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Vancouver: Young, Successful & Renting
by Barry Artiste | November 17, 2007 at 09:03 am | 756 views | 5 comments
Opinion
Barry Artiste, Now Public Contributor
Some may feel the Realtor who says homes in Vancouver are still quite affordable, doesn't quite understand most prospective homeowners do not wish to pay 400K for a 400 sq.ft broom closet, or pay close to a million dollars for a single family home with the standard "Grow op helper", errr I mean a "In law suite" as a mortgage helper. Vancouver seems to be the only city which feature this phenomena of Vancouver homes with built in "In law suites" in Canada.
At 33, Shannon West is part of a growing demographic on Canada's west coast.Young, single and successful, but unable to afford a home of her own in Vancouver -- the most expensive housing market in the country.
"Obviously I want to buy, I've been paying almost $900- a-month rent for two-and-a-half years and I'd much rather have that going toward a mortgage," said West.
Despite bringing home about $60,000 a year after taxes as a dental hygienist, West said she's been unable to find a decent property she qualifies to buy.
"I heard on the radio the other day that you have to consider that to get a mortgage in Vancouver, 70% of your income is going to go toward paying your mortgage, which is about right," she said.
"If I bought something I want, it would be at least $3,000 a month for the mortgage."
Finding something less than five years old that's bigger than 400 sq. ft. for under $400,000 has been a chore.
"I have a friend who's been an engineer for the city for 14 years and makes more than I do, and he told me he sat down and did the math the other night for getting a mortgage and with the interest over the next five years -- which would probably be a turnover point for him to buy something for a family -- it's cheaper for him to rent.
"It's more economical for him to continue to rent in Vancouver than to buy something and to roll it over."
West sees herself in the same boat.
"I can't do it without a second income that is equal to, or greater than, my own," she said.
"There's just no way if you want to own a car and have some degree of lifestyle."
The situation frustrates her.
"I worked my ass off to get a great career and make money so I can afford a home and things I like and I can't do that," she said.
"I would never consider having a family and trying to own a home right now, there's no way.
"I'm crossing my fingers and waiting until after (the Vancouver winter Olympics in) 2010 and thinking, possibly, our housing situation will improve."
West's situation isn't unusual said Cameron Muir, chief economist for the B.C. Real Estate Association, as homes in Vancouver continue to skyrocket in price.
"One of the things here is supply is quite low given the demand that's out there," he said.
But that doesn't mean the city is unaffordable when it comes to buying a home.
"In the sense of relative affordability across the country, obviously it's not going to seem very affordable," said Muir.
He pointed out the fact homes are selling means they are somewhat affordable.
"On one hand, you can't say they're not affordable because if they weren't we would see very low sales levels, but we're seeing very high sales levels so obviously someone is able to afford to buy those homes," he said.
"But from a first-time buyer perspective, yes, affordability is being eroded by rising home prices, although we are seeing prices moderate."
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November 17, 2007 at 09:03 am by Barry Artiste, 756 views, 5 comments
Author
Crowd Power
Barry Artiste
Vancouver, British Columbia, Canada
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Comments (5)
at 16:13 on November 17th, 2007
Oh man can I relate... what Muir doesn't cop to is that he's getting
rich on sales to overseas buyers. The turnover in housing has nothing
to do with people who actually live here - except maybe realtors,
developers and drug dealers... (need I say more about the vancouver
economy). The average price of a single family home by the end of 2008
is projected to be 950K. While the average two income family will pull
in around 67K anually. That's insane - it's the biggest gap in North
America. So yes, it's completely unaffordable even to families that
make double the average inome. The boxes they are building in the sky
here are soul-less undifferentiated cells (the above mentioned 400k for
400 sq.ft.). Take a quick walk into Coal Harbour here and you'll find
an occupancy rate of less than 40%. The rest are owned by rich foreign
investors.
Mr Muir - give your head a shake. Sam Sullivan, keep an eye on Messr's Rennie and Co. there selling your city out from under your feet!
This is timely, and an under discussed issue in this city. Good Stuff
at 17:42 on November 17th, 2007
So true Armchairsports, as well the city of vancouver have raised property taxes to such a level that seniors who have lived downtown in their little peice of home in their retirement years with their homes bought and paid for decades ago, find themselves forced to sell their homes as they cannot afford the crushing property taxes, this is much to the delight of developers who are awaiting with bulldozers to make way for multi townhomes, and all with the city approval. The more infill housing on a single lot the more property taxes the city can collect. It is certainly not fair. People who do have homes have no furniture to furnish the home as they are tapped financially when 70% of their inciome is used for a mortgage payment, in fact some facing poverty resort to food banks, thus house rich cash poor. Certainly tragic in this day and age.
Thank you for your comments and the GS flag
at 18:27 on November 17th, 2007
I never thought I'd move to a Canadian city from NYC and shiver t the sight of real estate prices... yet here we are.
at 21:26 on November 17th, 2007
Barry, I suppose with the Olympics coming the prices will contiue to rise. I wonder if the Olympics will help or hurt the average citizen in Vancouver. Good story.
at 09:58 on November 18th, 2007
Thanks for the comment and GS Flag Dave.
I am no real estate expert, but considering past house prices before the Olympics house prices continue to spiral out of control, for the past 5 years there have been bidding wars amongst home buyers. Some fear with the Olympics rental housing will be certainly scarce as some landlords looking to make a quick buck renting to visitors, will shove out present tenants in the quest to make a years rent in a few short weeks from visitors looking for accomodation for the Olympics.
My time in the Ministers office of Canada Customs and Revenue Agency as well as Immigration saw the following in Canada, with a majority of immigration in Vancouver, where the ocean and temperate climate made Vancouver most desirable for many immigrants.
The 1986 Expo games in Vancouver saw a dramatic rise in real estate in Vancouver, the real estate boom and downtown sale of waterfront property, yaletown and surrounding lands political scandal with a minor real estate dip soon after, then with the fall off communism in Russia, then Hong Kong being handed over to China becoming a Special Administrative Region, the fall of South Africa Aparthied, Britian and Australia economic problems, Canada saw an opportunity to bring in immigrants with truckloads of cash, so then our Prime Minister Jean Chretien's offer of Canadian citizenship for sale for $250,000 saw Vancouver house prices all of a sudden peak on average coincedentally at $250,000. Soon after citizenship was raised to $500,000 and guess what Vancouver House Prices rose to a average peak of $500,000. (This building boom saw houses and buildings hastily constructed by numbered companies of questionable building skills resulting in building defects known as the leaky condo fiasco, which made many homebuyers leery of stratas) and house prices in the rest of Canada did not dramatically rise at all, except in Vancouver, being the most desirable place to live for China, South Africans, Australians.
It is quite interesting to see how our house prices skyrocket when immigration waves hit our shores. We had waves of asian immigrants come to Vancouver, the first two waves were the well to do, with the 3rd and 4th waves to be lesser well off financially, with some leaving Canada when it was found language was a problem and money making was proved not as lucrative as in Hong Kong. My girlfriend Wendy is Chinese and 5th Generation Canadian still with relatives in China and her profession is economics and trade as she has a pulse on the world as well as asian migration and economy,and is a wealth of info for me in writing this at 4am, sleepily she is dictating some of this as I am writing these above comments in her payamas. She is one smart cookie, who I am in awe of as she is scary smart even at 4am. Ohhh I am stereotyping here on Asians.
In the early 2000 my parents sold their sprawling home in Sacremento and decided to move to Oregon as most Californians started to migrate to Oregon (during it's economic boom).
The citizens of TAX FREE Oregon were none too pleased with Californians migrating to thier state, saying the Damn Californians are buying all our land, raising house prices with their Mansions. So much the same happened in Oregon, and now within the last 5 years Oregon and Seattle are seeing a drastic economic downturn where house prices are dropping to by the thousands, will it happen here? Perhaps not, but if mortgage rates go up a single point in Vancouver and or both unemployment goes up, you could a similar downfall of house prices as homeowners are pretty much stretched financially today with many of them deciding if they should eat, pay daycare, put gas in the car or have a roof over their head. It is more common than we think according to my RBC investment buddy, thousands of Vancouverittes who are House Rich and dirt poor at the same time.
If Now Public readers wish to see economic trends you should visit my buddy Robert Shiller web site http://www.econ.yale.edu/~shiller/
He can set everyone straight where the economy is going.
In ending Dave, thanks for the interesting and intelligent comments as I am sure most readers to my column have opinions on this as well. I hope I recieve more comments from Now Public readers on this article.
Well Dave, Wendy wants me to get off the damn computer and get back to bed. Chat laters.