“In that moment, the money didn’t matter. Only the condo mattered. Now, all the money I have, goes towards paying the loan. I live for the loan.”

Elize Robinson gazes around her condo with a sad smile on her face, wondering what might have been. As the sun streams in through the large skylights in the sloping roof, it is easy to see why she fell in love with the unit. But things did not work out the way she planned. She bought the condo for $380,000 in Mar 2010 with the aid of a huge bank loan. She realizes now that she made a mistake in buying at the top of the market.

“I lost my common sense in that period,” she says. “I was not thinking about the money. It was really a lot of money, I now understand, but in that moment, the money didn’t matter. Only the condo mattered.” It soon became apparent that she was going to struggle with the loan repayments. So instead of moving into her dream condo herself, she rented it out.

At the same time, Vancouver’s housing market collapsed in spectacular fashion. Prices have fallen by more than 45% in just under three years, well and truly bursting the bubble. Now Elize’s apartment is worth less than half of what she bought it for and the rent she receives does not even cover half of the loan repayments.

She blames herself, but is also angry at the banks who made credit so easily available. “They had analysts and economists in their staff. They should more carefully analyze the situation and the people to whom they are giving the loans.”

British Columbia law does not allow Elize to walk away from the loan. Now out of work and expecting her first child, she is worried about the future.

“All the money I have got goes towards paying the loan. I live for the loan,” she says. “Even the social benefits I get I have to give away to pay the loan.” Elize’s is a familiar story, echoed around the country.

Bob Dubonsky, assistant professor at the Sauder school of business, says that Vancouver’s property market was more over-inflated than those elsewhere. “The bubble was so huge. There was so much money pouring in,” he explains. “People borrowed a lot of money to buy a lot of real estate – – 2007-2010 were crazy years.”

Whether or not another boom follows this bust, one thing is for sure. Many people like Elize Robinson fear they will be living with the consequences of the “crazy years” of 2007-2010 for years to come.

The above anecdote from Vancouver’s future was produced by barely tweaking the article ‘Living with Latvia’s burst bubble’, by Shanaz Musafer, BBC News, 12 Apr 2010. One tweak: Latvia’s market fell 60% in 3 years, we anticipate Vancouver’s bust will initially be less severe. For those who don’t believe it will happen here, note that the first halves of such future anecdotes are already being written in Vancouver. -vreaa

[UPDATE 27 Jul 2012: The photo originally illustrating this post has been removed, at the e-mail request of the lady in the photo. – ed.]

13 responses to ““In that moment, the money didn’t matter. Only the condo mattered. Now, all the money I have, goes towards paying the loan. I live for the loan.”

  1. Something is off here. It says she bought in March 2010 and then talk about the market collapsing since then.

  2. Never mind, read the description of the anecdote. My bad.

  3. Rob the happy renter

    it’s a myth that you can’t walk away from your house in Canada, after walking away the next step is to file for bankrupcy!

    Easy as 1-2-3

  4. roxsane lenec

    are you talking about March (last month)a fallen market? could you have used birth cntrol @ least? the figures in this one are incorrect.
    [roxsane -> please re-read the last section: This is a ‘future’ anecdote, extrapolating what has happened to people in other bubble markets to our own. -vreaa]

  5. Nice story, it’s going to be hard doing business and living life around all of the people who are likely to lose everything when this all plays out in Vancouver. I know it has to happen like it has everywhere else in the world but I’m not really looking forward to the human suffering.

  6. Orwellian or not – the fury and the ferocity of denial is truly astounding. We are riddled with the revolving adolescent studipidity we cling to as a society, thinking it precociously “cute.”

    Then again, all that blind faith nose-holding leap into the unknown abyss (of cascading debt) is only the mirror image of all our so-called “betters” (be they governmental, corporate or institutional) – how can mere mortal individuals be wiser?

    After three long years of watching the show south of the border, though we find it fascinating entertainment…we learn nothing.
    It’s just – “reality tv.”

    Vancouver may as well be waiting for its very own special version of the California earthquake. Anxiety on one side, hedonistic oblivion on the other. Damned shame.
    When I lived there in 1994-95, it had a demure charm, and although the highlife sheikist lifestyle was evident, it was easy to ignore.
    Harder to ignore the holocaust to come…

  7. Identical articleand photo but in Latvia and different names at
    [Mike: thanks for the comment. If you read the whole post, you’ll see that the Latvia article is referenced in the postscript and that the whole intention of the piece was to transpose a bubble popping elsewhere onto Vancouver circa 2013-2015 -vreaa.]

  8. As much as I want to believe this article, this article is a fake, Vancouver is a huge bubble, but it has yet to pop. The average price in Vancouver for a single detached house is 1,000,000 dollars.

    This article does not have any accurate facts except for the fact that Canada is a recourse nation.

    I repeat Vancouver is still at the crest of its market, there was never a 3 year crash.

    [reread the article, especially the postscript -vreaa]

  9. I’ve been hearing this future prediction for 6 years now.

    [Yeah, bubbles can keep going longer than you expect… until they don’t. -vreaa]

  10. I think it is possible. Why not? House in my area still in its bubble price (Peak!!!!!). It is really possible to collapse any weeks from now. I won’t buy any property in this days. Just wait to see, the huge billions loan resets are coming.

  11. People are such fools. Even if you disagree and think that prices will stay at current crazy levels, it still makes economic sense to sell your house and invest proceeds/rent. The rental yield tells you everything you need to know. The answer is so simple yet people ignore it…

  12. I love how all these greedy fools blame the banks for giving them money to chase their get-rich-quick schemes. Oh, it’s all the banks fault. They should have known I’m an idiot.

    I’m glad B.C. law doesn’t let these parasites walk from their loans. These parasites have kept us hard-working savers out of buying a home for 10 whole years!!! These parasites have driven up the cost of housing that the rest of us had to bare. And those that walk away from the loans caused the financial collapse that cost tens of millions of jobs.

    Only when all the parasites are dead, can the productive people live.

  13. Pingback: IHB News 4-17-2010 | Irvine Housing Blog

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