“It means my total family income would have to be an exorbitant amount to afford an $800,000 house.” [Bizarre Idea!]

Another new rule announced by Mr. Flaherty sets the maximum gross debt-service ratio – the percentage of household income being used to pay for housing – at 39 per cent so buyers will be less likely to take on mortgages that are too big and could leave them floundering if rates increase.
That’s the one that Andrea Benton, a 37-year-old entrepreneur in North Vancouver, B.C., said hits her family of four hardest.
“It means my total family income would have to be an exorbitant amount to afford an $800,000 house,” she said.
The changes in mortgage rules over the past few years have made owning a house less desirable, she said. While she understands the government’s intent is to bring prices down eventually, she said, “It feels a little Big Brotherish to me,” and questions whether it will have its intended effect on the hot North Vancouver market.
“We’re probably going to be long-term renters,” she said. “The closest I’ll probably own anything is a condo when I’m 65.”
– from ‘For many, new mortgage rules put home ownership out of reach’, G&M, 21 Jun 2012

The speculative mania in RE has desensitized Vancouverites to the actual meaning of large numbers.
– vreaa

7 responses to ““It means my total family income would have to be an exorbitant amount to afford an $800,000 house.” [Bizarre Idea!]

  1. Embedded in Benton’s assumptions are that prices are not going to drop.

    We’re all subprime now.

  2. Renters Revenge

  3. Dimitri Tishchenko

    Sucker bait:
    “$5000 Bonus to Buyer for accepted offer before July 9”
    http://www.realtor.ca/propertyDetails.aspx?propertyId=12144160&PidKey=-625280638

  4. As an entrepreneur, I’d expect her to know that having capital available to invest in her business is worth more than dumping it all into a house…

    Of course, she’s probably got a few assumptions about homeownership:
    -prices don’t fall (as noted by Jesse)
    -prices rise rapidly
    -you can always borrow all your equity out of the house (thanks HELOC!)
    -homeowners are superior to renters.

  5. Ralph Cramdown

    Seems to me that a $400,000 mortgage shouldn’t necessarily be out of reach for a couple of 37 year olds with two children.

    Oh, wait. Maybe she means they wouldn’t be able to pay it off in 13 years so they could start paying for retirement…. No, that can’t be right. I think she’s just having her midlife crisis a little early.

    She’s associated with a business catering to parents who think that the way to educate a preschooler is to buy him a tablet. Poor dear.

  6. “It means my total family income would have to be an exorbitant amount to afford an $800,000 house,”

    as it should be

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s