The wealthy move from owning to renting.

This is interesting. In the US, the luxury rental market is seeing a bit of a boom as the wealthy move from owning to renting:

So in March he sold the Manhattan apartment he bought in 2008 for about the same price he paid and moved — along with his wife and child — a few steps away into a luxury, two-bedroom rental unit in a brand new building.

Lee wouldn’t disclose what he’s paying, but similar two-bedroom apartments in the building usually rent for $11,000 a month.

“I wanted to protect ourselves from prices going down,” says Lee, who is a managing director at a major bank. “I didn’t want to be an owner anymore.”

Lee has company. Demand for luxury rental units has increased as wealthier individuals who can afford to buy are deciding not to, according to brokers and real estate analysts in affluent areas of the country such as New York City, Chicago and San Francisco.

“More affluent Americans are opting to rent as oppose to buy,” says Jack McCabe, an independent real estate analyst and CEO of McCabe Research and Consulting in Deerfield Beach, Fla. “Within the last year, so many people have seen their family and friends get burned in real estate. They don’t see it as being a risk free investment as they used to.”

Uh… better late than never, eh guys?

121 Comments
newest
oldest most voted
Inline Feedbacks
View all comments
maggie chandler
9 years ago

CNN says the extension of Bush tax cuts will be good for US stock markets and real estate and that'll filter down to Canada.

anon
anon
9 years ago

“North Vancouver is already in the red YOY based on the REBGV HPI."

I noticed this too Paulb. I am curious what happened to North Vancouver prices during/after 2008? What was the lowest YOY drop for NV? As far as I can tell, SFH prices there have changed little over the last 2-3 years!?

Dave
9 years ago

@YLTNboomerang:

Don't worry about me, I'm not the one to worry about. Time is a commodity that I am always short of. If I could buy it, I would. Be thankful I share some of it with you.

YLTNboomerang
9 years ago

How do people like Dave have so much free time to spend posting online??? I work during the day, read the blog while I eat my lunch, head to the gym after work, commute home, make dinner, family time, and then, with my precious couple of hours, maybe watch some tv, maybe go online, maybe do some volunteer work I am involved in. In no way could I post ad nauseam throughout the day unless:

1. I'm unemployed

2. I'm independently wealthy and have too much time on my hands

3. My job requires that I am active on certain blogs

4. I work for the government (just joking)

YLTNboomerang
9 years ago

@Anonymous:

I messed that up, Halloween '08 was when I cleared a lot of my US position, October '07 was when I built it up and yea, 1.03 not 1.30….guess I need 2 things:

1. An editor

2. To review actual data before posting stuff from memory

Anyway, I have no agenda, I don't want to convince anyone bullish that they are wrong, I believe everyone gets what they deserve in the endgame. I made some good coin playing a risky game but dealt with some pretty bipolar days where my mood was directly related to the markets. My original strategy was GARP however after the massive fallout in the US I had to go high risk to recover paper losses. I was lucky to actually make a nice return however I have returned to my GARP roots.

jesse
9 years ago

@VHB: Here you go.

Courtesy a little mouse.

painted turtle
painted turtle
9 years ago

Found @ VREAA:

“A few days ago I met a friend’s friend who is a new immigrant. He bought two old houses, each at $700K – $800K, in Burnaby recently, and going to tear them down, and build new. One will be a home for his family, and one is the vacation house for his friends (still in China)."

=========================

This is the most hilarious story I have heard in a while.

Imagine that guy who lives in China, has 1.5 million$ (which is a real fortune in China). He dreams of settling down in… Burnaby, and to impress his friends, he buys them a vacation place in…well…Burnaby. What a great place to spend the summer! There is no better place in the world at such a price.

Taking about urban legends…

VHB
VHB
9 years ago

@/dev/null: I choose 'column view' on my mobile.

Renting
Renting
9 years ago

@Dave:

Don’t assume that most people with 35 year mortgages can’t afford their home.

If most people who had 35 year mortgages could afford them CMHC would have never created the 40/35 year mortgage in the first place. It was created because few could afford the 25 year anymore (and that is across Canada Vancouver is much worse off).

Dave, tell us the numbers of you friends – income and mortgage amount. We can do the math.

Devore
Devore
9 years ago

@Dave: Did you miss my opening line, or were you too busy building your strawman? I agreed with the change. I don’t care if only 10% of people were at risk. It’s still not worth it because foreclosures can have a magnifying effect on the wider market. I have always advocated that people live within their means. Fortunately, Canadian banks took this approach to heart, which prevented a collapse of our market in 2008. That's great, but we're not talking about how things should be, but rather about how they actually are. It's great that people who can afford a 25 year mortgage comfortably (30% of income) can opt for a 35 year mortgage for "cashflow reasons", as bizarre as that may be, but to say most or even a significant amount of people taking out 35 year amortizations do… Read more »

painted turtle
painted turtle
9 years ago
Renting
Renting
9 years ago

@Dave:

There is a valid role for renting. Owning isn’t for everybody.

You are correct. In todays market it is only for those who have no clue about finances.

There are lots of reasons for people to rent. In order to own, you need to have long term stability.

In order to own you have to:

1. Be so dumb as to not realize there is a bubble and prices cannot sustain this level, or

2. Have so much money you could care less about your property dropping by 50%.

My guess is Dave is in category #1.

/dev/null
/dev/null
9 years ago

@FlipFlop: I had the same frustration for quite a while and just found the solution yesterday. When you log in, on your profile page you can force the mobile theme from your phone's browser.

painted turtle
painted turtle
9 years ago

At least they have sunshine there… Their market will never go down because they have a huge immigration of rich Asian investors…
http://www.news.com.au/money/property/burnt-by-45

VHB
VHB
9 years ago

Anyone have a direct link to the pdf of the stats package?

Burpy
Burpy
9 years ago

@Anonymous:

Is that all the bulls have left in the face of a stalled market? Telling us not to critisize foolish arguments and misleading rhetoric? Stop whining and go buy some condo's. The agents are desperate for commissions.

Yalie
Yalie
9 years ago

I have always advocated that people live within their means. Fortunately, Canadian banks took this approach to heart, which prevented a collapse of our market in 2008. Excuse me while I projectile vomit all over my keyboard. Canadian banks lobbied the government to introduce the CMHC "insurance" scam, and have since been lending money with reckless abandon to anyone with a pulse while offloading 100% of the risk to the Canadian people. Mortgage rates would be double what they are now and down payment requirements would be 20% or more if banks were in fact encouraging people to live within their means. The only thing Canadian banks took to heart in 2008 was the surefire knowledge that the government will do anything and everything to keep their fat profits and bonuses going – even if it means destroying the entire… Read more »

Dave
9 years ago

@Best place on meth:

Sure, why not? You have this image built up in your mind about what I do and do not believe. Stop assuming things about me and just focus on what I write.

There is a valid role for renting. Owning isn't for everybody. There are lots of reasons for people to rent. In order to own, you need to have long term stability.

Best place on meth
Best place on meth
9 years ago

@Dave:

>>>There are still plenty of financial tools and mechanisms to allow those who need and want financial flexibility.<<<

Like renting.

Dave
9 years ago

@Best place on meth:

Did you miss my opening line, or were you too busy building your strawman?

I agreed with the change. I don't care if only 10% of people were at risk. It's still not worth it because foreclosures can have a magnifying effect on the wider market.

I have always advocated that people live within their means. Fortunately, Canadian banks took this approach to heart, which prevented a collapse of our market in 2008.

There are still plenty of financial tools and mechanisms to allow those who need and want financial flexibility.

ReadyToPop
ReadyToPop
9 years ago

The housing market continues to look bleak in two of Canada’s most expensive cities….

Home sales still falling in Vancouver and Calgary

Best place on meth
Best place on meth
9 years ago

@Dave:

Dave, why did the government do away with 40 year mortgages?

They were waaaay more flexible.

Actually, why don't we introduce interest only mortgages?

Flexible to the max!

After all, people can afford to pay more, right? So why not give us the choices and flexibility that we as responsible consumers deserve?

Dave
9 years ago

@Yalie:

If you can't afford the 25 year mortgage you shouldn't be going for the 35 year one. CMHC rightfully made that change.

Don't assume that most people with 35 year mortgages can't afford their home and can't handle higher interest rates. People do all sorts of things with their finances that might seem strange on the surface. God knows I don't have a clue about mine.

It's the same issue as leasing versus buying a car. Some people prefer a lease for purely cash flow reasons.

Anonymous
Anonymous
9 years ago

# 97 meth girl

You're the biggest whiner out there.

You probably cut and paste your info from other posters.

Probably an overpaid union moron too.

I thought you'd be long gone after the purge, why are you still here ?

Best place on meth
Best place on meth
9 years ago

@Anonymous: #94

I just voted you down for being a pathetic whiner.

Next!