Jump to content

      









Photo

Victoria home prices and housing values


  • Please log in to reply
1232 replies to this topic

#1221 spanky123

spanky123
  • Member
  • 6,633 posts

Posted 22 March 2017 - 08:19 AM

^ Many people like the idea of home ownership as (for now) the gains on the sale of a primary residence are tax free so most long term homeowners will have funds available at retirement. You can make a good case however that setting aside the money you save on rent each month for investment will yield you as good a retirement nest egg.



#1222 spanky123

spanky123
  • Member
  • 6,633 posts

Posted 22 March 2017 - 08:26 AM

I've heard this advice before, but I'm not willing to leave my career and my life to live somewhere with cheaper housing prices. Maybe that exempts me from sympathy. I guess if there were no chance for me to ever buy here, I would rent forever. 

 

Here's the frustrating bit. A couple years ago, I started casually looking at condos. I was in a lower paying job with no major savings. I went to the bank to find out what I could afford and was told to keep saving. So I did. I worked hard and improved my education and landed a job that pays about $10,000 more per year. My savings grew significantly as a result of having a higher income, as well as a lump sum payment from my former pension plan and a small gift from a relative's estate. I attended a couple open houses and started thinking about getting an agent. Then, I got an email from the owner of the place I was renting. She wanted to move back in wasn't going to renew my lease. I had a month to find a new place. I was fortunate enough to have a friend with a relative in a property management company and was able to sign the lease on a place before it was posted anywhere. With all the stress of moving, I had to give up on looking at condos. Six months later, I got an agent and started looking again. But when I talked to the mortgage brokers, I found out that the new stress test had just been introduced. Combining that with the rapid increase of housing prices, I was suddenly back to where I started. I worked hard and made sacrifices, but the market outpaced me. 

 

I know I haven't a different perspective than many posters here. I don't think the current system is fair, but others have a right to disagree with me. Despite that, I hope that even the more right-leaning folks can see why I'm a bit salty. 

 

Personally I think that you may be thanking your banker in a couple of years. Current housing prices are not sustainable in several markets such as Victoria, Vancouver and Toronto. With interest rates and the economy growing in the US, the bank of Canada will either have to start raising rates here or accept a $.60 dollar as our new reality. In either event people who are stretched to make payments now will not be able to sustain themselves.



#1223 spanky123

spanky123
  • Member
  • 6,633 posts

Posted 22 March 2017 - 08:31 AM

 

The mortgage stress test seems pretty reasonable to me. Mortgages at 4.5% were the norm just a few years ago. Do you really want to assume that you'll never have to pay an interest rate like that?

 

My first mortgage for a condo in Victoria was at 12%. In 2008 I was paying 5.65% on a mortgage.

 

The problem is that anyone younger than 28 has never had to deal with an economic cycle before. They assume that interest rates will always be low and that there will always be jobs available and money will be easy to borrow.


  • Nparker and johnk like this

#1224 Mike K.

Mike K.
  • Administrator
  • 34,560 posts

Posted 22 March 2017 - 08:31 AM

^^We've rinsed and repeated that very statement on VV since day one of this forum.

 

We're all here for a reason, right? And for every person in Victoria who wants to flee for greener pastures (wherever those may be), there's a dozen wishing they could live here, and another dozen making preparations to move here. 

 

If we could just forget what the market is doing and do what's right for us we'd all be a little bit happier and stress free.


  • kafkaesque likes this

Know it all.
Citified.ca is Victoria's most comprehensive research resource for new-build homes and commercial spaces.


#1225 spanky123

spanky123
  • Member
  • 6,633 posts

Posted 22 March 2017 - 08:56 AM

^ True although I was commenting specifically on FTHC's specific case. I think that with housing prices where they are, very few working people in this market can afford a house and even if they can come up with the down payment, wage growth and job prospects for increased salaries don't exist to offset the rate and pricing risks.

 

I agree with your assertion that wealthy people (retirees and foreigners) moving into Victoria can afford condos and houses and may continue to drive up prices but that is an entirely different group.



#1226 Mike K.

Mike K.
  • Administrator
  • 34,560 posts

Posted 22 March 2017 - 08:57 AM

Very few people can afford to buy real-estate anywhere, not just Victoria. If buying real-estate was something everyone could do, nobody would rent.

 

We've been a city full of renters since time immemorial. Even in the 70's when real-estate was dirt cheap on the south Island 70% of the population rented.


  • jonny likes this

Know it all.
Citified.ca is Victoria's most comprehensive research resource for new-build homes and commercial spaces.


#1227 spanky123

spanky123
  • Member
  • 6,633 posts

Posted 22 March 2017 - 09:07 AM

^ I could be wrong but I suspect that many people rent because they don't want to be tied to a single area or piece of property for an extended period of time and don't want to have to deal with maintenance and repairs. Now I realize that you could just sell your house and move if you wished but doing so every few years would have most of your profits eaten away by fees and taxes.


Edited by spanky123, 22 March 2017 - 09:07 AM.


#1228 Fat Tug

Fat Tug
  • Member
  • 6 posts

Posted 24 March 2017 - 10:20 PM

Here's one I find a bit of a head scratcher. There's now 2 condos asking $1 million+ in the Hudson building. The suites in that building look nice, but 7-figures??

 
 


#1229 LeoVictoria

LeoVictoria
  • Member
  • 1,461 posts

Posted 24 March 2017 - 10:59 PM

Very few people can afford to buy real-estate anywhere, not just Victoria. If buying real-estate was something everyone could do, nobody would rent.

 

We've been a city full of renters since time immemorial. Even in the 70's when real-estate was dirt cheap on the south Island 70% of the population rented.

 

Where is this stat from?  Never heard of 70% renting.



#1230 Nparker

Nparker
  • Member
  • 13,148 posts

Posted Yesterday, 12:37 AM

Where is this stat from?  Never heard of 70% renting.

"VHF's Big Book of Amazing Stats"  :P



#1231 Sparky

Sparky

    Super Duper Moderator

  • Moderator
  • 8,809 posts

Posted Yesterday, 02:39 AM

Very few people can afford to buy real-estate anywhere, not just Victoria. If buying real-estate was something everyone could do, nobody would rent.

 

We've been a city full of renters since time immemorial. Even in the 70's when real-estate was dirt cheap on the south Island 70% of the population rented.

 

Home ownership is an interesting topic. Canadians as a whole prefer to own rather than rent.

 

I bought my first house in the early 70's for $19,100, but that was double what my brother paid for his house a few years before. The interest rates for first mortgages at the time was around 10%. It was not uncommon to have two mortgages on a home especially for a first time buyer, and especially in BC with the readily available "BC Second Mortgage" program.

 

Victoria might be slightly different than the national average, but probably not as much as one might think. There seemed to be a lot of apartment buildings here but I don't think we were any different than most cities. The late 60's and early 70's saw a boom in housing construction in the single family housing market. I used to sell light fixtures to builders and knew most of the big players at the time. Hugo Hucker for example, built up a lot of Colwood which was the land of opportunity at the time. He built 365 "spec" houses a year. When I was first told that I couldn't believe that he could build a house a day. The trades just kept working their way down the street as the buildings progressed. 

 

Now that I have produced my "light bulb" certification of expertise on the housing market, let's have a look at what type of housing people have lived in over time in Canada. Regions will vary in statistics obviously, but probably no more than 10-15% from the national average. Stats Canada would have us believe that Canadian homeowners have increased in numbers in the 40 years between 1971-2011 from 60% to 70%. My trusty slide rule (most of you probably have never used one of these) would have me believe that if that were true, people that rented their housing would have decreased during that period from 40% to 30%. http://www.census200...g/c-g01-eng.cfm

 

I was having a little trouble sleeping tonight, so I thank you for this opportunity to bore myself back to bed. :)


  • rjag and AllseeingEye like this

#1232 Mike K.

Mike K.
  • Administrator
  • 34,560 posts

Posted Yesterday, 06:50 AM

Thanks for that, Sparky.

Know it all.
Citified.ca is Victoria's most comprehensive research resource for new-build homes and commercial spaces.


#1233 AllseeingEye

AllseeingEye

    AllSeeingEye

  • Member
  • 2,520 posts
  • LocationEsquimalt/Gorge

Posted Yesterday, 09:58 AM

Home ownership is an interesting topic. Canadians as a whole prefer to own rather than rent.

 

I bought my first house in the early 70's for $19,100, but that was double what my brother paid for his house a few years before. The interest rates for first mortgages at the time was around 10%. It was not uncommon to have two mortgages on a home especially for a first time buyer, and especially in BC with the readily available "BC Second Mortgage" program.

 

Victoria might be slightly different than the national average, but probably not as much as one might think. There seemed to be a lot of apartment buildings here but I don't think we were any different than most cities. The late 60's and early 70's saw a boom in housing construction in the single family housing market. I used to sell light fixtures to builders and knew most of the big players at the time. Hugo Hucker for example, built up a lot of Colwood which was the land of opportunity at the time. He built 365 "spec" houses a year. When I was first told that I couldn't believe that he could build a house a day. The trades just kept working their way down the street as the buildings progressed. 

 

Now that I have produced my "light bulb" certification of expertise on the housing market, let's have a look at what type of housing people have lived in over time in Canada. Regions will vary in statistics obviously, but probably no more than 10-15% from the national average. Stats Canada would have us believe that Canadian homeowners have increased in numbers in the 40 years between 1971-2011 from 60% to 70%. My trusty slide rule (most of you probably have never used one of these) would have me believe that if that were true, people that rented their housing would have decreased during that period from 40% to 30%. http://www.census200...g/c-g01-eng.cfm

 

I was having a little trouble sleeping tonight, so I thank you for this opportunity to bore myself back to bed. :)

You came up with all those calculations after 3:30am? I salute you sir (full disclosure: I once picked up a slide rule in Physics 11 in 1976 @ MDHS. Being completely befuddled I tossed it down on my desk in disgust, and have never picked up another one since).

 

My parents bought their "last" house in the UVic-Mt Tolmie neighborhood in July 1972 and paid the "unthinkable" sum of $29,900 for it; their previous home on Cedar Hill Rd, purchased almost eight years previously in early 1965, having cost them a cool $8500. Times have indeed changed. 



 



0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users