No Rentals to be Found

The rental vacancy rate in B.C. has hovered at an average of 1.3 per cent over the past three years, according to stats from the Canadian Mortgage and Housing Corporation.

In Victoria, the rate sat at only 0.5 per cent at the end of 2016.

In the Lower Mainland, the City of Vancouver’s rate is 0.8 per cent, while Surrey sits at 0.4 per cent. The rate is 0.5 in Abbotsford and Mission, and White Rock has the fewest available rentals in the region, at 0.1 per cent.

Kelowna is sitting at 0.6 per cent.

If you have kids going to Royal Roads, Uvic or Camosun College, consider helping them buy a condo instead. A condo is a valuable family asset that will appreciate, and a good way to set your kids on a path towards building their own financial future rather than a landlord's.

Reviewing Home Equity Lines of Credit (HELOCs)

In recent years, home equity lines of credit — or HELOCs — have become popular for homeowners that want to turn their huge house price gains into cash.

In a HELOC, a lender allows a borrower to withdraw a certain amount of money against the equity in their home. The interest rates tend to vary between 0.5 and two points above prime, so they're a little more expensive than mortgages.

And they are extremely convenient. While people will do anything to make their monthly house payment and avoid default, HELOCs allow borrowers to simply make payments against the interest with no obligation to pay down the principal each month. Most people had no real intention to pay them off, and most felt safe about taking a loan in the face of rising home values. Almost 40 per cent of people who have them did not make regular payments against the principal. They owe the same amount on the principal as they did four or five years ago.

A generation ago, the common wisdom was to pay off your mortgage. Now people are using their homes like an ATM. That’s a big shift in financial thinking, and it may not serve them as well with the looming economic realities.

HELOCs are not a small share of the market either! Currently, there are over three million active HELOCs across Canada, with an average balance of about $70,000.

Statistics Canada 2011 reported 13,320,610 homes, meaning 23 per cent of homes are using HELOCs with an average balance of $70,000 per home. That’s 211 billion dollars in loans.

The downsides of HELOCs:

Before you consider taking one, be aware of three facts:

They can be called in at any time. They are "demand loans" which means, unlike a mortgage, the lender can call them in at any point and insist on paying back the full amount.

Most are set at variable rates and are in lockstep with central bank rate hikes. Your interest payments are going to increase.

Most have no limitations on how fast they can rise beyond that with no warning.

I'm not saying you shouldn’t get one. After all, lenders will be unlikely to call in those loans and start a panic. But, don’t let low monthly payments lull you into forgetting this is a loan, and the $211 billion in outstanding HELOC debt is a greater risk to the Canadian economy than mortgages ever were.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil55c-eng.htm

http://www.cbc.ca/news/business/interest-rates-helocs-canada-debt-1.4192847

http://news.buzzbuzzhome.com/2016/12/canadians-mortgage-debt.html

Just to Say "Thank You"

As the summer rolls into fall, I want to take the time to thank all my wonderful clients whom I’ve had the privilege of serving. Helping you find a home you love or helping you sell the place you’re saying goodbye to is what motivates me every day.

It’s a privilege to say all my clients have become friends, and I’m always interested to hear about latest happenings in your life over a cup of coffee.

Finally, thank you to my clients who expressed their gratitude for what I get to do. It’s humbling and gratifying at the same time.

“The peace of mind that Jane gave to us was one that is borne out of genuineness, caring and support; simply stated, we felt like we were treated like family.”

Meagan and Dennis Oliphant

DIY Home Staging Strategies

As you prepare to sell your home, are you thinking about how to stage it to ensure it is universally desirable to your prospective buyers?

Human beings are wired to have an emotional response to physical surroundings. There is a lot to be said for the ancient Chinese philosophical system of Feng Shui which makes a study of arranging environments to create or reinforce harmony and comfort. Even colours have a measurable effect on psychology, leading to that moment a buyer walks into your home and says, “It feels just right”!

A professional stager can help you feature your home in a way that can add thousands of dollars to your asking price, but I understand if you are a reluctant or a bit suspicious of the hoodoo of home staging.

If you feel you can do a good job staging your home on your own, I recommend these five simple staging ideas:

Remember Personality Doesn’t Sell

This is almost always the biggest mistake home sellers make, so if nothing else in today’s blog makes an impression, please understand this: The personal touches you love in your home are all about you and may not be universally appreciated. Please do not fool yourself with the notion that your beloved home will sell itself, or try to model your home’s “personality”. I’m being tongue-in-cheek, but that high-resolution image of your regiment of garden gnomes should never be included in your listing!

Corral the clutter

The coveted rock collection and family photos are distracting clutter that takes the buyers attention away from the flow of the rooms, and any interesting architectural features. For the cost of a roll of tape, boxes and possibly renting a small storage space, get your treasures pre-packed. Doing so will depersonalize the space and automatically increase the perceived dimensions of your home. Prepacking is also a simple step towards emotionally preparing for your inevitable move.

White it out

Are you prepared to paint? Fabulous! You can’t go wrong with white or bright neutral palate. Hotels are well known for using white to demonstrate how clean everything is.

A simple coat of white or neutral paint elevates the perceived value of the property and creates a “move-in-ready” feel that buyers are willing to pay top dollar for. White signifies clean, fresh, and new.

Light it up

Electricity isn’t free, but since you will be turning on the lights for photographs and showings anyway, I suggest you go the extra step by adding accent lights to really set the scene. It’s simple to place them strategically to add drama and to illuminate shadowy corners.

Completely retracting blinds or removing window coverings will let in as much as fifty percent more natural light.

A clear window will enhance the view, and create that sense of openness and space, so pack away any curtains or window-hangings, especially those dated ones, and let the window frame be the highlight.

Mow and Mulch

In addition to a freshly moved lawn, mulch adds instant curb appeal. Mulch is inexpensive, comes in a variety of lovely shades and textures, and adds cultivated freshness to scraggly, dry, or unkempt garden beds. Ordered by the load or purchased in bags, mulch is lightweight and perfect for a DIY, last minute staging.

Conclusion

These five simple staging tasks will show off your home’s very best features, add both real and perceived value, and maximize returns for you!

Short-Term Predictions for Canada's Real Estate and Household Debt

Last week, the Bank of Canada reviewed the financial system and downplayed fears that the Canadian economy was in serious jeopardy from a potential real estate market correction.

About time!

We are NOT going to suffer a U.S.-style melt-down. If a big drop in home prices were to occur in the Vancouver and Toronto regions, (which Is unlikely), it wouldn't drag the rest of the country down with it. As the Bank of Canada sees it, a full-on bust in the Toronto and Vancouver regions would have only “modest direct spillovers to housing markets in the rest of the country.”

Most experts do not see anything like a full bust coming, albeit sensationalist reporting from, for example, CTV News quoting David Mandani, senior Canadian economist of Capital Economics on Monday continues to scare homeowners who haven’t done their research.

Read more HERE

Garden Suites, Carriage Houses or Laneway Houses in Victoria

“Build it and they will come. Well we have a reverse problem: they have come, but we haven’t built it.” - Victoria Mayor Lisa Helps, April 13.

If you live in Victoria and you want to build a garden suite, carriage house or laneway house, good news! Garden suites will be permitted in all of Victoria’s single-family residential areas, and you no longer need to undergo a rezoning. All the existing requirements for size, setbacks and height will remain in place, but in order to streamline the process, you do not have to notify your neighbours (though it might be a good idea for the sake of neighbourly relations), and no rezoning triggered public hearing.

What this decision by City Council will do is increase options for renters who currently face an extremely low vacancy rate currently below half a percent, and homeowners will appreciate the chance for rental income. It you’re planning on selling your home, creating a garden suite will maximize your home’s sale value, and make it more attractive for buyers who may need a mortgage helper.

Spring 2017 Newsletter

POPULATION GROWTH AND REAL ESTATE ACTIVITY

The 2016 census recorded a population of 367,770 in metropolitan Victoria, an increase of 6.7% over 2011.  Most of the population, 235,689 (64%), reside in the Core Communities, followed by the West Shore with 82,543 (22%) and the Peninsula with 39,735 (11%).  The West Shore led in population growth at nearly +13%, largely attributed to growth in Langford at +21%.  The Core Communities grew by +5.2%, led by Esquimalt at +9%.  The Peninsula grew by some +4%, led by Central Saanich at +5.5%. 2016 was a record-breaking year for the real estate market in Victoria. There were 10,098 residential sales through the Victoria Real Estate Board’s MLS® in 2016, nearly double 5,492 sales in 2011.  Similarly, the dollar value of sales more than doubled in the same period, from $2.73 billion in 2011 to $5.98 billion in 2016.  The average sale price increased by $95,370 over this five-year period, up some +19.2%. 

Residential sales in the Core Communities reached 5,773 in 2016, an increase of +72% from 3,351 in 2011.  Over the same period, the total value of residential sales increased +109% and the average sale price rose to $632,482, an increase +21% over 2011.  Clearly, many buyers are willing and able to pay for more expensive housing to enjoy the convenience and the amenities available in the core area of Greater Victoria.  The proportion of sales in the Core Communities fell by -3.0%, from 64% in 2011 to 61% in 2016. There were 1,124 residential sales on the Peninsula in 2016, up from 715 in 2011, an increase of +57%.  The value of residential sales increased +104% and the average sales price reached $686,970, an increase of +30% over 2011.  The average sale price reflects the impact of the number of waterfront and estate type properties on the Peninsula. The proportion of sales on the Peninsula fell -2.0%, from 13% in 2011 to 11% in 2016.  The West Shore has experienced the most rapid growth in real estate sales in the region.  Residential sales reached 3,201 in 2016, up +125% from 1,426 in 2011.  The total dollar value of residential sales rose +159% over the five-year period.  The average sales price reached $487,307, an increase of +15%, which is modest when compared to other areas.  The West Shore still offers the most affordable housing in the region and is the preferred choice of many first-time home buyers.  At the same time, the proportion of sales in the West Shore increased +6.0% from 26% in 2011 to 32% in 2016.

THE VICTORIA MARKET

Perhaps the predominant characteristic of Victoria’s real estate market in the 1st Qtr of 2017 is the shortage of supply and the accompanying upward pressure on prices.  Supply (i.e., the number of homes put up for sale) has not been this low in more than twenty-five years.  Demand (i.e., the number of sales) remains high, indeed many argue that sales would have been substantially higher had there been more properties available to purchase.  Sale prices continue to increase.  The differential between the sale price and the original list price has decreased. Indeed, most homes sold at or above their list price. Finally, properties are spending less time on the market.  The number of “residential properties” (i.e., all types of housing excluding lots/acreage and commercial properties) listed through the Victoria Real Estate Board’s MLS® in the 1st Qtr of 2017 was 2,453, down -26.0% from 3,316 in the 1st Qtr of 2016. Residential sales through the VREB’s MLS® totaled 1,955 in the 1st Qtr of 2017, down -14.6% from 2,289 in the 1st Qtr of 2016, but still up +26.5% from 1,546 sales in the 1st Qtr of 2015.  The sales-to-new-listings ratio was .80 (a remarkable figure for this time of year) even stronger than .69 last year.  Properties that sold in the 1st Qtr of 2017 were on the market for an average of 32 days compared to 49 days last year.  The average sale price of a residential property in Greater Victoria and other areas was $628,293 in the 1st Qtr of 2017, up +13.5% from $553,417 in the 1st Qtr of 2016.  The median sale price was $535,000 in the 1st Qtr of 2017, up +9.2% from $489,900 last year.  The figures for Victoria compare with average residential sale prices and year-to-date percentage changes of $950,185 (13.3%) in Vancouver, $624,704 (-8.4%) in the Fraser Valley, $834,628 (+25.6%) in Toronto and $459,337 (+2.6%) in Calgary for the first two months of 2017. THE MARKET INVENTORY As shown in Table 2, there were 981 properties active on the VREB’s MLS® database for the Greater Victoria area (i.e., excluding the Malahat, Up-Island and the Gulf Islands) on Apr 1, 2017, down -43% from 1,712 on Apr 1, 2016.  (This is the lowest the inventory has been on an April 1st in over two decades).

SINGLE FAMILY DWELLINGS (SFDS)

Sales of SFDs in Greater Victoria totaled 937 in the 1st Qtr of 2017, down -23.4% from 1,223 sales during the same period last year.  The average sale price of SFDs in the 1st Qtr of 2017 was $839,019, up +17.9% from $711,555 last year.  The median sale price was $734,000 in the 1st Qtr of 2017, up 17.9% from $622,500 last year.  SFDs that sold in the 1st Qtr of 2017 were on the market for an average of 29 days, down from 35 days a year ago.  The sales-to-new-listings ratio was .74 in the 1st Qtr of 2017, up from .50 last year.  As shown in Chart 4, both the average and median sale prices have been on a steep upward trend since the 4th Qtr of 2014.

CONDOMINIUMS

Condominium sales remained strong in the 1st Qtr of 2017 with total sales of 668, up +6.2% from 629 in the 1st Qtr of 2016.  The average sale price for a condominium was $393,852 in the 1st Qtr of 2017, up +17.8% from $334,235 last year.  The median sale price was $350,000, compared to $290,000 last year.  Condos that sold in the 1st Qtr were on the market for an average of 21 days, down significantly from 56 days last year.  The sales-to-new-listings ratio was .78 in the 1st Qtr of 2017, up from .76 last year.  As shown in Chart 5, the average and median sale prices of condominiums recently have shown a steady upward trend.

TOWNHOUSES

Townhouse sales totaled 180 in the 1st Qtr of 2017, down -27.4% from 248 last year.  The average selling price was $507,315 in the 1st Qtr of 2017, up +11.5% from $454,841 in the 1st Qtr of 2016.  The median sale price was $471,450, up +10.5% from $426,500 last year.  Townhouses that sold in the 1st Qtr of 2017 were on the market for an average of 26 days, down from 48 days last year.  The sales-to-new-listings ratio was .80, compared to .53 last year.  As shown in Chart 6, average and median sale prices have shown a steady upward trend over the past two years.

LOTS/ACREAGE

There were 57 sales in the 1st Qtr of 2017 compared to 66 sales in the 1st Qtr of 2016, 34 sales in the 1st Qtr of 2015 and 24 in the 1st Qtr of 2014.  The average and median sale prices of lots/acreage in the 1st Qtr of 2017 were $333,372 and $216,000 respectively.  (Note: the clear majority of these sales were in Sooke where land is comparatively less expensive).