Vote housing: A review of the platforms
As promised, a review of the housing platforms from the major parties. There may be a few more ideas coming from each of them, but I think we’ve gotten the main ones now. I’m only focusing on the BC Conservatives and the BC NDP here, because realistically they are the only ones with a chance at forming the next government. Sorry if you’re a fan of the Green Party or an independent candidate but I won’t be covering their platforms in this post.
To compare the two platforms, I broke down the promises into major categories of housing action. For the NDP I will also refer to recent housing reforms when relevant, since many are in the process of being implemented and one can assume they will continue to be after the election if they maintain power.
The first part of the article is a comparison of the two with a focus on the facts available at this point. At the bottom I’ll give my take on the platforms and who I think has the stronger plan on housing.
Recognition of the shortage
Both the NDP and Conservatives agree that there’s a shortage of housing which directly drives up costs. That may seem obvious today, but just a few years ago it was rare to see this acknowledged on any, let alone both sides of the political spectrum. It’s great to see agreement on some of the basic facts.
Approval times
The BC Conservatives have promised to require municipalities to give a clear yes or no on rezoning applications within 6 months, and issue building permits within 3 or the province will issue them instead.
There hasn’t been anything from the NDP on maximum approval times.
Moving away from site by site rezoning
Both the NDP and Conservatives are promising to move away from our current system where nearly all new multifamily housing is subject to a discretionary rezoning application.
The NDP kicked off this process last year, and it’s being rolled out in two steps:
- By January 1, 2025, each municipality will be required to produce a new housing needs report based on a standardized methodology to estimate how much housing they need each year.
- By end of 2025, municipalities must update their Official Community Plan and associated zoning to accommodate 20 years of housing need as estimated in the needs report
The Conservatives have also promised to align zoning with Official Community Plans. However since this process is already underway it’s unclear if they are proposing any changes to the current process or if they would also require OCPs to reflect estimated housing needs (currently municipalities do not have strict requirements around how much growth an OCP needs to accommodate).
Transit Oriented Development Zones
Bill 47 was introduced by the NDP to require municipalities to allow a certain minimum level of density around rapid transit stops. In the lower mainland that is 12-20 stories around Skytrain, and around here that’s 6-10 stories where there are well-served transit connections. The province initially introduced 52 of these Transit Oriented Areas with a deadline of this June for municipalities to introduce others. Municipalities aren’t forced to proactively rezone these areas, but they can’t deny projects that are at or under this density for reasons of excess density, or require residential parking.
The Conservatives support this legislation, with a small tweak to also require transit oriented areas to allow some commercial/retail uses such as “grocery stores and small businesses”.
Building Code Reforms
The NDP have recently introduced changes to the BC Building Code (BCBC) to allow single-stair buildings up to 6 stories. If you’re not familiar with single stair buildings, this video is a good primer on the topic and explains the potential impacts on making apartments less costly to build. Canada is one of the strictest countries on in the world relating to single stair apartments, with other first-world countries safely building them at much higher heights for decades.
The Conservatives have promised to scrap the stricter energy efficiency requirements (Step Code). They claim that step code compliance represents a 30-40% hidden tax on building costs(* see note below). What’s unclear is whether Conservatives would mandate that municipalities drop their current requirements for step code compliance (for example Victoria requires new multifamily buildings hit step 3).
Conservatives have also promised to look at the BCBC to find opportunities for reform that would make buildings cheaper to insure especially as it relates to water damage claims.
Tax Cuts
Though advertised as housing policy, the Rustad Rebate is a tax cut. Hence the category and inclusion of the equivalent tax policy from the NDP.
The Rustad Rebate would start in 2026 and provide a tax credit worth a maximum of $911/year for people with housing costs (rent or mortgage interest) of at least $1500/month. That ramps up to a maximum credit of $1822/year by 2029 for people with housing costs of $3000/month.
The NDP have promised to exempt $10,000 in income from provincial tax, worth about $1000/year starting in 2025.
Single family zoning
The NDP introduced Bill 44, which requires municipalities to essentially abolish single-family-only zoning, and legalize what they call Small Scale Multiunit Housing (SSMUH). SSMUH takes the form of suites, duplexes, triplexes, quadplexes, townhouses, or even sixplexes in some areas near frequent transit. Municipalities had to the end of June to implement that mandate in zoning, and most cities have revised their zoning to allow some forms of housing from 3 to 6 units per lot. Implementations vary and it remains unclear how many of these policies are actually buildable and how many units may be produced as a result.
The Conservatives have promised to repeal Bill 44 and allow cities to also reverse the SSMUH changes and return to single family zoning if they want.
Reform Development Cost Charges
Both parties recognize that excessive development fees can drive up the cost of new housing or prevent it from being built. The Conservatives have promised two reforms to Development Cost Charges that apply on rezoning:
- Cap DCCs to ensure they don’t exceed the direct costs of growth
- Allow developers to pay DCCs on completion rather than upfront
The NDP have previously introduced several reforms to fees, but there are no new promises in the platform. There is language in those reforms that fees should not be excessive and municipalities should be careful that they don’t deter development, but it’s unclear if the province has stepped in to limit excessive fees directly or if they will be more prescriptive in the future. The NDP have not proposed that fees could be paid on completion, but developers can pay fees in installments over two years.
Social / Affordable / Subsidized Housing
This space has gotten pretty complex lately, encompassing everything from supportive housing at shelter rates to housing that is subsidized slightly lower than market rates.
The NDP have a number of new or expanded programs in this area, including:
- Partnering with First Nations developers to finance 40% of the cost of up to 25,000 new homes for first-time buyers.
- Increase the rental protection fund to buy older rentals and move them to non-profit ownership
- Cut red tape and allow more height (bonus density) for non-market housing.
The Conservatives do not specifically include building subsidized housing in their platform, though they do have two related promises:
- Stop building “low barrier” housing facilities without local community support
- Conduct a forensic audit of BC Housing
Short term rentals
The NDP have recently restricted short term rentals in the province, allowing them only for your principal residence or a suite on the property, but not in investment properties. Many municipalities restrict short term rentals further but enforcement has been lax. The province has promised to help municipalities with enforcement of short term rental rules. Controversially, those restrictions also applied to properties that were previously zoned to allow short term rentals including several hundred in Victoria.
Though it doesn’t appear in the platform, Conservatives have promised to repeal the short term rental restrictions, saying they unfairly restrict property rights and hurt tourism.
Other ideas
Outside of these major categories, there are some smaller ideas in both plans. Some are too vague to really assess, but a few of the more concrete ones are mentioned below.
The Conservatives have promised to
- Lobby the federal government to re-introduce more favourable tax policy for building rental housing. If that fails they promise to introduce an provincial equivalent
- Provide training and support to non-profits that receive funding for housing
- Investigate the home insurance industry to ensure premiums are based on local risks
- Study the potential for a public home insurance option
- Explore potential to build new cities
The NDP have promised to
- Increase the Speculation & Vacancy Tax rate
- Lift the “no-pet” clause for purpose built rentals
- Eliminate provincial tax on purpose built rentals
- Eliminate blind-bidding when buying homes
- Double construction trade apprenticeship spots
- Invest in pre-fab home construction
My Take
As mentioned, I’m glad that both parties acknowledge that we have a serious housing shortage in BC. For a while with rhetoric coming from the Conservatives about undoing all the NDP reforms I thought they would pivot entirely towards catering to the comfortably housed, but luckily that is not the case.
On the Conservative side, the strongest idea is the maximum decision time limit for municipalities. When we have Oak Bay taking 10 years to approve a small condo building, and Saanich recently spending 5 years for the same, it’s clear things aren’t working. 6 months for a rezoning and 3 months for a building permit seems reasonable, but actually implementing this is going to be an epic fight with the municipalities. To actually hit those timelines municipalities would have to drastically reduce requirements for rezoning applications. Alternately some cities will just find loopholes. When Ontario introduced similar approval time limits, instead of speeding up approvals Ottawa introduced a “pre-application” period so they could work with applicants before the clock starts ticking. Regardless, if they have the political courage to take on the municipalities I think it’s a fight well worth having.
Though a smaller one, I also like allowing developers to pay DCCs on completion which is a common sense reform to reduce up-front barriers to housing. Another good idea is investigating how the building code could be reformed to reduce strata insurance costs which has been extensively discussed on this blog. There are certainly ways we could make our buildings more resilient to these common issues. Though surprising given their position on ICBC, they also promised to investigate the option for a public home insurance option which I’ve called for in the past.
While in general I like that the Conservatives are focusing on excessive costs due to the building code, their estimate that the Step Code represents a 30-40% hidden tax on construction costs does not reflect reality. Developers I’ve asked estimated the marginal cost at around 10%, which is a little higher than studies estimating the premium (up to 5%). A 2022 review of actual Step 4 and 5 buildings constructed showed a range of outcomes versus the baseline cost estimate, ranging from similar costs, to 22% increases, to 32% decreases in cost. When factoring in energy savings, up-front costs will be further ameliorated. I do agree that in general we need to perform better cost-benefit analyses for expensive new requirements in the building code. Just because something will make buildings better doesn’t mean it’s worth mandating.
However despite some good ideas from the Conservatives, I believe the NDP has a much stronger housing plan for several reasons: initiative, gentle infill, and non-market housing.
On non-market housing, the NDP has a mixed record. Their big promise of 114,000 affordable homes from years ago was not met, and I really am not a fan of their new idea of building homes for the middle class. While any new homes that are cheaper than market price are good, if we don’t manage to reform the market to build homes for the middle class we are screwed. There simply isn’t enough money to build anywhere near enough homes to serve that segment. That said, even in a YIMBY utopia there will always be the poorest 10-20% of the population that the market simply can’t serve. For those we need non-market housing, and the fact is under the NDP, BC has built more subsidized housing than we’ve seen in years. The additional focus in the recent platform should further increase those numbers. The lack of any mention of affordable housing in the Conservative platform is a huge hole.
Second is single family zoning, which is likely the biggest disagreement between the NDP and Conservatives. Conservatives have promised to repeal bill 44 and end the requirement to allow gentle infill on basically every lot that formerly only allowed single family homes. Will cities actually reverse their zoning changes that are already in place? Probably not (though I wouldn’t put it past Oak Bay). But the implementation of SSMUH zoning is only the first step. Most cities have other zoning or permitting constraints that will limit the effectiveness of the new SSMUH zoning, which means additional reforms will be needed to ensure infill housing is legal in reality, not just on paper. With a provincial government that wants to reinstate single-family zoning, those reforms will never happen. No matter what happens to the market, in the long run single family homes will get less affordable to average families in every growing city and we need to build a lot more cheaper family-sized options like townhouses. More apartment starts are great, but that doesn’t help families priced out of detached houses. Missing middle isn’t a magical solution to our housing problems, but there is no better future where we continue to reserve the majority of our land for a housing type very few can afford.
Typical municipal zoning before the provincial SSMUH reforms
Last is initiative. The NDP have been throwing everything at the housing file for the last two years, with dozens of reforms relating to zoning, permitting, building code, fees, non-market housing, and more. The Conservatives have backed off on previous messaging to repeal most of it to begrudgingly accepting some of the changes. Their strongest idea is about cranking the wheel on the existing system faster, while leaving all the structural barriers in place. I just don’t see any indication that they are driven on housing reforms, and I don’t think most of our recent reforms would have happened under their watch even if they won’t actively reverse them.
So for me the choice is clear, but what do you think?
Note: I realize there’s a lot more issues than housing at stake in the election, but please keep comments on the topic of housing.
You are mixing up price and yield, which are inversely correlated. When rates go down, yields of both stocks and bonds for a given dividend/interest payment will follow , which means their prices go up.
A GIC is a non-marketable bond, so you don’t see the effects of interest rates changes on its price. If you had a bond with the same rate and term, you would see the market price of the bond go up when rates go down. But the present value of that GIC does go up just like it would for a bond.
Need to upgrade if the main sanitary drain is a 3 inch pipe, and it is unlikely that you need to upgrade if you have a 4 inch pipe.
4 inch pipe have 4X the capacity of 3 inch pipe fixture unit.
April, good stuff , my bad sounded like u were doing a strata conversion . Lot more involved
@Thursty The lower secondary suite is already there, the only project left is the garage conversion.
38 pending sales last 24 hrs, solid clip for mid-October.
April, sounds like u will be going down to the studs so I would be budgeting close to new construction maybe there’s a savings with the old shell but it also can have its problems too . If it’s somewhere around rockland people will luv u for saving heritage
https://cheknews.ca/b-c-conservatives-expected-to-release-costs-of-promises-days-before-election-1219048/
Ya , money will be moving off the sidelines again and in a hunt for return .
I’ve helped two investors buy condos in the last 10 days. One has a GIC maturing in November and one in December and combination of suppressed condo prices and them realizing that the high GIC rates are coming to an end here shortly likely lead to the purchases.
With prices having come down and rates continuing to drop, but rents holding steady I think we could be back to being able to source cash flow neutral places (based on 20 to 25% down) by spring/summer of next year.
@Marko You are right, need to figure out the hidden cost associated with the conversion process.
I imagine with such a conversion you’ll have to bring the existing units up to the latest building code including fire separation, etc.
Thanks @Thursty and @ukeedeude! I am thinking to apply to my city to convert the current single family house into a triplex with three units, one upper, one lower, plus the garage unit.
Yup, plumbing fixture unit count plus a million other things. Don’t forget to add 8k to 10k for soil sample testing if you are in the COV before they will even given you a final estimate for new services. If the city wants the services placed where it might impact a tree it can add further costs (tree replacement policy). This is an example of one of my clients’ costs from just last week where my client is having to pay for tree “replacement” because the four trees on city property need to be taken out as a result of civil work the city requires.
$9,125
$1,250
$1,716
$17,606
I agree with Bill 44 in theory but we will actually see very little housing from it when it comes to reality.
April , I’m guessing u will
Need new services to the street as your house was never intended to have that many washrooms or kitchens .
April. Bill 44 does give Municipalities the power to approve both a secondary suite and an ADU in Single Family zoned areas however they are only obligated to allow one or the other. I would be surprised if you were unable to both. You could apply for a zoning amendment and because this is housing related there is no public hearing allowed to keep the NIMBYs at bay. Check the zoning bylaw and in particular any zoning amendments made in the last year relating to your specific Residential zone. Call your City hall and ask to speak to a planning assistant about your specific situation.
Bill 44 excerpt
(3) A local government must exercise the powers under section 479 to permit the use and density of use necessary to accommodate one or both of the following on land within a restricted zone:
(a) at least one additional housing unit within a detached dwelling that would otherwise be a single-family dwelling;
(b) at least one additional housing unit within another building on the same parcel or parcels of land on which a detached single-family dwelling is located.”
Good on you for considering providing housing.
Here’s and overly simple “It depends” high rates drive bonds and other things, hence the GICs being a thing the last few years, however, cheaper lending brings liquidity to the market that drives capital investment and usually stock growth. Ideally people don’t chase the thing of the moment and balance across investment classes. However, you will never win the big lotto like payoff “put all my money in Tesla years ago” or be the big loser wipeout “I bought peak Nortel because it will never go down or how could mortgage bonds ever be a bad investment”.
Stocks do better when rates are lower, opposite for GICs
I read recently saying that the disposable income of the top income earners has gone up compared to other groups. It explained this is because high income earners get more income from investments. Investment income (I’m thinking that means stocks, GICs) goes up as the prime goes up. So, if there’s a 50 point cut next week, does that mean we can reasonably expect index funds to start falling shortly thereafter? Or people should lock in GIC now? Or maybe it doesn’t work like that.
Suppose I want to renovate my double garage into a 2-bedroom suite, but there is already a secondary suite in the basement, and one house is only allowed for one secondary suite, how can I apply for the permit from the city?
Leo , good to see sales are running above long term average for October, when do u think we will get an uptick in prices
I’m not Leo, but I expect price will start to ascend after the major banks adjust their prime rate soon after October 23rd.
We are now looking at a possible sub 4% mortgage rate for 5 year fixed, and perhaps 3.5% or less by spring of 2024.
Dee. Thanks for the reply
What we are now looking at for December is a further cut of 0.50 or 0.25 point after a likely 0.5 point cut next week.
Leo , good to see sales are running above long term average for October, when do u think we will get an uptick in prices
Project management is a very important aspect of any big renovation. Just knowing who to call – and when – requires skill/knowledge. Also, being able to deal with problems that arise (and they always do) while keeping a cool head, etc. Keeping everyone on track and knowing who needs what. Like I know some trades that need 0 oversight versus some that need it (for various reasons – not always because they are bad at the job). I’ve decided the best trades are the ones whose motivation to do a good job comes from within. They hold themselves to a high standard and are self-motivated. Those are hard to find (and generally more expensive). The absolute worst are the ones who would do anything for a quick buck and pretend that they can do things that are really outside their wheel house. What’s funny is that most trades think that they can do project management – even ones who go around pissing everyone off and have very little people skills. Anyway we hired a GC for a big project that we had. He had integrity and did an excellent job. Those too are hard to find.
First heard about this over a year ago and I think Thursty said he also heard about it, looks like it finally has some legs now. $30M in land value from the private sector is a pretty big development, going to be at least 500 units I think.
https://www.timescolonist.com/local-news/saanich-looking-for-private-partner-to-redevelop-operations-centre-land-9649629
@leo, did you have any input on this?
Managing multiple contractors is a big job. It is being a manager and failing to do this job well will result in delays, inaccurate work, and avoidable expenses. Project management is not at all like ordering take out: it is a profession.
“ I’m good at managing renovations. A great number of people don’t have the stomach for it. But, I love watching places transform. I think the “sweat equity…etc.”
I applaud what you have done. and your approach.
But not sure I would call managing someone else’s labour “sweat equity”.
Maybe ordering from “skip the dishes” is the new “cooking”?
Vicre, I get it, might have to puts some cash on the table , but doable
I don’t think the math quite works out that way.
Long run average for October is 598 sales, so just over that.
Half the increase is from super weak last October, half is from increased sales.
Vicre, yep if Dee is knee deep in equity , I would take a trip to the bank and leverage up
Turn a triplex into two SFD?
Dee, time to finish that suite and get the place sold , maybe buy 2 sfd in the core and ride this market up . Maybe buy a lil abode in Europe with your winnings
I see the joy of lower rates is contagious. Next week can’t come fast enough , just a few more sleeps
>>> BNN- Canadian inflation rate drops to 1.6% for September. Rates are coming down, pent up demand will create another seller’s market and higher prices
Yes, looking good for 50 bps cut October 23. Swap market predicts 67% chance now. The other 33% being a 25 bps cut.
That’s an instant “ka-ching” event for many with a variable mortgage or HELOC.
Why are you so weird?
How long have you been on HHV? And why?
Why are you so weird?
BNN- Canadian inflation rate drops to 1.6% for September. Rates are coming down, pent up demand will create another seller’s market and higher prices.
Marko, good stuff , that’s music to my ears. Dropping rates , dropping inventory will push on prices . I am actively looking in OB and Fairfield right now and there is absolutely squat on the market that I’m liking in the 1.5 to 2,0 range
I agree VicRE. I have a larger risk tolerance than many plus don’t mind (kind of enjoy) managing renos. It isn’t typical.
Definitely not representative of the typical person trying to go from a pos starter home to something nice in oak bay/broadmead. Majority of those people are looking for turnkey solutions, not messing around with a a triplex and renos. That homeowner x2 has a more typical experience where they went from 2 houses to one “dream home” in Cordova Bay
Month Oct Oct
Year 2024 2023
New Unconditional Sales 282 407
New Listings 533 1,100
Active Listings 3,220 2,756
I am going to guess we end the month with 620 sales or more than a 50% increase YOY.
*282 + 120 this week + 140 next week + 80 last week of October.
Also looks like we will have less new listings coming to market than last year.
If we get a 50 basis point cut shortly this market could shift quickly especially for SFHs if sales continue to accelerate while new listings decelerate.
I like “Dee’s” thinking and congratulate her family for their logical, down to earth and practical approach to making things work for their situation.
Our current house is a triplex. We fully updated both suites and at this point it’s our unit that still needs some work and some exterior work as well. My theory is that the house is more or less maxed out at this point in terms of what we could get for it if we were to sell. There’s a hard ceiling based on location and market overall and we’re right up against that I think. But we plan on staying long term so will slowly update over time. Eventually this old lady will sing. Plus when market wakes up for its nap probably there will be more opportunity to increase the value through sweat equity.
Market didn’t really move until late 2014 (huge int rate cut in q2 2014 coinciding with oil collapse). The start of take of was for the market was fall 2015.
2014 was a good time to start buying clunkers , if buying in good hoods and fixing em up , there was lotsa money to be made.
” Took 350k for us to get in the door last year.”
I believe you that it took 350K for sfd. I don’t think we would be able to get a sfd now if we were buying our first place. We would again have to start smaller and build up. I’m not even sure that would be possible if we had to start now (who knows what the market will be in 10 years). I have always gone for houses that no one else wants. I’m good at managing renovations. A great number of people don’t have the stomach for it. But, I love watching places transform. I think the “sweat equity” that we’ve put in accounts for some of the increase. But more important is the market overall.
My year was off – it was 2013 that we bought our first place. The market started to escalate rapidly almost immediately after we purchased our first place. We were very lucky.
Wow, well done. Mind-boggling actually. Took 350k for us to get in the door last year..
Patrick , I don’t think the jobs market uptick isn’t going to move the needle and a 50 point cut is baked in
Patriotz, sounds like you’re retired and not living in Vic . Curious why the interest in Vic’s market
Markets expecting 50% chance of 50bps BOC cut on a October 23, otherwise it’s 25bps…
https://ca.finance.yahoo.com/news/unemployment-rate-falls-to-65-in-canada-but-mixed-signals-muddy-odds-of-a-50-bp-rate-cut-173201413.html
“ The effect of the labour data and the business sentiment survey, BMO chief economist Douglas Porter writes, “was to leave the market almost perfectly split 50/50 on the 25/50 debate for October.””
Yep, everyone has to do what works for them.. I was originally discussing the ones that might be looking at a property ladder scenario trying to get from Happy Valley to Oak Bay. So, in 10 years they will have equity gains, but does that get them to what they want? Let’s say in three transactions over a decade 10 years with mortgage payments they have paid out 100k realtor fees and land transfer taxes and maybe 300k mortgage payments (we can leave out maintenance, renos, and property taxes). So, how much did the 600k cost them to get? and are they any further ahead on an offer to get into Oak Bay? As well, did the ownership during that decade prohibit the automatic things that should be maxed annually like TFSAs, RRSPs, and RESPs? Not all investing is Bitcoin and Tesla… It’s more about balance and real estate is usually a part of that balance. It’s the all in one that causes issues for folks.
>>>> In 2014 we started with 15k cash, which we used to buy our first place. Now we’re on our third place and we have 600K in equity. So 15K -> 600K = pretty good to me. Also, our housing costs are LESS now (month to month) than they would be if we rented a similar place. And yes, for many average people their home equity is forced savings that enables them to retire eventually. No shame in that.
Well done Dee. That’s a spectacular gain, and tax-free at all times including when you sell. In addition, moving up the property ladder can be fun if you’re moving to a nicer place.
Yes it’s true. It’s not straight cash. I’ve never been sure how to compare the owning to not owning. Either way I have housing costs — life isn’t free. But maybe if I had taken 15k and put it in to bitcoin or Tesla I’d have been better off. But I’d have never done that.
I also think it’s about security in housing. When we moved to Victoria I wanted to buy asap even though I knew we would only be able to get a starter home. Because I didn’t want to be forced to move – especially with kids – to a new rental whenever a landlord wants to sell. Wouldn’t you know 6 months after we moved out of our only rental in Victoria the landlord sold. That would have been us having to move to another – vastly more expensive- rental. So it’s not just about what the money does for me – it’s about feeling secure too.
Is the 15k now 600k? It’s been actualized minus taxes and all other carrying costs and deposited into the bank? Or is it theoretical as asset value? No shame in it at all, just might not be fully representative.. So, 15k plus 10 years of payments and other things..
Could also be from only having nominal housing costs (insurance, property taxes) – as opposed to rent. Or even, like us, pensions, cpp, plus income from rental suite. Don’t actually need to sell to retire.
I read that a single person only needs 7,200 Euro in passive income per year to qualify for visa in Portugal. We are considering living somewhere like that for say 1/2 the year while renting out our place here.
Only way to do that is to borrow against your property or to sell it. A position I’m glad I’m not in.
What did you start with and what did u end up with?
In 2014 we started with 15k cash, which we used to buy our first place. Now we’re on our third place and we have 600K in equity. So 15K -> 600K = pretty good to me. Also, our housing costs are LESS now (month to month) than they would be if we rented a similar place.
And yes, for many average people their home equity is forced savings that enables them to retire eventually. No shame in that.
Property ladder can mean riding the wave up so that eventually you can get something that would have been out of reach before. That’s what we did. Worked for us. Of course it would have been much better if we could just buy our current place out the door.
Needed a house in the right neighborhood for the kids for the next 15-20 years. After that, I don’t see the point of the size and maintenance, it will be time to sell and find a patio home or condo. The property ladder doesn’t make sense if you have a target to be somewhere since you repeat costs and tie up liquidity. That and somehow you’re going to grow enough value out of a less desirable cheaper property to get yourself into a more desirable more expensive one over time? I guess there’s the forced savings people out there whereby it’s the only way they ever have any assets, but there are more efficient ways to get what you want.
There is not gotcha attempt, deep down you know what you are lol
Bad idea. Those type of tenants become nightmares, guaranteed.
Do you become friends with your tenants? Some tenant wants to chat every day.
Never once said I was trying to upgrade now or even in the next 10 years, but thanks for the feeble gotcha attempt.
No, only cashflow generating assets for my personal portfolio, RE, stocks and FI.
@VicREanalyst “Never touched crypto, don’t plan to either”
What about physical gold?
I’m big on climbing the property ladder , but I know others that are 1 and done . Too each they’re own
LMAO says the person with a POS house trying to upgrade.
+1… I have quite a few acquaintances that bought into the property ladder concept that are feeling trapped in houses in Sooke, Happy Valley and condos that believed it would get them to the places they wanted, but the math just doesn’t work out.
Caradonna says that the City has already gone above and beyond the onus of municipal government to address these issues, but the responsibilities ultimately rest with senior levels of government.
https://www.victoriabuzz.com/2024/10/victoria-councillor-tries-to-save-small-downtown-business-by-requesting-aid-from-province/
Geez, talk about our of touch…. “The city has gone above and beyond” Well, yes, it has if that means exorbitant tax increases on commercial properties it has put in place and lethal ones about to be rolled out over the next few years; combined with a city council that through their policies has entrenched a violent criminal element downtown that keeps people away….
How are the Conservatives proposing to reduce the deficit?
I am guessing one of the things they could or would do is cut the budgets of various ministries, which in turn will result in hiring slowdowns or freezes and heated negotiations with unions (there’s one coming up to be implemented from April 1, 2025).
If this indeed happens to the case, will it affect RE prices in Victoria considering it has a disproportionately higher number of government employees (with apparently “Safe” jobs) that live here (and there are not enough new government jobs or raises on offer)?
Never touched crypto, don’t plan to either.
What I still have trouble stomaching about the property ladder is flushing money down the drain multiple times on PTT, realtor commission, lawyers, etc.
For better or worse, my instinct has always been along the lines of: if possible, buy something that will work for your family for a long time, and hold.
@VicREanalyst
Curious, what are your thoughts on crypto with all the currency debasement occurring all over the planet?
That’s not something for me. Just want to be able to not depend on a demanding job l, be relaxed and afford a good comfortable lifestyle for my family while still young enough to fully enjoy life.
“Lol cracking 7 figures per year is the end goal during peak earning years in my field”.
I’m guessing your in the finance biz. My uncle was in finance and like you say he was making 7 figures per year in his prime earning years. No one really knows what he did but I think it was hedge funds. He went through wives like a turn style. If you weren’t talking money he wasn’t interested in the conversation. But hey, good on you for setting your goals high and like I said I really wish you the best moving forward.
I don’t think the Esq condo is tatted up. It says that it’s staged virtually to show what it could look like with different construction materials. Clicked on the brochure and it has the old price of 398K. I can’t find the condo fees – don’t they have to include that now? Also doesn’t mention if rentals are allowed. Anyway if I was trying to get in I’d have no problem living somewhere like that with the plan of moving up in 2-5 years. Sometimes seems like people don’t understand what a property ladder is. Took us 3 purchases to get our final forever house because we had to built equity.
TD Bank will pay approximately $3 billion USD in a historic settlement with U.S. authorities who say the financial institution’s lax practices allowed significant money laundering over multiple years. The CEO of TD Bank, which is the 10th largest in the United States, says “this is a difficult chapter in our bank’s history.”
Lol cracking 7 figures per year is the end goal during peak earning years in my field.
Prices are coming way down for rentals. The jig is up for PBR. My BIL had a very nice couple then she got pregnant and they moved into a 2 bed for cheaper than the one bed they were renting from my BIL. And it was brand new with secured parking.
The condominium market is getting strange. I’m seeing more listings with comments such as…
” Less expensive than rent! 2 bedroom and 2 bathroom with a bright, south facing suite that offers over 1030 sq. ft. of spacious living. ”
This one has been listed for 144 days at $474,000.
The cheapest two-bedroom condo in the core is asking $350,000 for a tarted up condo in Esquimalt that has been listed since May. 20 percent down would make a mortgage payment of $1,600 a month.
Makes me wonder if interest rates were to continue to decline then more renters may chose to vacate their rental at a time when more purpose built rentals are completed.
The problem with all cartels be it housing or oil
https://youtube.com/shorts/_ZB1Cu6Ays8?si=4AIJg9goegkuL0U7
@VicREanalyst “In my field you work your ass off when your younger for the opportunity to make a lot more in your 30s and 40s”.
We do the same thing in my field. Unless you have discovered a way to take it all with you? I’ll be 51 soon I have decided to relax, look around and smell the flowers…Its very soothing. The house has one more 5 year fixed until its paid for. The wife and I make more than enough for a happy ending.
I wish you the best of luck. I hope you make millions and millions!
Lets not forget there is always cryogenics and crypto currencies. Perhaps you can get liquid and take it all with you these days.
@Whateveriwanttocallmyself
“Manufactured Home Parks and Private Equity”
https://youtu.be/wkH1dpr-p_4?si=BARjZ70LKPd9x2dQ
Your dreaming! An expected 400 to 800 million people will lose their jobs due to advanced AI by 2030. As if they’ll be able to afford all that.
https://www.hypotenuse.ai/blog/what-jobs-will-ai-replace
In my field you work your ass off when your younger for the opportunity to make a lot more in your 30s and 40s…..
Manufactured Home Parks and Private Equity
https://youtu.be/wkH1dpr-p_4?si=BARjZ70LKPd9x2dQ
@VicREanalyst “If you love what you do then it’s cool”.
I don’t really need to work all that much these days. Only because I worked so damn hard when I was younger. I sold my youth to work. Now i work 7am-1pm weekdays and most of that time is on my phone or laptop. I think I’ll just stick to that routine and giver till I quiver. It makes for a perfect work/life balance and I’m happy all the time, so is the wife.
If you love what you do then it’s cool. My job involves a lot of travel and it wears on you. A lot of the times I goto Vancouver one day prior to avoid missing connecting flights, so definitely a significant time away from home. It was pretty awesome early on in my career but different now with kids.
@ Thursty “Max , curious where he ends up on price”.
My Brother inlaw also tore his house down at the esquimalt lagoon. The house was derelict but almost paid for. He discovered the original house was built on a first nations middens. This means you must hire a member from the first nations to watch over the excavation and hope to god they don’t find anything. Since its right down at the water he figured for sure they would. To dance around this rule he used helical piers connected to a grade beam foundation. This is very expensive, like 38k plus the 3′ grade beam for the foundation.
https://www.ictinc.ca/blog/first-nation-middens
He also hired a licensed builder for the foundation and framing and managed the job himself. He was able to build a really nice house with stunning ocean and city views for less than 600k. By adding a legal one bed suite with separate meter his mortgage is super cheap. Like less than a grand per month.
https://www.screwpilesbc.ca/
Ya when house hunting it’s kinda always been a few more grand and houses get that much better . I’m blown away by how much money is out there , like Vancouver money is international and moves easily
12 owner builder emails in the last couple of days…..BC Housing really helping out the residents of BC and the housing situation! Some of the emails are insane.
Makes sense, once the husbands writes the exam the buyer of this 9 year old home will be “protected.”
“Sfd demand might weaken if more people are priced-out of that market”.
Locals will be priced out but I don’t think it’ll weaken. Just look at Salt Spring, North Saanich. Lots of money out there. Even Shawnigan lake with no city water, sewer, bike lanes, or transit, 2 corner stores and 1 gas station will set you back at least a million and that’s not on the lake… If it is its a tear down.
If you own an sfd on the Island you had best be hanging on to it. Especially the south Island.
I think you are better off leaving it to your kids at the adult age. Have it drawn up by a lawyer. Mom and Dad both with dementia now get to go live in assisted living until they die.
I’ll even go live in the priory. At that point in life I’m sure I really won’t care much since I’ll more than likely be bat shit crazy anyway. There should be lots of vacancies at that time with all the boomers out of the facility.
https://www.islandhealth.ca/our-locations/long-term-care-locations/priory-hiscock-and-heritage-woods-long-term-care
Perhaps, though I’ve noticed that higher-end homes are often a better value. For example, moving up from an entry-level sfd to a mid-range sfd doesn’t cost that much, but you get a lot more.
Sfd demand might weaken if more people are priced-out of that market.
@”VicREanalyst” That’s great. I’ll be 51 in November. Freedom 55 is what I’m shooting for. On the other hand, I’ll probably just keep working until I drop. Call it a labour of love.
I know guys that were rolling quarters…pocket change, just to survive after that crash. Black swans happen dude!
Most people at the firm expect to canned sooner or later. 2 bad deals in a row and I am likely gone, hence the need and desir to build up another formidable source of income. The plus side is that most of us will be financially free in our late 40s.
@VicREanalyst. “LMAO, 200k comp is not high in my field. That is literally one step above entry level”.
“Nortel’s market capitalization fell from C$398 billion in September 2000 to less than C$5 billion in August 2002, as Nortel’s stock price plunged from C$124 to C$0.47. When Nortel’s stock crashed, it took with it a wide swath of Canadian investors and pension funds and left 60,000 Nortel employees unemployed”.
I know guys that were rolling quarters…pocket change, just to survive after that crash. Black swans happen dude!
” I don’t view 70s gordon head houses “west of gordon head road” as quality assets”
Garnet rd is kind of a jem.
LMAO, 200k comp is not high in my field. That is literally one step above entry level.
“Ks112/VicRE…”
This is right out of “all my children” When I was child my Mother and I would record the show everyday to VHS. I can just see Erica Kane going off on how VicRE is an imposter and its actually Ks112 in disguise…Too funny.
Perhaps we should bring in Scooby Doo…It looks like we have a mystery on our hands.
I’ve also mentioned multiple times regrading building rental portfolio with my own family sans my wife and her family. Feel free to google those.
Right. You previously told us what “accumulate quality assets together with other members of my family” includes, which is you expect that “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.”
Ks112/VicRE… You’re quite the class-act “investor” alright.
https://househuntvictoria.ca/2024/09/23/rates-are-dropping-but-dont-get-too-excited/#comment-120260
I see.
Well, then, we must have you confused for another somewhat aggressive, arrogant commenter whose writing is just like yours in tone, style, and substance, who makes the same quirky errors on occasion, has a high salary and receives a huge bonus every year.
You need to throw quality town houses in the mix too, lack of supply for those especially in the desirable areas.
Area matters but not as much as type (sfd vs condo). Anyway if you’re the cassandra in this tragedy (which I have been), good luck trying to convince an average person ~2020 that prices are bound to appreciate rapidly post pandemic. Most people do what most people do because… you guessed it
Anyway, at this point the game is sfd vs non sfd. It’s not terribly complicated beyond that (especially in the core).
I never lived downtown nor owned a Gordon Head rental. I try to accumulate quality assets together with other members of my family and I don’t view 70s gordon head houses “west of gordon head road” as quality assets. 120k while it is a significant amount of money but it is not something I would fuss over if I really wanted something. I am sure Patrick is attempting to google my comp now LMAO.
VicRE/ks112, maybe you’re trying to convince someone at work or at home that VicRE isn’t the same person as ks112, but you’re wasting your time with any long-time HHVer. That is case closed and that ship has long sailed.
LMAO, sorry don’t know who that is but I would add that the only thing that has sailed is the sad existence of your so called life. How are those imaginary kids you have btw, the ones that you are supposedly trying to help by a house? There is a reason why most people in the RE industry on HHV ignore you and you are left to pass time with your alter ego Introvert for the most part. But whatever floats your boat 🙂
I am here to discuss RE with other locals in the industry and to call of B.S. when I see it.
You lived downtown and had a Gordon Head rental. Did you sell it?
VicREAnalyst/ks112, maybe you’re trying to convince someone at work or at home that VicRE isn’t the same person as ks112, but you’re wasting your time with any long-time HHVer. That is case closed and that ship has long sailed.
Evidence is overwhelming that VicRE = ks112. He/they were outed on HHV in November 2023. Anyone interested can read here https://househuntvictoria.ca/2023/11/06/some-rate-relief-but-damage-is-reverberating/#comment-107396 and some HHVers did an AI text analysis to confirm it https://househuntvictoria.ca/2023/11/06/some-rate-relief-but-damage-is-reverberating/#comment-107424
And https://househuntvictoria.ca/2023/11/06/some-rate-relief-but-damage-is-reverberating/#comment-107426
And following that, several additional follow-ups were posted with additional amusing peculiar misspellings shared only by ks112/vicRE. (E.g. always misspelling “suite” as “suit” as “there are lots of listings with rental suits”
—- by ks112: “ two rental suits in the basement .. the two suits should provide 2,000 sq ft” https://househuntvictoria.ca/2021/05/10/employment-and-other-updates/#comment-79846
—- and by VicRE: “ bear mountain is not it’s own municipality so suits or garden suits only.” https://househuntvictoria.ca/2023/10/16/whats-going-on-with-condo-affordability/#comment-106197
So that is Case Closed as of November 2023. ks112=VicREAnalyst
But hey, if you need to deny it for someone at home/work.. go ahead.
“Max , curious where he ends up on price”.
This isn’t his first rodeo. He’s a construction manager and has a very well connected group of subtrades. He’s actually a journeyman carpenter by trade and even today he still picks up the hammer from time to time. He also has no borrowing costs, its his own money. Even napkin math tells me he’ll be fine.
LMAO, didn’t know I owned a rental in gordon head or wanted to live in Oak Bay. They happen to be two places in the core that I am not fond of…
It’s ok you won’t be moving to either places anyways, time to snap out of fantasy and go fix that rotting fence you have 🙂
Thanks Introvert. Always interesting to see people reinventing themselves on this blog. Very confident in both virtual lives.
For those who haven’t been following along, ks112 is VicREanalyst.
Yes, I see the logic. But the fact remains that, to date, the Broadmead delta hasn’t approached the South Oak Bay delta.
Patrick, ya man the price graph doesn’t lie, a dip here and there but it’s always upwards , period. Even when I got here in 2014 people were saying prices are going to crash . At that time buyers could snag a well used house in Fairfield for 550 / 600 grand which was still crazy cheap . I was coming from Van and prices where double that
Yup. Plenty of cautionary tales just like that played out in real-time here from HHV housing bears over the last several years.
Remember this one? …. HHV’er ks112, telling us he was waiting for “something nice with water views in Oak Bay”, but he thought prices were too high and decided to “wait for the correction.” Which never came. https://househuntvictoria.ca/2019/07/25/are-regulators-pulling-off-the-soft-landing/#comment-62161
The statistical distribution of incomes in greater Victoria would like to have a chat.
On paper sure you can make this claim. But the actual number of households where both parents have decided to have a small number of children and are working 150k+/year positions is not plentiful. Not zero, but not large either. 2021 census data indicates 12k individuals with after-tax income of 125k+ out of ~340k income earners in the census area.
Or you can just put up the extra cash now and retire when you get the inheritance.
How many options do people with 300k to 350k household income (or ~$1.6M to $1.8M budget) have in the core if they want a nice house on a big lot in an upscale looking neighborhood?
Max , curious where he ends up on price. In chinwags I’ve had with a few of the local builders here inOB and Fairfield cause it’s always the same ones . A new build no land was about a mil and that was say 3 years ago . Let us know where his ends up , I was still under the impression new construction was still going up 6/8 percent a year
Pretty much every senior-mid level manager (senior manager/director title) at a public sector employer (province, city, crown, health authority) and private sector employer with >$250M in revenue will be 150k+ salary. Add in those semi successful self employed types (realtors, mortgage brokers, car salesman, business owners) along with the union public sector employees that pull in overtime (nurses, cops) and pretty much all early-mid to mid career professionals at professional services firms (accountants, lawyers, engineers).
A savings tailwind is being debt-free. And inheritances also come along.
“Level a 1.5 shack and u get a 4 mil new build and that rung on the just got bigger”.
My buddy is doing this right now on Dufferin in OB. It cost 100k to remediate and demo and almost another 100k to excavate and haul away the soil for the 10′ basement. He owned the house clear title before the demo (rented it out). He’s pretty sure he can build it out all in for a million including the remediation, demo, excavation/hauling. He takes care of all the management and just hired a licensed builder for the foundation, framing and of coarse the HPO# for the building permit. He plans to live there forever.
Define “plentiful.”
—
We finally get an answer to the question about whether new CMHC rules for lending apply to insurable mortgages (ie >20% down payment): no.
https://www.timescolonist.com/z-central-newsletter/why-are-insurable-mortgage-borrowers-being-excluded-from-the-new-mortgage-rules-9645156
I guess you are not very familiar with jobs in Vancouver, $300k to $350k household incomes are plentiful in Vancouver in comparison to available SFH inventory and those aren’t “fancy jobs” either. I bet Marko will tell you that many of his clients here fall into that category also.
You’re assuming that Broadmead will follow South Oak Bay in terms of increasing price delta. It’s a fair assumption, but so far it hasn’t happened.
To me it does make sense that west shore will be an exception. I think there are some wild cards in the core. But, overall, it’s going to be getting the paws on a sfd that’s nearly impossible. Getting a sfd with a suite in a meh neighborhood in Vancouver proper – good problem to have.
Also, my FIL said he heard something where most parents now expect to save 100K per kid to help wth the downpayment. That sounded like an awful lot to me so I asked my friend who is very high up at an investment company and they said there’s no way the average canadian family is saving 100K per kid for a downpayment. Point being, I don’t think average working folks can afford 1.5 or 1.8 mil easily in Vancouver. Except those who bought 10+ years ago I guess.
That is a good point Thursty, this really drives affordability out of a particular neighborhood. Always better to have the shittiest house in a desirable neighborhood than vice versa. Hence I been telling people to stay out of the westhore but no one listens lol. There was literally a hhv poster from couple of weeks ago that that said they are now priced out of oak bay and regret not buying there from the start.
Sfd , should outpace other forms of housing just based on scarcity. Condos are taking more of a hit, cause u can always build another building . We are losing affordable houses in oak bay only because the mix of old and new is changing . Level a 1.5 shack and u get a 4 mil new build and that rung on the just got bigger . I like how oak bay is developing as u get like minded neighbours with the same interests
South Oak Bay you are starting at a much higher base amount. $1.8M increasing by 40% is ~$2.52M, 1.1M increasing by 50% is ~$1.65M, the delta is now 870k vs 700k 10 years ago. So in 20 years that 200k delta turned to almost 900k, good luck closing that on a union salary.
IMO its more the type of house that runs away, those suited houses in the meh areas of the core will always be accessible to local incomes. A good example would be Vancouver, you can still buy meh houses in meh neighborhoods (full of suites, shit curb appeal) for 1.5M to 1.8M which is still accessible to alot of working folks there. The houses in desirable neighborhoods, you can forget it about it even on $500k household incomes.
But there are different levels of rungs. The biggest rung (in this context) is in or out of the market. Area (Oak Bay, Broadmead, etc…) is a second level rung. I don’t see South Oak Bay appreciating at a level that’s as extreme as the value of SFD vs non SFD overall. Meaning, I bet Introvert will be fine if she waits 10 years.
vircre, agree the rungs on the ladder will continue to get farther apart and i dont c that changing, if anything we are probaly at the beginning of another real estate cycle and prices on sfd in core hoods will double up
It will be game over at that point. See all the people that bought elsewhere instead of ponying up another 100k-200k for south oakbay 10 years ago. That delta is much larger now (probably 500k+).
Not a crown corp, QuadReal was spun out but is still wholly owned by BCI , it followed what other asset managers had done to their RE arms (e.g. CPP, OTTP etc.), but funny enough some of those firms have now reversed course. Bentall was one of the external asset manager for BCI prior to the spin off but has since been absorbed by QuadReal. Deal size varies and there are no shortage of brokers and established industry players pitching regularly.
Not going to uproot my kids from schools they love. When they hit university, we might start looking around.
bcIMC( a crown corp) has a small RealtyCorp. QuadReal, on the other hand, is a big shot: investing, in-house development and self-funding projects across the globe and if they can find cheaper debt from CMHC, they would). Had a little interaction with QuadReal Debt side, they may look at industry construction debt. I have not found any contact on the equity side yet but it would be awesome to know a little bit more what kind of deal, size, asset type, and structure they would entertain. VicREanalyst , would you or someone you may know can share bit more? Happy to take this topic offline.
Introvert should try to get into broadmead now before he gets priced out forever.
He got CPP and OAS mixed up
Introvert, I bet. I like the guy on YouTube from Well Built Wealth. His videos are very enlightening. He doesn’t factor in your housing/house though.
Half of all Globe and Mail personal-finance columns are on the subject of when to start CPP.
Frank , I agree I plan to keep going at a more leisurely pace with no timelines . I know so many folks who had well paying jobs their own home just slowly go broke in retirement, there just never seems to be enough money.
Most people don’t realize how spending habits change as you age. Once you get past 75, discretionary spending will likely decrease significantly. Anyways back to RE market, this winter seems like th best buying opportunity so far as rates are down 1% compared to the last two winters while prices are about the same.
VicReanalyst: That makes sense, most people don’t know when they’re going to pass. So you can really go, I’m going to spend all my money by this specific date. If you saved assets, you mostly overshoot the benchmark to make sure you don’t run out. Or you didn’t save assets and just run out before 🙁
most die with either too much money left or not enough. Few actually die within their target amount.
The best retirement plan is to work (at something not too stressful and maybe not full time) until you drop. Too many people die within one year of retirement. Not working can can be very stressful. Having some purpose is what life is about.
People should read up on it and make their own plan. 4% seems a reasonable benchmark to me.
Max, why would you have to wait to take CPP until you’re 67? You can take it as early as 60 and as late as 70, or anywhere in between, but the when impacts your benefit.
You can debate that with someone that works at IG, I have a more practical view on how to manage personal investments.
Don’t care as long as my bonus hits my bank account every year.
“those aren’t my personal insider contacts”.
Is it Martha Stewart?
The safe withdrawal rate in retirement is generally accepted as 4% of a portfolio. This is based on math and modelling that has worked for people to ensure their funds last for their lifetime through up and down markets.
https://www.financialplanningassociation.org/article/journal/MAR04-determining-withdrawal-rates-using-historical-data
>> That is none of my concern. I work on deals and deals aren’t a 9-5 job, nor is it something always done at the office
Sounds good. BCI Private equity is 12% ($30bn) of the entire BCI AUM ($250 billion BC public sector pension funds), and has been getting higher returns (15%) than overall fund (8%). So whatever your role is, “keep up the good work” there.
Sounds like you’ll be just fine!
That is none of my concern. I work on deals and deals aren’t a 9-5 job, nor is it something always done at the office 🙂
I’m just going to wing it and hope for the best. I have a DB pension, a house that will likely have a small mortgage when i retire, but has rental income, and hopefully some cpp / oas. My spouse also has DB. Good enough for me.
Man if I wasn’t such a baboon I could understand half this stuff . I think I will continue to wing it lol
>> just exactly how high is a higher return?
I’ve enjoyed the discussion, but must ask on behalf of Introvert and all other BC public sector workers with invested pensions … shouldn’t you be getting back to work? 🙂
just exactly how high is a higher return?
Well at least we know that “insider contacts”, direct access and speed-dialing bank CEO’s doesn’t mean to expect higher returns.
That sounds like a great question for the pension trustees. The insider contacts I reference have little to do with company CEOs, those aren’t my personal insider contacts.
“maybe OAS, CPP is a fund and they can just jack up contribution rates”.
…And they will. I have to wait until 67 to get anything, up from 65, whats next 75? I wouldn’t bank on them being there at all!
There was no warning at all…Just boom, its 67 now, deal with it. Now is that not jacking up contribution rates?
>>> Where I may or may not work is irrelevant as long as my bonus hits my bank account every year
Maybe you could help explain for the BC public workers here with pensions invested, why the 10-year returns of BCI are only 7.8% per year. https://www.bci.ca/investments-performance/
With all the “insider contacts”, direct access and speed-dialing bank CEO’s you describe, shouldn’t they expect higher returns than that?
CPP functions as a payroll tax and is a productivity killer since it’s applied on both sides. It is pretty hefty now, it would be tough to push it higher since income tax is already pretty high.
Ya, next federal election, I am pretty well voting to get that TFSA contribution level doubled again. Tax management in retirement is where biggest gains can be made. If folks do it poorly, they will just see money flow out of pocket.
Where I may or may not work is irrelevant as long as my bonus hits my bank account every year.
maybe OAS, CPP is a fund and they can just jack up contribution rates.
That depends on a bunch of unpredictable assumptions (e.g. if you locked in $1.8M last year in a 5 year GIC last you can be living off 90k a year interest for 5 years without ever touching principal, that’s like 1/5 of your retirement). You have to also remember that the employee pays into a DB contribution, typically around 10%, sometimes more. In the private sector with standard 5% RRSP matching that will be 15% of salary contribution every year in the the RRSP.
——======
I think we both agree that there’s only one Victoria based institutional investment manager – BCI – that’s big enough to have the access and power you describe in your “MyShop” description ….
VicRE:“my shop has direct access to senior management to most companies in the world and that includes every single Canadian name. Maybe Elon musk won’t take our call but the CEO of RBC does and will continue to do so”
The second biggest Victoria institutional asset manager is tiny in comparison (e.g. 10 figures is <$10 billion AUM which is <1/25 of the size of BCI) and wouldn’t have anything like the direct access you described for your “myShop has” post.
So if you comment is accurate, it means you likely work at BCI – managing pension investments for the BC public sector. Nothing wrong with that, and it’s a great company, with a 7.8% annualized 10 year return.
Since Introvert was talking today on HHV about their BC-public-pension, it also means that you’re spending your days working for Introvert (and other public BC employees) securing their pensions through investments to improve their financial future. That must feel good!
“Land taxes do pay for the maintenance of the existing sewers etc. But when the existing 8″ line has to be dug up and replaced with a 10″ line to accommodate the increased density your new house created, why should I and my existing neighbors have to pay for it?”
When sewers first came to Langford back in 2006 I hooked up right away as they were coming down the road. It cost me $2600 all in for the connection fee, excavation, pipe to the road, and the destruction of my septic tank. Now it costs 20 grand all in! Its a mandate to hook up if you have sewer at the road…This is a shock to many residents still on septic.
Ya, people need to stop counting on OAS increases and CPP indexing in retirement. You have had governments at all levels spending and taxing like Greece here for the last decade. Sure they won’t disappear, but you will hear: “limiting growth and limiting expansion of benefits” quite a bit in the next 20 years.
You’d need about 1.8 million invested to be able to count on 70k a year. More if your plan includes medical and dental benefits. People without pensions have to be pretty diligent about saving and investing to match this and there are no guaranteed payouts.
“Lumber demand is down, that means they’re not building. So much for increased supply and lower prices”.
Its because everything is composite these days. continuous plastic footing bags, ICF Styrofoam concrete foundation walls (Insulated concrete forms. Corn flake floor joists, corn flake subfloor, corn flake wall panels, corn flake roof systems, composite decking, engineered flooring, engineered cladding, etc…
Its no wonder they shut down all the mills. They are still building big time… Just under a different light.
Google has failed me yet again.
That is pretty insulting tbh.
Sure.
and what, full pension so around 70k a year with inflation indexing? Probably around the same or maybe 10% more tops. Need to account that DB pension goes away once you die (or discounted if you die and your spouse lives and then goes away when the spouse dies), What’s left of the RRSP can be left to your estate and is much more flexible than pension income as it becomes sort of a liquid asset for the individual.
IG Wealth Management?
Let’s go with $110K.
“The most egregiously bad proposal is to give tax credits on mortgage interest.”
I don’t. I think its about time. As long as it doesn’t have a negative impact on the capital gains exemption for the principle residence I’m all for it! I’m just pissed at the “of at least $1500/month.” part. I would have to take out a HELOC right now and blend it at my 5 year fixed renewal date of late October 2025 just to reach the $1500 per month minimum allowing me the eligibility for this tax credit. It also doesn’t mention whether or not its only for an insured mortgage in Leo’s post. If this tax credit is available for both renters and homeowners, insured or not shouldn’t matter (I’m not insured).
The goal here is to make housing more affordable whether you rent or own. This is great for guys like me who want to make this house a generational house for my two boys. The house can be used as leverage and the tax credit would be more than welcome. The Conservatives have my vote both provincially and federally!
https://www.conservativebc.ca/rustad_rebate
Does it matter ? The point was made in response to the poster saying the SOBO dividend yield is from “talking heads” on the internet. P.S. there is atleast one other 10 figure+ AUM investment manager in Victoria.
Impressive. That sounds like BCI – likely the only Victoria based institutional investment manager that big. That’s the investment manager for the huge BC workers’ public sector pension funds. $250 billion assets under management. Performance – 10 year annualized pension returns of 7.8% https://www.bci.ca/investments-performance/
In Rustad’s defense maybe he sees dead people where others don’t. Just like he sees vaccine conspiracies where others saw public health doing the best they could.
With that asset makeup, should be able to leave most of the house value in the estate for kids etc.
Depends on your payout obviously which is linked to best 5 year salary. 80k union drone vs $300k executive salary at a crown corp. is quite different.
Hmm , 2.5 just doesn’t seem like a lot of money anymore
What would you say a public-sector DB pension is worth?
To retire in some relative comfort now days? Probably paid off house with ~$1.5M in RRSP plus CPP and OAS for a couple starting retirement at age 65 or couple years earlier. So really around $2.5M net worth assuming it’s the run of the mill none updated bungalow in the core.
Need an abundance of cash in old age , start early and make it while u can lol
Are you planning to bury the powerlines too? That is another turn off for me for the older neighborhoods.
Multi generational homes sounds good in theory however many people in favor actually don’t know what it is like dealing with the elderly on a daily basis, especially those with dementia etc.
Then there’s also the conspiracy theories, the climate-change denial, the vaccine denial, lying about seeing dead people, and on and on it goes. smdh.
LOL what? Even the ones that had the project go sideways??
Nine days before the election and the BC Conservatives still haven’t released a costed platform. Bush league stuff from a party that wants to govern a province.
I wouldn’t want a multi generational home , it would be unmanageable pain , glad to have the kids gone and not come back
Saanich approves 93-unit housing project in Gordon Head
https://www.timescolonist.com/local-news/saanich-approves-93-unit-housing-project-in-gordon-head-9633457
Interesting. Latest BC polls show Conservatives ahead of NDP 43 to 40 (decided and undecided voters, MainstreetResearch.ca poll).
Also interesting to see the age breakdown.
—-The NDP support is mainly among “old people” (age 65+) where they are thrashing the Conservatives 49 to 33.
—- All other age groups are flipped the other way, with Conservatives far ahead of NDP (47 to 36) among “younger people.”
Who knew?
Of course we need to wait and see how it shakes out on Election Day when the votes get counted.
The average family will need considerable guidance to get the ball rolling with these new policies/rules/city by-laws even for someone had worked extensively within the public sector who is involved in drafting policies in several ministries.
Doing the pre-construction work (survey, design, getting the building permit approved by the city, appraising the “as if improved” value) and selecting a general contractor (or using construction management contract themselves) also requires serious patience, coordination, and a commitment of time and efforts.
but for the ones who is going or have done it, it worth every moment.
If that’s the case, we should defer paying income tax until we’re dead. Think how much further ahead the government would be.
It’s a pretty good deal as they are paying in future dollars. $5,000 is worth more today than $5,000 ten or 15 years from now.
Patrick, “Overall, the tax deferment program may not cost the government much…”
Yes and where seniors may have had to cut back on spending to afford the property tax, they now buy stuff. That money goes into the economy and rotates through often enough that the various levels of government collect most of it back. When the heirs sell the property they get the selling price back less various deductions – including the debt that the property owner owes BC (usually parent.)
So, what’s actually happening is the senior is subsidizing the economy at the expense of their children.
My doctor says he tells his patients over 70 to make the move 10 years before you think you’ll have to. My Dad just moved last spring. He’s 94! Didn’t heed the advice and not in the right place for the care he needs now. Would have been great for the care he needed 5-10 years ago. People don’t seem able to judge their stage in life.
hence over $2M
South oak bay water views are some of the best , always enjoy the drive on beach
The Reno is a running project (a few decades newer would have been nice), but we are walking and biking to everything. We lucked out on not being too narrow of a street with space to park more than single. That and I have bonus being relieved from having to a buy a money pit RV lawn ornament. Somethings are just better to rent….
I am not a fan of the narrow streets and old houses with single car driveways for most of oak bay. cars parked all over the road etc. just doesn’t have an upscale feel until you get well over $2M.
Actually. in many cases with prevailing rates it is the seniors and others deferring taxes that are subsidizing the government. BC issues most of its 10 year bonds around (average) 4.15%. http://www.fin.gov.bc.ca/Apps/pt/issues_outstanding.html
People are paying 4.95% interest to defer.. Yes simple interest, but it would take more than 8.3 years for 4.15% compound monthly interest to exceed 4.95% simple interest.Therefore, ignoring admin costs, those who end up deferring less than 8.3 years are subsidizing the government. Those who defer longer than 8.3 years are receiving a small subsidy. Given that families and financial hardship cases pay 6.95%, they are heavily subsidizing the government in most cases. Overall, the tax deferrment program may not cost the government much, if anything.
There was some nice deals to be had in the last year in the Broadmead area, especially on the estate sale side of things. Almost purchased up there, but the better half preferred the South Oak Bay – Gonzales area. The Broadmead lot and house sizes are great, but those covenants and the dark from the trees is tough. Lockside school has the best public school ranking around here, but unfortunately, the emersion option is way out in Keating for that catchment. Still probably some value to mine out of that area because it is better than most spots.
I guess it could be a ‘wealth management strategy’, but I don’t know anyone who uses it with that intent. I do know more than 1 couple who’ve used it to stay in their homes.
With 2 good size hurricanes, building materials should get a good bump .
Property tax deferment is used as a wealth management strategy. In this way you can use that money as an investment that could provide a higher rate of return than the simple interest charged.
There are some problems using this strategy such as if you have a mortgage, as the loan will have to be paid back if you change lenders.
Patriots, sorry simple interest on a rate that is arguably high for its purpose isn’t enough to call it a subsidy. It allows people to stay in their homes longer, reduces health care costs for BC, and pulls the equity out of the home and into the BC economy.
A lot of families don’t have the financial capacity or other to build a multi-generational home from scratch. If municipalities were half reasonable it would be a lot easier to buy an older home and then build the parents a one level townhome.
These people are retarded. Buy the 500k wood framed then spend 300k to buy another property somewhere else in the world for wintering and still have 500k left.
“However, where is the subsidy?”
Simple interest. The unpaid interest amounts don’t get added to the principal on which subsequent interest is charged. Try that out with your mortgage or credit card.
SOBO for those wondering. SBOW was referenced by internet armchair general that miss quoted the ticker which happens to be another name…….
@Marko maybe they waited too long? I know of two such families within a 10 minute walk from where we live. Both built intergenerational homes (albeit when the grandparents were still relatively young – not elderly).
Damn, already up 16% since it appeared in my portfolio randomly.
I’ve helped two sets of clients buy properties in Gordon Head for this purpose. Despite all the due diligence upfront (no easements and no rights of way across back yard, no trees, enough gravity slope for sewer, etc.) still turned out to be a disaster. One building permit took 14 months then another 12 months to build by the time it was finished one of the elderly parents had already passed away and the husband didn’t want to move in by himself. Also, as this was during covid the cost to build increased $75k while they waited for the building permit.
Not sure if they ended up renting out the garden suite.
Real life issue I run into is people want to sell their dated 70s/80s/90s home and then they want to buy a newer townhome or concrete built near new condo with ocean views.
If people were willing to sell their $1.3 million dated Oak Bay or Broadmead home and buy a dated 80s or 90s wood-framed for 500k it would make sense financially, but no one wants to do that.
@Frank I wonder if part of the solution is to plan for intergenerational living. My in-laws could afford to build something in our backyard (for example) and we wouldn’t mind them being there. Sure would be easier if they need help later. I think it will largely come down to this — those with family willing /able to help will fare ok, others not so much. The resilience will be in the family unit. I personally do not view it as a burden. Unfortunately I think quite a few boomers do think it’s a burden and so it’s difficult to plan ahead because they don’t want to talk about it openly. That is the situation we are in with our boomer parents, who I bet also think of themselves as potential future burdens.
Just to bring this back up re: BC Property Tax Deferral, currently at 4.95% regular and 6.95% for families with children or financial hardship. Does it allow people to stay in their homes longer, hopefully. However, where is the subsidy? My kid’s mort rate is 1.79% fixed until 2026; we have one at P-1.2 Var. Soon to be, what, hopefully 4.75%? Where is the gifting portion of the PTD?
What does keeping people in their homes longer do for the BC Gov budget?
“I think the number of people using property tax deferral will grow.”
Sure it will, because like all demand side subsidies it gets built into the market, making housing more expensive. In the end accomplishes nothing for affordability.
If there aren’t enough options to downside to, the answer is to build more.
Couple of houses in broadmead trying to get out with losses after buying in 2022/2023.
People seem to overlook the fact that more and more seniors will still be paying a mortgage in retirement as mortgages take longer to pay, people are buying later in life. Fifty in Canada in my case. Downsizing to an owned property that’s smaller, say to a townhouse instead of house can be impossible at today’s prices when you add in strata. Even if you can afford it, can’t qualify if you need a mortgage. Not many homeowners want to go to renting after being a homeowner. I have a home and would move into a townhouse if a nice one could be had but in most cases it doesn’t work financially. When I retire it will be even more impossible. I think the number of people using property tax deferral will grow.
I kept my mother in her house until she was 94. When she became unable to walk, the proper care facility for her was unavailable. I had to rely on home care and the burden was placed on me. She passed in 2017 a few months shy of 95. Two of my neighbors are in the same situation, Men in their 60’s caring for their mothers who are in their late 80’s and disabled. Unfortunately, I think this is all too common in our society. We can’t rely on the government to care for every drug addict, mentally challenged individual, dementia patient, and elderly that are unable to care for themselves properly. It would bankrupt our already bankrupt country. In my lte 60’s, I worry about my future. I don’t want to be a burden.
“I think you might be underestimating just how difficult a fundamental change is once people reach a certain age.”
As I pointed out, I am a certain age. I live in a house in a big city, but not the same one I had twenty years ago. I have family members who’ve moved to a house in a smaller city. Some who still have the same house. I have friends who have downsized from their previous houses into a retirement community or mobile home park.
And let’s not forget that people my age had the chance to get into the market at prices today’s young people could only dream about. That gives them choices. I think subsidizing people to stay in houses they no longer need is completely wrongheaded. Let the free market handle the situation where people want to defer paying property taxes. I see ads for it on TV all the time.
Turn and face the strange
Ch-ch-changes
There’s gonna have to be a different man
Time may change me
But I can’t trace time
Hundreds of thousands of Canadians own property in Florida. I’ve read that 500,000 Quebecers alone have a place there. Even condo towers will become unliveable. Wonder what impact this could have on Canadian real estate.
How can housing supply increase when resources are concentrated on rebuilding?
One huge assumption everyone is making is if you increase land taxes or DCCs or whatever that it actually goes into replacing that sewer line.
It first goes into the muncipal budget then once they are done a bunch of hiring of new useless positions and creating more beuracracy whatever is left over goes into the sewer line which is a fraction of every dollar.
Missing middle emails I am being forwarded from a couple of builders just keep getting more and more insane. I talked about 708k in civil costs on a missing middle project….same project. City wants brand new sidewalks but in a place where they didn’t exist before, ok. The new location where the city wants the sidewalks requires removing city trees and now they want the builder to pay 30k tree replacement value 🙂 because they want a sidewalk in a location that takes out city trees.
Can’t write this stuff.
Page 18 of the October corporate presentation, you can do the math. P.S. my shop has direct access to senior management to most companies in the world and that includes every single Canadian name. Maybe Elon musk won’t take our call but the CEO of RBC does and will continue to do so.
Thanks for clarifying this. I think that should make it easier to implement some form of means-testing the property tax deferral. Which would be a compromise compared to just taking it away altogether. In taking it away altogether for everyone & saying it’s ok for older people to be forced to downsize if they didn’t plan adequately, I think you might be underestimating just how difficult a fundamental change is once people reach a certain age.
I don’t think compromise is a bad approach to a lot of things. But then again, I’m getting older. When I was younger, more things seemed black & white.
Land taxes do pay for the maintenance of the existing sewers etc. But when the existing 8″ line has to be dug up and replaced with a 10″ line to accommodate the increased density your new house created, why should I and my existing neighbors have to pay for it?
Greg, “using eg. land value taxes. But seems like a taboo subject for some reason” We already pay land value taxes. Look at any BC Assessment and we see the valuation that property tax is calculated on is based on land and improvements. Why do we need to split it out further and only apply the tax to people that have land. I mean, unless we want to take away that land, maybe force the seniors into a condo? Can’t think of any other reason to focus on taxing one group over another – you have it, I don’t, I want BC to take it away.
When talking about infrastructure, that everyone uses, why wouldn’t everyone that benefits from it pay their share?
Re: Development Cost Charges
Why make the developer, and therefore the first purchaser of a property, shoulder development costs, when the benefits will be enjoyed by generations to come?
You’re basically locking those costs into the price of the property. Makes no sense.
Would be far better to even out the costs over generations using eg. land value taxes. But seems like a taboo subject for some reason?
That’s a projection from the talking heads. No dividends yet. But we do know that dividends from old TRP will be split between TRP+SBOW. Old TRP yielded 6%.
Thursty is gona be busy with renos come next year with the 90% LTV refinances to add a suite.
Logged into my TD Waterhouse App yesterday and had 320 shares of SOBO sitting in my portfolio which I didn’t buy so had to Google what’s going on. Looks like if you own TRP you got 0.2 shares of SOBO for every share of TRP you own. Haven’t had time to read up on it in too much detail, a bit busy with out ventures at the moment.
@Marko, if you like dividend stocks have a look at South Bow (ticker: SOBO on the tsx). Very recent spinoff midstream energy company with ~9% yield.
Thanks Leo for the summary!
Lumber demand is down, that means they’re not building. So much for increased supply and lower prices.
https://househuntvictoria.ca/2024/10/06/vote-housing-a-review-of-the-platforms/#comment-120660
Good to know…hopefully helps prices become more affordable.
https://househuntvictoria.ca/2024/10/06/vote-housing-a-review-of-the-platforms/#comment-120661
Thanks for your reply, Whatever. Very interesting about the AI programs, and yes it should definitely be considered collusion imo.
The saving grace in RE is that you can still monetize it even if the value is down with rental income and tax write offs provided you have risk managed the leverage properly (e.g. didn’t go cashflow negative). You can try that with dividend stocks but likely the dividend will get cut right when the stock is getting killed.
Every professional investor has a target price of when to exit a position (whether it’s up or down). That target price gets revisited regularly to account for new information.
Lol I don’t think you would start an $88k position in Tesla stock much less an $88k position in Tesla calls. Apparently he went all in on calls three times, $88k to $1.2M then $1.2M to whatever that came out to be and then once more.
That old game show “deal or no deal” was a good glimpse into human nature. A contestant would describe himself as flat broke and unemployed in life, and be up $250,000 in the game show. But they’d be happy to go double or nothing to hope to turn the $250,000 into $500,000. And 50% chance they walk away with nothing. Similarily, this Sooke guy is described as a “carpenter”, who was up $415 million and lost it all.
That seems to be sound investing advice to have an exit strategy such as when the stock doubles it’s time to sell. The same should be true for investment properties.
Andrew Carnegie, one of the wealthiest industrialists of his day followed this logic. He bought stocks that had growth potential and sold them before they peaked as his view was to leave something for the next purchaser. In that way he rarely got caught in a down cycle of falling prices.
It’s not how much you make – it’s how much you keep.
NOTE: Trump shares are up today – Elon must be buying. Let’s see if there is a sell off this afternoon. Pump and dump.
That mentality would not get you to even $1M none the less $415M.
I remember I bought $5,000 worth of Lululemon @ around $5/share back in 2008 and cashed out the minute it go to $10. Now it is at $276/share.
I never purchased Tesla stock but if I had the minute it doubled up I am out. The amount of risk tolerance and luck to get to $415M is next level. If I started at 88k I would have been out before 200k.
Sadly for me, Vicre is right on there. I’m too quick to sell my winners and too slow to sell my losers – results in poor performance. That said, I have a friend that carried crypto into many millions but held too long. Got out after it had already come down. Still a paid-off house etc but not on top of 6 months in the Bahamas.
Real Estate has been far more lucrative for me with my only regrets being the properties we’ve sold.
That mentality would not get you to even $1M none the less $415M.
I’d like to think that, if I were this guy, I’d be able to stop at $50M and get out.
Buy a mansion in the Uplands, get a few nice cars, and still have tens of millions left over for philanthropy and a rainy day.
Day trader in Sooke files lawsuit against advisers, claims $415M loss
https://www.timescolonist.com/local-news/day-trader-in-sooke-files-lawsuit-against-advisers-claims-415m-loss-9625908
The property tax deferral is administered by the BC government, the municipalities have no role in it apart from having their tax bills paid by the provincial government rather than the property owner.
“forcing asset-wealthy-cash-poor seniors out of their homes in some situations”
“some situations” meaning not putting aside enough money to maintain ownership of the residences that they don’t actually need anymore.
I don’t think there’s anything wrong with someone in that situation having to downsize, and I say that as a homeowner who would be eligible for senior’s deferment if I still lived in BC. My current province has only partial deferral which is means tested.
Well, I think many or most people would agree that while the blanket tax deferment is out of hand, simply eliminating it would have unintended consequences such as forcing asset-wealthy-cash-poor seniors out of their homes in some situations. I realize your bias might be that these “unintended consequences” are a positive development & if they force turnover in areas like Oak Bay, so much the better. But I wouldn’t agree with those sentiments personally (full disclosure: no I don’t live in OB, and no I don’t use the deferral).
I agree the deferral is just too rich. It should properly be means-tested. I’m not sure if the mechanics of means-testing the deferral would be within the competency/bureaucratic reach of municipalities, though.
I agree with this. I recognize that Rustad has proposed some policies that also go to spending vs. being fiscally conservative, and those things make me scratch my head, but at the end of the day, I just believe that (i) politicians will say just about anything to get elected, (ii) the Conservatives are likely to find themselves more inclined to rein in spending than the NDP, which has wild deficit spending within its DNA under Eby, and so (iii) you gotta place your bets, so that’s mine
Yes exactly. For example, Starlight which is one of the big rental bogeymen, is a privately held corporation not a REIT. Ironically it took over one of the bigger REITs, Northview, a couple years ago. At least you get transparency from a REIT as it is publicly traded. I get the impression that some people are using “REIT” simply to refer to any large private sector landlord, without knowing its actual corporate structure.
Disclosure: I own three REITs but only one owns residential rentals.
Collusion is one of the pillars of capitalism.
Fern they don’t have to buy up the apartment buildings. They just have to pay for the software and agree to the terms to use it. If the owners physically got together in one room and shared information about leases and suggested prices then that would obviously be collusion. Instead they share information through a third party software program and agree to the software suppliers terms to use it. Is that collusion?
I suppose someone needs to design an AI program to detect an AI program. Although there is controversy around the effectiveness of AI tools to detect AI programs such as ChatGPT.
And yes I am using machine learning and AI interchangeably.
There might be 5 million rental units in Canada, but how many are vacant? Two percent?
REITs own and operate a combined portfolio of about 120,000 rental housing units across Canada. This represents about three per cent of the country’s rental market. The government does not have clear data on how many non public ones are in Canada. And then there are property management companies. And I am not suggesting that all of them are using the AI software. But if I were a property manager – I would.
Three percent doesn’t sound like much, but if you live in a city with a low vacancy rate it could have an effect on rental and vacancy rates.
We also have to consider from whom CMHC gathers the data on vacancy rates.
There is a silver lining, in that most cartels fail as there is economic incentive to cheat if the occupancy rate drops too low. We do have a lot of purpose built rentals coming on line in the next year along with a net loss from interprovincial migration, and the changes to short term rentals. The new(er) PBRs are expensive units but they eventually have to get heads in beds or potentially face bankruptcy.
Being Canada we likely won’t see much here, if anything, until there is a decision in the US anti-trust case.
https://househuntvictoria.ca/2024/10/06/vote-housing-a-review-of-the-platforms/#comment-120657
They buy up a number of buildings in the same area then set the rent higher and then other landlords start raising their rents to match. They can also leave apartments empty longer than if they owned just one building.
It isn’t just a pricing program. It’s much more.
https://youtu.be/cwlwrZst7d0?si=aFAs8ZXJhUqeghvP
5 million renter housheholds in Canada, thus I assume slightly more than that number is the total rental stock of all types.
CAP REIT, the largest residential REIT in Canada has less than 60000 units in Canada (adding apartments + manufactured home pads)
Doesn’t sound like monopoly/oligopoly pricing power to me.
NDP have made more significant reforms on supply than we’ve seen in decades. We need way more, but your statement just isn’t accurate.
As for conservatives, if their platform was all about supply and property rights they would not promise to repeal bill 44 (which removed impediments to supply and increased property rights). Everyone’s playing politics here to collect voters rather than sticking to higher ideals.
I’m interested to hear about the results of the FBI investigation of YieldStar on price fixing, but in general I doubt there’s much here. People are looking at cities where there’s been super tight vacancy rates and as a result big rent increases and because landlords are using software to estimate market rent they conclude that must be the reason. If there was evidence of rents being jacked up in high-vacancy markets that would be compelling, but we don’t see that. At worst I suspect the impact of this kind of software is that there may be a one-time increase in rents if landlords previously had poor information about market prices and now can hit it more accurately.
Friends of ours live in one of these corporate rentals near Redmond. They were considering renewing their lease and said they could check at the rental office for the live lease rates at any give time and the number would go up and down with the rental market.
When your AI program tells you to up your rent by 32% but the provincial allowable increase is 3% (BC 2025) I question how much difference this makes
In general the concern around REITs and financialization is way overblown. The more you look into the evidence, the weaker it becomes. There are some real concerns about tenant abuses by large firms in the US, but that’s mostly because of weak tenant protections so it’s less of a problem here.
I don’t see any reason why a privately held company that owns rentals or the average individual landlord will be less motivated to maximize rents than a REIT. Big corporate landlords are rent maximizers but if we look at eviction data the large majority of evictions are from individual landlords taking back their units. I’ve yet to see any evidence of REITs somehow magically being able to crank up rents that wasn’t much more easily explained by a housing shortage.
What did I say!
Yep. Australia has a lot of transparent auctions and their house prices are just as high as ours.
Both sides have said the immigration level is too high. I think this problem is on the verge of being solved. Liberals are panicking on it and pushing through a bunch of reforms to reduce non-permanent residents. My bet is growth rate in 2025 will be back to normal. If not, the federal conservatives will bring it back to normal the year after.
Capreit seems pretty sizeable in Victoria. 27 apartments with rentals right now. I heard Starlight Investments was growing. There are probably others. Some pretty big property management companies now also, in terms of market share. Maybe growing as people just don’t want to deal with their rentals themselves.
I realize that the deferment is simple interest but not exactly a gift, currently at 4.95% regular and 6.95% for families with children or financial hardship. Pretty sure there’s a better place to start.
B.C.’s fiscal position is set to worsen in the near-term largely on the back of higher spending across priority areas like healthcare, cost of living initiatives, affordable housing, climate change, and public safety.
B.C. has some room to absorb these deficits as it remains one of the least indebted provinces in Canada. However, over the three-year projection horizon, net debt-to-GDP to slated to increase.
Did you seriously think that what the NDP has been doing was going to be free!
How about we start by eliminating the property tax deferment that has spiked over the last five years from $800 million to $1.6 billion. While Baby Boomers have seen their property values increase by 50% over the last five years. Nope- not a chance on that sacred cow.
The difference being the NDP deficit is real, and the Conservative deficit is unknown since they aren’t elected. The obvious scenario is if elected, the Conservatives will discover finances are much worse than they thought, and therefore cancel the spending plans. That shouldn’t surprise you if it happens.
I would expect the deficits to be lower during a conservative government, but it will take years of restraint and cutbacks to undo the damage done. NDP took BC from a balanced budget to a $8.9 billion deficit in just a few years. So yes, I agree with you that this is the NDP’s “biggest weakness”. And one we will all be paying for during the next decade, regardless of who is elected.
FYI Caveat
https://breachmedia.ca/canadian-mega-landlord-ai-pricing-scheme-hikes-rents/
“Best” for real estate agents and others whose livelihoods are connected directly to transaction volumes, anyhow.
The same advice can be given to investing in real estate. Especially when you’ve been wiped out by a hurricane and insurance won’t cover you.
Based on the previous 10 years, there’s a 60 percent chance that October sales will be higher than September and a 50 to 60 percent chance that the dollar volume or the median price of residential sales will be higher than September.
Not a sure bet, but better odds than you would get in a Casino.
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what about in historical terms for Oct?
Should the sales pace continue since 2010 should be 5th best year out of the 15 years.
Slightly housing OT. Conservatives promising to bring back plastic straws. https://www.conservativebc.ca/bring_back_plastic_straws
Oops it’s a federal regulation though.
I saw Green leader Sonya Furstenau talking about housing. I liked some things she said (taxing land more than income), but she was going on about REITs and how the ownership of apartments by REITS is behind why rent is so expensive. Also seemed to imply that REITS are deliberately keeping units vacant to drive up rent.
I am not super knowledgeable about this but it didn’t smell right to me:
1) residential REITs have been around for a long time in Canada. What has changed that they are suddenly a problem?
2) Unless the REITs are illegally colluding on rents I don’t think any of them control enough of the market to be a price setter (possibly in some small towns, but not in Vancouver, Victoria, etc.)
3) If a REIT kept units vacant to jack up rents then 100% of the cost falls on them but the benefits of any rent increase are shared with all their competitors.
4) Reported vacancy rates don’t support the idea that lots of units are being kept vacant.
Anyone have any thoughts about REITs and their impact on rents?
PS – Greens also support vacancy control. NOT a good idea IMO.
what about in historical terms for Oct?
Indeed. And seemed like a much more measured, middle-of-the-road person the way he approached a lot of things. Now everything is more polarized.
I’ll be holding my nose & voting Conservative. We can’t afford these ridiculous deficits. Yes, some of the Rustad items make you shake your head, while others resonate with me (like allowing exemptions from no-fault liability under ICBC rules for cases of significant injury), but mostly it’s about the deficits for me.
>>> Some local polling would be helpful. I’d like to know how much support the Green and Conservative candidates are getting this time round in Oak Bay-Gordon Head. Do I need to vote strategically or not?!
338Canada site say Victoria/OB/south Saanich are either “safe NDP” or “NDP likely”. Except “North Saanich and Gulf Islands” which is leaning Green. Up island in Nanaimo-Lantzville and North Island things are much closer – a tossup.
I don’t think this is based on significant polling in each of these ridings though.
https://338canada.com/bc/districts.htm
Some local polling would be helpful. I’d like to know how much support the Green and Conservative candidates are getting this time round in Oak Bay-Gordon Head. Do I need to vote strategically or not?!
Even progressives like me have to admit that this is a huge deficit to be running.
Eby has many strengths but shrewdly managing the budget doesn’t appear to be one of them. His predecessor, John Horgan, was much better at it.
I think I’ll be keeping my vote to the NDP, mostly because in other non-housing areas I don’t expect the Conservatives to deliver. However, since you said to keep it to housing, while I don’t think either party will be the deciding factor in really moving the needle on the housing shortage, at lease the NDP has done SOMETHING with re-zoning and non-market housing in the last few years. I also am a believer in the long-term payoff of some step-code requirements (but agree they should be costed more before implementation)
The Conservatives tax cut is a bad idea, and their platform doesn’t at all convince me that anything substantive will happen under their watch.
While I doubt the NDP will move the needle very far, at least they’ve moved it, and I’m happy with a lot of their other efforts in other areas (doctor pay, ICBC etc.), as well as being the only party that seems to actually implement anything at all on housing. My .02c.
Good article, but you’ve drawn the wrong conclusion and made the wrong choice.
I’m shocked with how you contradict yourself by staying the biggest challenge is timelines and the Conservatives are bringing up public home insurance, but you still think NDP are a better choice on housing? Lol.
Conservatives’ platform addresses the biggest challenge to housing affordability, supply.
NDP is all about government control of housing and removing private property rights. I have actually lobbied the NDP for the past two years to help with affordable homeownership options, and the NDP are “all in on rental”, not recognizing that they’ve bottlenecked and destroyed the housing continuum. They don’t care at all about homeownership as they are ideologically driven to push government subsidized, managed, and built rental housing. These communists should be driven from the country.
And think about it, who does affordable rental help mostly? It’s newcomers and temporary foreign workers, people who have no stake in our communities. Let’s also have the parties talk about lobbying the feds to cut immigration to 1980 levels.
As for talk in the comments about “tax-cuts” and “windfall”…it amazes me that people still think that tax cuts are governments giving money away…it’s the public’s money, government has no moral right to it. The fact that we’re in an NDP structural deficit means government is overspending and programs need to be cut…give me my taxed money back and let’s stop supplying drug addicts with heroin.
Less government, less tax, more housing supply, more affordable homeownership options, less rentals.
Month Oct Oct
Year 2024 2023
Net Unconditional Sales 140 407
New Listings 271 1,100
Active Listings 3,239 2,756
At this sales pace we will be 50% higher than last year.
The provincial budget deficit for the coming year is forecast to be $8.9 billion by BC Finance Minister Katrine Conroy. https://www.cbc.ca/news/canada/british-columbia/bc-businesses-election-platform-1.7319323#:~:text=Last%20month's%20year%2Dend%20report,previous%20forecast%20of%20%245.9%20billion.
And this is in a growing economy, imagine what it would be in a recession.
Reality is we can’t afford any of these giveaways and tax cuts, and this reality will become apparent the day after the election, and have almost no chance of being implemented as described.
Whether its the NDP or Conservatives, they’re going to need to cut back spending, and stick to the basics – healthcare, social assistance and education. Spending on costly housing programs as described in Leo’s article should be stopped or slashed until the deficit is under control.
and realistically the feds won’t do anything to actually help the situation. They literally just relaxed the mortgage regulations to increase demand and prop up the market, lol.
Lol, I last voted like 1984 , don’t care who gets elected won’t be bothered this time too
This will improve transparency, but based on the my 20+ experiences in court on foreclosures I think it actually might drive up prices. Whenever I show up to court with my clients they see all the other buyers/bidders and often I’ve had to talk some common sense into them to keep them from overpaying.
Outside of court, in regular bidding wars a lot of my clients that have been outbid over the years have comment after seeing the sale price “damn, if we knew it would sell for that much we would have gone a bit higher than that but didn’t want to go in with a stupid high number bidding blind.”
The interesting part is how they plan to handle the other terms of the contract? There is a >100k difference in value at some price points between an unconditional offer and an offer subject to the sale of a property.
I’ve voted once in my life and I can’t even remember if it was the last provincial or federal election but I voted green as a protest vote and I won’t bother voting again – waste of time especially with the first-past-the-post system we have in Canada.
Politics is just a bunch of non-sense imo that won’t help to solve anything. For example, cancelling Bill 44 is just a political calculation the Conservatives are running in hoping to pick up NIMBY votes.
Then we have NDP taking away property rights and playing their own political calculations…”Lift the “no-pet” clause for purpose built rentals.” Stupid governance, but brilliant politics. I’ve read hundreds of comments online now with people giving their vote to the NDP over this no-pet crap (even thought you have plenty of purpose build rental buildings that allow pets – many actually promote it and some have pet friendly amenities such as https://bosaproperties.com/residential-portfolio/pandora
Funny how when you build a lot of purpose built rental buildings and vacancy increases slightly everyone become pet friendly. Wonder how that works.
On the whole there is no help and people are sadly mistaken if they think the government will do anything to solve this housing problem. I don’t think society itself is not prepared to solve problem. We want to save the environment and every single tree, but at the same time we want to provide affordable housing, amongst a million other conflicting viewpoints.
Has either party mentioned lobbying the feds to reduce immigration?
That’s the only realistic way to improve the situation in the short term.
I think people need to temper their expectations about what our governments will do to solve the housing file.
Best case scenario from this election is that quadplexes and sixplexes can still be built anywhere. At least, that is incremental progress.
Most of the rest is just window dressing. It won’t affect your chances of affording a home in the slightest (although tax cuts are always welcome).
The only other policies that are likely to move the needle are allowing low rise apartments by right, increasing property or land taxes, and significantly decreasing development fees and taxes.
I don’t see any attempts to discuss the first 2, and it sounds like mostly talk on number 3.
So don’t stress too much about the election and enjoy the political theatre for what it is.
The tax credit is itself a windfall, since it wasn’t in effect when the owner bought. That the owner may have bought at higher than today’s market price is beside the point.
No windfall in someone bought in 2021/2022. Go look on realtor.ca, quite a few trying to get out with >100k losses.
The most egregiously bad proposal is to give tax credits on mortgage interest. This would be a windfall for existing owners, would increase inequality, and would encourage owners to take on and continue high levels of mortgage debt. For potential owners, it allows them to bid more and will drive up prices. There is plenty of analysis from south of the border as to why this kind of policy is a bad thing.
BC already has the biggest array of handouts to home owners in the country and it doesn’t need more.
More generally, and this applies to both parties, it’s no time to talk about tax cuts given BC’s fiscal situation. Don’t even talk about tax cuts until you’ve balanced the budget.