“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.”

“I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.
I grew up in what is today ground zero for Vancouver’s speculative mania, Point Grey. My dad was a professor at UBC, and my mom a part-time teacher. In real terms, my income is comparable to that of my parents when they bought our house in the 70s. And my expenses are lower: we have one child (so far) instead of four, one car instead of two, etc. And yet the modest house I grew up in would be utterly out of reach for me today.
The question is, what has changed between a mere two generations? Yes, the economy has grown, and there is more wealth in the world today. But presumably one’s income reflects this growth, so that real estate should be no less affordable than it ever was.
Locals shrug off this uncomfortable question with the standard wisdom: We have water! And mountains! To which I reply: Vancouver has always had water and mountains. The city’s attractive geography is widely known and has long been priced in to the market. It’s a valid reason for local prices to start out higher than in certain other places, but not for them to go up any faster over time. Some improvements have been made to the city itself, but the fact is Vancouver is pretty much the same place it was 30 years ago.
What does seem to have changed is our collective mindset. We are living in a dream where Vancouver is the new global hotspot, debt and real estate are the path to riches, and where history doesn’t matter, because “it’s different here”.
I believe Vancouver is in for a grim wake-up call. By any number of fundamental metrics, local real estate appears overvalued by 60-70%. If there were a way to short the market, I would wager a significant portion of my net worth on this bet.
The ridiculous cost of housing aside, after living in six cities in four countries, and traveling to countless other locales, I can say with some confidence that Vancouver is not as uniquely wonderful a place as its residents claim it to be.
None of my three siblings—all hard-working professionals—has chosen to settle in their hometown. My wife and I only moved back because my dad fell ill. We currently rent an eastside bungalow, and intend to relocate internationally next year. I plan to move my business with us. The place we’re going to has its own challenges, but in our experience the overall quality of life is superior.”

- El Ninja at VREAA 15 Oct 2011 3:28pm

79 responses to ““I’d like to share my story as someone who was born and raised in Vancouver, lived abroad for ten years, returned, and is now planning to leave permanently.”

  1. My thoughts exactly. After living around the world and seeing most of the rest – Vancouver is not really that special. I am from here but the whole “Best place on Earth” has gone to people’s heads and they are now delusional. We are a large provincial town with no significant international business, poor opportunities for most professionals and a place with very high real estate prices. I would really like to leave too but as you know – it’s not always that easy to pack up and go (and for me it’s easier than most).

    The city can not continue to function in the long term (20 years plus) with the current real estate prices so there will have to be some reversion to the mean . . .

  2. Great anecdote. You also had a nice mention in one of the largest papers in Quebec:

    http://lapresseaffaires.cyberpresse.ca/economie/immobilier/201110/15/01-4457609-fievre-immobiliere-quitter-vancouver.php?utm_categorieinterne=trafficdrivers&utm_contenuinterne=lapresseaffaires_LA5_nouvelles_98718_accueil_POS7

    From Google translate:

    “One of the most active sites is VREAA for Vancouver Real Estate Anecdote Archive (Archive of stories about real estate in Vancouver). This forum lists the anecdotes reported in the media or elsewhere, to build a collection that illustrates the euphoria that swept the city.”

    Nicely done!

    • Thanks, Ben, for letting us know about the La Presse piece.
      We had chatted with Nicolas Bérubé sometime ago, and posted a request here from him asking to speak with people avoiding Vancouver because of RE prices [23 Jun 2011].
      As we noted at the time “Nicolas has lived in LA since 2006. He watched the US housing market implode first hand, and he is, like many of us, now watching the Vancouver RE market with fascination.”

      Bérubé’s article is worth the read; even in the translated form for those who don’t read French. We will headline the anecdotes.

      • I contacted Nicolas for that piece in my non-stop campaign of leaving no stone unturned, and it looks like I’m quoted in it. I don’t know how seriously Google Translate butchers the intended meaning, but I’d have to say some of the quotes are a bit off. For example, according to Google’s translation of Nicolas’s translation of my original meaning, I say people “cannot live intelligently in this city.”

        Well of course they can, by renting. (Crazy non-housing cost of living aside, of course.) Even if I hadn’t gotten lucky and bought at the right time and gotten smart and sold at the right time, I would not be totally unhappy paying what we pay for our current rental house.

        Also, according to the Google translation, I have a wife AND a girlfriend, both of whom I seem to live with. I can asure you that that is not the case. :-)

        Obviously the non-translated version will read better. Many props to Nicolas for so enthusiastically digging through the realtor/MSM bullshit.

        One last thing: I hang out here and VCI, etc. *not* because I want desperately to buy once again. I simply don’t miss the financial and time allocation headaches of owning.

        When the correction hits 50%, I might consider it. That would mean I could buy a Langley craphole for $250,000 instead of half a million. Or a White Rock craphole for $300,000 instead of $600,000. Or a west-end tear-down for a million instead of two. None of that sounds particualarly appealing to me.

      • Gord -> “according to the Google translation, I have a wife AND a girlfriend, both of whom I seem to live with”

        It’s a French thing.

        hahaha
        I’m sure it’s simply an effect of Google translate (similar effects regarding the way I was quoted).

      • Basement Suite PhD

        “When the correction hits 50%, I might consider it. That would mean I could buy a Langley craphole for $250,000 instead of half a million. Or a White Rock craphole for $300,000 instead of $600,000. Or a west-end tear-down for a million instead of two. None of that sounds particualarly appealing to me.”

        That was extremely well put, and echoes my sentiments exactly.

      • Je me souviens! Best dressed gals. Best music. Best ‘indigenous’ writing (well, North ‘ o Cali & East ‘o Oki). Kudos, Ed!

        PS – I so wonder where Pierrette et Celine are now…. AC from LaGuardia to Mirabel (’88)?!… sigh.

  3. I hear people claiming Vancouver isn’t unique yet post on blogs like these because, in part, 1) they actually, deep down, want to buy land in Vancouver but are priced out and 2) they are annoyed others are so arrogant when it comes to expounding Vancouver and 3) blame 2 for 1.

    Also a bit of peer pressure for some. Those who bought 10 years ago can afford to be arrogant and it sucks going to dinner parties in SFHs if you cannot offer the same in return but could have if you bought when prices were lower.

    • jesse->
      We’d agree that many come to blogs like VREAA because they have an interest in owning RE; many bears are prospective buyers. If they truly were completely priced out for life, or if they truly were committed lifelong renters, why would they bother following this stuff?

      Your first paragraph serves as an exercise in logic.
      Your central implication is that mostly people will post “Vancouver isn’t the best place on earth” largely out of sour grapes. You’re implying that they’re largely making this observation out of self-serving motivation.
      Perhaps.
      At the same time the “arrogance” of seeing this place as “unique”/different did fuel the speculative mania, and is in a large part responsible for driving prices up (locals convincing themselves that price levels are warranted and can only go up).
      So it is fair for prospective buyers on the sideline to point out the hollowness of the ‘BPOE’ claims, along with all the other false claims driving prices.
      Sure, there may be a self-serving angle to their argument; but that doesn’t mean that their argument is incorrect.

      It is fair for sensibly, prudent, bearish prospective buyers who have been greatly inconvenienced by this insane speculative mania to harbour considerable anger at the arrogant bubble-heads that have fostered it.

    • Yes, there is an element of sour grapes in all of this. Not unlike that girlfriend/boyfriend you lost and claim to no longer care about? If people really didn’t care about Vancouver, they wouldn’t spend any time hanging around Vancouver RE doom blogs.

    • ” why would they bother following this stuff?”

      Because housing policy that causes land values to appreciate well beyond rental value is a net detriment to all residents, whether owning or renting.

      • True. But the potential detrimental effect on the contented life-long renter is delayed in time, and far less likely to drive individuals to read daily about the RE market.

      • “detrimental effect on the contented life-long renter is delayed in time”

        Yes, but as some of your anecdotes attest, people are finding duration of tenure these days to be rather short. Being a life-long renter shouldn’t necessarily mean having a moving company on speed dial.

      • “Being a life-long renter shouldn’t necessarily mean having a moving company on speed dial.”

        Yes, agreed.

    • I have lived in several cities around the world and traveled on business to many countries, so I think I have a pretty good feel for what Vancouver is and what it isn’t. There have been lots of posts about pros/cons of Vancouver so let’s not revisit that topic today.

      You are right, deep down I would like to buy land in Vancouver because I was born here, all my family and many of my friends are here, so my happiness (in terms of social life) is maximized here. And while renting has its perks, buying a house probably makes sense if one plans to live there 30 years. I wouldn’t say that I am priced out, but just that I don’t think it makes sense to buy at current prices.

      I would not say that I am annoyed at the arrogance at Vancouver cheerleaders. I would say that I’m annoyed that the economy of Vancouver revolves primarily around activities with little social value, namely FIRE. Whereas if I look at other highly liveable cities I have visited (e.g., Bellevue WA, Lexington MA, Bethesda MD, Saratoga CA), they are significantly cheaper than Vancouver and the people I tend to meet there are highly educated, productive members of society.

    • “So it is fair for prospective buyers on the sideline to point out the hollowness of the ‘BPOE’ claims, along with all the other false claims driving prices.
      Sure, there may be a self-serving angle to their argument; but that doesn’t mean that their argument is incorrect.”

      Sure. I’m just reminding readers that the core arguments based on economic/investment analysis, and one’s personal and often emotion-driven motives, aren’t necessarily forecasting the same outcome.

      I get the arguments. I was outside last weekend, and it was a f*&^ing great weekend. Naganna lie.

      • Agree.
        The weekend was wonderful, and when Vancouver has good weather, it really is glorious here. As we’ve always said, we like this city, that’s why we live here.

        Also agree regarding the importance of separating emotional desires and economic analysis. In fact, in certain situations it is important to be able to do the exact opposite of what your emotions are telling you to do (stockmarkets: buy fear and sell euphoria). It almost always pays to have insight into one’s emotional state.

        Vancouver RE market 2011 presents an intriguing dilemma for intelligent bears who like the city. They have to work at understanding whether their calculated assessment of the market (a speculative mania by any measure) isn’t somehow just a product of their desire to own here.
        It’s just as complicated extricating emotions from market analysis when your emotions work in the same direction as your analysis, as it is when they are at odds.

      • Vancouver didn’t have a monopoly on great weather this past weekend!

    • Here are my reasons for hanging out on this blog.

      1) A house is a huge investment and learning different points of view about the market is great.

      2) I need to a bigger place for my growing family, I would prefer to buy over rent and I have a decent down payment. I am only willing to buy if its not financial suicide to do so. I would buy in vancouver if prices were “normal”.

      3) I feel like housing has become a unfair game that I am forced to play. Housing is a necessity and the bubble is making it impossible to have housing be just housing for those of us who need to get into the market at this point. This is why I am leaving vancouver I am not willing to play by the rules that it takes to live in Vancouver.

      4) Watching the impact of the housing bubble in the USA on the financial system and families makes me super mad. I think that the Canadian government will step in and have all sort of programs to help troubled home owners in the future which is really going to be all about helping the banks with my tax money. instead of investing in education, health care, environment the things that count as the public goods the government will end up wasting my money to help irresponsible banks, stupid home owners who got into huge debts. I am mad and I don’t give a crap if the troubled home owners end up on the street because of their gambling. I want my tax money spent on education, health care, environment not morons and banks who spend too much on houses.

      • “…housing has become a unfair game that I am forced to play.”

        Spot on.
        In more typical times we’d not be distracted by it.
        Just one aspect of the misallocation of resources caused by the bubble.

    • Royce McCutcheon

      I fully admit that I would like to buy at some point in the future, but to be frank: with everything I have on my plate right now, I’m relieved that renting – and therefore avoidance of home ownership upkeep responsibilities – is so easy to justify.

      But make no mistake: my tracking of this issue has much more to do with the wider health of this city than anything else. There won’t be much schadenfreude on my part if (when!) prices correct, particularly if they correct so they’re in line with incomes and rents. As people here regularly point out: a huge portion of our economy is related to real estate. I think it’s naïve to think that staying out of this game with your personal finances means you’ve actually stayed out of this game. Everybody’s taxes will go to fixing social costs associated with a correction, one way or another. There is a growing brain drain, most markedly in positions we need staffed. The social costs of unmanageable debt, high unemployment, etc. manifest themselves in crime, poorer health, loss of productivity, etc. My field of work (health research) becomes a luxury if things get bad enough; you won’t see tax dollars or charity runs/walks if people are worrying about making it to next month.

      My point is that when I argue that Vancouver isn’t that special/real estate is in a locally-driven speculative bubble during my day-to-day life (only if someone else brings it up), I’m not doing it because of annoyance or envy. I’m doing it because I’m sometimes leery about how bad things could get (see “Cassandra complex”, definition of). I express frustration because every deluded day when things don’t start correcting represents a step in the wrong direction and a step towards more pain down the line.

    • Well yeah, there’s nothing “unique” about a real estate mania. We may have taken it further than most other places, but its just a matter of degree.

      For locals, from here, its not something that can be avoided. People ask you if you own. Friends and family pressure you. You hear the victory cries of “owners” who often have exaggerated estimates of their real estate fortune, and the whining of indebted fools who no longer have any fun. I’ve tried to ignore all of this but its hard.

  4. “The question is, what has changed between a mere two generations”?

    immigration.
    BC used to accept under 10K immigrations per year pre-1985. So what you’re seeing is the cumulative effect of 25 years of aggressive Canadian recruitment for new citizens. This is 25 years of 4 times the immigration level that you knew when your parents lived in Point Grey.
    Since you won’t ever change the federal government policy on immigration there aren’t many options for change.
    Here’s what can be done.
    Start petitioning city hall for zoning and development changes. Whoever is resposible for approving developments consistently approves them for nearly zero family appropriate units. The City seems at war against the family.
    Also, the whole laneway house idea is a farce. Didn’t the city try to call this a way to densify? What? By adding a 700sqft apartment in your back yard? Zoning should reflect the ability to build a coach home with size = total sqft of both homes = .70 of lot size sqft.
    Once this happens and families are not taken hostage to pay single family home price I think you’ll see prices fall by about 30% or so.
    Get active, start a Facebook page, etc.
    This is all about City Hall and what they’re doing to force families out of Vancouver.

    • Regular readers know I generally agree with this, though I wouldn’t underestimate the complexity involved in rezoning some neighbourhoods. A lot of people don’t want added density. If that’s true then they need to start paying for the privilege, and in some ways they already have by seeing their properties skyrocket in value compared to higher density ones.

      I’m very interested to see the property tax assessments in January, for some may be shocked at how much their tax bills will have increased, and a full 3 years to the next civic elections…

      • @jesse I had a current city councillor knock on my door this weekend asking me to vote for him so I got talking to him about real estate and the issues around that.

        I brought the issue of lack of condo that are 3 bedrooms and he said that city hall is considering allowing condo units that have double doors between them like hotel suites so you can expand the size of your condo if you need the space for a growing family. I guess if that goes through it will be helper condo suites and helper basement suites for the luck buyers.

      • “I guess if that goes through it will be helper condo suites and helper basement suites for the luck buyers.”

        Which I think is an absolute horrible way of increasing density. The degree of aversion to blanket density increases is astounding. I think the chances of Vancouver increasing density in a way concomitant with other “best places to live” cities are very low. But it is still a message that would be good to have in the sphere of debate. None of the three (four?) mainstream parties will take this on because they risk eroding their grassroots or their stated raison d’etre. COPE would probably be the only one who might flinch on this one but I doubt it.

        Hey here’s an idea: start a facebook group or something like that that advocates “lowering land prices to rental equivalence by whatever means necessary”. Ask all candidates for how they would address this issue, and decide which one endorses a strategy that most closely aligns to the stated goal. You might not get what you want but you might get something that points the debate towards the actual problem to be solved. In 3 years’ time with repeated hammering — who knows — maybe it might catch on.

  5. I respectfully disagree that immigration accounts for the massive spike we’ve witnessed in RE, which is really a phenomenon of the past 10–not 25–years. And contrary to popular perception, the rate of growth in immigration to B.C. has actually been falling for decades.

    Similarly, B.C.’s population grew faster in the 60s and 70s than it did in the 2000s. In fact, with the exception of a slump in the mid-80s, our population has grown slower over the past ten years than at any point since WWII.

    (See table under “Demographics” section: http://en.wikipedia.org/wiki/British_Columbia#1970s_and_1980s)

    • How has the population of Vancouver grown over that same time period? There is a lot to be said for the rise of urban living and the preference for being close to amenities. Canada isn’t world-class, but Vancouver is one of the best cities its got.

    • “I respectfully disagree that immigration accounts for the massive spike we’ve witnessed in RE, which is really a phenomenon of the past 10–not 25–years. And contrary to popular perception, the rate of growth in immigration to B.C. has actually been falling for decades. ”

      I mostly agree although immigration is one aspect of hot money. It’s pretty obvious that Vancouver is the recepient of hot money in the form of foreign direct investment in real estate. Some of this hot money is non-Chinese in origin but finds it’s eventual way to Vancouver through Chinese financial connections. Just like Asia is very concerned about the potential disruption caused by hot money inflows so should Vancouver because once the fundamentals can’t support sustained capital inflows, the capital tends to be repatriated or simply “invested” elsewhere.

      I believe Vancouver has already reached the point where fundamentals can not support further capital inflows especially if China’s own property market begins a significant correction. Don’t underestimate the potential ruinous impact of HAM on a relatively small region like Vancouver. This is a very dangerous situation for more local investment money.

  6. El Ninja,
    Don’t confuse BC population growth with Vancouver population growth. I think you’ll find an inverse relationship between BC and Vancouver growth rates.
    If you don’t think immigration is to blame…how is it we’ve added 40,000 new Vancouverites per year with a zero natural birth rate?
    Vancouver city hall only exacerbates the problem by allowing developers to build small, dense high profit housing.

  7. Jesse,
    I am a homeowner who would be happy to give up 1/3 of my home value so more families can afford to live here.
    Don’t underestimate the human response to the issue. Even most homeowners would acknowledege that we have to put families in something other than a box in the sky

    • “Even most homeowners would acknowledege that we have to put families in something other than a box in the sky”

      Perhaps but I doubt they (homeowners in freehold non-strata) understand the consequences of this. My prediction is that it will be “others” who will abdicate (sell) the land for increased density, “others” right now being those located on major streets.

      There are tremendous established forces averting the eyes of rational debate on the civic stage. All candidates, from what I can tell, are not acknowledging the elephant in the room, probably because it’s not resonating with most people with front doors that are accessible from the street, and some parties are vehemently against “central planning” that instigates aggressive rezoning.

  8. “It is fair for sensibly, prudent, bearish prospective buyers who have been greatly inconvenienced by this insane speculative mania to harbour considerable anger at the arrogant bubble-heads that have fostered it.

    Vreaa, anger may be a predictable response but it’s never a productive one. You need to start with city hall.
    I highly recommend you pour some of your vast store of energy into something that might produce a desired outcome. This site isn’t working.

  9. “As of this morning [Oct 16] Active Listings hit 24,768 for the three lower mainland boards. Someone may know different but I can’t remember it being this high”
    Larry at YatterMatters

  10. Formula1 and Hazu Chan,
    Vancouver’s population has grown at an annualized rate of 1.2% over the past decade (using City of Vancouver statistics). Please explain how this translates into double-digit annual price increases.

  11. let’s not get cheeky El Ninja, Vancouver population growth fluctuates between 1.5 and 4% “PER YEAR”, not over the total 10 year period. That’s roughly 15,000/year and 150,000 over the ten year period.
    Not sure where you got 1.2% over a full 10 year period. If that were the case they’d be handing out housing with your Halloween candy.
    Make more sense to you now?
    http://cuer.sauder.ubc.ca/cma/data/Population/population-pctgrowth-vancouver.pdf

  12. Formula1,
    According to Statistics Canada, Vancouver’s population in 2000 was 2,040,832. In 2010, it was 2,391,252. That’s 1.0% growth per year, annualized. So it’s actually lower than the rate I quoted above. And in no year in the past decade has the city’s population grown more than 2.5% over the previous year.

    Here are the data: http://www5.statcan.gc.ca/cansim/a14

  13. El Ninja,
    You’re looking at the entire region, not just Vancouver.
    Can I justify high prices in Mission, Abbotsford, Chilliwack, etc due to population growth and immigration? No, but I can for Vancouver.

  14. Two premises of the anecdote should be challenged:

    1) Vancouver is more or less the city it was 30 years ago, and
    2) “The city’s attractive geography is widely known and has long been priced in to the market.”

    Vancouver, of course, has been subject to rapid immigration, changing the ethnic composition of the city. While growth rates may not be as high as they were in the 60s and 70s, it is perhaps the case that somewhere in the past 25 years Vancouver reached a critical mass and “graduated” to join the other two cosmopolitan cities in Canada.

    I can’t see how people can deny that Vancouver’s profile has risen greatly in the last 30-40 years, both within Canada and internationally. I’m a Torontonian born and bred, and when I was growing up (70s/80s) no one talked or cared about Vancouver – it was regarded as a hick town with an expansion hockey team. Now more and more people know a family member or friend who moved out west for the “outdoor” lifestyle.

    The Hong Kong handover and the economic boom in China, coupled with the enhanced international profile of Vancouver, has resulted in more capital flowing from Asia. Where previously Asians looking to move to Canada would consider Toronto first, now Vancouver is most assuredly the first choice.

    And yes, I think the activity of the last decade or so is undoubtedly a real estate bubble. But this does not negate the notion that Vancouver has changed and that real estate will never be as affordable as it was in the 1970s.

  15. Robert Dudek,
    Respectfully, you missed the point. There’s no doubt that outside perceptions about Vancouver have changed. What I’m suggesting is that the city itself hasn’t really changed. A few more amenities here and there, perhaps, but it’s fundamentally the same place.

  16. Perception has changed and this has in large part changed the city. There is a feedback loop at work here. For Vancouver RE to drop more than a mere correction of the bubble warrants, you would have to change the image of the city. Perhaps you could make it really ugly and start up lots of heavy industrial activity to pollute the air to Upper Silesian levels.

    Short of that, you are “victims” of your own success. You took a beautiful part of the earth and built a city on it. After people started to notice (and that is really the key factor here), real estate values went sky high. That in a nutshell is what has happened.

    • “That in a nutshell is what has happened.”

      You’re using “best place on earth” perception to justify poor investment earnings. If Vancouver were a victim of its own success it would have higher rents. Which it doesn’t.

    • Or, you know, economics and shit

      but let’s not let that get in the way of easy money

  17. Formula1,
    The latest Census data for the city of Vancouver itself (excluding outlying areas) are from 2006. In that year, the city’s population was 578,041 vs. 514,008 in 1996. Annualized, that’s 1.2% growth. The data are even broken down by neighbourhood. Annual population growth in Kitsilano over this period was 1.0%, and in the epicentre of speculative mania–Point Grey–it was a meagre 0.1%.

    Sorry, population growth is not the driving force behind double-digit increases in RE prices.

    Here are the data: http://vancouver.ca/commsvcs/planning/census/2006/index.htm

  18. Why are the Occupy Vancouver people only attacking the top 1% of income earners? In this city the wealth is hardly controlled by those with income.
    Why does someone get to sit on a tax free asset that has gone up by millions of dollars and pay not a dime more? Why is it ok to argue that income taxes go up on the top earners, yet sacreligious to suggest that someone in a mortgage free $3 million home living off CPP/OAS…maybe even collecting GIS, gets a seniors homeowners grant on their west side home,….should have to pay more taxes?

    • Agreed.

      Property taxes here are astonishingly low. I was initially appalled when I learned about the seniors homeowners grants. But now I realize it’s not much different than using a HELOC to pay your property taxes.

  19. Robert Dudek,
    It does feel as though Vancouver has risen on the global stage. But as I pointed out above, the city’s population has grown at just over one percent a year. If our profile has risen so much, why aren’t more people moving here?

    Anecdotally, I’ve found most people abroad don’t know much, if anything, about Vancouver. Those who are familiar with the city have a largely positive impression. But that doesn’t mean they’re going to move here…

  20. If Vancouver were a victim of its own success it would have higher rents. Which it doesn’t.

    Believe me the rents are much higher in Van than in Toronto, for example. I don’t have the stats, but I doubt this was true in 1980.

    • “Believe me the rents are much higher in Van than in Toronto”

      I don’t know where you get your data but that is not my experience at all. Rents I see in Toronto, pound for pound, are higher, as are the salaries for those living in the central core.

      In any case, it’s the rental growth rate that matters to justify higher prices being sustainable. If rents are growing substantially faster than inflation then that can justify lower cap rates but as it stands that simply isn’t the case. Rents may start off high but then subsequently tread water in real terms.

      If someone can show how prevailing rents are increasing at 5% per year I could believe current prices. Otherwise the business case is a hard one to make.

      • PS if one thinks the rent control cap is keeping rents suppressed, sorry, one is out of luck. Endless anecdotes of those renting at market rates moving to other similar locations show little to no increase.

        PPS There are concerning trends with population growth over the past two quarters, namely population growth has dropped by about 30% year-on-year. This is not so good for housing demand, for both renting and owning, in the next couple of years. If low population growth continues for the next few quarters, stresses will increase. Something to watch (the way one watches molasses or cricket test series).

  21. El Ninja,

    I have a positive impression of Berlin, London and Paris, but that certainly doesn’t mean I am considering moving there. But if I’m looking for a place to move to, it certainly doesn’t hurt to have a good international reputation.

    You claim that its rate of growth was higher in the past, but perhaps that is not the key factor. Perhaps it is some “critical mass” of absolute size that is the key (as I stated earlier).

    Let’s briefly compare the development of Vancouver and Toronto. Vancouver’s core is already far more densely populated than any other city in Canada. I think this is partly due to the limited room for expansion that the geography necessitates. Contrast that with the GTA, which can and has developed in three directions virtually without constraint (we even had a brief spurt in developing in the 4th direction in the early 20th century).

    I think that population growth in Vancouver has leveled off because of the lack of space and the high cost of living, In Toronto, if Etobicoke RE gets too pricey, you can move to Mississauga, then onto Brampton etc to build the SFH that families covet so much. Since the jobs in the GTA are not so concentrated in the core, this is workable. But in Vancouver, there are not a lot of places where you can build brand new suburbs and the jobs seem to be more concentrated in the core. The dynamics of Vancouver development are different than other places in Canada.

    • Downtown Vancouver is densely populated because the CoV planned it that way. The density of the city of Vancouver isn’t ‘organic’ like say, London’s which most certainly wasn’t planned. Vancouver’s development is certainly different than the rest of Canada. Somehow real estate has grown meteorically while BC’s GDP growth has underperformed relative to other provinces in Canada in the last 10 years.

  22. El Ninja,

    Population of Vancouver hain 1991 was 472,000, and 2011 is 642,000
    Do you not think adding this amount of people to a small geographic location is going to have an effect on real estate prices?
    Not sure how you can deny that Vancouver is a markedly different city now than 20 years ago, perception and demographics.

  23. From the french article posted above, here is a very interesting quote about the foreign influence on the RE market (translation below):
    “Or, «l’invasion asiatique» semble être largement un phénomène anecdotique: un récent rapport de l’Urban Futures Institute, une firme de recherche de Vancouver, montre que, sur les 55 512 maisons vendues répertoriées en 2010, 195 ont été achetées par des gens en provenance de l’extérieur du Canada. Cela représente 0,4% des acheteurs cette année-là, l’une des plus actives de la décennie pour le volume des ventes, note l’analyste Andrew Ramlo.”

    Translation:
    “But, “asian invasion” seems to be largely an anecdotal phenomenon: a recent report from the Urban Future Institute, a Vancouver based research firm, shows that of the 55 512 houses sold in 2010, 195 were bought by people coming from outside Canada. That represents 0.4% of the total buyers of that year, one of the most active of the past decade for sales volume, notes analyst Andrew Ramlo”

    This confirms what Vreaa and others have said for years: foreign influence on the RE market is just marginal.

  24. Formula1,
    No, I do not think that 1.2% annual population growth explains double-digit annual price increases.

    The city’s population has been growing for decades. And yet prices did not rise as quickly as they have recently. In fact, there were periods when prices declined substantially, even as the population rose.

    There are other, more important, factors at work.

    • “I do not think that 1.2% annual population growth explains double-digit annual price increases.”

      It can never explain it because locals need to afford local properties. The concept that high immigration causes prices to increase only applies when the effect is transitory and eventually corrects. If the inflow is quiescent, the market leads this trend by building to accept future in-migration and Vancouver has had this effect occurring for a while now. Further there is an endgame, namely that a fully-densified area must rely on income growth, not denser structures, to justify higher prices. Immigration doesn’t necessarily help with income growth.

      The bellweather to watch is condo prices, IMO. If revenues don’t start adjusting upwards the stress will only get bigger and micro-cracks are already starting to show, if you look in the right places.

  25. Jesse,
    regarding immigration…
    if you keep gaining weight sooner or later you need a new pair of trousers. All the strategies you tried in the past (i.e. undoing the top button) are only a temporary solution – your waist is now at critical mass and spilling over your belt loop. Now here’s the question…are you going to admit that you’ve gained 30% body weight since high school, or are you going to keep arguing that the trousers shrunk in the wash

    • If you’re referring to an endgame where the entire city is as dense as, say, Hong Kong or Manhattan, well, I guess that could be the the case but look at current density compared to even 70 years ago — most of the city hasn’t increased density much over that time. There is a long way to go.

      Increased density doesn’t help existing condo owners any. They have no way to improve their land except through operating income gains, which to date haven’t materialized.

      In fairness, I think what you’re describing is a “critical point” in land use in Vancouver, where there simply is no land left on which to develop without buying existing developed land. That was always the case, actually; vacant lots or those with a single occupant (a venerable westside granny) are sold on the open market for a fair bit of coin.

      We shall see!

  26. Hey All,

    I come and check you guys out for a few reasons, and for those of you who might want to know, I own my own house and I live in Toronto.

    1 – I have a secret crush on VREAA
    2 – I hear the same kind of crap regarding the real estate market in Toronto, while not as stratospheric as the Vancouver market, it’s also priced way beyond fundamentals
    3 – I like the stories, similar to the ones I hear here. Really that’s what real estate’s about houses for people.
    4 – I’m watching the train wreck.

    I have no intention of selling my house because I need a place to live but I can’t help but see how crazy prices have gotten. It’s nice to have company.

    To quote my father “When two professionals working full time can’t afford a house…prices must go down”

    • Speaking only as an intellectual and a ‘Dude’ who’s never met his Blogosphere ‘Ed’, Rachelle…. I’m quite certain you’re on the right track. CrushWorthy wise. Go for it. Just don’t email lingerie shot’s that include sufficient ‘facial’ for a ‘Reco’ algo to connect the dots and ‘out’ you. Some clients might not understand. OldFlames, however, would probably rejoice at the opportunity for one last vicarious ‘peep’.

      Forgive me, I’ve been writing non-stop for the past 48HRS – VREAA will know why tomorrow morning). Good night, All.

    • times, they are a changing.
      Think evolution Rachelle. Most Canadian cities are light years behind Vancouver. Vancouver? No different than most older, desirable cities in Europe.
      Can two professionals working full time afford houses in Oslo, Zurich, Geneva, Milan, Paris, Rome, Bern, Milan, Moscow, etc.?

      And yes, we know you’re superior. Tell us again how smart you are and how stupid all of your clients are.

      • Apologize to the lady please. That’s not very nice.

      • Nothing ruins a good blog faster than nasty comments. If you can’t type something civil, please don’t post it.

      • A bit confused here. In a thread a few days ago you said that with a bit of an employment upgrade people could afford Vancouver, but now you say that we’re just like these European cities where working professionals can’t afford homes.

      • Yes, a lot like those cities, except no good jobs, no interesting culture, and no attractive buildings.

      • IamOuttaHere

        Dude, get a grip. How can you compare Vancouver to Paris? Nothing wrong with a little hometown pride but trying to portray Vancouver as a world class city is taking it a bit too far. Those other cities actually do have economic activities that add value and create well paying jobs. Vancouver’s biggest industry is construction (a.k.a building condos) and the second biggest is the marijuana industry. No head offices, no manufacturing, no real services like banking and IT, no R&D.

        Back to those big and expensive world class cities. Yes, working professionals can afford to buy houses in those major cities. Unlike Vancouver, a lot of big cities have a whole range of housing to cater to different income levels. While London has some very expensive neighbourhoods like Knightsbridge and Chelsea, they also have very cheap neighbourhoods like Elephant & Castle where one can buy a place on a clerical salary. They even have ghettos like Brixton with dirt cheap housing. There is something for everyone in London.

        Closer to Home we can look at Toronto. Toronto has very exclusive neighbourhoods like Rosedale, Forest Hill, Bridle Path. These are places where you find $10million mansions. That will cater to the tastes of the Conrad Blacks and TSX300 CEOs. On the east end of Toronto you will find neighbourhoods like Malvern where a detached SFH can be had for under $150k. Off course, it is not exactly the most desirable neighbourhood. Sweet lower 6 figure deals on SFH can also be had around Eglinton West going all the way to Weston. An old condo in the notorious Jane/Finch neighbourhood can be had for around $50k.

        Even though Manhattan might be expensive, New York also has neighbourhoods where one can buy a house for $150k. With their transit system one could even live in New Jersey and commute to downtown Manhattan on a daily basis.

        Problem with Vancouver’s real estate is that it does not present options for different income levels. I have no problem with a Shaughnessy estate selling for $2Million. Problem is when neighbourhoods that are supposed to be working class (blue collar) list homes in the $500k region. Why should I spend $500k on a Surrey home? Why should it take a corporate lawyer’s/doctor’s salary to comfortably afford a house in Whalley? Where will the secretary or the security guard afford? Even flung out places like Mission and Langley cost an arm and a leg? Why should I pay $450 for a house in Abbotsford?

      • ‘diablo’ is the same multihandled-poster who, yesterday, as ‘Formula1′ posted:
        “I am a homeowner who would be happy to give up 1/3 of my home value so more families can afford to live here.”

        Thin veneer of civility; deep rivers of bitterness and discontent.

        Keep it civil; Avoid ad hominem; Use one handle.
        Please.

  27. not sure WTF you’re talking about vreaa; diablo is not my handle.

    back to business.

    iamouttahere,
    Toronto SFH prices?
    East starts at 249K so where did you get the idea one could be had for 150K. You need to shed your expectations by two-thirds. Avg east Toronto home is 301K according to the TREB

    Karen,
    please refer to Rachelle posts for rude comments. Consistently calling others stupid and inept including the people that employ her.
    For that matter I find vreaa one of the rudest SOBs here. Standing in judgement of others is not pleasant; especially when you live in a glass house.

    • diablo is not your handle?:
      - same url
      - same style of writing/syntax
      - same position on the markets
      - same criticism re other posters
      - diablo stopped posting from this url; you then start posting from this url; no time overlap in your posts and diablo’s (from this url)

      Okay, we’ll allow that maybe you aren’t the same poster.
      But we’d put the chances at, say, below 2%.
      Perhaps you are suffering some form of fugue state?

      Use one handle, please.

  28. “Standing in judgement of others is not pleasant”

    There are more pleasant things to do, granted.
    But when people are dancing around yelling “2+2=7″, what else can you do?
    Is it nasty to point out that they are clearly wrong?

  29. Dear Formula One…

    I think you completely misunderstand me. I don’t blame or feel superior to these poor people who think that all they have to do is buy real estate to make a fortune. There is an entire industry of people who’s primary purpose it is to trick, bamboozle and misrepresent real estate as a sure fire road to riches regardless of the facts.

    1. Real Estate does go down and up
    2. Every Investment has risk
    3. Being a landlord is a business and like any other it can be difficult and complex.
    4. Currently the math doesn’t add up for rental properties in a majority of cases leaving the owners completely vulnerable to declines in the market.

    It’s awful and it’s wrong. for this to be happening to people. Almost every day I get phone calls from distressed owners. I also work for a number of them. I do the best I can. I help them out and give them the resources they need.

    Last weekend for instance I was bringing garbage that a tenant left behind in a unit (a brand new townhouse in which the floors needed replacing because of damages and a complete paint job.) to the dump in my damn Toyota Corolla, trying to get keys from the previous tenant and so on. The owner is in Ottawa, she has no one here and no money. I did not get paid for my or my husband’s efforts. This is what I see and deal with.

    It would require me to be completely devoid of ethics to say that this kind of scenario is a good plan yet I see it every day. The damages caused by people who have no compassion for the pain and heartbreak that these owners go through because they have been misinformed about the risks inherent in leasing out a house or apartment is considerable. The stress and anguish they go through is unbelievable. These are just decent people trying to get ahead.

    What you suggest would be that I say “Hey look at that nice cloud” when a speeding train is quickly bearing down on them. I’m not going to do that.

    I might also add that I have an awful lot of respect for professional landlords, I’ve been trained by them, have coffee with them, and work for them. Most of them are quite wealthy. Most of them are still looking for and buying good investments. Not very often because there’s not much to make money off of in this market.

  30. “iamouttahere,
    Toronto SFH prices?
    East starts at 249K so where did you get the idea one could be had for 150K. You need to shed your expectations by two-thirds. Avg east Toronto home is 301K according to the TREB”

    I last searched for Toronto homes around 3 years ago and you are right that the cheapest SFH might no longer be going for 150k. However, I am within the same pricing ballpark and a such a slight oversight should not impeach my overall argument that other cities offer a vast array of housing options to cater for everyone.

    Anyway, here is a fixer upper 4 bedroom townhouse in Toronto going for just $54,000
    http://www.realtor.ca/propertyDetails.aspx?propertyId=11127145&PidKey=-1082281725

    Another 4 bedroom townhouse going for $70,000
    http://www.realtor.ca/propertyDetails.aspx?propertyId=11080601&PidKey=232333058

    I hope you are not restricting your definition of Toronto to areas south of steeles, west of Victoria Park, and east of Kipling. I am also factoring in housing options available in the GTA. Especially when you factor in the GO train. It will almost be ridiculous to have a debate on Vancouver housing without including Burnaby and even Langley.

    A 3 bedroom semi detached house in Oshawa can be had for just $129,000
    http://www.realtor.ca/propertyDetails.aspx?propertyId=11222266&PidKey=-953826433

    A fully detached Brampton house can be had for just $229,000 before negotiations. This is not Vancouver where people bid up the price of a shack.
    http://www.realtor.ca/propertyDetails.aspx?propertyId=11015891&PidKey=-475125101

    Any working professional can buy a home in the GTA, even on a single salary. Yet Toronto housing is inflated and due for a correction. The same can not be said for Vancouver, even if you were to drive to Langley.

  31. Funny thing is that I’ve rented a few of those townhouses on John Garland a few years ago. People used to buy them and rent to students at Humber but then the condo board disallowed that. First of all the maintenance fees in that complex are over $700 per month, there is a special assessment that will last 10 years. Notice that the second ad doesn’t list the maintenance fee. The first says $400 but the extra assessment is on top of that.

    This complex is also rather dangerous, and even I would think twice about living there. I don’t say that lightly I’d say that it’s the second most dangerous area in the city after Jane & Finch.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s