2697 replies to this topic

[FirstTimeHomeCrier]

I'm not really looking for advice, but I can understand how it might have come off that way. What I'm trying to do is figure out why so many people feel the status quo is acceptable.

 

And saying that it's worse elsewhere isn't going to satisfy me. If your yard was full of discarded coffee cups, would you say "at least they're not used needles" and leave it at that?

[LeoVictoria]

I'm not really looking for advice, but I can understand how it might have come off that way. What I'm trying to do is figure out why so many people feel the status quo is acceptable.

 

And saying that it's worse elsewhere isn't going to satisfy me. If your yard was full of discarded coffee cups, would you say "at least they're not used needles" and leave it at that?

 

It is not acceptable.  However, that said I don't know what can be done to solve it.   Local government needs to allow a lot more development and densify the city.   So far that is not happening and likely never will to the extent necessary.

[Mike K.]

30 year mortgage is great! Too bad it is going the way of the dodo.

How did you find getting approved as self-employed? Difficult?

More hoops to jump through for sure, but the magic number is 20% down. Provided you can do that, you're on relatively solid ground.

[jonny]

I don't know if the prices are "acceptable" or not. It's just the market.

 

I can't afford a Tesla, so I won't buy one. Same goes for a house in the Uplands. *shrug*

 

It's not acceptable how our local and provincial governments have put a stranglehold on development and then cry affordability crocodile tears. dasmo hit the nail on the head in that other thread. Our zoning is a mess. Urban containment is a mess. The process of obtaining a development or building permit is a mess. BUT, the Federal government just announced more funding to StatsCan to "study the issue". Wooo!

[Mike K.]

Now is about the furthest from a buying opportunity in history.

Somebody's already forgotten the 1980's

There is no good or bad time to buy real-estate if your intent isn't to expect to immediately profit from it. Anybody who sits on the sidelines will eventually realize there was never a bad time to get in and the motto is to get in when you can. How many folks sat around complaining about $450k homes in Fairfield because a bunch of alarmists prophecized a bubble burst? Thousands. And they're still sitting there.

At the end of the day, whether you lose 10% over the first decade or gain 10%, it doesn't matter if your priority is a long term position. Playing the real-estate markets is not the modus operandi of the majority of purchasers yet the majority of real-estate advice is SOLELY based on that premise.

[jonny]

More hoops to jump through for sure, but the magic number is 20% down. Provided you can do that, you're on relatively solid ground.

 

Yup. 20% down and there's no stress test, no CMHC fees, and you're probably on a sub-prime interest rate.

[FirstTimeHomeCrier]

I don't know if the prices are "acceptable" or not. It's just the market.

 

Saying "it's just the market" is accepting the status quo, as though the market was something beyond human control.

[dasmo]

Somebody's already forgotten the 1980's

There is no good or bad time to buy real-estate if your intent isn't to expect to immediately profit from it. Anybody who sits on the sidelines will eventually realize there was never a bad time to get in and the motto is to get in when you can. How many folks sat around complaining about $450k homes in Fairfield because a bunch of alarmists prophecized a bubble burst? Thousands. And they're still sitting there.

At the end of the day, whether you lose 10% over the first decade or gain 10%, it doesn't matter if your priority is a long term position. Playing the real-estate markets is not the modus operandi of the majority of purchasers yet the majority of real-estate advice is SOLELY based on that premise.

I'm not forgetting the 80's. In the end it was a great time to buy compared to now.... Highest rates ever with a long long path down. Relatively low prices too! Now we are at prices that push every fundamental, extreme low rates for almost two decades now and changing direction, record debt levels and most importantly crazy low inventory and brutal buying conditions. Still no one can name a worse time.... 

 

I am not saying any bubble will burst. I have no faith in that. This spring prices will probably go up.... That doesn't change the fact that what is going on is alarming....  

Edited by dasmo, 22 March 2017 - 01:35 PM.

[aastra]

 

Local government needs to allow a lot more development and densify the city.

 

Yes, but a more densely populated Victoria would likely end up being quite a bit more appealing to owners, renters and investors than the current Victoria, and thus command still higher prices.

[nerka]

Somebody's already forgotten the 1980's

Depends. It was bad news if you hit the 80's with a big mortgage.  It was a pretty good time to buy though.  Prices were low and rates would have fallen at every renewal.

 

Buying now it seems like rates might be higher at renewal and it is difficult to imagine the same percentage return between 2017 and 2047 as there was between 1981 and 2011

[jonny]

We just bought a condo and move in at the end of April. Yay! With my investment record, dasmo's probably right, this is probably the worst time to buy! It's not a buyer's market, that's for sure.

 

That being said, this is a long-term thing for us. From a family situation, now is a good time to buy. Predicting markets is impossible. I don't think prices will go up this year like they did last year. This condo and this mortgage works within our 5 year plan. At some point, we will re-evaluate and decide we no longer will live in this condo. We will then either sell it or rent it.

 

Saying "it's just the market" is accepting the status quo, as though the market was something beyond human control.

 

What would you suggest humans do?

[FirstTimeHomeCrier]

What would you suggest humans do?

 

We need better policy and we need to control our greed. Reduce restrictions for developers building high-density housing in the urban core, build developments that are price-restricted by income, offer subsidies and tax incentives to developers willing to build for entry-level buyers, introduce restrictions on "flipping" houses (maybe some prohibitive tax rates if you sell for significantly more than you bought within the first five years of owning the property), explore ways to recycle or re-use building materials, build developments with the intention of improving the community rather than getting rich.

[LJ]

 

 

So the middle class and skilled workers aren't valuable enough to live in the place they work? If everyone in my position moves to Prince George to buy a house, who the heck is going to do our jobs?

A lot of people started off in Prince George or other communities like it. Bought an affordable house, watched it grow in value before eventually being able to afford to live in Vancouver or some other desirable location. You started out living in the desirable location. You have two choices, suck it up and eat the raman or move. Why should other peoples investments be lessened so that you can afford to live where you choose? 

[FirstTimeHomeCrier]

Why should other peoples investments be lessened so that you can afford to live where you choose? 

 

I have an answer to that, but I doubt you would like it.

[qv]

I have an answer to that, but I doubt you would like it.

And thus you have gotten to the bottom of the problem. Those without houses want prices to come down. Those who already own homes want prices to go up, or at least stay the same.

Which group should policy try to help? Can policy be set that will help both groups at the same time?

[VicHockeyFan]

Which group should policy try to help? Can policy be set that will help both groups at the same time?

 

Probably not.  Good ol' fashioned laws of supply and demand won't let that happen.

[dasmo]

Oh, congrats on your new house purchase Johny!

[MarkoJ]

In 2009 I bought one of the cheapest pre-sale units at The 834; it was $198,900 with a pretty crappy layout (bedroom had no window, etc). One of the best decisions I made that really helped get me going financially. First of all it was a great place to live; small but it had everything I needed in some 500 sq/ft.  Mortgage was extremely small, utilities were cheap and I was able to bank some cash while living there. When I moved out I rented it out and from day one I was $300 cash flow positive per month on the rental.  It has been 5 years of the same tenant and 5 years of cash flow positivity every month.  The unit, by luck, has gone up significantly in value and the principal has dropped significantly as well. Because the condo wasn't bleeding money at any point, rather the opposite, it didn't hold me back from buying more properties. To move forward I had to increase my income but at least the condo wasn't hurting (i.e. cash flow negative or worse non-rentable where I would have to sell it at a loss in a bad market).

 

In 2009 I was 23 years old and already making about $70kish/year for a couple of years (respiratory therapy -> http://www.tru.ca/sc...rograms/rt.html, had a ton of job offers when I graduated at 21 as much overtime as I wanted )  but instead of going for a two bedroom re-sale condo I went for I knew would be the best possible investment long term even though it meant living with my parents (in 800 sq/ft) for the following two years while the building was being built.  

 

Sometimes you have to make a few sacrifices to get rolling forward....I remember all the naysayers in 2009..."building will never get built," "developer will screw you over, I would never buy something off paper," "layout sucks," "how can you live in 500 sq/ft," etc.

Edited by MarkoJ, 22 March 2017 - 11:31 PM.

[aastra]

 

I remember all the naysayers in 2009..."building will never get built," "developer will screw you over, I would never buy something off paper," "layout sucks," "how can you live in 500 sq/ft," etc.

 

I'm still not convinced that condo districts along the shores of False Creek will ever really take off.

[johnk]

Our rule of thumb was buy to live in it and don't sell for at least five years if you want to make some profit (in a normal market).
I'm guessing here but on a $500K dwelling buying and selling fees, legal, transfer taxes etc might be $30K. That's dead money, bye-bye. Said dwelling has to sell for that much over total buying costs just to break even. People often do not consider that total when running their numbers.

Edited by johnk, 23 March 2017 - 09:05 AM.