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Condo & Strata Insurance;

Should you worry? Where are we headed? Is there a crisis coming?

by Vincent Baart on February 13, 2020 

It’s all over the news in 2020: Condo insurance across Western Canada is going through a big transition. Premiums are doubling, deductibles are growing exponentially, and in some cases, buildings are being flat-out denied insurance coverage. 

Yes, some of this is happening. No, it’s not the beginning of a crisis… and here’s why:

The insurance industry is going through changes across all sectors and trying to manage increases in claim numbers and damages payouts. This is not unique to condos… ICBC and private healthcare are all facing shifts. Managing risk, and figuring out how to effectively transfer risk is at the heart of the insurance business, and has been since the first insurance groups were created in the 1300’s for merchant ships. The industry will adapt and change, because, let’s face it, there is a lot of money to be made! 

Another reason I feel this is just a temporary blip is because Real Estate is the single largest issue on British Columbian’s minds. In our two biggest cities, condos make up 50% of the real estate market, are the easiest way to create more housing, and are the most affordable option for most buyers. Housing was the main political issue in BC in the last election and is the cornerstone of all government platforms, both provincially and municipally. Both levels of government are pushing hard to regulate real estate and make it affordable. If the insurance industry can’t work out a solution, the government will likely step in and intervene. 

And finally, if the insurance industry and the government both fail to stabilize this hiccup, I can see a future where the strata owners of BC would work together to create their own private insurance fund. 

Case in point; in 1936, with the automobile industry growing like crazy and a lot of people facing the newfound risk of underinsured vehicles, a San Antonio bureaucrat named Leo and his wife, Lillian (with their own money) formed a small insurance company to sell automobile insurance to their fellow government employees. This idea probably seemed crazy at the time, but it grew into the second largest insurance company in the United States. Along with having the coolest mascot in the biz, they provide insurance to millions of Americans. You may have heard of it? GEICO was formed on the same concept. 

Yes, 2020 will be an interesting year for strata communities and a busy one for the insurance industry, but just like water soaking through the ceiling of your condo, money always finds a way

-Vince

External Articles which are helping to fan the flames of panic 😉

FAREWELL TO JANUARY!

Last month the BC Real Estate Association announced in the Times Colonist “Home prices and number of sales are predicted to rise this year and in 2021 in Greater Victoria and on the rest of Vancouver Island…” Looking at the sales figures for January 2020, it appears the rise has begun.

The total number of properties sold last month in Greater Victoria increased to 411. In January 2019 there were only 329. There was also a small increase to the number of new listings; 901 in January 2020 compared to 897 in January 2019. 

“Our new year is already showing a strong distinction from the year previous,” says Victoria Real Estate Board President Sandi-Jo Ayers. “We’ve returned to more traditional January sales numbers – which tend to be over 400 sales. Unfortunately, we have not seen a corresponding increase in listings alongside the demand, so buyers in the low- to mid-price segment of our market may find themselves in competition for desirable properties…”

If you’ve been thinking of selling, we offer complementary Market Evaluations. CLICK HERE to email us and we’d be happy to talk with you about how we can help you market and sell your home.

JANUARY 2020

Sales of condominiums were up 6.3 per cent from January 2019 with 118 units sold. Sales of single-family homes increased 31.6 per cent from January 2019 with 200 sold.

The Home Price Index (HPI) benchmark value for a single-family home in the Victoria Core in January 2019 was $846,900. The benchmark value for the same home in January 2020 increased by 1.4 per cent to $858,500, 0.4 per cent more than December’s value of $855,000.

The HPI benchmark value for a condominium in the Victoria Core area in January 2019 was $500,500, while the benchmark value for the same condominium in January 2020 increased by 4.1 per cent to $521,100, slightly more than the December value of $520,700.

INTEREST RATES:  A five-year fixed term mortgage can be had for around 2.69% if you qualify, depending on your down payment, term, credit history, institution etc.  Rates are still inching down little by little. That’s a very good rate, historically speaking.  If you’re thinking of moving, take the time to get preapproved to make sure everything goes more smoothly. 

Need a Mortgage Broker? Click HERE to send us an email and we’ll forward on a list of reputable Mortgage Specialists.

Of course, if you have any questions about the market or what your home or investment property could sell for, we are here to help you!

Holly Sansom
Real Estate Professional
Victoria Property Specialists Group
c. 250-857-3477

Garden Suites in Victoria

Garden Suites in Saanich. 

If you’ve spent any time lately on instagram, or reading architectural design magazines or blogs, tiny homes, garden suites, and other alternative forms of housing are EVERYWHERE. 

In case you missed it, the municipality of Saanich is considering joining the city of Victoria in working to allow the construction of garden suites in our most populous municipality. 

Sample plan view from Saanich’s website.

Here are the the most important things to know:

  1.  A house cannot have a secondary suite AND a garden suite
  2. There are restrictions on the size of the suite, based on the size of the lot. 
  3. Just because your lot meets the size and zoning requirements will not guarantee approval; neighbour’s privacy, shadows cast by the building, etc will all be considered. 
  4. A garden suite MUST have its own parking space. 
  5. The city is looking for green design factors.. Energy consumption, rainwater runoff management, etc. 
Parking is an import consideration in your development application.

Check out the proposal here:

https://www.saanich.ca/assets/Community/Documents/Planning/Garden%20Suites%20Boards%20and%20Site%20Plans%20May%202019.pdf

Check out the original Study Here:

https://www.saanich.ca/EN/main/community/community-planning/policy-initiatives/garden-suite-study.html

Keep in mind, this is not approved yet. Make sure to talk to your local planning department to confirm a project is feasible BEFORE spending too much time designing your perfect little backyard dream project. 

And, if you ever have questions about real estate anywhere in Victoria…. We are here to help!

This is what a garden suite could look like. Keep in mind height and size restrictions when submitting your application.

Vincent Baart

Real Estate Professional

Victoria Property Specialists Group

RE/MAX Camosun

250-532-5364

Greater Victoria Market Update – December 2019

HAPPY NEW YEAR!

With the holiday season behind us and a new year ahead of us, things are gearing up for the 2020 market. The BC Assessments are in the mail for nearly 2 million homeowners in British Columbia. Tina Ireland, an assessor with BC Assessment states, “I would suggest that the significant increases that we have generally seen in the past are just that – they are a thing of the past. We have really seen moderate changes this year, and even some decline in value. So I’d suggest that we are returning to a more stable and balanced market.”

Where prices are rising is in the condominium market. With the Speculation Tax and now, the recent news of strata corporations across BC seeing large increases in their insurance rates and deductibles, 2020 may be the year to consider selling if you own a condo.

If you’ve been thinking of selling, we offer complementary Market Evaluations. See how your BC Assessed value compares to the Market Value!

DECEMBER 2019 & 2019 IN REVIEW

A total of 402 properties sold in the Victoria Real Estate Board region this December, 7.2 per cent more than the 375 properties sold in December 2018 and a 30.3 per cent decrease from November 2019. Sales of condominiums were up 17.5 per cent from December 2018 with 121 units sold. Sales of single family homes increased 13.8 per cent from December 2018 with 198 sold.

A grand total of 7,255 properties sold over the course of 2019, 1.47 percent more than the 7,150 that sold in 2018. 2019 sales came in at slightly under the ten-year average of 7,413 properties sold.

The Multiple Listing Service® Home Price Index benchmark value for a single family home in the Victoria Core in December 2018 was $860,400. The benchmark value for the same home in December 2019 decreased by 0.6 per cent to $855,000, slightly less than November’s value of $855,400. The MLS® HPI benchmark value for a condominium in the Victoria Core area in December.

INTEREST RATES:  A five-year fixed term mortgage can be had for around 2.74% if you qualify, depending on your down payment, term, credit history, institution etc.  Rates have been coming down little by little.  That’s a very good rate, historically speaking.  If you’re thinking of moving, take the time to get preapproved to make sure everything goes more smoothly.  Don’t know a Mortgage Broker? Click HERE to send us an email and we’ll forward on a list of reputable Mortgage Specialists.

WHAT DOES THE MARKET LOOK LIKE FOR 2020 IN BC? The Western Investor published their B.C. residential real estate outlook 2020 on December 17th. the B.C. Real Estate Association (BCREA) predicts that MLS residential sales across the province will increase 10.9 per cent to 85,500 units in 2020, which would take the annual total to just below the 10-year annual average of 85,800 units. Greater Vancouver residential transactions are predicted to increase by 18.2 per cent in 2020, compared with 2019, and Fraser Valley sales are forecast to go up 12.4 per cent next year. In comparison, Victoria’s resale transactions are expected to rise a more modest four per cent in 2020.

Of course, if you have any questions about the market or what your home or investment property could sell for, we are here to help you!

Holly Sansom

Real Estate Professional

Victoria Property Specialists Group

RE/MAX Camosun

250-857-3477

Best Places to Live: Canada Liveability Report

Canadians love where they live; RE/MAX Report explores some of the best places to live in Canada

  • 89 per cent of Canadians would recommend their neighbourhoods to others
  • Major Canadian cities are a beacon for liveability

Canadians genuinely celebrate the liveability factors — the qualities that give each homeowner the true satisfaction of his/her home within the context of a neighbourhood — when it comes to choosing a property to buy and live in. In fact, 89 per cent of Canadians would recommend their neighbourhood to others according to a recent RE/MAX survey conducted by Leger.

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Beyond Legislation:

The shortage of affordable housing in BC was a top political pain point in the last election, and citizens voted based on the party they felt had the best plan to tackle affordable housing. 

Since the 2017 change of government, a lot of red-tape has been added to the process of buying and owning real estate in our Province. There has been a combined effort on the Provincial and Municipal levels to curb the use of short term rentals, vacant homes, out-of-province satellite families, and investors, but is it really working? In addition to the increase in taxes and costs on landowners, the Residential Tenancy Branch has added additional protections for tenants, making BC the province with the strictest protections for tenants and the harshest penalties for landlords who stray from the law. 

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Greater Victoria Market Update – October 2019

Hello everyone!

There’s a chill in the air and more leaves on the ground telling us Autumn is here!  It’s time again for our Monthly Market Update, a service we provide as a courtesy to our loyal clients and contacts.

PRICING & ACTIVITY:  For September the core area (which takes in Victoria, Esquimalt, View Royal, Oak Bay and Saanich) is showing a price decrease of about 4.3% year over year.  The benchmark price of a single-family home in the core is $846,500, just a bit less than last month’s $847,300 and 3.6% less than last year’s $878,500.

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Team Market Update: August 2019

Inventory continues to increase, and again sales volume is slightly improved year over year, interest rates decrease. 

– August 2019 Quick Summary

Hi everybody,  

Hope everyone is doing well and enjoying summer.  It’s time again for our Monthly Market Update, a service which we provide as a courtesy to our loyal clients and contacts.

Pricing and Activity:  For July the core area (which takes in Victoria, Esquimalt, View Royal, Oak Bay and Saanich) is showing a price decrease of about 3.4% year over year.  The benchmark price of a single family home in the core is$858,800, just a bit less than last month’s $859,600 but less than last year’s $889,200.  Overall in our entire market area (which also takes in the islands, Western communities and over the Malahat)it’s almost even year over year, standing at $756,000.  Last year it was $761,300 and last month was  $754,200.Activity and pricing vary by area and also by type of property.  There are more sales of single family homes than any other class so it best represents the activity. 

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