger investment firms. Would love to know for sure.

Mr. Buddy
Mr. Buddy
October 29, 2021 4:49 pm

Happy to share my working with you. 🙂 I’m surprised too.

Total Household Consumption (Oct 1 2020 to Oct 1 2021): 13351 kwh
Hot water: 3120 kwh
Average of May/June/July/August: 610 kwh/month, works out to 7331kwh yearly.

Remaining load is 2900kwh.

To be fair, the NR Can audit required us to keep the door to the uninsulated/unfinished basement open during the blower door test, so maybe we’re better off than just better than code.

I did put a 1″ layer of solid foam inside the 2x4s (and the strapping over the foam for the wallboard creates a 1/2″ air gap,) but very little effort was spent on air sealing. The incremental cost of this foam was very low once the walls were down.

If we did achieve Step 5, then it’s a hell of a lot easier to do than I’d have thought. Maybe I should go into renovating homes for energy efficiency. 🙂

Areas where my calculations could be off:
– Device for measuring hotwater could be not accurate (https://aquanta.io/, supplied as part of a trial by BC Hydro)
– Assumption that average of total May/June/July/August – hotwater = “baseload” might be off.

But $1650 for the year comes straight from BC Hydro.

Sidekick
Sidekick
October 29, 2021 4:36 pm

In my opinion density > step code and this doesn’t even factor in commuting, etc.; therefore, I don’t understand how it is okay to allow a SFH home to be built to Step 3, but if you are building four townhomes on the SAME lot it has to be Step 5. It should be the other way around in my opinion.

I completely agree. I’d like to see them both at step 5.

I live in a horribly inefficient glass tower corner unit condo, all electric, my Dec/Jan bill $55. My portion of common strata hydro bill approx $35 so I am at $90 all-in.

Absolutely density > step code (in most cases at least), but hey those inefficient glass towers can be made way more efficient fairly easily too. It’s also pretty hard to compare across families/dwellings as we’re all different (number of occupants, square footage, time within dwelling etc.). I just added my numbers because it’s the same family with the same behaviors in all-electric dwellings.

Our annual energy costs (all electric) work out to around $1650/yr including taxes. Of that, hotwater is ~$385/yr, heating is ~$357/yr, and other loads (EV, lights, stove, etc.) are ~$900.*

$357 @ .12c/kWh = ~3000kWh/yr for heat. 3000kWh / 195 m^2 = 15.3 kWh/m^2/yr. Congratulations, you live in a step 5 / passive house.

Unless I’m missing something, that seems suspicious.

Patrick
Patrick
October 29, 2021 3:42 pm

Tutors aren’t helping the other kids become smarter, they’re helping them turn in good work, and study for a test. Those don’t make you smarter, they make you a B student instead of a failure. Majority of your mark isn’t a graded test in high school, it’s the work you hand in.

I’ve had tutors (private teachers) at various times, and it was a big help. If someone turns from a maths failure to getting a ‘B’ on a provincial exam, I’d consider them to be smarter in maths. If I was doing education again, I’d opt for as many one on one teachers as I could get. Allows you to learn much faster.
Taken to the extreme, if an ultra-wealthy person wants to learn to play guitar, and devote 40 hours a week to it…. If he hires a full time great teacher to be available at all times he’s going to progress much faster than on his own.

Mr. Buddy
Mr. Buddy
October 29, 2021 3:35 pm

I’ve commented on this before- we live in a 2100sq. ft. renovated 1910s house. Upgraded windows, fully insulated (took it down to studs to remove asbestos). According to NR Can audit, it performs slightly better than current code.

Our annual energy costs (all electric) work out to around $1650/yr including taxes. Of that, hotwater is ~$385/yr, heating is ~$357/yr, and other loads (EV, lights, stove, etc.) are ~$900.*

At $385/yr, really hard to justify spending more on windows etc. to get step 5.

  • We have one of those hot water tank meters, so the HW load is pretty accurate. I assume that the average of June, July, August are “baseload” as heat pump is off for those months. We did run the heatpump as AC for two days this summer during the 38C heatdome- cost us $3.85/day. Well worth it.
Marko Juras
October 29, 2021 2:29 pm

In winter 2020 I was in a Step 5 house (3000sq.ft all electric) and my Dec/Jan bill was $132, or 4.4c/sq.ft

I live in a horribly inefficient glass tower corner unit condo, all electric, my Dec/Jan bill $55. My portion of common strata hydro bill approx $35 so I am at $90 all-in.

In my opinion density > step code and this doesn’t even factor in commuting, etc.; therefore, I don’t understand how it is okay to allow a SFH home to be built to Step 3, but if you are building four townhomes on the SAME lot it has to be Step 5. It should be the other way around in my opinion.

Sidekick
Sidekick
October 29, 2021 2:19 pm

It says that they give scholarships to students that are on the very high end, taking them out of the public school (lowering the public school mark), and increasing the average at SMUS.

While this is true, the number of people on academic scholarship is a very small fraction of the population at SMUS. Probably statistically irrelevant. Possibly also negated by the people on athletic scholarship.

Sidekick
Sidekick
October 29, 2021 2:09 pm

But why can you build a 5,000 sq/ft monster home on Bear Mountain at Step 3…

I agree. There is little consistency across municipalities. At least the province is slowly ramping up the step code so that they have the same minimum.

I still don’t understand the real life math

Maybe Leo should do a survey of HHV owners and energy costs. Could be neat to see what ppl are spending and do a comparison.

Having said that, the general approach to costing PassiveHouse (similar to step 5) is to compare the additional monthly mortgage cost to the monthly energy savings. So +40K mortgage balance = ~$200/month, energy savings over code minimum = ?/month. Those spreadsheets have been done and the math depends heavily on interest rates and energy rates. Today, the expectation is you’d come out ahead of the game with the high-efficiency option. We all know energy rates are only going in one direction, and, most likely interest rates are too.

In winter 2018 I was living in a 1200 square foot duplex (built in 1990, all electric) and my Dec/Jan bill was $750, or $62.5c/sq.ft. In winter 2020 I was in a Step 5 house (3000sq.ft all electric) and my Dec/Jan bill was $132, or 4.4c/sq.ft. The step 5 house is vastly more comfortable (no drafts, even temps, no window condensation etc). No idea where a step 3 would land but it just goes to show there can be dramatic operating cost differences.

James Soper
James Soper
October 29, 2021 1:56 pm

Well of course. Tutors can, like any teacher, help to make you smarter. And SMUS kids’ parents have money to access tutors. But that contradicts your earlier statement that “Only smart kids I knew that went to SMUS went in smart (on scholarship)”

How?
Are you considering a B avg smart? I’m talking about exceptional people that would have gone to University on a full ride academic scholarship.
Tutors aren’t helping the other kids become smarter, they’re helping them turn in good work, and study for a test. Those don’t make you smarter, they make you a B student instead of a failure. Majority of your mark isn’t a graded test in high school, it’s the work you hand in.

Patrick
Patrick
October 29, 2021 1:04 pm

The main difference between those is access to funds for tutoring when you’re not up to snuff.

Well of course. Tutors can, like any teacher, help to make you smarter. And SMUS kids’ parents have money to access tutors. But that contradicts your earlier statement that “Only smart kids I knew that went to SMUS went in smart (on scholarship)”

So are you amending that to add ….”or had access to private tutors” ? And why not add “or studied harder” too?

Marko Juras
October 29, 2021 12:40 pm

So, in this case I would not purchase one of those condo’s if I were pregnant or wanted to be and you would. Simple as that.

There are statistically far far worse things like having kids later in life, but suggesting people have kids at a reasonable biological age isn’t a good narrative as more and more people are having kids later in life so we grasp on to other things.

It is like pets and the environment. I’ll recycle paper to make myself feel better, but I’ll completely ignore the carbon footprint of my dog. The dog food arrives at the pet store magically and the pet store is passive building heated with solar panels. Everyone loves pets so the narrative of pets not being great for the environment is not something anyone is willing to touch.

Marko Juras
October 29, 2021 12:35 pm

What I take from the Fraser Institute rankings is that academic success is correlated with socioeconomic status. It shouldn’t come as a surprise that Vic High, an urban school with a diverse catchment area, scores lower.

I graduated from Vic High in 2004 and I think it was the worst high school in BC that year. Teachers were great, but yea a little hard to get motivated when all your friends are skipping classes getting high. At SMUS on the other hand people were trying to outdo each other on the provincial exam scores. Socioeconomic status is a factor for sure.

Marko Juras
October 29, 2021 12:30 pm

Sure, building to step 5 does cost more up-front and less on the operations side.

I still don’t understand the real life math. The windows alone would be at least 10k more. I am guessing altogether 40k +/- over Step 3. Step 3 house would be what 2k/year on hydro? Assuming the Step 5 is 1k/year that is a 40 year pay back assuming you don’t have to upgrade/renovate before then.

If the city wanted to get serious, then they could look at other financial incentives (like reducing or eliminating service hook-up fees, reducing/eliminating sidewalk replacements etc.).

+1, I love how the city is pro-environment but requires replacement of perfectly functioning curbs/sidewalks/etc. Makes sense.

I just don’t think building to step 5 is as big of a technical hurdle as many people make it out to be. While I agree that it does cost more than a code-minimum building, that delta keeps getting smaller.

But why can you build a 5,000 sq/ft monster home on Bear Mountain at Step 3, but if you have a corner lot next to Hillside Mall you want to put up 5000 sq/ft split into 4 townhomes it has to be Step 5. Four families living next to amenities is already 10x better for environment than the 5,000 sq/ft monster house irrelevant of what code it is built to.

Just level the playing field and say everyone needs to build to Step 5 and call it a day.

alexandracdn
alexandracdn
October 29, 2021 12:05 pm

To each his own Caddy. We all have different opinions, I respect that. The world would be a very dull place if we all thought exactly the same way on every topic. So, in this case I would not purchase one of those condo’s if I were pregnant or wanted to be and you would. Simple as that. Actually, I don’t think the deal that Langford is offering is that great of one.

Sidekick
Sidekick
October 29, 2021 11:50 am

The windows alone gauranteed triple glaze with enchanced low E, that’s at least 1k per opening average in white vinyl let alone black or any upgrades.

Sure, building to step 5 does cost more up-front and less on the operations side. There are design considerations which can be made to reduce the price increases and with the increasing availability of high-performance components, prices will continue to come down.

If the city wanted to get serious, then they could look at other financial incentives (like reducing or eliminating service hook-up fees, reducing/eliminating sidewalk replacements etc.).

I just don’t think building to step 5 is as big of a technical hurdle as many people make it out to be. While I agree that it does cost more than a code-minimum building, that delta keeps getting smaller.

Dad
Dad
October 29, 2021 11:47 am

What I take from the Fraser Institute rankings is that academic success is correlated with socioeconomic status. It shouldn’t come as a surprise that Vic High, an urban school with a diverse catchment area, scores lower.

alexandracdn
alexandracdn
October 29, 2021 11:44 am

Many years ago I was able to put my daughter in St. Margaret’s school for grades 9 and 10. She was hanging out with a few of the wrong kids while attending Lambrick Park and I wanted to get her away from them. I was a single parent and worked full time 5 days per week (37.5 hrs), plus worked weekends part time. It was a struggle making those monthly payments as I had a mortgage to pay as well. That school also bragged about the academic achievements of their pupils. The thing was, the only reason they would “allow” me to enroll her was if she had at a minimum of a B+ average; a standard that she met. So naturally, most kids did graduate from there with a higher point average than public school children.

Cadborosaurus
Cadborosaurus
October 29, 2021 11:44 am

Re: shaming parents for buying a condo next to a highway for air quality effects on kids health.

Juxtapose that next to the potential health effects of not buying one. These are going to be entry level condos so I wouldn’t assume they’d be the first choice of any affluent family that could afford something better, but they will be the only choice of many families faced with this or renting. Buy one and get a leg up with downpayment assistance from the city, therefore a bit more financial breathing room later for groceries, sports, childcare etc, or pay today’s rents and make cuts in all other areas to do so. Also risk renoviction if paying established rent somewhere lucky.

I’ll bet $5 a child in a situation where their parents own their residence in this city comes out further ahead, health and financial wise, 20 years later even if that first home was right next to the highway.

James Soper
James Soper
October 29, 2021 11:39 am

Since their exam marks (77) are higher than BC average (69), and higher than public schools (oak bay 72, Vic High 64). If they didn’t, as you say, “go in smart”, they “went out smart.”

No it doesn’t.
It says that they give scholarships to students that are on the very high end, taking them out of the public school (lowering the public school mark), and increasing the average at SMUS. When you have only 100 kids in each high school grade, getting some exceptional students while being able to kick out the bad ones can really boost that average.

They didn’t know Calculus in gr.10 because they were taught that in school.

Overall Fraser Institute ranking of SMUS to be 27th best/252 schools (oak Bay is 82/252, Vic High is near the bottom 227/252)

The main difference between those is access to funds for tutoring when you’re not up to snuff.

Patrick
Patrick
October 29, 2021 10:59 am

gifting of down payments should face some sort of taxation.

You’ve boasted on this site about your stock profits, which are taxed less then income. Sounds like you have an advantage with down payment saving over someone whose main source is income. Since you seem determined to level the playing field for down payments, shall we dream up “some sort of taxation” for you to face when you buy your home too?

Mr. Buddy
Mr. Buddy
October 29, 2021 10:56 am

To be fair, it’s not entirely the municipality’s fault. Local governments wanted the power to mandate low-carbon buildings, and all they got was the Step Code. Step Code does not necessarily result in low carbon buildings.

For small buildings, electric baseboards/ heat pumps and electric hot water tanks get you 98% of the way to zero-carbon, and have very low upfront/capital costs. For affordable/low-end market housing, seems like the way to go.

As a result of the Province not being willing to admit that natural gas is not a realistic path to zero-carbon buildings, they managed to create a very complicated regulatory regime that drives up construction cost for little benefit.

Patrick
Patrick
October 29, 2021 10:49 am

Only smart kids I knew that went to SMUS went in smart (on scholarship).

That says something good for SMUS then. Since their exam marks (77) are higher than BC average (69), and higher than public schools (oak bay 72, Vic High 64). If they didn’t, as you say, “go in smart”, they “went out smart.”

Overall Fraser Institute ranking of SMUS to be 27th best/252 schools (oak Bay is 82/252, Vic High is near the bottom 227/252)
https://www.compareschoolrankings.org/

Marko Juras
October 29, 2021 10:39 am

How about the city cuts the permitting costs to offset the extra cost of the modelling / consulting. It’s not like step 5 is hard to build.

The windows alone gauranteed triple glaze with enchanced low E, that’s at least 1k per opening average in white vinyl let alone black or any upgrades.

Sidekick
Sidekick
October 29, 2021 9:11 am

Yeah that’s so dumb

Is it though?

How about the city cuts the permitting costs to offset the extra cost of the modelling / consulting. It’s not like step 5 is hard to build.

Marko Juras
October 29, 2021 9:02 am

Yeah that’s so dumb.

What is the point of doing all these reports/consultations/etc., and then coming up with something that anyone with any common sense can look at and determine right off the bat nothing will be built because of how ridiclous the policy is? Only think I can see is keep everyone busy with nothing and create more staff positions.

James Soper
James Soper
October 29, 2021 8:13 am

It isn’t like every kid coming out of SMUS is smart.

Only smart kids I knew that went to SMUS went in smart (on scholarship).

I am sure there are individuals with addiction and other issues at SMUS as well

100%

Marko Juras
October 28, 2021 10:37 pm

My point was more a person being gifted the means to purchase a home, really isn’t an achievement of that individual.

So you send the kid to hockey and language camps and they suck at hockey and have no talent for languages, but they still had an advantage in potentially getting ahead. It isn’t like every kid coming out of SMUS is smart. I am sure there are individuals with addiction and other issues at SMUS as well, but I would bet the average SMUS graduate 20 yrs post graduation has a higher average income in relation to a public school in a poor neighborhood.

Sure, some kids won’t take advantage of the gifted down payment; however, it will help the average kid leap frog their peers. If someone helped their kid into a home in 2015 imagine how much further they are ahead versus a kid who had to save for a down payment for the last 6 years.

I found the toughest component of accumulating wealth was getting going initially (paying off student loans, getting together the down payment for the first property and funds to invest in markets). When you have money then it isn’t that difficult to make more money….if you have 10 mill you buy Telus and there is $500k in dividends every year. It kind of makes sense financially if every generation in the family helps the next to get the ball rolling.

Also, from experience of having worked with 100s of buyers I don’t get the feeling the buyers are putting parents under pressure. Most of the time what I see is parents pushing the purchase and offering to assist to with down payment or grandmother dies and the million from her teardown in Oak Bay is partially passed straight onto the kids (her grandkids).

Umm..really?
Umm..really?
October 28, 2021 9:59 pm

Life isn’t fair, if you are born into a rich family on average will have more opportunities including home ownership.

I wasn’t griping about fairness. You presented a bit of a false analogy in presenting your premiss. It is a parental duty to provide your children with every possible advantage. With your examples of language and hockey camps, there is still a component of individual achievement when presented with the opportunity (they still had to learn the language or develop a skill, no matter the opportunity the individual still has to achieve on their own). My point was more a person being gifted the means to purchase a home, really isn’t an achievement of that individual. For financing tests and mortgage approvals, the gifting of a down payment does not establish a history of fiscal discipline and finacial management skills to demonstrate the ability to save or manage debt (skipping an important part of understanding what it takes to manage a household “the lazy part”). As well, the gift in many of the situations in necessarily from wealthy parents, just parents that have the ability to draw debt against assets and may be under pressure from their children to help them buy a home. Putting your parents under a financial strain and making their retirement possibly more difficult after they already invested so much into that person they brought into the world, seems rather self-centred and lacking consideration (the loser part). As long as a person is comfortable in their own skin the opinion of anyone else other than themselves about what they do is not really relevant anyways. So, the fix, gifts should be weighted differently when approving total borrowing because they don’t establish an ability to manage finances and the gifting of down payments should face some sort of taxation.

Marko Juras
October 28, 2021 9:53 pm

I think they are actually going to take away the on-site affordable housing requirement. The consultant report said they weren’t economically viable

Still leaves step code 5

Marko Juras
October 28, 2021 7:57 pm

More useless housing propaganda

https://engage.victoria.ca/missing-middle-housing

https://www.youtube.com/watch?v=J4h3fyalDkY

Sounds nice, right? Affordable homes where you want to live in Victoria.

Then you actually starting reading through the fine print….b. and d. what a joke….aka makes project completely non-feasible, aka nothing will actually get built.

“6. That Council direct staff to prepare a zoning bylaw amendment that would allow fourplexes
as a right on lots between 6000 and 7499 square feet and sixplexes as a right on lots 7500
square feet or larger as long as:

The proposed buildings conform to Design Guidelines for Attached Residential
Development: Fairfield Neighbourhood.
b. At least half the units in each building are affordable to very low to moderate income
households on either a rental or ownership basis depending on the tenure of the
building.
c. There are provision for onsite cycling storage and consideration of a car share.
d. Proposed new buildings meet the BC step code step 5 standard.
e. Direct staff to bring economic modeling and information on the viability of these types
of projects back to Council with bylaws and that this information reflect Council’s
desire to have the most affordability for very low to low-income households.”

It gets even better!! Let’s spend another 130k/year for something that won’t be built.

“At this time, it is estimated that one new full time planning position would be needed, at an ongoing
cost of $130,000. This financial impact is being foreshadowed at this stage, however, if Council
proceeds with this initiative, staff will bring forward more formal recommendations on this at future
reporting.”

Marko Juras
October 28, 2021 7:50 pm

I guess I never stood a chance by saving $200k on my own for a down payment when every lazy loser is just cashing out from mommy and daddy to buy a home

What is the difference between parents chipping in $200k for a down payment and parents sending their kids to private schools, enrolling them in expensive sports like hockey, etc. I have a friend that has been sending his daughter to Quebec and Spain for summer language camps, plus tutors here in Victoria. Kid is not even in university and speaks three languages. Is it her fault she is already ahead of everyone else that speaks one language because her parents have the means to invest in her? Life isn’t fair, if you are born into a rich family on average will have more opportunities including home ownership.

Marko Juras
October 28, 2021 9:57 am

I’m gonna call them.

Let me guess, they will offer you 10 to 20% below market value?

Bluesman
Bluesman
October 27, 2021 6:50 pm

Saw something very similar on a telephone pole this week.

up-and-coming
up-and-coming
October 27, 2021 4:14 pm

“did anyone else get a “note” today in the mail?”

That same “handwritten note” lands in mailboxes across Canada, so no spoiler alert that it’s not the local investor it tries to portray. After getting one a couple weeks ago, it’s tough to tell if they are targeted at specific properties or a blanket mail drop though. I would have thought a blanket mail drop, however mine had the last two digits of my street address written in purple ink on the top, which made me wonder if it was more deliberate than “spray and pray” mail drop.

Anyone know?

CrazyTime
CrazyTime
October 27, 2021 1:55 pm

To “Late30”: I got that note a week ago!!!

late30
late30
October 27, 2021 1:07 pm

did anyone else get a “note” today in the mail?

Maggie
Maggie
October 27, 2021 12:28 pm

@DRAZ Yep. “This property is currently zoned R2 (low-density single-family housing with the potential for a secondary suite and two-family housing), but in the Town of Sidney West Side Local Area Plan it is noted as Mixed Use Village.”

DRAZ
DRAZ
October 27, 2021 11:07 am

@Maggie Hard to believe anyone would pay that much for that spot, must be someone looking to subdivide.

Frank
Frank
October 27, 2021 10:09 am

If interest rates do start to creep up it will probably cause another spike in prices as people “panic” buy, then a decline will slowly occur. I wouldn’t expect a crash, still too many cash buyers out there.

Maggie
Maggie
October 27, 2021 9:26 am

2090 Beacon Avenue in Sidney, directly across the street from the incoming Amazon warehouse, just sold for $200k over ask ($952k). Built in 1961 and not updated.

Patrick
Patrick
October 27, 2021 8:39 am

Last time bonds were this high, fixed rates were around 2.7%

Right.

And a statscan survey reported by the financial post reports that most (52%) of Canadians are worried about higher rates coming. Should be interesting to see how the prospect of higher rates coming will affect Canadian spending behavior. Will this trigger an “it’s now or never” housing splurge to lock in low rates? (analogous to “last call” at the bar)

https://financialpost.com/executive/executive-summary/posthaste-canadian-households-have-amassed-2-3t-but-now-fear-higher-interest-rates-would-crimp-spending

“A majority (52 per cent) were concerned about the impact of rising interest rates on their financial situation (up 2 points since last quarter), in the survey. MNP Ltd, a unit of accounting firm MNP LLP, is the largest insolvency practice in Canada.

More than one in three (35 per cent) said they are concerned that rising interest rates could move them towards bankruptcy, statistically unchanged since last month (up 1 point). Younger Canadians (47 per cent) and men (37 per cent) were the most likely to say they were concerned.

The survey notes that 82 per cent of Canadian — 5 points higher than the first quarter — were cautious about opening their wallets, with the prospect of interest rates rising they will be more careful with how they spend their money, up 5 points since last quarter.

Patrick
Patrick
October 27, 2021 8:16 am

Money printing gravy train ended today, economic reality lies ahead! (Higher interest rates, cuts to government handouts, higher taxes). Analogous to the moment at the end of a fabulous high-end restaurant meal, when they bring you the cheque.

“Bank of Canada ends quantitative easing, signals rate hikes could come sooner”
https://ca.finance.yahoo.com/news/bank-of-canada-ends-quantitative-easing-signals-rate-hikes-sooner-142201520.html

Patrick
Patrick
October 26, 2021 9:40 pm

“CIBC says Vancouver homebuyers receive average of $340,000 gift from mom and dad for property purchase.”
That has a much bigger actual impact then diversionary blaming of the drug money, money laundering schemes and xenophobic foreigner blaming impact combined. When it comes down to it, we only have ourselves to blame for the market inflation by borrowing too much and the family cash gifts. I guess I never stood a chance by saving $200k on my own for a down payment when every lazy loser is just cashing out from mommy and daddy to buy a home

I hate to interrupt a good pity party, blaming the latest bogeyman for house woes. But the data you have based this on doesn’t exist. The study in question found an average gift in Vancouver of $180k, not $340k for property purchase as you’ve referred to. That $180K leaves the “lazy losers” (as you call them) with less than your $200K savings. And since the other 80% of a house purchase is a mortgage which depends on your income, you would clearly have the advantage over “lazy losers.”

This gift amount is much less in other cities, average $80k Canada wide. And it’s nothing new as it was $50k in 2015. Moreover, for first time buyers like you, only 30% receive a gift from parents, and the average gift that they get is $80k

All the data from the study is summarized here, https://dailyhive.com/vancouver/vancouver-homebuyer-down-payments-parents-gifting

caveat emptor
caveat emptor
October 26, 2021 4:06 pm

You can say what you want. But I would bet that anyone living in this country, with the information that is out there, whom had a child that was autistic, would feel a great deal of guilt and self doubt if they had lived in one of those condos Marko was talking about facing the highway whilst the mother was pregnant. No, I would agonize greatly over the result. Any woman I know would.

If you get your science from headlines you are bound for anxiety as the media will present the most dramatic findings devoid of context or uncertainty. One of the largest studies of autism and air pollution was conducted in Vancouver. They found an association between autism and prenatal air pollution but it was only an effect of a few percent and the relative risk just attained statistical significance: https://jamanetwork.com/journals/jamapediatrics/fullarticle/2714386. For sure it is a concern and if one can afford to live away from busy roads one should. I don’t think the evidence is so strong that no-one should have kids if they live within 300 metres of a highway which was the definition of “near” to a road in the study that you linked to. By this “rule” large parts of Saanich, View Royal and Langford would be unacceptable risks for having children.

Nearly every family that has something terrible happen to a child or who has a child diagnosed with something serious is going to be feeling guilt and self doubt over what they should have done or not done whether this is justified or not and whether they live in those condos or not. I know this from friends and I know this from personal experience. Specifically I know several families with autistic children. I know they have agonized over choices made/not made. Were we too old to have kids? Was it something in the building we lived in? Should we have eaten organic foods? Should our kids have been vaccinated? Was it some medication we took?

Specifically on air pollution, while air pollution has been falling in OECD countries, diagnosed ASD has been rising. In BC wood stoves are a similar sized pollution source to onroad vehicles. So you can live away from busy roads and still have a dimwit neighbor smoke you out because they have a crappy stove or don’t know how to burn properly.

Frank
Frank
October 26, 2021 2:18 pm

No doubt air quality has a factor in everyone’s health, especially a developing fetus. However, of far getter importance is what the expecting mother consumes during pregnancy. Any toxic substances: drugs, alcohol, marijuana, etc… is catastrophic for fetal development. Even high intake of sugar and lack of sufficient nutrients such as vitamins and essential minerals also contributes to potential problems. There’s a lot more to it than air quality, and a lot of expecting mothers have no clue what damage their bad habits are creating. A great majority of our homeless people suffering mental illness are the result of uneducated mothers.

alexandracdn
alexandracdn
October 26, 2021 1:52 pm

Caveat: “Slightly more likely?” CNN April/2019: Children who live near major roads are more likely to have developmental delays @24 months a 17.7% higher risk of failing ANY domain” of the developmental study.

Dec 16th 2010: Fast Lane to Autism” A mother living within 1000 feet of freeway while pregnant DOUBLES child’s odds of getting autism.
“Living near a busy road stunts children’s lung growth”

Also, read UBC study January 2020.

You can say what you want. But I would bet that anyone living in this country, with the information that is out there, whom had a child that was autistic, would feel a great deal of guilt and self doubt if they had lived in one of those condos Marko was talking about facing the highway whilst the mother was pregnant. No, I would agonize greatly over the result. Any woman I know would.

Umm..really?
Umm..really?
October 26, 2021 1:36 pm

Based on futures, people are betting there will be 4 rate hikes in Canada next year. Thoughts on people actually putting their money against it being a better metric?

Bond markets have moved ahead of the central banks and the cost of borrowing has followed. As central banks stop buying bonds at cheap rates from the market (leaving just consumers that want a higher rate of return) the more the actual rates will depart from the rate set by the central bank. They almost need to increase the central bank rate to maintain credibility with the rate they set before the market departs in it’s own direction.

The pic, purple indicates a rate that has gone up. From ratespy.

Screenshot_2021-10-26-13-33-28-619.jpeg
James Soper
James Soper
October 26, 2021 1:23 pm

The first thing to realize is that there’s no reason to believe that anyone has any information about where rates are going. Predictions of interest rates by experts (and non-experts) have been fantastically wrong for decades.

Based on futures, people are betting there will be 4 rate hikes in Canada next year. Thoughts on people actually putting their money against it being a better metric?

FatiguedBuyer
FatiguedBuyer
October 26, 2021 1:10 pm

and even more importantly the huge jump in down payments required just in the last year as the median house crossed the million dollar mark where 20% down payments are required

Clear that this was a nail in the coffin for affordability for many families who weren’t already in the market or had significant assets. I wonder how the % of folks using bank of mom and dad increased at that time? Great article Leo.

caveat emptor
caveat emptor
October 26, 2021 12:17 pm

Living close to a highway can have huge detrimental effects on anyone’s health.

According to the studies it’s not just “highways” it’s any major roads. Also “close” is defined differently in different studies, sometimes within 50 metres, 200 metres, 500 metres. By the definitions used in these studies 30% plus of the North American urban population lives “close to a busy road”. For example: https://www.lung.org/clean-air/outdoors/who-is-at-risk/highways. If you read the primary studies the health effects are real but are not “huge”. Basically a small but detectable increase in the probability of some nasty health outcomes. If you can afford to live away from a busy road, you probably should, but if the only place you can afford is 100 metres from a busy road you shouldn’t agonize. The extra risks are in line with many other risks people voluntarily expose themselves to (and way lower than smoking or drinking).

Could a couple ever forgive themselves knowing their choice of living next to a highway caused their child to suffer through any of this?

Thing is they will never “know” that as all of the health outcomes are things that happen anyhow. Their choice of living next to the highway just made it slightly more likely. Also that is a terrible attitude. With that same attitude it should be unacceptable to introduce your children to fun but dangerous activities like hockey, skiing, mountain biking. Also you should avoid travel (risky) with your children and driving (risky) in general. 20% of deaths of children are motor vehicle related

Kennt G
Kennt G
October 26, 2021 12:12 pm

I recently worked with a client who is a long time resident in Whistler and was part of a program that allowed long term residents with certain income levels to buy a town house at well below market rates around 10 years ago, the catch was the value of the property will only increase at the rate of inflation. I believe the townhome market \value would be close to 2MM and their value is around 700K

Umm..really?
Umm..really?
October 26, 2021 9:59 am

It will also be interesting to see the impact of interest rates combined with the other inflationary pressures putting new demands on household incomes. With costs across the board going up, it might not only be interest rates causing an affordability crunch as demands for household cash grow, people may just have less available to commit to buying houses. At least the MMT and basic guaranteed income folks get to see the impact of flinging money out the door that is not tied to productivity, not to mention the constraints that will be imposed on government spending in order to sustain the high debt levels. All those parents that drew out hundreds of thousands (from HELOCs) to gift to their kids to buy houses might be feeling the pinch in the coming years as higher interest rates increase their debt servicing, and inflation hits the other parts of their lives when they are on fixed income sources. Since both they and their kids are buried in debt in a single asset class, they better hope no one gets sick or loses the ability to work….

Marko Juras
October 26, 2021 9:58 am

I think the closest thing I’ve seen to working in terms of promoting “affordable” housing would be Vivid (Chard’s partnership with BC Housing). It could use a bit of tweaking, but I helped one of my tenants buy at Vivid and it worked well. Also, after two years of living in the unit there is no more bureaucracy (i.e., like “equity” must be returned, etc.).

https://www.westerninvestor.com/british-columbia/discounted-victoria-condos-come-with-a-catch-3830041

alexandracdn
alexandracdn
October 26, 2021 9:53 am

Living close to a highway can have huge detrimental effects on anyone’s health. The adverse effects are greatly elevated in children from the time a baby is growing and developing in the womb, straight through their entire childhood. The nitrogen dioxide, dust & dirt particles and carbon caused by vehicle exhaust systems greatly increase the risk of cardio & respiratory diseases as well as cancer.

Could a couple ever forgive themselves knowing their choice of living next to a highway caused their child to suffer through any of this? I cannot imagine the guilt. For me it would be unbearable.

Marko Juras
October 26, 2021 8:52 am

Meh happens every time I talk to a reporter. Part like I generally like Stew and what he has done in Langford left out.

Or I’ll note market is balance and somehow one quote is taken into market is hot or crashing 🙂

Matt M
October 26, 2021 5:46 am

Interesting… I like how you defined affordability into two categories: mortgage payments and the initial downpayment. Great read!