March Market Update
It’s the start of the spring market, and so far it’s a little lacklustre. Sales in March came in exactly where they were a year ago, which is a relative level they’ve been stuck at for over a year now: at the lower end of the historical range.
588 sales is essentially the same as what we had in 2014, but back then there were still over 4000 listings on the market, while today we have 2647, though the market still seems to be slowly cooling if you look at the medium term. But it gives some perspective on what a real buyers market looks like, and we’re not there today.
New listings started out the month very strong but cooled off a little in end, ending up at 1310 for the month, up 17% from a year ago. That’s a healthy level and better than we’ve seen in most of the last decade, but only enough to get into the middle of the 20 year historical range for this time of year.
Sales were generally up a little bit on a seasonally adjusted basis, but we’re within the levels of noise here. Overall sales levels are not far off of where they’ve been since spring of 2022 when rates started to bite.
Slow but steady sales combined with reasonable new listings means it looks like we’ll avoid the inventory dip that we had last spring. Inventory is rising not just on an absolute level (as it does every spring), but also on a seasonally adjusted level. Better selection now than we’ve had in years, but it’s still middle of the road compared to where we were a decade ago.
Seasonally adjusted months of inventory has been pretty unchanged since the sharp recovery from a weak fall.
That means the drop in months of inventory from 4 in February to 3.5 in March was nearly all just seasonality. Perhaps eventually I’ll switch to using seasonally adjusted values in this market gauge, but it doesn’t make a lot of difference. Either way we are in the middle of sellers market territory in March.
Generally this kind of market is associated with price gains, and if you look at detached housing, it’s certainly strengthened quite a bit since the fall, with the median place selling for 2% above current assessed value compared to 7% below in November. Townhouses too are doing well, with prices and sales relative to assessed value being up in recent months. Condos meanwhile have been a little more steady, with the median sale at 1% over assessed value, compared to 1% below at the end of last year. Because there’s less variation in condo age and condition, I suspect we’re seeing less impact from a change of sales mix by season there.
Overall the market is likely putting some positive price pressure on most properties, though realistically prices aren’t that different from where they’ve been since the initial rate shock took the mania out of the market. I wouldn’t be surprised if that positive price pressure doesn’t persist past the spring market. It’s going to take a material change in rates to really make a difference here.
So little changed in overall market conditions in March, but as we race into a provincial election followed by a federal one next year, the big unknown is what policy is yet to come. With David Eby’s NDP still “nowhere near satisfied” on housing, and the federal Liberals in full panic mode to turn poor polling around by next year, I expect there’s going to be a lot more reforms to come.
Today the province announced increased protections for tenants and landlords, in my view mostly sensible but minor tweaks to increase protections against bad-faith evictions, and announce a reduction in the waiting time at the RTB for disputes. It’s a tricky balance between protecting tenants and landlords in the province right now. BC tenants are exposed to some of the highest forced move rates in the country with the biggest single cause of evictions being owners using the property (whether themselves, or selling to owner-occupiers). Improving security of tenure for tenants is important to level the playing field between owners and renters while more secure purpose built rentals are built. At the same time the policies can’t be too lopsided, and landlords need realistic options for dealing with problematic or non-paying tenants. Reductions in wait times at the RTB is a step in the right direction, but ideally there would be a guaranteed maximum time for deciding on these disputes, with associated guaranteed timelines for court enforcement if necessary. That would significantly reduce the risk from bad actors in the system.
Meanwhile the federal Liberals have announced several big supply side housing reforms, essentially copying what BC is in the process of doing at the provincial level and using it as a model to bribe other provinces to do the same. They are pushing provinces to legalize four units per lot as the minimum density as well as greater density near transit. In exchange for that they will put up additional funding for the requisite infrastructure. This is essentially a provincial version of the Housing Accelerator Fund which has been handing out funding to municipalities in exchange for reforms to allow more housing. The deadline for provinces to sign those deals is the start of 2025, with money not allocated to provinces being redistributed to individual cities that are willing to commit to the reforms. It’s a smart program in my books given land use is set at the provincial level and it’s easier to set minimum standards there rather than going city by city with many more opportunities to bungle the implementation.
The federal supply reforms and about-face on immigration is likely too late to save their political bacon, but it has been odd to see the Liberals implementing many of the CPC ideas, while conservative provinces are becoming negatively polarized against them. It’s another demonstration that the focus on housing reforms is not a left-right partisan issue, but more of a generational one. Political parties are still uncertain whether it will be more advantageous to play to younger voters frustrated with record housing costs, or play it safe to keep comfortably housed voters on their side. Expect a lot more turmoil on the politics of housing going forward.
New post: https://househuntvictoria.ca/2024/04/08/vancouver-premium-fades-but-its-still-a-lot-of-money/
Correct me if I am wrong here, but it seems like if I am buying a house with tenants in it I will have to delay the close for at least four mounts to get vacant possession and there is nothing to guarentee that they will be out by then. If they appeal the eviction at the last minute it could take months to get them out or I walk away from the deal after perhaps having already sold my house. ( if I walk away from the deal do the tenants get another four months when there is a new offer?)
Here’s an up island water cooler anecdotal gossip for what it’s worth. A mover in Parksville/Qualicum was musing in the barber shop that he has 3 moves next week to empty out houses on direction of the court bailiffs and it’s becoming more common.
I would not be into these small units which have no parking yet are right on the parking lot at ground level with people coming and going. Like getting a condo over the underground parking access.
Probably just long closes… while it’s good for advertising for the realtor no one will want a sold sign on their newly bought house unless they were being paid for it.
Patrick. It is still like that here in Ucluelet. That is something in our bylaw and seems pretty common (10×10). The building code is primarily relating to life safety. Any building that is to be lived in needs to meet code and be permitted regardless of size.
Walking around oak bay I’m seeing sold signs on some stuff that seemed to be hanging around . Yet sales are still sluggish, looks can be deceiving
Marko-$11,000 property taxes!!! Is that correct?
You have certain segments that are defintively well supplied such as Langford townhomes; however, in the core you don’t see such supply of newer townhomes.
Market is difficult to read right now. A one bedroom just sold in my building today for $692,500 and while it is a nice building you can buy a two bed two bath corner unit downtown for less in a similar vintage building.
Another interesting listing I don’t know what to make of -> https://www.realtor.ca/real-estate/26720697/10-907-redfern-st-w-victoria-fairfield-east
Seems to be lots of stale listings in certain segments, unsuited but renoed older houses (prior to 2000) in the core seem to be sitting at the 1.3/1.4 range with no bites.
and speaking of the supply not being in the right places….just wrote an offer for a young couple on a place where it looks like it will end up with between 5 and 8 offers today.
Right, also partially an artifact of the weekday/weekend change compared to the Monday a year ago. New lists a third higher.
There were a lot of re-lists to start the month. Active inventory would have gone up higher if it wasn’t for the re-lists coming on market as “new listings.” Also, inventory not in the right places. SFHs under $1,00,000 in the core still in tight supply.
Wow, those new listings are off the hook.
Mine actually look more like this but with a steeper pitch and a floor built In. Notice how the top and bottom chords are parallel unlike a sissor truss. No need for perlins for the cross flow and they are engineered. Inspectors like engineered.
They didn’t even ask me what I was using It for. I just went up there and applied for a building permit to construct an accessory building. They just asked me If I would be heating It, I said no
Being Langford I had my building permit In two weeks.
That’s exactly what I did, only I called It an accessory building. 18′ x 26′ with a 12/12 parachord truss system.
Yes, when we poured the slab we covered all the abs drains with a thin layer of concrete that Is tied Into the main house 4″ sewer line.
I call It inching In.
LMAO, if one is familiar with local construction then they would be well aware of all the sketchy work arounds people do when it comes to municipal permitting. I have seen false floors being put in on entire basements in an attempt to fool inspectors. thin concrete fill to cover up plumbing outlets is another common one.
Alberta won’t be ‘bribed by federal money’ on housing policy, minister says
https://www.youtube.com/watch?v=CcCxEyhsAvc
This minister makes a good point the reporter can’t seem to acknowledge, environmentally friendly construction policies will increase costs, plain and simple.
Great idea for a biology report and we should make it mandatory to have a full archeological survey of the property. An airspace study for any possible impacts on either bee or hummingbird flight paths would be good. Plus a twenty year program where you agree to having affordable rent controls.
Patrick , if my memory serves me correctly, I think the 100 sq is for the roof and not the foot print . If I was wanting to be sneaky I would get a permit for a garage , as they are easier and then be creative
Your Coles Notes are missing all the awesome government policies at the various levels that encourage building of such! Want to try to save a bit of money by not hiring an experienced/HPO registered builder? That’s awesome, the BC Government forces you to memorize the code book and write a complete non-sense “owner-builder” exam not required anywhere else in the world. Don’t worry they are doing you a favour by forcing you the hire an experience builder. At the same time they are making it incredibly difficult for a builder to become licensed, so not too worry smaller pool of only the most experienced builders to pick from.
Then municipalities will do you a solid favour by making you wait a year or so for a building permit while construction costs go up. They will also help you out by forcing you to hire various consultants such as an arborist so he or she can make sure the tree fifty feet away on the neighbours’ property is not impacted by you garden suite. I am surprised a biology report is not yet mandatory so we can make sure squirrel ecohabitates are not distributed.
O.K., for those that nitpick 2 million is not the actual average price of a SFH but 2 million does not exactly buy you a mansion.
Woah, but the science is based on assumptions, and of course people need to ask why those should simply be assumed to be true.
E.g.
Why are particles charged in the first place?
Why do objects with mass and energy attract each other gravitationally? (Yes, we can precisely measure and predict gravity forces, but that’s not the question)
here’s what I’ve been taught…
The Answer is: No one knows. That’s just the way the universe works.
And I’ll bow out of the physics discussion now, as obviously I’m in way over my head 🙂 But I do hope we get a reply from Kristan (U Vic. Physics) , as he’s one of the top experts in the world on topics like this.
There’s a good reason the house in Duncan is affordable. Location. Don’t buy it.
I must have missed that. Congrats!
If you want a first-hand account of how this is likely to go for you I recommend reading this series:
https://www.francesbula.com/uncategorized/building-an-infill-laneway-part-3-the-part-where-i-pay-all-the-bills-and-the-construction-happens/
Coles Notes – initial estimate was about 350k but final cost was over 500k – using an experienced builder. The municipal permits were about 35k and site prep was 60k.
A 300 square foot ADU is going to be higher per square foot than a larger one because permitting and servicing fees will not be scaled to size. In addition, bathrooms and kitchens cost more relative to ex. additional bedrooms and you’ll need both of these.
When we looked into it we came to the conclusion that it made zero sense to do this as a rental or for resale purposes due to loss of privacy, capital gains issues, high PITA component with building, and negative ROI. It can make sense if you do it for family purposes so that your adult children can move into your house and you retire to the ADU.
Under the current system, the tenant has 2 months to “further trash” the house , so cash-for-keys might be a good idea with the current system too.
Haven’t visited for a while, and then popped in this morning, and what do you know, a discussion about magnetism. 🙂 Two things:
Depending on what you mean, yes, “why” isn’t a scientific question. But in physics it’s a bit beside the point. We have effective and predictive descriptions of Nature that, in the case of magnetism, match between theory and experiment remarkably well. To 12 digit precision in the case of the anomalous magnetic moment of the electron, the most precise agreement between theory and experiment in all of basic science.
About preventative health care, let me echo Totoro above about the importance of preventative care. Now that we got the housing thing taken care of, that is the only thing that spooks us about living here relative to the States or Europe..
🙂
I mean, no, because that is not how averages work.
and throw in the potential factor coming up of if you wrote an offer on this property today you would not have vacant possession until September 1st. Sure, your agent can write in that the property has to be delivered in the same condition as viewed today (which also in the fine print of the contract), but good luck dealing with that if the property is further trashed by September 1st.
As I said I always thought the agent who worked with his clients in Vancouver to reach a mutual end to tenancy with the tenants prior to listing was a little too much; however, if it goes to four months’ notice I think it is something I will try suggesting to my sellers here in Victoria.
If you pay about $1,000, you can get a MRI done within 2 weeks in Surrey BC. You need a doctor to order the MRI of course. If you go the private route, you’ll shorten the line for people waiting for MRI in the public system.
https://www.accessmri.com/
I built my own MRI and put it in the small house I built in my backyard.
In Canada, many people die waiting for an MRI.
That’s what’s called “staging “ in the industry.
This isn’t an informationally valuable post or anything, but….we are currently looking at houses with our realtor in the CVRD. Went to a second showing of a house in our price range in Duncan. It ticks almost all of our boxes. Problem is, it’s a rental and as we understand it, it’s a single mom who travels for work and leaves three teenaged boys at home.
The place is trashed. Floors are beat to hell, trim is beat to hell, dishwasher is beat to hell, stairs/paint/everything is beat to hell. Besides what looks like these cosmetic problems, it ticks a lot of boxes. I think the mother was away this week because we went into one of the kids bedrooms and an overwhelming smell of vomit came out like a punch in the gut. That sort of vomit that’s mixed with alcohol. As a former booze bag, I can identify it a mile away. It seems like the kids had a party the night before and didn’t clean up “everything.” I feel awful for the landlord in this situation. It really took us from “we could fix this place up and make it our own” to being almost completely turned off. It was disgusting.
What’s the biggest and most functional accessory building you can put up with no permit needed – just build it. I haven’t checked recently, but in the old days it seemed like a 10’ x 10’ (feet) building required no permit, as it could be a “garden shed”. No plumbing allowed, and no one is supposed to live in it. Is it still like that?
Nope. It’s like magnets. No one knows how it works.
2 million gets you a pretty average house at best.
A dwelling unit either needs to meet current building code or if it’s a trailer there is a different certification. and then it still needs seismic anchoring to a strip footing. If it’s an rv type thing then the best you can get is a 6 month temporary use permit. The answer to is there a cheap way to do it the answer is no. I designed the first backyard ADU where I live and it came out to $500/sq.ft. to drywall stage. ( a little more expensive in this neck of the woods) Had to upgrade the water line to the street and add a meter, which really skewed the numbers. It was a simple 400 sq ft box 2 bedroom one bath. nothing fancy,
For understanding magnetism – it’s the same answer though. On a fundamental level, physicists don’t why or how magnetism works. The underlying quantum physics to explain how /why it works is complicated and still leaves fundamental questions unanswered. Feynman talks about that in the video I linked. If he can’t explain that to you, I sure can’t.
Agreed, Thanks for the info. 25% of active listings being >$2m does seem like a lot for the market to digest.
Yes but “how” is not the same question as “why”. You don’t need to be a philosopher to explain how an electric motor or generator works.
In the time period I referenced (last two years), the % of detached properties that are over $2m is pretty constant.
Granted you could argue that the top quarter of detached listings is too generous to use as a luxury cutoff. That said, detached properties of any kind are a luxury for most.
Unfortunately no easy way to pull 2x median by month.
Meh, fast ferries wasn’t a scandal, it was just incompetence (when a minister directs the ferries to be built stumpier because it will save cost on having to refit terminals resulting in the ferries vibration problems). The scandals were more like when a person who built a free deck at the house of the premier ended up with a casino license; somehow a NDP insider managed to buy the land meant for the Duke Point ferry terminal and then sold it to government at a tidy profit; the big money made by party linked folks on the BC Hydro Pakistan deal and so on, and so on…….. But BC just seems to like corruption no matter the party with the SoCreds and Fantasy Gardens and who could forget sale of BC Rail by the libs. Employing family members at railway company for a decade after at a railroad with no rail… Oh, BC, we like our crooks where we can see them, in places of public trust. Oh, I almost forgot, how all the parties ignored the non-profit org that paid for the director’s family’s vacation (that included a MLA) because no one wants to lose those lush post electoral jobs at government funded non-profits and NGOs no matter what party affiliation they belong.
Mt Tolmie’s comment may seem odd, but is a reasonable answer. Famous physicist Richard Feynman gives a similar answer when someone asks him a “why” question about magnets. Feynman tells him “the more you ask why, the deeper and more interesting the question becomes”. Kristan can correct me if I’m wrong, but I think at some level magnetism still isn’t fully understood by anyone, in that it requires assumptions about other things that aren’t understood.
https://youtu.be/MO0r930Sn_8?si=r2zYiVI_XWZL_-zW
Those stats are skewed by price changes, as you mentioned. So we see more “luxury” listings simply from overall price increases. Years ago, when I had a filter to receive listings over $2m, most of them were barely above $2m.
The solution would be to define luxury as >2X the median price (instead of >$2m), and so then the bar would get raised with price increases.
Short answer: yes. Luxury inventory up 120% since two years ago, and prices are down since then so the increase is more than that. Then again total inventory is up 168% since then.
If one spends enough time on the internet, all sorts of conspiracies can be found….
Dee , I think I read an article in Vancouver about someone who moved out her house and into her newly renovated garage and it was 500 grand . She seemed really happy with her life choice . Cost can be fuzzy cause once you start wanting to put in a bathroom , or a kitchen or even a panel you probably have to do an upgrade to the road and then some .
I didn’t think it would be easy/straight forward. I’m also curious as to how it works to add a pre-fab structure to a backyard. Like, pouring a foundation, running septic, and then adding say a pre-fab. Like one of these: https://creativecontainerslodging.com/our-products/large-container-homes/the-cabin-large/
Does anyone know what it costs to get to the point where you can add a pre-fab that has say a 300 square foot footprint? I mean, running sewer/water and electrical, just out to a backyard from a house that has all that. Just like a ballpark.
No reason to be sorry, I don’t really care. If It happens…great.
Max , sorry but that’s just a bunch of gibberish that’s not baked in reality . Government at all levels spew that same b.s all the time until you submit your permit .
I have been digging on it and it’s tough getting straight answers. They are mostly considered trailers or RVs by most municipalities and are not allowed as full time accommodation (there were COVID era exemptions in some municipalities, but those seem expired for the most part). The City of Victoria has the tiny home junkie park next to Royal Athletic that they temporarily keep extending permission to keep active. There was some push by last Vic council to allow them on residential lots, but that has seemed to have fallen off. Most what I have read in bylaws seems to allow temporary trailers on residential lots during construction for around 6 months at a time (with approval and conditions to be met). However, I believe every municipality is different. I only looked at it because some of the places I was considering buying were massive Renos, so I actually haven’t gone through the process. Maybe someone has the direct experience and can comment.
Its actually very easy to do now. Just watch this short youtube clip. I’m not kidding.
I’m thinking about getting a couple In my backyard for the kids.
I am sure there will be grants coming soon. Or zero Interest loans for 10-15 years.
Of coarse the Municipalities will have to step up and allow these accessory structures to be tied Into the existing main house’s sewer, storm, water, electric systems… Otherwise that would be bad press…In the middle of a housing crisis.
Its also very convenient how the existing currently zoned single-family-house Is on the table for higher density In BC.
Just to be clear again…
-Justin Trudeau will not be getting my vote.
-David Eby will not be getting my vote.
-Scott Goodmanson will not be getting my vote.
https://www.youtube.com/watch?v=L5bfqzhRGZg
https://www.pm.gc.ca/en/news/news-releases/2024/04/05/changing-how-we-buildhomescanada
Does anyone know how it works if you put a tiny house in your backyard? Like, do you have to run plumbing to it or is there a way to make it completely self contained (like a trailer would be)? I ask because I’m wondering if there’s a cheap way to put something in our backyard so our current tenant can move into it.
They don’t want to say Its a clean, free, perpetual energy source! JP Morgan made Tesla go BK. JP Morgan manufactured copper wire.
Nikola Tesla’s energy creation was completely wireless.
https://www.britannica.com/biography/Nikola-Tesla
Scientists babble on about spinning electrons and quantum fields because they don’t want to say it is magic.
When I was a kid preparing to write my Inter Provincial exam, there were guys on campus selling cheat sheets for $25.
Basically a thousand questions with the answers, when only 50 would be on the exam (they rotate the questions). I bought one and had my girlfriend (now Wife) read them to me. I dialed It, 98% on my final.
Frankly because of preventative health care at the Mayo when I was in my early sixties an extremely serious condition was both discovered and completely fixed. I guess I could have waited for symptom’s to show up although in almost all cases the first symptom is sudden death.
Meh, this isn’t super surprising whatsoever. When people sign up for the owner builder exam through BC Housing the BC Housing portal offers a third party “owner builder exam preperation” online course for $799, aka printing money, through a third party provider.
Who do you think consulted on 100% completely useless owner builder exam?
There is a ton of stuff like this going on people are just too dumb to see it. I find it hard to believe BC Housing was buying $26 million dollar hotels they are tearing down with a market value of $10 million without something fishy going on, but literally no one questions it.
11 emails this weekend from owner builders, people getting royal screwed by BC Housing for no reason, but you can bet someone is selling that $799 course!
Odd thing to say. Nobody understands electromagnetism?
Historical note: the original name for MRI was Nuclear Magnetic Resonance or NMR which is more descriptive. However this scared many members of the public who wrongly assumed that it involved the use of radioactive isotopes. Thus the change to a less scary name.
“Interesting video …
https://twitter.com/jenniferelle_/status/1776469433055150094”
Super bad look for the NDP not wanting to investigate what was going on. Raises questions of corruption and reminds me of the 90s and the Fast Ferry scandal.
People will demand independent investigator that is not reportable to any political group. Also makes me wonder what else they are covering up.
I’m sure more will come out this week, yikes!
Welcome to BC.
https://www.canada.ca/en/health-canada/news/2021/02/government-of-canada-supports-four-safer-drug-supply-projects-in-british-columbia.html
Then there Is This…
https://lailagoodridgemp.ca/2024/01/11/trudeau-government-silent-while-his-ndp-friends-give-free-fentanyl-to-children/
Your 10 year old child can go down and get free fentanyl from the BC Government and there Is nothing the parents can do about It.
If you have young children I strongly suggest you pull them out of public school and home school them. Even private schools. There Is a huge Indoctrination campaign going on right now with our children. If you cannot see this you are blind.
The Government Is blaming this on the pandemic, How kids were shut In for months and turned to substance abuse which Is complete bullshit. This Is the oxycontin epidemic x 10.
Interesting video …
https://twitter.com/jenniferelle_/status/1776469433055150094
It looks like the Island will be fine.
https://www.ctvnews.ca/climate-and-environment/first-of-its-kind-map-outlines-canada-s-future-flood-zones-1.5655929
I think I’ll go Into work tomorrow.
Shit like this has happened before.
https://www.forbes.com/sites/jimdobson/2017/06/10/the-shocking-doomsday-maps-of-the-world-and-the-billionaire-escape-plans/?sh=2b22c4184047
Perhaps the Wife Is correct.
Thanks for that. I think magnets could create perpetual energy.
Dogs can’t have MRIs. But Cats can.
My Wife thinks I shouldn’t go Into work tomorrow because we have a solar eclipse coming tomorrow…With a couple comets.
She stocked up on a bunch of food and batteries and pulled out a bunch of cash.
MRI and CAT scan are different.
CAT scan is an x-ray; you don’t want that without a good reason.
MRI involves magnets. Nobody knows how magnets work, but there is no risk to them.
I think I’d rather just check out. Leave the money for the kids. I am going have to meet my maker sooner or later.
With the health care in crises , very little preventive care is being done . If u want preventive u have to pay for it , as it’s easily available , that’s the beauty of money
How much for a full body MRI with extended health coverage In Canada? This Is a CAT scan, correct?
The reason I know about the private full body MRI is because my uncle had one done after his wife died at a young age. It turned out that she had something festering and by the time it was detected it was too late. She was a very sweet and kind woman and my uncle was traumatized. Also, he has a fair bit of money so can afford the testing.
Totoro- Exactly, doctors are pressured to ration services and procedures. My friend had a stroke in Buffalo 1.5 years ago and they detected a hole in his heart which they would have treated immediately but his insurance didn’t cover it. He’s still waiting here for the procedure, his doctor has to go in front of a committee to get approval. Our system sucks. People who are able to pay for care should be able to access it here. Many are going to the U.S. or other countries.
Parksville Is only an hour and a half away…They do Airbnb. Even Shawnigan lake which Is only 20 minuets away does Airbnb.
All health professionals in Canada are taught this. It is partly accurate but largely because our system is publicly funded and rationed. In the US you get extensive testing, including preventative, if you have good health insurance. This is for the same things doctors won’t test for in Canada because US insured care is not as rationed and doctors get sued for missing things.
In my opinion, there is no way that skipping testing leads to better health outcomes. However, extensive testing does usually result in the need for more testing to confirm or rule out issues and so it is much more expensive. We don’t have the resources in Canada to support this approach. Starting this year we will go for full medical testing and pay privately in Asia.
As an aside, many countries offer low cost annual comprehensive preventative medical testing and screening. When I worked in Asia my employer required all employees to do this and provided a scheduled time to attend.
For every action there is a reaction and despite the environment for landlords being less favorable going forward I won’t be selling my rental properties anytime soon. Long term it will simply result in even higher rents.
In the last two weeks a couple of people have approached me outside asking me if any of my units on the street are going to be vacant coming up. I live on a street where a lot of retirees bought from across Canada and a lot of them have family/friends that visit for a few weeks and now that the Airbnb options have vanished due to the ban I see people posting notes on the strata bulletin boards, asking me about my units, etc. Only lady I talked to is putting up her daughter and granddaughter at the Delta in May.
Huge opportunity for people that like to travel to STR their principal residence imo, especially a condo in a desirable location.
Won’t that come out In the blood work? It should be noted that I don’t think I am dying.
When I did my masters of health admin @ UBC this was really engrained in us (statically doesn’t make sense to order certain diagnostics, etc.); however, the more time I spend in Croatia where most people have a yearly physical/systematical including diagnostics such as routine yearly abdominal ultrasound, etc., the more I am not opposed to it to such when it comes to my family and myself.
Lots of people I’ve come across now in Croatia that have had surgery and they had no symptoms as it was picked up early on the yearly physical.
Beyond that, how do you go see a family doc for those of us that don’t have one?
Most countries you can walk into equivalent of Lifelabs and get any test you want done. If you have a requisition you don’t pay and if you do you just pay out of pocket.
The fees for the public guardian can be really high. I agree with Totoro go see a lawyer and do it right.
Catching a serious medical problem really early is super important and can make a radical difference in outcomes.
First and last months rent plus damage deposit…Its not really 15k.
Max, there is no reason for you to have an MRI or any other fancy expensive scans without an indication. Go see to your family doc and he can check you out and order any appropriate tests based on your age, family history, lifestyle ( smoking, alcohol } etc. etc.
They are entitled to under wesa but if you have not appointed a guardian because you don’t have a will is possible that the public guardian and trustee will step in and hold the funds for your minor child. And charge fees. You do not want this. Do a will.
Thanks. We have a family practitioner. We also have extended health care. I will phone my Doctor and book Lifelabs.
That’s as far as I’m going…Just the blood work for now.
I know my life Insurance Is going to want blood work anyway. Once you turn 50, Its a requirement.
I also do not like going Into narrow tubes, so the MRI is out…I would rather have my will in place and die.
@Max Lifelabs requires requisitions as far as I know. If you don’t have a family doctor some naturopaths can give requisitions. They can sometimes requisition for things that GPs can’t under MSP.
And, if you want a private MRI, there’s this thing in Vancouver: https://www.prenuvo.com/the-scan
I think you can book the prenuvo scan privately (without referral)? I also think it’s expensive.
My uncle was found months after. He was melted Into the couch. My Cousin, his Son finally did a wellness check …He was horrified.
I’m pretty sure he’ll be f@#ked up for life after seeing that shit.
At the auction house I deal with, they have a contract to deal with the public trustees. They are required to hunt high and low for any distant relatives. A neighbor passed away 2 years ago, he had won a lottery and left $3.8 million in the bank with no will or relatives. The money will probably go to the government, I believe it is still in limbo. You wouldn’t believe how many estates come in with no immediate relatives and no will. A lot of people are found days or weeks after they die.
If you search “WESA” Max a lot of those questions are answered there. BC had a whole sale change or update to the rules a decade or two ago.
Basically, yes. Unless they have issues. Maybe a trust fund would be more suitable depending on their circumstances. Nothing is simple.
One more quick question. If my Wife and I do die In a car accident, Won’t the kids just Inherit everything automatically?
☮
Average lifespan of an ox is about twenty years.
Quit wasting taxpayer’s money. He’s healthy as an ox.
Also, do a bone density test.
MRI of your chest at this point in your life is a good idea even if you are not a smoker.
And a stress test , u could have A Fib or irregular heart beat
I’m actually surprised my life Insurance hasn’t forced blood work or colonoscopy on me yet.
I did manage to get away without a vasectomy.
Get a colonoscopy while you’re at it. You’re due.
Can you just go Into life labs and have blood work done? Or does my Doctor have to schedule It? I’ve never had blood work done. I’m too scared of the unknown. My Doctor told me I should have blood work done. Is this like a 5 minute thing? I think I might be vitamin B deficient…It runs In my family.
Now you are scaring the shit out of me. I promise the Wife and I will legally (with a lawyer) have our wills drawn up In a professional, legal manner, That Is very clear and easy to understand. We will do this on Monday of next week.
Max, what if both you and your wife die at the same time or within forty-eight hours of each other? That happens more than one might think, usually car accidents. What if at the time of your death you and your wife are legally separated but not yet divorced? (people often neglect to change their wills as circumstances change). Dinner time so I wont go down a long list.
I get It. Its just that time In life when you have to deal with shit like this.
Opportunity cost doesn’t factor into it. Being cash-flow positive doesn’t imply it is the best possible investment. It doesn’t even imply profitability.
Legally, yes.
Morally, not so much.
I agree 100%. I don’t want anything from anyone. I’m good. I just want everything I have to go to my Wife.
Correct but this is a post inheritance issue. If you leave your kid 100k they get it and not their spouse. If the kid uses it to buy a family home with their spouse it becomes a family asset. If you want to control this from beyond the grave you need a family trust and that requires an estate of a certain value to be worthwhile. Significantly above average.
Maybe. My parents have a simple estate. House is the only asset of value. Everything to the surviving spouse and then between the kids equally after the surviving spouse passes. If one of the kids dies first their share to their kids equally. They used the online service to draft their will and it was witnessed in front of a lawyer. I was given a copy and I am the executor. No lawyer advice required to complete or administer imo.
Wills should be drafted in plain language that is easy to understand and, if they are not, then they are probably old and should be updated if possible.
We went over our will with all our children. They understand exactly what will happen and it is written in plain language. My parents did the same with us.
Better to keep it in a home fireproof safe and provide the code to the executor imo. We chose to give our son who is the executor the code. I store my parents and other family members’ wills there as well as I am their executors.
All lawyers get held to the same professional standard as any lawyer who has narrowed their practice to ex. wills and they are liable for any errors.
The estate pays all debts first and the house cannot be sold and transferred to a new owner without paying the property taxes first – they are a lien on the property. Then the remainder is distributed per the will less expenses to administer.
If you want nothing to do with it then you can resign as an executor and another family member can apply to the courts to be executor. If no one else steps up the public guardian and trustee will eventually step in and be appointed as executor by the courts and charge a lot to administer the estate.
Reverse mortgages. Mixed thoughts on that product. It’s like finding out that your mother is hooking up with the pool boy.
Gregonomics I don’t know the answer. Victoria is somewhat unique if not an oddball city. Houses that should have been demolished a decade ago and replaced with homes that better utilize the lots are still standing?
It’s a city that has been left behind with some neighborhoods showing their age and neglect. Areas that look like old Nanaimo which was also left behind as new areas of housing were developed.
@Introvert when the person passes take the will to the lawyer of your choice and see what they say.
If it’s in a safety deposit box and you have a key it can be better not to mention that the person has passed when you go to the bank. Just open the box and retrieve the will. Then, take it straight to a lawyer. If you’re in the condition to do so of course. I can tell you that I was at a lawyer’s office the next day with the disaster of a will that someone left behind. They didn’t know any better and hired a generalist lawyer to draft a will with a trust. It was a disaster and cost the estate over 10K to fix. The will, however, was only $75.
Just go to a lawyer. That’s the answer. It’s one of those things where you spend a little more up front but can save a heck of a lot more in the end.
I don’t think one lawyer can prevent another person from getting legal advice from a different lawyer. I’ve never heard of that.
My experience with wills- Hope for the worst and expect the worst.
Yeah. Kinda like these guys…
https://vancouverisland.ctvnews.ca/massive-superyacht-with-helicopter-pad-docks-in-victoria-1.6419450
I forgot to get to my point: I don’t think half of a house — not upper suites, and definitely not basement suites — are an adequate solution to the affordability issue. Not for families.
Should we give up on other potential solutions (like missing middle)? Maybe. In the short term at least.
But where does that leave Victoria? As a shooting location for “Lifestyles of the Rich and Famous”?
Sorry to jack your post Introvert.
What happens If the parent took out a reverse mortgage and deferred the property taxes for years?
Can you just walk away instead of dealing with this problem?
I’m talking about my Mother here, not my Wife’s Mother.
People should move to Vancouver, which because of its higher density, is much more affordable.
Thanks for your replies, Dee and totoro.
I am the executor of a close family member’s will. The will was drawn up by a lawyer. It’s been a while since I read the will, but I seem to recall there being quite a bit of legalese in some parts of it. It gave me the sense that the lawyer is anticipating that I, the executor, will be induced to come to him, the lawyer, for advice and/or assistance in executing the will, when the time comes.
Thoughts?
Good. Go. The less people on this Island, the better!
Totoro: Inheritances are not considered family property unless they become merged or used as family assets in whole or in part. This is a far more complicated area of law than one would at first instance expect. As always, I really hope that people are not taking legal advise from this or any other blog if for no other reason than that the devil is in the details.
@whatever
I am acutely aware of the (un)affordability of this city for families. I have commented before that I think it’s a bad idea to start/move a family here, except under exceptional circumstances (very high income/wealth, or unlimited unsolicited support from family).
Has it already caused families to move away or not move to the city? Don’t know. It’s only the last couple of years that unaffordability has gone from very to off-the-charts.
Will it have that effect in the next few years? Very likely, if affordability stays where it is, and people do their homework before moving here.
Will anyone care? Probably not. Not until the last doctor leaves and we can’t attract another one.
They’re not supposed to. They are supposed to keep up with municipal and school budgets.
Being an old lefty I’ve never judged people on their economic circumstances and in particular I had a house with a suite for a while myself. Just telling you what common social views were. Got out of the suite business not because of any social views, but because I was tired of it and I could.
Careful when you say “never”. During the 1930’s in Vancouver houses sold for about 3x annual rent, and Victoria was likely similar.
Looking at more recent times, I think you still could have pulled it off at some points prior to 2000 or so. If not right at the time of purchase, within a few years.
Not necessarily. Make sure the current will has a codicil that explains adequate and accurate reasons for any unequal division among ex. adult children. The main grounds for disinheriting an adult child include the child exhibiting poor conduct against the parent, they were estranged from the parent for reasons that the parent did not contribute to, or the parent already gave more to one child than the other before they died.
I understand the comments that the government should have seen this coming forty years ago. But no one did as it was thought that condominiums would replace purpose built apartment buildings. They would become the poor man’s apartment building for those that could not afford to purchase a purposed built apartment complex.
If someone forty years ago had the forethought of espousing what is currently happening in the market place they would have been ridiculed as it was the common believe then that the marketplace would take care of itself. That user fees were the solution to all our woes and therefore the developers should pay all of the development cost charges and more for improving the neighborhood and not property owners that also benefited from local improvements. For some that view has not changed.
I do agree with user fees, however they have been abused by municipalities in order to keep property taxes from significantly increasing. They were used as a way to balance city budgets and ensure that the politicians would have a shot of being re-elected. The quickest way to get booted out as a politician is to raise taxes. Here is a typical Victoria House and the taxes for each year. You can see how property taxes have not kept up with the increase in property values.
2023 $1,290,000 $5,726
2022 $1,220,000 $5,579
2021 $1,054,000 $5,472
2020 $957,000 $4,924
2019 $1,024,000 $5,217
2018 $999,000 $5,297
2017 $791,000 $4,688
2016 $623,000 $4,354
2015 $597,000 $4,346
2014 $570,000 $4,197
2013 $0 $4,033
2012 $600,000 $3,997
2011 $576,000 $3,722
2010 $546,000 $3,536
2009 $544,000 $3,455
2008 $544,000 $3,321
2007 $476,000 $3,083
2006 $403,000 $2,942
2005 $354,000 $2,911
2004 $281,000 $2,670
2003 $245,000 $2,523
2002 $227,000 $2,460
2001 $221,000 $2,343
These guys broke Into my house with their kids and won’t leave…Officer.
I’m pretty sure we can just walk away.
Hire a company to deal with the hoarded stuff using the funds from the estate. There are a number of them. They will sell some stuff and get rid of the rest.
We are different generations and it shows. Your generation came of age when a two income family could afford a single family home without a suite and this was considered the right way to live and “superior”.
I and people I know have not viewed people who had a vacant suite as socially superior. In fact, many of my generation view a large single family home housing two seniors as a form of social inequality.
People I know in Victoria who are in my cohort and who rented out a suite did not feel social pressure not to do so in the past. It was viewed as a reasonable thing to do to afford a home and providing accommodation was considered a positive. People often continued to rent a suite long past economic necessity and used the funds for ex. retirement and to help family.
Logically, renting out at fair prices in accordance with the RTB rules should be considered pro-social. It helps people become owners and it houses renters who are facing severe housing shortages at a low or no cost to taxpayers.
Now that renting is portrayed in media as some sort of evil endeavor which takes advantage of others there has been a shift in sentiment. People who can afford it would rather not be branded as selfish and avaricious. People who need the income will continue to rent out suites for as long as they need the income, but feel the stigma if they are oriented towards upholding the social contract.
I’d argue that you need to incentivize prosocial landlords and disincentivize unscrupulous ones. Current policy throws the baby out with the bathwater.
“A lot of rental units for small landlords are no longer cash positive”
If by “small landlord” we are speaking of someone in Victoria who rents out a single condo or detached home, there has never been a case where that single unit is cash positive. Those who tell you they are cash positive are (wilfully?) blind to the opportunity cost of their equity. Common problem.
The police do remove people who are illegally inhabiting a premises. It wasn’t an eviction, I used the wrong word, they removed them.
What If we don’t want anything at all? My Wife’s Mother Is a super hoarder. We don’t want anything to do with It.
What’s worse Is her Mother thinks all this shit Is worth millions.
She does have some very valuable real estate. We don’t want any of that that either. Were fine.
I know for sure there Is no reverse mortgage and she Is current on her property taxes for her properties.
What happens when they differ their property taxes and have a reverse mortgage?
Honestly I wish we had a rule in bc (and other Canadian jurisdictions) that a certain percentage of a persons estate must go to their children. I believe they have these rules in some European jurisdictions. It would stop so much estate litigation (hopefully).
Sorry Max – she will just have to go through it. She should be able to use funds from the estate for legal advice if she’s the executor.
Police don’t do evictions. Pay attention to details to make a believable story.
Very difficult, time consuming and expensive task. One of the major reasons people never start or stop renting out a suite. The stress cost alone…
“Now”? It’s always been of higher social value to be able to afford your house without renting out part of it.
If you die without a will you are doing your loved ones no favour.
In my opinion it is better to have a will than not have a will and if you are procrastinating and you can do one online today – do it. Do a power of attorney and advanced health care directive too.
BC lawyers use wills & estates software that is pretty much the same as the online will DIY software. Both programs ask very detailed questions and provide clauses to incorporate. The online package also offers an optional add-on final legal review by a lawyer.
In person lawyers can identify tax and estate planning issues that you might need more advice on. That is valuable.
In addition, if you are disinheriting or dividing assets unequally to someone that could challenge the will under the Wills Variation Act I’d use a lawyer – for sure.
This Is what my Wife Is worried about. Her Mother has a will and my Wife Is the executor (and our oldest Son). She also has three siblings that she doesn’t have anything to do with. She already knows they are going to contest the will.
I just want everything to go to my Wife.
My Wife Is the executor of her Mother. Four kids…That’s going to be ugly.
Beneficiaries typically watch over the executor and can sue them if the will is not executed correctly. I am an I executor but would never do this for anyone but a close family member. It is PITA.
In my opinion anyone with even modest assets should pay to get a will done by a lawyer. Remember that if a person cheaps out and there’s a problem the estate will likely have to pay to fix that anyway, which will probably cost more than the will originally. The more assets you have the more you should be willing to spend on a will.
“Who watches over the executor to ensure a will is executed properly?”
It’s common now to have more than one executor. I think that’s at least partly to reduce the chances of any shenanigans. For me personally I have been an executor, I am a trustee, and I am named as an executor. I personally would not agree to act as a co-executor because I don’t have the patience for people’s bs and drama. I just want to get things done and I know that I have integrity. Anyway, there’s also probate and there are ways to challenge a will.
Who watches over the executor to ensure a will is executed properly?
That’s what we have decided to do. I would rather pay a lawyer and have It done right.
There Is no trust Involved.
If there’s a trust involved definitely get a lawyer.
An inheritance is already considered excluded property under section 85 of the BC Family Law Act.
The online service includes the ability to add on a review by a BC lawyer specializing in wills and estates.
I’m not sure if the online service allows you to exert a greater level of control than this over your assets, ie. appoint a trustee to disperse funds only in accordance with your advance instructions, but, if not and you want this then speak with a lawyer.
Having a will through this service is way better than no will and if your situation becomes complicated then you can always change the will through the service or do a new one with a lawyer.
I have 2 kids, 3 cats, a dog, and a Wife. When I was young and renovating the house, we would drag our mattresses out Into the living room beside the woodstove, In front of the tv, and that Is one of my fondest memories. Make It work.
Max: not the cheapest but I would really recommend a lawyer who specializes in wills especially if there are children and assets. One example, is do you really want to leave it to a child when there is a questionable marriage? There can be a host of other issues which you are often not even aware of when making a will.
I am a retired lawyer and I would not dream of drafting my own will since it was not my area of expertise.
At least give it some thought.
Yes, you can “terminate “ the lease but can you get rid of them. If they do any damage, your insurance won’t cover you. Heard about someone who rented a house to someone who never paid any rent. When he went to collect, he was met by several men who said they were told they could stay there for free. He had the police evict them and they burnt the place down that night. Like I said, the more this happens, the fewer investors will want to rent to anybody. And the crisis will get much worse.
Renting the main floor or basement of a house is the only option available to a family of three or more due to the lack of three-bedroom apartments in Greater Victoria. That’s another cause of the affordability problem. It may be possible to rent a purpose built two-bedroom apartment for $2,600 a month but when you need three-bedrooms then that extra 10 x 10 feet room jumps the cost up to to $3,500 a month plus utilities and that makes Victoria unaffordable for most families.
As it is now there is an abundance of one-bedroom suites available and I have noticed that the rent for one-bedroom purpose built apartments has come down a smidge. Oddly enough one could rent two one-bedroom suites and still pay slightly less rent than for a three-bedroom in a house in Victoria. This discourages young families to move to Victoria and encourages others to leave Victoria for better opportunities either Up Island or Alberta.
If we are having or start to have a net loss of young families to other parts of the country that will have an effect on our local city economy as families are big time spenders. As it is now, when a couple starts a family in Victoria City their options of buying a three-bedroom strata home or renting one are limited in the city and they move to the Westshore.
Victoria City did have the moniker as the city of newlyweds and nearly dead which is due to the type of housing that dominates the city as most of the older stock of housing is less than adequate for families of three or more. That’s what we have to fix.
I think we might be able to fix that problem by making it easier to build two-bedroom ADU’s. For example, a friend of mine built one for when his adult kids leave home. Then they are going to move into the ADU and rent out their 900 square feet main floor home with a finished basement. Until then they are enjoying the extra income that the ADU generates.
Stop wasting time and money on promoting missing middle housing. Put all of those resources into ADUs with support from CMHC to finance the soft costs of development cost charges at zero percent interest over ten years if the ADU is rented.
Here is a 14 minute video on prefab homes and ADUs
https://youtu.be/vh6VYD9eIeU?si=InOK-COXoZJH_y8n
Thank you 🙂
Cheapest way is to DIY with an online service. https://www.legalwills.ca/
You sound very tired. You also sound very knowledgeable. This Is way off topic, but I think you would know the answer.
When my Wife and I renewed our last 5 year fixed, the loans officer asked us If we had a will In place. We were kind of shocked but we are getting on. My Wife Is 47 and I am 50. My question to you totoro, what Is the cheapest way to have a solid will In place?
It does if this is what your lease stipulates. A breach of this condition is grounds for termination of the lease.
You and how many others. This will lead to fewer rentals of private suites- no question. And if you don’t need the money there is also just a reactionary FU aspect. When someone is being stigmatized unfairly what else would you expect?
Short-sighted not to launch a social campaign to encourage private landlords to rent right now. It is the fastest and cheapest way forward that government actually profits from rather than pays for because of increased tax revenues.
Many people want to help when they feel appreciated for participating in the social contract positively and that what they are doing is needed and makes a difference. People volunteer their time and give to charity because giving back feels good and productive. Right now being a landlord feels high-risk low-reward and increasingly socially unacceptable. It is now of higher social value to have a vacant suite in your house than a tenanted one.
My property manager in Victoria was ex-RCMP, he claimed to be able to screen renters beyond what most people could. Don’t ask me how. Plus they keep better records than I would. You can screen the person applying for the property, doesn’t mean they’re going to live there.
I would not sell a tenanted house without a clause on this myself. If the government makes the notice period four months and there is an appeal process then I would not agree to a vacant tenancy at a specific date but, instead, to give the notice to vacate for that date. That is all that is within my control and I’m not going to expose myself to risks outside of my control which are very expensive and uninsurable. Not worth it.
However, real world, I would probably not try to sell a tenanted property. I would wait for a vacancy or move in for 12 months first.
We prefer self-managing at this point. Our skill sets and experience mean we can handle both tenancies and repairs at a professional level.
A property manager doesn’t protect you from the stress of a bad tenant or preclude you from getting one if you have a screening process, and you end up paying for extra tasks/repairs/disputes at high rates that we are qualified to handle at low cost.
I do see the value in a good property manager later in life, but by that time I’d prefer to not be a landlord at all. Our places will be sold or transferred to family and we are looking at speeding up this process as a result of all the changes and stigma created by a foreseeable housing crisis that should have been a government priority forty years ago.
I’ve been posting here for more than a decade on the housing shortage. If I could see the problem twenty years ago then those with access to stats and data who do forecasting for a living for government certainly should have and maybe did and did nothing.
Then you for sure surrender your 100% capital gains exemption. That Is a business. The primary residence Is supposed to be a 100% tax free Investment vehicle. You eat the Interest, but the principle Is all yours (principle residence). You have to live somewhere anyway, so you should take advantage of this.
When you rent out a basement suite…You marry the tenants. Divorce Is very expensive.
Your idea of reducing the number of suites in houses leading to lower land values and more redevelopment and being a reasonable solution to a housing crisis has some real world flaws I think.
The numbers do not currently support redevelopment and there is a serious shortage of any type of rental housing. Land costs, construction costs, and interest rates are all part of this. Interest rates are the most significant barrier right now imo.
The private market is just never going to meet the demand for need for more affordable and housing even if land costs drop because it is not permitted to rent out a suite in your house for some reason. Any teardown and rebuild is going to command top dollar for sale or rent and displace more affordable housing based on a depreciated structure. The math does not work to create affordable housing even if the land is free as far as I can tell.
The answer is not in the private market or targeting private landlords or suites, it is in a social investment in options like coops and rent geared to income housing and the government needs to step in on this in a big way.
As I’ve said before, what really matters is your mortgage interest payments. Deduct these pro-rata, along with property taxes and other expenses, and your effective tax rate could be very low, zero or even negative.
And that’s what’s going to keep people renting out suites, as long as they need the money.
Except is there a chance that basement suites get a second lease on life because the STR prohibitions now force anyone who wants or needs to stay somewhere for a month or two & needs a kitchen or doesn’t want to live in a hotel ends up having to go to a basement suite?
In which case, for every basement suite that now goes that way, it arguably displaces one that could have been available to long-term tenants otherwise?
The law of unintended consequences I guess. Or people (gov’t) not bothering or capable of really thinking through things?
To help you remind yourself, look at your property title. That Is you…That Is yours. You pay property taxes for that title.
To protect the seller? Not in my way of thinking. It sure shouldn’t be the buyer’s problem to inherit the situation the seller helped to create (whether by bad luck or otherwise). It’s a risk allocation issue, and there’s zero reason why it should fall on the buyer.
I’ve been in a situation where we wanted to buy something that was inhabited by a problem tenant (he was a strange dude, and it was acknowledged he didn’t want to go anywhere, the rent being way below market, and his living room being inhabited by a giant snake). When it became clear the owner couldn’t or wouldn’t do whatever payment was required to actually deliver vacant possession, we walked away (it never went to offer stage, as it just kind of became obvious we’d get stuck with this guy if we went ahead – sometimes life is just too short).
It’s unfair to the seller, but the buyer didn’t have any hand in creating the issue and shouldn’t be expected to inherit either the seller’s bad judgment or bad luck. So yeah, just buy something vacant.
OTOH, we lost one good investment this way, a one-bedroom corner unit in the Manhatten that we could have bought for I think $85k (before special assessment to redo the envelope) but didn’t just because the tenant was paying way below market. So these decisions go both ways. Which is fine. You just have to be eyes-open & be willing to take the consequences of your decisions, whether you’re a buyer or seller.
I have towers going up all around me. There are posted rezoning applications getting very close to my house. I am In the heart of Langford In the Glen Lake area with views of the lake. When they come knocking…That’s when I cash out. I will not be a nimby. Myself and three direct neighbours have 10,000 sq/ft lots. Prime for land assembly. They are all on the same page as me. You do not want these guys building around you. You want to GTFO!
Having a basement suite at this point reminds me of owning a blockbuster video store in the early 2000s. It’s a business form that is in the sunset of its life.
Sure Greg – I honestly think that long term that may be the solution. Just actually do the legislation so no one does basement suites anymore.
Another option is to think more ahead and perhaps have requirements for notice when tenants sign these leases that because it’s in a landlord’s home the rental is less secure. Then, the tenant can decide if they want that less secure rental. In our case our tenant was aware that at some point we would want the unit back. I have to remind myself of that too.
Not after taxes – especially depending on your tax bracket. I make good money at my regular job and can take on more work (not at 40 hrs/wk) and make more than the suite (by a lot). That is what I will do if we need the money.
I would argue that basement suites are part of the problem, not part of the solution.
They help to prop up the value of older properties on large lots.
As a consequence, they make that land more expensive, and less viable for development of multiplex housing and purpose-built rentals, which I consider a better solution.
No. But It Is an extra 2k per month In the pocket for the homeowner. That’s 24k per year extra cash.
First of all Texas is my wife’s family business and I dont interfere. Secondly, I believe we are talking about small landlords with anywhere from one to maybe four units. A lot of units, particularly those bought in the five years are now cash flow negative, particularly as mortgages become renewed and insurance property taxes escalate far above allowable rent increases. If you are already losing money dropping an extra ten percent is painful. Basement suites in your own home are probably in a different category but at some point having tenants is not worth the previable candle and reducing the rent by ten percent pushes people to that goal line. On a small scale this is not a high profit business.
@greg – I agree to a point. Except, two things. (1) don’t we need more people to be renting out basement suites and not less? I mean, if you look at places where having a basement suite is rare (like Winnipeg), there are many more PBRs. Also, people are generally hesitant to rent out a basement suite because of all the regulations that make it a PITA to re-take the property. (2) at some point the regulations could go too far. Like, that’s possible – isn’t it? Renting a basement suite should not be a life long guarantee to that space. It’s not a life estate of sorts – right? Like who owns the property, anyway?
In my view the government is doing it backwards. Sure, legislate basement suites so much that no one wants to do it anymore. But, shouldn’t that happen after we’ve built more supply? If it weren’t for the changes I wouldn’t have served notice yesterday.
Make the rental Income generated from the suite 100% tax free (on your primary residence). I would consider It. I have a 1150 sq/ft 2 bedroom 1 bath sitting vacant right now. Has been since 2006.
I would also like to retain my 100% capital gains exemption.
Basically, take the stigma out of the equation. More people will open up.
For long term tenants I would be very thural. I would check credit scores, call the employer, and call all three references…Before the Interview.
Here’s the thing about being a landlord: by renting out your property, you relinquish some of the control of it, in exchange for cash.
If there’s ever a chance that you want to use your property for yourself or your family, think long and hard before renting it out.
Or invest your money elsewhere.
Tenants, especially long-term tenants, form connections with their communities, just the same as owner-occupiers do. It should be a giant PITA and/or expensive for landlords to uproot their tenants’ lives.
(Note that I am not talking about problem tenants)
Thanks Patrick, I could come out of it ahead, but insurance companies have a propensity to decline a claim and let you fight an uphill battle with their lawyers. My initial tenants were great, a couple and her elderly mother, but the mother and husband passed and she was left with 2 dysfunctional adult children and two grandchildren. Her son was a psycho according to my property manager, but he’s gone for good now.
Glad to hear that Frank, seems like a smart move.
Sorry to hear that. Sounds like a nightmare.
Why not just make the rental Income from your suite 100% tax free?
Max the answer to what is next is that I am seeing the start of a houses with two (2) illegal suites in the basement, properties with an ADU’s (granny suite) in their back yard, or homes that have converted their old single wide garage to an illegal bachelor suite.
Personally, I support the idea of having more ADU’s in the Victoria core. I think prefabricated ADU’s would be the best option as they can be done in three to four months rather than seven to nine months over traditional construction. If someone rents out the ADU then they should receive financial assistance similar to the way that was available for solar panels.
“Wonder at what point one is going to be told that if you have a basement suite that you cant remove the tenant because you want to take over the space for yourself? Are you going to have to prove that you have a need for more space? After all, it is really a matter of just greedy landlords.”
Exactly. The writing is on the wall. I’ve been a small time landlord for over 10 years, with tenants on and off site. I have had one annoying tenant but they paid their rent on time and left the place clean. I’ve never had a problem tenant. Every tenant has always paid their rent on time and has left the place clean. I like to think I have been a fair landlord. I’ve charge rents that are fair/slightly below market. I respect the tenant’s space and I’m kind. This is the first time I’ve ever had to evict a tenant and I feel sad.
I’ve had property managers for 35 years. It’s the only way to go. When I’m up to it I’ll discuss the issue I have in Ladysmith. I guess I’ve been renting to baby boomers all these years, now landlords have to deal with a new generation of “sophisticated “ renters who have learned from the internet how to scam the “system “.
No, not blowing smoke. Just asking politely why landlords are complaining about dealing directly with their renter problems instead of hiring a property management company (like you do for your Texas properties). It costs about 10% of the rent and is available to small landlords – with as few as 1 property. That’s $200 per month on a $2,000 rental.
If I was on HHV complaining about something… say how hard it is to mow my own lawn, would it be “seriously unreasonable” for someone to ask why I don’t hire a gardener to do it for me? Why are tenant issues so different than that?
Exactly. But you hold the first suite as your primary residence. In my Mother In-laws case the tenant had a co-op housing suite that was super cheap because he had a mental condition. Then he just rented others and took ransom.
Just because a person Is schizophrenic doesn’t mean they are stupid. They dwell on shit like this.
Patrick, not sure what your point actually is since I was referring to small landlords here in Victoria. I guess you actually dont have a point and are just blowing smoke.
Hmm , business opportunity. Move from 1 suite to another and take it ransom . At 15 grand a pop it would be easy eats
Barrister,
Weren’t you recently telling us about the excellent property management company that manages your family’s properties in Texas? From your assessment it didn’t sound like you need to deal with all the “bad renter” problems directly , like some of the HHV landlords here do.
Do you agree with the recent HHV comment that “ bad renters are ruining it for everyone”?
Patrick, you are being seriously unrealistic here dude.
Patrick, do you actually run a business? A lot of rental units for small landlords are no longer cash positive to start with and you want to add the cost of a property management company? Anyone know what they cost these days?
First the men went to work to pay the mortgage and all the bills.
Then both the men and women went to work to pay the mortgage and all the bills.
Then both the men and women went to work and had to rent out their basement suite to pay the mortgage and all the bills.
What’s next?
Wonder at what point one is going to be told that if you have a basement suite that you cant remove the tenant because you want to take over the space for yourself? Are you going to have to prove that you have a need for more space? After all, it is really a matter of just greedy landlords. I am not even sure that I am being sarcastic at this point.
Talking to a neighbour who is often in the know who is saying that there is serious discussions about rerental caps (the new term for vacancy controls). It is intended to limit the amount of increase that a landlord can ask between tenants. This would both maintain affordability and reduce the landlords incentive to evict tenants. (dont ask me my wife’s rental properties are in Texas which plays by different rules).
Landlords that find it overwhelming could hire a property management company to deal with those hassles.
We tried that Frank. My Mother In-law has three Sons. The four of us went over there and approached this guy and said “get the F#@k out”. He had his cell phone concealed and recorded the whole conversation. That just made things even worse, now we were uttering threats. The cheapest way to get rid of this guy was to lawyer up and pay him 15k for the keys. We started at 10k, but he wouldn’t take It.
My Mother In-law slept with a baseball bat beside her for over two years.
From the sounds of it, bad renters are ruining it for everyone. This cash for keys is B.S. How about “move out or your knees”. I did have one tenant skip out on a few months rent, but never had to forcibly evict anyone. I know people who have packed in being landlords because of bad experiences. The market should appreciate the properties (especially SFH) that are available, they could be drying up shortly and renting will become more difficult and expensive.
Not outright stopping it, but the government sure is discouraging rental suites. This can only make the housing situation worse.
I don’t know how old you are, but I’m guessing you are fairly young. If you are sitting on the sidelines waiting for rates to come down or some kind of market correction…That’s a fools game, time Is money, time is finite, I can assure you that you will not be getting any younger waiting on the sidelines. Buy what you can afford sooner rather than later. Condominium, row house, town house, single family house, whatever. If you were to buy today, you would not be paying peak housing prices.
When I bought my house, I was 26. I wasn’t exactly the sharpest tool In the shed. All I knew was I had to have $1600 In the bank every two weeks to cover the mortgage (Interest was 8%)…So I made that happen. Once your over the 15 year bell curve life gets easy.
After 20 years Its a walk In the park.
Who cares? Do you want to live In Zagreb or do you want to live In Victoria?
I call BS.
What Wiki lists as the “city” of Zagreb is really the metro area, which has a land area of 641.2 km2 as having that population density. The “city of Victoria” with a 4,700 /sqkm density is only 19.47 km2 in size.
That’s by far the smallest land area of any major city in Canada as Victoria has never amalgamated.
In other words you’re comparing the sprawling metro area of Zagreb, which 33x larger in land area to the tiny downtown core that is the “city of Victoria.”
The metro area that wiki lists as “greater Victoria”, which consists of the most populated areas of the CRD, is a similar land area to the metro area of Zagreb and has roughly half the population density (https://en.m.wikipedia.org/wiki/Greater_Victoria).
The nightmare Tenant.
Old but good. Trailer…
https://www.youtube.com/watch?v=JidGAt7zXT0
Marko is absolutely right, simpler to buy a house without a tenant. Great advise.
A lot simpler with our properties in Texas. Lease over and that is the end of it. Unless you want to argue with a sheriff in Texas,
Or the buyer can just buy a vacant or owner-occupied property and not worry about the tenant nonsense.
Yes, It turned out this guy was schizophrenic. But when he was on his medication, he was the nicest man ever. He had a solid resume for the application… Including pay stubs, references, personality, presented himself very well, very personable.
This Is the reason why he had co-op housing to begin with…It was because of his condition.
But It was a nightmare to get rid of this guy…Very expensive!
I don’t think your allowed to check their medical records.
There should be a provision in a buy sell agreement dealing with circumstances out of the sellers control if the unit is tenanted. And it is the tenant who is ultimately liable for damages caused by their overholding if they are deemed in the wrong. Of course they’d need to have some funds for this to mean anything.
There are absolutely tenants out there like this. It takes some careful checking to avoid most, but not all, bad eggs. There are also tenants that are mentally ill or become so during a tenancy, particularly older tenants. Or tenants who partner with someone who is a terrible tenant who becomes your problem.
Does someone with MLS access know if there are a lot more high-end listings on the market (above $2M or $3M for example) than at other times in the past few years?
Just anecdotal observations on my part and seeing over 230 single-family homes listed over $2M which seems higher than in past.
There are serial tenants out there that do this. My Mother In-law fell victim. It cost her thousands to get him out. These tenants have online forums discussing how to game the system and f#@k the landlord over.
These people have absolutely no respect for the landlord. They will be loud, rude, stop paying rent and there Is nothing you can do about It.
Call the police…Sorry that’s not our problem!
Lawyer up, and be prepared to pay thousands…That’s all you can do about It.
They target anyone really, houses with suites are easy prey for them. They have a resume that looks stellar Including pay stubs, references, personality, they present themselves very well, they are very personable. Condos are also easy prey. They know what they are doing and how to do It. They have no moral conscience what so ever. This Is just what they do!
The guy that rented my Mother In-laws suite, already had another suite In co-op housing he was renting for $550 per month.
He just gamed her, and walked away with around 15k “cash for keys”. This Is no bullshit, this Is real. In his sick mind he just said this new rental didn’t satisfy him, so he moved back Into the co-op. And that was perfectly legal for him to do that, and collect the cash for keys.
The guy walked away with 15k. Then moved back Into to his original co-op rental.
Everything was done through a lawyer. What he did was perfectly legal.
I would say such a scenario is an even bigger problem for the seller as they are in breach of contract. At that point as the seller you risk the buyer suing you or you try to work out a “cash for keys” with the tenant.
As a buyer, would I want to offer on a house while waiting four months to get vacant possession only to find out that the tenant has decided to dispute the eviction? Not sure that BC is exactly the best place to have rental property.
I think a vacant SFH would make the seller look desperate, unless It was just built.
I would too. With a lawyer drawing It up, It just clears the slate.
I would 100% prefer this to a condo. No floors or walls to share, and you get a bit of outdoor space too. That would be very important to me.
Not much square footage, but some of the post war houses across from Mayfair are 3 bedrooms shoved into 850 square feet. As long as there isn’t an inch of wasted space, it can work.
Absolutely, It will .
Do vacant homes sell for more than occupied homes?
Wow, that’s a debate.
In the case of condos – I think they do but it is a very small difference of less than 5% That kind of data is hard to tease out of market sales. In that case offering a tenant 10K to move makes it worthwhile as you will likely net more on the sale.
But then a furnished house may sell for more as buyers can visualize how their furniture will fit.
It’s like baking cookies when showing a home. Not that Marko would bake cookies while showing a home. Maybe štrukli
.
Exactly. What If the reason for the eviction Is completely reasonable? Like late payments, loud, disrespectful, or stops paying rent altogether?
Well, what If that’s not what the buyer wants? What If they want their Mother living down there? That would be wrong and would seriously limit the buyer pool.
The difference Is an additional 60 days until possession for the new buyer. 120 days Is too much.
Pushing people into boxes like communist bloc countries. Lovely.
First I agreed with Totoro and now I’m agreeing with Marko. I hope this doesn’t continue.
Offering 10K to a tenant to leave early sweetens the pot. I would absolutely do that.
The Kay property is alternative to small home on a small lot or a small half duplex. I wonder how strong or weak the demand for such a property might be as it is appealing to a boutique market of empty nesters, or first time buyers desiring an alternative to a condominium. The risk for a buyer is that if more of this type of home are built, the market may quickly become saturated effecting the property’s re-sale value.
For example a small house on a small lot at 2528 Fifth Street that has been on the market for 78 days and asking $555,000 or 1263 Denman that sold for $662,000 that was originally listed on June 14 and sold 76 days later on September 5.
The market exposure is longer for small homes on small lots than say a typical property which may indicate weaker demand. The thing that will sell the property is the price as one does get a new detached home with low maintenance yards and that’s a plus for empty nesters or retired couples that don’t want any surprises that they may find in older homes like Fifth Street and Denman.
The asking price is a good place to start as it will draw attention. If this were listed two weeks ago I would have told a guy that was looking for such a place. His mom was going to make the down payment for him but she was reluctant as the age of the homes they were looking at in this price range were antiques. Or as she put it. They look good from far but are far from good.
“I usually make unconditional offers, however, when I offer on tenanted places, it comes with condition of it being vacant on close.”
I’m interested to hear what your thoughts would be if the same suite were AirBNB’d.
If someone were to sell a house tenanted, vs AirBNB’d, how would it affect the value?
It seems that with the changes in AirBNB regulations to only allow AirBNBs in SFD, wouldn’t it boost the value of a SFD?
Also, I know you have to get a biz license to have an AirBNB in your SFD, but what are the regulations surrounding having TWO AirBNBs in the same SFD? Can you only AirBNB legal suites?
Thx in advance
I usually make unconditional offers, however, when I offer on tenanted places, it comes with condition of it being vacant on close.
Two bedroom in a 617 sqft place? LMAO what??
Looks like prison barracks.
It is very significant imo. I’ve been following a Vancouver agent on YouTube for 10+ years now and he has been preaching for 10+ years how when he needs to sell a tenanted property he counsels his seller to reach a mutual end to tenancy buyout ($5,000 to $15,000 depending on situation) so the unit can be sold vacant. Some of his reasons have been
I’ve never felt comfortable pitching the idea to my landlord sellers as I’ve always been concerned with them buying the tenant out and then the property not selling and now they’ve lost monthly revenue sitting on a vacnt unit and haven’t secured a sale.
However, if this actually goes in the direction of four months’ notice and two months’ compensation, I think offering the tenant 10k +/- to leave will start to make more and more sense.
My thoughts are that it is a sensible solution and good alternative to a condo in a currently quiet area. If the whole street gets redeveloped in the same manner one day there will be parking wars as with one parking spot and a narrow road where are guests and other occupants going to park.
Thoughts? -> https://www.realtor.ca/real-estate/26713391/3-568-kay-st-saanich-glanford
The purchaser does not give the notice. It is the seller that gives notice on the written request of the purchaser once the contract goes unconditional.
If the tenant disputes the notice, it will very likely push the date of vacant possession out beyond four months.
The research I’ve seen on rent controls does not support it being of overall benefit as it leads to:
https://www.sciencedirect.com/science/article/pii/S1051137724000020
As Totoro explained, generally it is the purchaser that gives notice to the tenant that they will be occupying the unit. Then it is just two full months. That might be extended to four months during which time the purchaser is receiving the rent on the unit. I think purchasers will adapt to the changes. That extra time might work out well for some purchasers as it gives them more time to sell their current home. Otherwise they would be looking for a vacant unit to move into immediately.
As it is now, most of the pre-owned condominiums are being sold vacant.
@Patriotz…so again the supply must come first. That always seems to be the answer.
@Patrick –
Here’s what the first reading of the amendments say on notice for landlord’s use:
s.49…
(2) Subject to section 51 [tenant’s compensation: section 49 notice] and any prescribed conditions, restrictions or prohibitions, a landlord may end a tenancy for a purpose referred to in subsection (3), (4), (5) or (6) of this section by giving notice to end the tenancy effective on a date that must be
(a) not earlier than, as applicable,
(i) if a period is not prescribed under subparagraph (ii), 4 months after the date the tenant receives the notice, or
(ii) a prescribed period after the date the tenant receives the notice, which prescribed period must not be earlier than 2 months after the date the tenant receives the notice,
(b) the day before the day in the month, or in any other period on which the tenancy is based, that rent is payable under the tenancy agreement, and
(c) if the tenancy agreement is a fixed term tenancy agreement, not earlier than the date specified as the end of the tenancy.
Per the above the new default appears to be 4 months. I’m guessing (2)(a)(ii) means that they can prescribe a different amount of time – maybe under the regulations?
https://www.bclaws.gov.bc.ca/civix/document/id/bills/billscurrent/5th42nd:gov14-1
The problem is that such controls would in themselves discourage new PBRs from being built. That’s what actually happened in the 1970’s.
I was previously dead set against it but at this point i think that having some controls for increases in between tenancies might be justifiable. However, imo it should be a transitional measure to bridge the gap between now and when more PBRs are built. Meaning it would have to have a set end date – like in 2 years or some date not too far in the future. I don’t know if that would lead to a different domino effect – i do know that long term those kinds of controls are dangerous and deter fixing up places and so leads to more slum landlording and underground activities. That the government is increasingly willing to adjudicate on what is allowed or not (i.e. applying to an increase outside of a set amount and perhaps getting approved) – is not, in my mind, enough to outweigh the long term costs of those kinds of measures.
I would not be surprised if the government brings in controls for rental increases between tenancy
The benefit of having a rental suite empty would be an opportunity to get to market rates . I’m guessing if your a renter and have a sweetheart deal on rent , you’re not going anywhere .
At this point I haven’t seen any confirmation that the government is planning a change to 4 months. Let’s wait until it’s confirmed and we have the details.
Marko has already stated his opinion on the impact this will have. I agree with him and believe his professional account of the impact a forced long closings could have on buyers who are selling and rebuying in particular. It is significant imo.
It is a balancing of impacts.
In general, places are not advertised two or four months in advance but only one month in advance.
A tenant given two months notice of owner use will know on April 30 that they need to move out by July 1.
In terms of finding a new place, if a tenant gives notice on April 30 the landlord advertises this April 30 or May 1 at the latest for a June 1 tenancy start. There is some benefit to having two-four shots at finding a new unit, but I don’t the additional benefit of a longer notice period outweighs the disproportionate impact on a prospective purchaser. It is the purchaser not the seller who actually gives the notice of intention to occupy and if they are going to continue to rent out a suite then no notice will be issued.
In the case of family moving in four months is something a landlord can plan around most likely. In the case of a sale this is not within the landlord’s control and is dumb imo.
You already live in universe where you have to give two months notice for eviction. Sorry, but I don’t see the change to four months putting you in a different universe. Winnipeg has a 5 month notice period, and it’s in the same universe as BC. Anyway, it’s not just all about you, how about the tenant that’s getting evicted?
If the next purchaser is an investor/buyer, the issue is moot as the tenant isn’t going to get evicted. So the seller isn’t at all impacted by a longer waiting time for eviction because there is no eviction.
What kind of universe do you live in that has different supply and demand characteristics? Not the one I do.
There is only ever a certain number of buyers in the market at any particular time. The seller does not have some magical power to “choose to sell to an investor”. They get to choose from the offers provided and if they cannot meet a vacant occupancy condition in time and a buyer has other options then they offer will not complete. Any reduction in supply or demand will lead to a change in market value and sellers will move to increasing the odds of a vacant unit prior to listing to the detriment of renters.
In terms of incentivizing homeowners to rent out suites, this should probably be tied to vacancy rates and might come in the form of an added property tax grant or municipal program to legalize suites at low cost. Overall though, creating a positive image for those renting out suites would probably be enough. Right now the demonization and targeting is ridiculous and unfair and disheartening. A campaign to change this image would attract more “good” landlords who want to help in crisis times.
Agreed, I don’t support those conditions above – they sound confusing and unclear.
One negative impact is the x thousands of dollars I will have to give my tenant in free rent. Another negative impact is that I now have to apply to re-take my property and presumably that’s because there are conditions under which the government intends to say no. Those conditions are not clear at this time (or if they are please tell me because im legitimately confused). I will also have to pay for some mysterious government generated form (which, per previous May or may not be denied). I don’t know I guess I just don’t trust the government that much. I also think there are bigger philosophical questions but probably no one wants to hear/discuss those.
I find myself agreeing with Totoro. We need incentives for home owners to rent out their suites. But how do we do that without causing inflation in house and rental rates? It seems that we probably can’t as nothing will change those like Totoro and Max that have no desire or economic reason to rent their suites. Half of the homes in the Victoria core are mortgage free. They may have suites but there is little to no reason for the home owner to rent them.
The next purchasers of Totoro’s and Max’s properties will likely rent the suites as they will need the rental income but until then the rental market is bottlenecked.
The current solution is to create more purpose built rentals so that we are less reliant on home owners to fill the gap in available suites. But this will take a long time to accomplish.
It would incentivize the seller to sell to an investor/buyer who would continue to rent to the tenant. That would be a more desirable outcome, since it avoids the eviction of the tenant. If the seller finds an investor/buyer, there’s no government imposed waiting period, and the sale could happen immediately. This will likely mean less evictions on sales of rentals, which is a good thing.
Right, I agree and don’t see the need for the “free rent” part.
How are you being negatively impacted by these changes? The notice period of 4 months would only apply if you want to end the tenancy with an eviction. Are you planning to do that? If you were a tenant, wouldn’t you think that 4 months notice was reasonable for an unexpected eviction?
And honestly I think a 4 month notice for personal use is fine/fair. However, I don’t think that a tenant should get a windfall of months of free rent just because a landlord wants to move back into their own space. I mean, is the free rent meant to compensate or punish? Geez it’s pretty ridiculous – we’re talking thousands of dollars here.
“Instead of focusing on the actual solution to this issue, which is way more purpose-built rentals that provide long-term secure tenure for people who cannot afford to buy, government is deflecting to measures that that target and scapegoat private landlords. This may get them more votes, but the way it is presented is not balanced.”
And that is the problem. It should build supply up BEFORE it takes actions that will discourage mom-and-pop landlording. The government is putting a cart in front of a horse, imo.
And Patrick, I’m from Winnipeg. In Winnipeg there are so few basement suites/mom-and-pop landlords. Even my single mom cousin wouldn’t consider putting in a suite. Maybe because the regulations are too heavy for a side gig, maybe because property is much cheaper, probably both. Whether we like it or not, here in Victoria, we rely on these basement suites to house people. Until that changes the govt needs to tread carefully or it will exacerbate the problem it says it’s trying to fix.
That’s why these are lousy rentals from a tenant’s perspective. Subject to the whims of the landlord deciding to sell to invest in stocks etc.
Nothing wrong with changing investment plans, except when it materially impacts someone else (a tenant). So that’s why the government needs to regulate it.
Non purpose built rentals played an important role in filling the gap caused by decades of not building apartment buildings.
But Covid illustrated how overly exposed the rental market was to non purpose built rentals as home owners were reluctant to rent parts of their homes to strangers during the pandemic adding to the shortage of available suites in what was already a tight rental market. That caused a sharp increase in rental rates in the first year of Covid by some 20 percent which were assisted by the government emergency benefits.
The rapid inflation in rental rates and low interest rates caused a frenzy of investors buying properties and market prices rose rapidly.
But now we are in a post-pandemic inflationary bubble, similar to what happened in the world after the Spanish Flu pandemic of 1918 to 1920.
The government is trying to avoid what happened in the roaring 20’s with easy credit and over zealous speculation in the stock market which led to the Great Depression by doing a complicated dance of higher interest rates to control inflation but at the same time create demand to build more housing by purchasing billions of Canadian Mortgage Bonds (CMB).
When selling a home imposing a 4-month notice period on an owner is unworkable and unreasonable and would impact salability. It is an unwise decision.
A four-month notice period for family use is easier to manage.
Instead of focusing on the actual solution to this issue, which is way more purpose-built rentals that provide long-term secure tenure for people who cannot afford to buy, government is deflecting to measures that that target and scapegoat private landlords. This may get them more votes, but the way it is presented is not balanced.
A rational policy approach would encourage landlords to provide more rentals and protect renters. As it stands, private landlords are being strongly disincentivized. Government needs to double down on funding to fast-track a lot of purpose built rentals. Getting to a reasonable vacancy rate is what actually gives tenants more power to negotiate in the market and more security.
We’ve decided we are not going to rent out our suite when the current tenants leave. We’ll help family instead. Some homeowners will not be able to do this, especially at current interest rates. Some will decide to sell a rental instead and invest the money elsewhere.
While this might turn a renter into an owner (or not), which is a positive, the segment of renters is growing at a much faster rate than owners, and any loss of rental units will create hardship for those who can least afford it, which is a huge negative.
No one is stopping landlords readying and renting suites. The topic under discussion is how much notice the landlord should give when they are doing the opposite of that, namely evicting a tenant and converting the suite to use by the landlord or new owner.
Apparently the government is considering expanding the notice period from two months to four months, which is a good idea IMO. Other cities like Winnipeg have a higher notice period – five months when vacancy rate is below 2%. https://www.gov.mb.ca/cca/rtb/ot/gbook/s7noticeoftermination_nbyllrentalunitownuse4.html#:~:text=If%20a%20tenant%20is%20on,5%20months'%20notice%20to%20vacate.
You’ve got that backwards, Patrick.
Non-purpose-built rentals are critical in lessening the housing crisis. They are much more responsive to demand and can provide additional housing in a fraction of the time that purpose-built take.
When signalled by high rents, a basement suite can be readied and on the market in weeks or months, instead of the years new purpose-built rentals take.
Well OK. But are you saying they never even peeked at realtor.ca prior to this?
As for myself, I didn’t even engage a buyer’s agent (cash back) until I had seen the house and decided to make a bid. To each their own.
You’re quite right about stand alone investment properties. I was talking about people renting out suites, which some posters appear to think will be discouraged by legislative changes. The extra cash flow will be essentially tax free for many owners as I pointed out.
And as I’ve said before, I don’t think we need to worry about investors being discouraged from buying stand alone rentals, one because % of investor sales is near all time highs, and two because investors buying such rentals are displacing a potential owner occupier. And such rentals are insecure as Patrick pointed out.
Selling a tenanted property to an owner occupier results in an eviction of a tenant. That often creates big problems for the tenant, and should be a harder thing to do. Kudos to the government if they enact improved laws for the evicted tenant, such as getting 4 months notice instead of 2.
Long time HHvers will remember that I’ve been advocating for that for years (I’d suggested 6 months notice). Not many HHVers agreed with that idea. Part of the housing crisis is caused by “unstable rentals” where many tenants (justifiably) fear getting evicted, so worsen the housing crisis by buying a home at any cost instead of the cheaper option of renting long term.
Reducing evictions (and fear of evictions ) and other measures to create more stable long term rentals will help the housing crisis.
People always talking like Victoria is a big city… :rolleyes
Westside Village is also up and running and has been for decades. More density is required for another grocer + more businesses.
The density in the Songhees is nothing exceptional. Other than the waterfront on a sunny day I literally walk entire blocks without passing another pedestrian.
He actually has a part time job while still attending Belmont. No, I’m talking about eight years from now. The older one works full time, but he won’t move down there from his upstairs bedroom. He knows I’ll want something.
There Is no such thing as a free lunch.
Lots of density from the buildings already there. Royal Bay is only half build and the plaza is up and running.
Max, you expect your 15 year old to be paying the property tax. Paper route? 🙂
I think a property with a tenant is now toxic. My Mother In-law just went through months of non rental payment and still had to hire a lawyer and then pay the tenant “cash for keys”. Do you have any Idea how much a bailiff costs?
You are far better off getting a lawyer and giving the tenant the cash for the keys.
https://www2.gov.bc.ca/gov/content/justice/courthouse-services/bailiffs
Is it better to sell a property with a tenant or as a vacant suite?
Of the 420 non new condos for sale in the Victoria Core, 108 (26%) are being sold vacant and 37 (9%) are being sold subject to tenancy.
It seems most owners of condominiums elect to sell their unit when a tenant moves out. Fewer try to sell the condo with a tenant in-place.
Of the 114 condos that have sold in the last 30 days, 32 (28%) were vacant and 8 (7%) were subject to tenancy. Not a significant difference.
I guess we will have to see if the proposed changes have any effect.
The predicament for a landlord having to give a longer notice is they risk losing rental income if the tenant moves out quickly. I would think it would be better to speak with the tenant months in advance and explain that your intention to sell the property but not give them written notice yet. Then they would be actively looking for a new home and would give the landlord notice once they found one. In that way it is the tenant that is initiating the vacancy not the landlord.
I don’t even know how mortgage approvals would work if it ends up being 4 to 5 months’ (depending on time of month) for new owner.
It would be insane, but would not surprise me as currently landlord and new owner have same time lenght for notice.
I think “empty nesters” will become a thing of the past. I have two boys, 15 and 19 years old. They seem quite content where they are. I have a vacant 1150 sq/ft space for them down stairs with 2 bedrooms, 1 three piece bath, and full kitchen. All I expect from them Is my property taxes paid every year.
I don’t think the regulation on this has been published. I’d expect 4 months’ notice for a landlord/family member to move in. Not sure about sale but agree it would be insane to require four months’ notice for a new owner. Ends up being more than four months usually because part month notices don’t count.
That makes zero sense. Take a look a Royal Bay to see how real life works, first you need the residents/density before the commercial.
No It won’t. Fuel prices are an expense for the self employed…100% write off.
Marko, I was in favour of more density at the roundhouse but the city should have insisted that the amenities should be built first at this point. They have promising a large gym, grocery store, restaurants and coffee shops there for the last ten years and none of it has been built. I would allowed even taller building but only after they built all the long promised amenities and stores. As it stands now you dont have the ;long promised places to walk to.
FYI Tomtom,
Before you commit yourself to such an endeavor you should call Dez Mahal at Re/Max Camosun as she sold one that is similar to what you want to do.
I would break this project down as follows:
Land Cost $800,000
House at $500,000
Garage and landscaping at $100,000
Acessessory Dwelling Unit @ $225,000
Projected Profit before real estate fees at $175,000
7 to 9 month construction and marketing period.
Projected Economic Rent for all three suites at $8,500 per month or $102,000 per annum
https://youtu.be/y8GlSXgfQqE?si=eOzrAyBtMFzCYjer
Walking everywhere works for a single person on vacation [Zagreb], not so well for a family with kids and working parents.
Density in city of Victoria is already very high (4,700/sq. km). That’s 7th highest in Canada and much higher than Zagreb (1,200/ sq. Km). Zagreb density is actually falling since its population is falling due to emigration.
When I am in Zagreb my car never leaves the parkade, ever. Maybe the occasional Ikea run. However, there is much more density, better public transportation in the way of trams, nicer and vibrant parks (why don’t we have a couple of cool caffes/patios inside Beacon Hill Park?). Then when it comes to density the majority of things we need are within a 5 minute walk of my place and literally everything with 8 minutes. The main square and all the streets off the main square are pedestrian only, etc.
Here people are allergic to density so difficult to build a ridable/walkable city. Listening to everyone oppose the Roundhouse was so incredibly painful. As someone who lives in a unit that is probably the closets unit to the actual development I can’t wait for more density and amenities outside my front door one day 25 years in the future 🙂
BobbyK. Why are you assuming that high density in a handful of cities is the way to go?
If you’re a Calgarian, it’s about time. Prices were relatively flat from 2007-2021 (14 years).
If and when the price of oil goes down, there will be net outmigration and RE prices will probably go back to languishing.
Imo the only way can guarantee to make good money from rental property is to buy fixer upper sfh at least 2500 sq ft in the core and turning it to two legal suites plus a “mother in-law” suite. Numbers don’t work on condo or small sfh that only has two bedrooms upstairs.
Should landlords be subsidizing the shelter costs of those on a fixed income?
Nope, many are 2 bedrooms up + 2 bedrooms down.
Barrister, I’m not telling anyone they need to ride a bike, my point was that if people actually did try riding a bike again I bet most of them would say how much they enjoyed it. It’s like exercise or eating well most people know they should but still dont. It’s a well known fact they exercise is often more powerful then drugs in helping to cure mental and physical health problems. I feel sorry that most people don’t take advantage of physical exercise to improve their health and we have so many addiction problems.
We can’t keep jaming more cars onto the roads and the best way to reduce car usage is to try to provide and encourage and provide altrernative option as well as continue to increase the costs of car usage like we do on cigarettes and alcohol taxes
That’s a pretty good summary from Marko. A condominium that returns a 3.5% return on the Net Operating Income which is equivalent to a GRM of 20 before mortgage or taxes.
It underscores how bad investing in rental properties is in Victoria. Better to buy pre-sales in Calgary.
Depends on what kind of tenants you have 😉
Many factors suchs as leverage (mortgage), suite in principal residence versus stand alone rental properties, property appreciation, etc., but let’s make it simple.
You have an income of $200,000/year and $500,000 cash.
Option A; you buy a condo to rent out @ $500,000.
Revenue: approx $25k
Expenses (strata fees, insurance, property taxes, etc.): approx $7k
Profit: $18k
You are looking at $8,300 in taxes +/- on that profit.
Option B; you buy Telus, Enbridge, Cnd Bank, etc @ $500,000 (let’s assume you’ve already maxed out all your registered accounts)
Revenue: approx $35k
Expenses: $0
Profit $35k
You are looking at 10k in taxes +/-
Now pile on a bunch of tenancy laws that favour the tenant being a landlord is less and less attractive imo.
Marko is absolutely right that serious buyers tend to have agents already engaged.
I suspect selling a house with tenants in might be getting a bit harder. Marko is making an excellent point regarding rental properties as a questionable investment at the moment.
Lol, what Marko is saying is that serious buyers have agents engaged which is absolutely true for almost all serious buyers.
You’re ignoring expenses, most notably mortgage interest, which for many owners may even result in an operating loss and tax deduction. If the owner is a corporate entity there’s also CCA, since the capital gains are taxable anyway.
No suite rental, owner gets no deductibilty for anything.
No I meant what I said. The majority of buyers seriously shopping use the automated system (aka matrix or similar) their agent sets them up on, not realtor.ca.
Or maybe, bicycles have become a social issue because some people have the attitude that providing equitable and safe access for cyclists is forcing people to use bicycles.
I haven’t had a chance to read the legislation yet…..what about buyer giving seller notice for personal use? Is it four months? That is going to make it incredibly difficult to sell tenanted properties as the investor market is dead and owner-occupier will not want to wait 4 to 5 months for vacant possession.
Not to mention taxation. Depending on the tax bracket you are in with a suite you are looking at 50% +/- and CND dividend paying stock you are at 20% +/- and zero headache and lots of solid companies paying 7 to 8% dividend yield right now.
Perhaps you really meant that only 1/10 people using realtor.ca are serious buyers?
I can’t imagine buying a property without using realtor.ca, just to see what’s out there. I mean, I think I’m fairly smart but not that smarter than everyone else on this one.
You can give four months’ notice but once you give notice your tenant can always leave earlier and without the standard required notice. Section 50 of the RTA says that a tenant can give the landlord 10 days written notice and move early.
Seems like going forward the rules for landlord use will require:
4 months notice (currently 2)
at least two months’ rent (currently one)
12 months’ occupation (currently six)
And there are unknowns that are identified on the BC government site:
Future regulations:
providing regulation-making authority in the Residential Tenancy Act to:
prohibit conversion of rental units to specific non-residential uses, such as short-term rental accommodation or storage;
prescribe increased amounts of compensation for evicting long-term tenants for landlord use; and
clarify the criteria by which the landlord could legally end a tenancy for a problematic tenant.
So the government is going to stop you from using your suite for your own storage purposes? It is less and less attractive to be a landlord in BC. Agree there are some bad actors on both sides of the table, but these changes will definitely discourage many from renting out suites who can get by without the income. Seems counterproductive to the aim of providing more housing.
Does anyone know if I’m allowed to give more notice currently? Like can I give 4 months if I want?
If you are in a situation where you foresee this happening within the next couple years and you don’t need the income now and your son will occupy the unit for at least 12 months (new requirement – up from six) I’d give notice before the new legislation comes into effect. Currently it is two months’ notice and one months’ rent for landlord use but this will be “extended” under the new legislation.
I’d just prefer to be done with the situation under rules that are in force and known.
Bobby K. : Guess what lots of people, including myself, dont enjoy riding bicycles and never have. why bicycles have become a social issue is because of your attitude that we need to force people to use bicycles.
Bumping gasoline prices up is going to have limited impact since most vehicles are going to be electric soon.
If biking is so much more enjoyable in the first place, according to you, why is there any need to force it in the first place. The real problem is people wanting to force their preferences on everyone else.
LMAO You should take some math classes for real, I think grade 7 would do the trick. Can someone with more empathy than me please explain to Frank wtf is up.
When I pop over to Hilside mall (on my bike) and I see maybe 10 bikes locked up and about 400 cars in the lot and I can’t help but think that surely more then 2% of people could have ridden their bike to the mall instead of driving and also if they did they would most likely find how much more enjoyable it is to ride rather then be stuck in a car if you’re not bringing back a lot of “stuff”. They get this in Europe and we will have no choice but to find alternative forms of transportation as we cant keep adding more and more cars to the roads.
Perhaps gas at $3 a litre will motivate more people to get out of their cars.
Tough choices Dee but I suspect that you are right to be concerned about a possible more difficult atmosphere in removing a tenant. It sounds like there is a lot of reasons for you to remove the tenant while little economic incentive to keep them. In general, I am often found it best to make difficult decisions sooner rather than later. Best of luck and it would be interesting to hear about your experience if you do decide to take back part of your house.
It’s quaint and curious how a handy transportation device and enjoyable form of recreation has become something that needs a trigger warning. A symbol of socialist repression for some.
We have a son who is getting older. He’s into video games and had a friend over who is into sports. He’s loud and it’s even louder when his friends are over. It’s starting to feel like a frat house in here. It was different when they were younger and we all wanted to be close all the time anyway. Given our salaries and tax brackets and the other costs it’s not like we get a lot of rent anyway. It becomes less worth it every day. But our tenant is awesome and their rent is far below market and they’re on a fixed income. So we’re hanging on for as long as we can…
Dee, you are an evil and selfish landlord. Prove that you actually NEED the space more than your poor tenant.
You already have a place to live why do you need more. Buy a bicycle and be quiet. Welcome to the new BC,
I have two suites that i rent out. The new legislation makes me nervous. Section 53.1 says that you have to use a generated form to end a tenancy for landlord’s use. 53.2 says that a landlord must apply to the director to end a tenancy. 53.3 says the director “may” or “must” authorize an application to end a tenancy. There is a fee for the generated form. It’s not clear what’s on the generated form. Will there be a question about whether it’s disputed? If so I’m wondering if it’s adding a kind of pre-dispute process to the already lengthy dispute process. The wording is a bit too vague/unclear imo. I’m still considering what to do as we do want to re-take one of the suites for our own use. Seems that sooner rather than later is better. I don’t want to be in the beta/testing set for this.
2664 monthly sales is greater than 2532 active listings. Do the math, I was referring to MOI.
No he literally means negative…… come on, haven’t you seen negative active listings before!?!?
Do you mean less than 1 month? Not sure what you are asking.
Marko- Have you ever seen a negative MOI?
They fled the NDP.
https://vancouversun.com/news/local-news/british-columbians-fled-for-alberta-in-record-numbers-last-year#:~:text=The%20agency%20says%20B.C.%20recorded,another%20province%20went%20to%20Alberta.
Apparently, bringing the BC real estate atmosphere with them..
just looking at market stats in Calgary
Sales – 2,664
Active listings – 2,532
that’s crazy. Prices up 14% yoy.
You needed a foundation and you needed a roof. Might as well throw two stories In between the two. I’m talking the 1980’s here.
For the extra sq/ft and cost… It was kind of a no brainier. In a lot of cases the lower level was unfinished for property tax.
In my case the lower level was finished because they actually had their Mother living down there (In law suite).
Victoria proper is the city not the surrounding districts such as Saanich East. Most of the pre 1960’s are homes with only two-bedrooms on the main floor, coved ceilings, wood floors that were built for retirees that had little need for a third bedroom. Not until the 1960s did homes begin to consistently have three bedrooms on the main floor. Gordon Head homes built in the 1970’s all have three bedrooms on the main floor to accommodate the growing number of Baby Boomers.
There was a huge boom in Victoria’s population from the 1950’s of 100,000 to 225,000 by the mid 1970’s. It could be done because we went from houses built for retirees to homes built for families of five or seven people. Now we are on the back side of the baby boom going from houses that had five to seven people to homes with one or two.
I do expect that trend to reverse as the oldest baby boomer will soon be 80.
I went from 3 to over 6. Times 2.
It was incentive to sell one place (although there were other factors at play as well).
This doesn’t seem accurate. And what do you mean by Victoria proper? The City?
There are certainly two bedroom houses around but I think the majority of post war homes in Victoria probably have at least 3 bedrooms.
Its a 2600 sq/ft box on a 10,000 sq/ft lot. Its a two story house, It doesn’t have a basement. It was built In 1981, 5 bedroom, 3 up 2 down. Your right though, renting out space sucks, even for lot space for RV storage…I did that for awhile too.
You’re not alone Max. I know several people your age that live in homes with suites and are not renting them. Most of the homes along my street have only one or two people living in a 2,200 square feet home. There is no economic reason for them to rent out their suite as they are doing just fine. Property taxes are not that high, their mortgage payments are low or non existent, and some are deferring their taxes altogether.
We have a housing shortage for those that are trying to start a family not for those that have already had a family. It’s more of allocation problem of a scarce resource. As well as the problem that most of the pre 1970’s houses in Victoria proper only have two-bedrooms on one floor. This is unique to Victoria as it was a retirement community and that’s the way the homes were built. When I first moved to Victoria, I found it very odd seeing homes with just two-bedrooms.
When the banks started centralizing their mortgage approvals out of Toronto, this would be a topic that came up regularly as they considered a home with only two-bedrooms on the main floor as a detriment that would affect it’s future salability. Even though the home may have had another bedroom in the basement as an above ground basement ,especially with a low ceiling, was an oddity to them. I remember one even asked me where are the brick houses? And I told him that they are 3,000 miles to the east.
The stock of older housing in Victoria proper is somewhat unique and that adds another level of complexity to our housing problem. I think if this were any other city, most of these older homes would have been demolished by now and our city would have mostly houses similar to the “Vancouver Special” which was designed to maximize square footage. Instead we have a lot of houses that under utilize the size of the lot.
I packed It In back In 2006. I like my space. I found If you need the rental Income, Its much better to just work more.
Apologies, I should have said over 6k and not near 7k
Had been a while since I read the story…
https://www.simcoe.com/news/barrie-area-woman-watches-mortgage-payments-go-from-2-850-to-6-200-forced-to/article_d38f1726-1c8d-5f65-910d-6324176c2e64.html
I will see if I can find the folks that were paying in the 3k realm that ended up over 7k… Actually, just a lot of those stories out there and they are easy to mix up 🙂
This is the assumption of interest rate will be increased from around 2% to around 15%.
Agreed. If we are really into conserving electrons Leo should turn off comments entirely.
Personally I like this mostly cordial commenting community. And I learn new things….. some of which are true 🙂
yes it is hard to quantify, someone with a family will value that differently than someone without. $2800 to $7000 is a very extreme example which very few people would actually experience.
That’s what the bond market is trying to figure out, what is the new long run rate?
Meh, it’s all is a waste of electrons. This one seems to be spirited, sporting, good fun and respectful for the most part.
They hadn’t seen a pandemic that resulted in crisis level rates down to that 0.5, and it does seem foolish for them to assume that was a new normal and that it would be unforeseeable to see a counter correction in rates in response to over stimulus. If they haven’t seen it in their lifetime, it’s called read a book and don’t depend on memes providing you with what you want to hear. In the end they followed the crowd, didn’t ask any questions, didn’t think hard enough about it, acted on hubris and did it to themselves.
I agree with this. People want “steaks” (SFH), so making more “hotdogs” (1 bdr. Condos) won’t help buyers in the SFH market.
The enjoyment of that house really changes depending on what it is costing you. A lot of poor selection was being snapped up at premium dollars. Imagine being some what dissatisfied with a purchase costing you $2800 a month, what is that dissatisfaction when it is approaching near $7000? I don’t mind big prices, but if you’re paying big for a lifestyle, it should be one that you will enjoy.
Not to get in the middle of this useless argument, but 6% interest rates are historically pretty normal so I dont think of them as either pretty high or surprising. Should people have considered a possible return to much more normal rates? Depends on how prudent people should have been.
What I do think is the argument on here is rather a waste of good electrons.
Of course not, and to suggest that they could/should have is just nonsense. Recall that the “consensus” view was that inflation was transitory until it turned out it wasn’t. People can’t predict shit.
Just to recap. Someone posted that nine interest rate increases (increase from 0.5 to 5% ) by BOC were not anticipated by most people.
Your response – “How could they have not…”
The implication being that average homeowners should have expected both the pace and magnitude of the interest rate increase. I call BS. Sure people should have anticipated an increase, but could people really have foreseen an increase of scale and magnitude that hasn’t happened in their adult lifetime?
What you missed out was potentially enjoying that house for 2+ years which you will never get back…. Perhaps you can find a better house for cheaper later which then could make up for those 2+ years.
LMAO
Predictions are really hard and predictions about the future are almost impossible.
They are going to make things so difficult for landlords that many will decide to pack it in. Some renters are great, some a nightmare. I’ve had a trouble free 35 years until last Sunday. I won’t get into details yet, but tenants will soon have less to choose from and will be sleeping in their cars. My tenant has been displaced and had no insurance. After 14 years she’s out on the street.
You like reframing to things that weren’t said. It was obvious that interest rates would correct (you are adding the timeframe part, I guess to split hairs on trying to support your point) and that timeframe was the surprise. Rates increasing to higher levels that people were not accustomed to seeing and it would be quicker than people would expect was no surprise. As for making money, well, some of the big rate GICs have matured, but I believe many must still be sitting on those 6.5% GICs…. I never chase big money, take some opportunities on risk, but balance is the most important thing in any portfolio. Where I did make out big was with not taking out a max mortgage at around 2% on a peak price bidding war because mortgage rates were bound to normalize and then increase beyond that adding financial strain and risk down the road.
Not in hindsight at all. The discussions happened here .
I’m reading through the amendments to the RTA (https://www.bclaws.gov.bc.ca/civix/document/id/bills/billscurrent/5th42nd:gov14-1). It seems that pretty soon landlords will have to pay a fee to apply for an order for landlord’s use (see 29, Authorization for Ending Certain Tenancies). Am I reading this right? Does anyone know when this will get first reading?
The combination of DOM and sold to ask or assessment matrix may be another option?
While big picture I agree with you. In the almost 20 years of HHV and economists’ predictions no one has been able to predict anything with any certainty.
However, unless we go into a substantial recession I just can’t see how prices don’t inch upwards with lower rates. Immigration is off the rails, we aren’t building enough housing, SFH inventory in particular will start to shrink with new zoning reforms. I am having a really hard time picturing lower prices (specifically SFHs) with lower rates when they eventually come around. Who knows at this point when that actually may be.
Thanks everyone for chiming in. Marko, I was hoping you’d respond. Appreciate all of the insight from you all.
Not on HHV. My post was kind of sarcastic. Lots of folks say things were “obvious” in hindsight.
The consensus view IS important, not because it is correct, but because it is what determines a lot of asset prices.
Not unusual to get showings within 30 minutes of the realtor uploading the listing to the MLS system. Totally normal.
(Very few serious buyers, like 1/10, actually use realtor.ca)
This is what the industry would have you believe so you think working with an agent is important as they have access to the “grapevine.” Less than 1% of sales occur this way.
i/ It is a slow market; most sellers have expectations beyond market value coming out of the gate so getting the two parties to agree on a number is very difficult.
ii/ If the seller is going to price aggressively they will want to take it to MLS to see how it plays out versus selling it to an individual off market at an aggressive price.
Unfortunately I don’t think people on HHV have a good grasp on how real life actually works. I have clients that recently became aware of a property they are interested in that might be going to market soon so they made a private off market unconditional offer directly to the seller of $950,000. The seller says $980,000 is their bottom line off market (and they will list for higher) and the deal doesn’t come together and seller lists the property for $1 million a few weeks later. Three weeks later after it goes to MLS property is still sitting on the market without an offer and even if the seller sold for $1 million they would net less than $980,000 because the real estate fees are $33,000+GST. Now my clients are waiting it out a bit but will end up writing $950,000 with me as their agent sooner or later.
Off market deals are most often difficult to put together. You can’t ignore the price discovery benefits of MLS.
The benefit of the MOI is that it is simple to calculate and simple for most people to understand. It’s like looking at all the “For Sale” signs in your neighborhood. That doesn’t make it the best indicator just the simplest.
I prefer the average Days-on Market over the MOI. However when agents re-list a property that resets the day counter back to zero. That makes the DoM less reliable in BC. In other provinces the DoM doesn’t reset to zero when the same agent re-lists a property. Every economic paper I have read refers to the average DoM indicator when analyzing the market. I suppose one could get around this by weighting the MOI, SNLR, and DoM differently but that is out of my pay grade and left for an academic to determine.
The benefit of re-listing is that it freshens the listing by bringing it to the attention of more buyers as a “new” listing.
Seeker now that you have a property listed it is possible to determine how strong the market is for your property as the physical and locational aspects of your property are known. The months of inventory, sales to new listings ratio and the average days on market (exposure time) of like properties in your price range for your specific property can be determined. Now it’s possible to determine if the market for your specific property favors buyers or sellers during your negotiations.
Home buyers are always checking the hot sheets of what is new to the market. The first three weeks of your listing will garner the most activity. After three weeks if you don’t get an offer, then that usually means the price has to be adjusted.
A fallacy that sellers fall into is if they get an offer right away that means their asking too little and they turn the first offer down. Most often, the first offers are the better offers. That you get an offer in the first week or two only means that you received an offer in the first week or two. It doesn’t necessarily mean that the asking price is low.
I’m not a realtor but I’ve heard that a huge portion of sales are made through the realtor grapevine. Not open houses, not even MLS – just realtors being aware of people looking for a certain product in a certain area.
I like the MOI gauge. It demonstrates that MOI isn’t the only factor in where prices go.
Barrister, thanks for the common sense answer and the wished luck.
If one is in the business of making a product such as corn flakes all one has to do is look in the warehouse and see if one has too much inventory and then adjust the price to reduce the inventory.
With real estate, It’s more difficult to estimate inventory as there is greater variety in the types of real estate. For example , there could be an over supply of one-bedrooms but a shortage of two-bedroom condominiums. Or there could be an over supply of luxury homes but an under supply of starter homes. Even the style of home can makes a difference. No step ranch style homes were very popular when the market was predominantly retirees moving to Victoria. When the market shifted to families moving to Victoria, the two-storey home experienced low inventory. The same with homes with suites as affordability eroded.
The way we calculate months of inventory is very broad as we don’t distinguish variety but instead treat real estate as if all housing were identical boxes of cornflakes.
SEEKER, ask your realtor since he has a good chance of knowing. Besides it is hard to ever tell who is tire kicking and who is not. Luck with your sale.
Question for all of those “in the know.” Our property listed this morning. At 7:30am I got a text from our realtor about a showing for today. I’m not sure the house had even hit realtor.ca at that time. Is this indicative of actual interest in the property? Is this likely a realtor giving another realtor a heads up? It seemed so soon to me. This is my first time selling a house. Just curious if this is likely to be tire kicking or genuine interest. Though that doesn’t change anything on my end, I am curious.
Flat prices at a time of some not insignificant inflation does not really reflect a sellers market.
I agree, or some type of rolling average.
One of the grandkids got a 6.3% mortgage on their first house which I thought was fairly reasonable. Not as low as it used to be but manageable in the long term as her and her husbands salaries go up and inflation impacts the monthly costs. Might need to start thinking about great grandkids. (Ouch)
To which I might add, it matters a lot what the credit markets are predicting, i.e. what rates are for fixed term mortgages. Those who went to floating rate mortgages to save half a point, while turning down fixed terms – even 10 years was available – at historically low rates, were putting predictions ahead of risk free commitments.
The months of inventory indicator of 3 to 6 months as being a market in favor of sellers is by convention. There isn’t a reason why that shouldn’t change. We have been experiencing flat prices for a couple of years in what should be a sellers market with increasing prices. Perhaps it’s time to re-think the months of inventory indicator.
3.5 months of inventory may be a balanced market.
I don’t recall anyone predicting this, do you?
What I find most interesting is how “consensus” predictions on anything in economics — interest rates, recessions, stock market rallies and crashes — are always trumpeted out as important, when even a casual examination shows they’re all BS.
In just the last few years the “consensus” was that rates would be low for a long time (wrong), then it was that rates wouldn’t rise to 5% in a year (wrong), then it was that there would be a hard landing (wrong) unless rates are quickly reduced in late 2023 or 2024 (wrong). It was also widely discussed how the stock market and housing market might crash under higher for longer rates (both wrong).
And, now we’re waiting on the supposed boom in housing prices that will come when rates are cut this year (wait, might those predictions be wrong too??).
At some point you just have to ignore what economists’ predictions say and live your life.
New measures proposed to protect B.C. renters from bad faith evictions
https://www.timescolonist.com/local-news/new-measures-proposed-to-protect-bc-renters-from-bad-faith-evictions-8543614
And for all those folks who knew in advance that BoC would raise rates by 4.5 % in less than two years because it was so “obvious” I expect that you are all rolling in cash now as there was big money to be made betting (correctly) on interest rates so far away from consensus expectations.
I guess this is what a mild housing correction looks like in Victoria.
Prices level with approximately 2.4 years ago while CPI up by a cumulative 10.4% over that time span