Victoria Market -- Buying new condo completed in June 2017

[Geoffrey]

Hello All,

The Victoria market is insane right now. Houses with suites go in a day at 100K over asking. Nice condos in James Bay go at 100K over asking too. How do you make money in this market?

I recently moved here and have a small salary so only qualify for a condo up to 440. I bought one subject to conditions. It is a 2 bedroom 2 bathroom brand new one that will not be built until June. I am told that the value with jump once it is complete because people want one that is finished.

Is this true? In a year or May 2018 I'd like to sell it, hopefully at a profit that outpaces the "old" market, and get into something I actually want to hold for 20 years. It sound good, but feels speculative. But better than alternatives.

Any advice from those with knowledge or experience with buying brand new condos not yet built in a hot/low inventory market?

 

[Rob@huzzora]

"feels speculative" is the key. That's your gut telling you something is wrong with this picture. But you probably don't have enough information to confirm that. Don't let the hysteria and emotions get the best of you. If you want to be an investor, keep your cool and buy when people are trying to get rid of their properties not when you are in the crowd bidding UP the price. That's the opposite of what you want. 100K over asking? That's a bubble. You want to hop in during a bubble run up and try to catch some of that? Possible that it works for ya but also very possible that you get stuck with an over priced condo with a huge mortgage when this thing drops. And there is good evidence that this is already falling in some ways.

Check out garth turners greaterfool blog for more info. He is biased, but I still believe he is correct.

In the end it's a risk and I personally don't like those risks but maybe your willing to do it. At least understand what the risk looks like before you do it. Cheers and good luck!

Huzzora com

 

[Thomas Beyer]

I'd say buy 2 or 5 as Victoria will be hot for a while (say to 2019) until prices are truly unaffordable like Vancouver or they too slap a 15% foreigner tax onto it. Land base is low and building difficult and lenghty.

Certainly risky but profitable.

Garth Turner has been wrong most of the time. He is the greatest fool of all, truly.

 

[Geoffrey]

Thank you both, for your replies.

You are both right I think. More research needed, but this is not the kind of bubble that will burst. There's few areas to build and many factors pushing prices up. They level off, but rarely go down. Best to get in now.

I think this condo is risky in that it is over priced and I may not get a room mate. But as long as I resolve not to sell until its value hits about 500, there will be gain. Wish it had been possible to buy 2 years ago, but then again, if Thomas is right we have a long ways to go yet.

Don't know who Garth Turner is.

 

[Thomas Beyer]

Don't know who Garth Turner is.

He is the author of this http://www.greaterfool.ca/ .. opinionated and often wrong. A perma-bear who predicted a bust 20 years ago and annually ever since.

 

[Tina Myrvang]

Hello All,

The Victoria market is insane right now. Houses with suites go in a day at 100K over asking. Nice condos in James Bay go at 100K over asking too. How do you make money in this market?

I recently moved here and have a small salary so only qualify for a condo up to 440. I bought one subject to conditions. It is a 2 bedroom 2 bathroom brand new one that will not be built until June. I am told that the value with jump once it is complete because people want one that is finished.

Is this true? In a year or May 2018 I'd like to sell it, hopefully at a profit that outpaces the "old" market, and get into something I actually want to hold for 20 years. It sound good, but feels speculative. But better than alternatives.

Any advice from those with knowledge or experience with buying brand new condos not yet built in a hot/low inventory market?

Easily understand Victoria's key economic indicators and what they mean to safe and secure investment opportunities from our Economic Fundamentals Report.

• Economy (GDP)
• Jobs
• Population
• Rental Demand
• Vacancy Rates
• Rental Rates
• Real Estate Market Demand & Prices

Click HERE to access the report!

 

[REInvestors888]

Hi Tina, by any chance, is there similar report for Niagara Falls, On?
Is it a good area to invest? Any insights from the rest?
Thanks.

 

[Tina Myrvang]

Hi Tina, by any chance, is there similar report for Niagara Falls, On?
Is it a good area to invest? Any insights from the rest?
Thanks.

Hello,
We do not have a report for Niagara. Email me at [email protected] and I can help you find data on Niagara Falls.

 

[DEWDROPS]

Check out garth turners greaterfool blog for more info. He is biased, but I still believe he is correct.

Huzzora com

Could u explain why do u think he is right?

I started reading his blog a yr ago and I believe his logic may be somewhat correct in theory but real estate doesn't really follow economic fundamentals. Look at Toronto and Vancouver where median family income have no relation with house prices, or even Calgary where unemployment rate rose to above 10 percent but prices are sticky.

The only thing made sense was his 'rule of 90'.

 

[Geoffrey]

I read that Victoria report last year and, just five minutes ago, downloaded it again before seeing it posted here. What a coinkidink

ANOTHER QUESTION:

What kind of appreciation difference will there be for a not yet completed condo at 440 compared with an already completed property at 650. Is there a big difference and is it better, all else equal, to go with the unfinished product?

 

[Thomas Beyer]

ANOTHER QUESTION:

What kind of appreciation difference will there be for a not yet completed condo at 440 compared with an already completed property at 650. Is there a big difference and is it better, all else equal, to go with the unfinished product?

Assuming 650 is true market value today then you can expect at least 650 for the 440 presales condo. But of course location, beach proximity, view, interior finishings, perception, location, size, landscaping etc all play a role and as such, "similar" needs to be further analyzed in far more depth.

I'd also expect that 650 condo to be at least 700 or even 750 next year. So buy 2-5.

Job market is not great in Victoria so it must cater to either students ( ie conveniently located close to UVic or on a direct bus route) or appeal to seniors or semi-retirees from cold weather provinces or to US Trump refugees.

But: expect BC's 15% tax to be extended to Victoria, Kelowna and possibly all of BC right after the BC May election. As such some overpriced properties will drop in prices 10-15% like they did in Vancouver.

Be mindful of the risk. Some Vancouver speculators got caught with their pants down. Don't be one of them !

 

[Geoffrey]

Oh I didn't communicate properly. The condo is 440 but it's a different property that is over 600 and I'm comparing the two.

Now what is the evidence for the 15% tax to be extended to Victoria that soon?

And doesn't that negate the advice to buy 2-5 condos now?

Also is it possible to send private messages?

 

[Thomas Beyer]

I'd expect the 15% foreigner tax in Victoria any time, possibly even before the May election and in Kelowna, too. Likely more taxes coming to a BC property near you, as prices in Vancouver, Victoria or Okanagan continue to escalate http://www.vancouversun.com/busines...+vancouver+housing+crisis/13081155/story.html