Software Engineer – “What is ultimately driving me out is the price of real estate. Establishing a family home is a higher priority than zip lining in Whistler. Adios BC.”

“Living in Vancouver definitely comes at a price. The salaries for my line of work (software engineering) are definitely 30% higher down in the US and quite possibly 5-10% higher in ON/QC. Given that, I’m not complaining about my salary: what is ultimately driving me out of BC in the next year or two is the price of real estate. When you are working crazy hard and the pay cheque is inadequate to purchase a 1-bedroom $600k nice apartment in Downtown Vancouver then I’m better off in ON buying a 3-bedroom $400k apartment in Downtown Toronto by the water. Sure the view isn’t as nice, and it will get terribly cold and terribly hot, but I never fancied myself the die hard nature lover or weather junkie. For a young family as in my case, establishing a family home is a higher priority than zip lining in Whistler. If majority of Canada’s population can bear the cold, so can I. Hey if I’m making more money and saving more, I can always come on vacation 😉 Ultimately it is a shame for BC as a lot of talented engineers and other professionals I know are leaving for better opportunities else in the country. What good is the weather and view if you can’t afford a decent lifestyle because everything is exorbitantly over priced. My 2cents. Adios BC.”
Newman at VREAA 12 Aug 2011 10:10am

Sure, we all know Newman could rent, but perhaps that doesn’t equate to “establishing a family home” for him and his young family. – vreaa

48 responses to “Software Engineer – “What is ultimately driving me out is the price of real estate. Establishing a family home is a higher priority than zip lining in Whistler. Adios BC.”

  1. You can buy a house or townhouse for $600k not too far from DT; you can afford a little closer in if you don’t mind renting out the basement. What’s really going on here.

    • Yes. Only if he stretched himself a bit more and on the East Side, right? What’s with his losing attitude? Others are taking out huge mortgages with income from Tim Hortons. And this software engineer is too pussy to invest in The Best Place on Earth™. Who does he think he is?

      • The dude and his family can live close to Vancouver for $600K. He has decided to move for lifestyle reasons. I’m uber-bearish on Vancouver RE but I’ll call it as I see it: if someone wants to own, even today, they can without taking on a lifetime of servitude and risk. Bad investment? Yes. Compromise on his particular lifestyle compared to if he could have bought 5 years ago? Check. Not my point.

      • Your original comment doesn’t make sense now. The dude did not say that he can not buy anything here. He is only saying that what he would get is inadequate and comparably worse than what he would get in Toronto (and I add that it is also worse than anywhere else in North America).
        That’s all that is “really going on here”: Work hard and you will get paid less in Vancouver and your money will get you shitty housing. I can see how that alone is a reason to move for some.

      • ” will get you shitty housing”

        I’m being obstinate today. Quality housing is his own perception. He can get perfectly functional housing in a safe neighbourhood that is considered to be less desirable but in terms of utility allows him to live in Vancouver area. That does not mean he can’t be happy by spending $600K on housing right now but his lifestyle means he needs to move to fulfill his desired lifestyle. My point is that it’s a lifestyle choice and he’s not really “priced out”.

      • Of course he is not priced out. I don’t think he said it anywhere. And we have discussed many times here that the problem in Vancouver is not really about the ability to afford. An unemployed person can “afford” a $750k home through a private lender. I can afford more with a traditional lender. So what? That does not make it a good investment and the quality I would get would be really bad when compared to any other place in North America. I think that he is making the same point with the addition that he would also make more money in Toronto.

  2. I agree that real estate prices in Vancouver are driving people out. But I think 400k for a 3 bedroom on the water in downtown Toronto is a little optimistic. I have good friends who bought on Queens Quay about 5 years ago. And it was still 350K for a pretty small 1 bed + den. A better value than you’ll find on Vancouver’s waterfront, but let’s not overplay our hand here.

  3. Strange as it is, this post actually made me remember why I live in Vancouver. The better cold/heat/humidity seen in Toronto would drive me nuts and I am a bit of a nature/outdoors junkie. Last week I went hiking, mountain biking at whistler and spent some time at the beach. The week before that I went camping and this weekend I’m going to an outdoor music festival in Squamish.

    And I get to do all of this from my rented appartment, saving money for when the eventual crash.

  4. Sure, there are quite possibly other factors at play for Newman…
    But, as we have discussed in other similar cases, he is likely comparing the lifestyle (including accommodation) his job gets him here, to what it gets him elsewhere.
    What kind of “house or townhouse for $600k not too far from DT” could Newman get in Vancouver?

    • Quite a few I’m sure as long as you don’t mind possibly large upcoming repair bills in 5 years or sketchy neighbors. But it’s ok since you are living in a city that’s likely beyond world class. 🙂

      As a software engineer myself, I have to say Newman forgot something that might be just as important – opportunities. Aside from maybe cellphone games industry, the IT industry in BC is fairly limited and opportunities to work on latest and greatest projects, using new technology, and constantly improving yourself and your skills are also extremely limited. Thus staying in BC also entails taking on risks that your skills will be getting obsolete at a faster rate than elsewhere and less employable as more and more IT offices get moved to east, US, or across the ocean.

      • There is also EA in Burnaby…
        But I agree, ON has a lot more opportunities.

      • ha ha bullshit, i’m a software engineer, there are NO opportunities in Ontario other than RIM (which is dying). Vancouver is the center of the software industry in Canada (as it is).

      • Sure. Do a search on Monster and you will see the difference. 6 to 9 times as many positions in Toronto than in Vancouver. Then there is Ottawa that has comparable amount of software related jobs to Vancouver with half of the population.

      • Jeff Murdock

        “ha ha bullshit, i’m a software engineer, there are NO opportunities in Ontario other than RIM (which is dying).”

        Google’s only software development office in Canada is in Waterloo, ON.

      • Actually Google has a clandestine office in Vancouver now too.

      • evilfred, blah blah….

        Simple facts do not support your theory that “Vancouver is the center of the software industry in Canada”.

      • it’s cute when software ‘engineers’ call themselves engineers.

        sorry, i didn’t see your iron ring

      • there are lots of real engineers in software. with that said, some of us non engineers dislike being named as such 😉

    • A quick check shows 230 townhouse/rowhouse properties with 3+br for sale within 15km of downtown Vancouver, most in Richmond and Edmonds. None on the west side, almost none within the City of Vancouver.

      I’m not disagreeing with this person’s economics but the subtext here is a) he needs to own for stability and b) he has certain expectations about lifestyle, including living close to downtown.

      Looking at how few family-oriented properties (i.e. something with a small yard, 3 bedroom) are available for for sale below $600K close to the city centre was an interesting exercise. Wowzas.

      • You missed the comparison of a 3 bedroom in TO for $400K. $600K > $400K.

      • Comparison is a different issue. My point is that if this guy wants to stay in Vancouver and buy a family home, he can comfortably do so. He has imposed investment and lifestyle constraints but they are self-imposed and not necessities.

        Don’t get me wrong; I think the guy has every right to have those constraints and the trade-offs resulting from these constraints are clear to him.

      • Economically, $200K is a pretty big difference between able-to-afford and out-of-reach, as is both commute time and expense. If you’re able to bike to work, the savings are substantial when compared to driving or busing to and from Richmond.

        $400K is on the high side of our similar price range.$600K is too much. He says “the pay cheque is inadequate to purchase a 1-bedroom $600k nice apartment” so I’m assuming he can’t afford $600K. Plus, commuting is an additional expense.

      • OK so if his budget is $400K, what can he be reasonably expected to afford, even with, say, a 30% drop in prices? For condos there are many choices in the core though few 3BR; if that doesn’t float his boat for family reasons he’s either renting or moving to the ‘burbs.

        If his budget is $600K, a 30% drop will get him something within Vancouver proper. But imagine what a 30% drop would get him in Toronto 😯

  5. “Adios! BC”…

    Ah, but not [apparently] in the HillBillyRiviera – where the community of Penticton has, to ‘great fanfare’ rolled out a NewImprovedWebsite [and it’s so atrocious I won’t waste your collective time with a link – however, smirk…].

    Tagline?

    “A Place To Stay. Forever.”

    Evidently, the ‘city fathers’ are in compensatory mode following their recent failure to convince a majority of HillBillies that Penitentiaries are ‘good business’.

    Note to Ed: New Taxonomy/Category? “What Were They Thinking!?”

    • Parting, off topic, ‘shot’… While Polish shopkeepers were leaping from flame engulfed hovels in central London last week it’s nice to know that the ThinBlueLine’s maching orders were so ‘neatly’ prioritized by their political masters…

      [G&M] – British police foiled attacks on 2012 Olympics site

      “British police revealed Tuesday that they sent officers to protect major shopping centers and the 2012 Olympics sites after intercepting phone and social network messages saying they were targets for rioters. Assistant Commissioner Lynne Owens of London’s Metropolitan Police told a committee of lawmakers that police sent extra officers to London’s Oxford Circus, two malls and the Olympic Park on Aug. 8… and further added, “We were able to secure all those places and indeed there was no damage at any of them,” she said, according to London’s Evening Standard newspaper.”…

      http://tinyurl.com/3kco7ya

      Well. There it is. If you should ever find yourself experiencing a ‘bit ‘o bother’ in Blighty, head for a shopping mall – or better yet, an OlympicVenue.

  6. 600K for a 1 bedroom? Maybe in the Olympic Village!

    600K will get you a 2 bedroom in almost any building in Yaletown, and an even larger 2 bedroom in Crosstown.

    But still, it’s good to finally see acceptance that “renting” and “establishing a family home” may not actually be the same thing after all.

  7. That’s a pretty typical story. I’ve had pretty much the exact same situation myself. Electrical Engineer, offered 15% more to work in Toronto. Ultimately though I have family in Vancouver and 15% + the difference in real estate wasn’t really enough to convince me to leave. I was tempted to move to Fresno, CA at one point though. Same thing 15% higher salary but could buy a 2500 ft^2 house for ~300k. That was tempting. Now if only I could convince my friends and family to move.

    One good thing about living in Vancouver that people always seem to forget is that it’s actually pretty cheap to rent. It doesn’t take much looking to find a place in the $600k range with a Rent-Income ratio in the high 20’s/low 30’s. If I was Newman I’d just rent.

    Ex: http://vancouver.en.craigslist.ca/rch/apa/2499027552.html

    1-yr old 3BR + office townhouse. 40 min walk+skytrain to DT. Rent: $1700. Units on either side are listed at $608k and $629k.

    (I know there are places with even more exaggerated rent-income ratios, but usually those places have at least some lot value associated with them.)

    • As was recently mentioned on VCI, these places are typically only 1 year lease so longer-term tenure is not guaranteed. Part of the problem facing families is ensuring a stable location, not having to become nomads/gypsies. Longer-term leases are possible but aren’t that common.

      http://vancouvercondo.info/2011/08/blame-it-on-the-fruit-stand.html/comment-page-2#comment-130962

      • I’ve always rented newer homes, so that could be why I haven’t had that experience. That being said, I think the problem is a little overstated. Landlords want to sign 1-year leases because it’s the norm and they don’t want to be bound down, and who can blame them if they can easily find someone else to fill the vacancy. However, that doesn’t mean they’re going to kick you out at the end of the lease. It’s a risk, but it’s not a risk I lose any sleep over at night. Especially since as mentioned in the comments you linked “we personally found no shortage of available places”. Worst case you move down the block and keep the kids in the same catchment area.

      • Yeah signing a lease without some additional history of the landlord or tenant can backfire. Moving with kids is a pain in the butt and I understand why people want to avoid it.

        There are lots of creative things people can do to secure longer-term tenure such as probationary periods with lease options. Even less creative: actually ask the landlord what their plans are for the property over the next few years and ask how long they’ve held it. If they have held the property for a while it’s a better bet they won’t sell, but it’s also more likely they could be convinced to sign a lease after you prove yourself to be an upstanding tenant.

        Or another option: apply to cooperatives, though that’s not for everyone.

  8. You can earn $110/hr. as a garden variety contract engineer in Calgary, have the mountains nearby to play among, and buy a nice home in an established neighborhood for far less than $600k. Taxes are lower and the weather is better (in the winter anyway) than in Toronto. Also, leaving Vancouver is easy if you can visit anytime like you can from Calgary. Why the angst?

    • No doubt for sure. I meet a new person/family weekly who’s bailed on Vancouver because they’ve finally figured out how much easier home ownership, commuting, wealth generation, career and recreational opportunities are in Cowtown. I figured it out myself 8 years ago along with many people who are now friends and it’s so quick and easy to fly back to see family (many of whom are also leaving to lock in once in a life-time tax-free capital gains!)

  9. “…a 1-bedroom $600k nice apartment in Downtown Vancouver”

    we get the point without the exaggeration – it’s expensive here.
    You can get yourself a 4 br 4 bath half duplex at 1500 sqft in east Vancouver for under 700K. But it sounds like you don’t want to compromise, that is, you have a home in mind for yourself and what is available here doesn’t fit. All the best to you and your family

    • His budget is $400K.

    • The question is not whether Vancouver is expensive or not..everybody knows that it is not only expensive, it is delirious.

      The real question is…is it worth it??, when you can live in a better city for less.

      (Better as in economic fundamentals, job prospects, industry etc. )

  10. It seems much of today’s discussion revolves around what we mean by ‘afford’.
    Sure, all but the absolutely destitute can arrange to somehow put their name on a deed of sale on a property somewhere in the vicinity of Vancouver. So, to decide to not do that, to either rent or leave, could be described as a ‘lifestyle choice’, but we fear that putting it like that trivializes the prospective buyer’s dilemma.

    We believe that the true test of ‘affordability’ is not whether one can make monthly payments, but whether one can tolerate price pullbacks of 30%-60% (and no net gains in property prices (real) for the next 25 years). Many can ‘afford’ the former; far fewer the latter.
    This ‘afford’ in the broader sense includes consideration of the financial, emotional, social, occupational implications of such an outcome.

    We continue to believe that the only individuals who can truly a ‘afford’ Vancouver properties at present are individuals who have a net-worth large enough such that they could buy a target property for less than 40% of their net-worth (such that the property could halve in market price without affecting their future too adversely). Yes, we are aware that this excludes the vast majority of prospective buyers (and many owners!), and that is the point. Very few can truly ‘afford’ to buy Vancouver RE.

    • This is an affordability issue because at his stated price level he will be hard-pressed to find a family-oriented dwelling near downtown, even with significant price drops. I see this more a lament about Vancouver being expensive and not worth its long-standing premium.

      I’m bearish on real estate but also recognize that people will put a big premium on owning in Vancouver and many aren’t as fussy about the absolute location as this person is. I think it a mistake to think that every purchase in this market, even at today’s valuations, is an act of irrationality. It certainly does not justify the prices though.

      • The purchases are not irrational for those few who will be able to withstand a very significant price drop, and for whom the ‘ownership premium’ makes the risk of buying worth their while.
        All other buyers are taking on a degree of risk that is arguably ‘irrational’, and this form of buying is the cause of the ‘unjustifiable’ prices.

    • “…the only individuals who can truly a ‘afford’ Vancouver properties at present are individuals who have a net-worth large enough such that they could buy a target property for less than 40% of their net-worth”

      yes – this is exactly the problem. It’s the risk factor. Too many have put the great bulk of their net worth in one place. It’s very risky not to be diversified.

  11. “Sure, all but the absolutely destitute can arrange to somehow put their name on a deed of sale on a property somewhere in the vicinity of Vancouver. So, to decide to not do that, to either rent or leave, could be described as a ‘lifestyle choice’, but we fear that putting it like that trivializes the prospective buyer’s dilemma.”

    Exactly. I thought that was obvious.

  12. I found 18 Townhouses on the East Side for less than $600K (too expensive for this guy), and 4 for $400K – in Champlain Heights, which is actually a lovely area. Note, though: maintenance fees of $300/month.

    Affordable inventory: not thick on the ground.

  13. I think part of the problem is that people do have a set point after which it’s just not worth it to buy for them.

    If you take for example my house purchased 14 years ago for $156K, large lot, but old 2 bedroom bungalow about 700 square feet. Currently this same house is $380K. I wouldn’t buy it at that price period just like I don’t pay $50 for a t-shirt.

    Every person with some sense of who they are maintains this kind of price/value list in their head.

  14. I am with “amourb” and “Airedales”. Everything is easier – commuting, creating/generating wealth, afford a nice home etc in Calgary, and I can commute via westjet or air canada in the time it takes some people to drive from abbotsford to vancouver.

    • haha…perhaps if you lived on the airplane at the Calgary airport! I lived in Calgary for 15 years and generally the commuting is atrocious as the city is so sprawling. Traffic jams during rush hour on main roads are common. Living in Vancouver proper, I rarely see the same kind of traffic, except during special events such as the annual fireworks nights. As for ‘everything is easier’ in Calgary, if you consider it easier to wake up to blustery -20 degree winter winds blowing icy snow in your face as you unplug your car and attempt to get it started, for 4 months straight…well then I guess we have to disagree! All the best!

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