How to value garden suites
I’ve written about garden suites in the past, noting that though they’ve been legalized on paper in some municipalities for a couple decades, the uptake so far has been slow. However with the province pushing municipalities to legalize Small Scale Multiunit Housing, nearly every lot should now support at least 3 or 4 units. In many cases a true triplex or quadplex still doesn’t work within the zoning, but a suite or garden suite should be buildable in most places.
We also have some evidence that there are a lot of people that would like to build garden suites, if they were legal and practical to build. In California, when garden suites (or Accessory Dwelling Units, ADUs) were left to the cities to permit (aka obstruct), few were built. After the state stepped in to legalize them broadly, the rate of suite construction exploded by 20 times.
But does it make sense to build a garden suite, and how much value does it add to a property? There’s no doubt that sellers and agents believe they add value. While looking for examples of sales with suites, I came across dozens of listings advertising the potential to add a garden suite for additional rental income. While it’s clear that adding a source of income adds value to a property, is it enough to offset the cost?
The theory
One method for estimating the value a garden suite adds is to use the present value of the stream of rental income, minus the diminished utility of the property.
The value of rental income is straightforward if we assume that the income stream is perpetual. Just divide the annual net income (income after vacancy, taxes, insurance, maintenance, etc) by a discount rate (think of this as what you could alternately earn on the money invested to build the suite).
However, what about diminished value of the property you are building on? After all, if you’re using up the backyard to build a structure, the original house has lost some utility and that has to be subtracted from the value.
As a simplified example, take a garden suite that could rent for $2500/month and 30% of that goes to costs, netting $21,000 per year. Divide that by a 5% discount rate and we get a present value of $420,000. If you’re satisfied with a lower discount rate or you expect rents to grow faster than inflation, you can fiddle with those numbers. However that’s really a peak value-add you could expect. From that you have to subtract your estimate of diminished value as well as the potential tax liability if the property appreciates and the CRA decides to treat it as separate from your principal residence (more on this at a later date).
The Research
Research on the value-add of garden suites is surprisingly sparse. There are dozens of wild figures being thrown around by builders of garden suites claiming that adding a suite will increase property value by 30%, 40%, or even 70%. The problem is none of these claims are backed up by data. One poor study by porch.com is widely cited, concluding that on average adding a garden suite adds 35% to property value. However the study design makes it generally worthless as it confuses the fact that owners of higher value properties are more likely to build a garden suite with the increase in value from the suite itself.
More realistically, a 2012 study based on Oregon properties concluded that ADUs raise sale prices, but not as much as income models alone would predict. That backs up the impact of diminished utility referenced above. Meanwhile two studies about the impact of ADUs in Vancouver and California on nearby property values concluded there may be some minor negative impact on neighbouring property values, though evidence on this is mixed. The best study is likely this 2024 paper looking at the Los Angeles market, which concludes building an ADU raises property selling prices by 7-9%.
A convenient example
I pulled about a dozen sales of properties with garden suites in the last few years (there just aren’t that many out there yet), and while anecdotally it certainly seems there is a positive impact on value, there’s too much individual variability on property and home condition to really get a solid estimate of magnitude.
However there is a convenient example on a street fairly close to where I live. Several properties have been subdivided here recently, and a quartet of new homes were built in 2019 at 1638/42 and 1643/67 Kenmore. 1642 Kenmore is just a house, while 1643 across the street has a detached garden suite. Though there are of course other differences, both are new builds in the same location on the same size lot with a similar sized main building.
What’s the difference in value? Well according to BC Assessment, the one with the garden suite is worth $260,000 more. As a cross-check, adjusting the sales price of the property without a suite to when the property with a suite sold, we get a premium of $180,000 for the suite.
A rough method no doubt, but it puts the increase in value at similar levels, and less than might be expected if we only considered the potential suite income.
What do you think, will building a garden suite increase the value of a property more than the cost of the suite?
Speaking of cost, Marko Juras recently shared a cost report for a garden suite built in Saanich totalling some $320,000. No doubt cheaper than the cost to buy a 1 bed condo there (median: $365,000) and no hassles with strata, but is it worth it at that price? And are there cheaper options? More on this at a later date.
Also the weekly market activity:
| April 2025 |
Apr
2024
|
||||
|---|---|---|---|---|---|
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Sales | 116 | 264 | 388 | 679 | |
| New Listings | 344 | 740 | 1076 | 1620 | |
| Active Listings | 3103 | 3228 | 3324 | 3017 | |
| Sales to New Listings | 34% | 36% | 36% | 42% | |
| Sales YoY Change | +11% | +4% | -17% | +7% | |
| New Lists YoY Change | -8% | 0% | -4% | +56% | |
| Inventory YoY Change | +11% | +11% | +12% | +48% | |
| Months of Inventory | 4.4 | ||||
Easter hit sales pretty hard, and in the last two weeks I haven’t adequately pointed out that the year over year comparisons are a little wonky right now because of it. Last year, Easter was quite early (March 30th) while this year it was quite late (April 20th). That means the start of the month looked more positive than it really was due to comparing to the Easter lull from last year, and the end of the month figures will be affected in the opposite direction. It also feels like the post-Easter hangover is a bit more than just missing the 1 or 2 sales days, with both previous years showing a continued decline even after the holidays were pulled into the average.
All in all, it should mean that April will show a fairly significant drop from last year’s sales rate with a fairly similar rate of new listings. Both April 2024 and 2023 were quite strong to end the month, so it would take a very sharp rebound in activity to close that gap in the last 8 days.
New post: https://househuntvictoria.ca/2025/05/04/april-market-roughly-stable-on-cool-side-of-balanced/
Yeah never really had an issue either. Probably didn’t get the ideal price since I’m not a big haggler but still substantially more than at the dealership.
Attractive women usually have negative experiences selling on FB marketplace. Weirdos come out of the woodwork
I never suggested that I was selling a vehicle. I am not selling a vehicle.
I’ve sold three vehicles (all privately) and also don’t have any negative experiences to report.
I have sold almost all my vehicles privately over years, at least probably 10 or more and I have never had any issues with crazy people or negative experiences, in fact most experienced have been enjoyable, maybe the sellers in this case should look in the mirror at their sales process.
Increasing the CMHC price cap for insured morgages from $1 million to $1.5 million appears to be having an effect as more middle income household Candians qualify for a mortgage with a downpayment below 20 per cent.
Half the house sales in the Victoria core, so far this year, now lay between 1.1 million and 1.7 million. Up from 2024 when the range was from 1 million to 1.5 million. That has led to a slight increase in the annual median price from last years $1,250,000 to this years $1,310,000
With 456 sales so far this year one can break the data down by percentiles for the first 25 percent of sales (114 sales for starter homes) laying between $753,000 to $1,104,000 . Average days-on-market (DoM) was 29 and Months of inventory for April was 1.9. The typical home selling at $979,000 is a 1950’s home of around 1,700 finished square feet on a 6,000 square feet lot.
The next 25 to 75 percentile of sales for middle income households (227 sales) laying between $1,110,000 to $1,700,000. Average DoM was 31 MOI was 3.1 The typical property at $1,310,000 being a 1969 built home of some 2,300 square feet on a 7,500 square feet lot. Think of a Gordon Head property.
The next 15 percent for upper income at $1,705,000 to $2,345,000. (68 sales) Average DoM was 35 MOI of 3.4 The typical home at $1,985,000 is a 1968 built home of some of some 3,000 square feet on a 10,000 square feet lot.
The top 10 percentile of sales (47 sales) between $2,350,000 to $6,280,000. Average DoM was 40 April’s MOI of 5.6 The typical home at $2,861,000 is a 1990 built home of some 3,750 square feet on a 11,500 square feet lot.
When it comes to single family housing in the Victoria Core the market seems to be in balance for most household groups and not significantly favoring one household grouping of prospective buyers over another.
Maybe I am getting old, but post covid on average people have become much more difficult to work with.
You may be getting old, but I’m pretty sure that’s not what’s causing it. We just bought a new car, and since the dealer offered us $3k more on the trade-in than what we expected, we took it to avoid having to deal with deranged assholes. We figured with the incoming tariff idiocy from Putin’s bitch, it might be prudent to get a car purchase out of the way. In a couple of years, we’ll have a better idea of whether it was a stupid decision.
I just made a YT video on a similar topic to this “Will AI replace real estate agents in the future?” and will post it next week.
Tesla offered me 50% lower than market value for my Model S 18 months ago so I ended up selling it privately and personally I would take 5k less from a dealership not to have to deal with people. It was brutal. People not showing up for appointments, taking a 30 minute test drive then offering me 18k on an asking price of 28k (why not lowball subject to test drive to save me some time?), inspecting a car with 283,000 km with a microscope, asking me about the health of the battery when I would be 100% transparent with them upfront “original battery – 8-year warranty expires in 1 month – new battery replacement is 23k – no warranties, at your own risk.” There was at least 10 crazies I dealt with. One guy took it for a 40 min test drive – we went to Elk Lake and back and then it turns out he had to sell is Bolt first to be able to buy the Tesla, but it was going to take a a couple of weeks to get his Bolt ready for sale. One person just wanted to drive a Model S….like why just not go to the Tesla dealership and waste their time?
On the real estate front I’ve been offering mere postings for 15 years now and definitively seeing an interesting trend. Clients that have used my mere posting SUCCESSFULLY when they reach out 10 years later to sell a subsequent house they still use me but want my full-service option second time around which is kind of interesting given first time around they sold successfully via mere postings.
Maybe I am getting old, but post covid on average people have become much more difficult to work with. It is difficult to put deals together with two agents in between parties – not sure how things would go for the majority of private transactions.
One struggle is people really can’t see beyond their self-centered perspective. Just on Thursday people emailing me to view houses and noting they want to start viewing homes in Victoria this weekend, but it would be subject to their townhome sale in Surrey they plan to put up for sale in June and their thought process was market is slow so sellers will be willing to work with them. How do you not reflect a bit and be like hmmm, once we put our townhome up for sale would we entertain a subject to sale of a condo in Surrey (market is completely dead) that the buyer plans to list in 1.5 months? Obviously they wouldn’t consider it, but somehow, they think the seller on their purchase will.
Anyway have to get to some showings today 🙂
Yes. I just sold my used car, and the amount of weird people issues you have to wade through in this process was truly an eye-opener (haven’t done it in about 20 years). Now extrapolate that to trying to sell a house by owner, and I think it tells you the value of having a good agent, and that’s even without getting into the weeds of the paperwork. We did sell one house privately to the renter many years ago and it was smooth, but “listing” and open houses and crap by owner, no thank you. I mean, I like to complain about commissions as much as the next man, but wow this car sale thing was a slice…
Vicre, sounds about right , nice quality Reno that showed real well , no lack of traffic today .
So ~$400/sqft?
Vicre, I will say 50 g over list . Accepted offer in place Friday tells me first offer was a good one . I would have said 800 g for the Reno, as it showed real well , someone knew what they where doing
Looks like a 500k reno.. I am going to guess it goes somewhere between 2.2 and 2.5.
Oh shite, expensive house and shite house and everything in between is selling. The market is doing okay .
ARe POS houses selling in Victoria?
Yes they are.
https://sites.listvt.com/1471finlaysonplace
Went to an open on plumer today older home nice Reno , 2.6 ask , 3 days on the market with an offer in place . Nice houses in nice hoods seem to be selling well.
Not even quality, just have to be half decent on nice lots in nice neighborhoods. Take the 2 sales on meadowwood, both went 100k plus over assessed and ask, not much renovations on either but looks decently kept.
If I were to sell my truck or my Wife’s car. I would have them both tuned up, fresh wiper blades installed and professionally detailed… Right down to that “new car spray” shit they douse it in before I had any eyes on it. As with anything its all in the presentation.
There are over 400 rental listings within an eight kilometer radius of downtown listed on Craigslist today. Average asking rent $2,100 per month.
For a one-bedroom that’s an average of $1,750 per month
A one-bedroom apartment may start as low as $1,575 per month or about $2.63 per square foot.
For a two-bedroom it’s about 40 per cent more at $2,425 per month. Lowest price purpose built apartment starts at $1,950 per ($2.17 a quare foot) Heat and hot water is included but not parking.
Of course rentals can vary considerably depending on if it is a basement suite, purpose built apartment, or a condominium.
But in most cases the value of a strata condominium will be related to its economic rent. And that is usally 20 to 22 times its annual rent. For a leasehold condominium it is about half that rate.
No it’s the sellers with POS houses that’s not selling. Quality products are still selling at fairly strong prices in multiples.
The economic uncertainity is weighing on the Greater Victoria market has resulted in a weaker than typical start for what should have been a strong spring market.
A disconnect between sellers that are hesitant to lower their prices while buyers facing tighter financing conditions, are either unable or unwilling to meet it.
Busy days… Sorry for delay on April numbers, new post soon.
Carney probably won’t spend money like there’s no tomorrow, as Trudeau did, but I’m predicting another inflationary cycle with elevated interest rates.
This next renewal will be the last five year term until the house is finally ours. We are at 1.86% until October 29. What would you guys do? I want to wait until the last day, the wife is questioning that since she thinks fixed rates will be going up and more often than not she is correct. We have Carney in charge now, that’s a game changer.
Pretty funny now thinking a property at the height of the market in 81 was 140 grand and crashed down to a whopping 90 g’s . Times sure have changed , that 50 grand is walking money now lol
random stabbing downtown again…. I’ve also noticed that the undesirables are frequenting cook street village in numbers now.
1980 through 1985 I didn’t really understand the fundamentals of the real estate industry. I would have been far too consumed playing super mario bros on the NES gaming console while Listening to Twisted Sister on the turntable at that time.
Condos, town homes, houses. There is no consistency in property types.
That’s because it isn’t the property that’s the problem but the person’s ability to make the payments. And that can happen to any person due to loss of income, injury, etc.
Whole commercial building in the Oaklands area with two small ground floor commercial units and two apartments up, I always wanted to buy it but lost its appeal (to me anyway) with missing middle policy changes. Rather buy a larger lot and go for a brand new sixplex versus paying 1.6 for a 35 year old 3,500 sq.ft. building.
You know what’s crazy about court foreclosures is how unprepared the lawyers are…..like who is paying them. Yesterday there were a number of matters before the judge before the property my client was bidding and every single lawyer I was just like what da….
One scenario is the lawyer (representing the lender) goes up infront the judge to ask for a 30 day redepmtion period (typically you ask for 60 or so days). The lawyer is completely unprepared, doesn’t have a recent appraisal (important because courts typically only grant quick redepmtion if there is negative equity), etc. But here is the crazy part, lawyer notes there was an offer on the property in March but as far as he is aware subject were never removed….and I know the property in question. Subjects were removed in early April. I didn’t want to stand up as the matter had nothing to do with me but basically the entire thing was a waste of time because the property completes soon (while the lawyer is trying to get the courts to approve a 30 day redemption, lol). Even without MLS access if the lawyer had googled the property address in question he would have seen it sold (and could then call the listing agent to verify).
The judge yesterday was excellent thought and was helping out the lawyers with the procedures and what they needed to do to accordingly represent their clients.
Groot- How many of the 10 foreclosures are condos?
Pierre Poilievre is to run in a byelection in Alberta. The Conservative Damien Kurek won the riding with 82.1 percent of the vote. That makes this an almost sure bet that PP will be back as the leader of the party. The biggest challenge for PP is that he was the second most disliked politician behind Justin Trudeau.
The irony was that PP ran on platform of change, but being a career politician he is part of the political clique that Canadians wanted changed.
do you mean the commercial space sold for 1.6 or the whole building sold for 1.6?
where can we access that data from the court website? willing to pay for a fee to see the deal.
It’s annoying when I see people keep posting that building “high-end” ADUs requires $400+/sqft.
When they say “high-end,” it’s quite misleading, as almost all those spec-grade builds are constructed at around $180–190/sqft.
You see builders around town constantly telling the public they’re busy and exceptional at what they do, yet barely anyone shares their line-itemed numbers.
Things have changed since July last year. Framers and electricians haven’t slowed down for about five months, but other trades have started looking for jobs. Just drive around construction sites and scoop them up. (Also, check the city’s website to track approved building permits for addresses/locations.) It won’t take long to find great people in town. Good and old news about construction here in YJJ: there’s no competition, and
some older guys are retiring soon…
The entire building
do you mean the commercial space sold for 1.6 or the whole building sold for 1.6?
As at today, there are 10 properties in Greater Victoria under court order to sell. Ranging from a condo in Songhees asking $550,000 to 4,000 square feet home in Christmas Hill listed at $1,279,000.
During the last 90 days there were 7 sales by court order ranging from $381,000 for a downtown condo to a high of $1,650,000 for a 2100 square feet condo in Esquimalt.
This does not include properties that are listed but have not been granted a court order where the home owner still has a chance to sell their property using their own real estate agent.
There was also a residential complex with ground floor commercial space that sold under court order for close to 1.6 million which I was considering.
I have seen a significant increase and I expect that to continue as mortgages are set to renew at higher rates this year and possibly into next year.
There are opportunities present for those that want to capitalize on others misfortune. But I don’t see any of these as great deals as they are not selling for a noteable discount from market value.
house on my little street has been on the market for close to a month priced at what I think is market value, still no bites yet. Another neighbor also relisted not too long ago
Max, it’s all about diversification. I currently have 15 to 20% cash in my investment account earning 3 to 4%. Like you my wife will also have a gov’t pension, markets will be fine in the long run. So diversify and prioritize your health and enjoy life.
Frank, I myself grew up in Van and no nobody we knew couldn’t afford their mortgage. I remember farmers in the prairies that lost farms , they must of been friends of yours .
Lots of people lost their homes, where did you get that idea?
80s crash was deep but didn’t last long . Don’t know anybody who lost a home . It was the crazy high interest rates that crashed that party
Yesterday must have been a record.
Yes, prices tripled in the 1970’s. And doubled in the 1980’s – despite the “crash”.
More listings today, lots of selection.
Housing also went up in the 1970’s during high inflation thanks to the “oil crisis”. That was a scam. The 1980’s crash was inevitable given the dramatic rise in the 1970’s.
.>.. Now I’m not saying we have the same circumstances today as then. But you never know what hazards lie ahead, as recent events have demonstrated.
Here’s what you missed out on by selling that Vancouver house in the 1980s . Followed by your decades living out east warning BC’ers online about the next crash that never came. People that “hung on” and stayed in Vancouver don’t regret their purchase. They have happy memories and no regrets looking at this chart..
Er, the crash did come less than 50 years ago. Of course no housing forums at the time, but I don’t recall any naysayers in the media either. Just the usual reasons why housing always goes up. Until it didn’t.
Now I’m not saying we have the same circumstances today as then. But you never know what hazards lie ahead, as recent events have demonstrated.
Max- Life begins at 60.
…And If you still have another 10 years to go (like I do)… Make sure your position is recession proof (investment wise) I’m not talking about the house here. Bobbyk, you seem to be a fat cat. Where are you parking your money? Commodities are in the basement and tec stocks don’t seem any better…what do you suggest to diversify? Buying the dip is nothing more than a gamble given the global atmosphere at this time.
Exactly and don’t cheap out on the location. There is a reason why certain neighborhoods are consistently more expensive than others.
“I think the “Average Joe/Jane” who buys today and holds/affords for 25+ years will make huge profits as well.”
–
I would bet the opposite will happen, almost every time an asset class outperforms over a period of time vs its historical average the next period is almost always an underperformance over the next time period. But really who cares, buy a house you can afford to live in and diversify your investments and enjoy life.
Back in the day, people bought a house to live in for 25 years. I was born 1974, so I was an 80’s kid. Logging, commercial fishing, mining…Anything natural resources had super high unemployment. It was the government workers that kept the roof over your head back then. Expo 86 really helped turn things around. The mid 80’s through to the mid 90’s were a very vibrant time for Victoria.
.> What matters is what people can afford and we all know what’s happened to that over the last 50 years.
Yes, we do know what happened . Over the last 50 years, smart people bought homes, afforded their mortgages, paid off their home and got rich on the equity. Despite naysayers on housing forums telling them the crash was coming. And the smart buyers realized that affordability got better for them each year after purchase, as their mortgage stayed the same, and their incomes grew with inflation.
The highest 66% of incomes can afford an average home, and so the home ownership rate is about 66%. I don’t see that it could get much better than that, and it has never been much better than that. Because we are building rentals, which lower the homeownership rate.. But the current rate (66%) is still higher than in the past (60-62% in the 1970s-1980s for example).
The measure of affordability isn’t just that you can afford to buy it in the first place. It’s that you’re able to make the payments to completely pay it off, and hold it long term while it appreciates tax-free. A record high number of homeowners are currently doing just that, Back in the 1980’s, lots of people lost their homes through unemployment, interest rate spikes and forced moves for new employment.
For example, youve told us about your 1980’s Vancouver house purchase. But didn’t you sell it within a few years, and after counting mortgage, interest payments and inflation, how much real net profit did you make? Compare that to someone who bought and held for 40 years, and now has a Vancouver house in the multi-millions.
I think the “Average Joe/Jane” who buys today and holds/affords for 25+ years will make huge profits as well.
No worries! Mystery solved.
My apologizes Joe, I grabbed the wrong quote. Sorry man.
In all politeness, I’m not sure how this relates to my comment that the Liberals will do nothing to reduce immigration.
How the Country plans to financially survive moving forward without high volumes of oil extraction to be sold on the global market.
Expectations, or should I say what you think other people’s expectations are, mean squat.
What matters is what people can afford and we all know what’s happened to that over the last 50 years.
Honestly not sure the point you’re trying to make.
After that name the prime minister under which oil production increased 40% to a new record.
It’s the opposite. People’s expectations of a “ nice house” have skyrocketed over the last fifty years of so.
I would like to ask one simple question, to everyone on this blog. Name one thing in your life that doesn’t require high volumes of oil extraction. Even with net zero, explain to me how that would even be possible without high volumes of oil extraction.
Westerly, all the ones I’ve seen are in Saanich. The zoning precludes any short term rentals and as of May 1 they can’t just do it anyway.
Liberals were just reelected…
So that’s the definition of a nice house 15 years ago? Interesting concept.
Good luck with that.
> almost 9000 sqft flat lot with a 1 bed suite on a secondary bus serviced road
In the old days a “nice house” had two stories ,ocean view on a quiet cul-sac.
Now “nice” means a bungalow w/basement suite with the “feature” that’s it on a busy bus route.
I could see a 10-year (total) flat span, or lower than inflation appreciation. The run up in prices in the preceding decade or more was ridiculous. Cut down Airbnb, tax landlords more, regulate landlords more in pretty off putting ways, reduce immigration, cut out foreign buyers, and ratchet up building (maybe) and not too hard to imagine that happening.
The bungalow in question is a semi renovated double garage house on a almost 9000 sqft flat lot with a 1 bed suite on a secondary bus serviced road in what most people (especially those on HHV) would classify as a desirable area of Victoria. Thanks for the discussion.
I explained to her it was just a “strategic divorce” and it didn’t really mean anything. We could still love each other under the table…She didn’t buy it.
I hear you. We all have so many great ideas …that just fail to be approved by “the boss” 🙂
.> . . My theory is the buyers are buying the nice stuff and skipping the not so nice stuff;
An alternate theory…. We’re all lowering the bar for what we consider to be the ”nice stuff”. For example you posted “good options” of a $1.2m 1960’s bungalow on a busy street…yikes… is that really now considered to be “the nice stuff”?
SFH Median up to $1,200,000 and HPI index up >3% YOY. These numbers make zero sense to me based on what I am seeing on the ground. My theory is the buyers are buying the nice stuff and skipping the not so nice stuff; therefore, it is skewing both the median and the HPI.
I have suggested strategic divorce with my wife in the past. No dice.
Damn. There’s the rub.
Risk adjusted would still yield a positive outcome. Thanks for the discussion.
> Sounds like a pretty good setup for two people in a relationship to never legally enter into common law/married status if they both own property.
If they’re living together, it’s not a choice to “never legally enter” common law status. If you’re not married but are living with someone in a conjugal relationship for at least 12 months continuous, the government considers that common law for tax purposes. Small breaks in the “12 months continuous” living together won’t reset the clock, so you’d have to be living separately if you want to avoid common law status for tax purposes like PR.
There are other rules of course that determine common law status and the courts end up considering the “totality of the relationship” so playing some tax-motivated games to avoid a common law status would likely fail in court.
I’ve seen a lot of house in Gordon Head recently as I had buyers buy something in Gordon Head a few weeks ago. Lots of good options and choice right now, imo -> https://www.realtor.ca/real-estate/28237049/1583-kenmore-rd-saanich-gordon-head (if you don’t mind a slight busier street).
The numbers are getting to be insane and given my parents are in Croatia most of the year we have a place to stay but getting to the point where it almost makes sense to buy a 280k Janion unit to crash at when your PR is booked. Mind you this doesn’t work for people with lots of stuff.
Isn’t this the flip next to Leo’s house that Marko went into? I think it’s going to go somewhere in the mid 1.5s, wondering how much $ they will end up making?
Don’t say I didn’t warn you Thursty!
Sounds like a pretty good setup for two people in a relationship to never legally enter into common law/married status if they both own property.
Re insurance
$812 last year, $840 this year. No earthquake. Last year it jumped to over $1300. The only thing we had not checked for reducing the premium was permission to do a credit check. Checked that and it dropped to $812. As far as I can tell, they never actually did the credit check.
108 new listings in the last 24 hrs, I think that is the most I’ve ever seen. I like to review all new listings/sales/price reductions every day but quick glance will have to do at 108.
What are your thoughts on this thought process. We haven’t had a period in Victoria 10 years apart where prices haven’t gone up. We’ve been treading water for the last number of years
Median SFH 2022 – $1,180,000
2023 – $1,150,000
2024 – $1,145,000
2025 – $1,163,250
Do you think it becomes riskier and risker for a buyer to wait to purchase as we move into year 4, 5, 6…etc., off a flat market in terms of a potential jump given we’ve never seen a 10 year flat span?
I think the make or break factor will be whether there are government layoffs. If the hiring freeze is maintained, I would expect the same fairly steady but not incredible (or as some call it, “resilient”) market we are seeing now. If there are layoffs, however, I would expect the bottom to fall out fairly immediately.
The new registration BC registration process took out another chunk of the market (can’t find article but it was either 1,500 or 15,000 in BC further removed from market). I have a 31 night stay in July at for $11,200 payout after Airbnb fees. I’ve had a couple of requests for August that I’ve decline but might test it at 15k. Mostly Americans, last one I declined noted the place they’ve stayed at the last couple of years can no longer offer stays less than 90 days and they were looking for 53 days.
Friends also recently stayed at the Grand Pacific and what a pos at $250-$450/night. I thought it was all original from the 1990s, you can hear people talking in the adjacent rooms, furniture is old, door to room squeaked like no other, but when I looked it up apparently they had a $5 mill upgrade in mid-2010s https://en.wikipedia.org/wiki/Hotel_Grand_Pacific
The hotels aren’t crazy expensive here, but the value certainly sucks. In other place in the world the hotels are actually nice not 1990s furniture and dirty carpets for $400/night in the summer.
Long story short I think there is an great opportunity for PR Airbnb for those that travel and don’t have a lot of personal stuff. I think 3 months at these Airbnb rates will cover my mortgage, strata fees, and property taxes for the entire year.
Really don’t know why they don’t just auction them off transparently.
Yep, I know there’s someone who hates the word but market pretty resilient compared to many others around the country right now.
Another trip to the Victoria Court House this morning and yet again my client outbid (multiple buyers showed up and the property sold for substantially more than asking price/accepted offer going into court).
I always cringe when the judge is reading the offers as the winning bid buyers knows exactly by how much they outbid other offers and sometimes it can be a wide spread (at least with multiple offers with regular sales the winning offer doesn’t know how much they cleared the second-best offer by).
In my 15 years have yet to see a “deal” on foreclosure in Victoria.
Insurance, property tax, repairs and maintenance (if you’re useless) are all going through the roof. Makes keeping up your own property difficult enough, let alone a couple rental properties. Insurance and property tax probably cost me over 40 grand a year. I’m afraid to add it up.
Yup it’s gone up for everyone. I’ve had to crank the deductible in recent years to keep the insurance premium somewhat reasonable, but has still nearly tripled in 12 years
Todays numbers aren’t a train wreck , we are still doing pretty well . I’m looking for an uptick this month with carney now in and trump having his wings clipped . I do agree looking further out Victoria will do well .
It’s worth checking around for insurance.
TD brought ours down by $350.00 after we said we would switch unless they came up with better numbers.
I look forward to the day when someone comes up with a new model for insuring houses. I think it is totally out of hand and people should put pressure on them to make radical changes.
I know several people over the years that were treated horribly even when they had to make a claim. One took over a year to sort out.
Everyone should take the time to phone their insurer and complain and demand changes.
Some of the answers we heard from the broker were outrageous. We finally told them to stick it where the sun doesn’t shine.
Something is really wrong with house insurance and I think that it’s only a matter of time before someone will come out with a new model…..a disruptor model of some kind.
Well I hope not, but I must admit it’s all I can do to maintain a positive outlook on this while hearing what the Bloc leader Blanchet had to say about Canada. I mean literally yesterday coming back from a trip & listening to the endless airplane announcements in French, I was thinking about how we turn ourselves inside out to accommodate people, meanwhile this Bloc pri#k is going on about how Canada isn’t a real country but he’s ok taking whatever he can from us. You have to give your head a shake wondering how these folks think they’d really do independently or being absorbed by the US. I don’t think a party dedicated to serving a single province & with a view of dividing our country should be allowed to sit in federal Parliament.
But my rant of course has nothing to do with Victoria RE! For what that’s worth, I think now is a pretty good time to buy. A lot of bad news is out there already, and I agree with those here who think Victoria’s longer-term fundamentals are very strong. It’s a good, sane environment – if & provided you can find a home you can live with and can actually afford, I think it’s a good time to buy.
Month April April
Year 2025 2024
Net Unconditional Sales 642 679
New Listings 1,629 1,620
Active Listings 3,425 3,017
Last 10 years Sales/New Listings (low sales and highest new listings since 2010 and second highest new listings in last 35 years)
2025 – 642 / 1,629
2024 – 679 / 1,620
2023 – 637 / 1,036
2022 – 824 / 1,367
2021 – 1,116 / 1,516
2020 – 287 / 667
2019 – 696 / 1,392
2018 – 774 / 1,291
2017 – 885 / 1,270
2016 – 1,286 / 1,590
2015 – 840 / 1,135
REaddict, “offloading because of not being able to generate that airbnb income any longer,”… Not sure if you meant not at all, but I believe they can still ABNB the suite. Only 1 suite per HH and I would assume that suite would have to be legal itself or the owner wouldn’t be able to get a license? I haven’t followed this closely myself but have considered doing ABNB in our PR in the not too distant future.
Edit: Actually maybe you’ve answered this in part, “not the suite”.
Sounds like you got earthquake….
Anyone else getting hosed on their house insurance this year?
I have owned my house for 10 years, my first insurance bill was 900. Has gone steadily up every single year and this year? $3700.
1006 Karen, I’d say was airbnb’d in part. Not the suite, but that one room set up downstairs with attached bathroom and outside patio area. I’ve seen a few houses lately that you can tell they are offloading because of not being able to generate that airbnb income any longer, or at least not legally.
Glad the election is over. Unsurprised by the results, although I did think the conservatives might get a few more seats. Quite telling that Mr. Pollievre lost in his own riding. I’m glad that the bloc did not end up as the only party with enough seats to influence a minority government as their interests are so province-specific. It was touch and go there for a while.
Stock market still down. Economy doesn’t look too good. We’ll see how and if this affects Victoria house prices later this year. Seems like the liberals are going to borrow more and spend on housing.
It’s more populous so this would be an expected and desirable outcome in a democracy.
One thing I was actually heartened by is that both major parties had significant support (even if not many seats) in all areas of the country. Libs only dropped below 30% support in AB and SK. Cons only dropped below 30% in QC and NU
—- Liberal share of the vote in Quebec was 42.6%.
—— That’s less than Canada overall liberal vote (43.7%)
—— And about the same as BC Liberal popular vote (41.8%) (compared to 41.0% for Conservatives in BC)
—- so in BC, more people voted Liberal than Conservative, and BC elected more Libs (20) than Conservatives (19) too.
The people have spoken!
https://enr.elections.ca/National.aspx?lang=e
don’t have time to look right now but have you seen this one? https://www.realtor.ca/real-estate/28085538/955-falmouth-rd-saanich-quadra
Much newer house compared to those 2 you listed.
Perhaps it was due to conservatives spoiling their ballot by using a black pen instead of the pencil provided..
Soon another 60 million people will be inhabiting all that land, according to Leo.
Quebec played a bigger role in determining the election.
Agreed. Here’s a map of Canada showing the 2025 winning party in each riding, ignoring the land size of the riding. As can be seen, there’s lots of red and blue across Canada.
Libs (red) won 20 seats in BC, and beat the Conservatives in Canada by 25, 169 to 144.
If 13 or more seats Libs won in BC had instead flipped to Conservative, the Conservatives would have won the election in Canada
BC played a big role in determining the winner of the election!
Election maps can be misleading, since they represent land and not people. The Conservatives won 19 of 43 seats in B.C., but that wouldn’t be apparent from an election map.
looking at 1009 Ridgeway and 1006 Karen soon … @VICRE or anyone else – any thoughts? layouts show both homes have two suites which i think has good an bad (good if i want to take some house back in the future, have my mom move in etc and still have rent potential) but bad as its more risk presumably to get called on by the city? also managing two sets of people likely more annoying then just one… otherwise i like the look of both of them at first glance… open to thoughts from all!
Which is similar to the rural/urban divide in the U.S. My point exactly. The election map west of Ontario sure looked blue to me. Maybe you need to adjust your set.
In 1980 the Liberals did not win a single seat west of Manitoba. The PCs won a single seat in Quebec, whose premier was René Lévesque.
The country is less divided regionally now than it was then. The real political split in Canada is urban versus rural. The are regional differences of course, but they are more the icing on the cake.
I could also refer to less recent fun events such as the Conscription Crisis of WWI.
Been like that pretty much from the start. Pretty common in parliamentary democracies really.
No it wasn’t. Everyone was suing everyone. The banks tightened, resulting in a soft market for the detached SFH that was very short lived and then did a complete moon shot in price acceleration until around 2007 doubling the value of the typical detached house on the south island. The 2008 GFC came around resulting in another plateau (We thought for sure its over). Only to be followed by another moon shot price acceleration period. Covid comes around, another plateau, followed by another moon shot.
Strata councils all over town absolutely hate me. I will roll into their building with permission, parking permit in hand, blocking off their resident loading zone with a sea can. I will then march into the building and throw the elevator moving blankets up. Since I have the key for the elevator, I am constantly shutting down the operation of the elevator for duration’s of 15-20 minuets at a time…All day long.
We load everything from cabinet box’s, granite tops, flooring, door’s, tools, and whatever else we need up there. I have developed a very thick skin when it comes to dealing with people.
LMAO entirely depends how your fictional house is priced
If I put my house in North Oak Bay up for sale today, I’m sure there would be 10-20 buyers for it. It would sell in less than a week. The demand is overwhelming.
Yes, there are really only two choices to form government in this country. The NDP (what’s left of them) will never be elected, the Bloc only has representation in Quebec, which should have split decades ago. I see the country dividing in the future, some provinces might opt to join the U.S. , it’s totally feasible.
Would you make the same comment if the Cons were in the lead?
If condo prices keep drifting lower there will be a drag on the price of single family homes.
During the height of the “leaky condo” crisis, single family home prices also came down. The reason is that the buyers of detached homes were often the sellers of condominiums. House prices didn’t come down to the same extent as condos, but they did come down in price.
That’s why it is called a Market Place.
I was responding to your point of “why should we care if seniors are renters”. The reason we should care is a) it costs the taxpayer a lot to subsidize seniors and b) seniors are least able to change their situation because of ill health/aging/being retired. https://www.theglobeandmail.com/business/article-statistics-canada-survey-shows-homeowners-net-worth-dwarfs-that-of
I think when we are talking about funding programs from taxpayer revenues then we need to assess best ROI and greatest need throughout the social support system and assess all the knockoff costs and implications of social policy. This is one of my biggest concerns with how public policy is made – it seems to be tied to election cycles rather than lasting logic.
Short term fixes need to work long term or you are digging a hole you never fill in and future generations pay for it.
Saying that it doesn’t matter that seniors or adults without kids are renters is not good policy imo. Affordable housing for those with children should definitely be a priority, but seniors are particularly vulnerable and we need to be able to retain and house workers across the income range.
Gee I wonder why there are people unloading at 6/7 figure losses all over the country. Remember when you wanted to pay 950k for that rundown haunted house in gordon head in 2022?
I don’t think SFDs are going down anywhere in this country. The weakness we are seeing is thousands of AirBNB condos being unloaded. Increasing condo fees don’t help.
These are all separate issues from housing. Paying for retirement care is an important issue for sure, and one that government needs to spend money. But you lose me at using that as a reason we should subsidize young people buying homes now. If I’m understanding your point, it is that we should make it easier for people to buy homes now so they will rise in value so much that they can pay for their retirement and retirement care. And what about the 33% or so that don’t buy a home? And how about the young people in 30 years that need to be buying these homes and indirectly paying for retirement care for others? Or taxpayers today that just care about funding their own retirement, and are not prepared to pay to help someone else retire rich.
That doesn’t make sense to me, so I’ve likely missed your point, if so please elaborate.
I suspect the months of downtown condo inventory will be from 6.5 to 7 this April. That and the average days-on-market will be in the 30 to 40 range indicates the continuation of a buyers market for downtown condos with median prices trending lower.
I wouldn’t advocate panicking as Max has been “joking” about. But if you own a condo that is nearing ten years old you might want to revisit whether to hold or sell. After ten years that condo is going to start to need repairs and replacements of flooring and appliances.
We can’t build affordable housing but that does not mean we shouldn’t build more PBRs. A decade from now these PBRs will be affordable housing.
Today a new PBR unit is expensive to rent and the buildings are not near full occupancy. Eventually the property managers will have to put heads in beds or face foreclosure as they can not contiune to operate without netting a profit. They can only continue to offer incentives such as a month or two “free” for the first year or two before they have to start lowering rents.
And over the next decade or so that could have a domino effect right down to the mom and pop basement suites.
If I were CMHC part of the preferential financing package for these new PBR’s would be that they have to reach 90 percent occupany in 12 months of completion and maintain that level to keep their Goldilock financing.
I guess because homeowners end up with equity to pay for retirement and retirement care. Senior renters end up in subsidized homes and taxpayer money gets spent on this. And without subsidized housing, which already does not match the current need, senior renters can end up homeless when rents rise past their pension incomes and they have no way to earn more due to aging/health issues. A very precarious and vulnerable position to be in.
There should be more secure affordable housing for everyone. We need more education assistants, ECEs, service workers and other lower paid employees in our community whether or not they have kids. People who worked and paid a mortgage and are now elderly should benefit from their secure status. The lottery win nature of appreciation is not their fault, and can be dealt with through a graduated home equity tax, perhaps with a credit for ex. creating an ADU on their property.
Only 34% of Canadian households these days have any children living in them. That number has been falling steadily. Society should incentivize households with kids to own a home. And low incomes to find acceptable homes.
But for the majority (64%) of households that are “adults-only” to not own their home, that’s not a “crisis”. In fact why should society care if they rent instead of owning?
Any taxpayer money spent on housing should be targeted to the 34% of households with kids.
Are they buying the same type of product or are they skipping steps on the property ladder. Hard to imagine 40 year olds buying a condo or even a townhouse as their first home.
You forgot the “thanks for the discussion” 😉
But there is some good news as home prices continue to fall across Canada in real terms, look for this trend to continue.
Crea notes the organization recently downgraded its national sales forecast for 2025 to a nearly flat uptick of 0.02 per cent from 2024, which was also less than a banner year. In January, CREA was predicting a gain of 8.6 per cent this year.
Against that economic backdrop, Mr. Rocca says, he is starting to see an increasing number of people under financial pressure.
The typical first-time homebuyer in Ontario is now close to five years older than they were just a decade ago, as eroding affordability forces buyers to delay their transition to ownership.
In 2014, the median age of a first-time homebuyer was 36, but within five years that had shot up to 38. By 2024, the median age rose yet again, to 40.
THE GLOBE AND MAIL SOURCE: TERANET
Looks like our government is turning more American. A country split down the middle.
The conservative mind at work…
No. She even brought a black bic pen so they couldn’t erase it. She made it very clear.
Well actually you have no idea how your wife voted. She could be a huge Carney fan but keeps it on the down low to avoid triggering you.
I made a new sign over the weekend just for you…
You mean the demand curve slopes downward? Have to remember that. 🙂
Ahh a joke. How about this one for you Max.
Why did the stoner stare at the orange juice box for hours?
It was a joke dude…Calm down, relax. We just got back from voting BLUE. Three votes to blue came out of this household today.
Then why are you thinking condo corporations are going to freak out and fire sale the units for pennies on the dollar? As I said the the investors are hanging onto values. The strata corporation can’t fire sell them as the units are individually owned.
Groot, I did. This is nothing more than a softening or plateau. A plateau that will once again be ripe for another explosive ascension.
Want to try reading my post again Max.
Okay, so the condo corporation is going to freak out and fire sale the entire building for pennies on the dollar? Sure there could be defaults. These investors you speak of have other capital…Otherwise they wouldn’t be investors to begin with.
Meanwhile a 5th floor 1bd/1bth non water view 11 year old condo just sold for over $900/sqft…..
Condo investors are hanging onto values, given that they did pay premium prices. There was the general expectaion that the market would improve with interest rates moving lower, but with confidence levels taking a hit, the outlook is uncertain. Add rising costs of ownership for maintenance, insurance and reserve funds and the softening rental market and condos have become a lacklustre investment. What we are ending up with is a lot of unsold condos built for investors needs and not that of home owners.
As more units come onto the market and Victoria hits ten year highs in active listings there are going to be more defaults. Its going to be rough period for awhile until the inventory of unsold condos clear. That’s going to take some time.
No, but foreigners would. That’s the idea.
When you shake your head can you actually hear all the loose screws rattling around in there? Would you buy a pre-sale? If you were to buy gold, would you be happy with paper gold or physical gold?
I-am-Groot
April 27, 2025 5:53 pm
Mute
Ending this month with 330 rental listings within an 8 kilometer radius of downtown. Should be interesting to see what happens during the summer break in May and June.
Lowest priced one-bedroom apartment is $1,600 per month in James Bay or about $2.50 a square foot.
Lowest priced two-bedroom apartment is $1,995 per month near Hillside Mall or about $2.20 per square foot.
~~~~~~
“After so many years of crazy rents these seem cheap.”
~~~~
these are not cheap at all. New construction of rental townhome are getting 2.40/sqft- say 1300sqft 3 beds.. gets $3100+utility.
.> The vast majority of Canadians say the federal government was right to ban foreign purchases of Canadian residential real estate.
According to a Research Co. survey released Thursday, 76 per cent of Canadians support the federal goverment’s ban, which will remain in effect until Jan. 1, 2027,
They should at least allow foreigners to buy units in new apartment builds. Australia and New Zealand allow foreigners to buy for most new apartment builds. That would help the current collapse in multi-unit construction numbers, by encouraging developers to build by providing more well-heeled pre-sale buyers.
Sounds like a $2.5 ish house today. Likely still doable for a doctor with a stay at home wife that’s upgrading.
Ya 90s was a pretty dead decade for spec builds. It was a good time to buy an apartment building in Van though
None, not even on the roof peak. It was behind Hobbs, Carleon. I was young, 23…Up to my eyeballs in debt with a private lender. But I made it out, that was recession territory too!
What kind of views?
In 1996 I built a spec house in Cadboro Bay off Arbutus. I sold it to a Doctor and his stay at home wife for $380k. I made $35k off the build.
I’m thinking this years spring market will push into summer . There’s a large amount of pent up demand out there looking for a reason to buy imo. With Carney as prime minister sunny days are back again
Ya I mean 2 people each making 80k/90k a year can still get a million dollar house. Now days that’s like 2 mid to higher end provincial government union employees. Not sure how much those people were making back in y2k.
I still think its relative. In y2k $250k bought you a good “move in ready” big house on a big lot. Wages were lower and interest rates were higher.
We need another plandemic for sales to pick up. Still baffles me.
Wall Street Journal reporting a sluggish spring market for U.S. home sales also:
https://www.wsj.com/economy/housing/home-sales-march-2025-drop-mortage-rates-1f9a6047?mod=business_whatsnews_pos1
Thursty, sorry to say but I think the spring market is over man, we won’t see any price appreciation this year. Sub 4 mortgage rates currently means 800k mortgage will require roughly 4k to carry.
I am betting also no appreciable impact whatsoever. There are a number of sellers that believe that after the “election uncertainty” sales will pick up.
Will be nice to have the election behind us. I myself find emotion is a big part of why we buy , so it would be kinda neat to see if emotion and the election figure into house sales .
Relative to this time last year
Sales: -9%
New lists: +4%
Inventory: +12%
Good idea. My bet is no appreciable impact. Not sure what the market mechanism would be for affecting sales? Even if election promised goodies those don’t arrive that quickly.
Month April April
Year 2025 2024
New Unconditional Sales 549 679
New Active Listings 1,440 1,620
Active Listings 3,396 3,017
Looks like we will end the month between 630 and 650 sales.
Leo, idea for a post. Take a look at the last 10 federal elections and compare the sales #s in relation to 10 year average three months prior to election and three months after an election.
Ending this month with 330 rental listings within an 8 kilometer radius of downtown. Should be interesting to see what happens during the summer break in May and June.
Lowest priced one-bedroom apartment is $1,600 per month in James Bay or about $2.50 a square foot.
Lowest priced two-bedroom apartment is $1,995 per month near Hillside Mall or about $2.20 per square foot.
After so many years of crazy rents these seem cheap.
The vast majority of Canadians say the federal government was right to ban foreign purchases of Canadian residential real estate.
According to a Research Co. survey released Thursday, 76 per cent of Canadians support the federal goverment’s ban, which will remain in effect until Jan. 1, 2027,
The requirement should be one million USD per individual for permanent residence. That might just barley cover the infrastructure rebuilds that would be necessary.
The respondents in the survey are taking the price they’d have to pay into account.
The percent of young people wanting SFH is much higher where SFH are lower prices. Presumably many more of them would prefer a SFH, but not at the sky high prices seen in BC. Because in the survey, they were asked which house type they prefer, with the assumption that it wouldn’t be free and they’d have to pay for it. If price wasn’t a factor, yes probably close to all 18-35 would want a SFH.
This isn’t Las Vegas. What do you suggest these young people do for entertainment in the city?
I’m surprised it is that low at 67% I would have thought that nearly all 18 to 35 year olds would want a SFH.
Agreed. I’m all for that.
And Canada is the 2nd most preferred destination worldwide for immigrants. Only USA is higher, according to Gallup polls.
https://news.gallup.com/poll/652748/desire-migrate-remains-record-high.aspx
Next msg
Interesting Canada-wide recent (sept 2024) survey results, where SFH are chosen as the favored housing type by 64%. And the demographic that favours SFH the most – is young people (age 18 to 35, 67% want SFH). So much for the idea that they want to live in missing middle or high rises. And of course the young people strongly prefer city over rural living.
https://www.reminetwork.com/articles/canadians-home-types/
All of this points to increasing demand for the dwindling supply of SFH.
We’re making hotdogs (condos), buyers want steak (SFH).
Patrick, agree and Canada really needs to pump
Up immigration as it’s much too low. We easily have room for 700,000 plus a year , just imagine how great that would be for the economy
That’s because there’s no money in it anymore. Even in Langford land assembly is Huge! 24 storeys on what was once three houses. Land is very expensive, and that is just the way it is. I counted eight hammerhead cranes when I went to Tim Hortins this morning.
Expect to see higher house (SFH) prices.
Assuming the Liberals win (as expected), immigration levels stay high (400,000+/year). Likely continued population growth for Victoria, since it has best weather, lowest unemployment in the country and was voted world best small city in 2023 and 2024 https://www.tourismvictoria.com/conde
This combined with dismal housing starts in Victoria seems to be increased demand vs reduced new supply – the classic recipe for increased prices.
Well Bobby K, that does appear to be what has been happening for the last two to three years. I don’t have any reason to believe that won’t continue.
When i’m out for my runs i make note of homes I see for sale south of UVIC including Uplands and Oak Bay and I mark them on housesigma and interestingly over the last aprox 2 months out of about 25 homes only maybe 2 have sold, these would be homes in the 1.5 and up range with most in a round 2 to 2.5 range, so not the high end. As i’ve said for several years I predict prices will continue to go sideways at best while inflation makes them cheaper for the rest of this decade.
No signs of upzoning leading to “build, build, build” in Victoria. Construction starts (CMHC data) 2025 YTD down in all categories in Victoria. Even the targeted and upzoned category of “missing middle” is down 26% YOY.
Saanich (21 starts) and Oak Bay (9) YTD starts are so small that they are probably at/close to zero if tear downs are counted,
https://www.vrba.ca/news/cmhc-reports-housing-starts-33-lower-vs-2024/
“New single family homes are down 32%, large multis have declined 34% and missing middle housing (townhomes, duplexes) are down 26% from January to March.”
“ Year-to-date, Langford and Colwood again lead in new home construction at 356 and 125 units respectively. The City of Victoria has 73 followed by Saanich at 21. Sooke has 10, Oak Bay 9, North Saanich 5 and Esquimalt 4. Sidney has 2 new homes . Central Saanich has 1 new home and View Royal and Metchosin continue at zero.”
What will happen is the lenders will give the developers the time necessary for the units to be absorbed. What amazes me is we just went through all this shit back in 2008.
Groot , land prices are just 1 component and it’s not holding back the market for both sales and starts . Bankrupting and putting projects into receivership is a bizarre view of economics.
Well that’s great. These new buyers can then pass along the savings and rent them out to tenants for pennies on the dollar…Problem solved. The lenders are already using blanket appraisals on these builds. The units will be absorbed, and life will carry on. If you are speculating on a sky box (mom and pop) with the deposit on a heloc. Well then you probably shouldn’t even be in the game to begin with.
A recent article by Kerry Gold in the Globe and Mail reported that Bob Rennie of Rennie Markting considers that Vancouver is swamped by unsold condos while demand for housing remains strong and rental rates are declining.
That doesn’t fit most peoples understanding of supply and demand. Lots of supply with strong demand should have properties selling. However this is the hangover result from a market that was previously drunk with investors.
Myself, I agree with real estate appraiser David Eger, vice president of Western Canada for Altus Group that land prices are too high and have to come down before new construction is economically viable. I don’t agree with Patrick Condon an Archectural professor at UBC that more regulation will generate affordability or that “we are inflating land values rather than capturing the new value for public purpose.” Which to me is a completely nonsensical statement.
The government may be able to fiddle around with interest rates, taxes, and construction incentives but that won’t solve the problem. Land prices have to drop substantially before new construction is viable once more. That type of decline would likley cause new strata and rental developments to fall into receivership only to be bought at a later date for pennies on the dollar. Only then could a new purchaser complete the project and make a profit.
Cities like Vancouver and by extension Victoria that have a lot of new strata and rentals being built could be seeing some hard times ahead. In short we won’t create affordable housing by building more units but by projects under receivership being sold to the highest bidder that can then complete the project and sell the units at a much lower price. The market has to first clear the backlog of unsold units before more should be built.
Not that it matters. I’ve been around since Househuntvictoria himself was the original author of this blog. He never did end up hunting down an affordable house here in Victoria. He gave up and bought in Alberta.
Vicre, I would agree , another Debbie downer renter waiting for the bust that never comes
Apparently he is a perma bear who’s been posting for 10 plus years. I think we can all understand his frustrations given what the market has done.
Are you suggesting we panic sell everything and run to the hills?
The Housing Market is Shifting according to original story by Klara Pittsbrough from Home Harmony
West Coast cities are seeing declines according to recent Zillow data as illustrated by year over year median prices. The mark down in prices may seem small but this is a reversal of decades of year after year increases.
San Fancisco -4% due to tech layoffs
Seattle -3.1% due to increased inventory and days on market
Phoenix -2.8% due to slashing prices with neighborhoods that saw the biggest booms having the biggest losses
Denver -3.5% with regular price reductions
Las Vegas -4.2% due to tightened short term rental regulations
Boise -5.8%
Salt Lake City -4%
Los Angeles -2.5%
Portland -3.6%
Source: Info@homeharmony.com
We need homes (that last) not pictures of deep space. Interplanetary travel is impossible and a waste of time and money.
Wait until they finally figure them out.
Damn straight Frank. Why are we wasting time building things like the James Webb Space Telescope when we could be building pyramids!
You don’t see us building any Cathedrals with intricate stone work that will last several hundred years. We have lost that skill. Along with many other skills. Technology has weakened our brains by doing everything for us. Use it or lose it.
You sound like my Dad. He always told me to knock that chip off my shoulder…Or he’d come over and knock it off for me!
Max, do you actually comprehend what you read or are you just a poor comnunicator? Try reading my post without the chip on your shoulder. Stop being that 20 year old douche bag of your youth looking for an argument.
Only because I was Grandfathered into it. My former Doctor retired and sold the practice to my new, much younger Doctor.
@ Groot…
My oldest Son (20 years old) could teach you a thing or two about hard work. He can also touch type 30 words per minuet on his iphone. He is currently attending Camosun College for his 1200 hours of technical training as a registered apprentice in the trade of carpentry. This is all 100% paid for through the Ministry Of Skills, Training And Labour. He also collects EI while attending. His employer pays for his books and parking pass.
This is a perfect example of procreation…The purpose of life.
That’s a classic example of projection!
When older generations say others are “useless,” instead of reconizing that at their mature age they are less productive they strike out at others.
Every generation has been criticized by the one before it -whether work ethic, techonology, or social values. But history shows that younger generations always dapt, innovate, and push society forward.
Today’s generation faces different challenges- whether an ultra-competitve job market, skyrocketing costs of living, or adapting to rapid technological shifts. Hard work doesn’t always look the same as it did decades ago-being productive and successful today often means working smarter, not just harder.
But to an older generation if you are not bent double over a shovel all day long – then you have it easy.
You call being glued to a TV or computer screen an advantage? That’s why people are so useless. Max also has a family doctor.
I wouldn’t call it an advantage to be born in Victoria. When Max was growing up Victoria only had two televison channels. On and Off.
I have said this many times. I approached Langford requesting permission to construct a garden suite in my backyard for the purpose of renting it out for income. She looked at me like I was really f#cking stupid. She explained I would be required to subdivide my lot to make that happen. It was suggested that I describe the proposal as an accessory building with the purpose being a guest house.
Max- Your major advantage was having been born and raised in Victoria, you know a lot of people. Where to get things wholesale, contacts you’ve developed over the years, etc.. Unlike most of the contributors on this site who are transplants from around the world and wonder why prices are so high.
That and they don’t like people seeing their magic math where $75 in supplies is billed out as $867 or 18 hours on site is somehow billed out at 42 hours. Or they mark up the retail price on a piece of equipment from $5200 (they likely get a it from a direct supplier for $3200) and charge $12000 for it with another $11000 on top of that for the install. I think it must be the the lack of competition here in trades combined with so many government types paying for things to be done that don’t know what things actually cost or how things actually work.
I built it in 2016. No, I don’t have the energy to ever do it again (not to that level anyway). I don’t even drive nails anymore…I drive a truck and traverse around town and tell people what to do all day long now. I will tell you that I deal with suppliers and sub trades on a daily basis. It does not cost $425 per sq/ft to construct a ADU.
Max- What year did you build your guest house and do you have the energy to do one now?
Three sets of design plans ready for municipal approval cost me $600, they were even folded, because they don’t like them rolled up at city hall. There were no legals. I was in the ditch with a shovel working along side my machine operator. I was taking elevation shots keeping an eye on grade. I cribbed the foundation all by myself using 1×8 and quick strip flat ties. 8″x16″ reinforced footings with 8″ reinforced walls.
I cribbed the foundation up as a mono pour (footings/walls at once). I calculated the concrete volume and booked the biggest concrete boom pump in town to pump the required 10 meters of concrete over top of my main two story house into the forms out back. I ran the pump and hired a guy (for $20 per/hr) to run the vibe. The two of us stripped the forms the following day and stacked it aside to be repurposed during the framing process.
I installed all the perimeter drains and rain water leads by myself…keep in mind I’m picking everything up myself in my truck (no deliveries) and I am paying wholesale prices. The following day I again worked along side the machine operator drain rock (inspection passed) back fill followed by sand fill for the slab. At this time it was fully serviced…Sewer, water, direct burial tech cable for the 100 amp panel.
I now focus on slab prep for a 4″ concrete slab. I rent a plate compactor and use water and compact the shit out of it. Now its time to call my plumber. I don’t just thumb through the yellow pages looking for my sub trades…I know my guys. The plumber comes and I dig all his ditches in the sand. The inspector comes, signs it off, and I back fill all the ditches. I give it a final grade, compact the ditches once again with the plate compactor and water. I then return the plate compactor and then come back and lay the 6mil poly in preparation for the cement finishers.
I managed to convince my cement finisher to wheel barrel the concrete back there as apposed to getting the $500 concrete boom pump back again. There were four of them, it took them 2-3 hours for a nice finish…It cost me $800.
Okay, so now we are ready to frame and I was hell bent on using every stick of lumber that was peeled off that foundation. I hire the $20 per/hr guy again and had all the walls up, sheathed with the 1×8 on the diagonal and good to go for the 12/12 para chord truss system that is being wall top delivered via crane first thing tomorrow morning. The two of us then spend the next four days completing the roof, including the 30 year roofing shingles.
Entrance door and windows installed. I did all the tyvek and exterior cladding myself with the use of wall gecko gauges (google it). I installed the aluminum soffit. I subbed the gutters and down spouts out.
Now its time to call the plumber back and have him do the rough in…Have the electrician in to give me direction as to where to drill all his holes for his wiring back to the 100amp panel, I took care of the ventilation…Bath, range, dryer. Inspections passed, time for insulation. Its way cheaper to have a professional insulator do the job. It has to be inspected and I ran the numbers…You just can’t beat their volume pricing.
Drywall, again…You can’t beat their volume pricing. They load it, they board it, they finish it…They scrape and sweep the floors and get rid of all the scrap. I did all the painting myself. I was able to use my painters account (close friend) this saved me at least 30%. Flooring I ordered directly from the mainland saving me almost 50%.
Cabinets i bought out the back door (fuck ups) for $125 per box. You can even buy an entire kitchen out of a show room for $1500 if your timings right and you know the right people. Counter tops I ordered from colonial and picked them up and installed them myself. I ordered all the lighting from the mainland. I didn’t supply any appliances…I made the kid pay for that. He works full time and makes good money.
80 hours is a long time. You can get a lot of work done in 80 hours if you put your head to it. When suppliers and sub trades come to a job and see Max on the job busting balls, on his own property, on his dime…The respect is night and day. They will sharpen the pencil. That’s a fact!
There’s a recent sale of a 1,642 square feet 5 year old house on Celestrial that sold for $825,000 with no ADU
https://youtu.be/OUwgknHIpx8?si=Zo7FXUXzp8LtCvXy
And then there is a recent sale on 2935 Constelation at $1,320,000 for a 1,978 square feet four year-old home with a 524 square feet accessory dwelling unit over a double garage.
https://youtu.be/4VIJ7Nb4-Qo?si=rX2AANcpejPVK823
And 1247 Freshwater that sold at $1,095,000 for a 1,710 square feet home with a 15 year old 595 square feet ADU without a double garage.
Should be obvious that people do pay more for a property with an ADU. How much more? Well that depends on what it could receive in rent. Which is typically in the range of 11 to 13 times annual rent.
A new one-bedroom 1 bathroom suite will get around 2,100. While a new two-bedroom, 2 bathroom will get around 2,900 a month in the Westhills neighborhood.
Is it worth building an ADU in your back yard if you hired a general contractor? It could be, depending on what rent you may get for the ADU in your neighborhood. But if you do your own contracting and did the framing you could save on cost.
At this time I think it is mostly a wash. It’s a significant cost and the payback is low. However, if you live near a hospital you could get a higher rent.
travelnursehouses.ca
New listing is up – 551 Oliver street. Wasn’t this listed recently? Only difference I can see is the addition of a barrel sauna in the backyard (but I’m not watching closely so do your own dd). Curious to what extent a sauna (or e.g. a hot tub) helps market value.
Peanut gallery. $425/sqft for a small space like this is a decent estimate. Maybe for 1000 sqft you could make it a bit cheaper but most ADUs are smaller
LOL I also missed this gem:
How the hell is this contractor even providing a line item estimate when there is no design? LOL wtf, man this whole thing is a made up story. Thanks for the discussion LMAO
Hang on, when did a cost estimate become binding all of a sudden? How is a home owner going to get a deal by being provided a itemized cost estimate.
You are quite critical yourself on other posts so why can’t others be critical of things that are blatantly wrong? When at least 1/3 of the items makes zero sense for an ADU it’s not cherry picking anymore. And I am just pointing out the obvious items as a none contractor. Max who is a contractor just said this:
I don’t know why everyone is being so critical. Marko’s client’s cost to build an ADU was $425/square foot. However it is broken down, this is what people are paying who don’t have DIY or industry skills.
As I said that’s a cost estimate sent to me from a contractor to build an ADU. English might be their second language or they dashed it off quickly as the bank required the costs to be itemized.
I have spoken many times about cost estimates and why contractors don’t like to give an itemized list. They know that the home owner will do exactly what VicAnalyst is doing by cherry picking through the items in the hopes of getting a lower price.
A lot simpler just to bid $425,000 Take it or leave it.
I have a program that breaks down costs but it’s set up for lenders’ progress draws at the 30, 50, and 85 percent complete stages. So it wouldn’t be much help for someone to compare costs from a contractor as the program distinguishes between roughed in components such as plumbing, electrical, heating etc. and when the same are finished with fixtures at the last stage of construction.
You don’t like the itemized list? Then provide one of your own. The break down maybe different but in most cases the total costs shouldn’t be too far off from each other.
Sidekick good stuff , looking forward to hearing about it .
No, still in the planning stages. Mine are big…more house-sized, and likely mid/upper end finishing.
Also given the extent of spelling errors in that list, I doubt it’s even a copy/paste from somewhere else. Dude probably just made up a bunch of stuff in his head and typed it out.
LMAO…..
LOL just realized I missed the gem on the 11k flooring and 5k tile for 1000sqft in total.
I said more market than $25k in labour to wire a new build 1,000 sqft ADU. I’ve seen quotes less than that to replace the knob and tube in a character home in Cook St village.
Sidekick, have u got a number on each of your units , we are landing ours at 319 k each and they are 456 sq ft
I don’t think so. I don’t doubt Max’s numbers, but that’s not market today.
That seems more reasonable and market than the 50k just for plumber and electrician the appraiser quoted…
Vicre, more profit doing prefabs than doing a spec build .
I am just pointing out the blatant B.S. in that estimate that’s all.
Feel free to come up with your own itemized estimate.
$10k on stove/fridge/dishwaser/microwave vent/washer and dryer?? really? Here is a kitchen package sans microwave for 3k, add in the washer/dryer and a $500 microwave with a vent it’s half what you quoted.
https://www.bestbuy.ca/en-ca/product/samsung-33-17-5-cu-ft-counter-depth-french-door-refrigerator-air-fry-range-dishwasher-stainless-steel/B0018226
https://www.bestbuy.ca/en-ca/product/equator-premium-stackable-15-lbs-washer-1-62cf-110vvented-digi-dryer-3-5cf-110v-black-ew-826-b-ed-852-b/17983705
LMAO
How many ADUs have driveways?
Lol that’s like the cost for an actual 2000 sqft house.
LMAO what?
Sounds like lots of lots of room for labour costs which are driven by the overall economy. East Coast labour rates have come down substantially already, be interesting to see what happens here in the next 6 months.
Not my costs Max. They were provided by a contractor working today building ADUs.
But your comment raises a point about cost estimates as they may vary considerably between contractors and it isn’t easy to break down the components in separate dollar amounts as costs overlap. That’s likely why you would have problems itemizing costs and can’t do the same as I have shown.
Sounds about right. Present value of rental income around $250k, so increase in value somewhat below that.
delete
I suspect becoming competent is more attitude and interest than skill. Both my wife and I grew up in families where if something broke, well I guess you fix it or you don’t have it. I started car repair because if it broke and if I didn’t fix it then I couldn’t drive. That became an interest and a hobby. When we bought a falling down house (August 1981 no less) house repair became a necessity. I had never built more than a tree fort but you start by helping friends on weekends, move on to building a fence, shelves in the basement, outside stairs, then a woodshed or garage etc. If you don’t like learning new skills and practicing you are going to avoid doing the work. If you want to do the work you will find a way. There are plenty of books in the library that cover everything. Add in youtube and the web now and not knowing how is not the problem. Personally I would rather dig a foundation, new waterline, sewer etc. than spend the same time running on a treadmill at the gym. Lots of people would happily make the opposite trade. If you find “This Old House” boring and a waste of time then you probably aren’t cut out to do your own renovations.
On the other hand, it could well be stupidity. When I was young and foolish I was probably overconfident. We jacked the house up, dug the basement down and poured new foundation walls and floor by ourselves. While I now know what is involved and could do it again if required, I probably would not try it for the first time again. Had we dropped it, it would have been an expensive mistake…… I also learned that calling a cement truck instead of mixing with a portable cement mixer is a good trade off. My threshold for calling in a truck went down to 5 yards after my first 12 yard hand pour. From there it gradually moved down to about 1 yard now.
When you start out, access to tools is an issue but you can do an awful lot with a fairly small selection. I turned out to be a tool junkie so probably have much more than average. Lots can be justified with a new project. I ended up with a table saw and jointer when we wanted new kitchen cabinets but that was 40 years ago and the table saw is still as useful as ever. Personally I would rather have a new metal lathe than spending a week in Mexico but I don’t expect anybody else to make the same trade off.
Max , I think your costs are bang on . We do a high end ADU and our material cost is about 85000 ea , about the same size
Your pricing is insane. I’m not even going to waste my time discussing it with you.
Construction estimate to build a 1,000 square foot ADU (2 bedroom, 2 bathroom) Works out to be about $425 per square foot give or take.
Drywall 15,000
House Design 4,000
Appliances 10,000
Finishing 10,000
Roof 7,200
Insulation 8,400
Cabinets 15,000
Electrician 25,000
Building material 90,000
Landscaping 5,000
Painting 12,000
Cladding labour 12,600
Plumber 25,000
Plumbing fixtureds 2,000
Heating 12,600
Framer 15,000
Flooring 11,000
Tile 5,000
ligyht fixtures 4,000
Shower doors 2,000
mirrors 2,000
concrete foundatinon 10,000
wanranty 2,000
venting 11,550
legal 1,000
building permith 3,000
excavation 10,000
contingency fund 20,000
geerneal contactor 40,000
driveway 10,000
gutteer/soffits 4,000
Max, “Your presence alone makes people work very fast and keeps costs down.” I’m not in the trades and couldn’t hammer a nail straight. We intend to build a house in the next 2 years. It will be contracted. I’m planning to be there everyday to clean-up, maybe run for supplies etc. I’ve thought about writing the “Builder’s exam” or at least go through the course so I might know what people are talking about through the various phases. I think I could save some $$ provided I stay out of the contractor’s way.
The design was very simple. It was just a matter of taking a shot with the builders level to be sure the slab was 1/4″ to the foot for the sewer. Everything else just fell into place. 80 hours of my time. I subbed out the wiring, plumbing, insulation, and drywall. Your presence alone makes people work very fast and keeps costs down.
Max- What is your estimate of the number of people hours it took to complete. You have to factor around $50 an hour, money you could have earned working for someone.
We don’t understand the luxury a lumberyard is. Early settlers had to cut down trees, debark them, and notch the timbers to build a log cabin. You can have one built today if you’re got millions of dollars. Today the roof trusses come premade and all you have to do is install them properly. Carpentry is not easy. I’ve often thought that a skilled carpenter has an equivalent skill level as a medical doctor. My grandfather built our 800 sq. ft. cottage with simple hand tools, there was no electricity in the area in 1950. No miter saw, electric (or cordless) drills, planers, etc.. Not one screw was used, everything was constructed with a hammer and nails. Not many people can hammer in one nail, let alone pounding hundreds of nails all day. He was not a trained carpenter, I have no idea how he learned the craft. He also had very little money.
Since its a heavily forested area (lots of big, tall fir trees)…We are even allowed to open air burn our yard debris in the back yard.
Max- You were born in the wrong century.
While the service trench was exposed, I ran 100′ of direct burial tech cable from the main house 200 amp panel to the 100 amp panel in the guest house. Its now fully serviced, slab poured, anchor bolts at 4′ o/c… Inspected and passed by the municipality. Machine time, concrete, ready to frame…All in at this point was around $15,000. Walls, upper floor, stairs, sheathing, etc…$1500. Para chord 12/12 truss system, delivered and landed on the walls via crane over top of my main house…$2100.
One 3′ steel insulated entrance door with upper glass comes with dead bolt and hand set. Five vinyl horizontal sliding windows with bug screens …$1200. Tyvek house wrap and cladding…$1600. So were at locked up at $21,400. Plumbing $5,000 including all fixtures. Electrical $2200 (both plumbing and electrical done by professionals). Insulation $1200. Drywall $2500. Tally so far…$32,500.
Interior…Paint, cabinets, counter-tops, lighting, flooring…$25,000. Exterior sidewalk concrete and landscaping…$1200. Municipal connection fees, application fees, and permit fees…$5,000. I managed and built the guest house on my time…It was a very simple build.
Very few people, especially those not in a trade, can do that by themselves. I would say less than 1%. Great accomplishment. A hundred years ago, the majority of physically able people could, they had no choice. Max saved 200 grand.
You try doing it dude! I had to bring 75′ of sewer/water pipe back there. The hole was 5′ deep x 20′ x 20’= 400 sq/feet foot print.
10 metres of concrete just for the foundation. Boom pump stretched to the max over top of the main house. Slab on grade, perimeter drains, rain water leads. Now you can start framing.
Max- What’s the footprint of your guest house?
Nice work Max. Interesting that it costs u 70k for the materials + excavation since you did the build yourself.
Out here in the slums. I live on a long, dead end road that surrounds a very popular lake. The properties on the road range from 1acre,1/2acre,1/4 acre lots. Great big houses. Since It’s a recreational area, Its very common for pretty much everyone to have guest house on the property with a foot print of at least 400 sq/ft in this area. Since I’m way out the boonys, It takes me an entire 5 minuets to walk up to the brand new, flag-ship, Thrifty Foods super store up at the Belmont Market.
12/12 pitch roof, elegant flight of stairs leading up to the grand 200 sq/ft master loft atop of the gorgeous four piece bath and full sized kitchen area. Its hooked up to municipal sewer, water, and comes with a 100 amp panel. The description is an accessory building, the purpose is a guest house. It took me 7 business days from dropping off my plans at city hall to building permit in hand.
I have attached a picture of the plans. Its a really simple build. I did it myself…It cost me $70k all in. I would take interior pictures since I’m so very proud of the build. My oldest Son and his GF occupy the space. I didn’t have to do any builders exams or provide any HPO numbers in order to construct the guest house.
The guest house is 100% covered by my $2400 per year house insurance. I have had an insurance adjuster back there in the past for a tree limb that caused damage. $500 deductible…No problem.
Flip side is an operating loss subtracts from your RRSP room. However taking an operating loss per se does not affect your capital gains exempt status.
And an operating profit/loss is distinct from being cash flow positive/negative.
Interesting about natural turnovers in a given newish neighborhood, never thought about that before. Regardless, this is a neighborhood of probably 50 or so houses so I think having 10% of the stock on the market at once is significant.
“5 current listings and one sold in the Rogers neighborhood in the last 30 days. That’s a very small neighborhood, is there a development going on there or something else that’s causing people to unload?”
3 are relists that have been on the market for a while. I think it is a case of people there believing it is a “desirable area” and not have realistic pricing expectations. Also, neighborhood was built 20-25 years ago, and natural turnover is probably starting to happen.
Yes. And it should get interesting, especially in 10 days when the biggest port in USA (LongBeach, Los Angeles) shows for the week May 4-10 that they will be receiving 60k containers, about half the number of containers as previous year. As the Walmart and other CEO’s told him, shoppers should expect to see some empty shelves.
https://www.cnbc.com/2025/04/22/busiest-us-ports-see-big-drop-in-chinese-freight-vessel-traffic.html
“For the week ending May 3, the number of freight vessels leaving China and headed to the Southern California ports, the main U.S. ports receiving Chinese freight and other Asian trade, is down 29% week-over-week, according to Port Optimizer, a tracking system for ships. Year-over-year, the data shows a 44% drop in vessels scheduled to arrive the week of May 4-May 10.
This data is updated on a daily basis based on the vessel manifests declaring the port destination. These vessels are either scheduled to leave Asia or are already on the water and headed to these ports.
Twelve vessels are scheduled to come in this week, down from 22 the week of April 20. Measured in shipping containers, a total of 62,568 TEUs (twenty-foot equivalent units) are arriving the week of May 4-May 10, versus 120,608 TEUs as recently as the week of April 20-April 26.”
Hard to believe a four-dimensional chess player didn’t see that one coming.
5 current listings and one sold in the Rogers neighborhood in the last 30 days. That’s a very small neighborhood, is there a development going on there or something else that’s causing people to unload?
Trump is carefully balancing the stock market and tariffs but the truth is there is significant amount of stress due to the existing tariffs (25% on metals, auto parts tariffs, universal 10% tariffs, etc.). China has him by the ba**s with heavy earth minerals (important in robotics, semiconductors, etc.) export ban as it has a monopoly on these materials.
Ya I wouldn’t call it a hot market but I wouldn’t also call it a market folding tent . Maybe just balanced with no real sign of lower prices , which is a positive
I wouldn’t read too much into it, overall market isn’t hot. There were also quite a few “deals” that transacted in the past little while.
Vicre , good to hear of some strong sales in broadmeed , the smart money is out there buying right now
you really don’t know how a lot of people operate.
This is a good point and one that many people don’t know. Rental income is employment income.
Artificial constraints.
Have to agree, landlords not reporting their rents these days (and maybe days past) are minimal. For starters as mentioned there are several points where information is easily obtained by the Gov. Also, what is the % of new owners being landlords vs people with equity and minimal mortgage? I believe the younger newer buyers will have the lion share of basement suites and at best would break-even on a suite in say a $1,3 mill home – they would have reason to report it.
Next, banks et al are looking for proof of income in mortgage / loan apps etc. Don’t report it…don’t pass go.
And, here is one maybe over-looked, perhaps unknown enough to not hit a LL’s radar, positive income from a suite adds to your RRSP room.
Why in the world would you take cash at a discount. How much are you really saving vs. reporting the market rate income minus deductions and paying tax vs. the risk and stress of an audit? And the tenant can just claim the renter’s credit anyway without you knowing even if you ask them not to. Again, foolish.
That’s funny I know many, I guess the truth is somewhere in the middle.
I don’t know anyone not report basement suite income. Also, with cash what happens if your tenant doesn’t pay? You have no record of history of payment whatsoever if it comes to a RTA dispute.
All my friends/acquaintances are for the most part walking on eggshells with tenants given all the rights tenants have been given in the last 10 years that everyone I know wants to keep everything above board in the event there is a dispute/problematic tenant.
Also, recently had clients finish a huge addition including a very nice 2 bed 2 bath suite and they are doing monthly airbnb/vrbo rentals and when I asked why they replied with “we don’t want to give up control of our property, I don’t understand if two parties willing agree to sign a 1 year fixed term lease with both parties agreeing that tenant will vacate after 1 year, why should that not be an option.”
Several strong sales in broadmead in the past couple days with a few over asks approaching 100k.
If Canada is so large and can accommodate another 60 million people, why is land so expensive?
The importance of the Owner Builder Exam is for the home owner to be aware of the Statutory Obligations and requirements. Once you have successfully completed the exam it is unlikely for you to win a court case against a purchaser when you sell the home by pealding ignorance. You can’t shift the blame to someone else as you took the course and passed it.
“… the liability imposed by your staturory protection obligations cannot be waived by agreement or contract, including by any term in a Purchase and Sale agreement.”
https://youtu.be/IC-xeRuDr0I?si=h-2xENZQvAQGAkNc
Sounds like your internet bff Introvert.
I beg to differ, the rebate is minimal, a LL taking cash will often have discount on rent anyways. My experience is that not declaring your basement rental is just as common if not more common than contractors doing cash jobs.
That’s okay, BC Housing had the resources to send an employee to a home in remote BC to put a stop work order on the home because the husband (who wrote the BC Housing owner-builder exam) died in a car accident and now they are forcing his widow to right the exam to continue the work on the home even thought home is already beyond lock up (and inspected by engineer, etc). We can sleep well at night knowing owner builder home aren’t collpasing on people.
Agreed. Add in the renters rebate and government tracking of this and not declaring is just plain foolish.
Frank, that’s why it is important to use tautologies to sell real estate these days . For example at 1.1 million you’re buying location not the house. But isn’t that true for all real estate?
https://sites.listvt.com/799byngstreet
Popped by Cafe Fantastico on Harbour Road this morning. Didn’t get a coffee. They were closed and cleaning up from a break-in / vandalism. Glass doors smashed to pieces.
Disgusting.
Must be disheartening at times to run a small business in this town.
Too late Frank….I read it already, but thanks for trying to protect me:)
Great clip by the way (I – am Groot)
I liked the car analogy- buy a $60,000 parking spot to park your $5000 car. A lot of houses are crap in our cities. Just spoke to someone who was telling me that he got a quote of $124,000 to fix the foundation on his 1970’s house. (Don’t let Deryk read this).
Here’s a different perspective on housing.
https://youtube.com/shorts/tGPHcteG9dY?si=9YMrG01RvCj389hP
Many people move for non financial reasons – life/family reasons. Family has grown, proximity to schools/jobs/family etc.
It would be just as “dumb” for someone with life/family reasons to refuse to move because they’re too cheap and focused on money to pay the cost of the move. So they stay put and live their life in a house too small or in the wrong location.
I’ve always been happy with every move. Money well-spent. YOLO.
Anyone capable of renovating a house will also be able to sell it themselves. It ain’t rocket science. Putting a sign on the front lawn might be all it takes.
I can see flippers moving every 3-5 years. Buy a run down but liveable house, renovate the basement, then live there while the main floor is renovated. Stay for a few years then move on to another project, and sell your property tax free. Not an ideal lifestyle but no better way to accumulate wealth. By doing a majority of the work yourselves, you’re bound to make money even in a stagnant market. Throw in market appreciation and it’s a win win situation.
I’ve had clients buy properties with garden suites, I’ve sold properties with garden suites, I’ve had six clients build garden suites after purchasing, etc., and I still don’t have a good gut feel on if you get your money back on re-sale. The problem is there are so many factors in play. For example, is the garden suite 400 sq.ft. or 1,000 sq.ft? A 1,000 sq.ft. would likely cost less than 50% more; however, it would be 150% bigger.
Then you could buy a $800,000 SFH in the Tilicum area and you add a garden suite versus something like this with a two level garden suite -> https://www.realtor.ca/real-estate/28196883/1918-shotbolt-rd-victoria-fairfield-east
The most classic example, imo, would be a Gordon Head home. If purchased for $1.2 million for example, and a 700 sq.ft. garden suite is added for $320k what does this home re-sell for? Is it featching $1.6 million? Not sure, seems high.
In terms of rental number once again size is important. You could likely build a 1,000 sq.ft. suite for 350k and if you fenced off a bit of a patio/garden for them that has to rent for close to 3k/month which would make it cash flow positive even if you borrowed the entire 350k against the home. On the other hand if you spend $275k on a 400 sq.ft. that rents for $1,800 then the numbers don’t look so great.
I think a good alternative to a garden suite is doing an addition to the home with a suite in the basement or elsewhere attached to the home. With an addition typically you can also improve the main part of the home and likely less risky in terms of the CRA.
Based on my experience if I had to bet I would say it is well under 10% not declaring. Too risky for landlords as tenant is filing taxes under the same address, very few tenants are paying in cash so the e-transfers are easy to isolate in event of an audit, etc.
or you can write the owner-builder exam and build it yourself.
400 seems on the steep side. But as for the who would do this. It’s not uncommon to see people build over the top houses that add less resale value to the property than they cost to build.
Property appreciation eventually brings then back onside, but you could say the same for an ADU.
interesting thing I learned from a builder friend recently.
To build an ADU you need to be a licensed builder.
However to build an accessory building that doesn’t claim to be an ADU but is 100% ready to be converted to an ADU you do NOT have to be a licensed builder.
Also to convert an accessory building to an ADU you also don’t have to be a licensed builder.
I don’t know why people do major renovations before moving – I’m not sure how common that is actually. Not common among those I know. Only major renovations people I know do is for a suite.
When prices have appreciated for 20 years on leveraged money at the rate they have people end up with move up equity which makes the transition easier.
As for moving every seven years, I don’t think this is accurate for Victoria and maybe not for Canada either. https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-do-canadian-home-owners-really-move-every-seven-years/
I can’t think of one person I know who has done this. Most people I know have only bought one primary residence – two tops. Divorce would be one reason a home is sold/bought.
The 400k came from Leo’s post below. He asked to compare spending 400k on an ADU vs rental condo. Rental condo has higher ROI most likely. And 400k in the market beats both by a mile based on past performance – given current market drops might be higher.
And where did th 400k come from? The build cost is 320k and the PV of the rental income is 420k
I don’t think most people are doing this more cheaply right now. The ROI is based on the initial capital invested in relation to the after tax after expenses rental income and after capital gains tax gain in value upon sale.
By my calculations after 10 years if the adu and condo both cost 400k and appreciate 3% per year and the strata on the condo is 100 a month more than the costs associated with the adu and both bring in 1800 a month you still come out ahead by about 40k just buying the condo. This is assuming a 1 bed condo and a 1 bed adu.
in both cases if you have 400k to invest and you put it into the stock market for 10 years you are likely to far outperform un-leveraged RE rental properties (like by about 200k) unless there is a big spike in appreciation well above 3% per year.
You probably would not use leverage for stocks, but you might for RE, although you did not indicate this in your example. If you do, you will have high interest expenses which will impact your cash flow over the next ten years (especially as the principal payment is paid from cash flow) but you could increase your ROI if appreciation spikes before the sale.
Because it will pay itself off in 15 years or whatever the math is and then you can generate perpetual income… Many people view RE rental income safer compared to what you can get in the financial markets. Also I estimate that more than half of all people who rent out suites in their primary residence do not declare that income to the CRA.
Well I wouldn’t be married to those numbers. You can build more cheaply and we don’t know for sure what the ROI is (probably more related to rental vs cost to build).
But people do a lot dumber things on real estate all the time. Who do people move every 7 years and set tens of thousands of dollars on fire every time? Why do people do extensive renovations before selling, when you almost never make the money back?
And many people don’t even have that requirement
Most amateur landlords don’t even know what ROI is. They buy if rent covers carrying costs with a decent down payment and that’s it.
What is anyone’s house going to be worth in ten years? (In answer to Vic REanalyst’s question.)
I actually don’t really care.
Why would we sell a goose that keeps laying eggs?
The numbers don’t work. People don’t just prefer real estate at any cost. People make decisions based on ROI and consider what might happen over the next 5-7 years.
Rental RE used to make a lot of sense, especially given leverage and appreciation, but it does not right now in general because prices are not appreciating, interest rates are much higher, and rents are declining. And this might not change much for 5-7 years.
This is also why pre-sale condos are not attractive to investors.
A primary residence with a suite probably still makes sense because you have to live somewhere but I would not add a single ADU for rental income or as an investment, only for a family member. And the reason being that you are essentially throwing away 140k of your hard earned equity from the get go – it is going to cost 400k to build but only add 260k to the value of your property. Who would do this?
Ya trump is dead in the water with his tariffs , next
https://www.cnn.com/2025/04/22/business/trump-china-trade-war-reduction-hnk-intl/index.html
Cave-Man Trump
Sidekick, good stuff , im doing a project right now where we are dropping 8 adu’s on a vacation property up island that I’m sure will ruffle some feathers . I will be interested to follow your build
Sure, I’m always choosing the zero maintenance option so prefer the equity market anyway, but lots of people prefer real estate. I think it can make sense if you’re buying a rental house to drop an ADU in the backyard instead of buying a rental house + rental condo. Depends on the cost of the ADU of course, but I think improved rental potential of a ground-oriented unit + no strata risk is worth a fair chunk.
What about being cash flow negative for a decade and seeing 15% price appreciation—eaten away by transaction costs—doesn’t appeal to you?
Why would you do this right now? If you have 400k extra you should probably dollar cost average into the market now that it has dropped. Or upsize your current family home to one that includes a secondary housing unit that is already built.
To invest? Neither option makes sense right now imo.
However, an ADU makes less sense if you are building on your primary residence as you do not increase the resale value by the cost to build and you lose privacy. Not to mention the rent will not pay the financing charges on the build and you are going to pay capital gains tax on the increase on the land where the ADU sits which you would have had tax free otherwise.
If you are building on a property that is already a rental property it also does not make sense simply because the cost to construct does not increase the value of the property by a corresponding amount and the rents don’t provide high enough ROI to justify this. You’d be better off to find a property with an existing ADU.
This does make sense to accommodate family and that is what the government should be incentivizing imo.
1) The numbers in the article you linked don’t support that interpretation. They found about 25% done legally and 75% illegally.
2) A higher percentage being built legally is itself a good thing
3) Skeptical whether you can reliably tell an ADU from a detached garage or shed or potentially even an awning over someone’s RV
Care to elaborate? Say you have $400k and you want to invest it in real estate. You could buy a 1 bed condo, or you could build an ADU on an existing property. Are you saying neither option makes sense or specifically the ADU doesn’t?
And does that change if the property you are building on is already a rental property or are you weighing the privacy / diminished utility into this?
I can imagine it being way less stressful to build ADUs if there are excellent prefab options. When your time to construct on site is limited to the foundation and services with the prefab being craned on or erected quite quickly this causes way less on site disruption to your primary residence. And it seems quite possible that prefab could save you 100k or so over on site built – which is also weather dependent.
One primary and two ADUs, all of around the same size. My lot/situation is atypical, so I’m lucky in some regards, and the municipal bylaws are very permissive for ADUs at the moment.
It’s hard to imagine anyone proceeding with a garden shed as an investment, after seeing the sticker shock of the $320,000 garden shed that Marko posted.
Don’t forget the headaches and stress that accompany any major build. No thank you!
A problem that occurs is finding a lender that will finance them. Every lender has their own set of guidelines when it comes to ADU’s which are always being updated.
Home owners that only have 20 percent equity in their current home excluding the ADU will find it a challenge to obtain financing. But if the home owner has say 50 percent equity then it should be easier to obtain financing to build the ADU.
That may be another more reason why we are not seeing many ADU’s being built. Those that need the additional income from an ADU the most are likely the least to have lots of equity in their property.
As more ADU’s are built and a clear re-sale market emerges the lenders will become more accepting to finance them.
We did the math for an ADU in Victoria and it did not make sense as a rental or for resale – at all. A money and privacy-losing proposition.
The only way it made any sense was to gift land and have the adult child finance construction. An equity losing proposition for parents, but an overall a win for family.
I am a little hopeful that if Mr. Carney is elected there will be significant tech and economy of scale advances in prefab housing that will bring down costs and increase uptake.
>>… Who is investing $100K+ to build a structure that the city could order them to take down tomorrow as soon as one neighbour complains?
Obviously it’s lots of people building unpermitted ADU’s, and that’s 4X the number of people getting permits, as both the CBS news article and the Stanford study describe.
This is nothing new to California. Unpermitted and under-permitted dwellings have been big news in California for decades. And tolerated by the government, so a neighbour’s phone call isnt doing anything. Many of them are in low income neighbourhoods (Compton etc.) and simple dwellings for family.
The article I posted interviews some contractors building them…
“ A construction worker who aske to have his identity protected for fear of losing his contractor’s license said he continues to see illegal dwelling units being built from the Peninsula to the South Bay and beyond.
“They’re converting garages. They’re doing additions in the back. They’re making separate entrances. They’re doing what they can to house their families,” the contractor, who gave his name as “William,” told CBS News Bay Area.
Doesn’t pass the smell test. Who is investing $100K+ to build a structure that the city could order them to take down tomorrow as soon as one neighbour complains? Wonder if a lot of those “ADUs” they discovered on satellite images are just sheds.
Regardless, if people were really widely building illegal ADUs it would further strengthen my point that this is something that land owners want to be able to build.
Good article.
“the rate of [California] suite construction exploded by 20 times.”
Maybe.
You’re looking at California permit numbers and equating that to rate of suite construction. Problem with that is 80%+ of newly built ADU units in California are informal/unpermitted units. Easing the permit process creates a substitution effect, where ADUs that would have otherwise been built unpermiteed are instead built permitted . And existing unpermitted units can get permits. That’s not the same thing as an “explosion” in construction. For example, if only 2% got permits in the past, and now 40% get permits, thats a 20X rise in permits, with the same construction and would explain a misinterpretation that “ the rate of suite construction exploded by 20 times.”
https://www.cbsnews.com/sanfrancisco/news/unpermitted-adus-growing-issue-bay-area-contractors-researchers-say/
“Using satellite images including Google Earth, and other methods of evaluation, researchers at Stanford University’s Regulation, Evaluation, and Governance Lab determined for every legal accessory dwelling unit built in San Jose between 2016 and 2020, there were three-to-four “informal” or unpermitted ADUs built.”
“ For example, it is possible that recent ADU legislation has yielded less a net growth in housing and more a substitution effect, where ADUs that would have otherwise been built informally are instead built aboveboard.”
What’s it going to be worth in 10 years?
We considered adding a garden suite to one of our families properties. We looked at building and also at pre built units that could be craned in etc but were disappointed with the final cost numbers. By the time you do the foundations or slab, plus all the electrical and the new plumbing lines etc., city approvals, plans, etc., we decided against it and bought a duplex in Moncton instead…..for less cost than putting in a garden suite. A professional property management team looks after everything. The money goes straight into our account. Income, after all costs, is more than the garden suite would make. The Moncton property has doubled in value over a short time. The rents have also gone up. The property where we were going to place the garden suite stays the same with no change in the size of the property and there is no need to put up with tenants in your space etc.
In our case, it was the best option.
Yours might be different.
The duplex shown below was bought for a tiny bit more than two hundred thousand dollars., five years ago.
At the time…..some on House hunt Victoria had a good laugh saying I was crazy. (Some still say I am crazy. Of course, they are right…… I am crazy, but just for a lot of other reasons:)
There are still amazing real estate deals in Moncton and I would love to inspire others not to miss out.
Sidekick , hmm interesting, are u saying 3 detached adu on your 1 property and a local a local municipality would look at that
Cool, keep us posted on how it goes.
I’m in the planning stages for converting my SFD to 3x ADU. Not sure it will end up being feasible, but I’m cautiously optimistic at the moment. Purely from a financial perspective, I don’t think it’ll be as smart as a single large SFD, but it’s significantly more flexible. Keep one, sell two (or rent 2). I’m not interested in living in a giant house once the kids are gone, so this seems like it could be a good option.