Vancouver is 3rd worst affordable housing market
We’ve got some work to do guys. If Vancouver wants to be number one it’s time to pull out all the stops. Let’s bring back the zero down 40 year mortgages and start hustling because right now there are still two more overpriced cities on the globe.
VANCOUVER – Homes are “severely unaffordable” in all four of the B.C. cities that were included in a 325-city international survey of housing costs, and Vancouver’s affordability score was the third-worst of all.
The average home in Vancouver, according to data from the third quarter of last year, cost $602,000 — or 9.5. times the $63,100 median income of households in the city, according to the survey results released Monday by the Winnipeg-based Frontier Centre of Public Policy. Only Sydney, Australia, at 9.6 times the median income, and Hong Kong, at 11.4 times, scored worse.
With their housing prices quite a bit lower but their incomes a little lower, too, Victoria, Abbotsford and Kelowna were — in that order — uncomfortably close to Vancouver’s 323rd-place finish in the international rankings.
We can easily beat Sydney’s 9.6 times median income with a small .2 increase, but we’re really going to have to work hard to beat the current champ. It’s going to be tough and we’re all going to have to take on a lot more debt, but for those of you who think it can’t be done just remember: Miami and San Diego used to have higher house prices than us, but we beat them didn’t we?
January 27th, 2011 at 5:45 am
Wow that's even worse than Los Angeles. Pathetic…and we make MUCH MORE on average than what BC'ers make. How the fk do you people make ends meet?
“I lived in Portland for over 20 years until moving here 4 years ago.” | Vancouver Real Estate Anecdote Archive Says:
January 27th, 2011 at 12:03 am
[...] at vancouvercondo.info January 26th, 2011 at 9:44 pm – “I lived in Portland for over 20 years until moving here 4 years ago. After meeting [...]
January 26th, 2011 at 3:40 pm
@Simpatico
My uncle is from portland. At one point he had 3 houses. One primary, two rentals. Occupation – Mailman.
Prices were going up back then and I remember them bragging to my mom about how smart they were. One year I guess something happened. They were up in Vancouver for my cousins wedding and he was talking to my mom that they just got their property taxes worth 10k and they couldn't pay it. Again house rich, money poor.
My mom offered to lend them the 10k. Thank god he refused to take it. He told my mom he was thinking of selling one of them as it had almost doubled in value, his wife was really against this as she thought prices would go up till infinity and wanted to keep the house for her son.
Thankfully he sold one off to a greater fool, made some good money and paid off the other house (even though its paid off its still worth less then what they paid for it years ago).
Three months later the market tanked.
Imagine what would have happened if my uncle took my moms 10k loan and kept all the houses.
January 26th, 2011 at 2:44 pm
I would make a guess it is less than 0.5%.
January 26th, 2011 at 2:40 pm
Yes it happened in Chile with the recent earthquake. Similar building code to Vancouver.
It was the newer buildings that collapsed (10 years and under). The earthquake engineer guy from UBC went down there and he is now recommending our code be changed. He said it will not take effect until 2014 at the soonest. So all buildings built until then are subject to collapse should there be a quake. I guess with a 2% yield who care if the thing falls down. You will still have the land and we are nearly out of that.
January 26th, 2011 at 2:40 pm
@ #121 Simpatico: So nice to read a post with the clear ring of truth. A stock industry argument for maintaining prices here is also extended immigrant families pooling resources to buy properties. The loans might not be ninja but the debt is at an entirely different level.
January 26th, 2011 at 2:36 pm
I had to laugh when I read Vanoc was screwing people out of their bonuses. YOINK!
January 26th, 2011 at 1:44 pm
@boomer: You are wrong. It has nothing to do with rich Chinese. I would make a guess that not more than 5% of purchasers in lower mainland are "rich Chinese immigrants. The industry never provides anything but hot air and anecdotes to back up this claim so why repeat it?
I lived in Portland for over 20 years until moving here 4 years ago. After meeting lots of Vancouverites (the nature of my work), I can honestly say 1) too many are not critical thinkers nor well-read; 2) developers and real estate industry is much more powerful here(reminds me of Arizona in this respect, where I grew up). 3) Portlanders are also the most well-read bunch you can encounter…more books sold per capita in Portland than NYC, a stat that has held for several years. So, prices never got anywhere near the bubbly amount they've reached here, simply because less BS, and not as many bought the BS. With one important exception: The mainline banks and the many fly-by-night mortgage lenders launched a mighty predatory lending assault on the Hispanics, in particular, signing entire extended families on the dotted line, including illegals and people who were not literate in their first language, let alone English. It was these who lost their downpayments, paid outrageous fees at closings, were intimidated out of life savings, and lost their homes in droves. These pushed the price fall, especially in the extended metro area. I know because I built social housing for farmworkers, the poorest, and they were buying homes that were 3 and 4 times what they could afford. Nothing was really affordable to them and they would have continued to be good renters who could sleep at night until these sleazy lenders got hold of them…
And also consider that the average HH income in PDX was about $60K when I left, compared to just over $50K here, and you see how out of whack this market really is.
January 26th, 2011 at 1:41 pm
@Vanrod: Only responding to you, baybeh.
January 26th, 2011 at 12:55 pm
@Vanrod: "You guys should know better than anyone how quickly listings can plummet in this city. I’m talking SALES."
Yeah because Realtors only get paid with SALES. LISTINGS are work, SALES are cold hard cash, baby.
Did it ever occur to you that listings and sales aren't entirely independent of each other?
January 26th, 2011 at 12:37 pm
Bad news for condo specuvestors if people actually react to this story, but good news for affordability for those who don't mind being prepared to ride out the Big One.
From CTV regarding Vancouver hi-rises, which I assume includes a great many condos:
"Many recently constructed highrise buildings in British Columbia could topple or crumble in a major earthquake, according to a new study made public on Wednesday.
The University of British Columbia Earthquake Lab study found buildings made with six-inch concrete support walls aren't as resistant to earthquakes as previously believed, despite being fully compliant with building codes.
(Question: does fully compliant really mean fully compliant?)
The news comes on the 311th anniversary of one of the strongest earthquakes ever recorded on North America's Pacific Coast, in 1700."
Scarce comfort: on average there's only one magnitude 8.0 earthquake annually (the size of the quake that destroyed San Francisco in 1906).
January 26th, 2011 at 12:36 pm
@Absinthe: stop with all the sale:list ratio stuff. You guys should know better than anyone how quickly listings can plummet in this city. I'm talking SALES. Where the rubber meets the road baby. You guys have been doing this so long you should know better…quit with the amateur hour stuff
January 26th, 2011 at 12:36 pm
@Anonymus:
Vancouver will always be overpriced for “average joe” to own.
Dude, can you please elaborate on “average joe” in Vancouver? Define him/her, who is it, what does he do for living, etc. I'm very interested to hear from you?
January 26th, 2011 at 12:24 pm
@Vanrod:
@Vanrod – Average sell/lists have been 45%, not 40%. And the strong years are 50-60%. So given that there's a market goose for all those out buying before the mortgage rules change, this month is pretty weak.
January
sell list sell/list
2001 1225 3395 36.1%
2002 2248 3626 62.0%
2003 1966 3810 51.6%
2004 1954 3039 64.3%
2005 1697 3360 50.5%
2006 1924 3471 55.4%
2007 1806 4067 44.4%
2008 1819 4675 38.9%
2009 762 3700 20.6%
2010 1923 5147 37.4%
average 1732 3829 45.2%
January 26th, 2011 at 12:16 pm
Yup just a little better than 2000 and 2008 both terrible years (for those bullish).
January 26th, 2011 at 12:11 pm
Yes lets accept it cause you said so.
It is actually quite entertaining to watch you realtors squirm. Why leave when the fun is just getting started.
And if in the future we do choose to leave for what ever reason we will have the option to do so. On the other hand you will be underwater in mortgage debt and be stuck with what ever you are living in for the next 35 years. All the while making payments double that of those who waited.
Nope in 10 years the bears of today will be living the good life probably with a place paid off. In 10 years you will still have 25 more years of mortgage payments left at much higher interest rates.
January 26th, 2011 at 12:03 pm
Yes about as solid as the Nasdaq in 1999.
January 26th, 2011 at 11:43 am
The market is shit, it tanked last spring with the rush to beat April's new mortgage rules and the HST. Nothing but future demand pulled forward. Since May it's been weak as a hospice patient.
I looked at the 9 month period since sales started to tank and compared them to the same May-Jan period in previous years.
Year May-Jan sales
2000 21,487
2001 30,908
2002 35,065
2003 39,388
2004 33,500
2005 34,705
2006 28,740
2007 30,576
2008 19,352
2009 31,155
2010 24,247
Average for the last 3 years – 24,918
Average for previous 3 years – 31,340
WEAK.
January 26th, 2011 at 11:42 am
fixie guy Says: “You’re finally getting it. That’s exactly what many bears have been saying for years.”
Nobody is arguing that house pricing is not high for god sake. What I am arguing is that you could be waiting long time for housing to come to affordable level if ever. If you believe that you will be buying westside special next year for 300k, then you are not only a bear but also a delusional. Vancouver will always be overpriced for “average joe” to own. So what I am saying is better to accept that and move on with your life somewhere else. Otherwise you will still be bitching online about bubble and rich Chinese in 10 year time.
January 26th, 2011 at 11:37 am
@Vanrod: hey Vanknob, who are you trying to convince?
January 26th, 2011 at 11:30 am
@Vanrod: Yep, nothing to see here, just move on folks, we're "solid" …. or is that "balanced"?
January 26th, 2011 at 11:21 am
@VHB:
"Sell list is still well under 40%. I never claimed that the 2nd half of the month wouldn’t be different than the first half. That would not be a surprising thing.
I did predict that the month’s numbers will be weak. I don’t see anything to change that yet–but there are indeed still three days left."
I don't see 2.9% as "well under", and I don't think a sales figure around the 10 year average is "weak". The market is solid. Not on fire but very solid.
January 26th, 2011 at 11:13 am
From the definition of a Ponzi Scheme:
"The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going."
and then:
"The system is destined to collapse because the earnings, if any, are less than the payments to investors."
In other words Real Estate is destined to collapse because the earnings (rent) are less than the payments to investors (mortgage payments, maintenance and taxes).
January 26th, 2011 at 10:50 am
@Vanrod:
Vanrod, get back to the office – people are trying to list their properties for gods sakes!
January 26th, 2011 at 10:42 am
18. Anonymus Says:" Sure, I agree. But with 70% ownership rate it just shows you that people are not rational and they can stay that for long time. These people live around you. They are majority in the city. They will sacrifice everything mentioned (RRSP, their kid’s education, vacation, better jobs elsewhere) so they can pay a cubicle in Yaletown. Ask your co-workers how much RRSP have they saved? "
Excellent! You're finally getting it. That's exactly what many bears have been saying for years. Driven by greed, wishful thinking, trust in group think and a debilitating aversion to history these people are banking their futures and that of their children on the impossible fantasy of unprecedented and infinite real asset appreciation. They're fucked.
None of this is new, these scenes played out often in the past. An entertaining and easy introduction is 'The Ascent of Money', in book or video form.
Nice to see you turning around, sniff…
January 26th, 2011 at 10:40 am
@Vanrod: Sell list is still well under 40%. I never claimed that the 2nd half of the month wouldn't be different than the first half. That would not be a surprising thing.
I did predict that the month's numbers will be weak. I don't see anything to change that yet–but there are indeed still three days left.
January 26th, 2011 at 10:30 am
“Debt is still rising faster than income, but it’s no longer rising faster than asset values, Tal’s report found. Put simply, Canadians are borrowing more, but by and large, they’re borrowing to buy things that are increasing in value such as real estate.”
Yes, Tal that is what the Americans bought while it was increasing in value.
But the bubble burst, values dropped,and then the subprime surfaced, and not the other way around.
January 26th, 2011 at 10:12 am
@VHB: Sales projections rising, MOI falling. Can't say nobody told you.