1835 replies to this topic

[gumgum]

I believe it was Oscar Wilde that said: "Buy land. They've stopped making it."

[yodsaker]

Will Rogers?

[Caramia]

Caramia said: "Residential unit sales declined 13 per cent to 27,730 units, while the average prices are up 13 per cent to $474,993."

WOW, 27,730 units, eh? I guess you must be lifting stats from Toronto or NY, because it would take Victoria 5 or more years to hit those kind of real estate units sales (cumulative) here. That number represents over 20% of our total number of residential real estate units. Considering we average about 3-4% turnover YOY, it would take a serious depression to lead to those kind of sales numbers.

Actually if you re-read my post you will notice that I didn't in fact say that. I quoted it. Where I "lifted" the stats I quoted was this article: which in turn is referencing the The British Columbia Real Estate Association - which, (wild leap of logic here) was probably including the entire of BC in it's stats. Here, I will paste the entire paragraph for you again since it appears you missed where gum gum quoted it only a three posts before mine... Here goes..

The British Columbia Real Estate Association says sales through the Multiple Listing Service dipped 1.4 per cent to $4.1 billion in April, compared to the same month a year ago. Residential unit sales also declined 11 per cent to 8,623 units over the period. The average MLS residential price in B.C. reached $478,044, up 11 per cent from April 2007. In the first four months of the year, residential sales volume fell 1.8 per cent to $13.2 billion. Residential unit sales declined 13 per cent to 27,730 units, while the average prices are up 13 per cent to $474,993.

You know, I'm probably the only mod on this board who actually agrees with some of your points. I'd enter into an educated discussion with you about it but since you can't seem to follow a simple conversation, nor conjure up basic civility toward even posters who have never criticized you or your blog, I imagine I would be wasting my time.

But what would I know? I'm just a renter.

[househuntvictoria]

Actually if you re-read my post you will notice that I didn't in fact say that. I quoted it. Where I "lifted" the stats I quoted was this article: which in turn is referencing the The British Columbia Real Estate Association - which, (wild leap of logic here) was probably including the entire of BC in it's stats. Here, I will paste the entire paragraph for you again since it appears you missed where gum gum quoted it only a three posts before mine... Here goes..

You know, I'm probably the only mod on this board who actually agrees with some of your points. I'd enter into an educated discussion with you about it but since you can't seem to follow a simple conversation, nor conjure up basic civility toward even posters who have never criticized you or your blog, I imagine I would be wasting my time.

But what would I know? I'm just a renter.

Point taken and I appologize. You are right. I didn't read far enough back in the thread and allowed myself to be distracted by the negativity.

I assumed that you were writing about the Vic market, not the whole of BC, I made an ass of myself in my comments towards you. I can see I was wrong.

[Roger]

I have prepared a number of statistical graphs and charts on the Victoria real estate market which may be of interest to the readers of this blog. The input data is from monthly reports issued by CMHC and the Victoria Real Estate Board (VREB). Single family dwellings (SFD), townhouses and condos are all covered in some detail. The format consists of slideshows which can be paused, single stepped and run full screen using the controls at the top of each presentation. The gallery is located here

This blog seems to focus on condos and you might find the following interesting:

1. Condo inventory is increasing rapidly but sales are not keeping pace: graph here

2. Condo sales are down Year-over-Year (YOY) : chart here

3. Number of active condo listings is increasing faster than other years: chart here

4. Condo average and median prices have been dropping for 3 months: VREB graph & Average/Median graph

You can see the entire set of condo graphs by clicking here

I am interested in any comments or questions that you may have. The slideshows will be updated in early May after VREB and CMHC provide their statistics for May 2008.

[Caramia]

Thanks househuntvictoria, very much appreciated.

Roger, the graphs are very interesting, and in my opinion they are good news for Victoria, although perhaps not for the real estate market.

In my (perhaps simplistic) view, the last few years have been an opportunity to add to the housing stock. Due to macro-economic conditions we've had a glut as far as financing is concerned, and, at the same time, there has been some political will toward relaxing height restrictions and densifying both downtown and, obviously, Langford. Without breaking it down into suburb vs core, and low end vs, high end product, I'm going to generalize in the most crass way and suggest that after years of having an unnaturally slow period of housing starts, where very little residential density was added especially downtown, the last few years were less like creating a "bubble" that will then pop, and more like popping a cork and releasing a huge build up of pressure. The way I see it, we are just past the fizz, and what comes next will be calmer, and more measured as it emerges.

The question I am asking myself is, did we build enough stock during this time period of ideal conditions, and, more to the point, is that stock going to become available to Victorians in such a way that it takes some pressure off the rental market? The second question I am asking myself is, have we made the planning and zoning changes necessary to be ready for the next cycle of ideal conditions for increasing density? I think because of Victoria's cautious political culture we may have been slow out the gate this time round.

If sales are dropping, my hope is that rental may become more appealing to owners and developers. If condo average and median prices are dropping then hopefully it will allow some renters to buy, freeing up that rental stock to those who need it. I've seen a little of this happen already, as the buildings I managed downtown lost tenants when The Vogue came online. Nevertheless, this time last year, when I was still managing these buildings, I could still put an ad in the paper for one day and expect 50-100 replies. I think that was a common experience to any landlord offering rental under $1000. The fact that I lost tenants to the Vogue (which would be quite a bit more expensive monthly than the apartments in my buildings) suggests to me that at least some percentage of tenants in the lower end housing in the core can, in fact, afford more, but have been hanging on to the cheaper places, not primarily for economic reasons but for location. As condo prices drop, I hope to see the economic barriers to ownership drop, and also, for condo owners who do rent their properties out, to be able to (or forced by the market to) offer lower rents.

I am not as offended as many people about those cases where stock was built at the high end and sold to snowbirds or vacationers. Although it isn't ideal when we have an affordable housing crises here in this city, if the buildings are built with sufficient quality, they will, in time, cycle down. The way I look at it, when talking about buildings and cities, we should always be trying to think 20, 50, 100 or even 500 years in advance. After all, the decisions we make today will still be in play in the long term, and buildings have a much longer lifespan (or should if built well) than humans.

... which brings me to the issue of adaptable, or "age-in-place" housing, but maybe that's for another thread.

[G-Man]

Great points Caramia,

Focusing on a 20 condo difference year over year seems pretty ridiculous when what we are trying to do is build and promote a great city.

Also I think it is incorrect to suggest that we are mostly interested in condo buildings.

I think we are mostly interested in urban core density in all variations. I think that if every single condo building being built was a rental apartment building all of us would be just as interested in following their progress.

We are not FOR condo building rather somewhat opposed to sprawl at least a lot of people on here.

Just as interested in commercial and civic buildings. We talk about what is being built which is currently condo buildings.

People have to get it out of their head that we are a condo booster site.
We are a Victoria booster site. We are an urban booster site.

[Roger]

Focusing on a 20 condo difference year over year seems pretty ridiculous when what we are trying to do is build and promote a great city.

Also I think it is incorrect to suggest that we are mostly interested in condo buildings.

People have to get it out of their head that we are a condo booster site.
We are a Victoria booster site. We are an urban booster site.

G-Man,

I was only trying to provide a more detailed set of statistics than VREB with minimal personal commentary and a simple statement of the facts. I thought it might be of interest to some of the readers of Vibrant Victoria.

This was my first post to this blog and I thought it might be a good place to exchange ideas on Victoria real estate and development. After reading that my point of view is considered "ridiculous" it is obvious that I was mistaken. I guess you need to be a "booster" of this "great city" and only making positive commentary in order to be welcome on this forum.

I have enjoyed reading this blog over the last year and do not want to stir up trouble. So I will just go back to reading on the sidelines and keep my unwanted opinions and statistics to myself.

[G-Man]

Sorry Roger I was not trying to disuade you from posting and if I did I apologize.

I have been hearing from a lot of people outside the site that we are all condo boosters and work for realestate companies and this was more directed at them then at you.

Again sorry!

Please post again!

[Caramia]

There's been a fair amount of acrimony on this thread recently. I think it is being spread around fairly liberally. I'm kind of sensitive about the idea that we are a condo booster site too. We can't even get consensus about if suburban sprawl is evil or awesome. Hell, no matter WHAT topic we post on, there is always someone who doesn't agree, and I think most of us like it that way.

Personally I found the stats you posted quite interesting Roger, I appreciate the contribution and intend to sit down and really give them some thought as soon as I get a chance, and I look forward to hearing more from you.

[Baro]

We're also not a blog, we're a forum. A blog is akin to someone's personal journal, but online for others to read and comment on.

[AuH20]

Lots of people age 50+ don't want to go south because of the medicare issues and the lunatic politics

Yeah, a lot of misguided parochial snowbirds are against personal choice in medicine and against liberating people. These lousy-tipping snowbirds with their Che shirts, maple leaf pins, and boring conversation. Who needs them? Maybe China would be a better vacation spot for these cultural relativists?

[concorde]

I want interest rates to hit 10 to 12% and then we'll see what happens with real estate prices. And for those of you who don't think it will happen, maybe you need to look at the historical interest rates in this country. It will be interesting to see what happens when mortgage payments double.......

I'm so sick and tired of people bragging about how their house prices tripled! The increased value is only on paper and we are in the biggest real estate boom Victoria has ever seen. It won't stay like this forever.

[Mike K.]

The increased value is only on paper and we are in the biggest real estate boom Victoria has ever seen.

Actually, not once between 2002 and 2007 did we reach the rate of development from the late 1980's. Back then we built several thousand units more per year for at least a couple of years than we did during the present boom, contrary to what the media's been reporting.

[mat]

Unless the US boosts interest rates substantially (which is highly unlikely) Canadian interest rates will remain near where they are now. The dollars at par seriously hurt Ontario (what doesn't?) and have an impact on resource industries in BC and Alberta.

Victoria has always been a housing destination city as any one who has lived through an Alberta winter will testify, and local housing costs compared to the lower mainland are actually reasonable. ($550.000 for a 450 square foot condo in Yale Town anyone?)

No one has mentioned the diversification of the economy here - in the 1980's Victoria was a Government town; now we have technology parks, new post secondary institutions etc. all which attract high salary professionals.

Victoria has failed in the rental market - we need new properties for students and service support workers as anyone who is advertising now for employees will testify. Many off island Uvic students who could get summer work here are heading home simply because of housing.

[spanky123]

I think that most students would prefer to work in Victoria during their breaks so that they can KEEP their accomodation. The reality however is that most of the jobs are service sector related and don't pay well (unless of course you are prepared to wait tables and show a little leg!).

With the possible exception of Royal Roads (school still out - no pun), most of the other post secondary attempts in Victoria have been financial failures. UCW has what 25 students now?!

90% of the high paying jobs in Victoria that are not owner/employer related are still with the Government. Getting a buddy on the inside to hire you as a consultant for a stupid amount of money is still the number 1 job opportunity. You can look to tech but the total number of people employed hasn't changed much over the past few years.

[yodsaker]

Yeah, a lot of misguided parochial snowbirds are against personal choice in medicine and against liberating people. These lousy-tipping snowbirds with their Che shirts, maple leaf pins, and boring conversation. Who needs them? Maybe China would be a better vacation spot for these cultural relativists?

you silly misguided troll. close the door on your way out to the south.

[G-Man]

90% of the high paying jobs in Victoria that are not owner/employer related are still with the Government. Getting a buddy on the inside to hire you as a consultant for a stupid amount of money is still the number 1 job opportunity. You can look to tech but the total number of people employed hasn't changed much over the past few years.

Spanky I think you are incorrect in your assessment of the tech sector.

It has been growing in leaps and bounds while the service sector has tanked. Also you don't need anyone on the inside to get a govt. job in this market, you just need the right skills.

[Ms. B. Havin]

@Spanky: I don't know where you're getting your info from. Check the Tech Park site -- they're sending delegations to California to recruit coders, and making videos aimed at the Toronto talent pool, to convince them to come here. If you're a good programmer, you're totally in demand here.

[househuntvictoria]

Spanky I think you are incorrect in your assessment of the tech sector.

It has been growing in leaps and bounds while the service sector has tanked. Also you don't need anyone on the inside to get a govt. job in this market, you just need the right skills.

I actually agree with Spanky here. The tech sector, despite all the hype, has not grown much either in terms of percentage of total economic activity or total number of people employed when measured against the regional economy. Much like the service sector, the tech sector flows and ebbs with the US economy simply because it lives to serve the US economy/tech sector. We're like a car parts factory in Ontario; most of our customers are bigger US tech firms. Take Carmanah, a so-called local tech success story, still NOT profitable.

Neither has gov't grown much. Gov't employees wages have been frozen for the past decade, the contracts are basically pegged to inflationary cost-of-living increases that don't actually increase with the true cost of living. The actual numbers of gov't employees is down by almost 10,000 from 2001 despite a recent hiring binge. Gone too are the days where the middle-class gov't employees make enough to afford average homes in town. You have a small number at the high end ($75K plus directors and barely 50 ADMs who make 6 figures) and the majority of professional gov't employees here are stuck below $60K. Non-pro gov't employees cap at $40Kish.

Gov't has a hard time hiring simply because they can't entice people to pay the cost of living. Most gov't employees coming out of university carry student debt that precludes them from getting into RE at today's prices. This was one of the prime motivators for the Pacific Leaders debt forgiveness program. Trouble with that program is it only applies to BC student debt and not federal. BC student debt barely represents 20% of the total student loans granted in the province. So the typical student graduating with a bachelor's today is carrying $30K worth of debt and can expect the program to cover $6K if they stay for 3 years.

Gov't wages in high tech and sciences are 30% below market rates in Victoria, though they get better benefits and utilize the pension trap for retention. A IT pro can earn upwards of $70-$90K in the private sector. Most gov't IT jobs start around $45K and cap at $60K. You have to really like flex days to work in this environment. Though the people I know doing gov't IT rarely get them because they are so short staffed they're always getting asked to work OT.

There is no incentive to build rental stock here. If the city really wanted to do something about it, they'd look to other jurisdictions that use interest free loans for developers to entice rental stock building. This city's plan for rental stock "we'll just ignore illegal suites until someone complains or an Asfar builds one."

The real wage growth has occured in the construction sector where anyone with half a brain has changed their employee/employer relationship to contractor/sub-contractor and bill themselves out at rediculously inflated wages. Construction costs are not sky-rocketing simply because commodity prices have jumped. Labour has "gone through the roof" and many tradespeople are working for $50 plus an hour and much of it in cash. It is a phenomena that cannot and will not last any longer than the housing market will support it. If the market changes, so will the labour costs and the cycle will become self-perpetuating on the downside as much as it did on the up, if not more.

Stats Can numbers are never completely accurate, but I still give more credence to the theory that more families' income in this town is under $70K than over. Long-term homewners have been using the appreciation in their property values as an ATM which is well documented by banks. With local property values barely reaching a 4% YOY growth in April, you can bet banks will become more careful with how much HELOCing they do. Once this starts, which I argue already has begun, every other sector will begin feeling, perhaps starting with trades. After all, you may be able to eat your granite countertops, but they won't keep you alive long.