Vancouver's Real Estate Market

[Tapioca]

This article from the Vancouver Sun touches on a lot of things that have been discussed over the last few pages: low rental vacancies, multi-generational households, housing costs that are not in line with housing costs, and lingering job vacancies.

On the point of job vacancies, older millennials (33-37) who have housing security are probably in a really good position right now: 10-15 years of experience in their industries, multiple degrees and certifications under their belt with no lingering student debt, and the reduced income of maternity leave(s) are in the rear view mirror. Considering the job market right now (shortages of mid to senior management), there are lots of opportunities to move around. This is certainly what I'm seeing as several of my friends are concluding their baby-making years and are moving into senior roles with healthy 6-figure salaries to match.

Married with children and living at home: Lower Mainland's multi-generational households on rise

Randy Shore
Published on: November 25, 2017 | Last Updated: November 25, 2017 4:39 PM PST

Tess Strong’s adult son, his wife and their twins live in the ground-level suite and that suits her just fine.

“Some of us have begun to realize that we aren’t going to live forever,” she said. “If you need help to live at home, what better way than to have your family with you?”

Strong and her husband Roger — both retired — live upstairs in an Abbotsford home, which allows her son Anton to home-school his six-year-old children and work part-time.

“Anton and his wife Samantha had moved down from Squamish and were living in an apartment, but they didn’t have the income to buy a house,” Strong said. “We had already been looking after our grandkids a couple of days a week, so in a lot of ways it made sense to share a home.”

They are not alone. Ben and Stacey Panlilio and their boys — now five and 10 — live in a suite in his mother’s house in Richmond.


“When we moved back here we knew it would be long-term, but now we think we will be here forever,” said Stacey. “Maybe 30 years from now we will be living upstairs and one of the boys will start a family down here.”

Friends in their neighbourhood recently took out a mortgage — not to buy a house — but to raise and expand his mother’s home and then moved in.

“They are doing the exact same thing we are,” she said.

In fact, multi-generational households are the fastest-growing household type in Canada, according to the most recent federal census. The number of households with at least three generations under the same roof grew by 37.5 per cent between 2001 and 2016.

Multi-gen homes are still strongly associated with immigrants but appear to be gaining popularity, said Nathan Lauster, a sociologist at the University of B.C.

The metropolitan areas of Toronto, Vancouver and the Fraser Valley have a larger than average share of multi-generational households, “related to housing needs and the high cost of living in some regions of the country,” according to the census report.

Hardly surprising given the financial pressure on Metro Vancouverites. The median price of a detached home is over $1 million, which would require a monthly mortgage payment of more than $4,500, according to the National Bank of Canada affordability report.

Betterdwelling.com estimates that it would take an ordinary family about 29 years to save for a down payment in this market, while the average rent for a one-bedroom apartment in Vancouver has topped $2,000.

And that is the situation the Panlilios find themselves in. Both have government jobs. Both work full-time. But when it comes to buying a home, they can’t get the math to work unless they’re willing to take on a monster commute.

“With no assets to start with and raising two boys, it’s just not possible for us,” said Stacey. “It was a big dream of mine to own a house and I had put pressure on myself to get there, so that realization was kind of a crappy feeling.”

Now, they live close to work, pay below-market rent and have time and money to put the boys in sports and take a vacation every other year.

“It’s not about pride, it’s about quality of life,” said Stacey. “It’s a huge relief to let go of that pressure.”

The lack of affordability is having ripple effects throughout the economy.

Soaring rents and real estate prices have made it difficult for businesses to find workers in Metro, where some owners have been forced to shut down their businesses due to the lack of skilled labour.

“I have a friend who recently graduated in pharmacy who has job offers, but when he does the numbers it just doesn’t work,” said Gordon Price, an urban planner and former Vancouver city councillor. “So this isn’t just a phenomenon of entry-level workers, it covers the spectrum through to upper-middle-class workers.”

The ability of governments to address real estate values and low vacancy rates is limited, though the City of Vancouver is giving it a try with its Empty Homes Tax, short-term rental regulations and modular housing for homeless people.

Changing the forms of housing available in the market is painfully slow and happens over decades, even centuries, said Price.

“What will change — and we’ve seen this before — is the way people use the existing forms,” he said.

Mansions will turn into apartment buildings, young workers will pack themselves into apartments and shared houses, and people who want to stay in the city to launch their careers will simply stay where they are, in their parents’ homes.

“The phenomenon of stay-at-home kids is very much a reality,” said Price. “Those basement suites aren’t being rented out, they are occupied by grown children.”

Exacerbating the problem is that Vancouver and surrounding municipalities are preserving single-family neighbourhoods at the expense of densification, said Lauster.

“People can double-up and they can share and get roommates while we wait for developers to do their thing, which is changing the housing stock,” he said.

The notion that ownership of a detached home is out of reach is relatively new for us, while older, more mature cities have already been through this pain.

“It really does affect people,” said Lauster. “They are feeling like they’ve done everything right, got an education and a job, and now they feel like they should be in a house and they’re not.”

rshore@postmedia.com

[hud 91gt]

Originally Posted by Gerbs

How much did you manage to save for a down payment in your early twenties? Seems like everyones saved over $100k by the time their 26

I don't remember the exact numbers, but it was a pre construction sale. 5% of 260k (Remember when things were this cheap?) off the bat + 5% in 6 months + 10% a year later. So fairly minimal up front but rounded out to 60k at the end.




Welfare, the issue with the foreign buyers tax was it was too late. I also don't agree on having it implemented at the provincial level in just one area. As we all noticed it impacted others in surrounding areas. Federal government doesn't want to deal with it? No kidding. It's a big issue.


Last winter I took a job for fun at a car restoration shop one day a week. The guy hired me on the spot. I was keen to learn some things I hadn't learned on my own already and I was asking for very little pay as I just wanted to learn and make it a fun experience. Over the next 6 months I watched skilled people, young energetic people roll through that place. It was sad to see how he couldn't keep a steady number of employees.

It's also the reason I can't find a god damn bolt, or recycle my oil in Vancouver. It's all bloody condo's and no business'. haha.

[welfare]

Originally Posted by mikemhg

It amazes me how some people will comment on the job market in this city, without any actual knowledge of what they are speaking about.

I manage a large number of different association groups in many differing industries in this city. What is the number one complaint my customers have? The lack of ability to fill jobs. I regularly have conversations with business owners who have roles posted for months on end, unable to find applicants. The issue is getting worse year by year.

We have a serious brain drain going on in this city, and this housing rental crisis is the catalyst creating this domino effect.

Our local government in a rush for greed through property and real estate has essentially cut its nose off to spite its face.

As westopher said above, great, you made an $800,000 profit off the sale of your condo, that's nice. But when the business economy tanks in this city, and you cannot visit the establishments that were once there, what does it even matter?

This isn't an issue of entitlement, it's an issue of sustainability.

Aren't these just examples of how the market could correct itself though?
I mean, if the government props it up, how will it deflate?

[Hondaracer]

Outside of the feeling to have to move out on your own, personally I don’t see any problem with multi generational house holds, I’d say it’s a great idea at this point in time.

[originalhypa]

mansions will turn into apartment buildings, young workers will pack themselves into apartments and shared houses, and people who want to stay in the city to launch their careers will simply stay where they are, in their parents’ homes

That sounds horrible. Like the preface to a movie about future dystopia. Just horrible.....

[Traum]

Originally Posted by Hondaracer

Outside of the feeling to have to move out on your own, personally I don’t see any problem with multi generational house holds, I’d say it’s a great idea at this point in time.

This only works if you are on very good terms with your MIL.

[snowball]

Originally Posted by Traum

This only works if you are on very good terms with your MIL.

It's (almost) always the MIL, y they b cray

[Scotsman]

I thought of this thread when I saw this trailer on tv

Trailer #3

It's the new Matt Damon movie. Here's the info too from imdb if you can't or don't want to watch the trailer:

'Downsizing' imagines what might happen if, as a solution to over-population, Norwegian scientists discover how to shrink humans to five inches tall and propose a 200-year global transition from big to small. People soon realize how much further money goes in a miniaturized world, and with the promise of a better life, everyman Paul Safranek (Matt Damon) and wife Audrey (Kristen Wiig) decide to abandon their stressed lives in Omaha in order to get small and move to a new downsized community -- a choice that triggers life-changing adventures.

We're going to need it here in Vancouver

[yray]

how did city hall approve this LOL

[DJ Milk]

The picture looks kind of fake so I did a Google Street View and it's real

[dhari]

Curious to hear what people consider 'decent' and or 'average' income.
Also, what is 'decent' and or 'average' rent?

[MarkyMark]

I think a couple pulling in around 140k a year combined is considered making 'decent' money, by Vancouver wages at least.

[lowside67]

Originally Posted by MarkyMark

I think a couple pulling in around 140k a year combined is considered making 'decent' money, by Vancouver wages at least.

It's above the average income for a couple for sure, but the reality is that it's not anywhere near enough to buy a house in Vancouver unless you have a ton of equity/downpayment. Even at $250k/year, you can qualify but it's not easy to make it work.

-Mark

[MarkyMark]

Originally Posted by lowside67

It's above the average income for a couple for sure, but the reality is that it's not anywhere near enough to buy a house in Vancouver unless you have a ton of equity/downpayment. Even at $250k/year, you can qualify but it's not easy to make it work.

-Mark

140k a year is townhouse money at best now, even in the burbs.

[Tapioca]

Originally Posted by MarkyMark

I think a couple pulling in around 140k a year combined is considered making 'decent' money, by Vancouver wages at least.

Yeah, I would say 150K for a couple who each have some post secondary education and 10 years of experience in their industries sounds about right.

200-250K is for middle to senior managers and tech workers.

[sam0m0]

Originally Posted by hud 91gt

Put down my initial downpayment at 23 y/o without financial help from my parents. I had my shit together. Luck, timing and determination.

Nice, and I thought I was early. Saved over 100k in my 20s bought a condo at 26 yr old and put 65k down (320k 1 bed). Rented it out first 2 yrs to help with mortgage and moved in after living till now and just sold for mid 500s.

[westopher]

Depends on the life you want to live, but I don’t think 140k is even TH in the burbs money now.
What’s average household income? Like 80k?
You need basically double that for a 2 bedroom condo and a life outside your mortgage payments if you want to live in Vancouver proper. No wonder schools are closing.

[Liquid_o2]

Originally Posted by Tapioca

Yeah, I would say 150K for a couple who each have some post secondary education and 10 years of experience in their industries sounds about right.

200-250K is for middle to senior managers and tech workers.

200k to 250k is quite high for Metro Vancouver. Not a lot of workers are clearing 100+ a year. Even someone working in middle management... I would find it hard to believe is making well into six figures. Average tech worker is about $85k I believe.

[MarkyMark]

Originally Posted by westopher

Depends on the life you want to live, but I don’t think 140k is even TH in the burbs money now.
What’s average household income? Like 80k?
You need basically double that for a 2 bedroom condo and a life outside your mortgage payments if you want to live in Vancouver proper. No wonder schools are closing.

For sure, I was more talking about Surrey/Langley townhouses, even those are creeping up to 600k+ though.

[westopher]

Well, at the risk of sharing too much here and having people talk about how I’m a failure because I’m a chef and I’m a broke ass (like some have in the past) I’ll say we are a bit above that 140k mark. We pay a mortgage on a place that cost us below 350k and after we pay all our bills, we are left with about 3k a month for savings, fun, nights out, clothing and car parts. It disappears REALLY fast. If that was a mortgage on a 500-550k place our lives would be pretty boring.

[Traum]

According to Stats Canada, the median BC income was $32,850 back in 2015.

Assuming that people in the Lower Mainland makes 25% more than the rest of the province, and that there has been a pay raise of 10% since 2015 (which is likely an over-estimate), we're only looking at $45k as median income.

[Tapioca]

Originally Posted by Liquid_o2

200k to 250k is quite high for Metro Vancouver. Not a lot of workers are clearing 100+ a year. Even someone working in middle management... I would find it hard to believe is making well into six figures. Average tech worker is about $85k I believe.

Metro Vancouver is full of people who don't work at all (seniors, international students, etc.), or who hide their true incomes/wealth through personal corporations which are not reflected in census data. I know quite a few salaried professionals in their mid-30s and early 40s who are over 100K. And those who are in that bracket tend to marry/partner up with people who are in a similar income bracket.

Private lending and credit unions (who are not regulated by OFSI) represent a significant share of the mortgage market in Metro Vancouver.

[hud 91gt]

Originally Posted by westopher

Well, at the risk of sharing too much here and having people talk about how I’m a failure because I’m a chef and I’m a broke ass (like some have in the past) I’ll say we are a bit above that 140k mark. We pay a mortgage on a place that cost us below 350k and after we pay all our bills, we are left with about 3k a month for savings, fun, nights out, clothing and car parts. It disappears REALLY fast. If that was a mortgage on a 500-550k place our lives would be pretty boring.

Obviously looking at the household income stats, you guys are well above average with a very reasonable mortgage. Which is the way it should be. The funny thing that stood out is you brought up savings. Apparently practicly no one has retirement savings. Mortgage lenders approve you for mortgages that one would never want to be indebted on your own. If people are actually maxing out their mortgage approvals it’s scary as they can’t possibly have any savings on the side. It works these days as your savings are your real estate, as it’s the fastest growing investment. But jeez, I find it scary.

[MarkyMark]

Originally Posted by westopher

Well, at the risk of sharing too much here and having people talk about how I’m a failure because I’m a chef and I’m a broke ass (like some have in the past) I’ll say we are a bit above that 140k mark. We pay a mortgage on a place that cost us below 350k and after we pay all our bills, we are left with about 3k a month for savings, fun, nights out, clothing and car parts. It disappears REALLY fast. If that was a mortgage on a 500-550k place our lives would be pretty boring.

That's pretty much where you want to be in terms of your mortgage and savings per month. I'm going to assume there are no kids in the mix, and you'd have to upgrade to a bigger place if you did?

[westopher]

Exactly. No kids. She’s 28 and I’m 32, and we’d like kids in the next 3-5 years. Living in a 1 bedroom condo, we could get by for a year or 2 with our large den, but it’s not long term.
It’s looking like we will leave this city by that point.
Also by that point hopefully she will be a nurse practitioner which is another example of the city that can’t be afforded by a valuable asset to the community.