Mind the gap
There’s a lot of uncertainty about how prices will develop this year. On the one hand we still have higher interest rates than we’ve seen in the past few years and poor affordability is usually followed by price stagnation or decline. On the other hand there is still an inventory shortage and market conditions are pointing to a balanced market rather than continued price declines. We’ll have to wait to see how the spring market develops and how the economy holds up this year.
However no matter how prices develop in the short or medium term, we can be sure that the gap between houses and condos will continue to widen over the long term. In the last 40 years the average house went from about 40% more than the average condo to more than twice as expensive now. The ratio wanders around as the detached market and condo market temporarily diverge, however right now relative prices are roughly on their long term trend line.
The same gap is evident in affordability indicators, with affordability of detached properties getting progressively worse over the last 4 decades, while condo affordability has stayed in a relatively consistent range relative to incomes.
Why is this happening? Simple: detached houses are becoming more and more rare as a percentage of all dwellings. Fully detached properties without a suite have gone from 56% of all dwellings to 38% in 40 years. If we include suited properties the drop is less, but the trend remains the same. If we assume that in general people select housing by their means (census data confirms that the wealthiest tend to live in detached houses while the poorest tend to rent apartments) it’s clear that the percentage of people able to occupy a detached house will be smaller and smaller, and thus the price of these properties will rise commensurate with buying power of this demographic in the long run.
There’s also good reason to believe that the pace of this transition will increase. Leaving politics of the recent election aside, the simple fact is that policy limits on growth outside the urban containment boundary will limit greenfield land for new detached houses. At the same time efforts to allow more infill housing are gaining steam both at the municipal and provincial level. I suspect by the end of the decade every municipality in the region will allow some form of denser infill (multiplexes, townhouses, or small apartments) in formerly exclusively single family areas, whether by choice or mandate from the province. That’s good for bringing down the cost of family-suitable housing, but will further reduce the number of detached houses as a proportion of all homes.
If you’re dead set on buying a house on a full size lot, it’s a trend I would be carefully considering. Though I’m relatively confident that affordability for apartments and hopefully townhouses will return (via some combination of the economic cycle and supply-side reforms), affordability of detached houses may well stay poorer in the future than we would otherwise expect it to. Buyer beware.
Also the weekly numbers.
|Wk 1||Wk 2||Wk 3||Wk 4|
|Sales to New Listings||35%||48%||77%|
|Sales YoY Change||-47%||-37%|
|Months of Inventory||1.2|
Activity finally picked up a bit after weeks of anecdotes about a strengthening market that failed to be reflected in the data. We’re still trailing last year substantially, but of course that is comparing against strong sales figures. Last week I said I am watching the over-ask percentages very closely since they are often an early indicator of the market heating up. Indeed we saw over-asks pick up and we are now sitting at just below 15% of properties going for over the asking price.
That’s somewhat more common with detached properties, with 16% of detached houses going over ask month to date compared to 10% of condos. Does it mean anything? Well first it’s worth pointing out that there is seasonality in the rate of over-ask sales, and it does usually increase in the spring market. Some of the increase can be attributed to normal seasonality and absent any change in market activity we should expect this ratio to rise in February and March.
In addition, as irritating as the tactic of deliberately underlisting is for buyers, it does work for sellers. At the peak of the market I found that properties set up for bidding wars sold faster and for more money than those that were not. The price effect was unique to the overheated market, but when I did the same analysis in the fall I found that underlisted properties were still selling for market value while maintaining the speed of sale advantage. With more buyers around in the spring that likely holds today and remains a sensible strategy for sellers of properties with broad appeal.
However tactics and seasonality aside, the increase in activity is another piece of evidence that the shock of rising rates is mostly digested and some of our normal market balance indicators (e.g. MOI) are more meaningful again as a measure of the market trajectory.
A quick reminder about the difference between the numbers in the chart above VS the tables with weekly figures. The table includes all transactions including non-residential properties that were reported as sold (unconditional contract) to the Victoria Real Estate Board. That includes some properties that sold in previous months but weren’t reported, and excludes some previously reported sales that collapsed, as well as the odd out of area sale that was cross listed. The chart above includes only residential properties in what I would call Metro Victoria (Core, Westshore, Peninsula), counts sales based on when the sale went unconditional (instead of when it was reported), and excludes new construction which are only sporadically added to the database. In general the chart should be a more accurate reflection of the resale market with fewer extraneous factors, but you can’t use it to extrapolate to the figures that the board will report at the end of the month.
On another topic, there are more and more condo buildings voting to go seniors-only (55+) after their ability to restrict children was taken away by the province. I’ve had a lot of inquiries from condo owners whose strata corps are considering this move and I’m working on a deep dive into the impact which will be published next week. Stay tuned.
New post: https://househuntvictoria.ca/2023/02/22/the-cost-of-peace-and-quiet/
Yes, two tier health care for sure. But there’s nothing illegal about that, since these nurse practitioner are un-insured services. They only run afoul of the private medicine if they’re charging for insured services. At least that’s what they claim. Devil will be in the details. Meanwhile it sounds like an inexpensive useful medical service ($30/month/child) that should be covered by government, at least for those unable to afford it. I just paid $600 to the vet for my cat’s “pink eye”, so $30/month for human care doesn’t sound so bad 🙂
This is getting a lot of press in Ontario and it’s being attacked as two tier health care, which of course it is. Interestingly one of the doctors involved was interviewed on TV and he said he’d be perfectly happy if it was a listed Medicare service and the province paid for it.
My assumption is that autonomous cars would simple refuse to move (or pull over) if road conditions were not up to spec. My guess is that they will refuse to go when a lot of drivers would “just risk” driving. It will be interesting to see what sort of reviews they get when that happens. Icy roads being the obvious obstacle to a vehicle that is counting on the laws of physics.
An autonomous EV transporting an immigrant family would really tick all of Frank’s boxes.
Autonomous vehicles are likely to be safer for pedestrians and cyclists in the long run. I assume autonomous vehicles will be programmed to obey speed limits and stop at stop signs and yield right of way at crosswalks. That already has the potential to make them safer than 90% of drivers.
Autonomous vehicles won’t be playing with their phone, reaching down for the chip they just dropped, glancing back at the kids fighting in the back seat or checking out the cute driver in the adjacent lane.
Autonomous vehicles won’t get tired, drunk or high.
I recognize that fully autonomous vehicles are quite a ways off but at the same time we need to realize that being safer and better than the average driver is a low bar to clear.
Both drs and nps can already offer these services in BC – and do. They have to opt out of MSP though. This means they charge a monthly fee to patients. Higher than $30, but it can be worth it if you don’t have a family doctor or don’t have a family doctor that is easily accessible or willing to do more than the minimum.
According to this cbc article, this is a simple, legal (not a violation private medicine rules) Ontario solution to some of the primary medical care access problems, especially for parents needing antibiotic and other prescriptions for kids 7 days a week. It frees the Doc up to see more urgent cases, and gets the kids treated soon by a nurse practitioner . Let’s hope it’s also here in BC or will be coming soon. https://www.cbc.ca/news/canada/toronto/ontario-health-care-pay-optional-fee-nurse-practitioners-1.6755305 “ For $30/month, Ontario doctors offer rapid access to nurse practitioners”
As far as the self driving discussion, I agree that we are not there yet and it will take some time. But twenty years goes by very quickly. (I also think it will happen quicker than that. My “Guess” is less than ten years. )
Governments will have to allow it because there will be lawsuits claiming damages for having blocked it as autonomous gets better than humans driving drunk, drugged and full of testosterone).
And…when did humans ever drive well in snow:) Have you ever experienced how they drive coming down the Coquihalla…… like a bat out of hell in winter? Autonomous driving is Progressing in snow also.
Whenever I mention this kind of technology I do feel a strong pushback though:)
Ha ha Much like when I used to suggest that many people would be working from home. I used to get a ton of blowback when I made that kind of suggestion. “Can’t be done…blah blah blah” 🙂
I just heard that Eby has proposed allowing many government employees to work from home as long as they are still in BC. This kind of change is going to alter how we live and work. Whether we like the idea or not. It’s happening now and cities will have to do something different or they will be left in the dust. (Think Route 66 in the USA)
That’s why I think this topic fits well in a real estate blog.
It’s so hard to predict anything of course, but it’s useful to kick ideas around.
It’s news if the car is driving itself.
I don’t know that quoting a movie that’s over 30 years old is helping your case?
“Face it, girls (James Soper). I’m older and I have more insurance.”
-Fried Green Tomatoes
That is my best guess as well 20 years +/- 5 years.
Just like lots of EVs are catching fire….will ignore that it is at a ratio of 1/50 of ICE but lots not the less.
Tesla in the middle of no where crashes on the highway and someone is killed….all over the news. 500 other cars crash on the highway and people are killed…not in the news. Funny how that works.
Not to mention drivers looking down at their gadgets.
In downtown Kamloops the occurrence of people stepping off the curb looking down at their gadgets with no concern for traffic is so problematic that the city has painted large letters on the road edge advising people to look for traffic.
The autonomous EVs are exploding and burning them alive. (/s and apologies if this actually happened).
Sounds like you need your eyes checked, and that you shouldn’t be driving at night time.
For in town driving, I won’t have a problem using an autonomous driving car as the speeds they travel will be lower than non autonomous. I’m going to be safer, but less so for pedestrians and cyclists.
Pedestrians and cyclists will just have to learn to be more aware and obey the rules of the road. As they are more likely to get hit when they break road rules and don’t use their common sense.
Victoria has blind corners due to fences, parked cars, trees, shrubs, etc. It’s common for pedestrians and cyclists to pop out from these blind areas to cross roads. They seem to be under the impression that if they can see the car’s lights then the driver can see them. But with the high intensity headlights and bi-cycle strobe lights used today, drivers lose their night vision and are blinded for a few seconds as their eyes readjust. Pedestrians are oblivious to many of these factors and compound the problem by wearing non reflective dark clothing at night.
There are some areas that seem to be worse than others for me. Pandora near McDonalds is one. Another is in Oak Bay Village. And sidewalk bulbs that put a pedestrian just a step away from oncoming traffic. People just wander out onto the road without thinking.
When driving at night, I use my infra red sensor screen and it has saved me from having accidents as the sensor picks up warm bodies before I can see them with head lights. As long as some portion of their body is protruding from behind an obstacle the sensor will pick up their heat signature. I also have automatic breaking which has saved me a few times on the highway as drivers cut you off to make the exit ramp. Both systems work well with detecting deer in Victoria.
So, I am looking forward to autonomous driving vehicles. I think I’ll be safer using them intown with all the poor street lighting, blinding head lights, etc. Pedestrians and cyclists will just have a steeper learning curve.
Autonomous driving cars are killing lots of people. They also don’t work on snow covered roads. People have been watching too many Jetson’s reruns. I would never ride in an autonomous vehicle.
Delayed due to weather 🙂
Fully self driving cars are at least 20 years away in the future, We are still fiddling away at Level 2 of the FSD. To achieve Level 5, it is probably going to 2040-2045. Each level will take a minimum of 5 years to validate. A major sticking point will be liability issue. If a self-driving car gets into an accident, who is liable: car owner, manufacturer, or transportation authority that approved the car?
If the goal is to reduce car ownership, reduce traffic congestion, increase the use of public transit, etc., a sin tax similar to tobacco & alcohol will be effective. Increased license plate fee, driver license fee, tax on parking spaces, gas taxes, etc. may be considered. Those additional taxes may be used to reduce public transit use costs and to upgrade or plan new transit modes.
It’s a fantasy though. Cabs need to be cleaned daily, and the majority of people use their cars at one specific time, to and from work. One thing I could see being more efficient is car pooling, but I’d be surprised if it’s more people car pooling and not just nicer for the people who are already car pooling.
Because the biking infrastructure isn’t there. I wouldn’t bike on the #14 either, even without a kid in tow. Look at what they did between Tofino & Ucluelet, I doubt anyone actually bikes the length of it regularly, but you see so many kids on those trails.
There have actually been lot’s of articles on how most cars are parked most of the time doing nothing. It’s one of the attractions of self driving cars because it will mean cheaper rides for everyone. Check out Tony Seba for example. ( I guess he would be called a futurist and he talks a lot about disrupter technology.)
Self driving cars will mean less vehicles needed because many of them will be being used….meaning cheaper transportation costs for everyone.
Even today, it only costs me a total of $1.75 in electricity to go into Victoria and back to Sooke which is less than half what it would cost me on the bus for a return trip. (I need to own a car anyway because I take our bikes to the goose and my canoe to a nearby lake ….along with lumber for building my fence, building a garden shed, stairs to my garden, soil for my garden, taking my grandson to the various beaches and trails around Sooke etc etc.)
I am older and my wife and i don’t feel safe on the main roads with my grandson in the back of the bike. So we stick to the trails only.
Those cars would still require the same roads to drive and the same spaces to park. And they would cost just as much – which means not affordable for everyone.
Not saying streetcars are necessarily the answer, but the idea that self-driving vehicles would eliminate the need for public transit makes no sense.
New post delayed until tomorrow, just finishing some stuff.
The old street cars served people who had no real alternative at that time….such as we do have today.
Sorry…but rail cars for Victoria is not going to happen.
Why would we go to rail cars now when in a few short years cars will be fully automated. Taking you door to door. Some will be owned, some will be owned but also contributed to share with others.
I know many people are very skeptical that this is going to happen, but I am convinced they will figure it out. It will make buses and rapid rail lines obsolete because it will take you door to door.
PS: On another note…..Leo – sorry if I misunderstood one of your points.
Thankfully we don’t have to provide parking spots in apartments for rental fleets, taxis, buses, delivery vans, corporate vehicles, fire trucks, police cars, ambulances, semi-trailers, tow trucks, garbage trucks, dump trucks, cement trucks, vehicles for sale etc. etc. etc.etc.
Yes still lots of personal vehicles but no need to exaggerate.
And, thanks for the discussion 🙂
Huh? I said don’t put your finger on the scale by requiring minimums or restricting maximums. That’s the opposite of blocking cars
That’s why effective missing middle policy is so important. What we need for families is homes, not a guaranteed 2 parking spots for everyone
They’re all vehicles, that can be clogging up traffic, polluting and require parking spaces. If you exclude them (buses. trucks) numbers will go down by 20%. So that makes it 1.02 personal vehicles per household in Netherlands, instead of 1.28. So what? Still means they have lots of vehicles in Netherlands, and need lots of parking spaces, as do we.
from the data source you linked to
“This article is a list of countries by the number of road motor vehicles per 1,000 inhabitants. This includes cars, vans, buses, freight and other trucks”
Therefore actual personal automobiles would be substantially less than 588 per 1000
Countries like Netherlands still have lots of cars. . About 1.28 cars per household! You gotta park ‘em somewhere. We can’t replace detached houses (with 2-3 parking spots) with apartment units with little parking.
Netherlands = 2.18 people/household X 588 cars/1,000 people = 1.28 cars/household
On this list of countries by number of cars per people, we can see the single country that has achieved the walking/biking utopia that some HHVers are seeking for Victoria, of only 1 car per 1,000 people…. North Korea!
Who’d the street cars serve then?
I’ve been to cities that are the size of Victoria and smaller in the Netherlands that are well served by rail. How do they manage? Probably not by spending $100 million on an single overpass for cars.
Reasoning from ideology tends to lead to bad decisions.
“Evidence from places that have done this shows that developers build less parking in central locations and more parking further out in areas that are more car dependent. It works out.”
It likely does “work out” …from a parking perspective….if parking of cars is all that one considers.
But the part that might be missing is what that means for the demographics of a city that blocks the use of cars.
Keep in mind what happens to this development will also likely be repeated for further developments because what is proposed is fundamental shift in how a city is planned.
As I said before, I feel that it will likely create a city with older people and fewer options for families that want to have kids.
Time will tell I guess. But is everyone willing to take that risk? I would have thought that diversity of age groups would be important.
Victoria does not have the population for rail or rapid transit. In the past……I believe that the rail line served the lumber industry for the most part. A totally different game.
I’m all for better public transportation, and more bike lanes. supported by our tax $. But sorry, I prefer to ride around in my EV, and want to be able to park it too.
Month to date activity:
Sales: 295 (down 38% same time last year)
New lists: 565 (down 11%)
Inventory: 1812 (up 118%)
No need for [img] tags it will auto-expand pictures that are linked. The reason this one doesn’t work is that it’s on a non-secure site so it won’t load.
And yet 5 year bond yields hit 3.6 today.
Fairly benign inflation report this morning which increases the odds of BoC doing not much for a while. Headline annual inflation likely to keep falling for a few months. This is just based on arithmetic not foretelling the future. Every month for the next few months we will be dropping a high inflation month of early 2022 out of the annual calculation
These are the requirements for new development however. Older stock, particularly from the pre-auto era which is not that far back in Europe, is likely to have less parking. So it’s not indicative of average parking/unit.
Good luck with that. That technology always juuuust around the corner.
Attached now :s
Comments are weird that you can use markdown the first time, but as soon as you edit, it no longer works. Nevermind… it worked the first time though?
[img]http://www.ardmoregolfcourse.com/uploads/2/5/3/4/25345447/1454880268.png[/img] — tried a bunch of variations, but none seem to work.
That’s an interesting find Leo!
My point was that if no parking spots exist, it would definitely drive the price of parking up along with the cost of operating a vehicle. More people would choose & back active and public transportation. Victoria’s actually got quite good public transportation for NA, but you go to a similar sized city in the Netherlands and it seems pretty rough (a similar sized city in the US might as well not have one at all it’s so bad). You look at Victoria pre-car though and there was a rail network already, with links out to deep cove and central saanich, as well as street car service in town. In a city under 100k no less.
Parking minimums in various cities. 0.2/unit would be quite low even for Europe. Of course these cities also have a functioning rail network
What is the average parking ratio in apartments in various European cities?
Houses aren’t a viable substitute for most people renting apartments, parking or no parking. What might happen is market rents for apartments with parking (either PBR or condo) being pushed up a bit if the number of apartments without parking ever becomes significant. Which I doubt.
Lack of parking in apartments will only drive house prices higher. Thanks.
If this was all the buildings, we’d have much better public transportation, like they do in europe.
Curious how many years you’ve been saying this.
I think even a nominal amount would make a big difference. How many people would start actually using their garages and driveways if parking on the street cost even $50-$100 a year? Of course not everyone has that and concern around equity impacts is why the effort to do this in Vancouver failed, though I don’t think they did a full analysis.
It is true, I suspect all this math will be very different when you can call a self driving car to access further away places on demand.
Tend to agree. An analysis of parking usage at a number of downtown apartments found usage at around 0.6 cars per unit. The consulting company concluded it could be reduced a bit further with transportation demand management measures but going to 0.2 seems excessive. I don’t think it’s a huge problem and this building will simply attract more renters without cars, but it’s not sufficient if this was all the buildings.
I have to agree. We walk, bike, bus and carpool a lot with our kids but it would be a tough sell to give up our one family car that lets us get out of town. From what I see in my demographic (double income, multiple school age kids) going “car-light” means making do with one car and filling transportation gaps with biking, bus or modo. That said I have met a handful of families at our kids schools that own zero cars and do just fine.
1 spot per two units is already aggressively reducing parking, 1 per 8 seems a bit crazy.
In a few more years I expect my car to drive me around town so no fear there
I think that the city should consider charging a fee for all street parking. Perhaps a monthly permit for parking between two and six. Charge one or two hundred a month for the permit. Should be a great revenue stream for the city.
I suppose all this parking hub-a-loo is going to make my unit that has a dedicated parking spot a block from Harris Green a hot commodity. Since I don’t see needing a vehicle when I take over the unit I could probably rent the parking space and subsidize my retirement.
Exactly the reason why we need to abolish parking minimums. Forcing developers to build more parking than necessary is bad because it downloads costs onto people for something they don’t necessarily need, and contributes to the housing shortage. Forcing developers to build less parking than they want like at Harris Green is also bad.
If you remove parking minimums developers will do the market research and build as much parking as they believe will be demanded by the residents. In most central locations that will be substantially less than the minimums required by most cities by the way.
Evidence from places that have done this shows that developers build less parking in central locations and more parking further out in areas that are more car dependent. It works out.
It’s nice that someone else gets to decide if they get to to have their access to a vehicle and society based on a statiscal interpretation (oh, you don’t meet our modelling, too bad. You see, there’s a bunch of people in SFD houses that have 3 cars in their driveways that want to make a statement about how much they care about the environment and have a walkable city, so you can’t park your car where you live). It also comes down to market and the market wants to have parking where they live. It would be funny to see 1500 units go into circulation in a housing shortage and not get rented, well until the price drops on the units (maybe the developer might be concerned about this happening) or maybe council is more clever than we give them credit and it’s a round about way to drop rents..lol… Having lived in that area, the building of condos there without adequate parking in the last few years hasn’t forced people from their cars, it has just created chaos with the street parking all hours of the day (on an almost daily basis, got to see folks from the Juke in tears realizing they were towed for parking in our buildings spots). Command economy negative reinforcement measures tend not to be effective and just as restricting building pipelines will not reduce oil consumption, reducing access to parking will not chase people from their cars, it will just piss them off and they will punish the people in office that made it happen.
At age 65, 85% have a drivers license.
At 85, that’s down to 45%, and at 90 it’s just 25%.
We’re going to have a lot more old people that can’t drive in the future
Not to mention that many people will lose the ability to drive altogether. The ability to age with dignity is a key reason to build communities that do not depend on people’s ability to drive to get the basics of life.
People in a city? Whatever will they think of next
I caught the sandman reference.
There be no place for sick or old people in a utopian society, because the eco-sandmen will make sure of that.
And, what would happen if 3000 people descend on to the street all at once during morning rush hour?
The theshold is:
LeoS: You can face some real mobility challenges and still not meet the threshold for a handicapped sticker. Old age can be a bitch.
He specifically said he had a disability that impedes mobility. You should be able to get an accessible parking decal with that.
Or we just ensure there are enough designed accessible parking spots in these places.
Kind of of like with the more housing being built, the likelihood of greater chance of people finding housing. The more parking available the likelihood of a person with compromised mobility will find a parking spot and enjoy the access the others do.
Maybe it should be called Soylent Green?
There is actually a bit of a shortage of handicapped parking in this city considering the number of seniors that are about.
Readdict: Thank you, much appreciated.
Barrister, 8m for a flat roof and 9m for any other roof type. For a houseplex.
I don’t think the poster required an accessible (handicapped) parking spot. He is just someone that needs a regular parking spot. And there’s lots of people like that, who require a car to get around, and a place to park it.
No parking minimums doesn’t mean no accessibility parking minimums. You can reduce overall parking allocations while still maintaining full accessibility.
Even insist every spot has an EV plug not a big deal. But yes, I have two condos downtown without parking and over the years >50% of the tenants have owned cars. Street scramble, robbins parking lots, find an owner in another building that has parking, asbuse visitor parking in the building, etc.
I don’t know how people get elected into these positions with zero life experience/common sense.
This whole debate about parking always – always – conveniently ignores those like myself with a disability, where the ability to use (and god forbid, park!!) a car is absolutely essential for getting around. It’s especially difficult to get the younger generation (now moving into the position of making the rules) to understand this is even an issue, as politicians keep moving stridently along the push to mandate everyone to walk or stand to wait for a bus otherwise we are “bad”.
Yes, they will rent them. And many people renting them will own cars, and just scramble to park them elsewhere, like on city streets. This is what the councillors will achieve by this silly idea.
If they want to be eco-friendly they could allow them to have the parking spots they want but insist they have lots with EV plugs
Sure Boomer I’ll vote for that after the city passes the bylaw that only one vehicle per household is allowed that has to parked in their driveway.
As long as the rental market is this tight they will probably be rented. A friend of a friend rented a newer condo in the 800 block of Yates that did not come with a parking space. For several years he kept moving his car around using street parking. While a bit extreme, it does go to show the extent people will go to to keep driving. Personally I would like to see the city insist on prospective tenants having to sign an agreement to not own a car or proof of a 24X7 parking space as a condition of occupancy. At that point I would allow the developer to provide whatever parking they choose.
Lack of parking may have an effect on rental income. However, usually the parking space is rented separately from the unit when a stall is available.
At 1.5 % vacancy rate they will rented, but it will take longer to reach full or near full occupancy. And when they become vacant due to tenant turn over they will take longer, than a condo that comes with a parking stall, to lease up again.
Tenants also own cars. If you’re a prospective tenant, that owns a car, then these units would be off your list.
What is the height limit for the MMHI as passed? With all the back and forth I lost track. I am having trouble finding am answer on the city site.
Yes…Patriotz might be correct. They might very well rent them anyway….if the developer believes that the numbers work and continues on with the project. (My guess is that they will make a compromise deal.)
I would think that this policy and direction will only encourage further, the model of a city, with people who are retired, and people with no kids.
I’d rather see a city that encourages children, and more working young people with families. In general, those people need a car……haha…. in my opinion.
What was the vacancy rate in Victoria again? Lack of parking might affect the rent they can charge, but let’s not think it can’t be rented.
I have to absolutely agree with Marco and others that this parking issue literally spins my head around several times. It feels like bureaucrats, who have a horrible reputation to start with, have covid brain or something.
It will be interesting to see what the developers decide. They might be stuck with a building that they can’t rent out very easily because many people place a value on having very flexible lives that a car provides. (The lack of a car changes everything for the diverse needs of families with children, tools for work, camping trips, reaching forest trails and beaches, daycares, visits with children’s friends, music lessons/big cellos, sports for the kids, etc etc.)
This reminds me of the same logic and short sightedness where someone said….”No one should drive a car… everyone should hitchhike instead”.
Read a a little piece about the Toronto market is a buzz with activity with little sales to show for it This seems to be the narrative across the country
What is the height limit for the MMHI as passed? With all the back and forth I lost track.
The last minute change to Harris Green was definitely a bad move. Not a good plan to impose last minute changes on a project at public hearing. Worst case the project is jeopardized, best case it’s bad governance.
They should have just passed this project and then scrapped all parking minimums to bring parking down to the minimum that is feasible while keeping units marketable in future projects.
But Caradonna introduced a similar last minute motion on missing middle and cut max heights. Bad instincts
This is a head scratcher for me, like wtf is going on. 10 years ago there would have been outrage over 0.5 parking as in not enough and now they are trying to cut it down as too much, what? Developers build parking at a loss (excavating, blasting, trucking, concrete, waterproofing, etc., is ridicolously expensive). Why not let the market determine parking? (if you aren’t concerned about a minimum number of spots).
If the developer wants to dig 5 stories down and go bankrupt in trying to provide 2 parking spots for every unit who cares? Does a below grade parkade impact anyone? Nope. Does not enough parking impact anyone? It could if everyone is trying to park on the street as a result. It is a perfect way to piss off NIMBYs even more so they come out in droves to elect the next council.
Secondly as much as I love no cars, walkability, electric cars, etc., let’s be real here. People are still going to want cars even if they work and live downtown. Is a family with a child really going to rent a car every time they want to go to Tofino or Mount Washington or Costco or whatever. Modo is not going to work for everyone.
Tough to predict the market but it is going to be one of the more “premium” spots in Royal Bay long term…away from the commercial, schools, almost no traffic as the 4c area is a dead end not going anywhere. It has a bit more elevation than rest of Royal Bay, etc.
What is your point?
(or is this a just weak justification for an anti-immigrant point of view?)
There are no loopholes to get benefits for Permanent Residents and Citizens in Canada, beside can not vote or hold high-level security clearance jobs. However, PR still have to pay taxes exactly the same as Canadian citizen.
I lived in Canada for 4 years with PR status, and coming on 39 years as a Canadian citizen.
It won’t go away at anytime soon, unless some other form of currency remove the USD from the international de-facto trades currency.
The only benefits tied to citizenship in Canada are voting and eligibility for a few government jobs. I’m not clear what you’re talking about.
Immigrants & citizens pay $7,000 per year at UBC where as foreign students pay $45,000. This is compared to $30-50K USD at public universities and $60-75K USD per year at Ivy leagues in the US. If I have two kids in that age group, I would spend the $10K to get immigration and save $150K per kid and $300K total for my kids’ college education. I wouldn’t really care about my own citizenship. This is another loophole to get the benefits without actually becoming a citizen. Many people that I know have taken advantage of this.
Thanks for clearing that up Marko, guess I’ll have to take a drive out to Royal Bay and investigate myself. Hubby and I are interested in a new build there, asking price is still $1.4, it’ll be interesting if this particular house comes down at all.
Does anyone know if 1920 Waterloo sold or was just removed from the MLS?
If i look on the ReMax “Newest” page I see a “New” tag on the listed properties.
Ten of them also have a “Collection” tag, do any of you know what that means?
Hopefully, it will last as long as the Roman empire since Canada is tied to our southern neighbor. Still better than our northern neighbor.
I went to school just outside of Atlanta in the early 1980’s and also noticed more expensive cars in parking lots. I got the feeling that people had more money and attributed it to the 100 year head start they had over Canada. Sadly, they also got free slave labor for close to 100 years, something I don’t think existed much in Canada. My first roommate’s parents owned a radio station in Florida, a couple of my classmates had short careers in the NFL, my girl friend’s parents had a farm in Alabama and a home in Daytona Beach where she grew up. It was a real eye opener. The US has a huge poverty problem, approximately 30% of the population, but the wealthy sure are rich. At one time, a country’s wealth was determined by their gold assets, and the California/Alaska/Nevada gold rush gave them a head start. Not to mention the oil rush in southern states. A multitude of factors made it the wealthiest, most powerful country in the world in 250 years. Hopefully it won’t go the way of the Roman Empire.
I have multiple clients that have bought in secotor 4 C and their homes aren’t slated to be finished until August so impossible for them to be completed and sitting vacant. If you swing by you’ll see there are homes where the framing hasn’t even started.
Sandpiper (the street below) most homes have occupancy now but only a couple of the developer homes are unsold. There are brand new re-sales.
Marko, sector 4 C are all new builds, most are complete and sitting. I have friends that live in Royal Bay and they have stated this so this is why I was asking.
Insider contacts tell me something big got signed in Royal Bay.
It’s interesting, isn’t it. Similar phenomenon, some 15-20 years ago wife and I used to drive down to Bellingham to go shopping at Bellis Fair mall once in a while, and it was almost shocking to see the parking lot look like a new car showroom all while we were driving around in usually some 10-year old car we had bought for a few $k and on which I did the basic maintenance myself. Always wondered how the American public could afford to buy all those newish cars when I couldn’t. Of course, the answer was, they couldn’t either, a lot of it was just borrowed funds and we saw what happened in the 2008 crisis.
I went to visit a friend in a large apartment complex and was shocked to see parking meters in the lot for visitors. Several people I know have 2 parking stalls per apartment. These councillors are idiots. Cars symbolize freedom.
Marko, I dont think the commercial development at Royal Bay will make the houses just a little more desirable I suspect it will make them a lot more desirable. I also suspect that there will be a shift to the West Shore for a lot of businesses.
Yes. Absurd “eco-zealot” condition to approve the apartment but not the required parking. (By reducing parking stalls from 1/2 units to 1/8).
The decision isn’t binding, so they’ll likely compromise to something like 1/4.
Imagine the arrogance of these councilors to think that 7/8 of these units should not have a parking stall. How many of these councilors have parking stalls where they live and work? Probably all of them.
Soon parking will be unaffordable.
I just had clients buy in Royal Bay a few days ago and wasn’t aware of 3-4 blocks of new builds? Gablecraft has a house here and there ready for occupancy that is for sale but certainly not blocks. There would be blocks for sale; however, they’ve always had blocks for sales in terms of pre-sales. Nothing new on that front.
Verity (the other developer Gablecraft sells lots too) is almost sold out as they’ve had 9 sales in the last three weeks in Royal Bay
Sold out – https://royalbayhomesbysouthislandhometeam.com/price-tideline-lane/
One left – https://royalbayhomesbysouthislandhometeam.com/price-sandpiper/
Everything depends on the market but my gut feeling is once the new commercial area opens up (grocery store, etc.) Royal Bay just becomes a bit more attractive.
Marko, any idea if the new builds at Royal Bay are going to be reduced further? I’ve noticed there are 3-4 blocks of new builds just sitting.
The developer realizes the importance of providing parking for tenants. Without enough parking that will make the units less desirable to rent.
We will never get rid of personal vehicles. They will still be here a hundred years from now when the concrete in Harris Green begins to crumble.
Council working hard to shit the bed on adding rental stock to pander to some eco-zealots to score some dogma points. Somehow how folks wonder why it takes forever to build something and that cost get driven so high. Oh wait, you’re 4 years into this, let’s change things up again, because we think you’re too invested walk away.
“Climate change is a secret driver of inflation”
Ohhh **** I didn’t scroll down that far. Okay not sure who is the bigger moron here the home owners or the reporter. Wow! “We bought a house, renovated it, two expensive cars, two dogs, and life is a nightmare!” Give me a break. Nightmare is a serious sickness in the family not stupid financial decisions you can work to solve. Are they going to sell the Santa Fe to buy a used Prius C? Of course not.
This was not my experience as an immigrant. More along the lines of getting chased by a dog trying to climb a car somewhere in Oak Bay so I wouldn’t get bit 🙂 while delivering fliers.
Perfect summary. I’ve never understood why agents that fail which is like 90% don’t even bother to try lower commissions before they leave the business back to their real job. Everyone can see everyones sales statistics and I’ve never received a phone call along the lines “hey I can see you are selling a huge number of properties on a lower commission model, would you be willing to chat?” I would gladly help anyone with advice and would provide all my listing contracts/paperwork/presentation material for things like mere postings but no one ever asks they just opt to fail.
Agreed with the car payments, but I’m surprised you didn’t see that they also had two dogs. 😉
That looks like a 2020 Santa Fe in the background on the driveway. $1,100/month in car payments on $140,000/year…….that is piss poor financial literacy. I would be driving a Prius C @ $140,000/year so I could max out TSFA/RRSP but each to his own.
They took out a loan for a renovation on what appears to be a 1990s house which means this house would have been perfectly functional when they bought it, but of course everyone has to living the American dream with quartz countertops and stainless appliances.
I was in Kettle Creek yesterday and Royal Bay this morning and the level of cars is plain shocking. In Kettle Creek alone I spotted four Teslas, Land Rover Vogue, multiple F150s and not the contractor version, SUVs galour, etc. I think the average car in a newer subdivision in Langford is up there with average car in south oak bay.
As much as people are complaining about interest rates and inflation when I see a new car on the road it is more likely to be a 55k gas guzzling Bronco than a $23k base Mazda3 hatch.
Because they are not government funded. Universities receive substantial per student funding for domestic students. They can only admit as many domestic students as they get funding for.
Because undergraduate foreign students are cash cows to contribute $21 billions a year to Canadian economy, without them, there would be many universities to shut down or government must raise significant tax to offset the operation cost.
Because Ph.D students are cheap labour to support academic researches, without them, almost all science, engineering and IT professors will either lost their jobs or move to other countries where they can find enough Ph.D students to support their research, or Canadian universities will lost their current global rankings.
Foreign student or Cuckoo Smurfer?
Looking forward, hopefully these children and students educated in Canada will stay afterwards to become part of our labour force and contribute back to our society, like lots of them/us have done.
I have no problem with my taxes subsidizing post secondary education. Just compare the different debt levels between American and Canadian doctors after completing their education. Someone has to pay for that debt, that has to be paid back, in the form of higher medical fees charged.
In fact I would say that the government should be self funding Medical Practice Insurance in order to lower costs. Just as the government does with their military vehicles on our roads. It’s cheaper to pay the claim from an accident than the combined insurance for all their vehicles.
Competition for a seat in universities in many countries is fierce. Canada seems to have lots of room for foreign students, not sure why, I guess too many Canadians don’t require an education. Many seats go empty and that leaves room for foreign students, says something about the state of our citizens.
Reading the first few paragraphs — my reaction: don’t have a ton of sympathy for these two.
Then I see that they have two car payments and…my sympathy drops to precisely…zero.
They bought their home in March 2022. Why this Ontario couple calls the purchase a nightmare
Canadians pay for their education, and although it is somewhat subsidized it is NOT basically free (and those who are not citizens or permanent residents pay more) .
**edited for accuracy
The municipal part. The “school tax” goes to the provincial government.
I think that’s why there’s so many units for sale at condo on johnson street
They’re not becoming Canadian citizens and cannot find suitable employment, yet they stay in Canada. For some reason no one is starving to death unlike other countries.
As for property tax, that goes to municipalities, income tax is a totally different thing, comparing the two doesn’t make sense.
If you have dependent family in Canada, you are considered a resident for tax purposes. This is a tax enforcement issue not an immigration issue. Having said that, collecting more revenue from property taxes – which cannot be evaded – and less from income tax would partially address the problem. This is the rationale behind the “satellite family” spec tax.
Also whether you are a Canadian citizen or not has nothing to do with Canadian income tax obligations.
Taxpayer-subsidized housing units probed after rents soar
I know many immigrant families in which the husband goes back to their jobs in Middle East and Far East while their families in Canada collect hefty CCTB checks and other tax and health benefits. They don’t disclose the husband’s income. Later on, their kids get basically free college education in Canada without paying any taxes. Our immigration system is broken in so many different ways.
Since there is cheap$ option for mls listing only, I don’t see any benefit for for-sale-by-owner listings. Once it’s on the mls. People will find it, and they are likely represented by a buyer’s agent, who is motivated to make the sale happen.
If people want to pay full price to RE agents, then that’s the free market at work, and so be it. I don’t see it being an anti-competitive problem, just a stupid (unfixable) human nature thing of wanting to pay more for no good reason. Let the RE agents with no sales have no clients and make no income, as they don’t take any initiative to promote lower commissions.
You can’t fix stupid.
Ignorance is bliss. Home inspection didn’t identify any obvious suspects for asbestos so I never had anything tested.
Definitely aluminum wiring in the original (upstairs) part of the house. The downstairs was finished later and is copper.
Never had an issue with it except one outlet meant for copper that the previous owners wired to aluminum so it melted the DC adapter for the hot water tank. Everything else seems wired correctly. If the insurance starts making a fuss about it eventually I might rip it out, but so far it’s a non-issue.
Perimeter drains fully replaced by the previous owner.
Very. Maybe I’m weird but I simply don’t care about the house very much. My dad custom built our house to an extremely high standard, everything was over-engineered and hand-built. Our current house is slapped together. While I appreciate the effort and attention to detail in the custom house, day to day it literally makes no difference to me at all. Maybe some people pay more attention to this stuff. If the house is dry and warm and big enough and the windows are decent that works for me.
Probably a bit of both. Foursquare wasn’t a FSBO business in any sense of the word, so most of that email doesn’t make a lick of sense. But propertyguys.com is, they’ve been around for ages, and yet have near as makes no difference zero marketshare. Why?
Sounds like it was written by a realtor. I highly doubt this is the reason.
Foursquare, then known as PurpleBricks, overspent on marketing – trying to catch on in Ontario in 2019. Foursquare overspent to the point that it was sold to Desjardins in 2020 with a $4.8 million adjusted operating deficit. It was sold along with the very popular and profitable similar concept sales platform Duproprio in Quebec – also formerly owned by PurpleBricks.
Desjardins took over, and then tried to rebrand Purplebricks as Foursquare in Ontario in January 2021 – height of the market. Then the market in Ontario crashed and sales dropped to a 14 year low. That wasn’t part of their projection.
My take, the takeover at a loss, and rebranding, cost a lot after paying 60 million for the acquisition and the ROI going forward is uncertain. They cut their losses and decided to focus on the profitable business in Quebec.
Interesting email re FairSquare closing its doors
“FairSquare Realty is Closing – Is this the End of the For Sale by Owner Industry?
On February 16, FairSquare Realty announced it was closing its doors. It’s significant in that FairSquare, which started out as Comfree in the early 2000s was the largest and most successful For Sale by Owner company in Canada. So what happened?
Looking back, I would think the For Sale by Owner (FSBO) Industry reached its peak in 2007. Housing prices were climbing, and sellers watched as their home values doubled or even tripled. The real estate industry was hot, and the internet was opening the door to For Sale by Owner companies like Grapevine in the east and Comfree in the west. Sellers could simply throw a few pictures on the net, set a price and bam! Their house was sold. No headache. No agents, and no high commissions!
These companies were very successful, and if you talked to their executives, they would tell you that this was the beginning of the end for organized real estate and the Realtor. Fast forward to today and the major For Sale by Owner companies have either closed or morphed into something completely different.
In the end FairSquare Realty wasn’t technically a true For Sale by Owner Company, but it did represent the biggest and best of those For Sale by Owner Companies.
Starting out as Comfree in the early 2000’s, the company was purchased by a large corporation out of Quebec. Comfree was now a large corporation with big money to back it and with a goal of achieving a 32% market share, but ultimately it never even came close!
In 2015 Comfree was then purchased by Yellow Pages and three years later sold to Purple Bricks. Purple bricks was a For Sale by Owner company out of Australia that also had a large presence in the United States, and I believe in Europe as well. Their aspirations were obviously global. However, two years later, Purple Bricks closed its doors in the United States and sold its Canadian holdings to a subsidiary of Desjardins, again a large corporation out of Quebec, who rebranded the company as FairSquare.
FairSquare moved to position itself more on the regulated side of the industry. By embracing Realtors, FairSquare hoped to offer better service to sellers and charge higher fees. But moving more to the regulated side would also help them finally gain access to buyers and the additional commissions that came with that. Something it was never able to do before. Either way, it’s been quit the ride from Comfree to FairSquare to today.
So why did this massive company go through so many changes and ultimately fail?
The #1 Reason Fairsquare Failed.
They failed to acknowledge that real estate was a human business.
The process of selling a home is often an emotional one, and that has a big impact on the decisions sellers make. Not understanding that and thinking real estate was simply transactional was huge, and it was that way of thinking that led them to make the business decisions that ultimately led to their demise.
The #2 Reason Fairsquare Failed.
They failed to acknowledge the complexity and fluidity of the real estate market.
FairSquare will tell you the reason they failed was because of the weak housing market. Put simply, they failed to understand that real estate markets constantly change, literally from day to day and week to week. From a business model perspective that’s a big miss. From a human perspective it shows that even if you can connect with sellers at the beginning of the process, the advice you provide today may not be relevant tomorrow, and that brings up the importance of working with an honest and experienced Realtor.
The #3 Reason Fairsquare Failed.
Failing to Acknowledge the Value of a Realtor
The ongoing relationships Realtors have with sellers is invaluable. FairSquare failed to acknowledge the value that a good Realtor brings to the transaction. From helping sellers make smart selling decisions, to ensuring the data within our MLS Systems™ across Canada are accurate and timely. In the end, FairSquare did try to embrace Realtors, but there is a big difference between a salesperson with a REALTORS® license and a Realtor with years of experience and knowledge.
So, who is the Big Winner?
Right now, the traditional real industry is the big winner. Fairsquare closing its doors will be more evidence for the industry that sellers need Realtors more than ever before. And for sellers who want the freedom to sell on their own without a Realtor, well they might feel like they’re the big losers. However, I can tell you they are not. Sellers need to understand that they do have choice when it comes to selling on their own within our industry, and many come with the opportunity to save thousands in commissions. I encourage sellers to research their markets to see what options are available to them.”
I thought there was only suppose to be happy news on Fridays.
If Hammond had been raised in Calcutta, then he would have a completely different take on density at 24,000 per square kilometer. Downtown Vancouver’s density is just a little under 19,000 per square kilometer.
Our downtown is only around 4,500. It just feels like 20,000.
Not surprisingly, it looks like Hammond will be the lead NIMBY on the current council.
“When I was a kid, we lived in a small town called Minnedosa, Manitoba and it was about 2,500 people, and that was an entire town, and we’re looking at putting somewhere between 2,000 maybe 2,200 people in one and a half blocks, and I just think that’s too much.”
Victoria clearly needs a Minnedosa zoning regulation specifying the minimum area in which the population of a random, irrelevant small town in Manitoba can reside. I also think we should find out how many fire hydrants there are in Possum Gulch, Alabama to provide future guidance.
Peter, this missing middle initiative looks good on paper but what happened in Vancouver could happen here. We will get a lot of similar style “Vancouver Specials”. Builders will find the optimum house to build and the same or highly similar building plan will be used everywhere.
In 20 years you might not be able to distinguish Victoria from East Vancouver.
Yes. That’s exactly what happened in Ambleside and Dundarave in West Vancouver where we used to be. Well, actually two things happened. About half the new houses were built as you’re describing to maximize floor space, and basically you’re building a large box and trying to dress it up where you can. And about the other half of the new houses were built “craftsman style” with less square footage but more style and fitting into the hood. Those ones of course looked much nicer. FMV when done probably roughly the same, i.e. when someone then is paying say $4-5 million for a new build on a normal size lot, it’s hard to tell whether any pricing difference is due to house style, minor variation in lot, view, or location.
Yes, I believe this will all happen here too, and is already sort of happening. Personally, one of the things I love about Victoria is that it hasn’t happened yet large-scale, as I like the older houses and more proportionality (is that a word?) with lot size, distance from next-door houses etc. But it is what it is. If you drive through Ambleside or Dundarave today, I still don’t think you’d drive away thinking anything other than, what a nice neighbourhood. But then, there’s a lot of wealth there and whatever is built ends up looking pretty good one way or another.
Yeah, some of it seems pretty gimmicky though. Cool to know the polarity is reversed on an outlet, but it’s probably a 2 minute fix, so not likely to be a deal breaker. I used an inspector once, and they mostly just pointed out stuff I already knew about or had noticed. It does give you an opportunity to take a sober second look though.
I wouldn’t say a home inspection is useless. It does give purchasers a peace of mind. It’s more than a cursory inspection but it is not a guarantee or an insurance policy.
I like home inspections because before they were common, I was the one dragged into court to talk about push button outlets, copper tanks and vacuum canisters. All of which are above my pay grade.
My mortgage inspection is cursory. I will note any obvious deficiencies such as a lack of a poured concrete foundation, leaks, water stains, fuse boxes, curling roof shingles, rot, etc. and the need for immediate repairs that would have an effect on market value. But nothing hidden or unapparent.
When I’m doing a sale or a re-finance, I am working for the lender not for the buyer. The lender is my client. That’s why you are unlikely to get a copy of the report as it may contain derogatory remarks that you may find upsetting. For example if you keep ducks and geese in your home there is going to be a comment about the smell and cleanliness.
Dad u nailed it people do luv regulation can’t be safe enough
In principle, sure. People do like regulation – especially when it regulates someone else’s behaviour.
It comes down to the life expectancy of new homes versus old homes. Homes are not built to last forever. People’s tastes change and as the underlying land becomes more valuable the more likely the home will be demolished. If 90 percent of the value of your property is in the land component then the house is a tear down.
You may have a home built in the 1990’s but if the land is re-zoned to a higher density so that the land comprises the majority of value then that home is a tear-down. Oak Bay is an example with its smaller character homes. They look pretty and are well kept but they are bulldozer bait. It’s just that it isn’t economically feasible to buy an older home and immediately build a new one. As your costs will be greater, in most cases, than what you could get for a finished home.
There may come a time when the stars are aligned and that changes. Then Oak Bay will be re-developed on a large scale. People’s tastes change and as Victoria becomes more multi-cultural the appeal of character homes will likely diminish. Old English style housing is not appealing to those that never grew up with it or came from a country that never had it. That market would likely desire modern and low maintenance housing that maximizes the buildable floor area. And since they are coming here with large sums of cash they will not be as concerned of the property’s value upon completion as they are looking at real estate as a multi-generational investment.
I think if you pitched the owner builder exam to the average person they would be in support form a perspective of safety and consumer protection.
Fyi I am not in favour of step code 5 being forced upon everyone but that is the way it is.
I don’t know Marko. Is that why the owner-builder exam exists? Because the people think it’s important?
Wouldn’t the government be a reflection of what the people think is important?
Other than vermiculite, asbestos tape and a few other things home inspection is almost useless in covering the 20 other items that can contain asbestos. Doubt Leo had an environmental report done and doubt he cares if his popcorn ceiling has asbestos content just like no one cares in Royal Bay that their kitchen is made of cheap melamine.
To governments? Sure, ok. I’m guessing most buyers don’t care about the r value of the insulation in the exterior walls.
In Leo’s case, he bought when the market was ice cold. He got an inspection.
2×4 was fine with ship lap but 2×6 walls are worth the extra money Aluminum wiring was just a dumb idea at the time Easy to tell if u have some as it will stick out like a sore thumb amongst all the copper wire in the box Silica which is used in everything now is the new asbestos another 30 years we will probably be removing it all
Assuming that a home inspection was done. Purchasers were waiving that condition when the market was hot and the listing agents had 48 hour clauses in the contracts.
Years ago I was speaking with a loan’s officer from Toronto about 48 hour clauses and she described BC as the wild, wild west when it came to financing in that buyers had more consumer protection buying a toaster than they had buying a house.
So basically 99% of houses, built at any time, can be accused of being cheaply built.
So we are left guessing whether today’s cheaply built houses will hold up better in the long run than the cheaply built houses of yesteryear (which seem to be holding up quite well in most respects).
Given the huge push for step code looks like insulation is a pretty important reason.
Nothing wrong with 2×4 construction. Reason for 2×6 walls is so you can jam in more insulation.
It wouldn’t be in the insulation in that era unless someone added it (e.g., zonolite) for some reason. Old lino flooring, drywall mud, textured ceiling, etc., are examples of materials from that era that often contain asbestos. Not that it matters. Just don’t disturb it and you’re fine.
Usually you see zonolite in old homes that were built without insulation. 70s houses were built with insulation.
Major obvious amounts of it (e.g. attic insulation) would be noted in the pre-purchase house inspection. That’s how he would know.
And I bet you’re still wrong about his place having aluminum wiring.
The Gordon Head box which seemed to have three building styles. You just had to pick one. Gordon Head was built during an economic boom in housing and was a major development akin to Royal Bay today.
What made them attractive is that they could be built with an unfinished basement that the owner could complete later. In that way one would get more potential square footage at a lower cost. I wouldn’t say they were cheaply made but to the standard of the day. Typically they had problems with inadequate roof ventilation and some will have aluminum wiring.
I wouldn’t say they were economy housing. That would be more of the AHOP housing that were built in the 1970’s and mostly in the lower mainland. The builders that built AHOP had to come under a specific price to qualify. Those homes had little ornamentation and were more of a square than a rectangle. The less wall and roof area reduces building costs. The least costly style of home to build is cube shaped that minimize exterior wall and roof area.
And before someone points out that a cylinder or can shape has less, we don’t built houses that are shaped like the oil storage units at an oil refinery.
Has Leo tested his home for asbestos? I doubt it.
The same argument is made for the Westshore currently and Gordon Head was the Westshore 50 years ago….mass built simple almost identical floorplan homes built to maximize profit.
Every decade or so of housing has its problems be it foundations, drainage, cast iron, asbestos, roof ventilation, 2 x 4 construction, insulation, acrylic stucco application, aluminum wiring, single glazed windows, knob and tube wiring, etc.
I use to say that upscale houses built during the Depression were the best built as one could get the best materials and best labor at low prices. I don’t anymore. New housing is built to a better standard today. What is different is that the items such as flooring, cabinets, etc. have built in obsolescence and need to be replaced at frequent intervals.
Hardwood floors and cabinets from the 1950’s had longevity while most of the new products will likely have to be replaced every 20 years or so.
I don’t recall Leo mentioning that his place has asbestos or aluminum wiring.
Also, how do we know that 70s-era houses in Gordon Head were cheaply built?
Just my two pennies worth about peak to peak prices. Most terms are 1,3 or 5 years. I would look back to see what was happening in the market place 1, 3 and 5 years ago in terms of activity and interest rates and how that may effect renewals.
A year ago the market was hot with lots of sales and low interest rates. Those that took out a one-year term will be facing a higher renewal rate and lower prices. The same if you bought a pre-construction condo a year ago and the construction is finishing up now and you’re trying to get financing today.
Generally speaking market prices have rolled back to price levels in the last half of 2021. If prices continue to roll back then more people that have terms coming due will be effected. Not that the current lender will require a new valuation, but the home owner may loose the ability to change lenders if their lender is not willing to negotiate on the renewal interest rate. What they have lost is the ability to negotiate with their current lender to match another lender’s lower rate with the threat of moving their accounts to a new lender. Some won’t be able to move their mortgage to a new lender as it will trigger a new valuation of the property that will most likely appraise at a lower price. The current lender knows that home prices have come down and that threat tactic is just hot air.
By way of an analogy this is like a snow ball rolling down a hill. It starts out slowly but gathers momentum with time. The longer the interest rates remain significantly higher than the previous term rates of 1, 3 and 5 years, the more people will be negatively effected with higher mortgage payments. A market downturn could therefore last another one, three, or five years. Or not.
I think the West shore is great for young families a little leery of new homes buttoned up tight chalk full of chemicals or what we like to say it’s like living in a plastic bag lol
You forgot the lead pipes and lead paint(at least it’s likely only exterior). Don’t make things like they used to.
Some specifics would be appreciated. As Leo has mentioned before he lives in a 50 year old crap 2×4” spec home built as cheap as possible, with a bit of asbestos thrown in and possibly aluminum wiring and concrete drain tiles prone to collapse. Sounds like his family is happy there?
Colwood is moving to step code 5 this summer, not sure if we should be referring to that as “not well built.” That is getting into triple pane windows, etc.
As I mentioned to SalmonHunter new home in Royal Bay you don’t have to worry about something like the sewer laterally collapsing and your toilets overflowing with crap. Older houses in the core with old tile sewer lateral….you never know.
Personally I’ll take an old home in the Oaklands area with one bathroom and dated versus new home in Royal Bay with 3 or 4 bathrooms, but I can totally see the appeal for a lot of people in being in a community like Royal Bay in a new build. Especially, if the commute isn’t a huge factor.
Two people emailed me this week to ask if their PCS was broken 🙂
Some market segments are absolutely brutal. On the ground feels a lot worse than 1,700 active inventory (which is already relatively low).
For example, I have clients looking for an older two bedroom condo in greater Victoria around 500k. It can be Saanich, Victoria, Langford, doesn’t matter. Only criteria is insuite laundry and not 55+. Outbid multiple times now….latest was last week on a 14 year old condo in Langford which ended up selling over asking. I’ve never seen worse lack of new listings in this market segment. I wonder if investors aren’t dumping as rental rates are high and vacancy is low, and owner occupiers of these condos simply can’t afford to move up in the market at these interest rates so they aren’t selling and are forced to stay put? I’ve never seen a market where you can’t go into Langford and buy 12-14 year old condo within reason, there is always plenty.
That all being said sales pace doesn’t seem to be increasing this week. If 5-year mortgage rates go north of 5% again secondary to the bond market I wonder what April/May hold. Most of my clients in the last few weeks obtaining approx 4.79ish rates +/-.
I have a question. Looking at the top graph, there is quite a range of peak to same peak level spreads. Meaning, the time from one peak to its price counterpart varies from 15 years to 18 months with the shorter stretches being within the past decade or so. Are there any early indications that the “recovery” of this market to March 2022 prices will be on the shorter end? I’d love to hear one or more thoughtful opinions, even if there’s no clairvoyance with markets.
Salmonhunter, to answer your questions.
I've lived in Victoria for 20 of the past 35 years and have lots of friends and family here including rental properties of my own. Like others have posted, most of the older houses are well maintained here. The newer houses in the Langford/Collwood area are generally not as well built. It's not possible to draw a reasonable inference on long term maintenance cost by region. Unless there are stats I am unaware of that show some data on that, which might be possible with older western community subdivisions, but doubt this is available. You’re best off relying solely on individual property inspections.
If a small mortgage is the priority, event at what seems a relatively young age, the only drawback to the western communities I see that long term you may in 5-10 years want to move to a quieter more peaceful area, as parts of saanich are likely to remain. You will find it easier to make friends with younger people in the Langford area, but a lot of people get tired of the frenetic energy of the area that does not equate with accomplishing anything meaningful. In this context, if you are working less, over time you might find yourself thinking of being somewhere else. Which again, will take you back to that more expensive house in Saanich in 5 years, which by that time will require a move for the kids and everyone. So, if working around the southbound traffic is sustainable in the long term, and the likely occasional experience of being caught in traffic all else being equal is acceptable, then the one drawback might be you will want to move again anyway in 5 years by which time it will be more costly. Just my two cents. There is always more to consider.
None of these extra taxes apply to bona fide rentals.
I think all these extra taxes are meant to squeeze the little guy out of the rental/real estate game, putting it into the hands of large institutional investors. Typical of government policy. I am starting to see the advantages of being a renter, no property tax, no repairs, no escalating insurance rates, no yard maintenance, no mortgage, no place to live…..
Aren’t owners of secondary properties paying more taxes when they can’t claim the primary residence exemption on property tax? Nothing like creating a double tax.
Given that almost all of them have properties in Florida, they already are at the state level.
The congressman doing the complaining is from Buffalo, so I doubt BC is on his radar. This has been reported on the news in Ontario, it appears that most of these second residences (some of which appear to be bigger than my house) are in the Fort Erie area across the river. The Niagara Region has seen a severe decline in affordability in the last few years. In fact Fort Erie is more expensive than the Buffalo area, even the “nice” suburbs.
The new federal tax has an exemption for any foreign owned property in an “eligible area” which is occupied at least 28 days a year. Even Saltspring Island is eligible. But Fort Erie, being part of the Golden Horseshoe, isn’t. Thus the objections from the guy in Buffalo.
Ottawa has just instituted an empty homes tax for 2023 by the way.
The unintended consequences of ill-thought-out reactionary policies.
Seems completely fine. People with multiple homes can afford it, so nothing to see here.
Whoops sorry about the misinformation. My mistake I got confused, I removed my comment.
How come this tweet says Hammond’s was the only dissenting vote?
Just filled out the BC spec tax declaration. Note BC already charges 2% for foreign owners of underused since 2019, so the UHT now would add another 1% on top of BC spec tax for them here.
Guess US only complains about the 1% UHT as it is at federal level and involves reporting to CRA.
Freedom, I really can’t tell you. Everyone’s circumstances will be different.
Totoro, I emailed Adlaw and he returned my email and thanked me. He wants to talk about these changes with me tomorrow. A lot of appraisers are upset about this too.
I expect a lot of hate mail coming my way from brokers and equity lenders.
The tax or ban on foreigner owned properties doesn’t depend on owning multiple properties. It applies to a single property in Canada, regardless of what Is owned in the foreigner’s home.
Yes, the US is doing the correct response, to request an exemption or retaliate with their own tax/ban. The Canadian foreigner tax/ban is idiotic and an embarrassment to Canada to begin with. It does nothing significant, other than to annoy our best ally. As soon as the Quebec sunbirds are faced with a US tax, the Libs will act to repeal it, at least for our American friends. I hope the Americans hit us hard in retaliation with a foreigner tax , sending us a “don’t tread on me” message. Then we can elect a federal government that will repeal our tax.
Unless they go back and revise those…
Zero care if people with multiple places have to pay a tax for that privileged. I’m sure those in power will though.
But is an appraisal required on the existing home (with suite) of people who want a new mortgage (e.g. for another property)? If not, there is nothing new and no change for those people.
They wanted proof of the rental income but now the appraiser can not provide a rent report as a third party verification of the rent.
The unintended consequences of ill-thought-out reactionary policies.
What has changed? The lender always wants proof of the rental income for people who have suites (legal or not) and want to include the rent as part of their income, as far as I remember. Anything new or changed about it? Do these people also need a new appraisal (with rent report) on their existing house now, in addition to their NoAs?
Unintended consequence: New Canadian government premiums on non-resident foreign owned Canadian property may soon be met with retaliatory penalties on Canadians who are non-resident owners of American property .
hahahah…we can’t even do wrong right
VicREanalyst, does your upper floor have a permit from the city as a suite? No permit means not legal.
Simple way around, just tell the bank you are renting out the upstairs which is legal. Might have some issues if an insurance claim ever gets filed but most of the time should be fine.
When did this change come into effect?
In my experience, banks have always asked for proof of rent. Normally they request copies of the leases and evidence of rent deposits. They may also ask to review reported rental income on your tax return. This applies to legal or unauthorized suites.
Our last bank appraisal and mortgage qualification was 2021. Have banks changed things up since then?
And sorry Freedom – thought it was someone else.
Totoro, this is a serious change. It will have effect on those people that have illegal suites and need that income to qualify for a new mortgage or refinancing. Hopefully they have been reporting that as income and it shows up in their Notice of Assessment from CRA.
There is no way that an appraiser can willfully get around the issue without nullifying their insurance and subjecting themselves to disciplinary action. You might think that you could get around this by calling it a Consulting Report. But you can’t as a Consulting Report is not just a change in name. They are different reports with different reporting standards. It’s like the difference between a T-4 and a T4A slip.
The contributory value of the illegal suite will still be in the value estimate as it could be used for an in-law. There just will be no economic rent report generated for the illegal suite. The report will still state the actual rent being paid but that will have a clause that the source of the information is from the home owner. That’s most likely not good enough for the bank auditors as they want third party verification supported by market evidence of rents. Some lenders and brokers are looser in what they accept but the lender still has to meet OSFI regulations.
Back in 2009 when you had your appraisal done there was no regulations for providing an addendum rent report. Things have change. For example, I no longer have a Blackberry phone.
@totoro, I didn’t try to answer anyone. Just thought if the lender counts the rental income for existing owner but not for the new buyer, the reason may not be that the suite is illegal, but the income is not proven for the new buyer.
No idea. Just saw the discussion not including illegal suite in an appraisal here today, and try to understand it.
If the suite has been rented out the current owners will have a tenancy agreement specifying past or current rents. Doesn’t answer my question as to when there was a policy change (date).
An appraisal that includes market rent is evidence of expected income from the property. Not sure why you would be asked to do an assessment of rents otherwise.
Are you now saying that appraisers assign zero value to an unauthorized suite? Do they do this for all unauthorized improvements? That seems weird.
There are cases of an owner with an illegal suite applying for a mortgage for another property. In this case, I thought that the rental income would be considered by the lender, as long as it has been included in the tax return or if there is a signed rental lease (for a new suite). And there is no appraisal required for the owner/buyer’s existing house with the suite.
An appraisal is for the value of a house, not for the payment ability of the buyer. Before a buyer gets the house, he/she wouldn’t have a signed lease for the suite in that house, be it legal or not, so the rent wouldn’t be counted by the lender regardless.
But I can see if the appraisal is lower than purchase price due to omission of an illegal suite or other reasons, the buyer may not be able to get the mortgage amount as planned.
This is not my area but it does not appear to me that prior rules allowed for a market rent appraisal of an illegal suite either – only a notation as to factual, current rent. When was the AIC policy updated?
It is an appraisal firm. You’d think there would have been an urgent memo sent out to all appraisers if this is now a punishable offence.
Appraisers are not in charge of lender policies. Many banks have typically considered income from an unauthorized suite, although they will discount it in some cases. Proof of this could be provided in the form of a rental agreement and past payment records without an appraisal. If this has changed recently perhaps someone like Marko can confirm.
It’s a big drop at the margin. Keep in mind that the 80% stat includes all persons who have immigrated, including those who came to Canada as far back as the WWII era. To come down from 87.8% means a big change with respect to more recent immigrants.
Totoro that article from July used the AIC as a source. Well here is what the AIC currently states. That article you quoted is now dated and the information is wrong. I will contact the law firm and inform them.
MARKET RENT REPORT FAQs
Can I complete a Market Rent Report on an illegal suite?
-Members are reminded that providing an analysis of market rent for an illegal suite is
contrary to CUSPAP and will invalidate a member’s insurance coverage.
If the use does not conform: the suite cannot be appraised unless it is a legal non-forming
use, has been approved by the municipality, or a variance can reasonably be expected.
Can I treat an illegal suite as a Hypothetical?
-In most instances – NO.
One exception would be when a Member is asked to estimate the impact on the value of
a property due to an illegal status similar to a cost-to-cure assignment.
For any Hypothetical Condition, a Member must have information about improvement
such as the cost to remedy, plans, time of completion and other items.
The property owner says the suite is legal, is that sufficient?
-If the owner can provide a copy of the building permit to show the suite is authorized, that
-The appraiser must indicate how this information was obtained and include assumptions
and limiting conditions relating to reliance on this information in the report. If the owner
does not have a copy, the Member should contact the municipality authority to confirm.
Currently 80% of immigrants eligible for citizenship have obtained it. This is done from 87.8% in 2011. That’s a 10% drop. Doesn’t seem like a “drastic decrease” but time will tell. Various reasons offered (dual citizenship restrictions, change of rules etc.). Ultimately the population increase is the best way to keep score, and it looks fine. https://www.cicnews.com/2022/11/the-trends-behind-canadian-citizenship-1131924.html#gs.ppiyph
The thing about laws is that you don’t get to choose which ones you follow or are enforced. While there is magnitude in how severely a law is broken, whether it is broken or not is binary.
In this case, society has rewarded many MANY people for breaking the law whereas people who choose to follow the law and/or don’t want illegal structures in their houses ended up paying more for the exact same thing, punishing law abiding behavior. And at the end of the day, it doesn’t matter what the changes are from the current state because the current state should have never existed in first place.
As an aside, just as there are unjust beneficiaries in permissively policing illegal suites, there are many unjust beneficiaries in beneficiaries in drug dealing, car theft and robbery. Just ask any Colombian drug dealer, east side drug user, Nigerian driver or any Politician.
But they are staying anyway, and taking or not taking out citizenship doesn’t change those factors.
Clearly not the approach or interpretation taken by all appraisers. I’d shop around.
suites are permitted by local zoning bylaws but the subject property’s suite was not constructed following the local municipal building permit process
a member may invoke a Hypothetical Condition and Extraordinary Assumption that this suite was constructed legally and may complete a market rent analysis for the suite. Per CUSPAP 7.10.5, a member must clearly note throughout the report the assumptions and conditions applied and that their absence would result in a different value
Local Zoning Bylaws Do Not Permit Suites but Likelihood of Change
local municipal zoning may not currently permit the presence of suites in residential properties, but there exists a good possibility that local bylaws may change, thus permitting suites, or a variance could be obtained permitting the presence of a suite in the subject property
a member may invoke a Hypothetical Condition and Extraordinary Assumption that this suite was constructed legally and may complete a market rent analysis for the suite. Per CUSPAP 7.10.5, a member must clearly note throughout the report the assumptions and conditions applied and that their absence would result in a different value
Local Zoning Bylaws Do Not Permit Suites and No Likelihood of Change
Local zoning does not permit the presence of suites and there is minimal to no likelihood that this will change in the foreseeable future.
a member should not provide a market rental analysis of the subject suite
In a Report:
Members should note if:
a property contains a suite
local zoning bylaws permit legal suites
the local municipal office indicates the subject suite was approved and developed through the appropriate permit process
Members may also note:
the rent the suite currently receives
this is not an opinion of market rent, but a note of the suite’s factual current rent
Bear in Mind
An illegal rent does not reflect the Highest and Best Use of a property; market value is premised on Highest and Best Use. AIC members are advised not to provide a market rental analysis for an illegal suite because this would not reflect market value.
In some situations, providing an analysis of market rent for an illegal suite can be contrary to CUSPAP and may invalidate a member’s insurance coverage.
A Member may still be able to complete a Consulting Report that provides information on market rents for legal suites in similar properties within the area in which the subject property is situated.
The Member would complete and provide their client with two reports:
an appraisal report for the dwelling and
a Consulting Report for the market rents in the neighbourhood.
In 2009, Coast Capital Savings gave me a mortgage based on income from a known illegal suite.
I am guessing that dropping the income from illegal suites should lower house prices marginally. I am guessing that people that do buy them will still rent out anyway. The real loser here seems to be the sellor.
“Heard on the radio that the number of permanent residents who go on to attain Canadian citizenship has drastically decreased. Didn’t catch the time frame, guess they’re here for their own reasons.”
“Or they come from countries that don’t allow you to hold dual citizenship, and they need to have that to get back to their old country for some reason or another, older parents for example.”
Or, after the immigrants come to Canada, they find the cost of living is way out of line with incomes.
Or, the employers here don’t offer jobs in the fields they are trained in, forcing them to drive cabs or work in a convernence store.
Anyone else see a SFD listings stall this week? Just haven’t seen much, more of a trickle compared to the few weeks. Just wonder if it’s actual or just what my view is showing me.
“Based on analysts’ comments, putting a price cap on Russia’s oil exports could well be even more counterproductive than some of the current policies. The insurance companies will be hurt the most.”
By Irina Slav for Oilprice.com
Lots of examples of that “squeezed balloon popping out where least expected.”
I look forward to seeing what will happen if lending institutions really do stop accepting partial or full income from suites that are illegal.
It’s got to bring serious changes in some way.
The BoC will maintain it’s credibility and stick with the pause in March announcement, but that will likely lead to 50 or 75 point bump in the April announcement. That way they can say they took a pause and analyzed and determined additional tightening was needed. All works out very well. Just don’t look at that exchange rate you will be getting on the Cdn dollar for the month of March.
Deryk, I wouldn’t say that is the same ball park as selling drugs.
It’s more like the cap on Russian Oil. The oil tanker companies won’t be able to get insurance to transport the oil.
That sucks, but it lines up with my data/observations. In a tough market sellers panic and fire the lower commission business model, drop the price, and hire a higher commission business model. The consumer is too dumb to understand the price is the problem 98% of the time.
You can make a lot of money running a discount business model but here are some of my experiences
i/ If you are charging 50% less you have to sell 3x the properties (factoring in costs/overhead) to make the same profit. To sell 3x you have to be prepared to work 60 to 70 hours per week on call including pretty much every Saturday/Sunday.
ii/ You have to offer really good service (better than those charging market rates) so you can grow your business organically via referrals and word of mouth. If you have to market a lower commission business model that hurts the bottom line big time.
iii/ You need some common sense from the consumer. As I noted below I lost a lot of listings back in the day on the premise of “your commission is lower so you won’t work as hard to sell my home as the person charging 2x.”
iv/ You have to be prepared to work with really difficult clients. Reality is clients seeking discounts are going to be more difficult on AVERAGE to work with. Unfortunately, that is simply real life. Of course there are amazing people seeking discounts, but I am talking average here. So 60 to 70 hours per week working with people often sucking your soul dry 🙂 Then in a crap market they fire you, drop the price 100k, and list with someone charging 2x.
The higher tax regime also didn’t help. Hustling to sell 3x the number of homes and then getting into the 54% tax bracket was like what is the point of this. Rather just increase my rates, work way less and not pay 54%. Only problem is as I reduced the discounts the business volume actually increased.
My #1 piece of advice to people asking about how to buy unrepresented is: be serious buyers.
And that advice is largely built from Marko’s stories about unreasonable buyers. Do the research, know what you want, try to eliminate non-suitable properties as much as possible from the info/photos/tours online, do a drive by, take advantage of open houses (more difficult now), and then make an offer on the ones you’re serious about. Listing agents must pass on written legal offers to the seller no matter how they feel about the situation so at least you know the seller has seen in.
Introvert, the regulation has always been there. It just wasn’t defined on who’s responsibility it fell under or how to implement it. Now it is along with disciplinary action for willful non-compliance and voiding of the appraiser’s insurance. And to the best of my knowledge it’s retroactive. Ain’t that a f^&ing peach.
The seminar on February 14th was attended by over 440 appraisers. The executives of the AIC were flooded with over 100 comments and not many of them were nice comments.
I don’t know what kind of an effect this will have on the marketplace as it just got a little bit more difficult for some people to get a mortgage.
While you and totoro are likely the 10% of reasonable unrepresented actors, the other 90% are not from my personal experience. This is the type of phone call I receive from an unrepresented party.
Unrepresented party: “Hey we are out of town leaving tomorrow, can we set up a showing for today?”
Marko: “Can you please let me know which property you are referring to?”
Unrepresented party: “We just walked by it, not sure what the address is it is in Oak Bay.”
Marko: “The one on St. Patrick close to Beach Drive?”
Unrepresented party: “Yes that one, we would like to see it today.”
Marko: “Are you aware of the listing price?”
Unrepresented party: “No, what it is it? Also, does it have a suite in the basement?”
At this point based on a lot of experience I make a judgement call and I tell them I am going to have to email them the required compliance forms and the floorplan, mls data sheet and when they acknowledge my email I can proceed to contact the sellers to see if they can make an appointment work later today.
98% either reply with “ohhh, we will give it some thought” or they provide an email and then never acknowledge receiving it, etc. I am sure they all think I am an abrasive jerk not working for the best interests of my sellers. Thing is I’ve never closed a sale with an unrepresented party who has phoned not knowing what the list price is so it is a waste of time for all parties involved.
2% reply in this scenario and we book the showing.
I absolutely love the forms. Before the forms I would have an unrepresented party not show up to a showing 10x to 15x per year. Once I drove out to Sooke and the unrepresented party off realtor.ca didn’t show up, didn’t text, didn’t call, nothing.
The beauty of the forms is 90% of unrepresented parties off realtor.ca don’t reply once I send the forms to proceed further. The 10% that do reply actually show up to the showing. It has vastly improved efficiency.
Quote: “… the question really we’re asking ourselves is, ‘Have we done enough?’ We’re pausing to assess whether we’ve done enough,” Macklem said.
BoC Governor Tiff Macklem said that the BoC would pause to judge the effectiveness of the rate hikes and think carefully about the next steps. Seems they’re staying true to their word.
Haha Nan ….I wouldn’t think that an illegal rental suite would be in the same league as selling drugs, car theft or robbery.
An illegal suite does have upsides ….. a home for someone. (I can’t see any side benefits to selling drugs, car theft or robbery:)
It will be interesting to see what this will mean in terms of houses with illegal suites.
I can’t help but feel that homes with illegal suites will now end up in the hands of of people with higher incomes who do not need the suite and many of the downsides of tenants. They might simply use the suite for their own needs…..thus taking a lot of suites out of the rental market….driving up rents even more.
When you squeeze a balloon….it’s always hard to tell where it will bulge out somewhere else……but bulging out somewhere else is always guaranteed.
That’s why pointy headed bureaucrats should think twice before making such changes.
Definition of a Bureaucrat: “an official in a government department, in particular one perceived as being concerned with procedural correctness at the expense of people’s needs”.
See what fixed rates do until then. They can’t raise in March without seriously further damaging their credibility.
They can’t raise in March now because that will damage their credibility
that sounds like exactly the right position for the BOC right now.
Inflation dragon has been roughed up a bit, but might still pick itself up for another round.
Deryk, the regulation has always been there, it’s just that some lenders skirted the issue. This time OSFI and the AIC are laying it right on the appraiser as their duty. Believe me, I think this is above my pay grade. I should not be “baby sitting” the lenders. But problems in the past with brokers, lenders, and appraisal management companies have now resulted in enforcement.
In the past, the appraiser would identify the suite as illegal but still provide an economic rent for the suite. Then it would be up to the lender to decide if they would use the rent income or not. The appraiser assumed that the lender knew their regulations better than they. I guess “fu&ing not.
NO MORE. Can’t do the report and can’t attach anything that would imply an economic rent to the mortgage appraisal. You can still report that there is a suite and state what the home owner said as the rent along with a statement that no further verification has been performed. That statement is not good enough for a lender to use as they might of done the same themselves. What the lender wants is a third party verification of economic rent, in a report, providing market evidence.
Why the appraiser? Because an appraiser is charged to protect the public’s interest. Not to protect the seller or buyer interest as with a real estate agent. So appraisers got chosen to be the one to enforce OSFI regulations at a cost of losing income to themselves by refusing work.
4.11 under Ethics Standards of the AIC
Members of the Institute pledge to conduct themselves in a manner that is not detrimental to the public, the Institute, CUSPAP, or the appraisal profession. A Member’s relationships with other Members, the Institute, and the public shall portray courtesy, respect, and good faith.
Do all new immigrants work here and pay taxes? Many of them have businesses in their home countries, I don’t think they claim that income here. I’m sure elderly parents aren’t bussing tables at restaurants. It all doesn’t matter, just don’t complain about a lack of housing and a 3 year wait for a hip or knee replacement. Which you can get done a lot quicker in other countries.
When did this rule come into effect?
rate pause might be short lived. Tiff just said they will re-evaluate in April.
I have no idea what inflation will do going forward but I can read the past data.
Inflation over last 12 months = 6+ percent
Inflation over last 6 months (annualized) – circa 3%
Inflation over last four months (annualized) – circa 2.5%
Looks like inflation has slowed substantially and that’s not just wishful thinking. No wonder Tiff has made future increases data dependent.
The inability to bid up housing prices with illegal suite revenue to help qualify for ridiculous mortgages should drive prices down unless the house has a legal suite.
The fact that this was ever allowed to support lending was stupid to begin with. Illegal means illegal. They might as well have allowed drug dealing,, car theft or robbery proceeds to be included as well.
I’m very surprised to read about the comment that the income of a suite, that is not legal, will no longer be considered as part of the income when applying for a mortgage. I am left wondering why they would want to do such a thing. (Probably to help the corporations who are buying large numbers of homes)
I’ve owned houses all my life and each one had an illegal suite. It allowed us to enter and buy a house and raise a family. It also provided a place for someone to live and raise their family as well.
If I have understood this correctly and it is true that the government has “closed the barn door.”……. making it harder than ever for young people to buy a house then it will be no surprise to me if this will add to the unfairness and cause uncontrollable social unrest among our young people. (More people on the street who give up and turn to drugs….but the bureaucrats can’t connect those dots.)
Have our governments gone completely mad? The world just keeps getting stranger and stranger.
Perhaps someone will point out that this is not true.
FairSquare / PurpleBricks brokerage folds. https://twitter.com/JeannieLee88/status/1626262915912196097?s=20
They blame the market slowdown.
Hard to make the discount model work it seems. I think they were offering $2k cash back for buyers, and selling a house for $4000 + cooperating commission.
Works in a boom, but not enough to sustain the company during a drought.
Nope Frank, no wiggle room. The appraiser can not provide an economic rent for an in-law suite for lending purposes. The suite has to be on permit from the municipality. And even if there is a permit, the appraiser has to physically inspect the property to verify that the suite that is there still meets the minimal requirements for a suite in that municipality. Such as a kitchen (not a hot plate), access to the suite (can not go through a living room or another suite), and not less than 350 or 400 square feet depending on the municipality and lenders guidelines.
This will be more of a problem for mostly brokers and equity lenders that tend to have clients that are on the financial edge of obtaining a mortgage and need that rental income.
The appraiser is on the hook for the next seven years for that appraisal. If that illegal suite is shut down or suffers damage that it can not be replaced and the lender takes a loss from an erroneous appraisal then the AIC insurance program will not defend them in court. They will have to hire their own lawyer and personally pay for any loss determined by the court.
And after the court case is finished, the Appraisal Institute will begin a disciplinary action against them.
These people work Frank. They pay taxes here. Curious, do you pay taxes?
Permanent residents of Canada have the same obligations as Canadian citizens who live here (note I said who live here – a Canadian who lives abroad doesn’t have to pay Canadian income tax) and they are entitled to the same social programs.
A permanent resident who doesn’t take out citizenship is not costing the rest of us anything.
As non- citizens who are not able to vote in elections, I believe, should they be entitled to all social benefits? Such as free health care. They can travel back to their country, in which they retain citizenship, for treatment, operations, etc… Might take the pressure off our system. Your either part of the solution or part of the problem.
What if the illegal suite is used for family (parents, children, siblings) who technically are not renters but may contribute to expenses?
So while we are on the topic of rentals.
As a prospective purchaser you have scraped together a down payment but you still need the income from the suite to qualify. How important is it that the suite is “legal” or not to getting a mortgage?
The Office of the Superintendent of Financial Institutions, OSFI, sets down appraisal regulations regarding legal versus not legal ie in-law suites as does the Appraisal Institute of Canada (AIC). Appraisers are very regulated in Canada which stands to reason as billions of dollars are loaned based on their well supported opinion of value. A lot of the time writing reports is making sure that the reports meet and exceed these regulations as well as each lenders additional regulations that are often different from each other. And I will say that over the last decade some lenders have gotten sloppy in following the regulations. I suppose that’s why OSFI has picked the appraiser to “police” the lenders. A position that I don’t like to be in. The various regulations that I have to follow are now over three inches thick.
It doesn’t matter what your loans officer, broker or agent tells you. It is the policy of the senior executives of all the major lenders and OSFI that If that suite is not authorized the income from that illegal suite CAN NOT be used. These organizations have chosen the appraiser to be the enforcer of this regulation. An appraiser CAN NOT provide an economic rental report to any lender if that suite income is unauthorized. If the appraiser willfully disregards this regulation then their insurance is void and they will be subject to disciplinary action.
I’ve just finished a seminar on providing rental reports and there is no wiggle room. The AIC has effectively read the riot act to appraisers across Canada. Any appraiser that provides a rental report on illegal suite income will be punished. The appraiser has to refuse the rental report assignment. It is therefore important for anyone buying a property to verify with the municipality that the suite is legal. It doesn’t matter what the province says or what it intends or that all of the neighbors have suites.
If you are relying on that illegal suite income to purchase a home, you most likely will not qualify unless the appraiser willfully disregards this regulation. Some appraisers may still chose to risk the penalty for the sake of a few bucks in providing one. I’m not one of them.
The barn door has been closed.
Or they come from countries that don’t allow you to hold dual citizenship, and they need to have that to get back to their old country for some reason or another, older parents for example.
Heard on the radio that the number of permanent residents who go on to attain Canadian citizenship has drastically decreased. Didn’t catch the time frame, guess they’re here for their own reasons.
Another way to look at this is, Wishful thinking is believing that inflation is dropping enough that central bankers have no further need to slow down the economy. Best to expect more interest rates & bond yield increases, which will cause ALL asset prices to adjust downward.
He’s not wrong.
CIBC’s Dodig warns Canada risks ‘largest social crisis’ if housing supply, immigration don’t match’
If inflation drops rates will drop, it’s that simple. Wishful thinking is believing that if inflation drops to 2% you’ll still be able to earn 5% on a GIC.
What seems to be missing about the supply of new rentals is how new single family housing contributes to the supply of new rentals.
I looked back over the last year at sales of new single family homes on the board’s data system in the Victoria and Westshore areas and found that out of the 141 new house sales some 63 had suites or roughly half. I don’t think this is the best way of estimating the contribution of new house sales to the rental market, but you got to go with the data that is available.
The ratio was not the same for the Victoria Core and the Westshore.
In the Core the ratio was closer to 20%
In the Westshore the rate was closer to 60%
The POINT being made is that new single family sales also contribute to new rentals, which I think is often overlooked when it comes to estimating the size of the rental market.
Marko, re the form, it wasn’t a big deal, but the time I didn’t the realtor was a real jerk. Abrasive, aggressive and so on. Also at the time, the form was new, and I was like well it says right on it this is optional for the unrepresented party. He showed up with them on paper as you said you are likely to do. In my experience 99% of the time they have been emailed to me, but then I don’t call, I email, so there it is. I think agents have difficulty with unrepresented parties because they are used to providing agency and cannot treat the buyer like an agent in their minds, they are thinking of all the things they would want to say or do if the person was their client, which they are not.
Higher rates actually depress stock and bond prices. Oh and of course they depress RE prices, and most people moving to Victoria or elsewhere in BC are depending on selling their present residence. They do increase yields on savings accounts, but that’s not where most HNW people have their money.
I think we’ve yet to see whether higher rates will make it harder for young people to get into the housing market. Made it easier for me, as I was a disciplined saver.
The people who can afford to buy a house in places like Victoria, are probably well off financially and have other investments and savings. They probably welcome higher rates that put more money in their pockets. Not everyone is hurt by high interest rates. However, young people trying to get started in life are screwed.
Who knows barrister, but if there is a recession (I have my doubts that blindly raising rates 425 bps in less than a year won’t end in a recession) I don’t expect the BoC to hold rates. Unless it’s a magic recession that isn’t disinflationary.
I think there is wishful thinking on both sides.
I am not sure why some many people think that rates are likely to drop any time soon or that matter ever. They are not particularly high at the moment. They had been extraordinarily low previously. I suspect that it may be wishful thinking.
If they want to restore credibility, over-tightening and holding rates higher and longer than necessary won’t do it.
The best thing they could do to restore credibility is shut the fuck up and stop giving forward guidance because they suck at it.
Good luck. But to see that happen, you may need to hold your nose and vote for Pierre Poilievre.
Prosecution reform is one thing.
Compassionate involuntary treatment is THE thing missing from the social contract.
That happens a lot.
Ridiculous. Feds need to act soon on bail reform. Hopefully they will: https://www.cbc.ca/news/politics/lametti-bail-reform-conservatives-legislation-1.6743317
Glass has been smashed at the downtown central library 6 times in the last 2 weeks. Businesses are getting their glass smashed, too. SMDH.
Whether it be dual agency or unrepresented (you could do both) prior to 2018 or an unrepresented party 2018 and later personally I’ve never liked the concept whatsoever. I’ve never once not had a dilemma in such a situation and I’ve been in many.
Let’s take one example from one transaction 10+ years ago. An older couple engaged me to sell the home they have lived at for 40+ years. Crap market, but after a number of months a young couple with a newborn shows up to view and they want to write an offer via dual agency. I suggest they get their own agent as at the time I was only offering unrepresented (known as “customer” back then) but no they want to dual agency. Sellers want to sell so they are fine with dual agency and encourage it.
Right off the bat I have various dilemmas in drafting the CPS (contract of purchase and sale). For one, the property is on septic and when I represent buyers I modify the inspection clause to note that the seller will pay for the pump out portion ($500 to $700) of the septic inspection. If the listing agents phones me and says “hey what’s up with this” I counter with “well, if the offer collapses the pump out is still for the sellers benefit so they should pay for it.” I get this accepted 95% of the time for my buyers.
When I am selling a property with a septic 90% of the time in the offer received the buyer’s agent does not specify that my seller is going to pay for the pump out and obviously I am not going to phone the buyer’s agent to suggest such modification to the clause as I am representing the best interests of the seller.
What now? Splitting the pump out 50/50 is not a “win-win” because my “win” % is either 95% or 90% when I am going to bat for one party or another.
There was a million other dilemmas on this particular property. Septic inspection came back crap. Young couple wanted 20k off for a new system, sellers were of the opinion they lived there for 40+ years and raised three kids and septic was fine. Etc.
I know with an unrepresented party I am working in the best interests of the seller but still so many scenarios where I would not feel good about given my level of knowledge. For example, young unrepresented couple and the condo paperwork (depreciation report) says work coming up will cost $2 million dollars or $50k/unit the depreciation report is 24 months old and with a huge construction boom costs have actually doubled and now it will be $100k/unit when the strata goes to obtain the actual quotes (but this isn’t evident in minutes/documents). I have to keep my mouth shut as I can’t give advice to an unrepresented party but it isn’t really a fair situation imo. Or BC Housing has purchased the property next door and is breaking ground on a shelter two weeks after completion date, or unrepresented party orders an oil tank scan, but given the nature of a property if I was representing the buyer I would get a second scan done (I’ve had every company in Victoria miss a tank for various reasons I am now familiar with), etc.
Conclusion, I feel everyone should have their own representation serving their own best interests.
Or just sell/buy privately.
I was hopeful for more bad news about the economy but with the good news labour numbers I guess up we go again maybe 25 points next month
This is a bit nerve racking
You are making the assumption that everyone emails; the older crowd tends to phone. If my reply on the phone is “please email me so I can email you back forms to review, required by the BCFSA, and then we can proceed to book a showing” the HHV crowd would interpret this as me being a lazy listing agent and not working in the best interests of the seller. Therefore, if I book the showing on the phone and show up to the property with the forms and the unrepresented buyer refuses to initial it is my word against theirs.
Just out of curiosity, what is the big deal as an unrepresented buyer initialing the form(s)?
My personal belief is both parties should be represented, or people should just sell privately. PERSONALLY, I don’t believe in one agent stick handling the transaction (will explain in longer post). That being said aside from my personal opinions I prefer to play within the rules of the regulator (BCFSA aka government). The system allows for mere postings, so I offer mere postings. The system allows for unrepresented parties, so I show to unrepresented parties. I literally showed an unrepresented party a listing of mine on Saturday.
If it was a rancher on a cul-de-sac 10 yrs ago it was my mere posting.
That video is from my regulator who disciplines, fines, suspends, and revokes licences. The general public already has a poor opinion of agents; therefore, the industry is afraid to misstep as the feeling is they [the regulator] is looking to make examples of agents not following their desire to discourage unrepresented transactions.
I’ve never been to an unrepresented showing in my career where the unrepresented party has not asked a question that the REGULATOR would not consider implied agency. Pretty much EVERYONE asks for guidance on pricing even if they are really trying to feel things out. Even a question such as “what do you think of this market” is giving advice and implied agency, according to the REGULATOR. If you actually approach an unrepresented party how you are suppose to as per regulator wants you look like a complete knob. The unrepresented party certainly won’t be left with a good impression. Yes, 1% of unrepresented parties are ultra sophisticated and won’t ask one question that crosses the implied agency but it hasn’t happened in my career.
I am telling you, everyone is scared ****less of BCFSA.
REaddict, out of interest, how did you manage to save the equivalent of the buyer’s agent fees by buying unrepresented? I thought the full commission went to the seller’s agent if the buyer was unrepresented? Did you have to negotiate a cashback deal with a buyer’s agent (i.e. not fully unrepresented)? Or is there some other way?
Marko, I get it. But, it’s easily shown that you sent an unrepresented party a DORTS form completed by you via email, on such and such a date, and they acknowledged receiving it, whether they sign it or not. It does clearly say on the form it is optional for a buyer to sign it, so I’m not sure why that is a red flag. A buyer is not held to any account by the BCFSA. If a buyer is aware of the risks and so forth of being an unrepresented party, I don’t see why anyone worries or cares. It should be buyer beware. Anyway, that ship has sailed for me. I have moved on to have an agent because frankly, it was getting to be too much of a PITA, but it was nice to pocket nearly 30K from the two transactions by doing the work and due diligence myself.
So you’re only for selling unrepresented, not buying? Honest question after your response. The first house I ever made an offer on in BC was a mere posting in Sunnymead through Fair Realty, possibly yours. The seller had the for sale sign and it was on the MLS, and so forth, he provided us access. We didn’t end up buying it in the end, but that is what started me on the path so to speak. The video is stuff and nonsense in my opinion. Takeaways, no one other than a realtor is smart enough… The risks are that you may be found to want the full commission so didn’t act in good faith. So why don’t they remove the ridiculous section from most MLS contracts giving the listing agent both commissions, that would fix that immediately? And how can you have an undisclosed dual agency or applied agency relationship when you’ve clearly spelled out the agency relationship at the get-go?
The forms, and I’m sure the teaching given in the process of becoming a realtor, or in their continuing education, or in the use of the forms themselves, pretty clearly spell out what a realtor can and cannot do in terms of actions in relation to an unrepresented party. Imparting information on a property is different than giving advice. It’s just a tad crazy! I had an agent show up to show a house to me with two other agents one time as if needing protection from us. I really know that it was so there would be multiple witnesses to the fact she didn’t say or tell us anything that wasn’t in the MLS listing summary. At least two agents were in the room at all times.
And, I do agree that eliminating unrepresented parties is what the BCFSA wants to do.
Everyone is assuming that a recession equates rate cuts. What if we end up with a stagflation? We haven’t seen it in more than 40 years, but if it happens, BoC’s hands will be tied.
And if payroll numbers keep running as hot as they are both here and south of the border, there will be the worry of wage inflation with the lack of any sort of slack in the labour market leading to overall inflation taking off again.
I’ve seen them listed as both Freehold or Fee Simple
Freehold ownership means that you own the land and house outright, with no space co-owned or co-managed with owners of adjacent homes. You are also solely responsible for the maintenance and upkeep of your property, and the property taxes associated with it. A fee simple estate is a type of freehold interest in property. All fee simple are freeholds but not all freeholds are fee simples.
Look at the “Legal description and parcel ID” in BC Assessments….it is freehold, not strata.
I guess I’ll repeat myself for the 3rd time….freehold title townhomes.
BC Assessment classifies it as a strata for taxation purposes. Legal descriptions do not show them as strata lots or having a strata plan. Another Co-Op is the Rudyard Kipling hi-rise along Beach Drive. BC Assessment classifies that one as Apartment Building.
You can’t tell if it is a Co-Op unless you search the Title.
BCFSA – Real Advice: Unrepresented Parties https://youtu.be/amTpkTQ_fYA?t=110
Worth spending 2 minutes watching this to get a sense of why agents are avoiding unrepresented parties. We keep getting hit with this message non-stop.
For what it’s worth, BC Assessment says strata. 9704 FIFTH ST SIDNEY V8L 0B4
Sorry it appears I misread you, I thought you were talking about Ontario.
They are not coops, they are FREEHOLD TITLE townhomes. I’ve seen the titles for them before.
I don’t know about Ontario Patriotz. There are zero lot line properties but I don’t think this is what Marko is talking about. His example looks like attached townhomes. They might be co-operatives but one would have to search the Title to find out.
You don’t see the other side of the story where the BCFSA is constantly hitting us with scare tactics and bulletins to avoid unrepresented party transactions. Then will have an office meeting and the managing broker will use the words if/when one of your unrepresented transactions goes sideways BCFSA will make sure your are punished and fined.
This is an email I received regarding a missed rescission date in a contract from my office the other day (keep in mind the offer had conditions for 10 business days so rescission period doesn’t even apply in this scenario).
“If/when BCFSA audits a file like this – both realtors will burn in hell regardless of who was the one responsible to fill it in if it can’t be demonstrated that the matter was addressed”
I think the office would have a heart attack if I submitted an unrepresented offer that a buyer provided (from a lawyer template) that wasn’t the latest version of what the BCFSA wants. Everyone is scared ***less of the BCFSA and the BCFSA wants to eliminate unrepresented parties. You can’t possibly read the DORTS/Risks to Unrepresented Parties forms and tell me that that is not the BCFSA agenda.
Honestly, if someone doesn’t want to initial the DORTS right off the bat that is a redflag to me. Now I have to rely on my word of mouth versus theirs that I provided them something I am required to (compliance under section 55 of the Real Estate Service Act).
Something goes sideways that’s not even my fault and the unrepresented party can make a complaint and claim they were never made aware of the risks of being unrepresented, etc.
I don’t think anyone is picking up on it, but Leo is 100% correct when he says BCFSA is actually making the marketplace less competitive with regulation. The public complained about shady dual/unrepresented transactions (i.e. developer buys property off old lady, one agent involved) and now the public is complaining that unrepresented is being made difficult. Talk to the government.
It’s always dependent on when they actually break the economy. They’re currently on the “soft landing” kick, I wonder how they define that exactly, if the economy goes down like the hindenburg but they survive riding down on their golden parachute, I guess that’d be pretty soft.
Whatever, rescission periods for new construction are a different animal. Have been in existence for some time and are 7 days, not 3 days. In your case if they are walking through the rescission period probably ended years prior.
Info from here: https://bridgewellgroup.ca/7-day-rescission-period-bc/
When Does the Rescission Period Start
Often times it takes a while for the developer and buyer to work out details, and the final contract can take a few days to receive. Many buyers have the question: when does the 7 day rescission period technically start? This is a great question, and in order for the rescission to start two steps must both be complete:
The purchaser has received the Disclosure Statement and any Amendments to the Disclosure (if applicable), and signed a form acknowledging this.
The final accepted contract of purchase and sale is signed by all parties (the buyer and the developer). The 7 days don’t begin until there is a legally binding accepted offer (all offers and counter offers complete), and both parties have agreed to all associated terms or addendums to the contract.
I was always skeptical of the calls for the BoC to cut this year. Central banks lost a lot of credibility by raising late, they are not going to make the same mistake by dropping early. If there’s a cut this year it’ll be because of catastrophic recession and that’s not a bullish sign.
Totoro, I agree. I have offered on a few homes and used a standard contract, but as I was adding clauses (again, pretty standard clauses) as part of the terms and conditions and wanted to be sure there were no issues, I had a real estate lawyer review it. The first time the lawyer reviewed and had a suggestion or a tweak. The second was great from the get-go, and after that, I wasn’t worried and didn’t do the legal review of the contract, which only cost $100, and one time a tad more as he went over some things pertaining to notations on the title. It was well worth it. I bought without representation twice and other than those small costs, I saved an amount equal to the buyer’s agent commission both times. Getting hard nowadays though. It’s close to impossible to buy unrepresented. I’ve been stymied by realtors who wouldn’t show me properties without representations, ones who wouldn’t if I didn’t sign the DORTS, etc. forms (which is optional), buyers who wouldn’t look at never mind accept an offer under the circumstances, wouldn’t allow a building inspection, although I don’t see how that is in the least related to whether I have a buyers agent, and so on.
“If the condo fees for a condo with a pool are $600 more than an equivalent complex without a pool that’s about a $100,000 in financing or there about.
The trade off of higher strata fees versus a lower acquisition price.”
This assumes that the swimming pool does not have any utility to a potential buyer.
Yep, any BoC rate pause is becoming a lot less likely and there will definitely not be any decrease in the BoC rate anytime soon. The market is really starting to price in an increasing rate environment again.
+1, they exist in Victoria. For example, these townhomes in Sidney are freehold title with “no strata fees” -> https://goo.gl/maps/jF2R4AhtBzEcB1NT9
They must have some “maintenace fees” to insure driveway, etc.
My bad, yes every RE lawyer will draft a contract and as you note
The representation I imagine would be a no go with the majority of RE lawyers.
I think all in all three different things were talked about
Having an offer (drafted by a realtor) reviewed by a lawyer.
Having an offer drafted by a lawyer and then the buyer does as he or she wishes with it (i.e. can give to listing agent to present to seller).
Having an offer drafted by a lawyer and having a lawyer represent you on the transaction (not common).
Nope, they are simply freehold lots with zero side setback.
I don’t know about Ontario. My first guess of why the town houses do not have strata fees is because they are not stratas.
They would be leasehold townhomes.
You can buy a strata titled half duplex in Victoria and not pay strata fees. Technically you are suppose to but the assumption is that during your AGM both parties voted against paying strata fees.
See: BC Strata Act
Of course not. No professional I can think of can be forced to take a client. Realtor’s can’t be forced either.
You are misconstruing my statement. I stated repeatedly that you can have a lawyer review your contract for a fee to make sure you are not missing key terms before you make an offer.
I did not say that the lawyer would or should “write up an offer” if by this you mean write up and present an offer representing a client in the transaction by negotiating with the listing realtor.
Those are two totally different things.
I know lawyers who have and will review a purchase and sale agreement for a client, or provide a draft agreement for them. There is no issue with this imo for anyone. What the client does with this next is up to them in terms of submitting the offer or not as they are representing themselves.
However, I agree that lawyers may choose not to represent a client in an unconventional deal for various reasons, including optics if their business is referrals for conveyances from local realtors, and the relatively low value of the file based on hourly billing which does not compensate for reputational impact.
There is an older strata complex along the Gorge that has a pool and the complex has costly strata fees. However, the high strata fees also have an effect on the prices that they fetch.
If the condo fees for a condo with a pool are $600 more than an equivalent complex without a pool that’s about a $100,000 in financing or there about.
The trade off of higher strata fees versus a lower acquisition price.
I have a question for Marko.
A question came up this morning about the rescission period pertaining to condominiums that were purchased pre-construction. The applicants have yet to do their final walk through of the property. During the period between when they made the offer on the condo and today market prices have declined.
When does the recession period start then?
@Leo S Not sure if the maintenance fees for condos there are higher than the strata fees here. From my experience: maintenance fees are quite guaranteed high for condos with swimming pools, hot tubs, nice gyms and 24 hours concierge. Then as the buildings age, come with other fees for repairing elevators, water pipes, pool… and even replacing doors, wallpaper, carpets etc. It needs a board of good directors to manage the cost properly. I found 24 hours concierge and swimming pool are very costly and not necessary for most people!
the word “if” is doing a whole lot of work here.
Oddly enough (and anecdotally) the maintenance fees for condos in Ontario seem to be much higher than here.
@Marko what is the price for the condo unit? Over or less than asking price? 🙂
Most townhomes in Ontario are freehold. But it seems a lot of new developments do have maintenance fees, still much lower than the townhouse strata fees here. Older Townhouses with $400+ (or new ones with $200+) maintenance fees are tough sells there. The markets are different. These are just my observations (used to be in the market in Ontario), not facts. 🙂
What James said, plus selling the land would inevitably bring FN land claims into it and tie it up for God knows how long. Keeping it in the base means they can build what they want and be exempt from municipal approval.
84 more military families housed on base = 84 less military families in general population rentals.
I think both the current approach and this suggested one have issues, because realtors are better at some things that lawyers are not, and vice versa.
I think if an offer comes in with some wonky conditions/clauses (of which I’ve seen quite a few, especially in Vancouver), the realtor isn’t always well-equipped to discuss the legal implications, outline changes with proper wording etc., beyond just telling you “oh that’s pretty standard”. Just my experience maybe, but I think a lawyer could have a useful role here.
But I can’t imagine using a lawyer-only approach. What about the actual negotiations? Yes, I know lawyers are supposed to be able to negotiate all day long, but I think they could tend to do that in lawyerly ways that aren’t necessarily condusive to getting a quick, practical result. I think the realtors I’ve dealt with over the years would be much better at that. Now maybe in today’s market, you’ll tell me the listing and selling agent never really talk to each other and try to find common ground to get a deal pushed over the finish line. But certainly in many cases when we were buying or selling, that was exactly what did happen, and it was aided by the fact that in a small community, the realtors all knew each other, and if you had an agent that was a known quantity where people trusted their integrity, then that helped provide the secret sauce to actually get things done. The last thing in the world I would want is a lawyer involved in that process.
But if you’re saying that no longer happens and it’s just paper back & forth, then that’s different. We always benefitted from the former approach.
84 unit apartment? What is this a housing plan for ants?
But at least it’s a start.
That doesn’t add any additional housing though. You’d at least think they’d be able to fast track the 84 unit building since they won’t have to go through a CoV approval process.
It will be probably cost 2x what it would have cost to sell the land and buy a 84-unit building on Esquimalt Rd from a developer, but none the less I think it is great news.
A RE lawyer can’t be forced to take on a client as far as I know? I’ve had many situations in my career where a conveyancing lawyer has refused to take a file for various reasons including just not being comfortable with the situation.
I can tell you many good RE lawyers would not touch writing up offers for the purposes of the buyer’s commission with a 10 foot pole.
Whether it is ethical or not, that is a different story. It’s like renovating a beautiful large basement suite and only putting in a shower because you don’t want to rent to people with kids. How are you ever going to prove that is what the owner/landlord was thinking inside their head when they did the reno.
Why would the seller be involved? Wouldn’t the offer still come through his or her listing agent? (just curious if I am missing something as I haven’t been involved in such).
Look how fast the Eby/Trudeau meeting produced results, or is this a coincidence?
Greater Victoria Chamber of Commerce chief executive Bruce Williams said it’s a good sign that senior leaders are discussing the prospect, given the housing shortage both on and off the base.
Lots of issues here
First of all, some listing agents have these types of clauses in their listing contract “Selling Agent must introduce and show property to Buyer otherwise the Cooperating Brokerage fee is reduced to $500”
Let’s not get sidetracked on whether this is beneficial to the seller or not (it isn’t) but it is signed by the seller and now you have a situation where the buyer is paying their buyer’s agent an hourly fee, but they are not getting the cooperating commission they were expecting.
Does it really make sense for buyer’s agent to be writing up offers without viewing the properties they are writing on?
Reputation is important, not just for the agent but believe it or not working with a reputable well liked realtor that others in the industry respect and like working with can be beneficial to the buyer. For example, on my listings when we have very close multiple offers the sellers will often ask me “have you worked with both of these agents before?” Especially now with the rescission period this is even more important as there are no truly unconditional offers anymore.
The answer is easy. This is not a service buyers or sellers typically ask for. They use realtors for buying and selling. That is, imo, because the general public accepts the commission structure and doesn’t know any alternatives and the accepted practice is to use a realtor. A good RE lawyer would have no problem doing this if asked and, in fact, would have a duty to do what their client asks in this situation.
In short, it is not common practice, but it is both legal and a way to save money. But a buyer/seller has to spend time making it happen.
I don’t think that is what the conversations were related to, I think it was more along the lines of get a lawyer to review your contract. However, let’s say the conversation is related to the above. Once again, there is theory and there is real life.
First of all, I’ve never see in in real life practice (1,000 transactions). Approximately 10 years ago an unrepresented lawyer I was showing a listing of mine in Oak Bay mentioned it and I had no idea what he was talking about to be honest. Interesting thing is he ended up using a realtor in the end.
Being in the industry I often go to FREE agent lectures put on by very knowledgeable senior partners at law firms specializing in real estate conveyancing or strata law or something tied to real estate. The lectures are very good, sometimes there are doughnuts, for example a very knowledgeable lawyer will put on a lecture at a brokerage about parking assignment in strata condo buildings and go over how to read a strata plan correctly for the parkade, different types of parking leases, whether spots can be assigned/sold, etc. I’ve learned a lot of valuable information from these FREE lawyer lectures over the years. Lecture ends, you go home.
However, you have to ask yourself an important real life question. Why do you think the lectures are FREE? Then you need to ask yourself why do you think a reputable knowledgeable real estate lawyer is not going to offer services of writing up an offer for a couple of thousand to kick back the remainder of the cooperating commission back to the buyer?
I am not saying the above is right or wrong, etc., but it is real life. Doctors are suppose to help sick people, right? If GP compensation went up to $1 million/year in BC do you really think we would have to wait 5 hours at a walk-in clinic.
Lmao @ 5 year CAD yield
And the big deal there is that the listing agent has to show up? Why would the buyers agent care about it if they’re not actually doing any work?
My understanding was that the conversations related to using a lawyer in RE transactions, other than for conveyancing, was to make an offer when you are not represented by a realtor and you wish to buy or sell and are attempting to bypass or assign the commission split.
In this case, unless you have access to the standard forms, and even if you do, most people will benefit from paying for an hour of a RE lawyer’s time to review the contract to ensure they have included the correct clauses and not missed anything important.
This is, in my opinion, a good use of legal time.
The lawyer thing seems to be coming up a lot so I’ll provide my two cents. In BC the offers are written on a standard contract and purchase template written by real estate lawyers and refined every year to meet regulatory requirements. There are only a few blanks to fill in (price, deposit, completion, conditions, and inclusions). Only a handful of basic clauses are typically added and clearly displayed. There isn’t there much for a lawyer to review. Lawyers provide more value when it comes to complicated easements/rights of way/covenants/etc. and giving an opinion on those.
In most countries there are many different templates and often the contract is a custom draft so way more value in a lawyer review in that scenario.
As I’ve said before real estate is 80% counseling and 20% selling property and that is why I think you see real estate law firms shy away from anything but conveyancing. It is tricky to bill for counseling and random crap. There are 100s of variables out there. For example, young couple buys property and inbetween going unconditional and completion date wants to show the property to a set of parents who are in town on a Sunday as they work during the week. That’s realistically a two hour process that is simply counseling/customer service whatever you want to place it under that has nothing to do with selling the property.
There is a reason why most contracts now include a clause that the buyer can revisit the property 2 to 3x between condition removal and completion.
Are you going to view three properties or 30 with your no-frills buyer’s agent?
Once again, many theoretical models that don’t work in reality. You could pay your buyer’s agent $100 per hour and then he or she rebates you the entire cooperating commission. What you don’t see is all the real life shitshows that would arise. For example, buyers wouldn’t want to pay their agent $100 per showing (time to get there and show is basically 1 hr) so they would call the listing agent instead pretending they aren’t working with anyone. Doubt buyers would be excited to receive an invoice every month during their search.
In 2012-2013 I ran a cash back model where the % of cash back received was based on the number of homes you viewed and received my share of hate from other agents as my buyers would call them directly to avoid number of homes viewed thresholds for the % cash back. This was one of multiple problems with this approach even thought it sounded perfect in theory (you see less homes less work for me and more cash back for you).
It’s very counter intuitive but there are likely many structural reasons for this. For example, munciaplities in BC push for one townhome complex access especially onto busy streets. When you have one access right away one problem that arises is the driveway. How do you deal with the insurance/maintenance/etc? The cost sharing agreement or some other legal avenue that is required to deal with it the munciaplity won’t be familiar with and nither will lawyers, realtors, buyers, etc., as everyone is familiar with the strata property act and unit entitlement concept.
There are many things the make way more sense in Canada and many things that make way more sense in Croatia. For example, in Croatia the townhomes are built out of concrete, every bathroom/laundry room has a drain, at the front door you have a hardwired switch that turns off all the lights in the townhome, etc. Here if you asked for a bathroom drain plumber is confused, plumbing inspector is confused, etc.
Weird. The exact opposite is true in Ontario, non-strata is touted as a selling point in RE listings. From what I can see locally all the new townhouses appear to be non-strata, the strata townhouses are in older neighbourhoods (I mean 1980’s, not really old).
Any Chance we can get U-Vic to put a real-estate law course into their curriculum? ( ok it is likely already there) Can we ad AI? Can we add passive sales techniques to these lawyers… Hmmm super realtors with a modified law degree …I like that
Do you not think that being unable, as a buyer, to choose a no-frills buyer’s agent (and to receive the associated savings) without having to negotiate a cashback deal is likely to result in a market failure? Marko himself said a potential client turned down $20K in free cash because it sounded so dodgy.
In what sane world / well-functioning market is that the only way to achieve a basic service / low cost option for the buyer?
I do agree that a price cap is probably not the way to go though.
Buyer’s agent is incentivized to get a higher price, not a lower one. Literally reducing their paycheck by negotiating.
Cumulative month to date. I should make that clearer.
Both are fundamentally rising when supply doesn’t meet demand, but they are otherwise related only indirectly. Some people think that if prices go up then owners can charge more rent but that’s not how it works.
High rents relative to mortgage payments motivate people to buy instead of rent and increase flows to resale market. Same vice versa.
If prices go up cap rates go down and rentals provide a lower return on investment. That brings in less investors and reduces rental vacancy rate which increases rents.
Agreed. For example BCFSA could do some investigation here, act as a shadow buyer, etc. I mean what’s the point of an independent regulator if they don’t do anything different than the previous industry regulator?
Haha good one.
Price controls are still bad though. If there really is a market failure here (I’m not convinced) then government should fix it by empowering the consumer rather than setting prices
If the counterargument of suggesting a commission rate of 0.25% is deliberately presented as a distorted or extreme version of the original proposal, in order to make it easier to attack, then it could be considered an example of a strawman argument.
Price not reported, waiting for the rescission period to pass.
Reality is if we packaged the data into a nice listing presentation and showed up with a lower commission business model the vast majority of sellers would still list with the other brokerage which has an “international presence” or some other completely subjective reason. As I commented below I’ve lost listings where the consumer concluded I wouldn’t work as hard because I was charging less.
You should see my conversations with people over the years. Once a guy called me about a $2 million pre-sale he was about to buy later that day and over the phone I offered him $20k cash back and he ended up going directly to showroom and paying full pop unrepresented. I bought a pre-sale in the same building (he knew this while I was offering him $20k) and eventually I asked him why he didn’t take the free $20k and he said “yea sorry, my wife thought it sounded shady.” Developer made a nice extra $30k.
When I say the consumer is the problem this is based on a lot of lack of common sense behaviour I’ve encountered over the years.
This is my understanding about the pending date. There are actually several dates to think about.
-The date that your offer is accepted is the “meeting of minds”
-Pending date when subject’s are removed and the property moves from being contingent to pending.
-Closing date when the Title is registered in the land office.
It is really amazing that you can graph and distill information like this. Are you AI?
Just doing some reading on how to buy in Scotland which has a blind bidding process. Which is similar to what happens when a listing agent under prices a property to create an auction environment in order to encourage multiple bids. They don’t seem to have buyer’s agents in Scotland or at least I haven’t found any reference to one.
You’ll need a solicitor or licensed conveyancer before you can make an offer on a property. They are responsible for putting in the offer, negotiating and checking the contract and organizing the transfer of the Title and money.
If you are looking for an alternative method of buying and selling real estate it’s an interesting read.
I put it in after the rescission period expires as that is what we do with the pre-sale condo rescission period but I don’t know what the actual correct method is 🙂 I should probably check with the VREB.
Coming from the UK, the real estate fees here seem insane. When I sold my first place in Edinburgh 20 years ago, the practice was to show your own home. No buyers realtor. The seller had an ‘estate agent’, who did not show the property. Fees were 1.5%, plus a small fixed cost for a lawyer. The fees here of 6%/3% make no sense given that property prices have doubled in a short period. Realtors don’t do twice the work. It was bizarre to see realtors faces on billboards and bus stops. Nobody over there gave 2 cents about which individual was selling their place.
If it is indeed a free market here like Marko says and the high fees are mostly a result of fearful sellers/buyers choosing full commission realtors, then the market should be ripe for a new selling service. Usually the free market works well to improve market inefficiencies like this. In reality I think there is probably still some anti-competitive behaviour by stakeholders that dissuades the use of lower cost options. One of them is definitely that buyer’s realtors gently guide their clients away from 1% listings. Rather than Barrister’s proposal of a price cap on fees, my preference would be for the government to spend time, money and effort eradicating any remaining anti-competitive practices. Alternatives to full commission realtors also clearly need to do a better job of addressing all of the objections to using their service.
I totally understand how flawed the buyer end of the system is. Many times in my career I’ve had buyers buy the 1st property they’ve viewed and many times I’ve had and still have buyers looking after 3+ years 50+ showings later. Same cooperating commission or even worse after showing someone 50+ places they decide to move or not buy, or buy privately (has happened more than once) etc., and you make zero so you need to punish the person that buys the 1st property they view by not giving them a larger discount (cash back).
I tried a lot of different methods to address this when I was doing cash back to buyers models but nothing worked. The one thing I did learn over the years is when a potential buyer starts of with “we need minimal assistance and hand-holding and this will be super easy for you, but we want a deal,” literally 98% of the time it is the opposite in that they are difficult to work with. I say 98% because I’ve encountered that over 50 times via email/phone/etc., and only one such approach ended up being easy. A young family that bought in Gordon Head. The actual easy buyers to work with never start the introduction with they are easy to work with and most often aren’t looking for a deal.
So I don’t know what the answer is but I am sceptical of perfect theoretical examples (i.e. both parties pay their own agent per hour).
Notice a lot of “offer, waiting on rescission period” in notes. What do you put in for pending date? Is it the day the place went unconditional, or the day the rescission period expires?
Going to make a YouTube video on the rescission period tomorrow. It is making for messy contracts crossing out the rescission period numbers going back and forth on offers it doesn’t even apply to (conditional).
As for the unconditional offers I’ve been involved in no one has used the rescission period to back out yet. Kind of makes sense, if you are going unconditional you are willingly going unconditional understanding the risks.
I wouldn’t call the last few weeks underpricing tactic. The vast majority of the multiple offers I was involved were not engineered to be multiple offers, but rather happened with the market turning a bit (demand came back, inventory of quality listings still very low).
Yup, terrible for buyers. Unclear if anything can be done about it outside of just more inventory. The 3 day rescission period at least gives people an out if they discover they made a catastrophic error.
Effective commission and sales price to assessed value. May be some confounds here with lower priced properties being weaker (and also having higher effective commissions due to the first $100k component.
This is from 1346 condo listings in 2013 (when market was roughly flat). 1237 condos with 3% on first $100k & 1.5% balance, 109 with other commissions (some higher some lower).
No correlation between DOM and commission.
No significant difference between average commission of properties that sold vs didn’t sell.
I have always hated the under pricing tactic. It creates sense of urgency and blinds the buyer with emotions on a purchase that should be more rational given its size. I appreciate you pointing out that “selling over asking” is maybe not a great measure of demand given sales tactics.