Victoria bucks the population trend
Population growth has been dominating the housing discourse in recent months and years, with growth driven by a strong increase in non-permanent residents. The problem has been tackled with recent reforms that should bring population growth back to normal, but that depends on whether governments are able to follow through on their plans.
Every province has seen strong growth numbers, but it’s been particularly striking in smaller town Ontario and Atlantic Canada, which saw an influx of Canadians moving in post-pandemic combined with the jump in non-permanent residents. Moncton for example, after decades of trundling along at a modest 1% growth rate, grew by a staggering 6% in 2023. There is no doubt that this population growth has put pressure on prices and rents in those regions.
In fact, out of the 152 census metropolitan areas and census agglomerations, 72% of them grew faster in 2023 than they did in 2022. Who’s in the other 28%? Well Victoria for one, and in fact many island communities including Nanaimo, Ladysmith, Duncan, Parksville, Port Alberni, Courtenay, and Campbell River. Growth did pick up in Victoria after the pandemic, but not by that much. Victoria grew 0.3%/year faster post-pandemic than the years immediately before.
While increased population growth still has an indirect impact on Victoria, if you think our recent price movement is primarily driven by changes in immigration policy, you’re likely mistaken. At the same time if you think that measures to bring national growth back to normal levels will have a big impact on Victoria, you’re also likely mistaken. We’re certainly not immune to upcoming policy impacts, but expect a more muted impact on the Victoria market than some of the cities that have seen their growth rates dramatically change.
How has our population been growing? Well it’s largely through inter and intraprovincial migration as has been the case for some time, though that took a step back last year. Natural growth (births minus deaths) has been negative in Victoria for 20 years, but in the last two years we had over 1000 more deaths than births in the city. Expect that differential to continue to increase as the population ages. The unusual drop in growth rate last year was due to a sharp drop in migration from other areas of Canada as well a drop in direct immigration. Note that the last two years do not yet have residual deviation figures, though those have been extremely low in recent years so are unlikely to change much.
Unfortunately the data on where those Canadians came from last year (or rather, failed to come from) is not available, but as of 2021, the top 10 cities people moved from are below. Will be interesting to see how that changes once we have current data but I suspect it’s a broad based decline rather than a dropoff from any particular city.
Also the weekly numbers
| May 2024 |
May
2023
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 111 | 262 | 464 | 611 | 775 |
| New Listings | 344 | 739 | 1131 | 1441 | 1356 |
| Active Listings | 3102 | 3206 | 3276 | 3305 | 2189 |
| Sales to New Listings | 32% | 35% | 41% | 42% | 57% |
| Sales YoY Change | +5% | -6% | -2% | -2% | +2% |
| New Lists YoY Change | +64% | +40% | +34% | 26% | -11% |
| Inventory YoY Change | +52% | +52% | +55% | +52% | +23% |
| Months of Inventory | |||||
Sales are still tracking the year ago levels while new lists have come down some, though still up by a quarter over last year. Looks like we’ll end the month a near-exact match to last year, with perhaps a few more due to ending on a Friday (usually big sales days).
As a result of the decrease in new listings, inventory is building more slowly. Last year inventory kept increasing until mid-October, but that is extremely unusual. In a normal market, peak inventory happens in June. We’re likely still cooling a little so it may be pushed back, but don’t be surprised if the year over year increases don’t hold at north of 50% all year.
And yet, I think there’s a stronger case to be made against the type of high density condos that are currently being promoted under the concept of “transit oriented development”.
This type of development risks maintaining the status quo of building lots of small, expensive, new supply to pad the numbers for housing construction, without meaningfully adding to the supply that Canadians most want.
I think there is general agreement here that exclusive single family zoning is Andy negative for society and needs to be discontinued.
We all appreciate your efforts to advocate for reform.
There is also broad support for the view that Canada has had a housing shortage for years, and that this shortage has allowed investors, speculators and home owners to bid up the price of land, particularly in urban areas. This confluence of factors (along with years of zero or near zero real per capita GDP growth) is why housing is so unaffordable here.
But, the major question is whether building more housing, particularly dense housing, is likely to improve affordability in the coming decades.
I think a lot of people have deep skepticism about the idea that we can build our way out of this situation, and here are some of the main reasons:
We are adding new supply through density, which tends to increase prices per square foot relative to sprawl. This is due to upzoning increasing land values, higher construction costs for condo towers, high development fees for new builds, front-loaded property taxes applied to new construction, etc.
Unless there is meaningful reform to all of these factors, we are at risk of new supply continuing to be what it has been for many years: expensive, luxury properties that are comparably priced or more highly priced per square foot than existing low density suppl.
Cost per square foot of living space is also the key metric: no one cares about how affordable condos are if you cant tolerate living in a shoebox with your family.
Unless supply actually grows faster than demand, basic economics do not predict that supply can meaningful reduce costs.
Paul Kershaw published a good Globe and Mail piece a few weeks ago explaining exactly why this is: the aging of society is reducing the ratio of workers to dependents (ie retirees) which will force future governments going to either raise taxes, or shrink the welfare system, or will require population growth — likely all 3 will occur in reality.
Just look at the latest federal budget for proof— OAS is slated to dominate future spending unless it is reformed, federal debt payments are now greater health care transfers, and our debt is still growing.
Overall then: I would absolutely love to see all of your advocacy work contribute to a change in policy that will improve housing supply AND affordability.
But I’m not holding my breath for things to meaningfully improve in the next decade due to supply.
I think the only likely ways affordability improves any time soon is an unexpected rise in incomes or a major drop in interest rates.
Funny, I used to hear a lot of that from my parents’ generation. They did live through the Depression and WWII though, so maybe they had a point.
But I find it amusing to hear any boomer complain that the current generation, who have to work a lot harder to get what the boomers got, are lazy and entitled.
That’s a zero sum game because you would just be displacing someone else. Working for reforms to improve housing accessibility is a win for society.
Oh don’t worry I’m doing that too. I just don’t have nearly the hustle that you do on that side.
I think if you were smart you would spend your energy and time making money so you can help your kids buy a home down the road versus providing some of the best information in all of Canada, for free, and then idiots calling you a lobbyist 🙂 because they can’t understand a simple hot dog example.
Not sure what you disagree with. I am saying 38 hrs worked today is less productive than 38 hrs worked 20 years ago?
+1, not sure why this is so difficult for people to understand?
Disagree, most senior executives in the private sector are disaappinted at the entitlement and work ethic of the current generation.
Lots of immigrants doing just that today. Just not a lot of them in Victoria.
lol, wtf. The stupidity on this blog just continues to exceed my expectations. If you think Leo is a lobbyist for developers, you need to get your head examined. It is mind boggling that people can read information for years and literally absorb nothing, but here we are in a housing crisis.
I think all you have to do is read the comments on HHV which I think are aligned with the general public to realize we will absolutely never make it out of this housing mess, at least not in my lifetime.
Not sure I see friends taking their flex Fridays to drive Uber, I think our respective definition of hustling might be a little different. Even thought the number of hrs worked compared to 20 years ago might be the same I feel like society is way less productive in those hrs worked.
I grew up with both my parents working 50-60 hrs a week and Sundays we delivered fliers on top of that to save for a downpayment. Then it took my parents 15 years to renovate their kitchen and all of my first time buyers working 38 hrs per week balk at such a kitchen when I show them properties, “this needs an immediate renovation, can’t live in this.” and I am scratching my head like hmmm lived in this for 15 years it was totally fine 🙂
Even years later when my parents had a bit more money every single possible hustle continued. When I was a teenager in the summers they would send me off to Europe to improve different language skiils but for the summer they would rent out my room (we are talking 800 sq.ft. 2 bed 1 bath as the basement was always long term tenanted) I remember coming back a couple of times and my parents had gone away so I would go into their room and I would be sharing our house with a stranger, it was annoying. I did make a life long friend out of it in Tanzania.
Easy, just go look at the share price of banks. If you see a >25% decline in a week across multiple banks then something bad is going down in the sector. Market is forward looking, it will show up before the quarterly reports.
The chart you posted isn’t for the banks’ residential mortgage loan-loss provisions in Canada. It is total loan loss provisions, including loans in other countries, car loans, commercial loans etc.
Most of the banks’ loan loss provisions are for loans other than Canadian homeowner mortgages. There’s a good reason for this, in that the banks’ homeowner loans are either insured or well collateralized, with the average equity on all homes in Canada being 73%. And the average equity on homes with mortgages is a high 50%.
Even the variable rate mortgages are performing well, scotiabank reported only 0.28% delinquency rate for these mortgages, meaning only 1 out of 357 of their variable rate mortgages is delinquent. Seems tiny to me.
https://www.canadianmortgagetrends.com/2024/05/scotiabank-says-variable-rate-mortgage-clients-showing-signs-of-stress/
“the delinquency rate in the [Scotia] bank’s variable-rate mortgage portfolio increased to 0.28%, up two basis points from [0.26%] the previous quarter.“
Neither the feds nor the provinces have ever given direct bailouts to homeowners in trouble. Two reasons I think, it would be politically divisive and the on-budget spending would increase the deficit and jeopardize the government’s credit rating. Off-budget assistance is another story. The Harper government intervened to support the mortgage market during the 2008 financial crisis. The BC government continues to support property tax deferral whether the homeowners are in trouble or not. And of course we are seeing kicking the can on negative amortization.
As for financial institutions, the whole point of mortgage insurance is to offload lending risk from them. Similarly deposit insurance protects institutions from depositor runs. When CCB and Northland failed not only did CDIC make good on insured deposits, but the feds made good on uninsured deposits. And they took a lot of criticism for the latter.
But how much is from residential RE lending, given that high ratio lending has to be insured? Back in the 1980’s we had two outright bank failures (Canadian Commercial and Northland) and one de facto failure (Bank of BC), but they weren’t due to Canadian residential RE lending. The biggest bust ever in market cap terms, the Toronto bust of the 1990’s, led to no bank failures.
I don’t think the recent failures in the US were due to residential RE lending either.
@totoro @max It wasn’t the fact that Max bought a home that makes it boomerish. It’s the fact that he said he didn’t think he could be married to his wife if the house wasn’t big enough that he could hide from from his wife he would be divorced.
Also if you want the missing middle initiative to work get rid of the two staircase rule, find a reliable way for multiple developers to work together for infrastructure upgrades, and remove parking requirements.
I dunno. And I don’t think anyone quite knows how losses will go if rates stay high. Definitely writeoffs are rising quite a bit but I don’t know when this becomes a real problem for banks.
Oh it’s a big part of the solution once they implement it so it’s actually allowing those places to be built. I think it was clear from the start Victoria’s policy was hobbled, but still an important symbolic step to end single family exclusive zoning.
Kelowna actually did this properly where multiplexes were legal in practice, not just on paper (albeit on a limited number of lots), but so far no local municipality has passed anything that comes close.
How gentle is gentle? With all of these variable rate mortgages and people leveraging to invest in multiple properties, it doesn’t take much to cause a panic. I wonder what % decline in pricing would act as a tripwire beyond loss reserves set aside by the banks.
Gentle enough to me means allowing inflation to let incomes catch up to house valuations that flatline, which has been mentioned earlier in this sub. But that still gets back to my lost generation comment. I don’t see that taking < 10 yrs to realize in a meaningful way.
Did the missing middle initiative not live up to your expectations? You seemed so certain it was the solution.
My unpopular opinion is that young people may be better off if prices don’t crash. If they do, governments will use taxpayer money to bail out the banks and underwater homeowners and the broader financial system at all costs and young people will be saddled with paying it all back.
Best case scenario for young people wanting to get into the market is likely a market with gentle enough declines that no one panics and existing reserves can cover the losses.
The right thing that OSFI will do is to implement loan to income ratio starting next year. Ireland did the same in 2014.
Sure
The commissions, the taxes, the moving, the uprooting to new schools, the cra up your ass.
When you add all this up including your time and effort (time is money).
Not worth it. Since your flipping, the capital gains exemption would be rather small.
IMO.
Nothing like 3 kids all living in the parents house while each using their own principal residence exemption to speculate and flip 😉
Is that slang for toxic family values?
Perhaps they could teach us a thing or two.
I did too. They are no dummies. Most of my best friends are of different culture/race.
As long as they pay their taxes and contribute to society they have just as much right to be on this Island as I do.
Its not even our Island to begin with. The first nations were here long before any of us.
The cultural value of family working together for financial success is why many immigrants leap ahead of the Canadians who been here for multiple generations and descend from UK/EU immigrants who came with the protestant work ethic and nuclear family values. I watched a lot of the immigrant kids I went to school with buy land and a large house together with extended family. They are all wealthy now – like multigen wealthy.
Unless your over extended. Even in the 80s most made it through.
OSFI really stepped up their game.
I also think we would have been screwed without the stress test. As it is now there have been a tiny fraction of properties that are currently under or have sold under a Conduct of Sale. Most are not from the Big Banks (“A” clients) that had the stress tests but from private investor groups or “B” Clients.
Well, since you put it that way. Which is a very good way of putting it…I retract that statement.
Donald , very much agree now let’s make some money
OSFI deserves a national policy award for bringing in the stress test.
We would have been so fucked if rates went from 2-6% without the stress test. Even with it, the stress to the financial system is no joke.
Last thing we need is for regulators to fiddle with it based on where we believe rates may be going. Also there’s a danger of politicians fiddling with it for political gain.
Agreed, if an investment asset is not allowed to fail, capital will flood into it making it too big to fail. Even if that asset actually produces something that can be used for other productive means, too-big-to-fail creates perverse incentives (i.e. Boeing)
In many ways banks/homeowners can hold the economy hostage making RE a larger % of the overall GDP.
Those days are behind us . The banks are backstopping the market and are not allowing real estate to go down in a meaningful way
Then came the bursting of the .Dotcom bubble.
Wheeee…Good times.
People lost their shirts.
Hardly everyone. Just those whose livelihoods depend on overpriced RE.
The Vancouver RE bust of the 1980’s was instrumental in fostering the growth of the local high tech sector as it made the city attractive and affordable to talented people.
If I don’t see effort there is no gift. It will be my signature meaning it will be my asset (first position). When I feel the time is right I will truly gift it to them. Its far better to gift it to them before I die.
It doesn’t stop with just a one time gift. My wife’s sister is always being tapped by her son’s that can’t make their payments. Because she was a single mom, her guilt for not always being there for them when they were growing up, won’t let her say no.
If you can’t give them love – then money will work too.
It’s increasing constantly, not just in amount which might account for rising prices, but % of buyers as well. Nothing new, sure. To an increasing degree, absolutely.
Since rates look to be stabilizing, possibly even heading south. Why not just remove the stress test?
Donald , parents have been helping their family for generations, nothing new there .
I don’t want to disparage providing financial support to kids to get into the housing market. However, if our system of providing suitable housing for young people is gifts from parents, we’re in bad shape. Anyone who doesn’t have parents of means has legitimate reason to be upset with this.
It isn’t…We made it this far. As long as I see effort I will always be there for them.
Whatever , I’m not too sure helping the kids is a hardship for the parents , If anything it’s made the family unit that much wealthier , and that’s the name of the game
5 years might be optimistic. A lot of home owners and investors would get burned pretty bad and consumer confidence would be in the toilet. With so many parents bank rolling their kids, a downturn could drag them under too.
Anyway, re-financing has increased with home owners taking out equity to buy pre construction condos in Alberta. Alberta is just rocking it. Gobs of money to be made. Alberta doesn’t have the same kinds of restrictions as BC.
So you don’t want to be productive because you can’t buy a house? Your fired!
Careful with that. Burn out is a thing, so is divorce…Slow and steady wins the race. I know three guys that went to camp in northern Alberta making $120k per year. House is gone, Wife’s gone, now they are weekend Daddies living in a basement suite.
And if that happens then there will likely be 5 years of severe pain for everyone, how will that get dealt with?
Yeah I’m not married to the idea either. We certainly won’t hesitate to feed money their way for housing if that’s what it takes. The Die with Zero book opened my eyes on that factor. Better to give those gifts early instead of trying to build maximum inheritance.
In the meantime I’m hoping to play some small part in trying to improve the system
Security and affordability of housing are important. Paying from own earnings being important for self-actualization I’m not sure about. Certainly not a culturally important thing in many parts of the world and people still move up the hierarchy of needs quite nicely.
Parents who benefited from equity appreciation paying it forward to kids so they can have a secure place doesn’t take away from self-actualization in my opinion – it is fair and doesn’t mean income based contribution is also not expected from the adult children. When the math changes you have to adapt to succeed.
If you have parents who can’t or won’t help you out with housing then this is not great for security or social equality. The choice to move away for cheaper housing seems like a better option.
That’s a good reason for killing it actually. Canada’s overpriced housing draws investment and spending away from productive sectors, and has been cited as one factor in our low overall productivity.
https://www.theglobeandmail.com/business/commentary/article-lowering-canadas-high-housing-costs-is-also-a-recipe-for-raising-our/
That’s a good point, don’t want to cause a recession. But waiting for supply to catch up will take a long time and create a real wealth chasm since younger people will start with less and less as they save for a retirement that will cost them more given increasing life expectancy. This will result in more cost savings like having fewer kids.
Why not use demand-based tools? I.e. raise taxes on rentals and provide rebates for renting at a certain densification level (more tenants per sqft)? Increasing property taxes on additional homes at much higher rates? The list goes on…
Demand based tools are crude and blunt, they often have unintended consequences. But waiting for supply seems like a recipe for causing a lost generation.
You don’t want to kill the housing party. Too much of our economy is dependent on it. You just want to maim it a bit.
Spend money on rental apartments so that we have a glut of rental buildings. Because if we can bring down rents then most of our problems go away. Otherwise our rental market is going to cause a housing recession as people will just stop moving here.
Our rental and housing market is dependent on more people moving here than leaving. If that doesn’t happen there is a chance the housing market will collapse.
BOSA asking $2065 a month for a studio is just bad advertising to attract people to the city.
Good time for the LPC to take the L and pass some unpopular policy, they likely will lose the next election anyways. A proper policy might look more favourable 10yrs from now rather than 2yrs from now
You should run for office then, too many people got too much to lose for any party to kill the housing party. Like I been saying, cashflow neutrality for a rental sfh will be the floor.
+100 to this, if you could slice/dice land to what makes the most sense for it. “Could” being the key word, which requires political will which we hopefully have.
I just hope we don’t view this as a desirable state of affairs. If your country’s RE relies mostly on investment/speculation, you’re marching toward a bigger societal problem. Canada’s RE isn’t special compared to the US. Instead, conditions have allowed speculation, both foreign and domestic, given government support for high prices and lack of other productive places to put capital.
I disagree with that. The reason we have this outcome today (to some extent, most condos are not actually micro-condos) is because we have an absolute shortage of units out there. So in that case there is an incentive if a municipality approves say 40,000 square feet, it’s likely in the developers interest to divide that into a more units rather than fewer. But that’s only true if the market for small units isn’t saturated. As is evident from the discussion below, many people need or want more space so they won’t be interested in renting or buying small units no matter how many get built.
If there’s too many 1 bed units, then prices decrease while prices increase for 2 bed units that aren’t as well supplied. Then it becomes more profitable to build those bigger units for the developer. There’s also a million other factors. A developer isn’t going to propose 400sqft condos in Sooke but there may be a good market for those from single people right downtown.
Developers will build anything that’s allowed and profitable. Right now family-sized units are mostly in townhouses or duplexes/triplexes/quadplexes. Unfortunately those are illegal most everywhere so they don’t get built. Make them legal and easy to build and developers will build them. Plenty of evidence that this is true from jurisdictions that have legalized this kind of family-friendly infill and then developers jumped on building it.
A huge reason behind that is minimum lot sizes ar e very large. When your minimum lot is 6000sqft then the land value is very high, you may as well build for the high end. Makes no sense to build a new 1000sqft house on an $800k lot. We could drop minimum lot sizes and get more modest detached houses, but so far governments have decided not to.
Until the approval for missing middle or really any multifamily is just as easy as building a single family house, we really can’t say anything about what types of housing people want to live in. Some are severely hindered, others aren’t. That distorts the picture.
You mean Gen X. Boomers are sitting at home watching reruns of Gilligan’s Island and eating baby Pablum.
Many “millennials” also got rich from RE speculation btw. Also, having a fulltime job is expected, not an accomplishment.
Also see: https://www.honestjobs.com/post/nobody-wants-to-work-anymore-is-not-new-and-it-s-not-true
People are buying them right now.
@VicREanalyst – it’s pretty well understood by now that Millenials work more hours than any other generation/cohort has or did, for less relative pay. Don’t fall prey to the “nobody wants to work anymore” fallacy. That’s literally been repeated by every generation since time immemorial. I’m right in the middle of the Millenial cohort, and my 6-10 closest friends all work fulltime jobs (many 50 hours a week – two nurses in there, two construction workers, and a couple of software developers), as well as having side hustles like detailing cars or driving Uber.
Meanwhile wealth inequality gets worse as Boomers get rich not from their labour but RE speculation/appreciation (such hard workers!), and some of you are slamming Leo for wanting his kids to have a decent place to live. Removing government red tape and allowing the people who build houses (evil developers!) to build house easier is one step in remedying the problem. I also believe government should build low-cost rentals at much higher rates, and I’m happy to pay some additional tax for it.
https://www.independent.co.uk/life-style/millennials-gen-z-boomers-working-hours-compared-b2484624.html – here’s a link if you want some data, you could google and easily find this.
Sure you can when most of Canada’s population being concentrated in 2 areas plus wealth is global and mobile. As long as RE is viewed as a profitable/safe investment then anyone below upper middle class will have trouble accessing it because someone else with more money will be there to outbid.
The middle is actually where the most money actually is, and the market is the answer, the market needs to find a way deliver and compete the product the consumer wants at the price point the consumer can meet. A SFD is not automatically luxury nor are all condos low end and neither are likely suitable for the majority of consumers. Command economy directives tend to interfere across the board and cause productivity issues. If too many luxury homes or micro condos are built, so be it. Guess what! The result will be they missed the market and those assets will stagnate because they are outside consumer demand. Take off the governors and allow over building happen and business take on the risk.
That is only true if you can “print” more land. That’s only possible moving out west, which requires people to move away from where they grew up. That may be the reality/solution, but it presupposes that young people need to make new cities to live in.
Those factors by themselves ought to result in the price/income in Canada being lower than in the US, not higher.
Your assumption that people have the money to buy duplexes, SFH, etc. is a big catch. If everyone is priced out of larger homes, even duplexes, townhomes, etc. then builders would have to price those units at a low enough price to attract the buyers who are dissatisfied with small units in high rises. That erases the profitability of those homes, hence we’re back to the same position.
If builders could build as much density as they wanted anywhere they wanted, you’d certainly get a lot more condos built. But if the builders simply built as many small units as they could, you would end up with a glut of them and not enough buyers at the profit point. At some point it’s going to be more profitable to build larger units. And so on all the way up to duplexes and SFH.
By the way, land is not a fixed cost, it’s determined by what the finished product sells for. Land in Victoria is expensive because there are people who are wiling and able to buy expensive houses. There was a big slump in land prices in Vancouver West Side and West Van about a decade ago – which was discussed here – and it didn’t happen because they started making more land.
@VicREanalyst – it doesn’t work like that but probably should. Canada has deviated from the US in price/income ratio by a significant margin. While that may be explained somewhat by our lack of 30yr fixed mortgages and secondary markets for mortgages, the incomes that people earn in Canada are nominally around 30% less before currency is factored in. We can’t have housing prices be similar or higher than the US when incomes are 30% less nominally.
Please provide some examples outside of recent immigrants/international students…
@Leo : I’m not advocating banning affordable options either. However, if we simply allow market forces to dictate the housing stock it seems we’ll either get luxury SFH or small condos with very high price/sqft. Land/permitting is a fixed cost so once you buy it to develop on, you’re incentivized to jam as many units on that fixed space as possible. For a SFH, you would likely only want to build a luxury detached unit because that further decreases the % of fixed costs that make up your cost basis. The “missing middle” likely doesn’t get built because in general people would rather live in a high rise with smaller space than accept similar sharing of walls, etc. for a higher price. Meeting somewhere in the middle between the extremes requires an attractive enough price to offset amenities in a high rise while also being significantly less than a detached unit. The attractive price part of the equation doesn’t fit well with the high fixed costs of the land/permits/etc.
Honestly a perk of housing advocacy is breaking people’s brains that just cannot comprehend the idea that someone could do something they believe is important without getting paid.
However if someone wants the selfish explanation for why I’m advocating for housing, it’s that I have kids and would like them to be able to afford a home. Now I’m not banking on the advocacy working, and if it doesn’t we’ll help them buy or rent the homes they need regardless. But sure would be nice if they had secure and affordable places to live and could pay for it from their own earnings (important for self-actualization I believe)
Obviously. Housing is housing. Less housing is bad. What gave you the impression that it would be any different? If someone says single family homes are an abomination and we should ban them I will have the exact same take.
If the BOC cuts rates on wednesday, it is said they will not taper again until the US Fed does in the fall. How quickly will house prices be likely to climb the next couple years as as rate cuts unfold?
Haha Vicreanalyst thinks people are working less hard now a days. Out of touch man. Look around, everyone’s hustling their tales off.
Let’s say we hypothetically ban condo construction in Victoria and only allow low rise town houses in the city.
What will happen is that developers will build condos outside of the city, in the adjoining neighborhoods of Esquimalt and Saanich. Which is what is happening now due to the high land prices in the city.
It’s not necessary to ban condos – the market place will take care of that itself.
We might want to speed up that process up by decentralizing and having nodes of high rises throughout the core districts. Build a dozen 15 storey high rises in Saanichton, Keating, Brentwood along with expanding the business sectors so that people can work and live in the same neighborhood.
We might be able to do this by having neighborhoods like Oak Bay transfer their provincial housing targets to Saanich or Esquimalt. Raise the property taxes in these areas and have these areas pay Saanich and Esquimalt for development costs from Oak Bay and Victoria property taxes.
When property taxes in Victoria and Oak Bay become unreasonable then people will sell and house prices will come down and the land prices will fall to where it is possible again for developers to assemble sites and build townhomes for middle income families.
Double the property taxes for single family in Victoria and Oak Bay and half the property taxes for townhomes.
Completely agree, now days people in Canada are so entitled and expects a handout out for everything and have zero concept of actually working hard to get something……
nope, cautionary tale.
“Cautionary tail” ? Really?????
No one ever went broke taking profits ;), cautionary tale for all Airbnb owners who didn’t cash out when they could have.
IMO there will be a bump next weekend regardless of BoC decision.
That is not really the question. Land prices are so high now that the question is are you prepared to pay for their SFH through a redistribution of your outsized home equity because where else would the money come from? If not, you are a guy living in a mansion telling others that a SFH is what they should have in let them eat cake style.
I’m ambivalent about house/condo living. Both can be good depending. And the depending is not so much about size, but about how they are designed and maintained, what light they get, what is the view, how well insulated they are, where are they located and what is the ambient noise like.
By far the biggest issue with housing for me is stability. When we rented a unit out recently I did not enjoy seeing that some of the applicants needed to move as their landlord had sold their place or was moving in. This created a lot of pressure on them to find something in a limited amount of time and, for many who had been paying under market, at a much higher rent. I don’t want my family to have to go through this type of stress. I’d rather live in a condo I own and can afford than rent a house I cannot afford to buy for the yard/space and be subject to having to move with little notice.
The debate about whether small condos are good or bad is completely missing the point IMO. If you don’t like small apartments, don’t buy them and don’t rent them. Whether or not other people like them (some do some don’t) doesn’t influence what we should do either.
If people are choosing small condos because they prefer it, then we shouldn’t ban their homes.
If people are forced into small condos because prices are high, then we shouldn’t ban the most affordable options.
Either way, the policy response is the same. Let the market build a ton more housing of every size, including small condos. Also build a ton of social housing. There is exactly zero evidence to believe there’s a market failure here that developers only want to build small condos and not large ones. They always build what they can make a profit from, and they are happy to build big units suitable for families like townhouses if governments didn’t literally ban those homes on the majority of the land.
The idea that during a housing shortage caused by society making it increasingly difficult to build homes we can somehow improve the situation by banning more types of homes is completely insane.
The problem with small condos isn’t the size, it’s the price. In Tokyo you can rent a micro-condo for $300/month. Is it still bad? Or is it only bad because here they rent for about $1800/month? Why is the rent high here? Housing shortage.
Final May numbers:
Sales: 763 (down 2% from last May)
New lists: 1757 (up 30%)
Inventory: 3338 (up 52%)
that is perfect for a second vacation home to visit but not ideal for a primary residence even without kids if a couple both WFH.
I must be a “house person” because after 15 years of ownership I still really enjoy mowing the lawn!
Kids, pets and hobbies (atv, boats, cars, workshop, campers) plays a big factor in thr condo vs house ownership. Also newer and well cared for houses will need less maintenance. Shouldnt need to patch walls or fix roof within 4 years if a well maintained house was purchased.
As someone who recently sold my SFH and has now bought a nice concrete 1000sqft 2 bed 2 bath condo with a very small mortgage, I can say that for us the SFH was overrated. Yes, we got a great lift owning from 2020-2024 here and that’s paid for most of the new mortgage, which was one factor. However, as many here love and defend SFH as the be all end all, I don’t think most take the hidden costs into account of the interest, time (yours), and constant repairs and maintenance into account. We found very quickly that we were not “house” people, and the weekends spent fixing the roof, maintaining the yard, patching walls, fixing appliances etc, along with the other higher costs (utilities, property tax is $5k now), was more of a freedom reducer and quality of life reducer than anything. Having come from a similar but smaller condo before the house it was an easy decision for us.
Now we will have more free time to pursue our hobbies, more $$$ to do it, in a much more walkable area (less car dependence, gas, maintenance etc), will put more in our retirement accounts each month and spend way less time working on the house. I get that some people are “house” people, but I also think that some cannot see past the “need” to own a SFH and I believe many would be happier and better off financially and psychologically not weighting themselves down with a $600k+ anchor for 25 years and staying more liquid and having more time and freedom. That isn’t to say all people should own a condo at all, but I’m not sure people really price in what they are giving up to own a SFH in today’s day and age. Caveat of course if you bought before 2019-2018 etc because those people are living in a different world financially (and seem to have a really hard time understanding the situation for new buyers). I say this as someone who can comfortably afford that beginner SFH on my and my partner’s incomes.
I feel like I’ve finally seen the light. 🙂 Marko realized the same thing many years ago it seems.
Real life doesnt work like that sir.
Lmao, are you a construction expert now? Eventually you’ll get something right but not yet.
Does Gold River have a grocery store yet, or are residents still driving an hour and ten minutes one-way to Campbell River?
Will just ignore that 1h 15 min drive to Sooke to get your front door, each way 🙂
I am not trying to take aways anyone’s SFH. If you read and understood my comments all I do is complain about redtape when it comes to building SFHs, just recently I was complaining about soil sample testing which impacts SFHs affordability the most.
SFH soil sample testing 10 to 12k per SFH
100 unit apartment building soil sample testing 10 to 12k divided by 100 units.
Same with owner builder exam, etc. I’ve sent thousands and thousands of study guides to people across BC over the last 8 years and guess what owner builder exam = person building SFH.
All I am saying is let the market decide what people want. If we opened up the market and removed the red tape there would be a lot more options for everyone whether that be 400 sq.ft. or 4000 sq.ft.
aka some people want a compact car some people want an SUV
some people want to travel some don’t
etc.
and I like how everyone always 100% fails to address the obvious logistical issues. If every family has a SFH we are literally need to start clear cutting Happy Valley to Sooke and personally I am not an environmentalist but people have a meltdown when half a hill in Langford is cleared to make way for SFHs, not sure how a clear cut here to Sooke would sit with people.
Sure, it is possible to live in 400 square ft. especially if you are young or single, or a senior that has downsized or for that matter if you are middle aged and your spouse has divorced you and tossed you out of the family home. (when I rented at Vic West, surprising number of divorced guys in condos that where every second weekend dads.
I am a crusty old guy but in spite of that I think we have let the younger generation down. The question is whether we have made life better or at least as good for the next generation and the clear answer in my mind is that we have not. A young lower middle class couple should be able to afford to own a modest SFH and be able to comfortably have the space to raise three or four children. We were supposed to make life better for the next generation not worse, certainly we should not have created a situation were young couples cannot afford a small family of three or four ( someone is going to say that young people dont want three or four kids, perhaps not, but most cant afford it if they did want it).
Marko argument that people can be happy in 400 square feet is a little disingenuous. In that case lets take away Marko;s passport since people can be happy without travelling around the world, also lets take away his investment condos most of the world is happy without investment condos. Lots of people are happy without a car. Lets give Marko a 200 square foot condo. Lots of happy people live in that size.
At the moment we are spending millions to subsidize the building of rental apartments. Is this really the best that we can offer the next young generation. It is a hell of a lot less than even my dad had and he was a blue collar worker all his life.
Unfortunately, a 1200 sq. ft. condo would cost the same, if not more than a SFH. Plus you get the enjoyment of lugging your groceries long distances from your parking spot (if available), up an elevator (if available), down long hallways to your retreat. I have no desire to live that way. The convenience of parking a few feet from your door is simply too great. Not to mention the luxury of having more distance between neighbors. That’s the lifestyle I prefer. It makes me happy.
There are building lots on sewer and municipal water for $100,000 in Gold River
When you envision the typical Gordon Head home, the main floor is around 1,250 square feet. That’s about 45 feet wide and 28 feet deep. So 1,250 square feet for a three-bedroom condo would be quite nice. You lose about 100 square feet in the split stairway in a Gordon Head house. I don’t know how practical that layout would be for a condominium.
What really is important for a condo is the floor plan layout. The best candidates for a three-bedroom conversion are corner suites as they tend to be more square shaped. That’s where you will find some purpose built three-bedroom condos starting at around 900 square feet but the third bedroom or living room will be smaller than normal..
But definitely 1,250 square feet would be a very good size for a middle income family. Maybe even opulent.
The problem with most new three-bedroom condos is that they are still about the same size as a two-bedroom and the smaller room sizes makes them less desirable and harder to sell. Let’s face it, when you’re buying a condominium you’re buying square footage. A new 1,250 square foot condo is going to come at a high price.
An alternative is to make the condos two storeys with 600 square feet on each floor. Now that we can go to six storeys and wood frame for a complex that might change things up. This by the way is why developers prefer townhouses over condos. They are less expensive to build as you have interior wood stairways in the units and no longer require an elevator, common hallways, or concrete fire stair wells but you have to keep the number of storeys under three or four if one is below grade.
But town houses come at a cost too. A three storey townhouse has an interior stairway that gobbles up square footage. So when it comes to a 1,200 square feet one-level condo and a three-story 1,200 square foot townhouse, the condo has more useable space as there are no interior stairs.
I was just in Ontario a week or two ago, where I saw lots for $100,000. Oh to have some of those here.
While my house at 1,070 square feet used to be a three-bedroom, it’s much better suited to the two-bedroom, one large bath it became with a separate laundry room. You’d need to start at 1250 square feet and up for three bedrooms and two baths, or one and a half baths. I know you’re talking condos or apartments, but still. I know everything newer is smaller, but that must mean giving up rooms and cramming everything into common spaces like these tiny kitchen/ dining/ living room in a-row places you see now. I can’t see how they are liveable for families.
To get a good three-bedroom floor plan suitable for a middle income family you will need around 1,150 square feet and two bathrooms. There aren’t that many around that would fit a middle income family’s budget unless they purchased a two-bedroom in an older complex and converted it to a three-bedroom.
If you and Leo think we should be building more of everything, you both should be upset like Ron Butler (twitter) that in BC and Ontario we’re building way less SFH this year (2024) than last year.
Comparing housing starts in 2024 vs 2023 (period (Jan-April)
BC is down 27% SFH.
Vancouver is down 34% SFH
Victoria is down 27% SFH
In BC, now only a dismal 8% of all housing starts are SFH in BC. And the multi-units aren’t up as a result. They’re flat 2024 vs 2023.
So these are the dismal SFH numbers we get when we don’t control “what we build”. And of course when we subtract SFH tear downs, these net SFH numbers fall down further.
(See table 2) https://assets.cmhc-schl.gc.ca/sites/cmhc/professional/housing-markets-data-and-research/housing-data-tables/housing-market-data/monthly-housing-starts-construction-data-tables/2024/monthly-housing-starts-tables-2024-04-en.xlsx?rev=2872d4ee-575c-44e1-89c4-53830787ad10&_gl=1*yan6y0*_ga*NTg2OTYxNDQwLjE3MTczNjk3ODA.*_ga_CY7T7RT5C4*MTcxNzM2OTc4MC4xLjEuMTcxNzM2OTk2OS41MS4wLjA.*_gcl_au*OTI4Mzk5MTM1LjE3MTczNjk3ODA.
It’s much easier for middle income households to more to rural town BC where they can have a middle income house at a middle income household’s wages. Maybe one of the spouses can stay at home and raise the kids. No more overtime and working weekends to pay the bills.
Where you can still purchase this home for $267,000
https://youtu.be/U_XSV-IkGPA?si=s5q2iAFcUV_kq4Ua
In my opinion the biggest factor is cultural. The problem is the three bedroom condo wouldn’t sell well in my opinon. Below is a 112.1 m2 condo so 1,205 sq/ft. How do you force developers to build something if people don’t want it?
Vic West = $1.1 million +/- (buyer with means will buy SFH in Langford)
Langford = $750,000 (buyer with means will buy townhome in Langford)
I have a Wife, two kids, 1 dog, and 3 cats. And I did attend post secondary education at camosun collage.
+1, Leo has never said we shouldn’t build more SFHs, he just thinks (as do I) that we should build more of everything versus trying to engineer what we should build because some old crusty geezer thinks it it impossible to live in 400 sq.ft.
Leo posted a brilliant compact car anology on Twitter the other day which got me thinking.
My parents rent a portion of their home in Dalmatia every summer to a young family from Poland. They drive something like 1,200 km from Poland to Split, Croatia then take a ferry over to where my parents have a home. Two children plus a dog in a Mazda2 and when I received them last year they seemed pretty damn happy and went to the beach right after.
Would they be happier with two kids in a dog + their vacation crap in Mazda3, Mazda CX-30, Mazda CX-5, Mazda CX-7, Mazda CX-9? Yes, they probably would be. Would the correct response be to ban or restrict the sale of compact Mazda2s?
You are not a boomer but if you bought a SFH in Langford when you were 24 (?) you are in a similar financial position as a younger boomer (say 59-62 today) who also likely bought around when you did.
Instead of spending on higher education you worked and bought a house and the ROI was probably higher overall – one of the discouraging outcomes of outsized appreciation, but worked well financially for you to put you in square into current boomer position and outlook.
Your house should be paid off or almost paid off. You don’t need to rent out your suite and you also have a carriage house you don’t need to rent out. Your financial position and ability to have a 2600 square foot home to yourself and two unused suites are a direct result of a long time in market plus some DIY skills – but mostly an early start in the market. Someone who has owned for about 25 years now in Greater Victoria has essentially won the capital gains lottery.
I think the whole size of house debate is largely one of cultural and construction differences. I’ve raised kids in small spaces and it was fine and the kids (now adults) agree. However most people think they are not serving their family well doing this because of how they grew up here plus what is considered acceptable and a lack of good family noise-proofed condos.
Probably going to change over time.
My favourite part about Marko is that, not long ago, he bulldozed a small forest on a property in Central Saanich to build himself a mansion, then got tired of mansion-life and moved to a condo in Vic West, from which he spouts off about the negatives of bulldozing forests to build housing and that many of his clients buy and sell essentially because they are bored.
Leo is a lobbyist working for — pardon me, volunteering at — Homes for Living.
He’s a volunteer lobbyist!
Sorry to be picky but 50 year olds aren’t boomers. Also note that few boomers grew up in houses that big. Check out the post-war houses in your town.
Signed, a boomer. 🙂
But I’m not a boomer.
@Max ” I’m 50 and I hooked up with my girlfriend (now wife) when I was 17. I’ll tell you right now the only reason we have been together for so long is because we live in a 2600 sq/ft house.”
I don’t think I’ve ever said OK Boomer but that statement makes it hard not too.
Also the argument shouldn’t be about 400sqft shoe boxes vs SFH. So much is about missing middle density mixed use buildings that haven’t been built post World War II. I don’t think I’ve ever seen a four bedroom condo in Canada but in Germany there are several surrounding me. The deflationary pressure on SFH prices would be huge if these started getting built.
@ Patrick. The proper way to measure if creating denser developments in Vancouver did or did not have an effect on SFH would be to model the consequences of the densification not taking place.
He can turn you into a butterfly with the correct dna sequence.
Living with someone during the pandemic was better (I heard )in a larger home than in confined quarters.
Studies have shown that the happiest people on the planet are those that have never heard of Elon Musk.
WhateverIwant,
Great post! I agree 100%.
People that portray themselves as very happy and post pictures all over facebook and twitter about this happiness are in most cases the most miserable people on the planet – Elon Musk.
I suppose one could measure happiness by the turn over rate for small condos. If the turn over rate is higher for small condos than medium size suites then I would say people are less happier that live in small condos. If you are happiest living in a small condo – then why would you sell?
My opinion is that the majority of those that buy a small condo – will be selling within three years of their purchase.
People like their space. I’m 50 and I hooked up with my girlfriend (now wife) when I was 17. I’ll tell you right now the only reason we have been together for so long is because we live in a 2600 sq/ft house.
Yes let the market decide. A person can buy a building lot and build, within reason, the home they want. You can’t do that with condominiums. A buyer can only chose from what has been built.
To claim people are happy living in a 500 square foot condominium doesn’t address that they may be more happier living in a 1000 square foot condominium.
No one is saying BOSA is stupid. But that doesn’t mean they are looking at maximizing happiness for a prospective purchaser. They are maximizing profit which usually means building more condos in a limited building envelope space. Their profit incentive does not necessary coincide with that of maximizing happiness for prospective purchasers. I think we are doing a disservice to ourselves in thinking a developer knows what is best for us.
One can be mislead into believing that the public wants smaller condominiums by judging the sales during hot buyers markets. That comes at a high social cost during slow markets as the city is left with a legacy of small units for the next 100 years. Units that during slow markets no longer appeal to enough buyers or renters and the city has high rise towers with many empty units. Empty units where lenders have taken back properties as the owner was no longer paying the mortgages, strata fees or property taxes. That can kill the economy of a city as people leave the downtown due to high property taxes and high strata fees.
We got to our present circumstances because the buyers market has gone on for too long. We should had a couple of recessions in the last 25 years that would have brought land prices down and developers would not have to lobby the city for smaller and smaller units.
A vibrant city will have a mix of unit sizes that will a wide range of prospective buyers. But at this time we seem to be concentrating on small units and that might come back and bite us in the arse.
Or even one.
Marko, travel a bit further and you will families of six living in a cave who are happy. Since you brought it up, I never would have, how many kids do you have and do they all live with you all the time in your small condo or is this just you living in a condo alone most of the time? I only bring this up because you are constantly bringing up how you are happier without a house to look after and spending more time with your family. If you do actually have a wife and two to four children living together full time with you in a small condo in Vic West then hats off to you. You imply it without ever saying it and you have been doing it for a long while. So are you actually living it or are you just BS us..
It is not a matter of telling other people how to live, rather the question is whether we are providing the type of housing that allows young people the opportunity to have larger families if they chose to. Marko already knows that this is the issue but he is just spinning his narrative again.
The discussion is about housing for families. Let’s hear back from you when you have a few kids.
Leo is saying why are we trying to engineer what people live in? If you actually travel and bit and open your perspectives you’ll see that families of four live in 500 sq.ft. condos (and they are happy).
There is a market for everything and let the market decide. Not sure why others constantly have to impose what they want to live in on others? Personally I’ll take a condo over a mansion any day. I want to spend time with my family, outdoors, travelling etc., not wasting my time maintaining a huge home, but I am not pitching that we should ban SFHs in excess of 4,000 sq.ft., so not sure why someone living in a 4,000 sq.ft. is telling me 400 sq.ft. condos are bad.
This 405 sq.ft. studio at Dockside is renting -> https://rentatdocksidegreen.com/floorplans
Let the market decide. Guess what, Bosa isn’t stupid. If they can’t rent 405 sq.f.t studios at Dockside the next tower they will build all 1,200 sq.ft. three bedroom condos.
I completely appreciate Leo’s argument but he essentially functions as a lobbyist for the developers of highrises. Naturally he wants the focus to remain on highrises. Leo does provide valuable stats but I take his views on housing with a rather large grain of salt myself.
It’s with Ron Butler, a mortgage broker with 67,000 twitter followers. Ron’s an advocate for family housing, specifically for single family houses (SFH). So he wrote a twitter post pointing out the 40 year low in SFH permits in Canada. So far, so good, and no beef from anyone . https://twitter.com/ronmortgageguy/status/1795447994034131297
But then Ron followed this up by saying that “385 sq foot condos are an abomination”, and that’s when Leo took exception… https://twitter.com/LeoSpalteholz/status/1796731397740306826
My take is that tiny condos are like hotdogs and SFH are like steak. Leo figures if we make more hotdogs (condos) the price of steak (SFH) will go down. Or at least family (SFH , townhouse) affordability will be better relative to what it would be if we don’t densify.
Leo’s position is reasonable, but I don’t happen to agree as the historical data doesn’t show densification leading to this outcome. It sure didn’t happen in Vancouver over the last 40 years. Vancouver had among the largest increases in density of any major North American city, yet is left with about the highest SFH prices. Same is happening here in Victoria IMO, and it’ll be happening much faster now that SFH-only zoning is gone, and SFH starts are crashing to 40 year lows.
Stuff is still selling well , market isn’t showing any stress . I’m sure banks will continue to work with mortgage holders . It’s a big week for the boc , just three more sleeps
Lots of recreational properties have been owned for decades. Owners are usually well heeled and are able to afford the expenses of a secondary property. Don’t expect any bargains, they rarely change hands.
Hey Leo, just enjoying a rainy getaway up island and thinking about recreational property. With all the talk of interest rates and mortgage renewals/potential for defaults, wouldn’t we see stressed owners unloading recreational property first? Have you looked into this at all? Thanks.
Introvert, since I avoid twitter, what sort of “beefs” is Leo getting into?
It would be helpful. at this point, to have separate reporting for SFH and condos. In some ways, these markets are perhaps, while interconnected on one level, are becoming more detached from each other (pun maybe intended).
Never thought I’d see it but Leo’s actually getting into beefs with people on Twitter.
I have seen a few houses left on the market for more than 50 days, or relist after delist.
My realtor said that the inventory is mostly condos and townhouses. There is still a shortage of SFHs.
Sales seem reasonably strong but this is balanced against more inventory.
I am seeing closer to 785 but will find out Monday.
I understand the beauty of Vancouver Island. My Grandfather was a GC and he would bid tenders for the Provincial Government. At the age of ten I would work for him all summer long. We would be building outhouses, trail networks, ranger stations, forestry gates in remote locations for BC parks in locations such as Carmona valley, Mount Arrowsmith, Mount Albert Edward.
He also built and maintained a number or lighthouses. He would drag a barge to the remote Island with all the aggregate, type 10 cement, lumber, food and that was home for two months. He also built the original lodge, formed and placed all the concrete for both the original blue and green chair lifts at Mount Washington. This man was not scared of hard work.
He paid very well. I knew if I just sucked it up I’d be coming home with a stack of cash just in time for the new school year. He taught me a thing or two on how to get shit done. Quit whining, fall in line, focus. At that time I was the cleanup boy, food prep, and dish pig.
RIP Grandpa.
Preview of May numbers (estimate based on last Monday + the week’s activity). Subject to change.
Sales:
Sales: 770 (down 1% over last May)
New lists: 1754 (up 29%)
Inventory: 3317 (up 52%)
What people think there home is like in Victoria
https://vimeo.com/918471033/52e3c2c476?share=copy
But this is what they actually live in.
https://youtu.be/q0wrPIFAJtg?si=s0rhS3A8_4VZ5cLb
Depends on the car and the chauffeur Max.
Well, that would suck if you bought that dream house up in north cowichan at 1.68% and now have to commute to James Bay every weekday again.
More information is starting to trickle out about the effects on housing prices due to remote-work. Remote-work meant that you could write off some of your housing costs and pay more for a home while not renting out the basement suite.
And that contributed to higher home prices and higher rents. Our streets got busier because more people at home meant they could go out at any time of the day and more often to do errands.
Now companies and the government want people back in the offices. Whether that will reverse the trend is debatable. But a few people that are to go back to their office full time are considering once again renting out their basement suite as they will once again need the money.
I think market appreciation is going to take the back seat for awhile when it comes to condos. Mortgage paydown will likely be the only differential factor between renting a condo and owning a condo.
I’m not sure about this – unprecedented pandemic stimulus, decades of underbuilding, increased remote-work, and supply chain issues all point to massive spike in demand compared to supply. The pandemic didn’t cause the recession one might have expected to avoid the need to hike rates. Overall, those factors all seem to point to inflation hitting pretty hard.
Not to mention additional greedflation to make up for lost profits during the pandemic years for various industries
The newer apartments and condominiums do look alike. You can’t tell by looking at them which is which. And like a lease car you can trade up to a new apartment when you want at little cost. As long as you make the rent payments you have secure tenancy.
You’re just not building equity through market appreciation and mortgage paydown. But that’s not important to some people.
If you bought a downtown condo in the last few years and financed to the nipples, you could now have a mortgage that is greater than what you would net on selling. So you are stuck there until things turn around. In that way I can see more people opting to rent than to buy as there is more freedom to move or to take advantage of a promotion in another city. You also didn’t have to put a whack of life savings down to get the same living style. That cash can be earning money some place else rather than gathering mold in some bank vault.
The con in the past with renting a condo is that you didn’t have security of tenancy. You were at the mercy of a landlord that just blew all their money at the casino and now has to sell.
Dusting off the crystal ball, you might see people renting condos for less due to the lack of security in tenancy. Let’s face it we are entering into a new paradigm as we haven’t had the option of new apartment buildings for a very long time.
As these apartments age, they will get less costly relative to a new building or face a higher vacancy rate. In 10 or 20 years from now we might be in a different mind set for ownership.
To me condos are apartments. Since condos have pretty much plateaued and that’s probably going to stick. Maybe renting is the way to go for condo/apartment living. You would be liquid and mobile. Not a care in the world.
Not every condo owner carries the same mortgage. Some do not have mortgages at all. If a condo is losing money at today’s interest rates the owner has the option of selling.
There will be exceptions but they will be on a one by one basis. For example if the mortgage is in excess of the market value and the rents are well below economic. As I said, I could see myself agreeing with a 23 percent increase in rents in some hardship cases. But they would be the exception and not the rule.
Over the last several years we have seen a hyper inflation in rents and expenses. Rent controls have contributed to this problem but so has the efficacy of management by the landlord. I would be less inclined to approve an increase if it were due to shitty decisions made by a landlord. Sometimes the herd of amateur landlords has to be culled.
Fair enough, I didn’t really consider the write off part.
My apologies.
No the owner of a purpose built apartment building wouldn’t be stupid to not do so. Because they can only deduct actual expenses on their taxes. Otherwise they are reducing their net operating income which is used by lenders to determine the amount for financing.
Apartment buildings don’t need to build a reserve because they can finance any repairs and deduct that as an expense on their personal or corporate taxes. Condominium buildings need to build a reserve because they can not finance repairs in the same manner.
I’m calling bullshit on that. They do so. They would be stupid not to.
You have to show a loss to be eligible for this criteria. In this judgment the owners were still losing 10k a year even with the approved increase. This will only really apply in the case where there is a combo of under market rent and increased mortgage or capital expenditures. If rates come down, which they are unlikely to do to the past historic lows, you are still limited by market rents. This is the overall equalizing factor.
For an apartment building, actual expenses for maintenance for the upkeep of the property are factored into the rents. But not an allowance for future anticipated expenses. That can add several hundred dollars a month to the strata fees for a condominium to build up a reserve for replacement of a roof or elevator 15 years from now.
The money a condo owner pays into that reserve for future expenses is not refunded to the condominium owner when they sell their unit.
If a condominium complex could finance for a new elevator or roof as needed that would have been an improvement over a reserve. In that way they could amortize the costs over 25 years and add that smaller amortized cost to the monthly strata fee. But the Barrett Commission didn’t think so.
Because Dave Barrett was a fu^&ing idiot.
I know they don’t have strata fees. They have maintenance fees priced into the rent. They have elevators, roofs, grounds keepers, common area cleaners too.
Purpose built rentals do not have strata fees. Because they are not stratas. They also have lower expenses as they don’t have to build a reserve for replacements that condominium owners have to pay into and don’t get refunded to the condo owner when they sell.
A purpose build apartment pays for replacements such as a roof as needed which can be financed over 25 years. A condominium building can not finance for needed repairs in the same manner. They pay for the repairs from the reserve and with Special Assessments.
Purpose built rental buildings have maintenance fees (strata fees) along with property tax per unit priced into the rent. Another reason rent is so high. Landlords at the very least should be allowed to raise the rent in tandem with the rising costs associated.
If you go down the slippery slope of tying rent increases to higher interest rates what would you do if the interest rates came down? Or if one landlord doesn’t have a mortgage? It would be easier to relate rent increases to strata expenses which would be universal across all rentals.
I’ll give you an example of strata fees from a developer compared to a three year old condominium with a strata council in-place.
The strata fees provided to a buyer on a new condominium on Richardson are $169 a month. While the strata fees for a three year old condominium with a track record of expenses and a strata council in-place for a three year old condominium of a similar size on Courtney is $334 a month. That’s almost a 100 percent increase.
Right, but I wonder how many have tried going this route. Could become a flood and I haven’t seen it hit the news yet so imagine it hasn’t happened a lot.
Depending on the building, If I were on the board I might find myself agreeing with the 23 percent increase.
If the building is new or near new, the strata fees in the first year or two are best guesses by the developer and usually do not include a property management fee or allowances for some items such as a Depreciation Reports, which in my opinion are overly costly for a new building. For a one or two year old building these reports are just boiler plate reports and I don’t think they are necessary in the first five years.
Consequently, the strata fee expenses in the developers pro forma are very under stated which could mislead a prospective purchaser/amateur landlord with the intention of renting the condominium. I would consider that new condominiums should be exempt from the rental increase restriction for the first couple of years. That wouldn’t include purpose built apartments such as Bosa’s building as they are professionally managed and the management team would have a good knowledge of future costs and as it is an apartment building that do not have to have Depreciation Reports performed as well as the property tax rate on apartments is lower that the tax rate on individual condominiums.
The government hasn’t considered this in their proposals to lower costs for new condominiums to be used for rentals. They have not considered the ongoing expenses for new buildings which are a leading cause of high rental rates. Their attention has been completely orientated to reducing construction costs and not ongoing expenses for new builds.
While it is true that these costs are deductible expenses, they are still expenses that have to be paid. You first have to earn the rental income to deduct the expenses.
Yes
The RTB decision seems reasonable to me. Probably a case in which rents were substantially below market.
The RTB policy on this specifically states that landlords can apply for the increase if the landlord is facing a financial loss as a result of unforeseeable financing costs.
Rates moving up as quickly as they did was not reasonably foreseeable, contrary to past BOC statements, and means that many landlords on variable rates are operating a significant loss with under market rents. If they can’t raise rates many will consider selling which impacts tenants.
It’s an RTB decision. Or you mean govt is going to step in to stop it? I doubt it. Above-rate rent increase asks have always been allowed
Sounds like this will get shut down
Not sure if already posted but thought this was surprising. Landlord got permission to raise rent by 23% citing increased costs from higher mortgage rate https://x.com/JasonBugra/status/1796290204346802377
It seems to me that the Custom house condos are not exactly flying off the shelf.
I may be mistaken but was there not an Ontario case that stated that annual rent for the purpose of increases under rent control was the actual rent paid over the previous twelve months. In effect there was no one month of free rent but the rent was calculated on the eleven months of payments divided by twelve. Wonder what BC would hold on this issue?
I can’t see individual owners leaving homes vacant for an extended period? As far as developers I have two pre-sales purchaser clients in Royal Bay right now from Gablecraft and both are a 9-month wait and the homes are behind schedule. There is simply too much redtape/not enough labour/etc., for any developer to be sitting on huge amounts of completed unsold inventory. If Gable Craft or Westhills saw pre-sales slow down they would just pull-back on construction starts. I would say more than 95% of homes ever sold in Royal Bay were pre-sales purchases, for example. They’ve sold the occassional completed showhome.
(Also the deposits on pre-sales are pretty fat these days so you won’t see buyers walking away).
Sure, I could see a price adjustment but I don’t see piles of inventory out there to create a situation where there are vacant properties sitting.
Rental market even with the Airbnb ban and everything else hanging in there. Bosa has rented 55% of their renntal tower in Vic West and a 400 sq/ft studio without parking is going for $2,065 which seems nuts but I see crap filling up the balconies so people are moving in (that being said they are offering one month free, but still, rent is insane). On a side note, the one month free rent is a good way to get around max rent increase every year.
A bedroom came up in my parents’ suite in the Oaklands area and I thought it would be slow. Listed in on Facebook marketplace Monday for $900/month, 7 people came to take a look at it Wednesday evening, 6 people wanted it and 4 were really solid candidates. That is $1,800 for a 700 sq/ft basement suite in an 1950s house. Could probably fetch $2,000.
We are a long way from vacant homes. As patriotz points out this isn’t Detroit.
Nope Patriotz. That’s not what fair means. If you kick someone in the balls that’s not a fair fight. You might want to call it fair because it favors you – but it’s not fair. Fair describes something as being free of bias or injustice which your examples are not.
yah, for what it’s worth, I enjoy westshore living, I’m in colwood and have been for over a decade.
But if I had an extra mil+ burning a hole in my pocket and needing to be spent on real estate I’d be selling my 4b cookie cutter in colwood and buy in broadmead.
What is fair? If I’m a seller and I think I’m entitled to a higher price, or if I’m a buyer and I think I’m entitled to to lower price, I might consider the price unfair. But if nobody is willing pay more than to me if I’m selling, or if nobody is willing to accept less from me if I’m buying, are they being unfair to me? That’s the reason the property sold for what it did.
Just find a beach house selling at 200K lower than its purchased price in Feb. 2024, what happened?
Roger, there are more homes built on speculation in Langford than any other district so it is only natural than Langford will have a higher percentage of vacant new homes for sale. The majority of new homes built in the Victoria core are built with a contract not speculation.
A contractor is taking a larger risk to build a home on speculation of a future sale in Victoria as most new homes will be priced in the upper income bracket where there are far fewer prospective purchasers.
For example 1749 Fairfield priced at 2.7 million for a 3,623 square feet home. A similar house on Spirit Court in Langford is priced at 1.8 million. There is about a $300,000 difference in land values between the two neighborhoods. You are paying more for similar house to build in Victoria than in Langford because a builder has more costs to prepare a site and that they can charge a higher profit for the risk of building in the core where there is less competition.
In my opinion, you are getting more value for your money buying a spec home in Langford than in Victoria, where there are more builders competing for your dollar. In Victoria you will end up with a new home surrounded by a lot of junk. In Langford all of the homes in the neighborhood will be new and like yours in quality of finish.
Everything will sell or rent at a price. But not necessarily at a fair price to both buyer and seller.
I recall an elderly lady who under sold her home to a nice contractor that went to her church. The property sold at a price, just not a fair price.
Don’t confuse inability with unwillingness. Everything will sell or rent at a price. This isn’t Detroit nor is it going to be.
Rodger, that’s an interesting scenario. What if a city ends up with a lot of vacant new homes or partially completed homes that are not selling? This is what happens during housing recessions. Incomplete subdivisions of half built homes and excavated downtown pits.
The Free Market solves this over capacity by selling these properties under foreclosure at a price that a new builder can complete the project and make a profit. But this takes a long time when we need more market and rental housing.
Is there a way to incentivize contractors to turn them into rentals and complete them? Should the government step in and offer low interest rates loans or even pay down some of the contractors debts so that the buildings can be completed? Should the government take an equity position in these buildings?
I don’t think any government agency has contemplated this scenario. If we have a housing recession this is going to happen.
Been calling it starting with the 1% hike in 2022.
Inability to sell or rent even after many reduction in prices. Vacant new homes as a fraction all vacant homes in Langford will keep inching up.
VicRE now “calls it”
July for first cut, one more month of inflation data to use as an excuse that inflation has seen a clear downward trend towards 2% should we get a dead cat bounce again.
How’s the house hunting going “umm really”?
Everyone working themselves up for a rate cut except for the BoC. Imagine the disappointment if it doesn’t happen next week. Something like “BoC, how could you? Didn’t you see the percentage chances that were thrown out there? Lol… It is quite the impressive lobby. And bonds, bonds, bonds, still pretty strong if you don’t look at one day moves…
Who is the poster here with the “bonds, bonds bonds….” comments?
Where is that indicator pointing to for next week’s BoC meeting?
Hmmm……
Guess we’ll see what actually happens when it happens.
Canada GDP growth lower than expected. In response, implied odds of 25bps June rate cut rose to 80%
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-money-market-bets-for-boc-rate-cut-next-week-spike-to-over-80-after/
“Implied probabilities in swap markets imply just over an 80% chance of a quarter-point rate cut at the June 5 Bank of Canada policy meeting, up from about 66% odds prior to the 830 a.m. ET data. Those odds were only at about 60% earlier this week. Bond yields immediately fell after the data, with the Canada five-year government bond yield declining about 10 basis points.
The Canadian economy expanded at an annualized rate of 1.7% in the first quarter and real gross domestic product likely rose 0.3% on a monthly basis in April, data showed on Friday. The quarterly growth rate was slower than the 2.2% pace forecast by analysts in a Reuters poll, as well as the Bank of Canada’s (BoC’s) 2.8% forecast. Fourth-quarter GDP growth was revised to an annualized rate of 0.1% from 1.0% reported initially.”
The number of downtown Freehold Strata condominiums has remained stable at around 203 listings for most of May. The median asking price is $599,900.
Number of sales over the last 30 days is 33 which is about six months of inventory with the median sale price at $530,000. Pretty close to last year maybe a tad lower.
The volume of sales are down and listings are up, but prices for downtown condos would be considered stable to slightly decreasing.
Peak downtown condo sales were in June of 2023, 2022 and 2019
There are a little over 100 downtown condos for rent at an average rental rate of $2,279
A tiny bachelor can be found at $1,275 a month but $1500 for 400 square feet is more typical. Another $300 to $400 a month will get a one-bedroom. Two-bedrooms are centered around $2,925 per month or about $3 a square foot which is a bit pricey.
In general for rentals within an eight kilometer radius of the DBC there is a good selection still available at the end of May with about 430 rental listings
No, but he lives 10 doors down on my road, is very well respected, and wants his office back.
There are always vacant homes for sell in any market. The main reason is that they are homes built on speculation of finding a buyer rather than homes built with a contract in-place.
For the used housing market it could be that the seller has bought somewhere else and has not yet sold their original home, an estate, or a conduct of sale.
Of the 462 houses for sale in the Westshore about 68 are vacant. 22 are new homes and 46 are pre owned houses
Similar in the Victoria Core where there are 519 houses for sale and 74 are vacant of which 17 are new and 57 are pre-owned houses.
The Victoria Core and Westshore are substitute markets with cross elasticity of demand. If market prices in the Westshore go down that will have an effect of lowering prices in the core and vice versa.
That’s why it’s called a “marketplace”
Why will the new homes be vacant?
No. It’s the supply: relaxed rules for zoning, cheap land, fast turnaround for permits, etc. I think Langford is overbuilt, and pretty soon, there will be a large number of vacant new homes. This will happen even with the prices dropping at a higher rate in Langford relative to the core.
53 Celsius in India, expect more people moving to chilly Canada.
It seems that there has been a substantial increase in the number of Canadians moving to the US. I guess that helps withe housing situation but I wonder how many are health care workers.
That is such BS. A letter is not a contract. I could tell the greatest sob story of all time and then immediately flip the property to a developer for $1 – totally legal. If the idea of their property going to a developer is so intolerable then don’t sell it. I would write the letter but it would be a complete fabrication.
That’s a shame. There should be some common sense applied. For example, if you want to cut down an oak tree, you should need to plant 3 oak trees somewhere else.
Well no power in oak bay at the moment , I had to drink instant coffee
No
Stewie? Is that you?
Will the new zoning bylaws relax the protection to oak trees?
LMAO…… what kind of wealthy people distinguish weekends and stat holidays from other days?
Them swamp people in Ozark had an insane amount of wealth too, Max.
What if we were to call it South Royal Bay?
As much as I like Royal Bay for what it is, it isn’t South Oak Bay.
They stay at the Oak Bay beach hotel on the weekends and stats.
Don’t judge a book by its cover. Just because we live in the westshore doesn’t mean we all live in happy valley or westhills or kettle creek. Because most of us don’t.
So much wealth that they are buying up row houses and condos? I think we have a different definition of wealth..
☮
I think that statement is a fallacy. Look to Metchosin. Its untouched. Now that Langford and Royal bay have turned into these super satellite cities. Metchosin with its acreages and its government that is totally opposed of any development (their idea of a small lot is 1/2 acre) has become a very nice place to live. All the amenities you could possibly ask for… Just a short drive down the winding road of nothingness.
Not only that. We are the hub of the south island with direct access to highway 14 to sooke and port renfrew, highway 1 to the north island, highway 1 south to both downtown victoria, and the peninsula via mckenzie ave.
We are the heart of the crd!
Interesting take. Most people with a little bit of money living in the westshore will try to get into Oakbay, Broadmead etc. Can’t say the same the other way around.
cheap available land is what comes to mind.
Because it’s cheap.
Why do you think the flag ship slegg lumber, the flag ship thifty foods, home depot, tesla, costco, rona, superstore, walmart, princess auto, sysco, and starlight stadium is out in the westshore? its because they understand demographics. They understand this is the place to be…Unlike you!
That statement couldn’t be any further from the truth. why do you think they are building out all these business parks and retail spaces in Langford right now? Its because of demand. They are sick and tired of what Victoria has become and they are moving to the westshore as a result. They are sick and tired of the defecation and urination at their store front, the bullying of potential customers, the tents, the addiction and mental issues that plagues the city…They’ve had enough.
Row houses and condos are going up like wild fire in the westshore…Even SFH. Why? Because of the demand!
It won’t be long before its the Victoria crawl heading into Langford to go to work.
Its the great exodus.
Thanks I didn’t realize the template change and the back-up has to go unconditional before the clock starts, that really sucks for whoever is submitting the backup.
Economic and financial well-being is the end goal, maintaining low and stable inflation is the means to achieve this. They are not two distinct goals.
https://www.bankofcanada.ca/2021/12/joint-statement-of-the-government-of-canada-and-the-bank-of-canada-on-the-renewal-of-the-monetary-policy-framework/
Setting themselves up for a human rights complaint if someone else gets the sale IMHO.
What an awesome use of city resources -> https://www.reddit.com/r/VictoriaBC/comments/1d3f7bk/fernwoodhaultain_being_redone_again/
Ya, it was dumb. Initially they were holding off offers until Saturday night to be after the open house. A bully offer came in with a cut off to accept at the open house time and then they reached out to people that were interested with a time to have offers to be in by based on the bully offer. I guess the bully came with a letter, because it posted as pending later the following week.
Not sure if by sunset clause you mean time clause?
For buyers I recommend 72 hrs
For sellers I recommend 24 hrs.
The crap thing about subject to offers is the lawyers changed all our forms about 3-4 years ago. Before the change you could give the time clause notice to the 1st buyer with an accepted offer with a 2nd buyer, now with the new wording the accepted offer from the 2nd offer has to go unconditional before you can give notice to 1st buyer. You can change the forms, but then everyone just gets confused.
(fyi, if you want to get really complicated if the 2nd buyer makes an unconditional offer you have to wait for the rescission period to pass before you can give the 1st offer the time clause notice).
The problem with that is in a slow market you are asking a buyer (who has other options) to figure out their financing, inspection, etc., remove their subjects and then be in limbo for 24 to 72 hrs while they await the 1st offer to decide if they will remove their subject to, or not.
or you are asking an unconditional 2nd offer to wait 3 or 5 days (if weekend involved) before the 24 to 72 hrs notice can be given to 1st offer.
(There are strategies I use such as offering to pay for the cost of the inspection to the 2nd buyer if the 1st buyer ends up actually removing their subject to condition, etc., but still not Ideal.)
***1st buyer doesn’t actually have to sell their home to remove the condition, they can remove it without a sale.
Therefore, unless the subject to has a really good chance at selling it isn’t wise to accept one as a seller. You hinder a sale to a subsequent party.
How long of a sunset clause do you recommend to your subject of sale buyers?
lol seriously? 1k per year discount for the tenant
Neighborhood trumps everything else, stay away from the westshore.
That it the dumbest thing I’ve ever heard of. Why didn’t they just place a covenant against the title of the property that is can never be developed? Ohh wait, that would devalue it 🙂
Not to mention a myriad of other arguments. You buy it, get divorced in 10 months and it goes up for sale again and it is out of their control who you sell for.
Description of our family, knowing that we would look after the property and ensure it doesn’t go for development.
I’ve never seen or heard of this in my career.
What did they want in the letter?
Fair enough. One last thing I’ll add is if subject to sale offers are the only option one is comfortable with really need to have the photos/floorplans/etc., done and ready to go so your agent can send a link to such along with your offer and note if offer accepted your home can hit the market in 24 hrs.
Here is a subject to sale offer and will list our house in 10 days is a no go for the vast majority of sellers.
I had such an offer on a listing last week and our reply was just come back in 10 days, why would we make the sellers’ property more difficult to sell to another buyer while we wait 10 days for you to sort your crap out.
Ugh… Almost put in an offer a couple of weeks ago, but the sellers demanded all offers come with a letter. We decided not to offer. Hopefully, letter thing gets banned here like it has been in a few states in the US as a discriminatory practice.
“I’ve had a couple of clients that started the process of upgrading with me and then just ended up renovating their existing homes. Can’t blame them, transaction fees alone get you started on a solid renovation.”
Yeah, we’re after a better neighbourhood so a reno won’t do it. At the moment I’m thinking that more mortgage at a variable rate might make sense given the likelihood that rates will come down. And of course the possibility that prices will go up once they do.
I think part of the reason sales are slow. Who wants to add on more mortgage at higher interest rates? A lot of people thinking about upgrading I think are staying put. I’ve had a couple of clients that started the process of upgrading with me and then just ended up renovating their existing homes. Can’t blame them, transaction fees alone get you started on a solid renovation.
6 in all of history, sounds about right (even thought we will probably have 10+ HHVers chime in they got their house because of a letter). All things equal I’ve actually never seen it work and by equal I mean the entire offer, not just the purchase price. What do I mean by that…two offers, $1,025,000 unconditional WITH letter. $1,050,000 conditional without letter.
Listing agent calls buyers’ agent and says congrats “my clients loved your letter and wanted to sell to a family so they took less money from your clients,” aka sellers didn’t want to risk it with the conditional offer.
The closests I’ve seen to “all things equal” someone take less money, but wasn’t really all things equal is I saw a seller once take 12k less, but the 12k buyer was her tenants of 12 years and they were great tenants for those 12 years.
(she took it to market, got a bunch of offers and then gave it to tenants for a bit less).
That’s funny! My current buying realtor keeps suggesting we write a letter to attach to our offers. We have 2.2 kids and a dog, actually. My wife is sure this is a winning idea too. I’m positive it’s one of those things that people thinks is a good idea but in reality has only worked like 6 times in all of history.
I appreciate your opinion.
Our incomes have grown considerably since we bought our current house so we can take on more mortgage. But I wonder if this seems like a particularly bad time to add, say, $600,000 to a mortgage that would otherwise be paid off in 10 years? Rates are high but prices also aren’t up much…
Agreed, if you can.
Banks will typically work with you if you have an unconditional offer in place to sell your price, but it isn’t completing before your purchase; however, the bridge isn’t cheap.
Thanks so much, Marko! All of this is very good reason to buy your forever home right off the bat if at all possible. We thought that we did that, but… a decade in a we’re maybe ready for something else. It doesn’t sound like a move will be easy, though.
One question: If we were to go with option one and the timing didn’t work out, do banks normally finance that kind of thing to bridge the gap? I’m guessing it wouldn’t be cheap but probably a total disaster could be averted. Our current home would, I think, sell relatively quickly because it’s on the lower end of the market and move-in ready but I realize you never know.
First of all, a large number of buyers have enough financial resources to buy another a house and then they figure out the sale, or they just rent it out. A lot of people in this category are business owners so kind of get the concept that if they want an attractive property or a propety at the best possible price subject to sale offers aren’t ideal.
Then for those who don’t have the financial means you basically have three options.
i/ Buy first with a long completion and sell second and hope it completes before the purchase. Might be okay in a blistering market, but extremely high risk in a market like we are in currently. Therefore, would not recommend.
ii/ Sell first with a long completion, buy second. Not the worst strategy in a market with high inventory as it is difficult to sell, but once you do sell there should be decent inventory to find something from and worse case scenario you rent. Keep in mind if you sell with a four month completion you don’t have four months to look for a home, you realistically have 2 to 2.5 months as the property you are going to be looking to purchase will need time for completion/possession. Also might be difficult to dictate a four month completion if buyers have the advantage. If you can’t find something you rent until you buy.
That being as you noted people don’t like the idea of renting inbetween. Problem is you have people with financial resources (first paragraph) and you have people that are okay putting all their stuff into storage and renting, or first time buyres, or etc., and those buyers will be a in position to buy an attractive property or to buy something at an attractive purchase price. Reality is if a seller has something attractive to sell or is clearing it out at below market value your subject to sale offer is simply shredded.
iii/ Subject to sale offers….I’ve seen hundreds of these in my career from both sides. A lot of my sellers simply don’t want to work with them and the ones that reluctantly do because we have no interest otherwise come into the negotiation from a perspective of….”okay I guess will give it a chance, but we want full asking price.”
Perspective is super interesting, often my buyers are confused as to why sellers won’t accept their subject to, but then when they become sellers they change their tune….”yea, no thanks.”
I’ve made lots of video on these topics over the years. I made this one recently -> https://www.youtube.com/watch?v=NyJlTTzg2IM
and see comment below someone left last week.
I am a big fan of lowball unconditional offers in slow markets open for multiple days (vast majority of buyers >95%+ too inpatient, emotional, or not in a position to execute such strategy). When I personally make offers I’ll go unconditional open for 5 days and if you can get a better offer, fill your boots, but as the days go by with no offers the sellers start thinking about it.
Marko: What, in your experience, is the most typical way for current Victoria home owners to go about moving up to another house? Put their house on the market and then buy whatever is available once it sells, or… (I don’t get the sense that in Victoria many offers are accepted that are contingent on the sale of another home so I’m wondering how to go about it all without ending up in a home that I don’t particularly like or having to rent while waiting for a desirable home to materialize.)
Received an offer last night on one of my listings and the buyers attached a letter; pretty standard, photos of the buyers plus their 2.2 children and a dog. Only problem is they forgot to remove the [insert address} from the attached letter/PDF in the opening paragraph. That’s odd, guess every home they offer on is their dream forever home 🙂
Unlike The Fed, BoC has a single mandate of stable inflation (target of 2% and a range of 1-3%), which ensures a stable currency and financial system. The Fed’s mandate has been revised a few decades ago to incorporate economic growth and unemployment factors, but not the BoC’s.
Tomorrow’s US PCE inflation is likely to surprise to the upside and The Fed is likely to pause for another few months. This will make the BoC more cautious as well. After next week’s meeting, T-Mack is likely to say inflation is going down to reach the target but the progress is uneven and slow. We need to see this progress for longer. Let’s wait and see.
The BOC clearly state their role, and it’s more than inflation. Inflation target is main role (and sole mandate), but when inflation is in target range, they use rates to target other areas of the economy, like GDP,/employment etc. And I expect you realize when they make their upcoming decision on rates, it will be based on many economic factors, such as inflation, gdp, unemployment, F/X rates etc.
https://www.bankofcanada.ca/about/
“ Our [BOC] main role is “to promote the economic and financial welfare of Canada,” as defined in the Bank of Canada Act. We still exist “to regulate credit and currency in the best interests of the economic life of the nation.”“
Next msg
seen at quite a few inquiries in a day looking for private money… builders, developers, and landlords… lots of them are paying 9-14% on 1st mortgages, prime locations, too.
however, the price is not going down any time soon per Globe and Mail today.
LMAO, you may have to change your name from Thurston to Thirsty soon…;)
You can certainly complain about supply management, but supply managed food products comprise a fraction of food costs and a smaller faction still of CPI. It’s the internationally priced food products that have seen the big increases due to the Ukraine conflict and other factors.
Supply management persists because of the rural vote, and I don’t need to remind anyone where the lion’s share of the rural vote goes.
The BoC’s mandate is to target inflation. Those conditions you noted are disinflationary, but the BoC does not need to see or anticipate them if it sees inflation falling.
https://househuntvictoria.ca/2024/05/27/victoria-bucks-the-population-trend/#comment-115894
I disagree – I think inflation can be dealt with 2 ways. Demand reduction and/or supply increases. Bragging about successfully reducing demand is not something you should be bragging about and the last thing you should do after trying to increase supply to lower prices.
They could have gone to every single production cartel in Canada and removed the quotas with the stroke of a pen. Instead we see farmers dumping milk down the drain. They didn’t do that because for some reason they felt that a lower standard of living for Canadians was the better alternative.
Making choices that explicitly make the lives of Canadians worse is nothing to brag about but Chrystia is so incompetent, I doubt she even understands that.
From Leo’s chart above we see 4,300 vancouverites arriving to Victoria per year. That’s about 2,000 households, all requiring housing. Many of these are cash-rich from selling Vancouver RE, and are looking for high-end condos or SFH. Thats 6 households per day, mostly gentrifying Victoria by buying or renting here.
I’m hoping interest rates go up, getting out of real estate.
The typical conditions that make the BOC lower rates are a falling GDP (recession) or increasing unemployment. These are bad news and not something for the minister of finance to be trying to create. She should be trying to create conditions that improve productivity and grow the GDP/economy.
Unfortunately, because of how this story was reported about Freeland saying the time to cut has arrived, the BOC may well decide it “has to” hold off another round just to prove that independence
People in Victoria don’t have too much money, more likely they had too much access to cheap credit. They still do. A hundred grand still costs around $625 a month which is next to nothing. The problem is that people leveraged many, many hundreds of thousands to buy a home and others used their home lines of credit to buy expensive toys and holidays.
Now they have a debt that will take a long time to pay off or may never be paid off before they reach retirement.
That’s bad for an economy when so much wealth is locked up in real estate when it should be used to create businesses and employment.
I saw my first property under a Order for Conduct of Sale this year. It’s not advertised as a court ordered sale and it is aggressively listed for over five million. If you have five or six million, it’s a good deal. But there aren’t that many buyers in this price range. It’s a gorgeous property but should be in a higher market such as San Diego. It’s over built for the Victoria market. Too classy for the typical Vancouver Island bumpkins.
That’s not what she said. What she actually said is also what the Conservatives and politicians south of the border and elsewhere have been saying, i.e. that correct government policies will enable interest rate cuts. Of course they don’t all agree on what the correct policies are.
The right time to help them try to turn their poll numbers around? I do recall this government saying how it was inappropriate it was for parties and others to try to lobby and influence institutions like the BoC. I guess we get to see how independent it is during the first week of June.
Okay, so the problem is everyone in Victoria just has way too much money?
This is not meant as a defence of the LIberals, but inflation is the result of too much demand, i.e. too much money going after not enough things to buy, and to fight inflation demand must be reduced, i.e. by reducing the amount of money available to spend. In particular, low interest rates are the primary enabler of housing price inflation.
Take it from Milton Friedman:
https://househuntvictoria.ca/2024/05/27/victoria-bucks-the-population-trend/#comment-115892
I don’t know how anyone can vote for any federal liberal after the last 9 years of empirically observable incompetence on every measurable dimension.
So while perhaps inflation is moderating, I would suggest that it is more the result of the observable and massive decline in GDP per capita Canada has been experiencing, decline in living standards compared to our southern neighbor and world record breaking house hold debt loads that are dragging on peoples ability to pay higher prices and not anything those liberals have done on purpose to any particular end.
I mean how could it? The only thing they could possibly even brag about ethically is implementing policy that increased production and lowers prices by enabling increased supplies to fuel existing demand. Assuming they did something on purpose (they didn’t) How could anyone support policy that impacts inflation only by driving down demand like what has been happening? Inflation is down because you are poor and in debt and so you are eating less and consuming less, so yay us? Ridiculous.
Right honourable Chrystia freeland said today the time is now , it’s time to cut the interest rates on June 5 th . She’s got my vote
To build my garden suite in my backyard. I hired an architect for $600. He gave me three sets of plans including a plot plan with all the setbacks, elevations, existing structures. I took two sets of plans up to Langford, the lady checked it out very thoroughly (namely the plot plan) and said looks good. I had the building permit in hand in 10 business days.
I didn’t need to take a build exam or anything…I just built it. Had it inspected…And that’s that.
I agree.
I would welcome it…Its about time.
Many permit applications get delayed as a result of applicant error, not including required information for example. This new digital building permit hub promises to check for required information at the time of application, and let the applicant know immediately of deficiencies . Of course time will tell how successful this is, but I have to applaud the government for trying it, as they are giving the people exactly what they’ve been asking for, namely a streamlined process for getting permits approved.
I think many of the “nay sayers” here on HHV will hate the idea of this digital permitting, because in reality they really don’t want to go through the required steps in the first place. Everything from not taking the builder exam, to not meeting all the required sizing requirements, not getting surveys, not meeting all building code etc. They consider all that “nonsense” and just want to be left alone to build the house the way they want to build. It. That’s understandable from their point of view, but I don’t think it’s what the majority of voters want to see.
Here’s the government announcement.
https://news.gov.bc.ca/releases/2024HOUS0028-000817
“To get more homes built faster and address challenges in B.C.’s housing market, a new digital Building Permit Hub will help streamline and standardize local permitting processes.
The Building Permit Hub will address these challenges by offering a one-stop, simplified process, resulting in faster processing and review times. Builders will submit their permit applications online in the hub, which will:
standardize building-permit submission requirements across jurisdictions in B.C.;
automatically check that the permit application is complete; and
automatically check compliance with key parts of the BC Building Code.”
Even though I have had several in person business discussions with you in the past. This is where we don’t see eye to eye…You are constantly throwing shit at municipalities all over the internet, using your real full name as your handle, and then you wonder why your application hasn’t moved forward an inch in over five years. They have the internet too!
I know I’m in the echo chamber, but I kinda like it down here.
Its very peaceful.
My father bought a teardown in Langford and built two homes in 2006/2007. I remember taking a simple application down to Langford with the blueprints and receiving a building permit in two days. Calling Don Mann excavating the next day and the teardown vanishing in the matter of hours without any testing whatsoever.
It can be done, it just never will be done that way again. It will take tens of PDF files, multiple consultants, months on end, a ton of added costs, and the end result will be the exact same house, but it will cost a lot more.
But you can sleep well at night knowing the soil in the trench where the new sewer/storm/water lines are was tested.
Did you see this, Leo?
Eighteen years and $46-billion later, the CPP admits it could have earned more just by buying index funds
https://www.theglobeandmail.com/opinion/article-eighteen-years-and-46-billion-later-the-cpp-admits-it-could-have/
https://jmp.sh/s/nT8AZXcsRhc7b1mPyI8I
BC is one of two provinces (the other Ontario) which had to take a big hit on international student numbers. That’s because the new quotas are per capita for each province, and BC and Ontario were way above the national average.
Another great article. Thanks.
Here’s a small quibble with one of the data points…
I measure it as 1.1%/year, not 0.3%, so I disagree there. It appears you came up with this 0.3% number, from a chart that labels 2020-23 as the “post-pandemic” years. When of course 2022-23 are the post pandemic years, with 20-21 being the pandemic years. Restrictions ended during 2022 so it would also be reasonable to include 2022 as a pandemic year, but I’ll call it post-pandemic here. Because population Growth was small in the pandemic years (20-21) and exploded post-pandemic.
Here are the numbers as I see them
Pop growth averaged 2.8% in the actual post-pandemic years 2022-2023
Compare this to 1.7% growth in the “years immediately before” the pandemic , namely 2018 and 2019
That means Victoria grew 1.1%/year (ie 2.8-1.7) faster post-pandemic (not 0.3%). That’s a big difference,
Source: https://www2.gov.bc.ca/gov/content/data/statistics/people-population-community/population/household-projections
Yup, a realtor from the Agency left her husband and 2 kids to cheat with him while he was also engaged at the time. LMAO blowing up your marriage over a ponzi scammer who’s supposedly operating a successful business in a closely related industry.
It’s almost certain that we won’t as the ramp in new listings last year was highly unusual and a direct result of rate increases in both June and July.
No, it’s likely determining who got paid out and who got left holding the bag. No money will be recovered from the estate but money will be recovered from investors who got paid out with interest.
“A new online hub will speed up building permit processes across jurisdictions, the B.C. government said Monday.”
Wow, there is so much wrong with that I don’t know where to start.
First of all, the Housing Minister says that the new system will be unique in North America. Why? Isn’t every other province or state dealing with the same issues? And haven’t some of them thought of different ways to speed up the process? Every time someone proposes a unique system it screams dollars. So instead we just add another layer of bureaucracy?
Secondly, all of the regulations that the municipalities use are set by the province (except for the City of Vancouver that has its own charter). All those regulations that require builders to address soil sampling, archaeological significance, get the Homeowner Protection Office approval, write the builder exam (threw that in for Marko), collect Development Cost Charges for schools, water providers, etc. Why not address those costs (and the time it takes for various municipal departments to deal with them) first?
Thirdly, why not find the most efficient municipality and then emulate what they do? Why a whole new digital system that complicates things even further? I can already think of a thousand questions that their website and form doesn’t address, and I can guarantee they won’t have a human to adequately answer those questions. And when people don’t get answers, they just go ahead anyway thereby causing more work (and dollars) for bylaw enforcement.
I don’t know the systems in all the municipalities, but I do know all the local ones and we have a few municipalities that can issue house permits within 48 hours.
Martel Trustee is still collecting data as to whether the sun rises in the east.
Trustee concludes Greg Martel ran a massive Ponzi scheme
https://www.timescolonist.com/local-news/trustee-concludes-greg-martel-ran-a-massive-ponzi-scheme-8875448
Population growth is the new housing stat of interest so I appreciate the look at it on this blog. What I find the most interesting is the percentage of non-permanent residents in Victoria’s population growth. If I had to make a bear case for Victoria’s housing market, I would say that lack of growth from non-permanent residents moving to town would cripple growth and housing prices as a result. Who knows if that will happen but I’ll be watching local stories on international student enrollment and big construction projects.
Chasing money back from those who got paid out will be epic! Lots of these peoples are locals who know each other.
40 new listings yesterday, lowest I’ve seen for a Monday in a while.
The latest on Martel….crazy thing is he was posting photos of him in private jets on social media and people were investing….it’s hard to believe financial literacy in this country is that poor.
“The BC Securities Commission says it’s investigating any misconduct relating to trading in securities which could lead to criminal charges, saying it may take several years . They didn’t respond to CHEK News’ question as to if they take any responsibility for ignoring people’s complaints.
The latest report also shines a light on how Martel was using the money he was earning through My Mortgage Auction.
PwC says over the five years it operated, Martel spent at minimum $3.1 million on vehicles, $1.1 million for rent on multiple homes, $261,000 on restaurant meals and events, $200,000 on watches and jewelry, $150,000 on recreation, $59,000 on fitness and sports, and $50,000 on wine and vineyard events.
Additionally, the report shows that Martel has declared $9.3 million in secured loans and $293.6 million in unsecured loans, however, PwC has only been able to prove $7.9 million in secured loans.”
Beuracracy. There still isn’t one missing middle policy project under construction.
The first approved missing middle project (10 rental townhomes with lower level suites) is stuck at City Hall and has been for months.
You would think 10 three bedroom rental townhomes would be something we need and COV would work hard to approve the building permit. Nope.
The insanity is difficult to describe. For example, the engineering department says we want the sidewalk moved here (after previously agreeing to a location) and then you as the developer go to parks and say hey your engineering wants the sidewalk moved here we will need to cut down this tree and parks says “sorry tree can’t go.” Then you ask well can you walk down to the engineering department and talk to them and find a solution? And you don’t hear back for weeks and then when you do the solution is along the lines of hey can you redesign the entire project by talking 3′ of depth out the townhomes (not an easy task when all the consultants have already done the work plus can’t fit three bedrooms now).
In this YouTube video I talk about this on a small scale -> https://youtu.be/s6aSPG47AQo?si=WboKeOsPw-HJH_UJ
Had to spend 80k on a sidewalk for a 1,600 sq.ft. house, not to mention the delays and carrying costs.
Not sure if you saw the photos of the soil testing taking place on Shelbourne last week I posted infront of a small townhome development. So much non-sense like that just keeps getting added and added and nothing is ever removed.
Online building-permits application site aims to standardize process in all B.C. jurisdictions
The digital building permit system will be a “one-stop shop” for building permits, and 12 municipalities and two First Nations governments are part of the first pilot phase of the new system; Victoria, Saanich and Nanaimo are among those in the first phase.
https://www.timescolonist.com/business/bc-announces-online-building-permit-hub-to-speed-up-homebuilding-across-province-8872207
Patriotz, any truth to the rumor that more people are dying of boredom in Victoria than in other parts of the province?
Perhaps more like people who were able to buy in Vancouver in past decades and thus able to buy in Victoria and have money left over. I think we’ve seen data supporting this, particularly the age profile of Victoria suggests in-migration of older versus younger people.
Victoria is one of only two CMA’s that have more deaths than births, the other is Kelowna.
If there are any developers or similar here what specifically is stopping 8-20 unit multifamilies from being built? I’ve noticed in Germany and older areas in Canadian cities (Montreal especially) there are far more of these. Apart from needing two staircases, sewer capacities, and land drainage requirements, what else makes these kind of building financially not very feasible.
When I worked in Winnipeg I worked with multiple developers who started doing these kind of developments and the units were selling very well and the profit was not insane but it was pretty consistent. 3-4 bedroom 8-12 unit buildings especially were in high demand by families with multiple kids and that could not buy a decent SFH.
Do we have any data of the characteristics of the people throughout Canada moving to Victoria. I would like to know the ages, incomes, and education of these people. Given that over half of these migrants are from Vancouver I wonder if they are people too poor for SFH in Vancouver but rich enough for Victoria.
Also is there data on ages of SFH buyers? It’s anecdotal but I’ve been noticing that “starter homes” especially in good locations are being bought buy older people who aren’t downsizing into condos but into these kind of homes.