“British Columbian couples with young children are being squeezed in an economic vice because of high housing and child care costs, according to a UBC family expert who dubs the group “Generation Squeezed.” Paul Kershaw says the high cost of housing coupled with skyrocketing child care costs is making it nearly impossible for young parents to raise a family in B.C.’s Lower Mainland.”
Derek Atkinson, a 28-year-old university educated dad who lives in Burnaby, said he has a bleak outlook when it comes to buying a home.
“It’s something that is getting closer to being a pipe dream than any sort of reality,” he said.
With a combined income of $92,000, he and his wife could qualify for a $500,000 mortgage. But Atkinson said the minimum $25,000 down payment is too rich for him and his young family.
“We’d have to save up for at least five, six years just to get a decent down payment…and that’s really frustrating,” he said.
The average B.C. couple only makes $66,700, enough to qualify for just a $300,000 mortgage. A November search of the residential real estate listings in Metro Vancouver (MLS) turned up only seven two-bedroom properties in that price range.
Tom Davidoff of the UBC Sauder School of Business said that young Vancouver couples simply don’t have a right to own a home in the city they grew up in. “There’s not going to be any free lunch in Vancouver. There’s no entitlement to own a nice home in the most beautiful place on earth. So I think people need to be prepared just to accept that reality,” he said.
– excerpted from ‘Housing, child care sting ‘Generation Squeezed’, Darcy Wintonyk, ctvbc.ca, 1 Dec 2011
Noting that there is a speculative mania in Vancouver housing is not the same thing as asking for a free lunch. – vreaa
ADDENDUM, 2 Dec 2011, 7:50am:
Dan, writing in the comments below, asks “Can someone explain what Prof. Davidoff said that was so objectionable?” and then segues to talk of a speculative bubble (which Davidoff did not mention) and asks “What’s so terrible about renting?” (Davidoff did end up mentioning renting, but that was not the statement he made that has been objected to).
We’ll share our response to Dan’s question here.
Davidoff said: “There’s not going to be any free lunch in Vancouver. There’s no entitlement to own a nice home in the most beautiful place on earth. So I think people need to be prepared just to accept that reality”.
Here’s the objection, Dan –
Davidoff reiterated a sloppy, tired argument that deflects from the issue at hand:
Young couples (or any other prospective buyers) point out that housing prices are extremely overextended in Vancouver.
Davidoff retorts with an argument that directly implies that prospective buyers are asking for something for “free”, that prospective buyers feel “entitled” to get something for nothing. Where did any of these buyers make such ridiculous claims? [They did not!]
Davidoff’s fallacious implications are a straw-man argument; they have the effect, by design or otherwise, of dismissing the prospective buyers’ initial (and very valid observation): Housing prices in Vancouver are very overextended.
Customer: “How much are your sandwiches?”
Storeowner: “$50 each.”
Customer: “$50! That’s a little steep…”
Davidoff: “What do you expect? For someone to give you free food?”
Davidoff is supposedly an academic with, we’d imagine, some claim to expertise in the area of housing markets.
We are in the midst of a global housing market disaster; we have housing prices in Vancouver that are preposterously higher than fundamental values determined by income and rent; we have personal debt levels that are higher than they were in the US before their bust; we have a local economy that is overdependent on real estate … and the only analysis that this School of Business can march out is flaccid non-arguments in favour of the status quo? (Davidoff’s “reality” that has to be “accepted”.)
Are there no sensible academics in this business school that can do back of the napkin math?
‘The Economist’ has just published an article implying that Canadian housing is overvalued by at least 25% (A remarkable 71% as determined by rental rates). Numerous other respectable commentators have pointed out the unsustainable housing valuations in Vancouver.
Has anybody seen any commentary from anybody at UBC’s Sauder ‘School of Business’ that in any way attempts to discuss or analyze these arguments?
When the speculative mania in Vancouver RE collapses, it will be remarkable to look back and see how deficient local economists and financial commentators have been for not warning about this obvious bubble.
The fact that Davidoff even threw in “the most beautiful place on earth” canard just makes his statement that much more pathetic.
Come on, Sauder.
Have any of you studied anything about ‘speculative manias’?
Is the 2011 Vancouver housing market not a wonderful, soaring example of such a beast?
What are you telling students who ask such a question?
See also ‘Tom Davidoff Knows About RE Cycles’, VREAA, 4 Dec 2011
“a nice home in the most beautiful place on earth.”
I can’t believe he said that… Pathetically sad. This is so far away from fact-based research/analysis that should be coming from any serious professor working in a decent university…
And from the CBC website:
“I call it the selfish generation. We in the 25-44 yr age bracket are being punished and paying for our parents wealth, comfort, and selfish behaviour.”
“We are 50 and we had to save up for several years to afford the down payment on our first home also. That isn’t anything new. Is it frustrating? Maybe, but it’s not a new for you type of problem, suck it up and start saving up!”
The inter-generational war is starting…
Except that the price-to-income ratio has never been this high in Vancouver.
“Except that the price-to-income ratio has never been this high in Vancouver”.
the gap between the haves and have nots has never been greater.
Define “haves”. Does someone with median income and $500k mortgage on a condo in DTES qualify as “have” or “have not”?
this is exactly the point of occupy. Baby boomers won’t give up access to the trough.
Yup, free lunches are reserved for the smart 5% down (via a LOC) investors that borrow as much as possible, no matter what the cost.
If you don’t own, go away you entitlement bitch!
Sorry, but given his ignorance of the bubble, that was a pretty asshole thing to say.
He is american. Check his CV etc. Just googled it. He went to MIT and Harvard so what does that tell you? Very educated, probably comes from a very wealthy family to afford that. Being an American, he has little credit to say those things in a city where he did not grow up or has much experience and knowledge of the housing industry in Vancouver. Email him if you don’t like what he said. firstname.lastname@example.org
Sorry, I guess I am a bit cranky!!
I agree – spoiled Ivey league brat hiding in an ivory tower spilling his entitled bs as a pretend educator.
Page 51 of the UBC Consolidated Statement dated March 31, 2011 lists Thomas Davidoff’s salary at $204,135. UBC Pres. Stephen Toope’s salary is $528,504 (page 118).
Click to access FIA%20March%202011_new.pdf
Mr. Davidoff should disclose of course whether he has skin in the game. As many economists study incentives, we must ask what is the incentive structure behind his claims, especially coming from a practitioner in a field that labels itself “value free”??
I am an academic at UBC. His CV and research record are very mediocre at best. From the CV it is very likely that he did not make tenure at Berkeley, but UBC has still decided to hire him.
I completely agree with what Makaya observed in the first reply above. He is an academic who should be engaged in research/analysis, collection of data, and serious OBJECTIVE discourse. He should not be sounding like one of Cam Good’s henchman. Pathetic.
Yes, he has been an assistant professor since at least 2002. I suspect your assessment is correct mjw. Regardless, a bit of knowledge and empathy would serve him well.
empathy?? not for us canadians – we’re anti-market socialists, dontya know?
So you’re happy to harsh on his academic record, on the basis of a one-line quote in a media piece, but not willing to bare your own name? How many publications do have, wise guy? And what part of what he said do you disagree with? You think young people needing to rent is the end of the world? You think there is a free lunch?
“So I think people need to be prepared just to accept that reality”
Is that what he’s going to say to homeowners after the bubble’s burst?
If you watch the whole thing, they mention (but don’t show the footage) that the business prof thinks renting is a good option in this environment, the money you save can go into the stock market. That seems pretty reasonable to me.
I didn’t know that taking a 30 year mortgage was a “free lunch”.
Fair enough. Vancouver is nice. That’s it. It’s “nice”. I was sent here by my firm 6 months ago for a permanent transfer. My wife and I (we’re just under 30) are leaving. It’s just not nice enough.
Similar situation here … moved permanently but have started considering other options. Not asking for “free lunch” or “entitlements”, I will gladly pay for housing and a city premium, but YVR is off the charts. Have colleagues and friends with similar background in other cities and I can easily compare what value/cost you can get for your money.
People have completely lost perspective of the insane prices or what it takes to generate that kind of money. Prices are raised 100,000 – 200,000 without thought. Or crappy, expensive shoebox condos that would buy a house with acreage 30 mins. south are sold out. Insane, really.
I was in Seattle a couple of times last month. If you like city life and the west coast check it out. Nice houses in nice parts of town are half the cost of Vancouver or less. Hell, you can get a nice house in an inexpensive suburb for $250,000 easy. I’m seriously considering it as I could be mortgage free in my 40s if I go back to the States.
Expensive it certainly is.
How exactly is it an issue that you need to save for 5 or 6 years for a downpayment? This seems pretty standard/logical, no? In fact, one could argue that if this were the case for most people the bubble would be much smaller. If buyers were required to come up with real money, not just 5% it would have certainly taken some steam out of this run up.
Secondly, I am starting to get pretty annoyed at how polarizing and devise the housing issue is becoming in Vancouver. People need to get creative, start thinking solutions. Its not about the entitlement to own, its about having housing stock that facilitates growth and is a net positive to our citizens. I am not convinced that having towers filled with 1bedroom condos is the best use/purpose.
Third, how many articles do we need reminding us how squeezed our families are becoming before someone actually stands up and protests? BC’ers must be masochistic, how much pain can you people take without complaining? Its gone far beyond our property prices, think daycare, think groceries, think gasoline, think insurance, think taxes, think wages.
@Burt — agreed.
over-levered assets will deflate when the ponzis exhaust their fuels and this will rightly apply great stress to the banking system. bailing it out is theft by currency devaluation, result of which for most will be a further squeeze by other rising cost of living factors. people know they’re being hurt but not enough will understand the how and who. risk is creating a generation of abused ‘children’, highly susceptible to radicalism. at every stage we refuse to confront the consequences in the present and choose instead to delay atonement, the conclusion grows more dangerous.
Burt -> “I am starting to get pretty annoyed at how polarizing and devise the housing issue is becoming in Vancouver. People need to get creative, start thinking solutions.”
Totally respect your annoyance with the state of affairs, it is completely justified. But, as we’ve stated before, the only meaningful path towards a solution starts with a crash of the speculative mania. The market itself and nothing else will “create” that crash; it will very definitely not be precipitated by policy change. Until the crash occurs, any other “solutions” will be ephemeral; window dressing; facades; paper-over-cracks.
Masochists… that’s what so frustrating about housing here …
Everyone here but the trolls understand that you need to make some trade-offs or “sacrifices”. Live close to the city, smaller place. Out in the suburbs, bigger place but commute. A nicer part of the city, more expensive, another part, cheaper maybe not that bad. Big yard vs small yard, etc. There are choices. Don’t mind commuting a few hours for coming back to a nice house with big yard.
But here … is a downward slope … realtr talk:
Move to the outer suburbs and commute a few hours. For a crappy house that is falling down. With a stamp sized yard. Need to “fix it up”. In a crappy neighborhood. Need to fix and rent the basement. A bargain ? No … still need to get a debt over half to one million for all those privileges in BPOE.
Sounds like you’re blaming the reality for being, well, real. Questions: who created this reality? How do you change it? How long will it go on for?
I think we’d all agree that if you could create more land then prices of detached home wold come down. So if developers create more units shouldn’t prices come down? Why aren’t they? With a potential for a limitless supply of units why is it prices are not half of their current value?
No worries … No blame … just describing reality – as you point it out.
“BC’ers must be masochistic, how much pain can you people take without complaining?”
Masochists is right. People with six-figure incomes borrow over half a million dollars for a house they can’t afford, confine themselves and their children to the upper floor, rent the basement to some guy they met on Craigslist and then BRAG ABOUT IT because the renter is “paying their mortgage”, except of course he isn’t.
Not only are they not pissed about the cost of housing but they’re smug about not being able to live in half their house as if being a basement landlord is some kind of genius financial plan.
bc has never been the most intelligent province
that said, get ready, Canada – Vancouver’s Generation Screwed are moving east and north..
the country is about to get a lot more obnoxious.
Heh heh. Maybe. But the most obnoxious are those trumpeting the ‘best place on earth’/’everyone hates us because they’re jealous of Vancouver’ types. People leaving likely didn’t buy in to those tag lines in the first place. Or, if they did, they’re not going to trumpet the fact that they had to leave such a place.
Not exactly a ringing endorsment of business case analysis acumen. Oh Sauder, what have ye become?
Sorry but BC and business school are almost opposites in the first place.
“But I would not listen to them, and shouted out to him in my rage,
‘Cyclops, if any one asks you who it was that put your eye out and
spoiled your beauty, say it was the valiant warrior Ulysses, son of
Laertes, who lives in Ithaca.’
I also reacted very angrily to what Davidoff said and I agree with other commenters he might not know enough about this area to deliver such views or understand how expressing his opinion as he did could be infuriating.
However, I have to say too that it’s a common misconception that you have to be very rich to go to Harvard and MIT and rich people are all who’s enrolled. The overwhelming majority of students attending these universities in recent decades have had financial aid. It’s true that there are students from rich families there, but there are also students from very modest backgrounds and plenty of middle-class students as well. In fact, if your family income is under a certain level (I think it’s $60,000), and you qualify, Harvard will educate you for free. Thus Davidoff’s being a graduate doesn’t necessarily prove he’s from a very wealthy background.
Also, Vancouver has many emigres from the US who are Canadian citizens, many longstanding, and who have contributed not only to Vancouver and BC but to the battles we all write in about here!
All this said, I’m in complete sympathy with the ire about the tone of Prof. Davidoff’s comments as they sound in the story.
In that same spirit, Vesta – may I be so bold as to add, “[expletive deleted. -ed.], Davidoff.”
Further proof, if any were needed, that when it comes to senior faculty the ‘ol Academy sure ain’t what it used to be.
Nem’s trusty anomicstrain meter indicates EffigyBBQ time is getting proximal…
Watch out … next bubble is education … http://bit.ly/uWEkJi
I thought Victoria was part of the Best Place on Earth as well…
What’s going on with their Real Estate over there? Isn’t it supposed to always go up?
Sales to new listings ratio: 57%
Sales to active listings ratio: 11% or 9 MOI
Sales to new listings ratio: 66%
Sales to active listings ratio: 13% or 7.7 MOI”
How is a market with 9 MOI called again? Coming up soon close to you…
9 MOI is called a “buyer’s market” but nothing could be further from the truth. Earnings…
As I said earlier I was cranky. I am not criticizing him for being American, but he has not been in Vancouver long to know the history here. Also there are so many stories of UBC profs who can’t afford to live in the area. He probably could have reworded what he said.
Agreed, that he sounded like Marie Antoinette, and knowing his salary doesn’t help with that impression. I wonder if he thought he was saying “These are just the facts, you can’t expect to own here now,” but it really came off like he was lecturing other less fortunate people on their sense of “entitlement”!
With that salary he cannot afford west side house! If he’s comfortable it’s timing, not earnings.
They end the story with a mention of a story coming up about financial literacy of youths.
How can you expect them to be financially responsible when they are being told by people like that mortgage lady to go borrow from a Line of Credit to pay for your down payment?
well according to rusty thats just being responsible for your children’s futures.
“suck it up” as they say
“being told” => “being taught”
it’s just the bank aligning it’s long term interests with your short term interest, what could possibly go wrong?
What a disgusting statement: “You need five percent down to get a place, but you can borrow it on a secured line of credit, you can get it from a family member.” WTF. Uh, you can save for it or you can rent (gasp!). At least at the end they said you can use your downpayment to invest instead of putting it in the stock market, that renting isn’t the end of the world.
And that business school guy with his “Entitlement” to live in the “most beautiful place on earth.” Is he for real? I don’t consider myself a world traveller but I think Vancouver is bush league compared to Hawaii, New Zealand, China, Thailand, Switzerland. Most beautiful? Give me break.
And the solving affordable housing scenario should not be targeting self-entitled 30-somethings making $100,000 a year really, it should be addressing the fact that 27 people were turned away from shelter in Vancouver two nights ago when it was bloody freezing, not figuring out how we can own a slice of the dream. That’s exactly what Bush did, make home ownership accessible to the masses and look what happened. Now they have empty houses and overflowing shelters and tent cities.
Aside: strange how we had emergency beds for everyone last year and now that the Olympics are gone we don’t have enough.
I am well traveled. Vancouver is average at best. Nice setting, ugly city.
It’s the “most beautiful place on earth” for people who never travel (except to some resort in Mexico) and for snake oil salesmen.
Can someone explain what Prof. Davidoff said that was so objectionable? Real estate is expensive in Vancouver, partly because it’s a nice place to live, and maybe partly because there’s a speculative bubble. So, in that circumstance, it may not be realistic for young, middle income people to expect to own a home in the city. What’s so terrible about renting?
If he had said “real estate is expensive partly because of a speculative bubble”, that would not have been objectionable. Instead he insinuated that young people feel a sense of entitlement that they ought to be able to be a home here. Plus the “the most beautiful place on earth” quote really paints him as a RE cheerleader.
I am young and frustrated at the cost of housing here, but this feeling is not entitlement. Entitlement is expecting to be provided with something. In my case (and I suspect for many readers of this blog too), I *know* that I would have a significantly better cost of living in other places of the world, whether it’s St John’s, Calgary, Toronto, Seattle, LA, Honolulu, etc. The current situation encourages those with the means to leave to do precisely that.
Davidoff, with his poorly thought out media soundbites, is part of the problem not a part of the solution.
Jeff -> We agree. See the post addendum.
You think he’s part of problem, because if people say “the most beautiful place on Earth” in public too much, that will encourage more rich people to move to Vancouver, and bid up the RE prices? That would seem more plausible if the quote weren’t in the context of a long piece about how unaffordable Vancouver is.
But the advise he’s giving people is to move out, or rent. If people followed that advice, wouldn’t that tend to reduce RE prices, and make the place more affordable? How is giving that advice part of the problem? What do you think the solution is?
Dan -> You’re obscuring the issue yourself with talk of free lunches, renting, and the publication records of anonymous online commenters.
The crucial point is this:
How can any academic who claims to be an expert on housing markets say anything about housing in Vancouver circa Dec 2011 without pointing out that the RE market here is a massive speculative mania fueled by cheap credit?
@vreaa, but that’s exactly the problem, you are assuming something that you really shouldn’t be assuming because Vancouver real estate market is very complexed and is fueled by more than cheap credit.
I think Davidoff’s biggest problem is that he really doesn’t understand the issue, whether or not Vancouver is in a massive speculative bubble is not something that academics can agree whether you like it or not. So it’s not true that he has to associate that with Vancouver real estate. I don’t see how anyone MUST associate speculative bubbles with Vancouver when commenting on it, it is simply an opinion of some or even many people, mostly bears. There are a ton of massively bullish academics that will disagree. I think he should have stuck to the facts:
1. Vancouver is very expensive. Rent to ownership ratios is much worse than most places in the world.
2. If you can’t afford it, rent, it’s not a bad option at all.
3. It is very unaffordable for young people to buy a house. Some of them will leave.
That’s why I appreciate some of Jesse’s comments because he sticks to the rent as a return argument against housing prices which is a fact, how is it caused is very complexed and I can’t jump to its conclusion decisively.
Julian -> As always, thanks for the comment.
Agreed, Vancouver housing market is “very complex”.
But, there is a danger of then assuming that, because it is “complex”, we can’t understand it.
Note how prices in almost every housing market in Canada, in 2003, departed from their historic course of closely following local incomes, and started following issued mortgage debt. Prices climbed away from fundamentals and just kept climbing.
The whole country is in a housing bubble fueled by cheap credit.
Vancouver is the most exaggerated example, perhaps.
Sure, there may be a few other factors with relatively small effects adding to the ever present “Vancouver premium”, but far and away the major contributing factor is cheap credit.
Occam’s Razor: What about our RE market is not explained by cheap credit leading to a speculative mania?
Anyway, you and I have made our positions clear, I respect the fact that you see the market as playing out differently, and, as we’ve said, we’ll get a chance to test our respective hypotheses in time.
Julian, BTW ->
When you say: “whether or not Vancouver is in a massive speculative bubble is not something that academics can agree whether you like it or not. So it’s not true that he has to associate that with Vancouver real estate. I don’t see how anyone MUST associate speculative bubbles with Vancouver when commenting on it, it is simply an opinion of some or even many people, mostly bears.”
1. Can you name/quote any independent economist who has commented on the Vancouver RE market without saying that it may represent a speculative bubble? [serious question; perhaps you can.]
2. The bit about bears is circular: Once you recognize it as a speculative mania, you have to be a bear.
Davidoff is entitled to his opinion that BC is “the most beautiful place on earth”. But I guess he didn’t get the memo that this marketing campaign has been canceled and that this brand was only used in BC “to help motivate British Columbians”.
If only Davidoff had asked his colleague Peter Williams at SFU, he would have learned that:
“It was presumptuous. If it was meant to endear people to us, it probably wasn’t going to do that given that a lot of other people live in other parts of the world that are pretty nice. And probably quite competitive to B.C. in many senses.”
Referring to Julian and Vreaa’s exchange above, many academic economists will make the utterly useless claim that one can’t know a bubble has happened until it’s popped (channeling market efficiency as some kind of questionably “rigorous” argument). Many will even claim that academic economics is not used for predicting what will happen, but only to understand what has happened. I.e. academic economics is used to confirm hindsight biases. F@#king outrageous and useless, especially if one has been brought up to expect their thoughts are somehow relevant to the reality of the Vancouver housing market.
“the RE market here is a massive speculative mania fueled by cheap credit”?
We are talking about detached, right? Rarely do I hear complaints about renter not being able to afford a condo – so this must be for the single family home.
So will believe the above statement when it’s shown to me.
I need proof of:
1. People are buying detached homes and reselling them in less than 2 years (aka speculation). My observations are the people are buying homes for families with very small % of flips
2. Detached homes are being purchased on cheap credit rather than wealth (equity or cash).
The whole “cheap credit” argument for rising detached prices is just plain silly. It’s been shown here many times that Vancouverites do not have the income to afford such homes on credit
well said jeff
See ‘ADDENDUM, 2 Dec 2011, 7:50am’ added to the original post that addresses Dan’s question “Can someone explain what Prof. Davidoff said that was so objectionable?”
“There’s not going to be any free lunch in Vancouver. There’s no entitlement to own a nice home in the most beautiful place on earth. So I think people need to be prepared just to accept that reality.”
without the middle sentence and reference to van, it would just be a conservative values statement – and one i happen to agree with. with ref to van and most beautiful place bit, it becomes a slight from have to have not. and given what’s at stake for have nots, it’s kicking someone when they’re down. the more charitable interpretation is this was done unintentionally.
At the end of the day, it’s all about ‘tone’/’attitude’… Or is it??? Never forget, at base, ‘politics’ is always, first and foremost, about ‘who’ gets ‘what’….
“Are there no sensible academics in this business school…” – VREAA
BusinessSchool!?… You’re looking in the wrong place, IllustriousEd. – you may as well ask/implore, “Are there no ‘virgins’ in this ‘brothel’!?”…
Try this fellow instead… [hint: he’s the local academician whose research is a ‘tad’ too controversial to feature in ‘sanctioned’ discussions of our favourite topic]…
David Ley – UBC Dept. Geography
Millionaire Migrants: Trans-Pacific Life Lines – David Ley
“In Millionaire Migrants, David Ley once more demonstrates his international leadership in the field of social and cultural Geography, with this dazzling account of the transnational circulatory flows of Chinese between East Asia and Canada. Ley sees through the claims made for the success of business migration to the rather more modest achievements underneath.” – Ceri Peach, University of Oxford
Metropolis British Columbia – ResearchDomains: Housing & Neighbourhoods
“The relationship between access to affordable housing and residential concentrations of newcomers and minorities on the one hand, and successful integration and inclusion on the other has become more pronounced in recent years.”…
Ah yes human geography. A faculty of art, incorporating science, do some great work nonetheless 😉
Hard to tell the context, Davidoff is quoted for a media piece and not a longer and full discussion on his views. So don’t read too much into it, is my take.
He is stating something that is unpopular, that it it is true that Vancouver is going to attract affluent people who will own large properties near its core, whether residents or not, it means incumbents will have to pony up. I don’t think that’s a controversial thing to state, but misses the bigger picture, that on an investment return basis the city isn’t doing very well.
It looks surreal, I can find hundreds of real estate investors who think that 5% cap rate on a condo is hunky-dory. It’s a hard argument to make that this is a poor return because of the remote but severe nature of the risks involved. The only way to explain it is to wait for credit pullbacks that happen every so often, then lend them a copy of a Taleb or Shiller book to try to explain why the bubble, not a crash, is the problem.
Man O Man, how can people sleep at night with so much debt is beyond me…
“The average B.C. resident has $36,588 in non-mortgage debt — 43 per cent higher than the Canadian average of $25,594.”
“Higgins said the high debt levels in B.C. and Alberta are a reflection of the two provinces’ more robust economies and higher standards of living.”
or maybe it could be the opposite, aka debt fuel economic growth until it doesn’t, turning the “robust” economy into a depressed area… And highest standard of living in BC? really?
So, if we had such a robust economy with high standard of living, how come “B.C. has the highest delinquency rate for lines of credit in the country, although at .28 per cent, the rate is still very low.”?
“Traditionally, credit limits over $30,000 were probably secured against something, but now we’re seeing lines of credit with $40,000 to $60,000 range that are unsecured,” Higgins said. “There’s been a shift in that over the last couple of years, so that more and more of that debt is now truly unsecured.”
$60K of unsecured credit… Frightening…
cmhc pr says situation is stabilizing due to people becoming more cautious and slowing rate their debt accrual. lol! jacks must have trained at the fed. alternate interpret data – this pig won’t take any more dope injections.
Yeah slowing debt accrual by 9 whole dollars.
household variant is slowing significantly, which may be prelude to top and reversal – with consequent effect on RE values. sovereign public debt however another matter, likely only to be curtailed by a currency crisis.
For those who are now trying to say the issue is SFH, Davidoff was talking about owning any nice home. Look at the quote.
If Davidoff doesn’t believe we’re in a bubble, he needs to explain why. Far more esteemed international observers are saying Vancouver is in a bubble, so our local academics should at least address the possibility. Loose credit is the only explanation we’ve heard so far that has any kind of logic or evidence. All other theories are 99% anecdotes from biased sources.
On a personal, I’m offended. Davidoff is just repeating the same BS you can hear from any 70 year-old semi-literate home owner. How dare he think he can get away with such a weak comment. Does he think we’re stupid?
Shame on UBC for housing the Sauder School of Business.
What’s worse, guys like Davidoff know we’re in bubble trouble. Why else would later add that he encourages young families to rent? Surely, if real estate is going up forever, everyone remotely capable should buy. So I suspect he’s dishonest too.
Davidoff and Tsur are, petty much, employed by Polygon homes.
“If Davidoff doesn’t believe we’re in a bubble, he needs to explain why”.
maybe you need to explain why you think we have a bubble. Posting data like price/rent, price/income etc. do nothing to convince me since there are plenty of markets in the world where these stats are skewed without being labelled “bubbly”.
We have an ever increasing demand, ever diminishing supply of detached properties. That’s enough for me.
Another question…what do you call a bubble that never pops? Is it still a bubble or is it something else? How about we call it a tumor (which if not removed by aggressive intervention will likely kill it’s host)?
UBC is joke. Just look at the quality of the comments.
I am in the market for elementary school for my kids.
Check out the ranking of University Hill Elementary, you will see the future UBC and this town.
Image from StatsCan data, care of saskatoonhousingbubble.
yes indeedy, vreaady. and if the peeps wanna preview the next scene, theys can scout out the same pix for euroland and da u-s-a. will there be a pool on the OF moment? in bizarro land, when you see your neighbors play with fire and burn down their house, you wanna make sure to outdo them.
First chart: Income and House prices
Second chart: Canada’s Household Debt to GDP Ratio
Study and compare.
Note cause of our bubble.
Any more questions?
– from “Two Charts: All You Need To Know About Canada’s Housing Bubble’
VREAA 26 Aug 2010
This is not an anecdote, but it could be a separate post.
Do you have a price-to-income chart too? (For Vancouver)
It was already posted as a separate post (26 Aug 2010, link above).
Link to a Vancouver price:income chart over time would be appreciated.
Right… Missed the link at the end of your comment.
See also ‘Tom Davidoff Knows About RE Cycles’, VREAA, 4 Dec 2011