Construction is riding high, but will it last?

“Why do you think the entry level house in Royal Bay was ~$650k circa 2018?”

My best friend bought one of the largest house floor plans house on Sparrowhawk with every upgrade she could for $750,000. Original price for it was $625,000.

I don’t understand with so much land out that way, why houses have to be built so close together. It’s a shame.

Why do you think the entry level house in Royal Bay was ~$650k circa 2018?

Curious about this. Rates are not below wage inflation and AFAIK affordability is the worst since the 80s spike.

If you strictly adhered to the so-called Taylor rule, then you might conclude the policy rate is not yet sufficiently restrictive and actually needs to rise quite a bit further.

Westhills and Royal Bay bought their land years ago

They bought it in 2018 fyi.

Hey Marko, do you even bother celebrating that win?

I wouldn’t call interest rates that are still below yoy inflation particularly restrictive.

I guess we’ll find out in a about a year.

interest rates aren’t going to stay in restrictive territory forever.

I wouldn’t call interest rates that are still below yoy inflation particularly restrictive.

Considering these houses were selling for $650,000-$750,000 five or so years ago, when interest rates were lower, I can see prices returning

Expecting prices to return to 2019 levels is wishful thinking in my opinion. You’ve had five years of wage gains for one thing, and interest rates aren’t going to stay in restrictive territory forever.

There will be a buying opportunity in the next year or two when rates start falling but I wouldn’t bet on being able to snag a house in Royal bay for $650k ever again. That was a good deal though. Definitely considered buying there in 2018/19.

Westhills and Royal Bay bought their land years ago, but you have assumed that these companies have not re-financed the land over the ensuing years to take advantage of the low interest rates. With the cost of money so low in the past, It would have been wiser to use the bank’s money than the profit from sales to expand operations.

You’re thinking like a home owner – not a business.

1. Post removal of rental restriction can units now be rented for weeks to few months like AirBnb or strata can still dictate duration of rental?

No, short-term (less then a month) rental is only permitted in a few specially zoned areas. The min length in other areas are (or to be) set by the strata.

2. Oak Bay condos (except with age restriction of 55+) and other places can be bought now by people less than 55 yrs of age ?

55+ or not, the age limits (before or after) are for the residents, not for buyers. I am sure one is allowed to buy a condo for his/her parents or grandparents to live in, even before this amendment.

Have you drove through Royal Bay lately?

…

Even with their “1 million dollar house promo”. Prices will fall and continue to do so for the foreseeable future.

Mmmmkay Facebook

The problem with getting any price reduction on a new home in Royal Bay is that there are only 2 real estate agencies that are selling them. That almost eliminates any negotiation room you have when making an offer. They have reduced their average asking prices from $556 to $520 per square foot which has made them very competitive with other new homes in the area that are asking around $533 a square. The adjoining subdivisions have been outselling Royal Bay but now they are a lot closer in asking prices.

It’s because they already own the land. Westhills and Royal Bay bought their land years ago so they can continue building and keep their inventory coming up for sale somewhat “reactive” to interest rates so buyers feel like they’re getting a deal. All the developers and builders that bought small subdivisions/lots in 2021 are all coming to market now and need to get a certain price point, but are in no means panicking yet as there’s very little emotion involved in building a house vs. selling the home you live in.

That information may be out of date. Below is a chart from a Globe and Mail 2019 article. I’m sure foreign enrolment dropped during the pandemic but has since increased. Wikipedia info isn’t always updated.

For context though, when the US had the same population that we have in Canada today (~39 million), they were growing by about 1.16 million people a year.

Circa 1870!

Here’s hoping Canada never even approaches a quarter of the United States’ current population of 332 million.

Heard that Cape Breton U in Nova Scotia has approximately 4000 foreign students and 2000 non foreign students.

You heard wrong.

https://en.wikipedia.org/wiki/Cape_Breton_University#Enrollment

Have you drove through Royal Bay lately?

There are some people on here really sensitive to Royal Bay lol.

Yes but do they? I haven’t seen any stats backing that up. Certainly a lot of them aspire to move to the US but hopes don’t equal outcomes.

Agreed. Similar surveys have recent immigrants planning to migrate to other provinces. But most don’t. Over time, “roots” get formed where people are living, and thoughts of moving elsewhere fade.

That wasn’t my conclusion at all. I said we hear that a lot of them would like to move to the US, but that doesn’t mean it happens.

The only stats we have is the number of Canadians that left Canada from June of 2021 to July of 2022 which was around 49,000.

The stats did not say where they went. So I’m not jumping to your conclusion that it is the USA.

A new poll suggests 30 per cent of new, young immigrants to Canada could leave the country in the next two years.

According to a national survey conducted by Leger for the Institute for Canadian Citizenship (ICC), 30 per cent of new Canadians aged 18-34, and 23 per cent of university-educated new Canadians, said they are likely to move to another country in the next two years.

Keep in mind in the US when the “immigration” issue is raised more often than not it means illegal immigration, which is not significant in Canada. Legal immigration, which per capita is much smaller in the US than in Canada, is much less of an issue.

Yes, this is spot on. While I’m a “Democrat” on most US issues, I’m baffled by their support of “illegal immigration”. It would seem that most everyone should be opposed to the idea of people breaking the law and just staying in the country.

Even stranger, they could greatly reduce illegal immigration in the US by reducing the opportunities for illegals to work. But neither party (dems or repub) does this. Fortune 500 companies employ them. For example, they could add a single line to the US federal tax return to list your status (citizen/green card ‘visa), but there’s a law that they cannot ask people this on the tax return. Yes of course it would discourage illegals filing returns, but it would be much easier to catch people that aren’t filing tax returns.

And there are “amnesty” cities etc. Imagine if “Nanaimo” declared itself a safe harbour “amnesty” city, where illegals could live and not be hassled by authorities asking them about their immigration status. So if you lived there, and the house next door had 10 illegals from Honduras there, you couldn’t report them so they’d get deported. Just a bunch of nonsense, and that’s what makes otherwise reasonable voters to support right wing anti-immigrant voices.

And then there isn’t much discussion of “legal” immigration in the US. Both parties like it, as they should. But they don’t let in as many “legals” as they should.

The buying opportunity will happen when the bank begins cutting rates again in the next year or two.

Giving up the rest of the pandemic gains would require another ~20% drop in prices. The only way I see that happening is a deep and painful recession with high unemployment. And even then, Victoria is somewhat insulated by its large public sector workforce. Rates would also be returned to stimulative levels.

I do find it interesting that in the US the Democrats are generally pro immigration while the Republicans are for reducing it, while in Canada all parties are pro immigration.

Keep in mind in the US when the “immigration” issue is raised more often than not it means illegal immigration, which is not significant in Canada. Legal immigration, which per capita is much smaller in the US than in Canada, is much less of an issue. For example:

https://www.pewresearch.org/fact-tank/2022/09/08/republicans-and-democrats-have-different-top-priorities-for-u-s-immigration-policy/

You cannot win a Canadian election without doing well in the Toronto and Vancouver metro areas, and that means appealing to the immigrant vote. That’s not just my view, it’s the view of the study the Conservatives commissioned to analyze why they have lost the last 3 elections.

More cynically, I think the Conservatives get most of the anti-immigrant vote and want to keep it, but they appeal to this group on other issues that appeal to them, ie. guns, anti-drugs, anti-“woke”, etc.

And it should be noted that the PPC is open about significantly reducing immigration, but it doesn’t appear to be a big vote-getter.

For many of the millions forced to flee, returning home concludes an often traumatic time in exile. It may happen months, years or even decades after they left – and sometimes not at all. Over the years, UNHCR has managed numerous voluntary repatriation programmes that have brought millions of displaced people home.

We simply do not have the data to estimate how many refugees and immigrants would return home if hostilities in their home country ended. Syrian refugees living in Lebanon tend to be the source of most studies. Less than 30 percent said they expected to return to Syria, but 60 percent said they wished they could return to Syria.

Overall, while many Syrian refugees do not think it will be realistic to return to Syria soon, many wish they could go back.

Would this be the same for refugees in Canada? We don’t know. If we reversed the situation and Canadians were refugees living in Syria, how many of us would want to return to Canada?

(Interest increases in 3 of the next 4 announcements)
+ (Non-resident buyer ban)
+ (A wave of mortgage renewals that will be going from 2-3% now to 6-7% on renewal)
+ (Stress test in the 7-9% range)
+ (A recession)
= (A spring normalization of inventory, a give back of the of the remainder of the pandemic gains and maybe an additional market retreat after that)

Hey Soper, he might have been your teacher (P), you never know.

Is this a play on the “those who can, do, those who can’t, teach”? I actually had decent Math teachers, so likely not.

It appears I’m living rent-free inside Soper’s head

It’s fun, isn’t it? It’s ironic he goes to all that trouble to block us but still thinks about us all day 🙂

That October reading indicates that sales prices are still 5-15% above July 2021 assessments.

Ah ok, I get it now. Also shows about a 16% decline from peak for SFD.

So it’s come to this.

Sounds alright to me. Salmo is located in one of the most beautiful regions of the Province. I often considered moving out that way when I was younger and less encumbered.

Or expressed another way, it brings prices back to where they were in mid 2021

lol Patrick presumably?
I’m guessing he’s doing math really wrong here, since I haven’t seen anything showing prices being up 60% since mid 2021.

Here it is for you in case you’re confused:
(1M – 626K)/1M = 37.4% -> Down 37.4%
626k * (374k/626k) = 59.7% -> Up 59.7% –> 626k * 1.597 = 1M.

The current median house price is already back to where it was in mid 2021

How about Leo’s excellent “sales price over assessment”, which shows current prices still about 5% (SFH) – 15% (condos) above that? And those assessments were done based on July 2021.

Apparently there is still a lot of provincial $ available to support all the new initiatives and announcements (like an increase in physician salaries and a new Housing ministry, to name two). No sign yet of any fiscal belt tightening / hiring freezes at the provincial level which would really hit the local housing market.

Up $5B in a single quarter?!

“The province’s operating surplus is $5.7 billion, an improvement of $5 billion over the first quarterly report,” the government said in a release.

https://globalnews.ca/news/9304799/bc-government-financial-fiscal-year-update/

Confident Canadian coach thought who noted Canada was going to “f” Croatia next

I think he meant Canada was going “face” Croatia next 🙂

The Building and Strata Act Statutes Amendment Act 2022 was passed. The changes to the Strata Property Act about rentals, age and electronic meetings are now in effect.

Marko interesting price history I have no problem with 2020 prices if that’s the bottom

That’s a 37.4% drop for unit #163.
That brings your average million dollar fixer upper down to $626,000.

So you highlight a story of a woman escaping an abusive marriage that sold a property as her primary residence and got dinged by the mostly inept CRA?

The court decided that the property was not her primary residence and that the disposition was taxable. However it also decided it was taxable as a capital investment (capital gains), not a flip (business income). This is often a grey area. Note also “The taxpayer was reassessed by the CRA for her 2011, 2015 and 2016 taxation years in connection with the sale of four properties she owned at various times during that period. ”

Once the judge determined the home was capital property, the next question was whether it could be considered her principal residence at the time, and thus exempt from tax upon sale. The judge noted the property was never occupied with any regularity and there were “no identifiable changes of address, permanent hallmarks or other domestic expenses and touches, beyond mandatory utilities.”
.
The judge, in ruling the gain was taxable because it was not her principal residence, concluded that “while she may retrospectively believe (the property) to have been her permanent domicile, her present belief cannot assuage the (CRA’s) assumptions without some additional evidence.”

Thank you Marko. Interesting times as they say.

One level of inefficient useless government trying to put pressure on another level of inefficient useless government will equal zero results.

I certainly hope you’re right.

I think I need to apologize to everyone on here. I know I’ve been here a while, and so there really is no excuse, but I truly didn’t understand that this was Manitoba real estate discussion board. So I’m so so very sorry. I’ll show myself out. Thanks for all the fish.

Uh oh, James is having a bad day and going after Frank again. He must not have gotten his union mandated break, had a car cut him off while he was on his bike or been kicked off another housing blog site.

1:42 a.m.
Friday, November 25, 2022 (GMT+1)
Time in Croatia right now.

Hey Marko
Did you watch the Canada Belgium World Cup game. 1-0 for Belgium?

Last year you were dissing Canadian soccer, when you said …
“Marko : Soccer; Croatia>Canada, not even close. It would literally be a 10-0 game”

The last time Croatia played Belgium Croatia lost 1-0. Are you sticking with that “literally a” 10-0 Croatia Canada score when they play on Sunday nov 27 8am pst at the World Cup in Qatar ? https://www.sportingnews.com/ca/amp/soccer/news/canada-croatia-date-time-2022-world-cup-game/jhpvcc7ff1r8hhaa48uclxct

160k to 180K household income with a kid or two and a dog.

Yeah that seems more realistic for the scenario of a 1m house with 800k mortgage.

And for the original scenario of a 1m mortgage I imagine the average Hh is 180-200.

Now if you take into account where the 20% down payment (for most people) came from, the stress in unreal.

Where are you implying that it came from that adds more stress?

Maybe people buying the > 1Mil houses are well above the median. I’m sure there are many many households making more than 100k.

I’m not saying it’s not stressful to suddenly pay another 20-30 k per year. Im sure it is for some of these people! I’m just saying I think you are underestimating the incomes of people with that level of mortgage debt.

“If they have a million dollar mortgage their household income is probably much higher than 100k? Even when rates were super low I don’t think you’d qualify for a 1m mortgage with 100k household income.

According to my rough calculations based on a debt servicing ratio calculator that my mortgage broker gave me, the bare minimum gross income to qualify for a 1m mortgage with the stress test of 5.25% is something like $137,000”

If that’s the case, people with the median household income of $100K could never buy a SFD house. But I am pretty sure that’s not true.

Adjusting for $800K mortgage ($1 mil house), minimum income would be $110 K as per your calcs, not far off from the $100K median household income. Median house price in Victoria is more than $1 mil. The financial stress being felt by recent buyers (2021 & 2022) is real, not an imaginary construct. Now if you take into account where the 20% down payment (for most people) came from, the stress in unreal.

Not the case in Manitoba.

Frank, your info is so out of date! 😉

That rule has been changed since Oct 2018 in the Capital and largest city of Manitoba. See:
https://realestatemagazine.ca/winnipegrealtors-ends-other-occupation-bylaw/
“Winnipeg Realtors can now have another job aside from selling real estate, after members of WinnipegRealtors approved an amendment to a longstanding bylaw.”

Not the case in Manitoba.

I think I need to apologize to everyone on here. I know I’ve been here a while, and so there really is no excuse, but I truly didn’t understand that this was Manitoba real estate discussion board. So I’m so so very sorry. I’ll show myself out. Thanks for all the fish.

Not the case in Manitoba.

Most real estate boards do not allow agents to have a second job, you have to be committed to your profession.

Hard to imagine how a broad rule like that would survive a charter of rights challenge.

Most real estate boards do not allow agents to have a second job, you have to be committed to your profession. I’m sure Marko can clarify.

No such rule with the Victoria Real Estate Board. You can have a second or third job if you wish including that second job being full time.

..

Most real estate boards do not allow agents to have a second job, you have to be committed to your profession. I’m sure Marko can clarify.

Wow ….today I learned. That’s pretty unfortunate for them… I’d hate being in an industry where your income is feast-or-famine, seems stressful. Although I guess there are some people who have done very well for themselves in real estate.

How many realtors have a second job? I thought lots of them use real estate as extra income rather than a primary income? But maybe I’m totally wrong. (Of course some of the people you see on every freaking sign probably do it full time, but I thought that was probably the minority)

Any way of guessing how many people have houses that are actually underwater at this point?

That’s 20K after-tax and ~30K before tax. If the household income is 100K, their after-tax income is probably 70K, and their mortgage payment went from 40K to 60K after taxes.

It’s just a couple hundred bucks Rodger, I’m sure they’ll all be fine.

I can’t see much unemployment any time soon.

I would feel much more optimistic about this if the central banks were taking a more measured approach to raising interest rates instead of panicking. Soft landings are elusive at the best of times, probably impossible in an environment where central banks are blindly raising rates and guessing.

Hundreds of realtors are not selling anything each month.

This year will end as the second highest sales volume ever which means second highest gross commissions earned for the industry. It isn’t as bad as it would appear.

The real problem is if spending dries up to the point that serious job losses occur. Having a mortgage when you are out of work results in bad things Most people are too young to really remember what a major recession looks like and lets hope that we dont have to find out.

With respect to trigger rates and their impact, I would hypothesize that most aren’t on the brink of insolvency and being pushed into a situation where they have to sell. However, what I would imagine might be only slightly less depressing is watching your equity decline while at the same time paying only interest. Pure backwards movement. Ugh!

You’re also doing your part to help people like me retire. Depends on which side of the balance sheet you’re on.

My own bear narrative has always been that entry level buyers being shut out, or existing owners unable to move up, at current prices has far more impact than those foreclosed or forced to sell.

However, a life of expectancy of 58 (then) vs 84 today

As a matter of fact life expectancy at birth in Canada in 1960 was about 70, and almost all of the increase since then has been due to a drop in infant and child mortality. The reason we have so many more older people today isn’t because people are living a lot longer, but because we have far fewer children.

https://www150.statcan.gc.ca/n1/pub/11-630-x/11-630-x2016002-eng.htm

1201 Fort Street , 1,300 square feet $4,000 a month.
Oswego near superior, 1400 square feet $4,825 per month
559 Niagara 1,100 square feet remodeled 1960’s rancher at $3,250 per month
A 1400 square foot half duplex in Rockland at $5,000 per month.

Totoro it won’t be $600,000. You’re dreaming. If I can go in there and renovate 1,100 or 1,200 square feet to modern standards. I’ll be getting at least $3,500 a month. Maybe even four grand a month.

Good luck with that. Very few people are interested in paying $3500-4 grand a month for 2 bed condo with poor soundproofing. The average 2 bed is $2600. Renovated with a bit more space is maybe going to get you to 3k imo with a much smaller market for this.

That services a huge mortgage. Investors are paying $600,000 just for condos that get $2,200 a month and hoping for a 3 percent return. These condos are not going to double in price but they are going to be worth a lot more than $600,000.

3k a month currently services a 500k mortgage at 5% – not counting the strata fees, property taxes, and any repairs.

These condos are not going to exceed the price of condos that are currently rentable imo and the differential doesn’t seem to be more than 10%. For example, this 2 bed 2 bath 980 square foot rentable child-friendly condo in the core is $469k https://www.realtor.ca/real-estate/25036259/512-1745-leighton-rd-victoria-jubilee

I just drove up Bear Mountain and around that area today and am still gobsmacked at the way mountains are blasted away to make room for houses. I’m not talking about small areas…. the scale is enormous. And you can see other large areas with freshly chopped down trees getting ready for more blasting. It sure doesn’t feel like developers are holding back.
I’ve been watching this for years now….. but am still blown away by the scale.
I’m not making a judgement either way… just making an observation.

I never heard one about the backsplash though

I guess that work involves taking out the drywall and creating noise, so better to let the strata (and your neighbours) know and get buy-in beforehand, instead of someone knocking and complaining at your door.

The chances are not as bad as before. The BC government wants the municipalities to approve more zoning. These are already zoned multi-family. And there is condo building or it might be an apartment block in that neighborhood that is more than four storeys. Going from four to six is easier than going from four to 20 and would meet or maybe surpass Eby’s proposal for municipalities. But you could get more. I chose six because its wood frame construction and not steel and concrete. Wood frame is generally cheaper than concrete to build which could bring down the cost of construction from $500 to say $350 a square foot. Depending on parking and finishing. Underground parking stalls are expensive. Heck throw in a mountain bike with ever sale and call it even. Look at the project on Hillside as an example they get a year’s bus pass.

But who knows. If you don’t ask – you don’t get. Ask for 12 and settle for six. Zoning bylaws are not carved in stone. Depends on the OCP, city council, and if the project will positively impact the neighborhood. There is older multi-family in that neighborhood and others that aren’t very pretty to look at. The area could use some revitalization or should I call it gentrification?

You could build a new complex that looks very pretty. Definitely an improvement over what is there now.

I chose them by looking for ten minutes to find an older complex with big suites in a premium location that has a feature such as water view or a very large lot that adds value to any re-development. Ten minutes and I found two.

You found two that clearly aren’t close to working.

If I can go in there and renovate 1,100 or 1,200 square feet to modern standards. I’ll be getting at least $3,500 a month. Maybe even four grand a month.

I don’t about that. My neighbor rented out her 1,000 sq/ft 2 bed 2 bath partial ocean view in a three year old building with a pool, large gym, A/C, etc., for $3,500 in September and she didn’t have a lot of interest. Rental market in Victoria is VERY sensitive to price points. Once you go over $3k for a condo the demand drops off a cliff and same for SFH over $5k per month. I had clients a couple of years ago renting a $4 million dollar home in the Uplands for $5k/month. Taxes alone were more than 4 months rent.

You can renovate but a lot of things you can’t change. For example, older condos have 8′ ceilings and newer condos are 8’6” to 8’10” totally different feel.

Also, I have a hard time seeing 6 stories getting approved on Bushby.

Major understatement. That is the biggest flaw with Jack/whatever’s plan. If you can’t get 6 stories approved in CSV what are the chances on the Ross Bay waterfront (almost waterfront)

Think of what the pros can do.

Let me know when one of these “pros” terminates a condo strata successfully. As I said, I am not aware of a single condo strata termination in Victoria, someone on HHV can correct me if I am wrong.

There’s an example of a bank’s trigger/mandatory-mortgage-payment-increase letter on Garth today. Quite a jaunty little epistle considering that it will tip many households over the brink.

Will it though? Still waiting to see evidence of this. I assume most households could easily absorb an extra $200 per month in interest payments. There may be additional pain at renewal time though as payments are adjusted to keep amortizations on track.

Garth is also not credible.

There’s an example of a bank’s trigger/mandatory-mortgage-payment-increase letter on Garth today. Quite a jaunty little epistle considering that it will tip many households over the brink.

Doesn’t take long to find likely candidates and I’m an ammateur. Think of what the pros can do.

I thought Marko is one (or at least half) of the pros, not just as a realtor, but also a builder with his father?

Another one I like is 137 Bushby. 13 suites that are around 1,350 square feet each and the building is less than 100 feet from the water front. Go to six storey and the top three floors have water views. The building is subject to a Special Assessment which has probably been voted on by now. That would be say 30 or 40 condos some with unobstructed water views

What’s nice about these rather than vacant multifamily land is that you have an income stream of say $30,000 to $40,000 a month renting them out while obtaining re-zoning approval that may take 18 to 24 months and you get to keep the reserve fund. Probably cost $8,000,000 to buy out the owners and another $15,000,000 to build. Projected gross selling price for the units depending on the size and number of the units – maybe $30,000,000. Maybe more.

You would have to dig into the details and firm up the numbers but the back of the envelope figures indicates its worth doing a more in depth analysis.

Doesn’t take long to find likely candidates and I’m an ammateur. Think of what the pros can do.

Sure Marko. Look up 1145 Hilda. A 1974 built 30 unit four storey complex that fronts and backs on two streets. Wouldn’t be a stretch to get to at least two new six storey buildings as there are six storey buildings in the neighborhood. Probably looking at 100 or 120 new one and two bedroom units maybe more.

Developer is not going to shell out 15 million for a 35,800 sqft lot where max height is realistically 6 stories, if lucky with the nimybs/city hall.

To make a performa work that site has to be under 8 million.

Having said that, I think the political headwinds are firmly against municipalities who don’t get serious about approving housing,

I think this is a benefit to municipal councils who are facing neighborhood pushback campaigns and then they get personally lambasted on social media and in person. I’d hate to be in their shoes. If you want a municipality to meet the need for long-term housing you need to make it clear to their voters that they are not the final decision-makers and that it is a provincial mandate.

The minister can issue a directive; can make an order. What are the precise criteria that will lead to the minister doing so? It reads as a matter of discretion, which may flutter in the face of political headwinds.

Fair point. It would be a discretionary decision. Having said that, I think the political headwinds are firmly against municipalities who don’t get serious about approving housing, not the minister. I don’t think this is game-changing legislation, but allowing the minister and cabinet to override local government decisions around land use is a big policy change. We’ll see if it works.

DAD: My facts are based upon what the government has told us unless you are suggesting they are lying to us.

The policy intent of removing age restrictions would seem to be to expand the availability of existing supply for purchase to families with children. What does that have to do with vacant units?

It would be naïve to think a developer or group of investors would not see this as an opportunity.

The proforma isn’t even close to working. Not sure if I am bad at explaining concepts or you don’t want to accept the realities of basic math.

A developer cannot go into James Bay or Fairfield and pay 20 strata owners in a 4 story building 500k each (aka 10 million dollars) to rebuild a 4 story condo building or at best 5 or 6 stories.

The reason it works in Vancouver in limited circumstances is a developer can pay 20 owners 1 millon (aka 20 millon) and then rezone to a 40 story tower that they sell at $2,000 per foot.

I think it is a bad assumption that once the age restrictions are lifted these condos will stay less expensive. These buildings should have a spike in value. How that then makes them affordable is not clear to me. Young families will be priced out of these buildings too.

There are not many three-bedroom condominiums in Victoria and they are mostly in the older complexes. These older buildings tend to have two-bedroom suites in the 1,000 to 1,200 square foot range and some are even larger. That makes them desirable for an investor to convert them into three-bedrooms or two-bedrooms and a den while updating the interiors. $3,500 to $4,000 a month potential rent on a $600,000 purchase. That will drive the price of these condos up.

I don’t see how this makes them affordable for young families. It’s a bonus score for the current owner that wants to sell but not to a buyer or a renter.

We don’t know the particulars of why that project failed. But with the proposed changes that may accelerate developers targeting these older, inefficient buildings on large lots in premium locations like James Bay and Fairfield.

My experience has been that those living in these older buildings tend to be retired and living on pensions. They are not rich folks and have usually voted down increases in their strata fees or taken the least expensive route in repairs. These buildings therefore tend to have more deferred maintenance. Faced with a Special Assessment for repairs, some have a difficult time coming up with the cash or at their age taking on a mortgage. A developer or group of investors would provide a solution. A purchase with a lease back option is one that comes to mind. But there are many ways to skin a cat. An investor may not have voting rights on the strata council, but they can always sue the strata council. That can make the complex less desirable for prospective purchasers and effect the value of the condominiums. It only takes one zealous litigious owner to make the complex less appealing. to the marketplace.

It would be naïve to think a developer or group of investors would not see this as an opportunity. It’s more desirable to not create dissension by making an offer of 15 or 20% over assessed value with an option to lease back for 18 to 24 months. Providing that 80% of the owners accept the offer.

For those condo owners that don’t want their building to change there is the Poison Pill. Raise the age limit to 55. There is a chance this may effect the market value of their unit but it will make the complex less desirable to developers/investors.

But there is a very real cost to a lot of people in that not everyone wants to live with your screaming kids and teenagers. It is not like all or even most of the condos in Victoria are age restricted.

I am in favor of the new legislation but there will be some crap situations for people out there. Some of these older buildings I’ve been in you can literally hear every footstep above. If you’ve been there for two decades and then a family with kids moves in above you that kind of sucks.

Quite frankly I am shocked the NDP made the move. It won’t help the housing crisis much and it will piss off a ton of people.

Well great for developers I really wonder if shoving people, including families into ever smaller condo cubes is really the best that we can do for Canadians?

Don’t developers just build what the market wants? Problem is in Canada/North America people will rather commute to Sooke/Duncan than live with kids in a three bedroom condo in town as the two products have to be equivalent in price for the developer (in town) to cover his or her construction costs plus make a bit of a profit. The developer can’t sell three bedroom condos at a loss to try to swing SFH Sooke people into town.

In the end the market settles out at average 550 sq/ft one beds and 800 sq/ft two beds.

Just screaming that we are in a housing crisis does not justify what appears to be really bad policy in terms of getting rid of age restrictions. And before Totoro, with no facts to support the comments, leaps into personal attacks I dont live in a condo or an apartment,

All these sopposed vacant units are not really vacant but rather they were being used part time by their owners. Regardless the exemption was expiring this year and the vast majority have either already been sold or would be taxed onto the market in the next year or two. In short, at best, a very small gain that would have occurred in the next year or two in any event. (Note, for those people that are wiling to pay the tax this legislation does not change anything.) Besides he could have allowed rentals while keeping the age restriction as a compromise.

But there is a very real cost to a lot of people in that not everyone wants to live with your screaming kids and teenagers. It is not like all or even most of the condos in Victoria are age restricted. Everything build after 2010 has no age restrictions and that accounts for a large percentage of the buildings and not everything before is age restricted either.

What truly bothers me is that we seem to have lost sight of making life better for people while charging forward on some mindless crusades governed by the rallying cry of “Crisis”. Ebby in his announcement also tossed in the fact that this would address the “homeless” crisis. That the homeless is issue is actually a drug addition and mental illness problem is carefully ignored.

Well great for developers I really wonder if shoving people, including families into ever smaller condo cubes is really the best that we can do for Canadians? My dads generation had a vision of better lives for people. He was a working man who supported a large family on one salary, had a modest house and even a ramshackle cottage for all us kids and this was in Toronto. And we all had a family doctor back then. Things have gone badly wrong.

We should be making peoples lives better not worse. If we are building more condos they should be bigger, much bigger if you expect families to live in them, instead of smaller.

The attitude of the government seems to have become that people should just suck it up and expect less from life. I just dont think that we are doing good enough and the agenda so often seems to have coincidentally benefited my old Bay Street friends who are developers.

The owners of a Coquitlam condo will not be able to to wind-up their strata and sell it to a developer, a Supreme Court judge has ruled. The owners who wanted to wind up amounted to 78.6 per cent of ownership, but despite the “high threshold” of support, Justice Geoffrey Gomery said there were too many uncertainties to proceed with the plan.

Key to his ruling is the fact that a developer backed out of the deal this past summer, which changed a number of factors. The owners who wanted to wind up amounted to 78.6 per cent of ownership, but despite the “high threshold” of support, Justice Geoffrey Gomery said there were too many uncertainties to proceed with the plan.

Last summer, the condo owners discussed selling the property — which consists of six two-storey residential buildings built in 1982.

They engaged with a realtor, and by Nov. 5, 2021, had reached a deal with Anthem Properties Group Ltd. — a prominent developer in Coquitlam.

Key to his ruling is the fact that a developer backed out of the deal this past summer, which changed a number of factors.

So, these older condominiums are of interest to developers. This one failed but the economics of winding up condominiums follows along the same rational as buying and assembling older houses to build new condominium complexes.

We’ve since rented it for closer to market rate, and have both had wage increases.

Given the “economy” aka government of Victoria a lot of people will be seeing wage increases in the next 3 years. This is why I wouldn’t wait forever to buy, if looking to buy. I think the next 2 to 12 months could be an opportunity to purchase while interest rates are high and incomes haven’t seen multiple years of 3%/year wage growth.

If interest rates were to turn, combined with wage growth, combined with lack of inventory look out again.

Demolishing strata buildings only works in certain spots in Vancouver. For example, a developer buys a 4-story 20 unit building somewhere downtown or close to skytrain and replaces it with a 45 story tower.

To be the best of my knowledge a condo strata has never been terminated (also know as winding down) in Victoria. I’ve seen apartments demolished, but never a condo strata. I did see one townhome strata in Langford terminated but it had a massive surface parking lot and not that many units so made sense for the developer.

I can’t even identify buildings that are even remotely close to being terminated economically. Unlike Vancouver for the most part 4-story buildings in Victoria can only be replaced with a 4-story buildings.

It would have to be something downtown and there isn’t much downtown that is small with a decent footprint.

Maybe something like 1975 Lee Street (corner of Lee and Fort next to Save On Foods) in 50 years as they have a big surface parking area in the back? Right now it doesn’t work. If market value of each unit is 300k plus 20% premium to get 80% on board (you need 80% vote in favor to terminate a strata) = 360k x 41 units = $15 million. Not going to happen.

These are a gift to investors. And once investors gain control of the strata council, they can push the older residents out and pass a motion to demolish the building. Because the vacant land, once rezoned, is worth more than all of the condos combined.

Your whole line of thought is illogical and not well-researched.

It sounds like you live in a rent-restricted condo and, now that you understand that there is no grandfathering or other way out of the changes, you are creating paper tigers because you don’t want things to change.

There is no evil league of investors waiting in the wings, trying to take over your building and raise strata fees and then demolish your building (which would require the unanimous agreement of owners). In buildings where rentals are already allowed this has not happened. Very few units will turn over each year because very few units are listed each year. All owners have an interest in keeping strata fees low while doing necessary repairs. And in a time of higher interest rates fewer people are going to be viewing condos as having a reasonable return based on rents.

Demolishing old buildings and building new condos is not a good idea for the reasons that Leo has already set out. Building new condos on land formerly occupied by low rise makes much greater economic and environmental sense.

In my view, the new changes, while possibly raising values, are not what a lot of existing owners wanted because they prefer to live only with other adults who are also owners. I get that, but we are in a housing crisis and any empty units that are not being rented out because of rental restrictions are hard to justify imo.

Your view that people can just go out and rent something elsewhere is incorrect because of affordability and supply and there is lots of data on this. It is really hard for families in particular to find affordable housing, and condos are generally more affordable rentals than houses.

I agree with the changes that have been brought in, but I wonder what the backlash is going to look like – especially come election time.

An investor will upgrade the interiors to maximize the rents.

There is only so much rental demand. Putting more capital into existing rentals will not increase total rental demand, and will not increase total rental proceeds. Yes the rent of an individual unit may go up but that will be at the expense of another. Granted I’m talking about market rents, if someone has been paying below market due to rent controls and has to move due to a reno they are likely to pay more.

That goes for sale prices of properties too.

Anyone reading this blog can go onto Craigslist and find a rental immediately. They are expensive but they are available. Don’t like it then don’t move here.

If more people made the choice not to move here or move away then prices would come down. But it doesn’t seem to be happening.

Those that value living in a quieter complex over money.

Then they probably shouldn’t have gone to live in a condo in the first place.

See story on TC today: “B.C. man loses $385,000 bid for strata noise compensation”
https://www.timescolonist.com/bc-news/bc-man-loses-385000-bid-for-strata-noise-compensation-6142687

Also: 16. Age Restriction by-laws; 123.1

Only one person who lives in the strata must be 55 yrs or older. So, a grandparent(s) could have their 10 year old grandchild reside with them.

Fifty per cent of these variable-rate mortgage holders have already reached their trigger rate, according to estimates from a new Bank of Canada research paper published Tuesday. That share will rise to 65 per cent by the middle of next year as the central bank continues to hike interest rates to rein in inflation.
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“The bottom line is that mortgage costs for some Canadians have already increased, and they will likely increase for others in time, making home ownership more expensive.” Ms. Rogers said.
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About 670,000 variable-rate mortgages have been issued since the start of the pandemic, according to the Bank of Canada. Variable-rate mortgages accounted for around 50 per cent of all mortgages issued since mid-2021, compared to an average of 20 per cent in the years before the pandemic

https://www.theglobeandmail.com/business/article-variable-mortgages-trigger-rate-bank-of-canada/

Wouldn’t a solution be to change the age restriction from 19 to 55 then?

Those in the complex that are under 55 before the bylaw is enacted would still be permitted to live there under the Strata Act.

I don’t think the BoC cared too much about high prices until the rents skyrocketed.

House prices are not directly in the CPI, rents are. The BoC’s mandate is to target CPI.

Most major components of home ownership costs are in CPI, but land is notably excluded, because it’s not a consumable.

WIWTCM: “Taking away condominium owners enjoyment and privacy in complexes that they bought because they wanted age restrictions. While the next buyer is going to pay more for the condo or rented at rents that are unaffordable to the people that need housing most.”

Wouldn’t the reverse apply to the previously unrestricted condos? I would think they will go down in price to converge towards the prices of previously restricted condos. I agree with you on the privacy & enjoyment argument.

I wonder how the BoC defines balance? I don’t think the BoC cared too much about high prices until the rents skyrocketed. High rents are more of problem than high home prices. Their logic may be that if home prices come down then so will rents.

If rents came down by half then most of the social problems such as homelessness and the increasing cost of living for the most vulnerable low to middle income people will go away. Of course investors and those that rely heavily on rental income are not going to be very happy.

But they can always sell.

“Those changes take effect as soon as the bill is passed (expected Thursday). It will be interesting to see how quickly the market adjusts and prices equalize.”

@Leo – Do you mean they are expected to complete 2nd and 3rd reading by Thursday of this week? I may be misunderstanding. Thought it would take at least til the spring.

My friend’s in-laws owned a condo in Florida for years. They would go in the winter and my friend and his wife went every August. It was rental restricted and when his mother-in-law decided to sell, they sure didn’t get much for it, I think around $130,000.

All the government language I’ve seen so far is fairly timid, as they want to “encourage” and “provide targets”. Those mean nothing unless they plan to get serious with penalties and enforcement, which I don’t expect.

So you’re saying the poster that Leo has on his bedroom wall of David Eby with laser eyes might not be accurate?

BOC Senior Dep. Gov. Rogers: “We need lower house prices to bring the housing market back into balance. This may cause stress for people who recently purchased a home with a variable rate mortgage.”

Time to bust out the schadenfreude.

https://twitter.com/financialjuice/status/1595097185519112199

BOC Senior Dep. Gov. Rogers: “We need lower house prices to bring the housing market back into balance. This may cause stress for people who recently purchased a home with a variable rate mortgage.”

Patriotz stay on target. Stop getting caught up in the lesser details.
What is the intent of the legislation?
Will these changes meet these goals?

Even if they don’t, the intent matters. It also has a higher likelihood of meeting their goals than sitting on their hands and doing nothing.

Patriotz stay on target. Stop getting caught up in the lesser details.

What is the intent of the legislation?
Will these changes meet these goals?

It took 1 year but my partner and I now qualify for our own mortgage and have removed parents as co-signers. For backstory the only way we could qualify for our home bought in 2021 was with parents co-signing, which meant being on title and on the mortgage. We have a suite and at the time we bought it was rented far below market rate but the tenant moved out by their own accord before we got possession. We’ve since rented it for closer to market rate, and have both had wage increases. It was uncomfortable to go the co-sign route but we sure appreciated the help and it was our only way in. 8/10, would recommend doing this maneuver if your family dynamic can survive it.

“I’m not sure about the covenants in places in Broadmead or Uplands that restrict development or suites. The government has the power to remove these, but that seems heavy handed for the return, and unlikely. In fact, more new developments may move to implement restrictive covenants given the focus on density”

Right. It is settled law in BC that a covenant can’t override a land use bylaw. Having said that, there would be expected to be many legal challenges as the final decision is made by the court, not the government. I would expect the government to try to avoid getting into battles with places like Broadmead, Ten Mile Point, Uplands etc., mainly for political reasons.

The government isn’t going to get very far if they seem to be “ramming” unwanted policies into neighborhoods, covenants or not. All the government language I’ve seen so far is fairly timid, as they want to “encourage” and “provide targets”. Those mean nothing unless they plan to get serious with penalties and enforcement, which I don’t expect.

I don’t accept the housing crisis as a legitimate reason to amend the strata corporations bylaws. The vacancy rate is low but it is not zero. If you are moving to a rental they are available. You just have to pay the price.

My opinion is that this will only increase the prices of these older condominiums and they will be less affordable. These older condominiums are huge in floor area in relation to new buildings and the rents are going to be out of the reach of most young families. These 1,000 to 1,2,00 square feet condos with a little bit of cosmetic upgrades will rent in excess of $3,000 per month. That may mean instead of one or two adults living in the suites there are now three or four.

Then there are property taxes. They will increase as there condo increases in value leaving those that live on a pension with less disposable income to make ends meet.

These older four-storey condominiums are situated on large lots in premium neighborhoods in James Bay and Fairfield. The land should be re-developed to one or possibly two hi-rise towers. What the government could do is change the zoning and the developers will buy out the owners at premium prices. That will allow these seniors to move to newer smaller condominiums without having to take out a mortgage. We can accomplish more just by using zoning.

There are many ways a developer can do this. They can buy out the owners and rent the suites back to them on a month to month basis until it becomes viable to build hi-rises. That gives the seniors a big pay day and they don’t have to move. The seniors don’t have to worry about Special Assessments which is just throwing good money after bad in these old buildings.

We don’t need this draconian attempt at social engineering; which in my opinion will not work. This is just one person’s opinion but before the government enacts this there should be an economic study done. UBC has the Sauder School of Business with highly gifted people like Saur Somerville that can do this.

Maybe people who don’t like housing density and can afford to pay could move to Broadmead? The covenants there (e.g. restricttions on the use of each lot to single family use only, prohibitions against secondary suites or the use of the property for commercial use …) are not likely to be removed/changed, right?

https://broadmead.ca/broadmead.ca/uploads/2021/04/14bBugleFall.pdf

Marko, so what is your suggestion for strata fees since the per sq foot metric makes no sense? I assume you have a better plan?

Impossible to make it fair without making it very complicated. Too many factors, number of occupants, etc.

Something simple but more fair, in my opinion, would be 50% is paid equally by all as a baseline and the other 50% is paid per square foot ratios. Of course I hope this doesn’t happen as all my condos are super small.

I’ve also noticed a couple of local Victoria law firms that cater to “bylaw amendments.” They convivence stratas their bylaws need to be amended to “protect” them. They copy and paste their amendments from the previous building they worked on and send a nice 7 to 10k bill to the strata.

The council members are not savvy enough to clue in that these law firms are in the business of making money and suggesting bylaw amendments so they can issue invoices.

I wanted to use our strata gym during covid (in my opinion it is a private gym, not public) and I provided a medical letter from my doctor. My council said no. I filed a CRT claim and then my strata spent 7k on a law firm writing me absolute non-sense (the dumbest case studies that had nothing to do with my situation). I got to use the gym in the end but we as the strata were 7k out. Best part was the council wasn’t happy with the letter from my legit doctor which was only two sentences, they wanted my medical file while not one strata council member had a health care background. An ethical law firm would have suggested they let me use the gym on the basis of my medical letter and call it a day.

Retired people powertripping.

Anyway, I stand by my comment. In my experience you don’t find the brightest people on strata councils. Not to be confused with that they don’t care about the building, they do, they just aren’t smart. There are exceptions to every rule and there are some amazing strata councils, but a minority. The Parc (160 Wilson) for example, has had a great strata council for many years and is well run.

Don’t get me started on the stupidity of strata councils when it comes to EV charging!

Strata council members normally live in the building, and they normally care more about living than selling.

I agree, but that doesn’t make them bright. You’ll try to explain to people that rental restrictions decrease the market value of units and instead of coming with with an answer of “we don’t care, we live here,” they will come back with “my real estate agent told me rental restricted buildings sell for a higher amount because owner-occupiers take better care of the building.”

The funny part is when people go sell and you explain to them that their building is selling for 10% less compared to the non-restricted rental building across the street they are shocked.

The three year old building I live in the restrictions the strata has tried to bring in is just mind boggling. For example, one of many things they tried is max occupancy of two people for one bedroom units and max of four occupants for two bedroom units. So, a couple becomes pregnant in a one bedroom unit they are forced to move but a couple in a one bedroom unit can have two 150 lb great danes. Also, what I am suppose to do if I suspect there are 5 people living in the neighbouring unit? Keep a log of people coming in and out and then we launch an investigations?

You get a lot of retired people on strata councils that go on power trips as they have nothing else going on in their lives. A favorite past time of the owners in my three year old building is complaining about future development. We will ignore the fact we live in a three year old building that 5 years ago was future development.

After the fact strata councils bring in restrictions as most people on strata councils are not very bright.

Strata council members normally live in the building, and they normally care more about living than selling. ？ 😉

The only option I see the government has to impose their new rules is to ban the construction of new condos/apartments that have any restrictions.

Non-issue with new condos. In fact developers amend the BC Strata Property Act Bylaws to be less restrictive. For example, the Strata Property Act calls for 1 dog or 1 cat, Section Use of Property 3.4d -> https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/98043_18

Developers amend this to 2 cats and 2 dogs.

Why? Is it because developers love pets and care about people with pets? Nope, less restrictions equals hire market value; therefore, higher profits for the developer.

After the fact strata councils bring in restrictions as most people on strata councils are not very bright with poor common sense, from my personal observations.

The government has to come to the realization that there is such a thing as a grandfather clause. It prevents forcing people having their right to maintain their current lifestyle taken away by the whim of the government. People chose to live in a specific building with restrictions because that’s what they wanted, there was obviously a demand for such a product. The only option I see the government has to impose their new rules is to ban the construction of new condos/apartments that have any restrictions. Hundreds, maybe thousands of seniors choose to move to Victoria to get away from their own family.

In addition the province announced they will be setting mandatory minimum housing production targets starting with 8-10 municipalities in high growth areas of the province (municipalities in Victoria, Vancouver, Nanaimo, and Kelowna are likely early targets).

This is basically a non-story in my opinion. It is literally nothing tangible. Oak Bay will come back with sorry our aging infrastructure can’t meet these goals but we have a 10 year plan to upgrade the infrastructure, please send you BC Government advisor then to re-assess out situation.

One level of inefficient useless government trying to put pressure on another level of inefficient useless government will equal zero results.