Rates are dropping, but don’t get too excited
Bond yields and central bank rates are coming down, and with it both fixed and variable mortgage rates. With middling economic data, inflation back to 2% for the first time since the start of 2021, and the US central bank dropping by 0.5% last week, all indicators are that rates will continue to come down in the future. That, along with flat prices and rising incomes improves housing affordability, and though affordability levels are still poor overall, we may be on track for better affordability this fall than we’ve seen in three years.
Note: September median as of Sept 15
We know that buyers have been sidelined by higher rates, and dropping rates should bring more sales to the market. The real estate industry is getting excited and hoping that more sales will also revive prices. And they may, but it’s worth remembering that only newcomers to Victoria, investors, and first time buyers are the demand that tightens markets. More move-up buyers only shift demand around, so sales could well increase without changing the market balance much. It’s also instructive to look at our last three housing corrections to see what happened to rates in that time. Did dropping rates cause prices to rise? Not really.
- In 1981, rates dropped from 20% to 10% but prices dropped around 30%
- In 1994, rates dropped from 9% to 5% but prices were flat for 8 years
- In 2008, rates dropped from 5% to 2.5% but prices were flat for 6 years.
Why? Fundamentally because the economy was poor or mediocre in all of those periods.
- In the 80s unemployment reached 15% by 1984
- In 1994, unemployment was elevated at around 9% in subsequent years and population growth slowed
- In 2008, the great financial crisis increased unemployment from 5% to 8%.
Unemployment is rising in Canada, and outside of COVID times, at 6.2% it’s higher than it has been since 2017. Rates are important, but people having jobs is even more important. The wildcard in all this is what happens to unemployment as the federal government starts to unwind the use of temporary foreign workers and international students in the labour market. That should dampen any increase to the unemployment rate, but likely affects youth and entry-level jobs more than the type of jobs that support home buyers. Curious though is the fact that Victoria unemployment has been bucking the national and provincial trends in recent months. I’m not super confident in this data (CMA-level labour force data seems pretty noisy), but right now employment in Victoria looks surprisingly strong.
Either way, another leg up in prices this soon into a correction would be quite unusual. In the 80s, house prices didn’t regain their previous peak until 7 or 8 years later. In the 90s – though declines were much less – it took a similar amount of time before the next leg up. After the 2010 peak it only took 5 years, but that’s still twice the amount of time that has elapsed in our current correction. In the past, we also didn’t get sustained market recovery until affordability had improved substantially, and we’re not there yet either.
However one thing to note is that in all those corrections, it was safe to buy only about 12-24 months after peak prices. Even after the crash of 1981, price declines happened quickly, then traded roughly sideways for a few years before starting to rise again. Many things are different now, and there are good reasons to believe houses will do better than condos, but despite lower rates I’m sticking with my baseline forecast that prices will trade sideways for some time to come.
Also the weekly numbers.
| September 2024 |
Sept
2023
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 111 | 258 | 392 | 493 | |
| New Listings | 391 | 809 | 1172 | 1297 | |
| Active Listings | 3198 | 3309 | 3398 | 2699 | |
| Sales to New Listings | 28% | 32% | 33% | 38% | |
| Sales YoY Change | -6% | +9% | +7% | +20% | |
| New Lists YoY Change | +18% | +17% | +20% | +12% | |
| Inventory YoY Change | +26% | +26% | +28% | +17% | |
| Months of Inventory | 5.5 | ||||
Increased activity on both the new list and the sales side is continuing. While sales are running 7% above last year’s rate, new lists are ahead by 20% so overall conditions are weaker both on the ground (sales to new list ratio) and in terms of months of inventory with 28% more inventory than this time a year ago. Sales activity is just as good as it was before, but the little market rally we saw in August has been neutralized by higher rates of new listings.
Less than 5% of properties are going over ask, and this has been pretty consistently below the year ago levels this year (again, outside of the increases in August).
Last week I said election silly season is upon us, and sure enough your money is being thrown back at you with giveaways. The NDP have partnered with the Musqueam, Squamish , and Tsleil-Waututh First Nations to subsidize the purchase of newly built leasehold properties on the Heather Lands in Vancouver. The province is promising to pay 40% of the purchase price of 2600 units, which means that buyers will be able to effectively pay 60% of market value for a home with the rest to be repaid on resale. First time buyers will be targeted, with qualification criteria around income and wealth. Apparently they will extend $670 million worth of financing, with promises to scale it up to other sites in the future. Total budget impact isn’t clear yet, but generally would consist of the difference of the cost of financing for the province compared to what the buyers will be paying (if anything). Not to be outdone, the BC Conservatives have launched the Rustad Rebate, which gives a tax credit to everyone worth 5.06% of up to $3000 in monthly rent or mortgage interest costs (so up to $1821/year). Not all the details are available, but they estimate the 2026 cost to be $900M (when the credit is for $2000/month) so presumably the total cost when phased in will be $1.2B/year.
I’ve long been critical of the NDP’s “build homes for the middle class” plan. When we’re already failing to build homes for lower income folks, what chance do we have to build homes for the middle class which is exponentially larger? If we don’t fix the market so it serves the middle class, we are screwed. We cannot possibly subsidize our way out of this mess, there simply isn’t enough money. That said, with presales in serious trouble and many projects at risk, at least this Heather Lands subsidy could help get some homes built in a central location in Vancouver. It’s expensive and it certainly won’t scale to solve our housing shortage, but because it applies to new builds, any subsidized demand will be absorbed by the new supply. The BC Conservative plan is a lot more expensive and doesn’t get us more homes. It’s a tax cut (nothing wrong with that and those are always popular) but it comes with huge administrative burden to verify housing costs for everyone in the province and some very weird distributional impacts. The wealthiest or most leveraged households will get bigger rebates, and the ongoing costs are high. More demand with no consideration of supply means prices and rents get pushed up. Running on lower taxes is a solid conservative position, but as housing policy this one sucks.
So we’re not off to a great start on housing policies. Stay tuned for a full review of the housing platforms when they are released.
My VGRO never makes a mess.
Also new post: https://househuntvictoria.ca/2024/10/01/september-market-sets-up-for-fall-outperformance
Saanich landlord out $33,000 in unpaid rent, clean-up and repairs from tenant
https://cheknews.ca/saanich-landlord-out-33000-in-unpaid-rent-clean-up-and-repairs-from-tenant-1217206/
Yeah, we let them die in the streets.
Canada does have a way of treating people – whether present in countries with or without addiction problems. There are other countries where culturally families stick together and live together intergenerationally more than we do in Canada. And also places where open drug use would never occur and drugs would never be legalized or de criminalized. Of course Canada has its own way of treating people. So the solution will have to match with our culture. Yes, in some places I’m sure drug addicts are just throw away. We don’t do that here. Personally I wish that we were more like cultures where families stick together.
So Canada has a special way of treating “people” that’s not present in countries without addiction problems?
Because they are people.
Why exactly does this need to be done in the most ethical way possible?
Exactly hence I think there is a potential opportunity long-term at Legato and 989 Johnson with the development of Harris Green especially with prices compressed and rates coming down. Don’t buy that B.S. from the appraiser who thinks RE prices are reflected instantly whenever a catalyst appears, out of all the bad takes this appraiser had initiated, this has got to be the absolute worst one. Zero understanding of market fundamentals….
I haven’t looked at the numbers closely but Bear Mountain One alone had 14 condos listed in September.
Now there are 26 condos listed in the building (not including what developer has available off MLS as well) and there was not one sale in September. Not a great situation.
All condos?
Marko the sniper forecaster!
Second highest on record after 2008, 1443 Sept new lists that year.
September sales: 571 (up 16% from last September)
New lists: 1441 (up 11%)
Inventory: 3361 (up 25%)
Must be pretty bad in the other cities.
Good news! Even with the Pandora mess….
https://www.timescolonist.com/business/victoria-the-best-small-city-in-the-world-says-travel-magazine-9594729
“Victoria the best small city in the world, says travel magazine
The travel and lifestyle magazine has once again placed Victoria atop its annual Readers’ Choice Awards.”
Condé Nast, which publishes numerous magazines, including Vogue, GQ and The New Yorker, said its Traveller magazine reaches more than 20 million print and web readers every month and more than 40 million people on its social media channels.
This year more than 575,000 readers participated in the Readers’ Choice Awards by submitting ratings about their travel experiences on a five-point scale. Nursey said the results suggest Victoria is able to attract a more affluent traveller, which he said is reflected in the hotel rates the city has seen of late.
According to Chemistry Consulting’s most recent figures, the average daily room rate through the first seven months of this year was $255.21, up from $240.48 last year, while revenue per available room was $188.87, up from $167.77 at the same time last year.
The most recent numbers available also note the Victoria International Airport has seen a nine per cent increase in total passengers through its gates compared with last year, vehicle counts on B.C. Ferries are up 2.64 per cent and the Victoria Conference Centre has seen a 26 per cent increase in the number of delegate days.
———-.>>.>Nursey said Victoria has gone from middle of the pack in terms of average daily room rate to third behind Vancouver and Toronto.<,<——
Pandora will never be resolved. The people will always go back. Most homeless want/need a stable place, unfortunately there are also a number that cannot deal with living in BC Housing (or similar) independent indoor living arrangements. These folks will end up back on the street. Or, institutionalized I guess (though that is an entirely different can of worms since it will have to be done in the most ethical way possible – and I’m not sure that we know how to do that).
Exactly, I would bet money that there wasn’t a single buyer that saw or heard of the clean-up on Pandora and rushed to buy in the vicinity. If, and that is a big if, Pandora is sorted out it was take years for it to be reflected in market value fully.
Decision on controversial Gordon Head development postponed
The project’s height, however, does not conform to the OCP, which calls for buildings of up to only three storeys in the neighbourhood.
https://www.timescolonist.com/local-news/decision-on-controversial-gordon-head-development-postponed-9584094
Leo, you’re delivering good news , I thought I read prices where up 15 percent , drats . I would have been dancing in the street lol
Pretty strong end to the month. Final numbers out tomorrow but sales look to be about 15% higher than last September. New lists also up, perhaps +11% or so.
Didn’t know price discovery in residential RE is as fast as equities… Another reason no one should ever assume an appraiser knows much about anything RE related.
Why working from home may not be good for investors and banks. Or why the push to have employees behind a desk rather than in front of a lap top at home.
https://youtu.be/00Rr5ux6sxU?si=uhMuetGvYpOFEFxz
That would be like buying a stock a week after the merger was announced. If you thought that was likely to happen then you should have bought months before. Too late now.
The condos on Johnson and Yates will be the biggest beneficiaries. Could be good buying opportunity right now for 989 Johnson, legato, Era, Yates on Yates etc.
It’s quite the gamble. City council and their like minded so called non-profits have built quite an industry downtown on keeping the crisis and funds flowing so that non-profit staff and boards can keep their 150k a year jobs to support the crisis they built. Not sure how much money someone will want to risk buying into that area. It’s probably no coincidence that all this action is happening around the provincial election. See how long the clean up effort lasts after the election.
“ We’ve been assured by BC Housing that they have the space for the bulk if not all of the folks there right now,” said Alto.”
Deja vu all over again.
What’s the plan for next 1000 homeless to arrive and for those who can’t hack the rules and structure of their new housing?
The condos on Johnson and Yates will be the biggest beneficiaries. Could be good buying opportunity right now for 989 Johnson, legato, Era, Yates on Yates etc.
>>> Sections of Pandora sidewalks fenced off, revitalization underway
https://cheknews.ca/sections-of-pandora-sidewalks-fenced-off-revitalization-underway-1216576/
——————====
That sounds encouraging, and so it looks promising for no more big homeless tent problem on Pandora by spring. Wouldn’t that be nice!
“ Alto says over the next weeks and months the fencing will expand, until there’s no more tents on Pandora.
“We’ve been assured by BC Housing that they have the space for the bulk if not all of the folks there right now,” said Alto.
With housing assured, then cleanup, the mayor is looking towards a rebirth of the boulevard.”
Sections of Pandora sidewalks fenced off, revitalization underway
https://cheknews.ca/sections-of-pandora-sidewalks-fenced-off-revitalization-underway-1216576/
Almost reads like a separation. One thing I’ve learned, “written agreement” and have your interest registered on title. OK, maybe that’s two things.
https://vancouversun.com/business/real-estate/bc-man-lawsuit-house-bought-with-friend
Many countries do not have buyer’s agents. Instead the purchaser’s attorney, for a flat fee ,writes up the offer and they would hire a building inspector and/or appraiser to assist in their client’s decision making process.
The Competition Bureau watchdog is investigating if rules by Canada’s largest realtor industry group are pressuring home sellers to pay higher commissions to their real estate agents.
Court filings by the Competition Bureau launched an investigation in June into “anti-competitive” rules and practices by the Canadian Real Estate Association (CREA)
1)-Buyer Broker Commission and;
2)-Cooperation Policy that may dis-advantage non-MLS listing services.
The commissioner has not made any findings of wrongdoing against CREA at this time.
“Tough love” policy to ban homeless people from public spaces? Anytime a muni has tried to ban sheltering in public it has been shot down in the courts – any policy promoting something similar would be thrown out. Addressing the main causal factor of homelessness, which is affordability of housing, is the most effective policy.
As long as the cameras are outdoors and they’re disclosed I don’t care. I worry about it more when travelling outside Canada (depending on where I am).
Completely acceptable and likely wise to have security cameras outside when renting your home to strangers. Pretty common these days everywhere – hotels have them as well on exteriors and in public places inside. Doorbell cameras are standard these days for residences.
AIrbnb does not permit interior cameras and exterior cameras have to be disclosed. It is also a criminal offence to surveil indoor spaces where there is a reasonable expectation of privacy.
I spend zero time worrying about this and use vacation rentals frequently.
You don’t have to guess, hidden cameras in airbnbs are a well documented scandal. For example:
https://www.youtube.com/watch?v=pqQJ2FxB988
I was at one airbnb where the owner had installed cameras in the yards to keep tabs on the guests. I wouldn’t doubt that some owners have installed hidden cameras inside their residences for the same reason. A very stupid thing to do.
That’s a case of hate me now, but love me later.
Klahanie is a rocky area with steep slopes where there is limited space for a secondary septic to operate adequately. If the septic fails then they could have a 3,500 square foot second home that would not be habitable. Then it becomes a law suit as the home owner or future home owner would be looking for some one else to blame.
That’s a risk I wouldn’t take.
I believe Bill44 excludes properties not on city water or sewer, maybe for the same reason.
And this is news?
The reason is to prevent high density that lead to poor soil absorption rate and leachate.
And, if we didn’t have this law, everyone would still be on septic.
Langford narrowly rejects family’s request to subdivide property for grandparents
https://www.timescolonist.com/local-news/langford-narrowly-rejects-familys-request-to-subdivide-property-for-grandparents-9583117
Thanks Marko – I thought it was real. Pretty funny though in any case.
Funny how many Airbnb hosts have the exact same bookcase -> https://www.youtube.com/shorts/RGShHLHcge8
Airbnb problems: https://www.youtube.com/watch?v=9j0DzTUFmm8
Interesting thought Patrick. Although the tough love enforcement part has a lot of dark undertones. From incarceration for being poor to a long drive out into the bush and letting them out.
Just remember election campaigns have really nothing to do with actual policy. It’s all politics with everything hatched out on the back of a napkin the night before depending on what they believe will move a poll number. Neither party differs on this approach. No need to put any thought into what they are promising because it will not reflect in government beyond maybe a general theme or naming of a program to pretend it was tied to a campaign promise whether it’s reflective of the promise or not.
I would vote for any party that would use some “tough love” to ban (and enforce!) homeless living in public areas in the city. Lots of cities ban this outright, especially in Europe. And talking to some people in Europe, they are aware of the homeless in Seattle and Vancouver, and they are astonished that we allow it to occur. Because they definitely don’t allow it period.
And of course this would go along with having some accommodations for them available. But if they still won’t accept living in these accommodations, they shouldn’t be permitted to live in the city as they are now.
Near the end of the month and time to review rentals in the downtown core.
The average rental rate is $2,347 for all rentals which there are 73 available on Craigslist in the half kilometer radius of downtown.
The lowest rent is for a studio at 840 Fort Street at $1,600 per month -no parking
Least expensive one-bedroom is $1,700 a month for 590 square feet at 845 Yates. Most average $2,187 per month.
Least expensive two-bedroom is in 845 yates at $1,883 per month or $3.37 per square foot. Most two-bedrooms start at $2,395 per month and average at $2,881 per month.
The highest two-bedroom is $4,500 per month for a 1,200 square feet suite at the Falls or $3.75 a square foot.
Typically a two-bedroom will rent for 30 to 40 percent more than a one-bedroom. If you need to rent out that second bedroom to make ends meet that would be $650 to $850 for the room.
If you want to rent an entire house in Saanich then rents start at $3,500 a month. Lots of them for rent. Highest rent is $7,500 for a five-bedroom 5,000 square feet home on one-acre in Uplands with water views. Rent includes a gardener.
Agreed. Hopefully they will clarify it.
Maybe they’d still be letting the munis opt out of the multi-unit zoning, but the munis would still be subject to the requirements for faster decisions on zoning and approvals. But if that’s it, they should say that.
10 years is long. What if the person wants to sell?
A program that I really like are the grants and rebates for solar panels. If Rustad wants an incentive for people building rental ADUs then a program similar to the above could make sense for development charges etc.. The only stipulation would be that the ADU has to be used as a month to month rental continuously for ten years after completion.
Actual wording from Conservative Party website. Something is not right here with the wording. They can’t possibly mean that an applicant must be granted any rezoning they want within 6 months. Perhaps the intent is to require a yes or no within 6 months. But it would be nice if they had a proofreader.
Would that be the same Rustad who said this a week ago? Do we get something different next week?
https://thetyee.ca/News/2024/09/20/Rustad-Zoning-Reforms-Rent-Control/
fees for a missing middle COV project – “$57,000 and for the sewer and drain $62,000.”
Sidekick , kinda what I remember, we did a townhouse project dealt with a company in surrey , teal industries I think , used them on 2 projects really only because we didn’t have a framing crew . Still a lot of back framing , we weren’t super sold on the idea .
How does insolvency work on First Nations leased land? Would it just be the lease term before the courts and the structure that sits on it? Are there different rules? Could be interesting questions for financing such developments in the future to see what money can be recovered.
Insulated, sheathed, barrier both sides, rainscreen, sometimes cladding. Windows (usually not doors). Once the foundation exists, you’re typically to lockup and dry/warm less than a week. But, there are additional costs for transport and crane, plus your site must have access. For example, http://www.bcpassivehouse.com
If Rustad wants to make politicians accountable then he should start with himself for making campaign promises that he won’t keep.
https://x.com/RobShaw_BC/status/1839758422830657824
I have used on 2 projects prefab panels , which consisted of sheathing and 2x4s . Windows and doors cut and a roof truss package . Wasn’t any cheaper than framing on site , and u still end up with having to do f.o.s anyway . I guess what I’m missing is times have changed and now the panels come , insulated , wired , plumbed , drywalled. Inspected.
Better consistency in the quality of the end product too, taking away the gamble on having a bad stick frame contractor. As they are built year round in a factory there is no down time due to weather or waiting for materials, labor, and city building inspectors to become available. It takes months to get plans approved, city inspections, excavate the site, install drainage, underground services, etc. Pouring a foundation is just part of getting the site prepared for the home to be delivered. All of which can be done while the home is being built in the factory.
Reading the comments on this blog, this seems to be the major complaints associated with building traditional stick frame housing.
As for costs, these companies are in business to make a profit so it isn’t likely that there will be a significant difference in costs. It’s not necessary for these companies to hire subcontractors at $90 an hour instead they hire employees at a third or half the cost. If they sold the units at significantly less than stick frame then they would just be leaving money on the table. The advantage is time, consistency and in some cases a better built home or ADU. And that means you can be earning rental income sooner.
it only takes 2 weeks to do a strip footing and icf foundation with one guy not months. I have done many of them solo in less than that. The problem with prefab is in a lot of cases you are trying to get one that fits the site and the maximum floor area ratio. Depending on where you are if you want to max out the size then you are doing custom. I have designed 3 ADUs in the past 6 months all very different sizes and shapes to meet the requirements set out in the zoning that dictate the allowable size based on lot size. If the government wants to do kits or predesigns they will need to work on municipalities to do away with some of the red tape around size height and shape. It’s almost like they dont reeaaaally want them lol.
Better product for the same cost. Definitely time savings (with proper planning). Problem for residential is the big prefab players target the big buildings (CLT, for example).
I would love to order up some 3-ply CNC cut (very high precision) CLTs, but there just isn’t the availability or the budget for typical residential. If the government were to invest more in this (https://www.unbc.ca/engineering/wood-innovation-research-laboratory), maybe it would be more available/cost-effective.
Patrick, I was specifically writing about the sales activity in the last week to address the comments of how the market has been improving recently. In the last week the median sales to assessment ratio for condos is 98%. I also explained that there can be a larger error using one-week of sales due to a small sample size. Leo is using month to month data which does not include September.
Both Leo and I are measuring the market in the same way but for different dates. Does that clear up any confusion?
To build pre-fab housing it’s necessary to build a factory first which will cost millions. Not something that is likely to happen unless the company has secure orders for units. This is where the government can assist in financing the start up costs and promote prefabs as an alternative to stick frame construction in order to bring down the costs. Ideally one would like those factories as close to where the building sites are located to reduce transportation costs.
For ADUs the costs can be further reduced by allowing post on beam with concrete piers to eliminate or reduce the need for poured concrete foundations.
As ADU’s are built now it takes months and months to build the foundation and then construct the building. With prefab housing the site preparation work can be done while the home is built in the factory reducing the time to build houses or ADUs. Lower construction times means the ADU can be finished sooner and the home owner can be collecting rents sooner.
I have done site built and factory package . No real cost savings or time for what it’s worth . Unless they allow plug and play it’s more gibberish by government or advocates with zero construction experience spewing b.s . Companies like Lindal have been around a long time , make a great product but make no inroads on the market place
Seems like evert day there is an article re a project in financial problems – https://www.timescolonist.com/local-news/first-nation-development-in-east-sooke-in-receivership-after-chronic-money-woes-9579735
We should be thinking of alternatives to concrete slabs for houses, driveways, and patios. When it comes to granny suites/accessory dwelling units those could be built on concrete piers instead of a poured concrete foundation.
One of the civil engineers working on one of these missing middle projects noted more civil paperwork required by COV than what is required for a highway overpass
Well luckily NDP is going to pre-approve factory built homes so that should reduce the wait from 5-6 years down to only a few months, right?
Three different builders now referring to COV Missing Middle permitting process as “living hell.” 🙂 which I kind of anticipated the day this policy was announced. It will be 5 years +/- before the first owner or tenant moves into one of these six-plexes. Apparently, we are in a housing crisis.
https://globalnews.ca/news/10778843/david-eby-ndp-fast-track-pre-fabricated-homes/
Talking to a missing middle builder this morning and with the permit process drawing out an insane amount of time he is now starting to get notifications from contractors/suppliers that they can no longer honor their previous quotes they gave him – for example, concrete will be 5% more now versus if he had obtained a permit in a reasonable amount of time and already started construction.
Also, his tenants moved out of the teardown and now there are squatters in the backyard so getting emails complaints from neighbours and he is reply with “please email the planning department, they won’t issue the permit so I can start construction” 🙂
Also local Victoria architect discusses increased costs due to new building code coming -> https://www.youtube.com/watch?v=80ez06JJP3M
20% increase in structure costs alone.
Whatever , there’s lotsa, lotsa money out there . A sniff of an upward market and things can heat up quickly . Thing to keep is money in the bank is dead money with dwindling returns as rates come down
When it comes to houses in the core, my opinion is that will take more than a decline in interest rates for the market to rebound. Vendors expectations are still high as the gap between ask and sale is still wide. Half the sales in the last week were at or below assessed value while new listings in the same period were 6 percent over assessed value. The days-on-market (DoM) for houses has only marginally declined from 39 to 36. It’s unlikely that we will see house prices increase in the core until the DoM declines and is sustained for several months under 30 days.
The error for houses is greater than condominiums as there is greater variety in houses than condominiums that are more standardized in size, age, and condition. Vendors expectations have to come down along with interest rates.
Half of all condominiums that sold in the core in the last week sold under assessed value. What is interesting is that half of the condos listed in that same time period were also listed under assessed value.
The conclusion that I’m jumping to, is that the increase in activity in the market for condos in the core is due to listing agents being able to bring down vendor’s expectations. Condo sale prices haven’t changed significantly but the gap between list and sale price has narrowed as sellers are more realistic in their asking price. And that shows up in a slight decline in the days-on-market indicator.
But this is only one-week and the error of jumping to such a conclusion is greater than using data over a month or 90 days.
Won’t be long before they’re in the 3’s…
Since we’re making predictions, I predict a strong spring market
Not surprising with rates in the low 4s
Marko , good to hear , bodes well for the economy . Not much good inventory in OB and Fairfield although the one on Lincoln doesn’t look too bad for the money
I am seeing a strong increase in sales pace this week. I think we might clear 570 sales I predicted even with the Monday not being a business day.
Woke up at 4 for this morning’s earthquake. And nothing. What a rip off.
Bill Gates is investing in nuclear power plants.
https://www.pbs.org/newshour/nation/bill-gates-is-breaking-ground-on-a-nuclear-power-plant-in-wyoming
Well, that would be a risk if you’re letting the FastCat and Community Benefits Agreement types being involved in a reactor construction, they do try to model and and bring the failures of the USSR ideology and methods here as much as they can. Come on folks, you can’t compare Soviet reactors to Western ones, even to the old western reactors…lol. Anyways a Canadian innovation of the Slowpoke II was so safe we never brought them into production because we are afraid of our own shadows.
I know the Chernobyl reactor had inherent flaws and modern ones are supposed to be more fail-safe, but everything man-made is subject to potential failure, and here we’re in an earthquake zone. It troubles me that Rustad thinks this is a good idea. I’d rather see us build out our hydro infrastructure, and/or reduce immigration, long before we “have to” go there.
It was Belarus that received the greatest impact from Chernobyl. There’s a lot of disagreement about the total number of premature deaths expected from the disaster, but estimates start at 4,000.
About 70% of the radioactive fallout from the Chernobyl disaster landed in Belarus, heavily contaminating one-fourth of the country, one-fifth of its agricultural land and affecting at least 7 million people. More than 2,000 towns and villages were evacuated, and about a half-million people have been relocated since 1986, according to Chernobyl International, a humanitarian organization with links to the United Nations. The group estimates that Chernobyl costs Belarus 20% of its annual budget.
https://www.usatoday.com/story/news/world/2016/04/17/belarus-border-town-chernobyl-30th-anniversary/82888796/
I will guess zero. Even Chernobyl didn’t cause that many direct deaths. But there was a scenario where it could have made large swathes of Ukraine somewhat uninhabitable.
I just think in BC we are blessed with hydro power and related potential where we could be upgrading power infrastructure along conventional lines.
Quick quiz: without using google, how many radiation related deaths occurred as a result of the Fukushima reactor fiasco in the 2011 Tohoku earthquake? The closest thing we’ve had to a nightmare scenario for a modern reactor.
Marko, what is the average construction cost per square foot for a 3900 sqf house, 2 level, 5 bed, 4 bath, nowadays in Victoria?
Qt, good call , we might just get a full 1 point cut for Christmas. Next years spring market could be an orgy of buyers fighting tooth and nail to get in a home .
Sure did! Low rumble and then creaking/groaning walls. New seismic codes are probably a good idea…
I think price will continue the upward march because more interest rate cuts are coming. Immigration has been tabled to slow down but not a complete stop + income is rising, therefore the demand for housing will continue to rise.
Lot of stories coming out of Kelowna re AirBnbs – https://globalnews.ca/news/10753168/enforcement-short-term-rental-rules-questioned-kelowna/
Have you fixed your rotting fence yet btw?
I’ve said it many times: dude is a money-making MACHINE.
4x if under 30 days, unlimited at over 30 days, no? I can’t do under 30 days due to strata bylaws. I do 30 days a few times a year – vacation and house sitting my parents house when they are away.
Just got an offer from movie industry today for my unit today but not sure it will work on my end.
Sorry, bad wording on my part. You can’t do nightly rentals – what I meant to convey is you can still make good money long term rentals. At the ERA you could do 30 days if principal residence (plus 4x under 30 days per year) and 90 day rentals if non-prinicpal residence.
How many can you do again? 4x at min of 30 days? Or is there an aggregate days cap per year?
You mean for principal residences that are licensed for short-term rentals then?
I wasn’t sure what you meant by you don’t have to do nightly rentals? Presumably you can refuse any STR booking if you are licensed? Do you mean that the Era permits STRs but you can get 30 day bookings? Maybe I’m missing something.
“ Did anyone else feel that earthquake last night? It woke me up!”
Yep. Woke me up too. House did not collapse. All good.
For non-principal residence.
Better to amend Bill 44 to upzoning that expires after a period (eg 2027) so it’s a “use it or lose it” zoning to encourage developers to actually build asap.
I thought it was minimum 90 days now?
During the pandemic, a lot of home owners renovated their homes. That served as a strong basis for home owners not to lower their prices and to hold on to their homes if they are not getting the price they want.
My opinion is that this is only short term. As the renovations age they lose value due to physical depreciation and become dated in appearance. You might get full value for that new kitchen renovation today, but five or ten years from now that kitchen will not command a premium in the market.
The construction industry is still dealing with supply chain issues for concrete and steel. Transportation is an enormous piece of the cost. Contractors are seeing some relief like copper wire and cable, and gypsum products but they are not back to pre-pandemic levels and the wait to deliver the materials to the job site is still long.
The hope is that AI will solve most of these extremely complicated supply chain issues and bring down the cost of materials.
Hate the NDP but canceling Bill 44 is idiotic, imo. Not going to bother to vote. Options are stupid and stupider in no particular order.
Made enough this year after tax to cover my mortgage and strata fees and maintained it as my principal residence.
While I don’t agree with the Airbnb ban definitively helped me out personally. Now I don’t have to compete with all the nightly rentals that had 30 day long stay discount options.
Josh , easy to say the same thing about Trudeau and the left
2 bed/2bath in Vicwest? Damn, $300 a night
People pretending that Poilievre isn’t a completely dismiss-able nut job is concerning.
Well a good start would be simply to eliminate or restrict the current incentive to stay in an underutilized house, namely property tax deferral.
Jim Pattison sure doesn’t need it but I wouldn’t be surprised if he takes it, he used to be known for checking the return slot in payphones for change.
Funny thing , not hearing any complaints from developers about land cost . Appears projects are being shelved because it’s just too expensive to build . Not sure how your going to bring down labour and material costs and we all know governments need theyre money
Did anyone else feel that earthquake last night? It woke me up!
Yup, it was a sale at the Era. You don’t even have to do nightly rentals. I have a booking in March on my personal place for 30 days – $9,000.
$550k and my best guess is developer cost on that unit right now would be $700k +/- (land, soft+hard costs, carrying costs, etc.)
Times Colonist discussing how end-users are against short term rentals in their building.
https://www.timescolonist.com/local-news/residents-battle-illegal-short-term-rentals-in-their-ghost-hotel-building-9313480
Hmmmm, interesting perspective I have to give some more thought. For multi-family, at least in Victoria, land is a very small component of the overall cost. For example, a building on the Westshore (Langford/Colwood) may cost $25 million to build; however, the land can be acquired for $2 +/- million. The various development fees on such a project would be more than half the cost of the land.
and what about a bedroom tax then? If you have a single 80 year old living in a 5 bedroom house in Broadmead piling up TAX FREE capital gains for the estate why not tax him or her to reduce incentive to stay in an underutilized house?
One concept I am warming up to more and more is if we increase taxation the government will just figure out how to blow it all. You increase municipal taxes they just hire more “tree preservation coordinators” and other complete non-sense 6 figure positions. Might as well start a “diversity and inclusion department” with a director, manager, and a bunch of other people. You know things that keep the sewer main functioning under your street.
Answer: BC United (BC Liberals). Too bad the party self-destructed!
Ok so once Airbnb comes back (assuming you are talking about the ERA), this could be a good deal! I think that is a likely scenario in the next 3 years.
The best scenario in my opinion would be flat prices for the next 5 to 10 years, I just don’t think it will actually happen primarily due to government bureaucracy which will restrict supply.
Now would be a great time for all levels of government to due absolutely everything they can (cut bureaucracy, cut taxes on constructions, cut development fees, etc.) to push housing starts in Canada to 300k/year so we can keep prices stable/suppressed with supply.
My prediction is prices flatline +/- for the next 6 to 36 months while construction slows and then prices explode again as there fundamentally simply isn’t enough supply coming to market.
I know everyone probably think I am a “pumper” but I honestly believe that it would be wise if one can buy in the next 12 months as we aren’t solving any fundamental housing problems. The issues with housing for the time being are being masked by high interest rates and a potential recession next year but there is a likelihood that both of those will pass sooner or later and we are still going to be facing the same fundamental housing problems.
Historically it has been the condo market that falters first in a softening market. My focus is on the downtown condo market as I feel that this is where most investors have purchased in the past. What I wrote may not relate to other neighborhoods where most purchases were made by end-users.
End-users are more likely to hold real estate for a long-term. They are also more likely to buy properties that meets their long term needs rather than speculation for price and rental growth.
It appears government will do everything it can in its power to prop up real estate.
Very location specific. Downtown is unfortunately taking a beating. The spread between downtown and Vic West is absolutely insane.
A 1 bed 1 bath with parking in a 20 year old building in Vic West sold yesterday for $540k.
A 2 bed 2 bath with parking corner unit in a 9 year old building downtown sold yesterday for $550k.
I think there is upside downtown right now, if the homelessness issues can be addressed in the next 5 to 10 years.
Condos selling downtown right now are below replacement cost. I don’t think we will see a pre-sale launch of many years to come. It is going to be all CMHC purpose built rentals.
It’s a tough election for me. I’m fiscally conservative and socially more liberal – where is my party?
I’d be inclined to vote Conservative just because I can’t abide the deficits. But some of these Rustad moves/comments seem kind of uncomfortably “out there” to me, whether it’s climate change stuff, this “Rustad rebate” thing, or the comments about bringing nuclear power to BC (which I’m opposed to). Other things I totally agree with.
So it’s tough for me. But it’s not possible to agree with everything – that’s what’s kept me from voting for more than one election now.
LOL so basically go nuts buying this on credit after you get the original mortgage.
LMAO You should… the FOMO is generated by lowering mortgage rates, changes in amortization and the cap on insured mortgages. The headwind is lower immigration, unemployment and the overall economy. Go sign up for an MLS portal and you can see what places are selling for in real time.
https://victoria.citified.ca/news/soaring-costs-force-already-underway-hotel-project-in-victorias-old-town-to-seek-more-height-and-density/
@whateveriwanttocallmyself – those are some wild numbers considering the previous few years markets of at or above ask all the time. We just purchased a 2 bed 2 bath unit in a concrete building near the Jubilee hospital for near assessment (3% below) a few months ago and felt it was a good deal given the renovations and whatnot, but it appears waiting a few months would have been even better!
Condo market seems to have really fallen out, but it’s usually the condos that go first, if at all, right?
Patrick, lots of shite is being dropped which is a good thing . I’m hopeful the str and zoning changes will hit the garbage can as soon as the ndp are gone
Looking at the pending sales of downtown condos so far this week. All sold below their assessed value. One as low as 76% of assessed value.
Some notable downtown pending and completed sales this week were:
728 yates originally listed at $739,000 and sold for $550,000 (-26%)
888 Government originally listed at $3,150,000 and sold for $2,600,000 (-17%)
960 Yates original ask at $869,000 and sold for $750,000 (-14%)
528 Pandora, original ask at $699,000 – sold $485,000 (-31%)
Some good news for homeowners with mortgages, from OFSI. Effective Nov. 21, 2024, No need to requalify via stress test when renewing mortgage with a different bank.
Currently, when renewing your mortgage, if you stick with the same bank you don’t need to requalify with stress test, but if you shop around to a different bank, you need to requalify with stress test. The good news is that effective Nov. 21, you don’t need to requalify via stress test even if you switch banks. So this means you can shop around for lower rates upon renewal. You still need to qualify via income, just not a stress test. This is a small improvement to affordability for existing homeowners who shop around for lower rates.
https://twitter.com/ronmortgageguy/status/1839038848560476598
I think it’s time to bow out from this site that has evolved into side show of people like thrusty, deryk and patrick among others trying to generate FOMO. It’s time for my 1st workout of the day then onto my daily gratitude practice and enjoying the rest of summer in the greatest place to live in Canada.
Deryk, drop the passive aggressive posture, just because I feel house prices will be flat and provide known information on unattractuve places to live doesn’t make me a glass half full kinda guy. I think it would be wonderful if home prices continued to fall accross Canada so that young people can afford to buy a place to live rather than have to compete with boomer amateur real esate estate investors to trying to squeeze out first time homebuyers and drive up rents for low income families.
Deryk, I totally agree , and I would not ignore what is going on in real estate today . The times they are changing and it seems quickly too
That 5 year yield just won’t move down past 2.7%, actually has gone back up a bit.
Higher prices lead to more new construction, improving affordability. Lower prices lead to lower new construction, worsening affordability.
Best strategy is measures that improve affordability directly (higher incomes, lower taxes, lower interest rates). That improves affordability for all, and incentivizes more new home construction.
I find it very interesting to observe how some people see the glass as half full while others see the glass as half empty.
It’s the same glass. The same amount of water.
One point of view opens doors and the other closes doors.
I would question whether any of those factors improve affordability in themselves. They would put more money in the pockets of potential buyers (from income or borrowing), but without increases in supply, prices will just get bid up to the same levels of (un)affordability.
Not all measures to improve affordability are opposed by existing owners.
Some improvements in affordability can help existing (and prospective) homeowners, and aren’t opposed by existing owners. For example, these all improve affordability for all.
—— lower interest rates, which lower mortgage, HELOC and tax-deferral interest.
——increases in income .
—— and lower taxes in general,
I’d expect existing homeowners would be opposed to measures like increasing property or other taxes. Those aren’t going to improve affordability anyway.
And we’re back to Moncton again. Whats not to love about a place with awful weather, a high crime rate and some of the lowest household incomes and career prospects in Canada. There’s a reason house prices are low in Moncton at least until out of province buyers drive up home prices and rents for local residents.
From our point of view, Moncton’s property taxes are somewhat high, but the city is still attracting more people than ever …for a number of reasons.
Our investments in Moncton, have more than doubled in value in the past five to six years….. with lot’s of room for further increases in our opinion. (I know….Strange as it is…..some people will still argue that doubling one’s investments is not enough)
Rents have also increased significantly in Moncton during that time.
We love Moncton.
We also love Victoria.
We also feel there is a better chance of prices doubling in Moncton than prices doubling in Victoria during the next five to six years, especially when we consider the dangers facing Canada and the USA and Europe. (Economy….cost of war etc)
Owners don’t have to worry about “affordability”, it’s never going to happen. Unless Vancouver Island gets invaded by North Korea.
“Patriotz , why wouldn’t someone use their house to fund their retirement, don’t get it”
The point you seem to have missed is that an existing owner who’s counting on every-increasing house prices going forward is going to be opposed to effective measures to improve affordabiity.
“property taxes are going to continue to increase at a minimum of 2x the rate of inflation, this will have a significant impact on affordability in the future.”
No, because prices will adjust downward in response. Remember properties cannot sell for more than someone is wiling and able to pay for them. Check out Moncton.
BC’s low property taxes encourage the use of RE to park money rather then for shelter.
For me, I’ll pass on view royal, Esquimalt and most of Saanich West.
VicRE the core in real estate terms is Victoria; Victoria West; Oak Bay; Esquimalt; View Royal; Saanich East; and Saanich West.
How about Jordan Peterson’s solution to help the homeless.
https://youtu.be/Jk84Woid6kc?si=kbjI7ToUGZrbCeAo
Hearing of some developers in the westshore not paying trades on completed houses recently.
A couple of places to start:
– stop encouraging drug use
– stop bringing in a bajillion immigrants
Neither of those actions would cost anything, they would immediately save money.
Being a public nuisance should be illegal – and is – it just is not enforceable right now for people who are on the streets without another option.
Being addicted should be treated like the health issue it is. Addiction is a disability. So is brain injury and mental illness. People suffering from these conditions need treatment, supportive housing, and, sometimes, institutionalization vs the streets.
My understanding is that some of these other countries that are also liberal democracies (Finland, Denmark, etc…) have much smaller populations in much smaller areas. It’s hard to compare Canada to those places.
And places like Japan, South Korea, the culture is different – families take care of elderly and sick relatives. Here in Canada many of us can’t wait until our kids become independent and we don’t plan on having dependents long term.
I’m curious as to what people think the simple solution is. Is it just build build build? Because I agree that would be great but unfortunately I’ve come to learn here on hhv thanks largely to Marko that even that is complicated because of a bunch of rules that make building difficult. So what is the simple solution? Is it to make being homeless illegal?
It is extremely difficult because we aren’t even trying, and sometimes we are intentionally making it worse.
Lots of countries have much lower homeless rates than Canada, including first-world liberal democracies.
Things are different this time
I have been saying for a number of years that property taxes are going to continue to increase at a minimum of 2x the rate of inflation, this will have a significant impact on affordability in the future. I also think that home prices will be flat for a few years until we get back to the long term trend line and then increase by the historical average of inflation plus 2-3%.
The homeless is a complicated issue. So I thought I would see how the next PM plans to solve the issue.
https://youtu.be/KtNeFo3vvDE?si=rr_85rLm-YTgXPGr
Vicre, it seems to be a different kinda woke . Changing times I’m too old to understand
Yep , they pretty much moved out of the house into their own place in north van . It was a way to get them out of the house too
Lol they are free to sell their home and donate the proceeds if they want. So they both bough their first home at basically 22 years old?
I think ~$1.2M (plus CPP etc.) should be ok for people in their late 60s provided they don’t have a crazy lifestyle and own their principal residence outright.
I don’t think folks realize how much money they will burn through in retirement. When u crunch the numbers and look 10/20 years into the future it’s staggering
Vicre, tough to say , some days I do and other days not so much lol. I have 2 that are 30 and have been homeowners for 7/8 years so maybe that’s enough . And by the way they are woke and strongly believe in equality
Wouldn’t you want to leave that free and clear for your kids? My wife will likely be getting two mortgage free SFH from her parents (she is the only child and they are divorced) provided heir retirement nest egg lasts until they pass.
Patriotz , why wouldn’t someone use their house to fund their retirement, don’t get it
That may be so, but IMHO the real problem is that too many ordinary people are OK with the status quo, or at least are unwilling to make any contribution to improving it. I don’t think anyone actually benefits from the homeless problem. Effective solutions – and there are no cheap solutions – just aren’t vote getters.
Rising housing unaffordability makes homeowners, or a at least a large number of them, feel better off. What % of homeowners are depending on their house to fund their retirement?
Quoting Leo:
“If your takeaway is that all levels of government must be stupid and why don’t they just solve the problem by doing X and Y commonsense thing, then you probably don’t appreciate the complexity of the problem.”
I think most people disagree that “complexity” is the problem. The economic solutions are simply and widely discussed.
This view puts too much faith in taking politicians at their world when they say they are “trying to fix affordability”. Too often this is just a mask for: “we want to pretend to act but have no intention of leading change.”
The problem is entirely political.
And political reason is also simple: Too many people in power benefit from the status quo.
Meanwhile most of those who lose out, even if they represent a popular majority, are underrepresented in political and financial systems.
And the regions that don’t have housing unaffordability are plentiful: they’re just mostly located in conservative regions and so it’s easy to ignore those examples as being due to “undesirable locations to live”.
I suggest new strict provincial laws against living on the streets …” This sounds to me like a return of the vagrancy laws. We got rid of those partly because they are status crimes – homeless is something a person is and not something a person does. I am against a return of those laws. But sure if we want to legally require the gov to provide housing – perhaps that would work?
I think there will have to be a variety of solutions because the problem is complex. The people with serious mental health issues or brain injuries have different needs from the person who is an artist living in their van doing odd jobs on the side. One solution will not fit all. I have met a few people who live in RVs – they face precarious situations due to lack of pad fees and there’s also very little public understanding of this lifestyle. But it’s cost effective and offers many benefits (like ability to move, ability to create a place that is truly one’s own, ability to have pets, etc…) We need to think outside the box and try multiple approaches at the same time.
No. Who is suggesting that? And on what grounds? There are none and no-one is suggesting this.
I mean like sleeping on public streets, parks or business entrances with or without a tent with no access to services and causing a public nuisance. Like now.
This was illegal before 2008, but the rules are not enforced because the courts have said they can’t be until there is adequate alternative shelter.
In 2008, the British Columbia Supreme Court ruling (Adams v. Victoria) found that the City of Victoria’s bylaw prohibiting homeless people from sleeping in parks violated their constitutional rights. The court ruled that, when there is not enough adequate housing or shelter space, people have the right to shelter themselves in public spaces.
Other court cases have stopped short of arguing that government must provide adequate housing, but in my view this case should be argued and brought by municipalities against the province.
https://canliiconnects.org/fr/commentaires/36048
Sleeping in an RV overnight somewhere not permitted is enforced on a complaints basis and if you are not causing a nuisance this doesn’t seem like a priority issue to me. I doubt there would be a big uptake on serviced lots for this, but maybe.
I never said that. I said that this particular solution is stupid. We’ve already tried it and seen the results.
Government is not a single person who has a single intelligence. It is an entity that acts through various arms and needs the backing of the will of the people ultimately. This particular situation has not got the coordinated response it needs because of, imo, reasons like unclear jurisdiction.
The solution to street and park encampments is not in supervised drug sites in residential neighbourhoods. However, I can see why Mayor Alto is going for this – the misery on the streets is real and compounding and people are dying and this is something the city can do within its jurisdiction. It is an emergency. However, it truly needs provincially legislated solutions that balance the charter rights of homeless addicts/brain injured/mentally ill people with government’s responsibility to protect public safety.
I would be in favour of pursuing the provincial and federal governments for failing to protect public safety in permitting homeless encampments by failing to mandate shelter and treatment be available and therefore allowing the enforcement of municipal bylaws against loitering/vagrancy and public nuisance.
Dee, I think your bang on . I myself am accepting of it
Maybe the housing crisis and homeless crisis and doctor crisis is just the new normal and steady as it goes is good enough .
Yeah – it is. Things happen in trends – in patterns. So, the attainability of housing has become more difficult as prices soar above incomes. I think there that is our new pattern and that the housing market will roar back sooner than we might think because that is in line with this new pattern of creating greater divisions. It’s like the polarization of political belief. I had someone tell me I’m anti-harm reduction just because I don’t like the vending machines that dispense crack pipes! That is where we are at. Financially we seem committed to watching the tide go out and seeing more and more people stranded on the beach. So prices will go up again.
I really hope I’m wrong!
Maybe the housing crisis and homeless crisis and doctor crisis is just the new normal and steady as it goes is good enough .
I realize this might be the wrong audience but I personally worry that growing wealth has become too easy for those that already have it. And then there’s AI to contend with and the massive efficiency that it must inject into that project too. It’s just really not looking good for most people of more modest means.
I don’t know Thursty. I personally worry that the housing crisis is just a symptom of a much larger problem.
It should seen as evidence that these are extremely difficult problems to solve. If your takeaway is that all levels of government must be stupid and why don’t they just solve the problem by doing X and Y commonsense thing, then you probably don’t appreciate the complexity of the problem. Few countries have a handle on this, and even fewer have a handle on it using what we might consider as democratic liberal approaches.
Dee , how far back do u think this problem goes
Homelessness is going to get worst. Given our cultural/political climate we are far from passing a law making homelessness illegal. So what is an actual real possible solution that might help?
“If the streets were not an option then people would find other solutions on their own if they were capable.” — I don’t understand what this means. Do you mean like couch surfing? Because that is also a form of homelessness. So would that be illegal too?
We are all impatient but only incremental solutions are going to help. This problem has been building for years. There just is no fast fix.
Here’s an example for an incremental solution that would shave away a part of the problem. Some people choose to live in vans. Instead of wishing that there weren’t people that make this choice let’s accept that there are and find places with electricity and water where they can park. Instead, that solution isn’t moral enough (even though people who are so offended at this have probably spent 0 minutes talking to someone who lives in a van to find out if they’d want to move into an apartment if given the chance).
Doesn’t matter who is funding it. It is a dumb solution and horrendous for the neighbourhood – we have seen what happens we don’t have to guess. Mayor Alto indicated the city is funding it because the province is not taking quick enough action. She’s not wrong that the province is not taking action and there is misery on the streets.
I suggest new strict provincial laws against living on the streets and public drug/disorder use.
Not sure what violence has to do with it. Whether or not someone is violent if they are homeless and camping in public spaces they are a nuisance and, in many cases, worse than a nuisance. It should be illegal to do this as it was previously. In order for this to be enforceable the police and social services need to have placement options other than the street. The question is not whether there should be mandatory treatment, but whether it should be legal to live on the streets. It should not. Entrenched homeless encampments are miserable and take up endless resources – and they are everywhere now – small towns to large cities.
Of mandatory drug treatment or mandatory holds for psych/brain disorders? Oversight mechanisms and legal standards. Right now there are all sorts of horrible abuses taking place on the streets against people who are homeless and don’t report or are incapable of reporting. The rate of depredation and crime against homeless people is really high.
It is not about locking people up en masse. There will be some people that are mentally ill and addicted to the point where there is no ability to care for themselves. It will not be the majority of those on the streets. I don’t think we are doing any favours to anyone by having someone who is incompetent to care for themselves on the streets and if it was my family member I would be extremely grateful for an involuntary hold to stabilize and home someone. If the streets were not an option then people would find other solutions on their own if they were capable.
Where is your data for this extra billions? Are you accounting for the costs of managing the current chaos? The police, court, social services and hospital resources that are being expended to no good end? Treatment is medically necessary. Addiction is a crippling disease of the body and mind.
Not sure what Alberta is doing. I am sure what we are doing is not working.
Marko, regarding commissions what percentage of clients ask for a commission discount, I can’t understand why everyone doesn’t ask for that, a few years ago when with moved after interviewing several realtors I asked what discount could I have and as a starting point was offered 1/2 of sell side commission or 25% overalll, we received a bit more of a discount as we were also buying.
Here is a good example, 846 Rogers way has been on sale for like over a year now, they dropped it to 1.5M last year and had no bites so they relisted with a different realtor couple months ago at 1.55M, it just went pending at 1.495, which I am almost certain they would have taken last year. 100 yards down the street, 780 Rogers way went for 1.48 couple around the same time. We are talking about Rogers here, not Broadmead, Henderson, Cordova or Cadboro Bay.
It looks like good quality and well kept family homes in nice ish areas of the core are very desirable, more so than shitter homes in the core with suites which is some what surprising. That indicates to me that there is more demand than supply for that product which corresponds to Marko’s observations of the abundance of local high income clients. Even with $500k down, qualifying for a $1M mortgage with no rental income requires a pretty healthy household Income.
fixed rates are in the low 4’s now, so 800k mortgage ain’t that bad.
People are upset about the facility being there. The fact that the city is funding it doesn’t even crack the top 10 list of concerns. Do you really think they would be fine with it if the province or feds were paying for it? Non-issue.
I mean sounds good in a simplistic way but in reality will take an epic investment into treatment and really grappling with moral issues (should we be forcing people who aren’t violent into treatment? Does it work? How to deal with the inevitable abuses?). Most people are not the clearcut violent criminals that everyone agrees we can lock up. Are the folks that want strict enforcement also willing to spend the extra billions to ensure that everyone can walk into addictions treatment at a whim? I don’t see that at all.
The fact that Alberta has all the same problems that we have despite a totally different approach should make it obvious that there are no easy solutions here.
Totoro, I’m totally in on that , we have less than 1 percent of the population making the other 99 percents lives feel unsafe . Good thing we are not on a boat or we know who would be walking the plank
Dowler Place is a ludicrous non-solution. The whole idea that the City is funding this because the province “is not moving fast enough” is stupid. Instead of funding a drug consumption site take the province to court if it won’t step up otherwise. All the municipalities should get together, get a legal opinion, and do this. Majority of voters would likely support this – unlike Dowler Place.
I suggest new strict provincial laws against living on the streets and public drug/disorder use. This would also require that vagrants who are causing a nuisance be picked up and ALSO provided places they can afford if they can live unsupervised based on social assistance payments that go directly to the facility, and supervised places with treatment if they can’t. No option to wing it on the streets.
Time to stop this nonsense.
Reloading seems to solve it. Thanks.
Marko, keep the good news coming , just got back from Calgary and I didn’t feel like a recession there
The below a million SFH freehold core is starting to pick up pace in terms of sales again. We peaked at 60 active listings in this category last week, down to 52 as of today.
And Toronto prices are higher than Victoria and commissions are 5% so are Toronto agents doing double the work of the Victoria agents?
Plenty of alternative business models out there both sellers and buyers are not adopting unfortunately.
The one type of NIMBYism I understand. There are real negative externalities here. Unfortunately no easy solutions. The people causing the problems don’t go away without the facility, they are just on the street. It feels like when you look at places like Finland which have done a successful housing + safe supply model, it also comes with strict enforcements on public drug use or disorder anywhere in public. We haven’t found the right balance on this.
Rodger, just a hunch , dropping rates , increasing sales year over year is good enough for me .
good question. I believe that if you reload the page they will be in chronological order, but I have noticed that if you just have the page open and it loads new comments automatically (it checks every so often), sometimes when you post it is out of order. Will report.
Let me know if they are out of order even if you reload the page.
Do you have any data supporting this?
In 90% of the US, prices are half or less compared to Victoria. I don’t see Victoria agents doing double the work of an American agent to deserve the same % commissions.
good to see the market firming up . getting some banks predicting prices will rise between 5 and 7 points next year which will be good news for homeowners and the economy. a party change next year should be good for the market
couple of strong sales in the Rogers neighborhood this week at just under $1.5M.
That realtors make 5-figures per RE transaction is just insane, IMO.
Realtors have one of the best scams going.
100% agree that commissions are too high on average; however, many markets in the US where commissions are 6% have also seen crazy levels of appreciation.
With mere postings listing agents aren’t really needed either, but very few people use mere postings to sell their property.
Hey Leo. How come comments are sometimes out of chronological order? Is this a bug you can fix?
Yes.
>>>> I am following this commission thing in the US and shocking how many markets were 6% gross +/-.
Ontario is almost as bad. 5.65% gross commission (2.5% buyer + 2.5% seller)+ 13% HST = 5.65%
https://wowa.ca/calculators/commission-calculator-ontario
Do people think view royal or strawberry vale counts as core?
Summer was ‘most destructive’ season ever with $7 billion in insured losses due to weather
https://financialpost.com/fp-finance/insurance/summer-destructive-insured-losses-weather#:~:text=The%20insurance%20bureau%20said%20July,now%20more%20than%20%247.7%20billion.
City gets an earful over Victoria’s Dowler Place facility
https://www.timescolonist.com/local-news/city-gets-an-earful-over-dowler-place-facility-9568866
Marco, “half that in Victoria”. Property values have doubled or more in 5-7 years and yet Realtors continue with the same 6/3 commission; some commercial realtors think they are worth 5% (of the selling price BTW, not the actual profit). Inflation is not running 15-20% per year, I think it’s time this is restructured.
In reality buyer’s agents are not “needed,” people just do not understand or appreciate the money they are giving away.
“Great post. Big difference in the last 30 years is Vancouver and Victoria are now on the map as highly desirable for Canadians. Not so in the 90s.”
lol, you’re kidding right? 22 million people attended expo 86 in Vancouver .
I also think the absolute number of government and large institutional jobs is much greater then it was in the 1990s; however, the number of SFHs in the core is not increasing.
I am very familiar with a market where there are no buyer’s agent and it is absolute chaos.
I am following this commission thing in the US and shocking how many markets were 6% gross +/-. We are half that in Victoria.
That raises the question of whether buyer’s agents are needed in the first place. I think that if the commissions were unlinked market forces would result in buyer’s agents going away for most buyers to be replaced by notaries or similar. Seller’s agents would have to do more legwork of course, but I don’t see that as s bad thing.
I think it would require reform to allow buyers to add agent commission to their mortgage.
Paying a couple bucks on a trade is very different than finding a spare 5 figures for a commission
Fundamentally we are already doing that. Buying a $1M house and financing it is actually buying a $960k house and $40k in commissions but you get to finance on the total value
I’ve pretty much given up on governments here passing good policies. See the federal government for an example of how to pass policies that mostly work against the long-term interests of Canadians (huge spending during covid causing inflation; massive deficit spending creating a huge deficit and enormous debt interest costs; OAS handouts to top 10%ile earners; 1.2 million per year population growth from low skill temporary workers and students; policies aimed at increasing housing prices like TFHSAs and raising the mortgage insurance threshold.
There are clear cut ways to fix our problems but governments just seem to be stepping on their own toes.
Easiest way to fix housing prices here in BC is to emulate conservative states with affordable housing. Push supply through a combination of sprawl and density by liberalizing zoning.
Tax land at higher rates rather than cutting property taxes like we’ve been doing (property taxes are down about 40% since 2010).
A land value tax at 0.5 or 1% would keep prices from skyrocketing by reducing the incentive for investors and speculators to chase capital gains. Higher carrying costs make real estate less attractive from this perspective.
This is also the best way to implement a wealth tax as land wealth cannot be moved across borders.
Land value taxes should then be paid directly back to tax payers as a way to lower income taxes. Apply every cent of land value tax as a tax credit (instead of a deduction). This benefits low income home owners, pensioners who would otherwise pay tax on their pension income and renters.
I think it’s doubtful any of these steps will be taken here. But there will be jurisdictions
In North America that figure it out.
Watch the exodus from cities and states that can’t figure out fair housing and tax policy to the places that can over the coming decades.
https://x.com/bntly/status/1838426797735555219
If this were to be implemented in Canada.
Would the real estate board display the sale price including or excluding the buyer’s agent fee?
How about the lenders? Would they lend including the buyer’s fee or not?
I would anticipate that the real estate board and lenders would do much the same as they are now doing with the GST. The bank’s are in the business of lending. I wouldn’t expect them to make it more difficult to obtain a mortgage.
Great post. Big difference in the last 30 years is Vancouver and Victoria are now on the map as highly desirable for Canadians. Not so in the 90s.
Great weather, jobs, ocean front living. What’s not to love?
I predict sales and prices will be stable and increasing.
Selling / buying commissions should be disconnected as they are in the stock market. Any linkage is anti-competitive.
The whole Zillow takeover barely put a dent into commissions but this might actually do it.
Still seems backwards. I don’t see anything wrong with seller / seller’s agent agreeing on cooperating commission and displaying it publicly on MLS.
Some fun stories out of the US re cooperating commissions (not longer allowed to be advertised on MLS)
Reddit thread -> https://www.reddit.com/r/realtors/comments/1fog0xp/just_had_my_first_commission_countered_and_boy_oh/
“Just had my first commission countered and boy oh boy…
Discussion
I am in an exclusive buyer representation agreement with my buyers for 3%, box checked that buyers dont have the funds. We asked seller to pay the 3% buyer commission on a full price offer in the $700k range.
Sellers countered back $5,000 commission total to buyer agent.
We walked.
****UPDATE****
The listing agent just called back and they’re going to counter at 2% commission. We will accept.”
Up to 23 re-sale listings at Bear Mountain One, one sale so far. Developer has 29 units left to sell, I believe. Going to be tough clearing that much inventory heading into winter.
Conservative Party website says interest. as pointed out in previous thread.
“Current rate is 5.2%”
Yes but that’s simple interest applied only to the tax payments deferred. The unpaid interest which accumulates every year gets 0%. Over a number of years this can make a considerable difference to the actual interest rate, i.e. the compound rate.
The rebate is not just on interest costs, it is housing costs, ie mortgage and rental costs. So yes, interest is part of a mortgage payment, but it’s not just on interest costs.
Current rate is 5.2% for the regular (senior) deferral and 7.2% for family deferral. Hard to make a case that’s “low-interest”, as the government can borrow money at rates lower than that.
BC already has a province-wide low interest homeowner’s loan program, to wit property tax deferral. I’ve been unable to find out how much this is costing (or not costing) the province. Has anyone seen any numbers?
>>>> You probably don’t all remember this, but Joe Clark’s government had mortgage interest deductibility in its first and only budget in 1979. The budget was defeated and the government lost the following election. The budget also contained a gas tax increase which was unpopular.
———-
Right. And property taxes were to be deductible as well. Of course the big news was the gas tax increase which lost them the election to PET.
Each household helped by this gets $400,000 financing from the government for up to 25 years . If there’s only 1% cost to the government on what they pay vs what they eventually get from the buyer, that’s $4,000 per year and $100,000 for the 25 years. And that’s just to help one lucky lottery winner chosen at random from the middle income people that apply. Of course if it’s a higher differential or compound interest is considered, the true cost could be multiples of $100,000 to help one household. And Eby calls this Heather plan a “remarkable achievement”.
No surprise that this was announced pre-election as it’s not something likely to be scaled up.
You probably don’t all remember this, but Joe Clark’s government had mortgage interest deductibility in its first and only budget in 1979. The budget was defeated and the government lost the following election. The budget also contained a gas tax increase which was unpopular.
Smart. Most housing politics won’t move the market much even if they are implemented. And fixing root causes has impacts 3-20 years out so again not likely to be overly relevant as a basis for making decisions about buying/selling
Right, my mistake. Looks like they haven’t released a costing estimate or impact from higher debt loads
Yes. I don’t expect this rebate to actually happen if they’re elected. Both parties are doing the same thing – just empty promises in hope of getting votes.
The Rustad rebate is vaguely reminiscent of some of Harper’s boutique tax credits for the upper middle class.
Anything said pre-election is almost certain to not materialize in the same form it was promised, politicians will say and do anything to get elected.
I do appreciate the coverage on housing politics, but I’ll be basing my real estate decision making on market data not campaign promises.
“GAS. THROW GAS ON IT.”
He also wants to put the brakes on the fire department, i.e. letting municipalities go back to any development restrictions they want.
“Apparently this will cost $670 million”
That’s the amount of financing from the BC government for the Heather development, which is not a cost. The cost is the difference between what the buyers pay for this financing and what the BC government pays for its borrowing, plus any unrecoverable defaults. BC government says buyers will pay “low interest” but doesn’t give a number.
Holy butts the rustad rebate is stupid.
“Guys what are we going to do about this raging dumpster fire?”
Rustad: “GAS. THROW GAS ON IT.”
killing the middle class yet again.
I would assume there will be very little overhead, as it will just be adding a few lines to the existing T1 tax return. Where people self-declare and input the credit and that’s it. And they can get audited the same way it happens with other items on the BC portion of the federal return.
In other words, they won’t be inane like the NDP did with the spec tax, and require an entirely separate system, with mandatory annual filing by all,mounting liens on your house if you don’t file the form on time etc. Instead of a simple “one-liner” self declaration on the property tax filing.
That makes sense. Another point, they’ve said that no rebate will be given to people with income > $250,000, and I’d expect that also means it will be reduced as incomes approach $250,000, though they haven’t provided details yet. The maximum rebate for year is about $900 so this isn’t going to change anyone’s life.
The administrative overhead on this would be nuts. The old B.C. United plan to just cut provincial income tax to zero under $50k was so much better
New construction isn’t a switch that can be turned on to fix the housing problem. Construction companies for condominiums have been stung over the last few years and are hesitant of venturing back into the market. And it takes time to find , hire, and train new employees to replace those that have left the area for better opportunities.
Yup
On the Rustad Rebate, I would predict the interest will be restricted to the original purchase of the home or improvements; higher mortgage interest resulting from refinancing purchases of new cars, vacations, etc won’t qualify. Or shouldn’t IMO.
I’m using this is an example of what may happen to luxury condominiums.
https://youtube.com/shorts/0NdijdDKDDI?si=JcOf2SHJiRufLGwa
AI implementation will increase unemployment in a number of sectors. Especially the sector that created it, how ironic. If only it could replace politicians.
$3000/month interest, so at 4% around $925k mortgage.