[Newsbot]

Title: Real estate woes: The secret lives of house poor Canadians
Category: Misc CDN
Posted By: martin14
Date: 2015-05-26 04:38:59
Canadian

[martin14]

I expect we'll be reading more stories like this in the future.

Hang on to your hats.

[DrCaleb]

martin14 martin14:

Hang on to your hats.

On the contrary. My house is almost paid off, 10 years early. I'm working on a down payment for when one of these McMansions that come on the market cheaply.

[BRAH]

What it comes down to is buying a home within your means.

[Regina]

BRAH BRAH:

What it comes down to is buying a home within your means.

True!
We bought a small affordable home that we paid off quick (9 years) then lived for free and saved till found one we liked. Paid cash for it and still didn't have a mortgage. I could never understand why someone would buy some huge place they can't afford thinking someday they can afford it.

[Freakinoldguy]

DrCaleb DrCaleb:

martin14 martin14:

Hang on to your hats.

On the contrary. My house is almost paid off, 10 years early. I'm working on a down payment for when one of these McMansions that come on the market cheaply.

You're the exception not the rule and all you would have had to do was watch Vancouver TV this weekend to observe that. Not only are some people house poor, alot of them will have no chance of ever becoming that in quite a bit of Canada anymore.

I don't know how it is in the other cities in the country but according to the news incomes in Vancouver rose just over 37% in the last decade but, house prices increased over 121% during the same period which has left some new home purchasers out in the cold.

Now Mayor Moonbeam wants the Federal and Provincial gov'ts to do something about it by placing a new tax on people who speculate and foreign investors. Good luck with that one. Given the price of property in Vancouver the time to take action was 2 decades ago not now, especially since the people who are speculating and foreign investors will happily pay the tax and pass those costs on to the people they sell the homes to thereby increasing the costs of property even more.

But if you take a look around the world this isn't just a Canadian phenomenon it's happening pretty much everywhere people "want" to live. So unless you're willing set your goals considerably lower, to move to some much smaller place or a place with lousy weather, limited culture, limited sports, limited proper health care or decent local infrastructure you're going to pay the big bucks for property and likely end up house poor if you can even get in the market.

But then again, there's the "I want it all and I want it now crowd" living on credit who, just may inadvertently save Canada's housing market by crashing it when interest rates go up slightly allowing everyone a do over unless of course, you paid fair market value for your home in the first place which would mean you're screwed and will likely never own a home again thanks to that crowds inherent greed.

[DrCaleb]

Freakinoldguy Freakinoldguy:

DrCaleb DrCaleb:

martin14 martin14:

Hang on to your hats.

On the contrary. My house is almost paid off, 10 years early. I'm working on a down payment for when one of these McMansions that come on the market cheaply.

You're the exception not the rule and all you would have had to do was watch Vancouver TV this weekend to observe that. Not only are some people house poor, alot of them will have no chance of ever becoming that in quite a bit of Canada anymore.

Sadly, yes. But it's only because my parents made me read, and understand "The Wealthy Barber".

If more people got a simple education on how money and finance worked in school (Home Economics should be a mandatory course, for more than just lessons on finance!) then this whole speculative housing market wouldn't exist, I think. People, like me, would have said "200k for a home is outrageous! I won't pay that, I'll move somewhere that has reasonable housing prices!" And when business has no one to hire because they can't afford to pay people live there, perhaps something good will come out of it.

[Zipperfish]

I think an empty lot in North Vancouver goes for around $1.1M now. Crazy. We bought before it went crazy, but we're still in the "house poor" category. It's a "tiger by the tail" scenario. If we sell and get out of the market, we'll liekly never get back in again. On the other hand, you're always worried that interest rates will go up, and then having to sell at a loss to a flooded market.

Foreign speculation should be limited. We've got houses around here that just get flipped constantly--nobody ever moves in. But that's really just scribbling in the margins. The issue is that demand far outstrips supply, because Vancouver is a desirable place to live. We're constrained by geography (the mountains) so they are simply making it more and more dense, smaller condos.

[Brenda]

Most people I know are not even in the category 'house poor' and can certainly not count on a line if credit to survive...

Most rent and are one broken car away from homelessness.

[andyt]

All that fuss about foreign investors is bullshit. What's driving up housing prices is immigration into a region with limited land available. In Vancouver and surrounding areas, they're not building single family homes because there's no land available for it, only teardowns. But, a lot of the buyers are Chinese immigrants with money, so people assume they are foreign investors.

What do you expect when you have a desirable area to live and allow massive in mirgration? Same deal as Toronto, immigrants want to settle where the other immigrants did, not in the sticks. And there are often no jobs in the sticks, especially in white collar fields.

[martin14]

DrCaleb DrCaleb:

Sadly, yes. But it's only because my parents made me read, and understand "The Wealthy Barber".

I have the first one, the second I read real quickly on the ferry, some guy had it,
I borrowed it and sped red.
First was much better.

Zipperfish Zipperfish:

Foreign speculation should be limited. We've got houses around here that just get flipped constantly--nobody ever moves in. But that's really just scribbling in the margins. The issue is that demand far outstrips supply, because Vancouver is a desirable place to live. We're constrained by geography (the mountains) so they are simply making it more and more dense, smaller condos.

I don't buy that. There are huge tracts of land from Hope all the way to Maple Ridge.
It could be converted from farmland without any trouble.

Freakinoldguy Freakinoldguy:

But then again, there's the "I want it all and I want it now crowd" living on credit who, just may inadvertently save Canada's housing market by crashing it when interest rates go up slightly allowing everyone a do over unless of course, you paid fair market value for your home in the first place which would mean you're screwed and will likely never own a home again thanks to that crowds inherent greed.

This is true, along with almost predatory lending, and HELOCs from the parents.

It won't end well.



The couple in the story seem to be 2 paychecks away from being homeless.

When interest rates rise, they are in serious trouble.

[Zipperfish]

martin14 martin14:

I don't buy that. There are huge tracts of land from Hope all the way to Maple Ridge.
It could be converted from farmland without any trouble.

They aren't that constrained to the east, but then you're a lot further from the city, the mountains and the beach. Hope is still dirt cheap.

[andyt]

There's also the idea that it might be worth saving that farmland.

[BeaverFever]

It's not just foreign investors, it's domestic investors too. In places like Toronto and Vancouver, housing is actually no longer, just another trading commodity and the rate of inflation is unreasonable.

There should be a steep tax on property sales where the owner hasn't lived in the property for at least 2 years, over and above the capital gains tax.

[Zipperfish]

andyt andyt:

There's also the idea that it might be worth saving that farmland.

I doubt that the Land Reserve will stand up to the market for very long. Money talks and manure walks. ha ha ha God, I'm funny.