Interview by Rex Murphy with Steve Zimbalatti from Vancouver.
RM: You are in Vancouver, that’s they tell us one of the highest places to live.
SZ: Well, that’s correct and I am actually a… for about a month ago I became a first time homebuyer.
RM: In Vancouver.
SZ: In Vancouver.
RM: So you found that you had a gold mine somewhere?
SZ: Well it was really interesting Rex. I came from one side of the coin where I was a renter and I had money in the bank and quite a bit of freedom actually. It was very liberating the way I was living and a lot of my friends, I think, were perhaps envious of the fact that I wasn’t tied down by debt.
RM: Yeah, how did you get in that situation or is that just the way that you are. You said I don’t want debt and I want to have some margin to move around without some huge sack of obligation on me?
SZ: No actually I sort of got into that situation on the… well I had to learn my lessons the hard way. As a student in college I got one of those credit cards that you are allowed to sign up for in the foyer and I thought wow this is great. I’m a grown up now, I can take on some debt.
SM: Yeah. Two cases of beer, not one.
SZ: And I just couldn’t manage it. I maxed it out almost right away. I couldn’t really manage the debt… it gave me a poor credit rating. I did not pay the bills on time and I just thought well this is enough of this. I am never taking on debt again.
SZ: So from that point forward I was just living pay cheque to pay cheque, able to squirrel a little bit away every time and built up a little nest egg but I was thinking here in Vancouver I am watching all this wealth go by in this housing market I have been living for about 15 years now and just seeing prices triple or quadruple in some cases in that time and just thought wow I need to get on this wealth train. So my partner and I decided that it was time to buy and you know, if we are going to be here in Vancouver working here in Vancouver, might as well own something.
RM: I am not going to be too particular but did you buy recently or last year. When did you buy?
SZ: We bought last month.
RM: Okay that is very fresh.
SZ: Very fresh. Yeah we just thought it was an astronomical amount of money that we are paying for this little box in a building in the sky and we just thought wow this is crazy because here are, we’re grown up, we watched our parents pay $12,000 maybe $20,000 for a house and all of a sudden we are paying 350,000 for a like I say a tiny box in the sky and just the amount of wealth I think in this entire situation is …
RM: By the way to get a however time it might be but from what I understand and it is only second hand to get anything in the city of Vancouver at that rate you got to look.
SZ: Oh, absolutely. You have to settle, you have to you know, might not be able to live in the part of town that you want to live in and you know, but we are very very happy actually with what we’ve got and we think it was, you know, a spot where we can make a good home.
RM: So now, let’s right to the question of the day. So you do have a mortgage and as most of the kind of informed people that we had here this afternoon tell us that mortgage is a separate thing in the consideration of debt say from credit card or from … So do you feel now any less free than you did before?
SZ: Absolutely. We find it very confining. You know, we never used to sort of care about the goings on in government or the world of finance or anything now we’re watching the news every day to see what going to happen to the interest rate or do we lock in now. You know we got almost free money in a way. When we tell people that we’re got a mortgage rate of 1.95% interest, my parents like their jaws drop when they used to pay 18% or 20% for service their mortgage and now it is just like its unbelievable to them. You know I think wealth in a lot of ways these days has been transferred sort of to real estate and it seems to be, you know, by design if you ask me. If you look at say wealth and where most of the money was 25-30 years ago, most of it was in the stock and bond market. Now for Canadian wealth it is in real estate.
RM: I am going to wind it up. Very last point despite the fact that it is changing your view of things and your reading those damn financial papers and listening to television, more or less though you got this under control. It is not a worry in that sense is it?
SZ: It is not a worry in the sense that we don’t have it under control but we do find it, you know, I don’t want to say crushing because like I say we are quite happy where we are but we do find it is less liberating, we might not be able to take the vacations we want which was great in the past. Yeah it is just, you know, it is a whole new ball of wax.
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Type of Anecdote
- 01. He Said, She Said (248)
- 02. Profiting from the Boom (446)
- 03. Changed my Life (106)
- 04. Changed my Career (39)
- 05. Where do Buyers get the money? (986)
- 06. Held my Nose and Leapt (97)
- 07. Avoiding Vancouver (377)
- 08. Overextended Buyers (1,197)
- 09. Delaying Buying (316)
- 10. Demoralized Renters? (367)
- 11. Regrets about Investing in RE (417)
- 12. Effects of Development (276)
- 13. 2010 Olympics Related (74)
- 14. Social Effects of the Boom (1,262)
- 15. Misallocation of Resources (964)
- 16. Missed The Boat? (236)
- 17. The Froogle Scott Chronicles (27)
- 18. Spot The Speculator (171)
- 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 (44)
- 23. Jumping The Shark (1)
- 24. Policies On Housing (11)
- 25. Epigrams For The Bubble (1)
- 26. Premature Calls Of "Bottom" (3)
- 27. Seller Panic (3)
- 28. Erroneous Causation Theories For Falling Prices (7)
- 29. Bubblespeak (1)
- Uncategorized (177)
- In Case You Thought Our Bubble Was Due To Special Local Factors…
- Interest Rates Held Far Lower Than Necessary Cause Speculative Bubbles
- ‘A decade ago 40% of all purchasers in the States were first-timers. Today is it 27%. In Canada the number exceeds 50%, and is rising.’
- ‘Canada’s moment as an economic standout is over.’
- ‘The Extra Breadwinner In The Family’ – ‘Does your house make more than you?’
- ‘Extreme Speculation’ – “The problem is that the diversion of resources into investments that are only justified by the stream of new money and artificially low interest rates will destroy wealth at the same time as it is boosting activity.”
- “It won’t last. It just prepares the way for the bust. It forces out real businesses. And it drives out people who find themselves financially unable to live here any longer.”
- ‘Vancouver Affordable Housing Agency’ Created By The City
- Enter Inflation, Stage Right
- Average House Price In Canada Rose 7.1% YOY
- Vancouver School Trustees Threaten Risk Of Property Price Drops In Debate Concerning Rights Of Transgender High School Student
- House Painting
- Wage To House Price Ratio Is A Changin’
- No, Not Karl Marx; That Other Mark, Mark Carney – “Just as any revolution eats its children, unchecked market fundamentalism can devour the social capital essential for the long-term dynamism of capitalism itself.”
- The New Yorker – Vancouver RE As A ‘Hedge'; “Zombie Neighbourhoods”; “The rest of us better get used to being tenants”
- “On my block, there are three empty million-dollar houses. Property values are skyrocketing. It is a disaster for people who want to live in Vancouver.” – Charles Hou, retired social studies teacher
- Vancouverites have ten times the personal debt of people in the ‘debt capital of Britain’.
- ‘How badly would you be hurt in a housing market price correction?’ [The Globe and Mail]
- A Veterinarian’s Dilemma – “Living in a 300-square-foot closet, moving to northern B.C. or renting for life.”
- Vanc RE, No change – “..really mildish weather that’s very livable..”
- “No problemo. 69 per cent of the condo tower is pretty stable.”
- Still Dead
- BC Premier: “I think the market’s good, it’s a buyers market. I want to make sure I get in before prices start to rise.”
- “You’ll have to pry my cell-phone from my cold, dead hand….” [Off-topic, but irresistible]
- Mayor Robertson Selling His House
- “Nothing Wrong Here!”
- “We spoke to a friend of ours yesterday. Even though she has purchased a house, she wants to keep (and rent out) the condo she’s living in, because she thinks prices will only go up.”
- Families With Children Leave Vancouver – “We bought a townhouse in Port Moody in 2006, sold it in 2011 and bought a house. We couldn’t have done that in Vancouver. Absolutely not.”
- The Economist on Land Taxes – “Taxes on immovable property are the most growth-friendly of all major taxes.”
- “It’s kinda funny that 3 unrelated Irish blokes all said that this mess in Vancouver/Canada RE is unfolding EXACTLY like the mess did in Ireland, one headline at a time.”
- “I was really fortunate with how things worked out for me in real estate. I definitely took chances when I bought a few presale condos to flip back in 2004, but I was adamant at the time that there was room to grow for Vancouver.”
- Making Sense Of It All
- “I have been contacted by two of my realtor friends in the past week both proclaiming that the market is turning and that this is a good time to buy.”
- Trump on Vancouver – “Your people, they go to New York, they go all over the world, and they speak so highly.”
- ‘Canadians obsessed with real estate, poll suggests’ – “Just as many people reported talking about real estate on a regular basis as they did about hockey.”
- ‘Doomed’? – “Home prices in Canada are now double what they were in the 1970s in real terms. Historically, over the very long term, real home prices tend to be flat.”
- “The bank encouraged her to take the equity in her home to purchase another home. She bought a 2nd home at the peak.”
- “Let’s remember how we got here” – Looser and Looser CMHC Limits
- Don’t Worry, I’m Sure Somebody Will Sort This All Out – “Policymakers now know better and will be a lot more proactive in preventing a collapse.”
- “Things have changed, we are not doing that type of mortgage. We are not interested at all.”
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