Monday, April 4, 2011

Monday market update: 4 days of the same?


MLS numbers courtesy of the VREB via Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.

Month to date April 2011
Net Unconditional Sales: 47
New Listings: 135
Active Listings: 3,925
Current sales to new listings ratio: 35%

April 2010 totals 
Net Unconditional Sales: 756
New Listings: 1,783
Active Listings: 4,229
Sales to new listings ratio: 42%
Sales to active listings ratio: 18% or 5.6 MOI

Our local real estate market in Victoria is too small, with too few transactions, to read four days worth of data as any indication of a trend: be it a continuation of last month's activity or whatnot. But I'mmagonnadoitanyway!

In the first week of March 2011, approximately 17 units sold each day. Over the last 3 days of March 2011, approximately 26 units per day changed from active to pending in the VREB MLS system. In the first three days of April, we've seen 15 sales per day.

All this means absolutely nothing of course, but there's little indication in the sales numbers that buyers were pulled forward by the March 18th mortgage rule changes and there's no indication that the spring market is getting busier. Which is probably why around 300 listings expired at the end of March and haven't been renewed yet.

Feel free to refute my "it's not busy out there" claims with anecdotal evidence of under-priced Gordon Head homes selling in bidding wars or attracting big crowds at 2-hour long open houses on sunny Sunday afternoons.

208 comments:

1 – 200 of 208   Newer›   Newest»
JustWaiting said...

More cold water gets poured on the real estate market.

Cooling fast.....

TD Canada Trust changes residential mortgage rates by .35%

RBC changes mortgage rates following TD announcement

Other banks will follow suit today and tomorrow.

JustWaiting said...

The bandwagon is getting more passengers....

CIBC raises 5 year mortgage .35%

Note that all the banks have made these rates effective tomorrow. By the time it hits the news tonight its too late to get a pre-approval letter at the old rate from these banks.

No lunch for mortgage brokers today as they call anyone that will listen...

mln said...

The interest rate increase means buyers can qualify for about 4% less than they could yesterday on 5 year mortgages.

It's amazing how big a difference a 0.35% rate hike makes.

a simple man said...

and 4% of a $615,000 home is just shy of $25,000.

And this is before Carney and the BoC get involved. I guess the bond markets decided enough is enough.

Just Jack said...

The trend that I am seeing is that people are moving from the western communities into the city core. This is causing the spread in prices between these two areas to increase.

Right now house prices in and west of View Royal are on the down slide. The central core has been holding steady with some small price bubbles in select neighborhoods.

The future will be of sales collapsing as the home in the western communities fail to sell which in turn will collapse the sale of the home in the urban core.

The same is happening in the Saanich Peninsula.

The smart money is on those who don't follow the crowd. This will be an opportunity for some people to have a better quality of life and be mortgage free by moving from the city to the westshore and peninsula.

Eventually the spread, like an elastic band is stretched too far and urban house prices have to fall and then the chance to improve ones lot in life is diminished. Just as it was the opposite in early 2000 when the spread was narrow between the two area, and it was to a home owners advantage to move into the city.

Leo S said...

I wouldn't read too much into the rate. Last spring it was going up and then it collapsed again. With all the uncertainty in the world, I would expect the bond yields to keep bouncing along the bottom for a while.

Just Jack said...

Of the last 500 sales
67% were in the Victoria Core
22% were in the Westshore
11% were in the Saanich Peninsula

But the listings were allocated
49% in Victoria
36% in the Westshore
15% in the Saanich Peninsula


49% were detached single family
4% were half duplexes
32% were condominiums
12% were town homes
3 % were manufactured homes

And the listings were allocated as
48% detached homes
3% half duplexes
34% were condominiums
12% were town homes
3% were manufactured homes

For the most part the percentage of listing matches the percentage of sales in all classes of properties. The imbalance only occurs between areas as more people are listing than selling in the Westshore and more people are buying than selling in the core districts.

Alexandrahere said...

m

Alexandrahere said...

Check out the new "Fairfield Rise", a new 8 unit complex next to Fairfield Shopping Centre.

Largest suite 856Sq Ft at $600K
Smallest suite 483sq ft at $490K

The two bedroom units are really one small master with a 9'X11"den (no closet). The smallest units one bedroom measures 10'X9' and the only closet in the unit is in the bedroom. The living room measures 12'X 10'.

The finishings are only average at best. It feels as though Fairfield road is right in your livingroom in the suites fronting that street.

The realtor said that their target market were people selling their homes in that area of Fairfield and downsizing to one of these condos. Good luck.

Marko said...

A 1407 sq/ft 2 bedroom + den, 3 bathroom unit sold at the Falls which is a concrete building with a pool for $545,000 in March......856 sq/ft, wood frame, overlooking the cemetery for 600k? Seriously?

Robert Reynolds - HMR Insurance said...

That Fairfield Rise place went up FAST. I swear I blinked and it went from a hole in an empty space to done.

Also, bond markets fluctuate a lot, so mortgage rates will also fluctuate. While the impact of a 0.35% increase is noticeable, the bond rates have swung back and forth many many many times. So IMHO nothing to see here. The Govt of Canada 5 year bond index (which is what most mortgages are pegged against) was at a low not seen since Jan 2009 all of Nov 2010. We are still very close to the bottom.
Chart, look at the 3Month, and 3 Year charts

wally said...

The funny thing i find about the 3 year interest rate chart Robert posted, is how it mimics what house prices have done here.

In other words, for the last 3 years when interest rates have fallen, so have house prices. They have pretty much risen in lockstep too (except maybe the last few months).

Last half of 2008 interest rates plunged, voila so did house prices. Exact same thing through the middle of last year. Makes me chuckle.

Robert Reynolds - HMR Insurance said...

@Wally

Bonds are a good indicator or investor confidence. When investors are scared or nervous they buy bonds, this pushes the yeild down. I can see how when investors are scared they don't buy houses, prices fall.

I wrote an article on how bonds work. I tried to make it easy to follow

Carmy said...
This comment has been removed by the author.
Alexandrahere said...

Thanks Robert.....I enjoyed that. I have to admit I have bought bonds before, i.e. federal,provincial, municipal and corporate but the "interest/yield" thing always does confuse me.

omc said...

Carmy,

prices have dropped some what. Right now there is no inventory but flippers on the market. An extremely poor time to be looking in this area as flippers are the worst value for your money, and the present flippers are the worst of the them. It might be a while before we see further drops, but there is no magic here.

If you have to buy now, look else where.

Just Jack said...

Well Carmy, I think we have to find out if everyone does want to live in Oak Bay first of all. The simplest way is to ask where are most of the people buying today. As a percentage of the sales since the start of the year here is the percentage break down of where people are buying.

0.5% - Vic West
0.5% - Highlands
1.5% - Metchosin
2.5% - Sidney
2.5% - View Royal
4.0% - Esquimalt
5.0%- North Saanich
5.0%- Colwood
5.5%- Central Saanich
6.5%- OAK BAY
7.5% - Sooke
10.5%- Victoria
10.5%- Saanich West
13.5%- Langford
24.0% -Saanich East

So out of the 15 neighborhoods, Oak Bay ranks tenth. With most of the people wanting to live in Saanich East. Or putting it another way only 6.5% of the population are looking to buy in Oak Bay. You might argue that people still want to live in Oak Bay, but personal finance may exclude them from buying there. I might want to live on the French Coast, but that want has no affect on the French market.

Oak Bay is a desirable neighborhood, but it is not impervious to a fall. It may be one of the last neighborhoods to experience a downturn. But the market will be depressed for many years, and that means Oak Bay prices will have to be balanced with the surrounding neighborhoods too.

Perhaps Oak Bay has a 15 to 20 percent premium over Victoria. However, if Victoria prices fall by half, so will Oak Bay in order to maintain that premium.

wally said...
This comment has been removed by the author.
Watching and waiting said...

is it me or does this house just not go away:

1760 Broadmead

It's back on market after 239 days DOM. For some reason I thought this had sold a few months back. Any one viewed it? Perhaps the tenants did not want to move as it is advertised as an up/down revenue producing home.

Just Jack said...

I do like Ten Mile Point in East Saanich. Its a peaceful location where you can keep the Cadboro Bay rif-raf out. A beauty of a property sold this week for $1,535,000.

It also sold four years ago in 2007 for $1,629,000 - bummer.


Not your style. How about a 2000 square foot penthouse in Vic West that just sold for 1.2 million. The previous owner paid $1,677,000 plus GST in 2009.

Ooops.

And then there is Ardmore in North Saanich. Nothing says retirement like an early morning golf game and boating in the afternoon. Ask Ian Thorn, this is where he chose to live and he had millions. A nice rancher on an acre sold for $625,000 this week and sold three years ago for $600,000.

So buying high end homes or locations, doesn't protect you from a downturn in the real estate market.

Leo S said...

Anyone know the previous sale price for 3918 CEDAR HILL CROSS RD? I remember going to look at that one last time it was for sale before it was renovated. Maybe $425k?

DavidL said...

@ Just Jack wrote: I do like Ten Mile Point in East Saanich. Its a peaceful location where you can keep the Cadboro Bay rif-raf out.

Now that's very funny! (I grew up on Ten Mile Point in the 70's and early 80's ...)

Just Jack said...

The real estate market boomed in Las Vegas with construction jobs everywhere up to 2008. Now they have 14% unemployment and 167,000 vacant homes.

Well we only have 485 homes ready for immediate occupancy. But then again we only have 2,832 properties for sale (only for Victoria, Westshore and the Pen areas). That's 17 percent of the properties for sale today, that can be bought and moved into in just a couple of days.

Where are all the people going?

Nancy said...

Could someone please tell me the average "family" income in Victoria?

Many thanks.

omc said...

watching and waiting,

That house on broadmead ave did sell, but flooded before the new owners took possession. They of course backed away fast. It is a POS and has flooded before.

Trilobite said...

Sorry but what is a POS?

Just Jack said...

More listings are now reading "priced below assessment"

Ahh, the new professional marketing strategy of real estate agents. That alone is worth 6% on the first hundred thousand and 3% on the balance plus HST.

I'm actually glad the house prices are high in Fairfield. A house on St. Joseph came up for sale today. If it were listed a hundred thousand dollars less - I would probably go take a look. But at that price - gas is too expensive.

a simple man said...

All the people are moving to Vegas!

The average family income is around $68,000 I think?

POS = piece of "poop"

Just Jack said...

A sale of a 1991 built, updated home with 1,900 finished square on a 10,000 square foot lot with suite potential sold for $370,000.


Where, where, where???


Well Sooke of course, on Foreman Heights.

For a similar home in Fernwood (actually you'd be hard to find one as good as the Sooke home) would be north of $600,000.

That's a spread of $230,000. Nearly a quarter of a million Canadian petrol dollars. Most of us will NEVER retire with a paid off home and a quarter of a million dollars in the bank account.

That's an opportunity.

Trilobite said...

Oh! Many Thanks! I think I need more coffee. I thought omc is referring to some plumbing term.

When I had a look I didn't think it was that bad .... just something like 100K+ too much (I think asking price was 619K then).

omc said...

I know what happened to those poorly priced listings that expired. They are now "new listings" again! Isn't that wonderful, given that many of these are re-lists from last year.

simple man,

I drove by your house on saint anne yesterday. It looks like they are staging it. Better get your offer in quick if you don't want to lose it!

omc said...

Trilobite,

If you look at that house it is a typical "flip". It needs practically everything, but is all dressed up to sell and of course is sold as a fully renovated house. They are not typical flippers as they actually lived there for a short while, but they did do they cheap flashy "updates" to sell at an inflated price.

The house is tiny; under 1K sqft with a low height basement. Finishing is extremely cheap; prefinished wood floors and painted kitchen cabinets (not a new kitchen). No desperately needed work has been done, such as the drain tiles.

It appears that the Gordon Head box has passed it's market peak as the sales I am seeing are lower and I am seeing many price corrections. A gordon head box is miles better than this uninsulated shack at near the same money. I would value it in the high $400k range. It will certainly sell for more, but that is what it is worth.

Catherine said...

Where is this house on St Anne? I can't see it on mls.ca

Nancy said...

My banker thinks the stats work and Victoria is not over-priced at all and may double in the next five years because so many rich people live here. Not the rich chinese but I guess other rich people. Lots of rich people are coming too.

I know a few rich people but most people I see and meet are working people whether professionals or not. I guess maybe there is some secret club where all the rich people meet or something.

Or maybe everyone is in fact rich and we just don't know it and they are all pretending not to be rich when in fact 80% of the population are millionaires.

Now that is a theory.

Chickinvic said...

Nancy,

I would switch bankers. Yours is an idiot (or a liar)!

Olives said...

The house on Broadmead has been sitting vacant for the past few months - with no For Sale sign.

Quinn said...

Or putting it another way only 6.5% of the population are looking to buy in Oak Bay.

As much I appreciate Just Jack's insight and opinions, this analysis is way off. The list of percentages doesn't really tell us much more than the proportions of people buying homes, not where people are interested in living.

There are just too many variables at play to attempt an apples-to-apples comparison, like the size of each neighbourhood/municipality and the relative number of listings in each. For example, Vic West is a 10th the size of Saanich East (for argument's sake), and the sales results reflect that.

Just Jack is right though in that even if OB has a premium, if prices drop across the board, they will still drop in OB to match.

a simple man said...

Hi - it is 1955 St. Ann St and the listing was cancelled and relisted with MacDonald reality in the past couple weeks.

perhaps the flippers are moving in b/c they can;t afford to hold it anymore?

a simple man said...

Nancy - your banker has drunk the bank cool-aid.

Look around - there is some wealth here, but there are far more people in financial servitude.

patriotz said...

Nancy: ask why landlords are renting out their properties at a loss instead of selling them to all those rich people.

Just Jack said...

It's not the analysis that is way off, it is the assumption that everyone wants to live in Oak Bay.

Very clearly, that assumption is false. So you are left with trying to prove a false assumption.

And there is no way that you can do that. The only proof that you can show is what people actually do - not what you think, they think that they want.

Just Jack said...

There's good Fernwood (north of Bay street). There's bad Fernwood (around the apartments) and then there is the area around Gladstone.

Today a cute canary yellow character house sold for $568K. Which is almost 130K or 29 percent more that it sold seven years ago in late 2004.

Oh come on! The market's done better than 29 percent in Fernwood over 7 years - right?

Sure it has, prices in the core are generally up 85 to 90 percent since 2004.

The previous owners just overbought in 2004 by close to $140,000. Just like some people are overbuying in Fernwood. today.

So, its not a good thing to get into the market at any price.

Carmy said...
This comment has been removed by the author.
Sweetrealtor said...

@Leo S
3918 Cedar Hill Cross Rd sold in July 2009 for $380K.

Marko said...

1649 Warren Gdns went for $843,000 encase anyone wants to comment.

Leo S said...

Thanks Sweetrealtor.

Just Jack said...

When you get around the city, you find that there are nice pockets of homes from Sidney to Sooke. I believe there is still a premium put to the name "Oak Bay" that has nothing to do with it being any better than any other neighborhood. That it has better schools, better parks, better roads, better taxes, more sunshine or prettier people than any other area.

We use to call it the tweed curtain, because of all of the British accents or wannabe accents. Well those days are gone along with the accents as Oak Bay is getting more ethnically diverse, and the premium is getting less noticeable as the population grows. I'm hearing that they are even letting people from Alberta live there now - there goes the neighborhood.

Hints, If you recently moved from Alberta to Oak Bay - take the gun rack off the back window, don't use your fork like a shovel and a toilet is not to be used as a bird feeder on your front lawn. Don't tell people that your from Edmonton - say your English cockney instead. The accents the same.

omc said...

Carmy,

Oak Bay might command a premium, but the entire market is overpriced right now. You are right though about current prices; there is nothing on the market that is worth even looking at right now. Mostly it is flippers, and they are extremely overpriced junk. It leaves a few very poorly priced houses such as the one on Byng street; this sold at the peak for $790k with many problems. It is for sale right now for $900k, and because the rest are flips I wonder if they just might get it.

Things come and go here though. That is the result of so many retirees locating here. Some will end up eventually going to a home, but the majority move back home within 1 or 2 years realizing they made a mistake. So, nothing but overpriced junk this week doesn't mean that it will be the same next week.

Carmy said...
This comment has been removed by the author.
Just Jack said...

Warren Gardens is truly an impressive price. This should make the neighbors along the street as giddy as schools girls during prom night, and wipe out that stinker of a price last month in the mid $600,000 range. Some of the owners along the street were getting nervous after buying in the $700K range several years back after that mid $600K purchase. I wonder if this sale is going to have the affect of another couple of homes being listed on the street?

This is the highest price ever paid for a 1950's basement style home on that street. A box of chocolates to the real estate agents. An excellent profit for the seller over the last three years even with the cost of the renovations.

Is it true the sellers are going to buy a home in Oak Bay now!

Just Jack said...

Victoria does not have good Feng Shui. The Chinese want to be around wealth, economic activity, an established and large asian presence and most import of all a night life.

It's like owning a Lamborgini in a town with a main street only four blocks long. Not much fun for cruising.

Rhino said...

JustJack, you keep talking about people moving from oak bay to sooke and banking all this cash....The only problem is nobody wants to do that (except perhaps you). I am sure we all know quite a few people who own houses in oak bay. Go suggest they move to sooke and see what reaction you get. That spread your talking about is just going to get bigger, at least in the short term. I'm not saying Oak Bay won't correct, but when it does it will not be from an exodus to Sooke.

Just Jack said...

Well Rhino, saying "nobody" wants to do this, well that just ain't factual.

At this point in time the flood is from the Westshore into the city and that's why the spread is increasing. Just, because the majority of people are doing this - doesn't meant its a smart choice. It just means we have a sheep mentality.

An exodus of biblical proportions from Oak Bay to Sooke. No, I don't see people in Uplands hammering crosses together and dragging them along the Galloping Goose trail. Most will just stay in Oak Bay and accept the lower prices.

Some may even say, you know if I had sold back in 2011 and bought in Sooke, I could be retired now instead of having to go to work each day as a Wallmart greeter.

And yes, if everyone was doing it, then the spread wouldn't be there. Then again, some will, but you won't find them working at wallmart, they will be out fishing.

So how big does the spread get, before YOU turn to your significant other and say good bye to Oak Bay.

$250,000
$500,000
$750,000
$1,000,000

If you said no to all of the above - are you really being honest with yourself.

It happened in Vancouver right after expo 86. The retirees were leaving Vancouver and selling their homes to people from Hong Kong. Taking the money and buying a home in Abbotsford and investing the difference. As the prices went higher, more left Vancouver as they could not afford the higher taxes on their pensions.

I remember the broken crosses, the twisted walkers, and empty cat cages that littered the Trans-Canada highway all the way to Abbotsford.

Just Jack said...

I suppose it is hard to believe that someone would leave Oak Bay for Sooke. But then again, most of us believe that someone would leave an affluent neighborhood in Toronto for Oak Bay without giving it a second thought.

Jason said...

I agree with you Carny that Victoria is nicer to live in than Vancouver, but even Van must feel somewhat parochial to anyone from HK. I doubt many people from a city rivaling NYC in terms of vibrancy are going to settle in Vic. Not trying to be condescending toward victoria, i just don't think it's what they are after.

Deanna said...

Not a Victoria story, but a Vancouver area story.

Several of my relatives, including grandparents and 3 sets of aunts and uncles recently sold their acreages near White Rock and Morgan Creek to developers. Not without some angst - Grampa built their house to retire in, but hard to pass up multi-million offers.

The aunts and uncles are generally retired now (one set runs their own business and haven't given it up) and enjoying puttering about on new acreages further out from the hustle bustle. One ripped off a farmer and got 5 acres for $600,000 - halfway through building their mini mansion, someone came along and offered them $5 million.

The secret to their success was having parents (my grandparents) who were developers in the area 40 years ago and had access to prime lots inexpensively. And then hanging on for 4 decades.

Too bad my mom moved up north and married a farmer, but at least one side of the family is making out like bandits.

Carmy said...
This comment has been removed by the author.
a simple man said...

Most people I know in Vancouver would not consider Victoria, just as I would not consider Vancouver. Very different places.

Plus, good employment here is as common as sunshine in December.

omc said...

Victoria is not Vancouver. There are no jobs here. The stats on unemployment aren't accurate because if you need a job here, you leave to get one. Jobs, mostly, earn far less here than other areas of the country too.

Can't see how most Vancouverites could move here. I know some have managed, but most cannot.

omc said...

Besides, why wouldn't you move to the interior instead; way cheaper.

Nancy said...

Okay ...

What is the average price (SFD) in Victoria

What is the average price single family dwellingin Vancouver

and Toronto

Just curious where Victoria sits.

Carmy said...
This comment has been removed by the author.
omc said...

Nancy,

You need to do measures of affordability. There is lots of data out there to show that Vancouver and Victoria are among the most unfordable cities in the world. It doesn't matter if other areas homes cost more, it matters what the ratio of incomes to home prices are. Don't bother trying to argue that wealthy foreigners are going to move here; they aren't. If you do, we will all think you are a realtor trolling.

We are at what, 9X the average income now for a house here?

omc said...

To answer your question on the affordability of Victoria's real estate.

Rhino said...

"Knock off your racist comments please."

LOL..I didn't know albertans were a race of people. Oh how your people have suffered! get a life.

Animal Spirit said...

Carmy - you seem to have a very good knowledge of real estate. as a potential buyer, I would like to know what you think the market will be doing (up, flat, down, crash, etc) and why.

Thanks!

Carmy said...
This comment has been removed by the author.
Just Jack said...

Actually, my family is originally from Cardston and no they don't pee in the front yard. That is so rude of you to think so - the birds would drown. And they do like their long guns.

A couple of things for you to know,

Albertan's are not a race.

BC is not a capital

Liberals can lean to the right too.

The stuff your neighbor is growing is just for medicinal purposes, or he could be a traditional rope maker.

Edmonton has the Oilers. Victoria has ....? You got me on the culture.

Waiting said...

@JustJack You crack me up!! :)

Carmy said...
This comment has been removed by the author.
Nancy said...

omc,
Don't bother trying to argue that wealthy foreigners are going to move here; they aren't. If you do, we will all think you are a realtor trolling.

I am not arguing it my bank manager is. I was telling him that I think property will tank.

??????

jesse said...

The thing that strikes me about Victoria is how everything is close. Vancouver takes forever to commute and bridges make regions seem farther apart. You can live in Sydney and be downtown in 30 min. It takes longer to get across Vancouver in normal traffic.

Cycle said...

Anyone notice this one on Richmond...mls 290567 ?

Doesn't look too bad considering what's out there. What do others think?

Just Jack said...

Now that I know you live on Beach Drive, I'll look for the truck with nutters on it and send you a KD Lang CD for Christmas.

Leo S said...

@Carmy
I have a successful business - you troll on this website with lame comments

Well at least we know one thing about Oak Bay. You have to sacrifice your sense of humour to live there.

a simple man said...

Please do not paint all us residents of Oak Bay with the same brush.

Just Jack said...

Vancouver is 8 times the size of Victoria.


They have the seawall, we have Dallas Road.
They have Stanley Park, we have Beacon Hill.
They have the West End, we have James Bay.
They have the P.N.E we have the Oak Bay Tea Party.
They have the Olympic Village, we have Bear Mountain Condos
They have successful business people, we have Carmy

Okay, I'll lay off Oak Bay. Don't take it so seriously. It's only a house. Wherever you choose to live is fine. It doesn't make you a better or a worse person to live in Colwood than Fairfield. Just hug your kids tonight, because that's the only thing that's real. Because it can all be gone tomorrow.

.... However, if your an Edmontonian living in Oak Bay. No matter how many times you sit on your Stetson it won't look like a Tilley and its pronounced OIL not ALL.

DavidL said...

@Carmy wrote: Does anyone wonder why Victoria can't attract the Hong Kong market that Vancouver does?

Does Victoria need an influx of immigrants to keep real estate prices propped up?

Carmy said...
This comment has been removed by the author.
HouseinVictoria said...

I agree with Carmy - Just Jack do you have nothing better to do with your time??

DavidL said...

Hmmmm ....

HouseinVictoria has the same Blogger profile as Carmy. Carmy - did you rename yourself?

* Gender: Female
* Astrological Sign: Taurus
* Industry: Law
* Location: Victoria : BC

HouseHuntVictoria said...

Just a little FYI, for those who seem to be knew around here or maybe haven't ever seen or remember my informal comment policy:

If you take things to a personal level around here, you will be deleted. I always* default judgment to the person who's been around for a while simply because they've contributed and "behaved" in the past, otherwise they'd no longer be with us.

*except when I don't.

Keep it about facts and opinions folks, leave the name calling on the schoolyard, it's not welcome here.

Animal Spirit said...

wow - nice bunfight.

troll radar on...

must not respond to troll

Just Jack said...

Here's some information about Oak Bay for those that are interested.

Oak Bay comprises 1,637 hectares and contains 6,700 homes. The population has remained steady over the last decade with 17,798 people in 2001 and 18,446 in 2009.

There are 68 homes for sale in Oak Bay with prices ranging from a low of $519,000 to a high of $11,500,000 with the typical home selling for $760,000.

The most expensive home to sell was reported at 10.5 million, but actually sold for less after some further negotiating. The five most expensive properties ever to have sold in Oak Bay have all been in Uplands and were for more than 5 million.

In the last 12 months, 211 homes have changed hands, but only 46 homes have sold since January first.

More homes sold in Oak Bay 10 years ago (271) when the typical price was $324,000 than sell today.

That's an impressive 135 percent increase in home prices. And the typical monthly mortgage payment has increased by 30 to 40 percent. Oak Bay is truly not the place for a first time home owner as substantial down payments are needed.

But that's nothing different than what Oak Bay was a decade ago. Low interest rates have just made the numbers bigger. Those people priced out of Oak Bay have flowed into the adjoining neighborhoods of Fairfield and Fernwood driving those prices up. Causing those areas to increase more in terms of percentage than Oak Bay. This happened in the last boom in the mid 1990's. The correction that followed put the neighborhood's back in balance to pre-boom levels.

So while there is a premium paid to buy in Oak Bay, that premium expands and contracts depending on whether the market is in a trough or a peak.

Timing is everything.

Just Jack said...

I think the multiple of income is always rising during a real estate run up. It doesn't mean that people are actually paying nine times their income. A lot of people have just been moving up the property ladder with bigger down payments from the sale of their last home.

However, the monthly payment they are making tends to rise slightly too. This has been compensated for with the lower interest rates which has kept this market going longer than any other, and that's why the multiple is so staggering. But fewer and fewer people are playing the game with the rising mortgage payments. When sales drop too low, the market becomes shallow and dysfunctional. We see this affect during the winter months when sales drop off. The fact that the sale anomalies were more sharp this winter than any other shows we are close to the tipping point. Having both a provincial and a federal election isn't helping things much either.

That Oak Bay has been so resilient to a price drop underscores its desirability. But only 211 sales out of an inventory of 6,700 homes (3%) shows how fragile the price base might be.

Eventually the economic pendulum swings back due to loss of jobs, confidence, etc. The high real estate rollers of today's market can't take advantage of lower prices because they are too loaded up with under performing properties. So that leaves the starter families to build up a down payment over several years and we start all over again with a multiple of 3 times income.

Just Jack said...

...Who doesn't like a good bun fight.

Sudden Valley said...

Most entertaining post in a while. Pew, pew, pew!

Keep up the good work!

patriotz said...

"The thing that strikes me about Victoria is how everything is close."

Actually it's very spread out for a metro of its population. Sidney is farther from downtown than any place in the City of Calgary, population over 1 million. And nobody claims Calgary is densely populated.

Ditto commuting, you can get downtown from the Calgary city limits a lot faster than from Sooke or Sidney. Of course having rapid transit helps a lot.

For its population, Victoria is hard to get around. Remember the whole metro has about the same population as the east side of the City of Vancouver.

a simple man said...

and Carmy's/HouseinVictoria's profile was made at the same time (July 2007), with the same number of profile views. To confirm they are the same person, I manually went back and forth to look at their profiles in different windows. Sure enough, their profile views increased concurrently.

And then to try to speak for all of us by telling JJ he isn't wanted here?

Wow. She/he is really trying hard to buck the Albertan stereotype.

But, I have a hard time believing anything this poster with split personality may say as he/she has already been rude to several regular posters and created multiple personalities.

Perhaps someone who has something to lose?

Just Jack said...

I think a lot of people are surprised to find that the City of Victoria is so small. The population is only 83,000 which is up from 74,000 in 2001. There are about 12,000 detached homes and 12,000 strata or condominium type ownership residences in Victoria.

In the last 12 months, only 360 homes and 1,040 condominiums/townhomes sold in Victoria (which also includes Vic West.) Only 80 homes have sold since the beginning of the year at a median price of $590,000. Which is down 22% in sales volume and only marginally down in price from $602,000 for this time last year.

About the same amount of condos have sold this year as last year which is about 240 units, yet the median price has fallen 7 percent.


We're not Vancouver, London or Toronto. Even if you include all of the surrounding 12 municipalities, Greater Victoria is the 17th largest CMA in Canada. Try to name all of the other 16 larger cities?.

When 4:30 rolls around, the city empties out to the Westshore and her bosom swells upwards from the weight of a hundred thousand vehicles, and all that is left in the motorist's rear view mirror is the twinkle of dozens of neon eyes proclaiming discounts on condominiums and retail space to let.

Victoria, she's old and in need of a new hip and infrastructure replacement, a face lift to get rid of the blue bridge eye shadow, and she suffers from a flatulent sewage system.

- but damn it she's my girl - varicose roads and all.

Or until I win the lottery then I'm over to visit that tart named Vancouver.

Just Jack said...

Let's compare sales volumes the week before to the week after the change in mortgage rules

The core districts had 58 detached home sales and 54 condo sales leading up to the change on and including March 18.

While the last week in March had 43 detached home sales (down 26%) and 30 condo sales (down 44%)

-Bummer.

I wouldn't be accepting any offers subject to the sale of a house in this market, unless there is a big non refundable deposit.

Just the other day, I was speaking to someone who just bought a home in the city. He just thought it would be a safer investment to own in the city than the westshore. He has made every tragic mistake when dealing with his real estate agent and ended up paying a hundred grand over the assessment with no subject to the sale of his house in the westshore that he admits is over priced.

I wish him the best, it can still happen.

a simple man said...

and remember, JJ - the sales differences may not really be seen for a month or more as they make their way from pending to sold. Even with the pendings there is typically a one to two week delay from the deal offering and it clearing conditions to pending.

Al said...

Although I never did it and would never do it myself, I think it is okay for one poster to have multiple net names, to show his/her multi-color, especially for the talented ones.

But it is very low and a big No-NO for one poster to use multiple IDs in the same debate to support himself/herself.

JJ likes to make fun of someone sometimes, but he is not racist and like the old saying, there is always half truth in any jokes.

I also want to say that I am happy that Carmy's post of Chinese investors didn't trigger any racist comments. That shows that posters here are decent folks with good sense (and humor).

Sweetrealtor said...

For what it is worth, I think HHV does a great job moderating the comments here.

I also think Just Jack adds a lot to the comment section and his statistical analysis always presents good food for thought. His style is obviously written with a tongue firmly embedded in his cheek. Sometimes this type of humour gets lost in translation and then the fur flies. I have no idea who he is, but I do enjoy seeing his perception of our market. (I get the humour too.)

JustWaiting said...

The reporters over at the Oak Bay News decided to call up last years VREB president, Randi Masters, for an in-depth analysis of the Victoria real estate market. Randi did not disappoint their readers...

Prices up, sales down in Greater Victoria housing market

"I am so glad it's not that heated frenzied market" of 2000-08, Masters said.

Randi - I bet you and your fellow agents are tired of writing full priced offers and cashing all those commission cheques. With sales down you can now sit at home or duke it out with the other 1100 agents looking to make a buck in this slow market.

JustWaiting said...

Over at the TC Carla just got back from a lunch with some real estate condo advertisers and did a cut and paste of a Remax press release.

Housing: new buyers drive sales

Lets take a closer look at some of the article...

Re/Max said 26 per cent of sales in the first two months of 2011 were for homes priced less than $325,000. Of those, 73 per cent were condominiums.

"A large number of Victoria's first-time buyers are spending over $300,000 for suites around 800 to 1,000 square feet," said Elton Ash, Re/Max regional executive vice-president for Western Canada.

Downtown Victoria is home to the majority of condo buildings starting at about $200,000 for 400 to 500 square feet, but demand by first-time buyers has fuelled construction in the suburbs as well.


David Chard, of Chard Development Ltd., said only 18 of the 115 condo units at 834 Johnson St. are left after a flurry of sales in the past six weeks, many in the $250,000 to $350,000 range.

"We have really been hitting the affordable market with this building," Chard said.


If you want to know where interest rates are heading don't read any economist reports or Bank of Canada predictions. Just listen to the current VREB president...

Recent mortgage hikes are not huge and have been expected, said Dennis Fimrite, president of the Greater Victoria Real Estate Board.

"I don't think they are going to go up very significantly in the next couple of years, so it is not going to dramatically affect people's purchasing ability," he said.

Leo S said...

@JustWaiting

While Carla's article contained the usual nonsense, I was impressed to see the analysis of how much income was required to afford different homes. Especially the fact that buying the average condo would require a $78,000 income if you wanted any sort of buffer for rising rates. So to buy even a middling condo you need a significantly higher income than the average household in Victoria.

Nice to see that spelled out in the media.

Waiting said...

It does seem that this listings are finally building a bit in OB. There are now several homes under $850,000. Still crazy prices (and some are flips) but they don't seem to be selling quickly. Given the prices the Larkdowne houses sold for I'm surprised the Oakdowne house hasn't sold. Has anyone seen it? I'll be interested to see if there are some price drops in the next few weeks. There have also been a few new listings today in South OB at significantly lower prices than the ones sitting at $899,000. Perhaps they will put some downward pressure on the insanely overpriced ones!

DavidL said...

MLS #291226 (2804 COOK ST)

It looks like someone is ready to walk away from their home renovation project. Does anyone know how much the house was purchased for?

omc said...

Yup, things are improving in Oak Bay, for the buyers. It is a very small market so things change radically. I would expect prices to drop through the summer this year. People are usually "hopeful" in the spring. I am expecting prices to show to be measurably lower than last year in this area.

I was thinking that I know of eight people that have, or are selling home that have been rented out this year alone (investment properties). Yet, I cannot think of anyone who has bought in Victoria as a pure investment for years now. Lots of people buying south of the border though.

I strongly disagree with using multiple online identities on forums like these. I was getting a feeling of attempted manipulation from our multi personality friend, and which is why I was a bit more than forceful about answering the affordability/banker BS. Multiple new people show up talking about prices rising, rich immigrants and people from Vancouver relocating here gets my BS detectors up.

Alexandrahere said...

With the small amount of bloggers contributing to HHV, I don't think we should have multiple identities. I feel over the year or so I have been reading and somewhat contributing to this forum, that I have gotten to "know" people here and how they think. I enjoy most of the commentary and know where the "substance" lies. Lots of info and lots of fun. No need for anything else.

Olives said...

When I was a first time buyer in the mid 1990's (with a fairly modest income at that time) I looked at many houses for sale in Oak Bay as many were in my price range. I doubt that's the case now.

I noticed last night the For Sale sign is back up on the Broadmead House - same real estate agent - but the addition of "New Listing" LOL

Olives said...

And I admit I had no idea either that Albertans were considered a separate race of people.

Introvert said...

I'm a former Albertan. I couldn't take the nasty Calgary weather any more. Fresh out of university I was offered full-time employment in Calgary; I declined. Instead I moved to Victoria with absolutely no job lined up, just a strong desire to live here permanently and make it work. Fortunately for me, it has.

As an "outsider" who moved to Victoria for its gentler climate, gorgeous scenery, small-ish city feel, etc., I feel I must not be alone. But who can say just how many of me there are? Did I/do I contribute, in some small way, to Victoria's inflated house prices (because I'm more than willing to pay a hefty premium to live here)?

DavidL said...

My brother was born in Halifax, grew up in Victoria, went to university in England, taught in the US, and now lives in Edmonton.

I guess this makes him "mixed ancestry". ;-)

DavidL said...

@Introvert wrote: Did I/do I contribute, in some small way, to Victoria's inflated house prices (because I'm more than willing to pay a hefty premium to live here)?

For as long as I can remember, Victoria has been a desirable place to live in Canada. This has meant that historical SFH prices here have been a bit above the national average (perhaps 3.5 times the local average family income, instead of 2.5).

It's not different here - it's just nice.

HouseHuntVictoria said...

There is one incontrovertible fact about Victoria: it's the city of the newly weds and nearly deads. Always has been, most likely always will be. I'm willing to bet dollars for donuts that there are more people of "career" working age "from" Victoria who move away than similar-aged "from aways" who move here and stay each year. Our population may be growing, albeit below the provincial and national averages YOY, but I think that's primarily driven by births and retirements.

I freely admit this is an extrapolation of personal anecdotal experience and could very well be wrong, but I know a heck of a lot more people that moved away from here for better opportunities than came here for whatever reasons in my peer group.

a simple man said...

Introvert - I am with you - I had terrific career prospects in the prairies - world-class research, etc, but just could not bring myself to stay there. I had more consulting work there than I could do in three lifetimes - luckily, I was able to bring a lot of it with me and develop new opportunities across Canada and the US.

The bitter cold of our final winter there broke my wife, who has all her family there, and when she finally said lets move to Victoria all you could hear was me sanding the walls to prep for the sale.

Victoria is special, and I will pay a premium for that. But like anything, premiums have a limit.

KelownaChris said...
This comment has been removed by the author.
a simple man said...

As much as I am one of Oak Bay's biggest fans, I have done a lot of hiking, walking and exploring around the GVD lately. I have to say that there are some absolutely beautiful places on the peninsula, in colwood, metchosin, langford, esquimalt, view royal, the highlands, james bay and fairfield. Really, a home in any of those places is like hitting the jackpot in relation to almost any other city in Canada. This is a great place to live.

As I said to my wife when we moved here - I would rather rent here my whole life than own back on the prairies.

Just Jack said...

Now, I have lived in many cities as well and my favorites are:

Whitehorse in the Autumn
White Rock in the Summer
Vancouver in the Spring
San Diego in the Winter

Places I'd like to go
Ottawa during Winter Carnival
The prairies during wheat harvest
Haida-Guai for a summer
Halifax in the summer
Calgary during the stampede
A dude ranch in the BC interior
Arizona in the winter

And how about Quebec in the Fall, an absolutely stunning palette of colors.

For years I had an office in Vancouver that looked out towards the North Shore and it was a city without color during the winter. Dark, gloomy and depressing. Victoria has those days too - just not as many as Vancouver. But when the sunshine came out - the city lit up like a gem stone in a pawn brokers window.

Victoria isn't unique - Canada is.
To say that Victoria is the place that everyone wants to live - is silly. Because, if everyone did then we wouldn't have the Victoria we have today, it would be an island filled with row houses and condominiums. Maybe in 20 years we'll have that.

Nancy said...

I know a lot of people who have left Victoria and some that came. Some people didn't like it very much, some people left for better jobs and some people missed family that lived in other places.

When I lived in Europe people were always trying to move to Spain and South of France even if they didn't speak the language. Especially the Brits.

Watching and waiting said...

DavidL:

If memory serves me correct, that house on Cook St (actually on the corner of Vista Heights)has been undergoing a reno for the past 10 years albeit very slow. I guess he realized the better list as the house next to him on Vista Heights mls 289975 is chasing the market down price wise. Get out before the bottom falls out? Speaking of which, anecdotally, a co-worker today noted that two of her neighbours listed in her culdesac. She will do a FSBO to capitalize on both sales as she is concerned that if she tries to sell next year, her neighbours will set the price point for that neighbourhood. My feeling is this will happen.Interesting as a house on Blair just sold for 515 (assessed 542), the next day, another home on Blair (corner of Blair/Shelbourne dropped their price). I'm excited - can't wait till the end of the summer.

Just Jack said...

Now, I have lived in many cities as well and my favorites are:

Whitehorse in the Autumn
White Rock in the Summer
Vancouver in the Spring
San Diego in the Winter

Places I'd like to go
Ottawa during Winter Carnival
The prairies during wheat harvest
Haida-Guai for a summer
Halifax in the summer
Calgary during the stampede
A dude ranch in the BC interior
Arizona in the winter

And how about Quebec in the Fall, an absolutely stunning palette of colors.

For years I had an office in Vancouver that looked out towards the North Shore and it was a city without color during the winter. Dark, gloomy and depressing. Victoria has those days too - just not as many as Vancouver. But when the sunshine came out - the city lit up like a gem stone in a pawn brokers window.

Victoria isn't unique - Canada is.
To say that Victoria is the place that everyone wants to live - is silly. Because, if everyone did then we wouldn't have the Victoria we have today, it would be an island filled with row houses and condominiums. Maybe in 20 years we'll have that.

Introvert said...

It's not different here - it's just nice.

DavidL, if you'll allow me to split hairs, I would argue that Victoria is different largely because it's nice. There aren't that many "nice" places to live in Canada if by "nice" we mean very mild winters, great scenery, city amenities, etc.--all in one package.

KelownaChris said...

"Victoria isn't unique - Canada is.
To say that Victoria is the place that everyone wants to live - is silly"
Ummmm - Victoria is very unique in Canada. I don't know of anyplace else like it...oh thats because there isn't. People love to live here - I think you are silly for not realizing that.

Just Jack said...

The only thing that could make Victoria better is if it were on the mainland. Or maybe a little closer to the equator, with not so much rain, like around northern California maybe say near Big Sur or Santa Barbara so that its not dark at 4:30 in the afternoon. And maybe on the east coast, so you'd have more choices to go on holidays without having to spend so much time on an airplane.

Maybe we can work a deal with one of the countries in the West Indies - like Cuba.

If Jacques Cartier had just turned left at New Foundland - I'd have a suntan by now.

jesse said...

Vic may be a premium place to live but that doesn't mean there should be a sustainable premium to own vis a vis rent.

Leo S said...

Slooow start to the week for the under 550k SFHs. 3 sales so far have showed up this week. 15 Sale price/Assessment average at 98%. The lowest since the dead zone last september. There definitely seems to have been a hit after March 18th.

For SFHs over 550k, the effect is not visible. Sale price/assessment is still hovering around 5 points higher at 103. Some logic to that, as the mortgage rules would likely affect the bottom end more strongly.

a simple man said...

Listings are starting to increase now...a lot of re-lists of houses pulled off the market in the fall/winter.

Saw the flippers out at the St Ann house putting lipstick on the pig - planting annuals in the front yard and staging it for the open houses this weekend. I have a feeling that if they don't sell it soon they will chase the market down for a long, long time. They should just get their money out and be happy with the lesson learned or risk getting burned big time.

Asking $300,000 more than they bought it for a year prior after some moderate quality upgrades and marginal workmanship, not to mention making it a 1 bedroom house on the main level, is lunacy. Pure unadulterated Oak Bay flipper greed.

I want to go see the Dunlevy house also recently flipped for a big profit - hoping my rant is somewhat different, but I doubt it.

Deanna said...

Looks like "my" realtors dropped me off of their PCS portal. Marco, can you hook me up with a new account?

Thanks

omc said...

Leo S, that is what I am seeing and was hoping for. No part of the market is immune when another part starts a drop. I have said it before; if houses in, say Arbutus, start to drop in price I will give up on Oak Bay and look there. Thats how it works.

Watching and waiting said...

Deanna,

The portal web page appears to be down this a.m.

a simple man said...

my portal is down as well. So no need to panic, Deanna. And your realtor will pretty much never cut your off - they depend on your for their paycheque, which is increasingly harder to find.

Just Jack said...

Now that listings are starting to build, I'm finding homes in areas that rarely come up for sale.

I don't know how many on this blog have ever been to Piers Island, just off Sidney. Its a small community with a dirt ring road, only a few cars allowed. There may be like only 30 or 40 homes there. Kids go to school by water taxi. 3 are up for sale today. And only 4 homes sold in all of 2010 there. You can buy waterfront there and still have gas money for your cigarette boat.

Man, that's unique. You can buy waterfront there with a dock at the price of a 1950's fernwood home.

Deanna said...

Oh well then, now I feel silly. It has been almost exactly a year since I last spoke to them; seemed timely when I couldn't hit the site.

Thanks for the info, all!

Mindset said...

You know, I drop in here once in a while and I have to say, this post was the most entertaining read I have had in a while... great characters, emotional conflict ( Oak Bay Faux-Brits vs Sooke Money-Baggers / Alta truck 'nutters' vs BC Bud), a great twist (Carmy's double identity), and some actual legitimate debate to leave you thinking.

Nicely done folks. Good times.

a simple man said...

I've noticed this week that the mainstream medial has been on a full-court press trying to convince people that this is a good time to buy.

Every day there has been an article directed towards the "there are still affordable homes in Vancouver (suburbs and condos)" or "first time home buyers making a significant surge in purchases" or that "Canadians under 35 most intent on buying homes: survey", etc, etc.

I smell desperation.

DavidL said...

@ a simple man

I read an interesting quote attributed to Nouriel Roubini in regards to the US housing crisis on 2006-08-26:

Eight Market Spins About Housing by Perma-Bull Spin-Doctors... And the Reality of the Coming Ugliest Housing Bust Ever...(RGE Monitor)

"A lot of spin is being furiously spinned around–often from folks close to real estate interests–to minimize the importance of this housing bust, it is worth to point out a number of flawed arguments and misperception that are being peddled around. You will hear many of these arguments over and over again in the financial pages of the media, in sell-side research reports and in innumerous TV programs. So, be prepared to understand this misinformation, myths and spins."

a simple man said...

@ DavidL;

Thanks for the comment. The way I see it is the more they spin these weak arguments, the worse the situation truly is for them. If they had hard data we would see it everywhere, but we don't.

The fact the spin is becoming so pervasive makes me believe the top of the bubble is close.

Unfortunately, the majority of people that read the media don't fully realized the complicity between advertisers and media.

It is grass-roots websites like this one that allow a few people freely debate all sides of the real estate situation.

Thanks HHV. Thanks to those that write here that support the notion that RE is overvalued in Victoria. And thanks to those who post here that also think that RE in Victoria is doing just fine. It takes thoughtful, respectful discussion from all sides before one can truly appreciate a problem.

a simple man said...

I wonder if we could somehow find out how much the RE industry pays to the TC for advertising and how many dinner, lunches, vacations, etc make their way to the staff?

SJ said...

Just Jack. Yes, I noticed the listings on Piers Island a little while back too. Seems like such a bargain for waterfront. I wonder what it would be like to live there - when you say the kids go by water taxi, is that a service to and from the island, or would you need your own boat? I think the only problem living out there would be the feeling of being cut off from the rest of the "world". I wonder how many live there full-time?

Nancy said...

There are 108 homes over $1 million for sale.

There are around 21 in the $900 for sale. This is all over Victoria, E. W Saanich Prospect Lake, Elk Lake etc.

Nothing is selling. Looks like it did in 2008.

Just Jack said...

I wanted to look at desirability of one area versus another. So, I thought how would I do that. There are different, sized houses, lots, views that would make any comparison silly. So how about a "benchmark" type of home with physical characteristics made up of the most common elements.

And I chose a pre 2000 built home having between 1,500 to 2,500 finished square feet, located on a 6,000 to 8,000 square feet lot.

I ranked them from highest to lowest price and I found that

5 out of the top 10 most costly "benchmark" type of homes are located in South Oak Bay

3 out of 10 are in Fairfield

2 out of 10 are in Cadboro Bay


I don't know if this would conclusively prove that South Oak Bay is the most desirable neighborhood in great Victoria because the data set is so small.

But if you live in Oak Bay, you definitely get bragging points as 5 out of 10 moneyed people prefer Oak Bay over any other area in the urban core.

I just can't figure out how to get this all on a bumper sticker. How about...

50% S.O.B.

think said...

wow - tons of new listings on my PCS and NOTHING selling... I've never seen it like this (well not since 2008) - I think we are crashing - anyone else noticing the same thing?

Waiting said...

@think Don't jinx it!!
But, yes, I did notice the same thing...tons of new listings the last couple of days and the only sales were Warren Gardens (some sorry sucker paid a premium) and a couple of places in Cordova Bay.

Just Jack said...

Victoria hit 107 listings and Oak Bay made it to 72 houses for sale. For the last month both were hovering around 10% less say 97 and 65.

Close to four months inventory in each city. The quantity has increased and I think the quality of what is being listed is better too. Just because, I catch myself saying "Yeh, I could live there" more often.

Nancy said...

Lets make that 110 listings over $1 million. Every time I go back to my computer there is a new listing. They are still asking big for money POS houses. Some are nice though.

MC said...

oh Alberta "racism". There seems to be a chip on Victorian's shoulder towards Albertans, either real or just jovial fun - either way it gets a bit tiring. We do bring lots of money out here. As for Victoria being unique, heck yes its unique. I have never been to any place that is like this - it is its own little world... and heaven forbid you tell anyone that there is anything better than 'this' world, or that you want to change a part of it. Which leads me into my question:

There are a large amount of very old homes (western standard) that are in poor shape in Vic - I am wondering what are the major barriers to people demolishing and rebuilding new ones?

I am curious why, with all the supposed money out here that people have to spend on crap houses, that more new houses are not being built?

Mindset said...

Just a refinement point JJ on MOI, but if sales slow significantly and inventory even sits where it is, MOI can really shoot up. It's still too early to call the first quarter of the game, but it looks like listings are increasing *and* sales are dropping. Will be interesting to see what a month or two brings.

On a related side note, I ended up chatting with a senior rental management company lady recently. She told me that the number of available rentals they have has really grown in the past six months and they have an unusual amount of inventory they can't fill. Does this mean that the 'option' of renting a property to wait out market changes is diminishing?

I also have two friends that have had empty suites for a few months now. Perhaps the ability to subsidize a mortgage with a suite is diminishing due to over-saturation as well? I know it's not very quantitative, but things are starting to feel different out there....

Al said...

There are new houses being built, blocks of them, in suburb areas like Langford.

In core area, there are just not much land left to build and the lots are generally very expensive, that is what the price, and the property assessment value mostly for, the land value.

No one likes crap houses, but the block suburb houses by builder like in other cities are generally not that attractive either, other than they are new (and perhaps big)

A simple man had a nice house plan that is not very big and a bit arts and crafts like, and would fit in most Victoria streets nicely, but that only makes sense if the lot price is below $350K. Fat chance getting one in the core area, regardless there is a house on it or not.

Trilobite said...

omc,

Many thanks for sharing your impression of the Broadmead house! That's really good to know.

As for Victoria being special, I've lived in several European and Asian countries and in certain ways, I do think Victoria indeed is special. So I don't think it's unreasonable to have a bit of a premium. But that is a relative statement. As many have argued well on this blog, prices do seem unsustainably high.

a simple man said...

I agree that the lot prices in the core are what is keep the old stock of housing too high - that and the "character" junkies that will pay a hefty premium for a well-kept 100+ yr old home.

Plus, there are new building regulations in place such that if you tear down an old home, the new home you can replace it with most often must be considerably smaller in footprint (in Oak Bay at least).

In my daily walks around Oak Bay, I see numerous new houses going up - so the tide must be turning somewhat. There seems to be a lot of new building in the Uplands 3-4 new builds I know of, and a number of new builds in Oak Bay, although mostly are developers looking to make big money - if the market turns quickly they will be left exposed.

My wife and I are constantly going back and forth between building new and major renos. I know I would far prefer a new foundation with modern coding for everything, but right now that is a lot of money with decent lots at $600K+.

But, the tide is turning and I may still have my modern eco-palace.

commuter12 said...

People read Just Jack's comments? For real? I just scroll on by personally.

SilverSurfer said...

Please keep up the humour and the informative posts JJ.

Meanwhile,in the real world outside our little Island:

* US gov about to shutdown due to budget disagreements. 800K people would stop receiving pay cheques, but the tax collectors will keep working.
* Japan gets hit by another 7.1 Earthquake and the Fukushima situation continues to worsen
* Portugal admits to bankrupcy and seeks an EU-IMF bail-out. Keep an eye on Spain,they may be next in a few months.
* ECB raises Euro-zone interest rates while simultaneously pushing weaker countries into deeper austerity measures.
* Chinese inflation keeps going up, and likewise for their interest rates. T-? months before massive real estate collapse?
* Lybia's rebels aren't exactly '#winning', so will we see UN boots on the ground soon? US #3 war soon?
* Brent crude crosses $120/barrel while WTI crosses $111.
* Gold at all time historic high $1472 USD
* Canadian dollar broke $1.05 USD today (yay for us...those Arizona, California, Florida.. oh heck, all of the US real estate just keeps getting cheaper!)

Oh right, and silver just hit $40 this morning. That's another $30K for me to eventually invest in Victoria real estate. Next stop $50 - give it a month or two.

a simple man said...

^^ ha - good try, Carmy! Who will you be tomorrow?

Keep up the entertaining and informative posts, JJ!

Marko said...

"and a number of new builds in Oak Bay, although mostly are developers looking to make big money - if the market turns quickly they will be left exposed."

Even thought there is a developer sign out front most of these homes are built for owners by builders so there is very little risk to the builder.

Abstract Developments builds and sells a lot of high-end homes but a lot of their business is also for clients who purchase the land and have them build.

Issues are starting to become multifactorial and it will only get worse. First and foremost a lot of potential teardowns are purchased by first time buyers who are willing to pay than the builder.

Secondly, WCB is on a massive push regarding asbestos. Esquimalt for example will not give you demolishment permit or building permit anymore without a environmental report. So while you paid 400k for the teardown there is the risk of a $10,000 to $50,000 abatement before you can even call the excavator to demolish.

Dumping fees (after you have removed the asbestos) are large. Your are looking at $150/ton or more and only to increase. If you don't know what you are doing and you buy a 100 ton house to demolish that is $15,000 just to dump it WITHOUT excavator costs or trucking.

Now you need to go the city and pay for building permit and fees. About $17,000 in the City of Victoria for the building permit itself, sewer, storm, and water connection.

There are other things which has been introduced in the last 5 years which I am not going to list but a typical example is 5 years ago you could do a spec house in Victoria without engineer and now you have to hire an engineering for a spec house ($$). Also new required seismic walls and other code upgrades have driven the cost to build up.

If you buy a $400,000 teardown you could easily be looking at $500,000 before you start building.

Marko said...

In my opinion, if we have a market correction people will stop building versus being able to build for significantly less. There are so many fixed costs to building now that I can't see it going back....

What is WCB going to say? Okay real estate market is hurting let’s just stop this asbestos push?

And the City is going to say, don't worry about the engineer we'll go back to our old policies of not needing an engineer on a spec home?

And the HPO will say, don't worry about the $2,000 home warranty we are trying to make things affordable again?

Not going to happen.

a simple man said...

thanks for the info, Marko - I really appreciate your perspective on these matters.

Waiting said...

@marko Are there a lot of additional costs to doing a major reno that I may not know about? By major I'm talking stripping down to the studs to inspect and upgrade wiring, plumbing etc, insulate, drywall, and finish but not necessarily add an addition or so any foundation work. Would I still require engineers reports/asbestos studies for that sort of reno? I want to know what I'm getting myself into before I start. (if I ever buy!)
Incidently, my parents are building on the gulf islands currenty and they have found that costs of building have increased and that there are many hoops to jump through but all in all have found it reasonable. Not sure how the gulf islands compare to building in OB though.

Olives said...

Re: Building Costs

While there are some that will not change or increase, in a deflationary period the cost of labour and materials could decrease dramatically.

Marko said...

"Would I still require engineers reports/asbestos studies for that sort of reno?"

WCB is going around forcing municipalities to require environmental studies before building permits. North Sannich and Esquimalt have implemented this and it is only a matter of time before Victoria and Sannich do. So to answer your question, yes it will most likely be required. If the plaster comes back positive and you have vermiculite in the attic your are screwed, sorry to say.

What you intend to do is tougher then building a new home. The city inspector might find issues with the foundation, framing, fire code when he comes to take a look at it. You can't gut a place for just the purpose of putting in new wiring, plumbing, and insulation; they will want other aspects of your 50+ year home upgraded to 2006 building code.

Lots of variables unexpected variables - let’s say you want to put in another bathroom and the plumbing inspector determines that your 1/2'' line from the street is not adequate. $3000 to city to put in a new 1'' line plus plumber....the surprises are endless.

Secondly many things in an older home will not be level or square making things difficult.

"While there are some that will not change or increase, in a deflationary period the cost of labour and materials could decrease dramatically."

Global market for a lot of things. You are essentially betting on a global recession. I don't see something like oil going back to $50/barrel and that is a large cost in construction (trucking, machinery).

Labour - people aren't going to drive a dump truck in Victoria for $10/hr when they can do the same thing in Alberta for $23-30/hr.

Leo S said...

What percentage of houses do you reckon have asbestos in Victoria?

Just Jack said...

Marko, I think its just a sign of the times. People that own houses are perceived as being wealthy, so let's tax them and penalize them.

Archeological assessments, Asbestos assessments, dumping fees, engineers reports, more fees, etc, etc.

These costs will never go away and will continue to increase over time.

The city needs money. However, raising property taxes by the full amount may cause a problem at the voting booth. Better to raise the utility bills and have extra fees.

Understandably if a person can shell out over half a million dollars on a house, they can easily pay a lot more in taxes than they do today. So I can see things like property taxes and utilities doubling in the next few years as well as these "tax like" additional charges.

Victoria is a desirable city to live in, so there won't be a shortage of people willing to pay extra to move and live here.

This morning, I took a run through the Cherry blossoms, where else in the world can you do that in April. How can you put a price on that. On a day like today, whatever we pay in taxes and fees is cheap.

Marko said...

"What percentage of houses do you reckon have asbestos in Victoria?"

Well WCB considers anything over 1% asbestos content asbestos.

Anything built before 1980 (although now I am hearing 1990 starting to pop up) I would estimate probably like 80% of homes have SOMETHING with asbestos content. Please keep in mind I am not an asbestos expert although I did write a few papers on it when I was in Respiratory Therapy School.

The big ones are vinyl flooring, plaster, vermiculite, insulation around chimney stacks, asbestos siding, etc.

The "small" ones could be maybe asbestos tape around ducting, thermostats, etc.

A 10x10 kitchen vinyl floor is probably in the neighbourhood of $5,000 to remove.

If you wanted to gut a house with plaster asbestos positive walls it would cost a small fortune.

Only certified companies can do the abatement, there has to be air quality testing done multiple times, the asbestos has to be bagged, the person transporting it to the dump has to have a license to transport asbestos, etc, etc.

Personally I would like to see WCB release some studies noting that 1% asbestos content is harmful.

Just Jack said...

There is a beginning effort to have the homes in Victoria to have an energy efficiency rating. You may have seen this on the real estate boards listing as an energuide rating.

The banks and the city tax departments are going to jump on this one.

You pass on an energy star rating you get a small discount in the interest rate.

But, I can also see it as a way to levy a tax on homes that fail the rating. Only a fraction of homes that were built more than 15 years ago will pass the energy rating. So I can see this as being a way to generate more taxes and encourage people to upgrade their homes.

If you think your home will pass the rating. Go check your furnace. If there is not an affixed "Energy Star" label and the furnace is not rated above 85% - you failed.

No Energy Star label on your windows - you failed.

And I think this is the right thing to do. Inefficient energy homes should be taxed more.

DavidL said...

@Just Jack wrote: And I think this is the right thing to do. Inefficient energy homes should be taxed more.

Maybe I'm missing something - why do you think that they should be taxed more?

Olives said...

"Global market for a lot of things. You are essentially betting on a global recession. I don't see something like oil going back to $50/barrel and that is a large cost in construction (trucking, machinery).

Labour - people aren't going to drive a dump truck in Victoria for $10/hr when they can do the same thing in Alberta for $23-30/hr."


From the news I have been reading the past few years it looks like the world has entered that global recession, albeit different areas are at different stages, with some places (including Canada) certainly trailing. I get the impression that many people in the U.S. are pretty happy to be working for $10.00 per hour right now.

Wasn't oil just $30.00 two years ago? It can certainly change quickly. The global economy is anything but stable right now.

Leo S said...

Thanks Marko. Interesting stuff.

A 10x10 kitchen vinyl floor is probably in the neighbourhood of $5,000 to remove.

Had a friend buy a place recently with vermiculate in the attic. The building inspector told them off the record that most people just do it themselves and fly under the radar instead of paying the big bucks to have it done.

DavidL said...

@Leo S

Likewise, an ex-coworker in Duncan discovered vermiculite in the attic while doing renovations. The test results showed high asbestos levels. She and her husband did all the work themselves in about 5 days. The removed all the insulation, got it properly disposed of at the dump and reinsulated the attic for a total of $6000. They had been quoted $30,000 by a contractor. She said that wearing the hazmat suits gets really sweaty after a while ...

DavidL said...

@Marco wrote: A 10x10 kitchen vinyl floor is probably in the neighbourhood of $5,000 to remove.

Twenty years ago when renovating his late 1950's kitchen, my father discover that the linoleum tiles were asbestos-laden. As it was going to be extremely difficult to remove (due to this black rock-hard adhesive that bonded with the oak floor beneath), he sealed the floor and installed a laminate floor on top.

I doubt that WCB would allow this approach nowadays ...

Just Jack said...

Well DavidL, if you tax inefficient homes that would propel people to upgrade. This stimulates the local economy creating wealth and the need for more housing.

When you build a factory, you create jobs for decades. When you build a house, you create jobs for 6 months at a time. But, if you can make it that the homes must be continuously upgraded, you can stimulate the economy forever.

This is a better way than penalizing new construction or home renovations which would have the affect of people not upgrading their homes and the city would loose jobs.

And, since most of our homes would not meet the guidelines, the city would get a windfall of taxes to pay for much needed bridges and infrastructure.
Since most people who move to Victoria, come here for the environment, its something that can be easily capitalized on.

If you argued against reducing our carbon foot print and the use of foreign fossil fuels or the greening of the city, then that would be unpatriotic maybe even pro-terrorist but most certainly you would be one of "them". And remember what you move here to get away from. Do you really want to go back there? You're now living in one of the most special places in Canada - and it costs money to maintain that specialness.

And besides it saves the home owner money with less fuel costs.

We just have to end the old fashioned thought that when you pay off your house, that's an end to most of your monthly expenses. Victoria has a large stock of housing - why not use that stock to create jobs.

People who have a lot of money move here - and the city is entitled to get as much of it as possible.

a simple man said...

So, for Oak Bay - buy asap and tear it down quick!

Craig said...

"Well DavidL, if you tax inefficient homes that would propel people to upgrade. This stimulates the local economy creating wealth and the need for more housing."

This is ridiculous. Taxes don't create wealth, it redistributes it, in this case from the private productive sector to the public unproductive sector.

If you were right, we should just raise the HST to 50% and upgrade ourselves into riches.

As for dismantling the modern industrial economy because the human component of CO2 (about 3-5%) may effect the CO2 component of the atmosphere (about .04%) that theory has run headfirst into something called empiricism. Seriously, you need to stay current with your manias.

nan said...

@ Marko:

"Labour - people aren't going to drive a dump truck in Victoria for $10/hr when they can do the same thing in Alberta for $23-30/hr."


I could make twice what I make in Vic if I moved to Alberta (i'm in Finance) Part of living in Vic is taking a large part of your compensation in nice weather and quality of life.

All those charges that you list add up to half what an average house in Vic cost 10 years ago. Real wages haven't moved an inch in that time. This is not sustainable and will not be born by me or other future house buyers for the simple reason that I refuse to pay it. If I ever find that stuff in a house I am interested in, I will require that the seller pay it, which will drive house prices down. Period.

PS: Municipalities in Victoria need to be consolidated. These rules are ridiculous.

Marko said...

Things such as raw materials don't care what real wages have done in Victoria in the last 10 years, nither does WCB, the city, the building code, or HPO.

"If I ever find that stuff in a house I am interested in, I will require that the seller pay it, which will drive house prices down. Period."

You can't require the seller to do anything and how many sellers will let you cut out 10 samples out of their home to have it tested for asbestos especially in a well kept older house? good luck.

a simple man said...

If that's the case then all houses older than 1970 just lost $50,000 in my eyes, since I have to assume that there is an asbestos worst case scenario.

Asbestosis is a wicked, wicked death. I would make sure every fibre was gone before my kids' little pink lungs entered the house, lest they get a date with Marko in the spirometry lab.

Just Jack said...

This is ridiculous. Taxes don't create wealth, it redistributes it, in this case from the private productive sector to the public unproductive sector.

--------------------

Absolutely right, I want to take it out of your pocket.

I want you to get so mad that you'll call a contractor up to put a new furnace in, new windows, etc so that you don't pay that tax. Because right now our property tax system rewards those that do not improve their properties by giving them low taxes. And penalizes, people who upgrade their homes and increase the value of their homes with higher taxes.

And a higher energy rating will make your home more valuable to a lot more people and increase its value.

If your right about the Carbon Dioxide wonderful, the world is saved. But, it doesn't matter, the point is to get into your pocket and have you spend in the local economy. So as long as the government can get you to buy bi-cycle helmets, baby car seats, organic products or scare you into house alarms, car alarms, airport detectors, $180 tickets for using your cell phone, the economy keeps rolling.

If someone can own a $600,000 home, then $6,000 a year in property taxes to live in the best part of Canada is not outrageous. A lot of people want to live here and are financially able and willing to pay for a clean and green city. The fact that you rarely have to shovel snow is worth at least half of the taxes alone. When people are willing to take less pay to live here, then they will also be willing to pay more in taxes. Not everyone is entitled to live in paradise.

Al said...

JJ said: "The fact that you rarely have to shovel snow is worth at least half of the taxes alone."

Actually the fact in snow covered cities is that not only you have to shovel the snow on your driveways, you also need to pay more taxes to get all the roads cleared as well. How much more? In Ottawa, double amount of the property taxes as in Victoria for the similar size houses.

DavidL said...

@ Just Jack wote: If you argued against reducing our carbon foot print and the use of foreign fossil fuels or the greening of the city, then that would be unpatriotic maybe even pro-terrorist but most certainly you would be one of "them".

Huh? One of "who" ...

And remember what you move here to get away from. Do you really want to go back there? You're now living in one of the most special places in Canada - and it costs money to maintain that specialness.

Don't forget about those of us who are born and raised in Victoria (like myself). Or should only wealthy people who move here from elsewhere be able to afford a home?

As for it costing money to "maintain that specialness" - I don't buy this argument. Historically, house prices in Victoria have matched those is most other "desirable" locations in Canada - typically 2.5 to 3 times the local family annual income. Housing costs in Victoria have only exceeded this ratio in 1978-1981 and since 2003. However, this has been the case in many parts of Canada over the past 8 years.

DavidL said...

@ Just Jack wrote: Well DavidL, if you tax inefficient homes that would propel people to upgrade. This stimulates the local economy creating wealth and the need for more housing.

Let's compare this taxation approach to how well the introduction of the provincial carbon tax on affected gasoline consumption. The province's per capita consumption leapt from 1,022 litres in 2008 to 1,117 litres in 2009, a near 10 per cent increase. (source: http://thetyee.ca/News/2010/07/01/BCGasHog/)

In this case, the tax was likely not enough to change gasoline consumption. Most people just grumbled about the tax and kept on driving around gaz-guzzling vehicles, etc.

Interestingly, it has only been due to international "upheaval" and a slowly declining oil supply (peak oil?) that appears to get some people to reconsider once gas prices exceed a physiological threshold ($1.50 per litre?).

Even then, those with money prefer to maintain the status quo and just pay the increased cost after uttering a few expletives.

Bringing the discussion back to houses - how much extra annual tax would be enough for homeowners to consider paying for upgrades. An extra $500, $1000, or $2000 per year?

DavidL said...

@Just Jack wrote: I can also see it as a way to levy a tax on homes that fail the rating. Only a fraction of homes that were built more than 15 years ago will pass the energy rating. So I can see this as being a way to generate more taxes and encourage people to upgrade their homes.

OK ... let's use my 1979 built, 2400 sq. ft., 4 bedroom house as an example to see if this is practical.

[1] The exterior walls of my house are built with 2 x 4's and has fiberglass insulation. I'm told that an "R12" rating is the highest I could hope for, whereas a new home with 2 x 6 contraction should surpass an "R20" rating. The only practical way to improve the insulation without removing all the exterior walls would be to apply foam sheets over the existing exterior stucco and install hardieboard over top. (No idea of the cost - but I'm guessing $20K to $30K).

[2] The current attic insulation is bats of fiberglass with cellulose fibre blown over top. I'm not sure what the current "R" rating is, but removal and replacement of the current insulation would cost about $5K.

[3] I've got aluminum frame double paned windows that need replacing if I want to install some nice low-E windows. This will help keep cool in the summer and keep warmer in the winter. Oh yeah, and they need to fit my nice new insulated walls (see #1). Estimated cost $12K to $15K.

What about replacing the current heating. Well, as is typical for a late 1970's home - my house is heated with electric baseboard heaters. Years ago, I installed programmable thermostats to individually control the temperature in each room. When the wife, kids and I are at home, the temperature is set to 18 C, at night the temperature is set to 13 C (except bedrooms at 16 C). How much do I currently spend on heating my home? Just $600 per year.

Estimated annual savings after spending about $40K to make my home more energy efficient: $150/year. In 267 years, I would break even from my $40K "energy efficiency" investment.

Incidentally, what in the carbon footprint of $150 of hydro-electric generated electricity?

-------

Don't get me wrong ... I'm all in favour of reducing my carbon footprint. I've been warning my wife that my "mid-life crisis" car has a plug on it ...

Leo S said...

Things such as raw materials don't care what real wages have done in Victoria in the last 10 years, nither does WCB, the city, the building code, or HPO.

Not directly, they don't. But indirectly they will. If the prices really do remain high and wages don't keep up then people will start moving away and drive down the cost of land. Taxes can also go down if they are seen to be stifling growth.

I don't buy that rising building costs will counteract a decline anyway. The cost of building is going up everywhere in the same way and yet all those markets still declined.

Just Jack said...

As Al said, we are not taxing Victorians enough, in Ottawa they are paying twice the taxes we do for a similar sized home.

Victorians should be paying more to live in this unique city, not less. Perhaps we should pay less for houses and more for taxes.

When 1940's homes are double the national average or more, only those worthy enough should live in Victoria. We don't have to make moral decisions on who gets to live here. The economics of living in the second most expensive city will do that. If you want to live in Victoria, then you should not have chosen to be poor.

Obviously, since 2003 the world has discovered Victoria. Since the wealthy have only just started flocking to Victoria, that is why we are 8 or 9 times income. As the wealthy begin to become the majority that ratio will drop back to historical norms. Its the poor and middle income families, that are holding Victoria back from reaching its historical norm.

Any "green" tax on homes, will have to be large enough to make older homes non economical. So say every 25 to 30 years the houses would be demolished and new ones built. This will keep prices rising continuously in Victoria and maintain our world wide status.

If done properly, we would not have to rely on tourism, high tech or any other type of industry. Housing would provide all the work needed to keep the economy rolling. Since there would be so much increased activity, there would be only one vocation necessary in the city. Everyone would simply become real estate agents.

MC said...

"Not everyone is entitled to live in paradise."

*barf*

That statement in itself is one of the biggest cons working against this 'paradise' -- that holier than thou attitude...

DavidL said...

@ Just Jack
I appreciate your humour... I think that other posters who haven't known you as long are going to take your most recent posts seriously.

Watching and waiting said...

Unfortunately I am tied up at kid's soccer tourneys all day and can't do the open house thing. Would be interested in hearing anyone's feedback from any open houses they attend today.

I see mls 287514 on Craigmiller just dropped their price 30k to 599k- good thing cause another house on that road just listed at 599k mls 291331. Mls 287514 is another obvious staged flip that the seller opted not to reno the basement leaving it in it's original state.

Just Jack said...

Thanks DavidL, it was just a modest proposal.

Rambling Man said...

Just Jack, I have a business venture that you might be interested in, but right now I just have a tag line:

Darwinian Real Estate: Keeping the Morlocks of Canada away from the Eloi of Victoria since 2011!

The idea is to screen potential buyers based on genetics (which should go hand in hand with personal income) to preserve our unique and care-free way of life.

To keep things interesting, we would hold gladiatorial competitions for non-Islanders where the grand prize would be a Bear Mountain condo, or perhaps a bungalow in Esquimalt somewhere.

Just looking for a little VC to get started!

MC said...

joking or not, you can't deny that that attitude I was referring to is a bit too common in Victoria, no?

a simple man said...

I really have not experienced that attitude even once in the real world here since moving here almost two years ago. We have been welcomed into the community and have a larger network of good people than we have ever had.

omc said...

I just realized Friday went by. Usually there is a spurt of sales showing up on a Friday, just a drip this time.

792 Newport just sold at $70k less than their lowest price of last year. I don't remember how high they came to market.

Anyone who panic bought in the last few weeks in Oak Bay has major pie on their face as the stuff that was on the market at the time was crazy priced. If the house at 735 Byng sold for anything more than $780k, the new buyers are complete morons. If it is sold, they were asking $900k. They don't seem to be doing any more showing.

Be prepared for a bit of a surge in listings in the south Oak Bay area as I am noticing a number of houses that appear to be prepping for sale. I guess that is what you get in Oldieville; if you don't like the market, wait a bit and it will change.

Animal Spirit said...

HHV, Reid, Patriotz anyone else in the know:

When calculating the amount of gross income to put to retirement / long term savings, should one include (a) person amount contributed to pension, (b) company amount contributed to pension; (c) neither; (d) both (a) and (b).

kind thanks
animal spirit

patriotz said...

Spirit, I am not a financial planner. I manage my own RRSP and that's all I know about pensions really.

There are so many fixed costs to building now that I can't see it going back....

Thanks for the laugh Marko. That's what they say at the top of every bubble. And what happens when the bubble pops? Land prices go down A LOT, because it can't be sold for more than builders are willing to pay, and labour costs go down, because construction workers can either take less or not work. And construction materials generally go down too.

Watching and waiting said...

I see 4043 Copperfield Lane just sold (pending sale) for 597k original asking price 619k. A new low price for this 2006 subdivision I recall most homes in this subdivisions have been selling 630k to 650k of late.Now my PCS account does not go back too far but does anyone know what these homes were selling for back in '06?Was it 500-550K?Granted they are strata so priced lower than a freehold property IMO.Not interested in buying here but I see it a my canary in a coal mine to chart price drops as each subsequent seller appears to be chasing down the market with price drops and sales.

patriotz said...

I do think Victoria indeed is special. So I don't think it's unreasonable to have a bit of a premium.

What kind of premium? A premium of prices to rents? Victoria has the same interest rates as the rest of Canada, so why shouldn't rental yields be comparable?

You think investors will always be able to sell for a higher price to make up for the low yield? What's that called?

If you're talking a premium of rents AND prices (proportially) to incomes, Victoria has always had that.

Leo S said...

Sale Price/Assessment for SFHs under 550k. This "blip" is going on for a while...

Jennifer said...

Animal spirit, pensions are very not easy to understand but are an incredible benefit as they pay out a guaranteed amount regardless of market performance or how incompetence you are at investing. If you have a defined benefit pension plan consider yourself to be extremely fortunate. If you work for the Provincial or Federal Government and have that pension is based on your highest income years and is indexed once you retire you have won a mini lottery (literally). I suspect 25 years from now there will be a big division in society; those that have had these pensions and those that did not and put all their $ into houses instead of their RRSP’s and TFSA’s.

To answer your question, I would include all payments towards your pension as retirement savings regardless if you or your employer paid them.

DavidL said...

@ Leo S

Great chart! Thanks for tracking this information ...

DavidL said...

@ Jennifer wrote: I suspect 25 years from now there will be a big division in society; those that have had these pensions and those that did not and put all their $ into houses instead of their RRSP’s and TFSA’s.

I wholeheartedly agree ... My wife and I have resisted upgrading to "granite and stainless" so that we can [1] pay off our mortgage, and [2] save for retirement. A lot of friends and neighbours have great-looking homes, but with a huge debt load to pay off over the next 20 to 30 years.

Al said...

Another major benefit about those government (and teachers') pensions is that the pensioners got to keep their medical/dental/drug/eye care coverage when retired. They do pay a bit fees, but these group plan fees are much much smaller than individual fees for those retirees without the pensions, for the same coverage.

Note there is only 30% Canadians who have some types of DBP, and the percentage will only get lower as companies are trying to get out of them and move to DCPs (defined contribution plan).

So for those are are with government jobs, you are very lucky. Stay put and support for tax increases and pray no benefit cut in the future.

JustWaiting said...

George Athanassakos is a finance professor and holds the Ben Graham Chair in Value Investing at the Richard Ivey School of Business, University of Western Ontario.

Here is what he wrote in the Globe and Mail about the future of Canadian real estate...

Signs point to a severe housing correction in Canada

I believe that Canada’s high house prices in relation to incomes, combined with record household debt levels and overinvestment in residential construction, will cause a severe correction in the real estate market.

Home prices are simply way out of line, especially when viewed in relation to household income. The ratio of house prices to income has historically averaged about 3.5 in Canada. It now stands at about 5.5. It is difficult to see how income growth in the future can bring this ratio close to the historical average within any reasonable period – so it follows that house prices will have to decline.

The current consensus is that Canada’s real estate market has achieved a “soft” landing and that prices will flat line but not decline substantially over the next several years. I disagree. The housing market in Canada is already in bubble territory. Average house prices have doubled in the last 10 years, while rents have risen by only about 30 per cent. The ratio of house prices to rent is now higher in Canada than in any other developed country.

An even more powerful indicator also points to a severe housing correction in Canada. Residential housing investment as a percentage of GDP was 6.48 per cent in 2009, down slightly from 6.76 per cent in 2008, after peaking at 7.13 per cent in 2007. The previous peaks were at 7.26 per cent in 1976 and 7.18 per cent in 1989 – and we know what happened to the housing market in Canada in the early 1980s and early 1990s. After residential housing investment as a percentage of GDP peaked in the previous two cycles, the housing market crashed within a few years.


I can hear the bull response.... Victoria is different; everyone wants to move here.

Alexandrahere said...

Thanks Just Waiting.

DavidL said...

People who want to move here but cannot afford it are called tourists ... ;-)

Waiting said...

Any guesses for tomorrow's numbers? Just for fun!!

JustWaiting said...

According to a local realtor I know tomorrows numbers are going to be bad news for sellers and agents looking for a commission.

Today the VREB database showed only 113 sales in the last seven days. This time of the year there should be at least 150 and in good years 175.

New listings (including back on market) totalled 405 which is typical for the spring.

Price changes are seen everywhere. About 190 in the last week.

JustWaiting said...

Australia has a strong banking system like Canada and a housing boom that kept on rolling until recently. Now the party is over.

Australian Home Sales Sink - Party Officially Over

Things are not looking too hot down under. Not only is the Australia housing collapse picking up steam, but Australian retailers are struggling mightily in spite of rising sales numbers.

Australia is suffering from buyer exhaustion after the Australian government foolishly stimulated housing to stave off the last recession.

Buyer exhaustion would have set in whether the Reserve Bank made that last rate hike or not. .

Now what? Housing inventory is both huge and rising, few can afford homes, and those who can afford homes already have one (if not more).

Simply put, the pool of greater fools has run out.


-----------

Bubbles have popped in the US, UK, Spain, Ireland and now Australia. Who is next?

Leo S said...

Slow week for sure. Assuming no more sales pop up, I got 10 SFH sales under 550k, when the previous weeks have been 15, 14, 13.

Surprisingly enough, in the 550 to 900k SFHs, the dropoff after the 18th was even more drastic. In the three weeks before March 18th we had 15, 22, and 29 sales. The 3 weeks after the 18th we have 12, 14, and 11.

In the lower half of the market, the 18th appears to have triggered lower sale prices compared to assessments. In the higher end, it seems to have drastically cut sales. Anyone care to hypothesize or is this just a blip?

DavidL said...

As soon as the Bank of Canada (BOC) overnight rate gets adjusted, it will put increasing downwards pressure on the bottom end of the market. I gather that some of the higher risk mortgages are held by people with variable rate mortgages (VRM) - as for that past 10 years or so, VRM have typically been lower interest that the fixed rates.

If the BOC overnight rate goes up - so do VRM. The market can only sustain what people can afford. Although the majority of analysts don't think so - this adjustment could happen as soon as Tuesday April 12th.

SilverSurfer said...

That's it folks, I give up! I change my mind. I think real estate in Canada is going to at least double once more people see this map. The land we thought we had here, well there's a lot less of it than you thought, and they ain't gonna make more.

3 min vid of map

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