June: sales stable, but high inventory causing some weakness
June came in at 661 sales, down 6% from last June. That number though is misleading, given the two fewer business days in the month compared to a year ago. On a sales rate per business day level, we are actually up 3%, however that’s all within margins for noise. Suffice it to say that nothing has changed in the sales rate in June, and in fact not much has changed since rates jumped two years ago. However on a seasonally adjusted basis, the small uptick in single family sales we saw in May held up for June, and we are at a somewhat higher level of detached activity than for most of that higher-rate period.
These are very small changes and could well be reversed later, but with interest rates down a bit, a lot more selection, prices unchanged, and incomes up from last year, it also wouldn’t be overly surprising if we had some more sales. Condos and townhouses dropped a little from May, and overall sales rate took a small dip, still coming in at roughly pre-pandemic levels.
On the new listings end, the big increases year over year seem to have calmed down, from an increase of 56% in April to just +14% in June.
Overall though, we’re still near the top of the range for new listings, with June coming in third highest after 2010 and 2008. High, but not unprecedented for this time of year. Given the strong pressure from mortgages renewing at much higher rates, there is still only limited evidence that this is translating into a lot of new listings. I’d want to see historic highs here before I was really convinced that this was a major factor in the market.
We’re past peak new listings season, and though inventory continued to increase from May, that increase was entirely due to normal seasonality. Seasonally adjusted inventory did not increase further last month.
Part of the reason that inventory is not growing as fast is that sellers have gotten frustrated at the slow pace of sales and are increasingly taking their properties off market. We saw 713 properties taken off market in June, a 20 year high for this time of year. Off market is defined as the difference between the inventory at the start of June plus new listings minus sales and the inventory at the end of June.
We still have a broad based increases in active listings as discussed last month, but the westshore detached market remains the slowest as high rates push down on demand from the generally younger and more credit-dependent buyer group. Westshore detached sales have been dropping as a percent of the overall house sales as activity concentrates more into the core.
The westshore was already weaker than the core to start the year, but that gap has only grown, with the core detached market staying stable while westshore market conditions have steadily weakened.
Months of inventory ticked up a little in June, while the sales to new list ratio ticked down, both indicating a small weakening in market conditions overall. Just like in May though we still have a wide gradient in market conditions depending on where you are looking, so the overall levels are less reflective of any given market segment than they normally are.
Along with somewhat weaker overall market conditions, prices were also weaker in June after a pretty strong May. Medians and averages – though notoriously noisy – generally dropped from May, and MLS HPI benchmark prices went the same direction.
The same story is evident in sales to assessed value ratios, which showed some surprisingly large drops for detached and condos. Perhaps May was the anomaly here but either way we are back to levels we saw at the start of the year after a brief spring bump.
At $1.177M for the median house and selling at 1% over assessed value, we remain at levels somewhat higher than we saw last fall and the fall before. At that point when detached prices dropped to just over a million I predicted they would likely not drop much further. Prices bounced a little in the spring, but I wouldn’t be surprised to see another weak fall this year. Rates won’t yet be substantially lower yet and the small increases in year over year sales activity I expect to see won’t be enough to outweigh the bigger increases in inventory. Meanwhile the grind of large increases in mortgage renewals will continue throughout 2024 and 2025 unless we see faster rate drops. Though there has been some improvement with flat prices and income gains, affordability is still very strained and I don’t believe it’s at a level that would allow the market to recover. However if you look back at market history, some of the best buying opportunities were when sales were dead. My baseline forecast remains an extended period of price stagnation, but eventually that too will end.
Meanwhile inflation ticked up in May to 2.9% and was met with the usual cavalcade of excited headlines. “Inflation heats up again” and “Odds of rate cut fall”! The reality is that every data set is noisy and we saw similar headlines every other month there was an uptick in the CPI but it didn’t affect the rate path. I wouldn’t get too excited about these month to month fluctuations, and as usual, zoom out to get a better sense of what is going on. That shows us that the reality is inflation has been within the Bank of Canada’s target range all year.
However we are at the top end of that range, which reinforces my view that they will be very cautious on cuts. Inflation is back in range, but there is no appetite to re-ignite it. Right now there’s little goods inflation, with nearly all of the remaining growth in shelter costs.
Well known is the circular feedback from higher rates into higher inflation through the interest rate costs part of owned accommodation. That’s a significant factor, but should also be coming down with stable or declining rates. But the contribution from rent increases has kept growing, and that likely won’t reverse until the federal government implements their promised reforms to non-permanent residents. If that happens, it should bring the national population growth rate back to normal levels and reduce a lot of pressure on rent growth.
However what we don’t know is when that will actually happen. Since calling for the percentage of non-permanent residents to be reduced from 6.2% to 5%, that ratio has actually increased to 6.8% in the second quarter of 2024. But if rumblings from the post-secondary sector about grim fall international enrollments are any indication we may be on the verge of seeing that drop come to fruition. My bet is that by next year the period of abnormal population growth will be behind us, setting the stage for a more durable rate cut path. But that would require some unpopular follow-through on promises, and that kind of commitment may be lacking heading into an election year. It’s tough to feel sorry for the federal government’s balancing act of unwinding this mess when it was one entirely of their own creation.
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Not the point I’m making. Also not relevant. What matters is population and growth, not household size. That’s why converting starts into rooms that people can live in is useful
New post: https://househuntvictoria.ca/2024/07/08/some-housing-targets-are-not-like-the-others
Right. And in greater Victoria, a record number (5,000 units per year) managed to meet all these rules and start building.
What we hear from on HHV is a lot of part-time or wannabe developers who are “more talk than shovel”, who just like to complain endlessly about the same problem sidewalk or tree. But their “day job” isn’t as a developer (thankfully).
Fortunately there are big developers out there who actually get things done in big numbers. I suggested to Leo that he interview some for a HHV article, but he gave that idea a definite “No”. That was disappointing, and indicated to me that housing is still a partisan issue. Big developers are still “the enemy” to many on the left.
Victoria has tiny household size, only 2.1 people per household, 20% below canada average of 2.5. Of course we build smaller homes, with less bedrooms per unit than we had in the 1970’s, when many families were the size of the Brady Bunch.
That’s really just another way of saying housing was a lot more affordable 20-30-40 years ago. Of course it was.
But if you’re building today you have to deal with the parameters today. That’s where you start. A unit is a unit even though it’s smaller. Oh and do note that household sizes are a lot smaller today than back then.
Buying conditions are improved over last year but buyers aren’t interested. Buyers want excitement, and a stagnant market is anything but
True, though I don’t think it matters quite as much if a bedroom or living room is a bit smaller. Generally it’s still about bedrooms for how many people can comfortably live in a space.
No doubt, our current level of building has been a slow moving disaster for decades.
Especially they started their asking price at near 1.4. still might be tough for them, that area is basically an open construction zone blending commercial to condo and the road it attaches to, is probably one of the busiest in the south Island as frustrated drivers jump between Shelbourne and Ceder Hill traffic jams.
That is what I’ve been bringing up the last few months. Comparing housing starts doesn’t paint the whole picture. In the 1970s Gordon Head was being built (aka 2,200 sq.ft. SFH homes) and now we are building the rental buildings on the corner of Mckenzie and Shelbourne which will be 500 sq.ft. average per unit.
Even bedrooms aren’t a great way to look at it as 20-30-40 years ago a one or two bedroom condo was a lot large than it is today.
On a per square foot of finished space housing starts are a disaster.
If only things were like that, staff literally invent new policies and interpretations on the go. As Viclandlord pointed out these aren’t applications on a napkin but rather put together by professional consultants sometimes you as the builder/developer spend hundreds of thousands of dollars on. No MMI project has been issued a permit yet in the COV and there are quite a few applications that were made 1+ year ago…..are all the consultants such as architects, civil engineers, arborists, etc., simply that stupid that they can’t follow rules and requirements?
As I said this is 1 of 50 examples of non-sense on a typical project. I would have to write a book to go over all of them.
For example, last home we built BC Hydro refused to hook up overhead power to the home before a COV trimmed their tree as they need a certain clearance around their power line. COV tree preservation coordinator refused to sign off on having the branches that need to be trimmed trimmed. She also didn’t want to discuss with BC Hydro person so we ran a generator for 5 months while the BC Hydro person came to the site 6 times and COV person 5 times.
So should all development be stopped because a BC Hydro policy doesn’t meet a COV rule they have? Just curious.
I am a little lost here. Why is it the City’s job to find a solution? Shouldn’t the developer submit an application that meets all the rules and requirements of all the departments of the City?
But do we even need more bedrooms per 1,000 people?
Canada already has built among the highest bedrooms per capita in the developed world. I’ve talked about this for years on HHV. Canada has already built more bedrooms (and housing sq foot) per capita than most countries, but the problem is we have small household sizes. So lots of empty rooms in Canada’s homes.
That’s why I’ve advocated measures to increase household size, by lower taxes for households with 4 or more people (including people in suites). That lower tax would go the homeowner – either owner occupier or landlord. landlords would be incentivized to rent to larger households to save taxes. Owner occupier would be incentivized to increase household size with extended family etc.
Here’s a chart from 2014, where you can see Canada led the developed world in rooms per capita (excluding kitchen, bathroom) . Showing we’ve already built more housing than most countries, we just don’t know how to fill them up!
https://figure.nz/chart/Zm0drr8mzoKOUebS-kszm8NVFhm00CWRr
Canada is #1 highest built housing rooms per capita in the developed world at 2.5 per capita (rooms excluding kitchen, bathrooms) 2014 chart
Insider Contacts says the last 2 weeks had a noticeable slowdown (what are you seeing Marko?) Which is kind of odd IMO, I would have thought it would have at least stayed the same with the BOC rate decision.
Month to date market activity
Sales: 134 (down 9% VS same time last year, but these early comparisons can move quite a bit)
New lists: 338 (up 20%)
Inventory: 3395 (+45%)
BC started about 20 bedrooms per 1000 people in 2023. That’s less than the 50 year average of 26, and less than half of what we built in the 70s
A little early to tell, but we’re pretty much right in the middle. In a average year, inventory peaks in June
Either or.
By the way, for MM in Victoria do the units have to be rental or can they be condos?
Marko, since you are building them, what do you see the return being on a missing middle six plex? Assuming a 20% capital investment are these building likely to be cash positive? Will they be cash positive ten years from now assuming rent control increases below inflation rates?
Interesting price drop.
Okay Introvert you can take your meds now. The bad man isn’t going to hurt you anymore. Just Jack isn’t going to be coming back.
https://youtube.com/shorts/UC5cguG3Y24?si=TnpAEWjQzp_RhXrR
“Not actually building homes”…..And yet the real world data shows that BC is “actually building” a record number of homes.
As pathetic as getting run off of an internet forum for being obnoxious, then slinking back under a new name and denying the obvious?
My neighbor is one of the Woke and lives in a land of unicorns. Ask Marko how well you can tell some people things.
Type of property and what I am seeing out there on average. You can’t get into the details of each particular offer as sometimes everything makes sense and then buyer collapses it on simply cold feet or better option was listed during conditions period, etc.
I get sick to my stomach reading the COV comments coming back. This is like 1/50 of a MMI development I am following right now. Builder spends a small fortune on consultants, as noted, all professionals that have worked with COV before, including sidewalk/road dedication, etc. It isn’t like you can get around using professionals and for some things like parking/traffic studies there are only two or three companies that you can use and as a result the consulting work is very expensive.
COV comes back and says actually that sidewalk you have to build we now want it 2 meters wide instead of 1.5 meters wide (context currently there is no sidewalk just a rough gravel path). Builder goes to parks department and says I need to push these rental townhomes (yup, not short on 3-bedroom family townhomes rentals or anything) back 0.5 meters because of request from COV engineering and according to arborist one tree will need to go. Parks says, no tree can’t go, sorry.
So you would think COV parks and COV engineering would sit down a find a solution on their end, nope. Builder goes back to all the consultants ($$$$$) to try to find some sort of solution, none ideal by any means. One solution involved re-routing the sewer main and it exiting the property 10 feet away from previous civil plan. Builder already did the soil sample testing ($10k) for previous civil plan, now has to redo soil sample testing again even thought there was no contamination and location of new proposed sewer line is only 10 feet away. Even the company that did the soil sample testing and makes their living of such is like this is non-sense.
Add like another 49 things. There will never be affordable housing, ever. As soon as interest rates stabilize a bit within a couple of years we are back into full on chaos/housing crisis, imo while landlords sit one empty basement suites as they are too terrified to rent out their property due to every change tenancy laws in favor of tenants.
Society is in the business of building bureaucracy, not actually building homes.
Fun times ahead.
Curious as to how you came up with that probability assuming it came with the typical conditions of inspection and financing.
Reality is I wouldn’t even know or care? I have deals collapse on a weekly basis. That simply comes with the territory of doing a large volume of transactions + slow market. I told one of my sellers accepting an offer Saturday and said “rough guess 30% odds this collapses, 70% odds it goes through.” That is what happens when you have a difficult marketplace.
I more concerned about dad the inspector nuking my deals, on average 🙂
tell your neighbor that
My neighbours house is a rather over priced old century home. I think it would either be unkind or perhaps unfair to give my thoughts on it. What sells a house is the price.
It was poor judgement, It was right to call me out on it. I can admit when I’m wrong.
Ya keep it up , it’s just lil ribbing
It’s now your choice of what you do next.
Why take it down for me? I can care less what you post, I am just calling it as I see it.
I’ll take it down, but just for you.
Why would you even bother to post something like that? I thought patrick and introvert were as pathetic as it gets on a internet forum but this is a whole another level.
Actually Barrister I wanted to hear more about your neighbor. It must be an unusual property. At the moment I am bored with refinances and sales. Nothing interesting has come across my desk.
https://youtu.be/pVY1-v97Mic?si=xOobMFUdF5AtPG_e
I’m just pointing out that every profession has problems, it’s just part of being a professional. So as annoying as it is that your are now needing to do a “parking study” on the way to your development permit, every profession faces issues as or (much) more difficult than this. You can console yourself with the expectation that the development will still probably yield you hundreds of thousands of $ in profit. If however, you break even or lose money, then by all means come on HHV and complain and you’ll get sympathy from many including me.
Anyway, that’s it for me on this topic. Thanks for the discussion!
I found this discussion interesting but mostly it reinforces the position that investing in real estate and for that matter investing in Canada might not be the wisest course.
Not once did I compare myself to doctors/lawyers etc, but anyhow lol.
All I was stating is that everyone deals with the most of the same problems with municipalities, it’s not like we are sketching this shit on a napkin and trying to get a D.P/B.P approved
We are all using the same registered professionals for the most part.
The cleaning clause I threw out to help someone with a suite or two so they are not scrubbing toilets on a same day move out.
There are getting fewer and fewer privately owned large apartment complexes as most are owned by REITs. Just one REIT (Capreit) owns 30 apartment complexes in Greater Victoria. That’s a LOT of suites under the control of one company for such a small city as Victoria.
OK, so you’re a professional. Now how about you compare your problems with other professionals, like lawyers/ doctors/ dentists etc.
Do you think the issues that you’re having are worse than issues facing other professionals? For example, wow, you needed to add a clause to get a cleaning between tenancies. Do you think other professionals don’t deal with problems as bad as that? Yah I bet heart surgeons have it real easy in comparison.
That’s the risk you take to mutually agree to end a tenancy. But well priced properties sell in about 30 days.
And that’s what I suspect is the real problem. An investor wants to be making coin right up to the last possible moment. Too much notice and the tenants are more likely to find a rental within the six months and you’re out of pocket with a vacant property that the agent has over priced on the market.
Not an envious position any real estate agent wants to find themselves in.
I actually made no reference to property management companies. The reference I did make was to large landlords with purpose built rentals that have their own staff, where things like cleaning a unit between tenancies is routine and not something to be posting about on HHV.
@ Marko
Well it’s soon to be a 10 unit building but don’t even get me started on that.
2.5 years into a development permit/building permit to add two units to an existing building.
The last unit should be finished the middle of august and I received the BP on May 11th.
So people could have been living in these units for a couple years, but we are not short on rentals or anything.
I think someone on hh was saying it’s just the amateurs/mom & pops that have trouble getting permits approved and that all the developers do everything in house.
I must be an amateur even though I used an Architect,Mech & Elec eng,Structural eng, Envelope eng and can’t forget the civil engineer even though there was Zero civil work.
Oh I almost forgot the parking study haha.
Most developers Do not do everything in-house, they are using the same professionals we are.
But until you actually see what goes on in the cov and read some of the comments back from staff you have zero clue.
Marko is pretty bang on with all his comments on the CoV over the years.
Patrick, obviously you have had zero experience dealing with property management company’s if you think they are saints and the answer to everyone’s problem.
Marko, I could not agree more
“I would also say 90% of the tenants haven’t left the unit to a standard I would personally; therefore, 9/10 times I am doing extra cleaning or hiring professional cleaning if time allows before next tenant moves in.”
We actually write into all our leases that the units must be professionally cleaned with an invoice provided upon move out, we spent too many hours cleaning, because someone was moving in the same day or next day.
Not sure, haven’t dealt with it personally.
A recent listing I had my clients (sellers) negotiated a mutual end to tenancy before we listed/sold the propery and then when the tenants cleared out we listed it.
A Vancouver realtor on YouTube had been promoting this approach for over 10 years now for a number of reasons….easy to show, shows better, appeals to investor buyers too as they can set new rents, owner occupiers can move in right away and not worry about tenants, etc.
My concern has always been recommending such an approach to a client and then the property isn’t moving and they don’t have the rental revenue coming in.
That being said it is going to be so incredibly difficult to sell with 4 months’ notice might be best to take a risk upfront offer the tenants 2 to 4 months’ rent compensation to mutual end the tenancy within a couple of months and then list it vacant after they move out.
Marko, after you give four months notice how long does it take you to get them out if they dispute the notice and want a hearing?
Patrick, to answer your question, I like most litigation counsel worked on billable hours. Fast settlement, low bill, three year fight high bill. Imagine it might be the same here in B.C. It is virtually impossible to do a flat fee in a disputed divorce since you have very little control of the process in terms of either length or complexity.
Any data on how many home owners have taken up the province on the $40,000 secondary suite incentive? My guess is close zero. After 5 years of renting way under market you have to give 4 months’ notice that you want the suite back.
Your 8 unit building is probably worth less than a newer home in the Uplands; however, you never see anyone complaining about a new home under construction in the Uplands. But if you want to be productive with your capital and rent seven units and move back into one you are a greedy landlord trying to take advantage of tenants. Not to mention you have to pay income tax on the rent, capital gains on the building, etc., while the $5 million dollar Uplands mansions in principal residence exempt.
Crazy thing in all of this is renters are genuinely going to be shocked/upset at rents increases in next 5, 10, 15 years.
@ Patrick
If it’s over 5 units the owner is not allowed to give notice for landlord use, so there is no moving yourself in or your kid.
So my situation like I said, we gave notice for landlord use in an 8 unit building and we have been living here for 3 years.
So now after these changes that is not even an option.
The unit we gave notice to was the largest and had the highest rent in the building @ 3500/month I believe.
There’s lots of people like me that will be caught with these changes.
Once a landlord gives notice to vacate, the gloves come off. Whatever relationship you thought you had will be gone. Not all tenants will do physical damage but many will simply stop paying the rent from day 1 of the notice period, and many will simply make life as hard on the landlord as possible. Four months is a long time to wait – particularly if the suite is in your home.
Cash for keys? This says enough about the landlord / tenant relationship and why it just needs to be maintained as business-like as possible. Follow all the rules, document that you have (document when they don’t), and provide all required notices including notice to vacate periods – no more, no less.
Professional (large) landlords aren’t going to get tied up in knots because the unit wasn’t left to their cleanliness standards. Yawn… one of their management staff brings in cleaners and it’s business as usual. Maybe takes them 5 minutes clicking online to make it happen. And they won’t be posting on HHV to complain about it. That’s why it’s great that we are getting all these new purpose built rentals for Victoria (and Canada in general). These are offering the stable, long term rental options needed to help the housing crisis.
If you read those Reddit posts (posted below), both of those evicted Victoria tenants felt that buying a home was the only way to obtain a secure living situation. What a disgrace – we need to make sure that long term rentals are a secure and viable option, as many countries do.
True, but we can’t equalize it by justifying evicting good tenants. That’s “two wrongs that don’t ….”
I can’t recall a tenant ever giving me more than 45 days notice, I would say some sort of average is 35 days but tenants now get 120 plus 30 days +/- so between 120 and 150 days.
I would also say 90% of the tenants haven’t left the unit to a standard I would personally; therefore, 9/10 times I am doing extra cleaning or hiring professional cleaning if time allows before next tenant moves in.
The one time I buckled and allowed a pet I got a formal complaint from the strata within the month I had to deal with but if you read the comments online every tenants pet is a saint and how dare landlord discriminate against pets.
It is 100% a two way street but for some reason we paint only the landlords as evil.
Trying to get bad tenants out of your property would be a landlord’s most stressful time of their life. It goes both ways.
There are two sides to this… the landlord’s and the tenant’s….If you were a tenant, and renting a place today, and you got notice that you are getting evicted in two months, because the landlord’s kid wants to move in, what would your opinion on this issue be? Would you side with the landlord?
For some context, here’s a few Victoria tenants on Reddit describing a recent eviction as the “most stressful times of their life”. Whereas I doubt you’d describe not being able to move your kid into one of your units within two months as the “most stressful time of your life”.
Don’t get me wrong, I respect landlords that provide long term, stable rentals to tenants. I grew up out east in SFH rented continuously for 20+ years and “God Bless” our landlord that provided that. I just don’t extend that respect to the minority of landlords that consider it a “game”, and “rug pull” the rental via favorable eviction rules whenever they feel like it. To “time the market” or switch their investments to “dividend paying stocks” or whatever.
Reddit…
Of course it’s a two way street. But for many landlords they have no problems getting a new tenant in a couple of days and often at a higher rent. That’s not the same for a tenant that has to find another place. The two are not equivalent.
@whatever
It’s a two way street. Do you think tenants ever give more than the 30/days notice when they are moving out? They never do, it may have happened a handful of times with us.
Prime example one of the two tenants that just gave notice, gave us 25/days notice.
Guess what she bought a house! Awesome and 75% of our tenants end up buying a place or are in between houses.
Do you think she didn’t know for months that she would be moving into the house she bought?? This happens ALL the time.
Sigh… like I said before, there are many “tax minimization” strategies for RE, some maybe grey but the are available and used by many. There are none for dividends from stocks, broker sends statements directly to CRA.
I was actually one of those landlords that bought a small building and gave notice for landlord use, guess what I’m still here 3 years later.
That was not before the tenant fought the eviction, it took months to get them out and over 10k in lawyers fees.
When we originally gave them notice we told them they could have up to 6 months to find a place and they said not to worry they would be out in a couple months. Then came the registered mail from the lawyer they hired.
We then offered 10k to get the f out and they declined.
Such a flawed system as a landlord now.
What about the family that owns a small 6 unit for years and then they would like to have one of their kids move into one to go to school or something.
In times of low vacancy rates why would a landlord want to screw a tenant over with just two months notice. Surely a landlord would have decided to occupy the suite several months earlier so why wait till the last moment to inform their tenant with two months notice. The landlord must have had a hate on against the tenant giving them the bare minimum prescribed under the law. Two months notice is a “FU” to the tenant.
Well they also sell some houses within a few days, and get full commissions. So let’s not feel too sorry for them.
As a retired divorce lawyer, did you ever settle a divorce within a few days, and still charge full payment as if you’d been working on the case for years?
Yes, that would be the situation they’re targeting. But it could be the landlord genuinely wanting to move into a unit in his owned building. If so, that’s just become harder.
“and is either not stratified, or is stratified but all rental units are owned by the same owner”
Someone that owns a condo and wants to move in is not affected. I think this is more to target someone that buys an entire apartment building and using “landlord use” to kick out tenants that have been there for 20 years. I think I remember reading of such a situation on reddit a few months ago.
Here’s a sampling of the changes enacted in the new legislation, starting July 28. The full list is here https://www.bcrea.bc.ca/legally-speaking/landlords-take-notice-recent-amendments-to-bc-tenancy-legislation-574/
For example, no landlord use of a unit in a multi-unit building of 5 or more (if landlord owns all units). So if a landlord wants to do that, likely going to be expensive (6 or 12 months ‘prescribed amount”, or cash-for-keys)
Yes, the PR wording is unclear, but the new notice period is 4 months (landlord use or sale with new owner use).
The laws are summarized and linked to here. There’s a bunch of changes, all pro-tenant of course https://www.bcrea.bc.ca/legally-speaking/landlords-take-notice-recent-amendments-to-bc-tenancy-legislation-574/
The “prescribed period” they talk about as sometimes applying is minimum 6 months (a separate change in section 51: tenant’s compensation)
As more and more building go up with little or no parking I can see parking stalls increasing in value. There is also a stronger possibility for the city to charge for overnight street parking. ( they are considering exempting cars with handicap stickers). Dont know if this would get passed but it could provide a lot of extra revenue from evil car owners.
So what is auction value/purchase price?
https://youtube.com/shorts/hdD9Z1lRFxg?si=CxLLBBiIlxIzt3Ya
Screw buying condominiums. Buy parking stalls.
Marko is correct, one unit rented rented 12 months ago and the other rented about 14 months ago.
At that time we were asking and getting 100/month for parking and now we are getting 150.
What’s the difference between market value and share value?
https://youtube.com/shorts/HsR5gUYLI1M?si=UwvJhZccCttcuI4r
BC Real Estate Association sent us an email noting that the 4 months’ notice applies to sales where the buyer wants to move in, but a couple of people online have questioned it (noting they think for sales it is still 2 months?)
and reading the press release it seems not super clear, thoughts?
https://news.gov.bc.ca/releases/2024HOUS0115-001044
Changed my mind. The landlords can figure things out for themselves on what to do. I’m not going to help them if they can’t figure out a solution . They shouldn’t have been landlords in the first place. If they treat their tenants like crap by not keeping them informed on their future plans then they deserve what they get in return.
Sounds like extortion, should be illegal, they should be fined and permanently put on a bad tenants registry. Trudeau had the brilliant idea that good tenants should be rewarded with their history of paying rent being applied to their credit rating. The reverse should be applied to bad tenants and have their credit rating destroyed. Try getting your hydro hooked up with a bad credit rating, they’ll do it, but require a large deposit first.
And when the tenants wise up and start to ask for thousands more what then?
It’s all just speculation at this point. If you want the tenants to move sooner – then just buy them out. I ran across one a month ago. The tenants agreed to two months rent paid to them and they left the next month. The owner is now doing updates and making it ready to put on the market. So hopefully it will be sold within the next three months instead of six months. One extra months rent for $3,000 is what it cost her. Sounds like a deal to me. The person doing the updates will likely over charge her more than that on labor.
Marko makes a rather compelling argument. Marko and I often dont agree but in this case he makes a rather compelling argument.
Talked with one of my neighbors who is on her third real estate agent and is thinking of switching again. The problem is not the agents, the problem is that she is a moron and the price is too high. I think the place has been on the market for two years. This is really unfair to the poor agents who have put money into selling this property.
The point is that you pay less net tax on dividends than on employment or interest income because the corporation has already paid a share of the tax.
I wonder if tenants prefer leasing from a large management company handling hundreds of units or an investor with a few properties. I’m sure the large companies have more efficient ways of dealing with bad tenants than the comparatively small investor. Such as an in-house legal team that can evict a delinquent tenant more expeditiously.
Didn’t Viclandlord post on HHV about renting these units just last year so rents are up year over year and rented out immediately.
If I have a million in cash I can buy BCE, Enbridge, TD, whatever and average out to some sort of 6 to 7% dividend. If the corporations can sustain the dividend not sure why I am too concerned about their income tax load?
My alternative is to buy two condos for 500k and those aren’t passive by any means and the tax load is higher.
You have rent control right now. What’s surprising to me is how little below market the previous rents were. That says to me that market rents may indeed be coming down.
If you really mean vacancy control, no I don’t think it’s going to happen. The people who would want it are going to vote NDP anyway.
It’s because the corporation issuing the dividend has to pay income taxes before issuing the dividend. That tax is credited to the shareholder.
Contrast that with interest or salary paid out by a corporation which is deducted from its taxable income.
When did the previous rentals commence? Makes a difference.
I thought rents were coming down with a couple of large rental buildings getting occupancy.
That was until we had two units give notice they were 1 bedroom & Dens.
Listed on a Monday and had leases signed and deposits paid by Thursday.
Previous rents
Both 2500 plus utilities & parking
New rents
2600 plus utilities & parking
2550 plus utilities & parking
We are still actually considering selling all our rentals over the next number of years, we sold one last year and just closed on another in the beginning of June.
I also don’t think rent control is off the table.
South Park’s take on bring a real estate agent
https://www.youtube.com/watch?v=LnklLmM2dZw
Cnd dividend income seems very favorable in terms of taxation?
VicREanalyst, the tax minimization strategy for dividend income is that a couple could earn almost $120,000 of dividend income from Canadian public companies and pay $0 taxes vs over $20,000 from net rental income. That is why you will hear of many older real estate investors selling their rental properties to invest into dividend paying investment more after tax income plus growth and liquidity and no tenant headaches!
haha technically not true due to settlement timelines with your broker (T+ x days) and also the delay in transfer between your investment and actual bank account. Also virtually zero opportunity for any “tax minimization strategies” with dividend income compared to rental income. Lol anyways, I agree with your point, which is actually fundamental to all investments.
So when it comes to rentals things have changed a lot. Maybe too much, but I would expect these recent changes could be reversed if the vacancy rate increases. And that’s because we need investors to buy pre-sales to encourage more construction. I could envision new condominiums of under five years being exempt from some of these rules.
Professionally managed Purpose Built Apartments are the way to go in the city. Less reliance on mom and pop operations as this is where you also find a few bad amateur landlords. But with almost 40 percent of housing in the city with suites it will be a long time for things to change.
Historically a century ago, most people rented apartments and less people owned. But that changed with the automobile and the introduction of suburbs , zoning regulations, and mortgages. Now it seems the pendulum is swinging back and we are riding electric horses (E-bikes) again..
I sold, although it wasn’t entirely due to what I mentioned below.
Given that most of the new builds are long term, purpose-built rentals, wouldn’t more selling by mom-n-pop landlords be exactly what we need to supply homes-for-sale, to help the housing crisis?
Marko is right, it doesn’t make sense to buy property at these prices (especially detached) and hope to get any return. When I started in 1989, I bought knowing that I would have negative returns for a while. But back then foreign buying was at a frenzy and appreciation was almost a given. The high dividends being paid by some stocks are enticing but can be risky. I almost invested heavily in 2007 and would have been crucified. The new generation of renters are too unreliable, tread carefully. Maybe sitting in cash is a good idea for now.
Or you (and other landlords) will think sensibly about it, and realize that, since you’re not selling any rental properties, that the increase in eviction notice from two months to four months has absolutely no effect on any of your rentals, and you can just keep going as is. And you’ll realize your claim of this change helping evicted renters is “nonsense” is just you blowing more smoke on HHV.
We will see if the sentiment of landlords on this blog leads to an increase in listings.
Sidekick, “stats show under 10% problem tenants”. Stats aside, my experience as a previously licensed property manager and as a landlord in the past has been that 9 in 10 tenants have been a dream during the tenancy (although the 1 bad apple can easily wipe out all good will experienced with the good ones); on move-out, 9 in 10 will not fulfill their obligations.
Easy enough to do….rent only fully furnished. If renovating a suite install a shower instead of a tub, etc.,
I got a bit lazy over the years but in the start I rented all my units fully furnished and the tenants left after 1 or 2 years like clockwork.
That being said, I am done with the rental properties other than maybe a missing middle home while awaiting permits. Much easier to just put the money into dividend paying stocks, SP500 and do literally nothing while money is deposited into your account. Liquid within 5 seconds when markets are open which is five days a week.
Existing properties I will keep thought, all this non-sense will eventually create upward pressure on rents but I don’t think rent increases inbetween tenants are off the table long term either.
Ya, no amount of screening can prevent this because life changes and so do people. I mean truly problematic tenants (squatters and house wreckers), are probably significantly less than 10%.
That 10% though. Huge life lesson for me on a number of fronts.
Globe and mail reporting today
“the growing trend of parental financial assistance, with the average gift size breaching $200,000 in B.C.”
Stats will likely point to <10% of tenants as being troublsome. Its a numbers game when it comes to being a landlord.
Landlord can always do a cash for keys transaction with the tenant.
I think these changes lead to landlords choosing tenants who are not looking for long-term housing. This means those who are are, such as families or the elderly who cannot afford to buy, are going to be increasingly passed over. Maybe we get enough purpose built to compensate – not sure.
The hassles of being a landlord are increasing to the point that you are better off doing something else unless it is the only way you can afford your mortgage.
I ended up with a policy, without earthquake or water damage coverage, that provided a fixed dollar value payment in the event of only total loss of the house. What it did provide was a very large third party liability coverage. It ended up costing about a third of what the regular coverage would have been.
In the last couple years I had to fill out a survey regarding my house and send photos of the exterior (all four walls). Then the following year I was asked all the same questions again over the phone. When I mentioned I had already sent them information the prior year, the response was “oh yah, we changed underwriters”. My insurance had climbed to almost 3200 (1939 house in the Gorge with 10%earthquake ded). I was able to reduce this to just shy of 3000 by taking advantage of their new “local alarm” discount because I have Eufy cameras (not alarmed). I expressed surprise that these cameras actually provide me a discount, hence why I never mentioned them before and I was bummed I perhaps missed out on discounts all these years, but she assured me it was a new discount. Phew. Apparently as long as I can check my cameras from my phone at any time in a live feed, and there are cameras for each entrance, I was good. I said yes, I have a camera on my shed that is pointed to the back of my house, a doorbell cam and a camera over my garage that shows my driveway/front steps. I asked if she needed screenshots to prove it and she said nah, we’re good.
As for the metal vs shingle roof, my insurer said that did not reduce my premium. I expressed surprise again, jokingly asking if it didn’t make my house a little more fireproof? She said no, the risk of wildfire in Victoria was low, and most fires start inside the house which a metal roof wouldn’t help. Good point… so I asked, no difference at ALL? She said, well yes, the difference is that we likely won’t insure you if your shingle roof is >25 years, but with a metal roof, we won’t hassle you to replace for 40 years. So there’s that at least.
My previous insurance deductible (for replacement) was a percentage of the replacement value. Not the actual amount paid to rebuild, but the number printed on the insurance document. This means there is an incentive for insurance companies to have inflated valuations, as that pushes up the deductible but has zero effect on their payout. At least that’s how I read it.
I argued with TD about this and said their ‘system’ had minimum values per square foot (which seemed rather high). Perhaps they’re anticipating huge up-charges if there is a mass claim.
I actually had the insurance company’s appraiser over to the house. Then I almost had a coronary when they told me what the replacement value was. Needless to say this ended in a rather protracted negotiation.
I’ve wondered this myself. But because I’m heavily biased against insurance companies based on past experience, what I fear is that this could just turn into another “hah, gotcha, you’re not properly insured” type of situation.
If going down this road, I think you’d want to be doubly careful to make sure the insurer in fact (and in writing) has all the proper info about your house, so that you can legitimately say, it’s totally on you if you valued it wrong & it has nothing to do with me. Even with that approach, some of the info the insurer is asking for valuation is pretty subjective, such as is the house a “standard build” or more upgraded or “custom” – how the heck is the customer supposed to make that determination unless they have some industry knowledge? With the insurance agency I deal with, I’ve sent them pictures of the inside and outside of our house, and I’ve kept copies of everything.
Definitively a liability; however, I do think there will be a number of different opportunities resulting from this.
Up until now for the most part owner occupiers (often 1st time buyers) have been willing to pay more than builders/developers for tenanted MMI candidate entry level starter SFHs but when this kicks like what 1st time buyer is going to want to wait 4 to 5 months and what seller is going to want to wait for 4 to 5 months to get paid. However, for a developer doesn’t matter. Developer completes immediately, seller gets cash immediately, and then developer boots the tenant when they have the building permit in hand. Will be far less competition from 1st time buyers now.
The mortgage aspect will be interesting…is any lender doing rate holds longer than 120 days?
Some owners are not so fortunate to be able to not rent their suite. They need that income to pay their mortgage.
This may reduce the number of wannabee amateur landlords and that could lower house prices.
That’s a good point Patrick. The tenant now has more time to find another rental so they are not as likely to rent an over priced suite just so they have a roof over their heads. That might stabilize rental rates.
Certain times of the year are more difficult to find a rental. If a renter were forced to leave just a few months ago they wouldn’t have found much to rent. There seems to be more selection today at more reasonable prices.
An updated main floor of a Gordon Head home a year ago was fetching $4,300 a month because a family could find nothing . Now one can find a three-bedroom in Saanich for as low at $3,000
Game changer?…..I bet the evicted tenant doesn’t consider it a “game”.
When the “game” involves evicting a tenant, maybe these longer notice periods changes the “game” for the better.
For example, if the investor sells it to another investor-landlord, they can close the next day, and there’s no eviction of the tenant. So they’ve got an incentive to accept an offer from an investor who won’t evict the tenant. They’re only waiting four months if they evict a tenant. I think tenants’ fear of these evictions are a big part of the housing crisis, as many renters consider their rentals insecure whether or not they get evicted. So it becomes critical for them to own instead of rent. If every renter had a secure rental, we have less or no housing crisis.
If these changes leads to less evictions, we have more secure rentals, and it will have changed the “game” for the better. The recent trend towards purpose built rentals is providing the secure long term rentals that we need. Because the owners of the purpose built rentals aren’t selling units and evicting tenants as part of the “game”.
I’m just coming to the end of a painful tenancy (as the landlord). Will likely never be a landlord again, due to how tilted the playing field has become. It’s funny because I used to think having a mortgage helper was a good thing. Now it seems like a huge liability.
This is a game changer that I think might fly under the radar….basically if you are a buyer and if you make an offer towards end of July with conditions coming off in early August, for example, earliest possession would be beginning of January 2025. Not sure how getting a mortgage approval/rate hold will even work. This is going to make it very difficult to sell tenanted properties going forward
“Key Changes Effective July 18, 2024
REALTORS® need to be aware of these new rules when representing clients who are buying or selling tenant-occupied properties if the buyer wants vacant possession (whether on the completion date or otherwise). Any notice to end a tenancy for the buyer’s personal use given to a tenant on or after July 18, 2024, cannot end the tenancy until after the expiration of the four-month notice period.
How do the new requirements impact an offer on a home when rent is paid on the first of each month? If all contract subjects were satisfied or waived on July 22, 2024, a Four-Month Notice to tenants using the portal’s notice generator could be provided on or before July 31, 2024, and could require the tenant to vacate the home by November 31, 2024.”
Canada’s taxes are indeed not very high but they are increasingly difficult to evade. In most of the countrys from which we source our new citizens the income tax burden is easily handled: you simply pay off the auditor. There is a standard rate of fees for this service, as there is for getting an “A” on your calculus test, and in many cases paying off your new boss with a set percentage of your salary in order to acquire and retain your job.
Not the same. In your terms it would be you are forced to pay for food through tax, and then can’t eat said food and have to go to a restaurant to eat food there. thats not the situation though as you aren’t paying for food through your taxes like you are for healthcare.
Insurance question: assuming guaranteed replacement policies for all options, would one be silly in trying to get the lowest home valuation? Premiums are influenced heavily by this number, and I’m confused because some of them offer higher limits that can be selected even though the policies state guaranteed replacement costs?
I’m wondering if there is some hidden fine print I’m missing, the insurer has done a bad job of assessing the value of the home, or whether the higher valuations represent the risk/reward appetite of the insurers.
rush-That’s what you do every time you go to a restaurant. You pay a tax plus a tip. I prefer the private system of food consumption.
With private family medicine, you do get access to tests/scans/specialists through the public system, and don’t have to pay for them, so the one-word answer to “ Does that include MRI or any other sophisticated diagnostics?” is actually “yes”.
There are already private mri clinics available for $1,200 that can be ordered by any family doctor, so if you want to stay private you could pay $1,200 and get your mri next day. Or wait for a free mri in the public system.
Its not that strange when you factor in that we already pay a lot in taxes, much of which goes to healthcare. Its kind of like buying your food and then getting home and realizing there is another fee you have to pay just to eat the food you recently purchased.
You could have just responded with a “no”…..
Toronto home sales down 16.4 percent from last year.
“The GTA housing market is currently well-supplied. Recent homebuyers have benefited from substantial choice and therefore negotiating power on price,” said TRREB chief market analyst Jason Mercer in a news release.
My experience during the run up in prices is that most of the Canadian cities were in unison with each other. The old adage that real estate is local really didn’t seem to apply.
But with the downturn, the general direction is similar however they are not as locked together as they were doing the run up in prices.
Haven’t had a chance to look at the Fraser Valley data yet as it mirrors ours.
I’ve been going to a private medical clinic in Vancouver for 5 years (recently bought out by Telus). For that one, all doctor-ordered tests are available and paid for by Medicare using your BC Health number. (Labs/ MRI scans etc). Typically you get referred to specialists inside the public Medicare system – though private options are available there too. I don’t know if that Victoria clinic I mentioned works like that or not regarding tests/mri etc.
It should be noted that the leading opposition party in some BC polls (Conservatives) advocates adding private medical care options to our existing health care. So if there’s an upset and they’re elected, we should expect more private clinics like this. As it is, our BC NDP government is suing to shut some of them down.
Here’s what the BC conservatives say …
“He [BC Conservative leader Rustad ] said to fix the health care system, B.C. needs to look at European models that are a blend of public and private health care.” https://www.vernonmorningstar.com/news/bc-conservative-leader-talks-health-care-crime-climate-and-more-in-vernon-3363220
Poilievre has said he’ll leave it up to the provinces.
Does that include MRI or any other sophisticated diagnostics?
Yawn…. Nothing new or “alarming” in your links. The number of immigrants leaving Canada has been stable, here’s a 40 year statcan chart (from 2017) going back to 1982, and you can see % leaving within 5 years ( blue bars in the chart) has been remarkably stable (about 5%)
https://www150.statcan.gc.ca/n1/pub/91f0015m/91f0015m2024002-eng.htm
Join Harrison , talk to a doctor anytime of the day .
People pay vets thousands of dollars to treat their 14 year old dog, but are appalled to pay hundreds of dollars on themselves or their family members. Strange behaviour.
No need to go that far. The future is now. Here’s one in Victoria.
– Family Practice (MD) (annual fee, $2,500+) https://www.perpetualhealthcentre.com/family
– Urgent/Walkin (only pay per visit, $130+) https://www.perpetualhealthcentre.com/general-4-1
“Private Pay Family Practice”, low waiting time. (<1 day)
Marko, go to Phoenix, great care there in my experience.
Crappy part is one is not even allowed to pay out of pocket from health care. Personally, I would have no issues paying a GP $200-$400 per visit, specialist consult $500 no problem.
So weird when I am in Croatia and I have a doctors appointment at 9 am and the doctor actually takes me in at 9 am…..I am always like is this for real? So use to the BS here in Canada you assume the rest of the world is as crap as Canada has become.
The way things are going I can’t see myself living in Canada in 10 years. Basically paying for a 5 star hotel brand through taxes and getting motel type accomodation/service in return.
https://www.blogto.com/city/2024/07/alarming-number-immigrants-leaving-canada/
https://www.ctvnews.ca/canada/many-immigrants-leaving-canada-within-years-of-arriving-statcan-1.6753003
https://www.reuters.com/world/americas/canadas-surging-cost-living-fuels-reverse-immigration-2023-12-09/
Nice to see Canada rated best and most sought-after country in the world for immigration in 2024
For example,
– Google aggregate search (see pic).
And #1 country by sites specializing in immigration
https://reachimmigration.com/en/blog/here-are-top-10-countries-to-migrate-to/
https://www.greentreeimmigration.com/blog/top-immigration-countries-to-immigrate/
A typical comment when rating Canada #1 of all countries for 2024.
“ Canada is undoubtedly the most sought-after country in the world for immigration”
https://napavalleyregister.com/news/state-regional/the-wealthiest-californians-are-fleeing-the-state-why-that-s-very-bad-news-for-the/article_2b9a8232-a99b-11ee-80af-53777ea6a88d.html
https://www.deseret.com/the-west/2024/03/10/why-are-people-moving-out-of-california/
Canada’s taxes aren’t high by developed country standards, and they’re not high compared to California which seems to attract a lot of bright people. But they get paid a lot better there.
I’m wondering which country is without any of those six problems.
You are assuming the bright Indian student coder who is looking to work at a start up is going to stay in India. They aren’t. They just are not going to choose Canada. We are not a destination for the best and the brightest, nor for many others now.
I don’t know about weather, it’s been over 50C. in India this summer. Their power grids can’t keep up, hundreds have died. -30C is a lot easier to deal with (especially with access to abundant natural gas) people from those hot climates will admit to that. I think crime is out of control, you don’t want to commit a crime in some of these countries, you’re treated like crap, not the club meds we put our criminals in, with conjugal visits and better access to health care.
Screw immigrants, imagine being born in Canada, pay >200k in income tax per year and still lack access to quailty medical care.
Youtube is full of them and has been for the last few years. Canada’s reputation has plummeted internationally for immigrants who are leaving in greater numbers or not coming, and citizens who are becoming non-resident for tax purposes.
https://www.youtube.com/watch?v=JKxKVznbtfA
https://www.youtube.com/watch?v=6pVKJt1Uh9E
https://www.youtube.com/watch?v=SXe-PmxJRhY
Main reasons:
There is plenty of horror stories playing on Indian TV channels (according to some of my friends) that portray the poor living conditions, lousy job prospects, etc. in Canada
Any explanation for the low sales to assessment figures for detached homes in November and December 2023? Poor selection? Distressed properties, desperate sellers?
Lowered enrolment would be a surprise to me, since they can just lower their standards for approval and cash the tuition cheques as normal.
Where did you read about the “grim” predictions?
Leo, what adjustments are you making to the raw data? the inventory numbers in your chart are quite different from VREB data (shown below).
Yep, actively looking , not sure if it will be in Vic or back Vancouver way . I also have a property to flog here . I do agree hindsight is everything and taking your best guess
Sure Thursty, you’re guess at this time seems to be as good as anyone else’s.
So do you plan on buying in the near future to take advantage of future price increases?
Myself don’t c stagflation or any flatline in our future . They will just continue to lower interest rates and pump the population with ever more people . This is just the way we do it , it makes for a strong economy
Our golden ticket right now is immigration. On average new immigrants bring about $47,000 per person into the economy. Not enough to boost housing prices but enough to boost rental rates.
Missing middle red tape is just insane, pedestrian detour plan, lol. Bet they need a consultant to put that together.
I made a video venting about the last sidewalk I had to build in the COV but this is getting to be next level 🙂
I wouldn’t be surprised if you need to install a squirrel crossing apparatus in the next few years, with a soil sample testing report for the places you need to drill anchors for the squirrel crossing apparatus.
Affordable house is one huge joke being played on everyone.
“For the excavation of the sidewalk/pathway, you’ll need a Contractor’s Permit. You may also need a driveway crossing permit…….
…….we have your Street Occupancy Application here under xxxxx. We’ll need a pedestrian detour plan along with this application. You may detour pedestrians around the area using xxxxx, and xxxxxx St sidewalks. There will need to be MoTI standard signage. Their guide, TMM 2020, has been attached for reference.
If you require street occupancy for excavation vehicles and dump trucks, we will also need an ingress/egress TMP. This will also require a separate Street Occupancy application………….
Once the sidewalk detour plans have been made simply attach them to xxxx via your MyCity account. Alongside this, email xxxxxxx as she is our new Transportation Coordinator…….”
ya on the westshore, lol where is max?
Once the millennials have found their homes and there’s no more golden ticket from foreigners, the next housing price boom will be the millennials kids? 15-20 yrs of price stability? We’ll see.
I would say it’s similar to stagflation in housing. What we’re experiencing in my opinion is worse than a recession because it is more challenging economic condition to manage. The governments can push and pull all the monetary and fiscal levers but it isn’t amounting to the desired effect.
The last time we had stagflation and I’m not saying we are, it lasted a decade and led to wage and price controls.
The pro side of course is past decisions have made a lot of us equity millionaires. I don’t think any government wants to rock that boat until after an election.
Is this the bottom? If so then I suspect first time buyers are going to need more financial assistance from their parents not only to buy a property but to pay their children’s rent and/or other living expenses.
What I would like to know is how the parents are financing the “gifts”. Is it with the parent’s savings or using their home equity?
A good take on the market , no relief in sight for prices . This is stacking up to be the bottom imo
I think you said in an earlier post that late peaking listings is an indication of a cooling market. With listings peaking earlier this year, is it an indication of a heating up market? Or are we maybe right in the middle.