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Victoria's residential rental market


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#321 tjv

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Posted 21 April 2018 - 02:05 PM

Probably not but if you want more supply....

My brother in the US just increased all his rentals by 20% again. 2 bedroom 2 bath 1100 sf in the upstairs of half a duplex is 4000 US a month.

#322 sdwright.vic

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Posted 21 April 2018 - 05:08 PM

^What's that market he rents in?
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#323 rjag

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Posted 21 April 2018 - 05:39 PM

Those types of rents in Redmond

#324 tjv

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Posted 21 April 2018 - 07:44 PM

^What's that market he rents in?


Boston

#325 sdwright.vic

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Posted 22 April 2018 - 07:38 AM

Boston proper? Then that makes sense for the amount. But Boston had rent control until 1994 and some buildings are still under it. There is also a huge movement to return to it because of wild $400 A month rent increases occurring regularly on tenants that rented in what was a undesirable neighborhood that suddenly is and landlords going overboard with the increases.
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#326 tjv

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Posted 22 April 2018 - 08:48 AM

Boston, Cambridge and Sommerville I believe is where his units are.  There is a movement all over the entire Boston area to re-establish rent controls, but if that happens he will immediately evict the tenants and sell as strata units

 

I was shocked to see salaries so low in Greater Boston in general too, even as a professional in my field they are low in comparison to the cost of living

 

I spoke to some people from New York and 2 hours is common for a commute each way.



#327 Stephen James

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Posted 25 April 2018 - 06:26 AM

Boston, Cambridge and Sommerville I believe is where his units are.  There is a movement all over the entire Boston area to re-establish rent controls, but if that happens he will immediately evict the tenants and sell as strata units

 

I was shocked to see salaries so low in Greater Boston in general too, even as a professional in my field they are low in comparison to the cost of living

 

I spoke to some people from New York and 2 hours is common for a commute each way.

2 hours is not uncommon for a person living in Toronto, Vancouver, Montreal...even Calgary.

 

Rent control guarantees a lack of supply - first page, first chapter, any economic text.

Supply changes pricing.

We'll probably get it backwards again... lol.


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#328 sdwright.vic

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Posted 25 April 2018 - 06:29 AM

Yes, but no rent control also has cities with severe lack of supply. I think it's all municipality driven myself. High property values mean more tax dollars on property taxes.
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#329 tjv

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Posted 25 April 2018 - 06:52 AM

2 hours is not uncommon for a person living in Toronto, Vancouver, Montreal...even Calgary.

 

Rent control guarantees a lack of supply - first page, first chapter, any economic text.

Supply changes pricing.

We'll probably get it backwards again... lol.

I am not saying its not uncommon, my message is basically people in Victoria should be prepared to start to learn to travel from Duncan, Chemanius, Ladysmith, and Port Renfrew if they want to live here and buy a house

 

I agree also, rent control needs to go and free up supply.  You rent therefore you pay the going price.  Landlords are not supposed to subsidize renters, they are in business to make money PERIOD



#330 Stephen James

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Posted 25 April 2018 - 07:11 AM

I am not saying its not uncommon, my message is basically people in Victoria should be prepared to start to learn to travel from Duncan, Chemanius, Ladysmith, and Port Renfrew if they want to live here and buy a house

 

I agree also, rent control needs to go and free up supply.  You rent therefore you pay the going price.  Landlords are not supposed to subsidize renters, they are in business to make money PERIOD

 

Yes, but no rent control also has cities with severe lack of supply. I think it's all municipality driven myself. High property values mean more tax dollars on property taxes.

I think the second example is correlation not causation.  

 

In NY the demand will outstrip the physical possibilities of supply for long time - it's NY.  Whether you like the place or not, there are many practical reasons why a person or business might find it most effective and convenient to be located there.  Closer to the centre the better = $$$$$.

 

The friction that causes a lack of supply in municipalities is the time and effort it takes to approve projects other than single family homes.  NIMBY is real, powerful and effective with muni politicians and we have a lot of it.  Do you think Moss St will be quiet for an apartment building?  Do you think Cook St Village will be quiet if the city wants to approve a 200 unit high-rise apartment?  Not on this island, hahahaha!

 

This is called "regulatory capture."  We, and most munis have established a painful, tedious process that favours the existing single family homeowners (and I'm a very fortunate one) by giving them the power to severely slow or stop the development that will meet demand.  As a result, my house is worth more than it should be.  The more valuable the land (think closer and more convenient for the lady who comes to help me), the more effective is the NIMBY effort because they are typically educated, eloquent, paying high taxes and might know the right people.  So the system works very well to prevent the very thing that will solve the problem.

 

On a related note, and one of the reasons I like living in JB so much, is that it doesn't look like Fairfield, Oak Bay, Uplands, Saanich.  This is a personal opinion.  I spent many years living in a neighbourhood in Ontario that was similarly homogenous - everyone from a similar social-economic group - odd that we prefer this except, I suppose, that it further protects the value of my home.  This in contrast with JB where it feels more like every socio-economic group is represented.  There might be something to try in cities... how does a city change in it's relationship to all the citizens if no area is segregated?  How does decision making change?  

Just a thought experiment....


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#331 Bob Fugger

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Posted 25 April 2018 - 07:59 AM

On a related note, and one of the reasons I like living in JB so much, is that it doesn't look like Fairfield, Oak Bay, Uplands, Saanich.  This is a personal opinion.  I spent many years living in a neighbourhood in Ontario that was similarly homogenous - everyone from a similar social-economic group - odd that we prefer this except, I suppose, that it further protects the value of my home.  This in contrast with JB where it feels more like every socio-economic group is represented.  There might be something to try in cities... how does a city change in it's relationship to all the citizens if no area is segregated?  How does decision making change?  

Just a thought experiment....

Fairfield, with one of the highest if not highest proportion of renters in the region, is homogenous?  Cool.



#332 tjv

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Posted 19 June 2018 - 05:38 PM

So I was looking at buying a condo as an investment.  2 bedroom 2 bath priced at 350k, about 35 years old, needs some updating inside, the kitchen looks original, etc.  Its perfectly livable but its dated

 

Then I crunched the numbers.  Rent of $1600 per month, less the strata fees, mortgage costs, landlord insurance, allowances for repairs, etc, etc.  Holy crap it was going to cost me $980 per month out of pocket just to hold this thing.  Just shows you that rents have a long way to rise still.  I passed of course



#333 Casual Kev

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Posted 19 June 2018 - 06:19 PM

Rent sounds about right for an unit of its age. But I wouldn't pay 2.6K/month as an owner either. 



#334 lanforod

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Posted 19 June 2018 - 07:29 PM

The rent would cover the mortgage basically, and very little else. Certainly not worth the cost of the down payment, IMO.



#335 spanky123

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Posted 19 June 2018 - 08:15 PM

^ Thus why we have had so little investment in new rental housing over the past decade. Unless you have access to really cheap money and/or Government subsidies then the only way you are going to make money is if the property substantially appreciates in value and that is never a given.



#336 Mike K.

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Posted 19 June 2018 - 09:05 PM

Economies of scale allow developers to make rental developments work. We have 50% more rental units than condo units currently under construction in the region and it’s been that way for some time. Currently over 5,000-units of rentals are openly planned compared to 3,000 condo units.

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#337 tjv

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Posted 20 June 2018 - 07:58 AM

I'd have to run the numbers on new construction rentals to see.  I can only assume they are betting on the increased cost of real estate itself which is in no way guaranteed

 

Long story short, I would expect rents in the CRD to continue to rise rapidly over the short term



#338 Mike K.

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Posted 20 June 2018 - 09:35 AM

You’ve got institutional backers looking for steady, safe and reliable income with upwards potential and they’ve found it in Victoria. These players don’t bat an eye funding a $50 million project that will take 25 years to pay off. They’re in it for the very long term.

We’re seeing that with the massive acquisitions of late. $20, $30, $40 million gets dropped and it’s just a chip off their shoulder.

We will, however, see some balance infused as rates rise and the carrying costs grow, but if rental rates continue to rise it’ll keep that industry investment-minded.

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#339 tjv

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Posted 20 June 2018 - 09:59 AM

^not disputing that, but just imagine what would happen if the government removed all the rules and regulations on rental property.

 

Carrying costs are also a big cost and as interest rates rise that will put a significant pressure on rents.  I can see interest rates rising 0.5 to 0.75% by the end of the year



#340 spanky123

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Posted 20 June 2018 - 10:05 AM

You’ve got institutional backers looking for steady, safe and reliable income with upwards potential and they’ve found it in Victoria. These players don’t bat an eye funding a $50 million project that will take 25 years to pay off. They’re in it for the very long term.

We’re seeing that with the massive acquisitions of late. $20, $30, $40 million gets dropped and it’s just a chip on their shoulder.

We will, however, see some balance infused as rates rise and the carrying costs grow, but if rental rates continue to rise it’ll keep that industry investment-minded.

 

No question about that. I am hearing about lots of sub 3% cap rates these days. 



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