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Vancouver Off-Topic / Current EventsThe off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.
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
U live in Richmond, go travel the world and realize what's important before saying things about buying a place in and around Vancouver.
Everyone I know that has left Vancouver, me included, hasn't returned and for good reason. Vancouver is a toxic place - I won't explain why I say this.
If you can't hack it, you can't hack it! whatever bitter boy!
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Parents should help their children better assess the market they are buying into and where rates are headed.
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."
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Quote:
Originally Posted by 4444
Here's a but of life that's coming ur way:
Ur gf will leave u, or vice versa
Ur 24, u don't know shit about what u will do
U live in Richmond, go travel the world and realize what's important before saying things about buying a place in and around Vancouver.
Everyone I know that has left Vancouver, me included, hasn't returned and for good reason. Vancouver is a toxic place - I won't explain why I say this.
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.
They buy when the market is excited (expensive), but leave the market when sentiment is negative (prices cheap)
How else do u explain that the biggest day of stock selling was at the trough of the financial crisis - ppl r idiots, that's how!
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.
^ 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!!
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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.
Your friends who haven't returned to Vancouver are probably single or people with no kids.
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 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.
3 Reasons Canada’s Real Estate Market Is in Trouble
Over the last decade, you’d be hard pressed to find a better performing sector than real estate in Canada.
House prices have essentially doubled in that time, and yet the average household income hasn’t risen much more than inflation. Canada’s market has survived a U.S. housing crash, a world economic slowdown and former Finance Minister Jim Flaherty’s best efforts to suppress the market with mortgage qualification restrictions, like eliminating 0% down mortgages and shortening the maximum amortization period to 25 years, from a previous maximum of 40.
Mostly thanks to low interest rates and the perception that real estate is safe, the market has shrugged off any bad news and continues to hit a new record high almost every month. But like all good things, this ride will also come to an end. Here are three reasons why it’ll happen.
1. Increasing interest rates
The only reason why Canadian housing is reachable for the average family is low interest rates. Historical norms for mortgage rates are in the 6% range, at least double what you’d pay today.
While I’m not predicting interest rates to suddenly double overnight, I am predicting a slow return to more normalized rates. The United States is chugging along nicely. Unemployment keeps going down, so the Fed will continue to taper. This will cause interest rates to slowly rise, and this will eventually make its way to Canada.
A 1% rise in interest rates doesn’t seem like much, but it can have a huge effect on a homeowner. If you owe $400,000 on your house, an extra 1% is $4,000 per year, or more than $300 per month. Canadians have record low savings rates and record high debt. There are a lot of people who can’t afford an extra $300 per month.
2. Record high debt
As a country, Canada is maxed out.
The average household owes $164 in debt for every $100 in disposable income. This is slightly down from record levels, which peaked at 164.2% of disposable income. This is right around the level the U.S. peaked at in 2007. Growth in borrowing against houses is staggering, and many Canadians use home equity lines of credit (HELOCs) as a way to consolidate higher interest credit card debt. We’re borrowing against our houses to consume. Canada’s largest bank, RBC (TSX:RY)(NYSE:RY), grew HELOC lending by eight times from 2004 to today. That’s a massive increase.
This creates a situation where the average Canadian is in deep trouble after just a couple of weeks without a pay cheque. If I had no wiggle room, I’d probably stop paying my credit card or student loan before I stopped paying my mortgage, since keeping the house would be a priority. But what if I’d consolidated all that debt into a line of credit, secured against my house? I’d need to find another solution, and fast.
3. Nobody left to buy
Increasingly, young Canadians feel as if it’s impossible to enter the housing market. Activity from first-time buyers is starting to dry up. The slack is currently being picked up by people who are using low interest rates and some of their newfound equity to upgrade to a better place. Any healthy real estate market needs first-time buyers. There are hundreds of thousands of condos being built in Canada, especially in Toronto and Montreal. If first-time buyers don’t gobble those up, it could start a cascade of decreasing real estate prices.
If condo prices start to fall, look for the thousands of “investors” who’ve speculated in big city condos to get nervous and exit the market in droves, further depressing the market.
These are the main reasons I’m reluctant to buy shares in Home Capital Group (TSX:HCG), even though it’s reasonably attractive on the surface. Yes, it has solid underwriting standards, but it’s still lending to people regular lenders won’t touch. The super low default rate of 0.09% is partly because a rising market will help a distressed homeowner get out of a property with a portion of their equity intact.
I’m not predicting bankruptcy for Home Capital or anything close, but there’s a reason why it’s the cheapest mortgage lending stock in the country. Sentiment will send the share price lower if the national real estate market suffers.
Foolish bottom line
It’s simple. At some point, the Canadian real estate market will start to stumble. While there’s still the hope of a soft landing, it’s hard to make the argument that the sector is primed for another decade of growth. Even though Canadian lenders are well capitalized and have solid balance sheets, the vast majority of their earnings growth has come from increased mortgage lending. Look for lenders like Home Capital to underperform going forward.
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.
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...
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.
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.
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.
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
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.
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?
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
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.
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.
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.
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.
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.
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If you can't hack it, you can't hack it! whatever bitter boy!
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
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.
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)
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