Vancouver Real Estate 'Bubble' at 30-year Peak

[Hmoob]

Originally Posted by rofina

Totally.

But Regina and Saskatoon, even Edmonton, all cities. As in actual amenities, restaurants, culture, etc.

I know we go on about our mountains and water and stuff - but how many people are enjoying that on the regular?

I do pretty well financially, and I bought early so I have equity behind me, but I also work minimum 50 hours a week. Usually closer to 60 hours a week. If I'm being honest with myself - I probably have a uniquely "Vancouver" experience maybe 2 times a month on average? The rest of the time? Wake up. Go to work. Work. Drive home. Cook. Eat. Wind down. Rinse and repeat.

I could buy a house for cash, leave few hundred in the bank from equity and savings and do some more meaningful work elsewhere, for much less money, but also less stress and more time for self development instead of career development.

The thought is definitely reverberating through my head lately.

It sounds like we're in a pretty similar place.

I could sell out of Vancouver and live like a king in any number of locations. It sounds appealing, but ultimately I don't think it'd work out too well for me. Even if I don't get to the mountains or out on the water very often, I get to live in a city surrounded by people who all dream of the water and mountains with me. And sometimes we get out together. I'm at home with "my people" here.

Say I move to Regina (no offence to Regina meant), I guess I could afford to buy a nice boat. But where would I sail? What would I do with all of the free time and brain space I'd have from not needing to work as much? And how long will the people there put up with me going on about how I much I want to be in the mountains or on the sea before they not-so-politely tell me to go back to Vancouver?

We live in a highly competitive city with all the amenities, both urban and natural, that one could ask for. That selects for a certain kind of person whose willing to move here and willing to stick it out. Of course it comes with its downsides, but so does everywhere else.

Maybe I'll tire with age and want a slower pace somewhere else. For now I'm staying on this ride.

[rofina]

Originally Posted by WarrenC12

It sounds like your job is the problem here, regardless of where you live. I work 40 hours a week (tops), walk to/from work. My wife works less. We definitely make time to enjoy the outdoors and all that "urban" Vancouver has to offer, with the caveat that we also have smaller kids that need to be a part of it.

Definitely - work is an issue. I know that I'm not the only one in a management position that works 50hr+ a week, I would probably call it a norm based on my relatively small sample size of industry peers and friends.

I'm pretty sure everyone would like to maintain income while working 40 hrs or less, but its not a possibility in the vast majority of circumstances.

I think that ties into the issue - career demands are getting quite aggressive to maintain the "middle class" lifestyle here.

[rofina]

Originally Posted by Hmoob

It sounds like we're in a pretty similar place.

I could sell out of Vancouver and live like a king in any number of locations. It sounds appealing, but ultimately I don't think it'd work out too well for me. Even if I don't get to the mountains or out on the water very often, I get to live in a city surrounded by people who all dream of the water and mountains with me. And sometimes we get out together. I'm at home with "my people" here.

Say I move to Regina (no offence to Regina meant), I guess I could afford to buy a nice boat. But where would I sail? What would I do with all of the free time and brain space I'd have from not needing to work as much? And how long will the people there put up with me going on about how I much I want to be in the mountains or on the sea before they not-so-politely tell me to go back to Vancouver?

We live in a highly competitive city with all the amenities, both urban and natural, that one could ask for. That selects for a certain kind of person whose willing to move here and willing to stick it out. Of course it comes with its downsides, but so does everywhere else.

Maybe I'll tire with age and want a slower pace somewhere else. For now I'm staying on this ride.

I know what you mean.

I'm taking stock of what I actually enjoy and more importantly, how often I enjoy that particular thing.

I bought land that I thought I would enjoy for weekends away. Built a cabin. Loved it. Then sold it. Made me feel amazing, but I also only used it 6 times a year.

I have become aware that most of what I do enjoy, is not very dependent on being here.

That being said...

I been hit in the lungs with -30 in Calgary and it made me want to die. So Im aware its not all roses out there.

[whatnext]

Originally Posted by Hmoob

...Maybe I'll tire with age and want a slower pace somewhere else. For now I'm staying on this ride.

That's what Vancouver Island is there for!

[cairnstone]

Rent control is something that we really don't have here but is now coming. Other high rent market have public money attached to the development so that rent is always below market.

Metro Vancouver does a good job with this. They started in the 80s and kept on building a means test base projects that give homes to single parents and disabled

[rofina]

Originally Posted by cairnstone

I wish I could find the article that was published back in the 90s in Calgary. It was a true in depth breakdown on home ownership relating to retirement versus renting. It had charts with breakdowns on when you would win or loose. Ownership only worked in the models if you were under 35 if you factored the amount of money going into mortgage instead of other investment vehicles.

Right now I pay 1650 rent for 750 square feet view lot of the fraser upscale building.

To buy the same unit im $500k market plus then strata, taxes and other assorted fees. My mortgage would be $3200 a month roughly. So 1000 bucks a month into a good investment. And im some what protected from market downturn

In your situation, that makes sense.

In my building, 20% down gets you cash-flow on a unit, inclusive of mortgage payment, taxes, and maintenance fee based on the last sale and the amount the unit subsequently rented for.

In that situation I don't see why someone wouldn't buy, other than not being able to do so due to financial circumstances.

Your monthly spend is the same, but one payment is all gone to rent, the other at least a small portion goes to equity. And on 10 year timeline, I'm pretty confident in saying you will at the least get your money back, and most likely make a buck or two.

[WarrenC12]

Originally Posted by whatnext

That's what Vancouver Island is there for!

Vancouver Island and Interior BC will be interesting markets to watch in the next 10-20 years as the baby boomers take a dirt nap.

[misher]

Originally Posted by cairnstone

Rent control is something that we really don't have here but is now coming. Other high rent market have public money attached to the development so that rent is always below market.

Metro Vancouver does a good job with this. They started in the 80s and kept on building a means test base projects that give homes to single parents and disabled

When it was inflation+2% yes. When its just inflation that kills rental development.

[cairnstone]

Originally Posted by rofina

In your situation, that makes sense.

In my building, 20% down gets you cash-flow on a unit, inclusive of mortgage payment, taxes, and maintenance fee based on the last sale and the amount the unit subsequently rented for.

In that situation I don't see why someone wouldn't buy, other than not being able to do so due to financial circumstances.

Your monthly spend is the same, but one payment is all gone to rent, the other at least a small portion goes to equity. And on 10 year timeline, I'm pretty confident in saying you will at the least get your money back, and most likely make a buck or two.

At the time in the early 90s housing ownership was not about equity like it is now. They factored owning a housing product reduced the living costs at retirement not as an investiment vehicle it turned into here.

[cairnstone]

Originally Posted by misher

When it was inflation+2% yes. When its just inflation that kills rental development.

Rental markets have a lot more than that to cause them to be over built or under built. Zoning is a big one, market trends is another, federal policies made it easier to buy, lower interest rates also had a huge effect on our lack of rental buildings being built

[misher]

Originally Posted by cairnstone

Rental markets have a lot more than that to cause them to be over built or under built. Zoning is a big one, market trends is another, federal policies made it easier to buy, lower interest rates also had a huge effect on our lack of rental buildings being built

Your discussing the PBR rental market I’m referring more to the condo rental market. PBR only meets 10-20% of our needs the main dish is condo rentals and this market dries up if condo owners are encouraged to invest in buying new condos to rent out.

[cairnstone]

Originally Posted by misher

Your discussing the PBR rental market I’m referring more to the condo rental market. PBR only meets 10-20% of our needs the main dish is condo rentals and this market dries up if condo owners are encouraged to invest in buying new condos to rent out.

Those are the reasons why its only 20 % of the market. I remember when you got a tv with a 1 year lease.

Interest rates dropped lower down payment leads to gray market/condo rentals becoming the norm here.

[misher]

Originally Posted by cairnstone

Those are the reasons why its only 20 % of the market. I remember when you got a tv with a 1 year lease.

Interest rates dropped lower down payment leads to gray market/condo rentals becoming the norm here.

Also all our programs to get PBR built were eliminated while new taxes and policies discouraged PBR.

[whatnext]

It's great how a simple screenshot shows the speculative overbuilding in Richmond. With just a third of Vancouver's population, yet it has 57% of the amount of real estate listings. While Richmond has almost the same population as Burnaby, it has 150% of the listings!

[IMG]real estate by whatnextyvr, on Flickr[/IMG]

[misher]

Originally Posted by whatnext

It's great how a simple screenshot shows the speculative overbuilding in Richmond. With just a third of Vancouver's population, yet it has 57% of the amount of real estate listings. While Richmond has almost the same population as Burnaby, it has 150% of the listings!

[IMG]real estate by whatnextyvr, on Flickr[/IMG]

Yep richmonds one of the two municipalities exceeding its housing commitments in the metro 2050 plan. Most municipalities reacted to our housing crisis by cutting housing development. It also has some of the lowest property tax increases over the past 5 years.

[Changing City]

Originally Posted by misher

Yep richmonds one of the two municipalities exceeding its housing commitments in the metro 2050 plan. Most municipalities reacted to our housing crisis by cutting housing development. It also has some of the lowest property tax increases over the past 5 years.

That's fascinating. Metro Vancouver don't seem to think they've started their 2050 plan yet. Which was the other municipality? Can you link the source of your data? (Not the tax statement, that's not relevant)

[misher]

Originally Posted by Changing City

That's fascinating. Metro Vancouver don't seem to think they've started their 2050 plan yet. Which was the other municipality? Can you link the source of your data? (Not the tax statement, that's not relevant)

Sorry I tried finding it but couldn't. I believe Richmond was a bit above and North Van was way above.

[cairnstone]

Originally Posted by misher

Yep richmonds one of the two municipalities exceeding its housing commitments in the metro 2050 plan. Most municipalities reacted to our housing crisis by cutting housing development. It also has some of the lowest property tax increases over the past 5 years.

Richmond also was building and marketing properties for out of country owners. So basically created buildings on completion that were full rental.

[Changing City]

Originally Posted by misher

Sorry I tried finding it but couldn't. I believe Richmond was a bit above and North Van was way above.

There is no 2050 Plan yet. The current Regional Plan was adopted in 2011, and the 'targets' (which are advisory, showing best guess of likely growth, not numbers municipalities have to meet) start with a base in 2006, and an interim date of 2021. It's therefore possible to see whether individual municipalities have reached two thirds of the 2006 to 2021 growth expectations in the published 2016 data.

I compared the Regional Plan and 2016 data, and almost every municipality fell short, and there were 6% fewer dwellings added between 2006 and 2016 in Metro Vancouver than the Plan anticipated. The most obvious explanation is that the Plan was written before the 2008 economic slowdown, which had an effect on housebuilding here for a couple of years.

The one exception was North Van City which built 1% more dwellings than the Plan target (a total of about 270 extra dwellings above the expected total). The City of Vancouver had 2% fewer dwellings than their target in 2016, Richmond and Surrey were both 6% below the target, and Burnaby was 13% below. Interestingly, population was only 3% below target, and several municipalities saw more people than expected - the largest number was Vancouver with 3,600 more than expected, but Richmond had 11,000 fewer. (Burnaby are missing their target by 12,000 people Surrey by 14,000, and Coquitlam by 15,000)

[misher]

Originally Posted by Changing City

There is no 2050 Plan yet. The current Regional Plan was adopted in 2011, and the 'targets' (which are advisory, showing best guess of likely growth, not numbers municipalities have to meet) start with a base in 2006, and an interim date of 2021. It's therefore possible to see whether individual municipalities have reached two thirds of the 2006 to 2021 growth expectations in the published 2016 data.

I compared the Regional Plan and 2016 data, and almost every municipality fell short, and there were 6% fewer dwellings added between 2006 and 2016 in Metro Vancouver than the Plan anticipated. The most obvious explanation is that the Plan was written before the 2008 economic slowdown, which had an effect on housebuilding here for a couple of years.

The one exception was North Van City which built 1% more dwellings than the Plan target (a total of about 270 extra dwellings above the expected total). The City of Vancouver had 2% fewer dwellings than their target in 2016, Richmond and Surrey were both 6% below the target, and Burnaby was 13% below. Interestingly, population was only 3% below target, and several municipalities saw more people than expected - the largest number was Vancouver with 3,600 more than expected, but Richmond had 11,000 fewer. (Burnaby are missing their target by 12,000 people Surrey by 14,000, and Coquitlam by 15,000)

Yep I goofed and misremembered it. Finally found what I was thinking of.