Eby’s big housing push: real deal or dud?

A few weeks ago David Eby released his housing platform which contained a long list of actions both on the supply and demand side of the housing market.   While for now that is just a list of promises, his recent selection as premier in waiting makes it certain he will at least be in a position to follow through very shortly.

At the same time the Overton window has shifted on housing, and zoning reforms are now being done in many jurisdictions around the world, including Ontario where premier Doug Ford is apparently on the cusp of announcing a broad range of province-wide zoning and regulatory reforms.  It’s clear that some level of consensus is emerging on both sides of the political spectrum that broader provincial level reforms will be required to tackle our ongoing affordability challenges.

Let’s dig into each promise listed in Eby’s platform and see what effect it might have on the market and housing in general.

  1. Increase funding for non-profit housing providers – The promise is to double funding for non-profit and Indigenous housing providers to support more projects.  That will lead to more production from a sector that has said they have capacity if there was more funding and land available and should lead to an increase in non-profit housing construction.  That said rising rates and construction costs are having a disastrous effect on this sector and this may just stem the bleeding.
  2. Create a Rental Housing Acquisition Fund – $500M to acquire rental buildings and move them into non-profit operation.   This is a key action to save existing purpose built rental stock which makes up most of the more affordable units in Victoria.   However while that fund (along with the proposed right of first refusal for rental buildings) will limit purchases by investors that will opportunistically renovate those buildings to capture much higher market rents, it doesn’t fundamentally solve the problem that these buildings are old, need repair, and there are few alternative purpose built rentals available.   Non-profits will be faced with the dilemma of letting the rentals deteriorate (while keeping them affordable), or finding additional funds to renovate them.  However this action should help stabilize rents in buildings that migrate to non-profit ownership.
  3. Eliminate 19+ age restrictions in stratas – Currently stratas have an exemption to the BC Human Rights Code and are allowed to discriminate based on age.  That takes two common forms: adults only buildings (18 or 19+), and seniors only buildings (usually 55+).   The NDP is proposing to eliminate the first one such that stratas will not be able to ban kids.  That will bring more selection to families looking for condos and prevent situations where people are forced out of their home if they have kids.  It will also equalize the value of those age restricted condos with the broader market as the buying pool for them will expand.  Don’t expect a huge impact though.  Adult-only (not seniors only) condos made up 15% of sales in the past year in Victoria.
  4. Eliminate rental restrictions in stratas – This could have a larger effect on the condo market.  While new condos tend to not have rental restrictions (some municipalities prohibit them already for new construction), many old condos still do.   42% of condo sales in the past year had either a total (18%) or partial (24%) restriction on rentals.  Removing that restriction will increase the value of those condos slightly as the potential buyer pool for them expands, while improving rental availability.  There is also a recognition that too many rentals with absentee landlords can be problematic for stratas, and a promise that stratas will be given additional powers to go to the residential tenancy board to evict problematic tenants.  Personally I’m unsure whether the elimination of rental restrictions is a positive step.  Allowing stratas to set sensible limits on rentals may still be a good idea to prevent buildings going to majority rentals and making management difficult with many absentee landlords.  In the long term relying more on the secondary market for rentals is likely not going to lead to improved security of tenure for renters.
  5. Short term rental companies will be forced to cooperate with municipalities – This is a key step to help cities put limits on short term rentals.  Earlier in the year I spoke to Chek News about the problem of unlicensed short term rentals.  Though cities get the blame for it, the reality is Victoria has done what they can to restrict AirBnB within the limits of the existing framework.  Without cooperation from the platform it’s a tedious process to hunt down individual non-compliant listings requiring a lot of staff time.   Forcing the platforms to cooperate will allow Victoria to stamp out the remaining unlicensed units and provide an easy path to licensing for any other municipality.   While not enough to address the housing shortage, it could put hundreds of units back onto the long term rental or resale market in short order.
  6. Housing needs will become minimum targets – The province has recently required all municipalities to prepare housing needs reports which are meant to estimate how many homes are required in the municipality in the coming years.   The estimates themselves are extremely conservative due to problems in forecasting that were pointed out in the subsequent provincial expert panel report on affordability, but it does set some concrete targets.  Eby is promising to add teeth to those targets, though exactly how remains to be seen.  Currently most municipalities are already meeting or exceeding those targets, but some of the laggards like Oak Bay, Central Saanich, and Saanich may have to dramatically step up their housing production rate to avoid penalties.
  7. Legalize suites everywhere –  Suites are already legal most everywhere so this won’t have any impact in the capital region.  When even Oak Bay beat you to the punch, you know you’re probably aiming too low.
  8. Implement DAPR recommendations – The Development Approvals Process Report is a fairly comprehensive 2019 report investigation issues with local processes related to approving developments and identifying a number of reforms to improve efficiency and throughput.  It was largely ignored until recently when recommendations actually started being implemented.  One of the first was a reform to easily allow cities to skip public hearing for OCP compliant projects which would add certainty and reduce approval time for smaller projects.  It’s unclear which recommendation will be tackled next, but some of them could meaningfully reduce barriers to development.
  9. Anti-money laundering actions – This promise is to implement Cullen commission recommendations to strengthen enforcement and improve the beneficial ownership registry.  While it’s unclear exactly how much of an influence money laundering has or had on real estate, a crackdown helps to assuage concerns that any newly built homes will be swallowed up by toxic demand.
  10. Flipping tax – Many people pointed out that the provincial Speculation & Vacancy tax was primarily a vacancy tax rather than a speculation tax, with a secondary provision to tax so called “satellite” families that paid little in BC taxes but owned expensive homes.  The new tax targets homes that are flipped (sold and resold) in less than 2 years to try to cut down on investors benefitting from tight market conditions and adding to market volatility.   While everyone loves to hate real estate speculators and I’m sure this tax will be popular, I doubt we will notice the impact.
    There’s two kinds of flippers active in the market:  those that renovate and add value to houses in poor condition before selling them, and those that opportunistically buy homes in rising markets just to sell them shortly after with no or minimal renovations.  The former provides a service while the latter could likely be described as toxic demand and a sensible target for a tax.  However flippers don’t inflate prices in the long term.  They capture some profits during hot markets but once they are out their net impact is zero.   A flipping tax will likely just encourage flippers to hold a bit longer to avoid it.  Eby has also said that there will be exceptions to account for sales due to normal life events, and a phase in period to encourage flippers to sell their houses rather than pay the tax.
  11. BC Builds home construction program – This is likely the least clear of the initiatives. The plan is to build affordable housing for the middle class, but it’s not specified what the targets are, how much money would be allocated, or what kind of housing forms or tenures would be built.   While any units built will be good for those living there, I suspect that the impact will be limited given the government’s previously lacklustre performance delivering on public construction of homes.
  12. Legalize triplexes in single family zones – This promise received the most attention and for good reason.  Though the British North America Act gave provinces the power to regulate land use, that power was largely delegated to local governments.  Eby’s promise here shows a willingness not only to set minimum standards and expectations for municipalities on housing, but also to directly intervene and override them, setting a new floor on density that can be enforced.   However as it stands, the precedent it sets is the only concrete thing we can say about this promise.

    As written, the promise could be meaningless.  The reference to replacing a home with a triplex “on the same footprint” would make it an ineffectual home conversion law rather than an upzoning, since the older homes that would be candidates for replacement with triplexes will almost all be too small to accommodate three units.  If they instead meant that a triplex can be built to the max floor space ratio and setbacks it could be impactful, but there would still be a dozen ways for municipalities to impede construction by applying minimum parking or other requirements.  With careful design this could legalize a scaled down version of missing middle in all BC cities and have a very large impact, but we’ll have to wait on what the amendments actually look like.   If it does turn into effective legislation, it could support the value of single detached lots as they gain an additional use as potential building sites, while broadly improving availability and affordability of triplexes.

It’s a big plan and the mix of supply and demand measures seem to have found approval from most voices.  I’m optimistic  that there are some important precedents being set around zoning reform and suspect that this is only the first step in a number of upcoming reforms, but until the plan turns into action it remains to be seen if it will move the needle on affordability.


Also here are the weekly numbers courtesy of the VREB.

October 2022
Oct
2021
Wk 1 Wk 2 Wk 3 Wk 4
Sales 115 225 350 745
New Listings 318 544 779 866
Active Listings 2270 2256 2247 1036
Sales to New Listings 36% 41% 45% 86%
Sales YoY Change -43% -39% -35%
Months of Inventory 1.4

Sales have picked up a bit in the second half of the month, mirroring the increase we had in the same weeks last year and closing the gap slightly on a percentage basis.   New listings remain ahead of last year’s pace while inventory is about double and dropping approximately how we would expect it to this time of year as the fall market comes to an end.

We saw a similar uptick in sales ahead of the last rate hike, though there aren’t any strong incentives to buy before a variable rate hike as those are passed on regardless.  Wednesdays rate hike of likely 0.5% to 0.75% will hit affordability again and take out some buyers, while it will push most holders of variable mortgage to their trigger point.  So far we haven’t seen any broad signs of distress from sellers though, with new lists up from last year’s low levels, but not to levels that are out of the ordinary for this time of year.   Victoria’s market should be somewhat more robust to those pressures with the highest percentage of owners with paid off mortgages, though our high prices are also partially supported by high debt loads.

Month to date, prices seem to have drifted down slightly from September, with the median sales to assessed value ratio slightly lower for both houses and condos.

272 Comments
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Mel
Mel
November 25, 2022 1:05 pm

I’ve spent a lot of hours as a volunteer stata council member taking care of business required under the strata property act. I’ve never had extra time that I could devote to dealing with problem tenants because their landlord is “absentee.” It’s already hard enough to get people to volunteer for these high responsibility, thankless jobs. Adding “volunteer landlord” to the job description of council members is a bad policy move and I think Eby’s analysts missed the mark on this one, big time.

Introvert
Introvert
November 1, 2022 7:45 am

Leo, thanks for your tolerance of the family doctor discussion. Keep in mind that it’s not as off-topic as it may appear: certainly, the scarcity of GPs has kept more than a few people from moving here and buying RE here.

Introvert
Introvert
November 1, 2022 7:39 am

Wow, haven’t seen a doctor say a negative thing about the new deal. The opposition Liberals and Greens have no criticism, either. All of these are good signs.

Family doctors hope new deal allows them to keep doors open, attract others

https://www.timescolonist.com/local-news/new-deal-includes-pay-increases-for-doctors-roster-for-patients-with-no-doctor-6032448

patriotz
patriotz
November 1, 2022 4:09 am

he was working as an economist at the BoC in early 80s… they were watching delinquencies and they doubled – from 0.5% to 1% (really low).

And there’s your proof that you don’t need high delinquencies to get a price crash.

patriotz
patriotz
November 1, 2022 4:06 am

interest rates will eventually moderate

Interest rates have already moderated. They are no longer ridiculously low.

Barrister
Barrister
October 31, 2022 10:17 pm

What advertising expenditure for a doctors new practise? Put up a note here on House Hunt and maybe one on Vibrant Victoria and give it two days.

totoro
totoro
October 31, 2022 9:07 pm

You can’t sell a family practice and it has been like that for more than 20 years. So what. Things change. Why is it even a topic?

If you earn a lot then do it different based on your reality. Buy your building, buy other investments, band together with other physicians to invest – which is what has happened.

Physicians have their troubles with the system and I’m glad family physicians are getting a raise, but making 350k a year through a corporation, 250k net, gives you options.

Hopefully the raise is enough to get more family physicians in BC. Not sure given e-medicine and US options.

Vic&Van
Vic&Van
October 31, 2022 9:02 pm

Yes, you cannot give away a GP practice. It is almost the converse of a dental practice which can cost millions to buy.

Bluesman
Bluesman
October 31, 2022 8:47 pm

I agree with Dundiggin. Goodwill on a sale is worth zilch when you could have a new patient list to fill up your capacity almost immediately upon opening a new practice with almost a very small advertising expenditure.

Thurston
Thurston
October 31, 2022 8:45 pm

Barrister it’s a resale and they did sell out the development so I’m guessing that’s where the market is at

Rush4life
Rush4life
October 31, 2022 8:23 pm

Just watched an interview with Poloz (former lead of the BoC) and he noted he was working as an economist at the BoC in early 80s when mortgage rates went to 20ish percent and they were watching delinquencies and they doubled – from 0.5% to 1% (really low). The interviewer mentioned today we now have HELOCs but Poloz didn’t think it was an issue – basically said Canadians will do whatever they can to make their mortgage payment. If u wanna watch – https://youtu.be/ST0TGT41Bl8

Barrister
Barrister
October 31, 2022 8:05 pm

Thurston, are you saying that they are going to be 1.75 million and you think that is affordable? To whom?

Umm..really
Umm..really
October 31, 2022 7:51 pm

Agreed. Going variable in this environment seems like you may be signing up for some sleepless nights.

They could possibly view it as interest rates have either peaked or at near peaking in the next 6 months to a year and are hoping to ride the variable rate downward and gain over the backside of the variable term. However, interest rates will eventually moderate, but a rapid decrease will be unlikely since there’s no stomach for QE gain anytime soon.

totoro
totoro
October 31, 2022 7:48 pm

With the new agreement, keep in mind that overhead typically runs 40 to 50% of gross income.

If you have an increase in salary your overhead does not increase. The increase will go directly to the physician’s corporation less corporate taxes. It is a real increase, and a significant one. It is just going to take time to have an impact on the ground, not sure if we will become a magnet for Alberta doctors now?

Umm..really
Umm..really
October 31, 2022 7:46 pm

Coincidentally, many family doctors quit operating their own practices when the federal government declared war on professionals and hammered them on income splitting. Maybe rolling back some of those petty tax rules that came in 2018 would help encourage opening practices again.

Patrick
Patrick
October 31, 2022 5:59 pm

PS still blows my mind that so many buyers were going with variable lately. I have no idea how to wrap my head around that unless those buyers are so well off that they don’t need to care.

Agreed. Going variable in this environment seems like you may be signing up for some sleepless nights.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 31, 2022 5:34 pm

That and the patients are older and take up more time per visit and the older doctors don’t want to work as hard by having to see a lot of patients each day. Our family doctor is nearing retirement and only works three days a week. And he is in his early 50’s. And he’s not that good either. I think he got through med school based on his looks.

Frank
Frank
October 31, 2022 4:46 pm

Then I guess the problem is doctors don’t want to move to Victoria because of the high cost of housing and overhead. They’re up to their eyeballs in debt and opt to practice in a more affordable region. That explains the shortage and there seems to be no solution.

Kristan
Kristan
October 31, 2022 4:22 pm

PS still blows my mind that so many buyers were going with variable lately. I have no idea how to wrap my head around that unless those buyers are so well off that they don’t need to care.

Kristan
Kristan
October 31, 2022 4:13 pm

Oh Patrick, consider me more annoyed with the comment from earlier about whiny millennials than anything else. Let’s just say I don’t take random tweets that seriously (although it passes the smell test that some young doctors aren’t good at managing money). If you’re making hundreds of thousands of dollars a year then you should be able to figure out how to not struggle with mortgage payments.

Thurston
Thurston
October 31, 2022 4:06 pm

Barrister 2500 sq for 1750000 room for a young family that can’t afford a new house in the hood Very nice

Barrister
Barrister
October 31, 2022 3:59 pm

Thurston, great news, how much are they selling the townhouses for? I am hoping they are going to be between four and five hundred to make them somewhat affordable.

Patrick
Patrick
October 31, 2022 3:54 pm

Sure, even some doctors are having difficulties

You’re basing this on the random tweet below where someone said they are “hearing stories that…” ?
Against a backdrop of contrary data like the CMHC mortgage delinquency level, which just hit a new all-time low at 0.11% of BC mortgages being delinquent? https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-data-tables/mortgage-debt/mortgage-delinquency-rate-canada-provinces-cmas/mortgage-delinquency-rate-ca-prov-cmas-2012-q3-2022-q2-en.xlsx?rev=7a728c27-aa53-4a8b-8ae9-03ea4947ab18

There are only 777 mortgages in all of BC that are delinquent. https://www.westerninvestor.com/british-columbia/bc-sees-record-low-mortgages-in-arrears-5529019
About 1/400 people is a doctor.

So, given the high average income of doctors, what’s your best guess as to the number of doctors with delinquent mortgages in all of BC?
a) 0
b) 1-2
c) more than 2
————=————=———-

I’ll go with a) 0

DunDiggin
DunDiggin
October 31, 2022 3:53 pm

As a retired doctor, the reality is that a medical practice is impossible to sell and is basically worthless. The only value is in the hard assets such as lease hold improvements and the medical equipment which is worth a minimal amount.
With the doctor shortage, one only has to open a practice and have a full patient load almost immediately. There are lots of office spaces available and landlords offer loads of incentives to have a stable long term tenant such as a medical practice, so it is not that cost prohibitive to set up a new practice.
With the new agreement, keep in mind that overhead typically runs 40 to 50% of gross income.

caveat emptor
caveat emptor
October 31, 2022 3:49 pm

Most retiring doctors are seeking four times gross income for their practice

For the record this is complete BS. If you know any doctors just ask them this and they will laugh. Maybe a bit of money if there is some good equipment. As for ‘patient records’ that is more of a liability to be managed than an asset.

Thurston
Thurston
October 31, 2022 3:49 pm

1720 Fairfield there’s your missing middle need to do more townhouses like these that fill the affordability gap

Kristan
Kristan
October 31, 2022 3:42 pm

Sure, even some doctors are having difficulties and affordability is the worst since the early 80’s, but let’s not forget that the housing crisis is a thing made-up by “whiny millennials.” Or something. Sheesh.

Patrick
Patrick
October 31, 2022 3:24 pm

This discussion seems offtopic… but I hope it helps the doctor shortage!

“Dr. House”-huntvictoria.ca 🙂

James Soper
James Soper
October 31, 2022 3:20 pm

This discussion seems offtopic… but I hope it helps the doctor shortage!

Doctors might actually be able to afford a mortgage in town now though…

VicREanalyst
VicREanalyst
October 31, 2022 3:15 pm
VicREanalyst
VicREanalyst
October 31, 2022 2:56 pm

A full-time doctor will receive about $385,000 per year under the new model, up from $250,000 currently, according to the province.

I am assuming this is gross, how much would the average doctor net after expenses?

Patrick
Patrick
October 31, 2022 2:52 pm

How do you think that is worth next to nothing?

Because that’s the way it’s been for at least 40 years.

Umm..really
Umm..really
October 31, 2022 2:47 pm

Paying hundreds of thousands or into the millions to take over a leased space with 20 year old furniture and equipment doesn’t make mush sense either. Patrick has it on this one, buying the patient load doesn’t make much sense since a doctor will fill up rather quickly. Anyways, I know a few doctors that moved to Victoria recently with plans to buy or open a practice. After a year, they decided to stick with working urgent care, doing locums and walk in clinics because they got the money without the headache of being small business operators.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 31, 2022 2:47 pm

Patrick, where did you ever get the idea that a medical practice is worth next to nothing?

On Day One – it’s a going concern, fully equipped, staffed, hospital privileges, patient records, office space leased and a full slate of patients. How do you think that is worth next to nothing?

It’s not like opening up a landscaping company where you only need to buy a lawnmower and put an add on Facebook.

Patrick
Patrick
October 31, 2022 2:42 pm

Starting a new practice might cost more in lost time.

We all know people whose doctor has retired or moved away. And they don’t find a replacement because they can’t, even if they giveaway their practice, let alone sell it for 4X gross ($1.2 million). There’s always plenty of medical office space for lease in Victoria.

Frank
Frank
October 31, 2022 2:38 pm

As for doctors snapping their fingers and starting a new practice, it’s not that easy. No one wants to wait a year to find a location, wait for permitting, get the place built, equip it, find qualified staff, etc…. Buying an existing practice, working with the retiring doctor, having an established clientele is worth the extra expense. Starting a new practice might cost more in lost time.

Umm..really
Umm..really
October 31, 2022 2:12 pm

Out of the centre of the universe today…

How Toronto’s housing market is transforming the rest of Canada: There is a “Great Canadian Convergence” taking place, with ripple effects on housing markets across the country. Are we prepared for rapidly evolving housing demands?

From: https://www.macleans.ca/society/how-torontos-housing-market-is-transforming-the-rest-of-canada/

It’s all Toronto’s fault..lol…

Patrick
Patrick
October 31, 2022 2:11 pm

Most retiring doctors are seeking four times gross income for their practice

Where did you read that? Family docs can’t give away their practices. Because a new doc can have a new full office practice in a week. A single post to HHV from the new family doc would do it. Maybe if it comes with a building or a lab. But the practice is worth next-to-nothing,

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 31, 2022 2:05 pm

The cost of buying a medical practice is going to jump as well. Most retiring doctors are seeking four times gross income for their practice. Which is crazy expensive for a service industry.

Patrick
Patrick
October 31, 2022 2:05 pm

Let’s hope that this helps the Family Doc. situation , but we need to be realistic. ‘This new payment model doesn’t replace the existing one, it is an optional, additional payment model for the doctors to choose. As explained in the government news release. https://news.gov.bc.ca/releases/2022HLTH0212-001619

These alternate payment models have been around for 40+ years in provinces like Ontario. For example, a doctor is paid a flat yearly fee for patient care. Or paid by time etc. only a small % of doctors opt-in to this.

Many doctors are happy with the existing fee for service system, and I think most will stick with it. Of course I hope I’m wrong and lots of them opt for this new model.
One thing that will help is being able to bill for time spent. The current system is crazy where a doctor can get the same payment for spending 5 minutes or half an hour with a patient. That led to the “one problem per visit” rule by many doctors.

James Soper
James Soper
October 31, 2022 1:54 pm

A full-time doctor will receive about $385,000 per year under the new model, up from $250,000 currently, according to the province.

Small cost of living adjustment.

caveat emptor
caveat emptor
October 31, 2022 1:13 pm

Sales are stronger than I would have guessed.

if Hawk was still here this is when he would have posted his infamous graph and told us that we were now in the “denial” phase 🙂

Introvert
Introvert
October 31, 2022 12:57 pm

Also,

B.C. announces new payment model for family doctors

https://bc.ctvnews.ca/b-c-announces-new-payment-model-for-family-doctors-1.6131784

A full-time doctor will receive about $385,000 per year under the new model, up from $250,000 currently, according to the province.

A ratification vote date hasn’t been set.

Introvert
Introvert
October 31, 2022 12:47 pm

BCTF reached a tentative agreement with the province. Ratification vote to happen mid-November.

The deal takes teachers from near the lowest paid in Canada into the “top tier.”

Starting teachers will make $6K to $8.5K more per year (addresses recruitment and retention).

Highest paid teachers will make $10K to $13K more per year.

BCTF credits the BCGEU for paving the way for this agreement.

https://bc.ctvnews.ca/tentative-agreement-reached-between-b-c-teachers-and-employer-union-says-1.6132289

Barrister
Barrister
October 31, 2022 12:43 pm

Sales are stronger than I would have guessed.

Rodger
Rodger
October 31, 2022 10:06 am

Counterparties didn’t magically increase the collateral requirements. It is tied to the drop in value of the collateral and the mark-to-market requirements. I wonder what would happen to RE if the lenders follow the mark-to-market principles.

Patrick
Patrick
October 31, 2022 8:46 am

The issue with the UK pension funds is that they had been making derivative bets on future interest rates with the bonds as collateral. This is similar to the losses the Alberta government administered pension funds incurred in early 2020.

A big problem in the UK was the counterparties providing loans to the pension funds suddenly raised collateral requirements. Causing sudden margin calls on profitable and stable positions. This happened in UK, and same thing happens in almost every financial crisis. Including 2008 and 2020.

For example… If you’re an investor that’s 3X leveraged, and your positions haven’t changed in value, you feel safe. Then the broker providing you the 3x leverage loan notifies you that margin requirements are changing to 2X maximum and you’ll need to sell 1X worth of your portfolio immediately. So you put in a bunch of sell orders, and you find that there are no buyers at reasonable prices. But you simply have to sell or the broker will force sell for you. Everyone is forced selling, noone is buying and a crisis is born.

A real world example would be this. Your stock margin account charges you 5% to borrow money.. you see a manulife bond paying 8%. You think, “manulife isn’t going out of business”. So you buy these bonds using 3x leverage, mainly with the borrowed money at 5%. You feel smug and smart, as you believe you have locked in a low-risk 9% profit ((8-5)*3X) Then a financial crisis happens and your broker suddenly says that 2X is now the maximum leverage for these bonds, and you need to sell 1X of them before the end of the day. And there aren’t buyers. So you lose your shirt.

It’s another reason to avoid debt with stock margin accounts, where the broker will increase the margin requirements at the worst time for you

VicREanalyst
VicREanalyst
October 31, 2022 8:44 am

Pensions can also change their contribution rates should they become underfunded. IMO if you have a DB government pension then you can definitely take more risk in other investments

patriotz
patriotz
October 31, 2022 4:29 am

Last month in the UK, bond rates rose from 3.5% to 5.0. This modest event caused many UK pensions to announce they were on the brink of collapse

If a pension fund, or anyone else, holds government bonds paying 3.5% they are going to keep on getting the same interest payments until maturity regardless of future changes in interest rates. Yes the current market value will drop but that makes no difference if you are holding the bonds for income until maturity.

The issue with the UK pension funds is that they had been making derivative bets on future interest rates with the bonds as collateral. This is similar to the losses the Alberta government administered pension funds incurred in early 2020.

Frank
Frank
October 31, 2022 4:19 am

Pensions are valuable and in order to sustain their returns, many of them turn to real estate investments. I wonder why prices are so high?

Marko Juras
October 31, 2022 3:06 am

Also, TSX YTD down 8.31% not factoring in dividends. Dow Jones down 10.18% not factoring in dividends. World hasn’t come to an end, yet. Unless you went all in on Facebook.

TD just paid me today quaterly dividend. I’ll use that to buy more dividend paying shares.

Investing whether it be real estate or stocks is a very long term game in my opinion. I had a tenant at the same rent for 10 yrs in one of my condos and ended up re-renting it last year for a 50% increase and in another 10 the condo will be paid off with another 50% increase in rent.

Marko Juras
October 31, 2022 2:59 am

Most people don’t have a clue about investments.

I do feel like you have to have enough common sense to figure out that no one can predict the real estate and stock market. If you can’t grasp that simple concept tough luck.

You would have to be lacking common sense to think that Kenney or anyone else can predict anything with any certainty. Who called 30 days ago for the Dow Jones to be up 15% this month?

It’s like smoking, eating like crap, and not exercising regularly. If you don’t have that much common sense you statistcally speaking won’t live as long. On the financial end odds are you’ll never be well off financially. It is what it is.

Patrick
Patrick
October 30, 2022 9:42 pm

Isn’t everyone responsible for their own investment decisions.

Most people don’t have a clue about investments. It would be like asking you (or me) to fix a broken refrigerator by yourself. Many of the ones that do understand investments don’t spend money on financial advisors. I’ve got family members that saw financial advisors (typically “the guy at the bank”) , and got stuck in a high MER lousy etf run by the same bank. These clients don’t have a clue what they’ve got, and what they could do to change it.

So I don’t agree with your assertion that everyone should be responsible for their own investment decisions.

totoro
totoro
October 30, 2022 9:00 pm

A pension is definitely valuable.

alexandracdn
alexandracdn
October 30, 2022 8:46 pm

If your average pay over 5yrs was $85,000 a year, and you worked and contributed for 25 years, your yearly pension would be $42,500 per year. If you had the same average pay and you worked and contributed for the max of 35 years, your pension would be $59,500 per year. $100K average, worked and contributed for 30yrs, pension would be $60K per year.

VicREanalyst
VicREanalyst
October 30, 2022 6:10 pm

I always feel sad for government workers who stay 20, 30, 40 years for that extra few hundred bucks a month pension for every ten years of their lives they sink into something they don’t find meaningful.

couple hundred? aren’t DB pensions like 60%-70% of your top 5 years average pay? so for some with a top 5 year average of say 100k a year that’s 60k to 70k a year and likely indexed to inflation of worry free guaranteed money in the bank account. There is a reason why almost all for profit private sectors don’t give out these pensions to their employees.

Market2022
Market2022
October 30, 2022 4:27 pm

Yes. We are in the self-employed category. I think you’ll find a lot of people who own a rental don’t have a pension. You have to do something.

Pensions offer stability with nearly no flexibility relative to real estate and stocks. A combination might be ideal. I always feel sad for government workers who stay 20, 30, 40 years for that extra few hundred bucks a month pension for every ten years of their lives they sink into something they don’t find meaningful. When you crunch the numbers, the public pensions are not as valuable as commonly believed.

If you have ten or fifteen years in, plus CPP and OAS to look forward to, get out while you can and do something more meaningful if you can, I would say.

Market2022
Market2022
October 30, 2022 4:23 pm

I am not sure this back and forth about wrong advice about when to get into real estate or stocks is worthwhile.

Isn’t everyone responsible for their own investment decisions. You should be able to “advise” whatever you want with the full caveat it is just an opinion and there are always others. If they are not highly competent, give them truthful options and let them choose, right?

Marko Juras
October 30, 2022 12:14 pm

but it also covers title defects. Defects include things like encroachments.

+1, primary reason for title insurance as far as I know.

Kenny g
Kenny g
October 30, 2022 11:37 am

Patrick, let it go man. I don’t charge fees and I don’t give investment advice as I’m not licensed. Rather I give tax and planning advice.

totoro
totoro
October 30, 2022 11:07 am

Title insurance may provide coverage for fraud which is rarely used, but it also covers title defects. Defects include things like encroachments. A mortgage lender is not going to lend to you unless you have title insurance or a survey certificate. Title insurance is cheaper than a survey.

Peter
Peter
October 30, 2022 11:04 am

I’m guessing they’re forced to by the bank? I really doubt a lot of people do it if they don’t have a mortgage, though paradoxically those folks would seem to benefit from it more since the mortgaged property is less likely to be subject of a fraud.

However, Maggie’s point about this being really far down the list of things to worry about is well taken. That said, I actually knew someone who was struck TWICE by lightning, once with his dog….(I think the dog was ok – less sure about this dude)

Patrick
Patrick
October 30, 2022 9:53 am

As mentioned I don’t provide investment advice or work on commission but I do advise clients on their finances

Since you “advise clients on their finances”, for a fee, including in some cases advising them to borrow money to invest…. I hope you told them that you saw that the “market looked headed for obvious trouble” and that you were dumping your own stocks (“I may have sold off a large part of my portfolio but that was only when the market looked headed for obvious trouble”) . These are your clients who you give financial advice to. Don’t they deserve a heads up like that?

Anyway, we’ve more than covered this topic. I’m happy to leave it there.

But let’s get back to the advice you gave people all the way to the top of the housing market to get in now or regret it.

Yes, I’m still a believer in families buying a Victoria SFH, and not timing the market. So that means buying when you’re ready, including now . I’ll post later about that.

westcoastie
October 30, 2022 9:12 am

Can anyone recommend a title insurance provider?

Maggie
Maggie
October 30, 2022 2:03 am

What are the odds of being struck by lighting?

According to the CDC, less than one in a million in a given year. But one guy was hit seven times during his entire life, which is coincidentally the number of times title/mortgage fraud has occurred in B.C. in the last twenty years. This proves it’s safer to leave your mortgage documents on a chair at Starbucks than to walk around with a television antenna strapped to your head. I can provide the math if anyone’s interested, but it involves differential equations and patchouli incense.

https://www.cdc.gov/disasters/lightning/victimdata.html

Marko Juras
October 30, 2022 12:29 am

Title fraud, while a subject matter in many countries not sure it is worth while talking about in BC. What are the odds of being struck by lighting?

“The LTSA emphasizes that such cases are extremely rare because strong protections are in place in this province.

The LTSA reports that over the past 20 years, the land title system processed more than 16 million transactions. During this time, two claimants were paid from the assurance funds because of title fraud, four because of mortgage fraud and one because of a combination title and mortgage fraud.”

Warren Blacking
Warren Blacking
October 29, 2022 11:59 pm

Interesting to see the “value-of-my-defined-benefit-pension” chimera raise it’s head here – the site usually has a good set of financial clear thinkers.

Your defined benefit pension is a monthly nudge for groceries and rent. It evaporates with your death. It dissipates with divorce. It by no means has any identifiable “worth”.

Should you wish to test the concept, walk into the Porsche dealer and tell them you wish to purchase a Taycan. When they present the bill, just tell them you will be using the “value of my defined benefit pension”.

Kenny g
Kenny g
October 29, 2022 9:36 pm

Patrick, sorry to disappoint you, I am not a fee for service advisor. As mentioned I don’t provide investment advice or work on commission but I do advise clients on their finances.

But let’s get back to the advice you gave people all the way to the top of the housing market to get in now or regret it.

totoro
totoro
October 29, 2022 6:07 pm

Don’t forget though Totoro, Marko and many other self-employed individuals and couples, must take extra steps

Yes. We are in the self-employed category. I think you’ll find a lot of people who own a rental don’t have a pension. You have to do something.

Pensions are great, but I don’t regret being an entrepreneur. I worked in government for a short time and I can see the benefits, but it just wasn’t a match for me.

And you are right, you can’t pass a pension on to your heirs.

totoro
totoro
October 29, 2022 5:58 pm

The free monthly credit report will notify you of all new loan applications, including loans against your home and even things like phone plans. You can also opt in to immediate real time notification for any credit inquiries in your name on Credit Karma for free. And most people do get title insurance when they purchase – it is not expensive and protects against buying a property that has title deficiencies.

Someone trying to take a loan out in your name is pretending to be you. This type of crime is predicated on identity theft. You have remedies to reverse this if happens and you are a victim of a crime.

Land title is pretty secure. It is the most secure form of ownership/investment I can think of .

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 29, 2022 5:39 pm

Fraudsters are looking for properties without charges against the title. Anyone can search a Title on any property to make sure it is clear of encumbrances.

Peter
Peter
October 29, 2022 4:17 pm

If you put a lien against your own home then if a fraudster attempts to take a mortgage on your property you will be notified by the lender.

That’s an interesting idea & maybe cheaper than getting title insurance (plus a fraudster presumably is not likely to take a run at a house that has a lien on it to begin with). We have a jointly owned house. Say I lend $10 to my wife and register a mortgage against the house, which I can probably do myself, is that just too hokey – does anyone have experience with this?

Probably too cute. And probably not worth worrying about anyways. But hey, I’m retired, and everyone needs a hobby.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 29, 2022 4:07 pm

Mortgages were obtained on properties after the fraudster went to some people for a loan based on the equity in the property. The lenders advanced the money after doing a titles search and finding no liens on the properties.

If you put a lien against your own home then if a fraudster attempts to take a mortgage on your property you will be notified by the lender. The cops can be waiting for the fraudster when they go back to the lender to finalize the mortgage.

Patrick
Patrick
October 29, 2022 2:25 pm

I don’t manage money for other people.

Right, but you did tell us that you provide financial advice to many clients.Presumably for a fee, which makes you a fee-based financial adviser. For example in this post… https://househuntvictoria.ca/2020/02/24/nimbyism-is-incompatible-with-victorias-environmentalism-and-other-progressive-ideas/#comment-66315

My only comment is that, since you dumped your stocks, you should inform your clients. At least when you see them next. Especially if you told them all those things you told us about long term buy and hold, borrow to invest, don’t time the market etc.

Patrick
Patrick
October 29, 2022 1:35 pm

Two of the agencies offering this service for free are Borrowell and Creditkarma.

Thanks, tips like this are one of many good things about HHV.

Maggie
Maggie
October 29, 2022 1:33 pm

If you are the registered owner of a property and someone steals your identity and fraudulently takes out a mortgage you don’t lose title to the property and there are remedies to reverse this.

Yeah, but I’ll bet it’s a pain in the ass. It seems like the LTSA should provide title monitoring free of charge, but there’s a fee, and it expires every six months. I don’t know how often title fraud happens in B.C., but it seems like the cost of automatically notifying title holders when there’s activity would be lower than the cost of cleaning up the mess after fraud occurs.

I get my credit report via email monthly and check it. It gives me my credit rating and would show any credit inquiries and reasons for any changes to my credit score. Two of the agencies offering this service for free are Borrowell and Creditkarma.

Thanks for the tip.

totoro
totoro
October 29, 2022 1:04 pm

If you are the registered owner of a property and someone steals your identity and fraudulently takes out a mortgage you don’t lose title to the property and there are remedies to reverse this. I get my credit report via email monthly and check it. It gives me my credit rating and would show any credit inquiries and reasons for any changes to my credit score. Two of the agencies offering this service for free are Borrowell and Creditkarma.

VicREanalyst
VicREanalyst
October 29, 2022 12:19 pm

Amazing how every single person on the internet times the market perfectly.

Applies to mortgage rates too!

totoro
totoro
October 29, 2022 10:59 am

I realize RE title can also be attacked

How exactly?

caveat emptor
caveat emptor
October 29, 2022 10:46 am

Since you’ve dumped your own stocks

Amazing how every single person on the internet times the market perfectly.

Kenny g
Kenny g
October 29, 2022 10:15 am

Patrick, I don’t manage money for other people.

Peter
Peter
October 29, 2022 10:00 am

I am leaning more and more towards dividend paying income as I get older as there is something pretty cool about getting large deposits in your account every three months doing absolutely nothing and you can be anywhere in the world knowing no one is going to call you about a flood in the unit above them.

This is significantly what we do. And if dividends were to take a haircut during a prolongued recession, we’d still be ok, so not complaining. But the one thing that sometimes makes me a bit uneasy about the approach is that everything is digital, vs. the bricks & mortar of owing real estate. Sometimes, even at one of the big banks, you log into your account and find it’s magically just not there – then sometimes you get a note saying down due to maintenance, but not always. So that can be quite disconcerting. I spread the accounts among the banks just for the remote possibility one is ever down long enough to cause an issue.

I realize RE title can also be attacked, so maybe this isn’t really a differentiating factor if being objective, though…

Patrick
Patrick
October 29, 2022 8:19 am

I advocated for people to borrow to invest and still do only when they have secure jobs, a long time horizon and buying blue chip stocks ( not facebook). When I said I couldn’t sleep at night not borrowing I meant it and still do, in fact I locked in a mortgage at 1.50% and invested the money. (I’m sure you can look at my posts from last year). Now I may have sold off a large part of my portfolio but that was only when the market looked headed for obvious trouble but someone buying and holding may still only be down single digit this year. Now the stock market will come back much faster then the housing market.

Since you’ve dumped your own stocks, I hope you also told your clients about that, and that you believed that the “ market looked headed for obvious trouble ”. Especially anyone that borrowed against their house to invest in stocks. That might not be good for commissions, but it’s the right thing to do.

Frank
Frank
October 29, 2022 4:31 am

Helping my old friends with the sale of their family home of 57 years. Their father is 95 and has been retired since he was 53, 42 years of pension. He was a chef (head cook) at a veterans hospital, I assume he has a government pension. He gets $3500 a month, which would require $1,000,000 sitting in investments to generate today (an approximation).Talk about money growing on trees. A million dollars was real money in 1980.
There’s no pension in the private sector that could have maintained that level that long. I honestly believe that the only reason people work for the government is for the pension, sad. Might also explain why they aren’t that effective at accomplishing much, they’re just putting in time.

Kenny g
Kenny g
October 29, 2022 3:45 am

Patrick, it seems to me that you were one of the biggest cheerleaders for buyers to step up and pay whatever the price is for a house and in the long run it will be ok, I’m hoping buyers didn’t take your advice in the last year and over purchase.

I advocated for people to borrow to invest and still do only when they have secure jobs, a long time horizon and buying blue chip stocks ( not facebook). When I said I couldn’t sleep at night not borrowing I meant it and still do, in fact I locked in a mortgage at 1.50% and invested the money. (I’m sure you can look at my posts from last year). Now I may have sold off a large part of my portfolio but that was only when the market looked headed for obvious trouble but someone buying and holding may still only be down single digit this year. Now the stock market will come back much faster then the housing market.

Umm..really
Umm..really
October 28, 2022 10:32 pm

Canada’s housing bubble has burst. The MLS house price index is now down nine per cent from last February’s peak en route to a 30 per cent or so decline, which we view as consistent with deteriorating affordability and the uber-aggressive tightening of monetary policy by the Bank of Canada. We estimate the negative wealth effect associated with such a price slump will pull down gross domestic (GDP) growth by about 2.5 percentage points. Add to this the deleveraging effect of higher interest rates on consumption and investment, and the hit to trade from the expected downturn in the United States and global economy, and it’s not difficult to see why Canada’s upcoming recession could be deeper than what Bay Street folks are expecting.

From: https://financialpost.com/news/economy/home-price-plunge-recession-david-rosenberg

There’s that “deleveraging” word….

Introvert
Introvert
October 28, 2022 8:58 pm

But are pensions sustainable now?

https://www.bcfsa.ca/media/3016/download

Patrick
Patrick
October 28, 2022 8:09 pm

Who knows if pensions will be sustainable in 30+ years.

Good point. But are pensions sustainable now?

We had a recent glimpse into how far governments will go to prop up pensions. Last month in the UK, bond rates rose from 3.5% to 5.0. This modest event caused many UK pensions to announce they were on the brink of collapse. So the government immediately printed money to buy bonds from the pensions at higher than market prices. That’s what passes for “sustainable” these days. https://www.theguardian.com/business/2022/oct/06/bank-of-england-confirms-pension-funds-almost-collapsed-amid-market-meltdown

Introvert
Introvert
October 28, 2022 4:21 pm

Who knows if pensions will be sustainable in 30+ years.

Who knows if the stock market will be sustainable in 30+ years.

Dad
Dad
October 28, 2022 3:43 pm

paints a clear (& surprising) picture!

It is the arrears rate as of the end of July. I don’t feel like it’s that surprising. If job losses start piling up during the anticipated recession, then I think you will see the arrears rate tick up.

Marko Juras
October 28, 2022 3:40 pm

When I am comparing real estate vs equities I am doing investment property vs equities.

When you get into prinicpal residence there is no comparison imo. The tax exemption is such a massive factor over the long run imo principal residence > equities any day.

Marko Juras
October 28, 2022 3:36 pm

Marko had a defined benefit pension. He chose not to work there.

I had it paid out when I left VIHA. Who knows if pensions will be sustainable in 30+ years.

Charlotte
Charlotte
October 28, 2022 3:35 pm

thank you for the mortgage arrear graphs Leo, paints a clear (& surprising) picture!

James Soper
James Soper
October 28, 2022 3:16 pm

Don’t forget though Totoro, Marko and many other self-employed individuals and couples, must take extra steps (risks), financially during their working life if they are going to retire comfortably compared to others who will be the fortunate recipients of a defined pension.

Marko had a defined benefit pension. He chose not to work there.

up-and-coming
up-and-coming
October 28, 2022 3:07 pm

That’s like saying real estate is a bad investment because someone YOLOd into a house at $400k over ask in February with intention to flip. Can we assume a basic level of competence on the part of equity investors?

The bar for entering the stock market is so low compared to entering the real estate market the two really shouldn’t be compared against one another, but I do enjoy how those “in the stock market” love to dispense their free advice on here even though they somehow still haven’t cleared that RE bar, it’s always good for a laugh.

alexandracdn
alexandracdn
October 28, 2022 1:54 pm

Don’t forget though Totoro, Marko and many other self-employed individuals and couples, must take extra steps (risks), financially during their working life if they are going to retire comfortably compared to others who will be the fortunate recipients of a defined pension.

Net worth is your assets minus your debts. Pensions are often overlooked as part of net worth. A defined pension of say $3K per month, is worth probably around $540K. This is a huge asset. So Marko and others in a similar boat, will have to save over 1/2 Million dollars in order to reap the same results while they are alive. Two pensions in the family even makes it better.

This is a simplistic view as there are so many scenarios. One being, if you have $1M saved, the money will eventually go to your heirs, your pension dies with you or your spouse.

totoro
totoro
October 28, 2022 12:52 pm

I am leaning more and more towards dividend paying income as I get older as there is something pretty cool about getting large deposits in your account every three months doing absolutely nothing and you can be anywhere in the world knowing no one is going to call you about a flood in the unit above them. That being said the vast majority of my net worth has been real estate appreciation to date.

Yep. I’d say unless you are a big time investor with a very large portfolio justifying min. five employees and bringing your rental income into the active income category for CRA, you are going to be on Marko’s path as you age. The larger the net worth the less you need to worry about accumulating more for retirement – which is what motivates the majority of rental property owners imo.

Bluesman
Bluesman
October 28, 2022 12:27 pm

I’m sure there are plenty of folks who did upgrades in the past few years and feel they are “looking pretty good right now” and happy they did them. Lines of credit are great if you have the means to use and service them responsibly.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 28, 2022 12:13 pm

Granted that there were fewer suites in houses in the 1980’s but investors were buying properties to rent. That’s been true for a hundred years. Those that relied on the extra income to make the mortgage were under water and it didn’t take many of them to be put into a position of having to sell by choice or by their lender.

Real Estate prices are set by those looking to buy and those willing to sell. That’s a small percentage of the total stock of housing. So it doesn’t take many owners to go into default and have to put the home on the market. This is the false security that people put in housing. They see a lot of homes and think this could never happen here. It doesn’t matter how big a city is or is not. It only matters on how many are buying and selling. 97% of home owners have absolutely no effect on home prices. And in a crash, there are more homes under foreclosure for sale and if there are enough of them then they set the market prices.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 28, 2022 11:57 am

I want the last check I write before I die to bounce.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 28, 2022 11:55 am

No crash is exactly like another. The one in 2008 was due to credit. Maybe this one will be when Russia nukes the naval base in Esquimalt.

Introvert
Introvert
October 28, 2022 11:52 am

Time alive is finite and you can’t bring $ to the grave so its a fine balance.

You can’t bring money to the grave, but you can pass some on to those you care about; and there’s less of it to pass on when you’re financing at 6.5% the wooden box holding your bowls and plates.

LLI
LLI
October 28, 2022 11:51 am

Sold price of 1873 Francisco Terr? Thanks in advance!

VicREanalyst
VicREanalyst
October 28, 2022 11:44 am

Just a reminder, the most I’ve paid for a property is $330,000. I have easier ways of making money that involves almost zero risk. I’ll leave real estate and stocks to the greater fools

LMAO, imagination is very powerful

VicREanalyst
VicREanalyst
October 28, 2022 11:41 am

Those countertops and cupboards better bring you so much joy — because every time you look at your financials you’re gonna weep.

Time alive is finite and you can’t bring $ to the grave so its a fine balance.

Marko Juras
October 28, 2022 11:41 am

Well that’s the point. I don’t see it in the numbers for that condo.

Not at the moment, no. The numbers don’t work for any condo unless you want to be cash flow negative until rents rise or interest rates drop.

Introvert
Introvert
October 28, 2022 11:14 am

My pay-as-I-go financial philosophy is looking pretty good right now. I know some people who, in the last few years, put kitchen renos and other fairly big non-necessary stuff entirely on their line of credit.

Those countertops and cupboards better bring you so much joy — because every time you look at your financials you’re gonna weep.

patriotz
patriotz
October 28, 2022 11:09 am

. If you buy smart the tenant continues to cover your costs.

Well that’s the point. I don’t see it in the numbers for that condo.

Patrick
Patrick
October 28, 2022 11:06 am

That’s like saying real estate is a bad investment because someone YOLOd into a house at $400k over ask in February with intention to flip.

There are big differences between equity investments and real estate. Specifically, the current discussion is about the differences in risk associated with leveraged positions in real estate vs equities. The point being that the risks are much different and much higher in equity investing.

For example, assuming that you own a house with a mortgage , that means you have a leveraged investment in RE. But you likely don’t have a similarly leveraged investment in stocks. And that position makes perfect sense to me. And likely to you too

alexandracdn
alexandracdn
October 28, 2022 10:58 am

In the early 1980’s very, very few people had suites in their SFD’s. I lived in Gordon Head (Mount Doug area), and I don’t know anyone who had a suite in those 70’s built homes. Most of those homes had around 1150 sq. feet on the main level. The bottom level usually had a finished entry way and the rest was not finished. Most owners added a rec room adjacent to the foyer within a few years of moving in. If you purchased in 1970 your 2nd term was due in 1980; purchased in 1971, 2nd term was due in 1981 and so on. Loads lost their homes if they purchased in 1981. Many of them lost their jobs as well. Also, in many cases, when the couples were over 35yrs old, the wife did not work outside the home.

Frank
Frank
October 28, 2022 10:54 am

Bottom line is the bigger the risk, the bigger the return. Real estate investing can go south in no time. People see the massive gains in the last 10 years and think that’s the norm. It’s a long term investment that can stagnate for years. I still think given the lack of supply and unlimited amount of people wanting to live here, the market will only increase, especially rental demand. That puts a floor on the price of property, which is in short supply. If you hear the government start talking about greatly reducing immigration, real estate could suffer, until then, it can only go up.

caveat emptor
caveat emptor
October 28, 2022 10:51 am

The big crash in the 1980’s

A real estate investor who thinks every market drop is going to be the 1980’s will probably do about as well as a stock market investor that thinks every downturn is going to be the 1930’s replay.

Patrick
Patrick
October 28, 2022 10:50 am

True, but no margin call.

+1

Exactly. Stocks can get you 3.3X leverage (30% margin). But that means if the stock falls ~30% you’d be wiped out. And that volatility is a common occurrence, and happened to most stocks in 2020, 2008, 2001 etc.

As Marko points out, RE doesn’t have a “margin call” system where your stake is valued (“mark-to-market”) in real time.
For example, Facebook is down 70% this year. A leveraged position there would have been wiped out long ago.

This all seems obvious and common sense . Yet we had a HHVer here (“a “professional”) tell us that he couldn’t sleep at night unless he was borrowing (leveraged) to buy stocks.
Hopefully no one here followed that idea.

Marko Juras
October 28, 2022 10:38 am

And loses.

True, but no margin call. If you buy smart the tenant continues to cover your costs. I guess there is always the risk of vacancy but I am willing to take that risk in Victoria.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 28, 2022 10:30 am

The big crash in the 1980’s has usually been identified with really high interest rates and rising unemployment. But it is deeper than that. I’ve spoken with some that went through the decline and they only had problems making mortgage payments when their suites went vacant. They were caught between a rock and a hard place. If they rented the suite for less then they still couldn’t make their mortgage payment. So they left it vacant for a couple of months to find a renter that was willing to pay enough rent to cover the mortgage. That just didn’t happen and their mortgage went into default.

The problem isn’t falling prices as much as it is the vacancy rate. That effected everyone at the same time. The interest rate only had an effect at renewal time.

James Soper
James Soper
October 28, 2022 10:29 am

While I’ve done well lifetime in the equities the leverage in real estate allows for much bigger absolute gains.

And loses.

Marko Juras
October 28, 2022 10:12 am

What would it rent for? Right now I can get a dividend yield on Telus of 4.8% which is equivalent to net rental yield of 6.2%. And I’m never going to get a special assessment.

I own 3000 shares of Telus, I know what the dividend is 🙂 While I’ve done well lifetime in the equities the leverage in real estate allows for much bigger absolute gains. I am not going to pile into equities on margin; however, I have no issues 20-25% down on an investment condo given the strength of our rental market locally.

If you replace the flooring and throw in an Ikea kitchen I think that fetches $2,600-$2,800 a month? At the moment it isn’t ideal whatsoever but rents will only go up over time and I can’t imagine having a vacancy on Beach Drive. Special assessment risk, yup, needs due diligence.

I am leaning more and more towards dividend paying income as I get older as there is something pretty cool about getting large deposits in your account every three months doing absolutely nothing and you can be anywhere in the world knowing no one is going to call you about a flood in the unit above them. That being said the vast majority of my networth has been real estate appreciation to date.

I posted all the numbers on one of my Vic West condos a few months ago. Bought for under 200k, now over 450k, mortgage now below 80k, cash positive from day one, rent has increased substantially with each new tenants. This was all initially on less than 50k down.

Thurston
Thurston
October 28, 2022 9:46 am

And there goes all your demand when money flows back into other investments without the headache of renting Soon we will have too much supply

patriotz
patriotz
October 28, 2022 9:28 am

For example, condo on Beach Drive listed right now for $529,900

What would it rent for? Right now I can get a dividend yield on Telus of 4.8% which is equivalent to net rental yield of 6.2%. And I’m never going to get a special assessment.

Marko Juras
October 28, 2022 9:00 am

The ultimate test of your faith in government following through: how many are you buying?

and what, leave them vacant hoping the government follows through?

Hmmmm I see your logic re prices equalizing somewhere in the middle. I have to give that some more thought.

Marko Juras
October 28, 2022 8:21 am

But do the prices of those make sense as investments?

Right now they do at the suppressed prices secondary to rental restrictions. For example, condo on Beach Drive listed right now for $529,900 that an investor would likely pick up if it wasn’t for no rentals.

Or this large 2 bed 2 bath condo in Cook Street Village -> https://www.realtor.ca/real-estate/25014908/201-1121-oscar-st-victoria-fairfield-west

Remove the 19+ and no rental restrictions and that is an 775k condo imo.

Introvert
Introvert
October 28, 2022 7:36 am

Tight rental market could get tighter as rising costs discourage new building construction

https://www.timescolonist.com/business/tight-rental-market-could-get-tighter-as-rising-costs-discourage-new-building-construction-6020496

patriotz
patriotz
October 28, 2022 5:38 am

Back to 95

RE prices in Vancouver fell by about 15% from 1995 to 2000.

Frank
Frank
October 28, 2022 5:30 am

Just a reminder, the most I’ve paid for a property is $330,000. I have easier ways of making money that involves almost zero risk. I’ll leave real estate and stocks to the greater fools.

Frank
Frank
October 28, 2022 4:05 am

Who’s investing in real estate with 5% down? I’ve never had anyone ask to rent a stock.

VicREanalyst
VicREanalyst
October 27, 2022 11:06 pm

That’s why you buy real estate, it rarely collapses to that extent.

You are correct, it can takes as little as a 5% decrease to potentially wipe out all your equity in realestate if your timing is poor. Sometimes that can happen before you even legally own the asset. A perfect example would be if you carried through with those above ask bids you were talking about in May.

Patrick
Patrick
October 27, 2022 7:45 pm

What were the causes of net outmigration in the past (if that’s even knowable)?

One was 1981-86, when BC had multiple recessions, much worse than ROC. People lost their jobs, so they moved away from BC to Ontario and Alberta. And affordability improved dramatically, from worst ever to close to best ever.

Here’s a chart showing “Victoria SFH Affordability” on the top, and “net Migration to/from BC” on the bottom. The years match up, so you can just notice that the peaks (circled in red)of bad Victoria affordability match peaks of BC in-migration. And the valleys (circled in yellow) match out-migration trend or falling in-migration numbers.

You can visually see a high co-relation between Victoria SFH un-affordability and BC in-migration on the chart

E6E314A2-A375-4F16-B124-C4BCE5B16527.jpeg
Introvert
Introvert
October 27, 2022 7:25 pm

What were the causes of net outmigration in the past (if that’s even knowable)?

Patrick
Patrick
October 27, 2022 6:54 pm

I think you’re going to be very disappointed at how little affordability improves over the next 10-20 years, if it even improves at all.
Possibly. But I’m certain it won’t if we don’t change the system

All those years of documenting the “cycles” of affordability and now you’re certain that they won’t return without a change in the system? A recession with migration out of BC (to ROC) has resulted in improved affordability in the past – and may again.
Every improvement in Victoria SFH affordability (since 1970’s) has come during periods of falling or negative migration to BC. And every trend to out migration from BC has seen improving SFH affordability in Victoria. .

If past is prologue, I’d expect to see affordability improve if/when we see this trend to outmigration again. Without “changing the system”.

Mt. Tolmie Foothills
Mt. Tolmie Foothills
October 27, 2022 6:07 pm

Leo, if you step back and view the situation objectively, you’ll see that the forces making housing unaffordable are essentially unstoppable.

Encourage your kids to move to where their prospects are better.

Mt. Tolmie Foothills
Mt. Tolmie Foothills
October 27, 2022 5:31 pm

I want my kids to be able to afford a home and I now understand how local government regulates land use.

Are you opposed to the urban containment boundary? It is perhaps the biggest factor making houses unaffordable.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 27, 2022 4:50 pm

Only if you’re Catholic.

patriotz
patriotz
October 27, 2022 4:45 pm

That does not mean I’m calling Christendom irreputable?

Great neologism. Does that mean both disreputable and irredeemable?

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 27, 2022 4:30 pm

Marko you are too sensitive. If you pause and go back and read through my comment I never said agents or developers were not reputable. I’m talking about the difference between a claim and evidence.

For example the Bible claims Jesus walked on water, but there is no evidence that supports it. That does not mean I’m calling Christendom irreputable?

patriotz
patriotz
October 27, 2022 4:15 pm

Building more just won’t make them cheaper

That’s the only thing on the supply side that will make them cheaper. If you keep building the same amount, bringing costs down will not reduce the sale price, because you will have the same demand meeting the same quantity supplied. It will just mean bigger returns to the developers or land owners.

Marko Juras
October 27, 2022 2:48 pm

I find that past evidence is more assuring than claims made by developers and agents on new construction.

Most developers in Victoria are very reputable. You think Chard is going to make their 11th project in Victoria substantially worse than 1 through 10? You think Bosa’s towers at Dockside are going to be a crap product? I’ve represented 100s of pre-sale buyers in Victoria and there haven’t been many disappointments at delivery. This is assuming you do some research (don’t buy on traditional floors i.e. bulkheads, etc.)

The claims aren’t the problem. The problem is in the last 10 years the pendulum has completely swung. Pre-sales use to sell below tangible product (1 to 3 year old completed condos) and now they sell for more than tangible product. Assignments use to be no problem and now they are very problematic (difficult to execute). You use to be able to find developments taking 10% deposits now almost all of them are 20% down deposit.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 27, 2022 2:42 pm

I am glad to see that there are more activite listings of non new condominiums built after after 2016 in the core. Some people will pay a premium for a condo that no one has lived in before, but if the condo is less than five years old then you’re buying a property and into a building with a past sale’s history. I find that past evidence is more assuring than claims made by developers and agents on new construction.

Frank
Frank
October 27, 2022 2:00 pm

Facebook lost 24% today, in one day. This time last year it was $378, today, $97. That’s why you buy real estate, it rarely collapses to that extent. The stock market is the ultimate greater fool market, for every stock that turned into a success, 1000’s have failed.

Introvert
Introvert
October 27, 2022 12:30 pm

I want my kids to be able to afford a home and I now understand how local government regulates land use.

I think you’re going to be very disappointed at how little affordability improves over the next 10-20 years, if it even improves at all.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 27, 2022 11:53 am

Remove the rent and age restrictions and that creates an opportunity for groups of investors. Most of these age restricted condos are older and rest on large lots in premium locations. And the units are BIG. Back when they were built a two-bedroom was probably 1,100 square feet. Today it’s now around 750 square feet. In the end what you’ll find is that the strata council meetings will be investor driven.

And I do believe that some of these older condo complexes should be torn down and replaced with concrete hi-rises. But it’s hard to do that when 30 or 50 individuals own and occupy the complex. It’s like herding cats. But demolishing a 30 unit complex that’s an opportunity to build a 300 unit complex if not two towers on the big lots for 600 units.

But there goes your missing middle AGAIN. Funny that when ever something gets built the missing middle properties get fewer and affordability never improves.

James Soper
James Soper
October 27, 2022 10:53 am

I’d actually be curious to see historical data on instances where inflation has been notably above target, and the time it has taken for monetary policy to bring it back to that target.

It’s not very quick.

https://twitter.com/LHSummers/status/1585607005707931648

Caveat Emptor
Caveat Emptor
October 27, 2022 10:39 am

whiny millennials

Whichever party has a better plan for dealing with the “entitled boomer” crisis gets my vote next time.

Marko Juras
October 27, 2022 10:16 am

Eliminate rental restrictions in stratas – This could have a larger effect on the condo market.

This could be very interesting in Victoria as some of the most desirable areas have a large percentage of rental restricted condos such as Oak Bay and Fairfield. I would imagine some of the current rental restricted condos on Beach Drive, Cook Street Village, etc. are going to become very interesting to investors; therefore, increasing prices which isn’t beneficial for those trying to buy their principal residence.

Thurston
Thurston
October 27, 2022 10:10 am

Leo imo land use is one of many reasons for unaffordable homes Building more just won’t make them cheaper There is a lot of fixed costs that won’t be going down but will keep going up

Introvert
Introvert
October 27, 2022 10:02 am

I want my kids to be able to afford a home and I now understand how local government regulates land use.

comment image

deryk houston
deryk houston
October 27, 2022 9:12 am

“Can anyone please recommend top 3 -5 client centric & trustworthy mortgage brokers in Victoria ?”
Our family has dealt with Denise Webster. (Dominion Lending in Up Town)
She has been terrific. (No bullshit). Very easy to talk to and is there for you if you have any questions …even long after a deal has been made.

up-and-coming
up-and-coming
October 27, 2022 8:19 am

I don’t want personality I want action

Fair enough, just don’t get too upset when things like the healthcare, which has always been a government function, takes precedent over “affordable housing”. Families across the province not having a doctor and ERs closing due to staffing shortages seems like a bigger crisis than whiny millennials that think home ownership is too expensive, but I guess we’ll see what the house plant thinks will get him more votes.

Frank
Frank
October 27, 2022 5:20 am

My friend is a retired mortgage broker, in the last two years both of his children bought property, one in Edmonton, the other in Toronto. They both took out a fixed mortgage, I know one was for 5 years. That’s what he steered them towards. He also contributed a substantial amount to their down payments, he didn’t specify how much but mentioned it was “a lot more than $30,000”.

patriotz
patriotz
October 27, 2022 4:45 am

I wonder if banks were incentivizing them to recommend variable mortgages to their clients, knowing that rates were inevitably going to rise.

Aren’t mortgage brokers just paid a one shot commission at the time of lending? So future rates would have no effect on their compensation.

I can’t believe that recent first time buyers went variable when 5 year fixed rates were at historically low levels. Can’t help but think they were given poor advice. Sure is working in the bank’s favor now.

A lot of people will choose a lower payment now over paying more to guarantee rates long term. I don’t think you need to make it more complicated than that. As well, the variable rate mortgage isn’t really a win for the banks, because they are now paying a lot more on the deposits and shot term debt they are using to fund the variable.

Marko Juras
October 27, 2022 12:30 am

The higher interest rate puts a pin in the balloon for condominium investors wanting a new (er) building.

While demand for newer investment condos has dropped off the inventory hasn’t climbed a ton either. Issue is barely any vacancy, rents are through the roof, and most investors will opt to hold versus selling. If the rental market was soft it would be a completely different story. I also don’t think we will see a rental market collapse. All the unions will be getting 3-4% raises, we aren’t building nearly enough, the sun will come out again in April and the world will continue.

There isn’t a ton of pre-sales out there right now but the ones that are selling the prices are quite high. Just today there were a few condo pre-sales that when you factor in GST they are 10 to 15% above what you can buy comparable tangible product (a comparable 1 to 3 year old condo).

Maybe those investor buyers are thinking market recovers within the 2 to 3 year build out?

Marko Juras
October 27, 2022 12:19 am

Can anyone please recommend top 3 -5 client centric & trustworthy mortgage brokers in Victoria ?

Mike Grace

Roger
Roger
October 26, 2022 9:43 pm

Can anyone please recommend top 3 -5 client centric & trustworthy mortgage brokers in Victoria ? and what should be mortgage fees in % for a 750 K mortgage at variable or 2 Yrs fixed rate ? Thx.

Introvert
Introvert
October 26, 2022 9:31 pm

I don’t want personality I want action

Leo, honest question: what caused you to go from a neutral RE market observer/analyzer to the passionate advocate you are now? What flipped the switch?

Vic&Van
Vic&Van
October 26, 2022 8:39 pm

Please don’t insult houseplants. Eby has been housing minister and basically second in command of a party that has been in power for what, 6 years? He was a ruthless hatchet man for Horgan but his personality and vision are underwhelming.

alexandracdn
alexandracdn
October 26, 2022 7:09 pm

It was Patrick I believe who said earlier this year sometime that it may be a good idea to lock in your mortgage @3.75% for 10 yrs. That was probably good advice.

Frank
Frank
October 26, 2022 5:48 pm

I know that mortgage brokers get paid according to the type of mortgage their client takes out. Higher interest, higher commission. I wonder if banks were incentivizing them to recommend variable mortgages to their clients, knowing that rates were inevitably going to rise. I can’t believe that recent first time buyers went variable when 5 year fixed rates were at historically low levels. Can’t help but think they were given poor advice. Sure is working in the bank’s favor now.

up-and-coming
up-and-coming
October 26, 2022 4:21 pm

Eby’s big housing push: real deal or dud?

A dud. Just like him. The guy has the personality of a house plant.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 26, 2022 4:12 pm

The higher interest rate puts a pin in the balloon for condominium investors wanting a new (er) building. The rents won’t cover a new mortgage, taxes and strata fees with only a minimum down payment.

This could increase the inventory of condos/townhomes built in the last few years and bring down prices as some investors exit the market.

patriotz
patriotz
October 26, 2022 3:05 pm

Every increase in the Bank of Canada’s benchmark rate brings sunshine into the life of the aspiring first-time home buyer. Not so much for young owners. They’re getting snowed under by rising mortgage costs. But if you have hopes of some day owning, or if you’re keen to set yourself up for never owning, then the rising rate trend is your best friend.
.
The direct benefit of rising rates is higher returns on risk-free savings and investments that can help you reach financial goals like building a home down payment or an investment portfolio. Indirectly, rising rates depress house prices. What a switch from a year ago, when interest rates on savings earned you close to nothing and house prices surged by double-digit amounts.

Well, welcome to the 1980’s. 🙂

https://www.theglobeandmail.com/investing/personal-finance/article-young-homebuyers-interest-rates/

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 26, 2022 2:56 pm

Maybe Frank, but then you could charge them RENT! And evictions would be super simple. Just hook up their trailer and take it out of town.

alexandracdn
alexandracdn
October 26, 2022 1:43 pm

Prime rate at all big 6 banks going up to 5.95% effective tomorrow, i.e. 27 Oct 22.

totoro
totoro
October 26, 2022 1:26 pm

Use your imagination on how you would temporarily permit RV’s in driveways.

We don’t have to. Municipalities, including Oak Bay, did this during the Covid pre-vaccination period. https://vancouverisland.ctvnews.ca/oak-bay-allows-rv-parking-in-driveways-amid-pandemic-1.4888993

Frank
Frank
October 26, 2022 1:14 pm

Have you checked your RV lately? Most of them have a homeless person living in them already.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 26, 2022 11:27 am

I have no doubt that allowing RV’s in your driveway will be ugly. However it does solve the immediate problem – immediately. Then as the market expands with more buildings the RV’s can be taken away and you have your neighborhood back.

The city could do this many different ways. If I give an opinion on how on this blog -it’s just going to get shot down. Use your imagination on how you would temporarily permit RV’s in driveways.

Vic&Van
Vic&Van
October 26, 2022 10:48 am

“- Yeah, we don’t need triplexes on Shelbourne, we need 6 floors”.

More like 8-10 floors is needed with commercial on the bottom. There is general consensus to develop that corridor especially near intersections so not sure what is holding back for this. I don’t think there is a great deal or any opposition.

Rather than trying to force through a triplex in Uplands that will only house a handful of additional people against fierce local opposition, I think developing density in already busy areas is the way to go and will create considerably more housing for the effort. Economically such projects are much more attractive to developers. Plus, this makes it economically viable to expand transit along these corridors maybe to the point of light rail.

caveat emptor
caveat emptor
October 26, 2022 10:46 am

could allow recreational vehicles to be parked in driveways that then could be rented.

We had one of those just down the street. The RV was parked for at least 10 years with an extension cord to the house. Not awesome for the immediate neighbours as the RV was less then a foot from the property line and the increasingly dingy, lichen covered RV kind of loomed over their front yard.

Judging by increasing numbers of RV’s parked in Beacon Hill, Gorge and many other locations in the city, these are some people’s solution to the housing crisis

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 26, 2022 10:43 am

It does imply that BoC expects this “recession” to be at least three years long.

Local Fool
Local Fool
October 26, 2022 10:25 am

The Bank of Canada says it expects inflation to slow to three per cent by the end of 2023 before getting back to its two per cent target by the end of 2024.

This is a quote from a TC article today. To me, 8% to 2% in two years seems very fast and also seems to presume that the BOC has control over the various sources of inflation, which I’m not confident they do.

I’d actually be curious to see historical data on instances where inflation has been notably above target, and the time it has taken for monetary policy to bring it back to that target.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 26, 2022 9:59 am

I suppose if you wanted an immediate solution for the housing crisis then the city could allow recreational vehicles to be parked in driveways that then could be rented.

VicREanalyst
VicREanalyst
October 26, 2022 9:32 am

So not all that bullish IMO.

What I meant was bullish narratives from realtors and investors to come out shortly.

Rush4life
Rush4life
October 26, 2022 9:32 am

That they went with 50 rather than 75 tells me that the BOC thinks the economy is slowing fast. So not all that bullish IMO. Personally surprised they didn’t go with 75. Front load the pain and then pause to survey the results.

Based on Tif’s comments they aren’t seeing the economy ‘slowing fast’, but are starting to see some signs of potential rollover. As for the front load comment that is precisely what he said they did. Meaning the front loading is done and we should be back to more historical increases (ie 25 or maybe 50 bps increases).

VicREanalyst
VicREanalyst
October 26, 2022 9:31 am

And this is why the contract that the BCGEU agreed to was dumb as fuck.

They had no choice, they had no leverage. Every month the negotiations dragged on inflation becomes lower due to base effect.

caveat emptor
caveat emptor
October 26, 2022 9:29 am

Yeah, we don’t need triplexes on Shelbourne, we need 6 floors.

Totally agree, but of course this causes me to feel deep sympathy for those that are traumatized by so much as a triplex in their neighbourhood.

VicREanalyst
VicREanalyst
October 26, 2022 9:28 am

Need to see the impact of atleast 3 months of sustained >5% rates (fixed and variable) on the housing market before making a call if buyers and investors can handle it or not.

caveat emptor
caveat emptor
October 26, 2022 9:26 am

50bps, bullish narratives to come out shortly.

That they went with 50 rather than 75 tells me that the BOC thinks the economy is slowing fast. So not all that bullish IMO. Personally surprised they didn’t go with 75. Front load the pain and then pause to survey the results.

Rush4life
Rush4life
October 26, 2022 9:07 am

I watched the meeting and while clear on continued rate hikes they did allude to slow down in housing and ‘large ticket item’ purchases also slowing which they are hopeful is a sign inflation is starting to be impacted by higher rates. they also implied that the days of 75 to 100 bp increases are over unless inflation picks up. They noted inflation has gone in the right direction from 8.1 to 6.9% but also said that was mostly due to gas prices. Someone asked about looking at data before a rate hike in December but he went back to the point they made about needing higher rates still. Seems December is a lock for another increase though I wouldn’t be surprised if it was 25 bps. Someone asked about the US raising rates next week at 75 bps and how that would impact us and Tif just said they are gonna do what’s best for them and we are gonna do what’s best for us (didn’t recognize that there is a correlation). That’s all I remember off the top of my head. https://youtu.be/dTxG_ZTRcz0

James Soper
James Soper
October 26, 2022 8:56 am

The Bank’s preferred measures of core inflation are not yet showing meaningful evidence that underlying price pressures are easing.

There’s no close to success in that statement. There is hopes and dreams, thoughts and prayers.

Local Fool
Local Fool
October 26, 2022 8:17 am

Not sure if this will make a more optimistic view of things or whether the can is just being kicked down the road.

I don’t think it’s either. They even said they are now citing financial stability concerns. The last hike cycle had its terminus point at sub 2% in 2018. Now debt levels are much higher and they’ve breezed past that 2% point in panic mode. Taking a breather at this point might not be a bad idea, especially as the housing market starts to really implode and the knock-on effects on the economy start to manifest more widely. I don’t believe we’ll need the overnight rate to exceed actual inflation to deflate the latter, but that’s just a guess.

A triplex or 2 or 20 along Shelbourne isn’t impacting anybody’s quality of life.

Shelbourne, especially the section between North Dairy and Pear, is underbuilt IMO. It reminds me of those historical TC articles featuring Blanshard St by SJ Willis in the 60s. That section was a single lane road with nothing but SFH all the way. It was major initiative to widen the road and completely change the zoning. SFH there just didn’t work anymore. One SFH home owner resisted his family’s expropriation with a shotgun. He lost…

James Soper
James Soper
October 26, 2022 8:12 am

50bps, bullish narratives to come out shortly.

And this is why the contract that the BCGEU agreed to was dumb as fuck.
No actual resolve.

Rush4life
Rush4life
October 26, 2022 7:50 am

5 year Canada bond down to 3.5% from a high of 3.9% a few days ago.

Barrister
Barrister
October 26, 2022 7:27 am

A more modest hike than what was possible. Not sure if this will make a more optimistic view of things or whether the can is just being kicked down the road.
Wonder what percentage of variables are being triggered at this point?

VicREanalyst
VicREanalyst
October 26, 2022 7:20 am

50bps, bullish narratives to come out shortly.

VicREanalyst
VicREanalyst
October 26, 2022 6:32 am

Plus they wouldn’t have the risk of the market tanking.

Immigration and demand will make RE prices increase perpetually according to you.

Frank
Frank
October 26, 2022 4:59 am

I suspect a developer would have to be flush with cash. If their eventual profit is 25% but it takes 5 years to complete, why bother? If they can earn 5% in the bank, they would be further ahead with compound interest. Plus they wouldn’t have the risk of the market tanking. Who is going to be willing to risk their money when a guaranteed gain is available without all the headaches?

Thurston
Thurston
October 25, 2022 9:46 pm

Austerity will be hip again

caveat emptor
caveat emptor
October 25, 2022 9:40 pm

I am not anti Airbnb/anti STVR at all. I also don’t find any hypocrisy in staying in some Airbnb or other STRs when traveling, and also favouring some regulation of AirBnBs here at home.

Even Victoria hasn’t totally banned short term rentals. I believe you can airbnb your primary residence if you are away and you can also airbnb a room in your house (but not a self contained suite). And you need to get a municipal license/permit.

Other municipalities can and should take different approaches, but a provincial law requiring the rental platform to comply with municipal bylaws seems like a prerequisite for effective regulation of any sort.

Barrister
Barrister
October 25, 2022 9:33 pm

I think Ebby is going to have his hands full trying to keep employment up in the Province.

Kristan
Kristan
October 25, 2022 9:01 pm

Re: Airbnbs. They’ve been great for us, a young family, giving more space with young kids and especially when we get together with siblings and their children.

Patrick
Patrick
October 25, 2022 8:56 pm

Vancouver Island had 17 new home sales in the last 30 days and Greater Victoria had 5.

Ouch.

Ben rabideaux: 45 new SFH sold in G. Toronto.

Seems like new construction will grind to a halt. If so, Eby will have to tear up his list and come up with incentives for developers and construction.

Barrister
Barrister
October 25, 2022 8:49 pm

Guess on tomorrows BofC increase?

Patrick
Patrick
October 25, 2022 8:48 pm

Never stayed in one and never will. I think they are a plague. My opinion only of course.

Fair enough. I’ve stayed in lots, and think they’re great. From a customer perspective, it would be hard to see them as a plague. With our current housing shortage, absolutely anything that’s using housing seems to be targeted (second homes, vacant, satellite), and of course air-bnb. If they are restricted to tourist areas, taxed and regulated I hope they stick around and I think they help the economy.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 25, 2022 7:51 pm

Vancouver Island had 17 new home sales in the last 30 days and Greater Victoria had 5.

Thurston
Thurston
October 25, 2022 7:47 pm

Lots of 3 and 4 plexs in kitsalino They just look like big houses great inner city vibe wouldn’t bother me either

Introvert
Introvert
October 25, 2022 7:11 pm

comment image

Caveat Emptor
Caveat Emptor
October 25, 2022 6:53 pm

and degrade the quality of life for many people living in the urban single family residential neighborhoods.

Let’s be realistic. A triplex or 2 or 20 along Shelbourne isn’t impacting anybody’s quality of life. I have multiple duplexes, triplexes, and at least 5 fourplexes within a 150 metre radius of my house. Love the neighborhood and don’t understand why these multi family homes are supposed to make my life worse

I am friends with two families from nearby fourplexes. Should I tell them that they are degrading the neighborhood? Harming ‘just jack’s’ quality of life?

patriotz
patriotz
October 25, 2022 5:27 pm

Do you “walk the walk”, so that when you travel, you won’t stay at at an air-bnb?

Never stayed in one and never will. I think they are a plague. My opinion only of course.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 25, 2022 4:10 pm

I took a quick read through the hand deconstruction policy. There isn’t much in an old home that is salvageable. Sure there is wood but it will be riddled with nails and screws and the wood is rock hard. Nails and screws really “F’ ups planers and saws if you want to reuse the wood. Toilets, windows, door knobs they’re all junk. Do we even have an industry that can re-purpose this wood at a cost competitive with new engineered hardwood flooring? We really have little in the way of industrial land where this material can be stored dry until it is de-nailed and re-sawn. Has anyone on this blog ever tried to put a nail through 60 year old wood? Contractors are not going to want to use it.

People do try to reuse the old Oak and Fir wood floors but you can’t match it with new flooring if there isn’t enough. So it won’t end up in land fills just stored in piles on some industrial lot on Keating Cross road. You’ll end up paying someone $10,000 to haul it away so that you can get your $19,500 back. I don’t see this as a workable solution at all.

Grind it up, separate the metal, and turn it into presto logs or camp fire wood. That’s the best use I can think of it.

Whateveriwanttocallmyself
Whateveriwanttocallmyself
October 25, 2022 3:21 pm

There is a cycle to housing. As the land value increases these older smaller homes would be demolished and replaced with larger homes with suites or assembled into multi-family structures. If you interfere with this cycle by re-vamping older homes with costly additions and garden suites then it isn’t the best use of the land. It’s just a band aid approach to solving the housing problem. If someone converts their property to a tri-plex along Shelbourne then it will have an effect on the adjoining properties as it makes it too expensive to assemble with two or three adjoining properties to build a multi-family complex. It will end up making the housing problem worse in the long run and degrade the quality of life for many people living in the urban single family residential neighborhoods.

However, this might be a solution as people chose to leave the Victoria core neighborhoods as they become riddled with crime, parking problems, and a dump to live in. The downtown area is an example of the worst of densification. Sirens 24 hours a day, homeless on your door steps and a feeling of being mugged when you go to get a cup of coffee after 6:00 PM. Successive Mayors have wanted Victoria to become the next Vancouver. Well they got it, but it’s East Vancouver.

Thurston
Thurston
October 25, 2022 3:09 pm

Leo yep we removed rooms in the last couple of years There is some new stuff coming but won’t be here for a few years yet

Thurston
Thurston
October 25, 2022 2:55 pm

Ya don’t think air B and B is taking much business away from the hotels here in Vic there is enough to go around There is a shortage of hotel rooms right now

Marko Juras
October 25, 2022 2:42 pm

Do they have a hand deconstruction policy in Santa Monica. If anyone wants to explain to me how someone will receive keys to a missing middle unit in <5 years feel free to do so. Garden suite permit is pushing a year, let's be realistic here.

I am into month 6 or 7 trying to get a deposit back for some boulevard grass on an infill project. COV can’t even handle that.

Marko Juras
October 25, 2022 2:32 pm

Strange one. Maybe I’m missing something…

As I posted a few days ago, I’ve been involved in a number of immediate sales after completion in my career. The vast majority of the time there is a reasonable reason such as family related, health related, job related, etc.

Very rarely is it the new owner found out there is a serial killer living next door and wants to re-sell.

Marko Juras
October 25, 2022 2:26 pm

The six unit blanket zoning has been a dismal failure in Vancouver. Hardly any SFH homes are being replaced with six unit apartments. One developer friend of mine said he would never build such a thing because the extra City of Vancouver safety requirements for six family units would totally overwhelm the profit margin. You would need to build apartments on a much larger scale (like 20 units) to make it worthwhile. This explains why virtually none are built. My developer friend is putting up a 50 unit apartment building in Langley which will be sold to a REIT when completed. Yes, REITS are part of the solution for all of the dislike for them.

+1, what I keep saying! If missing middle is approved you won’t actually see many built as the bureaucracy, step code, etc. will kill the economics of many such projects. I don’t know where the anti-missing middle is getting these ideas that their SFH will be surrounded by sixplexes in short order..

Marko Juras
October 25, 2022 2:19 pm

Great article. Love the point out about different types of flippers. I would also say there are a few that call each flip their “primary residence” as a way of avoiding taxes. Hit those guys hard too in my opinion.

Large developers do this all the time. Buy lot for $1.5 million, build for $1.5 million (probably expense a lot of materials against a spec project they are building), call it their “primary residence” sell for $4.5 million or $1.5 million profit tax free.

However, people feel that the portion of the suite in a 1 million dollar home in the Oaklands are should not be principal residence exempt which the wealthy making off like bandits.

Marko Juras
October 25, 2022 2:15 pm

Let the demand for short term be met by commercially zoned properties.

When I did my masters at UBC 2009-2011 I had to go to Vancouver four nights a month to attend classes @ the Robson UBC Campus. I use to be able to book at the Fairmont Waterfront at $99 to 129/night. Now it is $300 to $600 a night depending on time of year. Not sure if commercial zoning is keeping up with demand either. If it wasn’t for airbnb and other platforms it would likely be $500 to $800 a night.

Marko Juras
October 25, 2022 2:08 pm

In the past 10 years when I’ve gone away I’ve left my place vacant. Last two times I ended up airbnbing it to a Canada Border Services Agency employee here on an assignment and then another time to a travel nurse at working at Jubilee Hospital for 32 days. My building isn’t transient zoned so I can’t do less than 30 days.

While I am not a fan of dedicated units full time for purposes of airbnb it certainly fills some voids. In my case my place doesn’t sit vacant if I am gone for a month, I make some cash, and someone in Victoria for 30 days doesn’t have to stay at a hotel.

When I travel I always use airbnb/vrbo/whatever, I just find it a lot more enjoyable than a hotel and I don’t need the non-sense daily make my bed services of a hotel, etc. On the flip side in many countries it is a complete disaster for locals (can’t find long term rentals, etc.).

Patrick
Patrick
October 25, 2022 1:40 pm

Hopefully triplex zoning, should it come to pass, will also be a dismal failure here.

Agreed. Missing middle means “more families living in homes, not houses”, since a detached house is the ”footprint” that gets torndown to make a triplex.

Patrick
Patrick
October 25, 2022 1:34 pm

Bottom line is you have a business activity that’s competing for an already stretched supply of shelter with households and not paying the freight for it. I don’t think that should be allowed. Let the demand for short term be met by commercially zoned properties.

Do you “walk the walk”, so that when you travel, you won’t stay at at an air-bnb?

patriotz
patriotz
October 25, 2022 12:37 pm

fundamentally they exist because there is demand for short term accommodation.

Well yes, but you have to keep in mind they receive a tax advantage compared to regular hotels and other commercially zoned accommodations. The latter pay a much higher property tax rate than residential. There are other implicit subsidies with respect to CPP/EI, workers’ compensation and the like which most commercial accommodations have to pay. Plus externalities to residential neighourhoods – sometimes grossly so.

Bottom line is you have a business activity that’s competing for an already stretched supply of shelter with households and not paying the freight for it. I don’t think that should be allowed. Let the demand for short term be met by commercially zoned properties.

James Soper
James Soper
October 25, 2022 12:26 pm

Also, Victoria is highly dependent on tourism.

Is it though? If anything I feel like the pandemic put that to rest.

Introvert
Introvert
October 25, 2022 12:21 pm

The six unit blanket zoning has been a dismal failure in Vancouver. Hardly any SFH homes are being replaced with six unit apartments. One developer friend of mine said he would never build such a thing because the extra City of Vancouver safety requirements for six family units would totally overwhelm the profit margin. You would need to build apartments on a much larger scale (like 20 units) to make it worthwhile. This explains why virtually none are built.

Interesting. Hopefully triplex zoning, should it come to pass, will also be a dismal failure here.

Sidekick
Sidekick
October 25, 2022 12:02 pm

I must say that a house like ours has a lot of glass (17′ high windows ) and a tipped roof with a large overhang.

For south-facing glazing, this is the way to do it. East/West you’d need external (movable) shading, and north-facing you’d be paying the heat penalty.

very important to our mental health as well as all the practical aspects

Absolutely. Glass is an amazing material.

I would hope that building codes take advantage of this kind of idea

They do not, although it is one strategy which comes into play for step 5.

and not always think “inside” the sealed BOX

Well, ideally you want a sealed box…with windows.

Thurston
Thurston
October 25, 2022 11:56 am

Vic&van totally agree building a 3 or 4 plex is not going to be affordable I would like to see single family in the core zoned for higher density but they will be homes for high earners

Dale D
Dale D
October 25, 2022 11:35 am

Great article. Love the point out about different types of flippers. I would also say there are a few that call each flip their “primary residence” as a way of avoiding taxes. Hit those guys hard too in my opinion.

I did want to provide a different potential impact on stomping out STR’s.

“While not enough to address the housing shortage, it could put hundreds of units back onto the long term rental or resale market in short order.”

The reason investors have significantly moved to STR’s vs. LTR’s is because even at market rents, LTR’s tend not to cash flow so you count on tenant turnover within 3 to 5 years to get to a point where they are actually profitable. In other words it can be tempting to make an illegal STR when your other option is to subsidize someone’s housing, potentially indefinitely if they never move.

A more likely option is not units into the rental pool, but units into the ownership pool. I’m sure that helps, but not necessarily as much as you would think.

Also, Victoria is highly dependent on tourism. It is a challenge to find places to stay in Victoria in the tourism months. Removing Air BnB will only make it harder for people to come. While someone may react to that with “who cares”, it does have a lead on effect in terms of reduced tourism, reduced money flowing into Victoria, reduced incomes and jobs. Reduction in earnings, just like increased expenses, contributes to affordability. Which impact is more? I don’t know. Just thought it was worth pointing out.

Vic&Van
Vic&Van
October 25, 2022 11:32 am

The three unit rezoning (laneway houses plus basement suite) in Vancouver has not helped affordability very much. It did provide some housing – generally same family housing for the younger generations of already well fixed up families who bought years ago when things were cheap. We have a friend who lives in Dunbar in a laneway house with her older parents who are retired teachers (back in the day even teachers could afford Dunbar). Another friend is a doctor in a fancy house off Cambie who has parents in the laneway house providing care giving. Very very modest help.

The six unit blanket zoning has been a dismal failure in Vancouver. Hardly any SFH homes are being replaced with six unit apartments. One developer friend of mine said he would never build such a thing because the extra City of Vancouver safety requirements for six family units would totally overwhelm the profit margin. You would need to build apartments on a much larger scale (like 20 units) to make it worthwhile. This explains why virtually none are built. My developer friend is putting up a 50 unit apartment building in Langley which will be sold to a REIT when completed. Yes, REITS are part of the solution for all of the dislike for them.

Garden suites are not a new thing. I remember looking at a home for sale in Uplands years ago which had a very large main home on 2/3 acre plus a totally self contained separate four bedroom “pool house” that looked like it was being rented to occasional tourists. There are a few massive waterfront mansions in Ten Mile Point that have had smaller 3-4 BR “guest houses” on the same lots present for decades. Saanich and Oak Bay zoning doesn’t allow these officially but they exist as non-conforming. I believe those “guest houses” are either rented to tourists occasional tourists or else young branches of the same families. Regardless, these are no panacea for increasing the supply of housing.

None of these things proposed by Eby are going to move the needle much except as PR fodder to make Eby look good. The most effective thing to do would be to build much larger massive apartments and condos along transit corridors like they did on Cambie St. in Vancouver. I believe Saanich is planning for this along Shelbourne and other similar corridors and that is the right approach as opposed to getting a few more pool houses/servant cottages built beside mansions.

VicREanalyst
VicREanalyst
October 25, 2022 11:26 am

I an surprised how well sales are holding in there given interest rates. We are going to finish the month above the 2011-2014 average for sales for the month of October.

Is that in line with the population growth? Perhaps something like sales per 1000 adult residents or something should be looked as a better gauge or how busy the market is?

Sidekick
Sidekick
October 25, 2022 10:42 am

There are a bunch of 10,000+ sq.ft lots in North Oak Bay.

Not saying they don’t exist, just that they aren’t the ‘typical’ city lot. Ideally you’d use wider lots for triplexes (>= 80′ frontage)

deryk houston
deryk houston
October 25, 2022 10:41 am

I don’t know what the requirements of the new building codes are but I must say that a house like ours has a lot of glass (17′ high windows ) and a tipped roof with a large overhang.
The result is that in winter, with the sun going across the sky at a lower level, our heating costs are very low.
It’s also a stunning visual experience to include so much sky….as eagles fly by or watching racing clouds and sunsets. My point is that glass is very important to our mental health as well as all the practical aspects.
It’s kind of like having direct solar heat. We hardly put on the heat.
In the summer, with the sun being higher, and with the large overhang, it stays cool. (well insulated roof)
I would hope that building codes take advantage of this kind of idea and not always think “inside” the sealed BOX.

Sidekick
Sidekick
October 25, 2022 10:38 am

restrictive are the glass requirements for new builds

There are restrictions on the percent of wall area that can be glazed on the sides that face neighbouring buildings. This is a fire-related code and the percentage changes with the distance to the lot line. It is fairly restrictive, especially if you have have a 5′ setback. You can work around it with fire-rated assemblies ($$$) or installing fire sprinklers (which are typically an engineered item).

I have heard (anecdotally) that at steps 4 and 5 you start having to make real design compromises.

There is a thread of truth to this. There are some core aspects to efficient buildings, such as surface-to-volume ratio. This is the ratio of external area (wall, roof, floor) to internal volume, and it makes a big impact on the heat gain/loss of a structure. A building with lots of ‘jogs’ or dormers, for example, have a lot more surface area through which to lose heat.

Same goes for windows/doors. You lose at least double the heat through very efficient glazing than a 2×6 stud wall (and much more through a typical code window). Over-glazing (especially north-facing) could cause you to miss step 4/5. Similarly, over-glazing east/west can cause overheating. I’m not sure if over-heating is a metric tracked by step 4/5.

There are other aspects to efficient buildings, but those would be the 2 that can have a big impact on design/orientation. Having said that, almost any building can meet step 4/5, it just means spending more $ in other areas (extra insulation, higher performance fenestration, etc.)

Silky.
Silky.
October 25, 2022 10:31 am
  1. Increase funding for non-profit housing providers – Sure why not, better than big gov running the show
  2. Create a Rental Housing Acquisition Fund – Trash, government owned and operated ghetto death trap tax pits. No thanks, let developments demolish and build bigger with more units.
  3. Eliminate 19+ age restrictions in stratas – Yes please
  4. Eliminate rental restrictions in stratas – Yes please
  5. Short term rental companies will be forced to cooperate with municipalities – Sure
  6. Housing needs will become minimum targets – Why not
  7. Legalize suites everywhere – Yes please
  8. Implement DAPR recommendations – ?
  9. Anti-money laundering actions – Are they not doing this already?
  10. Flipping tax – Please no more optics based “Spec tax” programs
  11. BC Builds home construction program – Sure if they stick to regions the private sector isn’t interested in.
  12. Legalize triplexes in single family zones – Yes please
Barrister
Barrister
October 25, 2022 10:13 am

Full windows at front and back, small upper windows along the length if you look at the interior shots. Patriotz, appreciate your opinion but it leaves my question of how restrictive are the glass requirements for new builds.

patriotz
patriotz
October 25, 2022 10:10 am

You can see that the house has plenty of full sized windows.

Love that “Annual Property Taxes $1,111”. Not going forward that’s for sure.

Barrister
Barrister
October 25, 2022 10:01 am

I was referring to the house at 1023 Joan Crescent which is a new build which is for sale.

caveat emptor
caveat emptor
October 25, 2022 9:47 am

My question is whether the amount of glass for a new build is very limited by the new building code?

I’d be interested in that too. I have heard (anecdotally) that at steps 4 and 5 you start having to make real design compromises and end up boxier with less windows. (Which kind of sounds like what you are describing)

patriotz
patriotz
October 25, 2022 9:44 am

And, even if Eby’s policies somehow allow triplexes everywhere, this type of policy has already failed in Vancouver

I assume you’re referring to the city wide duplex zoning. First of all it only applies to the City of Vancouver itself, which is just a fraction of the metro area. As well Vancouver had already allowed a suite plus a laneway house (what Victoria calls a “garden suite” I believe) in SFH zoning so the net effect was not large. “Garden suite” in Vancouver is a euphemism for basement suite BTW.

Barrister
Barrister
October 25, 2022 9:40 am

I suspect that supportive housing units along with other BC housing projects should be built within the next five years and will be very high on the implementation list for the CofV.

I wonder if rental buildings, especially new built triplexes, might be a lot more challenged if we head into a recession. One of the neighbours who sits on the board of a larger pension fund sees investing in the CofV as risky. Not sure that I share her view.

caveat emptor
caveat emptor
October 25, 2022 9:24 am

Could someone point out ONE of these 12 ideas that they believe will actually work, actually happen and will move the needle favorably on housing within the next five years?

IMO the only ones that individually might move the needle are proposals to allow triplexes broadly and the funding for non-profit housing. Both are longer term. In 5 years they may have just begun to make a difference.

There are a couple of ideas that have a lot of merit on their own.

Getting rid of (some of) the age discrimination in condos makes sense
Cracking down on short term rental companies that are flouting local rules makes sense
Legalizing suites is a good idea and may make some long term difference and also presumably protects the existing “illegal” stock from busybody neighbours.

Plus a bunch of ideas that I don’t know enough about one way or another.

Barrister
Barrister
October 25, 2022 9:23 am

I noticed a new build on Joan Cresent that sort of looks like a large shipping container. But what struck me is the row of very small and high windows along the whole length of this box.

My question is whether the amount of glass for a new build is very limited by the new building code? Hope someone here knows,

James Soper
James Soper
October 25, 2022 9:07 am

The big lots where you could make this work are mostly already multi-family, or, fancy SFHs that have no interest in this.

There are a bunch of 10,000+ sq.ft lots in North Oak Bay.
Check out 2073 RENFREW RD (almost 20k, built in 1960) and that neighbourhood.

Patrick
Patrick
October 25, 2022 8:52 am

Could someone point out ONE of these 12 ideas that they believe will actually work, actually happen and will move the needle favorably on housing within the next five years?

Sidekick
Sidekick
October 25, 2022 8:13 am

…triplexes, on the same footprint, setbacks, height

I don’t think this computes. On a typical 5k to 6k sq. ft. lot in the core you can get a ~3k sq. ft. structure. In my opinion, there are some big compromises turning this into a triplex (or even a duplex). If they bumped the height to allow an on-grade lower floor and 1.5 upper story unit, you might see some uptake.

The big lots where you could make this work are mostly already multi-family, or, fancy SFHs that have no interest in this.

I’d like to see the province allow increased density (floor area ratio), allow habitable out-buildings, garage conversions etc.

Zach S
Zach S
October 25, 2022 7:55 am

Thanks for a very detailed breakdown of these new policies Leo.

I have definitely shared your optimism about the effects of our new, more pro-affordable housing governments here in BC.

I’m going to keep that optimism muted though, particularly when it comes to actions from the provincial government.

To improve affordability we need to build a lot more housing and speculative demand must fall steeply.

I’m just not sure what part of David Eby’s platform deals with either of those issues.

Cities still have the ability to gum up the approval process. And his policies have no teeth here: after all, Victoria is already beating his (arbitrary) targets!

And, even if Eby’s policies somehow allow triplexes everywhere, this type of policy has already failed in Vancouver, why will it be transformative here?

I think the actions that will be most impactful to improve affordability will be local changes to zoning and approvals, rising BOC rates and federal immigration policy.

While we are seeing actions that will impact housing affordability at both the municipal and federal levels, it seems like the provincial government is struggling to find its role and may end up just tagging along for the ride…

Lynn Coular
Lynn Coular
October 25, 2022 6:46 am

Thanks for the analysis Leo. I’m most interested in what Eby does to legalize triplexes in single-family zones.

I had a conversation with a canvasser just before the election and asked what his candidate’s stance on the missing middle was… he indicated that they were apposed (note: canvasser and candidate were both boomers). His rationale was that “how would you feel if someone put a triplex right beside you without your consultation”. I indicated that most of the homes in our neighbourhood have at least 2+ units (house with suites) or more in each of them. As well, if it meant my daughter (aged 3) could live near me, in a walkable part of Victoria when she grows up, I’d be thrilled. I then explained that there are not actually that many properties in Victoria that would get the as-of right- zoning under MM, except for some of the larger properties in Rockland – note his candidate lives in Rockland.

The point of the story is that Eby’s plan would ruffle a lot of feathers, but I also think it would be fantastic to “stick it to the NIMBYs”

Rush4life
Rush4life
October 25, 2022 5:51 am

Eliminate rental restrictions in stratas

This one confuses me. Doesn’t add any net new units to the market and just shifts from owners to renters which, as you stated, will increase price. If we had a bunch of open units in these buildings that would be one thing but, at least in Victoria, we don’t. No benefit except to piss of owners who want responsible tenants living in the building – which is more likely to happen with another owner over a renter. Seems illogical.

As for the graph is the y axis the amount over assessed as a percent? So homes between 1 million and 1.05 million are selling for 28% over their assessment compared to places just under 1 million only selling 14% over? If so, that’s a lot of variability in the price segments.

Frank
Frank
October 25, 2022 5:30 am

I don’t think people realize the effort Leo puts into his posts. This last one was impressive. He concisely analyzed each of the 12 promises and also provided potential flaws in each initiative. I also noticed that the 12 promises can be sung to the tune of The 12 Days of Christmas. Try it, it’s fun.

Marko Juras
October 25, 2022 12:04 am

Sales have picked up a bit in the second half of the month, mirroring the increase we had in the same weeks last year and closing the gap slightly on a percentage basis.

I an surprised how well sales are holding in there given interest rates. We are going to finish the month above the 2011-2014 average for sales for the month of October.

Thursday onwards best variable will be over 5% and the 5 year fixed will be in the mid 5%.