“Even I can’t ‘afford’ a house. What am I supposed to do? Go buy a shack for $1.2M that I know is probably 4x overvalued, only to be the last sucker in before the big crash?”

“I sold my business a few years ago and retired with a nest egg of a couple million dollars. But even I can’t “afford” a house. What am I supposed to do?… Go buy a shack for $1.2M that I know is probably 4x overvalued, only to be the last sucker in before the big crash? I’m not going to take that chance so I’m forced to rent a little modest place while I wait for the madness to end. And, by the way, if you think $2M = rich in Vancouver, you are sadly mistaken. With today’s artificially low interest rates (that are keeping the real estate bubble alive), I can barely generate enough of an income to support my wife and kids.”
- anonymous commenting in ‘The Province’ (13 Nov 2011 11:14pm)

24 responses to ““Even I can’t ‘afford’ a house. What am I supposed to do? Go buy a shack for $1.2M that I know is probably 4x overvalued, only to be the last sucker in before the big crash?”

  1. Geez, dude you have a $2M you are rich, even in Vancouver. 99% of people here live on way less than that.

  2. is a house a home? what’s the difference?

  3. another renter who things Vancouver owes him a westside detached home because he thinks he made it big.
    Sold his business and the market has gone up and up and the available stock of detached houses has been reduced by 5K due to densification.
    This guy will rent until the day he dies.

  4. I agree that $2M is not “rich” in Vancouver.
    He would probably be better off if he moved to another city.

    • no kidding – 2M in the bank, and seemingly nothing keeping him in Vancouver now that the business is sold, why is he still here?

      Also – if the income from 2M is not enough to live off of, then do what everyone else does – get a job.

      • I think his point is that the interest income on his 2 million is so low that it can barely support his family. Even on a “high interest” account, he would get only ~ $2500/month before taxes. That is unprecedented.

      • I understand the point he is trying to make – it is low, it would be about 60K per year in interest if all in high interest/GIC’s.

        However, my point still stands – if you are not making enough money from your investments to live off of (for whatever reason), then get a job. Or, move to a city where 2500/month is enough to live on.

  5. I have a suggestion for you. Take $500k and invest in the US. That way you will get a green card under the eb-5 investor category. That leaves you with $1.5M. San Diego has the best weather in NA. For $1M you can get yourself a decent pad in San Diego’s exclusive Rancho Santa Fe neighborhood. I am talking a neighbourhood that usually ranks as one of the top 3 most expensive postal codes in America. Housing there usually consists of at least an acre. Of your remaining $500k you can save 250k as cash and use the change for buying toys like Porsche Carerras and jet skiis. Problem solved.

    • Great idea except the ridiculous toys. We didn’t get to $2M net worth by throwing away money. That’s exactly why he’s not buying in Vancouver. I totally understand his position – it’s virtually impossible to retire early without much financial risk since returns are 2% max. With the current equity market volatility and a shorter investment time horizon, investing in dividend paying stocks is also a crap shoot. The highest value / lowest risk proposition is to move to the US.

    • nobody you know

      Or he could slum in in La Jolla and be a beach bum. I do miss San Diego sometimes.

  6. this guy wants a mansion on the west side, free and clear, and might be keeping the $2m in the bank, or nothing!

    “And, by the way, if you think $2M = rich in Vancouver, you are sadly mistaken.” give youself and headshake.

    • You ass, I know people in Calgary with $2M in cash and can’t retire in the their 50″s. You think $2M goes farther in the GVRD when it costs $1M for a tear down. Give your head a shake after you pull it out of your arshole!

  7. you guys are no fun. let’s stop obsessing about what prices should be. mr. market don’t scare if you say boo and he’s gonna do what he’s gonna do. don’t matter what any of us think or say – it won’t change the way is gonna be. so stop hissy fitting, moping about. just cue Doris and call it a Day – (omg, i think i hurt myself on that one. can’t be mine. must have followed me home)

    it’s friday and we could use a bit of juvenile fun. no one will give a return pass? don’t you play hockey somewhere? do it myself then. a home is what you make of your family life, your community. a house is a dwelling, a structure, an …

  8. “I know people in Calgary with $2M in cash and can’t retire in the their 50″s. ”
    $2m In cash and cant retire? must be eating caviar for breakfast. Another headshake.
    and btw, it’s friday but someone ‘s sure angry today.

    • you don’t need to eat caviar for breakfast…depending on the lifestyle you want to have in retirement, 2M in capital may not go very far. With rates low for safety it would only provide 50-60K per year in interest income.

      Odds are good that if you had the income to save 2M in cash by your 50′s, you aren’t going to be happy retiring on 60K per year.

    • yay! actually gots to fix da stuff above -
      … don’t matter what any of us think or say
      it won’t change the way its gonna play (much better)
      so stop hissy fittin, mopin about
      just cue Doris and call it a Day
      “it’s Friday but someone’s sure angry today” (fred. A for effort but needs work)
      yes, you must practice letting freak out (cathartic)

    • This from the guy who feeds his family of four on $600 per month! You are just so full of b.s. Next thing you’ll be saying is that you spend only $1000 per year on gasoline!

  9. https://www.landcor.com/market/reports/Q3_11_Residential_Sales_Summary.pdf

    “Greater Vancouver now enjoys dubious global recognition as one of the most
    expensive cities in the world. Depending on one’s economic footing, what’s a
    lovely ‘world-class’ watering hole to the favoured some, could easily be the
    housing equivalent of the La Brea tar pits to others.

    As home prices rise, affordability shrinks, personal debt loads rise and
    siren situations arise where deceptively thin skins of cool, soothing equity
    camouflage deeply sticky mortgages, the financial burden assumed on the
    Pollyanna assumption that prices will keep rising and the new homeowners’
    ‘paper wealth’ will steadily increases.

    Conversely, when interest rates jump and/or the buttressing foreign investment
    weakens or suddenly pulls out of Greater Van, the bubble might not pop, but
    it will sag mightily. Bad enough to go under water; even worse to suck in a
    lungful of bitumen”

  10. I wish I had this guy’s problems.

  11. Odds are good that if you had the income to save 2M in cash by your 50′s, you aren’t going to be happy retiring on 60K per year.

    Well, if true, it says much more about him than it does about the rest of the world.

  12. “…that I know is probably 4x overvalued, only to be the last sucker in before the big crash?”

    That’s the fear that keeps me out. The day I finally buy, if the market hasn’t tanked first, the market will tank right afterwards, because me buying will be the ultimate capitulation.

    More and more I am thinking I can go rent a nicer place though, so at least I don’t have to retire in a basement ;).

  13. Why does everyone stay in Vancouver if it’s so damn expensive? I too sold my company, no I did not make near $2M, I did ok in my books and I am seriously considering putting some money into other real estate investments NOT in Vancouver. I also looked for a decent house for 3 years and have given up. I am not willing to spend all my money on a tear down. Just crappy value all around. Vancouver is nice, yes, but it also rains 8 months of the year and costs an arm and leg to do it. Central California, a little in from the coast, up in the foot-hills on a few acres… now that sounds decent.

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