May: Sales up a little, market remains balanced
The 758 properties sold in May represented a drop of just under a percent from a year ago, but that slight dip was only because there was one fewer business day this May than last. Accounting for that difference, sales per business day were actually up 4%. Call it roughly flat.
On a seasonally adjusted basis, sales actually bumped up from April’s result, and it was better than we’ve seen for most of this year. Note though that these small movements can’t really be distinguished from noise until we see a pattern over a couple months.
When combining all sales, the same bump is evident. There’s no doubt that sales are sluggish, but we’re still a good bit above the levels we had in the solid buyers’ market a decade ago.
New listings remain very healthy, and in fact the trend (smoothing out the seasonally adjusted data) is higher now than we’ve seen in 15 years. What’s behind that? Is it owners being forced to sell because they’re doubling their mortgage rates on renewal this year? Surely that’s a small factor, but mostly it’s just extremely stubborn sellers that just will not give up on peak prices. The majority of new listings today are actually just re-lists from last year (or 2023, or 2022) that have been cancelled again and again when the stagnant market didn’t meet the sellers’ expectations.
That’s partially why inventory isn’t skyrocketing despite the strong new listings. Inventory is rising – both on a raw and seasonally adjusted basis – but we’re still a good bit short of the peak we reached a decade ago.
With the small uptick in sales, both measures of market balance actually improved a little in May, reversing the trend we’ve seen the last few months.
Combining the two measures still leaves us on the cool side of balanced market territory, but back somewhat closer to center than it was last month.
Single family pricing remains pretty robust so far, higher than we’ve seen in 3 years, while condo prices turned down a little bit again.
Relative to assessment, the changes aren’t showing up though, making it still unclear whether the shifts in medians are just compositional changes or noise. Given the market conditions, flat prices are more logical.
The Bank of Canada will decide on Wednesday what to do with rates, and right now the market is split on whether they will drop or hold. Last year that decision would have been nearly meaningless because fewer than 10% of borrowers were taking variable mortgages. However, that is no longer the case. With a smaller premium to go variable and expectations for further cuts, borrowers have piled back into variable rates, now up to 44% of mortgage volume. Rates are the key right now, but I don’t see too many people predicting a return to the rock bottom rates we saw 5 years ago anytime soon. I think affordability will have to return the hard way.
Thanks, Marco, for your comments about cheap labour and I did not realize it has become the norm in the “mature” market here in Victoria.
A Fijian immigrant (second generation) used to work in hotels folding sheets and doing laundry. They became a realtor in the past 15 years or so.
Once they joined the “owner’s club,” they didn’t stop there but scaled up with friends who are also insiders (general contractors, bankers, local trade suppliers, property managers, and even accountants).
I overheard that one guy closed 20 deals in his own name over the last two years, earning around $500,000 in residential commissions alone. That allowed him to invest in rental properties without outside capital.
Another guy has built and sold 14 spec homes and moonlights at a bar twice a week (he’s a realtor, too) in the past 15 yrs or so.
Another person, who focuses on commercial deals (2-3 each year), pockets close to $1 million annually. He also owns several rentals in transit-oriented areas, waiting for a potential windfall.
I won’t list the guys who own multifamily or older apartment buildings in town (and up-island), but they’re insiders with direct, quicker access to deal flow, while outsiders have to fight for the leftovers.
Victoria attracts many capable immigrants, and some are doing exceptionally well. That said, the wealth gap between renters and owners is becoming significant. We’ve seen small-scale developers building new spec homes ($1-2 million) and flipping renovations, while sharp minds collaborate(gp/lp) on projects ranging from $14 million to $40 million. It’s amazing to see hardworking immigrants pool their efforts and get things done and enjoy their life here.
I am just a little obsessed about the local RE and immigrants and might end up doing something together with those guys in the RE.
Should be the other way around, one seller can own several properties. In my case I know there are at least 10 buyers for my one property.
By using a subjective or opaque definition of sellers and particularly buyers. The only objective definition is a buyer is someone who actually buys, and a seller is someone who actually sells, and by that there is always the same number of buyers and sellers.
Contrast to the stock market which draws a distinction between bidders/askers and buyers/sellers. And both are transparent and objective.
Sorry, I meant to say wealth. To some extent, this may be due to overweighting of real estate for Canadians relative to US, and the higher real estate prices in Canada.
The GINI index, a measure of wealth distribution, is much better in Canada vs USA. By having a much more progressive taxation system, Canada redistributes the wealth among the population to some extent.
After adjusting for currency?
While those are important, for me, important ones were income equality, lower crime/guns, social safety net, health care not tied to employer, etc.
While Canada’s “average” income is about 25-30% lower than USA’s, our median income is 10% higher than USA’s. Canada has a more equal and inclusive society, not as equal as many European countries but much better than the USA.
Funny how people want to live in a country with a defined border instead of a revolving door.
Re cheap/foreign labor, I think this is a global problem. My father is from a small island (smaller than Salt Spring) in Croatia and now workers at the local bakery that is 6 generations old are from Nepal and India selling Croatian baked goods. The locals on the island rent their apartments three months a year and that is enough for them to survive the rest of the year and they have zero interest in working.
As the standard of living has increased foreign workers have become the norm.
I am involved in some Croatian to Canada immigration groups and they have really died down big time. These days when people ask for advice re immigrating to Canada often the response is, don’t bother coming 🙂
A number of Croatian YouTubers that were documenting life in Canada have gone back to Croatia (even thought they have CND citizenship now). For example, this truck driver guy has a large following on YT (107k subscribers) just went back to driving trucks in Croatia/Europe after many years in Canada -> https://www.youtube.com/@milos_samardzija From what I gather from his videos the biggest decision for his family to go back was cost of housing.
What use are public health decisions based on science when you don’t have a family doctor?
One YTer was explaining how in Croatia when his first kid was born you receive a public pediatrician until the kid is 7 years old with regular check-ups. If you are not happy with that pediatrician you can go to a private children’s clinic. Second kid born in Canada they were shocked that GP sees them and the don’t have a dedicated pediatrician doing the check-ups/following progress.
I have dual citizenship and unless you have perspective you don’t really see how far Canada has fallen since my parents came here 30 years ago. Sometimes when I am in Zagreb I’ll go out at 2 am due to time difference to make phone calls so I don’t wake everyone up and zero concerns about walking around downtown at 2 am with headphones in place…..no way I am walking around downtown Victoria at 2 am.
In my opinion, far better options these days than Canada. It is what it is.
Good start to the month , just might well be the buyers that skipped the spring market are now coming out in force . Still not much to buy in sfd core in a big way so wouldn’t be suprised to c more bidding wars on nice houses .
Because of the increase in Estate Sales there are some stunning properties on the market. Properties that have been owned for a generation and more. Properties that normally never come on to the market.
Month June June
Year 2025 2024
New Unconditional Sales 185 661
New Listings 427 1,495
Active Listings 3,729 3,459
Strong start to the month in terms of sales, I am surprised. I thought with the BoC holding that the market would be slower.
Good read , I guess the coast is where u want to be, Victoria and the maritime markets sure do look a lot alike
East coast of Canada offers alternatives.
https://ontariohousingmarket.com/2025/06/05/east-coast-real-estate-market-update-june-2025/
You forgot to mention the readily available supply of illegal drugs and a soft justice system that allows criminals to roam free.
“Not sure I see the draw for those folks to come to Canada…”
Seriously? Where does one start? How about: stable election processes, general gov’t respect/acceptance for court decisions, respect for democracy, more freedom in what is taught and tolerated at post-secondary institutions, gov’t respect for diversity and sexual orientation, climate change acknowledgement, public health decisions based on science, charter of rights and freedoms that cannot be overturned by one person…
How does that work?
I never called for a crash, I just said it ain’t gonna go up like you hoped it would.
Vicre, so how much has sfd gone down so far this year , outside of course that niche townhouse market lol
Meh, I don’t really care about what happens to my primary residence. I like the house, the lot and the neighborhood and I get to do whatever I want with it (within reason). I can see people who stretched and bought a house they don’t really like and how that can suck but if you like the house and can afford it no problem then I really don’t see anyone stressing about valuation.
That’s for sure, Thursty if you look back at all your comments in 2025 it’s pretty clear who isn’t the winner so far.
Bobbyk, I think what we can agree on , is that we are both reading the same data and have concluded different results . I guess we shall c in time , but there can only be one winner lol
“agree there’s no big change in house prices coming”
–
Thursty on this I agree with you, due to such factors such as
“In the US after levies on imported steel and aluminum were doubled to 50 per cent this week, the effective U.S. tariff rate now sits at 15.6 per cent – the highest since 1937, according to the Budget Lab at Yale University.
Those tariffs are largely to blame for the economic softening seen across a broad range of indicators.
This week, the Organization for Economic Co-operation and Development cut its forecast for U.S. growth to 1.6 per cent this year – barely more than half of last year’s pace, citing “rising trade costs.”
A slowdown has dragged down the manufacturing sector worldwide this year, with Canada experiencing the worst factory performance across major developed economies.
Consumer confidence indexes remain near record lows in the United States and Canada.
Housing markets in both countries are virtually frozen. There were a staggering 34 per cent more home sellers than buyers in the U.S. market in April, according to real estate and mortgage company Redfin. A year ago, that gap was around 6 per cent.
Nearly every single data point I’m looking at – even the ones that are still positive, like retail spending – is trending downwards,”
Frank , I’m guessing very few. I would also say the majority of renters spend theyre nut and are crappy investors . I know the banks don’t like them
How many wealthy people don’t own a house?
That emotional attachment can make homeownership a unique kind of investment—where sentiment sometimes overrides financial strategy. Unlike stocks, which you can sell with the click of a button, a home carries personal memories, community ties, and even a sense of identity. People might hold onto a property longer than they should, invest in costly renovations that don’t necessarily increase resale value, or resist selling even when market conditions suggest it’s the right move.
That emotional layer makes buying and selling homes feel less like a financial transaction and more like a major life decision.
.>>>> Many people here claim that the primary residence is an “investment” . I responded to these claims. During a long period of stagnation, they are losing money on their “investment”, even without considering the opportunity cost.
Sounds like you’re not a long term homeowner yet. You’ll likely change your tune when that happens. Homeownership is a great investment over time – 10 years at a minimum. That balances out the “stagnation periods” with other periods of huge gains.
Many people here claim that the primary residence is an “investment” . I responded to these claims. During a long period of stagnation, they are losing money on their “investment”, even without considering the opportunity cost.
It sounds like the problem with qualifications is being addressed, at least with respect to American recruits. And real estate prices in California, Portland and Seattle are just as bad or worse.
https://www.timescolonist.com/local-news/bc-launches-ad-campaign-in-western-us-to-attract-health-care-workers-10773744
For what it’s worth, my family physician told me that the recent changes brought in by the NDP have helped with recruitment at his clinic. It’ll be interesting to see what results from the current recruitment push. Either way, I’d much rather be here than down there. I’d prefer that doctors be able to provide care to women based on their health needs vs. the whims of evangelical yahoos.
We import a lot of cheap labor when we buy products made in countries like China and India. Trump is going to fix all that.
Patriotz, there’s a lot of business that probaly wouldn’t survive without cheap labour and I’m guessing Canadians wouldn’t pay for those products and services if they where to cost more . Cheap imported labour is a business model
You have it backwards, it’s the large number of temporary workers who play a major part in overall low productivity.
Productivity is simply output per worker hour, and it has very little to do with how hard people work. Someone with a wheelbarrow and shovel works a lot harder than someone with a Bobcat, but the latter is much more productive. Productivity is driven by capitalization and technology and if you allow employers to hire cheaply there’s no incentive for them to improve these.
It’s not the jobs themselves that Canadians don’t want, it’s the 3rd world wages and working conditions that are employers are able to offer by allowing temporary workers to do the jobs.
Cut off the supply of temporary labour and these jobs would have to offer a Canadian standard of compensation to get Canadian workers. As they deserve. And I include recent permanent residents, who used to do a lot of this kind of work, in that.
Not sure I see the draw for those folks to come to Canada. High taxes, expensive real estate, lower pay and difficulty getting their qualifications recognized. For doctors and nurses, a broken system that is ideologically managed by zealots with no likelihood of improvement.
Well, Canadians believe themselves above working in fast food, hotels, elder care, farming and an ever growing list of other jobs. So, it’s tough imagine limiting temporary workers. The key work on that is “worker”. I think everyone would want to keep that productivity in the economy. Maybe look at some of the unproductive categories because am not sure you really want even more labour shortages and the cost s related to that.
I’d prefer we focus on doctors, nurses, scientists, engineers, and construction workers.
Watcher, agree there’s no big change in house prices coming and with the U.S tariffs now becoming a nothing burger. I myself expect no recession this year and we will soon be off to the races.
Canada needs as many folks as it can get its hands on . No easier way to juice the economy.
Heard on the radio that Canada let in 800,000 temporary workers in the first 3 or 4 months of the year. Never going to be able to keep up with that rate of influx.
some observations:
Worked with a group of work permit(soon to be expired) holders in town in the past 4 months( mainly punjab-speaking and seasonal agricultural worker from Mexico) on a civil work/site. They told me that they pay for $1400 for a shared room( each room has two beds, less than 10×10 feet)+utilities, so the housing cost( yes, it is indeed low-quality , cramped, over-priced accommodations) at YYJ is not going to get cheaper. I also spoke with one owners- that guy owns two houses in Saanich and he also acknowledged Vancity does not care how many people live in his house (5 beds or 6 beds/rooms etc- as long as he provided leases and proof of deposits coming in- he got funded twice and he his planning to pick up another older house in Langford)
Some of workers bounced all over the place from little towns in Manitoba , Edmonton and Victoria( with the hope to settle in Victoria). Some of them also applied for Refugee status already.
They make $20-23/hr as the labour agencies exploits both employer and those temp workers. One of their supervisors provided his direct contact info and hope to get hired for $30 for a group of 20-25 buddies. I pay the agency 38-40/hr/labour. The supervisor indicated they appreciate the” opportunities” Canada offers them to work and Victoria’s high cost of living and competitive labour market settling in Victoria challenging especially with temp work permits( they are in their 20s)
We are not going to see a major price reduction/correction in the near future as long long as the labour cost is low, and people just want to come and live here to fulfill their dream.( and nothing wrong with that)
No, list price could be $999,900 and $200-$300k under market or list price could be $1,199,900 and barely under market value.
Is that with a 1.2 list price?
Well thought out system to address a potentially difficult situation. Giving the buyers a choice of options removes the responsibility of the agent giving the wrong advice and puts it on the buyer, as it should be. You should patent it, or offer seminars to other agents. That’s a great way to generate income outside of the market.
Pretty much always better to be a listing agent. Even if your list to sales ratio falls down to 50% in a slow market still way less work on the listing end vs buyers. In slow markets buyers want to view a ton of properties, often walk away due to cold feet as they think something better might come up, etc.
I usually give my clients estimated percentages along the lines of if there are four or more offers I would say your approximate odd are
1.205 million conditional – 10%
1.205 million unconditional – 25%
$1.255 million conditional – 50%
$1.255 million unconditional – 70%
$1.305 million conditional – 80%
$1.305 million unconditional – 95%
and then I let them pick. A couple of weeks ago I had clients beat six other offers with an unconditional offer but they rescinded for personal reasons and home end up selling after for substantially more to a conditional offer. Second time this has happened to me in the last 12 months and both times home went for substantially more after buyers rescinded. I made a YouTube video on this topic but possibility of saving 2 to 5% with an unconditional offer and the best part is they aren’t really unconditional and upside (2 to 5%) far outweighs the risk of the 0.25% rescission fee.
Still shake my head at how many agents are setting up offers delays for Wednesday, Thursday and Friday as that gives an unconditional offer five days to back out instead of three.
Definitely 541 Dalton.
Unit 10 – 4165 Rockhome Gdns sold for 1.07M or ~200k over assessed. Seems like large updated townhouses in the core with green space is a strong niche market. Definitely no price declines in that segment since peak. Unit 9 sold for 890k in nov 2021 and only had somewhat older interior renos.
Yep, buyers are liars
I still think dealing with buyers would be very frustrating.
Frank, I wouldn’t be far off if I said in a hot market u want to be a listing agent and in a slow market u want to be a buyers agent. I guess in todays balanced market it won’t matter much .
It would be interesting to know what advice a realtor should give to their prospective buyers involved in a bidding war. Or is it entirely left to the buyer to set their maximum price. If I were a realtor, I would have focused my energy on getting listings, not showing prospective buyers dozens of houses and putting in competing offers on another dozen houses. No wonder Marko puts on so many miles on his vehicle and feet.
Marko, nice to hear, I was talking to a few realtor friend in north Van , they themselves are noticing the phone is ringing a little more
Surprisingly strong sales this week, I personally thought things were going to slow but not this week it would seem. Clients wrote on a SFH with a suite in the core today and we were one of 11 offers.
Is this actually a common scenario? Divorced people now living in two cities with where day trips are not possible between the two and they spend so much time in the other city that it is better to own a home than stay in hotels? How many people in BC fall into that category?
.> Then they can pay the freight. Does it need to be pointed out how many people can’t even afford one?
Well I’m just pointing out that they are very typical situations where people are subject to spec tax. If you want to decide that they must pay spec tax on the basis that you assume they must be wealthy, so want to tax them for it, that’s on you. Fact is, most of the examples I’ve heard of (including Leo’s friend) are not wealthy and just got caught up because their life got complicated for a few years.
Then they can pay the freight. Does it need to be pointed out how many people can’t even afford one?
>.>>… No, because if the couple are legally separated they can each have their own principal residence.
No, you haven’t described the example I provided.
As I stated, this is a case where one spouse owns two homes, in two cities. Different from the other spouse that owns one home. For example, a Victoria couple split, and the ex-husband lives in Vancouver in a condo he owns.. He has joint custody, so he comes regularity to Victoria, where the kids come to stay with him in his second home, a small condo in Victoria. He is subject to spec tax. Yes, he owns two homes, not because he is a speculator. Because LIFE GETS COMPLICATED for some people. If you’re someone without a complicated life, consider yourself fortunate.
No, because if the couple are legally separated they can each have their own principal residence.
. >> Actually the Spec Tax is not complicated and has specific provisions/exemptions for all 3 of those examples: Separation, illness, and moving for work. The Spec tax legislation is very generous. Leo is right; it is very easily avoidable if you don’t just stick your head in the sand.
Nonsense.
The exemptions you refer to are short term (typically one year) and limited.
Unfortunately, issues relating to divorce (child custody etc), and illness (Alzheimer’s care etc.) are long term (many years) and not covered. For example, the ‘illness” exemption only covers a second home that is needed for treatment at a hospital close by in the other city. So you still pay spec tax if you have a second home to be close to an elderly parent with Alzheimer’s for example.
—- Take the case of divorce, with dependent children . A common scenario is joint custody of children. Spouses may live in different cities. One spouse travels to the other city to visit the kids. So one spouse may own two homes, and are subject to spec tax on one of them. Because this is better than hotels. The limited exemption your refer to only covers the 1-2 year period of the divorce proceedings. And not the long issues that come up with child care.
—— illness. Someone may have an ill family member (Alzheimer’s) and buys a second home to be near them. Spec tax has limited time exemption, but not for ongoing care.
The point is, these people end up paying spec tax, and it isn’t “easily avoided by 99.99%” as was the claim.
Umm really, yep totally and people buy into it. Having said that, it’s bloody good for business as tax’s tax’s and regulations pump the bottom line
“The spec tax rules are very complicated, and it’s actually quite easy for someone with complicated life circumstances (divorce, illnesses, moving for work etc.) to get caught up.”
Actually the Spec Tax is not complicated and has specific provisions/exemptions for all 3 of those examples: Separation, illness, and moving for work. The Spec tax legislation is very generous. Leo is right; it is very easily avoidable if you don’t just stick your head in the sand.
It comes down to most peoples’ view on taxes being: tax everyone else except me. Politicians love playing the original wedge issues of jealousy and pettiness and pit community members and neighbours against each other by making folks believe because someone has something, it means they are depriving you of it. So, the ever standard solution of we can tax that is thrown out there instead of anything meaningful with policy.
I can’t help but take issue with your premise here. We don’t know the circumstances leading to the tax being levied on the 0.6%. It may be the case that all or substantially all of them are absentee owners that keep their property vacant.
Folks are free to have their own priorities. I’m not losing any sleep over a vanishingly small cohort of absentee owners being assessed a tax where home ownership is inaccessible to so many.
It’s an expense, but that doesn’t mean you’re losing money. You have to look at operating expenses and rental value in toto as if the property were a rental investment.
.>.>> Is it inaccurate? Less than 1% of homeowners pay:
Yes, it is inaccurate when Leo says “ In 99.99% of cases this is a tax that is easily avoided” . Leo quoted 99.99% which implies 1/10,000 can’t avoid it. A truly tiny number, that would imply about 17 homes of the 170,000 homes in Victoria would have to pay it. In reality about 1,000 pay, so yes that 99.99% number is inaccurate and probably just made up.
Joe, you’ve stated correctly that less than 1% pay, the actual number is close to that (0.6%) which implies that 1/170 can’t avoid it. Which is 60X more people paying and more than the “one-off” of Leo’s friend.
So we force 1,000 homeowners in Victoria to pay a huge spec tax, many (like Leo’s friend) because they have complicated lives that have resulted in a home vacant for more than 6 months. I don’t believe this spec tax helps the housing crisis much if at all, and neither do most housing experts (including Leo). As you can see from his post, the reason he supports the tax is not that it helps the housing crisis much, but that he “ supports it because it’s one less thing for the NIMBYs to complain about.”
Is it inaccurate? Less than 1% of homeowners pay: https://www.biv.com/news/real-estate/bc-speculation-tax-revenue-tops-75m-mostly-from-non-bc-owners-9977596
Call it savings or gains/losses – still the same thing. Anyway, I’m sure glad own a house and assuming you’re a homeowner I expect you are too. For more important reasons than money gains/losses.
$600k loss on the April 2021 purchase at 285 King George Terr.
seen a few one-guy only developer(s)/builder(s) travelling from YYJ to Duncan, Nanaimo area to build and hold 4-flexes. Also seen south asian(panjabi-speaking) workers travelling from Nanaimo to town working on job sites – they charge less than locals workers do.
I asked around both material and labour in Parksville area- including timber and plumbing suppliers, their price and working attitude is sharper. We shoot the shit all day long talking about enjoying the sunset and sunshine on worksite for a few hrs and slow as fxxk… you try to get someone to work on a quote , they tell you wait up buddy, I will get back to you in a week or so. There are some fundamental issues here that lots of us are not willing to work. New immigrants(both low skill or skilled) are diligent and get work done here in YYJ.
Wow. Is that the same snarky and inaccurate advice that you gave to your buddy, who had to pay the tax?
Fact is, lots of people live complicated lives, and it’s not just the “one-off” experience of your friend. The spec tax rules are very complicated, and it’s actually quite easy for someone with complicated life circumstances (divorce, illnesses, moving for work etc.) to get caught up.
You dismissing 99.99% of them as ‘ “easily avoided”, except my friend’s case’ is just made up, supported by nothing
The mistake people make is not buying/not buying a home, it’s buying the wrong home. If you bought a home you like and can afford then you are indifferent whether the market goes up or down unless you need to sell and get out of the market altogether and that is not a common circumstance.
Plus the possibility of eviction and any non-monetary benefits you get from “owning” your home.
LOL welcome to PE.
Building equity in your home is part of your return, it’s like forced savings, but it also impacts your investment calculation. When measuring the return on a property, you typically include the mortgage principal you’ve paid down, since that increases your ownership (equity) in the asset.
This is similar to how accounting or investment standards treat loan repayments: the portion that reduces the debt (the principal) adds to your net asset position. So if you’re calculating return on investment (ROI), you’d include both the change in the property’s market value and the equity gained through principal payments.
If you leave out the principal paydown, you’re ignoring a real increase in your net worth. Otherwise, to get a complete picture, you’d have to compare it to what you’d spend on rent, since renting builds no equity at all and is a cost you would have incurred.
Leverage works both ways. In times of price declines, like the last 2-3 years, you are losing money two ways: interest costs and price depreciation.
Even during periods of stagnation, such as 2008-2015, you are losing 3-4% per year on interest costs. Building equity on the property is “your savings”, nothing to do with the investment calculations (gains/losses).
Protip: don’t leave your place empty if you don’t want to pay it. In 99.99% of cases this is a tax that is easily avoided.
My buddy just happened to hit an unfortunate combination of timing and circumstance and those one-off situations should be fixed. He’s doing exactly what we want which is moving tax residency to B.C. and will be paying tens of thousands in taxes. Also an exactly 0% chance this will lead to an extra home on the market.
It helps to drop the black and white thinking and the aggro attitude and consider what the goals of the tax are
As Vicre said, doubling in 10 years isn’t that unusual. Even the TSX is up 80% or so in that time-frame (185% for the US S&P, 120% for a more all-world fund like XAW). I can imagine some stagnation in real price for RE for a while. In nominal terms prices will very likely rise pretty good over 10 years. Combine it with the leverage Patrick mentions, and the average homeowner in Victoria will still make out quite well. I think what it all boils down to is, buy what you can afford that suits you if & when you have the means to buy, and be happy, you’ll do fine over time. Interspersed by periods of violent upswing in values from time to time.
.>… I still support it [spec tax] because it’s one less thing for the NIMBYs to complain about.
Oh right …. Less NIMBY complaints…..
It’s easy for you to support a huge tax for a trivial reason like that when someone other than you has to pay it. And Jan 1, 2026 (next year) the tax will be increased by an a outrageous 50% , so someone in your friend’s current position would need to pay an absurd $30,000 addiotional tax per year on a $1 million property. That will also be easy for you to still support, because it doesn’t seem that the amount of a tax means anything to you if you don’t have to pay it.
This “tax someone else” attitude is summed up as Not a -Tax- In-My-Back-Yard (NTIMBY), analogous to the NIMBY attitude.
It has been discussed previously that increasing supply does not necessarily lower prices. In fact, examples of increased density usually result in higher prices.
It seems like the Victoria and Vancouver market is still unaffordable given average wages because we have such a significant supply shortage. We need less red tape and more subsidies and incentives for developers to build more luxury condos. More Supply is the answer!! It’s not a demand problem at all and land hording investors which receive generous tax treatment and are subsidized by high taxes on employment income, only have a positive impact on home prices here.
I was always lukewarm about the tax and said it wouldn’t do much (it has added properties back to the market though so it’s not zero). I still support it because it’s one less thing for the NIMBYs to complain about.
This just happens to be a particular case where it makes zero sense to punish a Canadian citizen who grew up in this town for moving back and due to an artifact of timing has to pay $20k. There’s zero chance it will free up a property.
Easy solution here. If someone pays spec tax one year but pays income tax the following year let them write it off.
Property owned for over a decade, was not in a spec tax region. Region recently included in spec tax area. Before last year they lived in the property for 6 months out of the year. Then they moved there full time last year. Became tax residents this year so for 2024 they have to pay tax as foreign untaxed income earners.
For some people, the advantage of owning a home is the ability to borrow money at a low interest rate. Many retirees are still carrying a mortgage on a house that was long paid for but something always comes up when one needs a substantial amount of money. Try getting a loan without a home for collateral. The rates are astronomical (comparatively) and most people of age are flatly turned down. It’s a nest egg that non-owners do not have that they can access. I also think that banks view homeowners as more responsible.
>> That only really works on investment properties where you have a tenant paying the mortgage, and covering other expenses.
99.9% of homeowners in Victoria are paying their mortgage on time (CMHC data) . So that obviously isn’t a high hurdle.
Next up, how about explaining why you always support this tax, including the differential rates for “foreigners” (most of whom are “almost Canadians” with complicated lives) And you also support the increase of 50% (from 2% to 3% in 2026) that your friend might suffer next year.
As a supporter of this tax, you should be showing us your friend’s ~$20,000 tax bill, and explaining to us how him paying this is going to help the housing crisis.
For example, have you had the courage to tell your friend what you’ve told us, namely that you support the tax because it educates the public that there really aren’t that many vacant homes?
Does he live in the house more than 6 months of the year?
Update on my buddy that owns and lives in a house in a small town in BC but works for a US company
Here’s their spec tax bill
Patrick- That only really works on investment properties where you have a tenant paying the mortgage, and covering other expenses. Homeowners have to pay mortgage interest with after tax earnings and cannot write off property tax, insurance and repairs. You do get ahead after30 years, but by then you’re almost dead.
4.75% return for the last 15 years is a spectacular return for a house. It has doubled the price of the house.
Trying to minimize the reality that Victoria home prices have doubled every 15 years is absurd. People don’t buy houses with cash. They leverage 5X (sometimes more) , and you should multiply those returns by that leverage.
This is not a small point, it is a fundamental reality that explains why the AVERAGE net worth of Victoria homeowners is well above $1 million. This is obvious to most, but you tell us frequently on HHV how fortunate you were to have bought at the right time, so perhaps you haven’t realized that all long term Victoria homeowners have done well. Many better than you.
If someone buys a $1m home today, and that 4.75% long term return continues, in 15 years that home will be worth $2 million. Adding $1 million to their net worth, plus about $400k+ equity they’ve paid off. Meaning that their net worth increased by $1.4 million+, due to their simple (yet clever) decision to buy the home and pay the mortgage.
Its a fact that more people buy homes when prices are high as that’s when the most homes are sold, so it great to say homes have doubled over the last 10 years and trippled over the last 20 years which is great for a minority but more people bought in high priced years like 2005-2007 or 2016-2017 or 2021-2022 and their returns are far less.
The average home in Victoria has zero price appreciation between April 2008 and Jan 2016. The last 17 year rate of return is about 4% and for the last 15 years about 4.75% which is close the long term average for the past 34 years (as far back as i could go on Teranet) of about 5.30%, before fees and renovations.
And tripled over the last 20 years.
Yes, definitely not wild appreciation by any means looking at the last 10 years. Stagnation is great for those wanting to get in or upgrade or want to carefully select solid investment properties.
Most properties in the VREB area have doubled in price in the last 10 years. Next 10 years of stagnation in price is in store.
Pretty wild appreciation. I agree probably close to 100% appreciation. The renovations are mid to low tier and could not have been a huge outlay.
Unit 12 – 4701 Lochside Dr.
Original purchase 570k in nov 2014, looks like a fairly significant reno done probably atleast 100k if done prior to covid. So after accounting for the reno the return is close to 100%, not much different than other products if bought and held in that time frame.
Joe, it’s not on realtor.ca anymore and I took it out of my favourites in one home when it went pending. On Lochside drive. Complex around a small lake.
skinny townhouse with no yard in langford, no thanks….
“2770 Vantilburg Crescent #9 Langford, BC V9B 3K4
sold at 950k.
unreal asking and unreal offer(s)“
Why is it unreal, it looks like a really nice 2500 sq foot new townhouse with a double garage with nice scenery?
Watcher, keep those feel good stories coming.
Readdict , good stuff I’m glad she made out like a bandit . . I luv hearing of folks selling for top money . I guess if the economy sucked so bad we would have seen a interest cut.
Listing? That appreciation sounds unbelievable.
Some townhouses are fetching unbelievable prices. A co-worker who bought in 2015 just sold her 2 bedroom townhouse for 1.34 million. It was bought for like $575K. She’s moving out of province to Calgary, so a real windfall.
2770 Vantilburg Crescent #9 Langford, BC V9B 3K4
sold at 950k.
unreal asking and unreal offer(s)
Neighbourhood is all… The only thing you can’t change about a house is where it’s at…
Whatever you do just don’t mess up on the neighborhood trying to save a buck, there’s no coming back from that.
There will be price pressure on SFD during the dog days of summer as well, especially for listings that have languished from the spring. You might get a few wanting to hold out for the September sales window, but many are likely to go with the bird in hand instead of carrying into the fall. For the buyers, it’s good to remember the summer slows down, but there’s still more inventory competing for buyers’ dollars. So, it will be a good time for some low ball’n or at least some value buys in areas and for inventory that isn’t usually available to some folks.
Being that we are firmly in a balanced market the only deals to be had might in condos’s. Sfd will stick in and wouldn’t be surprised if they drift up a couple of points. They’re is zero return on bread and butter rentals right now and I can’t c that changing .
The late July early August summer lull this year should make for some nice bargains on better inventory.
Not for desirable products. Friend with a client is submitting a backup offer on a 20+ year old townhouse in the core which apparently had an accepted offer 1st day on the market (front running the open house) with a list price close to 200k above assessment.
Maybe a 50 point drop in the interest rate along with a 15% drop in prices might get the market going again?
Too bad I’m not the governor, I would have dropped it 50 points and get the housing market fired up
I can’t see how a 1/4% interest rate cut would make any difference in a $1 million plus real estate market like Victoria.
Pretty likely. Although, I might make the case that we can expect a long, boring real estate market until there is something resembling certainty on tariffs and the state of the economy, rate cuts or not. Still not even a budget from Carney and his team.
This is going to be a long boring summer….next meeting not until July 30th.
Rate hold
Real Estate it’s like no other product. Most people would disagree with this gentleman on his take on home buyers but there is truth to it.
https://youtube.com/shorts/4Xm4k_GRLk4?si=SvzcR7TqlArT3k5G
Someone phoned me the other day to list a very nice home in Oak Bay (coming soon) and they said met me at an open house and my first question was really? but it turns out it was six years ago! I just sit on my laptop at open houses answering emails and DocuSigning so I was a little surprised I left a positive impression on anyone from an open house. Many times earlier in my career when I did host more open houses I would hear people leaving whispering “we would never hire this agent, he isn’t working for the seller.” Personally, I prefer to be left in peace when shopping for something, but I guess some people want to be sold on something and that isn’t my thing. Just give me the facts and answer any questions I may have and I’ll make my own decision.
Last year I did two open house all year, so far this year I’ve done one open house and hoping to keep it that way. Sellers that think that open houses every weekend work (in terms of selling their property) and I are simply not a good fit. I much prefer to spend my time showing my buyers properties versus sitting at open houses.
Open house can actually be unproductive for the seller, I have too many real life examples to list I’ve accumulated over the years. For example, a few years ago I had buyers end up with an accepted offer on a home and I don’t know why but the listing agent continued to plow forward with three open houses (yes three, on a Friday, Saturday, Sunday). My buyers went at the end of the Friday open house after work and didn’t disclose they were the accepted offer people…agent hosting the open house says “you are the first people to come today” and it was at the end of the two hour window. They sent their friends on the Saturday and parents on the Sunday to scope out traffic – very slow. Ended up asking for a large concession post inspection and a bit of it had to do with the intel gathered from the open houses (no one coming through).
Reality is open houses are for real estate agents to pick up buyers, meet the snoopy neighbor who may list their home next year, etc.
Leo, I think the whole business day thing is a bit of over analysis. There were five fewer sales than last year and that is that, imo.
Do you have stats on this? (like how many listings are re-listing from within the last 1 month, 1 year, 5 years?) I would be curious.
100% agree, I think the decision tomorrow is the biggest one we’ve had in a number of years imo. Next meeting is not until July 30th and I think if the BoC holds it could be a slow summer with inventory hitting 4,000+ listings. However, if they do cut 0.25% it brings variable mortgages into the 3s which wouldn’t blow the lid of the market; however, would stabilize things a tad.
Interesting enough I am still seeing some beginner SFH transactions at above 2024 prices
The most important question about the state of this market is when will sellers start insisting on Marko hosting open houses?
Agents may work weekends and holidays but the staff at the real estate board don’t.
I believe It’s only a sale once conditions are removed and typically that’s done on a weekday?
Last month, Nanaimo had 114 condos for sale, with 3.7 months of inventory and a median sale price of $430,095. The average rent in the area is $1,761 per month, which, like downtown Victoria, results in a GRM of approximately 20.4.
This demonstrates how the Gross Rent Multiplier (GRM) adjusts for location, reflecting economic rents across different urban regions. Given this, cities like Vancouver, Victoria, Nanaimo, and the Fraser Valley should naturally maintain similar GRMs.
Ultimately, this highlights the strong connection between condo prices and achievable rental income, reinforcing the role of rental market dynamics in shaping property values.
Land titles don’t work weekends.
Do realtors work only on business days?
Hey good read ,both the real estate market and the economy in Victoria seem to be on a nice even keel. Downtown Victoria was slammed last nite , always nice to c folks pumping money into the local economy