Monday, February 4, 2008

What if...

Vancouver's bubble bursts before Victoria's? Inventory is piling up there faster. Sales are slowing down there quicker. I'm referring to Chipman's area and Mohican's.

If the bubble to end all bubbles finally implodes, will it's mushroom cloud drift East or West? Will it radiate out like ripples on a pond or create a tsunami that will make the threat of "climate change rising sea-levels" seem like a better alternative?

One thing's for certain, when it happens, the TC will go down pumping mediocre website statistics for developments with 153 months of condo inventory (based on the last 90 day sales rate) while Ozzie claims to have warned us all back in 2005.


snaptee said...

A nice welcome package upon arriving for work in downtown Victoria.

I walk around at lunch and see more crackheads than normal people. Go to social services before opening on welfare Wednesday and you'll see a lineup that snakes all the way out onto the street and around the block.

But I have to give them credit, at least they capped the needle.

Anonymous said...

I was walking in Fernwood near this new wave (I forget the name now)yesterday, and low and behold there was a syringe in front of the church on the sidewalk. Not far away, I could hear screams of incomprehensive drunken babble. This is city is just so full of these junkies and crackheads. I guess that's the price you pay for being a "world class city" with one international destination (and by turboprop, my goodness do all the rich hedge fund managers and gazillionaires that live here fly those things when they set out to visit their multi-million businesses in the US) from our "international" airport.

Anonymous said...

I meant to say this "new wave church"

Anonymous said...

Oh mine, I am waiting with great anticipation to hear about the new stats for Bare Martin's website. TC will faithfully report, cause' that's what we here in Vicky are interested in.. not the wars in the Middle East, not the hungers in Sudan, no, no the website hits at Bare Martin's web site.

Anonymous said...

If people are so unhappy here why not just leave? I don't get why people stay.

Something I never understood. Most people seem so unhappy in this city.

Anonymous said...

If you are so happy, why do read these unhappy posts? Why don't you just go for your happy walks, talks to your happy neighbours and read happy blogs. Last time I checked, we are still a free country. If people want to rant and rave, it is their freedom. You are free to be happy and are free not to read unhappy blogs. Happy enough?

Anonymous said...

"Something I never understood. Most people seem so unhappy in this city."

Since you are saying that the majority of people are unhappy in Victoria, that means you are in the minority. Which suggests, that perhaps you should move out to a "happy" city. So, why don't you move away if you are so unhappy about unhappy people?

Anonymous said...

"Something I never understood. Most people seem so unhappy in this city."

Since you are saying that the majority of people are unhappy in Victoria, that means you are in the minority. Which suggests, that perhaps you should move out to a "happy" city. So, why don't you move away if you are so unhappy about unhappy people?

BM said...


I think you need to revist the stats for Vancouver in January for Vancouver.

Average price increased, sales increased over last year, etc. Yes, listings increased and this is a good for bears but the other factors still held their own.

Mohican made a comment on Real Estate Talks forum and couldn't believe it and was puzzled.

IMO, we tend look at certain attributes to justify our position instead of looking at ALL attributes to find the answser.

S2 said...

Is the bubble popping in the Fraser Valley?

Today Vancouver Sun article:

"Fraser Valley has more housing inventory, board says"

BM said...


It looks like it could be on the verge. I would keep an eye on it for the next couple of months. 1 month is nothing to hang your hat on but it could be the start for the Fraser Valley. If it adds even more inventory this month and it does not do well in sales it would need an incredible spring to reverse the trend.

Anonymous said...

Anon: 8:52

Never said I was happy here dude!

xxx said...

I am pleasantly surprised by the jump in new listings to my PCS site. As far as I am concerned, this increase in inventory is going to start the wave of price reductions and slowing of sales.

I think the recent temper flare -ups that are appearing on this blog are a direct result of reader's fear over a drop in the market - most Victoria residents have all their money resting in their overpriced homes. I have to admit I lost it recently when someone told me how 'everyone wants to live here in Oak Bay' Ugh. Some people never learn

Billy TwoBaulz said...

This is somewhat OT, but there's a good article in the FT today on the subject of why asset price drops are a good thing:

You need to register (free) to read it. Here's a couple excerpts that hopefully give the gist:

Mostly, falling prices are good news. Better news if you are a buyer than if you are a seller. But if you are a seller in a competitive market, lower prices are usually a consequence of falling costs and the lower price expands the market. In computers and consumer electronics, prices have been falling year by year for decades while sales and profits of most producers have steadily increased. Good news all round....
Selling ourselves the same goods at higher prices leaves us neither better nor worse off so long as the goods themselves remain the same. For every house seller, there is a house buyer....
So what is true of houses is also true of other assets, such as stocks and shares. What changes is not their underlying value, but our perception of their value. Asset prices are a measure less of our wealth than of our propensity for self-congratulation. The net effect is only a transfer between the existing owners and the prospective owners....

It's worth reminding people that asset price drops, such as house price drops, are not the cataclysm they are made out to be in much of the lower-quality mass media.

phil said...

I'm not sure I completely agree with that take on asset values. As a renter waiting for a crash the drop in prices will be welcome to me. But I know many people who are buried in their homes and will be devasted by a price drop. How many will just try to walk away from their $300k condo when its only worth $180k? And god forbid they lose their jobs or interest rates climb - it will all be over. This is going to get UGLY.

vg said...

"This is going to get UGLY."

watch out Phil, with talk like that you may get labeled as a rebel rouser like myself. ;)

godsteeth said...

We moved up island about 10 years ago and recently have been following the Victoria RE market really more out of curiosity than any particular desire to move back. Victoria has been a bit of a mystery to me as it seems that Victorians actually take some perverse pride in paying more for just about anything you can name. This applies to cars (new and used), gas, food, "collectable" auctions, restaurants,entertainment and most certainly, real estate. Even Value Village and other second hand shops are way more expensive than north of the Malahat for the same grotty junk. I get a couple of RE hot lists and PCS and I am "shocked and awed" by the asking prices of most of the new listings showing up this spring. Are there really more than a very few gullible buyers that accept these prices as being realistic? My gut feel is a resounding NO, particularly in (but not limited to) the absolutely preposterous condominium market. With the probability of a continuing economic downturn(even if minor) and the homeless (polite word for bums) situation there, to even consider Victoria (or Langford for cripes sake!) real estate as an investment is goofy,unless you can figure out a way to go SHORT.

Anonymous said...

That's a novel concept. Shorting real estate.

Anonymous said...

According to the TC this morning, a new flight to San Francisco to start in June will help fan the flames of the hot Victoria real estate market. Bet you they had the same thing to say about the now defunct flight to Salt Lake City.

boomer said...

So the Century 21 agent quoted in the article thinks that those clever San Franciscans are going to ignore their own economy, the the sub prime banking crisis, a million or so (to date)mortgage defaults, and the high looney to buy in the super inflated Victoria real estate market.

Anonymous said...

Short real estate - good idea.

Anyone want to lend me their house to sell?

I'll buy it back for you in a couple of years or so : )

S2 said...

I'm smacking my hand on my forehead this morning.

I've always heard the term "renting is throwing money away but no one has actually said that to me until this morning.

After I stopped laughing I took out a pen to show them how my DH and I aren't throwing money away on renting.

I was too emotional about it so didn't give the best answer and of course they didn't want to hear it anyway. They want to keep believing it.

I so want this d*** thing to crash and burn big and soon. Arrrrgh.

talus said...

I so want this d*** thing to crash and burn big and soon. Arrrrgh.

Whenever I need a pick me up I go here...

It's American, but hey, so is 75% of our economy.

S2 said...

The House Prices thread on Kids in Victoria that was started in 2005 has been bumped up again.

If any of you resident real estate blog experts want to head over and wade in on your opinions it could be fun.

They are mostly a bunch of bulls who can get quite irate if any shakes their confidence in real estate prices in Victoria.

Here is the link:

S2 said...

Thank you talus. That link helped a lot.

Anonymous said...

The TC is constant RE pumper. Every story (however tragic or happy)it seems requires the obligatory interview/2 cents from a RE agent (who has clients in SF), a developer (who gets 70 hits per month from the US) or some other local business community hack. I can't wait to read the next story about some medical cancer drug, a tornado in the midwest, war in Iraq, Clinton and Obama...and the local RE agent/developer/other pumper being interviewed for these stories to provide their opinions how these events will ignite our red hot real estate market.

S2 said...

Thanks everyone.

It was fun reading the House Prices thread again.

It appears though that you all shocked them into silence. They are not usually that quiet when negative real estate things are posted unless maybe they can finally see the writing on the wall.

Anonymous said...

Most middle class still can't buy a house

E.J. Chrisroland said...

I've been following this blog for a while now and agree with what most have you have said, but decided that its time to buy a house. I've made an offer on a house in the Arbutus area of Saanich and will know by Sunday if I'm going to continue with the purchase since I am having a building inspection done. Nice thing is, I've already been offered $10,000 from another party to have me assign them my contract! The house has 2 suites in the basement (illegal, of course) but that means that my mortgage payment (thanks to a creative lender at my local credit union) will be less than what I'm paying in rent right now. My down payment is less than the price of a new truck and I will finally be the one collecting the rent instead of paying it. I think anyone who doesn't buy now is missing out on the market that is going to keep growing at least until 2010. Why not buy a home now, have tenants pay for it and grow your equity? I've already made $10,000 in real estate and don't even own the house yet!! Buy now before you can't afford to.

Anonymous said...


my mortgage payment (thanks to a creative lender at my local credit union) will be less than what I'm paying in rent right now

By "creative" I assume you mean low down payment and 40 year amortization.

I've already made $10,000 in real estate and don't even own the house yet!!

No, you haven't made $10,000 because you didn't accept the offer!

E.J. Chrisroland said...

Nope, 30 year term, 5 year amortization at 5.5% gives me monthly payments of $3241 per month. My downpayment is $50,000 and the 2 suites are renting for $1250 and $795. My current rent is $1300...that's $3345. Anyone who doesn't buy a home now in my opinion is missing out. As for not accepting the $10,000, you're right. I didn't 'make' that, however, my $625,000 home that I'm buying (pending inspection) has an apprasial of $647,000 for fair market value. See? It's all a numbers game. Anyone can buy a house these days, they just need to quit being so lazy and hoping someone is going to just give them a home.

DaMann said...

Have fun with that ridiculous payment if your renters jam on you on a moments notice ( but that NEVER happens so you will be fine). Also enjoy living with 2 other sets of people ( isn't that condo living?)

Enjoy your $400k house, cause that's all it's worth at best.
Give your heads a shake people, $650k for a house in a Victoria suburb. Unbelievable.

Someone the other day posted a nice property in the Beaches of Toronto. Duplex, cash flow positive with 20% down. Full size lot. $369k, yes $369k. That would be a GOOD neighbourhood within Toronto in a GOOD area, not a burb. People here have lost the plot. Put down the crack pipe and just THINK for a second.

And no, I'm not a bitter renter, I bought in the Vancouver area 3 years ago. I'm just awe struck by how stupid people are. I'm fairly certain my price will be below what I paid for it once this crash folds out, but guess what? I bought a place for....wait for it... a place to live! Not an investment. No one buys houses to live in anymore. Eveything is an investment.

The jig us up and the pain is around the corner.

s2 said...

See that would be my idea of hell. Being a landlord. Living with strangers. No thanks

I will wait for the coming correction and then buy a house foe just me and my family to live in.

I'm glad it is working for you ej but it is not for everyone.

Anonymous said...

What kind of an apartment rents for $1250 in a house? I live in James Bay in a 2 bedroom (1000 square feet) on a high floor with spectacular ocean views and pay $990. Only transients with bad credit (who are rejected at reputable buildings) will go for that, if at all. Then you're stuck with them not paying rent. It ould take a year to kick them and the meantime they'll have smoked up and run down the place.

olives said...

ej chrisroland, it's hard to tell if your post is serious or sarcastic. Either way, this one is dedicated to you: (sorry I just couldn't resist)

It's a new paradigm, and everybody who doesn't buy, now, will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 30% yearly price increase.

Renters, and anybody born in a future generation, will not be able to afford a $10,000,000 starter home in 15 years. They will live in tent cities, and Hondas.

This asset bubble is different than all of the others - it will never slow down, or pop. The gains are permanent

olives said...

If you are serious, I hope you are not "depending" on the income from illegal suites, because as soon as a neighbour complains the bylaw officers will be at your door . You may want to check with the Municipality prior to buying to confirm if they have already received complaints.

Billy TwoBaulz said...

my $625,000 home that I'm buying (pending inspection) has an apprasial of $647,000 for fair market value. See? It's all a numbers game.

Funny - I've read in the news about thousands of people in California who bought a house a year or two ago for, say, $650,000. It's now worth, say, $450,000, fair market value. See? It's all a numbers game.

Then again, that's happening in places like San Diego. Victoria is different - way crappier weather and job prospects.

Best of luck, honestly. Well, not honestly. I have a vested interest in the market crashing. But good luck all the same.

Aleks said...

"Nope, 30 year term, 5 year amortization at 5.5% gives me monthly payments of $3241 per month. My downpayment is $50,000 and the 2 suites are renting for $1250 and $795. My current rent is $1300...that's $3345."

So that gives you $4 a month to cover repairs, maintenance, property tax, insurance and the months when your suites are vacant. Cutting it a little fine, don't ya think?

Billy TwoBaulz said...

Having thought more about it, I assume e.j. chrisroland is joking. So, good one!

Billy TwoBaulz said...

This is the key to the joke:

I've been following this blog for a while now and agree with what most have you have said, but decided that its time to buy a house.

And don't believe any protestations from e.j. that it's not a joke either - it's just a very clever one!

S2 said...

Oh, ha, ha ej. Good one. You really had us going. Phew! :)

olives said...

well my post about the Hondas was serious - no one cares?

S2 said...

I care Olives. I care.

It is shocking what is going to happen to us. I just hope that my Honda isn't rusty. Or maybe I won't even be lucky enough to have a Honda and I'll be in the tent city.

If I'm in the Honda Olives I'll invite you to come in out of the rain and mud once in a while and share my bottle of cheap wine out of a paper bag.

talus said...

S2 was laughing after someone said they were "throwing money away on rent".

Check these folks out who are throwing money away on ownership...

"We're in so deep that it doesn't seem like anything will help," said Rebekah Ao, 33, a pregnant homemaker who lives in a new four-bedroom home in Avondale [Pheonix] with her husband, Otto, a truck driver. The Aos, with $50,000 in income, owe a total of $607,000 on mortgages for two houses they bought since they moved to the Phoenix area about two years ago.

The struggles of Rebekah and Otto Ao in dealing with a crushing mortgage debt show how deep the problems go.

They bought their first home in 2005, for $269,000. They paid for it using an Option ARM, which allowed them to make a monthly payment of $850, which was less than what they paid for rent in Los Angeles. Only later did they realize that meant that their loan amount would grow over time, not shrink, as would their payments.

"When we saw the payments were so low we decided to buy another house," Rebekah Ao said. "With the market going crazy, we figured we could sell the other house in a couple of years."

They now owe $287,000 on the first one and $320,000 on the new home, which they are renting. Their credit card balances, which they once kept at zero, have ballooned to more than $14,000 as they struggle to make ends meet.

"It hurts to know that you are on a road that leads to a dead end," Rebekah Ao said. The Aos are weighing their limited options. Foreclosure? A sale that takes in less than they owe? "But right now," she said, "we're just throwing our money away every month."

E.J. Chrisroland said...

After reading most of the replies, some of you are under the impression that I don't have a job and I'm replying totally on rental income to support the extra costs of home ownership, well, I do have a good paying union job, so money isn't an issue when it comes to extra costs. Living with big deal either, separate entrances and double drywall with resbar so there isn't any noise. It's close to UVic, renters are never going to be a problem. As for by-law enforcement, the only power they have is throwing a charge on title if you ignore an order to remove illegal suites. I've already had my lawyer check that avenue out. Comparing our market to California is like comparing the moon to Uranus. As for Damann and their comments, relax! Enjoy's too short to be as angry and bent out of shape as you's not good for your health.

hhv said...

Seems kind of like a crystal meth metaphor: look, I know when everyone else tries it they get addicted, but not me, I'm different, I'm smarter than that. I'm going to look after myself but what's life without a little risk?

Anonymous said...

Hey E.J., is this your place?

MLS # 6600113

StargazerXL said...

According to my mortgage calculator, ej needs an an annual income of $192,058 to meet a monthly payment of $3348. If he rents his 2 suites for $1250 and $795 a month, he grosses $24,540 a year from rent, so he'll need an annual income of "only" $167,518 to make his payments. (Income and property taxes notwithstanding.)

Gosh, I guess if he's making that kind of coin, he isn't lazy at all. My wife and I together don't make nearly that much, and we aren't lazy either. Hmm...maybe we should ask for 70% raises, so we can get a home and live with two sets of tenants for 30 years.

olives said...

E.J. - I'd like to know who your lawyer is so I can avoid that person in the future - seems he/she has given you very bad advice about bylaw enforcement.

Here is the real scoop:
If a legitimate complaint is received your tenants will be given 30 days to vacate. Alternately you can remove all cooking facilities, including stove, microwaves, etc., and have open access to your own kitchen. In that case you are allowed only two of these types of "boarders".

If your tenants choose not to become "boarders", and do not vacate within the 30 days (or some reasonable time agreed to with the officers), according to the zoning bylaw (for Saanich anyways), you can be fined $100 to $1,000 PER DAY.

These type of complaints from neighbours are not uncommon, and tenants are asked to vacate quite often.

I often wonder when I see houses for sale with empty suites if it was because the tenants got forced out and the owner simply couldn't afford the payments anymore and had to sell....

Anyways, if it is extra income and you think you can get away with it (and suck up to all your neighbours), then good for you, BUT, if you are depending on this rental income to pay your mortgage, it is a very very bad idea.

Don't let anyone tell you anything differently - I got this info from the horse's mouth.

olives said...

I need to know, is Victoria the moon or Uranus?

Anonymous said...

How about the coffee shop conversation for the other side?

"I just sold that old 70's box that I bought 3 1/2 years ago for $390,000 to some fool who paid over list. Glad I'm out of this market, nothing was selling in my neighbourhood for weeks. And I'm glad to be rid of the hassle of tenants"

Siobhan said...

So, your putting $50,000 down on a $625,000 home and the credit union is using 100 percent of the illegal rents in the calculation of your income.

Come on, tell me again, that there ain't no sub prime lending in Canada!!

Siobhan said...

And wait untill you get your house insurance and utility bills for running this mini-hotel.

"House rich and income poor"

Except with only $50,000 down your not house rich.

Saanich Bylaw Officer said...

I don't like the sounds of this. Illegal activity going on in an upscale town. No way. Plus, having boarders and the riff-raff rusty vehicles they bring into our neighbourhood brings our property values down. You want boarders, go to Esquimalt. This shall be promptly investigated.

Anonymous said...

We are neighbours with the US (not planets, duh!!). If your neighbour's house price goes down, so will yours.

Aleks said...

Hey, at least those people in Phoenix get to have two houses for their $600,000 in debt. Around here they'd only get one. They're ideally positioned for when their money problems ruin their marriage.

DT said...

Time to look at condo sales again. This time just for Victoria City.

#of listings of non-new condos in the last 90 days - 185
#of the above that sold in the last
90 days - 71
For a sales to listings ratio of 0.38

Current # of listings of non-new condos - 143
# of non- new condo sales for the last three months - 118
For a 3.6 month supply

Now for the NEW Condos

# of listings of new condos last 90 days - 158
# of the above that have sold last 90 days - 10
for a sales to listings ratio of 0.06

Current # of new condos for sale 189

# of new condos that have sold in the last three months - 32

For a 17.7 month supply

Generally, a sales to listings ratio between 0.4 to 0.6 and a monthly supply of three to six months indicates a balanced market between buyer and seller.

A sales to listing ratio of less than 0.4 and a monthly supply in excess of 6 months indicates a "buyers" market with stagnate or declining prices.

A sales to listings ratio greater than 0.6 and less than three months supply indicates a "sellers" market with rising prices.

So - what do you think is going to happen to the new condo market?


BM said...


Subprime lending is not loose lending principles per say.

It is based on lending money to people who have very poor credit and have be known not to pay back debt.

This is different then lending to someone that can pay back debt and interest (which you collect more of over a longer period of time). Hence our 40 year mortgage will not cause a "sub-prime" issue.

Our banks use loose lending principles but still make sure people have decent credit and track record. The way one gets around this is usually through mortgage brokers as they tend to fudge paperwork and numbers. However, only 30-35% of mortgages in canada are done through brokers compared to 70%+ in the U.S.

Not saying that this will help our market or cause it to crash. Only time will tell. Either way, the sub-prime mess is a different ball game then longer amortization.

Siobhan said...

The sub-prime market problem only appeared AFTER real estate prices stagnated or began to decline.

While prices were going up, there was no problems. Someone who was over extended could always refinance through an equity lender.
Much like people in Victoria can and are doing today. Take a peek through the yellow pages to see how many brokers there are in Victoria. I'd like to see a TC reporter ask a broker what percentage of mortgages he/she has NOT been able to get financing on. Interest only mortgages and teaser rates are here in Victoria too. When it comes to lending there is very little difference between US and the U.S.

DT said...

Let us look at price appreciation in Victoria Condos for both new and (non new)

Re-sale median for an 800 to 1000 sft condominium in 2006 - $239,950

For the above but for 2007 -$269,960

For a price appreciation of 12.5%

Now for NEW 800 to 1000 sft condos

2006 median of $390,000
2007 median of $408,500

For a price appreciation of 4.7%

So which of the above would you rather buy in order to get on the "property ladder" to build equity to buy a single family home?

vg said...

"According to the TC this morning, a new flight to San Francisco to start in June will help fan the flames of the hot Victoria real estate market."

You mean the flames haven't been fanned enough in this bubble about to pop ? ...or is the agent saying the market is going into a dive and needs something like this turn on the heat cause they all smell a big nasty correction ?

vg said...

I hope you really like people ej,one tenant would be bad enough but two ? talk about headache central,unless you like the frat house lifestyle,lol.

E.J. Chrisroland said...

The banks don't care what you're buying or how you're paying for it...all they want is the paperwork infront of them so they can cover their a$$. It's all a big game...tell them what they want to hear and they will lend you the money...easily. No, I don't make $192,000 a year, I am making close to $62,000 a year and yes, I still am able to buy a house. Keep your fingers crossed the building inspection passes for me!

E.J. Chrisroland said...

The banks don't care what you're buying or how you're paying for it...all they want is the paperwork infront of them so they can cover their a$$. It's all a big game...tell them what they want to hear and they will lend you the money...easily. No, I don't make $192,000 a year, I am making close to $62,000 a year and yes, I still am able to buy a house. Keep your fingers crossed the building inspection passes for me!

Bob Bloomfield said...

i disagree with e.j. about the municipality thing in terms of future problems. yes, they put a charge on title and can't make you take the suite out even if council orders it out, they don't have the power. but, a charge on title means that you or the new owner have to do something before it sells. as for the market, i bought my house in fairfield a year and a half ago for $550,000 and its a legal non-conforming duplex. its now had an apprasial for $710,000 and i am looking at purchasing a rental holding property. the easiest way to get in to the market is to buy rental properties like i did, submit false tenancy agreements to the bank and keep borrowing money to buy more real estate. you'll never get caught unless you miss a mortgage payment and i've been doing this for 7 years now without a problem. the banks will lend you money if you can prove to them you can make the payments. use your tenant income to allow you to buy more places. if i didn't get in when i did, i would have missed out on a ton of opportunities. now i can work part time on rental properties and part time at my regular job. yes, the tenants pay my way in life, but that's always been the way it is. the rich get richer because of the poor. it sounds bad saying that, but the poor are able to get housing if they are willing to work for it. if the tenants move out, there will always be someone willing to take their places in victoria. this is a home owners paradise if you want tenants. the real estate prices aren't going to be going down any time soon, nor are the rents. buy now before its too late. think of all the money you're missing out on.

Bob said...

oh, and one more thing, i was foolish to move to sell my house in duncan when i moved to victoria. you should see the prices up there! don't sell your houses. rent them out and let the tenants pay for them. real estate will continue going up purely based on the property transfer tax and real estate commissions. its a given that values will keep climbing. check out duncan or nanaimo if youre having a hard time with victoria. good luck to all of you!

olives said...

Bob, rents may come down when all those new condos that aren't selling (see DT post) enter the rental market. It sounds like you're going to have a lot more competition for tenants in the near future.

greg said...

hope you are not "depending" on the income from illegal suites, because as soon as a neighbour complains the bylaw officers will be at your door.

Do I need to remind anyone of what happens when the suites are discovered, legalized, and revenue canada arrives to collect the taxes on all those months or years that were pocketed at 100% rate without coughing up the correct percentage to the taxman, when they were not included in your personal income?

Good luck with that.

BM said...


It is a catch 22. Yes you have to declare income but you will also get many write off. interest, property tax, depreciation, repairs, etc. It would be pro rated because it is only half the home.

Difference is that if he is willing to deal with the tenants then it could be good for him. He get's a home, pays less in rent, and has someone pay for his place. If prices plateau or increase he is ahead. If prices drop and he has good tenants he can weather out the storm.

I wish him the best.

Siobhan said...

Seriously, a credit union is going to process your mortgage with only $50,000 down and at nine times your gross income!!!

Holly, smolly, what are you going to be eating for the next 30 years - spam and jelly sandwichs!

That's irresponsible lending and lack of due diligence by the credit union. Sure they will lay off the risk to CMHC. But, if the loan goes sideways, I'll bet the CMHC auditors will cancel the insurance. If you get into trouble and behind in the payments you could always sue the credit union with the following defense.

"Your Honour, I would never have bought the home, if the Credit Union had said that I could not afford it. So, I am just a victim of the banking system and should not have to pay them one dime for their negligence"

One more time, say it again to me-
"There is NO sub prime in Canada"

talus said...

"the real estate prices aren't going to be going down any time soon, nor are the rents."

Wow - is there money riding on that statement?

bob macaffey said...

The bulls are doing their last round before the slaughter. So brazen and brave they are now.. I'd love to hear from bloomfield when his $710,000 appraised investment is work $150K? It will happen. Victoria with its rainy/windy winters is no longer the Canadian boomers' retirement destination (only octogenerians who will live in nursing homes will come here). They are already buying $150K SFHs with inground pools in (guaranteed)winter sunny Phoenix, Florida, etc. We are in an era of globalization. In Europe, there are no restriction on labour movement and property ownership for citizens of the EU countries. There are for example over 1 million Poles in the UK, 150,000 French in London, etc. The Internet generation Canadian boomers will not settle for the rainy or grey of Victoria like their grandparents might have done. Why waste precious winter days inside (away from the rain or glof course) when you can enjoy your gloden days in the sun. I can see prices in Victoria within the next 5 to 8 years being even lower than Phoenix (where again you can buy a SFH with pool for less than $150K) as from vacation/retirement perspective it is a far more attractive place to be. On top of that I know that there are no state taxes in Florida, and probably none or a very low rate in Phoenix.

vg said...

the easiest way to get in to the market is to buy rental properties like i did, submit false tenancy agreements to the bank and keep borrowing money to buy more real estate. you'll never get caught unless you miss a mortgage payment and i've been doing this for 7 years now without a problem. "

I think you happened to buy at the right time but is burning the candle at both ends. You sound like one of those poor saps who has a fleet of houses in foreclosure in Phoenix who thought the same thing til the party ended. What happens when the crash hits and the rents go down and you can't cover ? hmmmm

Anonymous said...

"What happens when the crash hits and the rents go down and you can't cover ? hmmmm"

those 7 years turns into many midnight shifts at the 711.

Anonymous said...

DEVELOPERS BEWARE .. You could be sued for the outrageous prices

vg said...

"These type of complaints from neighbours are not uncommon, and tenants are asked to vacate quite often."

Won't happen with UVIC students,they all behave themselves and never party hearty. ;) ....not to mention the video games surround sound goin at 2 in the morning that double drywall doesnt stop,a lovely sound indeed. We had a few across the hall for about a few months,what a long few months that was as they tried to get rid of them.

millertime said...

I'm a real estate developer in Victoria, BC and I think it is unfortunate that people are being squeezed out of the market, but at the same time, some cities are not affordable housing cities. I take old run down character rental houses and turn them in to high end strata units. The units I'm selling are small, but it gives people a foot in the door. When it costs $650k+ for just the land and building, it seems reasonable to create 3 or 4 $450k units for people to buy. Yes, some may say I am pushing the price of real estate up, but I can't build places fast enough. I've also started taking non-refundable deposits now of 10% with guarantees from their financial institutions that they've been approved for financing - so I'm safe even if the market crashes. The dreamers here who think things are going so slow down are kidding themselves.

s2 said...


You wouldn't happen to be the developer of the property on the corner of Bay and Quadra would you?

millertime said...

Oh geeze, no. Thats Earl Large. He needs to get back to being a teacher! I said high end, not dead-end.

bon macaffey said...


blah, blah, blah, blah.. wait until your clients come after you and sue you for price gouging. And what foolish sap would want to live in a woodframe triplex. Better to live in a rental concrete building than a woodframe house. Of course, your buyers will rent their apartments out to kids who play loud music and lone owner who actually lives in the triplex is out to fend for himself from the punks (good luck, the owners don't care, they just want to collect the rent). To VG's point, this sounds like a frathouse. You are all living in a bubble. The baby boomers are going where it's warm (and cheap) like Phoenix. Prices here are going to fall even below Phoenix's. The stuff you are talking about, $650K will be worth $100-150K in 5 years' time as Victoria with its soggy winters is not as desireable as Phoenix and other places South. Why if you are busy and rich, why even bother pumping this BS on this blog? Don't you have go around and look at depressed properties?

greg said...

bm said this about revenue canada discovering unreported rental income:

Yes you have to declare income but you will also get many write off. interest, property tax, depreciation, repairs, etc.

That's crazy man, this guy is talking about not reporting around $24,000 of income per year. He doesn't get to retroactively claim all those deductions when at the time he represented the building as his personal residence. Even if he does, that could be around $10,000 per year of taxes if his income is $60,000 a year.

And have you never heard of penalties for the false income tax returns. They could significantly increase the cost of this venture.

And even if he manages to defray some of the costs of back taxes once caught, he still has to pay some of the taxes, put the suites on the books going forward, and then how does he have the income to meet his payments?

What a joke!

Anonymous said...

On top of all these issues, you'll have to pay capital gains tax (if there is any, which is unlikely given the RE market here will tank).

stritlady said...

dont be so gridy, give to the strit peoples, give to the no homes peoples, give to the paur. They are hungy and people too. what do you share your $$$. where do u live? how much monie u make? how do u pays?

millertime said...

Oh Bon-Bon, you're not as sweet sounding as your name, are you? lol Sounds like someone is a little grumpy pants this evening! Who wants to live in a wood framed triplex? Try the last 5 people I sold my last 2 to. One more for sale pending financing for the buyer. If you are so infected with mould spores from your rental apartment and think the prices here are going to fall to $150,000 then maybe you should move to Phoenix and go see a medical specialist because it sounds like you're suffering from abnormal fantasies and are not in reality. You've got the American 'suing' thing down pretty good, you'll fit in there with the rest of America! Have a good night and don't be mad that you will never be able to even come up with enough money to even hire me for a half hour consultation let alone a downpayment for a place to rest your angry head.

stritlady said...

i live next to church menzie & michigan

vg said...

If the bond insurers get downgraded then you can kiss goodbye anyone being remotely interested in buying an overpriced box in this town when the stock markets tank bigtime. These are scary times in the worlds financial system effecting credit lending on a massive scale. What I am reading here are some real scary stories here with a "have no fear,it will never end " attitude,a perfect recipe to have your ass handed to you on a silver plate.

bon macaffey said...

Sounds like you need some specialist help with your anger management. Sounds like you're shitting in your pants when you spew with anger and bitterness. Why, sales are not going well? Been sitting empty for 5 months? You sound like frustrated high school bully type drop-out. Bet you drive one of those hillbilly diesel pick-up trucks. Not a very professional image (and suggesting someone would hire you for 1/2, in your mould infested fantasies). You are suffering from abnormal fantansies about the RE market going up forever. Prices will plummet here, and steeply and soon. Why are so poor and in debt that you can't afford cable tv and learn what is going economically in this world? Go get a life back in Fort McMurray or whatever mouldy, greedy hole you've come from.

millertime said...

Hey Bon, do you know that your name spelled backwards is Nob?? lol Have a good night in your single bed apartment in Esquimalt! Nothing wrong with greed if it get me what I want out of life. Too bad you can't even begin to dream about a better life for you and your cat since you're so wrapped up in other peoples business. And you're right, I don't have cable. I have satellite. By the way, I don't need you wishing me good luck......luck is for losers. Good luck to you though! Night night.

phil said...

Millertime, since you are in the business I'm just wondering if you can explain something very basic.

If real estate has gone up and down in value for the last hundred years or so, what makes you think this time will be different?

If prices can fall dramatically in Florida, Arizona and California, why can it not happen here? Just wondering.

Anonymous said...

I remember in 1997 or 1998, my stock broker was telling me that at $25/shr, Nortel will never will that affordable, and that I should buy. I did buy at $25/shr as I got caught up in the run-up the .com bubble just as everyone else. A couple of years later, that stock came down to 50 cents/share. Not the best analogy with real estate, but the lesson learned is that there is market top for any market. And then a crash to realistic levels, sometimes as with the stock market even below realistic levels as panic sets in.

Anonymous said...

WOW what a beatiful home..

Of course we don't have direct flights to Phoenix. Bummer. But wait, we'll have a direct flight to SFO come June, which will fan the flames of our RE market. And the Winter Olympics. Yes, like in Sarajevo. Our beautiful ski slopes at Bare Mountain. And, the best weather in the world, that is in terms best rain, wind and cloudy days in the world. What a wonderful one international destination (to Seattle) world class city we live in.

Wobbly said...

Im curious why everyone chooses the absolute worst housing markets in the U.S. to use as examples as to what will supposedly happen in Victoria?
A $650k house in Fairfield dropping to $150k? I don't think so.
I seem to remember reading last week that Seattle's housing market is doing just fine.....why not use Seattle as a comparison?


millertime said...

Hi Phil

I never said that I think that this market is different than others (or even historically as stats show). All I was saying is that I am preventing a financial disaster for myself by preselling to people who already have financing approved. The only subject-to remaining is the formation of a strata which is something that gets approval upon reaching occupancy.

millertime said...


I agree with you. It seems that there is a small margin of people here who would like to compare our real estate situation to the same one in Phoenix or in Iraq. I think that since Victoria and other major cities along the coast of Canada and the USA are unique in terms of quality of life, cost of living and desirability there will always a demand for housing here at whatever cost homeowners and developers set. Why sell for less than the market is willing to pay? If people want to still find deals, I suggest moving out somewhere between Langford and Sooke. The sewer line is going out that way, and any house or property that doesn't have sewer is worth a lot less than one that does. Buy a couple of rentals out there, wait for the sewer line to be installed, knock them down and then rezone the property to higher density. I guess living in Langford wouldn't be that bad after all.

olives said...

I thought prices in Seattle are dropping too - although the correction there began much later than some of those other places??? in fact I thought I read lately that there is nowhere in the U.S. that prices are still increasing.

I agree with VG, Millertime it would really benefit you to read some financial news - there are dark economic clouds quickly approaching us.

Mr.4AM said...

Wobbly said: "I seem to remember reading last week that Seattle's housing market is doing just fine.....why not use Seattle as a comparison?"

Interesting. I guess this means Seattle must have their own version of the Times Colonist. However, if you want factual information, you might want to read a popular Seattle housing blog that actual quotes FACTS, not Real Estate agent manipulated hearsay.

Anonymous said...

No it's true - economic news out of the States last week did say that Seattle had a healthy growing economy(the fastest growing economy in the States in fact)
And, I really do have to agree with some of the new voices here on this thread.
I do think that we have more in common with places like Seattle than we do with Arizona, Nevada and California.
We really should be comparing apples to apples if we want to see the future more clearly :-)

Mr.4AM said...

Millertime said:"I think that since Victoria and other major cities along the coast of Canada and the USA are unique in terms of quality of life, cost of living and desirability there will always a demand for housing here at whatever cost homeowners and developers set."

Oh you mean like Florida (74,000 foreclosures), and sunny California?

How about taking 2 minutes to google some factual info before posting?

real_estate_guy said...

If you want the real deal on real estate, someone with all the fact and truths, contact this guy.

millertime said...

Hey Mrs.4am guy-

I suggest going back to grade 3 and reviewing your geography lessons. Last time I checked, Florida and California weren't 'cities along the coast'. Try making your futile arguement by using comparible cities in the same area code, or better yet, within the same country! Look at Vancouver and Kelowna, BOOMING! Just like Victoria. You won't see prices spiking up again like they did just after I bought my 3 development properties because we were overdue for a correction. Now what you're going to see is the prices continue to creep up due to development, transfer tax and real estate fees as well as the general demand for a beautiful house in a nice city. Now, if only we could do something about the wasps, mosquitos and street people.....

Mr.4AM said...

Ok so one seattle bear blogger says that prices will go down, but what about Fortune magazine saying Seattle will go down 19% in the next few years? As reported by King5 News. Hey HHV, maybe you'll be on Chek news in a few months ;-)

What goes up must come down people.

Just in case you're too lazy to google all the Seattle Real Estate statistic graphs, inventory up, sales down... guess what's next? POP! and that's Jan 2008 data. Wake up people, it's coming here too.

Mr.4AM said...

millertime: You must be American to not know that Florida and California are along the oceanic coasts. I think my grade 3 geography is holding up just fine.

beagle said...

US Housing Decline Charts
Hmm..Seattle doesn't look so good, quite the ski slope on the end of that chart.

olives said...

um, I'd say from those charts and statistics that the trend is decidedly DOWN in Seattle.

millertime said...

Mrs. 4am Guy

And you must be sitting in the Eric Martin Institute if you think that a 'state' is the same as a 'major city. Read my post again and you'll see that you're a little confused and going on a rant that's just raising your own blood pressure.

BM said...

Last time I looked at the Gas Lamp district in Downtown San Diego, as well as Carlsbad, Rancho Santa Fe, Huntington Beach, etc prices have not tanked.

Let's start comparing the best places in these states to our best places.

We we compare Seattle (choose the top places in seattle, not overall) Some places in all these areas will have an overall effect on the state. If a couple of the dumps drop 30% and yet the core remains strong it is still going to dip but not as much as the dumpy areas.

Just like the the island, if the market crashes you are going to see bigger declines in Duncan, Cowichan, etc due to the fact they are less desirable in Victoria.

Mr.4AM said...

miller, now you want me to name cities in each state? Repeat after me, 'google is my friend'. Next you'll want me to spoon feed you.

The point is, coastal cities are affected and so will we. And btw, I wasn't the one who started comparing Coastal cities, states or Seattle, but since some of you are so conviced (thanks to your realtors?), I just posted actual real data that proves otherwise.

We could sit here all day trading childish comments, but I'd rather see you bulls post some statistical *factual* graphs that go along with your views.

beagle said...

bm said

"Last time I looked at the Gas Lamp district in Downtown San Diego, as well as Carlsbad, Rancho Santa Fe, Huntington Beach, etc prices have not tanked.

Let's start comparing the best places in these states to our best places. "


BM, You may want to look again at those places, there is some serious correcting going on.

DaMann said...


Yes let's compare Seattle. One of the last US hold outs. It's now year over year negative price growth. Thanks for bringing up Seattle.

And BEFORE the prices started dropping in Seattle their RE was half the price as Vancouver and probably 40% cheaper than Victoria. They have Microsoft and Boeing to name but a few employers. What does Victoria have? The goverment...

People really need to really get their heads out of their A$$es.

DaMann said...


Nice post

Gas Lamp

November 07 - January 08 down 48%!!

That's not price correction, that's an all out crash. Ouch.

DaMann said...

Sorry that sould read August 07- Jan 08 DOWN 48%. I had to go back and re read it cause I couldn't believe it myself.

beagle said...

Well the Gas Lamp stats are based on very few sales but it shows expensive areas aren't immune in fact some times they fall harder. A lot of California's ritzy areas are negative yoy.

BM said...


Thanks for the post but can you show me where the sales are reported? I only saw the listing prices that have gone down in the report.

I am not a bull just like info. Would like to see the sales of comparable properties year over year.

BM said...

Sorry, found the info.

BM said...

Here's the spin on your numbers for Gaslamp.

To find out the size of the homes you have to look at cost per sq.ft. If you then look at the same timeframes for the year before i.e, winter vs winter it is actually up YOY based on sq.ft. It is down compared to summer/earl fall.

However, I think that we need more sales to do a better comparison.

I agree that nothing is immune but I do believe that every property and every location does not increase or decrease at the same percentage. There are people who will pay more/less for different areas. More desired the better your chance to weather the storm

Wobbly said...

Housing starts begin the year with a bang

Globe and Mail Update
Friday, February 08, 2008

Housing starts in Canada jumped in January, yet another sign that the Canadian market continues strong while the U.S. market melts down.

Housing starts rose to 222,700 on a seasonally adjusted and annual basis, Canada Mortgage and Housing Corp. said Friday, up from 184,700 in December and more than economists had forecast.

Anonymous said...

wobbly - this backs up our observations - as active buyers in the Victoria market.
We are looking for the perfect home and basically we don't really care what it costs. If it is exactly what we want then we will pay it - even if it is a bit over priced - it doesn't really matter when you are buying in the big numbers.
We have just arrived from London England and we think your prices here are bloody cheap for such a brilliant location. Most people we know don't analyze the numbers the way that Canadians on this blog seem to.
We made a lot of money on our property in London and we are happy to spend a small portion of it on a Fairfield home by the sea.
Very interesting thread - tho you all seem a bit angry :-)

phil said...

Millertime said: "The dreamers here who think things are going so slow down are kidding themselves."

If you're so sure then why admit that you're also financially protecting yourself in case of a crash?

olives said...

This kind of story will have a psychological impact up here:

olives said...

Anon said: "Very interesting thread - tho you all seem a bit angry :-)"

I don't think it's so much anger - but rather fear sinking in at the thought of dropping values for some homeowenrs who may be overextended.

olives said...

Millertime said: "The dreamers here who think things are going so slow down are kidding themselves."

Okay,I think the bears have given their explanations as to why they believe the market will correct in the future, including real estate cycles, business cycles, history, economic fundamentals, the global economic situation, debt,unaffordability etc., etc.

I would be interested in hearing support of the argument that prices can continue to rise forever without correction, particularly in view of an anticipated recession/depression.

DaMann said...

London Calling...

Looks like you got out at a good time! UK falling now as well. And for the record ANYTHING is cheap compared to London.
What can you rent a one bedroom appartment for in London? $3k-$4k a month? At those rents the high prices are justified. If rents were triple what they are now I would have no issue with the high prices and not be worrying about a bursting bubble.

Vancouver downtown condos are now alomst the same price per square foot as Manhatten, yes Manhatten. At least there you can rent out your "investment" at $4k a month. Same condo in Van rents for $1400. As well people there make a hell of a lot more money than people do here.

VicREBear said...

"We made a lot of money on our property in London and we are happy to spend a small portion of it on a Fairfield home by the sea."

A jolly good position to be in, if you're in it. Good on you. Prove to me that there are enough cashed-out Londoners and their ilk
coming here to keep these prices aloft, and I'll call a realtor today and buy a million dollar house tomorrow, even if I have to eat dog food to afford it.

phil said...

Well, well, it looks like the coastal cities (including Seattle) argument above is now officialy dead:

boomer said...

wobbly + english "anonymous"- (complete with english-isms--"bloody" "brilliant")
well, old chap(s)--housing starts up means more supply----
So apparently supply and demand laws have been suspended in your fairy tale world of real-tor estate and Victoria is approaching "world class" status like London ---but with bargains galore.--but regardless "analyzing the numbers" is just so---colonial.

Tony Danza said...

"What kind of an apartment rents for $1250 in a house?"

I pay this much for a three bedroom house 2 minutes walk from UVIC campus, and I only started renting 8 months ago. Good luck finding steady tenants for your place, our landlord told me we're the third family to rent the place in 24 months, talk about stable income.

FWIW I also rent a place in point grey (I'm a weekly commuter as Vic has zero decent job prospects for the highly educated unless you want to work for the gubmint) for $1200 a month, granted it's only a two bedroom main floor with a tenant below. So I basically rent 2.5 million worth of house for $2450 a month. Investment indeed.

Billy TwoBaulz said...


Just for the record, I've also just moved back to Canada after 4 years in the UK, and I don't have at all the same take on the picture here as anonymous-Londoner has. We lived in a town in Berkshire in the southeast that had the 7th highest incomes in the UK. Our house there was small, but built in 1989 and reasonably solid. It had a large lot by English standards. We sold it for about £170k which is about $340k, give or take.

You can see by this one simple example that a small house in the heart of one of the most desirable villages in the UK (the Times or someone similar recently pegged it as the best place to live in Britain, based on incomes, schools, etc) is actually far cheaper than a comparable house in Victoria. This town was a 40 minute train ride from London and a 30-minute drive from Heathrow.

And in addition to all that, prices in that town, as well as elsewhere in the UK including London, are now on the down (

So I don't buy this anonymous Londoner's claim that house prices seem cheap here. I also frankly can't imagine most Londoners thinking it was too great here, given the lack of city amenities and culture (even though I moved back here because I like the wilderness and I grew up on the island, I can now see what people mean when they say they couldn't leave Europe for the boonies of BC). But to be fair, maybe they're country folks at heart. Either way, I can tell you that my colleagues back in the UK were appalled when I told them what house prices in Victoria and Vancouver were in pounds.

E.J. Chrisroland said...

Well, I decided to assign the contract for the house in Arbutus. After talking to a friend of mine, he and I felt that $10,000 for doing nothing except writing an offer on a place is a lot of money to pass up. So, I am now sitting with a bank draft for $10,000. The only cost to me was $325 for the home inspector who I had to cancel. With the way things are going in this market, it's amazing that someone can make money just by selling paperwork on a home they've tied up. Only crappy thing is I have to keep looking for a place now. Oh well, at least I have an extra $10,000 to put towards a downpayment! I'll keep you posted.

Tony Danza said...

"He get's a home, pays less in rent, and has someone pay for his place."

Hm, I get a home, pay one third in rent than I would to buy (rent from the bank?), the landlord picks up the other 2/3 of the cost, oh and he pays for the maintenance! But what do I know I'm just another poor, dumb and dirty renter :)

Tony Danza said...

Anyone else here get the feeling that millertime and bob macaffey are a couple of sock puppets arguing with themselves? I also get the feeling that these "new" posters are all the same person, too many consistencies within their posts.

vg said...

ej, you mean after reading this blog you decided to give your head a shake and take the $10 G's... LOL.

I think you should buy us all a beer at the Bengal Lounge for saving you years of major pain. ;)

vg said...

As others have said, with the influx of bulls here the bubble must be about to go pop, the bulls have too much time on their hands I guess fretting about the spring onslaught of listings.

Vancouver listing/sales ratio looking kinda weak lately eh ? lots of 40% 'ers.

greg said...

I can confirm what Billy just wrote. My in-laws are English and I spent 3 1/2 weeks in Yorkshire last year, in a desireable, highly touristed area just outside the Lake District. Watching all the "move to the country programs" on BBC and ITV, reading all the real estate news in the papers and looking at properties in estate agent windows, the prices in Victoria are markedly higher than the prices anywhere but the most desireable neighbourhoods in metro London/Cotswolds/Surrey areas.

Anyone who posts on here anonymously suggesting otherwise has never been to England.

By the way, England is the size of Vancouver Island and has a population of 60 million people, so price pressures there are much more influenced by numbers than anything seen here. And prices have been falling in the UK since last fall, anyway.

Anonymous said...

I was watching Bloomberg TV this morning (over the internet - it's free), and they were discussing the US economy in general with several analysts. Analysts were commenting on that *fact* that Banks have thus far come out with $140 billion in write downs, but the analysts explained that total estimates are upwards of $400 billion, so expect more bank write downs coming in the next few months which puts further pressure on derivative/bond insurers already on the brink of bankrupcy.

Beyond that, the focus of the dialogues was actually bond insurers and whether they will get bailed out by government (aka. tax payers / consumers) because if they go down the tubes, that's a minimum of 400 billion to 1 TRILLION in further financial sector losses (a few US banks would actually collapse).

One analyst also commented that of the ~400 Trillion in world wide derivatives out there, current street estimates are that aproximately 20 Trillion of that are directly tied to US Real Estate futures being up, but unfortunately that's not going to be the case any time soon.

So considering that somewhere between 1 to 20 Trillion is at stake, one might conclude that the Central Banks / Government / Arabic/China rich nations will come to the rescue or buy out the US financial sector, because if they don't - this *HIT is going down hard (aka. depression).

If bail outs occur in the form of US government bail outs, expect the US 9 trillion deficit to tack on another 1+ Trillion or expect the already over burdened US bankrupt tax-paying consumers to suffer even more. And don't think for a second that the 158 Billion Bush package (transaltes to one time ~$600 paycheck to middle/poor class) is going to even make a dent in consumer confidence.

No matter which way you look at this picture, the US middle class consumer loses - and if they cut back spending (already went from 5%GDP in Q3 2007 to ~0.5% GDP in Q4 2007), a hard recession is in the works.

The only half-baked work around this whole mess is, as I mentioned above, if foreign nations come to the rescue of the US and buy up large chunks of bankrupt-ridden companies. The US has already outsourced large parts of its IT sector and manufacturing abroad, and soon parts of the service industry (to India), so why not sell off what's left of US companies abroad.. talk about being "P4wnd!" (That's geek speak for OWNED / screwed).

And if you think the upcoming lower interest rates are a good thing, don't expect it to last long (1 to 1.5 year TOPS), because the only way to pay back all those ridiculously high debts is to increase interest rates, tax the consumers to death, or cut back on social programs & healthcare - or ALL of the above.

Lastly, now that Ron Paul is no longer an option for US presidentials, and Hilary and Obama and that War Monger republican are the remaining likely 3 to be elected, no matter which one is elected, Iraq spending is highly likely to continue for a while yet (read: years). Of the 3 Obama would bring back troops earlier, but would still take quite a while (1+ years) - too little too late.

So yeah, don't worry about Victoria Real estate because US recessions have never hurt the Canadian economy before... Bhahaha!

PS. I work for a Victoria Financial Institution who is bleeding upwards of ~10 Million each time the BOC cuts rates by 25 basis points - I'm expecting my yearly bonus to go bye bye. Execs have already started slashing previously approved 2008 Opex & Capex budgets in anticipation of a major economic downturn. Hiring freezes are being rumoured amongst my Victoria / Vancouver co-workers.

beagle said...

anon: February 8, 2008 3:05 PM

Not good news but good post.
I would'nt want to be a debtor in the next few years. The banks are going to be looking to get the losses back.

vg said...

anon: February 8, 2008 3:05 PM,

agreed, very scary post and very real possiblilities. I am not by nature a doom and gloomer (except for BC real estate) but this is serious stuff involved here and is way worse then any Savings and Loan debacle or currency crisis of the 80's and 90's. We better pray these financial enities get a grip on this or we are in big crap.

I have even put off a planned job change for this next year til this all plays out.

vg said...

tonydanza, yes I was thinking the same, the timing usually gives it away on top of the similar bull rants. We're a developer/agents worst nightmare.

olives said...

Great post 3:05!

Nelson Robertson said...

We were fortunate enough to buy a home last week in Victoria. The market is moving at such a fast pace, it was a real challenge to keep on top of the new listings. Whenever our agent would take us to view 3 or 4 places, by that evening at least one or sometimes two of them had offers and/or backup offers. I don't see any indication of the market cooling off. If it does (and it won't) it will not go down in value. Compared to other cities in the world, Victoria is still under valued. N.R.

talus said...

Post 3:05 PM... So considering that somewhere between 1 to 20 Trillion is at stake, one might conclude that the Central Banks / Government / Arabic/China rich nations will come to the rescue or buy out the US financial sector, because if they don't - this *HIT is going down hard (aka. depression).

Great post 3:05! Further to the above, here is a NY Times Magazine article on the waning US empire and growing influence of China and the EU. It's well worth the coffee or two to get through it.
Waving Goodbye to Hegemony

"Second-world countries also increasingly use sovereign-wealth funds (often financed by oil) worth trillions of dollars to throw their weight around, even bullying first-world corporations and markets. The United Arab Emirates (particularly as represented by their capital, Abu Dhabi), Saudi Arabia and Russia are rapidly climbing the ranks of foreign-exchange holders and are hardly holding back in trying to buy up large shares of Western banks (which have suddenly become bargains) and oil companies. Singapore’s sovereign-wealth fund has taken a similar path."

talus said...

From Chipmans [Vancouver] blog....

February 8, 2008
Thursday Numbers

There were 302 new listings yesterday, and 116 sales, for a sell/list of 38.41%. Inventory reached 9,789, and of those, 2,319, or 22.37%, had been on the market over 90 days.

vg said...

"I don't see any indication of the market cooling off. If it does (and it won't) it will not go down in value."

As long as you don't mind it going down over the next 2 years by 20% -30% if you are wrong and are in for the long haul then good going.
Somehow I see many listings of very nice homes sitting for months.

Multiple offers too ? I say BS to that,this blog is being infiltrated by if you ask me. Next thing we will hear they are lining up around the block for a new condo being built in Vic West.

vg said...

"22.37%, had been on the market over 90 days."

Would be nice to get these numbers in Victoria but what happens in the big town will happen here anyhow.

Nelson Robertson said...

VG, serious. Even try placing a fake ad on and you'll see for yourself. your phone will be ringing off the hook. a relative of mine has their house on it and first day had 3 showings within 24 hours.

vk said...

@ nelson robertson: I've been tracking properties across the city for the last year or more.
I've seen many houses sitting and re-listing again and again and again.
One that jumps to the top in Broadmead has just sold, after many listings totaling about 330 days ... not such a hot market.
The last listing price was down about 60k from the year ago price. However it will likely be counted as selling near list price as the Realtor/MLS will use the last price of the 4 listings.

All this info is available from MLS, it is a bit tricky to track with the changing MLS #'s for each re-listing, but it is there.

JAS2 said...

I don't know if houses are really selling like pancakes in Victoria.

I've been following 1 particular house in MLS (MLS# 240040) because it's just beside us.

It was offered at about September last year for about 389K. It's price has gone up and down several times, dropping to 369,000, returning to 389K, and now becoming 379K. In addition, it's been re-listed a couple of times. It's still sitting unsold in MLS.

Personally, I think the house is overpriced because of its age (1940s) and location, which is right beside a busy and noisy intersection. These might be some of the reasons why nobody's buying it.

titan said...

Before you sit too high on your highhorse you might want to turn off that satellite television and spend some time learning to spell. Comparible=Comparable A person can always make money but it takes a little longer to get an education. As an aside I would be very interested in seeing some of your units if you truly are building high end stratas. I have recently come back to Victoria, and I find it absolutely ridiculous the crap that is promoted as high end strata units by the likes of Large & Co and Abstract Developments. I have viewed several of these "high end" (especially Abstract)developments and they are embarrasingly cheap and shoddily built. The only people that would believe that these are high end units are those that have never been exposed to true high end construction. I don't know how these companies can stand to sign their names to such schlock. If your company truly builds high end I would be very interested in taking a look at your units.

greg said...

How can you believe anyone who would take a tag line for a crappy American beer would be all about quality?

Anonymous said...

Anon 3:05.

There is no doubt that the Government will have to come to the rescue of the bond insurers. I would expect to see a quasi-government control of that sector much like what has happened with Fannie Mae and Freddie Mac.

Most people in the capital markets have priced Government assistance into the markets and that has gone a long way to bringing some stability over the past week. Now what cost and impact that will have is anyone's guess at this point but bets are that it won't be good for you or I.

What infuriates me however is the simple fact that no matter how badly a sector gets screwed (ie dot com bubble, savings and loan, mortgages, etc), the idiots that led us into the mess always get paid. The shareholder of investment big bank or brokerage house gets screwed but the CEO gets his $30M handshake plus bonuses.

ihateinternetspellpolice said...

titan said
Before you sit too high on your highhorse you might want to turn off that satellite television and spend some time learning to spell.

ya u wouldnt want to be "embarrasingly" yourself, haha


vg said...

"VG, serious. Even try placing a fake ad on and you'll see for yourself. your phone will be ringing off the hook. a relative of mine has their house on it and first day had 3 showings within 24 hours."

what price range and areas are you talking here nelson ? I still say BS.

vg said...

Just a reminder, we are in the beginning of a global BEAR market and if some of you think the party is never going to end here then you will be the ones who will suffer the most. The stock markets declines will be effecting everything to do with buying psychology. Wait til Vancouver numbers come out for February/March and watch the media attention shift hard and fast.

Only the fools are over leveraging themselves right now,if you got the bucks then good for ya,but those thinking this is the time to travel the road to easy riches then you are going to get smoked over the next 2 years.

BM said...

Firstly, lets start off with a reminder that I believe (only gut) that I we are entering a bearish market shortly. I try to usually go with my gut because there is not enough true evidence that points to a correction anytime soon or that we will keep going up.

So, with that said, lets start with VG.
- Stop trying to predict a crash, it is getting redundant and making you look like a fool. You have posted stuff for years and have been wrong for years. Just because you are finally going to be right doesn't mean you are. A stopped watch is right twice a day.

Next VG - you last post was quite absurd. I am sure two years ago you believe people were going to get smoke but they didn't and some made a lot of money and other will loose a lot. C'est la vie. You sat on the sidelines over the past 5 years when people made money and you are at a point where you have to wait for this bear market because you missed the bull.

Titan, I find it quite ridiculous when people post about spelling mistakes on blogs. It does not disprove ones theory based on spelling. Your fat and I don't like your theory is saying the same thing.

mt said...

Hey Titan (wow, neat name)

It doesn't matter what I market the places I sell as, what matters is that I sell everything build and take a healthy profit every time. Sorry for the typo if it offended you, I'll have a talk with my butler. haha

vg said...

bm, since you say you I have been saying these things for years then how come you don't know what I have said years ago ?

1. I have been out of the market 5 years ago because of a divorce situation and life/job situation. If you truly read me for years like you say you have then you would have seen it several times when clowns like you have challenged my views.

2. Two years ago I was adamant it was the top,but 40 year mortgages were secretly slid into the lender equation that kept this bubble alive,that is the facts. A high percentge of FTB and high leveragers would not have been capable of borrowing without it. Developers are doing to I am sure too.

3. Credit lending requirements changed the past 3 years as employment history meant sweet eff all. Where did the 3-5 year employment history rules go ? out the window like it did in the USA and look what happened there.

Maybe you are too young to remember what "qualifying" for a loan or mortgage really means ? It's called backing up your statements with facts and they are still lending out mortgage to kids with seasonal jobs and no down payments cause I have seen it in the past 6 months.

So clue yourself in there BM, you seem to want join our bear party now but if you were really here you would see how and why what was an obvious bubble 2 years ago or more has been inflated beyond what should have been. So go chew on that for awhile and tell me I am wrong.

PS, Has being in the market the last 2 years been really that profitable if you haven't sold ? After reno costs,lines of credit,and real estate fees I bet the profit the last 2 years is nothing to write home about versus the risk level.
I have been in the stock markets in the same period and made much higher percentages then the real estate and have done very well thanks.

Calling my comments absurd is about as absurd as you saying you have a "gut" feel on a bear market with no facts, so your credibility is totally weak. Johnny come lately's always are the most annoying.

greg said...

We are seeing a lot of this to establish cred:

"I am inclined to be bearish, but you never know what is going to happen, it could still go up, I don't know."

Then the poster attacks other people with a bearish point of view.

BM, how can you pretend to know what was going on here two years ago? This blog was not even born yet - it is only about a year old.

Are you commenting on something VG wrote on another blog? How about saving the comments for over there.

Do I need to remind everyone yet again of how bulls like Marina Prime suddenly appeared and polluted in the fall of 2006, trumpeting how great things were. They are all gone now.

Are you going to come back here and apologize to everyone you are attempting to mislead now in a year, when prices are going down in the double digits?

Why can't Millertime and BM and all the other realtor lackeys find a place where they can talk among themselves, instead of finding bear blogs and making their panicky, shrill, unsubstantiated statements about how much money they made and how great it is to buy real estate, even now, in one of the most overpriced, economically out of whack housing markets in the world?

Really, why don't you found a happy realtor loving blog somewhere, post the link and we can all visit and make fun of your happy confident predictions.

Try to post some financial news, graphs and analysis there to support your happy optimistic bullish views.

We'll just laugh at them, call you fools, and won't bother trying to back up our bearish views.

Your new happy internet readers, who will be relieved to have finally found a place to share optimistic happyn stories about shared riches past, present and future, will of course enjoy the mutually respectful dialogue.


vg said...


looks like we have some agents sitting at open houses with no one coming so they have lots of time to blog now.

It's funny how these financial whizz's who show up out of the blue can't comment on why interest rates are being lowered as fast as in the early 80's at 3/4 % and 1/2%chunks,cause we are in desperate times not cause things are all peachy. I feel there is alot of real estate bagholders out there playing Donald Trump who are freaking in their shorts right now Even The Donald predicted what is beginning to happen in our financial system in his book from a year ago.

Hear Ozzie the RE king this morning ? even he says the condo pre-sales are clearly slowing down in Vancouver. January inventory appears to be higher in Van in the last 3 years,not by much but it is up and sales/listing ratios are at the 30-40% level the past couple of weeks. Real bears have facts,not 'gut' feel.

titan said...


To be honest I agree with you on the spelling thing. It is a very trivial thing and doesn't have relevance to the validity of the argument, poor form on my part. Point taken.
As far as going with your gut there is plenty of information out there, if you look for it. Going with your gut sounds like the genius of George Bush. If developers of schlock like Millertime are beginning to think of themselves as elites I can think of no better indicator that housing in this city has topped. Like feeling ultracool for having the nicest acidwash jacket in the 80's.

olives said...

"Johnny come lately's always are the most annoying."

No kidding. It's so easy to look around and see what's happening at the moment and talk about it, but much more difficult and brave to stick your neck out and make predictions based on your opinion about what will happen in the future.

BM said...


A prediction is only a prediction and good as the information you provide it.

If I create an equation with these inputs:

Average Income
Average House

You get one answer

If I make an equation with these inputs:

Average Income
Average House
Average Condo
What is the ratio of condo buyers to SFH buyers
Current Buyer Income
Are they dual income
Percentage of Foreign Money

You get a different input.

My point is that the more information you put in the better your answer. If you decide to only choose certain inputs you are doing it to justify a cause instead of see reality.

As I said, I do not know those numbers and do not know if it will make the market increase or decrease.

However, from the comments of VG and Greg. Anybody that does not beleive their information cannot be a bear based on gut.
Gifts inheritances
Loose Lending Principles

Anonymous said...


Most of the homes in Broadmead are very over-priced as a large percentage need huge amounts of work. Foundation work to be exact. Many Broadmead homes were not properly insulated and built for this rain forest climate.

I heard this from a builder. Unless major work is done I can't imagine what these homes will look like 20 years from now.

BM said...


It is not difficul nor brave. Here is my prediction. I believe prices will plateau this year and/or decrease by 5%. Then next year you may get another 5-10%. Then you will see a plateau for 3 years. During those five years our economy will handle itself well and our income will rise by 15% (dollar will be stronger, corporate tax lower, creating a demand for foreign workers to come here). You will see us forge better relations with india, china, etc to keep us going but still be a major partner to the U.S.

I also believe in the next two years that global money will bail out the U.S. However, with them being bailed out it comes at a cost. All the money they have pumped into the Middle East, India, China will be used to bail them out and that means each of these countries will own a bit of the American Dream and corporation.

This is how China and India got ahead during the tech bust. U.S laid a lot of fiber optic cable throughout the seas to connect them to foreign countries. When the bust happened India and China pruchased many of the cables at severe discounts and connected themselves to the world.

vg said...


did you happen to notice all our posts "BEFORE" the US market tanked 2 years ago ? and "BEFORE" all those Flip those house types are now all bagholders ? of course not. It hasnt happened here yet and has been delayed because of our usual Canadian stubborness to not believe it only makes the chances of a crash here and not just a correction even more likely.

What happens if one of the US banks goes under ? hmmmm

And thanks for not debating one single point I made,shows your shallowness in spades.

greg said...

When the bust happened India and China pruchased many of the cables at severe discounts and connected themselves to the world.

You're right about that - the Chinese bought Global Crossing.

However, predicting 15% increase in income over 5 years in a period of high inflation is like predicting a further drop in purchasing power.

If housing appreciates even 5%, the buyers are further behind because current houses are not being bought at multiples that have anything to do with current family incomes in Victoria.

For this to go back into whack you would need to see zero increase in nominal prices for around 10 years, with wage increases that match inflation.

Because if they don't match inflation, the wage increases are absorbed by the higher costs of everything else long before they can be applied to bigger house payments.

vg said...

not sure how old you were in 81 but I was making major bucks here and so were many in this town in construction all getting 5% pay increases annualy,jobs were everywhere and the market still crashed with condo projects sitting like skeletons for years.

Something tells me you didnt live thru that era as an adult and you are bagholding too many Bear Mountain condos hoping it is ONLY a 5% decline in the next year so you can unload them.

On a side note my girlfriend was invited to a condo tour today with a friend so I will be most interested to hear the latest BS they are feeding them.

vg said...

"However, predicting 15% increase in income over 5 years in a period of high inflation is like predicting a further drop in purchasing power."

Exactly greg, as per a previous poster in the financial bizz,job hires were being frozen and the bonus checks may not be a reality. Things change fast when companies don't make money,hack and slash happens in the most brutal of fashions. Beyond the low paying service jobs and some government retirement food chain hires we will not have a huge influx of high paying jobs in this town.

The word is already out there by CMHC and our own government, "slowdown" could be a nice way of saying recession.Sooner or later inflation will have to be controlled with interest rate hikes in a years time.

olives said...


I should have clarified - it's brave to make a prediction that is drastically different than the current situation - yours isn't (although you may be right).

I turned on CNN this morning and heard discussions of recessions and depressions - this is now mainstream news, everyone is talking about it,and so it is "easy" to be a bear. However, two years ago, people like Shiller and Schiff on these same programs were ridiculed for their opinions of things to occur in the future (ie real estate busts, recessions, etc.)- that is the difference. They stuck their neck out by making their predictions of the future public, even though these predictions were considered very negative (and they were right as it turns out).

Even on this blog there are varying degrees of bullish and bearish opinions, and for many different reasons I'm sure. The "affordability" issue to which you refer (average income and prices) is just one small part of the bearish argument.

vg said...

PB has posted a lovely add on his site from the Tuscany,with a chart of increasing inventory .... hack and slash says it all,coming to a favorite mountain near you where 5% will soon be wishful thinking. ;)

vg said...

My girlfriend got a good look today at how the condo room sizes are a joke. As mentioned earlier she joined a friend today for a condo "tour" as her friend is in the looking stage. As expected it was a major disapointment. It was at Centennial Walk in Royal Oak and is a half built project that won't be completed til January 09. The supposed "tour" was in the end just themselves as they waited for more to come but funny ,no others showed up so they took them up in hard hats.
It was a disapointment as the back of the project where all the views are, (away from the main drag on the front), has a lovely view of the BC Hydro works yard and garage roof with rolls of wire stacked all about,and a very nice view of all the large hydro trucks all parked.

But you are not supposed to see it as you will be too busy looking at the view of the Sooke Hills and Olympics but just ignore the honking horns and loud engines firing up in the middle of the night and banging etc from the shop area,you won't notice it, LOL.

The one bedroom unit was half the size our apartment at about the typical 500-600 SQ FT max for $309,000,same size kitchen. Nothing to write home about thats for sure. Think there will be some hack and slash deals in the next 6 months ?

Anonymous said...

Tuscany wil be selling for $100K when the market hits bottom. The location is horrible and the idiots who bought at list price will get what they deserve--a huge loss, due to their greed and stupidity.

vg said...

Someone said Seattle is an indicator for the North West market ?

Same sag story for home sales

Seattle Times

Looking for a place to live in the Puget Sound region? You've got plenty of choices, many of them on sale.

Looking to sell your place? Um, better be patient.

Those were the messages embedded in the January housing sales figures released Wednesday by the Northwest Multiple Listing Service. The data showed home sales in the four-county region continued to sag last month.

vk said...

@anonymous 1:02 PM
James Bay houses must have the same cruddy foundations as the Broadmead ones.

A property in James Bay I've been watching has dropped 4 times (maybe 5, I think there was 1 more price before I first saw it).

Total drop that I've seen is 99K. That is 10% and it is still for sale after 150+ days. Not so hot in James Bay (I could list many more).

I guess they should quit with the MLS and start advertising on :-)

vg said...

So now that the Campbell River mill is closing, what are those guys going to do with their lives and their homes ? This will be a heavy hit to this area,they cant all exactly pick up fishing rods to make a living.

For an area they were pumping as the next hot spot to buy I guess those RE pumpers didn't do their DD on the towns economic base. How long til the Nanaimo mill goes down with all the losses and being sold off. The signs are all around us.

Also noticed on the news this morning that despite the increase in employment numbers,the trade surplus at $3 billion will be negative by year end. One more warning sign to put on the list.

beagle said...

I've been to Campbell River a number of times in the last couple years and from looking around the big driver of the economy there is building houses and commercial buildings. They are filling the hillsides and valleys with subdivisions, it's unreal! When it stops it will stop hard there and the mill closing may start the ball rolling, especially if the pulp mill goes down too. It employs around another 600 people I think.

Louisville Real Estate said...

Good point about Campbell River residents not being able to just fish for a living. It doesn't usually work like that anymore in this day and age.

Millertime said...

....just sold the last one!

S2 said...

Lucky you millertime. You got out just in time.

vg said...

Makes you want to over leverage doesn't it. BM should take note.

Flat incomes and steep spending equal record household debt: report
3 hours ago

OTTAWA - It's a perfect financial storm of flat earnings, increased spending and plummeting savings.

A new report by the Vanier Institute of the Family says Canadians are buried in record debt averaging $80,000 per household. Author Roger Sauve says total debt is now 131 per cent of household income after income tax and benefits - up from 91 per cent in 1990.

Many Canadians have borrowed cash at lower interest rates to buy more expensive homes.

But credit-card debt has almost doubled since 1990 to $22,500 from $12,000.

Bankruptcies and proposals that allow partial debt repayment soared to more than 100,000 last year from 43,000 in 1990.

Sauve says another recession would be disastrous for many Canadians teetering on the financial edge.

StargazerXL said...

VG, would you please post the link to that article?

snaptee said...

I can't stand this bleeding heart but she's a good writer and in this case, she makes a good point.

vg said...

stargazer,here's the link.

vg said...

that last one doesn't appear to work, try this one.