“For ten years I felt it was amoral that people would make more money speculating on houses than working hard.”

We strongly share this poster’s concerns about the social effects of a housing bubble, in particular, the way in which easy money perverts the work ethos. -vreaa

http://mildcolonialboy.files.wordpress.com/2008/10/800px-the_way_to_grow_poor_the_way_to_grow_rich_-_currier__ives_1875.jpg

painted turtle at vancouvercondo.info 5 Apr 2010 10:37 am [Thanks to VHB for the link to the illustration] –

“I would be excited by a real estate burst in Vancouver. Why? I am not excited to see people lose their money or their homes, I feel sad for them. I am not sure I would buy a home if prices crashed even 40% (for several reasons). I am excited because for ten years I felt it was amoral that people would make more money speculating on houses than working hard. Speculators were making home prices more and more unaffordable, meaning working people had to go deeper and deeper into debt. The impact of this moral shift could be felt everywhere. Students did not value education any more, overextended families were going through traumatic experiences, people were losing sleep over buying a home, the streets were full of people who could not resist taking equity our of their home to buy expensive cars, investment was becoming a central topic at parties, etc. Gambling had replaced sweat and intelligence. I felt like I was living in a giant casino. The resentment against speculators was mounting, and I have heard it turned into very racist views. This whole mess was wearing down the human capital of this city. When one goes for one’s citizenship ceremony, one is reminded that what makes a valuable citizen of Canada is not owning a $1 million house, but volunteering for your community. Where has that spirit gone lately? Believing in economic fundamentals is not the same as a sense of entitlement. It is just a belief that there is nothing new under the Sun, that economics go through cycles and will always do so. There is also nothing new under the Sun went it comes to greed or herd mentality. Usury was forbidden by religions at times in the past… maybe there is a reason why.”

5 responses to ““For ten years I felt it was amoral that people would make more money speculating on houses than working hard.”

  1. This has been going on a lot longer than 10 years. The only difference is that a majority of households own property, so being frozen out is particularly acute. If you’ve been saving money and waiting to buy with minimal risk it’s like they ripped the ladder up.

    In my case my wife and I saved over 20% of pretax income for years, preparing to start a family. We could never put down more than 10-20%. SFH prices went up by more than we made year after year. We now have enough savings to live for 5 years with no income at all, yet it is loose change in the property market. Never going to buy.

    The central bank now sees fit to erode our savings by setting interest rates below the rate of inflation. Get some guy who can barely service his debts to buy another plasma TV. Good times! Your only hope to beat inflation is by paying fees to the financial industrial complex – another ponzi scheme with non-stop BS. “Invest now” at P/E=22! They can stuff it.

    I will not soon forget this. It is very clear that this country has nothing to offer me. It has gone completely beyond stupid. They’re now stealing from me to prop it up, so don’t expect any help later! We’re 30 years old and scaling back. We’re going to work less, pay nothing in taxes, and spend more time with family. If costs go up we’ll cut back. If opportunities appear we’ll move. I have no idea who is going to pay for all these retirees. It won’t be me.

    The problem is there’s no incentive to work more. Nobody is going to triple my income, and extreme risk is a no-no for families, so we’re out of the game. Meanwhile the important things in life could easily pass us by. I realized years ago that my most valuable commodity was time, and with kids my life is now moving at warp speed. I can never do enough. It’s time to knuckle down, take care of priorities, and go long.

  2. Good for you RP. I agree 100%.

    What really bothers me is the way we have focused so much on short term, easy money instead of building a long term sustainable society. Sure you can make money flipping housing or short selling stocks but you don’t add anything to the real economy. Yet that has been where all the emphasis seems to have been.

    I am glad to hear from a 30 something who has their head screwed on correctly. So many that I meet have known nothing but a rising Re market for the past decade. They have left traditional jobs in industry or education to pursue the easy money of Real estate. Such a waste. Now they get an education that will last a lifetime.

  3. RP – I am in the same boat as you – my wife and I (me 30 and she 27) are being punished as savers so all the fools who bought houses in this country will vote for Harper in the next election. No one cares about legitimate savings anymore. It’s all about the next get rich quick scheme. I hope they all lose their shirts.

  4. Pingback: “My wife and I saved over 20% of pretax income for years, preparing to start a family. We could never put down more than 10-20%. SFH prices went up by more than we made year after year.” « Vancouver Real Estate Anecdote Archive

  5. Amen, rp. My husband and I are a couple years older than you and not quite as wealthy, but we share the same ethic.

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