Changing rates and the market
The central bank is likely getting ready to hike again on Wednesday, with consensus expectations of a 0.25% increase in the overnight rate. However unlike previous rate hikes that directly increased both the lowest available rates and the stress test hurdle, I don’t believe this will affect the real estate market directly. The biggest impact will likely be accelerating a tsunami of refinancing as borrowers find fixed rates available for a full percentage point lower than what they are paying on variable. Get ready to wait on hold at your bank due to the always “unprecedented” call volume.
Of course the central bank is looking closely at inflation data, and will stop at nothing to drive it back to the target range of 1 to 3%. And if we break down where inflation is coming from, it’s pretty broad based with large increases in many categories.
However we know that everything is more expensive than a year ago. What’s more interesting is if prices are still going up, or if rate hikes and supply chain normalization have already done the job. While there are still things that rose in price in the last 6 months – most notably big ticket food and rent categories – the increases are a lot less, and there are a number where prices have pulled back as well. The massive exception is the category driven (partially) by rate hikes themselves: mortgage interest. Though we can argue about the definition of that category (it certainly lags), it’s clear that there have been real and large increases in the actual dollars households are paying on interest and it’s a significant force pushing up the CPI.
That raises the question: as the central bank prepares to hike again on Wednesday, are they considering the inherent feedback loop? And how low do other categories have to go to counter the impact of rates while returning us to the target range? I wouldn’t want to be in Tiff’s shoes.
We know that the big impact from rising rates has been on variable rate borrowers, where every rate hike is immediately passed on to borrowers. Whether those borrowers end up with actually higher monthly rates when hitting their trigger points, or just ludicrously long amortizations instead is not really material, as the interest costs need to be paid one way or another.
However for fixed rates which are two thirds of the outstanding mortgage book, it’s worth remembering that mortgage holders are still enjoying extremely low rates below 3%.
For the approximately 2% of borrowers that renew every month, the increased rate is a shocker, but as with variable borrowers stressed by trigger rates, fixed rate borrowers can also generally extend amortizations to spread the pain across a longer period.
For those wanting to stay on schedule, the renewal gap of nearly 2% combined with the average mortgage taken out in Victoria 5 years ago ($377,208) means a monthly payment increase of $332 or 18%. That’s sizeable, but given we haven’t seen the much more rapid rise in variable rates trigger a wave of distressed sellers, it seems that a much slower drip of higher rates to the fixed mortgage pool is unlikely to lead to a lot of distressed sellers either. Think of it more as a sucking of income out of the economy putting a drag on things. That drag is likely to continue, but with 5 year bonds dipping back below 3% which signal fixed rates in the mid 4s, it seems the time of continued rate hike shock is over.
Without more rate shocks, I suspect we will see more price stability than last year as long as unemployment holds up. The much anticipated recession and associated drop in employment hasn’t arrived yet, though if it does arrive it normally comes with a significant deterioration in the labour market. The BCREA wrote an interesting paper looking at the real estate market during recessions, and though there isn’t enough consistency in real estate impact to make any predictions, past recessions have come with increases in the unemployment rate from +3.1% to +9.8%. That would bring us from an ultra-low 3.4% to moderate or high rates of unemployment. So far – though provinces with high priced real estate may be more vulnerable – predictions seem to be for a relatively mild recession, but we know how successful those predictions have been in the past.
Also the weekly numbers.
| January 2023 |
Jan
2022
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 26 | 74 | 155 | 474 | |
| New Listings | 190 | 379 | 575 | 692 | |
| Active Listings | 1617 | 1670 | 1707 | 744 | |
| Sales to New Listings | 14% | 20% | 27% | 68% | |
| Sales YoY Change | -51% | -47% | -48% | ||
| Months of Inventory | 1.6 | ||||
Finally sales have started the upward path that we expect in January, though still lagging substantially from the frenzied pace of a year ago. There’s one additional business day this January, but if we end the month down around 40% from the year ago pace, that would put us at the slowest January since 2009 when there were only 247 sales (still a decent chance we also exceed the 294 sales in January 2013).
There’s lots of chatter online about the market picking up this year, for example here’s a thread of anecdotes from Realtors around the province. I’m not one to downplay anecdotes as they often signal market changes before they are visible in the data, but I don’t see a lot of reason to believe this is a significant change. In Vancouver the percentage of properties selling over ask in January is unchanged.
There’s a small uptick in Victoria, but given there have been so few sales I wouldn’t read much into that yet.
It’s certainly possible that we see some return of activity from previously very low levels. As I’ve pointed out repeatedly, with continued low inventory it won’t take much to stabilize the market, but I believe that still-poor affordability will put a lid on how much of a bump we’ll be able to see. I’d be pretty shocked if we saw an actual recovery with payments still this elevated. I suspect most of the excitement online is just people being fooled by the normal seasonal jump in the market that we see every year after the holidays, however the full month’s numbers will give us a better sense of whether there’s any substance to the murmurs.
Brief update on rental market before we get January’s numbers https://househuntvictoria.ca/2023/01/30/rental-market-remains-extremely-tight/
Coming shortly.
Gotta pump those tires: it’s getting really busy, buy now or miss out, take the discount while you can because the market is going to launch further out of reach! (sales is the game) Apparently, with just a signal of a possible pause on rates (not a decrease) magically changes those affordability numbers that were keeping some of the big buyer cohorts (FTBs-investors ) out, somehow now have found a way to buy. However, entering spring as inventory and selection grows, there will probably be a short lived burst of activity as those that have been watching (with the ability to buy) jump on improved selection that hasn’t been seen for a while. That will likely be short lived unless the affordability numbers improve.
They’re not, they’re a landlord with a very specific agenda to push so that the prices on their houses go up. Everything they say is just a smoke show for that.
Hey Marko, many thanks. Helpful and informative as always.
Just the ones that hired a ton of people. Looking at ones that didn’t (like Apple), and you won’t see any layoffs.
I can tell that expenses are being scrutinized at every tech firm currently and salary/payroll is definitely one of the first things looked at.
Not every major tech company. Just the ones that bet the farm on meta this and that. The nuts and bolts companies avoided this mentality to a large extent.
Also a lot of the outfits that the press describes as “tech” I wouldn’t give the label to in the first place, such as so-called fintech and last but by no means least, crypto.
Every major tech company fell into the same trap of thinking that pandemic economics was a new paradigm instead of temporary blip and went on a hiring spree. And no, boom and bust economic don’t please me.
If you are asking where to learn you probably aren’t in the 2% of savvy buyers that should be unrepresented.
As I noted best option for 98% of buyers, in my opinion, is secure a buyer’s agent that will offer you a kickback. There are quite a few platforms with lots of agents lurking such as Vancouver Island Housing Market FB page. We are also in a market where over 1,000 agents will not do one single transaction this month. Law firms are already slashing their prices for conveyancing so I would think there would be some motivated agents out there as well.
You can throw up a post along the lines of
Looking fo a buyer’s agent. Pre-approved for X amount with mortgage broker/bank [conveys you are serious]. Looking in X price range [commission varies based on price point substantially] in these areas for X product [some agent may not be excited about driving to Sooke, for example]. If you are willing to offer cash back on the cooperating commission please email me what you can offer at xxxxx@xxxxxx.com
Until later this year when we will be up every update. Context matters with these YOY numbers.
I think part of the reason behind this is lack of quality inventory so as a buyer’s agent every other offer you end up competiting in multiples. Also, when you go book showings a lot of places already have accepted offers secondary to the low inventory (if there were 4,000 listings most places would not have an accepted offer). It might make things seems busier than they actually are.
Translation: “Democracy. Pathetic.”
January 2023: Tech sector employment continuing to rise, with tech unemployment falling to only 1.8% in USA. And ManpowerGroup surveys show that tech will lead new hiring in 2023, with Canada leading the way, expecting to increase tech hiring by 34%. Biggest problem is a shortage of workers, not jobs.
https://www.computerworld.com/article/3542681/how-many-jobs-are-available-in-technology.html
“in the first quarter of 2023, the IT industry will lead all others in hirings, according to a new report from global staffing firm ManpowerGroup.
Geographically, North American organizations expect to increase tech hiring by 31%; US organizations expect a 29% increase in hiring and Canadian organizations expect at 34% increase. Large organizations with more than 250 are more than twice as optimistic as small businesses (with less than 10 employees) to hire in the coming quarter with outlooks of 29% and 13%, respectively.
Wanting to hire is one thing and actually being able to find tech talent is another. Currently, there is a dearth of tech talent available.
Despite strong optimism to hire, the industry faces a talent shortage where 76% of IT industry employers report difficulty finding the hard and soft skills needed, according to ManpowerGroup’s survey.
That’s what I figured when the tech people supposedly earning these high USD salaries stopped posting on here. Anyways, these companies are accountable to their shareholders hence the layoffs, Elon fired the first shot when he did what he did at Twitter so every other company is now on the hot seat.
None the less, it will be felt through the tech sector as far as employment and salaries go. BTW, insider contacts have told me that this is just the first salvo, much more planned this year.
Does it also please you “to no end” to have seen all the hiring that Microsoft has done since pre-Covid? The 10,000 cuts may seem like a lot but they’re still up 70,000 from pre-Covid, to 211,000.
The microsoft layoffs are already having an effect on my industry. It bothers me to no end that large tech companies will lay off thousands just because their profits are lower than their recent record highs.
Patrick,
Early in my email conversation with LTSA, I was given a link to a page about shutting the barn door after the horses have run. It states:
That’s a problem with monopolies like the land titles. If there were competing groups, they’d jump at the chance to introduce new features to improve the system, and have better features than the competition. Instead, they’re happy to pass the buck to another monopoly (the law society), that will probably also do-nothing.
Looks like what’s needed is government action to change the “mandate scope of the LTSA” so land titles can’t pass the buck. Seems like land titles is happy with their old methods, and needs a push to modernize to current technology and methods.
Having a suite providing monthly income is beneficial but could become problematic in the future. The income is taxable, monthly utilities would be greater as few suites would have separate meters, and the hundreds of thousands in taxes that might be incurred when your house is sold without the entire principal residence exemption. Something to think about.
A house payment of $5,500 a month can be affordable when you are getting $1,800 a month for a one-bedroom suite or 2,300 a month for a two-bedroom.
2000 will be a 2 bed suite so really you are looking at houses for 1.175 or less with a 2 bed suite. And also the monthly payments are increased since its now a $940k mortgage being carried assuming 20% down.
When it comes to house sales over the last three months, it’s about a 2:1 ratio for houses without a suite (median at $1,030,000) to houses that have a suite (median at $1,175,000). A house payment of $5,000 per month can be affordable when you get $2,000 a month rent for a suite.
It may become more affordable for those that own the home, if in the future they can have two suites instead of one. Not so much for the one buying the home as the price should go up.
Par for the course in terms of price discovery IMO. Everyone thinks they have a view on where interest rates are going and people’s behaviors are a reflection of that.
Bottom line is that for an 800k mortgage (assuming $1M house, 20% down, 30 year amort and 4.5% mortgage), you would likely need to pay ~$5k a month in housing related costs. That is not an insignificant amount in terms of after tax dollars given the typical HH income in Victoria and probably why sales are so low.
I’ve never seen such a disparity in anecdotes (positive across multiple markets) vs data (continued poor activity). Puzzling.
base effects will take over in the latter part of the year.
I submitted that idea to the LTSA suggesting that some REagents/lawyers had dropped the ball, and asked if the LTSA might change its ways. The reply was:
It would appear that sales being down north of 40 percent every month is becoming the norm
One factor that affects the rescission/unemployment situation vis-à-vis housing downturn is that the population demographics are different this time;. with so many boomers retiring and a relative shortage of working age people, a recession might not result in so much unemployment.
Hey Patrick, thanks!
Marko, any suggestions as to where to start learning how to be an unrepresented FTB?
I don’t know if we’ve ever (in modern times) had a sustained housing downturn without a recession+unemployment. If this time we somehow escape the recession with a “soft landing”, the housing downturn might be transitory. But if we get the expected recession/unemployment the housing downturn could drag on for years, fueled by rising unemployment.
My opinion is that the rate hikes take many months to percolated through the economy as only a small percentage of mortgages are renewed each month. The demand for conventional mortgages is way down and I suspect that most homes being purchased today have very large down payments that could have been from the sales of their homes in different cities. Out of town purchasers and high rents may be the reasons why prices in Victoria seem to be stable.
Mortgage renewals are not that much of a concern to me. Higher vacancy rates and lower rents however could cause a much faster decline. The 20 to 40 age group consist mostly of renters. If the trend continues for them to leave Victoria then that will have an immediate effect on a much larger group of home owners that rely on tenants to pay their mortgages. I’m not seeing any significant drop in rents at the moment and I won’t until I see vacancy signs start to appear in front of apartment blocks. The older apartment buildings are generally the least expensive units in a city to rent. Sometimes it is just a matter of looking for an increase in vacancy signs.
Kristan,
Marko posted some good advice as follows:
—-===
98% of buyers; try to secure an agent that will give you some sort of kickback
2% of savvy buyers; unrepresented
5-20% of sellers; mere posting
80-95% of sellers; lower commission full service
It doesn’t. My perspective remains that most people on variables didn’t notice much until the July hike and didn’t really get stretched until the Sep hike. So really its been 3ish months of trying to make the cashflows work which isn’t that long.
Duration matters more than the speed of the hikes IMO.
Hope you all had a nice weekend.
I was out of town traveling for work last week and caught bits and pieces of the discussion regarding realtor fees. What’s the conclusion when it comes to FTBs (yeah I have us in mind)? I’m happy to do some extra work and learning if it saves us several thousand dollars in fees and if I was pointed in the right direction..
As for absorbing rate hikes, I feel obliged to keep pointing to Leo’s affordability metrics for SFD. Going further up would be basically into uncharted territory no? Even the 80s boom here was relatively short-lived, and we’ve been stuck since ~ March.
How does that line up with conventional wisdom saying that the full effect of rate hikes takes a year or more to percolate through the economy?
https://www.cbc.ca/news/gopublic/hyundai-fire-servicing-sonata-1.6723164
Hyundai bursts into flames after routine servicing
If they had investigated this properly I am sure they would have discovered that this fire was ignited by a nearby Tesla.
Are you saying the effect of all the rate increases from march to Sep 2022 have now been fully absorbed in the Victoria RE market and the current pricing reflects that?
I believe most trigger rates were only hit at the Oct and Dec hikes.
More than that though. We’ve had a lack of inventory all of last year and didn’t stop prices from dropping. I think the difference is there’s no new shock and the last one (basically September’s rate hike) has been digested.
Lack of inventory was supressing sales last year. This year lack of inventory is supressing downward pressure on prices despite the massive increase in interest rates.
I am sure if an Oak Bay SFH family owner occupied home, for example, title transfered via fraud and the owners went to the media the BC Land Title would bring this in within a month or two. Most likely BC Land Title has a stance of why try to fix a problem that doesn’t really exist.
In Croatia where this is actually a small concern and my places have no mortgage/often vacant I placed private mortgages for 100 euros on my two properties with my cousin so it can’t clear title without him being involved in the discharge. Pretty sure you could do something here to safeguard if this is keeping you awake at night.
The way I am reading the below is two attempts on 3 million +/- transactions
I would have guessed that sales would have been more nut last year things were flying off the shelf. Next month (Feb) should be interesting/
If you spent $500 and pulled 30 titles in Oak Bay you could find 10+ without a mortgage.
Or you could just pretend to be a buyer and have your agent send you titles on listed properties and not spend the $500. The minute you list your property 1595 agents can see the title free of charge.
Can’t argue with that
I’m always surprised by how people freely give up information about not having a mortgage or how close they are to being mortgage free. Oak Bay properties being so expensive would be the hunting grounds for most fraudsters. A title search often shows when the last time a mortgage was registered. It’s simple math then to guestimate the size of any mortgage left on the property.
People should be a lot more guarded when talking to strangers about their wealth.
Month to date numbers:
Sales: 249 (down 43% compared to last January)
New lists: 741 (up 16%)
Inventory: 1740 (up 134%)
New post tonight.
5 year yields above 3% again. Doesn’t look like the bond market believes in any sustained duration below that point unless a recession actually happens.
Sometimes not even that is on the mortgage charge. I’ve seen them pretty much blank.
https://www.bloomberg.com/news/articles/2023-01-30/ford-cuts-price-of-electric-mustang-mach-e-in-response-to-tesla
Yup, price wars happening as predicted.
They can’t. They can however see the original mortgage balance and the date the mortgage was registered. Not hard to estimate current balance and equity from that.
@Patrick or anyone else,
.. as described in the CBC article…
“ So how does this actually happen? King says an organized crime group starts by looking through publicly available property records for a home without a mortgage — or a small one where there’s still a lot of equity left in the property — as a target.
How would someone legally be able to find out what’s left on a mortgage from publicly available records?
Well if that’s the best line of defense, that the “neighbours would be suspicious”, that sounds pretty bad to me. So if my neighbor’s weren’t suspicious, yah maybe they would get away with selling my house?
Well sure. But you can do that, and also secure the title to your home properly. And you should also make sure your smoke alarms work, even though chances of a fire are much less than getting a heart attack.
The point being, in the modern era, where I get three emails from subway after I order a sub sandwich to pickup, why can’t the land title office figure out how to email me when they’re about to transfer title of my property to someone else?
What about ownership fraud claims were title is actually transferred?
Is there an example of ownership fraud on an owner occupied home? How are agents going to show a home you live in? Even if you are on vacation and someone breaks into your home wouldn’t the neighbours be a little suspicious?
There is always a chance a plane crashes but I continue to take more than 10 flights every year and I don’t waste my energy on what ifs that are in the millions.
Odds of having heart attack very high so I focus energy on exercising every day and trying to eat half decent.
When someone posts on reddit/fb that their Oak Bay home was sold underneath them I’ll start paying attention. For the timing being I’ll follow the bulletins from BC Land Title.
CBC article…
“ Chicago Title Insurance Company has received more than 80 mortgage fraud claims since late 2019 — largely from the GTA and Greater Vancouver Area.”
Anyway, even it was one in a million, I wouldn’t be OK accepting a chance my owned house could be sold to someone else, and I might have to move out (and may or may not get compensated).
—-=——-====
For example, what safeguards are in place in Victoria to prevent this in 2023 ?
– homeowner with a fully paid off home goes overseas for 4 months. Rents his home out on air bnb (or Craigslist).to a single tenant.
– tenant is a scammer, and assume identity (ID fraud) of the homeowner, and sells the property. And vanishes with the cash. Homeowner returns to find the new homeowner living in his home, and all his possessions gone.
That was the first story that broke that made some sense. Still not the end of the world, seller will be compensated and hopefully they arrest the criminals.
Following that story a bunch of stories that don’t really add up followed….
https://www.cbc.ca/news/canada/toronto/title-fraud-toronto-condo-1.6720439
Current info – https://www.timescolonist.com/local-news/title-fraud-a-one-in-a-million-threat-in-bc-officials-say-6450867
They legally rented the property, posing as legit tenants. So would have got the keys from the owners or a management company.
.. as described in the CBC article…
“ So how does this actually happen? King says an organized crime group starts by looking through publicly available property records for a home without a mortgage — or a small one where there’s still a lot of equity left in the property — as a target.
From there, the groups who ultimately receive the fraudulent funds use stolen IDs and hire “stand-ins” to pose as tenants to gain access to the home, and other “stand-ins” impersonate homeowners to mortgage or sell it.
“A lot of times they’re petty criminals that are paid anywhere from $5,000 to $10,000 to stand-in and pose as the homeowners,” said King. “The people behind the frauds do not want to be front-facing.”
You’d need a current statement from them, not something from 2008. Maybe there was not much fraud then, but there is recently. I’m just going by the CBC article, quoting the land title insurance people, that say it has “skyrocketed” so much that he doesn’t know if they’ll be able to continue to offer this insurance. He mentioned most of it is in Toronto and Vancouver. So yes, probably low in Victoria. Is that a reason to forget about it and conclude that it can’t happen here?
I was shocked to see that no one including media contemplated this scenario when the stories started coming out of Ontario a couple of weeks ago.
As I mentioned previously too many details missing. Owner abroad for years, fraudsters obtain keys but not explained how they obtained the keys.
For example, if the fraudsters obtain a fob to the building and then had a locksmith change out the locks on an identified vacant unit you would think this would be in the the story “lobby cameras show fraudsters letting locksmith into the building” or something like that.
Lack or these details makes me suspicious in terms of did the seller somehow know the fraudsters; therefore, they had the keys?
I am interested to see the reports from the actual investigation as to how this actually went down.
sorry that wasn’t meant to be in quotes…
I receive weekly bulletins from BC Land Title, I can’t find an email received in the last two years where they quoted something like two in 10 million transactions but this is from 2008…
“The LTSA reports that over the past 18 years, the land title system processed 15 million transactions. During this time, two claims related to land ownership fraud were successfully resolved and only 14 claims related to mortgage fraud had been filed.”
I don’t see why BC Land Title would by lying. Can’t see how they could be lying, they would have to cook their accounting books re paying out the claims.
You also have to account for that land ownership fraud is likely higher in larger cities. In small places like Victoria everyone knows everyone. I know most real estate lawyer, most real estate lawyers know me. I know all realtors which wouldn’t be the case in Toronto. If a lawyer, for example, is dealing with a seller abroad he or she can phone me if any redflags to verify. I just rented a place to an individual that works at the same place another existing tenant works at. I texted that tenant to see if he knew the applicant and he did. Victoria is too small to manuever if everyone is doing their job properly.
Fans of Canadian economist David Rosenberg won’t want to miss his 1+ hour “breakfast with Dave” talk (Jan 2023).
He’s convinced that we are done with inflation, sure to get a recession with rising unemployment, and it will be worse in Canada for house prices and the CAD.
He’s a very likable, intelligent guy and presents his case very well.
https://youtu.be/QuNpDhgJJvA
Not sure how you came up with one in a million.
https://www.cbc.ca/news/canada/toronto/organized-crime-groups-behind-gta-home-sales-mortgages-without-owners-knowledge-1.6719978
“ There’s four title companies in the business in Canada and we estimate that industry wide, it’s easily $200 million, probably more, in fraud claims in the last two-and-a-half years.”
“ But with title transfer and mortgage fraud claims skyrocketing, title insurer John Rider worries about the sustainability of providing this coverage in the long-term.”
OK. Thanks a lot, Marko.
It doesn’t matter but if you want a copy you can pull it from BC Land Title (any memeber of the public can pull it). I have a professional account and it costs me $11 to pull any title, might cost a member of the public a bit more.
Don’t waste time with your lawyer, he or she will send you the title from when you purchased if they happen to have it on record. That is even of less use than the current title.
Thanks, Arrow.
I dusted off my file folder containing lawyer documents. One doc mentions that they will order a State of Title Certificate and forward it to me. However, I don’t see it here.
How important is this certificate for me to have for my records? Should I bother checking with my lawyer whether, according to their records, they sent it to me (14 years ago)? Or should I order one myself through ltsa.ca? Or should I not care because it doesn’t matter?
I hope that you represent the seller I end up buying from.
(Is that a BC duplicate title you have hidden somewhere?)
I like how people spend all this energy on a one in million scenario and then go eat chips or something else that increases their chances of a heart attack which is a much higher than one in a million scenario. Secondly, what are the outcomes if you end up in this one in a million scenario? Give or take, buyer gets to keep your house. You as the seller get compensated for your rental property. The authorities track down and arrest the criminals.
Yes, I’ve represented lots of sellers living abroad but there have never been any red flags on my end. Either I helped the sellers buy the property in person or if it is tenanted, I am picking up the keys at the property management company and meeting the tenants, etc.
The minute that Oak Bay home hit the market you could see something was off. It was 500k below market, no interior photos, etc.
A lot of these stories coming out don’t explain the details in full. Seller is out of country for years, unit/home is vacant (why is the place vacant for so long?), someone gains access (who gave them the keys/fob?), how does the listing agent obtain the keys/fobs? If obtaining in person, he or she should be IDing the sellers in person. If not obtaining the keys in person from sellers directly or property management company that is a huge red flag I would investigate. What is going on with the fintrac? (you have to ask the sellers for their nature of business or occupation). I always politely probe this a bit to make sure everything adds up. If they say anesthesiologist, for example, they better know what intubation is.
Like 100x things to lose sleep before this, at least in Canada. In my other countries with strong mafia influence yea you do need to worry about it, have a duplicate title hidden somewhere, etc. It happened to my uncle in Croatia. He had an extremely desirable piece of land with a teardown in the heart of Zagreb. In the family for 50+ years and he refused to sell it for the last 20 years, had huge offers (in the millions) for embassys including the US embassy but unfortunatey due to mental health issues kept turning down the offers. After 20 years eventually mafia broke into his house while he was working. Found title/duplicate title and transfered ownership. He was compensated but the lawyers also had ties to mafia and took 50-70% of the compensation.
Whateveriwant,
Yes indeed, a neighbour is who stopped the Oak Bay fraud attempt a few years ago.
It appears this tempest in a tea pot is all about the true owner’s name being fraudulently used on one piece of fake ID. Somewhere along the line someone is going to check a duplicate form of sellers identification before I lay my money down. I may be a country hick, but even a realtor or lawyer seeing a seller also in possession of a utility bill with the correct name would be better than money transfer based on a single piece of ID.
Arrow, I think Marko is the one to ask how that might not always be possible. As the seller may not be living in Victoria or is on vacation somewhere else at the time of closing the deal.
An imposter is not going to want to have a face to face meeting with your lawyer to verify their identity. Chances are the imposter is not using a lawyer. Those are more chances of being caught as your lawyer may be suspicious and have the police waiting for them when they show up.
Might just be easier to ask the neighbor(s) if they know the owner and for how long.
Your agent will pay for a State of Title search to show any charges against the property and the names of owners or the Numbered company that owns it. That is at a precise moment. Ten minutes later someone could register a charge against the Title. The Title Search is only good for that moment in time it is issued.
If you have taken out a Duplicate of Title then a charge can’t be registered until you bring the Duplicate back to the land’s office.
Whatever, You’ve been very helpful, thank you.
From what I’ve learned today, I will have my closing lawyer confirm dual verification of seller being the legitimate owner before proceeding.
https://ltsa.ca/property-owners/how-can-i/order-a-state-of-title-certificate/#
I use to work in the Land Registry in Vancouver for a filing company. It can be EXTREMELY busy. The documents being filed are huge and time sensitive and time dated. The legal assistants that are filing documents can get nasty if they have to wait to get their documents filed and paid. In the old days, it was necessary to purchase strata plans from the registry, you could feel the daggers in your back when you lined up to have them copied and then to pay for them as you were slowing things down. They detested new lawyers learning to do title searches as they were so slow. Add another layer of verification and the system that would require a response from an email, and it will grind to a snail’s pace and that will mean closing dates won’t be met.
And it isn’t there job. It’s the lawyers job to do before it gets to the registry. The lawyers are the ones getting paid the big bucks.
I doubt the fraudsters are going through the typical filing process, as too many people would need to be involved as well as large sums of money that has to be paid to register documents.
And we tend to think it’s the home owner that is getting scammed. It’s possible the home owner is in on it to scam the insurance company.
Nothing is going to wait until absolutely everyone has an e-mail or a phone. I assume it would work as an optional feature, where if you didn’t provide an email or a phone, you wouldn’t get that protection.
So it sounds like the land registry holds the title to my property, and that’s it.
Now what is a “State of Title Certificate”?
The LTSA seems to be the weak link in this track. If the Federal Gov’t & banks can implement dual verification requirements, maybe that Provincial office will, too.
Patrick the problem with the email is that some people don’t have an email address and others have changed their email addresses over the years.
Maybe one day everyone will be implanted with a micro chip at birth then we wouldn’t need cash or credit cards either. But I don’t think that’s likely to happen.
…..OR WILL IT????
Condensing a three hour lecture down to basic points. Canada had two predominate land title systems. Each province had one or the other system. Some still might still have the old English system
The old English system required a lawyer to search all of the past transfers on a property back to the original land grant from the Crown to establish if there were any charges against the Title still existing. That took a long, long time. Parts of the US still have that system and escrow can take months rather than a day.
And the Torrens system where the Registrar guarantees the Title at the Registry, unless a duplicate has been issued, and the lawyers no longer have to sift through dozens and dozens of past documents over a couple of hundred years in some provinces.
The land registry holds the Title to your property. A duplicate of Title is not a photocopy. Your lender can access your Title online to review so they don’t need a copy of it. You can remove your Duplicate Title from the registry but you will be strongly advised not to do so. If that document is lost then you will have an extremely difficult time to prove you are the owner. Anyone that has possession of that duplicate is now the owner. You need to put it in a safety deposit box immediately not in your desk at home. It’s kind of like a Bearer Bond who ever has possession of it – owns it.
You can transfer ownership without a lawyer at the land registry. With the Torrens system, vendor and purchaser can go to the registry and at the front desk transfer ownership in a half hour if there are no encumbrances. This is more common when a spouse passes away and the survivor with the proper documentation removes that person’s name from the Title.
Right, but worth it.
… an email from land titles “OK to transfer the title of your house to ______”? [yes] [no]
It could be done ahead of time (by lawyers) if timing was an issue. But the email is an extra layer of protection, as most identify thefts don’t also hack the email/phone.
Arrow an imposter would have to pay your deferred taxes so that the Title is unencumbered. The Title has to be free and clear of all encumbrances before it can be transferred to another person.
That adds one more level of complexity to their scheme which may make them choose an easier victim.
I would also be interested in more info on the most practical way to deal with this. I did look into putting the HELOC in place, which seemed like a great idea until I found out it would invalidate a mortgage-free discount on house insurance (worth about $300 a year in our case), even if nothing is drawn on the HELOC. Presumably the same result if I register some personal charge.
Can someone explain titles to me like I’m a 9-year-old? Does the Victoria Land Title Office hold my title? Does my credit union also hold a copy of title because I have a mortgage? Should I have a copy of title? If so, how do I get a copy?
That is a good point – so might not be worth the registration unless there was also an electronic consent to the change which might complicate conveyances.
Whateveriwanttocallmyself, you mentioned registering a charge against your own property and that sounds like the best solution. Do you think that BC’s deferred property tax arrangements against the title would be as effective?
Yes, and also an email or phone SMS that require pre-approved verification prior to any changes to title. Same thing that happens on many websites when profile changes are attempted.
This seems like a fixable problem.
Totoro, with our Torrens Title system a transfer of title can be done in less than a day. The home owner would have to act lighting speed quick to any electronic notification.
I would think an electronic finger print system that would be part of the Title would be a better option. They do this at Disney Land so that no one else can use your ride pass.
That would also reduce other types of crimes such as money laundering and straw buyers.
What this does not mention is that homeowners do not have direct access to this system – only professionals with a LTSA Enterprise account can do this – so a lawyer or notary – who will charge you.
I don’t know why every homeowner could not be given given opt-in electronic notification for a nominal charge when they buy a home which is registered as part of the conveyance. This would send them an email notification automatically when a notation is added to their property on the LTSA. It seems like a reasonable thing and does not require a professional to charge this service each time. Even though a fraudulent conveyance may be one in a million, the consequences are severe on the parties involved. Seems like a reasonable anti-fraud measure.
The cost to register a HELoC, is likely similar to a lawyer’s fee for what sounds like a more secure lock.
Do you think that BC’s deferred property tax arrangements against the title would provide an unwanted complication to would-be fraudsters?
Title insurance will protect you from loss, but not against someone from impersonating you and selling your property. You still will have to get the title to the property back and deal with the emotional trauma.
A HELOC will work as it is a charge against the property, then the lawyers have to clear the title from all charges before it can be transferred. Hopefully the lender would notify you promptly then. There is nothing stopping anyone to go to a bank and pay off someone else’s mortgage.
Or you can register a charge against your own property then your lawyer has to contact you to remove the charge. Those that are looking to commit this type of fraud are searching for properties that have a clear title or a small mortgage as these have to be paid out, by the fraudster, before the title can be transferred. Another way is to get a duplicate of the Title. This is an extremely important document. Immediately take it to your bank and put in a safety deposit bank. If you lose it, then you are in a world of hurt.
With a HELOC, the lender is going to charge you several hundred bucks to register a HELOC on the Title.
Very good idea, for 1. preventing house fraud and 2. emergency funds. Best to get the HLOC when one is still working, as it is harder to get for retired people without a good pension.
On the surface that would appear to be one, given there are about a million properties in BC. However like many other threats, it’s not random. Not likely to hit, say, the Empress. On the other hard:
As someone who’s done business with real estate agencies, I don’t really see it. Dealing with CREA for instance was pulling teeth. Months of back and forth just so that I can pay them money. Took over a year.
So what’s that 5 per year then?
Title fraud a one-in-a-million threat in B.C., officials say
https://www.timescolonist.com/local-news/title-fraud-a-one-in-a-million-threat-in-bc-officials-say-6450867
I have not really seen much of a decrease in prices (ignoring those three or four months of peak surge last year). I am sure that the Gods of The Stats have better answers than me but things seem to be either flat or maybe even notching up a bit.
Which is why they are called “laneway houses” over there. From what I’ve seen in Vancouver “garden suite” appears to be a euphemism for basement suite.
I’m definitely not discounting the importance of anecdotes and there’s a lot of chatter around the market heating up in other cities. I think it’s a bit early to tell in the data whether it’s real, but my prediction for the year was no more price drops for detached and I think that’s still the most likely.
Pretty much the situation we’ve been in for 6 months now. Buyers market sales but not buyers market inventory. The only reason we saw such a price drop is the epic rate hike shock. Without a further rate hike shock we don’t get another repeat of that. The wildcard is unemployment, but so far so good on that front.
Q. are buyer agent’s commissions paid by the home seller under serious threat in the USA?
There’s a big class action lawsuit in the US against various parts of the RE industry and agents. It is based on Sherman antitrust law and various state laws. Plaintiffs are seeking damages requiring repayment of 3X of any commissions received by buyer’s agents since 2015 for 100,000s of clients, which would be in the $billions, and wipe out many agencies.
Note: US competition/anti-trust law is different than Canadian law. And Canadian RE groups have different rules concerning buyer agents commissions and more permissive policies regarding rebates etc. So I’m not suggesting this is the same situation as Canada. But a ruling (or a settlement) in the USA would shake up buyer’s commissions in the USA, and may lead to pressure to do the same in Canada.
The basic allegation is that “forcing” a seller to pay a buyer agent commission is un-competitive and illegal under US antitrust law. And I put “forcing” in quotes, because it may also include anti-competitive behaviors that don’t strictly force, but do include things like agents not showing a home, or pressuring the seller to add a buyer commission.
The case got a big boost in Dec 2022 when it got set for trial which is expected to start in Feb 2023.
There’s an entertaining, well made video describing the entire situation here
“The Second Bombshell Lawsuit that Could End Buyer Agent Commissions”
https://www.youtube.com/watch?v=CL_7mw8ZGBI&t=123s
Pay me $40,000 per plan and I will stamp as many plans as you want.
It’s possible that we could see a market rally in the Spring that could bump prices up. Re-listing the property at a later date may work in the vendor’s favor.
I suspect that prospective purchasers look at the days on market and wonder why the property has not sold. Resetting the day count makes it a fresh listing and may draw more attention to property.
Quesnel is a hick-town, but their city council knows how to get housing on the ground quickly. Last summer they began offering 5 pre-drawn plans and permits within 3 days, all for free for the first few months.
https://www.quesnel.ca/our-community/news-notices/news-releases/save-money-and-time-quesnel%E2%80%99s-new-pre-reviewed-carriage
A private organization would turn around a permit in 8 business days with just as much due diligence, not that there is much in terms of due diligence as the engineer needs to stamp the plans so not like city takes any liability where it matters (the structure). It’s a small 2”x6” stick frame box using the same construction methods used for the last 100 years.
I would consider pulled a cancellation. It wasn’t cancelled. Listing expired and did they not extend and thus far they have not re-listed.
You will see a ton of cancellation and expired listings going forward compared to the last few years. I might have a few cancellations coming up shortly. For example, one scenario is sellers have a subject to the sale offer on a home and if their place can’t sell, or they are bumped via time clause by another offer, they just stay put in their place and cancel/expire their listing.
It’s the same in Victoria, close to 12 months to get a permit for a garden suite and around $40,000 in city fees before you can build. And that’s the rub, the costs to build make it uneconomical to rent on a month to month basis. You can double or triple the rent received if you could use them as short term rentals in order to paydown the mortgage faster. Then after a few years of mortgage paydown it would be economical to rent the suite on a long term basis.
Thanks Marko – so that just means it was pulled from the market?
The listing expired.
I don’t know about a rally but I’ve been following the sub 1 million core SFH inventory for last 6 months and it has dropped in less than half and not moving upwards to start the year. I know Leo will say it is still only January but I am just not seeing inventory in this segment trending in the right direction which is really surprising given how high interest rates.
We will end the month with sales similar to 2013 – 294 sales, but in 2013 we had 3,900 active listings and we won’t even be half of that this time around.
Hi everyone,
How can i get up to date information on what happened to a property? It was just pulled from mls but I’m just wondering why. I’m looking for 303 – 1015 rockland.
Thank you
I went onto a couple of web sites that build modular homes in factory. The designs and floor plans that they have are not in the allowable 400 or 600 square foot permitted garden suite. As these tend to be steel stud construction, I’m surprised that the don’t offer a two level design that could be delivered, stacked and bolted to each other on site.
Personally I would prefer a garden suite with a loft or a second floor. I see these in Vancouver as they tend to have much narrower lots than here. But Vancouver also have rear lanes in most parts of the city.
Re garden suites I’ve seen a really nice modular in Fernwood by West Coast Container Homes.
Leo is correct, muncipalities make everything a complete nightmare. Last I heard from clients doing garden suites in Gordon Head it was 9 to 12 months to get a building permit. City of Victoria is probably around there as well.
Not really too difficult to imagine. People read HHV for years, but they just don’t absorb anything.
I haven’t checked but the design guidelines in Victoria at least are extremely strict so likely wouldn’t be approved. There’s a reason that so few have been built. I do think there is an opportunity in someone creating a prefab unit that meets the guidelines, but I’ve talked to a couple builders about this and they think it’s essentially impossible under the current rules which vary based on neighbourhood and specific lot. One said they could get a garden suite landed here for $50k each but would need an order of at least 150, and the rules make this basically impossible
Garden suites need to be bigger couldn’t c myself living in a 1000 sq ft and I guess oak bay still not allowing them
Indeed. The term motivated reasoning comes to mind. It’s difficult to imagine being around HHV this long and not know what the point of MM is, and to then misrepresent it so baldly.
I wonder why home owners spend the time to build a garden suite on their property when they could simply buy a modular home and have it delivered. You would still need to provide a foundation and services for the modular home and the costs are about the same but you don’t have six months of construction. It would be done and rented in a month.
Or people who downsize from their core SFHs (both houseplexes and corner townhomes are required to have at least one adaptable dwelling).
Probably moved and vacated something from the westshore….
It is easy to criticize public figures/groups, but destructive criticism is only meant to silence others.
Wrt Lisa helps, I’d rather read the TC article below to get a better picture than listening to personal attacks. Thank you.
https://www.timescolonist.com/local-news/after-8-years-as-mayor-lisa-helps-looks-forward-to-quiet-time-6028481
In terms of B.C./Alberta intermigration, in the past number of years, is it correct to assume that, on average, higher net-worth individuals/households are moving from Alberta to B.C. and, on average, lower net-worth individuals/households are moving from B.C. to Alberta?
Simple numbers = bullshit. Ok. Not sure who you think is convinced by your attempt to explain that up is down.
Doesn’t matter, MM is passed, and clearly the province agrees with the direction. Neighbouring municipalities will adopt similar infill policies, and those that don’t will be overridden by the province at some point when they can’t hit their housing needs.
That means that MMH townhome owner or renter has vacated something else, likely cheaper, to move into the MMH townhome. This means that a cheaper housing unit is now available to someone. Or a downsizer who doesn’t want to live in a downtown condo can now buy a ground level condo in their neighborhood and sell their SFH.
Also, MMH inventory will age over the course of 10-20-30 years and become lower pricepoint inventory in the future just like 1990s townhomes sell for a lot less today than brand new product. Just like 1970s condos rent for 40% less than new product.
Finally, if we are going to talk about the environment to nauseam how can you possibly be against MMH. You can’t have it both ways.
I am a huge supporter of MMH but once again, I don’t know why the anti-crowd is upset/annoyed/etc. The anti-crowd for the most part will be 6 feet under by the time these MMH buildings are noticeable. Instead of stressing over MMH go play pickelball and walk your dog along Dallas.
Did the world end when garden suites were approved? Nope and very very few are being built.
I think people will be surprised how few MMH projects are built. The numbers are very tight at current teardown prices.
Missed this one lol. Oh yeah, I mean she had 8 years to get the MMH done and had to pass it off to her endorsement proxy council to pass. pathetic really.
Her track record as mayor includes tent cities, asking citizens to let homeless people come live in their spare bedrooms and standing by a police chief who was a total pervert, what a legacy to hitch your wagon to! Good luck with all that.
Lol duh. If it were rocket science there’s no way Homes For Living could get a bunch of simple minded parrots that read from written statements provided to them by their housing advocate friends elected to council.
It’s all lazy sound bites to get developers disguised as housing advocates into to getting what they want. UVic students even hopped onboard thinking this was about affordability. I’d hate to be the one that has to explain why the new MMH townhome they want to live in is ACTUALLY still owned by someone with more money than them (as explained earlier in this thread) and they now have the option to pay $4000 a month in rent or $6000+ on their mortgage.
Also, your distracting argument about the threshold of a +/- $1 million property being the difference between a 5% and 20% down payment is just more noise that fits your narrative based on current financial rules. When the financial goal posts move, so will the narrative. I feel bad for anyone that falls for any of this bullshit.
The latest term I’ve seen used is “equity-denied groups”.
Jesus, this isn’t rocket science
Median new construction single detached sale price last 6 months: $1.3M requiring down payment of $260,000
Median new construction townhouse last 6 months: $750,000, requiring down payment of $50,000
Both are suitable homes for families
Which one is more affordable?
Get stuffed lol, nice one. Because I’m not triggered by this conversation I won’t respond to that part, but…
Since my last post there’s now a different Vic city councillor that voted for MMH that is saying it will provide more affordable housing and Homes For Living endorsed them during the election. So now we have two housing advocates who are also two cogs in the fuck up factory that is Vic city council saying completely different things about MMH. I can spot their stupid from a mile out. These housing advocates really need to get their stories straight, it’s getting embarrassing!
Yes, Q3 2022 in BC was quite something, demographically. We had a migration out to Alberta, with a small overall net migration loss of 5,000 and still pulled off the largest net BC population increase for a quarter in history. About 53K people added to BC population in three months. Through immigration (+58k), with flat natural (birth/death) increase. Q3 is usually the biggest quarter for BC pop. Growth so we can’t annualize that. (If we did it would be something absurd like 4% growth).
https://www150.statcan.gc.ca/n1/pub/71-607-x/71-607-x2019036-eng.htm
Totally agree.
I like the way that developers in the US tend to specify it, which is by % of Area Median Income.
So they’ll say something like:
10 units affordable for households at 100% of AMI
10 units affordable for households at 70% of AMI
5 units affordable for households at 30% of AMI
No room for misunderstanding there, people can easily convert that back to real monthly housing costs
OK. I guess I’m just used to the “old fashioned” use of the term, where “affordable housing” meant low-income, subsidized or public housing.
I can accept what you say, in that the definition has changed, and it means more affordable housing.
I think it would be beneficial if people make it clear what they mean by “affordable housing” though. Because when city council insists that 10% of the units be affordable housing, we should know what that means.
I guess we need a new term for housing that low-income people can afford.
https://vancouverisland.ctvnews.ca/number-of-people-leaving-b-c-for-alberta-reaches-20-year-high-1.6249825
The article interviews some folks that moved.
Only one of many definitions. Every level of government defines it differently. As a term it is useless.
Why do they get confused? Homes for Living doesn’t exist to push MM. MMHI is one key part to make housing more affordable but obviously not the only one. We also pushed hard for the rapid deployment of affordable housing policy as well which is allowing non-profits to develop low income housing by bypassing public hearing. Next up, showing up to important public hearings like 1500 rentals at Harris Green, reforming parking minimums, getting rid of dumb discretionary design guidelines, more student housing, etc
It’s fun to touch a hot stove over and over again. Plus, you can complain how hot the stove is!
Thing is I don’t have three million to buy Telus stock and I am not going to borrow $1.5 million to buy Telus stock. I feel comfortable with a 1.5 mill mortgage on a sixplex so you can use a bit of leverage. But yes, at the end of the day the numbers have to make sense. 5% return on stable dividend paying stocks is literally zero work. Even a GIC is now 4.5%, or you spend that $ and 4 years trying to build a MM sixplex.
This is why I find it hilarious that people think COV owners will be selling their homes for $1.5 mill for the purposes of MM.
I think there will be a market for these, but I do feel like they are inferior to a larger condo building. Surface parking, unless on ground floor you have stairs/no elevator/probably much smaller windows/wood-framed, etc. They won’t have the “character” of the character conversions.
I am going to guess $800 a foot for the ground floor units with a patio and $700 a foot for the non-ground floor units (stairs, no elevator not ideal), with parking included. Rough ballpark. Obviously location will be huge. Sixplex units on Howe in Fairfield will sell for a lot more than a sixplex on a random street behind Hillside Mall.
I wouldn’t be surprised if the premium locations like Fairfield went with underground parking so everyone has parking. This is very common in Europe but the driveway into the parkade is usually very steep (you don’t have enough run on a small lot). In Croatia we call multiplexes “urban villas.” They are extremely popular. I am not a huge fan as you have to be involved in the strata with so few people and being self-managed. Personally, for myself, I prefer the bigger buildings where I don’t have to deal with the strata or talk to anyone. I cast a vote at the AGM from time to time and that is all.
Right, if you get about 150K/yr rent for this sixplex rental (say 2-3bed, 2-2bed, 2-1bed) after expenses, that would be about 5% return, lower than the dividend yields of BCE/BNS/RSI/TRP/GWO/… and with different income tax treatment.
But it is investment diversification for some, if you want a certain % of real estate (including your principal residence) in your total portfolio.
Yes, it is a good cross mix. What would the 1,000 square foot units sell for (I know you’ll be renting, but what could you sell them for)?
Here’s Wikipedia’s definition of affordable housing… “ Affordable housing is housing which is deemed affordable to those with a household income at or below the median”
OK. But people get confused when they see the term “affordable housing”
https://www.homesforliving.ca/
Each MM building will have two 3-bedroom units. Depending on the size of the lot this will most likely play out in the form of two 3-bedrooms and two 2-bedrooms and two 1-bedrooms or four 1-bedrooms. More than two 3-bedrooms and studios would also work but I don’t think builders/developers will want to do more than two 3-bedrooms.
If you ask me that is a good cross-mix. 500 sq.ft. can work for young single professionals, young couple professionals, single seniors (especially if ground floor), etc.
Sidewalk to nowhere a bit easier to accept on 6 units versus a small SFH home.
I wan’t something very specific so would rather build than buy otherwise I’ll just contine buying condos. There is a long list of things beyond what I already mentioned below. For example, absolutely no pumps (storm or sewer). I want everything gravity fed and this requires the right lot grade/service depth/design (no basement), etc.
Not interested in being back in Croatia fishing getting a text from property manager that a pump failed and something flooded. Just not a fan of mechanical devices even with battery and every single other back-up.
500 square foot units without parking aren’t the family homes that the homes for living have been advocating for.
Get stuffed with this bullshit. Townhouses and multiplexes are cheaper than detached homes which is the only thing that can be built on these lots currently. That means they are more affordable. No one (and certainly not me or homes for living) ever said they were going to be affordable to low income folks. This policy is about creating homes for families who can’t afford a single detached house. You gotta be living under a rock not to realize there’s also a huge shortage of homes for middle income families. Other housing reforms like the rapid affordable initiative are aimed at housing for low income folks.
Great move by Eby. Lisa knows exactly what needs to be done on zoning reform at the provincial level.
To making these MM buildings work on the average size lot there will need to be a few units under 500k. You need to throw in two 3-bed units which will likely have a min sq.m. requirement of something like 90 sq.m. which means you’ll need small units to offset to come in under max buildable area. Also, on a 50′ wide lot (majority of Victoria) it will be difficult to stuff 6 parking spots in the back. Realistically the 2 to 3 spots you have in the back you will give to the 3 bed units. Therefore, you’ll be left with some 500 sq/ft units without parking slightly under 500k which isn’t cheap but might be a good alternative to someone who doesn’t want to live in a downtown condo on Pandora, but rather in a residential neighbourhood.
This is assuming they are strata. So far everyone I’ve talked to wants to do rentals.
Given what the city put you through with the delays, consultants and the sidewalk to nowhere etc., I’m surprised that you’d go back for more. Instead of buying turn key. Is the developer profit worth it at the end of the day?
Exactly. And of course one less SFH after the hand deconstructed tear down.
You could probably do a 5,000 sq/ft SFH under $300/sqft but not a sixplex. COV will drive up costs with consultants not required for SFH, additional fees for services, civil work, etc., etc.
Problem is when you get consultants involved on a small project you can’t spread the cost over 100 units and a consultant isn’t charging 6/100th for a sixplex vs 100-unit building.
As I’ve explained before you aren’t going to be seeing multiple sixplexes on your street anytime soon. This will be a 10-20-30 year thing.
This is a very smart plan imo. I wish I had the skill and patience to pull it off. It sounds like an ideal solution for tenants and you.
It’s hard to say why NB does not keep it’s immigrants. (The government is trying to do studies to find out.)
I believe it is because of the French/ English language issue, but then I haven’t done such a study:)
I have heard a lot about the language barrier as being a problem for people. If you want to do many jobs you must be bilingual. (Even paramedics….which does makes sense actually.)
The main movement of people seem to be from places like Toronto who are just fed up with paying huge mortgages. and can move to NB and save hundreds of thousands of dollars in costs.
Our duplex in Moncton has been very kind to us as an investment. It’s run by a property management company and so it is stress free. Easy to rent out and excellent income. Taxes were never too bad and even the governments has made some changes recently. Heating is terrible… but again… nothing outrageous or different from anywhere else on the east coast. (tenants pay their own heat anyway.)
I would never move out there myself but that is because I can afford to live in this part of the world comfortably, with no worries.
Moncton is not what it used to be. The governments there are spending money to attract people back and that has been working in recent years. A lot of new exciting projects that will provide high paying jobs. (Such as the marine research facility I mentioned before.)
I post this only to let people know about some of the exciting opportunities in the Maritimes.
Can you not get under $300/sqft now. not saying it provides a different outcome to the analysis but construction costs are coming down. On the commercial side, some subs are much more negotiable now than 6 months ago.
Rumor alert: No idea if it is true, but again I am hearing from some people who have been rather accurate in the past that their is a push to tie rent control to the unit rather than the tenant. Personally I am taking that one with a bit of a grain of salt myself. (Ebby in the past said henwas not considering it at the time, but with politicians…)
My actually question is what would that do, if anything, to the price of condos? What that cause any hesitancy in the building of purpose built apartments.
Ya except current/market rents already account for that rise noted so its pointless. Thanks for the discussion
Regarding MM and uplift in land value….complete non-sense imo.
Personally, I am looking for a MM property as I would like to build a rental sixplex over buying 6 more investment condos. Reasons being is I can design a MM sixplex with no elevator, surface parking, no common areas (each unit has their own exterior door), I can probably engage a rental property management company for 7-8% management fee versus 10-11% on individual condos, I can design a near maintenance free exterior facade with larger roof overhands, etc. Essentially, the advantage is I can get 6 units without the strata fees and those his units would be simple to manage and the building would be almost maintenance free for the next 20-30 years.
However, the numbers have to work. I can’t go out and drop $1 million on a MM teardown, 5,000 sq/ft x $350 to $400 a foot is another $2 million. That is $3 million for 6 units. For $3 million I can go out right now and buy a mix of older townhomes and newer condos as everything is now rentable. For example, this townhome is under 500k -> https://www.realtor.ca/real-estate/25226065/6-3341-mary-anne-cres-colwood-triangle
Sixplex is realistically going to take four years….two years of paperwork, four months notice to tenants, 18 months to build.
To make the numbers work I realistically need to find a teardown between 700 and 850k tops. The absolute shittiest houses will see a bit of an uplift. The livable million dollar house on an average sized lot will remain at a million dollars.
People throwing out numbers like $1.5 million on Reddit and FB…..yea. Developer is going to pay almost the equivalent of three units for the just the land, on a six unit project. Not sure what people are smoking.
Closer to a 2 million dollar townhouse at this point.
If by “affordable housing” you mean non-market correct it’s not. But more housing makes market housing more affordable.
What? No it isn’t, there’s a Vic councilor that voted for MM on Twitter right now explicitly stating that the MMHI is not about affordable housing. This is what the housing advocates like Homes For Living lied and sold people on when in reality if any of this MMH gets built you’ll have to wait in a long lineup with lots of other people for your chance to own a $1 million townhome next to Barrister’s house.
Couple that circus with Lisa Helps and her fake housing PhD being hired as an advisor by Eby and it’s been quite the dog and pony show for housing this week.
it’s the quality of the data
As did you.
Rising rents are relevant to your formula for buying. “ Its a combination of price, rents and mortgage rates.”
If it isn’t relevant to you, just ignore it. The comment was intended for everyone, and Leo’s chart is on the same topic.
How Lisa @ Co will approach the missing middle problem has yet to determined. My guess is they will buy down the interest rates for home owners to develop large family sized suites along with a cap on the rents that can be charged for a decade. How that will effect prices if the home owner sells before the term is anyone’s guess.
Along the same line as MURBs done in the past when investors built subsidized multi-family housing that could not be owner occupied for the first ten years.
?? what does that have to do anything.
On the chart..
What’s with the quality codes on the units in the different cities?
Every city is “excellent”, except Sidney (good/poor)
Does CMHC have something against Sidney?
Occupied and vacant rents
That CMHC rent report showed rents up 20% on turnover.
Sticking with that?
Maplewood you mean? I said cashflow neutrality or better on 3 bed up and 2 bed down rental then I will be getting one and I was expecting it in Feb 2023. Its a combination of price, rents and mortgage rates.
You’ve been calling for things to cool down in Feb. 2023, allowing you to scoop up something.
Sticking with that?
He did call the massive downturn in 2018 though. :o|
To see if SFH owners have won the lottery, I think we will have to see what the missing middle is. I don’t see any benefit for adding suites to a single family house unless it will provide a minimum of three-bedrooms and 1,000 square feet. The missing middle is affordable family size units that will allow low equity families to live in Victoria.
Otherwise the home owners are just directly competing with developers that are already building small one and two-room units. The idea that you might have four or six suites in your home may be just a pipe dream.
The cost of adding a 1,000 square foot addition or raising the home by one storey is monstrous. You will most likely have to rent that three-bedroom suite at a premium to recover these costs. Ten years from now when the home owners have paid down their mortgage then these suites may have an impact on affordability.
(sarcasm alert)
Otherwise start tearing down the schools in Victoria and putting up hi-rises, because without families we are not going to need them.
LMAO, that’s the same guy who called 25bps rate hike and done in 2022.
Martin is implying the land lift is large and single detached lots will gain value.
Truth is we simply don’t know what the impact on land value will be, but now we have test and control groups we can track this and hopefully answer that question.
However:
1. Under the current system single detached owners are already winning the lottery and we don’t get any new housing out of it.
2. The City’s contracted economic analysis report concluded that the economic case for missing middle units was marginal. In other words the land lift was negative or low.
3. Land lift is how we get units built, and that is after all the whole point. If there’s no profit in it then people will just keep tearing down old places and replacing them with mansions.
Vancouver YouTuber Steve Saretsky is seeing a housing market rally, expected to “coincide with higher prices”
Have SFH owners in Victoria won the lottery with the new rezoning?? Long term will this drive up SFH prices? Interested to hear everyone’s thoughts.
Twitter comment from Michael Pelletier (regular finance commentator on BNN Bloomberg):
https://mobile.twitter.com/MPelletierCIO/status/1619063629877489665
Fair enough, I have zero idea what kind of jobs there are in Moncton. Anyone got some recent sales in Roya Bay? My realtor insider contacts are both on vacation currently.
That’s Leo’s version of “Thanks for the discussion” 🙂
This is offtopic and not going to lead anywhere productive further comments will be deleted
Right. And BC Health Paxlovid eligibility specifically includes people that “self-identify as indigenous”. That includes racially white people with no indigenous ancestry, that simply self-identify as indigenous. There are white supremacist groups (“white settlers”) in Quebec that self-identify as indigenous, and so they’ll be eligible for Paxlovid from BC Health. https://nbmediacoop.org/2019/11/22/race-shifters-white-people-who-identify-as-indigenous/
Mind you, many white supremacists are also unvaccinated, and anyone completely unvaccinated over 50 is automatically eligible for Paxlovid, even in perfect health. But no Paxlovid for a 95 year old BC vaccinated woman with heart failure and asthma (because that’s only two chronic conditions and you need three). Maybe it’s time for her to self-identify as indigenous?
If anyone is looking for a plumber for work around their house, I met someone at coffee this morning that is looking for work. Robb Bouchard 250-883-7590
Not not the same house. Rather a $200K house, which doesn’t exist in Victoria. 🙂
The East Coast has had much lower-cost housing all along, but has not attracted many immigrants. Immigrants looking for lower-cost housing have typically chosen places like Winnipeg. There would need to be a huge uptick in secure jobs suitable for immigrants in Moncton to see this change imo.
It is science-based. Indigenous people as a group, like seniors, are at 3.5-5 times the risk of serious illness should they get Covid than the non-Indigenous population. They also have, in general, overcrowded multi-gen housing in which transmission risk is elevated for all ages. https://www.cmaj.ca/content/cmaj/192/48/E1620.full.pdf
I recommend google. You’ll find a bunch of information on this.
If you believe the immigration hype then you have to assume that atleast a portion of the immigrants will be attracted to lower cost housing and would want to move there despite the harsh winters. So on a % basis it could very well outperform Victoria given how low the prices are to begin with (see westshore over the past couple years as an example)
A few things to keep in mind about Moncton.
Your 200k house will have a $4,218/year property tax bill. $200,000 in RE would cost you under $900 in property taxes here. This bill continues on after you’ve paid down your mortgage.
Your utility bills will be much higher. This also continues after your mortgage has been paid down.
Winter is long and storms are severe.
The average long-run appreciation rate in Moncton has been very low – which is why you can buy a house for 200k. This changed during the pandemic, but there is no guarantee this trend will continue. The average long-run appreciation rate in Victoria and a number of areas of BC (unadjusted) is over 7% I believe – might be lower going forward but I’ll be it exceeds Moncton’s.
If you have a pension and are fine with moving, the East Coast might be a good place to be able to buy a house and have more disposable income. If, like 1/4 of Canadians, you plan on using your home equity in retirement it might not be a great plan.
I never really understood the part about giving priority to the indigenous population simply based on indigenous status. Why isn’t it just based on need, say indigenous folks living in underserved remote community? If I live next to indigenous folks and we both have otherwise equal health status and equal access to healthcare, what’s the priority all about? making up for past wrongs wouldn’t seem like “healthcare” policy. Not sure why, but I don’t think I’ve seen much if any public discussion about this.
For anyone unable to get into the real estate market here in Victoria, or is tired of paying huge rents, there are alternatives in other parts of Canada.
New Brunswick for example.
https://www.royallepage.ca/en/property/new-brunswick/moncton/143-north-st/19067387/?utm_source=allclassifieds.ca
A simple, modest little house for $199,000.00 asking price in Moncton NB. There are lots of them available.
(I have no financial interest in this house. I simply give it as an example for others to consider what is out there.)
There are few places like Victoria. But there are astonishingly good deals out there for family’s if a person is interested in experiencing a new adventure. (Millions of people live in eastern Canada and the united States.) Moncton is a growing city with some very exciting new developments going on. For example: The major new Marine science center addition … which will add something like over 300 new employees “after” it is built.
@Introvert your favourite inflation indicator (lumber) is up to $525 per 1000 board feet today.
Whats the lowest sales of those royal bay houses recently?
Impersonators posing as homeowners linked to 32 fraud cases in Ontario and B.C.
https://www.ctvnews.ca/canada/impersonators-posing-as-homeowners-linked-to-32-fraud-cases-in-ontario-and-b-c-1.6246976
Victoria council adopts divisive missing middle housing program
https://www.timescolonist.com/local-news/victoria-council-adopts-divisive-missing-middle-housing-program-6443676
https://www.theglobeandmail.com/canada/article-private-lenders-rein-in-real-estate-borrowers/
Patrick: absolute disgrace. There is absolutely no excuse for this whatsoever! It’s an outrage. Stockpiling these medications while people die is conservatism run amuck and cannot be explained. It makes no sense!
Just received notifications from listing agents re offers that have come in on two out of three properties I was keeping an eye on for MMHI. This will be super interesting to watch over the next few years. Wonder if some of the waterfront teardown lots in Fairfield now end up going the route of high-end 6 unit condos over custom SFHs.
Wonder if Saanich will follow or wait a few years to see how this plays out in Victoria?
FYI: 🙂 🙂 🙂
“MMHI update
@CityOfVictoria
council has passed the Missing Middle Housing Initiative 6-3. Thompson, Loughton, Dell, Alto, Caradonna, and Kim in Favour. Coleman, Hammond, and Gardiner against.”
https://twitter.com/HomesForLiving_/status/1618779620194807809
Kudos to Ontario health, and an outrageous fail for BC Health.
Good news for Ontarians who get Covid. If they’re over 60, Covid + (pcr), (or age 18-59 with one medical condition) they just visit a pharmacist (no need for a dr.) and get Paxlovid on the spot, an approved/effective pill treatment . https://news.ontario.ca/en/release/1002565/ontarians-can-now-visit-local-pharmacies-for-paxlovid-prescriptions
Bad news for BCers. The BC health has kept much stricter standards in place, and keeps stockpiling unused Paxlovid to an absurd level. They’ve received 30,000 and dispensed 2,500. Because in BC, you need to be over 70 AND have at least three chronic conditions to get it. (Unless indigenous, unvaccinated or immunocompromised). Even then your doctor has to spend 30 minutes filling out forms, and then apply, wait for approval. Meanwhile Paxlovid is only effective if given in the first 5 days!
For example, 85 year old BC lady in whistler sick with Covid, so sick she couldn’t climb stairs, was denied Paxlovid on Dec 26 because she didn’t have three chronic conditions.
Hopefully this CTV article shames BC Health into doing something, but as of today (Jan 26)
the requirements are unchanged for who gets Paxlovid https://www2.gov.bc.ca/gov/content/covid-19/vaccine/treatments
https://bc.ctvnews.ca/b-c-s-stockpile-of-covid-treatments-growing-amid-continued-eligibility-restrictions-1.6216756
This is the type of nonsense that happens when we allow government bureaucrats to get in the middle between patients and their doctor.
If you want to do something about this, go here https://protectbc.ca/broaden-paxlovid-availability/
Only 27% of homeowners have a HELOC. And only half of them have any balance outstanding.. So that leaves 14% of homeowners with a HELOC balance. Average balance is low at $75k. Most use it for renos. As you know, they can pay interest only and withdraw from the HELOC to do it. So they’re not stretched. .
Moreover, HELOC balances (total $168 billion) have been falling for the last ten years, until 2022 when they rose a modest 1.8% (well below inflation, and flat per capita ). No signs of danger there.
https://www.mpamag.com/ca/specialty/specialized-lending/how-is-canadas-heloc-debt-burden-shaping-up/411187
I’m referring to the average new mortgage of $500k. Yours is way above average ($1.2m). Presumably because you qualified so your income is also way above average. And your income has risen with inflation since you bought.
So maybe you can tell us what stretched means to you, are you going to sell your house, or just pay the extra amount (and cut back other expenses)?
That chart doesn’t include the HELOC taken out by Mom and Dad to help Junior with the down payment.
How do you define stretched? A % of monthly income? Overall purchase price? Disposable income left over after obligations are paid?
For what it’s worth, I’m a FTB and our recent PA came in at:
Amount: $1,235,000
Rate: 5.24%
Payment: $6,769.09
We would be stretched with that payment.
That’s because it’s been zero for over a decade.
That’s an interesting chart. Looks to be a huge average down payment. (330k/800k) = 41%
Compared to about 25% in 2013.
Higher % down payment despite higher, more unaffordable prices – who knew?
Perhaps FTB are stretched less than previous – which runs counter to the common narrative.
For a new mortgage purchase, with a 41% down payment, house value would need to fall 41% before the buyer would be underwater on the mortgage.
That’s points to less “recent buyer” pain out there, which should be good news to those here that have been posting/worrying about that
Home price has grown more than average new mortgage size.
Hasn’t been relevant for a long time. I paid a tenant a trifling amount in 2008 and that was the last time the prescribed rate was greater than zero.
Received a managing broker email bulletin update this morning….hmmm, never knew about this depsite being a landlord for 10+ years.
“The Residential Tenancy Branch (“RTB”) has announced that the interest rate due on tenant deposits for residential rental units is now 1.95%. Per Section 4 of the Residential Tenancy Regulation, the interest that landlords owe tenants upon the return of their deposits is calculated at prime minus 4.5%. Since 2009, the effective interest on deposits has been 0% while interest rates were below 4.5%. But with recent rate increases, your landlord clients should be made aware that interest will be owed again to their tenant(s).
Section 26(1) of the Real Estate Services Act (“RESA”) also requires that brokerages hold deposit funds in an interest-bearing account. Any interest that is earned on the deposit over and above the amount which is paid to the tenant must be given to the landlord. Remember, per Section 29(2) of RESA, no interest accumulated on funds held under a duty under the Residential Tenancy Act should be forwarded to the Real Estate Foundation.”
Re-rented 430 sqft in Vic West from $1,500 to $1,750 in December.
Just re-rented 520 sqft in Vic West from $1,700 to $2,000 in Jan.
Not getting 100 inquiries off FB marketplace anymore but enough (20ish) to find a good candiate.
Even with these insane prices still undercutting the big players. Hudson has 200 units but check out their prices -> https://hudsonhouse.townline.com/floorplans
Add $175 for parking.
A quick look at craigslist this morning shows the average one-bedroom rate is $1,868 +/- 20% per month. A two-bedroom at $2,353 +/- 20% per month in Victoria.
Older apartment buildings in less desirable areas being at the lower end of the range while newer centrally located condominiums with views will lay at the higher end.
I’m using a bedroom analysis as that is how the data is presented. The size of one and two-bedrooms can vary significantly. Therefore a price per rentable floor area would be the preferred method and give better results.
-However You gotta work with what ya got.
Rents do follow the economic principle of diminishing utility. As the size of the rental increases the price per square foot rate decreases. Small one-bedroom suites will therefore lease at a higher price per rentable area than a large one-bedroom suite. The typical one-bedroom suite being about 650 square feet or $2.87 and a two-bedroom at about 1,000 square feet at $2.65. Ceteris paribus
In my opinion rents have plateaued. The 1.5% vacancy rate is good news but I believe that rate has to at least double before we will see significant declines in rental rates. A 1.5% vacancy rate may just mean that it will take a landlord a little bit longer to sign a tenant at current market rents.
However if you want to sign a tenant sooner and receive dozens of emails enquiring about your suite then you can offer your unit at below current rent levels.
That could be expected seasonal effect, and nothing new. Renter interest and rents are higher in summer (May-October) and lower in winter (December to March), as described here for an analysis of US cities.
https://www.renthop.com/studies/national/best-time-of-year-to-rent
“The “best” or cheapest months to rent tended to be between December and March (early winter to early spring) across the 10 cities.
The “worst” or most expensive months across all the metros are in the May through October (basically early summer to early fall)”
This, I think anyone who is an active landlord would agree with me as well ( pretty sure Marko saw the same thing), the demand declined quite significantly compared to couple months prior. There’s still lot of demand, don’t get me wrong but you cannot just price higher than comparables and expect people to rent from you.
.
Are you saying you think market rents peaked in November? Or demand for rentals peaked in November?
https://twitter.com/RobShaw_BC/status/1618694525287043079
Yup, called the rent peak back in November. Leo, I assume this means you are slowly getting on board with the call now?
That’s 1.5% for the “purpose built” number, and then the “condo” rate is much lower, at 0.2%
I can’t recall, why do you place importance on the PBR vac. Rate , but not the condo vac. rate?
As I’ve said before. Some people just exist to waste your time. Experts in everything, experience in nothing.
Thanks for the discussion, now go eat a bagel.
LMAO, thank you for the discussion actually. Atleast now it’s obvious you don’t know how the real world works. Yup, your the exact type I describe when I say slow victoria folks.
Thanks for the discussion.
The statement of mine that you challenged was this “ I’m glad my doctor isn’t paid big commissions for prescribing certain drugs.”
And so now you admit “ maybe not a direct commission”.
That’s good enough for me. Thanks for the discussion.
It is not my list. It is the international standard used to clear up the types of confusion on terms and classifications that are common.
No, it is actually the reverse, you are confusing profession with Professional.
CEOs are Managers, not Professionals. Again, you are confusing the definition of profession with the category of “Professional”. It is a classification system that you seem to be ascribing your own judgements and definitions to – if you want more information on why these distinctions are made and on what basis the website drop down menu provides this.
No, it does not. These are separate major categories distinguished by the types of tasks they carry out and the level of education required. An associate Prof is not the same as an Associate Professional. An Associate Professor is categorized under Professional.
Doctors do go on educational seminars that happen to take place on a cruise ship in the Mediterranean, funded by pharmaceutical companies. My friend was in Saudi Arabia last November to give a presentation, all expenses paid. There are perks.
—- You’re confusing the term “professional” with “profession”.
— For example, your list of occupations lists a company CEO or President as a “manager” not a “professional”.
—-Seems to me Bill Gates and Mark Zuckerberg and millions of other CEO/Managers have a chosen profession, despite being “non-professionals” on your list.
— Moreover, you state that your list calls a RE agent an “Associate Professional”, which makes them a professional, just like an associate professor is a professor.
Riighttttt.
https://www.utoronto.ca/news/what-big-pharma-pays-your-doctor-u-t-expert
https://www.cbc.ca/news/health/pharmaceutical-drug-company-doctor-physician-payment-disclosure-transparency-1.4169888
https://theconversation.com/guidelines-governing-canadian-doctors-relationships-with-pharma-companies-under-review-149519
Looks like you are an expert thinking there is no financial relationship, maybe not a direct commission but if you think there is no benefit then I got a house to sell you on a 3000 sqft lot in royal bay for 1.6M. Better hurry though, Frank might put in a bully bid
If Japan can grow their housing stock by 2% a year, while at the same time taking down .5% per year, I think we can manage, just need to stop holding it up.
Realtors are not professionals, they fall in the Technician/Associate Professional category according to the International Standard Classification of Occupations. Their specific subgroup is classified as Business Service Agents. Seems about right. Sex workers are also not Professionals. They are Personal Service Workers Not Otherwise Categorized.
You can search your own job and find your category here:
https://ilostat.ilo.org/resources/concepts-and-definitions/classification-occupation/
People do also need to eat, after or before they get housing. Smart density is the only way, IMHO.
New CMHC rental report. Vacancy up to 1.5% but still well below healthy rate (3%)
Supply will never catch up to demand under the current immigration policies. Hundreds of thousands of houses in Canada do not meet construction standards for energy efficiency, and need to be replaced. The other alternative is to pave over more farmland. Farmland does not extend very far north of the border.
No, although at the time it was introduced – 1987 – it exempted 95% of properties as it only applied to sales above $200K (!).
As we’ve already discussed, getting rid of the PTT would not improve affordability as you would have the same number of buyers bidding for the same number of properties with the same amount of buying power – so prices would just go up by the amount of the foregone tax.
What would improve affordability is more properties on the market, i.e. more supply.
Wasn’t the land transfer tax supposed to be temporary? That would be an easy win to help with affordability. Unfortunately I would suspect govt is to greedy to give it up though.
I found this part interesting
I personally don’t see oil prices continuing to be low with China ramping up, and Europe getting very little in the way of snow this winter. Better hope for a cool summer. Also, weird that global food prices are down, and yet groceries just continue to get more expensive here. Someone’s making a mint.
Yes, I agree. When I tried to convince my family member selling his house to get a discount from the selling agent, I had lots of other family telling me the agent wouldn’t “try as hard’, which seemed absurd. So I believe that the discounted agent will in fact do just as good a job as full-fee agent. So I’m not suggesting that RE agents aren’t acting in the interest of clients, I’m saying that they do, regardless of what they’re getting paid. And so if/when I sell my house, I’m going to be one of the 80-95% of sellers that you refer to looking for full service, and lower commission.
Not sure where you came up with that. The definition of profession has nothing to do with the status of provincial regulation.
As an aside, do you know what the “world’s oldest profession” is, and is it regulated by the BC government? 🙂
Well this economist thinks Canada could actually nail a soft landing:
The Bank of Canada did its job: Rising interest rates and inflation look to be ending
https://docdro.id/WIMLMsc
https://www.theglobeandmail.com/business/commentary/article-bank-of-canada-stop-raising-interest-rates/
Just don’t sell and re-buy so often. The lowest commission is no commission. Not to mention all the other money you’ll save by simply not transacting.
Hassle, time, and stress — you’ll also save yourself those.
I am just giving you hypothetical scenarios. What I am trying to convey is if all agents “act in the best interests of the client;” then one would reasonably conclude that as a seller offering a $1 cooperating commission should have no impact on the sale of the property. The buyer’s agent will still show it and present it to their clients just as well as all the other listings offering $15,000 to $25,000 coop. After all, they are acting in the best interest of the client.
Fixed that for you. RE agents are not a profession in BC, any more than barbers are. Actually barbers are more of a profession, since the BC government took back governance of RE agents.
I am very familiar with physicians, and pharmaceutical sales. And no, physicians don’t receive money from pharmaceutical sales just because they write a prescription. If there are illegal cases where something like that is discovered, doctor typically loses his license +/- goes to jail. If you know of anything like that, report it to cpsbc.ca and they’ll get right on it. Other than that, accept this as a word from an “insider” that it doesn’t happen.
Note that a doctor may own a pharmacy, and make money from the sale of anything from that pharmacy. Those aren’t commissions for prescribing that drug. I am referring to what I said, namely getting a commission from the pharmaceutical company based on prescribing a drug, which the patient can fill anywhere.
Sometimes you wonder if anyone is looking after the buyer’s interest when the commission is based on the sale price. First time and out of town buyers are most susceptible to over paying for a property as they have no reference unlike if they were also trying to sell a property in the same market as they are trying to buy into.
Maybe once or twice a year, I’ll have someone call me about a property they want to buy. The first thing I tell them is that I don’t want to know what you are offering on the property. Let me do my analysis and I’ll give you the low and high market value range along with my opinion and the margin of error in my results. Then we can talk about the property itself and the need for immediate repairs, items found in the home inspection, and renovation costs. The problem is this takes time and most buyers have to lift conditions quickly. They don’t have time for an unbiased party to complete an analysis. So they wing it.
This is different from a mortgage appraisal where the appraiser is working for the lender and confirming that the offer is reliable and reasonable for bank financing ,because the appraiser is now at the beginning of the process of buying a home and advising the client on where they should make an offer. Not at the end when everything has been finalized and the appraisal becomes just a formality.
People seem to like this service and it costs less than a home building inspection. Depending on the lender they could get a letter of transmittal from the appraiser which swaps out the client from the buyer to the lender and they then can use if for bank financing. The appraiser is then legally bound to the lender for losses resulting from an erroneous valuation. But not always, and in most cases they end up paying for two appraisals. One performed expressly for them and the other for the lender that they will most likely never be given a copy due to third party liability issues.
And don’t get me wrong, I think agents do a good job with their clients. It just sometimes people want an unbiased opinion especially on the unusual properties where there are little to no recent sales available.
Are you being sarcastic? I am assuming you have heard of pharmaceutical sales?
If RE agents were regulated properly, as other professions are, an agent found to be acting against their client’s interest because of a $1 commission would lose their license. And then it would no longer be “reality”. Other professions have matured, and got rid of this type of unethical behavior.
I don’t think you should keep score on your income with every transaction. Imagine if your doctor did that, and thought “oh, here’s this guy, who doesn’t make me much money”. And so he didn’t ask you many questions, and got you outta there fast.
Instead, look at your income annually. It will still be huge, despite making way less than average on some transactions.
Sorry my bad. The buyer example had nothing to do with double-end scenario in paragraph above.
There are going to be people in all walks of life who are honest to a fault, and others who are not.
I think you are in charge of your honesty, and the industry has a code of conduct to make sure those that cannot distinguish have some mandatory standards to adhere to and consumers have a complaints mechanism when they don’t.
This is ultimately why double commissions were prohibited. They are a clear conflict of interest situation.
>Am I being an awesome realtor protecting my clients’ best interests or am I not happy with the coop. Impossible to really determine.
You know.
I would say these scenarios point to reasons not to use a realtor who is working on commission. I’d rather go it on my own than pay someone who has a duty to act in my best interests but is instead manipulating a transaction so they get paid more or earlier. The only time this would be worth it to me is if I felt the realtor was acting in my best interests and was also more knowledgeable than me about the market.
Yeah. But your advice appears to be in their best interests if that does influence the salability of the property.
25k isn’t a decent co-op commission? If you offer $1000, ok, they’re going to talk it down their client but 25k sounds pretty not embarrassing for 1 sale, no?
Let’s say I am the listing agent on a $2 million dollar property, it has been on market four months and seller is nervous. Gross commission $50k, coop $25k. We receive an unrepresented offer for $1.65 million and seller counters at $1.9 million. Unrepresented buyer says $1.70 million best and final. Seller asks me what I think and I explain that there is likely a glut of inventory coming this spring as high interest rates take their time to work through the system and I list off every single reason why the market is likely to continue to drop. How does one differentiate whether that is my honest opinion or I am stretching the truth on what I really think because I see 50k in front of me?
Same goes as a buyer’s agent. The cooperating commission is very low and I list off every single negative about the property to my buyers and I don’t really go over the positives too much. Am I being an awesome realtor protecting my clients’ best interests or am I not happy with the coop. Impossible to really determine. When I do mere postings I always recommend my sellers offer a reasonable coop commission. Sure, you can offer $1 and the buyer’s agent has to work in the best interest of their client…..but their is reality.
I see. It is up to the listing realtor to agree to (or not) the request. An unrepresented buyer cannot compel cooperation. However, not sure why a listing realtor would be opposed as they are not disadvantaged by this. They are put in the same position they would have been dealing with a represented buyer.
I think you’ll run into an ethical issue there. I don’t think I want my listing realtor who I am paying for representation to talk me down 17k or some part of that so they can get this money instead. Not to mention that this seems like it could be a breach of section 30 of the RE Service Rules:
On the tipping conversation, it turns out you’re not alone Barrister. And there’s even a word for this – tipflation !
https://www.newsweek.com/restaurant-bill-tip-minimum-sparks-discussion-tipflation-viral-reddit-1736649
Mayfair Man, I think that might contravene the Bank Act. Although most lender’s include the GST in the mortgage but do not include the property purchase tax. Why one tax but not the other?
I think a system where the seller pays their realtor and the buyer pays their realtor(but it can be rolled into the mortgage) would be the most fair. That way the buyer isn’t having to come up with a lump sum payment for the realtor.
There are times when buying a home when I wonder whose side my agent was on. You walk through a crappy house, and they’re trying to talk it up like they’re the selling agent. Just seemed like they want to make a sale period. I’m glad my doctor isn’t paid big commissions for prescribing certain drugs.
This is 110% what is boils down to.
I am not referencing commission percentages specifically, but the system setup as a whole. For example, in BC I would say 99% of buyers have representation which is not the case in other countries.
You can negotiate the commission. Do you really think with 1594 active agents in Victoria and 290 sales in January that you can’t find an agent in Victoria to list an Oak Bay home for 2.75% (1.25% listing end, 1.5% coop). You easily can, but as I said people want the agent that will fly in banned foreign buyers from New York that he or she can’t represented because dual agency is banned, to list their property.
In theory the best would be seller pays per hour for his or her agent and the buyer does the same.
Given the reality and the established culture of our system this is the best you can do from a practical standpoint in my opinion.
98% of buyers; try to secure an agent that will give you some sort of kickback
2% of savvy buyers; unrepresented
5-20% of sellers; mere posting
80-95% of sellers; lower commission full service
In Ontario that average commission is 5%, much higher than here for the same service. Should Ontarians be happy with that, because it is worse in Croatia?
Yeah, and the typical 6 and 3 model seems to be on the mid or lower end of percent paid amongst countries ().
In the end anyone that wants to save money can, but almost no one is putting in the work necessary to do so.
Overview by country https://graphics.wsj.com/table/commish_1016
The listing agent and the seller have a listing contract. I feel like the buyer asking for the cooperating commission to be reduced to $0 is trying to interfere with a contract they are not a party in.
Other than that I strongly believe in human nature (let the 2x commission for listing agent go to work). Some of the best deals I ever saw were dual agency (now known as unrepresented) transactions.
In Croatia there are no buyer’s agents. The listing agent typically collects 2% from the seller and 2% from the dual agency buyer. As the buyer you are paying someone out of pocket not representing your best interests. The system is 100x worse than here.
I know we complain here a lot, but from what I’ve seen in other countries our system including mls isn’t actually too bad.
10 years ago this was my buyer end business model
Up to 10 houses viewed – 50% cash back
11 to 25 houses viewed – 30% cash back
26+ houses view – $1,000 cash back.
My thought was if I spend less time with you I give you more cash back. Other than having to track showings there were so many problems with the model. First of all, the super cheap client that would call the listing agent(s) to set up showings. Then the listing agent would find out they were working with me and be extremely upset and accuse me of being lazy and not wanting to show houses in person, etc. It wasn’t fun getting hate phone calls from colleagues. Often I had clients view 14 houses, for example, and gripe that they were only getting 30% then I would bump them up to 50%. It is a referral business, what I am going to say? Sorry tough luck, we had a deal you are getting 30% and then they aren’t happy and don’t refer me to anyone. This business model also doesn’t account for 300k condo and 3 mill house, etc.
Then for years after that I would receive emails all the time “we are incredibly easy to work with, we’ve found the perfect property, we JUST need you to write an offer on this one home but we need 50% cash back.” I think my career success rate on this type of email is 1/50. I remember the 1 as it was a young family that actually bought a house in Gordon Head they emailed me about. The remainder believe it or not did not work out….people writing insane lowballs, bailing on conditions, etc. and then I would be like why did I agree to the 50%, i tought this was suppose to be easy/sure thing.
Life lesson I learned is when someone approaches you about how incredibly easy they are to work with as a client is they are most likely are complete nightmare.
Last 5 years I’ve gone 1k cash. Keep it nice and simple. If people want more Google Search and I am sure you’ll find someone offering more.
Logically this seems to make sense. However in Germany it used to be that buyers paid the entire commission, and now they regulated that it must be split equally between buyer and seller. They are arguing that forcing the buyer to pay led to increased commissions than neighbouring countries! https://www.everestate.com/blog/estate-agents-commission-who-pays
Why would the bonus start at the “bottom line”? Why not put it at the list price, which is already public. Or 10% below list. That doesn’t reveal bottom line.
That is a big part of it. The seller is flush with cash, so what’s an extra $20k.
Making the buyer pay his own fee to the agent would be a different story however. Buyers have been penny pinching to save every nickel for the down payment, so wouldn’t be freely throwing tens of thou$ands at their buyer agent. If you forced buyer’s to pay for their agent, fee for service along the way, you’d see a big demand for low fee options.
I don’t see the advantage to the unrepresented buyer in this situation. The approach might work in a very slow market, but not in a seller’s market. Relying on a listing realtor acting on self-interest in the transaction doesn’t seem like a good move for a buyer – although I agree it is impolite not to request the split from the listing realtor in advance. Why should a self-represented buyer not gain a fully quantified and visible cost they are saving in the transaction for doing all the work themselves?
I didn’t ask for an itemized list. They could just send a bill listing 20 hours @ $150 /hr in the month, and that’s $3,000.
And just like hiring a lawyer/accountant, I could fire them or they could quit anytime, and I just owe them for services rendered.
I definitely think the majority of the impediment is that there just isn’t huge demand for the low fee options. I’ve said it many times before but I maintain that the biggest impediment to consumer motivation is because they’ve made so much money on real estate they don’t mind paying high commissions. Paying $40k to sell a house when you gained $500k in equity doesn’t hurt at all, but paying $20k to sell a house out east and you worked hard for a year to save that $20k is painful. That’s why the DIY share in some of those low priced markets is substantial.
It’s more like a sliding scale versus bonus. For example, certain % up to 500k then a different % over 500k.
We often have that in Victoria/Canada.
Straight up bonuses (i.e. if you sell home over 800k you get bonus or 10%) don’t work well in my opinion. Seller gives away his or hers bottom line right off the bat.
Make a lowball offer and let the listing agent decide if he or she wants to lower the double-end commission to the seller, or he or she wants to try and collect both end and talk the seller into accepting a lower price point.
How would that work practically?
99% of properties are on lockbox (listing agent not present); therefore, if minimum level of competence is met (floorplan, professional photos, correct data input into mls) how is one agent better than another one.
Honestly as a industry insider it 99% comes down to price/market.
I just slimmed down from 205 lb to 190 lb. Despite there being a million diet methods/programs/etc. guess what I did. I ate less and exercised more. It isn’t that complicated. ***do not mean to offend anyone with health/genetic related obesity. Obviously there are exceptions to eat less exercise more but for the majority it is as simple as that yet people spend billions on diet plans.
Real estate is the same. A lot of fog being sold.
In Australia they have flat fee or percentage of sale and a bonus structure so I’m sure lots of workable examples in other countries no need to overthink it
LOL, are you expecting realtors to send clients a task list like Lawyers? 36min driving around, 12 min answering your email, 6 min updating search criteria on MLS.ca.
Only part I will disagree with you on is if going with the self-represented approach I think the buyer should let the deductions or listing agent beat down the seller on pricepoint play out in the background, versus asking for a deduction.
I’ve run into this problem with mere postings. The consumer just does not want to pay more than $1,000 upfront not knowing whether the property will sell or not even thought it makes mathematical common sense.
Maybe 6 or 7 years ago a university mathematics professor called me inquiring re listing his Oak Bay home and we got into some probability discussions. He was worried about the home not selling and being out $1,000. At that time the success on my mere postings was around 75% (inline with full service listings). I was trying to explain to him that $1,000 @ 75% success was mathematical far superior than $16,500 (listing side for full service commission on his 1 mill dollar home at the time). He ended up listing full service with another brokerage at the price I suggested he mere post. The house sold as it would have with the mere posting as well.
As you say billing per hour would not work for the consumer in slower markets.
They could charge more $$ per hour, just like the hot-shot lawyers do.
There are problems with paying an hourly rate. Some agents may be better at selling than others. In that case those agents with experience would be penalized for being better at their job. While an agent say with less experience would take longer to effect a sale and receive a higher compensation than an experienced agent.
You might say that an experienced sales person should charge a higher hourly rate, but the consumer would not know the difference between the two sales people. In their minds the sales people would be like cans of soup and the consumer would select the lowest hourly rate.
This would be the same if agent’s competed on a flat fee or piece work basis. Industries that follow this method of pricing are offsetting quality for time. As the adage goes. You can have it good or you can have it fast. Pick one.
Yeah, I can see that and agree things have changed. Some brokerages won’t even show listings to an unrepresented buyer even with signed forms. All of Parksville/Qualicum won’t. I do have a problem with this approach as it does seem like a cartel and designed to protect commissions. Almost all agents in this area work with Royal LePage.
However, on the last place we purchased in 2021 we had a 17k deduction agreed to on the basis of a commission split as self-represented buyers.
That amount is worth paying a lawyer for an hour of their time to write up an offer for you and make it on your behalf. Takes the stress off of you and listing realtor.
But I agree that most people will not do this.
And there may well be RE agents willing to do this. Staging and marketing will be expensive so I would only go this route in a strong sellers market personally. Looking at the time and costs involved, I’d estimate that this is going to be a minimum of 6k which you lose if there is no sale.
I don’t want “do-nothing” RE services from a lawyer. As a seller, I want full-on RE seller agent services, where they show the home, put up signs, get it staged etc. I just want to pay the RE agent like a pay a lawyer – by the hour.
Just a reminder for those that want to appeal their assessments. The cut off date to start an inquiry is January 31.
Happens all the time in business. For example, a investment banker pitches me a deal to buy a company and their commission is based on the transaction completing and on the value of the transaction, the seller also has an investment banker/s advising them and they also get a commission/fee once the deal completes, this example over simplifies it but the overall process is very similar to RE. Both myself and the seller negotiate bespoke commission structures with our respective investment bankers which would take into account various other relationships we have with those banks. The lawyers and other consultants involved on the deal will typically work on a pay for fee basis, just like RE.
Alot of the time, the DCM arm of the same bank advising me would also be part of the financing solution, so they are making money advising me and also loaning me money when I buy.
https://househuntvictoria.ca/2023/01/23/changing-rates-and-the-market/#comment-97831
Because if they thought about it that way they wouldn’t stop there : they could just add a financing portal and a cart and a handful of online forms to realtor.ca and 10% of Canadians would be out of work.
You can already do this by using a lawyer to sell or buy instead of a realtor. Lawyers are permitted provide full RE services. The reason lawyers have not moved into this field more heavily is, imo, because people do not want to pay up front and there is still a barrier with realtor.ca listing access.
So if you are wanting to pay by the hour, call up a RE lawyer and ask. You’ll have to use FSBO to list, but they may well be willing to do all the work if paid by the hour.
RE ACT
Requirement for licence to provide real estate services
3 (1)A person must not provide real estate services to or on behalf of another, for or in expectation of remuneration, unless the person is
(a)licensed under this Part to provide those real estate services, or
(b)exempted by subsection (3) or the regulations from the requirement to be licensed under this Part in relation to the provision of those real estate services.
(2)A licence required by this Part is additional to any licence, registration, certificate, enrolment or qualification required under any other Act.
(3)In addition to any exemption provided by regulation, the following are exempt from the requirement to be licensed under this Part:
…
(f)a practising lawyer as defined in section 1 of the Legal Profession Act, in respect of real estate services provided in the course of the person’s practice.
Why is there a commission in the first place? Why can’t they charge fee for service (ie typically per hour), like most professions (lawyer, accountant etc.) ?
Why is the seller paying the buyer’s agent at all? That’s an obvious conflict-of-interest, that wouldn’t be legal in other professions.
Imagine you go to your lawyer (or accountant) and ask his advice on the house you’re planning to buy. And you know he’s going to get paid a fat commi$$ion by the seller, and will make nothing if you don’t buy it. Would you accept that kind of legal (or accounting) advice?
Really?
So a home listed for 400k gives a commission of $7,888 to the listing realtor. Of this, the realtor may have spent what – up to $800? to photograph, market and list the property and then has to pay their brokerage about half the commission amount if they are with one of the major brokerages So they are getting $3500 for their time and effort to list and show less their other costs of doing business like mileage, advertising, licensing and continuing education.
At 1/5 the commission amount you are now suggesting they act for free in the best case, or worse, pay to list your place, with the chance of zero compensation for their time and expenses and the listing costs?
Where there is more room for commission reductions is with higher priced places and with realtors who are not with brokers who are charging a large split.
A realtor can offer a cashback regime that mimic’s this if they wanted to, reason they don’t is because there are enough people willing to pay the full commission.
I wanted to go back to one car in July so I sold my second one. It was worth somewhere around 120k-130k (I paid 94 brand new pre-covid, funny times). I put it on autotrader.ca for 119.9k and within 24 hrs was already annoyed with all the inquiries/questions/people wanting test drives/more photos/etc.
I called up the local dealership and we negotiated 108k on a Monday. I dropped off the car on a Tuesday. Picked up bankdraft on Wednesday.
They listed the car with a CPO manufacturer warranty for $129,900 and sold it two months later.
The dealership probably made 10k? I saw the value in this service at 10k verus selling privately myself for 118k.
I do not see the value in paying someone 2.25% MER every year to buy Telus sharss on my behalf.
There’s a lot more that can and should be done. The solution is actually quite simple.
There should be legislation prohibiting commissions, period. Each party (buyer and seller) pays for their own representation. Just like they typically each hire and pay their own lawyer for a RE transaction
This means the seller’s agent would bill an hourly fee for their services, payable by the seller paid whether the house sells or not. . If it’s a quickie sale, and the agent charges $150/hour, and only spends 5 hours on it, lucky for the seller as he gets billed $750. Maybe his rate rises for $300/hour during the sale process, as this is more involved.
And so would the buyers’ agent, payable by the buyer. payable whether the buyer buys or not.
This is similar to how most other professions work. You hire a $400/hour lawyer, and if he spends 3 hours on your $5m sale, you get charged $1,200. The lawyer’s incentive to do a good job for you is ethics and his reputation for providing value for his services.
btw) Lots of people think like me on this. e.g. https://www.zerovaluerealty.ca/blog/meet-the-cartel
As Leo pointed out government hasn’t helped this process for savvy buyers.
i/ Before 2018 you could set up a showing with the listing agent with no forms to sign. Now you as the buyer have to sign two different forms before the listing agent will book a showing.
ii/ Definition of unrepresented outlined on these forms is pretty scary for everyone but the sophisticated savvy buyer. For example, listing agent don’t have to disclose anything to you, they don’t have to protect your confidential information, they don’t have to act in your best interest, etc.
iii/ As agent we are constantly getting reminder by the BC Real Estate Council/associations/managing brokers to avoid unrepresented buyers like the plague because everyone is afriad of getting slapped on the wrist by the government.
Practically speaking I find buyers just give up on signing the forms for each showing and getting negative pushback from listing agents that are afraid to deal with a unrepresented party that they just end up with a buyers agent.
In conclusion, a lot more difficult/annoying to be without a buyer’s agent than it was 10 years ago thanks to the government.
Re commissions are all negotiable. Do you think people buying/selling $5M+ homes use the same commission structure as those buying 500k condos??
Oh and on inflation, that’s it – 0%-2% headline by August. Cuts before Q4 2023. Perhaps as fast as we saw on the way up as all the input costs that have crashed over the last 12 months work their way into margins and inevitable price cuts as vendors fight for business amidst bloated inventories and indebted customers.
There is a neat conversation going on in here about “limiting commissions”. How about all those who think the commissions realtor’s “charge” is too high negotiate for yourself instead of just paying whatever they want? This is honestly one of the craziest things in Canada that people just pay for, along with investment fees. Is this what Canada has become? A country full of weak people who don’t know when to push for what they want unless the government makes a rule that says it’s ok that you can point to? Honestly, any realtor should be willing to do the work they do for 1/5th of what they currently make plus direct costs. Don’t rely on the government to make a rule. Just take your business somewhere else until you get the pricing you want. Like you should be doing with everything else.
How many times have I posted this?
You can make an offer as an unrepresented buyer and request the commission split as a discount on your offer. They may or may not agree, but 100% of the times I’ve done this, there has been agreement. I’ve both bought and sold without a realtor and the process is not that complicated imo and there are standard forms available and you can pay a RE lawyer for an hour of their time to review the forms and offer the first time you make one.
Recently we used Marko to purchase a property and it was worth it. We were travelling a fair bit and not familiar with the type of property. His advice was excellent and it was less work for me. I think a knowledgeable realtor is worth using for the majority of people when purchasing. And probably when selling if you are stressed by the process.
Again, if you are wanting to sell yourself without a realtor you can already list on realtor.ca by using a fsbo process. It will cost you $549 and includes access to all the buy/sell contracts with instructions. https://www.fsbo.ca/
If you want a realtor to do the work of listing, marketing, showing and managing offers and you don’t want to pay them for their time as they go or for doing all of this without a guarantee of payment in the event of no sale, as opposed to up front, then a commission seems fair.
I’m not sure how much more wide open the process can be when you can already FSBO and negotiate commissions.
Do you consider the Re sales market to be wide open to free competition, with all the Re agents working within one set of rules?. And you figure it’s wide open because people who don’t like that can put an ad on Craigslist, and sell without an agent?
Opened it up for 3 months, increased back end fee to $1,300 and did 9 of them in three months. Shutting them down again shortly as a lot busier than I thought I would be.
You got back into this? I thought you said you stopped doing them.
Different from Craigslist/Kijiji/Facebook Marketplace?
Not sure what you are thinking.
Maybe it wouldn’t be a homeowner, it would be a competing organization, with its own rules. The same way rogers and Shaw have to cooperate/grant access to other telcos, under rules from the crtc to encourage competition and prevent monopolies.
Mere postings readily available so not sure what more they can open up. I wouldn’t support a home owner being able to upload directly to realtor.ca like craigslist.
https://markojuras.com/flat-fee/
They shouldn’t mess with compensation limits. They should open up the listing service though, so it would include private/other listings.
“limiting and reducing real estate commissions to a much more reasonable percentage such as a maximum of one percent.”
That has me thinking about the tipping conversation:–as the menu prices increase so does the tip; to maintain the same absolute tip its % must drop.
I can’t say I’ve ever heard JT and associates ever talking about MMT. It seems to be some kind of straw man invented by the right to bash those they consider to be on the left. The same kind of people also like to bash JT for saying he doesn’t think about monetary policy, which seems contradictory to me.
That’s not meant as an endorsement of the current federal government’s fiscal policies, however.
Marko, actually lawyer fees are regulated by the taxing masters in a lot of instances. Would have happily used John from 50 or 80% cash back for buyers. Do you have a list of agents that give that sort of cash back in Victoria.
I’m pretty sure it’s a Lebanese family that owns it. They’re very nice.
No, but will give it a go one day now.
Have you ever been to Caravana in the Jutland area? Great Salads.
Maybe we should limit lawyer fees to $200/hr. Doesn’t matter if you have a proven track record and 20 years of experience or straight out of law school. That makes sense, right?
I guess you didn’t read this part in my comment
a lot of inflationary blame has been cast on grocery stores – and apparently now restaurants.
i think the cause really has to lie with this BS Modern Monetary Theory (MMT) that our financially challenged PM (and many others) embraced. how could this not be the greatest invention ever?
“MMT’s central idea is that governments with a fiat currency system under their control can and should print as much money as they need to spend because they cannot go broke or be insolvent unless a political decision to do so is taken. … While supporters of MMT acknowledge that inflation is theoretically a possible outcome from such spending, they say it is highly unlikely and can be fought with policy decisions in the future if required.”
i remember reading about this “new math” at the beginning of the pandemic. were the ECON classes that i took years ago so completey wrong? apparently not.
I’ve been going there for more than 15 years now. Family owned. I am use to Croatian resturants where you order chicken and they don’t have it because they didn’t kill any chickens that morning. For example, in Canada, I find resturants salads a complete disaster, barely edible. Maria’s Soulvaki the Greek Salad is actually edible for me, it tastes somewhat fresh compared to the rest of the garbage here.
Marko: You argument does not really hold water in terms of buying a house. Regardless of what agent I used to buy a house the commission structure was basically set by the vendor.
Actually, when you think about it, if commissions were limited to one percent I could still look around for an agent with the type of experience required without having to pay the higher commission. But even if your conclusion is that somehow the consumer is the “Problem” then the problem can be solved by limiting commissions to one percent maximum. Much better for the consumer. We should give it a try.
Out of 1596 active agents with the VREB no one has close to the experience I have with lower/alterantive business models on both the buying and selling end. I can’t think of anyone licenced in Victoria that is remotely close in terms of career mere posting listings, for example.
My conclusion is the consumer is the problem, not regulation (other than government making it more difficult for FSBOS to sell). Commissions are completely negotiatable and many lower commissions models have come and gone in Victoria without success due to poor consumer absorption. This includes full service lower commission listing models, let alone mere postings.
How many times have I posted on HHV the steps involved in doing a mere posting and selling your home privately? I am sure 100s of people have read these steps and then taken their kids to soccer practice and then listed their home with Suzy from Bob’s Full Commission Realty because her kids play on the same soccer team.
Barrister, you yourself have often refered to looking for an agent with Rockland experience/specality. You are the type of consumer that is going to pay full pop for someone with “Rockland experience,” over someone without such experience at a 50% discount.
Based on reading your comments over the last 5+ years I am betting when you purchased your Rockland home you used a top 5 agent in Victoria, not John from 50% cash back to buyers real estate.
When I was 19 years old I opened a Questrade and TD Waterhouse account as in my opinion MERs provide no value. I am lobbying out there that the government should shut down John’s Wealth Management Group charging 2.25% MERs? If you can’t do 10 hours for the sake of your financial future, tough luck. John’s Wealth Management Group it is for you. No one if forcing you to go to Johns and no one is forcing you to list your home with anyone.
Everyone is complaining about real estate commissions but everyone wants to list with the brokerage that has an office in L.A., Berlin, and Hong Kong so banned foreign buyers can be flown in to pay top dollar for your home. Consumer needs to grow some common sense.
Reducing Real Estate commissions would leave a bit more money in both the sellers and buyers pockets overall. At worst it would give the seller a bit more cash for their next purchase. Getting rid or reducing an unnecessary expense is a good thing.
I wonder if the NDP would find this a rather popular step in terms of regulating maximum commissions.
Looks like inflation in Australia/NZ is jumping back up again, 7.8% for Oz, and 7.2% for NZ.
Wow, surprised to see someone gets it! 110% agreed.
It is a parallel to the owner builder exam. Government says we want to reduce delays and costs to construction, but they have a 100% useless exam in place that creates a 2 to 4 month delay and adds costs to homeowners.
Everything they’ve done in my 13 years discourages people from selling themselves. We only have to go back three weeks for their latest genius idea. To buy a few votes they introduce the rescission period which is completely useless. Not only that instead of making a super SIMPLE decision to exempt the rescission period from private sales they don’t so now private deals are also subject to the rescission period as well.
You want to buy a home off your best friend so you both can save on transaction fees? Yes, government says you still need a rescission period.
So what’s the big deal? The problem is the CPS (contract of purchase & sale) is now more complicated and has grown in lenght by yet another page. The rescission fee needs to be calculated every time there is a counter offer (changes by a few dollar literally). The time when the final acceptance has made has to be added, the day when the rescission period expires (not including stats/weekends) has to be added, etc.
It just makes things more complicated for the FSBO and gives the industry more ammunition….”you better think twice about selling yourself, lots of liability involved.”
In summary, as Leo points out discourages people from doing it themselves.
Leo, you need to run for office somewhere!
It’s actually funny you say that, because it’s the one Sidney restaurant we’ve been reluctant to go into as we never really see anyone eating there…just timing I guess. Did you like it?
We live in North Saanich and have found restaurants in Sidney pretty disappointing with a few exceptions. It just sort of seems they charge Victoria prices but without Victoria quality. So we often go to Victoria. The other factor in Sidney is that because so many people are retired, the restaurants get busy at ‘off’ times, so our usual old trick of eating at ‘off’ times doesn’t work haha.
We do like Surly Mermaid in Sidney, also the Chinese food place, and we like the Stonehouse pub by the ferry. And for the occasional splurge, the Deep Cove Chalet is great.
I read the reddit post somebody linked & it was pretty insightful in terms of how crazy restaurant prices have become. I understand about inflationary pressures, but also think there’s been some significant gouging of customers going on here, just my feeling.
Yup. Helps a few people in the short term who can jump in when previously they could not. Then prices rise and we’re at the same stalemate, but with higher risk.
I do think the province should think about their regulatory regime with the express purpose of encouraging competition and lower commission business models in the real estate industry. All they’ve done since they took over is discourage people from doing it themselves.
The obvious response is that since people buy at the limits of affordability, that would just result in the selling price increasing by the amount of the foregone tax.
As I’ve pointed out before, a similar tax in Toronto was blamed by the RE industry for falling prices, in 2008.
Why? So they can buy houses that they can’t afford?
Anything to make homes more affordable, like lowering land transfer tax, or commissions, would just mean people would have more capacity to increase the bid for a home? Sort of like how most government affordability programs increase the buying power of the buyer, and ergo create more competition for the real estate. It doesn’t seam to bring home prices down, it just increases how much people can bid on them?
I think it is a difficult time for average homebuyers, There are a number of things that the government should consider to ease things for buyers. The obvious one is to reduce the Land Transfer tax. But this would not be popular with the politicians.
Reducing government revenues is never popular.
What might be much more popular is limiting and reducing real estate commissions to a much more reasonable percentage such as a maximum of one percent. Considering that the real estate industry in BC coincidentally virtually all charge the same for selling your house it is clearly a matter of price fixing in effect.
It is a regulated industry already and reducing transaction costs would benefit everyone except real estate agents. Politically it would be popular since the BMW crowd is rather on the outs with the NDP base.
BOC up 25 basis points (as expected). And “expects to hold” (pause) for awhile. Next meeting is March.
https://www.bankofcanada.ca/2023/01/fad-press-release-2023-01-25/
“If economic developments evolve broadly in line with the MPR outlook, Governing Council expects to hold the policy rate at its current level while it assesses the impact of the cumulative interest rate increases. “
This clearly should not be a municipal decision. It is irresponsible for the Province to leave this authority at this level. A no win situation for sure for Council – and a recipe for no, slow, or illogical/biased decision making.
For example, the Hudson building heights were controversial….”too tall.” Now that the entire development is finished do nimbys look at the towers driving down blanshard and think “boy I really miss the old Hudson store parkade on Blanshard, it was a piece of art.”
We got 500+ units out of the three buildings and the blanshard frontage looks 10x better than that shit parkade that use to be there. Seems like a win win to me.
Cook and Oliphant was going to be TEOTWAWKI, but surprise surprise the sun still rises in the east and Cook Street Village is nicer than ever.
% isn’t as important as absolute numbers when we aren’t doing enough on the supply side of things.
As Victoria grows it requires more and more high income earners such as doctors, for example. Certain product such as SFHs in the core will decrease over time and become more and more unaffordable. More absolute demand, less absolute supply.
I really don’t comprehend the anger when it comes to these rezonings. 98% of time the development has essentially zero impact (or a positive impact via new civil infrastructure such as new better sidewalks, etc.) on the quality of life of those complaining.
What are some examples of controversial rezonings that have been a complete disaster on completion? I walked by those townhomes on Fairfield Rd the other day that those nimbys idiots took to the supreme court. Like wtf is the the difference? I walked by some new modern townhomes instead two shit poorly maintained houses that were there before. Guess what happened to the two public tennis courts I like to play on besides the development? Still there, just like before. What changed except all the cars are now hidden underground and a few more families live there.
Why do people waste so much energy being so angry against development when there is so little tangible impact on their life. Why not spend your time doing something relaxing. Read a book, walk a dog, plan your next vacation or something.
I am concerned about state of health care. Don’t give a flying f*** about three stories townhomes instead of 2.5 stories three blocks away from me. Who cares.
3.5 hours into the public hearing for some townhouses by rainbow park and dozens of angry neighbours at the public hearing. This after the application spent 3 years with Saanich staff going through the process. One brave neighbour living in an existing townhouse nearby speaks in support. Imagine how it must feel to have all your neighbours angrily arguing more homes like yours will destroy the neighbourhood. Mad respect.
Me and a few others speaking in support but times like these when I think Marko is right we are so fucked on housing. Don’t envy the council having to defend a vote for or vote down a totally modest development against staff recommendation to approve
If the average and above average family isn’t in the market at these mortgage rates, how long can we expect above average families (i.e. dual income professionals) to keep the market afloat? What happens to sales and inventory when those groups shrink as a percentage of buyers? I don’t see how the game of musical chairs can continue unless average and above average families (and buyers) are there to support the lower rungs of the housing ladder.
Victoria’s added 12000 people in the last 10 years 2011 – 2021. Colwood and Langford combined have added 20000 over the same time period. So it’s a bit simplistic to assume that all the growth is happening on the Westshore.
Percentage growth rates in Langford are likely to slow in the next census period compared to the blowout numbers of the past, though I suspect Sooke and Langford will still top the percentage growth charts in 2026. Colwood on the other hand will actually increase it’s growth rate 2021-2026 from its previous tepid pace.
I have reverted to paying cash in restaurants quite often. Saves me the stupid 18, 20, 25% screens and I can still tip a reasonable amount. 10 for mediocre but OK service, 15 for average good service and 18-20 for exceptional service (especially with lower priced meals)
The population of Victoria City is around 92,000 and is basically static. Langford and Colwood is now around 65,000 and growing. If the provincial government de-centralized and moved some of the government departments out to the Westshore then we would not need rapid transit as fewer people would be in their vehicles and others would be travelling to work from Victoria to the Westshore in the opposite direction from the morning and afternoon traffic rush.
With government able to find $500 million funding to help non-profits buy existing buildings, how about throwing money at some big infrastructure to help housing in the suburbs. Such as rapid rail and other transport from Victoria to Langford and Sooke? We can’t expect to fit everyone inside the core forever.
Lately I’ve been tipping in cash, and tipping heavier % for low priced meals. They seem to appreciate the cash. And it’s nice to be able to find a good use for wallet cash that’s been sitting idle for months.
I expect we all appreciate these servers and other ”non-remote” workers more since Covid, especially when you see half of the restaurant closed from lack of workers.
From: https://www.cbc.ca/news/canada/british-columbia/strata-contingency-funds-1.6724796
I’m getting hungry.
Trade as a % of gdp.
I think it works with most people who don’t feel like ruining their server’s day. Tipping zero at a sit down restaurant is a scum bag move unless the service was truly awful.
I guess it’s not quite as bad as screaming at the teenager ringing in your groceries because you don’t like the price of lettuce, but scummy nonetheless.
Why would I go to something that isn’t good and reasonable? Rather make something at home at that point.
Well the US-China trade figures certainly don’t support that. What are you referring to exactly?
https://www.census.gov/foreign-trade/balance/c5700.html#2009
Even starbucks and subway have tip options now
There are 4-5 tables inside Tacofino. Those are basically fast food restaurants Marko. Really good ones, and really reasonable, which is why they’ve got loads of customers, since everywhere else isn’t.
Deglobalization started after 2009. I assume if it accelerates post pandemic, production will mostly shift to low cost “friendly” jurisdictions like Mexico or poor southern states. And it’ll be a slow process anyway.
If the minimum tip on the machine is 18% I will spend the extra annoying time to go to the next screen, but then the tip goes to zero. I wont be manipulated and that is what it feels like. There is only a couple of places where I feel like I get outstanding service in Victoria. But I guess it will work with the tourists.
https://www.theglobeandmail.com/business/commentary/article-bank-of-canada-low-interest-rates-over/
BC Employment Standards:
That’s not my problem, servers are free to choose where they work. So if they don’t like the tip structure then work somewhere else. Just like if I don’t like my pay then I should go find a new job/career
I’ve heard that it’s good to find out where your tip is going. Is it split among servers and back-of-house staff only, or is a chunk of it also going to the owners, which is sometimes the case.
We hardly go out for a meal anymore. We used to go out a lot.
One…..because we still do not like crowded places, but also because the prices just seem outrageous.
I don’t see how they are going to survive. It is a tough racket with high rents, high taxes, etc.
We eat healthier. Know what is in our food. Enjoy making a meal with everyone helping out in the kitchen.
And ….I do not have to endure the big scowls when you ask how to put ten percent in the tip section.
Some machines are harder to navigate to than others. The issue is that when menu prices increase by say 20%, the tip amount automatically increases by 20% assuming a constant 15% tip. So if the minimum is now 18% then you are actually paying closer to 40% extra in tips.
For example a $10 item at 15% tip is $1.5 in tips. If the price is now $12 and you are paying 18% tip then that is $2.16 in tips, a 37% increase. So for servers where the majority of their income is on tips this actually favours them quite abit.
Don’t mind the prices too much or the food but man the hospitality industry sure do complain a lot The sad sacks of the business world
You can just enter a custom percent or amount I’ve never seen a machine without the option
Tipping is a bit of an issue with me these days. The minimum wage is good for restaurant workers today. But I am stuck in the old habit of always adding a tip from the old days when staff were paid poorly. I tipped 15% because its easy to calculate on a bill. Now I’m thinking 10 percent is reasonable.
There’s no 10 percent option on the card machine.
We now go out for a meal about half as much as we used to but we go to nicer restaurants. They aren’t twice as much these days. Deep Cove Chalet is a bargain and has one of the best onion soups (au gratin) in town for $12.00, then add the quail for $35.00. The portions are a good size plus you won’t mind tipping for the service you get. Dress nice, don’t be in a rush and enjoy. (If you’re feeling flush have the Grand Marnier souffle – $16.00)
This is exactly the only reason why we limited going out for dinner. Even Subway’s POS machine showing 10%, 15% and 18% tip options.
I was surprised to see a $25 bowl of chowder at a local restaurant this week – well over $30 when you factor taxes and min 18% tip. This was at a nice pub, but still…
We were fairly heavy restaurant diners in the past but now, when contemplating bills which itemize $28 entrées for very average boil-in-a-bag efforts, we have decided that our interests and the restaurant’s interests can no longer find an acceptable middle ground.. I think all restaurants are facing a very tough decade.
If I have to show a place in North Saanich/Sidney I’ll grab a bite at Maria’s Souvlaki, for example…was there recently and it was very busy. If I have to show some condos downtown, I’ll stop by Tacofino, packed inside, people waiting outside for orders, etc.
I wish for there be a slowdown, maybe I can get some redfish bluefish this spring without waiting 30 minutes in line. The kept closing online ordering last year so I stopped going.
Just not where Marko goes. 🙂
See this recent post from local reddit (with close to 600 vote-ups and responses from mostly 20-45 years old – the prime restaurant goers) :
“My wife and I cannot really afford to dine out in Victoria any longer – the industry has outpriced us.”
https://www.reddit.com/r/VictoriaBC/comments/10j1cc4/my_wife_and_i_cannot_really_afford_to_dine_out_in/
i actually noticed a significant drop off in how busy restaurants and pubs are now compared to pre- pandemic.
There has been a drop in restaurant spending. Consumer spending is tracked through credit card use. My bet is that the trend will continue on the downward trajectory this year.
https://thoughtleadership.rbc.com/rbc-consumer-spending-tracker/
I just don’t see it in day to day life. Resturants still packed. Every day I see like five Ford Broncos (new model that must be like 15L/100km in real world city driving so obviously people don’t care about $1.80l/gas) and 0 brand new Kia Rios (common sense economical reliable cheap car).
I don’t know….getting way more inquiries from buyers than clients wanting to list. I am probably going to retract my prediction from a month ago that we hit 3,000 active listings by May. Certainly, does not seem that way based on what I am seeing.
However, not very far off many other years
2011 – 339
2012 – 372
2013 – 294
2014 – 342
2015 – 351
2019 – 329
2023 – 290 (my prediction)
The one difference between 2011-2015, and 2019 vs 2023 is I didn’t see any multiple offers those years. This January there are a lot (from what I am seeing on the ground); however, the end result is still below asking. I think it might be a function of lack of quality inventory? Buyers are tapped out on affordability but still more buyers out there than half decent product available.
That being said even with the peak lack of affordability the emails I get from buyers every week are kind of insane. Couples in their 20s with 1/2 million downpayments, first time professional dual income buyers qualified with a big bank for up to 2 million, etc. There must be some transfer of wealth going on or similar as something doesn’t add up. I don’t think the average or even above average family is in the market at these mortgage rates.
I think there is a chance that the gap of 2% shrinks through the year (rates went up throughout 2018) and with the bond market the way it is decent chance 5-year fixed rates come into the mid 4s. BC Government workers receiving a 6.75% pay increase here shortly so combined with last year that is over 10% in a span of 6-7 months on a much bigger monthly absolute number. I.e. average family salary going up a lot more $332/month. I know everything is more expensive which impacts a budget, but I can’t see too many distressed sellers either.
Patriotz….I’m glad to hear that they do include the fact that the product is reduced in size. I haven’t eaten a Big Mac for years but I’m told that you can now hold it between two fingers:)
Certainly Cosco has smaller containers now for many products. (Still about one third cheaper than most other stores.)
According to the rules for CPI yes.
Thanks Leo.
I’m looking in a different (and smaller) BC market right now and the decline is more obvious than Victoria. Very attractive places still move at or above assessment value, but anything with any issues does not – it just sits.
I think the biggest factor keeping listing prices higher is likely seller resistance. It is hard to accept 10% less than assessed value.
As far as food goes, the difference pre-pandemic and now is dramatic – particularly in restaurants and for certain products. Hard times ahead for dining establishments if unemployment rates rise I’d think.
Interesting to see graphs and think about what they mean.
For example: Price of food on the consumer price index shows ten percent increase. But does that include the fact that the size of the product is shrinking and you are getting less product.
Another example: If people are now pricing their homes more realistically one might expect that there could be what appears as an increase in those bidding over the asking price.
It will be an interesting spring. If we survive nuclear war that is.
( And that’s my positive outlook even after having my first coffee Barrister:)
Thanks for a good post Leo. Some thoughts… how many of these current buyers have cash vs., trying to lock into a mortgage they secured 3 months ago… I do feel like in a low inventory market this puts pressure on buying as people are “scared” of being priced out, and will take what they can get (I.e., low inventory in January with a rate increase tomorrow), can’t wait to watch what happens this Spring.
Interesting read. I would not necessarily assume that the five year rate will stay this low or that this is the last interest rate bump.
Not having my full first cup of coffee, I was wondering what the natural mortality rate was for housing coming on the market. How many houses come on the market because the owner died?