Leaseholds
As shown in the last article, affordability continues to be extremely poor for any kind of ownership housing. In the past affordability has waxed and waned, but those are cycles measured in 10+ years, and things may get worse before they get better. When you need housing now or within a year, the affordability cycle (even if it holds going forward) is of little use. Meanwhile rents – though they may have stabilized – remain very expensive at around $2000/month for a 1 bedroom. That’s a third less than what you would pay to own a 1 bed condo, but still a lot.
Advertised 1 bedroom rents according to Zumper
A third option little discussed is buying a leasehold home. Unlike freehold or strata properties, you don’t actually own the title to the land, but instead are buying the remainder of the term of the lease. At the end of the lease it must be renegotiated with the land owner, which basically means all bets are off and you may well end up with nothing or just a small compensation for the depreciated value of the building. Though leaseholds can also rise in value, fundamentally you are consuming the lease over the years and should expect to gradually see the property depreciate as the number of years remaining shrinks. That might explain why they’re relatively rare in a country which lives and breathes appreciating homes.
But if ownership housing is too expensive, and rentals are too insecure, leaseholds could still be a useful option. They generally exist mostly in the form of apartments, a few townhouses, and then manufactured/single family homes primarily on First Nations land. If there’s enough years left on the lease (and usually there’s a few decades) and you just want a stable place to live rather than a lottery ticket, it might be an option. For apartments, leasehold properties are about half the price of condos (though they will tend to be older as well). At this year’s median price of $265,000, which is a 1 bed unit at 964 Heywood, total cost to own would be pretty close to the average rent, with more security of tenure. Financing is always a challenge with these (talk to a broker) and of course the risk of special assessments remains (buildings are often older), but it’s a roughly equivalent option if someone knows they want to stay long term.
On the detached side there’s a range of options as well, from the float homes in the harbour leased from the city (which are not as cheap as you may expect), to a mix of detached and manufactured homes primarily on Tsawout land near Saanichton Bay or Songhees land northwest of Esquimalt. These generally have a strata/pad fee of $500-$800/month but prices are again around half of what you would expect from an equivalent freehold / strata house (less when the lease terms are down the last couple decades). Essentially you are paying downtown condo prices for a detached home of around 1.5 to twice the size.
And though appreciation should be more limited, it’s not necessarily the case if leases extend far into the future. Many manufactured homes in central Saanich have more than doubled in value in the past decade as they were dragged up with the rest of the market. As the most affordable option in the region, they’ll likely also always find buyers even during downturns.
We’ve looked into those homes now for both sets of our aging parents looking into moving to Victoria. While we ended up going a different way, I think leaseholds can be a solid option when the drive to outright ownership isn’t as important anymore. Thoughts? Would any househunters here ever consider going lease instead of freehold?
Also the weekly numbers
| November 2023 |
Nov
2022
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 66 | 152 | 230 | 384 | |
| New Listings | 192 | 429 | 612 | 785 | |
| Active Listings | 2722 | 2743 | 2744 | 2111 | |
| Sales to New Listings | 34% | 35% | 38% | 49% | |
| Sales YoY Change | -5% | -3% | -3% | -41% | |
| New Lists YoY Change | +12% | +14% | +19% | +13% | |
| Inventory YoY Change | +25% | +25% | +28% | +138% | |
| Months of Inventory | 5.5 | ||||
Headline sales are similar to last year, though they are weaker when looking at just resales in the primary areas of Greater Victoria (core, westshore, peninsula). Sales are actually up by a third in the Malahat/Gulf Islands region and in reported new construction sales which I exclude from the charts below to reduce noise.
As I’ve mentioned before, sales are basically trundling around near the bottom of the historical range and aren’t likely to fall further. While we’ve had lower sales, that was during an acute shock (the Great Financial Crisis) and is unlikely to be repeated outside of one. Compared to the last 38 Novembers, if we end at 370 sales, that would be the 5th percentile of market activity for this time of year. It is real slow out there.
The bigger wildcard is new listings, and while short term rentals have been grabbing the headlines with a big increase in properties hitting the market, listing are up nearly across the board. There were an additional 139 new listings in the last 4 weeks compared to the same period a year ago, and only 35 of those are from the jump from short term rental buildings.
It’s a little unclear what is motivating the increase. Listings picked up around the time the short term rental regulations hit, but most of the increase is not in those buildings. Are sellers that relied on short term rentals in other types of homes also listing? Is this the stress of rising rates finally being seen in the form of forced sales? Or is it just noise, soon to die down again? Either way, it’s an unusual time to see any increases in listing activity when the market is usually in seasonal freefall. If sellers are motivated it’s going to be challenge to find buyers, and if you’re looking to buy it signals that you may find better conditions than usual in the fall.
@john i had a realtor do that. It was a bit complicated but we were selling and the buyer got this crazy home inspection – very high tech and expensive (for the time). Then of course used each little thing to try to knock off money (making more than the cost of the crazy inspection back). He was an investor from Vancouver and I knew it was a strategy and I was pissed. It was late in the deal so we agreed to a modest deduction. If I remember correctly he wanted 5 k off we said 1 k he said 3 k or I walk. I we said 1,500 – final offer (we were willing to walk away). Realtor really didn’t want to lose the deal at that point so bridged the gap with his commission. It was a great house – my favourite but we were leaving town. The demanded reduction was based on no record of original garage being on the plan (for a 70s house – total bs). Told my realtor we know it’s bs and furthermore that he won’t take the garage down so pound sand. Garage still there. It was tense. Not easy when you know a player is playing. Also our realtor was not trustworthy and I would not recommend him to anyone. Our realtor here in Victoria has a lot of integrity and him I would recommend without hesitation. Not all realtors are bad but some are snakes.
New post: https://househuntvictoria.ca/2023/11/27/land-lift/
Great there are deals happening out there. Brooke St looks like it sold for land value to me, but still 9% off the 2023 assessment of the land value. So, positive news just the same.
12 units on a 6000sqft lot in Minneapolis.
The 4 ground floor units are accessible.
This building is illegal in Canada due to our building code not allowing single stair above 2 floors. And of course secondarily because of zoning.
We actually have quite a few similar buildings to this in Victoria, but they have since been downzoned and can’t be rebuilt once they reach end of life.
Supply side reforms are about making things more affordable 5+ years from now (with escalating effect). They have nothing to do with affordability in the near term which is driven by other factors.
In a missing middle fourplex, the two ground floor units would be accessible. However to make sixplexes more viable, we need building code reforms. Our current 3 level townhouses are built that way because we don’t allow single stair buildings in Canada.
I’ve seen lots of up-down places in the Netherlands where it was retirees on the ground floor, and families on the upper. They actually properly sound proof though.
Hello All, great fan of this site and wealth of experience being shared.
I have a question, is there any real life example/s of transactions wherein realtor/s have offered to bridge gap on asking/offered price point to help transaction materialize by volunteering for reduction in their fees ?
If uncommon however worth exploring in today’s market then how much % sounds still valuing realtor/s effort – like 2% instead of 3% ?
Thanks
Hi Barrister: That sounds doable and nice. I’ll likely bring Elizabeth. It’s tough to find time though as our grandchild is the center of our universe. But let’s see what transpires for sure.
lots of rentals on Craigslist this close to the end of the month. Asking rents are still high but there are lots of listings left over from October. I suspect our vacancy rate has crept up a bit.
Maybe it’s time to tell your landlord to pound sand on the next rent increase?
Deryk, the house is decorated and if you are in town love to have you drop by for some hot chocolate. With some fortune this might be our last year here so I would to see you again.
I just want to make it clear that we do have a good agent that I would recommend to anyone.
As I’ve stated several times now, I do not use them all the time.
When we sell or buy a place that is for sale by owner, we do not use an agent.
When a property is not in Victoria we do not use that agent either.
When we have researched properties thoroughly by our self, we contact the agent we like and place an offer.
In the end you have to do your own “Due diligence” …… the buzzword in recent years .
We do that from day one.
You would not believe half the things we discover that the listing agent “forgot to mention” or simply overlooked.
James, a town house is not an ideal alternative for retirees as they prefer a home without stairs. Most are thinking towards their future when stairs may become difficult for them to manage.
Sales increased a bit from the previous week. Good chance we clear last year just barely but 50/50 if we hit 400 sales for the month or not.
Some good low ball offers are being accepted. Good to see some affordability coming back into the market and it had zilch with building a bunch more of homes
These are the missing middle (townhouses etc) that Leo has been advocating for.
Brooke Street is an example of how the marketplace solves the missing middle problem . The seller lived there since 1982 raised a family and eventually ended up living in the home by himself. Now he has moved on and what was a house that held one person will now be a family home for 5 or 6.
I’ve never seen the CMHC study that states we need another 5 million homes built but I wonder if CMHC took into account this shift in home ownership that will be escalating over the next two decades as households of one or two people that are ageing in-place transition to nursing homes or pass on.
I have started to speak with retirees. Most would like a home that is more manageable with less yard work, stairs, and near a hospital. But they just don’t seem to find another home that matches their needs so they defer their taxes and stay in their large homes. Homes that would suit a family of 5 as well as a basement suite for another family.
The higher interest rates have caused a change in the marketplace. Homes that were inherited were often kept by the children and rented. That seems to be changing as the number of Estate Sales is increasing as the children are now choosing to take the money rather than keep the house.
There are lots of missing middle homes in Victoria, they are just not up for sale -yet.
Police get paid the minute they are hired and enter into training. I’m not sure how long their training is, but it is also provided free of charge. Some have taken post secondary courses such as criminology, to help them in the selection process. Previous work experience also helps, such as security services or police cadets, where they are at least earning a living. It’s a long sacrifice to become a M.D., your life is on hold for around a decade. They also accumulate student loan debts. I don’t blame any of them to look for greener pastures after graduation. Medical doctors are also micromanaged by the system, I can’t provide exact examples, but I know they do not have the freedom to do whatever they feel is best for each patient. One example is the long wait times for orthopaedic surgery which causes undue suffering for those on a waiting list, sometimes for years.
Deals happening out there at a reduction: 1434 Brooke initially listed at 1.475 and assessed at 1.346 was reduced to 1.295 and just posted as pending at 1.11
Shouldn’t doctors be working for whatever we offer them as they go to school to help people
As I’ve said before if the GP salary was 500k/year and they didn’t have to run their own business/clinic all of sudden there would no shortage. Interesting how that works.
I think you are missing the context of my 30 second comment(s). If you are comfortable making verbal offers (and aren’t a tire kicker) why wouldn’t you be comfortable signing an offer in 30 seconds? (Maybe because you are a tire kicker).
If you are not comfortable making verbal offers than obviously you won’t be taking 30 seconds to sign, take 6 hrs or longer to read the fine print.
That is the beauty of technology and Docusign. No one is uncomfortably staring at you reading fine print in an office.
Nope, not what I said – if you re-read the post it will be clear that I think a “verbal offer” is not a good plan. All I meant is that back & forth verbal communications between buyer agent and seller agent have sometimes been a very good thing in our case before considering whether to make a real offer. An example that you cited might be the one where your client wanted to know if a subject-to-sale would be acceptable. That’s just the kind of thing someone might want to communicate verbally via agents, as it might be a hard no, and realistically then you’d have the answer instead of spending half a day drafting, understanding and finalizing a real offer. I agree with you that a “verbal offer” is not a good plan. I only take issue with your repeated statements to the effect that it’s just “30 seconds to write up an offer so what’s the big deal” – it is a big deal, and not a “30 second job” for most of the population to put an offer together they’re comfortable with.
We control doctor’s salaries, that’s why there’s a doctor shortage. And no shortage of real estate agents.
Both Vic and Van allow for more than provincial legislation of 4 plexes.
But the demand side is also different between Van vs Vic for these 4 plexes.
Lawyers – highly trained professionals. RE agents not.
Lawyers – diversity of fee schedules. RE agents – nearly all charging the same fee
Other than that your analogy works perfectly.
That is interesting. I hope that Victoria modifies its program further to match the new provincial zoning without additional restrictions. Looking at where this density has been built in other towns that already allowed this in BC I’ve seen that lower income areas with older homes near schools have had the biggest redevelopment to higher density.
Because doctors are publicly funded and RE agents are not.
We control doctors salaries so why not Real Estate agents. Besides they would be free to work for less if they want.
A bit off current topic but given I am trying to buy a missing middle property and following the market closely a lot of missing middle properties are selling with a Vancouver buyer’s agent (I would conclude most likely Vancouver buyers/builders/developers).
Kind of makes sense, a missing middle lot in Vancouver can be anywhere from $3 to $5 million and a very nice missing middle property sold this morning in Fairfield for $1,110,000.
That’s a funny one, More likely, the agent knows that rebates are fully deductible, and deducts them fully . But by using the line “after tax” he pretends he needs to pay tax on it, so only gives half the rebate he normally would. Hopefully clients don’t fall for that.
Seems to me that the agent giving rebates on “after tax income” is trying to obscure the calculation and thus net commission. As you pointed out, a rebate (of any kind) is given from before-tax income. The “after tax income” isn’t even known at time of sale, if you’re a commissioned sales person you don’t know what your total income and marginal tax rate are going to be until after the end of the year.
I’d go so far to say that this is grounds for a complaint to the appropriate regulator.
There’s legal action for sure. The “Sunderland” case, discussed in these links. The idea is that it isn’t sufficient for broker’s commissions to be negotiable, if in reality brokers are “steering” ( a legal term) their clients towards higher commissions. We hear talk of that all the time here on HHV. “I want to pay less commissions, but then I was told this might mean other agents wouldn’t tell clients about my property,” Who knows if this happens in real life, but the lawsuit alleges that it does happen, and it’s called steering. Something similar was the case in the recent case against NAR and others in USA, and there was a multi billion $ verdict against NAR (to be appealed). Laws and legal system are different in Canada vs USA, and competition law is evolving, but these articles imply that the Sunderland case might be a strong one.
Ask yourself. If I was selling my house, and told my seller agent I was going to pay next to nothing for the buyer agent, would the seller agent “steer” me into a higher buyer agent commission? If the answer is yes, the legal question becomes “is that behavior legal under Canadian competition laws?”
https://realestatemagazine.ca/the-sunderland-case-allegations-of-conspiracy-and-price-fixing-in-real-estate/
https://www.cbc.ca/news/marketplace/price-fixing-real-estate-1.6458531
I do rebates on every purchase and this is not how it works; the rebate is deducted from my income. If someone is doing rebates after tax income they need to get a better brokerage/accountant. (I still collect the GST on the entire commission and re remit it)
Here is a real life situtation re verbal offers. An agent phoned me over the weekend and asked me if the seller would consider a subject to sale offer. I phoned the seller and asked (I already knew what the answer was going to be) and my seller said, no thanks. I communicated this back to the buyer’s agent. The next day that same buyer’s agent sent me an offer, subject to the sale of a property. I sent it to the seller and he instructed me to counter the offer with the subject to sale crossed out. I Docusigned him the counter and we sent it back to buyer’s agent. Buyer’s agent got back to us and said buyer not in a position to make an offer without a subject to sale. End of story.
My point is if you aren’t happy with verbal communication as a buyer just put pen to paper. Also, by countering the offer on my end with the seller the buyer is getting written proof back that my seller is not willing to work with a subject to sale. There is nothing lost in verbal discussion/communication. You made an written offer and the seller made a written counter and there is no deal to be had at this time.
I think the buyer’s agent did the correct thing by writting up the offer even after I verbally told him no. My seller was certainly not upset, why would he be? It took him 30 second to counter it.
Sometimes agents phone me with a counter with reasons X,Y,Z for the counter and every time I tell him please put your explaination/rational in an email and then I can forward it to my client. I find it works a lot better than then phoning my client and saying “well, they do not want to come down for X,Y,Z reasons.” For all they know, I could be making that up.
Right, this seems like the issue is an agent , somewhere in the middle of buyer and seller, who made up a detailed “bullshit story”, and that should be the issue discussed here, not whether verbal offers are a good idea or not.
I found it’s interesting that some buyer realtors offered 50% rebate after their income tax. For a 1m$ transition, assume the realtor pays 30% income tax, that means the realtor only making around $6k. Does that really make sense?
Problem is government really let their foot of the gas on this front. They aren’t even updating any regulatory forms or any forms in general for mere postings, for example. Competition bureau let the 10 year agreement expire for mere posting -> https://www.crea.ca/media-hub/news/crea-ratifies-competition-consent-agreement/
Then all the regulations don’t help either….like why did the BC Government make the cooling off period applicable to private sales? Every regulation makes it more and more difficult for private sellers to operate.
That is why he wants to do the verbal offer because its not a firm commitment on his end. Basically its someone who isn’t that interested in the property and wants flexibility to back out without recourse but also wants to start the negotiation process and see what happens. LMAO I guess I just wrote the definition of a “tire kicker”
But they did want the offer to be written, not a verbal one, right? So if you had written one the first time, they would have seen it then. So who to blame?
Thanks. Then the problem lies with that agent. All he needed to do was communicate the verbal offer. And if he wasn’t going to do that, he should have told Deryk that.
I think what deryk just wants to do is negotiate a price without any commitment on his end and then firm it up in a written offer once he is happy with it. Any further modifications to the offer would then be done via the traditional method.
In regards to making verbal offers: The part I had difficulty with, in this recent experience I had, was that the agent had assured us that they would get the info to the listing agent and the seller.. Instead they gave us a bullshit story saying that they had let them know our intentions and that they had said no. (Even gave us the colorful details of why not;)
I would have felt better if the agent had said….Deryk, it’s a horrible idea for a number of reasons and I am not going to ask them.
That is what I had difficulty with.
When I contacted the seller they said that no one had talked to them. They encouraged us to put in an offer!
I like to talk to the owners when I can. It’s something I learned a long time ago.
Communication between parties is heavily discouraged today and why I do not like the way buying and selling real estate is done today.
It’s why I believe that it will change and real estate agents and the system will have no one to blame but themselves.
Communication is everything. It allows important knowledge of the property to be transferred down to the next owner.
For example: Every place has little quirks. Solutions to those quirks get lost and are not handed down to the next owner.
That’s just one example.
By the way, Never pre judge a potential client as merely a tire kicker. Several of my friends worked at a company and they won a large lottery shared between them. They were ordinary joes. But each won about three or four million each.
When they all went down to a car lot in Vancouver, the salesman took one look at their casual/untidy appearance, he made it clear that he did not want to waste his time. They then told him that they had just won the lottery and then walked across the street to the mercedes showroom and each bought a car.
That is my understanding too…the buyers’ agent didn’t communicate to selling agent. Therefore, why I asked him about the great reference he had for an agent, assuming that was his or her agent which is hasn’t clarified if it was or wasn’t.
I’m pretty sure the majority of people would be happy to have lawyers fees capped at $20/h but luckily for you that’s not how the economy works.
No doubt if there’s price fixing the competition bureau should get engaged. Not sure if there’s active investigation work ongoing on that front. WIth everything online it feels like realtors have less power to shun listings than they used to.
Not exaclty sure what your argument is? Your argument appears to be since this is the most important transaction of your life then better to do it verbally versus a written informed offer?
If you are willing to throw out a verbal offer than you can sign in 30 seconds. If you need to read everything then you can take 6 hours to read everything which is still better than an uninformed verbal offer.
When I send a DocuSign it doesn’t have a time limit. You can take 30 seconds or 6 hrs from the comfort of your phone/laptop/home desktop.
Patrick,
Deryk said:
“We had asked an agent to let the listing agent and the owners know, through a verbal offer , our best possible cash offer with no subjects ….which was substantially lower than the asking price.” and
“the agent had not talked to the owners at all and we have been told by the listing agent and the owners that if we were still interested, that we should write up the offer.”
So it is not the seller agent who didn’t pass the offer, but “an agent” didn’t bother. Not sure if “an agent” is buyer’s agent for Deryk, or just anyone who sat in for few few hours in the open house on that day.
Once again, this is not how real life works. Real life is two weeks ago I was involved in a transaction where two lawyers become involved (buyers and sellers’ lawyer) over a mini-fridge, yes a mini-fridge due to the wording of the contract of purchase and sale. Under normal circumstances I would have diffused the situation and bought a mini fridge, but it wasn’t an issue on my end.
What am I saying is what about all the other terms once you’ve reached a verbal accepted offer on the price? Deposits, completion/possession dates, conditions? Dealing with tenants/notices. Inclusions, etc.
Just look at the polarity of politics and opinions in society right now and apply them to real estate transactions. To think that two parties verbally agree on a price and everything goes smoothly is just insane….that is why everything needs to be one paper.
I’m with Deryk on this verbal offer experience. To me, the key point is that I understand that the seller agent told him that he had communicated the verbal offer to the seller, when he apparently hadn’t. That is clearly unethical by any standard. And so it doesn’t matter at that point if verbal offers are a good idea or not. The seller agent needs to be acting in good faith. In this case, that would mean NOT telling Deryk he had told the seller about verbal offer if he hadn’t done so.
I think you’re probably right that a verbal offer doesn’t really get you much of anywhere, but 2 points:
First, although there’s been a lot of discussion here about whether a verbal offer is binding etc., I’m not sure a true “binding offer” is even what was intended, vs. just a matter of having your agent sort of feel out the situation. And again, doing that might turn out to not be meaningful, but I think sometimes it depends, you might find out valuable information. When we were on the Mainland, we did all our RE transactions over 25 years with one agent, and that agent was someone everyone knew in the community. And so we would indeed sometimes look at a house and have him call the other agent to suggest well we think the house is probably worth somewhere in this XYZ range, what sort of flexibility does your seller really have? And if the other agent knew our agent wasn’t just full of it, he’d offer some info, and that kind of back & forth could produce some useful insight. Or maybe it was all just BS, hard to tell I admit.
Second, let’s be honest, it’s not “30 seconds is all it takes”. I realize for you it’s no biggie, standard form, electronic signing, no big deal. But for most people, it’s the most important transaction they will do, and they’ll probably only do that 3 or 4 times in their lives, and so many people (especially older folks) will tend to want to actually understand what they’re signing, and maybe they’ll obsess over things like conditions, possession date, what’s on the disclosure form etc. etc. and so maybe it takes half a day to really get them over the finish line.
And yes, of course, if they’ve gone over that finish line and actually presented a written offer, of course it will be much more meaningful.
When commissions are virtually identical in almost all transaction this is evidence of effective structural price fixing.
I am pretty sure the majority of people in BC would be happy to see commissions capped at 1%.You would still be free to offer it for less.
I think the intent Deryk hard on the verbal offer is to negotiate the price without a binding commitment and only make that binding commitment (written offer) once the price is agreed upon.
Correct me if I am wrong but is this your intent? Something like a listing is for 1.5M, Deryk makes an verbal offer for 1.0M, seller follows back with a verbal counter for 1.3M and then they settle verbally on 1.25M and at that point Deryk would make a written offer for 1.25M.
No at all for us, and he showed us some units over 5 years before we finally bought one. We even got $1K from him (as he gives back to buyers as an appreciation) without asking.
This isn’t a question for a lawyer, but for the BC Financial Services Authority (regulates and oversees important financial transactions in British Columbia to ensure fairness, legality, and the prosperity of consumers and the province.)
What do you think the answer would be if I asked them “Hey if presenting a verbal offer for my client do you think it is okay if I disclose requirements you’ve implemented such as cooling off period disclosure verbally?”
I’ll repeat, real estate agents are not self-governed anymore. I have to follow government implemented regulations.
I still don’t see what the issue is taking 30 seconds to sign an offer….this isn’t 10 years ago where you have to go to a physical office, or print/scan anything, etc.
100% disagree, commissions are 100% negotiable. Should we put a cap on how much one can charge for concert tickets? If you want to pay $500 to go see Taylor Swift fill your boots….I am paying $5 to go hear some Croatian guy you’ve never heard of in some pub in Dalmatia sing. Free market.
100% agreed this is the way things SHOULD BE, but I don’t know how we get to this. The problem is the government has really made a push towards every party having their own representation which is further entrenching the current status quo. If everyone is sort of forced to have their own agent on the buying end then payment of that agent become problematic for a lot of buyers as the payment to the buyer’s agent would not be wrapped up in the financing.
Current system, buyer pays $1 million and $33k is paid out (from that $1 million the buyer is bringing to the table) in commission $16.5k each agent and buyer is able to finance property @ $1 million.
If buyer is paying his or own agent $16.5k then they have to come up with that and it is not financed. If they are tight on the downpayment it makes things interesting and there would be competition in the marketplace to find “cheaper” buyer’s agent which would be good, in my opinion.
Either way, 100% agree with you but seems like a lot of obstacles to jump to get there and government isn’t going in that direction.
Actually, since a “verbal offer” is not actually a legally binding offer or contract I doubt whether you are required to provide anything. All a verbal offer is a negotiation to treat much like a listing. No different than asking an agent if there is flexibility on price or closing date. But why not check that with your lawyer Marko although I would assume you should already know the answer to that.
Marko, would not expect a real estate agent to agree with a maximum but you make a convincing agreement why there should be one to protect consumers.
We should also consider prohibiting any sales commission being paid from the vendor or their agent to the purchasers agent. Let each party pay for their own agent.
Everyone is still ignoring the point I made re agents having to follow government regulations. Verbal offer may be fine (still not binding) private party to private party; however, I am curious how am I supposed to meet government regulations as an agent presenting a verbal offer? As part of any offer, for example, the government requires me to disclose the cooling off period and the cooling off period penalty, in writing. So if I am given instructions by a buyer to present a verbal offer am I suppose to verbally disclose the cooling off period? I am sure that would fly if a complaint came to be.
It’s funny, people complain about lack of regulation and transparency in real estate. Government steps in, puts an end to real estate self-regulation (2016) and takes it over, introduces a bunch of regulations we must follow and then people are like “my realtor sucks he or she is not presenting verbal offers.” The same people complained about the lack of regulation!
Personally, I am not willing to lose my licence if you cannot take 30 seconds to sign a written offer. What I am saying is I am WILLING to take the time on my end to write up a low offer with a small probability of being accepted, and all I am asking for you as the buyer is to take 30 seconds to sign it from the comfort of your smartphone. What’s the big deal, unless you are a tire kicker not willing to follow through if the low offer is actually accepted? Not to mention EVEN if making an low unconditional offer and it is accepted by the seller you have the three business day cooling off period to back out.
Imagine if freedom_2008 and totoro didn’t negotiate the commission with Marko.
The Conservatives have not said anything to indicate that they would reduce immigration from the current numbers. They have refused to say what their target would be, but this have said this:
The number you give is in line with targets of the People’s Party of Canada which is clear about its immigration policies, whether or not you like them or other PPC policies.
I don’t agree with the maximum, but yes you can negotiate or ask for less. Nothing wrong with that.
True but if someone is desperate to sell and gets no real written bids then they will likely be more motivated to follow up on the verbal offers.
That is totally fair; I would say the majority of sellers/buyers would prefer to use someone other than myself. We all like to do business differently and have different personalities and reality is you are more likely to do business with someone you like, versus dislike. I’ve walked into houses and known within 5 minutes there is ZERO chance of me securing that listing (irrelevant of list price recommendation) and sure enough the sellers went with agents I had in my mind as a good fit in terms of telling them what they wanted to hear.
Personally, as a consumer I just cringe at human interaction beyond the minimum necessary. Eight years after ordering my first Tesla over the weekend I ordered my second Tesla and once again it was 100% online and not only online I did the entire order on my phone and I am picking up the car Wednesday morning in Langford. I haven’t talked to a person yet.
Audi, Hyundai, BMW, Kia, etc., never had a slim chance because even thought I like some of their cars (IONIQ 5, etc.) I did not want to deal with people in terms of placing an order so I didn’t bother going to even take a look at a single competitor.
Some people probably real like dealing with a salespeople and having their questions answered, etc., and hate dealing with the Tesla App where you can’t even talk to a person. I prefer to have my questions answered on YouTube and internet forums not a bias salesperson. Everyone is different.
I agree, you can ask for whatever you want and the worst is a no. If you are buying and selling then you should negotiate a significant discount on the selling side especially if you are going to be buying something more expensive.
Marko is right about how real estate deals work. It is also why real estate commissions should be limited to a maximum of 1%. You can of coarse negotiate or ask for less.
B.C. dependence on real estate should perhaps be a serious concern. Has anyone given serious consideration as to what happens if the Conservatives win a majority in the next Federal election (not exactly outside the bounds of possibilities) and immigration numbers are restricted downwards to a hundred thousand? Combine that with the fact that the baby boomers are soon going to be dying faster than retiring and were does that leave matters?
People seem to ignore the fact that generally housing is a consumable and does not generate wealth. For BC it does mostly transfer wealth from other parts of Canada but with a minor exception of a few foreign sales in places like Whistler it
does not exactly produce much in the way of foreign currency
reserves.
Same here, so +1+1 (for two of us)
I’ve used Marko’s services and would recommend him. The process was efficient and I could do almost everything virtually which saved me time.
Of course not. But one can’t expect a serious (or any) response with a not serious attempt。 Remember time is money too, for everyone involved.
To: VicREanalyst: I agree.
I think you will have a hard time with verbal offers except in really challenging market conditions.
What you are really trying to do with a verbal offer is to get the other side to show their cards first without a binding commitment on your side. You will need the market to be in your favor coupled with a desperate seller to make this work. Nothing wrong with trying though.
Thank you Marko Juras for illustrating so well why I have no plans to buy a house or sell one where you are involved.
I agree – if only it really worked that way! Can you imagine (not joking here) what a great country it would be if this is how our government actually functioned? Unfortunately, as attributed to Bismarck, we probably don’t want to see how laws or sausages are actually made…
Huh? Dual agency is banned in BC, how exactly does the listing agent get to know both sides? The other side is represented by an agent. The majority of transactions I’ve done in the last few years I don’t even talk to the other agent let alone the other party. It’s pretty rare that a buyer’s agent would phone me regarding an offer, the vast majority of time they just email me the offer and then I discuss with my clients, we make a counter, and email it back.
As agents we have the duty to protect our clients confidential info and having a casual conversation to “understand” both parties with the other agent is a perfect way not to adhere to that to that fiduciary duty.
Kind of makes sense if you publicly recommend someone as being a great agent that you would use him or her, no?
But you give instructions to your agent to present verbal offers? When it takes 30 seconds to sign an actual offer.
Doesn’t need to be brought back, you can still build a SFH if you wish. If NIMBYS have issues with multi-plexes in their neighborhood they should just get other NIMBYS to buy up teardowns on their block and build SFHs instead of multis.
Saw the article too. We have three made into top 10: #1 Victoria, #7 Saanich, #10 Oak Bay. Maybe rich people from GTA would prefer #10 over #1?
In answer to the question by Marco Juras , “Didn’t you recommend a real estate agent before”
Yes I did and I still stand by that recommendation. They have been great to deal with because they take the time to understand their listings and the people on both sides that they are dealing with.
Marco’s question feels like an odd question to me, because what makes him think I would use the same agent every time? For example: If I am buying a place in eastern Canada, then I prefer to use a local agent in that region who understands the local issues in that market area well.
And yes…of course I’ve always understood that a verbal offer has no legal implications. I can say that it gave us the valuable information that we needed and was useful to us.
I also believe that one should sell your own property without an agent …when it makes sense to do that. There are times that I would use an agent as well.
The truth is I can’t stand many real estate agents for various reasons. But that is my own personal opinion.
That list seems mostly to advertise to wealthy people in the GTA where to move for retirement. So I’m not sure if it’s a good thing to be placed on top.
Also, the fact checking is that article leaves something to be desired. Somehow they got Mayor Alto to come up with this gem:
“Mayor Marianne Alto says Victoria has long had local regulations that make it easy for homeowners to convert properties from single-family dwellings to structures with six to 12 units”
Maybe she’s talking about Victoria, Australia?
Not that stunning, it’s a trend that’s been going on for 40 years. The resource industries never recovered their previous dominance after the early 1980’s recession. Anyone else remember those 70’s bumper stickers – “Mining: BC’s second industry”.
Also not a coincidence that the RE sector grew together with a 40 year decline in interest rates.
$1,210,000
Victoria tops Globe and Mail list:
https://www.theglobeandmail.com/investing/article-canada-most-livable-city-victoria-bc/
Stunning stat I just read:
As tech, services and real estate have come to dominate our economy, revenue from resource extraction has shrunk to a mere fraction of the province’s total income, roughly six per cent in 2022.
https://thenarwhal.ca/opinion-bc-nature-protection-agreement/
Barrister, I assume when you say “boys” you mean union workers? If that is the case then it’s not true anymore as Eby is not cut from the same cloth as Horgan. Many things going on behind the scenes and the influence the unions have over the NDP is rapidly diminishing.
Type “>” in front of whatever you want to quote and then leave an empty row whenever you want to stop quoting
VicREanalyst, how do you quote like that?
Wouldn’t be surprised if there was a lot of provincial NDP + federal conservative voters in 2024/25.
I really hope that happens and introvert is your neighbor LMAO
Maybe it is as simple as them not having rock-solid numbers, but wanting to move ahead with legislation as majority governments do.
At least they are being heavy-handed in an effort to help solve a hot-button topic: Housing.. Damned if they do / damned if they don't.
If enough ridings disapprove of this government's record there may well be a new government in Victoria next November, hopefully a minority government to temper the free hand of a majority government.
Not even remotely, but I think we’ve exhausted this topic. I completely reject your assertion that the availability of one projection has any bearing on democracy for the reasons I’ve stated.
That has nothing to do with whether I support the bill or not. If the next government comes in and brings back single family zoning I will be against it even if they commission a 100 page report on why it’s awesome. As you well know, it’s pretty easy to create a model that supports your view. AirBnB and the hotel industry did just that for the last issue. Did the fact that the government selected the one they agreed with as evidence to support their move bolster the democratic process?
I like seeing the calculations and equations Leo provided but I’m in the minority. The typical HHVer reaction to seeing that type of analysis is typified by Barrister’s blunt response above.
I think the most in the way of an equation that most HHVers want to encounter during a HHV discussion is “time is money” 🙂
Leo’s nothing if but consistent.
Leo, your position here is somewhat analogous to your position on the HST fiasco circa 2011 wherein you ultimately supported keeping the HST because it was more efficient than the PST even though it was indisputable that Gordon Campbell had lied about contemplating its implementation prior to the election. The end (the HST) justified the means (government lying to the public).
https://www.cbc.ca/news/canada/british-columbia/timeline-the-battle-over-b-c-s-hst-1.993242
totoro, If some developer comes along and offers me a bunch of tax free money to buy my 10,000 sq/ft lot, demo my house, then build a high rise…I think that’s great for everyone involved, including the surrounding community.
One just has to look at the board game monopoly to understand this.
LeoS That is perhaps the most disingenuous argument I have heard from you yet.
It is not about the exact number of homes – I agree this specific number is irrelevant if we experience “enough” improvement for the cost.
It is about whether the legislation has received adequate informed debate as is required in a free and democratic process. Your argument is essentially the ends justify the means while mine is that the democratic process is there to ensure that we get as close to a good result as we can when taxpayer dollars are being expended through new legislation and this should never be sidestepped unless there is a true emergency and then only temporarily until it can be considered fully.
You are very pro on the reforms, but don’t forget these standards apply to all parties and all Bills – as they should. When something comes along that you disagree with – for example reversing zoning reforms based on different modelling which you don’t understand – will you be happy if the majority government of the day does this without releasing their modelling? The system needs to be fair and consistent.
You are saying the modelling does not matter. I am saying that the democratic process relies on adequate information being provided to support the legislation. is not about accuracy of outcome of the modelling but the premises on which the modelling is based.
Your framing of assumptions is also different than mine. It is not whether the loss of local control is worth it, or whether there it is better to have this legislation or none, it is whether there has been adequate independent critique to the point that we can have confidence that the legislation proposed has been subject to robust consideration and critique, and any new information raised is considered before the legislation is passed. This is the whole purpose of this part of the legislative process.
To be specific, although it is not my point, I would agree that loss of local control is a good thing for housing – NIMBY pressure is insane. But, and just as an example, I would disagree that the proposed reforms to SFH zoning clearly support investment in small scale multi-unit housing by homeowners who currently own most of the available SFH land.
I have seen zero information to support this assumption. Maybe homeowners are only intended to be part of the process by selling their homes to developers on a willing party basis. Who knows. If they are relying on voluntary uptake from homeowners, which seems to be part of the assumption based on their technical briefing, then I don’t see how this is supported or how we get to massive small scale housing development quickly.
But that is an aside because it is not about “the ends”. What I am objecting to is “the means” and a failure to follow democratic process and provide information that is both relevant and readily available and paid for with taxpayer dollars. This should not be within the realm of confidential information and only released after a vote. The vote is supposed to be held after relevant information is considered.
No. In fact I’m going to take this a step further and say that not only is the modelling report irrelevant, but the number of projected new homes itself is irrelevant.
What are politicians actually trying to do here? They’re trying to weigh the downsides VS the upsides of this bill and determine whether to support it.
Assumptions:
Downside: A loss of local government ability to enforce single family zoning.
Upside: Potential for additional homes to be built.
Question
Is the gain in homes worth the loss of local control?
To answer that question we need to quantify the upsides and downsides. Quantifying the upside is easy: how many homes will be created? At first glance then finding out the number seems to be a key parameter.
But we also have to quantify the downsides. How do we measure the impact of a loss of local control? Well the most direct measure is how many homes will be built that would otherwise not have been permitted under local control.
After all, if the bill is a total flop, it creates no homes but also creates no harm because no lot looks different than it would have otherwise.
If the bill is a raging success, it creates a ton of homes at the cost of subverting local control by a lot.
Conclusion
We have
X = The positive impact on housing availability / affordability of one home built
Y = The negative impact of one additional home being built counter to local government regulations
N = Number of additional homes built
The number of homes is on both the positive and negative sides of the equation
XN ?= YN
simplifies to
X ?= Y
And the exact number becomes irrelevant in terms of determining whether this is worth passing or not.
Adequate information includes the information they are relying on when drafting the bill and legislation. This includes the modelling. It is available, they are just refusing to release it before the vote. This, imo, very clearly subverts the democratic process which requires those voting on legislative matters to have access to the information they need to make an informed decision.
My biggest complaint about the changes was the lack of modelling. In my opinion, no MLA can make an informed decision without this. It is like starting a business without a business plan or lending money based on assurances rather than fact-checking.
That is not my point, but to be clear, you also don’t know that because it has not been released and debated.
For me, the biggest issue is whether the legislative process has been followed. It is the job of those MLAs in the room to point out any shortcomings in the proposed legislation before it is enacted. In a majority government the role of the minority MLAs is even more important and not less because “the legislation will pass anyway”.
The democratic process relies on this to ensure there is alternative perspectives and policies, debate ideas, and full questions about its actions and decisions prior to the enactment of legislation that affects citizens. A majority government can become myopic and self-serving in the name of a specific cause. This can lead to well-intentioned but poorly constructed legislative changes that cause an incredible amount of taxpayer money to be wasted.
In order for any MLA to do their job they need to have access to the information that the executive branch of government had when it directed that the Bill be drafted before the vote and not after. Saying they can just vote against it if they don’t feel like they have enough information is like saying that there is no point in having any non-majority party representation.
Let’s pretend this is legislation that would preserve SFH zoning and instead only create transit hub node developments and government told you this was the answer based on modelling they had not released. Turns out this modelling was based on the Singapore government public housing model which was funded by the Singapore government and based on different cultural values. Later you find out there was no budgetary allocation for this because it depended on Federal cooperation that never came. In the meantime, many residents in relatively affordable housing in transit node areas were being displaced by developers building towers of high-priced condos and subsequent governments have to enact new legislation expropriating private lands at great public expense and concern to build public housing because housing has not improved and there is no land left near nodes.
I don’t know about you, but I would have expected the lack of federal or provincial funding to be debated at the legislative stage. This keeps the majority government accountable. No-one knows how things will play out exactly, but legislative critique is required to counter enthusiastic myopia – especially in an election year.
I agree, but that has nothing to do with the modelling report. You aren’t addressing the meat of my argument, which is that that modelling report being released wouldn’t change the means nor the ends.
Them not providing adequate information is just your assertion though. Clearly a matter up for debate. I believe it’s adequate, you don’t. Does releasing an analysis make it adequate? Maybe for you but not for Adam Olsen. When is it adequate?
The democratic process is that the ruling party makes the case for a given bill and then the elected representatives decide whether to vote for it. If they think it’s shoddy they will vote against it. Adam Olsen is free to vote against this bill if he feels it hasn’t been adequately justified. That is literally the democratic process and it isn’t tied to an analysis report.
Separately we have an election coming next year. The population will decide whether the government they elected are acting in their interests or not. If most feel that these changes haven’t been adequately justified they will throw out the NDP before these changes have a chance to change anything. That might be a problem for the NDP but thats democracy.
Everything they need to make a decision is there. The question is: do you think it is justified for the province to set minimum standards on land use in the attempt to build more multifamily housing?
Everything else is guesswork.
You seem to have too much faith in the value of economic analysis. Economic analysis is educated guesswork. 99% of it turns out to be wrong because even if the model is perfect (never is) it is based on a set of assumptions about the future which rarely coincide with reality.
But somehow an economic analysis which is nearly guaranteed not to be correct is crucial to preserve democracy? I absolutely guarantee you that the reforms will not produce exactly 130,000 additional homes. Maybe it’s 10,000. Maybe it’s 200,000. Most definitely we won’t know for sure because we won’t know the counterfactual number. I’m highly confident it’s a positive number, but politicians are free to conclude otherwise and vote against it. Democracy saved.
The risk I see with all these government housing promises isn’t that they don’t follow through. The risk is that they actually do follow through – they spend all this money, but don’t accomplish something tangible – namely increased supply of houses.
The reason that would be bad is that in economics jargon that is a case of “spending rising faster than supply” – and that’s how you create inflation. For example, if we build 5k homes per year in Victoria, and government hands out $100 million extra in various housing programs, but we still only build 5,000 homes, that will produce one thing – inflation!
The Bank of Canada hates to see this government spending for that reason. Tiff Macklem made exactly these points in a recent speech where he said the following:
https://www.ctvnews.ca/politics/fiscal-and-monetary-policy-rowing-in-opposite-directions-macklem-says-1.6623438
———-==—-
– “Bank of Canada Governor Tiff Macklem says fiscal and monetary policy are rowing in opposite directions, making it harder to bring inflation down.
—- In response to questioning from Conservative MP Jasraj Singh Hallan, the governor says government spending is working at cross purposes with the central bank’s efforts to bring inflation down.
—- The governor says that according to federal and provincial budgets, government spending aggregate will grow faster than supply in the economy over the next year, adding upward pressure to inflation”
—=-‘’
To summarize, much of this government spending on housing could be inflationary, which is the last thing we need, because it would worsen the housing crisis. The government needs to do the same thing that Canadians need to do to stop inflation, namely to hold or reduce their spending, especially on things like housing with an inelastic supply
Totoro I’m sure like the U. S we will swing from left to right , and with each side pushing through their agenda . I could see some of what’s happening with ndp housing policies to be thrown out
I would disagree. You are taking this position because you think the legislation is an improvement and I would agree.
What I am saying is that to permit any government to justify the means by what they define as the ends is unacceptable. The next government majority could have an entirely different agenda that does not align with yours. If it is okay for the NDP to push things through without providing adequate information and say “trust us” why should the next government do anything different?
In order to maintain confidence in the democratic process it needs to be followed. You cannot ask elected officials to vote without providing them with the information they need to make an informed decision. Completely unacceptable.
And if the NDP are claiming 130k small scale houses in 10 years they better have reliable analysis to support this. Otherwise this feels like manipulation and it erodes my trust in what they are doing.
Has anyone figured out if Mt. Washington will be exempt from the spec. tax as well as the STR ban? I know Whistler and a few other ski resorts were, but I believe Mt. Washington is part of the CVRD.
While technically correct, the impact of small rate changes is much larger. Just look at the affordability chart(s).
I suspect that the goal has always been massive government housing. Lots of jobs for the boys and an increasing control over the lives of the populace. The big developers will love it and there should be a small river of cash flowing to the NDP and lots of consulting jobs for retiring politicians.
The question is where is all the cash going to come from? I am expecting municipal governments will also jump on this gravy train. Just look at the cost of the projects already undertaken.
On a different point, we are experiencing high interests rates. Only in comparison to the last few years of virtual free money could one even begin to make this claim.
I too would like to see the modelling, but more out of interest. It’s not really complicated. Which scenario will yield more housing?
Rates make development more challenging, but they are an external factor, and completely irrelevant to the question of whether this bill is a good idea or not. If anything, a move to reduce risk, time, and cost is more important in a time of high rates, not less. I’m not really that concerned about the whole issue. It’s not like building is impossible at higher rates, that was the norm for decades.
You are blowing this well out of proportion. Lets say they release this modelling today and it says we expect 130k units. Would it make any difference to the debate? Not a chance. Some people will say look we get lots of units that is good. Some others will say no the analysis is flawed and this move is useless. The NDP will pass it anyway because they have a majority and that’s how majorities work. Either way it’s a projection and a model, not an observation. It has a lot less importance than you are giving it.
The NDP has stated that bill 44 (new housing laws) will produce 130k more small scale homes in 10 years. My first thought was where is the modelling and business case because these numbers make no sense to me without this. I have posted about this on this blog several times because it is the critical question. For whom is this type of redevelopment going to make sense in a high cost high interest rate environment?
I cannot believe that the NDP is holding a vote on bill 44 without first releasing the economic modeling which is the basis for bringing forward this legislation. This means that those voting on this bill have zero chance of debating or assessing or even coming to a reasonable understanding before being asked to vote. Basically the NDP is telling MLAs and the public to just trust their modelling without ever seeing it.
If I was a MLA I would be very upset with this. As a taxpayer I’m angry. How can you expect a democracy to work without a discussion of what is essentially the business case for these reforms? That is extremely poor government and a misuse of a majority government power in my opinion. It also makes me suspect that the only way we get to 130k new small scale homes in our economic climate is if it includes a massive amount of government funded housing that there has been no commitment to provide.
While I am in favour of reforms, shame on you NDP for failing to follow a democratic process. The ends do not justify the means in this case imo.
Anybody able to provide the sale price of 3535 Grenadier Road? Thanks in advance
Vaughn Palmer: Green’s Olsen sinks his teeth into B.C. NDP secrecy
https://vancouversun.com/opinion/columnists/vaughn-palmer-greens-olsen-sinks-his-teeth-into-ndp-secrecy
Ahhh interesting how real life experience has thought one not to take verbal offers seriously. I am truly surprised 🙂
As someone who offers mere postings (for sale by owner) I always tell the sellers if you have an interested unrepresented buyer always ask for a written offer. If they can’t take the time to put “pen to paper” it shows you how serious they are. Works like a charm, eliminates a ton of tire kickers.
There is a million problems with verbal offers including them not being enforceable and if you had real life experience you would realize tire kickers make verbal offers. A true buyer will take 30 seconds to Docusign a written offer from the comfort of their smartphone.
Beyond that I can’t even follow government regulations with a verbal offer…..just one of many many examples is the rescission period/fee outlined and dislcosed on a written offer. This is a requirement of the GOVERNMENT not some “realtor protocol.”
“Licensees are obligated to disclose to their clients the buyers right of rescission. This disclosure is required when licensees prepare an offer to purchase on behalf of their buyer clients, or when licensees present an offer to purchase to their seller clients.”
“Motivated” sellers usually take lower offers. Maybe “desperate” is a better term.
Yes, I have talked about that before in this article (which is linked in this post). When prices are roughly flat, we see weakness in the fall in Sales/Assessment ratios. It’s certainly possible that the crappier places that need work don’t sell as readily, are generally sold at a discount relative to assessed value, and are more likely to hang on after traditional selling periods pass.
I would agree that it’s not enough to explain a 7% drop from one month to the next though.
Again, complete b.s, “non-sense”. Why would you put a problem property for sale during the slowest time of the year? So you can stick out like a sore thumb when its mostly bargain hunters out there shopping? You sell during the slow time because you are motivated to sell.
Leo is the expert on sales-to-assessment values. Perhaps he can tell us if there is a natural seasonal variation in sales-to-assessment numbers – as suggested by Frank’s theory that winter (nov-feb) sales represent “problem” properties that are over-assessed to begin with.
I wouldn’t expect that it would be enough to explain a 7% drop in oct-nov, but it would be interesting to know if there is ANY drop historically.
The most single family listings under a million since 2019
Talk about making a mountain out of a mole hill.
Deryk was looking at some property that he may like to purchase. He is not willing to pay anything like the asking
price. Therefore, he highly doubts the vendor will go for the price he is proposing. So, he tells his agent look, I am willing to purchase their property for $600K and not the $800K they are asking. If, after you have a talk with them, they agree to this price. we’ll put the offer in writing……this way…..no back and forth haggling. I don’t see anything wrong with this. So I guess the realtor was just too lazy or unwilling to go against “realtor protocol”.
FYI: we have sold three houses ourselves (i.e. sold by owner), and we never considered any “verbal offer ” as a real offer (yes we did receive a few), but to treat them like a “it is a nice house” comment. Sorry but that is how it works, our lawyer wouldn’t take a “verbal offer”, why would we?
Every binding contract needs some element of consideration, ie. an exchange of something of value. In many or most cases, the true consideration is the mutual promises made in the contract, eg. I agree to sell you my car and you agree to pay for it.
What I always found dumb is how many contracts I’ve seen that say something like “In consideration for the mutual promises herein and the sum of $10, the receipt and sufficiency of which is hereby acknowledged”, and then, of course, the $10 is never actually paid, and so to that extent the whole concept of consideration and validity is exposed to unnecessary ambiguity if challenged.
Anyways, whether/how that is different in BC real estate, I don’t know – it wouldn’t surprise me if some Act has a direct bearing on it, but not sure.
My gut feeling is that it would take about four to six months of building inventory coupled with low sales before we see a real drop in prices. Is it going to happen, absolutely no idea.
Patriotz, I am not going to take a guess on this one but in general every binding contract needs some form of consideration (love and affection and two dollars) but this is different than a deposit. The consideration is the sale price.
But if anyone knows if a deposit is required in BC by law speak up.
I think you’re correct.
I agree that sales to assessment ratio is a good indicator of market activity. However, what is the product currently being offered? This is not a good time of the year for real estate. Most sellers of quality properties will hold off on listing until the spring or when the market improves. If the properties offered today are sub standard, it will result in substandard prices. Prices drop at this time of the year and so does the quality. Anyone selling now is trying to unload a problem, with a few exceptions.
Dee,
SFH prices are dropping fast. Leo’s comment two days ago (Thursday) said there was a huge drop (7%) in SFH prices (as measured for November to-date sales to assessment vs previous.
He measured it as SFH selling at 93% of assessment in November vs 100% of assessment in October (and they were higher than that earlier in year. I think that sales-to-assessment measure is the best way to track prices. In theory it shouldn’t be affected by sales mix as much as median and average prices are.
It would be nice to see the SFH prices come down, especially on lower priced ones. I’m helping a family member house hunting for a SFH in core so a drop like that would be welcome indeed!
Prices down 7% in a month is ‘free-falling”…
Here’s the comment
https://househuntvictoria.ca/2023/11/21/leaseholds/#comment-107853
I’m not any kind of lawyer, but it’s my understanding that a binding contract for RE must also include consideration, i.e. a deposit.
Can someone please indicate what is going on with the SFD prices in the core? Are they holding or are they coming down? Ty
Not a real estate nor a BC lawyer (practiced in Toronto). My pretty clear recollection from law school days is that contracts for land and real estate must be in writing.
I suspect that it is covered under section 59 of British Columbia’s Law and Equity Act (RSBC 1996 c253) which in part replaced the old statue of frauds which requires contracts for land to be in writing with some exceptions. But I am just going by memory and there may have been amendments so one should check with a BC lawyer. My training and practice was in Ontario so I would not want to venture an opinion. The above cite is from memory and might not be right either. And before someone kindly reminds me, yes I am old.
Those are remarkable numbers Leo. Thanks for posting those. That sales to assessment metric has been remarkably stable and helpful in tracking trends. As usual, the market has a mind of its own. Who would expect that banning Airbnb’s would see a sudden fall in SFH and stable condo prices? Anyway, thanks for keeping track of this, and it will be fun to see where these numbers go!
Yes but for the owners it’s money coming in via higher desk fees.
Lmao, barrister how binding is a verbal offer if the other party had it recorded?
Is the condo market slowing or am I just imagining that?
Didn’t you have a great recommendation last time someone asked on HHV about engaging an agent? Are you no longer recommending that agent?
Why didn’t you just sign a written offer…..it literally takes 30 seconds with DocuSign to sign as the buyer?
Yes, they want an actual offer on paper. Go figure.
Just had the following experience.
We had asked an agent to let the listing agent and the owners know, through a verbal offer , our best possible cash offer with no subjects ….which was substantially lower than the asking price.
The agent got back to us and said that they had talked to the owner and that the owner was not interested. (We were told that the owner had invested a fair amount of money in one of the structures on the site and so could not possibly sell it at that price.)
Fair enough we thought. It was their choice to say no.
We found out two months later, from the owners , after we saw the building still for sale, that the agent had not talked to the owners at all and we have been told by the listing agent and the owners that if we were still interested, that we should write up the offer.
We are still interested but are currently looking at other properties as alternatives, as more selections have now come on the market.
I do not understand realtors as this is not the first time I’ve run into odd things.
it always astonishes me how many listing agents have no idea of the basic mechanics or advantages of the property they have listed.
Completely forgot about the many real estate offices in Victoria! We have no office. Sellers need me to see their house, buyer want me to show them houses, 99% of contracts are via DocuSign. Our entire conveyancing department works from home.
There is literally zero tangible reason for an office anymore but yet every year there are more and more physical real estate offices, 100% pure marketing….”Yes we have an office in Sidney and a strong market presence there you should list with us.” The consumer eats this up.
Oak Bay has 10+ real estate offices and zero in Colwood. I wonder if it has anything to do with higher average sale price in Oak Bay?
Definitely could be further calibrated. I would consider adding in population as a driver in calculating some type of velocity of sales per capita as a metric.
Lmao, this is something my insider contacts have confirmed time and time again. It’s all about precipitation, open a couple of offices in town, fancy wesbite and all of a sudden your business’s seems more legitment and you start getting more “walk-in” business. Then you start charging agents in your franchise a higher desk fee and so forth.
Why are agents big on lifestyle videos and marketing walking their dog down Dallas Road? They want to be the one you opt to hold hands with.
Are realtors out there on construction sites making technical videos like this -> https://youtu.be/HjYIbX_oE-M?si=i2XVY6BnTXpNyxgO&t=3
Nope….consumer does not demand tangible skill/knowledgebase/low fees as a high priority, at least not in our industry.
According to your meter we are in a “normal” market…..but not sure I would recommend an underpriced delayed offer situation to a client right now.
Marko is convinced that realtors are just there to hold your hand, and that people are paying tens of thousands of dollars for the privilege. I’m not convinced he’s wrong.
This story is just as believable as all the “we got our house because of our letter” stories. I hear it every other day but somehow all things equal I haven’t seen a letter work in over 1,000 career transactions. Maybe just my luck.
Sure, there is someone out there that got their house because of a letter just like there are agents out there talking motivated sellers out of aggressively pricing their unit.
See my example below re the AirBnb unit phone call unit I had earlier this week. Proof is in the pudding, a ton of Airbnb units listed, none selling. I am sure the 50th realtor listing the 50th AirBnb unit downtown when 48 haven’t sold is recommending another high price they are listing at…..lol…..common…..people need to use some common sense.
When I say agents are order takers it is a bit of a stretch to say we have zero influence. Big picture, do you think we would be at a 10+ year low in sales with the majority of agents set not to undertake a single transaction this month if we had substantial influence? Agents like setting prices high and making $0?
How do you explain the whole AirBnB unit flood. Do you think all 40+ agents listing these AirBnB units gave their 40+ sellers numbers where almost no units have sold? I had an AirBnB owner call me earlier this week, I gave her a number, she replied with “that’s ridiculous, we are keeping the unit for long term rent.”
This is where you are incredibly off in terms of how things function in real life. What makes an agent successful is marketing themselves (I am not saying this is how I think things should be, but this is how it is)…..just open your eyes and look at the marketing out there. Very expensive billboards, buses, bus stops, IG reels, fliers to your house.
You have access to the data so while I cannot mention any names look up the most successful agents in Victoria (based on dollar volume sales) then report back to me with their list to sales ratio. It is not very good at all, so are they bad at pricing?
You are way overestimating an agent’s ability to sell a product via their influence. The product in this day and age sells itself. The name of the game is to be SELECTED to sell the product and then just hope you don’t get fired. For the most part sellers will start higher than the price recommended (unless a bidding war market.) The more listings you can land the more successful you will be irrelevant of whether you are that good or not at pricing.
If you are “poor” at the pricing and can land 50 listings you will be way more successful than someone “good” at pricing but they only land 2 listings.
This might be an example numbering in the few…… An acquaintance listed their place for sale just north of the Malahat in the summer with the point of selling and moving to Victoria. They wanted to list lower to ensure the sale happened quickly, but their agent talked them into a higher listing price. They lowered a few times before getting an offer (offer failed because buyer could not secure financing) and the market had slowed over the months on market. They missed the opportunity to buy they place wanted in the Cook st area that sold for well under ask. They will not be using the same realtor again. They were trusting the pricing advice they got from the professional.
I agree 100% re “well known/successful” agent on the INITIAL list in a tough market. In a tough market you are unlikely to list your home with your friends’ son who just received his licensee two weeks ago.
What I am see out there right now is well known/successful agents being replaced by other well known/successful agents, at a lower price.
Won’t be long before a ex realtor is selling me carpet at Home Depot .
I don’t buy it. What you’re saying is that the agent has zero influence on the seller setting the price. That’s just not true. Sure plenty of sellers are stubborn and want what they want, but most people one of the main things they are asking for from an agent is a justified price recommendation. Agents better at determining market price and agents better at convincing sellers to list at or under market price will be more successful at getting those sales.
From what i’ve seen of sales data, in a normal market it’s also smarter to list low and attract more interest quickly. I don’t see any evidence that quick sales are under-market if the property has broad appeal and the market isn’t in a shock. So agents that successfully convince a seller to price aggressively are doing themselves and the seller a favour in most cases.
Do people noticed a lot of probate sales in this Fall. I may be wrong, but don’t recall this many in last Fall.
But realistically, once the seller gets no bites they would go around looking for a more “well known/successful” agent or someone recommended by their friends and family whom they perceive to be more knowledgeable and better at selling, so that agent has an easier time convincing the home owner to drop the price.
Many times in my career I’ve been fired and replaced by another agent at a lower price, and vice versa. It has nothing to do with the new person coming in being better at convincing. The market convivences the seller that they need to drop the price, the switch of the real estate agent is just collateral damage.
Once I was the 5th agent on a property and the 6th different agent was finally able to sell. Each time the sellers switched agents they dropped the price but it took a while (and many agents) for them to reach market value.
When the market is slow like this and seller has unrealistic expectations it’s risky to be the first agent as you don’t know if the seller will adjust pricing with you, or the 2nd or 3rd agent that will follow you.
it’s a feedback loop, the more “popular/successful” a agent is the more knowledgeable they seem and the more trust the sellers have with them with respect to pricing and offers.
Sign of a top agent right there.
convinced the seller to price to market, something the original agent wasn’t able to do.
Another quick and easy way to sanity check the $100k figure. Cities all over Canada have been signing these housing accelerator plans with the feds.
London: $74M for 2000 units = $37k per unit
Kelowna $31.5M for 950 units = $33k per unit
Calgary: $228M for 6800 units = $33k per unit
So is every city being super dumb and volunteering to lose $65k per home they allow to be built, or are they being bribed at $35k/unit and the true cost is much less?
https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-flipping-out-new-home-buyers-offering-discounts-to-escape-deals/
What did the listing agent do that sold it in two days at the new 500k lower price?
You still have to keep in touch with sellers during the course of a year, etc. Every re-list you have to pay VREB fees, etc.
I am not saying realtors are underpaid but a lot better to be the last realtor at the lowest list price then the first one that gets fired.
Ya but what did the agent actually do in that year? 2 open houses who they probably made some new agent host, couple of cringe videos on IG, coordinate some showings and not being present at them and forward some lowball offers? I think a sellers agent does much more work than a listing agent.
Absolutely
Tell that to Totoro or whoever that that was all giddy on paper gains.
I know you were being facetious. In my opinion agents sell the idea of open houses to obtain listings. Problem is consumer isn’t shopping around on fees so to differentiate your services you sell open house and a bunch of other stuff that has very little benefit to actually securing a sale.
If consumer was smart they would realize it comes down to price and would shop around for the lowest real estate fees.
I was being facetious…. But with low sales, I imagine the pressure is on to have showings. There is a bright side, on walks on cold rainy Saturdays and Sundays now there will be lots warm places to walk into the grab a fresh baked cookie and sparkling water.
That makes sense….all time record sales in history of VREB happend during a time when open houses were banned due to covid. Now that open house are back in full force we are looking at a 10 or 15 year low in terms of sales 🙂 For the most part, limited benefit to open houses.
Maybe they just wanted the agent to have more open houses……. 🙂
+1, exactly. I recently sold a unit at 834 Johnson a few months age where I encouraged my clients to lower the price and sell given their situation (moved out of country, unit sitting vacant, market headwinds). I also own a unit at 834 Johnson, but the market is the market. No matter what I do or say the market will do its own thing. If I encouraged my clients to keep their price high and unit doesn’t sell like how does that improve the market value of my investment unit? Secondly, I’ve been renting it for 11 years and plan to rent it for another 15 or so years so what difference does it make to me what the market value of the unit is? Commission is literally 100% more important that the hypothetical value of my unit in the building.
Or the hypothetical commission impact (less commission). Let’s say a realtor has a property listed for $1.5 million that isn’t selling. If the seller wants to drop it down to $999k and sell it in a day for $1 million I would hazard a guess that 99% of realtors would opt for a guaranteed paycheck at $1 million versus waiting it out for 1.5, 1.4, 1.3, etc. People come up with the dumbest theories like agents are keeping prices high to make more commission. I don’t think people know how real life works.
The $799k house I posted the other day another agent had it previously listed four times and then the seller switched agents. There is lot of sellers right now switching agents (aka as an agent you are taking a loss if you lose a listing, let along making anything) and lowering the price; therefore, securing a sale is far far more important than the sale price (in terms of monetary motivation). Lots of examples right now of agent being switched out after 6 months on market. The hilarious part is sellers switch agents and do a large price drop…..so is the agent the problem or the price? There have been some brutal ones recently where an agent had a home listed for a year, doesn’t sell. Seller drops price 500k and place sells in two days with new agent (not because of the new agent, but the price drop huge).
Realtors are motivated to sell. That’s literally their paycheck. So if anything the incentives are for a sellers agent to nudge clients towards accepting a lower price and buyer’s agent nudging clients towards offering a higher price. Their paycheck is way more top of mind than some hypothetical impact on the value of their investment properties..
Its sound like what actually killed the deal was the occupancy cost clause along with strata fee. Surprised that occupancy cost fee was not a preset amount? How was occupancy cost fee determined? How is it done here in BC?
Agreed.
I guess they are playing for the sob story victim hook. The developer is actually the good guy in the story. The couple is the one in breach of contract and the developer was kind enough to let them off with just a forfeiture of the deposit. The developer could have easily gone to court and sued for the entire amount and would have won.
The cities will be ramping up infrastructure spending on street parking signs 🙂
Really? You don’t play any role in setting asking prices? Or managing your clients’ expectations around price?
Just to be clear, I wasn’t suggesting realtors shouldn’t own investment properties. But I am genuinely interested in the proportion that do own investment properties. And for those that do, whether that influences price-setting for their clients.
Most cities have just been just patching up an old sewer and water system . Kinda like wacka mole
Strong towns has written about this endlessly. If you look at somewhere like oak bay which is pretty much all low density, it makes sense that their roads are so shitty, and their sewage infrastructure is the bottom of the barrel.
Sure, and as a taxpayer I would expect the Federation of Canadian Municipalities to come up with a realistic estimate instead of this posturing nonsense. I’m fine with saying “ludicrous, do better” when that is clearly the case. They have the data to come up with a realistic estimate if they want to. In general taxpayer burden per capita for infrastructure decreases with higher density, it doesn’t increase. Of course that is a lumpy scale. At some point you want a light rail system which costs a lot, at some point you need a new sewage treatment plant. But many cities have done analysis on which parts of the city pay for their own infrastructure and which parts are subsidized by other taxpayers. The ones that are subsidized are the low density neighbourhoods.
Canada builds about 300k homes per year. So that’s 7 years until 2030, so 7 x 300k= 2.1 million homes at current rate.
That’s nowhere near the “5.8 million by 2030” number.
2.1 million homes would house 5 million people, and that’s a little higher than expected 4.5 million population growth over the next 7 years to 2030. After tear downs, maybe just enough to meet the population growth.
“Canada should have 44 million people by 2030.“
https://www.nextbigfuture.com/2023/02/canadas-population-tracking-to-40-million-this-year-and-50-million-in-2040.
Sounds about right. At that point Vic West will be more dense than Toyko and we will need another bridge and two new parkades downtown to accomodate everyone driving from Roundhouse to COV.
I’m just wondering what the actual realistic cost is likely to be.
When we say the infrastructure is already there are we accounting for expansion and upgrades to systems. Upgrades that will be needed to sewer/water/road infrastructure or expansion to treatment plants or utility services? If upgrades are required, these are big costs.
It would be good to have a solid math-based critique of the 100k figure rather than say it is ludicrous.
I don’t know, but $100k in infrastructure costs that must be paid by the taxpayer per home when in many cases the infrastructure is already there (we’re talking about infill housing mostly) and direct infrastructure upgrade costs are paid by developers through DCCs is definitely not correct.
Or does anyone want to argue that the 1900 unit roundhouse project will cost the City of Victoria taxpayers $190 million, or two thirds of their entire budget?
What is the number?
I’m sure 600 billion will be not enough , wouldn’t be surprised if it doubled up. Kinda like site c dam style
Guten Morgen.
Thanks, and a friendly good morning to you too!
Slightly off-topic, but Evan Siddall (of former CMHC fame) wrote an op-ed today re: the feds’ plan to tinker with how the CPP is managed:
PDF: https://docdro.id/uVgtyDZ
https://www.theglobeandmail.com/business/commentary/article-federal-government-should-not-be-pushing-pension-funds-to-invest-more/
$600 billion, 5.8 million homes, simple math.
Where did you see that?
Yes, they are both the result of “progressive” government.
(printing money like there is no tomorrow, ramping up immigration to insane levels, and encouraging addiction, etc.)
A couple more years yet before we can hope for change.
VicRe, they didn’t actually paint that Cedar Hill House. The picture says alternate exterior colour, so I think it’s just photo-shopped. Maybe they were getting feedback that the colour was too much.
It hardly matters because we obviously are not building that many homes by 2030 but also this number of $100k of infrastructure per home is hilariously wrong
Couple buys pre-sale home, market drops, developer is bad….who approves these news stories -> https://m.youtube.com/watch?v=L68y5ws6jRU
So let’s review. Canada needs to spend, just on housing, $100B a year from now until 2030. The person most likely to become PM says he wants to balance the budget. Canada’s current overall budget deficit is $40B.
Cities call for infrastructure funding to build homes, fiscal update sparks dismay
https://www.ctvnews.ca/politics/cities-call-for-infrastructure-funding-to-build-homes-fiscal-update-sparks-dismay-1.6657945
The Federation of Canadian Municipalities says that new research it commissioned found municipalities would need $600 billion in infrastructure funding to help support the construction of 5.8 million homes by 2030.
That’s the number of homes the Canadian Mortgage and Housing Corp. says Canada needs to build to restore affordability.
https://www.leg.bc.ca/content-committees/AccountabilityDocuments/mlas/2023/Public-Disclosures-COI/Eby-Public-Disclosure-COI-2023.pdf
https://www.leg.bc.ca/content-committees/AccountabilityDocuments/mlas/2023/Public-Disclosures-COI/Falcon-Public-Disclosure-COI-2023.pdf
More importantly- How many people in political office own investment properties?
As agents we are just order takers.
Still not seeing many motivated sellers — asking prices are staying high.
Guess their agents are not motivated either? Don’t need the commissions?
Side note/question: what proportion of realtors own investment properties?
Already emigrated (to Canada). Once is enough.
And I’m sure happy living in Victoria, the city named #1 best small city in the world by 800,000 Conde Naste readers.
Are you motivated to immigrate to Luxembourg Patrick?
Their last asking wasn’t far from land value and no go. Another scenario is to build a brand new.
“just better off staying in Croatia.” …
Unless they want to live in a country (Canada) with triple the GDP per capita of Croatia.
Which leads to average adult in Canada having 6X wealth of average adult in Croatia…
https://worldpopulationreview.com/country-rankings/average-net-worth-by-country
Current (2023) Average wealth per adult…
– living in Croatia 68,272 USD
– living in Canada $409,297 USD
These two things are intimately linked
LMAO, never heard of that move before!
But props to them for getting creative and try to preserve what they can.
How much has the standard dropped? My parents came to Victoria in the mid-1990s.
My mom worked as a housekeeper. Her first job was at Harbour Tower Hotel at around $11/hr. Then she was able to get union housekeeping job at Vic General around $17/hr. My father worked at a stone masonry company before switching to self-employed stone mason and I think he was at $15/hr.
House in the Oaklands area (with a suite) purchased in 1997 for $180,000 on housekeeping+stone mason+delivering fliers on weekends income.
We had a family doctor that was readily available on Fort Street across from the safe on foods.
Pandora Street didn’t look like what it looks today.
Fast forward to today, same house is over a million. Wages for those jobs haven’t even doubled. You have no family doctor. Pandora looks like a war zone. You can drive Uber (instead of fliers) as much as you want on weekends but it isn’t getting you into a SFH.
Yes.
It is not like the information to address issues is not available. If government was operating on private sector efficiency and motivated by results we’d be there already. It is that the solutions are beyond an election cycle and might not be popular.
It is like coming out with a “homes for people” platform, removing STR zoning and changing tax laws with no release of business case demonstrating how it is likely to play out for tax revenues or increased housing and the timeframe. You can’t just change policy, the policy actually has to tie to human motivation and be coordinated between provincial and federal governments when the issues are national. The changes also have to be affordable.
For Canadians who already have a place to live the issue of medical care is paramount. I already pay extra to have access to some medical care, but at this point I’m prepared to leave Canada to get access to timely non-emergency diagnostic and non-life-threatening care as I have no guarantee that I’ll be able to access this here in a preventative or quality of life enhancing manner as I age. This is a huge hassle and not what I want for Canadians.
I am aware of many cases of people who cannot access basic medical services and many people cannot afford to leave and pay privately for medical services and one day I or people I care about might not be physically able to do this either. I’m sure Canadians are suffering from preventable illnesses and dying as a result. Not sure why we are increasing the population of Canada through immigration when we cannot care for the people who live here.
It’s the only thing that makes sense… Hot water tank is still up on marketplace.
Oh I wonder if they sold all that so they get cash in hand as they are expecting to get foreclosed on soon?
A lot of Croatians reach out to me about moving to Canada and I made a video a few weeks ago explaining how I wouldn’t recommend immigrating to Canada anymore, from Croatia. The standard of living in Croatia over the last 5-10-15-20 years hasn’t improved much, but I would say it hasn’t got worse; it has improved slightly imo. While the standard of living in Canada is getting worse and worse when you look at housing costs, health care, homelessness, etc., and I think it is closely tied to poor government policy. My conclusion in the video was the dealt difference has shrunk to the point where one is just better off staying in Croatia.
(I don’t think that will impact immigration to Canada as billions of people have a lower standard of living than Croatians; therefore, the dealt difference for billions is still big enough to want to come to Canada).
https://vancouversun.com/opinion/op-ed/vaughn-palmer-ndp-drags-feet-then-refuses-to-release-basic-info-on-its-housing-naughty-list
Crap, already paid my accountant $575+GST for preparation and filing on all my properties.
I am sure they will come up with more non-sense BS to keep accountants and lawyers busy. Accounting and legal expenses stemming for non-sense regulations introduced in the last 10 yrs is kind of insane.
Wonder how long until that Monterey one comes back on market without it’s kitchen, bathroom vanities and hot water tank….
I have a lack of confidence in the federal government policy decisions.
Marko, are you aware that the UHT which you filed and which I assume triggered an audit will likely no longer be required in your circumstances?
Although you complied with the new rules on time, Canadians (corp and trusts) who did not meet the deadline in your same situation had the deadline extended until next year and the penalty reduced. And now, it seems like you will not have to have file at all given that you presumably own through a 100% Canadian-owned corporation or trust…
So, essentially, you, as a Canadian, were caught by a program meant to catch non-Canadian owners and now the government has backtracked.
https://www.advisor.ca/tax/tax-news/feds-propose-underused-housing-tax-relief/
https://ca.finance.yahoo.com/news/3-tax-changes-fiscal-may-152944458.html
Ya, that Oliver one is in rougher shape than it looks. Half the electrical is run through conduit, so you’re guessing what’s behind those walls. It really looks like all 3 chimneys need to come out and the attic space loft they added in 2002 is questionable. The Reno on that one would just be opening up problem after problem. The foundation doesn’t look the best either…
Monterey one was like ~150k reno.
The minimum cost to renovate this property would be somewhere between $400k-$600k.Could be done cheaper, but may ended like the Monterey one. Build a brand new house at this location would be more make sense.
Uninsured were low 5’s and insured were in the 4’s (low 4’s).
Not too sure about that. Average interest rate of funds advanced was into the 5s:
https://www.bankofcanada.ca/rates/banking-and-financial-statistics/interest-rates-for-new-and-existing-lending-by-chartered-banks/
I don’t think they are similar rates as now (spring rates started with a 4)
Also agree with his video re. solutions: https://www.youtube.com/watch?v=sKudSeqHSJk
I like his example of the cost to build four 500 square foot units on a SFH in Van and having to sell each for 1,000,000 for it to make economic sense. This is what I thought. No market for that – just makes no sense.
And he hasn’t really addressed the effect of high interest rates in the clip – we might change the zoning like Auckland but they had low interest rates when this happened and we don’t – and we have static or dropping prices. How are developers going to buy up a few lots, tear down, rebuild, and make money now? Banks won’t lend unless there is a 15-20% profit margin.
I do like the idea of strata titling two units on a SFH lot as I agree this could bring the motivation and financial return together for those who have adult children or family member or just want to age in place. For big lots with alley access this could be a hit.
I think it does come down to money which is why the modeling was missing for me in the homes for people info. I’m not sure what size of building makes sense at current land, construction and borrowing cost levels but SFH owners are not going to be incentivized.
I do think a program for multi-gen housing with strata titling could have some uptake. Instead the government has proposed a 40k forgivable loan to build a suite or laneway house if you rent significantly under market to strangers – no family permitted. To me, this just misses both the financial and helping family motivators that are the only reasons I would consider increasing the density on my lot.
Uytae does good stuff. He also recently joined the BC Housing board
LMAO did they seriously just take it off the market at $899 (probably got a few bids they thought were too low), repainted it and now relisted at $799 for multiple offers? That is a big move, lets see if it pays off but clearly they are not yet willing to take a loss compared to their 2021 price paid after commissions and fees
I think you are mistaken, for most people especially immigrants from asian/south asian countries RE is still the place to park $. Realtors on here can probably back me on this.
Yr 2000 build SFH in the core for $799,000 -> https://www.realtor.ca/real-estate/26306767/2941-cedar-hill-rd-victoria-oaklands
Yup, I had a single parent purchase a SFH with a suite in the Oaklands neighbourhood for $495,000 around this time. I believe the suite tenant was at $1,000/month and I had calculated her monthly costs based on 20% down were cheaper than the two bedroom condo she were renting on Quadra at the time for $1,400/month.
Half decent video discussing why no missing middle housing is being built -> https://www.youtube.com/watch?v=DX_-UcC14xw
Our spring market turned out not too bad . I think folks here were suprised that people were still buying even at similar interest rates
We’re still looking to buy. Price is the main impediment. That and lack of suitable inventory in the area we’re looking.
Vicreanalyst , I would say that they’re still is a lot of cash sloshing around but real estate is not the place to be. We may only see interest rates come down a point or 2 in the future but when people’s sentiment turns negative it’s hard to turn that around
Yeah, right now it’s priced out. A decade ago it had evaporated. Things were relatively affordable but very little interest from buyers. Unclear if/when we will get back to people just losing in interest in real estate. Takes a few years of prices going sideways to really crush that desire to take on a big mortgage
It’s only fun if price go up.
I would say mostly priced out than evaporated
Ain’t that the truth. We started getting serious about buying in 2014. Lots of decent deals to be had that year. But we didn’t end up pulling the trigger because the market was just kind of plodding along – it didn’t feel urgent. Spring 2015, and you could “feel” that the market had shifted and was picking up steam. So that’s when we ended up buying. Everyone starts piling in when they think they are going to get shut out.
Marko , nah people only want houses if they’re going up. All that pent up demand has clearly evaporated. I’m watching Toronto as it seems to be leading the pack on the way down
When there is an opportunity everyone disappears then comes out of the habrination when there is five other offers to compete again.
HHV comments section was better when we had actual house hunters 🙂
Hmm 1256 Oliver , looks very much like lot value a real fixer upper . Then 4500 bucks a month rent doable
Always buyers if the price is right, I think Umm Really is still out there throwing out lowballs as he should
It has been noted.
It will also be interesting to see how many and how fast the cancelled and withdrawn listings come back on in January.
House hunters take note. Fall + few buyers + some motivated sellers = opportunity
Not sure if there’s any actual house hunters left or if everyone bought.
Leo, do you have a breakdown of sales to assessed for suited vs unsuited SFH? I suspect most of the big drops are houses without suites or very crappy suites.
Yes Canmore’s a nice place but very expensive. More expensive than Calgary itself. Had dinner there few months back.
Canmore would be a decent place to buy a vacation property — nestled in the Rocky Mountains, very close to Banff and just an hour’s drive from Calgary. And after a protracted legal battle, the town is set to expand greatly.
That being said, the number of days of smoke Canmore endured last summer would certainly give me pause.
I wouldn’t call this an unwind yet, just price discovery based on 6% mortgages and incomes
There is almost a 1% delta on insured vs none insured mortgages, could be the reason.
Were those list prices somewhat reasonable according to comps or were they dreamers?
I was focused on rental unit investments. For Vacation properties I would look south of the border..
Frank let’s just sell all the wonderful used homes we have now , then we can talk about building some more. Next spring we might just have all the selection we need lol
That would be really helpful, then who’s going to build all the homes we’re short of. Let alone “affordable “ homes.
Happy to see the real estate market starting to unwind . Now to bankrupt some big developers that would helpful
Except who from outside the province (or inside for that matter) would want a vacation property in Alberta. There’s a good reason why so many people from Alberta have a property in BC but not vice versa. I grew up in the Southern BC Interior and have lived in Calgary by the way.
The few sales that are coming through are the highest % off CURRENT asking price I’ve seen in over 10 years.
Some of the sales yesterday.
SFH in Colwood, listed for $850k (started at $999.8k) and sold for $775k.
SFH in the Jubilee area listed for $1.15 million and sold for $999k.
The number of SFH freehold properties in the core is currently at 389 so it has dropped (it was over 400 recently), but the number of those that are under $1 million is holding steady at 68 active currently which tells me there is downward price pressure (more and more of the ones that would have previously been above 1000k are moving below).
The expansion of the Vacancy Tax is interesting to me, perhaps in a different way than to ohers. It seems to underline that investing in BC, particularly in regards to real estate, is particularly unpredictable. At this point buying rental properties or vacation properties it would seem much more sensible to buy in Alberta than in BC. Property owners are increasingly perceived as villains.
Big drop. Granted it’s only partway through the month and can change. Also low sales numbers means this measure is more volatile (83 sales to date)
Seems low for SFH. didn’t it bottom out at 95% last year/early this year?
Median sales to assessed month to date
Single family: 93% (it was 100% in October)
Condos: 99% (101% in October)
Trailing 2 weeks single family listings (VREB areas, resale):
2023: 151
2022: 123
2021: 126
2020: 141
2019: 141
2018: 144
2017: 158
Higher than we’ve seen for a few years, but not really that unusual
It’s also not exactly new. You can see many of the same “rules” published in this guideline:
https://www.canada.ca/en/financial-consumer-agency/services/industry/commissioner-guidance/mortgage-loans-exceptional-circumstances.html#toc5
They just repackaged it and gave it a fancy name for political reasons.
Didn’t notice anything decent in the core.
It’s my understanding that this “Mortgage Charter” is not binding on lenders.
In any case if lenders are unable to charge interest on the full balance of the loan – and that includes unpaid interest – that’s an incentive to begin foreclosure ASAP.
It’s a fundamental reason why lending will tighten overall, because lenders will look to limit the risk of on the people that may end up in that situation. Basically, the lender will pay the interest (because it still needs to be paid) and takes a loss on the under performing mortgages. The solution if that regulation is applied is not to give out those loans.
Does anyone have an opinion on the new rule (#6 below) about not paying interest on interest? Isn’t “interest on interest” just another way to say compound interest? One of the fundamental building blocks of how we loan/invest money?
Seems to me that as soon as a mortgage is in negative amortization, the incremental dollars being loaned every day would end up being now a 0% interest loan.
Didn’t BC institute something similar for their apartment buying scheme?
Barrister I don’t think there is any money , all the talk of billions of dollars is just gibberish
Wonder were the money is going to come for all the public housing? Lots of jobs for the boys and all the good things that come from that.
A surprising number of late November SFD listings have come on the couple of days.
Montreal uses right to refusal to buy properties in fight against housing crisis.
The city is using its right of first refusal, which grants the city priority to purchase certain buildings or land ahead of other buyers for community-oriented projects. According to data compiled by Radio-Canada, approximately 350 property owners in Montreal have received official notices from the city, informing them that their buildings or lands are subject to the right of first refusal by the city.
Group with zero answers for a decade long housing crisis says they need more time. News at 11.
Spec tax expanded: https://www.cbc.ca/news/canada/british-columbia/bc-expanding-vacancy-tax-1.7036563
The very common counter argument (and idiotic imo) is how is going from a 850k SFH (the original teardown) to a small 714k+GST+strata fee condo an improvement in terms of affordability. Will ignore that one was barely livable and other one is brand new because that only makes sense.
Not just proportionally but also no elevator, no underground parkade, etc. You could also design a six-plex with no common interior hallways so no cleaning, etc.
Smaller buildings smaller sized problems though.
945 Pembroke is a good example. Sixplex, 2 bed units sold for $518k-$714k this summer. Is it “affordable”? No it’s market rate housing. Is it much cheaper than the 2.5 million dollar house that could have otherwise been built on that lot? Yes.
UBCM also released a report with Andy Yan about a year ago concluding that there really is no housing shortage in BC and even if there was it’s certainly not the fault of municipalities. Unserious group.
Now they are pushing for inclusionary zoning. Latest results out of Victoria is their inclusionary zoning program yielded exactly zero affordable units over several years (staff review said all good, we recommend no changes). Meanwhile Montreal’s program also yielded almost nothing. Inclusionary zoning doesn’t work, and never has. It relies on making every other unit more expensive to get below market housing. It’s like putting a windmill next to a highway and saying we get free energy from the drafts of the cars.
B.C. policy advisors warn of unintended consequences of new housing measures
PDF: https://docdro.id/FhnjjKt
https://www.theglobeandmail.com/real-estate/vancouver/article-bc-policy-advisors-warn-of-unintended-consequences-of-new-housing/?login=true
freedom- I’m well aware of the difference between an apartment and a condo. No need for an explanation. Managing a 6 suite apartment would be a pain with any return far off in the distant future. As a condo owner, I’m not sure I would want to be 1/6 responsible for any large maintenance fees that could occur down the road. The developer could sell the 6 plex once completed, but would there be any profit? Given current land values and construction costs, would these units be affordable?
Surprised no one said a peep yet about Ravi’s younger brother being a residential developer/builder.
One could have two side by side identical properties each having four suites. One could be zoned multi-family and the other residential with four permitted suites. The cost of construction would be identical for both but they would have wildly different market values.
One would likely cause a lift in the underlying land value and the other probably not.
https://www.theorca.ca/commentary/rob-shaw-born-at-the-right-time-could-bc-housing-legislation-entrench-intergenerational-poverty-7867232
Going back to the 70s , it was a bit of marketing glitz . You rented an apartment but you lived in a condo . You wouldn’t want to confuse the 2 types of people that called it home at night lol
40 years seems like a lot, but the False Creek South leaseholds turned into a sh!t-show when they had ~25 years left.
Lending criteria and investment thesis will be much different. Most developers would build an exist strategy in their pro formas after say 5-10 years at a certain cap rate or multiple.
Here you go Frank:
“Condo vs. apartment: What’s the difference?
The biggest difference between a condo and an apartment is ownership. An apartment is defined as a residence that is rented, often as part of a larger residential building. A condo can be similar in structure to an apartment — usually a unit within a larger residential building — but condos are owned instead of rented. The property taxes of a condo are paid by the owner; property taxes for an apartment are paid by landlords, not renters.”
Source: https://www.bankrate.com/real-estate/condo-vs-apartment/
Frank there can be parking. https://www.realtor.ca/real-estate/26145465/6-945-pembroke-st-victoria-central-park
This is the last unit of a six-plex for sale. There were two side-by-side 6-plexes on an extra large single-family lot (11,500 sq ft almost). I went to look at them when they were more or less all for sale and there were 5 parking spots in the back for each building (10 for 12 units), so only one unit of each 6 plex without parking.
That’s a strange headline on the stress test article below. That’s the way it was, and they are trying to make it so you can shop around for your mortgage if insured and not have to pass the stress test for an existing mortgage when you move it to a new institution. Does anyone think that’s an unfair differentiation? All those with uninsured mortgages would still be boxed in as they describe it if the stress test prevents them from qualifying at other lenders. I get it, they probably feel less risk on the insured mortgage front. I’m in the shoes of the uninsured mortgage so that’s where my mind goes, and I do actually worry about unfair treatment at renewal time from a lender who might realize you can’t qualify elsewhere.
Do you mean purpose built rentals versus condos? Apartment is a building style, but condo is a legal term referring to strata title. Granted these terms are used very loosely.
My understanding is the the builder can choose either.
If and when someone builds a 6 plex on a residential lot, what do the units become? Apartments or condos? I can’t see either working on such a small scale. Especially with zero parking.
Mortgage bonds in Canada are all composed of CMHC guaranteed mortgages. I just don’t see any problem selling them. Indeed when things look risky investors will look for safety.
As for the non-insured mortgage sector, yes in a downturn lenders may get picky about down payments, or charge higher rates. But borrowers have the choice of getting an insured mortgage if they qualify.
If you want to see what the government can do when things really get nasty, look at the Harper government’s successful measures to turn the RE market around in 2008-9.
https://www.cmhc-schl.gc.ca/professionals/project-funding-and-mortgage-financing/securitization/canada-mortgage-bonds
Okay, apparently all the housing charter items announced today are not actually rules, it’s just guidance with none of it actually binding on banks and lenders… So, nevermind… Mostly, just a wet fart from the feds.
Most leaseholds are old buildings so you are looking at issues likes this -> https://www.timescolonist.com/local-news/james-bay-condo-owner-challenges-hefty-building-repair-bills-4612460
I’ve been thinking about these as well for a family member – did you by any chance get any parameters on how things work as between the unit lessees and the owner of the building? ie. I would imagine everything was locked into place when these leases originated, which I imagine was like 50 years ago or so (99 year lease? not sure), and first thing I wonder is I assume lessees are responsible for everything, but I’m not sure if monthly fees are set by them or the landlord or how this really works? I thought there was one example here in James Bay where this hasn’t been working out so great.
PS I also just recently looked at the listings of these West End units on MLS and it sure seems like they suddenly took a biggish drop, the cheapest ones are now below 300k (!) – maybe people were using them for Airbnbs and decided to cave?
It’s tempting as a sort of stopgap measure. I wouldn’t want to be holding the bag as the lease gets anywhere closer to the end, but then again, that’s highly unlikely to be the case
https://globalnews.ca/news/10106658/mortgage-stress-test-fall-economic-statement/
Land leases are a unique arrangement since a home and the land it is on are owned by two different people or businesses.
Pros of a land lease
Low or no property taxes. Since you don’t own the land, you will save when it comes to property taxes. You likely will pay some local property fees, but some areas restrict the amount that land lease fees can increase each year.
Property maintenance. Homeowners with a land lease arrangement typically pay fees to a community association that handles lawn and garden maintenance, snow removal, and other repairs and ongoing maintenance for shared property.
Amenities. Leased land communities often offer conference/party rooms, exercise rooms, swimming pools, tennis courts, playgrounds, and other recreational facilities for homeowners
Cons of a land lease
Difficult resale. Since the remaining time on the lease shortens with each year you live on the land, you may have difficulty selling your home down the road. Even if you plan to live there for many years, a land-lease home is not as valuable to your heirs as a traditional home.
Monthly fees. Most land-lease properties are part of a homeowner’s association (HOA) that require monthly payments. HOA fees can increase each year, and the HOA can levy extra fees for community property repairs or major upgrades. You may have to pay for amenities you don’t use (like a golf course) or landscaping changes you don’t want or would rather do yourself.
Instability. Leases are renewed by the month or by the year. If a landowner decides not to renew the lease, you would have to move. Also, even though you’re not buying the land, you still may have to pay an annual lease fee. This fee will rise over time at the rate of inflation or greater.
If I were managing a REIT, I would consider developing a retirement village in or around Brentwood Bay as a leasehold strata. The retirees that I have been speaking with in Victoria are thinking of their future when they won’t be a mobile as they are today. They would like to sell their current home, but there are not many alternatives, so at this time they are choosing to age in-place. They also want a home that is designed for their needs such as wider hallways, no steps, low maintenance, etc. And they want to live in an area with similar age owners, less busy, and away from the downtown core but still close to a hospital such as Saanich Peninsula.
This is a way that we can open up more middle income houses by reducing the bottle neck of retirees that are ageing in-place. Every middle income house a retiree sells makes available a house in the city that would be better suited for a family of five or six.
Great article Leo. Yes, I think leaseholds are a good option. If a complaint is the high price, that also means they hold their value. I was looking at one for a family member in Vancouver, and it looked like they could get a 1 bdr apartment in the west end for $400k with 40 years leasehold left. About half price of buying. Seems like a good option, especially for a single person not concerned with using it to fund retirement or their estate.
Looks like like the government is going to fumble itself back into quantative easing because when the people that back lending won’t invest their money in mortgage bonds if they can’t recoup losses, why invest in it? It will be funny if Canada creates it’s own little real estate market liquidity crisis out of this foolishness. Then the people they were pretending to protect with this policy will end up not being able to get a mortgage renewal anyway. If the banks or lenders can’t sell someone’s loser mortgage to investors, then there’s no money to lend for those mortgages… Oh wait, maybe they will just bundle loser mortgages and sell them with higher quality ones; that worked out well in the past, didn’t it? lol.. this is almost unbelievable….
Other than the ban on illegal STR expense deductions, it’s a nothingburger. The entire Mortgage Charter is voluntary for lenders. All lenders are going to be stingy due to the new OSFI capital buffer requirements so there is no specific advantage switching lenders at renewal. It’s all optics for the most part – appearing to be doing something.
Sweet Canada has taken the risk out of real estate , now they should do the same for the stock market
From the update patriotz mentioned (https://www.budget.canada.ca/fes-eea/2023/report-rapport/chap1-en.html#new-canadian-mortgage):
The Canadian Mortgage Charter
Canadians can expect:
1. Allowing temporary extensions of the amortization period for mortgage holders at risk;
2. Waiving fees and costs that would have otherwise been charged for relief measures;
3. Not requiring insured mortgage holders to re-qualify under the insured minimum qualifying rate when switching lenders at mortgage renewal;
4. Contacting homeowners four to six months in advance of their mortgage renewal to inform them of their renewal options;
5. Giving homeowners at risk the ability to make lump sum payments to avoid negative amortization or sell their principal residence without any prepayment penalties; and,
6. Not charging interest on interest in the event that mortgage relief measures result in a temporary period of negative amortization.
Wondering how this will impact the market in relation to renewals in the next two years.
Buildings permanently attached to lands (i.e. on a foundation) run with the land. Unless you have a specific right to the depreciated value of your home in the lease the attached improvements revert back to the landlord along with the land at the end of the term.
Come on, I know you can do better than that. Now that I’ve finally found a use for you, go make yourself useful and go find that damn rental peak link! LMAO
Wouldn’t expect anything less from a poor lonely soul who takes refuge on an internet forum.
Appear to be no surprises in mini budget, billions in financing for PBR and affordable housing, kicking the can for homeowners facing mortgage renewals. And of course the crackdown on unauthorized STRs. No capital gains changes.
https://www.ctvnews.ca/politics/billions-for-home-building-back-loaded-deficit-projected-at-40b-in-2023-24-fall-economic-statement-1.6654535
I google faster than that.
The only “call” I remember you making in Q4 2022 was the official one you posted that SFH prices will fall 17% in 2023. From $1,060k at end of 2022 to $875k, a drop of 17%. So far, at end of October vreb.org median is $1,115k, which is up 5%.
With a little over a month left in the year, you’re only off by 22%.
Ouch! Even KS112 wasn’t as bad as that. 🙂
https://househuntvictoria.ca/2022/12/27/2023-predictions/#comment-96925
Just timed myself, this post took 15 seconds from start to finish 🙂
Is it possible to sell a leasehold with five years remaining?
What would you pay today to net a $1,000 per month for the next 60 months?
It won’t be $60,000 but it won’t be nothing either.
No compensation is owed to the leaseholder at the end of the lease in this case?
Most leaseholds don’t run down to five years due to loss of utility. Early renewals of longer term leases are common and many leases have a right to renew at market which increases value. They don’t make good economic sense for most.
Another concern is where the homes are attached to the land (not mobile homes) if you maintain or improve your structure over the years it reverts back to the landlord at the end of the term if no land lease renewal.
No time for googling links. Lots of time for posting stuff here.
Financing will be next to impossible but yes you can still sell it. You are selling the value of 5 years of housing at that point, so you can extrapolate how much that might be worth.
Correct. Chart is for greater victoria
Actually is it even possible to sell a leasehold with five years or less left (other than getting next to nothing).
I am probably wrong but I sort of got the impression that there are a lot of rental building that have been either started or approved in the last few years?
I think the discount for buying freehold vs. leasehold is not enough to be an option worth much consideration for most.
If buying a leasehold I feel like you have to assume depreciation as your base case scenario.
For a younger person buying leasehold feels like giving up on the goal of ever owning freehold. You are locking up your capital in a depreciating asset when it could be in investments. If you are a younger person with children or planning on having children then buying leasehold is hard when you have seen how the cost of owning property has increased over the years, you want stability for your children or future children. The hedge against inflating costs of housing that buying leasehold provides is temporary compared to to freehold. I feel that the discount would need to be more substantial to justify all these trade offs for many people.
Leo, for the chart showing leasehold vs strata apartment values does that data come from assessments or is it based on average of all sale prices for the year? I ask because I wonder if since leaseholds are less appealing the less time left on the term then I would expect in a given year more leaseholds would sell that had higher terms which would bias the data to those with the most leasehold properties with the most value.
LMAO yup, called the rental peak in the last quarter of 2022 as shown in the chart, Patrick can dig up the receipts because I can’t remember exactly what month it was and I don’t got time to waste and google links.
I suspect that both the Feds and the province will be announcing Billions in super cheap loans for rental developers and that along with contracts for public housing should keep them busy for years.
I think the 2 bed sellers will capitulate first, if the one beds are purchased in the 400’s then one can potentially afford to ride it out for a little while. Much harder to do so with a 500k+ mortgage.
Interest rates, high construction costs persist, and uncertainty in the market (tough to say if one can generate enough pre-sales to secure construction financing and or what the final product will sell at in 12 to 36 months from now when the project is finished).
As far as the zoning changes the government gave municipalities more than two years to work on the bylaws, etc. 100% guaranteed municipalities will ask for an extension. You won’t be seeing any projects from zoning changes for at least 5 years.
https://twitter.com/trevortombe/status/1726965476235030554
Due to interest rates and a potentially flat market? Do you think that the zoning changes will not result in much of an increase in building for the same reason – apart from government funded projects?
Problem is in six months there is a possibility rates start coming down a bit, a bunch of projects will have been shelfed (less inventory), etc.
It doesn’t seem too common for markets to go relatively flat +/- then followed by price going down. It could be a lot of flat going forward while incomes catch up and interest rates stabilize and possibly go down a bit.
Vacancy control (I think we’re talking about the same thing) is a big step, and I agree with those who think it’s not coming any time soon, I just think we’re in the environment you describe and there are no sacred cows, so I could see it on the horizon even if just as a distant threat.
I’ve looked into them and dismissed them as a reasonable option for our family.
For mobile home parks there is too much uncertainty about redevelopment. Even if you have more than 50 years on your term your resale market is going to be limited and you’ll start losing value as the term ticks down.
Leaseholds with terms of ex. less than 30 year, might make sense for retired people who have limited capital and no plans to leave their family anything. Maybe worth it for an increase in security/quality of life for some seniors with limited options.
Leasehold, strange to use this, no rights, resale impossible if you should need to move.There is absolutely no financing available. More listings perhaps yes something to do with higher rates, but possibly moving from high value areas to low value to pull small amount of equity.
Marko, not so strange as to asking price, the question is what will the actual asking prices be six months from now. Housing prices on the way down are a slow ship to turn.
I think the listings are a result of interest rates, str restrictions, and other tax and regulatory changes leading to lower confidence and carrying capacity.
If you own a vacation/retirement condo/home in Victoria you have to rent it out or face the vacant homes tax. If you have a mortgage you are facing much higher costs to own and probably not much in the way of appreciation in the near term – possibly depreciation for condos.
People closer to retirement are probably thinking they can just get a GIC with their equity and not deal with the hassle and stigma of being a landlord in a housing crisis or the potential of changes to capital gains taxes.
I am hearing that serious consideration is being given about legislation to limit the amount of increase between new tenants. This is apparently viewed as being different than prohibiting an increase when you get a new tenant. I suspect that this would be seen as very popular and would only upset a small number of people (most of whom dont vote NDP anyway).
The old impediment that people will stop building purpose built apartments has been significantly removed by the entrance of agencies such as BC housing providing really cheap loans for almost the entire cost of the new builds. With little to next to no capital in the buildings this is a money machine for developers with long term loans at extremely low rates.
To be clear, I am not saying this is going to happen but it would not surprise me. ( yes, Ebby has stated that he would not prohibit rent increases between tenants but limiting these increases is a totally different matter according to some).
My actual point is that BC when it comes to housing and investments has become more unpredictable. Policy by crisis
creates a sense of risk. Considering that many rental condos are already cash flow negative a further sense of risk might be tipping a few owners onto the market. Even incremental changes do have an impact.
The odd thing is everyone is asking top dollar. At the Pearl most sellers are asking for a 200k uplift over the pre-sale purchase price. No one is like, meh, I’ll take a 100k profit and clear this out and you would think there would be someone at these carrying costs.
Seems like an odd time for everyone to decide to put units on the market. Makes me think it’s not entirely voluntary.
A lot of brand new condo re-sales hitting the market. Just the Pearl (1628 Store St) has 15 new listings in the last four weeks.