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UNDER CONSTRUCTION
Washington
Use: townhome
Address: 3080 Washington Avenue
Municipality: Victoria
Region: Urban core
Sales status: pre-sales
Washington is a collection of traditionally-inspired 2, 3 & 4-bedroom townhomes in historic Burnside Gorge... (view full profile)
Learn more about Washington on Citified.ca      Official website: https://formwell.ca/washington/?utm_source=citified&utm_medium=listing&utm_campaign=intro
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[Burnside-Gorge] Washington | Townhomes


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#21 Casual Kev

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Posted 08 December 2021 - 08:45 PM

Every day young people are buying homes in this city. But they have to start with condos, build equity, and move up. Lots of them don’t want to do that, they want the Oak Bay bungalow and a BMW straight out of university.

Back when your mom and dad bought their rancher that area was the literal sticks, next to cow fields, in a small city on an island the rest of Canada barely knew existed. Times were different, and most people would have thought Victorians were nuts living in such a small backwards place when the big money was in Edmonton and Winnipeg and Toronto. So there was opportunity lost back then, living in cheap little Victoria.

I’d prefer it if our society spent less time feeling sorry for people wanting Step G, from Step A, and instead communicated the realities of homeownership and how to get there (key point: complaining on Twitter doesn’t make an iota of difference). We like to think of Victoria in 1960 as the same desirable place it is today, except (whoa!!) housing was so cheeeeeeap, man! But Victoria then wasn’t what it is today, it was not as desirable and it had little employment. People cut their teeth elsewhere then retired to slow, quiet little Victoria where a pain in the butt ferry had to move you to the mainland if you wanted to get some business done.

 

That's a twisted way to look at the current situation. There's always been a large segment of the population that has never been able to afford a home even when it was relatively cheap, and now the current housing structure is that you need considerable income and capital just to get your foot in with something small that will take up the bulk of your money, with the understanding that it's not a suitable long-term solution. In a market like this, housing is an investment that rivals most financial assets in returns with far better leverage... the people who have capital always wins, and everyone else is running uphill, tripping over each other trying to catch up. "Schrodinger's Victoria" aside (where we write daily about how terrible the city has become, yet simultaneously justify skyhigh prices by saying it's better than ever), this generation is in an objectively worse position to buy a home.


Edited by Casual Kev, 08 December 2021 - 08:45 PM.

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#22 Nparker

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Posted 08 December 2021 - 09:13 PM

My parents bought their first house in the summer of 1966, in the then booming community of Powell River (back when resource-based industries weren't vilified). They put down $5000 cash with a $15,000 mortgage (at about 5.5% interest). The house was brand new, around 2000 square feet and sat on a decent sized city lot. At the time, my father, the sole income earner for the family, was making about $7500/year. They had one 18-month old child and another on the way (me). We got by decently, but there were fewer luxuries in those days to encourage excess spending.

Today, I couldn't even afford to buy my existing condo based on my salary, and yet it wasn't a stretch at the time I purchased it back in 2005.

To say it's a whole new ballgame these days, is an understatement.


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#23 Mike K.

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Posted 08 December 2021 - 09:17 PM

Not quite it was nowhere near the sticks - I don't know where you think that house is but I can assure you there have never been cow fields anywhere near it, and the density and even the look and feel of the neighborhood today is exactly what it was when they bought it, which was certainly not 1960. Nor was it a rancher - nothing has changed on any of the roads in that Gordon Head/Cedar Hill X Rd neighborhood other than more commercial way down at the bottom of the hill at Shelbourne and Cedar Hill X Rd.

I think you have your coordinates mixed up Mike. What, do you think they've sold off parcels of Mt Tolmie park and densified it? :)


Hold on. I thought you guys lived in the Cedar Hill/McKenzie area? University Heights was built on a farm. Gordon Head was a hayfield up until the mid-century.

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#24 Mike K.

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Posted 08 December 2021 - 09:21 PM

That's a twisted way to look at the current situation. There's always been a large segment of the population that has never been able to afford a home even when it was relatively cheap, and now the current housing structure is that you need considerable income and capital just to get your foot in with something small that will take up the bulk of your money, with the understanding that it's not a suitable long-term solution. In a market like this, housing is an investment that rivals most financial assets in returns with far better leverage... the people who have capital always wins, and everyone else is running uphill, tripping over each other trying to catch up. "Schrodinger's Victoria" aside (where we write daily about how terrible the city has become, yet simultaneously justify skyhigh prices by saying it's better than ever), this generation is in an objectively worse position to buy a home.


Have you spoken with your bank about buying a home? Have you met with a broker to discuss your situation?

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#25 Casual Kev

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Posted 08 December 2021 - 09:59 PM

Have you spoken with your bank about buying a home? Have you met with a broker to discuss your situation?

I was in fact in the market last year but chose not to buy. I can figure myself out, but given what I saw many others are increasingly unable to. 

 

The average cost of holding a mortgage isn't actually that high because the interest rates are so low - it's "only" as bad as the stagflation years. But in order to secure said mortgage you evidently need a sufficiently high income or collateral. The problem here is that if you have a modest income, even scrounging every penny isn't sufficient because by the time your savings come along equity gains will have wiped out what you gained. Why does that happen? Because when holding real estate consistently beats the market you're literally competing with investors from all over the world, on top of residents who are wealthier than you. It's easier and more profitable than ever to go on a property-buying spree... if you have a lot of money. If you don't, tough luck.


Edited by Casual Kev, 08 December 2021 - 10:00 PM.


#26 Mike K.

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Posted 09 December 2021 - 08:13 AM

It happens because everyone wants to live here, and there has never been a time over the last several decades that you didn’t need a half decent income to buy a home here.

We’ve all gone through the tough part. When I bought my place it was by the skin of my teeth, I mean I just barely did it as part of a last ditch kick of the can. Hardly anyone has it easy when trying to enter any desirable market, believe me.

But once you do, now you’re building equity. Part of it might be a market uplift, part of it will be what you’re paying for your mortgage.

But remember, everyone loves to complain about a rising market but last year at the onset of COVID the “experts” all said the market would crash and be sent into a tailspin. For the majority of buyers, though, their home is not a get rich scheme, it’s their home. They plan to hold it for the long term so day-to-day market moves are not a factor (most can’t even tap into the golden egg HELOC the “experts” seem to think is just sitting there available in full to all who want it, unless their income is high enough).
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#27 Casual Kev

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Posted 09 December 2021 - 10:17 AM

The crux of the issue is that homes are increasingly not being bought as homes, but as investment vehicles. Once the expectation becomes that shelter is now an asset on par with financial instruments or production factors, it doesn't matter how hard the masses "grit their teeth".

You mentioning that access to HELOCs isn't that easy is kinda the point - for new buyers stretching their budget, it's still a big big risk even if equity keeps soaring - they first need to beat the transaction costs, them they need to pray interest rates and property taxes remain very low, all of this independent of using their homes for their intended use as shelter.

For people who are already free of mortgages, or with plenty money to spare, it's a lot easier for them because they will have far better access to credit and be able to bear the risk of market fluctuations. Theoretically, that's always been the case but because of the impressive returns on real estate that's the demographic taking up more and more homes. And that evidently crowds out people seeking out primary residences. With the expectation that one buys a "starter studio" then leverage the equity/rental income to buy something else... it's literally making being an investor and serial property owner out of new buyers, which is an awfully tall barrier to entry.

And I mean sure, there's a lot more people coming into BC nowadays and that drives up demand. But the problem is that the CRD doesn't really have "cheaper" suburbs (aside from Langford) or urban projects to buy into so that obviously compounds the above problem. You'd think Metchosin, Sooke and Central Saanich would be the Langford of the 90s nowadays, or that municipalities like Oak Bay and Saanich would have substantially densified - none of that obviously happened.

#28 Mike K.

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Posted 09 December 2021 - 11:55 AM

Can you show us evidence from Greater Victoria that "homes are increasingly not being bought as homes?"

 

I have yet to see any figures that suggest this is the case.

 

I mean we can come up with a million different boogeymen to explain away the reality of the situation as us vs them, or foe vs friend, but I know more older people with multiple SFDs that they bought as investments in the 80s, 90s and 00s that they are now selling to resident owners, than I know people buying SFDs for the purpose of investment.

 

I'm sure there is more of that happening with condos, as there always was, though. For the 90s through to 2015 there were no purpose built rentals being built, zilch. Private condo buyers were buying condos and renting them out, though. If you think the rental crisis is bad now, imagine what it would have been had we not had condo rentals over that 25 year period.


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#29 Nparker

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Posted 09 December 2021 - 12:02 PM

Can you show us evidence from Greater Victoria that "homes are increasingly not being bought as homes?"

It's the "Dark Window" theory.


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#30 AllseeingEye

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Posted 09 December 2021 - 12:50 PM

Hold on. I thought you guys lived in the Cedar Hill/McKenzie area? University Heights was built on a farm. Gordon Head was a hayfield up until the mid-century.

 

Yup we did - from 1965-72; from '72 onward, which was my reference to the $27500k house, we lived in the Gordon Head Rd/Uvic/Mt Tolmie neighborhood near the top of the hill on Cedar X Rd/Mt Tolmie.

 

If you took a picture of that house when we moved in 1972 and took a picture of the same house/neighborhood today the only thing that's changed is that houses have been updated and refreshed, and one single new home built on what was a double lot in 1972, directly across the street. 

 

The old Cedar Hill home BTW was purchased in by my folks in 1965 for $8000.....


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#31 Mike K.

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Posted 09 December 2021 - 01:22 PM

Ah, got it. I bet that $8,000 home was worth about 3x what it was bought for in 1965. UVic's opening had an effect on housing back then. By the mid-80s the average was $75k.

 

In 20 years, prices went from ~$8000, to $80,000. We call that a near 1,000% uplift. But back then, nobody complained about it, people just understood that Victoria had become quite desirable, and prices would reflect that. At the time you could buy a nice house in Edmonton for $25,000.

 

Since the mid-80s prices have gone from $80,000 to $1.3 million, over the span of 40 years. The only people surprised are the prairie expats who all thought $500,000 was too much for a SFD back when they began teaching Victorians about the benefits of market crashes and why would-be buyers should wait, because houses would soon fall to $300,000 a unit.


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#32 AllseeingEye

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Posted 09 December 2021 - 01:43 PM

Ah, got it. I bet that $8,000 home was worth about 3x what it was bought for in 1965. UVic's opening had an effect on housing back then. By the mid-80s the average was $75k.

 

In 20 years, prices went from ~$8000, to $80,000. We call that a near 1,000% uplift. But back then, nobody complained about it, people just understood that Victoria had become quite desirable, and prices would reflect that. At the time you could buy a nice house in Edmonton for $25,000.

 

Since the mid-80s prices have gone from $80,000 to $1.3 million, over the span of 40 years. The only people surprised as the prairie expats who all thought $500,000 was too much for a SFD back when they began teaching Victorians about the benefits of market crashes and why would-be buyers should wait, because houses would soon fall to $300,000 a unit.

 

 

There was a poster on VV a few years back, the username escapes me now, who seemingly only posted in the real estate thread and who for years kept reiterating that a crash was only a matter of time and that (s)he was determined to wait out the market until it cooled down before they pulled the trigger - I wonder how that ever worked out?

 

In the early 70's our house was party central for my folks, dad with his media chums, and mom with the RJH medical community; hot rumor at one of those parties was that Dr X @ RJH had recently paid the kings ransom sum of $120,000 (scandalous!) for his new Uplands palace. That at a time when the average SFH was about one quarter that amount. And yes folks today either too new to the area or too young to recall aren't aware of how small the city was at that time, having just slightly over 200,000 resident in the entire region.



#33 Casual Kev

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Posted 09 December 2021 - 01:49 PM

Can you show us evidence from Greater Victoria that "homes are increasingly not being bought as homes?"

 

I have yet to see any figures that suggest this is the case.

 

I mean we can come up with a million different boogeymen to explain away the reality of the situation as us vs them, or foe vs friend, but I know more older people with multiple SFDs that they bought as investments in the 80s, 90s and 00s that they are now selling to resident owners, than I know people buying SFDs for the purpose of investment.

 

I'm sure there is more of that happening with condos, as there always was, though. For the 90s through to 2015 there were no purpose built rentals being built, zilch. Private condo buyers were buying condos and renting them out, though. If you think the rental crisis is bad now, imagine what it would have been had we not had condo rentals over that 25 year period.

 

Investors have made up over 20% of new home purchases over the past few years

 

You can also look at housing prices and mortgage affordability statistics - again, mortgage payments aren't actually that bad historically speaking but the gap between the median condo mortgage and the median Victoria income is a whopping 40K. Of course, forget buying a SFH altogether because that'll take a lifetime of savings to get in (350 months to be more precise) while needing the prerequisite income to qualify

 

People who actually make their money here objectively can't afford to buy in most cases. What do you think it's happening? 

 

And yes Mike, decades of lack of supply means things are harder for people trying to make a living now. Market rents actually exceeded mortgage payments for a bit. If you can't buy and you haven't been able to build up alternate investments you're f****d. Nowadays, you buy because you can't afford to rent - but you need to afford a downpayment and qualify for a mortgage to begin with. Ha.


Edited by Casual Kev, 09 December 2021 - 01:51 PM.

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#34 Mike K.

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Posted 09 December 2021 - 03:26 PM

^that's not what I asked for, though. I'd like to know the stats for Greater Victoria, not the country. Regardless, investment is important, isn't it? It provides homes for rent, and we're in a rental crisis so that's a benefit for society.

 

But these arguments are not new. They are the same arguments we've heard now for 30 years, word for word. Every year, it's the same argument. I'd encourage you to go back to the very first page of the housing threads on this forum to see what I mean.

 

Fundamentally, we need more supply.


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#35 Casual Kev

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Posted 09 December 2021 - 04:17 PM

If actual data on housing prices and mortgage affordability doesn't sway then I don't know what else to say. No I don't know about granular investor ownership data for Victoria specifically but it's a nationwide trend and this is one of the most expensive cities in the country.

Like with everything else, people have always complained about housing affordability but there's no karmic force in the universe that makes it so the problem will be exactly the same through the eons.

#36 Moderation

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Posted 09 December 2021 - 04:29 PM

I have found this site often has interesting data much of it Victoria focused.

 

https://househuntvictoria.ca/


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#37 AllseeingEye

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Posted 09 December 2021 - 04:58 PM

I have found this site often has interesting data much of it Victoria focused.

 

https://househuntvictoria.ca/

 

That is the poster I referenced above whose online username I could not recall - househuntingVictoria. (S)he must have pulled up stakes and left the region years ago as his/her last activity on VV was in 2011. Often wondered since the bubble (s)he always maintained would occur here - and didn't, obvioulsy - compelled him/her to move and whether they ever managed to purchase a home wherever they wound up.....



#38 Moderation

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Posted 09 December 2021 - 05:24 PM

Check the website if you have not done so. I do not think this site is done by the person that you have referenced based on the info contained on the site.



#39 Mike K.

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Posted 09 December 2021 - 05:34 PM

The person who took over from the original individual, Leo, is still running the site. Leo and I have fistacuffs over market trends. It's our thang.

But yes, the original HouseHunt on VV said the market would crash, housing would be cheap, and all would be good. Then the market roared, wives got angry with their husbands who kept waiting on the sidelines to buy, and HouseHunt moved back to wherever he came from (I believe somewhere in the prairies). That's when Leo took over.

@Casual Kev, we need to keep in mind that out of this investor market also comes high density development. Investors have to purchase land assemblies piece by piece to have enough land to build on. Considering that to build one average condo or apartment of 50-100 units, you need to buy up six or eight houses. That's where a lot of this investment activity is coming from.

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#40 A Girl is No one

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Posted 09 December 2021 - 08:51 PM

It happens because everyone wants to live here, and there has never been a time over the last several decades that you didn’t need a half decent income to buy a home here.

We’ve all gone through the tough part. When I bought my place it was by the skin of my teeth, I mean I just barely did it as part of a last ditch kick of the can. Hardly anyone has it easy when trying to enter any desirable market, believe me.

But once you do, now you’re building equity. Part of it might be a market uplift, part of it will be what you’re paying for your mortgage.

But remember, everyone loves to complain about a rising market but last year at the onset of COVID the “experts” all said the market would crash and be sent into a tailspin. For the majority of buyers, though, their home is not a get rich scheme, it’s their home. They plan to hold it for the long term so day-to-day market moves are not a factor (most can’t even tap into the golden egg HELOC the “experts” seem to think is just sitting there available in full to all who want it, unless their income is high enough).

My parents visited Victoria in the eighties and fell in love with it. They could not afford to live here so stayed where they were, but they never stopped dreaming.

We bought our house (could not afford BC so started elsewhere and moved up here when we could afford it). Buying a house meant no travelling, no dinners at nice restaurants or nights out at the pub, no fancy furniture. We had cardboard boxes as night tables for many years. Getting started is hard, but it’s life and what makes it worthwhile.
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