December: The end of a tumultuous year
Well 2022 is history, so it’s time to wrap up how the year went in real estate numbers. Last week we did our annual predictions, and if you haven’t already, please put in your predictions for the market this year here. At 73 guesses so far there’s a wide range of opinions about where the market is going, but the median prediction is for:
Rates to increase only a quarter point to 4.5%.
Inventory to increase by 30% to 2200 properties in December
The single family median to drop 9% to $960,000 and the condo median to drop 6% to $500,000.
2022 was an unprecedented year, with prices dropping by the second most in history despite a strong economy. However that drop came after a particularly strong upswing in prices and strong sales at those peak prices, which means that overall prices for 2022 were still up substantially over 2021.
The 2023 BC assessments are out, and as expected they were a substantial bump compared to 2022 values. That’s no surprise, since the assessments reflect valuations as of the summer, when properties were still selling substantially above their assessed value. Since then the market has declined about 10%, with detached properties dropping from a median of 13% over assessment in July to 2% in December, while condos dropped from 19% to 10%, and townhouses went from 18% over to 4% over. Note that though condo medians and averages dropped sharply in December (down $30k and $70k respectively from November), that seemed to be mostly noise, with sales relative to assessed value essentially unchanged.
December brought about something of a shift in the market, with new listings pulling back and dropping below the year ago level for the first time since April. They came in at 10% below December 2021, which isn’t a huge deficit in one of our lowest listing months, but if it doesn’t reverse in the new year it could seriously impair the growth of inventory. Already seasonally adjusted inventory levels failed to increase in December.
Due to the same lack of new listings, market conditions improved slightly in December, with both the months of inventory and sales to new list ratio tightening up a bit from November. My one caution on these measures is that in low sales and listings months, the values become somewhat less stable, and seasonal adjustment can push the final figures one way or another depending on the parameters of the model (which varies a bit month to month as it is trained on more data). Suffice it to say though there was no evidence of a continued weakening trend in conditions in December.
Sales were unremarkable, with little change in each category in the last few months. So far no sign of increase in condo sales activity due to the lifting of strata restrictions.
As a whole, sales remain at levels similar to our last buyers market a decade ago.
With the Bank of Canada raising in December and bond rates creeping up somewhat as well, the cost to carry the median house bumped up to slightly above $5000/month again. Fascinating how consistent this has been since the peak of the market when many buyers clearly hit a payment wall Rising incomes may have slightly improved affordability, but it’s hard to say for sure with the increasing cost of other items potentially absorbing the difference. The key factor this year is whether rates and inflation will keep squeezing sellers, or if both will ease (even a cessation of rate increases would reduce downward pressure on the market).
Large size lots are not that unusual in Saanich. See those blue dots on map picture attached:
They have an usual 😉 large lot and they also went through neighbours and city council for some variances, so they have high ceiling one level instead of two.
A 1000 sq. ft. garden suite would require an unusually large lot, unless it’s 2 storeys, which wouldn’t make sense for seniors who don’t like climbing stairs.
New post: https://househuntvictoria.ca/2023/01/09/out-of-town-buyers-remain-active-in-victoria/
This seems to me an ideal case use for the garden suites – adding multi-generational space. Regardless of the cash flow or profit, the benefits to the family are worth it. And hopefully when it’s time to sell, another multi-generational family can benefit from it.
Great use-case. Garden suites are expensive but as someone else pointed out where else are you getting 1000sqft for $300k? Going to cost you nearly double that in condo form.
For 1000 sq your going to be around 400 grand not the worse if u own the land
Our next door neighbour (age mid 70) just finished building a garden suite and moved into it last year (2022), about 1000 Sq Ft in size and total cost (with in-floor heating, multiple skylights, a new big stone patio, and a brand new and widened driveway) was about $300K. Their daughter’s family moved into the main house.
Just for the construction for a small one, but then there are the city fees and things that crop up out of nowhere like a new driveway as the heavy trucks have destroyed the old one. But you won’t get the bigger rents either for a small one..
Uhhh u sure about that?? Last time I checked it was in the 250k range.
A garden suite will cost about $500,000 to build. That is 100 percent financed by remortgaging the property. The monthly rent as a single tenancy is between $2,500 to $3,000. That’s a skinny margin for error.
When the interest rate was half of today’s rate the numbers worked better. That was probably the last time you checked.
Please show me the economics, last I checked it is better to do that than buy a one bedroom condo for 550k and use that for a rental. This is assuming you have the appropriate property already.
I’m so sorry that you may become second-homeless.
They are if they’re housing other people. Travelling nurse doesn’t end up renting something else, other people that may have got together to rent a bigger place then have somewhere else to rent. More is more.
It is incredibly expensive to build a 400 or 600 square foot stand alone building such as a Garden Suite. That’s why most that I see are used as an airbnb or short term rentals to people, like travelling nurses, for at least the first couple of years. It isn’t economical to build a Garden Suite and then rent it out on a long term basis.
The argument could be made that renting to people like travelling nurses are not technically airbnbs as the contract may be more than a month but these Garden Suites are not helping those families that are looking for a long term rental.
May I clarify that: a secondary home in Greater Victoria is only for the rich. On price alone.
Our vacation home insurance in Sooke area went up this year from $2500 to $8000 per year. Many insurance companies have got out of the business of covering seasonal homes in BC, leaving little competition in the market, so rates are sky high. With spec tax on top, a secondary home is only for the rich.
freedom_2008 yes you are correct. I figured we were firing on different cylinders and I wasn’t sure how to correct the course lol
@Ukeedude, from you have stated below (to back up your claim of “Air BnB is a result of the housing crisis”):
“I am a house designer. My clients tell me they need the bnb suite to make it pencil out. This isn’t a few people I design for its every single one of them. Additionally I personally built a b&b to help me pay for the ridiculous construction costs. I couldn’t wait to get out of that situation and no longer run a b&b.”
I thought you were referring a “bnb” as a Airbnb short term-rental suite in in house which may be legal in Tofino, but never legal in Victoria, so there is no such thing as “shut down illegal bnb suites”.
Unless he’s switched, Leo’s insurer is TD Meloche Monnex.
Yeah, I’ve been toying with the idea of shutting off the main water valve next time we leave on vacation.
ok recap. Basement suites if used for bnb purposes are illegal period. Secondary suites used for long term rental in homes can be legal if permits are in place but can also be illegal if the owner doesn’t have a permit for it.
Looks like OSFI is going to be announcing some new rules w/r to mortgage underwriting. I’d be surprised if it isn’t a big nothing burger though.
Maybe. Airbnb which is just a booking platform covers all STR. There are dozens of buildings in Victoria that are allowed to be rented short term on sites like AirBnb, Marko listed them all off in his post below. Those are legal and they are suites with full kitchens. As far as zoning on Residential properties there is no secondary use for STR allowed. you can use R-zoned properties for secondary suites as long as they are permitted which means they need to be up to code as if they are duplex. I believe if you have a legal suite your house it will be listed as duplex on BC Assessment. I would bet money that there are more illegal secondary suites than legal ones and if you had beef with a neighbour who had a secondary suite you could check on BC assessment and find out in less than 30 seconds. Those “illegal” secondary suites would be shut down if reported. Hope that clears up my ramblings from earlier.
No, my definition/understanding of word “bnb” is the same as AirBnb short term rental, if you read all my posts today. Long term rental suites are not “bnb” to me, be them legal or not, in basement or not.
What is yours wrt “bnb”? Maybe we are talking about different things?
There are hundreds of legal bnb suites in Victoria. Regardless Im not sure what point you are trying to make. What I said is still true. EDIT I think you are referring to all suites in basements are illegal bnb.
There are legal rental suites but there is No legal bnb (i.e. short-term Airbnb/VRBO etc rental) suites in Victoria.
the city will shut down illegal rental suites just as fast as illegal bnb suites. They may turn a blind eye but if a complaint is registered and the city does not act then they are liable if a fire occurs and someone dies. Suites have minimum code requirements of 45 minute fire separation. I would be surprised if any illegal suites meet that requirement for fire membrane penetrations, egress and fire rated doors and drywall. At the very least the suite is shut down until it is up to code and that isn’t cheap and the tenant is out on the street while the renovation and permitting occurs which we all know is going to be minimum a year if it all goes smoothly.
City is doing active enforcement against illegal AirBnB including taking hosts to court and winning. https://www.timescolonist.com/business/victoria-cracks-down-on-illegal-short-term-rentals-4870227
Once the province steps in and forces AirBnB to share data with the cities (as they’ve promised), the enforcement becomes trivial.
Right. The suite rent may not be that much different with burners instead of a stove. The cost of building a garden suite is much higher, but monthly rental to nurses is good for the city and us!
Does anyone have the sale price of 1836 san juan ave? Thanks
I see it different. They will shut down the airbnb and then you rent on a month to month basis say to travelling nurses. With the unauthorized basement suite they will make you remove the stove and you lose all of the rent income.
The two are very different. The city might come to inspect the long-term rental suite but will shut down the airbnb suite. The long term rental suite are so common that people don’t normally complain unless it has crappy tenants who keep disturbing the neighbourhood, but that would be more of a police issue.
What happens to vacant land values/teardown prices in a large earthquake where there is a lot of destruction? An old house in the core currently 70-95% of the value would be in the land so if your home is a total loss and you have no insurance, and vacant land prices hold (I don’t know?) wouldn’t you only be out like 5%?
Good point, that short term rentals are not permitted for stand alone suites. Now let’s talk about the real world. How many basement suites in Greater Victoria are not on permit? Did that stop people from renting out their suites? How often would neighbors complain about others when they are doing it themselves?
Your neighbor complains about your garden suite airbnb then you make a complaint about their unauthorized suite. Who has more to lose in this Tit for Tat confrontation.
From the sounds of it, they’re in the process of ratcheting up coverage/prices (at least Western Coast is). I asked some very specific questions of them since I don’t see total loss being a realistic scenario. Total loss due to fire should be incredibly rare for new builds (in the city). Total loss due to earthquake – maybe – but as Marko states, there will be bigger issues at that point.
I’m more interested in water damage and tree strike damage. Will see what they say.
We had a 3-month house swap with an ETH professor in Zürich. We found his request on craigslist and checked out his credentials online (and his academic talks on YouTube), and he came to stay with us for one night before the swap. We did find the freezer covered with ice inside and some small dents on wood stair steps afterwards. But otherwise we were fine.
Note we told our house insurer about the swap before it started and they were fine with it (no extra fee).
Are you sure? When I realized that our house sits on bedrock and asked to remove the earthquake years ago, our insurance price dropped by about 40%!
$1500 is a good price. Ours (with Belairdirect) in 2023 is $1310 (21% increase from 2022, and it was $463 in 2018 after skipping out earthquake policy!), with $5K deductible but without earthquake. Do you mind sharing the name of your insurer? Thanks.
I feel the exact opposite. We always have someone stay in our home when we travel, usually a family member. However, we have also used home exchange services for this. I would rent it out for longer periods of time too using a service with reviews but can understand why some would hate to do that. I have less attachment to home as castle idea than others.
My parents went on vacation once and three days in the water line to the laundry sprang a leak. It was checked by their friend as required by insurance so they were covered, but it ran for two days first – flooding the entire basement.
True, but for now it’s been quite cheap. My last insurance bill was $1500 including earthquake.
I never had earthquare insurance on my SFH either. My thought there was if my new SFH suffers damage in excess of the deductible I have other things to worry about like searching for dead family members living in older housing stock.
I always maxed out deductibles for water and everything else to lower the premium. Dealing with adjustors/insurance is such a massive pain that anything under 10k I rather save the premium every year and deal with it myself when it happens.
These short term vacational rentals are not allowed by the city bylaw (and could be reported by the neighbours or other renters).
Short term rentals of standalone suites are not permitted in the City of Victoria unless someone is on vacation temporarily, so this won’t happen.
Airbnb at least the guest has reviews (and you can reject if not enough reviews or not happy with them) vs long term tenant. Personally I also don’t have anything worth anything either. I guess they could jack my TV that I bought for $299 at Costco and the next most expensive thing would be my V7 5 year old Dyson with a bad battery.
Bringing up the house insurance topic again.
Insurance provider has asked for an appraisal on one property. Fine – they are covering the cost of the appraisal. I was asking about my primary residence (a different house), which has “guaranteed replacement cost”. When I queried the agent on this, it means insurance will cover 125% of the insured value (10% deductible).
I asked them how I should determine the correct value (I suggested they send the appraiser) and they stated:
Agent said they are starting a push to increase the ‘value’ of all properties in Victoria to around the $350/ft^2 area rebuild cost, starting with rentals and primary residence they will start soon. I already don’t have earthquake insurance since my place is fairly new and seismically engineered, and the only other total loss I can think of is fire. Makes me think liability and water (not overland) are the only 2 things worth having insurance for.
Anyone have any thoughts on this?
After reading through the comments it got me wondering how any new legislation to provide for missing middle housing might be used as airbnbs as it is more lucrative to build a garden suite for short term rentals. I have come across garden suites that are used for vacation rentals. Those areas that are appropriately zoned for the MMH are also in areas of the city that would appeal to short term stays.
Well yes. Only time I’ve ever had a breakin (in Vancouver) was during the daytime when I was at work. I feel a lot safer leaving the house empty than renting it to God knows who.
Agreed. Just one can’t rent it out for 2-3 weeks at a time (as @James stated) when the condo Strata only allows rental for 30 days or longer.
Month to date;
Sales: 26 (down 44% same week last year)
New lists: 190 (up 67%)
Inventory: 1617 (up 136%)
Note few days so the %s are a bit wacky
new post tonight.
I personally don’t think Airbnb is a substantial housing problem. New buildings don’t have such zoning; therefore, the number of Airbnb units will stay fixed and will just drop over time as a % of overall supply.
At the same time I think they aren’t a super profitable full time business (in Victoria). Might be different elsewhere if you are getting $600/night.
and I do think it is a great platform for renting out your place while on vacation yourself. What is the alternative…you leave your place vacant?
None. Just in case someone might think that transient zone is for rental only.
If it is easy money offering an attractive ROI then people will do it.
and if you are using management there goes 20% off that right off that bat not to mention all the other expenses I mentioned below. $67 @ 365 nights a year to a long term tenant is a good alternative to running an Airbnb, imo.
Unless I am missing something I am not aware of any non-fractional ownership non-time share non-other bs in Victoria where you can’t use it as your principal residence?
My bad, I thought you were buying as an investment. In your scenario makes perfect sense. I don’t have trasient zoning in my building but Airbnb Long Stay is now a popular thing. I made $6,200 for a 32 two night long stay earlier this year. Went really well, guest left me an excellent review. I made a YouTube video on it -> https://www.youtube.com/watch?v=bb9YhZNg6SE&t
Never going away and leaving my place empty again, too much $ to pass up.
Here is an updated list of transiet zoned buildings if you want to do less than 30 days.
1) Janion- 1610 Store / 456 Pandora
2) Era- 787 Yates
3) Union- 517 Fisgard / 528 Pandora
4) Falls- 707 Courtney
5) Oriental- 562 Yates
6) Leiser- 524 & 534 Yates
7) Astoria – 751 Fairfield
8)Mermaid Wharf- 409 Swift
9) 595 Pandora – 595 Pandora
11) Vogue -599 Pandora
12) Cityzen- 613 Herald
13) Legato -960 Yates
14) Palladian- 1602 Quadra
15) Monacco – 610 Johnson
16) SoHo- 848 Mason
17)Sovereign-608 Broughton
18)Corazon-732 Cormorant
19)Juliet – 760 Johnson
20)601 Herald
21)535 Fisgard
22)Soma – 732 Broughton
23)The Peninsula-29 Songhees
24)Morley Soda Factory – 1315 Waddington Alley
25)1407 Government
Victoria banned B&B in new buildings before prices skyrocketed. Seems like there are other factors involved wouldn’t you say? You can keep chasing the boogeyman but it won’t fix the problem. I got involved in politics to try and help with creating more affordable housing rather than trying to stuff people in everyone else’s basement.
You should re-read your prior posts.
I am a house designer. My clients tell me they need the bnb suite to make it pencil out. This isn’t a few people I design for its every single one of them. Additionally I personally built a b&b to help me pay for the ridiculous construction costs. I couldn’t wait to get out of that situation and no longer run a b&b. Also note that Port Alberni had some of the highest house price gains on the island and is not a bnb hot bed. I also have a planning background and 25 + years as a real estate development consultant. I guess also being a city councillor and talking about this issue with residents gives me a bit of insight into real world view on the crisis. It may be personal experience but it’s not pulling things out of thin air.
@Ukeedude, Do you have any facts/stats to back this up? I would think most Airbnb owners are more well off than the regular homeowners or renters. Maybe there is something in Tofino/Ucluelet that we don’t know about?
Note One can rent out suites in their (SFH) homes to long term renters, instead of illegally running short term AirBnbs.
I can’t even come up with a response to such twisted logic.
I would say Air BnB is a result of the housing crisis rather than the cause as people find ways to be able to afford a house of their own. In the grand scheme of things there aren’t enough bnb out there to move the needle on affordability. You could say the same thing about Hotels being the cause since they are essentially whole apartment buildings full of nightly rentals. This excuse is popular because it offloads the responsibility and burden of housing people from governments to individuals. We have a wage crisis more than anything.
@James, most, if not all, downtown condo strata don’t allow short term (less than 30 days) rentals. One might need to buy in one of those 15 transient zone buildings to be legally renting out for 2-3 weeks at a time, and you are allowed to use it as principal residence as well.
Marko- the reason I ask is that I am at sea for 2-3 weeks at a time and home half the time . An Airbnb would make sense for me to occupy whenever I’m at home but not sit empty unutilized when I’m away
Profits aside, I thought one can’t run short term rental as business outside those 15 condo buildings in transient zones, not in SFHs/suites either (occasionally when residents temporarily away is ok, but not as business). Although some people do that illegally and count on their neighbours’ goodwills so no one would report them.
Also won’t the owners of these AirBnb condos need to pay BC vacancy tax, even if they use it part time themsleves for (less than 6 months) vacation?
Per BC government:
“A home that is not a principal residence must be rented for at least six months per year to be exempt from the speculation and vacancy tax. Short-term rentals for periods of less than one month do not count towards the six-month total .”
Won’t be buying a condo beyond those numbers anywhere. I have better places to put my money with no hassle. If someone thinks otherwise, it’s their money.
Any info on how many people lot their shirts during the pandemic travel ban? I’m sure lots of places sat empty for long periods of time.
Many listed at 100-150/night. My guess would be netting close to market rent after vacancy and expenses and allocation for time, except in the summer when it would be higher.
Not worth it for money for me, but some people are scared of having long term tenants or they want to use the space themselves from time to time ie. a vacation home.
Can’t, I don’t own one, my info is second-hand, all I can tell you is someone I know well manages many of them in downtown and says the clients’ net net consistently exceeds normal rent. I realize that sort of second-hand information isn’t very useful, so just take it as a heads-up if you or anyone else wants to dig into it with a third-party manager more seriously. PS in your list of expenses, add GST and cleaning fees, these are significant.
Care to post actual numbers on a 1-bedroom Airbnb condo so we can see how much sense it makes?
Marko, the numbers still make sense on Airbnb with management fees where you just collect your cheque, assuming you get a competent manager. Also, in some ways there’s less wear and tear on the unit, for example almost nobody uses the kitchen, and people aren’t moving furniture in & out. And BTW Whatever, if doing an Airbnb, you may not even want the cheap furnishings many people use for their airbnbs – I believe styling makes a big difference for rent ability in these units. I do not own one, just know someone who manages.
Guess you won’t be buying in Victoria.
You can long term rent a 1 bed for approx $2,000/month or $67/night @ 365 nights/year.
I’ll take my $67/night @ 365 and not do s*** all. I Airbnb’ed my personal condo while I was away earlier this year and made 6.2k/month but I would never try to make one of my long term rentals an airbnb…..value my time too much.
Barrister, for revenue properties such as triplexes, they are selling between 20 to 22 times gross annual income.
In your example of $2,000 per month that would be between $480,000 to $528,000
Aren’t Airbnb’s one cause of the housing crisis? I guess the problem will never be solved.
That’s not stats really, just finance, and I would not pay more than 150x rent for a condo, which is a gross rental yield of 8%. Net rental yield even at that point most likely below cost of financing at current rates. If you want to bet on rates going back down your view may differ.
Increase in the vacancy rate does not make a rent peak but we’ll see
Since we have a number of stats wizards on here what would is the maximum you should pay for a one bedroom assuming rent of about 2k a month, Assume that there is no real appreciation over the next ten years.
Already called the rent peak 3 months ago.
Interesting point about the ratings not being transferred to the new owner. I’ve always heard that new vacationers rely heavily on the ratings and comments when selecting where to stay. Of course the condo may have repeat vacationers that would like to stay in the same condo once again.
Starting from scratch will take time to build a good rating so I don’t know how much one may rely on the past rental history of the airbnb. This makes buying an airbnb different from other businesses with land and improvements in that you are not buying a client base or goodwill. It sounds like all your buying is land, improvements, and chattels such as furniture, linen, etc.
The gross income from an airbnb business is most often higher than a month to month lease. I have come across some vacation rentals that would typically rent as a single month to month tenancy at $3,000 per month but as an airbnb receive $9,000 and more per month during peak seasons. Of course your expenses would also rise due to a higher turn over rate.
If your buying a business then an accountant will separate the real estate value from the inventory and goodwill. Goodwill being the catch all for anything left over after real estate and inventory is deducted.
Ideally you would like to buy an airbnb that has an upside to increasing bookings while increasing the efficacy of management that would result in a higher net income.
You might want to check with your lender to find out if they will lend on the value of the business or if they only lend on the value of the real estate. Otherwise you might have to come up with a higher down payment. And also with your insurance agent to make sure you have adequate coverage from any accidents.
If you pick a good location then you should net more money than renting as a single tenancy.
“Or are you buying just the unit itself with none of the above?“
Just the plain unit I figure most people will just go by pictures and area rather than look at reviews in high season when everything is sold out. With borders fully open we may see a lot less tourists going forward so it’s hard to predict. I think I’ll just monitor prices and how much booking places get for a year or two
Great post!
In terms of buying a legal Airbnb or any investment property, do your own analysis using a spreadsheet. https://www.biggerpockets.com/blog/real-estate-investment-analysis
Going forward I wouldn’t be surprised if, even when markets stabilize a bit, appreciation stalls for a number of years – like 5-7. With this in mind, it is very likely that you’ll have to carry negative cash flow on anything you buy now (with a mortgage) for an extended period of time. I would make sure you have done the math for this. it may still be worth it, but could cause you hardship unless you have a buffer.
Seeing more apartments with vacancies. Curious if the vacancy rate will be up in the new CMHC data
James, since you are looking at Airbnb’s
When you’re buying do they include furniture, linen, web site and goodwill from the ratings?
Or are you buying just the unit itself with none of the above?
Do any of you see investment potential
In a downtown apartment yet or should I wait ? There’s apartments in Calgary that collect similar rent at half price to Victoria .
I’m Thinking a 1 bedroom Airbnb but they are still 550kish
And it’s not just Calgary…
Calgary is losing ‘greenness,’ Statistics Canada data show
https://docdro.id/YICROLw
https://www.theglobeandmail.com/canada/alberta/article-calgary-is-losing-greenness-statistics-canada-data-show/
Might be behind a paywall but Sweden has the most rapid house-price decline in the world at the moment.
Reasons identified are high personal debt, a high proportion of variable or short-term mortgages, and a very rapid previous run-up in prices – almost doubling over the last ten years. Reminds me of somewhere.
https://www.telegraph.co.uk/property/house-prices/inside-swedens-collapsing-housing-market-how-britain-could/
There have been some layoffs at firms such as Amazon (which I consider more a retailer than tech), Meta (Facebook), Netflix (again not really tech in my view) which overreached trends that emerged during the pandemic. Plus Twitter which we all know about. These are the companies you hear about in the media.
But what I consider the real tech sector just keeps humming along. Consider this article which is just three months old:
https://www.forbes.com/sites/stuartanderson/2022/09/27/tech-job-openings-remain-high-but-congress-is-not-taking-action/?sh=722b37344e38
Yes. It’s just measuring total number of people (age>=15) employed in Canada. We are at a record there too at 19.77 million (more “good news”). And that’s 325,000 more employed people “pulling the economic wagon” in Canada than last year. So if 300,000 people retired from employment, and 200,000 employed people died, we would need to have found 500,000 new workers to take their place. And yes, we did that, and better than that, by 325,000. Which is impressive. And the participation rate is up to 65.0%, also impressive given the retiring boomers. For perspective, participation was also 65% in the 1980’s, and has stayed in a tiny range (65-67%) since then.
Biggest thing holding us back is is shortage of workers. Close to 1 million vacant jobs. Anyone who wants a job gets a job. Of course all of this points to more inflation and higher rates.
Does the 325,000 jobs added factor the 300,000 people who retired and the number of jobs left vacant by attrition (death) last year?
There were 325,000 private jobs added, and these were employees.
We add about 2,000 physicians per year in Canada. But few physicians are “employees” (they are self-employed) so you’re maybe going to get at most 500 physician employees out of that. A drop in the bucket to the 325,000 jobs added. The statcan chart I posted below actually showed a loss of jobs in the health care sector, so that means it lost jobs.
Medical doctors would be considered professional private sector, yet receive most of their income from government funds.
From what I’ve heard, there have been massive job cuts in the tech industry, primarily in the U.S. Why is Canada different?
Nope. The increase in white collar jobs was $25 billion in 2022 (325,000 jobs x $80,000 total cost per employee).
Total science spending was $14 billion by government, and didn’t increase at all. (See chart)
Most other government spending is on social programs and health care.
This chart is federal government spending on science and technology. Feel free to examine the details here https://www150.statcan.gc.ca/n1/daily-quotidien/220606/dq220606a-eng.htm
Give it a rest Frank. There are few scientific jobs, properly speaking, outside of the government and educational sectors themselves (which get counted as public sector in the first place). Completely dwarfed by professional and technical in the private sector.
They may have been private sector jobs for an industry that gets massive government funding. For example, most scientific positions rely heavily on government funding.
There’s good news there too. These are private sector jobs. In fact, all of the job growth for the last month (112,000) and last year (325,000) has been private sector. Public sector has been flat. That’s what we like to see!
Here’s statCan explaining it. https://www150.statcan.gc.ca/n1/daily-quotidien/230106/dq230106a-eng.htm
“ Private sector drives employment growth in December
The number of employees in the private sector rose by 112,000 (+0.9%) in December, the largest increase since February 2022. This brought the year-over-year increase in private sector employees to 325,000 (+2.6%).
In contrast, the number of employees in the public sector and the number of self-employed workers were both little changed on a monthly and year-over-year basis in December.”
Tenure and mortgage status
Were these professional white-collar jobs private sector or government?
It’s nice to see statCan point out the YOY trend, where +120,000 “quality, white collar” jobs led the way … statCan: “Professional, scientific and technical services contributes most to employment change from December 2021 to December 2022”
It’s easy to avoid the noise and breathless reporting – go to the source and look at the StatCan long term unemployment rate. Here’s their latest release.
https://www150.statcan.gc.ca/n1/daily-quotidien/230106/dq230106a-eng.htm
Can you spot a trend?
Still unsure? Hint: look at the statCan label…“[dec. 2022 Canada] unemployment rate [5.0%] nears record lows”.
BC [4.2%] and Victoria [3.4%] unemployment trends are the same “good news” story as Canada [5.0%] … only better!
The only thing that would cause a recession is if our spend happy government stopped their excessive spending habits, or addiction. Billions will be spent on our “health” care system, and it will still be broken. Billions more on social programs, and it will still be broken. Canadians have to come to the realization that the government can’t solve all our problems and focus on taking better care of themselves. We have become over- reliant on government help, that’s not good.
Media breathlessly reporting on noise will never get old: https://househuntvictoria.ca/2020/02/18/whats-really-going-on-in-the-victoria-economy/
I agree with the rates part of that. I’m not expecting price drops, but you may be right there too.
The BOC will keep hiking, those believing we’re “at the bottom” and rates will start “their decline” are out to lunch. I’m sure we’ll be seeing rates in and around 7% for most of 2023. House prices have just started their declines IMO, the next 6-12 months we will see the “true market”.
Maybe some ocean-front empty lots sold for below assessments, so they adjusted similar properties land values. Rather than BC assessment making a sudden call on “erosion”.
Pundits see near-term recession as less likely….
https://www.bloomberg.com/news/articles/2023-01-06/more-lenders-see-bank-of-canada-hiking-after-blowout-jobs-report
“This was an incredibly robust report. All the talk that we’re hearing of Canada being in a recession or heading into a recession, those talks are pretty quiet today,” James Orlando, a senior economist at Toronto-Dominion, said on BNN Bloomberg Television. “Across industries we’re seeing job gains.”
Land assessment drop in a assessment-up year is rare (unless there is a lot subdivision).
Both sides of the road saw assessments drop. Nothing dramatic, maybe down 1-2% on overall assessment. Likely reflects recent sale prices in the area prior to July 1. Prior to the run up, those high-end properties frequently took years to sell, and prices were all over the map. In the wild run up (2020-21), they got caught up in the frenzy, and some were selling within a day. No more.
Not mine more like a riddle
I post, then read my post, and edit, typically for typos or formatting. Because it looks different than it does when typing it up on my iPhone. That takes place within 5 minutes of posting. If you want to reply to my post, and somehow you’re bothered by this, wait 5 minutes. “Dad” replied instantly (he’s a government worker 🙂 ) and I hadn’t even seen his post when I was adding to my post.
Btw) I assume that many people here do this. And it’s why most posts look nicely formatted.
Coastal erosion? Some even cut down the trees/bushes on their land edge so they can have better ocean view, sigh …
Not all BC Assessments are up. High end waterfront properties in Queenswood, Arbutus etc have seen a significant drop in their land values.
Not sure why.
LMAO, don’t drink too much or else you’ll be spending even more time editing your prior posts.
According to a Reuters article I just read:
‘Money markets now see a 75% chance of a 25-bp rate increase in January, up from roughly 60% before the data.’ (referring to jobs data)
Have to wait until inflation numbers come out on the 17th but 25 bps wouldn’t surprise me. 50 would. If inflation numbers are weaker than expected and are continuing down I would suspect they hold steady.
Not posting all day & night. I’m away on a long beach vacation. Different time zone.
Still have plenty of time for sun/beach/swimming/guitars & rum/coke.
Hey VicRE…Wish you were here! LMAO 🙂
I think the rate hike might be 50bps.
What does everyone think the January rate hike will be?
No kidding, Patrick literally posts all day and all night so why doesn’t he just think it through before posting. Clearly he has the time
Excellent article. Thank you.
Hey man, just taking a page out of the Patrick playbook:) Have a good weekend.
Thanks for the discussion!
Not the main point, which was that there is significant month-to-month variability, which is evident in the chart you posted. Thanks for the discussion!
Edit:
Can you please not edit your comments after someone has already responded? Just make a new comment.
Labour Force survey revisions are too small to even talk about as something material. You can see 20 years of them here. The dark blue and light blue lines the original vs the revised. Let me know if you still see anything supporting your point about the significance of the revisions.
In the last two recessions in Canada, employment wasn’t a lagging indicator, it was co-incident.
Here are the dates of the last two recessions, and you can see the onset of the recessions co-incident with the rise in unemployment.
—- October 2008 – May 2009.
—- March 2020 – August 2020.
There is considerable month-to-month variability in labour force survey data, so trying to forecast it seems pretty pointless. A bit like trying to forecast the median house price in a given month. LFS data is also subject to revisions down the road, so the most recent data is almost like a preliminary estimate. And like inflation, employment is a lagging indicator.
Facts FYI: BC Homeless Counts by location, prepared by Homelessness Services Association of BC, Dec 2021. It is a bit surprise that Nanaimo has almost as half as much homeless people as in Great Victoria …
Also an article from yesterday’s Capital Daily “Tale as old as time’: Debunking pervasive myths about homelessness in Victoria “.
See:
https://www.capitaldaily.ca/news/debunking-pervasive-myths-homelessness-victoria
More good news… Victoria unemployment also fell to 3.4% , far lower than Canada average 5.0%. (Only Lethridge and Quebec City have lower than Victoria). And Victoria’s unemployment was down —0.9% YOY.
https://www.timescolonist.com/the-mix/heres-a-quick-glance-at-unemployment-rates-for-december-by-canadian-city-6336200
Lots of good news coming out maybe a 50 point hike coming
https://globalnews.ca/news/9389503/consumer-insolvencies-november-covid/
“ Consumer insolvencies in November 2022 were still below pre-pandemic levels, down more than 20 per cent compared with November 2019.”
From: https://www.blogto.com/real-estate-toronto/2023/01/toronto-scammers-sold-house-owners-out-of-town/
They even used a real estate agent and listed it… Should be some interesting liability all around with the transaction.
https://calgaryherald.com/news/local-news/alberta-insolvencies-on-the-rise-as-covid-relief-comes-to-an-end
Victoria council asks staff to look at short-term measures to create more housing supply
https://www.timescolonist.com/local-news/victoria-council-asks-staff-to-look-at-short-term-measures-to-create-more-housing-supply-6336035
Good news on the jobs front. Canada “crushes” the jobs report…5,000 jobs were expected for December, but 104,000K were added. For perspective, based solely on population that would imply 1,000 jobs added in Victoria in just the last month.
https://www.bloomberg.com/news/articles/2023-01-06/canada-labor-market-crushes-forecasts-with-104-000-job-gain
Now Jan 25 rate hike consensus has flipped from a “pause” (no hike) to a 25 basis point hike (67% chance according to swap rate predictions).
You are correct. The recreational properties that are excluded need to be outside of a census agglomeration (>10,000 pop) or census metro area(>100,000). Note that this is a complicated definition and doesn’t include everything with pop>10,000, but is well defined and tracked by statCAN (see link)
Here’s an official map from statCAN. If the property is outside these, they may be OK for foreigners to buy.
And a list of every BC town/city that is affected by the ban. For example, Whistler isn’t in the list, so it’s a YES for foreigners to buy a chalet (whew!). Similarly for places like Tofino or the Gulf Islands which are foreigner-friendly. But it’s a big NO to a foreigner buying in Prince Rupert.
https://www12.statcan.gc.ca/census-recensement/2021/geo/maps-cartes/referencemaps-cartesdereference/sgc-cgt/files-fichiers/2021-12572-01-B.pdf
Does the ban include commercial property? What about an apartment complex?
“Buildings containing more than three dwelling units “- you can drive a convoy of Kenworths through that one. 10-4 good buddy.
The quoted text is expressly not part of the regulations, rather part of a “REGULATORY IMPACT ANALYSIS STATEMENT”. Appears to me they are talking about the scope of the exemption for properties outside of census agglomerations or census metropolitan areas. Neither the Act nor the regulations refer to recreational properties per se.
The same document says “clarifying the treatment of specific types of residential property under the Act by setting out an exception for recreational property and clarifying the application of the prohibition to vacant land in limited circumstances;
And the cbc article says “ Buildings containing more than three dwelling units, and recreational property — such as cottages, cabins and other vacation homes — will also be exempt.” https://www.cbc.ca/amp/1.6693875
Right. Though the most recent Hoyes homeowners insolvency index (Oct 2022), shows that only about 3.3% of those 200 Victoria insolvencies in q3 (67/month) would be expected to be from homeowners. https://www.hoyes.com/press/homeowner-bankruptcy-index/
That would be about 7 in 3 months, or 2 homeowners per month in Victoria declaring insolvency (bankruptcy or proposal). Leaving the other 65 insolvencies/month in Victoria to be non-homeowners.
These are still tiny numbers, though are very likely to rise this year.. But so far, still tiny (~2/month) for homeowners. Numbers that small could be from anything, (job loss, illness, divorce etc).
It is very very sad. Your feelings are a totally understandable response to the situation and one that shows a good heart. Take care.
Recreational properties are not explicitly excluded, but the ban does not apply outside of census agglomerations or census metropolitan areas.
So Frank’s example doesn’t work.
I don’t see the exemption for recreational property
https://canadagazette.gc.ca/rp-pr/p2/2022/2022-12-21/html/sor-dors250-eng.html
It says “Some stakeholders raised questions or made proposals related to the exception for recreational property and the application of the prohibition to vacant land. In response, the Regulations contain clear definitions of “census metropolitan area” and “census agglomeration” and associated federal reference materials.” so do they just mean anything outside at census agglomeration (cities of at least 10,000) is exempt?
Thank you Fern.
I also recognize that I shouldn’t speak in such general or broad terms about people.
My comments arise out of complete frustration and despair.
Thank you,
Are recreation properties excluded from the foreign buyers ban? Does anyone know the wording?
Proposals back up to pre-pandemic levels. Bankruptcies not yet
Regarding the foreign buyers ban: Exactly what defines a recreation property? A waterfront $6 million spread in South Oak Bay might fit the bill for a wealthy foreign buyer. Given that the ban was conceived by our government, I’m sure there are loopholes you can drive a truck through.
I feel this way too, but your compassion gives me hope. Thank you for caring so much about others less fortunate. We’d have a better society if more people cared like you.
A few buyers in Vancouver potentially frontrunning the foreign buyer ban (last reading Nov 2022)
The “India” immigration numbers weren’t at all directed or relevant to my discussion with you. The only comment directed at you was to explain your PRC diplomatic disputes comment, which you have (rudely) declined to do. No problem, have a nice day.
This seems like a weird off topic tangent. Best to leave it there I think
Well, it’s a comments section on a blog, it’s only going to get minimal focus and energy, there’s a lot things to get done in a day… You get what you get… Can’t really anticipate a secondary meaning that someone might want to make up.
Yes very good, but the comment was in relation to the numbers seen from the PRC. Never asserted that India wasn’t the leader. Again grabbing things not stated to distract from what was actually stated. You’re quite the red herring generator today.
Well, how about you explain what (if anyone your statement means then, in relation to the discussion about chines immigration numbers to Canada.
Umm really: “ Not mention the diplomatic disputes are going to pour water on the PRC being a major source of immigration numbers”
For both immigration and students, the leading source country into Canada by far is India.
India is at least twice as big a source as China or any other country,
As seen on charts for students and immigrants to Canada by country, where you can see how India is the leader, by far.
Anyone here plan on moving to China? No? Same with the rest of the world.
They post this nonsense every 6 months. Marketing drivel.
The Chinese government has control of the movement of money out of the country, or at least they think they do. They have also banned cryptocurrency.
Never said they did, that’s quite the creative paraphrase on your part to twist that context to fit your desired narrative. However, how Canada is perceived in the source country of potential immigrants does probably affect the numbers wishing to come.
LMAO but according to you and Frank, Chinese government has total and absolute control on how many people can leave China and come to Canada.
What was passed on to us at UVic was that the big numbers drop this year had more to do with IRCC being slow to process student visa applications than a drop in the overall number of applicants. Not saying anything about the rest; time will tell, one way or the other..
Not sure what led you to that belief. Chinese government has no say in Canada’s immigration totals from China. Your “diplomatic disputes” comment has nothing to do with it. The main factors that will get a Chinese person into Canada are 1. Young age. 2. Desired skills+education 3. Speaks English or French 4. Any work experience in Canada.
From: https://www.scmp.com/business/china-business/article/3205513/top-100-chinese-developers-saw-sales-plunge-40-cent-2022-property-crisis-deepened
From: https://www.cnbc.com/2023/01/01/china-home-prices-fell-at-faster-rate-in-december-real-estate-survey.html
So….. Folks from a real estate market in crisis are going to look to dump their money into another real estate that is in decline? Not sure that makes sense. Also, there’s a pivot on the economic security side of things to lessen the PRC’s influence in Canada that will likely lead to less direct investment. Not mention the diplomatic disputes are going to pour water on the PRC being a major source of immigration numbers. This is likely already being seen at universities with a change in source countries for international students.
LMAO, Frank said the only way people can leave China in the last two years was to jump off their balcony.
He also said they are all getting their money out through the thousands of crypto coins available. Even bigger LMAO
Yes, his site advertises $4 trillion in RE for sale (that’s trillion with a T). He mentioned that a lot of the listing are direct from overseas to the Chinese buyers. And if you watch the CNBC interview, he’s just reporting what he’s seeing.
The foreign ban doesn’t apply to immigrants (permanent residents). And he did mention that these people plan to be residents (home occupiers). As I’m sure you know, china is a huge source of immigrants for Canada and there are also 300,000+ that are already Canadian citizens living in china.
The foreign ownership ban also doesn’t apply to some foreign students and temporary workers. For example, If they’re been here for a few years already, they’re OK to buy. Details are more complicated than that, and there are a bunch more exceptions. https://www.cbc.ca/amp/1.6693875
Bottom line, if they’ve got enough cash to buy a house here, and want to immigrate to Canada, odds are high that they can (and should!) be accepted and buy a home here.
Regular readers of this blog will recall that last week Frank pointed out the coming release of Chinese and so they’re not surprised to see this confirmed on the article below “ This will be the first opportunity in three years for most Chinese to visit overseas real estate markets”
That of course excludes the people here that mocked Frank for that comment.
That quote comes from the head of a company promoting overseas RE investment by Chinese.
He didn’t mention Canada’s ban on foreign RE ownership effective Jan 1. Odd, since he claims that Canada is one of the top 3 destinations for Chinese RE investors.
https://www.nst.com.my/property/2023/01/867356/opening-chinas-borders-will-be-advantageous-property-sector
Get set for a “torrent” of Chinese tourists and real estate investors, to be unleashed to Canada, starting on January 8. And this come from someone who would know, namely the CEO of Juwai IQI. They are a major Chinese RE site that tracks interest from Chinese buyers. The three countries Chinese are headed to are USA, Australia and Canada.
https://www.nst.com.my/amp/property/2023/01/867356/opening-chinas-borders-will-benefit-real-estate-market
“China’s borders will reopen on January 8, 2023, turning the current trickle of Chinese travellers leaving the country into a burgeoning torrent of visitors, business travellers, students, and real estate investors.
“This will be the first opportunity in three years for most Chinese to visit overseas real estate markets,” he said.
He asserts that Juwai IQI data on Chinese buyer inquiries shows that Australia, the United States, and Canada were the top three destinations for Chinese buyers of real estate in December. “
In a follow up interview on CNBC, he said that most of these Chinese buyers are cash buyers and plan to be home occupiers.
Late to the party again Frank just like prices for houses and used cars. My insider contacts have told me that for some entry level service jobs they are getting enough staff now (at min wage), some I know are not able to provide enough hours for their staff now.
Sell a 1970’s crap house for $1,000,000, and buy a South Oak Bay house with a suite for $2,000,000. Sounds like a near even trade to me.
Wages could be a sticking point, seems like nobody wants to work for less than $25/hour, even entry level jobs.
Lumber has given up all the pandemic gains
Looking at commodity prices today, I can’t help but see the inflation rate going nowhere but down. Oil is below $75, down from $120, natural gas is 3.67, last time I noticed it was over $6. A milder winter is making a big difference. Certain foods remain high but with a few tweaks you can keep your belly full. Lower gas prices will eventually lower the price of food. High interest rates actually makes housing less affordable. I’m “dieing” (actual spelling dying) to see how this all plays out.
I think there may be good opportunities to upgrade this Spring. Sell a typical Gordon Head home and buy a character home with a suite in South Oak Bay just a few blocks from the water front.
I think of that as an upgrade. Might have to finance a small portion of the purchase but the rent from the suite will cover most of that mortgage.
The higher interest rate will mostly effect those that need a big mortgage.
So I expect some price compression in the upper and middle to upper income sector of the housing market. Not so much in the middle income neighborhoods like Gordon Head. Demand for middle income housing seems good. Starter homes and Upper Income – not so much
Definitely though I’m not sure it much impacts the market balance. One person choosing to upgrade is still one listing and one sale. If they don’t upgrade it’s 0 on both. Bigger impact would be people choosing not to sell to move out of town or into a care home thinking conditions will improve
You are probably also not dieing to take out a heloc at close to 7% to finance a second property either.
Wonder if this has an impact on new listings/people staying put as well. If you are looking at upgrading and your current mortgage is 2.5% with 2 years left you might not be super keen to go into a 5%er on the purchase.
I actually still feel that people don’t care for the homeless and no one is going to convince me otherwise.
Anyone who points to Pandora street and claims a success is living in a fantasy world.
More fundamental changes need to be done by governments otherwise everyone is running around spinning their wheels and a lot of resources are being dumped into a black hole with no end result.
In the long term, I believe that cities will rot and decay if our governments do not grasp the nettle and deal with this problem. I do not believe that they have the courage to do what is needed.
So…long term, people will leave.
I don’t think most people will agree with my thoughts on this.
I don;t respect Caveat’s opinion and remarks. We spent over seven years of our lives and tens of thousands of dollars of our own money on trying to do something for the homeless. When I walked by a person lying flat out on the sidewalk in a wet sleeping bag, I always think that it could be my son. The anger in my heart that society could just let them live like that was always overwhelming. We decided to move out of the city because I was so angry at our government for not doing something. Something real. Not band aide solutions or clam shell dinners in motel rooms where they took out the stoves.
It’s a living nightmare for people on the streets and for the families who can’t get help for their children. I know this from personal experience. There is no help.
I write this in a real estate blog because I do think it is relevant to how Victoria will do…so please forgive me if it seems off topic. It’s not.
For sure. People may choose to live/buy downtown for various reasons, but not because they don’t care about the unfortunate ones. We did buy a downtown condo (for a family member) and also have been donating to multiple local shelters since the pandemic start (including the crowdfunding for caledonia tiny homes village). Our help is small but we do care!
I’m not too sure about that. I can’t find any data on Grand Forks, but you may find this article on Salmo (!) interesting. Big price rises in out-of-the-way small towns and villages were a Canada-wide phenomenon and prices are coming back to earth rapidly in Ontario among other places.
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-salmo-bc-real-estate-housing-market/
What an ignorant comment. The guy who moves to Sooke to get away from homelessness and addiction decides that no one else really cares. Evidence for this (1) People buying places to live, (2) People going about their business.
The reality is lots of people care, many help out in little ways and some help out in big ways. People also feel a little helpless to change this because government action isn’t solving the problem and individual action seems insignificant to the scale of the problem.
“All out nuclear war”- that’ll stop global warming. There’s always a silver lining.
I just don’t know Barrister….I know that when we left Victoria in the middle of 2019, we did so because I found it too painful to continue stepping over or walking past the people on the street.
(As some will know, we had been volunteering at Woodwynn Farms, a therapeutic community for people with addictions etc) It was an incredible experience and very rewarding to watch the amazing positive changes take place in many young people. But…. because of the continual pushback and harassment by the local government and community, the main funders decided to pull out and it was closed down and sold to the government which then handed it back to the first nations people. As sad as it was to see it closed down, we also understood and could see great potential in the land as a place to provide further assistance to people who would benefit from such a peaceful place. In a real sense Woodwynn farms is still very much a spiritual and therapeutic place for healing…..which has it’s own satisfactions.
The lack of support for people on the street doesn’t seem to bother the people who are buying condos next to Pandora street or for people who live in Victoria who walk past the people huddled in wet sleeping bags. People buy them a coffee thinking that they are doing them a favor. In reality, 20+ cups of coffee a day for someone sleep deprived and doing drugs, is the last thing these people need.
I believe that Victoria will still hold it’s general value overall despite this.
The bottom line is that we are on Vancouver’s doorstep, where people can still sell their house (in the main core of Vancouver) and then buy a bigger house in the main core of Victoria and also still place a million dollars plus in their bank account.
I believe listings will not rise that much. Why would anyone choose to sell when there is still no real increase in supply or choices to buy out there? Add to that, the real possibility of the need to finance the new property at higher interest rates?
“Hunkering down” is likely the best thing to do if you can do so.
I make no valuable predictions though on where things will go.
Right now, half the time, I am wondering if we will not be in an all out nuclear war in the next year.
Deryk. is it possible the inner core of Victoria is simply less desirable than it used to be?
“I am super super curious to see how this unfolds in the next 6 months. I am predicting we hit 3000 active listings by May, but I also wouldn’t be surprised if everyone hunkered down, decided to stay put, and new listings came in slower than what I am expecting.”
It feels like the BoC wants us to belive they’re serious about keeping rates high for a while, but most people I talk to think they’ll be cutting them by the end of the year.
If they can all ‘hunker down’ and rent out a spare bedroom to make ends meet until then, I think listings don’t get too far above 2,000 and we all wait for the market to bounce back in ’24.
Could be. I’ll definitely look into this when we have more data.
Big drop on the median! I wonder if this had to do with an uptick in sales in previously rental/age restricted condos which are usually older/cheaper in general?
I am super super curious to see how this unfolds in the next 6 months. I am predicting we hit 3000 active listings by May, but I also wouldn’t be surprised if everyone hunkered down, decided to stay put, and new listings came in slower than what I am expecting.
The last 6 years have been slower in terms of new listings than the early 1990s.
How hard our real estate market declines depends on how much of the economy is tied to construction.
Those that live in small communities like say Grand Forks are not going to have a significant decline in their real estate market. Because they didn’t have a big rise either and never developed a significant construction industry.
The larger the size of the construction industry is in a city then the more severe the decline will be in prices.
You might counter that we have more government workers, retirees with pensions and paid off homes which should lessen any market decline. But none of those things matter as they are not in the game unless they are actively buying or selling. They are just watching the real estate game on their TV sets.
When Victoria was a retirement destination with little to no construction industry we were not as badly effected as say Vancouver. That’s not the case today. I would guess that one in every five jobs in Victoria is related directly or indirectly to construction today. There is not a chance that Victoria will not feel the next recession.
When I make a prediction on real estate for Victoria, I always think of the Main Victoria area. Not the “regional” area of Victoria. But I do understand why people usually mean the broader area.
It’s just me. I feel that when you do include the whole area, it becomes harder to estimate the worth of properties. Too many things to get a feel for. At least for me. It becomes less meaningful for me.
For example: I hear people talk about the average price for Vancouver…meaning the whole area including one of the islands etc. How do I get an average out of all that which is meaningful?
It’s much easier, and much more meaningful for me to consider the core of a city when I talk average prices for Victoria.
I was surprised to see that the current assessment on our old house in Victoria has not gone up as much as I would have thought since we sold it a few short years ago. At the time, the house in Sooke was a “significant amount” less than the house in Victoria. ($1.135M – versus just over 800,000.00)
Now they are both valued at the same according to the current assessments. (New, modern house in Sooke on a large lot.) That was a surprise.
(I do expect our house in Sooke to drop back somewhat. But nothing major.)
We actually saw it for 15 minutes yesterday at Ogden point (with proof 😉 , the sun was on our back in the picture).
I don’t think we’ve seen the full effect of the past rate increases yet. I don’t think many variable rate holders noticed much prior to the September hike, so that is only 3 months of ascending stress which most people should be able to take given the TDS and GDS their lender would have required. Also, current rates are not too far off from what people were stress tested at so unless they were faking incomes then everything should be ok.
Just a reminder that this is not a single factor calculation. We tend to look at interest rate hikes only in terms of mortgage costs whereas there will be multiply effects on housing prices. Job losses might be the single biggest factor in dropping demand if there is an actual recession/ Still Victoria is less prone to job losses than many other parts of the country.
On a different note we might actually see the sun today.
“(even a cessation of rate increases would reduce downward pressure on the market).”
I found this interesting. Prediction wise, that means downward pressure until 2 fed announcements into the future. It will be interesting to see if it works out that way.
Odd choice of words. For house-hunters it seems market conditions worsened slightly.
First