Money Sense Magazine released their Best Places to Live in Canada list recently. Guess where Victoria landed on that list? If you thought 1st or 2nd, you thought wrong. If you thought 11, think again.
Nope, you gotta slide down further on the chart, past 15, past 20, even past 25, oops slipped at 30, Woah Nelly! looky here, Victoria is the 34th best place to call home in Canada. That's why when we still called the southern tip of Vancouver Island home we almost always preferred Saanich (15 on the list) to Victoria proper.
The list is telling really. Regina = better. Red Deer too. WTF Fredericton? Even Edmonton, where people die of unnatural causes more frequently than the Oilers lose (not really, but almost), is better. Heck even the town we ended up moving to is higher on the list than any in BC.
I know what your probably thinking: their methodology must be sh&t...
Have a look.
It actually looks pretty comprehensive to me.
Forgive me for adding personal opinion in here for a moment. Since the wife and I headed out almost a year ago for greener pastures, we've come to realize some pretty solid reality:
- Leaving Victoria was one of the best decisions we ever made, wish it would have happened sooner.
- Natural beauty is all around us. Yes, Victoria is certainly gorgeous. But is it worth earning less and paying more to live for? Not at this stage of our lives.
118 comments:
Lived in Victoria for 35 years, but finally sold our house last spring, didn't really like living there anymore. I can see why it's fallen so low, it was once a great place to live but has been going down the past 10-15 years.
Since then we have been touring North America in an RV. Really opens your eyes to the many gorgeous places that exist.
No mystery on why Victoria placed so low. Houses too expensive and wages too low.
Victoria was a much nicer place to be 10 years ago. The downtown area is now kind of creepy with some parts reminiscent of Vancouver's downtown east side.
On the subject of downpayments - what would you think of the following scheme? I don't necessarily have a problem with a low down payment per se - with interest rates this low, there are better places to have your money 'locked in' than in a house. However, when it's combined with high debt to income ratios and low levels of 'other assets' it is a recipe for disaster. Perhaps the debt to service ratio should be on a sliding scale where the more 'down' you have the higher the ratio can be, but the less down, the less debt should take a bite out of your income. If the debt to service ratio was only 15-20 percent for those without a down, that might be a better situation than a 35 percent debt to service ratio with a 10-20 percent down payment.
Overall I think the Moneysense survey is reasonable. The one rating factor I think is a bit silly is the number of new cars. I'm not sure how other people driving new cars is supposed to make a place better or worse for me. I get that this is supposed to represent some underlying economic strength, but it still seems pretty lame.
Most research shows we spend a lot of time rating ourselves against others, so that other peoples shiny new cars and big fancy houses tend to make us unhappy, not happy.
They need a couple extra ratings to pull Victoria up in the rankings. How about:
1) per capita amount of bubblegum stuck to downtown streets
2)number of flowers in February
3)per capita number of coffee joints
4)number of kayaks per resident
5)number of times the phrase "natural flushing action" appears in the leading daily newspaper
Well I'm going to go jump off the Johnson street bridge now. Seriously who even reads these stupid studies. Vancouver placed top on some list by some organization no one's heard of before too and I wouldn't live there. These lists are just filler for magazines and newspapers just like polls. This crap works for the simple minded only. I would say the same if Victoria was ranked super duper #1 too.
^ We would shoot right up there then...he he.
It is definitely a parameter thing. Note we are 1st in the walk / ride to work, 4th in weather, and 3rd in culture. We lose it when it comes to affordable housing, new cars, household income, and discretionary income. Money, money, money, money isn't everything, but the ranking makes sense since it is MoneySense Magazine :-) You wan't to make money, Victoria is not the place to be, I think we all know that!
Had a client email me three showing requests. When I went to book them 2 already had accepted offers. Seems like well priced/attractive properties are still selling at a decent clip.
Well-priced properties will always sell.
Does anyone know how to be notified or where to look up when there is a foreclosure/bank sale court date set for a property or all properties in the area for Victoria?
All I know is that the weather here is certainly better than in Oakville or Burlington, after having lived in both places. That they are ranked #1 and #2 in weather says a lot to me.
The whole concept of a "best" place to live is ridiculous anyway. Best for what? For who?
What's the best car? A Ferrari? A Corolla? Depending on the list they could both be on top. The criteria chosen for this ranking will ensure that basically everyone will disagree with it.
I'm in Edmonton right now for work... No way I would want to move there, but if I was working in the oil industry it would probably be one of my better places to live. "Now hiring for winter drilling".
Also, anyone that lives here already part of a biased population. Chances are you're relatively happy here, that's why you're here.
I think what a lot of people miss is that people from plenty of other places have that same outlook about their city. For example, here a comment from Ben's blog when someone pointed out how Victoria prices were flat/declining:
"Greg, whistler is probably down 50% in 10 years. Of course, the point is that if you are a RE investor, you always stick to golden rule. LOCATION LOCATION. Everything else doesn't matter. The last time I checked, Victoria is where people in Canada went to go and die and the Asians don't ski."
I thought that was funny, and reflective of the difference in perception from outsiders/insiders.
Just Janice: My parents made the same comment about Victoria when they came to visit recently. It was nice 15 years ago when they first saw it. Beautiful little oceanfront town. Now it's much busier and more city-like. Hence why lots of retirees are looking up island at the smaller places like Parksville and Qualicum Beach. Quieter town at half the price.
Ha, from that article:
For example, in the category of population growth, an annual rate of 7.9% was considered ideal. Anything below or above that rate loses points
Oh shit, I was going to move to Prince George but it's only growing at 4.5% annually! Totally unacceptable. I wouldn't be caught dead in a town with a less than optimal growth rate.
That's worth almost 10% of the score by the way.
What about a more important measure... like, say, whether you can breathe the air? Air quality is worth a measly 2% of the total.
Nevermind the overlapping categories making certain factors double counted. They already have income and discretionary income, why count new cars separately?
I suppose you could measure air quality, etc. with the general health of the population. That would show up in the number of doctors per thousand people.
That puts Victoria at #19 in the country.
Thanks for the report.
They have Victoria's avg house price at $390,800 and Kelowna's at over $500,000?
It shows Victoria is 7th from the bottom of household income.
One more thing about the ranking. They used days under zero as one of their criteria (in a negative way). As anyone who has ever lived in the ROC (i.e. east of Hope) would know zero is nothing. It is below -20 and particularly below -30 when Canadians start to curse the place they live in.
That's when they start dreaming of Victoria, or at least flying over Victoria on the way to Hawaii.
It has been a long time since I needed to qualify for a mortgage.
But when I did it seems to me that your total housing costs (Mortgage,Taxes, Insurance,Heat & Utilities including cable and phone, should not add up to more than 28% of your total net income.
Your debt load, the amount owing on credit cards, car loans etc. should not exceed 35% of your total net income.
So that leaves 37% to pay for groceries, medical,vacations, clothing, activities etc.
Really only 27% because a minimum of 10% should be put aside as savings.
I wish we had more dedicated bike lanes in Victoria. If they took away one side of the road for parked cars and put a concrete curb barriers in some spots, we would have safer streets for bikes.
I think we could do A LOT better for making the city safer for bikes and pedestrians. Like more intensive lighting of the streets at night or clearly marked lanes, more signs telling the motorists to look for cyclists. This city is DANGEROUS if your walking at night, the cars can't see you because of the dim lighting, rain and overcast sky. It seems every corner has a tree or something blocking your vision.
And how about some more bike racks downtown - please.
#190 on the list must be lethal.
I knew a girl from New Glasgow (#190 on the list) from grad school; in fact, she loved in our massive student-rental house with 4 others.
She was always sad.
I am surprised Kamloops is so high (44)....my two years at TRU were not memorable...other than the dorm parties. In two years there I think I went downtown Kamloops five or six times...that is how exciting it is.
Hey Jack they are installing a bunch of bike racks right now. I have seen half a dozen pop up in the last year... Also what streets do you bike on? Bay and Douglas? I would recommend avoiding those...
I don't think downtown Victoria qualifies as exciting...
^Ever been downtown Kamloops?
Try downtown Thunder Bay.
Ever been downtown Kamloops?
The Okanagan has different benefits. Ever enjoyed a +25 degree 5 month summer in Victoria? Ever sit outside after 9:00 with your friends in Victoria without a blanket? Ever had 60 days in a row with nothing but blue skies in Victoria? Ever decided to go skiing on a whim and could get to the hill in 35 minutes in Victoria? Ever buy a -10 year old home that doesn't need any work in a great safe neighbourhood only 5 minutes from work for under 400K in Victoria?
Lots of pros/cons to Kamloops and Victoria. I prefer Victoria, but can't say it's for the night-life.
I love the comments about
a) how much cuter Victoria was 15 years ago, or..
b) how seedy downtown Victoria has become.
I spent a lot of the 80's sculking around downtown Victoria and a lot of the 90's sculking around Fernwood and James Bay and trust me, the city is vastly improved.
To me, the recent closure of Monty's downtown represents the last of the "old" downtown breed. Remember the diviest dive bar of them all, the Beaver, in the basement of the Empress? How about the Kings, or the Douglas Hotel. How about when the red light district used to be where the Gap is now. How about when lower Fort at Government was a warren of creepy run down crap.
Vastly improved! Don't get me started on Fernwood and JB.
what about fernwood and JB?
ahh yes Victoria was so much cuter when the prostitutes prowled Government and LoJo...
Why would they put bike lanes on Bay and Douglas unless they wanted you to use them?
I try to use the less traveled residential roads as much as I can but they get tricky when its dark or rainy because there is low lighting. Streets like Haultain, Fairfield and Rockland.
But now that its not dark by 4:30, its a lot safer. So for about 8 or 9 months of the year, Victoria is good for cycling during the work week.
The Galloping Goose isn't going to help me as it isn't in my hood.
Maybe you can tell me, which streets you use to get to work. And yes there are more bike racks, but you still find people chaining their bikes to telephone poles and parking meters.
So to get a number 1 rating for bike and walk, I would put the writer on a bike during rush hour starting at Finlayson and Cook and tell them to go downtown. Watch that rating change from number 1.
But I can see why we get number 1 for walking in Victoria. The City is only 20 square kilometers. We are not the size of Vancouver or Toronto. Now if people would actually do it.
Sculking!
Maybe its not the neighborhoods that have changed.
It certainly does appear that neighborhoods like Fernwood and James Bay have improved - but that is more to do with the economic times with jobs, jobs, jobs.
But lately, I have noticed a change in these hoods. More crime, vandalism including a return to pole tagging. I now look at any 20 year old on a skateboard as a potential perpetrator.
As for prostitution, they haven't gone away. Maybe its just harder to see them, since a lot more girls hang their junk out for everyone to see. Try biking around Princess and Government - you know near the Hotel the city bought to warehouse the poor.
I'm actually surprised that Kamloops is so low on the list for all of the reasons that Mindset outlines. I'd live there over Red Deer any day -- much better scenery, recreation opportunities, weather,...
I was in Kamloops recently and actually commented at the time on how nice the downtown is, so it's funny that you think so poorly of it, Marko. I can see how it isn't an "exciting" downtown with lots of nightlife, but it's remarkably functional and well-kept with lots of little independent shops of different kinds. It's actually amazing that a downtown that nice has survived in a town of that size with the flight to the suburbs that went on for so long across North America. There are big box stores in Kamloops, sure, but there's also a great, independent downtown. Vernon and Penticton are also pretty nice.
Fernwood and JB are also vastly improved! Just got back from a lovely spring walk around downtown and it is anything but creepy.
Fernwood and James Bay aren't creepy.
Now the downtown eastside after 11:00 PM - now that's a zoo and CREEPY.
But here's a story for you. I was out walking in Fernwood when a high school student approached me and ask if I would walk her to the church near Belmont as a weird guy had been following her.
So there you go. Two people walking the same street but each felt differently about how safe they were.
But, then I've walked through and gotten lost in parts of East L.A. and felt unsafe. And it is really creepy having to walk up to one of those L.A. characters to ask directions on how to get out of his hood.
So to get a number 1 rating for bike and walk, I would put the writer on a bike during rush hour starting at Finlayson and Cook and tell them to go downtown. Watch that rating change from number 1.
Eh? Cook & Finlayson isn't bad at all. Fin has a solid and well-marked bike lane - take that straight over Burnside to Jutland, cut over to the Goose, over the trestle, along Dockside, and before you know it, you're at Johnson & Wharf. There are plenty of worse spots for cycling in this city.
(I'm not a fan of Douglas either, but that's because bikes & buses don't play nicely - they go the same speed, and buses need to constantly threaten the bike lanes).
That's not a bad route at all. It never crossed my mind to go over the Gorge to get downtown. It's not the shortest or most direct route, but you'll get downtown without having an imprint of truck's side mirror in your back.
Oops, no Johnson street bridge.
Maybe I just haven't been paying close enough attention, but did PCS/MLS used to indicate whether a house was in Fairfield east or west? I could swear that it used to just be Fairfield, but today there's the added distinction. Is east or west seen as more desirable?
In BC if you make an offer without using a real estate licensee (real estate agent) can you get the portion of the commission that is described as payable to the purchasing agent in the sellers contract with their agent? If not, what happens to it?
In case you needed another reason to sell your property....
latest poll suggests the NDP will capture all but 10 seats next Spring
There's a good article on Garth Turner site that outlines the proposed charges to mortgage rules that may very soon become a reality: http://www.greaterfool.ca/2012/03/21/the-free-fall/
Hm I think i'm going to start living my life in fear. Sheesh I've missed five years of it already....
Happy Renter: Yes they are now saying Fairfield West etc. These new designations started a few days ago. Before it was just Fairfield.
I am noticing many more sales within my criteria now that spring and sprung. Today (Wednesday), has as many sales as the average week has had so far this year.
Rob at Canadian Mortgage Trends discusses the same mortgage changes with a somewhat less... umm, theatrical style.
"In BC if you make an offer without using a real estate licensee (real estate agent) can you get the portion of the commission that is described as payable to the purchasing agent in the sellers contract with their agent? If not, what happens to it?"
- No, you as the buyer cannot get that commission.
- Typically the listing agent makes double the commission or sometimes he or she may discount it a bit to make the deal happen.
Alternative: http://markojuras.com/70-cash-back-program/
"I am noticing many more sales within my criteria now that spring and sprung. Today (Wednesday), has as many sales as the average week has had so far this year."
About 85 sales since Monday.
Same sales surge as this time last year and the year before. Industry rate-scare and upcoming mortgage changes. Crickets again by end of April.
- No, you as the buyer cannot get that commission.
- Typically the listing agent makes double the commission
There is a contradiction in the above. If the listing agent gets the commission it's his money and he can give a rebate to the buyer if he wants. Or anyone else for that matter - and sometimes they do pay incentives to third parties for recruiting a buyer.
It would appear to be a matter of can but will not, rather than of cannot.
Trying to pry a double commission from a realtor's hand would be challenging to say the least. I can't see how trying to negotiate on the price of the house and the agents commission at the same time wild save you any money. I think it would really raise the stress level though. You are best to use a discount agent like Marko.
This is the busy time of year, it does ramp up and we may end up with more sales than last year. Last year was pretty slow, so I wouldn't get too worried about it. Things always slow as we go towards summer and ther is a lot of junk coming back on the market that wasn't sold last year, or the year before.
Agree with Dave. Numerous factors will squeeze out the buyers right now:
- lowest ever mortgage rates
- probable impending decrease in amortizations
- much tighter borrowing standards to live up to soon
All this adds up to a very slow May.
"There is a contradiction in the above. If the listing agent gets the commission it's his money and he can give a rebate to the buyer if he wants. Or anyone else for that matter - and sometimes they do pay incentives to third parties for recruiting a buyer"
- The listing agent would have to disclose to the seller(s) that he is giving away their commission to the buyer. I've never heard of the listing agent doing "cash back" to a buyer. The listing agent can decrease his commission to the seller and this occurs; however, is not were as common as the listing agent double ending the commission.
"It would appear to be a matter of can but will not, rather than of cannot."
What I was trying to express is if you make an offer directly through the listing agent you do not get the buying end commission nor are you entitled to it. The odds of the listing agent, the buyer, and the seller agreeing on something while trying to negotiate the price at the same time in terms of the buyer collecting some of the commission are very very low. As noted above, I've never heard of it.
They should have included number of strip clubs, bingo halls and bowling alleys in the survey. Then Victoria would have shot down at least another ten spots!
1824 Haultain St for $406,500 (teardown).
Strange to see 1460 Thurlow sell for 595,000 when they started at 859,000 in January.
oh well it looks like the canadiansuperbeaver is having a hard landing. Last year about now our stock market was 2000 higher than our dow jones neighbours. This year we're upside down. Does anybody remember all the stuff in the media last year how this was canada's decade? They must have meant "our decade to pay last decade's bill"
That's because $895 was just plain ridiculous for that property big lot or no...If they listed it at $695 they probably would have sold it for $659. Agent didn't do a good job talking sense into the sellers or in talking nonsense to them IMO...
I viewed the property on Thurlow and I think it sold for about market value. Original asking price was too high...the fact they came down over 250k has nothing do with the market.
Question about mortgages - I'm wondering how it works for the people that took out a 40-year amortization mortage a few years ago.
When it comes time to renew, is their remaining amount owing amortized over 35 years (the original 40 minus the 5 they've completed) or is it subject to the prevalent amortization rules in place at the time of renewal (eg. right now, the max amortization is 30 years).
I think when they go to renegotiate it may be limited to 25 years amortization, if the feds pass what they are expected to in the budget next week. That could mean some real pain for people as their payments could go up a lot.
everything is negotiable. talk to a lawyer...
"London market hits meltdown within hours of Budget"
POP! Goes the real estate bubble in London.
"The London property market plunged into meltdown yesterday.
The effects were seen in the rapid wake of the Chancellor’s bombshell announcement that purchasers using companies as the buying vehicles of £2m-plus properties would be stung by 15% Stamp Duty as from midnight. In London, buying via company vehicles is extremely common.
Within hours, London agents were reporting chaos, as deal after deal fell through. Staff at some upmarket agents, including Savills - which last week revealed it has 50 properties on its books at £15m or more - were working until midnight trying to get deals through before the deadline."
Looks like they've just implemented an overnight law that adds 15% duty on foreigners buying properties in London.
I wonder what would happen if they did that in Vancouver? Who knows, maybe one day people born in Vancouver may actually be able to afford to buy a house in their own city again.
The amortization was based upon CMHC insurance. Those people will still be able to remortgage to 35 years.
First off the bank does not have to renew your mortgage. However in practice most will.
Those who took out a 40 year amortization are kinda caught between a rock and a hard place. Unless you pay down the mortgage, you probably will not be able to finance your home at a different bank. So you are going to have to take what your bank offers.
The amortization period was part of your original contract with that lender so they will honor the remaining years left to amortize the mortgage. BUT, they will not extend that amortization. That will probably have an affect on your home equity line of credit HELOC too. Which means you will probably not be able to draw equity out of your home until you reduce the number of years on your amortization.
Now, some banks have been securitising their mortgages. Once the income stream of a bundle of mortgages has been sold, there have been no checks to see how that investment has kept its book value. I'm guessing, that may be the reason why at renewal time, the bank may need an appraisal on your property. They still will honor their original commitment but the bank will also have to alter the mix of mortgages in the security to keep the book value near what they originally sold it for. That will likely not directly affect you. But if home prices go down it could lead to higher interest rates or higher bank charges.
What the ISFO is trying to stop, is what happened in the USA. Where the book value of the mortgages fell to the point that no one new the value of the mortgage backed security. In fact the value of the MBS fell to such a point that they were nearly unsaleable. That froze up credit.
That's why the banks will have to report the current value of your home at renewal time. That does not mean (unlike what I hear from mortgage brokers) that they will be demanding a mother of big cash paydown on your mortgage.
This is all new, so you should consult someone who knows, and at this point I don't know of anyone who really does know.
OSFI
Office of the Superintendent of Financial Institutions
ISFO is the name of my cat.
re: realtor's commissions. Whenever I have purchased a home as my primary residence, I have always used the same realtor. When I have sold my primary residences I also have used this same realtor. But when I have purchased investment properties, I have always done it through the listing agent. I never mention the commission, but of course we are both well aware of it. I make an offer and with the offer I have factored in the buyers realtor commission. It is an investment only, and I don't get emotionally entangled in the process. I leave the bargaining to their agent. Sometimes their realtor will reduce his commission, as he knows full well that the next offer will probably be with purchasers who have a realtor and thus that realtor will get half of the commission. I have a price in mind and I don't budge on it. You win some, you lose some.
JJ said: "At this point I don't know anyone who knows".
Garth seems to know a bit in his latest blog post which is actually a decent read this time:
Looks like the Feds have decided not to pursue any changes in the mortgage market:
http://www.theglobeandmail.com/news/politics/ottawa-notebook/federal-budget-will-include-only-modest-spending-cuts-flaherty-says/article2377866/
The important bits:
On the issue of Canada’s housing market, Mr. Flaherty made comments Thursday that suggest he is not preparing new measures in the budget to cool prices.
Mr. Flaherty said he would like to see if the market will “correct itself,” and noted that there are some signs that this is currently taking place.
Some Canadian banks are calling on Ottawa to intervene – either by lowering the maximum amortization period for insured mortgages or by raising the minimum required down payment.
Mr. Flaherty said he finds those suggestions “a bit much” given that the banks ultimately decide whether to approve a mortgage.
Given the likely OSFI regs, it makes sense not to do too much at once.
When those 40 yr mortgages come due, mostly after five years....you'll be able to re-finance with the same bank providing you have always made your payments on time etc. The downside of this is you won't have the choice of going to another financial institution that will give you a better rate.....because they won't give you the 35 yrs. So you are probably stuck with your original mortgager's posted rate.
I'm sorry but Garth is an ostentatious grandstander on this subject....
he is the ying to CREAs yang.
True, it is a world of Ying and Yang isn't it. We do need both sides to create the balance. It would be like the Whale world without Paul Watson.
All this OSFI and Flaherty discussion leads me to think that Flaherty and co. feel that there are sufficient regulatory tools under OFSI that could be used. The OFSI regulations (guidelines? when do they take affect? will banks follow them when released for comment or only when promulgated?) are essentially about telling the banks that they have to do what they should have been doing all along.
Unfortunately it is kind of like telling the farmer to close the barn doors nightly so the horses don't get out 5 years after the horses (banks) have been roaming wild and meeting up secretly in the night with Arabian Stallions (financial innovators).
In other words, the banks have gotten screwed (and some will be pg), the farmer is going to have quite a few more foals and the invisible hand shouldn't have been doing what it what 5 years ago and instead would have done better to make sure that the barn doors were latched.
Ditto on that one Animal Spirit or what ever you said there.
Flaherty is passing the buck, pointing the finger, and f*^ing the dog on this issue.
He's going to let OSFI and the banks take the blame for a collapsing market.
I agree with Animal Spirit and Just Jack. Predicting exactly how this will unfold is at best challenging. It's obvious there's a correction in the works, but exactly how it unfolds is unknown. It could be a sudden drop a la tower of terror (it would need some large percipitating factor though) - or it could be far more clandestine (a long period of stagnant prices in the context of dollar devaluation and inflation). My bet right now is on the clandestine, and any political party would be smart to try to engineer such a thing - perhaps limiting mortgage terms now, but legislating rules around existing mortgages and renewals. At any rate anyone buying today and expecting their house to be worth more tomorrow, is likely to be disappointed over the next decade. I really do think houses have a lot in common with cars - and many folks might start to look at them very differently, just as many folks took to leasing vehicles not that long ago when the norm was to buy. That might be one way to 'manage' the housing problem as well - make it tax advantageous to rent - this would drive up rents and reduce the demand to own. Just some thoughts.
http://www.theglobeandmail.com/life/relationships/news-and-views/judith-timson/houses-are-never-just-investments/article2378164/
An interesting (and very true) story of housing in the G&M....
I do long for a time when houses were homes and investments were investments. Perhaps that is what my children will know.
CMHC is capping out in the amount of mortgages it can insure.
What that means, is that their will be a substantial contraction in the number of mortgages CMHC can insure.
I think jumbo mortgages are going to get axed pretty quickly.
And guess what cities depend on jumbo mortgages?
Future purchasers may end up having to save 20 percent as a down payment. Just because CMHC will have a quota on the number of mortgages in can insure.
Those that have bought will feel that they were lucky to buy when they did. However, it will be a lot harder to sell the property with fewer prospective purchasers.
This may be that "trigger".
Just Jack -
That's not going to be a big enough "trigger", it would be a blow, but more like that experienced during a pillow fight as opposed to the last round of the UFC championship.
I think there are creative ways to to neutralize the potential threat that the housing market poses to the larger economy. At the core - the government should work to restore the fundamental relationship between housing and its historical 'groundings' and its historical relationship to the broader economy. This doesn't (and shouldn't) have to happen over night.
One of the problems that has been identified (repeatedly) is a lack of 'equity' to soften the potential impacts of a correction. What if there was a tax advantage for paying down your mortgage faster? That would encourage people to take advantage of the pre-payment options and be a defacto way to shrink mortgage horizons and household debt. If houses are one of the primary strategies people use to build resources for retirement, why not treat houses more like RRSPs (tax advantage the pay down, but tax the cash-out)? Or maybe get rid of the requirement to 're-pay' the monies borrowed from the RRSP to fund the downpayment and require that the 'repayment' go towards getting rid of the mortgage in the form of an extra principal payment.
I just think that strategies will be deployed to mitigate any out-and-out rout of the housing market. A free-fall is political suicide - stagnation on the other hand is pretty palatable.
I doubt that this could be implemented on a national basis.
Tax advantages for mortgages would have to be offset with a capital gains tax on your principle residence. Just like investment properties are taxed now. Do that to Joe Canada and the stores will be running out of rope to hang the politicians.
The solution to the economic problem has been and will always be to stimulate sales volume.
The government did that with 40 year amortizations, zero down, stated income and low interest rates over the last half dozen years. And it kept us out of a deep recession like what is happening in the USA.
But sales volumes have still fallen to almost the lowest level in two decades.
As for the loss of equity. Everyone in Victoria could loose a hundred thousand dollars in equity tomorrow. And nothing would happen, they would still have a job, groceries on the table and a roof over their head. Because equity is not money.
They just wouldn't be readily converting that equity into debt by purchasing non essentials or luxury goods. For a time they will struggle with credit card bills and lines of credit, but after a half dozen years of frugality they will get those debt levels back to a reasonable level.
Life in Canada would go on. People would just have to make money the old fashioned way - they would have to earn it.
I took my kids to a movie the other day. As I pulled into the car park there was a junky shooting up. I was looking forward to nice day with my kids and this wrecked it.
Last night we were driving home from a birthday dinner (my husband and our 4 kids). Yup, druggies dancing all over the place. One guy had his pants down. Nice end to an otherwise lovely evening. Lived in TO for 6 years - downtown and never saw this. Same with Paris. in Toronto and Paris we were out all the time.
I think what kept us from the same recession as down south has more to do with the fact that our major banks didn't go bankrupt...
and without question, we have a street/drug problem which causes our property crime problem. Biggest fault of Victoria in my opinion....
Here is a story.
I know this could happen anywhere but there are apparently many stories like this in Victoria. We bought a house 4 years ago that needed an up-date. Just a facelift - it was pink inside - very 80s. Anyway, we hired a designer who we had known for years. The woman was 50 years old. We were giving her cheques to buy the appliances - pay the kitchen store, paint, trades etc. She stole about $35,000. She had become a drug addict. We took her to small claims court since our lawyer was worried we would incur legal expenses and she would then declare bankruptcy. There was a judgement against her but of course she declared bankruptcy. She had no assets. Living with her aged mother. Now the bankruptcy is over - it has been 2 years - and she is having the last laugh. She is absolved of all her debts. We have lost $35,000 and actually more since many things had to be redone. Why did we not realise this was going on??? - well we went on holidays for 2 weeks and she was going to have the house done or semi-done when we got back. The trades wanted to call us, one guy found her passed out in my 6 year olds bed but she would not give them the number. Anyway, the long and the short of it is that she is having the last laughed. Had a $35,000 party at our expense. Been living rent free in her mother's house for the past 2 years. I want out of this house and out of this city. Just ranting and getting this off my chest.
Thats a sad story Nancy and a common one. You are certainly not alone.
However, if she really is a 50 year old drug addict it is unlikely she will get the last laugh. I would much rather be out 35K than have the disease that is addiction
I think what kept us from the same recession as down south has more to do with the fact that our major banks didn't go bankrupt...
Why would they if the housing correction hasn't started yet on a national basis?
Also the banks here are much smarter. They've offloaded almost all of the risk to the taxpayer, so they'll be fine. CMHC, not so much.
Well it don't think it is a disease - I know too many people with or have died from cancer, MS etc.
I think with her it was more of a lifestyle choice. She loved to party apparently and refused to grow up.
She got in the wrong crowd. At 50 if you can believe it. Nobody put a gun to her head to start doing drugs. At 50 - peer pressure?
Anyway, she also destroyed the finances of a widow with 2 young kids. A lot of destruction in her wake. I am wondering if she is not going to be back in business soon. I have no sympathy what-so-ever. I have seen her at the bus stop and driving in a car (scary) and she always looks pretty happy.
^ Wow - awful story - my condolences.
I have on occasion felt ripped off by trades, but it has been due to laziness or incompetence not massive theft like that!
Actually I must say the trades were awesome in this case. They went over and above and I was really impressed.
Anyway thanks for the sympathy It is only money but when you have 4 kids to support and one is in a private school because of a learning disability it all adds up.
I agree, it may be a social disease but as an individual it's just an addiction...Also extremely harsh story. I'm so sorry! The trades is a tough world to navigate. In my experience 50% will screw you, another 25% will do poor work. It's finding that remaining 25% that's tough...
On what caused the sub prime mortgage crises down south:
While we have pieces of the puzzle IMO we are missing a few key pieces
on the individual side we don't have a proliferation of ARM mortgages out there and in general we don't have an overbuilding issue.
On the financial side the biggest is that we don't have GSEs buying mortgages from lenders and selling them to other investors (like Iceland).
Paris and Toronto are much larger cities and the problem is spread out geographically than Victoria. In Paris or Toronto you just avoid those areas.
But in Victoria, you just can't. And that's why you get druggies shooting up beside a cinema. As a young family you are now faced with a choice to go downtown and accept what you see or leave the city and see a movie in the suburbs.
Victoria is a long way off from being another downtown Detroit, but you have to start now to fix the problem. Light the city up and have more city sponsored activities downtown that bring the families back to the city. And that includes an end to condominium mania. Build low rise wood frame townhouse complexes that families can live in, each adding to the greenspace and common amenities for recreation.
We could do it.
Just say NO to Drugs
and No to Condo's
@ dasmo March 23, 2012 12:25 PM
Aren't variable rate mortgages = ARM's ?
Wikipedia : https://en.wikipedia.org/wiki/Adjustable-rate_mortgage
A variable-rate mortgage, adjustable-rate mortgage (ARM), or tracker mortgage is a mortgage loan with the interest rate on the note periodically adjusted based on an index which reflects the cost to the lender of borrowing on the credit markets.[1] The loan may be offered at the lender's standard variable rate/base rate. There may be a direct and legally defined link to the underlying index, but where the lender offers no specific link to the underlying market of index they can choose to increase or decrease at their discretion. The term "variable-rate mortgage" is most common outside the United States, whilst in the United States, "adjustable-rate mortgage" is most common, and implies a mortgage regulated by the Federal government,[2] with limitations on charges ("caps"). In many countries, adjustable rate mortgages are the norm, and in such places, may simply be referred to as mortgages.
And 35% of mortgages are VRM/ARM's in Canada : http://www.newinhomes.com/articles/article.jsp?article=524
I know that in my travels to the US many Americans that I talk to are dumbfounded that Canadians have primarily 5 year terms. They always ask why wouldn't Canadians get a 30 year fixed :-)
Good news for some agent today, as one of the court ordered sales sold for $4,531,001. Which is $531,001 over list price.
The dollar at the end reminds of a scene from the Price is Right TV show. And your bid is ??
This 9,000 square foot home on 1.2 acres of Oak Bay waterfront has almost continuously been listed for sale since 2003. At one time being listed as high 7.5 million.
Bought for a little over a million in 1995, the previous owners almost tripled the size of the home, renovated and upgraded the home.
Talk about going crazy with the line of credit.
Sorry I mean the more advanced ARMs they were handing out to unsuspecting consumers.
see:
Like the interest or partial interest only cash flow ARMS
This is exactly what did my buddy in. The cash flow mortgage was meant for construction so you could build with cash flow as a priority to pay your trades and sell after two years. For regular joe blow, you get that 750K house for $1500 a month then after two years blam, it's $3500....
But don't worry if you missed out on that 9,000 square foot home. It was too small anyway. You still have an opportunity to bid on a 13,641 square footer on 2.8 acres in Central Saanich for 2.1 million
This home in the Keating neighborhood had at one time been listed for 12.5 million. It still needs some finishing touches.
Bought for 1.5 million in 2005, another 2,000 square feet was added and the home substantially updated at about the cost of sending a monkey into space in 1960.
Still, its a nice place to go roller blading in.
Nancy: I am so sorry to hear your story. Perhaps, if she ever gets a job; any judgement against her will go in your favour.
I know personally 6 families that have children who are over 18 years old, live at home, have zero employment and of course contribute nothing towards the family in terms of financial or physical (ie. vacuuming, cutting the lawn, preparing meals, taking out the garbage, or even tidying up their own room)support. Some of these parents even buy their kids cigarettes.
Sounds like this woman you speak of just goes back to mom when things go wrong for her. Her mom is probably 75 years old and no doubt her daughter is just waiting to inherit.
On another note: This week for SFD within my criteria in Vic,SE,SW,OB & Esq, is going to turn out to be at least the 3rd best week in terms of sales since mid June 2010. 41% of the sales however went for below BC assessments and so far 41% also came with secondary suites. So far the two weeks with higher sales were 2-8 Aug 2010 and 29Feb-6Mar 2011. We'll see if these numbers are an indicator of sales to come.
Well it don't think it is a disease - I know too many people with or have died from cancer, MS etc.
It's a disease, but it's the only disease you can get yelled at for having. Damnit Frank! You're an alcoholic!
Damnit Frank! You have Lupus! Just doesn't sound right....
-- Mitch Hedberg
Nothing unusual for sales on my PCS. Right in line with last year.
Price/assessment is up in both high and low end. Back to levels of July 2011. Not surprising as the quality houses are bought up in the spring while the crappier stock is left for the fall.
First of all, great to read HHV slagging on Victoria with this blog post. Way to keep it classy, buddy.
After reading that HHV thought the MoneySense criteria looked "pretty comprehensive to me," it was nice to read some varying opinion (e.g., "I'm not sure how other people driving new cars is supposed to make a place better or worse.").
But here's a story for you. I was out walking in Fernwood when a high school student approached me and ask if I would walk her to the church near Belmont as a weird guy had been following her.
So there you go. Two people walking the same street but each felt differently about how safe they were.
Just Jack, however just our society is, it is still one that is oppressive to women, in that women today still face adverse conditions that men, by and large, do not: a far greater likelihood of being followed, harassed, assaulted, and worse. It should come as no surprise that your feeling on that street would be different than that woman's.
Also the banks here are much smarter. They've offloaded almost all of the risk to the taxpayer, so they'll be fine. CMHC, not so much.
Don't you think if CMHC goes bust the Canadian government would bail out CMHC at taxpayers' (including renters') expense? Teach CMHC and over-greedy home buyers a lesson at the expense of destroying the overall economy? Nope! Bail out.
a different set of criteria puts Victoria as the second best place to do business though!
First of all, great to read HHV slagging on Victoria with this blog post. Way to keep it classy, buddy.
Money sense is slagging on Victoria, HHV is reporting it. Learn the difference.
Don't you think if CMHC goes bust the Canadian government would bail out CMHC at taxpayers' (including renters') expense? Teach CMHC and over-greedy home buyers a lesson at the expense of destroying the overall economy? Nope! Bail out.
Uhhh yeah. That's exactly what I said. The banks here are smarter because they've offloaded more of the risk to the taxpayer.
From your TC article dasmo:
However, Victoria's ranking falls off when the geographical borders are expanded and more cities are included. In KPMG's analysis of the top 15 cost-competitive communities in the Pacific U.S.-Western Canada region, Anchorage, Alaska, is at the top, and Vancouver is 15th.
So that would make Victoria less than 16th. The TC is really grasping these days.
Haha yep. In other news, amongst cities on the west coast starting with V, Victoria is the most competitive!
A closer look reveals that the Times Colonist got it completely backwards.
They said "In KPMG's analysis of the top 15 cost-competitive communities in the Pacific U.S.-Western Canada region, Anchorage, Alaska, is at the top, and Vancouver is 15th."
But you look at the actual report (bottom of page 56) and the results are exactly backwards. Vancouver is the most cost-competitive in that group, Prince George is #2, and Anchorage is the worst. Way to go Times Colonist, you get a fail in reading comprehension.
Victoria isn't even on the list. Perhaps it's only in the expanded appendix.
There were more court cases against her but they have been wiped off the courts documents. Her sister is the Deputy Minister of Labour of Ontario. I am wondering if she had a hand in this.
This 50 year old woman had a design studio and was known in the movie industry. She has hurt many people.
Having relatives in high places helps though.
From that KPMG report^ to TC's chagrin, Victoria actually came in last of the other sponsored cities Exhibit 7.1 page 88. Managers choosing the most competitive medium-sized city from that list, would choose Victoria dead last. The cost gap would widen further if employee housing affordability was included - a key motive for choosing a smaller city in the first place.
Money sense is slagging on Victoria, HHV is reporting it. Learn the difference.
And did MoneySense include the "We Suck" image in HHV's post?
Leo S, get real.
JustJack, what are you doing in the real estate field? You should be a comedian. I cracked up laughing so loud on this, my wife came into the room asking what was so funny.
JustJack said: "...Bought for 1.5 million in 2005, another 2,000 square feet was added and the home substantially updated at about the cost of sending a monkey into space in 1960
Still, its a nice place to go roller blading in."
I thought it was funny. Not as easily offended I guess.
"Having relatives in high places helps though."
Sorry to hear about your experience, but you don't need relatives in high places to declare BK.
HHV, keep up the good work.Much appreciated. In my book you're a class act. Having to put up with the occasional moronic and clueless comments posted here comes with the territory I guess. Fortunately those are very limited but none the less predictable.
@Introvert, I know the written word (and in this case, the image on screen) leave much open for interpretation. I also know I'm not the best writer in the world. But this post, and the image used, was meant tongue-in-cheek. I put a link in there for you so that there would be no confusion as to what I meant by tongue-in-cheek.
I too find the new car thing weird... it would seem to be an indicator of disposable income, using the having disposable income = better quality of life metric... but we all know the way houses have been used as ATMs over the past 5-7 years can give the perception of greater disposable income. Not sure that perception of wealth leads to a higher quality of life when the wealth is the bank's... best not waste too much time on it.
I am expecting a high sales week (low, low interest rates, potential return of the 25 yr mortgage, new mortgage qualification rules).
But for April it may be really low.
Monday, March 26, 2012 8:00am
MTD
March 2012 2011
Net Unconditional Sales:
433 622
New Listings:
1,066 1,501
Active Listings:
3,997 4,100
Please Note
•Left Column: stats so far this month
•Right Column: stats for the entire month from last year
Can anyone tell me what happened to that newer listing in Richmond between Ross and Fairfield? It was lasted around $1.1 M, I believe.
It sold for $1,130,000.
Average SFH so far this month is about 620k and the median is running at 555k.
Thanks Marko.
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