Is the Bottom Going to Drop Out of Real Estate? Not Likely

RBC senior economist Robert Hogue, who studies Canadian housing prices, isn’t convinced the bottom’s about to fall out of the market. He says there is an affordability problem, but there isn’t going to be a big correction.

“Hedge fund people have been saying for a decade that we’re in a bubble and that there’s going to be a big correction, but that hasn’t happened,” said Hogue. “Really, the numbers are reflecting Vancouver and the Greater Toronto Area, and we’ve seen a bit of a cooling off in both those places already. And that’s a healthy thing. It’s better to have a gradual, small correction than a sudden one.”

Was Applying the Vacancy Tax to the Island a Reaction to the Lower Mainland Problem?

The Times Colonist reported on a survey of real estate agents on Vancouver Island which demonstrated our real estate market is focused on local buyers, with few interested in investment or recreational property which often remain vacant for extended periods of time.

91 per cent of all buyers came from B.C. and 1.87 per cent from outside Canada, and so far this year that breakdown remains the same with 90 per cent of all buyers coming from B.C. and less than 1.5 per cent from outside Canada.

It also found 59 per cent of all buyers were purchasing for retirement purposes and that only 2.5 per cent were buying homes as an investment or for recreational purposes.

Construction & Real Estate Industry Driving GDP

Canada’s real gross domestic product (GDP) came in at $1.97 trillion in May, up 0.23% from the month before; a seasonally adjusted $4.52 billion. The real estate and construction industries were responsible for most of May’s rise with revenues for real estate, rental, and leasing hit $250.69 billion in May, or 12.75 per cent of total GDP.

Increased construction activity across Canada represented 27.06% of growth, residential construction being over 80% of that number.

Reference:
https://ca.reuters.com/article/businessNews/idCAKCN1UQ1UG-OCABS
https://www150.statcan.gc.ca/n1/daily-quotidien/190731/dq190731a-eng.htm

Amazing Anonymous Donation!

Broadmead Care Society last week announced the New Home for Nigel House Campaign thanks to an anonymous $1-million matching donation. Their goal is to raise $3 million to go towards building a new home for adults with disabilities on Vancouver Island which will cost an estimated $40 million.

The new Nigel House, located near the Uptown shopping centre, will house 41 residents between the ages of 19 and 55. It will have single rooms, a rooftop garden, and feature accessible rooms and hallways and pathways to ensure residents can access the nearby shopping and parks.

Read more at
https://www.timescolonist.com/islander/our-community-anonymous-donation-helps-nigel-house-1.23891498

Are Tiny Homes Fad or Future?

Some might assume tiny homes are simply a fad, but, with the average cost of a single-family home in Victoria Core coming in at $859,600, according to the Multiple Listing Service® Home Price Index benchmark value, tiny homes may be a sustainable solution for several demographics, including developers, first-time home buyers and, subsequently, renters.

But not everyone is sold on the idea of a tiny home. The size, lack of information around appropriate city bylaws regarding this housing model and obtaining mortgage financing on tiny homes are some of the reasons why they haven't taken off.

Despite this, its economical, low-carbon footprint qualities, the low energy and maintenance costs, and its price make this model attractive to many. 

Reference: https://www.cbc.ca/news/canada/newfoundland-labrador/tiny-homes-more-than-a-trend-prajwala-dixit-1.5061237
https://www.vreb.org/current-statistics

Victoria Neighbourhoods – Oak Bay

Money Sense magazine voted Oak Bay as the third best place to live in Canada in 2017. It is an affluent area with magnificent homes, seafront panoramas, and healthy living. Gorgeous homes are a short walk to beautiful beaches. Everything you could want to enjoy life is here.

A beautiful neighbourhood greets people as they walk down Oak Bay avenue. Specialty shops, gourmet food places, and boutiques abound. The meticulously decorated downtown turns into a wonderland of Christmas lights along the avenue during the winter season.

Kitty Inlet natural waterfront park is a great place to view marine life and water vessels. Admire the Olympic Mountains and Trial Island from the comfort of permanent wooden chairs. Outdoor painted pianos speckle the coast, parks, and Oak Bay Village. The Arts Alive outdoor public art program features works of art from across Canada – each with its own story!

Eating out is an enjoyable experience in Oak Bay. Have coffee or wine on the patio of the Windsor Café. With a world class reputation, the Marina Restaurant never disappoints with bounty from the sea cooked to perfection. Enjoy an all-day breakfast menu at The Village Restaurant. If you’re looking for excellent fare and drink in Olde English pub charm, try the always popular Penny Farthing

Oak Bay village is well known for its high-end bookstores. Ivy’s bookshop always has the latest bestsellers and they do special orders. Many recreation centres offer fitness classes, such as Oak Bay Recreation Centre, complete with a pool and water slide, and ‘Fit for Life’ Fitness Studio for older adults. The Monterey Centre has amazing educational programs, art programs, and classes for seniors and activities for children.

Oak Bay is an Eden-by-the-sea.

Household Debt in Canada:

An insolvency firm called MNP Ltd. made the news last December when they announced their survey found 31 per cent of Canadians say they don't make enough to cover their bills and debt payments. The Office of the Superintendent of Financial Institutions (OSFI), who’s mandate is to protect Canadian financial systems by making sure the institutions are stable has been worried about Canadian household debt for some time. They introduced the B-20, also called the “mortgage stress test” to make sure Canadians didn’t borrow on the edge of their abilities. The stress test stipulates home buyers must demonstrate they can afford the mortgage at two per cent higher than their mortgage rate.