A lament on affordability
Scullboy sent in a link to this CBC editorial on housing affordability in Vancouver. Its written by a boomer who grew up here and is essentially a lament about the loss of affordability that the current generation is facing. Here’s a few select excerpts:
No one that I grew up with could afford to buy a house in that neighbourhood now and move back in. In my parents’ day, there was typically only one wage earner per family, and now there are two, and still, middle income, middle-class couples cannot afford to buy a house in the city. It is obvious that wages have not kept pace with the inflated price of housing.
Actually, I don’t know anyone who can afford to buy a house in the Lower Mainland (B.C.) anymore, unless they lock themselves into 30- to 50-year mortgages, and do nothing but work overtime for the duration.
This situation has to bottom out sometime. But right now, there is a whole generation of young Canadians who have no hope of owning their own place in a major city. Young doctors are turning down job offers in Vancouver because they can’t afford the housing.
…
The thing is, everyone buys property with the idea it will increase in value, and they will get more out of it in the end than they put in. This equation has been more or less manageable for generations. But there must be a breaking point, and I think we’re almost there.
Banks, which have been making hefty fortunes on all the mortgages on any given house, new owner after new owner, may start to worry about this soon. The bottom-out factor has already started in the USA, and will arrive here too.
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February 24th, 2008 at 12:48 am
I actually want to clarify myself. I also believe like the majority of you that RE in Vancouver can’t possibly sustain itself given it’s current growth. However, I do own properties but have no problem seeing them decrease in value because I have two daughters and many nieces/nephews whom I would love to see own homes in Vancouver if they wish to do so in the not too distant future. After reading several weeks of this blog, I’m starting to see there are several losers within both bulls & bears. I will also contend that most of these “losers” here have no ability to take advantage of decreases when it does come. As I have no “data” to support my hypothesis, I can only rely on the bullshit that’s being spouted by them.
February 23rd, 2008 at 11:52 pm
you guys are a bunch of losers Holy Shit!
February 23rd, 2008 at 10:00 am
“You are truly retarded and if you are the voice of the Bulls then the housing sector is in serious trouble.”
. I made a comment where I compared him to a blathering idiot panhandler…I need to apologize…to the panhandler! 
Yes I would say he is a typical bull, uneducated, full of themselves, high paid no work leeches on the community!
February 22nd, 2008 at 11:48 am
Comment by krrish1
2008-02-22 08:00:45
smart guy i will be able to respond to you in friday free on sat or sun.
So you have time to write a bunch more nonsense, but no time to back up your retarded statements?
You are truly retarded and if you are the voice of the Bulls then the housing sector is in serious trouble.
February 22nd, 2008 at 11:44 am
Krish, you never answered the question about wages increasing with housing costs.
You said you’d answer today you retarded gimp.
February 22nd, 2008 at 11:07 am
WELL, if you don’t know what is Network and how it works then stop beating your head on the wall.
NOBODY KNOWS VANCOUVER, YOU FRIGGIN’ IDIOT
Then how did you reach here?same way other people reached here that’s what we call network that connect people worldwide.
Do you know where is putta perthy(a name of place)?..
Ask your same Question to British Explorer and European Settlers thank you sweet pie.
February 22nd, 2008 at 9:34 am
Krrish:
I repeat NOBODY KNOWS VANCOUVER, YOU FRIGGIN’ IDIOT. If all this networking is going on, why doesn’t anyone know about Vancouver?
I *really* hope your wife slaps some sense into you when the market crashes. Seriously. I also sincerely hope you lose whatever investment you have in your place. You and people like you richly deserve a scalping.
SFMike:
You don’t have to own a home to live here. Even if it were the best place on earth, you can rent for half of what it costs to own. Hell, you could own somewhere like Miami and rent here.
So even if you’re right about Van’s supreme awesomeness, it still doesn’t mean that it makes financial sense to own as opposed to renting.
February 22nd, 2008 at 8:00 am
smart guy i will be able to respond to you in friday free on sat or sun.
February 22nd, 2008 at 12:52 am
“.Economy is rocking wages are growing same thing you have been reading again and again”
Please refresh my memory.
How much have wages risen in comparison to housing costs in the past thirty years?
Have wages risen faster than housing costs?
February 21st, 2008 at 10:08 pm
“Own at your peril.”
And that, ladies and gentlemen, get my vote for the slogan for the current environment.
February 21st, 2008 at 10:00 pm
So Dosh and Krrish, how can “everyone” want to move here, if they don’t know where “here” is?
Network:through network people come to know about places,through network it is easy to get job,through network it is easy to get good deal on mortgage,through network affordability can’t be better than this, look at the INTEREST RATES almost touching the bottom line and another cut is coming soon after that there is hardly more slot remaining.no government or financial institute offer interest free loan.Economy is rocking wages are growing same thing you have been reading again and again.
February 21st, 2008 at 9:05 pm
to -A-
I got that as soon as you said it – well, at least he’s keeping busy
February 21st, 2008 at 9:02 pm
“the kind of nice, new starter condos” matter of opinion I would say seeing as I make my living trying to make these places function for a few years…my opinion… poorly built…. hundreds of major building code violations, cheap! cut corners everywhere, sloppy or non existant workmanship…a consultants dream makin lots of bucks!
February 21st, 2008 at 9:01 pm
It takes having two good incomes paying a mortgage for 40 years to be able to finance a cheaply constructed one-bedroom shoebox in Vancouver.
Or you can live in the same condo by renting and pull it off with one slightly above-average income.
Do the math, boys and girls. Own at your peril.
February 21st, 2008 at 8:58 pm
SFMIke ,
your comment is one of it’s kind and answer to those who sing different tunes by chewing self made examples.
fwiw your comment is much appreciated thanks for your time, hope to read you again.
Special:Hi-5-2 SFMIke.
February 21st, 2008 at 8:52 pm
ladyblue, the american is a product of Satv’s imagination who is a product of Rob’s imagination inspired by Mordecai Richler.
February 21st, 2008 at 8:46 pm
SFMIke “Let me offer some perspective as an American who owns 3 downtown condos.” That would be a good perspective considering the good judgement Americans have used on there own economy.
February 21st, 2008 at 8:18 pm
lol! as long as it’s not the Patullo!
February 21st, 2008 at 8:18 pm
Unaffordability is an issue that is not confined to Vancouver, I hear the same comments about SF, LA, and NYC. I think it’s a general global problem.
You forgot to complete the paragraph:
And that’s exactly the reason why RE prices are tanking in SF, LA, and NY, and right across the USA, and in some places in Europe already. To be followed by just about the whole world, including Vancouver. Only exceptions being the places that saw no bubble or where the bubble has already popped, like Germany and Japan. And most of Eastern Canada.
February 21st, 2008 at 8:13 pm
ladyblue, would you like a great deal on a bridge?
February 21st, 2008 at 8:06 pm
SFMike – I can’t help but ask – do you actually live here?
February 21st, 2008 at 7:36 pm
Let me offer some perspective as an American who owns 3 downtown condos.
Vancouver is an absolutely fantastic place to live, (especially when compared to most places in the US). It will ALWAYS attract foreign money due to its beauty, good government, and friendly atmosphere. Personally, with the CAD at parity, I probably won’t be buying again for a while, and I think that’s true for a lot of Americans.
Unaffordability is an issue that is not confined to Vancouver, I hear the same comments about SF, LA, and NYC. I think it’s a general global problem.
I will say, however, that even though Vancouver is expensive, the kind of nice, new starter condos (500 sq ft or so) that you can find in Vancouver does NOT exist in SF or NY. It’s not great for a family, of course, but it does provide a relatively low-priced entry point for Vancouverites to start climbing the property ladder.
February 21st, 2008 at 7:34 pm
That was the first Krrish1 post I have ever read… and it’s gonna be the last.
Numbers will be up in 15 mins.
February 21st, 2008 at 6:59 pm
Lager not Logger,
well said!and that was me above!
February 21st, 2008 at 6:48 pm
WOW,WOW,WOW a bearish blog survey hook you guys up!good move filed with false agression. bears are on ignorance and always bounce the ball back on opponents! who cares?keep on deny the fact now you got another link from ‘Richard’ then start throwing insult on immigrants.
Every other person here is immigrant except some genuine people but because of globlization you can see this movie in all the metropolitian cities of this world.
So if Donald Trumph invest in China and British Columbia sign free trade with asian countries that sounds good every thing else is a bs right?
Stop complaining when we talk about affordability every single bear is in affordable situation but you guys keep desire to reside in some perticular area.
Do not loose your option on false predictions.
Always be in line on right time and right age.
There are anecdotal evidence shows year 1955.
There is no downturn in decades to come.
Graph sometime takes miner twist otherwise more the world will grow more they will earn wow!wow!wow…
February 21st, 2008 at 6:34 pm
“Come on now. At this point there are 23 people that have said they believe affordability will never be better than it is today, at least one of you could fill us in on the thinking behind that. Please?”
This will answer the question: http://en.wikipedia.org/wiki/David_Lereah
And for a more scientific explanation
http://robchipman.net/blog/
The latter is more difficult to understand, it has something to do with negative cash flow being a good thing.
February 21st, 2008 at 5:55 pm
Come on now. At this point there are 23 people that have said they believe affordability will never be better than it is today, at least one of you could fill us in on the thinking behind that. Please?
February 21st, 2008 at 5:14 pm
Vancouvers number 2 industry has been tourism for a long time (even when west side houses were less than $500k)
Westside prices skyrocketed in 1989 as a result of the wealthy moving here from Hong Kong courtesy of the Entrepreneur’s clause ,that fast tracked their immigration.
There were some wealthy Taiwanese folks arriving to offset the Hong Kong folks who moved back in the late 90′s.
We had an influx of wealthy Koreans in the early 2000′s.
Where is the next batch of Uber rich going to come from and why will they pay more than the current prices?
Maybe Krissh hometown, Kazakhstan?
Are a bunch of multi millionaires , from Kazakhstan, trying to move here Krissh?
February 21st, 2008 at 5:07 pm
“I do think that we continue to see continuing coverage of the social costs of our lowering affordability.”
The things that scares me are the stories that are surfacing already (CBC) about young doctors not moving here due to affordability.
What happens to Vancouver if there is a shortage of Doctors, Nurses, etc.? Further downward pressure on the eventual price drops thats what.
Maybe eventually ‘no one will want to live here’…
February 21st, 2008 at 4:56 pm
Drachen: I know a surprising number of people who really ought to know better, but who cling to completely incorrect ideas like “Vancouver prices have never dropped before”, and who fail to understand the concept of real vs. nominal returns.
February 21st, 2008 at 4:47 pm
Scullboy
“God, I hope the spousal abuse thing is for real. I’d love to hear Krrish’s wife is slapping him around ….”
Well let’s hope she doesn’t get reported, the SPCA doesn’t take that kind of thing lightly.
February 21st, 2008 at 4:44 pm
On the topic of affordability.
I do think that we continue to see continuing coverage of the social costs of our
lowering affordability.
Some stories I will not be surprised to see.
Working couples “trapped” in a one bedrooms with kids. Retiring boomers cashing out locally moving to central/south america maybe post bubble florida/arizona. The lack of art-space due to increased property values squeezing the affordability of artists to have creative space. Companies having trouble attracting/keeping quality applicants for jobs in the best place on earth.
February 21st, 2008 at 4:36 pm
The RE pumpers are right on schedule with those well timed “studies” just before the selling season is to start.
Of course the radio, print media, and TV stations better accommodate the BS is they want any of the lucrative RE Ad business.
Listen how desperately 1130 radio is hustling the RE Business with the wall to wall coverage.
Still I’m not surprised Edmonton had the greatest appreciation, you see they are close to Vancouver (you know 2010, the rich Asians etc)
But mostly because of scarcity of land. They are hemmed by the North Pole to the north, the Pacific Ocean to the west, Atlantic Ocean to the east and USA to the south.
February 21st, 2008 at 4:30 pm
Debt Free Living
http://tinyurl.com/2v2e64
for that other 20%
February 21st, 2008 at 4:25 pm
God, I hope the spousal abuse thing is for real. I’d love to hear Krrish’s wife is slapping him around ….
February 21st, 2008 at 4:25 pm
home prices almost double in record decade. funny. edmonton is #1? I thought vancouver was #1. what a letdown.
February 21st, 2008 at 4:22 pm
Ever since the Olympics there, I’ve been dying to see Sarejevo.
I have known a LOT of immigrants in my time. God knows I’ve dated a few.
All the immigrants I knew were aware of two Canadian cities, Toronto and Montreal. That includes all the Latino boys.
The thing about immigrants to Canada is this: They tend to be either very rich, or very poor.
The very rich are either so well off that money’s no object, in which case they buy a giant home in North Van or somewhere like that, or (being good with money) they don’t feel like spending on a bad investment like a condo.
The very poor would either go to Toronto or Montreal which is more affordable, or they would/will never ever come here.
So *that* is Kirsh’s story! Hey Krrish don’t be a ‘tard. Sell your place as fast as you can, wait for the crash then buy in cheap.
Or… you know… don’t. I kind of want to watch the look on your face as the market collapses in on itself.