Its not just Vancouver
Affordability is a problem all over BC according to this story on news1130:
The average home in BC now goes for $455,000, so affording one means a family has to pull in well over $100,000 a year. That’s a stretch considering Statistics Canada figures from 2005, when the average family took home about $65,000 a year.
I always find it interesting that these stories seldom mention prices dropping – they talk about how prices have gotten out of reach for many buyers, but never seem to connect the dots. I guess its up to outside buyers to keep our prices lofty?
Or perhaps overextended locals will stretch further to buy ‘investment’ property here. Haven’t you heard? BC is running out of land!
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June 27th, 2007 at 2:06 am
Are you kidding?
The average House price in Van is well over 650000.
Where your average house price of 400000 came from?
400000 is only good for a new cramped apt in a shitty area like NW.
June 21st, 2007 at 4:06 pm
RE: Average incomes
Averages do not give a fair representation of income spreads because high incomes will skew the numbers, which is why any credible source will use median income numbers.
June 21st, 2007 at 10:52 am
satv
I do not beleive in bear and bullish.
So, what you’re saying is you don’t believe in Providers/Savers of capital and Users of capital?
BoC doesn’t just print the money whenever people need it. Well, maybe it does, but that’s a whole other topic.
“people need encouragement to move forward.
discouragement to sit back.”
and information from contradictory sources to make intelligent decisions on their own. That’s what we do here.
June 21st, 2007 at 9:38 am
I wonder what the Fraser Institute consider as a “family”, since StatsCan showed that median household income is inthe 50k range. Of course, if you define a family only as a mom, a dad, and kids living in a SFH, then you would arrive at a different family income. I guess their argument is that retirees don’t constitute a family.
June 21st, 2007 at 7:02 am
“According to the Fraser Institute, the average B.C. family (with two or more earners) makes about $81,200, and pays a total of $36,900 in taxes…”
i’m not sure what “average” is here; it would seem that it could be skewed by a few large-income families. i would be more interested in knowing that $x family income represented the yth percentile.
June 21st, 2007 at 1:08 am
According to the Fraser Institute…
Not sure if their stats are credible enough
Would this be the same “research institute” that has had nothing to say about the housing bubble in Vancouver or anywhere else?
The “taxpayers’ friend” that has had nothing to say about CMHC (i.e. you and me) insuring high-ratio mortgages in Vancouver and other bubble areas?
Connect the dots.
June 20th, 2007 at 10:22 pm
accordingly
June 20th, 2007 at 10:20 pm
el bubb
whats happening is world wide scenarios.
for bb
I do not beleive in bear and bullish.
people need encouragement to move forward.
discouragement to sit back.
we must change ourself accodringly with time.
June 20th, 2007 at 9:52 pm
More like, next station Spuzzum.
June 20th, 2007 at 9:51 pm
reknab for 853 you can buy 165 to 170k mortgage.
go for flex value which is always -.75 than the prime rate.
right now its 5.25 then go for 35 year amortization.
and go to small banks like scotia or bom,even cibc offer good deal not on computer but on personal visit.
June 20th, 2007 at 9:30 pm
then what about sliding little bit to next station surrey then langley.now you have make that easy for you go get one.you are in.
June 20th, 2007 at 9:28 pm
satv
“Next station” is not a very bearish concept. Though, it is an alternative for those who think Vancouver really IS different.
But we all know what is really happening…
June 20th, 2007 at 9:25 pm
I work in a mortgage approval centre and I don’t think you will get much of anything anywhere in the lower mainland let alone East Van condo wise for $144k.
Based on these numbers I think it highly unlikely that a minimum wage earning couple could buy anything by bringing their salary to table solely.
June 20th, 2007 at 9:21 pm
SATV here are the numbers the TD how much can I afford mortgage calculator came up with based on a gross salary of $40k and 5% down. Keep in mind this would be considering the couple has ZERO debt currently.
Purchase Price of Property $144,251
Mortgage Amount $134,251
Monthly Mortgage Payment Over Term2 $854
Based On Your Inputs…
Interest Rate Over Term 5.94% per annum
Down Payment $10,000
Amortization Period 25 years
Gross Household Income $40,000 Annually
Property Expenses $3,000 Annually
Monthly Debt Expense $0 Monthly
That doesn’t give you much of a house/condo (if any) and definetly no trade up space for a future family.
June 20th, 2007 at 9:01 pm
wg2c said…
satv, what do you think about besides real estate?
6/20/07 7:47 PM
wgtocalgary
beside is state of realty.the fact and the truth.
government understand we don’t have enough work force,
they are scared as baby boomers are going to corners.
employers also have same type of understanding.
so this govt.and employers combined develope system called chase has just begun.
if people don’t get challenged they become lazy.
estimated government point of view
lets say real estate,fuel,grocery,hydro become avialable to us on cheap price’s would you ever be worried to work hard and keep your self in labour force.that is a step on labour shortage.
estimated employer’s point of view.
lets say you making $20 per hour and you enjoy some kind of life style.
$40 per hour will make you lazy,you will change your avialabilty from full time to 3 days a week acourding to your habits and life style.
or you will call in sick 20 times in year,or you will increase your vocation time from 2 weeks to one month because you can still recover last years gross.
so they put us in chase so we can battle to survive.
rate of pay only increase when cost of living goes very high.if level of cost does not increase there is no raise.
as now we have high cost of living so rate of pay on lots of jobs are also gone up.only small bussiness are too tight.
Reknab said…
Quote
“A couple earning minimum wage can still buy a condo in BC”
Could you throw some numbers up here to support this theory?
6/20/07 7:32 PM
reck you can still try east van,surrey,langely etc.
with good credit and around 40k gross.
June 20th, 2007 at 8:09 pm
Slightly OT:
Vancouver workers moving to Winnipeg:
“One hundred workers from the B.C. city have opted to move to Winnipeg to ‘bump’ into jobs, says Lorne Hammerberg, Manitoba chapter president of the International Association of Machinists and Aerospace Workers.”
So the layoffs won’t directly translate into unemployment seeing as some of these guys are leaving the province altogether. Guess Winterpeg ain’t that bad.
June 20th, 2007 at 7:21 pm
ELL BUBB
if house’s were ever affordable 97% people should have been enjoy the home ownership right now.
I have copy and paste this words from mold city for further discussion.
Muir who says we still havent reached previous high housing prices in Vancouver.
can you tell me the best ever time when people were able to afford house’s.
if you beleive muir,I also confirm in past rates of pay was so low, and interest rates were too high.
and this mortgage things were very hard to understand for common people,lots of people died without paying off burden.
there are only certain percentage of rich people,if you can not afford you fall very close to poverty line.
common people hardly can afford anytime in history and present or in future.unless you work atleast 12-16 hour.
so currently people with little success are going for further attempt.
anybody else with no job,8hour job,and or people who got something handy but can’t put more attempt or strugle to hold their position they are going to next station.
inflation does not bother people with little success,rich,or bussiness man.
in my understanding higher inflation is a excuse like the way government make tax from smokers.
to control inflation money goes to government,and financial institution from people.
when govt does not control inflation money stay in people’s pocket.
for rich its status to stand higher than his neighbours.
for us higher interest rates,r.e. fuel,grocery,hydro,icbc cost is a punishment
just to reside not just in vancouver but lots of city of the world.
June 20th, 2007 at 6:47 pm
satv, what do you think about besides real estate?
June 20th, 2007 at 6:34 pm
“A couple earning minimum wage can still buy a condo in BC, so I don’t see what the big deal is. You just have to be willing to work hard, and what could be a safer investment than real estate?”
Uhhh no, they could not, unless they skip luxuries like food and clothing, etc. Dosh, we talked about this. You are lost. You need to go back to Chipman’s blog.
June 20th, 2007 at 6:32 pm
Quote
“A couple earning minimum wage can still buy a condo in BC”
Could you throw some numbers up here to support this theory?
June 20th, 2007 at 6:26 pm
satv
What you have to realize is that alot of people are gonna get screwed.
There is this thing called “Fair Trade”. It is based on fundamentals, so if you don’t earn enough money you shouldn’t be able to buy what you can’t afford.
Speculation of property inflates prices and simulates demand. How we know this? By comparing averages or medians, of course.
Simulated demand DOES NOT create a fair trade for buyers, cause the value is inflated.
When things get out of hand and too much money gets borrowed, what do you think happens? Inflation.
Immigration down, Forestry down, other sectors as usual (oh except for furniture, home renovation & food places where construction workers have lunch of course), speculating construction up, Interest rates up!
And to sum up Inflation up, and unsustainable/simulated/poor economic growth(think one hour after Olympics) = stagflation.
No good. Unless those who got the most out of it will turn to people and start creating jobs. But I feel that they don’t give a damn, cause they are not from around here.
Fair Trade… my a**.
June 20th, 2007 at 6:11 pm
A couple earning minimum wage can still buy a condo in BC, so I don’t see what the big deal is. You just have to be willing to work hard, and what could be a safer investment than real estate?
It sounds like some people are willing to give up a little to quickly, but perhaps that means this province will be left with only the hardest working most productive employees.
June 20th, 2007 at 6:11 pm
I guess the residents of Burnaby’s last trailer park will have to move to the next station. From a manufactured home to some basement dungeon. I hope they get some kind of compensation from the investors. Many of the elderly residents have lived there about 40 years. Oh, when will this evil bubble pop?
June 20th, 2007 at 5:34 pm
Satv: all people go to next station, make Vancouver very empty city.
Many constructionst guys, and real estate agents, and investorers like yous all goes to Moose Jaw, and maked price go ups there and downs here.
and lots unemployement, but I ok because I gets job in making movies,for adults, and my girlfriend she make maryjuana plants.
June 20th, 2007 at 4:42 pm
No matter where you go-
I will find you.
hey friends I found your comments are very touching,and very hard to dis agree.
but if moving step makes you feel better and put you in affordable situation.
then buyers did right thing who bought r.e. on right time in vancouver.
by moving some where else you will do the same thing,which other people did back here in vancouver.
there is nothing wrong with your thinking, but you guys miss the boom, and just woke up from bed or you got hold back by vhb.
so your step to buy or rent some where else will pop up the next station.
there is nothing wrong with vancouver, people also bought here for same reason, which you found resonable for next station.
Vancouver is a main plate form for Canada.you think vancouver is expensive you will find vancouver triple expensive.
where ever you go, because price over there is 1/3 so.
with your help those city will also go up, and then you will drive those people out who will be in your situation at next station.
they will move to next station and the story will be countinue.
nothing to worry if hq people are leaving,they were here for same reason,what future hq people will be here for,great future countinue……
June 20th, 2007 at 4:03 pm
“It’s funny how local businesses will not raise wages, citing low inflation, then complain when the talent pool is dry. “
Business don’t care what the inflation is. As long as they can hire new staff, or keep customers with inadequate staff, they will not raise wages. Business only raise wages when they absolutely have to. Again, I’m voting with my foot, as wages for white collar workers outside IT field has been lagging inflation. Time to serve the invisible hand.
June 20th, 2007 at 3:55 pm
The GVRD, FV, greater Victoria, and Okanagan area together count for vast majority of BC population. If the are on a bubble, the average is high without a doubt.
June 20th, 2007 at 12:22 pm
“VANOC is having trouble recruiting necessary talent from out of town because of Vancouver RE prices.”
It’s funny how local businesses will not raise wages, citing low inflation, then complain when the talent pool is dry. Low rent appreciation may be keeping down inflation but it seems obvious many don’t want to rent forever.
June 20th, 2007 at 11:51 am
el bbub said: …this doesn’t make sense.
Precisely.
Amazing, eh?
And even if that allowable mortgage figure was twice that, it’d STILL not make any sense.
June 20th, 2007 at 11:49 am
digi, wg2c, all:
RE prices here are definitely scaring folks off, and the real consequences of the losses for the city will be time delayed 5-10 years.
I posted about 4 months ago of a really skilled and outstanding professional who is selling and moving cities (well before retirement age) because the equity in their home has become so life-changing they can’t resist.
My wife and I are professionals and we have seriously considered a city move simply on the basis of RE prices (not unaffordable to us, but such extremely poor value that it makes you shudder).
And to cap this off with an irony:
VANOC is having trouble recruiting necessary talent from out of town because of Vancouver RE prices.
June 20th, 2007 at 11:38 am
Brief from today’s 24hrs paper:
“According to the Fraser Institute, the average B.C. family (with two or more earners) makes about $81,200, and pays a total of $36,900 in taxes…”
Not sure if their stats are credible enough, but this leaves only $45 grand for use. And $1250 in allowable mortgage payments.
That’s only $195372 mortgaged for 25 years at 6%,
…this doesn’t make sense.
June 20th, 2007 at 10:49 am
digi said… Did anyone see the headline on the sun today? Prices drive refugees out of Vancouver.
Who else are the prices driving out of Vancouver? UBC faculty/staff? Doctors, dentists, other health professionals, policemen, firemen, teachers?
Who’s going to look after the people who can afford to stay?
We’re outta here by August 1st, moving out of province to where we can afford to buy a house.
June 20th, 2007 at 9:31 am
There’s also a pretty big difference between median and average family incomes, average skewed up, because of the Very Rich. The year 2000 meant an average income in the GVRD of $75K per couple, and a median of $58K.
June 20th, 2007 at 8:51 am
Did anyone see the headline on the sun today? Prices drive refugees out of Vancouver.
June 20th, 2007 at 8:37 am
“…new statistics from the BC Real Estate Association might put that dream on the shelf for good.”
Hmm, for good eh? It frustrating to see the media helping to perpetuate the myth that real estate ALWAYS increases in value.
June 20th, 2007 at 7:24 am
Thanks Reductimat for the link.
On the plus side today mortgage rates dropped one fifth of a percentage point, so perhaps you ought to run out and buy today before they go up?