Vancouver no longer most liveable city in any survey!

[WarrenC12]

When you are an owner, the rent you are "throwing away" is interest, tax, and maintenance. If you can rent the identical place for less than those payments, you are (financially) an idiot.

[Hourglass]

The surveys may indeed be meaningless to someone who isn't an expat (Economist, Mercer) or whatever (Monocle - seriously, Tokyo @ #4? I love Tokyo but not for its quality of life...). But if one subscribes to the 'canary in the coal mine' principle, then these surveys are indeed useful as benchmarks for how a city is perceived internationally.

It's a fact that Vancouver's standing in the EIU and Mercer surveys has eroded marginally versus cities such as Melbourne, Vienna and Zurich over the past 12 months. If this is a long-term trend (and the EIU already indicated the Stanley Cup riots are going to further impact Vancouver's standing for next year), then these surveys could be picking up on shortfalls in how the region is dealing with specific issues.

The reality is that Vancouver's traffic sucks in general, and public transportation, while good for a North American city, doesn't hold a light to a city like Vienna. So one can hope this is a wake-up call for planners to look at what can be improved instead of continually patting themselves on the back.

Just sayin'...

[twoNeurons]

I took the liberty of editing your post.

Originally Posted by artvandelay

From a financial standpoint, renting buying in Vancouver is essentially a waste of money unless especially if it's a very short-term situation (less than 10 year[i]s[/s]). Sinking a vast amount of money each month on interest, property tax, real-estate fees, maintenance and incidental costs of ownership for little or zero equity doesn't make much sense when a you could have the option of a similarly priced half-priced rent mortgage payment. This is the main problem with affordability in Vancouver.

Bold Italics mine. There are multiple ways to look at the housing market. Making blanket opinions which don't take into context all the variables could be considered foolish.

I'm not saying one way or the other. Each person has to decide for themselves if it makes financial sense for them. But, I will say that if you're not IN the market right now, think carefully about ALL the costs of ownership and what your long-term goals are.

[twoNeurons]

Originally Posted by WarrenC12

When you are an owner, the rent you are "throwing away" is interest, tax, and maintenance. If you can rent the identical place for less than those payments, you are (financially) an idiot.

Yep, many don't consider a mortgage for what it is... renting money from the bank. Nothing wrong with that and it often makes sense... but not always.

[Doug]

Originally Posted by WarrenC12

+1000000

People here look at real estate and have no idea what "cost of living" truly means. Go to London or NYC and try to live the same lifestyle you do here for a week.

At least jobs in London or NYC (or San Francisco or Hong Kong) pay well. Vancouver wages are the lowest of the low.

[delboy]

Originally Posted by Doug

At least jobs in London or NYC (or San Francisco or Hong Kong) pay well. Vancouver wages are the lowest of the low.

Perhaps, but speaking for London, it's only really financial sector jobs that pay above the odds, otherwise it's not that much higher. Besides, relying on averages is misleading and one needs to compare industries. Mine is better paid than London and NYC.

You do raise a valuable point of fundamentals though being out of wack with RE prices, which further supports at the present level of RE and the increasing possibility of a correction, that renting is not a bad decision, at least in the short term.

[artvandelay]

Originally Posted by twoNeurons

I took the liberty of editing your post.



Bold Italics mine. There are multiple ways to look at the housing market. Making blanket opinions which don't take into context all the variables could be considered foolish.

I'm not saying one way or the other. Each person has to decide for themselves if it makes financial sense for them. But, I will say that if you're not IN the market right now, think carefully about ALL the costs of ownership and what your long-term goals are.

Believe me, I'm well aware of the variables and context of the Vancouver market as I am looking at doing my masters at UBC and would like to purchase a condo over that 2 year period. However it may not be an option for obvious reasons, or I may choose to go elsewhere.

The point I was making is that the spread between the cost of renting and buying suggests that a fundamental problem exists in the Vancouver housing market. I'm not convinced that this bubble will burst - it may just be a reality that people will have to deal with. I do believe that the amount of housing inventory that has been bought as investment or vacation property is not healthy, it is a situation that parallels Las Vegas and Phoenix in the mid-2000s. The saving grace for Vancouver is that the quality of mortgages there is far superior meaning that the risk of mass foreclosure is minimal.

Nowhere did I suggest that anyone buy into the market as it is, because I don't think that it would be a good investment at this time. I am just stating that the cost of rent and a mortgage payment on the same property should ideally be lot closer in price than they are.

[artvandelay]

Originally Posted by WarrenC12

When you are an owner, the rent you are "throwing away" is interest, tax, and maintenance. If you can rent the identical place for less than those payments, you are (financially) an idiot.

A bit of a simplistic view, as you are not taking into account the capital gain you would receive upon sale of the property. Of course this is if you want to gamble and assume that prices continue to rise

I'm just saying that since rent is my largest yearly expense, I would much rather put that money towards an equity investment that will eventually show me some benefit barring a total market crash. Even if the gains in property value are negated by tax, maintenance etc, I would still prefer it to a long term rental situation. The point I wanted to illuminate is that it is much harder for me to do this in the CoV than in other places - and that is hurting the city's overall livability.

[twoNeurons]

Originally Posted by artvandelay

A bit of a simplistic view, as you are not taking into account the capital gain you would receive upon sale of the property. Of course this is if you want to gamble and assume that prices continue to rise

I'm just saying that since rent is my largest yearly expense, I would much rather put that money towards an equity investment that will eventually show me some benefit barring a total market crash. Even if the gains in property value are negated by tax, maintenance etc, I would still prefer it to a long term rental situation. The point I wanted to illuminate is that it is much harder for me to do this in the CoV than in other places - and that is hurting the city's overall livability.

I think that was Warren's point. Oversimplifying it works both ways... and people who say you're throwing your money away when you rent are usually more guilty of vastly oversimplifying... forgetting about the carrying costs of ownership.

Bubble bursting, while it's true that you potentially can gain equity, that is not realized equity until the sale of the house. Also remember, even if a house appreciates by something like 20,000 in the space of 5 years, real-estate fees and other incidentals (in addition to the additional costs of ownership which have an opportunity cost in themselves) eat up a considerable chunk of profit.

However, for those who don't save their money... buying can become a forced retirement plan. It's just not always the most efficient one. Like ANY investment vehicle, there is a risk factor... and if one were to look solely at the fundamentals, it could be argued that the Vancouver market is high risk. Saying that, however, you never know. That's why it's called risk... otherwise, it would be called a foregone conclusion, wouldn't it?

[Doug]

Originally Posted by delboy

Perhaps, but speaking for London, it's only really financial sector jobs that pay above the odds, otherwise it's not that much higher. Besides, relying on averages is misleading and one needs to compare industries. Mine is better paid than London and NYC.

You do raise a valuable point of fundamentals though being out of wack with RE prices, which further supports at the present level of RE and the increasing possibility of a correction, that renting is not a bad decision, at least in the short term.

Well I just look to Seattle, in comparison: housing prices are at least a third lower and white collar wages are far, far higher. Factor in the absence of state income tax and the difference is stark.

[SpongeG]

article recently came out - tied 5th

http://vancouver.24hrs.ca/News/local.../19036821.html

By ERICA BULMAN, 24 HOURS

Vancouver is the nicest place to live in North and South America, and the fifth-best city in the world, according an annual quality of life survey by consulting group Mercer.

Sometimes called “No Fun City,” Vancouver nevertheless earned high marks for its natural environment and stable political and social climate, and for the health and medical category, which factors in hospitals, potable water and air pollution.

Vienna was ranked the top city in the world, followed by Zurich, Auckland and Munich.

“Being number five is significant. It means the quality of life in Vancouver is truly good,” said Mercer's Montreal-based principal Luc Lalonde, adding the city’s drop from fourth place in 2010 was meaningless. “Given this is a ranking of 221 cities, basically four and five are so close that it’s not significant enough to talk to about a drop.”

...

http://vancouver.24hrs.ca/News/local.../19036821.html

[LotusLand]

Vancouver listed as one of the top 10 cities to watch for this century. Via Vancity Buzz:

http://www.vancitybuzz.com/2011/11/v...to-watch-list/

[someone123]

Originally Posted by Doug

Well I just look to Seattle, in comparison: housing prices are at least a third lower and white collar wages are far, far higher. Factor in the absence of state income tax and the difference is stark.

Yeah, it's too bad. If you're talking about tech jobs then prospects here are dramatically worse than Seattle or the Bay Area. The companies are not as innovative so the work is less satisfying, the pay is considerably lower, and the cost of living is quite high.

It might be fine for some people but the best and brightest who could contribute the most to the local economy are disproportionately likely to leave. Maybe this stuff will sort itself out, but I'm worried that Vancouver is becoming a hollowed out city that pretty much only caters to real estate investors.

[ckkelley]

Originally Posted by LotusLand

Vancouver listed as one of the top 10 cities to watch for this century. Via Vancity Buzz:

http://www.vancitybuzz.com/2011/11/v...to-watch-list/

Cool news!

[Conrad]

Originally Posted by someone123

Yeah, it's too bad. If you're talking about tech jobs then prospects here are dramatically worse than Seattle or the Bay Area. The companies are not as innovative so the work is less satisfying, the pay is considerably lower, and the cost of living is quite high.

It might be fine for some people but the best and brightest who could contribute the most to the local economy are disproportionately likely to leave. Maybe this stuff will sort itself out, but I'm worried that Vancouver is becoming a hollowed out city that pretty much only caters to real estate investors.

Hear, hear. I totally agree.

[EastVanMark]

Real earnings show decades of decline in livable Vancouver

By CRAIG MCINNES, Vancouver Sun


For a town that prides itself on making the podium in most comparisons, it may come as a shock that when it comes to the crucial measure of total family income, Vancouver is 22nd in Canada.

As a province, B.C. is third in Canada in median after-tax income for what StatsCan calls economic families, which it defines as two or more related people, behind energy-rich Alberta and Saskatchewan but ahead of the once-dominant Ontario.

These observations are from a recent snapshot on incomes compiled by economist Jock Finlayson, executive vice president and chief policy officer of the Business Council of British Columbia.

On that basis, he calls B.C. a “middling performer” with a record that is further blemished by our below-par performance at the bottom end, with more families living below Statistics Canada’s low income cut-off than the average for the rest of the country and well below the percentage in other western provinces. Arguments rage about whether the StatsCan LICO is a fair measure of poverty — StatsCan makes no such claim — but it is a fair comparator with other provinces.

In looking at family income over time, what jumps out at me is how we have made so little progress in raising all boats over the past 35 years. Adjusting for inflation, it now takes two parents working to match the pay packet that a single man could expect to earn in 1975.

Note the gender. While the inflation-adjusted income of men has declined significantly over three decades, that of women has increased. The decline for men has been so great, however, that the pre-tax income for both men and women combined has still declined in Vancouver by about 20 per cent between 1977 and 2007.

In recent years, however, the after-tax income for families has recovered to the level last seen just before the big recession hit in 1981 just as inflation was also taking a toll on income.

One factor has been the increase in two-earner families. The other is that although inflation adjusted earnings have not increased very much, taxes have been reduced, allowing workers to keep more of what they earn.

So why are we working harder and earning less?

Finlayson cites technological change and globalization. It wasn’t supposed to work out that way, but opening up our borders to trade also opened them up to competition. Companies that can’t compete with low-wage jurisdictions have either shut down or opened up plants offshore. High-paying manufacturing jobs have been replaced with lower paying jobs in the service industry.

So for many this Christmas, there is more to buy, and less to buy it with.

cmcinnes@vancouversun.com

© Copyright (c) The Vancouver Sun


Read more: http://www.vancouversun.com/business...#ixzz1gR6wJ2ED

[s211]

One of the recent comments I've heard about Vancouver wage levels being so p!ss poor has to do with labour supply. Because so many people want to be here, they're effectively flooding the labour market, and thus wages are lower here.

Headhunters tell me they're constantly contacted by people from across Canada wanting to move here, wondering what the job market's like. Makes for a more competitive labour market.

[Surrealplaces]

Originally Posted by WarrenC12

When you are an owner, the rent you are "throwing away" is interest, tax, and maintenance. If you can rent the identical place for less than those payments, you are (financially) an idiot.

Short term yes, but ownership is always better over the long term. Very few financial planners would ever recommend renting a place unless it was someplace like Manhattan or London etc..

I bought my first house 17 years ago, and yes, for the same amount of I could have lived in a better place paying rent, but I have since moved into a nicer place, in the area I want to live in. In two years my mortgage will be gone..... my house today would rent for about $2,000.00 per month.

You also have to consider the importance being in control of your own destiny and not the whim of some landlord.

[jsbertram]

YAY!

If enough people move away to the other top-of-the-list cities, perhaps Vancouver will become an affordable place to live again.

[EastVanMark]

...Or we take a more realistic approach to land development in the region in order to keep prices steady without having anybody move away.