5833 replies to this topic

[Greg]

I'm not opposed to making development quicker and easier, but won't developers just use that to make more mid-market and luxury condos? Or would the faster process save enough money to lower the price of units?

In the very least, newly built high-end condos will lower the price of existing stock that is not so new and not so nicely-built. Even if the new stock is only directly accessible to some (folks who can afford it) it still has an impact on the overall supply-and-demand relationship.

 

/you know, until the old stock becomes worth more as a tear down. 

[jonny]

I'm not opposed to making development quicker and easier, but won't developers just use that to make more mid-market and luxury condos? Or would the faster process save enough money to lower the price of units?

 

Say 20% of the cost of building a condo is a result of the time it takes for approvals and the political sideshow involved to get a project through (paying for bonuses, city fees, going back to re-design 4 or 5 times, etc.). We touched on this the other day when speaking about building costs in Vancouver. This in some ways may be forcing developers to sell only mid level to higher end projects. If nobody can make money selling lower-end units because the cost of development is so high, nobody is going to offer those units.

 

Assume the long, drawn out municipal approvals process in Victoria adds $50,000 to the development cost of every condo when compared with a theoretical easy breezy process. That makes turning a profit on a $250,000 unit much harder.

 

 

It would be far better to just make it much, much easier and quicker to develop. Then we could get multiple projects planned and completed in a couple of years rather than the 5 to 10 year process it takes now.

 

I think we should take the OCP two steps further.

1. Blanket re-zone entire neighbourhoods for the density and height permitted in the OCP.

2. If your building meets the OCP guidelines, all you need is a rubber stamp from the Planning and Engineering Depts.

[lanforod]

Additionally, the long process increases the risk of market downturns and crashes.

[Mike K.]

A developer has confirmed that the City of Victoria component of the price of a condo is approximately $10,000 per unit. And that's if things proceed without turmoil.

I would imagine the cost for a project like Northern Junk or 212 Cook would be higher.

[Mike K.]

As has been murmured as of late, pre-sale price increases are coming, and they appear to be starting with The Wade development.

 

With omnipresent construction activity transforming Victoria's skyline and densifying neighbourhoods, Victoria developers are easing into higher pre-sale condominium prices to stay in-check with a changing market. At The Wade (pictured), a mixed-use condominium and commercial development coming to Cook at Johnson streets, pre-sale home prices will rise at the end of this week.

 

Price jump: Pre-sale condo prices to inch up ahead of spring buying rush

http://victoria.citi...ng-buying-rush/

 

Pre-sale condominium prices throughout Greater Victoria are on the rise, according to recently announced price adjustments by several developers.

Faced with rising construction and development costs – and strong demand from buyers in an inventory-starved marketplace – developers are starting to scale up unit prices to keep construction costs from jeopardizing the viability of their projects, and as a competitive measure.

Although pre-sale purchasing opportunities in Victoria are quick to disappear due to the rapid uptake of inventory, proponents behind pre-sale offerings routinely assess their remaining inventory price sheets as the final tally of delivering their complex projects becomes clear. [Full article]

[DavidL]

I've thought that a solution for entry level housing could couple market properties and limited market properties with bonus density in developments, providing both an incentive to developers to build the units and non market housing in which owners can build some equity.  The limited market component could be modeled after some of what Whistler did years ago which was to cap appreciation rates by covenant and have residency requirements that must be met, such as must be owner occupied, must be a resident of whatever municipality you're in etc etc.  Subsequent resale would require that the same criteria are met.  That product could also be brought to market at under market rates and would serve as a bridge between rental housing and market housing.

 

Dead in the water though as it wouldn't be free housing and would require greater density than CoV seems willing to contemplate.

[Jason-L]

It'll be interesting to see what effect rising interest rates in the US has on things.

http://www.cbc.ca/ne...rates-1.4026314

A couple percentage points up on a mortgage could affect things a lot, I'd expect?

Edited by Jason-L, 16 March 2017 - 08:09 AM.

[jonny]

Rates are very unlikely to shoot up a couple percentage points, though. They change them at like 0.25% at a time. Hopefully any rate increases happens slowly, which gives borrowers time to adjust.

 

There's absolutely no doubt a 2% increase in mortgage rates would have a big impact.

[Mike K.]

Million dollar homes now account for nearly 50% of Victoria's residential real-estate listings

http://victoria.citi...state-listings/

[Szeven]

The monthly MLS stats used to break out sales over 1 and 2 million. Anyone with data feel like doing some stats on sales of these high prices houses? I only have anecdotes, but I really believe outside the south east corner houses over 1.2 ish just don't sell quickly.

[Mike K.]

Apparently the median life of listings for properties below $1-million is 14-days and its 44-days for properties above $1-million, according to someone who left a comment on the Citified article.

[FirstTimeHomeCrier]

Came across this article today on CBC. It's about young buyers in Toronto, but applies to those of us in BC as well. As housing prices increase and mortgage rules are tightened, first time home buyers are struggling to enter the market. Even when they can find something affordable, they end up losing bidding wars.

 

The article makes an interesting point about starter homes. Many families who bought starter homes are now unable to afford to move up to a larger place. As they stay longer in their starter homes, they put more money into renovations, making that home less affordable to first time buyers even if the current occupants finally move on to something better.

 

There is a serious lack of starter homes in Greater Victoria (and by homes I really mean condos--no SFHs can really be called starter homes at their current prices). I get email alerts from my agent when any pet-friendly condos <250k are listed within a reasonable distance of the urban core or Esquimalt. There are currently 12. Of those, two are studios (430-450 square feet, not great for anyone hoping to have a family), four are one bedrooms, and six are two bedrooms. The typical options are:

a) tiny, newish and relatively nice studios

b) one bedrooms that are older but in decent shape, maybe a few flaws (shared laundry, ancient appliances, worn out carpets, etc.)

c) two bedrooms that are older in okay shape, in a less desirable neighbourhood like Burnside or old Esquimalt (I'd be happy with one of these, but they tend to be just above what I could afford)

d) foreclosures/court ordered sales

 

I suspect there are more than three or four people trying to find an affordable condo with enough room for a family, which means even if you can see yourself in one of the above properties, you might miss out or get caught in a bidding war.

 

Another interesting point: about 40% of Canadians age 20-29 are living with their parents (either never moved out, or moved back in). For some of us, that's not a reasonable option (my mother and her partner live in a 2-bedroom house in Nanaimo; my father and his wife live in Sidney in a larger house but with an ever-changing crowd of stepsiblings, extended family members in need of a couch, and furry creatures). I moved out at 17 to attend University, and I don't have any intention of moving back.

 

My partner, however, finds it hard to see the advantage of buying a cramped condo after years of living rent-free in his parents' 3-bedroom SFH with a yard. He's at least temporarily given that up to rent a small condo with me, but he can't imagine living long-term in a smaller space or persuing a career that can produce the income necessary to buy a SFH anywhere within hundreds of kms of Victoria. Since we're undecided on starting a family (neither of us are ready now, and he's not sure if he'll ever be ready) and his parents are too kind to give him the boot, permanently moving out makes no sense to him.

[VicHockeyFan]

Kettle Creek has $399,000 houses.

 

EDIT:  Sorry, 2011 re-sale > > https://www.realtor....Columbia-V9B0K6

[FirstTimeHomeCrier]

Kettle Creek has $399,000 houses.

 

EDIT:  Sorry, 2011 re-sale > > https://www.realtor....Columbia-V9B0K6

Still out of our price range. I did manage to find a one bedroom SFH in Lake Cowichan (only about 90km from downtown Victoria) for $209,000. So hundreds of kilometres was hyperbolic. But I'm not sure I could get a job in my field that pays enough in Lake Cowichan, and I definitely wouldn't want that commute.

[Janion Fan]

How about something like a 2-bedroom, 1200 square foot, very dated but beautifully positioned condo in Fairfield (just saw it on Realtor.ca). Yes, it's $175K over your $250K budget but, if you could rent that second bedroom for $600/month, that would go some ways towards offsetting the mortgage both from a qualifying and an outgoing monies standpoint.

 

There are ways and means, you just need to dig deep for solutions instead of looking for something obvious. It's not going to be easy and, I certainly feel for anyone young person trying to get on the housing ladder. Not everyone's going to be able to do that and, that's really unfortunate but, you sound like someone who is intelligent, with good prospects and a bright future. 

 

I wish I could give you, and our 18 year-old daughter, a soothing answer but, I can't. If you want something, really want something, you need to work hard and long, make sacrifices, commute, share, walk, bike, whatever it takes. Even 30 years ago, when I was trying to buy in Toronto, it wasn't easy-peasy. The phrase "house poor" was everywhere. If a SDH is your dream and your priority, though, go for it 100%, just be prepared to do whatever it takes. 

 

This seems an obvious thing and perhaps something you don't want to, or can't, do but, it sounds as if you, and your partner, have parents with what are probably quite nice properties, at the very least, well-located. It wouldn't take a lot more to boost you into the realm of purchasing something that you could rent out a portion of. Is there any way they can help? Co-signing?

 

Also, you say your parents are in Nanaimo. I'm in Nanaimo. The market here is much less than Victoria but, it's also appreciating nicely. I know of people who DO commute from here to there, out of necessity. It IS an option (read above, sacrifices), if you're willing. If only for a year or two, to build some equity.

 

Or, move into that lovely 3-bedroom of your partner's parents. Cramped - yes, cool - no, a big money-saver - absolutely. Just think of what a year's sacrifice of privacy would add to the mortgage coffers!

[VicHockeyFan]

I'd say buy a house with a suite WITH someone else with common goals.  That's not perfect, but sometimes you find the right match.  You go into it with signed intentions, including dispute mechanism (like arbitration) if down the line there is difficulty.  

[UDeMan]

^{this place is not bad, 2 bedroom, insuite laundry and allows pets}

^{this area is not far from town, on bus routes and would take 10-15 minutes to bike downtown}

^$249,900

 

^{https://www.rew.ca/p...earch=474801877}

[Mike K.]

The cheapest free-standing housing in Greater Victoria is about $250k. It's out in Sooke. Not exactly an inspiring property, but yeah...

[VicHockeyFan]

^{this place is not bad, 2 bedroom, insuite laundry and allows pets}

^{this area is not far from town, on bus routes and would take 10-15 minutes to bike downtown}

^$249,900

 

^{https://www.rew.ca/p...earch=474801877}

 

Ya, that complex is alright, I've done work in there.  Walk-ups too, no elevators, so you get forced exercise.

[LJ]

Buy a mobile home on a pad, or a new/used one and put on a pad.