“Met a nice fellow today at an event who said he and wife make just over six figures (combined) and were just pre-approved for $1.2 mil. He said he knows they can’t afford more than $400K at present rates. But nice lady at the bank said not to worry – rates aren’t going up soon. Wonder where she heard that from, and what “soon” is in the context of a 30 year shackle. A friend sells mortgages at same bank. Nice gal. Earns $46,000 a year, dropped out of general arts in her 3rd year of undergrad, took a mandatory 5 day combined mortgage/financial advising course at the bank, rehashes one page flatsheet talking points to existing bank customers.”
“I work with a very nice gal whose combined family income is just over $200K per year. They own a 2 bdrm condo in East Van and can’t afford a SFH but desperately want one because of growing family. Actually that’s not true – they could buy a SFH but don’t want to, because, in her words, it would be a dump and they’d be elbow-deep in mousesh!t and stucco for 3 years, and they actually want to buy vegetables and contribute to an RESP for their kid but couldn’t afford to with an $800K mortgage. Should have seen her eyes when I told her she is the 1% – she figured you needed at least $500K per year. Nope… $230K. What’s 35% of that? After tax: $3,500 per month. With rates up 200 bps in 3-4 years… that’s probably getting you a $500K mortgage or a bit better by my math. Yeah, that’s a healthy market… the 1% can only buy half of the “average” house without a hefty DP.”
“This is what sickens me and drives me to post my useless rants on [RE Talks] – not (just) that I want to buy a reasonably priced SFH in the LM. I’m not some bitter lefty renter – I’m a fiscal conservative to the core, and own property outside the LM. I just can’t stand to see the lies and deceit that will harm so many people while the insiders make out like bandits once again.”
Four stories in one here:
1. Couple earning $100K+ pre-approved for $1.2M.
2. In-house bank salesperson selling mortgages with minimal training.
3. Family earning $200K+ reluctant to move up because of perceived low value in SFHs.
4. Fiscal conservative RE owner seeking a “reasonably priced SFH” in the lower mainland.
Readily available cheap credit resulting in elevated home prices reflecting very poor value.