Another nation, but just as relevant (and equally unsustainable) here in Vancouver. – vreaa
[Remember the Vancouver dentist who reportedly said that he “made more on the sale of that house than he made in his entire career”? (VREAA, 21 Aug 2011)]
“With house prices growing faster than incomes in many parts of the UK, is your house making more money than you do?
Thanks to an extra breadwinner in the family, Rebecca Fletcher, her husband and two daughters are living the good life in a rural cottage deep in the Hampshire countryside.
The extra breadwinner is their old family home – a three-bedroom, terraced house in south-west London which Mrs Fletcher, a primary school teacher, and her husband, a London solicitor, bought in 2007.
They paid £450,000 – right at the top of the house price boom of the last decade.
When house prices fell after the 2008 banking bust, they feared financial disaster.
“We thought, ‘Are we ever going to be able to move out of this house – are we ever going to recoup the money we’ve spent on it?'” says Mrs Fletcher.
Their fears proved unfounded.
In 2009, prices in south-west London started rising, and went on rising. By the time they sold their former home last August, the price was £655,000.
According to calculations done for the BBC by Lloyds Bank, in the 12 months before the sale, Mrs Fletcher’s London home had increased in price by about £100,000 – more than she and her husband’s earnings put together.”
– from ‘Does your house make more than you?’, Michael Robinson, BBC, 1 Aug 2014
Worries me, to think that my Doctor believes that he can make more money investing in RE in Vancouver than looking after his patients.
While he’s taking my blood pressure, is he worried that his renter is 2 months behind in his rent?
Or the lawyer in court?
Is he worried about his investment condo in Coal Harbour for which he still has not find a tenant?
The answer could easily be ‘yes’ to all of the above.
Monetary policy (and the low cost of money and subsequent speculative activity) has perverted the more typical relationship between work and financial reward. One would estimate that only a small minority of professionals have not been profoundly distracted by the nature of the current playing field.
pffft! … might be time for another drill … http://tinyurl.com/qgsptgu
I miss the good old days when having the extra breadwinner in the family meant sending your son off to work when he was old enough:
Wow this is really catching on – Is your house earning more than you?
“We’ve been seeing this trend for a while — house prices rising faster than incomes. But now it’s really stepped up,” he said.
Mr McCrindle said although such a spike in real estate prices has some commentators talking about a property “bubble” he said he firmly disagreed.
“These price rises are underpinned by demand, which is caused by record birthrates and rising migration. I think it’s about time that we decoupled average earnings from house prices,” he said.
I live in Vancouver, not in London or Sidney.
especially in a poor opportunity, no industry, no economy city like vancouver……thats why people cling to real estate for dear life in vancouver more than any other people on earth . a poor city with piss poor opportunity
If I didn’t know any better I’d say rising home prices are a tax on the rich
..and who collects the tax?
The government collects the property tax, and the banks collect the mortgage tax, and the construction industry collects the build&reno tax, and the realtor collects the transaction tax… but the really important and substantial tax (the speculation tax) is paid to the series of sellers, by the last buyer before the descent.
So, the wannabe rich being taxed by the temporarily richer?
I think there is substantial wealth, present and future, local and foreign, being used to buy real restate from incumbents. “Rich” => surplus savings looking for a “home”.
Ah, yes. Monaco.