Average price of Metro Vancouver home now almost $663,000, above pre-recession levels

[SpongeG]

back in the 90's when houses were "cheaper" here and people coming from hong kong pre 1997 they were selling typical apartments at that time and coming here and discovering for very little compared to how far their money was going in hong kong they could buy a huge house on the west side plus a nice car and still have money left over - they would couldn't have gotten the same stuff if they just moved in hong kong

[WBC]

Originally Posted by Yume-sama

You are essentially arguing something like "if those damn rich people didn't buy all the Lamborghini's they would be affordable for everyone".

Which sounds almost plausible until you understand a little bit of the facts and economics behind it.

The problem is not that Lamborghini's are expensive. The problem is that Pinto's in Lower Mainland cost like Lamborghini's elsewhere.

Why? Well, I think the answer is not as simple as blaming the foreigners for all of it but I am sure they play a role in it. Most of the players pushing real estate are local - as the prices have dropped in 2008 when the interest rates went up. Consequently, when in 2009 rates dropped prices rose again. This would not have happened if the market was overwhelmed by foreign money not dependent on mortgages.

One way or another the real estate prices are way above reasonable vales as witnessed by the rental prices. Why? I think there is a combination of factors.
- low interest rates that have inflated already expensive market
- influx of money and people from all sides of the world (Vancouver grew by 30% in the last 15 years)
- liberal taxation and financial policies in Canada (i.e. nobody asks you for the source of your money)
- drugs and crime (average person cannot even guess how widespread grow-op problem is)
- one of the best geo-political situations in the world to live in.
- condo-mania which encourages lifestyle "upgrades" and constant (up)trading

[delboy]

Originally Posted by golog

People that live+work in an area pay more tax than someone who is just nominally a property owner or citizen. That would be the extent of my concern locally. The worries about locals being "priced out forever" is probably both overblown and misdirected.

Nationally/provincially there ought to be a system that only provides healthcare coverage in proportion to the number of years worked/lived in the area, to curtail anyone trying to game the system.

Bull...........when i was in my mid later twenties in the mid 90's earning less than I do now, i had more buying power. I almost bought a legal triplex in Kits for well under 400 k, it seems laughable now that i thought it was expensive. I would be looking at 3 times that and now have zero chance of even being able to conceive putting in an offer.

Sad, very sad.

[delboy]

Originally Posted by WBC

The problem is not that Lamborghini's are expensive. The problem is that Pinto's in Lower Mainland cost like Lamborghini's elsewhere.

Why? Well, I think the answer is not as simple as blaming the foreigners for all of it but I am sure they play a role in it. Most of the players pushing real estate are local - as the prices have dropped in 2008 when the interest rates went up. Consequently, when in 2009 rates dropped prices rose again. This would not have happened if the market was overwhelmed by foreign money not dependent on mortgages.

One way or another the real estate prices are way above reasonable vales as witnessed by the rental prices. Why? I think there is a combination of factors.
- low interest rates that have inflated already expensive market
- influx of money and people from all sides of the world (Vancouver grew by 30% in the last 15 years)
- liberal taxation and financial policies in Canada (i.e. nobody asks you for the source of your money)
- drugs and crime (average person cannot even guess how widespread grow-op problem is)
- one of the best geo-political situations in the world to live in.
- condo-mania which encourages lifestyle "upgrades" and constant (up)trading

true and add limited land and real estate mania. Still, 60 percent of the upper end market is foreign driven which is a major problem.

The face of vancouver has changed and is slowly ceasing to be a true city for many: enrollment in vancouver schools is down as families see no future as homeowners and are heading to the burbs in droves, low paid service workers have no choice but to live elsewhere, even emergency service workers can't afford the city, at least not those with families. Which is negative to the fabric of the city as police officers, for insance, are typically very active in the communites that they police, as it comes down to ownership of where they work and live.

[SpikePhanta]

I think low income housing sometimes balances out the expensive neighborhoods.

Like I believe several west side areas have a high % of their population living in Lowincome housing. Like Kits has 34% I think of its population living in Lowincome housing.

[whatnext]

Originally Posted by SpikePhanta

I think low income housing sometimes balances out the expensive neighborhoods.

Like I believe several west side areas have a high % of their population living in Lowincome housing. Like Kits has 34% I think of its population living in Lowincome housing.

Great. So those of us that live and work full time in Vancouver get shoved into low income housing, so tax-shielding astronauts can buy up all the housing stock. Doesn't sound like the world's most livable city to me.

[dleung]

You do realize that if the tax-evading astronauts' families were never allowed in Vancouver, those multi-million dollar condos and houses wouldn't have existed in such numbers to begin with; it's not like you were going to get them for half-price or something...

[Zassk]

Originally Posted by delboy

The face of vancouver has changed and is slowly ceasing to be a true city for many: enrollment in vancouver schools is down as families see no future as homeowners and are heading to the burbs in droves, low paid service workers have no choice but to live elsewhere, even emergency service workers can't afford the city, at least not those with families. Which is negative to the fabric of the city as police officers, for insance, are typically very active in the communites that they police, as it comes down to ownership of where they work and live.

Ok, so how does a more expensive city like New York, or London, enable its service workers and police officers to exist? I think the actual situation in Vancouver is not so unique and not so dire.

All of our families were immigrants at some point. All of our families arrived here either with assets that compared favourably to what the locals had, or else arrived effectively as refugees seeking an opportunity. It's somewhat hypocritical to now blame the newer immigrants, or to try to shut them out, when they are doing as your family did.

You must come to terms with the fact that this is a desirable place to live in. Your family obviously thought so at one time. By moving here, your family contributed to the cost of living problem. Now the shoe is on the other foot, and if you ask me, you should welcome the new arrivals and their purchasing power just as much as your own family was welcomed here.

[whatnext]

Originally Posted by dleung

You do realize that if the tax-evading astronauts' families were never allowed in Vancouver, those multi-million dollar condos and houses wouldn't have existed in such numbers to begin with; it's not like you were going to get them for half-price or something...

Again, not really true. Those houses in Dunbar (indeed, most of the West side now) would still exist, they just wouldn't be multi-million dollar homes. We'd be better of environmentally, as wouldn't have had millions of tonnes of demolition material go to landfills as perfectly good houses were torn down to make way for lot-filling monster houses. I'd argue the condos would be there too, perhaps not in such great numbers and not with the buildings built and priced for a particular offshore market.

[whatnext]

Originally Posted by Zassk

Ok, so how does a more expensive city like New York, or London, enable its service workers and police officers to exist? I think the actual situation in Vancouver is not so unique and not so dire.

All of our families were immigrants at some point. All of our families arrived here either with assets that compared favourably to what the locals had, or else arrived effectively as refugees seeking an opportunity. It's somewhat hypocritical to now blame the newer immigrants, or to try to shut them out, when they are doing as your family did.

You must come to terms with the fact that this is a desirable place to live in. Your family obviously thought so at one time. By moving here, your family contributed to the cost of living problem. Now the shoe is on the other foot, and if you ask me, you should welcome the new arrivals and their purchasing power just as much as your own family was welcomed here.

You're missing the point. By and large the article isn't referring to the hardworking immigrants from places like the Phillipines, Eastern Europe, Eastern Europe and even Mainland China who come to build a better life in Canada, by living and participating fully in Canadian society. Those people can't afford the inflated prices either. My Filipina sister-in-law couldn't have saved enough to buy a house on the West Side from her job as a nanny.

In the past some on SSP have argued "oh well, its such a small segment of the market, it can't effect prices", but now you have a detailed well-researched article in the mainstream media telling us its up to 60% of the market in a large swath of Vancouver. That's enough of a factor to distort the whole housing market.

[Yume-sama]

The multi-millions is not a "large part of the market" that the average person should concern himself with.

Even in Vancouver 98% of homes are not in the multi-millions, and the number of foreign owned in that is said to be in the low single digits. It also says that is what is buying *NOW*, 50%, not what has always been in the past. It could be a bigger number now that prices have "settled". Don't be bitter at the foreigner who could very well be helping the bubble you so wish for not pop It would bankrupt the entire city, if it did.

Vancouver is in line with, and indeed a lot cheaper than, many of the World cities it is ranked so highly against.

If you want cheap homes and a low quality of life, with almost zero foreigners, you can move to Regina.

[trofirhen]

Originally Posted by delboy

most livable city

Its long overdue that vancouver follow the lead of places like sydney and put limits on non residents buying and inflating property values beyond those of us that actually are trying to live here.

I seriously feel like leaving here at least a couple of times a year and its down to Real estate values.

And wages here are laughable compared to real estate costs, the only saving grace is that rents are reasonable in comparison.

Originally Posted by whatnext

Great. So those of us that live and work full time in Vancouver get shoved into low income housing, so tax-shielding astronauts can buy up all the housing stock. Doesn't sound like the world's most livable city to me.

Originally Posted by whatnext

Again, not really true. Those houses in Dunbar (indeed, most of the West side now) would still exist, they just wouldn't be multi-million dollar homes. We'd be better of environmentally, as wouldn't have had millions of tonnes of demolition material go to landfills as perfectly good houses were torn down to make way for lot-filling monster houses. I'd argue the condos would be there too, perhaps not in such great numbers and not with the buildings built and priced for a particular offshore market.

IMHO, you've both got it exactly.
Vancouver has become like a real estate "Jersey" or "grand Cayman" or "Curaçao".
Except that here, instead of their money going into anonymous, tax-free bank accounts, it goes into high-end real estate.
*
Many of you say, "so what? That doesn't affect the rest of us."
*
Oh yes it does. The astro-prices pull the prices of middle class homes up with them, making the entire Metro Vancouver (and perhaps elsewhere) real-estate market over-inflated and unaffordable, not only to Working Joe, but to middle class families who do not want to live in Agassiz or Spences Bridge to commute to Vancouver.
*
It's time the governement - at all levels - got off its apathetic Canadian ass and followed the Australian example.
*
Canada has a well-earned reputation as a "sell-its-own-mother country," and this is but one more indication of that.
*
Spit, hiss, and hoot at me if you will, but that's my opinion. Thank you.

[Zassk]

Originally Posted by delboy

Bull...........when i was in my mid later twenties in the mid 90's earning less than I do now, i had more buying power. I almost bought a legal triplex in Kits for well under 400 k, it seems laughable now that i thought it was expensive. I would be looking at 3 times that and now have zero chance of even being able to conceive putting in an offer.

The situation is more complex than that. The price of that house may have tripled in 15 years, but in that time:

- the cost of borrowing has halved (source)
- your income tax dropped by a quarter (source) and sales tax dropped 2%
- the dollar's value dropped by a quarter (source) but, on average over all industries, wages increased by a third (source)

So most likely you have more buying power today than you had in 1995, even if you were working the same job position the whole time.

[twoNeurons]

Something to think about. The more expensive the high-end is, the more corporate executives will demand. The more expensive it is for decision makers, the bigger the piece of pie they will require to want to live here.

There is always a limited amount of money available. If the few execs in a company need more money to be able to afford to live "well" here, they will get it... and they're in a better position to set wages of underlings.

To put it in terms of simple numbers, imagine the following made up scenario:

Salary available: $1M.

Exec salary in Vancouver: 200k
20 workers @ 40k

Exec Salary in SomeOtherCity: $160k
20 Workers @ $42k.

In the second city, the Exec can be offered $160k and still be "living" well. In Vancouver, the Exec could argue that he needs $200k.

The end result is that in SomeOtherCity, the workers have both a bigger part of the salary pie and getting a 5% higher wage.

However, making things MORE expensive for decision-makers and wealthy people just means they will need more the live their lifestyle.

They're not going to suck it up or move on out like the general population does when the cost of living goes up.

I don't have any opinion on whether it's happening in Vancouver, or whether it's a good thing or bad thing. However, it's a simple matter of cause and effect. I don't believe we can simply look at something and say: "Hey, that doesn't affect me"

[cabotp]

Originally Posted by trofirhen

Oh yes it does. The astro-prices pull the prices of middle class homes up with them, making the entire Metro Vancouver (and perhaps elsewhere) real-estate market over-inflated and unaffordable, not only to Working Joe, but to middle class families who do not want to live in Agassiz or Spences Bridge to commute to Vancouver.

Care to explain exactly how a house on Dunbar could impact the price of my house in East Vancouver.

The only thing I can think of is an owner has a home on Dunbar. They sell it. The money they have now allows them to pay the highest price for a house in East Vancouver. Allowing them to completely outbid everyone else. Thus driving up the price of the house in East Vancouver.

Is that what you were referring to?

[trofirhen]

Originally Posted by cabotp

Care to explain exactly how a house on Dunbar could impact the price of my house in East Vancouver.

The only thing I can think of is an owner has a home on Dunbar. They sell it. The money they have now allows them to pay the highest price for a house in East Vancouver. Allowing them to completely outbid everyone else. Thus driving up the price of the house in East Vancouver.

Is that what you were referring to?

Yes, that's largely it.

[whatnext]

Originally Posted by cabotp

Care to explain exactly how a house on Dunbar could impact the price of my house in East Vancouver.

The only thing I can think of is an owner has a home on Dunbar. They sell it. The money they have now allows them to pay the highest price for a house in East Vancouver. Allowing them to completely outbid everyone else. Thus driving up the price of the house in East Vancouver.

Is that what you were referring to?

Think of the eastward gentrification sweep we're discussing in Is Fraser the New Main thread. Folks raised on the westside can't afford to live in that neighbourhood any longer. They take cash from mum and dad and move east of Main, rather than go out to Coquitlam etc. The older folks selling those Dunabr houses are probably downsizing to a condo here and one in PS or Phoenix.

[Zassk]

^ How is this trend any different from any other city with a fast-growing population? The only way to break this cycle is to convince people to stop moving into Vancouver, and for some of its residents to abandon it. That's not a reasonable thing to demand. All of us (or our families) moved to Vancouver at some point, and by doing so, we contributed to the trend. I wonder what the locals thought of your family moving here?

[trofirhen]

I think a critical and obvious factor in all this is the home price > income ratio.
For residents of the entire Vancouver area, I would imagine that the salary range is similar to other major cities in Canada (Calgary, Edmonton, Winnipeg, Toronto, Ottawa, Montreal)

This would take the form of a graph in a linear configuration, rather like a bell curve. The "bell" shape would indicate the numbers of people earning at a given level, and a corresponding straight line slope would indicate wages, from minimum f/t to the maximum. (And there are a lot of high-end earners here, just as there are minimum wage earners)

Now, regarding the $$home price configuration, there would surely be a "mean" for all Canadian cities, added together and averaged out.

The greater the distance between the average home price and the income price, the more expensive the market. Each city, of course, would vary, (and, for example, one would expect Vancouver and Toronto to have similar profiles, I presume)

I would estimate (and this again is only my personal guess) that the Canadian price>income ratio here in Vancouver is at its most distorted; that is, there would be the greatest gaps between any income level, and corresponding home prices.

A bit difficult to explain verbally, but with a visual image, what I am saying might become clearer.

**{An inverse situation would be a fictitious city with an average economy, but that is extensively OVERbuilt, resulting in inexpensive housing}

It appears like a classic supply - demand situation.
However, with the infusions of enormous cash values for real estate from aforementioned offshore buyers, this would distort the market in the opposite direction, which is what this thread is all about. Again, this point seems arguable, according to a number of posts.

The other factor of course is people wanting to move to Vancouver from elsewhere in the country (largely due to the milder weather and the scenery. How big a role this plays in the equation is open to interpretation, and unfortunately I have no statistics to back any of this)

However, maybe somebody else has ........................

[whatnext]

Originally Posted by Zassk

^ How is this trend any different from any other city with a fast-growing population? The only way to break this cycle is to convince people to stop moving into Vancouver, and for some of its residents to abandon it. That's not a reasonable thing to demand. All of us (or our families) moved to Vancouver at some point, and by doing so, we contributed to the trend. I wonder what the locals thought of your family moving here?

When my parents arrived here it was with very little money, their skills and the promise of jobs. As the G & M article states, those immigrants today are largely giving Vancouver a pass, as its no longer a good place to make money and housing is too expensive. There was no expectation that Dad would stay in the home country, earning money and paying taxes there, with a family that would pack up and join him every summer back in the old country.

....Take the experience of Fang Chen. A litigation lawyer back in China, Chen arrived two years ago, while her husband stayed behind to manage a successful business, visiting when he can. Their son, now 6, arrived in Canada to start school this year. Chen is boning up on the Canadian legal system, but has no plans to join the bar here, because, she says, “it would be almost impossible for me to break in.”...
http://www.theglobeandmail.com/repor...67/singlepage/