left already at VREAA 20 May 2011 8:53pm -
“I moved to Vancouver from Holland 3 years ago because my wife’s family lives there and many of my friends and family also.
Planning to buy a business, house and settle.
We had approx 10million CAD in cash. After looking at all possible businesses for sale for two years, we realised that there was really no opportunity to buy smth decent with cap rates higher than 3 to 4% same as what our money was earning on a savings account (most businesses were franchises, restaurants and other retail).
We rented for 2 years thinking that the RE prices will fall to reasonable levels.
It was not so much that we could not afford it but having come by our money the hard way, we realised that there was really not value in paying 1.5 million to live in very ordinary poorly build house. Weather was not so much an issue for us are we are used to rain and we really did not have bad whether the two years we lived there. The summers were beautiful, we liked it so much.
Last year we decided to invest in the States and moved here on an investor E2 visa. We bought an apartment building (42 apartments for 3 million USD) with a cap rate of 6.5%. The same building in Vancouver would cost 6 to 8 million.
And since we are here, I can tell you that once you get used to the San Diego sunshine, you can hardly dream of another place.
We just bought a house four ourself ( 860 000USD) with swimming pool and ocean view, lots of oranges in the garden, they are ripe and sweet now. Unbelievable how far the money goes here compared to Vancouver. Evth is cheaper. Vancouver is a TOTAL RIP OFF anyway you look at it. I will never regret the decision to leave.
Also, having worked for 27 years as an electro-mechanical engineer in Holland and having registered 7 patents during this period, and managed countless projects around the world, I thought I might get a part time consulting job in the industry , mainly to do smth useful and not get bored rather than to make money.
To my surprise no body recognised my credentials, I had to be registered to practice engineering there, and to do that is going back to school, pass all exams again, and once you do that you have to be coached for about 3 to 5 years by another professional engineer, almost mission impossible. I was stunned. It was the same thing for my wife, architect graduated from one of the most prestigious schools in Europe. Impossible to practice here.
Now, when you look at all the architectural junk that Vancouver is filled with, I really don’t know were they get those creative architects / designers…
I am so amused checking from time to time the blogs that helped me so much understand RE craze in vancouver and feel sorry for the people waiting on the sidelines.
I wish you good luck and hope things return to sanity sooner in the rainy city.
My advice:
Don’t let RE prices dictate your life plans, move on to where the sunshine is and life opportunities await. There are very little in Vancouver.”
[We are now satisfied that this anecdote is likely genuine, so we have headlined it. -ed.]
The USA is the last place this gent should have moved. 1.4 billion rounds of ammo and there are 345 million hand guns in the hands of an increasingly uptight population.
Just because you have ten million doesn’t bless you with brains.
Vancouver is not a place I like anymore – but it beats living in California. CA is broke. These people will be really unhappy they did this, good luck!
I have liked and agreed with some of your posts in the past, but not this one
If you are a decent earner (upper middle class), then living in any major city in US beats living in Vancouver. Better quality of life, more culture and better things to do.
(Healthcare…yes I know..but both systems have their pros and cons)
I think you are wrong about this, there is nothing wrong with living in the USA if you have a lot of money or if you are very poor. If you have lots of money you are fine and can afford great health care if you are very poor and living on the street the weather is better and you have a gun to defend yourself
I would not bet against the USA.
I think you’re misinformed. Wall Street cheered a non-existent US recovery in 2009, and 2010 was mediocre, but it does appear the bottom is in for the United States. Do you read CalculatedRisk? If not, here you go:
Household formation:
http://www.calculatedriskblog.com/2011/05/household-formation-and-big-l.html
Business lending:
http://www.calculatedriskblog.com/2011/05/survey-small-business-lending-is.html
ISM Manufacturing:
http://www.calculatedriskblog.com/2011/05/ism-manufacturing-at-604-in-april.html
Construction spending:
http://www.calculatedriskblog.com/2011/05/construction-spending-increased-in.html
And job openings:
http://www.calculatedriskblog.com/2011/05/bls-job-openings-increased-in-march.html
With all five of those things in the black, there is no real doubts of a US recovery. It is happening, largely due to currency debasement and asset and wage deflation. Painful, but they did it. Canada did not.
Canada took the “Greenspan approach” and avoided a sharp recession and purging of debt by holding interest rates at 1% for 3 years. Household debt exploded, everyone bought more house than they could afford at normal interest rates, and now inflation is eating family budgets. Whatever advantages Canada had in 2007 are long gone. We have taken precisely the same sequence of steps that the US did in the 2000′s, with the same results so far.
A closer look at the data is frightening. By most measures, Canadian real estate was fairly valued in the early 2000′s. Not true in the US. Their prices started going up in in 1998. Four years later, with housing already more richly valued than ever before, Greenspan cut interest rates to 1% and housing went up further in defiance of all fundamentals:
http://www.ritholtz.com/blog/wp-content/uploads/2009/06/case-shiller-updated.png
Canada started later and rose slower, with a lot of genuine economic growth backing the early rise. But our prices detached from fundamentals by 2005. Interestingly, we seem to have gotten the subprime mortgages first. That would be zero-down, 40 year amortization, with no income verification care of the CMHC. The Economic Analyst has some nice graphs:
http://www.theeconomicanalyst.com/content/examining-house-prices-and-rents-across-provinces
http://www.theeconomicanalyst.com/content/house-prices-and-inflation
So in 2008, with housing already more expensive than ever before, the BoC starts slashing interest rates. And guess what happens? House prices rise in defiance of all fundamentals. And we keep interest rates at 1% for how many years? 2009, 2010, 2011? Yup.
In short, we have done the exact same things as the Americans, in a slightly different order, with largely the same result. How much of our economy is now underpinned by housing? What percentage of our job base? How many people put down the minimum and and require low interest rates to service the loan? Those questions had people yelling at Peter Schiff on Fox News in 2006. I’ll make the exact same call for Canada right now. We are toast.
For the US, I think we’ll see a slow but steady recovery driven by manufacturing and consumer spending. The best investment I see is respectable houses with 8% rental yields in Michigan, upper New York, and Ohio. A lot of these are 70k. They could be over 100k in a few years, plus or minus the currency, which I think will be a plus. The courageous long term investor can buy classic homes in Phoenix and fix them.
For young Canadian families, affordable housing is the #1 issue. Canada has not had it for 5 years, and it could be another five years before the combination of a good job and an affordable house appears in this country again. In the meantime, expect a shitstorm of people who expect things for free, so maybe the US is worth trying. The weather is certainly nicer.
For the highly educated and frustrated, why haven’t you moved yet? Seriously. The US has lots of jobs for you, and it is easy thanks to NAFTA to get them. Stop hurting yourselves and go live your life. Living in a different country is interesting, it’s good for you, and you can always come back. Things are not going to get any better here for a while. Certainly not in Vancouver anyways.
And there’s no need to tell the ambitious people. They’ve certainly left. I think we’ll be leaving too. It has been a torturous decision, with family here and everything. But we have our own family to look out for. I’m worried that if we stay we’ll do very poorly. We have not benefitted from the housing mania (the jacuzzi tax credit was particularly painful). We’re just going to be asked to pay for it all. We have already reduced our expectations but now it’s getting ridiculous. What a crumb deal. It’s just too much.
agree Ralph Kramden,
moving to the states is selling your soul to the devil. More poverty, more living on the street, more hungry, child poverty, etc. But if all you care about is that one of them isn’t you and you can buy a home , well, please move.
Have you ever lived in US? Not saying that it is the best place on earth but do you see people (or new immigrants) falling over backwards trying to come to come to Canada instead of the US? The only one who are here are because of lax immigration standards
I have lived in both places. Your response is laughable…more like a fat girl trying to reaffirm herself..
yes, I lived in Detroit and been to 30 different states.
An yes, people choose Canada over the US to immigrate; partly because it’s easier, mostly because we’re better.
Rusty
Sure. Whatever dude.
Hey..I have read your other posts. I am not going to waste my time pursuing my point. Thanks
Moving to the states is like selling your soul to the devil? Poverty! homelessness! guns! Have you visited the US – or is all of this from the movies? Did you visit Seattle or Portland, get into a gun fight, and then go feed all of the starving kids who are begging on the street?
Canada doesn’t feel much different then living in the US on a day-to-day basis, except that the housing costs are insane.
And the wine is much more expensive. Miss Trader Joe’s 5 buck chuck.
I think living in the US or Canada it is not that different at first sight.
We were seduced by Vancouver initially , but our main reason to move there was my wife’s family. Vancouver does make a great first impression indeed. Living there permanently is a different story.
However there is not much difference between Canada and US as far as general lifestyle is concerned. Most of Canadians live along the border, and if there was no border, it will be hard to tell the difference between the two countries, at least the border states.
Some more impressions:
During our 2 years we lived there, we were unable to get a family doctor and I personally had to wait 5 months and 3 weeks to get a CT scan done. This was a huge turn off for us. Yes, you don’t pay, but like most things you get free they aren’t worth so much. The only way to get good health care in Canada is to go to the emergency room and be an extraordinary good comedian so you are processed in priority.
Canadians do not realise that they pay up to 40% more for the same things than the Americans do in the name of free health care. And for some reason I don’t understand they love to bash the Americans when in fact they are not different to an outsider, other than they are gouged at every corner and taxed to death.
The public school system for the kids despite the belief to the contrary is not even close to what we had in Holland. Our experience was that of typical heavily unionised teachers more concerned about their well being than teaching. Not saying that all teachers are like that, just our experience.
Unless you live in downtown, there is not much street life, then the weather does not help.
We were also surprised by how racially divided Vancouver is with areas like Surrey almost exclusively being Indian , Richmond being Chinese and Burnaby a mixture of both. Their numbers being so big, there is no real integration of immigrants, and you feel like being in a foreign country when in those places. I didn’t like it.
Anytime you drive in Vancouver, it feels like the city is in a state of permanent traffic jam. I have yet to see here such traffic jam. People might not like the highways , but they are highly efficient.
There was almost no real opportunity to invest in things other than RE, retail, restaurants, and basic services. Also, with our qualifications not being recognized, this was a real turn off.
We have bought in Del Mar north of San diego and it really does feel like paradise to us and the kids. We love the village, the Spanish Californian house styles and architectures are lovely and there is no comparison to Vancouver dull, sad and kitsch architecture.
San Diego in my opinion is way safer than Vancouver, and I have been to poor neighbourhoods as well.
Yes , there are lots of Mexicans here, but there is zero tolerance. Furthermore we like Latin culture, their food is excellent, their lifestyle is lively (it does not compare to the austere Chinese and Indian ) and there is no exclusive Mexican ghetto city here. There is no gunfight in the streets and people are much more sympathetic overall. Images of war zones in the neighbourhoods are way overblown. I have yet to here of some gunfight or drug related crime in the local news here, whereas in Vancouver is common occurrence. And it is better to be poor here than in Canada in my opinion.
I could go on forever.
The only thing I miss about Vancouver is skiing in Whistler. And some good Canadian friends. There is absolutely nothing else that will make me come back there. Nothing. People who think that USA is going bust are the same that those predicting the end of the world. They have never traveled through California. Not that it is impossible for the US to go bust, but that will certainly be the last standing country to do so on this planet.
San Diego does sound nice…
FYI: You can get private healthcare, including private CT scans in Vancouver too.
you have just given a 6th generation white canadian all the reasons he needed to GTFO ASAP.
now if only i could not feel guilty about leaving the family.
Rusty,
I’ve lived in both places, and although I love the people here, the housing prices (and the housing stock) are giving us second thoughts about staying. And, while I’d miss my friends, people are also pretty cool in Portland.
After I read your e-mail I joked with my partner that you must have lived in Cleveland. Not suprised you were in Detroit. Aside from Detroit, I would also advise against living in Gary, Indiana; Youngstown, Ohio and western Pennsylvania.
Comparing Vancouver to Detroit — Isn’t that like comparing Seattle to Windsor? Or comparing Winnipeg to San Fran, Portland, or Chicago, Denver, Santa Fe, or Austin, TX?
BTW – I was looking at zillo today and comparing Seattle prices to my Canadian city. Friends just bought near Greenlake for 375K. A house, not a condo. (A nice house, two-story house.)
You can get beautiful places with water views for 500K near the University:
http://www.zillow.com/homes/seattle_rb/#/homes/for_sale/Seattle-WA/16037_rid/1_hidenhoods
Welp, I’m half American, but I grew up mostly in Vancouver. I’ve lived in Vancouver, Portland and California. Each has their own problems, but I still would rather live in Canada to the US to be honest. And like I said, my mother is American and I’ve lived there too growing up so I have no vested opinions.
But even living in Van I did get sick of alot of the hob-snobbery within the city as well as the over priced nature of RE. I mean, growing up lower class, how the heck could I ever own a million dollar home??? And the job market is particularly grim especially within the trades. It has become nearly a playground for the rich, with very few opportunities.
There are many other places in Canada I think are better to get started and then only later, once you’ve made it then perhaps move to Vancouver. Thats what I’m thinking. As for the states, if you go to California, I like the north near towards Santa Barbara. Tigard is a nice city in Oregon as well. But southern California in my opinion can be a nasty place to live if you’re just trying to make it and aren’t financially set.
“And the job market is particularly grim especially within the trades. It has become nearly a playground for the rich, with very few opportunities.”
Yeah – both Vancouver and Seattle got this problem in the last 15 years. Too many day spas. Santa Barbara has this problem badly – way too many wealthy people.
But when then economy improves I’ll be looking at Portland. Roses along the downtown streets, not snotty, relaxed people, Powells bookstore, Pacific Northwest…
True dat… Portland is Vancouver with better climate, world-famous wineries 30 minutes away. Amazing beaches 1 hour drive away, better real estate valuations and very few douchebags. Oh, I forgot to mention, no sales tax. And if you live in Vanouver, Washington, no income tax.
Pingback: Prospects Look Better In The US – “Ambitious people have left”; “I think we’ll be leaving too.” | Vancouver Real Estate Anecdote Archive
so the guy proved to you he has $10mil in cash? then i have $20mil under my bed!
[Haven't you heard? Lots of people coming to Vancouver have money to invest. -ed.]