Low Interest Rates Not Having the Same Impact

The Bank of Canada held its key interest rate steady at 0.25 per cent last Wednesday. While the overnight rate has shed 150 basis points (bps), bank notes 5-year mortgage rates only declined 17 bps from the beginning of the pandemic. Lenders have not brought the rates down further because many feel they have a higher risk and lower reward with higher home prices and low mortgage rates.

Until the economy fully gets back on its feet, the absence of rate hikes means variable mortgage rates will remain low, and anyone with a variable rate can expect prime to remain unchanged. Fixed rates will stay near historic lows.

Note: One basis point is equivalent to 0.01% (1/100th of a percent).

Reviewing CMHC’s New Lending Criteri

The Canada Mortgage and Housing Corporation (CMHC) is tightening its lending standards, making it tougher for Canadians, especially first-time home buyers, to borrow money to purchase a home.

As of July 1st, at least one applicant must have a credit score of 680, an increase from the current score of 600.

The gross and total debt servicing ratio will move to 35% (from 39%) and 42% (from 44%) respectively. The gross debt service (GDS) ratio, also referred to as the housing expense ratio is the proportion of income going towards housing related debt, while the total debt service (TDS) ratio adds in all other consumer loans such as credit cards and auto loans in the ratio.

CMHC is also barring “non-traditional sources of down payment or unsecured lines of credit that increase indebtedness.” This refers to a practice of someone using an existing line of credit or other lending sources to come up with the down payment.

Does this mean a grandparent who wants to take out a small mortgage on their own property to help finance their grandchild's down payment no longer allowed? When asked, Beverly LePage, account representative with CMHC replied, “The situation you are describing would be gifted funds for down payment, which continues to be recognized by CMHC has a traditional down payment source by CMHC.”

Greater Victoria Neighbourhoods – Westhills

The Westhills area along the southwest shoreline of Langford Lake is well known for a massive construction project by the same name which to date has built more than 3000 new homes since its inception in 2008.

The developers and builders - The Westhills Land Corp. and Keycorp Consulting - are committed to constructing environment-friendly, energy-efficient residences to BUILT GREEN® standards. They are even using geothermal equipment to aid home heating and cooling.

The community is made up of condominiums, duplexes, single-family homes, and high rises. Two retail centres and sports fields provide a wide variety of amenities and attract local teams for the neighbourhood to enjoy. Close by, Langford Parkway features community amenities such as hockey, soccer, rugby, bowling, mini golf, indoor playground, roller skating, roller skating and more. The YMCA’s new facilities features swimming, weight rooms, gyms, dance floors and a variety of community programs.

A new Belmont Secondary School supporting 1,200 students opened on September 8, 2015 which supports wide range of programs, including expanded students' skills and trades training. Additional programs include global and intercultural skills, French immersion and even robotics.

Westhills has already attracted hundreds of young families due to its beautiful, west coast suburban environment, amazing community amenities within the bustling Langford lifestyle.

How will Canada’s residential and commercial property fare in a post-production world?

Housing prices are just like wages. They are “sticky”, which means, like wages, you will rarely see a large drop in the market pricing. You really cannot draw a straight line from the slowdown in sales to lower home prices because it doesn’t work that way. As well, less listings on the market offsets the slower sales because there are fewer homes for buyers to choose from.

If you enjoy podcasts, listen to Financial Post columnist and Ryerson University real estate management professor Murtaza Haider as he assesses the pandemic’s impact on housing and rental prices, how the shift to working from home could affect real estate in downtown cores and a rethinking of the suburbs on “Down to Business”.

Update on Canada Emergency Commercial Rent Assistance Program

The Canada Mortgage and Housing Corporation published more information on the Canada Emergency Commercial Rent Assistance Program (“CECRA”). Highlights include:

• Commercial Rent Landlords must have declared rental income on their tax returns for 2018 and/or 2019 to qualify.
• Landlords must apply before the deadline of August 31, 2020. 
• The Government loans are forgivable if the landlord complies with all applicable program terms and conditions
• Landlords cannot seek to recover rent abatement amounts after the Program is over
• The Government loans to the landlord will cover 50% of the gross rent owed by a qualifying small business tenant during April, May, and June 2020
• Landlords can apply retroactively for this Program provided that the landlord can prove eligibility during April, May, and June 2020.
• Landlords must refund any amounts paid by the small business tenant for that period. The refund can be a credit for future rent if agreeable by the tenant and the landlord.

Small business tenants to qualify if:

• The $50,000 maximum in monthly gross rent is per location and defined in a valid and enforceable lease agreement, and
• The small business cannot generate more than $20 million in gross annual revenues calculated on a consolidated basis (at the ultimate parent level).

Reference: http://www.mondaq.com/canada/landlord-tenant--leases/938232/cmhc-comments-on-the-canada-emergency-commercial-rent-assistance-program

Consumer Price Index and Deflation in Canada

Consumer prices fell in several segments of the Canadian economy in April. They included transportation, clothing and footwear, recreation, and education. Gasoline and clothing both experienced the largest decline in the history for those components on record. Statistics Canada (Stat Can) data shows the consumer price index (CPI) fell in April.

Deflation is when consumer prices fall. That is a good thing. After all, who does not want to pay less for things? Declines at certain times, especially if due to decreasing manufacturing costs, can be terrific. Consumers have more money they can spend or invest.

While the Bank of Canada does not want to see sustained deflation (see link for more information about why), they do not deem small price declines over short periods of time to be a problem.

Greater Victoria Neighbourhoods – Triangle Mountain

Looking for a home with an out-of-town feel in a central location that has inspiring ocean and mountain views? Look no further than Triangle Mountain.

Situated outside of Colwood, Triangle Mountain is immersed within Vancouver Islands forests and natural beauty, yet it is a five-minute drive to coffee shops, restaurants and grocery stores, and a 10-minute drive to the Juan de Fuca recreation centre and Q-centre; the athletic hub of Colwood. The recreation centre houses a gymnasium, pool, skating rink, soccer fields, and tennis courts. The Q-centre is the home rink for the Victoria Senior A Lacrosse Shamrocks and the Victoria Grizzlies Junior A hockey team.

The area features custom-built homes with panoramic mountain and ocean views to the east; Mount Baker, Haro and Georgia Strait, and the Olympic Mountains.

If you are a hiker, you will want to head up Havenwood Park to Lookout Lake. Go up the mountainside and the flights of stairs and you will find yourself at Lookout Lake high up on Triangle Mountain. The lake is a local favourite for swimming, picnics, hikes, and shoreline fishing and is regularly stocked with rainbow trout and smallmouth bass. Bald eagles regularly join fishermen to catch fish!

The area first got its name ‘Triangle Hill’ during World War II because it was part of the coastal defence system as a command post. It was used as a navigational aid and point of triangulation for ships entering the harbours. “There were 20 locations across the entrances to the Victoria and Esquimalt harbours,” says Kate Humble, curator at Fort Rodd Hill. “They were like studs on a belt and they all had different purposes…some were gun batteries; some were observation posts and all of them working together was called a fortress defence system.”

Today, the area boasts lovely views and a peaceful serene setting that belies the origin of its name.

Single-Family and Condo Values in Victoria Core

The Multiple Listing Service® Home Price Index benchmark value for a single-family home in April 2020 increased by 4.6 % to $882,700, from its April 2019 value of $843,500, and increased 0.6 % from its previous month value in March 2020 of $877,700.

The MLS® HPI benchmark value for a condominium in April 2020 increased by 3.5 % to $530,700 from its April 2019 value of $512,700, but 0.2 % less than its previous month value in March 2020 value of $531,900.

Why Real Estate Was Deemed an Essential Service

"Real estate services and REALTORS® were declared an essential service by our province in March in order to protect consumers who need to make real estate transactions during this time," says Victoria Real Estate Board President Sandi-Jo Ayers. "Technology has allowed us to move much of our work online. Now you can participate in an open house from the comfort of your couch and manage your contracts and negotiations securely online.”

At some point in the process, we will need to meet, so I and local Realtors are ensuring we adhere to the advice of the Provincial Health Officer. Talk to me to learn the best procedures and strategies when you need to buy or sell your home.

Victoria Real Estate Board’s Report for April 2020

“The available inventory of properties for sale remains lower than in April last year,” says Victoria Real Estate Board President Sandi-Jo Ayers. Greater Victoria saw 2,305 active listings at the end of April, which was 16.2 % fewer properties than the total available at the end of April 2019 but 2.4 % more listings that at the end of March 2020. “Like so many other industries, much of the real estate market is watching, waiting and adapting."

Pacific Opera moves online

Pacific Opera has moved off stage and ONLINE for the foreseeable future to continue to share the love of opera and the knowledge of our artists and community.

Get all the info here: https://pacificopera.ca/about-us/news-media-releases/

Greater Victoria Neighbourhoods – Bear Mountain

Bear Mountain’s internationally acclaimed golf resort and approximately 1,150 residences alongside exudes a clean, contemporary, and upscale atmosphere. The resort and neighbourhood are located on 836-acre rugged and rocky sites, adjacent to Skirt Mountain which is 13 km northwest of downtown Victoria on the boundary between the City of Langford and the District of Highlands.

The intensely beautiful area is part of the Gowlland Range and a popular destination for hikers and mountain-bikers. The area’s name was derived from its indigenous name SPAET ("spa - eth"), which means bear in the Salishan language.

Bear Mountain Golf Resort and Spa is a two course, 36-hole design by Jack Nicklaus in an idyllic natural setting where golfers can enjoy the game even in the middle of winter. Here, you will also find the high-performance Training Centre of Cycling Canada’s National Mountain Bike team, the official Training Centre of Golf Canada’s National Junior Squad and Canada’s largest indoor/outdoor red clay court tennis facility.

Bear Mountain Community Association has the stated vision of “celebrating a quality of life that is unique to Vancouver Island and the value they bring the city of Langford with world-class golf, hotel and spa experiences, hiking, tennis, swimming, restaurants, tournaments, cultural events, shops, and an incredible inclusive spirit.

When you buy a home in Bear Mountain, you’re buying into a lifestyle of outdoor beauty and luxury.

Should Foreign Buyers be Banned from the B.C. Housing Market?

Andrew Weaver, head of the BC Green Party, believes BC should follow New Zealand’s example and entirely ban foreign buyers from owning homes in the province.

“(Foreign buyers) looking for a safe place to park your capital because of tumultuous times. We don’t believe they should put the social costs on British Columbians and make so they can’t afford to live here.”

Joshua Gottlieb, Associate Professor of Economics at UBC has a different perspective.

“There is no evidence that an absolute ban is going to solve the (affordability) problems.”

He and his colleagues with BC Housing Affordability Fund suggest a more measured approach that would not discriminate based on nationality and wouldn’t be such a blunt instrument as an outright ban.

“It would make more sense to raise the property tax but give a credit on income tax if they are participating in the local markets. That would make the tax system more efficient and avoid all discrimination. This surcharge would also allow much more effective data collection as people would have an incentive to report their income taxes and link them to their property taxes in order to get that credit.”

Joshua Gottlieb, associate professor of economics at the University of British Columbia, explains why banning foreign buyers from the Vancouver market won't solve the city's affordability problem.

Rental Eviction Rules – No Evictions Allowed After March 30, 2020.

B.C.’s new measure of banning rental evictions during the COVID-19 crisis left one big question mark: Does the no-eviction rule apply retroactively to tenants in recently purchased homes, where the new owner intends to occupy the property, or where existing eviction notices served before the announcement grandfathered in?

Richard Bell of Bell Alliance – a leading real estate lawyer in B.C. received advice directly from the provincial government and provides clarification:
“Up until today [March 30], if an eviction notice has already been given to the tenants to vacate because the buyers are to take possession, that eviction still stands. However, any new home purchase contract, from today onwards, you will not be able to evict the tenant, under any section of the legislation.”

However, the eviction ban will impact sales of currently tenanted homes because new buyers will not be permitted to evict sitting tenants from March 30 onwards until the ban is lifted.

Victoria Neighbourhoods: Jubilee

On the edge of Victoria, bounded by the municipalities of Saanich and Oak Bay, you will find the neighbourhood of Jubilee – North and South.

It is largely a residential neighbourhood with a wide variety of housing throughout the area and anchored by the Royal Jubilee Hospital with commercial and medical practices close by and clustered around major intersections along the important transportation routes.

The major routes ensure Jubilee residents have easy access to all points around the city. They also enjoy two neighbourhood parks including Redfern and Fern, and kids have access to play areas offered at local schools such as Ecole Victor-Brodeur. The Spirit Garden is a publicly accessible green space; a linear garden linking Newton Street and Kings Road.

The North Jubilee Neighbourhood Association is very active and interested in maintaining a healthy community for their residents. They recently (starting February 2019) lobbied for and received agreement from Saanich councilors to pay $5.5 million to B.C. Hydro who owned the 5.5 acres bordering Royal Jubilee Hospital, with the aim of saving the green space and turn it into a park. (https://www.njna-victoria.net)

Schools include St Patrick’s Elementary and Victoria College of Art – both private schools, and Ecole Victor-Brodeur which is a francophone school for K-Grade 3 students.

Realtors® Still Working

“This is a time to ensure our clients are safeguarded as well as to ensure that our community stays healthy,” says Victoria Real Estate Board President Sandi-Jo Ayers. “Many Realtors are leveraging new technologies including video home tours and virtual showings. Our message is - if you need us, we are here."

Home and Condo Values Still Rising

The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core area increased by 5% in March 2020 to $877,700 - up from $836,100 in March 2019. Homes are also 1.1% higher than February's value of $868,100.

The MLS® HPI benchmark value for a condominium in the Victoria Core area increased by 4.8% in March 2020 to $531,900 – up from $507,700 in March 2019. Condos are also up from the month before with a 0.9% rise from February’s value of $527,400.

The Bank of Canada Lowered the Overnight Rate For the Third Time in March 2020

The Bank of Canada (BOC) lowered its target for the overnight rate by 50 basis points to 0.25% today. The Bank Rate is correspondingly 0.5% and the deposit rate is 0.25%.

This is the third time the BOC has lowered the target for overnight rates; They dropped 50 basis points to 1.25% on March 4th, another 50 basis points to 0.75% on March 13th, and a third 50 basis points to 0.25 % today.

These decisions bring the policy rate to its effective lower bound and is intended to provide support to the Canadian financial system and the economy during the COVID-19 pandemic.

Read full article :
https://www.bankofcanada.ca/2020/03/press-release-2020-03-27/?fbclid=IwAR1X7-Pu0brKLKuyZxL62y4h39USfzPmMoCY16ojhBrFXdjk9wm2VMeo-cg

Big Drops in Mortgage Rates

Here is the latest news: On Friday the Bank of Canada made an emergency rate cut and most of the big banks passed along the full 50 bps of rate cut on Monday.

• The country’s prime is now 2.95 per cent and variable rate mortgages are as low as 1.95%.
• Floating mortgage rates and lines of credit moved from 3.45% to 2.95%.
• The Office of the Superintendent of Financial Institutions (OSFI) has announced the April 6 mortgage stress test improvements has been suspended indefinitely.
• Banks and mortgage lenders are offering mortgage payment deferrals of up to six months.
• Ottawa is planning to purchase up to $50 billion in mortgages.
• Canadian dollar falls sharply against US dollar. It is currently at $0.69 CAD per $1 USD.
• Personal income tax deadline extended to June 1st.
• Real estate supply remains constrained and as of February’s reporting by the Canada Real Estate Association, prices and the number of sales have trended higher.

Real Estate Values Still Rising to Date

You’re hearing a great deal of financial distress in the news of late. It’s important to note that real estate - the value of your home and your investments – will not be impacted anywhere as quickly as mortgage rates and stock prices. And there are counterbalancing market conditions in play – the most important being our constrained market supply. Real estate prices continue to rise in Greater Victoria in good part due to a lack of inventory.

"One of the most prominent aspects of our market right now is this continued low inventory," says Victoria Real Estate Board President Sandi-Jo Ayers. "Our ten-year average active listings for the month of February is 3,007. We concluded this month with just over 2,000 active listings, which means a lot less choice for consumers, more pressure on pricing and multiple offers."

Bank of Canada Rate Cut

“The Bank of Canada has made an unexpected rate cut, cutting the central bank's benchmark interest rate by 50 basis points to 0.75 per cent.

The central bank already cut its rate to 1.25 per cent at a previously scheduled meeting on March 4 to help counteract the impact of the coronavirus. Friday's decision takes that one step further.

"This unscheduled rate decision is a proactive measure taken in light of the negative shocks to Canada's economy arising from the COVID-19 pandemic and the recent sharp drop in oil prices," the bank said.”

Update on Inquiry into BC Money Laundering

The Cullen Commission began hearing from stakeholders including the BC Real Estate Association, the federal government, and more than a dozen others as it begins to assess impacts of money laundering in the province. After the initial hearings the Commission will report on its finding in May, then begin a full set of hearings in the fall.

Two reports concluding that $7.4 billion had been laundered in the BC economy with $5 billion connected to real estate prompted the BC government to announce in May 2019 that there would be a public inquiry.

“Criminal activity has had a material impact on people: Whether it be the rise of opioid addictions, the rise of opioid deaths as a result of overdoses, whether it was the extraordinary increase in housing costs, people were being affected by criminal activity in British Columbia,” the Premier reported to The Canadian Press.

Reference: https://www.canadianrealestatemagazine.ca/market-update/bc-inquiry-into-money-laundering-in-real-estate-gets-underway-326601.aspx

Why Condo Insurance Are Rising So Dramatically?

Here are some of the answers the insurance industry is providing:

• Major reinsurers are hiking rates to cover catastrophic damage around the globe. 
• Some insurers are opting out of the strata market and lessening competition.
• Construction costs are rising, meaning repairs are more expensive. 
• Buildings have more amenities, which hike replacement costs. 
• Some stratas are careless about budgeting for maintenance, meaning more frequent and more expensive claims.

Recommendations by the insurance industry:

• Mandatory household insurance for all residents’ units, as opposed to the building. That would offload some claims onto individuals.
• More stringent requirements for prevention technology, such as water sensors, flow meters and shut-off valves.
• Heightened discipline around capital repair and replacement budgets of stratas.
• A cap on payouts for losses.
• A bare-bones legal definition of a condo unit to reduce risk exposure to just the structural components and make amenities and finishings the responsibility of the unit owner to insure.

Reference: https://www.timescolonist.com/opinion/columnists/les-leyne-insurance-jump-for-victoria-condo-building-817-000-from-265-000-1.24085281

Savings Lost for Families in Condos

Just as the NDP was congratulating itself for saving families up to $1,800 a year by eliminating Medical Services Plan premiums, those saving have been wiped out for condo owners due to runaway insurance premium hikes.

MLAs are getting a wave of complaints from constituents staggered by the increases. Many pundits are worried the rate hikes will chill a significant part of the real estate market, and the government isn’t sure what to do about it. Finance Minister Carole James has been essentially treading water in the house while the government reviews response measures.

Last Tuesday, opposition Liberals proposed some ideas in a private bill. It calls for clearer definitions between insuring a unit and insuring the strata corporation’s building, more stringent insurance requirements and a strata water-damage prevention program to help with preventative maintenance in stratas.

Reference: https://www.timescolonist.com/opinion/columnists/les-leyne-scrambling-for-a-fix-as-costs-go-sky-high-for-condo-insurance-1.24084392

Bank of Canada cut its interest rate

On Wednesday, March 4th, 2020 the Bank of Canada cut its interest rate by half a percent.

But what does that really mean? How is this going to impact me? Will my mortgage rate change?
It means that lenders will typically also lower their PRIME rate.

Will lenders lower their prime rate the full 50 BPS (half a percent)?
Historically no - lenders haven't passed that full savings on to the clients. As of March 5th, our lenders have not yet adjusted their PRIME rate. We anticipate today to begin receiving emails notifying us of rate drops on PRIME rate.

What does that mean?
It means that if you have a variable rate mortgage your rate (and monthly payment) is going to go down. On average it will equal about $27 for every $100,000 of mortgage money that you have.

What if I have a fixed rate?
Right now, this does not impact you. Your rate is the same. This is PRIME rate only.

Source: GLM Mortgage Group | Dominion Lending Centres

Condo Insurance Hikes Hit Shoal Point

Most condo stratas are seeing condo insurance rate hikes in the 20% to 80% range, which is problematic, but not as difficult as what the residents in the Shoal Point condominium complex are now facing. According to residents, this year’s price tag is $817,000 as compared to last year’s amount of $265,000. Divided up between the 150 plus units, that means resident’s condo fees are going up 44% this year to more than $1,000 a month in order to cover the additional costs. Their deductible for water damage is also rising from $25,000 to $500,000.

It’s an example of how new luxury buildings in BC are being hardest hit.

Reference: https://www.timescolonist.com/opinion/columnists/les-leyne-insurance-jump-for-victoria-condo-building-817-000-from-265-000-1.24085281

BC Condos Struggle to Renew Insurance

According to the Insurance Brokers Association of BC (IBABC), strata corporations are facing drastic changes in insurance deductibles and premiums.

For instance, IBABC said some condo building strata corporations are facing renewal premium increases from between 50% and 400% and deductible increases from $25,000 per claim to $250,000 and up to $750,000.

Mortgage Professionals Canada (MPC) Pushing for Changes

Ever since the stress test was introduced in 2016, MPC has been asking for it to be uncoupled from Bank of Canada (BOC)’s 5-year fixed rate. That’s because, as the Government of Canada’s own website states: “The Bank of Canada 5-Year Benchmark Posted Mortgage Rate is also less representative of average contact rates as it only considers Canada’s six largest banks, and the “posted”, and not “actual” rates offered to borrowers by those banks.”

Paul Taylor, President and CEO of MPC said the association continues to ask for more support for those struggling to pass the stress test. He considers the 2% buffer to be “an onerous test level given the economic realities globally.”

MPC is also asking the government to reintroduce an insurable 30-year amortization for first-time buyers and to increase the income maximum multipliers under the First Time Home Buyers Incentive Plan.

References:

https://www.canadianmortgagetrends.com/2020/02/department-of-finance-announces-new-qualifying-rate-for-insured-stress-test/?fbclid=IwAR2vA_XfW9htt-pe5oQexEFaAbRYYeXPf9zDW7-tWCGpnj8OcLPOXzyUCYA

https://www.canada.ca/en/department-finance/news/2020/02/a-new-benchmark-rate-for-insured-mortgages.html

Greater Victoria Neighbourhoods: East Sooke

East Sooke is a terrific way to leave behind city life, yet still be a half-hour drive from civilization. It is stunningly beautiful and peaceful.

Nature lovers and water sport enthusiasts will truly appreciate East Sooke peninsula. Most of the southern and western coastlines are often called “Nature’s Gallery”. The area is part of the East Sooke Regional Park with 10 km of ruggedly beautiful Coast Trail and 50 km of hiking trails. The park is so large, you can wander it for a day and rarely run into other people.

Many properties border the park and have the most affordable waterfront properties on southern Vancouver Island. Homes found along the Sooke Basin have access to protected deep water and some have their own docks to access the Strait of Juan de Fuca. Away from the coastline, rugged mountaintop estates offer stunning vistas.

Public access to the Strait of Juan de Fuca from Roche Cove or East Sooke Park make it easy to set out on sailing adventures, world-class salmon and halibut fishing, or to launch your canoe or kayak.

Schools close at hand include Sooke and Saseenos Elementary, Journey Middle School and Edward Milne High School.

There is a good deal of undeveloped land available, both waterfront and mountaintop, for those who want to build their own home.

Dealing with Debt

Nearly half of Canadians have had an unexpected financial situation during the past year that affected their ability to meet their financial obligations. Stuff happens, and people generally don’t have ample emergency funds. How to take the conversation from just a recitation and recording of their current debts and change it into something more meaningful?

A good broker won’t just help you to get a mortgage, but also help solve financial difficulties and changes with advice on how to handle credit, and how to structure that credit in order to afford a home.

You will soon be able to qualify for a larger mortgage.

If you qualified for a $500K mortgage yesterday, come April, you will now qualify for a $535K mortgage. That’s because on Tuesday, the federal government announced it will change the benchmark qualifying rate used for Canada’s insured mortgage stress test. That rate is currently 4.89%, which is 30 basis points less than today’s benchmark qualifying rate of 5.19% based on the posted 5-year fixed rates.

The change will take effect April 6, 202

Canadian Home Sales Stats

According to the latest data from the Canadian Real Estate Association (CREA), home sales declined by 2.9% in January 2020 based on home sales recorded with Canadian MLS Systems. However, actual sales activity was up 11.5% compared to January of 2019, which makes it the best January sales figures in 12 years.

The actual national average price for homes sold in January 2020 was around $504,350, which is up 11.2% from January 2019. This was the largest increase since mid-2016. As little stands to change between the supply and demand dynamic, price gains are “poised to accelerate” this year.

Millennials Are Moving Back in With Their Parents. Why?

Those born between the years 1981 and 1996 are often waiting longer before they marry and start a family than baby boomers and generation X. The reasons have nothing to do with laziness or a lackadaisical attitude towards employment. Rather, they face certain economic realities.

Read more here:  https://www.theglobeandmail.com/investing/personal-finance/gen-y-money/article-recent-federal-budget-will-help-indebted-students-but-experts-say-its

BC Budget to be Tabled Today

British Columbia's finance minister is promising to stay the course in her next budget to be tabled today in the legislature.

Since coming to power more than two years ago, the NDP has made controlling costs for families, with a focus on housing, a hallmark of its economic policies. In its first two and a half years, the NDP government has eliminated Medical Service Plan premiums, increased social assistance payments, eliminated interest on student loans and raised support payments for children of foster parents. They have also brought in a new benefit that goes into effect in October to help families with children up to 18 years old. The benefit provides up to $1,600 annually for families with one child, $2,600 for two children and $3,400 for three children.

Overall, B.C.'s economy has remained strong, with the province consistently leading the country in economic growth.

Reference: https://www.timescolonist.com/b-c-budget-on-tuesday-expected-to-stay-the-course-as-economic-growth-moderates-1.24077932

Household Debt Rising Again

The Bank of Canada (BoC) data reveals household credit is on the rise and household debt reached a new all-time high in December 2019. However, the rise in growth is due almost entirely to mortgages. The outstanding balance reached $2.27 trillion in December, up 0.62% from a month before and a 4.2% increase compared to the same month last year.

Mortgage credit outstanding represented $1.63 trillion of the total outstanding debt in December 2019. Other types of credit are less attractive to households right now. Other reported consumer debt represents $641 billion of December’s outstanding amount, up only 0.31% from a month before.
Some feel the rise in mortgage debt is a result of Canadians experiencing FOMO (fear of missing out). Are they accessing their equity to have cash on hand in case there is an economic downturn? What are your thoughts?

TD Bank has lowered its five-year posted fixed mortgage rate from 5.34% to 4.99%.

"Based on current market conditions, lower funding costs have led to a growing variance in customer rates versus posted rates," said a bank spokesperson to BNN Bloomberg.

This came amid concerns surrounding coronavirus, which resulted in many investors buying more government-backed bonds. This has lowered the five-year government bond yield from 1.6% to 1.34%.

If the other big banks follow suit, this could compel the Bank of Canada to lower the benchmark rate to below 5% for the first time since the stress test rules were adopted.

This move spells good news for homebuyers and refinancers who are struggling to qualify at the current benchmark rate of 5.19%.

Lowering the stress test rate by 20 basis points could translate to a 2% boost in Canadians' borrowing power which would also mean that it would take 1.8% less income to qualify for a mortgage on the average Canadian home price, assuming a 20% down payment.

Doesn't sound like much, but it could encourage more people to enter the real estate market and lead to a busier spring.

Greater Victoria Neighbourhoods: Fisherman’s Wharf

Sometimes you need to turn a corner to see something splendid, and that’s so true of Fisherman’s Wharf; a marine destination just around the corner from Victoria’s Inner Harbour.

When you do, you will find a colourful collage of float homes, pleasure boats with live-aboard residents, working fishing vessels and commercial businesses featuring unique shops and food kiosks to serve your appetite for fresh fish and seafood.

At the east end, 33 berths are designated for float homes – floating residences that are not intended for use as a navigable craft. Owners share their neighborhood with harbour seals, herons, eagles, geese, cormorants, gulls, otters, and raccoons. The Greater Victoria Harbour Authority provides these homes with 30-amp power, potable water and sewage hookup to prevent discharge and to preserve the marine environment. The homes are all occupied and do not allow rentals.

Breaking News: Coronavirus Impacts on our Economy

Breaking News: Coronavirus Impacts on our Economy

The outbreak and widespread quarantine efforts are having ripple effects around the world according to Minister of Finance Bill Morneau. He said it will have a "significant impact" on Canada's economy during his speech this morning, at an Economic Club breakfast in Calgary AB.
Lockdowns in Wuhan and other hubs in the Hubei province due to the coronavirus outbreak have led to reduced demand for many industrial inputs. One of the results is a drop in oil prices by 15% during the crisis, Morneau said.

More than 40,000 cases of the novel coronavirus have been reported around the world, along with more than 900 related deaths, most of them in China. Seven cases have been reported in Canada; four in British Columbia and three in Ontario.

Greater Victoria Home Values Rising

The Multiple Listing Service® Home Price Index benchmark value for a single-family home in the Victoria Core in January 2020 was $858,500; an increase of 1.4 % from the January 2019 MLS® HPI benchmark value of $846,900, and 0.4% over the December value of $855,000.

The MLS® HPI benchmark value for a condominium in the Victoria Core in January 2020 was $521,100; an increase of 4.1% over the January 2019 MLS® HPI benchmark value of $500,500 and slightly more than the December value of $520,700.

BCREA (BC Real Estate Association) Predicts Price Growth in Greater Victoria

Prices are on the rise again. Increased demand will keep pushing home prices higher in major markets like Montreal, Toronto, Vancouver and Victoria through 2020. The flat prices and mild decline we witnessed in the first half of 2019 was a blip in the steadily climb in prices over the decades. Investors looking for value will set their sights on less densely populated cities like Victoria.

BCREA is predicting residential housing price growth in most areas of the province will be modest at less than 3%. However, Vancouver Island, the Fraser Valley, and BC Northern show potential for greater increases. Victoria is expected to see an improvement of more than 5%.

Pacific Opera Victoria: The Flight of the Hummingbird, March 2020 - An opera for the whole family.

In this enchanting new opera, the animals of the forest are inspired to come together by Dukdukdiya, the Hummingbird, to save their beautiful home from a raging fire.

The Flight of the Hummingbird is based on an indigenous parable from the Quechuan people of South America. The story of the brave hummingbird traveled through pre-contact trade routes to become well known within Haida culture. This opera is influenced by the graphic novel written by acclaimed Haida artist Michael Nicoll Yahgulanaas and will include elements of his dramatic Haida-manga illustrations.

PUBLIC PERFORMANCES
in Victoria at the Baumann Centre, 925 Balmoral Rd, Victoria, BC
Thursday, March 19, 2020, 2 pm
Friday, March 20, 2 pm
Saturday, March 21, 4 pm
You can purchase your tickets here:
https://www.rmts.bc.ca/events/flight-of-the-hummingbird-2020-baumann-centre?fbclid=IwAR0LlJolq9tXh8BCsYHBLxNXdYgukpoU2gCoxGgPH40wQkA3NXAMYNcxix0

Chinese New Year Celebrations

Did you know Victoria’s Chinatown is the oldest in Canada?

It’s the perfect place to celebrate Chinese New Year’s - Year of the Rat - with performances and festivities. On January 26th from noon to 3 pm, be at the Gate of Harmonious Interest to watch the Lion dance parade will accept the offerings businesses have hung up for the lions to bring them good luck and prosperity.

Performers are volunteers and the proceeds from the collected offerings are used to fund teaching of the traditional Lion dance & Kung Fu in Victoria.

It's a lot of fun, but we suggest some ear plugs for you and the kids as it can get boisterous and loud.

Greater Victoria Neighbourhoods - Gonzales

Gonzales Beach is located off Crescent Road, near the South end of Foul Bay Road. The neighbourhood is named for Spanish explorer Gonzalo Lopez de Haro who helped chart the waters around Vancouver Island in 1790. Joseph Despard Pemberton, the first colonial land surveyor, named his home Gonzales. The home stood at St. Charles and Rockland for almost 100 years before being demolished in 1952. And Gonzales Rd, created in the 1920s, derived its name from the house.

Over time, this area has undergone many changes, one of the greatest, as a result of the worst storm in memory, which battered the Victoria shoreline in 1969. Due to the efforts of the beach residents, no homes were lost, but in order to prevent further erosion or loss of property, the City built a retaining wall around most of the bay the following summer, giving the bay a new look.

Gonzales is a beautiful neighbourhood with some lovely amenities such as the Fairfield Shopping Centre, Oak Bay Village, the hospital, clinics and quality schools such as Margaret Jenkins Elementary. It is only minutes to Oak Bay central or to Victoria downtown. Gonzales Beach allows dogs off-leash on the beach from September 1 to May 31.

Canadian Households Struggle with Rising Debts

According to the latest MNP Consumer Debt Index (MNP is one of the largest full-service chartered accountancy and business advisory firms in Canada) released Monday, 3 in 10 Canadians say that they are already insolvent, and half say that they are $200 or less away from being insolvent at the end of the month.

Almost half of respondents said they aren’t confident they will be able to cover their family and living expenses without going further into debt this year, up 2 points since the end of the third quarter of 2019.

Only 27% of respondents were confident that they would be able to cope with an unexpected expense without increasing their debt load.

It’s difficult to think about saving a down payment to buy a home or an investment property in the face of financial difficulty, but if it is your priority, it can be done. It takes a plan, perhaps sitting down with a licensed professional to review finances and set up a budget.

Greater Victoria Neighbourhoods: Downtown Inner Harbour

Victoria's Inner Harbour is among the most beautiful and busy harbours in the world and is situated in the traditional territory of the Lkwungen (Lekwungen) peoples.

Whale watching and ecotourism businesses, float planes, an International Ferry Terminal with connections to Port Angeles, Bellingham and Seattle, and a water taxi service all operate out of this busy harbor, and the causeways feature a wealth of festivals, shows and music; especially during the summer months. The Royal BC Museum, Empress Hotel, Parliament buildings, shopping centers and multi-culturally inspired restaurants flank the shoreline adding to the early Victorian architecture so iconic in Victoria.

Since 1990, the Victoria Harbour Ferries have been serving tourists and residents with a delightful way to experience the inner harbour with tours on their little “pickle boats” captained by friendly water taxi pilots who will happily share their knowledge of the local environment.
https://victoriaharbourferry.com

From April through October, you can hop aboard to see the harbour or explore the inlet with a scenic cruise through the Gorge Waterway. Online reviewers have expressed their delight with the tours with words like “romantic and therapeutic”, “stunning and refreshing” and “pleasant and peaceful”.

The Greater Victoria Harbour Authority (GVHA) owns and operates the deepwater, marina and upland holdings throughout Victoria’s harbour. The non-profit’s Board of Directors includes representatives all stakeholders to help ensure all people and enterprises flourish in the economy of the Victoria Harbour.

Recreational vessels and small cruise ships can moor throughout the year at Causeway, Ship Point and Wharf Street. Reservations are only available online through GVHA’s website https://gvha.ca.

Greater Victoria Neighbourhoods – Rockland

The name of this historic neighbourhood is apt as buildings and walls almost seem hewn from their craggy surrounding. Located southeast of downtown and northeast of Beacon Hill Park, this urban area roughly flanks Rockland Avenue and is the northern portion of the official city neighbourhood of Fairfield. In the 1860s, Cary Castle was built on the highest point and used as residence by the Governor of Vancouver Island, and then the Lieutenant Governors after BC entered Confederation in 1871. The castle was destroyed by fire in 1903.

Today, Rockland features beautiful Arts and Crafts style heritage houses, stone walls, the iconic Craigdarroch Castle and the Government House, home to the Lieutenant Governor of BC – currently the Honourable Janet Austin.

Built by coal baron Robert Dunsmuir, Craigdarroch Castle is a National Historic Site in Canada; fully restored to provide a window into the world of 1890s privilege.  https://thecastle.ca. The castle’s four floors of intricate woodwork, stained glass windows, and opulent Victorian-era furnishings are well worth exploring.

The Government House, located on the traditional territory of the Songhees and Esquimalt First Nations, is the ceremonial home of all British Columbians. The beautiful, ornate gardens are accessible to all via a wheelchair-accessible path. During their tenure, many Governors have left their indelible mark on the garden’s developing grandeur.

Rockland is largely residential with some commercial zoning along the northern boundary. Many of the mansions have been converted to suites to provide a mix of apartments, townhouses, single-family homes, and care facilities. Throughout its recent developments, the neighbourhood successfully retained its Victorian elegance.

Interesting Notes on B.C. Assessments Around Vancouver Island

The west coast of the Island had the largest increase, with Tofino seeing a 15 per cent increase in the assessment of a typical single-family home to $883,500 and Ucluelet seeing an 11 per cent increase to $445,000.

Typical assessments for strata units in Nanaimo increased by two per cent, in Courtenay an increase of eight per cent, and in Campbell River 10 per cent.

The most valuable single-family home is 3160 Humber Rd. in Oak Bay, assessed at $15.2 million, versus $16.16 million a year earlier.

The most highly assessed property in the region was once again James Island, at $56.47 million as of July 1, 2019. In the previous assessment, the island was valued at $56.76 million.

The Island roll increased in value to $255 billion from $246.9 billion in 2019. About $4.14 billion of the Island’s assessments reflect new construction, subdivisions and rezoning of properties.

Did the Speculation Tax Have an Impact on Real Estate Activity?

Not really, according to David Langlois, incoming president of the Victoria Real Estate Board. He opined the greatest impact on real estate activity came from the lending rules.

“People’s buying power got reduced substantially in some cases,” he said, noting buyers who may have been considering the $1-million range were being forced to look at homes below $800,000. “It compressed activity into a particular price point.”

That means there were several categories of buyers looking at a limited supply of houses which creates a seller’s market and higher prices at the lower end of the spectrum, while sales slow and values decrease for homes in the million + range.

The Canadian market hasn’t seen such a shortage of listings since 2007.

With strong job prospects, low mortgage rates and population growth, real estate inventory is flying off the shelves and not enough new inventory is being built to replenish supply. More cities, including Vancouver and Victoria are likely heading towards, or already are in, a seller’s market once again.

“Essentially, after a couple of challenging years for housing, the market has picked itself up, brushed itself off, and is now looking at steady gains ahead,” wrote Bank of Montreal chief economist Douglas Porter in late December 2019.

With home sales momentum showing no signs of fading in 2020, all eyes will be on the supply side of the market. Can developers and builders catch up and keep up?

Revoked Occupancy

It’s always a problem when a building is not completed to code. On December 20th, most residents, unfortunately, had to move out of the brand new, 86-unit building in Langford at 2766 Claude Road in Langford due to gravity system concerns. (“Gravity system” simply means the vertical loading support structure for a building).

The Engineering and Geosciences organization governed by B.C. legislation has not disclosed what they deem to be confidential information regarding the situation at Danbrook One, but their investigation and discipline processes will determine if a professional engineer or geoscientist has failed to meet the professional standards or ethical obligations of the professions.

Meanwhile, the city of Langford, the public and several developers have pitched in to help displaced residents of the building with funds to alleviate some of their expenses.

Property Assessments Arriving in Your Mailbox

If you read the Times Colonist on Friday, January 3rd, you saw the front-page review of tax assessments now hitting property owner’s mailboxes across the Capital Regional District. If you haven’t received your property tax assessment yet, you can access it through bcassessment.ca.

This year’s assessment roll showed little change to slight drops in Greater Victoria single-family home values. Homes in Oak Bay saw the greatest drop of six percent. Homes in Highlands and Central Saanich saw no change. Langford, Sooke and View Royal saw increases in the typical assessment, with the greatest increase of three per cent in Sooke.

The condo market saw values rise across nearly every municipality in Greater Victoria; from two per cent in Saanich, Oak Bay and Esquimalt to four per cent in Langford and Colwood.

Keep in mind, these assessments are an estimate of a property’s market value as of July 1, 2019. If you find yourself in disagreement with your property assessment, you have the right to submit a notice of complaint by January 31st to ask for an independent review. The property assessment review panel members are appointed annually by the Ministry of Municipal Affairs and Housing and they meet between Feb. 1 and March 15 to hear complaints.