The Middle Class is Priced Out

The CBC has an article looking at the situation for middle-class home shoppers in Vancouver BC.  They’ve noticed that incomes have dropped since the 70s while prices have risen.

So if you’re middle class in Vancouver you’re either priced out forever or something is going to change.

From that article:

Lawyer Nathan Hume and health researcher Angie Chan live with their two young children in a rented two-bedroom apartment in Vancouver.

With two good jobs, they had hoped home ownership in the city would be within their reach. But sky-high prices in Vancouver have left them without any options.

“We have a number of friends who are in the same situation as us — highly educated, they’ve got good jobs, they have young kids, and they’ve all left the city,” said Chan.

Hume says it is likely they could get a mortgage to buy something, but they don’t think that’s smart, when it would mean foregoing savings for retirement and their childrens’ education.

Any readers here have friends who have moved away from Vancouver simply do to house price dynamics?  Any of you considering a move away based purely on the cost of housing?
Read the full article at the CBC web site.
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Whybuywhenucanrent
Guest
Whybuywhenucanrent
4 years 8 months ago

My wife and I make approx $250K between us. We can’t buy nor do we want to at these crazy prices. We are renting a $2.4M house on the west side for 1/3 the monthly payment that a mortgage would be. No maintenance, no stress, we are very happy.

Not sure why everyone is so obsessed with owning, it is overrated.

Anonymous
Guest
Anonymous
4 years 8 months ago

@Whybuywhenucanrent:

You can’t buy with $250k/yr?

BS.

You choose not to, but that’s different from can’t.

Whybuywhenucanrent
Guest
Whybuywhenucanrent
4 years 8 months ago

We can’t buy on the west side which is where we want to live. Do the math. We could buy a $1M shithole somewhere over a bridge.

RentersRant
Guest
RentersRant
4 years 8 months ago
Here is the thing, this is going to sound harsh, but I am AMAZED at how many people I meet that don’t seem to have passed business math (future value calculations) 099. The very insightful key in this article is: “when it would mean foregoing savings for retirement and their childrens’ education.” This is uniquely wise! Could they outlay the cash – sure. But could they wisely AFFORD it, no. And I know $250k income sounds extremely high but if you don’t have a government public service pension that guarantees 65% or more indexed from the day you retire (TEACHERS!!!)you… Read more »
ReadyToPop
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ReadyToPop
4 years 8 months ago

So if you’re middle class in Vancouver you’re either priced out forever or something is going to change.

Something is going to change. The middle class is the bulk of the market.

Anonymous
Guest
Anonymous
4 years 8 months ago

i left 5 years ago after (a) wanting to broaden my personal and professional experience overseas and (b) being totally frustrated in feeling hopeless in trying to save money fast enough to buy a single family home somewhere within reasonable (45min) driving time of the city and have a mortgage we can manage. we are a family of 5 looking for single family north van on a budget which can afford 750. figure we’re short 300-400k. will stay overseas for another 3-4 years where we can save and see the world.

VMD
Member
4 years 8 months ago

[Canadian housing bubble enters world stage, again]
Marketwatch: March 14, 2012, 12:02 a.m

“Canada’s housing market flirts with bubble”
After a brief dip, home prices have shot up; incomes haven’t kept up

Rising home prices over the past decade, combined with mounting household debts, have fed concerns that Canada’s housing market has formed a bubble that’s about to burst.
http://www.marketwatch.com/story/canadas-housing-market-flirts-with-bubble-2012-03-14?pagenumber=1

fixie guy
Guest
fixie guy
4 years 8 months ago
One of my field’s top postings recently became available so now I’m typing this from a mid-town Toronto office. My income is moderately dependent on the general state of the economy and I make good money, a deadly combination in Vancouver’s near future. It became obvious last year the situation is deteriorated well past any question of competence or tenure. When it hits the fan Vancouver businesses will be forced to do anything possible to stay solvent. Now I’m renting a QUIET detached in better shape and double the floor space of my Van wood frame townhouse, for $100 more… Read more »
yvr2zrh
Member
4 years 8 months ago

Well – interview with Swiss Company was earlier this week. Likely departure in Summer. Work at the top of my field, about 15 years experience including 10 internationally. Just not sure I have the patience to wait out the house price / income adjustment. So- Could be gone by mid -summer. I would say that the primary reason for leaving is house prices. Secondary is that income and lifestyle is much better as well as professional opportunities.

patriotz
Member
4 years 8 months ago

@RentersRant:
“Harsh I know, but my kids (who will be brilliant thanks to my wife genes) will need someone to pour their Starbucks. ”

That would be the kids who spent a fortune of someone else’s money (either parents’ or borrowed) to get a useless liberal arts degree. Meanwhile the kids who learned a trade which has been in chronic shortage for decades will be cashing in.

Sure going to university is worth the expense if you learn a profession which makes real money, but seldom otherwise.

jesse
Member
4 years 8 months ago

@patriotz: Doris Dunget aka Tanta had a Masters in English. She figured out the finance stuff later.

vangrl
Member
vangrl
4 years 8 months ago

All these stories of Canadians being priced out.

the young couple in the video are smart and won’t buy because they know the fundamentals are out of whack.

If all non-owners wanting a house just refuse to buy, prices would decline soooo fast.

just don’t buy, put on a buyers strike….so simple.

VHB
Member
VHB
4 years 8 months ago

Mar-2012
Total days 22
Days elapsed so far 9
Weekends / holidays 4
Days missing 0
Days remaining 13
7 Day Moving Average: Sales 112
7 Day Moving Average: Listings 264
SALES
Sales so far 1075
Projection for rest of month (using 7day MA) 1451
Projected month end total 2526 +/- 485
NEW LISTINGS
Listings so far 2522
Projection for rest of month (using 7day MA) 3437
Projected month end total 5959 +/- 404
Sell-list so far 42.6%
Projected month-end sell-list 42.4%
MONTHS OF INVENTORY
Inventory as of March 13, 2012 15640
MoI at this sales pace 6.19

Not much of a name...
Member
Not much of a name...
4 years 8 months ago

@VHB: Another option for the computation of MOI is to use sales from the previous 30 days and the current inventory.

Best place on meth
Guest
Best place on meth
4 years 8 months ago

@vangrl:

>>>just don’t buy, put on a buyers strike….so simple<<<

It's simple only if you have a city that's NOT full of pliable, easily brainwashed retards.

This is not the case in Vancouver where the dumbest people on earth just can't say no.

In this city a crash can only happen when we literally run out of people who can qualify for a mortgage, as is happening right now.

logic
Guest
logic
4 years 8 months ago

@patriotz:
to get a useless liberal arts degree

I like what you usually have to say P, but you are talking crap here.

I have a “useless liberal arts degree” and earn 6 figures. So do lots of people I know.
An Arts degree is no more useless than any other non-professional program.

jumpin in
Guest
jumpin in
4 years 8 months ago
We are making $200,000 and rent a 1.5 million house for the cost of the interests the bank would charge us to buy it. Besides, we would never buy it, because the value is 95% in the land, i.e. the building has faults that could cost tons of money 20 years down the road. I have a feeling this year our rent will barely cover losses due to inflation. We often consider leaving Vancouver, but somehow we believe this situation will reverse to normal, eventually, so we are betting it is worth staying. We know several families with less income… Read more »
Bailing in BC
Guest
Bailing in BC
4 years 8 months ago

@patriotz:

My brother has a masters degree in Philosophy and makes more money than god restructuring government private enterprises. The fianace stuff you can pick up if you’re smart.

Bailing in BC
Guest
Bailing in BC
4 years 8 months ago

Sorry “finance”. Brother is the smart one, I am the “illiterate” one 😉

patriotz
Member
4 years 8 months ago

@jumpin in:
“For buying, independent townhouses (i.e. no strata) like in Montreal would be great too.”

Ottawa has lots of them too (actually separately titled duplexes for the most part) but to buy something like the place I rent for $1700/month would cost over $400K. So I’ll keep renting. Note this is in a trendy area, the burbs are less bubbly. But I like trendy.

patriotz
Member
4 years 8 months ago

@Bailing in BC:
So what is the economic value of his philosophy degree? How much could he make being a philosopher? Which was my point.

VHB
Member
VHB
4 years 8 months ago

@Not much of a name…: Hi. the intent here is to give a spot estimate of the MoI *now*, not at the end of the month. I use a 7 day moving average to get rid of some of the day-to-day volatility. I could use a 30 day MA as you suggest, but that would mean losing some of the higher frequency week-to-week trends.

Best place on meth
Guest
Best place on meth
4 years 8 months ago

Anyone who’s been following the bond market has noticed the slow but steady climb in the 5 year rate from its Christmas low of 1.17% to todays 1.65% – an increase of 48 bp.

http://www.bloomberg.com/quote/GCAN5YR:IND/chart/

jesse
Member
4 years 8 months ago

@patriotz: It’s the act of learning critical thought, writing, and thorough research that is being taught. The subject matter is less relevant.

If you mean many people don’t “get” the endgame of university education and end up prepared for little more than vocational pursuits (and there’s nothing wrong with that), I can’t argue too much that they didn’t properly leverage their university education.

chilled
Member
chilled
4 years 8 months ago

I love these money topics, apparently the internet is rife with smart, extremely well paid world travelers.

For the record I make a million dollars a year, travel the world as a high paid consultant, my wife is a supermodel and I have 6 masters degree’s. There, I got that cleared up.

Anyway, the Realturds® have now decided fear mongering is a valid marketing strategy;

http://www.theglobeandmail.com/report-on-business/economy/housing/online-house-listings-expose-sellers-to-assault-break-ins-treb-says/article2368525/

Anonymous
Guest
Anonymous
4 years 8 months ago

In the long run, people with liberal arts degree tend to end up earning more money than those who are in trades. Well at least until recent years. But with this current economy that is much more short-sighted, globalized, polarized and out-sourced… I am not so sure anymore.

Maybe everybody should become a plumber and flip houses on the side. It would be sad if the Canadian society really came to this…

Yaya
Guest
Yaya
4 years 8 months ago
@chilled: OMFG! “Easy access to information online is a huge safety issue,” said Von Palmer, the real estate board’s chief privacy officer. “There is a real possibility of break-ins and assaults; you only have to read the headlines to imagine what might happen. You hear stories about realtors getting attacked and killed. Can you imagine if we put that information out there about consumers? You can only imagine the headlines.” TRANSLATION “You got a real nice place here mac, it’d be a shame if anything were to happen to it. We can protect you for a small fee, make sure… Read more »
Yaya
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Yaya
4 years 8 months ago

@jesse: And why is it that the people who actually study finance so often get the big picture stuff so horribly wrong, ie: Bear Stearns, etc.

procrustes
Guest
procrustes
4 years 8 months ago

@ReadyToPop:
“Something is going to change. The middle class is the bulk of the market.”

Sadly, it looks like this isn’t true.

http://www.huffingtonpost.ca/2012/03/12/vancouver-income-inequality-study_n_1334796.html?ref=canada

WFT?
Guest
WFT?
4 years 8 months ago

Has the 5 year Canadian Government bond finally bounced of the bottom? If so, it is all down hill from here for the Canadian housing market.

http://www.bloomberg.com/quote/GCAN5YR:IND/chart

yossarian
Guest
yossarian
4 years 8 months ago

@procrustes: From your link:
Racial polarization has also deepened, as neighbourhoods where white and native-born residents remained the majority enjoyed the lion’s share of the income gains, while areas with the greatest share of visible minorities and immigrants were much more likely to see their fortunes decline.

In other words, just because there are more minorities in Vancouver doesn’t mean they have a lot of money. Stop blaming minorities for your housing bubble when locals are to blame.

Best place on meth
Guest
Best place on meth
4 years 8 months ago

@procrustes:

It’s not surprising to see Vancouver is becoming ghettoized, but this statement flies in the faces of the worthless cheerleaders who always say that immigration will support high real estate prices:

He says immigration also appears to be part of the story, noting that “new poverty is very significantly tied up with recent immigrants

Maybe in the future there will be plans to build a Great Wall around Dunbar.

patriotz
Member
4 years 8 months ago

@Anonymous:
“In the long run, people with liberal arts degree tend to end up earning more money than those who are in trades.”

True, but that does not mean that the same person will get a higher net economic return from a BA than from learning a trade. Especially when you factor in the cost of the education and take its present value going forward.

Remember the statistics look backward and university costs used to be a lot cheaper than they are now, plus fewer people had university degrees in the past which made them more valuable.

jesse
Member
4 years 8 months ago

@Yaya: “the people who actually study finance so often get the big picture stuff so horribly wrong, ie: Bear Stearns, etc.”

They got it wrong, but so too did their shareholders and customers. Sounds like they were made for each other. Disclosure: long BS

Anonymouse
Guest
Anonymouse
4 years 8 months ago

@chilled:

Why should the seller’s phone number be included in the listing?

jesse
Member
4 years 8 months ago

@yossarian: ” just because there are more minorities in Vancouver doesn’t mean they have a lot of money”

True dat, also works both ways, that it’s becoming hard for me to malign an immigrant who happens to be richer than his rich neighbours. The only thing I can do is assume his money is “dirty”. If it weren’t that would cause my moral compass to spin.

chilled
Member
chilled
4 years 8 months ago

@yossarian:

“In other words, just because there are more minorities in Vancouver doesn’t mean they have a lot of money. Stop blaming minorities for your housing bubble when locals are to blame.”

Please stop this racial stereotyping. We all know the Caucasian minority is not to blame.

fixie guy
Guest
fixie guy
4 years 8 months ago

@34 jesse: I hope that post was meant in irony and you know it’s pure crap. If not, please, please read up on the role of ratings agencies in the market’s collapse. Toxic assets were so deeply buried beneath arcane financial instruments even their originators can’t peel out the ‘real’ worth.

N
Guest
N
4 years 8 months ago
@patriotz: “Sure going to university is worth the expense if you learn a profession which makes real money, but seldom otherwise.” I don’t agree. I have a degree in English lit. — not exactly the key to a profession that makes real money, but that degree has been invaluable in getting visas and jobs on countless occasions. A degree allows you to be considered as a professional in many situations beyond a narrowly defined chosen profession. It is akin to a type of passport to travel in the professional world. That said, I will note that, at least outside of… Read more »
Navin R. Johnson
Guest
Navin R. Johnson
4 years 8 months ago

Much of what used to be considered middle class have fallen into the lower class as far as income to the cost of living.

There is only one thing that will change everything….and that is deflation and hurt for a few years….a freaking cleansing. This doesn’t count for just housing….everything

jesse
Member
4 years 8 months ago
jumpin in
Guest
jumpin in
4 years 8 months ago

@chilled
“For the record I make a million dollars a year, travel the world as a high paid consultant, my wife is a supermodel and I have 6 masters degree’s. ”

I do not get your point… are you telling us that here bloggers are lying?
This blog is not Second Life…

Why don’t you believe that people with a good income are refusing to buy in Vancouver?

Laibach
Guest
Laibach
4 years 8 months ago

@yossarian:

…areas with the greatest share of visible minorities and immigrants were much more likely to see their fortunes decline.

In other words, just because there are more minorities in Vancouver doesn’t mean they have a lot of money. Stop blaming minorities for your housing bubble when locals are to blame.

Aren’t Vancouver West (recently) and Richmond with the highest child poverty in BC? Must be something wrong with statistics.

btw. Not sure what’s your point (minors = HAM???) but locals could be minorities too I guess.

mac
Guest
mac
4 years 8 months ago

@chilled:

“Anyway, the Realturds® have now decided fear mongering is a valid marketing strategy;”

That’s not new! Fear is their core business model.

Anonymous
Guest
Anonymous
4 years 8 months ago

@RentersRant:

I don’t know where you went to school but full year tuition at UBC might run you $6k or $7k. My kid brother goes there right now doing a comp sci degree which my father has funded out of an RESP. Now there’s a lot of things that have become unaffordable but relatively speaking, education isn’t one of them (yet). You’ll of course need to adjust if you’re coming in as an out of province or international student.

patriotz
Member
4 years 8 months ago

@Anonymous:
In 1974 a year’s tuition at UBC was $462. Adjusted for inflation that’s $2,020.41.

There was also much more assistance in the form of tuition reductions and grants. And there were more opportunities for students to get good paying jobs in the summer.

On the other hand there were no universities outside Vancouver and Victoria so more students have the opportunity to attend university in their home cities today.

fred
Guest
fred
4 years 8 months ago

oh my goodness, poor vreaa is going to headline very single complaint here…there goes his entire week! hope he is making money out of his blog.

Anonymous
Guest
Anonymous
4 years 8 months ago

@chilled:
got to agree with you, all the bears here, at vreaa’s blog, and garth’s blog are making 7 figures incomes, highly educated, and married with super models. another common theme: they cannot afford vancouver as all are priced out!

Best place on meth
Guest
Best place on meth
4 years 8 months ago

@Anonymous:

>>>they cannot afford vancouver as all are priced out!<<<

I can honestly say that even if I made $10 million a year I still wouldn't buy a house in Vancouver.

I leave such stupid purchases to the chumps of this pathetic, hollowed out ghetto.

Anonymous
Guest
Anonymous
4 years 8 months ago
“In the long run, people with liberal arts degree tend to end up earning more money than those who are in trades” That may be true but I think you have to compare at the same type of individual. Lets face it, smart motivated people are more likely to go to university over ending up in a trade in Canada. But those who are smart and motivated who do go into trades usually do very well. They end up starting their own businesses or move up the ranks into senior positions with larger company’s and make much more than most… Read more »
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