Real Estate in Victoria BC


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 home owners who haven’t done their research.

In the interview, Mandini stated, "I see a correction between 20-40 per cent in the Canadian housing market in five years," He suggests “there will be a slight dip in Toronto housing prices before the end of the year, but that's all it will take to scare many homeowners into cashing out of the market.”

His proof? The latest housing data from the Real Estate Board of Greater Vancouver and the Toronto Real Estate Board. He says the ratio of sales to new home listings is falling, which would indicate that a large decline in prices is on the way.

I’m no economist, but a little common-sense thinking demonstrates why his predictions are very unlikely. A normal family is not going to be scared into selling their homes as Mandini suggests. Rather, they are going to take on the “hunker down and weather the storm” attitude, simply because selling their current home would mean they then need to buy a new home. Uprooting your family to move is a big undertaking!

A more likely scenario is many families will decide to access their home’s equity to increase their family’s financial liquidity while the opportunity exists. That will lead to a big bump up in household debt coming by Q2, and a short-term increase in economic consumption through Q3 and Q4.

There may very well be a “soft” landing for real estate prices in Vancouver and Toronto, which will have a cooling effect on provincial economies in British Columbia and Ontario as home owners who remortgaged to sustain their current lifestyle find the “bank of house” drying up, coupled with the decline in consumption related to home purchases like furniture and appliances.

The central bank’s financial review detailed concerns over household debt and the housing markets, but allayed fears that a U.S.-style meltdown and broader Canadian crisis is part of the equation. They believe Ontario’s recent measures - the 15-per-cent tax on foreign purchases to tame the scorching-hot housing market in and around Toronto - should ease the risk. (But remember, Vancouver is now on the rebound after slumping in the immediate aftermath of B.C.’s implementation of a tax on foreign purchases).

In their list of threats and vulnerabilities, a moderate risk for B.C. and Ontario includes “the fall in house prices leading to negative wealth and collateral effects, which further weigh on consumption spending,” but Benjamin Reitzes, Canadian rates and macro strategist at BMO Nesbitt Burns feels the overall finances of Canadians are nonetheless in decent shape.

“Admittedly, households are vulnerable to higher rates, but it doesn’t look like big rate increases are coming any time soon,” he says.

the Canadian Real Estate Association releases its May report on sales and prices, BMO expects the report to show home sales down 5.5 per cent from a year earlier, and average prices up 6.5 per cent.

There’s no doubt Canadian families’ fortunes are closely tied to their homes. Watch for Statistics Canada quarterly report on household debt and wealth later today which, among other things, measures household debt to disposable income. It will be released later today.


Seniors Leaving Vancouver to Take Advantage of Housing Market

According to the Globe and Mail published Sunday, May 21st, Baby Boomers are cashing out with their real estate boon and leaving the Greater Vancouver region in high numbers.  In the tides of people arriving in Vancouver and the tides of people leaving, there has been a net loss of around 3,385 Boomers according to an analysis by University of British Columbia sociology professor Nathanael Lauster.

“It means less people for volunteering, less people supporting arts-and-culture institutions,” says Penny Gurstein, director of UBC’s school of community and regional planning. “Look at the opera now in Vancouver: there just aren’t enough people in that cohort to support it.”
While young people are arriving in droves, the region is losing a lot of people with job, life, and community experience.

Read the full article HERE


2017 April Market Report by Frank Rudge, Remax Real Estate in Victoria, BC


Is the Victoria Real Estate Market Overheated?

CMHC Senior Market Analyst Eric Bond calls Victoria’s Real Estate market “Overheated”. In his opinion, the city of is facing a housing affordability crisis, with the average price of a home reaching $640,802 in March, up 11.3 per cent compared to March 2016. Put another way, the first quarter of 2017 saw the average price for a single-detached home increase by 19 per cent as compared to the same quarter last year.

The Victoria Real Estate Board reported the Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in March was $790,100 -  a 19.1 per cent increase from March 2016.

Despite the presence of strong market fundamentals like employment growth, increased population driven by younger demographics and low mortgage rates, CMHC doesn’t think the market’s price acceleration can be justified by these factors alone.

To assess the states of the housing markets, CMHC looks at four factors. 

To find out more, CLICK HERE


Real Estate Inventory in Victoria Edging Up... A Little

May 1, 2017 - “The numbers we saw in April are a further indication that the market is gradually moving towards a more balanced state compared to the record setting pace of 2016.” says 2017 Board President Ara Balabanian.

A total of 885 properties sold in the Victoria Real Estate Board region this April*, 31.2 per cent fewer than the 1,286 properties sold in April last year. The ten year average for sales in April is 772 properties.

“We are starting to see hints of a more traditional spring market. Local agricultural production has been delayed due to the late spring, and so has the local real estate market,” adds President Balabanian, “More sellers listed their homes for sale over the month of April compared to the month previous.”

There were 1,690 active listings for sale on the Victoria Real Estate Board Multiple Listing Service® at the end of April 2017, an increase of 8.6 per cent compared to the month of March, but 34.8 per cent fewer than the 2,594 active listings for sale at the end of April 2016.

* Properties sold in the Victoria Real Estate Board region includes the southern tip of Vancouver Island up to just south of Cowichan Bay, the Peninsula, the Western Communities along with Salt Spring, Pender, Saturna, Mayne and Gailiano Islands. See map.

If you are interested in reading the full VREB’s report online, CLICK HERE.


Thoughts on the Canadian Housing Bubble

On April 7th, MacLean’s ran an extensive article written by Joe Castaldo entitled, “How Canada completely lost its mind over real estate”.

Right now, Toronto’s list prices are largely meaningless because properties are routinely selling for well over asking price. In his article, Castaldo illustrates with details of the recent sale of a semi-detached home listed in the city’s west end for $699,000.

“To step inside (the home) was to travel back in time to the 1970s. The house was festooned with brown rugs, brown linoleum floor tiles and, in the basement, wall-to-wall wood paneling. After just five days on the market, it sold for $1.03 million in March—$331,000 more than the list price.”

There is an excessive amount of real estate speculation occurring in the city right now – not by foreigners, but by Torontonians! Many feel the party will not end – that housing prices will continue to rise, even though many experts are calling for caution in what many deem to be a housing bubble.

Does Toronto’s escalating prices have any bearing on real estate in Victoria BC? Well, some, but not in the same way.  In British Columbia, real estate and related fields such as construction and finance make up an astounding 40 per cent of GDP! It’s a vital industry, yet in Victoria, there is a massive shortage of supply for the growing demand!

If you're in a position to sell your home, let's talk best strategy to maximize your profits.


Making an Offer in a Competitive Market

Imagine finding a home you love, making an offer, and then finding out there are other competing offers on the table. Ouch! If you’re looking for a property in a competitive market, it is likely that there will be multiple offers. Even just one can create the risk that you’ll lose the home. So how do you make sure your offer is enticing enough to win over the seller?

Here are some ideas:

• Don’t make a low-ball offer. If you do, it might be dismissed and you probably won’t get another chance to bid — especially if the other competing offers are near the listing price.

• Have a pre-arranged mortgage and include that with your offer. This reassures the seller there won’t be any money issues. (Most lenders will provide you with a pre-arranged mortgage certificate for this purpose).

• Go in with a price high enough that the seller will be interested, but not so high as to be leaving money on the table. This is tricky and requires a savvy knowledge of the current market.

• Have a REALTOR® present the offer on your behalf. A REALTOR® will know how to do so professionally, and in a manner that gives you the best chance of getting the home.

In a competitive situation, working with a REALTOR® who is an expert on the local market — and a skilled negotiator — is crucial.

Looking for a REALTOR® like that? Call today.


Meet Frank Rudge

Frank Rudge is an energetic, enthusiastic individual. He enjoys people and people find him very personable and professional.

He was born in Grande Prairie, AB and moved to Edmonton, AB to attend the University of Alberta. He started selling real estate in Edmonton in 1976.

He and Betty, his wife of 43 years, decided to move to Victoria in 2001 and Frank chose to work with Re/Max where he dedicated himself to excellence. In his fourty-one year tenure, he has won the Silver and Gold Award with VREB (Victoria Real Estate Board) and the Platinum Award with Re/Max.

Frank has always liked to stay fit, so when he arrived in Victoria, he decided to take up rowing. He rowed his way to win numerous medals in regattas, and a Gold medal at the World Games in Edmonton. His athleticism and love of sports led him into coaching high school students and adults in the corporate challenge program which he continues to do today.

He and his wife have four grandchildren whom they are proud of and see often. Their son and daughter in law reside in Edmonton and their daughter and son in law reside in North Vancouver. All are very successful in their chosen fields.

When you meet Frank Rudge, expect to meet an energetic, vibrant man who loves family, rowing, his community, and who cares deeply about helping you find your perfect home.