Playing with affordability
We know that there’s been no relief in affordability lately. After staying relatively steady for a year as prices fell in concert with rising rates, it deteriorated even more in recent months as rates pushed higher both in the bond market and from the central bank. Impossible to call a top, but in the past we have seen a cycle of affordability deteriorating for a number of years followed by improvement. In the condo market we’ve seen affordability generally stay within a fixed range over the decades. Affordability of single family homes also seems to cycle back and forth, with the additional trend of gradually getting less and less affordable over decades as single family homes make up a smaller and smaller proportion of the housing stock.
What will happen this time? Will affordability improve over the next few years as it has in the past, or are we in for permanently unaffordable real estate market? No one knows for sure, but I put together a simple tool to allow you to play with the data and see how it impacts affordability. In the chart below you can see affordability for houses, townhouses, and condos charted since 1987. Up until October 2023 it uses the actual median prices (3 month average), BC household income, and prevailing discounted mortgage rates to compute affordability. Then there’s a projection for 1 year into the future to October 2024, where you can change the parameters. Use the sliders below the chart to move prices, incomes, and mortgage rates and see the impact on affordability. By default it starts at the current values (with the caveat that it uses the October 2023 prices rather than the 3 month average, which is why the October 2023 and 2024 data points aren’t the same). You can adjust the parameters up and down by 50% (except income which only goes up).
Of course the market isn’t going to swing that wildly in one year, but the tool allows you to visualize how affordability would change, regardless of the timeframe. For example at today’s rates and prices, incomes would have to jump 50% to make homes as affordable as they were pre-pandemic. But if the average rate dropped back to 3.5%, it would only take a ~17% increase in incomes without moving prices at all. And if incomes only increased say 10% and rates stabilized at 5%, it would take a 15-20% drop in prices to get to the same point. Hundreds of options. Remember that the projection point one year out is arbitrary, you can imagine it anywhere in the future.
What do you think is the most likely outcome?
Also the weekly numbers
| November 2023 |
Nov
2022
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 66 | 152 | 384 | ||
| New Listings | 192 | 429 | 785 | ||
| Active Listings | 2722 | 2743 | 2111 | ||
| Sales to New Listings | 34% | 35% | 49% | ||
| Sales YoY Change | -5% | -3% | -41% | ||
| New Lists YoY Change | +12% | +14% | +13% | ||
| Inventory YoY Change | +25% | +25% | +138% | ||
| Months of Inventory | 5.5 | ||||
No huge moves in the market in the first two weeks of the month. New listings from the grandfathered AirBnB units are still hitting the market in a noticeable way which has contributed to bringing the volume of new listings up by 14% over last year, but it’s not a huge flood. In the last three weeks there were 33 listings in those buildings, VS just 5 in the same period a year ago. Most sellers know it’s a tough time to sell at the best of times going into the traditionally quietest part of the year. With higher rates and an uncertain market, the buyer pool is shallow enough that even market-priced listings may linger a lot longer on the market than most people are used to. The ones that are braving it have generally not managed to turn the listings into sales, indicating that advertised prices are still too high given the new reality without short term rentals. That said it’s worth a try, and there have been a couple sales at prices I would say are little changed from their pre-regulation value. There aren’t many buyers biting, but it only takes one.
The increase in new listings is most noticeable from the short term rental regulations, but listings are also up for most other property types. These are small numbers, but something to watch as an indicator of owner stress that will show up long before any movement in mortgage arrears rates. The central bank has warned that rates may stay “higher for good”, as in not returning fully to the ultra-low levels we saw during and before the pandemic. I wouldn’t say they have a lot of credibility on rate predictions given their famous flub of rates staying low for a very long time, but borrowers should probably not be banking on seeing sub 3% rates before their next renewal, or perhaps even the following one. In the short term there is some rate relief coming though, with bond yields falling again to their lowest level since July after a low inflation print out of the US. Whether the inflation fight is done or not, bond investors believe the end is in sight.
New post: https://househuntvictoria.ca/2023/11/21/leaseholds
2,200-home development in south Nanaimo gets go-ahead
https://www.timescolonist.com/local-news/2200-home-development-in-south-nanaimo-gets-go-ahead-7860805
@Frank I’ll answer since I was one of the ones going on about how awesome they are to stay in when traveling with kids (hotels are fine for me without kids). I’m not too surprised that the government is coming down hard on them. Too many people were drinking from the well and it caused another well to dry up – the government waited as long as it could and then finally had to do something. I understand why the government did what it did and I support it. We are still staying in an Airbnb when we go to cultus lake next summer but I booked it already and made sure it was one in someone’s primary residence. So the big planners like me will still probably have some options since we do things way ahead. Although less options isn’t awesome but I understand why and generally support the legislation. People were just too damn greedy.
While I’m in the mood of sitting here and talking to myself at 3:45am, This Island Is a spectacular place to live, development is in its infancy. If you think the prices are high now…you had better think again.
It has been mentioned here many times, Its not timing the market…Its time In the market.
It has also been mentioned here many times, do whatever everyone else is doing.
patriotz…Look at Hawaii, all the locals live in the jungle except the ones who bought and held Real estate.
I seem to remember a few months ago when Airbnbs were being discussed here, several contributors commented on how fabulous they were and used them all the time when traveling. I understood their point of view. Now that they seem to soon become a thing of the past, at least in Canada, what do they think now?
Keeping people working in RE and supporting current price levels are two different things, and are largely in opposition to each other if you think about it. Bottom line is people have to afford the product to keep them working. That’s the very reason RE busts happen.
Eby and company aren’t dumb enough to bring in something that won’t work and will decrease rental supply – and they’ve said so repeatedly. That’s the polar opposite to the restrictions on STR, which do work and do increase rental supply.
The Feds are going to step up. The RE industry is Huge. Loan officers, bank managers, mortgage brokers, insurance brokers, real estate agents, lawyers, concrete suppliers, lumber suppliers, paint suppliers, excavation and trucking, surveyors, engineers, city hall, loggers, carpenters, plumbers, electricians, roofers, painters, land scapers, coffee shops, restaurants, That’s just off the top of my head…along with all the taxes the above generate.
Its just way too big to fail…And they know it.
3% 5 year fixed by early 2025.
These good deals are back in 1998. In today’s world… fair market value is the best deal your going to get, end of story.
OK, I’ll bite … where are these “good deals”?
I was considering doing an Airbnb in my back yard cottage of my primary residence. CRA is all over it. You need a business license, I’m guessing you lose your capital gains exemption on your primary residence now that you are using it as a business.
There’s no such thing as a free lunch…I knew it was too good to be true.
I bailed.
You really only have to look at the tone of comments like this to realize how charged/polarizing this has become. And I keep coming back to thinking that, in this type of environment, it would be better to consider the possibility of vacancy control also being on the table at some point, if the economy doesn’t roll over first.
I’m good, I have my forever house.
Then jump on it Max.
Its the best tangible asset to own…and the 40% drop in the 80s recovered…bigly.
You can live in it, touch it, feel it, smell it, you can even taste it if that’s your thing…but most important is its yours, and you can call it home.
Its forced savings which are 100% tax free. I don’t expect the same price accelerated run up we have experienced over the past couple of decades. When I bought my house in 1998 we were right in the middle of a recession…I got a good deal…I jumped on it.
I am seeing some pretty good deals out there right now.
Guess you don’t consider a 40% drop in the 80s to not be sizeable? Only took a decade to recover.
65k and 95k lower than the winning bids. The listings weren’t stale and had multiple offers on them.
Nope, but they can be sleazy and cut corners in a multitude of other way. Much more variability with “mom and pop” landlords. Some great, some terrible.
I was born and raised in Victoria. Through my 50 years I have never seen a sizable RE correction. This could be the bottom, this could be the time to buy.
Use these airbnb’s as your entry point.
When I bought my house in 1998 for $225k my wife thought I was nuts. I was young, over leveraged, working 7 days a week just to make the wheels turn.
You have to live somewhere, tax free gains, security…Its never going to crash.
CBC reporting that tomorrow Freeland will announce:
https://www.youtube.com/watch?v=lK309z7PH3M
You want punishment of landlords, take a look at New Zealand where mortgage interest isn’t deductible – at all – for any loan taken out since 2021.
Airbnb is a nest of pirates and any action against them at any level is well deserved. It appears to me from what I’ve read that the focus will be on encouraging more purpose built rentals, not bashing existing landlords whether large or small. But we’ll see.
The liberals have successfully navigated the past elections by making outlandish promises (affordable housing, etc.) before the elections to buy votes from one group (Millennials, etc.) and not keeping the promises to keep the votes from another group (boomers, etc.).
Now, they are worried that the past strategies won’t work in the next election. They are losing the younger voters, their main voting block. They have decided (or at least appear) to punish the investors in the housing market and capitalize on the resentment of renters and younger, first time buyers towards landlords and investors. They will closely monitor the polls to see what’s sticking and hammer on those that get the maximum support. Airbnb is an obvious target and their action on them is getting huge support. They need a big bump in polls so they will go big on announcements tomorrow.
Shouldn’t be, since ABC REIT can’t evict you because they’ve sold the unit or want to move in themselves.
Typically increasing taxes isn’t much of a hail Mary to save the day for unpopular governments. But if you can somehow demonize the mom and pop landlords, then perhaps the capital gains tweak could be popular. From where I sit, the big rental companies (REITs and others) are actually just as hated as the “mom and pop” landlords)
If this happens it will be interesting to see how it is applied. What about capital gains on other kinds of second or third properties that are not rented, such as vacation properties? It would be perverse if there was more favourable tax treatment on vacation properties left empty most of the time than on small time rentals.
how much lower were your unconditionals?
Made 2 unconditional offers so far this fall. Both sellers went with the higher conditionals, but they were in positions to wait for them to be lifted. Also going with a 10% deposit on offers to try to overcome the any rescission period apprehension by hopefully showing we are serious about getting it done. See what the 3rd try brings. Just not about to write any letters.
Keep your eye on the re-sales at dockside green.
They need to be careful (but they won’t be), chasing populist policies can backfire quickly because they are seldom thought out all the way (especially by dying governments at the end of their cycle trying to hang on). Investment builds these things called homes and with all artificial costs every level of government adds to build homes; to minus a lot of money that gets homes built will likely end in many fewer homes down the road. Nothing like shooting ourselves in the foot.
https://loanscanada.ca/taxes/avoid-capital-gains-tax-on-rental-property/
They talk about some strategies to “offset” the capital gains with capital losses elsewhere, not avoiding capital gains.
Would you prefer to pay 20% tax (assuming 40% bracket) now or 40% later when the house is sold for funding retirement (presumably in 15-25 years)? I think most investors who bought before Covid would prefer to pay 20% now (bird in hand) rather than 40% later. Investors who bought during the Covid FOMO may not have any capital gains so their main issue is negative cash flow with variable rate mortgages. How long can they handle negative cashflows?
Since capital gains with stocks would still have 50% inclusion rate, it makes sense to buy them right now and it will make even more sense with 100% inclusion on RE capital gains (if a grace period is given before implementation).
Banks are not ready to pass on the savings from the recent drop in yields. The credit spreads (mortgage rates minus GoC bond yields) generally expand in recessions anyway. Investors with negative cash flows better have deep pockets.
Investors are very important for the housing market as they have historically caused an over heated market to soften. When investors believe the market is over priced they sell, thereby increasing supply and bringing prices down.
That didn’t happen this time as the low interest rate and high rental rates encouraged investors to purchase.
The government is now incentivizing investors to do what they should have done pre-pandemic. Sell.
Basically if you investors can’t control yourselves then the government is going to bring the cane out of the cabinet and give you a thrashing.
Bingo
Yup, risk of bad moves is high when government panics. So far generally ok/good, but anything could happen when you’re down in the polls.
Problem is everyone freezes up when there is an opportunity. Lowball unconditional offer strategy would be a good one to employ in the current market but you just don’t see it. You see lowballs, but with conditions, which don’t have nearly the same pyschological impact on the seller.
You throw down something unconditional infront of a seller that has been trying to sell for a while all of a sudden their “bottom line” can change. Best part as a buyer is you can put wording into the contract “This is an unconditional offer” but legsilation still gives you three business days to change your mind for a small fee. My experience so far with the rescission period legislation (aka cooling off period) is sellers still view the “unconditional offer” as unconditional.
Like you give a seller
$1,025,000 8 days conditions
and $1,000,000 “unconditional”
The majority of sellers will go with unconditional even thought for $2,500 penalty the unconditional buyer can bail.
I don’t think there’d be a pre-announcement of a cap gains increase on rental properties. In the past, theyve made any changes in cap gains rates effective on the date of announcement, usually budget day. There’s a reason for that, which is that people don’t need to sell to trigger the gain. They can (and would) do various things, a simple example is to change use of the property from a rental to principle residence which crystallizes the gain, which they would pay at the lower rate thanks to the government giving them notice. So if they do it, it will likely be a surprise, and effective upon announcement.
Ahh I remember that year, it was wild!! I am honestly surprised there were 268 transactions though but I bet you could have gotten a steal if you put in a lowball all cash offer with no conditions.
Yes but realistically if someone has a bunch of rentals (which they have substantial unrealized gains in) and feds announce this, it should motivate them to sell at least part of their portfolio prior to it coming into effect. Those who are cashflow negative or barely neutral but have unrealized gains will be even more motivated.
The reason for that is probably due to the taxation of the retained earnings used to buy the real estate vs. your personal tax rate if the money was withdrawn Marko. Because you likely have high personal income this route may make sense. And because you have a mortgage and other costs of ownership for your corp your taxes won’t be that high most likely although your accounting and legal fees will add up. As the mortgage is paid down and rents rise you’ll be paying 50% on any net income and capital gains if you sell.
Property rights is concerning, but let’s see what happens to lending standards and liquidity available to finance mortgages if the feds ban mortgage penalties tomorrow for missed payments. The contracts become no longer worth the paper they are written on. I can imagine many lenders wanting a higher premium for rates from many borrowers if they can’t collect penalties for contract breaches. As well, it will probably drive down the amount of risk may lenders are willing accept and end up driving more borrowers to higher rate alternative lenders. The funny part is that they are bringing these rules to protect some borrowers, but it will likely result in those folks that are challenged to make their payments not being able to get financed or refinanced in the end.
Under the advice of my accountant I have my rental properties in my Holdco, from a tax perspective doesn’t seem too bad?
Mind you a lot of downsides…..almost impossible to finance and ultra complicated with personal guarantees and all sorts of crap, it’s like 100 pds files to get a 200k mortgage on a 500k condo and the interest rates are higher as “commercial.” Accounting and legal fees every year add up. More and more government non-sense like the benificial ownership registry and filing all of that.
Down 3% on what was the down from last year.. I would have to look back at Leo’s charts but I do recall a lot of months being down 30-40% last year. So, it might be tough to drive numbers even lower… It would be quite the signal if monthly drops continue happen off what were lows from the previous year.
Total jibber jabber. Corporations pay way more tax on passive income and pay capital gains taxes.
To qualify for the active business corporate tax rate you need to hire more than five full-time employees for a real estate business. If you don’t, you are taxed at the passive income rate. If you have five or more full-time employees you are a small business and paying wages and this active business can include rental income but you are still taxed on the capital gains. There is no free lunch.
My napkin month….unless we get an increase in sales now due to 5-year bonds sliding every day.
230 + 78 + 60 = 368 for the month
2020 – 795
2021 – 653
2022 – 384
2023 – 368ish?
Other notable slow Novembers
2012 – 366
2008 – 268
2000 – 387
and that is it! All other Novembers since 1990 have been over 400.
We’ve also never had two consecutive years with Novembers under 400 since 1990.
While at the same time very week we hit an all time record in terms of licenced agents with the VREB with 1653 this morning, another all time record.
50% has already held me back from selling any real estate (if it wasn’t for the taxes I would probably sell something and buy some dividend paying stocks). At 25% or 0% keeping the real estate investments forever at that point.
Same situation here, except it has affected me personally in a positive sense since I airbnb my personal residence and my competition is now removed. I recently received a 42 night stay @ $11,000 request in the New Year from a local couple renovating their condo but I won’t be away so I declined and I think I’ll up my nightly rate to $325 (30 day minimum) for 2024…..which will be more than I spend on a daily basis while I am away, plane tickets included. Last year I was getting $250/night during my two trips.
What bothers me is the attack on property rights and you just don’t know what is next.
I wasn’t referring to primary residences, but your accountant definitely knows more than I do about this. I did find this, but I know nothing of the reliability of the source:
https://loanscanada.ca/taxes/avoid-capital-gains-tax-on-rental-property/
A corporation is a legal entity within which to conduct business and is distinct from its owners. You can choose to incorporate your rental property business to reduce your tax obligations, since corporations pay less tax than individuals. Plus, you can save on tax rates by splitting dividend income amongst shareholders.
However, incorporating your rental property business involves ongoing administrative costs, which are usually much higher for a corporation than a sole proprietorship.
I already commented on a previous post of what my insider contacts out east have heard. They are going after small mom and pops with multiple units, not purpose built apartments etc. I can’t recall exactly now and don’t got time to search for old posts, but I think it was the same 50% cap gains exemption on first rental property, 25% on second and 0% on 3 or more and would only apply to certain RE products.
They want to be seen as doing something about the “commodification of housing”
Not that I know of.
Corporations are not eligible for the primary residence exemption and must pay capital gains on the sale of assets, including real estate. The government gets way more taxes from the sale of rental real estate, whether owned by individuals or corporations, than it does from primary residences. In addition the rents received by a corporation are considered passive income and taxed at 50%.
Our accountant told us it is usually far better to own real estate personally than through a corporation due to the tax burden.
Wouldn’t purpose-built rentals tend to be owned by corporations? And if so, wouldn’t the tax rules that apply to them be different? I’ve heard it’s easier for a corporation to dodge capital gains than for a lowly schmuck with a couple of investment properties.
Maybe someday Canada can have tax laws as convoluted as the United States. Perchance to dream.
Hopefully they don’t do this; however, they are looking to get votes at the moment. What seems dumb from a reasoned position might have knee-jerk voter appeal. Huge failure of government if this is where they go, but it seems possible.
Ever since the removal of legal str zoning, which did not affect me personally, I have little faith that any of level of government will act in a manner that considers those who have worked hard and did follow the rules in their all steam ahead housing crisis response that is decades late. Erosion of confidence in stable laws and rules and vilifying any sector of society unfairly is not a good thing for the economy imo.
I am in agreement with many of the changes that have been made, but feel like we are heading to overcorrect, which often happens with big social shifts.
Homeowners Refuse to Accept the Awkward Truth: They’re Rich
https://thewalrus.ca/homeowners-refuse-to-accept-the-awkward-truth-theyre-rich/
It would be pretty ironic if the feds pass rules to reduce costs on purpose built rentals (incentivizing them) and then increase costs for secondary market rentals (discincentivizing them).
I doubt they are dumb enough to do that. Doesn’t do anything for the housing shortage, except potentially make it worse.
Patriotz asked “What do you do with the difficult cases?
Well…first off ….most if not all of the participants had drug issues.
But you make a very good point. It’s why you have to look carefully when a group talks about the success rate.
So what do you do with the difficult cases?
You give them a choice of the program if they choose not to do drugs.
If they do not want to do that then you admit them into a program against their will.
That’s the part that takes courage if we ever want to change things.
The Red Fish in Vancouver offers such a choice and as I mentioned before, the ones that are admitted against their will and then a year later are asked if they want to be part of the program…. guess what? A large percentage of them decide to stay in the program voluntarily.
And they are grateful for getting their lives back.
People often make this choice when they are told…you stay in Jail or you enter this program. They often choose the program.
There are solutions. Ones that do work. But they take courage from the politicians.
I can see that such programs are now being looked at now. But it takes courage.
The cost of what we are doing now is enormous with so many layers of groups and governments.
Anyway. I am done responding on this issue for a while. This is a housing site.
Thanks for everyone’s patience.
It does effect all of us and relates to housing.
I’m thinking that poster might of been thinking of ideas like 100% capital gains inclusion rates on non primary residence properties. Also tightning up rules for what qualifies for the primary residence exception. Thats my best guess.
I’ve never been a landlord, so I know very little about this. Are you talking about the elimination of certain loopholes? I thought rental properties were subject to capital gains tax.
Of course, because you’ve picked the easiest cases before you’ve even started. How do we deal with the tough ones?
BC Housing is partnering with Kelowna to build a tiny home community with 50+ units. Scheduled to open early 2024. There will be government funded staff on site 24.7. This global article has three videos, with interviews from various stakeholders, including interviews with a homeless woman (who is in favour), and mayors of Duncan (that already has a tiny home community). And also the mayor of Kelowna, who is also optimistic.
I like that at least we are trying something, involving a heated home, and a short time line.
Anyway, here’s the November 2023 article describing the Kelowna tiny home plans and mayor of duncan talking about the existing tiny home community . There are three separate videos . All the people interviewed seem upbeat about the idea, with the exception of a business owner (in the industrial zone which is the site) https://globalnews.ca/news/10079545/tiny-homes-kelowna-proven-track-record-manufacturer/ I would hope they are building these close to transit.
Will a change in the Capital Gains be the straw that breaks the camel’s back?
Depends on how it is implemented.
My opinion is that never have so few people owned so much real estate. If legislation was passed that set a date in the future that the tax change would be applied, then you might expect a flurry of landlords selling off their surplus properties before the change is implemented.
@Deryk
I remember thinking about how promising it sounded. You think about how many people who would have made it through the program in the 15 years it would have been around, and it’s just such a shame, such a waste that they shut that down.
Yes James…the place you mentioned was Woodwynn Farms. (Now called Mawuec since it was given back to the first nations.)
There was much written about it in the papers at the time. (WIth a lot of errors I might say! And so a lot of misinformation was generated)
That’s where I volunteered and created a large peace garden filled full of crops. The photo shows the peace garden. The lavender alone had the ability to produce over forty thousand dollars of lavender soap, per season.
The participants helped with the production.
We had just established and proven the process and had good contacts to market the soap across Canada when the plug was pulled because of the pushback from the community.
I saw amazing changes in the participants when I was there. Their confidence and excitement in life changed dramatically over each year.
No drugs were allowed. One of the key ingredients to success.
After witnessing the changes in people, using that approach, It’s why I am not a fan of band aide solutions.
That’s for the people who makes the big bucks to predict. MY opinion is still the same, higher rate duration will be the biggest factor.
For anyone interested in alternative solutions to how BC is currently handling people with addictions and mental illness, you might wish to read this article.
https://goldenageofgaia.com/2021/10/16/port-alberni-vs-that-ogre-on-the-river-a-new-therapeutic-community-for-women/
It is much the same idea as to what Woodwyn Farms was all about.
The idea of community and people working to grow their own food does wonders for the healing process and helps them form new friends and a sense of pride.
A therapeutic community is a full rounded experience that creates a life that helps people gets to the root of their issues.
There are many such places using the label of “Therapeutic community” because it has become a popular buzz word.
For example, we visited such a place in NB and it was a total failure. Why? Because the participants were not allowed to do any work on the farm to grow their own food because it was viewed by the government as slave labor. Instead…the participants stood around smoking in small groups. The program totally missed the point of what a therapeutic community is all about.
Anyway. If you have time, the above article gives a good description of a place that is doing it right.
Month to date market activity:
Sales: 230 (down 3% from same time last year)
New lists: 612 (up 19%)
Inventory: 2744 (up 28%)
To add to this, I did a quick google search to see what their listing price were. I don’t have access to MLS so forgive me if this is incorrect!
1547 oak park (suited): 1.05 (listed at 1.15)
977 kentwood: 1.2 (listed at 1.339)
1554 ash rd: 850 (listed 1,069,999)
3840 cedar hill rd (suited) 975 (listed at 1.089)
Will that be the straw that breaks the RE market?
STR getting hammered on all sides. Not sure what areas in other provinces that are high priced don’t already have STR controls though.
There was someone on the island who wanted to house people on a farm, and have them help work the land while they recovered from addiction (if I remember correctly, it was because that’s what helped them). They already had a parcel of land in Central Saanich, but it was shut down by the NIMBY neighbours if I remember correctly.
Edit: Woodwynn farm, they tried for a decade.
https://www.timescolonist.com/islander/woodwynn-farm-dedicated-to-changing-lives-of-homeless-4637755
https://www.victoriabuzz.com/2020/12/traditional-lands-at-woodwynn-farm-returned-to-tsartlip-first-nation/
Where I am living they have converted some parking lots in outer rims of cities to something like a tent city except it’s people with camper vans and the like.
As for the tiny towns. To me it’s largely about density. My understanding is that tiny town by Royal athletic is considered successful (including by the people living there). There’s only 20 (or something low like that) units so they all know each other. Cameras (in outdoor shared spaces) also help. People create their own communities and to say nothing will work isn’t especially helpful. Though I do 100% agree that significant density for that population in particular would be very unwise.
Thanks, Deryk, obviously you make valid points. The problem seems pretty overwhelming, and of course it’s easier to sort of tune out, give some money to charity & mentally just move on. Hats off to those who actually get into the trenches.
couple of good prices in the recent sales.
1547 oak park (suited): 1.05
977 kentwood: 1.2
1554 ash rd: 850
3840 cedar hill rd (suited) 975
Surprised 983 Abbey road is still there at 1.15
LMAO, CRA coming in hot for short-term rentals now. I am telling you, next up are changes to capital gains tax for rental properties.
.
Yes, in the South Pacific (Tahiti) for sure. I met people who asked me where Canada was! But I said Vancouver in lots of places, and they knew it. Somehow, everyone knew Seattle and they knew what the weather was like etc. funny thing is Americans know Vancouver but then ask how bad the winters are. Then you say “it’s like Seattle” and they know all about it, and ask about the rain 🙂
Interesting. Is Seattle really more globally well-known than Vancouver? I mean, the latter hosted the Olympics semi-recently.
Seems like a good plan to me. Thanks for the discussion.
I didn’t make it to Paris. I’ll take your word about the Paris tent cities being “fashionable”, but this article from France isn’t as charitable and calls them “chaos”
https://www.thelocal.fr/20190329/out-of-sight-but-still-there-the-scandal-of-squalid-paris-migrant-camps
“Chaos at the gates of Paris
The ‘tent city’ huddles under Paris’ busy inner ring road, largely invisible to the many thousands of drivers who pass each day.
“It’s awful here, people are fighting all the time, over the food when there’s not enough, and then the drug people cause trouble sometimes,” said the 22-year-old who said he has been living under the noisy flyover for the past two months.
Thanks Peter for a thoughtful conversation on homelessness.( I could point to someone else who does not have the same thoughtfulness, but I won’t)
I have learned a lot about homelessness and mental illness and addictions and the revolving door court system and the collateral damage to the families as they try to cope with the mounting legal bills and lack of help from the government for adults with mental illness, especially for people who refuse treatment.
I honestly believe that the system will have to try the Tiny Home approach until they witness for themselves that it is not working.
I raised the question about safety in an earlier post.
Will there be someone to escort people to the washrooms in the middle of the night? (Those ideas have been tossed around at times)
What about drug use? Are they allowed?
What do you do with someone who doesn’t want to follow any rules?
Do they get evicted?
Where do they go?
Who is going to police these Tiny Home sites if they deteriorate in safety like Pandora has. (No company in Victoria will serve legal papers on a person on Pandora street because it is deemed unsafe. If you ask the police to help, they will accompany you, but not after dark because they say it is not safe to do so.) There are many legitimate reasons to be serving someone living on the street with court papers. (Travel permission needs, children’s visitation arrangements, civil assault charges, divorce papers etc etc)
What makes us think these Tiny home’s will not deteriorate like Pandora street?
The same basic issues will exist. No support for mental illness issues. Same drug issues.
Who will do the laundry? (I presume there will be a facility as part of the set up.)
Will the people in these tiny homes learn how to choose good food groups and take part in the preparation of the food in the communal kitchen? Or will they be fed clam shell meals of questionable nutrition? (It looks like the units have no kitchen in each unit and I believe I read somewhere that a they would all share a kitchen space or eating area.) Who organizes all that?
Who takes on the legal responsibility of legal claims against the site in the event of damage to property or persons?
I could go on and on.
I’m not expecting you to answer these questions Peter. I’m simply pointing out some of the logistics that need to be considered.
I’m also not talking about people who just can’t find housing while they go to school or work. I’m talking about the people who can’t cope because of mental illness and addictions.
I like the model of the Red Fish in Vancouver. (I think it is out on the Lougheed highway somewhere.)
I mentioned it in an earlier post.
Patrick I guess u weren’t in Paris, even there I found them to be fashionable.
First of all I believe the court ruling said that they had to have shelter spaces and not their own unit. We bought a lot of motels and if they are full ( I have heard that they are not) then just throw bunk beds into the rooms. Solves the housing problem if that is the goal.
If your goal is to help the drug addicted then most of them require extended institutionalization, most often on an involuntary basis since they are seriously brain damaged from the drugs. Give it a moments thought and ask yourself what do the drugs actually do that creates an addict?
I don’t think so. I did a lot of travelling this year, including Europe, South Pacific and Australia/NZ.
I didn’t see tent cities or even tents on the street anywhere.
Moreover, when chatting with a casual stranger, when they asked me where I was from, to save time I’d say Seattle as they always knew where that was. And I found that one thing they knew about Seattle and wanted to talk about was the Seattle homeless problem with people living in tents in the street, and they’d say “that’s crazy, why do they allow that, it would be illegal here”.
So “urban tenting” isn’t the new norm in other places, and should be stopped here too, as long as we have homes available for these unfortunate people.
You’ve got me mixed up with someone else. I think you’re looking for “Caveat”
Patrick, if you are going to quote me, at least be accurate as to context. I was not saying that all SFH will drop in value. I did say that SFH that are adjacent to a newly built four story MM will likely drop a significant amount in value. The identical home a few blocks away, all else being equal, is worth more than the same home besides a four story apartment block.
Moreover, I suspect that there will be little or no upward pressure from up zoning virtually the whole province. Basically, you have removed the element of scarcity by upzoning everything.
Pretty sure urban tenting is here to stay. It’s one of many crises in Canada. We should just work on the doctor shtick first so I don’t have to pay Telus every month .
It’s an interesting point. We live in North Saanich so about as far away from the direct issue as you can imagine. And yet, about a month ago, suddenly there was a person living in their car on the side of the road not far from us. So, I will admit, first thought was uncharitable – well, WTH and how do we get rid of this person? Followed very quickly by well, live & let live, they’re not harming me. But then by about day 3 I drive by, and guess what, now the guy has spread garbage all around the car – I mean, like, a field of garbage. Next day he’s gone, no action of mine, but I was glad to see it. Just because you’re living in your car shouldn’t mean suddenly no rules apply to you?
As per usual, I don’t have the answers, but Deryk I’m wondering what you see as answers or why the tiny homes idea couldn’t be at least part of a ‘solution’? Genuinely interested, as I know you have immersed yourself in these issues.
Obviously there can’t be one single panacea, as some of the homeless are homeless for vastly different reasons. I’ve had a family member in the throes of addiction and I was very glad they were able to get state-sponsored help – it worked, they’re clean, they’re working, and renting. And then nowadays, there are perhaps more and more people drifting near the edge of homelessness by economic reasons and they don’t want to be there and deserve help. Unfortunately, there also seem to be increasing numbers of aggressive people for whom anything goes – friend of mine had their car utterly vandalized recently downtown by one in a very confrontational event.
Having NO enforcement of laws, and buying them hotels in the downtown core seems crazy to me, and so when someone proposes something like tiny homes or whatever, I think it’s worth at least a real discussion of pros & cons.
Derek
Yes, but who is the NIMBY here? Maybe it’s you!
If you wake up tomorrow to find a pitched tent on your front lawn, with a homeless guy living in it. When deciding what to do next. Will you apply all these points you’ve made about homelessness being a complex problem, and how ‘time will tell’ what happens. Or do you phone the police immediately with the goal of removing the homeless guy and his tent ASAP? And if the cops come, and tell you “great news, we talked to the guy, and he’s agreed to move his tent a little off your property and onto the city boulevard in front of your house.
Are you cool with that homeless guy living on your property or the boulevard? Or would you instantly become a NIMBY (that you despise) and say I don’t want a “homeless guy in my yard!” And would you want to hear the points you’ve brought forward here on HHV, like the homeless guy telling you that your house is a great location for him, being near his drug dealer and a pawn shop to fence his stolen goods!
The point is, if you don’t want to be a NIMBY on tent cities , you’d need to be willing to tolerate a tent city on your street, not just “downtown” – where you don’t live! instead, ask yourself “as a caring, concerned advocate for homeless people, what would I tolerate for homeless people living on my own street?”, and you’ll have your answer as to what cities should do about homeless living on the streets.
Just order a new tiny home, they cost $21,500 CAD.
I didn’t hear anyone say that it is societies job to create housing for addicts closer to the drug dealers.
I believe that the mentally ill and those with addictions should be modestly housed and properly taken care of.
For those who do not want to get off drugs and want to live on the streets , then they should be taken into a care facility where they can be treated for their mental illness as well as addictions.
There is such a place in Vancouver. I believe it is called the Red Fish. Many are there on their own free will.
Some are in there against their will. What they are finding is that those who were taken in against their own will ….a large percentage of them agree to be in the program after a one year trial period and are excited to have the chance to have their lives back.
I would like to see more places like that.
Just looking at the repurposed hotels , I’m sure the tiny homes will quickly look like crap in no time flat . Like the temporary classrooms they probably be still there 30 years from now
The legal system we have inherited has had vagrancy laws in force for the last 680 years, the most recent iteration dates from 1824 and has the mellifluous and resonant title “An Act for the Punishment of Idle and Disorderly Persons, and Rogues and Vagabonds”.
Back to the future.
Ridiculous. It’s not society’s job to be an enabler for drug addicts by finding them housing close to their drug dealer.
Let them live on the outskirts of the city and take a bus downtown if they like to hangout there. It’s called “commuting.”
At least do we agree that tent cities like Pandora aren’t a ”workable solution”? And could you tell me what under what conditions you would say that we can remove the tent city ? Or is a tent city another problem that you just want everyone to sit back and take a take a “time will tell” approach.
I agree with VIc RE analyst. (“Most of them are downtown because that’s where the action is.”
They definitely prefer being close to the network they have. (The Drug dealers, pawn shops or those who pray on them and will give them money for any items they have “found”)
Some do not want to be in a place like “Our Place” because they have been raped there.
Some often reject any rules and get kicked out.
Mental illness and drug addiction is complicated. (The victims of drug addiction and mental illness learn all sorts of survival tools. They will say that they have a sore back and so sitting in a hot tub at the Y would benefit them. The system might arrange for them to be get taken there once or twice a week, but the real reason they are there is so that they can drink the hand sanitizer. That’s just one simple example to illustrate that it is complicated and how things can go sideways quickly.
But this is not the right place to get into this properly.
Setting up “Tiny Homes” is not the answer. It sounds good on the surface but it is not the answer.
A tent city is legal if no homes are available, so police can’t enforce laws and remove it.
Making tiny homes available makes it legal for tent cities to be dismantled.
Of course homeless/drug addicts like being downtown. They just won’t be able to live in a tent on the street. Either they come up with a different place to live on their own, or they live in the tiny home and bus themselves downtown mornings and return home at night.
Patrick…you would do better if you listened to people carefully. For one thing, I was not talking about you.
Anyway. Time will tell.
I stick with my opinion.
Tiny homes will prove to be an unworkable solution for so many reasons.
Let’s agree to have opposite viewpoints and that’s fine with me.
Let’s assume they interviewed a homeless person on Pandora, and they said “no. I won’t move to a tiny home. I want to keep living in a tent here on Pandora.”. Would this change your opinion? Should there be a right for anyone to permanently live in a tent on the street, even if free housing is available for them? I say “no”, what say you?
This is the point: If there are no homes available, under BC law police can’t dismantle the tent cities. If there are tiny homes available, the homeless might not want to go there, but they can’t live on the street legally, and the police can legally enforce the laws and dismantle the tent city – and “tent city problem solved”.
Luckily, if you wish to see what the “tiny homes” and their environs will look like after one year we have a living example right in our town. Take an (appropriately-paced) short walk on Spruce Ave between Nanaimo and Redbrick and you can see all the gratitude for our largesse.
Cynical? Perhaps. Please provide a contrary example.
What kind of idiot actually believes that homeless people/drug addicts only set up shop downtown because they can’t set up else where? Most of them are downtown because that’s where the action is.
What I didn’t see in the article is what the homeless think of living in re-purposed shipping container at the outer limits of the city.
-That would have been good reporting.
Why would you make an unfounded assumption that I don’t? “have a handle on what the [homelessness] problem are?” Your background is an artist yet I don’t make a rude assumption that you don’t know what you’re talking about.
You may be talking to somebody with 30+ years full-time working experience in medicine. And a person like that might have a handle on both homelessness and the underlying mental and addiction problems that go along with it.
Anyway, in this discussion I would hope that we both have an open mind, and you are not just here dishing out “lessons to learn”.
If you read my post, I am clearly identifying “tent cities”as the problem we are solving. Finding them a home solves a problem (ends “homelessness” ) but of course doesn’t end the underlying problems. And it ends tent cities- which is a good and humane thing .
I have never suggested that finding housing will solve the underlying mental health or drug problems, facing many homeless people, because it won’t. Finding them a home, whether it be a tiny home or one of your hoped-for Christchurch cathedral site homes that you are expecting to see will also not solve these mental/drug problems
Finding homeless people a tiny home will, however, mean that they are not homeless people. And there are no more disgraceful inhumane tent cities. And then we we have solved the homeless part of the problem and can focus on treating the underlying chronic mental and addiction problems in the population, regardless if they live in tiny, mobile, condos or houses.
https://househuntvictoria.ca/2023/11/14/playing-with-affordability/#comment-107673
They need to be incarcerated for a minimum of 2 years.
Sorry Patrick but we will likely never agree on this issue.
I’m not sure what your background is so it is difficult to know what to say.
I think the best lesson for anyone who does not have a handle on what the problems are will be to watch what happens in the coming years.
I see so many red flags.
I do think that we would both agree that it will take more than just housing to find solutions to this issue.
Currently there is practically no help either for the victims or the family.
One top BC official even suggested that the problem is with the families and that they just don’t love these people enough and that’s why they are on the street. (A great way to push the problem onto the families and absolve the government of responsibility.)
That’s just how out of touch the government is.
Time will reveal how these Tiny Homes will work or fail. I hope we have a lot of parking lots because the problem is huge.
I also hope they provide security and mental support for these people.
Federal government is announcing additional measures on housing Tuesday, including a prohibition on deducting any expenses from STR income if the unit is not legal. That will have a big impact in other provinces. https://torontostar.pressreader.com/article/281500755987512
Yes. #4 sounds right. Upzoning laws have started to appear in BC and I don’t think they had any measurable effect on SFH property prices. But we are losing SFH as a % of total dwellings, so this likely leads to higher SFH property values over time, assuming a “detached home with a yard and picket fence” is still the desired home for 70% + of Canadians.
Deryk,
I disagree with you describing the tiny homes as a “band-aid”, at least to the tent city on Pandora. The solution is to outlaw and dismantle the tent city, as long as there are homes to move the people to. That’s not just me saying it, this is BC court decisions according to laws, where judges say that people’s right to live in a tent in public spaces exists, but only when there is no alternative available to them. Tiny homes provides this alternative. So as long as we have a supply of tiny homes (or better) available, the cities can dismantle tent cities on an ongoing basis, which isn’t a “band-aid”
I describe the tiny homes as a temporary solution, but it is much better than nothing, which is all we are offering now. Of course is it aspirational that we should build every homeless person a better home than that. Be realistic, do you think we have the ability to build a beautiful home for every homeless person, when working Canadians can’t afford starter homes?
I hear you that you’re “not a fan of tiny homes”. But we shouldn’t let “perfect” become the enemy of “good enough”. In this case, your “think bigger” solution is “perfect”, but multi-year, complex, costly and opposed by some groups. “Good enough” is instant and affordable (one month) and means a heated, insulated tiny home. Don’t compare a tiny home with “perfect”, compare it a tent outdoors on Pandora. Much of your message describes the problems that occur when we “think bigger”, and this translates to any years of struggles with nothin achieved.
In the meantime, at $21,500 cad per housing unit, and a time of one month for installation, these modular tiny homes are an instant, legal solution. So instead of 50+ people living in tents on Pandora, they are living in these homes. And the tent city ends. This is what’s happening in Ontario, and I hope that it comes to Pandora as well.
“Patriotz true that, we are probaly entering a period of dead money in real estate , so many will start looking for returns elsewhere and probably still using leverage . But it sure was a fun ride and always hate to see it end”.
It was one hell of a bull run and its all tax free.
Gen x bought in 1998.
Sorry….but I’m not a big fan of “Tiny Homes”.
One can take away a parking lot and place a small number of these tiny homes or you can build several hundred homes. (As they will be doing at Christ Church in Victoria.)
If you talk to the people who are looking at this issue, and I’ve been given tours and lectures on this, you will hear them say, “Money is not the problem” They can get access to the money to build. What they can’t get is the land…because people will say….it’s a good idea, but it’s not a good idea in this neighborhood.
That’s one of the main problems.
The same thing happened with Woodwynn farms in central Saanich.
There were “private” , wealthy funders who wanted to do something for the street people, who were willing to fund multiple housing units (With the concept of Building into the slope of the land so that farming could even take place on the roof area as well)
Woodwynn had a policy of no drugs allowed or you were out of the program, immediately.
It was very much based on the same idea as one of the worlds most successful treatment centers, San Patrianos in Italy)
I volunteered there for a number of years and witnessed amazing changes in the people going through the program. It was not for everyone of course because drug addiction is a tough nut to crack but overall, we saw it was working. The participants worked on the farm fields all day farming and they could stay in the program as long as they needed. (They basically worked for their meals, growing their own food for the most part.
However, because of the continual pushback from the surrounding community, who did not want “these kinds of people” in their neighborhood, the funders pulled out because there was no point in continuing if the program could not be put into full gear and the government would not allow housing for the farmers/participants to be built on the land.
The BC government bought the 200 Acre site. (Zoned ALR).
The 200acre site was then given back to the first nations as part of reconciliation. (Treaties had not been signed etc)
It will likely be taken out of the ALR and pulled into the first nations reserve land which they have the right to apply for. The band will then do what they want with the 200 acres because it is their right to do so. I believe that the land is in good hands.
My point is that Nimbyism is a real thing and I would find it hard to believe that Tiny Homes will be the answer.
We need to think bigger in terms of a plan to solve the street issue. There is too much money being spent on Band aide solutions.
Do note that the article is talking about 30 year term, not 30 year amortization. Interesting bur irrelevant to Canada.
https://jaycoupar.royallepage.ca/details.php?mls=547&mlsid=R2832814
Not unusual. Not cherry picking. Small lot. Small house. East side of Vancouver.
$1.8 million
By the way… a great article in the NYT about 30 yr mortgage trap.
https://www.nytimes.com/2023/11/19/business/economy/30-year-mortgage.html
Just curious, do the new 36 ft height limit for MM in Victoria mean that you could build a single family home to that height?
So will the new provincial rules:
(1) Lop hundreds of thousands of dollars off SFH property values due to the awfulness of being nearby a fourplex? ( Barrister)
(2) increase SFH property values so much that the taxes will be insane? (WhateverIwanttocallmyself)
(3) Decrease SFH property values so much that people will be suing for “diminution of value”? (Also Whatever …..)
(4) Cause a small upward blip in detached SFH value superimposed on the long run trend of worsening SFH affordability? (My attempted paraphrase of Leo)
I pick #4.
This may be of assistance to you Patriotz.
HIGHEST AND BEST USE:
The reasonably probable use of Real Property, that is physically possible, legally permissible, financially feasible, and maximally productive, and that results in the highest value.
-If you have a single family zoned land but the neighborhood is being rezoned multi-family then the market value would be the higher of the two.
If you owned a piece of land that was zoned single family but the neighbors on both sides of you had their property rezoned to multi-family would you sell your land for the price of a single family lot or the price of a multi-family lot? I hope that you would choose the higher of the two.
The assessment authority estimates market value at its Highest and Best Use.
And before everyone and their dog goes off to google. Yes there are exceptions set by legislation such as land in the Agricultural Land Reserve.
Was waiting around for the overpriced lawyers to do another turn.
BC’s Assessment Act says market value. That may or may not be what you mean, but that’s what it says.
This seems like an actual good example of government solving homelessness crisis by building tiny homes with facilities. Here’s how some Canadian cities are solving their problem of tent cities, by removing them and providing affordable tiny homes to the homeless.
The process is to build this temp housing (within a month) and then remove the tent city by providing this housing . Cities like Peterborough are solving some of their homelessness problems by finding a vacant parking lot in outskirts of the city, and constructing 50 tiny homes and a community center with kitchen/tables/seats/washrooms. Tiny home is 107 sq. Feet and has electricity/heat/ A/C but no plumbing. All made from shipping containers. Cost is $21,000 CAD per tiny unit made in Waterloo Ontario. Seems like they can put these together from scratch in a month. Of course total costs will be higher than $21,000 per resident but this is an example about government actually solving a homeless problem by building shelters for people with facilities on-site. And if there’s a transit stop nearby, residents can travel to/from the city as needed.
https://www.thepeterboroughexaminer.com/news/peterborough-region/new-homes-for-peterborough-s-homeless-to-be-built-from-steel-shipping-containers/article_5b84f13e-b0fa-568b-b8d3-b2918e68faef.html
“The 50 modular cabins for homeless people that are about to be installed in the municipal Rehill parking lot off Wolfe Street are going to be made from steel shipping containers.
Each cabin will cost the city $21,150, said city spokesperson Brendan Wedley in an email on Wednesday.
For 50 cabins, that adds up to $1,057,500 (not including a security cabin, washroom cabin or other costs).
Site preparation began Monday at the parking lot when a general contractor began ripping up sections of asphalt.
Soon it’s expected that flatbed trucks will be delivering the cabins, fully built and ready to be placed on site by a crane.
The cabins are built in Cambridge, Ont. by a company called Now Housing.
Delivery is expected shortly, senior vice-president Brian Munro said in a phone interview Tuesday, though he didn’t have a date.
Although some buildings made from shipping containers are designed to be industrial-looking, Munro said the Peterborough cabins will appear more like conventional tiny homes.”
———- //////
Here’s how the Waterloo company builds, transports and installs the tiny homes and community center with facilities.
https://www.youtube.com/watch?v=yvatxus-6qg’’
Our governments seem willing to change zoning and regulations instantly to deal with the housing crisis, so I hope they are willing to make any regulatory changes needed to allow this solution to be used to remove our tent cities like Pandora in short order. And give the homeless a heated, secure tiny home with access to facilities and (hopefully) near transit).
OK, this 50 unit tiny home community isn’t “the Uplands,” but it sure beats a haphazard insecure tent city on Pandora!
Here’s the article Jimmy’s referencing:
https://www.timescolonist.com/local-news/affordable-housing-component-no-longer-required-for-foul-bay-townhouse-development-7850202
Someone mentioned that OAS is not means tested, which is true. The full amount is not available to everyone, however. The number of years (after the age of 18) that your pink posterior has been parked within the Dominion is tallied. To get the full amount that number has to be 40 or more and if it is less than 40 the amount you will receive is reduced pro-rata.
Tax and housing experts are concerned that sweeping housing reforms proposed by the B.C. NDP, which would force higher density in single-family neighborhoods and around transit hubs, could leave homeowners and small businesses on the hook for inflated property taxes that are based on the “highest and best use” of the land.
The government’s small-scale multi-unit housing bill, which if passed will force municipalities to approve up to six units on a single-family lot, could result in such lots being taxed at the rate of a multi-unit townhouse.
If we want to build affordable housing it is necessary to address rising land values from up zoning. If we don’t then rising land values will likely defeat the province’s reforms as the higher land costs would make building multi-plex properties economically unfeasible.
But it depends on what the province is considering a multi-plex. Is it residential with permits for the suites or is multi-family with individually strata titled suites? There is a huge difference between the two. The first is rental housing the later is condos/town homes. Same building, same building costs but they sell for vastly different prices.
If the intention is rentals then these will be appealing to investors that are buying on the buildings income. If these buildings are four units or less then they fall under residential lending policies. Over five units then they are commercial loans that are more difficult and expensive to finance. Four units or less will have a larger pool of investors than five or more as almost everyone on this blog would potentially be able to qualify for a bank loan at residential interest rates for a four suite rental. Not so much for five or more suites. In my opinion you can kiss the idea of building a six-plex good-bye as there are not enough investors for these buildings in Victoria.
What a residential four-plex with four permits will likely effect are those investors that currently have say four individual condominiums. These four suite rental buildings will have lower expenses and a better rate of return than owning four condos. And the four suiter will be a lot less to purchase than four separate condos. That will take the pressure off condo prices for home ownership. Furthermore, a rental four suiter will not substantially increase land values. Unlike a condo complex with four separately titled condos which will increase land values due to up zoning from residential to multi-family.
It would be less than ideal to increase the supply of individual condos when so many are being built today. An increase in the supply of condos has the potential to slow down hi rise condominium construction and put other projects on hold.
Peter tough to do an apples to apples comparison today to the 80s . There is whole bunch more at play than just the price of a house . Canada itself has changed a bunch since then and that too plays in to the real estate market in not a positive way
Enjoy your welfare cheque…ummm OAS
It’s mostly folks taking things they just don’t need that are meant for people in need. Like the scummy guys in their leather jackets and gold chains I saw loading their trunks on their BMWs with boxes from the foodbank they were taking turns in line at.
I don’t have a good handle on the purpose of OAS but it seems like you could live in a house worth 2 million tax free equity that was bought forty years ago and you could have low income. If someone lives in a house worth 500k but has 1.5k in other assets but low enough income to qualify for OAS are they more scummy than the person with all their assets in one house? Doesn’t really make sense to me.
Probably not to be repeated, even in Calgary.
Your story is interesting to me, because we bought in Calgary in 1985, and while the economic picture by that time was vastly different, the scale of income/house price wasn’t, at least not for us. It was my first career job and our first house purchase. I was making $23k a year, and the house (half duplex) we bought was I think $48k, so still only about a double. Calgary was in the middle of a savage recession and foreclosures were rampant, especially since their laws allowed you to walk away without being personally on the hook. When we were looking, we didn’t even use a realtor at first, we just went to our bank and they said ok what area are you interested in, we told them, then they gave us their foreclosure list for that neighbourhood & said just drive around and pick half a dozen homes you’d like to see and our bank person will take you to look at them.
Most of the places we looked at had significant damage done by a departing homeowner who had lost everything. Like holes punched into the drywall. One had removed the fireplace, and I don’t mean a franklin stove, I mean he had dismantled the rock surround of the fireplace and left this gaping hole (we didn’t buy that place, but it was only $28k).
The mortgage rate was still 11.75 but as you say, the monthly payment was very manageable even on our very modest income.
A few years back, we were lucky enough to be living in West Vancouver. The place next door was lived in by the postman who used to deliver the mail in the neighbourhood – imagine, a single-family house in West Vancouver owned by the local postie. Different world to today.
The picture today is so vastly different in terms of pricing compared to incomes to make stories like this just sort of an interesting footnote, but the reality is, the goalposts have moved so far that a whole generation or two or three have been/are being left further and further behind, plus the whole time they have to put up with the frustration of older folks always telling them how tough they had it. It really is different now, and it only took this little short time to get here. And that’s with the other major change including now having two working spouses to support a lifestyle not as good (in terms of housing) as what you previously had with just one.
I don’t have the answers.
Nope, didn’t say that at all. Just saying it’s not a pension. However, I would suggest that someone with millions in assets who doesn’t declare a large income in retirement is a bit scummy for taking it a benefit meant for the vulnerable in society.
Yes I do, but for the most part now, those benefits are flowing to people factoring the benefits into their retirement planning and ensuring lower declarable incomes in retirement to receive a welfare benefit they do not need (see scummy comment above).
Umm..Really, please consult any dictionary to learn the meaning of the word “pension”.
Real world example from the ’80’s: Purchased at the absolute peak of a Calgary bubble in ’83. Price was $92,000, borrowed 10k as personal loan to fund the downpayment. Mortgage rate was 11.75%. Don’t recall the exact payment but household income was around $50k before tax. Even with that mortgage rate this was no stress at all because the purchase price was less than two times our very-modest salaries. There is no equivalent scale of income/house price available anywhere in Canada in the present day.
I don’t think affordability presently is anything as high as the peak of the 80s, and there is a huge different between 5.7% unemployment rate and 12-22% unemployment rate.
No, however Canadian government is not known to run an efficient or balance budget.
Less tax leave more money in the economy so that the economy grow.
Some US states have no or little sale tax, and low income tax, but high property tax, therefore it encourages the economy to flow, instead of encourage people to lock their money in real estate.
Money need to be invested in the economy, not real estate or precious metals.
Not long ago, many people on this board scoffed at anything that less than a SFH in James Bay, Fairfield, or Gordon Head. The reality is that inflation and perpetual population growth is going to be around for the foreseeable future, so housing is going to continue to go up and perhaps much quicker than salary.
Are you suggesting that taxes should not support the disabled elderly who cannot otherwise support themselves?
You see no value in providing the elderly with a minimum income?
Yes, that was a big topic in the 2010s, and then again as house prices (first maybe in Vancouver and then in Victoria) really started to get divorced more from that income growth. I remember endless discussion on some forum (maybe ozzie jurock, or maybe that victoria-based forum that existed then, not sure now) about how this divorce from income growth meant that house prices inexorably had to come back down.
And while I’m sure there is in fact some of that & some mean reversion under way, I don’t see some huge price adjustment being in the cards – as others have said, after this huge run-up, a 10% or so adjustment followed maybe by a couple of sideways years would hardly be a “collapse”. I realize all bets are off if inflation stays sticky, but it looks increasingly like we just had to move the “meal through the python” in terms of all the covid stimulus and in that sense indeed a transitory inflation effect. I think…
And also, sorry to say, but looking back at what the discussions were in the 2010s, I think in retrospect there was indeed an element of Victoria locals being late to understanding that their housing was going to increasingly move beyond normal income ranges to the extent it was going to become more influenced by the wealth effect from other parts of Canada, plus being commodified to an extent, and what that would mean for those who thought that a single-family house in Fairfield, say, should always remain in reach for an average income-earner here.
Yes. We did a 3-month house swap with a professor from Zurich (ETH) . He told us he would have a good pension (and the survivor’s pension is even better), but had to contribute in a lot.
To clarify that last post, when I say “unprecedented” I’m talking about recent history.
The last time affordability was this low was the 1980s, which is the closest situation in living memory to what we have now.
And I point out in a previous comment, Gen X were not buying homes in that period.
I recall these discussions in Vancouver in the early 2010s. People were sure that prices had risen so much that the housing market was unsustainable. However, much of this sentiment was based solely on house price appreciation, and didn’t take into account the rise in local incomes seen during this period. I later read this report from IMF researchers in 2019, who modelled Canadian housing prices as only slightly above fundamental trend predictions until 2014-2015 (in Vancouver), and other markets were exactly on trend until 2015.
That modelling took into account both rises in local incomes, reduced interest rates, and rental market dynamics. (See: Figure 1: https://www.imf.org/-/media/Files/Publications/WP/2019/wpiea2019248-print-pdf.ashx).
Certainly there was a trend to lower affordability prior to 2015 in Canada, but I would argue, and I suspect most here would agree (including yourself, Leo) that the repeated doubling of home prices in 2015 and then again in 2021 produced an unprecedented situation quite different from what came before.
Yes, the 1st Canada Pension Plan enhancement was phased in between 2019 and 2023; with the 2nd part coming between 2024 and 2025. It will grow to replace one third (33.33%) of the average work earnings vs one quarter (25%) before the changes. Of course, CPP contribution rates have been increased as well.
See: https://www.canada.ca/en/services/benefits/publicpensions/cpp/cpp-enhancement.html
That’s an alternative fact. Folks like to call those pensions because they don’t like the view that they are merely leeching off the hard work of their fellow citizens. If OAS and GIS are pensions, what would you say the percentages employee and employer contributions are? Would you describe those as either defined benefit or defined contribution? OAS and GIS are simply old person welfare in place mostly to buy votes. If you are looking for a different term other than welfare, Guaranteed Basic Income for elderly fits better, but they are in no ways pensions. They are 100% taxpayer funded entitlements in place the support the feeble, sick, lame or lazy when when they reach their twilight years.
“VicREanalyst November 17, 2023 11:39 am
Flex Fridays LMAO”
You posted quite a bit yesterday. Took the day off work did you?
They are in fact pensions. They are funded differently than CPP, but they are pensions.
Switzerland has mandatory, and expensive, workplace-based pensions. There’s no free lunch.
https://www.pensionfundsonline.co.uk/content/country-profiles/switzerland
The Canadian pensions suck. My friend in Switzerland just retired, I’m not sure what he gets for a company pension, I’ll check with him, but his entire pension is 6000 Swiss Francs. That’s $9000 Canadian. Yes it is much more expensive in Switzerland (we’re catching up), but that’s pretty healthy. I have no idea what he has for savings.
The OAS clawback doesn’t even start until $81,761 individual income. That’s well above the median income for employed people, never mind retirees. OAS is an unearned benefit so you could call it welfare, but it’s not limited to people in genuine need. Which leads us to…
GIS not OAS. GIS really does have a low income threshold.
This seems to be the prevailing view, but I’m not sure why. House prices increased ~50% during the pandemic, not because of a sudden improvement in economic fundamentals, but due to low interest rates and a FOMO frenzy.
Now that we have higher interest rates and less FOMO, it seems perfectly reasonable that prices could adjust significantly. As we’ve seen over the last few years, sentiment can change rapidly.
I don’t necessarily believe it will be that damaging to existing home-owners either.
Recent purchasers with small down-payments who are suddenly underwater, maybe.
But most places I’m looking at are on the market for (and are assessed at) 50%-100% more than the last sale price. If the seller takes a 25% haircut on their asking price, they’re still ahead, and in a sane world they’d be happy.
I wouldn’t say OAS is a welfare benefit. Most seniors qualify for that one as you need to have taxable income over $80k+ in retirement. Combined with tax splitting measures on pensions (and RIF’s for people over 65), I think the overwhelming majority of seniors get the full amount.
Only GIC is intended for low income earners.
Not sure? Average is currently 722 not 717 for new recipients so I guess it went up a bit. https://www.canada.ca/en/services/benefits/publicpensions/cpp/payment-amounts.html
That might be true in small towns that used to be cheap but it’s not true in any of the expensive cities like Vancouver, Toronto, or Victoria.
Nothing about the current run-up is unusual compared to the last two. And prices in 2008 look cheap now but back then we were having all the same conversations because prices had just doubled in just a few years
Didn’t it get beefed up a ton though? I think working people today will be able to expect a lot more
The average CPP payment is $717 a month in Canada. I was referring to employer pensions that ex teachers, police, or other unionized or public service employees may have and which are intended to replace incomes and may or may not be indexed to ex. 70% of the best 5 years. About 50% of Canadians have no employer pension plan.
If you have no employer pension then you’ll need to save more or work longer. For many Canadians their primary source of savings is their home. For seniors without employer pensions who did not work in higher paying jobs or who ex. got divorced or became ill and could not work at some point, it is likely that they will need to access home equity in retirement.
“categorizing people by a single measure, whether by generation, investment, gender, or race, and pitting them against each other is going to solve anything”
Well, it is intended to solve something. Out at the far end of the spectrum of the left, where the needle hovers over “approaching pure evil” this is THE strategy for our days. Having failed to gain power by the ballot box, revolution, and the murder of millions this, for them, is going to solve everything….
OAS and GIS are not pensions… Those are welfare benefits. People that do have pensions or have investments and annuities set will simply not qualify or have OAS/GIS clawed back on taxes. Remember the whiners that jumped on the CERB bandwagon and then were upset they didn’t qualify for OAS the following year because CERB made their incomes too high. CPP is a pension, but it’s not designed to be a single source life sustainment in retirement, that’s why it’s nice and easy to have these things called TFSAs and RRSPs (just for starters).
How is it you are not eligible for CPP, OAS, or GIS?
I will point out that we live in a democracy. People voted for this.
Millennials and Gen-Z predominantly voted for this.
Trevor, that really bugs you a lot.
Does having a real life include changing your name on an Internet forum and lying about it?
Patriotz true that, we are probaly entering a period of dead money in real estate , so many will start looking for returns elsewhere and probably still using leverage . But it sure was a fun ride and always hate to see it end
LMAO, you seriously just counted all my posts?? Buddy, you need to get a life for real and discover the world outside of the internet.
You mean was the only way yesterday. We’ve already seen bank and business failures due to excessive leverage in a rising rate environment, and there’s plenty more to come.
Were you a homeowner during the 1980s? Didn’t think so.
Let’s be honest here: unless you bought extremely late for Gen X, the current crisis did not exist when you were buying your house. The buildup to the current housing crisis didn’t start until 2014 (Vancouver), then 2015-16 (Toronto), then subsequently spreading to nearby cities to Van and TO, followed by the entire country in 2021-2022. With the true crunch of rising rates only hitting in the last 12 months.
Neither of these statements bodes well for this society. Housing equity should never have been allowed to be the piggy bank by which parents bestow a home on their kids, nor how retirees replace their pension savings.
This inherently links the well-being of many in society to the penury of their neighbours. Now we’re stuck pumping the country with newcomers just to keep the whole house of cards from falling down…
Scapegoating is unfair. Like, it is part of the definition.
No point in it but to maybe make the person doing the scapegoating feel superior.
I don’t think categorizing people by a single measure, whether by generation, investment, gender, or race, and pitting them against each other is going to solve anything. Did no-one take history?
Post count in this week’s thread
—- posts by VicRe: 16
—- posts by Patrick: 1 ( two including this one)
Rodger leveraging is the only way to make a buck today and anybody in the last 20 years who were hard at it came out swimmingly.
There is something called working for a living and saving for retirement. The RE investors acted like some kind of geniuses and were laughing at others. All they did in the last 20 years was borrow other people’s money at very low rates, leveraged it to the hilt, and acted like they were geniuses. Now that there is no cheap money, they cry as scapegoats and of unfairness. I didn’t see investors in dotcom bubble or subprime bubble cry of unfairness. When will they realize that RE investments have interest rate and regulatory risks, and that leverage amplifies those risks.
Defining a crash as say a 25% decline or more, I just don’t think it’s in the set of possible outcomes. Certainly supply side solutions won’t trigger it because they’re too slow-acting. I also don’t think cutting immigration targets in half would trigger it. Economic crash with high unemployement yes, but seems very unlikely.
My base case forecast hasn’t changed in a couple years: A long period of stagnation at +- 10% of current prices.
Yes
Of the 37 single family homes for sale in Gordon Head, six are vacant. Another three are being sold with tenants in-place.
Hillview and Sarita are estate sales and subject to probate. My opinion is that we are going to see a lot more estate sales coming to market as the heirs choose to sell rather than rent the houses.
Do Estates Sales have the same impact on the market as a listed house that is tenant occupied?
For an Estate, no home owner or tenant is being displaced to find another property. Their impact is the same as a newly built home by increasing home ownership or decreasing the vacancy rate if they were to be bought by an investor. So in this example two missing middle income homes are in their small way relieving some of the pressure on middle income families to find a home to buy or rent just as if a new home had been built except these homes are far less expensive to purchase.
Unlike a tenant occupied home that displaces the tenant who then has to find another rental lowering the vacancy rate which is a zero sum game.
This seems to be the emerging trend in the market. More Estate sales and more investors selling their properties.
I’m Gex X. I did have it harder than my parents for housing, but I don’t blame past generations, they are the same people as us but born into a different set of circumstances.
I think the failure to manage housing is like our failure to manage health care. When things change our system is slow to react (never mind be ahead of) and the federal/provincial jurisdictional issues (and municipal with housing) make it even slower. Maybe we would have done better with the advent of the internet and information availability – but I doubt it – although I guess we’ll see now because it is the millennials who will make decisions.
I do think that house appreciation has come at the cost of affordability, particularly for my children. My response was to plan for their housing myself and to “scrimp and save” for the past couple of decades to do so. Would I be happy to give up some of what I’ve saved for them in the form of taxes in exchange for government-funded true housing security/affordability for them and their generation? Yes I would, but I don’t believe that government will deliver on this and think I’m way more efficient and motivated to provide it.
As far as past generations relying on home equity, well, the stats show many are helping their children with housing and education using that equity – as I have done. They also show people did not take out “massive helocs” and “consume and consume”. For those that do have a HELOC, the average amount is 70k. I’m glad that homeowner equity will help with retirement because otherwise our social supports would collapse for those who do not have pensions.
Speaking of pensions, I do not have one. I also had to save for this. I don’t look at those who have publicly funded pensions and resent them for this even though the money comes partly from my tax dollars and they will have something I do not. I made the best choices I could and there is only ever the best deal of the day whether it comes to buying a house or taking a job…
Anyone support the idea of crowd-funding a room for Patrick and VicREanalyst so they can be alone together? I’m starting to feel like a voyeur.
There are 2 places for sale in Gordon head for under a million. One of them is $999,999.
Tomtom I’m guessing no one wants real estate when it’s not going up and all that demand was just pump . If you are a serious buyer right now you have a lot to choose from .
may be off topic – I noticed there are few decent starter/flipper/developer special homes in Golden Head are not moving, these asking prices are more than reasonable. Does that mean the current market is really bad or just Gordon Head is not hot anymore?
Pretty sure I reiterated multiple times on here I want another investment property in Maplewood. So not sure where the nicer house came from? May I suggest you spend some time teaching your niece or whomever how to ride a E bike properly than wasting your time googling trying to data mine.
*edit, Actually keep googling, I do love living rent free in your head LMAO, so cute with all the bolding fonts. How much time is this taking you? I love it. Nice edits on adding maplewood to your comments after you saw my response. LMAO, you sir are the definition of a sad and lonely man on the internet.
**edit, case closed. LMAO
You were quite specific, and loved to tell us all about your house in Gordon Head, bought ten years ago in 2013. And your dream of finding a place in Oak Bay or Cordova Bay (now downgraded to 2023 dreams of Maplewood) And you’ve been renting since 2011, I recall that well, as it is a peculiar tax inefficient strategy to rent when you also own, which I told you at the time. You’ve been missing out on no capital gains on principle home, while you’re needlessly paying after-tax rent and paying tax on rental income – Yes I remember you well.
Here’s from July 2019…
https://househuntvictoria.ca/2019/07/25/are-regulators-pulling-off-the-soft-landing/#comment-62189
https://househuntvictoria.ca/2019/07/25/are-regulators-pulling-off-the-soft-landing/#comment-62165
“ No Barrister, l mentioned this before, I have a gordon head house that bought I 2013 which I rent out. I in turn rent a condo downtown (I have grand fathered rent from 2011). I want to get into a nicer house and i think I can get around 800k for my current house so with that money I am in the market for something $1.3M, but for $1.3M I want something nice with water views in Oak Bay or Cordova bay. I can’t find any I like in that price range currently.”
“ I have rented a condo downtown since 2011, my landlord didn’t increase my rent until 2016. I did not move in the house because I work downtown and I go downtown lots on weekends for dinners and drinks, when factoring time, parking, gas, cabs it didn’t make any sense for me to live in the house. The house is 3 bedrooms up stairs with a suite down stairs and not reno’d, I don’t need the extra space, feel like mowing the lawn and would much rather live in a new modern condo than a 1970’s house.”
Anyway, some things never change. In July 2019 you wanted to buy to a nicer house, and you’re still here 4 years later with the same dream. Nothing wrong with that, no need to hide it.
Good points
LMAO, what is this “none-sense”?
The price of your primary residence doesn’t matter if everything else is cheap to affordable. Unfortunately, everything is expensive and unattainable to a lot of people. The value of your home does matter, to think otherwise is (I’ll let you fill in the blank).
idk, more people had a family doctor at 30M. Rent was more affordable at 30M. Purchasing a home was more affordable at 30M. The wait times for a ferry were shorter at 30M. There were fewer homeless camps at 30M.
@totoro – do you feel bad for the people who are going to depend on their completely unprecedented rise in home value to retire on? I don’t. Greedy people that have not bothered to save at all, consumed and consumed throughout their long lives (who we now have to pay for their healthcare and retirement programs for another 40 years), took out massive helocs, and didn’t plan for their retirement at all if their house was the only source of funds for themselves. No, I feel bad for the millenials and Gen X’ers who had nothingto do with creating this crisis, scraping and saving (or just not being able to at all), maybe just buying their first home in the last few years and now having to face insane mortgage re-ups and crazy rents.
I know, I know “They shouldn’t have bought, it was clear that housing was overvalued!” Okay, sure. But people will buy homes when they seem approachable. If we don’t fix ALL of the factors (investors, crappy government regulations/redtape, old people aging in place in massive house, immigrations etc.) nothing will happen. It will get worse.
If you’ve bought a house simply to live in, it doesn’t cost you anything. It’s still the same house.
Which area of the CRD is yours in, then?
Don’t know what that is but IMO Gordon Head is a horrible place to purchase a rental property.
You’re Ks112, and it’s in Gordon Head.
Who is arguing that there is one simple fact? Only the people blaming one contributory factor to price demand and supply issues. Scapegoating is based on displacement of blame and poor analysis which leads to poor solutions.
You should absolutely discount your home equity because the moment it is accessed without a sale an expense and liability is created as a result.
Has nothing to do with the fact that a big drop in house values is real when it comes to net worth (or perhaps overall net loss in your low net worth scenario – which is also vulnerable to interest rate changes re. cash flow) and consumer spending patterns.
It affects everyone who owns and some are depending on this income for retirement now or soon. I find it so false when people discount their home equity because they haven’t sold or they live in it. Try telling that to a renter.
Its simple supply and demand, and investors are part of the equation. Remove investors and people who use it solely as a store of value then you have less demand with more supply as investors sell and only end users buy. Not sure why anyone is arguing this simple fact?
RE is an illiquid asset that generates cashflow and also provides me and my family certain tax advantages, that is my investment thesis when it comes to RE. I don’t buy RE unless it is in a prime location and cashflows and as a result of this conservative investment style I haven’t accumulated as much “net worth” I other wise would have. So I take your point that other investors may have a different investment philosophy than myself and the drop in market value hurts them.
How are you evaluating the counterfactual?
Has my quality of life improved? Yes definitely. Would it be different if we had stayed at 30m? I don’t have the foggiest idea
No. You are pointing at one factor without any data and engaging in the blame game which is not going to solve things because there are many factors at play. It seems easier for a lot of people to scapegoat that it is to really understand and solve an issue. We’ve had all sorts of these – to date I can recall foreign buyers, money laundering, shadow flipping, short term rentals, poor regulation, lending practices, pandemic money… Each one has had its turn in the spotlight but as they’ve been addressed the problems have continued to worsen.
There are many people in Canada who will never ever own a home. They need a secure place to live. And most homeowners will need a place to rent until they become homeowners. This is not just about being able to afford to buy, it is about being able to afford to rent and be housing secure and those who can’t afford to buy are most vulnerable. It makes no sense for the private market to provide affordable rentals so they don’t because the private market needs to make a return on investment – only the non-profit/government sector can address this and they haven’t – for decades.
This means we really need rental housing. This shortage of rental housing makes owning even more desirable.
I do agree it is harder to get into the market than previously as it was harder for me to buy than for my parents. The snowball of appreciation has been worse for each generation.
I also agree that private market was incentivized to buy property by past rates of appreciation, lending policies, confidence in bricks and mortar, low interest rates and capital gains exemptions but, imo, this equation has changed now and I think secondary home ownership is going to take a backburner to GICs and other investments. If we now disincentivize the private market further from providing long-term rentals without building any more purpose built rentals we are making things a lot worse for renters.
There is also the effect of population growth plus construction costs escalating well beyond inflation rates and wages. The average cost to build a home in BC, excluding lot costs, utility connection fees, permits, etc, costs an average of $275-$450/ft². On average, a home build of 2100 ft² would be between $577,500 – $945,000. Add to this the fact that vast swathes of the desirable areas in BC were zoned single family housing and you can see why affordability has declined as you could only build an expensive home on an expensive lot.
This is why missing middle housing and zoning reforms are needed to bring down unit costs.
Basically, the conclusion of most of the research is that there are multiple factors at play and one of the biggest is restrictive zoning combined with escalating construction costs (in part caused by inefficient processes) and population growth.
I have an investment property in the CRD.
Peter, to be fair my comments were directed at the public forum for the neighbor to voice their concerns. That resolved a lot of the potential problems between neighbors. The elimination of public input will stir up the hostility between neighbors. All the neighbor may want is for the builder to move the proposed deck/balcony from being three feet away from their master bedroom window. A minor change in the plans. Until that change was made the city would not likely approve the building permit.
This happened in Uplands, the people refused to move the deck and it ended up in a law suit. Will they win? Depends on the judge. But it makes both parties lives more miserable. So how do you as a home owner resolve this? Depends on how much money you are willing to spend or more importantly make the other party spend. When the legal fees reaches $10,000 most people will come to their senses.
You want that builder to move the balcony, and they refuse then make them incur legal fees. My point which is often lost on Totoro was that without the public forum then we will likely see more litigation. Having a pending litigation registered against the title may now be the recourse. We may end up replacing the public forum with litigation.
We are becoming a more litigious nation and probably will be more so in the future.
And yet a bunch of investors have just put their investments on the market rather than rent them out to people that live here. The reason that people can’t afford to buy is because of these investors. There’s a reason that home ownership rates have declined, and it’s not because people have been making less in the past decade.
You have an investment property (a SFH) in Gordon Head, if I recall.
A question worth asking is why is our birth rates declining?
https://nationalpost.com/opinion/canadas-birth-rate-has-dropped-off-a-cliff-and-its-because-nobody-can-afford-housing
The piece is bias as you can tell from the title but still:
“As for why Canadians are abandoning child-rearing faster than ever, Statistics Canada has hinted that the skyrocketing cost of shelter probably has a lot to do with it. In a survey published last month, the agency found that more than a third of young Canadians were setting aside plans for a family due purely to financial reasons. Of Canadians in their 20s, Statistics Canada found that 38 per cent of them “did not believe they could afford to have a child in the next three years” — with about that same number (32 per cent) saying they doubted they’d be able to find “suitable housing” in which to care for a baby.”
Anecdotally I know many people who decided to have one less child then they wanted due to costs. So we bring in more immigration, house prices go up more, people can’t afford kids, birth rates drop so we need more immigration. I’m sure there is a lot more to our low birth rates than just housing costs, but costs in general are definitely a factor.
Anyway, i’ve benefited from immigration more than most seeing as my wife is an immigrant and current PR but we struggled incredibly finding daycare for our kids, housing for our family, and i’ve spent 6 hours with kids in the ER 3 times this year as walk ins are booked solid within 5 minutes of opening and sometimes you need to see someone in person.
I’d be all for immigration if we said ” we are bringing in 500K next year only if within that group we have enough doctors for not only that 500K but also X amount of people currently living in Canada, and ECEs, and trades people etc, but i haven’t seen anything to suggest thats happening and i’m definitely not seeing it on the ground.
Just my two cents – i know its a lot more complicated than just stopping immigration and there are two sides to the coin but there should be more conversation around it IMO.
If you are relying on your home equity to fund your retirement, as many Canadian homeowners are, if your home drops in value a lot this will negatively affect you. The consumer confidence that home equity brings or erodes is a real factor in spending patterns as well.
In terms of market value not affecting you one bit, you are mistaken. If the value of your property drops precipitously this is a loss of equity. It may not be crystallized until you sell, but it is real and in the interim it affects your net worth and ability to borrow. Also, you could be unlucky and ex. get sick, die, get divorced, or be subject to new taxes or regulations necessitating an urgent sale.
I don’t understand how this is a great cost to homeowners, the only one that would be affected would be the ones with a cashflow negative rental, cannot afford the mortgage on their primary residence or someone looking to heloc. It doesn’t affect me one bit what the market value on my rental is, I start to care when the cashflow starts going the other way.
Has the quality of life increased with the increase in population.
Overall I would say it has been positive. I enjoy the diversity of people in the city. Certainly has improved the variety of restaurants. Three decades ago, Victoria was whiter than snow. It was challenging for a visible minority to break into some of the mainstream occupations as Victoria was more of an old boys club.
At the moment we are experiencing growing pains but I am positive we will resolve them.
LMAO
Exactly. At some point people will just move their money elsewhere and there will be a period of worsening conditions for tenants. Maybe this gets addressed with more affordable purpose-built rentals, but I doubt this happens quickly. I expect that the remaining private landlords will be demonized even more as rental hardships escalate.
We don’t have a single crisis here – it is two different things. The first is the affordable rental housing crisis and the second is the affordable family suitable owned home shortage. If RE prices crashed this would address some of the issues, but at a great cost to homeowners and very politically undesirable.
Maybe massive investment in affordable purposes built rentals is coming, but I’m not sure if the supply will be enough and I’m not confident that it will be done in a cost effective manner and I’m not sure where that money is going to come from because there is no way government funded housing will match private market efficiency.
That is incoming in the next year, confirmed by insider contact.
The real problem for Marko is that if he invests in those companies instead of in RE he won’t be able to bitch and moan about government bureaucracy, red tape, hoops, Flex Fridays, and everything else tycoons (and aspiring-tycoons) absolutely love to whine about.
You have been saying this but there is no “we”. I don’t agree with your analysis.
We have a huge shortage of rentals. Many people who rent will never be able to afford to buy.
Those who do buy will be replaced by younger renters who are at a different stage in their lives or immigrants. Current interest rates make buying even further out of reach so there will be a net increase in rental demand and then likely corresponding increase in rental rates.
There is no magical conversion rate that turns the removal of a rental unit into “fewer renters” because one is now owned. The demand far exceeds the supply, the demand is growing, and the need is greater for those who cannot afford to buy than for those who can.
Ideally we would be all hands on deck for purpose built rentals. You cannot regulate your way out of a rental housing shortage, you actually need to build more units.
To address affordable housing one has to target land costs.
Increasing the density of a rental complex should be tied to placing caps on rents and vacancy rates. Otherwise most of the costs savings flow to the land owner that now wants a higher price for their land as the developer can now build more units. That would keep the land prices down as all of the developers would have the same rent caps and vacancy requirements.
Increase the interest rates for those that defer their property taxes. That would incentivize retirees to down size and open up more existing properties that are well suited for middle income families and increase the number of rentals.
More public/private developments where the municipality provides the land and the developer provides the building. That reduces the costs and the risk to the builder. Victoria has surplus land that could be redeveloped as leasehold condominiums and town homes.
Encourage developers to assemble properties in order to build comprehensive developments with a mixture of commercial, condo, and townhomes. In that way the side yard requirements would be eliminated which is wasted land space between the proposed multiplexes. Land space that could be repurposed as yard space. That would bring down the construction costs due to economy of scale. Allowing more ground floor commercial space for coffee shops, groceries, etc so that people don’t have to travel as far for their daily needs.
The city should also have pre-emptive rights. Identify those neighborhoods of low income households and when those properties identified by the city come up for sale the city should have first right of refusal registered on the title. By doing so the city would be able to assemble sites within neighborhoods for redevelopment.
Make changes to the Capital Gains Exemption on non primary residences.
Enforce anti-trust legislation on rental complexes. Landlords and REITs should not be allowed to game the rental market using software that allows them to collude on rents.
Review the Strata Act to allow for a complex to have blocks of four suites in a complex. That could be sold off to the general public under residential underwriting practices. That would make these a more attractive option for an investor rather than purchasing four individual condos. For Capital Gains purposes the four suites would be counted as one property as it is under one Title. The goal being to shift the investor to purchasing purpose built rentals rather than competing against potential home owners.
That should be a start.
Thanks for the tip, Marko. We’ve all been wondering what to do with our spare million.
Long term I definitively want to move more from real estate investments into equities for future capital. At this point who knows what the government does next, tenancy laws just keep leaning only in one direction which increases risk of being a landlord, then as you said you end up being the “greedy landlord.”
Versus just buy $1 million worth of Embrdige, Telus, CND Bank, and that’s 5k per month in dividends doing literally nothing, just a straight deposit into your account and you can be anywhere in the world. No one would call you greedy, etc.
So?
20 million at 1% growth is quite different than 38 million at 1% growth, and so on.
BTW, has overall quality of life for Canadians improved with the rise from, say, 30M to 38M?
+1 well said. The government is doing an excellent job of pitting one group of people (renters) against another (greedy landlords) to take the focus away from government policies that created this problem.
We’ve been through this before. Landlords getting out of the business means more owner-occupiers and fewer renters.
In any case, I keep reading that % of investor purchasers is at an all time high, so I don’t see why they need any incentives.
Revamp immigration and not necessarily less immigration but shift the focus to skilled immigrants that can build housing, not university educated immigrants that take desk jobs and than create pressure on housing via demand. In Zagreb construction sites are packed with workers from Nepal and Bangladesh and I am sure they would much rather be working a construction site in Canada but they can’t meet the requirements to get in.
My two Croatian friends in Victoria that don’t have permanent residence papers both work in construction as highly skilled tradespeople but the problem is the “point system” heavily favors university degrees plus a very high level of English. They have been here many years on work visas and both are close to pulling the trigger and going back to Croatia due to frustration with immigration.
My Croatian recent immigrant friends with university degrees in Victoria all have their permanent residencies……government jobs (municipal/provincial). Just in the last 24 months I’ve helped many into townhomes and condos into the Westshore. Before Covid I helped a number into SFHs on the Westshore.
I just don’t see how importing educated immigrants and giving them government jobs and an ever expanding government helps housing.
No, as long as you actually live there. And don’t claim CCA of course.
We are very good at growing government much faster than the population growth so we do get something done.
Sort of. If there is no reasonable chance of success then a lawyer is not going to file for it due to the fact it is an abuse of process, and if you self-represent yourself you’ll lose (most likely by summary judgement) and have to pay the costs of the other party as a frivolous and vexatious litigant.
We may see this. Even though the current case law does not support this, what has occurred seems unfair to me. There ought to have been a grandfathering of those rights imo and judges may be sympathetic to this and look for a way to support these property rights because our property system needs public confidence that that goal posts won’t be moved. STRs that were not legal are a very different story.
I also think government needs to, in general, consider incentivizing and supporting private landlords providing long-term rentals given the change in the housing market and policies. It is quite demoralizing to be demonized and targeted for being a landlord when you are providing a service that is needed and you are doing it more efficiently than government can or will do.
Until we have enough purpose-built rentals, landlords exiting the market is going to create more hardship for tenants and we simply don’t have enough purpose-built rentals. I suspect many people who own and rent out suites/houses are now looking to invest elsewhere based on some of what I would consider unfair targeting and scapegoating going on at the provincial and federal level – and on internet forums.
No doubt tenants are in a hard place, but it is not “greedy landlords” that are causing this. In my view the housing crises is caused by a lack of government response to the housing situation until we passed the crisis point. At this point it should be all hands on deck to provide more housing and until there are enough purpose built rentals, which might not be for a very long time, the private rental market needs to be part of the solution and not the enemy.
Would renting out rooms in your primary residence jeopardize your capital gains exemption? On million dollar properties, it’s just not worth the aggravation.
Yes, but there could be an incentive for renting more than one room. It is the fastest and cheapest way to house people as nothing needs to be built but in many municipalities you cannot have more than two unrelated roommates. The new zoning changes allow four units on one lot but don’t allow a person to have three paying roommates if they have a four bedroom house.
Likely to be tax free income just under the current tax regime, given pro-rated deductions for interest, taxes, etc. For those people who really need the money anyway, and those who don’t aren’t likely to want to take in boarders.
No-one can stop you from suing, but you won’t win if the place built next door to you was within permitted use. Totoro is correct. There is no general right to recover for ‘diminution of value’ from a permitted use or change in legislation unless it falls into a very few specific circumstances like expropriation or the very narrow situation linked by someone below from the Supreme Court.
We’ll probably get a chance to see further clarification in this regard if the airbnb owners go down this road in terms of what’s happened to them, but it won’t be a winner & won’t move the needle in my view.
We could, but that would be a radical departure from our entire history. Even in slow periods we were growing at 1%.
Also the US didn’t get to 350 million people by growing at 0.1%/year. Clearly growth is not the problem behind our garbage productivity. A big part of it is probably our inability to get anything done, from housing to infrastructure, to anything else.
Affordable purpose built rentals for lower income families should be prioritized imo. This is the sector that has the hardest time making ends
meet due to inflation and housing costs.
I’m concerned that the cost of building and financing is too high right now to see a lot of movement despite zoning changes because we are dealing with built out communities that require deconstruction to reconstruct and there is no master plan/economies of scale. It would be helpful to understand the economics as a home owner being encouraged to add a suite or laneway house in the current market. Has the government done a business case for deconstruct/reconstruct, suites or laneway homes for developers and home owners?
I don’t think the numbers work from where I stand and this 40k for putting a suite forgivable loan program seems silly. Ex. you have to rent a two bed suite for five years under market by 1300 a month to a non-family member. So you lose 78k of rental income – much of which would have been tax deductible against loan interest, and can’t have your adult child rent from you at a below market rate. Plus you only get 8k a year for five years after completion upon proof of under market arms length rental each year and have to finance the rest anyway. Seems like a money-losing proposition and not an incentive.
If government really wants to house people quickly I wonder if a significant tax deduction/incentive for increased occupancy of existing homes ie. room rentals/house sharing – the kind of deduction that results in tax free income – would be more effective. In addition, programs geared towards helping family members rather than requiring arms length people to live in your suite at below market would be much more effective. Government should be acting on the motivation of caring for family rather than disincentivizing it.
We definitely need immigration to get to 1% or 1.5%, but current levels we are well above that (I know this is largely non-permanent resident growth)
Or, we could aim for 0.1% population growth and try to improve our per capita productivity, which is now far behind that of the US.
As rush4life correctly points out, it would help the housing situation immensely.
https://financialpost.com/news/canada-has-productivity-problem
Apparently Canada’s natural growth rate is just 2.42 persons per thousand/year. You’re going to need current levels of immigration to get into the 1-1.5%/year range.
If you want quick results you could reduce non-permanent residents, e.g. TFW and students, but expect a lot of pushback from business and educational institutions.
That involves the feds pretty much admitting they messed up the whole immigration initiative (which they did). They are doubling down by not touching that issue while looking for resolution via other means.
P.S. Insider contacts are saying changes to capital gains taxes on rental properties being discussed further and gaining steam at the fed level.
There’s pros and cons to reducing immigration. Our social programs were designed when working age people outnumbered retirees substantially (it got close to peaking at 6 to 1, and slowly drifted 3 to 1 over the past 50 years). It’s still going down even with immigration. Its important because the average retiree pays less tax than when they worked but consume more government benefits. It’s why the Harper Government started the increased immigration and the Trudeau government kept growing it. Otherwise there’s not enough taxpayers keep those programs afloat.
The second issue is that our workforce continues to shrink as boomers continue to retire. There’s already many job shortages. Slow down that immigration and it gets even worse. This would give more leverage to existing workers to demand better pay/benefits. It would mostly lead to further infation as you create a wage spiral. Where you increase pay, then increase the price of your good/service to adjust, then workers need more pay increase to cover higher prices which means you meed to raise prices again. If you get into that feedback loop its not good.
Yes you would reduce pressure on real estate by lowering immigration, but it also exacerbates other problems if you do that.
I have no problem with that. No idea what the correct number should be, but there does seem to be a consensus emerging that it’s likely lower than current. I would like to see a defined target for growth rate. Say we want to grow at 1% or 1.5%/year long term. Set targets to hit that number on average.
You’re forgetting the Starbucks at Torquay Village and the Timmy’s on Shelbourne.
Reduce immigration. Immediate impact. Building takes years, meanwhile the Feds can flip a switch and have the same impact as building a thousand homes just by reducing immigration by ten thousand people only its instant.
I think quite enough has been done. Maybe just stop and take a breath?
Hey this is Calgary. I used to live just north of Prince’s Island Park (that’s a footbridge over the river) and last time I was there it was still mostly SFH in that neighbourhood, never mind up the hill.
But LRT is coming, which should provide impetus to densify up the hill along Centre St.
https://www.calgary.ca/green-line/green-line-map.html
Please produce evidence that it will. If anything all this upzoning will make detached houses more valuable, not less.
Leo absolutely worst advice ever or is it just total arrogance of being a development lobbyist?
I suggest you worry about more important things than whether other people may eventually live next to you
One should give no thought in the city of Victoria as to what happens to the value of your SFH when a 36 tall building goes up besides your house close to the lot lines. Even better still if you get one on each side. Dont worry, there is a small army of Leo,s out there that will give you top dollar. And that is a 36 ft flat roof building we are talking about just a few feet fom the lot line.
Advocating policy is one thing but pretending that this is not going to have a very real financial impact on a lot of people is another thing. I guess if you are going to be stupid enough to believe this BS then you get what you deserve.
“What does everyone here think should be done in the area of housing?”
Prioritizing commercial spaces and amenities with efforts to densify. It’s very walkable where I currently live in Europe. There is a mall that has a big box store but they recognize that even though it’s easily accessible by transit people won’t go there if it’s more than a 5 minute walk. So all the corner stores have retrieval points where the big box stores can send items to be picked up (on foot) by people that live close by. Near our place in Victoria there are a few places that could be retrieval points but none are. We don’t have those systems yet in Victoria and after living in Europe I can see now very car-centric we still are. I am ok with more density – provided that with densification comes increased amenities and more walkable neighbourhoods. But I think you covered that in your third point.
When I first read the article I thought ok that’s annoying, but maybe 6 floors in some podunk car-dependent suburb of Calgary is really not the best place. Then I looked it up and realized its a stone’s throw from downtown. Nevermind that site, the whole neighbourhood should be zoned for 6 stories.
Yeah good question. Active topic of discussion right now. Back in 2021 I basically just decided what should go on the homepage as the top actions, now the group is a lot bigger so they will have to decide what we want to do.
Some thoughts:
What does everyone here think should be done in the area of housing?
Zach, did you look at the drawing of the complex. It’s frigging huge. 65 condos that’s like a 40,000 square foot or more building
I wonder if the province will regret wading into the morass of property development approval.
All the sh!t that happens at city council meetings will now be at the Legislature too.
Keep at it, Leo!
Here’s a real quote, from a real person* in that article you cite that’s so Laughably contradictory I could almost cry tears myself:
*I admit it crossed my mind that the global news reporter who wrote that article didn’t actually interview real people but instead just asked chatGTP for “a quote from the most obnoxious NIMBY imaginable on their opinion of thus vote”.
But, alas, I think it’s a real person.
Totoro what does your link have anything to do with what I was talking about. Your link is about expropriation.
Totoro what do you mean there is no general right to sue. No one can make you give up the right to sue if you feel that you have suffered a loss. You also said a legal building? Legal according to the new zoning bylaws. Zoning bylaws that haven’t been determined yet where one set of provincial regulations are meant to fit most of the issues that come up when building a house. How would you like it if their living room would be facing into your master bedroom? Still a legal building but if you had a say in a public meeting, the builder would have had to adjust their plans and everyone would be happy.
You could speak with the builder. Bring them some cookies and ask them to change the plans – pretty please. But since it is a “legal building” -whatever that means, he just flips you the bird. If there had been a public forum you could have brought that to the attention of the city and the builder would have had to alter their plans. Now you don’t have that option.
So what are you going to do now?
So yes one can expect that lawyers are going to get a lot more business. Diminution in value (property) is a measure of the loss of use of property that has not been physically injured but that is less marketable because of the presence of a known defect.
I believe Marko mentioned as well just make sure you’re next to a new house, or next to a heritage house. Both unlikely to be torn down
For the rest of the province, given there will be no more single family zoning, I suggest you worry about more important things than whether other people may eventually live next to you
One of those small neighborhood grocery stores I believe.
Leo, what was there prior to the current townhouse complex (with Township Coffee below) at the corner of Tyndall and San Juan?
The pre-approved designs may be adopted by municipalities. I would not celebrate the bureaucracy reductions at city hall just yet.
Total jibber jabber.
There is no general right to sue a neighbour for loss of a view, privacy, light or “diminishment of value” because they build a legal structure next to you.
There is an action for constructive taking. This is when zoning is changed and all reasonable use of the property is lost even though the owner still has legal title. Hardly the case when your neighbour builds a fourplex, or even when the province removes your legal STR zoning.
https://www.stikeman.com/en-ca/kh/real-estate-municipal/the-supreme-court-of-canada-clarifies-the-law-on-constructive-takings
…
I have 4 townhouses replacing a duplex beside me. Because the duplex is pretty dumpy and the townhouses going in look modern, I expect the values to go up as long as potential buyers don’t think my property is without privacy. I imagine greater density increases land values but perhaps that’s correlation and not causation.
As it is now you may attend a public meeting and give your reasons why the proposed building will have a negative impact on your property. If there are no public meetings then your only recourse is to sue for damages.
For example, if the proposed building is so large that it puts your back yard forever in the shade then you have a loss of enjoyment and privacy. Lots of law suits today even with the current zoning when someone builds a deck too close to the property line or builds an outbuilding that obstructs someone’s views. We would just be adding to the burden of the courts to make the decisions that are now resolved through a public meeting.
In high end areas the effect of having a laneway house next door reduces value by about 5%. No effect in lower value areas.
https://news.ubc.ca/2021/11/18/laneway-homes-decreases-neighbouring-property-values-affluent-areas-ubc-study/
Barrister, A 4 plex is still pretty low density so I myself wouldn’t be too bothered by it . I really don’t think it would impact house prices negatively imo . I would just move if I don’t like my new neighbors
I’m honoured!
Maybe – but lots of hurdles remain
Hundreds provincewide doesn’t exactly sound scary even if you accept the premise that these 4 and 6-plexes are scary neighbourhood killing monsters.
Caveat, since you are suggesting it wont make any difference you go spend hours doing the research and then I will simply say your research is wrong, invalid or misinterpreted.
Congratulations for being the first person I really felt it necessary to block.
Great you shouldn’t have any trouble providing us a few examples. Make sure that the adjacent house is zoned for the same type of building as the one supposedly causing the drop in value as that will be the case with the new legislation
#1 – Zoning Bylaws are most definitely not going away. Your neighbour still can’t start an artisanal oil refinery or a scrapyard unless that is a permitted use
#2 – Building something totally legal on adjacent property doesn’t give you a legal claim just because you don’t like it
Caveat: simply look at the valuation of a house beside a four or three story apartment and a similar house in a stable SFH area a few blocks away. This is not rocket science.
Barrister – do you have any evidence that this will actually cause a drop in value? You are suggesting an adjacent multiplex might cause a typical Fairfield house to drop 10-20 in value. Colour me very skeptical unless you have some evidence to back that up.
Hey Leo it seems the Province has hit many of the items that housing advocates have been asking for: vacancy tax, spec tax, foreign tax, blanket rezoning for multi family, building up corridors, preapproved builds, STR regulation and removing condo bylaws… What’s left in your mind? I’d love to see a reduction in immigration but that’s not Provincial .. anything else homesforliving will be pushing for?
VicRE: Figure out candidates for tear down is a bit harder than it looks in this city. In places like South Oak Bay or the Uplands it is probably worth paying 400k a door.
I would guess that BC Housing is going to get involved in providing cheap financing for these units as well. I am pretty sure that the Povincial government is positive that hundreds of these will be built in pretty short order/
So VicRE, maybe one should be looking at fifteen acres in North Saanich or the Highlands is what you are suggesting?
Thurston, would you still not mind if you actually owned a house in Fairfield and it dropped two or three hundred thousand in value because a of multiplex was built beside you. If you dont care can you send me a check for a couple of hundred thousand since money is not important to you.
I’ve branched out to trolling Calgary NIMBYs https://x.com/LeoSpalteholz/status/1725169751058518425?s=20
Gonna be a real interesting challenge for the federal conservatives. People who can’t afford housing love their “fire gatekeepers” message, but the problem is many of their voters are the exact gatekeepers they want to fire and certainly don’t want to see an apartment in their neighbourhood. And of course the fringe part of their base thinks infill housing is a WEF conspiracy.
I am not ruling out the possibility of the conservatives becoming negatively polarized on building more housing and lean harder on immigration reductions before the 2025 election. Probably not the third rail it used to be.
Allowing multi-plexes to be built will cause adjacent home owners to file law suits. You may hate today’s zoning bylaws but they do cut down on the number of law suits for diminishment of value. Without them, your only recourse is to take the other parties to court.
Can you imagine having a property surrounded on three sides with homes having 30 feet high walls?
When on a walk about in Fairfield I c lots of 4 plexs and I wouldn’t be bothered having one next door and a lot of them look nice . I doubt they will be springing up a whole lot even with the changes that have been made
Just make sure you don’t have any POS tear-down candidates around the house you are planning to buy.
And then there’s Michael Jordan’s mansion in the Chicago area. First priced at $29 million in 2012, has not sold and is now priced at under $15,000,000. Apparently there are properties that are impossible to sell and eventually deteriorate.
Not all properties sell at market value. Most do, but not all.
MARKET VALUE:
The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and the seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.
There was a time when properties were being listed to create an auction environment. An auction is not a normal marketing process as opposed to a orderly liquidation process that we all are most familiar. Some buyers got caught up in the excitement and over paid. Other times a buyer is from a different city and is not knowledgeable about local prices or they just have to have that specific property at any price. Oak Bay waterfront for example.
Then there are owners’ of properties that are under duress and have to sell quickly. Don’t see many of these at this time as the market is still well balanced between buyers and sellers. But if you are on the outer Gulf Islands it is a different story. Then it may take several years to find a buyer even when the property is well priced relative to the sales data. There is a property on Pender Island that is just absolutely kick ass. There is not a property in all of Greater Victoria that comes close to it. Asking $19,800,000 which I would guess is less than current replacement costs. There will be a buyer for it, but it will likely have to be marketed for two years or more to find that buyer. If this property were forced to sell within a short marketing time, then is would likely get slaughtered.
-Maybe Taylor Swift is looking for a place.
It doesn’t happen often. Maybe one or two percent of contract purchases and slightly more often in pre-construction purchases. My opinion is that most of the pre-sale contracts in The Pearl were very optimistic and did not reflect market value at that time. The suites are still worth more today than they were in 2019, but other complexes had better rates of appreciation.
So build the same house over and over again and it will be cheaper , right. A lot of spec builders already recycle they’re house plans .
That said I expect a backlash once too many of these standard designs are built. There’s ten designs but it just a few of them end up being best then there may be a lot of very similar ones popping up.
Same thing happened in Kelowna and they ended their pre-approved design program. Now they are going for a system where any design goes into a folder and then future builders can pick one that’s been reviewed and approved, or do their own thing. Leads to more variety over time while still allowing some efficiencies as homes that get built repeatedly need less staff review time
It’s not really meant to empower the average home owner. It’s meant to allow small builders to put up infill housing easily. They know construction but they don’t know rezoning and they’re not sophisticated in design. The legalizing of infill housing takes away the rezoning problem, and the pre-approved designs take away the design problem (and will very likely speed up building permit approvals).
Plenty of small builders that currently only build single family will now be able to build multifamily housing
Totoro standard design won’t move the needle much on building costs and the average homeowner would have zero ability to get a project from start to finish
Wonder if one needs to consider the possible negative impact of four and six plexes being built near or adjacent to your SFH before buying it. In most cases it would have a negative impact on the Value of a SFH. ( and if Marko claims otherwise I think he is being disingenuous).
Leo S,
FYI
EXPOSURE TIME:
The estimated length of time the property interest being appraised would have been offered on the market before the hypothetical consummation of a sale at the estimated value on the Effective Date of the appraisal.
MARKETING TIME:
Marketing Time is an opinion on the amount of time it might take to sell a property interest in Real Estate at the concluded estimate of Market Value during the period immediately after the Effective Date of an appraisal. Marketing Time is forward-looking and predictive.
One is looking backward in time and the other is forward. Sounds confusing doesn’t it. It is for a lot of people. Sometimes it is easier to put them in sentences.
The median price paid for home in the neighborhood was $300,000 with an average exposure of 35 days-on-market (DoM).
The marketing time of the subject property is 30 to 90 days when competitively listed with similar properties.
Good idea.
I do wonder about how this plays out for existing homeowners at today’s interest rates. It would be helpful to have a case study with realistic cost estimates to demolish and rebuild four units.
And then to consider who would be motivated to undertake this. Most homeowners will not be motivated or have the ability to finance, oversee , or live through a SFH to fourplex would be my guess, so maybe more small developers will be looking to buy and redevelop.
I can only imagine how Oak Bay reacts to this! Mandatory minimal setbacks, maximum lot coverage and limited parking…. I think Oak Bay still requires covered parking for all homes even though it is used for storage usually.
Leo S, you and Patriotz are using market price differently.
Leo S, you wrote “market-priced listings” as a verb describing listings. Patriotz is using market price as a noun.
Market Price is most often equivalent to Contract Price or Purchase Price which is the accepted offer on a property. Market-priced listings are properties that have not sold and are priced competitively with similar properties.
Appraisers don’t estimate Market Price. They estimate Market Value which is a range in value. The misunderstanding happens as appraisers also provide their opinion of the property’s value as a point in time single amount. This is more to do with lending practices as lenders require an exact number to multiply by say 80 percent. Lenders don’t usually have the authority to select a number from a range.
It’s very common for the public and real estate agents to assume that Market Price is the same as Market Value, since most often they are the same amount.
When you make an offer on a property that is the Contract Price or Purchase Price. The lender hires the appraiser to determine if the offer lays within the Market Value range of similar sold properties. If the Purchase Price is within that range then it is considered to have sold at fair market. For properties in homogenous areas of housing that range could be 2 or 3 percent. For unusual properties with limited comparable sales and limited demand then that range could be say 10 percent.
Standardized provincial designs for infill housing coming https://news.gov.bc.ca/releases/2023HOUS0158-001798
I changed it so you can reduce income now.
Yeah I was thinking more about normal time on market. In a time when it’s already slow, and when we have a lump of Airbnb units being listed, getting proper market exposure in a reasonable time is going to be difficult.
I agree with you though and should have said this differently
That’s estimating the market price, which is what appraisers do. In the absence of factors impeding an open market (e.g. must sell in less than the normal time) or irrational behaviour by a buyer or seller (e.g. a buyer offering more than needed for the seller to accept, or a seller accepting less than high bid), the market price is what a property sells for. One willing buyer, one willing seller.
Those factors do occur but I would say the onus is on anyone claiming that a property did not sell at market to point them out.
But certainly not a “shortage” of buyers. There is never a shortage of buyers, just a shortage of sellers willing to accept a price someone is willing to pay.
I think 350 is overpriced for the tiny units at the Janion when one considers the monthly costs (property taxes, mortgage payment, insurance, condo fees).
https://ricochet.media/en/4010/in-victoria-former-airbnbs-are-flooding-the-market-but-no-one-is-buying
Well they are downtown and if you have a tight budget then there is not a lot else around.
“Assuming the price is not affected by undue stimulus.” Hilarious.
I send my clone to these open houses now.
Actually I didn’t go but will try to make the online one tomorrow.
Well whateveriwanttocallmyself can give you the more technical definition, but I’ve seen it defined as “The most probable price which a property should bring in a competitive and open market as of the specified date under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. ”
So it’s not always whatever the place sells for.
True I could make it -50% to 50% like the others. I would say it’s very unlikely for incomes to decrease on a nominal basis. Looking at the data series since 1976, it doesn’t decrease very often even in real terms.
Yeah, no clear evidence so far that sellers have had to compromise a lot on price. Few sales, but the ones that are there are decent.
Good question.
Another Mermaid Warf unit sold today…..$918 a foot which isn’t a bad price imo. I thought the post-short term rental ban value would have dropped more.
https://ricochet.media/en/4010/in-victoria-former-airbnbs-are-flooding-the-market-but-no-one-is-buying
James, I brought this rental issue up about the bigger landlords ability to game the rental market several months back and the real estate agent on this blog muted me.
All I know is what BCA says about it : https://www.bcassessment.ca//Property/Info/QTAwMDBITjVWWA==
That seems cheap for April 2023, the realtor.ca posting has a Feb 2018 purchase price of $345
“Property Type Single Family” . Well I suppose a single family might live in such a place in China or something? Listing up for 47 days and it still says this.
https://realtor.ca/real-estate/26115974/423-409-swift-st-victoria-downtown
Is this representative of actual household income for perspective home buyers because I assume it includes retirees? Wondering what Marko is seeing on the ground.
Noticed this the other day, thought this was pretty funny “Motivated seller, they have purchased another property”. Weird that there was no attempt to cover up the obvious AirBNB signifiers (wine glasses, guest manual), maybe they just reused STR pics? though they did take care to skip the fold down bed photos.
The listings for it:
https://www.airbnb.ca/rooms/902410437447206518
https://www.booking.com/hotel/ca/the-splash.html
The owner has impeccable timing given they bought it for $350k on Apr 5, 2023. Their AirBNB listing still includes this note:
The chart really illustrates how any reasonable increases in income just cannot compensate for interest rates going up. Even if you buy a house with a suite the increase in income doesn’t make it affordable to the median income earners. Condos seem to be where first time buyers will be able to enter the market and maybe that is the sector that will have the biggest price drop?
And, speaking of the dollar, just got back from the states. Adding 40% to prices left us feeling underwhelmed about the trip.
Leo, there are two people in this photo that could be you. Is one of them you? 🙂
https://twitter.com/rwrandall/status/1724639256575136000
I like the calculator. It gave me pause for one second though when I noticed that household income can’t go down.
Does it not go down in a recession?
I don’t think so.
Very nice calculator Leo!!!
no, you’re good there.
As I’ve said, one of the major users of this is Greystar, who owns the University Heights build. This isn’t a foreign problem.
I had a really big bump in house insurance should I be expecting an equally big increase in car insurance?
Zach: Try converting your GDP to USD over the last ten years and the picture does not get better on a per capita basis. if you are feeling poorer it is because you are..
And in the news today.
RealPage, a Texas based company, sells software called YieldStar that recommends, apartment rent prices to its clients – landlords and property managers.
The DC attorney general is the latest to allege illegal collusion to set artificially high rents.
Saanich looks to expand Nellie McClung library and put 10 storeys of affordable housing on top
https://www.timescolonist.com/local-news/saanich-looks-to-expand-nellie-mcclung-library-and-put-10-storeys-of-affordable-housing-on-top-7832949
Sorry for putting on my pedantic hat, but by definition the market price is the price at which the number of willing buyers equals the number of willing sellers.
Is this one market-priced?
https://realtor.ca/real-estate/26115974/423-409-swift-st-victoria-downtown?utm_source=consumerapp&utm_medium=referral&utm_campaign=socialsharelisting
Great calculator – it really helps to visualize the current situation.
In the “best case” scenario for society, of mild mortgage correction and falling rates without major job losses (10% housing market correction, mortgage rates fall to <4%) you can just see the inkling of “affordability” returning to pre-pandemic peaks.
However, I don’t really see a modest housing market correction being paired with a large rate drop like that without job loss.
I think the one thing this calculator is missing is a lower end dial on incomes: what if incomes have fallen in a year?
That’s certainly possible, particularly given that real per capita GDP has stagnated for 5-6 years and has fallen over the past 12 months.
Really curious to see what happens with the Janion.
Today saw a listing at the brand new Pearl, $650k for 604 sf ($1070/sf). A fairly decent size for a single person that wants to be right in town.
Yesterday saw a Janion listing at $415k for 256sf ($1621/sf) for a building next door that was built 7 years ago.
Who’s paying that premium when it can’t legally be a short term rental?
Interesting chart.