The three horses of housing demand
Within 6 months we’ve gone from record hot market conditions and ubiquitious bidding wars to a much cooler market with decade lows in sales activity and sliding prices. However the economy remains strong, wages are rising, and we have a strong pace of new immigration to the country. So why is it that the same place that attracted 20 offers at $1.1M in February is now sitting at $1M with no interest? Who isn’t buying now who was buying in the spring?
To look into this further, we have to recognize that there are essentially three major groups of buyers out there: out of town buyers, investors, and regular buyers.
Out of town buyers
There’s two sources of data regarding people moving to Victoria. One source is Statistics Canada’s estimates of migration, which includes all residents and breaks down where people are moving from. It shows that most of the inflow into Victoria is coming from Vancouver, followed by Alberta, with Toronto in third place.
Another source of data which focuses on just buyers is VREB’s buyer origin survey, which is the buyer’s agent’s answer to the question “Where is the buyer currently residing?”. Though not without its flaws, it shows that a bit over a quarter of buyers are from outside of Greater Victoria, with the split last year as follows.
So have out of town buyers decreased now that the market has turned? Short answer: no. Not really.
The second quarter buyer origin data was just released, and it shows that the proportion of out of town buyers remained near record highs, at 30% of total buyers. Note that the absolute number of out of town buyers is down with lower sales (634 last quarter VS 835 in the year ago quarter) but they remain a large proportion of active buyers.
That is also reinforced by the data on price declines. While not all out of town buyers are wealthy, many coming from Vancouver will have substantial means and be less credit sensitive than other buyers. They are also more likely to buy higher end homes (which absolutely took off during the pandemic). In a time when the market is sliding quite a bit, the price of single family houses over $1.5M haven’t budged, in fact they may even be up a bit since February.
If we get a continued slowdown in Vancouver I do expect out of town buyers to pull back somewhat, but so far they seem undeterred. And if the wealthy out of towners are still buying, who isn’t?
Investors
Investors are more credit sensitive than wealthy buyers, and in fact may be doubly sensitive if they are leveraging the equity from their existing homes to invest in further properties. Investors also love rising prices, and tend to dive in when things are going up, and pull back when prices slide. At the same time we have extremely strong rental demand that is countering some of the rise in carrying costs and making it easier to hold on to properties that generate market rents.
In the first 6 months of 2022 we still have a higher proportion of investor buyers than we had last year. While we had an average of 12.7% in the first quarter and only 8.0% in the second, that is similar to last year’s pattern where we had 10.3% in the first quarter and 7.4% in the second.
The absolute numbers do seem to be down (due to fewer sales) and I expect investors to drop back as prices get boring, but it’s a little early to confirm whether this is already happening in the data. Either way the range seems to be between 5 and 10 percent of the market, so it’s not like our large sales declines are mostly due to investors evaporating.
Regular buyers
That leaves regular buyers, who represent the large majority of the market. They are both credit and sentiment sensitive, both of which has been hit hard this year. I suspect most of the drop in activity has been due to these buyers pulling back. While employment and wage growth remain exceptionally strong and falling prices help affordability, that has been entirely eaten up by rising rates.
Affordability can return in a number of ways. We could get continued strong wage growth, continued dropping prices, a drop in interest rates when the economy weakens, or some combination of multiple factors. However it happens, I do think that we’re going to need affordability to improve before we start to see those regular buyers get back in the game. That could happen quickly if we hit some debt triggers, but it could also take years.
Also the weekly numbers courtesy of the VREB.
| August 2022 |
August
2021
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 83 | 831 | |||
| New Listings | 236 | 894 | |||
| Active Listings | 2157 | 1120 | |||
| Sales to New Listings | 35% | 93% | |||
| Sales YoY Change | -42% | ||||
| Months of Inventory | 1.3 | ||||
A sluggish start to the month with sales dropping further while new listings remained at a normal pace. Last summer sellers went on vacation, leading to record low new listings and inventory. This summer it’s clearly buyers that are off enjoying the sunshine instead.
Inventory has stabilized for the past 3 weeks or so, which is pretty normal for this time of year. The dropping sales rate should continue to bring up the months of inventory, but I doubt we’ll be seeing any drastic shifts in the remainder of the month. We usually get a second wave of new listings and sales in September, which will be a key time to watch if there is any life in the market before it shuts down for the winter.
Back in town, new post: https://househuntvictoria.ca/2022/08/16/checking-in-on-forecasts/
Esquimalt wanting to get out of the policing agreement seems to be about cost, not the presence of tweakers in downtown Victoria.
Takes the pressure off Oak Bay and other municipalities to merge their policing services with Victoria.
It wasn’t that long ago Esquimalt was the bad side of town, now they don’t want anything to do with downtown. Be interesting to see the next batch of left wing nut jobs on council join Ben and friends this fall. I’ve seen a few people come by canvasing with a pledge for more homeless housing and defunding the police.
I see that Esquimalt has decided not to renew the joint policing agreement. Not a surprise considering the nightmare that parts of downtown Vic has been turned into by this council.
BOC chief Tiff Macklem out with an opinion piece in the National Post today. https://nationalpost.com/opinion/tiff-macklem-were-determined-to-eliminate-high-inflation-and-return-to-our-2-target
“ The best way to protect people from high inflation is to eliminate it. That’s our job, and we are determined to do it. Tuesday’s inflation number offers a bit of relief, but unfortunately, it will take some time before inflation is back to normal. We know our job is not done yet — it won’t be done until inflation gets back to the two per cent target.”
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Seems a very clear message that they are determined to keep up with the rate increases until inflation is beaten down to 2%. After the inflation news and BOC comment -: Overnight swap rates increase odds of 75 . Economists split between 50 and 75 https://canadatoday.news/ca/cooler-inflation-wont-dissuade-bank-of-canada-from-another-jumbo-hike-in-september-economists-say-2-35352/
Our house up island appreciated more than greater Victoria – 100% in three years. It has also depreciated faster over the past few months – 13% down last month.
I have to think the bank would do the bare minimum to keep people in compliance and satisfy their own risk mgmt parameters so they can continue to collect interest payments and make people debt slaves for as long as possible. I am sure these discussions are happening as we speak in TO.
Put a more delicate way are the banks going to be trowing some people over the cliff?
What I was wondering is whether the payment plan will simply be payments at the regular new rate or a lesser amount to be just enough to keep them under the trigger point? Would this require a total reassessment of the borrower?
That is the trigger point then, I believe it will require a lump sum payment or a specified payment plan to shore up quickly. They need to follow the OSFI requirements.
I actually was wondering how the banks would deal with mortgages that are in breach of the trigger rate (LTV threhold).
I believe most will just send you a letter at the trigger rate and then let it go until you either renew or breach the trigger point (LTV threshold). Remember trigger rate is just the point when you are paying nothing towards principal, only when it exceeds the trigger rate do you actually start increasing the LTV (assuming the bank doesn’t reassess the house for that purpose). Leo detailed this in his previous post.
Ya but as soon as we hit 2023 then base effect takes over and we will automatically have lower inflation unless the wage-price inflation spirals out of control. I don’t know, too early to call right now. I’ll make a call the same time they do, 1 week prior to announcement lol.
I wonder exactly how the various banks deal with mortgages that are triggered. A small monthly increases or a complete reset to the new rate?
Very true VicRE. But it seems the indicators point towards the 75 bps. The BOC managed to change the mindset of the people in July with the 100 bps raise. Accordingly, they probably feel the need to stay on track in order to clearly illuminate that this time they mean business and are very serious about reducing inflation quickly. A slow burn is sometimes much more painful. We shall see.
Too early to make a call still, but I believe if they go 75bps then most variable rate mortgages would reach the trigger rate. Further more it would be pretty devastating for some of the smaller levered developers…
VicReanalyst: I think there is a better chance that the BoC will raise 75 bps in September vs 50. Maybe they’ll do 25 bps later in the year and a couple more raises after that.
I think Esquimalt overall is the one that has appreciated the most.
Food came in at a 40 year high.
Core cpi came in too hot, real toss up between 50bps and 75bps in September.
A great example of the assessments being divorced from reality. The assessed value, according to the MPAC website, is $913,000, with the last sales indicator being June 2018. Ours has an assessed value of $1,007,000, with the last sales indicator being September 2014, when we bought it. Our next door neighbours have been there for 40 years in a similarly sized (but much older) house, and their assessed value is $748k.
Looking at the listing, it certainly looks nice and they have obviously put a lot of work into it that has not yet been reflected in the assessment, but I think $3m is really a reach.
The problem in this neighbourhood is that all the properties are unique and so it can be tough to compare, but I would have thought our place to be worth perhaps $1.3 or $1.4. But when we got a HELOC earlier this year, the appraisal came in at $1.9. I thought that was ridiculously high.
housing demand ,really are more than three horses of buyers driven.. there are developers who are pro-forma driven to make a nice profit, and quite a long chain of key players in the backend of the formula.
During the land acquisition process and the development process.. there are big names in our town that are silently observing the conversation here…some of you guys are not saying much , many are not willing nor able to revel their identity but I knew you are here based on the depth of contents are you posting….
At this year’s peak, a 6000 sq ft land value in Estevan Oak Bay was in between $1.7-2.0m but exactly same size land value in late 2019 was below $1.0m. Similar trend in south Oak Bay, house bought below $1.0m in 2020, exactly same house sold over $1.6 at this year’s peak. There were also few other crazy sales this year in Oak Bay.
We have lived in Ottawa (Centrepoint and Kanata Lakes area) for 20 years before moving back to Victoria. Cook Street village is very similar to Glebe, but Oak Bay is not as diverse as Glebe at all (just look at the census number: Oak Bay 5 years population increase from 2016 to 2021 is -0.6% !).
There are lots of walkable areas here, e.g. Mt Tolmie neighbourhood that belongs to city of Saanich and borders UVic (University of Victoria) and Oak Bay and is fairly similar to Dows Lake area in Ottawa. There are two libraries (one from the city and one in UVic), 5+ banks, 20+ restaurants/coffee shops/pub, 4+ pharmacies, 5+ groceries stores (big and small), 3 liquor stores (government and private), 2 cannabis stores, a Home Depot and a new and bigger mall coming (University Heights), also Mt Tolmie park with 360 ocean/mountain/downtown view on top and park-like campus grounds of Uvic, all within ~15min walking distance. So if you don’t need to carry anything heavy, you wont need to drive much at all.
Note Victoria is more hilly than Ottawa, so having an e-bike is a very good idea, a bit slower but much more fun to go around than car, and you can ride here all year around. We have put more kms (5K+) on our e-bikes than our car (~4K) in the past two years and the bike infrastructure keeps getting better.
p.s. The first “culture shock” when we arrived back was how old people here are compared to Ottawa/Kanata (but the population in Mt Tolmie area is actually pretty diverse due to substantial student population: Uvic and Camosum College).
Honestly I think you’d find Leo extremely reasonable too. I don’t think the city will change over night, but having the ability to build row houses like the ones on Superior and Douglas means less housing has to be built out in Langford/Colwood/Sooke. It means less people sitting in traffic, less encroachment on farmland/wildland, and more people able to walk to amenities. It also means that people don’t have to live someone’s basement. I’m not really a proponent of towers, especially when they build the whole thing as studio/1/2bedrooms.
Sorry spotty internet here, update will have to wait until tomorrow night
“My own feeling is that areas of Victoria have not appreciated as much as parts of Oak Bay.”
I’m curious about people’s experiences with this. I bought in Royal Bay 5 years ago and my house more than doubled in value by Feb 2022 … roughly a $700k gain. Perhaps Oak Bay houses appreciated by the same or lower % but more value? What about other areas of Vic?
The assessments certainly are. BC assessments are quite close to current market prices, as Leo has shown. The lag in Ontario assessments is due to policy. Here’s a property with almost the same assessment as yours (and the same size lot as mine, albeit not location). Maybe you can afford something decent in Victoria after all 🙂 Not that I think it’s going to sell for quite that much, but in the ball park.
https://www.realtor.ca/real-estate/24766700/295-first-avenue-ottawa-glebe
This was my top criteria and there are several areas that work well. You’ve already mentioned Cook Street. The area near Fairfield Plaza or Fernwood Village, as well as the Jubilee and Gonzales areas which share a border with Oak Bay (and are less expensive), are extremely walkable. Estevan and Oak Bay village are more expensive but also walkable.
I still have a car. My kids just end up using it.
Good deal, I was not aware of that and it would apply to us.
We pay $11k on our house in Ottawa which is assessed at just about $1m, so Patriotz is bang on. Of course the mil rate would be lower if property values are higher, but I’m not convinced that prices in Victoria are double those in Ottawa.
There is definitely a lag in assessed value, though. We bought in 2014, so it is hard to argue with the assessment as it is a bit more than we paid. But our neighbour, in a house which is likely close to ours in value, has theirs assessed at $700k. It’s not the most accurate system.
Not for comparable properties. Rates are lower, prices are higher. City of Victoria 4.5/thousand, Ottawa11.4/thousand.
On top of that Ontario assessments seriously lag market value. My house is worth nearly twice the assessment on my 2022 taxes. Total tax bill $3800.
But in BC you get a homeowner’s grant on top of what Patrick pointed out.
Nothing to fear except:
Ambulances not picking you up during medical distress
Understaffed hospitals and lack of doctors
Understaffed police
Lack of childcare and understaffed schools
Long lines at understaffed grocery stores and coffee shops
Delayed and cancelled ferry service
Delayed and cancelled flights at the airport
I support more and more stable housing.
It’s better than that. In BC, if you’re over 55 (or have a child under 18 ) property taxes can be deferred. This means you pay nothing until the property is sold. There is a small interest rate on the outstanding balance that accrues but that also isn’t paid until you sell.
Indeed.
Be forewarned that bus service in Cook Street Village is not great. Oak Bay isn’t much better unless you live near the Fort/Foul Bay intersection. The transit system in Victoria is heavily oriented toward moving students between U. Vic and downtown.
Where we live now is one of the areas of the city that has a decent mix of multi-family and single family homes. As someone has noted, that is what gives sufficient critical mass to have a strip like the one in Cook Street Village and elsewhere. So we are not afraid of that – only if it is done poorly.
But it is good to know that these discussions are taking place so that we can ask the right questions, so thanks.
To be clear, we are not buying as an investment. We are buying a place to live. So if the rate of return is not as good as somewhere else, we are fine with that. Property taxes in Victoria, from what we have seen, are half of those in Ottawa (must be partially due to the lower need for snow removal, but some of it must just be bad management).
Most of our desire to live in what I might mistakenly be calling the core comes from having lived in Europe for many years and having a very walkable neighbourhood here. If I can avoid needing to use a car, so much the better.
James, here you are sounding much more reasonable. I would support higher density low rises with street front shops on major arteries. Some architectural control would also be reasonable. It is the blanket rezoning of the whole city which is not reasonable particularly for a number of the historic areas like James Bay, Fernwood and Rockland.
Moreover in terms of providing substabcial numbers of additional housing units we have a number of areas which are suitable for thirty plus story condos. The railway lands, London drugs development and at least a number of empty lots or second level car lots. One needs to also bear in mind that many if not most SFH in Victoria already have one or more suites in them. Many of the larger old homes in the traditional areas of Victoria already have multiple apartments in them but retain their historic characteristics.
I agree with you that Cook street redevelopment has so far been a success and I would be happy to se that main artery development continue and would strongly support it.
I honestly doubt the vote will go the missing middle’s way, so they likely have nothing to worry about, except homelessness because of lack of housing.
Cook street village has lots of condos that are older than the 40 year law so actually exist. It’s part of the reason the village works (enough people in the vicinity to sustain it). One good reason to prefer South Oak Bay vs. Gordon Head is the village there, which is one of the only place in oak bay with condos and apartments. What are the setbacks in those areas? Honestly it’s the condos with setbacks that screw it all up, since you don’t have shopping on the ground level, meaning you get these blocks that you just have to walk past.
I think if the process to build anything that isn’t SFH was reasonable, you wouldn’t have this fight back against it being everywhere. Since it’s abused, you do. Having a multitude of SFH on streets like Mckenzie Ave, Hillside, Bay, Fort St, makes little sense, having a 30 story condo building in the middle of sfh residential makes just as much. Not being able to build a duplex or triplex in a residential area also makes no sense.
That may be bad financial advice
Buying a SFH in COV might in fact be a very smart move from a financial perspective. Because the COV population is rising (1.4% per year=1200) whereas the number of SFH is almost constant.
Canadians “strongly prefer SFH” : https://www.newgeography.com/content/006189-canadian-families-denied-preferred-detached-houses-forced-condos-survey “ A new poll by Sotheby’s International Realty suggests substantial disappointment among Canada’s young urban families, unable to afford to purchase the types of houses that they prefer. The poll determined that young urban households in Canada strongly prefer detached houses, but they are often “motivated by (financial) necessity to purchases houses, especially condominiums, they do not prefer.”
According to 2021 census (vs 2016).
COV population rises 1,200 per year.
COV adds 700 dwellings per year.
Only 28 of these are SFH. That’s 4% of net new housing stock in the COV is SFH
The number of SFH additions is likely going to turn negative as the density and missing middle ramps up (because they tear down SFH to build multi units )
It is something special to have nice SFH (in nice neighborhoods) so close to the city center of a city.
Why not buy something (SFH in COV) when demand (population) is increasing and the supply is staying constant?
COV 2021 https://www12.statcan.gc.ca/census-recensement/2021/dp-pd/prof/details/page.cfm?Lang=E&GENDERlist=1,2,3&STATISTIClist=1&HEADERlist=0&DGUIDlist=2021A00055917034&SearchText=victoria
COV 2016 https://www12.statcan.gc.ca/census-recensement/2016/dp-pd/prof/details/page.cfm?Lang=E&Geo1=CSD&Code1=5917034&Geo2=PR&Code2=01&SearchText=victoria&SearchType=Begins&SearchPR=01&B1=All&type=0
James: I guess I am just imagining all those condo buildings in Victoria. Notice you spin it as duplexes when the approval is for multiplexes and not limited to duplexes. I am sure that it will be passed but the guy in Ottawa looking to buy in Victoria still should be given a heads up as to the massive rezoning facing the city.
What were those setbacks again? By the way, exactly who is funding Leos independent organization? That actually is a rather good question? But lets let Leo answer that one as to the source and amount of funding before drawing any conclusion as to its independence.
You won the battle and I have no doubt about the outcome of the vote so why not be fair to the poor Ottawa guy and provide a realistic view of the direction of the city.
Hey poor chap, if Leo’s independent organization that is in no way affiliated with or funded by developers in this city, manages to break through the massive amount of nimbys in the city of Victoria (not one of the other 12 municipalities) and they actually pass something that allows something other than SFH on land in Victoria, you might get a duplex in your neighbourhood just like the current duplex in your neighbourhood that was developed prior to these laws being put into place 40 years ago. Being poor, you might be able to afford one of those duplexes when they are built, chap, but likely not since prices here never go down.
James, as you well know it is a combined matter of both height and lot set backs. But I would be pleased if all these new builds had set backs the same distance as my place. But they wont be. By the way my house is actually less than 34.5 feet but why dont you tell everyone what the setbacks are going to be.
James already knows this and I appreciate it is a matter of spin from the development lobby but the poor chap in Ottawa should have some idea of what he is getting into if he decides to buy in the City of Victoria.
Barrister, I’m sure your place is taller than 34 feet.
The whole “34 feet” thing makes it less scary especially when you consider how many old houses in Fairfield and Rockland are actually taller than that.
Maybe, but I’m not a white collar professional, and I’m talking about my personal experience living there for many years. I’m also not sure that would be true of people with an actual professional designation, and not just some finance bro with a commerce degree.
I disagree with that. If you look at any white collar profession outside of union government jobs, Vancouver trumps Victoria and always have.
This has been tried previously extensively in the tech sector but the quality of work from third world countries was just not there. However, now that even simple clerical jobs are WFH I am curious to see how that plays out.
Looks like BCGEU will be striking imminently, perhaps sales activity will pick up since lots of people will have free time to look at houses after their shift (3 hours?) at the picket line?
I wonder how working from home will effect real estate prices here in Canada.
It wasn’t that long ago that it was difficult to convince friends that many people who can will work from home.
(My daughter works for VIHA and she works from home for example)
Many argued that it could not be done. Things have changed with new technology and circumstances.
Now that many companies are letting employees work from home, the next question is: What is going to happen as companies realize that they can hire someone much cheaper from anywhere else in the world.
How will that effect real estate prices here in Canada as people lose their jobs?
My guess is that it will open up new opportunities as well as some disturbing problems as everyone struggles to find a way to survive. I could see expensive, over taxed cities being hit the hardest.
Dang, looks like I will be wrong about sellers trying to front run the Sep rate hike… Perhaps the stabilization of the 5 year rate has erased a lot of the urgency. Really need the inventory up to around 3k to get some further substantial price declines.
Monday month to date numbers:
Sales: 189 (down 43%)
New lists: 468 (up 12%)
Inventory: 2190 (up 70%)
New lists are normal but sales so slow that inventory has resumed the climb last week.
New post tonight (probably)
Vancouver is a big, boring city. I haven’t lived there for years, but career prospects were no better than Victoria at the time.
Maybe Toronto is better. I liked it when I visited many years ago, but it was still affordable at the time.
And rew.ca/insights is far better still.
You can get price history going back to the 1970s.
Just noticed sales price history now appearing on the Realtor app going back as far as 2016. Better than BC Assessment. Is that on all listings now?
Also, spoke to my neighbour who’s a developer up here in the Comox Valley. He built 7 properties over the last year, all pre-sold, but will only do 1 at a time from now on. His reasoning was land is too expensive to make a profit and few pre-sales are selling here now. Laying off most of his guys. Says many over-leveraged builders will go bankrupt.
Thanks for the clarification. I prefer Oak Bay and Saanich to City of Victoria. I share some of your concerns about the deterioration of parts of downtown COV. For example, who would want to shop or run a business around Princess and Douglas? Tesla have just opened up there, but only temporarily until their Langford location gets built. And they’re counting the days.
Prices tell me that Oak Bay is the most desirable place in the CRD so definitely not bad advice to buy there if you can afford and like the quieter pace.
Sidney is right on flight paths to and from airport. Not a super busy airport at the moment but both Victoria and air travel are growing.
Patrick: I think you have misunderstood my comments. I never said that young people should consider moving to Toronto or Vancouver because of house price appreciation. My comment was in relation to the core of Victoria offering more to young people. Both Toronto and Vancouver have better career and cultural potential than Victoria. Certainly there are other factors such as family ties.
In what part of the CRD to buy is a totally separate set of issues. I dont have a dog in this fight so I am just giving my honest opinion. My own feeling is that areas of Victoria have not appreciated as much as parts of Oak Bay. If you are considering buying a SFH do you really want to risk having the houses next door being converted to three story multiunits along with other parts of your street? I am sure that I am about to trigger the debate of how it is much better to be living in high density but that is generally not the values that people who buy SFH are looking for in their purchase. The idea of having an increased likelyhood of having endless construction over the next ten years on your street as the city slowly coverts more of the SFD into Missing Middle units is a risk to be seriously weighted.
One should remember that this conversion started as an inquiry from someone in Ottawa who was asking about buying here in Greater Victoria. I someone suspect that if he flys here to look at a house his real estate agent might forget to mention that every single SFH lot is about to be rezoned for a very large multifamily apartment of up to 34 feet tall with a really large footprint. Nor is there likely to be a discussion of how many “supportive housing units” are proposed for the City of Victoria.
You mean the two Canadian markets that are even more expensive? Well, at least that’s a change from “go to Edmonton”.
It is hard for me to picture a scenario where prices of equivalent houses on opposite sides of Foul Bay or North Dairy or Arm Street diverge massively.
Maybe Leo can remind us how recent appreciation has varied by municipality?
I’ve always chosen where to live based on family first and career second. I never even thought about the investment potential of my house in a completely different part of the country. I wouldn’t advise anyone to choose where to live in the country based on potential house appreciation. If you and your family are all in Victoria, how silly would it be to move to Toronto because you think your house value would rise faster there. Barrister, I hope you’ve never done that, and why would you advise young people to do it?
Toronto has changed considerably from what I understand, places that were very safe downtown now have more regular shootings. Vancouver makes Pandora look tame, it’s honestly worse than the tenderloin in San Fran & skid row in LA.
Why?
I am not sure that the last few years have actually seen perfect correlation between the City of Victoria and a number of neighboring municipalities.
Regardless, it is my strong suspicion that the C of V prices will increasingly lag behind a number of others. Obviously time will tell. Nevertheless one should look at C of V with a large dose of caution.
Realistically there is going to continue to be near perfect correlation between prices in neighbouring municipalities. So no one should sweat too much about which municipality is a better investment. Rather choose what fits your lifestyle.
Curious to hear your reasons around this. Do you think values here won’t continue to go up because of social issues? Or some other reason?
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Personally, having lived here my whole life, and with all of my family and my spouse’s family in this city as well, it would take a cataclysmic event to make me move elsewhere. So I’m very grateful we managed to get into the housing market here. But not everyone has reasons like mine for wanting to live here obviously.
475,000 Ukrainians have applied. The bottleneck is in government approval, that have only approved 120,000 so far. This is all in the span of about 4 months since the program was announced.
I’m unaware of any “modeling” done by the government that expected higher numbers than 475,000 in 4 months, so I’m not sure where you got that “well below expectations” idea from. Perhaps it was the same source that misinformed you that only “a few” Ukrainians had arrived so far (when the actual number is 70,000).
Anyway, let’s move on to housing topics, and thanks for the discussion.
Younger generations should consider Toronto or even Vancouver sooner than Victoria. Regardless of your age, I think the City of Victoria in terms of real estate is not a sound place to invest your money.
For the 60+ crowd for sure, great places to retire. The rest of the core has a lot more to offer for younger generations though.
I have to agree with Deryk that I would not buy anything in the actual City of Victoria. Oak Bay is a much better bet as is Sidney.
The main difference being that they are not refugees, at least not the same as the Indochinese movement. The CUAET is a temporary program. Sure, they could apply for refugee status once here, no question about that, but they are not being resettled.
Yes, 70k plus have come to Canada, but that is still well below expectations that were modeled at the outset.
Only time will tell as to how many will actually stay.
They are part of the overall levels target for the year, which for 2022 is 450k or so.
I don’t agree with your statement that “few [Ukrainians] have actually arrived in Canada”.
Government of Canada’s official website reports 72,000 Ukrainians have already arrived (in 6 months). That’s obviously more than a “few”. https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/ukraine-measures/key-figures.html
For some perspective, that’s already more Ukrainians than the 60,000 Vietnamese boat people that arrived in two years to Canada. https://en.wikipedia.org/wiki/Vietnamese_Canadians “In the years 1979–80, Canada accepted 60,000 Vietnamese refugees.” And noone would describe the number of boat people that arrived in Canada as a few.
And 190,000 Ukrainians have been approved, so Canada have already accepted triple the number of accepted Vietnamese boat people, and we are expecting at least 120,000 more Ukrainians to arrive.
Canada is the second largest diaspora of Ukrainians (only Russia has more). https://www.theguardian.com/world/2022/mar/03/canada-ukraine-diaspora-relief-efforts-russia-attack
And these numbers (475,000 Ukrainians have already applied to come to Canada ) are separate and in addition to the immigration numbers. And there are no limits or targets https://www.cbc.ca/news/politics/canada-unlimited-number-ukrainians-1.6371288 “ Canada prepared to welcome an ‘unlimited number’ of Ukrainians fleeing war, minister says”
We lived in the core of Victoria and it became so depressing witnessing the complete lack of government support at every level for the people with addictions and mental illness. I kept thinking…Is this really the best we can do?
I just couldn’t keep stepping over these people on my way to a show or a night out, as if they didn’t exist.
(I invested many years and a fair amount of money on trying to make things better, only to come to the conclusion that our governments do not have the courage or even the will to make the difficult decisions that need to be made in order to fix this complex problem. )
Huge amounts of money is being spent on bandaid solutions with no hope of ever making it better.
Our family left Victoria and I would not recommend Victoria to anyone.
The courts are a revolving door. When someone brandishes a knif in the seven eleven, he or she is arrested and given a court date. When that person does not show up for court, the judge issues another arrest warrent. And this goes on over and over again.
It will take a new generation of young people to change the system at every level.
The old generation is fucked in the head:)
This forum, which I respect and appreciate very much, is about real estate.
How our governments handle addictions and mental illness and housing, reflects on the quality of our cities and our real estate.
Realist: SFH, Semi- detatched (half duplex). Most of GV having min of 2 beds/2baths to max price of $1,999,000.
We periodically veer off into immigration, the family doctor crisis, HVAC systems, EVs, and even feminism.
Hopefully the war will end soon, but most will choose to stay and make Canada a better place. And hopefully we’ll get off our asses and start building more goddamned housing.
I certainly didn’t expect to see a discussion of immigration here, but I am just chiming in and saying that this is absolutely correct. The levels plan is pretty strictly adhered to and backlogs will remain until there is space within the levels to admit them. The CUAET is a new beast, and it’s impact is yet to be felt. Though many have applied, few have actually arrived in Canada. By and large, most seem to be applying to have it as a back pocket insurance plan if things really go south. Add to this the fact that all males from 18-60 are currently unable to leave Ukraine.
While many international students and temp workers will eventually apply to stay in Canada as permanent residents, many will return home. This is despite some strong efforts to get them to stay (makes sense – educated in the Canadian system).
Always an interesting topic, and usually controversial as well!
Alexandra, what’s your search criteria?
I’m glad Koffi is there, I just wish their espresso was the same calibre as Discovery, Hey Happy, or Habit.
Just to change topic a bit and for those of you that don’t track your pcs listings, here are my individual pcs active listings over last five months. Note: each time the OM’s and SOLDS have been removed and the criteria has remained the same:
07 Apr: 193
30 Apr: 247
12 May: 295
28 May: 353
18 Jun: 374
06 Jul: 402
15 Jul: 417
14 Aug: 410
Yes. And no one here is including the arriving displaced Ukrainians in the immigration targets. They are in their own category (CUAET), similar to temporary foreign workers/students. Note that this CUAET (Ukranian) visa is for three years. They can stay that long regardless of status of the war. For example, the war might end, but they want to stay on in Canada. Regardless, their visa allows them to stay in Canada for at least three years. This is different than typical student or work visas that require ongoing documentation of employment or study.
The relevant points to this housing forum (and the current discussion about pop. projection to Dec 2023) are that these and other temporary foreign visa holders (excluding tourists):
—- 1. are included in population numbers (census and other statcan data – see link). The point being, this supports Frank’s estimate of 1 million pop. gain by December 2023. Of course hopefully the Ukraine war will end sooner than that and most will go home, and then Canada’s pop. will fall. Until then, they are living, working and counted in our population just like anyone else.
and
—- 2. require housing and will put extra strain on the rental housing market
Foreign visa holders are counted in census and statCan population data: https://www.ontario.ca/page/ontario-population-projections
“There were about 600,000 non-permanent residents (NPRs: e.g., foreign students, temporary foreign workers, refugee claimants) living in Ontario on July 1, 2021. These foreign residents are part of the base population since they are counted in the Census and are included in the components of population change. ”
The terms “refugee” and “student” exists outside of the Canadian immigrant categories. The Ukrainians are refugees in the normal use of the term , but not “refugee claimants” under the Canadian immigration system. Because a new non-immigrant visa category (CUAET) was created for them to expedite their approval.
Patriotz is correct that the Feds admit what they want to admit into Canada. It would appear though that what they want to admit is a much larger number than in previous years. Incidentally, if I am not incorrect, people admitted under Quebec’s immigration programs are not counted in the Feds numbers.
The total immigration numbers are anything but transparent since reporting is most often by program and stats for some programs like Quebec are difficult to obtain to say the least. The Ukrainian situation as Patriotz points out are not officially immigrants and moreover how many come and how many stay is up in the air and those numbers might well be very much determined if there is a military collapse of the Ukrainian army. Such that occur then it is doubtful that the Ukrainians will be deducted from the usual immigration quota. they will be added to the numbers already approved.
But this is a housing blog so 400k Ukrainians on work permits still need to be housed in addition to all the new immigration numbers. From a housing perspective we are simply counting additional bodies requiring housing. Half a million per year over the next two years is a realistic number in my mind considering that Quebec expects to accept about 70k alone which are not within the Feds statistics.
For me the bottom line is that immigration will definitely have a major impact on housing in the next two years.
Wonder how that happened? Is that sort of thing happening today?
Means squat. The feds admit the numbers they want to admit. Bringing us to:
Those would be temporary visitors with work permits, not refugees. Now at some point in the future some of those who have actually arrived in Canada may become refugees or family class or economic immigrants. Then those numbers will be included within the immigration targets.
Frank predicted 1 million Canada population growth to December 2023 (in 17 months, which is 706,000 per year)
That’s a growth rate of 700k/38m=1.8%.
Since 1950, There have been 16 years with higher growth than that 1.8% in Canada. For example every year from 1952-1958 was 2.5% or higher. https://www.macrotrends.net/countries/CAN/canada/population-growth-rate
Moreover, read those immigration articles about the 2.4m immigration backlog w/500k refugee applications, and I think it’s likely that this will raise the “population require housing “ by 700k/year or 1 million by Dec. 2023. Like Frank said.
No one here said Vic population did or will rise 10k per year. It will likely rise about 5-6k per year.
Note that my projection for Dec 2023 was for 5,000 people moving here per year , which is less (more conservative) than the 6,998 that actually came (net) in 2021.
Here are some more numbers, from a different source (BC CheckUp: live report). Note that these numbers are calendar year, and the previous post statcan numbers were year from July to June. So they cover different periods.
Anyway, In calendar 2021, there were 1712+5286 = 6,998 Net people moving to G.Vic from BC and ROC.
Births and deaths were a wash. Due to Covid, immigration numbers were almost zero. And foreign student numbers fell (Covid) so were negative growth. Total net change in population was 5,941
https://www.vicnews.com/news/capital-regions-growth-not-coming-from-maternity-ward/
“The vast majority of newcomers to the Capital Region come from other provinces (net gain of 5,286 residents), with another net increase of 1,712 from other parts of British Columbia. In contrast, the region has experienced a decline in the number of international migrants arriving over the past two years, especially non-permanent residents, such as students.
Nearly 6,000 more people called the Capital Region home in 2021 while increased construction activity is offering them more places to hang their hat. The Capital Regional District added 5,941 new residents in 2021.”
Since 1950, Canada hasn’t grown by 1 million in a year and a half (didn’t go back farther than that). It took us 3.5 years to grow the last million.
This doesn’t really jibe with the actual increase in population of Victoria. It didn’t increase by 10k in a year. Biggest figure I can find is 5651.
I would not recommend that one actually leaves Ottawa for Victoria without a lot more research. The core city is changing rapidly and not necessarily in a good way.. Frankly, I am about a ten minute drive to Oak Bay Village and then I am happy to walk about there. If you can afford any part of Oak Bay I would definitely think it is a safer investment than the City of Victoria.
VicRE, that comment is out of line. You should apologize.
Frank, your 1 million pop increase forecast looks fine to me. As you mentioned, there are huge numbers of refugee applications to Canada.
Official Canada data shows 475,000 applications from Ukrainians so far, 194,000 approved so far. https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/ukraine-measures/key-figures.html
So if you add the 600K immigrants expected July 2022 to Dec 2023 + some % of these huge numbers of temporary refugees that have applied + some additional % of the 2.4m immigrant backlog that isn’t already counted in population, then 1 million is a reasonable estimate. The current immigration numbers and backlog are off the charts, for all categories.
Btw) there is a huge 2.4m backlog in processing various stages of immigration applications. https://www.ctvnews.ca/canada/our-lives-have-come-to-a-screeching-halt-canada-s-immigration-backlog-reaches-2-4m-1.5950219
Some of these are already counted in population, and many others aren’t. The numbers are just huge, and the backlog has grown by 250,000 in June alone.
But 2.4 million immigration backlog is six years at 400,000. And that’s just the backlog.
For purposes of a “housing” forum, I’m counting any people in Canada that need regular housing (not tourists) in ‘population”.
Thanks. That was a typo, corrected in the the post now. All the data refers to 1 year period. Read the Vic news article for details. Note that this is historical data. So maybe it will change in the future. But it does provide a basis for my projection, which is what VicRE asked for.
isn’t that 2 years?
Time to file a cyber bullying complaint with the R.C.M.P. First thing Monday morning.
StatCan data from last year. Migration to Victoria. Please read the article, and the excerpts below.
In 1 year period July 2020-June 2021 , Victoria got 3,481 from Vancouver, + 5,235 from other provinces and that doesn’t include from other parts of B.C.
This is a 60 year high for movement to Victoria
Attn: “Don from Ottawa” and “Patriotz”: from the article below… Aside from B.C. and Alberta, the leading city sending people to Victoria is Ottawa (482 in 1 year)…who knew???
My projection for the next 17 months is conservative, I’m assuming less than that.
vicRe… If you still have questions, post what your projections are, and we can see if the differences are material to the discussion
https://www.vicnews.com/news/residents-from-across-canada-are-making-the-move-to-greater-victoria/
“New data released Thursday shows people continue to move to Greater Victoria from other Canadian cities in similar proportions as they have in recent years.
Vancouver remains the top exporter of residents to B.C.’s Capital Region, according to Statistics Canada’s updated migration numbers for those coming from in and out of the province. The updated data applies to the period of July 1, 2019, to June 30, 2020.
Greater Victoria gained 3,481 people from Vancouver in that [1 year] time frame. The next highest amounts came from British Columbia’s neighbour, with 1,185 and 941 people coming from Calgary and Edmonton, respectively
While the number of B.C. residents moving to and from Greater Victoria hasn’t changed much since 2017/2018, the region saw an influx of people from other provinces spring for the west coast during the pandemic. In each of the three years before the pandemic, net interprovincial migration here never eclipsed 3,000 people. That figure grew to 3,736 and 5,235, respectively, for 2019/2020 and 2020/2021, according to Statistics Canada.
Outside of B.C., the Ottawa area and Montreal sent the next highest, with 482 and 306 people moving to Greater Victoria.“
Let’s see some evidence or backup please.
You are an absolute moron that makes absolutely zero rational sense. Go bid 300k over asking and carry on.
We are a five minute walk to Bank Street – so we know we are not necessarily going to find anything like that.
Our homework for the next little while is to explore the various neighbourhoods and to brainstorm with some friends who live in Rockland. Oak Bay is not in our range, unless I am misinformed, and in Rockland and Fairfield it looks as if we would be stretching it. Early days though, we have much to learn.
Thanks for your input!
For “Don in Ottawa” …sounds like you are doing the right things and will do well.
Good that you have been watching the Victoria market for some time.
This will be an exciting time in your lives. All the power to you.
I feel that Victoria real estate could drop a bit, but nothing to write home about.
As point of reference, I grew up in the Glebe and to get to Fifth Ave. Court, it was an 16 minute walk… Where I am in Oaklands currently is more walkable.
I would also add that, depending where you are located in Oaklands, Quadra village may be quite near. It is only a 12 minute walk from where I am located for instance…
The mall, unlike some other malls (Mayfair), now has multiple grocery stores so it is quite useful.
As for the village I quite enjoy the vibe on Haultain. Local coffee place. I get my haircut there, etc. It is no Cook Street village but I like it.
Don, Hillside and the Oaklands are probably going to be a miss for you too given your preferences.
The lack of a walkable village center like Cook St or Quadra is one of the major drawbacks for the Oaklands for me. And Hillside Mall is not the vibe I want, even though it has some amenities.
We noticed that drawback, but we have friends there and they seem to enjoy being there. We are not closed to any possibilities, but my father lived in Sidney a number of years back and I never took to it.
I’ve never been to Hillside or Oaklands so will have to investigate further. James Bay was another area we had walked around but it seemed to not check off the boxes that we wanted.
The area around Ross Bay seemed very nice as well.
Re immigration, I am trying to help a few Croatian friends in construction so I am following the forums/FB groups, etc. and the invitations the government releases and it makes no sense whatsoever. For example, https://www.welcomebc.ca/Immigrate-to-B-C/Invitations-To-Apply
scroll down and you can see on what dates they send out the invitation, the minimum scores, and the areas they are targeting (early child educators, etc.). Without going into too much detail very difficult for a tradesperson to be drawn. Early child educator they want 60 points (basically can’t speak English) but tradespeople you need to speak at a very high level.
We have a housing crisis which in part is due to a well documented labor shortage and good luck getting PR working in construction. All the Croatians in the IT field, no problem regarding PR. They then acquire solid jobs in IT and then buy real estate. As for tradespeople working 6 days a week who won’t be able to qualify for a mortgage for 10 years nope, set the scores super high so they can’t get in. One of my friends that works on commercial sites in Victoria doing steel studs will have to go back soon, no papers.
Lots of reasons why I am very bullish on real estate 10 years+ out. Municipal government can’t figure out shit but the other two levels of government are no better. The issue of housing gets a lot of attention, but everything I see in real life is actual detrimental to solving the housing problems.
Unfortunately, Oak Bay and Cook Street Village (west Fairfield) are the only neighbourhoods in Victoria that are really comparable to The Glebe. Rockland is very nice, but really not that great if you like walking proximity to retail. Quadra Street Village around Hillside and Quadra is a nice commercial area, but definitely not aimed toward a Glebe-ish upscale clientele, given the large number of recent immigrants in the neighbourhood. Another possibility that you might want to look at is Sidney, which has a nice walkable core. Not a big price differential vs. Victoria at large, but definitely more affordable than Oak Bay or Cook Street Village. And with the current bear market, it’s possible Sidney will depreciate more than the core over time. Good luck. Please bring some Kettleman’s bagels.
I’ve always thought this in Victoria, but when the market was going nuts the Westshore was performing better (numbers aside, my personal observations of what you could get for X amount) and now it seems Westshore outside of some pockets is holding in there. You still have townhomes selling in the high 700s on the Westshore and at the same time you have three houses in the Oaklands area now at $799k not moving. Mind you these homes need work but you can probably but them for 750k or less and you are in the core on full sized lots. I would have thought with gas prices shift would be back into the core in terms of desirability.
I am still betting on the core long term but it has been underwhelming so far (maybe growing up in Europe I place too much bias on being close to downtown). I also definitively never saw the huge explosion in Sooke prices coming. For a while it was the best performing market (% wise) in Greater Victoria.
Often the markets in Canada move in sync and I think for your scenario crappy markets make execution easier. You’ll have a tough time selling your place in Ottawa in a slow market, but once you sell if market is slow (along with high inventory) in Victoria than the purchase is easier.
I have to be honest and say: probably the very areas where affordability is an issue. As Patriotz surmises, we are coming from a neighbourhood in Ottawa which is like Rockland / Fairfield (The Glebe, for anyone who knows Ottawa). We saw a few listings that might be somewhere in our budget but we know we might have to accept trading down a bit in terms of size / condition. We are open to other places as well, but I don’t think that Langford is the kind of place we want to be. We have become accustomed to a walkable neighbourhood.
Don,
In addition to the good advice you’ve already received here…
If you’re looking for a detached house (SFH) in Core Victoria, I wouldn’t wait very long.
For example, by Dec 2023, compared to now.. There’ll be about 7,000 more people living in Greater Victoria – about 3,000 more households, arriving from the ROC. Many will also want SFH in “core” Victoria (defined here as COV,OB,Saanich). You’ll find that the most of the HHV house hunters here are looking for SFH in the core. Not many condo or Langford hunters here.
And by Dec 2023 there’ll be only about 100 additional SFH in core Victoria (since the 2021 census data showed a tiny 74 net SFH added per year in Core Victoria.).
So for Core Victoria, in addition to the saying “they aren’t making more land”, we are getting close to saying “they aren’t making more houses (SFH)”
Depends on lifestyle preferences. If you love Westboro (which is where alexandracdn used to live) you probably won’t like Langford. That’s a core versus suburb thing, not one city versus another thing. Problem arises when one city is significantly more expensive than the other.
What areas appeal to you so far?
I’m retired, and the house is paid off, so selling is pretty much a necessity to buy something else as it wouldn’t be easy to get financing. I’ve said the same thing to my spouse – at one point, we need to take a leap of faith and just do it. But we would want to make sure that there is sufficient inventory in Victoria to have some choice. We also have a son in grade 8, so lining up the school year would be nice.
Lots of moving parts, but watching the Victoria market for a while to get a sense of realistic prices is important. We might also have to adjust our expectations as to what neighbourhoods we can aspire to live in.
Barrister: good suggestion on the combo dining room/office. While we have considered an addition, we hadn’t thought of the synergy of those two largely non-overlapping activities.
Our main concerns for an addition are around disruption during construction, overall cost, and diminishing of our backyard which is already pretty snug for us (~2500 sqft). At some point in future we’ll take over the basement suite and then reevaluate our needs. We don’t need the rental cashflow, but our current tenant has been amazing and we do believe in supporting density.
For “Don in Ottawa”…..my advice …for what little it is worth…is that you should just make the move.
Sell your house in Ottawa (or get a property manager and rent it if you can afford to keep it and also buy a place in Victoria).
As soon as you sell your house in Ottawa then buy the house you love here in Victoria if you can afford it.
My point is, don’t gamble with your principle residence. Buy if you can afford it and don’t sit on the sidelines with a bunch of cash trying to guess which way the market is going.
Life is short.
Good luck.
Hello Don in Ottawa. When I just turned 21 years old, (my then husband was 25), we bought our first home in Ottawa. It was on Dovercourt in the West End not too far from Carling. I worked at the only manufacturing stationery company in Canada. It was on Champagne Ave. Hutchings and Patrick. There was this neat Italian bar/restaurant near by and we would order the most fantastic pizza ever from them. It was square instead of round. I still think about it!! Anyway, we paid $17K for the house. It was a Cape Cod style with carport attached. 2beds, 1 bath, LR, DR and eat in kitchen. Full height basement. In Victoria at that time the equivalent house would have went for around $12K-$14K. A few years later, Victoria caught up with Ottawa and finally surpassed their prices forever.
We also had a small 17ft wooden cabin cruiser style boat as well as a ski doo. We would go up and down the Rideau Canal in the boat in the summer and skidoo in the winter. Such fond memories. Summers were impossibly humid though.
Hope you enjoy Victoria.
For an image you click on that little box on the lower right.
On that note does anyone know what all the other syntax is for inserting images and other misc stuff
You are adding up overlapping sets. A large number of new immigrants are already in the country on other visas. As well those on other visas who aren’t granted immigrant status will leave at some point. The legal immigrant target includes refugees. People emigrate from Canada too, which you didn’t include.
You are also off on the legal immigration target. For 2022-4 it’s in the 432K-451K range.
Immigration Class 2022 2023 2024
Economic 241,850 253,000 267,750
Family 105,000 109,500 113,000
Refugee 76,545 74,055 62,500
Humanitarian 8,250 10,500 7,750
Total 431,645 447,055 451,000
https://www.cicnews.com/2022/02/canada-immigration-levels-plan-2022-2024-0221165.html#gs.8hubk5
I’m sure it’s the same in Victoria – Some neighbourhoods in Ottawa gained at a higher rate than others, often defying logic. It’s difficult to say which areas will fall more, but I would think that older, more established neighbourhoods adjacent to downtown will retain their appeal (as opposed to more distant suburbs). A detached house in our area is easily $1m, even some semi-detached properties (side by sides) will fetch that much.
We will be selling here and buying in Victoria, so the bottom line for us is whether the gap continues to grow (to our detriment) or the prices fall equally across both markets.
An added factor in our neighbourhood is that no two houses are truly alike, making comparisons difficult at the best of times.
Impossible to show the math on data that does not exist, one million is a low estimate in the next year and a half: 600,000 legal immigrants + 100,000-200,000 (low estimate) war refugees, + illegal immigrants (?), +new immigrant work visas, +student visas + births(yet to be determined) – deaths. Not too mention thousands of parents that come to visit and stay. Not sure how many move away from Canada. We could also be entering a baby boom era.
Garden: Have you considered an addition. Often a combination dining room library and office works out well. Commom combination in some French homes that recognizes that the dining room is only occasionally used and generally not at the same time as one uses an office.
Thanks!
Put a
>(greater than symbol followed by a space) before the quoteReally basic question – there must be a way to quote someone else’s comments, but for the life of me I don’t see it. Perhaps it is a test…
GTA population alone grew by about half a million during the early 90’s bust.
In dollar terms, not a chance. In % terms perhaps, the market has seen a large % runup (like other formerly affordable markets in Ontario). Bigger % increase since Jan 2020 (56% versus 43%, Teranet).
Barrister: SFD still, but more modern layout and a bit more space. We’re in a typical post-war Oaklands bungalow that has no dining room, compact (but functional!) kitchen, only 2br up, and the main floor is upper. I’d like a dining room, a slightly bigger kitchen, and main floor entertain + office with 3br up.
Spouse wants slightly different things, so as a compromise there’s a good chance we’ll spend the rest of our lives in this house instead.
Many times, but what’s the mean, and of what measure?
Welcome. I’d say the froth is out of both markets but by froth I mean bidding wars and otherwise overheated buyer-hostile market. Prices may well keep sliding. Hard to say what market will hold up better but the Ottawa market was always weirdly cheap compared to incomes. In some ways it has just caught up, but if they keep sprawling perhaps supply will catch up whereas that’s more difficult here.
Chart is from May 2021
Garden: What are you looking to move up to? Bigger condo, SFD or a different location.
Can you please show the math on this?
Sales, just because we had a little bump last year
Bit early to say with few sales this month but month to date
Single family: 12% over (from 13% last month)
Townhouse: 15% over but only 15 sales so unreliable (18% last month)
Condo: 19% (unchanged)
Why not wait until Dec. 2023, there will only be another one million people in Canada. Great idea.
Sales, listings or both?
has anyone heard of the overshoot in a return to the mean?
We’re in the same boat. Would like to move up a bit but now doesn’t seem like the time.
Sorry to attract wild comments and make more work for you, Leo.
Perma bears are endangered species.
New commenter here – I feel that I have happened upon a trove of information which will be useful to my family as we consider a move from Ottawa to Victoria. We are in no particular hurry but would likely be looking at the 1-2 year time frame. It gets complicated when selling in one province and buying in another; we will be waiting to see the froth come off in both Ottawa and Victoria to see whether our plans are realistic (will the Ottawa market drop more than the Victoria one, or vice versa). I found the charts recently posted by Leo (% of houses sold over asking, for example) to be really instructive.
I look forward to taking advantage of what appears to be a lot of accumulated and varied wisdom among this group.
Mostly affordability data not being as bad as the 80s when we did have a crash. Also think we’re close to the top of rates so don’t think we’ll get a rate spike which would crash the market.
What I suspect will happen is prices will slide some more (10%? Just guessing) and then probably just sit or drop a couple percent a year for longer than most people expect while inflation and income gains eat at affordability. Not a good market for investors or flippers but also not such big declines that it makes a ton of sense to wait out the true bottom
To be clear I think it’s a crappy situation and will drag on economic growth for a decade but I also don’t think we’ll fix the structural problems and have them show effect earlier than that.
No more gender discussion please I’ve had some wild comments from new commenters land in moderation I don’t think it’s going anywhere productive.
17 months for $100k + an extra $75k-125k in interest over 25 years?
What are you basing this on?
New lists normal, sales sliding. Wonder if we’ll get an end of the month uptick.
Thanks Leo. Any update on sales price % over assessment?
Sales to list mostly stable VS increasing trend last year.
Last 14 days: 7% over ask. Point of reference: In august 2013 it was 4.5%, so this measure doesn’t get much lower than where it is now. Some sellers will always choose to engineer bidding wars by intentionally underlisting. That worked in a hot market to secure higher prices, but I’m not sure if it does in this market. Will have to take another look.
If I was looking to sell to upgrade and there wasn’t any particular reason for a rush then I’d be patient. We might be wanting to upgrade at some point but I would want to see quite a bit more affordability return to the market before I did so. If prices drop then the upgrade differential is lower. If they don’t then no loss.
My parents are moving down in the fall and we will be buying a house or townhouse then. Though prices are likely to drop further I’m satisfied that we won’t likely have a true crash from here on out so no big deal given they’re looking to buy for the next 10-20 years. Also the market is slow enough that there are some decent deals that come out so I think fall will be a decent time to pick something up.
Don’t forget to offer over ask by 300k minimum.
-888 Carnarvon St., No 1105, New Westminster, B.C.
-Asking price: $599,000 (March 26). Selling price: $598,500 (April 28). Previous selling price: $391,000 (2009)
-Days on market: 33. -Monthly maintenance fee: $379.80. -Taxes: $2,224.14 (2022)
What was it renting for? $2,050 a month, including someone sleeping in the living room. That’s a gross rental yield of just over 4%. Yes good time for the landlord to bail IMHO. Sold to owner-occupiers.
https://www.theglobeandmail.com/real-estate/vancouver/article-rake-hike-prompts-investor-owner-to-sell-new-westminster-condo/
The spring market is really the toss up in the equation. You can probably flip coin on that to try to figure out if it will normalize, take off or escalate the downturn. “The normalize” is the correction has run it’s course and the standard seasonal listings arrive and sell at a moderate pace; “the take off” with monetary stimulus through low BoC rates and a bond buying program that pumps stimulus into the market again resulting in the frenzy again; or the “correction continues” with interest rate growth combined with a recession coincides with the arrival of large spring inventories and the correction continues with price declines beyond the current forecast. But in any circumstances, December 2023 is probably too far off to even guess. For the spring, you can probably right off the “take off” because the stimulus cannon has been spent and it would be viewed as monetary suicide to do it again so quickly. So, it might be landing somewhere between the a normalization and the correction continues. I don’t have the confidence others have in the return of big demand at this point by simply looking at immigration numbers. Mostly because I believe that then pandemic pulled buyers and demand forward by a couple of years paired with the massive debt taken on across so many segments that make up buyers. It just might take those factors several years to normalize (but hey, I could be dead wrong on that). Anyways, you know your own circumstances the best and no one else can really know the best plan you. Good luck and enjoy!
If you see something you like now, buy it.
Silky imo I would think that prices next year will be lower I also think the economy will be also in a funk I would think that time is on your side as we are just getting started lm hopeful that we won’t get hit as hard as Van but time will tell all crystal ball stuff cheers
Alright HHV Brain trust, based on the current forecasts is Dec 2023 looking like the best time to buy a SFH in Victoria, for homeowners looking to upgrade?
Nope, I have always been about inventory and selection (and not to be bidding against 16 other offers). Especially, since I am looking for a 25 year property that will sell downsize from when I no longer need the family space, so an extra 5 or 10% off now is not a big deal. There’s actually a number of houses out there right now that I am confident I could buy with an offer tomorrow, but I am just being picky now. Through fall and winter I should be able to find a property that works for me and my family and keep my freedom 45 financials intact.
Stroller, the term “wokeness” is now mostly used as a salvo in the culture war (or in conversations like this discussing the term). I haven’t seen many other uses of it, though ymmv.
On the whole, the past few generations seem get more progressive as they go. The GOP is headed by white dude boomers and Fox News + other outlets that skew toward boomers, leading whatever regressive culture war is en vogue at the time (same sex marriage and trans rights as two examples). Zoomers generally are very much pro trans rights. Progress.
Boomers with regressive ideas will continue to make up less and less of the population, and things will shift to the better. Progress.
“Yeah I’m super lucky my boomer grandparents left me this house when they passed. Too bad they were kind of bigots and constantly misgendered my partner to his face. Ah well, progress.”
Bad idea, I would seriously start looking starting in November if you want to buy to live and not for speculation.
If you read Desjardins report, and use BC prices from BCREA stats, Desjardins is calling for BC prices to fall -10% more from now until December 2023.
His call for BC is -22% fall from peak (feb 2022) to trough (December 2023)
But BC prices have already fallen 12%, according to Desjardins report (-9% Feb to June, and BC REA down -3% more in July https://www.bcrea.bc.ca/wp-content/uploads/2022-07.pdf
The question is: Are you planning to stay on the sidelines (renting) for 17 more months waiting for a possible 10% drop?
Dejardins was out early on the correction forecast and now they just kicked it up a notch. I guess they don’t follow Benny Tal.
https://www.desjardins.com/ressources/pdf/pv220811-e.pdf
Looking at a 20% to 25% correction nationally with the sharpest declines in Ontario and BC. Also, expecting the fall to take about 18 months.
Ya only here for real estate news not sure about the rest lol
Patrick- I didn’t realize the exodus from Manitoba was that great, but I’m not surprised. Crime in the cities is out of control, and our judicial system is useless. I just had a car stolen on Sunday, they caught the idiot on Tuesday driving around the same area. He totally screwed up a perfectly good collector car, basically committing grand theft. Of course he will only be charged with possession. The level of effort to steal the car was incredible, I had several layers of security that should have deterred most thieves, but not this idiot. He probably has a long criminal record and should be put away for years, but our system is far too soft on career criminals.
Back on topic: with all the people leaving, you wouldn’t know it looking at all the houses and apartments that are going up on the outskirts of the city. The real estate market is down slightly but has been hot also. Tons of immigration, I wonder if those numbers are correct. Lots of Manitobans also go to Mexico either for the winter or to live. Not somewhere I would feel comfortable.
Intersectionality. Have you heard about this?
Honestly, equality is something I think everyone can get behind (at decent people). I just haven’t really seen it w/ feminism. Are there any feminist organizations run by men? by people who are transgendered? A lot of the language that they use is, by definition, sexist (mansplaining, manterupting). There are very good things from the movement, but it’s got a very anti-men bent, and really doesn’t seem to be about equality for anyone but themselves.
Woah you can post a GIF here I didn’t know that. Good one Leo! Can the blog also send me an email alert when there’s a post actually about local RE? Lol
I’ll start – I’m finding prices largely still too high for most rentals to make financial sense given the cost of financing. I’d be ok with a minorly cash flow negative situation if principal payments were still good. Problem now is the higher borrowing rates make your first several years of mortgage a much smaller fraction towards principal so despite paying way more, less is going to principal. Double whammy.
It’s based on my prior studies and experience. I’m fine if you have a different opinion/view and I’m sure you have thought about it a lot.
It’s not inclusive, but I’m not sure it’s fair to make a pronouncement about feminism as a whole based on one particular feminist writer’s idea.
Cat’s away…
Tommy Douglas had plenty of good ideas – e.g. Medicare. And some bad ones – e.g. Canada should withdraw from NORAD and NATO (as described in this 1961 Maclean’s article by Peter C Newman https://archive.macleans.ca/article/1961/8/12/tommy-douglas-vision-of-the-carefully-planned-fully-insured-promised-land )
But he wasn’t a “commie.” btw) he was elected MP for Nanaimo as leader of the federal NDP in 1969.
Haha. Sorry, Leo. Not a ton to discuss regarding RE right now, I guess.
Me checking in on my vacation to see what people are talking about here
No, it was for his advocacy of programs like Medicare. Douglas repudiated Eugenics years before he entered politics. Unlike his contemporaries Aberhart and Manning in Alberta, who actually practiced it on “inferior” Albertans.
When I was at university the writings of Andrea Dworkin were being widely studied. Andrea Dworkin would go on to call for the establishment of a women’s homeland as a response to the oppression of women. This, for example, is not inclusive.
Feminism purport to advocate for gender equality, but you can see in statements from Feminists in things like the #metoo movement, that the real concern is women, not all genders.
Is this a reference to his infatuation with Eugenics?
Okay, they bought a year ago May for $870k in Surrey. Their work is in Toronto and their employer has extended work from home until December, but their expectation was to sell for $1.15 mil?
From: https://www.ctvnews.ca/business/sellers-expecting-yesterday-s-prices-canadians-cope-with-a-correcting-housing-market-1.6023583
So, they are going to cancel and relist in October to try and sell. Not sure that’s going to work out well for their expectations, but interesting that folks believe a yearly gain of $230k should be a thing.
Careful Garden Suitor, “wokeness” is a dogwhistle used by the alt-left to dehumanize and strip rights from white, straight people, among other nasty things. I’m assuming you don’t want to be lumped in with that, do you?
Seems to me that “woke” is today’s version of “commie”, a label used by those who are too lazy to debate the actual issues to discredit people with progressive ideas. Like Tommy Douglas in his day for example.
Of course there are people with nutty ideas today, just as there were then. But when people like François Legault start using it (in French no less) for people who simply don’t agree with him, it’s time to give it a rest.
It seems crazy that BC Government workers need to fight to get COLA increases matching inflation. It seems the obvious “fair” increase is one that matches inflation, where neither side gains anything. That shouldn’t be hard for a labour friendly NDP government to see.
Feminism advocates for gender equality. I can’t come up with any ways in which it marginalized discussion on humanism or marginalized inclusion of men.
Thanks so much, Marko
“Seem to be just asking for the same raise that BC MLAs just gave themselves, cost of living adjustment.”
If I were the union, I would hammer that point over and over again.
I thought about this recently but the numbers tell a different story. We will end the year with approximately $7 to $7.5 billion in sales volume which will comfortably be the second best year on record behind last year. For the 5 year stretch of 2010 to 2014 we averaged between $2.7 and $3.3 billion. Even if you factor in inflation and that now we have 1,600 agent and back then we had 1,200 per agent sales volume is still up. This is not factoring in that my eyeball test tells me lower commission business models are the lowest percentage of market share they have ever been so the sales volume is at a higher overall commission rate.
Starving realtors will be those adjusted their spending habits in the wrong direction.
Not what I am feeling on the ground but will see how it plays out. Right now I have only potential cancellations in September.
Once again, my gut feel is if rental vacancy was somewhat “normal” we would have substantially more inventory. A lot of sellers just don’t want to sell 15% below peak when they can rent at peak rates. If owners were throwing their places up for rent and receiving no inquiries you would see more and quicker price adjustments on the listings.
3708 Arbutus – Sold for $1,950,000
2320 Arbutus – Listing cancelled
2796 Arbutus – Listing cancelled
Hello all – is someone kindly able to tell me what 3708 Arbutus Ridge, 2320 Arbutus Road and 2796 Arbutus Road sold for? I’d greatly appreciate it. Trying to keep tabs on the trend in that area!
Most were working from home, so don’t know what you’re talking about?
Seem to be just asking for the same raise that BC MLAs just gave themselves, cost of living adjustment.
I haven’t heard anything new (outside the ‘typical government worker’ or city worker etc) and i haven’t heard anyone suggesting that asking for a raise that is closer to inflation being an issue.
Care to share an example?
Just noticed a lot listings coming on in Brentwood Bay in the last week. Not a bad spot, even if it’s the bay everyone wants to live in.
They will need to be careful, there will likely be very little public sympathy for a union that can’t deal with a labour controlled party in government. As well, the public discovered how many BC public servants don’t do very much and are not really needed from the pandemic shutdown.
BCGEU serving strike notice on Friday (rumor) – https://www.timescolonist.com/bc-news/bc-government-workers-strike-on-the-horizon-5683396
“The union representing B.C. government workers could serve 72-hour strike notice on Friday, according to a source familiar with negotiations.”
Realtors go on vacation too. They’ve had 2 years to make hay.
Given the low sales currently wouldn’t starving realtors want to get to market asap?
Canada’s latest inflation reading was still going up, US has come down slightly but is still 8.5%, core inflation in the states hasn’t started moving down really, just flat-lined. They’re only really starting Qualitative tightening in September. On top of all that, there’s still a war going on in the Ukraine, China is still practicing Covid Zero, Europe’s transportation is fucked because their rivers are drying up and we’re on the brink of a recession that will last at least a year. Sellers always hold back listings in August because that’s what realtors tell them to do, wait until people are back from Vacation, list it in Sept. Inflation actually flat-lined last summer as well at 5.3-5.4% then took off again in October. We’re a long long ways from 2% inflation.
The “most expensive housing” metric is flawed IMO. Because they aren’t comparing similar dwellings and size.
For example, a 500 sq foot condo in Victoria sells for much less than a 1,000 square foot condo in Saanich. That doesn’t mean overall home prices are cheaper in Victoria than Saanich.
Yet they will compare a 500 sq, foot condo in Paris to a 1,000 square foot condo in Toronto to conclude that Canada prices are higher than France.
If you use flawed logic like that, you’ll conclude that iPhones are more expensive in Canada than India , because people in India buy the lowest model iPhone and Canadians can afford the “Pro” version.
If you do standardize for housing dwelling type and size, you’ll find that Canada’s housing is 31 cheapest among 110 countries (price/income) and we are middle of the pack among the G20. I note that Canada has slipped in this ranking, and used to have cheaper housing. But we are nowhere near “worst in the world”.
btw) for cheap housing, the winners are Saudi Arabia, South Africa, UAE and USA,
https://www.numbeo.com/property-investment/rankings_by_country.jsp
Luxury houses are really not very sensitive to interest rate hikes. A deep recession is another matter.
Forgot this was happening and finally some more details:
From: https://financialpost.com/personal-finance/taxes/tax-free-first-home-savings-account-explainer
I’m a little surprised that sfd under 1.5 are taking a little bit more of a hit than luxury I would have thought it to be the other way around
From: https://nationalpost.com/news/canada/worst-in-the-world-here-are-all-the-rankings-in-which-canada-is-now-last
Oh, the progress we have made in the last 7 years…..
I think the point is that people who do not embrace “wokeism” may be strongly in favour of human rights and against discrimination. They may, however, want to take steps based on evidence, reason, and fairness to all. Villainizing others, simplification of issues, and virtue signaling are annoying – but popular!
Oh absolutely, the methods by members of both sides are counter productive at times. But one side is pushing for less discrimination against human beings for being themselves. I’m with them, even if sometimes I don’t agree with the methods.
Don’t read too far into my comparison to the civil rights movement beyond one side being against human rights for a group of people.
Garden Suitor, I’m at a workshop and don’t want to derail the conversation too much more. (Sorry Leo!) But, it is important to note that the people behind this movement in university settings very explicitly reject the aims and methods of the original civil rights movement. It’s not the inheritance of the civil rights moment at all, and in some respects is it’s negation, a fact that older people may quite easily miss.
There’s a classic essay by Henry Louis Gates from the 90s that applies equally well now as then in these matters, at least as they regard to race:
https://web.stanford.edu/class/polisci92n/readings/nov.20.1.gates.pdf
I see Kristan’s point to a degree. The woke movement tends to shut down discussion outside of specific ideology and it is black and white thinking. Just like feminism, while the impetus for much-needed social change, marginalized the discussion on humanism and inclusion of men. Human rights are a value worth protecting and promoting, but just like environmentalism, you need facts and logic behind the actions or it devolves into a sort of superficial trendy movement that misses the mark.
Again, people are weird.
Kristan, there were likely many people with your position in the early civil rights movement. They probably said similar things about people pushing to end racial segregation and strive toward a more equitable society.
Were I around during that time, I wouldn’t have wanted my grandchildren today to look back on me opposing that movement (likely why critical race theory is so opposed by many in the states). Just as I don’t want my future grandchildren looking back on me today opposing this one.
We don’t have a say on how future generations look back on us. I’m standing for human rights. You do you.
Also to be clear I’m not saying you necessarily hold discriminatory views against people based on their gender or race.
Garden Suitor, I work in a university setting where these ideas have taken the deepest root, and I would absolutely not call this moment progress. It is highly illiberal, disdainful of civil liberties and pluralism, in favor of discrimination and all manner of other ills. You can call it progress; but that is a claim, an assertion, that many people (like myself) dispute in the strongest possible terms.
Like any movement for serious social change there is polarization and positioning and both sides get pretty entrenched and lose logical perspective. In the end the radical positions tend to fall off and norms shift, hopefully in a direction that is less discriminatory.
People are weird.
Kristan, the title of the first article you posted:
Progress. It’s called progress.
Pictures of people protesting against the civil rights movement in the 60s are the same as those protesting against trans rights now. Just different clothes.
And in 50+ years we’ll look back on those anti trans protesters with the same revulsion.
Back to housing… before I get cancelled!
Manitoba loses people each year to other provinces. And this number is increasing each year. From 4,000/year in 2011 to 10,000 per year in 2020.
And for 2021-22, a 40-year record number of Manitobans leave (net) for other provinces (12, 360).
Their number one destination….. you guessed it…. BC (4,000). Many of these are retiring cashed-up boomers, that will buy nice homes here.
We only build 74 SFH (net of tear-downs) per year in core Victoria (COV/OB/Saanich), that’s likely not enough just for the arriving Manitobans
https://www.brandonsun.com/opinion/2022/07/30/interprovincial-exodus-deserves-attention
“ The province lost a net 12,360 people to the rest of Canada from April 1, 2021 to March 31,2022 — the highest interprovincial loss in more than 40 years, according to the most recent figures from Statistics Canada.”
Regarding “wokeness,” a highly illiberal and fundamentalist ideology with little to no empirical foundation, whose partisans generally do not want to play by the normal rules of discourse, (like being named by people that disagree with it) see
https://tinyurl.com/dwpxpd7b
For a discussion specifically on the point at hand (that supposedly it’s a dog whistle, which is in the category of a sequence that goes like assertion, claim, assertion, bad faith etc etc)
For another discussion about some of the obvious flaws about how wokeness works in practice see also by the same
https://freddiedeboer.substack.com/p/some-principles-and-observations
Success and failure are both contagious. If you surround yourself with failures, chances are you will be a failure. If you are successful and those around you are high achievers, everyone benefits. Not everyone is equally gifted, and some are disabled by no fault of their own. In a thriving environment even less capable individuals can enjoy a productive life given some support, so long as they are willing to try. Opportunities are out there for everyone to thrive in this country.
Careful Patrick, “wokeness” is a dogwhistle used by the alt-right to dehumanize and strip rights from trans people, among other nasty things. I’m assuming you don’t want to be lumped in with that, do you?
Patriotz: Depends which province and one has to bear in mind that if the matter is brought under the divorce act that you are then dealing with a superior court which is also a court of equity and not just law. Makes it a bit less clear cut.
And I am a retired Ontario lawyer but I also believe that it would be wise to teach children in high school as to pitfalls as well as the benefits of marriage. Hoping that one day they might look up a you tube video is terribly irresponsible.
As a parent, seeing what is going on in the public school system, has me really considering the private school route for my children. I know I am not alone in this perspective because of discussions with many other parents (a few being public school teachers). It just seems that public schools have become ground zero for battles amongst political zealots. However, in the end, the failure of children not getting the tools need to succeed in the world is not reflective on the education system, but it’s reflective on the parents. Schools are not there to teach your kids much, it is just some tools and time provided to assist parents as actual ones responsible for the successful education of their children.
Jibe.
Jive is a type of music.
A pre-med moving in with a plumber at age 20. More seriously, I don’t think you’re entirely accurate about the asset / debt issues. I’m not a lawyer but you’re not either.
This is a very real concern. There is a difference between warning about the excesses of capitalism (ahem, Langford), and throwing out capitalism completely without offering any viable alternative. The left wing narrative is pervasive in all levels of education and many aspects of the media which is a shocking way to use taxpayer dollars in a democracy.
Yes, Patrick your whole list of things should be taught including how to find a proper financial match for a spouse. In addition the financial cost of supporting children out of wedlock. A lot more necessary than virtually all the social equality programs combined.
Marko, your comments are spot on.
Nice idea, and good luck with that. But with today’s woke/Marxist influence on the education system, they’d be more likely to teach the evils of accumulating net worth.
How is it not? How about we teach kids general stats about net worth, risks to net worth, and ethical strategies on how to accumulate net worth? I would suggest that this is an ideal class for guest speakers, including lawyers, business people, and those who have retired early.
Do I think teenagers should learn about mental health, relationship ethics, stats on long-lasting or high-conflict relationship characteristics, legal issues affecting relationships and family dynamics in the context of human rights to choice and differences? Yes, yes, I do.
Do I understand your concerns? Yes, I think is hard to do at the high school level when families may not want this, cultural concerns arise, and the quality of instruction may be poor. However, the same debate happened over sexual education not too long ago and it is part of the curriculum in public schools. I don’t see how this is that different. Actually, I think it is an easier topic to cover.
I also think that teaching how to clean and manage a household would be a good early skill to get – my kids (all boys) know how to do this. In some countries this is also part of the curriculum and there is daily cleaning of the school – by students.
Fundamental housing problems will hold back a crash imo. Inventory is already starting to flatline/stick at a low number and my gut feeling is sellers holding back on listing are less suppressed than buyers holding back on buying right now (hoping the market will adjust further). If things stabilize on the interest rate front and we don’t go into a crazy recession and some of the demand comes back by next spring, we will be starting a baseline for inventory well below the average.
When I look at the street I live on, 3-4 years ago I use to see 25 to 32 active listings. Currently there are three listings with one being $5.3 million. I had the 4th listing, but my client rented it out for some absurb number and cancelled the listing in Monday.
Just received another email re listing cancellation on a condo listing. Will rent for 12 months and get back to me after that. If we had adequate housing (plenty of rentals) these landlords would be more keen to sell, but we aren’t solving the fundamental problems of housing.
When I took CAP in highschool it was complete non-sense, didn’t learn anything. I was lucky enough that I had to mix mortar and carry rocks/cement bags for my dad as a teenager so that spurred me start researching finances asap as I realized I was too lazy for honest work. Quickly clued in 1/2 the degree were completely useless, etc. We had some sort of career prep day at Vic High when I was 16 and College of the Cariboo (now TRU) sent someone of the Respiratory Department and I was like “so you’ll accept me straight out of highschool, three years, job essentially guaranteed @ $75k/year, I don’t have to heavy manual labour, where do I sign.” I showed up to Kamloops and out of 60 students there were only 2 of us straight out of highschool. A lot of the other student had done non-sense degrees, had no job, and started the program at 22-27 yrs old.
well i guess some of the students weren’t paying attention …
~ 29% of Canadians carry credit card debt (2019)
about the poorest financial decision that can be made.
Understanding of common law in BC wouldn’t be a bad asset coming out of high school. Let’s say you start dating someone at 20 years old and you move in together. One-person pursues a plumbing certification, other person is in pre-med. 10 years later you have 500k in assets (plumber worked, bought real estate), pre-med has studied and is in residency and has 200k in student loans. The plumber legally has to give up half the assets, take responsibility for half the debt, and gets zero of the income earning potential of doctor. Let me know if I am missing anything in this picture.
How is this a curriculum? After you say what you said above, and then add “when a marriage breaks up, in BC each spouse is entitled to 50% of the growth in assets during the marriage”…. What is left to say? Do you hand out a bunch of sample questions letting the kids calculate the split up in assets for various divorce scenarios?
What’s next? .., teaching them:
—- custody rules/rights to the children after a divorce
——how to get a restraining order
——how to find the right partner in the first place
—-how to spot a “gold digger”
Considering last week RBC just put out a report that we are going to have a big downturn (larger than the last 5 we have had) I tend not to put a lot of stock into what any Bank, CMHC, economist says when it comes to the prediction of house prices.
This is the single biggest and most likely risk to financial security for Canadians. The divorce rate in BC is currently 40%. This does not include marriages that end in separation, but not legal divorce.
I suspect, however, that a lot of parents may share your views. This still leaves a lot that is not taught in high school.
LeoS has shown good data that sales to assessment is down 10% here in Vic . But leoS data isn’t Canada wide like Tal’s analysis is.
Tal is a smart guy who does lots of data analysis, so I wouldn’t easily dismiss what he says.
So they are saying that 10.5% of that drop is due to sales mix? meaning prices are really only down 3.5%. Doesn’t jive with what realtors are saying out of Vancouver, Toronto, or even the median price to assessed on this blog shows for Victoria (which all you bulls know must be dropping much less than average of the country). So if Victoria is down 10% its doing much worse than the rest of the country according to Benjamin Tal.
Much of that seems inappropriate and undesirable to be taught in a high school curriculum.
For example: the significant risk that ex. divorce/separation poses to financial goals
That’s complicated and differs between provinces and countries. Unless you’re a matrimonial lawyer, much of what you taught your kids might be wrong. Regardless. I don’t want my kids to be taught about “prenups, “postnups ”, splitting of matrimonial assets and other divorce issues in high school. These are kids! They can learn stuff like that when they become adults. There are plenty of YouTube videos by accomplished lawyers that cover those topics.
In my experience, and I say this cautiously, most high school teachers are financial idiots themselves. In recent years I have run into a surprising number of young people in their early twenties that seem to have trouble understanding the basics of a mortgage. I am glad that we are doing better than our southern neighbours but I am suspicious of the claims by our educators.
All of our kids went through the Canadian school system, as did I. There is a difference between “financial literacy” taught in schools here – which is largely limited to basic budgeting and information about pay cheques – and what you need to know to make your own long-term financial plan, the significant risk that ex. divorce/separation poses to financial goals, how leverage works and when to use it and when not to, how specifically to become financially independent, and how much you need to do so.
I know this was not “taught and tested” in school because I taught my children it myself while they were in high school through regular financial management sessions and the majority of what I showed them was unfamiliar and not taught in the school system. Maybe it will be now that the internet is available and more teachers have researched and followed these techniques themselves.
Don’t post that on the VIHM Facebook page you might end up with exploding head blood on your hands lol
The Canadian school system doesn’t “totally fail” to teach financial literacy, in fact we are 2nd best among 15 countries tested for financial literacy among high school students.
“Financial Literacy” is taught in Canadian schools (in courses like maths, Career exploration, business, social studies).
And in a standardized Pisa test for financial literacy, Canada scores near the top among countries, and BC had the best results (17 points above average province scores) among the provinces. BC’s score of 550 would put it second only to China among countries in scores of financial literacy (see chart)
https://www.oecd.org/pisa/PISA-2105-Financial-Literacy-Canada.pdf
I don’t really know either other than I think it should carry a discount to the core and a downturn should affect them more.
Canada scores very high in standardized testing for reading, maths and science (PISA 2018 testing).
For maths.. We score 9th out of 60 countries, including higher scores than UK, Germany, Australia and USA.
And this includes and goes way beyond “balance your checkbook” and “calculate interest” arithmetic problems.
https://www.oecd.org/pisa/PISA%202018%20Insights%20and%20Interpretations%20FINAL%20PDF.pdf
If you’re referring to teaching “managing money”, investing, planning for retirement, taxation etc. … that’s called “financial literacy, … and that’s taught and tested as well. Canada scores much higher than most countries in that (see next msg) …
No idea. I don’t even look at Westshore.
No, but probably at the mid-point of a decent correction. As well, someone mentioned to me the other day that Kelowna and Okanagan has hit 8 or 9 months of inventory. Does anyone know if that’s an accurate number?
I guess the RE market crash isn’t here yet.
What’s the price for a similar one that’s finished?
A limited farts premium
Well for as much as we teased them for coming off desperate, their strategy seemed to work well. Risk mitigated for the builder by acting before rates increase and prices drop further.
Bad news for bears…
Benjamin Tal (CIBC) has an interesting report out (July 22, 2022).
https://cibccm.com/en/insights/articles/the-week-ahead-project-cancellations-will-worsen-housing-affordability/
“ While at times it can feel that way, the housing market is not in a free fall. We estimate that close to three-quarters of the 14% decline in the average national home price since the February peak was due to the composition factor, with sales activity shifting from more expensive units (low-rise) to less expensive units (high-rise). This is a similar but much more painful version of the trajectory that we saw in the 2017-18 price adjustment.
What’s more, the sales-to-new listing ratio, at around 50%, is now where it was for most of the past 15 years – still indicating balanced market conditions.”
“ In fact, we might be in the process of making the situation worse. The significant and rapid increase in interest rates, along with surging construction costs and a lack of available labour make projects that only yesterday looked promising, totally uneconomical. Based on information we obtained from Urbanation, out of the 30,000 condo units that were supposed to be launched in 2022 in the GTA, no less than 10,000 have been cancelled or put on hold. And the situation in the purpose. built space is even worse. We are in the midst of a project delay/cancellation wave, with developers choosing to sit on their hands, rather than engaging in a money-losing proposition.
So when the fog clears, the units that were supposed to be built now will not be available – making a tight rental market even tighter. And that’s the opposite direction of where we should be heading.”
You are absolutely right and it has mystified me as to why our very expensive public school system totally fails to teach our young people.
9-13% is pretty good Barrister. And not advertising, just saying it is one of the easier things to figure out if you know basic math and have access to a calculator and the internet.
Probably more people need to be getting into condos. Arguably the quality if life is equivalent or even better. In the same vein renting may be under rated as well.
3575 Delblush Lane sold in multiples for $1,344,000.
Totoro: I will happily hire you if you can improve my returns with minimal risk. The family business has a ROE of between 9% and 13% over the past five years. Personally I doubt if one can easily match that in an absolutely minimal risk environment.
Nevertheless, I suspect that you can definitely improve most peoples situations and for a lot of people in a very dramatic way. And I have no idea why our education system seems to completely fail most young people when it comes to the most basic financial concepts.
People seem pretty confused about money.
Financial security does not equal a good life or guarantee happiness, but having enough money does take the pressure off and buys your time back for your own use. And your time is limited.
And more money does have a positive correlation with happiness. A new study from Wharton refutes the previously often quoted study that incomes above 90k do not translate to greater happiness. Happiness may continue to increase as you earn more:
https://penntoday.upenn.edu/news/money-matters-to-happiness-perhaps-more-than-previously-thought
And if you have bought back your time and are looking for something to do with it, the highest ROI for happiness seems to be using it to build and maintain meaningful social connections and be part of activities that give you a sense of purpose.
https://news.harvard.edu/gazette/story/2017/04/over-nearly-80-years-harvard-study-has-been-showing-how-to-live-a-healthy-and-happy-life/
And then there is the plain math of money. You can indeed figure out what you need for financial security by putting pen to paper. Give me your age, cost of living numbers, assets, debts and income, and I can tell you in about five minutes and let you know how to manage risk and improve returns. And no, this is not my profession. Should be taught in school imo.
You can buy a solid condo in Edmonton under 200k.
How many did fixed at less than 5 years recently because they could get a rate that they actually could complete a sale on? I know Leo has said that in the last year there’s been way more variable than normal because of this.
If you go back 5 years to 2017 (5 year fixed renewals) mortgages 5 years ago going forward next 16-18 months (until end of 2018) were trending up so it won’t be a massive shock on the refinance. The big shock will be in 4 years when people who secured 5 year fixed mortgages as low as .99% in 2021 come due in 2026.
I would consider a 25 yr old with $2m a lot more wealthy than a pensioner with $2m. The 25 yr old has 40 yrs of earning years left to expand their wealth. The pensioner has limited opportunities to get wealthier.
You were able to do relaxing/biking/pizza at age 18 because your parents (and society in general) worked hard before that to create what you could enjoy. People today aren’t working any harder than previous generations did.
I’m not sure why you describe the current situation with people needing to work as “so sad”. Many people enjoy working and are making society better. As you know, much of the money they are pouring into their homes is equity (forced savings).
By and large the Bank of Canada will follow the US Fed. While there is no immediate impact on fixed term mortgages here it shoul be noted that almost a quarter of all fixed term mortgages come up for renewal every year. Certainly over the next twelve months the impact will work its way through the economy. (The US, in terms of concerns for the Fed, is a bit different since over 90% of residential mortgages are for a 30yr term. I do mean term and not amortization period).
Depends what kind of recession for the Victoria RE market.
I’m curious, what exactly is the value in becoming “high net worth” or “rich”?
It seems to me that if this offers some inspiration or freedom or security the pursuit can be meaningful.
At the same time, these things can be pursued in different ways, so it makes sense to use strategies other than money to achieve them.
Too much emphasis on money has a lot of dangers.
Personally, the independence of home ownership with some relative guarantee of income needed for a good life is pretty meaningful. Lifestyle and travel just don’t have to cost much at all. Simplifying tastes, focusing on relationships and community, pursing hobbies, meaningful “work”.
What is so sad is the the cost of something as basic as home ownership has gone up so much that countless years now have to be vested in earnings at the expense of the things that are needed for a good life. This cost will never show up in a balance book or budget, but how many years working at jobs or extended hours that are not enjoyable at the expense of relationships, community, and meaning?
Nothing more fun than riding bike around town, going to the video store for a movie, and watching it with friends and family with a home made pizza on a Friday night. You can do that when your 18.
I think if the BoC is going to retain any credibility they will keep the focus on inflation and anyone who was betting on rates not going up will have to face the consequences. But if we go into a recession that will reduce demand without higher rates.
On the mortgage front, if the split between fixed-payment and floating-payment variables is 70:30 (think I read that in Leo’s article), then so far the vast majority of folks have not seen any mortgage payment increases. Fixed + fixed-payment variables will be the majority of the market.
Looking at my own mortgages, it looks like my fixed-payment will be triggered this year (assuming the 2 expected rate hikes). I would expect the majority of fixed-payments mortgages to be triggered this year. I suspect we’ll see more significant changes in the economy (and housing) in 2023 should the BoC push another 1 to 1.25 points.
I do wonder if the BoC will ‘walk the line’ and try and avoid triggering a significant portion of variables (even thought they’ve stated they don’t care about housing).
In fact pretty much all the improvement in global well-being over the last few decades has been in developing countries, most notably China, also India and smaller countries like South Korea, and in Eastern Europe.
Looking at global averages obscures the fact that many people in Canada or the US don’t live as well as their parents did.
SFH Hunter- I couldn’t disagree more. Yes life is great if you’re one of the privileged living in a developed country, have a good education and earning a good salary. For billions of people, life is miserable. Even privileged people seem to have issues such as substance abuse and are miserable.
Is anyone aware of a way to see Sidney/Saanich stats separate from the Victoria stats?
The concept of “wealth” would depend on one’s stage of life. If a 25 year old had $2 million dollars and no other assets, would that be enough for the next 60 years. I doubt it. However, the same amount for someone 65 could be conceived as “wealthy” , or financially comfortable, as it just has to last 20-30 years. I’ve heard that many lottery winners end up in worse financial condition in a few years. Most people are poor money managers, and poor property managers. I don’t trust money managers so I’ll keep my investment in property and let my property managers take care of things. Its worked nicely for the last 33 years.
Heh I’ll pass on that thx! We have enough exposure to RE with primary house and 2 young kids on top of a full time job take up all my time as is.
If and when we move up, we might keep this house as a rental though.
I don’t know why, but mls 911575’s re-list today made me giggle a bit. Originally $3.49 mil and expired after 39 days, re-listed at $2.99 mil and then cancelled after 39 days. Off market for a week, and now back on at $3.5 mil. I am curious about the strategy here from a realtor perspective? Hope that a buyer doesn’t ask their own realtor for the listing history? Trying to fend off low balls? Looking at it as a long haul listing and putting at a price that will be widdled down over the next while, so push it high again?
Landlording 3 properties (say 6 tenancies) would be way less of a time commitment than a full time job. I’d call it a semi-retirement win! Assuming the income was there (no mortgages).
Yes, that is why am a Former Landlord. I sold 4 years ago. Very happy to get the price we did at the time, but could have got a lot more if we held on through COVID. However, I am glad we weren’t Landlords through that first part of COVID with everything shit down and having no recourse if tenants did not pay rent.
Try a whole house with two separate sets of tenants up and down next time ;)…..
Yup. We rent our basement and have been fortunate so far with good tenants, but even then it’s a non-zero amount of work.
Yes, math, but still a choice still based on target retirement NW. Sell now and have $2.5MM or work as a landlord for 5 more years and have $3MM. Both valid options with tradeoffs.
To be honest, landlording is effing annoying at times. Seems like things like to break all at the same time or in relatively short succession , add that to the neighbor complaints etc related to everything from street parking to partying… Thank god I haven’t had anyone squatting yet without paying rent.
It is not. It is still just math. Your choice to sell or maintain rentals is optional if you have the equity.
Yup, it’s a matter of choice.
We’re on track for a comfortable early retirement, but I imagine I’ll keep working in some capacity because I really love the work I get to do in the tech industry. Not to mention the financial compensation.
It is practically the same. Being able to sell 3 houses for a net of $3MM, selling stock for a net of $3MM or having $3MM in cash is all the same.
If you have to work to be a landlord of those 3 rentals, then it’s less clear.
That is interesting because your net worth at least at the moment of transitioning between asset classes are essentially the same. Yet one is wealthy and the other one isn’t….
Frank – I wouldn’t agree with your ‘The world is just too messed up’
The world is better than it’s ever been. Globally over the past 50yrs – education has improved, life expectancy is rising, fewer wars than we have ever had, murder rate per capita is lowest it’s ever been, healthcare is drastically improving, violent crimes rates have decreased across the board, child mortality rates significantly improved. People living healthier, safer, longer lives.
If you consume an endless amount of mainstream news, you might think that the world is a ‘messed up’ place and it’s getting worse by the day.
Anyway, getting off topic I suppose…
if you like working is it still OK to work?
Just checking.
The numbers that totoro posted correspond roughly to the top 2%, the top 0.25%, and the top .03% of Canadians by net worth.
By that definition I know lots of Canadians who are “wealthy” and a handful who are “very high net worth”.
The only generalization I can make about them is that they all consider themselves “middle class” 🙂
There are a lot of people in Canada that have not worked a day in their life and live in abject poverty.
Signpost- Nice concept, I doubt it’s achievable in today’s society. The world is just too messed up.
If you could sell the 3 properties and eg. live passively on dividend stocks, then sure I’d say wealthy. Otherwise you have a job, albeit one with possibly significant equity.
Not having to work another day in your life? That’s wealth.
You’re the president.
Hi Leo, can I join the forum?
Individual based on those stats. To get to individual net worth if you are part of a couple you need to determine your share of joint assets minus debts. When you count together it is household or economic family net worth. The median household net worth in BC is about 430k.
https://wealthawesome.com/net-worth-by-age-in-canada/
Yes, there is Single, Married, Divorced. Common-law, Separated, Widowed, Separated and living common-law, widowed and living common-law, divorced and living common law and on an on and on. The stats are mind boggling.
Many on here and everywhere really, consider their “wealth” as say being worth $2M or at least indicate that. But I think they are talking about their combined wealth, i.e. the husband and the wife. Considering, 40% of them eventually get divorced, then they really are only worth one million.
But people who are legally separated almost all divorce eventually, so you should not add the rates.
What you should add is couples who were never legally married and then break up. They have a higher rate of breakup than people who are legally married.
Just looking. The divorce rate in BC sits at 39.9%. That doesn’t include “legally separated”. So maybe 45% combined?
Totoro/others. When talking about wealth here….do they mean individual wealth or the combined wealth of a couple or the defined wealth of a family? It never seems totally clear.
The hootsuite layoff triggered my curiosity as to where all the tech worker posters on this forum went? Surely they are not as impacted by rising rates if they are clearing 300k USD a year while living in Victoria…
That would be this Hootsuite I guess. I always considered them a bit of a joke. Guess the hype wore thin.
https://vancouversun.com/news/staff-blogs/hootsuite-gives-interns-back-pay-ends-controversial-practice-of-unpaid-internships
Awfully quiet from all these supposed “highly paid” IT folks on this forum lately. Where did they all go??
on a related note… https://www.cbc.ca/news/business/hootsuite-layoffs-1.6545835
When one is physically and mentally healthy, when one is loved and supported by a partner and friends, when one can call their time their own, when one is under no obligation to others financially, when one is free of “Status Anxiety”, when one can sleep in a comfortable place without fear of unwanted intrusion, then one can truly be grateful for one’s abundant wealth.
Wealth degrees Canada by net worth.
UHNW (Ultra High Net Worth) – Having assets of $38 million or greater
VHNW (Very High Net Worth) – Having assets from $6.5 million to 38 million
Wealthy – Assets from $1.3 million to $6.5 million
https://www.thekickassentrepreneur.com/top-one-percent-of-wealth-for-canadians/
The definition of “ wealth” should have nothing t do with money…. At the end of the day.. money doesn’t matter….
Step 4/5 doesn’t really work with (non-sealed) gas appliances, so when they announced early step code they effectively put one nail in the coffin.
VicRE I was wondering what was going on there, seemed strange at the time. Thanks for the update.
Barrister, apparently that 1021 St Charles had to take a back up offer in case you are still wondering.
Applies to single-family homes all the way up to office and residential towers:
By 2025, new Victoria buildings can’t use natural gas or other fossil fuels, council decides
https://www.timescolonist.com/local-news/no-natural-gas-or-other-fossil-fuels-for-new-buildings-in-victoria-by-2025-council-decides-citing-climate-change-5674566
Exactly!
If you have to think about whether you are wealthy than you are not.
So say if you have 3 rental houses and don’t have to work again provided you care after them yourself, does that count? Or do you need like 6+ with a property manager such that you don’t even need to think about them ever.
The most useful definition I’ve read is when you have assets enough to never have to work again.
Granted a lot of that drop must be due to sales mix, but if the most expensive properties aren’t selling that says something in itself.
https://www.yorkregion.com/news-story/10688747-king-township-homeowners-struggle-with-new-normal-after-50-price-plunge/
Simple. Someone better off than you.
I’m curious. What is the definition of “wealthy” in Canada. I might fall in the “wealthy” category by some people’s definition but I sure don’t feel “wealthy “.
The tough thing at this point for any segment of buyers is how willing are to put down $250k to have it possibly evaporate into a capital loss within 6 months? Then to look at a possible 5 to 10 years to earn it back.