Featured today in 24 Hours Vancouver
The latest real estate figures released this week show Vancouver property sales have reached a record 10-year low.. The Real Estate Board of Greater Vancouver, in turn, has officially declared we are now in a “buyer’s market”!!! Well, it’s about time, isn’t it?! But, before you get too excited and rush out to buy your own little piece of Lotus Land, consider this…while sales are at a record low, housing prices are still, to be frank, absurd. The average price of a detached home in Vancouver is currently hovering around a million dollars.
I’ve observed this phenomenon in the Vancouver market before. We go through an insane frenzy which, inevitably, comes to a halt. Consequently, we are left with a surplus of product on the market and the REBGV and realtors say “Buy! Buy! Buy!” What I want to know is this…if it is a buyer’s market, who the heck are the buyers? Mortgage payments, utilities and property taxes are already costing the average Vancouverite 88.9% of their household income. Pause and let that sink in…88.9%. Shocking, right? Something is really, really wrong here. How are people affording to live on less than 12% of their incomes?
My husband and I scratch our heads about this all the time. We feel like we are beyond cash poor. We’re certainly not financial wizards, but we manage our debts and try as much as we can to live within our means. Meanwhile, we see people renovating homes, buying new cars, new clothes, paying for daycare, nannies, dinners out, vacations etc. etc. Are all of these people getting by on 12% of their incomes or is there a massive amount of credit spending happening behind closed doors?
There is definitely something askew when home ownership becomes so coveted and, at the same time, overpriced that people literally finance their lives away. I also feel like there is a giant PR machine at work, feeding our lust for land in this city. Now, I’m no economist, but what then happens when interest rates rise and families are not only sat with mortgages they cannot afford, but massive amounts of credit debt incurred to actually “live”? Unfortunately, many predict that this is when we will see a true “buyer’s market”, which could come at a cost to many who buy today.