Pricey Vancouver real estate
Replies: 43 - Last Post: Oct 15, 2012 7:43 PM Last Post By: JJack
Sep 25, 2012 1:06 PM
Pricey Vancouver real estateListening to the media for the past few years you'd be inclined to believe that Vancouver has some of the most expensive real estate on the planet.
Watch a few episodes of House Hunters International, or browse some international real estate listings and you quickly see that Vancouver is actually still a bit of a bargain when you compare it to most European countries and major cities around the world. We aren't even close to being the most expensive. Still lots of room for prices to continue to rise.
Sep 25, 2012 3:44 PM
Sep 25, 2012 4:23 PM
Sep 26, 2012 10:56 AM
3Good to see they're thinking of putting bike routes on the Cambie and Granville bridges.
Sep 26, 2012 7:58 PM
4As someone who has lived in the metro Vancouver area most of my life (60 and counting), the story has never changed. When the mr and I were a young couple looking for a home we had two choices: both of us work our butts off full time for the rest of our lives and maybe we could afford to buy a tiny apartment in Vancouver core or a rundown free-standing in east Van. OR we could move on out ot the suburbs where the kids we'd someday have could run free in a big back yard with a mom switching to contract work so she could raise them full time and there'd be something left for travel and good times together.
Without regret, we chose the latter and it's been a great life for us but different strokes for different folks. If I'd stayed in my "career" job I would have become a career bureaucrat for the feds and without doubt confined to an insane asylum by now. Instead I did publicity for rock bands, founded a live arts magazine, consulted on international air shows, wrote a best selling book, produced mega conferences for health professionals, etc etc etc. Point being, I've had a lot of fun doing a lot of very different things because we had a manageable mortgage. And oh yeah, I retired at 53.
Vancouver families with middle-class incomes priced out of the core real estate - always have been. The question for us now is: We'd always assumed we'd return to the city when we were old and gray. Now that we are old and gray we are not prepared to exchange a gorgeous home with a fabulous view for an apartment looking at the neighbours. Maybe once we are decrepit and cannot look after the house ...or maybe we'll just find a small town on the outskirts that offers everything the big city does. And they do....
Sep 27, 2012 8:30 AM
Sep 27, 2012 9:55 AM
6Vancouver families with middle-class incomes priced out of the core real estate - always have been
I disagree. My wife and I are decidedly middle-class, perhaps on the lower end. We worked hard and managed to buy a condo near Commercial Drive. 6 years later we sold that and built a new duplex in Mount Pleasant. We've been living in that for 6 years now and in another 5 it will be paid off. 17 years in total of mortgage payments and we will be done. And as I said, we would be considered on the lower end of middle class. So it is possible to have a nice new house in central Vancouver, with a yard, and have it paid off while still relatively young. And we haven't been mortgage slaves. Suburbs? No thanks. I smile every morning as I listen to the traffic reports and the growing angst over road tolls.
Hello, US real estate market circa 2008. Exact same words were spoken
is your point that because someone in the US made a similar comment in 2008 the market in Vancouver will therefore crash as it did in the US? A bit of a stretch there...
Sep 27, 2012 10:11 AM
7Simialr conditions exist, though the US experince was far broader geographically. The words were spoken by hordes uninformed mutts with mortgages in the US, since everybody with a mortgage thinks they are housing pros. In the US, the entire system was based on cheap money and " prices to continue to rise" indefinitely. Guess what happened? The situations are not directly analogous as Canada and US have different qualification systems, but the Van market is by far the goofiest in Canada for now.
I guess the CDN govt agrees, they have moved specifically to cool the rise in prices in Vancouver and Toronto, most recently in July 2012. And it is having an effect on prices and volumes.
Prices were already trending down in greater Vancouver, dropped more in August(1% that month alone) and will continue to do so as first time buyers no longer qualify under the new rules, which are actually just the old rules.
Sep 27, 2012 12:03 PM
8The parallels with the US situation are outweighed by the differences. There, a flood of unqualified buyers and/or speculators who were encouraged to take on debt that they couldn't have managed at the best of times drove up prices, and when the economy cooled and the bubble burst, there were cascading defaults. Since the lending institutions had created another co-dependent bubble with their flood of bogus derivatives, when panic selling and defaults mushroomed, the viability of the entire banking system was tested, creating a liquidity crisis that kept potential home buyers from getting loans. A lot of big banks went down or had to be restructured, threatening the entire financial system. Meanwhile, the overbuilding that the bubble had encouraged spread the woe, as supply and demand and layoffs to construction workers fed the vicious cycle.
Canada's banking culture has always been better regulated and more conservative than the laissez faire circus that prevailed in the US. Aside from proactive government policies designed to cool the market gradually, Canadian borrowers aren't leveraged to anything like the same extent to begin with. If prices drop a few percent, renters and others who would love to buy in Vancouver will provide a price floor. And given the number of retiring baby boomers from the interior of the continent who would like to spend their golden years far away from frozen places named after pieces of defunct moose, the joys of Vancouver will continue to draw new residents. A correction doesn't mean the sky is falling.
Sep 27, 2012 12:10 PM
9#7 is bang on. Conditions have been changed by the feds, and Vancouver is already seeing this as a result. Here in Calgary, million dollar homes were the rage...now there are tons on the market because its harder to get mortgages over this milstone. Vancouver is worst...and not to mention, taxes and expenses are higher, wages are lower, and so on.
Sep 27, 2012 12:12 PM
10As long as the world continues to purchase the thick black liquid,various valuable rocks, and to a lesser extent tasty edibles Canadian real estate will remain stable. There is actually something tangible (ie: commodities) to the economy unlike the USA where it was based on the trading of paper and consumer goods.
Sep 27, 2012 12:53 PM
11but the Van market is by far the goofiest in Canada for now
my point is exactly the opposite. The prices in Vancouver aren't particularly goofy. Go and price out a similar house in San Francisco or New York. Much more expensive in those places, and they didn't suffer the housing market crash that other areas of the US did. Why? Simple, people want to live there. Yes you'll see large price fluctuations in places like Calgary, because it's, well, Calgary. Boise Idaho saw their prices plummet too. But any city that is an extremely desirable place to live doesn't experience the ups and downs that less desirable places do. They tend to hold their value (and increase). Sure prices may go up 10% one year and then drop by 2% the next, but the overall trend is upward. The prices in Regina have doubled or tripled in recent years - now that's goofy. And unsustainable.
And again, if you compare prices in Vancouver to other popular cities around the world you see that Vancouver isn't nearly as expensive as many people seem to believe.
Sep 27, 2012 2:19 PM
Is compeltely indecipherable.
About all I can get from that goobbledegook is that real estate prices in Vancouver are reasonable because they are ,more expensive elsewhere.
I guess that kind of wisdom comes to you after owning two houses and having a mortgage.
Sep 27, 2012 4:37 PM
13I don't buy the fact that middle class people are squeezed out either. It's about priorities.
My grandparents (who went to Grade 8 in school and because of that, were not in the highest paying jobs), bought their first house in 1947, in Burnaby.
My parents bought theirs, a tiny 640 sq foot house at Rupert and 2nd in 1968. Again, my dad didn't graduate high school and my mom was an Admin Asst.
We bought our first place in 2006, in East Van. Nothing spectacular, but a place just the same, which we stayed in for 5 years, then sold and moved up.
I agree that it is harder these days, than in my parents days, but certainly not impossible. You just have to not want the Beamer and latest iphone in order to get what you want.
My single SIL bought a place in Burquitlam a few years ago and rents it out. She's a legal secretary, under 30.
Sep 27, 2012 6:53 PM
14For those still baffled by Jack's "point" (I mean the one at #11, of course), it's simply that with property prices being all about location times 3, spectacular locations like Vancouver and San Francisco create ongoing demand for property by virtue of simply being such spectacular locations. Since that demand is what drives price, as long as the special features of Vancouver remain special, there's a price floor that won't fall too low, and there's ongoing competition for property in the long run that will lead to long-term appreciation. It ain't rocket surgery.
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