Land lift
With the provincial moves to effectively upzone most of the province, there are a lot of debates about what might happen to land values when they are implemented. After all, normally when land is rezoned to a higher density, there is an associated land lift. In other words the land value goes up, often quite dramatically when a single lot is rezoned for a higher use. It raises the question of whether the same will happen broadly if near every lot in the province suddenly allows multifamily housing instead of just single family. Let’s take a look.
First of all it’s useful to understand how developers do feasibility analyses for development (proformas). Residual land value is an output from a proforma, and is fundamentally calculated as below.
The residual value is the maximum that the developer can afford to pay for the land. If that maximum is lower than the actual cost of the land then building makes no sense and the developer wouldn’t proceed. Land lift is then the residual land value minus the actual price of the land, and it must be positive for multifamily development to make sense. Any positive land lift is captured by the developer in the form of extra profit (if everything goes smoothly). That’s also why you see some developers going through the rezoning process and then selling the rezoned land (capturing some of the land lift) to someone else who will actually do the building (this happened at the university heights redevelopment).
Is land lift bad?
Land lift has garnered a negative reputation over the years. After all it’s additional profit to the developer in a time when many are struggling with housing affordability, which leaves a bad taste in people’s mouths. This has prompted cities to try to capture some of the land lift, using systems like Community Amenity Contribution fees. Those are monetary payments negotiated during the rezoning process, over and above the usual Development Cost Charges which are collected at building permit time and cover immediate infrastructure costs. The Local Government Act requires CACs to be negotiated site by site, and some cities adopted a policy of trying to capture most of the land lift in CACs.
At first glance this seemed to make sense: instead of passing land lift to the developer, why not use it to pay for community amenities and keep regular taxes down? However there’s no free lunch in economics, and this had some downsides:
- The site by site negotiation of CACs added risk and uncertainty to development. Without a fixed formula, CACs cannot be easily factored into proformas, and developers may buy land only to come to a standstill if the city demands more CACs than can be paid.
- CACs are negotiated at the time of rezoning, but much of the hard and soft costs aren’t paid until much later. If costs rise more than projected, a project where CACs were negotiated to capture much of the land lift may become infeasible later. This is happening now with projects in Vancouver, where the city negotiated large CAC payments several years ago, then interest rates and construction costs rose and the projects stalled.
- It destroys a price signal. Excessive land lift signals that zoning is artificially depressing land prices. A large land lift (i.e. large profit opportunity) would normally incentivize a lot of builders to build multifamily housing, increasing competition and the supply of housing, which decreases prices and moderates the land lift. However if land lift is captured, this supply response is limited and the market doesn’t respond as well to the price signal. So while the municipality can collect some money from every development, residents pay the cost in the form of higher prices and rents.
Note that because of the multiple problems with CACs, the province recently moved to abolish them in favour of the more flexible Amenity Cost Charges, which apply at the time of the building permit and allow cities to collect money for a broader set of amenities while having less of an impact on development.
An example of the importance of land lift is in missing middle housing. In Victoria, the policy was designed to be quite restrictive and require special fees for multifamily housing that were not charged for single family construction, all in an effort to minimize land lift. The city commissioned a report from Coriolis to estimate the financial viability of various missing middle forms under the policy they passed in 2022. The land lift was negative in all cases, indicating that developers would not be able to pay as much for the lots as they were worth in the regular market. Predictably, the policy attracted nearly no interest from builders in its original form and had to be reformed 8 months later in an attempt to improve viability.
Kelowna tried a different approach when they upzoned 800 single family lots to allow quadplexes in 2017. The planning team was small and they were unsure if upzoning would work, so they passed a simple policy with few restrictions in a limited area to gauge the results. Not only was the policy permissive, they also pre-approved some quadplex designs which builders could just take and be issued a building permit within weeks. According to a planner I spoke to, that was a game changer for small builders who had neither the sophistication nor the capital to navigate a rezoning process. They didn’t analyze land lift, but estimated it was significant for the lots that were upzoned. That land lift incentivized owners to sell to builders (at a price higher than market value as a single family home), and the policy led to several hundred new homes built.
Note that normally the developer is the one that both leads the rezoning and builds the homes, thus capturing the entire land lift for themselves. When the government upzones land directly, the land lift is spread out between the owner and potential future developer (where it maintains its role as a price signal). However as illustrated in Victoria and Kelowna, for there to be any land lift the new land use must be buildable. At this point we don’t know enough about how the provincial upzoning will be implemented by cities to determine if it will legalize missing middle only on paper, or also in reality.
Scarcity VS Abundance
Land lift in our current system is often high simply because there is such a scarcity of lots available for multifamily housing. Most of the land is zoned exclusively for single family homes, and turning it into multifamily housing involves an uncertain rezoning process that can take years. Even if every rezoning application was approved, the throughput of the system isn’t high enough to meet the natural demand for multifamily housing. That has lead to an ever-increasing gap between what is allowed to be built on a lot, versus what developers would build absent restrictions.
Where is that gap the largest? Well, take a typical city in the typical North American “tall and sprawl” layout, with fairly high density towers in the centres surrounded by a lot of low density single family suburbs.
Why does it look this way? In short: zoning.
In cities with few zoning restrictions, density profiles tend to fall off more gradually as higher density naturally gets built closer to existing amenities. Potential land lift then is largest where the gap between the permitted density and the natural demand for density is largest. For example there is a lot of demand for a sixplex with limited parking on a lot close to town, but very little for the same building out in Cobble Hill where the highest and best use may well be a detached house.
This goes double for the province’s plan to allow 6-10 stories near bus exchanges, which is a substantially bigger jump in permitted density than going from 2 (house + suite) to 4 or 6 units per lot.
But what happens when all the zoning changes at once? In the very long run (think many years or decades), the same thing. Land value which is artificially constrained by zoning increases when more homes can be built on the same lot. But don’t expect every single family lot to jump in value overnight like it would if you just rezoned a few lots.
The primary limiting factor to the speed of land price increase is the limited capacity of development capacity and capital. Just because zoning becomes less of a constraint doesn’t mean we suddenly have unlimited labour to build homes, or endless investment capital to buy up land speculatively. When there’s a few lots that support multifamily housing, land owners have a lot of leverage to demand a higher price from developers. When there’s thousands (or hundreds of thousands province-wide), that development capacity gets spread thin, along with any associated land lift. A developer looking for land zoned for multifamily housing only has a couple options currently, but will have hundreds of options if the changes take effect, limiting the leverage of any given land owner to demand a higher price.
A mitigating factor at work now is also the sluggish housing market and high rates. Uncertainty about resale values introduces risk in the revenue projections of proformas, while high rates increases costs and has driven investors out of the market to some extent. Bringing in these reforms during a down market will slow down any impact on land values and make them less noticeable. We’ve seen a version of this with the removal of the ability of strata corporations to restrict rentals. A year after the changes we’ve seen the value gap between unrestricted and previously restricted units narrow but not close, likely due to investors sidelined by higher rates.
The example of Auckland
The province has cited New Zealand’s similar reforms as a model for their own upzoning, and we can look to there for some evidence of how land value impacts may manifest. The nationwide upzoning is too recent to gauge impacts, but Auckland instituted similar reforms back in 2016 which have been widely studied. In a 2018 paper, Greenaway-McGrevy et al looked at the land value impacts from the Auckland unitary plan, which allowed missing middle type development on most lots in the city.
They found that upzoning “generated a substantial increase in the price of underdeveloped properties relative to properties that were already intensively developed”. Specifically, they looked at land value impacts based on the intensity ratio of properties, which is defined as the assessed building value divided by the total assessed value of the lot. An empty lot would have an intensity ratio of zero, while a highly developed lot would have an intensity ratio approaching 1 (you can look up building VS land values for any lot at BC Assessment). They found that lots with the lowest intensity ratios (read: large lots with teardowns) in areas where reforms allowed the greatest increase in density increased by 22% over six years, while the upzoning premium decreased with increasing intensity ratios (for example a lot that already had apartments on it). The same relationship held but was less pronounced in areas where there was a smaller increase in permitted density, and there was no relationship where zoning didn’t change (some heritage protected areas). Interestingly enough, their results indicated that highly developed lots actually decreased in value relative to the control areas, likely because they became less attractive as targets for redevelopment.
These results are interesting not because it tells us anything about the magnitude of land lift that we’ll see here (no reason to expect it to be the same), but the distribution. Lots with little land value in areas where the gap between current zoning and future zoning is biggest are likely to see the most upward pressure in value. That goes beyond the Small-Scale Multi-Unit (SSMU) reforms to the Transit Oriented Development, but also the long term plan to align zoning with Official Community Plans, all of which loosen restrictions on land use.
It’s also worth noting that the same author found in a 2023 paper that the increased supply from the reforms reduced rents between 14 and 35% relative to the counterfactual.
In the end, these reforms (if they work) mean more multifamily less single family housing. That means the the transition from single family to multifamily housing will accelerate, which will increase the gap in affordability between the two as single family becomes less affordable and multifamily more affordable. The picture for single family values looks rough in the short term while rates are high, but if you are on the verge of getting into one I would think about not waiting too long, as the reforms may put a higher floor under prices than we may have had before.
Also the weekly numbers
| November 2023 |
Nov
2022
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 66 | 152 | 230 | 328 | 384 |
| New Listings | 192 | 429 | 612 | 793 | 785 |
| Active Listings | 2722 | 2743 | 2744 | 2680 | 2111 |
| Sales to New Listings | 34% | 35% | 38% | 41% | 49% |
| Sales YoY Change | -5% | -3% | -3% | +0% | -41% |
| New Lists YoY Change | +12% | +14% | +19% | +15% | +13% |
| Inventory YoY Change | +25% | +25% | +28% | +26% | +138% |
| Months of Inventory | 5.5 | ||||
The surge in new listings seems to be tapering off for the time being, dropping back closer to the year ago level, though we are still ahead 15% for the month as a whole. Meanwhile headline sales will end the month at the same level as last year even while resales in the core lag somewhat.
There’s some decent offers being accepted especially in the single family market. After October is when we tend to see a greater proportion of sellers being motivated and willing to compromise more on price. That’s happening now, with conditions very similar to this time last year and the average house sale going for about 3% under the last asking price, and 7% under assessed value. A substantial drop from October when they were still selling at full assessed value on average. Part of the drop is seasonal, potentially from a shift in mix of the types of properties sold, but weak demand is certainly also factoring into it. Well take a look at the final monthly numbers when they’re released on Friday.
The were, because most of their voters benefited from higher prices. That’s flipping.
new post: https://househuntvictoria.ca/2023/12/04/november-opportunity-knocks-softly/
100% agree, unfortunately the average voter just doesn’t see or understand this and here we are.
423-409 Swift. Sold $300k.
$50k under assessed, and $45k under the 2018 previous sale price.
Those tax schemes mostly tend to be self defeating of the altruistic goals they claim to support. What are the terms or definitions for best use? When command economy actions such as that are taken, they will typically end in nothing occurring and capital flight. If the provincial government was actually serious about about getting housing built it would get rid of the urban containment boundaries and eliminate the social engineering parts of the cumbersome BC building code. Trying to force the population into housing types they actually don’t want isn’t going to be very successful. What governments don’t want people to realize, is that they are putting in their best efforts at all levels to drive up housing costs (even though they say the opposite).
A good argument (one of many) for broad-based unimproved land value tax. You start paying it as soon as you take possession of the land, so it encourages you to make best use of the land as quickly as possible.
https://www.commonwealth.ca/blog/taxing-land-can-provide-194-billion-for-canadians
Spotify, 17% of workforce just axed.
The Downtown area isn’t very large and there are 188 condos for sale. Last month only 17 condos sold.
According to Craigslist there are about another 160 condos for rent in the downtown core too. Average asking rent is $2,530 per month. At 11.6 months of inventory, that’s the highest months of inventory in over a decade in the downtown area. Last November it was 4.3 and during Covid it was lower at 2.7 and 1.3 MOI.
But as Leo said, the small micro condos are holding pretty steady and I think that’s because someone renting downtown sees an opportunity to purchase a micro suite and come out close to even to that of renting. Since these vacation rentals are not displacing a long term tenant, I expect the vacancy rate in the downtown core to increase.
I doubt that someone buying downtown is going to get a steal of a deal -yet. The agent just has to drop the price slightly to say 5% under assessed value and they still will get interest.
Details please?
God I hate posting links to prove a point but: https://www.telegraph.co.uk/money/property/buy-to-let/avalanche-landlords-sell-tax-breaks-cut-half/#:~:text=Landlords%20are%20rushing%20to%20sell,allowance%20stood%20at%20%C2%A312%2C300.
LMAO, something similar coming to a Canadian city near you prior to the election??
56 active short term rental listings. 4 sold since rule change. The first three sold for amounts which I’d classify as nearly indistinguishable from their pre-regulatory change value. The last took a serious haircut.
This is the kind of boots on the ground observations that make HHV a good discussion forum for those wanting to get a sense of the current temperature in the market.
We are starting to see some big companies cutting jobs , so another good sign higher interest rates are working . Lots of chatter about bringing them down but much too soon in imo
I mentioned it the other day, but I saw one of those newbuilds out in the Westshore advertising 3 months free rent with a lease, which was common in the last “soft” market. Makes sense to me that landlords would prefer to structure discounts that way.
798 Linkleas up for 1.499 today last sold in June 2023 for 1.135 seems like a candidate flip to go the same way of 824 Monterey.
Are they being fully rented at the rents they are asking?
No relief for renters in those purpose built rental buildings in Langford as the rents are just as high as in Victoria.
One would think that these rental apartments should be lower as they have more vacant suites and renters would have the additional costs of commuting downtown.
It’s possible to buy a condo in Langford for around $530,000 while in Victoria it’s closer to $750,00 for a similar age two-bedroom. Relative to the costs of ownership, these purpose built rentals in Langford are making a windfall profit.
Could they be price fixing? By as much as 30%????
I don’t mind apartment buildings getting a good tax rate but I think that property tax advantage should come with a clause of maintaining a high occupancy rate.
San Antonio tiny homes
I expect those tiny homes would sell like hotcakes if you could build them here at that price. They even have the obligatory granite countertops!
They are quite small, though.
Exactly right. A bigger payoff from working, a smaller payoff from holding RE.
If you’re a builder then you’re caught between a rock and a hard place. While finished home prices have come down a bit, that doesn’t mean land developers are lowering their lot prices. Profit margins have therefore shrunk.
The lot prices in south skirt mountain have gone up since the end of 2021, not down. Until more phases are opened, not much one can do as land developers are unlikely to lower their prices until the current phase is close to sold out. The same for Royal Bay.
You’re paying more per square foot for land in some of the better areas of Langford than for a lot in Victoria.
There is land available it just isn’t being released by the developers. So there is, in my opinion, an artificial shortage of building lots.
You have to wait until it’s implemented by the munis into zoning. The deadline for that is June 30th, 2024, but munis can ask for extensions.
The flip side is that there is no state income tax (only Federal) in Texas, just like Washington, Tennessee, and Florida, among others. This saves up to 7-15% of your income so lots of people have been moving to these states after Covid.
Large GCs are definitely competitively bidding on jobs they would have turned away in the past, don’t have much insights on subtrades though but I assume the larger ones are trending down too. Anecdotally the people I know doing renovations on their own homes have experienced much more interest from contractors than a year ago, so curious to see if other’s are seeing the same.
Don’t we have a couple of GC’s and consultants on hhv? What are your experiences currently?
I don’t know anything about the IT job market but trades are incredibly sticky on the way down. I have a friend sitting on a vacant lot right now as he can’t make the numbers work to start construction and whenever a subcontractor (electrical, plumbing, finishing, etc.) that he has used before phones him he proposed the idea of them taking 10% off the last home they worked on for him (at peak construction prices) so he can create a 10% profit margin and no one is remotely interested yet. Common rebutal is “sorry all my employees are complaining about cost of living, etc., have to pay them fairly don’t have room to drop.”
Here is what Bill 47 says:
So the details are to be prescribed in the Regulations, which haven’t been made yet. Have to wait and see.
Don’t forget the impact of Texas’ high property tax rates. Total tax rate in San Antonio is 2.69%.
https://www.satxproperty.com/property-tax-rates/
wasn’t directed at healthcare ranks but white collar/IT ranks and also trades.
Can someone explain what a “Transit exchange” means in reality.
My understanding is that it is not just a property on a main road such as hillside. But I don’t know.
And what does it mean if properties get placed on hold until everything is clarified?
Does anyone have any idea of how the building permits will work with the new housing rules?
For example: If you own a large enough lot now and the new rules will allow one duplexes with a suite in each one….and the rules do not kick in until the 23rd or so of June2024…. can you submit your plans earlier than that or do you have to wait until June 23rd?
I would hope one could start the application process right away and get all that out of the way for a start in June 2024.
Otherwise it seems like 6 months of waiting and then having to wait while the plans get approved. And then the time it takes to build the duplex with the suite.
Anybody know the answers to these questions?
Thanks.
Not seeing this economic cycle in day to day life. Phoned South Island Mechanical to do an annual service on my heat pump and the soonest appointment was in two plus months. Then phoned another company and it was three months, lol.
Also, I started working at VIHA in 2007 left in 2011 and keep in regular touch with friends there…..short staffed has literally been an ongoing issue since I was there in 2007. Even during the financial meltdown I remember picking up a lot of overtime, as a casual.
So somehow I doubt this “economic cycle” will replenish the healthcare ranks.
Not that ones I know. You don’t leave a $100k/year ICU nursing job to make $110,000 in real estate. Maybe there are more nurses in real estate that I don’t know that aren’t doing well in real estate.
I think we will lose approximately 150 real estate agents in 2024….like maybe we drop from 1650 to 1500 but it is going to be agents returning to 40k-60k/year jobs they previously had, not 100k/year jobs, for the most part in my opinion.
https://www.theorca.ca/commentary/rob-shaw-timeline-for-bcs-new-housing-initiatives-poses-challenge-for-province-7919811
Just part of the economic cycle. From what I see, the job market has shifted dramatically in the past 8 months, something I have posted numerous times in the past. It’s much more significant than what shows up in the stats
Ironically a number of those nurses are in the process of coming back now.
But somehow people believe that the townhouses that cost $185k are some undiscovered secret in housing affordability. Nope, just combo of enough housing to meet demand, not a lot of demand, and older housing in a place like that gets cheap.
We have these exact San Antonio homes in Victoria….nothing new. Except they are 5x the cost.
https://www.realtor.ca/real-estate/26261050/3201-kettle-creek-cres-langford-langford-lake
Sounds like Canada. Why do people always bring up the US, literally the worse two tier system in the world.
I do agree that we need more medicial and nursing schools but I am now counting 11 respiratory therapist including myself that have switched careers since I left the ICU. A ton of nurses as well….a number of real estate agents in Victoria are actually former ICU nurses.
More compensation/opportunities in a two tier system/etc., solves a lot of these problems.
Who want to work in health care right now? You are making the same amount as the tree conservation officer at the City of Victoria working nightshifts in a stressful environment with people protesting outside of the hospital about vaccines…..like you kind of have to be dumb to work in health care at the moment, hate to say it.
Interesting Article on comparing European and Canadian health care. Lets look at Norway for answers.
https://www.ctvnews.ca/health/health-care-in-canada-could-be-more-like-norway-s-with-some-improvements-study-1.6670623
Dee: In order to avoid the “everything here is better than in the US”, perhaps we can look at the health care structure in Switzerland. There is an obvious problem when over twenty per cent of the population cannot find a GP.
As for the San Antonia example, I believe the point being made is that single family homes can be made for a fraction of the cost that it costs one to buy them here. P:erhaps trying to see if there are different strategies that might improve things is a bit more productive than telling the younger generation to suck it up and live in a box.
People are dying in emergency waiting rooms waiting for care in Canada. A simple $50 user fee would cut demand in half. That’s 2 packs of smokes. Lots of “needy” people have money for their bad habits.
I’d rather live in a box in Victoria than in a detached home in San Antonio.
As for two tier medical, I don’t want it. People with funds can travel to the US as the lady in the TC article did. The problem in Canada is lack of resources and it makes no sense to me to create another tier that would siphon resources away from the public one. I’m very happy that the woman in the TC article got the treatment that she needed. At the same time Im under no illusion that so many Americans would not have access to that care. People in the US die every day from preventable diseases and causes for which there is a treatment but people cannot access it due to funds. It’s a disgusting state of affairs down there. A lot of the arguments for private healthcare sound like people saying “but I’m too rich to die.” Ok, then go to the US where you CAN skip up the front of a very short line since barely no one can afford or have access to these life saving procedures. I do not want anything that even remotely resembles that system.
2 tier only sucks for people on the bottom of the totem pole. Majority of people with decent jobs would likely have that covered under their benefits anyways.
I would be happy to have a 2 tier system, I’m already paying so what do I care . I feel sorry for young folk who have never had a doctor.
New detached homes for under $160,000
I’m sceptical. I believe the next election will go like this:
Trudeau will accuse Poilievre of being a racist, sexist, misogynist, etc., and the woke will vote for Trudeau and feel like they have saved the country.
Then, Trudeau will tell young people to smoke a joint and think of him when they vote. And they will vote for him.
Are voters that dumb? Well, yes, they are.
If its going to be private health care I want my taxes cut in half.
You’re talking about total private “health care” spending which isn’t the same as “private medicine”. I’m referring to private medicine, We spend almost nothing on private payments to physicians, compared to other professionals like dentists, optometrists, and physiotherapists. Our spending on private payments to physicians is the grey line flat lining the bottom of this chart. BCers don’t have signs on their yards about wanting better drug plans and more access to physios , we want better access to physicians, and privatized medicine is part of that solution. https://www.statista.com/statistics/436574/private-sector-health-spending-canada-on-professionals-by-type/
If my dog gets sick tonight, i can get him treated immediately . I’d like the same type of quick access that he gets, And if the government Medicare system can’t make that happen, then let it be a private medical clinic.
But private health care spending in Denmark is much lower than in Canada. 16% versus 30% of total health care spending. Their public health care is carrying a bigger burden than ours. Seems to me that if in fact their health care system works better, it’s because the public heath care is run better, not because of some private facilities that apparently are lightly used.
I know I’m going to get some flack here, but they should remove vaccine mandates for nurses, doctors, and all health care workers I think that would really help.
They would just favour the private pay clients…It wouldn’t be fair.
We need innovation in health care. The system is not incentivized for this.
While I’m in favour of universal free health care, if it is not working something needs to change. Hate to see anything similar to the US but a small income-based co-pay and some private pay options might be helpful. We’d need to amend the Health Care Act to do it. Government (feds and provinces) need to get it together re. practical solutions modelled on what works elsewhere and institute fiscal and systemic reform. Identifying how we got here would be a good first step.
I was once told not to discuss religion or politics…I am not trying to coheres anyone into anything.
Its a non confidence vote all parties Lib, Con, Ndp… the house of commons.
I think that’s about as democratic as we can get.
One more time.
By the way I have very little doubt that Poilievre will be our next prime minister. But CPC != PPC
I did. I would describe that sentence as effectively using hyperbole to make a point.
It’s frankly crazy that social conservatives are starting to capture votes from the most far left political demographic in the country, but this is where things are in 2023.
A bull- eye from Patrick.
The entire population suffers in order that a few ideologues can strut and preen their socialist principles. That is a very poor reason to have your toddler (and tens of thousands like him) wait 4 months to see an ENT specialist.
Only one solution (as is in all cases of reduced supply in the last 170 years): unfettered capitalism.
The “elephant in the room” in terms of difference between Canada and Denmark healthcare, is that Canada outlaws much of our private medicine, such as paying your own private doctors, specialist, clinics and private hospitals . And Denmark allows all that. Simply described as “Taking out private health insurance [in Denmark] covers treatment at private clinics, physicians, specialists, and private hospitals. https://www.internations.org/denmark-expats/guide/healthcare#:~:text=Denmark%20has%20a%20mixed%20healthcare,public%20and%20private%20health%20institutions.
Read that sentence again.
Despite the PPC being far right socially compared to nearly everyone in Canada, they’re on the way to a win in the next election. Gen Z and Millennials are leading the charge in shifting support.
Surprised? Don’t be: economics trump social policies in a crisis.
Polling is quite clear on this: https://beta.ctvnews.ca/national/politics/2023/8/30/1_6539949.amp.html
The reality is that if the Liberals win the next election despite maintaining disastrously high housing targets, it will be on the backs of staunch support from majority home owning older Canadians.
Denmark appears to be very much like Canada – universal public insurance supplemented by private insurance for ancillary services. Private expenditures for health care in Denmark, % wise are actually smaller than in Canada – remember they include drugs and dental care.
https://www.commonwealthfund.org/international-health-policy-center/countries/denmark
Next up on Jeopardy…
I’ll take how democracy works for $400 Alex.
The answer is… “by limiting most missing middle to three tall units.”
Patrick buzzes….
“What is …. How did New Zealand government achieve their huge growth in builds of walk up townhouses?
You think the PPC is going to win the next election? They are the only party (apart from the BQ in Quebec) that wants less immigration. None of the provinces (except Quebec) want less either.
Just maybe, you might get one or more of the other parties to advocate cuts in non-permanent residents. Fact is Canadian elections are won in the suburbs of Toronto and Vancouver.
“adopt some of the things that are working in South Korean, Japan, Taiwan or Denmark”
You mean like having a government insurance system but also a vibrant and unencumbered private health sector? Bring it on.
Because that’s going to go over well. Perhaps instead of harassing individual home owners they should consult the local economists about what is going in.
In other news, Andy Yan is busy shocking housing planners from California about how Canada’s distorted population growth relative to housing supply is driving some of the most insane markets in the world: https://vancouversun.com/opinion/columnists/douglas-todd-californians-taken-aback-by-vast-gap-between-wages-and-housing-costs-in-vancouver
Meanwhile the sitting government believes they have enough political support to keep doubling down on their disastrous rapid population growth strategy. So far they’ve managed to tank both per capita GDP and housing affordability, and yet our demographics are still aging…
Apparently they think admitting the flaws of a policy and changing course when its effects are clear is bad politics. Personally, I prefer politicians who can adjust course to those who always stick with their guns. We’ll soon find out if our Canadians agree.
Like housing , health care solutions and action is just chatter in Canada
I’ll take that’s not how democracy works for $500 Alex
I really do not understand why the health care system has become so bad in this country. May be start by building and funding more medical and nursing schools. Simply transfer funding more the bloated humanity departments at the Universities. Do we really need a thousand PHDs in sociology?
You can’t get people to work in the dangerous environment in our hospitals. The violence is incredible, primarily from drug addicts. There should be a separate system for treatment of these addicts. They are what is tying up valuable resources for people with legitimate health needs, not problems that are self inflicted. I do not want my tax dollars wasted on them, there should be a separate system funded by those who want one. Some of them are in emergency weekly, according to people I know working directly with them. Our system isn’t broken, people in this country are.
You guys need to sign this petition if you want change…
https://www.ourcommons.ca/petitions/en/Petition/Details?Petition=e-4701
For starters fire Bonnie Henry.
Yes, absolutely agree. I don’t consider this a partisan issue, and I agree that we need to try some new approaches that are working in those other countries. We need more doctors, nurses, nurse practitioners and of course more money. Other than that, all the countries you mentioned have some private medicine and/or user fees? Do you see those as part of the solution in Canada?
Chatted to a respiratory therapist friend yesterday and he worked his last shift this past week. Frustrated with health care and going into another non-health care profession, can’t blame him I did the same thing. As a society we can either put our resources (and Canada has plenty) into more bs government positions or tangible health care positions. I would prefer more nurses/doctors versus government workers administering the non-sense owner builder exams, tree conservation officers delaying construction over branches, etc.
Just on the federal level….There were 336,000 federal government employees in 2022, up from 257,000 in 2015 — a 30.7 per cent increase. Did the population grow 30.7%?
BC and municipal governments probably even worse. BC Government created 203 positions this year to “fast-track permits” hmmmm how about makes things less bureaucratic to fast track things and hire 50 doctors instead. Just a thought.
https://www.tiktok.com/@officialprofpeterstonge/video/7302597120899419435?_r=1&_t=8hs3XvJMPhN
Unbelievable the state of health care in our province. Should be a pants on fire emergency as it impacts everyone. Other countries do it way better for lower cost. Not sure why we can’t adopt some of the things that are working in South Korean, Japan, Taiwan or Denmark.
https://www.timescolonist.com/local-news/saanich-woman-with-stage-4-cancer-turns-to-us-for-200k-treatment-after-delays-7914815
Frank agree it should be sewer gas if it’s a plumbed floor drain with a p trap . If it’s a perimeter drain hookup then it would pu the oil in the ground. I have seen both in Vic . There should be no reason other than a break for ground water to get into a plumbed system .
LOL, why do you feel compelled to respond to a comment that wasn’t even directed at you and do so like a 10 year old: “says the guy….. blah blah blah” LMAO.
Buddy get some therapy and a life outside of hhv before it’s too late, trust me it’s for your own good. I got “insider contacts” that can help you with that too if you need 🙂
The guys that removed our oil tank pointed out that the fuel lines connecting the tank to the furnace can be underground (even when the tank is above ground), and if they don’t get blown out they can cause leaks/smells. They said these are often forgotten about/ neglected. Likely not your issue but thought I’d mention it. Hopefully it gets resolved!
That’s basically sewer gas.
It was pretty gross for a couple days but now we finally discovered it was coming from the floor drain (trap was dry) we fixed that so all good. Reported to MoE
Damn, Leo. Sorry to hear this. Are you worried about your air being unhealthy when the furnace is running?
No party at Leo’s.
The builder on finding the tank and removing it would have had an engineer make tests to determine the level of any contamination. From memory I think an amount over 100 liters has to be reported.
Thanks, that’s the most likely theory now. Neighbours oil tank was taken out recently.. Who knows what happened to the oil that was left in it.
As the kids say: sus
Hmm well your floor drain is likely clay or cement drain tiles and they would have been spaced about a 1/4 inch or so . You might have some oil contamination from the property next door that is finding it’s way into your perimeter drain
Damn, you beat me to it.
Leo, do you have any cracks in the foundation walls or floor? It has been raining and it’s possible that the oil from anyone of your neighbors inground tanks could have followed along an underground stream and found a crack. The crack doesn’t have to be large it can be quite small. Or it is possible that you still have an underground tank in your yard that had some residual oil left and the old tank has rusted away.
A long time ago the way they decommission oil tanks was simply to drain them as much as possible, fill the tank with sand and cut the pipe off. Sometimes there can be more than one tank on the property as they installed a new tank without removing the old one. The slip of paper from the Fire Department saying that the tank is inert – means absolutely nothing as it does say where the tank was or if the tank was removed or what process they used to determine the tank was inert.
Are there any vacant houses around you?
Sometimes the oil companies have a contract to supply oil to a home which they do even when the house is vacant and that can cause spillage or if that tank is leaking then the oil company just keeps filling it up. For example, there was an old farm house on acreage that was vacant and it had an oil tank in the basement. The tank leaked and the oil company kept filling it over and over again as well as the basement with oil. The oil found a crack in the foundation and migrated to a stream and contaminated half a dozen acres.
You may have to have your property scanned for an oil tank.
Possibly. We never scanned for a tank
Very far away. Haven’t smelled anything like this in 10 years.
We may have solved the mystery though. The neighbour 2 doors down has the same smell. In between us is a house that had oil heat that was just sold and undergoing a complete reno. Oil tank was removed, and the smell seems to be coming from the floor drain of our furnace room…
How close is your roof top fresh air intake to your neighbours roof top vent stack for their oil furnace? Is the smell only occuring seasonally with cold weather? Does it seem to occur irregularly such as with the wind direction?
My parent’s condo built in early 70’s had an underground oil tank buried underground in the front of the building.
It was decommissioned many years later and an above the ground oil tank was installed. Is it possible that your Gordon Head area house initially had this?
“I think Max has started already ”
I’m just an average ordinary Dude. 50 years old, I worked hard, I’m tired, I met my girl at 17 years old, after 33 years of courtship we are happily married, We are In the middle of raising 2 teenage boys 18 and 14 and we are just happy to live where we live. My Wife and I have been in this house for over 2 decades. I really don’t care about land lift.
Here’s a house puzzler for you.
We have a heat pump and a natural gas backup. Gas furnace is from the late 90s. Heat pump has been in place since 2009.
Suddenly after the furnace running for a couple hours two days ago, there was a super strong smell of oil/diesel in the furnace room.
Furnace tech out, zero issues with the gas furnace or the heat pump. No refrigerant leaks. All working fine. He immediately recognized the smell as heating oil or diesel though, zero sign of any oil anywhere.
Above ground oil tank was removed a long time ago, certainly well before the 10 years we’ve been here. Neighbour has an above-ground tank still in place, but it’s a good 30-40ft away from the furnace room. No gas or oil or diesel in the house since we don’t even have a gas lawnmower.
What the heck??
I think Max has started already 🙂
Where’s the HHV Christmas party this year? It could be very entertaining.
B.C. uses new law to demand house owners explain where they got the money to buy it
https://vancouversun.com/business/bc-seeks-first-ever-order-to-explain-wealth
your a troll.
… says the guy who also complains today that, despite his successful muting, he’s still bugged by “ Every other comment on HHV these days”
That’s if we are to believe that he actually mutes anyone, instead of just talking about it.
Methinks he (like other HHVers) can’t resist the forbidden fruit, and has discovered that the un-mute button works equally well.
I don’t think this missing middle thing is going to work…nobody wants to sell SFD and home is where the heart is.
VicREanalyst, if I may give you a suggestion…..the mute button works really well 🙂
If BC had followed New Zealand’s current rules (MDRS), we would be seeing lots of townhouses with street access, typically have 3 dwellings per unit max, and only 50% lot coverage, so lots of green space. Instead, in BC we allow 6 units, with no townhouse requirement in many cases
What the BC missing middle housing advocates don’t tell you about the Auckland experience, is that Auckland and the rest of New Zealand moved to a standard called MDRS, applying in Auckland and throughout New Zealand. This is much more restrictive than our B.C. missing middle, which allows 4-6 dwellings. For example Victoria allows 6 dwellings (with no townhouse expected) in their “houseplex” model, and only a corner lot is expected to have any townhouse. https://www.victoria.ca/media/file/land-usesschedule-ppdf
The New Zealand 2022 plan typically allows for a maximum of 3 tall (11m) dwellings, and only 50% lot coverage. What that means is tall 3 story townhouses, which is exactly what New Zealand got.Something like 60% of new dwellings are street accessible townhouses – awesome!
Anyway, I love the New Zealand idea which, by limiting lot coverage to 50%, but allowing three tall 11m dwellings, insures lots of townhouses get built. They do have a separate area near transit that permits 6 storey apartments too.
Here are the details of MDRS and how it limits to 3 dwellings
https://catobolam.co.nz/news/mdrs-new-housing-rules-auckland-intensifies/
As a side note, in October 2023 the election in New Zealand brought in a right winger who may scrap the idea or at least allow cities to override it, bringing them back to square one.
I am confused by the missing middle product discussion. The product itself has existed in Victoria since the mid-1990s in the form of heritage strata conversions most often found in James Bay, Fairfield, Rockland and Fernwood ranging from 3 to 6 units. I’ve had many clients over the years buy into these stratas and sell as well. Obviously there is a market for them.
The only difference I can think of is missing middle product will be better in terms of floorplans, etc., as it will be built from scratched versus a gutted and lifted old house. The only other difference is one required a re-zoning and missing middle doesn’t require a re-zoning.
I imagine the ground floor units in areas like Fairfield will be very popular.
I have a couple of good Croatian friends in Victoria working as highly skilled trades people. One has been here on work visas here since 2015 (minus one year working in Munich) and other since 2017 also on work visas. They’ve had no luck with permanent residency and no luck getting drawn through the provincial nominee program. They both work for large local construction companies and have received promotions over the years. Seems strange in a housing crisis. On a side note, they do speak English 🙂
If government was trying to solve problems they would look at these applications and be like “okay, this applicant has worked for Campbell Construction [for exampme] for 4 years we are going to send an immigration officer to the site to talk to his foreman/superior and if everything checks out were are processing the application.”
Unfortunately person making the decision is sitting in an office somewhere adding up “points.”
I put up a re-zoning notice sign yesterday (not to be confused with a for sale sign). Don’t worry, I am not bankrupt quite yet.
As for the homeless problem, This is already costing the tax payer a lot of money. If this is costing the taxpayers a lot of money and not working, the taxpayer needs to find a better way of spending this money at the same time fixing the problem. I say we round them all up and incarcerate them for a minimum of 24 months.
This will clean them up, sober them up. We will feed them, give shelter, clothing, medication. They can read books, educate themselves, Find their selves…get back to normal. I’m sure this would be much more cost effective to the taxpayer, at the same time getting people back on their feet.
Also, when our food banks can barley keep up with demand…I think its time to put the brakes on immigration.
I could see 50 year amortization becoming a thing, Federal election coming up, banks are in the Feds pocket.
My Sister is a Realtor and she is hurting right now. I think the jig is up for awhile. price acceleration has plateaued, everything is just on pause.
Ya wouldn’t reducing real estate commissions be the low hanging fruit to make homes more affordable hmmm
There is always going to be divorce or whatever bringing houses to the market, for the most part…the vast majority are just fine with living in their house.
Just too bad we don’t have antitrust laws in Canada. They would quickly do away with dairy boards, how Canada’s telcos and banks operate, ICBC and how government manages winners and losers in healthcare. Alas, it just doesn’t seem we have the stomach for the freedom stringent antitrust legislation would bring.
“Max,
In case you missed Leo’s table above, there are 2680 active listings, up 26% since this time last year.
You’re telling me these homeowners don’t want to sell?”
Then buy one.
And here’s a good little listen:
How much should realtors take home?
https://www.cbc.ca/listen/live-radio/1-379-cost-of-living/clip/16027318-how-much-realtors-take-home
cc: Barrister
Antitrust class-action lawsuits against realtors are happening in the US, and they’re coming to Canada too!
US home brokers face new lawsuits after $1.8 billion verdict
https://www.reuters.com/legal/litigation/us-home-brokers-face-new-lawsuits-after-18-billion-verdict-2023-11-03/
U.S. realtor commission ruling sets ‘blueprint’ for Canadian case: lawyer
https://www.bnnbloomberg.ca/u-s-real-estate-commission-lawsuit-could-influence-canadian-practices-expert-1.1999698
Most of the peasants’ comments do not please Marko the Great.
“Affordability is not on the menu.”
—Tom Davidoff, UBC Centre for Urban Economics and Real Estate Associate Professor
Greg, if more land was opened up for development, then the cost of land would drop substantially.
The artificial supply constraint is something the zealots always ignore.
Greg,
That seems very do-able now. There've always been townhouses available in that range.
Gregonomic: Maybe not your cup of tea, but a corner townhouse at #1-2715 Shelbourne has a pending sale right now at $675K. Originally asking $719,900. Three good sized bedrooms up with two full baths (one ensuite). Main level is open and bright and has many windows. Living Room with fireplace, Dining room, Kitchen with eat up counter powder room. All new flooring. It also has a garage, balcony and a fenced/hedged garden/yard.
I knew a couple with one child and a dog that used to own there and they absolutely loved it.
Patrick,
I’m not sure what problem you want to solve by freeing up land in the boonies. You still have the same problems:
* sky high construction costs
* lack of efficient mass transit / commuter corridors into the city
* lack of other infrastructure
As with the missing middle problem, there are a myriad of other problems that need to be solved before it even starts to look viable.
Besides, there are already a bunch of freehold SFHs for sale on the outskirts (close enough to the boonies to qualify as such) that aren’t selling.
He said the “bulk” of homeowners – presumably the majority – don’t want to sell.
But that’s true everywhere, all the time. Up markets, down markets.
They can, of course, but won’t for some reason.
Max,
In case you missed Leo’s table above, there are 2680 active listings, up 26% since this time last year.
You’re telling me these homeowners don’t want to sell?
Marko Juras
“Any stats on how many % wise permanent immigrants are employed in construction?”
“Earlier this year, the government announced changes to the express entry system that would prioritize tradespeople for permanent residency. Miller said those changes have attracted roughly 1,500 tradespeople from abroad.”
Source: https://www.cbc.ca/news/politics/canada-immigration-targets-1.7015304
I’ll answer your question, Patrick.
We’re looking for a townhouse / duplex in the CRD. Our wishlist is:
* 3 bdrm minimum
* off-street parking / garage
* close-ish to schools
* Cedar Hill / Gordon Head / Royal Oak / Westhills / Happy Valley
* up to $750k if in the first 3
* <$700k if further out
I agree that, at current land prices / development costs, there will likely be nothing that meets those criteria in the forseeable future.
For the record, I think more construction is only one of many changes that are required to break this impasse.
As I said previously, the biggest change that is required is in the collective madness around housing in Canada (and, it has to be said, most of the western world).
LMAO the earth is round too.
Look, I don’t know who this other person is but there are over 500 people in my office and I know a few that visit this forum because I’ve heard that discussed in the office before. People are generally impressed by Leo’s analysis (as am I) and we have access the top economists and analysts from around the world on a on call basis.
With that said, it is becoming quite clear who you are, you are someone who tries to present himself as some type of philosophical savant on the internet to compensate for whatever it is that you are lacking in real life. I think you sir are a lonely soul who has to resort to HHV as their sanctuary in order to escape their unfulfilling reality, or in other words, a loser.
All that is fine but the issue is that you contribute absolutely nothing of value in your posts because all you know how to do is post links all day when getting into debates with other people with more intimate knowledge and try to make yourself look credible. You have no personal experience, boots on the ground insight or “insider contacts” you are able to call on in your posts. This is especially evident when you try and challenge Marko’s own personal experience regarding building permits (someone who has done builds, documents them publicly and has videos helping others) with some link from Saanich. What if I told you that Saanich itself cannot even get the permit right to build their own infrastructure?
P.S. You need to address me as “sir” going forward, because that’s how people like you address me as in real life, usually followed by trying to strike up a conversation and then trying to hand me a resume or something to that effect.
Case closed, end of discussion 🙂
Patrick , I agree the missing middle crowd will say there’s huge pent up demand or maybe that the ndp policies are why prices are coming down . Blanket zoning is not going to make houses affordable or plentiful , it’s a just a Hail Mary
There are about 550 freehold strata homes for sale in the Victoria Core compared to 373 detached homes. Strata homes are 60 percent of the market for housing. I think we would get more HHV readers if we spoke more about strata homes than detached.
So I’ll start. The downtown condo market is in trouble. There are about 190 condos listed for sale within a half kilometer radius in the down town area. Only 17 sold last month. Median sale price was $490,900. In November there was 11.6 months of inventory in the downtown area for condos. And according to Craigslist there were another 160 condos up for rent in the same area.
Asking rent for a 357 square feet studio in the Hudson starts $1,415 per month and there are a lot of suites available in the complex. And it is take longer for them to lease up. It seems the purpose built rental buildings are being aggressive in their pricing under cutting condo owners by $150 to $200 per month. That makes it challenging for those with a condo to rent.
When I spoke with U-Haul a month or so back, they told me that their business moving people from Victoria to up island has been increasing.
Those that were using downtown condos as vacation rentals might be getting into financial problems as these rentals were heavily mortgage. Too many condos for sale and too many for rent. So we might see a donut effect with the downtown suffering higher MOI and vacancy rates while the outer areas are more stable.
gregonomic, The bulk of the homeowners In the Victoria area simply just don’t want to sell…That’s your problem.
Agreed. Can’t the government free up some land somewhere in the boonies, and sell it cheap to developers for specific housing types that families want – freehold townhouses, and detached houses?
If you say “Thanks for the discussion”, it means you’re done, it doesn’t stop anyone else. I’m still going 🙂
No-one wants to buy missing middle for the same reasons no-one is buying much of anything these days.
It’s the prices, dummy.
Another new listing on Sarita looks like an estate sale, in total three estate sales within couple blocks. This may be the new trend in Gordon Head.
Did someone miss the “Thanks for the discussion”?
I wasn’t meant to be a landlord. A guy I went to school with Grandma died. She left him the house on the corner of Sooke road at Wale road. He sold the back half to a coop gas bar, now leases the front part of the lot to Tim Hortons, Wendy’s and others for a 100 grand a month.
There is money in being a Landlord.
There plenty of house hunters here. The “what did XXX sell for?” crowd for a start. Not a single one seems interested in buying to occupy a missing middle multiplex unit.
No response isn’t “case closed” but it is a red flag for questionable demand for house hunters buying missing middle to occupy.
Add that to other red flags
– close to zero applications in the first 6 months after city approved them.
– whatever’s analysis showing existing revenue missing middle buildings not selling at prices lower than new missing middle costs to build.
—-
Given these red flags, and lack of “missing middle” excitement… maybe the missing middle advocates will switch the narrative to “rentals of any kind are awesome and a sufficient reason to tear down SFH across the province!”
I have a 2 bedroom suite down stairs, the last time I rented it was 18 years ago…and I’ll never do it again. Its now my man cave.
Greater Victoria has a ton of existing missing middle homes that were built pre 1980. The problem is that few are up for sale. There is a bottleneck in existing housing as those that bought their homes 30 years ago and raised a family in them and are now retired and are choosing to age in place. And the government has programs such as deferring property taxes that make it possible to do so.
A home that held 6 people 30 years ago now only has one or two people living in it. And most of these home owners that have a suite in the basement are not renting the suite as they don’t want a stranger in their homes.
But this will end and a decade or two from now a lot of these missing middle homes will be steadily coming back onto the market. The current owners no longer being able to physically and/or mentally maintain them. But that isn’t going to solve the current crisis.
The current higher interest rates have changed a trend that has been happening since about 2015. The children of the parents that could no longer manage their homes were choosing to keep the property as a rental. That seems to be changing and I now see more Estate Sales on the market as the children are taking the proceeds of the sale perhaps to lower their own mortgage commitments.
None of the 50 or so regular posters on HHV, most of whom are boomers or X and already own homes have piped up. Wow! Case closed! Thanks for the discussion!
Patrick, this site attracts “House” Hunters, could it be that folks hunting for townhouses, multiplexes, and other such units do not frequent HouseHuntVictoria?
Exactly, and they had better make it good, or I ain’t budging.
So if u own a single family you won’t be chomping at the bit to sell , cause your ship just came in . Single family home people will just sell to other single family home people , doesn’t sound like a whole bunch of missing middle will be built . Government or industry are going to to have to incentivize home owners ,cause what’s in it for me .
Its the governments fault housing is so expensive, taxes alone are a death blow.
Thanks. That’s great analysis you did Whatever. It is rare to see detailed analysis with current examples and prices in the comment section of HHV, but it is much appreciated! And you certainly make your point.
I agree, the builders won’t build them. Which works out well, because I don’t think people want to buy them either as separate units to occupy.
We have yet to hear from a single millennial that wants to actually buy and occupy one of these expensive missing middle multiplex units .
It seems that “missing middle” suffers from “missing millennials” 🙂
If the government wants affordable missing middle multi plex’s cut the taxes, municipal fee’s, water/sewer hookup, and any other red tape involved.
I don’t even care if there is a land lift, at least its there.
There are 10 four unit multiplex buildings for sale in Victoria that range in price from $1,475,000 to $2,695,000.
A side by side duplex with two lower floor suites in Esquimalt at $1,475,000. This is a 3,500 square foot residence on a 7,000 square feet lot with three out of the four suites updated. All are two-bedroom suites. This has been listed for sale for two months now.
At the upper end is a four suiter of some 4,550 square feet on a 5,000 square feet lot in Fairfield asking $2,695,000. Building is described as “meticulous” The suites have all been updated to modern standards. It has been listed off an on since 2017. The current listing is now two months old.
There has only been one sale of multiplex residences in the last six month at $1,560,000. Described as a meticulously maintained legal four-plex property in Oaklands. The building is 3,700 square feet on a 13,000 square feet pan-handle shaped lot. Gross income of $96,700 per year.
My opinion is that multiplex properties are not going to big sellers in Victoria. The best that you’re likely to get for these properties is between 17 to 20 times gross income. And the rents that one can get for a new suite are limited as there is a lot of competition in the condo, apartment and basement suite rental markets.
The sweet spot for rental rates is within a five kilometer radius of the downtown core and there are 212 two-bedroom rentals listed on Craigslist this morning ranging from 1,600 to $5,888 per month depending on views and size of the units. And half are downtown. It’s unlikely that you would get the rental rates for a new two-bedroom in Oaklands as you would achieve for a downtown two-bedroom condo. Best guess for a two-bedroom suite in a new multiplex say in Oaklands would be $2,400 a month.
That’s a potential sale price at 20 times gross of $2,300,000. The land and demolition costs will be around a million. That leaves 1.3 million to build at least a 4000 square feet building. That works out to $325 a square feet to build a four suite rental building with four kitchens and four bathrooms. That’s if you can find an existing property with a junker of a house for under a million in Oaklands. That’s a really tight budget. Since most home owners are going to be amateurs that have little experience in project management, my thoughts are that most will go well over budget on construction.
In my opinion, multiplex rentals saving the middle missing is a pipe dream because they are not going to get built. Our land prices for residential are just too high for these projects to pencil out.
If the government wants to get a lot of multiplex housing built then they have to address the high cost of residential land. Solve the high cost of vacant land problem and then the housing problem will fix itself.
If it is like Auckland there will be a smallish premium for larger lots in middle income and below areas where land costs are already lower. Previously upzoned areas will lose their premium. Lots in upscale areas will not be sold for more on average due to people being able to afford and wanting SFHs.
Seems like the same factors apply to carriage houses and secondary suites already.
If I occupy a condo and therefore free up a larger unit, whether house or townhouse, for a family this seems like a plus. If there were more good missing middle units in my area other parents moving into the empty nest phase may choose this in greater numbers. Perhaps even letting their children move into the family homes and holding the mortgage.
In terms of missing middle, of course younger people are going to choose this based on affordability. You don’t have to poll the HHV community, you just need to look at the data that already exists for places like Vancouver and Toronto and Victoria where people are already raising their families in townhouses and condos. Plus.. much of Europe and Asia where this is very common.
So far my take is there will be no land lift when it comes to prices on single family lots , and this appears to be by design. In fact maybe lots for multi family will be less unlike in the past where upzoning brought a premium . So why wouldn’t I just sell my house to someone he needs one and probably get more money . Am I missing something or is the thinking behind these changes flawed .
Absolutely, I’ve already listed seniors downsizing as a useful part of missing middle, when I said “ Other than seniors downsizing and university students/renters , I dont see why we’re building so many units.”
But you aren’t part of the housing crisis, and already have lots of other options. Hopefully we aren’t upzoning the entire province on an emergency basis just to create yet more options for affluent seniors to downsize. I’d love to hear from a young HHVer that will benefit by buying and occupying one of these units.
It is reasonable for a neighborhood to want long term residents, ideally homeowners or long-term renters. This makes for a good neighborhood. So it matters if these multiplex missing middle units are going to be occupied by owners or rented out. Because if they’re not going to be long term rentals, and instead be filled with university students and others lasting 1-2 years and moving on, those would be lousy additions to the neighborhood.
In my opinion its about time rents caught up with homeowner ship, its expensive being a homeowner, a new roof is 15k these days.
I’ve lived in townhouses happily. Also in a walk-up apartment. There are some significant advantages to new builds – and drawbacks if not constructed with adequate soundproofing and at least one parking space.
I personally don’t find living in a large older home to deliver the best in home comfort, and maintenance takes way more time and money. We’ve considered downsizing to a townhouse or top floor or concrete built unit recently and may do this. The lock and go lifestyle is appealing now our children are older, we get out of town for the worst weather, and our children can use the extra space more than us within the next 5-10 years.
In terms of specs – we’d like 1000 square feet, good sound proofing, safe walkable area near our children, and a dedicated parking spot. Not looking into other people’s living spaces is also important – and that may become harder to find. We’d pay whatever the going rate is which appears to be somewhere between 500k-900k.
Even worse. With missing middle – it’s an expensive lunch – and it’s hot dogs!
There is no such thing as a free lunch, If you want shelter its going to cost you big, renting or owning.
For the record, I’m with you 100% on that idea. Of course “mass quantities” means big buildings with lots of units. Absolutely, bring those on. Not these teeny expensive 4 units at a time buildings , when we also tear down a SFH and lose green space.
Even the for-profits like Harris Green are mostly rentals and are good too. Harris Green is 1,500 units in one project! We’d need to tear down 500 SFH and replace with 4 plexes to net a gain of 1,500 units (after the 500 tear downs). I’d prefer just one more Harris Green.
2k a month for a 1 bedroom is the new normal, you just have to work more.
Oh c’mon Totoro. You already own and live in a house, and own multiple townhouses. You hardly qualify as the HHver looking to buy and occupy a missing middle unit. How about you sit back and let an actual HHVer looking to buy and live in a missing middle multiplex tell us that.
I don’t understand your question, please rephrase it.
Rents are not affordable. I’d say the crisis for rental properties is causing significant hardship and many renters will never own. We need purpose built rentals run by coops/societies in mass quantities. This is the most urgent need imo.
It does seem like the new housing legislation is already having an impact on housing approvals in BC. Municipal councils are no longer dragging out the approval process despite neighbors appearing before them with the regular concerns re. traffic/trees/water… This is one example, but I’ve read a number of similar Council decisions recently in various towns.
https://www.pqbnews.com/local-news/wembley-mall-residential-development-green-lit-by-parksville-council-7117433
I’d def live in one but it would need to have dedicated parking. There are many former Airbnb units without parking currently listed in the downtown area and I think that is a tough go imo. However, my understanding is that missing middle townhouses and fourplexes outside of the downtown area are likely to have one dedicated parking spot re. marketability even if not required under zoning.
There’s lots of people here. How about naming who you’re talking to?
Your cries fall upon deaf ears…simply because what you are asking does not exist, and never will. sorry.
Great. Let’s hear from one HHVer who plans to buy a missing middle multiplex unit to live in it. Bonus points if they tell us what specs they’re looking for, and how much they expect to pay.
This is the type of buyer people think there will be and I just don’t believe it.
The reality being, “We are making hotdogs, but people want steak”
To prove me wrong, I’m hoping to see a HHVer post something like this …. “I’m looking for a 2 bedroom multiplex unit to buy and occupy in Fairfield area. Street parking will be fine by me, as long as I’m near a bus stop. I’ll pay $600k
Maybe you should look up Garth Tuner and he can hook you up with a balanced and diversified portfolio then you can just rent a house forever.
These missing middle 4 plex’s you speak of will be sold before they are even built and they won’t be cheap. Not everyone reads hhv.
Wow, I’m looking for at least ONE HHVer, and I hit the jackpot, as VicRE by himself accounts for two HHVers – VicRE and KS112!
But as landlords, unfortunately you two HHVers don’t count, because you’re not house hunting to live in yourselves. As I stated I’m looking for a HHVer that is looking for this dwelling to LIVE in. As I stated “ Would you ever consider buying and living in a “unit” for a long period of time. Or are you like many HHVers looking for a freehold townhouse or a house?”
I have no doubt that ((assuming that many if these 4-6 unit multiplexes are built) the units will sell and be rented and be suitable for rentals. But if a rental-for-all is acceptable, there’s no housing crisis, as you don’t see Leo post charts showing the unaffordability of rentals, and posting weekly summaries of units rented and listed for rent. Who cares about rentals? Sure rents are high, but not crisis level and they’re rent controlled.. The “dream” and “hunt” for HHVers is home ownership, not finding a rental. If all we need is rentals, build towers and leave the dwindling SFH stock alone.
I remain seeking even one HHVer to step up and state that in their house hunt to own and occupy a home, that they’re excited and hoping to buy one of these missing middle multiplex units. And to be clear, I’m not including townhouses, just the missing middle multiplexes, as that’s what everyone is talking about when they refer to 4-6 unit missing middle buildings.
Is Marko’s Colwood development site on Veterans at Sooke road?
I see its up for sale.
First of all, can anyone explain to me why they think that developers will build townhouses instead of just condo apartments on missing middle lots? Building apartments is both cheaper and more profitable. I know the missing middle was sold by telling us it would build a lot of family friendly units but but it seems likely that we will see mostly more condo like small apartments since that is the most profitable.
It is sort of like everyone still just believes the spin that was put out there. If the city (and the developers) actually wanted to build duplexes and townhouses they would have limited it to those two. What we will get is mostly more little condo apartments because that is what is most profitable.
https://www.theglobeandmail.com/business/commentary/article-the-professional-airbnb-landlord-class-is-simply-the-worst/
If the cashflow works I’ll buy one or more to rent out. Marko’s looking for some to develop and rent out long term so he’ll probably buy too if the numbers check out. Then there are all the people who have bought and live in townhouses currently. HHV is a small subset of the Victoria population, guess that didn’t show up on your Google search?
I thought I’ve been clear on that. I’m looking to hear from ONE person on HHV that is actually looking forward to buying a missing middle unit. I don’t think there are (m)any, but hopefully you will prove me wrong. Since you (as a thirtysomething prospective homebuyer) seem to be the target customer for these “units”, because we know how young people don’t need parking spots and just want to be near a bus stop. It’s the “new reality” as some call it, and are you on board?
Well how about you Zach? Are you looking to snap up a missing middle unit? Some lot that used to have a now torn-down house, that now been rebuilt into 4 units, and is one of those units the type of housing you’re willing to spend $800k or so on? Street parking OK? Looking for a place close to a bus stop?
Sorry to say but the competition between current landowners, and new homebuyers / renters has been forced on us. I didn’t create this situation — decades of poor planning and ongoing political recalcitrance produced the current situation. There is a generational divide whether you want to see it or not.
And, frankly, I know plenty of people who are ready to leave this nation for better options of lower prices or lower taxes if we don’t see a change in the future.
Every other comment on HHV these days 🙂
What are you on about? Townhomes are missing middle.
In fact, while the “missing middle” category is quite broad, from multiplexes to low rise apartments, in the city of Victoria, townhomes are the most dense form of “Missing Middle” housing that is legal to build under the current plan.
The company that did the concrete work at the three Bosa Towers @ Dockside had primarily Mexican crews and their company rented a unit at Ironworks but when I slowly chatted with the workers their English was at a decent level even thought my friend that rents one of my units at Ironworks kept saying they don’t speak a word.
The languages I speak fluently I am not pulling out google translate but languages I studied, but I am not great at, I know I can freeze up pretty quick in trying to hold a conversation….happened to me in France this past summer. I end up with a mental block from fear of making mistakes infront of my fluent French speaking cousin. You can become self-conscious really fast if someone doesn’t understand something you are saying, or they are fluent speakers talking fast and you aren’t picking up everything. Also, if you are in a group of workers you aren’t forced to communicate which doesn’t help either in terms of confidence….not to be confused with someone not speaking a word.
Ahhh the good old days 🙂
LMAO
Hey Mt. Tolmie, ya, I get it on both sides. I don’t live in Victoria but, still, as a single family house owner in another area of B.C., I can’t say that I’m not a bit worried about how the changes to land zoning will affect my neighborhood. Fear of the unknown. And things sometimes do feel a bit forced. But, I guess I’m just hoping that, if not today, hopefully in the next 10 years we will see some better affordability for our (my) kids. Who knows, but I feel like we’ve got to at least try a few things. I don’t know what the answer is and whether or not the reforms will help in the end. But I do think the status quo isn’t an option any more. Perhaps a combination of all these ideas (some increased city density, some fee simple townhouses, etc) will leave us with options we can all live with. One can only hope.
On the foreign worker discussion.
there is 100% foreign workers that do not speak a word on English on local construction sites.
I’ve rented long term furnished rentals to a large local contractor and the three guys that were living there, could not speak one word of English.
On both occasions the lease was put in the company’s name and rent Paid by the company.
The supervisor literally had just picked them up at the airport when I had met them, he was using google translate to communicate with them.
But the density isn’t delivering affordability…
Or they want others to be able to afford phones. Go figure.
A good question. There are some zealots who are fixated on density.
It’s not so much that they want to live in a dense neighbourhood, as they can move to one if they choose.
Rather, they want to impose it on others.
Perhaps someone with training in psychology could explain that to us.
Arbutus, My Son is in the same boat, he wants to buy but its like 400k for a shoe box…that’s huge at 18. He works full time (40 hrs per week) @ $21 per hour, his girl makes the same.
One bedroom shoe box is 2k per month just to rent, wasted month after month after month.
I can help with the down payment in the form of a loan (I’m on the title).
Not that I’m looking, can you buy a freehold detached house, move in ready condition within a 10 mile radius of the Victoria core for 900k? Move in ready.
Regarding why you don’t see people on this forum asking about sold prices of ‘units’…Who knows, but I expect that the majority of people looking to secure some sort of long-term housing are not following HHV. This could be because they don’t know about it, or simply because buying anything right now is totally out of reach so there is little point. I can tell you that my son (who owns an Android, btw) and who works in the downtown area would love to be able to afford a unit somewhere reasonably close to town. So, I say, bring them on.
It used to be that everyone on HHV wanted to buy a SFH in South Oak Bay. Maybe compromise, hold your nose, and settle for Fairfield or Gonzales instead. I remember someone complaining how crappy all the sub 1M$ houses in Oak Bay were. That was back when you could buy a nice but modest South OB house for 800-900K.
The market killed that snobbishness. Fortunately there are tons of great areas to live in greater Vic outside of the above-mentioned hoods. Especially now when so many people can WFH at least some of the time.
Think of all the people in Vancouver alone during that period that moved here, they cashed out. Now they are telling all their friends, they keep coming and coming. I have lived in Vic for 50 years and I have never seen so many new construction company’s… They are everywhere growing buy the day.
If it’s just population growth, why did house prices go up >50% during the pandemic?
Patrick…at what cost? It costs a lot of money to build anything…most of which is permit fee’s and taxes…blame them.
That’s my point. It’s easy as a detached homeowner to be comfortable with the new reality for “everyone” without a house that they don’t get one. I think we can do better than that, and actually plan and build freehold townhouses. Even if this means greenfield clearcutting.
Its population growth, not collective madness.
Coming in like a freight train.
I just frequent this blog because LeoS does such a good job with his charts and current market trends. I don’t want to sell or buy anything. I check it out daily…kinda like a junkie on Pandora.
5 years ago, there were townhouses in Westhills / Happy Valley for $400-$500k.
It’s only collective madness that is preventing that from happening again.
Do you really want to live in Edmonton?
I already own a detached freehold house for 20+ years, I don’t want a unit. Times are different now. Units are the new reality for everyone. Land cost, construction cost…It is what it is, and its not going to get any better moving forward. This Island is a gem….and they’re just going to keep coming.
Here’s an Edmonton 3 bedroom townhouse for $289,000. CAD. Maybe we could get something outside of Victoria for $400,000 -$499,000
https://www.houseful.ca/edmonton-ab/603-watt-boulevard-southwest-unit-107-edmonton-ab-t6x-0p3/pid_xzpvahj4cw/
Max,
A question for you. Would you ever consider buying and living in a “unit” for a long period of time. Or are you like many HHVers looking for a freehold townhouse or a house? Other than seniors downsizing and university students/renters , I dont see why we’re building so many units.
What do you consider affordable for a townhouse within a 10 mile radius of the Victoria core?
I never said it would. What I did say is
“ Probably we don’t get to $85k USD townhouses, but maybe to something AFFORDABLE, which it seems we won’t get to if we just focus on DENSITY !”
85k USD within a 10 mile radius of the core for a townhouse in Victoria is never going to happen, ever.
Those are separate places, not commutable to Victoria. They’d all get cheaper too, if they could build on more greenfield and ALR land.
Have you seen the prices in Courtney, Cumberland, Campbell River, Sayward? That’s way out of your 10 mile radius and its very expensive.
Yes. That’s why we need to build out-of-town. Expand via the “untouchable” ALR and green field spaces. A farm in a city sorry but ten mile point and broadmead used to be farms too.
Cost of land, cost of construction.
Units for many people are the only option.
Existing freehold homeowners ain’t budging…why would they.
A simple question brings this into focus.
Q. Can you name a HHVer that is looking for a “unit”, be it a missing middle “unit” or otherwise?
For every one you can name, I’ll name 10 HHVers that are looking for freehold houses or townhouses.
Have you seen many HHVers ask “what did XXX sell for”, when it was a “unit”?
Once you realize that, ask yourself. Why are we moving heaven and earth to build “units”? Why make Androids, when people want iPhones?
…And put a transit hub there.
Affordability… View Street towers. Row after row after row of View Street towers. Build them as tall as you can. Keep it simple, no flooring just polished concrete, keep them small 400 sq/ft. Put them out off the Pat Bay highway on a rezoned ALR Hectare.
The demand is for cheap freehold houses/townhouses (not “units”). Who is building those? Not the missing middle crowd. Expensive missing middle units will just bring more well-heeled people moving into to gentrify Victoria. And leaving the “Uber driver” class further out in the cold. Better to think big, and build huge subdivisions out of town, to get some affordable freehold townhouses.
Intriguing theory you have there that prices are cheap when there’s enough supply to meet demand.
The entire Island is expensive.
That’s true, when I talked about Victoria prices to one of the Uber drivers, she said “that sounds like San Francisco, and I used to live there. That’s why I moved here, and bought a townhouse 10 miles outside of the city for $85k usd”
I dont think you are usually going to get a townhouse for 800k maybe a small two bedroom condo.
But this is a high priced site, and I don’t think that’s going to change anytime soon.
A recent visit to AnyTown USA changed my perspective on the issue of Victoria affordability vs density…
It seems to me that housing advocates are trying to solve two problems. One is “density” and the other is “affordability” . Obviously those are different. I happen to think that they will solve density but not improve affordability. And some of them have said the same thing. To that, I say “what’s the point, if we don’t improve affordability?”
This point came into focus me recently with a visit to the USA. It wasn’t to San Fran or a high priced site. Think of it as AnyTown USA. A couple of chats with Uber drivers brought this into focus. They tell me the townhouses (10 miles outside the city) in their neighborhood cost $85K USD, and they were freehold. I found out they were freehold by asking them what their strata fees were, and they said “$600 per month” and it turned out they were talking about their mortgage payments! No, these weren’t audited appraisals, they were UBER drivers telling ,e what they are paying.
Anyway, they’ve solved affordability there, and the people were living 10 miles outside of town. So they may not have created a high density town center like we seem to crave.
Probably what’s needed for us to get to $85K townhouses is thinking outside the eco-box, and …
– clear cutting greenfields
– Converting ALR to housing
– Talking to Americans to see how they do it.
Probably we don’t get to $85k USD townhouses, but maybe to something AFFORDABLE, which it seems we won’t get to if we just focus on DENSITY !
From what I read here, these missing-middle thingys are going to end up with units costing $800k or so, and when I told that to the Uber drivers in AnyTown USA they just laughed.
…or French.
Wonder what equivalent health care positions/teaching/etc., look like. I know when I started working at VIHA in 2007 as a respriatory therapist a few people from my graduating class went to Calgary and Edmonton as base salary was $9/hr more plus better nightshift and weekend differentials….not too mention cheaper housing.
You are wrong, there are a lot of people on construction sites that don’t speak English.
That’s a fact.
I am on quite a few immigration forums/FB groups and whenever someone posts something along the lines of “my work visa is expiring, willing to work for cash,” or similar the vast majority of replies (from other immigrants) are along the lines of “good luck with that.” No half decent profitable business owner is going to allow a non-paperwork, non-WCB covered worker onto a construction site, in Victoria. That is a receipt to lose your life savings.
Not only super high standards but where exactly are you going to sleep in Victoria for cheap as an illegal immigrant? Sure is there the occassional house in Victoria with 2 or 4 people on the lease and 10 people living there, yes. Is it in mass? I don’t think so.
In Croatia I have friends that rent two bedroom 600 sq/ft condos to 8 constructions workers (two bunks in each room) from Nepal or Bangladesh or Bosnia, but I don’t think that is a thing here (maybe a bit in Vancouver and Toronto).
Both in Croatia and the US I’ve seen workers (illegal) hanging outside of Home Depots (or equivalent)….can’t say I’ve been to the Home Depot in Langford with someone outside offering to do tiles or whatever for cash.
Maybe a bit naive, Marko? I agree that the Canada immigration standards are super high and individuals absolutely need to speak English (or French) to get in. But there is such a thing as illegal immigration. No, it won’t be anywhere near US levels, but some people can get here; human trafficking is a thing.
Median B.C. wages now the same as Alberta. That’s a huge gap that closed in the last decade
What a joke. They introduced this “powerful tool” against “unexplained wealth” around 2018, and at that time talked about a single case also on Salt Spring, with dubious merit. So here they are five years later, likely this is the same single case they’re boasting about. Not with a conviction of course, just filing charges.
And c’mon, five years and not a single case of “unexplained wealth” from all of Vancouver, just one from Salt Spring? We were told of thousands of Vancouver houses bought with “unexplained wealth”. Yet they can’t find one with this “powerful tool”.
The real joke is that they are tying this to the housing crisis, as if it make a difference.
Given the costs involved for the government over five years for this case, it isn’t a case of “unexplained wealth” it is a case of “unexplained waste” of money by the BC NDP government!
The British Columbia government has filed the first-ever application to secure an unexplained wealth order in Canada, the province’s solicitor general said, calling the orders a “powerful tool” to clamp down on the proceeds of criminal activity.
Finally, this may explain why so many “home makers” are buying with cash.
Is there anything under 6% for over $1M yet?
Just takes time for the class 4 license. Vancouver is flooded with ubers. Never waited longer than 5 min from opening the app to getting in the car.
Actually, 8% struck me as really high considering where inflation is at. I would have guessed at 4.5% myself but I have no idea. Depends what special operations might be on the books.
Nearly always a solid strategy IMO. I mean do you want to go super low in late December when the market sucks? Not really, but most other times there will be enough buyers that a low price will attract bids and sell for market value. Hanging on to a listing for a long time doesn’t net a higher price (unless the market is rising, but then you’re still better off just selling later quickly rather than having strangers traipsing through your place for 6 months without results)
Maybe I’ll be able to get an Uber at that point.
Most people are predicting (hoping really) a soft landing. Who do you trust with the prediction?
Every 1% increase unemployment in Canada is equal to 250,000 jobs lost. We have already gone from 5% to 5.8% unemployment rate. It can easily reach 6.5%, an increase of 1.5%. If it reaches 6.5% by Q1 or Q2, that will translate to at least 3,500 – 4,000 jobs lost in the Capital Region.
December is not typically when banks are competitive on rates. Let’s wait until March.
How much of it is being passed on to the customers? The Big 6 banks are passing on only 10-30 bps while the 5Y yield has dropped almost 100 bps (a full %).
Bond market just keeps dropping day after day so I don’t think rates staying high is a sure thing at this point.
Ya some 2019 prices were very low, like this: https://realtor.ca/real-estate/25889127/3491-mayfair-dr-saanich-mt-tolmie?utm_source=consumerapp&utm_medium=referral&utm_campaign=socialsharelisting
It’s one sale. Median SFD was under ~$800k in 2019. It’s over a million now. Long way to go to get back to 2019 prices…
Rodger 2019 prices would crush the economy. Reverse wealth effect , I guess anything pre pandemic
It’s back to 2020 price ($848K). Most sales are in 2021 – 2022 prices, but the longer interest rates stay high (> 6 months), 2019 prices may be possible.
Not sure about Victoria but in Van there’s a fair bit of sub trades that have workers with very little English . Having said that help is hard to find so you hire lots of live bodies that can tie they’re shoelaces and that’s good enough
For a big construction site as he mentioned, the chance for a real engineer speak with a 18 years old framer directly on engineering work is 0.
GC employs both the engineer and the safety officer? Seems unlikely.
GCs typically contract out even if they are out of town. Pretty much every single large construction site you drive by has a Gordon N Gordon sign zipstrapped to the fencing (a large local company doing steel studs, drywall, painting).
Bosa is not from Victoria but Gordon N Gordon did the three new towers for them.
My point being is good luck finding someone on a construction site that doesn’t speak a word of English. This isn’t the 1950/60s.
If you look at my link below construction workers have a higher cutoff than healthcare workers; therefore, if construction workers don’t speak any English an even higher percentage of health care workers don’t speak any English. Given my friends that speak high level English plus have ticketed trades cannot get permanent residency I somehow doubt non-English speaking construction workers are being processed in any meaningful number.
Just to clarify I am in favour of processing more construction workers including non-English speaking ones, but such is not the real life reality, imo.
His son was doing framing in the westshore, who knows who the GC is….
Lots of big national level contractors operating in victoria also. Bird, pomerlau, ellisdon, maple reinders to name a few. But don’t know if they are doing any residential jobs.
Highly doubt this as well. I have friends that work on some of the largest construction sites in Victoria and for someone not to speak English is quite rare let alone someone that is not manual labour.
Things is the largest companies in Victoria, for example, Gordon’n’Gordon, do not have systems in place to bring in foreigner workers themselves which means you’ve either gone through the work visa channel or are a permanent immigrant. Both require a decent level of English to navigate.
Maybe in Vancouver and Toronto there are construction companies big enough where they can bring in workers from Mexico, Napal, Eastern Europe, etc., that don’t speak English but not seeing it locally.
As I’ve mentioned before obtaining permanent residence without enough points (aka good english proficency) is difficult. There is a reason why the majority of our immigrants have an university degree (they score enough points). A construction worker with poor English from Bangladesh cannot get into Canada, so they end up in Croatia on a construction site.
https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/express-entry/documents/language-requirements/language-testing.html
Here you can also follow what BC is drawing every week under the provinical nominee program…finally I see a few construction workers (you’ll see that their point cutoff is higher than healthcare, aka on average they need to speak better English than a health care worker being drawn).
https://www.welcomebc.ca/Immigrate-to-B-C/Invitations-To-Apply
City of Victoria had a $57M surplus as of 2021. You’d think some of that could be used to offset property tax increases. Or perhaps they’re saving it to help pay for replacing Crystal Pool and whatnot.
https://www.cbc.ca/news/canada/british-columbia/bc-municipalities-surpluses-history-1.6699074
You won’t be the first one with nothing better to do in life than hhv LMAO. As to your story, the guy was likely not an actual P.Eng but was an engineer from where he immigrated from and was doing some engineering work on site but cannot do actual sign offs.
What was the previous purchase price for that one?
I was calling BS on the existence of that projection, not specifically the 8% For context recent increases: 2023 – 6.15%, 2022 – 3.89%. It’s typically been inflation plus a percent or two, still pretty high. 2022 inflation 6.8%, 2021 inflation 3.4%.
Seems high, but I wouldn’t be surprised. Someone has to pay for tree preservation officers @ $100k per year to argue with BC Hydro about how many small branches can be cut off a COV tree to connect new overhead power to your home.
If you drop the price on any listing far enough it will sell. In a very slow market you just can’t count on a shock price drop to generate enough interest to revert the sale price back to market value. In a busier market, I think Leo is right, pretty much always lands back to market if you underlist.
2941 Cedar Hill got it’s sale for $850k after dropping to 799k. Not bad for a 2000 build in the core. Looks like the shock price drop is the way to go to get action on a listing.
Last year they started at 9% and settled at 6%, which was actually lower than increases in OB, Saanich, and Langford.
This year they have started with 8.37 and will likely shave off a few percent. Still above inflation, but unfortunately not out of line with other municipalities.
I call BS on the 5 year projection of 8% per year unless there’s a source for that
Yes, 62% homeowners in 2021 census. They’re also more likely to vote.
https://www12.statcan.gc.ca/census-recensement/2021/as-sa/fogs-spg/alternative.cfm?topic=7&lang=E&dguid=2021S0504937&objectId=3_1
Interestingly Parksville has the highest rate in the province with a whopping 81.5%. Shows you the correlation between home ownership and age. 🙂
Is this true in Victoria any more?
There is no implicit tax. You make more money and you pay more tax but you still have more net income. It is explicit.
If you work more hours to buy a house you get the asset in exchange – which is tax free upon resale. You can also invest your extra income in other ways that reduce taxes like the fthb, tfsa and rsps.
Houses are more expensive and that is a social issue that is getting significant attention and hopefully some solutions that stop the escalation and increase supply.
Homeowners with mortgages are now having to work harder to pay huge mortgage increases. When you retire you can’t compensate for cost increases by working harder so it is a good thing if seniors have a paid off house imo.
Pitting generations or homeowners vs renters solves nothing. You’ll get old too and someone who is renting won’t see that you worked harder than your parents to buy a house, only that you are a wealthy homeowner.
Someone was saying that the CofV is going to propose an 8% increase this year and project an 8% increase in each of the next five years. Basically that would increase taxes about fifty per cent over five years.
I wonder at what point people are going to stop blaming the boomers and start to look at who they are electing.
You’re talking about an unrelated concept here.
Of course average incomes can stagnate in real (inflation-adjusted) terms. This has happened in the past 5 years and it has made Canadians poorer, on average.
However, individuals can earn more or less than the average, and they can work to earn for more years.
The current shift to more expensive housing drives individuals who buy homes to work harder and longer to earn more income (and therefore to pay into a higher tax bracket) to the government for longer. The government benefits from an implicit tax hike on these people — people in my generation.
This implicit tax hike is generational: it is a shift in the tax burden from older generations onto future generations.
On average, this effect obviously disappears. Wealthy older homeowners don’t see an implicit tax hike because they aren’t paying off a mortgage. They can retire, reduce their productivity, income and taxes without any concern.
Makes me just a little concerned when the banks start reducing their workforce.
As to transits hubs, I really dont think this has anything to do where present gay bus lines are at the moment. They are just going to pick an area and then say that transit will run there in future. To a large degree the developers are going to be running the show. The city will recommend areas and the Province will pick them. The city will claim it is done by the Province and the Province will claim it was only done because of the recommendation of the City. If this sounds familiar, it was the very cute play done here in Victoria with the Bed and breakfasts that were grandfathered.
https://www.tiktok.com/@604tv/video/7307395899917946117?_r=1&_t=8hoSXXOZVzy
Our house cleaner is the same. Great guy, but no hablo ingles. We talk via Google Translate. Seems to work ok.
I have better things to do with my time than make up stories on hhv. Maybe he’s an intern.
Either you made up this story or your son. I can’t speak to safety officer, but all engineers in training need to pass the ethical exam in either English or French in order to get their P.Eng, ABSOLUTELY no exceptions in any jurisdictions in Canada.
It is the absolute truth, you talk into their phone, and their phone answers you.
This is on a big build in Langford. I’m not saying they are not good at what they do, but they do not speak English. And that is the gods honest truth.
Have never experienced this in my life….to get permanent residency you need a high level of English amongst other things and doubt an engineer would be here on a working visa? I would think the p. engineering associations would have some barriers to working here as a foreign engineer not speaking a word of English.
All the immigrants that I know in construction speak really well. 50 years ago, you could come to Canada with limited English, but the paperwork barrier now is such that without English or family help it is very difficult.
Even my parents generation of immigrants (mid-1990s) spoke English for the most part.
Canada has been bringing in so many immigrants and refugees with zero linkage to housing or doctor availability despite the fact these are necessities. Seems kind of nonsensical.
Foreign students who do Homestay are not removing rental units. They a a net positive for our economy. Live in caregivers are the same.
Maybe there should be a housing contribution fee for work permit and immigration applications to put towards coop projects.
My 18 year old Son is framing in the west shore and both the engineer and safety officer can’t speak a word of English…He has to talk to his phone and the app translates it for him, then he replies to the app and shows him the phone for the answer…no shit, this is happening right now, today.
Tend to agree, but keep in mind that net positive can encompass both winners and losers. Homeowners are the majority and renters the minority right?
The province or the municipality have to designate it. But it’s new info (to me) that they are not limiting themselves to what BC transit is currently calling a bus exchange (which would have made the policy nearly useless in Victoria)
Sure way to lose 99% of your votes. If I am a politician, I would reframe this proposal as a tax credit for people who adopt. The net effect is the same.
Seems like study and work permit holders are a net positive financially for Canada. They consume fewer social services, pay taxes on income, man undesirable jobs, and foreign students pay high fees. I still say go heavy on co-op housing for permanent residents within specific income bands.
Does this place qualify? (Hillside Mall exchange) https://www.realtor.ca/real-estate/26167632/3210-doncaster-dr-saanich-cedar-hill
I still think spots near schools and rec centres will be chosen. If you can’t walk to school it is not a walkable neighborhood and seems unlikely there will be spare land in these areas for facilities like this.
More news on what a bus exchange might be. Sounds like it will be broader than what B.C. transit current considers to be exchanges
I agree Canada needs immigration, it just should have been done through orphan adoption. Couples not wanting to adopt would pay higher income taxes that would supplement those who do adopt.
We use immigration to cheat Canadians’ chronically low productivity. It’s also how we cheat growth and investment, without it; deficits will grow, services will be cut and many jobs will go unfilled. So, if you like things like healthcare, pensions, and old age welfare (OAS) the immigration taps need to be kept open. The foolish argument of lack of housing or just as foolish lack of water infrastructure doesn’t work. Things like that are built on demand and not in advance. Want more housing built, we need the investment that immigration brings to do it.
We could afford to easily reduce the total immigration numbers to about 100,000 for the next five years or however long it takes to eliminate the housing crisis. Cut student permits in half (the unemployed profs should be qualified to bus tables). Provide funds for the Universities and allow them to borrow to build student housing while set a five year goal that they are required to provide student housing for every foreign student and to charge housing as part of tuition.
I am sure that a lot of the box stores and wage slave companies will scream but maybe they will have to start paying a living wage. Maybe then we can start using a lot of the capital and our labour force to do something that produces something other than endless housing.
I am not heartless, we can start up a charity so that developers can pay for their private jets and yachts.
Here:
Amongst temporary foreign workers, construction doesn’t even show up in the top industries. Mostly farm workers and personal assistants
Worth noting too that agriculture often provides on site housing for their TFWs so they do not affect the rental market in those cases.
Any stats on how many % wise permanent immigrants are employed in construction?
Mostly study permit and temporary work permits (although lots of refugees from Ukraine also recently). I’m no expert here and the data is tough to get. Follow Mikal Skuterud on twitter he does research in this field and is quite critical of the current policies.
They’re not buying housing (because they can’t), but they are renting, which drives up rents, and then trickles up to housing costs. Supply side reforms are crucial, but the non-permanent resident situation is a huge problem that needs to be fixed. We can’t possibly keep up with housing construction or react quickly to those swings. Housing minister Ravi Kahlon has said the same thing.
Note that in the chart below, permanent immigrants are mostly picked from existing non-permanent residents that are already in the country, so those two numbers are not cumulative. But still doesn’t feel like a well-planned immigration policy.
It is unlikely that all the new multiplexes under the new legislation will end up in the same street. If every street gets one multiplex, housing supply will grow by 5%, which is unlikely in the short term.
Most streets have some built-in extra water, sewer, power, etc. capacity. Municipalities can upgrade the street-wise infrastructure selectively, depending on where these are built.
Population growth is quickly stabilizing to the long term rates all over Canada primarily due to the rate at which non-permanent residents are leaving Canada (foreign students without jobs, etc.) so municipal infrastructure upgrade is not a major issue.
Under the previous zoning regime, all new developments were concentrated on some streets, but now it is more likely to be decentralized.
If you want to really see weird then offer something for free on those platforms. Sell something for ten bucks and people are so grateful for the sweet deal. Offer it free and you get pestered with demanding queries from idiots and jerks. I have had this experience enough that I don’t offer things free anymore.
First of all, incomes don’t “have to rise above inflation”. The simple fact is that they haven’t in the face of the recent inflation which is the greatest since the 70’s/early 80’s. Labour markets don’t care about the inflation rate, they care about supply and demand. Unions of course can try to buck this as they always have but their power isn’t big enough to affect the macro picture appreciably.
Second suppose people work more hours. That’s increasing the supply of labour without changing the demand. That means lower wages other things being equal. Whether that increases total income to labour is is a bit more complicated but that’s not a given.
What enables higher wages, and higher total income to labour, is labour productivity which is mainly a function of capital investment. And we’ve been doing poorly on those fronts, at the very same time we’ve seen housing costs go up so much. And there is a connection between the high cost of housing and lack of productive investment, as the former takes capital from the latter.
And apparently, most buyers are paying cash…
Canmore recreational housing prices buck trend, average $1.7M for detached home
https://calgaryherald.com/business/real-estate/canmore-housing-prices-real-estate-ski-towns
Those are some powerful rose-coloured glasses you have on. Trudeau will continue to disappoint on housing until the election, and Poilievre will disappoint after.
Showings/listing appointments/inspections/etc.
I didn’t trade it in to Tesla, but $105,000 and $31,000. The new Model Y @ 46k has more range than my Model S. Can’t imagine where we will be in another 8 years as economies of scale ramp up on EVs.
The economy is cutting into their demand, not competition (still behind 3-4 years). A year ago on a CND Tesla forums/Facebook I was posting that I predicted huge Tesla price cuts coming not because of competition but interest rates. People are not buying 60k-70k cars at 8% interest, including Teslas. But at 50k they are (aka Tesla price drops).
As for sales they are going to sell >30% more cars this year and 100% more sales than 2021……who exactly is “cutting into their sales?” What car company is up 10% this year let alone >30%. I would say with these huge price cuts they are just crushing the competition as the competition doesn’t have the margin to drop their prices.
The Tesla Langford store was just nuts yesterday. They had three deliveries within the 28 minutes I was there. You should see Vancouver, I was there last week and I wasn’t at a single red light in two days where there wasn’t at least one Tesla at an intersection.
I wasn’t aware of wild swings in permanent residency being a huge issue for housing. Study and work permit holders and asylum claimants? How do you think this will play out?
I don’t think so. At the very latest by 2025 election season this is either going to change or be a major election issue and be changed after.
The problem isn’t really the headline immigration targets (500k/year). Those change slowly and can be easily planned for. The problem has been the wild swings in non-permanent residents which no one can plan for. That won’t last.
As a separate point, regarding the tax implications of high home ownership carrying costs, it’s really interesting how this works.
Over the last 30 years or so, we’ve seen housing prices and carrying costs rise well above the rate of inflation. This has required people to spend a great portion of their income on housing. Because tax brackets are updated yearly based upon inflation numbers, this means people spend more after-tax income on housing, as the tax brackets aren’t keeping up with housing costs.
As a result, the housing market actually creates an implicit tax hike on mortgage holders and renters. You might assume that your tax bill would be the same, regardless of how you spend it but that’s flawed. Incomes have to rise above inflation to pay for the more expensive housing (which means more tax, as the tax brackets are pegged to inflation) and further many people inevitably will work more hours or to a later age to earn more income to afford this more expensive housing.
The outcome is that year by year, we’ve been paying more in income taxes to afford housing, which directly benefits the governments coffers. This implicit tax increase is rarely discussed by political parties. Who’s surprised by that?
That said, I think the sentiment across the country is that unless something breaks in our financial system like a major bank default or the feds refusing to pay their debt obligations or a massive recession (situations that benefit no one), the dynamic of housing prices continuing to rise well above incomes is going to be a permanent long-term trend.
It’s pretty clear now that our population is going to be forced to grow well above our ability to build housing. And because housing is a basic need, people will simply have to pay a greater portion of their take home pay, and more taxes on that pay, in order to afford a roof over their heads.
Truth be told, financially, I think we’re headed for a pretty dismal decade in this country no matter how things shake out.
I don’t see why your idiosyncratic opinion would affect market prices for local real estate.
That said, when you do find these SFHs being listed for steep discounts in James Bay, downtown or Fairfield on lots that are directly adjacent to small apartment buildings, please post them here! I love a good deal and I don’t want to miss these discount properties in prime neighbourhoods (which already have a fair number of mixed developments by the way) that you’re referring to, when they eventually come on the market.
Marko- Why are you driving close to 100 km per day? I could see that in sprawling metropolitan areas like L.A., Atlanta, Chicago, etc.., but a small place like Victoria? Also curious as to the initial cost of your Model S and the trade in value. Tesla needs to slash prices because they are not selling what they are producing. Competition from other car makers are cutting into their sales. I think some consumers prefer having a dealer network readily accessible rather than waiting for a remote response from someone you can never see.
As for 3rd party ie. cheaper batteries, never going to happen. Cheaper means lower quality and more prone to failure. One might void their warranty or insurance without a dealer installed battery. New York City has banned certain (cheaper) batteries for ebikes.
Steve Saretsky on (among other things) why new development doesn’t make financial sense despite zoning changes: https://www.youtube.com/watch?v=Ktb-PmgozJU
Noice. Yeah prices are getting pretty reasonable. $65k for a long range which was like $80k a year ago? Nuts.
Test drove the RWD Y a few weeks ago, pretty easy to see why they’re so popular.
Yeah it’s coming. Some good EV repair infrastructure in Norway now, but it’ll probably be a couple more years until it’s prevalent here.
Didn’t want too as I much prefer my 8 year old S…..but the deals are good right now, imo, I couldn’t justify not getting it financially so picked it up this morning.
$53,800 brand new inventory car
– $8,000 in EV rebates (Can’t believe that government is doing this, it is idiotic and waste of taxpayer money, but I’ll legally take it. My next car was going to be an EV with or without rebates.)
+ Telsa transferred over the free lifetime supercharge over from my S (the last excuse I was using to hang onto my S).
If I keep it for 8 years like I did with the S and let’s assume 275,000 km that is over $50,000 in gas savings on 46k car, that doesn’t even factor in the maintenance savings. Insurance only $612/year and $51/year for 5 mill liability with my discount. Doesn’t get much cheaper than that in terms of operating a vehicle for someone who has to drive a lot for business.
We really need third party battery replacements….if a new battery on a Model S was under 10k I would have kept it another 8 years but driving around with a 15k-20k ticking timebomb doesn’t make financial sense as much as I think it is an awesome car.
Rob Shaw: NDP start ramming housing bills through the legislature
https://play.zype.com/UHRjHCpP3pydBLoHl6fwvLdtl3keQQlsroOlKQkWJ9wgOP6v/player/6567e962c638840001bb5724?video_id=6567e962c638840001bb5724
Definitely.
Could be. Pretty sure I saw an ad the other day for a new build out in Langford offering free rent for the first three months.
FOMO will be back someday. It always comes back.
Put it on the market. The buyers (developer or non-developers) will tell you what they are willing to pay. If he doesn’t like the number, keep it.
Did you end up getting the Y?
We may well be there again. Rents flat for about a year, selection improving. Of course rents are high, but it’s not the hunger games like it used to be.
Father in law is looking at moving to town, plenty of rental options to choose from.
No fomo to light a fire under you either. Introvert is right though about the rental market. It is currently neither fun, nor cheap and hasn’t been for awhile. Renting in ~2009 to 2015 was very fun and relatively cheap. I remember it well. Decent selection, flat rents, no worries about being renovicted.
Thanks Marko and whatever. I have passed that on, put I sent the old guy off to a real estate lawyer for a fast consultation since it was a complicated proposal that seemed to really sound like a scam to me.
Except that wasn’t Frank’s circumstance. He did a verbal agreement, followed by a WRITTEN AGREEMENT. I put that in caps because you ignored that in your reply and told us of the terrible problems that ensue without a written agreement.
Here’s what Frank said : “ The prices were agreed to verbally, followed by a written agreement.”
Two out of the last three houses I’ve bought were private, where we informally/verbally agreed on a price, and then wrote up an agreement with lawyers.
Sure, $185,000 per door for a six plex in Rockland. A four-plex would be $275,000 per door and a single family lot about 1.1 million. Pick one.
I have no issues with two private parties doing verbal agreements, fill your boots and have fun.
I just know every single day I am dealing with contractual problems, like literally every single day. For example, today I am dealing with a possession time for this Friday that doesn’t work anymore from one of the parties as their moving truck from the US is set to arrive early and we are trying to work something between the two parties (even thought the possession time was contractually specified and signed by all two months ago).
If I am dealing with problems every day for items written and signed upon by both parties on “paper” I would pay a lot of money to watch a Netflix series of parties navigating verbal agreements in real estate. There is a very good reason(s) why real estate has to be done on “paper,” in my opinion, from start to finish.
Just apply selling something small on UsedVictoria or Facebook marketplace and how weird people can be then amplified it by a ton more variables and people being a lot more emotional.
Personally, at this point in my life I am taking $5k to $10k less from a dealership on a car just not to have to deal with buyers directly and I’ve successful sold many cars privately in my life and I don’t even like dealerships, but I dislike dealing with private buyers even more.
We literally have a great comparable from yesterday. Beautiful street in Fairfield, across from a park, completely flat lot with great dimensions at 60×120′ for $1,110,000 divided by 6 = $185k per door (for approximately 1,100 sq/ft per door).
At this point and time 95% of homes are worth more to an end-user versus a MMI builder/developer. If a home is remotely nice/livable it is outside of how much a builder/developers wants to pay to make the numbers work.
I have a serious question from my next door neighbor. He is considering selling his property in Rockland and he was wondering about how much would a developer pay per door for missing middle.
I am guessing that it would be comparable to Fairfield, so what are MM lots selling per door in Fairfield?
I’ve purchased two properties privately. The prices were agreed to verbally, followed by a written agreement. No agents were involved. Zero commissions.
Does anyone know if older neighborhoods can provide sufficient water supply and sewer services to these multi family buildings? They were designed for single families, not two six plexes on one lot.
Has anyone modelled the possibility that in neighbourhoods like Fairfield that what may actually a land drop instead of a land lift because of the rezoning. I know Leo will say that it does not matter what is built beside you, A SFH with a four story twelve plex is not worth the same as the identical house in a stable street of single family homes. In spite of LeoS expert unbiased opinion I would not pay the same amount for a house with a four story apartment a couple of feet from the lot line besides me as opposed to a single family home.
You might lose a lot more buyers who dont want to be in an area were they are building multiplexs than the handful of developers who have a world of choice now.
Some people are living on cruise ships and finding it cheaper.
Why were more people willing to pay a third more per month for the same house in 2008 than in 2013? Incomes up, employment good, rates down. But much less interest. Not as fun to buy when prices aren’t going anywhere. Consumer sentiment is powerful.
Patrick, if they aren’t legally binding then a verbal is not worth the paper it’s not written on.
There are still people that believe a verbal holds similar weight as a written offer. If you were born before 1960 you were likely raised in the culture that your word was your bond. That’s the thread of the conversation that I am following. People wondering why their verbal is not being treated equally to that of a written offer.
Paraphrased as
I verbally offered X for the home, but then I found out it sold for less. Now I’m pissed at the agent.
Is it cheaper to stay in a hotel than rent in Toronto? Some are offering $2K month-long packages
https://www.thestar.com/news/gta/is-it-cheaper-to-stay-in-a-hotel-than-rent-in-toronto-some-are-offering/article_b01f2b48-9dee-5d98-ac58-a1578346a96a.html
More than “set to drop”…. Mortgage rates already down 15 to 30 basis points in November. With more to come short term (given the 5 year bond at 3.7%)
https://www.canadianmortgagetrends.com/2023/11/three-of-the-big-banks-have-just-lowered-fixed-mortgage-rates-will-more-follow/
Straw man argument. No one here has said (or even hinted) that verbal offers are “legally binding”. And that’s the point of why they may be advantageous to the buyer and detrimental to the seller. Adding up to a good idea for the buyer to try, even though it may be resisted by the seller and the seller’s agent.
When one is speaking about verbal offers on real estate as being legally binding they are showing their age. A long time ago that may have been accurate but not anymore. See Statute of Frauds Section One last amended 1994.
If the last time you bought a home was in the 1980’s that may have been true, but not today.
There will always be demand for quality properties in quality neighborhoods. Our housing stock is deteriorating daily. The layouts of houses more than twenty years old are not what younger buyers are looking for. Providing what people want (including energy efficiency) cannot be accomplished at an affordable level. Maybe lowering expectations are what people should learn to accept.
Sales down pent up demand , sales up pent up demand , sounds suspicious
Do we have pent up demand or do we have pent up supply?
Defining what is meant by pent up demand is more art than science. You could walk down any street in any town and ask a random renter if they want to buy a house and they will most likely say – yes. Is that pent up demand? Because then real estate is perpetually in the state of pent up demand.
Obviously this isn’t truly pent up demand. For this to be pent up demand the renter has to be in a financial position to buy a home and be actively looking. They have to be a “prospective purchaser”.
Information that may indicate pent up demand could be the traffic at open houses and the number of written offers on a property. Presuming that the property is competitively listed with similar properties and being sold using normal marketing practices and not underpriced to create an auction.
Unfortunately that information is entirely anecdotal and coming from a source that at least has a perception of bias . The statement that there is pent up demand should not be conditional on a future event such as the interest rate or prices declining as that would be a self fulfilling prophecy.
When you look at the range of list to sale price over the last month it is quite wide with homes selling at 85 percent to 130 percent of their asking prices. If we could wave a magic wand over the asking prices of the real estate market in Victoria so that all properties are listed within two percent of where they would sell would we still have unsold properties – pent up supply?
At best stating if the current market has pent up demand is more of a gut feeling than science.
Given that verbal offers are unenforceable and “no offer at all”, they are however advantageous to the buyer, and detrimental to the seller. And not illegal. That adds up to it being a good idea for a buyer to make a verbal offer in the right circumstance. And yes, the real estate agents won’t like it, just like they don’t like anything that makes more work for them. For a buyer, they can lead to lower prices.
I seriously doubt they drop the rates before the US does, and they’ve just had an upwards revision of GDP for the last quarter. The housing market isn’t anymore, but the economy is showing a surprising resilience ;).
https://www.cbc.ca/news/canada/co-op-housing-affordability-1.6374412
I like the co-op model and would live in one. I don’t know why they are not still being built. Be good to have some sort of public-private co-op land trust that allowed for charitable donations and fundraising/land grants with a big PR push. It is a very stable sort of housing that creates community and a sense of ownership. Not building equity is no trade-off if you can’t afford to buy in the first place.
I agree with you. I would say the very slow sales 2010-2014 can be attributed to poor consumer sentiment. It was cheaper to buy a house with a suite on a monthly cash flow basis than to rent a condo in 2014.
Do you think anything is different this time around such as very high immigration numbers? I.e. even if consumer sentiment sucks people still need a place to live and rents are high? (Leaning to more motivation to purchase if rates drop).
Unworkable conditions on what is to be built? Like single family zoning? I find that with RE whether a particular government policy is seen as ideological depends on which side of the fence someone is on. I’ve never heard anyone in the RE industry say that the feds should get rid of insuring mortgages, for example. Or that the province should get rid of property tax deferral.
I’m of the opinion that the spring market will be a bust with more inventory and lower prices . Im suspicious of all the pent up demand , but it won’t be the end of world . If real buyers are looking to buy , houses will be on sale
I would. The desire to own hasn’t gone away, and it’s not like renting is fun and cheap.
It is feeling very similar to last year. But I wouldn’t discount consumer sentiment
The way the 5 year bond yield has been going the last 30 days I wouldn’t be surprised if sales bounced back in the spring. A lot of buyers holding off (pent up demand) and rates likely set to drop.
New VREB regulation just introduced, I really like it (instead of a verbal the buyer gets a listed signed by the seller of all the offers presented). Once again, back to verbal offers everyone seems to think are ok, how to you meet all these regulations with verbal offers. Do you disclose to other buyers that a verbal offer has been made, or not? I would argue that writing down a verbal offer on this disclosure form is misleading other buyers, imo.
“Prior to the presentation of any offer, the Listing Brokerage shall complete the standard Disclosure of Multiple Offers Presented form listing each offer to be presented, indicating for each the date of the offer and the name of the Cooperating Brokerage that submitted the offer or alternatively that the buyer was not represented by a brokerage. At the time of the acceptance of any offer, or in the event that all offers have been rejected, the Listing Brokerage shall have the completed Disclosure of Multiple Offers Presented form signed by the seller. The Listing Brokerage shall provide a copy of the signed form to each Cooperating Brokerage and unrepresented buyer as soon as possible, but at the latest within one (1) calendar day after acceptance of one (1) offer, or rejection of all offers, as the case may be. The Listing Representative has an obligation to make presentations objectively and without bias.”
Well, how do you build a casino that loses money? Have the government do it! Having the government getting more involved in building housing will end up with less housing and wrong kind being built. This will also be worse because the ideological zealots present in this government will try to impose unworkable outcomes and conditions on what is to be built.
Les Leyne: Finance Ministry lowballs housing start forecast
https://www.timescolonist.com/local-news/les-leyne-finance-ministry-lowballs-housing-start-forecast-7896373
I still see this move as a sizable win for existing home owners who have lived in their house for a couple of decades on 1/4 acre lots and don’t really want to sell anyway.
Can’t really complain when you make it to 99!
He was looking old
I was saddened to hear that Charlie Munger passed away today. I found him to be a really decent man. Time just moves quickly.
If I were the BC government and wanted lots of multiplex properties built quickly I would set up a government REIT. Then someone wanting to build a multi-plex on a property that is free of encumbrances could sell their land to the government and lease it back for 60 or 99 years. The property owner could then use that money to lower their cost of construction and the property when completed would immediately have a positive cash flow for the next 60 or 99 years. For example a fourplex that might cost 1.5 million to build would get $900,000 cash injection to lower their building cost to $600,000. That makes the four suite rental cash positive from day one.
The government would charge the leasehold home owner a ground lease rate. That makes the ground lease a marketable asset that the government can use to attract private equity investors desiring a long term, stable and backed by the government income stream, similar to a bond, which raises money from private investors to buy the home owners land.
At the end of the 60 or 99 year lease the land and improvements revert back to the government and the government could sell or re-develop with new rental housing.
To a renter it doesn’t matter if their rental is freehold or a leasehold – they pay the same rent. And the owner obtains an income stream that will only increase over time. There may also be some some tax advantages to this as the owner might claim CCA.
This would be a PPP or Public Private Partnership.
The bigger developers are not interested in the mom & pop multi-plexes as there is limited profit incentive. There may be a future opportunity for REITs to buy up mom & pop multiplexes that have been built but have fallen into financial distress. In that way the REIT can purchase the multiplexes at a low enough price that would then provide a positive cash flow while maximizing rental income.
The cost to build a multiplex is going to be expensive. I have yet to see a set of plans or cost estimates to build. My guess is the cost to build will be around $400 a square foot plus vacant land at say $900,000. The value upon completion of a multiplex rental would be around 20 times projected gross rent.
You can run your own scenario but my guess is that the cost to build a rental multiplex will be more than you could sell it for in the marketplace.
The underlying problem for Victoria is that the demand for residential is too strong. When residential lot prices are as high as they are in Victoria then the best price that most people will get for their property is as it is improved with a house and not as vacant multifamily zoned land. The developers want to only pay for the land – not the house.
Yes, I agree. It’ll be fun watching.
Patrick I agree I think there’s more pain and lower prices coming . But some of the comments are already about investors picking up holding properties so maybe they are the smart ones who knows .
OK, but who says we’re anywhere near the bottom of a real estate cycle? The reason that a bank etf is yielding 8.36% is Mr. Market thinks we’re at the top of a cycle, not the bottom.
Patrick agree , but the bigger developers will start to bank property at the bottom of a real estate cycle
You can get an 8.36% yield on Canadian banks (HCAL, a moderately (25%) leveraged etf of the big banks. https://ca.finance.yahoo.com/quote/HCAL.TO
Why bother with speculating on land? This time next year, there’s probably more “Vancouver developers” selling Victoria property than buying.
I did a project in Richmond in 1990 with 9 townhouses sold 6 of them and was left holding the bag on three that I ended up renting Bank was paid out but all my profit where in those three. So you can do a mix in a strata property
Except that doesn’t work unless they control the market, which they don’t. One big advantage of upzoning is that it breaks the stranglehold that developers have on creating housing. When all you need is a building permit, a small mom&pop builder can toss up a multiplex and compete with the Abstracts of the world. Early movers also have larger profit opportunities because they can sell at market value which is artificially high due to the shortage, while over time it moderates and decreases profit margins.
I was speaking with someone who is contemplating building eight units in two buildings. One would be zoned residential having four rental suites on permits. The other would be zoned multi-family allowing for the sale of four condominiums. The sales of the condominiums would offset the cost of the rental building. That would make the property having five legal titles.
I found that to be an interesting idea. But why couldn’t you do that in one building?
I suspect it might be due to the strata fees that include a reserve for replacement and the requirement of a Depreciation Report every few years. There is no such requirement for a rental building as the owner would just re-finance the building to pay for a new roof, windows, etc. Thereby increasing the rental properties net operating income and its market value.
But it got me to thinking why couldn’t you build a nine suite building that is strata titled into three units comprising three rentals with permits that could be sold to investors desiring a rental property? That would only be three legal titles. It would be a lot less expensive than building a tri-plex on one lot or buying three separate condominiums.
That could be an alternative investment to buying individual condos which are better suited for a home owner and driving up those prices. And it would be contributing to the rental stock.
Things that make you go hmmmmm.
Whatever yep pretty much . These are being picked up now and held for a bigger flip later. Another good reason why affordable is a pipe dream , it’s just business and u can’t change the economics
Vancouver carpetbaggers speculating on land lift. The odds are that these properties will be holding properties for a long time and thereby defeating the missing middle initiative. The more desirable properties bought at high prices and left for years, as a they are now, until property values increase 30%, 50%, or more.
I wouldn’t assume that these small scale Vancouver speculators have a gift of miraculous clairvoyance over that of local developers who have developed relationships with local subcontractors over a decade.
If you want to build more missing middle housing then there has to be some mechanism to reduce or eliminate the land lift by property owners and speculators.
If the project is rental housing then one way to reduce speculation would be to place caps on rents for any increase in density, then all developers are treated equally and they all have the same information to calculate the projected selling price upon completion less their anticipated construction costs to determine the maximum that they can pay for the land.
Not much that you can do about Vancouver carpetbaggers that are buying properties on speculation of selling the property in the future when prices are higher to another developer for condo/townhouses.
Carpetbagger:
In the history of the United States, carpetbagger is a largely historical term used by Southerners to describe unscrupulous opportunistic Northerners who came to the Southern states after the American Civil War, who were perceived to be exploiting the local populace for their own financial gain.
I found that too, at least two tear downs on Shelburne sold to Vancouver buyers this year.
TOD areas will be designated by next summer.
Why would Oak Bay be fourplex only? Is this because we don’t know where sixplexes might be permitted yet?
We’re talking mostly about missing middle here, but the eventual alignment of zoning to updated OCP is potentially a much bigger deal. Would have cut 10 years out of the Quest approval time, and allowed them to go 8 floors instead of 4
Oak Bay is four-plex, Fairfield is six-plex. They are starting to work for the builders coming from Vancouver, just not for me personally. I actually think you are far better off paying $1.1 million in Fairfield than $900k in Oaklands if doing a strata as I think you would make up the $200k difference just on one 1,000 sq.ft. condo due to location premium. Like you might get a million for a nice ground floor unit in Fairfield, but are you getting even 800k in the Oaklands area for the same unit?
I want to do build a rental so I am not super set on Fairfield, I would gladly do Oaklands for the right price but still too expensive when I look at land+construction costs+headache+etc., vs buying 6 condos.
That is good information. What it means is that Oak Bay and Fairfield probably don’t work as even a teardown is more expensive than this. Fernwood and Oaklands seem to have some places that might fit except usually they have 50′ lots. Otherwise Burnside/Gorge/Esquimalt/Quadra/Hillside?
I know one Vancouver builder has bought three so far.
Marko thanks I thought i missed something on density . I myself am in a pickle wanting to sell but going back and forth on holding on for future development , I can’t be the only one
Surprisingly enough they were coming over just for the previous missing middle policy which was marginal. Talked to a guy that had bought a half dozen lots in the summer.
60′ just a lot easier to design the driveway down the side, parking in back, building is 10′ wider, lot is bigger in general, etc.
I might have missed something what’s the difference build wise between a 50 and 60 foot lot
Yes, they are around. The one that sold yesterday in Fairfield and you have other 60’ers on market examples such as this one -> https://www.realtor.ca/real-estate/26029756/1436-myrtle-ave-victoria-oaklands
I would pay 900k for a 60′ teardown and low 700k for a 50′ in the right location but seeing every one of these being represented by a buyers agent from Vancouver I don’t think we will get there unfortunately. At some point it just makes more sense to buy 6 condos and forgo the headache.
I wasn’t anticipating the Vancouver builders coming over but after some research I can see why they are coming over. Check out the pricing on missing middle lots in Vancouver and this is one busy street -> https://www.realtor.ca/real-estate/26131558/5829-granville-street-vancouver
Descirption notes you can rent the home for $4,000 to help with the $5.2 million purchase price! Or you can come to Victoria buy the MMI lot in a premium area like Fairfield for $1.1 million and rent the house for $3,500 for a couple of years while you wait for a building permit. Not to mention you have exist strategies such as fixing up and home and flipping it or even just building a high-end SFH all doable at $1.1 purchase price, not at $5.2 on a busy street even in Vancouver.
Any 60 foot wide lots? Or those with old un-updated homes in certain areas?
Ya the ball is just starting to roll for banks to get hammered . They must have a plan to kick deadbeat customers out the door , cause they aren’t a charity
So far builders/developers (primarily from Vancouver) are buying up the 60′ wide lots in the COV. Haven’t seen missing middle appetite for the 50’ers yet. A number of 50’ers sitting at $799k not going anywhere.
Ya, it’s going to be a good time to buy some preferred shares over the next couple of reporting periods for Cdn banks.
Scotiabank getting antsy about loan losses
Good post.
Probably one of the most important in terms of trying to understand where things are going in the long term.