ronthecivil Posted January 24, 2013 Share Posted January 24, 2013 I don't think Vancouver is any more expensive, cost of shelter wise at least, than Seattle and the big California cities once you factor out the ghetto warzone neighborhoods and the light-year-away incorporated sprawl. Any area without a major downside to it, you pay big, same as here. Link to comment Share on other sites More sharing options...
Electro Rock Posted January 24, 2013 Share Posted January 24, 2013 The costs might be as expensive. If you are in Huntington beach ya it's housing starting at a million bucks. But you can live in middle class neighborhoods for less. My old coworker had a nice place in Mountainview which is a nice town and it didn't cost him a million bucks. But even if housing cost the exact same salaries are much, much lower here. Salaries (at least for people with degrees and good jobs) are higher in the states in general, and Vancouver has the lowest salaries in Canada (outside of the public sector). So if you measure the cost to buy a place relative to income, the costs are much, much higher here. Heck, in areas with a major downside (like North Surrey) prices aren't exactly affordable. Single family home 500k and up unless you want to live in a run down house on a very busy street, and even then you are looking at 400k for the lowest of the low. And for that to be affordable you would need to be pulling in 80-90k a year. (And that would be affordable in the "not severely unaffordable" kind of way). So if someone making 90k a year is barely getting into the single family home in north surrey who the hell is buying the places even in supposedly blue collar Burnaby, Coquitlam, or New West, where just crossing the river adds 200k to the price! Link to comment Share on other sites More sharing options...
ronthecivil Posted January 24, 2013 Share Posted January 24, 2013 I can't say many positive things about Surrey, but its not or even close to being a U.S. grade dangerous ghetto. Good point about relative wage levels, but straight prices aren't all that much different, bearing in mind the tiny, tiny footprint of Canadian cities vs U.S. ones. For example, my ex lives in the dumpy Hollywood area of L.A., in a decaying building that looks like it belongs in the DTES. She pays $1700 a month for that mess, next door you've got renovated suites going for $3000. Living in a decent area where you don't have drunks, crazies and cholos roaming around will really cost you, unless you want to live so far away from everything you might as well not be in the metro at all. Link to comment Share on other sites More sharing options...
Electro Rock Posted January 24, 2013 Share Posted January 24, 2013 Sure but that's downtown in a region of what 15 million people? Go out into the suburbs and the prices come way down. And I don't mean way out. Prices could come way, way down and still be outrageously high. I don't expect them to stop being outrageously high. But they don't need to come down much. Even a 10-20% drop is going to hit a lot of people, and hard. Link to comment Share on other sites More sharing options...
ronthecivil Posted January 24, 2013 Share Posted January 24, 2013 The suburbs are way out there though, it may not seem like it because its usually easier to travel a given distance in L.A. compared to Vancouver, but the nice suburbs are far. There's the inner burbs of course, they're very affordable, but unless living in a place like Compton or East L.A. is appealing, you'll have to look elsewhere. San Francisco and San Diego are even worse. One of the issues clouding price comparisons is that U.S. cities are so much larger in area, to the point where even Seattle is the size of the 5 largest Canadian cities combined, and those huge footprints bring down the average statistical housing price. Link to comment Share on other sites More sharing options...
taxi Posted January 25, 2013 Share Posted January 25, 2013 Sure, but there's some similarities and a few differences as well... 1) We don't have high unemployment but if there's a housing slowdown that will have a knock on effect on the overall economy as the housing construction sector is a very large part of the economy. As well, with less money for HELOCS and what not that will hit the reno industry hard too. Will it be enough to make a negative spiral? No way to know for sure. But you know it's possible which is why when we had the 2008 downturn they put all kinds of stimulus into housing reno grants as an example. Two I agree with. 3) To other countries! If the economy slows down wouldn't really need to have people leave in droves. Just enough doom and gloom to reduce the desire to come and that reduces demand even further. 4) Lending controls. Yep, not as bad as the states, but given the amount of time we had to work with our not quite as bad system we actually managed to rack up a higher per capita debt relative to income than the US did at it's peak. Sure, we might be more credit worthy, but we're just as leveraged and then some as they were before things went south. Vancouver does have more in common with other cities and it's why I have no problem believing that prices will never get below say 5-7 times average income. But to even get there would require a significant drop in housing prices over a five year period combined with significant inflation over that time. Link to comment Share on other sites More sharing options...
ronthecivil Posted January 25, 2013 Share Posted January 25, 2013 This issue with income to debt ratio is a red herring. Firstly, yes the UK and the USA had high income to debt ratios, but that doesn't necessarily relate to a crash. There are plenty of European nations with much higher ratios that did not experience a crash, and plenty of nations with lower ratios that did experience a crash: http://epp.eurostat....&pcode=tec00104 In order to judge whether the ratio is important you have to look at both the quality of the debt and the quality of the jobs. Are the jobs temporary? Are they in sustainable industries? Is the debt consumer debt or is it debt that has been leveraged for solid investments. What is the ratio of debt to equity in the home etc... You'll also notice from the chart, debt to income ratio equivalent to Canada's (160%) or higher are normal for strong economies. Nations like Sweden, Germany, Norway, the Netherlands, and Denmark, which have the highest income to debt ratios in the EU are also doing the best. They have sustainable economies that support investment. The problem with debt to income ratio as a measure is that it does not take into account equity. I could have $1 million of equity in $1.2 million dollar home, and earn 50k a year. This would put my income to debt ratio at 4, yet I would be a millionaire in an exellent economic position. Link to comment Share on other sites More sharing options...
Grapefruits Posted January 25, 2013 Share Posted January 25, 2013 All the hate for Surrey and yet the property values there continue to rise. Surrey is definitely expanding at a large rate and parts of it are far nicer than Vancouver. Link to comment Share on other sites More sharing options...
The Colt 45s Posted January 25, 2013 Share Posted January 25, 2013 You would also be leveraged to the teeth (in one non diversified asset no less). I wouldn't call that an excellent economic position. You would be better off taking the 200k and putting it on roulette. At least then you can only go down to zero. A 20% decline in value and your almost a years salary in the red. A 30% decline in value and your almost four years salary in the red. With that much at stake I would be ****ing the bed with so much as a hint of declining values. Especially if I saw that graph and noticed that the first ten percent has already arrived...... Link to comment Share on other sites More sharing options...
Dion Phaneuf Posted January 25, 2013 Share Posted January 25, 2013 All the hate for Surrey and yet the property values there continue to rise. Surrey is definitely expanding at a large rate and parts of it are far nicer than Vancouver. Link to comment Share on other sites More sharing options...
ronthecivil Posted January 25, 2013 Share Posted January 25, 2013 Yup. Surrey's changed a lot since the '90s. All the newer single family homes are going for 550k+ in Newton, Fleetwood, Clayton, etc. The monster homes are going for 750k+ Also, more or less any home in Panorama Ridge (basically Newton), Elgin, Morgan Creek, Grandview, Hazelmere, etc. are 1M+ ---------------------------------------------------------------- Vancouver is expensive but it really comes down to proximity and ego. Link to comment Share on other sites More sharing options...
ronthecivil Posted January 25, 2013 Share Posted January 25, 2013 http://www.businessinsider.com/imf-sees-a-bubble-in-the-canadian-housing-market-2012-1 Link to comment Share on other sites More sharing options...
D-Money Posted January 25, 2013 Share Posted January 25, 2013 Those prices in Surrey are more likely to fall than even Vancouver. The million dollar homes in Newtwon the most. Thing is about Vancouver is the 4 million dollar house is probably owned by someone wealthy. The million dollar Newtown home is more likely to be owned by someone that is leveraged to the teeth and all giddy about have a hundred k in equity. History shows swanky neighbourhoods actually tend to fair the best. It's the pretenders that really get slaughtered...... Link to comment Share on other sites More sharing options...
Electro Rock Posted January 25, 2013 Share Posted January 25, 2013 I see so many folks living in RVs, vans, ex-delivery vehicles and even retired schoolbuses these days it's not funny, you'll see it even up in the British Properties. Link to comment Share on other sites More sharing options...
mdehaan Posted January 25, 2013 Share Posted January 25, 2013 The debt-income ratio of Canadians is 164%. That is higher than the American ratio (160%) when thier housing bubble popped. Link to comment Share on other sites More sharing options...
taxi Posted January 25, 2013 Share Posted January 25, 2013 You would also be leveraged to the teeth (in one non diversified asset no less). I wouldn't call that an excellent economic position. You would be better off taking the 200k and putting it on roulette. At least then you can only go down to zero. A 20% decline in value and your almost a years salary in the red. A 30% decline in value and your almost four years salary in the red. With that much at stake I would be ****ing the bed with so much as a hint of declining values. Especially if I saw that graph and noticed that the first ten percent has already arrived...... Link to comment Share on other sites More sharing options...
taxi Posted January 25, 2013 Share Posted January 25, 2013 The debt-income ratio of Canadians is 164%. That is higher than the American ratio (160%) when thier housing bubble popped. Link to comment Share on other sites More sharing options...
Berto91 Posted January 26, 2013 Share Posted January 26, 2013 Well, hopefully when I move in 5-6 years, it'll have gone down dramatically.. Link to comment Share on other sites More sharing options...
Electro Rock Posted January 26, 2013 Share Posted January 26, 2013 Well, hopefully when I move in 5-6 years, it'll have gone down dramatically.. Link to comment Share on other sites More sharing options...
key2thecup Posted January 26, 2013 Author Share Posted January 26, 2013 If prices drop by any meaningful degree, there'll be good reason for it, as in the kind where you'll probably want to avoid moving here in the first place. Link to comment Share on other sites More sharing options...
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