5833 replies to this topic

[VicHockeyFan]

Stress test people are less than 3% of buyers.  I stick with my 14% prediction.

Edited by VicHockeyFan, 24 October 2017 - 09:03 PM.

[lanforod]

Stress test people are less than 3% of buyers.  I stick with my 14% prediction.

 

Another stat from your book eh. I believe you posted the math somewhere, but I still call BS. Having to qualify at 2% higher is not insignificant at all. Most estimates are around 10% of buying power will disappear.

[Mike K.]

The stress test will apply to 100% of people who seek financing via banks. There will be opportunities to avoid the test if you have 20% down and seek alternate lending but that might cost you a higher rate.

Also, the changes to small business taxes that Trudeau has backed away from to a large degree continue to have an effect. Few want to make a big move if they don’t know what the government wants to do to their earnings.

[rjag]

Stress test people are less than 3% of buyers.  I stick with my 14% prediction.

 

It applies to anyone who wants to renew their mortgage where they want to increase it, ie tap into the increased equity in their property. Or if you change lenders. 

 

Its a hostage situation for the banks, clients cant threaten to leave if they are on the edge and may not meet the stress test standards. Makes the banks position stronger.

 

I'm glad I paid my mortgage off 10 years ago....     

[Citified.ca]

Between 2006 and 2016, the population grew by 11.4% while housing increased by just below 11.2%. Between 2011 and 2016, the population grew by 6.7% while housing increased by less than 3.19%.

 

Residential construction lags behind Victoria's population growth: census

http://victoria.citi...-growth-census/

[Mike K.]

It applies to anyone who wants to renew their mortgage where they want to increase it, ie tap into the increased equity in their property. Or if you change lenders. 

 

Its a hostage situation for the banks, clients cant threaten to leave if they are on the edge and may not meet the stress test standards. Makes the banks position stronger.

 

I'm glad I paid my mortgage off 10 years ago....     

 

This will also push people into non-bank lending scenarios.

[VicHockeyFan]

And that’s just the market at work. Non bank lenders are already growing by 25% per year.

https://www.google.c...r-mortgages/amp

[Mike K.]

It's also an industry that will face significant challenges as banking and lending regulations change. We could, theoretically, see a near fizzling out of independent mortgage brokerages by 2025/2030.

 

There's a lot of interesting stuff that happens when you secure a mortgage via a small brokerage or an independent broker. The brokerage could also suddenly disappear on you in five years when the market changes. That doesn't build consumer confidence.

[tjv]

I think a lot of this market is driven by people cashing out of Vancouver, coming here, buying a similar house and putting $2 million in the bank.  There is no other reason why the market suddenly took off 18 months ago, but if someone can come up with other reasons I'm all ears

 

I don't see the influx of off island money stopping anytime soon.  There might be a lot of people complaining about high housing prices or stress tests, but I don't see it having an effect on the market.  Also real estate developers wouldn't be continue breaking ground on towers and subdivisions if the market was cooling

[LeoVictoria]

 

Residential construction lags behind Victoria's population growth: census

http://victoria.citi...-growth-census/

 

 

"Expanding the population growth and new home construction window to ten years, Victoria’s population grew 11.4% between 2006 and 2016 while the supply of housing increased by less than 11.2%."

 

It would seem that residential construction is exactly keeping up with population growth, not sharply lagging.

Edited by LeoVictoria, 25 October 2017 - 09:21 PM.

[VicHockeyFan]

It's also an industry that will face significant challenges as banking and lending regulations change. We could, theoretically, see a near fizzling out of independent mortgage brokerages by 2025/2030.

 

There's a lot of interesting stuff that happens when you secure a mortgage via a small brokerage or an independent broker. The brokerage could also suddenly disappear on you in five years when the market changes. That doesn't build consumer confidence.

 

When you are the customer, borrowing the money, who cares where it comes from?  Someone will always be in charge of making sure you pay it back.  And as long as you do diligently, they will let you keep renewing too.

[tjv]

 

Between 2006 and 2016, the population grew by 11.4% while housing increased by just below 11.2%. Between 2011 and 2016, the population grew by 6.7% while housing increased by less than 3.19%.

 

Residential construction lags behind Victoria's population growth: census

http://victoria.citi...-growth-census/

 

Based on this and supply and demand principles prices can only go up then

[MarkoJ]

Based on this and supply and demand principles prices can only go up then

 

Keep in mind census is a tad old....supply is slowly catching up.

[MarkoJ]

I think a lot of this market is driven by people cashing out of Vancouver, coming here, buying a similar house and putting $2 million in the bank.  There is no other reason why the market suddenly took off 18 months ago, but if someone can come up with other reasons I'm all ears

 

One of the reason, but I don't think it is the sole reason. How do you explain the much bigger (percentage wise) run up from 2002 to 2007?

[Jackerbie]

"Expanding the population growth and new home construction window to ten years, Victoria’s population grew 11.4% between 2006 and 2016 while the supply of housing increased by less than 11.2%."

 

It would seem that residential construction is exactly keeping up with population growth, not sharply lagging.

 

Depends which housing figure is being used as a measure, though: increase in the number of dwellings, or increase in the number of dwellings occupied by usual residents? For example, the number of private dwellings in Oak Bay increased by 68 from 2011-2016, but the number of number of dwellings occupied by usual residents decreased by 27. Population increased by 79.

[Mike K.]

A housing market needs breathing room, i.e. you do not build 1:1 housing-to-population growth if you want a healthy and balanced housing market. What we have today is an unbalanced housing market.

 

1996 - 2001: 9.12% housing increase, 2.5% population increase

2001 - 2006: 9.32% housing increase, 5.83% population increase

2006 - 2011: 7.7% housing increase, 4.4% population increase

2011 - 2016: 3.2% housing increase, 6.7% population increase

 

For the first time in 20 years (if not longer) housing construction has actually lagged population growth, and by a significant margin. Expanding that to ten years, when we still had a significant increase in supply over population growth, the disparity over the last five years was so great that it still showed higher population growth than the growth in housing supply.

[Nparker]

And yet every multi-unit development proposal in the CoV is being scrutinized for being too dense. How do so many people not understand the basics of supply & demand?

[Mike K.]

Oh the concept is very well understood, but that is not a concern to those who are already in the market and already established.

[spanky123]

A housing market needs breathing room, i.e. you do not build 1:1 housing-to-population growth if you want a healthy and balanced housing market. What we have today is an unbalanced housing market.

 

1996 - 2001: 9.12% housing increase, 2.5% population increase

2001 - 2006: 9.32% housing increase, 5.83% population increase

2006 - 2011: 7.7% housing increase, 4.4% population increase

2011 - 2016: 3.2% housing increase, 6.7% population increase

 

For the first time in 20 years (if not longer) housing construction has actually lagged population growth, and by a significant margin. Expanding that to ten years, when we still had a significant increase in supply over population growth, the disparity over the last five years was so great that it still showed higher population growth than the growth in housing supply.

 

It isn't 1:1 either because more than 1 person lives in a house. Having said that, home occupancy ratios have been dropping in Victoria in recent years. Maybe a solution is to mandate that you cannot live in a unit by yourself! I am sure that the lefties who advocate car sharing and job sharing will be all over that!

[Nparker]

... I am sure that the lefties who advocate car sharing and job sharing will be all over that!

What "lefties" are advocating job-sharing? Where does one even find a job-share? Having part-time employees seems more like a corporate initiative than one driven by the "people".