Why two twenty-somethings left the Lower Mainland for the North

[Metro-One]

Originally Posted by twoNeurons

I LOVE Osaka, but to be fair... it's STILL Japan... and Japan is still full of mostly Japanese. While the selection of Japanese food will be excellent, the immigrant population just isn't there to support ethnic food.

How's your Japanese, by the way? Was it tough finding work in Japan in a profession other than English teacher?

Yeah, so food is one sacrifice you must make to live here. A lot of people don't know just how great Vancouver is for food (again, for dinning out AND simply shopping for home products / ingredients).

まだ僕はちょっと日本語を話せます。日本人の友だちはいつも英語を話したがっているのです。

でも、毎日一人で一時間ぐらい勉強しています。

あなたは日本語を話せますか。

[Alex Mackinnon]

Originally Posted by 240glt

I highly doubt this is true.

People will buy when they can afford to buy or find themselves in a stage in their lives where buying makes sense, if they can't or don't, they rent

We don't live in Europe and the fundamentals are very different in many ways

You might think that, but renting is stigmatized and home ownership is idolized.

[logicbomb]

Originally Posted by s211

Because that's worked so well so far to curb rising housing costs here?

It's funny how people still believe that. (Hyper) Densification will do the bare minimum to address housing affordability. We would have to essentially build beyond the needs of our current and future population- greatly contributing the need to upgrade and build new infrastructure- just to see prices temporarily plateau. All this to appease developers and foreign investors? It's asinine.

The Oak and Cambie corridors are a good examples of how densification is doing little to address affordability. SFO homes built prior to 1995 are being torn down to make way for condos which are about the same price per unit as those individual properties were circa 2011-12. Look at Metrotown too, 750k for a 2 bdrm condo?

With the looming economic crisis in Asia, we are all truly utterly screwed as there will undoubtedly be an influx of foreign buyers making their way into the Lower Mainland. ALREADY...Already been an absolutely crazy week in South Surrey/Langley (sibling is a real estate agent).

Renting is perhaps most realistic but is it optimal? Air B&B's and vacant dwellings have left renters scrambling to find anything they can get. Some sly landlords are staging open houses to generate bidding wars...

[240glt]

Originally Posted by Alex Mackinnon

You might think that, but renting is stigmatized and home ownership is idolized.

So what ? Why would someone care ? Almost everyone has rented at some point, most go on to be home owners eventually.

For some renting works well for their lifestyle, and there are a myriad of good reasons to purchase a home as well.

Stigmatizing renters is silly, so is assuming that renting is somehow "better" than owning

[Alex Mackinnon]

Originally Posted by 240glt

So what ? Why would someone care ? Almost everyone has rented at some point, most go on to be home owners eventually.

For some renting works well for their lifestyle, and there are a myriad of good reasons to purchase a home as well.

Stigmatizing renters is silly, so is assuming that renting is somehow "better" than owning

The implication is that people buy even if it's not a particularly bright move, mostly because it's "the thing" to do. Keeping up with the Joneses and all that junk.

[240glt]

^ There is a wide range of reasons that people decide to buy. I think, if you really looked into it, "keeping up with the Jonses" would not be anywhere near the top of the list

I think that's more of a false consensus from those who for some reason are bothered by other people purchasing real estate

[Jebby]

Originally Posted by 240glt

People will buy when they can afford to buy

Many people buy when they can't afford to buy or would be better off not buying.

[Alex Mackinnon]

Originally Posted by 240glt

^ There is a wide range of reasons that people decide to buy. I think, if you really looked into it, "keeping up with the Jonses" would not be anywhere near the top of the list

I think that's more of a false consensus from those who for some reason are bothered by other people purchasing real estate

Then why is this a thing?

I really don't know anyone in my age group that I think should be buying in the city and my friends are mostly yuppies who are the prime market demographic that should be buying. Not many people my age have an income of over $100K. Hell, not many have incomes over $50K...

[tonyvan]

Originally Posted by Hourglass

I recall that in Switzerland, foreign investors are limited in the places and developments they can buy into. While there are likely issues in terms of enforcement and tracking (not to mention incentivising developers), maybe it's time for BC to look into a similar system.

Most buyer restrictions wouldn't work.

Examples:

Australia has strict restrictions targeting rich foreign buyers but the country still is still one of the most expensive in the world. Vancouver would be considered very affordable in Australia.

China itself has one of the most strict policies in the world to stop speculators. In most big, desirable cities, you have to live and pay taxes to the city for at least 5 years in order to be eligible to buy a property. And in most cities, first property you have to pay at least 40% down payment, with 60% down payment on your second property. Third property is usually completely banned. Mortgage interest rate is also much higher at ~6% and only variable rates are available. Also, when selling your second property, an extra 20% is taxed on the increased value of the property. Even with such strict restrictions, desirable cities like Shanghai and Shenzhen still see double digit price increase every year....

The reason is simple - as long as there are people moving to your city, price will increase unless you build more units to accommodate these people.

The bottom line is supply and demand - in order to slow price increase, there's only one way: build more condos and demolish the single family houses. And this has to be done near the city centre otherwise you would have a low density core with sky-high prices surrounded by affordable high-rise condos in the near suburbs (which is sort of happening already).

Also the same economics happens in localized parts of the city. If you stop densifying downtown, it will get more expensive as the supply has stopped growing and more people moving to the city want to live there. This will gradually push lower income people to undesirable areas of the city. So densification is the ONLY solution. Forget about taxation, restrictions and manipulation. They won't work....

And if policy makers reject densification, San Francisco is the future - extremely high price within the city simply because vew few new housing stocks are added to the city. The whole city gradually became Vancouver's west side - a resort for the super rich.

[tonyvan]

I just bought a place in East Van at around 400K. It's a two bedroom, post-2005 condo, close to Skytrain. After 20% down, monthly mortgage is 1280, lower than my current rent for a one bedroom in downtown (1380). So according to CMHC's mortgage guidelines, a person/family earning 60K per year can afford this place(35% gross income goes to housing). I don't understand why people always fixated on SFH or penthouse units or luxury highrises when talking about affordability. Vancouver is growing up, meaning it's not a collection of suburbs like smaller cities are. So accept the fact that you need to live in a condo/townhouse or move farther away. You never hear New Yorkers or Londoners or even Torontonians complaining they cannot afford a SFH 2km to downtown do you?

[Vancity]

Originally Posted by tonyvan

Most buyer restrictions wouldn't work.

Examples:

Australia has strict restrictions targeting rich foreign buyers but the country still is still one of the most expensive in the world. Vancouver would be considered very affordable in Australia.

China itself has one of the most strict policies in the world to stop speculators. In most big, desirable cities, you have to live and pay taxes to the city for at least 5 years in order to be eligible to buy a property. And in most cities, first property you have to pay at least 40% down payment, with 60% down payment on your second property. Third property is usually completely banned. Mortgage interest rate is also much higher at ~6% and only variable rates are available. Also, when selling your second property, an extra 20% is taxed on the increased value of the property. Even with such strict restrictions, desirable cities like Shanghai and Shenzhen still see double digit price increase every year....

The reason is simple - as long as there are people moving to your city, price will increase unless you build more units to accommodate these people.

The bottom line is supply and demand - in order to slow price increase, there's only one way: build more condos and demolish the single family houses. And this has to be done near the city centre otherwise you would have a low density core with sky-high prices surrounded by affordable high-rise condos in the near suburbs (which is sort of happening already).

Also the same economics happens in localized parts of the city. If you stop densifying downtown, it will get more expensive as the supply has stopped growing and more people moving to the city want to live there. This will gradually push lower income people to undesirable areas of the city. So densification is the ONLY solution. Forget about taxation, restrictions and manipulation. They won't work....

And if policy makers reject densification, San Francisco is the future - extremely high price within the city simply because vew few new housing stocks are added to the city. The whole city gradually became Vancouver's west side - a resort for the super rich.

Guess we're not the only city struggling with housing affordability.

[Vancity]

Originally Posted by tonyvan

I just bought a place in East Van at around 400K. It's a two bedroom, post-2005 condo, close to Skytrain. After 20% down, monthly mortgage is 1280, lower than my current rent for a one bedroom in downtown (1380). So according to CMHC's mortgage guidelines, a person/family earning 60K per year can afford this place(35% gross income goes to housing). I don't understand why people always fixated on SFH or penthouse units or luxury highrises when talking about affordability. Vancouver is growing up, meaning it's not a collection of suburbs like smaller cities are. So accept the fact that you need to live in a condo/townhouse or move farther away. You never hear New Yorkers or Londoners or even Torontonians complaining they cannot afford a SFH 2km to downtown do you?

Maybe they do, and we just don't hear about it.

But NYC is a different beast. They also have a more robust transit system, and most of the general public take transit. We don't have that here in Vancouver. People living farther and farther out are forced to commute by car. It's not possible (at this moment, or time) to take transit from Maple Ridge, or even Surrey. Our system is just not quite there yet, and may never get there in our lifetimes. There's no enough political will to create a more robust transit system.

[240glt]

Originally Posted by Alex Mackinnon

Then why is this a thing?

I really don't know anyone in my age group that I think should be buying in the city and my friends are mostly yuppies who are the prime market demographic that should be buying. Not many people my age have an income of over $100K. Hell, not many have incomes over $50K...

Thing is though is that article could have been written in 2005. Or 1995 for that matter.. Parents healing their kids with a down payment on a first home is certainly not a new phenomena.

I do agree with more and more younger buyers expecting to buy beyond their means.. I've seen that directly in my young staff and my younger sister's friends. But is not being able to buy beyond your means really a good reason not to buy at all ? Maybe so for some people

Anecdotally though, both my partner and I purchased our first apartments back in 2001 ( before we met) , both units well within our means (so no floor to ceiling glass, granite & upscale finishes) we sold both our apartments and now currently own two houses, one we live in and one a rental that I owned before we got together seven years ago. Neither of us has ever paid more to own than we would have to rent, and in fact my properties have always saved me a fair amount of money compared to renting. So for a modest outlay of a down payment each back 15 years ago, and then basically paying the same amount to rent anyways, we're now in a position where we've got roughly $750k in equity in our properties on a debt load of about $200k, and I just turned 40. Dual incomes has helped greatly by we only started co- habitating full time here 3 years ago. Until that time we were supporting to separate residences.

So the question is: would you forego a prime location and a new or upscale apartment in favour of getting into the market ? If not, that's great.. Renting is probably the best choice. But if that's the mindset that you described up thread as being "keeping up with the Joneses"

[Caliplanner1]

Originally Posted by Jebby

Bad idea. Restrictions such as that have led Switzerland to have a huge housing shortage and have increased rents on existing housing stock in urban areas substantially.

Do you have the data Jebby to confirm that restricting foreign ownership in Switzerland had a direct impact on diminished housing stock investment? In Vancouver for example, there isn't a significant increase in the construction of single family housing even though such housing fetches the highest price from foreign investors.

[SFUVancouver]

Originally Posted by tonyvan

You never hear New Yorkers or Londoners or even Torontonians complaining they cannot afford a SFH 2km to downtown do you?

A well written post, thank you. One small quibble, whilst I lived in Toronto, one constantly heard people bemoaning the inability to buy SFHs in the Old City of Toronto. That's every bit as common there as it is here in Vancouver.

[Caliplanner1]

Originally Posted by Vancity

Guess we're not the only city struggling with housing affordability.

Adam Smith's volatile invisible hand at work here. The internal economy of Australia might be putting increased spending/purchasing power in consumers' pockets but for what ever reason investors aren't building housing stock quickly enough to lower house prices. Maybe it's by private sector design to keep house prices and profits high for the benefit of a few!

[Alex Mackinnon]

Originally Posted by 240glt

Thing is though is that article could have been written in 2005. Or 1995 for that matter.. Parents healing their kids with a down payment on a first home is certainly not a new phenomena.
...

And since then, real estate prices have what... tripled? Incomes haven't, they're pretty stagnant and currently purchasing power is dropping like a rock.

You're 40, have 2 incomes and (I'm guessing by your age and 3 yr relationship) no kids. You're the definition of person should be able afford the city easily.

I'm just under 30, have a pretty high income for someone my age, and no debt. My partner is finishing off a masters degree with a moderate amount of debt and just turned 30. Kids will be coming within couple years.

Within the City of Vancouver chances are that both of us are making 1.5-2x the median household income (73K) in Vancouver. Very few couples, even dual income yuppies are going to be in good financial shape when kids start to arrive, unless of course they want kids at 40.

[whatnext]

Originally Posted by Jebby

I agree, the solution is to build more and build denser. Even if a large proportion of real estate is bought by overseas/non-residents the majority of those properties will be put up for rent. The most rentals on the market, the lower the price.

The obsession with home ownership in Canada/US is really absurd. Not everyone should own their home. In Europe the norm is to rent. Switzerland, for example, has over 60% of people renting rather than owning their home. Germany just around 50%.


For most people, renting makes more sense than buying. We should encourage a lot more housing to be build around Vancouver, and even if the majority is not owner-occupied that isn't a bad thing! Rented out dwelling still pay taxes (property tax, income tax on rent), they still pay maintenance fees, they still pay utilities, etc.

An extremely facile assessment and conclusion.

[GMasterAres]

Most places I've seen with housing market crashes are a direct relation to the economy tanking. So if the Vancouver economy crashed suddenly you'd likely see some prices start to drop. As much as you see in Calgary or Edmonton? No because there is foreign investment compensation.

Either way, I think Vancouver is a bit of a unique snowflake in that it is likely not to see some drastic 50% drop in prices any time soon. Also I think the fact that we always say "Vancouver" when we talk about high prices but many people think "Metro Vancouver" when truely the high prices are really Vancouver and a bit outside.

You can afford to buy a house in many parts of Metro-Vancouver (and there are affordable houses even in East Vancouver) if you just look. Our biggest issue is as has been pointed out, 20 year old kids expecting to buy a brand new house 2km from downtown Vancouver.

The dream of owning a nice new house in Kits and being able to roller blade the sea wall or hang out at the beach in the summer.

Guess what kids, you're going to need to start in the suburbs like in every other major city if you want to own a house. Happens in every other major city out there. Young people buy on the outskirts. Or they buy very very small somewhere near the center.

[SpongeG]

when i flew back from vancouver to ft st john last week, there were two girls in the seats across from me, and they were both from the lower mainland, born and raised down there and they were on their way back up north, the one girl said she was a hairdresser and was at a party somewhere down in vancouver area and a girl at the party said she was a hairdresser making $16 an hour and the girl who moved up north said oh nice i make $65 an hour as a hairdresser.

Its kinda weird cause FSJ is my hometown but i lived in coquitlam longer and its my home now, but FSJ has grown like crazy, while i was driving around i saw quite a few apartments going up, one hotel, i think another is planned, and a new burger king/esso. There are a lot of Koreans there now and a lot of africans. With Site C getting built, despite protests, the town is really booming.

I could live with the weather but i would never want to live there again. It is really beautiful country though.