Ownership home construction at 30 year low
Something I’ve been puzzling over is how active the market has been recently, despite the fact that affordability is still quite poor relative to historical norms. Even setting aside single family which is fundamentally supply constrained and thus will only get less affordable in the long run, we aren’t anywhere near where the condo market has turned around in the past.
In addition, we are only some two and a half years into the current correction, while the last three corrections lasted between 5 and 7 years.
There’s really two possibilities here:
- The current surge of activity is temporary. There’s certainly the possibility that this is just a couple hundred frustrated buyers that were sidelined by high rates and decided now was the time to jump in. That pool could be shallow and quickly exhausted, or counteracted by a pool of frustrated sellers that list in the spring and keep the market balanced.
- Something is different this time that would cause a correction to be shorter-lived than in the past.
For the second, one difference is – as mentioned last week – the unemployment rate, which has been stubbornly low in Victoria. That wasn’t always the case. In each of the last three corrections, unemployment increased substantially in Victoria (to over 6% in 2011, over 9% in 1995, and well into the teens in the 80s). Victoria’s job market was also often lagging more robust cities in the country in those days, whereas today we have the lowest unemployment figures. And it’s not just the public sector either. Ottawa has twice the rate of public sector employment but a substantially higher unemployment rate.
Another difference is that we simply aren’t building very much housing for the ownership market. We’ve talked about the boom in rental construction before, and that’s a good thing given we barely built any rentals for several decades. But the other side of that is a real lull in ownership housing being built, which is a combo of a multi-decade low in single family construction combined with the switch of the condo market to rentals. At 380 starts of non-rental units in the last 12 months, it’s the lowest on record.
Looking back at the correction in the 2010s and mid 90s there are hundreds of homes that would have hit those weak resale markets that currently aren’t being built. That’s part of the reason why even though we have seen inventories increase quite a bit since 2022, we are still far off the 4500+ listings we hit over a decade ago. What’s behind that? Mostly it’s high rates and poor affordability dampening appetite from condo investors, attractive CMHC financing bringing developers to rentals, and a dwindling supply of greenfield land that is constraining single family. Rates are coming down and CMHC is putting the brakes on their financing, so some of this may reverse in the coming year. However the flood of rentals hitting just as population growth is likely to slow has been stabilizing rents, and may even decrease them. Not a super-attractive environment for condo investors to jump back in.
I do believe there’s an opportunity for developers who can buck the trend and build things for ownership with other financing methods. Right now, there’s remarkably few competitors. But I still wouldn’t be banking on big price appreciation in the condo market. We’ll see some swings and perhaps we’ll erase the losses we had since 2022, but before any big price moves I still believe we’re going to need more time for lower rates and higher incomes to improve affordability in the condo market.
Also the weekly market activity:
| December 2024 |
Dec
2023
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 118 | 329 | |||
| New Listings | 163 | 383 | |||
| Active Listings | 2665 | 2132 | |||
| Sales to New Listings | 72% | 86% | |||
| Sales YoY Change | +11% | +3% | |||
| New Lists YoY Change | +7% | +6% | |||
| Inventory YoY Change | +9% | +26% | |||
| Months of Inventory | 6.5 | ||||
Speaking of temporary, sales have come down to closer to their year ago level. New lists as well have recovered in recent weeks, matching the level from last December after a bit of weakness in the tail end of November.
I wouldn’t normally read much into any kind of December year over year comparisons because it’s such a quiet sales month. A few extra listings or sales and the percentages swing wildly. Right now we’re comparing to a little bump in activity this time last year, which is half the reason the gap narrowed so much in just a couple weeks. Wednesday we have the next rate announcement and you can bank on another cut. With the weak nationwide data, don’t be surprised if it’s another half percent.
Biking in saanich has gotten way better in recent years. The Shelbourne and McKenzie protected lanes alone are a gamechanger.
New post: https://househuntvictoria.ca/2024/12/17/freehold-townhouses-the-future-of-family-sized-housing/
How’s that new Crystal pool replacement coming along? Feasibility study in July put the replacement cost between 209 to 233 million. Well over the 70 million anticipated in 2017. Makes 35 million sound like a deal.
https://cheknews.ca/crystal-pool-replacement-project-could-finally-move-forward-this-week-1201467/
Because public pools lose money and need subsidies to operate. This one was built and then shut down over the pandemic causing significant losses the YMCA could not recover from – 10 million in losses. Lifecycle management costs for public pools are also super costly – have to have tax dollars subsidizing this.
A property along Arbutus Drive that was originally listed at $3,290,000 sold for 10 percent under asking price after 549 days on the market.
Similarly a property along Prospect Lake. Original ask price $3,350,000. Sold for 16 per cent under asking after 267 days
Another along Wallace Drive. Original ask price $2,499,000 and sold 22 percent under ask after 320 days on the market.
How about a new condo along Oak Bay Avenue. Originally asking $1,849,000 and sold for 19 per cent less.
Perhaps the housing market slowdown in the rest of Canada is having an impact on our high end market? If you can’t sell your home in Toronto or Vancouver at a good enough price then you’re not likely to pay the high Victoria prices either.
If you are into biking then oak bay will be preferable to comparable places in Saanich
When deciding on a place, I tried to work my way out to Gordon Head and Mt. Doug a few times during rush our via Shelbourne and Ceder Hill. It really helped me decide to stay in closer. Almost every rush our commute now 10x worse than pre-pandemic. My bike ride was great today, fewer riders in this weather blasting past me when I stop at red lights, stop signs and crosswalks.
They’re probably just filming a YouTube documentary.
That is true. The drive from South Oak Bay to downtown can take almost 20 min during rush hour, if you are looking for easy accessibility to downtown then try Rockland.
I would think the % of commuters in South Oak Bay is smaller than Happy Valley. Also, easier to bike from Oak Bay to downtown vs Happy Valley to downtown.
Good news for leveraged landlords:
Mortgage interest costs slowed for the 15th consecutive month. But rental prices grew at a faster yearly rate in November
Maybe if you are biking but try driving from South Oak Bay to downtown during rush hour, it’s better than the westshore but still congestion. I suppose you can try the long way via dallas road…
If you are healthy and own a house in South Oak Bay and don’t have to deal with the every increasing congesting, life is pretty charming in Victoria. If you are having to take out a 700k mortgage to buy a stick frame townhome backing onto Happy Valley Rd so you can spend your day in congestion after you’ve wait 10 hrs in emerg….not sure how charming that is.
Canada’s annual inflation rate ticked down to 1.9 per cent in November, with the slowdown in price growth mostly driven by lower mortgage interest costs and cheaper travel tours, Statistics Canada said on Tuesday.
“Lots of people from abroad do vehicle tours through the downtown eastside.” – not just here in Victoria or even in Canada. Called “ghetto tourism” and in some places is quite dangerous/stupid.
Qt, sunny days are just around the corner , with lower for longer rates and easier credit we are entering a real estate super cycle . Prices go up and people start feeling great
Stewie didn’t strike a very good deal and left someone else to clean up the mess?
Can someone explain to me how, in just eight years, a brand new pool in one of the fastest growing cities in the province (Langford) couldn’t make the financials work to stay operational?
Langford council approves spending up to $35M to buy Westhills YW/YMCA
https://cheknews.ca/langford-council-approves-spending-up-to-35m-to-buy-westhills-yw-ymca-1229588/
IMO, the sunny way of looking at things are now catching up to us mentally and economically.
Oil price is high and our dollar is at $0.70 USD, falling GDP, run away national deficit, fuel and commodity price is 70-80% higher than a decade ago, housing costs has more than double, health care is worse, drugs use and homeless is at an all time high, and unemployment is rising. If this isn’t failing then I don’t know what is.
Having said that, I hope that our government smarten up and turn this ship around from this disaster, stop being wasteful, encourage efficiency and economic growth, invite foreign investment, forge new friends and rekindle old friendships through trades.
I was talking about industrial production. If you take out our resources, especially oil, our per capita GDP would be pathetic. Japan and Germany have little to no oil production, they actually make things the world needs. We just pull raw materials out of the ground, with large machinery that require few people to run.
I remember touring needle parks in Europe in the early 90s that was way more shocking
We’re NOT much richer than we think. We’re poorer than we know.
Although on GDP per capita basis, yes, Canada is still high compared to the G7 and other countries, it has been virtually flat for the past 10 years. Same for the UK, Germany, Japan, and France.
Meanwhile the Mexico but especially the US have pulled much further ahead.
On relative terms, we’re about 40% poorer against the US. So is Europe and Japan.
That’s why we feel it more intensively than before, because our neighbors are much wealthier.
Lots of people from abroad do vehicle tours through the downtown eastside.
What kind of host is eager to show his guests the worst of his city?
BOC’s preferred measures are cpi-trim and cpi-median, and were both unchanged
https://www.bankofcanada.ca/rates/indicators/key-variables/key-inflation-indicators-and-the-target-range/
Reuters: “ The Canadian central bank’s preferred measures of core inflation, CPI-median and CPI-trim, were unchanged, though the previous month’s data were revised up by a notch. CPI-median – or the value at the middle of the set of price changes in a month – remained at 2.6%, and CPI-trim – which excludes the most extreme price changes – stayed at 2.7%.“ https://www.reuters.com/markets/canadas-inflation-rate-ticks-down-19-november-2024-12-17/
Thanks for the heads up, more complicated than I had thought.
> Canada’s GDP-2.14 trillion usd. Japan GDP-$4.21 trillion.
The discussion was about GDP *PER CAPITA. Japan has 3X population of Canada. Germany is 2X Canada. Which means you divide the GDP by the population.
And that’s what the world bank did and reported the gdp per capita for all countries in 2023.
That’s what both Leo and I have cited,.
The numbers are here, https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
and you can see that Canada gdp per capita (world bank data for 2023) is slightly above Germany and way above Japan.
Canada is $53, 372 (gdp per capita, usd)
Germany $52,748
Japan $33,834
Don’t get too excited about the inflation number as the most watched number is the core trim inflation number that accelerated for the 3rd month in a row to 2.8% and this will trickle down to the top line number.
Canada is still screwed and the housing market will be flat again at best next year as I said it would be this year.
Started making calls about the backyard build out, quite a few hungry contractors out there!
Introvert, yep could c bank rate below 2 points this year , and lots of room for the dollar to slide down to 65 cents , currency wars lol
Germany GDP-$4.71 trillion usd; Canada’s GDP-2.14 trillion usd. Japan GDP-$4.21 trillion.
Inflation down again, so no pressure on BoC to think twice about continuing to lower rates:
Canada’s inflation rate fell to 1.9% in November
https://www.theglobeandmail.com/business/article-canada-inflation-rate-november-live-updates/
No paywall: https://archive.ph/OCRjT
Maybe a change at the top for the liberals . But overall we are heading in the right direction economy wise . I think 2025 is going to be a turnaround and there’s so much to be thankful for
All modern developed nations, including Japan, Germany and the US are welfare states.
@Peter – I agree. The biggest problem we have living here is that it’s a bit boring. It’s expensive but doable.
https://www.timescolonist.com/local-news/crd-increases-tipping-fees-at-hartland-landfill-9965283
It kind of is, but everything is relative, and we’re doing relatively ok. We’re always (and rightly) comparing ourselves to our southern neighbour and its long run of US exceptionalism. But the examples you cite are not powerhouses. Germany was, but has been mismanaged worse than us & is fast on its way to becoming more of a welfare state – they have serious problems. Japan, well they’re just trying to finally dig out from under their own decades of serious problems.
Compared to much of the world, we’re doing ok. And compared to most other places I’ve been to in the world, which is a heck of a lot of places, we live a charmed life here.
Good point. CPP split can be maximum of 50/50 though, and the maximum is less that’s 50% if the spouses weren’t living together for part of the contributory period.
Another benefit of pension splitting (CPP or RRIF) is the federal pension credit of $2,000, which reduces taxes payable by about $400, and each spouse can get that instead of just one.
Canadian dollar under 70 cents, one bitcoin $150,000 can.$. I doubt we are better off than industrial powerhouses like Germany and Japan. Canada is a welfare state. BCE stock is going to crash when it cuts its dividend, another Nortel success story.
“Or are there other income retirement spousal income splitting allowed?”
CPP can also be split, although it involves more bureaucracy than RRIF splitting, which is just an election on your income tax return. But it’s my understanding that CPP can be assigned up to 100% compared to 50-50 at the most for RRIF.
Also I think registered pension plan (i.e. DB, DC) income can be split but that isn’t relevant to me.
Yes, and In the G7, in GDP per capita, according to world bank, we are #2 behind USA and ahead of the rest (Germany, France, Italy, UK and Japan).
As Scotiabank would say… We’re richer than we think!
https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
Small delay, will publish new post tomorrow
Yes, #18 according to world bank. And we can toss the top half dozen since they’re just tax shelters.
I think I may have spotted the problem 🙂
Are we even top 20 GDP per capita anymore? Beyond that certainly doesn’t feel like a rich country…..when family/friends visit from Europe I take them down Pandora and the shock level is high.
Canadian dollar likely going to hit a 20 year low soon. I looked up hotel prices in Vancouver for next summer and a hotel I use to stay at frequently (Fairmont Waterfront) for $99/night in 2009-2011 when I was doing my masters at UBC is now at $1,000/night. Travelling going to be fun for Canadians.
You’re preaching to the choir on the bureaucracy side of things. It’s ridiculous.
That said, we are one of the richest countries of the world. In fact I suspect our disease of overregulation is a disease of affluence.
What it all comes down in the end, separate from whatever political leanings and affiliations, those that wish to govern need to be viewed as competent enough to manage their own house in order to be trusted to manage the house of the people. Right now you would hard pressed to find even the most hardcore supporter of the government that would argue they are viewed as competent or can be again in this incarnation.
I 100% realize that if you cut back federal public service employees, for example, to a more reasonable level you are only saving $10 billion +/- in salaries and it doesn’t move the needle much; however, it is a sign of how useless on all fronts and how mismanaged this country is, imo.
On a local level. When the COV or other municipality hires a tree preservation coordinator his or her salary of $100k/year increasing property taxes isn’t the only issue. For example, when we built a home in the Oaklands area a couple of years ago we had to run a generator for 6 months because the COV tree preservation coordinator wouldn’t allow a branch to be cut off and BC Hydro engineer refused to sign off on hooking up power as they have a 1m radius rule in terms of new connections. Tree coordinator came out to site 6 times, BC person 5, over a branch. Context, our professional arborist we had to pay for noted the tree was of little to no value based on species/age.
So on the topic of federal public service employees it isn’t just a salary expenditure they also introduce more bureaucracy and BS making it more difficult to do anything including business; therefore, business goes elsewhere like the US.
In my opinion, giving the natural resources we should be one of the richest countries in the world.
I wonder what they are using as population growth in those projections
fwiw, the IMF expects Canada to lead the G7 with highest growth in 2025, ahead of the USA. OECD has us at 2nd place. These forecasts are current (Dec 4, 2024 from the IMF).
https://commonslibrary.parliament.uk/research-briefings/sn02784/
I sure hope it does. I don’t know what the answer is (other G7 nations have the same problem), but the economic stagnation is a big problem
>> None of the issues you name are really related to the deficit and none of them will be solved by cutting it. In fact Canadians might be quite upset to have their new dental and pharmacare disappear.
A lot of the benefit is psychological and improved sentiment. As soon as Poilievre is elected, Canada is “open for business on day 1” and consumer optimism shoots up. Which may well translate to more foreign investment and a better economy. Of course maybe not, but I don’t think any of that good stuff is going to happen if Trudeau is still in power.
Oh sure, the liberals are toast, but that’s been true for 2 years.
None of the issues you name are really related to the deficit and none of them will be solved by cutting it. In fact Canadians might be quite upset to have their new dental and pharmacare disappear.
Right. If only Canadians had something to show for the terrible fact that house prices have doubled. Oh wait, 66% own houses, so their net worth has exploded, and many have become millionaires, including the average household in Victoria having a net worth over a million. Yah, I bet a lot of those folks are going to join you and move out of Canada.
Right. A “shit show” that was somehow rated the #1 small city in the world two years in a row (2023, 2024) by Conde Naste.
I think you need to put into context general standard of living. When we came to Canada in 1994 we had a choice of GPs, my parents bought a house on a construction worker + housekeeper salary, downtown Victoria wasn’t the shit show it is today.
I think Canadians would tolerate 61.9 billion deficit if there was something to show for it.
Meh, sure they should cut the deficit, but also people have very short memories and should probably put the current fiscal situation into context.
Can’t be a surprise when you look at what they’ve been doing over the last 9 years, it was just a matter of time before things went to shit. They increased the number of federal public service employees by 40% lol.
Just happy I have an EU passport at this point and time. Interesting how in a corrupt country like Croatia with 1/3 the GDP per person of Canada health care is better, no homelessness, way safer to walk around at night, double digit salary growth for a number of years now (14.3% YOY year for 2024), unemployment has gone from 17.3% in 2013 to 4.8% in 2024. Just go to show how mismanaged Canada is when a poor corrupt country is catching up quickly.
>> Note also retirement income can be income split
Good point. I assume you’re referring to via a RRIF (t1032 election) or a spousal RSP (setup in advance)? Or are there other income retirement spousal income splitting allowed?
Interestingly enough the future never seems to come despite advancements in technology and legislative changes (for example, in 2010 mere posting were legislated in Canada and more recently the US banning the advertising of the cooperating commission in the MLS system, etc.)
Good luck getting a lawyer to show you a property on a Sunday afternoon and if you are thinking buyers and sellers will just do private deals and engage a lawyer for paperwork/conveyancing good luck with that.
I am now a licensed agent in Croatia (licensing exam 10x more difficult than Canada included verbal portion in front of panel of 5 people quizzing you on various topics) where there is no MLS system and the vast majority of advertising real estate properties is done on one website that private sellers have access to and interestingly enough the use of agents is growing rapidly……I think people just don’t want to deal directly with the other party in general and attribute value to that as much as they claim real estate commissions are too high, ripoff, etc.
In my 15 years of real estate people have become way more unreasonable and selfish, on average; therefore, would love to see widespread private negotiations.
You’re making another assumption, namely that your income in retirement is at least as high as when you were working. Not the case for the great majority of people. Note also retirement income can be income split which will bring down the marginal rate for most people.
It really doesn’t matter what happens between now and the next federal election. That night will just be hilarious to watch the indignant media reactions as the Tories take more than 50% of the vote in every province except Quebec and ending up with more than 250 seats. The Bloc will form the official opposition and Trudeau, Singh and May are all likely to lose their own seats. The irony is that the more the Trudeau and Singh try to do things to change the narrative, it just keeps backfiring on them. They just don’t seem to realize, the longer they hang on, the worse outcome they are going to get.
Whatever her plan, it will go smoother having not been the one to read out the $61.9 Billion number in front of the TV cameras.
The example was illustrative only, because the same principle applies to any income level. If tax rates rise, you may end up withdrawing RSP money and paying higher taxes than you saved originally. Which makes it less valuable as a tax deferral, and makes it more attractive to fill up a TFSA first.
We use Mullin De Meo Wirk law corporation (Garnet road…. just off Shellburn. ( 250 477 3227) for real estate. They seem fair.
I’ve also used notaries…which worked out very well also.
Only if your annual income in retirement is over $259,829. Oh, the humanity!
I would also be prioritizing TFSA contributions – fill it up and invest it aggressively.
Yes RRSPs give you the upfront deduction, but a little retirement secret you may find is that your tax rate in retirement is actually the same or even higher than when you were working & contributing. Of course this is highly dependent on your personal financial circumstances. I think TFSAs carefully nurtured are the best thing since sliced bread.
The rats are jumping off the sinking ship. Chrystia knows that the Liberals are losing regardless of the freebies, rebates, tariffs, etc. All of a sudden, she has become a fiscal conservative. to differentiate her from JT.
Her plan is to corner JT into resigning and take over the leadership (or challenge him for the leadership) in preparation for the 2029 elections.
I don’t understand the logic here. How would that help?
Does anyone have a recommendation for a good and reasonably priced real-estate lawyer? If the future, there will only be real-estate lawyers because of the high commissions that realtors charge. Thank you.
Remember with RSP, you pay tax on withdrawl. In 2000-2015 it was nice getting the deduction for RSP contributions, and avoiding the highest marginal tax rate of 43%. Now, when it’s time withdraw, highest marginal rate is 53%.
Who knows what the rate will be in 30 years when the millennials are withdrawing in retirement. I’d bet on tax rates going up, as we will still be paying for CERB and these dumb GST holidays and $250 giveaways.
>> 1) The NDP has little money in the bank, so does not want an election now or soon;
2) With the Liberals in power, the NDP can control the policy agenda to an extent because Liberals often require NDP votes to continue governing; when the Conservatives win a gigantic majority in the next election, the NDP will be completely influence-less and powerless, which won’t be very much fun for Singh and co.
I don’t think that’s it.
On February 25th, 2025 NDP leader Jagmeet Singh will hit the jackpot by officially becoming eligible to earn his Member of Parliament pension.
I believe this is the key to understanding his unwavering and otherwise nonsensical support for Justin Trudeau’s scandal-ridden government.
There are always other options but this is 4.53% tax free and guaranteed. It isn’t 2%.
Personally I wouldn’t leave any money on the table and fill up my RRSP/IPP and TFSA to the brim as soon as I can.
1) The NDP has little money in the bank, so does not want an election now or soon;
2) With the Liberals in power, the NDP can control the policy agenda to an extent because Liberals often require NDP votes to continue governing; when the Conservatives win a gigantic majority in the next election, the NDP will be completely influence-less and powerless, which won’t be very much fun for Singh and co.
Doing what with your money now instead of putting it into the TFSA? Paying down the mortgage or putting it in an RRSP, OK.
On the other hand if f you just want an excuse to spend all your income because you think an inheritance is coming, well go ahead.
I was under the impression you had options with your other ventures to allocate capital with better ROI, but if not then yes.
Thanks Leo. We contributed a bunch to RESP now have started with RRSP. I have a small TFSA and my partner has an empty one. We were wondering about accumulating room in case there’s an inheritance. What do you think about leaving room in TFSA if you are anticipating inheritance?
My cynical view of this is that Jagmeet Singh, Chrystia Freeland and Sean Fraser’s backroom plan is to replace Trudeau with Freeland. And to prevent an election.
Will Singh ever grow a backbone? Obvious move should be to vote non-confidence, not change Liberal leadership. Singh is leader of the NDP, not the Liberal Party.
“NDP leader says Prime Minister Justin Trudeau should resign” https://toronto.citynews.ca/2024/12/16/ndp-leader-says-prime-minister-justin-trudeau-should-resign/
and what do I do with the extra cashflow? 4.53% AFTER TAX return guaranteed is pretty good, imo.
Not to mention if I drop the payment they won’t increase my lump sum payment option.
This was our approach. Taxable accounts are the step not shown below mortgage.
Marko, instead off contributing to an RRSP you may want to consider an IPP
The banks kicking the can down the road by allowing long or even infinite amortizations seems like it turned out to be a good call.
Wouldn’t you adjust down your monthly payments so you are not paying it off quicker? You should be able to still make lump sump payments at your discretion any time you want provided it’s above $100, adjusting payments down just decreases your mandatory monthly payments and gives you more control of cashflow. lumpsum on the TD app if you have a bank account is literally just a transfer between accounts.
Don’t have cashflow concerns and at 4.53% it would need to come down a lot more where I feel it is unproductive to be paying it off quicker. All my registered accounts are maxed out.
Sources have told National Post that Finance Minister Chrystia Freeland will reverse the government’s position on the “Working Canadians Rebate” that would have cost an estimated $4.68 billion. -Sun 15th
“you told me you no longer want me to serve as your Finance Minister..the only honest and viable path is for me to resign from the Cabinet.” -Mon 16th
Courage of conviction or forward planning? Either way, she’s got grit.
Are you not going to adjust your payments down for cashflow? I am pretty sure you can do that for variable, I been doing this with my fixed as I make lump sum payments.
Bigger news- Trudeau considering resignation. Announcement this afternoon. Source-BNN and CTV news.
In my TD app this morning and noticed my variable mortgage has dropped 6 years and 7 months in amortization since August. Few more rates cuts and could be looking at a 10 year drop. I guess it is the reverse of what was going on when rates were going up.
Month Dec Dec
Year 2024 2023
Net Unconditional Sales 232 329
New Listings 311 383
Active Listings 2,563 2,132
My parents took us there when the 5 of us were kids, because they knew they’d get their money’s worth – never mind salad, never mind buns, head straight for the chicken and the carving station, followed by ice cream…
I don’t know if you recall, but Frank Baker’s had one of the cars from one of the James Bond movies (I think) out front. I still remember a teacher at the high school telling me how she knew “the real James Bond” etc. – she was very strange…but I digress again
I’m hoping that there’s increasing momentum for a tipping point where the government falls soon (as it happens, we’re about to realize a significant capital gain that can’t be deferred, so having this gov’t fall before the capital gains inclusion rate increase becomes law would be doubly sweet. But I digress…)
Finance Minister Chrystia Freeland resigns from cabinet, refers to Trudeau’s recent financial decisions as “costly political gimmicks”. As most HHVers said from day 1.
https://x.com/cafreeland/status/1868659332285702167
Housing Minister Sean Fraser also resigning today, and won’t run for re-election.
Disgraceful that the federal NDP is propping up this collapsing Liberal government.
Yep I have a house to sell . No rush and no deals here
In Victoria, the spring market is going to be so hot, I’m starting to think Thursty is going to have to open up his very own real estate agency… Just to handle the volume!
Another >200k loss on the sale at 539 Castleton. Don’t understand why they don’t just wait until the spring like thursty……
Well that must be the best drinking water ever! You can clearly see by the picture below that the infrastructure has been recently updated!
https://www.sookenewsmirror.com/community/sooke-history-a-meeting-in-the-kapoor-tunnel-211122
Not any more. It comes through the Kapoor tunnel these days.
https://en.m.wikipedia.org/wiki/Sooke_Flowline
I’m seeing some sold signs on stale listings in oak bay and Fairfield. Is this a omen of things to come hmmm
This pipe delivers the water from the CRD watershed to the Greater Victoria area. I would bathe in it, but I wouldn’t drink it without some form of purification.
Have to say when I think about dining in West Van I still picture Frank Baker’s at the corner of Taylor Way and Marine Drive. Never ate there though. I did eat at the pub at Horseshoe Bay waiting for the ferry occasionally. No other reason for a Vancouver resident to eat in West Van.
West Van used to be Vancouver’s Victoria in a sense, as immortalized in Len Norris’ cartoons.
https://foodists.ca/2011/07/03/whats-a-smorgasbord-mommy-memories-of-frank-bakers-attic.html
Run your water for two minutes in the morning before drinking
Run for 20 30 seconds before drinking during the day
Pretty much a 99.5% solution if you live in a house older than 40 years.
PS. Applies anywhere. Not just core Victoria
hey, it is nice, but I’m surprised to see you reference great dining & big city life. I mean, unless you’re going across the bridge into Vancouver, which is a nightmare for dinner, and you’re really referring to West Van, I don’t see it – the dining choices in West Van are actually very limited, and the place is dead at about 9 pm. Actually, all the dining in West Van and North Van combined in my view don’t add up to the dining choices we have in Victoria. I’ve always thought the restaurant choices in Victoria are surprisingly good. Now, Vancouver proper is of course a different story.
Anyways, of course to each his own.
Like most large cities Vancouver has all of the nightlife and dining experiences that small cities can’t compete with, but the extremely high price make it unattractive. For the same money that I spend in Vancouver on a long weekend, I can stay for at least a week perhaps 2 weeks in Mexico/central America/Asia including airfares and enjoy real authentic food and drinks, and perhaps little more money even Southern EU is doable.
peter, cant think of a nicer place to get stuck than the upper levels. the views are breathtaking like absolutely amazing . nice thing about a growing community like the north shore has been all the great dining experiences , a great place to hang out and go for drinks. i still think west van is the best part of Vancouver. We could use more of that big city life here in Vic
“Condé Nast Traveler magazine ranks Victoria No. 1 on list of best small cities in the world. For the second year in a row, Victoria has topped Condé Nast Traveler’s list of the best small cities in the world.Oct 2, 2024”.
https://www.timescolonist.com/business/victoria-best-small-city-in-the-world-says-travel-magazine-9594729
Only because they have never lived in Victoria.
More than 39 million people happily live elsewhere.
@thursty if it’s 6 months continuous in the Schengen you will need a visa. They are hard to get for France (the process itself is onerous). We’re planing our next big trip for 2026 and might hop over to Montenegro to avoid the overstay/visa issues. Assuming Montenegro isn’t in the schengen by then.
Max, no my 14 th wife has made it clear she wants to live in Europe for 6 months of the year and I’m okay with that as I would like to hang out there for longer stays too
https://www.cmhc-schl.gc.ca/professionals/housing-markets-data-an.d-research/market-reports/housing-market/housing-supply-report
According to CMHC, most housing starts in the last couple of years are condos, and are within historical average per population, but the previous decade housing start was below historical average. Single-detached, semi-detached and rows housing start remain low sighting high land price.
IMO, condos and rentals may see a slightly softer price or stay flat in 2025 and 2026 due to more supplies come into the market and lower population growth, but SFH will remain in demand due to lack of supply. However, lower interest rates, stock market recovery, and inflation may drive price higher, especially SFH.
It makes sense to buy in the winter if you find something that suit one needs, but many people tend to wait for the spring, because there are more supply to chose from.
I have lived in 8 places in Canada – including Vancouver. Victoria is the best one overall – hands down.
Would you bring your 12th Wife?
Victoria IS different. Where I come from they can keep building and building ever outwards. Here we’re surrounded by water on 3 sides and mountains on the other (more or less). Plus we have amazing weather (for Canada). Plus we have the government offices here. Quite the trifecta- of course Victoria bucks the trends.
Moved here 3 years ago from West Van, couldn’t be happier with the switch. The entire North Shore is so overrun with people now, you literally have to plan your driving between say 10 a.m. to 1 p.m. weekdays otherwise you are essentially stuck. And I mean simple driving like going from West Van to somewhere in North Van not even crossing a bridge. The infrastructure is a joke. And there is a challenge with the neighbourhoods as a community accommodating that many new immigrants all at once.
Honestly, for every little thing people on this site complain about, whether it’s traffic, RE costs or whatever, the situation in Vancouver is exponentially worse. This is such a great place to live.
I don’t know, but what we do seem to be moving to is a market where RE is no longer unduly influenced by investor demand, interest rates are pretty low and probably moving somewhat lower, prices are high but not gapping up or anything like that, and it’s more about buying a place to live than an investment. Sounds like a reasonable proposition to me. If I were looking to buy for myself/family and I saw something suitable come along, I would buy now. I would bet come spring it will be somewhat harder.
Max, I would be back in north Van , still luv it there. Never know maybe I might leave and never come back lol
If you had to stay in Canada, where else would you rather live? I’m not talking about an investment, I’m talking about a place to live.
Values in Victoria would have to come down significantly to provide a positive return. Add in the potential for higher vacancy rates, lower rents, increasing unemployment, and stagnate or possibly negative population growth then real estate as an investment is shit. In some of these factors, Victoria is bucking the national trends.
Is it somehow that Victoria is different? Or are we just the last to leave the party?
yep, gearing up to be a busy spring market , not enough inventory going into january and if a nice house comes on it will get snapped up quick. Im liking everything i see
See what happens, there might be a lot of listings, but I know a lot of people (some even in government) that are worried about employment and are reducing spending. They are more interested in selling rather than climbing the property ladder. I keep hearing things like “positive cash flow” which none have really seen with their RE investments.
“I am hearing from several realtors that there is lots of people that are going to be listing in the spring and they are expecting with the lower rates that it should be a very active market(on demand and supply side).
Are others hearing this too?
–
Realtor FOMO. There are a lot of investors looking to get out of owning rentals especially condos. The weaker economy, governement hiring freeze (prov and Fed) and or layoffs plus 5 year mortgage in the 4.50% range will limit sales except in lower priced homes under 1.5MM.”
I am hearing from several realtors that there is lots of people that are going to be listing in the spring and they are expecting with the lower rates that it should be a very active market(on demand and supply side).
Are others hearing this too?
> I wonder how much microplastic is in tap water. The CRD doesn’t test for it, AFAIK.
A good question. There’s microplastics in virtually all available water, especially in North America. That includes tap water, rainwater, bottled water, groundwater etc.
A filtration system would be the best bet.
Once you solve that, there are also microplastics in the air we breathe, as well as other particles like asbestos.
Obviously a good approach is to minimize exposure. But other than that , seems like another case where we gotta “take our chances”.
I wonder how much microplastic is in tap water. The CRD doesn’t test for it, AFAIK.
Now that I find funny! Thanks 🙂
Owning vacant land is a liability right now. Infact its almost toxic.
“Toxic debt refers to debts that are unlikely to be paid back in part or in full, and therefore are at high risk of default. These loans are toxic to the lender since chances for recovery of funds are small and will likely have to be written off as a loss”.
https://www.investopedia.com/terms/t/toxic-debt.asp
Guess I missed it, and tbh, still missing it. Carry on though..
That was intended to be a joke.
There are also clever ways of dancing around the land vacancy tax. I know the guy that owned the Brentwood Bay College Chapel. He bought it as an investment (holding property). Then they started charging him land vacancy tax. Since the chapel had a Sunday school down below, with a three piece bath and kitchen, he quickly found someone to live there rent free as a caretaker. The owner even paid the water and the hydro. The entire chapel was infested with rats all the way up to the bell tower, so it was a really hard sell for him to find someone to live there.
What the guy really wanted was to tear the church down and sell the beautiful property overlooking the Bretwood Bay. At any rate he got his way, deconstructed the chapel and sold the property. You can read the whole story about it here…
https://www.saanichnews.com/news/mill-bay-to-be-new-home-of-former-central-saanich-chapel-310342
Max, “stating in a decade or longer, when I finally get my way, I’ll buy your vacant lot at the current price you are listing today…” The seller sits on it for a decade, pays the taxes, and carries all the risk and none of the reward? I wouldn’t be the seller in that case. At best there would be a 1 year sunset, and then only if there was a substantial non-refundable deposit. Seller would be better off tossing a patio home on it and waiting it out themselves.
They won’t. The carrying costs are far too high. What they could do is some kind of conditional offer stating in a decade or longer, when I finally get my way, I’ll buy your vacant lot at the current price you are listing today. Lawyer up, make it stick so they can’t wiggle out.
https://www.millerthomson.com/en/insights/real-estate/canadian-government-proposes-tax-on-residentially-zoned-vacant-land-consultation-period-ends-december-31-2024/
I do not know who that we hired to do the thinking and planing in government, but how would increase residential zoned vacant land tax be productive?
Perhaps we will see an acceleration of construction for a short period, but in the long run what kind of developers/investors are willing to pay more taxes to hold on an empty lot for a decade or longer while waiting for development approvals?
Max, fighting the crowds looking for gifts for wife number 12 lol . The festive holidays have begun so it’s going to be a busy time indeed
The story in Leo’s link below to the $80,000 low interest loan on suites includes a a link to vacant land tax that I think may have been discussed here back in October. Pretty sure I scoffed at the idea at the time, but looks like it’s still under consultation:
https://www.millerthomson.com/en/insights/real-estate/canadian-government-proposes-tax-on-residentially-zoned-vacant-land-consultation-period-ends-december-31-2024/
I’ve long-believed that every Government decision including adding taxes has an equal an opposite reaction to whatever it is they are attempting to achieve. The increased capital gains tax from 50 to 66% is an example (and not yet law). If I was not in a position that I had to sell a property and it wasn’t otherwise costing me money, why would I?
I’m not personally in favor of taxing for use or otherwise changing RE laws that take away land rights without compensation (ie BNBs). However, if it’s going to happen then I’ll be following it along and be prepared to adjust to whatever comes along.
I’m going to get one of the life straw glass pitchers for us for Christmas. It’s not just the plastics I’m concerned about.
House prices always go up. Eventually. Must be why it’s a very low risk investment if the plan is to hold 5+ years.
1907 Belgian chemist Leo Baekeland invented plastic, and life expectancy in Canada was 50 years.
2024 average human ingest 5 grams of plastic per week, and life expectancy in Canada is 83.11 years, and projected to be 86.41 years by 2050.
IMO, house price will start to climb within 6-12 months from now if not already does, because of decrease interest rates and stock market recovery. Having said that, life will be easier for those already own a home, but it will be an uphill battle for renters and those that are looking to buy, because of accelerated inflation.
If your brain is completely wired to only drinking the purest water on the planet, these guys can hook you up.
https://freshflow.ca/products/5-gallon-glass-bottle
So introvert then it’s a matter of subtracting (amount removed minus amount added) – assuming all the microplastics are the same.
I totally agree. Why waste thousands of dollars when you can just purchase a simple lifestraw like this…
https://learn.eartheasy.com/articles/a-backpackers-review-of-the-lifestraw-personal-water-filter/
3777 Waring sold for $4,850,000. Bought in January 2021 for 6.6 million.
https://youtu.be/GUp0H6zDp8c?si=-tVZr8CICZ9SD29L
Two problems: the filter housing is made of plastic, and the ion-exchange filter contains plastic (usually polystyrene or polyacrylate, according to Google).
So…even though this product claims to be removing microplastics from source water (and probably is), it is also adding microplastics to the filtered water.
When I was researching this a while ago, I noticed that filters never claim that the final product (the filtered water you drink) is 99.99% microplastic-free; rather, they only claim that the filter removes 99.99% of microplastics from the source water.
Hey Thursty. Are you getting yourself ready to claw your way through the standing room only crowds at all the opens today?
You should bring your brass knuckles.
They aren’t mutually exclusive. I’ll prove it.
proverb:
“You can’t have your cake and eat it too”.
You can’t enjoy both of two desirable but mutually exclusive alternatives.
That’s the verrinder one, they did reno’s on top of paying 1.275. I think umm really looked at it.
Id rather have a good life now and security later. Life is meant to be lived.
So would I. I should be 100% debt free at 56. With solid savings, the Wife’s BCGEU pension, BTC, and a pretty sizable chuck of leverage.
I think balance is important. It’s not good to live only for the future, just as it’s not good to live only for the present. It’s people who prefer only one without considering the other that seem to be the examples we’re talking about here.
Once you know a couple of people that have turned 65 with big debt when a simple twist of fate causes things go sideways, it sure changes the perspective…(think about spending your golden years in low-rent squalor)…well, new cars, expensive holidays, granite & SS kitchens, just don’t look so shiny anymore.
Myself, I’d rather have no debt, healthy savings, a modest house, an old car, and live within my means.
Home in Rockland just for $950k, purchased Feb 2022 for $1,275,000.
100% this
https://www.cbc.ca/news/canada/british-columbia/thind-properties-receivership-debt-1.7410275
Expect to see more and more of these kind of stories in the new year.
I’m sure that’s fine.
Im thinking something more like this:
https://lifestraw.com/products/lifestraw-home-glass-pitcher
Tell me about it. I know several people that have died without ever receiving a single CPP cheque. What I am living for these days is making sure everyone else living under this roof is well taken care of when I have a tag wrapped around my toe.
As far as water purifiers go, this is the king. And keep your drinking water in a glass pitcher in the fridge.
It sure would be nice to pay it off. But I’m no longer thinking that is the only way to retire successfully. Once you know someone who died randomly at a younger age and didn’t have the chance to enjoy retirement it sure changes the perspective. I’d rather live now while I’m young(ish) instead of only stacking the deck for a future that might never come.
That being said —- of course it would also be awful to be there at the older age and have made inadequate provisions. So there must be a balance. Prudence — strange concept when it’s only applied to the future (not very prudent for those looking back wishing they’d lived more).
As for the water filter, I also found the whole house systems. I’m thinking a less intense option would be one of the glass pitchers with silicone components.
Or you have a mortgage and few or no investments at all, which I suspect is the case for many carrying a mortgage late in life. Betting everything on that house.
Financial prudence, or lack of same, tends to manifest itself on multiple fronts. And paying off your mortgage early increases your disposable income available for investing. Worked for me.
This one.
https://www.aquasana.com/whole-house-water-filters/rhino/probypass-100365536.html
@introvert I’m now deep diving water filtration systems that don’t add (or even remove) microplastics. I’m sure there is a good system out there.
I’m thinking that would have to be Grandfathered.
I know a lot of people that have divorced. It never seems to work out very well for either of them financially. Its also very hard on the kids. A sustainable marriage takes effort, Its not a free ride. You can fall out of love just as easily as you can fall in love. This is coming from a 51 year old guy married to a 49 year old girl that I have been with since I was 16 years old driving a 1972 Dodge Duster with chrome mags and great big meats on the back, paying 30 Cents per/liter for unleaded gasoline.
Umm really , that’s just weird ?
Thursty still expecting that Martel funds big rate of return and the 4th marriage be the one that sticks…
Have you ever checked out the air quality readings for Bangkok? Probably going to become a bigger factor for many people over time.
Yeah I agree. A beautiful apartment in Bangkok is not very expensive and there’s tons of private medicine. Canadian money goes pretty far in many places.
Well l the higher the risk the bigger the reward, most peeps dont have the stomach for it.
I think OAS going to face a tweak, and perhaps the government will raid CPP along with higher taxes.
Most of the claims of bad luck that have crushed retirement money from people I know has either been risky investments (greed) or divorce (infidelity) which I have a hard time relating to luck. Catastrophic illness would be the other one, but I assume most people account for it with contingency plans.
paid off debt + maximized investments = piece of mind
Although, a quick search agrees with Dee; it is getting more & more common for Canadians to carry a mortgage into retirement.
Umm really there is bad luck. Sometimes people do everything right and it just ends up bad.
But I agree planning ahead (and doing a good job) is important.
Or ideally, you have a balanced approach and have both paid off debt and maximized your investments in time for retirement. In the end, there is no such thing as bad luck, just bad planning. For those that always think public sector pensions are bullet proof, the feds have just defered the employer contribution to federal employee pensions for the next 3 years. The budget will balance itself approach is really coming home to roost for the next decade.
It doesn’t really matter. Either you maintain a mortgage and have more investments that pay that mortgage, or you pay off the mortgage and have fewer investments (but also lower living costs). Six of one, half dozen of the other. Makes no difference to retirement.
My home has two suites (three total – wasn’t counting our main one) and a sizeable mortgage.
As for the second question, I mean if the mortgage payment is small and the DC pension is big it’s not necessarily a problem. Right? Honestly I think less and less people will be able to pay off mortgage on time for retirement- we will have to adapt. That’s ok.
Also, I was astonished when living in Europe – even now with a big mortgage and a much reduced rent on the main suite we still had some left every month. Point is don’t have to live here to live comfortably 🙂
Are you referring to a mortgage on your home, or on an income producing property?
Pardon me for being stuck in another century, but how does one retire comfortably without first getting rid personal debt payments?
Some Victoria schools had high lead levels a couple years ago and they put in filters. Have never heard of high lead levels in any residential setting in Victoria.
I’ve never heard of lead pipes being used in this part of the world.
There can be lead in old valves, fixtures, and solder, but probably not enough to be a concern for most people. Children are at greater risk, though.
@Introvert congrats – that’s awesome. Im not sure that I will ever pay mine off entirely and im not sure that it matters.
Introvert, good on u , maybe time to leverage, build a lil empire and retire to the Mediterranean
LMAO, he needs to go fix his rotting fence first.
“Speaking of long amortizations, this fall I paid off my 35-year mortgage 20 years early. Feels good.”
Good for you, now its time to go shopping for that new home in Oak Bay, it should only be a bit more but you better hurry because trusty says home prices are going to take off again in the new year, lol
FWIW, I believe that code now requires a pressure reducing valve if water pressure is above 80 psi.
But the reverse osmosis filter housing is usually made of plastic, as are some of its internals. And often the little pipes in the RO system are made of plastic. So RO is a fantastic filtering method, but it still adds microplastics to your drinking water.
That’s way high. I’d install a pressure reducing valve.
Unless your plumbing is full of elbows and other twists and turns, 40-50psi should be fine.
I agree that’s a problem. We’re thinking of getting a reverse osmosis system installed in our kitchen when we do the reno. Maybe that is the best solution.
The problem with filtered water is that, yes, you’ve removed lead, chlorine, and other bad stuff, but you’re still drinking microplastics (because the jug and/or filter housing and/or layers of the filter media are made of plastic and therefore shed microplastics into the water).
Because I haven’t figured out a good solution to this, I drink tap water.
They said the pressure is 90.
“Purchase a $1.45 million house with cash of $120,000 instead of $290,000. The good news is a 59% drop in the downpayment. The bad news is $170,000 more debt to pay interest on for 30 years, instead of 25.
To qualify you must (a) be a first-time buyer and, (b) be gullible. Alternatively, simple financial illiteracy will do. Just don’t try to understand amortization and you’ll be fine.” -Garth
Speaking of long amortizations, this fall I paid off my 35-year mortgage 20 years early. Feels good.
Turn of the century I’m guessing? Copper pipes were also sweated with leaded solder until the 80s or something like that, but I doubt it’s much of an issue.
What’s the HHI to qualify 300k? too lazy to calculate myself
They’re fine. There is a screw that you can turn to adjust the water pressure. If you had really high water pressure, it does seem like it would be a good idea to lower it. Did they tell you what the pressure was?
Yeah we’ve been drinking the tap water unfiltered from our 1910 house for 4 years. I’m now thinking of a solution but I hate the idea of going to buy huge jugs all the time. Maybe we will get zero water or some such thing.
Re: talk of lead pipes in the core. What years of homes would be of concern for this issue? Does the CRD have any info on this? Thanks
Feds say first time buyers can access 30 year amortizations
All the insurers say sure, that’ll cost you an extra 0.2% in premiums
So.. Max $1.5M property, minimum $125k down payment, first time buyer 30 year amortization, that’s $57,750 in CMHC insurance added to the mortgage. Effective loan to value of 95.5%. Probably not the best idea in the world.
Probably snake juice. But I have it now, can’t really tell the difference.
We had a plumber tell us our pressure is too high and could wear down plumbing. They suggested we might want to get a reducer. I’m not sure if it’s snake juice or what. Plus I’m worried that the water pressure will suck after it’s installed.
Great, was just talking to a modular builder and said Nelson has been pretty progressive on the infill front.
As for pressure, never had a problem. In fact plumber sold me a pressure reducer for the house because he said the water pressure was so high and could eventually damage appliances. Not sure if I fell for some nonsense there, but there’s plenty of water flow with a suite.
https://www.castanet.net/news/Nelson/522290/New-legislation-considered-for-reducing-cost-of-construction-of-secondary-suites-laneway-houses
We have a 1/2” water service. Only notice it when someone is running the bath, but our water pressure is set pretty low. That said, we had a tenant for awhile, and never noticed anything.
Damn, that’s crazy. Media needs to cover stories like this.
COV you are looking at $20,000 for something like this as the soil sample testing now adds 10k.
Has anyone had issues with 1/2” pipes? I’ve sold lots of house with a suite and 1/2” pipes and I’ve never heard anyone complaining re lack of water flow? Actually once I sold a house with two suites and a 1/2” pipe.
Its 1″. Even in Langford they started running 1″ continuous copper from the meter to the house in late 1980. You guys in the core with your lead water lines, elbows and fittings, wondering why dementia is of growing concern.
https://www.healthlinkbc.ca/healthlinkbc-files/lead-drinking-water
Unbelievable as it may seem, there is a city that is working towards lowering development costs rather than increasing them:
Nelson city council passed the first three readings on a Development Servicing Bylaw Amendment that relaxes water line size requirements for laneway houses by allowing existing non-conforming 1/2″ pipes to continue to be used, and it does not require the property owner to have those pipes dug up to be replaced with 3/4″ pipes in order to receive a building permit…In the last few years, when adding a laneway house to a property, on average it has cost $8,000 to upgrade the water line alone.
I just like having a suite in my house. Even though it hasn’t had an occupant in over twenty years and is just a clean vacant space. My family just refers to it as the suite, its just there, being a suite. In addition to the 1100 sq/ft lower suite, I also have a garden suite for my oldest Son, and an 18′ x 18′ bachelor suite under my back deck with a separate entrance (considered a guest suite) for my youngest Son. All done with permits and hooked up to sewer.
I’m all for a multi generational house. I just don’t want anything from the Government to make that happen.
If people are looking for a SFH in Victoria without a suite, they are going to have to start looking for a SFH in the 1.5 – 2 million dollar price range.
Hmm, if it can be paired with the multi-generational home tax deduction, it might be really great.
The ability to refinance to build a suite yes, the $80k loan, no.
Isn’t it tied to having a CMHC mortgage?
The BC program is super dumb and no one should use it, but the federal program could be useful for adding suites. Doesn’t seem to come with any poison pills https://www.canadianmortgagetrends.com/2024/12/canadas-secondary-suite-loan-program-expands-to-80000-loans-with-2-over-15-years/
Agreed. And, as groot has pointed out, about half of SFH (new and used resale) are SFH with suites. So however tiny the number of SFH available are, it’s only half that number for those looking for a SFH without a suite.
Why wouldn’t you…Perpetual growth funds your retirement.
There is 900 units soon to hit the market on Esquimalt Rd alone.
We’ve also probably lost some people to Alberta/elsewhere too.
Only so many people can afford/are willing to pay $2,000/month for a studio or small one bedroom. A bit of downward price pressure in the near term does not surprise me, but long term not worried.
” I’m a fan of welcoming anyone who shows up at our door”
Alright, thanks Thursty. Can I bring some of my friends from Pandora?
Probably three civil servants hired to oversee the program and two suites built.
It would be worth the FOI, I had a read through it, I would be surprised if it made it out of the single digits.
Would love to know how many suites have been built under this idiotic program.
For me, it’s not as a rental. I don’t see the point of having a SFD house where you must rent out part of it. I am exclusively using it for family. So, capital gains should not be an issue. Don’t confuse it with the BC suite program or the Federal loan program. This is just a tax deduction for the purpose built space.
Okay, if you want a person over the age of 65 occupying your secondary suite, I guess it could be good. I don’t know how that would work out for you as far as capital gains exception goes, since you would be tied to the hip with the Federal Government.
You bought a house with one bathroom? Damn, quite the risk taker. My wife wants some type of spa thing in the backyard with sauna etc., so that would be my problem come next year.
The disability qualifier is if the person is 18 to 64 and is not required if the person is over the age of 65.
Nah, more sick of not having a second bathroom (the greatest first world problem ever). I planned it out in phases and that gives it a sense of having things completed and moving on to the next thing. So, winter to spring is the downstairs inlaw area, family room, and office. Followed by the exterior in the summer. If it rolls over the year I planned, maybe get sick of it at that point.
“The secondary unit must allow a senior or an adult who is eligible for the disability tax credit to live with a qualifying relative.”
I could see this part being a problem that no one would want in their house.
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/multigenerational-home-renovation.html
Aren’t you sick of renos yet?
insider contacts tells me the WFH/Hybrid model is under the microscope at the province and likely the next item on the table after the hiring freeze and before salary freeze. Good luck to those in the Westshore.
Looking at hitting the next phase of my reno in the new year, has anyone had any experience with the multi-generational home tax credit?
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/multigenerational-home-renovation.html
Groot , I would not be surprised to c the immigration policy is reversed to some degree if it’s a huge drag on the economy. I’m a fan of welcoming anyone who shows up at our door
Phil Soper is a Charlatan
https://www.youtube.com/watch?v=iZDC9Rp_zy8
Preferential treatment on the basis of immutable characteristics is broadly unpopular throughout the developed world, not just in the States.
The lower immigration and net outflow in BC is a bit worrisome for the rental market. Less demand for rentals may lead to a higher vacancy rate and lower rental rates which casts a shadow for those considering buying a residential investment property.
There may be hard times ahead for newer PBRs as these buildings will have low occupancy rates and long lease up periods. The 13th month free gimmick might backfire on these investments as tenants at renewal will have more choices and a greater inclination to vacate for less costly accommodation resulting from a “free” month rent.
Falling interest rates are having a positive impact on consumer confidence as seen in reviving housing market activity and slowing declines in per capita spending. While year-over-year spending remains negative, these trends point to a gradual improvement, which we see building momentum as interest rates drift lower—offsetting the heightened financial stress of some households that will be renewing mortgages at higher rates.
Lower immigration targets are a notable source of downside risk, which could have a particularly strong impact on the economy. B.C. is among the few provinces with a negative birth rate and net interprovincial migration outflow—meaning population growth is entirely dependent on international immigrants. A sharper-than-expected outflow of international immigrants could make population growth negative next year. Though unlikely, we’re aware of the downward pressure stalled population growth would put on overall growth for B.C.
Source RBC Macroeconomic Outlook
Phil soper calling an early start to the spring market next year . Marko’s phone must be ringing off the hook
Let’s leave American talking points to Americans, eh?
Max- Take the line of credit, it’s free, you don’t have to use it. I’d recommend $500,000. Easiest, cheapest money you’ll ever be able to get hassle free. (When rates go a little lower of course). Rates will keep falling until our election so by fall 2025 it will be at least a point lower. Still a gift.
That sounds promising. Statcan should consider partnering with some other sites too. Such as numbeo, which collects data from contributors. It collects data currently from 55,000 Canadians, self-reporting what they pay for common items. About 170 contributors from city of Victoria. Every site has problems, for example asking prices for rents isn’t what people are actually paying, whereas numbeo is what people are paying. But numbeo isn’t a random sample since people self-report, but there are big numbers 55,000 Canadians is more than most statCan surveys. ., I’ve found numbeo quite accurate, as one can see by looking at the numbers for city of Victoria. https://www.numbeo.com/cost-of-living/in/Victoria
I’d be happy to get a GP, whether 25 or 85. Even the most incompetent GP can write simple prescriptions, X-ray reqs, referrals. All things frustratingly hard to get without a GP
Please tell me you don’t think 4.5% is a high interest rate for a five year fixed.
I’ve been with the same financial institution since I started this amortization. I think your forgetting the discount rate.
They keep nagging me to blend. At 1.86% not a chance! They also keep asking me if I want a line of credit. Unfortunately I don’t need a line of credit at this time since I don’t need the money at this time. I’m also pretty sure if I were to take no action what so ever at the maturity of my current five year fixed at 1.86% they would just roll it over into a one year variable automatically at what ever the current rate is.
2.75% five year fixed by late 2025.
Max, unless your going with a variable rate mortgage the rate you may get on a 3 or 5 year mortgage may actually go up from current rates of approximately 4.50%. on a 5 year fixed rate. As many have already stated those who locked in at 5 year rates of 1.30% to 2.00% in 2020 and 2021 will most liekly see there renewal rate more then double to the point where it may make more sense to pay it out for those who can.
It’s still not great but a few things:
I’m up for renewal late October 2025. I can’t wait for all these 25 point rate cuts at every rate decision all throughout 2025.
Obsess much? Do you actually know anything about how the market for health care professionals operates?
“I would much rather have a 60+ year old surgeon than one fresh out of a residency operate on me”
Either way is fine as long as they weren’t hired to fill some DEI quota.
Well there definitely is a need for experience, but if young health care workers can’t get a job then we are just punting the problem with too many over aged and over paid health care workers that have not kept up with changes in health care. I’m amused that you went to a directly to a Red Herring fallacy of a surgeon when most health care workers are not surgeons.
https://youtu.be/oVWjAeAa52o?si=9f5SqKjmJ9wwqppY
That would be a fair statement for intensivists. Because at least 50% burnout, and it would likely be highest in the ones that make it until 60. https://www.atsjournals.org/doi/10.1164/rccm.200608-1184OC
I’m quite familiar with the Medical Profession. I’d go for a surgeon in their 40s or 50s.. They’re not even fully qualified surgeons until about age 35 (average about 15 years post-secondary premed, residency and fellowship). It was much less than that in my day, a GP could be fully qualified in 7 years post-secondary.
I don’t know about 60+, when I worked in ICU the intensivists in their 30s/40s were much better than those in their 60s (we had two), imo. Age and lack of motivation catches up to everyone unfortunately. In the CVU unit same thing, the surgeons in their 40s were excellent.
(realistically people in theirs 20s aren’t operating on you on average).
100%
I believe more than 50% of people working at Island Health are in non-clincal roles now. I local anesthsiologist posted something last year and I think that number 50 years ago was like 10%.
And half the experience. I would much rather have a 60+ year old surgeon than one fresh out of a residency operate on me. Sometimes the two new healthcare workers are required to do the work of one experienced worker. Things aren’t that simple.
I’m in favor of lowering administrative staff and red tapes, keep the invaluable experienced staffs, and hire more doctors and nurses.
As for the health care workers, I would be in favor of buying out the ones at the top of their pay grade and replace that one with two health care workers at lower salaries.
Yes it is!
When people reference government employees I think most of us are thinking public service. I don’t think people would complain too much if their taxes went up to hire more doctors/nurses and they had reasonable access to health care.
Public service, not public sector. The latter includes health care and many other areas, the former does not.
Qt, we raised rates to kick the snot out inflation and slow the economy, mission accomplished. Now we are doing very much opposite and firing up the economy . It would appear from all the moves that are being made that we are back to pumping real estate which I’m a huge fan of . Hot housing market hot economy
Reduced immigration, a big rate cut, and now a public sector hiring freeze. I do not see the makings of a bull market for Victoria real estate.
What do folks’ crystal balls say in terms of the optimal time to list income properties?
I am in no rush to sell but am looking to get out of the market for a while.
A 50 basis point decrease is huge and maybe a bit worrying as it meant to stimulate the economy and keep Canada out of a recession.
From most of the comments it seems Victoria is doing fine as the unemployment rate is lower than most cities in Canada. However the rental market seems to have weakened and my guestimate is the vacancy rate has increased. The two seem to be contradictory.
I’m sure there is a plethora of reasons why this could be happening and endless speculation. Anecdotally I know of some sub contractors that have laid off some staff because of the winter slow down but are expecting to rehire them in the Spring. Employment in construction is notoriously seasonal.
The BoC Cut 50bps—and Borrowing Costs Moved Up
December 11, 2024 · Derek Holt -https://www.scotiabank.com/ca/en/about/economics/economics-publications.html
“The BoC delivered another –50bps mega-cut and…the Canada 2-year bond yield soared by 9bps post-statement to 2.93%, Canada’s 5-year yield moved up by a similar amount which pressures mortgage funding a touch…The reason for this rates market reaction is because the BoC called time out on forward guidance. They signalled greater uncertainty over future rate cuts than in the prior statement.”
I’ve tried following rental data, but it is not simple. I’ve changed methods a few times but with so many amateur landlords and that only asking rents are available, there are a lot of outliers to contend with in any analysis. Lately I have stuck with the downtown condo market as there’s less physical and locational variety. One metric that I prefer to follow in the rental market is the price to earnings ratio which is called a Gross Rent Multiplier in real estate. Watching how that metric has been trending lower
The median sale price for a one-bedroom downtown condo is around $495,000. The average rent for a one-bedroom is $1,917 but it can range from $1,600 to $2,650. On an annual basis that’s a GRM on the average asking rent of 21.5. But the data is really weak for this time of year.
My numbers aren’t the same as Rentals.ca. But I explained how I came up with the data. That’s more than one gets from rentals.ca. I don’t know if they are adjusting for the supposedly rent concessions such as the 13th month free scam. Make no mistake – you are paying for that 13th month.
The other thing I look at is how long have these rentals been listed. And that certainly has been getting longer which illustrates that the vacancy rate is likely increasing assuming that the owner is not underpricing their rental to get more applications and a faster lease up period.
Anyone looking to rent today -negotiate!
Rate cuts maybe good for borrowers, but will it benefit Canadian is something we have to wait and see, because if the economy is doing great we wouldn’t see 5 rate cuts in 8 months and 2 at 50 points back to back. Otherwise, the BOC would have taken more time to drop rates at smaller increments.
Groot, a good read , I myself doubted a lot of doomsday rubbish that was being put out by the Debbie downers too. Rates will continue their downwards slide and sales and prices will continue going north . Great news for the economy and each and every Canadian benefits
Maybe.
You’ve blasted the quality of data from the rental sites in the past, describing the data as as “pretty miserable, with inexplicable spikes and data gaps for Victoria.” https://househuntvictoria.ca/2023/05/08/has-the-rental-market-peaked/
Has something changed?
Rents coming down
To be clear Zach, what I said was the rate shock for half of Canadians renewing in 2025 and 2026 has lessened as they have switched from variable to fixed-terms. From memory I believe that only 14 per cent of mortgages are currently variable which is down from around 28 per cent before the interest rate cuts began in July of 2023. Patriotz can fact check that.
For those that are still under pressure come renewal, the latest rate change is good news but not enough to pop the cork on Max’s drain cleaner. And of course the five-year bond is what fixed-rate mortgages are centered around but that doesn’t mean the bank’s have to follow locked stepped with the BoC’s rate. Mortgages are not a cash cow for the big banks as there are costs to administer the loan making the profit margin tight. The banks can buy a bond at 2.9 per cent or they can loan on a mortgage at say 4 per cent. That’s a small margin to pay for administrative costs. Of course they will make some back with penalties, etc. NOTE: it is a lot more complicated than this, but I have to remember who the readers are on this site.
However, there is a wave of renewals coming in 2025 and 2026. I recall that about half of the mortgages are set to renew in the next two years. People will be shopping for the “best” rate and that means more competition amongst lenders. I’m sure these home owners main concern will be the interest rate and less regarding the ability to port the mortgage, penalties, how much and how often they can paydown the mortgage, etc. We might also see some extend their amortization period to lower the monthly payment. If you want to give up the flexibility on the mortgage – you’ll most often getter a slightly lower interest rate.
These are some of the reasons why I believe the rate shock upon renewal will be less for more Canadians than what economists were predicting before the interest rates started declining in July 2023. We’ve moved away from the precipice of a market marred with foreclosures.
It was In the inboxes of union drones this morning if they checked.
https://www.timescolonist.com/national-business/boc-delivers-jumbo-interest-rate-cut-signals-slower-pace-of-cuts-moving-forward-9938003
Eby says there is a public-sector hiring freeze:
https://www.theorca.ca/commentary/rob-shaw-dont-blame-bc-businesses-for-being-skeptical-over-ebys-reset-9939143
.5% Baked in but no cherry on top. I’ll take it!
G&M:
The Canadian dollar and bond yields immediately spiked on the 945 am announcement and related Bank of Canada commentary. The loonie rose by about a quarter of a US cent to 70.75 cents US. The Canadian dollar prior to the announcement was trading at its weakest levels since the start of the Covid-19 crisis in April 2020, and was down roughly 6 per cent so far this year.
The Canadian two-year bond yield, which had been lower prior to the decision and is particularly sensitive to central bank policy, rose to 2.91 per cent from 2.85 per cent.
Going forward, money markets are now assuming we’ve reached the end of jumbo-sized 50 basis point rate cuts and future cuts will be 25 basis points – if at all. And over the course of next year, they are only pricing in between 50 and 75 basis points of additional rate cuts.
I have clients completing on a property Dec 18th and their variable was 4.8% before this announcement so now 4.3%.
My personal mortgage variable I went with four months ago with is now down to 4.53%.
I wouldn’t be surprised if we ended next year with the BOC overnight lending rate at 2% on the dot. I think economy is in trouble imo plus immigration pullback.
Tiff is on the right track , another big cut to light up the economy . Would be smart to deliver another 50 point cut in January and it looks like the dollar is happiest around 70 cents
Holy crap .5% reduction from BOC. Is this an ominous sign of things to come with our economy? I am up for renewal spring 2025. Things are looking good for us.
Personally im not too keen on vacancy controls. Seems like they’d solve one problem but create a few new ones too. Too many unknowns with widespread vacancy controls. I like building our way out of the problem.
@Groot
Actually, the rate cut will have very little effect overall on mortgage rates. You can see that the expectation of weakness in the Canadian economy has already pushed the 5 year bond to 2.9%. Which is still higher than where it was in October this year.
That means fixed mortgage rates of 4.0% give or take. This is no change from where it was 2 months ago.
Whereas variable mortgage rates are still at 5% and above.
Whether or not a “rate shock” Will affect renewals next year cannot be predicted from todays’ BOC decision.
@patriotz I was wondering since I thought tenancy is in provincial jurisdiction. Also what’s more important is whether this is the start of a trend of introducing vacancy controls more widely.
“ The market is pricing in a 92% chance of 50 basis points on Wednesday at 9:45 am ET, so that’s likely a done deal”
https://www.forexlive.com/news/bank-of-canada-preview-the-storm-clouds-are-gathering-in-the-canadian-economy-20241210/
In Vancouver, that’s what we used to call a “flophouse”. An old hotel that rents rooms monthly. Always used to mean Standing Room Only to me.
CoV is acting under the authority of provincial legislation in case you’re wondering.
https://www.cbc.ca/news/canada/british-columbia/sro-vacancy-control-vancouver-1.7203247
With the big banks being more aggressive on their rates that puts the squeeze on “B” lenders that are smaller and have a skinny profit margin on their mortgages. While it would be a stretch to call this predatory pricing this aggressiveness among “A” Lenders could lead to less choice for consumers in B Lenders in the future. B lenders that offer mortgages to borrowers who may not meet the requirements of a federally regulated bank or credit union.
After all the purpose of a war is to eliminate the competition.
Mr. Vandekerkhove was an astute business man and had a deal with Shell to sell gas to him at the same effective rate the majors were selling to the other chains so the gas wars weren’t hurting him anywhere near as much as was assumed.
I clean my drains with Dom Perignon.
Tomorrow’s expected (B0C) interest rate cut should remove many homeowner’s mortgage renewal price shock. Half of the renewals will likely have a 10 percent and less increase in their mortgage payments or even a lower mortgage payment for some.
The remaining 50 per cent will likely have an average 20 per cent increase that will leave them under financial pressure.
As I have said before, many homeowners took precautionary moves to lower their renewal shock such as moving from a variable to a fixed-rate.
A lot of the worries that economists had before the rate cuts began have lessened as have many home owners fears on facing a renewal in 2025 and 2026. For example on a $600,000 mortgage the lower rates would be $630 a month lower than if there had not been any rate cuts.
Of course fixed-rates follow the bond markets, and so don’t always follow the BoC rate changes. Good news worthy of unscrewing a bottle of Baby Duck to celebrate but not enough to pop the cork on a bottle of Dom Perignon.
Does anyone remember Payless gas? Mr. Vandekerkhove fought big oil for years and kept his prices low to compete. He had his own tank farm up island and shopped around for the best price. We consumers benefited from that.
These were the gas wars of the mid 80’s up and down the Island. No one could compete with this guy.
https://www.cowichanvalleycitizen.com/opinion/need-another-company-like-payless-gas-798817
“Former Scotiabank Mortgage head John Webster weighed in, noting that the big banks’ competitive pricing is unsustainable and unlikely to continue for long.”
Says the guy that would lose the mortgage war!
Its a good thing he’s the “Former Scotiabank Mortgage head”.
Here you go Max. An article about mortgage wars.
https://www.canadianmortgagetrends.com/2024/11/mortgage-digest-rate-war-underway-as-bank-renewals-set-to-surge-rbc-warns/?form=MG0AV3
Max , there is plenty of communicating between the banks and boc . The boc is constantly mining for information and have their pulse on the mortgage market .
Almost comical to see economists try to predict broad stock market moves. ICYMI market bear David Rosenberg had an epiphany: maybe the AI boom is legit and markets are fairly valued.
https://www.theglobeandmail.com/investing/markets/inside-the-market/article-david-rosenberg-my-epiphany-and-why-this-bull-market-may-not-be-as/
He’s been at this for decades. I remember him writing bearish commentary during the lows of the 2008-09 crash. This stuff is almost unreadable/ unusable. Kudos to him for publicly changing his mind but even better would be if he said “actually I have no idea wtf is going to happen, but a buy and hold strategy usually works out”.
Forgive me for my ignorance. Banks sell mortgages to people at interest, this is their bread and butter. Now if for some reason the bank is noticing a sizable decline in the amount of people that can afford the mortgages they are selling at current interest rates. Just like any ponzi scheme, you need new people buying in at the bottom or it all comes crashing down and I don’t think the fed will let that happen.
Could the big five be strong arming the fed to lower interest rates so that people can afford mortgages again?
Like a mortgage war!
SRO, had to look that up: single room occupancy. I know someone that likely lives in one, apartment style building, small room (maybe 10X20?) no kitchen, with some shared facilities. Surprised at first that Van would be involved but presumably they licensed them based on certain requirements.
Vancouver introduced vacancy controls for some/all SROs.
So Marko’s data of shrinking <1M SFH is the core is just a myth?
Half of all condo sales in the Victoria core lay between $445,000 to $665,000 and on average takes 46 days to find a buyer once the property is listed competitively with similar condominiums. For detached homes the range is $985,000 to $1,485,000 with a an average 39 days.
A year ago the range was $445,000 to $700,000 and on average took 34 days to find a buyer. For detached homes the range was $960,000 to $1,530,000 and 33 days.
Not a significant difference despite the interest rate drops between the two time periods.
What I think is happening is that real estate agents are pricing properties closer to market value today and that’s possibly the reason for the increase in sales as vendor expectations have come down.
In comparison during Covid, vendor expectations were high. During this time period in 2021 the range for houses in the core was $1,050,000 to $1,600,000 and 15 days. For condos it was $445,000 to $775,000 and 11 days when rates were substantially lower than today.
I have doubts that the market has strengthened despite the increase in sales. I think it may have gotten weaker as market prices have tapped out and vendors have had to lower their expectations to effect a sale. This is a different marketplace than what we have had for a long time as vendors are lowering their ask prices rather than purchasers raising their bids. Something that can be seen with the number of price decreases versus price increases each week provided by the real estate board.
I suppose this could turn around in the spring. However the marketplace, as I see it, is delicately balanced and if vendors expectations increased that could drop the number of sales in the core.
What condo building is going to be 100% rented out? Very few in Victoria are over 50% rented.
But what were they investing in? Not rental accommodation for locals.
You might note that there has been a big drop off in investor interest in condo pre-sales in Toronto. Not due to any provincial regulations – in fact new properties aren’t even subject to rent controls in Ontario – but because the price versus rent numbers just don’t work. The market in action.
https://www.cbc.ca/news/canada/toronto/new-presale-condos-urbanation-q2-1.7267751
Patrick , not too suprised. Investors are more apt to c a market turn , and the sheep will follow much later when prices are higher .
BOC data shows investor purchases at a record HIGH share of purchases in Q1 2024. That will tend to lower homeownership even further, and put more pressure on home prices.
https://betterdwelling.com/canadian-real-estate-investors-capture-a-new-record-market-share/
“Canadian real estate investors may struggle, but their death has been greatly exaggerated. Bank of Canada (BoC) data shows investors represented a record share of home purchases in Q1 2024”
>> The chart is starts of “ownership homes”, i.e. individually titled. The numbers don’t distinguish whether such a dwelling will be owner-occupied or rented out.
As Leo pointed out, much of the decrease in condo starts is made up by an increase in PBR starts. A shift from rental condos to investment PBR does not affect ownership rates.
I am looking at the specific effect of 90%+ of new builds being rental on home ownership. Which is definitely an effect to lower homeownership, by up to 1.3% per year. As I mentioned there are other factors that affect the final homeownership numbers, such as more condo landlords deciding to sell than woild-be condo landlords are buying . . We haven’t seen any data supporting that actually happening in big numbers though. But the rental numbers are real as Leo’s article makes clear. So I expect home ownership to be falling.
agree X 10
“Non Resident Speculation Tax, Speculation & Vacancy Tax, and Short Term Rental ban making it unattractive for investor.”
I agree with all of this, and would add the BC Gov’s ever changing rules and landscape in favor of tenants while unnecessarily punishing landlords. We narrowly escaped a shit show Mar 2020 after evicting a tenant that February for our own use. Tenant went on to cause all kinds of nuisance on top of not paying rent.
They came back 6 months later to see if we still lived there.
A good read, but I would venture to guess the correction was over 6 months ago . We are now on the upswing
The chart is starts of “ownership homes”, i.e. individually titled. The numbers don’t distinguish whether such a dwelling will be owner-occupied or rented out.
As Leo pointed out, much of the decrease in condo starts is made up by an increase in PBR starts. A shift from rental condos to investment PBR does not affect ownership rates.
Great article Leo, and an interesting topic.
With all the rental builds, the home ownership rate in G. Victoria must be collapsing, at a rate of up to 1.3% per year.
In the 2021 census, home ownership was 62%, reflecting 110k owned homes of 177k total homes.
But now each year there are about 5000 housing starts and only 500 are owned (owner occupied) according to Leo’s chart. In a single year, using the numbers above that would lower the home ownership rate to 110.5k/182k=60.7%. That’s a drop of 1.3% per year. There are other factors involved of course, but if this continues we should expect to see a big fall in home ownership rate.
Let’s face it, the largest segment of investors in real estate were boomers like myself. As we age, we no longer have the tolerance or need to put up with the ever increasing aggravation of dealing with tenants and rental board regulations. Plus it’s time we enjoy our gains. I see a long period of stagnation in the real estate markets across the country. Immigration is decreasing, prices are too high, and anyone inheriting real estate will probably liquidate and take the cash. It makes little sense to be invested in possible risk related assets when one is in their 70’s. You aren’t going to live forever.
Leading indicator for a price spike.
Non Resident Speculation Tax, Speculation & Vacancy Tax, and Short Term Rental ban making it unattractive for investor.