Prices up, incomes down

Pete McMartin is on a roll over at the Vancouver Sun with a series of articles that looks at actual data on the Vancouver economy and housing.

The most recent article looks at local income levels.

Vancouver stands out as an unusual case around North America: Our house prices rose as our incomes fell.

But those high house prices, and our utter preoccupation with them, have become a distraction to a greater problem, and they are only a part of Vancouver’s economic malady. At any rate, those high housing prices are largely beyond the jurisdictional abilities of Metro Vancouver’s municipal governments to have any real effect on them. Meaningful change — in immigration numbers, for example — would reside with the federal and provincial governments, but not at the municipal level.

No, the persistent, year-over-year problem has been in income decline, and this has been a long time coming.

“This is not a new story,” said Tsur Somerville, director of the University of B.C. school of urban economics and real estate. “We have lagged behind the other major metropolitan cities since the 1980s, and even before the period of rising home prices.”

Read the full article here.

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Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

when’s the crash happening?

UBC in crisis mode
Guest
UBC in crisis mode

If the household income data are from CRA, then it may not be accurate.
What happened if 10-20,000 new households reports no income, no tax paid, would that drag down average income?

Son of Ponzi
Guest
Son of Ponzi

#2
bang on!
That also explain why Richmond with one of the highest house prices has one of the highest poverty rates in the country.

VanRant
Member
VanRant

Re #2: In other words immigration from China is a drag on the Canadian Economy. Why are we not fixing the problem?

@Diadora
Guest
@Diadora

it’s not just immigration from china. immigrants from HK, singapore, and taiwan have been doing this scam for decades. the term astronaut family, satellite family came into existence in the 80s and 90s.

when i was in school in the 80s and 90s in richmond, i remember ‘gangs’ extorting money from rich kids living in houses alone were a big issue.

mainlanders are just the latest to pull this crap.

as to why we put up with it, well, look at ppl like patriotz and jesse. they are quick to cry racism and stick their heads in the sand. white guilt is blinding ppl.

@Diadora
Guest
@Diadora

here are the archived stories from 1996 that i was referring too.

http://www.yourlibrary.ca/community/richmondreview/archive/RR19960911/News.html

leaving just the kids in canada is an extreme example. more often the mother stays in canada while the father works in asia.

Softy
Guest
Softy

“Re #2: In other words immigration from China is a drag on the Canadian Economy. Why are we not fixing the problem?”

Because whoever tries to fix it will be branded a racist.

Slagathor
Guest
Slagathor

….“Re #2: In other words immigration from China is a drag on the Canadian Economy. Why are we not fixing the problem?”

Because whoever tries to fix it will be branded a racist….

Actually, it’s because Chinese migrants tend to vote conservative so there’s nothing to fix as far as the C’s are concerned.

Absinthe
Member
Absinthe

Where’s Dave? Because he needs to come and explain to those of us who aren’t developers/construction workers/realtors how this is actually indicative of a healthy and diversified economy, at least until the NDP come. “Let them eat rebar!”

patriotz
Member

“Meaningful change — in immigration numbers, for example — would reside with the federal and provincial governments, but not at the municipal level.”

McMartin can’t or won’t see that the real problem is easy credit enabled by the Federal government and tax policies at both the Federal and Provincial levels that encourage speculation and underutilization (including offshore ownership).

Prices have increased % wise just as much as or more than Vancouver in cities that have next to no immigration.

space889
Guest
space889

@Diadora – get rid of the immigrants and see how fast lower mainland economy tanks. These scum immigrants are injecting billions of additional annual spending into the local economy. If none of them are here, you can kiss goodbye to tens of millions spend annually on luxury automobiles and services, restaurants, high-end fashion, cell phone services, etc and associated property & sales taxes that flow into local city and provincial governments.

You are the one with your head in the sand if you don’t believe these foreign money injections aren’t creating jobs locally.

VanRant
Member
VanRant

Ham has driven companies from moving to Vancouver and many companies had left because its too damn expensive here. No real paying jobs here, just like you imply, only Job servicing to HAMs which are minimum paying jobs.

LL
Guest
LL

#5 – it is VASTLY immigration from mainland China. Avoidance and deception is part of the DNA.

LL
Guest
LL

#11 – you are saying that like its a bad thing.

tedeastside
Member
tedeastside

even jobs that would serve immigrants are not being created…

most immigrants save their major shopping for Bellingham, dont believe me…go look at the lineup at Peace Arch right now!

UBC in crisis mode
Guest
UBC in crisis mode

It is interesting to note lots in Van West are still being purchased by developers:

Land cost: $1,600,000. New building cost: 700,000. Other cost (realtors?): $100,000

The new house will be sold for $2,800,000, profit: $400,000

Not bad if you consider family doctors in Vancouver make about $300,000 per year.

Slagathor
Guest
Slagathor

….Land cost: $1,600,000. New building cost: 700,000. Other cost (realtors?): $100,000

The new house will be sold for $2,800,000, profit: $400,000

Not bad if you consider family doctors in Vancouver make about $300,000 per year.

Apparently, they can make an extra $100k if they can do the math. 🙂

Slagathor
Guest
Slagathor

…Land cost: $1,600,000. New building cost: 700,000. Other cost (realtors?): $100,000. The new house will be sold for $2,800,000, profit: $400,000 …

It’s roughly the same math in Dunbar except the selling price is about $3.5M. As an added bonus, the house sits empty for a year after the build is complete so the developer can claim they were living in it for a tax-free profit. This is exactly why every single house in Dunbar is slated for demolition – developers are being paid $1.2M, tax free, after expenses, to tear a house down.

paulb
Member
Active Member

New Listings 256
Price Changes 110
Sold Listings 143
TI:15445

http://www.paulboenisch.com

@UBC & SOP
Guest
@UBC & SOP

@2 UBC What happened if 10-20,000 new households reports no income, no tax paid, would that drag down average income?

@3 SOP bang on!

What you two are claiming is local incomes are really quite high but the reported average is brought down by immigrants who make their income offshore or who already have wealth and do not need to work. If that is the case then maybe we don’t have a bubble and local incomes along with wealthy immigrants can easily support current prices. Maybe it is just you two who can’t afford a house?

@18
Guest
@18

Sounds pretty easy to make $1.2 Million per year tax free. Any reason you are not doing it?

@9
Guest
@9

“Where’s Dave? Because he needs to come and explain to those of us who aren’t developers/construction workers/realtors how this is actually indicative of a healthy and diversified economy”

Add in home flippers and that is about 60% of the BC economy. In other words clearly it is helping the economy as long as it lasts.

Heard Herd selling
Guest
Heard Herd selling

So many BMW MB car’s filling up Jerry cans o gas in WA, China ham penny wise pound foolish, they willpay over asking for RE but drive 100k to save 20$ on gas. Dumbass

@23
Guest
@23

Maybe the reason they can afford the house is because they know how to save money? Warren Buffet is very cheap and look where it got him.

A fool and his money are easily parted. Can you guess which one you are?

LL
Guest
LL

#20 – maybe its immigrants trying to hide money from their government and found an easy place to park it while they take advantage of free healthcare and education. Maybe the Canadian government will wake up to this abuse and place measures to stop it and greatly increase taxes on their assets. Maybe their government will crack down on the corruption, investigate and prosecute these immigrants and force them to sell their offshore assets while taking the proceeds. Maybe this is why they call it “hot Asian money” as it implies temporary. Maybe when it ends the outcome will not be pleasant for the immigrants and will have a negative effect on Vancouver real estate. Maybe, who knows?

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