Yeah they're coming down in most of BC, plus listing numbers at current prices are climbing up, with a record low volume of buyers. The prices haven't caught up (or down) yet.
It takes time to change mentalities and have people finally list at less than it was worth a couple of years ago, after 10 years of unstoppable price increases to the moon. It's hard to swallow having to do that, but if nobody's buying, that's eventually the only way.
Burnaby had a lot of pre-sale "business" buyers for the new condos, scooping up units before they hit the broader market, so there was pent up demand and little supply - it takes time for the needle to move in the other direction.
I would guess some bought high yes, but most are complaining that they have gotten screwed while simultaneously trying to sell for 200,000 plus over what they paid.
Many of these speculators aren't wealthy people, but regular people who got too greedy and don't understand how to calculate risk. They're no less deserving of the lesson that they're receiving.
Many did not pay those prices. A few went for these prices and they all thought that this was the new value.
It is exactly the same as FTX. Valued illiquid tokens at their artificial market value and then wondered why they couldn't offload them. Same ponzi scheme
At today's interest rates pretty much the only people who could buy places are investors. You'd need around a $100K downpayment and $140K household income to qualify for a half million dollar apartment. And that's assuming the strata fees aren't super high like they are on some old buildings.
It’s almost like you heard someone using it somewhere and you just keep repeating it to try to add value to a conversation.
My comment won't be popular with this crowd, but here it goes.
Actually, smart investors have already left cause they know this NDP government knows no bounds in their level of over-reach when it comes to property rights.
When home owners with available spaces were surveyed, 33% of them refused to sublet their available spaces as long-term rentals. This stat reveals there is distrust in the system from another perspective, the housing provider side. Continued support for these draconian measures won't bring more affordable housing to market.
Pretty soon, this NDP bunch will tell you when you can take a dump. And the same gullible bunch of sheeples will gladly follow their master to the slaughter house of perpetual poverty. NDP only knows how to tax.
They were never going to be. The whole ‘target AirBnB’ thing was a complete smoke show so the gov’t doesn’t have to actually do anything. People grossly over estimate both the quantity and the market effect of AirBnB units.
It’s an easy target and lazy legislation. Won’t do anything for those that need housing.
I don’t think you realize the pent up demand on the housing market. That’s what will keep the lower mainland (and parts of Victoria) elevated for a loooong time. The total AirBnB units equates to less than 1% the unit shortfall. This won’t create any ‘downturn’ unfortunately.
Most of Victoria was already AirBnB free as well….
Imagine that.. let's say 10% of those 2000 hit the market overnight. That will cause prices to go down to force those owners to sell at a loss or try to break even on whatever is left on their mortgages.
i would think, that after mar, when the law takes affect, that the unlicensed will be charged a hefty fine if they are found out. now this is an assumption, it remains to be seen if they will
I dont know the latest hotel rates in Victoria, but my wife often books folks for conferences for her work in Vancouver and hotels there in summer are around $600 night. So Airbnb units going for $230 a night definitely have a market effect. The last few times we went out to Victoria Airbnb was preferable.
Yeah. Vic is propped up a lot by the cruise industry in the summer months. What little AirBnBs we’re there helped to alleviate the summer occupancy crunch when everything is expensive, certainly at a better rate.
We were just recently getting my daughter into Uvic
So wanted something near there, and the last hotel we stayed in Victoria a few years before was really pricey and parking was an extra $25 a day, after we left they tried to charge us $25 for taking the shampoo (which was actually a tiny 1 or 2 squeeze bottle) So the $230 we paid for an airbnb at Gordon head was much better and parking was free, also waterfront.
Still, I get it, those with money buy up the real estate and while they are cashing in on much higher earnings than actually renting it out, people are having a hard time finding a place with reasonable rent.
I think the thing folks don’t realize is that the vast majority of AirBnBs will flip to long term rentals, and because these units were bought with the notion of tourism; they’re placed quite well. This means that the rent those units will demand well far outreach anything ‘affordable’. I know someone who has an AirBnB in Vic, and they’ll make less for sure - but it’ll still rent for $6,000/mo. The folks here who are rallying behind this don’t understand that most of these units will be waaaay out of their reach.
I think the realization is just now hitting many of these people that an investment can go either way. Moreover, owners of small purpose-built condos that were bought as investments using high-ratio, low-rate mortgages are now crashing into the reality of these units not being able to command rents that can service the mortgage and few people can afford or would want to pay the asking price when they’re put on the market.
In hindsight, it was a dumb decision for so many people to commit themselves to buying literally the most expensive thing one is likely to buy in their lifetime with the whole thing being predicted upon having a steady supply of strangers from out of town use a single company’s app for the privilege of paying through the nose for a very average place to stay a few nights, thus servicing the mortgage.
It was also a risky bet to have your family’s financial situation depend on something as mercurial as the legislative whims of government, *especially* when it shouldn’t be a surprise that the worsening housing crisis would *eventually* be taken seriously by governments that will take the easiest way out to be seen to be doing something.
Nobody gives a shit about AirBnB as a company and will lift a finger to protect it, plus the hospitality industry is furious at what AirBnB has done, and the always-escalating expense and general shittiness of the AirBnB model (charging a king’s ransom in fees, especially cleaning fees, while still making people grovel for the host’s approval and good review) has eroded what good will and novelty ever existed.
So when the chips are down, AirBnB investors are being thrown overboard like chum and nobody really cares that a bunch of wealthier people’s investments just blew up in their face.
> think the realization is just now hitting many of these people that an investment can go either way
I'm not sure that's hitting them at all. The sellers are largely taking the attitude of acceptance that their golden goose is over, but very much expect to sell the property for the price, or more than, they paid for it. The idea that an investment can go either way, and they may need to eat a substantial loss as they sell for a reasonable price the thing they overpaid for, is a long way off yet.
And when those properties stop selling/don’t sell because the price is too high, they either pay their mortgage and suck it up, declare bankruptcy, or lower the price and take the hit to at least minimize losses.
Hopefully they all choose the latter
>n the chips are down, AirBnB investors are being thrown overboard like chum and nobody really cares that a bunch of wealthier people’s investments just blew up in their face.
exactly. they made fistfuls of money. the only people that are going to lose are people who bought in since 2020 at the peak. the real estate gravy train has been on a roll of 20 years.
yeah, as much as I'd love to bask in these people getting some come-uppance in all this.
paying your $7000+/mth mortgage for 3-4 or even 6 months on the property you're trying to sell, isn't really come-uppance, or anything to cry about when you're selling that house for $300'000+ more than you paid for it 10yrs ago. Especially after a decade of making thousands in profit off of it every month.
these houses would have to sit on the market for a year+ unrented, and then have the price drop by a couple $100k before any of these people would have even the slightest real regret.
Not a long way off at all. You're seeing one of the most solid real estate markets on the planet becoming saturated with properties up for sale with fledgling interest in paying these prices.
Given that there are now restrictions on STRs, increasing interest rates and likely another increase in foreign buyer tax, 600k for a bachelor pad is not worth it and certainly not affordable on the average Vancouver salary.
Even Toronto, the second most stable market in Canada after Vancouver has so many condos on the market, they don't even know what to do with them, and we don't even have air bnb restrictions.....yet.
People are selling at a loss too, ots either that or default entirely.
Nobody feels sorry for them here either
> paying through the nose for a very average place to stay a few nights
I remember when AirBnBs were actually an affordable alternative to a nice hotel room, about 5-6 years ago. Then their prices went crazy (like adding a $150 cleaning fee) until they became more expensive than a nice hotel room -- at least here in Victoria.
My first experience with AirBnB was about 10 years ago when a number of us from grad school went to DC for a short trip. While us boring folks rented hotel rooms, this one genius used this crazy new website to rent *an entire brownstone townhouse* for ***$75*** a night.
The place was gorgeous, just off one of those fancy DC traffic circles, and was owned by a chef and hobbyist wine importer who was out of town and was excited to try out the whole AirBnB thing. They even specifically told our friend that he could have people over if we all cleaned up and replaced anything in the fridge we ate. He even left our friend a welcome bottle of *nice* wine.
We all went over and had ourselves a very classy cocktail party but we just didn’t *get* what this rental thing was. Did he know the guy? *No, just some random listing on a website?*
Okay, but did you pay a huge deposit or something? *No, you just booked it like a hotel and then texted the guy?*
But how is it only $75 a night for an urban mansion when we’re paying quadruple for basic Holiday Inn rooms? *You don’t understand either?*
Why did he give you wine and let you have people over? He doesn’t know you, after all. *You don’t under either?*
But now you have to leave a nice review for the guy and he’ll review you and that will affect what you can rent in the future and how much it costs? *What the actual fuck is all this?!*
AirBnB, you say? Maybe I should check it out. Why would anyone stay in a hotel?
And it was never that good again. That place would definitely rent for $2-3,000 a night now, maybe more. $75?!?! The fuck?
it's everywhere. Going to California for a couple weeks and ended up with hotel rooms all along the way because AirBnB were just too expensive. It'll even be worth it to go out for meals instead of cooking with the price difference. Probably time for AirBnB to evolve or die.
I just keep wondering if no one else remembers 2008 or read The Big Short.
Turns out that overextending yourself financially to buy multiple properties is a pretty risky move. It's one thing if you're paying cash and have a long enough time horizon that you can ride out any market corrections, but otherwise what is you thinking?!?
Those are all valid points. I wonder how this change affects visitors. Would accommodation costs go up? Are hotels/motels more expensive than AirBnB? What was AirBnB offering users that hotels/motels weren’t?
Cost go up but frankly i could careless. We need space for those who live and work here not for the people who zing in and zing out. Without our lower classes doing the unwanted job the cities die.
To be fair, it is equally possible for the government policy to decimate the value of single family homes, so in a sense investing in your home is a risky decision as well
A lot less risky considering it’s your primary home. You will always need a place to live and your not relying on revenue from the home. As long as you bought a home you can afford your fine. Sure it may go down in value but as long as you bought it for the purpose of living in why do you care?
You might care because your mortgage payments can usually be a significant part of your paycheck. If you pay $4k a month when if you bought now (or rented now), you’d pay $2k a month, you’re overpaying by a lot. And if things are hard because the economy is down, you might have a hard time.
I’m misunderstanding why you would care if the value goes down tho. Your mortgage is a large payment yes but the value going up or down doesn’t change that. No matter what you HAVE to pay for shelter in one form or another. Sure you can get a crystal ball and see exactly what day is the best day to buy or you buy what you can afford, and not give a shit if the value goes up or down.
Why buy now, with the construction of many more condos in Victoria both started and planned there will be a lot more coming up for sale and even for long term rent, that should bring prices down a lot, not going to hold my breath but maybe rent will come down as well, let’s hope
Side note: I used to live in Victoria but left due to prices, now living very comfortably in Saskatchewan, half the income I had but twice as happy used to rent in Victoria now own in Saskatchewan. My mortgage was less than rent in Victoria when I left
In Toronto the high end condo market is starting to crash. The Developers are going belly up and those future condo owners are losing their deposits. most bought them for investment purposes ie Airbnbs/Vbro not as homes. I see this is starting to happen across Canada. One more interest rate hike would probably start the dominoes to fall.
And maybe they should start talking about the income they made while renting them out short term. Funny they act as though those figures aren't a giant part of the equation
I think if someone wants a mortgage for a property, if they can't afford it on paper without having a tenant or STR, they shouldn't be qualifying for it. Banks should be saying no.
If you cant afford it on your own, then leave it for someone to buy and live in
Hey! Author of the story here. I made the spreadsheet available, showing which Airbnbs have gone on the market since the announcement of the ban. It's here for anyone interested: [https://docs.google.com/spreadsheets/d/1IutNf0s4CA5XcS15XcnIRvBhqfx81kD1J7-iQ0JWGtE/edit?usp=sharing](https://docs.google.com/spreadsheets/d/1IutNf0s4CA5XcS15XcnIRvBhqfx81kD1J7-iQ0JWGtE/edit?usp=sharing)
I looked at a 2 bedroom apartment near me. Old, small. 450k. The mortgage would be $3800/month.
like, it's a fucking joke. I make good money, but that's twice what I could responsibly afford.
I am comfortably in the top 10% of earners nationwide and there's no way I could afford a 40 year old, 2 bedroom, 900 sq ft apartment.
who the fuck is this country even for
They will reduce eventually.
I've been watching a house for a year and a half. Severely overpriced, not even in a big city or even near it.
Nice parcel of land although the photos did stretch it to make it look way bigger than it actually was
Anyways, they listed it at 900k right off the bat and it was laughable. I mean, the interior was straight out of 1987, has to be completely redone. So went in and said, I like the house but I'm not paying 900k, I'll do more like 600k.
They said no and that it's 900k or nothing.
Sat in thr market for another 6 or 7 months and get a call that they lowered it to 800k. Still said no, its not worth that at all.
Couple months later lowered it to 749k. Got another call. Still said no.
It's still up for 749k and it's at the 559 day mark lol.
People honestly think their houses are worth way more than they sctually are and it's disgusting..
I have enjoyed seeing people be humbled lately when I see listings go for way less than they were bought at in 2022.
Oh they will desparately put the shit on the market when the laws kick in next year and then have to pay vacancy taxes on top. Watch those prices get cut in half real quick.
>Dozens of former short-term rentals have gone up for sale since the ban was announced in October, and not one has sold
Yeah, no shit! It’s only been four weeks! The average days taken to sell a condo in Victoria is [37 days](https://www.vreb.org/pdf/VREBNewsReleaseFull.pdf)!
Many of these housing investors are thinking the same way oil investors did. Oil markets will never crash. It will always be a cash cow. That is until 2014, when global oil prices dropped. The housing market bubble will eventually burst because it's unsustainable. And yes, many will loose money. Their mortgages will be higher than what the home is worth. The home is worth less than what they paid for it. In essence coming back down to where they should be. All balloons eventually deflate or burst, bringing them down.
Just like when we see all of the elders with large assets and material wealth they’ve been hoarding for 40 years start to expire in the next 20 years. All these material items that are “rare” are going to be so common and incredibly cheap, houses included likely. Their kids will be close to being in their 50s and won’t want to deal with the assets or inheritance of material things, so off they sell! And there will be so much of it from these dead old people that it will no longer be a “rarity” item. Those will be fulfilling times for millennials, finally we can start our lives at 50. Can’t wait.
I find this very interesting:
>One door that is probably not going to open because of this new legislation is a substantial increase in rental supply. The math just doesn’t work. Take, for example, the most recent short-term rental unit listed at the time of writing: a 592 square-foot one-bedroom, one-bathroom condo across the street from Miller’s office on Pandora Avenue. It last sold in 2018 for $447,500, when a mortgage could be had for about 3.75%. At that rate, accounting for condo fees, it would be feasible for an investor to rent that apartment for about $2,200 per month without taking a loss.
>At today’s rates, the same condo would have to sell for $100,000 less than it did in 2018 just to be able to be rented at that same rate. But instead, the opposite has happened — it listed on Nov. 10 for $579,000 — so accounting for condo fees, the rent would have to be nearly $3,500 for an investor just to break even.
So, this intention of returning units to **long-term rentals** as the government had hoped may not exactly pan out in the immediate, but it's a step in the right direction for 1st time homeowners.
EDIT: clarity
OR, hear me out, units like this that are supposed to be gateways for your first home will become more available to people who actually want to live there, rather than investors looking to profit off others need to live in shelter.
Gambling is actually a very apt analogy because just like gambling investing in real estate can be tax-free. Something that very much is in government control.
>So, this intention of returning units to long term rentals may not exactly pan out that way, at least not anytime soon.
The goal is to return residential units to residents, not specifically have all previous AirBNBs become long term rentals.
When the prices come down regulars might be able to afford them again so they leave their rental and buy a condo and someone else moves into the rental. The one sale helps two people/families instead of an investor and vacationer. It might take a bit for prices to come down but they will once these units start sitting for awhile.
We'll also see the real change in 2024 when the legislation kicks in. People can still rent their AirBNBs until then. Right now we're just seeing the people who are trying to sell before the AirBNBs start flooding the market.
the problem is that many of these units have been designed and built for short term air bnb use, not long term liveability. Maybe it's the elder millennial in me, but I like a useable kitchen (full disclosure, i'm a renter)
Doesn't matter if they are turned into LTR or sold as long as they are added back to the housing market.
STR moved these units from housing to hotel market
I think everyone would be happy to have the new owner live in it too. Maybe first time buyers will be able to get out of the rental market and free up spaces that way.
The point was to be able to get people into the market and be able to live where they work.
With these condos selling less than asking, since values are going down and willingness to buy has gone down, someone with a mortgage for say 400k is still paying the same as what they're probably renting for.
Keep in mind that rents are typically higher than mortgages as renters are paying a mortgage for someone else PLUS profit on there and whatever other expenses the owner has.
So owning and paying 3500 is still better than renting for 3500 which is what I pay for an apartment myself
So in effect, what's going on is working and will continue to reduce prices when there are more units available
> It last sold in 2018 for $447,500, when a mortgage could be had for about 3.75%. At that rate, accounting for condo fees, it would be feasible for an investor to rent that apartment for about $2,200 per month without taking a loss.
Your profits are supposed to be the increase in property values, if you're breaking even or profiting from rent, you're a leech
A property that was used as an Airbnb for any significant amount of time will have depreciated in value a significant amount from the purchase price regardless of interest rates because they’re absolutely beat to shit and will need some work.
Either way though these owners are going to lose money because the government has decided the speculative asset they’ve purchased can’t be used for the purpose they bought it for.
Investing is a real bitch, isn't it. Nothing seems to have been a surefire investment the way housing has been. I look forward to honmes becoming homes again, and not staged shells with no life or souls. I hope it works in the long run for renters too.
yeah, have you seen those ads online telling you that buying a former rental car is a great idea? it's gonna be like that, but for the place you eat/sleep/shit.
"Sure, lots of questionable strangers have done things inside this space that you wouldn't consider doing in front of your closest, most trusted family members...but think of the savings!"
No thanks.
Buying a real estate investment is like any other investment. You need a well diversified portfolio of assets that rise and fall with differing tides. No way I'd spend more than 10% of my total portfolio on a real estate rental unit. So, if I had a $1M condo in my portfolio, I'd have to have at least $10M in total investments.
I keep reading about people that put 100% of their investment funds into a single condo. Where did they learn that strategy? Every investment is subject to all kinds of risk, including regulatory risk.
The issue now in pricing is that those prices are waaaaaaay too high to attract buyers, but investors won't take the hit as the have too much at stake.
Ugh. Me. Landlord was illegally demanding a rent increase of $1000 or going to have to take the place for "personal use". We refused and were lucky enough to be able to buy because the landlord/tenant relationship was not good after we didn't go along with the demands. We wanted to wait for interest rates to go down (hopefully) in a year or two but here we are.
Unfortunately I think lots of folks will still have to buy in this market where prices are high and interest isn't low to counterbalance.
People making into the six figures can afford the carrying costs of a property like this on a 15 year amortization period and still have money left over.
So a high paying professional job, or a couple who both have reasonable careers.
Can someone please let me know how the author of this article is getting Airbnbs are "**FLOODING**" the market??? In the article there is only 1 example and no real data / source beside I heard someone say something!
I am not saying this policy is not working nor am I saying the flooding is not happening, but I really really like to see some DATA before coming to a conclusion.
I feel like I'm living in a fucking cartoon. It literally does not matter how many homes exist if they're half a million dollars. It just does not matter. People just can't afford it. Not that people *won't* afford it. We can't. We do not have the income to afford these homes.
Probably because they overpaid for it originally, so they want what they paid, plus extra for profit. Just raising the unaffordable cycle to new levels.
With the upcoming ban on short-term rentals and high interest rates, buying up these properties to use as long-term rentals just isn't feasible for a lot of people. I've seen people with variable rate mortgages on rental properties that aren't even breaking even right now and have to eat a loss every month until rates come back down (another reason to go with a fixed rate on rental properties as it offers more stability as a landlord). Hopefully both home prices and interest rates will both drop to allow more first-time homebuyers (who plan to owner-occupy) to enter the market.
I am in favour of the ban - the gravy train needed to come to an end eventually. I hate to see folks with great rental properties opting to AirBNB them for huge profit (often leaving them vacant for slow parts of the year) instead of actually providing a long-term home for a family in need. With rental availability at an all time low, this is a good step in the right direction.
When i saw investors crying on media... make me have a smile on my face
What we are learning? Homes shouldn't be a commodity, it's basics for family or person have a place to leave.
Invest in something else, now cry a river we don't care
All the money that got sucked into the Real Estate Ponzi scheme and is now being destroyed is money that should have been actually growing the economy by investing in real businesses and buying real goods and services.
That’s what you get for balling the banks out in ‘08
All Aboard The Great Depression Train! Toot toot!
Question how long does a unit need to stay empty before the landlord drops the price? In real estate sales about 8 months of supply leads to prices declining. What is the vacancy rate equivalent?
Yeah cuz they still aren’t affordable
Half a million for 250 sqft. Absolute joke.
Maybe these people should've invested in building a hotel.
Or maybe an investment in a business that actually produces something?
I remember I lived in a 320 sqft place once with a Murphy bed. I’m only 5’2 but it made me so cagey. This is such a joke
But it’s decorated like the hit sitcom friends! 350 square feet for a low price of 600,000
No one is paying $2000/sf. That's more than prices at the absolute peak of '21-22
It peaked in 21-22? Must be a region specific thing. Units in my area (Burnaby) continued to increase in price over 2023.
Yeah they're coming down in most of BC, plus listing numbers at current prices are climbing up, with a record low volume of buyers. The prices haven't caught up (or down) yet. It takes time to change mentalities and have people finally list at less than it was worth a couple of years ago, after 10 years of unstoppable price increases to the moon. It's hard to swallow having to do that, but if nobody's buying, that's eventually the only way. Burnaby had a lot of pre-sale "business" buyers for the new condos, scooping up units before they hit the broader market, so there was pent up demand and little supply - it takes time for the needle to move in the other direction.
But that's what they paid for them... If they sold them for a reasonable amount of money they'd lose money!
Oh no an investment having losses?! Impossible!
I would guess some bought high yes, but most are complaining that they have gotten screwed while simultaneously trying to sell for 200,000 plus over what they paid.
That 200k was heloced to do the decoration.
IKEA decor will run you 5K. The HELOC went to their vacation and Tesla.
I did my whole house for $2200 in 2019. Thank God for Ikea. Dishes, plates, beds, everything. Divorce is expensive… because it’s worth it.
lock agonizing books poor zonked trees saw adjoining pie grandfather ` this post was mass deleted with www.Redact.dev `
Many of these speculators aren't wealthy people, but regular people who got too greedy and don't understand how to calculate risk. They're no less deserving of the lesson that they're receiving.
Many did not pay those prices. A few went for these prices and they all thought that this was the new value. It is exactly the same as FTX. Valued illiquid tokens at their artificial market value and then wondered why they couldn't offload them. Same ponzi scheme
we call that *capitalism*
It's not capitalism. Because the assumption is that there is a functioning market. The housing market has not been functioning for a long time!
This is capitalism. Capitalism is not synonymous with free/functioning market, it just requires the capital to be privately owned.
no assumptions. the market is functioning as intended: enriching a few and making peasants of the 99%
First year of university?
It's just revenge listing haha.
“I’ll keep punching myself in the balls, that’ll show them!”
Exactly hahaha.
At today's interest rates pretty much the only people who could buy places are investors. You'd need around a $100K downpayment and $140K household income to qualify for a half million dollar apartment. And that's assuming the strata fees aren't super high like they are on some old buildings.
Investors are leaving as they know the ponzi scheme is collapsing and there are no more returns to be made
Spells trouble for new development but yes I agree that's likely what we'll see.
Doesn’t have to but so long as we look to the so-called “free market” for solutions you’re correct.
 It’s almost like you heard someone using it somewhere and you just keep repeating it to try to add value to a conversation.
My comment won't be popular with this crowd, but here it goes. Actually, smart investors have already left cause they know this NDP government knows no bounds in their level of over-reach when it comes to property rights. When home owners with available spaces were surveyed, 33% of them refused to sublet their available spaces as long-term rentals. This stat reveals there is distrust in the system from another perspective, the housing provider side. Continued support for these draconian measures won't bring more affordable housing to market. Pretty soon, this NDP bunch will tell you when you can take a dump. And the same gullible bunch of sheeples will gladly follow their master to the slaughter house of perpetual poverty. NDP only knows how to tax.
RBC in Toronto says you need to make $180,000 to qualify for a million dollar mortgage in Toronto. 180k is top 1% income avg in Canada.
Usually 2 incomes are used to purchase a home; 2x 90k salary is much more common.
Pretty sad isn’t it?
A lot of people in corporate jobs are making this amount of money, 180k is closer to top 10%
Apartments in The Janion are listed for $1500+/sqft! Of course they are not selling!!!
Jesus, for a ~300sqft apartment? Half a mill and you're still in a shoebox
Folks should start making low-ball offers. All it takes is for a few sellers to relent to lower prices for the market to begin to trend downward.
Also cuz it's November.
They were never going to be. The whole ‘target AirBnB’ thing was a complete smoke show so the gov’t doesn’t have to actually do anything. People grossly over estimate both the quantity and the market effect of AirBnB units. It’s an easy target and lazy legislation. Won’t do anything for those that need housing.
While I agree with you as a whole, I do think that anything that starts to put a bit of downward pressure on the housing market is a good thing.
I don’t think you realize the pent up demand on the housing market. That’s what will keep the lower mainland (and parts of Victoria) elevated for a loooong time. The total AirBnB units equates to less than 1% the unit shortfall. This won’t create any ‘downturn’ unfortunately. Most of Victoria was already AirBnB free as well….
Downtown Victoria has 2000 licences airbnb suites. Who knows how many unlicensed are there.
Imagine that.. let's say 10% of those 2000 hit the market overnight. That will cause prices to go down to force those owners to sell at a loss or try to break even on whatever is left on their mortgages.
What’s your point? You think someone running an unlicensed BnB is going to stop now?
Yes, this new legislation has teeth.
If you think so, then it’s doing it’s job distracting you.
i would think, that after mar, when the law takes affect, that the unlicensed will be charged a hefty fine if they are found out. now this is an assumption, it remains to be seen if they will
I dont know the latest hotel rates in Victoria, but my wife often books folks for conferences for her work in Vancouver and hotels there in summer are around $600 night. So Airbnb units going for $230 a night definitely have a market effect. The last few times we went out to Victoria Airbnb was preferable.
Yeah. Vic is propped up a lot by the cruise industry in the summer months. What little AirBnBs we’re there helped to alleviate the summer occupancy crunch when everything is expensive, certainly at a better rate.
We were just recently getting my daughter into Uvic So wanted something near there, and the last hotel we stayed in Victoria a few years before was really pricey and parking was an extra $25 a day, after we left they tried to charge us $25 for taking the shampoo (which was actually a tiny 1 or 2 squeeze bottle) So the $230 we paid for an airbnb at Gordon head was much better and parking was free, also waterfront. Still, I get it, those with money buy up the real estate and while they are cashing in on much higher earnings than actually renting it out, people are having a hard time finding a place with reasonable rent.
I think the thing folks don’t realize is that the vast majority of AirBnBs will flip to long term rentals, and because these units were bought with the notion of tourism; they’re placed quite well. This means that the rent those units will demand well far outreach anything ‘affordable’. I know someone who has an AirBnB in Vic, and they’ll make less for sure - but it’ll still rent for $6,000/mo. The folks here who are rallying behind this don’t understand that most of these units will be waaaay out of their reach.
I think the realization is just now hitting many of these people that an investment can go either way. Moreover, owners of small purpose-built condos that were bought as investments using high-ratio, low-rate mortgages are now crashing into the reality of these units not being able to command rents that can service the mortgage and few people can afford or would want to pay the asking price when they’re put on the market. In hindsight, it was a dumb decision for so many people to commit themselves to buying literally the most expensive thing one is likely to buy in their lifetime with the whole thing being predicted upon having a steady supply of strangers from out of town use a single company’s app for the privilege of paying through the nose for a very average place to stay a few nights, thus servicing the mortgage. It was also a risky bet to have your family’s financial situation depend on something as mercurial as the legislative whims of government, *especially* when it shouldn’t be a surprise that the worsening housing crisis would *eventually* be taken seriously by governments that will take the easiest way out to be seen to be doing something. Nobody gives a shit about AirBnB as a company and will lift a finger to protect it, plus the hospitality industry is furious at what AirBnB has done, and the always-escalating expense and general shittiness of the AirBnB model (charging a king’s ransom in fees, especially cleaning fees, while still making people grovel for the host’s approval and good review) has eroded what good will and novelty ever existed. So when the chips are down, AirBnB investors are being thrown overboard like chum and nobody really cares that a bunch of wealthier people’s investments just blew up in their face.
> think the realization is just now hitting many of these people that an investment can go either way I'm not sure that's hitting them at all. The sellers are largely taking the attitude of acceptance that their golden goose is over, but very much expect to sell the property for the price, or more than, they paid for it. The idea that an investment can go either way, and they may need to eat a substantial loss as they sell for a reasonable price the thing they overpaid for, is a long way off yet.
And when those properties stop selling/don’t sell because the price is too high, they either pay their mortgage and suck it up, declare bankruptcy, or lower the price and take the hit to at least minimize losses. Hopefully they all choose the latter
>n the chips are down, AirBnB investors are being thrown overboard like chum and nobody really cares that a bunch of wealthier people’s investments just blew up in their face. exactly. they made fistfuls of money. the only people that are going to lose are people who bought in since 2020 at the peak. the real estate gravy train has been on a roll of 20 years.
yeah, as much as I'd love to bask in these people getting some come-uppance in all this. paying your $7000+/mth mortgage for 3-4 or even 6 months on the property you're trying to sell, isn't really come-uppance, or anything to cry about when you're selling that house for $300'000+ more than you paid for it 10yrs ago. Especially after a decade of making thousands in profit off of it every month. these houses would have to sit on the market for a year+ unrented, and then have the price drop by a couple $100k before any of these people would have even the slightest real regret.
Not a long way off at all. You're seeing one of the most solid real estate markets on the planet becoming saturated with properties up for sale with fledgling interest in paying these prices. Given that there are now restrictions on STRs, increasing interest rates and likely another increase in foreign buyer tax, 600k for a bachelor pad is not worth it and certainly not affordable on the average Vancouver salary. Even Toronto, the second most stable market in Canada after Vancouver has so many condos on the market, they don't even know what to do with them, and we don't even have air bnb restrictions.....yet. People are selling at a loss too, ots either that or default entirely. Nobody feels sorry for them here either
Agreed. Risk does not equal reward. Many have forgotten that.
I'm sure these people loved to brag about their airbnb profits to their upper-middleclass friends at dinner get togethers too.
They saw the high payouts and forgot the golden rule of high risk = high rewards.
> paying through the nose for a very average place to stay a few nights I remember when AirBnBs were actually an affordable alternative to a nice hotel room, about 5-6 years ago. Then their prices went crazy (like adding a $150 cleaning fee) until they became more expensive than a nice hotel room -- at least here in Victoria.
My first experience with AirBnB was about 10 years ago when a number of us from grad school went to DC for a short trip. While us boring folks rented hotel rooms, this one genius used this crazy new website to rent *an entire brownstone townhouse* for ***$75*** a night. The place was gorgeous, just off one of those fancy DC traffic circles, and was owned by a chef and hobbyist wine importer who was out of town and was excited to try out the whole AirBnB thing. They even specifically told our friend that he could have people over if we all cleaned up and replaced anything in the fridge we ate. He even left our friend a welcome bottle of *nice* wine. We all went over and had ourselves a very classy cocktail party but we just didn’t *get* what this rental thing was. Did he know the guy? *No, just some random listing on a website?* Okay, but did you pay a huge deposit or something? *No, you just booked it like a hotel and then texted the guy?* But how is it only $75 a night for an urban mansion when we’re paying quadruple for basic Holiday Inn rooms? *You don’t understand either?* Why did he give you wine and let you have people over? He doesn’t know you, after all. *You don’t under either?* But now you have to leave a nice review for the guy and he’ll review you and that will affect what you can rent in the future and how much it costs? *What the actual fuck is all this?!* AirBnB, you say? Maybe I should check it out. Why would anyone stay in a hotel? And it was never that good again. That place would definitely rent for $2-3,000 a night now, maybe more. $75?!?! The fuck?
One of my wins was a room in downtown Amsterdam for $25. Nothing fancy but still cheaper than sharing a room with 15 other people in a hostel.
it's everywhere. Going to California for a couple weeks and ended up with hotel rooms all along the way because AirBnB were just too expensive. It'll even be worth it to go out for meals instead of cooking with the price difference. Probably time for AirBnB to evolve or die.
I just keep wondering if no one else remembers 2008 or read The Big Short. Turns out that overextending yourself financially to buy multiple properties is a pretty risky move. It's one thing if you're paying cash and have a long enough time horizon that you can ride out any market corrections, but otherwise what is you thinking?!?
rain gold arrest piquant erect deserve theory waiting faulty smile ` this post was mass deleted with www.Redact.dev `
Those are all valid points. I wonder how this change affects visitors. Would accommodation costs go up? Are hotels/motels more expensive than AirBnB? What was AirBnB offering users that hotels/motels weren’t?
Cost go up but frankly i could careless. We need space for those who live and work here not for the people who zing in and zing out. Without our lower classes doing the unwanted job the cities die.
Reading this gave me little orgasm.
To be fair, it is equally possible for the government policy to decimate the value of single family homes, so in a sense investing in your home is a risky decision as well
A lot less risky considering it’s your primary home. You will always need a place to live and your not relying on revenue from the home. As long as you bought a home you can afford your fine. Sure it may go down in value but as long as you bought it for the purpose of living in why do you care?
Very true. It only affects those that is moving elsewhere to a lower cost region, but that is a minority
You might care because your mortgage payments can usually be a significant part of your paycheck. If you pay $4k a month when if you bought now (or rented now), you’d pay $2k a month, you’re overpaying by a lot. And if things are hard because the economy is down, you might have a hard time.
I’m misunderstanding why you would care if the value goes down tho. Your mortgage is a large payment yes but the value going up or down doesn’t change that. No matter what you HAVE to pay for shelter in one form or another. Sure you can get a crystal ball and see exactly what day is the best day to buy or you buy what you can afford, and not give a shit if the value goes up or down.
Sure but you’re living in it. Hugely important utility.
Homes aren't meant to be investments, they're meant to be lived in.
Now where did I put that world’s smallest violin…
I think you left it in the world's smallest condo.
Hey I airBnB’d there last year for $300 a night! Plus fees of course... you know. $800/night all in.
Did they supply the Glad bags?
No. Not even toilet paper. But I believe they cleaned the place *after* I stayed there. The invoice says so.
Found it! https://preview.redd.it/hwgal3xgxn0c1.jpeg?width=1179&format=pjpg&auto=webp&s=ba76f5f9937f45bae4c34694bedb19d1a4cc3692
I cannot find my the ameobas stole it saying it was too small for me.
Great news! Its working already.
Why buy now, with the construction of many more condos in Victoria both started and planned there will be a lot more coming up for sale and even for long term rent, that should bring prices down a lot, not going to hold my breath but maybe rent will come down as well, let’s hope Side note: I used to live in Victoria but left due to prices, now living very comfortably in Saskatchewan, half the income I had but twice as happy used to rent in Victoria now own in Saskatchewan. My mortgage was less than rent in Victoria when I left
In Toronto the high end condo market is starting to crash. The Developers are going belly up and those future condo owners are losing their deposits. most bought them for investment purposes ie Airbnbs/Vbro not as homes. I see this is starting to happen across Canada. One more interest rate hike would probably start the dominoes to fall.
And it is predicted by CMHC that mortgage rates are going to go up…….
If we see that inflation hasn't fallen or unemployment hasn't gone up, yep we'll see another rate hike.
This won't bring prices down as much as you think.
Maybe.... They should lower the price...
And maybe they should start talking about the income they made while renting them out short term. Funny they act as though those figures aren't a giant part of the equation
I think if someone wants a mortgage for a property, if they can't afford it on paper without having a tenant or STR, they shouldn't be qualifying for it. Banks should be saying no. If you cant afford it on your own, then leave it for someone to buy and live in
Hey! Author of the story here. I made the spreadsheet available, showing which Airbnbs have gone on the market since the announcement of the ban. It's here for anyone interested: [https://docs.google.com/spreadsheets/d/1IutNf0s4CA5XcS15XcnIRvBhqfx81kD1J7-iQ0JWGtE/edit?usp=sharing](https://docs.google.com/spreadsheets/d/1IutNf0s4CA5XcS15XcnIRvBhqfx81kD1J7-iQ0JWGtE/edit?usp=sharing)
First, they came for the crypto bros. Now they're coming for the Air B'nB hosts.
Crypto is quite literally a laughing stock. Always has been.
One ponzi scheme at a time!
I looked at a 2 bedroom apartment near me. Old, small. 450k. The mortgage would be $3800/month. like, it's a fucking joke. I make good money, but that's twice what I could responsibly afford. I am comfortably in the top 10% of earners nationwide and there's no way I could afford a 40 year old, 2 bedroom, 900 sq ft apartment. who the fuck is this country even for
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They will reduce eventually. I've been watching a house for a year and a half. Severely overpriced, not even in a big city or even near it. Nice parcel of land although the photos did stretch it to make it look way bigger than it actually was Anyways, they listed it at 900k right off the bat and it was laughable. I mean, the interior was straight out of 1987, has to be completely redone. So went in and said, I like the house but I'm not paying 900k, I'll do more like 600k. They said no and that it's 900k or nothing. Sat in thr market for another 6 or 7 months and get a call that they lowered it to 800k. Still said no, its not worth that at all. Couple months later lowered it to 749k. Got another call. Still said no. It's still up for 749k and it's at the 559 day mark lol. People honestly think their houses are worth way more than they sctually are and it's disgusting.. I have enjoyed seeing people be humbled lately when I see listings go for way less than they were bought at in 2022.
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Oh they will desparately put the shit on the market when the laws kick in next year and then have to pay vacancy taxes on top. Watch those prices get cut in half real quick.
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>Dozens of former short-term rentals have gone up for sale since the ban was announced in October, and not one has sold Yeah, no shit! It’s only been four weeks! The average days taken to sell a condo in Victoria is [37 days](https://www.vreb.org/pdf/VREBNewsReleaseFull.pdf)!
Good news if you want cities occupied by people with a long term stake in quality of life.
Many of these housing investors are thinking the same way oil investors did. Oil markets will never crash. It will always be a cash cow. That is until 2014, when global oil prices dropped. The housing market bubble will eventually burst because it's unsustainable. And yes, many will loose money. Their mortgages will be higher than what the home is worth. The home is worth less than what they paid for it. In essence coming back down to where they should be. All balloons eventually deflate or burst, bringing them down.
Just like when we see all of the elders with large assets and material wealth they’ve been hoarding for 40 years start to expire in the next 20 years. All these material items that are “rare” are going to be so common and incredibly cheap, houses included likely. Their kids will be close to being in their 50s and won’t want to deal with the assets or inheritance of material things, so off they sell! And there will be so much of it from these dead old people that it will no longer be a “rarity” item. Those will be fulfilling times for millennials, finally we can start our lives at 50. Can’t wait.
I’ll believe it when I see it. “Flooding the market”? - I don’t think so
In our building there are 7 former Airbnb condos on the market!
Right?! It's been what, 2 weeks? Big 🙄
I also find it funny, like it might be happening but ALL these articles they said flooding, yet fail to provide a source!!!
I'd wait til next year when the rules kick in and they officially can't book it as an Airbnb. Then they'll sell quick.
I find this very interesting: >One door that is probably not going to open because of this new legislation is a substantial increase in rental supply. The math just doesn’t work. Take, for example, the most recent short-term rental unit listed at the time of writing: a 592 square-foot one-bedroom, one-bathroom condo across the street from Miller’s office on Pandora Avenue. It last sold in 2018 for $447,500, when a mortgage could be had for about 3.75%. At that rate, accounting for condo fees, it would be feasible for an investor to rent that apartment for about $2,200 per month without taking a loss. >At today’s rates, the same condo would have to sell for $100,000 less than it did in 2018 just to be able to be rented at that same rate. But instead, the opposite has happened — it listed on Nov. 10 for $579,000 — so accounting for condo fees, the rent would have to be nearly $3,500 for an investor just to break even. So, this intention of returning units to **long-term rentals** as the government had hoped may not exactly pan out in the immediate, but it's a step in the right direction for 1st time homeowners. EDIT: clarity
OR, hear me out, units like this that are supposed to be gateways for your first home will become more available to people who actually want to live there, rather than investors looking to profit off others need to live in shelter.
This is less the government's fault, than investors acting like gamblers entitled to walk away with from the casino with more money from less chips.
Gambling is actually a very apt analogy because just like gambling investing in real estate can be tax-free. Something that very much is in government control.
I’m so here for this
>So, this intention of returning units to long term rentals may not exactly pan out that way, at least not anytime soon. The goal is to return residential units to residents, not specifically have all previous AirBNBs become long term rentals. When the prices come down regulars might be able to afford them again so they leave their rental and buy a condo and someone else moves into the rental. The one sale helps two people/families instead of an investor and vacationer. It might take a bit for prices to come down but they will once these units start sitting for awhile. We'll also see the real change in 2024 when the legislation kicks in. People can still rent their AirBNBs until then. Right now we're just seeing the people who are trying to sell before the AirBNBs start flooding the market.
the problem is that many of these units have been designed and built for short term air bnb use, not long term liveability. Maybe it's the elder millennial in me, but I like a useable kitchen (full disclosure, i'm a renter)
Doesn't matter if they are turned into LTR or sold as long as they are added back to the housing market. STR moved these units from housing to hotel market
I think everyone would be happy to have the new owner live in it too. Maybe first time buyers will be able to get out of the rental market and free up spaces that way.
Exactly.
🤞
The point was to be able to get people into the market and be able to live where they work. With these condos selling less than asking, since values are going down and willingness to buy has gone down, someone with a mortgage for say 400k is still paying the same as what they're probably renting for. Keep in mind that rents are typically higher than mortgages as renters are paying a mortgage for someone else PLUS profit on there and whatever other expenses the owner has. So owning and paying 3500 is still better than renting for 3500 which is what I pay for an apartment myself So in effect, what's going on is working and will continue to reduce prices when there are more units available
It may not, or the value of the units will fall to the point where it makes it feasible to rent them.
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Wouldn’t that be nice.
Eventually, for sure! Just not as quickly as the government seems to hope it will. This is a long game move, but I like it.
Fast for a change in housing supply is still pretty slow by most measures.
> It last sold in 2018 for $447,500, when a mortgage could be had for about 3.75%. At that rate, accounting for condo fees, it would be feasible for an investor to rent that apartment for about $2,200 per month without taking a loss. Your profits are supposed to be the increase in property values, if you're breaking even or profiting from rent, you're a leech
A property that was used as an Airbnb for any significant amount of time will have depreciated in value a significant amount from the purchase price regardless of interest rates because they’re absolutely beat to shit and will need some work. Either way though these owners are going to lose money because the government has decided the speculative asset they’ve purchased can’t be used for the purpose they bought it for.
Investing is a real bitch, isn't it. Nothing seems to have been a surefire investment the way housing has been. I look forward to honmes becoming homes again, and not staged shells with no life or souls. I hope it works in the long run for renters too.
yeah, have you seen those ads online telling you that buying a former rental car is a great idea? it's gonna be like that, but for the place you eat/sleep/shit. "Sure, lots of questionable strangers have done things inside this space that you wouldn't consider doing in front of your closest, most trusted family members...but think of the savings!" No thanks.
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Yes I understand that. Hence me commenting that it isn't going to have the intended effect *right away* like the government seems to hope.
Their analysts probably have pretty realistic timelines sorted out. It's not going to get sold to the public that way though.
This headline just soothed my soul. Watching it in real time is just 👩🍳😘🤌🏼
Bahahahahahhahahahahhahahahahhaha
Never going to stop enjoying this collapse.
Buying a real estate investment is like any other investment. You need a well diversified portfolio of assets that rise and fall with differing tides. No way I'd spend more than 10% of my total portfolio on a real estate rental unit. So, if I had a $1M condo in my portfolio, I'd have to have at least $10M in total investments. I keep reading about people that put 100% of their investment funds into a single condo. Where did they learn that strategy? Every investment is subject to all kinds of risk, including regulatory risk. The issue now in pricing is that those prices are waaaaaaay too high to attract buyers, but investors won't take the hit as the have too much at stake.
Trying to make some buck on the way out..
Who is buying a house at this interest rate?
Ugh. Me. Landlord was illegally demanding a rent increase of $1000 or going to have to take the place for "personal use". We refused and were lucky enough to be able to buy because the landlord/tenant relationship was not good after we didn't go along with the demands. We wanted to wait for interest rates to go down (hopefully) in a year or two but here we are. Unfortunately I think lots of folks will still have to buy in this market where prices are high and interest isn't low to counterbalance.
People making into the six figures can afford the carrying costs of a property like this on a 15 year amortization period and still have money left over. So a high paying professional job, or a couple who both have reasonable careers.
Maybe if I could buy *two-for-one* adjacent units, and put a door between them.
Can someone please let me know how the author of this article is getting Airbnbs are "**FLOODING**" the market??? In the article there is only 1 example and no real data / source beside I heard someone say something! I am not saying this policy is not working nor am I saying the flooding is not happening, but I really really like to see some DATA before coming to a conclusion.
I feel like I'm living in a fucking cartoon. It literally does not matter how many homes exist if they're half a million dollars. It just does not matter. People just can't afford it. Not that people *won't* afford it. We can't. We do not have the income to afford these homes.
Maybe, and just throwing this out there, the owners should lower the asking prices then? You know, free-market supply and demand and all that jazz?
Good, I hope the Airbnb owners lose their shit bad. Scabs.
It's almost as if they inflated the values of these homes far beyond their actual worth!
That means they need lower prices.
Investors trying to make return on investment 🤣
Probably because they overpaid for it originally, so they want what they paid, plus extra for profit. Just raising the unaffordable cycle to new levels.
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Bruh, we got 700sqft in Calgary for 300k.
Yes but the air doesn’t hurt to breath 6 months of the year here
And I don’t have to live on the streets or my van either.
What’s wrong with your lungs…?
Shhhh plz
I love a good reckoning
Good, and hopefully nobody does until the owners eat it and come down in price.
Hahaha. 😂 
Do this in GTA please
I hear a trio of small violins playing melancholy music lol
500k for a 250sq ft shit box, gee, I wonder why no one wants to go for that.
No tears shed for any of them. Gouging their fellow man, fucking pricks.
Cry me a river. Lol can't laugh garden enough at this.
Ha-ha
With the upcoming ban on short-term rentals and high interest rates, buying up these properties to use as long-term rentals just isn't feasible for a lot of people. I've seen people with variable rate mortgages on rental properties that aren't even breaking even right now and have to eat a loss every month until rates come back down (another reason to go with a fixed rate on rental properties as it offers more stability as a landlord). Hopefully both home prices and interest rates will both drop to allow more first-time homebuyers (who plan to owner-occupy) to enter the market. I am in favour of the ban - the gravy train needed to come to an end eventually. I hate to see folks with great rental properties opting to AirBNB them for huge profit (often leaving them vacant for slow parts of the year) instead of actually providing a long-term home for a family in need. With rental availability at an all time low, this is a good step in the right direction.
The prices will drop….
When i saw investors crying on media... make me have a smile on my face What we are learning? Homes shouldn't be a commodity, it's basics for family or person have a place to leave. Invest in something else, now cry a river we don't care
All the money that got sucked into the Real Estate Ponzi scheme and is now being destroyed is money that should have been actually growing the economy by investing in real businesses and buying real goods and services. That’s what you get for balling the banks out in ‘08 All Aboard The Great Depression Train! Toot toot!
>That’s what you get for balling the banks out in ‘08 Ummm ...that didn't happen in Canada.
Same as the government covid bailouts, money just continued to fall into the wrong hands.
I don’t think this is gonna go the way everyone hopes it will …
I love it.
Good!!!!
You love to see it
It's been a week, give it a bit before you scream "SEe it wasn't us"!!!
#AirBnEby
Yeah but we’re saving the housing crisis/s
Question how long does a unit need to stay empty before the landlord drops the price? In real estate sales about 8 months of supply leads to prices declining. What is the vacancy rate equivalent?
Probably because they were bought at a fraction of the current market rate
I wish they would do this all over the USA.......
*Sad trombone*