Peter Ladner shared this personal anecdote in his recent interview with David Berner on Shaw cable television, 25 May 2011. We’ll archive it here:
“I think about my own home that I bought in 2000, it’s worth about four times what I paid for it now. … I have four kids, three in their twenties and one in their thirties, and they’re never going to be able to afford to live in Vancouver because they’re not already in the market.”
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Latest Anecdotes:
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- “My folks find themselves at 65 still owing half the value of their home and recreation property to the bank. After almost 30 years of ownership in the BPOE and a number of boom markets, they have very little to show for it.”
- “Rent for $2,200 a month or buy and have a mortgage of $4,310 per month. Why would anyone buy?”
- “They were talking about two couples they knew who had recently bought a lot and planned to each build a house on it and live as neighbours.”
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- “One of my old high school buddies finally got her mother to sell the family home in Kitsilano – sold for over $1M, monies realized after debt paid off $185K.”
- “I know someone who just declared bankruptcy because her condo was assessed at $150k and she bought it presale north of $250k in 2005 or 2006.”
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- “She said the market was dead in Victoria and that it would remain so for a very long time. I asked how she knew. Her answer was fascinating and should scare the pants off the real estate crowd.”
- Kits Notes – “I’m pretty sure that this is the first 3+ bedroom property of any type that I’ve seen in the 5 years I’ve lived here that is priced below $700K.”
- “A beautiful Belfast home, in the equivalent of 1st Shaughnessy, bought at their RE peak in 2007 for £3.5 million, has now sold for £800K, almost 80%-off. The market didn’t suffer any significant economic shocks. Rates & unemployment didn’t skyrocket. They didn’t build more land. Sentiment just changed and the prices fell and fell.”
- “Two family members of hers are trapped, underwater, in condos on the East Side.”
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- Downside Weights On The Vancouver RE Market – “One of the older guys (over 60) mention to the guy beside him that he and his wife were thinking about selling their family home, and renting, in order to get some of the money that was locked up in the house.”
- “My buddy was looking to upgrade to a house in the Coquitlam area. With 200k extra for a home, that’s half of lifetime saving between him and his wife.”
- “I was walking in the Fraser neighborhood yesterday, I noticed that the population, on average, seem to be composed of workers. I belong to the top 5 percent in terms of income. Nevertheless, I cannot afford any of the houses for sale in that neighbourhood.”
- “Vancouver is an urban resort whose value mostly resides in its real estate and not much else.”
- “Rogers Communications is expanding into RE; aiming to relaunch website; providing critical data that can help potential buyers assess the value of a property from the comfort of their home computer.”
- I’m only 50 and I can just about retire if I want to, all because of a single simple decision – “When prices rebounded to their former highs, then rocketed another 30% higher to what I considered to be totally unsustainable levels, I decided that only a fool would pass up a second opportunity to harvest such a massive non-taxable capital gain, and in 2011 I sold my place.”
- The Vacant Lot of Versailles, Richmond.
- “I don’t think that most people think things are going to crash, just that there is going to be a slight correction, but it was amazing to me how sentiment has changed, and the fact Vancouver RE is too high was just understood.”
- “The ‘investor’ who purchased our house put it up for sale two months later, in January 1981, but the bubble had burst.”
- For A City To Have That Kind Of Vacancy, It’s Like Cancer – “Downtown, the vacant unit rate is so high that it’s as though there were 35 towers at 20 storeys apiece – all empty.”
- “What’s the worst that can happen? You can’t pay your mortgage, so sell your house! No fear.”
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Well, according to everyone here, he should sell his home now and wait for the inevitable crash, then buy everyone in his family a home.
exactly!!
Never is a long time. Renting is an option and not everyone needs to live in the West end. As with the stock market, there are peaks and valleys in real estate.
Not to pass judgment here but some parents’ children have been unwilling to take the risk of buying property in Vancouver for a while now. I welcome Ladner’s realization but I only wish he could have bothered to take on the plight of these people years ago when the signs of a massive bubble were already apparent.
In the words of Yoda: “Now, things are worse.”
There really needs to be a shift in social norms with respect to domicile. You are not subhuman if you rent a home. You don’t need to prove to the world you’re not a loser if you don’t buy a home or you live with your parents/roomates.
You are so right. Why are people who rent considered social pariahs?!
I find it refreshing Ladner is in such agreement with many of the problems expressed here, not only at vreaa but also in the local RE blogosphere in general. He has obviously given his viewpoints some thought.
One point Ladner raised is that there aren’t much data supporting why prices are high, whether foreign buyers, locals, and/or debt is responsible. Here’s a post I wrote over at vancouvercondo.info that relates to this:
http://vancouvercondo.info/2011/03/bc-negative-savings-rate-does-not-compute.html
I agree it would be nice to have more data, but I wouldn’t hold out for a year-long data gathering process when the lion’s share is available with about a week’s worth of concerted effort digging it up. We have solid indications already what’s going on that’s not sustainable, at least in part, and in my view we should enact some quick temporary policies or moratoria within a few months or quarters. And to be clear that does not necessarily mean restricting or penalizing non-resident ownership.
“An approximate answer to the right problem is worth a good deal more than an exact answer to an approximate problem.” – John Tukey
jesse -> Thanks for the comment and for the link to your March 2011 post at VCI.
If you were the tsar of everything, given what you know, what ‘quick temporary policies or moratoria’ would you enact?
Most of my suggestions will never see the light of day. But for a lark I would seriously consider:
1) Eliminating government-backed insurance of investor loans
2) Capping government backed insurance of owner-occupied loans and increasing deductible on all remaining government-backed insurance
3) Imposing larger capital reserve requirements for loans in regions where the price-income ratio is above the long-term average.
4) Allowing subdivision of wide lots and re-zoning for front/back duplex structures.
5) Increasing residential property tax rates
6) Charging surtax on unoccupied properties and enforce attempts to subvert it.
7) Enforcing secondary suite building codes
Preventing foreign capital injections a tough one and to be honest I don’t know how best to solve it. Surtaxes on vacant properties at least gets some money back off the top, and subdivision (I would hope) would give investors some pause before building larger low-yielding properties. There could be tougher Australia-like restrictions imposed, but those can be circumvented. The only potential advantage of such restrictions is that it could produce a perception that capital flows are being limited and cause money to look elsewhere for investment.
Now what will be done… heck if I know but I would first concentrate on further decreasing access to credit and dealing with the blight of vacant properties. The former should be a no-brainer for policymakers because it will eventually happen anyway whether they like it or not
Bravo!… [esp. #6]!
this is Peter Ladner’s wake up call. Suddenly realizing that he had more children than he can provide a good future for – or choosing a location to settle where his children cannot make a future. Both are his own personal decisions.
There’s a very simple solution to this, and that’s to make the cost of hoarding property higher. Instead we have subsidized it, first by having the CMHC guarantee lending on easy terms, and second by holding interest rates well below the rate of inflation. There is no hope for the young in this country. If you do not have property, you are really not getting any now. The bank will gladly sell you a mortgage that you can not repay if interest rates normalize.
Third, by eliminating any capital gains exemptions on principal properties…. Even the Tories had limited capital gains exemptions on securities to 500K. Why should there be a preferential treatment accorded to homeowners who lever 20-1. All I get is a lousy 5K a year to put into a TFSA…
Rp1
please do not group an entire country into your comment about Vancouver. There are plenty of places “the young” can move if they want their first home to be a detached property with land.
Also, our banks are very conservative and will not lend to risky applicants – isn’t this why our economy is in so much better shape than the US?
I find renter comments running on a loop, a broken record of justifying why renting is better, why Vancouver housing will collapse, etc. etc.
It is what it is, deal with it and get on with your lives.
There’s a reason why that quaint community on the other side of the tunnel is called “Ladner”…
Ergo, I don’t think Peter will have “too” much trouble sorting his progeny out with WestSideShacks of their own…
Two parting ‘shots’…
1. Don’t be surprised if “Fusty’s” traffic patterns show increased volume/urgency….
[G&M/ROB] – Real estate industry, Competition Bureau lock horns again[!]
“The Competition Bureau is picking a fresh fight with the real estate industry, this time over how crucial market data is being kept away from consumers by the country’s largest real estate board.”…
http://tinyurl.com/3fez8m6
2. ‘Nemesis’ is about to ‘gird his loins’ and retreat into the lonely confines of the FortressOfSolitude’s Writers’Garret [with ample libations, of course]… With any luck, by Sunday (or so), VREAA’s digital pipeline will be stuffed with the FinalDraft of, “The Great Conflagration ‘O Hospital Hill & OtherOkiTales ‘O ‘SpontaneousCombustion’!”… Here’s your TeaserTrailer, DearReaders:
“It’s out of control & it’s comin’ your way!”…
http://tinyurl.com/yfac2av
Rusty…you are an idiot…but that’s ok.
I am sure you would argue that it’s my parents fault for raising me and my siblings in a city that I could not afford to buy into…their home is now worth twenty times what they paid for it, and I am not a millionaire…until they die anyways…
I left Vancouver in January and I think it was the smartest thing I ever did. I now live in a place that isn’t congested, pays very well for every job (minimum wage in this town is $14.50/hour) and I don’t have to witness the destruction of the city I grew up in.
When I was a kid, we used to go to Stanley Park twice a week and we would have the whole park to ourselves pretty well…now, good luck finding a parking spot on any given day. I finally realized that I wasted all those years dreaming of having what I had during my childhood. You can keep your “World class city” because it sure ain’t as good as it used to be.
And BTW, it’s 24 and sunny where I live, how’s the weather down there?
T,
your glass is half empty.
@T
I completely agree with you. Rusty is an idiot who thinks what he says is true (e.g. Vancouver is same as high price city. Vancouver is different from Japan. Vancouver has no speculators. They all buy for living. If people move, they are not patriots or money is too important for them…..) and he thinks all others say is false. He don’t know he really looks stupid.
Terry,
Thanks for the agreement…It blows my mind that anyone would bring up an anti-patriot argument regarding locals who decide to leave unless of course they are actually leaving the country. I moved North, but am still in BC…It was really hard for me to leave my family, all of who live in the lower mainland. But, I am getting to see more of my country and I am simply amazed at the size of our province. I really think that every Canandian should get the opportunity to get out of their hometown and see some of the other truely great places in Canada.
I was born in Victoria BC I bought a condo in false creek in 2001 for 275, I sold it for 735 in 2010, with mortgage as a dual citizen I moved to Orlando Fl. The cost of living is way, way, way less. You can get a palace for 300k with a pool. we have better weather more entertainment and cool cities to visit like Miami beach and Tampa, Daytona beach etc.The only thing vancouver has over us is, less driving, a better view, and less crime. Sometimes I miss the rain at night and how easy it was to get around van. but I would never go back. Vancouver is bland, boring and the people were rude, unfriendly and dull.And Plus the people here look cleaner and less wore out for some reason( I cant put my finger on why). I notice here in Florida, they also have more manners. Vancouver is a weird place