“I have $32k in a Canadian bond fund. We have combined $53k in RRSPs. We squirrel away $3200/month into savings each month – $1200 to an RRSP and $2000 into a TFSA. RRSP and TFSAs are all in a growth-oriented mutual fund. The TFSA and bond money is meant for a future down payment. Our dream is to one day have a small house on the East Side with 20% down without stretching ourselves too thin. When will we actually be able to buy this house? Who knows, but prices have to come down a lot.
My financial adviser tells me that my wife and I are “way ahead of the curve” when it comes to our financial futures and that we’ve learned lessons that people in their 60s are only learning now. That’s nice to hear but is no comfort to us when one of my peers sells his Richmond home and can now buy a house in Coquitlam and live mortgage-free with his stay-at-home wife and child. Or when another friend buys a nice little house in North Van and can drive to work in Vancouver in 25 minutes.
It’s hard not to feel like a chump sometimes living in somebody’s basement. I can’t bring myself to gamble on real-estate and watch people around me seemingly cash in on it. At the same time interest rates are kept abysmally low and the return on my down-payment money investments is peanuts.”
- anecdote from Vancouver quoted by Garth Turner at greaterfool.ca 16 Sep 2011
Most Recent Comments:
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- Real Estate Tsunami on Chat Thread
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- Real Estate Tsunami on Chat Thread
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- 02. Profiting from the Boom (441)
- 03. Changed my Life (103)
- 04. Changed my Career (38)
- 05. Where do Buyers get the money? (958)
- 06. Held my Nose and Leapt (96)
- 07. Avoiding Vancouver (375)
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- 19. BlastRadiusPostCards (17)
- 20. The Limitless Demand Argument For Ongoing Market Strength (70)
- 21. Vancouver RE-Verse [Found Poems] (8)
- 22. RE References In Popular Culture (41)
- 23. Jumping The Shark (1)
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Blogroll
- 01 Vancouver Condo Info
- 02 AmericaCanada [retired, no archive]
- 03 Housing Analysis
- 04 RealEstateTalks BC
- 05 Vancouver RE and then some
- 06 Whispers from the Village on the Edge of the Rainforest
- 07 Greater Fool
- 08 Canada Bubble
- 09 Rob Chipman's blog
- 10 YatterMatters
- 11 condohype [retired; archives available]
- 12 vancouver (un)real estate
- 13 Agent Will's Stats [retired]
- 14 Landlord Rescue
- 15 The Economic Analyst
- 16 Canadian Housing Price Charts
- 17 Hoodsurf [retired Jun 2011]
- 18 World Housing Bubble
- 19 Vancouver Price Drop
- 20 North American Economics
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Latest Anecdotes:
- Chat Thread
- Taking A Break
- “My best guess: this property is now an ‘investment hold’ and will be built ‘when prices recover’. Good luck on that!”
- Man Loses $745,000 Vancouver Condo Deposit
- Graphic – Degrees of Housing Overvaluation in Canada
- The Rare Individual With A Negative Ownership Premium
- Advice Regarding Renting In Vancouver, Please – “Unfortunately, the Vancouver rental stock is absolutely atrocious. It just seems like every landlord is looking for someone to pay 100% of their mortgage on a crappy place through rental income.”
- “I just visited Manhattan for a week, and happened to snap some real estate ads on both the Upper West and Upper East sides of the island. Compare to Vancouver. It simply doesn’t compute.”
- Ben Rabidoux In Vancouver Next Week
- “The mortgage company told me they were calling in my 40-year, 0-down mortgage. I have paid nearly sixty thousand dollars towards it, but, nearly five years in, I have yet to touch the principal.”
- ‘Vancouver City Hall: Housing Report Card 2012′; Plus Revised Version
- “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.”
- Greater Vancouver Home Builders’ Association Annual First-Time Buyer Seminar Attendance Plummets
- Mom and Pop Get It Wrong In All Markets, Time And Again
- The average British Columbian homeowner is not going to pay off their mortgage by the time they retire.
- “He’s sold all his properties except his current one, which is now for sale. He explained that the market’s currently in crash mode, worst that he’s ever seen.”
- “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.”
- Sturdy, With Views – “Calling Froogle Scott!… Is Dr. Scott ‘In The House’?” [Not In This One, Certainly]
- “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.”
- “Interprovincial migration is not saying good things about BC’s economy.”
- Vancouver RE: Not As Expensive Provided You Don’t Think – “It’s clear that our perception of affordability has been coloured by living on a continent where housing is unusually inexpensive.”
- More Undisclosed RE Industry Insiders Publicized As Clients – “In 1995, Allan and Karin Hoegg were mortgage-free. But no more. Today their Vancouver home is a valuable source of income as they plan for full retirement.”
- Rumor that some OV units will be reduced by 20%.
- 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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- Chat Thread wp.me/pcq1o-5vD 3 weeks ago
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Maybe someone can explain how Consumption has come to be seen as good for our economy, and Saving is seen as a bad, selfish thing. Apart from buying up commodities and storing in a hole in the ground, most ways of saving should result in some kind of investment into the economy (either directly into the market, indirectly as capital for the banks to invest, etc).
I don’t think anyone is saying that saving is bad. the guy fails to comment that while he doesn’t see the returns that some of his friends see, he also doesn’t have any of the risks. In march 09, you could have put your money in the bank or you could put your money into the market. Saving would have been the prudent thing to do, but putting it into the market would net you 100% return. At the same time, you could also lose it all in a week. It’s all risk versus return.
Again, there is absolutely no rocket science about this. If you sat on the sidelines and have bet that way, then you should stay patient and wait for the drop. If it drops 50% then you will come out way ahead of these current owners. If it doesn’t, then you can play your cards accordingly. Simple as that, no need to complicate it. I don’t think that the current homeowners should gloat about how much money they had made, there is a reason why you never hear Buffet gloating, he understands the risks.
Most owners and buyers don’t see the risk the way you do.
The majority genuinely believe that Vancouver RE is essentially a one-way bet. This guy’s friends incorrectly underestimated their risk, and they were rewarded for their ignorance.
you’re not a chump. You’re conservative and gun-shy. Unfortunately, in Vancouver that means you’re a renter not an owner. Unless you come out of your shell you’ll be renting long past the time when your peers have purchased their housing and have acquired equity far greater than your savings.
If the definition of a renter is someone who makes monthly payments for a while and ends up owning nothing at all, then in a few years’ time many people who “bought” houses will learn to their chagrin that they were only renters after all.
You sound typically like 90% of financial advisors in Vancouver during the dot.com bubble. Most of them had to move back to Hogtown for their own safety.