Global Price to Rent Ratio
According to fundamentals, Canadian RE ownership continues to be significantly overvalued compared to rental cashflow. Even the bubbly Australian market has started to correct, but with interest rates low for at least 2 more years, who can predict how long the plates can continue spinning?
You can play with The Economist’s house prices chart yourself here:
http://www.economist.com/blogs/freeexchange/2011/03/global_house_prices
August 18th, 2011 at 1:21 pm 1
We're just like Singapore!
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August 21st, 2011 at 10:37 pm 2
" The average family buying a house in the city would need to dedicate 92.5 percent of its income to own a bungalow.
"Vancouver's housing market is without a doubt the most stressed in Canada and is facing the highest risk of a downturn," Wright said."
http://www.bnn.ca/News/2011/8/22/Most-housing-rea…
92.5% and that is with basically with 0% real interest rates.
No bubble, no trouble
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August 21st, 2011 at 11:42 pm 3
Now tell me how do people surivive? We are in Victoria – our family salary is above average – we have 4 kids that don't do a whole bunch of acivities. We don't travel , don't eat out. We just can't seem to make ends meet.
So, how do people in Vancouver do it I wonder if so much of their income is going to RE.
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August 22nd, 2011 at 12:19 am 4
My fiancee and I spend approximately 10% of our pre-tax income on rent. That probably grows to 15% when you account for utilities like hydro, cable, phones, etc.
We live in a beautiful little north facing 1BR, 600 sq ft, apartment overlooking the city and mountains from the top of the hill in Kerrisdale.
Once all the transfers happen (travel account, savings account, investments, rent, bills etc.) there's just enough left for a couple meals out and a little walking around cash.
I can't imagine feeding 4 kids and paying a mortgage. The savings, travel and dinners out would certainly become a thing of the past in a hurry.
Good luck with that. Why did you have 4?!
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August 22nd, 2011 at 12:21 am 5
Victoria,
Few ways it's done:
Rent basement
Take on more boarders
Two or more jobs
Loans (gifts) from parents
Of course, the above all come with additional stress.
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August 22nd, 2011 at 12:30 am 6
Well as they say, if you can't afford to be in the city, move!
I guess this is just one more evidence of Vancouver bull market. Get in before it becomes 110% of your gross income to own a charming old timer with all original plumbing and electrical. Best place on Earth!
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August 22nd, 2011 at 12:48 am 7
@Victoria:
Drug dealing and tax evasion.
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August 22nd, 2011 at 1:03 am 8
@Victoria:
So, how do people in Vancouver do it I wonder if so much of their income is going to RE.
It's a neat little trick called "negative savings".
Vancouver is the only place in the country where it's successfully practiced.
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August 22nd, 2011 at 1:19 am 9
@space889: I did move, even though my bills were a small part of my income (like flip flop). For me it was more about getting tired of the city and needing a change. After living in the city my whole life I was suprised to find the quality of life in a small town a lot higher and more affordable. I also find I don't miss the things I thought I'd miss in Vancouver, although I do miss family and friends.
If I was still a teenager I wouldn't want to leave, but there are much better places in this province to raise a family.
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August 22nd, 2011 at 1:59 am 10
@Victoria:
Personally, I rent. I think many people who own use HELOCs.I certainly know people who do. And, of course, most people who own bought before the bubble. I would be interested to know what the percentage of residents who actually pay large mortgages is. It might be much lower than we imagine.
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August 22nd, 2011 at 2:06 am 11
@N: Good points.
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August 22nd, 2011 at 2:23 am 12
12% of my household income goes to rent. 0% to property taxes, 0% to condo fees, 0% to repairs / maintenance, and 0.4% to utilities / energy. I heat my house using the gas fireplace which is on strata fees (landlord). And no, I'm not living in someones basement suite. Nice newer tower, lots of space, huge deck, great location. Twill be the envy of all the "owners" when this ship starts to sink.
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August 22nd, 2011 at 2:25 am 13
Another beautiful sunny summer day in Vancouver. Reminds me of the old joke:
Q: What do you call 100 lawyers at the bottom of the ocean?
A: Drier than Vancouver lawyers.
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August 22nd, 2011 at 2:29 am 14
Haha, Vancouver, sorry, you're not NUMBER ONE for once!
But just keep buying. We'll get there eventually.
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August 22nd, 2011 at 2:44 am 15
"The average family buying a house in the city would need to dedicate 92.5 percent of its income to own a bungalow"
That is 92.5% of the pre-tax income.
Smth does not add up in this city, could it be underground economy, grow ops , or HAM money, I dont know but I am sure we are about to find out in not the too distant future.
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August 22nd, 2011 at 2:55 am 16
@paradox: "Smth does not add up in this city"
Marginal buyers ensure things will rarely "add up".
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August 22nd, 2011 at 2:58 am 17
@Escapee: How are the healthcare in small towns? I'm sure it's ok for day to day stuff, but what about emergencies? Small towns would not have the same access to specialist on a moment's notice as bigger cities? What about surgeries? Would you have to travel to say GVRD for major surgeries which I also imagine wouldn't be very convenient?
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August 22nd, 2011 at 3:29 am 18
R.I.P. Jack.
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August 22nd, 2011 at 3:43 am 19
@paradox:
"That is 92.5% of the pre-tax income.
Smth does not add up in this city, could it be underground economy, grow ops , or HAM money, I dont know but I am sure we are about to find out in not the too distant future."
Or perhaps the average family isn't buying houses in the city?
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August 22nd, 2011 at 3:56 am 20
@Anonymouse: "Or perhaps the average family isn’t buying houses in the city"
No they use capital gains on condos, family financing, and rental of suites and rooms students to finance the costs. If you want to live in Vancouver and own a detached property there are ways.
If what you state is true the median income for the city should be increasing faster than it is.
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August 22nd, 2011 at 4:03 am 21
@Anonymouse:
Bloody hell. When are people going to stop with saying that? We KNOW the average person with average income is not buying in the city. It's a metric used to show affordability, nothing more. 92.5% of pretax income pretty much states these people are not buying!
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August 22nd, 2011 at 4:08 am 22
10% of my pre-tax household income goes to rent. I do not pay for maintenance or for structural insurance. I also do not pay property taxes. I have an entire newly renovated house for my family.
My landlord would need to have made a 60% down payment to make this rental break even, even in this very low interest rate environment. Her purchase price was around 400 times monthly rent.
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August 22nd, 2011 at 5:04 am 23
@interesting numbers: I believe the appropriate metric for this indicator is post-tax income.
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August 22nd, 2011 at 5:34 am 24
Boomer Retirement: Headwinds for U.S. Equity Markets?
http://www.frbsf.org/publications/economics/lette…
So, not sure if I have this correct since investing isn't exactly a forte of mine. Lower P/E is bad for older people (Boomers) who have counted their eggs (capital-gains from stock price increases) before they're hatched (sold said stocks)? If so, it's a good thing that many boomers are counting on their home equity to fund their retirement. Oh, wait.
But is it correct that a sustained period of lower P/E is more desirable if you're planning to buy stock and collect dividends? i.e. you're buying the same chunk of a company (earnings) for less money?
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August 22nd, 2011 at 5:40 am 25
Zero Hedge – Article on Canadian Housing
"Perhaps the most defining features of an asset bubble is a marked and persistent deviation from the underlying metrics that once determined fundamental value. We know how real estate in Canada stacks up when compared to GDP, personal disposable income (cities and provinces), rents (cities and provinces), and inflation. It's not pretty. As with any real estate bubble, the overvaluation is most extreme in a handful of cities. The regional data can be seen in the highlighted links. Certainly not all areas of the country have experienced a massive divergence from underlying fundamentals, but it is extensive enough to concern us." …
http://www.zerohedge.com/news/guest-post-more-ins…
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August 22nd, 2011 at 6:44 am 26
@DaMann:
"Bloody hell. When are people going to stop with saying that? We KNOW the average person with average income is not buying in the city. It’s a metric used to show affordability, nothing more. 92.5% of pretax income pretty much states these people are not buying!"
Sorry, perhaps I misinterpreted the post that started going on about underground economy and grow-ops.
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August 22nd, 2011 at 7:16 am 27
Last year it "only" took 72% of disposable income to carry a house in Vancouver. Affordability is seriously eroding.
http://www.vancouversun.com/story_print.html?id=4…
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August 22nd, 2011 at 7:24 am 28
Leith Van Olsen Messages from the front line in Australia:
It looks like parts of Australia are having troubles with low inventory and high servicing costs. The rental market is looking weak as "accidental landlords" start looking for horrible alternatives in an illiquid market.
I blame it on foreign ownership restrictions
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August 22nd, 2011 at 9:48 am 29
New Listings 222
Price Changes 112
Sold Listings 138
TI:16385
http://www.laurenandpaul.ca
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August 22nd, 2011 at 10:20 am 30
Fatty Deb and Chris were giddy again.
It will all be fine, the expert asserted….prices might drop…
Maybe 2 to 3%.
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August 22nd, 2011 at 10:21 am 31
21 DaMann Says: ” We KNOW the average person with average income is not buying in the city. It’s a metric used to show affordability, nothing more.”
Isn't it based on local median income? Math is math, your options are the low neighbourhood household income stats imply purchase money came from another time/place, Vancouver is a city of tax cheats and crooks, or …?
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August 22nd, 2011 at 10:55 am 32
After 2/3rds of the month elapsed:
Average Sales 117
Total Sales 1636
Average Listings 233
Total Listings 3263
Average sell/list 50%
Days in month 22
Days elapsed 14
% days elapsed 64%
Expected sales 2,571
Expected listings 5,128
Previous sales volumes
2005 3649
2006 2998
2007 3384
2008 1550
2009 3500
2010 2202
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August 22nd, 2011 at 11:13 am 33
[China front Update: 8/23/11] China housing market rapidly deteriorating. One third to 40% of developers show declining profits and net losses in the face of government's tightened rules on house purchases and credit applications. Inventories are climbing and sales are dwindling. MOI approaches 10 months in major cities including Shanghai, Beijing, Shenjun, Guangzhou.
"We cannot leverage as much as before. In the past, we can build 900M worth of project borrowing with 100M, now we can only get 300M credit" – said one developer.
"In the past, we can secure a 500M loan withing 10 days, now it takes 3 months!"
"China's real estate experts said that given the real estate industry are facing increasingly serious financial problems, as well as the total urban housing stock increased, the second half of house prices face greater pressure to cut prices, housing prices is expected to decrease around 10%, while suburban price cut up to 15%"
http://translate.google.com/translate?js=n&pr…
(there are hundreds more articles discussing the imminently bursting China RE bubble on google china's news section, all within the last month)
How this affects Van RE price will be interesting.
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August 22nd, 2011 at 11:35 am 34
Update on the Kits house featured in a CBC puff piece last week.
http://vancouvercondo.info/2011/08/cbc-marketplac…
It sold over the weekend as expected but not over asking as predicted.
Asking price $1.295 million, selling price $1.295 million.
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August 22nd, 2011 at 11:39 am 35
@/dev/null:
That makes perfect sense and explains why stock market charts are showing long term bear market signals.
I just wish shorting the real estate market was as easy as shorting the stock market.
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August 22nd, 2011 at 12:02 pm 36
@ 900kCrackHouse: "Twill be the envy of all the “owners” when this ship starts to sink."
I don't know – I'm an owner, I currently pay 0% of my income for housing, and 4% for taxes/ongoing maintenance/strata/utilities combined. I don't envy you.
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August 22nd, 2011 at 12:43 pm 37
@fixie guy:
Well in my neighbourhood ( point Grey) I would say that most of the people I know have lived here a long time and bought a long time ago. So in a sense the prices are sky high because a few rich people, HAM, overextended hopefuls, very cheap money and what have you have pushed the average prices up. These people around me are NOT millionaires by income, they just happen to now own a home that is worth millions that they bought for a fraction of the cost back when. So what I'm saying is that the percentage of household income it takes to buy a property now is just the metric used. What is the % of all properties in Vancouver that is sold every year? 2-3%? I don't know the exact numbers but there are a lot of houses that are not being bought and sold, they have been lived in for years and bought on the cheap years ago. What I'm saying is that it's a bubble
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August 22nd, 2011 at 12:48 pm 38
I should also add that in my area of Point Grey ( around Alma) is very English based. People talk about HAM but I see mostly English in the area. Some have been here for decades some are new. What does this mean? No idea, but a part of me would like to see foreign ownership laws. I simply can't see a case against it unless you are a home owner wanting to cash out!
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August 22nd, 2011 at 12:54 pm 39
what do meteorologist and bears have in common? both can go on being wrong for long periods of time without perceivably losing face.
now i know what some bears are thinking… you only have to be right once …. (bears feels free to finish this narrow minded statement).
i'm guessing your folks never taught you about money, keep smoking hippies.
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August 22nd, 2011 at 12:57 pm 40
Larry just posted on Kitz
Only three sales in the last month, so no-one is buying not even the HAM
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August 22nd, 2011 at 1:19 pm 41
@DaMann: OK so your neighbourhood is overwhelmingly Caucasian but you want foreign ownership restrictions?
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August 22nd, 2011 at 1:44 pm 42
@DaMann:
The case against ownership restrictions is the case for the free market. People can come here and buy stuff (postcards, restaurant meals, houses, businesses, etc.) and we can go other places and buy stuff. I suppose you could make a case for limiting it to countries that offer reciprocity (US: thumbs up; China: thumbs down) the same way we do with driver licences, but with a few exceptions (like nuclear bombs) I don't think we need the government deciding who can own what.
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August 22nd, 2011 at 7:29 pm 43
[Aug 15 StatsCan update] BC new car sales lags Alberta by >6000 units in June 2011 (the gap was 4000 units back in April 2011).
Year-over-year growth of new car sales in BC (5%) lags Alberta (17.1%), Sask (13.2%), Manitoba (5.9%), Ontario (11.3%), NB (13.6%), and Canadian average (8.4%)
http://www40.statcan.ca/l01/cst01/econ58a-eng.htm
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August 22nd, 2011 at 7:42 pm 44
[StatsCan update - mid July]
Retail trade in BC lags Alberta by $330M in May/11 (widened from $285M in Apr/11)
YOY growth of retail trade in:
BC = 1.4% , which lags
Alberta = 7.8%
Sask = 7.6%
Manitoba = 5.1%
Ontario = 4.1%
Quebec = 2.4%
NB = 3.8%
NS = 2.3%
PEI = 6.0%
NFL = 6.3%
Canadian avg = 4.0%
In fact, BC's retail sales growth from May/10 to May/11 was the second worst in the country, only better than NWT (-2.7%)
http://www40.statcan.ca/l01/cst01/trad43a-eng.htm
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August 22nd, 2011 at 8:17 pm 45
42 N Says: "The case against ownership restrictions is the case for the free market."
It's a myth, unless you're arguing for the removal of the Western pollution, safety and worker standards enslaving North American business owners from competing 'freely' with the bulk of foreign money. Kudos then for having the intestinal fortitude to sacrifice your descendants for property values and principle. Though it does raise the question why foreigners would still want to come here once that process is complete.
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August 22nd, 2011 at 9:57 pm 46
And how much in opportunity cost?
———————————–
nuxfan Says:
I don’t know – I’m an owner, I currently pay 0% of my income for housing, and 4% for taxes/ongoing maintenance/strata/utilities combined. I don’t envy you.
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August 22nd, 2011 at 10:16 pm 47
@nuxfan: I don't know; seeem's like a lot (4%) for a pad in a mobile home park?
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August 22nd, 2011 at 11:37 pm 48
@Van MD: I think part of this dropoff in retail/car sales is due to a decline in in-migration from the past few quarters.
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August 23rd, 2011 at 12:34 am 49
@DaMann
Kits/West Point Grey – no HAM? Too English? Too White maybe?
Well, Herr Professurr Henry Yu thinks so too!
http://henryyu.blogspot.com/2010/09/whats-wrong-w…
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August 23rd, 2011 at 12:41 am 50
So what has done better over various time horizons, Dow, gold, or real estate? See my analysis in the forum
The results are interesting.
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August 23rd, 2011 at 12:45 am 51
It seems that the Wall Street Journal has been reading CanuckDownUnder's posts:
http://tinyurl.com/3ky3dwr
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August 23rd, 2011 at 1:00 am 52
17% of detached houses sold at or above asking in the last 14 days. In May it was 35%. During the 2008 downturn it ranged from 5-10%. Are we on our way there again?
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August 23rd, 2011 at 1:21 am 53
@Anonymous: The professor seems offended that there are still "white" people in Vancouver. Maybe we should have a law to ensure a certain minimum percentage of Chinese people on every city block.
OTOH would he go to Richmond and complain about how Chinese it is?
As for newsrooms, how many non-Chinese work for the Chinese-language newspapers? I notice many businesses that only hire from certain ethnic groups, and that is a great failure of this city. These solitudes caused by language barriers and ethnic bias.
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August 23rd, 2011 at 1:25 am 54
@Patiently Waiting: "how many non-Chinese work for the Chinese-language newspapers?"
Even better question: how many second and third generation ethnic Chinese work at Chinese-language newspapers? Just saying, compared to many countries, Canada isn't doing a half-bad job with integration.
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August 23rd, 2011 at 1:32 am 55
Just when you thought Okanagan RE market is over, here comes the Chinese to the rescue! Ok well, maybe planeloads of Chinese aren't going to start buying properties on first sight just yet, but you know it is just going to be a matter of time.
http://www.vancouversun.com/life/Chinese+buyers+t…
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August 23rd, 2011 at 1:38 am 56
@space889: Just get "C the Good" to fly over the Okanagan with a brunch of RE agents and the 6 o'clock news. That will get it on fire.
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August 23rd, 2011 at 1:57 am 57
@Anonymous:
@DaMann
"Kits/West Point Grey – no HAM? Too English? Too White maybe?
Well, Herr Professurr Henry Yu thinks so too!
http://henryyu.blogspot.com/20…..-kits.html&quo…
What a disgusting article! Kits is too white therefore it's Baaaaaad. So it's ok to have an entire suburb predominantly Asian but not a small area that has European roots going back a long time. You can have areas all over the lower mainland with huge pockets of one particular culture ( say Chinese or Indian) but to have a whole mix of nasty oppressive whities is totally wrong. And why is it that whites are just whites? Kits is rather diverse with Greek , German, English, East European, but yet it's just a nasty racist area of white scum. Bloody hell this city is fucked. Being Caucasian is a bloody crime these days.
My comment about "parts" of Point Grey being predominantly English ( as well as Greek in other parts of Kits) was to basically say it's not the HAM that is driving up the prices. It's just the bubble itself.
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August 23rd, 2011 at 2:10 am 58
Are you guys seriously getting your panties in a knot over a blog post from November 2010?
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August 23rd, 2011 at 2:14 am 59
@jesse: Hi, I can't download the PDF file? Say no permission to download?
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August 23rd, 2011 at 2:19 am 60
"Kitsilano Homes Sales Nose Dive" – Aug 22 via Yattermatters
June 22 – July 21
Listings: 59
Sales: 15
July 22 – Aug 21
Listings: 47
Sales: 3
http://www.yattermatters.com/2011/08/kitsilano-no…
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August 23rd, 2011 at 2:19 am 61
@N: Well the guy being a UBC prof, which presumably means he has influennce over formative young minds under his care, having such an attitude is kind of concering. I mean it's one thing if the current residents refuse to sell to Asian based on some racism believes or something like that. But have he ever thought maybe the majority of Asian just don't want to buy in that area? Regardless, I find some of his views to be at least a bit extreme if not a bit racist. Frankly I'm not even sure why he feels so strongly about lack of Asians in Kits in the first place.
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August 23rd, 2011 at 2:27 am 62
space889: I added mediafire links in the post.
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August 23rd, 2011 at 2:28 am 63
@space889:
Yeah, the guys sounds racist in an affirmative action kind of way. He's a looser. Who cares?
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August 23rd, 2011 at 2:35 am 64
@space889: Not to mention that his bigotted thoughts were actually published in the Vancouver Sun and Macleans.
I'm not saying its the case, but the tone of that article suggests cultural imperialism. I've heard such thoughts defended in the past by comparing it to what the Europeans did to Natives. What happened to the Natives was horribly wrong, and its just plain scary to use that tragic history to justify new population displacements. What are such arguments trying to suggest?
What is going on in the head of a University professor to make him write an article like this? All self-identified Canadians, of all ethnicities, should be concerned. What is really going on here?
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August 23rd, 2011 at 2:37 am 65
@space889:
Yeah, the guys sounds racist in an affirmative action kind of way. He’s a looser. Who cares?
_________
N Says:
August 23rd, 2011 at 10:10 am
Are you guys seriously getting your panties in a knot over a blog post from November 2010?
______
That's right – lets only focus on racist views in the present and not the past.
Lol – way to be apologists.
Imagine dismissing the racist views of someone by saying, "who cares" or "that happened a year ago."
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August 23rd, 2011 at 2:48 am 66
@N: No its worse that racist in an "affirmative action" way. He is part of a dominant ethnic group in the Lower Mainland, so its kind of the opposite. No "white" Professor could get away with writing an equivalent article in the mainstream press, for very good reasons. Same should go for Chinese. Having such power should make you more accountable.
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August 23rd, 2011 at 3:01 am 67
@63 N Says: "Yeah, the guys sounds racist in an affirmative action kind of way."
He sounds like an idiot in an affirmative action kind of way. FTFA: "..the tenor of civic debate in this city is…in a multiplicity of Asian languages—Mandarin, Cantonese, Punjabi, Tagalog…" implies it's a single harmonious interaction between groups who hold hands and sing kumbaya back in the lands of origin instead of the usual, non-communicative relationship between communities that never much cottoned to each other. I stopped reading at "..the deep colonial past of “British” Columbia..", as if all Caucasians are by default of British descent, share British views, or that modern concepts of democracy aren't universal but 'British'. Maybe all Europeans look alike to him.
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August 23rd, 2011 at 3:04 am 68
Van MD
Re: Retail sales.
I was thinking about this just the other day I was taking a stroll along West 4th (between Burrard and Arbutus) and noticed the many empty storefronts with a "for lease" sign.
Vancouverites have hit the wall. They have too much debt, mortgage and consumer debt, they are not making any more money and the cost of everything, that matters, continues to increase.
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August 23rd, 2011 at 3:19 am 69
@Manna from heaven: "They have too much debt, mortgage and consumer debt"
Yes that's a big contributor I'm sure, but I think the lackluster population growth has some hand in it too. Both aren't good for housing in the long run.
It's worth remembering that outside the near-burbs of Vancouver that dominate the local and national headlines, an area where 3/4ths of British Columbians live, house price appreciation is tepid if not negative.
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August 23rd, 2011 at 3:26 am 70
@Patiently Waiting:
Beh, race is boring. Let's talk about real estate.
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August 23rd, 2011 at 4:10 am 71
@N:
So is RE these days
The kits slowdown is interesting though. Where are all the rich people flocking to the westside?
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August 23rd, 2011 at 4:44 am 72
RBC just upped mortgage rates, a tiny 0.2% but a movement up nonetheless:
http://www.financialpost.com/news/raising+some+va…
So much for 2 years of frozen rates…
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August 23rd, 2011 at 5:29 am 73
Has Professurr Henry Yu said anything about hospice maybe? What an idiot. He should take a stroll through the West End, not much Chinese there too and maybe write an essay about it.
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August 23rd, 2011 at 5:49 am 74
@Manna from Heaven
The turnover on W4th is to be expected though. Not many shops can survive with the average lease being $65+ per sq. ft.
$8000 rent for a shoe box in the wall. Rain or shine, the stores gotta put aside $266 a day just for rent. Now throw in wages, licenses, insurance, utilities and maintenance (triple net), that pretty much ensures ma and pa joints never open up in the area.
Commercial tenancy law is also not as forgiving or protective to the tenants as the Residential tenancy laws are too.
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August 23rd, 2011 at 5:52 am 75
@ logic: "And how much in opportunity cost?"
I don't know – whats the lost opportunity cost on spending 10-11% of your current annual salary on housing vs 4%? For me that difference is about 15K per year – money I'd rather be investing in today's opportune markets.
I bought my place about 10 years ago, and its worth nearly 3x now – I'd say the opportunity was well worth it. At original cost its about 10% of my current net worth and its value doesn't factor into my retirement plans, so even if it goes back to 2000 cost, I don't really care – so long as it fulfills its one and only purpose, to provide me a nearly-free place to live.
@ strataman: "I don’t know; seeem’s like a lot (4%) for a pad in a mobile home park?"
oh, snap mamma!
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August 23rd, 2011 at 6:00 am 76
@myself
$57.5 per sq foot for the building across from pompodour's on W4th near arbutus.
2492 Sq. Ft available immediately. A little under $12,000 in rent a month.
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August 23rd, 2011 at 6:46 am 77
@jesse: Got them now. Thanks.
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August 23rd, 2011 at 6:52 am 78
@nuxfan: Notice the keyword that you bought 10 years ago and it's now worth triple what you bought it for. If you were to buy this house of yours today, would you be able to spend just 4% or even 20% of your income on it, even with today's low interest rate?
I bought my house 10 years ago too and I only need to put aside 10% of my income for it per month. But that doesn't justify buying the same house today, nor does it mean I'm likley to come out ahead even after paying off the mortgage ASAP.
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August 23rd, 2011 at 6:53 am 79
@SourLemon: Some idiot will come along and note that this is cheap relative to Manhattan or London, not understanding (or willfully ignoring) that the purchasing power of the average Vancouverite pales in comparison to the average New Yorker or Londoner.
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August 23rd, 2011 at 6:54 am 80
@SourLemon: Ouch! That's some crazy expensive rent and it's a triple net too right? No wonder things are much expensive here.
I wonder how much the commercial rent will fall after the housing bust is over.
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August 23rd, 2011 at 7:08 am 81
@onenangryslav2: Never mind the pop density is lower in that part of the city so less volume on top of limited purchasing power
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August 23rd, 2011 at 7:15 am 82
@ strataman: “I don’t know; seeem’s like a lot (4%) for a pad in a mobile home park?”
oh, snap mamma!
_____
Oh snap is right…
Too many "millionaire" homeowners spending nothing per month on their shelter…and having millions in the market as well…
I call BS on this idiot..
Of course, tis the BC dream of running a grow-op to fund your lifestyle…
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August 23rd, 2011 at 8:27 am 83
I've lived in Kits for over 20 years and I've never seen so many for lease signs….sad really.
Went for dinner at Refuel two Saturdays ago and was the only table in there (we left at 7:20), hopefully for them it picked up, they had at least 6 staff members milling around.
Some spaces have had lease signs up for over 8 months now with no takers, that has to be costing the owners a bundle.
I'm happy to hear that Burgoo is going in where that weird Presto Cuccini place was besides Starbucks though:)
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August 23rd, 2011 at 8:29 am 84
@space889: "I bought my house 10 years ago too and I only need to put aside 10% of my income for it per month"
this was actually my original point – there are a lot of owners out there that actually own their homes (or pay rent-like mortgages), and are not envious of people that rent. Not every homeowner is going to be underwater/crying in their boots/unable to make payments/be forced to sell when prices drop, thus flooding the market with steadily decreasing housing.
@JP Chase: "I call BS on this idiot.."
Whatever dude – if it makes you feel better to not believe that someone in the LM can own their home outright and have an investment portfolio on the side, then call BS. I know what I have, and I know I'm not the only one that has it.
And I don't spend "nothing" per month on shelter, I spend 4% of my income. Shelter is never free.
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August 23rd, 2011 at 8:58 am 85
@vangrl: I think that low patronage may have more to do with the food…
I have been to Fuel/Refuel a few times and nothing great. A little pricey for what it is also.
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August 23rd, 2011 at 9:44 am 86
New Listings 211
Price Changes 85
Sold Listings 70
TI:16478
http://www.laurenandpaul.ca
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August 23rd, 2011 at 9:49 am 87
@nuxfan:
"this was actually my original point – there are a lot of owners out there that actually own their homes"
Yup, I once met a senior who owned a nice bungalow on the Westside, where they'd live all their life. They paid less than $10K for it. You'd hope that many people who bought their homes over 20 years ago will be close to having it paid off in full by now.
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August 23rd, 2011 at 10:00 am 88
Vancouver to China by rail?
http://www.worldarchitecturenews.com/index.php?fu…
"It was first mooted as long ago 1905 by Tsar Nicholas 11, but this week the Kremlin finally gave the green light for a 65 mile (106 km) tunnel linking Asia and North America, taking the epic project a step nearer reality. "
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August 23rd, 2011 at 10:16 am 89
Anyone catch the CBC Radio 1 On The Coast interview with prof Pavlov on renting versus owning?
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August 23rd, 2011 at 10:17 am 90
@nuxfan:
I bought my place about 10 years ago, and its worth nearly 3x now
@space889:
I bought my house 10 years ago too and I only need to put aside 10% of my income for it per month.
I'm wondering why neither of you are smart enough to take advantage of these huge profits, dump an incredibly overpriced asset and rent considering how lucky you were to time the real estate market oh so perfectly.
You honestly don't care if a big chunk of your gains are wiped out? Too lazy? Too attached to a bunch of plywood and dirt because it's "home"?
Seriously, I'm stupefied. Please explain.
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August 23rd, 2011 at 10:35 am 91
@vangrl:
I’ve lived in Kits for over 20 years and I’ve never seen so many for lease signs….sad really.
Get used to it, what used to be abnormal is becoming commonplace. It used to be unheard of to have retail vacancies in places like Kits, Chinatown and Robson St. but now they're rampant.
Around this time last year I saved a snapshot of commercial/retail space from the MLS website and there were 252 vacancies in the greater Vancouver area http://www.icx.ca/map.aspx?vs=VERetail&veZoom…
Today there are 285.
As you can see the economy is recovering.
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August 23rd, 2011 at 10:38 am 92
@Best place on meth:
The 'own now or be priced out forever' plagues both potential buyers and existing owners. They fear that prices will go to the moon and if they don't have ownership now, they can never do so tomorrow.
Unbelievable how many lottery winners there are in Vancouver that refuses to cash in until they miss the expiry date on the ticket… coming up soon
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August 23rd, 2011 at 11:18 am 93
@BPOM: "You honestly don’t care if a big chunk of your gains are wiped out? Too lazy? Too attached to a bunch of plywood and dirt because it’s “home”?"
I didn't time the market in any way – in 2000 I got married, and my wife and I decided it was time to get something more than our apartment. We were making just under 100K combined back then, and bought what we could afford. In retrospect, very good timing, but timing the market, never.
Truthfully, I don't care. I like my home, I like where it is, it suits me and my lifestyle – so yes, I guess you could say I'm attached to it. I'm 40 years old, so I'll probably be here another 10 or 15 years until I stop working, and worry about the next phase of life then – maybe its here, maybe its not. While I don't believe that housing will keep going up like it has – I'm pretty bearish on Vancouver real estate – I don't think it will go lower than what I paid for it either. I don't really care until its time to sell it.
@specialfx3000: The only people that think of Vancouver homes as "lottery tickets ready to be cashed in" seem to be the ones that don't own them, or the ones that merely flip them. To the majority of owners, they're just "homes".
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August 23rd, 2011 at 11:45 am 94
Unsurprisingly, BMO follows suit, ups variable mortgage rate.
http://www.ctv.ca/CTVNews/Canada/20110823/royal-b…
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August 23rd, 2011 at 12:19 pm 95
@nuxfan:
Good for you for being attached to your 'house'. Make no mistake, owning or renting makes no difference in defining your 'home'.
The point is, one can 'cash' in for huge gains and invest the winnings and rent an equivalent house for less and still call it a home.
There is a huge opportunity cost in sitting on hundreds of thousands of dollar paper gains. (some even are sitting on millions)
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August 23rd, 2011 at 12:56 pm 96
@Van MD: "ups variable mortgage rate"
Why are they doing this? Prime corporate paper hasn't budged relative to the overnight rate. Either the MBS market is starting to demand more risk from smaller mortgage originators or Ottawa is turning the screws.
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August 23rd, 2011 at 1:04 pm 97
@specialfx3000:
"Unbelievable how many lottery winners there are in Vancouver that refuses to cash in until they miss the expiry date on the ticket"
Some of them also won't care what the current value of their house is, as their sense of "home" is so strong that they won't consider selling. For example, the senior I mentioned who bought their bungalow for $10K – they could have sold it for $800K. Did they have any intention of doing so? No. Because it's where they live.
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August 23rd, 2011 at 1:15 pm 98
@specialfx3000:
So many accidental and potential millionaires in Vancouver and yet they don't know what to do next.
This is why certain types of people are just not meant to have money.
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August 23rd, 2011 at 2:18 pm 99
@specialfx3000: "The point is, one can ‘cash’ in for huge gains and invest the winnings and rent an equivalent house for less and still call it a home."
Sure – I've had homes that I've rented before. I like the home that I own now. The fact that its worth quite a bit more than it was 10 years ago is irrelevant to me – its a good place to be, it costs me nothing other than regular maintenance, taxes, and utilities to live there – all of which are more than covered by income I make from my other non-RE investments anyway.
I don't fault anyone for renting or owning, both make sense to different people in different circumstances. To each their own.
"There is a huge opportunity cost in sitting on hundreds of thousands of dollar paper gains. (some even are sitting on millions)"
Equity in a home can be utilized without getting rid of the home. In the last 3 years I have borrowed twice against my home to invest – had I not had that equity I would have had to liquidate something else in order to come up with that investment, and for my first loan in April 2009 that liquidation would have been at a substantial loss or would have had to use cash that I didn't want to use.
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August 23rd, 2011 at 2:27 pm 100
@vangrl: Adding to the vacancy woes are new supply and landlords with a high cost base, who try to pass higher rents down. For most of the 2000s, landlords could raise rents on renewals and be assured of a deal. These days, if the tenant's business is marginal, they will either fold or find cheaper digs on the other side of town, before paying a higher base rent.
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August 23rd, 2011 at 2:37 pm 101
Equity in a home can be utilized without getting rid of the home. In the last 3 years I have borrowed twice against my home to invest – had I not had that equity I would have had to liquidate something else in order to come up with that investment, and for my first loan in April 2009 that liquidation would have been at a substantial loss or would have had to use cash that I didn’t want to use.
_____________
Ahhh…not having to pay for a house because you bought just before the market took off and you invested in the stock market (April 2009) just before it took off as well…
Clearly you have a horseshoe up your ass or you are the best market timer ever….or a troll…
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August 23rd, 2011 at 2:55 pm 102
@Best place on meth: I bought with my family which has traditional Chinese view about land. Add in the non-stop appreciation since we first came here, it's impossible to convince them to sell. You can't sell a fraction of a house in Vancouver.
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August 23rd, 2011 at 3:17 pm 103
"You can’t sell a fraction of a house in Vancouver."
Sure, tell them to buy you out at current market value.
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August 23rd, 2011 at 3:20 pm 104
@TNT: "Clearly you have a horseshoe up your ass or you are the best market timer ever….or a troll…"
I was clear that I didn't time the market for my home, I just bought when I could do so – the fact that it was just before the market rise is pure luck, and I don't deny it.
As for the market downturn in early 2009… I do know a thing or two about investing. It was a no-brainer to invest in prefs and common shares with dividends approaching 10% while borrowing costs were far from that. I took out another loan in early 2010 to load up on more.
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August 23rd, 2011 at 3:31 pm 105
@nuxfan: ……I don’t think it will go lower than what I paid for it either. I don’t really care until its time to sell it……
Oh, the irony!
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August 23rd, 2011 at 6:11 pm 106
[...] “Tell me, how do people survive? We are in Victoria – our family salary is above average – we have 4 kids that don’t do a whole bunch of activities. We don’t travel, don’t eat out. We just can’t seem to make ends meet. So, how do people in Vancouver do it, I wonder, if so much of their income is going to RE?” – Victoria at vancouvercondo.info 22 Aug 2011 7:42am [...]
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August 24th, 2011 at 5:49 am 107
[...] “In 2000 I got married, and my wife and I decided it was time to get something more than our apartment. We were making just under 100K combined back then, and bought what we could afford. In retrospect, very good timing, but I didn’t time the market in any way. Truthfully, I don’t care. I like my home, I like where it is, it suits me and my lifestyle – so yes, I guess you could say I’m attached to it. I’m 40 years old, so I’ll probably be here another 10 or 15 years until I stop working, and worry about the next phase of life then – maybe its here, maybe its not. While I don’t believe that housing will keep going up like it has – I’m pretty bearish on Vancouver real estate – I don’t think it will go lower than what I paid for it either. I don’t really care until its time to sell it. The only people that think of Vancouver homes as “lottery tickets ready to be cashed in” seem to be the ones that don’t own them, or the ones that merely flip them. To the majority of owners, they’re just “homes”.” – nuxfan at vancouvercondo.info 23 Aug 2011 7:18pm [...]
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August 24th, 2011 at 7:34 am 108
[...] “In 2000 I got married, and my wife and I decided it was time to get something more than our apartment. We were making just under 100K combined back then, and bought what we could afford. In retrospect, very good timing, but I didn’t time the market in any way. Truthfully, I don’t care. I like my home, I like where it is, it suits me and my lifestyle – so yes, I guess you could say I’m attached to it. I’m 40 years old, so I’ll probably be here another 10 or 15 years until I stop working, and worry about the next phase of life then – maybe its here, maybe its not. While I don’t believe that housing will keep going up like it has – I’m pretty bearish on Vancouver real estate – I don’t think it will go lower than what I paid for it either. I don’t really care until its time to sell it. The only people that think of Vancouver homes as “lottery tickets ready to be cashed in” seem to be the ones that don’t own them, or the ones that merely flip them. To the majority of owners, they’re just “homes”.” – nuxfan at vancouvercondo.info 23 Aug 2011 7:18pm [...]
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August 24th, 2011 at 7:37 am 109
[...] “In 2000 I got married, and my wife and I decided it was time to get something more than our apartment. We were making just under 100K combined back then, and bought what we could afford. In retrospect, very good timing, but I didn’t time the market in any way. Truthfully, I don’t care. I like my home, I like where it is, it suits me and my lifestyle – so yes, I guess you could say I’m attached to it. I’m 40 years old, so I’ll probably be here another 10 or 15 years until I stop working, and worry about the next phase of life then – maybe its here, maybe its not. While I don’t believe that housing will keep going up like it has – I’m pretty bearish on Vancouver real estate – I don’t think it will go lower than what I paid for it either. I don’t really care until its time to sell it. The only people that think of Vancouver homes as “lottery tickets ready to be cashed in” seem to be the ones that don’t own them, or the ones that merely flip them. To the majority of owners, they’re just “homes”.” – nuxfan at vancouvercondo.info 23 Aug 2011 7:18pm [...]
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August 26th, 2011 at 5:38 am 110
[...] “Well in my neighbourhood, Point Grey, I would say that most of the people I know have lived here a long time and bought a long time ago. So in a sense the prices are sky high because a few rich people, HAM, overextended hopefuls, very cheap money and what have you have pushed the average prices up. These people around me are NOT millionaires by income, they just happen to now own a home that is worth millions that they bought for a fraction of the cost back when. So what I’m saying is that the percentage of household income it takes to buy a property now is just the metric used. What is the % of all properties in Vancouver that is sold every year? 2-3%? I don’t know the exact numbers but there are a lot of houses that are not being bought and sold, they have been lived in for years and bought on the cheap years ago.” – DaMann at vancouvercondo.info 22 Aug 2011 8:43pm [...]
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August 26th, 2011 at 12:08 pm 111
[...] jobs Loans (gifts) from parents Of course, the above all come with additional stress.” [from Anonymous, at vancouvercondo.info 22 Aug 2011 8:21am] Share:TwitterFacebookRedditStumbleUponDiggLike this:LikeBe the first to like this post. This [...]
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