“I know three different couples who have bought detached SFH in the past few weeks. Two out of three settled for junk simply to “make the numbers work”. All are over-extended.”

“I know three different couples who have bought detached SFH in the past few WEEKS – two moving up following recent condo sales and one thanks to down payment from parents. Two out of three settled for junk simply to “make the numbers work.”. All are over-extended. Their excitement at being new home owners seems tempered by the stress of realizing what they’ve all just taken on, not to mention the timing, just prior to the new tightening rules which are sure to further soften prices.”
harden at VREAA 23 Jun 2012 1:45pm

13 responses to ““I know three different couples who have bought detached SFH in the past few weeks. Two out of three settled for junk simply to “make the numbers work”. All are over-extended.”

  1. People are responsible for their own decisions. But I also feel that the MSM media, real-estate-back-pocket journalists should be partly culpable.

    They (read “mainly Global”) have given such a false impression of things with so much pro-industry spin that even experienced folks have been taken in… let alone young couples.

    This is going to be quite a mess. It’s going to be hard to say “I told you so.” in fact, those words will likely not leave my mouth as it will be kicking while they’re down.

  2. I blame rich immigrants and foreigners. These families never had a fighting chance. 😆

  3. pricedoutfornow

    That’s one thing I don’t understand about Vancouver. People are buying houses for up to a million dollars, and often the houses are garbage-old, falling apart, need a lot of work etc. My significant other remembers a decade ago when these same houses were $250k-$300k, and nobody wanted them. And when a relative or someone bought one, everyone wondered why they bothered buying such a piece of junk for such an ridiculous price. Now everyone wants these houses, and now they are $800k instead of $300k, and guess what? They’re still junk, just more overpriced than ever. No thank you!

    • Those junk houses looked like fairy-tale castles while they were financial instruments rising in price every year (bought with leverage). The moment prices turn, they will go back to looking like “pieces of junk”. Seriously.

    • Same reason why women spend $100 on Lululemon yoga pants, when all they are is glorified sweat pants with a reflective logo… There’s a presumption high price = high desirability.

    • Psychology. People are desensitized to high prices. Two of my acquaintances have recently bought 2br condos for $600k+ with 10% – 15% down-payments from their parents. Both told me that $600k for a condo is not that much. Both are convinced they got a great deal.

      • And both are going to be financially ruined for decades. Damn fools.

      • How does a child learn not to touch the hot stove?

      • You got me there, Bubbly. Is the answer to touch a hot stove? I kind of prefer to learn from others mistakes first before trying it myself. Especially when they are this huge. Being a pedestrian on the real estate superhighway seems much safer than driving lately.

  4. Junk detached SFH (often bungalos) are usually the older houses that are often located on the bigger lots in the area. So they are bought for the land value, with the plan for the houses to be demolished – now or in the future.

  5. Living in different parts of the world I can easily say that the Vancouver housing market is beyond imagination. No, I am not talking about over inflated prices, I am talking about how neglected, worn and dirty most homes are.

  6. Agree with the “neglected, worn and dirty most homes are”. The houses that are bought for a tear down are usually rented out now since the market is uncertain and the small scale developers are unsure if it is a right time to start the demolishion, So they rent them out instead. The houses are getting divided into the few rental suites – not registered of course – and rented out to the international students and the recent immigrants…and the conditions are horrible there! And even the homes that are occupied by their owners – older local couples – are in a horrible condition as their income does not allow them to renovate. The newer mansions that were build recently are in the horrible conditions too as the building wowk quality is very poor lately when everyone was hired right away without any qualification. Few years old home looks worse than the 20 years old one.

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