“My friend in his early 40’s has basically considered himself retired for the last couple of years due to all this property appreciation.”

“Friend tells me the assessment of his Cambie corridor house has almost quadrupled in value over the last few years – now up to $2 million. The entertaining thing: he’s terrified because he doesn’t know how to pay the property taxes. He may have to get a real job. Basically he’s considered himself retired for the last couple of years due to all this property appreciation (he’s in his early 40s).”
604x at vancouvercondo.info 12 Jan 2012 at 8:55pm

Guy stops working in his 40s because of assumed market value of his house. Everybody see why this is so bad? Just one example of the misallocation of resources caused by a speculative mania in housing. – vreaa

30 responses to ““My friend in his early 40’s has basically considered himself retired for the last couple of years due to all this property appreciation.”

  1. Renters Revenge

    Also, there are a lot of people who are in the workforce but are not striving because of their property appreciation. The work ethic and professional atmosphere in Vancouver is seriously damaged by all of this.

  2. This story reminds me of the Nortel “millionaires” I used to golf with in 1999… What a bunch of D-Bags…

  3. it’s one thing if price of just your home goes up. when everyone else’s goes up too, it means cost of living went up. in real terms, you got poorer. imagine if avg cost of housing, food, etc. went down yoy. that would be normal trajectory for a society increasing it’s real productivity.

  4. Reminds me of the stories I read in the late 1990s about doctors, dentists, pharmacists and other highly paid professionals quitting their practices to become full time day-traders. And then there were the stories about the Ph. D physicists, engineers, chemists – people doing cutting edge research – being lured away from their fields by the big financials, who hired them to create, analyze and trade derivatives (They called these people ‘quants’ for ‘quantitative analyst’.) That’s the same kind of misallocation of resources we’re seeing today in real estate. Think of it, a skilled professional leaves his profession to speculate on stocks, real estate or whatever. This ghastly misallocation of human capital represents a net loss to society. Instead of being productive, we’re chasing easy money and doing nothing. It needs to end. It will.

    • ground zero = us federal reserve and central banking

      • Check the whisperer’s blog this morning. It seems that there are some interesting developments on the US treasury front, besides the downgrading of France by S&P… The recession/depression is far from over. Oh well, it’s sunny today in the BPOE and TGIF!

      • All eyes on Greece. Remember their government is a temporary one, if they’re going to shirk democracy the clock’s a-tickin’

      • ltro = eu style qe is buying time, for now. it’s why the markets are all up, except the euro. but of course does nothing for underlying issues. interesting to note how kick the can continues despite being at end of road. adds to my conviction about currency debasement.

    • You’re all correct about the misallocation of human capital and about currency debasement as a means of hiding the truth of a situation. But what happens after the bubble? I know some PhD physicists who don’t WANT to go back to the lab after ten years as an investment banking analyst (but will have to) – ditto, European governments currently seem to be constitutionally incapable of saying “we spent money we didn’t have for far too long”.

      I’m still keen on a return to Canada (currently live in Europe) but TBH you guys have really educated me on the current situation in my home city, for which my deep gratitude…

      • what is your sense of the common man’s grasp of it there? greek yields over 400%, iceland already showed them the way out, and the leadership still won’t say default. do the french really believe their entitlements can still be funded? i’m surprised there hasn’t been more written on capital flight and exchange controls. all the hooks are being put in place here in the us. just read a nice write up on rise of the praetorian class.

      • Oktobderpfest

        @chub: post link please?

      • link to casey research praetorian class article by kofod

        http://tinyurl.com/75v5jej

  5. Off topic but I’m not sure where else to put this. Has anyone else seen those weird faxes written in English & an Asian language warning people not to buy property in the lower mainland? The fax says “property prices to fall 80%, keep you money in the bank”. Very weird, there’s no sender info on the faxes. I think our office received 3 this week.

  6. you have to read the transcript of greenspan’s last meeting

    http://tinyurl.com/7bkzzo2

    never mind ppty rights principles, so this is better than the market setting rates?

    • Renters Revenge

      End the Fed / BoC.
      “Dallas Fed president Richard Fisher, in particular, comes off as way out of touch with reality, at one point summing up the U.S. economy as ‘something like a 2006 BMW Z4 Roadster – Bluetooth-enabled, by the way. It’s complex, it’s highly integrated, it’s a technically advanced machine that apparently cannot help itself from exceeding the speed limit.'”

  7. *If he actually sells*, he really can retire. That part is totally reasonable. That this is possible makes a mockery of study and work, but that’s markets. No one said it was going to be fair.

    Funny to think of the endless Cambie-cut-and-cover-construction griping that went on in 2009.

  8. The unemployed shouldn’t have to pay property taxes. Poor guy.

  9. Can’t everyone west of Ontario Street retire? Now would be a good time to sell the farm, before the rush….

  10. Interesting illustration of the “wealth effect” of rising real estate prices. This property has gone up each year a sum of money that exceeds the earnings of almost all Canadians, on a principal residence these are tax free capital gains. The owner feels far wealthier than his earnings would ever make him feel. He hit a financial grand slam home run on a single transaction. Unfortunately all of his net worth is in one asset, he is probably unable to come to terms with trading down in order to free up capital to pay off debt and invest for cash flow. If he’s struggling to pay property taxes of 6 g per year in his forties, he “retired” way too soon.

  11. how has your friend been paying the property taxes in the past many years? does CoV just started collecting property taxes in the last couple of years when property values surge ? another bogus!

    • helox now maalox later
      rbc has your back but really you have theirs

    • hey fredula, the guy has a “mortgage helper” which pays many of the bills. He’s spooked now ’cause the current assessments spike when compared to prior years.

      • Its not good to be so dependent on a tenant. My landlord owns several properties. If I start doing crack, give him the run-around on rent and then trash the place, it will be very inconvenient for him. However, he would be more than able to cope with the situation. Sounds like your friend is much more vulnerable to potential tenant problems.

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