Vancouver's Real Estate Market

[hi-revs]

Its never really a bad time to buy property tbh.
Think about it, the sooner u buy, the sooner u pay it off and/or can use the equity as leverage.
Like someone said a few posts up, as you wait for prices to drop, you end up paying a large chunk of the "savings" into rent.

The whole point of getting into real estate is about building equity and using it to leverage for other properties, is t it?

[Sw0op]

Originally Posted by Gerbs

To be fair, some of my friends that are dropping $600 - 900k on their first family home will likely be settling into their forever home unless they start making more money or receive a fat inheritance.

They said it's pretty hard to increasing their household income beyond $250k with their SO. So with that said, make sure you actually buy a home you like. Instead of buying a property just because everyone around you is doing it.

@ $250k household income that means they net $157k (or $13k/month)...with their mortgage @ $900k and lets say they're tied in @ 3% rate their monthy mortgage is $4,300/month...that's $8,700/month in dispoable income...

not sure where that dispoable income is going to but if they are paying daycare costs/nanny once the kids go to post secondary school and can sustain themselves..thats quite a bit of money they can save and put it towards their mortgage balance and build up capital...things can change pretty quickly when that happen.... or they can just keep living that lavish lifestyle...but im upgrading after saving a few years with that much disposable!

[Sw0op]

Originally Posted by Jmac

If you're looking at a $1M property with a 20% down payment and a rate of 2.49%:

Accelerated weekly payments (20-year amortization paid off in 18 years): $1058/week
Monthly payments (25-year amortization) and a supplementary payment every July: $3580/month + $12167/year

Median sale price in Vancouver is currently slightly over $1M ($1.036M)

you can amortize to 18 years but reality is people will amortize to 25 years and i would hope that people throw in a chunk at the end of (or almost) each year which would bring down your payback period to less than your amortization period

[DA9ve]

Originally Posted by Sw0op

you can amortize to 18 years but reality is people will amortize to 25 years and i would hope that people throw in a chunk at the end of (or almost) each year which would bring down your payback period to less than your amortization period

pre payment near the end makes sense however with interest rates where they are now, i wouldn't be running to the bank to prepay when its cheap to borrow.

[bcrdukes]

Is $250K household income the new benchmark? Did everybody become Wall Street stock traders and lawyers overnight?

[JDMDreams]

I actually had a conversation with my friend who makes around 100k that they have no motivation to work more ot as the more money they make it just goes to taxes. So they rather have the time off. Sadly this is the structure of the Canadian tax system, they reward the lazy and punish the motivated.

[JDMDreams]

And I would argue prepayment near the beginning of the mortgage makes the most sense, you will be broke but that's when you pay the highest amount of interest since your balance is so big. Pre paying a lot near the end is just to pay off the mortgage, but your savings is minimal as there's barely any interest charged vs principal. If you play around with an amortization calculator, your monthly payment at the beginning of the loan is around 50% in interest so you're barely paying any principal.

[Tapioca]

Originally Posted by bcrdukes

Is $250K household income the new benchmark? Did everybody become Wall Street stock traders and lawyers overnight?

Two tech salaries, even in Vancouver, can easily get a household income into the mid-200s.

Or the typical mid-manager in the private sector and public sector subject matter expert combination can get a household over 200K.

I would argue these days that more people tend to partner up with people like themselves. If you're a highly educated, high income earner, you're probably going to form a household with a similar person.

Originally Posted by JDMDreams

I actually had a conversation with my friend who makes around 100k that they have no motivation to work more ot as the more money they make it just goes to taxes. So they rather have the time off. Sadly this is the structure of the Canadian tax system, they reward the lazy and punish the motivated.

I hear this argument quite often. It's how income taxes are calculated on additional compensation, like OT or bonuses. If you're making over 97K as base compensation, you barely notice the higher marginal tax rate you're paying over the entire year.

[CRS]

Originally Posted by JDMDreams

I actually had a conversation with my friend who makes around 100k that they have no motivation to work more ot as the more money they make it just goes to taxes. So they rather have the time off. Sadly this is the structure of the Canadian tax system, they reward the lazy and punish the motivated.

This likely isn't correct. Canada has a tiered tax system. You're correct in saying that those making more are taxed more (as they progress through the higher brackets) but this doesn't mean that they bring home the same (or less) money.

In fact, with the tiered tax bracket:

15% on the first $48,535 of taxable income, plus
20.5% on the next $48,534 of taxable income (on the portion of taxable income over $48,535 up to $97,069), plus
26% on the next $53,404 of taxable income (on the portion of taxable income over $97,069 up to $150,473), plus
29% on the next $63,895 of taxable income (on the portion of taxable income over $150,473 up to $214,368), plus
33% of taxable income over $214,368

This means that your buddy could be making another at least 50k with the same percentage of taxes taken. The money they make doing OT (at 1.5x or more?) going only to taxes is one of the most fundamentally incorrect statements that a lot of people make without actually looking into where it goes. This is like how people used to say you only use 10% of your brain and that is also fundamentally incorrect but it's catchy and sounds sort of believeable.

I would argue that the first 55k-ish is the most taxed as you have to pay EI/CPP contributions from that and they stop after you hit the max annual amount.

[bobbinka]

people need to educate themselves on how the tax system works, it's a big part of life.

[Hakkaboy]

yeah, I never understood how people think like that. But I think I get it.

Maybe if they work a few OT shifts and notice that the portion of the take home pay seems less than before, i.e. earn extra 1000, but get 500 eaten by taxes, so you think you are now paying 50% tax compared to the previous ~25% so it's not worth it?

Well, when they do their taxes at the end of the year, don't they notice a refund coming? Hmmmm...where do you think that money comes from? Magic?

(ignoring RRSP/donations and other deductions)

[quasi]

I thought I made a decent wage and with the income of my wife and myself combined I felt we were doing OK but reading the last few pages of this post feeling really poor and hard done by. Haha

[CRS]

Originally Posted by Hakkaboy

yeah, I never understood how people think like that. But I think I get it.

Maybe if they work a few OT shifts and notice that the portion of the take home pay seems less than before, i.e. earn extra 1000, but get 500 eaten by taxes, so you think you are now paying 50% tax compared to the previous ~25% so it's not worth it?

Well, when they do their taxes at the end of the year, don't they notice a refund coming? Hmmmm...where do you think that money comes from? Magic?

(ignoring RRSP/donations and other deductions)

This is straight up lazy accounting on whoever is issuing pay.

It happens a lot but everyone is content to just blame the government.

[twitchyzero]

techs 120k easy?
link me job posting because I’m switching

[bobbinka]

Originally Posted by CRS

It happens a lot but everyone is content to just blame the government.

Not the same scenario you're referring to, but just want to add:

A lot of times people blame the government because they don't know any better. They pay someone (ie. lawyer, accountant) to take care of things and assume that because they're paying good money, the guy must know what he's doing. So when things go wrong, or the outcome isn't what they wanted, it must be the government's fault.

[unit]

Originally Posted by Tapioca

Two tech salaries, even in Vancouver, can easily get a household income into the mid-200s.

Or the typical mid-manager in the private sector and public sector subject matter expert combination can get a household over 200K.

I would argue these days that more people tend to partner up with people like themselves. If you're a highly educated, high income earner, you're probably going to form a household with a similar person.

mid 200s from two tech salaries in vancouver? seriously, where? that's definitely on the high end, and then to find a partner that makes that sort of pay as well, it's not anywhere near a typical scenario.

[Hehe]

Tech jobs in YVR just don't pay that much.

If that was the norm, many of my friends wouldn't need to move to places like TO, Seattle or SF.

Don't get me wrong, a tech person, say a programmer still make decent income... but you'd be in the upper tier if you clear over 120k a year (on salary, not contractor or hourly paid) here in Van.

[Traum]

Tech jobs in Vanocuver tend to have salaries that are lowered than their counterparts in other parts of N.America. Add in our costs of living, and the fact that Seattle is a hub of high paying tech jobs, there is little wonder that many of our smartest techies headed down south.

[Traum]

Originally Posted by JDMDreams

I actually had a conversation with my friend who makes around 100k that they have no motivation to work more ot as the more money they make it just goes to taxes. So they rather have the time off. Sadly this is the structure of the Canadian tax system, they reward the lazy and punish the motivated.

I wouldn't call people lazy -- it is just a matter of preferences in terms of work-life balance. Esp when Vancouver is such a nice, beautiful, and comfortable city to live in, why waste all your up and awake hours slaving away at work?

There is a reason why BC (and Metro Vancouver in particular) have some of Canada's healthiest population -- it is because we "slack off", "waste" more time on recreation and sports, why we have such an awesome variety of super tasty restaurant scene, etc.

You can't have your cake and eat it too.

[Gerbs]

Originally Posted by bcrdukes

Is $250K household income the new benchmark? Did everybody become Wall Street stock traders and lawyers overnight?

From what I see, a majority of tech dev/sales jobs will get you to that type of household income in your late 20's / 30's in Vancouver.

I'm curious as to what the 25 to 35-year-olds are doing for work to qualify for a $400k - 1M loan. I feel like more professional business jobs cap out around $70 - 110k after 10+ years of experience and designations/grad schools.

Originally Posted by Hakkaboy

Well, when they do their taxes at the end of the year, don't they notice a refund coming? Hmmmm...where do you think that money comes from? Magic?

(ignoring RRSP/donations and other deductions)

I feel like 75% of my friends think the refund is just magic number that the government decided to give them. They get upset at the government when the return isn't what they expected.

[smoothie.]

Originally Posted by Gerbs

From what I see, a majority of tech dev/sales jobs will get you to that type of household income in your late 20's / 30's in Vancouver.

I'm curious as to what the majority of 25 to 35-year-olds are doing for work to qualify for a $400k - 1M loan. I feel like more professional business jobs cap out around $70 - 110k after 10+ years of experience and designations/grad schools.

I'd love to see what you see....

[Eff-1]

Originally Posted by Ch28

You’re right. I should just make the biggest purchase of my life so I can appease a complete internet stranger that I give zero fucks about

Well in all fairness, my wife and were looking to buy a presale back in 2017 and so I'd read this thread a lot, and I also remember you were asking all these same questions back then too.

We bought a presale at the MARKET PEAK, mid 2017. Paid insane money plus GST. Terrible timing in hindsight.

But we're now moved in and we love our place. On paper, it's already worth less than what we paid, but we have no regrets.

[bcrdukes]

Vancouver isn't Silicon Valley. Google, Cisco, and Apple aren't paying Bay Area salaries. Public Sector SMEs? Are we talking about the one Sikorsky helicopter repair specialist in the entire province, or the Parks and Recreation consultant who is here on contract on a deliverables basis, and holds the one job in the entire city for the next five years? Because that's not the norm, nor does it define the benchmark, and definitely not always realistic. I'd say the guy next door who got fired from his public sector job brewing up crystal meth makes more than everyone on this page.

[Gerbs]

.

[Gerbs]

Originally Posted by twitchyzero

techs 120k easy?
link me job posting because I’m switching

I wouldn't say it's easy, you put in work but it's something that is definitely achievable as a developer. A $120k base salary is pretty rare in Vancouver and is usually at public companies. However, you should exceed $120k total compensation after you factor in stock compensation and bonuses for most devs working at Shopify/Amazon/Microsoft/Salesforce. Shopify was planning on hiring 1000+ employees for a possible Vancouver office. But they might transition to working remotely so they'll be hiring all across Canada/US.

https://dailyhive.com/vancouver/shop...work-from-home

My friends that recently graduated accepted offers of $90k at EA and $82k at Deloitte. Not everyone makes the $100k+ salary that you hear about. But they think that'll change once they hit senior roles/job hop.

Originally Posted by Hehe

Tech jobs in YVR just don't pay that much.

If that was the norm, many of my friends wouldn't need to move to places like TO, Seattle or SF.

That's so true, everyone is moving east or south because there's more opportunity and the pay is significantly higher.