i bought my house almost 4 years ago...do i regret it, no, well maybe this house in particular lol

i'm at a lucky position now where i'm taking off travelling for a year and renting my house out....thankfully there are people willing to rent my house at well above my mortgage so it's win/win for me

thanks renters!!

If you can't hack it, you can't hack it! whatever bitter boy!

That's the thing though, I think many parents might not be fully aware of the market the kids are buying into and where the rates are headed. Especially if all they hear about the RE market is from the news and newspaper.

They bought decades ago and sure there may have been corrections along the way, but today their HOUSE values have double, triple in worth. It happened for their house, why wouldn't it happen to their kids with a one-in-a-thousand shoebox condo and no land?

A family friend of mine is a partner in his own business, when he was considering buying a home I sent him all the usual links. He perused them and went to his mom, who also owned her own business, for advice. She told him that buying a place is security, that if the business fails, you will always have a home to come home to and a roof over your head.

At that point he had already made a decision so I didn't debate it, but in that situation I think it would be far less ideal to own a place than to rent. From Garth's blog post today: "When the economy turns lousy and jobs are hard to find, houses usually go illiquid – at the precise moment you might need the most flexibility."

I agree that it is great to go out and explore the world, or even within Canada. Most people in Vancouver live in a bubble and love Vancouver yet haven't truly lived anywhere else. The world is huge, I encourage everyone to go see it for what it's worth.

I disagree that Vancouver is a toxic place. I was born and raised in Vancouver and have lived in Hong Kong for the past 5 years. It has been a great experience and has benefited me greatly financially, but now at my age with a baby on the way and thinking about the future, I can say that Vancouver is a great place to raise a family. I can't compare to anything else except HK, but having more open spaces, less stress and allowing children to be more creative is something that's more important to me than just money. I think about the health care, the education and everything and Vancouver isn't that bad.

Your friends who haven't returned to Vancouver are probably single or people with no kids.

I made a decision to get out of the real estate market early this year, it was a hard decision to make but I didn't feel comfortable that if the interest rate did go up, my family would struggle making mortgage payments and living expenses.

This video late last year got me thinking even though I'm not a big fan of Kevin O'Leary.

-84 percent of pre-tax income in Vancouver for mortgage payment was stated by RBC, doesn't take much of a interest rate increase to put people in the red.

-How much longer can the bank of Canada keep these historic low rates.

People are not as stupid as you think, just as you aren't nearly as smart as you think you are.

If you could leave your own little elitism behind for a while and actually do some thinking, the behaviour you described above is perfectly logical.

The simple explanation is how people are generally linear thinking creatures. I won't bother to going into that because it is a really simple concept. The other slightly less obvious explanation is

1) no one can accurately foresee the future, and
2) your typical person does not have the financial means to weather the storm if their real estate property turns into a negative asset.

When #1 combines to work with #2, it means the risks of getting stuck with a negative asset that the RE property might become is too great. So what do you do when something is too risky? You don't engage in whatever that risky activity is. It is a perfectly logical move, and the simplest form of risk management.

When the RE market sentiments are negative, only big developers and/or financial groups have the financial means to take on that risk of a further depressed market. That's why they are able and willing to buy.

I travel for a living. I go to another continent weekly. I've lived in/visited more parts of Canada then 99.85% of the Canadian public. I've worked in and out of most major cities of the US.

I just moved back to Vancouver, after growing up on the island. I can live wherever I like with the job I have. I still chose Vancouver. My career would probably be better elsewhere, but I am comfortable with my life. I am content = Happiness.

Why did I move back? Because Vancouver is an amazing place. If you need nightlife, move somewhere else. If you love recreation, topped off with beautiful scenery, and all the amenities. Vancouver is amazing.

To each their own.

^ I agree, I travel allot for work as well and imo for overall balance in life, it is hard to beat Vancouver. There is a reason Vancouver is overpriced!!

This is so very true IMO

I lived in Northern California (Sunnyvale) for 4 years, and it's significantly better than Vancouver, AND you can do everything that Vancouver offers, but better (that includes nightlife, outdoors, skiing, beaches, food, driving, salaries, weather, etc,)

I miss California a lot

I go into Kevin O'leary's YouTube channel and the first thing I see is this

I understand he's just supplying what people demand. But the message's condescending. :awwyeah:

Not to mention job growth has stalled in B.C. in 2013. Prices have outpaced the fundamental for far too long but eventually both will converge.

you made the right decision, not many people have the guts like you do. I bought my house in 2009 during the recession and I don't have much mortgage left so I keep justifying that I'll be okay if we go into another recession or if the interest rate spikes. But I'm still worried and keep contemplating on selling and locking in my capital gains...

Trust me, it was very difficult to convince my wife to do this. Our place was bought in 2005 so we did make a good profit from this sale (even after all the closing cost), currently the funds are sitting in a high interest savings account to stay liquid incase I need to access the cash. I'm currently renting a basement in the same neighborhood atm, paying 1000 a month so the lower monthly payments are helping me save up even more. From time to time, I do wonder if I did the right thing, but I must admit that the financial freedom does feel pretty good.

Most people fall into the category of overconfidence and believe what's happened in the past will continue into the foreseeable future. I believe you made the right decision by cashing out. Honestly you are not really losing anything by sitting the sideline in fact like you said renting is actually a cheaper and more flexible alternative.

you say you are now renting at $1000/month...what was your mortgage payment if you don't mind my asking?

i'm currently at $1600/month (was doing $2000 because i could) while i rent it out for the duration i'm away....to many i guess that extra $600 really does make a difference

a bonus for me when i get back is that my house has a basement suite that i'll be able to get min $700+ to help out....that's if i come back lol

My mortgage payment was 730 Bi weekly, so around 1460 per month. It was a 2 bedroom loft with Den so Strata was $340/month. So when I tallied it up, I was paying 1800 per month. My total savings per month is around $800, that goes directly to my savings. My wife decided to stay at home and watch our young children during this period of time, so our finances aren't as strong as it used to be last year. Currently my situation is stable and I can keep up with the mortgage payments, but a few movement of the interest rate would start impacting our current lifestyle.

Do you think any "movement" of interest rate will occur?

I really don't know, but I do know its not normal to have near zero interest rate. To be honest, i've been riding this near zero interest rate for a very long time with a variable mortgage. (over 6 years now that I think about it) So it's almost a gamble on my part to cash out and sit on the side lines. I mean who knows, maybe near zero interest rates can be sustained for another 10 years. But with the recent hint by Yellen, she has hinted that interest rates could start to rise in early 2015(Canada usually follows), you never know what the future holds.

early 2015....i sure hope it's well into 2015 for my sake...as i renew in may 2015

hindsight sure is a bitch though. i locked in at 3.69% instead of doing variable 4 years ago....sure wish i had taken the variable, oh well

Our situations sound similar. Bought at around the same time and locked a portion of mine as well. If rates go up I don't think it will hurt too much as our amount owing is in pretty good shape
Posted via RS Mobile

If U.S. job market significantly improves this year which I think it probably will then Fed will have to stop Large-scale asset purchases and basically go back to a standard policy stance for a normal operating U.S. economy. Rates both short term and long term will liftoff in this case.

I am in the camp that U.S. housing market will diverge big time from Canadian market in the next 5 or so years. American households cut down a lot of debt during the crisis and with job market on the mend rates increases won't hurt them as much. Housing affordability still very reasonable even with the big increase last year.

We Canadian on the hand is completely opposite. Consumer leveraged up the the max here in Vancouver and nationwide really. Job market stalled. A lower loonie will help our exports but companies haven't invested much in their businesses or moved factory offshore coming out this 08/09 crisis therefore a larger currency depreciation won't stimulate the economy as much this time. If rates go up here I think a lot of homeowners will be in trouble. I'm not predicting a crash but I am definitely prepared for it if it does happen.

I agree with you that us Canadians are leveraged up the max here in Vancouver and nationwide, this is whats scary as reported by RBC-
(Detach bungalow)
Ottawa,Montreal,Calgary,Edmonton-Mid 30's% pre-tax income.
Toronto-56% of pre-tax income.
Vancouver-84% of pre-tax income.

It looks like we are the biggest gamblers when it comes down to housing, putting almost everything on the table.

What are we exporting these days? The US isn't buying our resources as much anymore and the growth in China is slowing, thus hurting out commodities-based economy. I'd say we're in for a recession in the next year or two, because there are no signs of anything stimulating our economy. So if people truly are leveraged that much in our cities, a bump in unemployment could send things downward quite quickly.

Just a few hours south of Vancouver, the tech industry in Seattle is getting crazy and the housing prices have went up considerably. Rent is quite expensive there now but that's because rent is driven by economic conditions, so it makes sense. I've been in the Vancouver real estate market since 2000 and it's not fundamental economics that has caused the house prices to rise this much.

i can hack it fine, thanks - had one of the better careers of the people i know.

moved, make >50% more, live a life that is WAY more rewarding, exciting, and opens up huge opportunitites

it's not that i couldn't 'hack it' i was living a very privileged life, for saying it is 100% of my own doing/hard work, but the point is life outside of vancouver can be WAY better than life inside - if you've never lived around the world (which many don't have the ability to do), then you won't realize just how stunted life in vancouver is.

it's hilarious that you think i left because i couldn't hack it - i left because vancouver couldn't GIVE ME enough, not the other way round

you hit the nail on the head.

great place to raise kids - but the thing is, if you're kids are going to be successful, they'll likely have to leave in their 20's too. that's the bit that needs to change in vancouver, it needs to be a great place to retire, raise kids, educate kids, safety, healthcare (all there) - but also needs to be a great place to build a career.

vancouver's too small of a town to talk like it talks (or should i say for the residents to talk so big)