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Is there a housing bubble right now in Victoria?


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Poll: Is there a housing bubble in Victoria? (1 member(s) have cast votes)

Is there a housing bubble in Victoria?

  1. Yes. (128 votes [58.99%] - View)

    Percentage of vote: 58.99%

  2. No. (60 votes [27.65%] - View)

    Percentage of vote: 27.65%

  3. Maybe. (29 votes [13.36%] - View)

    Percentage of vote: 13.36%

Vote

#21 Mike K.

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Posted 20 June 2007 - 03:32 PM

We've got the right ingredients to turn this city into an economic powerhouse if we can just put aside our fears of a pending housing and economic bust. If we focus on the economy and promote this city as a good place to do business the rest will take care of itself without any special attention.

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#22 househuntvictoria

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Posted 20 June 2007 - 08:55 PM

I don't disagree with your insights Derf, but how do the people who are buying here, these uber rich "from-aways," that everyone seems so willing to accept as the reason for our astronomical RE prices, contribute to a "economic powerhouse?"

The only businesses that will benefit will be in the service industry that is plagued by low-pay, low-skill and irregular work. The tax regime in, and the location of, Victoria does not lend itself to growth in "big" business. There are of course exceptions to this rule, but companies like Carmanah Tech, Custom House Currency and some of the others making a go of it in the tech park are tiny in the big scheme of economic impact. The vast majority of Canadians, and by extension, Victorians are wage earning employees whose real incomes barely-if keep pace with inflation.

When housing stock reaches a point where average prices require average incomes of $114K/year in a town where average incomes are barely $70K, something has to give.

#23 Mike K.

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Posted 20 June 2007 - 10:23 PM

Out of towners are not the sole reason for our increase in real-estate prices -- more like 30% of the reason 8)

But you illustrated my point quite well, where Victoria's residents continue to rely on the service industry for employment which leads to problems with housing affordability. As for location and taxes, it's all relevant. There are international or pan-Canadian firms in Victoria that chose the Island over Vancouver or other cities and they're doing just fine (say, PRA International or Money Mart). Now we need more of them to diversify the job pool. Surely if our government can run the province from the confines of an Island most any business can manage its operations from here, too.

Anyone remember the Upper Harbour Place marketing campaign that compared operational costs in Victoria to major centres in North America? I think Victoria came up as one of the most affordable. Now it's just too bad there isn't enough office space to accommodate the businesses that do want to move here ;)

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#24 househuntvictoria

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Posted 21 June 2007 - 06:11 AM

Does anyone remember the 1990s, when people left in droves because the work situation here was so bad? I talk to my peer group (30 somethings) and many are starting to think about leaving again. Why? Because they can earn the same or more elsewhere, spend half what they do now on housing, have kids who can actually go to a school in a neighbourhood they live in without fear of a school closing, and not live in a town that is building projects that cater to their parents generation exclusively.

Look at what FTBs have as their purchasing options these days: $425K fixer-upper/starter homes and $250K 900SF condos. Outside of Victoria, Vancouver, the Okanagan, Edmonton and Calgary, $250K buys you a very nice home in a decent neighbourhood, in a town where there are no shortages of work. Many people are taking advantage of telecommuting these days. The quality of life for younger, higher paid technical and management types is often better had for a cheaper cost elsewhere. Victoria simply is not worth a 100% premium for what it offers us. Most people are well aware of the fact that the housing market has cooled significantly and that their homes will only appreciate modestly from here on in, if at all. Some are happy they made money already, but if anyone was caught on the outside looking in, unless they are getting bad info and advice, they'll be in no rush to jump in these days.

Businesses will have a tough time recruiting people with skills they need to come here from elsewhere with housing prices being what they are. The available talent pool is not deep enough to attract head offices of major corporations.

Money Mart is a local company that grew out of Victoria. How many more of these can we expect to spring up? I hope many. But even if they do, they will be minor players in Canadian business because when all is said and done, Victoria is a small player type city and that is what has made it so attractive to the retirees wanting to get away from the rat races.

The best thing that the government could do is start moving their ministry offices out into the westshore so many of their younger employees can cut their commutes/costs and be closer to the only part of town that is building family-friendly accommodation. That won't happen anytime soon though.

#25 Mike K.

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Posted 21 June 2007 - 08:12 AM

^I thank God that won't happen any time soon. Commuting is a part of life for residents who choose to live far from the core and the government shouldn't remove tens of thousands of jobs from downtown simply because some employees dislike the Colwood crawl which they contribute to. That's backwards thinking at a time when we're working to bring people OUT of the suburbs and BACK into the city.

I still fail to really see what the problem is with our housing prices. So they're high relative to Saskatoon, but that doesn't mean we can't do anything about it. Buy a home and rent out a suite for an extra $7,000 of income. Open your home up to a foreign student and there's some extra income again. Or better yet, divide your home into three separate living spaces (which many here already do) and your income is padded enough for you to make out quite alright.

What's keeping Victorians from dealing with rising prices is the small-town, victimized thinking that has plagued this region and has lead to much of the economic lag we're struggling with. To suggest that Victoria can't and shouldn't attract big business because everyone is moving away or this city simply can't support big business is damaging. Plenty of companies operate from here and do quite well, so if they can, surely others can too.

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#26 aastra

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Posted 21 June 2007 - 11:00 AM

Victoria simply is not worth a 100% premium for what it offers us.


Spoken like a true Victorian. If Saskatoon is so damn appealing then why isn't it growing? There's more to life than owning a cheap house in a characterless 'burb, that's why.

#27 tsusiat

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Posted 21 June 2007 - 11:51 AM

derf, don't shoot the messenger.

People suggesting there are problems with housing are not damaging the economy.

If people actually are moving away, to cheaper locales, that might be damaging the economy, but whether locals are saying prices are too high is not responsible for the economic malaise you fear. If prices are too high, that is the problem - not whether people are talking about it.

Even the provincial government knows BC has to be more competitive: http://cheaprealty.net/home/crazy-schemes-and-real-estate. Can you imagine running a BC is Calling program if the region was attractive and sold itself?

Now I don't doubt that the region is attractive to all sorts of rich retiring boomers, Albertans, Americans, Germans and probably Saudi Oil Sheiks, but the point HHV made was that it is less attractive to people who actually still have to work. Those are the people who will be working for the businesses you want the region to attract.

Buying a house anywhere in Greater Victoria, without a lot of equity, with even a high middle class salary, is a stretch.

Talking about it, is not the problem.

#28 m0nkyman

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Posted 21 June 2007 - 12:04 PM

A similar problem exists in Whistler and Banff, and is being felt on Saltspring Island.

#29 househuntvictoria

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Posted 21 June 2007 - 12:48 PM

Victoria simply is not worth a 100% premium for what it offers us.


Spoken like a true Victorian. If Saskatoon is so damn appealing then why isn't it growing? There's more to life than owning a cheap house in a characterless 'burb, that's why.


For professional families with young children, Victoria proper has very little to offer. Victoria proper caters to urban professionals and retirees. Families are the life-blood of the city, and if they can't find a comfortable, safe and affordable existence, then they will leave. Victoria has a newly-wed, nearly-dead reputation for a reason.

I'm simply suggesting that developers are not creating spaces that are attractive to families at prices that don't cripple them financially for 40 years in Victoria proper. Those that want the amenities for their families move out of town and commute, or just leave altogether. Or they do what Derf suggested and turn a perfectly good SFH into a now-legal triplex plus rent out a spare bedroom to an exchange student just so they can stay. That isn't an attractive picture for people from away to come to. Those of us already here seem willing to accept this new reality, but try selling that to someone with skills from somewhere else.

This is a competitive world we live in. Graduates with skills are getting multiple job offers. A lot of them are leaving for places that have more to offer than rainy days in the winter time and relatively mild summers. I'm simply suggesting that the lure of the family life is as natural as anything and one of the primary decisions that new parents will make is how can they afford to best provide for family. Spending 70% of pre-tax income on housing is not a wise decision. Anywhere.

By the way, Saskatoon has one of the fastest growing populations and rising real estate values in Canada.

#30 aastra

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Posted 22 June 2007 - 11:58 AM

Families are the life-blood of the city, and if they can't find a comfortable, safe and affordable existence, then they will leave. Victoria has a newly-wed, nearly-dead reputation for a reason.


Spoken like a true Victorian. Every time I come back to Victoria I'm impressed by the sheer number of young families in neighbourhoods that are supposedly prohibitively expensive.

There's more to life than 5,000 square feet and a four car garage.

Graduates with skills are getting multiple job offers. A lot of them are leaving for places that have more to offer than rainy days in the winter time and relatively mild summers.


Spoken like a true Victorian. Check out those other cities with a discerning eye and then tell me you're still dismayed as to why Victoria is expensive.

#31 aastra

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Posted 22 June 2007 - 01:01 PM

By the way, Saskatoon has one of the fastest growing populations and rising real estate values in Canada.


Between 2001 and 2006, Victoria's population grew by 5.8% (18,186).

Between 2001 and 2006, Saskatoon's population grew by 3.5% (7,996).

Victoria's growth has actually increased in this era of prohibitively expensive real estate. Between 1996 and 2001, Victoria's population grew by a mere 2.5% (7,615).

#32 househuntvictoria

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Posted 22 June 2007 - 02:35 PM

aastra,

whatever I have written that has personally offended you, I apologize for. You say "spoken like a true Victorian" as if there may be some negativity to that?

Saskatoon is out-pacing Victoria today, in terms of both pop. growth and RE market inflation. Yes, I know we outgrew them in the last census period. Yes, I know we outgrew ourselves between the latest two census periods. RE didn't become astronomically overvalued until late-2005 and into 2006. Today is what matters in my mind.

Tell me, what is worth paying such a disproportionate amount of money for in Victoria? I have given you specifics of why I think young families are not coming en masse to Victoria.

I grew up here. There were a lot more young families here 20 years ago. Hence why schools are closing every year here. Which neighbourhoods are generating more families? It isn't in Victoria. Families are not developing in Victoria because there are no affordable places to raise them. Westshore or outside Victoria, sure. But that isn't what any of my posts have been about. I've been talking about how the developments in Fairfield, Downtown, Vic West and James Bay are catering to retirees and professionals with no kids.

#33 Mike K.

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Posted 22 June 2007 - 03:17 PM

In all fairness, comparing one area of a metro to an entire metro (Victoria-proper to Saskatoon) is hardly a balanced comparison (I take that's what being compared here, no?). I mean, if for every school that shuts down in Victoria-proper another opens in the west where's the problem?

Cities evolve and their enclaves cater to different needs throughout the decades. Heck, Dockside Green is being built on what used to be a train depot and residential areas in Colwood are overtaking a mine. 30 years ago James Bay was considered a shady and rough part of town now its uber-posh. 50 years ago Oak Bay was a middle-class suburb that catered to average joes, now it's hiding behind a tweed curtain.

Furthermore, I doubt it's the cost of living that's pushing many young people away from town, it's the lack of professional development in their employment opportunities (compare the cost of living in Vancouver and notice how young people and their young familes still keep moving there). Victorians dread big-business and believe it just doesn't belong, then they turn around and complain there's no work or not enough pay in the work that they do. Brilliant.

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#34 tsusiat

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Posted 22 June 2007 - 04:09 PM

Derf-

I think there's some truth in what you say when you compare the entrepreneurial advantage of a place like Vancouver to Victoria.

In Vancouver, some of the families HHV is referring to resign themselves to living way out in the Valley. Not a choice I would want to make, but some people do it.

However, that being said, I doubt that the high housing prices in Victoria make this an attractive place for a new business to locate, if it has to attract numerous employees to entry level positions, if the intention is to pay them $50,000 a year or less.

In that regard, Victoria does have a problem.

On the bright side, if prices go down, it could be a temporary problem.

Sometimes I wish the real estate cheerleaders could see the fact that, if prices went down significantly, in the long run there could be a tremendous benefit to the region.

#35 househuntvictoria

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Posted 22 June 2007 - 04:24 PM

"Furthermore, I doubt it's the cost of living that's pushing many young people away from town, it's the lack of professional development in their employment opportunities (compare the cost of living in Vancouver and notice how young people and their young familes still keep moving there). Victorians dread big-business and believe it just doesn't belong, then they turn around and complain there's no work or not enough pay in the work that they do. Brilliant."

That's been my point all along. You want big business to come and set up shop and they don't do it. I want all business, not just the service industry that caters to retirees and tourists, to development and flourish here. I'm tired of witnessing my peers leave for jobs (90s) or housing affordability/quality of life (now). But in order to get business to flourish here, then the city and developers will need to do something other than cater to the demands of those either at the beginning of their working lives or the ends of them. I suggested Government move closer to their workforce (westshore); you countered that more people need to move downtown; then I said downtown has nothing in the way of new or affordable product to lure families with.

The tired, emotional response of "just another defeatist Victorian who dreads big business" couldn't be further from the truth.

RE prices have been driven into, what I believe, bubble territory by a short-sighted, un-creative cater to the money crowd and the availability of cash at astronomically low rates. Now that the money is getting a bit more pricey, and a return to historical norms seems closer on the horizon, we are seeing discounted product in the condo markets and a slow down in new construction across the board. But I guess that's what happens when more than 50% of your after-tax family income goes to paying for your mortgage alone and speculators don't see such great returns on their condo investments. There is more to life than just mild winters and nice views: kids need clothes, food, quality education, sport, family, friends etc... this town is making it awfully difficult to afford those things and still own a house.

Anyway, I'm willing to agree to disagree, we've hijacked the OP enough.

#36 aastra

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Posted 22 June 2007 - 04:30 PM

You say "spoken like a true Victorian" as if there may be some negativity to that?


Yep, in my experience Victorians tend to bash the heck out of Victoria, and then they go see the world (or other parts of Canada) and realize Victoria is one of the nicest cities anywhere. I can't tell you how many people I know who left for exotic opportunities in Saskatchewan or northern Alberta or Ontario...only to come back. Comparing various cities as if they're all the same is as silly as comparing various automobiles as if they're all the same. If somebody offered to triple my salary so long as I was willing to move to suburban Saskatoon, I'd have to think long and hard about it. I honestly don't know if I could do it.

Saskatoon is out-pacing Victoria today, in terms of both pop. growth and RE market inflation.


What's the source for this? Are you saying the next census will show significant growth for Saskatoon and reduced growth for Victoria?

RE didn't become astronomically overvalued until late-2005 and into 2006. Today is what matters in my mind.


That's great but innumerable other people have been making the same basic claim about astronomical real estate overvaluations for the past several years and more. Today rapidly turns into yesterday, and then a year ago, and then five years ago. Heck, that's the reason I didn't buy a place back in 2001-02, because real estate was so astronomically overvalued and everybody was talking about the bubble. So I've been paying rent ever since and praying for the big reversal.

I've been talking about how the developments in Fairfield, Downtown, Vic West and James Bay are catering to retirees and professionals with no kids.


We should remember that all of the recent condo/townhouse development in downtown Vancouver was also criticized for ostensibly excluding families...and then along came a bunch of kids and now they're building new schools for them. Incredible but true, some people will actually choose to live in a condo or a townhouse or a small SFD in the city -- and pay a premium for it -- even if they're planning to raise a family. In some cases, especially if they're planning to raise a family.

#37 househuntvictoria

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Posted 22 June 2007 - 05:49 PM

I am not bashing Victoria. I am simply stating that I believe Victoria has been and will continue to be a playground for people who are not here to have families. I'm talking about the City of Victoria, not the CRD. But because RE is interconnected throught the CRD, I also believe that at today's prices, the rest of the CRD, will not be producing much in the way of RE product for families.

I'm also not comparing cities as though they are cars. I am saying that Victoria has much competition for families in other towns that have both cheaper RE and better SFH products. There is more to life than mild, wet winters and relatively cool, bugless summers and great views on clear days.

Saskatoon had May 2006-2007 YOY RE inflation of 44%; Victoria was under 15%. Sorry couldn't find the article about demographics on the CBC website were I originally read it.

If you thought there was a bubble in 2002, I'm not sure where you were reading your information. 2002 was just the beginning of a run-up after a 7 year period of stagflation in the local RE market. Back in summer 2002 I looked at purchasing a townhouse. I could have had a nice 3 bedroom behind Hillside mall for $139K. I chose to go back to school instead of buying a home because I didn't like my chosen profession at that time. At that time, the advice given to me was it's going to take many years to erase the damage of the late 90s and the dotcom bubble before investor sentiment turns around. I guess the advice we both received was wrong!Back then, the average family could purchase a decent house at under 35% of net income: right in the range the banks used to want you to have before they got loose with their money.

I looked on the Van school board site and it looks like they have added some capacity at two existing schools, but couldn't find anything about new schools being built. Regardless, it's a stretch to say that people want to pay a premium for condo living to raise a family. How many 3 bed condos are being built these days? In Van, you're lucky to find a 2 bed condo that has more than 1 bathroom and 800SF. Been in one of those lately? I couldn't possibly imagine the quality of life that busy working families would enjoy in that atmosphere.

There is no doubt in my mind that some families have jumped into housing that is unaffordable with a misguided belief that the roller coaster always trends up. What I am trying to point out is that if you want to attract families to the area, it will be excessively difficult with current pricing fundamentals. Two things can change this: more income, or cheaper RE. Since there is no indication of peoples wages going up, and there is a real softening of the RE market here in town, not much is attractive other than the weather and scenery.

#38 Holden West

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Posted 22 June 2007 - 10:57 PM



I looked on the Van school board site and it looks like they have added some capacity at two existing schools, but couldn't find anything about new schools being built. Regardless, it's a stretch to say that people want to pay a premium for condo living to raise a family. How many 3 bed condos are being built these days? In Van, you're lucky to find a 2 bed condo that has more than 1 bathroom and 800SF. Been in one of those lately? I couldn't possibly imagine the quality of life that busy working families would enjoy in that atmosphere.


Elementary schools are being built and are filled beyong the wildest predictions of the School Board right in the heart of Downtown Vancouver. Don't forget in addition the many small alternative private schools Downtown like Madrona School.
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

#39 househuntvictoria

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Posted 23 June 2007 - 08:28 AM

As it seems my research skills on the internet are lacking, could someone please give me a link or two to all these new schools. When I do a google search for new schools, it appears that even in the Vancouver media, the stories are about Calgary and Edmonton. In the meantime, I guess we'll just have to accept the say-so arguments?

Regardless, Victoria schools are closing. 3 last year, 2 this and it doesn't look like they are being replaced on the Westshore.

#40 Holden West

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Posted 23 June 2007 - 11:40 AM

There's Elsie Roy Elementary and False Creek Elementary, and a new one planned in International Village, and another probable site on the Athletes Village site on False Creek--all of them new schools in the heart of condo-saturated downtown. In addition, you have the French Immersion (three of which are expanding) and various private elementaries like North Creek Montessori on Howe Street as well as a new public elementary school planned for the UBC lands.

From Elsie Roy Elementary's website:

AN IMPORTANT NOTICE FOR
APPLICANTS TO ELSIE ROY ELEMENTARY

March, 2006

Elsie Roy has experienced unprecedented growth since it opened two years ago and the capacity issues with which it has been grappling have now grown severe. The Vancouver School District has made every effort to devise workable solutions to ensure fair and equitable accommodation of all students within the Elsie Roy boundary.

Elsie Roy is unable to accommodate the rapid increase in population in the downtown area and cannot meet student demand for September 2006.

The school district and the Ministry of Education are discussing the need for a new school in Vancouver's downtown core to alleviate the capacity issues. However, construction would not begin for several years. The Vancouver School District has developed some practical and necessary solutions to Elsie Roy's enrollment challenges.

Those intiatives include designating Strathcona Elementary the "home" school for students who register at Elsie Roy after March 20, 2006.
We understand and appreciate that some families will be unable to take advantage of this option, and we recognize the difficulty it may present for others.

The Vancouver School District considered numerous options when attempting to mediate this critical capacity issue.

All parents continue to have the option of applying cross-boundary to
another school if they decline this option provided by the District.


Using the search terms such as the following might help you in finding information relevant to Vancouver elementary schools:

"[url=http://www.vsb.bc.ca/NR/RDONLYRES/BB5A1AC8-852A-4967-A353-200E918F639E/0/NEWVSBSCHOOLS2007.PDF:2365d]over capacity[/url:2365d]"
"[url=http://seattlepi.nwsource.com/local/288843_vancouver16.html:2365d]success story[/url:2365d]"
"Beaver, ahoy!""The bridge is like a magnet, attracting both pedestrians and over 30,000 vehicles daily who enjoy the views of Victoria's harbour. The skyline may change, but "Big Blue" as some call it, will always be there."
-City of Victoria website, 2009

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