The problem with wealth locked up in housing

Barbara Yaffe has a column in the Vancouver Sun where she points out some of the problems with ‘paper riches‘.

A recent study reveals Vancouverites have the highest net worth in Canada as a result of their pricey homes; so why do so many of us feel like we’re in the poor house?

It’s probably because, with median incomes below the national average, Vancouver residents are grappling with monster mortgages, as well as the highest consumer debt loads in the country.

And while it’s great building home equity, this does little to improve financial positioning until a place is sold and a profit realized.

Read the full article in the Vancouver Sun.

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Arnold Shuchat
Arnold Shuchat
7 years ago

Well, I don’t place much currency in specialty topic column forays by journalists who are generalists. A couple of hundred words by a staff columnist carries no weight in the form of expertise or relevance other than in describing how she spent her afternoon that day.

So there you have it. Get your information and advice from a tabloidal paper and have it worth the paper it is printed on, or seek the counsel of a competent professional.

www.preorderplaystation.com
www.preorderplaystation.com
7 years ago

preorder ps4 bouses listed on this very great site. Check it out and compare the preorder playstation bonuses. Are there any other websites that compare pre order bonuses?

Many Franks
7 years ago

VMD, Burnabonian: bagged!

“Last spotted” is the link to the comment where the cliche showed up;
“Last bagged” is a link to the last place it was claimed.

Piratepad doesn’t track this automatically, Many Franks does 🙂

Jesse: OK, it’s shorter.

jesse
7 years ago

“definitely needs a better name”

Something like “Immigrants place higher value in real estate”?

VMD
7 years ago

Do I type this here and the piratepad automatically detects and updates it?

Trophy bagged!

Trophy: It’s always a good time to buy (Genus: Bull)
Spotted: http://vancouvercondo.info/2013/08/the-problem-with-wealth-locked-up-in-housing.html#comment-212516
Last Bagged:

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

Burnabonian
Burnabonian
7 years ago

Oh what the hell.

Trophy bagged!

Trophy: Not making more land (Genus: Bull)
Location: http://vancouvercondo.info/2013/08/the-problem-with-wealth-locked-up-in-housing.html#comment-212516
Last Bagged: (I don’t get the difference between spotted and bagged)

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

Burnabonian
Burnabonian
7 years ago

@ question #111 “At the end of the day, homeowners will come out on top as a central bank can print unlimited fiat, but they can’t produce unlimited land, hence the dollar will continuously decline relative to housing prices…. Key to a successful freedom 55??…live within your means, and before you’re 40, pay off your mortgage and shovel the rest in growth stocks. This is pretty simple… Folks hoping to time the market for a primary residence will be no further ahead, as they’ll always have to compromise and trade off when doing so….its different for investment property, as you don’t have the rent replacement benefit you have with a primary residence…for investment property, there are lots of straight forward valuation methods to use..” First, I believe that there is a vague “not making more land” at the start of… Read more »

Many Franks
7 years ago

@jesse: And Jesse pulls into the lead with 6 points. I do fear I’m going to have to get pretty picky about new additions.

Many Franks
7 years ago

@Jesse: A little more tenuous IMO, but I’ll include it. It definitely needs a better name, though.

@#thisisadisaster: Absolutely. Post using the template (it’ll make it much easier for me long-term) and it’s yours.

jesse
7 years ago

Trophy bagged!

Trophy: Boomer consumption rendered their children “worse off” (Genus: Bear)
http://vancouvercondo.info/2013/08/the-problem-with-wealth-locked-up-in-housing.html#comment-212543
Last Bagged:

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

😳

Burnabonian
Burnabonian
7 years ago

^I love it. The delusions get deeper as realization sets in. The desperation is palpable. You can almost taste it in the air. Part of me wants to ask for trophy status on “[later, natch] people will live to be 100 and earn professional salaries for 50 of those years and that’s why housing is priced correctly now” but it’s so out to lunch that I can barely process it. Same with “oh god overpopulation 99 billion people by 2285”. Remember when they predicted that in the 70’s? As for “science will cure cancer and that will make what I paid for my house justified”, my head just simultaneously exploded and imploded. Is there a cure for that yet? OP: do you ever read science…or the news? The post-boomers are the first generation to be *worse off* than their parents… Read more »

lolzlolzlolz
lolzlolzlolz
7 years ago

@luigi

The bioscience revolution will be the single most bullish factor guiding land inflation.

people will be routinely working until there 70s in good health. It doesn’t mean they’ll be any better off, however, as competition for limited resources/globalization of workers will keep wages in check.

The 3X annual income adage for desirable detached housing will eventually be rationalized to a world where people are expected to work for 50 years, and it will considered normal to pay anywhere from 5-10X annual income for desirable detached housing.

For people who are buying now and locking in at low rates, they’ll look like savants in 20 years especially since they’ll be basically mortgage free.

#thisisadisaster
#thisisadisaster
7 years ago

“Ummm, I’m sorry, but what a fucked up race.”

Unbelievably racist right? Nope, upvoted 6-2. Xenophobics responding to (yet) another strong sales day.

Trophy bagged!

Trophy: I’m a racist because I don’t have a house in the beautiful city I call home, and I’m very sad(Genus: can we guess?)

jesse
7 years ago

I’ll do another one:
===
Trophy bagged!

Trophy: Immigrant culture plans for the long term compared to locals who focus on the short term (Genus: Bull)
http://vancouvercondo.info/2013/08/the-problem-with-wealth-locked-up-in-housing.html#comment-212401
Last Bagged:

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

Luigi
Luigi
7 years ago

Sir Paul Mackartney rocking at 71 year.bullish for RE.

Many Franks
7 years ago

@Jesse: I jumped that one right to the head of the list. Welcome aboard.

lolzlolzlolz
lolzlolzlolz
7 years ago

@anon321

“Ummm, I’m sorry, but what a fucked up race.”

Yawn. Stupid people do stupid things everywhere.

Actions are a function of intelligence, not skin color.

In short, you’re embarrassing yourself

lolzlolzlolz
lolzlolzlolz
7 years ago

@groundhog. Fiat is easy to print, land, not so much. I’ll repeat that again, since it encapsulates everything that follows: First this absolutely does relate to the price of condos, as the price of condos will always loosely correspond to a price ratio of detached housing (2-3X) With 10B people in 2030, people working until there 70s and living to there 100s, the old arguments of 3X annual income to buy a detached house are completely irrelevant. Even the curing of things like cancer and heart disease (we are entering a bioscience revolution, and people being active and healthier into there 80s and 90s will be very bullish for long-term housing… What does this mean? It means that buying detached housing for 5-10X income will eventually become the norm, since the average person isn’t dying off in their 60s anymore… Read more »

Aggregator
Aggregator
7 years ago

These charts are interesting http://i.cubeupload.com/aqNhZl.png (typo on source for bonds – Bank of Canada)

What does it mean when sales, rates and investor confidence rises? I’m not sure, but what I do know is that every time rates rise, sales drop even lower within the following 3-4 quarters.

anon321
anon321
7 years ago

Ummm, I’m sorry, but what a fucked up race. A Chinese woman in Richmond put glue in her 7-week old nephew’s ears because she was jealous that she only has daughters and no sons. She also stuck a needle in his car seat. It all comes down to money and traditional Chinese beliefs. The woman says she will not receive any inheritance because she did not produce any sons. This is from the CBC: “Community members say traditional beliefs — though outdated — still persist. Queenie Choo with Success, an organization dedicated to multicultural integration, couldn’t speak to the specifics of the case but said old habits generally die hard. “That has been a tradition of thinking that sons are better than daughters,” said Choo, who has two daughters herself. “[But] it doesn’t matter whether they carry the family name… Read more »

It's simple
It's simple
7 years ago

we are not going to crash anymore since all these people are panicking and buying RE with the low mortgage rate holds hummmmmmmmmm
MORE LIKE A BOMB GOING OFF

jesse
7 years ago

Trophy bagged!

Trophy: The “Mark Twain”: they’re not making any more land (Genus: Bull)
Spotted: http://vancouvercondo.info/2013/08/the-problem-with-wealth-locked-up-in-housing.html#comment-212526
Last Bagged:

Scoreboard/Rules: piratepad.net/ep/pad/view/ro.SXqM61It83r/latest

Luigi
Luigi
7 years ago

Yup. bottom was this spring.

George
George
7 years ago

Vancouver Sun headline: “Hot Vancouver real estate market boosts national housing numbers, CREA says”

Choice quotes:

“Homes were selling at a brisk pace in Vancouver and Toronto last month, while the national average price continued to rise, suggesting Canada’s real estate industry has returned to “average levels” after a decline that began last summer.”

“Canadian home sales have staged a bit of a recovery in recent months”

“The national average home price was $382,373, 8.4 per cent higher than a year ago, although Klump said that was mostly because sales were concentrated in expensive major markets.

Excluding sales in Toronto and Vancouver, the national average price would have gone up only half as much and sales volume would have been down from June, the CREA report notes.”

http://www.vancouversun.com/business/real-estate/Vancouver+real+estate+market+boosts+national+housing/8793675/story.html

Groundhog
Groundhog
7 years ago

“Fiat is easy to print. Land, not so much.”

This is all around a very stupid argument, especially for condos.