Buyer’s market? I ain’t buyin’ it…
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.
oh my goodness I completely believe the 12% thing. We rent, hubby has been out of work for MANY MANY months, we own no car and right now we’re living off of child tax: 550.00 (2 kids) UCC: 200.00 (2 kids) and my home daycare earnings which is 1200.00 in total. That is all I have to live off of each month, my rent is 950.00 so when daycare money comes in it all goes to rent basically and I am always a month behind on bills usually switching each month on who to pay. I can’t pay both and eat. We have NO CREDIT, I mean we have no money to be responsible with it so we don’t even have any. Our hydro is about 80.00 and out telus is 150.00 if not more each month. I have no idea how we do it. grace of God, my in laws buy our groceries a couple times a month… it is hard… degrading… embarrassing… sad.
I saw a your post yersterday and literally within 15 minutes saw this…wow! http://www.youtube.com/watch?v=6CvJbP9qPJs&feature=youtu.be
Credit spending yes….and look around. Alot of criminal activity too to finance lavish style of living. Or at least, a renovated home in town.
Great article! It seems the local media has finally decided to give people real information on the housing market, instead of realtor talking points!
It is 100% credit spending, the debt most people carry is alarming! Unless you come from old money (or criminal as pointed out a few comments up) you can’t afford to buy around here!
My husband and I took something called Financial Peace University (13 week course) and it changed our lives! We now only live on what we have and make sure we are putting money away for the future and for eventual house ownership.
Sadly, once I finish my degree unless we want to end up in a crappy 1 bedroom apartment we will likely have to go somewhere else in the country to accomplish this goal!
[...] business.” Recently I (and many others) saw a local realtor make a bold move. When the REBGV and media are saying BUY, he is saying SELL. I read Keith Roy’s blog post with a critical eye and was speculative [...]
[...] a buyer’s market in Vancouver. You know what that means, right? Not a whole heck of a lot for the average [...]
It’s pretty nuts. I’m 31, didn’t go to college but was lucky enough to have a skillset that got me started in a decent paying career when I was 20. We were lucky enough to buy a condo at age 24. But then we got heavily into debt (what I think is heavy, anyway). We sold our condo to pay that debt, saved up and then bought another one a year later. We now own a house in Maple Ridge and it’s incredibly tough to keep a home and stay out of debt. We have no kids, no drinking, smoking or vices, we hardly go out… and we make just under 6 figures. How the HELL does anyone in this region afford ANYTHING if a couple with barely any expenses is still scraping by on 100k a year? wtf.
I have no idea how we’ll make out when we have a child.