Just three or four short days ago ‘anonymous’, the poster now known as ‘The Poster Formerly Known As Anonymous’ (‘TPFKAA’), started treating us to anecdotes in the VREAA comment sections. We’ve already headlined one of their composite anecdotes [Spot The Speculators #22; 23 Dec 2010], and will headline others in the near future. And there will be even more to follow, we hope.
Here’s TPFKAA’s own story, edited and compiled from various posts, 22 to 24 Dec 2010, at VREAA:
“I have been a blog reader for the past few weeks – it has been eye-opening. I have since been collecting my own anecdotes. I have “vectored” in to this site to share my experiences, as limited as they are. I felt it my duty to share with others as they have generously shared – I owe a debt of enlightenment to the many who bothered to post real stories from their lives, in keeping with the spirit of this forum. I (have gone) a little evangelical on the postings volume, I must admit, and for this I apologise. I had a lot of anecdotes built up over the past month that I felt would be of interest. [No need for apologies, the anecdotes are appreciated. -ed.]
Like many people I have been trying to save with my wife for the past four years, with the end goal of buying a house – (we actually wanted a small condo or townhome but have her father living with us, and with two kids, there are very few that have enough bedrooms. One thing I don’t understand is why virtually no one builds four bedroom apartments or townhomes – they are surely more economical than SFHs?) We were despairing of ever being able to afford anything large enough. I was looking as far out as Mission (we work in Vancouver, rent in Burnaby). One day I just got sick of every minute of every day thinking about how I could spend less and save up fast enough to get in to the market, and did a little search on Google for “average Vancouver house price” to see what information I could uncover to get a glimpse at future house prices. I came across Vancouver Condo info’s rollercoaster, saw the charts, and in rapid succession hit VREAA and Garth Turner’s blog. Read every Froogle Scott episode (loved the writing and the detail) – and months of archived blogs and anecdotes. The wife says I am obsessed.
I think it’s fair to say my world shifted on its axis. Since then, I have been asking subtle questions of anyone I encounter (it’s surprisingly easy in Vancouver, in 2010, to ask highly personal questions like how much did you spend on your house! amazing…) and my findings astonished me. The one question that had been puzzling me was the HAM or Hot Asian Money hypothesis, that had all my family members believing prices will NEVER come down in Van. So I got my realtor landlord into a discussion and worked my way to asking how these investors get the money. He volunteered all of the above. I should mention that together with his brother, he also manages 19 properties for investor clients, taking care of renting them out, maintenance etc. (his brother does the legwork, gets a small rent based commission, and together they share the commission from the eventual sale of these investor properties.) All these investor clients are living in Van, and own one or more investment properties in addition to primary residence. Most of them bought in around ten years ago, however, so they truly are long term investors.
I will keep asking around for more information. As far as I see it, there are two possible outcomes to this real estate conundrum:
1) Chinese and other foreign investors keep coming with enough cash and overseas income to buy up all Westside and work their way east with tear-down and rebuilds, with no need of local jobs. Local wage earners unlucky enough to be left behind in the property market rent or leave. That would include us. A skeleton crew of baristas, mechanics, retail staff, Ferrari and Lamborghini salespeople and check out clerks live in rent assisted social housing islands in a sea of uber wealthy, world’s-elite-with-a-penchant-for-temperate rainforest-climate-owned mansions. What happens to the local economy next I am not smart enough to figure out.
2) Many of the overseas investors are overleveraged in a speculatory bubble, both in their home markets (esp. China) and here. Rising interest rates and falling prices sap their will to buy higher. Depending on events in China, prices either decline calamitously or grind down slowly as per Garth Turner until they rest somewhere slightly above where fundamentals would put them, so about 4.2 price to income ratio (Vancouver seems to always have been above fundamentals. (grow op income perhaps?)
People continue to buy in preference to renting because of the homeowner premium. (as a six year renter since I arrived in this god-forsaken city I am prepared to pay slightly over to not have to deal with the landlords here – words cannot describe how cheap they are and how much it annoys me to have to spend money and time on making repairs because they never show up and I worry that they will raise rent every time I make them fulfill their legal obligations and actually spend the money on repairing dripping taps, leaks, broken stairs, etc.)
So that’s my take. I will keep collecting information to help the blogosphere decide where this will end.
As a new-ish Vancouverite who has lived in Italy, Spain, UK, Finland, Japan, even Albania albeit briefly, and traveled in 28 more countries, I want to tell something to all of you: read my lips very carefully:
THIS – IS – NOT – THE – BEST – PLACE – ON – EARTH.
It’s just like every other place, ok in some respects, sucky in others, great in a few. Get your heads out of your asses. It’s almost embarrassing telling people from other parts of Canada where I live, as I inevitably get tarred with the same brush of arrogance.
In my case, housing in Vancouver wasn’t affordable 4 years ago, and it isn’t affordable now. If it were affordable I’d be mortgaged to the hilt just like everyone else, nervously biting my bull hooves hoping that all these have-nots posting away into the night are wrong. I didn’t try to outsmart the market. I came within 10,000 more saved dollars of pathetic little downpayment to springing for a 1950s bungalow on an easement in Surrey backing onto railway land that if BC rail decided it needed, would cut the corner of the house off. Well, the 10,000 wasn’t as big an obstacle as the wife’s reluctance towards the place.”