Pat at VREAA, 17 May 2011 8:11am, writes in response to the anecdote: Doctors Leaving Vancouver – “My friend, a surgeon at Children’s Hospital, said he couldn’t have the life he wanted in Vancouver because of the insane real estate prices here”, 16 Feb 2011 -
“Even though prices are obviously too high in Vancouver, the idea of a highly paid surgeon leaving because he can’t afford to live in Vancouver is absurd.
It says more about that person’s idea of ‘lifestyle’ than anything else. How is it that I can live here very comfortably on a self-employed salary ranging from $35,000/year to $50,000/year with my mature student spouse who earns maybe $15,000 part-time?
It’s ridiculous that someone says they can’t afford Vancouver on, what, $200,000/year. Utter nonsense.”
Pat -
Many thanks for your comment. Arguments similar to the one you make are made regularly and in various forms, so we’ll headline a discussion here.
We don’t find this surgeon’s decision absurd at all.
It is important to realize that, when “prices are obviously too high” in a RE market, they seem so to people at all levels of wealth and income. The surgeon takes a look at Vancouver RE, and realizes that he cannot afford the type of property that he’d expect to be able to live in, given his training and income. In actual fact he likely earns substantially more than you suggest, perhaps over $300K, or $400K, or even more. He could prudently afford a property selling for, say, $1.6M-$1.8M. But, take a look at what he gets for that on the westside at present. Then compare those properties with the houses that surgeons earning similar incomes, living in Washington State, or California, or Hawaii, or New York, or even Ottawa, get to call ‘home’. That’s the point. The surgeon in Vancouver cannot afford to live a lifestyle commensurate with his training and income. So he moves. This is a completely sane decision.
It is inevitable that a speculative mania in real estate should causes such forces to take effect; the misallocation of resources is characteristic of a bubble. In this case, valuable human capital is squandered and lost to our community. Many skilled professionals have made similar decisions, by either leaving or not migrating here to Vancouver in the first place. There have been anecdotes on these pages of business executives and university professors, amongst others, avoiding Vancouver for these reasons. [See the 'Avoiding Vancouver' post category for some examples.]
So, yes, it may seem that it is unfair for the surgeon to say that they “can’t afford” Vancouver; but their conclusion and their move is also perfectly sensible. It would be more accurate for him to state: “I can’t afford the kind of home in Vancouver that I can afford in every other North American city.”
This line of thinking is relevant to all Vancouverites. You may think you can ‘afford’ Vancouver, but have you considered what a similar income (or your home’s current market value) would get you elsewhere?
We’re not concerned that this specific force will leave our city deserted. Everybody can’t leave at once. It’ll only take a small percentage trying to cash out for the market to crash.
While the bubble remains in existence, however, it is sorely damaging our community by the many perverse pressures that it applies; having professionals leave town is one of them.
- vreaa
surgeon wants to be a bigger fish in a smaller pond. That’s the kind of arrogance I’ve come to expect from Drs. That kind can move out if they wish, we’re better off without them as they make for horrible Physicians
lol you are hysterical
I forgot, only real estate speculators and real estate agents have the right to a comfortable lifestyle in Vancouver… as opposed to people who actually do useful things.
Yup. Toronto, Montreal, Seattle, LA or Hawai are all good examples of smaller ponds, right?
of course, they’re not Shangcouver.
Ah troll, go away. We don’t want your unkind wrong-headed assumptions and conclusions spewed all over what is a perfectly decent discussion site…
One things folks often don’t take into account is the high costs of education and running their own business that many physicians pay out of their “exorbitant” salaries. Many graduate with hundreds of thousands of dollars in student loan debt and the costs of running a medical practice are not insignificant. Plus , anyone who invests that much time, energy, and cash into being a professional should have some expectation of being decently rewarded for it else you’re just not going to get new students following in their footsteps. If you can make 2 or 3 or 4 times as much per year as a freakin 12 years trained surgeon with your 5 week real estate license why would anyone choose to be a surgeon?!! This is a serious problem.
As for living on less, as a lifestyle choice, great! Without choice, not so great. Sure there are ways to do this but it isn’t easy nor is it desirable for the long term for many people. If you’re making enough to get by, you’re probably not making enough to save for your retirement or a sudden health crisis, to regularily contribute to the arts or kids sports or charity organizations, to buy a home of your own or take a family vacation, etc… and so the cycle of poverty continues for many. But the property development/ real estate cartel folks are doing well.
FY, not sure if it’s been mentioned but COV has started a website and a consultation process on affordable housing and transit. Check it out.
http://talkvancouver.bangthetable.com/topic/what-are-important-steps-we-need-to-take-to-provide-affordable-housing-for-all-citizens1
Here’s your dose of yellow journalism for the day.
RBC’s economics research department does a report on housing affordability in Canada. They say of Vancouver, “We fear that the Vancouver market is becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent.”
http://www.rbc.com/economics/market/pdf/house.pdf
How does the Vancouver Sun, bastion of journalistic integrity, choose to report this story? Why, by implying that prices will keep going up forever! The real story, to them, is that housing affordability will deteriorate forever, meaning prices can only go UP!
http://www.vancouversun.com/business/Vancouver+remain+least+affordable+markets+country+report/4815507/story.html
Another milestone in the Sun’s grim march to total irrelevance.
This is simply an economic one (i.e. how to distribute scarce resources): buy small house in Vancouver and live in Vancouver, or buy larger house in Seattle and live in Seattle. That is the decision this person faces. It is a statement of fact.
On the other side the province and city face another economic issue. They have trained a resident cardiac surgeon and he leaves for the economic reasons cited above. Vancouver is pricing itself out of economic growth and it’s not the only game in town. Without lowering the cost of living it needs to raise its salaries to retain top talent.
rusty, I’m disappointed in you.
that’s why we get Rusty and his ilk moving here, instead of trained surgeons, Rusty et al are attracted at making money with no work – the surgeon just wants to work and enjoy the fruits of his actual labor, and has a sense of value attached to both, something people in these parts seem to discount.
“rusty, I’m disappointed in you.”
The mistake you made is that you took him seriously.
He is just a troll.
Not a surprise. This happens in Manhattan as well. If you visit the hospitals in a 5 hour radius of NYC you will find some very high powered surgeons and specialists who decided that after 12 years of expensive school, they didn’t feel like living the middle class lifestyle with their school debts dogging them and could instead live easy like kings elsewhere.
but there still are surgeons in Manhattan, right? How is this possible if they all leave? Puzzling indeed
Yeah, they all leave. The hospitals are empty. Why didn’t anyone notice??
The exodus of a few hundred surgeons is a pittance in Manhattan. Their arrival is huge in the city of 200k they relocate too. But, never mind, I realize context is a disability for you.
one surgeon leaves, four in line take take his/her place. Good riddance
rusty -> Good riddance or riddance of good?
Do you really believe that Vancouver is better off for there being pressure that drives away usefully skilled professionals?
What is your position on industries that have left or avoided Vancouver because of RE price levels?
It’s just the market working its magic. When families move East and schools shut down because of it… or when top talent moves elsewhere in search of cheaper living… these are just two examples of the market self regulating.
It’s when you get enough of these that prices will self moderate. The govt can intervene but it’ll only last so long and the cards crumble 100% once interest rates go up.
As a physician and wife of a kids surgeon myself, everything you’ve said in this post is bang-on VREAA. BTW we have friends in the same position. We’re all renting…. And loving living in awesome houses which we’d never be able to afford in Van’s current market. We have a great life with our kids, enjoying all the things BC has to offer. We’re not chained to a ridiculous mortgage and we can move ‘hood when we fancy!
To us owning a house is not our raison d’être. We are prudently saving for retirement and also living our lives. In our line of work we understand that each day is precious.
We also understand the true value of money. And what our hard-earned money gets us here in terms of real-estate is not tenable. We have all lived in other large cities in Europe and North America and see the insanity of Vancouver.
And Rusty, before you pass comment, I work with patients from the DTES, a disadvantaged disenfranchised group. We give back to society…more than can be said for those empty houses owners up on marine drive.
Thanks, RN. Someone who moves away from Vancouver does so based on trade-offs. This particular individual — real or not — has decided that ownership has value for him and his family and is willing to relocate to maximize his capital. The doctor angle is a bit of a sidebar but instructive to show that individuals on both ends of the income spectrum are making some tough economic decisions based on high house prices, to the detriment to Vancouver’s economy in my view.
one skilled professional leaves, four enter.
rusty you are a total moron
just so you don’t get lost
http://maps.google.ca/maps?f=q&source=s_q&hl=en&geocode=&q=vancouver+airport&aq=&sll=49.190791,-123.141632&sspn=0.084477,0.154324&ie=UTF8&hq=vancouver+airport&z=14
the RE price is just an insult to anyone who’s working and not flipping/realtors. F this place. soon, the only three groups who’re still staying are flippers/realtors, unemployed, and those owners who trapped in the place due to negative equity. BTW, one can belong to all the three groups at the same time.
oh, and those chinese who somehow receive (earn? i doubt) millions from their homeland and enjoying the chinese lifestyle in Richmond Canada.
subduction zone earthquake – not a matter of if but when
city of glass indeed.
Rusty;
From my vantage point one issue that I have seen now for at least 5 years is that the most talented young academics NO LONGER come to UBC as a result of the insane cost of housing. Someone we were trying to attract for years to UBC (a world-class scholar, who is Canadian and who studied in the U.S. and Europe) ended up going to U. Alberta for a 150K per year chair position; he turned our offer down flat in one day after going around town with a real-estate agent. Instead we hired someone well down the list who is not remotely in the same league as this individual. Invariably, for our hiring we now make much longer hiring lists and end up going through a several rejections before the 4th one in line (typically a single young person just starting out with a rather mediocre record) accepts the job….. For the past year I not bothered participating in this hiring process. as it is clear that the process is excruciating and we are not getting the same quality people as we used to prior to 2005.
Would you be concerned if the typical physician who stays in Vancouver is the one with family cash and a big inheritance and not the one who actually has the most skill in their profession?…. Perhaps reflect on this if you ever go in for surgery… The housing issue affects all working class people (blue collar, white collar etc…) who have local incomes…. Although our jobs are not so portable, and it will take some time to find academic jobs elsewhere, we are working hard to leave to a NON-WORLD-CLASS-CITY….. My view from my first blog last week is that a “world-class” city does nothing good for 90% of the population besides attracting hordes of speculators from every corner of the planet…. we are not interested in this game…
“The housing issue affects all working class people (blue collar, white collar etc…) who have local incomes…”
and that’s why rusty doesn’t give a shit.
rusty plays defense like the Sedins.
the argument about not attracting top academics doesn’t hold water. UBC has never been ranked higher in the world than now.
please back up your shit with facts and links and we might take you more seriously.
UBC is #30 in the world. Never been higher than this. If you’d done the research before taking the wrong position you’d be able to get your dinner past that foot in your mouth.
And regarding your accusation of me as unskilled, you have no idea buddy.
lol when did i call you unskilled?
i am curious, do you always fall for subjective stats like these?
best place on earth, livability statistics included.
has it ever occurred to you that these things are like Academy Awards? and probably quite often paid for as part of a PR campaign? i know from 10+ years in fine dining that this is the case with many of Vancouver’s ‘hottest’ restaurants – they pay for the reviews. i assume a for-profit university would be no different. as in certain large asian totalitarian countries, everything is about making the number, and being #1.
please offer me a link. i’m waiting.
being that i am a poor vancouverite with severe dental problems and no insurance, there is plenty of space to fit my food past my toes, in fact my nails help me grind up my sustenance, usually a can of beans and some stale toast.
This story might be about a surgeon, but I think the theme/bigger picture can hold for any profession. My husband and I both went to university, have good jobs, make good money, and we are in disbelief that we cannot afford to own property at this point in our lives with the incomes that we pull in. Granted, $200,000 is the new $100,000, but still.
You’re looking at a guy/girl that was smart and was going to be a surgeon and everyone goes, “Wow, a surgeon. Good you. You’re going to make a lot of money and you’re going to live the good life. Remember me when you’re at the top.” So he’s gone to school and worked his ass off and now he’s flipping through Architectural Digest making the big decisions: if he wants this patio to have four levels or five, should the outdoor bar have a Slurpee machine, whether the Bentley should have its own garage, and he’s picking out bear skins to lay out in front of the imported Egyptian stone fireplace in his mansion overlooking the water, where his 60′ yacht (is that long? I don’t know about boats) bobs in the water. Then he goes and looks at houses in Vancouver and he can get a 2,000 square foot tear down with no view, unless he cuts down the trees, in which case he’ll have a bunch of Birkenstock-wearing, granola crunching, marijuana smoking hippies on his front lawn at 5am with protest signs. So, yeah, he decided to leave. Duh.
lol it’s the new crack shack or mansion!
Oh yeah, has anyone thought of what would happen if China all of a sudden decided it wanted to tighten up it’s monetary policy (for what ever reason) and simply not allow people to take their fortunes out of the country.
And…. you folks are aware that one of the reasons the folks from China have so much money is we gave it to them in trade for “inexpensive” goods! Talk about something coming aroung to bit you in the A__!
Disclaimer! Not being racist, just operating from anecdotal evidence. If you can prove me wrong I will personally thank you.
i’m from Winnipeg and my wife live in vancouver. I travel for work to bc every week and i got to say the prices on the house i have seen in vancouver r next to madness and insanity. I can’t even phantom how anyone in their right mind would willing to be slaves for the rest of their lives just so they could be in vancouver.
Thanks for the comment Joe.
Yes, prices are still remarkably high in Vancouver. We expect them to be less close to “madness and insanity” (well said!) in coming years.
Agree with Joe; I work as a software architect, and I while I don’t think I make as much as a surgeon, I do OK. I definitely am tempted to leave, because while I can afford a house here, I could afford a MUCH nicer house pretty much anywhere else, with more $$$ left over for other things in life. If it weren’t for the difficulty in getting US health insurance (previous history), I’d be in the bay area in a heartbeat.