Multi family shortage on its way for Vancouver Island and Victoria.

With the huge increase in the value of single-family homes, the possibility of ever doing a Land Assembly anywhere in Victoria is over for the time being.

A land assembly is when Realtors® and or developers bring together adjacent lands to make a larger parcel to accommodate a larger development of houses, townhouses, low rise, or high-rise condominiums.

However, in Victoria, the combined value of the land plus existing structures have placed properties out of reach for Developers to assemble at a dollar amount that can support a re-development.

Couple that with increase building costs due to the current shortages of materials and labor, and I predict that we will see a severe shortage of new housing over the next 2 years leading to an overall shortage of available market housing.

If you currently own land that has been assembled, have a hard look at it because its value has increased. If you currently own land that has been assembled and is now zoned for its highest and best use, take time to seriously consider your options.

There is a land rush on right now according to my colleagues from here to Campbell River, the Gulf Islands, Port Alberni, Ucluelet, and Tofino.

Finally, keep in mind, the best time to sell is when few are selling, the best time to buy is when no one is buying.

Call me if you are looking to sell or purchase a property. My team and I will complete a full analysis of the property and your situation to determine the best course of action.

Chuck Meagher



Impacts of B.C. Condo Insurance Increases

The news is full of dire warnings about condo insurance of late and I’ve been receiving calls from people who are concerned, so I think this topic needs to be addressed.

What’s Happening at Maija London?

The Vancouver Sun ran an article entitled “B.C. stratas on edge after reports of soaring insurance premiums” and it talks about how condos across B.C. could be hit by soaring insurance bills this year, a New Westminster strata council president is warning. Note “could be”.

Not to make light of what is a very real concern many condo owners are facing; especially owners of older condos, I’m happy to inform you Maija London is in an excellent position to weather the concern.

Maija London’s insurance is in place with very little increase, as will be reported in the upcoming Strata AGM. Because it is new and was constructed by a diligent builder, it is up to date on the latest building code improvements, and that’s a very important consideration with insurance adjusters.

What’s Happening in B.C.?

After receiving around one hundred distress calls from stratas across B.C., the Insurance Bureau of Canada, a national industry association, the B.C. Ministry of Finance launched a task force to review the issue across Canada, and will meet next month with affected groups in B.C. including the B.C. Ministry of Finance.

“While specific product pricing is a matter for the insurance industry, we are working with the British Columbia Financial Service Authority to monitor the situation carefully and ensure we are doing everything we can to financially protect British Columbians,” said Finance Minister Carol James.

Last week the Insurance Brokers Association of B.C. (IBABC) called for consultation among all key stakeholders to discuss owner liability in condo corporations, with a focus on proposed legislative action. IBABC recommend two key reforms to the Strata Property Act:

  • A $50,000 cap on loss assessments (which may not apply in cases involving negligence).
  • The addition of a standard definition of a strata unit.

The lack of a or “standard unit definition” in B.C.’s Strata Property Act often complicates deductibles and coverage, and a “bare-bones” definition would encompass the structural components of the unit, such as walls, ceilings, drywall, sub-floor, basic electrical, plumbing and some HVAC components, including the requirement to meet applicable fire and building codes. It would not include most finished items, such as floor finishing, carpets, countertops, plumbing fixtures, appliances, and any upgrades.

Additional Ways to Protect Your Investment

Consider acquiring condo unit owner’s insurance. Condo insurance isn’t mandatory in most buildings (yet), but it’s a type of coverage that can be invaluable if you’re a condo owner facing potential expenses. If there is loss in the building and the strata's insurance doesn't cover all costs, unit owners are responsible for the difference. You could even be responsible to pay the deductible on the strata's policy if, say, a flood occurs from your suite, even if it wasn’t your fault. Loss assessment coverage is available to pay these expenses for as little as $20 to $40 per month and is worth the peace of mind. Such insurance would also provide coverage for your personal belongings within your unit as well as any enhancements you make, such as floor covering updates, new or additional built-in closets, cabinetry or countertops.

New Measures our Builder is Taking

Water damage seems to be a big issue from washers, dishwashers and hot water tanks. In the future, the builder of Miaja London will be installing house hot water with boilers in the basement of condo complexes to help ameliorate some of the risks associated with water.

It’s important to remember the current situation with condo insurance is a moving target with many players actively involved who are highly motivated to stabilize the current crisis. Yes, there will be more costs associated with owning a condominium, but you can be confident of your purchase of a new condominium at Maija London.

If you have more questions about this, please feel free to contact me.

Chuck Meagher


Wait for a Price Correction, or Buy Now?
When you’re getting ready to buy property, you start to notice a bewildering variety of talking heads who all have opinions on where the market is going and whether it’s a good idea to buy now or to wait until later. This is called “timing the market”, and regardless of what some may tell you, it’s exceptionally difficult for anyone to do. We only need to look at the history of price corrections in Greater Victoria to demonstrate why.
In 1994, the people who said, “let’s wait on the sidelines for a price correction” were right for about a year and a half while single detached home prices drop 12 per cent until 1996. However, if they kept waiting because they were hoping for an even larger dip, they waited in vain for the next six years while home prices essentially flat lined. Then in 2002, prices exploded and rose an astonishing 105 per cent. 
If you were waiting to buy a condo, you would have been considered smart to wait from 1994 to 2002 as condo prices took a long drop down 23 per cent. But would you have known to jump into the real estate market to take the equity gain of 103 per cent over the next six years? 
The point is few saw it coming. There may have been some real estate experts who guessed it could happen, but I know of no one who would have staked their reputations on it. Anyone who wasn’t already in the market missed out on the massive surge in appreciation. 
In 2011, those who said “wait for a price drop” were correct while average prices dropped 10 per cent for single family homes and 13 per cent for condos. But if they kept waiting for a bigger drop after 2014, they were disappointed and left behind when prices again took off to rise 40 and 41 per cent respectively.
The problem with waiting on the sidelines for a price correction is, no one really knows what prices will do in the short term. There are too many economic variables in play. I encourage my clients to keep in mind what prices have done over the last 30 years (in 2018 dollars). Average condo prices have steadily risen from $180,000 in 1988 to north of $460,000 in 2018.
Will Maija London Condos gains equity in 2020? That’s anyone’s guess and I can’t make that prediction (even though there has been a resurgence in average prices during the last quarter). Can I confidently predict, based on the history of average price changes, that your condo’s equity value will rise over time? Absolutely.
Rather than concerned about timing the market, I always advise it’s better to buy when you are qualified, financially capable, and ready to take on ownership. Your finances are within your control. The housing market is not.
Graph courtesy of House Hunt Victoria
MLS® property information is provided under copyright© by the Vancouver Island Real Estate Board and Victoria Real Estate Board. The information is from sources deemed reliable, but should not be relied upon without independent verification.