Can someone please explain this market?

The following was posted by ‘Whistler or bust?‘ in the comments this weekend:

I will be the first to admit I have been very wrong about the direction of Van RE in the past 2-3 years. That disclaimer said, lets examine some facts to see if there is any upside left:

These are the incomes required to be in each % (Source CBC)

10% of income earners $80,400*
1% of income earners $191,100*
0.1% of income earners $685,000**
0.01% of income earners $2.57 million*

So with the average Vancouver detached home at $1,408,722 (Source Yatter Matters)

A DP of $281,744 is required to buy
PPT is $26,174
Misc Closing $2,000
Total $309,918

Mortgage $1,126,978 @ 2.59 for 5 yrs = $66,072 Annually ( I will note these are record low rates)
Assume 1% Annual Maintenance (This is a standard benchmark over many years) $14,080
Property Taxes – These can vary but lets assume $7,000?

So Annual carrying costs total $87,152 AFTER TAX – I am excluding heating and hydro which vary but in no cases less than $3,000 annually for a detached home

Back to our chart above – Lets assume a 30% avg tax rate for the 10%, 35% for the 1% and 45% for the 0.1 and 0.01%.
After Tax
10% of income earners $56,200* – This house would take up 155% of the after-tax income
1% of income earners $124,215* – This house would take up 70% of after-tax income
0.1% of income earners $376,750* – This house would take up 23% of after tax income
0.01% of income earners $1.413 mil – This house would take up 6% of after- tax income

This is assuming all of these people have $310K for closing. This is assuming they are buying the average house of $1.4 mil. I think we all know what kind of house $1.4 mil gets on the West Side and even on the East side nowadays.

So the conclusion – Even the 1%ers are realistically priced out of the average Van detached home. Only the 0.1% and and above can really afford to buy.

Put another way – 99% of people are priced out. As families combined lets assume 95% are priced out.

So to all you bulls out there, please answer the questions: Is this a healthy market? Is this a market with any upside left?

I think we all know the answer.

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Shut It Down Already
Guest
Shut It Down Already

Wheeeeeeeeeee!!! We get to shoot this down once again. Thanks admin!

Egg Hunt
Guest
Egg Hunt

Many detached houses in Vancouver have rental suites.
Although most owners barely have average income, they can add
$1,000 per 1BR to service debits and maintenance.

Because I don’t own detached house, I still don’t understand if you own millions of dollars of house but comes with strangers.
If you are young, that’s fine, but in your later 40s, in your 50s, 60s…..?
My neighbour in their late 70s recently acquired basement suite tenant “he pays property taxes”.

vangrl
Member
vangrl

Did BPOM have a bet going on with someone?

w
Guest
w

And Richmond has the lowest household income in BC and the highest childhood poverty rate. Do we need to go through all of this yet again?

w
Guest
w

coming to vancouver?

Saudi Prince Accused of Sexual Assault Won’t Face Felony Charges
A bleeding woman and four others alleged victimization at a mansion.

http://www.usnews.com/news/articles/2015/10/19/saudi-prince-accused-of-sexual-assault-wont-face-felony-charges

Owe Canada
Guest
Owe Canada
It’s all about the debt. Interesting economic/financial system we have developed for ourselves in Canada in that it seems we have to constantly grow the debt in the economy significantly faster than the economy itself grows. Our annual gross domestic product is $1.98 trillion. At the end of June, 2015 the total household, government (all levels) and business debt in Canada (total debt outstanding) was $6.02 trillion, and the total debt outstanding in Canada excluding domestic financial institutions was $5.04 trillion. The total debt outstanding is 3.04 times greater than our annual gdp, and the total debt outstanding excluding domestic financial institutions is 2.54 times greater than our annual gdp. At the end of June, 2014 the total debt outstanding in Canada was $5.59 trillion. From the end of June, 2014 to the end of June, 2015 the total debt… Read more »
Shut It Down Already
Guest
Shut It Down Already

My election prediction was pretty wide of the mark tonight. Nowhere near, in fact. I’m happy to admit that – ‘own’ it, if you will.

Shame the beartards here can’t do the same with their dire housing market predictions. Technically it’s still “after” the Olympic closing ceremony, I guess.

crikey
Guest
crikey

buh-bye finance minister Joe Oliver?
would be icing on the cake (not that he can remain finance minister anyways since the cons are out)
http://www.torontosun.com/2015/10/19/joe-oliver-trailing-liberal-challenger

after 10 years of Cons in power, time for the shredding machines to work overtime as Cons’ panic sets in.

Owe Canada
Guest
Owe Canada
It’s all about the debt. Interesting economic/financial system we have developed for ourselves in Canada in that it seems we have to constantly grow the debt in the economy significantly faster than the economy itself grows. Our annual gross domestic product is $1.98 trillion. At the end of June, 2015 the total household, government (all levels) and business debt in Canada (total debt outstanding) was $6.02 trillion, and the total debt outstanding in Canada excluding domestic financial institutions was $5.04 trillion. The total debt outstanding is 3.04 times greater than our annual gdp, and the total debt outstanding excluding domestic financial institutions is 2.54 times greater than our annual gdp. At the end of June, 2014 the total debt outstanding in Canada was $5.59 trillion. From the end of June, 2014 to the end of June, 2015 the total debt… Read more »
left already
Guest
left already

what will liberals do for the house prices?
Is CAD going to 50 cents soon?
Looks like some interesting times are in store.
If he goes ahead with infrastructure spending, interest rates will surely go up.

crikey
Guest
crikey

@#6
You aren’t paying attention – again.
What most bears have been talking about is not predictions, but how the market does not make domestic sense. For crying out loud, all you have to o do is read the topic for this thread!

Bears resigning to the market making sense would be like you admitting that in a given riding 500,000 votes for a Liberal candidate makes sense — when there are only 100,000 eligible voters in the riding.

Shut It Down Already
Guest
Shut It Down Already

“What most bears have been talking about is not predictions”

How many links would you like to prove the inverse?

crikey
Guest
crikey

lol, Westside Realtor does not represent most bears.
Even bears often downvote him/her, and some ridicule him.

Shut It Down Already
Guest
Shut It Down Already

Oh, please. This blog exited long before you and WSR showed up. Check the archives. You could start with the “predictions” tag, and find every slight uptick in bond rates to find the declarations that the crash has started. Or I could do it for you, but where’s the fun in that?

Best place on meth
Member
Best place on meth

@vangrl

Not a bet, I was just mocking Shit It Down for not only making an incredibly stupid prediction of a conservative majority, but for taunting and insulting anyone who didn’t believe it.

“Conservatives will keep power. Should be obvious to anybody who is paying attention.”

He emulated the childish mentality of his party who mocked and vastly underestimated Baby Trudeau by saying prior to the first debate that he would exceed expectations if he showed up with pants on.

What can you say about assholes like these?

In the end Harper fucked up by having a long campaign allowing his (just not ready) hated nemesis more time to prove himself which he did.

Good riddance Harper, you fucking piece of shit.

Now if only we could shoot Krusty into space.

Best place on meth
Member
Best place on meth

In my riding of Vancouver East, where the NDP could run a bag of hammers as their canditate and win handily, they did indeed win handily.

“Kitsilano Kwan” won 47% of the vote, far short of the 60% her hard working and non-stealing-from-the-poor predecesor Libby Davies took in the last election – which just goes to show that the voters of Vancouver East are beginning to wise up.

Faced with a choice of Kwan, Wong and a conservatard, I had to vote Green.

My conscience is clear.

Vanco
Guest
Vanco

Maybe Shut it down could sell his one of his SFH and get BPOM and his gang a trailer. more up their alley.

w
Guest
w
From the Canadian Liberal party’s platform: International Students: We will give international students and temporary residents credit for time already spent in Canada. We will make it easier for international students and other temporary residents to become Canadian citizens by restoring the residency time credit. We will also make changes to the Canadian Experience Class, to reduce the barriers to immigration imposed on international students. Reuniting Families We will make it easier for immigrants to build successful lives in Canada, and contribute to the economic success of all Canadians. Immigration has always been an important part of Canada’s economic growth, but over the past decade, Stephen Harper has turned his back on welcoming those who want to contribute to our country’s success. We will take immediate steps to reopen Canada’s doors, and will make reuniting families a top priority. We… Read more »
Shut It Down Already
Guest
Shut It Down Already

“Childish mentality” says the person who substitutes the word “shit” into people’s handles and can’t win a debate without calling somebody an asshole yet whines that others “taunt and insult”. Oh my.

I’ve already admitted my prediction was wrong. Your turn.

w
Guest
w

More money for people who “need it the most” or look like they need it the most on paper. HAM will love that.

https://youtu.be/I0yxfQ2OyhQ

southseacompany
Member
southseacompany

“WILL POLOZ HIKE RATES ON WEDNESDAY?”, advisor.ca

http://www.advisor.ca/investments/market-insights/will-poloz-hike-rates-on-wednesday-192880

“On Wednesday the Bank of Canada will make a rate announcement. What to expect?”

Best place on meth
Member
Best place on meth

@18

You’re absolutely right, for me to put “shit” in your name was extremely childish.

Good call.

Shlomo
Guest
Shlomo
I’m not sure anyone sane is looking in Vancouver proper any more. A coworker of mine has bitten the bullet and is househunting in earnest. She has some real horror stories to tell, from the Tricities area. Homes in Coquitlam are priced low around 800-850K and are subject to bidding wars with the winner clocking in over a million, in most cases. Port Moody isn’t immune either, with most homes well over a million and the few under 1 mil inciting frenzies of middle-class families stretching themselves to the hilt. The madness is here to stay and shows no sign of slowing, even in the remote burbs of Coquitlam and Port Coquitlam. Lots of Mainland Chinese families at select showings. Perhaps some Asian stupidstition about cemeteries or T-junctions is keeping them away from other homes, but when one shows up,… Read more »
Oracle
Guest
Oracle

Ending TFW and IMP programs will have huge effects on rentals and Real Estate.

Trust me.

Don’t believe the has been Cons. They are yesterday’s news. They will be brought out in open in due time in this digital age.

Oracle
Guest
Oracle

Conservative policies were hated in all major cities across Canada except Alberta.

Its clear that people want slower growth in the major cities. They all went liberal…

Write your new MP to end IMP and the TFW programs. Lets get the unemployed to work first,

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