Trapped in a starter home.

A funny thing happened on the way to financial security and easy riches, the condo promise in Vancouver didn’t really pan out for many young families according to a recent Vancity study.

The idea of a starter home is to get on the property ladder, then trade up as your family grows. But this doesn’t work as well when condo prices stagnate and single family home prices grow, especially when there are very few options available for 3-4 bedroom attached or condos.

Across the region, families who wish to move from a one-bedroom apartment or condo to a three-bedroom home with an attached yard would have to increase their debt level by an average of 95%. In Vancouver’s west side, this jumps to 158%. In the city’s east side, it is a much lower 78%. The biggest jump is found in White Rock, where debt levels would increase by an average of 164%.

Read the full article here.

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Loon
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Loon

Talked to the BiL on the weekend, he was trying to school me on thinking of a mortgage as a bank account.

I told him he needs to think of a mortgage as debt. He looked at me kind of funny.

Interesting times folks !

Best place on meth
Member
Best place on meth

Oh noes, it looks like someone’s burned down the property ladder!

Enjoy your shoeboxes, suckers!

Jimmy
Guest
Jimmy

It looks like starter homes are finally breaking out (up 14%) and starting to jump quickly. http://www.yattermatters.com/2015/09/vancouver-did-it-again/
They typically lag then play catch up. It’s probably the boomers starting to retire as much as the millennials starting out.

paulb
Member

New
237
Price Change
77
Sold
228
TI:11909

http://www.paulboenisch.com

Shut It Down Already
Guest
Shut It Down Already

Why are they suckers? The interest and strata generally cost way less than rent, and if they’re not happy there they can sell. I imagine a well-located condo would probably sell in a matter of days given the current low inventory levels. The suckers are the people who asserted 5 years ago that the Olympic closing ceremony would trigger a total market meltdown.

Bo Xilai
Member
Bo Xilai

Loon #1… Let me guess, your BIL is around 30-35 years old, right?

Synopsis:

Debt = Wealth
Why bother saving, when you can just borrow money and buy assets?
Money will always be cheap.

Bo Xilai
Member
Bo Xilai

Loon #1… I forgot…

BIL: “I love getting my assessment every year, because I go to the bank right away and increase my HELOC limit.”

Son of Ponzi
Guest
Son of Ponzi

Been a long and hot summer this year.
450 sq. feet furnaces in the sky.
Lots of buyers were getting burned.

w
Guest
w

One bedroom condos aren’t starter homes. That’s where people who have been priced out forever end up.

First time buyers buy houses for $750k to $1 million. And these first time buyers are flying into YVR every day.

southseacompany
Member
southseacompany
“Stephen Harper on the housing market: What bubble?”, Maclean’s magazine http://www.macleans.ca/politics/ottawa/harper-on-the-housing-market-what-bubble/ “When Prime Minister Stephen Harper’s campaign stopped in St. Jacobs, Ont…. Interviewer Eric Drozd asked about the spectre of a housing bubble.” “The Prime Minister insisted that Canada’s housing market was “very solid.”” “Harper: “I know everybody points out that debt levels, mortgage borrowing are way up. It’s up because interest rates are low. Asset levels relative to income are actually way up in this country…”” “Analysis: Harper is correct that net worth relative to income is rising—a steady increase almost uninterrupted since the end of the last recession. The Canadian pattern is very similar to the trend south of the border—except that we experienced nowhere near as strong a correction as our American neighbours.” “Harper: “…and delinquency on mortgage loans, debt-servicing costs are at near-record lows in this… Read more »
southseacompany
Member
southseacompany

“Why reward Vancouver seniors for staying in big empty houses? Peter Ladner in Vancouver Courier

http://www.vancourier.com/opinion/why-reward-vancouver-seniors-for-staying-in-big-empty-houses-1.2058162

“The four-decade-old B.C. property tax deferment program lets people over 55 (even if they’ve only been in Canada one year) stop paying municipal property taxes. The unpaid taxes are recouped when the house is eventually sold, and the homeowner pays a niggling 1 per cent interest”

“Essentially, B.C.’s wealthy senior homeowners (which is anyone who owns a house these days) are being gifted 1 per cent loans, covered by younger working taxpayers, as a reward for staying in their big empty homes and squeezing young families out of the housing market”

Corrupt in Canada
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Corrupt in Canada
vangrl
Member
vangrl

#11

and a comeback to that article

Soapbox: Why penalize Vancouver seniors for government’s failure to curb runaway housing values?

http://www.vancourier.com/opinion/soapbox-why-penalize-vancouver-seniors-for-government-s-failure-to-curb-runaway-housing-values-1.2064397#sthash.a2Z6KFJH.dpuf

vangrl
Member
vangrl

“The sale of seven older houses on the Granville Street block between 45th and 47th avenues earlier this year netted the owners over $22 million.

The buyer is Hui Xiang International Realty Developments Ltd., a B.C. incorporated company with directors who list their address in Wenshan, a city in China’s far-flung southwestern province of Yunnan, which borders Myanmar, Laos and Vietnam. It’s also the location of their Wenshan Huixiang Real Estate Company, a former auto parts maker turned property developer.

The sale offers a more detailed glimpse at one example of the oft-referenced, but faceless mainland Chinese investor at the heart of the debate over Vancouver housing affordability.”

Read more: http://www.vancouversun.com/business/Million+dollar+land+assemblies+speculate+zoning+changes/11380019/story.html?__lsa=38e5-443e#ixzz3mRU069Il

More empty houses on the way, waiting to get the go ahead to rezone … $$$ ….please give us rezoning, or we’ll just sit on your limited supply of detached forever

patriotz
Member

@13: “Why penalize Vancouver seniors for government’s failure to curb runaway housing values?”

This kind of doublethink sums up the greed mentality. Of course seniors are the winners from runaway housing values, since they get all of the gains untaxed when they sell. The obligation to pay property taxes based on market value, which let’s remember are still low by North American standards (I mean for a comparable house in a comparable neighbourhood, not for the same property value) is seen as some sort of injustice.

patriotz
Member

@10: “…and delinquency on mortgage loans… are at near-record lows in this country”

Just like the US in 2005-2006. Why? Simple – if house prices are still rising, someone who can’t make their payments can just sell and take the cash. It’s only when prices have been falling and mortgages become underwater, that delinquencies rise because owners no longer have equity. This graph say it all:

https://research.stlouisfed.org/fred2/series/DRSFRMACBS

Also Harper doesn’t understand (or doesn’t want us to understand) that it doesn’t matter if most people aren’t in trouble, it’s the people who are in trouble who drive downturns. Over the whole US RE bust (about 4 years), about 7% of all properties faced foreclosure.

patriotz
Member
Bullwhip29
Guest
Bullwhip29

@ #14

“Asked about a plan for the properties Hui Xiang bought, company director Chou Shuang Jie said: “We don’t have (one) yet as we are waiting to see what the government there will do.”

– really makes you shake your head…lol

George
Guest
George
The first comment under that Peter Ladner article in the Vancouver Sun calls him a ‘disgusting human being’. The argument immediately gets nasty and personal. They say seniors deserve to be able to defer their taxes because otherwise they would be priced out of their homes due to high housing prices. But whenever young people cry about high housing prices in Vancouver, we’re told that’s the free market, suck it up, supply and demand, blah blah blah. It’s actually not a free market, it’s a highly distorted market, but that’s besides the point. If it’s good for the goose, it’s good for the gander. If young people in Vancouver are just supposed to accept being priced out due to the free market, then elderly people should have to accept the same thing. I am not saying I want to see… Read more »
George
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George

missed typing 2 words. It was supposed to say “But Peter Ladner IS RIGHT…”

George
Guest
George

Somehow I got sidetracked. The point I was trying to make is that nothing is going to change with regards to deferred property taxes. The first comment below the Peter Ladner article in which Ladner is called a ‘disgusting human being’ shows that. As soon as someone calls from something that will cause a bit of pain on the elderly, that person will be cast as a complete villain who wants to eat babies. I would be scared to write an article like the one Ladner wrote because the backlash will be strong. Seniors will fight to the death for their entitlements, the young be damned.

Bo Xilai
Member
Bo Xilai

#10 Southseacompany

“The Prime Minister insisted that Canada’s housing market was “very solid.””

Isn’t that what Harper was saying about our oil and gas industry last year? Since Canada will no longer be an “energy superpower”, the only economic leg Harper can hope to stand on is if we become a “real estate superpower”.

southseacompany
Member
southseacompany
“Opinion: Fed or no Fed, interest rates are already rising”, Market Watch http://www.marketwatch.com/story/fed-or-no-fed-interest-rates-are-already-rising-2015-09-22 “es, Janet Yellen and her fellow policy makers at the Federal Reserve Board decided to leave official short-term rates unchanged at last week’s meeting. But other key interest rates are rising throughout the economy — and the folks at the Federal Reserve have either decided not to stop them, or, perhaps, they can’t.” “Since April, corporations have seen the interest rate they must pay on new bonds rise by as much as a third, according to Bank of America Merrill Lynch data. ” “Meanwhile, the so-called “risk-free” interest rate, meaning the interest rate on 10-year Treasury bonds, has jumped by a fifth to 2.2% since the spring. ” “As it happens, new data released by the Federal Reserve on Friday showed how widespread the impact of these… Read more »
Bullwhip29
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Bullwhip29

@ #14 cont…

This is proof the system is rotten to the core. Next thing you know all of marpole is green lit for condo development. What neighbourhood comes next? Inquiring minds would like to know. Articles like this only stoke the fire even more. The end game is city hall being run by HAM and having them flick the switch. Vanc then turns into another HK with all the oligarchs and their offspring living in gated palaces and everyone else crammed into an endless matrix of sleeping pods.

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

first time buyers can’t move up and haven’t been able to move up for sometime, so what’s driving the market patriotz?

in a sense it’s still first time buyers. first time buying in canada to be precise.

patriotz Says:
March 11th, 2009 at 11:36 pm 54

First-time buyers always drive the market. If they are not buying, there is nobody for move-up buyers to sell to.

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